Annual Report 2021
Financial Year Ended 30 June 2021
ABN 54 091 908 726
Annual Report 2021
Contents
Chairman’s Review
Financial Report
Directors' Report
Remuneration report (audited)
Auditor's independence declaration
Consolidated financial statements
Consolidated statement of profitor loss
Consolidated statement of comprehensive income
Consolidated statement offinancial position
Consolidated statement of changesin equity
Consolidated statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor's report
Shareholder Information
Corporate Information
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ABN : 54 091 908 726
8 Ethel Ave
Brookvale, NSW, 2100
P : (02) 8977 4900
www.datadotdna.com
DataDot Technology LimitedAnnual Report 2021Page 1 Chairman’s Review
Dear Shareholders
I am pleased to present the Company’s 2021 Annual Report. I am also pleased to be able to report that this
year’s results confirm that the Board and Executive’s effort since FY 2019 to arrest almost a decade of decline
and return the Company to profitability is delivering for shareholders. The end of year Financial Report that was
released to the market on 23 August 2021 highlights the significant turnaround in the Company’s financial
performance that commenced in FY 2020 and has continued throughout FY 2021.
The key results for the year include:
•
•
•
•
•
A material increase in Royalties and Licence fees
A modest growth in total revenue
A material reduction in cost of goods sold and operating expenses
An increase of $1.1m in EBITDA
An increase of $1.2 m in Net Profit.
Revenue
EBITDA
2019
2020
2021
3,279,579
3,774,569
3,896,113
(1,757,295)
309,385
1, 494,733
Net Profit / (Loss) after tax
(3,119,910)
29,203
1,234,982
As a result of the profit earned during the FY 2021 year the net assets of the group have increased from
$1,911,863 at June 2020 to $3,173,457 at June 2021 with cash and cash equivalents available to the group of
$2,328,358. Outside of standard creditor’s trading terms, the Company remains debt free and now has a sound
working capital base.
As we set out in the August Directors’ Report, we are focusing our efforts for the balance of FY 2022 on securing
new revenue streams. This includes growing PropertyVAULT revenue via its suite of products and services,
pursuing potential new clients in the European automotive sector, and other relevant opportunities. Royalties
and License Fees form a significant part of the Company’s business model. Revenue from these sources has
made a significant contribution to the company’s turnaround and we will continue to work closely with our
valued distributors and licensees to secure new opportunities for growth in their home markets.
The Board is cognisant of its responsibility to effectively manage the Company’s growing cash reserve to enable
investment in future growth opportunities and/or capital management activities to enhance shareholder value.
Given the priority of revenue growth for the medium term, and acknowledging there are still some uncertainties
in respect to the impacts of the Covid pandemic on our key markets, the Board has resolved that for the
remainder of FY2022 it will continue its focus on investment in new revenue generating activities while
maintaining the long-term financial stability of the group.
Your directors are pleased with the significant progress that has been made towards delivering our vision of
creating a sustainable and profitable business that will provide a solid financial basis to support future growth.
Ray Carroll
Chairman
15 October 2021
DataDot Technology LimitedAnnual Report 2021Page 2 Directors' Report
for the year ended 30 June 2021
Directors
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 2021.
The following persons were directors of DataDot during the financial year and up to the date
of this report, unless otherwise stated:
- Ray Carroll
- Brad Kellas
- David Lloyd
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,
VAULT asset protection products and services
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.
(b)
(c)
There has been no significant change in the nature of the Company’s 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 that for the financial year ending 30 June 2021 the Group
has earned a net Profit After Tax of $1,234,982.
This is a significant improvement when compared to the $29,203 net Profit in FY 2020 and the
loss of $2.3m in 2019.
The improvement has been delivered by a combination of factors; mostly as a result of the Board
and Executive’s extensive restructuring activities since assuming control of the Company in May
2019 and being positioned to capitalise on revenue opportunities.
The following chart summarises the major trends in the financial performance of the group in
the years leading to the change of the Board in May 2019, and subsequently.
DataDot Technology LimitedAnnual Report 2021Page 3
Directors' Report (continued)
for the year ended 30 June 2021
DDT 7 Year Financial Trend
s
'
0
0
0
$
8,000
6,000
4,000
2,000
-
(2,000)
(4,000)
(6,000)
(8,000)
(10,000)
2015
2016
2017
2018
2019
2020
2021
Years 2015 - 2021
Royalties, Licence and Service Fees
Sale of Goods
Expenses
Net Loss after tax
Net Profit after tax
Revenues and Gross Profit Margins
Total revenue for the Group in FY 2021 was $3,896,113, an increase of 3.2% over FY 2020.
While the Group’s total product sales declined by approximately 2%, this has been more than
offset by substantial savings in the cost of goods sold through the redesign and renegotiation of
product components and pricing. This has resulted in an increase in the gross profit margin of
7.4% on these sales.
Royalties and License Fees form a significant part of the Company’s business model and are
substantially derived from our licensees and distributors overseas. Over the past two years there
has been growing interest in the automotive sector for microdot fitment, particularly in
European markets. We have worked closely with and supported our international distributors
to secure the benefits from these opportunities; resulting in an increase in these revenue
streams for FY 2021 of 9.9%.
DataDot Technology LimitedAnnual Report 2021Page 4 Directors' Report (continued)
for the year ended 30 June 2021
Operating Costs
The Board’s focus on cost reduction that commenced in FY 2020 has continued throughout FY
2021. Since this process commenced it has included the downsizing and relocation of the Sydney
head office and manufacturing plant, the closure of the USA manufacturing and sales facility and
the centralization to Sydney of the management (including sales management) of our UK
operation. The savings from these structural and organisational re-alignments, combined with a
focus on COGS reductions have been realised in FY2021 and will continue to make a significant
contribution to the Group’s financial performance going forward.
Other notable cost reductions during FY 2021 compared to the FY 2020 include one-off items
such as travel expenses. In FY 2020 expenses of approximately $90,000 were incurred due to the
imperative of the Chairman and Managing Director to travel to the USA, Europe and UK to
establish relationships with distributors, customers and overseas staff. In addition, Australian
staff were required to travel to the USA for an extended period to manage the closure of the
manufacturing facility. Other one-off restructuring costs that totaled approximately $130,000 in
FY 2020 were not incurred in FY 2021.
Improved debtors control throughout FY 2020 and into FY 2021 has not only negated the need
for additional bad and doubtful debt provisions in FY 2021 but has also led to the write back of
some previous provisions.
Capital Management
The Company undertook a restructure of its capital base in May and June 2020. This consisted
of the conversion of Convertible Notes to ordinary shares, and a placement and rights issue. Prior
to this restructure, the Company had issued $1,150,000 in notes that had been attracting a
finance charge at 8%. In FY 2021 there were no debt instruments subject to interest payments
and this has made a further contribution to the FY 2021 result compared to FY 2020.
The FY 2020 capital raising combined with the profit earned during the FY 2021 year has
significantly strengthened the net assets of the group from $1,911,863 at 30 June 2020 to
$3,173,457 at 30 June 2021.
The cash and cash equivalents available to the group improved during FY 2021 from $1,005,324
to $2,328,358. The Board is cognisant of its responsibility to effectively manage this elevated cash
balance to invest in growth opportunities and/or capital management activities while
maintaining the long-term financial stability of the group.
Outlook
While the Board is pleased with the turnaround in the Company’s financial performance since
May 2019 it is well aware that the FY 2021 result has primarily been achieved through a
significant reduction of the Company’s cost base supported by improved revenue streams from
a small number of international clients; largely in the automotive sector.
Importantly, the turnaround has now placed the Company in a much stronger financial position
that enables the Board and Executive to place greater emphasis on, and apply additional
resources towards, generating future revenue growth across all product lines.
DataDot Technology LimitedAnnual Report 2021Page 5 Directors' Report (continued)
for the year ended 30 June 2021
The Company’s much improved profit result for FY 2021 provides a strong basis for a positive
outlook in FY 2022 and beyond with a clear focus on four main areas:
1. Working with our global partners and distributors to pursue new opportunities to grow our
2.
international customer base for the microdot and trace product lines;
Leveraging PropertyVAULT’s growing public profile and on-line traffic to grow our direct-to-
consumer and wholesale product sales and expand our revenue streams from additional
advertising and insurance agreements;
3. Undertaking new investment in revenue focused activities including sales and marketing
and assessment of new product lines that can be aligned with our existing core business;
and
Ensuring continuous improvement in the technical performance and cost effectiveness of
our products and their application processes.
4.
Microdot sales to the automotive sector have historically been, and for the medium term,
remain the mainstay of the Company’s revenue base. In FY 2021 direct sales and royalty receipts
related to this sector made up 60% of total revenue. Pleasingly we have been able to generate
expressions of interest from potential new clients in this sector during the second half of FY
2021.
Due to the complexities of automotive manufacturing, progressing from client interest to
securing a sales contract is subject to passing extensive testing regimes and the development of
individualised application and logistical solutions that meet the clients’ requirements. While this
work is well underway it is the Company’s experience that invariably there are long lead times
before a potential automotive client will make a decision to proceed. In the event the Company
is successful in securing one or more of these prospective clients, any revenue stream, while
potentially significant, is unlikely to materialise before the second half of FY 2022.
During FY 2021, the Company also entered into (or commenced negotiation and testing) for a
number of exclusive supply contracts (utilising microdot and trace products) for new clients with
bespoke consumer and industrial product applications. While promising, sales to these clients
will be dependent on their commencement date and the client’s eventual success in their own
market spheres. Therefore, pending evidence of the likely level of repeat business, no forecasts
for potential revenue from these contracts have been made for FY 2022.
As part of the Board’s aim to better meet existing and future clients’ technical and logistical
requirements for microdot application, considerable research and development was undertaken
during FY 2021 to improve our microdot application processes. This work has resulted in a new
spray applicator design that reduces application time, saves around 40% of adhesive, reduces
waste, and gives a substantially improved finish. This has been the first major improvement in
this process since the applicator was first developed in the early 2000’s. It will be transitioned to
existing and new clients throughout FY 2022 and is anticipated to deliver further COGS savings
and greater customer satisfaction; which in turn will support the sales process.
Work has continued throughout FY 2021 to facilitate revenue generation via our partnership with
PropertyVAULT. This has focused on refining the functionality of PropertyVAULT’s registration
and stolen property portal, including its on-line and social media sales portals, to promote traffic
and grow direct sales of the Company’s identification and related security products to the public.
The BikeVAULT portal, as the most mature portal of PropertyVAULT’s suite of property
categories, has been the test bed for assessing the multiple avenues for revenue generation via
PropertyVAULT.
DataDot Technology LimitedAnnual Report 2021Page 6 Directors' Report (continued)
for the year ended 30 June 2021
Registration and listings of stolen bikes have remained strong. Recoveries of stolen bikes have
increased through a combination of improved public and police awareness of the site, increased
user notifications, electronic surveillance of online sales, and implementation of an in-house
stolen property vetting and identification process. The site is currently attracting approximately
100,000 on-line and social media interactions per month.
In FY 2021 DataDot entered into a distribution agreement with Jet Black to market the VAULT
range of locks and bike identification kits. Jet Black is one of Australia’s largest cycling related
distribution companies, servicing 800 bike shops nationally. To date, Jet Black have placed
VAULT’s identification and bike lock products into 80 retail outlets across Australia. With the
imminent arrival of a new extended range of combined VAULT locks and identification kits we
anticipate an expansion of this retail coverage and associated revenue growth through FY 2022.
We have also strengthened our relationship and commercial arrangements with Velosure
Insurance and have become one of Velosure’s largest external referral sources for specialist bike
insurance. To further support the value proposition from our VAULT product offerings and our
on-going relationship with Velosure we have expanded the Theft Excess Rebate program that is
available to Subaru customers, to Velosure customers who purchase our products and Velosure
insurance via our portal.
Throughout FY 2022, using the learnings from the BikeVAULT refinements, the Company will
focus on replicating this model with adaptions to suit each property category. Each property
portal will promote bespoke identification kits, and where appropriate, related security
products; via direct on-line sales, wholesaler or manufacturing agreements and retail offerings.
The Company will also seek to establish commercial arrangements with other specialty insurers
to generate advertising and referral revenue streams, and for the higher valued classes of
insured property such as marine, caravans, plant and equipment and specialty vehicles, recovery
and salvage service charges.
To date, the Company has been fortunate not to have suffered a material disruption to its
operations from the Covid 19 pandemic. However, the Board cannot discount the possibility of
a negative impact if the virus escalates, particularly in our key markets of South Africa, Europe,
and UK.
Notwithstanding the above caveats associated with these new and prospective sales
opportunities, the Board has reason to be optimistic regarding the prospect of increased
revenue streams in FY 2022. The Board will also continue to investigate other strategic
opportunities to provide value for all shareholders.
The Board also takes this opportunity to thank its small team of dedicated staff who have made
a major contribution to the Company’s turnaround.
DataDot Technology LimitedAnnual Report 2021Page 7 Directors' Report (continued)
for the year ended 30 June 2021
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 2021.
No other matter or circumstance has arisen since 30 June 2021 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 LimitedAnnual Report 2021Page 8 Directors' Report (continued)
for the year ended 30 June 2021
Director profiles
Mr Raymond Carroll
Chairman – appointed 13 May 2019
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.
DataDot Technology LimitedAnnual Report 2021Page 9 Directors' Report (continued)
for the year ended 30 June 2021
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.
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
is working on externally
which Qantas has taken equity stakes and warrants, and
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.
Mr Patrick Raper
Company Secretary – appointed 22 December 2014
CFO – appointed 1 September 2019
Patrick 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 in
December 2014. From June 2016 to September 2019 he was the Company Secretary working part
time 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) and
Toys"R"Us ANZ Limited (ASX:TOY).
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 LimitedAnnual Report 2021Page 10 Directors' Report (continued)
for the year ended 30 June 2021
Directors' interests
The relevant interest of each director in the shares, share rights 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
Interest in
Ordinary Shares
Interest in
Share Rights
Interest in
Options
Ray Carroll
Bradley Kellas
David Lloyd
-
214,995,076
14,912,116
-
-
-
-
-
-
Interest in
Convertible
Notes
-
-
-
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 2022
Number unvested
2,000,000
The Board has approved vesting of these rights and the issue of ordinary shares to be
effective after the release of this report.
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
Number of Share
Options
Nil
Nil
Nil
For details of share options and share rights issued to directors and executives as remuneration,
refer to the remuneration report.
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 2021 and the number of meetings attended by
each of the directors were:
Board Meetings
No.
eligible to
attend
No.
attended
Remuneration and
Nomination
Committee Meetings
Audit and Risk
Management
Committee Meetings
No.
eligible to
attend
No.
attended
No.
eligible to
attend
No.
attended
Director
Raymond Carroll
Brad Kellas
David Lloyd
6
6
6
6
6
6
-
-
-
-
-
-
2
2
2
2
2
2
DataDot Technology LimitedAnnual Report 2021Page 11
Directors' Report (continued)
for the year ended 30 June 2021
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
There have been no amounts paid or payable to the auditor for non-assurance services provided
by the auditor during the financial year. Auditor’s remuneration is outlined in note 6 to the
financial statements.
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 2021 is set out on page 19 of the financial
report.
DataDot Technology LimitedAnnual Report 2021Page 12 Directors' Report (continued)
for the year ended 30 June 2021
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 and Executives of DataDot
Technology Limited or its subsidiaries:
Directors
Raymond Carroll
Brad Kellas
David Lloyd
Executives
Patrick Raper
Chairman
Managing Director
Non-Executive Director
Company Secretary
CFO
Appointed 22 December 2014
Appointed 1 September 2019
Shares and Share Rights and Share Options Held
The number of shares and share rights 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
Balance
as at
30/6/2020
Directors
Raymond Carroll
Brad Kellas
David Lloyd
Executives
Patrick Raper
Total Shares
Share Rights
Directors
-
214,995,076
14,912,116
1,066,667
230,973,859
Balance
as at
30/6/2020
-
Executive - Patrick Raper
2,000,000
Additions
Disposals and
Cancellations
-
-
-
-
-
-
-
-
-
-
Additions
Disposals and
Cancellations
-
-
-
-
Share Options
Directors and Executives
Balance
as at
30/6/2020
-
Additions
-
Disposals or
Cancellations
-
Balance
as at
30/6/2021
-
214,995,076
14,912,116
1,066,667
230,973,859
Balance
as at
30/6/2021
-
2,000,000
Balance
as at
30/6/2021
-
DataDot Technology LimitedAnnual Report 2021Page 13
Directors' Report (continued)
for the year ended 30 June 2021
Remuneration policy
Key Management Personnel (KMP) have authority and responsibility for planning, directing and
controlling the activities of DataDot. KMP include only the directors of the parent entity, one of
whom (Mr Kellas) is the Managing Director / CEO, and the CFO.
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 FY 2021.
Board policy for determining the composition and value of remuneration for KMP’s 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 10.0% for Mr Carroll, the Chairman of the Board, and $25,000 plus SGL at 10.0% for Mr
Lloyd.
DataDot Technology LimitedAnnual Report 2021Page 14 Remuneration Report (audited) (continued)
Remuneration policy (continued)
for the year ended 30 June 2021
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 STI and LTI program once the Company returns to
sustainable 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 six years were
Revenue
EBITDA
Net Profit / (Loss)
after tax
Basic earnings per
share (in cents)
Share price at year
end (in cents)
2016
$’000
6,631.4
(1,464.3)
2017
$’000
5,344.0
(835.7)
2018
$’000
4,867.2
(422.3)
2019
$’000
3,279.6
(1,757.3)
2020
$’000
3,774.6
309.4
2021
$’000
3,896.1
1,452.9
(3,264.6)
(1,379.5)
(3,119.9)
(2,301.3)
29.2
1,235.0
(0.12)
(0.43)
(0.40)
(0.30)
0.003
0.099
1.90
2.00
0.50
0.70
0.40
0.60
Performance based remuneration
At the date of this report, the remuneration of KMP who are non-executive directors includes only
a fixed remuneration component.
No STI or LTI programme for KMP’s has been implemented pending the return to sustainable
profitability of the Company. Any STI or LTI programme when implemented with shareholder
approval, 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 would be 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 2021, no STI’s or LTI’s have been paid to directors or other KMP’s.
DataDot Technology LimitedAnnual Report 2021Page 15
Remuneration Report (audited) (continued)
for the year ended 30 June 2021
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 unless extended by the Directors.
Number of share rights provided as remuneration in the years ended 30 June 2020 and 30
June 2021: -
Balance
as at
30/6/2020
Granted as
Remuneration
Vesting of
Share
Rights
Expiring or
Lapsing
Share
Rights
Balance
as at
30/6/2021
Directors
-
-
-
-
-
Executives
Patrick Raper
-
-
Shares and share rights issued and cancelled subsequent to the end of the year: Nil
2,000,000
2,000,000
-
-
-
-
2,000,000
2,000,000
Share Options
- There were no share options on issue at the beginning of the year
There were no share options on issue at the end of the year.
Summary of Director, KMP and Other Executives Equity Remuneration instruments on issue at
the date of this report:
Directors
KMPs
Other Executives
Ordinary
Shares
229,907,192
1,066,667
-
Ordinary
Shares / Loan
Scheme
-
-
-
Options
Share Rights
-
-
-
-
2,000,000
-
DataDot Technology LimitedAnnual Report 2021Page 16
Remuneration Report (audited) (continued)
for the year ended 30 June 2021
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.
Short-term
benefits
Post-
employment
benefits
Long-term benefits
Cash,
Salary,
& fees $
60,000
216,355
25,000
114,085
415,419
STI $
Non
cash $
Super-
annuat
ion $
Terminat
ion $
Long
service
leave $
-
-
-
-
-
-
-
-
-
-
5,700
4,775
2,375
10,833
23,684
-
-
-
-
-
-
-
-
-
-
Short-term
benefits
Post-
employment
benefits
Long-term benefits
Cash,
Salary,
& fees $
59,539
175,041
24,807
52,544
82,499
105,670
123,821
623,922
STI $
Non
cash $
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Super-
annuat
ion $
5,459
-
2,356
4,604
10,294
2,870
12,833
38,416
Terminat
ion $
Long
service
leave $
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Share-
based
paymen
ts
Share
Options
$
-
-
-
-
-
Total $
65,700
221,110
27,375
124,918
439,103
Share-
based
payme
nts
Share
Options
$
Total
$
-
-
-
64,998
175,041
27,163
-
-
57,148
92,793
2,688 111,228
- 136,654
2,688 665,025
2021
Directors
R Carroll
B Kellas
D Lloyd
Executives
P Raper
2020
Directors
R Carroll
B Kellas
D Lloyd
Executives
D Maclean
A Winfield
D Williams
P Raper
DataDot Technology LimitedAnnual Report 2021Page 17
Remuneration Report (audited) (continued)
for the year ended 30 June 2021
2020 Performance based
remuneration
2021 Performance based
remuneration
Bonus
STI %
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Share rights /
Options
LTI %
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Bonus
STI %
0.0%
0.0%
0.0%
Share rights /
Options
LTI %
0.0%
0.0%
0.0%
0.0%
0.0%
Directors
Ray Carroll
Brad Kellas
David Lloyd
Executives Duncan Maclean
Andrew Winfield
David Williams
Patrick Raper
KMP
Details of the performance based and equity-based remuneration for KMP are set out below.
Employment details of key management personnel
Patrick Raper
Mr Raper is the CFO and Company Secretary on a part time basis.
His annualised remuneration package based on full time employment is $200,000 including
Superannuation. Hours required to complete the roles vary from month to month.
There is no contracted STI or LTI in place. At the discretion of the Board, 2,000,000 Share Rights
outstanding at the end of the year have been approved for vesting to be effective after the release
of this report.
Executive service contracts
It is the Board's policy to establish executive service contracts with all KMP. Executive Service
Contracts will not have fixed terms and will have termination notice periods between one month
and three months. Commitments of these amounts are disclosed in Note 20 of the financial
accounts.
KMPs have no entitlement to termination payments in the event of removal for misconduct.
This director’s report is signed in accordance with a resolution of directors made pursuant to
s.298(2) of the Corporations Act 2001.
On behalf of the Directors
Ray Carroll – Chairman
23 August 2021
DataDot Technology LimitedAnnual Report 2021Page 18 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
23 August 2021
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 2021, 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.
DataDot Technology LimitedAnnual Report 2021Page 19 Consolidated Financial Statements
for the year ended 30 June 2021
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
22
23
24
25
26
27
52
53
DataDot Technology LimitedAnnual Report 2021Page 20 Consolidated Statement of Profit or Loss
for the year ended 30 June 2021
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, Amortisation and Impairment
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year
Profit for the year attributable to :
Owners of DataDot Technology Limited
Non controlling interest
Basic profit / (loss) per share (cents per share)
Diluted profit / (loss) per share (cents per share)
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes.
Notes
3
4
4
5
8
8
2021
$
2,340,007
126,535
1,429,572
3,896,113
2020
$
2,358,816
148,614
1,267,139
3,774,569
1,412,128
1,597,751
2,483,985
2,176,818
305,392
323,611
1,186,968
27,968
78,237
-
1,471
1,294,644
1,706,543
70,289
196,857
126,835
90,520
2,191,044
1,494,733
309,385
231,829
19,700
177,832
91,914
1,243,204
39,638
8,222
10,435
1,234,982
29,203
1,234,982
-
1,234,982
0.099
0.099
29,203
-
29,203
0.003
0.003
DataDot Technology LimitedAnnual Report 2021Page 21
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2021
Profit 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 for the year, net of tax
Total comprehensive profit attributable to
Owners of DataDot Technology Limited
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
2021
$
2020
$
1,234,982
29,203
(12,655)
1,243
1,222,327
30,446
1,222,327
30,446
DataDot Technology LimitedAnnual Report 2021Page 22
Consolidated Statement of Financial Position
for the year ended 30 June 2021
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
R&D grant receivable
Total Current Assets
Non‑Current Assets
Plant and equipment
Investments
Total Non‑Current Assets
Total Assets
Current Liabilities
Trade and other payables
Employee benefits
Provisions
Other current liabilities
Total Current Liabilities
Non‑Current Liabilities
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
Non‑controlling interests
Total Equity
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Notes
9
10
11
12
13
15
16
17
15
17
18
19
2021
$
2,328,358
970,399
208,259
104,067
2020
$
1,005,324
892,492
262,027
214,395
3,611,083
2,374,238
388,326
2,948
616,487
2,948
391,274
619,435
4,002,357
2,993,673
409,210
102,932
7,105
192,882
446,980
78,735
7,105
126,973
712,129
659,793
16,240
100,531
10,161
411,856
116,771
422,017
828,900
1,081,810
3,173,457
1,911,863
41,596,795
(36,405,911)
(2,017,427)
41,557,528
(37,640,898)
(2,004,772)
3,173,457
1,911,863
-
-
3,173,457
1,911,863
DataDot Technology LimitedAnnual Report 2021Page 23
Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
Balance at 30 June 2019
Attributable to equity holders of the parent
Issued
capital $
39,692,526
Accumulated
losses $
(37,670,096)
Foreign
currency
translation
reserve $
(1,730,988)
Employee
equity
benefit
reserve $
Other
reserve $
Total
equity $
398,220
(583,454)
106,208
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
-
-
-
-
1,889,646
(24,644)
29,203
-
-
1,243
29,203
1,243
-
-
-
-
-
-
(95,169)
29,203
1,243
30,446
(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
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 rights exercised
Share rights expired
Share issues
Share issue costs
-
-
-
1,234,982
-
1,234,982
-
(12,655)
(12,655)
-
-
-
39,267
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,234,982
(12,655)
1,222,327
-
-
-
-
39,267
-
Balance at 30 June 2021
41,596,795
(36,405,911)
(1,742,400)
403,596
(678,623)
3,173,457
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
DataDot Technology LimitedAnnual Report 2021Page 24
Consolidated Statement of Cash Flows
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, JobKeeper & Cashflow Boost
for the year ended 30 June 2021
Notes
2021
$
2020
$
4,236,106
(3,189,350)
(19,700)
(8,222)
335,387
3,877,328
(4,271,887)
-
(10,435)
(58,117)
Net cash received / (used) in operating activities
9
1,354,221
(463,110)
Cash flows from investing activities
Interest received
Payments for plant and equipment
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 increase 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
567
(14,729)
639
(40,878)
(14,162)
(40,239)
-
-
-
-
-
600,000
(1,150,000)
1,865,002
(2,323)
1,312,679
1,340,059
1,005,324
(17,025)
809,330
194,752
1,243
Cash and cash equivalents at the end of the financial year
9
2,328,358
1,005,324
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
DataDot Technology LimitedAnnual Report 2021Page 25
Notes to the Financial Statements
for the year ended 30 June 2021
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 23 August 2021.
Comparatives are consistent with prior years.
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 2021, the company earned a profit after tax of $1,234,982 (2020: $29,203). Positive operating cash flows of $1,354,221 (2020:
($463,110) were incurred. Revenue from sale of goods and services has grown by 3% in 2021 (2020: 15%).
As disclosed in the Directors Report, the company has not raised any capital during the year and has generated solid cash reserves.
Cash held by the company at 30 June 2021 was $2,328,358 (2020 : $1,005,324) and Net Assets of the group have increased to $3,173,457 from $1,911,863 at 30 June
2021.
These financial results demonstrate further greater financial strength than was the case at June 2020 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
and registered in the Vault databases that record the asset identification data and are accessible by law enforcement agencies and
insurance investigators;
DataTraceID® – a high speed, high security, machine readable system for authenticating materials, products, and assets.
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 LimitedAnnual Report 2021Page 26 Notes to the Financial Statements
for the year ended 30 June 2021
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 2021 and 30 June
2020.
Segment performance
Year ended 30 June 2021
DataTraceID
$
DataDotDNA
eliminations
$
$
Total
$
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 2020
Revenue from external customers
Intersegment sales
Total revenue
Gross profit
Restructuring expenses
EBITDA
Depreciation and amortisation
Finance revenue
Intangibles Impairment
Finance costs
Loss before income tax
Income tax expense
Loss after income tax
Segment assets
Segment liabilities
3,632,131
38,419
3,670,550
263,982
155
264,138
-
(38,574)
(38,574)
2,341,438
142,547
-
-
1,511,120
(50,043)
(194,588)
-
(19,700)
(3,584)
-
-
1,296,832
(53,627)
(8,222)
-
1,288,609
(53,627)
-
-
-
-
-
-
-
-
-
3,896,113
-
3,896,113
2,483,985
-
1,461,077
(198,172)
-
(19,700)
1,243,204
(8,222)
1,234,982
7,889,070
121,787
(4,008,500)
4,002,357
1,807,349
27,324
(1,005,773)
828,900
DataDotDNA
$
DataTraceID
$
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
eliminations
$
-
(50,011)
(50,011)
-
-
-
-
-
-
-
-
-
Total
$
3,774,569
-
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
DataDot Technology LimitedAnnual Report 2021Page 27
Notes to the Financial Statements
for the year ended 30 June 2021
2
Segment Information (continued)
Geographic segments
DataDot operates facilities in two geographical regions of Australasia and the 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 7% of total revenue (2020 : 8%), in
Europe one customer accounts for 15% of total revenue (2020 : 12%), in the Americas one customer accounts for 12% of total revenue (2020 : 14%) and in
DataTraceID one customer accounts for 3% total revenue (2020 : 4%).
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 - 2021
Geographical regions
Asia
Americas
Africa
Australia
Europe
Timing of revenue recognition
Point in time
Over time
Consolidated - 2020
Geographical regions
Asia
Americas
Africa
Australia
Europe
Timing of revenue recognition
Point in time
Over time
DataDotDNA
$
DataTraceID
$
Total
$
122,599
434,964
1,421,407
456,700
1,195,855
3,631,525
3,631,525
-
3,631,525
54,358
3,279
9,656
17,384
179,911
264,589
176,956
438,244
1,431,063
474,084
1,375,766
3,896,113
140,437
124,152
264,589
3,771,961
124,152
3,896,113
DataDotDNA
$
DataTraceID
$
Total
$
114,205
530,886
1,499,285
378,419
955,263
3,478,059
3,478,059
-
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
176,186
120,325
296,511
3,654,244
120,325
3,774,569
DataDot Technology LimitedAnnual Report 2021Page 28 Notes to the Financial Statements
for the year ended 30 June 2021
3
Other Income
Interest revenue
Government grants:
Sundry income
Research and development grants *
Cash Boost and Job Keeper assistance - Australia and UK
2021
$
567
172,049
132,775
-
305,392
2020
$
639
166,724
132,596
23,652
323,611
* 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
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, transport services and consulting fees relating to the closure
of the Spokane factory
2021
$
432,510
90,469
2020
$
689,367
49,002
6,269
704,082
-
46,349
9,238
(67,131)
488,162
1,186,968
85,602
830,931
5,376
65,798
67,989
64,822
588,756
1,706,543
3,735
138,799
-
126,835
DataDot Technology LimitedAnnual Report 2021Page 29
Notes to the Financial Statements
for the year ended 30 June 2021
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 26% (2020 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
Foreign currency balances
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
2021
$
-
8,222
8,222
1,243,204
323,233
(19,491)
(79,254)
77,796
9,096
9,462
(320,842)
8,222
8,222
-
-
-
-
-
-
-
-
-
26,762
305,560
1,558
128,750
44,067
506,698
-
506,698
2020
$
-
10,434
10,434
39,637
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
DataDot Technology LimitedAnnual Report 2021Page 30
Notes to the Financial Statements
for the year ended 30 June 2021
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.
The amount of the potential deferred tax assets attributable to revenue losses not brought to account
Adjustment recognised for prior periods
Less prior year losses utilised
2021
$
10,793,780
-
(320,842)
10,472,938
2020
$
10,699,453
-
94,327
10,793,780
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
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
There is no deferred tax liabilities in other tax jurisdictions
Returned Tax Losses in the USA of USD 6,124,327 (2020: 5,817,093) will expire progressively from 2021 to 2040.
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 (2020:Audit Only)
Amounts paid or payable for audit services by Audit Only (2020:Audit Only):
An audit or review of the financial statements
2021
$
2020
$
75,000
75,000
73,000
73,000
DataDot Technology LimitedAnnual Report 2021Page 31
Notes to the Financial Statements
for the year ended 30 June 2021
7
8
9
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.
2021
$
0.099
0.099
1,234,982
2020
$
0.003
0.003
29,203
No
1,249,508,652
2,000,000
1,251,508,652
No
851,167,141
2,000,000
853,167,141
Diluted earnings per share
Share rights and options issued to shareholders and related parties are considered to be potential ordinary shares and have been considered in determination of
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
Disposal of plant and equipment
Revaluation of financial liability
Share based payments
Impairment for doubtful accounts
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
2021
$
2020
$
2,328,358
2,328,358
1,005,324
1,005,324
1,234,982
29,203
(567)
(639)
203,516
43,742
-
39,267
-
(77,907)
-
53,769
110,328
(37,770)
(1,745)
(243,670)
30,276
177,833
-
-
5,376
-
(347,517)
16,264
159,675
(166,694)
(266,017)
-
(68,457)
(2,137)
Net cash earned / (used) in operating activities
1,354,221
(463,110)
DataDot Technology LimitedAnnual Report 2021Page 32
Notes to the Financial Statements
for the year ended 30 June 2021
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
2021
$
940,492
(176,901)
763,591
206,808
-
970,399
2020
$
975,968
(247,354)
728,614
115,313
48,565
892,492
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 trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past
due. The loss allowance provision as at 30 June 2021 is determined as follows, the expected
credit losses incorporate forward looking information
30 June 2021
Expected loss rate (%)
Gross carrying amount ($)
ECL provision
30 June 2020
Expected loss rate (%)
Gross carrying amount ($)
ECL provision
< 30 days
overdue
< 60 days
overdue
< 90 days
overdue
Current
0.01%
383,883
39
0.00%
339,144
6
0.09%
326,540
304
0.47%
147,079
684
0.00%
40,383
-
0.85%
63,288
538
0.00%
-
-
0.00%
48,667
-
> 90 days overdue
99.90%
177,082
176,901
Total
18.81%
940,492
176,946
62.97%
390,394
245,828
25.34%
975,968
247,354
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
2021
$
247,354
-
247,354
-
-
(70,453)
176,901
2020
$
182,635
-
182,635
-
-
64,719
247,354
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 LimitedAnnual Report 2021Page 33
Notes to the Financial Statements
for the year ended 30 June 2021
11
Inventories
Raw materials
Finished goods
2021
$
208,259
-
208,259
2020
$
262,027
-
262,027
Accounting treatment
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 2019
Additions
Disposals
Depreciation expense for the year
Exchange adjustments
Balance at 30 June 2020
Additions
Disposals
Depreciation expense for the year
Exchange adjustments
Balance at 30 June 2021
$
1,799,900
(1,681,631)
118,269
$
1,842,135
(1,666,742)
175,393
204,119
(155,245)
48,875
452,312
(231,130)
221,182
203,286
(129,753)
73,533
252,670
114,892
367,562
388,326
616,488
equipment
equipment
Improvements
$
218,390
52,696
(39,300)
(57,542)
1,149
175,393
14,729
(39,125)
(34,007)
1,279
118,269
$
45,877
50,363
-
(22,707)
-
73,533
-
-
(25,394)
736
48,875
$
1,158
456,821
-
(90,418)
-
367,562
-
(4,617)
(144,115)
2,353
221,182
Totals
$
265,425
559,880
(39,300)
(170,667)
1,149
616,488
14,729
(43,742)
(203,516)
4,368
388,326
DataDot Technology LimitedAnnual Report 2021Page 34
Notes to the Financial Statements
for the year ended 30 June 2021
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
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.
DataDot Technology LimitedAnnual Report 2021Page 35 Notes to the Financial Statements
for the year ended 30 June 2021
13
Trade and Other Payables
Trade payables
Sundry creditors and accruals
2020
$
158,608
288,372
446,980
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.
2021
$
183,275
225,935
409,210
The financial liabilities of the Group comprise trade payables.
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.
14
Borrowings
Financing arrangements
Current and Non Current Borrowings
Non-Current - Convertible Notes issues
2021
$
-
-
-
2020
$
-
-
-
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 LimitedAnnual Report 2021Page 36
Notes to the Financial Statements
for the year ended 30 June 2021
15
Employee Benefits
Current
Employee benefits
Non Current
Employee benefits
Employee benefits
Aggregate employee benefits provision :-
Balance at beginning of the year
Additional provisions
Amount used
Balance at end of the year
2021
$
102,932
2020
$
78,735
16,240
10,161
73,769
50,718
(45,752)
78,735
202,795
136,784
(265,810)
73,769
Accounting treatment
Short-term and other long-term employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries and annual leave in the period in which the related service is rendered at
the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the
related service.
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.
Employee benefits obligations expected to be settled after twelve months
29,903
12,240
(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.
Long service leave
(ii)
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.
16
Provisions
Current
Other provisions
2021
$
7,105
7,105
2020
$
7,105
7,105
Other provisions
A provision of $7,105 (2020 : $7,105) 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
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.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the
risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount
is the present value of those cash flows (when the effect of the time value of money is material).
DataDot Technology LimitedAnnual Report 2021Page 37 Notes to the Financial Statements
for the year ended 30 June 2021
17
Other Liabilities
Current
Deferred income
Revenue received in advance
Other Current Liabilities
Non-Current
Other liabilities
Property and Equipment Leases
18
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
Vested share rights issued during the year under the ESRP
Issued capital at the end of the financial period
There is no current on-market share buy-back.
Ordinary shares
2021
$
8,895
19,120
164,866
192,882
20
100,511
100,531
2021
No
1,260,709,351
(24,189,618)
2021
$
41,557,528
-
5,349,733
-
-
-
39,267
-
-
-
2020
No
810,606,351
(16,126,414)
205,201,578
261,027,836
-
-
2020
$
64,699
21,635
40,639
126,973
-
411,856
411,856
2020
$
39,692,526
-
845,535
1,044,111
(24,644)
-
1,241,869,466
41,596,795
1,260,709,351
41,557,528
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 2020 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.
19
Reserves
Foreign currency translation reserve
2021
$
(1,742,400)
2020
$
(1,729,745)
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
403,596
398,220
-
403,596
5,376
403,596
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 26.
Other Reserves
Balance at beginning of financial year
Movement in Convertible Note Reserve
(678,623)
(583,454)
-
(678,623)
(95,169)
(678,623)
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
(2,017,427)
(2,004,772)
DataDot Technology LimitedAnnual Report 2021Page 38
Notes to the Financial Statements
for the year ended 30 June 2021
20
Commitments
Operating lease commitments
Committed at the reporting date and recognised as liabilities, payable:
Within one year
One to five years
Refer to note 27 for information on leases for 2021.
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
2021
$
2020
$
163,121
100,511
263,633
40,780
411,836
452,616
102,228
135,000
21
Contingent Liabilities
Guarantees
DataDot has issued bank guarantees of $34,375 (2020: $34,375). 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 16 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.
22
Subsidiaries and Associated Entities
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
Associated entities
Brandlok Brand Protection Solutions Pty Limited
Principal place of business/
Country of Incorporation
Ownership interest %
2021
2020
Australia
Australia
USA
USA
UK
UK
Australia
Australia
100
100
100
100
100
100
100
100
100
100
100
100
20
20
DataDot Technology LimitedAnnual Report 2021Page 39
Notes to the Financial Statements
for the year ended 30 June 2021
23
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
Share based payments (Note 26)
24
Related Party Transactions
Parent entity
DataDot Technology Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 22.
Associated entities
Nil
2021
$
415,419
23,684
-
439,103
2020
$
633,809
38,416
2,688
674,913
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
2021
-
25,886
143,456
2020
27,238
11,226
146,400
37,277 9,041
Amounts owing from / (to) Directors and Director Related entities at balance date: (since received)
Amounts owing to Property Vault International Pty Ltd (since paid)
4,097
10
2,826
12,496
25
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 LimitedAnnual Report 2021Page 40
Notes to the Financial Statements
for the year ended 30 June 2021
25
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 2021
Financial Assets
Cash and cash equivalents
Trade and other receivables
Grant and term deposit interest receivables
Financial Liabilities
Trade and other payables
Net maturity
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
Remaining contractual maturities
Within 1 Year
$
2,328,358
763,591
104,067
3,196,016
409,210
2,786,806
Within 1 Year
$
1,005,324
777,179
214,395
1,996,898
446,980
1,549,918
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 LimitedAnnual Report 2021Page 41 Notes to the Financial Statements
for the year ended 30 June 2021
25
Financial Risk Management (continued)
Consolidated - 2021
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - fixed rate
Convertible notes payable
Total non-derivatives
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - fixed rate
Convertible notes payable
Total non-derivatives
average
%
1 year or less
$
years
$
contractual
$
-
409,210
-
409,210
average
%
1 year or less
$
years
$
-
446,980
-
446,980
-
-
-
-
-
-
409,210
-
409,210
contractual
$
446,980
-
446,980
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair values.
26
Option and Share Based Payments
Expenses arising from share based payments to Key Management Personnel :
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
2021
$
-
-
-
2020
$
-
2,688
2,688
5,376
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 under the Share Loan Scheme during the current financial year or the previous financial year.
Movements in share rights for the financial year
Balance at the beginning of the period
Rights granted
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
2021
No
2,000,000
-
-
-
2,000,000
2021
Avg issue $
0.0300
-
-
-
2021
No
2021
Avg issue $
-
-
-
-
-
-
-
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
-
-
DataDot Technology LimitedAnnual Report 2021Page 42
Notes to the Financial Statements
for the year ended 30 June 2021
26
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.
At the discretion of the Board, 2,000,000 Share Rights outstanding at the end of the year have been approved for vesting to be effective after the
release date of this report.
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 FY20 and FY21 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 was taken up in 2020 as the final cost
associated with 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 LimitedAnnual Report 2021Page 43 Notes to the Financial Statements
27
Leases
for the year ended 30 June 2021
Company as a lessee
The Group have leases over a range of assets including land and buildings and equipment.
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 2021
Additions/(Adjustments) to right-of-use assets
Amortisation charge
Balance at end of year
Lease liabilities
Buildings
$
(9,234)
229,563
220,329
Plant and
Equipment
$
-
17,396
17,396
Total
$
(9,234)
246,959
237,725
The maturity analysis of lease liabilities based on contractual undiscounted cash flows is shown in the table below:
2021
Lease liabilities
Extension options
< 1 year
$
177,790
1 - 5 years
$
111,481
> 5 years
$
-
Total
undiscounted
lease liabilities
$
289,271
Lease liabilities
included in this
Statement Of
Financial Position
$
263,633
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 the Group's discretion.
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
2021
$
14,907
-
149,749
164,656
194,158
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 Group, are classified as finance leases.
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 the lease term.
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 exchange for consideration.
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 then there is no identified asset.
- 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.
DataDot Technology LimitedAnnual Report 2021Page 44
Notes to the Financial Statements
Lessee Accounting
for the year ended 30 June 2021
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 Group believes it is reasonably certain that the option will be exercised.
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 cost of removal and restoration less any lease incentives received.
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 lease, however where this cannot be readily determined then the Group's incremental borrowing rate is used.
Subsequent to initial recognition, the lease liability is measured at amortised cost using the effective interest rate method. The lease liability is remeasured whether
there is a lease modification, change in estimate of the lease term or index upon which the lease payments are based (e.g. CPI) or a change in the Group's assessment
of lease term.
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 assets. The Group recognises the payments associated with these leases as an expense on a straight-line basis over the lease term.
28
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
2021
$
3,224,230
5,809,723
9,033,953
2020
$
1,964,427
5,857,662
7,822,089
336,962
4,626,702
4,963,664
256,245
4,834,638
5,090,883
41,596,795
(38,754,412)
1,227,906
4,070,289
41,557,529
(40,054,229)
1,227,906
2,731,206
1,299,817
1,299,817
972,600
972,600
Parent Entity Commitments and Guarantees
DataDot has issued a bank guarantee of $34,375 (2020: $34,375). No liability was recognised by DataDot in relation to the bank guarantee as the fair value of the
Remuneration commitments
Commitments for the payment of salaries and other remuneration under long term employment contracts in existence at the
Minimum remuneration payments payable
Within one year
2021
$
102,228
2020
$
135,000
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
Capital commitments
The parent entity had no capital commitments for plant and equipment as at 30 June 2021 and 30 June 2020.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity as disclosed throughout the report.
29
Events after the reporting period
No matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the operations of the Group, the results of it's
operations or the state of affairs in future financial years.
DataDot Technology LimitedAnnual Report 2021Page 45
Notes to the Financial Statements
for the year ended 30 June 2021
30
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 28.
(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 ($). Each entity in DataDot
determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.
The functional currencies of the overseas subsidiaries are:
Name of overseas subsidiaries
DataDot Technology USA Inc
DataDot Technology (UK) Ltd
Transactions and balances
Functional currency
United States Dollar (US$)
Great Britain Pound (£)
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 LimitedAnnual Report 2021Page 46 Notes to the Financial Statements
for the year ended 30 June 2021
30
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 LimitedAnnual Report 2021Page 47 Notes to the Financial Statements
(e) Financial instruments
for the year ended 30 June 2021
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.
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 non-payment 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.
DataDot Technology LimitedAnnual Report 2021Page 48 Notes to the Financial Statements
for the year ended 30 June 2021
30
Summary of other significant accounting policies (continued)
(f) Adoption of new accounting standards
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its
operations and effective for an accounting period that begins on or after 1 July 2020.
New and revised Standards and amendments thereof and interpretations effective for the current year that are relevant to the Group include:
- AASB 2020-4 Amendments to Australian Accounting Standards - Covid 19-Related Rent Concessions*
* In April 2021 the AASB issued AASB 2021-3 Amendments to Australian Accounting Standards – Covid-19- Related Rent Concessions beyond 30 June 2021: This
amendment extends the relief by one year to cover rent concessions that reduce only lease payments due on or before 30 June 2022. The amendment is effective for
annual reporting periods beginning on or after 1 April 2021 but earlier application is permitted, including in financial statements not authorised for issue at 31 March
2021.
-
The Group has early adopt AASB 2021-3 Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions beyond 30 June 2021 in the current
year. The new Standards did not have a material impact on the financial statements.
AASB 2020-4 Amendments to Australian Accounting Standards – COVID-19-Related Rent Concessions and AASB 2021-3 Amendments to Australian Accounting
Standards – Covid-19-Related Rent Concessions beyond 30 June 2021
AASB 2020-4 and AASB 2021-3 amend AASB 16 Leases 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 the standard.
The practical expedient permits a lessee to elect not to assess whether a COVID-19-related rent concession is a lease modification. A lessee that makes this election
accounts for any change in lease payments resulting from the COVID-19-related rent concession the same way it would account for the change applying AASB 16 if the
change were not a lease modification.
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 2022 (a rent concession would meet this condition if it results in reduced
lease payments on or before 30 June 2022 and increased lease payments that extend beyond 30 June 2022)
- There is no substantive change to other terms and conditions of the lease.
The amendment in AASB 2020-4 applies to annual reporting periods beginning on or after 1 June 2020 and applied to rent concessions affecting payments originally
due on or before 30 June 2021. The amendment in AASB 2021-3 applies to annual reporting periods beginning on or after 1 April 2021 and extends the ambit of the
practical expedient to include rent concessions affecting payments originally due on or before 30 June 2022.
The directors have elected under s.334(5) of the Corporations Act 2001 to apply AASB 2021-3 prior to its mandatory effective date. These amendments are required to
be applied on a retrospective basis, with the cumulative effect of initially applying AASB 2021-3 recognised as an adjustment to the opening balance of retained
earnings (or other component of equity, as appropriate) at the beginning of the annual reporting period in which the lessee first applies the amendment. However, as
all additional eligible rent concessions to which the practical expedient has been applied, have been negotiated or entered into during the current financial year, there
is no amount that impacts prior financial reporting periods. As a result, there is no retrospective adjustment in respect of retained earnings or other component of
equity at the beginning of the reporting period (1 July 2020).
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 prior year. No concessions were granted on the UK lease.
- In June 2021 the Group paid the $153,046 concessions that had been granted in relation to the Sydney Lease for the period ending on 1 July 2021.
- Recognised a change in lease payments from 1 July 2021 compared to what had been provided at 30 June 2020 and recalculated the NPV of the future 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.
In accordance with the transitional provisions, the Group has applied the amendment prospectively in accordance with AASB 108 Accounting Policies, Changes in
Estimates and Errors, and has not restated prior period figures. As the rental concessions have been fully consumed during the current financial period on leases that
commenced in the 2020 financial period, there is no retrospective adjustment to opening balance of retained earnings at 1 July 2020 on application of the updated
cash flow.
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 LimitedAnnual Report 2021Page 49 Notes to the Financial Statements
(g) Critical accounting estimates and judgements
for the year ended 30 June 2021
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 significant enough and as such these assets have been tested for impairment in this financial period.
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.
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.
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 15, 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 LimitedAnnual Report 2021Page 50 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 2021 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
23 August 2021
DataDot Technology LimitedAnnual Report 2021Page 51 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 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, 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 2021 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. We have determined the matters described below to be the key audit matters to
be communicated in our report.
DataDot Technology LimitedAnnual Report 2021Page 52 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 2021
the Group recognised
$3,896,113 (2020: $3,774,569).
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 previous
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
2022,
the
assumptions driving the Group’s budget; and
including critical analysis of
Assessment of the Group’s liquidity position
as at 30 June 2021 and the cash needs flowing
from the 2022 forecast including sensitivity
analysis in relation to the expected 2022
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 2021, but does not include the
DataDot Technology LimitedAnnual Report 2021Page 53 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.
DataDot Technology LimitedAnnual Report 2021Page 54 Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 13 to 18 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Datadot Technology Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Andrew Hunt
Principal
Parramatta
23 August 2021
DataDot Technology LimitedAnnual Report 2021Page 55 DataDot Technology Limited - ABN 54 091 908 726
Shareholder Information
ASX Additional Information
Additional information required by the ASX Listing Rule 4.10 and not disclosed elsewhere in this report is set out below. This
information is effective as at 30 September 2021.
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 2,539. There are 1,243,869,466 ordinary fully paid shares listed on the Australian Securities
Exchange. The twenty largest shareholders hold 61.452% 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.
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
84
186
186
1,340
743
2,539
0
0
The number of shareholders holding less than a marketable parcel of ordinary shares is 1,209.
Securities exchange
The Company is listed on the Australian Securities Exchange.
Unquoted equity securities
There are no unquoted Equity Securities
Voluntary escrow
2,000,000 ordinary shares are under escrow until the earlier of August 2022 or finalisation of employment.
DataDot Technology LimitedAnnual Report 2021Page 56 Shareholder Information - continued
Twenty largest shareholders
MR BRADLEY CHARLES KELLAS
APPWAM PTY LTD
PATRIX HOLDINGS PTY LTD
CITICORP NOMINEES PTY LIMITED
HAMISH EDWARD ELLIOT BROWN
KELLAS INVESTMENTS PTY LTD
MR COLLIN HWANG
MR SANTO CARLINI & MRS ISABELLA CARLINI
MR NORMAN COLBURN MAYNE
DMX CAPITAL PARTNERS LTD
MR DAVID ROGER LLOYD
MR GERALD LEO BASHFORD
QUANTAMATICS PTY LTD
HENTA PTY LTD
SI EQUITIES PTY LTD
MR MARK ANDREW TKOCZ
BNP PARIBAS NOMINEES PTY LTD
MR GEOFFREY GEORGE
JAMES MCCALLUM
DAMNN INVESTMENTS PTY LTD
Total Securities of Top 20 Holdings
Total of Securities
Number Held
169,995,076
150,000,001
98,231,662
58,306,328
53,549,561
45,000,000
31,544,716
20,000,000
18,910,100
16,539,032
14,912,116
12,180,683
11,840,000
11,333,334
11,093,299
10,000,000
9,344,244
8,634,398
6,666,666
6,300,161
764,381,377
1,243,869,466
% of Issued
Shares
13.689%
12.079%
7.910%
4.695%
4.312%
3.624%
2.540%
1.610%
1.523%
1.332%
1.201%
0.981%
0.953%
0.913%
0.893%
0.805%
0.752%
0.695%
0.537%
0.507%
61.452%
DataDot Technology LimitedAnnual Report 2021Page 57 Corporate Information – 2020
DataDot Technology Limited - ABN 54 091 908 726
Offices
Australia & registered office:
8 Ethel Ave, Brookvale, NSW, 2100, Australia
Phone: 61 2 8977 4900; Fax +61 2 9975 4700
Email: info@datadotdna.com
United Kingdom:
Unit 4, Twickenham Road,
Union Park Industrial Estate,
Norwich, Norfolk, NR6 6NG, UK Phone: +44 0 1603 407171
Directors & Officers
Mr Ray Carroll - Chair
Mr David Lloyd - Independent Non-Executive Director
Mr Brad Kellas - Managing Director
Mr Patrick Raper - Company Secretary
Auditors
AuditOnly,
Level 7, 91 Phillip Street
Parramatta NSW 2150
Bankers
Commonwealth Bank of Australia
Ground Floor, Tower 1, 201 Sussex Street,
Sydney, NSW, Australia, 2000
Share Register
Boardroom Pty Limited
Level 12, 225 George Street, Sydney NSW 2000
Phone: +61 2 9290 9600;
Website www.datadotdna.com
DataDot Technology LimitedAnnual Report 2021Page 58 LEADERS IN ADVANCED ASSET
IDENTIFICATION AND DIGITAL
PROTECTION SOLUTIONS
®