XRF SCIENTIFIC LIMITED
ABN 80 107 908 314
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2014
For personal use only
CONTENTS
CHAIRMAN’S LETTER
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CORPORATE GOVERNANCE DISCLOSURE
CONSOLIDATED STATEMENT OF PROFIT
OR LOSS AND OTHER COMPREHENSIVE
INCOME
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF
CASH FLOWS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
AUDITOR’S REPORT
SHAREHOLDER INFORMATION
CORPORATE DIRECTORY
3
4
17
18
25
26
27
28
29
63
64
66
68
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 1
For personal use only
FINANCIAL RESULTS SUMMARY
Sales down 4%
Net Profit After Tax down 36%
25,408
22,496
21,666
20,061
3,813
3,579
2,635
2,441
11
12
13
14
Sales Revenue ($'000)
11
12
13
14
Net Profit After Tax ($'000)
Operating Cash Flow down 37%
Earnings Per Share down 38%
4,131
3,662
2,594
2,612
2.8
2.9
2.5
1.8
11
12
13
14
11
12
13
14
Operating Cash Flow ($'000)
Earnings Per Share (Cents)
2 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
CHAIRMAN’S LETTER
Dear Shareholder,
The flow on effects of the Global Financial Crisis, the
continuing decline in iron ore and coal prices along
with a weakening of the Chinese economy during
The Company, fortunately, has remained debt-free,
maintained very tight control on staff numbers,
operating costs and streamlined its management
structure.
2013-2014 introduced serious challenges into the
Although net profit was down by $1.4m on the
laboratory services sector in Australia.
preceding year, it has been possible to pay a dividend
The challenges were felt elsewhere around the world.
All of XRF Scientific Ltd’s (XRF) customers were under
of 1.1 cents per share. Based on earnings per share of
1.8 cents, this represents a payout ratio of 61%.
strong pressures to increase efficiency and reduce
With recent problems in the Middle East, political
operating costs and prices. Amongst the larger
turmoil in parts of central Europe and a slowing of
minerals exploration and mining companies there
economic growth in China it is difficult to be highly
was, and remains, considerable pressure for
optimistic about the next 12 to 18 months. However,
increased automation and efficiency.
there are signs that the laboratory services sector is
As the major supplier of XRF consumables in Australia
and increasingly in overseas markets – especially
North America – the GFC had provided a salutary
warning signal that considerable effort would be
needed to maintain our position in the market and
sustain profitability. While several significant
acquisitions were being considered, the Board decided
stabilising, and with the run-down of thermal coal
stocks in India and a sorting out of the iron ore
markets in China that the outlook for 2014-2015 may
improve slightly. Going forward, of considerable
importance is XRF’s strong exposure to production
mining and its IP, which continue to provide a steady
base of earnings.
that any expansion of the business had to be able to
The Board and Management will be keeping tight
meet credible and sustainable earnings ratios.
control over costs.
Following its successful acquisition of Sigma
The Chief Executive Officer, Vance Stazzonelli, and his
Chemicals in 2011 and a smaller acquisition in Canada
staff deserve strong commendation for a sound result
in 2013, the Board and Management consciously
in a very difficult industry sector climate and uncertain
decided to work to maintain its market position and to
financial conditions.
reward shareholders. Also, it sought to build its
international client base in major mining countries
such as Canada, South Africa, Brazil and in parts of
Europe where there is a demand for the chemicals,
platinum labware and the specialised furnaces and
laboratory equipment that XRF Scientific Ltd
manufactures.
Kenneth Baxter
Chairman
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 3
For personal use only
FINANCIAL RESULTS SUMMARY
DIRECTORS’ REPORT
Your directors present their report on the company XRF Scientific Limited and its controlled entities for the
financial year ended 30 June 2014.
DIRECTORS
The names of the directors in office at any time during or since the end of the financial year are:
Kenneth Baxter (Chairman)
David Brown
David Kiggins
Fred Grimwade
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
PRINCIPAL ACTIVITY
The principal activity of the economic entity during the financial year was the business of manufacturing and
marketing precious metal products, specialised chemicals and instruments for the scientific and analytical
industries and in particular, the mining industry.
No significant change in the nature of these activities occurred during the year.
DIVIDENDS – XRF SCIENTIFIC LIMITED AND CONTROLLED ENTITIES
Dividends paid to members during the financial year were as follows:
Final dividend for the year
2014
$
2013
$
2,246,329
1,932,354
In addition to the above dividends, since the end of the financial year the directors have declared the payment of a
fully franked final dividend of 1.1 cents per share to be paid on 26 September 2014 out of retained earnings at 30
June 2014.
4 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
DIRECTORS’ REPORT
REVIEW OF OPERATIONS
A review of the operations of the economic entity during the financial year and the results of those operations
found that during the year, the economic entity continued to engage in its principal activity and the results and
financial position are disclosed in the attached financial statements.
The consolidated entity has produced a Net Profit After Tax (NPAT) of $2,441,258 for the year ended 30 June 2014,
compared with $3,812,772 for the previous year.
Details of the results for the financial year ended 30 June 2014 are as follows:
Total revenue and other income
NPAT
Basic earnings per share – (cents per share)
Diluted earnings per share – (cents per share)
Underlying profit before tax
OPERATING RESULTS
June 2014
June 2013
Increase / (decrease)
over prior year
$
$
22,043,121
23,246,536
2,441,258
3,812,772
1.8
1.8
2.9
2.9
3,880,991
5,622,098
%
(5)
(36)
(38)
(38)
(31)
XRF Scientific Ltd (“XRF” or “Company”) is pleased to report its June 2014 full-year results to shareholders. The
Company has generated revenue of $21.8m and underlying profits before tax of $3.9m, before expensing $340k in
acquisition related due diligence and integration costs.
The Directors have confirmed that a final dividend of 1.1 cents per share, fully franked, will be payable with a
record date of 12 September 2014 and payment date of 26 September 2014. This provides a dividend payout ratio
that is consistent with prior years of 61%.
The revenue and underlying earnings for the second half were steady on the first half, indicating that conditions in
the market, although challenging, appear to have stabilised. Sales to production based clients have increased,
however sales to the exploration related industry have remained flat, at the low levels that have been experienced
for the past 18 months.
The cash at bank balance reduced from $8.6m as at 30 June 2013 to $6.2m as at 30 June 2014. This reduction
was mainly the result of the CAD$1.7m paid for the Kitco Labware acquisition.
Sales of consumable products were lower at $6.4m, compared to the previous corresponding period (PCP) of
$7.2m, mainly as a result of the downturn in the exploration industry. Profits before tax were reduced to $2.4m
from $2.8m in the PCP. Results were also adversely affected by the USD strength against the AUD and some
minor one-off costs.
XRF increased its shareholding in emerging Canadian x-ray flux manufacturer Gestion Scancia Inc. from 19.99%
to 49.99%. This was achieved through the conversion of a 10% convertible note and the purchase of 20% from
existing shareholders for CAD$250,000.
The Precious Metals division was able to deliver a reasonable profit before tax of $1.34m, compared to $1.43m in
the PCP. The division was able to maintain profits, both through the Kitco Labware acquisition and generation of
normal repeat manufacturing income. Sale of new products were difficult, in line with general CAPEX demand,
however there was a notable improvement in the second-half of the year.
The division released a new premium platinum labware range, which is intended to extend the life of products,
which provides certain benefits to XRF and our customers. A number of large clients have already standardised
on this product, having experienced the benefits of the longer life and lower internal maintenance required.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 5
For personal use only
DIRECTORS’ REPORT
OPERATING RESULTS continued
The Kitco Labware acquisition was completed at the beginning of August 2013 and has contributed $300k in
profits before tax for the first eleven months of trading. The business has been successfully integrated into the
XRF Scientific group, and the next phase has commenced, of using Kitco Labware’s distribution to sell new and
additional products.
The Capital Equipment division suffered a fall in profitability, generating $354k in profits before tax, as compared
to $1,143k in the PCP. Capital Equipment orders were weak in the first half of the year, mainly as a result of labs
in Australia having excess capacity, and being restricted in their CAPEX purchases. As a result, most of the
demand came from offshore, from production companies seeking to expand or replace their equipment base.
Although product development costs were capitalised throughout the period, research costs have been expensed.
Costs associated with gearing up for the manufacture of new products were also incurred during the year.
The launch of the flagship xrFuse 6 fusion machine in October is helping to turn this situation around, with
numerous orders having been received, of which a number of units were delivered during the year. As the
installed base of machines grows, so does its reputation of being a low maintenance and robust unit, as indicated
by an increased level of orders and quotations over the past few months. The addition of this machine to XRF’s
product range provides access to a new large segment of the market, that XRF has not been in contact with for
numerous years. The xrFuse 6 has many new innovative qualities and has been designed to meet the growing
safety and reliability standards of miners.
The division has also recently completed the launch of the smaller xrFuse 2 in August 2014. This machine takes
all of the high quality features of the xrFuse 6, built into a smaller unit, designed for lower throughput labs in the
cement, research and industrial sectors. Such customers are prevalent in markets such as USA and Europe,
where there are more opportunities for capital equipment than consumables. Again, the machine fills a gap in
XRF’s product range that has remained open to opportunities for a number of years.
Following the release of xrFuse 2 and xrFuse 6, the division is currently working on a number of further new
product initiatives.
A number of exciting acquisition opportunities were reviewed throughout the year. Unfortunately some of these
acquisition targets did not meet the Board’s strict criteria and thus the processes were terminated. The Board
continues to work its way throughout a pipeline of high quality opportunities, which may be completed in 2015.
With significant cash reserves available, XRF is well positioned to take advantage of these opportunities.
Looking forward into 2015, the focus of the Board and Management revolves around new product developments,
international sales growth, acquisitions and tight control over costs. Although XRF’s traditional mining markets
continue to prove difficult, the Company is positioning itself for growth in alternative areas. Many of the initiatives
currently underway will also ensure that the Company is positioned in the best possible way when an
improvement in mining occurs. In the interim, XRF’s strong balance sheet is allowing it to invest for the future, to
ensure it remains the leader in its field.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
The Kitco Labware purchase agreement required XRF to pay the former owners additional consideration of up to
CAD$600,000, should the business meet certain profit milestones. The unaudited results indicate that these
milestones have not been achieved, therefore a liability for additional consideration has not been recorded.
A final dividend of 1.1 cents per share fully franked was declared on 22 August 2014, for the 2014 financial year
results, with a record date of 12 September 2014 and payment date of 26 September 2014.
There were no other events subsequent to the reporting date which have significantly affected or may significantly
affect the XRF Scientific Limited operations, results or state of affairs in future years.
6 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
DIRECTORS’ REPORT
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Likely results in the operations of the economic entity and the expected results of those operations in the future
financial year have not been included in this report, as the disclosure of such information may lead to commercial
prejudice to the economic entity.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There have been no significant changes in the affairs of the Group.
ENVIRONMENTAL REGULATION
All companies within the group continued to comply with all environmental requirements. Wherever possible,
carbon emissions have been limited, and new production techniques adopted to reduce energy use.
The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which
requires entities to report greenhouse gas emissions and energy use. For the measurement period 1 July 2013 to
30 June 2014 the directors have assessed that there are no current reporting requirements, but the Company may
be required to do so in the future. The economic entity is also subject to the environmental regulations under the
laws of the Commonwealth or of a State or Territory in which it operates. The Directors are not aware of any
breaches of these regulations.
INFORMATION ON DIRECTORS
Kenneth Baxter
Qualifications:
Chairman (Non-Executive)
Bachelor of Economics, Fellow of Australian Institute of Management and Fellow of
the Australian Institute of Company Directors
Experience:
Former Chairman of PNG Energy Developments Ltd, former Chairman of TFG
International Pty Ltd, former Non-Executive Director of the Hydro Electric
Corporation of Tasmania, former Director of Air Niugini Ltd, former Secretary of
Department of Premier & Cabinet Victoria, former Chairman of the Australian Dairy
Corporation & Thai Dairy Industries Ltd.
Other current directorships:
Chairman of PNG Sustainable Infrastructure Ltd and of Infraco Asia Developments
Former directorships in last 3 years: Chairman of PNG Energy Developments Ltd and other private companies
Special responsibilities:
Chairman of the Board, member of the Audit & Governance Committee and
Pte Ltd; Non-Executive Director of Dairy NSW, and other private companies
No. of options:
No. of shares:
David Brown
Qualifications:
Experience:
Remuneration Committees
Nil
578,334 fully paid ordinary shares
Director (Non-Executive)
Bachelor of Science, Bachelor of Economics
Has 40 years of experience in research and development and manufacturing of X-
Ray Flux chemicals, formerly chief chemist for Swan Brewery Co. Ltd, formerly
Chairman of Scientific Industries Council of WA.
Other current directorships:
Private companies only
Former directorships in last 3 years: Private companies only
Special responsibilities:
Technical consultant to XRF Chemicals Pty Ltd
No. of options:
No. of shares:
Nil
7,870,916 fully paid ordinary shares
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 7
For personal use only
DIRECTORS’ REPORT
INFORMATION ON DIRECTORS continued
David Kiggins
Qualifications:
Director (Non-Executive)
Bachelor of Science (HONS), member of the Institute of Chartered Accountants of
England and Wales, member of the Institute of Chartered Secretaries and member
of Australian Institute of Company Directors.
Experience:
Spent ten years at Arthur Andersen, working in audit and business consulting, in the
UK and Australia. Experience in public companies includes roles such as GM
Business Development and Company Secretary at Automotive Holdings Group
Limited, and as Finance Director and Company Secretary at Global Construction
Services Limited. Currently the Chief Financial Officer at the Heliwest Group.
Other current directorships:
Private companies only
Former directorships in last 3 years: Private companies only
Special responsibilities:
Chairman of the Audit & Governance Committee, member of the Remuneration
No. of options:
No. of shares:
Fred Grimwade
Qualifications:
Committee
Nil
212,900
Director (Non-Executive)
Bachelor of Commerce, Bachelor of Law, Master of Business Administration,
Fellow of the Institute of Chartered Secretaries of Australia, Life Member of the
Financial Services Institute of Australasia and Fellow of the Australian Institute of
Company Directors.
Experience:
Has held general management positions at Colonial Agricultural Company, the
Colonial Group, Western Mining Corporation and Goldman, Sachs & Co. He has a
broad range of experience in strategic management, mining, finance, corporate
governance and law. Currently a Principal and Executive Director of Fawkner
Capital, a specialist corporate advisory and investment firm.
Other current directorships:
Chairman of CPT Global Limited; Non-Executive Director of Select Harvests
Limited, Troy Resources Limited, Australian United Investment Company Limited,
NewSat Limited and other private companies
Former directorships in last 3 years: Chairman of Fusion Retail Brands Pty Ltd and other private companies
Special responsibilities:
Chairman of the Remuneration Committee, member of the Audit & Governance
No. of options:
No. of shares:
Committee
Nil
400,000
COMPANY SECRETARIES
Vance Stazzonelli, B.Comm, CPA – Vance has held the role of Company Secretary since June 2008.
Andrew Watson, B.Comm, CA – Andrew was appointed Joint Company Secretary in August 2013.
OTHER KEY MANAGEMENT
Vance Stazzonelli (Chief Executive Officer – XRF Scientific Limited)
Vance joined XRF Scientific as CFO in October 2009. He was subsequently appointed to Chief Operating Officer in
January 2011 and then Chief Executive Officer in August 2012. Vance is a Certified Practising Accountant. He has
held the role of Company Secretary since June 2008.
8 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
The number of meetings held by the Board of Directors including meetings of the committees of the Board and
the number of meetings attended by each of the Directors during the financial year ended 30 June 2014 were as
follows:
Kenneth Baxter
David Brown
David Kiggins
Fred Grimwade
Full meetings of Directors
Meetings of committees -
Audit, Corporate Governance
& Remuneration
A
14
14
14
14
B
14
13
14
14
A
4
**
4
4
B
4
**
4
4
A = Meetings held during the time the director held office or was a member of the Committee during the year
B = Meetings attended
** = Not a member of the relevant Committee
REMUNERATION REPORT (Audited)
(a) Principles used to determine the nature and amount of remuneration.
Remuneration governance
The Remuneration Committee is a committee of the Board. It is primarily responsible for making
recommendations to the Board on:
the over-arching executive remuneration framework
operation of the incentive plans which apply to the executive team, including key performance indicators
and performance hurdles
remuneration levels of executive directors and other key management personnel, and
non-executive director fees
Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with
the long-term interests of the company. The Corporate Governance Statement provides further information on
the role of this committee.
Non-executive directors
Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities
of, the directors. Non-executive directors’ fees and payments are reviewed periodically by the Board.
The Chairman’s fees are determined independently to the fees of non-executive directors based on
comparative roles in the external market. The Chairman is not present at any discussions relating to
determination of his own remuneration. The Chairman’s remuneration is inclusive of committee fees.
Non-executive directors may receive share options.
Directors’ fees
The current base remuneration was last reviewed in November 2012, as ratified by a resolution passed at the
2012 Annual General Meeting. The maximum currently stands at $400,000 per annum and was approved by
shareholders at the Annual General Meeting in November 2012.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 9
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (Audited) continued
Base director fees
Chairman
Non-Executive Directors
Committee Chairman
Executive pay
$80,000
$50,000
$7,500
The executive pay and reward framework has three components:
1. Base pay and benefits, including superannuation
2. Short-term performance incentives, and
3. Long-term incentives.
It is Board policy to review key management annually, and adjust such compensation taking into account the
manager’s performance, the performance of the entity which they manage, and the performance of the
group of companies.
Where appropriate, there is a direct link between financial performance (profit or growth) to key managers’
compensation by way of bonus, which is assessed under a weighted balanced scorecard method, as set out
by the Remuneration Committee at the start of each year. This method is accepted by the Board as being an
appropriate incentive for encouraging key management personnel to reach targets that are in excess of
budgeted growth.
(i) Base Pay
Executives are offered a competitive base pay that forms the fixed component of pay. Base pay for executives
is reviewed annually to ensure the executive’s pay is competitive with the market. An executive’s pay is
reviewed on promotion.
(ii) Benefits
Executives may receive benefits including car/mileage allowance.
(iii) Superannuation
Retirement benefits of 9.5%, effective 1 July 2014 (2013: 9.25%), of the base pay are delivered to the individual
super fund of the executive’s choice.
(iv) Short-term performance incentives
Bonuses may be paid on the performance of the individual entity based on full year performance for the
financial year. In most instances bonus payments are based on the achievement of a percentage of that
year’s budget and targets/objectives being met. A short term incentive (STI) pool is available for executives
during the annual review, which is subject to caps that are in place.
Using a profit target ensures variable reward is only available when value has been created for shareholders
and when profit is consistent with the business plan. Specific details of key management personnel bonuses
can be found under the service contracts section of this report.
(v) Long-term incentives
There are no specific long term incentives in place, however the matter is currently being considered by the
Remuneration Committee.
10 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (Audited) continued
(b) Details of remuneration
(i) Non-Executive
Kenneth Baxter
David Brown
David Kiggins
Fred Grimwade
Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
(ii) Other Key Management Personnel
The following persons also had authority and responsibility for planning, directing and controlling the
activities of the Group:
Vance Stazzonelli
Chief Executive Officer
Percentage of performance related compensation of total remuneration
Certain key management personnel are paid performance bonuses in addition to set remuneration amounts.
The Board of Directors have set these bonuses to encourage growth and profitability. Bonuses are paid as
per the conditions set out in page 10.
Fixed Remuneration
The level of fixed remuneration is set as to provide base level of remuneration which is both appropriate to
the position and its competitive market. Fixed remuneration is reviewed annually by the Remuneration
Committee based on market rates, as well as having regard to the Company, divisional and individual
performance. The fixed remuneration of other key management personnel is contained in information that
follows.
Variable Remuneration (Short-Term Incentive)
To assist in achieving the objective of retaining a high quality executive team, the Remuneration Committee
links the nature and amount of the executive emoluments to the Company’s financial and operating
performance.
Variable remuneration is calculated based on an assessment of the executive’s achievement of key
performance indicators, which is assessed under a weighted balanced scorecard method, as set out by the
Remuneration Committee at the start of each year.
Options issued as part of total remuneration
No options have been issued in 2013 or 2014 as part of total remuneration.
Securities Trading Policy
The Company has adopted a policy that imposes certain restrictions on Directors and employees trading in
the securities of the Company. The restrictions have been imposed to prevent trading in contravention of the
insider trading provisions of the Corporations Act.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 11
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (Audited) continued
(b) Details of remuneration continued
Voting and comments made at the company’s 2013 Annual General Meeting
The company received validly appointed proxies of 97% of “yes” votes on its remuneration report for the 2013
financial year. The remuneration resolution was carried on a show of hands. The company did not receive any
specific feedback at the AGM or throughout the year on its remuneration practices.
Amounts of remuneration
Details of the remuneration of directors and the key management personnel (as defined in AASB 124 Related
Party Disclosures) of XRF Scientific Limited are set out in the following:
Short-term Benefits
Post-employment
Benefits
Long-term Benefits
2014
Non-executive directors
Kenneth Baxter
David Brown
David Kiggins
Fred Grimwade
Sub-total non-executive directors
Other key management personnel
Vance Stazzonelli
Sub-total key management personnel
Cash
Salary
$
73,226
45,767
52,632
52,632
224,257
237,986
237,986
462,243
Cash
Long
Service
Termination
Bonuses
Other
Superannuation
Leave
benefits
$
$
$
$
-
-
-
-
-
-
-
-
-
1 163,032
-
-
163,032
-
-
163,032
6,774
4,233
4,868
4,868
20,743
24,977
24,977
45,720
-
-
-
-
-
4,499
4,499
4,499
-
-
-
-
-
-
-
-
Short-term Benefits
Post-employment
Benefits
Long-term Benefits
2013
Non-executive directors
Kenneth Baxter
David Brown
David Kiggins
Fred Grimwade
John Parsons (resigned 23 May 2013)
Cash
Salary
$
73,395
23,462
52,752
52,752
21,701
Sub-total non-executive directors
224,062
Other key management personnel
Vance Stazzonelli
Sub-total key management personnel
227,378
227,378
451,440
32,110
32,110
32,110
Cash
Long
Service
Termination
Bonuses
Other
Superannuation
Leave
benefits
$
$
$
$
-
-
-
-
-
-
-
1 175,557
-
1,835
1 52,534
229,926
-
-
229,926
6,605
-
4,748
4,913
1,953
18,219
23,354
23,354
41,573
-
-
-
-
-
-
6,714
6,714
6,714
-
-
-
-
-
-
-
-
-
Total
$
80,000
213,032
57,500
57,500
408,032
267,462
267,462
675,494
Total
$
80,000
199,019
57,500
59,500
76,188
472,207
289,556
289,556
761,763
1 Technical services provided by consultancy (such as technical sales and support, analytical method development).
12 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (Audited) continued
(b) Details of remuneration continued
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Fixed Remuneration
At risk - STI
At risk - LTI
2014
2013
2014
2013
2014
2013
Other key management personnel
Vance Stazzonelli
100%
88%
-
12%
–
–
Refer to page 11 for details of the Company’s policies on short-term incentives.
(c) Shareholder Wealth
The following is a summary of key shareholder wealth statistics for the Company over the past 5 years (listed
since 2006).
2009/10
2010/11
2011/12
2012/13
2013/14
EBIT
$
382,807
3,841,980
4,809,646
5,142,299
3,358,127
Earnings Per
Share
Cents
0.3
2.5
2.8
2.9
1.8
Share
Cents
–
1.0
1.5
1.7
1.1
Dividends
Declared Per
Share Price
Market
Capitalisation
Cents
$
15
22
26
31
21
13,741,752
22,798,237
33,494,179
40,968,700
27,752,990
(d) Shares held by key management personnel
Details of equity instruments (other than options and rights) held directly, indirectly or beneficially by key
management personnel and their related parties are as follows:
Name
July 2013
compensation
rights
Other changes
June 2014
Balance at 1
Granted as
options on
Balance at 30
Received on
exercise of
Directors of XRF Scientific Limited
Kenneth Baxter
David Brown
David Kiggins
Fred Grimwade
Other key management personnel
Vance Stazzonelli
1 On-market trade.
Option holdings
518,334
8,432,000
125,000
200,000
190,000
-
-
-
-
-
-
-
-
-
-
1 60,000
1 (561,084)
1 87,900
1 200,000
578,334
7,870,916
212,900
400,000
1 40,000
230,000
There were no options over ordinary shares in the company held during the financial year by directors of XRF Scientific Limited
or other key management personnel of the Group.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 13
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (Audited) continued
(e) Service Agreements
Remuneration for the Chief Executive Officer is set out in a service agreement, which is detailed below:
Vance Stazzonelli, Chief Executive Officer of XRF Scientific Limited
Terms of agreement – Ongoing employment contract effective 1 July 2012. Payment of a termination benefit on
early termination by the Company, other than for gross misconduct, equal to six months full pay. Notice period by
the employee of six months. Payment of bonuses is based on a range of strategic, financial, operational,
personnel, and Board-related key performance indicators.
No other key management personnel are currently employed under service contracts.
(f) Share-based compensation
There was no share based compensation to any Director or Key Management Personnel for the years ended
30 June 2013 and 2014. The Company has not adopted an employee share option scheme.
(g) Additional Information
Each individual Key Management Personnel performance bonus was discussed and reviewed against the
requirements set out on page 10. It was agreed that the proposed performance bonuses met these conditions,
specifically individual performance against agreed Key Performance Indicators.
For each cash bonus included in the tables on page 12, the percentage that was paid and vested in the prior
financial year, and the percentage that was forfeited because the person did not meet the service and
performance criteria is set out below. No cash bonuses were provided for in the current financial year.
Directors
Kenneth Baxter
David Brown
David Kiggins
Fred Grimwade
Cash bonus
Paid
Forfeited
%
%
Year
granted
–..
–..
–..
–..
–..
–..
–..
–..
–
–
–
–
Other key management personnel
Vance Stazzonelli
100..
–..
2013
(h) Remuneration consultants
No remuneration consultants were used in the years ended 30 June 2014 and 30 June 2013.
(i) Other transactions with key management personnel
Premises were rented from a related entity of Director David Brown during the financial year. These properties
were rented on normal commercial terms and conditions, totalling $108,434 (2013: $100,977). No amounts were
outstanding at the end of the year.
As the sole director of XRF Chemicals Pty Ltd, Vance Stazzonelli is currently guarantor on a lease in Osborne
Park.
(j) Loans to directors and executives
No loans were made to directors and executives during the financial years ended 30 June 2014 and 30 June 2013.
End of remuneration report (Audited).
14 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
DIRECTORS’ REPORT
OPTIONS
No unissued ordinary shares of XRF Scientific Limited remain under option at the date of this report.
INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the company paid insurance premiums to insure the directors and officers of the
company and its Australian–based controlled entities, and general managers of each of the divisions of the Group.
The liabilities insured are legal costs that may be incurred in defending civil or some criminal proceedings that
may be brought against the officers in their capacity as officers of entities in the Group, and any other payments
arising from liabilities incurred by the officers in connection with such proceedings. This does not include such
liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the
officers of their position or of information to gain advantage for themselves or someone else or to cause detriment
to the company. It is not possible to apportion the premium between amounts relating to the insurance against
legal costs and those relating to other liabilities.
PROCEEDINGS ON BEHALF OF OR INVOLVING THE ECONOMIC ENTITY
No person has applied for leave of Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the
purpose of taking responsibility on behalf of the company for all or any part of those proceedings.
No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section
237 of the Corporations Act 2001.
NON-AUDIT SERVICES
Details of the non-audit services provided by the Company’s external auditor BDO Audit (WA) Pty Ltd during the
year ended 30 June 2014 are outlined in the following table. Based on advice from the Company’s Audit and
Governance Committee, the Directors are satisfied that the provision of non-audit services is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001. The nature and the scope of
each type of non-audit service provided means that auditor independence was not compromised.
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its
related practices and non-related audit firms:
Assurance & other services
BDO Audit (WA) Pty Ltd
Audit and review of financial reports
Taxation services
Other services
Consolidated
2014
$
2013
$
106,105
34,119
3,535
98,081
59,070
1,836
Total remuneration for audit and other services
143,759
158,987
The Board is satisfied that the auditors of the Company, BDO Audit (WA) Pty Ltd remain independent.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 15
For personal use only
DIRECTORS’ REPORT
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 17.
AUDITOR
BDO Audit (WA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors and signed for and on behalf of the Board by:
Kenneth Baxter
Chairman
Perth
24 September 2014
16 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY PETER TOLL TO THE DIRECTORS OF XRF SCIENTIFIC LIMITED
As lead auditor of XRF Scientific Limited for the year ended 30 June 2014, 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 XRF Scientific Limited and the entities it controlled during the period.
Peter Toll
Director
BDO Audit (WA) Pty Ltd
Perth, 24 September 2014
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 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 (WA) 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 (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
For personal use only CORPORATE GOVERNANCE DISCLOSURE
ASX CORPORATE GOVERNANCE COUNCIL’S PRINCIPLES
The table below summarises the Company’s compliance with the ASX Corporate Governance Council’s Revised
Principles and Recommendations.
Comply
Yes/No
Reference/
Explanation
Lay solid foundations for management and oversight
1.1: Companies should establish the functions reserved to
the Board and those delegated to senior executives and
disclose those functions.
1.2: Companies should disclose the process for evaluating
the performance of senior executives.
1.3: Companies should provide the information indicated in
the Guide to reporting on Principle 1.
Yes
Page 22
Yes
Page 10
Yes
Page 22
Structure the Board to add value
2.1: A majority of the Board should be independent directors.
Yes
2.2: The chair should be an independent director.
2.3: The roles of chair and chief executive officer should not
be exercised by the same individual.
2.4: The Board should establish a nomination committee.
Yes
Yes
No
K. Baxter, D. Kiggins and F. Grimwade are
independent directors, therefore a majority of
the Board is independent.
K. Baxter is an independent Director.
Vance Stazzonelli is Chief Executive Officer and
Kenneth Baxter is Chairman.
Given the size of the Board, it was determined
that the Board will execute the functions of a
nomination committee and that a separate
nomination committee is not warranted.
2.5: Companies should disclose the process for evaluating
the performance of the Board, its committees and individual
directors.
Yes
Page 22
2.6: Companies should provide the information indicated in
the Guide to reporting on Principle 2.
Yes
In addition to the information presented in the
Company’s 2014 Annual Report:
See pages 7-8 for details of the skills,
experience and expertise relevant to the
position of director held by each director in
office at the date of the annual report.
K. Baxter, D. Kiggins and F. Grimwade are
considered to be independent directors.
There is no formal procedure agreed by
the Board for directors to take independent
professional advice at the expense of the
company. However, directors are
cognisant of the fact the independent
advice should be obtained if and as when
the need arises.
As no nomination committee exists, a
formal charter can’t be posted to the
Company’s website.
18 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
CORPORATE GOVERNANCE DISCLOSURE
Structure the Board to add value (continued)
2.6: Companies should provide the information indicated in
the Guide to reporting on Principle 2. (continued)
The terms of office for each Director to 30
June 2014 are as follows:
Comply
Yes/No
Reference/
Explanation
o
o
o
o
K. Baxter – Appointed 5 July
2005 as Non-Executive Director
and subsequently 7 May 2009 as
Chairman.
D. Brown – Appointed 7 June
2004 as Executive Director and
subsequently 1 October 2009 as
Non-Executive Director.
D. Kiggins – Appointed 1 May
2012 as Non-Executive Director.
F. Grimwade – Appointed 1 May
2012 as Non-Executive Director.
There is no formal procedure for the
selection and appointment of new directors
to the Board
Although the Company has an older code of
conduct, it will move to adopt an up to date
version, in order to address the various
recommendations under Principle 3.
Promote ethical and responsible decision-making
3.1: Companies should establish a code of conduct and
disclose the code or a summary of the code as to:
No
•
•
•
the practices necessary to maintain confidence in the
company’s integrity
the practices necessary to take into account their legal
obligations and the reasonable expectations of their
stakeholders
the responsibility and accountability of individuals for
reporting and investigating reports of unethical
practices.
3.2: Companies should establish a policy concerning
diversity and disclose the policy or a summary of that policy.
The policy should include requirements for the Board to
establish measurable objectives for achieving gender
diversity for the Board to assess annually both the objectives
and progress in achieving them.
3.3: Companies should disclose in each annual report the
measurable objectives for achieving gender diversity set by
the Board in accordance with the diversity policy and
progress towards achieving them.
3.4: Companies should disclose in each annual report the
proportion of women employees in the whole organisation, in
senior executive positions and on the Board.
No
No
Yes
The Company implemented an Equal
Opportunity policy in 2013, however, measurable
objectives for gender diversity have not yet been
set.
The Board of Directors has determined that
Gender diversification may be important to the
ongoing success of the Company. Measurable
objectives for gender diversity have not yet been
set.
Whole organisation – 16%
Senior Executive Positions – 10%
Board of Directors – 0%
3.5: Companies should provide the information indicated in
the Guide to reporting on Principle 3
Yes
Page 24
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 19
For personal use only
CORPORATE GOVERNANCE DISCLOSURE
Comply
Yes/No
Reference/
Explanation
Safeguard integrity in financial reporting
4.1: The Board should establish an audit committee.
4.2: The audit committee should be structured so that it:
•
•
•
•
consists only of non-executive directors
consists of a majority of independent directors
is chaired by an independent chair, who is not chair of
the Board
has at least three members.
4.3: The audit committee should have a formal charter.
4.4: Companies should provide the information indicated in
the Guide to reporting on Principle 4.
Yes
Yes
Yes
Yes
Page 22
Page 22. The Audit and Governance Committee
comprises three Board members, one being the
non-executive Chairman, and two non-executive
directors. The Chairman of the committee is
different from the Chairman of the Board.
Page 22
The Audit Committee Charter has been posted to
the Company’s website.
There are formal procedures for the selection
and appointment of the Company’s external
auditor.
The Company’s external auditor has a policy
regarding the rotation of engagement partners.
Make timely and balanced disclosure
5.1: Companies should establish written policies designed to
ensure compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at a senior
executive level for that compliance and disclose those
policies or a summary of those policies.
Yes
Page 24
5.2: Companies should provide the information indicated in
the Guide to reporting on Principle 5.
Yes
Page 24
Respect the rights of shareholders
6.1: Companies should design a communications policy for
promoting effective communication with shareholders and
encouraging their participation at general meetings and
disclose their policy or a summary of that policy.
Yes
Page 24
6.2: Companies should provide the information indicated in
the Guide to reporting on Principle 6.
Yes
Page 24
Recognise and manage risk
7.1: Companies should establish policies for the oversight
and management of material business risks and disclose a
summary of those policies.
7.2: The Board should require management to design and
implement the risk management and internal control system
to manage the company's material business risks and report
to it on whether those risks are being managed effectively.
The Board should disclose that management has reported to
it as to the effectiveness of the company's management of its
material business risks.
Yes
Page 24
Yes
Page 24
20 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
CORPORATE GOVERNANCE DISCLOSURE
Recognise and manage risk (continued)
7.3: The Board should disclose whether it has received
assurance from the chief executive officer (or equivalent) and
the chief financial officer (or equivalent) that the declaration
provided in accordance with section 295A of the Corporations
Act is founded on a sound system of risk management and
internal control and that the system is operating effectively in
all material respects in relation to financial reporting risks.
Comply
Yes/No
Yes
Reference/
Explanation
The Board has received a statement from the
Chief Executive Officer and the Chief Financial
Officer that the declaration provided in
accordance with section statement 295A of the
Corporations Act 2001 is founded on a sound
system of risk management and internal control
and that the system is operating efficiently and
effectively in all material respects in relation to
the financial reporting risks.
7.4: Companies should provide the information indicated in
the Guide to reporting on Principle 7.
Yes
Page 24
Remunerate fairly and responsibly
8.1: The Board should establish a remuneration committee.
8.2: The Remuneration Committee should be structured so
that it:
•
•
•
consists of a majority of independent directors
is chaired by an independent chair
has at least three members.
8.3: Companies should clearly distinguish the structure of
non-executive directors’ remuneration from that of executive
directors and senior executives.
8.3: Companies should provide the information indicated in
the Guide to reporting on Principle 8.
Yes
Yes
Yes
Yes
Page 22
Page 22. The Remuneration Committee
comprises three Board members, one being the
non-executive Chairman, and two non-executive
directors. The Chairman of the committee is
different from the Chairman of the Board.
Pages 9-14, the remuneration report discloses
structure of Director remuneration.
A review of the overall performance of the Board
was conducted during 2012, which resulted in
the appointment of an additional two
independent non-executive Directors.
Descriptions for the process for performance
evaluation of the Board, its committees and
individual directors, and key executives are
available in the remuneration report on pages 9-
14, as well as page 22.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 21
For personal use only
CORPORATE GOVERNANCE DISCLOSURE
ROLE OF THE BOARD
The Board of Directors is responsible for the overall corporate governance of XRF Scientific Limited, and is
committed to the principles underpinning best practice in corporate governance, applied in a manner that meets
ASX standards and best addresses the Directors’ accountability to shareholders. Whilst the Company will
endeavour to comply with all of the guidelines under the ASX Corporate Governance Recommendations, the Board
considers that the Company is not currently of a size, nor are its affairs of such complexity, to justify the additional
expense of compliance with all recommendations.
A brief summary of XRF’s main corporate governance policies and practices is outlined below.
THE BOARD OF DIRECTORS
The Board is comprised of non-executive Directors. Presently there are four non-executive Directors (three
independent). The chairman is an independent director. It is XRF’s aim to have a majority of non-executive
directors on the Board.
The membership of the Board, its activities and composition is subject to periodic review. The criteria for
determining the identification and appointment of a suitable candidate for the Board shall include the quality of
the individual, experience and achievement, credibility within the Company’s scope of activities, intellectual ability
to contribute to the Board’s duties and ability to undertake Board duties and responsibilities. The Company’s full
Board is responsible for such nominations and appointments rather than a separate committee.
Performance of the Board
The Board undertakes an annual self-assessment of its collective performance, the performance of the Chairman
and the performance of its committees. The results are discussed at Board level and any action plans are
documented together with specific performance goals which are agreed for the coming year. Further, the
Chairman undertakes an annual assessment of the performance of individual directors and meets privately with
each director to discuss this assessment. A Board review will be conducted in the second half of the 2014
calendar year.
COMMITTEES OF THE BOARD
The Board has established the following committees:
Audit and Governance Committee
The Audit and Governance Committee comprises three Board members, one being the non-executive Chairman,
and two non-executive directors. The Chairman of the committee is different from the Chairman of the Board. The
primary responsibility of this Committee is to monitor the integrity of the financial statements of the Company,
and to review and monitor the Company’s internal financial control system. The committee has implemented a
formal charter.
Remuneration Committee
The Remuneration Committee comprises three Board members, one being the non-executive Chairman, and two
non-executive directors. The Chairman of the committee is different from the Chairman of the Board. The primary
responsibility of this Committee is to discharge the Board’s responsibilities in relation to remuneration of the
Company’s executives, including securities and benefit plans. Further information on directors’ and executives’
remuneration is set out in the Remuneration Report. The committee has implemented a formal charter.
22 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
CORPORATE GOVERNANCE DISCLOSURE
RESPONSIBILITIES OF THE BOARD
The management and control of the business is vested in the Board. The Board’s primary responsibility is to
oversee the Company’s business activities and management for the benefit of the shareholders.
The Board strives to create shareholder value and ensure that shareholder’s funds are safeguarded.
The key responsibilities of the Board include:
•
•
•
•
•
•
The overall corporate governance of the Company including its strategic direction and financial objectives,
establishing goals for management and monitoring the attainment of these goals;
Approving strategic plans, key operational and financial matters, as well as major investment and divestment
proposals;
Approving the nominations of Directors to the Board and appointment of key executives;
Evaluating and rewarding senior management and ensuring executive succession planning;
Ensuring that the Directors have a good understanding of the Company’s business;
Ensuring Management maintains a sound system of internal controls to safeguard the assets of the Company;
• Monitoring the performance of the Company;
•
Appointing and removing Managing Director or Chief Executive Officer;
• Ratifying the appointment and, where appropriate, the removal of the Chief Financial Officer (or equivalent)
and/or the company secretary;
• Reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct
and legal compliance, safety and occupational health policies, community and environmental issues;
• Monitoring senior management’s performance and implementation of strategy, and ensuring appropriate
resources are available; and
•
Approving and monitoring the progress of major capital expenditure, capital management, and acquisitions
and divestitures, together with any recommendations from management associated with these activities.
POLICIES AND PROCEDURES
Continuous Disclosure Policy
The Company has adopted a continuous disclosure policy so as to comply with its continuous disclosure
obligations of ASX. The aims of this policy are to:
• Report continuous disclosure matters to the Board;
•
Assess new information and co-ordinate any disclosure or releases to the ASX, or any advice required in
relation to that information, in a timely manner;
• Provide an audit trail of the decisions regarding disclosure to substantiate compliance with the Company’s
continuous disclosure obligations; and
•
Ensure that employees, consultants, associated entities and advisors of the Company understand the
obligations to bring material information to the attention of the Board.
Securities Trading Policy
The Company has adopted a policy that imposes certain restrictions on Directors and employees trading in the
securities of the Company. The restrictions have been imposed to prevent trading in contravention of the insider
trading provisions of the Corporations Act.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 23
For personal use only
CORPORATE GOVERNANCE DISCLOSURE
POLICIES AND PROCEDURES continued
Risk Management Policy
The Board has developed and implemented policies and practices which ensure that the material risks facing the
Company are adequately identified, assessed, monitored, and managed throughout the whole organisation. These
include:
• Comprehensive Board papers containing relevant operational, strategic, financial and legal information
circulated to Directors before each meeting;
•
•
•
Actual results for the Company presented to the Board at each meeting, compared against budget and
forecast, with revised forecasts if required;
Financial authority limits set by the Board; and
Insurance cover appropriate to the size and nature of the Company’s operations to reduce the financial
impact of any significant insurable losses.
Shareholder Communications Strategy
The Board aims to ensure that shareholders are kept informed of all major developments affecting the Company.
Information is communicated to shareholders through:
• Continuous disclosure in the form of public announcements on the ASX;
•
•
•
Annual and half-year reports to shareholders;
Investor briefings;
The Chief Executive Officer’s address delivered at the Annual General Meeting; and
• Notices of all meetings of shareholders and explanatory notes of proposed resolutions.
Equal Opportunity Policy
The Company values its employees and believes in conducting business ensuring fair, equitable and non-
discriminatory employment and operational practices. Equal opportunity in employment means that an employee
is judged on their ability to do their job based on merit rather than any assumption about the employee based on
particular characteristics.
24 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2014
Revenue from continuing operations
Cost of sales
Gross profit
Other income
Administration expenses
Other expenses
Occupancy expenses
Share of profit / (loss) of investments accounted for using the equity
method
Finance costs
Profit before income tax
Income tax expense
Note
Consolidated
2014
$
2013
$
5
21,850,062
22,807,416
(13,242,679)
(13,380,637)
8,607,383
9,426,779
5
193,059
393,454
(3,760,155)
(3,409,445)
(789,947)
(616,466)
(521,966)
(481,190)
12
(92,158)
(500)
45,666
(10,865)
3,541,216
5,442,433
7
(1,099,958)
(1,629,661)
Profit after income tax from continuing operations attributable to equity
holders of XRF Scientific Limited
2,441,258
3,812,772
Other comprehensive income
Items that will be classified to profit or loss
Foreign currency translation differences
Total comprehensive income for the year
(136,997)
-
2,304,261
3,812,772
Profit and total comprehensive income attributable to equity holders of
XRF Scientific Limited
2,304,261
3,812,772
Earnings per share for the year attributable to equity holders of
XRF Scientific Limited
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
31
31
1.8
1.8
2.9
2.9
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 25
For personal use only
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2014
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Investment in convertible note
Total Current Assets
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Investments accounted for using the equity method
Deferred tax asset
Total Non-Current Assets
Total Assets
CURRENT LIABILITIES
Trade and other payables
Provisions
Other current liabilities
Current income tax liability
Total Current Liabilities
NON-CURRENT LIABILITIES
Deferred tax liability
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
EQUITY
Issued capital
Reserves
Retained profits
Total Equity
Note
Consolidated
2014
$
2013
$
8
9
10
11
13
14
12
15
16
17
18
19
6,201,770
8,641,808
3,867,255
3,522,551
2,977,727
2,732,258
210,926
-
351,782
150,770
13,257,678
15,399,169
3,582,303
3,665,552
13,566,922
11,507,772
656,300
432,301
335,906
349,037
18,237,826
15,858,267
31,495,504
31,257,436
1,291,430
1,125,849
369,580
157,882
252,521
289,395
656
570,735
2,071,413
1,986,635
171,978
133,733
305,711
82,566
127,787
210,353
2,377,124
2,196,988
29,118,380
29,060,448
20
21(a)
21(b)
18,257,772
18,257,772
622,246
759,243
10,238,362
10,043,433
29,118,380
29,060,448
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying
notes.
26 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2014
30 JUNE 2014 – CONSOLIDATED
Issued Share
Capital
Share Option
Reserve
$
$
Foreign Currency
Translation
Reserve
$
Retained Profits
Total
$
$
Balance at 1 July 2013
18,257,772
759,243
-
10,043,433
29,060,448
Profit for the period
Other comprehensive income / (loss)
Total comprehensive income / (loss) for the period
Transactions with Equity Holders in their capacity as Equity
Holders
Dividends paid
-
-
-
-
-
-
-
-
-
-
-
(136,997)
(136,997)
2,441,258
-
2,441,258
2,441,258
(136,997)
2,304,261
-
-
(2,246,329)
(2,246,329)
(2,246,329)
(2,246,329)
Balance at 30 June 2014
18,257,772
759,243
(136,997)
10,238,362
29,118,380
30 JUNE 2013 – CONSOLIDATED
Balance at 1 July 2012
Profit for the year
Other comprehensive income
Total comprehensive income for the period
Transactions with Equity Holders in their capacity as Equity
Holders
Ordinary shares issued, net of transaction costs and
deferred income tax expense
Dividends paid
Issued
Share Capital
Share Option
Reserve
$
$
17,594,594
759,243
-
-
-
663,178
-
663,178
-
-
-
-
-
-
Balance at 30 June 2013
18,257,772
759,243
Foreign Currency
Translation
Reserve
$
Retained Profits
Total
$
$
-
-
-
-
-
-
-
-
8,163,015
26,516,852
3,812,772
-
3,812,772
3,812,772
-
3,812,772
-
(1,932,354)
(1,932,354)
663,178
(1,932,354)
(1,269,176)
10,043,433
29,060,448
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 27
For personal use only
CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT 30 JUNE 2014
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Finance costs
Other revenue
Income taxes paid
Interest received
Note
Consolidated
2014
$
2013
$
21,656,004
23,955,980
(17,814,574)
(18,069,470)
(500)
-
(10,865)
201,146
(1,412,025)
(2,262,659)
183,590
316,633
Net cash inflow (outflow) from operating activities
29
2,612,495
4,130,765
23
Cash flows from investing activities
Payments for property, plant and equipment
Payment for acquisition of business
Payments for intangibles
Proceeds from sales of intangible assets
Amounts received under LIBS IP license agreements
Payments for additional investments accounted for under the
equity method
Proceeds from sale of property, plant and equipment
Net cash inflow (outflow) from investing activities
Cash flows from financing activities
Dividends Paid
Proceeds from issue of shares (net of transaction costs)
Repayment of borrowings
Net cash inflow (outflow) from financing activities
Cash and cash equivalents at the beginning of the financial period
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the end of the financial period
8
(408,366)
(1,292,810)
(1,798,890)
(459,693)
-
122,527
-
-
350,000
91,699
(261,782)
-
-
26,203
(2,806,204)
(824,908)
(2,246,329)
(1,932,354)
-
-
661,683
(109,245)
(2,246,329)
(1,379,916)
8,641,808
(2,440,038)
6,201,770
6,715,867
1,925,941
8,641,808
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
28 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have
been consistently applied to all the years presented.
(a) Basis of preparation
The financial report of XRF Scientific Limited for the year ended 30 June 2014 was authorised for issue in accordance with
a resolution of the directors on 24 September 2014 and covers XRF Scientific Limited as an individual entity as well as the
consolidated entity consisting of XRF Scientific Limited and its subsidiaries.
These financial statements are presented in the Australian currency.
XRF Scientific Limited is a company limited by shares incorporated in Australia and is a for-profit entity whose shares are
publicly traded on the Australian Stock Exchange.
These general purpose financial statements have been prepared in accordance with Australian Standards, other
authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and
the Corporations Act 2001.
Compliance with IFRS
The financial statements of XRF Scientific Limited also comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board.
Historical cost convention
These financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of financial statements 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.
Financial statement presentation
The following significant accounting policies have been adopted in the preparation and presentation of the financial report.
New and amended Standards adopted by the group
None of the new Standards and amendments to Standards that are mandatory for the first time for the financial year
beginning 1 July 2013 affected any of the amounts recognised in the current period or any prior period and are not likely to
affect future periods. However, amendments made to AASB 2011-4 Amendments to Australian Accounting Standards to
Remove Individual Key Management Personnel Disclosure Requirements effective from 1 July 2013, now require the
individual requirements of AASB 124 to be removed from the notes to the financial statements and these requirements will
be disclosed in the Remuneration Report only; and additional note disclosures are required under AASB 12 Disclosure of
Interests in Other Entities effective from 1 July 2013.
(b) Principles of consolidation
(i) Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of XRF Scientific Limited
(“company” or “parent company”) as at 30 June 2014 and the results of all subsidiaries for the year then ended.
XRF Scientific Limited and its subsidiaries together are referred to in this report as the Group or the consolidated entity.
The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its investment with the
entity and has the ability to affect those returns through its power to direct the activities of the entity.
All controlled entities have a 30 June financial year end.
The consolidated financial statements are prepared by combining the financial statements of all entities that comprise the
consolidated entity, being the company (the parent company) and its subsidiaries as defined in AASB 127 ‘Consolidated and
Separate Financial Statements’. Consistent accounting policies are employed in the preparation and presentation of the
consolidated financial statements. On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are
measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the
identifiable net assets acquired is recognised as goodwill. If, after reassessment, the fair values of the identifiable net
assets acquired exceed the cost of acquisition, the deficiency is credited to profit or loss in the period of acquisition.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 29
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
The consolidated financial statements include the information and results of each subsidiary from the date on which the
company obtains control and until such time as the company ceases to control such entities. All intercompany balances
and transactions between entities in the economic entity, including any unrealised profits or losses, have been eliminated
on consolidation.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Accounting policies of subsidiaries are consistent with the policies adopted by the Group.
(ii) Investments in associates and joint-ventures
Investment in associates is accounted for using the equity method of accounting in the consolidated financial statements.
Under the equity method, the investment in the associates is carried in the consolidated statement of financial position at
cost plus post-acquisition changes in the Group’s share of net assets of the associate.
After application of the equity method, the Group determines whether it is necessary to recognise any additional
impairment loss with respect to the Group’s net investment in the associate.
The Group's share of the associate post-acquisition profits or losses is recognised in the statement of profit or loss and
other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the
investment. When the Group's share of losses in the associate equals or exceeds its interest in the associate, including any
unsecured long-term receivables and loans, the Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
The reporting dates of the associate and the Group are identical and the associate’s accounting policies conform to those
used by the Group for like transactions and events in similar circumstances.
(iii) Changes in ownership interests
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of the
controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the
amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate
reserve within equity attributable to owners of XRF Scientific Limited.
When the group ceases to have control, joint control or significant influence, any retained interest in the entity is re-
measured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial
carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled
entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that
entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that
amounts previously recognised in other comprehensive income are reclassified to profit or loss.
If the ownership interest in a jointly-controlled entity or an associate is reduced but joint control or significant influence is
retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified
to profit or loss where appropriate.
(c) 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 Chief Executive Officer.
(d) Foreign currency translation
Functional and presentation currency
The functional currency of each group entity is measured using the currency of the primary economic environment in
which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent
entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the year-end exchange rate.
30 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
Exchange differences arising on the translation of monetary items are recognised in the income statement, except where
deferred in equity as a qualifying cash flow or net investment hedge. The differences taken to equity are recognised in
profit or loss on disposal of the net investment.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction, and are recognised in the profit or loss.
Group Companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary currency
economy) that have a functional currency different from the presentation currency are translated into the presentation
currency as follows.
Assets and liabilities for each statements of financial position presented are translated at the closing rate at the date of
that statement of financial position. Income and expenses for each profit or loss item are translated at average exchange
rates. All resulting exchange differences are recognised in other comprehensive income.
(e) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of
returns, trade allowances and amounts collected on behalf of third parties. Revenue is recognised for major business
activities as follows:
(i) Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the
costs incurred or to be incurred in respect of the transaction can be measured reliably. Risks and rewards of ownership
are considered passed to the buyer at the time of delivery of goods to the customer.
(ii) Interest income
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial
assets.
(iii) Dividends
Dividend revenue is recognised when the right to receive a dividend has been established.
(iv) Rendering of services
Revenue from rendering of services is recognised by reference to the stage of completion of a contract. Stage of
completion is measured by reference to labour hours incurred to date as a percentage of total estimated labour hours for
each contract. When the contract outcome cannot be estimated reliably, revenue is recognised only to the extent of the
expenses recognised that are recoverable.
(f)
Income tax
The income tax expense or revenue for the period is the tax payable on the current years 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.
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 substantially 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 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.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 31
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in
equity.
XRF Scientific Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation. The head entity, XRF Scientific Limited, and the controlled entities in the tax consolidated group account for
their own deferred tax amounts. Current tax is accounted for by each subsidiary entity, which is then consolidated up into
the tax consolidated group, as per the tax sharing agreement. In addition to its own share of current and deferred tax
amounts, XRF Scientific 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. Assets or
liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable
from or payable to other entities in the Group. Income tax is allocated under the separate taxpayer within group approach.
Details about the tax funding agreement are disclosed in note 7.
(g) Leases
Leases of property, plant and equipment where the entity has substantially all the risks and rewards of ownership are
classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of fair value of the leased
property and the present value of the minimum lease payments. The corresponding rental obligations, net of finance
charges, are included in other long-term payables. Each lease payment is allocated between the liability and finance cost.
The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest
on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases
is depreciated over the shorter of the asset’s useful life and the lease term.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases (note 25(a)(i)). Payments made under operating leases (net of any incentives received from the lessor) are
charged to the profit or loss on a straight-line basis over the period of the lease. Lease income from operating leases is
recognised in income on a straight-line basis over the lease term.
(h) Business combinations
The acquisition method of accounting is used to account for all business combinations, including business combinations
involving entities or businesses under common control, regardless of whether equity instruments or other assets are
acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets
transferred, the liabilities incurred and the equity interests issued by the group. The consideration transferred also
includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in
the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values
at the acquisition date. On an acquisition-by-acquisition basis, the group recognises any non-controlling interest in the
acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable
assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the group’s share of the net
identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable
assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised
directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate
at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are
subsequently re-measured to fair value with changes in fair value recognised in profit or loss.
All purchase consideration is now recorded at fair value at the acquisition date. Contingent payments classified as debt are
subsequently re-measured through profit or loss. Under the group’s previous policy, contingent payments were only
recognised when the payments were probable and could be measured reliably and were accounted for as an adjustment to
the cost of acquisition.
Acquisition-related costs are expensed as incurred. Previously, they were recognised as part of the cost of acquisition and
therefore included in goodwill.
32 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
Non-controlling interests in an acquiree are now recognised either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s net identifiable assets. This decision is made on an acquisition-by-acquisition basis.
Under the previous policy, the non-controlling interest was always recognised at its share of the acquiree’s net identifiable
assets.
If the group recognises previous acquired deferred tax assets after the initial acquisition accounting is completed there
will no longer be any adjustment to goodwill. As a consequence, the recognition of the deferred tax asset will increase the
group’s net profit after tax.
(i)
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment or more frequently if events or changes in circumstances indicate that they might be impaired.
Other assets 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 flows 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.
(j) Cash and cash equivalents
For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call
with financial institutions, other short-term, highly liquid instruments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and
bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the Statement of Financial Position.
(k) Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest rate method, less provision for doubtful debts.
Trade receivables are due for settlement no more than 90 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 to the income
statement. A provision for impairment of receivables is established when there is objective evidence that the Company will
not be able to collect all amounts due according to the original terms of receivables. Other indicators that determine the
trade receivable is impaired is if the party is deemed to be bankrupt.
The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated
future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not
discounted if the effect of discounting is immaterial. The movement in the provision is recognised in the income statement.
(l)
Inventories
Raw materials and stores, work in progress and finished goods
Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable value.
Cost comprises of 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
the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts.
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.
(m)
Investments and other financial assets
Classification
The Company classifies its investments in the following categories: other financial assets, loans and receivables. The
classification depends on the purpose for which the investments were acquired. Management determines the classification
of its investments at initial recognition.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 33
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They arise when the Company provides money, goods or services directly to a debtor with no intention of
selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after
the reporting date which are classified as non-current assets. Loans and receivables are included in receivables in the
Statement of Financial Position (note 9).
(ii) Recognition and derecognition
Regular purchases and sales of investments are recognised on trade-date – the date on which the Company commits to
purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets
not carried at fair value through profit or loss.
Financial assets are derecognised when the rights to receive the cash flows from the financial assets have expired or have
been transferred and the Company has transferred substantially all the risks and rewards of ownership.
(iii) Subsequent measurement
Loans and receivables are carried at amortised cost using the effective interest method.
Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are
analysed between translation differences resulting from changes in amortised cost of the security and other changes in
the carrying amount of the security. The translation differences are recognised in profit or loss and other changes in
carrying amount are recognised in equity.
Changes in the fair value of other monetary and non-monetary securities classified as available-for-sale are recognised in
equity. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments
recognised in equity are included in the income statement as gains and losses from investment securities.
Details of how the fair value of financial instruments is determined is discussed in note 2.
(iv) Fair value
The fair value of quoted investments are based on current bid prices. If the market for a financial asset is not active (or for
unlisted securities), the Company establishes fair value by using valuation techniques. These include the use of recent
arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis,
and option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs.
(v) Impairment
The Company assesses at each balance date whether there is objective evidence that a financial asset or group of financial
assets is impaired.
If there is evidence of impairment for any of the Group’s financial assets carried at amortised cost, the loss is measured as
the difference between the asset’s carrying amount and the present value of estimated future cash flows, excluding future
credit losses that have not been incurred. The cash flows are discounted at the financial asset’s original effective interest
rate. The loss is recognised in the profit or loss.
(n) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and available-for-sale
securities) is based on quoted market prices at the reporting date.
The quoted market price used for financial assets held by the Company is the current bid price: the appropriate quoted
market price for financial liabilities is the current ask price. The fair value of financial instruments that are not traded in an
active market is determined using valuation techniques.
The Company uses a variety of methods and makes assumptions that are based on market conditions existing at each
reporting date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments
held. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining
financial instruments.
34 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
The carrying amount less impairment provision of trade receivables and payables are assumed to approximate their fair
values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash
flows at the current market interest rate that is available to the Company for similar financial instruments.
(o) Property, plant and equipment
Property, plant and equipment is 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 Company and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to profit or loss during the financial period in which they are incurred.
Depreciation is calculated using a mixture of the straight line and diminishing value methods to allocate their cost, net of
their residual values, over their estimated useful lives, as follows:
Plant and Equipment
Furniture, Fixtures and Fittings
Motor Vehicles
Office Equipment
5%-40%
5%-20%
15%-22.5%
7.5%-40%
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
profit or loss.
(p)
Intangible assets
(i) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the net
identifiable assets of the acquired subsidiary/associate/business at the date of acquisition. Goodwill on acquisitions of
subsidiaries and businesses is included in intangible assets. Goodwill on acquisitions of associates is included in
investments in associates. Goodwill is not amortised. Instead, goodwill is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated
impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the
entity sold.
Goodwill is assigned to cash-generating units for the purpose of impairment testing. Each of those cash-generating units
represents the Company’s investment in each country of operation by each primary-reporting segment (note 14(a)).
(ii) Patents, trademarks and licences
Patents, trademarks and licences have a finite useful life and are carried at cost less accumulated amortisation and
impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of patents, trademarks
and licences over their estimated useful lives, which vary from 3 to 20 years.
(iii) Research and 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 be a success considering its commercial and technical feasibility 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 1 to 4 years.
(q) Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year
which are unpaid. The amounts are unsecured and are usually paid within 60 days of recognition.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 35
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
(r) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities, which are not incremental costs relating to the actual draw-down of the facility, are
recognised as prepayments and amortised on a straight-line basis over the term of the facility.
The fair value of the liability portion of a convertible bond is determined using a market interest rate for an equivalent non-
convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or
maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognised and included
in shareholders’ equity, net of income tax effects.
Borrowings are removed from the Statement of Financial Position when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in other income or other expenses.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date.
(s) Borrowing costs
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is
required to complete and prepare the asset for its intended use or sale.
All other borrowing costs are recognised as an expense in profit or loss in the period in which they are incurred.
(t) Provisions
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the reporting date. The discount rate used to determine the present value reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the
passage of time is recognised as an interest expense.
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.
Provisions for legal claims, service warranties and make good obligations 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.
(u) Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled wholly within
12 months of the reporting date are recognised in other payables 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) Other long-term employee benefit obligations
The liability for long service leave is recognised in the provision for employee benefits and measured as 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, experiences of employee
departures and periods of service. There amounts are not expected to be settled wholly within 12 months of the reporting
date.
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 amount charged to profit or loss in respect of superannuation represents the contributions made by the Group to
superannuation funds as nominated by the individual employee.
Contributions made by the Company to employee superannuation funds are charged as expenses when incurred.
36 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
(iv) Share-based payments
For options issued the fair value at grant date is independently 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 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 fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the impact of any non-
market vesting conditions (e.g. profitability and sales forecast targets). Non-market vesting conditions are included in
assumptions about the number of options that are expected to become exercisable. At each reporting date, the entity
revises its estimate of the number of options that are expected to become exercisable.
(v) Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it
is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan
without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary
redundancy. Benefits falling due more than 12 months after reporting date are discounted to present value.
(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 from the
proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are
not included in the cost of acquisition as part of the purchase consideration
If the entity reacquires its own equity instruments, e.g. as the result of a share buy-back, those instruments are deducted
from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the
consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly in
equity.
(w) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion
of the entity, on or before the end of the financial year but not distributed at reporting date.
(x) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of associated goods and services tax (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 flows.
(y) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 37
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
(z) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2014
reporting periods. The group’s and the parent entity’s assessment of the impact of these new standards and
interpretations is set out below.
(i) AASB 9 Financial Instruments (issued December 2009 and amended December 2010 and June 2014) (effective from 1
January 2018)
Amends the requirements for classification and measurement of financial assets. The available-for-sale and held-to-
maturity categories of financial assets in AASB 139 have been eliminated. AASB 9 requires that gains or losses on financial
liabilities measured at fair value are recognised in profit or loss, except that the effects of changes in the liability’s credit
risk are recognised in other comprehensive income.
Adoption of AASB 9 is only mandatory for the year ending 30 June 2019. The group has not yet made an assessment of the
impact of these amendments.
(ii)
IFRS 15 Revenue from Contracts with Customers (issued June 2014) (effective from 1 January 2017)
An entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This means
that revenue will be recognised when control of goods or services is transferred, rather than on transfer of risks and
rewards as is currently the case under IAS 18 Revenue.
Due to the recent release of this standard, the Group has not yet made a detailed assessment of the impact of this
standard.
(iii) IFRS 9 Equity Accounting in Separate Financial Statements (issued August 2014) (effective from 1 January 2016)
Currently, investments in subsidiaries, associates and joint ventures are accounted for in separate financial statements at
cost or at fair value under IAS 39/IFRS 9. These amendments provide an additional option to account for these investments
using the equity method as described in IAS 28 Investments in Associates and Joint Ventures.
The entity currently accounts for investments in associates and joint ventures in the parent financial information at cost.
When these amendments are first adopted, the entity will decide whether to account for these investments in the parent
financial information using the equity method. This may result in an increase in investments and retained earnings on 1
July 2015 so that investments are recorded at the equity accounted amount under IAS 28.
(iv) AASB 2013-3 Amendments to AASB 136 Recoverable Amount Disclosures for Non-Financial Assets (issued June 2013)
(effective from 1 January 2014)
Clarifies the disclosure requirements for cash-generating units (CGUs) with significant amounts of goodwill and
intangibles with indefinite useful lives and also adds additional disclosures when recoverable amount is determined based
on fair value less costs to sell.
As this standard amends disclosure requirements only, there will be no impact on amounts recognised in the financial
statements. The recoverable amount for CGUs with significant amounts of goodwill and intangibles with indefinite lives will
only be required to be disclosed where an impairment loss has been recognised. However, there will be additional
disclosures about the level of the fair value hierarchy where recoverable amount for a CGU is determined based on fair
value less costs to sell.
(v) AASB 3 Business Combinations (issued June 2014) (effective from 1 July 2014)
The amendment clarifies that contingent consideration is assessed as either a liability or an equity instrument on the basis
of AASB 132 Financial Instruments: Presentation. The amendment also requires contingent consideration that is not
classified as equity to be remeasured to fair value at each reporting date, with changes in fair value being reported in profit
or loss.
There will be no impact on the financial statements when these amendments are first adopted because they apply
prospectively to business combinations for which the acquisition date is on or after 1 July 2014.
38 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
(vi) AASB 8 Operating Segments (issued June 2014) (effective from 1 July 2014)
When operating segments have been aggregated in determining reportable segments, additional disclosures are required
regarding judgments made by management in applying the aggregation criteria used to assess that the aggregated
segments have similar economic characteristics, including:
A description of the operating segments that have been aggregated
The economic indicators considered in determining that the aggregated operating segments share similar economic
characteristics.
There will be no impact on the financial statements when these amendments are first adopted because this is a disclosure
standard only. However, as the group currently aggregates operating segments in determining reportable segments,
additional disclosures regarding judgments made by management in applying the aggregation criteria will be required
when this amendment is adopted for the first time in the financial statements for the year ended 30 June 2015.
(vi) AASB 124 Related Party Disclosures (issued June 2014) (effective from 1 July 2014)
The amendment clarifies that an entity that provides key management personnel services (‘management entity’) to a
reporting entity (or to the parent of the reporting entity), is a related party of the reporting entity. The amendment also
requires separate disclosure of amounts recognised as an expense for key management personnel services provided by a
separate management entity (but not in the categories set out in AASB 124.17).
There will be no impact on the financial statements when these amendments are first adopted because this is a disclosure
standard only. As the group does not currently engage the services of a management entity, it is also unlikely that any
additional disclosures will be required when this amendment is adopted for the first time for the year ended 30 June 2015.
NOTE 2: FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks; market risk (including currency risk, fair value interest rate risk
and price risk), credit risk, liquidity risk and cash flow interest rate 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.
Risk management is carried out by management under policies approved by the Board of Directors. Management identifies,
evaluates and hedges financial risks in close co-operation with the Company’s operating units. The Board provides written
principles for overall risk management, as well as written policies covering specific areas, such as mitigating foreign exchange,
interest rate and credit risks, use of financial instruments and investing excess liquidity.
(a) Market risk
(i) Foreign exchange risk
The Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in a currency
other than the Australian Dollar. The currencies giving rise to this risk are predominantly Euros, the US Dollar, and the
Canadian Dollar.
Foreign currency risk arises where settlement of a trade receivable, payable or borrowings is denominated in a currency
that is not the entity’s functional currency, which may result in a foreign currency gain or loss. The group seeks to mitigate
this risk by engaging in a majority of commercial transactions that are generally in AUD. The group’s exposure to foreign
currency risk at the reporting date was as follows:
Trade receivables
Trade payables
Group sensitivity
30 June 2014
30 June 2013
CAD
78,231
172,247
EUR
USD
CAD
EUR
USD
50,101
152,070
-
-
-
-
67,780
76,506
-
-
Based on the financial instruments held at 30 June 2014, had the Australian dollar strengthened / weakened by 10%
(based on historical reasonableness movements) against the exchange rates in the above tables, with all other variables
held constant, the Group’s post-tax profit for the year would have been $12,790 lower / $15,632 higher (2013: $16,370 lower
/ $20,008 higher), mainly as a result of foreign currency exchange gains/losses on translation of foreign currency
denominated financial instruments as detailed in the table above.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 39
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 2: FINANCIAL RISK MANAGEMENT continued
(ii) Price risk
As the group does not have any investments in equities or commodities, its exposure to equities price risk and commodity
price risk is minimal.
While the group uses commodities in its operations, customer commitments to spot rates purchased result in the Group’s
exposure to commodities price risk being immaterial.
(iii) Cash flow, fair value and interest rate risk
As at 30 June 2014 the group had no variable interest rate debt, therefore consider fair value interest rate risk minimal.
Group sensitivity
At 30 June 2014, if interest rates had changed by -/+ 100 basis points (based upon forward treasury rates) from the year-
end rates with all other variables held constant, post-tax profit for the year would have been $12,851 higher / lower (2013:
$21,770 higher / lower), mainly as a result of higher/lower interest income from cash and cash equivalents. Cash and cash
equivalent balances at 30 June 2014 would have been higher/lower by the same amount.
(b) Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit risk arises from
cash and cash equivalents, trade receivables and other receivables. For banks and financial institutions, only independently rated
parties with a minimum rating of ‘A’ are accepted. The Group trades only with recognised, creditworthy third parties. In addition,
receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.
Counterparties without external credit ratings are in majority existing customers (<6months) with no history of defaults (Group 2).
With respect to credit risk arising from the other financial assets of the Group, which comprise of cash and cash
equivalents, and trade and other receivables, the Group’s exposure to credit risk arises from the default of the counter party, with
a maximum exposure equal to the carrying amount of these financial assets.
There are no significant concentrations of credit risk within the Group at the reporting date.
The following table represents the group’s exposure to credit risk:
Cash and cash equivalents (AA- rated)
Trade receivables, net of impairment provision (note 9) (Group 2)
Other receivables (external parties)
Consolidated
2014
$
2013
$
6,201,770
3,782,504
84,751
8,641,808
3,399,605
273,717
10,069,025
12,315,130
Credit risk exposure is not significantly different for any of the segments of the group.
Details of impaired trade receivables, and trade receivables overdue but not impaired can be found at note 9. An analysis of
the Group’s consolidated trade receivables is as follows:
Current
Over 30
Over 60
Over 90
Total
days
days
days
2014
2,433,113..
737,280
525,944
91,167..
3,787,504..
2013
1,940,873..
987,827
276,209
199,696..
3,404,605..
40 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 2: FINANCIAL RISK MANAGEMENT continued
(c) Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank
overdrafts, bank loans, debentures, finance leases and hire purchase contracts. The below analyses the group’s financial
liabilities into relevant maturity groupings based on the remaining period at the reporting date. The amounts disclosed in
the table are the contractual undiscounted cash flows. There have been no breaches or defaults on the repayment of debt.
Contractual maturities
of financial liabilities
Less than
6 months
6 – 12
months
Between 1
and 2
years
Between 2
and 5
years
Over 5
years
Total
contractual
cash flows
As at 30 June 2014
$
$
$
$
$
$
Carrying
Amount
(assets)/
liabilities
$
Non-derivatives
Trade and other payables
Total non-derivatives
966,438
966,438
As at 30 June 2013
Non-derivatives
Trade and other payables
Total non-derivatives
827,778
827,778
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
966,438
966,438
966,438
966,438
827,778
827,778
827,778
827,778
The group had access to the following undrawn borrowing facilities at the end of the reporting period:
Bank overdraft facility
Bank guarantee facility
Consolidated
2014
$
2013
$
1,000,000
1,501,545
2,501,545
1,000,000
595,180
1,595,180
(d) Fair value estimation
The fair value bases of financial assets and financial liabilities are outlined in note 1(n).
All financial assets and liabilities have carrying values that are reasonable approximates of their fair values, for the
Consolidated Entity.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 41
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 3: CRITICAL ACCOUNTING ESTIMATES AND SIGNIFICANT JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related results. 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.
(a) Estimated impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated
in note 1(p). Please refer to note 14 for the details on impairment tests performed on goodwill.
(b) Capitalisation of development expenditures
The Group capitalises development costs where management considers it probable that the related projects will be
commercially and technically feasible and successful, in accordance with the accounting policy stated in note 1(p)(iii).
(c) Tax
The determination of the group's provision for income tax as well as deferred tax assets and liabilities involves significant
judgements and estimates on certain matters and transactions, for which the ultimate outcome may be uncertain. If the
final outcome differs from the group's estimates, such differences will impact the current and deferred income tax assets
and liabilities in the period in which such determination is made.
NOTE 4: SEGMENT INFORMATION
Operating Segments – AASB 8 requires a management approach under which segment information is presented on the same
basis as that used for internal reporting purposes. This is consistent to the approach used in previous periods.
Operating segments are reported in a uniform manner to which is internally provided to the chief operating decision maker. The
chief operating decision maker has been identified as the Chief Executive Officer.
An operating segment is a component of the group that engages in business activities from which it may earn revenues and incur
expenses, including those that relate to transactions with any of the Group’s other components. Each operating segment’s
results are reviewed regularly by the Chief Executive Officer to make decisions about resources to be allocated to the segment
and assess its performance, and for which discrete financial information is available.
The Chief Executive Officer monitors segment performance based on profit before income tax expense. Segment results that are
reported to the Chief Executive Officer include results directly attributable to a segment as well as those allocated on a
reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and
equipment and intangible assets other than goodwill.
The consolidated entity has determined that strategic decision making is facilitated by evaluation of operations on the customer
segments of Capital Equipment, Precious Metals & Consumables. For each of the strategic operating segments, the Chief
Executive Officer reviews internal management reports on a monthly basis.
(a) Description of segments
The following summary describes the operations in each of the group’s reportable segments:
Capital Equipment
Design, manufacture and service organisation, specialising in automated fusion equipment, high temperature test and
production furnaces, as well as general laboratory equipment.
Precious Metals
Manufactures products for the laboratory and platinum alloy markets.
Consumables
Produces and distributes consumables, chemicals and other supplies for analytical laboratories.
42 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 4: SEGMENT INFORMATION continued
(b) Primary reporting format – business segments
Segment information provided to the Chief Executive Officer for the full-year ended 30 June 2014 is as follows:
Full-year ended 30 June 2014
$
$
$
Capital Equipment Precious Metals
Consumables
Total
$
Segment revenue
Total segment revenue
Inter segment sales
Revenue from external customers
5,553,570
(146,598)
5,406,972
10,445,135
(597,431)
9,847,704
6,402,883
-
6,402,883
22,401,588
(744,029)
21,657,559
Profit before income tax expense
354,106
1,340,612
2,357,681
4,052,399
Full-year ended 30 June 2013
Segment revenue
Total segment revenue
Inter segment sales
Revenue from external customers
8,354,173
(121,011)
8,233,162
8,501,702
(1,433,326)
7,068,376
7,222,557
-
7,222,557
24,078,432
(1,554,337)
22,524,095
Profit before income tax expense
1,143,404
1,429,991
2,825,831
5,399,226
Segment assets
At 30 June 2014
At 30 June 2013
Segment liabilities
At 30 June 2014
At 30 June 2013
Depreciation expense
For the year ended 30 June 2014
For the year ended 30 June 2013
5,500,293
5,148,160
10,082,109
7,199,216
16,540,705
14,897,539
32,123,107
27,244,915
483,189
354,685
50,007
43,547
2,590,257
462,844
210,540
175,551
Revenue from external customers – segments
Unallocated revenue
Revenue from external customers – total
Profit before income tax expense – segments
Eliminations and unallocated (corporate)
Profit before income tax expense from continuing operations
Total segment assets
Eliminations and unallocated (corporate)
Total assets
Total segment liabilities
Eliminations and unallocated (corporate)
Total liabilities
171,624
181,173
173,456
189,251
2014
$
21,657,559
192,503
21,850,062
4,052,399
(511,183)
3,541,216
32,123,107
(627,603)
31,495,504
3,245,070
(867,946)
2,377,124
3,245,070
998,702
434,003
408,349
2013
$
22,524,095
283,321
22,807,416
5,399,226
43,207
5,442,433
27,244,915
4,012,521
31,257,436
998,702
1,198,286
2,196,988
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 43
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 5: REVENUE
From continuing operations
Revenue from continuing operations
Sale of goods
Interest received
Other income
Profit on sale of non-current assets
Recoveries
Other revenue
NOTE 6: EXPENSES
Profit/(loss) before income tax includes the following specific expenses
Depreciation
Depreciation (included in administration expenses)
Depreciation (included in cost of goods sold)
Total depreciation
Amortisation
Patents and trademarks (included in administration expenses)
Research and development (included in administration expenses)
Total amortisation
Other specific expenses
Consolidated
2014
$
2013
$
21,666,472
22,496,417
183,590
310,999
21,850,062
22,807,416
-
41,507
151,552
193,059
150,922
106,296
136,236
393,454
Consolidated
2014
$
2013
$
152,811
313,114
465,925
10,806
78,103
88,909
120,968
310,359
431,327
10,707
169,058
179,765
Employee benefits expenses (included in administration expenses)
Rental expense relating to operating leases (included in occupancy expenses)
Acquisition of business costs (included in other expenses)
2,622,891
2,286,430
515,675
339,776
450,138
65,056
44 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 7: INCOME TAX EXPENSE
(a)
Income tax expense
Current tax
Deferred tax
Adjustments for current tax of prior periods
Income tax expense is attributed to:
Profit from continuing operations
Deferred income tax expense included in income tax expense comprises:
Decrease (increase) in deferred tax assets (note 15)
(Decrease) increase in deferred tax liabilities (note 18)
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit/(loss) from continuing operations before income tax expense
Tax at the Australian rate of 30% (2013: 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Acquisition of business costs
Share of (profit) / loss of investments accounted for using the equity method
Sundry items
Adjustments for deferred tax of prior periods
Adjustments for current tax of prior periods
Income tax expense
(c) Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period and not recognised in the net
profit or loss but directly debited to equity:
Net deferred tax – debited (credited) directly to equity
(d) Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Potential benefit @ 30%
All unused tax losses were incurred by Australian entities.
Consolidated
2014
$
2013
$
1,113,297
1,624,561
6,148
(19,487)
14,117
(9,017)
1,099,958
1,629,661
1,099,958
1,629,661
(83,264)
89,412
6,148
130,309
(116,192)
14,117
3,541,216
3,541,216
5,442,433
5,442,433
1,062,365
1,632,730
85,337
27,648
(55,905)
19,517
(13,700)
131
1,119,445
1,638,678
-
-
(19,487)
(9,017)
1,099,958
1,629,661
-
–
(1,495)
(1,495)
–
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 45
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 7: INCOME TAX EXPENSE continued
(e) Tax consolidation legislation
XRF Scientific Limited and its wholly-owned Australian controlled entities elected to enter into the tax consolidation regime from
1 July 2005. The accounting policy in relation to this legislation is set out in note 1(f).
The entities have entered into a tax funding agreement under which the wholly-owned entities fully compensate XRF Scientific
Limited for any current tax payable assumed and are compensated by XRF Scientific Limited for any current tax receivable and
deferred tax assets relating to unused tax losses or unused tax credits that are transferred to XRF Scientific Limited under the
tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned
entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head
entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of
interim funding amounts to assist with its obligations to pay tax installments. The funding amounts are recognised as current
intercompany receivables or payables.
NOTE 8: CURRENT ASSETS – CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Deposits at call
Reconciliation to cash at the end of the year
Balances as above
Balance per statements of cash flows
(a) Cash at bank and on hand
Consolidated
2014
$
2,563,657
3,638,113
6,201,770
2013
$
2,288,498
6,353,310
8,641,808
6,201,770
6,201,770
8,641,808
8,641,808
Cash at bank earns interest at floating rates based on daily bank deposit rates of between 0.01% to 3.00% pa (2013: 0.01% to
3.00%). Cash available for use is as reported above, with no restrictions applicable.
(b) Deposits at call
Short-term deposits are made for varying periods of between no set term and 4 months, depending on the immediate cash
requirements of the company, and earn interest at the respective short-term deposit rates. Deposits at call are subject to
interest rates between 3.17% to 3.65% pa (2013: 4.15% to 4.50% pa).
(c) Risk exposure
The Group’s exposure to interest rate risk is discussed in note 2. The maximum exposure to credit risk at the reporting date is
the carrying amount of each class of cash and cash equivalents mentioned above.
46 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 9: CURRENT ASSETS – TRADE AND OTHER RECEIVABLES
Trade receivables
Allowance for impairment of receivables
Other receivables from:
Other external parties
Total trade and other receivables
Past due but not impaired
Up to 3 months
Up to 6 months
Allowance for impairment of receivables
Balance at 1 July
(Increase)/Decrease in allowance during the year
Balance at 30 June
(a)
Impaired trade receivables
Consolidated
2014
$
2013
$
3,787,504
3,404,605
(5,000)
(5,000)
3,782,504
3,399,605
84,751
122,946
3,867,255
3,522,551
1,263,224
1,290,561
91,167
199,696
1,354,391
1,490,257
(5,000)
(5,000)
-
-
(5,000)
(5,000)
The consolidated entity has recognised no losses (2013: $3,180) in respect of impaired trade receivables during the year ended
30 June 2014. Prior year losses have been included as ‘other expenses’ in the statement of profit or loss and other
comprehensive income.
(b) Past due but not impaired
As at 30 June 2014, trade receivables of the Group of $1,354,391 (2013: $1,490,257) were past due but not impaired. These relate
to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade
receivables is in note 2. The other classes within trade and other receivables do not contain impaired assets and are not past
due. Based on the credit history of these classes, it is expected that these amounts will be received when due. The Group does
not hold any collateral in relation to these receivables.
(c) Other receivables
These amounts generally arise from transactions outside the usual operating activities of the Group. Other receivables are
subject to the same terms as trade receivables. Those terms have been described in Note 1(k).
(d) Effective interest rates and credit risk
Information concerning the effective interest rate and credit risk of both current and non-current receivables is set out in note 2.
(e) Non-current receivables
There are no non-current receivables in the current year (2013: Nil).
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 47
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 10: CURRENT ASSETS – INVENTORIES
Raw material and stores
‐
at cost
Work-in-progress
Finished goods
‐
at cost
Consolidated
2014
$
2013
$
2,461,600
2,018,501
-
72,671
516,127
641,086
2,977,727
2,732,258
Stock was valued at lower of cost and net realisable value on 30 June 2014 and 30 June 2013.
Inventory expense
Inventories recognised as expense during the year ended 30 June 2014 amounted to $ 8,997,518 (2013: $8,326,584). The cost of
writing down inventories to net realisable value during the year ended 30 June 2014 was $6,110 (2013: Nil).
NOTE 11: OTHER CURRENT ASSETS
Deposits paid
Accrued income
Prepayments (insurance policies, rates and other fees)
Consolidated
2014
$
18,982
15,985
175,959
210,926
2013
$
94,701
63,410
193,671
351,782
NOTE 12: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Set out below are the associates and joint ventures of the group as at 30 June 2014 which, in the opinion of the directors, are
material to the group. The entities listed below have share capital consisting solely of ordinary shares, which are held directly by
the group. The country of incorporation or registration is also their principal place of business, and the proportion of ownership
interest is the same as the proportion of voting rights held.
% of ownership
Quoted
Place of
interest
Nature of
Measurement
fair value
Carrying
amount
Name of entity
business
2014
Gestion Scancia Inc.
Canada
49.99
2013
19.99
relationship
Associate 1
method
Equity
2014
N/A 2
2013
2014
2013
N/A 2
529,414
208,967
Immaterial joint venture (c)
Total equity accounted investments
126,886
126,939
-
-
656,300
335,906
1 Scancia is a manufacturer of chemical x-ray fluxes, used for x-ray fluorescence analysis and is based in Quebec, Canada. Its products
complement the XRF’s existing range and the investment supports the Group’s international expansion strategy.
2 Private entity – no quoted price available.
(a) Commitments and contingent liabilities in respect of associates and joint ventures
As at 30 June 2014, there are no contingent liabilities or commitments to provide funding for the capital commitments of
associates and joint venture entities (2013: Nil).
48 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 12: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD continued
(b) Summarised financial information for associate
Gestion Scancia Inc. has a reporting date of 31 May. The different date does not have a material effect on the reportable
balances of the Group, so no adjustments have been made.
(i) Summarised balance sheet
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Reconciliation to carrying amounts:
Opening net assets 1 July
Total comprehensive income / (loss) for the period
Issue of shares
Closing net assets
Group’s share in % of closing net assets
Group’s share in $ of closing net assets
Goodwill
Carrying amount
(ii) Summarised statement of comprehensive income
Revenue
Total comprehensive income / (loss)
Gestion Scancia Inc.
2014
$
2013
$
201,384
345,445
(169,190)
(387,330)
(9,691)
143,108
(307,887)
155,088
(9,691)
49.99%
(4,845)
534,259
529,414
258,857
242,260
(57,039)
(300,970)
143,108
191,502
48,394
-
143,108
19.99%
28,607
180,360
208,967
861,367
(307,887)
517,903
48,394
(c)
Individually immaterial joint venture
In addition to the interest in the associate disclosed above, the group also has an interest in an individually immaterial joint
venture, XRock Automation Pty Ltd, which is accounted for using the equity method.
Aggregate carrying amount of individually immaterial joint venture
Aggregate amount of the Group’s share of:
Profit/(loss) from continuing operations
Post-tax profit or loss from discontinued operations
Other comprehensive income
Total comprehensive income
(d) Group’s share of profit / (loss) of investments accounted for using the equity method
Gestion Scancia Inc.
XRock Automation Pty Ltd
XRock Automation Pty Ltd
2014
$
2013
$
126,885
126,939
(54)
-
-
(54)
26,939
-
-
26,939
2014
$
(92,104)
(54)
(92,158)
2013
$
18,727
26,939
45,666
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 49
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 13: NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT
Consolidated
Equipment
Vehicles
Improvements
Equipment
Plant &
Motor
Property
Office
$
$
$
$
Total
$
At 30 June 2012
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2013
Opening net book amount
Transfers between asset classes
Additions
Disposals
Depreciation charge
Closing net book amount
At 30 June 2013
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2014
Opening net book amount
Transfers between asset classes
Additions
Disposals
Depreciation charge
Closing net book amount
At 30 June 2014
Cost or fair value
Accumulated depreciation
Net book amount
3,463,549
(911,627)
2,551,922
2,551,922
(200,129)
1,069,612
(12,287)
(310,359)
3,098,759
4,200,930
(1,102,171)
3,098,759
3,098,759
(5,456)
17,780
(25,005)
(314,131)
2,771,947
4,165,835
(1,393,888)
2,771,947
100,911
(37,300)
63,611
63,611
-
31,219
(15,672)
(10,529)
68,629
101,405
(32,776)
68,629
68,629
-
54,739
-
(16,255)
107,113
157,652
(50,539)
107,113
288,713
(131,863)
156,850
156,850
3,856
109,963
(1,978)
(58,019)
210,672
405,024
(194,352)
210,672
210,672
5,456
178,489
(405)
(63,268)
330,944
579,383
(248,439)
330,944
212,800
4,065,973
(146,554)
(1,227,344)
66,246
2,838,629
66,246
196,273
82,016
(4,623)
(52,420)
287,492
2,838,629
-
1,292,810
(34,560)
(431,327)
3,665,552
500,732
5,208,091
(213,240)
(1,542,539)
287,492
3,665,552
287,492
3,665,552
-
157,358
(280)
(72,271)
372,299
-
408,366
(25,690)
(465,925)
3,582,303
649,699
5,552,569
(277,400)
(1,970,266)
372,299
3,582,303
All items of property, plant and equipment were recorded at cost as at 30 June 2014 and 30 June 2013. The cost values of all
items are not considered to be materially different to their fair values.
50 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 14: NON-CURRENT ASSETS – INTANGIBLE ASSETS
Consolidated
At 30 June 2012
Cost or fair value
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2013
Opening net book amount
Additions
Disposals
Amortisation charge
Closing net book amount
At 30 June 2013
Cost or fair value
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2014
Opening net book amount
Additions
Disposals
Foreign currency adjustment
Amortisation charge
Closing net book amount
At 30 June 2014
Cost or fair value
Accumulated amortisation and impairment
Net book amount
Research &
Development
Goodwill
$
$
Patents
trademarks
& other
rights
$
Total
$
1,094,077
12,073,882
(656,880)
(768,445)
437,197
11,305,437
216,131
(68,501)
147,630
13,384,090
(1,493,826)
11,890,264
437,197
11,305,437
147,630
11,890,264
-
(202,727)
(169,058)
-
-
-
65,412
11,305,437
-
(10,707)
136,923
-
(202,727)
(179,765)
11,507,772
530,914
(465,502)
11,335,437
(30,000)
65,412
11,305,437
216,131
(79,208)
136,923
12,082,482
(574,710)
11,507,772
65,412
11,305,437
136,923
11,507,772
460,299
-
-
(78,103)
447,608
1,798,890
-
(111,130)
-
12,993,197
-
-
-
(10,806)
126,117
2,259,189
-
(111,130)
(88,909)
13,566,922
990,607
(542,999)
13,023,197
(30,000)
447,608
12,993,197
216,131
(90,014)
126,117
14,229,935
(663,013)
13,566,922
All intangible assets were recorded at cost as at 30 June 2014 and 30 June 2013. The cost values of all items are not considered
to be materially different to their fair values.
(a)
Impairment tests for goodwill
Goodwill is allocated to the consolidated entity’s cash generating units (CGU’s) identified according to business segment. A
segment-level summary of the goodwill allocation is presented below.
Capital Equipment CGU
Precious Metals CGU
Consumables CGU
Consolidated
2014
$
1,650,171
3,756,054
7,586,972
2013
$
1,650,171
2,068,294
7,586,972
12,993,197
11,305,437
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 51
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 14: NON-CURRENT ASSETS – INTANGIBLE ASSETS continued
(b) Key assumptions used for fair value less costs to sell calculations
The recoverable amount of a CGU is determined based on value-in-use calculations which require the use of assumptions. The
calculations use cash flow projections based on financial budgets approved by the Board covering a five-year period. Growth
rates of 3% to 5% used do not exceed the long-term average growth rates for the industry in which each CGU operates. Discount
rates of 13% to 16% used reflect specific risks relating to the relevant segments.
(c)
Impact of possible changes in key assumptions
Management believes that no reasonably possible change in any of the above key assumptions would cause the carrying values
to materially exceed recoverable amounts.
(d)
Impairment charge
No impairment charges have been deemed necessary for the current period.
NOTE 15: NON-CURRENT ASSETS – DEFERRED TAX ASSETS
Consolidated
2014
$
2013
$
36,174
55,788
212,224
188,849
36,502
90,430
21,600
35,371
396,127
432,301
349,037
83,264
-
432,301
189,845
242,456
432,301
37,412
45,988
21,000
-
293,249
349,037
477,851
(130,309)
1,495
349,037
30,000
319,037
349,037
The balance comprises temporary differences attributable to:
Amounts recognised directly in equity:
Share issue expenses
Amounts recognised in profit or loss:
Employee benefits
Depreciation of tangible assets
Accruals
Provisions
Other
Net deferred tax assets
Movements:
Opening balance at 1 July
(Charged)/credited to profit or loss (note 7)
(Charged)/credited to equity
Closing balance at 30 June
Deferred tax assets expected to be recovered within 12 months
Deferred tax assets expected to be recovered after more than12 months
52 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 16: CURRENT LIABILITIES – TRADE AND OTHER PAYABLES
Trade payables
Sundry creditors and accruals
Employee benefits – annual leave (a)
Consolidated
2014
$
380,213
586,225
324,992
2013
$
247,036
580,742
298,071
1,291,430
1,125,849
Terms and conditions of trade payables vary between suppliers, however terms of trade are generally 30 days.
(a) Amounts not expected to be settled within the next 12 months
The entire obligation is presented as current, since the Group does not have an unconditional right to defer settlement. However,
based on past experience, the Group does not expect all employees to take the full amount of accrued leave within the next 12
months. The following amounts reflect leave that is not expected to be taken within the next 12 months:
Annual leave obligations expected to be settled after 12 months
(b) Risk exposure
Information about the Group’s exposure to foreign exchange risk is provided in note 2.
NOTE 17: CURRENT LIABILITIES – PROVISIONS
Long service leave (a)
Dividends payable to ordinary shareholders
Making good of leases (b)
Movements in provision for Making good of leases:
Opening balance at 1 July
Charged to profit or loss
Reversed to fund building repairs on vacation of premises
Closing balance at 30 June
Consolidated
2014
$
2013
$
214,495
198,071
Consolidated
2014
$
2013
$
248,689
48,891
72,000
369,580
65,000
12,000
(5,000)
72,000
203,636
20,759
65,000
289,395
53,000
12,000
-
65,000
(a) Amounts not expected to be settled within the next 12 months
The current provision for long service leave includes all unconditional entitlements where employees have completed the
required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The
entire amount is presented as current, since the Group does not have an unconditional right to defer settlement. Based on past
experience, the Group does not expect all employees to take the full amount of accrued long service leave or require payment
within the next 12 months. The following amounts reflect leave that is not to be expected to be paid within the next 12 months:
Long service leave obligations expected to be settled after 12 months
Consolidated
2014
$
2013
$
186,517
153,636
(b) Making good of leases provision
XRF Scientific Limited is required to restore leased premises to their original condition at the end of the respective lease terms.
A provision has been recognised for the present value of the estimated expenditure required for general repairs to premises. All
amounts provided for have been expensed in full through the profit or loss as occupancy expenses.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 53
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 18: NON-CURRENT LIABILITIES – DEFERRED TAX LIABILITIES
The balance comprises temporary differences attributed to:
Amounts recognised in profit or loss
Research and development
Depreciation
Other
Net deferred tax liabilities
Movements:
Opening balance at 1 July
Charged/(credited) to profit or loss (note 7)
Closing balance 30 June
NOTE 19: NON-CURRENT LIABILITIES – PROVISIONS
Employee benefit – long service leave
Consolidated
2014
$
2013
$
134,282
24,050
13,646
171,978
19,624
29,354
33,588
82,566
171,978
82,566
82,566
89,412
171,978
198,758
(116,192)
82,566
Consolidated
2014
$
2013
$
133,733
127,787
54 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 20: ISSUED CAPITAL
Issued capital
Ordinary shares fully paid
Total issued capital
Consolidated
Consolidated
2014
Shares
2013
Shares
2014
$
2013
$
132,157,097
132,157,097
18,257,772
18,257,772
132,157,097
132,157,097
18,257,772
18,257,772
Effective 1 July 1998 the corporations legislation abolished the concept of authorised capital and par value of shares.
Accordingly these are not disclosed.
Movements in ordinary share capital:
Date
Details
1 July 2012
Opening balance
Exercise of options on 30 November 2012
Transaction costs (net of deferred tax)
Exercise of options on 7 December 2012
Transaction costs (net of deferred tax)
Closing balance
30 June 2013
1 July 2013
Opening balance
30 June 2014
Closing balance
(a) Ordinary shares
Number of
shares
128,823,764
2,000,000
1,333,333
132,157,097
132,157,097
132,157,097
Issue
Price
0.20
0.20
$
17,594,594
400,000
(1,943)
266,667
(1,546)
18,257,772
18,257,772
18,257,772
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the
number of and amount 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.
(b) Dividend reinvestment plan
The parent entity does not have a dividend reinvestment plan in place.
(c) Capital risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue
to provide returns to shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the
cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The gearing ratios at 30 June 2014and 30 June 2013 were as follows:
Total borrowings
Less: cash and cash equivalents
Net debt / (positive cash position)
Total equity
Total equity plus net debt
Gearing ratio
Consolidated
2014
$
2013
$
-
-
(6,201,770)
(8,641,808)
(6,201,770)
(8,641,808)
29,118,380
29,060 448
22,916,610
20,418,640
Net cash
(27.1%)
Net cash
(42.3%)
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 55
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 21: RESERVES AND RETAINED PROFITS
(a) Reserves
Foreign currency translation reserve
Share-based payments reserve
Balance 30 June
(b) Retained Profits
Movements in retained profits were as follows:
Balance 1 July
Net profit for the year
Dividends paid or provided for
Balance 30 June
(c) Nature and purpose of reserves
Foreign currency translation reserve
Consolidated
2014
$
2013
$
(136,997)
759,243
622,246
-
759,243
759,243
10,043,433
2,441,258
8,163,015
3,812,772
(2,246,329)
(1,932,354)
10,238,362
10,043,433
The foreign currency translation reserve is used to recognise the unrealised gains and losses arising from the consolidation of
subsidiaries denominated in currencies other than Australian dollars.
Share-based payment reserve
The share-based payments reserve is used to store the historic movements in the fair value of exercised options.
NOTE 22: DIVIDENDS
Final dividend for the year ended 30 June 2013 of 1.7 cent per share paid on 27 September 2013
Total dividends provided for or paid
Consolidated
2014
$
2013
$
2,246,329
2,246,329
1,932,354
1,932,354
A fully franked dividend of 1.1 cents per share has been declared on ordinary shares post 30 June 2014.
Franked Dividends
Consolidated
2014
$
2013
$
Franking credits available for subsequent financial years based on a tax rate of 30% (2013: 30%)
4,146,509
3,502,873
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
(a)
(b)
(c)
franking credits that will arise from the payment of the amount of the provision for income tax;
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
The consolidated amounts include franking credits that would be available to the parent entity if distributable profits of
subsidiaries were paid as dividends.
The franked portions of the final dividends recommended after 30 June 2014 will be franked out of existing franking credits or
out of franking credits arising from the payment of income tax in the year ended 30 June 2014. The impact on the franking
account of the dividend recommended by the directors since year end, but not recognised as a liability at year end, will be a
reduction in the franking account of $623,026 (2013: $962,859).
56 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 23: BUSINESS COMBINATIONS
(a) Summary of acquisition
On 2 August 2013 XRF Scientific Limited acquired the business of Kitco Labware, a supplier of platinum labware and precious
engineered products based in Montreal, Canada. The business was founded in 2002 and currently has sales into Canada, USA
and Latin America. It has a diverse customer base that operates in industries such as cement, soil analysis, mining and
petrochemicals.
Details of the purchase consideration and goodwill are as follows:
(i) Purchase consideration:
Cash paid upfront
The assets and liabilities recognised as a result of the acquisition are as follows:
Goodwill
2014
$
1,798,890
1,798,890
The goodwill is attributable to Kitco Labware’s strong position and profitability in trading in the platinum labware and precious
engineered products markets and synergies expected to arise after the company’s acquisition of the business. None of the
goodwill is expected to be deductible for tax purposes.
(ii) Revenue and profit contribution
The acquired business contributed revenues of $3.6m and net profit before tax of $300k to the group for the period of 2 August
2013 to 30 June 2014.
If the acquisition had occurred on 1 July 2013, consolidated revenue and consolidated net profit before tax for the period ended
30 June 2014 would have been $22.2m and $3.6m respectively. These amounts have been calculated using the group’s
accounting policies.
(iii) Contingent consideration
The agreement required XRF to pay the former owners of Kitco Labware additional consideration up to a maximum
undiscounted amount of CAD$600,000. The terms of the contingent consideration are as follows:
Additional cash paid via deferred consideration of CAD$300,000, should the business generate EBITDA of CAD$500,000 in
the period of 12 months from settlement
(cid:2)Further cash paid via deferred consideration of CAD300,000 should the business generate and EBITDA result of between
CAD$500,000 and CAD$650,000 in the period of 12 months from settlement.
The unaudited results indicate that these milestones have not been achieved, therefore a liability for additional consideration
has not been recorded (note 33).
(b) Purchase consideration – cash outflow
Outflow of cash to acquire business of Kitco Labware, net of cash acquired
Cash consideration
Total outflow of cash - investing activities
Direct costs relating to the acquisition
2014
$
2013
$
1,798,890
1,798,890
-
-
Recognised in profit or loss and in operating cash flows in the statement of cash flows
Total outflow of cash - operating activities
108,887
108,887
65,056
65,056
NOTE 24: CONTINGENCIES
At 30 June 2014, the consolidated entity had no material contingent liabilities in respect of claims, contingent considerations,
associates and joint ventures or any other matters.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 57
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 25: COMMITMENTS
(a) Lease commitments
Commitments in relation to leases contracted for at the reporting date but not recognised as liabilities, payable:
Consolidated
2014
$
2013
$
Within one year
Later than one year but not later than five years
Later than five years
Representing:
Cancellable operating leases
Non-cancellable operating leases (i)
(i) Non-cancellable operating leases
452,340
904,078
-
428,758
1,052,158
14,166
1,356,418
1,495,082
1,356,418
1,356,418
-
1,495,082
1,495,082
Consolidated
2014
$
2013
$
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
452,340
904,078
-
428,758
1,052,158
14,166
1,356,418
1,495,082
The specific terms of each operating lease vary and are on normal commercial terms.
(b) Financing arrangements
The group has an overdraft facility of $1,000,000 as a safeguard on working capital requirements. An additional $1,600,000
facility is utilised for bank guarantees. The group’s undrawn borrowing facilities were as follows as at 30 June 2014:
Bank overdraft facility
Bank guarantee facility
Consolidated
2014
$
1,000,000
1,501,545
2,501,545
2013
$
1,000,000
595,180
1,595,180
NOTE 26: REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided by the auditor of the Company, its related practices
and non-related audit firms:
Assurance & other services
BDO Audit (WA) Pty Ltd
Audit and review of financial reports
Taxation services
Other services
Total remuneration for audit and other services
58 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
Consolidated
2014
$
2013
$
106,105
34,119
3,535
143,759
98,081
59,070
1,836
158,987
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 27: RELATED PARTY TRANSACTIONS
(a) Parent entity
The ultimate parent and controlling entity is XRF Scientific Limited which at 30 June 2014 owns 100% of all subsidiaries listed in
note 28.
(b)
Interests in subsidiaries
Interests in subsidiaries are set out in note 28.
(c) Directors and key management compensation
Short-term employee benefits
Post-employment benefits
Long-term benefits
Consolidated
2014
$
625,275
45,720
4,499
675,494
2013
$
713,476
41,573
6,714
761,763
No other post-employment or termination benefits have been provided. Detailed remuneration disclosures are available in the
remuneration report from pages 9-14.
(d) Loans to key management personnel
There were no loans to any key management personnel during either of the years ended 30 June 2013 or 30 June 2014.
(e) Other transactions with key management personnel
Premises were rented from a related entity of Director David Brown during the financial year. These properties were rented on
normal commercial terms and conditions, totalling $104,657 (2013: $100,977). No amounts were outstanding at the end of the
year.
All directors of XRF Chemicals Pty Ltd are guarantors on a lease in Osborne Park. Vance Stazzonelli is currently the sole
director.
NOTE 28: 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(b):
Name of entity
KPL Scientific Inc.
Laser Analysis Technologies Pty Ltd 1
Precious Metals Engineering (WA) Pty Ltd
XFlux Pty Ltd
XRF Chemicals Pty Ltd
XRF Labware Pty Ltd
XRF Products Pty Ltd 1
XRF Technology (VIC) Pty Ltd
XRF Technology (WA) Pty Ltd
1 Deregistered during the period.
Country of
Incorporation
Canada
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Class of
shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Entity holding
2014
%
2013
%
100
-
100
100
100
100
-
100
100
-
100
100
100
100
100
100
100
100
The proportion of ownership interest is equal to the proportion of voting power held.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 59
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 29: RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH FLOW PROVIDED
BY OPERATING ACTIVITIES
Profit for the year
Depreciation and amortisation
Share of JV equity (profits) / losses
Net exchange differences
Net (gain) loss on sale of non-current assets
(Increase) decrease in trade and other debtors
(Increase) decrease in inventories
(Increase) decrease in other current asset
(Increase) decrease in deferred tax asset
(Decrease) increase in trade and other creditors
(Decrease) increase in provision for income taxes
(Decrease) increase in provision for deferred income tax
(Decrease) increase in other liabilities
(Decrease) increase in other provisions
Consolidated
2014
$
2013
$
2,441,258
3,812,772
554,834
92,158
(18,574)
23,737
(467,230)
(245,469)
140,855
(83,264)
165,581
(318,215)
89,412
157,227
80,185
611,092
(45,666)
-
(137,266)
1,477,674
65,743
(275)
128,814
(732,234)
(647,115)
(116,192)
(16,565)
(270,017)
Net cash inflow (outflow) from operating activities
2,612,495
4,130,765
NOTE 30: SHARE-BASED PAYMENTS
There were no share-based payments during the year ended 30 June 2014.
The tables below summarise movements in options during the year ended 30 June 2013:
Category
Grant date
Expiry date
Consolidated - 2013
Exercise
price
Balance at
Granted
Exercised
Forfeited
Balance at
start of the
during the
during the
during the
end of the
year
year
year
year
year
Vested and
exercisable
at end of the
year
$
Number
Number
Number
Number
Number
Number
Sigma
Chemicals
28 July 2010
30 December
0.20
2,000,000
-
2,000,000
2012
Sigma
23 November
30 December
0.20
1,333,333
-
1,333,333
Chemicals
2010
2012
Total
3,333,333
-
3,333,333
-
-
-
-
-
-
-
-
-
Weighted average exercise price
$0.20
-
$0.20
-
-
-
60 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 31: EARNINGS PER SHARE
(a) Basic earnings per share
Profit attributable to the ordinary equity holders of the company
(b) Diluted earnings per share
Profit attributable to the ordinary equity holders of the Company
(c) Reconciliations of earnings used in calculation earnings per share
Profit attributable to the ordinary equity holders of the company
Profit attributable to the ordinary equity holders of the company
Consolidated
2014
Cents
2013
Cents
1.8
1.8
2.9
2.9
$
$
2,441,258
2,441,258
3,812,772
3,812,772
Number
Number
(d) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator
132,157,097
130,734,266
in calculating basic earnings per share
Options on issue are not dilutive on the current or prior periods.
NOTE 32: PARENT ENTITY FINANCIAL INFORMATION
(a)
Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Statement of Financial Position
Current assets
Total assets
Current liabilities
Total liabilities
Shareholder’s equity
Issued capital
Reserves
Accumulated losses
Profit or (loss) for the year
2014
$
2013
$
7,615,584
3,060,106
21,190,802
16,224,609
8,810,797
1,292,098
9,910,056
1,308,702
18,257,772
18,257,770
630,074
759,243
(6,540,543)
(4,101,106)
12,347,303
14,915,907
(193,110)
21,113
Total comprehensive income / (loss) for the year
(193,110)
21,113
(b) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2014 or 30 June 2013.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 61
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 33: EVENTS OCCURRING AFTER THE REPORTING DATE
Acquisition
The Kitco Labware purchase agreement required XRF to pay the former owners additional consideration of up to CAD$600,000,
should the business meet certain profit milestones. The results indicate that these milestones have not been achieved, therefore
a liability for additional consideration has not been recorded (note 23).
Dividend
A final dividend of 1.1 cents per share fully franked was declared on 22 August 2014, for the 2014 financial year results, with a
record date of 12 September 2014 and payment date of 26 September 2014.
Other events
There were no other events subsequent to the reporting date which have significantly affected or may significantly affect the XRF
Scientific Limited operations, results or state of affairs in future years.
62 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 30 JUNE 2014
XRF Scientific Limited and its controlled entities
ACN 107 908 314
The directors of the company declare that:
1.
The financial statements, comprising the consolidated statement of profit or loss and other comprehensive
income, consolidated statement of financial position, consolidated statement of cash flow, consolidated
statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001
and:
(a)
(b)
Comply with Accounting Standards and the Corporations Regulations 2001 and other mandatory
professional reporting requirements after 2001; and
Give a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of
its performance for the year ended on that date.
2.
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.
3.
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer as
required by section 295A.
4.
The company has included in the notes to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf
of the directors by.
Kenneth Baxter
Chairman
Dated this 24th day of September 2014
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 63
For personal use only
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of XRF Scientific Limited
Report on the Financial Report
We have audited the accompanying financial report of XRF Scientific Limited, which comprises the
consolidated statement of financial position as at 30 June 2014, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International
Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the company’s
preparation of the financial report that gives a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 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 (WA) 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 (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
For personal use only Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of XRF Scientific Limited, would be in the same terms if given to the
directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a)
the financial report of XRF Scientific Limited is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2014. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of XRF Scientific Limited for the year ended 30 June 2014
complies with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Peter Toll
Director
Perth, 24 September 2014
For personal use only SHAREHOLDER INFORMATION
Additional information (as at 28 August 2014) required by the ASX Listing Rules and not disclosed elsewhere in
this Annual Report is set out below:
SUBSTANTIAL SHAREHOLDINGS
The number of shares held by substantial shareholders and their associates is as follows:
Shareholder
Private Portfolio Managers
Skye Alba Pty Ltd
National Australia Bank Limited
D & GD Brown Nominees Pty Ltd 1
Number of
Ordinary Shares
14,255,265
13,316,641
9,096,216
7,870,916
1 D & GD Brown Nom PL is a company owned by David Brown and his wife. David Brown is a director.
NUMBER OF OPTION HOLDERS
Class of Security
Nil
VOTING RIGHTS
Number of Holders
-
In accordance with the Constitution of the Company and the Corporations Act 2001(Cth), every member present in
person or by proxy at a general meeting of the members of the Company has:
• On a vote taken by a show of hands, one vote; and
• On a vote taken by a poll, one vote for every fully paid ordinary share held in the Company
A poll may be demanded at a general meeting of the members of the Company in the manner permitted by the
Corporations Act 2001 (Cth).
DISTRIBUTION OF SHARE AND OPTION HOLDERS
Distribution of Shares & Options
1-1,000
1,000-5,000
5,001-10,000
10,001-100,000
100,001 and above
Number of
Holders of
Ordinary Shares
Number of
Holders of
Options
43
118
144
434
144
883
–
–
–
–
–
–
66 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only
SHAREHOLDER INFORMATION
TOP 20 SHAREHOLDERS
No.
Holder name
Number of
Ordinary Shares
Percentage of
Ordinary Shares
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
NATIONAL NOM LTD
SKYE ALBA PL
BNP PARIBAS NOMS PL
D & GD BROWN NOM PL1
EVELIN INV PL
J P MORGAN NOM AUST LTD
TZELEPIS NOM PL
PARSONS JOHN GRAHAM
PROSSOR STEPHEN W + F C
GREAT WESTERN CAP PL
PARSONS JULIE ANN
ABN AMRO CLEARING SYDNEY
BETA GAMMA PL
J G H METZ PL
METZ JORG + CARR WENDY J
G & E PROPS PL
KLARIE PETER
HIGGINS PETER + GAIL
IMAJ PL
BROWN DAVID + GLENYS D
17,558,891
13,316,641
8,000,000
7,013,300
6,300,000
4,348,467
3,280,000
2,864,509
2,669,767
2,649,578
2,500,000
2,364,619
2,000,000
1,500,000
1,443,637
1,120,000
1,091,141
1,006,941
1,000,000
857,616
13.29%
10.08%
6.05%
5.31%
4.77%
3.29%
2.48%
2.17%
2.02%
2.00%
1.89%
1.79%
1.51%
1.14%
1.09%
0.85%
0.83%
0.76%
0.76%
0.65%
1 D & GD Brown Nom PL is a company owned by David Brown and his wife. David Brown is a director of XRF
Scientific Limited.
82,885,107
62.73%
RESTRICTED SECURITIES
There are currently no restricted securities.
NON-MARKETABLE PARCELS
Class of Security
Ordinary shares
Number of Securities
Number of Holders
20,979
52
UNQUOTED SECURITIES
The Company does not have any unquoted securities.
ON-MARKET BUY BACK
The Company does not have a current on-market buy-back scheme.
XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT 67
For personal use only
CORPORATE DIRECTORY
DIRECTORS
Kenneth Baxter (Chairman)
David Brown
David Kiggins
Fred Grimwade
COMPANY SECRETARIES
Vance Stazzonelli
Andrew Watson
KEY MANAGEMENT PERSONNEL
Vance Stazzonelli (Chief Executive Officer)
REGISTERED OFFICE
98 Guthrie Street
Osborne Park WA 6017
Tel: +61 8 9244 0600
Fax: +61 8 9244 9611
COMPANY AUDITOR
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
BANKERS
Westpac Banking Corporation
109 St George Terrace
Perth WA 6000
SOLICITORS
HWL Ebsworth
Level 11, Westralia Plaza
167 St Georges Terrace
Perth WA 6000
SHARE REGISTRY
Security Transfer Registrars
770 Canning Highway
Applecross WA 6153
Tel: +61 8 9315 2333
Fax: +61 8 9315 2233
WEBSITE
www.xrfscientific.com
ASX
Company Code: XRF
68 XRF SCIENTIFIC LIMITED | 2014 ANNUAL REPORT
For personal use only