CAP-XX Limited
ABN 47 050 845 291
Annual report 2024
Page 2
Annual report 2024
Contents
Page
Corporate directory
Chief Executive review
Chairman’s report
Business review
Directors’ report
Independence declaration
Corporate governance statement
Financial statements
Directors’ declaration
Independent audit report to the members
3
5
6
8
11
18
19
28
69
70
Page 3
Corporate directory
Directors
Patrick Elliott
Chairman
Lars Stegmann
Chief Executive Officer
Peter Fraser (appointed 18 June 2024)
Non-Executive Director
Dr Anthony Sive (appointed 18 June 2024)
Non-Executive Director
Dr Graham Cooley (appointed 18 June 2024)
Non-Executive Director
Steen Feldskov
Non-Executive Director
Bruce Grey (resigned 3 November 2023)
Non-Executive Director
Secretaries
Robert Buckingham – resigned 1 September 2023
Michael Taylor – resigned 31 May 2024
Joanna Morbey – appointed 31 May 2024
Notice of annual general meeting
The annual general meeting of CAP-XX Limited
will be held at:
CAP-XX Limited
Unit 1
13A Stanton Road
Seven Hills NSW 2147
Australia
time: 7.00pm
date: 13 January 2025
Registered office
Unit 1
13A Stanton Road
Seven Hills NSW 2147 Australia
Principal place of business
Unit 1
13A Stanton Road
Seven Hills NSW 2147 Australia
Registrars to shares
Registrars to depositary interests
Computershare Investor Services Pty Limited
6 Hope St,
Ermington NSW 2115
Australia
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol
BS99 6ZY
United Kingdom
Page 4
Corporate directory (continued)
Nominated adviser and broker to the
Company
Allenby Capital
5 St Helen’s Place
London EC3A 6AB
Auditor
BDO
Level 11
1 Margaret Street
Sydney NSW 2000
Australia
Solicitors to the Company as to Australian
law
Dentons
77 Castlereagh Street
Sydney
New South Wales 2000
Australia
Solicitors to the Company as to English law
DAC Beachcroft
100 Fetter Lane
London EC4A 1BN
United Kingdom
Bankers
Commonwealth Bank of Australia
120 Pitt Street
Sydney, NSW 2000
Australia
Stock exchange listings
Shares are quoted on AIM, a market operated by London Stock
Exchange plc under the code CPX
Website address
www.cap-xx.com
Page 5
Chief Executive’s review
As I look back on the past financial year, I am pleased to share that despite a complex and evolving landscape, our company
has demonstrated remarkable resilience and strong growth in the passive electronics market. In a year marked by global
economic uncertainties, supply chain disruptions and shifting geopolitical dynamics, we have not only navigated these challenges
but have emerged stronger.
The passive electronic components market, like many others, faced significant headwinds due to geopolitical tensions, trade
disputes, increased sanctions and regulatory changes. These factors had a direct impact on global supply chains and market
access, while rising material costs and logistics delays added additional pressure. Many businesses were forced to rethink their
strategies in response to these evolving challenges.
However, we anticipated many of these developments early on and took decisive action. By investing strategically in research
and development (R&D) and intellectual property (IP) development, we were able to strengthen our competitive edge. Our
commitment to diversifying our supplier relationships, expanding sourcing strategies and investing in advanced technology
enabled us to effectively mitigate disruptions. Additionally, by focusing on regional activities, we reduced our dependency on any
single market and enhanced our ability to adapt to local regulatory requirements.
I am proud to report that, despite these challenges, we achieved robust sales growth and exceeded our internal FY24
expectations of A$4.4 million, with reported sales revenue of A$4.6 million for FY24. This success is a direct result of the
expertise, agility and commitment of our Distribution and Representative Network, as well as our exceptional internal team. Their
ability to swiftly respond to market shifts, coupled with a focus on operational excellence, allowed us to capitalise on the growing
demand for passive electronic components across key industries such as electric vehicles, telecommunications, healthcare,
Industrial IoT and renewable energy.
Looking ahead to the current financial year, we remain optimistic about our future prospects. While geopolitical tensions and
economic uncertainty continue to present challenges, we are confident that our strategic initiatives and talented workforce
position us well to thrive in this environment. Our focus will remain on innovation, operational efficiency and strengthening our
global Distribution Network, all while ensuring that we continue to be a trusted partner to our customers worldwide.
We are pleased to report that we successfully raised a total of GBP 2.15 million in April 2024. Since the financial year end, we
have conditionally raised a further GBP 3.025 million, subject to shareholder approval on 5 December 2024. These funds will
play a crucial role in securing the working capital necessary for our continued growth and expansion. Further, since the financial
year end, we have successfully onboarded the Swiss manufacturer SCHURTER AG as a new strategic partner and our vendor
accreditation with DigiKey Corporation in the USA has been upgraded from ‘Marketplace’ to ‘Fulfilment’. With this solid backing,
we are well-equipped to accelerate our plans and drive even greater success in the months ahead.
In closing, I would like to extend my deepest gratitude to our employees, whose unwavering dedication has been the driving
force behind our success. I also want to thank our shareholders for their continued trust and support. Together, we have built a
resilient and forward-looking business, poised to seize the opportunities that lie ahead.
Lars Stegmann
Chief Executive Officer
29 November 2024
Page 6
Chairman’s Report
FY24 was the first full year of CAP-XX’s transformation under the leadership of our CEO, Lars Stegman. Lars has made great
strides in turning CAP-XX into a customer-focussed designer, manufacturer and supplier of supercapacitor products based on
our proprietary technology. Key features of these changes include the appointment of new sales and customer support staff and
recruiting a team of distributors to provide CAP-XX with much wider market reach. It is early days in this transformation, but we
are now seeing strong growth in sales of our current product range.
To further transform CAP-XX, in June 2024, we added three new Non-Executive Directors who each bring a broad range of very
relevant experience and knowledge. Dr Graham Cooley, Peter Fraser and Dr. Anthony Sive were appointed in June 2024 and
have in the past few months proven invaluable to the ongoing transformation of the Company. In addition, we have appointed
Dr Alex Bilyk as Chief Technology Officer, Jo Morbey as Company Secretary, Keith Siu as Financial Controller and Claire Cheuh
as Customer Service lead. These appointments are all about making sure that the Company has the skills in all areas of
leadership to succeed in capitalising on the world-leading supercapacitor intellectual property that the Company has developed.
Revenue for FY24 was up 26%, from A$3.6 million to A$4.6 million. The increase of A$1.0 million is represented by a $1.3m
increase in product sales and a $0.3m decrease in licence revenue. However, our EBITDA loss increased to A$5.0 million
reflecting legal costs as well as costs related to the restructuring of the business. These restructuring costs are expected to be
substantially reduced in FY25 and are expensed even though they set the scene for subsequent improvements in trading
outcomes.
We had a significant set-back during the year as we lost our legal action against Maxwell Technologies. This action related to
patents that had expired so the legal result does not, in any way, impact our ongoing business and our current suite of intellectual
property. We have now settled all outstanding legal matters with both Maxwell Technologies and AVX Corporation. This enables
the Board and management to be focussed on improving the business performance via product sales.
Our over-arching immediate objective is to get into a cash flow breakeven position. This will require further growth in revenues.
For the first quarter of FY25, revenues grew at 36% ahead of the equivalent period in FY24. We consider this a strong
performance when compared to an overall sluggishness in global passive electronic components markets. In particular, we are
seeing a significant growth in Europe reflecting new design-ins and our expanded distribution network. If we can maintain this
rate of growth, then we would anticipate that the Company will start to record a cash breakeven position towards the end of
FY26. It should be noted that all the revenue to date in FY25, relate to our existing product set and none from the three new
product groups that we have been developing and are now releasing for customer evaluation.
Despite the trading losses and capital constraints, we have maintained our strong focus on research and development. During
the year, we filed two international patents. One of these is related to the development of the cylindrical surface mount technology
(“SMT”) which has the potential to revolutionise the way supercapacitors are mounted on printed circuit boards. These products
still achieve energy and power density levels comparable with our standard supercapacitors. The second patent relates to a new
polymer binder that enables high-temperature stability, improved environmental attributes and superior electrical performance.
Apart from use in electric double-layer supercapacitors, this new binder system can be applied to manufacture and support our
new SMT product to withstand the high temperatures of any reflow oven. Further it could be used in any battery supply.
Subsequent to the end of the financial year, we have filed an additional two international patents that build upon the technologies
developed around the SMT and the new polymer binder.
We consider these technology developments as break-through, and it is important to have the IP protected by patents.
We have also entered into a strategic technology partnership with SCHURTER AG which has also acquired a 4.69%
shareholding in the Company. Through this partnership SCHURTER and CAP-XX will work closely together on technology
development and co-branded supercapacitor products. By combining their extensive knowledge and capabilities, CAP-XX and
SCHURTER aim to jointly develop innovative, competitive products and new application-specific solutions for the industrial
market. This partnership with SCHURTER offers great potential for CAP-XX especially in further development and the
introduction of our new product ranges.
On commercialising these technologies, we have made excellent progress in finalising the development of the SMT range and
have produced ex-plant samples from our Seven Hills facility for evaluation by our major customers.
The SMT range is break-through technology that, for the first time, allows a supercapacitor to withstand the high temperatures
of a re-flow oven. This will enable CAP-XX supercapacitors to be included in electronic devices manufactured by automated
assembly lines, with significantly reduced costs. We expect this to enable our SMT device to penetrate many high-volume
applications.
We are now in the process of pursuing design wins that would lead to purchase orders and much higher manufacturing volumes.
The second, new product range we have been developing is the DMH range of very thin (0.4 mm) supercapacitors. This provides
a form factor suitable for numerous IoT, medical, wearables, telecommunications, drones and other industrial sectors. We are
not aware of any competing supercapacitors that are this thin, so believe we have a significant competitive advantage for many
potentially high-volume applications. Customer evaluation is underway and initial feedback is encouraging.
Page 7
Our third significant new product development is the 3V supercapacitor product which we can now produce in volume. 3V
supercapacitors offer cost-savings in electronic manufacture as it matches 3V battery systems with a supercapacitor for surge
power requirements.
In addition to the development of our own proprietary technologies, we continue to evaluate other related technology
developments and, where appropriate, enter into commercial arrangements for evaluation and potential commercialisation. In
line with this approach, we have entered into a Joint Venture with Ionic Industries to develop their graphene technologies for
supercapacitors. Post the financial year end, we entered into a Memorandum of Understanding with National University of
Singapore's Institute for Functional Intelligent Materials ("NUS I-FIM") for collaborative research and development efforts in the
field of new technology and substrates.
During the financial year, we raised £2.15 million in equity capital, via a combination of a placing, subscription and retail offer
which was completed in April 2024. The proceeds were mainly applied to settle litigation expenses, restructuring costs and
general working capital. We are grateful for the support of our shareholders through the provision of the necessary capital. Since
the financial year end, we have conditionally raised a further £3.025 million in equity capital in a similar structure to further
enhance the Company’s financial position and pursue its strategies. Part of the capital raise is subject to shareholder approval
on 5 December 2024
To ensure that we maximise the benefits of our existing product range and new products, we have also expanded our distribution
network. As an integral part of our new distribution strategy, we are ensuring that the customer and their specific requirements
are the core focus. The CAP-XX direct sales force is being expanded to ensure that a greater geographic reach is in place while
CAP-XX representatives will have smaller regional territories, with a significant increase in customer communication. To ensure
that cash reserves are conserved, the additional sales representatives are being engaged on a commission basis. This has
already resulted in driving short-term sales growth and early results are promising. New sales representatives are currently in
place in the US (four), Europe (one) and South Africa (one).
Whilst our FY24 results remain below break-even, we have numerous reasons to believe that CAP-XX is on a trajectory to
become profitable under Lars Stegmann’s leadership. Paramount to this is the strong team of employees we have who have
embraced and are contributing to the changes that are needed to enable CAP-XX to perform well for its customers and
shareholders while meeting or exceeding the necessary standards of ESG. We are indebted to all of our staff.
The Board is confident that becoming customer-centric with much improved market knowledge, our distribution strategy, and
new product introductions will drive the increase in revenues, so the Company achieves its positive EBITDA goal in the shortest
possible time frame.
Patrick Elliott
Chairman
29 November 2024
Page 8
Business Review
Review of Operations and Activities
CAP-XX has made significant strides in its ongoing transformation process, aimed at optimising operations and management to
ensure sustainable growth. This strategic initiative has been designed to address both operational efficiency and financial
stability, focusing on reducing our burn rate while maintaining the high standards of innovation that define our brand. The
adjustments we have implemented are geared towards building a leaner, more adaptive organisation, better suited to navigate
the current market landscape and secure long-term success.
Operational Changes
To improve operational efficiency, we have streamlined our planning and working processes through a series of targeted
changes:
1. Optimisation of Production Processes: We have implemented advanced resource planning tools and automated
workflows that minimise waste and improve production timelines. This has enabled us to reduce excess inventory and better
align production capacity with market demand.
2. Focus on Core Competencies: By concentrating resources on high-impact projects and deprioritising non-core activities,
we have increased our focus on areas that drive the most value. This shift has allowed us to reallocate efforts towards product
innovation and customer-centric solutions.
3. Digital Transformation of Workflows: Our adoption of digital tools has automated many administrative and repetitive tasks,
freeing up our teams to focus on strategic initiatives. This transition will lead to a significant reduction in operational costs,
alongside faster and more efficient project delivery.
Management Adjustments
As part of our transformation, we have also made adjustments to our management structure to ensure alignment with our
strategic goals:
1.
Restructuring of Management Team: To support our streamlined operations, we have restructured our management
team, focusing on empowering key leaders who can drive agility and innovation. This includes redefining roles and
responsibilities to ensure that decision-making is faster and more efficient.
2.
Cost-Sensitive Budgeting Approach: Our new budgeting framework is centred on reducing unnecessary expenditures.
We have implemented more stringent financial controls across departments, with a focus on monitoring project budgets
and prioritising initiatives that promise the highest return on investment.
3.
Enhanced Employee Training Programs: We will introduce training programs that promote a culture of efficiency and
continuous improvement among our workforce. This initiative will not only improve skillsets but will also foster a mindset
of ownership and accountability at all levels.
These transformations have already delivered measurable improvements. Our cash burn rate has decreased by a substantial
percentage over the past 12 months, aligning our cash flow with our long-term financial targets. Moreover, the emphasis on
optimised planning and enhanced operational discipline has resulted in faster project turnaround times and an improved ability
to respond to market shifts. The Company is now better positioned to maintain its leadership in the technology sector while
pursuing sustainable growth in a rapidly changing environment.
Looking ahead, we remain committed to further refining our operational strategies and management practices. By maintaining
our focus on efficiency, innovation, and fiscal discipline, we are confident in our ability to navigate upcoming challenges and
seize new opportunities. Our continued investment in technology and talent will ensure that we remain at the forefront of industry
advancements, all while delivering consistent value to our stakeholders.
In summary, the past year has been one of transformation and progress. We are proud of the steps we have taken to optimise
our planning and working processes, and we look forward to building on this momentum in the year to come.
Page 9
Business Environment
The current supercapacitor market, particularly in the Electric Double-Layer Capacitor (EDLC) segment, is characterised by rapid
growth driven by increasing demand for energy storage solutions in various applications, including electric vehicles, renewable
energy systems, IoT, medical healthcare and industrial equipment. EDLCs are favoured for their high-power density, long cycle
life and fast charging capabilities, making them ideal for applications requiring quick bursts of energy and reliable performance.
Within the EDLC segment, prismatic supercapacitors have gained traction due to their compact form factor and ease of
integration into space-constrained devices. Prismatic designs offer higher energy density compared to cylindrical counterparts,
making them suitable for emerging applications like automotive power systems, grid storage, IoT, medical healthcare and
advanced electronics.
Despite growing market opportunities, the competitive landscape remains intense with pressure on pricing due to the influx of
new manufacturers and the pursuit of economies of scale. However, innovations in materials and improvements in energy density
present significant opportunities for differentiation. Companies that can balance cost-efficiency with high-performance
characteristics are well-positioned to capture market share and drive growth in this expanding industry.
Opportunities
The supercapacitor market continues to present significant opportunities for growth, driven by the increasing demand for high-
efficiency energy storage solutions across automotive, renewable energy, IoT, healthcare and industrial electronic sectors. Our
expanded product portfolio, including DMH (smallest formfactor with 0.4mm), DMV (3 Volt version), and SMT (Surface-Mount
Technology) supercapacitors, positions us to capture emerging market opportunities and meet diverse customer needs.
The DMH and DMV models are designed to offer superior energy density and enhanced power capabilities, ideal for applications
such as wearables, industrial power systems and advanced energy storage. These products align with the market’s shift towards
electrification and the need for efficient, fast-charging solutions.
The SMT line, offering compact, surface-mounted supercapacitors, caters to miniaturised devices in consumer electronics and
IoT applications, where space and power efficiency are critical. This product range enables us to serve new markets and diversify
our revenue streams while maintaining our competitive edge through advanced design and integration capabilities.
By strategically expanding into these segments, we aim to leverage our innovation capabilities and secure a strong foothold in
the high-growth areas of the supercapacitor market, ensuring long-term profitability and market leadership.
Research and Development
The markets in which the Company operates are competitive and are characterised by rapid technological change. CAP-XX has
a strong competitive position in prismatic supercapacitors in all of its target markets as a result of its capability to produce
supercapacitors with a high energy and power density in a small, conveniently sized, flat package. CAP-XX’s devices are also
lightweight, work over a broad temperature range and have an operating lifetime measured in years.
The Company's success depends on its ability to protect and prevent any infringements of its intellectual property. To protect
this important asset, the Company has considerable intellectual property embodied in its patents covering the design,
manufacture and use of its high-performance supercapacitors. The CAP-XX patent portfolio currently consists of seven patent
families, with seven granted national patents with an additional two patent applications pending in various jurisdictions. The
Company’s intellectual property strategy has been to build value by focusing on opportunities to capture market share and
exclude competition, with an IP portfolio capable of generating licensing revenue. The Directors believe that comprehensive
embodiments and interlocking patent groups, combined with a ‘quick to file, quick to abandon’ policy, have given the Company
a strong and focused IP portfolio.
Outlook
The major focus for CAP-XX continues to be towards becoming profitable and cashflow positive in FY26. This will be achieved
by the transformation process to increase efficiency and lower costs, through an increased focus on the customer supported
with a stabilised distribution network, supplemented by the newly launched product families and the intellectual property which
the Company is continuously developing.
Page 10
Financial performance
A reconciliation of the loss attributable to the owners of CAP-XX Limited as reported in the consolidated statement of profit or
loss through to EBITDA and Adjusted EBITDA is tabled below:
EBITDA and Adjusted EBITDA Calculation
Consolidated
2024
2023
AUD
AUD
Loss attributable to owners of CAP-XX Limited
(5,987,297)
(5,559,127)
Depreciation / Amortisation
734,726
741,552
Interest Expense
307,268
287,208
Interest Income
(4,929)
(664)
EBITDA
(4,950,232)
(4,531,031)
Share Based payments
131,399
613,980
Add back: Non-recurring costs
Legal costs incurred in resolving licence fee disputes
2,218,388
1,472,664
Credit loss associated with licence fee disputes
75,652
189,491
Restructuring costs
954,338
-
CEO transition costs
-
872,122
Deduct: Non-recurring income
Licence fees and royalties recognised in the year
-
(342,998)
Adjusted EBITDA
(1,570,455)
(1,725,772)
The Company reported an EBITDA loss of A$5.0 million in FY24. The EBITDA loss increased by $0.4m from FY23 mainly due
to the increase in costs associated with resolving the legacy licence fee disputes.
Adjusted EBITDA for FY24 excludes non-recurring transactions associated with resolving the licence fee disputes and the costs
incurred in FY24 from restructuring the business. Adjusted EBITDA for FY23 excludes non-recurring transactions associated
with resolving the licence fee disputes, the CEO transition costs and excludes non-recurring income following the settlement of
the licence fee disputes. Adjusted EBITDA loss has decreased by $0.2m when comparing FY23 performance to FY24.
Certain financial information in the Chairman's Report and Business Review reference Earnings Before Interest, Tax,
Depreciation and Amortisation (EBITDA) and adjusted EBITDA have been derived from the audited financial statements.
EBITDA and adjusted EBITDA positions are non-IFRS financial information used by the Directors and Management to assess
the underlying performance of the business and as such have not been audited.
Page 11
Directors Report
Your directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of CAP-XX Limited
(the Company or CAP-XX) and the entities it controlled at the end of, or during, the year ended 30 June 2024.
Directors
The following persons were directors of CAP-XX Limited during the financial year and up to the date of this report:
Patrick Elliott
Chairman
Steen Feldskov Non-Executive Director
Lars Stegmann
Chief Executive Officer
Bruce Grey
Non-Executive Director (resigned 3 November 2023)
Dr Graham Cooley Non-Executive Director (appointed 18 June 2024)
Peter Fraser Non-Executive Director (appointed 18 June 2024)
Dr Anthony Sive Non-Executive Director (appointed 18 June 2024)
Principal activities
The Group’s principal continuing activities during the financial year consisted of the development, manufacture and sale of
supercapacitors. There have been no significant changes in the nature of the Group’s activities.
Review of operations
The Group recorded a net loss of $5,987,297 during the year ended 30 June 2024 (2023: loss of $5,559,127). Information on the
operations and financial position of the Group and its business strategies and prospects is set out on pages 8 to 10 of this Annual
Report.
Significant changes in the state of affairs
There were no significant changes in the group's state of affairs during the financial year ended 30 June 2024.
Matters subsequent to balance date
Since the end of the financial year, the following matters have arisen:-
•
On 1 July 2024, the Company granted options over 130,000,000 ordinary shares in the Company to the directors.
•
On 16 July 2024, CAP-XX announced that the Company had signed a Memorandum of Understanding with SCHURTER
AG (“SCHURTER”) to work closely together on technology development and co-branded supercapacitor products.
SCHURTER is a world leading Swiss technology company that manufactures and markets components for circuit
protection, as well as connectors, switches, EMC and HMI products. SCHURTER currently holds 4.69% of the
Company’s issued ordinary share capital.
•
On 5 August 2024, CAP-XX announced that it had received a notice to exercise warrants over 85,000,000 new ordinary
shares in the Company at an exercise price of 0.15 pence per warrant, raising approximately £127,500 for the Company.
•
On 14 August 2024, the Company granted options over 60,000,000 ordinary shares in the Company to certain
employees.
•
The necessary paperwork associated with the receipt of the R&D Tax rebate for the 2024 financial year is in the final
stages of being lodged with the relevant Government authorities and is expected to be received before the end of
January 2025. The rebate is expected to be approximately A$1.9 million.
•
On 31 October 2024, CAP-XX announced that the Company had conditionally raised £0.25 million (before expenses) as
a result of certain directors of the Company confirming their intention to subscribe for 227,272,700 new ordinary shares
("Subscription Shares") at the Issue Price of 0.11 pence per Ordinary Share.
•
On 1 November 2024, CAP-XX announced that the Company had conditionally raised £2.5 million (before expenses)
pursuant to a placing of 2,272,727,200 new ordinary shares ("Placing Shares") at the Issue Price of 0.11 pence per
Ordinary Share. The shares will be issued in two tranches. 363,983,965 Placing Shares (the "First Placing Shares")
have been issued under the Company's existing authorities on 7 November 2024.
•
On 5 November 2024, CAP-XX announced that the Company had conditionally raised £0.275 million (before expenses)
pursuant to the completion of its retail offer of 250,000,000 new ordinary shares (“Retail Offer”) at the Issue Price of 0.11
pence per ordinary share
•
Application will be made for 1,908,743,235 Placing Shares (the "Second Placing Shares") to be admitted to trading on
AIM (“Admission”). Subject to, inter alia, the passing of the resolutions at the General Meeting, it is expected that
Admission, and commencement of dealings, will take place at 8.00 a.m. on or around 9 December 2024.
•
The Second Placing Shares, the Retail Offer and the Subscription Shares are conditional, inter alia, on the passing of a
resolution by Shareholders at the General Meeting to be held at the offices of the Company on 5 December 2024.
There were no other matters or circumstances that have arisen since 30 June 2024 that have significantly affected, or may
significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Page 12
Directors’ report (continued)
Dividends
No dividends were paid, declared or recommended during the financial year or since 30 June 2024.
Likely developments and expected results of operations
Information on likely developments in the Group’s operations and expected results of operations have been discussed in the
Chairman’s Statement and Business Review.
Environmental regulation
The Group holds an Environment Protection licence and is subject to standard waste management environmental regulations in
respect of its research and manufacturing activities conducted at Seven Hills, Sydney, Australia. The licence requires discharges
to air and water to be below specified levels of contaminants, and solid wastes to be removed to an appropriate disposal facility.
These requirements arise under the Clean Air Act 1961, Clean Waters Act 1970, Pollution Control Act 1970, Noise Control Act
1975 and the Waste Minimisation & Management Act 1995.
During the year there were no breaches of the regulatory requirements.
Information on Directors
Patrick Elliott Non-executive Chairman. Age 72.
Experience and qualifications - Pat is a company director specialising in the resources sector with over 40 years’ experience
in investment and corporate management. His early career was at Consolidated Gold Fields Australia Limited and covered
investment analysis and management, minerals marketing (copper, tin, rutile and zircon). In 1979 he went into investment
banking and became Head of Corporate Finance for Morgan Grenfell Australia Limited in 1982. Pat subsequently became
Managing Director of Natcorp Investments Ltd in 1986, which owned a number of manufacturing businesses. After its takeover
he became an active early-stage venture capital investor with an emphasis on resources. He is a director of the NYSE-listed
Tamboran Resources Corporation. He is also a director of Rockfire Resources PLC and Kirrama Resources Pty Limited as well
as a number of privately owned companies. Pat holds an MBA in Mineral Economics (Macquarie University) and B Comm.
(University NSW) and B.Sc. (Auckland University).
Specific Board responsibilities
Chair of the Nomination Committee
Member of the Remuneration Committee
Interests in shares and options
35,864,421 (2023: 12,973,298) ordinary shares in CAP-XX Limited (including shares held by Panstyn Investments Pty Limited).
12,300,000 (2023: 2,300,000) options over ordinary shares in CAP-XX Limited.
Lars Stegmann Chief Executive Officer. Age 54.
Experience and qualifications - Lars has spent more than two decades in international sales, project, and management roles.
Lars has considerable experience in the field of power electronics, electronic components and systems, as well as extensive
sales and marketing background in the automotive, automation, industrial, marine and medical technology industries. Prior to
joining CAP-XX, Lars worked as Vice President and General Manager of C&K, the electronics switch and component
manufacturer which is now part of Littelfuse Inc.
Lars holds an engineering degree (Dipl. Ing.) in power electronics and an MBA from Zurich International Business School. He is
based in Hamburg Germany.
Specific Board responsibilities
Nil
Interests in shares and options
8,500,000 (2023: Nil) ordinary shares in CAP-XX Limited.
100,000,000 (2023:20,000,000) options over ordinary shares in CAP-XX Limited.
Page 13
Directors’ report (continued)
Information on Directors (continued)
Bruce Grey Non-executive director. Age 78. (resigned 3 November 2023)
Experience and qualifications - Bruce most recently was Managing Director of the Advanced Manufacturing Cooperative
Research Centre and previously Managing Director of the Bishop Technology Group Limited. Bruce was Chairman of Advanced
Braking Technology Limited listed on the ASX from 2013 to 2018. Bruce has been an Executive Director of two Australian public
companies and for 10 years until 2009, was Chairman of a German joint venture between Bishop and Mercedes-Benz
Lenkungen GmbH. Bruce has more than 25 years’ experience in managing industry R&D and 30 plus years’ experience in
international commercialisation of Australian innovation and has been directly responsible for creating new manufacturing
facilities in Germany, Thailand and South Korea and indirectly the US, all based on Australian innovation. Bruce was Group
General Manager of Clyde Industries Limited from 1985 until 1995. In 2005 Bruce was appointed Chairman of the Federal
Government’s Advanced Manufacturing Action Agenda.
Bruce is currently Chairman of the Industry Advisory Network for the University of NSW, Faculty of Engineering, School of
Manufacturing Engineering. He is also currently Senior Consultant for Cavendish Associates.
Bruce was a director of the Murdoch Children’s Research Institute and Chairman of the IP and commercialisation committee
and a member of the audit, finance and risk committee from 2011 to 2018. In 2012 Bruce was appointed to the Australian
Federal Government's Clean Technology Investment Committee. Bruce is a Fellow of the Australian Academy of Technological
Sciences and Engineering.
Specific Board responsibilities
Member of the Audit Committee retired 3 November 2023
Member of the Remuneration Committee retired 3 November 2023
Interests in shares and options
9,689,987 ordinary shares in CAP-XX Limited (including shares held by Grey Invest Pty Limited).
2,300,000 options over ordinary shares in CAP-XX Limited.
Steen Feldskov Non-executive director. Age 66.
Experience and qualifications - Steen joins the CAP-XX board with nearly 40 years of experience working in the electronics
industry, with approximately half of that time involved in the sale and marketing of electronic components and the remainder in
senior management roles for electronics companies. He is currently the Country Manager for the Danish office of Hamamatsu
Photonics Norden AB, a subsidiary of the Tokyo-listed Hamamatsu Photonics K.K. the Japanese manufacturer of optical
sensors, electric light sources, and other optical devices.
Steen received a Bachelor of Science degree in Electrical Engineering from the University of Southern Denmark and a Bachelor
of Commerce degree in Marketing from the Copenhagen Business School, Denmark. Steen is also a Member of the Danish
Management Society
Specific Board responsibilities
Member of the Audit Committee
Member of the Remuneration Committee
Interests in shares and options
5,400,000 (2023:400,000) ordinary shares in CAP-XX Limited
12,300,000 (2023:2,300,000) options over ordinary shares in CAP-XX Limited
Peter Fraser Non-executive Director. Age 65.
Appointed 18 June 2024
Experience and qualifications - Peter is a qualified chartered accountant with over 30 years of experience in investment
banking and corporate advisory. He currently provides ad hoc financial consulting services to corporates and holds a consulting
arrangement with Henslow, the Australian member of global advisory network, Oaklins. Peter has extensive expertise in M&A,
corporate strategy and capital raisings. Advisory roles have included working with technology companies specialising in mobile
communications and high-tech materials, and running domestic and cross-border transactions across a range of other sectors
such as, media, healthcare, business services and mining.
Peter has a Bachelor of Arts degree (in accountancy and business studies) from the University of Strathclyde, and is a member
of the Institute of Chartered Accountants of Scotland. Peter also graduated as an associate member of the Securities Institute of
Australia.
Specific Board responsibilities
Chairman of the Audit Committee
Page 14
Directors’ report (continued)
Information on Directors (continued)
Interests in shares and options
Nil ordinary shares in CAP-XX Limited
10,000,000 options over ordinary shares in CAP-XX Limited
Dr Graham Cooley Non-executive Director. Age 60.
Appointed 18 June 2024
Experience and qualifications - Graham started his career in the power sector in 1989, joining the CEGB and becoming
Business Development Manager at National Power plc (the UK’s largest power generator) and then International Power plc,
developing energy storage and new generation technologies. Graham has raised a total of over £600m for British Cleantech
SMEs. Graham was CEO of ITM Power plc, the first hydrogen related company listed on the London Stock Market, a founding
member of the UK Government’s Hydrogen Advisory Council and a Board Member of RenewableUK.
Graham has a BSc. Hons in Physics from Cardiff University, an MPhil and PhD in Materials Physics from Brunel University and
an MBA from Bradford University Business School. Graham is an Honorary Professor at Brunel University, a Fellow of The
Energy Institute (FEI), The Institute of Metals, Minerals and Mining (FIMMM), The Institution of Engineering and Technology
(FIET) and was awarded the Lifetime Fellowship Award by The Bessemer Society. Graham is currently a Non-Executive
Director of Cadent Gas and Non-Executive Chairman of Light Science Technologies (AIM: LST).
Specific Board responsibilities
Member of the Nomination Committee
Chair of the Remuneration Committee
Interests in shares and options
355,000,000 ordinary shares in CAP-XX Limited
10,000,000 options over ordinary shares in CAP-XX Limited.
Dr Anthony Sive Non-executive Director. Age 65.
Appointed 18 June 2024
Experience and qualifications - Anthony brings over 30 years of international business and management experience, with a
particular focus on the manufacturing industry across various sectors. He has a proven track record in driving strategic
transformation, enhancing operational efficiency and providing leadership in high-growth environments. His expertise includes
digital transformation, business turnaround and growth. Anthony's strategic insight and pragmatic approach to business
challenges make him a valuable addition to the board of CAP-XX Limited.
Anthony holds a PhD in Engineering from the University of Cape Town, an MCom in Advanced Finance from UNSW, and a BSc
in Mechanical Engineering from the University of the Witwatersrand. He is also a Chartered Professional Engineer (MIEAust
CPEng NER APEC Engineer IntPE (Aus)) and a Graduate of the Australian Institute of Company Directors (GAICD).
Specific Board responsibilities
Member of the Audit Committee
Member of the Remuneration Committee
Interests in shares and options
Nil ordinary shares in CAP-XX Limited
10,000,000 options over ordinary shares in CAP-XX Limited
Information on Company Secretaries
The Company Secretary was Robert Buckingham (resigned 1 September 2023). Robert was appointed Company Secretary on
20 April 2006 and is Managing Partner of Allan Hall Partnership, Chartered Accountants, a position he has held since 1989. He
has a Bachelor of Commerce degree (honours) from the University of New South Wales and is a member of Chartered
Accountants Australia & New Zealand and a Member of CPA Australia.
Michael Taylor, Chief Financial Officer, was appointed as Co-Company Secretary, on 25 November 2008 (resigned 31 May
2024). Michael graduated from Kuring-Gai College with a Bachelor of Business and from Macquarie University with a Master of
Applied Finance. He is a Member of CPA Australia.
Joanna Morbey was appointed Company Secretary on 31 May 2024. Joanna is a member of Chartered Accountants Australia
and New Zealand (CA ANZ), she brings over 40 years of professional experience in accounting and company secretarial roles
across various industries, including investment banking, property development, and mineral exploration. Joanna has served as
Company Secretary for several listed companies in Australia.
Page 15
Directors’ report (continued)
Meetings of Directors
The number of meetings of the Company’s board of directors and of each board committee held,
during the year ended 30 June 2024, and the number of meetings attended by each director were:
Full Meetings
of Directors
Audit Committee
Meetings
Remuneration Committee
Meetings
A
B
A
B
A
B
Patrick Elliott
18
18
2
2
1
1
Bruce Grey *
2
2
-
-
-
-
Steen Feldskov
18
18
2
2
1
1
Lars Stegmann
18
18
2
2
1
1
Peter Fraser
2
2
-
-
-
-
Anthony Sive
2
2
-
-
-
-
Graham Cooley
2
2
-
-
-
-
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a member of the committee during the year
* Mr Bruce Grey resigned on 3 November 2023
Directors’ remuneration
Year ended 30 June 2024
Details of the remuneration of each director of CAP-XX Limited, for the year ended 30 June 2024, are set out in the following
table. The cash bonuses are dependent on the satisfaction of performance conditions. All other elements of remuneration are
not directly related to performance.
2024
Primary
Post-employment
Equity
Name
Cash salary
& accrued
fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Retirement
benefits
$
Options
$
Total
$
Executive directors
Lars Stegmann
403,271
-
-
44,360
-
90,702
538,333
Non-executive directors
Patrick Elliott
-
-
51,948
-
-
35,921
87,869
Peter Fraser
1,950
-
-
215
-
-
2,165
Dr Anthony Sive
1,950
-
-
215
-
-
2,165
Dr Graham Cooley
1,950
-
-
215
-
-
2,165
Bruce Grey *
-
-
17,316
-
-
11,975
29,291
Steen Feldskov
20,826
-
25,974
5,148
-
35,921
87,869
Total
429,947
-
95,238
50,153
-
174,519
749,857
* Mr Bruce Grey resigned on 3 November 2023.
Page 16
Directors’ report (continued)
Directors’ remuneration (continued)
Year ended 30 June 2023
Details of the remuneration of each director of CAP-XX Limited, for the year ended 30 June 2023, are set out in the following
table. The cash bonuses are dependent on the satisfaction of performance conditions. All other elements of remuneration are not
directly related to performance.
2023
Primary
Post-employment
Equity
Name
Cash
salary and
accrued
fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Retirement
benefits
$
Options
$
Total
$
Executive directors
Anthony Kongats *
541,933
-
-
59,104
322,103
109,326
1,032,466
Lars Stegmann
74,477
-
-
7,448
-
15,117
97,042
Non-executive directors
Patrick Elliott
Bruce Grey
-
-
-
-
48,998
48,998
-
-
-
-
35,921
35,921
84,919
84,919
Steen Feldskov
-
-
48,998
-
-
57,464
106,462
Total
616,410
-
146,994
66,552
322,103
253,749
1,405,808
* Anthony Kongats resigned on 16 May 2023.
Loans to directors and executives
The Group has no loans to directors and/or executives.
Share options granted to directors and employees
Since the end of the financial year:-
130,000,000 (2023: nil) options over unissued ordinary shares of CAP-XX have been granted to the directors of the
Company as part of their remuneration; and
60,000,000 (2023: nil) options over unissued ordinary shares of CAP-XX have been granted to certain employees of the
Company as part of their remuneration.
Refer to Note 30 to the financial statements for details on options issued and cancelled during the year.
Shares under option
Unissued ordinary shares of CAP-XX Limited under option at the date of this report are as
follows:
Date Options Granted
Expiry Date
Issue Price of
Shares
Number
Under Option
14 October 2021
14 October 2026
£0.0595
11,865,000
12 April 2022
13 May 2023
25 April 2024
1 July 2024
14 August 2024
12 April 2027
13 May 2028
25 April 2029
1 July 2029
14 August 2029
£0.0560
£0.0131
£0.0015
£0.0080
£0.0080
2,300,000
20,000,000
200,000,000
130,000,000
60,000,000
424,165,000
No option holder has any right under the options to participate in any other share issue of the Company or of any other entity.
Page 17
Directors’ report (continued)
Indemnification
CAP-XX has agreed to indemnify the current directors and executive officers of the Group and former directors of the Company
against all liabilities to another person (other than the Company or a related body corporate) that may arise from their position as
directors of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith.
The agreement stipulates that the Company will meet the full amount of any such liabilities, including costs and expenses.
No indemnities have been given to any person who is or has been an auditor of the Group.
Proceedings on behalf of the Company
No person has applied to the court under section 237 of the Corporations Act 2001, for leave to bring proceedings on behalf of the
Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking responsibility on behalf of the
Group, for all or part of those proceedings.
Insurance Premiums
The directors have not included details of the nature of the liabilities covered nor the amount of the premium paid in respect of the
Directors’ and Officers’ liability insurance contracts, as such disclosure is prohibited under the terms of the contract.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page
18.
Non-audit Services
It is the Group’s policy to employ BDO on assignments additional to their statutory audit duties where BDO's expertise and
experience with the Group are important. These assignments are principally tax advice where BDO is awarded assignments on a
competitive basis. It is the Group’s policy to seek competitive tenders for all major consulting projects.
Details of the amounts paid or payable to the auditor (BDO) for audit and non-audit services provided, during the year, are set out
in Note 24 to the financial statements.
The Directors are of the opinion that the services disclosed in Note 24 to the financial statements do not compromise the external
auditor's independence requirements of the Corporations Act 2001 for the following reasons:
(a) all non-audit services have been reviewed and approved to ensure that they do not impact on the integrity and objectivity
of the auditor; and
(b) none of the services undermine the general principles relating to auditor independence set out in APES110 Code of Ethics
for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or
auditing the Auditor's own work, acting in a management or decision-making capacity for the Company, acting as an advocate
for the Company, or jointly sharing economic risks and rewards.
This report is made in accordance with a resolution of the directors.
Patrick Elliott
Director
Sydney
29 November 2024
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
DECLARATION OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF CAP-XX LIMITED
As lead auditor of Cap-XX Limited for the year ended 30 June 2024, I declare that, to the best of my
knowledge and belief, there have been:
1.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2.
No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Cap-XX Limited and the entities it controlled during the year.
Gareth Few
Director
BDO Audit Pty Ltd
Sydney
29 November 2024
Page 19
Corporate Governance Statement
THE QUOTED COMPANY ALLIANCE (QCA) CODE
The Directors recognise the importance of good corporate governance and have chosen to adopt and apply the 2018
Quoted Companies Alliance Corporate Governance Code (the ‘QCA Code’). The QCA Code was developed by the QCA
in consultation with a number of significant institutional small company investors, as an alternative corporate
governance code applicable to AIM companies. The underlying principle of the QCA Code is that “the purpose of good
corporate governance is to ensure that the company is managed in an efficient, effective and entrepreneurial manner
for the benefit of all shareholders over the longer term”.
To determine how the Company addresses the key governance principles defined in the QCA code please refer to the
below table.
Pat Elliott, Non-executive Chairman
THE PRINCIPLES OF THE QUOTED COMPANY ALLIANCE (QCA) CODE
DELIVER GROWTH
QCA Code Principle
Application (as set out by QCA)
What we do and why
1. Establish a strategy and
business model which promote
long-term value for shareholders
The board must be able to express a
shared view of the company’s
purpose, business model and
strategy. It should go beyond the
simple description of products and
corporate structures and set out how
the company intends to deliver
shareholder value in the medium to
long-term. It should demonstrate that
the delivery of long-term growth is
underpinned by a clear set of values
aimed at protecting the company
from unnecessary risk and securing
its long-term future.
The Company’s overall immediate
business strategic objective is to
obtain at a minimum, an operating
cash breakeven position by
increasing the adoption of the
Company’s intellectual property
and products, both large and small,
into key target markets via future
license deals, joint ventures and
direct product sales. Once this has
been achieved, the Company will
continue to further develop and
drive the adoptions of its
intellectual property so that the
Company achieves significant profit
levels.
The key challenges to the business
and how these are mitigated is
detailed on pages 8 to 10 of the
Group’s Annual Report and
Accounts for the year ended 30
June 2024 under the “Business
Review” heading.
2. Seek to understand and meet
shareholder needs and
expectations
Directors must develop a good
understanding of the needs and
expectations of all elements of the
company’s shareholder base.
The board must manage
shareholders’ expectations and
should seek to understand the
motivations behind shareholder
voting decisions.
The CAP-XX Board is aware of the
need to protect the interests of all
shareholders, balancing the
interest of minority shareholders
with those of institutional
shareholders.
The Board regards regular
communications with shareholders
as one of its key responsibilities.
CAP-XX is committed to engaging
with shareholders and this effort is
led by the Chief Executive Officer.
In order to gauge shareholder
sentiment, CAP-XX meets with key
Corporate Governance Statement (continued)
Page 20
QCA Code Principle
Application (as set out by QCA)
What we do and why
institutional shareholders typically every
six months and when necessary,
solicits feedback from its larger
shareholders via its NOMAD and
broker. CAP-XX welcomes shareholder
contact at any time and
communications should be sent in the
first instance to
mailto:investor.relations@cap-xx.com.
CAP-XX will generally exercise
discretion responding to individual
shareholders correspondence but will
update the market via regulatory and
non-regulatory announcements and via
its annual and interim financial reports.
CAP-XX holds an open Q&A session at
every Annual General Meeting and
attends investor events to engage with
retail shareholders.
This communication allows the CAP-XX
board to understand the shareholder’s
views and to ensure that the strategies
and objectives of the Company are
aligned with shareholders. In its
decision-making, the Board will have
regard to the ascertained expectations
and needs of its shareholders (as
appropriate and in accordance with its
statutory and fiduciary duties).
The Board believes the Company’s
mode of engaging with shareholders is
adequate and effective.
3. Take into account wider
stakeholder and social
responsibilities and their
implications for long-term success
Long-term success relies upon good
relations with a range of different
stakeholder groups both internal
(workforce) and external (suppliers,
customers, regulators and others).
The board needs to identify the
company’s stakeholders and
understand their needs, interests and
expectations.
Where matters that relate to the
company’s impact on society, the
communities within which it operates
or the environment have the potential
to affect the company’s ability to
deliver shareholder value over the
medium to long-term, then those
matters must be integrated into the
company’s strategy and business
model.
Feedback is an essential part of all
control mechanisms. Systems need
to be in place to solicit, consider and
act on feedback from all stakeholder
groups.
The Directors are aware of the
Company’s corporate social
responsibilities and the impact the
CAP-XX business activities have on
the communities in which CAP-XX’s
businesses operate.
On the basis of the Directors’
experience and their operational
knowledge of the Company, the
Directors believe that the key
resources and relationships on which
the Company relies are the
Company’s employees, partners,
suppliers, regulatory authorities and
contractors. The Company’s
operations and working
methodologies take into account the
requirement to balance the needs of
all these stakeholder groups while
maintaining focus on the Board’s
primary responsibility to promote the
success of the Company for the
benefits of its shareholders.
The executive member of the Board
holds regular staff group and
individual update meetings in order to
communicate CAP-XX’s strategy,
progress versus targets and to
receive feedback and solicit opinion.
Corporate Governance Statement (continued)
Page 21
QCA Code Principle
Application (as set out by QCA)
What we do and why
The Company endeavours to take
account of feedback received from
stakeholders, making necessary
amendments to working
arrangements and operational plans
where appropriate and where such
amendments are consistent with the
Company’s long-term strategy. The
CAP-XX Board considers the
feedback of relevant stakeholders in
its decision-making and in the
formulation of strategy. However, no
material changes to the Company’s
processes were required for the year
ended 30 June 2024, or more
recently, as a result of feedback that
has been received by the Company
from the stated key resources and
relationships on which the business
relies.
The Company takes due account of
any impact that its activities may have
on the environment and seeks to
minimise this impact whenever
possible. Through various procedures
and systems that the Company
operates, especially in the
manufacturing process, the Company
ensures full compliance with health
and safety and environmental
legislation relevant to its activities.
CAP-XX is certified to IOS9001:2015.
4. Embed effective risk
management, considering both
opportunities and threats,
throughout the organisation
The board needs to ensure that the
company’s risk management
framework identifies and addresses
all relevant risks in order to execute
and deliver strategy; companies need
to consider their extended business,
including the company’s supply
chain, from key suppliers to end-
customer.
Setting strategy includes determining
the extent of exposure to the
identified risks that the company is
able to bear and willing to take (risk
tolerance and risk appetite).
The Board has a number of
responsibilities specifically relating to
risk including: -
Monitoring the effectiveness of
CAP-XX’s risk management
systems, including compliance with
regulatory requirements;
Satisfying itself through regular
reporting and oversight that
appropriate internal and external
control mechanisms are in place
and are being implemented; and
Approving CAP-XX’s financial
statements and monitoring financial
performance against the approved
budget.
The Board has established Audit and
Remuneration Committees. Full
details of which are contained in the
Corporate Governance sections of
the Company’s website.
The Board receives regular feedback
from its external auditors on the state
of its risk management and internal
controls. The Board does not
consider it would be appropriate to
Corporate Governance Statement (continued)
Page 22
QCA Code Principle
Application (as set out by QCA)
What we do and why
have its own internal audit function at
the present time, given the
Company’s size and nature of its
current operations. The Group does
complete regular fraud and internal
risk questionnaires which are
completed and reviewed on a six-
monthly basis.
At present the internal audit of
financial controls form part of the
responsibilities of the Group’s finance
function.
MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK
QCA Code Principle
Application (as set out by QCA)
What we do and why
5. Maintain the board as a
well- functioning, balanced
team led by the chair
The board members have a collective
responsibility and legal obligation to
promote the interests of the
company, and are collectively
responsible for defining corporate
governance arrangements. Ultimate
responsibility for the quality of, and
approach to, corporate governance
lies with the chair of the board.
The board (and any committees)
should be provided with high quality
information in a timely manner to
facilitate proper assessment of the
matters requiring a decision or
insight.
The board should have an
appropriate balance between
executive and non-executive
directors and should have at least
two independent non- executive
directors. Independence is a board
judgement.
The board should be supported by
committees (e.g. audit, remuneration,
nomination) that have the necessary
skills and knowledge to discharge
their duties and responsibilities
effectively.
Directors must commit the time
necessary to fulfill their roles.
The Board comprises six directors,
four of whom are independent non-
executive directors. Although some
of the non-executive directors are
shareholders of the Company,
given the size of their shareholding
and that none of the non-executive
directors have any day-to-day
involvement in the running of the
business, the Company considers
the non-executive directors to be
independent. The Chairman of the
CAP-XX Board is Mr Patrick Elliott
who was first elected to the Board
in July 2011.
All of the non-executive Directors
are subject to election by
shareholders at the first Annual
General Meeting after their
appointment to the Board and at
least one third of the Board must
retire and seek re-election at every
Annual General Meeting.
All Directors are expected to devote
the necessary time commitments
required by their position and where
possible should attend all Board
meetings. The Board meets at
regular scheduled intervals and
follows a formal agenda, papers
and reports are sent to the
Directors in a timely manner, prior
to the Board meetings. It also
meets as and when required.
During the financial year ended 30
June 2024, eighteen Board
meetings were held as well as two
Audit Committee meetings and one
Remuneration Committee meeting.
Corporate Governance Statement (continued)
Page 23
QCA Code Principle
Application (as set out by QCA)
What we do and why
The Company’s Corporate
Governance Statement (available
on the CAP-XX website) provides
further details, including how the
Board evaluates its own
performance.
The CAP-XX Annual Report and
Accounts for the year ended 30
June 2024 also explains the
governance framework and
provides data on the number of
Board and Committee meetings
(and Director attendance at the
same)
6. Ensure that between them
the directors have the
necessary up-to-date
experience, skills and
capabilities
The board must have an appropriate
balance of sector, financial and public
markets skills and experience, as well
as an appropriate balance of
personal qualities and capabilities.
The board should understand and
challenge its own diversity, including
gender balance, as part of its
composition.
The board should not be dominated
by one person or a group of people.
Strong personal bonds can be
important but can also divide a board.
As companies evolve, the mix of
skills and experience required on the
board will change, and board
composition will need to evolve to
reflect this change.
Directors who have been appointed
to the Board have been chosen
because of the skills and
experience they offer. Full
biographical details of the directors
are included on the CAP-XX
Website (https://www.cap-
xx.com/key-personnel/ ) and also
on pages 11 to 14 of the CAP-XX
Annual Report and Accounts for the
year ended 30 June 2024.
The Company encourages
continuing education of its directors
and officers where appropriate in
order to ensure that they have the
necessary skills and knowledge to
meet their respective obligations to
the Company.
As noted above the Company has
put in place an Audit Committee
and a Remuneration Committee.
The responsibilities of both
Committees are set out in the
Corporate Governance Statement
on the CAP-XX website
(https://www.cap-xx.com/the-
company/corporate-governance/)
and the terms of reference.
7. Evaluate board
performance based on clear
and relevant objectives,
seeking continuous
improvement
The board should regularly review the
effectiveness of its performance as a
unit, as well as that of its committees
and the individual directors.
The board performance review may
be carried out internally or, ideally,
externally facilitated from time to
time. The review should identify
development or mentoring needs of
individual directors or the wider
senior management team.
It is healthy for membership of the
board to be periodically refreshed.
Succession planning is a vital task for
boards. No member of the board
should become indispensable.
At the highest level, the CAP-XX
Board judges its own performance
by reference to the Company’s
progress against targets set out in
the Company’s strategic plan. The
Board formally evaluates its own
performance as a unit at least once
a year with an assessment of its
effectiveness. Areas are identified
where improvements can be made,
and active steps are taken to make
improvements accordingly. This
assessment is led by CAP-XX
Chairman.
The Board’s annual effectiveness
review was conducted, and high-
level recommendations were
Corporate Governance Statement (continued)
Page 24
QCA Code Principle
Application (as set out by QCA)
What we do and why
discussed and agreed. These
recommendations and the
associated improvements are
consistently being monitored at the
regular Board meetings.
The performance of the individual
Directors including the Chairman
are monitored on an ongoing basis.
On an annual basis, the
Remuneration Committee
evaluates the individual Director’s
performance as part of the review
of remuneration and share equity
grants.
Given the scale and scope of the
current operation and the risk
management framework, the
Directors are of the view that a
formal evaluation process of the
effectiveness of both the Audit and
Remuneration Committees is not
required at this stage. The need
for an evaluation process is
monitored on an on-going basis.
The Board and the Remuneration
Committee will also regularly
discuss the Board’s balance, the
Board’s current skills set and
remuneration to ensure that the
Board structure is fit for purpose
and is appropriate for the next
phase of CAP-XX’s development
and growth.
The composition of the Company’s
Board including individual directors
has changed in the past twelve
months due to the resignation of
one director and the appointment of
three new directors during the year.
The Board are still of the view that
the above processes are
appropriate for the Company’s
requirements, given the size and
nature of the CAP-XX business.
The Board uses the results of its
evaluation process when
considering the adequacy of the
composition of the Board and any
succession planning
requirements. However, there are
no plans at present for changes or
additions to the Board and the
Directors believe that the current
Board meets the needs of the
Company’s current and medium-
term requirements.
8. Promote a corporate
culture that is based on ethical
values and behaviours
The board should embody and
promote a corporate culture that is
based on sound ethical values and
The CAP-XX Board considers that
confidence in its integrity can only be
achieved if its employees and officers
Corporate Governance Statement (continued)
Page 25
QCA Code Principle
Application (as set out by QCA)
What we do and why
behaviours and use it as an asset
and a source of competitive
advantage.
The policy set by the board should be
visible in the actions and decisions of
the chief executive and the rest of the
management team.
Corporate values should guide the
objectives and strategy of the
company.
The culture should be visible in every
aspect of the business, including
recruitment, nominations, training and
engagement. The performance and
reward system should endorse the
desired ethical behaviours across all
levels of the company.
The corporate culture should be
recognisable throughout the
disclosures in the annual report,
website and any other statements
issued by the company.
conduct themselves ethically in all of
their commercial dealings on CAP-XX’s
behalf. CAP-XX has therefore
recognised that it should actively
promote ethical conduct amongst its
employees, officers and contractors.
CAP-XX has adopted, amongst other
policies to promote ethical and
responsible decision making, a code of
conduct which applies to all directors,
officers, employees, consultants and
contractors of CAP-XX, which the
Board and Management will seek to
enforce where appropriate.
The CAP-XX Board and management
conduct themselves ethically at all
times and promote a culture that is in
line with standards set out on the
website. CAP-XX values its reputation
for ethical behaviour and has a set of
values that are at the core of its
business philosophy.
9. Maintain governance
structures and processes that
are fit for purpose and support
good decision- making by the
board
The company should maintain
governance structures and processes
in line with its corporate culture and
appropriate to its:
• size and complexity; and
• capacity, appetite and tolerance for
risk.
The governance structures should
evolve over time in parallel with its
objectives, strategy and business
model to reflect the development of
the company.
CAP-XX’s Corporate Governance
Statement on pages 19 to 27 of the
Company’s Annual Report for the year
ended 30 June 2024 explains the
structures which are in place at Board
and Committee level and how these
interact, including the roles which
individual Directors fulfil on the Board.
At present, the Board is satisfied with
the Company’s corporate governance,
given the Company’s size and the
nature of its operations, and as such
there are no specific plans for changes
to the Company’s corporate
governance arrangements in the
shorter term.
There is a clear separation of the roles
of Chief Executive Officer and Non-
executive Chairman. The Chairman has
overall responsibility for corporate
governance matters in the Company,
leadership of the board and ensuring its
effectiveness on all aspects of its role.
The Chief Executive Officer leads the
executive team and is responsible for
implementing those actions required to
deliver on the agreed strategy.
The matters reserved as the
responsibilities of the CAP-XX
board include:-
Developing, providing input into
and final approval of the
Company’s strategic plan;
Corporate Governance Statement (continued)
Page 26
QCA Code Principle
Application (as set out by QCA)
What we do and why
Evaluating, approving and
monitoring the strategic and
financial plans and
performance objectives of the
Company;
Reviewing, ratifying and
monitoring systems of risk
management and internal
compliance and control, codes of
conduct and legal compliance;
Evaluating and monitoring annual
budgets and business plans;
Ensuring appropriate resources are
available to senior management;
Approving all accounting policies,
financial reports and external
communications by the
Company;
Appointing, re-appointing or
removing CAP-XX’s external
auditors; and
Appointing, monitoring and
managing the performance and
remuneration of executive directors
and senior executives.
Details of the Company’s audit and
remuneration committees, including
their terms of reference can be
found here: https://www.cap-
xx.com/aim-rule-26/
Beneath the Board there is an
operational governance framework
which facilitates the effective
management of the business by an
Executive Committee. This
organisation structure is kept under
continual review and evolves as the
needs and requirements of the
business changes as it grows and
develops.
BUILD TRUST
QCA Code Principle
Application (as set out by QCA)
What we do and why
10. Communicate how the
company is governed and is
performing by maintaining a
dialogue with shareholders
and other relevant
stakeholders.
A healthy dialogue should exist between
the board and all of its stakeholders,
including shareholders, to enable all
interested parties to come to informed
decisions about the company.
In particular, appropriate communication
and reporting structure should exist
between the board and all constituent
parts of its shareholder base. This will
assist:
the communication of shareholders’
views to the board; and
The Company’s governance
structure is explained through the
Corporate Governance Statement
which is available on the CAP-XX
website and is supplemented by
the disclosures provided in this
compliance statement and
explanations set out in the
“Corporate Governance” section of
the CAP-XX Annual Report for the
year ended 30 June 2024.
The communication and interaction
between CAP-XX and its
Corporate Governance Statement (continued)
Page 27
the shareholders’ understanding of
the unique circumstances and
constraints faced by the company.
It should be clear where these
communication practices are described
(annual report or website).
shareholders are explained in the
disclosure above (see principle 2).
Audit and Remuneration
Committee’s membership is
included in the CAP-XX Annual
Report for the year ended 30 June
2024 as well as the full disclosure
of CAP-XX Directors remuneration.
Responsibilities of both the Audit
and Remuneration Committee’s
responsibilities can be found on the
CAP-XX website (available here
https://www.cap-xx.com/aim-rule-
26/)
Historical Annual and Interim
Reports with all notices, circulars
and results of resolutions since the
Company’s ordinary shares were
admitted to trading on in April 2006
can also be found on the CAP-XX
website (available here
https://www.cap-
xx.com/investors/financial-
performance/
The Company encourages two-way
communication with both its
institutional and private investors
and responds quickly to all queries
received. The Chairman talks
regularly with the Group’s major
shareholders and ensures that their
views are communicated fully to
the Board.
The Board recognizes the AGM as
an important opportunity to meet
private shareholders. The Directors
are available to listen to the views
of shareholders informally
immediately following the AGM.
Page 28
CAP-XX Limited
Financial statements - 30 June 2024
Contents
Page
Consolidated statement of profit or loss
29
Consolidated statement of comprehensive income
30
Consolidated statement of financial position
31
Consolidated statement of changes in equity
32
Consolidated statement of cash flows
33
Notes to the financial statements
34
Consolidated entity disclosure statement
68
This financial report covers the Group consisting of CAP-XX Limited and its subsidiaries.
The financial report is presented in Australian Dollars.
CAP-XX Limited is a company limited by shares, incorporated and domiciled in Australia.
Its principal place of business is:
Unit1
13 A Stanton Road
Seven Hills NSW 2147
Its registered office is:
Unit1
13 A Stanton Road
Seven Hills NSW 2147
A description of the nature of the Group's operations and its principal activities is included in the Chairman’s Statement
on page 6, Business Review on pages 8 to 10 and in the directors’ report on pages 11 to 17, all of which are not part of
this financial report.
The financial report was authorised for issue by the directors on 29th November 2024. The Directors have the power to
amend and reissue the financial report.
Through the use of the internet, we have ensured that our corporate reporting is timely, complete, and available globally
at minimum cost to the Group. All press releases, financial reports and other information are available at our Investors’
Centre on our website: www.cap-xx.com.
Page 29
CAP-XX Limited
Consolidated statement of profit or loss
For the year ended 30 June 2024
Consolidated
2024
2023
Currency: Australian Dollars
Notes
$
$
Revenue from contracts with customers
5
4,593,490
3,631,690
Cost of sales
7
(3,214,710)
(2,060,527)
Gross Profit
1,378,780
1,571,163
Other income
6
1,950,780
2,165,429
General and administrative expenses
(2,423,857)
(2,407,328)
Process and engineering expenses
(1,320,762)
(1,357,516)
Selling and marketing expenses
(691,090)
(846,536)
Research and development expenses
(1,264,491)
(1,377,519)
Legal expenses
(2,255,213)
(1,472,664)
Share based payment expense
(131,399)
(613,980)
Other expenses
(192,980)
(192,080)
Depreciation and Amortisation
(734,726)
(741,552)
Interest expense
(307,268)
(287,208)
Interest income
5
4,929
664
Loss before income tax
(5,987,297)
(5,559,127)
Income tax benefit
8
-
-
Net loss for the year
(5,987,297)
(5,559,127)
Loss attributable to owners of CAP-XX Limited
(5,987,297)
(5,559,127)
Earnings per share for loss attributable to the
ordinary equity holders of the Company
Cents
Cents
Basic loss per share
32
(0.54)
(1.05)
Diluted loss per share
32
(0.54)
(1.05)
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes.
Page 30
CAP-XX Limited
Consolidated statement of comprehensive income
For the year ended 30 June 2024
Consolidated
2024
2023
Currency: Australian Dollars
Notes
$
$
Loss for the year
(5,987,297)
(5,559,127)
Other comprehensive income/(loss)
Items that may be reclassified subsequently
to profit or loss
Exchange differences on translation of foreign
operations
22
(43,068)
(27,433)
Other comprehensive income for the year,
net of tax
(43,068)
(27,433)
Total comprehensive (loss)/income for the
year attributable to owners of CAP-XX
Limited
(6,030,365)
(5,586,560)
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Page 31
CAP-XX Limited
Consolidated statement of financial position
As at 30 June 2024
Consolidated
2024
2023
Currency: Australian Dollars
Notes
$
$
ASSETS
Current assets
Cash and cash equivalents
9
1,916,995
2,643,810
Receivables
10
686,065
959,515
Inventories
11
1,678,616
2,201,906
Other
12
1,993,015
2,429,946
Total current assets
6,274,691
8,235,177
Non-current assets
Property, plant and equipment
13
2,043,449
2,428,233
Right of use assets
14
1,847,504
2,193,777
Other
15
204,808
204,808
Total non-current assets
4,095,761
4,826,818
Total assets
10,370,452
13,061,995
LIABILITIES
Current liabilities
Payables
16
1,658,885
1,833,557
Lease liabilities
17
261,521
194,888
Provisions
18
456,124
632,655
Interest bearing liabilities
19
768,174
1,038,054
Total current liabilities
3,144,704
3,699,154
Non-current liabilities
Lease liabilities
17
1,746,642
2,024,584
Provisions
20
869,730
803,910
Total non-current liabilities
2,616,372
2,828,494
Total liabilities
5,761,076
6,527,648
Net assets
4,609,376
6,534,347
EQUITY
Contributed equity
21
122,900,813
119,175,769
Reserves
22
8,437,602
8,100,320
Accumulated losses
22
(126,729,039)
(120,741,742)
TOTAL EQUITY
4,609,376
6,534,347
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Page 32
CAP-XX Limited
Consolidated statement of changes in equity
For the year ended 30 June 2024
Consolidated
Currency: Australian Dollars
Notes
Contributed
Equity
$
Reserves
$
Accumulated
losses
$
Total
$
Balance at 30 June 2022
114,511,790
7,513,773
(115,182,615)
6,842,948
Loss for the year
-
-
(5,559,127)
(5,559,127)
Other comprehensive income
-
(27,433)
-
(27,433)
Transactions with owners in their
capacity as owners:
Contributions of equity, net of transaction
costs and tax
21
4,663,979
-
-
4,663,979
Employee share options - value of
employee services
22
-
613,980
-
613,980
Balance at 30 June 2023
119,175,769
8,100,320
(120,741,742)
6,534,347
Loss for the year
-
-
(5,987,297)
(5,987,297)
Other comprehensive income
-
(43,068)
-
(43,068)
Transactions with owners in their
capacity as owners:
Contributions of equity, net of transaction
costs and tax
21
3,725,044
-
-
3,725,044
Share warrants issued
-
249,016
-
249,016
Employee share options - value of
employee services
22
-
131,334
-
131,334
Balance at 30 June 2024
122,900,813
8,437,602
(126,729,039)
4,609,376
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Page 33
CAP-XX Limited
Consolidated statement of cash flows
For the year ended 30 June 2024
Consolidated
2024
2023
Currency: Australian Dollars
Notes
$
$
Cash flows from operating activities
Receipts from customers (inclusive of goods and
services tax)
4,958,534
3,806,845
Payments to suppliers and employees (inclusive of
goods and services tax)
(10,891,212)
(9,976,681)
(5,932,678)
(6,169,836)
R&D Tax incentive received
2,078,779
2,043,384
Interest paid
(188,465)
(207,787)
Interest received
4,929
664
Net cash (outflow) from operating activities
29
(4,037,435)
(4,333,575)
Cash flows from investing activities
Payments for property, plant and equipment (net)
13
(20,381)
(118,166)
Net cash (outflow) from investing activities
(20,381)
(118,166)
Cash flows from financing activities
Proceeds from issue of shares
21
4,321,723
5,074,950
Costs associated with the issue of shares
21
(347,662)
(410,971)
Repayment of borrowings
19
(1,111,934)
-
Proceeds from borrowings
19
723,251
1,038,054
Principal repayments for lease liabilities
(211,309)
(193,763)
Net cash inflow from financing activities
3,374,069
5,508,270
Net increase/(decrease) in cash and cash
equivalents
(683,747)
1,056,529
Cash and cash equivalents at the beginning of the
financial year
2,643,810
1,614,714
Effects of exchange rate changes on cash and
cash equivalents
(43,068)
(27,433)
Cash and cash equivalents at the end of the
financial year
9
1,916,995
2,643,810
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 34
Contents of the notes to the financial statements
Page
1
Summary of significant accounting policies
35
2
Financial risk management
43
3
Critical accounting estimates and judgements
45
4
Segment information
47
5
Revenue
49
6
Other income
50
7
Expenses
50
8
Income tax benefit
51
9
Current assets – Cash and cash equivalents
51
10
Current assets – Receivables
52
11
Current assets – Inventories
52
12
Current assets – Other
53
13
Non-current assets – Property, plant and equipment
53
14
Non-current assets – Right-of-use assets
54
15
Non-current assets – Other
54
16
Current liabilities – Payables
54
17
Lease liabilities
55
18
Current liabilities – Provisions
56
19
Current liabilities – Interest bearing liabilities
56
20
Non-current liabilities – Provisions
57
21
Contributed equity
57
22
Reserves and accumulated losses
58
23
Key management personnel disclosures
59
24
Remuneration of auditors
60
25
Commitments and contingencies
61
26
Related party transactions
61
27
Subsidiaries
61
28
Events occurring after the balance sheet date
62
29
Reconciliation of loss after tax to net cash outflow from operating activities
63
30
Share-based payments
63
31
Economic dependency
66
32
Earnings per share
66
33
Parent entity
67
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 35
Note 1
Summary of significant accounting policies
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated. The financial
statements are for the consolidated entity consisting of CAP-XX Limited and its subsidiaries.
All amounts shown are in Australian Dollars, rounded to the nearest Dollar, unless otherwise stated.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. CAP-XX
Limited is a for-profit entity for the purpose of preparing the financial statements.
Compliance with IFRS
The consolidated financial statements of the CAP-XX Limited Group also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Historical cost convention
These financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of financial statements in conformity with Australian Accounting Standards requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the process of applying the
Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in note 3.
(b) Continuation as a going concern
During the year ended 30 June 2024, the Group incurred an operating loss before tax and recorded net cash outflows
from operating activities as disclosed in the statement of profit or loss and the statement of cash flows, respectively. Due
to these operating losses and net cash outflows, there is material uncertainty that may cast significant doubt on the
Group’s ability to continue as a going concern.
The continuing viability of the Group and its ability to continue as a going concern and meet its debts and commitments
as they fall due are dependent upon the Group being successful with respect to the following factors:
i.
The ability of the Group to raise additional funds from shareholders, new investors and debt markets. The Group
successfully conducted a significant equity placement in March 2024. A further significant equity placement
was announced by the company on 31 October 2024. On 5 November 2024, the Company announced that it
had conditionally raised gross proceeds of approximately £3.025 million (before expenses) through a Company
Placing, Subscription and Retail Offer. The first tranche of shares under the Company Placing were issued on 7
November 2024 and the company received gross proceeds into the bank account of £0.4 million (before
expenses) on 11 November 2024. The second tranche of shares under the Company Placing, the Subscription
and the Retail Offer are conditional, inter alia, on the passing of a resolution by shareholders at the General
Meeting which will be held on 5 December 2024. Should the resolution be approved, application will be made
for the Second Placing Shares, Subscription Shares and the Retail Offer Shares to be admitted to trading on or
around 9 December 2024. Should the resolution be approved, it is anticipated that the Company will receive
gross proceeds into the bank account of £1.9 million (before expenses) on, or around, 11 December 2024.
Further details of the equity placement are contained within note 28 to the financial statements, Events
occurring after the balance sheet date. Based on the information provided above, the directors consider that
there is a reasonable expectation that alternate sources of funding can be sourced;
ii.
The Group receiving the proceeds from the R&D Tax concession which is in the final stages of being lodged with
the Australian Taxation Office. CAP-XX has a proven track record with R&D rebate submissions over several
years and this year’s return is consistent with previous years. A portion of the R&D rebate will be used to repay
the short term loan;
iii.
The number and size of several business development opportunities from existing and emerging markets are
converted into sales revenue with the Group needing to ensure that product development and manufacturing
capacity is available to satisfy the customers’ product specifications and timing demands for existing and new
products; and
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 36
Note 1
Summary of significant accounting policies (continued)
(b) Continuation as a going concern (continued)
iv.
Continue the close and effective monitoring of the Group's operating expenditure, including the continued
realisation of identified operating cost initiatives. The Board regularly receives forecasts and updates from
management to monitor performance against plan and to consider longer term prospects.
The Directors believe that the Group will be successful in achieving favourable outcomes on the above matters and that
it will have sufficient funds to pay its debts and meet its commitments for at least the next 12 months from the date of this
financial report, and accordingly, have prepared the financial report on a going concern basis. At this time, the directors
are of the opinion that no asset is likely to be realised for an amount less than the amount at which it is recorded in the
financial report at 30 June 2024. As such, no adjustments have been made to the financial statements relating to the
recoverability and classification of the asset carrying amounts or classification of liabilities that might be necessary
should the Group not continue as a going concern.
(c)
Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of CAP-XX Limited
(''Company'' or “Parent Entity”) as at 30 June 2024 and the results of all subsidiaries for the year then ended. CAP-XX
Limited and its subsidiaries together are referred to in this financial report as the “Group” or the “Consolidated Entity”.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the entity is
exposed to, or has rights to, variable returns from its involvement with the entity and has the entity to affect those returns
through its power to direct the activities of the entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Consolidated Entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in
equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss
and other comprehensive income, statement of financial position and statement of changes in equity of the Group.
Losses incurred by the Group are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative transaction differences recognised in equity.
The Group recognises the fair value of the consideration received and the fair value of any investment retained together
with any gain or loss in profit or loss.
(d)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 37
Note 1
Summary of significant accounting policies (continued)
(e)
Foreign currency translation
(i)
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in Australian dollars, which is CAP-XX Limited’s functional and presentation currency. The functional currency
is deemed to be Australian dollars given this is the currency of the primary country whose competitive forces and
regulations determine the sales price of its goods and services. Further to this, it is the currency in which debt funding
has been obtained historically, as well as the currency that receipts from operating activities are retained in.
(ii)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the statement of profit or loss on a net basis within other income or other expenses.
(iii)
Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the presentation
currency as follows:
assets and liabilities for each statement of financial position presented are translated at the closing rate at the
date of that statement of financial position;
income and expenses for each statement of profit or loss are translated at average exchange rates (unless this is
not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognised in other comprehensive income.
When a foreign operation is sold, a proportionate share of such exchange differences are recognised in the statement of
profit or loss as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entities and translated at the closing rate.
(f)
Revenue recognition
The Group applies the principles outlined within AASB 15 “Revenue from contracts with customers” . The core principle
of AASB 15 is that revenue should only be recognised as the entity receives the benefit of the goods or services provided
under a commercial contract, in an amount that reflects the consideration to which the entity expects to be entitled for the
transfer of the goods or services. A practical expedient has been adopted whereby the impact of significant financing
components have not been considered as the Group expected, at contract inception, that the period between the transfer
of the good or service and when the customer pays for that good or service is less than one year.
Determining the transaction price
The Group’s revenue is derived from fixed price agreements and therefore the amount of revenues to be earned from
each agreement is determined by reference to those fixed prices. There is no variable consideration within these
agreements.
Allocation of amounts to performance obligations
For most agreements, there is only one performance obligation and a fixed unit price for the good or service provided. As
such, there is no judgement involved in the allocation of amounts to specific performance obligations. In those instances
where there is more than one performance obligation, the unit price is clearly defined and is allocated against the specific
performance obligation. Some goods sold by the Group include warrantees which require the Group to either replace or
mend a defective product during the warranty period if the goods fail to comply with agreed-upon specifications. In
accordance with AASB 15, such assurance warranties are not accounted for as separate obligations and hence no
revenue is allocated to them.
Sale of goods revenue is recognised at a point in time when the Group have met all of their performance obligations
including delivery, if applicable. There is limited judgement in identifying the point control passes; once the goods have
left the warehouse or when the goods are delivered, depending on the type of good.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 38
Note 1 Summary of significant accounting policies (continued)
(f)
Revenue recognition (continued)
Royalty agreements are in place, whereby customers are required to pay the Group a portion of sales revenue, in return
for the use of patented software. Revenue is recognised at a point in time when the underlying goods are sold. Fixed rate
royalties are recognised over the period of the underlying agreement.
Licence revenue in relation to the contracted use of the Group’s patents or technology is recognised at a point in time
when the licence agreement is signed and the Group has the present right to payment.
(g)
Government grants
Grants from the government, including the R&D Tax incentive, are recognised at their fair value where there is a
reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Income from
government grants, including the R&D tax incentive, is recognised in the statement of profit or loss when the right to
receive the payment is established.
(h)
Income tax
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the
national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
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 which are enacted or substantively enacted for
each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary
differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising
from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these
temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction
did not affect either accounting profit or taxable profit or loss.
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.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised directly in
equity. In this case, the tax is also recognised directly in equity.
Tax consolidation legislation
CAP-XX Limited and its wholly owned Australian controlled entities have implemented the tax consolidation legislation as
of 1 July 2002.
The head entity, CAP-XX Limited, and the controlled entities in the tax consolidated group continue to account for their
own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group
continues to be a standalone taxpayer in its own right.
In addition to its own current and deferred tax amounts, CAP-XX Limited also recognises the current tax liabilities (or
assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled
entities in the tax consolidated group.
Tax funding agreements are currently not in place. Amounts assumed are recognised as a contribution to (or distribution
from) wholly owned tax consolidated entities.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 39
Note 1 Summary of significant accounting policies (continued)
(i)
Impairment of assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets
or groups of assets (cash generating units). Non-financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at each reporting date.
The Group recognises a loss allowance for expected credit losses on financial assets which are measured at amortised
cost. 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 recognised 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.
(j)
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of approximately three months that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value.
(k)
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less any allowance
for expected credit loss. Trade receivables are generally due for settlement no more than 30 days from the date of
recognition.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are
written off by directly reducing the carrying amount. An allowance for expected credit loss is specifically recognised when
there is objective evidence that the Group will not be able to collect the receivable. Financial difficulties of the debtor or
default payments are considered objective evidence of impairment.
To measure expected credit losses on a collective basis, trade receivables are grouped based on similar credit risk and
aging. The expected loss rates are based on the Group’s historical credit losses experienced over the two-year period
prior to the period end. The historical loss rates are then adjusted for both current and forward-looking information on
macroeconomic factors affecting the Group’s customers.
(l)
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value. Cost
comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the
latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on a
basis of first in first out. Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale.
Raw materials held for development purposes are also stated at the lower of cost and net realisable value, hence are
generally recognised in the statement of profit or loss as an expense when received.
(m) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes. The nominal value less estimated credit adjustments of trade receivables and payables are
assumed to approximate their fair values due to their short-term nature.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 40
Note 1 Summary of significant accounting policies (continued)
(n)
Property, plant and equipment
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. All other repairs and maintenance are charged to the statement of profit or loss during the
financial period in which they are incurred. Capital work in progress is not depreciated until the asset is installed and
ready for use.
Depreciation on assets is calculated using the straight-line method to allocate their cost amounts, net of their residual
values over their estimate useful lives as follows:
Furniture and fittings
2-10 years
Plant and equipment – Manufacturing
2-10 years
Plant and equipment – Research & Development
2-10 years
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 (note 1(i)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the
statement of profit or loss.
(o)
Right of use Asset
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or
before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where
included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the
underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased
asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to
impairment or adjusted for any remeasurement of lease liabilities.
(p)
Research & Development
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to the
design and testing of new or improved products) are recognised as intangible assets when it is probable that the project
will, after considering its commercial and technical feasibility, be completed and generate future economic benefits and
its costs can be measured reliably. The expenditure capitalised comprises all directly attributable costs, including costs of
materials, services, direct labour and an appropriate proportion of overheads. Other development expenditures that do
not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an
expense are not recognised as an asset in a subsequent period. Capitalised development costs are recorded as
intangible assets and amortised from the point at which the asset is ready for use on a straight-line basis over its useful
life, which varies from 3 to 5 years.
(q)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which
are unpaid. Due to their short-term nature, they are measured at amortised cost and are not discounted. The amounts
are unsecured and are usually paid within 55 days of recognition.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 41
Note 1 Summary of significant accounting policies (continued)
(r)
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is
probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably
estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with
respect to any one item included in the same class of obligations may be small.
(s)
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method.
(t)
Employee benefits
(i)
Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within
12 months of the reporting date are recognised in other provisions 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.
(ii)
Long service leave
The liability for long service leave is recognised as part of the provision for employee benefits and measured at
the present value of expected future payments to be made in respect of services provided by employees up to the
reporting date using the projected unit credit method. Consideration is given to expected future wage and salary
levels, experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the reporting date on national government bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
(iii)
Retirement benefit obligations
The Group does not maintain a Group superannuation plan. The Group makes defined fixed percentage
contributions for all Australian resident employees to complying third party superannuation funds. The Group’s
legal or constructive obligation is limited to these contributions.
Contributions to the defined contribution complying third party superannuation funds are recognised as an
expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
(iv)
Share-based payments
Share-based compensation benefits are provided to employees via the CAP-XX Limited Employee Share Option
Plan. Information relating to this scheme is set out in note 30.
The fair value of options granted under the CAP-XX Limited Employee Share Option Plan is recognised as an
employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and
recognised over the period during which the employees become unconditionally entitled to the options.
The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the
exercise price, the term of the option, 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.
Non marketing vesting conditions are included in assumptions about the number of options that are expected to
vest. The total expense is recognised over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of
options that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the
revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
The CAP-XX Limited Employee Share Option Plan is administered by the Board of Directors of CAP-XX Limited.
When options are exercised, the entity transfers the appropriate amount of shares to the employee. The proceeds
received net of any directly attributable transactions costs are credited directly to equity.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 42
Note 1 Summary of significant accounting policies (continued)
(t)
Employee benefits (continued)
(v) Bonus plans
The Group recognises a liability and an expense for bonuses where contractually obliged or where there is a past
practice that has created a constructive obligation.
(u)
Lease liability
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in
the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Lease payments comprise
of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate,
amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of
the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do
not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used;
residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is
remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of
the right-of-use asset is fully written down.
(v)
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.
Where such ordinary shares are subsequently re-issued, any consideration received, net of any directly attributable
incremental transactions costs and the related income tax effects, is included in equity attributable to the owners of
Group.
(w)
Earnings per share
(i)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group, 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.
(x)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 43
Note 1 Summary of significant accounting policies (continued)
(y)
New, revised or amending Accounting Standards and Interpretations adopted
The Group has adopted all new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new or amended
Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. These new or
amended Accounting Standards and Interpretations have not had a material effect on the financial statements for the
year ended 30 June 2024.
(z)
New Accounting Standards and Interpretations not yet mandatory or early adopted
Any revised or amending Accounting Standards or Interpretations that are not yet mandatory for the year ended 30 June
2024 have not been early adopted.
(aa) Parent entity financial information
The financial information for the parent entity, CAP-XX Limited, disclosed in note 33 has been prepared on the same
basis as the consolidated financial statements, except as set out below:
(ab) Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the financial statements of CAP-XX Limited.
Note 2
Financial risk management
The Group's activities expose it to a variety of financial risks; market risk (including currency risk, interest rate risk and
price risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.
The Group holds the following financial instruments, which are measured at amortised cost:
Consolidated
2024
2023
$
$
Financial assets
Cash and cash equivalents
1,916,994
2,643,810
Trade and other receivables
941,888
1,524,269
2,858,882
4,168,079
Financial liabilities
Trade and other payables
1,658,885
1,833,557
Interest bearing liabilities
768,174
1,038,054
Lease liabilities
2,008,163
2,219,472
4,435,222
5,091,083
(a)
Market risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated
in a currency that is not the entity’s functional currency.
The Group operates internationally and is exposed to foreign exchange risk arising particularly from currency exposures
to the US dollar. The Group sells most of its products and services in US dollars, buys the majority of its raw materials
and pays its contract tolling fees in US dollars. This arrangement acts as a natural hedge to minimise foreign exchange
risk by the Group paying for products and services in the same currency that the Group receives revenue.
Foreign exchange risk is managed centrally by the Group’s Finance team under the direction of the Board. The finance
team manages risk exposures through delegated authority limits and defined measures. The Finance team regularly
monitors the Group’s exposure to foreign exchange risk and reports to the Board.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 44
Note 2
Financial risk management (continued)
(a)
Market risk (continued)
Sensitivity analysis
The Group’s after tax loss and equity for the year would have been $114,103 lower / $114,103 higher (2023: $52,630
lower/ $57,893 higher) had the Australian dollar strengthened / weakened by 10% against the US dollar, mainly as a
result of foreign exchange gains / losses on the translation of US dollar denominated sales and purchases of goods and
services.
The Group's exposure to foreign currency risk at the end of the reporting period, was as follows:
As at 30 June 2024
USD
GBP
Euro
JPY
$
£
€
Y
Cash and cash equivalents
112,228
414,610
56,918
1,644
Trade receivables
475,052
-
-
-
Trade payables
464,070
51,935
10,338
10,338
As at 30 June 2023
USD
GBP
Euro
JPY
$
£
€
Y
Cash and cash equivalents
170,579
859,228
16,219
-
Trade receivables
608,158
-
-
-
Trade payables
496,798
38,073
73,924
-
(b)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated entity. The Group has some concentration of credit risk. The Group has policies in place to ensure that
sales of products are made to customers with an appropriate credit history. The maximum exposure to credit risk at the
reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets,
as disclosed in the statement of financial position and notes to the financial statements. The consolidated entity does not
hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables
through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered
representative across all customers of the Group based on recent sales experience, historical collection rates and
forward-looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year. These indicators also suggest whether there has been an increase in credit
risk.
Cash and cash equivalents are placed in financial institutions with good credit ratings.
(c)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash, to ensure debts are paid as and when they fall
due. The Group has experienced recurring operating losses and operating cash outflows since inception to 30 June 2024
as the Group is transitioning from development stage. Historically the Group has not committed to any credit facilities and
rather has relied upon equity financing through private and public equity investors. Recently, the Group has entered into
a credit facility with a finance provider which uses the R&D rebate as collateral. Once the R&D rebate is received the
finance provider is paid the amount drawn down at this date. Details of the current status of this facility can be found in
note 19.
Details of the liquidity risk associated with the Group’s lease liabilities are outlined in note 17.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 45
Note 2 Financial risk management (continued)
(d)
Interest rate risk
The Group’s interest-rate risk mainly arises from interest bearing assets, with the Group’s income and operating cash
flows exposed to changes in market interest rates. The interest bearing assets have been predominantly deposited at
short term fixed rates exposing the Group to cash flow interest-rate risk.
The Group’s exposure to interest-rate risk is immaterial in terms of the possible impact on profit or loss or equity. It has
therefore not been included in the sensitivity analysis.
(e)
Fair value estimation
The carrying amount of financial assets and liabilities recorded in the financial statements represents their respective net
fair value unless otherwise noted, determined in accordance with the accounting policies disclosed in note 1.
Note 3
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
(a)
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. Apart from the going concern assumption as discussed in note 1(b),
the estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
(b)
Critical judgements in applying the entity’s accounting policies
(i)
Impairment loss on plant and equipment
The Group has continued to use the Sydney, Australia manufacturing site for the production of electrode material
and selected supercapacitor product lines, whilst the larger volume supercapacitor product lines are outsourced.
In assessing the carrying value of its plant and equipment, the Group considers whether previous impairment
write downs remain adequate and the current depreciation rates fairly reflect the carrying value of such assets.
(ii)
Fair value of share options
Share-based compensation benefits are provided to employees through the CAP-XX Limited Employee Share
Option Plan. The fair value of options granted under the CAP-XX Limited Employee Share Option Plan is
recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured
at grant date and recognised over the period during which the employees become unconditionally entitled to the
options. The fair value at grant date is determined using the Black-Scholes option pricing model. The key inputs
and assumptions used in the model is set out in note 30.
(iii)
Inventory provision
The Group makes estimates and assumptions concerning the future saleability of inventory for amounts in excess
of cost. The provision for inventory obsolescence is based on management’s expectation of the future price of
inventory, taking into account the age and condition and demand of the inventory and management’s assessment
of future demand for the inventory.
(iv)
Lease make good provision
A provision has been made for the present value of anticipated costs for the future restoration of leased premises.
The provision includes future cost estimates associated with departing the premise at the termination of the
current lease period and requires assumptions regarding the cost estimates and departure dates. The provision
recognised is periodically reviewed and updated based on the facts and circumstances available at the time.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 46
Note 3
Critical accounting estimates and judgements (continued)
(v)
Warranty provision
In determining the level of provision required for warranties, the Group has made judgements in respect of the
expected performance of the products, the number and frequency of customers who will actually claim under the
stated warranty and the costs of fulfilling the conditions of the warranty. The provision is based on estimates
generated from historical warranty data associated with similar products and services.
(vi) Research and development incentive
Judgement is required in determining the amount of grant revenue relating to the research and development
incentive claim. There are certain transactions and calculations undertake during the ordinary course of business
for which the ultimate tax determination may be subject to change. The Group calculates its research and
development claim based on the Group’s understanding of the tax law. Where the final outcome of these matters
is different from the amounts that were initially recorded, such differences will impact the profit or loss in the year
in which such determination is made.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 47
Note 4
Segment information
(a)
Description of segments
Management has determined the operating segment based on the reports reviewed by the Board that are used to make
strategic decisions. Management has identified one reportable segment which is the development, manufacture and
sale of supercapacitors.
Although the Group is managed on a global basis, it generates revenue in three main geographical areas being Asia
Pacific, Europe and Americas. Segment revenues are allocated based on the country in which the user is located. Cost
of sales are allocated based on the country in which the production of supercapacitors occurs.
Geographical Segments
30 June 2024
Asia Pacific
$
Europe
$
Americas
$
Total
$
Revenue
1,478,534
2,659,134
455,822
4,593,490
Cost of sales
(3,214,710)
-
-
(3,214,710)
Gross (Loss) / Profit
(1,736,174)
2,659,134
455,822
1,378,780
Other income
1,950,780
-
-
1,950,780
General and administrative expenses
(2,423,857)
-
-
(2,423,857)
Process and engineering expenses
(1,320,762)
-
-
(1,320,762)
Selling and marketing expenses
(691,090)
-
-
(691,090)
Research and development expenses
(1,264,491)
-
-
(1,264,491)
Legal expenses
(2,255,213)
-
-
(2,255,213)
Share based payment expenses
(131,399)
-
-
(131,399)
Other expenses
(192,980)
-
-
(192,980)
Depreciation / Amortisation
(734,726)
-
-
(734,726)
Interest Expense
(307,268)
-
-
(307,268)
Interest income
4,929
-
-
4,929
Net (loss) / profit for the year
(9,102,253)
2,659,134
455,822
(5,987,297)
Other comprehensive income
Exchange differences arising in
translation of foreign operations
(43,068)
-
-
(43,068)
Total comprehensive income / (loss),
net of tax
(9,145,321)
2,659,134
455,822
(6,030,365)
Total assets
10,370,452
-
-
10,370,452
Total liabilities
5,761,076
-
-
5,761,076
Net (loss) / profit for the year includes the
following specific expenses:
Depreciation and amortisation
Share based payments
734,726
131,399
-
-
-
-
734,726
131,399
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 48
Note 4
Segment information (continued)
Geographical Segments
30 June 2023
Asia Pacific
$
Europe
$
North
America
$
Total
$
Revenue
880,877
1,967,154
783,659
3,631,690
Cost of sales
(2,060,527)
-
-
(2,060,527)
Gross (Loss)/Profit
(1,179,650)
1,967,154
783,659
1,571,163
Other income
2,165,429
-
-
2,165,429
General and administrative expenses
(2,407,328)
-
-
(2,407,328)
Process and engineering expenses
(1,357,516)
-
-
(1,357,516)
Selling and marketing expenses
(846,536)
-
-
(846,536)
Research and development expenses
(1,377,519)
-
-
(1,377,519)
Legal expenses
(1,472,664)
-
-
(1,472,664)
Share based payment expenses
(613,980)
-
-
(613,980)
Other expenses
(192,080)
-
-
(192,080)
Depreciation / Amortisation
(741,552)
-
-
(741,552)
Interest Expense
(287,208)
-
-
(287,208)
Interest income
664
-
-
664
Net (loss) / profit for the year
(8,309,940)
1,967,154
783,659
(5,559,127)
Other comprehensive income
Exchange differences arising in translation of
foreign operations
(27,433)
-
-
(27,433)
Total comprehensive income/(loss), net of tax
(8,337,373)
1,967,154
783,659
(5,586,560)
Total assets
13,061,995
-
-
13,061,995
Total liabilities
6,527,648
-
-
6,527,648
Net (loss) / profit for the year includes the
following specific expenses:
Depreciation and amortisation
Share based payments
741,552
613,980
-
-
-
-
741,552
613,980
(b)
Major customers
During the year ended 30 June 2024, one customer based in Europe contributed 12% of the Group’s total revenue
(2023: 13%).
Except as disclosed above, no other customer contributed more than 10% of the Group’s total revenue.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 49
Note 5 Revenue
Consolidated
2024
2023
$
$
Sales revenue
Sale of goods (recognised at a point in time)
4,593,490
3,288,692
Licence Fees & Royalties (recognised at a point in time)
-
342,998
4,593,490
3,631,690
Other revenue
Interest
4,929
664
Disaggregation of Revenue
The Group has disaggregated revenue into various categories in the following table which is intended to
-
Depict how the nature, timing and uncertainty of revenue and cash flows are affected by economic date; and
-
Enable users to understand the relationship with revenue segment information provided in Note 4.
Supercapacitors
Licence Fees
and
Royalties
Total
Consolidated – 2024
$
$
$
Geographical regions
Asia Pacific
1,478,534
-
1,478,534
Europe
2,659,134
-
2,659,134
Americas
455,822
-
455,822
Consolidated - 2024
4,593,490
-
4,593,490
Consolidated – 2023
Geographical regions
Asia Pacific
880,877
-
880,877
Europe
1,967,154
-
1,967,154
Americas
440,661
342,998
783,659
Consolidated – 2023
3,288,692
342,998
3,631,690
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 50
Note 6 Other income
Consolidated
2024
2023
$
$
Foreign Exchange Gains – (net)
-
22,045
R&D Tax Incentive
1,950,780
2,143,384
1,950,780
2,165,429
Note 7
Expenses
Consolidated
2024
2023
$
$
Loss before income tax includes the following specific expenses:
Cost of sale of goods
Direct materials and labour
2,722,251
1,805,749
Movement in stock provision
95,892
(19,033)
Indirect manufacturing expenses
396,567
273,811
Total cost of sale of goods
3,214,710
2,060,527
Depreciation
Plant and equipment
387,354
384,635
Furniture and fittings
262
294
Leasehold improvements
837
1,124
Right of use Assets
346,273
355,499
Total depreciation
734,726
741,552
Other expenses – movement in provisions
Allowance for expected credit loss
75,652
189,491
Provision for make good on premises
52,086
40,999
Provision for Withholding Tax Diminution
-
18,274
127,738
248,764
Finance costs
Interest – lease liabilities
188,465
206,663
Interest – R&D Advance
118,803
80,545
307,268
287,208
Employee benefits expense
3,551,320
4,161,394
Superannuation expense
379,701
397,130
Share based payments
131,334
613,980
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 51
Note 8
Income tax benefit
Consolidated
2024
2023
$
$
(a)
Numerical reconciliation of income tax benefit to prima
facie tax benefit
Loss before tax
(5,987,297)
(5,559,127)
Tax at the Australian tax rate of 25% (2023: 25%)
(1,496,824)
(1,389,782)
Tax effect of amounts which are not deductible (taxable) in calculating
taxable income:
Share based payments
32,833
153,245
(Non-assessable) / non-deductible items
553,603
773,126
(910,388)
(463,411)
Benefit arising from temporary differences and tax losses not
recognised
910,388
463,411
Income tax benefit
-
-
(b)
Tax losses
Unused tax losses for which no deferred tax asset has been
recognised
101,939,936
96,618,330
Potential tax benefit @ 25% (2022: 25%)
25,064,970
24,154,582
All unused tax losses were incurred by Australian entities. The deferred tax assets in relation to the tax losses will only
be obtained if:
i)
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the
deductions for the losses to be realised, and
ii)
the Group continues to comply with the conditions for deductibility imposed by tax legislation, and
iii)
no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the losses.
(c) Unrecognised temporary differences
Temporary differences for which no deferred tax asset has been
recognised
3,309,880
3,092,505
Potential tax benefit @ 25% (2023: 25%)
827,470
773,126
CAP-XX Limited and its wholly owned Australian controlled entities have implemented the tax consolidation legislation as
of 1 July 2002. The accounting policy in relation to this legislation is set out in note 1(h). CAP-XX Limited has not
recognised any tax consolidation distribution from or to wholly tax consolidated entities.
Note 9
Current assets – Cash and cash equivalents
Consolidated
2024
2023
$
$
Cash at bank and on hand
355,113
402,636
Cash on deposit
1,561,882
2,241,174
1,916,995
2,643,810
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 52
Note 10
Current assets – Receivables
Consolidated
2024
2023
$
$
Trade receivables
721,661
919,459
Other receivables
-
581,079
Provision for expected credit losses
(35,596)
(541,023)
686,065
959,515
Movements in the provision for expected credit losses are as follows:
Consolidated
2024
2023
$
$
Opening balance
541,023
351,532
Receivables written off during the year
(581,079)
-
Allowance for expected credit loss
75,652
189,491
Closing balance
35,596
541,023
(a) Past due but not impaired
There were no trade receivables at 30 June 2024 that were past due but not impaired (2023: Nil).
(b)
Fair value and credit risk
Due to the short-term nature of these receivables, their carrying value is assumed to approximate their fair value. The
current receivables are non-interest bearing. There is some concentration of credit risk with respect to current
receivables, as the Group has a limited number of customers, internationally dispersed.
(c)
Foreign exchange and interest rate risk
Information about the Group's exposure to foreign currency risk and interest rate risk in relation to trade and other
receivables is provided in note 2.
Note 11
Current assets – Inventories
Consolidated
2024
2023
$
$
Raw materials and stores
861,150
1,052,509
Work in progress
97,553
77,764
Finished goods
994,083
1,249,911
Obsolescence provision
(274,170)
(178,278)
1,678,616
2,201,906
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 53
Note 12
Current assets – Other
Consolidated
2024
2023
$
$
Research & Development - Tax Credit
1,942,001
2,070,000
Prepayments
39,185
348,128
Other Receivables
11,829
11,818
1,993,015
2,429,946
Note 13
Non-current assets – Property, plant and
equipment
Consolidated
2024
2023
$
$
Plant and equipment at cost
20,162,848
20,146,977
Accumulated depreciation
(18,127,870)
(17,740,516)
Capital Works in Progress
-
12,203
Net book amount
2,034,978
2,418,664
Furniture and fittings at cost
69,394
69,394
Accumulated depreciation
(67,392)
(67,130)
Net book amount
2,002
2,264
Leasehold improvements at cost
478,469
478,470
Accumulated depreciation
(472,001)
(471,165)
Net book amount
6,468
7,305
Total property, plant and equipment
20,710,712
20,707,044
Total accumulated depreciation
(18,667,263)
(18,278,811)
Total net book amount
2,043,449
2,428,233
Movement in classes of assets:
Consolidated
Plant and
equipment
Leasehold
improvements
Furniture and
Fittings
Total
$
$
$
$
Year ended 2024
Opening net book amount
2,418,664
7,305
2,264
2,428,233
Additions
20,381
-
-
20,381
Disposals
(16,712)
-
-
(16,712)
Depreciation
(387,354)
(837)
(262)
(388,453)
Closing net book amount
2,034,979
6,468
2,002
2,043,449
Movement in classes of assets:
Consolidated
Plant and
equipment
Leasehold
improvements
Furniture and
Fittings
Total
$
$
$
$
Year ended 2023
Opening net book amount
2,685,754
8,429
1,937
2,696,120
Additions
117,545
-
621
118,166
Depreciation
(384,635)
(1,124)
(294)
(386,053)
Closing net book amount
2,418,664
7,305
2,264
2,428,233
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 54
Note 14
Non-current assets – Right of use assets
Consolidated
2024
2023
$
$
Right-of-use assets at cost
3,407,991
3,407,991
Accumulated depreciation
(1,560,487)
(1,214,214)
Net book amount
1,847,504
2,193,777
Note 15
Non-current assets - Other
Consolidated
2024
2023
$
$
Rental bond
204,808
204,808
A term of the current lease agreement for the Seven Hills premises is a requirement for the Group to have a bank
guarantee in place as security for the landlord against loss or damage from any event of default. The rental bond of
$204,808 represents the current value of this bank guarantee.
Note 16
Current liabilities – Payables
Consolidated
2024
2023
$
$
Trade payables
1,523,202
1,677,270
Other payables and accrued expenses
135,683
156,287
1,658,885
1,833,557
The carrying amount of trade and other payables are assumed to approximate to their fair values due to their short-term
nature.
Movement in classes of assets:
Consolidated
Office Premises &
Warehouse
Office Equipment
Total
$
$
$
Year ended 2024
Opening book amount
2,175,276
18,501
2,193,777
Additions
-
-
-
Depreciation
(327,772)
(18,501)
(346,273)
Closing net book amount
1,847,504
-
1,847,504
Movement in classes of assets:
Consolidated
Office Premises &
Warehouse
Office Equipment
Total
Year ended 2023
Opening book amount
2,505,857
43,419
2,549,276
Additions
-
-
-
Depreciation
(330,581)
(24,918)
(355,499)
Closing net book amount
2,175,276
18,501
2,193,777
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 55
Note 17
Lease liabilities
2024
2023
$
$
Lease Liabilities – current
261,521
194,888
Lease liabilities – non current
1,746,642
2,024,584
2,008,163
2,219,472
The Group holds a 10-year lease for property in Seven Hills, Sydney, NSW. This lease agreement includes an option to
extend for 2 additional periods of 5 years. As at 30 June 2024, the Group have not included this option to extend within
the lease liability, with such an extension not considered to be reasonably certain.
Reconciliation of lease liabilities at the beginning and end of the financial year are set out below:
2024
2023
$
$
Opening balance
2,219,472
2,411,323
Additions
-
-
Interest on lease liabilities
188,465
206,663
Repayments on lease liabilities
(399,774)
(398,514)
Balance as at 30 June 2024
2,008,163
2,219,472
The following are the remaining contractual maturities for the Group’s lease liabilities:
Less than 1
year
2-5 years
Over 5 years
Contractual
cash flows
Carrying
Amount
$
$
$
$
$
Year ended 2024
Lease liabilities
429,671
1,851,509
286,975
2,568,155
2,008,163
Less than 1
year
2-5 years
Over 5 years
Contractual
cash flows
Carrying
Amount
$
$
$
$
$
Year ended 2023
Lease liabilities
399,774
1,797,581
770,573
2,967,928
2,219,472
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 56
Note 18
Current liabilities – Provisions
Consolidated
2024
2023
$
$
Employee benefits – annual leave and long service leave
456,124
632,655
456,124
632,655
(a)
Amounts not expected to be settled within the next 12 months
Consolidated
2024
2023
$
$
Annual leave obligation not expected to be
settled within 12 months
152,300
198,799
(b)
Risk exposure
Information about the Group’s exposure to foreign exchange risk is provided in note 2.
(c) Product returns and warranties
Provision is made for estimated product returns and warranty claims in respect of products sold. The Group provides a
one-year warranty on products sold to customers. There is no warranty provision as at 30 June 2024 (2023: nil).
Note 19
Current liabilities – Interest bearing liabilities
Consolidated
2024
2023
$
$
Short term borrowings
768,174
1,038,054
768,174
1,038,054
Movement in interest bearing liabilities
Consolidated
2024
2023
$
$
Carrying amount at start of year
1,038,054
-
Repayments
(1,111,934)
-
Borrowings drawn down
723,251
957,509
Interest expense
118,803
80,545
Carrying amount at end of year
768,174
1,038,054
The group has entered into a short term credit facility with a finance provider, with the expected R&D rebate used as
collateral.
Note 20
Non-current liabilities – Provisions
2024
2023
$
$
Employee benefits – long service leave
83,867
70,133
Make good provision
785,863
733,777
869,730
803,910
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 57
Note 20 Non-current liabilities – Provisions (continued)
(a)
Make good provision
The Group is required to restore the leased premises of its office/warehouse to their original condition at the end of the
respective lease term. A provision has been recognised for the present value of the estimated expenditure required to
remove any leasehold improvements.
(b)
Movements in provisions
Movements in the make good on premises provision during the financial year are set out below:
Consolidated
2024
2023
$
$
Carrying amount at start of year
733,777
692,778
Additions
-
-
Charged to profit or loss
52,086
40,999
Carrying amount at end of year
785,863
733,777
Note 21
Contributed equity
Consolidated
2024
2023
(a)
Share capital
Shares
Shares
Fully paid ordinary shares (no par value)
2,908,226,437
716,014,958
(b)
Movement in ordinary share capital:
Date
Details
Number of shares
Issue price
$
1 July 2022
Opening balance
509,173,491
114,511,790
12 July 2022
Issue of Shares
1,062,343
$0.10
103,427
12 May 2023
Issue of Shares
76,535,370
$0.02
1,860,322
6 June 2023
Issue of Shares
129,243,754
$0.02
3,111,201
6 June 2023
Issue of Shares – Costs
-
(410,971)
30 June 2023
Closing balance
716,014,958
119,175,769
1 July 2023
Opening balance
716,014,958
119,175,769
30 November 2023
Issue of Shares - Directors
4,173,369
$0.0339
141,665
11 April 2024
Issue of Shares
103,854,880
$0.0020
212,393
25 April 2024
Issue of Shares
2,049,183,230
$0.0020
3,897,664
25 April 2024
Issue of Shares
35,000,000
$0.0020
70,000
2,908,226,437
123,497,491
Less: cost of capital raising
Invoices paid for professional services
(347,662)
Warrants issued
(249,016)
Total costs of capital raising
(596,678)
30 June 2024
Closing Balance
2,908,226,437
122,900,813
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 58
Note 21 Contributed Equity (continued)
(c)
Ordinary shares
At 30 June 2024, there were 2,908,226,437 (2023: 716,014,958) issued ordinary shares which were fully paid, with no
par value. Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Group in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote,
and upon a poll each share is entitled to one vote.
(d)
Options
Information relating to the CAP-XX Limited Employee Share Option Plan, including details of options issued, exercised
and lapsed during the financial year and options outstanding at the end of the financial year, is set out in note 30.
On 25 April 2024, 200,000,000 warrants were issued by the Company to Allenby Capital Limited with a subscription price
payable on exercise of GBP 0.0015 (0.15 pence) per warrant share. The expiry date of the warrants is 24 April 2029.
No warrants were exercised during the year.
(e)
Capital management plan
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern that
it can provide returns for shareholders and benefits to other stakeholders and to maintain an optimum structure to reduce
the cost of capital.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was value
adding relative to the company's current share price at the time of the investment. The consolidated entity would actively
pursue additional investments in the short term as it continues to integrate and grow its existing business in order to
maximise synergies.
The capital risk management policy remains unchanged from the 2023 Annual report.
Note 22
Reserves and accumulated losses
Consolidated
2024
2023
$
$
(a)
Reserves
Foreign currency translation reserve
(402,215)
(359,147)
Share-based payments reserve
8,839,817
8,459,467
8,437,602
8,100,320
Movements:
Foreign currency translation reserve
Balance 1 July
(359,147)
(331,714)
Currency translation differences arising during the year
(43,068)
(27,433)
Balance 30 June
(402,215)
(359,147)
Share-based payments reserve
Balance 1 July
8,459,467
7,845,487
Share warrants issued
249,016
-
Option expense
131,334
613,980
Balance 30 June
8,839,817
8,459,467
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 59
Note 22 Reserves and accumulated losses (continued)
(b)
Accumulated losses
Consolidated
Movements in accumulated losses were as follows:
2024
2023
$
$
Balance 1 July
(120,741,742)
(115,182,615)
Net (loss) for the year
(5,987,297)
(5,559,127)
Balance 30 June
(126,729,039)
(120,741,742)
(c)
Nature and purpose of reserves
(i) Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency
translation reserve, as described in note 1(e). The reserve is recognised in profit and loss when the net
investment is disposed of.
(ii) Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of options issued but not exercised.
Note 23 Key management personnel disclosures
(a)
Directors
The names of the directors who have held office during the financial year are as follows:
Patrick Elliott
Chairman
Lars Stegmann
Chief Executive Officer
Peter Fraser (appointed 18 June 2024)
Non-Executive Director
Dr Anthony Sive (appointed 18 June 2024)
Non-Executive Director
Dr Graham Cooley (appointed 18 June 2024)
Non-Executive Director
Steen Feldskov
Non-Executive Director
Bruce Grey (resigned 3 November 2023)
Non-Executive Director
(b)
Key management personnel compensation
Key management personnel (KMP) compensation is set out below. KMP are those persons having authority and
responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including
any Director. Details regarding the KMP are outlined below:-
Directors
Name
Position
Term as KMP
Patrick Elliott
Chairman
Full Year
Lars Stegmann
Chief Executive Officer
Full Year
Steen Feldskov
Non-Executive Director
Full Year
Bruce Grey
Non-Executive Director
1 July 2023 to 3 November 2023
Peter Fraser
Non-Executive Director
18 June 2024 to 30 June 2024
Dr Anthony Sive
Non-Executive Director
18 June 2024 to 30 June 2024
Dr Graham Cooley
Non-Executive Director
18 June 2024 to 30 June 2024
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 60
Note 23 Key management personnel disclosures (continued)
Consolidated
2024
2023
$
$
Short-term benefits
525,185
763,404
Post-employment benefits
50,153
388,655
Share-based payments
174,519
253,749
Total
749,857
1,405,808
(c)
Other transactions with key management personnel or entities related to them
The following directors of the Company, and therefore each a related party as defined in the AIM Rules for Companies,
participated in a subscription of new ordinary shares in the Company on 25 April 2024 (the “FY24 Subscription”):
Patrick Elliot, the Company’s Chairman, subscribed for 21,500,000 new ordinary shares in the FY24
Subscription, which represented an amount of $21,100 at the FY24 Subscription’s issue price of 0.1 pence per
new ordinary share (the “FY24 Issue Price”).
Lars Stegmann, the Company’s Chief Executive Officer, subscribed for 8,500,000 new ordinary shares in the
Subscription, which represented an amount of £8,500 at the FY24 Issue Price.
Steen Feldskov, one of the Company’s Non-Executive Directors, subscribed for 5,000,000 new ordinary shares
in the Subscription, which represented an amount of £5,000 at the FY24 Issue Price.
The following directors of the Company, and therefore each a related party as defined in the AIM Rules for Companies,
intend to participate in a subscription of new ordinary shares in the Company following the publication of the audited
accounts for the year ended 30 June 2024 (the “FY25 Subscription”):
Graham Cooley, one of the Company’s Non-Executive Directors, intends to subscribe for 218,181,800 new
ordinary shares in the FY25 Subscription, which represents an amount of £240,000 at the FY25 Subscription’s
issue price of 0.11 pence per new ordinary share (the “FY25 Issue Price”).
Peter Fraser, one of the Company’s Non-Executive Directors, intends to subscribe for 9,090,900 new ordinary
shares in the FY25 Subscription, which represents an amount of £10,000 at the FY25 Issue Price.
Note 24
Remuneration of auditors
Consolidated
2024
2023
$
$
BDO
Audit services
Audit of financial statements
76,115
69,996
Total remuneration for audit services
76,115
69,996
Taxation services
Tax compliance services, including review of company income tax returns,
employee share scheme and R&D Tax concession
70,547
77,785
Total remuneration of BDO
146,662
147,781
It is the Group’s policy to employ BDO on assignments additional to their statutory audit duties where BDO’s expertise
and experience with the Group are important. These assignments are principally tax advice, or where BDO is awarded
assignments on a competitive basis. It is the Group’s policy to seek competitive tenders for all major consulting projects.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 61
Note 25
Commitments and contingencies
The historical legal case with Maxwell Technologies, a wholly owned subsidiary of Tesla Inc. was settled during
the period, with CAP-XX required to pay the counterparty’s legal costs. This has been recorded as a liability as
at 30 June 2024. There are no contingent liabilities in relation to this matter, or any other matter as at 30 June
2024 (2023: nil).
Note 26
Related party transactions
(a)
Parent entity
The ultimate parent entity within the Group is CAP-XX Limited.
(b)
Subsidiaries
Interests in subsidiaries are set out in note 27.
(c)
Key management personnel
Disclosures relating to key management personnel are set out in note 23.
Note 27
Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 1(c):
Name of entity
Country of
incorporation
Class of
shares
Equity holding *
30 June 2024
30 June 2023
%
%
CAP-XX (Australia) Pty Ltd
Australia
Ordinary
100
100
CAP-XX Research Pty Ltd
Australia
Ordinary
100
100
CAP-XX USA, Inc
United States
Ordinary
100
100
*
The proportion of ownership interest is equal to the proportion of voting power held.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 62
Note 28
Events occurring after the balance sheet date
Since the end of the financial year, the following matters have arisen:-
On 1 July 2024, the Company granted options over 130,000,000 ordinary shares in the Company to the
directors. Further details are disclosed in Note 30 to the financial statements.
On 16 July 2024, CAP-XX announced that the Company had signed a Memorandum of Understanding with
SCHURTER AG (“SCHURTER”) to work closely together on technology development and co-branded
supercapacitor products. SCHURTER is a world leading Swiss technology company that manufactures and
markets components for circuit protection, as well as connectors, switches, EMC, and HMI products.
SCHURTER currently holds 4.69% of the Company’s issued ordinary share capital.
On 5 August 2024, CAP-XX announced that it had received a notice to exercise warrants over 85,000,000 new
ordinary shares in the Company at an exercise price of 0.15 pence per warrant, raising approximately £127,500
for the Company.
On 14 August 2024, the Company granted options over 60,000,000 ordinary shares in the Company to certain
employees. Further details are disclosed in Note 30 to the financial statements.
The necessary paperwork associated with the receipt of the R&D Tax rebate for the 2024 financial year is in the
final stages of being lodged with the relevant Government authorities and is expected to be received before the
end of January 2025. The rebate is expected to be approximately A$1.9 million
On 31 October 2024, CAP-XX announced that the Company had conditionally raised £0.25 million (before
expenses) as a result of certain directors of the Company confirming their intention to subscribe for 227,272,700
new ordinary shares ("Subscription Shares") at the Issue Price of 0.11 pence per Ordinary Share.
On 1 November 2024, CAP-XX announced that the Company had conditionally raised £2.5 million (before
expenses) pursuant to the Placing of 2,272,727,200 new ordinary shares ("Placing Shares") at the Issue Price
of 0.11 pence per Ordinary Share. The shares will be issued in two tranches. 363,983,965 Placing Shares (the
"First Placing Shares") have been issued under the Company's existing authorities on 7 November 2024.
On 5 November 2024, CAP-XX announced that the Company had conditionally raised £0.275 million (before
expenses) pursuant to the completion of a retail offer of 250,000,000 new ordinary shares (“Retail Offer”) at the
Issue Price of 0.11 pence per ordinary share
Application will be made for 1,908,743,235 Placing Shares (the "Second Placing Shares") to be admitted to
trading on AIM (“Admission”). Subject to, inter alia, the passing of the resolutions at the General Meeting, it is
expected that Admission, and commencement of dealings, will take place at 8.00 a.m. on or around 9
December 2024.
The Second Placing Shares, the Retail Offer and the Subscription Shares are conditional, inter alia, on the
passing of a resolution by Shareholders at the General Meeting to be held at the offices of the Company on 5
December 2024.
There were no other matters or circumstances that have arisen since 30 June 2024 that have significantly affected, or
may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future
financial years.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 63
Note 29
Reconciliation of loss after tax to net cash outflow from operating activities
Consolidated
2024
2023
$
$
Net loss after tax
(5,987,297)
(5,559,127)
Depreciation and amortisation
734,726
741,552
Expected credit loss expense
75,652
189,491
Interest charged on financial liability
118,803
80,545
Non-cash employee benefit expense – share based payments
131,399
613,980
Changes in assets and liabilities:
(Increase) / Decrease in receivables
197,798
(32,105)
(Increase) / Decrease in inventories
523,290
(365,758)
(Increase) / Decrease in other assets
436,931
(286,935)
(Decrease) / Increase in payables
(158,025)
665,409
(Decrease) / Increase in provisions
(110,712)
(380,627)
Net cash outflow from operating activities
(4,037,435)
(4,333,575)
Note 30
Share-based payments
(a)
CAP-XX Limited Employee Share Option Plan
The CAP-XX Limited Employee Share Option Plan (the “CAP-XX Limited Plan”) provides for the grant of share options
for the purchase of ordinary shares of the Group by officers, employees, consultants, advisors and directors of the Group
or a related body corporate. The Board is responsible for the administration of the CAP-XX Limited Plan. The Board
determines the term of each option, the option exercise price, and the number of shares for which each option is granted
and the rate at which each option is exercisable. Unless otherwise determined by the Board an offer of Options must not
provide for an exercise price that is less than the volume weighted average sale price of a share traded on AIM over a
defined period.
Set out below is a summary of options granted under the CAP-XX Limited Plan:
Expiry date
Exercise
price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Forfeited &
expired
during the
year
Balance at
end of the
year
Exercisable
at end of the
year
Grant Date
$
Number
Number
Number
Number
Number
Number
Consolidated – 2024
14 October 2021
14 October 2026
£0.0595
34,440,000
-
-
(22,440,000)
12,000,000
12,000,000
12 April 2022
12 April 2027
£0.0560
2,300,000
-
-
-
2,300,000
1,012,000
11 May 2023
11 May 2028
£0.0131
20,000,000
-
-
-
20,000,000
4,000,000
56,740,000
-
-
(22,440,000)
34,300,000
17,012,000
Weighted Average Exercise Price
$0.10
$0.10
$0.10
$0.10
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 64
Note 30
Share-based payments (continued)
(a)
CAP-XX Limited Employee Share Option Plan (continued)
Fair value of options granted
There were no share options issued during the year ended 30 June 2024 (2023: 20,000,000).
On 1 July 2024 130,000,000 options were offered to directors of the Company under the following terms:
Year to which offer applies:
FY 2025
Date of Offer:
1 July 2024
Offer Close Date:
1 July 2024
Vesting Date/s:
20% (2,000,000) on 1 July 2025
20% (2,000,000) on 1 July 2026
20% (2,000,000) on 1 July 2027
20% (2,000,000) on 1 July 2028
20% (2,000,000) on 1 July 2029
Expiry Date:
1 July 2029
Black-Scholes valuation
$0.00359 (valued independently)
Acquisition Price
Nil cash consideration
Exercise price
$0.08
On 14 August 2024 60,000,000 options were offered to certain employees of the Company under the following terms:
Year to which offer applies:
FY 2025
Date of Offer:
1 July 2024
Offer Close Date:
1 July 2024
Vesting Date/s:
20% (2,000,000) on 1 July 2025
20% (2,000,000) on 1 July 2026
20% (2,000,000) on 1 July 2027
20% (2,000,000) on 1 July 2028
20% (2,000,000) on 1 July 2029
Expiry Date:
1 July 2029
Black-Scholes valuation
$0.00359 (valued independently)
Acquisition Price
Nil cash consideration
Exercise price
$0.08
Year ended 30 June 2023
The assessed fair value at grant date of options granted, during the year ended 30 June 2023, under the CAP-XX
Limited Plan was A$0.02 on 11 May 2023. The fair value at grant date is determined using a 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.
The model inputs for options granted included:
(a)
options are granted for nil consideration, have a:
o
4 - 10 year life and 25% vest 24 months after the Vesting Commencement Date, and 6.25% of Total
Option shall vest on each subsequent quarterly anniversary of the Vesting Commencement Date
thereafter;
o
specific vesting criteria in some minor instances.
(b)
exercise price: refer tables above
(c)
grant date: refer tables above
(d)
expiry date: refer tables above
(e)
share price at grant date
(f)
expected volatility of share price over option life of 79.6%
(g)
risk free rate of 2.75%
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 65
Note 30
Share-based payments (continued)
Expiry date
Exercise
price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Forfeited &
expired
during the
year
Balance at end
of the year
Exercisable
at end of the
year
Grant Date
$
Number
Number
Number
Number
Number
Number
Consolidated – 2023
11 December 2017 11 December 2022 £0.1150
14,695,000
-
-
(14,695,000)
14 October 2021
14 October 2026
£0.0595
34,490,000
-
-
(50,000)
34,440,000
17,655,200
12 April 2022
12 April 2027
£0.0560
2,300,000
-
-
-
2,300,000
1,012,000
11 May 2023
11 May 2028
£0.0131
-
20,000,000
-
-
20,000,000
-
51,485,000
20,000,000
-
(14,745,000)
56,740,000
18,667,200
Weighted Average Exercise Price
$0.10
$0.02
$0.10
$0.08
$0.11
Fair value of options granted
There were 20,000,000 share options issued for the year ended 30 June 2023 (2022: 36,965,000).
The assessed fair value at grant date of options granted, during the year ended 30 June 2023, under the CAP-XX
Limited Plan was A$0.02 on 11 May 2023. The fair value at grant date is determined using a 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.
The model inputs for options granted included:
(a)
options are granted for nil consideration, have a:
o
4 -10 year life and 25% vest 24 months after the Vesting Commencement Date, and 6.25% of Total
Option shall vest on each subsequent quarterly anniversary of the Vesting Commencement Date
thereafter;
o
specific vesting criteria in some minor instances.
(b)
exercise price: refer tables above
(c)
grant date: refer tables above
(d)
expiry date: refer tables above
(e)
share price at grant date
(f)
expected volatility of share price over option life of 79.6%
(g)
risk free rate of 2.75%
(b)
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit
expense were as follows:
Consolidated
2024
2023
$
$
Options issued under CAP-XX Limited Employee Share Option Plan
131,399
613,980
131,399
613,980
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 66
Note 31
Economic dependency
The Group is highly dependent upon a small number of customers and potential customers. Alternative sources of
revenue are being sought to reduce future dependency on any particular entity.
The Group is also dependent upon Malaysian contract manufacturers to fulfil a large proportion of sales orders and
external shareholders due to the capital raising activities during the year.
Note 32
Earnings per share
Earnings per share for (loss) attributable to the ordinary equity holders of the Group.
Consolidated
2024
2023
Cents
Cents
(a)
Basic earnings per share
(Loss) attributable to the ordinary equity holders of the Company
(0.54)
(1.05)
(b)
Diluted earnings per share
(Loss) attributable to the ordinary equity holders of the Company
(0.54)
(1.05)
Consolidated
2024
2023
Number
Number
(c)
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
1,118,079,098
529,010,650
Weighted average number of ordinary shares and potential ordinary shares used
as the denominator in calculating diluted earnings per share
1,118,079,098
529,010,650
Options are considered to be potential ordinary shares. The options are not included in the calculation of diluted earnings
per share because they are anti-dilutive. These options could potentially dilute basic earnings per share in the future.
CAP-XX Limited
Notes to the financial statements
30 June 2024
Page 67
Note 33
Parent Entity
(a)
Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
2024
2023
$
$
Statement of financial position
Current assets
6,049,407
5,062,879
Total assets
6,049,407
5,062,879
Current liabilities
1,344,558
1,965,685
Total liabilities
1,344,558
1,965,685
Net Assets
4,704,849
3,097,194
Shareholders’ equity
Issued capital
122,900,813
119,175,769
Reserves
Share-based payments
8,839,817
8,459,467
Accumulated losses (i)
(127,035,781)
(124,538,042)
Loss for the year
(2,497,738)
(5,707,584)
Total comprehensive income / (loss)
(2,497,738)
(5,707,584)
(i) Reconciliation to prior year accumulated losses
Balance at beginning of period 1/07/2023
(124,538,042)
Net loss for the year
(2,497,738)
Balance at end of period 30/06/2024
(127,035,781)
(b)
Contingent Assets
The parent had no material contingent assets as at 30 June 2024 and 30 June 2023.
(c)
Contingent Liabilities
The parent had no material contingent liabilities as at 30 June 2024 and 30 June 2023.
(d)
Capital commitments - Property, plant and equipment
The parent had no capital commitments for property, plant and equipment as at 30 June 2024 and 30 June 2023.
(e)
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1
CAP-XX Limited
Consolidated entity disclosure statement
30 June 2024
Page 68
Consolidated entity disclosure statement
The following provides information about the subsidiaries included in the consolidated financial statements of CAP-XX
Limited as at 30 June 2024.
Name of entity
Type of Entity
Ownership interest
Principal place of
business / Country
of incorporation
Country of
residence for
tax purposes
2024
%
2023
%
CAP-XX (Australia) Pty Ltd
Body corporate
100%
100%
Australia
Australia
CAP-XX Research Pty Ltd
Body corporate
100%
100%
Australia
Australia
CAP-XX USA, Inc *
Body corporate
100%
100%
USA
USA
* Effective control of the foreign subsidiary occurs from Australia and as such the entity will be dual residence in domestic
country and Australia
CAP-XX Limited
Directors’ declaration
30 June 2024
Page 69
Directors’ declaration
The Directors of CAP-XX Limited (the Company) declare that:
In the Directors’ opinion the Financial Statements and notes for the financial year ended 30 June 2024 set out
on pages 28 to 68 are in accordance with the Corporations Act 2001 (Cth), including:
i)
Complying with the Australian Accounting Standards and Corporations Regulations 2001; and
ii)
Giving a true and fair view of the financial position and performance of the Company and the consolidated
entity.
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.
The basis of preparation notes confirms that the Financial Statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board.
The Directors have been given a declaration by the Chief Executive Officer in the form contained in section
295A of the Corporations Act 2001 for the financial year ended 30 June 2024.
In the Directors opinion the consolidated entity disclosure statement required by subsection 295(3A) of the
Corporations Act 2001 is true and correct.
This declaration is made in accordance with a resolution of the Directors.
Patrick Elliott
Chairman
Sydney
29 November 2024
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms.
Liability limited by a scheme approved under Professional Standards Legislation.
INDEPENDENT AUDITOR'S REPORT
To the members of CAP-XX Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of CAP-XX Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2024, the consolidated
statement of profit or loss, the consolidated statement of comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year then ended,
and notes to the financial report, including material accounting policy information, the consolidated
entity disclosure statement and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its
financial 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 are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Valuation of inventory
Key audit matter
How the matter was addressed in our audit
As at 30 June 2024, the Group holds $1,678,616 of
inventory (2023: $2,201,906) as disclosed in Note 11,
which represents a significant asset to the Group.
Significant judgement and estimation is required in
relation to assessing the net realisable value of
inventory, and this is considered a key audit matter.
Our procedures to address this key audit matter
included, but were not limited to:
Attended stock counts at all inventory locations as
at year end, agreeing stock on hand to year end
inventory reporting;
Evaluated management’s calculations of inventory
cost, and assessing whether the cost exceeds the
net realisable value of each inventory item; and
Assessed management’s provision for stock
obsolescence, ensuring that this adequately
captured slow moving items that may need to be
sold below cost, or written off.
Impairment of assets
Key audit matter
How the matter was addressed in our audit
At 30 June 2024, the group had net assets of
$4,609,376 (2023: $6,534,347).
An impairment test is required where there are
indicators of impairment for a cash generating unit
under Australian Accounting Standard (AASB) 136
Impairment of Assets.
The assessment of the carrying value of a cash
generating unit requires management to make
significant accounting judgements and estimates in
producing a discounted cash flow model to determine
whether the assets are appropriately carried.
Our procedures to address this key audit matter
included, but were not limited to:
Obtained management’s value in use calculations
to assess the recoverable amount of assets;
Assessed the appropriateness of forecasts based on
past performance, and past ability to meet
forecasts;
Assessed future performance based on known
required expenditure as well as known and
expected sales channels; and
Ensured the discount rate applied in the value in
use model is appropriate and supportable.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2024, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a)
the financial report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001; and
b)
the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i)
the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error; and
ii)
the consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
BDO Audit Pty Ltd
Gareth Few
Director
Sydney, 29 November 2024