2019 Annual Report
DomaCom Limited and its Controlled Entities
ABN 69 604 384 885
For personal use only DOMACOM LIMITED
ABN 69 604 384 885
Table of Contents
Chairman’s Report
CEO’s Report
Financial Report
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Information
2
3
6
22
23
24
25
26
27
56
57
61
63
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DOMACOM LIMITED
ABN 69 604 384 885
CHAIRMAN’S REPORT
30 JUNE 2019
Dear Shareholder
It is pleasing to see some light at the end of the tunnel with 2018-19 delivering some major milestones. After 5
long years negotiating with the regulator on the important topic and associated product, Senior Equity Release,
we now have an offering which can be used in the market to help the many retirees who don’t have sufficient
money for a comfortable retirement but substantial equity in their home. An enormous effort from the team to get
this missing offering into the market since the reduction in attractiveness of reverse mortgages.
Whilst not a key objective when we started, we have come to realise that many of DomaCom’s key projects
have at the heart of them, community benefits driven by the uniqueness and flexibility of the DomaCom
fractional investment platform. Whether it is solar farms and wind farms, affordable housing, equity available to
live on or better ways to get children into the property market, DomaCom has some of the key components to
solve these challenging situations facing the broader community today. This is supported by our main fractional
property investment offering which is also gaining more traction in a disjointed property market. As we move
closer to zero interest rates, investors, particularly retirees, will be looking to yield and property will be one of the
few places to find it. We expect DomaCom to be a beneficiary of the very low interest rate market.
A challenging and disjointed property market was emphasised particularly in Sydney and Melbourne, both which
went backwards whilst banks tightened lending resulting in further worsening by an oversupply in some areas
and reduction in prices in many areas. This not only presented some challenges but also some opportunities as
our new lending availability through award winning Latrobe, started to come into its own with its client friendly
structure and ease of use.
We continue to have challenges around the capital to further enhance these offerings and on behalf of the
board, I wish to thank those shareholders both new and old for their continued support. I also wish to thank our
staff who work tirelessly to achieve the vision of DomaCom. We have never been in a better position to achieve
that vision and I look forward to sharing with you the many successes as we roll out these important offerings.
Grahame Evans
Chairman
20 August 2019
2
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DOMACOM LIMITED
ABN 69 604 384 885
CEO’S REPORT
30 JUNE 2019
Dear Shareholder
Overview
I am pleased to report that all aspects of the DomaCom business are now operational for the first time and that
the rate of growth in our Funds Under Management (FUM) has accelerated in the past 6 months. FY2019 saw a
number of key milestones being achieved for the company:
(cid:120) SMSF Sole Purpose Test
I am pleased to report in August 2018 the Full Federal Court of Australia (FFCA) overturned the original trial
judge with a unanimous ruling that it was not a breach of the Sole Purpose Test for a related party of an
SMSF to rent a property owned by a DomaCom sub-fund and where the SMSF and associated owned
100% of the sub-fund. Further, the ATO decided not to seek leave to appeal this decision to the High Court
of Australia which effectively locks this decision into case law.
This has been a long running action by DomaCom and represents a milestone for both DomaCom and
Australia as it will allow, under certain circumstances, SMSF’s to co-invest with their related parties (e.g.
children) who can then rent the property.
This creates several benefits that we believe will help drive growth in the funds under management of the
business:
- Children can get onto the property ladder whilst still renting by investing whatever amount they have
- Parents can co-invest into a sub-fund on an arm’s length basis and receive commercial returns
-
In addition to commercial returns, investors into the sub-fund (including SMSF’s) benefit from a
reduction in risk by having a tenant that is also a co-investor in the sub fund as they more likely to look
after the property
- Tenants also benefit from having security of tenure as, unlike private landlords, DomaCom will never
want to move in which means that the tenant can be sure they will not be evicted as long as they meet
the terms of the lease
We have been negotiating with the ATO for the past 6 months for an SMSF Sole Purpose Test Declaration
that will enable us to have clarity as to the circumstances that will allow related parties to rent a property
without threat of ATO enforcement action. We are nearing the conclusion of this drafting process and hope
to have the matter finalized of the next couple of months.
We believe that this will result in DomaCom being able to offer a mainstream solution to housing
affordability for the younger Australians using their own and their parent’s superannuation – a game
changer for Australia.
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DOMACOM LIMITED
ABN 69 604 384 885
CEO’S REPORT
30 JUNE 2019
(cid:120)
Internal Lending facility
After 5 years, we have managed to arrange an internal borrowing facility with La Trobe that will enable us to
offer leveraged property to our investors.
The lack of a leverage facility has, we believe been a major roadblock to our growth as:
- Financial advisers must consider the tax effectiveness of their advice and, for most investors, having an
unleveraged property investment is not tax effective. This has been a major hurdle for a lot of advisers
which has now been addressed.
- The internal leverage facility reduces the capital an adviser needs to raise which makes individual
syndications easier to complete.
- The same investment capital can now syndicate more properties as the investment capital can now be
combined with external debt.
As evidence of this importance of having internal leverage, almost all of the transaction in our pipeline either
have debt or will have debt when completed.
After taking 5 years to get to $40 million in FUM at the end of January 2019, our FUM has now started to
accelerate and is now circa $60 million – a 50% growth in just over 6 months with leverage being the key
driver of this growth.
(cid:120) Senior Equity Release (SER)
After receiving the necessary ASIC permissions in November 2018, the DomaCom Senior Equity Release
product was formally launched to the market in June 2019. This concludes a 7-year period to get the
necessary regulatory approvals and represents a major investment by the company.
The SER product is licensed as a financial product which allows financial advisers to advise on equity
release for their retired clients as part of a comprehensive financial plan. Our SER product is the only equity
release product that is licensed as financial product that financial advisers can use as part of their Australian
Financial Services License (AFSL) – the other equity release options are either credit products (e.g. reverse
mortgages) or real estate products (e.g. Homesafe Wealth Release) which operate within different licensing
regimes.
With the over 65-year old’s owning more than $500 billion in property1 and the funding of retirement
lifestyles a major challenge within Australia, our SER product is well positioned to play an important part in
helping fund retirees’ lifestyle.
With some estimates of an upcoming intergenerational wealth transfer of up to $3 trillion over the next 10-20
years 2 Australian financial advisers now have a product that will enable this wealth transfer to be
incorporated within a financial plan for their clients whilst they are still alive and remain in their homes.
This is clearly a major opportunity for the company and we expect the SER product to be a major driver for
our growth going forward. We currently have several IFA dealer groups going through the process of adding
our SER product to their Approved Product Lists which is a good early sign of interest.
Financial Results
For the full year we reported a loss of $5.8 million ($5.7 million loss 2018), which includes funding cost of
approximately $1.8 million and reflects our position as an early stage company. Now that we have resolved the
key hurdles to our business growth, we expect this loss to materially decrease over the next 12 months.
1 Deloitte 2015
2 AFR/Perpetual 2017
4
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DOMACOM LIMITED
ABN 69 604 384 885
CEO’S REPORT
30 JUNE 2019
Our Business
The DomaCom Fund leverages its proprietary cloud-based technology platform to deliver a range of important
differentiating functions for investors in our sub-funds:
(cid:120) Campaign functions enabling investors to pool together to acquire any property asset (“syndication” or
“crowdfunding”).
(cid:120) Liquidity through the ability to buy and sell on the platform.
(cid:120) Greater choice, by being able to search properties through our platform and bid on individual assets
they deem attractive.
(cid:120) An ability to invest alongside family and friends via an enhancement to our platform. This enables a
group of family and friends to select a property of their choosing and co-invest together.
(cid:120) DomaCom has extended its business to allow fractionalisation of other assets such as direct mortgages
and other non-property investments. This has already helped to diversify the income stream of the
business with over 20% of our FUM now being non-property assets.
Outlook & Conclusion
DomaCom is a business that is now in the position to address two key thematic issues in Australia, housing
affordability and funding retirement lifestyle, which represent a very large opportunity for the company and its
shareholders.
As a business operating in a highly regulated and challenging economic environment, it has taken an extended
period of time to reach the position of regulatory and business clarity and we are now positioned well for the
next several years as:
- All our products are now operational – fractional investing & senior equity release
- Our key hurdle has been addressed – we have internal leverage
- Our FUM growth has started to accelerate
I am thankful for the support and patience shown by our investors and look forward to the next 12 months and
being able to report on our progress.
Arthur Naoumidis
Chief Executive Officer
20 August 2019
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DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
Your directors present their report on DomaCom Limited (the “Company”) and its Controlled Entities (the
“Group”) for the year ended 30 June 2019.
1.
Directors
The names of the directors in office throughout the year and to the date of this financial report are Mr David H
Archbold, Mr Graeme A Billings, Mr Peter C Church OAM, Mr Grahame D Evans, Mr Ross A Laidlaw and Mr
Arthur Naoumidis. The name of the company secretary in office throughout the year and to the date of this
financial report is Mr Philip J R Chard. Details of qualifications, experience and special responsibilities of the
Directors are as follows:
Grahame D Evans – Chairman and Independent Non-Executive Chairman
Grahame has been extensively involved with the financial services industry for over 30 years. He has held a
variety of board positions including Chairman of Australian, Canadian, Singaporean & Chinese investment &
advisory businesses and also as a director of Malaysian and New Zealand companies. He is a regular speaker
at conferences both in Australia and overseas and holds an MBA from the prestigious Australian Graduate
School of Management, voted in the top 10 management schools in the Asian region. Grahame's executive
roles have included CEO Investments for Tower Australia, Managing Director, AMP Consulting and Group
Managing Director of Centrepoint Wealth. He is currently an executive director of GPS Wealth. Grahame has
been a director of DomaCom Limited since 23 February 2015.
Arthur Naoumidis – Chief Executive Officer
After 20 years as an IT consultant, Arthur spent 5 years at JB Were and BNP Paribas building and operating
investment administration systems and businesses. Using the combined technology and investment
administration background, Arthur founded the now ASX Listed Praemium (ASX:PPS). Arthur grew Praemium
into a business with 500 client firms (accountants, financial planners, stockbrokers, SMSF administrators and
institutions) in Australia administering over $43 Billion as well as partnering with Blackrock Australia to launch
Australia’s first online separately managed account (SMA) platform. As a result of listing Praemium on the ASX,
Arthur took the Praemium SMA concept to the UK and successfully launched the SMA platform business of
Praemium UK.
Arthur is now taking some of the advanced equity concepts he pioneered in the equity markets during his
Praemium days into a market that has been relatively untouched by technology and business process
improvements – the property market. Arthur has been a director of DomaCom Limited since 23 February 2015.
David H Archbold – Independent Non-Executive Director
David has over 45 years’ experience in the property industry in Australia. Prior to the establishment of
International Property Group Pty Limited in 1991, David was Executive Director - International, for Colliers
Jardine and Executive General Manager of Hooker Corporation. For 17 years prior he was Managing Director of
Baillieu Knight Frank (SA) Pty Ltd, then Managing Director of Baillieu Knight Frank (NSW) and a
Director/Partner of the Australian Company.
David has extensive experience in property consultancy throughout Australia and South East Asia with
Corporate and large family owned businesses. David has been a director of DomaCom Limited since 23
February 2015.
Graeme A Billings – Independent Non-Executive Director
Graeme has been a chartered accountant since 1980. He retired from PricewaterhouseCoopers in 2011 after 34
years where he was a senior partner in the Assurance practice. Graeme is a former head of the Melbourne
Assurance practice as well as leading the Firm's Australian and Global Industrial Products businesses. He has
extensive experience in providing assurance, governance, transaction and consulting services to multi-national
and national companies in the automotive, manufacturing, consumer goods and construction industries.
Graeme was also a regular media commentator on the Industrial Products sector.
Graeme is now an advisor to various companies as well as acting as a non-executive director for a number of
public and private companies in the financial services, manufacturing, retail and construction sectors. His
current public company appointments are Chairman of Korvest Ltd, Chairman of Azure Healthcare Ltd, Non-
executive Director of GUD Holdings Ltd (Audit Committee Chair) and Non-executive Director of Clover
Corporation Ltd (Audit Committee Chair).Graeme has been a director of DomaCom Limited since 23 February
2015.
6
For personal use only DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
Peter C Church OAM – Independent Non-Executive Director
Peter Church OAM FAICD is a lawyer and corporate adviser who has spent much of his career in South East
Asia and India where he advises a wide range of clients. He has written a number of books on the region and is
an Adjunct Professor in the Business School of Curtin University. He was awarded the Medal of the Order of
Australia (OAM) in 1994 by the Australian Government for the promotion of business relations between
Australian and South East Asia. He is also a Fellow of the Australian Institute of Company Directors (FAICD).
His current appointments include Executive Chairman of AFG Venture Group, Special Counsel to the English
law firm, Stephenson Harwood, Non-Executive Director of OM Holdings Limited (ASX) and Elara Capital PLC.
Peter has been a director of DomaCom Limited since 26 August 2015.
Ross A Laidlaw – Executive Director
Ross has spent over 30 years in Financial Services, and has deep and expansive experience within markets in
Australasia, Europe and America. His strength lies in the development of start-up or green field developments
and driving them into fully fledged and profitable businesses. Ross was CEO of the successful Skandia Platform
for over 7 years, developing it into a leading Platform that was well supported by independent financial advisers.
Prior to being transferred to Skandia's European business the business had grown organically to over $5 billion
in assets under management and employed over 200 staff. Ross has held a number of directorships including
the Australian businesses, Skandia's joint venture in Mainland China, Skandia's Fund Management Company in
Ireland and American Skandia's Broker Dealer group.
Ross is a qualified Chartered Accountant, holds a Bachelor of Economics, a Graduate Diploma of Financial
Planning and is a Fellow of the Financial Services Institute of Australasia. His key role at DomaCom is as Chief
Operating Officer. Ross has been a director since 23 February 2015.
Philip JR Chard – Chief Financial Officer, Company Secretary
Philip has over 25 years of experience in the financial services industry. As a senior manager at Deloitte he
provided assurance and advisory services within the funds management and investment banking sectors.
Subsequently he has held a broad range of financial control and reporting positions within the property, funds
management and banking sectors. He has a strong understanding of the requirements of highly regulated
industries and the reporting obligations of listed companies. He has a proven track record of designing and
implementing robust internal control and reporting systems.
2.
Directors meetings
The number of Directors’ meetings and the number of meetings attended by the Directors of the Company
during the year ended 30 June 2019 were:
Board of Directors
Attended
Held
8
9
9
9
9
9
9
9
8
9
9
9
Audit Committee
Held
3
3
3
-
3
-
Attended
3
3
3
-
3
-
Risk Management
Attended
Held
1
1
1
1
-
1
1
1
1
1
1
1
Mr David H Archbold
Mr Graeme A Billings
Mr Peter C Church
Mr Grahame D Evans
Mr Ross A Laidlaw
Mr Arthur Naoumidis
3.
Principal activity
During the year, the principal activities of entities within the Group were the development of a software platform
to be used for the trading of fractional interests in property.
4.
Operating results
The Group has incurred an operating loss of $5,780,755 (2018:$ 5,671,250).
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ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
5.
Distributions paid or declared
No distributions were declared or paid in the current year.
6.
Review of operations and financial results
The Group is a participant in the financial services market in Australia. DomaCom Limited is the holding
company and DomaCom Australia Limited, DomaCom Platform Services Pty Ltd and DomaCom Singapore
Private Limited are 100% owned subsidiaries of the DomaCom Group.
DomaCom Australia Limited is the investment manager of the DomaCom Fund (“the Fund”) (Managed
Investment Scheme). The Fund allows investors to hold fractional interests in underlying assets, that they
themselves have selected or their advisers on their behalf.
New Developments since last year
Senior Equity Release Product launched
(cid:120)
(cid:120) New Lending Facility with Latrobe Financial
(cid:120) Diversified Mortgage Portfolio
(cid:120)
(cid:120)
Special Opportunities in the Renewal Energy space
Increased Diversification of Asset Type leading to Fund Growth
Senior Equity Release Product launched
The Senior Equity Release Product was launched in June 2019 after over 6 years in development and working
closely with the Australian and Securities Investment Commission. This is a first as no other company in
Australia has delivered a regulated Equity Release product to the Seniors market.
This product adds another important piece of the puzzle to the retirement landscape and will allow Financial
Planners increased choice and flexibility when dealing with Retirees and their decision with regards to their
options concerning remaining in the family house, downsizing or moving into aged care accommodation.
The DomaCom product allows Retirees to sell a part of their home to other investors and in return receive a
lump sum payment or a regular income payment or a combination of the two. This will allow Retirees to enjoy
their retirement years. Research indicates that many Retirees wish to remain living in their family homes and in
the communities, they are familiar with. This particular cohort have not had the years of compulsory
superannuation and therefore the family home is often their largest asset. This product requires that the
Retirees seek advice from an Accredited Senior Equity release adviser to ensure they understand the nature of
the product and the fees and costs. DomaCom are currently accrediting a number of Advisers across Australia.
New Lending Facility with Latrobe Financial
It has been challenging finding a lending provider and as reported in the last annual report, DomaCom was
successful in securing a facility through a panel of Non-Bank Lenders last year and it is pleasing to report that
DomaCom has secured an initial $50 million lending facility from Latrobe Financial for residential and
commercial loans at a very favorable rate of 5.99% p.a. This will further boost DomaCom ability to grow Funds
under Management as the majority of Property transactions are undertaken with leverage.
Diversified Mortgage Portfolio
DomaCom was successful in delivering a diversified Mortgage Portfolio for a key client during the year. This
product allows the client via the DomaCom platform to select from a panel of external mortgage originators what
is the most suitable mortgage based on type of security i.e. commercial, residential, or industrial, length of time,
loan to valuation ratio and interest rate. This represents an excellent product for the client in providing a well
diversified defensive portfolio for their clients. This product is already in excess of $10 million and we expect this
to grow strongly during the forthcoming year. DomaCom are looking to replicate this product for other clients.
8
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ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
Special Opportunities in the Renewal Space
DomaCom developed another first in the Australian market with a Community engagement Fund in the Renewal
energy space. This allowed investors to have a direct investment into a Renewal energy asset.
In conjunction with CWP Renewables which are involved in the construction of Wind and Solar Farms and
batteries, DomaCom created the Sapphire Wind Farm Community Co-Investment Fund that allowed investors to
invest in one of the largest Wind Farms in NSW. This Wind Farm represented 75 turbines and generated
sufficient energy to power approximately 110,000 homes. Investors received a return of 6% p.a. paid quarterly
for 9 and half years.
CWP Renewables are looking to replicate this approach in many of their other projects and DomaCom have
been contacted by other companies in the Renewable energy space who are looking to replicate a similar
approach.
Increased Diversification of Asset type leading to Fund Growth
The Funds on the platform have grown by approximately 60% during the year from $35 million to $56 million
and this has been largely due to the increased range of asset classes that the platform can now fractionalize.
This includes the ability to fractionalise real property assets, creation of loans that are backed by first registered
mortgage, other debt securities such as unsecured notes and cash. This broadens the appeal of the platform to
clients.
The increase in Funds under Management results in an increase in our asset management fees and it is
pleasing to see an increase of over 94% in our Revenue generated from Management fees comparing the year
ending 2018 to the year ending 2019.
Cost Savings
The Company continues to monitor costs closely. In the prior year there was a 25% reduction in staff to align to
current business requirements. This reduction in staff, combined with the effect of not issuing performance
rights in the current year, contributed to a 38% reduction in employee benefits. Excluding finance costs, the loss
on early settlement of convertible notes and depreciation, non-employee costs reduced by 48%, including an
18% reduction in Director fees.
The Company will continue to control its cost base to ensure resources are allocated effectively whilst still
maintaining the required level of controls and compliance expected of a Group listed on the ASX and holding an
Australian Financial Service License.
7.
Significant Changes in State of Affairs
There were no significant changes in the state of affairs of the Group during the year.
8.
Post Balance Date Events
Subsequent to balance date and prior to the issuing of this report, the following events have occurred:
-
The Group’s Research and Development tax incentive claim has been registered with AusIndustry and
an amount of $394,237 will be claimed.
No other matters or circumstances have arisen since the end of the year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the
Group in future financial years.
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For personal use only DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
9.
Future Developments
The Group is expected to continue to develop its software platform and increase the level of assets under
management in the DomaCom Fund (Managed Investment Scheme) for which the Group will earn management
fees for its role as Investment Manager.
10.
Unissued shares under Performance Rights and Options
Performance Rights were issued under the programs described in Note 13 to the financial statements. No other
options were granted or are outstanding at the date of this report.
Date Granted
Expiry Date
Exercise price
of shares ($)
Number of shares under
Performance Rights
5 April 2018
5 April 2021
$nil
1,200,864
Options were granted to the Australian Special Opportunity Fund, LP, a New York-based institutional investor
managed by The Lind Partners, LLC (together, “Lind”) as set out in Note 12 and Note 24.
Date Granted
Expiry Date
Exercise price
of shares ($)
Number of shares under
Options
24 January 2018
5 April 2018
24 January 2021
15 June 2021
$0.114
$0.065
3,700,000
1,850,000
11.
Shares issued during or since the end of the year as a result of exercise of Performance Rights
During or since the end of the financial year, the Company issued ordinary shares as a result of the exercise of
Performance Rights as follows (there were no amounts unpaid on the shares issued):
Date Granted
14 December 2015
5 April 2018
Issue Price of
Shares ($)
$nil
$nil
Number
issued
of
shares
101,510
3,906,265
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ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
12. Remuneration Report (audited)
The Directors present the Remuneration Report for Non-Executive Directors, Executive Directors and other Key
Management Personnel, prepared in accordance with the Corporations Act 2001 and the Corporations
Regulations 2001.
The Remuneration Report is set out under the following main headings:
a Principles used to determine the nature and amount of remuneration;
b Details of remuneration;
c Service agreements;
d Share-based remuneration; and
e Other information
a) Principles used to determine the nature and amount of remuneration
The principles of the Group’s executive strategy and supporting incentive programs and frameworks are:
-
-
-
to align rewards to business outcomes that deliver value to shareholders
to drive a high performance culture by setting challenging objectives and rewarding high performing
individuals; and
to ensure remuneration is competitive in the relevant employment market place to support the
attraction, motivation and retention of executive talent.
A remuneration framework has been structured that is market competitive and complementary to the reward
strategy of the Group.
The remuneration structure that has been adopted by the Group consists of the following components:
-
-
-
fixed remuneration being annual salary;
short term incentives (STI), being cash-based sales bonuses; and
long term incentives (LTI), being equity-based incentive plans.
Short Term Incentives (STI)
Short term incentives have been established to reward members of the sales department. The non-discretionary
incentives are structured to reward performance against financial targets, including Funds Under Management.
Long Term Incentives (LTI)
The Group has established a long term equity-based incentive plan for Directors and staff in order to:
-
-
assist in the retention and motivation of directors and employees; and
provide an incentive to grow shareholder value by providing an opportunity to receive an ownership
interest in the Company.
The plan provides for the award of both Employee Share Options and Employee Performance Rights to
Directors, executives, employees and consultants.
As the Group listed on the ASX on 7th November 2016 historical performance indicators have only been
included from 2016 onwards.
Earnings/(Loss) Per Share ($)
Net Profit/(loss) ($’000)
Share price ($) *
* Price at 30 June
2019
(0.04)
(5,781)
0.08
2018
(0.05)
(5,671)
0.066
2017
(0.06)
(6,136)
0.11
2016
(0.06)
(6,061)
-
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DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
b) Details of remuneration
Short-term
employee
benefits
Post-
employment
benefits
Long-term
benefits
Year
Cash salary
and fees
Superannu-
ation
Long
service
leave
Share-
based
payments
Perform-
ance
Rights
Total
Perform-
ance
based % of
remune-
ration
Executive Directors
Arthur Naoumidis
Director and CEO
Ross Laidlaw
Director and COO
2019
2018
2019
2018
164,380
191,018
136,983
163,621
15,616
18,147
13,013
15,544
4,582
2,173
2,641
4,708
-
184,578
55,119
266,457
-
152,637
50,249
234,122
0%
21%
0%
21%
Non-executive directors
Grahame Evans
Chairman &
Independent
Director
David Archbold
Independent
Director
Graeme Billings
Independent
Director
Peter Church
Independent
Director
2019
40,909
2018
52,045
2019
2018
2019
2018
2019
2018
27,397
32,774
27,397
32,774
27,397
32,774
-
-
2,603
3,114
2,603
3,114
2,603
3,114
-
-
-
-
-
-
-
-
-
40,909
0%
14,612
66,657
22%
-
30,000
9,741
45,629
-
30,000
9,741
45,629
-
30,000
9,741
45,629
Other Key Management Personnel
Philip Chard
CFO / Company
Secretary
2019 Total
2018 Total
2019
162,000
15,390
3,634
-
181,024
2018
162,000
15,390
2,744
41,707
221,841
586,463
667,006
51,828
58,423
10,857
-
649,148
9,625
190,910
925,964
0%
21%
0%
21%
0%
21%
0%
19%
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DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Employee
Fixed
Remuneration
At risk: Short Term
Incentives
At risk: Performance
Rights
Executive Directors
Arthur Naoumidis
Ross Laidlaw
Non-Executive
Directors
Other Key Management
Personnel
Philip Chard
100%
100%
100%
100%
-
-
-
-
-
-
-
-
Remuneration and other terms of employment for executive directors and senior executives are formalised in
letters of employment that provide for various conditions in line with market practice including:
-
-
-
an annual remuneration package and benefits including superannuation;
the basis of termination or retirement and the benefits and conditions as a consequence; and
agreed provisions in relation to annual leave and long service leave, confidential information and
intellectual property.
The compensation for termination benefits was $nil (2018: $nil).
c) Service agreements
No key management personnel are employed under a service agreement.
d) Share-based remuneration
No Performance Rights were issued during the year ended 30 June 2019.
Performance Rights granted to directors and employees during the year ended 30 June 2018 under the Long
Term Incentive Plan have an exercise price of $nil, were granted at no cost to the recipient and carry no
dividends or voting rights. Vesting gives the holder of a Performance Right the right to convert into ordinary
shares on a one-for-one basis. The performance rights were issued with no vesting conditions. A cost reduction
program implemented during the year ended 30 June 2018 included a reduction in fees paid to non-executive
directors and salary paid to executive directors. The issue of the Performance Rights was made to partially
compensate for these reductions.
The Performance Rights issued during the year ended 30 June 2018 will expire on 5 April 2021 and may be
exercised at any time up to the expiry date.
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DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
e) Other information
The number of Performance Rights in the Company held during the financial year ended 30 June 2019 held by
key management personnel, including their related parties, are set out below:
Balance at
start of year
(i)
Granted as
remuneration
Exercised
Forfeited
Vested and
exercisable at
the end of the
reporting period
Non-Executive
Directors
Grahame Evans
David Archbold
Graeme Billings
Peter Church
Executive Directors
Arthur Naoumidis (i)
Ross Laidlaw
Executives
Philip Chard
157,117
-
-
-
669,148
540,309
448,460
-
-
-
-
-
-
-
(157,117)
-
-
-
(669,148)
(540,309)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
448,460
(i) Includes opening balance of 76,467 Performance Rights granted to Kathryn Naoumidis (related party to
Arthur Naoumidis) as an employee of the Company.
The number of ordinary shares in the Company held during the financial year ended 30 June 2019 held by key
management personnel, including their related parties, are set out below:
Balance at
start of year
Granted as
remuneration
Received on
exercise
Other
changes
Held at end of
reporting period
Executive Directors
Grahame Evans
David Archbold
Graeme Billings
Peter Church
Non-Executive
Directors
Arthur Naoumidis (i)
Ross Laidlaw
Philip Chard
860,286
383,335
508,335
183,335
18,944,557
1,625,000
78,253
-
-
-
-
-
-
-
157,117
-
-
-
669,148
540,309
-
-
-
-
-
-
-
-
1,017,403
383,335
508,335
183,335
19,613,705
2,165,309
78,253
(i) Includes shares issued to Kathryn Naoumidis (related party to Arthur Naoumidis) on exercise of Performance
Rights.
There were no loans to key management personnel during the year.
There were no other transactions with key management personnel during the year.
End of audited Remuneration Report.
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DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
13. Environmental Issues
The Group’s operations are not regulated by any significant environmental regulation under a law of the
Commonwealth and State.
14.
Indemnification and insurance of Officers or Auditor
During or since the end of the financial year, the Group has given indemnity or entered into an agreement to
indemnify, or paid or agreed to pay insurance premiums as follows:
During the year, the Group has paid premiums in respect of an insurance contract to indemnify officers against
liabilities that may arise from their position as officers of the Group. Officers indemnified include all directors and
all executive officers participating in the management of the Group.
Further disclosure required under section 300(9) of the Corporations Act 2001 is prohibited under the terms of
the contract.
15. Proceedings on Behalf of the Group
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all
or any part of their proceedings. The Group was not a party to any such proceedings during the year.
As set out above, DomaCom Australia, a subsidiary of DomaCom Limited, has been supporting an action in the
Federal Court for a determination that DomaCom sub-funds are not inhouse assets or related trusts for the
purposes of the SIS (Superannuation Industry Supervision) Act.
16. Auditor’s Independence Declaration
A copy of the auditor’s independence declaration as required by section 307C of the Corporations Act 2001 is
set out in the following report.
15
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DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
17. Corporate Governance Statement
The Board of DomaCom has adopted the following Corporate Governance policies and practices which are in
accordance with the ASX Corporate Governance Council’s “Corporate Governance Principles and
Recommendations (3rd Edition)” (ASX Guidelines) unless otherwise stated. The ASX Corporate Governance
Council (the “Council”) has issued a 4th Edition of its Corporate Governance Principles and Recommendations
(the “Principles and Recommendations”) that will take effect for an entity’s first full financial year commencing on
or after 1 January 2020.
Role and responsibility of the Board (Principle 1.1)
The Board is responsible for the overall corporate governance of the Company, including establishing and
monitoring key performance goals. The Board monitors the operational and financial position and performance
of the Company and oversees its business strategy, including approving the strategic goals of the Company and
considering and approving an annual business plan (including a budget). The Board is committed to maximising
performance, generating appropriate levels of Shareholder value and financial return and sustaining the growth
and success of the Company. In conducting the Company’s business with these objectives, the Board seeks to
ensure that the Company is properly managed to protect and enhance Shareholder interests, and that the
Company and its Directors, officers and personnel operate in an appropriate environment of corporate
governance. Accordingly, the Board has created a framework for managing the Company, including adopting
relevant internal controls, risk management processes and corporate governance policies and practices which it
believes are appropriate for the Company’s business and which are designed to promote the responsible
management and conduct of the Company.
(cid:120) The Board is responsible for the strategic direction of the company.
(cid:120) The Board reviews and approves the Company's proposed strategy. The objectives of the Company are
clearly documented in a long term corporate strategy and an annual business plan together with
achievable and measurable targets and milestones.
(cid:120) The Board approves budgets and other performance indicators and reviews performance against them
and initiates corrective action when required.
(cid:120) The Board ensures that risks facing the company have been identified, assessed and that the risks are
being properly managed.
(cid:120) The Board ensures that policies on key issues are in place and are appropriate. The Board also reviews
compliance with policies.
(cid:120) The Board adopts the most effective structure that best assists the governance process. The selection of
Directors is based on obtaining the most relevant and required skills, while also recognising the need to
have a diversity of skills and experience on the Board.
(cid:120) The Board approves and fosters an appropriate corporate culture matched to the Company's values and
strategies.
(cid:120) The Board appoints the Managing Director and evaluates his or her ongoing performance against
predetermined criteria. (Principle 1.6)
(cid:120) The Board approves remuneration for the Managing Director and remuneration policy and succession
plans for the Managing Director and senior management. (Principle 1.6)
Board Charter (Principle 1.1)
A Board charter prepared having regard to the ASX Corporate Governance Principles and Recommendations,
has been adopted by the Board and covers the independence of directors, the Board’s responsibility for overall
governance of the Company, the Board members’ roles, powers and responsibilities.
A copy of the Company’s Board Charter is available on the Company’s Website at:
www.domacom.com.au/investor-relations.
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DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
Board Committees (Principle 1.2)
The Board has established 1 standing committee to facilitate and assist the Board in fulfilling its responsibilities.
It may also establish other committees from time to time to assist in the discharge of its responsibilities.
Audit Committee (Principle 4)
The Board has established a Board Audit Committee.
The purpose of the Committee is to assist the Board in the effective discharge of its responsibilities in relation to
the external audit function, accounting policies, financial reporting, funding, financial risk management and
certain compliance matters.
The Committee has authority from the Board to review and investigate any matter within the scope of its Charter
and make recommendations to the Board in relation to the outcomes. The Committee has no delegated
authority from the Board to determine the outcomes of its reviews and investigations and the Board retains its
authority over such matters.
The Committee must have at least three members, a majority of whom must be independent non-executive
directors.
At least one member of the Committee should have significant expertise in financial reporting, accounting or
auditing. The Chairman of the Committee should act independently and must not be the Chairman of the Board.
The current Audit Committee members are:
(cid:120) Graeme Billings
(cid:120) David Archbold
(cid:120) Peter Church
Chairperson and Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
The Board has received declarations from the CEO and CFO that the financial records of the entity have been
properly maintained and that the financial statements comply with the appropriate accounting standards and
give a true and fair view of the financial position and performance of the entity and that the opinion has been
formed on the basis of a sound system of risk management and internal control which is operating effectively.
(Principle 4.2)
A copy of the Company’s Audit Committee Charter is available on the Company’s Website at:
www.domacom.com.au/investor-relations.
Remuneration and Nomination Committee (Principle 1.2/ 2.1/ 8.1-8.3)
The Remuneration and Nomination Committee at present comprises the full Board.
The Board considers that at this stage assuming the duties of a Remuneration and Nomination Committee is
appropriate in light of the Company’s operations and size, and the size of the Board. All of the Directors believe
that they will able to, individually and collectively, analyse the issues before them objectively in the best interests
of all shareholders and in accordance with their duties as Directors.
The Board also addresses board succession issues and ensures that it has the appropriate balance of skills,
knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities
effectively.
The Board Charter outlines duties relating to Remuneration and Nomination, and is made available on the
Company website.
The Company has established a long term incentive plan (LTIP) to assist in the motivation, reward and retention
of executive directors and all other employees. The LTIP is designed to align participants’ interests with the
interests of Shareholders by providing participants an opportunity to receive shares through the granting of
performance rights.
Composition of the Board (Principle 2.3, 2.4 & 2.5)
The Board currently comprises six directors (two of whom are also executives of the Company). The names,
biographical details and length of service of the directors are set out above.
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DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
Terms of appointment (Principle 1.3 & 2.6)
The Board has adopted a letter of appointment that contains the terms on which non-executive directors are to
be appointed, including the basis upon which they will be indemnified by the Company. Non-Executive directors
are entitled to take independent advice at the cost of the Company in relation to their role as members of the
Board. In addition, an induction process for incoming directors is coordinated by the Company Secretary. The
Board receives regular updates at Board meetings, industry workshops, meetings with customers and site visits.
These assist directors to keep up-to-date with relevant market and industry developments.
Areas of Competence and skills of the Board of Directors (Principle 2.2)
Area
Competence
Leadership
Business Leadership, public listed company experience
Total out of 6
directors*
6
Business, Finance and
Governance
International
Market & Sales,
Distribution
Technology
Business strategy, competitive business analysis, corporate
advisory, finance and accounting, governance, audit assurance
and risk management
International business management
Financial service expertise
Product Development, product life cycle management
Real Estate
Domestic and International Property market analysis
6
6
3
1
3
*This column represents the number of directors rated as being ‘competent’ or higher in respect of the relevant
skill.
Company Secretary (Principle 1.4)
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with
the proper functioning of the Board. The Company Secretary is responsible for ensuring that Board procedures
are complied with and that governance matters are addressed. The Company Secretary is also responsible for
communications with the ASX about listing rule matters, including making disclosures to the ASX. All directors
have direct access to the Company Secretary. The appointment and removal of the Company Secretary is a
matter for decision by the Board.
Review of Board performance (Principle 1.6 & 1.7)
The Board at least annually reviews the performance of the Board. The evaluation includes a review of:
the Board’s membership and the charters of the Board and its committees (if any);
-
- Board processes and its committees’ (if any) effectiveness in supporting the Board; and
-
the performance of the Board and its committees (if any).
The performance of the Board was reviewed during the year ended 30 June 2019.
A review of each Director’s performance is undertaken by the Chairman, after consultation with the other
directors, prior to a director standing for re-election.
Policies
The Company has adopted the following policies, each of which has been prepared or revised having regard to
the ASX Corporate Governance Principles and Recommendations and is available on the Company’s website at
www.domacom.com.au/investor-relations.
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DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
Continuous Disclosure Policy (Principle 5.1)
The Board has adopted a Continuous Disclosure Policy to ensure that it complies with its disclosure obligations
under the Corporations Act and the ASX Listing Rules, which applies to all Directors, officers, employees and
consultants of the Company. The Board has also delegated the authority to certain authorised spokespersons
to manage the Company’s compliance with its disclosure obligations and the Continuous Disclosure Policy.
Code of Conduct Policy (Principle 3.1)
This policy sets out the standards of ethical behaviour that the Company expects from its Directors, Officers,
and Employees. The Board has adopted a Code of Conduct of which sets out the way in which the Group seeks
to conduct business, namely in an honest and fair manner, acting only in ways that reflect well on the Group and
to act in compliance with all laws and regulations.
Communication Policy (Principle 6.1-6.4)
This policy sets out practices which the Company will implement to ensure effective communication with its
Shareholders.
The Company has informed shareholders of all major developments affecting the Group’s state of affairs as
follows:
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
placing all relevant announcements made to the market on the Website after they have been released to
ASX;
publishing all corporate governance policies and charters adopted by the Board on the Company Website;
releasing information provided to analysts or media during briefings to ASX and placing such information
on the Website;
encouraging attendance and participation of shareholders at general meetings to receive updates from the
CEO and Chairman on the Group’s performance, ask questions of the Board and the Company’s auditors
regarding the conduct of the audit and preparation and content of the auditor’s report.
providing investor feedback and encouraging they seek further information about the Company via the
Company website;
(cid:132) Management or Directors being available to meet with shareholders from time to time upon request and
respond to any enquiries they may make; and
(cid:132)
Investors being able to communicate with the Company’s registry electronically by emailing the registry or
via the registry’s website.
Diversity Policy (Principle 1.5)
The Diversity Policy sets out the Company’s objectives for achieving diversity amongst its Board, management
and employees and aims:
•
to articulate commitment to diversity within the Company at all levels (including employee level, senior
executive level and Board level);
to establish objectives and procedures which are designed to foster and promote diversity within the
Company; and
ensure a work environment is in place where people are treated fairly and with respect notwithstanding
their gender, ethnicity, disability, age or educational experience.
•
•
The Board has set the following measurable objectives for achieving gender diversity:
(cid:120)
Increase gender diversity on the Board and senior executive positions and throughout the Group. The
Company currently has 11% female representation across the entire group as at 30 June 2019. The
objective will be to lift this percentage across the company with the intention that a 1/3 (33%) of the
employees are female on a full or part time basis by 30 June 2021.
(cid:120) Promote flexible work practices to provide managers and staff with the tools to tailor flexible work
options that suit both the business and the individual’s personal requirements;
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DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
(cid:120) Selection of new staff, the development, promotion and remuneration of staff based solely on their
performance and capability; and
(cid:120) Annually assess gender diversity performance against objectives set by Board.
The Company’s current performance against its diversity policy objectives is as follows:
Gender
Representation
Non-Executive
Directors
Employees
Executive Directors
Managers
Staff
Total Employees
30-Jun-19
30-Jun-18
% Female % Male % Female % Male
0%
100%
0%
100%
0%
0%
20%
11%
100%
100%
80%
89%
0%
0%
20%
11%
100%
100%
80%
89%
Risk Management Policy (Principle 7.1-7.4)
This policy sets out how the Company evaluates the effectiveness of its risk management framework to ensure
that its internal control systems and processes are monitored and updated on an ongoing basis.
The Board is responsible for reviewing the Company’s risk management framework, including adopting relevant
internal controls, risk management processes and corporate governance policies and practices which it believes
are appropriate for the Company’s business and which are designed to promote the responsible management
and conduct of the Company.
The Board at least annually reports on the effectiveness of the Company’s risk management and internal control
policies and practices. The Company does not currently have an internal audit function. The current structure
for reviewing risks, controls and procedures within the Board is considered appropriate at the Company’s
current stage of growth and size.
The Board has reviewed the risk management framework during the financial year ended 30 June 2019.
The Company monitors its exposure to all risks, including economic, environmental and social sustainability
risks. Material business risks are described in the annual report, which also outlines the Company’s activities,
performance during the year, financial position and main business strategies.
Compliance with ASX Corporate Governance Principles and Recommendations
The Board has evaluated the Company’s current corporate governance policies and practices in light of the ASX
Corporate Governance Principles and Recommendations. A brief summary of the approach currently adopted
by the Company is set out below:
The Company complies with all of the ASX Corporate Governance Principles and Recommendations including,
as not specifically addressed above:
- That at each AGM, the external auditor attends and is available to answer questions from security holders
relevant to the audit. (Principle 4.3)
- That shareholders have the option to receive communications from, and send communications to, the entity
and its security registry electronically. (Principle 6.4)
except in relation to the following:
- Recommendation 2.1.(a) – the Board should establish a nomination committee comprising at least 3
members, a majority of independent directors and chaired by an independent director, and should not be
the same person as the CEO of the entity.
20
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DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ REPORT
30 JUNE 2019
-
-
Recommendation 7.1.(a) –the Board should have a committee or committees to oversee risks comprising
at least 3 members, a majority of independent directors and chaired by an independent director, and should
not be the same person as the CEO of the entity.
Recommendation 8.1.(a) – the Board should establish a remuneration committee comprising at least 3
members, a majority of independent directors and chaired by an independent director, and should not be
the same person as the CEO of the entity.
The Board has carefully considered its size and composition, together with the specialist knowledge of its
directors, and formed the view that based on its current composition, it has the necessary skills and motivation
to ensure that the Company performs strongly, and there is sufficient accountability in the structure of the Board,
to ensure the outcomes and objectives sought by the ASX Guidelines are achieved. Having regard for the size
of the DomaCom Group, the Board considered that incorporating the risk management and nomination and
remuneration procedures into the function of the Board has been an appropriate way of addressing the
accountability and efficiencies sought to be achieved by the ASX Guidelines.
Signed in accordance with a resolution of the Board of Directors:
Grahame D Evans
Chairman
20 August 2019
Arthur Naoumidis
Director
21
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727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of DomaCom Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of DomaCom
Limited for the year ended 30 June 2019, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
M A Cunningham
Partner – Audit & Assurance
Melbourne, 20 August 2019
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
2(cid:21)
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Revenue
Income recognised from research and development
incentive
Interest Income
Fair value gains on derivatives
Expenses
Employee benefits expenses
Fund administration
Rent
Depreciation
Insurance
Advertising
Travel expenses
IT expenditure
Telephone expenditure
Professional fees
Finance costs
Loss on early settlement of convertible notes
Director Fees
Other expenses
Total Expenses
Note
4
13
30 June
2019
$
277,424
74,364
6,168
-
357,956
(1,649,180)
(170,589)
(182,026)
(754,497)
(206,454)
(305,126)
(84,305)
(56,304)
(51,178)
(490,452)
(1,127,713)
(676,291)
(123,101)
(261,495)
(6,138,711)
30 June
2018
$
142,981
290,309
15,362
324,501
773,153
(2,681,382)
(216,615)
(175,501)
(665,649)
(214,878)
(561,872)
(102,426)
(48,576)
(50,644)
(913,514)
(328,351)
-
(150,367)
(334,628)
(6,444,403)
Loss before income tax
(5,780,755)
(5,671,250)
Income tax expense
Loss for the period
5
-
-
(5,780,755)
(5,671,250)
Other comprehensive income
Items that may be reclassified subsequently to profit and
loss
Exchange differences on translating foreign operations
Other comprehensive income for the period
(2,568)
(2,568)
(856)
(856)
Total comprehensive loss for the period
(5,783,323)
(5,672,106)
Earnings per share
Basic Loss per share
Diluted Loss per share
17
17
(0.04)
(0.05)
(0.04)
(0.05)
This statement should be read in conjunction with the notes to the financial statements.
23
For personal use only DOMACOM LIMITED
ABN 69 604 384 885
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Receivables
Prepayments and other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Payables
Provisions
Other financial liabilities
Borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
Borrowings
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Reserves
Accumulated Losses
TOTAL EQUITY
Note
30 June
2019
$
30 June
2018
$
6
7
8
9
10
11
12
14
11
14
15
16
769,210
471,476
140,845
1,381,531
803,421
654,509
103,374
1,561,304
2,178
2,041,736
2,043,914
11,506
2,370,513
2,382,019
3,425,445
3,943,323
385,988
294,643
-
200,000
880,631
414,569
232,339
255,476
822,412
1,724,796
96,379
2,981,232
3,077,611
62,247
732,371
794,618
3,958,242
2,519,414
(532,797)
1,423,909
28,070,423
1,481,916
(30,085,136)
(532,797)
24,382,924
1,363,076
(24,322,091)
1,423,909
This statement should be read in conjunction with the notes to the financial statements.
24
For personal use only DOMACOM LIMITED
ABN 69 604 384 885
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
2019
Issued
Capital
$
Reserves
Accumulated
Losses
$
$
Opening balance at 1 July 2018
24,382,924
1,363,076
(24,322,091)
Issue of share capital
Exercise of performance rights issued in
prior periods
Expiry of performance rights issued in
prior periods
Issue of convertible notes
3,273,461
-
414,038
(414,038)
-
-
(17,710)
553,156
-
-
17,710
-
28,070,423
1,484,484
(24,304,381)
Total
$
1,423,909
3,273,461
-
-
553,156
5,250,526
Transactions with owners recorded
directly in equity:
Loss for the period to 30 June 2019
Other comprehensive income
-
-
Balance at 30 June 2019
28,070,423
1,481,916
(30,085,136)
-
(5,780,755)
(5,780,755)
(2,568)
-
(2,568)
(532,797)
2018
Issued
Capital
$
Reserves
Accumulated
Losses
$
$
Total
$
Opening balance at 1 July 2017
23,754,418
776,794
(18,650,841)
5,880,371
Issue of share capital
Issue of convertible notes
Issue of options
Share based payments
Transactions with owners recorded
directly in equity
628,506
-
-
-
76,971
482,295
27,872
-
-
-
628,506
76,971
482,295
27,872
24,382,924
1,363,932
(18,650,841)
7,096,015
Loss for the period to 30 June 2018
Other comprehensive income
-
-
-
(856)
(5,671,250)
(5,671,250)
(856)
Balance at 30 June 2018
24,382,924
1,363,076
(24,322,091)
1,423,909
This statement should be read in conjunction with the notes to the financial statements.
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DOMACOM LIMITED
ABN 69 604 384 885
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Research and development tax offset received
Finance costs
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of other assets
Payments for plant and equipment
Payments for intangible assets
Payment for investment
Interest Received
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue
Proceeds from convertible notes
Repayment of convertible notes
Proceeds from short term loans
Repayment of short term loans
Net cash provided by financing activities
18
30 June
2019
$
277,424
(3,482,046)
558,324
(584,077)
(3,230,375)
-
(926)
(735,338)
(44,264)
6,168
(774,360)
3,110,758
2,750,850
(1,561,171)
650,000
(980,000)
3,970,437
30 June
2018
$
161,476
(4,976,674)
952,925
(28,078)
(3,890,351)
12,040
(1,090)
(616,126)
-
15,362
(589,814)
150,000
2,003,961
(105,000)
530,000
-
2,578,961
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of
period
Net foreign exchange difference
Cash and cash equivalents at the end of period
(34,298)
(1,901,204)
803,421
87
769,210
2,705,481
(856)
803,421
6
This statement should be read in conjunction with the notes to the financial statements.
26
For personal use only DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: GENERAL INFORMATION AND STATEMENT OF COMPLIANCE
The financial report includes the financial statements and notes of DomaCom Limited (the “Company”) and its
Controlled Entities (the “Group”).
The consolidated general purpose financial statements of the Group have been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. Compliance with Australian Accounting Standards
results in full compliance with the International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB). DomaCom Limited is a for-profit entity for the purpose of preparing the
financial statements.
The financial statements for the year ended 30 June 2019 were approved and authorised for issue by the Board of
Directors on 20 August 2019.
NOTE 2: NEW ACCOUNTING STANDARDS ISSUED
New Standards adopted at 1 July 2018
The following standards and interpretations have been recently issued and have been early adopted by the Group
for the year ended 30 June 2019.
AASB 9 Financial Instruments
AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities and
includes a forward-looking ‘expected loss’ impairment model and a substantially-changed approach to hedge
accounting. These requirements improve and simplify the approach for classification and measurement of financial
assets compared with the requirements of AASB 139. The main changes are:
a) Financial assets that are debt instruments will be classified based on: (i) the objective of the entity’s business
model for managing the financial assets; and (ii) the characteristics of the contractual cash flows.
b) Allows an irrevocable election on initial recognition to present gains and losses on investments in equity
instruments that are not held for trading in other comprehensive income (instead of in profit or loss). Dividends in
respect of these investments that are a return on investment can be recognised in profit or loss and there is no
impairment or recycling on disposal of the instrument.
c) Introduces a ‘fair value through other comprehensive income’ measurement category for particular simple debt
instruments.
d) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing
so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring
assets or liabilities, or recognising the gains and losses on them, on different bases.
e) Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as
follows:
•
•
the change attributable to changes in credit risk are presented in Other Comprehensive Income (OCI)
the remaining change is presented in profit or loss If this approach creates or enlarges an accounting
mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss.
27
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DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2: ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE AND NOT BEEN ADOPTED EARLY
BY THE GROUP (CONTINUED)
Otherwise, the following requirements have generally been carried forward unchanged from AASB 139 into
AASB 9:
• classification and measurement of financial liabilities; and
• derecognition requirements for financial assets and liabilities.
AASB 9 requirements regarding hedge accounting represent a substantial overhaul of hedge accounting that
enable entities to better reflect their risk management activities in the financial statements. Furthermore, AASB 9
introduces a new impairment model based on expected credit losses. This model makes use of more forward-
looking information and applies to all financial instruments that are subject to impairment accounting.
There has been no material impact on the transactions and balances recognised in the financial statements.
AASB 15 Revenue from Contracts with Customers
AASB 15 replaces AASB 118 Revenue, AASB 111 Construction Contracts and some revenue-related
Interpretations: AASB 15
-
-
-
-
establishes a new revenue recognition model
changes the basis for deciding whether revenue is to be recognised over time or at a point in time
provides new and more detailed guidance on specific topics (e.g. multiple element arrangements, variable
pricing, rights of return, warranties and licensing)
expands and improves disclosures about revenue
There is been no material impact on the transactions and balances recognised in the financial statements.
New Accounting Standards that are not yet effective and have not been adopted by the Group
AASB 16 Leases
AASB 16 replaces AASB 117 Leases and some lease-related Interpretations. AASB 16
•
•
•
•
requires all leases to be accounted for ‘on-balance sheet’ by lessees, other than short-term and low value
asset leases
provides new guidance on the application of the definition of lease and on sale and lease back accounting
largely retains the existing lessor accounting requirements in AASB 117
requires new and different disclosures about leases
Based on a detailed assessment, it is expected that the first-time adoption of AASB 16 for the year ending 30 June
2020 will have a material impact on the transactions and balances recognised in the financial statements for leases
greater than 12 months, in particular:
•
•
•
•
(cid:3)lease assets and financial liabilities on the balance sheet will increase respectively (based on the facts at
the date of the assessment)
there will be a reduction in the reported equity as the carrying amount of lease assets will reduce more
quickly than the carrying amount of lease liabilities
the implicit interest in lease payments for former off balance sheet leases will be presented as part of
finance costs rather than being included in operating expenses
operating cash outflows will be lower and financing cash flows will be higher in the statement of cash flows
as principal repayments on all lease liabilities will now be included in financing activities rather than
operating activities. Interest can also be included within financing activities.
28
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3: SUMMARY OF ACCOUNTING POLICIES
(a) Overall considerations
The significant accounting policies that have been used in the preparation of these financial statements are
summarised below.
The financial statements have been prepared using the measurement bases specified by Australian Accounting
Standards for each type of asset, liability, income and expense. The measurement bases are more fully described
in the accounting policies below.
Segmental Reporting
Financial information reported internally used for the allocation of resources and assessing performance is
currently presented without reference to segments. Therefore profit and loss, revenues and expenses and assets
and liabilities have been presented without segmentation.
(b) Basis of consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June
2019. The Parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with
the subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries
have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised
gains and losses on transactions between Group Companies. Where unrealised losses on intra-group asset sales
are reversed on consolidation, the underlying asset is also tested for impairment from a Group perspective.
Amounts reported in the financial statements of Subsidiaries have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the period are
recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net
assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries
between the owners of the Parent and the non-controlling interests based on their respective ownership interests.
(c) Business Combination
The Group applies the acquisition method in accounting for business combinations. The consideration transferred
by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets
transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any
asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of
whether they have been previously recognised in the acquiree’s financial statements prior to the acquisition.
Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the
sum of: (a) fair value of consideration transferred; (b) the recognised amount of any non-controlling interest in the
acquiree; and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date
fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above,
the excess amount (ie gain on a bargain purchase) is recognised in profit or loss immediately.
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DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3: SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
(d) Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in Australian Dollars ($AUD), which is also the functional
currency of the Parent Company.
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the respective Group entity, using the
exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and
losses resulting from the settlement of such transactions and from the re-measurement of monetary items at year
end exchange rates are recognised in profit or loss.
Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the
exchange rates at the date of the transaction), except for non-monetary items measured at fair value which are
translated using the exchange rates at the date when fair value was determined.
Foreign operations
In the Group’s financial statements, all assets, liabilities and transactions of Group entities with a functional
currency other than the $AUD are translated into $AUD upon consolidation. The functional currency of the Entities
in the Group has remained unchanged during the reporting period.
On consolidation, assets and liabilities have been translated into $AUD at the closing rate at the reporting date.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and
liabilities of the foreign entity and translated into $AUD at the closing rate. Income and expenses have been
translated into $AUD at the average rate over the reporting period. Exchange differences are charged / credited to
other comprehensive income and recognised in the currency translation reserve in equity. On disposal of a foreign
operation the cumulative translation differences recognised in equity are reclassified to profit or loss and
recognised as part of the gain or loss on disposal.
(e) Revenue
To determine whether to recognise revenue, the Group follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied.
Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance
obligations by transferring the promised services to its customers.
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance
obligations and reports these amounts as other liabilities in the statement of financial position. Similarly, if the
Group satisfies a performance obligation before it receives the consideration, the Group recognises either a
contract asset or a receivable in its statement of financial position, depending on whether something other than the
passage of time is required before the consideration is due. Interest income is reported on an accruals basis.
Revenue arises mainly from the investment management services provided to the DomaCom Fund. This is
recognized at a point in time when the performance obligation is satisfied.
The DomaCom Group may be entitled to claim a refundable tax credit for eligible research and development
expenditure (eg the Research and Development Tax Incentive regime in Australia or other investment allowances).
The DomaCom Group accounts for a claim as an offset against eligible capitalised R&D expenditure. To the extent
the claim relates to costs that were expensed as they did not meet the capitalisation criteria under AASB 138
Intangible Assets, this amount is recognised as Income recognised from research and development incentive at a
point in time.
30
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DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3: SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
(f) Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.
(g) Intangible assets
Recognition of other intangible assets
Acquired intangible assets
Acquired computer software is capitalised on the basis of the costs incurred to acquire and install the specific
software.
Internally developed intangibles
Expenditure on the research phase of projects to develop the software platform is recognised as an expense as
incurred.
Costs that are directly attributable to a project’s development phase are recognised as intangible assets, provided
they meet the following recognition requirements:
(cid:120) the development costs can be measured reliably
(cid:120)
(cid:120)
(cid:120)
(cid:120)
the project is technically and commercially feasible
the Group intends to and has sufficient resources to complete the project
the Group has the ability to use or sell the asset
the software will generate probable future economic benefits
Development costs not meeting these criteria for capitalisation are expensed as incurred.
Subsequent measurement
All intangible assets, including the internally developed software platform, are accounted for using the cost model
whereby capitalised costs are amortised on a systematic basis over their estimated useful lives, as these assets
are considered finite. Residual values and useful lives are reviewed at each reporting date. In addition, they are
subject to impairment testing. Any capitalised internally developed asset that is not yet complete is not amortised
but is subject to impairment testing. The following useful lives are applied:
- Software: 5 years
- Software platform costs: 5 years (see Note 3s)
The DomaCom Group may be entitled to claim a refundable tax credit for eligible research and development
expenditure (eg the Research and Development Tax Incentive regime in Australia or other investment allowances).
The DomaCom Group accounts for a claim as an offset against eligible capitalised R&D expenditure to the extent
the claim relates to capitalised expenditure.
Subsequent expenditures on the maintenance of computer software and the software platform will be expensed as
incurred.
When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference between the
proceeds and the carrying amount of the asset, and is recognised in profit or loss within other income or other
expenses.
31
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DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3: SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
(h) Property, plant and equipment
Plant and equipment is initially recognised at acquisition cost, including any costs directly attributable to bringing
the assets to the location and condition necessary for it to be capable of operating in the manner intended by the
Group’s management.
Plant and equipment is subsequently measured using the cost model, cost less subsequent depreciation and
impairment losses.
Depreciation is recognised on a straight-line basis to write down the cost less estimated residual value of plant and
equipment. The following useful lives are applied:
- Furniture & fittings: 5 years
- Plant & office equipment: 5 years
- Computer equipment: 3 years
Material residual value estimates and estimates of useful life are updated as required, but at least annually.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between
the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss within other
income or other expenses.
(i)
Leased assets
Operating leases
Where the Group is a lessee, payments on operating lease agreements are recognised as an expense on a
straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as
incurred.
(j)
Impairment testing of intangible assets and property, plant and equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment
and some are tested at cash-generating unit level.
Individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit's carrying amount
exceeds its recoverable amount, which is the higher of fair value less costs to sell and value-in-use. To determine
the value-in-use, management estimates expected future cash flows from each cash-generating unit and
determines a suitable interest rate in order to calculate the present value of those cash flows. The data used for
impairment testing procedures are directly linked to the Group's latest approved budget, adjusted as necessary to
exclude the effects of future reorganisations and asset enhancements. Discount factors are determined
individually for each cash-generating unit and reflect management’s assessment of respective risk profiles, such as
market and asset-specific risks factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-
generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit.
With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss
previously recognised may no longer exist.
An impairment charge is reversed if the cash-generating unit’s recoverable amount exceeds its carrying amount.
32
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DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3: SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
(k) Financial instruments
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 all substantial risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Trade and other receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. After initial recognition, these are measured at amortised cost using the effective interest
method, less provision for impairment. 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.
Individually significant receivables are considered for impairment when they are past due or when other objective
evidence is received that a specific counterparty will default. Receivables that are not considered to be individually
impaired are reviewed for impairment in Companies, which are determined by reference to the industry and region
of a counterparty and other shared credit risk characteristics. The impairment estimate is then based on the
expected credit loss.
Classification and subsequent measurement of financial liabilities
The Group’s financial liabilities include trade and other payables, and related party loans
Financial Liabilities
Financial liabilities are measured subsequently at amortised cost using the effective interest method.
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.
Compound Instruments
The component parts of compound instruments (convertible notes) issued by the Company are classified
separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and
the definitions of a financial liability and an equity instrument. Conversion options that will be settled by the
exchange of a fixed amount of cash or another financial asset for a fixed number of the Company’s own equity
instruments is an equity instrument.
At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for
similar non-convertible instruments. This amount is recognised as a liability on an amortised cost basis using the
effective interest method until extinguished upon conversion or at the instrument’s maturity date.
The conversion option classified as equity is determined by deducting the amount of the liability component from
the fair value of the compound instrument as a whole. This is recognised and included in equity, net of income tax
effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in
equity until the conversion option is exercised, in which case, the balance recognised in equity will be transferred to
issued capital. Where the conversion option remains unexercised at the maturity date of the convertible note, the
balance recognised in equity will be transferred to retained profits/ accumulated losses. No gain or loss is
recognised in profit or loss upon conversion or expiration of the conversion option.
33
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DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3: SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
(k) Financial Instruments (continued)
Transaction costs that relate to the issue of the convertible notes are allocated to the liability and equity
components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity
component are recognised directly in equity. Transaction costs relating to the liability component are included in
the carrying amount of the liability component and are amortised over the lives of the convertible notes using the
effective interest method.
(l)
Income taxes
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other
comprehensive income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian Taxation
Office (ATO) and other fiscal authorities relating to the current or prior reporting periods, that are unpaid at the
reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements.
Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by
the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between the carrying
amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial
recognition of goodwill, or on the initial recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with
investments in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be
controlled by the Group and it is probable that reversal will not occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or substantively enacted by the end of the reporting
period.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future
taxable income, based on the Group’s forecast of future operating results which is adjusted for significant non-
taxable income and expenses and specific limits to the use of any unused tax loss or credit. Deferred tax liabilities
are always provided for in full.
Deferred tax assets and liabilities are offset only when the Group has a right and intention to set off current tax
assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or
loss, except where they relate to items that are recognised in other comprehensive income (such as the revaluation
of land) or directly in equity, in which case the related deferred tax is also recognised in other comprehensive
income or equity, respectively.
(m) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly
liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant
risk of changes in value.
34
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3: SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
(n) Equity, reserves and dividend payments
Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the
issuing of shares are deducted from share capital, net of any related income tax benefits.
Retained earnings includes all current and prior period retained profits.
Dividend distributions payable to equity shareholders are included in other liabilities when the dividends have been
approved in a general meeting prior to the reporting date.
All transactions with owners of the parent are recorded separately within equity.
(o) Employee benefits
Short-term employee benefits
Short-term employee benefits, including annual leave entitlement, are current liabilities included in employee
benefits, measured at the undiscounted amount that the Group expects to pay as a result of the unused
entitlement.
Share-based payments
Share-based compensation benefits are provided to employees via the Group or Shareholders for no cash
consideration.
The fair value of shares granted is recognised as an employee benefit expense with a corresponding increase in
equity. The fair value is measured at grant date and recognised over the period during which the employees
become unconditionally entitled to the shares.
(p) Provisions, contingent liabilities and contingent assets
Provisions for legal disputes, onerous contracts or other claims are recognised when the Group has a present legal
or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will be
required from the Group and amounts can be estimated reliably. Timing or amount of the outflow may still be
uncertain.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most
reliable evidence available at the reporting date, including the risks and uncertainties associated with the present
obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their
present values, where the time value of money is material.
Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation
is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.
In those cases where the possible outflow of economic resources as a result of present obligations is considered
improbable or remote, no liability is recognised.
35
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DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3: SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
(q) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST components of
investing and financing activities, which are disclosed as operating cash flows.
(r) Going Concern
As a developing business the Group has experienced a loss of $5,780,755 and negative operating cash flows as
set out in the Consolidated Statement of Cash Flows. The Group has net working capital of $500,900 and a net
liability position of $532,797.
The continuing viability of the Group and its ability to continue as a going concern is dependent upon the Group
being successful in continuing to grow Funds under Management (“FUM”) within the DomaCom Fund and the
ability to raise capital. A detailed sales pipeline and forecast is continuously updated and reported to the Board on
a regular basis. The strategy for continued growth includes further expanding the direct to consumer distribution
channel that will work alongside DomaCom’s established financial adviser network. DomaCom has now developed
the ability to introduce leverage into investments which will be a significant driver in FUM growth. In addition
DomaCom is focused on providing investment opportunities within the themes of regional investment, affordable
housing and renewable energy. These opportunities are constantly monitored within the sales pipeline review
process.
Cash flow forecasts are presented and discussed at each Board Meeting. These include the forecast receipt of
R&D tax claims ($394,237 expected to be received for the year ended 30 June 2019, resulting in a net inflow of
$194,237 after repayment of the factored loan). In addition to the forecast growth in management fees from
increased FUM and the R&D tax claim, DomaCom intends to raise additional capital as required.
If these matters are not achieved, there may be significant uncertainty as to whether the Group will continue as a
going concern and, therefore, whether it will realise its assets and settle its liabilities in the normal course of
business and at the amounts stated in the financial report. The Directors believe that the Group will be able to
access sufficient sources of funds and implement cost control measures if required and are satisfied that the Group
will continue as a going concern. The Group has shown the ability to raise capital during the current year.
Accordingly, the financial report has been prepared on a going concern basis. No adjustments have been made to
the financial report relating to the recoverability and classification of the asset carrying amounts or the amount and
classification of liabilities that might be necessary should the Group not continue as a going concern.
(s) Significant management judgement in applying accounting policies and estimation uncertainty
When preparing the financial statements, management undertakes a number of judgements, estimates and
assumptions about the recognition and measurement of assets, liabilities, income and expenses.
Significant management judgements
The following are significant management judgements in applying the accounting policies of the Group that have
the most significant effect on the financial statements.
36
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3: SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
(s) Significant management judgement in applying accounting policies and estimation uncertainty
(continued)
Capitalisation of internally developed software platform
Distinguishing the research and development phases of the internally developed software platform and determining
whether the recognition requirements for the capitalisation of development costs are met requires judgement. After
capitalisation, management monitors whether the recognition requirements continue to be met and whether there
are any indicators that capitalised costs may be impaired.
Useful economic life of internally developed software platform
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the
expected utility of the assets. Uncertainties in these estimates relate to technical obsolescence that may change
the utility of software. During the year management determined that the useful life of the internally developed
software remains unchanged from the prior year.
Fair value of derivatives and other financial instruments
As described in Note 3(k) and Note 24, management uses its judgement in selecting the appropriate valuation
technique for financial instruments that are not quoted in an active market. Valuation techniques commonly used by
market participants are applied. For derivative financial instruments, assumptions are based on quoted market
rates adjusted for specific features of the instrument.
As disclosed in Note 14, as at 30 June 2019 the carrying value of convertible notes were:
3 Year Convertible Note: $583,811 (2018: $548,540)
2 Year Convertible Note: $2,397,421 (2018: $nil)
First Convertible Security
Convertible Security: $nil (2018: $283,746)
Embedded derivative liability with the following features: DomaCom option to repay security in shares, Lind option
to have securities repaid in shares & DomaCom’s option to have securities repaid early $nil (2018: $85,686).
Second Convertible Security
Convertible Security – $nil (2018: $192,497)
Embedded derivative liability with the following features: DomaCom option to repay security in shares, Lind option
to have securities repaid in shares & DomaCom’s option to have securities repaid early $nil (2018: $169,790).
The accounting for and valuation of the convertible securities is complex due to significant judgement involved in:
- Determining the appropriate accounting treatment; and
-
Inputs into the fair value calculators of the embedded derivatives, including the volatility of the underlying
share price.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the
Group’s future taxable income against which the deferred tax assets can be utilised. In addition, significant
judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax
jurisdictions. No deferred tax assets were recognized due to uncertainty of recoverability.
37
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 4: REVENUE & OTHER INCOME
Management Fees
Income recognised from research and development
incentive
Interest Income
Fair value gains and losses on derivatives
2019
$
2018
$
277,424
142,981
74,364
6,168
-
357,956
290,309
15,362
324,501
773,153
Fees earned for investment management services provided to the DomaCom Fund are calculated based on fixed
percentages applied to the Funds Under Management.
The DomaCom Group claims refundable tax credits for eligible research and development expenditure. The
DomaCom Group accounts for a claim partially as an offset against eligible capitalised R&D expenditure. Income
recognised from research and development incentive represents the amount of the claim that does not meet the
criteria for offset to the extent that it has been received for expenses that did not meet the capitalisation criteria
under AASB 138 Intangible Assets.
NOTE 5: INCOME TAX EXPENSE
Note
2019
$
2018
$
Prima facie tax on loss before income tax
Prima facie tax on loss before income tax at
27.5% (2018: 27.5%)
(5,780,755)
(5,671,250)
1,589,708
1,559,594
Tax effect of amounts which are not deductible
(taxable) in calculating taxable income:
Non-deductible research and development
expenses
Non-assessable research & development
income
Other non-deductible expenses
Research and development tax grant received
Effect of different tax rate of subsidiaries
operating in other jurisdiction (17%)
Unused tax losses not recognised as DTAs
Tax offsets not recognised for deferred tax
Income tax expense
Components of tax expense
Temporary differences
202,218
169,433
20,450
3,548
(249,230)
79,835
(142,613)
(352,963)
173
(4,050)
(1,631,482)
(1,161,857)
64,615
(147,379)
-
-
-
-
-
-
38
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 5: INCOME TAX EXPENSE (CONTINUED)
Deferred taxes arising from temporary differences and unused tax losses calculated at a tax rate of 27.5% (2018:
27.5%) disclosed in the table below have not been recognised due to uncertainty over future taxable profits in the
consolidated tax group.
Note
2019
$
2018
$
Deferred tax assets not recognised at the
reporting date:
Unused tax losses at 27.5% (2018: 27.5%)
Equity raising and company restructure costs
Accruals & Provisions
Tax Losses and deductible temporary
differences for which no deferred tax asset
has been recognised
Unused tax losses
Equity raising and company restructure costs
Accruals & Provisions
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank
Cash on deposit
6,705,645
5,009,848
152,682
132,527
248,886
101,416
6,990,854
5,360,150
24,511,771
19,900,767
555,207
481,915
905,040
368,784
25,548,894
21,174,591
2019
$
728,559
40,651
769,210
2018
$
199,767
603,654
803,421
Cash and cash equivalents carries a weighted average effective interest rate of 1.24% (2018: 1.5%).
NOTE 7: RECEIVABLES
CURRENT
Amount receivable from R&D taxation rebate
Amount receivable from related party
Other debtors
394,237
6,221
71,018
471,476
558,324
14,798
81,387
654,509
Receivables are non-interest bearing. There are no receivables where the fair value would be materially different
from the current carrying value.
The amount receivable from R&D taxation rebate has been pledged as part security for Short Term Loans (see
Note 14).
The Group reviews all receivables for impairment. Any receivables which are doubtful are provided for based on
the expected credit loss. There are no receivables past due at the reporting date. No receivables have been
provided for at the reporting date.
39
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 8: PLANT AND EQUIPMENT
Furniture
& fittings
$
-
-
-
-
Plant and
office
equipment
$
Computer
Equipment
$
Total
$
151
-
(121)
30
11,355
926
(10,133)
2,148
11,506
926
(10,254)
2,178
9,677
(9,677)
-
3,633
(3,603)
30
68,990
(66,842)
2,148
82,300
(80,122)
2,178
387
-
(387)
-
440
-
(289)
151
31,551
1,090
(21,286)
11,355
32,378
1,090
(21,962)
11,506
9,677
(9,677)
-
3,633
(3,482)
151
68,064
(56,709)
11,355
81,374
(69,868)
11,506
Year ended 30 June 2019
Opening net book amount
Additions
Depreciation charge
Closing net book value
At 30 June 2019
Cost
Accumulated depreciation
Net book value
Year ended 30 June 2018
Opening net book amount
Additions
Depreciation charge
Closing net book value
At 30 June 2018
Cost
Accumulated depreciation
Net book value
40
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 9: INTANGIBLE ASSETS
Year ended 30 June 2019
Opening net book amount at 1 July 2018
Amounts capitalised and additions
Amortisation
Closing net book value at 30 June 2019
At 30 June 2019
Cost
Accumulated depreciation
Net book value
Year ended 30 June 2018
Opening net book amount at 1 July 2017
Amounts capitalised and additions
Amortisation
Closing net book value at 30 June 2018
At 30 June 2018
Cost
Accumulated depreciation
Net book value
Software
platform
Computer
software
$
$
Total
$
2,334,704
415,466
(733,184)
2,016,986
35,809
-
(11,059)
24,750
2,370,513
415,466
(744,243)
2,041,736
4,247,406
(2,230,420)
2,016,986
130,057
(105,307)
24,750
4,377,463
(2,335,727)
2,041,736
2,604,015
348,111
(617,422)
2,334,704
62,074
-
(26,265)
35,809
2,666,089
348,111
(643,687)
2,370,513
3,831,940
(1,497,236)
2,334,704
130,057
(94,248)
35,809
3,961,997
(1,591,484)
2,370,513
Amortisation methods and useful lives
The Group amortises intangible assets with a limited useful life using the straight-line method over the following
periods:
(cid:120) Software platform costs (all internally generated): 5 years
(cid:120) Computer software 5 years
See Note 3 (s) for management’s judgement applied in determining the useful life of intangible assets.
NOTE 10: PAYABLES
CURRENT
Trade creditors
Sundry creditors and other accruals
2019
$
2018
$
295,096
90,892
385,988
340,371
74,198
414,569
Payables are non-interest bearing.
There are no payables where the fair value would be materially different from the current carrying value.
41
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 11: PROVISIONS
CURRENT:
Employee entitlements
Other
NON-CURRENT
Employee entitlements
NOTE 12: OTHER FINANCIAL LIABILITIES
Derivative liability - First Convertible Security
Derivative liability - Second Convertible Security
2019
$
2018
$
144,643
150,000
294,643
132,339
100,000
232,339
96,379
62,247
-
-
-
85,686
169,790
255,476
The repayment of the Convertible Securities issued to The Australian Special Opportunity Fund as set out in Note
14 included the derecognition of First Convertible Security and Second Convertible Security embedded
derivatives.
NOTE 13: EMPLOYEE REMUNERATION
Wages, salaries
Pensions - defined contribution plans
Share based payments
Other employment benefits
1,403,855
119,785
-
125,540
1,649,180
1,887,535
180,758
512,083
101,006
2,681,382
The Director Long Term Incentive Plan and Employee Long Term Incentive Plan (LTIP) was established as a
retention strategy and an incentive for staff and directors to continue to work hard for the DomaCom Group.
Through obtaining equity, staff are motivated to strive to make the DomaCom Group successful as they will
ultimately share in the success.
All Directors and eligible employees were granted performance rights in the prior year. No performance rights
were issued during the year ended 30 June 2019.
Vesting gives the holder of a Performance Right the right to convert some or all of their Performance Rights into
ordinary shares. Each Performance Right entitles its owner to one ordinary share in the Company on conversion.
The performance rights expire on 5th April 2021 and may be exercised at any time up to that date.
The performance rights under the employee and non-executive director and executive director programs have an
exercise price of $nil.
42
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 13: EMPLOYEE REMUNERATION (CONTINUED)
Performance rights were granted as follows for the reporting periods presented:
Employee &
director program
(issued 2018)
Employee & non-
executive director
program
(issued 2015)
Executive
director program
(issued 2015)
Number of rights
Number of rights
Number of rights
-
-
5,603,389
(496,260)
5,107,129
-
(3,906,265)
1,200,864
1,106,628
-
-
(969,699)
136,929
(35,419)
(101,510)
-
213,929
(213,929)
-
-
-
-
-
-
Outstanding at 30 June 2017
Expired
Granted
Exercised
Outstanding at 30 June 2018
Expired
Exercised
Outstanding at 30 June 2019
The fair value of performance rights granted under the employee and non-executive director program on 14th
December 2015 and granted under the employee and director program on 5th April 2018 was based on the
estimated share price at grant date. The following principal assumptions were used in the valuations:
Grant date
Vesting period ends
Share price at grant date
Volatility
Performance right life
Dividend yield
Risk free investment rate
Fair value at grant date
Exercise price at grant date
Exercisable from
Exercisable to
Employee &
director program
(issued 2018)
Employee & non-
executive
director program
(issued 2015)
5 April 2018
5 April 2018
$0.093
-
14 Dec 2015
30-Nov-18
$0.50
-
Up to 3 years
Up to 3 years
-
-
$0.093
$0.00
5 April 2018
5 April 2021
-
-
$0.50
$0.00
Variable
30 Nov 2018
In total, $nil (2018: $512,083) of employee remuneration expense (all of which related to equity-settled share-
based payment transactions) has been included in profit or loss and credited to equity compensation reserve.
43
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 14: BORROWINGS
CURRENT
Short term loans
Convertible Security (January 2018)
Convertible Security (June 2018)
NON-CURRENT
3 Year Convertible Notes
2 Year Convertible Notes
Convertible Security (January 2018)
Convertible Security (June 2018)
2019
$
2018
$
200,000
-
-
200,000
583,811
2,397,421
-
-
2,981,232
530,000
196,164
96,248
822,412
548,540
-
87,582
96,249
732,371
Short
Term
Loans ($)
Convertible
Securities
($)
3 year
convertible
notes ($)
Total ($)
2 year
secured
convertible
notes ($)
Opening balance
at 1 July 2018
Repayment of
loans
Short terms loan
Repayment of
convertible security
Issue of notes
Cost of issuing
notes
Interest expense
Loss on early
settlement of
convertible notes
Closing balance
as at 30 June
2019
Short Term Loans
530,000
476,243
548,540
(980,000)
650,000
-
-
-
-
-
-
1,554,783
(980,000)
650,000
(1,552,328)
2,396,844
2,396,844
(174,899)
(174,899)
-
-
-
-
-
(1,552,328)
-
-
-
-
-
-
-
399,794
35,271
175,476
610,541
676,291
-
-
676,291
200,000
-
583,811
2,397,421
3,181,232
The Company entered into a $200,000 loan secured on the Research & Development tax incentive claim for the
year ended 30 June 2019 at an interest rate of 1.25% per month. The loan will be repaid on receipt of the
Research & Development claim.
44
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 14: BORROWINGS (CONTINUED)
Convertible Securities issued to The Australian Special Opportunity Fund
DomaCom Limited entered into a Convertible Security Funding Agreement (“Agreement”) to raise initially
$1,000,000 in funds through the issue of a First Convertible Security to the Australian Special Opportunity Fund,
LP, a New York-based institutional investor managed by The Lind Partners, LLC (together, “Lind”). The Execution
Date was 15 January 2018 and the First Closing Date was 24 January 2018.
The Agreement provided for DomaCom to request up to an additional A$500,000 during the Term of the
Agreement through the issue of a Second Convertible Security. This was taken up with a Second Closing Date of
15 June 2018.
DomaCom issued Lind a A$1,200,000 First Convertible Security repayable over 24 months with an initial
repayment holiday of 120 days and 20 monthly repayments of a notional amount of $60,000 in either shares or
cash (at DomaCom’s option).
DomaCom issued Lind a A$600,000 Second Convertible Security that repayable over 24 months with no
repayment holiday with 24 monthly repayments of a notional amount of $25,000 in either shares or cash (at
DomaCom’s option).
On 12 December 2018 the Company repaid $1,341,171 to Lind to settle the remaining balance of the First and
Second Convertible Securities resulting in the recognition of a loss on early settlement of $676,291.
3 Year Convertible Notes
$650,000 was raised through the issue of 650,000 unsecured 3 Year Convertible Notes on 25 January 2018 with
an annual coupon of 10% payable quarterly in arrears. The holder of each note has the right to convert into one
share at a conversion price of $0.20 up to 25 January 2021. The notes have been accounted for partly as debt
and partly as equity.
2 Year Secured Convertible Notes
$2,950,000 was raised through the issue of secured 2 Year Convertible Notes on 7 December 2018 to
Thundering Herd Fund No.1 and Thundering Herd Pty Ltd with an annual coupon of 15% payable quarterly in
arrears. The holder of each note has the right to convert into one share at a conversion price of $0.15. The notes
have been accounted for partly as debt and partly as equity. The issue costs are allocated to debt and equity.
45
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 15: ISSUED CAPITAL
2019
$
2018
$
Ordinary shares fully paid
28,070,423
24,382,924
Ordinary shares
2019
Opening balance
Ordinary shares fully paid issued during the period
Share issue cost
Closing balance as at 30 June 2019
2018
Opening balance
Ordinary shares fully paid issued during the period
Share issue cost
Closing balance as at 30 June 2018
No.
$
116,603,865
24,382,924
44,713,671
-
3,943,067
(255,568)
161,317,536
28,070,423
111,471,240
23,754,418
5,132,625
-
634,211
(5,705)
116,603,865
24,382,924
The amount of franking credits available for subsequent reporting periods are:
Deferred debit balance of franking account at the
beginning of the reporting period
Deferred debit that will arise from the receipt of
the R&D tax offset for the current year
Balance of franking account adjusted for deferred
debits arising from past R&D offsets received and
expected R&D tax offset to be received for the
current year
2019
$
2018
$
5,256,036
4,697,712
394,237
558,324
5,650,273
5,256,036
The Group has the capital management objective of ensuring the Group’s ability to continue as a going concern.
Management assesses the Group’s capital requirements in order to maintain an efficient overall financing
structure while avoiding excessive leverage. The Group manages the capital structure and makes adjustments to
it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to
maintain or adjust the capital structure, the Group may issue new shares.
46
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 16: RESERVES
Share based payment reserve
Equity Compensation Reserve
Convertible Note Reserve
Equity Option Reserve
Foreign Currency Translation Reserve
2019
Opening balance
Exercise of performance rights
Expired performance rights issued in
prior periods
Issue of convertible note
Translation of foreign operation net
assets and results
Share
based
payment
reserve
($)
249,600
-
-
-
-
2019
$
249,600
111,680
630,127
482,295
8,214
2018
$
249,600
543,428
76,971
482,295
10,782
1,481,916
1,363,076
Convertible
Note
Equity
Reserve
($)
76,971
Equity
Option
Reserve
($)
482,295
Foreign
Currency
Translation
Reserve
($)
10,782
-
-
-
-
553,156
-
-
-
-
-
-
-
-
(2,568)
Equity
Compensation
Reserve ($)
543,428
(414,038)
(17,710)
Closing balance
249,600
111,680
630,127
482,295
8,214
2018
Opening balance
Recognition of performance rights
issued during the period
Expired performance rights issued in
prior periods
Exercise of performance rights
Issue of convertible note
Issue of options with Lind Notes
Translation of foreign operation net
assets and results
Share
based
payment
reserve
($)
249,600
-
-
-
-
-
Equity
Compensation
Reserve ($)
515,556
521,115
(9,033)
(484,210)
Convertible
Note
Equity
Reserve
($)
-
-
-
-
-
-
-
76,971
-
-
Equity
Option
Reserve
($)
-
-
-
-
-
482,295
Foreign
Currency
Translation
Reserve
($)
11,638
-
-
-
-
-
-
(856)
Closing balance
249,600
543,428
76,971
482,295
10,782
Share based payment reserve is used to recognise the grant date fair value of shares issued to employees by the
Group or Shareholders. The equity compensation reserve represents amounts expensed over the vesting period
for performance rights issues to staff and directors. The convertible note equity reserve is used to recognise the
equity portion of compound instruments as set out in Note 3(k). The equity option reserve is used to record the
equity element of options issued. Exchange differences relating to the translation of results and net assets of the
Group’s foreign operations from their functional currencies to the Group’s presentation currency are recognised in
other comprehensive income and accumulated in the foreign currency reserve.
47
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 17: EARNINGS PER SHARE
Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of
the Parent Company (DomaCom Limited) as the numerator (i.e. no adjustments to profit were necessary in 2019
or 2018). The weighted average number of shares used in the calculation of the earnings per share is as follows:
Amounts in thousands of shares:
- weighted average number of shares used in the
basic earnings per share
2019
2018
133,229
113,450
NOTE 18: RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period
Adjustments for:
Depreciation and amortisation
Share based payments
Net interest received included in investing and financing
Research & development grant offset against
intangible assets
Net foreign exchange (gain)/loss
Changes in assets and liabilities:
(Increase)/decrease in trade and other
receivables
Increase/(decrease) in trade payable and accruals
Increase/(decrease) in employee provisions
$
$
(5,780,755)
(5,671,250)
754,496
-
(6,168)
319,872
(341)
665,650
512,083
(80,503)
268,015
-
217,827
1,168,258
96,436
463,752
(145,852)
97,754
Net cash used by operating activities
(3,230,375)
(3,890,351)
NOTE 19: AUDITOR REMUNERATION
Audit and review of financial statements
Auditors of DomaCom Limited - Grant Thornton
Australia
Overseas Grant Thornton network firms
Remuneration from audit and review of financial
statements
Other Services
Auditors of DomaCom Limited - Grant Thornton
Australia
- taxation compliance
- other
Total other service remuneration
$
$
74,800
12,467
87,267
10,500
2,764
13,264
67,000
11,856
78,856
10,000
4,962
14,962
Total auditor's remuneration
100,531
93,818
48
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 20 RELATED PARTY TRANSACTIONS
Key management personnel compensation
Salaries
Total short term employee benefits
Long service leave
Total other long-term benefits
Pensions - defined contribution plans
Total post-employment benefits
2019
$
2018
$
463,363
463,363
516,639
516,639
10,857
10,857
44,019
44,019
9,625
9,625
49,081
49,081
Share based payments
-
147,075
Total remuneration
518,239
722,420
The term of the share based payments in the form of performance rights are set out in Note 13. Key management
personnel are employees of DomaCom Australia Limited, a controlled entity of the Company.
Kathryn Naoumidis is a related party to Arthur Naoumidis and received a salary of $40,002 (2018: $40,002),
pension contributions of $3,800 (2018: $3,800) and share based payments of $nil (2018: $7,111). In addition
entitlement to Long Service Leave of $774 accrued ($2018: $693).
Transactions between the Group and its related parties
During the financial year ended 30 June 2019, the following transactions occurred between the Group and its
other related parties:
DomaCom Australia
DomaCom Australia Limited, a controlled entity of the Company, received management fees for managing the
DomaCom Fund. Management fees recognised during the financial year were $277,424 (2018: $142,981).
DomaCom Australia Limited held cash in the DomaCom Fund. Interest earned during the financial year was
$1,151 (2018: $13,165). At 30 June 2019, cash held in the DomaCom Fund amounted to $651 (2018: $563,654).
On 25 June 2019 DomaCom Australia paid $44,162 to purchase 43,000 units in DomaCom Property Sub-Fund
DMC0114AU 1/388-390 Burwood Highway from an employee of DomaCom Australia at an arm’s length price of
$1.027. At 30 June 2019 the investment was revalued to $44,264.
DomaCom Australia had an unsecured receivable balance with the DomaCom Fund of $6,221 (2018: $14,798)
representing upfront sub-fund set-up costs to be subsequently reimbursed by the DomaCom Fund.
DomaCom Loan Administration Pty Ltd
DomaCom Loan Administration Pty Ltd is 100% owned by DomaCom Limited and the Trustee of the DomaCom
Loan Fund. During the year DomaCom Loan Sub-Funds DMC0160AU, DMC0166AU, DMC0168AU and
DomaCom Mortgage Sub-Fund DMC0170AU that form part of the DomaCom Fund entered into separate loan
49
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
agreements with DomaCom Loan Administration Pty Ltd acting as Trustee of the DomaCom Loan Fund totaling
$4,007,000. Simultaneously DomaCom Loan Administration Pty Ltd acting as Trustee of the DomaCom Loan
Fund entered into loan agreements with DomaCom Property Sub-Funds DMC0161AU, DMC0165AU,
DMC0167AU and DMC0170AU for the same amounts. Interest totaling $72,055 was paid from the DomaCom
Property Sub-Funds to the DomaCom Loan sub-funds and DomaCom Mortgage Sub-Fund through the
DomaCom Loan Fund for these transactions. In addition $52,140 interest was paid from the DomaCom Property
Sub-Fund DMC0162AU through the DomaCom Loan Fund to the DomaCom Loan sub-fund DMC0163AU for a
loan of $948,000 entered into in the prior financial year. As back-to-back transactions the DomaCom Loan Fund
did not recognize loan assets or loan liabilities, interest income or expense with the DomaCom Loan sub-funds or
DomaCom Property Sub-Funds.
NOTE 21: CONTINGENT LIABILITIES
The Group has been supporting a case in the Federal Court of Australia to consider the application of
Superannuation legislation to the DomaCom Fund. The applicant in the proceeding sought confirmation whether
the Superannuation legislation allows Self-Managed Superannuation Funds (SMSFs) to invest in units allocated
to a DomaCom sub-fund that holds a residential property where the tenant of that underlying property is a related
party of the SMSF. The hearing took place on 27-28 November 2017. On 14 December 2017 the Federal Court
did not make a declaration in favour of the applicant. The applicant appealed against the decision and the case
was reheard in May 2018. On 10 August 2018 the judge handed down their decision. The Court held that the
primary judge was incorrect in concluding that the leasing of the residential property held by the sub-fund to a
child of a member of the sub-fund was a breach of the ‘sole purpose test’. The Court held that the primary judge
was correct to conclude that the units held constituted an investment in a ‘related trust’. Court issued instructions
as to how the costs of the proceeding be allocated. A portion of the ATO’s costs relating to the initial proceeding
and appeal will be covered by the Group, whereas the ATO will pay all of the costs of the Administrative Appeal
Tribunal appeal. The net amount has yet to be determined and exists as a contingent liability.
NOTE 22: COMMITMENTS
Operating lease commitments:
No later than 12 months
Between 12 months and 5 years
Greater than 5 years
Minimum lease payments
2019
$
11,142
-
-
2018
$
133,173
11,142
-
11,142
144,315
Operating leases entered into by the Group relate to its office rental obligations of the Melbourne Office.
NOTE 23: INTERESTS IN SUBSIDIARIES
Name of Subsidiary
Country of incorporation
and principal place of
business
Principal activity
Proportion of ownership
interests held by the
Group
DomaCom Australia
Limited
Australia
Provision of Investment
Management Services and
development of platform to
fractionalise assets
100%
50
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 23: INTERESTS IN SUBSIDIARIES (CONTINUED)
Name of Subsidiary
Country of incorporation
and principal place of
business
Principal activity
Proportion of ownership
interests held by the
Group
DomaCom Singapore
Private Limited
Singapore
Sales and marketing of
fractionalised asset product
DomaCom Platform
Services Pty Ltd
Australia
Development of platform to
fractionalise assets
DomaCom Loan Pty Ltd
Australia
Trustee for DomaCom Loan
Fund
DomaCom Administration
Pty Ltd
Australia
Administration of the Senior
Equity Release product
100%
100%
100%
100%
NOTE 24: FINANCIAL INSTRUMENTS
Categories of financial instruments
Financial Assets
Cash and cash equivalents
Trade and other receivables #
Other Assets
Financial Liabilities
Trade and other payables #
Derivative financial instruments
Current Borrowings
Non-Current borrowings
2019
$
2018
$
769,210
471,476
44,264
1,284,950
295,096
-
200,000
2,981,232
3,476,328
803,421
654,509
-
1,457,930
340,371
255,476
822,412
732,371
2,150,630
# Carried at amortised cost and repayable within 6 months
Risk management objectives and policies
The Group is exposed to various risks in relation to financial instruments. The Group’s financial assets and
liabilities by category are summarised above. The main types of risks are liquidity risk, credit risk and market risk.
The Company’s risk management is coordinated through the Chief Compliance and Risk Officer, in close
cooperation with the Board of Directors (the “Board”) and the Chief Financial Officer.
Liquidity risk analysis
Liquidity risk is the risk that the Group might be unable to meet its obligations. The Group manages its liquidity
needs by monitoring forecast cash inflows and outflows due in day-to-day business. Net cash requirements are
compared to available cash in order to maintain a cash surplus. Funding for long-term liquidity needs sourced
through additional capital raising.
51
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 24: FINANCIAL INSTRUMENTS (CONTINUED)
Liquidity risk analysis (continued)
The Group’s non-derivative financial liabilities have contractual maturities (including interest payments where
applicable) as summarised below:
30 June 2019
Trade payable and other payables
Short term loans
3 Year Convertible Notes
2 Year Convertible Notes
30 June 2018
Trade payable and other payables
Short term loans
Convertible Notes
Convertible Security (January 2018)
Convertible Security (June 2018)
Credit Risk Analysis
Within 6
months ($)
6-12 months ($)
1-5 years ($)
295,095
200,000
-
-
340,371
530,000
-
378,000
157,500
-
-
-
-
-
-
-
378,000
157,500
-
-
650,000
2,950,000
-
-
650,000
399,000
315,000
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group’s maximum
exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting date, as
summarised in Note 7.
The Group continuously monitors defaults of customers and other counterparties, identified either by individual or
group and incorporates this information into its credit risk controls. The Group’s policy is to deal only with
creditworthy counterparties.
The Group’s management considers that all the above financial assets that are not impaired or past due for each
of the reporting dates under review are of good credit quality.
In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any
single counterparty or any group of counterparties having similar characteristics.
The credit risk for cash and cash equivalents is considered negligible, since the counterparties are reputable
banks with high quality external credit ratings.
Market risk analysis
The Group is exposed to market risk through currency and interest rate risk.
Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are
disclosed below. The amounts shown are those translated into $AUD at the closing rate:
52
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 24: FINANCIAL INSTRUMENTS (CONTINUED)
Market risk analysis (continued)
Foreign Currency Sensitivity
SGD
Financial assets
Financial liabilities
Total Exposure
2019
$
1,128
-
1,128
2018
$
1,678
-
1,678
The following table illustrates the sensitivity of profit and equity in regards to the Group’s financial assets and
financial liabilities and the $SGD/$AUD exchange rate ‘all other things being equal’. It includes only outstanding
foreign currency denominated monetary items and adjusts their translation at the year end for a change in foreign
currency rates. It assumes a +/- 10% change of the $SGD/$AUD exchange rate for the year ended at 30 June
2019 (2018: 10%).
If the $SGD had strengthened against the $AUD by 10% (2018: 10%) this would have had the following impact
through a decrease in the Foreign Currency Translation Reserve:
Equity
2019
$
103
2018
$
153
For a 10% weakening of $SGD against $AUD there would be a comparable increase in the Foreign Currency
Translation Reserve.
Interest Rate Sensitivity
The Company’s policy is to minimise interest rate risk exposures. Interest income is earned on deposits held. The
rate is reviewed on a regular basis to ensure it remains in line with the expected rate of return. Interest expense
incurred on any short term borrowings is assessed to ensure it is in line with market expectations. The Company’s
policy is not to enter into any long term borrowing.
The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates
of +/- 1% (2018: +/- 1%). These changes are considered to be reasonably possible based on observation of
current market conditions. The calculations are based on a change in the average market interest rate for each
period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All
other variables are held constant.
Interest Rate Sensitivity
30 June 2019
30 June 2018
Loss for
the period
$
+1%
(4,549)
(12,606)
Loss for
the period
$
-1%
4,549
12,606
53
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 24: FINANCIAL INSTRUMENTS (CONTINUED)
Fair value Measurements
This note provides information about how the Group determines fair values of financial assets and financial
liabilities.
Fair value of the Groups financial assets and financial liabilities that are measured at fair value on a recurring
basis
Some of the Consolidated Entity’s financial assets and financial liabilities are measured at fair value at the end of
each reporting period. The following table gives information about how the fair values of these financial assets
and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).
Financial assets/(liabilities)
Fair value
30 June
2019 ($)
Fair value
30 June
2018 ($)
Fair value
hierarchy
Valuation technique(s)
and key input(s)
44,264
- Level 1
-
(85,686) Level 2
-
(169,790) Level 2
43,000 Units held in the
DMC0114AU Burwood
Highway DomaCom Property
Sub-Fund
Embedded derivative liability
with the following features:
DomaCom option to repay
security in shares, Lind option
to have securities repaid in
shares & DomaCom’s option
to have securities repaid early
- First Convertible Security
Embedded derivative liability
with the following features:
DomaCom option to repay
security in shares, Lind option
to have securities repaid in
shares & DomaCom’s option
to have securities repaid early
- Second Convertible Security
Quoted price for units in
DomaCom Property
Sub-Fund
Black Scholes and
Monte Carlo pricing
models, using
observable share price,
observable risk free rate
and observable share
price volatility
Black Scholes and
Monte Carlo pricing
models, using
observable share price,
observable risk free rate
and observable share
price volatility
54
For personal use only
DOMACOM LIMITED
ABN 69 604 384 885
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 25: PARENT ENTITY INFORMATION
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Net Assets
Issued Capital
Share based payment reserve
Equity compensation reserve
Convertible note equity reserve
Equity option reserve
Retained earnings
Current earnings
Total Equity
2019
$
880,150
2,692,640
244,205
3,225,437
(532,797)
2018
$
558,324
3,250,373
838,617
1,826,464
1,423,909
28,070,423
24,382,924
249,600
111,680
630,126
249,600
543,428
76,971
482,295
(24,311,309)
482,295
(18,639,203)
(5,765,612)
(5,672,106)
(532,797)
1,423,909
NOTE 26: SUBSEQUENT EVENTS
Subsequent to balance date and prior to the issuing of this report, the following events have occurred:
- The Group’s Research and Development tax incentive claim has been registered with AusIndustry and an
amount of $394,237 will be claimed.
There have been no other events subsequent to period end that require disclosure.
55
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DOMACOM LIMITED
ABN 69 604 384 885
DIRECTORS’ DECLARATION
In the opinion of the directors of DomaCom Limited
a
the consolidated financial statements and notes of DomaCom Limited are in accordance with the
Corporations Act 2001, including:
i giving a true and fair view of its financial position as at 30 June 2018 and of its performance for the
financial period ended on that date; and
ii complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001 and other mandatory professional
reporting requirements, and
b
there are reasonable grounds to believe that DomaCom Limited will be able to pay its debts as
and when they become due and payable, and
c DomaCom Limited has included in the notes to the financial statements an explicit and
unreserved statement of compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Grahame D Evans
Chairman
20 August 2019
Arthur Naoumidis
Director
56
For personal use only Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of DomaCom Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of DomaCom Limited (the Company) and its Controlled Entities (the Group), which
comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of profit or loss
and other comprehensive income, statement of changes in equity and consolidated statement of cash flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting policies, and the
Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
5(cid:26)
For personal use only Material uncertainty related to going concern
We draw attention to Note 3(r) to the financial statements, which indicates that the Group incurred a loss of $5,780,755 and
negative operating cash flows during the year ended 30 June 2019, and as of that date, the Group has effective net working
capital of $500,900 and a net liability position of $532,797. As stated in Note 3(r), these events or conditions, alongside other
matters as set forth in Note 3(r), indicate that a material uncertainty exists that may cast doubt on the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial report of the current period. These matters were addressed in the context of our audit of the
consolidated financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. In addition to the matter described in the Material uncertainty related to going concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Capitalisation of Software development costs – Note 3(g),
Note 9
The Group capitalises costs that are directly attributable to the
development of intangibles assets in accordance with AASB
138 Intangible Assets.
AASB 138 provides that an entity may only capitalise costs
that meet specific capitalisation criteria.
This area is a key audit matter due to the inherent subjectivity
required in determining whether the costs capitalised meet the
requirements of AASB 138 Intangible Assets.
Our procedures included, amongst others:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
enquiring with management to obtain and document
an understanding of their process and the design of
controls relating to the capitalisation of software
development costs and their compliance with AASB
138;
evaluating the entity’s position that the underlying
assets is in the development phase, as well as the
entity’s ability to demonstrate technical feasibility,
that the asset will generate probable future economic
benefits, the ability to bring the asset to completion
for use or sale, amongst other requirements of AASB
138;
obtaining supporting workings and on a sample
basis, agreeing internal salary costs and other costs
capitalised to supporting documentation;
assessing the eligibility of expenditure capitalised for
compliance with development recognition
requirements under AASB 138;
assessing the allocation of costs between separately
identifiable intangible assets; and
comparing to the R&D incentive claim to assess
appropriateness of the breakout between capitalised
R&D costs and expensed costs, as the period in
which the R&D incentive is recognised will be
matched to the period of expense.
5(cid:27)
For personal use only Intangible asset – Impairment – Note 3(g), Note 9
Given the nature of the industry in which the Group operates,
there is a risk that there could be a material impairment to
goodwill and intangible asset balances.
AASB 136 Impairment of Assets requires that an entity shall
assess at the end of each reporting period possible internal or
external indicators of impairment. If any indication exists, the
entity shall estimate the recoverable amount of the asset.
This area is a key audit matter due to the inherent subjectivity
required in measuring the recoverable amount.
Our procedures included, amongst others:
(cid:120)
(cid:120)
(cid:120)
obtaining from management a paper documenting
their assessment relating to the Group’s Cash
Generating Unit (“CGU”) and potential impairment
indicators;
evaluating management’s assessed carrying value of
the intangible asset calculated based on its expected
fair value less cost to sell; and
assessing the adequacy of the relevant disclosures in
the financial statements.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s financial report for the year ended 30 June 2019, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact.
Responsibilities of the Directors for the financial report
The Directors of the Group are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
5(cid:28)
For personal use only Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 11 to 14 of the Directors’ report for the year ended 30 June
2019.
In our opinion, the Remuneration Report of DomaCom Limited, for the year ended 30 June 2019 complies with section
300A of the Corporations Act 2001.
Responsibilities
The Directors of the Group are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
M A Cunningham
Partner – Audit & Assurance
Melbourne, 20 August 2019
6(cid:19)
For personal use only DOMACOM LIMITED
ABN 69 604 384 885
SHAREHOLDER INFORMATION
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is
set out below. The information is effective as at 19 August 2019.
Substantial shareholders
ARTHUR NAOUMIDIS & KATHRYN NAOUMIDIS
Voting rights
Number of
shares
held
16,240,285
Ordinary Shares: On a show of hands, every member present at a meeting in person or by proxy shall have
one vote and upon a poll each share shall have one vote.
Performance Rights: No voting rights.
Distribution of equity security holders
Holdings Ranges
Ordinary
Shares
Performance
Rights
Options
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
10
192
133
272
199
806
-
-
-
-
4
4
-
-
-
-
1
1
61
For personal use only DOMACOM LIMITED
ABN 69 604 384 885
SHAREHOLDER INFORMATION
Twenty (20) largest shareholders
MR ARTHUR NAOUMIDIS & MRS KATHRYN MARGARET NAOUMIDIS
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
UCAN NOMINEES PTY LTD
WARBONT NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
SONENBERG SUPERANNUATION PTY LTD
CITICORP NOMINEES PTY LIMITED
TAYCO INVESTMENTS PTY LTD
MR GRANT RAYMOND SNIBSON & MRS SNIBSON
CATHRYN NOLAN & STEPHEN JOYCE
NO TAX BILL PTY LTD
GOLFER'S DELIGHT PTY LTD
ARNI SUPERANNUATION SERVICES PTY LTD
BOVINGDON RETIREMENT FUND PTY LTD
TORONTO COVE PTY LTD
GRAYSON NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CS FOURTH NOMINEES PTY LIMITED
MR WARREN GIBSON
RACT SUPER PTY LTD
Total Securities of Top 20 Holdings
Number of
shares held
% of
issued
shares
16,240,285 10.04%
4.26%
3.38%
3.24%
3.22%
2.88%
2.55%
1.95%
1.91%
1.88%
1.85%
1.68%
1.63%
1.62%
1.58%
1.37%
1.33%
1.32%
1.19%
1.05%
80,822,517 49.95%
6,896,584
5,464,111
5,247,222
5,210,982
4,663,333
4,133,448
3,158,531
3,083,333
3,037,982
3,000,000
2,725,000
2,637,740
2,613,835
2,562,500
2,216,667
2,157,756
2,140,145
1,927,407
1,705,656
Total of Securities
161,793,112
Unissued equity securities
Number of performance rights issued under the Employee Director programs: 725,288.
Number of options issued to the Australian Special Opportunity Fund, LP: 5,550,000
Securities exchange
The Company is listed on the Australian Securities Exchange.
62
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DOMACOM LIMITED
ABN 69 604 384 885
CORPORATE INFORMATION
REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS
Level 6
99 Queen Street
Melbourne
VIC 3000
Tel: 01300 365 930
DIRECTORS
Grahame D Evans
Arthur Naoumidis
David H Archbold
Graeme A Billings
Peter C Church OAM
Ross A Laidlaw
COMPANY SECRETARY
Philip JR Chard
SHARE REGISTRY
Boardroom Pty Limited
Level 12, 225 George Street
Sydney
NSW 2000
AUDITOR
Grant Thornton
Collins Square
727 Collins Street
Melbourne
VIC 3008
63
For personal use only