Annual Report 2020
Financial Year Ended 30 June 2020
ABN 54 091 908 726
Annual Report 2020
Contents
Chairman’s Review
Financial Report
Directors' Report
Remuneration report (audited)
Auditor's independence declaration
Consolidated financial statements
Consolidated statement of profit or loss
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor's report
Shareholder Information
Corporate Information
Page
2
4
11
21
23
24
25
26
27
28
54
55
59
61
ABN : 54 091 908 726
8 Ethel Ave
Brookvale, NSW, 2100
P : (02) 8977 4900
www.datadotdna.com
DataDot Technology Limited Annual Report 2020Page 1 Chairman’s Review
Dear Shareholders
The Company’s 2020 Financial Report released to the market on 27 August 2020 details the very significant
improvement in the group’s performance during the FY 2020 year.
Pleasingly, this improvement has been achieved despite the uncertainty and very real impacts of the Covid
19 pandemic on the Australian and international markets in which we operate.
The key results for the first full year under your new Board can be summarised as:
• Growth in revenue for the first time in ten years
• Achievement of substantial operational efficiencies and cost savings
• A $2m turnaround in EBITDA
• A $2.3m turnaround in Profit after tax compared to prior year losses.
Revenue
EBITDA
Net Profit / (Loss) after tax
2018
4,867,167
(422,349)
(3,119,910)
2019
3,279,579
(1,757,295)
(2,301,317)
2020
3,774,569
309,385
29,203
This improvement in performance has continued since the close of FY 2020, with the first quarter of FY 2021
delivering an unaudited Profit after tax that is more than $400k above the same period last year.
As a consequence the company’s cash position has strengthened materially, growing from $1,005k at the
end of June 2020 to just over $1,350k at the end of September 2020. Our improved cash position is due to
the strong trading result for the quarter and together with the absence of debt means the Directors do not
anticipate any further capital raising will be required to bolster the cash balance.
While the group met the eligibility criteria and received the Australian Government’s JobKeeper assistance
in Q4 of FY 2020 and again in Q1 of FY 2021 our improved trading result will preclude us from accessing the
program in Q2 of FY 2021. We do not expect this to have a material impact on our results for the remainder
of FY 2021.
The Board’s immediate restructure and efficiency goals for the group have largely been achieved. These have
included the relocation of our Sydney operations to a much improved and cost effective office and factory,
the closure of the USA factory and office with US production now undertaken in Sydney, and responsibility
for U.K. operations transferred to the global Managing Director in Australia.
Notwithstanding these achievements, the Board remains committed to continuous efficiency improvements
and at the beginning of Q2 FY 2021 implemented a new accounting and information processing system based
on well-established applications that are providing seamless access and consolidation of the group’s financial
systems and digital markets.
DataDot Technology LimitedAnnual Report 2020Page 2
With the pleasing result for the 2020 FY flowing into a strong Q1 for 2021 FY where we have exceeded our
budget forecast for Revenue and Net Profit, our optimism in respect to this continuous improvement does
have to be tempered by the uncertainties that remain outside of our control. This applies particularly to the
potential implications for our forecast revenue growth from our global partners given the anticipated
persistence of the pandemic over the European and USA winters.
As we set out in the 27 August 2020 Directors’ Report, we are focusing our efforts for the balance of FY 2021
on growing the PropertyVAULT revenue streams via the new suite of products and services in line with the
turnaround plan presented to shareholders in 2019. At the same time we will be taking steps to secure and
grow revenues in Australia, Europe and USA through extending our customer base for our existing
identification product lines.
Your directors have made significant progress in the fifteen months since our appointment and we have a
clear vision of what is needed to take the company forward. While we continue to operate in uncertain
times and will need to be flexible to meet any unexpected challenges as they arise, we remain confident that
we have established a solid financial basis and have an effective strategy to build a sustainable and profitable
business.
Ray Carroll
Chairman
25 October 2020
DataDot Technology LimitedAnnual Report 2020Page 3
Directors' Report
Directors
for the year ended 30 June 2020
The Directors present their report, together with the financial statements of the consolidated entity comprising DataDot
Technology Limited and the entities it controlled (the “consolidated entity”) for the financial year ended 30 June 2020.
The following persons were directors of DataDot during the financial year and up to the date of this report, unless otherwise
stated:
-
Ray Carroll – appointed 13 May 2019
-
Brad Kellas – appointed 13 May 2019
- David Lloyd – appointed 13 May 2019
Principal activities
The principal activities of DataDot during the year were:
(a)
to manufacture and distribute asset identification and digital protection solutions that
include:
DataDotDNA® - polymer and metallic microdots containing data that is unique to the assets to which the
microdots are attached;
Asset Registers - databases that record asset identification data and are accessible by
law enforcement agencies and insurance investigators,
(b)
(c)
Vault asset protection devices
to manufacture and distribute high security DataTraceID® authentication solutions; and
To develop and distribute customised solutions combining DataDotDNA, DataTraceID, asset registration and/or other
technologies.
Apart from the introduction of Vault asset protection devices there has been no other significant change in the nature
of these activities during the year.
Dividends
The Directors recommend that no dividend be paid. No dividends have been declared or paid during the period.
Review of operations
The Directors are pleased to report on our first full year of operations since the shareholders voted to appoint the new Board in
May 2019.
In FY 2020 the Group delivered an EBITDA of $309,385 (2019: ($1,757,295) and a profit after tax of $29,203. This is a
significant turnaround to the losses of $2,301,317 in FY 2019 and $3,119,910 in FY 2018. It is particularly pleasing considering
the one-off costs associated with restructuring of the company during the year and the high level of business uncertainty caused
by the Covid 19 pandemic across the globe.
Importantly, the group is now positioned to take advantage of growth opportunities that have emerged in the past twelve months
and to continue to pursue additional profit improvement initiatives.
The company’s much improved profit result for FY 2020 and prospects for FY 2021 has been derived from a clear focus on three
main areas:
1.
2.
3.
Developing customer relationships, new products and service offerings,
Costs reduction programmes, and
Restructuring the capital base
Developing customer relationships, new products and service offerings
The company’s revenue has grown by just over 15% from $3,279,578 to $3,774,569
Some contraction of revenues in the Australasia and American markets have been offset by additional revenues from the
development of new offerings to United Kingdom and European based customers in the Insurance and motor vehicle industries.
Some revenue contraction was a direct result of the Covid 19 restrictions on some of our key customers. Those same restrictions
also played a role in limiting progress towards our growth goals although it is difficult to accurately quantify these impacts.
DataDot Technology Limited Annual Report 2020Page 4
Directors' Report (continued)
for the year ended 30 June 2020
The Board’s plan to grow revenues from new Vault products and services was also interrupted by the impacts of Covid-19, but
despite this initial delay, this revenue stream is set to make a far greater contribution in FY 2021.
Costs reduction programmes
FY 2020 has seen significant restructuring of the company’s operational and administrative processes to secure enduring
efficiencies in delivery of products and services to its global customers.
The most notable changes have been the centralisation of global customer relationship management to Sydney and the closure
of the United States production facility in Spokane. Production for the US market is now undertaken in the new Sydney facility
in Brookvale and is delivering very significant overhead savings compared to the operating costs associated with Spokane and the
former Frenchs Forest facility. Production for the European market has been maintained in Norwich U.K.
In reducing the number of factories, the group has been mindful of protecting its production capacity. The company has also
enhanced its services to customers by strengthening the management of global operations and leveraging the benefits of
improved integration of cross border capabilities and resources.
Headcount for support staff in the areas of administration, accounting, finance and governance has been significantly reduced
through centralising these services in Sydney. Other external services such as the group audit, and IT and database management
were taken to tender and/or renegotiated.
High cost short term and long-term incentive schemes that had been provided to former staff were suspended pending the
development of more targeted schemes to be introduced following the return to sustainable profitability.
Restructure of the capital base
Following the rejection by shareholders of the proposal to sell the company’s core manufacturing business to South Af rican
interests at the 13 May 2019 EGM, the group held cash reserves of $194,752 as at 30 June 2019. This was after the Board had
issued Convertible Notes of $550,000 prior to the end of June to bolster cash reserves. A further $600,000 in Convertible Notes
was deemed necessary and was issued in early July 2019.
In early 2020 in response to the Covid 19 pandemic and its effect on Australian businesses, the corporations and securities
markets regulators made a number of concessions in relation to capital raising restrictions and approval processes.
In the light of these on-going business uncertainties and regulatory concessions, the Board decided to remove potential liquidity
risks by seeking to raise new equity. The equity was allocated to repay all of the company debt, principally the Convertible
Notes, and to provide additional working capital sufficient to see the group through any negative impacts of the Covid 19
pandemic that would be outside the control of the company. It was recognised at the time, and remains true at the date of this
report, that the time frame for return to normal trading conditions is uncertain.
The Board therefore decided to undertake a placement and a rights issue.
The placement was to professional and sophisticated investors and raised $785,453.
The Rights Issue was to the all shareholders resident in Australia and New Zealand and raised $1,044,111.
Costs of conducting the Rights Issue were kept to a minimum and amounted to $24,644.
The total funds raised (net of costs) was $1,804,920.
As noted above, the full balance of $1,150,000 of the Convertible Notes was redeemed together with interest payable up to the
date of redemption.
DataDot Technology Limited Annual Report 2020Page 5 Directors' Report (continued)
for the year ended 30 June 2020
The capital raising and the profit earned for the year has significantly strengthened the net assets of the group from $106,208 at 30
June 2019 to $1,911,863 at 30 June 2020. The cash and cash equivalents available to the group improved from $194,752 at 30
June 2019 to $1,005,325
This has provided a solid foundation for the group to advance.
Outlook
The Board is pleased with the level of financial stability that the group has attained after only 15 months since taking control in
May 2019. Significant sustainable improvements have been achieved in many areas of operation and we have positioned the
company to be able to take advantage of opportunities for further growth and profitability, particularly post the Covid 19
pandemic. The Board will direct its focus in the 20/21 FY to revenue growth in all product lines with particular emphasis on
growing the PropertyVAULT suite of products and services in line with the turnaround plan originally presented to shareholders.
The Board takes this opportunity to thank its small team of dedicated staff that have made a major contribution to this
turnaround.
Significant changes in the state of affairs
Other than as set out in the Review of Operations there have been no significant changes in the state of affairs of the group.
Matters subsequent to the end of the financial year
The Covid 19 pandemic has continued to provide an uncertain business environment since the end of the financial year on 30 June
2020.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulations under Australian Commonwealth or State Law.
DataDot Technology Limited Annual Report 2020Page 6 Directors' Report (continued)
Mr Raymond Carroll
Chairman – appointed 13 May 2019
for the year ended 30 June 2020
Ray was the driving force behind the establishment and success of Australia’s National Motor Vehicle Theft Reduction Council
(NMVTRC) and served as its Executive Director for over 19 years. He is an internationally recognised authority on developing and
implementing strategic solutions to crime issues and holds a Bachelor’s Degree in Criminal Justice Administration.
In his former role, Ray devised the world’s first comprehensive criteria and performance specification for whole of vehicle marking.
His endorsement and advocacy for DataDot’s micro-dot identification system nationally and internationally was the catalyst for the
acceptance and growth of micro-dot identification in multiple markets across the world.
Ray’s appointment brings to the Company an unsurpassed level of experience in fostering collaboration across multiple industry
sectors, government agencies and the community sector to achieve desired outcomes. Ray secured and managed over $40 million
dollars in direct funding to the NMVTRC and generated over $600 million expenditure by government agencies and motor related
industries to implement NMVTRC facilitated reforms. During his tenure, vehicle crime in Australia reduced by over 70% delivering
on-going insurance and community savings of more than $400 million per year in vehicle crime related costs.
Mr Bradley Charles Kellas
Managing Director – appointed 13 May 2019
Brad is the founder of Property Vault International Pty Ltd and a decorated former Detective from the Victoria Police with 21 years’
experience. For most part of his policing career he specialised in organised crime, corporate fraud, kidnapping, blackmail, extortion,
product contamination and large-scale stolen property investigations.
Post his policing career, he used his entrepreneurial, investigative and analytical skills to develop a unique trading strategy
capitalising on global market fluctuations and worked full time as a successful proprietary trader for a large investment firm for 5
years.
In 2015, Brad saw the opportunity that social media and a custom-built platform combined with a specialist service could have on
countering bike theft and property crime in general. In late 2015, he put his trading career on hold and commenced a fulltime
commitment to developing the BikeVAULT website (prelude to PropertyVAULT) coupled to a specialist victim and police service
solution. BikeVAULT is now the number one platform and service to counter bike theft in Australia, with recoveries exceeding $1.5
million.
Understanding the integral relationship of both physical and digital identification to combat crime, Brad saw the value proposition
of an alignment with DataDot, which subsequently resulted in him becoming the largest shareholder with a 17.05% holding and
instigating an EGM in May 2019, which resulted in the change of management and direction of DataDot.
Mr David Lloyd B.Sc. (ANU), Grad Dip Business (UQ), MBA with Distinction (INSEAD)
Non-Executive Director – appointed 13 May 2019
David is an experienced senior executive specialising in strategy, new technologies, business development, ventures and
partnerships, whose skills will be essential for successfully turning around the DataDot business by leveraging an alliance with
PropertyVAULT.
As a senior executive at Qantas and previously Virgin Blue and Virgin Australia, David has been the architect of several high-profile
alliances with other airlines as a well as a joint venture with the Government of Samoa, demonstrating his ability to build valuable
commercial relationships. While at Virgin Blue he also designed the Velocity Frequent Flyer program, valued at approximately $1
billion in its partial sale to a private equity partner and which continues to be the most profitable unit of Virgin Australia.
Subsequently at Virgin he developed the business cases for fleet orders worth over USD2 billion and the establishment of a new
international business.
DataDot Technology Limited Annual Report 2020Page 7 Directors' Report (continued)
for the year ended 30 June 2020
More recently while at Qantas, David has mentored businesses in its tech accelerator program, overseen commercial relationships
with start-up and scale-up businesses including those in which Qantas has taken equity stakes and warrants, and is working on
externally commercialising the company’s own innovations.
Previously David has worked internationally as a consultant with the Boston Consulting Group and Arthur Andersen Business
Consulting and was a project manager for the Sydney Organising Committee for the Olympic Games. He is an internationally
competitive cyclist and member of numerous cycling organisations, bringing a customer viewpoint to the value of both DataDot
and PropertyVAULT. David is Chair of the Audit and Risk Committee.
Company Secretary
Mr Raper has over 45 years of experience in accounting, finance and governance roles.
He joined DataDot in March 2014 as Group CFO and was appointed as Company Secretary on 22 December 2014. From June
2016 to September 2019 he was the Company Secretary working two days per week and since September 2019 has filled the
role of CFO and Company Secretary on a part time basis while he also acts as Company Secretary for Star Combo Pharma
Limited (ASX: S66).
Prior to joining DataDot, he was CFO and Company Secretary for Ecosave Holdings Limited (ASX: ECV) and CFO and Company
Secretary of CMA Corporation Limited (ASX: CMV) and has held a number of roles within the Investment portfolio companies of
Hawkesbridge Private Equity including Company Secretary, CFO, Joint Managing Director and Chairman of Trippas White Catering
and Director of Corporate Services with Integrated Premises Services Pty Limited. Mr Raper was formerly CFO and Company
Secretary over a period of twelve years between 1993 and 2005, for a number of Touraust Corporation managed entities including
Reef Casino Trust (ASX: RCT) and Australian Tourism Group (ASX: ATU).
DataDot Technology Limited Annual Report 2020Page 8 Directors' Report (continued)
for the year ended 30 June 2020
Directors' interests
The relevant interest of each director in the shares and options over shares issued by DataDot, as notified by the directors to the
Australian Stock Exchange in accordance with the Corporations Act 2001, at the date of this report is as follows:
Director
Ray Carroll
Bradley Kellas
Interest in
Ordinary Shares
-
214,995,076
Interest in
Ordinary Shares
subject to Share Loan
Scheme
-
-
David Lloyd
14,912,116
-
Interest in
Interest in
Options
Convertible Notes
-
-
-
-
-
-
Meetings of Directors
The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during the year ended
30 June 2020 and the number of meetings attended by each of the directors were:
Director
Note No. eligible to
Board Meetings
attend
No. attended
Remuneration and Nomination
Committee Meetings
No. eligible to
attend
No. attended
Audit and Risk Management
Committee Meetings
No.
attended
No. eligible to
attend
Raymond Carroll
Brad Kellas
David Lloyd
10
10
10
10
10
10
1
-
1
1
-
1
3
3
3
3
3
3
Share rights and options
Share Rights
Unissued ordinary shares of DataDot Technology Limited under the share rights plan at the date of this report are as follows:
Grant date
26 March 2014
Date of expiry
26 March 2021
Number
unvested
2,000,000
Share Options
Unissued ordinary shares of DataDot Technology Limited under the share options plan at the date of this report are as follows:
Issue Date
Date of Expiry
Nil
Nil
Number of
Share Options
Nil
For details of share options and share rights issued to directors and executives as remuneration, refer to the remuneration report.
DataDot Technology Limited Annual Report 2020Page 9 Directors' Report (continued)
for the year ended 30 June 2020
Indemnity and insurance of officers and auditors
No indemnities have been given to any person who is or has been an officer or auditor of the consolidated entity.
During the year DataDot paid insurance premiums in respect of directors’ and officers’ liability insurance contracts. The directors
have not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the directors’ and
officers’ liability insurance contracts, as such disclosure is prohibited under the terms of the contract.
Proceedings on behalf of the Company
No person has applied to the court under section 237 of the Corporations Act 2001, for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of
the Company, for all or part of those proceedings.
Non audit services
Details of the amounts paid or payable to the auditor for non-assurance services provided by the auditor during the financial year by
the auditors are outlined in note 6 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year by the auditor, (or by another person or
firm on the auditors’ behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act
2001.
The Directors are of the opinion that the services disclosed in note 6 to the financial statements do not compromise the external
auditor's independence requirements of the Corporations Act 2001 for the following reasons:
(a)
all non-audit services have been reviewed and approved to ensure that they do not impact on the integrity and objectivity of
the auditor; and
none of the services undermine the general principles relating to auditor independence set out in APES110 Code of Ethics for
Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing
the Auditor's own work, acting in a management or decision making capacity for the Company, acting as an advocate for the
Company, or jointly sharing economic risks and rewards.
(b)
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 for the year ended 30
June 2020 is set out on page 21 of the financial report.
Auditor
Andrew Hunt of Audit Only was appointed auditor at the AGM of the company held on 21 November 2019 and continues in office in
accordance with section 327 of the Corporations Act 2001.
DataDot Technology Limited Annual Report 2020Page 10
Directors' Report (continued)
for the year ended 30 June 2020
The following Remuneration Report forms part of the Directors’ Report
Remuneration Report (audited)
The remuneration report, which has been audited, outlines the key management personnel remuneration arrangements for the
consolidated entity in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel
The following key management personnel (hereafter referred to as "KMP") of the consolidated entity throughout the year
consisted of the following directors of DataDot Technology Limited or its subsidiaries:
Directors
Raymond Carroll
Brad Kellas
David Lloyd
Executives
Patrick Raper
Chairman
Managing Director
Non-Executive Director
Appointed 13 May 2019
Appointed 13 May 2019
Appointed 13 May 2019
CFO
Appointed CFO 1 September 2019
Shares and Options Held
The number of shares and share options held by each KMP (or their related party) during the financial year, or at the date that
they ceased their role as KMP is as follows:
Shares
Note
Directors
Raymond Carroll
Brad Kellas
David Lloyd
Executives
David Williams
Steve Delepine
Patrick Raper
Total Shares
1
2
3
4
Balance
as at
30/6/2019
-
85,635,066
-
12,094,809
12,094,809
800,000
110,624,684
Vesting of
Share Rights or
Share Issues as
part of
remuneration
Other
Additions
Disposals
-
-
-
-
-
-
-
129,360,010
14,912,116
-
-
266,667
144,538,793
-
-
-
-
-
-
Balance
as at
30/6/2020
Note 4
-
214,995,076
14,912,116
12,094,809
12,094,809
1,066,667
255,163,477
Note 1. Mr Kellas acquired all his additional shares during the year in the Rights Issue of the company conducted during the FY2020
year.
Note 2. Mr Lloyd acquired all his shares on market during the FY2020 year.
Note 3. Holding at the date Mr Williams ceased to be an employee (26 August 2019). Mr Williams is required to pay $326,560
($0.027 per share) before 26 August 2020 or the shares will be forfeited and cancelled subject to shareholder approval at
the 2020 AGM.
Note 4. Holding at the date Mr Delepine ceased to be an employee (16 May 2019). Mr Delepine was required to pay $326,560
($0.027 per share) before 17 May 2020. As he did not repay the loan, the shares were forfeited except to the extent that
5,349,733 shares were applied to pay the unpaid portion of the 2017 bonus gifted to Mr Delepine. 6,745,076 shares will
be forfeited and cancelled subject to shareholder approval at the 2020 AGM.
DataDot Technology Limited Annual Report 2020Page 11 Remuneration Report (audited) (continued)
for the year ended 30 June 2020
Share Options
Directors
Ray Carroll
Brad Kellas
David Lloyd
Executives
Andrew Winfield
Other Executives
Total Share Options
Balance
as at
30/6/2019
Note
-
-
-
Issue of
Options as part
of
remuneration
-
-
-
1
1
6,000,000
3,000,000
9,000,000
-
-
-
Other
Additions
Disposals or
Cancellations
Balance
as at
30/6/2020
-
-
-
-
-
-
-
-
-
6,000,000
3,000,000
9,000,000
-
-
-
-
-
-
Note 2. The Executive options were granted on 11 October 2017 and expired 1 July 2019. The exercise price was 2.7 cents with
the fair value per option being 1 cent.
Remuneration policy
Key Management Personnel (KMP) have authority and responsibility for planning, directing and controlling the activities of
DataDot. KMP include the directors of the parent entity, one of whom (Mr Kellas) is the Managing Director / CEO.
Remuneration levels of KMP are determined by the Remuneration and Nomination Committee. The Committee’s charter is to
review and make recommendations to the Board in relation to:
-
-
-
-
-
-
-
-
-
-
-
Executive remuneration and incentive policy,
The remuneration of the CEO, executive directors and all direct reports of the CEO,
Executive incentive plans,
The remuneration of non-executive directors,
Retention, performance assessment and termination policies and procedures for non-executive directors, the CEO,
executive directors and all direct reports of the CEO,
Establishment and oversight of employee and executive share plans and share option plans and share loan plans,
Superannuation arrangements,
The disclosure of remuneration in DDT’s publications, including ASX filings and the Annual Report,
Board composition, having regard to necessary and desirable competencies,
Board succession plans, and
Evaluation of Board performance.
The Committee did not obtain a remuneration recommendation or other advice from a remuneration consultant in 2020.
DataDot Technology Limited Annual Report 2020Page 12 Remuneration Report (audited) (continued)
Remuneration policy (consolidated)
for the year ended 30 June 2020
Board policy for determining the composition and value of remuneration for KMP comprises the following elements:
-
-
-
-
-
-
-
-
-
Remuneration to contribute to the broader outcome of creating shareholder value,
Remuneration to be commensurate with individual duties and responsibilities,
Remuneration to be market competitive in order to attract, retain and motivate people of the highest quality,
Remuneration to be aligned with DataDot’s business strategies and financial targets,
Executives’ remuneration to comprise fixed and variable components,
Variable components to be tied to the attainment of both short-term and long-term performance targets of individuals and
DataDot,
Variable components of executive remuneration to be between 30% and 50% of the value of total remuneration,
Variable component payment to be subject to DataDot’s financial capacity, and
This policy to apply uniformly across DataDot.
In relation to non-executive directors, the Constitution of DataDot and ASX Listing Rules specify that aggregate remuneration shall
be determined from time to time by a general meeting. The latest determination was at the 2004 AGM when shareholders approved
a ceiling on aggregate remuneration of $300,000 per annum. The actual amount payable is currently $60,000pa plus SGL at 9.5%
for Mr Carroll, the Chairman of the Board, and $25,000 plus SGL at 9.5% for Mr Lloyd. Non-Executive Directors do not receive
performance related remuneration and directors’ fees cover both main board and committee activities. Directors of Group
subsidiary companies do not receive directors’ fees.
The Managing Director is currently paid $220,000 pa.
The Company has cancelled all STI and LTI programs in operation at 13 May 2019 and will look to implement a new and more
effective program once the company returns to profitability.
Relationship between remuneration and consolidated entity performance
The effect of remuneration policy on DataDot’s financial performance and on shareholder value is central to the Board’s and
Remuneration and Nomination Committee’s decisions. For this reason a primary objective of remuneration policy is to tie the
remuneration of KMP to financial performance, so ensuring that a significant proportion of the total remuneration of KMP is at risk,
short term incentive payments (STI) being tied to net profit targets, and long-term incentive payments (LTI) being tied to growth in
shareholder value. In this respect, the key factors for consideration are continuing product development and improvement, business
and revenue growth, developing and maintaining the appropriate corporate culture, strategic adjustments in consultation with the
Board and maintenance of an efficient cost base.
The Company’s performance and shareholder wealth for each of the last five years were
Revenue
EBITDA
Net Profit / (Loss) after tax
Basic earnings per share (in cents)
Share price at year end (in cents)
2016
6,631,371
(1,464,259))
(3,264,627)
(0.12)
1.90
2017
5,343,983
(835,729
(1,379,453)
(0.43)
2.00
2018
4,867,167
(422,349)
(3,119,910)
(0.40)
0.50
2019
3,279,579
(1,757,295)
(2,301,317)
(0.30)
0.70
2020
3,774,569
309,385
29,203
0.003
0.40
Performance based remuneration
At the date of this report, the remuneration of KMP who are non executive directors includes only a fixed remuneration component.
The LTI component for non-executive directors is being reviewed for approval at the 2020 Annual General Meeting and when
determined may include performance shares, share options or share rights. No performance shares or share rights or share options
are currently on issue to non-executive directors. The grant of director performance shares, or share rights or options is consistent
with the Company’s long-term incentive remuneration policy, providing Directors with the opportunity to participate in the future
growth of the Company through share ownership.
In 2020, no STI’s or LTI’s have been paid to directors.
In 2020, no STI’s or LTI’s have been paid to other executive staff.
DataDot Technology Limited Annual Report 2020Page 13 Remuneration Report (audited) (continued)
for the year ended 30 June 2020
Performance based remuneration (continued)
The LTI component has in past years consisted of share rights and share options granted under the terms of the DataDot Technology
Executives Share Rights Plan, for which shareholder approval was renewed at the 2013 AGM. In FY2018, an Employee Share and Loan
Scheme was adopted to supplement the existing options scheme however those KMPs participating in the Employee Share and Loan
Scheme did not continue to participate in the options scheme. The characteristics of securities issued under the Share and Loan
Scheme and remaining outstanding are:
-
Share and Loan Scheme
Certain KMPs are offered the opportunity to subscribe for shares in the Company, with the payment for that subscription being
lent to the KMP on a limited recourse basis. KMPs become fully entitled to the shares in three equal tranches.
- No amounts are paid or payable by the recipient on issue of the shares.
-
-
Shares issued under this plan may be voted in any meeting of the Company and will be entitled to all dividends paid.
Shares issued under this plan may only be dealt with by the recipient when the recipient becomes unconditionally entitled to
the shares, and when the loans relating to those shares are fully repaid.
-
- Where any loan amount remains unpaid one year after the date of the last unconditional Entitlement date of the offer shares,
the proportionate number of shares in respect of that loan amount will be forfeited for the total nominal consideration of $1.
At any time if there is a change of control of the company, recipients will become unconditionally entitled to any offer shares
to which they are not yet unconditionally entitled at the time of change of control of the Company.
It is anticipated that all shares issued under the Share and Loan Scheme will be forfeited and cancelled after they 2020 AGM
to be held in November 2020.
-
Number of ordinary shares issued under the Share Issue and Loan Scheme and provided as remuneration:
For the year ended 30 June 2020
Note
Balance
as at
30/06/2019
Granted as
Remuneration
Expiring or
Lapsing
Shares
Balance
as at
30/06/2020
CEO / Managing Director
CFO
Vice President Business Development
2
3
3
16,126,414
12,094,809
12,094,809
-
-
-
16,126,414
-
-
-
12,094,809
12,094,809
This Scheme has been cancelled following the votes of shareholders at the EGM held on 13 May 2019 on certain
resolutions relevant to the scheme.
For the year ended 30 June 2019
CEO / Managing Director
CFO
Vice President Business Development
Note
Balance
as at
30/06/2018
16,126,414
12,094,809
12,094,809
Granted as
Remuneration
Note 1
-
-
-
Expiring or
Lapsing
Shares
-
-
-
Balance
as at
30/06/2019
16,126,414
12,094,809
12,094,809
Note 1: 40,316,032 Shares were issued to KMP in August 2017. These shares were valued at $0.001 for shares issued to the
CEO / Managing Director and $0.002 for shares issued to other KMP. This is a total amount of $64,506 based on a Black
Scholes valuation methodology, using a Rfr of 2.565%, the DDT share price of $0.005 and the share issue and loan price of
$0.027. At the point of issue of these shares, the share options previously issued to the CEO / Managing Director and to other
KMP’s were cancelled. The original value of these options was determined at the time of issue as $175,517. The Directors
at the time believed that the amendment of the LTI scheme would more closely align the interests of these KMP to increases in
shareholder value.
Note 2: On cessation of his employment in June 2019, Mr Hield relinquished all rights to 16,126,414 shares issued to him under
the scheme. The shares have subsequently been cancelled.
Note 3: On cessation of their employment, the shares issued to Mr Williams and Mr Delepine were fully vested and Mr Williams
and Mr Delepine are required to pay $327,560 each in repayment of the Loan for the shares subscription price. If this loan value
is not fully repaid within 12 months of them fully vesting, the shares will be forfeited and subject to cancellation after
shareholder approval at the 2020 AGM.
DataDot Technology Limited Annual Report 2020Page 14
Remuneration Report (audited) (continued)
for the year ended 30 June 2020
-
Share Rights
Each share right converts into one fully paid ordinary share in the Company on completion of the vesting conditions, or at
discretion of the Board;
- No amounts are paid or payable by the recipient on receipt or exercise of a share right;
-
Subject to the recipient’s continuous employment, share rights vest in three equal tranches at varying intervals after the
date of issue;
A trading restriction applies for a further 12 months after vesting; and
Share rights expire 7 years after issue.
-
-
Number of share rights provided as remuneration:-
For the year ended 30 June 2020
Directors
Executives
Patrick Raper
Balance
as at
30/06/2019
-
2,000,000
2,000,000
Granted as
Remuneration
Vesting of
Share
Rights
Expiring or
Lapsing
Share
Rights
-
-
-
-
-
-
-
-
-
Shares and share rights issued and cancelled subsequent to the end of the year: Nil
For the year ended 30 June 2019
Directors
Executives
Patrick Raper
Balance
as at
30/06/2018
-
2,000,000
2,000,000
Granted as
Remuneration
Vesting of
Share
Rights
-
-
-
-
-
-
Expiring or
Lapsing
Share
Rights
-
-
Shares and share rights issued and cancelled subsequent to the end of the year: Nil
Balance
as at
30/06/2020
-
2,000,000
2,000,000
Balance
as at
30/06/2019
-
2,000,000
2,000,000
DataDot Technology Limited Annual Report 2020Page 15 Remuneration Report (audited) (continued)
for the year ended 30 June 2020
Share Options
Each share option converts into one fully paid ordinary share in the Company on exercising of the option.
-
- Directors’ options have a strike price of $0.05 payable by the Director on exercise of the option.
- Non-Director KMPs options have a strike price of $0.027 payable by the KMP on exercise of the option.
-
-
All options have an expiry date which is approximately 3 years after the issue date.
A trading restriction applies for 12 months after exercise.
For the year ended 30 June 2020
Directors
Ray Carroll
David Lloyd
Brad Kellas
Key Management Personnel
Andrew Winfield – Note 1
Other Executives – Note 1
Balance
as at
30/06/2019
Granted as
Remuneration
Exercise of
Share
Options
Expiring or
Lapsing
Share
Options
Balance
as at
30/06/2020
-
-
-
6,000,000
3,000,000
9,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,000,000)
(3,000,000)
(9,000,000)
-
-
-
-
-
-
Note 1 – These options expired on 1 July 2019.
Number of share options provided as remuneration:
For the year ended 30 June 2019
Directors
Ray Carroll
David Lloyd
Brad Kellas
Stephe Wilks – Note 2
Key Management Personnel
Andrew Winfield
Other Executives – Note 2
Balance
as at
30/06/2018
Granted as
Remuneration
Exercise of
Share
Options
-
-
-
1,000,000
6,000,000
6,000,000
13,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Expiring or
Lapsing
Share
Options
Balance
as at
30/06/2019
-
-
-
(1,000,000)
-
-
-
-
-
6,000,000
(3,000,000)
3,000,000
(4,000,000)
9,000,000
Note 2 – These options expired.
Note 3 – 3,000,000 of these options were cancelled on 21 June 2019 and not replaced when the executive left the employ of
the company.
Summary of Director, KMP and Other Executives Equity Remuneration instruments on issue at the date of this report:
Directors
KMPs
Other Executives
Ordinary Shares
-
-
-
Ordinary Shares /
Loan Scheme
-
12,094,809
-
Options
Share Rights
-
-
-
-
-
2,000,000
DataDot Technology Limited Annual Report 2020Page 16 Remuneration Report (audited) (continued)
for the year ended 30 June 2020
Remuneration details for the year
The following table of benefits and payments, details, in respect to the financial year, the components of remuneration of each
KMP.
2020
Directors
R Carroll
B Kellas
D Lloyd
Executives
D Maclean
A Winfield
D Williams
P Raper
2019
Directors
R Carroll - Note 1
B Kellas - Note 2
D Lloyd – Note 1
G Flowers
S Wilks
T Hield
Executives
D Maclean
A Winfield
D Williams
S Delepine
Short-term benefits
Cash,
Salary,
allowances
& fees $
STI $
Post-employment
benefits
Long-term benefits
Share-based
payments
Non cash
$
Super-
annuation
$
Termination
$
Long
service
leave $
Share rights
and Share
Options $
59,539
175,041
24,807
52,544
82,499
105,670
123,821
623,922
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,459
-
2,356
4,604
10,294
2,870
12,833
38,416
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,688
-
-
-
2,688
Total $
64,998
175,041
27,163
57,148
92,793
111,228
136,654
665,025
Short-term benefits
Cash,
Salary,
allowances
& fees $
STI $
4,038
14,497
3,365
36,252
45,169
229,965
21,745
162,642
184,053
154,353
856,079
-
-
-
-
-
106,188
-
-
3,000
3,704
112,892
Post-employment
benefits
Long-term benefits
Share-based
payments
Non cash
$
Super-
annuation
$
Termination
$
Long
service
leave $
Share rights
and Share
Options $
Total $
-
-
-
-
-
-
-
-
-
-
-
384
1,377
320
15,175
-
20,531
2,066
3,659
18,746
-
62,258
-
-
-
-
-
62,638
-
-
-
-
62,638
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,688
-
12,105
6,719
6,719
28,231
4,422
15,874
3,685
51,427
45,169
422,010
23,811
178,406
212,518
164,776
1,122,098
Directors
Executives
Ray Carroll
Brad Kellas
David Lloyd
Gary Flowers
Stephe Wilks
Temogen Hield
Duncan Maclean
Andrew Winfield
David Williams
Steve Delepine
Patrick Raper
Bonus
STI %
0.0%
0.0%
0.0%
0.0%
0.0%
25.3%
0.0%
0.0%
1.5%
2.3%
0.0%
2019 Performance based remuneration
Share rights /
Options
LTI %
0.0%
0.0%
0.0%
0.0%
0.0%
2020 Performance based remuneration
Share rights /
Options
LTI %
0.0%
0.0%
0.0%
Bonus
STI %
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
DataDot Technology Limited Annual Report 2020Page 17
Remuneration Report (audited) (continued)
for the year ended 30 June 2020
Details of the performance based and equity-based remuneration for KMP are set out below.
Employment details of key management personnel
Temogen Hield
(a)
Mr Hield joined the company in August 2015 as CEO and was appointed as a Director following the retirement of Bruce Rathie at
the 2017 AGM. Mr Hield left the employ of DataDot Technology in June 2019.
No remuneration was paid to Mr Hield in FY2020.
Mr Hield’s remuneration in FY2019 included a base salary of approximately $250,000pa plus superannuation; a fixed sum STI for
FY2019 relating to the deferred payment of the 2017 STI which was paid in June 2019 and a fixed sum completion bonus relating
to the proposed sale of the Dots business to DataDot Technology South Africa.
In FY2018, the LTI component of Mr Hield’s package was changed to be an Employee Share Issue and Loan Scheme, whereby the
company invited Mr Hield to subscribe for 16,126,414 shares in the Company at 2.7c per share, with the payment for that
subscription being lent to him by the Company on a limited recourse basis. The offer shares have the same rights as all other
ordinary shares on issue in the Company other than the following restrictions. Shares issued under this offer may not be traded,
transferred or encumbered prior to the shares Entitlement Date. The Entitlement Date is determined for each of the three equal
tranches of 5,375,471 shares as 18 August 2017, 1 July 2018 and 1 July 2019, or immediately at any change of control of the
company. The shares may not be traded, transferred or encumbered until any outstanding loan amount in respect of the shares
has been repaid. Shares may be forfeited prior to achieving the Entitlement Date if the employee ceases to be employed with the
Company. Any outstanding loan amount must be repaid within one year of the last unconditional Entitlement date of the offer
shares, unless otherwise agreed with the Company. Where any loan amount remains unpaid one year after the date of the last
unconditional Entitlement date of the offer shares, the proportionate number of shares in respect of that loan amount will be
forfeited for the total nominal consideration of $1. In recovering any loan amount, the Company has recourse only to the offer
shares, and the return of those shares will be in full satisfaction of any outstanding loan obligation.
Under this revised LTI, Share Options previously issued were cancelled.
Upon termination of his employment, Mr Hield relinquished all rights to the 16,126,414 shares issued to him under the Employee
Share Issue and Loan Scheme and the loan amount was cancelled. The shares were cancelled post shareholder the 2019 AGM.
David Williams
(b)
Mr Williams joined the company in June 2016 as CFO.
Mr Williams remuneration package includes a base salary of approximately $182,650 plus superannuation; a fixed sum STI for
FY2019 relating to the deferred payment of the 2017 STI which at the date of this report has been paid only to 50%. Mr Williams
last day of employment with DataDot Technology will be 26 August 2019.
In FY 2018, the LTI component of Mr William’s was changed to be an Employee Share Issue and Loan Scheme, whereby the
company invited Mr Williams to subscribe for 12,094,809 shares in the Company, with the payment for that subscription being
lent to him by the Company on a limited recourse basis. The offer shares have the same rights as all other ordinary shares on
issue in the Company other than the following restrictions. Shares issued under this offer may not be traded, transferred or
encumbered prior to the shares Entitlement Date. The Entitlement Date is determined for each of the three equal tranches of
4,031,603 shares as 1 July 2018 and 1 July 2019 and 1 July 2020, or immediately at any change of control of the company. The
shares may not be traded, transferred or encumbered until any outstanding loan amount in respect of the shares has been repaid.
Shares may be forfeited prior to achieving the Entitlement Date if the employee ceases to be employed with the Company. Any
outstanding loan amount must be repaid within one year of the last unconditional Entitlement date of the offer shares, unless
otherwise agreed with the Company. Where any loan amount remains unpaid one year after the date of the last unconditional
Entitlement date of the offer shares, the proportionate number of shares in respect of that loan amount will be forfeited for the
total nominal consideration of $1. In recovering any loan amount, the Company has recourse only to the offer shares, and the
return of those shares will be in full satisfaction of any outstanding loan obligation.
Under this revised LTI, Share Options previously issued were cancelled.
Due to the termination of his employment, Mr Williams is required to repay the loan to the company of $326,560 by 26 August
2020 or he will forfeit all rights to the 12,094,809 shares issued under the Share Issue and Loan Scheme and the shares will be
cancelled.
DataDot Technology Limited Annual Report 2020Page 18 Remuneration Report (audited) (continued)
for the year ended 30 June 2020
Stephen Delepine
(c)
Mr Delepine joined the company in February 2016 as Vice President Business Development. Mr Delepine left the employ of
DataDot Technology in May 2019.
Mr Delepine’s remuneration in FY2019 included a base salary of AUD 154,354. No remuneration was paid to Mr Delepine in
FY2020.
In FY 2018, an LTI component has been added in the form of an Employee Share Issue and Loan Scheme, whereby the company
invited Mr Delepine to subscribe for 12,094,809 shares in the Company, with the payment for that subscription being lent to
him by the Company on a limited recourse basis. The offer shares have the same rights as all other ordinary shares on issue in
the Company other than the following restrictions. Shares issued under this offer may not be traded, transferred or encumbered
prior to the shares Entitlement Date. The Entitlement Date is determined for each of the three equal tranches of 4,031,603
shares as 1 July 2018 and 1 July 2019 and 1 July 2020, or immediately at any change of control of the company. The shares may
not be traded, transferred or encumbered until any outstanding loan amount in respect of the shares has been repaid. Shares
may be forfeited prior to achieving the Entitlement Date if the employee ceases to be employed with the Company. Any
outstanding loan amount must be repaid within one year of the last unconditional Entitlement date of the offer shares, unless
otherwise agreed with the Company. Where any loan amount remains unpaid one year after the date of the last unconditional
Entitlement date of the offer shares, the proportionate number of shares in respect of that loan amount will be forfeited for
the total nominal consideration of $1. In recovering any loan amount, the Company has recourse only to the offer shares, and
the return of those shares will be in full satisfaction of any outstanding loan obligation.
Due to the termination of his employment, Mr Delepine was required to repay the loan to the company of $326,560 by 17 May
2020 or forfeit all rights to the 12,094,809 shares issued under the Share Issue and Loan Scheme. As the loan was not repaid, the
shares were forfeited except to the extent that 5,349,733 shares were applied to pay the unpaid portion of the 2017 bonus gifted
to Mr Delepine. 6,745,076 shares will be forfeited and cancelled subject to shareholder approval at the 2020 AGM.
(d) Andrew Winfield
Mr Winfield joined the company in November 2011 as Managing Director of the UK subsidiary.
Mr Winfield’s remuneration package includes a base salary of GBP90,000 plus a pension entitlement at 1.6%.
The Company has suspended all STI and LTI programs in operation at 13 May 2019 and will look to implement a new and
more effective program after the 2020 AGM.
In October 2016 Mr Winfield was included in the company LTI programme. The LTI comprised 6 million share options in the
Company which are due to vest in 3 tranches, subject to continued employment, and a trading restriction after share issue as
follows: Tranche 1 – 2.0 million share options with an exercise price of 2.7c vesting when the volume weighted average share
price (VWAP) exceeds 5c for more than 3 months and expiring 3 months after vesting; Tranche 2 – 2.0 million share options with
an exercise price of 2.7c vesting when the VWAP exceeds 10c for more than 3 months and expiring 3 months after vesting;
Tranche 3 – 2 million share options with an exercise price of 2.7c vesting when the VWAP exceeds 15c for more than 3 months
and expiring 3 months after vesting. The above LTI package expired on 1 July 2019.
The Company has suspended all STI and LTI programs in operation at 13 May 2019 and will look to implement a new and more
effective program after the 2020 AGM.
Mr Winfield left the employ of the company on 31 December 2019 and was not paid a STI in FY 2020.
(e) Duncan Maclean
Mr Maclean joined the company on 13 May 2019. His remuneration package included a base salary of approximately $150,000
plus superannuation and a STI that was to be determined at a later date.
The Company suspended all STI and LTI programs in operation at 13 May 2019 and will look to implement a new and more
effective program when the company returns to profitability.
(f) Patrick Raper
Mr Raper took on the role of CFO on a part time basis after the departure of the previous CFO in August 2019. His annual
remuneration package based on his part time employment status is $160,000 including Superannuation.
DataDot Technology Limited Annual Report 2020Page 19 Remuneration Report (audited) (continued)
for the year ended 30 June 2020
Executive service contracts
It is the Board's policy to establish executive service contracts with all KMP. No KMP is employed on a fixed term contract. The
termination notice periods for executive service contracts is between one month and three months. Commitments of these
amounts are disclosed in Note 21 of the financial accounts.
KMPs have no entitlement to termination payments in the event of removal for misconduct.
Ray Carroll – Chairman
27 August 2020
DataDot Technology Limited Annual Report 2020Page 20 Audit Only
ABN 59 288 963 259
Level 7
91 Phillip Street
Parramatta NSW 2150
Tel: +61 2 8893 1214
Fax: +61 2 9084 2297
www.auditonly.com.au
The Directors
DataDot Technology Limited
8 Ethel Avenue
BROOKVALE NSW 2100
27 August 2020
Dear Directors
DataDot Technology Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of DataDot Technology Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge
and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
b. No contraventions of any applicable code of professional conduct in relation to the audit.
Yours sincerely
Andrew Hunt
Principal
Liability limited by a scheme approved under Professional Standards Legislation.
Page 21
Consolidated Financial Statements
for the year ended 30 June 2020
Contents
Consolidated statement of profit or loss
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor's report
Page
23
24
25
26
27
28
54
55
DataDot Technology Limited Annual Report 2020Page 22 Consolidated Statement of Profit or Loss
for the year ended 30 June 2020
Revenue
Sale of goods
Service and licence fees
Royalties
Cost of sales
Gross Profit
Other income
Expenses
Administrative expenses
Marketing expenses
Occupancy expenses
Restructuring expenses
Travel expenses
EBITDA
Depreciation and Amortisation
Finance costs
Impairment of intangibles
Profit / (Loss) before income tax expense
Income tax expense
Profit / (Loss) after income tax expense for the year
Profit / (Loss) for the year attributable to :
Owners of DataDot Technology Limited
Basic profit / (loss) per share (cents per share)
Diluted profit / (loss) per share (cents per share)
Notes
3
4
4
5
8
8
2020
$
2,358,816
148,614
1,267,139
3,774,569
2019
$
2,659,953
237,778
381,848
3,279,579
1,597,751
1,818,102
2,176,818
1,461,477
323,611
222,463
1,706,543
3,009,946
70,289
196,857
126,835
90,520
2,191,044
10,602
370,059
-
50,628
3,441,235
309,385
(1,757,295)
177,833
91,914
-
239,280
5,966
284,249
39,638
(2,286,790)
10,435
14,527
29,203
(2,301,317)
29,203
29,203
(2,301,317)
(2,301,317)
0.003
(0.299)
0.003
(0.299)
The Group have initially applied AASB 16 using the cumulative effect method and has not restated comparatives. The comparatives have been prepared using AASB 117 and related
interpretations
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes.
DataDot Technology Limited Annual Report 2020Page 23
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2020
Profit / (Loss) after income tax expense for the year
Other comprehensive income
Items that may be classified subsequently to profit or loss
Exchange difference on translation of foreign operations
Total comprehensive income / (loss) for the year, net of tax
Total comprehensive profit / (loss) attributable to
Owners of DataDot Technology Limited
2020
$
2019
$
29,203
(2,301,317)
1,243
18,878
30,446
(2,282,439)
30,446
(2,282,439)
The Group have initially applied AASB 16 using the cumulative effect method and has not restated comparatives. The comparatives have been prepared using AASB 117 and related
interpretations
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
DataDot Technology Limited Annual Report 2020Page 24
Consolidated Statement of Financial Position
for the year ended 30 June 2020
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
R&D grant receivable
Total Current Assets
Non Current Assets
Plant and equipment
Intangibles
Investments
Deferred Tax Asset
Total Non Current Assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Income tax
Employee benefits
Provisions
Other current liabilities
Total Current Liabilities
Non Current Liabilities
Borrowings
Employee benefits
Other non-current liabilities
Total Non Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Accumulated losses
Reserves
Equity attributed to the owners of DataDot Technology Limited
Total Equity
Notes
9
10
11
12
13
5
14
15
16
17
18
15
16
18
19
20
2020
$
1,005,325
892,492
262,027
214,394
2,374,238
616,487
-
2,948
-
619,435
2019
$
194,752
544,975
421,702
47,700
1,209,129
265,425
-
120
16,264
281,809
2,993,673
1,490,938
446,980
-
-
78,735
7,105
126,973
659,793
-
10,161
411,856
422,017
712,997
2,323
-
80,872
81,424
43,659
921,275
454,831
8,504
120
463,455
1,081,810
1,384,730
1,911,863
106,208
41,557,528
(37,640,893)
(2,004,772)
39,692,526
(37,670,096)
(1,916,222)
1,911,863
106,208
1,911,863
106,208
The Group have initially applied AASB 16 using the cumulative effect method and has not restated comparatives. The comparatives have been prepared using AASB 117 and related
interpretations
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
DataDot Technology Limited Annual Report 2020Page 25
Consolidated Statement of Changes in Equity
for the year ended 30 June 2020
Balance at 30 June 2018
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Convertible Note Reserve
Transactions with owners in their capacity as owners :
Share based payments
Share issues
Share issue costs
Attributable to equity holders of the parent
Issued
capital $
39,692,526
Accumulated
losses $
(35,368,779)
Foreign
currency
translation
reserve $
(1,749,866)
Employee
equity
benefit
reserve $
Other
reserve $
Total
equity $
355,197
(678,623)
2,250,455
-
-
-
-
-
-
(2,301,317)
-
-
18,878
(2,301,317)
18,878
-
-
-
-
-
-
(2,301,317)
18,878
(2,282,439)
95,169
95,169
-
-
-
-
-
-
43,023
-
-
-
-
-
43,023
0
0
Balance at 30 June 2019
39,692,526
(37,670,096)
(1,730,988)
398,220
(583,454)
106,208
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Convertible Note Reserve
Transactions with owners in their capacity as owners :
Share based payments
Share issues
Share issue costs
-
-
-
-
1,889,646
(24,644)
29,203
-
29,203
-
-
-
-
1,243
1,243
-
-
-
-
-
-
-
-
-
29,203
1,243
30,446
(95,169)
(95,169)
5,376
-
-
-
-
-
5,376
1,889,646
(24,644)
Balance at 30 June 2020
41,557,528
(37,640,893)
(1,729,745)
403,596
(678,623)
1,911,863
The Group have initially applied AASB 16 using the cumulative effect method and has not restated comparatives. The comparatives have been prepared using AASB 117 and related
interpretations
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
DataDot Technology Limited Annual Report 2020Page 26
Consolidated Statement of Cash Flows
for the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest paid
Income tax paid
Receipt of government grants
Notes
2020
$
3,877,328
(4,271,887)
-
(10,435)
(58,116)
2019
$
3,830,440
(5,445,264)
(3,641)
(16,108)
192,963
Net cash used in operating activities
9
(463,110)
(1,441,610)
Cash flows from investing activities
Interest received
Payments for plant and equipment
Payments for development costs and other intangibles
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from convertible notes issued
Redemption of Convertible Notes
Proceeds from share issue (net of share issue costs)
Repayment of borrowings
Net cash provided by financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
639
(40,878)
-
1,015
(58,397)
(6,929)
(40,239)
(64,311)
600,000
(1,150,000)
1,865,002
(2,323)
550,000
-
-
-
1,312,679
550,000
809,330
194,752
1,243
(955,921)
1,125,253
25,420
Cash and cash equivalents at the end of the financial year
9
1,005,325
194,752
The Group have initially applied AASB 16 using the cumulative effect method and has not restated comparatives. The comparatives have been prepared using AASB 117 and related
interpretations
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
DataDot Technology Limited Annual Report 2020Page 27
Notes to the Financial Statements
for the year ended 30 June 2020
1
General Information
DataDot Technology Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:
8 Ethel Ave
Brookvale, NSW, 2100
Australia
A description of the nature of DataDot's operations and its principal activities are included in the Directors' report, which is not part of the financial statements.
The financial statements were authorised for issue in accordance with a resolution of Directors' on 27 August 2020.
Comparatives are consistent with prior years, except for the information relating to leases due to the modified restrospective adoption of AASB 16.
Basis of preparation
These general purpose financial statements comprise the consolidated financial statements of DataDot Technology Limited and its controlled entities (hereafter referred to as
'DataDot', 'the consolidated entity', 'the Company' and 'the Group') as at and for the period ended 30 June each year. They have been prepared in accordance with
Accounting Standards and other authoritative pronouncements issued by the Australian Accounting Standards Board ('AASB'), and comply with other requirements of the
law and the Corporations Act 2001 as appropriate for for-profit oriented entities.
These financial statements also comply with International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board ('IASB').
Significant accounting policies applied are provided within these financial statements, where appropriate.
Going Concern
The financial statements of the company have been prepared on a going concern basis, which indicates continuity of business activities and the realisation of assets and
settlement of liabilities in the normal course of business.
During the year ended 30 June 2020, the company earned a profit after tax of $29,203 (2019: Loss $2,301,317). Negative operating cash flows of $463,110 (2019:
$1,441,610) were incurred. Revenue from sale of goods and services has grown by 15% in 2020 (2019: -37%).
As disclosed in the Directors Report, the company has raised $1,829,565 in capital during May and June 2020 through a Placement and a 1:3 Rights Issue. $1,150,000 of the
proceeds were used to redeem all the Convertible Notes and the balance has been applied to strengthening working capital to support the company through the Covid - 19
period of business uncertainty. Although slower than originally anticipated, (mostly due to Covid - 19) sales through one of our distributors for distribution in Europe and
Russia continue to support a stable platform for future growth and strength.
Cash held by the company at 30 June 2020 was $1,005,325 (2019: $194,752) and Net Assets of the group have increased to $1,911,863 from $106,208 at 30 June 2019.
These financial results demonstrate greater financial strength than was the case at June 2019 and substantially remove any doubt on whether the Company will continue as a
going concern and, therefore, whether it will realise its assets and settle its liabilities and commitments in the normal course of the business and at the amounts stated in the
financial report.
At the date of this report, the directors are of the opinion that there are reasonable grounds to expect that the Company will be able to continue as a going concern.
As such the financial report is prepared on a going concern basis.
Accordingly, no adjustments have been made to the financial report relating to the recoverability and classification of the asset carrying amounts or the amounts and
classification of liabilities that might be necessary should the Company not continue as a going concern.
2
Segment Information
Operating Segments
Segment descriptions
DataDot has identified its operating segments based on the internal reports that are reviewed and used by the executive management team (the chief operating decision
makers) in assessing performance and in determining the allocation of resources.
Management has reviewed the segments and determined the group is organised into business units based on their product and services and accordingly has two reportable
segments. Discrete financial information about each of these operating businesses is reported to the executive management team on at least a monthly basis.
Products and services by segment
Two reportable segments have been identified as follows:
DataDotDNA® polymer and metallic microdots containing etched data that is unique to the assets to which the microdots are attached;
DataTraceID® – a high speed, high security, machine readable system for authenticating materials, products, and assets and IntelliSeed™ by
AgTechnix is a frontier patent pending technology, supporting global agriculture and protecting investments in intellectual property across a
diverse spectrum of agricultural activities, including seed and plant genetics.
Accounting policies and intersegment transactions
The accounting policies used by DataDot in reporting segments internally are the same as those contained in the prior period. Intersegment pricing is determined on an
arm’s length basis. Intersegment transactions are eliminated on consolidation.
DataDot Technology Limited Annual Report 2020Page 28 Notes to the Financial Statements
for the year ended 30 June 2020
2
Segment Information (continued)
The following tables present the revenue, loss after tax, assets and liabilities information regarding operating segments for years ended 30 June 2020 and 30 June 2019.
Segment performance
Year ended 30 June 2020
Revenue from external customers
Intersegment sales
Total revenue
Gross profit
Restructuring expenses
EBITDA
Depreciation and amortisation
Intangibles Impairment
Finance costs
Profit / (Loss) before income tax
Income tax expense
Profit / (Loss) after income tax
Segment assets
Segment liabilities
Segment performance
Year ended 30 June 2019
Revenue from external customers
Intersegment sales
Total revenue
Gross profit
Restructuring expenses
EBITDA
Depreciation and amortisation
Intangibles Impairment
Finance costs
Loss before income tax
Income tax expense
Loss after income tax
Segment assets
Segment liabilities
DataDotDNA
DataTraceID
Intersegment
eliminations
$
$
$
3,479,139
48,436
3,527,575
295,431
1,575
297,006
1,995,925
180,892
(126,835)
-
134,122
175,263
(178,627)
-
(114,734)
(7,850)
-
-
(127,776)
167,413
(10,434)
-
(138,210)
167,413
-
(50,011)
(50,011)
-
-
-
-
-
-
-
-
Total
$
3,774,569
0
3,774,569
2,176,817
(126,835)
309,385
(186,478)
-
(114,734)
39,637
(10,434)
29,203
7,476,891
222,706
(4,705,923)
2,993,673
985,142
2,405,674
(2,309,006)
1,081,810
DataDotDNA
DataTraceID
Intersegment
eliminations
$
$
$
Total
$
2,756,779
439,320
3,196,099
522,800
9,792
532,592
-
3,279,579
(449,112)
(449,112)
-
3,279,579
1,608,674
300,809
(448,006)
1,461,477
-
-
(1,568,137)
(189,158)
-
-
(206,892)
(284,249)
(5,966)
(32,388)
(11,221)
-
11,221
-
(1,757,295)
(239,280)
(284,249)
(5,966)
(2,065,244)
(232,767)
11,221
(2,286,790)
(14,527)
-
-
(14,527)
(2,079,771)
(232,767)
11,221
(2,301,317)
14,088,291
199,008
(12,796,361)
1,490,938
17,905,943
2,289,869
(18,811,082)
1,384,730
DataDot Technology Limited Annual Report 2020Page 29
Notes to the Financial Statements
for the year ended 30 June 2020
2
Segment Information (continued)
Geographic segments
DataDot operates facilities in two geographical regions of Australasia and United Kingdom.Each manufacturing facility distributes the DataDot asset identification system. The
tables below show revenues earned in each geographic region.
Major customers
DataDot has a number of customers to which it provides both products and services. In Australasia, one customer accounts for 8% of total revenue (2019 : 10%), in Europe
one customer accounts for 12% of total revenue (2019 : 11%), in the Americas one customer accounts for 14% of total revenue (2019 : 21%) and in DataTraceID one
customer accounts for 4% total revenue (2019 : 5%).
Disaggregation of revenue
The Group has disaggregated revenue into various categories in the following table which is intended to:
• depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic date; and
• enable users to understand the relationship with revenue segment information provided in note 2
Consolidated - 2020
Geographical regions
Asia
Americas
Africa
Australia
Europe
Timing of revenue recognition
Point in time
Over time
Consolidated - 2019
Geographical regions
Asia
Americas
Africa
Australia
Europe
Timing of revenue recognition
Point in time
Over time
DataDotDNA
DataTraceID
$
$
Total
$
114,205
530,886
1,499,285
378,419
955,263
3,478,059
38,596
5,005
9,656
56,317
186,937
296,511
152,801
535,892
1,508,941
434,736
1,142,200
3,774,569
3,478,059
-
176,186
120,325
3,654,244
120,325
3,478,059
296,511
3,774,569
DataDotDNA
DataTraceID
$
$
Total
$
101,713
799,430
381,264
427,249
1,033,332
2,742,988
189,187
19,271
11,478
15,272
301,383
536,591
290,900
818,701
392,742
442,521
1,334,715
3,279,579
2,742,988
-
2,742,988
421,555
115,036
536,591
3,164,543
115,036
3,279,579
DataDot Technology Limited Annual Report 2020Page 30 Notes to the Financial Statements
for the year ended 30 June 2020
3
Other Income
Interest revenue
Government grants:
Sundry income
Research and development grants *
Cash Boost and Job Keeper assistance - Australia and UK
2020
$
639
166,724
132,596
23,652
323,611
2019
$
997
215,295
-
6,171
222,463
* There are no unfulfilled conditions or contingencies attached to the grants.
Accounting treatment
Research and development grant
The research and development grants received from the Australian government are classified as deferred income and released to other income in line with the amortisation
of the capitalised or expensed costs to which the grant relates.
The research and development grants receivable from the Australian government are recognised in the statement of financial position as an asset when the grant is
reasonably certain.
4
Expenses
The consolidated statement of profit and loss includes the following specific expenses:
Cost of sales
Inventory
Stock obsolescence
Administration expenses
Net loss / (gain) on foreign currency
Minimum equipment lease payments
Employee benefits expenses
Employee share based payment expenses
Superannuation expenses
Research & development expenses
Bad debt expense
Administrative expenses
Occupancy expenses
Minimum lease payments
Restructuring expenses
Restructuring expenses include legal, professional services and consulting fees relating to the proposed Beston
merger deal in restructuring the business.
2020
$
677,951
49,002
2019
$
518,014
256,428
85,601
6,487
827,632
5,376
66,367
67,989
64,822
588,756
1,706,543
1,705,126
43,023
126,306
24,099
48,559
1,056,346
3,009,946
138,799
254,175
126,835
-
DataDot Technology Limited Annual Report 2020Page 31
Notes to the Financial Statements
for the year ended 30 June 2020
5
Income Tax
(a) Major components of tax expenses
Current income tax expense
Withholding tax
Income tax expense
(b) The prima facie tax on loss before income tax is reconciled to the income tax expense as follows :
Profit / (Loss) before income tax expense
Net profit / (loss) before income tax expense at the statutory income tax rate of 27.5%
Foreign tax rate adjustment
Income not subject to tax
Research and development expenditure added back
Expenditure not allowable
Other timing differences
Tax losses and tax offsets not recognised as deferred tax assets
Withholding tax
Aggregate income tax expense
(c) Recognised deferred tax assets and liabilities
Opening balance
Deferred tax movement credited/charged to income
Closing balance
Deferred tax assets and liabilities
Deferred income tax at 30 June relates to the following :
Deferred tax liabilities
Development costs
Patents & Trademarks
Gross deferred tax liabilities
Set off of deferred tax assets
Net deferred tax liabilities
Deferred tax assets
Provisions
Accruals
Equity raising costs
Doubtful debts and obsolescence
Other timing differences
Gross deferred tax assets
Set off of deferred tax liabilities
Net deferred tax assets not brought to account
2020
$
-
10,434
10,434
2019
$
-
14,527
14,527
39,638
(2,286,790)
10,900
(25,105)
(63,408)
53,705
31,547
(41,614)
33,975
10,435
10,435
16,264
(16,264)
-
-
-
-
-
-
24,446
259,662
1,740
105,139
66,109
457,096
-
457,096
(628,867)
(39,747)
(59,206)
30,138
214,871
(56,262)
539,073
14,527
14,527
14,683
1,581
16,264
-
-
-
-
-
23,425
93,917
31,905
54,325
18,715
222,287
-
222,287
DataDot Technology Limited Annual Report 2020Page 32
Notes to the Financial Statements
for the year ended 30 June 2020
5
Income Tax (continued)
Accounting treatment
The potential deferred tax assets arising from unused tax losses and temporary differences have only been recognised where it is probable that the future taxable profit will
be available against which tax losses can be utilised. Deferred tax assets currently recognised relates to DataDot Technology (UK) Limited where future taxable profit is
expected. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
2020
$
2019
$
The amount of the potential deferred tax assets attributable to revenue losses not brought to account
10,793,780
10,699,453
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences and losses can be utilised.
Current and deferred tax is recognised as income or an expense and included in profit or loss for the period except where the tax arises from a transaction which is
recognised in other comprehensive income or equity, in which case the tax is recognised in other comprehensive income or equity respectively.
There is no deferred tax liabilities in other tax jurisdictions
Returned Tax Losses in the USA of USD 5,817,093 (2019: 5,328,294 will expire progressively from 2022 to 2039.
Tax consolidation
DataDot Technology Limited and its wholly owned Australian controlled entities implemented the tax consolidated legislation as of 1 July 2003.
The head entity, DataDot Technology Limited and the controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts.
As DataDot is in a cumulative tax loss position, DataDot has not applied the group allocation approach in determining the appropriate amount of current taxes and deferred
taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, DataDot Technology 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 when it is probable that future taxable profit will allow the
deferred tax asset to be recovered.
DataDot Technology Limited has not entered into any tax funding agreements with the tax consolidated entities.
6
Auditors' Remuneration
The auditor of DataDot Technology Limited is Audit Only (2019:BDO East Coast Partnership)
Amounts paid or payable for audit services by AuditOnly (2019: BDO East Coast Partnership):
An audit or review of the financial statements
Other services :
Tax compliance
Other services - R&D and restructure advice
Amounts paid or payable to AuditOnly (2019: BDO) network firms :
Audit or review of the financial statements
Tax compliance
2020
$
2019
$
73,000
162,000
-
-
73,000
29,000
75,992
266,992
-
-
-
21,349
-
21,349
DataDot Technology Limited Annual Report 2020Page 33
Notes to the Financial Statements
for the year ended 30 June 2020
7
8
Dividends
No dividends declared or paid during the year. No franking credits are available.
Earnings Per Share
Basic earnings / (loss) per share (cents per share)
Diluted earnings / (loss) per share (cents per share)
Net profit / (loss) after income tax expense used in calculating profit / (loss) per share
Weighted average number of shares :
Weighted average number of shares used in calculating basic and diluted earnings per share
Adjustments for calculation of diluted earnings per share
Adjusted weighted average number of shares
Shares and share rights issued subsequent to end of the year :
Nil.
Diluted earnings per share
2020
$
0.003
0.003
29,203
No
851,167,141
2,000,000
853,167,141
2019
$
(0.299)
(0.299)
(2,301,317)
No
770,290,319
2,000,000
772,290,319
Share rights and options issued to shareholders and related parties are considered to be potential ordinary shares and have been considered in determination of diluted
earnings per share. The calculation of diluted earnings per share assumes conversion, exercise or other issue of potential ordinary shares that would have a dilutive effect on
earnings per share.
9
Cash and Cash Equivalents
Reconciliation of cash
Cash at the end of the financial year shown in the consolidated statement of cash flows is reconciled as follows :
Cash at bank and on hand
Cash Flow Information
Reconciliation of loss after tax to net cash from operations :
Profit / (Loss) after income tax expense for the year
Add/(less) items classified as investing/financing activities:
Interest received
Increase / Decrease in Shares Issued
Add/(less) non cash items:
Depreciation, amortisation and impairment
Share based payments
Changes in assets and liabilities :
(Increase)/ Decrease in trade and other receivables
Decrease in non-current tax assets
Decrease in inventories
(Increase) / Decrease in grant receivable
Decrease in trade and other payables
Decrease/(Increase) in current tax liabilities
Decrease in other liabilities
Decrease in employee benefits
Increase / (Decrease) in borrowings
Net cash used in operating activities
2020
$
2019
$
1,005,325
1,005,325
194,752
194,752
29,203
(2,301,317)
(639)
(1,015)
177,833
5,376
523,529
43,023
(347,517)
16,264
159,675
(166,694)
(266,017)
-
(68,457)
(2,137)
-
230,333
-
192,767
129,347
(81,575)
(1,581)
(165,260)
(12,184)
2,323
(463,110)
(1,441,610)
DataDot Technology Limited Annual Report 2020Page 34
Notes to the Financial Statements
for the year ended 30 June 2020
9
10
Cash and Cash Equivalents (continued)
Accounting treatment
Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are
subject to an insignificant risk of change in value.
Trade and Other Receivables
Trade receivables
Provision for impairment
Prepayments
Other receivables
2020
$
975,968
(247,354)
728,614
115,313
48,565
892,492
2019
$
572,342
(182,635)
389,707
137,189
18,079
544,975
Impairment of receivables
The Group applies the simplified approach to providing for expected credit losses prescribed by AASB 9, which permits the use of the lifetime expected loss provision for all
< 30 days
overdue
< 60 days
overdue
< 90 days
overdue
> 90 days
overdue
30 June 2020
Expected loss rate (%)
Gross carrying amount ($)
ECL provision
30 June 2019
Expected loss rate (%)
Gross carrying amount ($)
ECL provision
Current
0.09%
326,540
304
0.47%
147,079
684
0.63%
235,069
1,486
6.24%
158,841
9,908
0.85%
63,288
538
9.60%
7,955
764
0.00%
48,667
-
0.00%
-
-
62.97%
390,394
245,828
100.00%
170,477
170,477
Total
25.34%
975,968
247,354
31.91%
572,342
182,635
Reconciliation of changes in the provision for impairment of receivables is as follows:
Balance at beginning of the year (calculated in accordance with AASB 139)
Amount restated through opening retained earnings on adoption of AASB 9
Opening impairment allowance calculated under AASB 9
Additional impairment loss recognised
Amounts written off as uncollectible
Movement through provision
Balance at end of the year
2020
$
182,635
-
182,635
-
-
64,719
247,354
2019
$
244,958
-
244,958
-
-
(62,323)
182,635
The Group measures the loss allowance for trade receivables at an amount equal to lifetime expected credit loss (ECL). The ECL on trade receivables are estimated using a
provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the
debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at
the reporting date.
There has been no change in the estimation techniques or significant assumptions made during the current reporting period.
The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g.
when the debtor has been placed under liquidation or has entered into bankruptcy proceedings or when the trade receivables are over 2 years past due, whichever occurs
first.
DataDot Technology Limited Annual Report 2020Page 35
Notes to the Financial Statements
for the year ended 30 June 2020
11
Inventories
Raw materials
Finished goods
Accounting treatment
2020
$
262,027
-
262,027
2019
$
414,519
7,183
421,702
Inventories including raw materials and finished goods are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows :
Raw materials – purchase cost on either the weighted average cost or on first in, first out basis; and
Finished goods – cost of direct materials and labour and a proportion of variable and fixed manufacturing overheads based on normal operating
capacity. Costs are assigned on the basis of weighted average costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
Inventory is written down through an obsolescence provision if necessary.
12
Plant and Equipment
Plant and equipment - at cost
Accumulated depreciation
Total owned plant and equipment
Plant and equipment under lease
Accumulated depreciation
Total plant and equipment under lease
Leasehold improvements - at cost
Accumulated depreciation
Total leasehold improvements
Movements in carrying amounts
Balance as at 1 July 2018
Additions
Disposals
Depreciation expense for the year
Exchange adjustments
Balance at 30 June 2019
Additions
Disposals
Depreciation expense for the year
Exchange adjustments
Balance at 30 June 2020
$
1,842,135
(1,666,742)
175,393
203,286
(129,753)
73,533
252,670
114,892
367,562
$
2,545,654
(2,327,264)
218,390
152,923
(107,046)
45,877
207,329
(206,171)
1,158
616,487
265,425
Plant and
equipment
Plant and
equipment under
lease
Leasehold
Improvements
$
296,977
58,397
(39,897)
(100,153)
3,066
218,390
52,696
(39,300)
(57,542)
1,149
175,393
$
61,169
-
-
(15,292)
-
45,877
50,362.60
-
(22,707)
-
73,533
$
1,589
-
-
(431)
-
1,158
456,821
-
(90,418)
-
367,562
Totals
$
359,735
58,397
(39,897)
(115,876)
3,066
265,425
559,880
(39,300)
(170,667)
1,149
616,487
DataDot Technology Limited Annual Report 2020Page 36
X
0
A
0
T
Notes to the Financial Statements
for the year ended 30 June 2020
12
Plant and Equipment (continued)
Accounting treatment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment.
Depreciation
Depreciation is calculated over the useful life of the asset using a combination of straight line basis and diminishing value method. The estimated useful lives of office
equipment is over 4 years, plant and equipment over 10 years and leasehold improvements over 10 years.
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.
Derecognition
An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in
profit or loss in the year the asset is derecognised.
13
Intangible Assets
Development - at cost
Less: Accumulated amortisation
Less: Impairment of intangibles
Patent and trademarks - at cost
Less: Accumulated amortisation
Less: Impairment of intangibles
Goodwill
Less: Impairment of intangibles
Software - at cost
Less: Accumulated amortisation
Less: Impairment of intangibles
Movements in carrying amounts
Balance as at 1 July 2018
Additions
Impairment of intangibles
Amortisation expense
Balance at 30 June 2019
Additions
Impairment of intangibles
Amortisation expense
Balance at 30 June 2020
2020
$
1,219,009
(1,062,049)
(156,960)
-
590,446
(470,796)
(119,650)
-
-
-
-
42,567
(34,098)
(8,469)
-
2019
$
1,219,009
(1,062,049)
(156,960)
-
590,446
(470,796)
(119,650)
-
-
-
-
42,567
(34,098)
(8,469)
-
-
-
Software
$
15,489
-
(8,469)
(7,020)
-
-
-
-
-
Totals
$
370,437
6,929
(284,249)
(93,117)
-
-
-
-
-
Development
$
222,286
0
(156,130)
(66,156)
-
-
-
-
-
Patents and
trademarks
$
132,662
6,929
(119,650)
(19,941)
-
-
-
-
-
Goodwill
$
-
-
-
-
-
-
-
-
-
DataDot Technology Limited Annual Report 2020Page 37
Notes to the Financial Statements
for the year ended 30 June 2020
13
Intangible Assets (continued)
Accounting treatment
Development costs
Development costs are carried at cost less accumulated amortisation and accumulated impairment losses. The intangible assets have been assessed as having finite lives and
are amortised using the straight line method over a period of 5 to 10 years. The amortisation has been recognised in the statement of profit or loss in the line item
“depreciation, amortisation and impairment”. If an impairment indication arises, the recoverable amount is estimated and an impairment loss is recognised to the extent that
the recoverable amount is lower than the carrying amount.
Patents and trademarks
Patent costs are carried at cost less accumulated amortisation and accumulated impairment losses. These intangible assets have been assessed as having a finite life and are
amortised using the straight line method over the period of the patent or a maximum period of 10 years. The amortisation has been recognised in the statement of profit or
loss in the line item 'administration expenses'. If an impairment indication arises, the recoverable amount is estimated and an impairment loss is recognised to the extent that
the recoverable amount is lower than the carrying amount.
In 2020 nil (2019: $6.929) costs were capitalised and any costs associated with the lodging, renewal, and maintenance of patents & trademarks that were incurred have been
expensed.
Goodwill
Where an entity or operation is acquired in a business combination, the identifiable net assets acquired are measured at fair value. The excess of the fair value of the cost of
the acquisition over the fair value of the identifiable net assets acquired is brought to account as goodwill. Goodwill is not amortised. Instead goodwill is tested annually for
impairment , or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.
Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Impairment testing
The write off of all intangibles remaining in the parent company post 30 June 2018 relates to a change in the strategic direction of the company under the new Board on
consideration that these no longer meet recognition criteria under AASB 138. Intangible assets are considered to have uncertain definable economic benefits under the new
strategy.
DataDot Technology Limited Annual Report 2020Page 38 Notes to the Financial Statements
for the year ended 30 June 2020
14
Trade and Other Payables
Trade payables
Sundry creditors and accruals
2020
$
158,608
288,372
446,980
2019
$
158,102
554,895
712,997
Trade and other payables are unsecured, non-interest bearing and are normally settled within 30 days. The carrying value of trade and other payables is considered a
reasonable approximation of fair value due to the short-term nature of the balances.
Accounting treatment
The Group measures all financial liabilities initially at fair value less transaction costs, subsequently financial liabilities are measured at amortised cost using the effective
interest rate method.
The financial liabilities of the Group comprise trade payables and convertible notes.
Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the
Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of GST.
Cash flows in the Statement of financial position are included on a gross basis and the GST component of cash flows arising from investing and financing activities which is
recoverable from, or payable to, the taxation authority is classified as operating cash flows.
15
Borrowings
Financing arrangements
Current - Interest Payable
Non-Current - Convertible Notes issues
2020
$
-
-
-
2019
$
2,323
454,831
457,154
Over the period 24 May 2019 to 22 June 2019, the consolidated entity issued 22 8% convertible notes, with a face value of $25,000 each, for total proceeds of $550,000. An
additional 24 8% convertible notes were issued in the period from 1 July 2019 to 5 July 2019. Interest was paid in December 2019 in arrears at a rate of 8% per annum based
on the face value. 32 of the notes with a face value of $800,000 were redeemed at the election of the company in May 2020 the balance of 14 notes with a face value of
$350,000 were redeemed at the election of the company in June 2020. Interest at the rate of 8% was paid up to the date of redemption of each note. Funds for the
redemption of the notes were provided from the successful capital raise conducted by the company in May and June 2020.
Accounting treatment
Transactions costs for the initial issue of the notes in 2019 were offset against the convertible notes payable liability.
In 2019 Loans and borrowings were initially recognised at the fair value of the consideration received, net of transaction costs and were subsequently measured at amortised
cost using the effective interest method.
In the 2019 comparative figures, the component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement of financial
position, net of transaction costs.
In 2019, on the issue of the convertible notes the fair value of the liability component was determined using the market rate for an equivalent non-convertible bond and this
amount was carried as a non-current liability on the amortised cost basis until the notes were extinguished. The remainder of the proceeds were allocated to the conversion
option and recognised in shareholders equity as a convertible note reserve, net of transaction costs. The interest on the convertible notes is expensed to profit or loss.
The company currently has no lines of credit provided for immediate use.
All borrowing costs are recognised as an expense in the period in which they are incurred.
DataDot Technology Limited Annual Report 2020Page 39
Notes to the Financial Statements
for the year ended 30 June 2020
16
Employee Benefits
Current
Employee benefits
Non Current
Employee benefits
Accounting treatment
2020
$
78,735
2019
$
80,872
10,161
8,504
Provision is made for the Group's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are
expected to be wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled.
The current provision for all employee benefits includes all unconditional entitlements where employees have completed the required period of service. The amount is
presented as current since the consolidated entity does not have unconditional right to defer settlement. However based on past experience, the consolidated entity does
not expect all employees to take the full amount of accrued annual and long service leave within the next twelve months.
(i) Wages, salaries and annual leave
Liabilities for wages and salaries, including non‑monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in
provisions in respect of employees’ service up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.
(ii) Long service leave
The liability for long service leave is recognised 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, experience of employee departures, and
periods of service. Expected future payments are discounted using market yields at the reporting date on high quality Australian corporate bonds with terms to maturity and
currencies that match, as closely as possible, the estimated future cash outflows.
17
Provisions
Current
Lease make good
Other provisions
2020
$
-
7,105
7,105
2019
$
49,892
31,532
81,424
Other provisions
A provision of $7,105 (2019 : $9,250) estimating potential amounts payable under an agreement with an Australian motor vehicle distributor where DataDot has agreed to
remit the theft excess (to a maximum of $800) payable by automobile owners in the event that vehicles are stolen and remain unrecovered (subject to conditions) is included
in other provisions.
Accounting treatment
Lease make good
During the year, the company moved premises from Frenchs Forest in Australia to Brookvale in Australia. In accordance with the lease agreement with the owner of
DataDot's facilities in Frenchs Forest, DataDot restored the leased premises to its original condition at the end of the lease term, or negotiated a reduced scope of works with
the landlord and or the incoming tenant. The provision for make good that was available at 30 June 2019 has been fully utilised or written back to the extent that it was not
needed.
Movements in provisions
The Lease Make Good provision of $49,892 at 30 June 2019 has been reduced to nil as make good works were performed and the unused balance was written back to the
profit and loss account. Claims for $2,145 were made against the motor vehicle warranty provision during the year. The Warranty Reserve provision of $22,282 established
in FY 2019 in relation to a potential customer claim was written back due to its not being required.
Provisions are recognised when DataDot has a present obligation (legal or constructive) when, as a result of a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the statement of financial
position date using a discounted cash flow methodology. The risks specific to the provision are factored into the cash flows and as such a risk‑free government bond rate
relative to the expected life of the provision is used as a discount rate. If the effect of the time value of money is material, provisions are discounted using a current pre‑tax
rate that reflects the time value of money and the risks specific to the liability. The increase in the provision resulting from the passage of time is recognised in finance costs.
DataDot Technology Limited Annual Report 2020Page 40
Notes to the Financial Statements
for the year ended 30 June 2020
18
Other Liabilities
Current
Deferred income
Revenue received in advance
Other Current Liabilities
Non-Current
Other liabilities
Property and Equipment Leases
Deferred income
19
Issued capital
Issued capital at beginning of financial period
Less Shares Cancelled during the year:
Shares issued or under issue during the year :
Share placement
Shares under the Rights Issue
Share issue costs
Issued capital at the end of the financial period
There is no current on-market share buy-back.
Ordinary shares
2020
$
64,699
21,635
40,639
126,973
-
411,856
-
411,856
2019
No
2019
$
120
43,539
43,659
120
-
-
120
2019
$
810,606,351
39,692,526
-
-
-
-
-
-
2020
No
2020
$
810,606,351
(16,126,414)
39,692,526
0
205,201,578
261,027,836
845,535
1,044,111
(24,644)
1,260,709,351
41,557,528
810,606,351
39,692,526
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the
shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital. On a show of hands every member
present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.
Capital Management
When managing capital, management's objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for
other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the entity. The capital risk management policy
remains unchanged from 30 June 2019 Annual Report.
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds.
20
Reserves
Foreign currency translation reserve
2020
$
(1,729,745)
2019
$
(1,730,988)
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.
Employee equity benefits reserve
Balance at beginning of financial year
Movement in share based payments
Employee equity benefits reserve
398,220
355,197
5,376
403,596
43,023
398,220
The employee equity benefits reserve is used to record the value of share based payments provided to employees, including KMP, as part of their remuneration. Refer to
Note 24.
Other Reserves
Balance at beginning of financial year
Movement in Convertible Note Reserve
(583,454)
(678,623)
(95,169)
(678,623)
95,169
(583,454)
This reserve is used to record the differences which may arise as a result of transactions with non-controlling interests that do not result in a loss of control. This reserve is
also used to record the equity residual differences on convertible notes, net of transaction costs.
Total Reserves
(2,004,772)
(1,916,222)
DataDot Technology Limited Annual Report 2020Page 41
Notes to the Financial Statements
for the year ended 30 June 2020
21
Commitments
Operating lease commitments
Committed at the reporting date and recognised as liabilities, payable:
Within one year
One to five years
Refer to note 28 for information on leases for 2020.
Remuneration commitments
Commitments for the payment of salaries and other remuneration under long term employment contracts in existence at the
reporting date but not recognised as liabilities.
Minimum remuneration payments payable:
Within one year
2020
$
40,780
411,836
452,616
2019
$
224,502
298,259
522,761
135,000
113,558
22
Contingent Liabilities
Guarantees
DataDot has issued bank guarantees of $34,375 (2019: $49,500). No liability was recognised by DataDot in relation to the bank guarantee as the fair value of the guarantee is
immaterial.
Theft deterrent system rebate contingencies
Under an agreement with an Australian motor vehicle distributor, DataDot has agreed to remit the theft excess (to a maximum of $800) payable by automobile owners in the
event that vehicles are stolen and remain unrecovered (subject to certain conditions). A provision has been made (refer Note 17 Provisions). The estimate is based on the
probability of vehicles being stolen and unrecovered and claims being made. Should these estimates prove incorrect then an adjustment may have to be made to either
increase or decrease the amount due and payable.
Tax related contingencies - transfer pricing
DataDot has offshore operations in the United Kingdom and has recently closed its operations in United States but retains the business which it services out of Australia.
There are intra Group transactions, which include DataDot and its subsidiaries. These transactions are on an arm's length basis and are conducted at normal market prices
and on normal commercial terms.
23
Subsidiaries and Associated Entities
Principal place of business/
Country of Incorporation
Ownership interest %
2020
2019
Ultimate parent entity
DataDot Technology Limited
Wholly-owned subsidiaries
DataDot Technology (Australia) Pty Limited
DataDot Technology USA Inc.
DataTraceID (USA) Inc
DataDot Technology (UK) Limited
DataTraceID Europe Limited
DataTraceID Pty Limited
Live Data Pty Limited (De registered 6 May 2020)
Associated entities
Brandlok Brand Protection Solutions Pty Limited
Australia
Australia
USA
USA
UK
UK
Australia
Australia
Australia
100
100
100
100
100
100
20
100
100
100
100
100
100
100
20
DataDot Technology Limited Annual Report 2020Page 42
Notes to the Financial Statements
for the year ended 30 June 2020
24
Key Management Personnel Disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below:
Remuneration of key management personnel :
Short term employee benefits
Post employment benefits
Long term benefits
Share based payments (Note 27)
25
Related Party Transactions
Parent entity
DataDot Technology Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 23.
Associated entities
2020
$
633,809
38,416
-
2,688
674,913
2019
$
968,971
62,258
62,638
28,231
1,122,098
In 2019, DataTrace offset the fully provided for outstanding Brandlok balance of $55,000 from 2018 against the income in advance of $51,000 received in 2017.
Key management personnel
Disclosures relating to remuneration for key management personnel are set out in Note 24 and the remuneration report in the directors' report.
Other transactions during the year are:
Interest Paid by the company on Convertible Notes
Rent received on premises leased by the group
Reimbursement of expenses incurred in the normal course of business
Payment by the Group of Vault Licence Fees
Amounts owing from / (to) Directors and Director Related entities at balance date: (since received)
Amounts owing to Property Vault International Pty Ltd (since paid)
2020
27,238
11,226
146,400
9,041
2,826
12,496
2019
-
-
-
-
-
-
26
Financial Risk Management
DataDot's principal financial instruments comprise finance leases and cash and short term deposits. The main purpose of these financial instruments is to raise finance for
DataDot’s operations. DataDot has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. It is, and
has been throughout the period under review, DataDot’s policy that no trading in financial instruments shall be undertaken. The main risks arising from DataDot’s financial
instruments are cash flow interest rate risk, liquidity risk, foreign currency risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they
are summarised below.
Risk Exposures and Responses
The main risks DataDot is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk and foreign currency risk.
Interest Rate Risk
The group is not subject to any interest rate risk. Convertible notes previously issued at a fixed interest rate have been redeemed.
Foreign exchange risk
As a result of significant investment in wholly owned controlled entities in the United States and the United Kingdom, DataDot’s statement of financial position can be
affected significantly by movements in the exchange rates. DataDot does not seek to hedge this exposure.
DataDot also has transactional currency exposures. Such exposure arises from sales or purchases by an operating unit in currencies other than the unit’s functional currency.
As each of the individual entities within the Group primarily transact in their own respective currency, foreign currency risk is deemed to be minimal.
DataDot does require its operating units to use forward currency contracts to eliminate the currency exposures on any individual transactions in excess of $100,000 for which
payment is anticipated more than one month after DataDot has entered into a firm commitment for a sale or purchase. There has been no such transaction during the year.
It is DataDot's policy not to enter into forward contracts until a firm commitment is in place and to negotiate the terms of the hedge derivatives to exactly match the terms of
the hedged item to maximise hedge effectiveness.
DataDot Technology Limited Annual Report 2020Page 43
Notes to the Financial Statements
for the year ended 30 June 2020
26
Financial Risk Management (continued)
Price risk
DataDot's exposure to commodity price risk is minimal.
Credit risk
DataDot trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it DataDot's policy to securitise its trade and other receivables.
It is DataDot's policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an
ongoing basis with the result that DataDot's exposure to bad debts is not significant. There has been no change to credit risk since initial recognition.
Liquidity risk
Liquidity risk arises from the financial liabilities of DataDot and DataDot’s subsequent ability to meet their obligations to repay their financial liabilities as and when they fall
due.
DataDot’s objective is to maintain a balance between continuity of funding and flexibility through the use of loans, convertible notes, finance leases and hire purchase
contracts. DataDot manages liquidity risk by monitoring cash flow and maturity profiles of financial assets and liabilities.
Maturity analysis of financial assets and liabilities based on management's expectations
The risk implied from the values shown in the tables below, reflects a balanced view of cash inflows and outflows. Leasing obligations, trade payables and other financial
liabilities mainly originate from the financing of assets used in our ongoing operations such as plant and equipment and investments in working capital (e.g. inventories and
trade receivables). These assets are considered in DataDot’s overall liquidity risk.
Consolidated entity 30 June 2020
Financial Assets
Cash and cash equivalents
Trade and other receivables
Grant receivable
Financial Liabilities
Trade and other payables
Net maturity
Consolidated entity 30 June 2019
Financial Assets
Cash and cash equivalents
Trade and other receivables
Grant receivable
Financial Liabilities
Trade and other payables
Net maturity
Remaining contractual maturities
Within 1 Year
$
1,005,325
777,179
214,394
1,996,898
446,980
1,549,918
Within 1 Year
$
194,752
407,786
47,700
650,238
712,997
(62,759)
The tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of
financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as
remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
DataDot Technology Limited Annual Report 2020Page 44 Notes to the Financial Statements
for the year ended 30 June 2020
26
Financial Risk Management (continued)
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - fixed rate
Convertible notes payable
Total non-derivatives
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - fixed rate
Convertible notes payable
Total non-derivatives
Weighted
average interest
rate
1 year or less
Between 1 and
2 years
Remaining
contractual
maturities
%
$
$
$
-
446,980
8%
-
446,980
-
-
-
446,980
-
446,980
Weighted
average interest
rate
%
1 year or less
$
Between 1 and
2 years
$
Remaining
contractual
maturities
$
-
8%
712,997
-
712,997
46,323
759,320
572,181
572,181
618,504
1,331,501
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair values.
27
Option and Share Based Payments
Expenses arising from share based payments to Key Management Personnel :
Executive options issued at 1.1c to Andrew Winfield 11/10/16 expiring 01/07/2019
CEO Share Loan Scheme for Temogen Hield issued @ 2.7c
CFO Share Loan Scheme for David Williams issued @ 2.7c
Share Loan Scheme for Steve Delepine issued @ 2.7c
Total expense arising from options and share based payments during the period
2020
$
-
-
2,688
2,688
5,376
2019
$
12,105
2,688
6,719
6,719
28,231
40,316,032 shares were issued to KMP in August 2017 as part of the modification to the share based payment scheme. These shares were valued at $0.001 for shares issued
to the CEO / Managing Director and $0.002 for shares issued to other KMP. Calculations were based on a Black Scholes valuation methodology, using a risk free rate of
2.565%, the DDT share price of $0.005 and the share issue and loan price of $0.027. The charge to the profit and loss in FY2020 is the final Share Based Payment attributable
to these shares.
No shares were issued uder the Share Loan Scheme during the current financial year or the previous finacial year.
Movements in share rights for the financial year
Balance at the beginning of the period
Shares issued
Rights expired/cancelled
Balance at the end of the period
Movements in share options for the financial year
Balance at the beginning of the period
Options issued
Options expired
Balance at the end of the period
2020
No
2,000,000
-
-
2,000,000
2020
No
9,000,000
-
(9,000,000)
-
2020
Avg issue $
0.0300
-
-
2020
Avg issue $
0.0538
-
-
2019
No
2,000,000
-
-
2,000,000
2019
No
13,000,000
-
(4,000,000)
9,000,000
2019
Avg issue $
0.0300
-
-
2019
Avg issue $
0.0372
-
-
DataDot Technology Limited Annual Report 2020Page 45
Notes to the Financial Statements
for the year ended 30 June 2020
27
Option and Share Based Payments (continued)
Share rights are granted by the Board, under the DataDot Technology Executive Share Rights Plan, on such terms and conditions as the Board determines, to eligible
employees. A grant of share rights does not confer any right or interest in shares until all terms and conditions have been satisfied. They confer no voting rights. At pre-
determined vesting intervals, subject to grantees satisfying the terms and conditions of grant, including continuous employment, each share right provides an entitlement to
the issue of one ordinary share in the Company.
The 9,000,000 expired share options related to employees who have left the company and were forfeited - Andrew Winfield 6,000,000 and Laura Whetstone 3,000,000.
The options are issued for nil consideration.
No options were issued in FY19 and FY20 and all Options previously issued have now expired.
Accounting treatment
Share based payment transactions - when applicable
Equity settled transactions:
No new Share Based Payments have been provided by DataDot during the year. A legacy amount of $5,376 has been taken up as the final cost associated
with the the now terminated Share Issue and Loan Scheme.
DataDot had a share-based payments scheme whereby the company provided benefits to its employees (including KMP) in the form of share based payments, whereby
employees render services in exchange for rights over shares (equity‑settled transactions).
The Executive Share Rights Plan (ESRP) (when operative) provides benefits to senior executives of DataDot.
The cost of equity‑settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted.
For share options granted during any year, the cost of equity-settled transactions are measured at fair value on the grant date. Fair value is independently determined using
the 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, together with non-vesting conditions that do not
determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.
For shares issued under the share loan scheme during any year, the cost of equity-settled transactions are measured at fair value on the grant date. Fair value is
independently determined using the Black-Scholes option pricing model that takes into account the exercise price, the term of the scheme, 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 scheme, together with
non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any
other vesting conditions.
The cost of equity settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions
are fulfilled (the vesting period), ending on the date on which the relevant employees become fully entitled to the award (the vesting date).
At each subsequent reporting date until vesting, the cumulative charge to the statement of comprehensive income is the product of:
(i) The grant date fair value of the award.
(ii)
The current best estimate of the number of awards that will vest, taking into account such factors as the likelihood of employee turnover during
the vesting period and the likelihood of non market performance conditions being met.
(iii) The expired portion of the vesting period.
The charge to the statement of profit or loss for the period is the cumulative amount as calculated above less the amounts already charged in previous periods. There is a
corresponding entry to equity.
Until an award has vested, any amounts recorded are contingent and will be adjusted if fewer awards vest than were originally anticipated. Any award subject to a market
condition is considered to vest irrespective of whether or not that market condition is fulfilled, provided that all other conditions are satisfied.
If the terms of an equity settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. An additional expense is recognised for
any modification that increases the total fair value of the share based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of
modification.
If an equity settled award is cancelled, it is treated as if it had expired on the date of cancellation. However, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described
in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (see Note 8).
DataDot Technology Limited Annual Report 2020Page 46 Notes to the Financial Statements
for the year ended 30 June 2020
28
Leases
The Group have applied AASB 16 using the modified retrospective (cumulative catch-up) method and therefore the comparative information has not been restated and
Company as a lessee
The Group have leases over a range of assets including land and buildings and equipments.
Information relating to the leases in place and associated balances and transactions are provided below.
Terms and conditions of leases
The initial term of the building leases for the corporate office, factory and warehouse in Brookvale expires in December 2022. They have 3 year option extension at the
discretion of the Group. The rentals are subject to a fixed increase of 3% for the initial term on the factory and warehouse and 8% and 7% on the upstairs lease.
The term on the UK office, factory and warehouse lease commenced in June 2018 and expires in June 2023. The rentals are fixed and there is no option in the lease to
extend.
The equipment leases are for various items of plant and equipment. 5 year terms commenced in July 2019 and December 2019 respectively. The lease payments are fixed.
Right-of-use assets
Year ended 30 June 2020
Additions to right-of-use assets
Amortisation charge
Balance at end of year
Lease liabilities
Buildings
$
116,544
29,136
145,679
Plant and
Equipment
$
24,124
2,090
26,214
Total
$
140,668
31,226
171,894
The maturity analysis of lease liabilities based on contractual undiscounted cash flows is shown in the table below:
2020
Lease liabilities
Extension options
< 1 year
1 - 5 years
> 5 years
$
$
43,475
446,085
$
-
Total
undiscounted
lease liabilities
$
489,560
Lease liabilities
included in this
Statement Of
Financial Position
$
452,616
A number of the building leases contain extension options which allow the Group to extend the lease term by up to twice the original non-cancellable period of the lease.
The Group includes options in the leases to provide flexibility and certainty to the Group operations and reduce costs of moving premises and the extension options are at
At commencement date and each subsequent reporting date, the Group assesses where it is reasonably certain that the extension options will be exercised.
Statement of Profit or Loss and Other Comprehensive Income
The amounts recognised in the statement of profit or loss and other comprehensive income relating to leases where the Group is a lessee are shown below:
Interest expense on lease liabilities
Expenses relating to leases of low-value assets
Amortisation of right-of-use assets
Statement of Cash Flows
Total cash outflow for leases
2020
$
1,301
-
112,084
113,385
56,698
Accounting treatment
For comparative year
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in the
Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses on a straight-line basis over the life of
For current year
At inception of a contract, the Group assesses whether a lease exists - i.e. does the contract convey the right to control the use of an identified asset for a period of time in
This involves an assessment of whether:
- The contract involves the use of an identified asset - this may be explicitly or implicitly identified within the agreement. If the supplier has a substantive substitution right
- The Group has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use.
- The Group has the right to direct the use of the asset i.e. decision making rights in relation to changing how and for what purpose the asset is used.
Lessee accounting
The non-lease components included in the lease agreement have been separated and are recognised as an expense as incurred.
At the lease commencement, the Group recognises a right-of-use asset and associated lease liability for the lease term. The lease term includes extension periods where the
The right-of-use asset is measured using the cost model where cost on initial recognition comprises of the lease liability, initial direct costs, prepaid lease payments, estimated
The right-of-use asset is depreciated over the lease term on a straight line basis and assessed for impairment in accordance with the impairment of assets accounting policy.
The lease liability is initially measured at the present value of the remaining lease payments at the commencement of the lease. The discount rate is the rate implicit in the
Subsequent to initial recognition, the lease liability is measured at amortised cost using the effective interest rate
Where the lease liability is remeasured, the right-of-use asset is adjusted to reflect the remeasurement or is recorded in profit or loss if the carrying amount of the right-of-
use asset has been reduced to zero.
Exceptions to lease accounting
The Group elected to apply the exceptions to lease accounting for both short-term leases (i.e. leases with a term of less than or equal to 12 months) and leases of low-value
DataDot Technology Limited Annual Report 2020Page 47
Notes to the Financial Statements
for the year ended 30 June 2020
29
Parent Entity Information
The following information has been extracted from the books and records of the parent, DataDot Technology Limited and has been prepared in accordance with Accounting
Standards.
Statement of financial position
Current assets
Non current assets
Total assets
Current liabilities
Non current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Reserves
Total equity
Statement of profit or loss and other comprehensive income
Profit / (Loss) after income tax
Total comprehensive income
2020
$
1,964,427
5,857,662
7,822,089
256,245
4,834,638
5,090,883
2019
$
831,744
3,279,235
4,110,979
403,988
5,192,622
5,596,610
41,557,529
(40,054,229)
1,227,906
2,731,206
39,692,526
(41,340,443)
176,713
(1,471,204)
972,600
(2,263,896)
972,600
(2,263,896)
Parent Entity Commitments and Guarantees
DataDot has issued a bank guarantee of $34,375 (2019: $49,500). No liability was recognised by DataDot in relation to the bank guarantee as the fair value of the guarantee is
immaterial.
Remuneration commitments
Commitments for the payment of salaries and other remuneration under long term employment contracts in existence at the
reporting date but not recognised as liabilities.
Minimum remuneration payments payable
Within one year
99,976
2019
2020
135,000
$
$
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
Capital commitments
The parent entity had no capital commitments for plant and equipment as at 30 June 2020 and 30 June 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity as disclosed throughout the report.
30
Events after the reporting period
No matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the operations of the Group, the results of its operations or
the state of affairs in future financial years.
DataDot Technology Limited Annual Report 2020Page 48
Notes to the Financial Statements
for the year ended 30 June 2020
31
Summary of other significant accounting policies
(a) Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent
entity is disclosed in Note 29.
(b) Principles of consolidation
Interests in associates and joint ventures are equity accounted and are not part of the Consolidated Group.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. In preparing the
consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra group transactions have been
eliminated in full.
Subsidiaries are fully consolidated from the date on which control is obtained by DataDot and cease to be consolidated from the date on which control is transferred from
DataDot.
Profits / Losses are attributed to the non‑controlling interest even if that results in a deficit balance.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest results in an adjustment between the carrying
amounts of the controlling interest 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 the consideration paid or received is recognised as a separate reserve within equity attributable to owners of DataDot Technology Limited.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary
together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair
value of any investment retained together with any gain or loss in profit or loss.
(c) Foreign currency translation
Functional and presentation currency
Both the functional and presentation currency of DataDot Technology Limited and its Australian subsidiaries is Australian dollars ($). Each entity in DataDot determines its
own functional currency and items included in the financial statements of each entity are measured using that functional currency.
The functional currencies of the overseas subsidiaries are:
Name of overseas subsidiaries
DataDot Technology USA Inc
DataDot Technology (UK) Ltd
Functional currency
United States Dollar (US$)
Great Britain Pound (£)
Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at balance date.
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.
Non‑monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
DataDot Technology Limited Annual Report 2020Page 49 Notes to the Financial Statements
for the year ended 30 June 2020
31
Summary of other significant accounting policies (continued)
(c) Foreign currency translation (continued)
Translation of Group Companies functional currency to presentation currency
The results of the overseas subsidiaries are translated into Australian dollars (presentation currency) as at the date of each transaction. Assets and liabilities are translated at
exchange rates prevailing at reporting date.
As at the reporting date the assets and liabilities of these subsidiaries are translated into the presentation currency of DataDot Technology Limited at the rate of exchange
ruling at the statement of financial position date and their statements of comprehensive income are translated at the average exchange rate for the year.
Exchange variations resulting from the translation are recognised in the foreign currency translation reserve in equity. These variations are recognised in the statement of
comprehensive income in the period.
(d) Revenue recognition
The Group has adopted application of AASB 15 “Revenue from contracts with customers” from 1 July 2018. The core principle of the standard is that the Group 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.
Determining the transaction price
The Group’s revenue is derived from fixed price agreements and therefore the amount of revenues to be earned from each agreement is determined by reference to those
fixed prices. There is no variable consideration with these agreements.
Allocation of amounts to performance obligations
For most agreements, there is only one performance obligation and a fixed unit price for the good or service provided. As such, there is no judgement involved in the
allocation of amounts specific performance obligations. In those instances where there is more than one performance obligation, the unit price is clearly defined and is
allocated against the specific performance obligation. Some goods sold by the Group include warrantees which require the Group to either replace or mend a defective
product during the warranty period if the goods fail to comply with agreed-upon specifications. In accordance with AASB 15, such warranties are not accounted for as
separate obligations and hence no revenue is allocated to them.
(i) Sale of goods
Sale of goods revenue is recognised at a point in time when the Group have met all of their performance obligations including delivery. There is limited judgement in
identifying the point control passes; once the goods have left the warehouse or are delivered, depending on the type of good. The group will have a present right to payment
and retains none of the significant risk and rewards of the goods.
(ii) Rendering of services
Revenue from the rendering of a service is recognised on an over time basis based on stage of completion of the contract.
(iii) Royalties
Revenue is recognised at a point in time when the underlying goods are sold. Fixed rate manufacturing royalties are recognised over the period of the underlying agreement.
(iv) Licence fee
Licence fees are recognised over time in line with the invoice period. Performance obligations are satisfied over time. This is a faithful depiction of the transfer of services, as
customers simultaneously receive and consume services provided over the invoiced period.
(v) Interest income
Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest
income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
DataDot Technology Limited Annual Report 2020Page 50 Notes to the Financial Statements
for the year ended 30 June 2020
31
Summary of other significant accounting policies (continued)
(e) Adoption of new accounting standards
Financial statement impact of adoption of AASB 16
The Group has recognised right-of-use assets of $116,544 at 1 July, 2019, for leases previously classified as operating leases.
The weighted average lessee's incremental borrowing rate applied to lease liabilities at 1 July, 2019 was 8%.
Operating lease commitments at 30 June 2019 financial statements
Discounted using the incremental borrowing rate at 1 July, 2019
Add:
Finance lease liabilities
Variable lease payments linked to an index
Less:
Leases for low value assets included in commitments note
Lease liabilities recognised at 1 July, 2019
$
-
-
116,544
-
-
116,544
AASB 2020-4 Amendments to Australian Accounting Standards – COVID-19-Related Rent Concessions
In the current year, the directors have elected to apply AASB 2020-4 Amendments to Australian Accounting Standards – COVID-19 Related Rent Concessions before its
mandatory application date. AASB 2020-4 amends AASB 16 Leases and is effective for annual periods that begin on or after 1 June 2020.
COVID-19 has led many lessors to provide relief to lessees by deferring or relieving them of amounts that would otherwise be payable. In some cases, this is through
negotiation between the parties, but can also be as a consequence of a government encouraging or requiring that the relief be provided.
AASB 16 requires lessees to assess whether changes to lease contracts are lease modifications as this term is defined in the Standard and, if so, the lessee must remeasure
the lease liability using a revised discount rate.
The amendment is intended to provide practical relief to lessees in accounting for rent concessions arising as a result of COVID-19, by including an additional practical
expedient in AASB 16 that permits entities to elect not to account for some or all of these rent concessions as modifications.
The practical expedient applies only to rent concessions occurring as a direct consequence of COVID-19 and only if all of the following conditions are met:
- The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately
preceding the change
- Any reduction in lease payments affects only payments originally due on or before 30 June 2021 (a rent concession would meet this condition if it results in reduced lease
payments on or before 30 June 2021 and increased lease payments that extend beyond 30 June 2021)
- There is no substantive change to other terms and conditions of the lease. The Group has elected to apply the practical expedient to all of the COVID-19-related rental
concessions it has obtained as lessee.
Impact on accounting for changes in lease payments applying the exemption
In applying the practical expedient the Group has:
- Applied the expedient to the Sydney lease only which commenced during the year. No concessions have yet been granted on the UK lease.
- Recalculated the NPV of the new lease payment cash flows and reassessed the NPV of the associated lease liabilities, consistent with the requirements of paragraph 9.3.3.1
of AASB9 Financial Instruments.
- Recognised a change in lease payments that reduces payments in the period to 30 June 2020 and 30 June 2021 by $152,313, and an equivalent increase in payments in the
period to 30 June 2022 by $152,313, such that there is no change to the overall consideration.
In accordance with the transitional provisions, the Group has applied the amendment retrospectively in accordance with AASB 108 Accounting Policies, Changes in Estimates
and Errors, and has not restated prior period figures. As the rental concessions have arisen during the current financial period and only on leases that commenced in the
current finnancial period, there is no retrospective adjustment to opening balance of retained earnings at 1 July 2019 on initial application of the amendment.
Financial instruments
Financial instruments are recognised initially on the date that the Group becomes party to the contractual provisions of the instrument.
On initial recognition, all financial instruments are measured at fair value plus transaction costs.
Financial Assets
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification
On initial recognition, the Group classifies its financial assets into the following categories, those measured at:
- amortised cost
- fair value through other comprehensive income - equity instrument (FVOCI - equity)
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets.
DataDot Technology Limited Annual Report 2020Page 51
Notes to the Financial Statements
for the year ended 30 June 2020
Amortised cost
Assets measured at amortised cost are financial assets where:
- the business model is to hold assets to collect contractual cash flows; and
- the contractual terms give rise on specified dates to cash flows are solely payments of principal and interest on the principal amount outstanding.
The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the statement of financial position.
Subsequent to initial recognition, these assets are carried at amortised cost using the effective interest rate method less provision for impairment.
Interest income, foreign exchange gains or losses and impairment are recognised in profit or loss. Gain or loss on derecognition is recognised in profit or loss.
Impairment of financial assets
Impairment of financial assets is recognised on an expected credit loss (ECL) basis for the following assets:
- financial assets measured at amortised cost; and
Credit losses are measured as the present value of the difference between the cash flows due to the Company in accordance with the contract and the cash flows expected
to be received. This is applied using a probability weighted approach.
Trade receivables
Impairment of trade receivables and contract assets have been determined using the simplified approach in AASB 9 which uses an estimation of lifetime expected credit
losses. The Group have determined the probability of nonpayment of the receivable and contract asset and multiplied this by the amount of the expected loss arising from
default.
The amount of the impairment is recorded in a separate allowance account with the loss being recognised in finance expense. Once the receivable is determined to be
uncollectable then the gross carrying amount is written off against the associated allowance.
Where the Group renegotiates the terms of trade receivables due from certain customers, the new expected cash flows are discounted at the original effective interest rate
and any resulting difference to the carrying value is recognised in profit or loss.
Other financial assets measured at amortised cost
Impairment of other financial assets measured at amortised cost are determined using the expected credit loss model in AASB 9. On initial recognition of the asset, an
estimate of the expected credit losses for the next 12 months is recognised. Where the asset has experienced significant increase in credit risk then the lifetime losses are
estimated and recognised.
Financial liabilities
The Group measures all financial liabilities initially at fair value less transaction costs, subsequently financial liabilities are measured at amortised cost using the effective
interest rate method.
The financial liabilities of the Group comprise trade payables and convertible notes.
(f) Critical accounting estimates and judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial
statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases
its judgements and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances, the result of which form the basis of
the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and
conditions.
Impairment of non‑ financial assets
DataDot assesses impairment of all assets at each reporting date by evaluating conditions specific to DataDot and to the particular asset that may lead to impairment. These
include product and manufacturing performance, technology, economic and political environments and future product expectations. If an impairment trigger exists the
recoverable amount of the asset is determined. Given the current uncertain economic environment management considered that the indicators of impairment were
Capitalised development costs
Development costs are only capitalised by DataDot when it can be demonstrated that the technical feasibility of completing the intangible asset is valid so that the asset will
be available for use or sale.
DataDot Technology Limited Annual Report 2020Page 52 Notes to the Financial Statements
for the year ended 30 June 2020
Taxation
DataDot's accounting policy for taxation requires management's judgement as to the types of arrangements considered to be a tax on income in contrast to an operating
cost. Judgement is also required in assessing whether deferred tax assets and certain deferred tax liabilities are recognised on the statement of financial position. Deferred
tax assets, including those arising from unrecouped tax losses, capital losses and temporary differences, are recognised only where it is considered more likely than not that
they will be recovered, which is dependent on the generation of sufficient future taxable profits.
Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on management's estimates of future cash flows. These depend on
estimates of future production and sales volumes, operating costs, restoration costs, capital expenditure, dividends and other capital management transactions. Judgements
are also required about the application of income tax legislation. These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that
changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognised on the statement of financial
position and the amount of other tax losses and temporary differences not yet recognised. In such circumstances, some or all of the carrying amounts of recognised deferred
tax assets and liabilities may require adjustment, resulting in a corresponding credit or charge to the statement of profit or loss.
Share‑ based payment transactions
DataDot measures the cost of equity‑settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The
accounting estimates and assumptions relating to equity‑settled share‑based payments would have no impact on the carrying amounts of assets and liabilities within the next
annual reporting period but may impact expenses and equity.
Make good provisions
A provision has been made for the present value of anticipated costs of future restoration of leased manufacturing premises. The provision includes future cost estimates
associated with factory dismantling and make good of the office environment.
Estimation of useful lives of assets
The estimation of the useful lives of property, plant and equipment and finite intangible assets has been based on historical experience as well as lease terms (for leased
equipment). In addition, the condition of the assets is assessed at least once per year and considered against the remaining useful life. Adjustments to useful life are made
when considered necessary.
Employee benefits provision
As discussed in Note 16, the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present
value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimate of attrition
rates and pay increases through promotion and inflation have been taken into account.
DataDot Technology Limited Annual Report 2020Page 53 DIRECTORS’ DECLARATION
In the directors' opinion:
•
the attached financial statements and notes thereto comply with the Corporations Act 2001, the
Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements;
•
•
•
the attached financial statements and notes thereto comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board as described in note 1 to the
financial statements;
the attached financial statements and notes thereto give a true and fair view of the consolidated
entity's financial position as at 30 June 2020 and of its performance for the financial year ended on that
date;
there are reasonable grounds to believe that the company will be able to pay its debts as and when
they become due and payable; and
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the
Corporations Act 2001.
On behalf of the directors
Ray Carroll
Chairman
DataDot Technology Limited
27 August 2020
DataDot Technology Limited Annual Report 2020Page 54
Audit Only
ABN 59 288 963 259
Level 7
91 Phillip Street
Parramatta NSW 2150
Tel: +61 2 8893 1214
Fax: +61 2 9084 2297
www.auditonly.com.au
Independent Auditor’s Report to the Members of
DataDot Technology Limited
Opinion
We have audited the financial report of DataDot Technology Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2020, 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, and notes to the
financial statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of DataDot Technology Limited, is in accordance with
the Corporations Act 2001, including:
(a) giving a true and fair view of the company's financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Company in accordance with the Corporations Act 2001 and the
ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of
Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. In addition to the matter described in the Material uncertainty related to going
concern section, we have determined the matters described below to be the key audit matters to be
communicated in our report.
Liability limited by a scheme approved under Professional Standards Legislation.
Page 55
Revenue Recognition
Key audit matter
Refer to Note 2 of the financial report and Note 31
for accounting policy.
Revenue is a key driver to the Group For the year
ended 30 June 2020
the Group recognised
$3,774,569 (2019: $3,279,579).
The Group’s management focuses on revenue as a
key driver by which the performance of the Group
is measured.
This is a key audit matter due to the differing
revenue streams and total balance of the revenue.
How the matter was addressed in our audit
Our audit procedures included, amongst others;
•
Assessing the Group's accounting policy for
revenue to ensure it has been correctly
formulated in accordance with the Australian
Accounting Standards, with particular focus
on the adoption of AASB 15;
•
•
•
analytical
Performing
to
understand movements and trends in revenue
for comparisons against expectations;
procedures
Checking a sample of revenue transactions to
evaluate whether they were appropriately
recorded as revenue ensuring the amounts
recorded agreed to supporting evidence; and
Performing cut-off testing to ensure that
revenue transactions around year end have
been recorded in the correct reporting period.
Going Concern
Key audit matter
As set out in Note 1 of the financial report the
directors’ have assessed the ability of the Group to
continue as a going concern and therefore the
the
appropriateness of
financial report on a going concern basis.
the Group preparing
This is a key audit matter due to historical
operating losses of the Group and the deficiency in
operating cashflows.
How the matter was addressed in our audit
Our audit procedures included, amongst others;
•
Reviewing the Group's assessment of the
appropriateness of the going concern basis of
accounting;
•
•
Performing procedures on the Group’s Board
approved budget for the year ended 30 June
the
2021,
assumptions driving the Group’s budget; and
including critical analysis of
Assessment of the Group’s liquidity position
as at 30 June 2020 and the cash needs flowing
from the 2021 forecast including sensitivity
analysis in relation to the expected 2021
results.
Other information
The directors are responsible for the other information. The other information comprises the information
contained in the Group’s Financial Report for the year ended 30 June 2020, but does not include the
Liability limited by a scheme approved under Professional Standards Legislation.
Page 56
financial report and our auditor’s report thereon, which we obtained prior to the date of this auditor’s report,
and the Annual Report, which is expected to be made available to us after that date.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
When we read the Annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the directors and will request that it is corrected. If it is not corrected,
we will seek to have the matter appropriately brought to the attention of users for whom our report is
prepared.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial report
that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors is responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern
basis of accounting unless the directors either intends to liquidate the Company or to cease operations, or
has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website (www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Liability limited by a scheme approved under Professional Standards Legislation.
Page 57
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 20 of the directors’ report for the year
ended 30 June 2020.
In our opinion, the Remuneration Report of Datadot Technology Limited, for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Andrew Hunt
Principal
Parramatta
27 August 2020
Liability limited by a scheme approved under Professional Standards Legislation.
Page 58
DataDot Technology Limited - ABN 54 091 908 726
Shareholder Information
ASX Additional Information
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below. This
information is effective as at 11 October 2020.
Corporate Governance Statement
The corporate governance statement is located on the Company’s website at the following URL
http://www.datadotdna.com/au/investors/corporate_governance/
Statement of Issued Shares
The total number of shareholders is 2,672. There are 1,260,709,351 ordinary fully paid shares listed on the Australian Securities
Exchange. The twenty largest shareholders hold 63.385% of issued capital.
Substantial shareholders
The number of substantial shareholders and their associates are set out below:
Shareholders
Brad Kellas
Appwam Pty Ltd
Patrix Holdings Pty Ltd
Number of shares
214,995,076
150,000,001
98,231,662
Voting rights
Ordinary Shares - On a show of hands, every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
Share Rights - No voting rights.
On-Market Buyback
There is no current on-market buyback.
Distribution of equity security holders
Holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,000 and over
Total
Shares
Share Rights
87
189
2193
1,438
765
2,672
1
1
Mr Patrick Raper holds 100% of share rights
The number of shareholders holding less than a marketable parcel of ordinary shares is 1,784
Securities exchange
The Company is listed on the Australian Securities Exchange.
Unquoted equity securities
Share Rights issued:
2,000,000
Voluntary escrow
No ordinary shares are under voluntary holding lock.
DataDot Technology Limited Annual Report 2020Page 59 Shareholder Information - continued
Twenty largest shareholders
Mr Bradley Charles Kellas
Appwam Pty Limited
Patrix Holdings Pty Ltd
Citicorp Nominees Pty Limited
Hamish Edward Elliot Brown
UBS Nominees Pty Ltd
Mr Collin Hwang
Mr Santo Carlini & Mrs Isabella Carlini
Mr Norman Colburn Mayne
Mr David Roger Lloyd
Ralcortec Pty Ltd
Mr David Williams
Mr Steve Delepine
Henta Pty Ltd