2022 Annual Report
The builders of global digital finance
www.digitalx.com
ASX:DCC
CONTENTS
LETTER FROM THE CHAIR
DIRECTORS’ REPORT
OPERATING & FINANCIAL REVIEW
REMUNERATION REPORT
DIRECTORS’ DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION
AUDITOR’S REPORT
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CASHFLOWS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
BASIS FOR PREPARATION
KEY OPERATING & FINANCIAL RESULTS
CAPITAL & RISK MANAGEMENT
FINANCIAL POSITION
EQUITY
GROUP STRUCTURE
OTHER DISCLOSURES
CORPORATE DIRECTORY
ASX INFORMATION
2
3
5
15
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DIGITALX LTD | 2022 ANNUAL REPORT | 2
LETTER FROM THE CHAIR
Dear Shareholders,
Thank you for your continued engagement as shareholders of DigitalX Limited.
Whilst the ecosystem in which the Company operates remains in its very early stages, few companies, if any, have achieved the
longevity that the Company has achieved operating and evolving within an ever-changing framework as traditional markets try to
understand the opportunities presented by the evolution of digital finance. It is for this reason that the Board, despite a disappointing
financial result for the last financial year, remain optimistic about the possibilities heading into the next 12 months.
The appointment of Lisa Wade as the Company’s new CEO in late 2021 is the highlight of the last financial year, with her extensive
experience in both traditional finance and digital asset markets, enabling her to stand out from a pool of exceptional candidates for
the role of CEO of DigitalX.
Our partnership with the Digital Finance CRC announced in November 2021 shows our commitment to participating in Australia’s
efforts to lead the world in these new financial frontiers. As shareholders in DigitalX you have front row seats to the future of finance
and the integration of digital assets and new technologies into traditional finance and business systems, which some call ‘Web3.0’.
In a difficult investment market, our funds management team has also continued to find ways to grow our investment offering, with
the DigitalX Bitcoin Fund becoming the first research-rated digital asset fund in Australia.
Finally, the acquisition of Sell My Shares has been a successful addition for the Company, not only in the performance of the business
since the acquisition, but in the opportunity it has presented us to integrate the Sell My Shares platform with our inhouse built
Drawbridge product to expand the product suite.
‘Now, next and beyond’
The Company continues to focus its efforts using a ‘now, next and beyond’ mantra; focusing on what we are doing ‘now’ to continue
to grow our immediate revenues from products like Sell My Shares, Drawbridge and from our funds management division. Building
what is ‘next’ in terms of growing each of those business units to be more than what they each appear as traditional businesses or
products; and finally looking at the ‘beyond’, where these products are market leaders in businesses and structures that may not yet
be obvious to current users.
We have a collection of talented and visionary staff who are working as a collective to see DigitalX achieve the potential that the Board
believes it is capable of. It is why we look forward with optimism to this new financial year and being able to show the outcomes of
the work that the team has put in over the last few years to position DigitalX as a true leader in the future of digital finance.
Yours sincerely,
Toby Hicks
Non-Executive Chair
DIGITALX LTD | 2022 ANNUAL REPORT | 3
DIRECTORS’ REPORT
Your Directors present their report together with the financial report on the consolidated entity (referred to hereafter as the Group
or Consolidated entity) consisting of DigitalX Limited (DigitalX or the Company) and the entities it controlled at the end of, or during,
the year ended 30 June 2022. Information contained within this report and the financial report is presented in Australian Dollars
($AUD).
Directors
The following persons were Directors of DigitalX during the financial year and up to the date of this report, unless stated otherwise:
Mr Toby Hicks
Non-Executive Chairman
Term of Appointment
Appointed 10 July 2019
Experience
Mr Hicks is a Partner of Steinepreis Paganin Lawyers & Consultants with over 20 years'
experience advising companies, both public and private, on matters relating to corporate
governance, capital raisings, and mergers and acquisitions, as well as general commercial and
strategic legal advice. He acts for a number of ASX listed companies.
Status
Independent
Non-Executive
Mr Hicks holds a Bachelor of Business (Management) and a Bachelor of Laws as well as a
Graduate Diploma in Company Secretarial Practice from the Governance Institute and is a
Chartered Secretary.
Current Directorships
None
Previous Directorships of
Listed Entities within past 3
years
None
Mr Peter Rubinstein
Non-Executive Director
Term of Appointment
Appointed 15 September
2017
Status
Independent
Non-Executive
Current Directorships
Genetic Technologies Limited
Since 31 January 2018
Previous Directorships of
Listed Entities within past 3
years
None
Mr Hicks spent 16 years as a Governor at the University of Notre Dame Australia and served for
14 years on the University’s Finance, Audit and Risk Committee and 4 years on the Law School
Advisory Board (Fremantle).
Interests in securities held as at the date of the report
8,350,792 fully paid ordinary shares; and
2,500,000 unlisted options exercisable at $0.10 each expiring on 30 June 2024.
Experience
Mr Peter Rubinstein has over 20 years’ experience in early stage technology commercialisation
through to public listings on the ASX. He is a lawyer by training, having worked at one of the
large national firms prior to moving in house at Montech, the commercial arm of Monash
University.
Mr Rubinstein has had significant exposure to the creation, launch and management of a diverse
range of technology companies including in biotech, digital payments and renewable energy.
Mr Rubinstein is also Chairman of EasyPark ANZ an early adopter in the “Smart City”
opportunities for digital parking.
Interests in securities held as at the date of the report
36,334,372 fully paid ordinary shares;
1,000,000 unlisted options exercisable at $0.22 each expiring on 10 December 2023;
1,500,000 unlisted options exercisable at $0.25 each expiring on 10 December 2023; and
2,000,000 unlisted options exercisable at $0.30 each expiring on 10 December 2023.
DIGITALX LTD | 2022 ANNUAL REPORT | 4
Experience
Mr Dooley is an experienced corporate executive and was formerly the Managing Director of
leading international share registry company, Computershare Investor Services Pty Limited for
13 years before retiring in July 2020. During his time at Computershare Mr Dooley also served
as Managing Director of the Computershare Fund Services division, which offered registry
services for unlisted funds.
Mr Dooley holds a Bachelor of Economics from Macquarie University, a Diploma of Applied
Finance and Investment and has completed the Australia Institute of Company Directors’
Company Directors course.
Interests in securities held as at the date of the report
171,428 fully paid ordinary shares; and
2,500,000 unlisted options exercisable at $0.10 each expiring on 30 June 2024.
Experience
Mr Leigh Travers has enjoyed a decade of building relationships in financial and technology
markets through his experience with fintech and investment advisory companies. He is a current
Director of Blockchain Australia, the industry body for blockchain businesses in Australia.
Mr Travers previously worked for seven years at Australian wealth management firm Euroz
Securities as an Investment Advisor. His clients included high net worth, institutions and listed
companies as he provided trading advice and assisted with company buybacks and sell downs
and capital raising services.
Mr Travers holds a Bachelor of Commerce and Communications from the University of Western
Australia and has completed a Fintech Certification from the Massachusetts Institute of
Technology and Certificate in Blockchain Strategy from RMIT.
Mr Greg Dooley
Non-Executive Director
Term of Appointment
Appointed 3 August 2021
Status
Independent
Non-Executive
Current Directorships
None
Previous Directorships of
Listed Entities within past 3
years
None
Mr Leigh Travers
Executive Director
Term of Appointment
Appointed 24 July 2016
Resigned 6 August 2021
Status
Non-independent
Executive
Current Directorships
None
Previous Directorships of
Listed Entities within past 3
years
None
Company Secretary
Mr Joel Ives is an experienced Chartered Accountant (CAANZ) that provides CFO, Accounting, and Company Secretarial services for
ASX listed and private companies across various industries.
Mr Ives currently acts as Company Secretary to Harvest Technology Ltd (ASX:HTG), Kuniko Limited (ASX:KNI), Green Technology Metals
Limited, and Joint Company Secretary of OliveX Holdings Limited (NSX:OLX).
Mr Ives was appointed on 6 August 2021.
Ms Shannon Coates has over 20 years’ experience in corporate law and compliance. She is currently named company secretary to a
number of public unlisted and listed companies; having provided company secretarial and corporate advisory services to boards across
a variety of industries, including financial services, manufacturing and technology both in Australia and internationally. Ms Coates is
a qualified lawyer, Chartered Secretary and graduate of the AICD’s Company Directors course. Ms Shannon Coates was appointed
Company Secretary of DigitalX on 8 December 2016 and resigned on 6 August 2021.
DIGITALX LTD | 2022 ANNUAL REPORT | 5
OPERATING & FINANCIAL REVIEW
DigitalX continued to progress on its business strategy of growing its funds management division as well as developing applications
utilising Distributed Ledger Technology (DLT), giving it a presence in both the financial and technology aspects of the Bitcoin and
Blockchain industries. The Company has a unique skill set and experience within the industry and seeks to provide investors with
exposure to both high-growth markets.
The highlights for the year-ended 30 June 2022 included:
Highlights
Presentation to the Board of the updated long-term strategy for maximising revenue growth and shareholder value by
accelerating Sell My Shares new product development, data validation and staking returns on digital asset treasury, new fund
products with tokenised real word asset focus, and venture investments and incubation underpinned by a cost conscious and ESG
focus. Implementation has commenced.
Appointment of Lisa Wade, former Head of Digital Innovation and Sustainability at National Australia Bank, as the Company’s new
Chief Executive Officer.
Successful acquisition and integration of leading online share execution business, Sell My Shares, to accelerate Drawbridge
commercialisation and enable compliant employee share trading.
Appointment of Greg Dooley, former Managing Director of Computershare Issue Services, as a Non-Executive Director.
DigitalX Bitcoin Fund secured an Australian first with investment grade research rating.
Execution of Partner Agreement with Digital Finance Cooperative Research Centre (DFCRC).
Upgraded the Company’s US listing on OTC Markets to the OTCQB.
Adoption of World Economic Forum’s ESG Framework.
DigitalX recognised as a dual finalist in Fintech Australia Awards for regtech and wealth management.
Reduction of carbon environmental impact by offsetting 60t of CO2 through innovative non fungible token (NFT) partnership with
Metacarbon Inc.
Principal activities
During the financial year, the principal activities of the Group consisted of:
• Blockchain product development; and
•
Funds under management.
Operating results
For the year ended 30 June 2022, the consolidated loss attributable to members of the Group after providing for income tax amounted
to AUD$2,839,468 (2021: Profit of AUD$6,756,954). The prior period included a one-off revenue recognition item of $8,335,434 for
Human Protocol advisory and is the primary reason for the change in results year on year.
Total comprehensive loss of AUD$15,734,861 (2021: Comprehensive Income of AUD$21,645,351), primarily attributable to a decrease
in the value of the Group’s digital asset holdings from 30 June 2021 (Refer to Note D4 for further details) as digital asset prices fell as
a result of heightened global uncertainty due to rising interest rates, record high inflation and uncertainty around global conflict, as
seen across other global financial markets. Specifically, with in the digital asset markets we have also seen events like Terra Luna,
Three Arrows Capital and Celsius all negatively impacting the market.
DIGITALX LTD | 2022 ANNUAL REPORT | 6
The Group is pleased to note an increase in its core revenue
streams (excluding a one-off amount recognised in the prior
year of $8,335,434 for Human Protocol advisory) on the
previous corresponding period (PCP) primarily through product
revenue and the acquisition of Sell My Shares.
Excluding the one-off amount for Human Protocol in the prior
year revenue core revenue grew by 130% year on year
primarily driven by the Group’s product revenue (Drawbridge
and Sell My Shares).
This is in line with the Group’s strategy to diversify revenue
streams from its different business lines.
The Group also had net assets of AUD$27,083,463 (30 June
2021: net assets of AUD$42,532,693).
The decrease for the period is primarily attributable to a
decrease in the value of the Group’s digital asset holdings
from 30 June 2021 with the bitcoin price decreasing from
A$46,738 to A$28,684. There was also an offsetting increase
in intangible assets (goodwill) of $1.88m from the acquisition
of Sell My Shares.
Despite volatility in the digital asset markets the balance
sheet remains strong heading into the new financial year.
PRODUCT DEVELOPMENT
Cash
$6,278,410
Digital Assets
$23,568,863
Intangibles
$2,278,051
Investments
$2,290,994
Other
$536,391
DigitalX is growing a portfolio of digital finance products and services to transform the way investors and listed company customers
originate, invest, and transact with their assets.
The Company’s two core products - Drawbridge and Sell My Shares - are well positioned for growth opportunities arising from the
adoption of distributed ledger technologies within major financial securities markets such as the ASX.
Additionally, the Company is actively investigating the development of new applications at the frontier of blockchain technology
development through its partnership with the Digital Finance CRC. Early-stage concepts include the tokenisation of real-world
assets, and the development of web3 infrastructure to support emerging internet economies such as distributed autonomous
organisations (DAOs).
Drawbridge
Drawbridge experienced continued growth during the year in new listed company clients adopting
the application to digitise compliance with their internal share trading policies.
During the period the strategic focus for Drawbridge was on the release of new features designed to service larger listed companies
with greater employee numbers, as well as the execution of marketing strategies to acquire and build product awareness among
target customers in the corporate governance profession.
Ongoing marketing strategies to acquire additional clients were successfully implemented over the period, with Drawbridge
producing and participating in selected industry events, panel webinars, thought leadership content, digital advertising campaigns,
and lead generation through free services designed for its target customer base of governance executives. Furthermore, Drawbridge
continued to gain industry recognition during the year, receiving a feature in ASX Ltd’s 2021 Annual Report as a highlighted DLT app.
DIGITALX LTD | 2022 ANNUAL REPORT | 7
The Drawbridge mobile app now provides directors and employees with a share
trading feature, so that they can easily buy and sell shares subject to their internal
trading policy. The feature was released after development work to integrate the
app with Sell My Shares, the Company’s recently acquired online trade execution
business. As a result, Drawbridge users can now execute trades in-market upon
receiving compliance approval. Importantly, this feature milestone was the first
step in executing the product’s monetisation strategy which is centred on driving
transactional brokerage revenues beyond software as a service subscription fees.
Development work also progressed through design and planning discussions with
ASX for becoming one of the first applications to integrate with Synifini - the ASX’s
distributed ledger technology platform. This will see the Drawbridge application
utilise Synfini to host its cloud based DAML ledger, and enable future integration
with other DAML based financial markets applications also within the Synfini
ecosystem.
Sell My Shares
Sell My Shares is Australia’s leading provider of
online share sales for customers seeking to complete
a one-off share sale without the hassle of opening an
ongoing brokerage account. Common customer use cases include finding and
selling shares that are lost, acquired via IPO or demutualisation, or needing to be
sold by executors of a deceased estate. The Company acquired the business in
September 2021, for $1.64m plus $0.25m deferred consideration, because of its
ability to be integrated with Drawbridge, as well as its strategic potential to benefit
from the expected upside of increased digitisation within Australia’s financial
securities market via the CHESS replacement system.
The priority for the year was the successful completion of transitioning Sell My Shares’ staff, systems, and office location to DigitalX.
The move resulted in no negative impacts on customers and saw significant improvements in revenues.
On 20 April 2022 the Company announced that the escrow period for the Sell My Shares acquisition had completed, and actual
revenue was 17.9% higher compared to the acquisition’s milestones based on seasonally adjusted forecasts. Total share sales for
the period was $84.8m.
Following Sell My Shares’ migration to DigitalX, the Company planned a development roadmap to grow the business through
technology improvements and new service offerings to customers. Development prioritised focus on items with the highest near-
term impact on revenue first, such as user experience improvements designed to increase customer conversion rates of existing
visitors to the site. Improvements have been rolled out over the year including integration with Drawbridge, infrastructure upgrades
and a new back-end system to allow the business to scale quicker. Product development continues with the Company expecting to
launch to new Sell My Shares products in Q1 and Q2 FY2023 focussed on share sale settlement enhancements and a platform for
B2B sales.
The financial report for the period ended 30 June 2022 for Sell My Shares only includes results from 30 September 2021 onwards.
ASIC Regtech Grant
As part of expanding its Drawbridge application, the Company completed its regtech feasibility study in collaboration with ASIC
following successful selection for Federal Government funding as previously announced. The study resulted in the discovery and
development of a promising approach to efficiently identifying regulatory issues within large volumes of ASX company
announcement text using machine learning techniques. Completion of the feasibility study means that DigitalX is one of five grant
recipients now eligible for an additional two lots of funding for up to $1m per recipient. If successful, the use of this grant funding
will focus on the further development and commercialisation of the solution to potential customers and regulators such as ASIC.
Successful grant recipients are expected to be announced by the Department of Industry within the third quarter of 2022.
DIGITALX LTD | 2022 ANNUAL REPORT | 8
Blockchain node development to drive validation revenue
The June 2022 quarter also saw the development team begin testing the deployment and operation of nodes for two blockchain
networks. An Ethereum node to generate interest-like returns on the Company’s Ethereum (ETH) holdings is the first objective.
Returns are generated through the process of staking, where nodes are rewarded for providing computational power to the
blockchain validation process while being required to lock or stake a given amount of ETH. The first node was live by the end of July
2022.
The ongoing development of blockchain-based nodes is being used to underpin the Company’s ability to be a provider and validator
of data about real-world assets on-chain, which is foundational to the digitisation and unlocking of new real-world assets through
tokenisation.
Digital Finance Cooperative Research Centre (CRC)
Following the successful establishment of the Digital Finance CRC (DFCRC) in late 2021 with over
$60M of grant funding received by the DFCRC, the Company has begun its early-stage scoping
activities in defining its project involvement and areas of research focus expected to commence
early in 2022. The DFCRC held its inaugural AGM on 20 Dec 2021.
The DFCRC brings together leading university researchers in partnership with industry to solve real world problems using leading
technologies. DigitalX has begun the recruitment process for hiring several PhD candidates to undertake research on industry
initiatives in partnership with DigitalX, focused on digital governance and asset tokenisation as part of its role in the DFCRC.
Current areas of focus for DigitalX include risk and investment management strategies for realising a return from digital assets on
corporate balance sheets, and how emerging digital organisational models such as decentralised autonomous organisations (DAOs)
can be used for coordination of real-world investment decisions. Future proposals are expected to be developed later in the year for
consideration in allocating funding to specific projects between industry partners such as DigitalX.
Additionally, the Company has welcomed its first PhD research student through the DFCRC, who commenced working full-time
within the DigitalX team to research and develop initiatives in key focus areas such as asset tokenisation strategies and emerging
crypto-native governance models such as Decentralised Autonomous Organisations (DAOs).
DIGITAL ASSET FUNDS MANAGEMENT
DigitalX is the investment manager of digital asset investment products for qualified investors to invest in
digital assets through a familiar, secure and regulated structure. The Company operates two professionally
managed wholesale funds, the DigitalX Bitcoin Fund and the DigitalX Digital Asset Fund, a diversified basket
of leading digital assets. The DigitalX Funds solve the technical and risk management challenges of investing in this emerging asset
class for high-net-worth and institutional investors.
The DigitalX Funds provide exposure to a growing, yet volatile asset class and are presented to investors from the perspective of a
long term investment horizon. The funds under management of the division grew to a peak of $40.4m over the period with $4.4m of
new capital inflows with the business posting funds under management of $13.4m at year end. The pullback in funds under
management is attributable to the fall in digital asset prices as a result of heightened global uncertainty due to rising interest rates,
record high inflation and uncertainty around global conflict, as seen across other global financial markets.
During the period the Company’s Bitcoin Fund (ISIN: AU60BQC79571) received an investment grade research rating from well-
known and respected investment research house, SQM Research. The investment grade rating on the Company’s Bitcoin Fund
represents a significant milestone in that it was one of the first research-rated digital asset fund in Australia.
As part of the research rating process, the Fund was reviewed on a number of key areas including strategy, team, performance,
governance and compliance, fees and expenses, liquidity, and risks. Following this external assessment of the Fund’s credentials, the
investment grade rating now provides institutional investors with increased confidence for investing in the Company’s Bitcoin Fund.
During the year, the Company joined the Alternative Investment Management Association (AIMA) and presented at the AIMA
Australia Annual Forum. In addition to this, the Company also joined the Financial Planners Association (FPA). These memberships
provide further opportunities for the Company to promote and present the Company’s fund products to its target market.
DIGITALX LTD | 2022 ANNUAL REPORT | 9
The Company’s Bitcoin Fund and DigitalX Digital Asset Fund were also listed on the Mason Stevens distribution platform during the
year further enhancing the distribution channels for the fund.
Over the period, the depth and experience of the funds management team was bolstered by the addition of new hires covering
funds management, funds operation and digital asset research. The additional experience and expertise have enabled the strategy
to evolve to a more active investment strategy which aligns with the increase in the maturity of the marketplace. The strategy
enables the funds management team to deliver greater risk adjusted performance for investors and provide a further key
differentiator to future competitors seeking to introduce passive digital asset investment products. The team was further bolstered
by the appointment of Jeremy Balding as Head of Funds Management / Portfolio Manager subsequent to the end of the year.
Jeremy joins the Company from Morgan Stanley where he spent over 18 years across various roles including most recently as Head
of Electronic Trading.
CORPORATE
Strategy
As foreshadowed in the March 2022 Quarterly Report the Company worked on a strategy refresh following the appointment of new
CEO, Lisa Wade, and using her extensive experience to build on the foundation of the existing business and strategy.
During the June quarter, the Board approved the strategy refresh incorporating the short-term strategic focus on maximising revenue
growth and setting a long-term strategic vision for the business laying the foundation for growth in the next 5 years while generating
shareholder value. The short-term strategic focus on maximising revenue centres around:
• Accelerating Sell My Shares new product development and revenue streams;
• Data validation and staking returns on digital asset treasury;
•
Leveraging Drawbridge as the Web3 gateway for corporates;
• New fund products with a focus on tokenised real word assets;
• Venture investments and incubation; and
• Underpinning this strategy remains a core focus on ESG and cost consciousness.
Appointment of Chief Executive Officer
After an extensive executive search process, the Company appointed highly experienced finance industry executive Lisa Wade as the
Company’s new Chief Executive Officer.
Ms Wade has nearly 30 years of finance and financial markets experience working in organisations such as Citigroup, Bendigo Bank
and most recently as Head of Digital Innovation and Sustainability at National Australia Bank (NAB). She has a strong background in
blockchain project development, having recently led the Project Atom Central Bank Digital Currency project (CBDC), a collaborative
research project between the Reserve Bank of Australia, CBA and Perpetual, and Project Carbon, a global strategic alliance tokenising
voluntary carbon credits with ITAU, CIBC, Natwest and NAB. Ms Wade also has a strong background in funds management.
Prior to her current role, she gained extensive experience managing investment portfolios with a Clean Energy Fund and the ESCOR
Group. She has also been a Director at Citigroup where she specialised in arbitrage and derivatives.
Ms Wade commenced in February 2022.
Appointment of Non-Executive Director
During the year the Company appointed Mr Greg Dooley as a Non-Executive Director. Mr Dooley is an experienced corporate executive
and was formerly the Managing Director of leading international share registry company, Computershare Investor Services Pty Limited
for 13 years before retiring in July 2020. During his time at Computershare Mr Dooley also served as Managing Director of the
Computershare Fund Services division, which offered registry services for unlisted funds. Mr Dooley holds a Bachelor of Economics
from Macquarie University, a Diploma of Applied Finance and Investment and has completed the Australia Institute of Company
Directors’ Company Directors course.
DIGITALX LTD | 2022 ANNUAL REPORT | 10
Conversion of treasury to XAUD
During the period the Company adopted leading stablecoin1, XAUD2, as part of its ongoing treasury & digital asset management
solutions. The Company has converted an initial $500,000 into XAUD. As the blockchain economy evolves, XAUD provides native
integration and settlement in the Web3 ecosystem and the Company is excited to be a part of this evolution.
Existing stablecoin products have focused mostly on US dollars with recent reports suggesting total supply of US dollar stable coins
exceeding $180bn. The development of an Australian dollar stablecoin product provides the same level of functionality but without
the foreign exchange risk of holding US dollars. The XAUD token is issued, managed, and secured using blockchain technology,
specifically the Ethereum blockchain. The tokens are built to the Ethereum ERC-20 standard for ease of integration with existing
industry platforms and applications, whilst harnessing the advantages of Blockchain such as speed, accessibility, security of ownership
and transparency. The XAUD reserves are held cash, cash equivalents, Australian bank deposits, Treasury notes, APRA regulated
Authorised Deposit-Taking Institution issued hybrids and corporate bonds issued in Australian Dollars with a minimum S&P credit
rating of A-.
Environment, Social, and Governance (ESG) Framework
DigitalX is charting a course to build resilience and enhance our social licence through a greater commitment to long-term,
sustainable value creation that embraces the wider demands of people, planet and shared prosperity.
With this in mind, the Company has adopted the World Economic Forum (WEF) ESG framework and Management has set up an
impact measurement plan for each sustainability area which includes, but is not limited to, governance, anti-corruption practices,
ethical behaviour, human rights, carbon emissions, land use, ecological sensitivity, water consumption, diversity and inclusion, pay
equality and tax payments.
To ensure that DigitalX can measure, monitor, and report on its ESG disclosure progress, the Company engaged impact monitoring
technology platform Social Suite to streamline the disclosure and ongoing ESG reporting process. The Company’s goal is to
demonstrate commitment and progress on making ESG disclosures, but more broadly, aims to progress a range of ESG benchmarks
as set out by the WEF’s ESG White Paper.
Additional information as well as the most up to date report are available on the Company’s website https://www.digitalx.com/esg.
•
•
•
•
The Company followed through on its work around beginning to offset its environmental impact of its corporate activities
and bitcoin holding. During the year, the Company offset 60t of carbon dioxide through a unique partnership3 with
Metacarbon Inc. whereby the carbon offsets are represented through a non-fungible token (NFT).
In line with the strategy work and the purpose pillar of the WEF framework, the Company completed an exercise to review
and re-define its core purpose. The results of this activity will be communicated in conjunction with the strategy refresh
presentation noted above.
The Company completed its annual board skills matrix update and review in line with the ASX Corporate Governance
Principles and the board skills component of the WEF framework. As part of this work ESG factors have been incorporated
into the matrix.
The Company completed the implementation work for its new human resources (HR) system to allow the Company to
accurately track, measure and report on the people components of its ESG strategy including better reporting around
diversity and training.
1 A stablecoin is a digital currency that is pegged to a “stable” reserve asset like the U.S. dollar, Australian dollar, or gold. Stablecoins are designed to reduce volatility
relative to unpegged cryptocurrencies like Bitcoin.
2 www.xaudtoken.io
3 https://app.carbon-creatures.com/transparency/digitalx-koala
DIGITALX LTD | 2022 ANNUAL REPORT | 11
•
•
•
•
•
The Company completed its annual risk review in line with ASX Corporate Governance Principles and the risk component of
the WEF framework. As part of this work ESG factors have been incorporated into the risk register and further uplift in the
Company’s risk management process have been approved including the appointment of a highly experienced and
dedicated risk resource.
The Company has begun to develop a methodology for quantifying the environmental impact of its bitcoin holding with the
view to offsetting the carbon exposure with voluntary carbon offsets;
Following recent key hires, the Company’s gender diversity ratio has improved to 39%;
Commenced purchasing voluntary offsets for any domestic and international air travel; and
The Company has also undertaken significant work on its internal systems to track information required under ESG
disclosures.
OTCQB Listing
During the year the Company upgraded its US listing with OTC Markets to the OTCQB. Upgrading to the OTCQB offers the Company
the opportunity to further build visibility, expand liquidity and further diversify its shareholder base in the US which has shown a deep
understanding of blockchain and blockchain related companies with companies like Coinbase (NASDAQ: COIN), Marathon Digital
(NASDAQ:MARA), Riot Blockchain (NASDAQ:RIOT) and Microstrategy (NASDAQ: MSTR) all completing significant raisings, like DigitalX,
during the last twelve months to further advance their blockchain related business or to acquire digital assets on balance sheet.
BAM and xbullion
Bullion Asset Management Pte Ltd (BAM), a Singapore based bullion technology business utilising blockchain technology and is a key
investment for the Company as part of its blockchain venture strategy. DigitalX currently holds 16.9% of BAM.
Xbullion allows investors to acquire digitally transferable ownership of physical gold and silver bullion that is vaulted, audited and
insured for a fraction of the cost of traditional measures. DigitalX was responsible for building the core technical infrastructure of
xbullion which enabled the product to go live to the market.
During the year, BAM listed the gold (xbullion) and silver (SILV) token on additional tier one digital asset exchanges (including Bittrex)
and raised additional capital from digital asset firm Cadenza Capital Management.
In addition to this, BAM entered into a joint venture with Leonie Hill Ai Pte Ltd for the development of an Australian dollar backed
stablecoin (XAUD).
DigitalX Treasury Holdings & Investments
The DigitalX corporate treasury provides shareholder’s exposure to a variety of digital asset and digital finance projects, which the
Company has used its market expertise and skills in identifying, securing and managing on an ongoing basis in order to generate
value.
As at 30 June 2022, the company held the following major treasury assets:
• Directly holding in Bitcoin and other digital assets (See Note D4)
•
•
•
Investment in Bullion Asset Management (See Note D5)
Investment in DigitalX BTC Fund and DigitalX Fund (See Note D5)
Investment in Human Protocol (See Note D4)
Recovery actions
The Company notes that it had previously commenced proceedings in the District Court of Massachusetts to secure the rights to
Bitcoin that has been recovered by liquidators of historical crypto exchange, Mt Gox. In February 2014, prior to the Company
acquiring its Bitcoin mining business and re-complying with Chapters 1 and 2 of the ASX Listing Rules, the Mt Gox Bitcoin Exchange
DIGITALX LTD | 2022 ANNUAL REPORT | 12
was shut down after it was hacked. As set out in the Company’s Prospectus dated 12 May 2014 (2014 Prospectus), one of the
subsidiaries acquired by the Company lost access to 351 Bitcoin as part of that hack.
The Company became aware that Mr Alex Karis, a former Director of the Company, had lodged a claim with the bankruptcy trustee
of Mt Gox for the 351 Bitcoin in his own name, despite Mr Karis having entered into a deed (Deed) declaring that he holds the
bitcoin on trust for the subsidiary of the Company (as referred to in Section 11.17 of the Company’s 2014 Prospectus). This matter
remains ongoing in the District Court of Massachusetts and the Company will update the market at the appropriate time.
The Company notes that Mr Karis had filed proceedings in the Federal Court of Australia seeking to have the Deed declared void,
other related relief, and alleged debts he claims are owing to him by the Company. Follow the initial engagement with legal counsel,
the Company still asserts that the Deed is binding on Mr Karis and that it does not owe the claimed debts. The Company intends to
defend these proceeds to the fullest extent. By the end of the June quarter the matter was still awaiting direction from the Court on
the case management process. The Company will provide updates to the market in relation to these matters as appropriate.
Environmental regulation
The Group is not subject to significant environmental regulation in respect of its operations.
Significant changes in the state of affairs
In addition to the matters noted above in the operating and financial review, the Group also announced the following significant
changes and updates to the market during the financial year which contributed to the overall performance and position of the Group
at the end of the financial year:
Date
Announcement
Impact1
Link2
Dec 2021
Lisa Wade appointed as Chief Executive Officer
Aug 2021
Greg Dooley appointed as Non-Executive Director
Sept 2021
DigitalX acquires Sell My Shares
Nov 2021
DigitalX entry into Digital Finance CRC
1 Refer to the relevant section of the Report for the impact of the change.
2Refer to ASX announcement for full details.
OFR
OFR
Revenue
Goodwill
OFR
Link
Link
Link
Link
Dividends
No dividends have been paid or declared up to the date of this report. The Directors have not recommended the payment of a dividend
in the current financial year.
Any future determination as to the payment of dividends by the Company (and the potential creation of a dividend policy for that
purpose) will be at the discretion of the Directors and will depend on the availability of distributable earnings and operating results
and financial condition of the Company, future capital requirements and general business as well as other factors considered relevant
by the Directors.
No assurance in relation to the payment of dividends or franking credits attaching to dividends can be given by the Company.
Risks
As a business operating in the digital asset ecosystem, the Company considers the risks and uncertainties associated with the digital
assets and distributed ledger platforms largely related to technology, safekeeping of digital assets, fluctuation of asset prices,
regulatory and compliance, and the continually evolving nature of the digital asset markets.
DIGITALX LTD | 2022 ANNUAL REPORT | 13
Key Risks
Price Risk of
Digital
Assets
Impact
The Group holds digital assets as a balance
sheet asset and manages digital assets on
funds
behalf of clients
management business. Price volatility of
digital assets may cause impact to the
Group’s performance.
through
the
Safeguarding
of Digital
Assets
Due to the emerging nature of digital assets,
is a heightened risk around the
there
security and management of access to digital
assets.
Blockchain
technology
Blockchain technology is a new and nascent
technology that continues to evolve from a
technological perspective. The Company’s
funds and product development business
both utilise blockchain technology.
Mitigation
Price volatility is inherent to the digital asset markets. The
Company’s position has been as a long-term holder of bitcoin but as
the market has begun to mature the Company has started to
diversify into other digital asset holdings such as Ethereum. The
Company will, during periods of heightened volatility, review its
core positions from a acquisition or divestment perspective. The
funds business will review the holdings monthly as part of the
investment committee process and limits exposure to anyone asset
to 40% inline with the investment memorandum.
The Company and the Funds both utilise best in class custodians to
manage the security and management of digital assets with the
objective to maximise the amount held in cold storage.
The Custodian also maintains its own insurance policy over digital
asset balances which proportionally covers digital assets held in
cold storage.
The Company mitigates this risk through a number of different
mechanisms such as, hiring staff experienced in digital assets and
blockchain technology and supporting ongoing training and
development, rigorous deployment processes for products and due
diligence and testing on new blockchain technology service
providers such as custodians, wallets, exchanges and smart
contracting languages.
Regulatory
regime
around
Digital
Assets
Impact of
climate
Digital assets are an evolving asset class and
the regulation regime around digital assets
continues to change.
Where applicable, the Company maintains an Australian Financial
Services Licence authorisations for dealing in digital assets and has
done so since 2018.
The Company continues to monitor ongoing changes in legislation
for
impacts on the business. Most recently, the Company
responded to the Treasury Consultation paper on Crypto Asset
Secondary Service Providers.
During the year, as part of the ongoing evolution and uplift in risk
practices, the Company also implemented a fortnightly financial
service compliance meeting, in addition to it’s quarterly review, and
appointed a Chief Risk Officer.
During the period the Company migrated its core technology
infrastructure to a Tier 1 service provider with carbon neutral
emissions from it’s data centres.
The Group has also begun commencing offset the carbon emissions
from its Bitcoin holding as disclosed in its ESG Baseline Report.
Furthermore, the Company has also begun to diversify it’s digital
asset portfolio to assets that utilise lower energy consensus
mechanisms such as Ethereum’s proof of stake.
and
travel
The Company’s current environmental
impact is primarily through its physical office
locations,
technology
infrastructure and has limited exposure to
physical assets such as plant, machinery and
equipment. However, the environmental
impact of digital assets continues to be a
complex and evolving matter.
Business
continuity
and cyber
As a technology business focussed on digital
assets business continuity with respect to
cyber and IT are an increasing risk in the
current environment with the ongoing
adoption of remote working and adoption of
software as a service for key business
applications.
To mitigate risks the Company has a cloud first approach to
managing it’s technology infrastructure and applications reducing
the reliance on physical office locations supported by the use of
best practices suitable to the size and nature of the organisation
(such as white labelled IP, multifactor authentication etc.). Further
to this, each year staff undertake a cyber security refresher led by
the Company’s Chief Technology officer.
DIGITALX LTD | 2022 ANNUAL REPORT | 14
Events occurring after the reporting period
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected the Group’s operations, results or state
of affairs, or may do so in future years other than those set out below.
Date of event
Details of event
29 August 2022
29 September 2022
On 29 August 2022 the Company issued 3,075,000 ordinary shares, 10,000,000 options exercisable at
$0.05 and 15,640,000 exercisable at $0.11.
Due to the volatile nature and the materiality of the digital assets held, we disclose the value of material
digital assets held by the Group, excluding the DigitalX Fund and DigitalX BTC Fund and unlisted digital
assets, as at the close date of the 29 September.
Coin Symbol
Coin Amount
$AUD Price
at 30 June
$AUD Spot Price
at 29 Sept
BTC
HMT
Total
212.86
12,500,000
-
$28,684
$0.665
-
$30,074
$0.0978
-
$AUD Balance
$6,401,551
$1,221,875
$7,623,426
DIGITALX LTD | 2022 ANNUAL REPORT | 15
REMUNERATION REPORT (AUDITED)
Message from the Board of Directors
The Directors present this Remuneration Report, which forms part of the Directors’ Report for the financial year ended 30 June 2022.
The Directors note that Director and Executive remuneration continues to be an area that receives stakeholder focus and scrutiny, as
such the Remuneration Report has been structured in an attempt to provide transparency and clarity to readers around the
framework, policies and remuneration of DigitalX Limited’s Directors and its Executives.
The Remuneration Report has been set out under the following main headings:
A. Key Management Personnel
B. Remuneration policy, including the relationship between remuneration policy and Company performance
C.
Key terms of employment contracts
D. Remuneration of Directors and Executives
E.
Share options and performance rights granted to Directors
F.
Shareholdings of Directors
G. Related party transactions
H.
I.
Future remuneration developments
Definitions
The information provided in this Remuneration Report has been audited as required by Section 308(3C) of the Corporations Act 2001.
A. KEY MANAGEMENT PERSONNEL
The Key Management Personnel (KMP) of the Group consist of the Board and Executives. This is the case due to the size and scale of
the Group’s current operations. All the named persons held their current position for the whole or part of the financial year and since
the end of the financial year unless otherwise stated.
KMP
Toby Hicks
Position
Status
Term as KMP
Chairman and Non-Executive Director
Non-Executive KMP
Full Year
Peter Rubenstein
Non-Executive Director
Non-Executive KMP
Full Year
Gregory Dooley
Non-Executive Director
Non-Executive KMP
From 3 August 2021
Leigh Travers
Executive Director
Executive KMP
Ceased 6 September 2021
Lisa Wade
Chief Executive Officer
Executive KMP
From 24 February 2022
Jonathon Carley
Chief Financial Officer
David Beros
Chief Product Officer
Executive KMP
Executive KMP
Full Year
Full Year
B.
REMUNERATION POLICY
For the year ended 30 June 2022 the Board as a whole determined and
reviewed compensation arrangements for the Executive Director and where
applicable the Executive Team. The Board assessed the appropriateness of the
nature and amount of emoluments of such officers on a periodic basis by
reference to relevant employment market conditions with the overall objective
of ensuring maximum shareholder benefit from the retention of a high-quality
team. The objective of the Company’s remuneration framework was to ensure
reward for performance was competitive and appropriate to the results
delivered.
The Board aims to ensure that executive
rewards satisfied the following key criteria for
good reward governance practices:
Competitiveness and reasonableness;
Acceptability to shareholders;
Performance linked;
Transparency; and
Capital management.
DIGITALX LTD | 2022 ANNUAL REPORT | 16
ELEMENTS OF REMUNERATION
Base pay
Directors and Executives are offered a competitive base salary. Base pay for executives is reviewed annually by the Board to ensure
that individual executive’s pay is competitive with the market and is also reviewed upon promotion or additional responsibilities.
There is no guarantee of base pay increases fixed in any executive or Director contracts.
Commission
There is no entitlement to commissions-based remuneration.
Short term incentives (STI)
Chief Executive Officer
To align the remuneration of the CEO and the performance of the Company, the CEO was issued STI in the form of options under her
Executive Services agreement. Further details are noted below and in Note F2.
Staff
For the purpose of incentivising and tying the rewarding of the Company’s staff to the performance of the Company, the Board has
determined that it may, at its discretion, issue shares or other similar instruments from time to time as a reward. There were no
instruments issued during the financial year.
Long term incentives (LTI)
There were no LTI issued for the year ended 30 June 2022 other than those issued to the Chief Executive Officer as part of joining the
Company.
Performance Metrics
At 30 June 2022 there were no STI or LTI in place with performance metrics other than the service based conditions noted above.
DIGITALX LTD | 2022 ANNUAL REPORT | 17
RELATIONSHIP BETWEEN THE REMUNERATION POLICY AND COMPANY
PERFORMANCE
As noted in Sections A & B, the Board seeks to align the interests of the Executive Team
with those of the shareholders when setting future short and long-term benefits. For the
year ended 30 June 2022 the total remuneration is reflective of the remuneration strategy
with adjustments made to reflect the current state of the Group and the change in
performance from the previous year, this is evident from the relationship between:
•
•
Total KMP reported remuneration decreased 43% from $1,334,879 to $856,560
primarily reflective of a decrease in vested performance-based remuneration. Total
base remuneration (including other benefits) was up 1.8% from $774,008 to $787,965.
At-risk remuneration was down 87.8% from $560,871 to $68,594 in line with the
financial performance of the Company;
The overall remuneration trend is also consistent with the share price performance
and earnings per share (EPS) performance as evident in the graphs to the right;
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2,500,000
2,000,000
• Decrease in vested at risk remuneration to $190,000 (62%) in line with the initial grant
1,500,000
of options to new director, Greg Dooley.
The Company is not yet at stage of its development where it considers benchmark returns
against an ASX peer group (blockchain focussed) relevant based on limited inclusions and
comparable data.
600,000
500,000
400,000
300,000
200,000
100,000
0
560,871
At Risk Remuneration
2021
2022
68,594
1,000,000
500,000
0
10,000,000
5,000,000
0
(5,000,000)
(10,000,000)
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Share price & total KMP
remuneration trend
At risk
Base
Share price at the EOY
Basic EPS & total KMP
remuneration trend
At risk
Base
Basic earnings per share
0.080
0.070
0.060
0.050
0.040
0.030
0.020
0.010
0.000
0.015
0.010
0.005
0.000
(0.005)
(0.010)
(0.015)
Net profit &
KMP remuneration
Net profit/(loss) before tax
Total reported remuneration
2018
2019
2020
2021
2022
DIGITALX LTD | 2022 ANNUAL REPORT | 18
RELATIONSHIP BETWEEN THE REMUNERATION POLICY AND COMPANY PERFORMANCE – FIVE YEAR DATA TABLE
The table below includes the remuneration and performance data from the preceding five (5) financial years used to analyse the linkage between remuneration and performance in the section
above.
30 June 2018
$AUD
30 June 2019
$AUD
30 June 2020
$AUD
30 June 2021
$AUD
30 June 2022
$AUD
Revenue & other income from all operations
14,389,647
3,711,552
554,210
9,985,893
2,536,586 ↓
Net profit/(loss) before tax
3,770,812
(3,666,683)
(7,108,771)
6,756,954
(2,839,468) ↓
Total reported in remuneration report
2,088,661
1,180,152
934,692
1,334,879
856,560 ↓
Remuneration - Base
Remuneration - At risk
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Share Price at the start of year
Share price at the end of year
Final dividend
697,064
1,391,597
0.009
0.007
0.036
0.075
-
607,590
572,562
(0.007)
(0.007)
0.075
0.055
-
574,173
360,519
(0.011)
(0.011)
0.055
0.017
-
774,008
560,871
0.010
0.009
0.017
0.051
-
787,965 ↑
68,594 ↓
(0.004) ↓
(0.004) ↓
0.051
-
0.026 ↓
-
-
DIGITALX LTD | 2022 ANNUAL REPORT | 19
C. KEY TERMS OF EMPLOYMENT CONTRACTS
Executives
Ms Lisa Wade
Chief Executive Officer
Under an Executive Services entered into between Ms Wade and DigitalX, Ms Wade is appointed as Chief Executive Officer, in effect
from 24 February 2022. The employment will be ongoing until it is terminated in accordance with Ms Wade’s Executive Services
Agreement. The employment may be terminated by either party giving 6 months’ written notice (although less than 6 months’ notice
is required by DigitalX in certain circumstances such as Ms Wade’ illness, absence, material breaches or misconduct in which case Ms
Wade will not be entitled to receive any payment in lieu or compensation as set out below). On termination of her employment and
where DigitalX elects to make payment in lieu of notice, the Company must pay Ms Wade a payment equal to her salary for the
remainder of the notice period. Ms Wade will be under restraint and non-solicitation clauses for up to 24 months after the termination
of her employment.
Ms Wade’s current salary is $AUD300,000 per annum (exclusive of superannuation) subject to annual salary reviews and her
reasonable expenses will also be paid by the Company.
Mr Jonathon Carley
Chief Operating & Chief Financial Officer
Under an amended Employment Agreement entered into between Mr Carley and DigitalX, Mr Carley was appointed as Chief Financial
Officer, in effect from 1 July 2019. The employment will be ongoing until it is terminated in accordance with Mr Carley’s Employment
Agreement. The employment may be terminated by either party giving 1 months’ written notice (although less than 1 months’ notice
is required by DigitalX in certain circumstances such as Mr Carley’s illness, absence, material breaches or misconduct in which case
Mr Carley will not be entitled to receive any payment in lieu or compensation as set out below). On termination of his employment
and where DigitalX elects to make payment in lieu of notice, the Company must pay Mr Carley a payment equal to his salary for the
remainder of the notice period. Mr Carley will be under restraint and non-solicitation clauses for up to 12 months after the termination
of his employment.
Mr Carley‘s current salary is $AUD220,000 per annum (exclusive of superannuation). Mr Carley is subject to annual salary reviews and
his reasonable expenses will also be paid by the Company.
Mr David Beros
Chief Product Officer
Under an Employment Agreement entered into between Mr Beros and DigitalX, Mr Beros was appointed as Chief Product Officer, in
effect from 1 July 2019. The employment will be ongoing until it is terminated in accordance with Mr Beros’s Employment Agreement.
The employment may be terminated by either party giving 1 months’ written notice (although less than 1 months’ notice is required
by DigitalX in certain circumstances such as Mr Beros’s illness, absence, material breaches or misconduct in which case Mr Beros will
not be entitled to receive any payment in lieu or compensation as set out below). On termination of his employment and where
DigitalX elects to make payment in lieu of notice, the Company must pay Mr Beros a payment equal to his salary for the remainder of
the notice period. Mr Beros will be under restraint and non-solicitation clauses for up to 12 months after the termination of his
employment.
Mr Beros’ current salary is $AUD220,000 per annum (exclusive of superannuation).
Under all of the Employment Agreements above, DigitalX, in its absolute discretion acting reasonably, can assign and transfer the
employment to any of DigitalX’s Related Bodies Corporate.
DIGITALX LTD | 2022 ANNUAL REPORT | 20
Non-Executive Directors
Non-Executive Directors remuneration arrangements include compensation in the form of annual Directors’ fees in accordance with
their relevant service agreement. The Non-Executive Directors from time to time may receive incentive compensation in the form of
share-based payments (as approved by Shareholders).
For the year ended 30 June 2022, all Non-Executive Directors received a base fee of $AUD50,000 exclusive of entitlements, the
Chairman is entitled to an addition $AUD25,000 for fulfilling the duties of the Chair.
Amounts payable to Director controlled entities for services provided by Directors for the year ending 30 June 2022 is detailed in the
following table of this report. The Group may carry out consulting activities with the Directors on an arm’s length basis in the normal
course of business.
DIGITALX LTD | 2022 ANNUAL REPORT | 21
D. REMUNERATION OF DIRECTORS AND EXECUTIVES
The compensation for each Director and executive for the period is contained in the following table:
Year ended 30 June 2022
Name
Short-term employee benefits
Post-employment
benefits
Share-based payment
Total
At Risk %
Salary & Fees
$AUD
Director Fees
$AUD
Other Benefits
$AUD
Superannuation
$AUD
Shares
$AUD
Options and
performance rights1
$AUD
Non-Executive
Directors
Toby Hicks
Peter Rubinstein
Greg Dooley
Executive Directors
Leigh Travers3
Other KMP
Lisa Wade6
Jonathon Carley
David Beros
Total
-
-
-
76,937
101,538
204,692
189,385
68,750
50,000
41,665
-
-
-
-
-
-
-
6,875
5,000
4,604
(43,961)4
5,465
8,018
12,356
10,031
7,201
20,469
18,938
68,553
572,552
160,415
(13,555)
$AUD
75,625
55,000
-
-
-
-
190,0002
236,269
80.4%
(148,029)5
(109,587)
-
26,6237
143,381
18.6%
-
-
237,517
218,355
-
-
68,594
856,560
8.0%
-
-
-
-
-
-
-
-
1 Refer to Sections E & F of the Remuneration Report for additional details.
2 100% of the total relates to share-based payment expense for options granted on Mr Dooley’s
appointment as a Non-Executive Director of the Company. The options are fully vested.
3 Mr Travers ceased to be an employee of the Company on 6 September 2021.
4 Balance relates to reversal of accrued annual and long service leave on ceasing employment with the
Company. The total amount paid is reflected in salary and fees.
5 100% of the total relates to share-based payment expense reversed on ceasing employment.
6 Ms Wade commenced as Chief Executive Officer on 24 February 2022.
7 The total relates to the share-based payment expense for options issued but not yet vested. Details on
the option is disclosed in Note F2.
DIGITALX LTD | 2022 ANNUAL REPORT | 22
Year ended 30 June 2021
Name
Short-term employee benefits
Post-employment
benefits
Share-based payment
Total
At Risk %
Salary & Fees
$AUD
Director Fees
$AUD
Other Benefits
$AUD
Superannuation
$AUD
Shares
$AUD
Options and
performance rights1
$AUD
$AUD
Non-Executive
Directors
Toby Hicks
Peter Rubinstein
Executive Directors
Leigh Travers
Other KMP
Jonathon Carley
David Beros
Total
-
-
50,0002
50,0004
-
-
4,750
4,750
14,435
19,167
-
-
-
186,2523
45,9465
241,002
77.3%
100,696
45.6%
198,1907
442,209
44.8%
210,4166
193,788
175,385
579,589
-
-
-
100,000
11,119
5,125
30,680
18,410
16,662
63,739
41,9838,9
88,5009
130,483
-
-
265,301
15.8%
285,671
31.0%
430,388
1,334,879
42.0%
1 Refer to Sections E & F of the Remuneration Report for additional details.
2 Included in this total is an amount of $37,500 which related to Director’s fees to be paid in shares in
lieu of cash under a deed entered into by the Company and Mr Hicks on 23 April 2020. The fair value of
the 850,792 shares received at the time of issuance was $78,669.
3 100% of the total relates to share-based payment expense for performance rights issued and vested.
4 Included in this total is an amount of $37,500 which related to Director’s fees to be paid in shares in
lieu of cash under a deed entered into by the Company and Mr Rubinstein on 23 April 2020. The fair
value of the 850,792 shares received at the time of issuance was $78,669.
5 100% of the total relates to share-based payment expense for performance rights issued and vested.
6 Included in this total is an amount of $37,500 which related to salary to be paid in shares in lieu of cash
under a deed entered into by the Company and Mr Travers on 23 April 2020. The fair value of the 832,146
shares received at the time of issuance was $75,379.
7 Included in the total is $149,347 relating to the share-based payment expense for performance rights
issued and vested. The remaining amount $48,843 relates to performance rights issued but not vested.
8 Included in the total is a reversal of prior period accrued of $67,029 relating to a performance hurdle
satisfied in a prior period for which shares were not issued until the current period.
9 100% of the total relates to share-based payment expense for shares issued and vested.
DIGITALX LTD | 2022 ANNUAL REPORT | 23
E. SHARE OPTIONS AND PERFORMANCE RIGHTS GRANTED TO KEY MANAGEMENT PERSONNEL
Name
2022
Toby Hicks
Peter Rubinstein
Greg Dooley
Lisa Wade
Total
Opening balance
2,500,000
4,500,000
-
-
7,000,000
Options
Granted as
compensation
Exercised during the
period
Closing balance1
-
-
22,500,000
36,046,729
8,546,729
-
-
-
-
-
2,500,000
4,500,000
2,500,000
6,046,729
15,546,729
1 9,500,000 options are fully vested but remain unexercised at 30 June 2022.
2 Mr Dooley was issued with 2,500,000 options on the terms and conditions set out in the 2021 notice of annual general meeting and approved at the Company’s
AGM on 25 November 2021. There were no performance hurdles attached to the issue and 100% of the options vested on the date of issue. Further details on the
valuation are disclosed in Note F2.
3 Ms Wade was issued with 6,046,729 options on 11 April 2022 in accordance with the terms and conditions of her Executive Services Agreement. The options vest
based on satisfaction of service conditions as set out in Note F2 along with further details on the valuation. At 30 June 2022 none of the options had vested.
Name
2022
Leigh Travers
Total
Opening balance
9,000,000
9,000,000
Performance Rights
Granted as
compensation
-
-
Net other
changes
1(9,000,000)
(9,000,000)
Closing balance
-
-
1 Net change is final balance at time of ceasing to be a KMP on 6 September 2021.
F. SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
Directors
Toby Hicks
Peter Rubinstein
Greg Dooley
Leigh Travers
KMP
Lisa Wade
David Beros
Jonathon Carley
Total
Opening Balance
1 July 2021
Granted as
compensation
Conversions &
vesting
Net Other
changes1
Closing balance
30 June 2022A
8,350,792
36,334,372
-
15,191,120
-
1,623,550
1,836,634
63,336,468
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,350,792
36,334,372
171,428
171,428
2(15,191,120)
-
-
-
-
1,623,550
(186,634)
1,650,000
(15,206,326)
48,130,142
1 Net changes include initial holdings, final holdings and on-market sales as reported to the market per the respective Appendix 3X, 3Y, and 3Z.
2 Net change is final balance at time of ceasing to be a KMP on 6 September 2021.
DIGITALX LTD | 2022 ANNUAL REPORT | 24
G. RELATED PARTY TRANSACTIONS
Year ended 30 June 2022
• During the year, the Group paid Steinepreis Paganin, a law firm of which Non-Executive Chairman Toby Hicks is a partner,
$AUD47,337 for legal services rendered on various matters. This amount relates to the period of the financial year that Mr Hicks
was a Director of the Company.
• During the year, the Group paid GAD Consulting Pty Ltd AUD$500, a company of which Greg Dooley is a director for consulting
services rendered on various matters. This amount relates to the period of the financial year that Mr Dooley was a Director of the
Company.
Year ended 30 June 2021
• During the year, the Group paid Steinepreis Paganin, a law firm of which Non-Executive Chairman Toby Hicks is a partner,
$AUD39,613 for legal services rendered on various matters. This amount relates to the period of the financial year that Mr Hicks
was a Director of the Company.
H. FUTURE REMUNERATION DEVELOPMENTS
The Directors note at last year’s Annual General Meeting the Remuneration Report passed unanimously on a poll and there were no
comments on the Remuneration Report. There are no future developments planned.
DIGITALX LTD | 2022 ANNUAL REPORT | 25
I. DEFINITIONS
Key management personnel
Those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or
indirectly, including any director (whether executive or otherwise) of that entity.
Remuneration of an officer or employee of a corporation
A benefit given to an officer or employee of a corporation is remuneration if and only if the benefit, were it received by a director of
the corporation, would be remuneration of the director for the purposes of an accounting standard that deals with disclosure in
companies' financial reports of information about directors' remuneration.
Remuneration committee
A committee of the board of directors of the company; and has functions relating to the remuneration of key management personnel
for the company.
Remuneration consultant
A person:
a) Who makes a remuneration recommendation under a contract for services with the company to whose key management
personnel the recommendation relates; and
b) Who is not an officer or employee of the company.
A remuneration recommendation
(a) A recommendation about either or both of the following:
a) For one or more members of the key management personnel for a company;
how much the remuneration should be;
i.
ii. what elements the remuneration should have; or
b) A recommendation or advice about a matter or of a kind prescribed by the regulations.
ASIC may by writing declare that s.9B(1) of the Corporations Act 2001 above does not apply to a specified recommendation or
specified advice but may do so only if ASIC is satisfied that it would be unreasonable in the circumstances for the advice or
recommendation to be a remuneration recommendation. The declaration has effect accordingly. The declaration is not a legislative
instrument.
What is not a remuneration recommendation?
None of the following is a remuneration recommendation (even if it would otherwise be covered by subsection (1)):
a) Advice about the operation of the law (including tax law);
b) Advice about the operation of accounting principles (for example, about how options should be valued);
c) Advice about the operation of actuarial principles and practice;
d) The provision of facts;
e) The provision of information of a general nature relevant to all employees of the company;
f) A recommendation, or advice or information, of a kind prescribed by the regulations.
AGM
Means an annual general meeting of a company that section 250N requires to be held.
END OF AUDITED REMUNERATION REPORT
DIGITALX LTD | 2022 ANNUAL REPORT | 26
Directors’ meetings
Given the size and scale of operations of the Company, the full Board undertook the responsibilities of the Audit and Risk Committee,
Remuneration Committee and Nomination Committee.
The Directors attendances at Board meetings held during the financial year were:
Director
Toby Hicks
Peter Rubinstein
Greg Dooley
Leigh Travers
Shares under option and warrant
Board Meetings
Number eligible to attend
Number attended
13
13
12
1
13
13
12
1
As at the date of this report, there are 45,686,729 options and 55,839,003 warrants to subscribe for unissued ordinary shares in the
Company, comprising:
Date options
granted
Options
Vesting
Date
Option class
Exercise price of
options
Expiry date of
options
Number of shares
under option
10 December 2018
10 December 2018
Unlisted
$0.22
10 December 2023
2,000,000
10 December 2018
10 December 2018
Unlisted
$0.25
10 December 2023
3,000,000
10 December 2018
10 December 2018
Unlisted
$0.30
10 December 2023
4,000,000
11 July 2019
11 July 2019
Unlisted
6 December 2021
6 December 2021
Unlisted
$0.10
$0.10
$0.091
$0.118
$0.153
$0.199
30 June 2024
2,500,000
30 June 2024
2,500,000
11 April 2027
1,415,094
11 April 2027
1,470,588
11 April 2027
1,530,612
11 April 2027
1,630,435
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
$0.11
29 August 2025
15,640,000
Unlisted
$0.05
9 September 2023
10,000,000
11 April 2022
11 April 2022
11 April 2022
11 April 2022
29 August 2022
29 August 2022
Warrants
-
-
-
-
-
-
9 March 2021
9 March 2021
Unlisted
$0.10
9 March 2024
48,981,582
9 March 2021
9 March 2021
Unlisted
$0.1125
9 March 2024
6,857,421
The holders of these options do not have the right, by virtue of the option, to participate in any share issue or interest issue of the
Company or any other body corporate or registered scheme.
DIGITALX LTD | 2022 ANNUAL REPORT | 27
Shares issued on exercise of options
During the financial year, and to the date of this report, the Company issued 2,768,382 Ordinary Shares, on exercise of options.
Date
10 November 2021
Details
Unlisted
Issue Price A$
Number of Shares
0.0847
2,768,382
Shares under convertible notes
As at the date of this report, there are no convertible notes issued that are convertible to ordinary shares in the Company.
Shares issued on conversion of convertible notes
During the financial year there were no shares issued on conversion of Convertible notes.
Indemnification of officers and auditors
During the financial period, the Company paid a premium in respect of a contract ensuring the Directors, secretary and officers of the
Company and of any related body corporate against a liability incurred as such a Director, Secretary or Officer to the extent permitted
by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the
premium.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the
officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in
connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by
the officers or the improper use of their position or of information to gain advantage for themselves or someone else or to cause
detriment to the Company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs
and those relating to other liabilities.
The Company has executed a Deed of Protection for each of the Directors. The Company has not otherwise, during or since the
financial period, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a
liability incurred as such an officer or auditor.
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. No proceedings have been brought or intervened in on behalf of the company with leave
of the Court under section 237 of the Corporations Act 2001.
Non-audit services
Amounts of $AUD10,480 were paid to the auditor for non-audit, tax compliance services provided during the period. No amounts are
payable as at the date of this report. Full details of amounts paid to the auditor, BDO Audit (WA) Pty Ltd, are set out in Note C3.
The Board of Directors has considered the position and are satisfied that the provision of the non-audit services is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the
provision of non-audit services by the auditor, as noted above, did not compromise the auditor independence requirements of the
Corporations Act 2001 none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 30.
Auditor
BDO Audit (WA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
DIGITALX LTD | 2022 ANNUAL REPORT | 28
The Directors’ Report is signed in accordance with a resolution of the Directors made pursuant to Section 298(2) of the Corporations
Act 2001.
On behalf of the Board of Directors.
Toby Hicks
Chair
Perth, 30 September 2022
DIGITALX LTD | 2022 ANNUAL REPORT | 29
DIRECTORS’ DECLARATION
In the opinion of the Directors of DigitalX Limited (the ‘Company’):
(a) The financial statements, notes and the additional disclosures of the consolidated entity set out on pages 34 to 81 are in
accordance with the Corporations Act 2001 including:
(i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its performance for the
period then ended; and
(ii) Complying with Australian Accounting Standards (including the Australian Accounting Interpretations), the Corporations
Regulations 2001.
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
(c) The financial statements and notes thereto are in accordance with International Financial Reporting Standards, as stated in Note
B1 to the financial statements.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section 295A
of the Corporations Act 2001 for the financial period ended 30 June 2022.
Signed in accordance with a resolution of the Directors made pursuant to Section 295(5) of the Corporations Act 2001.
On behalf of the Directors.
N:
Toby Hicks
Chair
Perth, 30 September 2022
DIGITALX LTD | 2022 ANNUAL REPORT | 30
AUDITOR’S INDEPENDENCE DECLARATION
DIGITALX LTD | 2022 ANNUAL REPORT | 31
AUDITOR’S REPORT
DIGITALX LTD | 2022 ANNUAL REPORT | 32
AUDITOR’S REPORT
DIGITALX LTD | 2022 ANNUAL REPORT | 33
AUDITOR’S REPORT
DIGITALX LTD | 2022 ANNUAL REPORT | 34
CONSOLIDATED STATEMENT OF PROFIT OR LOSS &
OTHER COMPREHENSIVE INCOME
Revenue from operations
Other Income
Professional and consultancy fees
Corporate expenses
Advertising, media and investor relations
Employee benefit expenses
Share based payments – employee benefits
Depreciation
Realised and unrealised foreign exchange losses
Fair value movement of financial assets
Finance costs
Other expenses
(Increase)/decrease in net assets attributable to unit holders
Profit/(Loss) before tax
Income tax benefit/(expense)
Profit/(Loss) for the period
e
t
o
N
C2
C2
C3
C3
D6
Year ended
30 June 2022
$AUD
Year ended
30 June 2021
$AUD
2,318,132
218,454
(1,107,740)
(218,323)
(647,939)
(2,262,112)
(56,547)
(322,976)
(4,472)
56,424
(169,723)
(984,143)
341,497
9,709,745
276,148
(687,522)
(75,771)
(271,419)
(1,414,723)
(662,936)
(337,477)
129,159
433,670
(100,270)
(716,430)
474,780
(2,839,468)
6,756,954
-
-
(2,839,468)
6,756,954
The above statement should be read in conjunction with the accompanying notes.
DIGITALX LTD | 2022 ANNUAL REPORT | 35
CONSOLIDATED STATEMENT OF PROFIT OR LOSS &
OTHER COMPREHENSIVE INCOME (CONTINUED)
e
t
o
N
Year ended
30 June 2022
$AUD
Year ended
30 June 2021
$AUD
Profit/(Loss) for the period
(2,839,468)
6,756,954
Other comprehensive income for the period
Items that may be reclassified to profit or loss
Fair value increase/(decrease) in digital asset holdings
Exchange differences on translation of operations
(12,895,148)
(245)
14,930,755
(42,359)
Other comprehensive income/(loss) for the period, net of tax
(12,895,393)
14,888,397
Total comprehensive income/(loss) for the period
(15,734,861)
21,645,351
Total comprehensive income/(loss) attributable to:
Members of the parent entity
Profit/(Loss) per share attributable to the ordinary equity holders
of the parent:
Basic earnings/(loss) per share
Earnings per share from continuing operations
Total
Diluted earnings/(loss) per share (cents)
Earnings per share from continuing operations
Total
C5
C5
(15,734,861)
(15,734,861)
21,645,351
21,645,351
(0.004)
(0.004)
(0.004)
(0.004)
0.01
0.01
0.009
0.009
The above statement should be read in conjunction with the accompanying notes.
DIGITALX LTD | 2022 ANNUAL REPORT | 36
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Digital assets
Contract assets
Other current assets
Total Current Assets
NON-CURRENT ASSETS
Investments
Property, plant and equipment
Right to use asset
Intangible assets
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Distributions payable to unit holders
Net assets attributable to unit holders
Total Current Liabilities
NON-CURRENT LIABILITIES
Lease liabilities
Deferred tax liabilities
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained losses
TOTAL EQUITY
e
t
o
N
D3
C2
D4
D5
E1
E2
E3
C3
E2
D6
D6
E2
F1
F2
30 June 2022
$AUD
30 June 2021
$AUD
6,278,410
293,412
23,568,863
-
201,884
30,342,569
2,290,994
41,095
119,642
2,278,051
4,729,782
10,369,645
158,825
32,479,969
8,335,434
104,021
51,447,894
2,471,036
148,339
239,283
268,772
3,127,430
35,072,351
54,575,324
1,556,555
176,421
43,522
6,211,747
7,988,245
-
643
643
742,515
126,168
2,740,471
8,257,054
11,866,208
176,421
-
176,421
7,988,888
12,042,629
27,083,463
42,532,693
59,028,586
5,128,053
(37,073,176)
27,083,463
58,796,111
17,970,289
(34,233,707)
42,532,693
The above statement should be read in conjunction with the accompanying notes.
DIGITALX LTD | 2022 ANNUAL REPORT | 37
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Other income
Other expenses
e
t
o
N
Year ended
30 June 2022
$AUD
Year ended
30 June 2021
$AUD
2,230,619
(4,992,185)
38,079
(68,039)
1,260,078
(3,289,965)
212,963
-
Net cash used in operating activities
(2,791,526)
(1,816,924)
Cash flows from investing activities
Payment for intellectual property
Acquisition of property, plant and equipment
Acquisition of business
Payment for investments
Repayment of Convertible Note
Net payment for digital assets in funds
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of equity securities
Proceeds from conversion of options
Net proceeds from issue of units in fund
Distributions payable from the fund
Payments for share issue costs
Principal elements of lease payments
Net cash (used in)/provided by financing activities
(159,342)
(27,269)
(1,890,000)
(283,522)
(18,374)
-
-
(1,071,863)
250,000
(2,285,617)
(4,112,228)
-
(5,050,519)
(6,424,278)
-
9,154,085
234,842
4,355,524
(1,613,588)
-
(146,712)
2,830,066
-
6,349,173
-
(842,963)
(164,933)
14,495,361
Net increase/(decrease) in cash and cash equivalents
(4,073,688)
6,254,159
Cash and cash equivalents at beginning of period
Foreign exchange movement in cash
Cash and cash equivalents at end of period
D3
10,369,645
(17,547)
6,278,410
3,975,690
139,796
10,369,645
The above statement should be read in conjunction with the accompanying notes.
DIGITALX LTD | 2022 ANNUAL REPORT | 38
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
Reconciliation of operating cash flows to net profit
Profit/(loss) after income tax
Non-cash flows in profit/(loss)
Shares received in lieu of cash
Non-cash interest received (staking)
Depreciation
Employee share issue
Fair value adjustment of investments
Finance costs
Amortisation of right of use asset under AASB16
Increase in net assets attributable to unit holders
Other non-cash (income)/expenses including foreign exchange
Change in assets and liabilities, net the effects of purchase of
subsidiaries
Decrease/(increase) in trade and other receivables
Decrease/(increase) in contract asset
Decrease/(increase) in contract asset
(Decrease)/increase in trade payables and accruals
(Decrease)/increase in contract liabilities
(Decrease)/increase in tax payable
e
t
o
N
-
E1
F1 & F2
E2
D6
C2
C2
C3
C3
C4
Year ended
30 June 2022
$AUD
(2,839,468)
Year ended
30 June 2021
$AUD
6,756,954
-
(75,625)
203,335
56,547
(56,424)
26,819
119,641
(341,497)
(340,305)
(3,246,976)
(134,587)
-
(97,865)
687,902
-
-
(214,866)
-
199,636
662,936
(433,670)
47,259
185,821
(474,780)
(393,969)
6,335,321
(38,636)
(8,335,434)
-
237,261
(15,437)
-
Net cash provided by/(used in) operating activities
(2,791,526)
(1,816,924)
Non-cash investing and financing activities
In addition to the above, the Group also had the following non-cash investing and financing activities that impacted on the
Statement of Profit and Loss and Other Comprehensive Income and the Statement of Financial Position.
Current year
• Shares issued on conversion of options – Note F1.
• Movement in prices of digital assets – Note D4.
Prior Year
• Shares issued in lieu of cash for services performed for Bullion Asset Management.
• Shares issued on conversion of options – Note F1.
• Movement in prices of digital assets – Note D4.
• Shares issued to advisor for capital raising – Note F2.
DIGITALX LTD | 2020 ANNUAL REPORT | 39
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Consolidated Group
Balance at 30 June 2021
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive income/(loss) for the period
Shares issued during the period2
Share issue costs
Share based payment expense
Balance at 30 June 2022
1 Refer to Note F2 for reconciliation of reserve balances.
2 Refer to Note F1 for details of shares issued during the year.
Contributed Equity
$AUD
58,796,112
Reserves1
$AUD
17,970,289
Retained
Earnings/(Losses)
$AUD
Total
$AUD
(34,233,707)
42,532,694
-
-
-
234,482
(2,007)
-
-
(2,839,468)
(2,839,468)
(12,895,393)
-
(12,895,393)
(12,895,393)
(2,839,468)
(15,734,861)
-
-
53,157
-
-
-
234,482
(2,007)
53,157
59,028,586
5,128,053
(37,073,175)
27,083,463
The above statement should be read in conjunction with the accompanying notes.
DIGITALX LTD | 2020 ANNUAL REPORT | 40
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
Consolidated Group
Balance at 30 June 2020
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive income for the period
Shares issued during the period2
Share issue costs
Share based payment expense
Balance at 30 June 2021
1 Refer to Note F2 for reconciliation of reserve balances.
2 Refer to Note F1 for details of shares issued during the financial year.
Contributed Equity
$AUD
50,489,288
Reserves1
$AUD
2,227,053
Retained
Earnings/(Losses)
$AUD
Total
$AUD
(40,990,661)
11,725,680
-
-
-
9,473,216
(1,166,392)
-
6,756,954
6,756,954
14,888,397
-
14,888,397
14,888,397
6,756,954
21,645,351
-
-
-
854,839
-
-
-
9,473,216
(1,166,392)
854,839
58,796,112
17,970,289
(34,233,707)
42,532,694
The above statement should be read in conjunction with the accompanying notes.
DIGITALX LTD | 2022 ANNUAL REPORT | 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR END 30 JUNE 2022
The notes to the financial statements have been set out under the following main headings:
A. Legend
B. Basis for preparation (B1)
C. Key operating & financial results (C1 to C5)
D. Capital & risk management (D1 to D6)
E. Financial position (E1 to E3)
F. Equity (F1 to F2)
G. Group structure (G1 to G3)
H. Other disclosures (H1 to H4)
[A – LEGEND]
CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.
Critical judgements in developing and applying accounting policies
The following are the critical judgements, apart from those involving estimations (see Notes below), that the Directors
have made in the process of applying the Group’s accounting policies and that have the most significant effect on the
amounts recognised in the consolidated financial statements.
• Note C2 – Revenue recognition
• Note D4 – Digital assets
• Note D4 – Fair value of digital assets
• Note G1 – Consolidation of DigitalX Funds
• Note E3 – Business combination and goodwill
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the
end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year.
• Note F2 – Valuation of share-based payments
• Note D4 – Valuation of unlisted and low volume trading digital assets
KEY AUDIT MATTER
Item is a key audit matter referenced in the Auditor’s Report on Page 31.
ADDITIONAL COMMENTARY
Additional management commentary on the item has been provided above what is required under legislation or
accounting standards for stakeholders to understand the financial report.
DIGITALX LTD | 2022 ANNUAL REPORT | 42
[B - BASIS FOR PREPARATION]
CORPORATE INFORMATION
Comparative information
its controlled entities
The consolidated historical financial statements of DigitalX
Limited and
the
Consolidated Entity or Group) for the year ended 30 June 2022
were authorised for issue in accordance with a resolution of
the Directors on 30 September 2022.
(collectively,
DigitalX Limited (the Company or the Parent) is a company
limited by shares incorporated in Australia whose shares are
publicly traded on the Australian Securities Exchange. The
Company is a for-profit entity.
The nature of the operations and principal activities of the
Group are described in the Directors’ Report. Information on
the Group’s structure is provided in Note G1. Information on
other related party relationships is provided in Note H1.
The Company’s Corporate Governance Statement for the 2022
financial year can be accessed at:
https://DigitalX.com/corporate-governance/.
B1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
The significant accounting policies adopted in the preparation
of the financial report are set out below. These policies have
been applied consistently to all periods presented in the
financial report excepted as described in the notes or in the
Group’s interim financial report. These accounting policies are
consistent with Australian Accounting Standards and with
International Financial Reporting Standards.
Basis of preparation
The financial report is a general-purpose financial report which
has been prepared in accordance with Australian Accounting
Standards (AASBs) and interpretations issued by the Australian
Accounting Standards Board (AASB) and the Corporations Act
2001. All amounts are presented in Australia Dollars, unless
otherwise noted.
Compliance with IFRS
The consolidated financial report of the Group also complies
with International Financial Reporting Standards (IFRS) as
issued by the International Accounting Standards Board (IASB).
Historical cost convention
The consolidated financial report has been prepared under the
historical cost convention, except for digital assets that are
measured at fair value at the end of each reporting period, as
explained in the accounting policies below. Cost is based on
the fair value of the consideration given in exchange for assets.
Comparative balances for the year ending 30 June 2022 have
been presented consistently.
Going concern
At the date of this report the Consolidated Entity’s has a strong
working capital position and its cash flow forecast indicates
that it expects to be able to meet its minimum commitments
and working capital requirements for the twelve-month period
from the date of signing the financial report. The Group also
notes subsequent to the end of the financial year that its
working capital has increased materially due to the increase in
the price of its digital assets.
Presentation and functional currency
The consolidated financial report is presented in Australian
Dollars.
Functional currency
The individual financial statements of each Group entity are
presented
in the currency of the primary economic
environment in which the entity operates (its functional
currency). For the purpose of the consolidated financial
statements, the results and financial position of each group
entity are expressed in Australian dollars (‘$AUD’), which is the
functional currency of the Company and the presentation
currency for the consolidated financial statements.
Due to the nature of these activities for all entities in the Group
the functional currency has been determined to be $AUD.
In preparing the financial statements of each individual group
entity, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recognised at the
rates of exchange prevailing at the dates of the transactions.
At the end of each reporting period, monetary
items
denominated in foreign currencies are retranslated at the
rates prevailing at that date.
items carried at
Non-monetary
that are
denominated in foreign currencies are retranslated at the
rates prevailing at the date when the fair value was
determined. Non-monetary items that are measured in terms
of historical cost in a foreign currency are not retranslated.
fair value
Current and non-current classification
The Group presents assets and liabilities in the statement of
financial position based on current/non-current classification.
DIGITALX LTD | 2022 ANNUAL REPORT | 43
An asset is current when it is:
• expected to be realised or intended to be sold or consumed
A liability is current when it is:
•
expected to be settled in normal operating cycle;
in normal operating cycle;
• held primarily for the purpose of trading;
• expected to be realised within twelve months after the
reporting period; or
• cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period.
• The Group classifies all other assets as non-current.
•
•
•
•
held primarily for the purpose of trading;
due to be settled within twelve months after the
reporting period; or
there is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period.
The Group classifies all other liabilities as non-current.
DIGITALX LTD | 2022 ANNUAL REPORT | 44
[C - KEY OPERATING & FINANCIAL RESULTS]
The section below includes information regarding how the Group performed during the financial year including segment analysis
and detailed breakdowns of items in the Statement of Profit or Loss and Other Comprehensive Income.
This section includes the following disclosures:
C1 Segment Information (Page 45)
C2 Revenue & Receivables (Page 48)
C3 Expenses, Payables & Other Payables (Page 50)
C4 Income Tax (Page 51)
C5 Earnings Per Share (Page 54)
DIGITALX LTD | 2022 ANNUAL REPORT | 45
C1 SEGMENT INFORMATION
Segment reporting
AASB 8 requires operating segments to be identified based on internal reports about components of the Group that are regularly
reviewed by the Chief Operating Decision Maker in order to allocate resources to the segment and to assess its performance.
Based on the information used for internal reporting purposes by the Chief Operating Decision Maker (CODM), being the Board, which
makes strategic decisions, at 30 June 2022 the Group operated three segments, Blockchain consulting and development, Asset
Management and Other. In the previous corresponding period (period ended 30 June 2021) the Group operated three segments,
Blockchain consulting and development, Asset Management and Other.
Segment description
PRODUCT DEVELOPMENT (PD)
The Group develops its own blockchain, RegTech (Drawbridge), and FinTech (Sell My Shares) products as well as providing
consulting, technical due diligence, solution design and development to businesses by utilising distributed ledger solutions
and best of breed blockchain technologies.
ASSET MANAGEMENT (AM)
The asset management division was setup in 2018 to give high net worth and institutional investors access to a portfolio
of digital assets. DigitalX operates two funds focussed on digital assets, the DigitalX Fund (www.digitalx.fund) and the
DigitalX BTC Fund.
OTHER
Amounts disclosed in the segment primarily relates to Group-level functions including governance, finance, legal, risk
management, company secretarial and management of the corporate entity.
DIGITALX LTD | 2022 ANNUAL REPORT | 46
SEGMENT PERFORMANCE
Segment reporting ($AUD)
PRODUCT DEVELOPMENT
ASSET MANAGEMENT2
OTHER
TOTAL
30 June 2022
30 June 2021
30 June 2022
30 June 2021
30 June 2022
30 June 2021
30 June 2022
30 June 2021
Results
Segment revenue
Intersegment revenue
1,373,620
8,655,500
717,227
862,969
227,285
191,276
2,318,132
9,709,745
-
-
-
-
-
-
-
-
Revenue from external customers
1,373,620
8,655,500
717,227
862,969
227,285
191,276
2,318,132
9,709,745
Revenue recognition timing – point in time
1,373,620
-
-
-
-
-
1,373,620
-
Revenue recognition timing – over time
-
8,655,500
717,227
862,969
227,285
191,276
944,512
9,709,745
Segment result
Income tax expense/(benefit)
Segment result after tax
(649,794)
8,137,513
(484,083)
204,417
(1,554,388)
(1,622,010)
(2,688,265)
6,719,920
-
-
-
-
-
-
-
-
(649,794)
8,137,513
(484,083)
204,417
(1,554,388)
(1,622,010)
(2,688,265)
6,719,920
Reconciliation to profit/loss after tax
Interest
Depreciation
Amortisation & impairment
Taxation
Decrease in net assets attributable to unit holders
Profit/(loss) after income tax
(2,688,265)
6,719,920
(169,723)
(322,976)
(100,270)
(337,477)
-
-
-
-
341,497
474,780
(2,839,468)
6,756,954
1Revenue earned from external customers by geography and major customer information is not able to be disclosed as the information is not available to the Group.
2 For the purpose of segment reporting the Asset Management segment does not include the operating results, segment assets or segment liabilities of the DigitalX Fund as CODM reviews the fund on a fair value basis of the Group’s interest in
the fund.
DIGITALX LTD | 2022 ANNUAL REPORT | 47
SEGMENT POSITION
Segment reporting ($AUD)
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
PRODUCT DEVELOPMENT
ASSET MANAGEMENT
30 June
2022
30 June
2021
30 June
2022
30 June
2021
OTHER
30 June
2022
30 June
2021
TOTAL
30 June
2022
30 June
2021
3,385,151
8,706,490
1,513,769
955,867
30,173,431
44,912,966
35,072,351
54,575,322
3,385,151
8,706,490
1,513,769
955,867
30,173,431
44,912,966
35,072,351
54,575,322
(75,186)
(75,186)
(22,935)
(22,935)
(69,650)
(69,650)
(74,735)
(7,844,052)
(11,944,959)
(7,988,888)
(12,042,629)
(74,735)
(7,844,052)
(11,944,959)
(7,988,888)
(12,042,629)
DIGITALX LTD | 2022 ANNUAL REPORT | 48
C2 - REVENUE & RECEIVABLES
Policy - Revenue recognition
Revenue is recognised when the benefit from the service
provided is received by the Customer and to the extent that it
is probable that the economic benefits will flow to the Group
and the revenue can be reliably measured, regardless of when
the payment is being made.
Revenue is measured at the fair value of the consideration
received or receivable; taking into account contractually
defined terms of payment, if any, and excluding taxes or duty.
Revenue is recognised when the specific recognition criteria
described below have been met.
A. Advisory
Revenue from advisory services is recognised as a point in time
obligation when its services have been fully rendered under
contract and the Group no
longer has any continuing
involvement in the sale of digital assets by its customers and
the consideration becomes payables. If the Group is entitled to
consideration on a pro rata basis or for works complete, then
the Group shall recognise revenue over time by reference to
the work completed.
Transaction Price – Digital Assets
Where the contract provides for payment in the customers
digital assets, the digital asset’s fair value is determined:
•
•
by referencing publicly available pricing data from digital
asset exchanges; or
for those digital assets not yet listed on exchanges, by
referencing the results of the sale (i.e. the unit price of a
digital asset can be measured by dividing the dollar
amounts raised in the sale by the number of units issued
in the sale).
The Group measures advisory revenue including the receipt of
digital assets at the fair value of consideration received.
B. Consulting
Revenue from consulting services for a fixed fee or time and
material is recognised when or as the Group transfers control
of the assets to the customer. Revenue is recognised over time
as the work is performed as costs are generally incurred
uniformly as the work progresses and are considered to be
proportionate to the entity’s performance.
C. Funds Management
Revenue from contracts with clients is recognised when there
is a right to invoice the client at an amount that reflects the
consideration to which the Group expects to be entitled in
exchange for those services. This method corresponds directly
with the delivery of performance obligations by the Group to
its clients.
Management fees are based on a percentage of the portfolio
value of the fund and calculated in accordance with the
Investment Management Agreement or Constitution.
rise
fee arrangements give
Performance
to variable
consideration. An estimate of the variable consideration is
recorded when it is highly probable that a significant revenue
reversal in the amount of cumulative revenue recognised will
not occur when the associated uncertainty with the variable
consideration
resolved. The Group’s
entitlement to a performance fee for any given performance
period is dependent on outperforming certain hurdles.
subsequently
is
D. Licensing
Revenue from licensing is recognised over time as the services
provided under licensing contract are provided over time and
the customer simultaneously receives and consumes the
benefit of the service.
E. Brokerage
Revenue from brokerage is recognised at point time once the
sale has been completed.
F. Contract Asset
When a performance obligation is satisfied by transferring a
promised good or service to the customer before the customer
pays consideration or before payment is due, the Group
presents the contract as a contract asset, unless the Group’s
rights to the amount of consideration are unconditional, in
which case the Group recognises a receivable.
G. Contract Liability
When a customer pays consideration before performance
obligation is satisfied, the Group presents the contract as a
contract liability.
H. Trade and other receivables
The Group makes use of a simplified approach in accounting
for trade and other receivables as well as contract assets and
records the loss allowance at the amount equal to the
expected
In using this practical
losses.
expedient, the Group uses its historical experience, external
indicators and forward-looking information to calculate the
expected credit losses using a provision matrix.
lifetime credit
The Group assess impairment of trade receivables on a
collective basis as they possess credit risk characteristics based
on the days past due. The Group allows 1% for amounts that
are 30 to 60 days past due, 1.5% for amounts that are between
60 and 90 days past due and impair any amounts that are more
than 90 days past due.
I. Interest revenue
Interest income is recognised on a time proportion basis that
takes into account the effective yield on the financial asset.
DIGITALX LTD | 2022 ANNUAL REPORT | 49
Revenue
Advisory
Consulting
Asset Management Fees
Licensing
Product revenue
Brokerage
Total revenue
Contract Asset
Contact Asset1
Year ended
30 June 2022
$AUD
Year ended
30 June 2021
$AUD
-
8,384,002
16,420
717,631
216,587
2,950
1,364,545
2,318,132
269,498
862,969
191,276
2,000
-
9,709,745
Year ended
30 June 2022
$AUD
Year ended
30 June 2021
$AUD
-
8,335,434
1 Contract asset relates to Human Protocol agreement as announced to the market on 29 June 2021. During the period this amount was reclassified from a contract
asset to a digital asset once the entitlement to the tokens occurred. Refer to Note D2 for balance.
Trade and other receivables
Trade receivables (gross)1
Loss allowance
Trade receivables – Net
1 27,561 is past due but not impaired.
Other receivables
Deposits
Other
Total trade and other receivables
Other Income
Interest received
Other income
Total other income
Year ended
30 June 2022
$AUD
191,660
-
191,660
Year ended
30 June 2021
$AUD
82,073
-
82,073
101,752
-
293,412
76,751
-
158,825
Year ended
30 June 2022
$AUD
113,704
104,750
218,454
Year ended
30 June 2021
$AUD
90,242
185,906
276,148
DIGITALX LTD | 2022 ANNUAL REPORT | 50
C3 - EXPENSES, PAYABLES & OTHER PAYABLES
Policy - Trade and other payables
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial year
which are unpaid. The amounts are unsecured and are usually
paid within 30 days of recognition.
Trade and other payables are presented as current liabilities
unless payment is not due within 12 months from the
reporting date. They are recognised initially at their fair value
and subsequently measured at amortised cost using the
effective interest method.
Policy - Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that the Group 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
reporting date, taking into account the risks and uncertainties
surrounding the obligation.
Policy - Employee benefits
Short-term and long-term employee benefits
A liability is recognised for benefits accruing to employees in
respect of wages and salaries, annual leave, long service leave,
(A) Professional and Consultancy fees
Legal fees
Consulting and funds management expenses
Tax consulting fees
Audit fees
Total professional and consultancy fees
(B) Other expenses
Regulatory, licensing and compliance
Occupancy
Other expenses
Total other expenses
and sick leave when it is probable that settlement will be
required and they are capable of being measured reliably.
Liabilities recognised in respect of short-term employee
benefits, are measured at their nominal values using the
remuneration rate expected to apply at the time of
settlement.
Liabilities recognised
long-term employee
in respect of
benefits are measured as the present value of the estimated
future cash outflows to be made by the Group in respect of
services provided by employees up to reporting date.
Policy - Goods and services, Value Added Tax, or Sales Tax
Amounts are recognised net of the amount of associated GST
or VAT, except:
• where the GST or VAT incurred on a purchase of goods
and services is not recoverable from the taxation
authority, in which case the GST or VAT is recognised as
part of the cost of acquisition of the asset or part of the
expense item as applicable; and
receivables and payables are stated with the amount of
GST or VAT.
•
The net amount of GST or VAT recoverable from, or payable
to, the taxation authority is included as part of receivables or
payables in the balance sheet.
Cash flows are presented on a gross basis. The GST or VAT
component of cash flows arising from investing or financing
activities which are recoverable from, or payable to, the
taxation authority, are presented as operating cash flows.
Year ended
30 June 2022
$AUD
269,359
713,459
40,519
84,403
1,107,740
Year ended
30 June 2022
$AUD
678,619
169,028
136,496
984,143
Year ended
30 June 2021
$AUD
49,510
525,768
31,873
80,371
687,522
Year ended
30 June 2021
$AUD
440,849
167,933
107,649
716,431
DIGITALX LTD | 2022 ANNUAL REPORT | 51
(C) Current liabilities – trade & other payables
Trade payables
Accrued expenses
Employee entitlements
Statutory payables
Fund applications
Total trade & other payables
(D) Remuneration of Auditors
Remuneration of the auditors of the Company for:
BDO Audit (WA) Pty Ltd
Audit and review of financial reports
Non-audit services – tax compliance
C4 - INCOME TAX
Policy - Income tax
The income tax expense or revenue for the period is the tax
payable on the current period’s taxable income or tax loss
based on the applicable income tax rate for each jurisdiction.
Current tax
The tax currently payable is based on taxable profit for the
period. Taxable profit differs from profit before tax as reported
in the consolidated statement of profit or loss and other
comprehensive income because of items of income or expense
that are taxable or deductible in other periods and items that
are never taxable or deductible. The Group’s current tax is
calculated using tax rates that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between
the carrying amounts of assets and
in the
consolidated financial statements and the corresponding tax
bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary
differences.
liabilities
Deferred tax assets are generally recognised for all deductible
temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible
temporary differences can be utilised. Such deferred tax assets
and liabilities are not recognised if the temporary difference
arises from the initial recognition (other than in a business
Year ended
30 June 2022
$AUD
495,486
360,862
373,403
126,774
Year ended
30 June 2021
$AUD
467,049
242,800
-
32,666
200,000
-
1,556,555
742,515
Year ended
30 June 2022
$AUD
Year ended
30 June 2021
$AUD
84,403
10,480
94,883
80,371
14,743
95,114
combination) of assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit. In
addition, deferred tax liabilities are not recognised if the
temporary difference arises from the initial recognition of
goodwill.
Deferred tax liabilities are recognised for taxable temporary
differences associated with investments in subsidiaries and
associates, and interests in joint ventures, except where the
Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will
not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary
differences associated with such investments and interests are
only recognised to the extent that it is probable that there will
be sufficient taxable profits against which to utilise the
benefits of the temporary differences and they are expected
to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the
end of each reporting period and reduced to the extent that it
is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates
that are expected to apply in the period in which the liability is
settled or the asset realised, based on tax rates (and tax laws)
that have been enacted or substantively enacted by the end of
the reporting period. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would
DIGITALX LTD | 2022 ANNUAL REPORT | 52
follow from the manner in which the Group expects, at the end
of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax liabilities and assets are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes
levied by the same taxation authority and the Group intends
to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax are recognised in profit or loss,
except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case the
current and deferred tax are also recognised
in other
comprehensive income or directly in equity, respectively.
Where current tax or deferred tax arises from the initial
accounting for a business combination, the tax effect is
included in the accounting for the business combination.
Tax consolidation
The Company and its wholly-owned Australian tax resident
entities are part of a tax-consolidated group under Australian
taxation law. The head entity within the tax-consolidated
group is DigitalX Limited. Digital CC Holdings joined the DigitalX
Limited tax consolidation group on 26 May 2014.
Tax expense/income, deferred tax liabilities and deferred tax
assets arising from temporary differences of the members of
the tax-consolidated group are recognised in the separate
financial reports of the members of the tax-consolidated
group using the 'separate taxpayer within group's approach,
by reference to the carrying amounts in the separate financial
reports of each entity and the tax values applying under tax
consolidation.
Any current tax liabilities (or assets) and deferred tax assets
arising from unused tax losses of the wholly-owned entities
are assumed by the head entity in the tax-consolidated group
and are recognised as amounts payable (or receivable) to (or
from) other entities
in
conjunction with any tax funding arrangement amounts. The
head entity recognises deferred tax assets arising from unused
tax losses of the tax-consolidated group to the extent that it is
in the tax-consolidated group
A.
Income tax expense
probable that future taxable profits of the tax-consolidated
group will be available against which the assets can be utilised.
Estimates & Judgement – Taxation
Income taxes
The Group operates in a newly emerging industry and the
application of taxation laws in Australia, the United States,
Hong Kong and previously Iceland (the principal countries in
which the Group currently operates) in relation to the Group’s
activities may change from time to time. Changes in the
taxation laws or in assessments or interpretation or decisions
in respect of, but not limited to the following, may have a
significant impact on the Group’s results:
•
•
Jurisdiction in which and rates at which income is taxed;
Jurisdiction in which and rates at which expenses are
deductible;
• The nature of income taxes levied, for example whether
taxes are assessed on the revenue account or on the capital
account;
• Requirements to file tax returns; and
• The availability of credit for taxes paid
in other
jurisdictions, for example through the operation of double
taxation treaties.
In recognition of the limited trading and tax history of the
Group, management do not consider there is sufficient
evidence of probability of the ability to utilise temporary
differences and tax losses and hence no deferred tax asset has
been recognised as at 30 June 2022 in relation to these assets.
The Group will continue to assess the performance and may in
the future recognise some or all of these assets.
The Group has taken the approach to calculate income tax
expense on the basis that all revenue and expenses
attributable to its operations are taxable in Australia and all
revenue and expenses attributable to its trading operations
are taxable in the United States in addition to certain
employee costs
in the United States plus an
appropriate mark-up.
incurred
Current tax expense / (benefit)
Deferred tax expense / (benefit)
Total income tax (benefit) in profit or loss
B. Numerical reconciliation of tax expense to prima facie tax payable
Year ended
30 June 2022
$AUD
Year ended
30 June 2021
$AUD
-
-
-
-
-
-
Year ended
Year ended
DIGITALX LTD | 2022 ANNUAL REPORT | 53
Profit/(Loss) before tax from continuing operations
Profit/(Loss) before tax from discontinued operations
Profit/(Loss) before tax
30 June 2022
$AUD
(2,839,468)
-
30 June 2021
$AUD
6,756,954
-
(2,839,468)
6,756,954
Tax at the Group’s statutory income tax rate of Australia: 27.5% (2021:
27.5%)
(780,854)
1,858,162
Tax effect of amounts which are not deductible or assessable (taxable) in
calculating taxable income:
Non-deductible share-based payment
Fair value adjustment of investments
Other
Effect of different tax rates of subsidiaries operating in other jurisdictions
Unrealised gain on foreign exchange
Effect of timing expenses that are not deductible
Deferred tax assets not recognised1
Distribution to trust beneficiaries
Previously unrecognised tax losses now recouped to reduce tax expense
Income tax expense/(benefit)
Income tax expense/(benefit) is attributable to:
Profit/(Loss) from continuing operations
Profit/(Loss) from discontinued operations
15,550
(14,998)
(14,192)
3,697
-
(62,412)
853,208
-
-
-
-
-
-
1 Amount relates to tax losses incurred in US operations that cannot be applied to profits generated in Australia or entities outside the tax consolidated group.
C. Current tax assets and liabilities
Current tax liability
Income tax payable
Total current tax liability
D. Deferred tax assets and liabilities
-
-
-
As at 30 June 2022 the Group has tax losses available to be applied in the future periods in the United States and Australia estimated
to be $AUD7.9 million and $USD4.8 million respectively. The losses in respect of the Group’s operations in Hong Kong are immaterial.
In addition, the Group has gross capital losses in Australia estimated at $AUD1.54 million at 30 June 2022. There is an unrecongised
deferred tax liability on the fair value adjustments for digital assets which is offset by an unrecognised deferred tax asset for carry
forward losses.
The Group reviews the recoverability of tax losses each reporting period by reviewing the continuity of ownership test (COT) or Same
Business Test (SBT) and no adjustments have been made for the year ended 30 June 2022. Other than those noted above and tax
losses there are no other material temporary differences.
171,995
(119,259)
(16,346)
26,576
-
(34,313)
85,861
-
(1,972,675)
-
-
-
-
-
-
-
DIGITALX LTD | 2022 ANNUAL REPORT | 54
E. Other tax information
The tax rate used for the reconciliation above is the corporate tax rate of 27.5% payable by Australian corporate entities on taxable
profits under Australian tax law for entities with gross consolidated turnover of less than $AUD25,000,000.
Franking Account
Amounts recognised directly in equity
Future Developments
No material future developments.
C5 - EARNINGS PER SHARE (EPS)
Earnings per share
-
-
-
-
Basic earnings per share
Basic earnings per share is calculated by dividing the profit/(loss) after tax attributable to equity holders of the Company by the
weighted average number of ordinary shares outstanding during the period, adjusted for bonus elements in ordinary shares issued or
cancelled during the period.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in determination of basic earnings per share to take into account the after income
tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number
of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.
Basic earnings/(loss) per share
From continuing operations
Total
Diluted earnings/(loss) per share
From continuing operations
Total
The earnings/(loss) used in the calculation of basic and diluted loss per share
are as follows:
From continued operations
From discontinued operations
Weighted average number of ordinary shares on issue during the period
used in the calculation of basic EPS
Adjustments for calculation of diluted EPS
Options
Performance rights
Convertible notes
Year ended
30 June 2022
$AUD
Year ended
30 June 2021
$AUD
(0.004)
(0.004)
(0.004)
(0.004)
0.01
0.01
0.01
0.01
(2,839,468)
-
6,756,954
-
741,435,286
652,503,531
31,046,729
-
55,839,003
25,268,382
9,000,000
55,839,003
Weighted average number of ordinary shares on issue during the period
used in the calculation of diluted EPS
828,321,018
742,610,916
1 Potential ordinary shares in the form of share options and rights are not considered to be dilutive. As the Group made a loss for the prior period, diluted earnings per
share is the same as basic earnings per share for that period.
DIGITALX LTD | 2022 ANNUAL REPORT | 55
[D - CAPITAL & RISK MANAGEMENT]
The section below includes information regarding how the Group manages it capital assets including the positions at year end as
well as outlining the risks arising from market, price, liquidity and credit exposures. Finally, the section covers how the Group
manages its equity position and movements during the year.
The section includes the following disclosures:
D1 Capital management (Page 56)
D2 Financial risk management (Page 56)
D3 Cash and cash equivalents (Page 60)
D4 Digital assets (Page 61)
D5 Investments (Page 63)
D6 Net assets attributable to unit holders (Page 64)
DIGITALX LTD | 2022 ANNUAL REPORT | 56
D1 - CAPITAL MANAGEMENT
The Group’s objectives when managing capital are to:
•
Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits
for other stakeholders; and
• Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.
D2 – FINANCIAL INSTRUMENTS
AND RISK MANAGEMENT
Policy - Financial Instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of the
financial instrument and are measured initially at fair value
adjusted by transactions costs, except for those carried at fair
value through profit or loss, which are measured initially at fair
value. Subsequent measurement of financial assets and
financial liabilities are described below.
Financial assets are derecognised when the contractual rights
to the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are
transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a
significant financing component and are measured at the
transaction price in accordance with AASB 15, all financial
assets are initially measured at fair value adjusted for
transaction costs (where applicable).
finance income or other financial items, except for the
allowance for expected credit loss which is presented within
other expenses.
a) Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets
meet the following conditions (and are not designated as
FVPL):
•
•
they are held within a business model whose objective is
to hold the financial assets and collect its contractual
cash flows;
the contractual terms of the financial assets give rise to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost
using the effective interest method. Discounting is omitted
where the effect of discounting is immaterial. The Group’s
cash and cash equivalents, trade and most other receivables
fall into this category of financial instruments as well as
government bonds that were previously classified as held-to-
maturity under AASB 139.
Subsequent measurement of financial assets
b) Financial assets at fair value through profit or loss (FVTPL)
For the purpose of subsequent measurement, financial assets,
other than those designated and effective as hedging
instruments, are classified into the following categories upon
initial recognition:
a)
b)
c)
d)
financial assets at amortised cost;
financial assets at fair value through profit or loss
(FVTPL);
fair value
debt
comprehensive income (FVOCI); and
equity
instruments at
comprehensive income (FVOCI).
instruments at
through other
through other
fair value
Classifications are determined by both:
•
•
The entity’s business model for managing the financial
asset; and
The contractual cash flow characteristics of the financial
assets.
All income and expenses relating to financial assets that are
recognised in profit or loss are presented within finance costs,
Financial assets that are held within a business model other
than “hold to collect” or “hold to collect and sell” are
categorised at fair value through profit and loss. Further,
irrespective of business model, financial assets whose
contractual cash flows are not solely payments of principal and
interest are accounted for at FVPL. All derivative financial
instruments fall into this category, except for those designated
and effective as hedging instruments, for which the hedge
accounting requirements apply.
This includes digital assets classified as financial assets in
accordance with Note D4.
c) Debt
instruments at
fair value
through other
comprehensive income (Debt FVOCI)
Financial assets with contractual cash flows representing
solely payments of principal and interest and held within a
business model of collecting the contractual cash flows and
selling the assets are accounted for at FVOCI.
Any gains or losses recognised in OCI will be recycled upon
derecognition of the asset.
DIGITALX LTD | 2022 ANNUAL REPORT | 57
d) Equity
instruments at
fair value
comprehensive income (Equity FVOCI)
through other
Financial assets at fair value through other comprehensive
income
Investments in equity instruments that are not held for trading
are eligible for an irrevocable election at inception to be
measured at FVOCI. Under this category, subsequent
movements
in other
comprehensive income and are never reclassified to profit or
loss. Dividend income is taken to profit or loss unless the
dividend clearly represents return of capital.
fair value are
recognised
in
Impairment of financial assets
AASB 9’s impairment model use more forward looking
information to recognize expected credit
losses - the
‘expected credit losses (ECL) model’. The application of the
new impairment model depends on whether there has been a
significant increase in credit risk.
The Group considers a broader range of information when
assessing credit risk and measuring expected credit losses,
including past events, current conditions, reasonable and
supportable forecasts that affect the expected collectability of
the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is
made between:
•
•
instruments
financial
that have not deteriorated
significantly in credit quality since initial recognition or
that have low credit risk (‘Stage 1’); and
financial instruments that have deteriorated significantly
in credit quality since initial recognition and whose credit
risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective
evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first
category while ‘lifetime expected credit losses’ are recognised
for the second category.
Measurement of the expected credit losses is determined by a
probability-weighted estimate of credit
losses over the
expected life of the financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting
for trade and other receivables as well as contract assets and
records the loss allowance at the amount equal to the
expected lifetime credit losses.
In using this practical expedient, the Group uses its historical
forward-looking
indicators
experience,
information to calculate the expected credit losses using a
provision matrix.
external
and
The Group assess impairment of trade receivables on a
collective basis as they possess credit risk characteristics based
on the days past due. The Group allows 1% for amounts that
are 30 to 60 days past due, 1.5% for amounts that are between
60 and 90 days past due and impair any amounts that are more
than 90 days past due.
The Group recognises 12 months expected credit losses for
financial assets at FVOCI. As most of these instruments have a
high credit rating, the likelihood of default is deemed small.
However, at each reporting date the Group assesses whether
there has been a significant increase in the credit risk of the
instrument.
In assessing these risks, the Group relies on readily available
information such as the credit ratings issued by the major
credit rating agencies for the respective asset. The Group only
holds simple financial instruments for which specific credit
ratings are usually available. In the unlikely event that there is
no or only little information on factors influencing the ratings
of the asset available, the Group would aggregate similar
instruments into a portfolio to assess on this basis whether
there has been a significant increase in credit risk.
In addition, the Group considers other indicators such as
adverse changes in business, economic or financial conditions
that could affect the borrower’s ability to meet its debt
obligation or unexpected changes in the borrowers operating
results.
Should any of these indicators imply a significant increase in
the instrument’s credit risk, the Group recognises for this
instrument or class of instruments the lifetime expected credit
losses.
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and
other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and,
where applicable, adjusted for transaction costs unless the
Group designated a financial liability at fair value through
profit or loss. Subsequently, financial liabilities are measured
at amortised cost using the effective interest method except
for derivatives and financial liabilities designated at FVPL,
which are carried subsequently at fair value with gains or
losses recognised in profit or loss (other than derivative
financial instruments that are designated and effective as
hedging instruments).
All interest-related charges and, if applicable, changes in an
instrument’s fair value that are reported in profit or loss are
included within finance costs or finance income.
Risk Management
The Group’s activities expose it to a variety of financial risks
including but not limited to:
•
•
•
•
•
Foreign exchange risk;
Liquidity risk;
Interest rate risk;
Credit risk; and
Digital asset price risk.
DIGITALX LTD | 2022 ANNUAL REPORT | 58
The Group’s and the Company’s overall risk management
program focuses on the unpredictability of financial markets
and seeks to minimize potential adverse effects on the
financial performance of the Group. The Group uses different
methods to measure different types of risks to which it is
exposed. The method used is sensitivity analysis for each of
foreign exchange risk, liquidity risk and interest rate risk.
The capital structure of the Group consists of equity
attributable to equity holders of the Company, comprising
issued capital, reserves and retained earnings.
The Group holds the following financial assets and financial liabilities:
Financial Assets
Cash and cash equivalentsAC
InvestmentsFV
Trade receivablesAC
Financial liabilities
Trade and other payablesAC
Finance LiabilitiesAC
Net assets attributable to unit holders AC
AC – Amortised Cost
FV – Fair value through profit or loss
Foreign exchange risk
Year ended
30 June 2022
$AUD
Year ended
30 June 2021
$AUD
6,278,410
2,290,994
191,660
8,761,064
495,486
176,421
6,211,747
6,883,654
10,369,645
2,471,036
158,825
12,999,506
742,515
302,589
8,257,054
9,302,158
The Group and the parent entity operate internationally, and during the period were exposed to foreign exchange risk arising from
currency exposures, primarily with respect to the USD/AUD dollar rates.
Foreign exchange risks arise from future commercial transactions and recognised assets and liabilities that are denominated in a
currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.
Management regularly monitors exposure to foreign exchange risk, but do not have a current hedging policy in place. It is intended
that this policy will be continuously assessed in line with funding requirements for each of the investment opportunities.
As of 30 June 2022, the Group had exposure to foreign currency risk within its recognised assets and liabilities. The cash and cash
equivalents held $USD19,390 (2021: $USD5,986) in bank accounts. The Group has no derivative liabilities in $USD (2021: $nil) and nil
$USD in finance liabilities (2021: $USD nil).
Group sensitivity – Foreign exchange risk
Based upon the financial instruments held as at 30 June 2022, had the Australian dollar weakened/strengthened 10% against the US
dollar with all other variables held constant, the following impact on profit and or loss in noted:
Impact on profit of loss – 2022
Impact on profit or loss – 2021
Interest rate risk management
Fluctuation
+10%
$AUD
(303)
(340)
-10%
$AUD
303
340
The Group is exposed to interest rate risk as entities in the Group deposit funds at both short-term fixed and floating rates of interest.
The Group’s exposure to interest rates on financial assets and liabilities is detailed in the liquidity risk management section of this
note.
Interest rate sensitivity
DIGITALX LTD | 2022 ANNUAL REPORT | 59
A change in interest rates would not have a material impact on the profit and equity for the current and previous periods of the Group
or the Parent entity.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who oversee a liquidity risk management
framework for the management of the Group’s funding and liquidity management requirements.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring there are appropriate plans
in place to finance these future cash flows.
Weighted
average
effective
interest rate
%
Less than 1
month
Interest
bearing -
variable
$AUD
1 to 3
months
Interest
bearing -
variable
$AUS
More than 3
months
Interest
bearing
Less than 1
month
Non-interest
bearing
1 to 3 months
Non-interest
bearing
More than 3
months
Non-interest
bearing
$AUD
$AUD
$AUD
$AUD
-
-
-
8.8
-
10
-
-
8.8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
249,600
-
6,278,410
101,751
-
176,421
191,660
495,486
-
-
-
10,369,645
-
-
-
-
76,751
82,073
-
(742,515)
(252,337)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2022
Cash and cash equivalents
Other receivables
Other payables
Finance liability
2021
Cash and cash equivalents
Convertible note
Other receivables
Other payables
Finance liability
The liquidity and interest rate risk table above has been drawn up based on the undiscounted cash flow (including both interest and
principal cash flows expected) using contractual maturities of financial assets and the earliest date on which the Group can be required
to pay financial liabilities. Amounts for financial assets include interest earned on those assets except where it is anticipated cash will
occur in a different period. The table excludes the value for the unit holder liability on the basis there is no maturity date.
Credit Risk
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to
customers, including outstanding receivables. Credit risk is managed on a group basis. For banks and financial institutions, the Group
aims to hold deposit with independently rated parties with a rating of ‘A2’ or above based on Moody’s ratings. From time to time the
Group may hold deposits with unrated institutions (i.e. exchanges) after trading in digital assets. The Group’s credit risk exposure is
set out below. Due to the nature of the customers the Group engages with ratings are not commonplace. Credit risk is therefore
factored into the transaction price for services often in the form of bonus tokens or a discount to public token sale rate. At 30 June
2022 no customers had a published credit rating.
Credit risk by rating
Rating
A1
A2
Unrated (with no prior defaults)
A1
A2
Unrated
Total
$AUD
5,610
265,486
6,007,314
6,278,410
DIGITALX LTD | 2022 ANNUAL REPORT | 60
Fair value measurement
The Group measures financial instruments and non-financial
assets at fair value at each balance sheet date. Also, fair values
of financial instruments measured at amortised cost are
disclosed. Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes
place either:
•
•
In the principal market for the asset or liability, or
In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must be
accessible to the Group. The fair value of an asset or a liability
is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that
market participants act in their economic best interest. A fair
value measurement of a non-financial asset takes into account
a market participant's ability to generate economic benefits by
using the asset in its highest and best use or by selling it to
another market participant that would use the asset in its
highest and best use.
The Group uses valuation techniques that are appropriate in
the circumstances and for which sufficient data are available
to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised within
the fair value hierarchy, described as follows, based on the
D3 CASH AND CASH EQUIVALENTS
Cash and cash equivalents
level
input that
lowest
measurement as a whole:
is significant to the fair value
•
•
•
Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable
For assets and liabilities that are recognised in the financial
statements on a recurring basis, the Group determines
whether transfers have occurred between Levels in the
hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement as
a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has
determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the
level of the fair value hierarchy as explained above.
At 30 June 2022 all assets carried at fair value are deemed to
be level 1 based on observable prices in an active market with
the exception of:
•
•
Investment in Bullion Asset Management – Note D5
Unlisted Digital Assets – Note D4
Fair value estimation
The Directors consider that the carrying amount of financial
assets and financial liabilities, as recorded in the financial
statements, represent or approximate their respective fair
values.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call
with financial institutions, cash held with bitcoin exchanges, other short-term, highly liquid investments that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Cash and cash
equivalents do not include the Group’s holdings of digital assets which are classified as inventory (refer to D4).
Cash at bank
Cash deposits at call1
Total cash and cash equivalents
Year ended
30 June 2022
$AUD
5,778,410
500,000
6,278,410
Year ended
30 June 2021
$AUD
10,369,645
-
10,369,645
1Cash deposits at call include cash balances on exchanges. The balance also includes $500,000 of XAUD tokens which is an AUD stablecoin backed by cash reserves. The
Company considers this to be a cash equivalent on the basis that it is highly liquid and readily convertible to cash inline with the terms of sale and also by virtue of the
XAUD token being able to be used for settlement of goods and services.
DIGITALX LTD | 2022 ANNUAL REPORT | 61
D4 - DIGITAL ASSETS
Digital Assets
Digital assets are assets such as Bitcoin and Ethereum, which
use an open-source software-based online system where
transactions are recorded in a public ledger (blockchain) using
its own unit of account. Digital Assets are an emerging
technology and asset class, and as such there are no specific
accounting standards that cover the treatment, rather digital
assets are assessed by applying existing accounting standards
in conjunction with guidance released by the accounting
standard setting bodies such as the IASB.
Management consider it appropriate to group digital assets
into a single balance in the Consolidated Financial Statements
and providing users with a reconciliation by category in the
notes to the Financial Statements.
For the purpose of fair value disclosures, the Group has
determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the
level of the fair value hierarchy as explained below.
Digital Assets – Accounted for using inventory methodology
For digital assets that meet the criteria of AASB102: Inventory,
the Group measures digital assets at its fair value less costs to
sell, with any change in fair value less costs to sell being
recognised in profit or loss in the period of the change.
Amounts are derecognised when the Group has transferred
substantially all the risks and rewards of ownership. As a result
of the various blockchain protocols, costs to sell are immaterial
in the current period and no allowance is made for such costs.
Digital assets are derecognised when the Group disposes of
the inventory through its trading activities or when the Group
otherwise loses control and, therefore, access to the economic
benefits associated with ownership of the digital asset.
Digital Assets – Accounted for using
methodology
intangible asset
The Group consider that any digital asset that does not fall
under the inventory or financial asset methodology and meet
the recognition criteria (identifiable, controllable and capable
of generation future economic benefits) are considered to
intangible assets.
For digital assets that meet the criteria of AASB138: Intangible
Assets, the Group measures digital assets at its fair value less
costs to sell in accordance with the revaluation model
(provided there is an active market), with increase in fair value
being recognised in OCI and credited to a revaluation reserve,
unless it reverses a revaluation deficit of the same asset
previously recognised in profit or loss. A revaluation deficit is
recognised in profit or loss, except to the extent that it offsets
an existing surplus on the same asset recognised in the
revaluation reserve. Digital assets classified as intangible
assets are considered to be indefinite life intangible assets
given their nature.
Digital assets are derecognised when the Group disposes of
the asset or when the Group otherwise loses control and,
therefore, access to the economic benefits associated with
ownership of the digital asset.
Digital Assets – Accounted for using financial asset
methodology
Refer to Note D2 for financial asset accounting policy and
treatment.
Estimates & Judgements
(a) Digital assets
Management note that the topic of digital assets and the
accounting for digital assets continues to be considered by the
International Accounting Standards Board
(IASB) and
continues to monitors new comments and interpretations
released by the Board and other standard setters from around
the world.
In line with this, the Group has considered its position for the
year ending 30 June 2022 and has determined that the Group’s
digital assets fall into 3 categories:
•
•
•
Inventory method (historical method used by the
Group)
Intangible asset method (the method noted by the
IASB in its most recent deliberations)
Financial asset method (used where the digital asset
meets the criteria of a financial asset – See Note D2)
Management notes that under the 3 methods noted above,
the treatment continues to be to measure digital assets at fair
value (unless otherwise disclosed and provided certain
conditions are met) under the respective accounting
standards.
(b) Fair value of Digital Assets
Digital assets (including bitcoin inventory) is measured at fair
value using the quoted price in United States dollars on from a
number of different sources with the primary being Coin
Market Cap (www.coinmarketcap.com) at closing Coordinated
Universal Time. Management considers this fair value to be a
Level 1 input under the AASB 13 Fair Value Measurement fair
value hierarchy as the price on the quoted price (unadjusted)
in an active market for identical assets.
Management uses a number of exchanges including Binance,
Bitgo, Independent Reserve and others in order to provide the
Group with appropriate size and liquidity to provide reliable
evidence of fair value for the size and volume of transactions
that are reasonably contemplated by the Group.
Unlisted digital assets are fair valued using a combination of
Level 2 and Level 3 techniques. Refer to the table below for the
break-down of fair value levels.
DIGITALX LTD | 2022 ANNUAL REPORT | 62
(A) Reconciliation of Digital Assets
Bitcoin1,2
Other listed digital assets1,3
Non-listed digital assets4
Total Digital Assets
(B) Reconciliation by Class
Intangible asset method
Financial asset method
Total Digital Assets
Year ended
30 June 2022
$AUD
17,506,895
5,642,503
419,465
23,568,863
Year ended
30 June 2022
$AUD
23,568,863
-
23,568,863
Year ended
30 June 2021
$AUD
28,297,002
3,590,681
592,286
32,479,969
Year ended
30 June 2021
$AUD
32,478,065
1,904
32,479,969
1 Digital assets were measured at fair value using at 30 June 2022. Refer to Note H1 for prices at the date of this report.
2 The amount includes $AUD11,318,349 held by the DigitalX BTC Fund and DigitalX Fund.
3 Includes all tokens that are not bitcoin that are listed on an exchange. The amount includes $AUD2,099,236 held by the DigitalX Fund.
4 Includes all tokens not listed on an exchange.
(C) Movements by Class
Opening Balance 1 July 2021
Net trading activity1
Reclassification2
Revaluation
Impairment
Closing Balance
Intangible Asset
Financial Asset
Total
32,478,065
2,285,617
8,335,434
1,904
32,479,969
-
2,285,617
8,335,434
(19,530,253)
(1,904)
(19,532,157)
-
23,568,863
-
-
-
23,568,863
1 Net trading activity is the net purchase and sale of digital assets and includes monthly rebalance for the DigitalX Fund and DigitalX BTC Fund.
2 Amount relates to Human Protocol which was previously classified as a contract asset at 30 June 2021.
(C) Digital Assets by Fair Value Hierarchy
Level
Level 1
Level 2
Level 3
Description
Level 1 fair value digital assets are those assets that are actively traded on a digital asset exchange or
decentralised exchange for which there is an active market with sufficient volume.
Level 2 fair value digital assets are those assets measured at fair value but the market prices are not
actively quoted and determined using a market matrix approach (AASB13.B7). This is most common
for digital assets where an active trading pair does not existing with a FIAT currency but may exist for
a trading pair such as Ethereum or Bitcoin which can then be measured using the level 1 input.
Level 3 fair value digital assets are those assets carried at fair value where fair value has been
determined by reference to the entity’s own data and financial data provided by the project such as
comparable projects, financial forecasts and equity transactions.
$AUD
$23,149,398
$419,465
-
DIGITALX LTD | 2022 ANNUAL REPORT | 63
D5 – INVESTMENTS
Investments in joint ventures
A joint venture is a joint arrangement whereby the parties that
have joint control of the arrangement have rights to the net
assets of the joint arrangement.
is the
contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control.
Joint control
The results and assets and liabilities of joint ventures are
incorporated in these consolidated financial statements using
the equity method of accounting.
is
initially recognised
Under the equity method, an investment in an associate or a
joint venture
in the consolidated
statement of financial position at cost and adjusted thereafter
to recognise the Group's share of the profit or loss and other
comprehensive income of the associate or joint venture.
When the Group's share of losses of an associate or a joint
venture exceeds the Group's interest in that associate or joint
venture (which includes any long-term interests that, in
substance, form part of the Group's net investment in the
associate or joint venture), the Group discontinues recognising
its share of further losses. Additional losses are recognised
only to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf of the
associate or joint venture.
Investment in Bullion Asset Management Pte Ltd (BAM)A
Convertible note receivable
Investment in DigitalX FundsB
A.
Investment in BAM
Opening balance
Additional investment
Additional shares received in lieu of services
Fair value movement through profit or loss
B.
Investment in DigitalX Funds
An investment in an associate or a joint venture is accounted
for using the equity method from the date on which the
investee becomes an associate or a joint venture. On
acquisition of the investment in an associate or a joint venture,
any excess of the cost of the investment over the Group's
share of the net fair value of the identifiable assets and
liabilities of the investee is recognised as goodwill, which is
included within the carrying amount of the investment. Any
excess of the Group's share of the net fair value of the
liabilities over the cost of the
identifiable assets and
investment, after reassessment, is recognised immediately in
profit or loss in the period in which the investment is acquired.
The requirements of AASB 9 are applied to determine whether
it is necessary to recognise any impairment loss with respect
to the Group’s investment in an associate or a joint venture.
When necessary, the entire carrying amount of the investment
(including goodwill) is tested for impairment in accordance
with AASB 136 ‘Impairment of Assets’ as a single asset by
comparing its recoverable amount (higher of value in use and
fair value less costs of disposal) with its carrying amount.
Any impairment loss recognised forms part of the carrying
amount of the investment. Any reversal of that impairment
loss is recognised in accordance with AASB 136 to the extent
that the recoverable amount of the investment subsequently
increases.
Year ended
30 June 2022
$AUD
2,290,994
-
-
2,290,994
Year ended
30 June 2022
$AUD
2,221,436
-
-
69,558
2,290,994
Year ended
30 June 2021
$AUD
2,221,436
249,600
-
2,471,036
Year ended
30 June 2021
$AUD
1,251,036
321,863
214,867
433,670
2,221,436
The Group has provided seed capital to the DigitalX Fund (a unit trust) and DigitalX BTC Fund (a unit trust) for the purpose of investing
in and generating returns digital assets.
DIGITALX LTD | 2022 ANNUAL REPORT | 64
However, as DigitalX also provides fund management services for the fund it is deemed that the Group meets the definition of control
under AASB10: Consolidated Financial Statements and as a result, the fund has been included in the Group’s consolidated financial
statements. The Group will continue to assess its position with respect to control of the fund at each reporting period and there has
been no changes to the Group’s assessment for the year ended 30 June 2022.
The net asset value (NAV) of the Group’s units in the funds at 30 June 2022 were $AUD0.6483 (2021: $1.37) and $AUD2.6539
respectively.
At 30 June 2022, DigitalX’s holding in the DigitalX BTC fund and DigitalX Fund was 60.31% and 34.73% respectively.
D6 - NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS
In accordance with AASB: 132 Financial Instruments, certain instruments are classified as equity in the separate financial statements
of a subsidiary or other entity controlled by the Group which represent non-controlling interests in the consolidated financial
statements are classified as liabilities in the consolidated financial statements of the Group to the extent which the non-controlling
interest has a preferential claim to the net assets of the subsidiary over shareholders of the parent. Changes in the net assets are
recognised in the profit or loss except for distributions to unit holders and subscription of units.
Opening Balance
Profit/(Loss) for the period attributable to non-controlling interests
Other comprehensive income attributable to non-controlling interests
Distributions payableA
Gain/(loss) on change in ownership
Net change in units on issue
Closing Balance
30 June 2022
$AUD
8,257,054
(341,497)
(5,975,227)
(43,523)
154,154
4,160,786
6,211,747
30 June 2021
$AUD
670,910
(447,884)
4,244,533
(1,767,898)
(454,055)
6,011,451
8,257,054
A In accordance with the trust deed for the DigitalX BTC Fund and DigitalX Fund if there is taxable income at 30 June 2022 it must be
distributed to the unit holders. At 30 June 2022, the balances below were payable.
Distribution payable to unit holders
Distribution payable to DigitalX
Total
Total
($AUD)
28,406
15,117
43,522
DIGITALX LTD | 2022 ANNUAL REPORT | 65
[E - FINANCIAL POSITION]
The section below includes information regarding the financial position of the Group (excluding non-operating assets & liabilities
covered under Section C and Working Capital covered under Section D).
The section includes the following disclosures:
E1 Property, plant and equipment (Page 66)
E2 Non-current assets – Right of use asset (Page 67)
E3 Non-current assets - Intangible assets (Page 68)
DIGITALX LTD | 2022 ANNUAL REPORT | 66
E1 - PROPERTY, PLANT AND EQUIPMENT
Policy
is stated at historical cost
Plant and equipment
less
includes
accumulated
expenditure that is directly attributable to the acquisition of
the items.
depreciation. Historical
cost
Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when it
is probable that the future economic benefits associated with
the item will flow to the Group and the cost of the item can be
measured reliably. All other repairs and maintenance are
charged to the income statement during the financial period
in which they are incurred.
Plant and equipment are depreciated or amortised on a
reducing balance or straight-line basis at rates based upon
their expected useful lives as follows:
•
•
Computer equipment – 3 years
Leasehold improvements – 5 years
Depreciation is recognised to write off the cost or valuation of
assets (other than freehold land) less their residual values over
their useful lives. The estimated residual value of plant and
equipment has been assessed to be zero. The estimated useful
lives, residual values and depreciation method are reviewed at
the end of each reporting period, with the effect of any change
in estimate accounted for on a prospective basis.
Property Plant & Equipment
Cost
Accumulated depreciation
Net Carrying amount
Reconciliation
Carrying amount at beginning of period
Additions
Disposals
Depreciation charge for the period
Net carrying amount at end of period
An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount. An impairment loss is
recognised for the amount by which the assets carrying
amount exceeds its recoverable amount. The recoverable
amount is the higher of an assets fair value less costs to sell
and value in use. Gains and losses on disposals are determined
by comparing proceeds with their carrying amount.
Leases
Leases are classified as finance leases whenever the terms of
the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as
operating leases.
The Group as lessor
Amounts due from lessees under finance leases are recognised
as receivables at the amount of the Group’s net investment in
the leases. Finance lease income is allocated to accounting
periods to reflect a constant periodic rate of return on the
Group’s net investment outstanding in respect of the leases.
Rental income from operating leases is recognised on a
straight-line basis over the term of the relevant lease. Initial
direct costs incurred in negotiating and arranging an operating
lease are added to the carrying amount of the leased asset and
recognised on a straight-line basis over the lease term.
Year ended
30 June 2022
$AUD
Year ended
30 June 2021
$AUD
566,166
(525,071)
41,095
148,339
37,400
-
(144,644)
41,095
528,766
(380,427)
148,339
330,681
17,294
-
(199,636)
148,339
DIGITALX LTD | 2022 ANNUAL REPORT | 67
E2 - NON-CURRENT ASSETS – RIGHT OF USE
(A) Change of accounting policy
(B) Adjustments recognised on adoption of AASB16
On 1 July 2019, the Group adopted the new leasing standard,
AASB16: Leases, which replaced the existing standard,
AASB117: Leases.
Under the new standard, leases are no longer classified as
operating leases or finances leases as they had been previously
under AASB 117.
In applying AASB16 from 1 July 2019 the Group has adopted
the new standard retrospectively but has not restated
comparatives for the 2018 or 2019 reporting comparatives, as
permitted under the transitional provisions of the new
standard.
The reclassifications and impact of the new standard are
therefore recognised in the opening statement of financial
position on 1 July 2019.
At the time of the change, the Group only had one lease
classified as an operating lease, being the lease for the
Blockchain Centre entered in to in July 2018 for a term of 5
years, that was required to be recognised:
(C) Lease liability
The lease liabilities were recognised at the present value of
remaining lease payments, discounted using the Group’s
incremental borrowing rate (8.8%) at the time of the adoption.
Right of use asset
Accumulated amortisation
Net Carrying amount
Reconciliation
Carrying amount at beginning of period
Partial de-recognition of lease – net
Depreciation charge for the period
Net carrying amount at end of period
Carrying amount at beginning of period
Interest expense
Lease payments
Partial de-recognition of lease – net
Net carrying amount at end of period
Current
Non-Current
30 June 2022
$AUD
598,208
30 June 2021
$AUD
598,208
(478,566)
(358,924)
(119,642)
239,283
239,283
-
(119,641)
119,642
424,241
863
(185,821)
239,283
30 June 2022
$AUD
30 June 2021
$AUD
302,589
20,544
(146,712)
-
176,421
176,421
-
-
489,402
32,870
(164,138)
(55,545)
302,589
126,169
176,421
302,589
DIGITALX LTD | 2022 ANNUAL REPORT | 68
E3 - NON-CURRENT ASSETS - INTANGIBLE ASSETS
Internally generated intangible assets - Research and
development expenditure
Expenditure on research activities is recognised as an expense
in the period in which it is incurred. An internally generated
intangible asset arising from development (or from the
development phase of an internal project) is recognised if, and
only if, all of the following have been demonstrated:
•
•
The technical feasibility of completing the intangible
asset so that it will be available for use or sale;
The intention to complete the intangible asset and
use or sell it;
The ability to use or sell the intangible asset;
•
• How the intangible asset will generate probable
•
•
future economic benefits;
The availability of adequate technical, financial and
other resources to complete the development and to
use or sell the intangible asset; and
The ability to measure reliably the expenditure
attributable to the
its
development.
intangible asset during
The amount initially recognised for internally generated
intangible assets is the sum of the expenditure incurred from
the date when the intangible asset first meets the recognition
criteria listed above. Where no internally generated intangible
asset can be recognised, development expenditure
is
recognised in profit or loss in the period in which it is incurred.
initial recognition,
Subsequent to
internally generated
intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the
same basis as intangible assets that are acquired separately.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is
not amortised. Instead, goodwill
is tested annually for
impairment, or more frequently if events or changes in
circumstances indicate that it might be impaired, and is carried
at cost less accumulated impairment losses. Impairment losses
on goodwill are taken to profit or
loss and are not
subsequently reversed.
Cost
Accumulated Amortisation
Provision for impairment
Net Carrying amount
Capitalisation of development costs
The development activities are part of an internal project, with
costs incurred both by an internal software development team
and through the outsourcing of development activities to
external contractors. The total cost capitalised on the project
at 30 June 2022 is $AUD3,369,369.
An intangible asset arising from the development phase of an
internal project shall be recognised if, and only if, an entity can
demonstrate all of the following:
•
•
•
•
•
•
The technical feasibility of completing the intangible
asset so that it will be available for use or sale;
Its intention to complete the intangible asset and use or
sell it;
Its ability to use or sell the intangible asset;
How the intangible asset will generate probable future
economic benefits. Among other things, the entity can
demonstrate the existence of a market for the output of
the intangible asset or the intangible asset itself or, if it is
to be used internally, the usefulness of the intangible
asset;
The availability of adequate technical, financial and other
resources to complete the development and to use or sell
the intangible asset; and
Its ability
attributable
development.
the expenditure
its
to measure
the
to
intangible asset during
reliably
The Company has evaluated the criteria required to be
satisfied for an intangible asset arising from the development
phase of an internal project to be recognised and concluded
that all conditions required to recognise an intangible asset
generated from development of an internal project have been
demonstrated.
The Company has evaluated the future economic benefit by
modelling the expected future cash flows to estimate a value
of the asset.
30 June 2022
$AUD
5,257,673
(58,691)
(2,920,930)
2,278,051
30 June 2021
$AUD
3,197,565
-
(2,928,793)
268,772
Additions for the year primarily relate costs capitalised for the development of the Drawbridge regtech product and the goodwill
recognised on the acquisition of Sell My Shares.
DIGITALX LTD | 2022 ANNUAL REPORT | 69
Cost
Impairment
Accumulated amortisation
Opening Balance
Additions
Amortisation
Closing Balance
Development at Cost
$AUD
3,369,369
(2,920,930)
(58,691)
389,747
239,283
171,804
(58,691)
352,396
Goodwill
$AUD
1,888,304
-
-
1,888,304
-
1,888,304
-
1,888,304
Total
$AUD
5,257,673
(2,920,930)
(58,691)
2,278,051
239,283
2,060,108
(58,691)
2,240,700
Goodwill
The total balance of goodwill relates to the acquisition of Sell My Shares, as set out below, during the 2022 financial year. Despite
being acquired during the 2022 financial year the goodwill has been tested at reporting date based on a value in use calculation. The
calculations use cash flow projections based a five-year period using management estimates. For the value in use calculation the key
assumption used by management include a 20% revenue growth (consistent with actual outperformance of targets during the
deferred consideration period and management’s expectation for future growth based on integration with Drawbridge and product
expansion underway at 30 June 2022), 20% net profit (consistent with actual performance for the financial year ending 30 June 2022
and management’s assumption profitability will be maintained) and a pre-tax discount rate of 11.3% (based on comparable ASX
listed financial service companies).
Acquisition of Sell My Shares
On 30 September 2021, the Company acquired 100% of the business assets of Sell My Shares for consideration of AUD$1,640,000
upfront plus $250,000 in deferred consideration subject to revenue and expenditures-based milestones. The strategic acquisition
was completed to accelerate Drawbridge commercialisation and enable compliant employee share trading. The acquisition has been
earning accretive.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other
assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or
liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For
each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share
of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the consolidated entity's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in
profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the
fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration
classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
DIGITALX LTD | 2022 ANNUAL REPORT | 70
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the
acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is
recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net
assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer
on the acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-
controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the
acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts
recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained
about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12
months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.
Details of the purchase consideration and net assets acquired are set out below:
Purchase Consideration
Cash consideration
Contingent consideration
Total purchase consideration
Property, Plant and Equipment
Other current assets
Intangible assets (website and domains)
Employee entitlements
Net deferred tax
Net identifiable assets acquired
Goodwill
Total
(i) Goodwill
$AUD
1,640,000
250,000
1,890,000
Fair Value
($AUD)
10,000
4,538
29,960
(42,158)
(643)
1,697
1,888,304
1,890,000
Goodwill is attributable to the strong and sustained profitability of the Sell My Shares business in the one-off share sale market over
a sustained period of time. There are also synergies with the Company’s existing Drawbridge product to facilitate compliant employee
share trading.
(ii) Contingent Consideration
A cash payment up to A$250,000 is to be paid 6 months following settlement for the satisfaction of monthly revenue targets and
satisfaction of expense ratio (total revenue divided by advertising spend).
For any particular month the performance targets are not satisfied the Deferred Consideration will be decreased on a pro-rata basis
for the percentage of underperformance. Fair value of the consideration at 30 June 2022 was nil as the milestone was met during the
period and paid.
(iii) Revenue and Profit Contribution
The acquired business contributed revenue to the Group of $1,364,545 and profit of $271,109 for the period 30 September to 30 June
2022.
(iv) Acquisition Related Costs
There were immaterial acquisition related costs (legal fees) for the transaction. These are included in the profit or loss.
DIGITALX LTD | 2022 ANNUAL REPORT | 71
[F – EQUITY]
The section below includes information regarding the Group’s equity structure including movements in contributed equity from
share transactions and movements in reserves.
The section includes the following disclosures:
F1 Contributed Equity (Page 72)
F2 Reserves (Page 73)
DIGITALX LTD | 2022 ANNUAL REPORT | 72
F1 – CONTRIBUTED EQUITY
(a) Issued and paid up Capital
Fully paid ordinary shares – 742,444,039
(2021: 739,675,657)
(b) Movement in Ordinary Share Capital
Date
Details1
30-Jun-21
Closing Balance
Year ended
30 June 2022
$AUD
Year ended
30 June 2021
$AUD
59,028,586
58,796,111
Number of
Shares
739,675,657
Issue Price A$
$AUD
58,796,111
10-Nov-21
Issued of shares on conversion of options
2,768,382
0.0847
234,482
11-Nov-21
Share issues costs
30-Jun-22
Closing Balance
-
-
(2,008)
742,444,039
59,028,586
Issue Price A$
$AUD
Date
Details
30-Jun-20
Closing Balance
1-Sep-20
1-Sep-20
3-Sep-20
Issue of Shares on exercise of options
Issue of shares to employees
Share issue costs
Number of
Shares
605,628,549
5,251,852
1,136,634
0.0324
0.0440
10-Sep-20
Issue of Shares on exercise of options
2,561,728
0.0324
11-Sep-20
Share issue costs
21-Sep-20
Issue of Shares on exercise of options
2,600,000
0.0324
22-Sep-20
Share Issue costs
4-Dec-20
7-Dec-20
Issue of shares to directors in lieu of fees
2,029,914
0.0480
Share Issue costs
50,489,288
170,160
50,012
(2,582)
83,000
(1,922)
84,240
(1,922)
97,436
(2,465)
9-Mar-21
Issue of shares from capital raising
97,963,164
0.0900
8,816,685
9-Mar-21
Share issue costs
9-Mar-21
Share issue costs - Warrants to issued to Corporate Advisor
10-Mar-21
Share issue costs
(791,232)
(336,014)
(20,832)
22-Mar-21
Issue of shares on conversion of performance rights
19,500,000
0.0900
-
23-Mar-21
Share issue costs
21-May-21
Issue of shares to directors in lieu of fees
21-May-21
Issue of shares to employees
24-May-21
Share issue costs
30-Jun-21
Closing Balance
1 Refer to the corresponding Appendix 3B for full details of each issue.
2 Refer to Note H1 for any issues subsequent to the end of the reporting period
503,816
2,500,000
0.0480
0.0590
(7,094)
24,183
147,500
(2,329)
739,675,657
58,796,110
DIGITALX LTD | 2022 ANNUAL REPORT | 73
Rights Attaching to Shares
The rights attaching to fully paid ordinary shares arise from a combination of the Company’s constitution, statute and general law.
Fully paid ordinary shares carry one vote per share and carry a right to dividend.
Dividends
There are no dividends paid or declared during the period.
F2 – RESERVES
Nature of reserves
Option premium and share-
based payment reserve
Reserve is established to record balances pertaining to share options and performance rights
granted for services provided to the Company by employees and vendors.
Convertible note reserve
Foreign Exchange Reserve
Asset Revaluation Reserve
Reserve is established to record amounts required to be recognised in equity for convertible notes
that meet the definition of compound instruments.
Exchange differences arising on translation of the foreign controlled entity are recognised in other
comprehensive income and accumulated in a separate reserve within equity. The cumulative
amount is reclassified to profit or loss when the net investment is disposed of.
Reserve is established to record the fair value movement in digital assets.
e
t
o
N
Option premium
and share-based
payment reserve1
Convertible Note
Reserve
Asset
Revaluation
Reserve
Foreign Exchange
Reserve
30 June 2021
Share based payment expense
Conversion of foreign operations
Revaluation of digital assets
2,957,307
53,157
-
-
91,051
14,930,755
(12,215)
-
-
-
-
-
(12,895,148)
-
245
-
30 June 2022
3,013,854
91,051
2,035,607
(12,460)
e
t
o
N
Option premium
and share-based
payment reserve1
Convertible Note
Reserve
Asset
Revaluation
Reserve
Foreign Exchange
Reserve
30 June 2020
Share based payment expense
Conversion of foreign operations
Revaluation of digital assets
2,105,857
1854,839
-
-
91,051
-
-
-
-
-
-
14,930,756
30,144
-
(42,359)
-
30 June 2021
2,960,697
91,051
14,930,756
(12,215)
1 Ordinary share issues treated as share-based payments that have no vesting conditions are recognised directly in equity.
Share based payments
Employees and consultants of the Group receive remuneration in the form of share-based payments, whereby employees render
services as consideration for equity instruments (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate
valuation model. That cost is recognised, together with a corresponding increase in other capital reserves in equity, over the period
in which the performance and/or service conditions are fulfilled in employee benefits expense.
DIGITALX LTD | 2022 ANNUAL REPORT | 74
The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to
which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest.
The statement of profit or loss expense or credit for a period represents the movement in cumulative expense recognised as at the
beginning and end of that period and is recognised in employee benefits expense. No expense is recognised for awards that do not
ultimately vest, except for equity-settled transactions, for which vesting is conditional upon a market or non-vesting condition.
These are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other
performance and/or service conditions are satisfied.
Valuation of options
The fair value of the share options and performance rights at grant date are determined using a binomial option pricing method that
takes into account the exercise price, the term of the option, the probability of exercise, the share price at grant date and expected
volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.
The following tables list the inputs to the model used for valuation of the options:
Options issued to Non-Executive Director
Item
Volatility (%)
Risk-free interest rate (%) – range
Expected life of option (years)
Exercise price per terms & conditions
Underlying security spot price
Valuation date
Expiry date
Valuation per option
Number of options issued
Vesting condition
Valuation methodology
Options issued to Chief Executive Officer
Item
Volatility (%)
Risk-free interest rate (%) – range
Expected life of option (years)
Exercise price per terms & conditions
Underlying security spot price
Valuation date
Expiry date
Valuation per option
Number of options issued
Vesting condition
Valuation Methodology
Valuation of performance rights
Tranche 1
103.14%
1.03%
3
$AUD0.10
$AUD0.084
6/12/2021
30 June 2024
$AUD0.076
2,500,000
Immediate
Black-Scholes
Tranche 4
112.60%
2.63%
5
$0.199
$0.075
4 April 2022
11 April 2027
$0.052
1,630,435
Service based
Black-Scholes
Tranche 1
112.60%
2.63%
5
$0.091
$0.075
4 April 2022
11 April 2027
$0.059
1,415,094
Service based
Black-Scholes
Tranche 2
112.60%
2.63%
5
$0.118
$0.075
4 April 2022
11 April 2027
$0.057
1,470,588
Service based
Black-Scholes
Tranche 3
112.60%
2.63%
5
$0.153
$0.075
4 April 2022
11 April 2027
$0.054
1,530,612
Service based
Black-Scholes
The fair value of performance rights with market-based conditions at grant date are determined using a Monte-Carlo simulation
method that takes into account the market conditions, the term of the vesting period, the share price at grant date and expected
volatility of the underlying share across a number of simulations. There were no performance rights issued during the period,
DIGITALX LTD | 2022 ANNUAL REPORT | 75
Options and performance rights on issue or owed as at 30 June 2022
Date options
granted
Options
Vesting
Date
Option class
Exercise price of
options
Expiry date of
options
Number of shares
under option
10 December 2018
10 December 2018
Unlisted
$0.22
10 December 2023
2,000,000
10 December 2018
10 December 2018
Unlisted
$0.25
10 December 2023
3,000,000
10 December 2018
10 December 2018
Unlisted
$0.30
10 December 2023
4,000,000
11 July 2019
11 July 2019
Unlisted
6 December 2021
6 December 2021
Unlisted
11 April 2022
11 April 2022
11 April 2022
11 April 2022
Warrants
-
-
-
-
Unlisted
Unlisted
Unlisted
Unlisted
$0.10
$0.10
$0.091
$0.118
$0.153
$0.199
30 June 2024
2,500,000
30 June 2024
2,500,000
11 April 2027
1,415,094
11 April 2027
1,470,588
11 April 2027
1,530,612
11 April 2027
1,630,435
9 March 2021
9 March 2021
Unlisted
$0.10
9 March 2024
48,981,582
9 March 2021
9 March 2021
Unlisted
$0.1125
9 March 2024
6,857,421
DIGITALX LTD | 2022 ANNUAL REPORT | 76
[G - GROUP STRUCTURE]
The section below includes information regarding the Group organisational structure and information related to the parent entity as
required by the Corporations Act 2001.
G1 - PRINCIPLES OF CONSOLIDATION
The consolidated financial report incorporates the assets and
liabilities of all subsidiaries of DigitalX Limited (Company or
Parent Entity) as at period end and the results of all
subsidiaries for the period then ended. DigitalX Limited and its
subsidiaries together are referred to as the Group or the
Consolidated Entity.
The consolidated
incorporate the
financial statements
financial statements of the Company and entities (including
structured entities) controlled by the Company and its
subsidiaries. Control is achieved when the Company:
• Has power over the investee;
•
Is exposed, or has rights, to variable returns from its
involvement with the investee; and
• Has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an
investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control listed
above. The Company considers all relevant facts and
circumstances in assessing whether or not the Company's
voting rights in an investee are sufficient to give it power,
including:
•
•
The size of the Company's holding of voting rights
relative to the size and dispersion of holdings of the
other vote holders;
Potential voting rights held by the Company, other
vote holders or other parties;
• Rights arising from other contractual arrangements;
and
• Any additional facts and circumstances that indicate
that the Company has, or does not have, the current
ability to direct the relevant activities at the time that
decisions need to be made, including voting patterns
at previous shareholders' meetings.
Consolidation of a subsidiary begins when the Company
obtains control over the subsidiary and ceases when the
Company loses control of the subsidiary. Specifically, income
and expenses of a subsidiary acquired or disposed of during
the year are included in the consolidated statement of profit
or loss and other comprehensive income from the date the
Company gains control until the date when the Company
ceases to control the subsidiary.
When necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies
into line with the Group's accounting policies. All intragroup
assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the Group are
eliminated in full on consolidation.
G2 - CONTROLLED ENTITIES
The consolidated financial statements incorporate the assets,
liabilities and results of the following subsidiaries
in
accordance with the accounting policy described in Note G1.
All controlled entities are included in the consolidated annual
final report. The parent entity does not guarantee to pay the
deficiency of its controlled entities in the event a winding up
of any controlled entity. The period end of the controlled
entities is the same as that of the parent entity, except for the
US companies listed below which use 31 December year end.
Name of Controlled Entity
Place of Incorporation
% of Shares Held
2022
% of Shares Held
2021
Digital CC Management Pty Ltd
Digital CC Trading Pty Ltd
Digital CC IP Pty Ltd
Digital CC Limited
Digital CC IP Limited
Australia
Australia
Australia
Hong Kong
Hong Kong
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
DIGITALX LTD | 2022 ANNUAL REPORT | 77
Name of Controlled Entity
Place of Incorporation
% of Shares Held
2022
% of Shares Held
2021
Digital CC Holdings USA Inc
Digital CC USA LLC
Digital CC USA Services LLC
Digital CC Ventures Pty Ltd
Pass Petroleum Pty Ltd
Airpocket International Pty Ltd
United States
United States
United States
Australia
Australia
Australia
AirPocket LLC
United States
DigitalX Funds Management Pty Ltd
DigitalX Fund Unit Trust
DigitalX Bitcoin Fund Unit Trust
DigitalX Asset Management Pty Ltd
Sell My Shares Pty Ltd
Year ended 30 June 2022
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
73%
34.73%
60.31%
100%
100%
100%
100%
100%
100%
100%
100%
100%
73%
41%
60%
100%
-
There were no changes to the controlled entities during the year ended 30 June 2022 except for those noted below:
Sell My Shares Pty Ltd was incorporated to acquire the business assets of Sell My Shares as set out in Note E3.
Year ended 30 June 2021
There were no changes to the controlled entities during the year ended 30 June 2021 except for those noted below:
• DigitalX New Tech Fund Inc. (de-registered through normal course of business);
• DigitalX (BVI) Limited (de-registered through normal course of business); and
• Digital Asset Administration Cayman Limited (de-registered through normal course of business).
G3 - PARENT ENTITY INFORMATION
The accounting policies of the parent entity, which have been
applied in determining the financial information shown below,
are the same as those applied in the consolidated financial
statements. Refer to Summary Note B1 for a summary of the
significant accounting policies relating to the Group.
Parent entity financial information
The financial information for the parent entity, DigitalX
Limited, disclosed below has been prepared on the same basis
as the consolidated financial statements, except as set out
below:
Investments in subsidiaries, associates and joint venture
entities
Investments in subsidiaries, associates and joint venture
entities are accounted for at cost in the financial statements
of DigitalX Limited.
Financial guarantees
Where the parent entity has provided financial guarantees in
loans and payables of subsidiaries for no
relation to
compensation, the fair values of these guarantees are
accounted for as contributions and recognised as part of the
cost of the investment.
Tax consolidation legislation
DigitalX Limited and its wholly-owned Australian controlled
entities have implemented the tax consolidation legislation.
The head entity, DigitalX Limited, and the controlled entities in
the tax consolidated group account for their own current and
deferred tax amounts. These tax amounts are measured as if
each entity in the tax consolidated group continues to be a
stand-alone taxpayer in its own right. In addition to its own
current and deferred tax amounts, DigitalX 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.
DIGITALX LTD | 2022 ANNUAL REPORT | 78
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate DigitalX Limited
for any current tax payable assumed and are compensated by DigitalX Limited for any current tax receivable and deferred tax assets
relating to unused tax losses or unused tax credits that are transferred to DigitalX Limited under the tax consolidation legislation. The
funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity,
which is issued as soon as practicable after the end of each financial period. The head entity may also require payment of interim
funding amounts to assist with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts
receivable from or payable to other entities in the group. Any difference between the amounts assumed and amounts receivable or
payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated
entities.
(a) Summary of financial information
Financial position
Assets
Current assets
Non-Current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Contributed Equity
Retained earnings/(losses)
Reserves
-
-
-
Share based payment
Intangible asset reserve
Convertible note
Total equity
Financial performance
Profit/(loss) for the year and other comprehensive income/(loss)
Total comprehensive income/(loss)
(b) Commitments and Contingent Liabilities of the parent
30 June 2022
$AUD
30 June 2021
$AUD
13,979,814
14,256,058
28,235,872
(1,262,397)
-
(1,262,397)
110,687,599
(95,022,815)
8,775,389
2,442,250
91,052
26,973,475
28,307,422
14,256,058
42,563,480
(868,740)
-
(868,740)
110,455,124
(92,501,033)
8,718,842
14,930,755
91,051
41,694,740
(2,521,782)
(14,953,740)
21,801,836
21,801,836
The parent entity did not have any contingent liabilities or commitments, as at 30 June 2022 other than those disclosed below
in Note H2.
(c) Guarantees entered into the parent entity
There were no guarantees entered into by the parent entity other than those disclosed in Note H2.
DIGITALX LTD | 2022 ANNUAL REPORT | 79
[H - OTHER DISCLOSURES]
The section below includes information regarding other disclosures relevant to users of the financial statement in understanding
other transactions and the impact of future standards or events that may impact the Group.
The section includes the following disclosures:
H1 Related Party Transactions (Page 80)
H2 Commitments and contingents (Page 80)
H3 New Accounting Standards and Interpretations (Page 81)
H4 Post balance date events (Page 81)
DIGITALX LTD | 2022 ANNUAL REPORT | 80
H1 - RELATED PARTY TRANSACTIONS
(a) Subsidiaries
Interests in subsidiaries are set out in Note G2. Balances and transaction between the Company and its subsidiaries, which are related
parties of the Company, have been eliminated on consolidation and are not disclosed in this note.
(b) Transactions with Key Management Personnel
Short term employee benefits
Salaries and fees
Director fees
Other benefits
Post-Employment Benefits
Superannuation
Share-based payments
Shares granted
Options and performance rights1
Total Remuneration
Year ended
30 June 2022
$AUD
Year ended
30 June 2021
$AUD
572,552
160,415
(13,555)
579,590
100,000
30,680
68,553
63,739
-
68,594
130,483
430,388
856,560
1,334,879
1 Refer to Note F2 for details of the events relating to performance rights and options effecting key management personnel.
(c) Transactions with Director related entities
Year ended 30 June 2022
• During the year, the Group paid Steinepreis Paganin, a law firm of which Non-Executive Chairman Toby Hicks is a partner,
$AUD47,337 for legal services rendered on various matters. This amount relates to the period of the financial year that Mr Hicks
was a Director of the Company.
• During the year, the Group paid GAD Consulting Pty Ltd AUD$500, a company of which Greg Dooley is a director for consulting
services rendered on various matters. This amount relates to the period of the financial year that Mr Dooley was a Director of the
Company.
Year ended 30 June 2021
• During the year, the Group paid Steinepreis Paganin, a law firm of which Non-Executive Chairman Toby Hicks is a partner,
$AUD39,613 for legal services rendered on various matters. This amount relates to the period of the financial year that Mr Hicks
was a Director of the Company.
H2 – COMMITMENTS AND CONTINGENCIES
Commitments of the Group
During the 2018 financial year entered into a 5-year lease for premises at 66 Kings Park Road, West Perth, WA (“The Blockchain
Centre”). At 30 June the amount due within 12 months was $176,421 and the committed between 12 months and 5 years was nil.
There were no commitments greater than 5 years.
The Group did not have any commitments (other than those set out in note D2 & D5) and above, as at 30 June 2022 (2021: Nil).
Guarantees entered into by the Group
There were no guarantees entered into by the Group as at 30 June 2022 other than for the lease noted above (2021: Nil).
DIGITALX LTD | 2022 ANNUAL REPORT | 81
Contingent Liabilities of the Group
The Group did not have any contingent liabilities as at 30 June 2022 (2021: Nil).
H3 - NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
Standards and Interpretations in issue not yet adopted
The Company has reviewed the standards that have been issued but not yet effective and have determined there will be no material
impact on adoption of the standards.
H4 - EVENTS AFTER THE REPORTING DATE
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected the group’s operations, results or state
of affairs, or may do so in future years other than those set out below.
Date of event
29 August 2022
29 September 2022
Details of event
On 29 August 2022 the Company issued 3,075,000 ordinary shares, 10,000,000 options exercisable at
$0.05 and 15,640,000 exercisable at $0.11.
Due to the volatile nature and the materiality of the digital assets held, we disclose the value of material
digital assets held by the Group, excluding the DigitalX Fund and DigitalX BTC Fund and unlisted digital
assets, as at the close date of the 29 September.
Coin Symbol
Coin Amount
BTC
HMT
Total
212.86
12,500,000
-
$AUD Price
at 30 June
$28,684
$0.665
-
$AUD Spot Price
at 29 Sept
$30,074
$0.0978
-
$AUD Balance
$6,401,551
$1,221,875
$7,623,426
There were no other reportable subsequent events.
DIGITALX LTD | 2022 ANNUAL REPORT | 82
CORPORATE DIRECTORY
Directors
Toby Hicks
Non-Executive Chairman
Greg Dooley
Non-Executive Director
Peter Rubinstein
Non-Executive Director
Company Secretary
Joel Ives
ABN
59 009 575 035
Registered Office and Principal Place of Business
Suite 1, Level 2,
66 Kings Park Road
West Perth WA 6005
Tel: +61 (8) 9322 1587
Auditor
BDO Audit (WA) Pty Ltd
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6005
Tel: +61 (8) 6382 4600
Fax: +61 (8) 6382 4601
Stock Exchange Listing
DigitalX Limited shares are listed on the Australian Securities Exchange (ASX Code: DCC)
Share Registry
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
Perth WA 6000
GPO Box D182
Perth WA 6840
Telephone: +61 (8) 9323 2000
Facsimile: +61 (8) 9323 2096
Email: perth.services@computershare.com.au
Website www.digitalx.com
DIGITALX LTD | 2022 ANNUAL REPORT | 83
AUSTRALIAN SECURITIES EXCHANGE INFORMATION
The following information is current as at 27 September 2022.
EXCHANGE LISTING
DigitalX Limited shares are listed on the Australian Securities Exchange. The Company’s ASX code is DCC.
DISTRIBUTION OF SHAREHOLDERS
The number of shareholders, by size of holding, are:
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
Number of
Holders
231
2,274
1,657
3,511
879
Number of
Shares
46,319
6,755,364
13,210,783
125,446,060
600,060,513
745,519,039
UNMARKETABLE PARCELS
Holdings of less than a marketable parcel of ordinary shares:
Holders: 4,944
Shares: 15,152
UNQUOTED SECURITIES
For each class of unquoted securities, if a person holds 20% or more of the securities in a class, the name of the holder and number
of securities held is disclosed.
UNLISTED OPTIONS
Unlisted Options exercisable at $0.22 each on or before 10 December 2023
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
1 Irwin Biotech Nominees Pty Ltd holds 1,000,000 Options comprising 50% of this class.
2 Blockchain Global Ltd holds 1,000,000 Options comprising 50% of this class.
Unlisted Options exercisable at $0.25 each on or before 10 December 2023
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
1 Irwin Biotech Nominees Pty Ltd holds 1,500,000 Options comprising 50% of this class.
2 Blockchain Global Ltd holds 1,500,000 Options comprising 50% of this class.
Number of
Holders
-
-
-
-
21-2
2
Number of
Holders
-
-
-
-
21-2
2
Number of Options
-
-
-
-
2,000,000
2,000,000
Number of Options
-
-
-
-
3,000,000
3,000,000
DIGITALX LTD | 2022 ANNUAL REPORT | 84
Unlisted Options exercisable at $0.30 each on or before 10 December 2023
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
1 Irwin Biotech Nominees Pty Ltd holds 2,000,000 Options comprising 50% of this class.
2 Blockchain Global Ltd holds 2,000,000 Options comprising 50% of this class.
Unlisted Options exercisable at $0.05 each on or before 9 September 2023
Range
Number of
Holders
-
-
-
-
21-2
2
Number of Options
-
-
-
-
4,000,000
4,000,000
-
1–1,000
-
1,001–5,000
-
5,001–10,000
-
10,001–100,000
10,000,000
100,001 and over
Total
10,000,000
1 Matthew Robert Harry holds 10,000,000 options comprising 100% of this class. Vesting of this class is subject to the funds management division reaching AU$100m
in funds under management.
Number of
Holders
-
-
-
-
11
1
Number of Options
Unlisted Options exercisable at $0.10 each on or before 30 June 2024
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
1 Emboodhu Pty Ltd holds 2,500,000 options comprising 100% of this class.
Unlisted Options exercisable at $0.10 each on or before 30 June 2024
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
2 Greg Dooley holds 2,500,000 options comprising 100% of this class.
Number of
Holders
-
-
-
-
1
1
Number of
Holders
-
-
-
-
1
1
Number of Options
-
-
-
-
2,500,000
2,500,000
Number of Options
-
-
-
-
2,500,000
2,500,000
DIGITALX LTD | 2022 ANNUAL REPORT | 85
Unlisted Options exercisable at $0.10 each on or before 18 December 2024
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
1 Shaw and Partners Limited holds 500,000 options comprising 50% of this class.
2 Pareto Nominees Pty Ltd holds 500,000 options comprising 50% of this class.
WARRANTS
Unlisted warrants exercisable at $0.10 each on or before 8 March 2024
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
1 Armistice Capital Master Fund Ltd holds 33,725,006 warrants comprising 68.9% of this class.
2 Lind Global Macro Fund LP holds 9,423,243 warrants comprising 19.2 of this class.
3 Iroquois Master Fund Ltd holds 5,833,333 warrants comprising 11.9% of this class.
Unlisted Options exercisable at $0.1125 each on or before 30 June 2024
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
1 H.C. Wainwright & Co (or its staff and nominees) hold 6,857,421 comprising 100% of this class.
Unlisted Options exercisable at $0.091 each on or before 11 April 2027
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
1 Lisa Wade holds 1,415,094 options comprising 100% of this class.
Number of
Holders
-
-
-
-
2
2
Number of Options
-
-
-
-
1,000,000
1,000,000
Number of
Holders
-
-
-
-
3
3
Number of
Holders
-
-
-
1
3
4
Number of
Holders
-
-
-
-
1
1
Number of Options
-
-
-
-
48,981,582
46,981,582
Number of Options
-
-
-
68,574
6,788,847
6,857,421
Number of Options
-
-
-
-
1,415,094
1,415,094
DIGITALX LTD | 2022 ANNUAL REPORT | 86
Unlisted Options exercisable at $0.118 each on or before 11 April 2027
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
1 Lisa Wade holds 1,470,588 options comprising 100% of this class.
Unlisted Options exercisable at $0.153 each on or before 11 April 2027
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
1 Lisa Wade holds 1,530,612 options comprising 100% of this class.
Unlisted Options exercisable at $0.199 each on or before 11 April 2027
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
1 Lisa Wade holds 1,630,435 options comprising 100% of this class.
Unlisted Options exercisable at $0.11 each on before 29 August 2025
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
1 100% of this class are held by staff.
Number of
Holders
-
-
-
-
1
1
Number of
Holders
-
-
-
-
1
1
Number of
Holders
-
-
-
-
1
1
Number of
Holders
-
-
-
-
14
14
Number of Options
-
-
-
-
1,470,588
1,470,588
Number of Options
-
-
-
-
1,530,612
1,530,612
Number of Options
-
-
-
-
1,630,435
1,630,435
Number of Options
-
-
-
-
15,640,000
15,640,000
DIGITALX LTD | 2022 ANNUAL REPORT | 87
LISTING OF 20 LARGEST SHAREHOLDERS
The names of the twenty largest registered holders of quoted ordinary shares are:
Name
Number of Shares
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
BNP PARIBAS NOMINEES PTY LTD
NRB INTERNATIONAL LLC
CITICORP NOMINEES PTY LIMITED
ATCHO SUPER PTY LTD
IRWIN BIOTECH NOMINEES PTY LTD
IRWIN BIOTECH NOMINEES P/L
ACL INVESTMENT AUSTRALIA PTY LTD
EMBOODHU PTY LTD
VALUEADMIN COM PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMS PTY LTD
MR HING WA CHAN
MR RICHARD JAMES ANSELL
BRIXTON CAPITAL PTY LTD
MJ & A LIND PTY LTD
OZSTUDY GROUP PTY LTD
SHELLEY PROPERTIES PTY LIMITED
MR BASIL MICOS
MR DUNCAN JOHN HEAZLEWOOD + MRS JANE LOUISE HEAZLEWOOD
65,906,165
21,478,799
21,223,785
17,063,012
12,000,000
11,196,296
8,626,348
8,397,221
8,194,444
7,200,000
6,975,336
6,894,460
6,555,817
5,919,905
5,127,618
5,057,586
5,030,766
4,913,207
4,161,964
4,070,000
Percentage of
Shares
8.84
2.88
2.85
2.29
1.61
1.50
1.16
1.13
1.10
0.97
0.94
0.92
0.88
0.79
0.69
0.68
0.67
0.66
0.56
0.55
TOTAL
235,992,729
31.65
SUSTANTIAL SHAREHOLDERS (HOLDING NOT LESS THAN 5%)
There were no substantial shareholders holding 5% or more of the voting shares in the Company as at 27 September 2022.
VOTING RIGHTS
All ordinary shares carry one vote per share without restriction. No voting rights are attached to Options.
ON MARKET BUY BACK
There is no current on-market buy-back.
CORPORATE GOVERNANCE STATEMENT
The Company’s Corporate Governance Statement for the 2022 financial year can be accessed at:
https://digitalx.com/investor-centre
www.digitalx.com
ASX:DCC