DOTZ NANO LIMITED
ABN 71 125 264 575
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
CONTENTS
Corporate Directory
Directors’ Report
Auditor’s Independence Declaration
Financial Report
Directors’ Declaration
Independent Auditor’s Report
Corporate Governance Statement
Additional ASX Information
1
2
19
20
51
52
56
67
CORPORATE DIRECTORY
Directors
Bernie Brookes – Chairman & Interim CEO
Doron Eldar – Non-Executive Director
Ian Pamensky – Non-Executive Director
James Cotton – Non-Executive Director
Company Secretary
Ian Pamensky
Registered Office
Level 14
330 Collins Street
Melbourne VIC 3000
Auditor
BDO Audit (WA) Pty Ltd
38 Station Street
PO Box 700
Subiaco WA 6008
Share Registry
Automic Registry Services
Level 5, 126 Phillip Street
SYDNEY NSW 2000
Securities Exchange Listing
ASX Limited
Level 4 North Tower, Rialto
525 Collins Street
Melbourne VIC 3000
ASX Code – DTZ
1 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Your Directors present their report, together with the financial statements of Dotz Nano Limited (“the Company”) and
controlled entities (“the Group”) for the financial year ended 31 December 2020.
Directors
The names and the particulars of the Directors of the Company during or since the end of the financial year are:
Name
Bernie Brookes AM
Status
Chairman &
Interim CEO
Appointed
Resigned
Appointed 15 January 2020
Appointed 25 September 2020
-
-
Uzi Breier
Doron Eldar
Ian Pamensky
James Cotton
John Bullwinkel
CEO and Executive Director
Appointed 18 May 2018
25 September 2020
Non-Executive Director
Appointed 15 January 2020
Non-Executive Director
Appointed 25 September 2020
Non-Executive Director
Appointed 16 November 2020
-
-
-
Non-Executive Director
Appointed 21 March 2018
Resigned 23 March 2020
Interim Chairman
Appointed 1 December 2019
Resigned 15 January 2020
Ashley Krongold
Non-Executive Director
Appointed 31 October 2016
Resigned 23 March 2020
Principal Activities
The principal continuing activities of the Group during the year is developing, manufacturing and commercialising tagging,
tracing, and verification solutions.
Dividends
There were no dividends paid or recommended during the financial year ended 31 December 2020 (2019: Nil).
Review of Operations
Dotz Nano Limited had a loss for the year of $3,968,996 (2019: $3,746,564 loss). This included a non-cash amount of
$1,392,484 share-based payments (2019: $731,308).
The net assets of the Group have increased from $1,299,665 at 31 December 2019 to $5,205,896 at 31 December 2020.
As at 31 December 2020, the Group's cash and cash equivalents balance was $5,259,087 (2019: $1,371,275) and had working
capital of $4,950,829 (2019: $1,106,596).
Unless otherwise stated all figures in this report are in the Company’s presentation currency US$.
Review of Activities
The following events occurred during the year:
•
•
•
•
On 15 January 2020, the Company appointed Mr Bernie Brookes as Chairman of the Company. The terms of the
Agreement with the Chairman are detailed in the remuneration report.
On 15 January 2020, the Company appointed Mr Doron Eldar as a Non-Executive Director of the Company.
On 31 January 2020, the World Health Organisation (WHO) announced a global health emergency because of a new
strain of coronavirus originating in Wuhan, China (COVID-19 outbreak) and the risks to the international community
as the virus spreads globally beyond its point of origin. Because of the rapid increase in exposure globally, on 11
March 2020, the WHO classified the COVID-19 outbreak as a pandemic.
On 20 March 2020, Mr John Bullwinkel and Mr Ashley Krongold resigned as Non-Executive Directors of the Company.
2 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Review of Activities
•
•
•
•
•
On 26 March 2020, the Company announced that it had secured a US$100,000 (A$166,000) Purchase Order for its
ValiDotzTM plastic security markers from a Switzerland-based plastic compounder. The compounder will on-sell
Dotz’s ValiDotzTM security makers to its customers as anticounterfeiting solution inserted during the plastic
compounding process. Orders to date have been less than the original purchase order as disclosed in the Company’s
ASX announcement on 12 March 2021, which includes a summary of the key reasons for the discrepancies.
On 11 May 2020, the Company announced that it had signed a US$1,000,000 (A$1,530,000) Commercial Agreement
with Universal Exports Group (“UEG”), a Hong Kong based corporation specialising in wholesale distribution to supply
anti-counterfeiting and tracing capabilities to face masks required for Government stock piles and National Health
Services (“Agreement”).
Under the Agreement Dotz will supply its ValiDotzTM security markers which will be applied to 100 million medical
face masks. The Agreement consists of Phase-I requiring calls for immediate supply of ValiDotzTM for 30 million masks
and the balance Phase-II, pending customer demand. The Phase I was delivered and a payment of US$300K was
received by the Group during the reporting period.
As part of the Agreement, UEG will become the sole and exclusive distributor for Dotz in South Africa and China
markets for a period of 2 years, for the following items: face masks, medical gowns, medical gloves and other medical
protective gear. As part of the Agreement, Dotz are to grant UEG 3,000,000 Unlisted Options with an exercise price
of A$0.048 vesting on a pro-rata quarterly basis over the 2 year term of the Agreement. Options have an expiring
term of 3 years from the date of the Agreement. 750,000 Unlisted Options were issued before 31 December 2020
and a further 375,000 Unlisted Options have been issued since 31 December 2020. A further 1,875,000 Unlisted
Options are to be issued on a quarterly basis over the duration of the agreement.
On 21 July 2020, the Company also announced that it had signed a pilot agreement with Zohar-Dalia Cooperative
Agriculture Association Ltd for the use of ValiDotzTM markers in disinfectant materials to verify surface coverage for
signs of viruses, including COVID-19. Under the agreement, the Company marked 1,000 litres of Zohar-Dalia
disinfectant material to trace and verify proper surface coverage in local hospitals and other public areas as part of
a pilot. Since completing the pilot study, the parties have had continuing discussions as to the possibility of entering
into an agreement for the on-going supply of the Company’s Validotz™ markers. The Company had not entered into
a definitive agreement with Zohar Dalia Co-Operative Agricultural Association at 31 March 2021.
On 4 August 2020, the Company announced that it had signed a A$528,000 commercial agreement with V2Tech
Distributors Pty Ltd (V2Tech), an Australian-based corporation specialising in wholesale distribution, to authenticate
medical face masks in Australia (“Agreement”). The initial order was to consist of 30 million face masks for the
Australian health sector, government, and retailers. V2Tech was required to pay 5% of the contract value within 30
days of the Agreement and will be the sole distributor for two years in Australia. Subsequently on 29 January 2021
the Company announced that during 2020 Dotz received A$26,000 from V2Tech for the initial order that was
delivered. The Company is now expecting that the balance of the contract will be realized during 2021.
On 28 August 2020, the Company announced that it had signed a A$2.2 million (US$1.6M) commercial agreement
with TT Medical Group (TTM). The initial order was valued at A$348,000 (USD $250,000), a second order in the
amount of A$626,000 (USD $450,000) is expected Q1 2021 and the remaining contract will be ordered subject to
customer demand. TTM will be the sole distributor of the “Secured by Dotz” authentication solution for face masks
in Turkey, Italy and Ghana PPE markets for a three-year period, provided agreed annual sales targets are met.
Subsequently on 29 January 2021 the Company announced that during FY20, the Company delivered an initial
US$24,000 quantity of its ‘Secured by Dotz’ authentication solution for face masks and medical gloved to TT Medical
Group and delivered the remaining US$226,000 quantity in January 2021. The Group also received the US$35,000
advance payment and is currently in discussion with TT Medical Group to amend the contract to deliver a broader
range of PPE related products, not less than the value originally contracted from first quarter of FY2021.
3 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Review of Activities
•
•
•
•
•
In addition, Dotz has also signed a three-year distribution agreement with a related party of TTM, TT Medical UAE
(“TTMU”), whereby TTMU will become the sole distributor of the “Secured by Dotz” authentication solution for face
masks in the UAE, Egypt, Qatar and Saudi Arabia PPE markets, provided agreed annual sales targets are met. As an
incentive, Dotz will grant TTMU 4 million Unlisted Options with exercise price at a 40% premium to the closing Dotz
share price on 25 August 2020 vesting on a pro-rata quarterly basis over the three-year period if performance targets
are met, with an expiry term of three and a quarter years from the date of the agreement. The issue of options is
subject to shareholder approval.
On 8 September 2020, the Company announced that it had signed a face mask authentication agreement granting
Breathe Medical Manufacturing Ltd (Breathe Medical) exclusivity in USA and Canada. The agreement is for a period
of three years and is automatically renewed for an additional one-year period. During the initial three-year period of
the agreement, the total minimum order amount is US$13 million, and to maintain exclusivity a total minimum
amount of US$24.6 million. The initial order of US$1 million is due in Q1 2021 and for subsequent quarters, minimum
quarterly orders of US$1.25 million.
Subsequently on 29 January 2021 the Company announced that the Group has commenced preparation for delivery
of an initial US$1 million quantity of its ‘Secured by Dotz’ authentication solution. Due to a CEO change and
manufacturing issues at Breathe Medical, the Group’s three -year purchase agreement has been delayed by a quarter
and was expected to commence in second quarter of FY2021.
On 25 September 2020, Non-Executive Chairman Bernie Brookes AM was appointed Chairman & Interim-CEO,
following the resignation of Mr Uzi Breier as CEO & Executive Director of the Group. Mr Ian Pamensky was appointed
as an Interim-Director.
On 19 October 2020, the Group announced that it had extended its initial commercial agreement with Universal
Exports Group (“UEG”), receiving a new PPE purchase order for medical gown authentication, its second with the
Hong King-based wholesale distributor. Under the agreement, Dotz will use its advanced “Secured by Dotz” solution
to authenticate an initial quantity of protective medical gowns for US$255,000, with delivery due in Q1 2021.
Subsequently on 29 January 2021 the Company announced that the initial contracted advance payment of US$64K,
which was due in fourth quarter of FY2020 is now being incorporated into the combined first quarter FY2021 order
and due to customer product characterization changes the project is further delayed to Q2 2021. The agreement
also outlines authentication for further medical gowns and other PPE products for up to US$765,000, subject to
customer demand.
On 19 October 2020, the Company reported that it had secured a AU$7.1 million Placement to fund the delivery of
existing PPE authentication contracts, establish distribution networks, and sales and marketing support. The
Placement comprised of an offer of 28.3million fully paid ordinary shares at an issue price of A$0.25 per share. SIBF’s
commitment of A$650,000, as well as A$150,000 of Director participation in the placement, is subject to shareholder
approval at the Company’s next General Meeting.
•
Mr James Cotton was appointed as a Non-Executive Director of the Company, effective from 16 November 2020.
4 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Significant events after the reporting period
Since the reporting date the following significant events have occurred:
•
•
•
•
The Company’s securities were suspended from trading on the ASX from 20 November 2020 to 15 March 2021 to
finalise an agreement with Caerus Therapeutics Inc and respond to queries from the ASX. The responses to the ASX
queries were announced on 1 March and 12 March 2021.
The Company entered into an amended service agreement with Caerus Therapeutics Inc to facilitate the
development and commercialisation of the Company’s Rapid SARS-CoV-2 Diagnostic kit (the “Dotz Test Kit”). The
terms of the agreement are incorporated as part of the Group announcement made on 1 March 2021.
On 25 January 2021, the Company obtained authorization to use the CE mark for its Dotz Test Kits in respect of
nasopharyngeal swab samples. The CE mark authorisation clears the Dotz Test Kit for sale in the European Union
(although it is notes that some countries in the European Union have additional import regulatory requirements that
Dotz will still need to comply with if it indents to sell the Dotz Test Kits in those countries).
On 22 March 2021, the Company obtained authorization for its Dotz Test Kits in respect of saliva samples. The CE
mark authorisation clears the saliva-based diagnostic Dotz Test Kits for sale in the European Union (although it is
notes that some countries in the European Union have additional import regulatory requirements that Dotz will still
need to comply with if it indents to sell the Dotz Test Kits in those countries).
Other than these matters, no matters have arisen since the end of the financial year to the date of this report of a material
and unusual nature likely, in the opinion of the Directors, to affect significantly the operations of the Group, the results of
those operations, or the state of affairs of the Group in future financial years.
5 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Information on Directors
Mr Bernie Brookes AM
Non-Executive Chairman (Appointed 15 January 2020) and Chairman and Interim CEO (Appointed
25 September 2020)
Qualifications
BA, Dip Ed
Experience
Mr. Brookes is an experienced Australian executive, CEO and Chairman with substantial expertise
in retail, supply chain management, wholesale operations and IT systems. He has more than four
decades of business management experience. Previously he was a senior Executive at Woolworths,
CEO of Myer Holdings Limited for nine years and Edcon South Africa for three years.
Mr. Brookes’s strengths include expertise in business management, displaying energy and self-
confidence with the ability to find solutions to complex situations through analytical, conceptual
and entrepreneurial skills. Ultimately, he is motivated by results.
Mr Brookes is on the Advisory Board of the World Retail Congress as Australia’s representative and
is on the Grand Jury for the World Retail Awards. He was awarded an Order of Australia for his
efforts in retail and Philanthropy and for over 30 years has been the Patron of Australia’s largest
retail industry award.
Interest in Shares and
Options
625,000 Ordinary Shares
Special Responsibilities
Nil
Directorship held in other
listed entities (last 3
years)
Funtastic Limited (resigned 26 November 2020)
Mr Doron Eldar
Non-Executive Director (Appointed 15 January 2020)
Qualifications
BA in Business Economics
Experience
Mr. Eldar brings more than a decade of experience in senior leadership roles and is currently a
Melbourne-based partner at venture capital fund SIBF and Oxen9. Mr Elder has extensive
experience within start-up and pre-revenue companies, executing the development of new
business models, channel growth and effective go-to-market strategies.
Interest in Shares and
Options
277,778 Ordinary Shares
92,593 Unquoted Options
Special Responsibilities
Nil
Directorships held in
other listed entities (last 3
years)
Nil
6 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Information on Directors
Mr Ian Pamensky
Company Secretary
Qualifications
B.Com, BAccS (Hons), CA
Experience
Mr. Pamensky has over 23 years’ experience in the finance and secretarial sector for both SME
and ASX-listed entities. Since 1997, Mr Pamensky has held various roles with ASX-listed
companies.
Interest in Shares and
Options
Nil
Special Responsibilities
Nil
Directorships held in other
listed entities (last 3 years)
Nil
Mr James Cotton
Non-Executive Director (Appointed 16 November 2020)
Qualifications
BL & Sc
Experience
Mr Cotton has more than 15 years’ experience establishing and operating technology companies,
including more than a decade as the founder and CEO of globally renowned governance, risk and
compliance software company CMO Software.
Interest in Shares and
Options
Nil
Special Responsibilities
Nil
Directorships held in other
listed entities (last 3 years)
Nil
Mr John Bullwinkel
Non-Executive Director (Resigned 23 March 2020)
Interim Chairman (Resigned 15 January 2020)
Qualifications
Dip.FS, FIPA
Experience
Mr. Bullwinkel is Managing Director of Business Partners Pty Ltd, a boutique advisory and
investment consulting company and is based in Melbourne. He has held senior Private Banking
roles at Macquarie Private Bank, ANZ Private Bank, Deutsche Bank and Merrill Lynch. He has also
held senior positions at Citibank and NatWest in Corporate Commercial Banking.
Interest in Shares and
Options
Nil (at resignation date)
Special Responsibilities
Nil
Directorships held in
other listed entities (last
3 years)
Nil
7 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Information on Directors
Mr Ashley Krongold
Non-Executive Director (Resigned 23 March 2020)
Qualifications
B.Com
Experience
Mr. Krongold has spent 15 years in the Investment Banking and Accounting industries. He was a
founding member of Investec Bank Australia and is currently CEO of the Krongold Group and a
non-executive director of Weebit Nano Ltd (ASX: WBT). He is also a founding General Partner of
global equity crowd-funding platform, OurCrowd.
Interest in Shares and
Options
1,875,032 Ordinary shares (at resignation date)
544,946 Performance shares (at resignation date)
Special Responsibilities
Nil
Directorship held in
other listed entities (last
3 years)
Weebit Nano Limited (current)
G-Medical Innovations Ltd (resigned 23 April 2018)
Information on Key Management
Dr Michael Shtein
Chief Technology Officer (appointed 1 August 2015)
Qualifications
Ph.D. Nano Technology
Experience
Dr. Shtein holds a Ph.D. in Nano Technology interdisciplinary studies from Ben-Gurion University,
together with and M.Sc in Chemical Engineering and MBA. He was the Chief Material Engineer –
R&D Development for the Israeli Ministry of Defence and has developed several new materials and
compounds. His main research topic is composite nanomaterials (CNT, Graphene, WS2).
Mr Tomer Segev
Chief Financial Officer (appointed 1 January 2019)
Qualifications
BA, MBA, CPA
Experience
Mr. Segev is an experienced executive with extensive knowledge of investment banking and
international finance. He has previous CFO experience with various commercialised start-up
companies, including RoundForest and NorthBit.
Mr Segev has worked in the United States as an Associate Vice President at CSG Partners and as a
Senior Analyst at PWC. Later he was Head of M&A for investment bank Rosario Capital.
Mr Yoni Engel
VP Business Development (appointed 1 November 2019)
Qualifications
PhD Chemistry and Nanotech, M.Sc. Energy engineering
Experience
Dr. Engel brings a unique mix of broad scientific and technical expertise, both in academia and in
industry. He developed an ultrasensitive system for the detection of explosives which was later
commercialized (Tracesense ltd.) and lead the scientific development for several mega engineering
projects for ICL Fertilizers. He was a post-doctoral research fellow in the University of
Massachusetts, and holds a PhD in Chemistry from Tel-Aviv University and a M.Sc in Energy
engineering (O&NG) from the Technion.
8 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Information on Company Secretary
Details for Mr Ian Pamensky are provided above under Information on Directors.
Meetings of Directors
The number of formal meetings of Directors held during the period and the number of meetings attended by each director was
as follows:
Appointed
Resigned
Bernie Brookes
Appointed 15 January 2020
Doron Eldar
Appointed 15 January 2020
N/A
N/A
Ian Pamensky
Appointed 25 September 2020 N/A
James Cotton
Appointed 16 November 2020 N/A
Uzi Breier
Appointed 18 May 2018
Resigned 25 September 2020
Ashley Krongold
Appointed 31 October 2016
Resigned 23 March 2020
John Bullwinkel
Appointed 21 March 2018,
Resigned 23 March 2020
DIRECTORS’ MEETINGS
Number
eligible to
attend
Number
Attended
8
8
1
-
7
1
1
8
8
1
-
7
1
1
Options
Unissued shares under option
At the date of this report, the unissued ordinary shares Dotz Nano Limited under option are as follows:
Expiry Date
Grant Date
Exercise Price
Number Under Option
15 February 2023
13 February 2019
7 May 2021
19 June 2021
29 July 2021
7 May 2019
19 June 2019
29 July 2019
11 September 2021
12 September 2019
11 December 2021
3 December 2019
11 December 2021
26 November 2019
17 June 2022
18 May 2022
18 June 2020
18 June 2020
31 December 2022
20 August 2020
31 December 2022
20 August 2020
10 September 2022
10 September 2020
19 October 2023
19 October 2020
31 December 2022
31 December 2022
31 December 2023
30 July 2020
30 July 2020
30 July 2020
16 October 2022
16 October 2020
16 October 2022
16 October 2020
11 May 2023
6 February 2021
31 December 2022
16 March 2021
Nil
AU$0.085
AU$0.10
AU$0.09
AU$0.10
AU$0.09
AU$0.09
AU$0.09
AU$0.07
AU$0.12
AU$0.15
AU$0.09
AU$0.38
Nil
Nil
AU$0.20
AU$0.05
AU$0.30
AU$0.048
AU$0.06
1,000,000
10,300,003
5,000,000
4,820,094
10,000,000
10,000,000
6,368,522
4,629,630
1,350,000
500,000
500,000
4,629,630
5,000,000
6,650,000
5,650,000
5,650,000
100,000
400,000
375,000
200,000
83,122,879
No option holder has any right under the options to participate in any other share issue of the Company or of any other entity.
9 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Performance Shares
At the date of this report, there were no performance shares on issue.
Proceedings on behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings.
The Company was not a party to any such proceedings during the year.
Indemnifying Officers
The Company indemnifies each of its Directors, officers and company secretary. The Company indemnifies each director or
officer to the maximum extent permitted by the Corporations Act 2001 from liability to third parties, except where the liability
arises out of conduct involving lack of good faith, and in defending legal and administrative proceedings and applications for
such proceedings.
The Company must use its best endeavours to insure a director or officer against any liability, which does not arise out of
conduct constituting a wilful breach of duty or a contravention of the Corporations Act 2001. The Company must also use its
best endeavours to insure a Director or officer against liability for costs and expenses incurred in defending proceedings
whether civil or criminal.
Insurance premiums
During the year the Company paid insurance premiums to insure directors and officers against certain liabilities arising out of
their conduct while acting as an officer of the Group. Under the terms and conditions of the insurance contract, the nature of
the liabilities insured against and the premium paid cannot be disclosed.
Environmental Regulations
In the normal course of business, there are no environmental regulations or requirements that the Company is subject to.
Future Developments, Prospects and Business Strategies
The Company’s principal continuing activity is the development and commercialisation of technologies in the advanced
materials industry, specifically graphene quantum dots (GQDs). The Company’s future developments, prospects and business
strategies are to continue to develop and commercialise these technologies.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, BDO Audit (WA) Pty Ltd, as part of the
terms of its audit engagement agreement against claims by third parties arising from their report on the financial report.
Non-audit Services
During the year, BDO Audit (WA) Pty Ltd, the Company’s auditor did not provide any services other than their statutory audits.
Other BDO firms and divisions provided tax services to the Group. Details of their remuneration can be found within the
financial statements at Note 6 Auditor’s Remuneration.
In the event that non-audit services are provided by BDO Audit (WA) Pty Ltd, the Board has established certain procedures to
ensure that the provision of non-audit services are compatible with, and do not compromise, the auditor independence
requirements of the Corporations Act 2001. These procedures include:
•
•
non-audit services will be subject to the corporate governance procedures adopted by the Company and will be reviewed
by the Board to ensure they do not impact the integrity and objectivity of the auditor; and
ensuring non-audit services do not involve reviewing or auditing the auditor’s own work, acting in a management or
decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 31 December 2020 has been received and can be found on page
19 of the financial report.
10 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Remuneration Report (Audited)
This remuneration report for the year ended 31 December 2020 outlines the remuneration arrangements of the Group in
accordance with the requirements of the Corporations Act 2001 (Cth), as amended (Act) and its regulations. This information
has been audited as required by section 308(3C) of the Act.
The remuneration report is presented under the following sections:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Introduction
Remuneration governance
Executive remuneration arrangements
Non-executive Director fee arrangements
Details of remuneration
Additional disclosures relating to equity instruments
Loans to key management personnel (KMP) and their related parties
Other transactions and balances with KMP and their related parties
Voting of shareholders at last year’s annual general meeting
1.
Introduction
Key Management Personnel (KMP) have authority and responsibility for planning, directing and controlling the major
activities of the Group. KMP comprise the directors of the Company and identified key management personnel.
Key management personnel covered in this report are as follows:
Name
Status
Appointed
Resigned
Bernie Brookes AM
Chairman & Interim CEO
15 January 2020 (Chairman)
25 September 2020 (Interim CEO)
Doron Eldar
Non-Executive Director
15 January 2020
Ian Pamensky
Non-Executive Director
25 September 2020
James Cotton
Non-Executive Director
16 November 2020
Michael Shtein
Chief Technology Officer
1 August 2015
Tomer Segev
Chief Financial Officer
1 January 2019
VP Business Development
1 November 2019
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Yoni Engel
Uzi Breier
John Bullwinkel
CEO and Executive Director
18 May 2018
25 September 2020
Non-Executive Director
21 March 2018
Interim Chairman
1 December 2019
Ashley Krongold
Non-Executive Director
31 October 2016
23 March 2020
15 January 2020
23 March 2020
Compensation levels for KMP are competitively set to attract and retain appropriately qualified and experienced directors
and executives. The Board may seek independent advice on the appropriateness of compensation packages, given trends in
comparable companies both locally and internationally and the objectives of the Group’s compensation strategy.
2. Remuneration governance
The Directors believe the Company is not currently of a size nor are its affairs of such complexity as to warrant the
establishment of a separate remuneration committee. Accordingly, all matters are considered by the full Board of Directors,
in accordance with a remuneration committee charter.
During the financial year, the Company did not engage any remuneration consultants.
11 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Remuneration Report (Audited)
3. Executive remuneration arrangements
The compensation structures are designed to attract suitably qualified candidates, reward the achievement of strategic
objectives, and achieve the broader outcome of creation of value for shareholders. Compensation packages may include a
mix of fixed compensation, equity-based compensation, as well as employer contributions to superannuation funds. Shares
and options may only be issued subject to approval by shareholders in a general meeting.
At the date of this report the Company has three appointed executives, being Dr Michael Shtein as the Chief Technology
Officer, Mr Yoni Engel as the VP of Business Development, and Mr Tomer Segev as the Chief Financial Officer. The terms of
their Executive Employment Agreements with Dotz Nano Limited are summarised in the following table.
Executive Name
Dr Michael Shtein
Mr Tomer Segev
Mr Yoni Engel
Remuneration
•
•
•
•
•
•
•
•
•
•
•
Executive compensation of US$20,000 per month for the period until 30 April 2019, for
the period from 1 May 2019 until 30 October 2020 the Executive compensation and
position capacity was reduced to 50% (US$10,000) except for 3 months (May 2020 until
July 2020) in which the compensation was reduced by 25%, from 1 November 2020 the
Executive compensation and position capacity was increased to US$15,000 and 75%, plus
company leased car;
Reimbursement of reasonable business expenses incurred in the ordinary course of the
business in accordance with the Group’s reimbursement policies; and
This agreement may be terminated by either party with 30 days notice from Dr Michael
Shtein and 3 months’ notice from the Company.
Executive gross salary of ILS 22,500 (~$6,998)* per month for 50% position, from 1 April
2019 until 31 August 2020 gross salary of ILS 27,000 (~$8,398)* per month for 60%
position except for 3 months (May 2020 until July 2020) in which the salary was reduced
by 25% and from 1 September 2020 gross salary of ILS 35,000 (~$10,886)* per month for
75% position. In addition, employee is entitled to full social benefits (Pension fund, study
fund and disability insurance) plus Company leased car from 1 December 2019;
Reimbursement of reasonable business expenses incurred in the ordinary course of the
business in accordance with the Group’s reimbursement policies; and
This agreement may be terminated by either party on 3 months’ notice.
Executive gross salary of ILS 34,000 (~$10,575)* per month for full time position, except
for 3 months (May 2020 until July 2020) in which the salary was reduced by 25%. In
addition, employee is entitled to full social benefits (Pension fund, study fund and
disability insurance) plus Company leased car or replacement benefit of ILS 2,750
(~$855)* per month;
One time bonus of ILS 15,000 on January 2020;
Effective August 12, 2020, sales commission of 0.5% of fully paid revenues from approved
customer for a total amount of up to ILS 100,000 for a full year, ILS 37,500 for 2020. The
commission structure includes additional terms such as commission cap per client and 2
year limitation on commission for each project;
This agreement may be terminated by either party on 3 month notice ; and
Reimbursement of reasonable business expenses incurred in the ordinary course of the
business in accordance with the Group’s reimbursement policies
In addition to the above appointed executives Mr Doron Eldar has been appointed as a director in Dotz Nano Ltd in Israel on
interim basis until a new CEO is appointed by the Company. His remuneration for this role is included in the fees received
for his role as Director of Dotz Nano Limited .
*Amounts stated in USD are based on the exchange rate at the date of the report.
12 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Remuneration Report (Audited)
On 25 September 2020, Mr Uzi Breier resigned as an Executive Director and CEO of the Group. The term of his Executive
Employment Agreement with Dotz Nano Limited prior to resignation were as follows:
Mr Uzi Breier (LTC
Lime Ltd)
•
•
•
•
•
Executive salary of US$240,000 per annum, plus company leased car.
Annual bonus of 25% of yearly salary based upon the performance targets established by
the Board (No bonus was payable for the year ended 31 December 2019); and
Reimbursement of reasonable business expenses incurred in the ordinary course of the
business in accordance with the Group’s reimbursement policies
This agreement may be terminated by either party on 6 months’ notice, but it is for a
minimum period of three years.
Sign-on-securities subject to shareholder approval as follows:
o
1,000,000 shares on 31 December 2019 as a retention bonus;
o
o
1,500,000 shares subject to a 12 month holding lock from the date of issue; and
2,000,000 unquoted options exercisable at AU$0.13 each and expiring 5 years from
issue.
The Service Agreement was terminated on 25 September 2020. At this date LTC Lime Ltd (“Service Provider”) by Mr Breier
and Dotz Nano Ltd entered into a Separation Agreement. The terms of the Separation Agreement were as follows:
• Mr Breier will be paid 6 months’ notice period on a monthly basis, an additional US$10,000 as total salary in the final
pay month (total payment is US$130,000 over six month period).
•
It was also agreed that the board of directors will recommend to the Company’s shareholders that Mr Breier be granted
the following options:
o
o
500,000 options, to be held in escrow until the lapse of 6 months from the Separation Date, for no exercise price
per each Option which will be fully vested upon grant and will expire on 31 December 2022; and
750,000 Options, subject to the Group receiving at least US$1 million under its agreement with Breathe Medical
Manufacturing Ltd, prior to 30 August 2021. These options will expire on 31 December 2022.
The grant of the above options is subject to shareholder approval which at the date of this report has not been obtained.
At this stage the Board does not consider the Group’s earnings- or earnings related measures to be an appropriate key
performance indicator (KPI). In considering the relationship between the Group’s remuneration policy and the consequences
for the Company’s shareholder wealth, changes in share price are analysed as well as measures such as successful
completion of business development and corporate activities.
Performance Conditions Linked to Remuneration
The Group has established and maintains Dotz Nano Limited Employee Incentive Option Plan (Plan) to provide ongoing
incentives to Eligible Participants of the Company. Eligible Participants include:
•
•
•
•
a Director (whether executive or non-executive) of any Group Company;
a full or part time employee of any Group Company;
a casual employee or contractor of a Group Company; or
a prospective participant, being a person to whom the Offer was made but who can only accept the Offer if
arrangement has been entered into that will result in the person becoming an Eligible Participant.
The Board adopted the Plan to allow Eligible Participants to be granted Options to acquire shares in the Company.
The purpose of the Plan is to assist in the reward and motivation of Eligible Participants and link the reward of Eligible
Participants to performance and the creation of Shareholder value. It is designed to align the interest of Eligible Participants
more closely to the interests of Shareholders by providing an opportunity for Eligible Participants to receive shares. It
provides the Eligible Participants with the opportunity to share in any future growth in value of the Company and provides
greater incentives for Eligible Participants to focus on the Company’s longer-term goals. During the year ended 31 December
2020 a total of 17,950,000 options have been issued under this plan (2019: 4,210,000 options).
13 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Remuneration Report (Audited)
4. Non-executive Director fee arrangements
The Board policy is to remunerate Non-executive Directors at a level to comparable companies for time, commitment, and
responsibilities. Non-executive Directors may receive performance related compensation. Directors’ fees cover all main
Board activities and membership of any committee. The Board has no established retirement or redundancy schemes in
relation to Non-executive Directors.
The maximum aggregate amount of fees that can be paid to Non-executive Directors is presently limited to an aggregate of
AU$500,000 per annum and any change is subject to approval by shareholders at the General Meeting. Fees for Non-
executive Directors are not linked to the performance of the Company. However, to align Directors’ interests with
shareholder interests, the Directors are encouraged to hold shares in the Company. Total fees for the Non-Executive
Directors for the financial year were $185,183 (2019: $195,946) and cover main Board activities only. Non-executive
Directors may receive additional remuneration for other services provided to the Group.
14 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Remuneration Report (Audited)
5. Details of Remuneration
* Other includes benefits such as car lease, fuel and etc paid to KMP.
354,819
1,313,265
31-Dec-20
Directors:
Bernie Brookes1
Uzi Breier2
Doron Eldar3
Ian Pamensky4
James Cotton5
John Bullwinkel6
Ashley Krongold7
Key management:
Michael Shtein
Tomer Segev
Yoni Engle
Total
31-Dec-19
Directors:
Uzi Breier
Volker Mirgel8
John Bullwinkel9
Steve Bajic10
Ashley Krongold
Key management:
Michael Shtein
Avigdor Kaner
Tomer Segev11
Yoni Engle12
Total
Short Term
Salary, Fees &
Commissions
Post-
Employment
Superannuation
Other*
Share-based
payments
Total
Performance
based
remuneration
US$
US$
US$
US$
US$
-
-
19,694
10,401
102,066
222,187
57,231
4,142
5,178
8,630
7,888
194,585
138,633
157,402
897,942
-
-
-
-
-
-
-
-
-
-
-
237,470
100,000
34,765
1,414
34,768
160,046
110,917
116,007
26,335
821,722
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,335
17,049
2,426
60,504
-
-
-
21,328
17,038
3,628
427
92,928
Short Term
Salary, Fees &
Commissions
US$
Post-
Employment
Superannuation
US$
Other*
Share-based
payments
US$
US$
25,507
25,000
197,185
34,593
102,066
252,282
57,231
4,142
5,178
8,630
7,888
365,830
252,936
257,082
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Total
US$
460,162
159,593
34,765
1,414
34,768
260,915
171,669
182,750
29,611
Performance
based
remuneration
0%
0%
0%
0%
0%
0%
5.68%
0%
0%
-
-
-
-
-
149,910
97,254
97,254
-
-
-
79,541
43,714
63,115
2,849
420,997
1,335,647
* Other includes termination benefits to Volker Mirgel US$25,000 and other benefits such as car lease, fuel and etc paid to KMP.
1 Appointed 15 January 2020
2 Resigned 25 September 2020, this amount includes $63,756 relating to post termination. The terms of the Separation Agreement are detailed in Section 3.
3 Appointed 15 January 2020
4 Appointed 25 September 2020
5 Appointed 16 November 2020
6 Resigned 23 March 2020
7 Resigned 23 March 2020
8 Resigned 1 December 2019
9 Resigned 23 March 2020
10 Resigned 15 January 2019
11 Appointed 22 January 2019
12 Appointed 1 November 2019
15 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Remuneration Report (Audited)
6. Additional disclosures relating to equity instruments
KMP Shareholdings
The number of ordinary shares in Dotz held by each KMP of the Group during the financial year is as follows:
31-Dec-20
Directors:
Bernie Brookes
Uzi Breier*
Doron Eldar
Ian Pamensky
James Cotton
John Bullwinkel*
Ashley Krongold*
Key management:
Michael Shtein
Tomer Segev
Yoni Engle
Total
Balance at the start
of the year
Granted as
Remuneration
during the year
Issued on
exercise of
options during
the year
Other changes
during the year
Balance at
end of Year
-
2,500,000
-
-
-
-
1,875,032
2,446,201
-
-
6,821,233
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,700,000
-
495,000
3,195,000
625,000
-
277,778
-
-
-
-
-
-
-
625,000
2,500,000
277,778
-
-
-
1,875,032
5,146,201
-
495,000
902,778
10,919,011
* Balances are at resignation date.
Options awarded, vested and lapsed during the year
The table below discloses the number of share options granted, vested or lapsed during the year.
Share options do not carry any voting or dividend rights and can only be exercised once the vesting conditions have been
met, until their expiry date.
KMP Options Holdings
The number of options over ordinary shares held by each KMP of the Group during the financial year is as follows:
31-Dec-20
Directors:
Bernie Brookes
Uzi Breier*(a)
Doron Eldar**
Ian Pamensky
James Cotton
John Bullwinkel*
Ashley Krongold*
Key management:
Michael Shtein
Tomer Segev
Yoni Engle
Total
Balance at
the start of
the year
Granted as
remuneration
during the
year***
Exercised
during the
year
Other
changes
during the
year
Balance at
the end of
the year
Vested
and
exercisable
Vested
and un-
exercisable
-
2,000,000
-
-
-
-
-
2,700,000
1,000,000
495,000
6,195,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,000,000
3,000,000
3,000,000
10,000,000
(2,700,000)
-
(495,000)
(3,195,000)
-
-
92,593
-
-
-
-
-
-
-
92,593
-
2,000,000
92,593
-
-
-
-
4,000,000
4,000,000
3,000,000
13,092,593
-
2,000,000
92,593
-
-
-
-
-
1,000,000
-
3,092,593
-
-
-
-
-
-
-
-
-
-
-
* Balance at resignation date
** Balances are at appointment date.
*** Refer to note 16 Share Based Payment for details
(a) In the Separation Agreement there are also unissued options subject to shareholder approval which are detailed in Section 3.
16 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Remuneration Report (Audited)
KMP performance rights holdings
No performance rights were on issue as at 31 December 2020, (2019: 22,000,000). During the financial year ended 31
December 2020, 22,000,000 performance rights expired.
KMP performance shares holdings
The number of performance shares held by each KMP of the Group during the financial year is as follows:
31-Dec-20
Directors:
Bernie Brookes
Uzi Breier
Doron Eldar
Ian Pamensky
James Cotton
John Bullwinkel
Ashley Krongold
Key management:
Michael Shtein
Tomer Segev
Yoni Engle
Total
Balance at
the start of
the year
Granted as
Remuneration
during the year
Other changes
during the
year*
Balance at
end of Year
-
-
-
-
-
-
544,946
815,401
-
-
1,360,347
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(544,946)
(815,401)
-
-
(1,360,347)
-
-
-
-
-
-
-
-
-
-
* Other changes includes performance shares expired during the year.
7.
Loans to key management personnel (KMP) and their related parties
There were no loans made to key management personnel during the financial year (2019: nil).
17 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ REPORT
Remuneration Report (Audited)
8. Other transactions and balances with KMP and their related parties
Purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. The Group
acquired the following services from entities that are controlled by members of the group’s key management personnel.
Some Directors have held positions in other companies, where it is considered they control or significantly influence the
financial or operating policies of those entities. In the last financial year, the following entities provided company secretarial
and advisory services to the Group. Transactions between related parties are on normal commercial terms and conditions
no more favourable than those available to other parties unless otherwise stated.
Entity
Nature of transactions
Key
Management
Personnel
Total Transactions
Payable Balance
2020
US$
2019
US$
Ian Pamensky – CFO 2 Grow
Oxen 9 Ltd
Doron Eldar
Company secretarial
services
Advisory services
Travel expenses
Ian Pamensky
20,298
Doron Eldar
Doron Eldar
65,832
20,712
-
-
-
2020
US$
4,624
-
-
2019
US$
-
-
-
Mr Ian Pamensky was appointed as Non-Executive director of the Company on 25 September 2020. The amounts included
here relate to company secretarial fees since his appointment. The current company secretarial fees are AU$6,000 per
month.
Oxen 9 Ltd is related to Mr Doron Eldar, the amounts included in the above table relate to advisory services fees during the
year. The current monthly fees are AU$8,000 per month.
The amounts included for Doron Eldar relate to reimbursed travel expenses for Mr Doron Eldar and family.
9. Voting of shareholders at last year’s annual general meeting (AGM)
At the AGM held on 10 June 2020, 99.36% of the votes received supported the adoption of the remuneration report for the
year ended 31 December 2019. The company did not receive any specific feedback at the AGM regarding its remuneration
practices.
REMUNERATION REPORT (END)
Signed in accordance with a resolution of the Board of Directors.
Bernie Brookes
Chairman & Interim CEO
31 March 2021
18 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY ASHLEIGH WOODLEY TO THE DIRECTORS OF DOTZ NANO
LIMITED
As lead auditor of Dotz Nano Limited for the year ended 31 December 2020, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Dotz Nano Limited and the entities it controlled during the period.
Ashleigh Woodley
Director
BDO Audit (WA) Pty Ltd
Perth, 31 March 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
Revenue from contracts with customers
Cost of Sales
Gross profit
Research and development expenses
General, administrative, selling and marketing expenses
Share based compensation
Finance costs
Loss before income tax
Income tax expense
Loss for the year
Note
2
3
3
16
4
2020
US$
375,811
(264,881)
110,930
(634,112)
(2,119,086)
(1,392,484)
65,756
2019
US$
33,731
(21,041)
12,690
(784,844)
(2,215,927)
(731,308)
(27,175)
(3,968,996)
(3,746,564)
-
-
(3,968,996)
(3,746,564)
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
15
322,180
(26,880)
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
-
-
(3,646,816)
(3,773,444)
Basic loss per share (cents per share)
7
(1.24)
(1.72)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
20 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
Inventory
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Right-of-use assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
Contract liability
Lease liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Lease liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
SHAREHOLDERS’ EQUITY
Issued capital
Reserves
Accumulated losses
SHAREHOLDERS’ EQUITY
Note
8(a)
9
9
11
10
12
10
13
10
14
15
2020
US$
5,259,087
189,478
28,360
14,475
2019
US$
1,371,275
144,592
34,141
4,312
5,491,400
1,554,320
-
214,958
47,845
262,803
27,914
283,239
174,663
485,816
5,754,203
2,040,136
428,797
38,685
33,757
39,332
540,571
-
7,736
7,736
270,432
28,967
-
148,325
447,724
257,481
35,266
292,747
548,307
740,471
5,205,896
1,299,665
28,971,254
3,589,759
22,627,901
2,057,885
(27,355,117)
(23,386,121)
5,205,896
1,299,665
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
21 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED SATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Issued Capital
Option
Reserve
US$
US$
Foreign
Currency
Reserve
US$
Accumulated
Losses
US$
Total
US$
Balance at 1 January 2019
18,762,675
1,626,095
(17,731)
(19,639,557)
731,482
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
Transactions with owners,
recognised directly in equity
Issue of shares (net of cost)
Share based payments
-
-
-
3,597,954
267,272
-
-
-
-
476,401
-
(3,746,564)
(3,746,564)
(26,880)
-
(26,880)
(26,880)
(3,746,564)
(3,773,444)
-
-
-
-
3,597,954
743,673
Balance at 31 December 2019
22,627,901
2,102,496
(44,611)
(23,386,121)
1,299,665
Balance at 1 January 2020
22,627,901
2,102,496
(44,611)
(23,386,121)
1,299,665
Loss for the year
-
Other comprehensive income
Total comprehensive loss for the
year
Transactions with owners,
recognised directly in equity
Issue of shares (net of cost)
Exercise of options
Share based payments
4,844,368
1,316,195
182,790
Balance at 31 December 2020
28,971,254
-
-
-
1,209,694
3,312,190
-
(3,968,996)
(3,968,996)
322,180
-
322,180
322,180
(3,968,996)
(3,646,816)
-
-
-
-
-
-
277,569
(27,355,117)
4,844,368
1,316,195
1,392,484
5,205,896
The above Consolidated Statements of Changes in Equity should be read in conjunction with the accompanying notes.
22 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED SATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest paid
Interest received
Note
2020
US$
2019
US$
394,461
34,792
(2,828,359)
(2,659,687)
(14,228)
459
(42,917)
428
Net cash used in operating activities
8 (b)
(2,447,667)
(2,667,384)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment
Acquisition of investments
Payment for intellectual property
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Net Proceeds for the issue of shares
Proceeds from exercise of options
Grants from BIRD
Repayment of the lease liabilities
Net cash from financing activities
10
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Foreign exchange
Cash and cash equivalents at the end of the financial year
8(a)
(20,168)
-
-
(20,168)
4,835,041
1,320,281
-
(144,896)
6,010,426
3,542,591
1,371,275
345,221
5,259,087
(34,739)
25,225
(15,000)
(24,514)
3,597,954
-
43,484
(100,165)
3,541,273
849,375
508,572
13,328
1,371,275
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
23 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
These consolidated financial statements cover Dotz Nano Limited (Company) and its controlled entities as a consolidated
entity (also referred to as Group). Dotz Nano Limited is a company limited by shares, incorporated and domiciled in Australia.
The Group is a for-profit entity.
The financial statements were issued by the board of directors of the Company on 31 March 2021.
The following is a summary of the material accounting policies adopted by the consolidated entity in the preparation and
presentation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation of the financial report
a) Statement of Compliance
These financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards (AASBs) (including Australian interpretations) adopted by the Australian Accounting
Standard Board (AASB) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the Australian Accounting Standards Board has concluded
would result in financial statements containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with
International Financial Reporting Standards.
b) Adoption of new and amended accounting standards
The Group has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its
operations and effective for annual reporting periods beginning on or after 1 January 2020. It has been determined by the
Group that there is no impact, material or otherwise, of the new and revised standards and interpretations on its business
and therefore no change is necessary to Group accounting policies. No retrospective change in accounting policy of material
reclassification has occurred during the year.
c) Principles of Consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31 December
2020. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if
and only if the Group has:
•
•
•
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
investee);
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts
and circumstances in assessing whether it has power over an investee, including:
•
•
•
The contractual arrangement with the other vote holders of the investee,
Rights arising from other contractual arrangements,
The Group’s voting rights and potential voting rights.
24 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
c) Principles of Consolidation (continued)
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group
gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent
of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line
with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating
to transactions between members of the Group are eliminated in full on consolidation.
A change in ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the
Group loses control over a subsidiary, it:
•
•
•
•
•
•
De-recognises the assets (including goodwill) and liabilities of the subsidiary
De-recognises the carrying amount of any non-controlling interests
De-recognises the cumulative translation differences recorded in equity
Recognises the fair value of the consideration received
Recognises the fair value of any investments retained
Recognises any surplus or deficit in profit or loss
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings, as
appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.
d)
Income Tax
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore
measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as
well unused tax losses.
Current income tax expense charged to profit or loss is the tax payable on taxable income calculated using applicable income
tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the
amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as
well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of profit or loss when
the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have
been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit
or loss.
25 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d)
Income Tax (Continued)
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement
also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or
liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in
future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
e)
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and
requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets
and the arrangement conveys a right to use the asset.
Group as a lessee
Operating lease payments, where substantially all the risk and benefits remain with the lessor, are recognised as an expense
in the statement of profit or loss and other comprehensive income on a straight-line basis over the lease term. Operating
lease incentives are recognised as a liability when received and subsequently reduced by allocating lease payments between
rental expense and reduction of the liability.
Leases are recognised as a right-of-use asset and corresponding liability at the date at which the leased asset is available for
use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit
or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for
each period. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-
line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
•
•
•
•
•
Fixed payments (including in-substance fixed payments), less any lease incentives receivable
Variable lease payment that are based on an index or a rate
Amount expected to be payable by the lessee under residual value guarantees
The exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
Payments of penalties for termination the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s
incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain
an asset of similar value in a similar economic environment with similar terms and conditions.
26 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e)
Leases (Continued)
Right-of-use of assets are measured at cost comprising the following:
•
•
•
•
The amount of the initial measurement of lease liability
Any lease payments made at or before the commencement date less any lease incentives received
Any initial direct costs
Restoration cost
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short term leases are leases with a lease term of 12 months or less. Low-value asset comprise IT
equipment and small items of office furniture.
f)
Financial Instruments
Initial recognition and measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a
party to the contractual provisions of the instrument.
Financial instruments are initially measured at fair value plus transaction costs where the instrument is not classified as at
fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss
are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.
Classification and subsequent measurement
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to
determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar
instruments and option pricing models.
(i) Financial Assets
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss
(ii) Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is
derecognised.
Derivative instruments
The Group does not trade or hold derivatives.
Financial guarantees
The Group has no material financial guarantees.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a financial asset has been
impaired. An impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred
‘loss event’) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that
can be reliably estimated. Evidence of impairment may include indications that the debtor or a group of debtors is
experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that
they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable
decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
27 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
f)
Financial Instruments (Continued)
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flow expires or the asset is transferred to
another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated
with the asset.
Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The
difference between the carrying value of the financial liability extinguished or transferred to another party and the fair
value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
g)
Impairment of non-financial assets
At the end of each reporting period, the Directors assesses whether there is any indication that an asset may be impaired.
The assessment will include the consideration of external and internal sources of information, including dividends received
from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profits.
If any such indication exists, an impairment test is carried out on the asset by comparing the asset’s recoverable amount,
being the higher of its fair value less costs to sell and its value in use, to the asset’s carrying amount. Any excess of the
asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss. Where it is not possible to
estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash
generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
h)
Intangible assets
Acquired intangible assets are measured on initial recognition at cost including directly attributable costs. Intangible assets
acquired in a business combination are measured on initial recognition at fair value at the acquisition date.
Intangible assets with a finite useful life are amortised over their useful life and reviewed for impairment whenever there is
an indication that the assets may be impaired. The amortisation period and the amortisation method for an intangible asset
are reviewed at least at each year end.
Intangible assets with indefinite useful lives are not systematically amortised and are tested for impairment annually or
whenever there is an indication that the intangible assets may be impaired. The useful life of these assets is reviewed
annually to determine whether their indefinite life assessment continued to be supportable. If the events and circumstances
do not continue to support the assessment, the change in the useful life assessment from indefinite to finite is accounted
for prospectively as a change in accounting estimate and on that date the asset is tested for impairment. The intangible
assets are considered to be with indefinite useful life.
i)
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks with original maturity of three
months or less.
28 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
j)
Revenue and other income
Revenue from contracts with customers
The Group provides anti-counterfeiting and brand-protection solution to various customers as agreed per terms agreed in
individual contracts.
The revenue associated with anti-counterfeiting and brand-protection solution is recognised in accordance with AASB 15,
that is in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the Group is expected to be entitled in exchange for those goods or services. Revenue from
customer contracts is recognised upon satisfaction of a performance obligation under those contracts either over time or
a point in time when control passes the customer under those contracts.
The Group has no material contracts where the period between the transfer of the promised goods or services to the
customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the
transaction prices for the time value of money.
Contract assets and liabilities
AASB 15 uses the terms "contract asset" and "contract liability" to describe what is commonly known as "accrued revenue"
and "deferred revenue." Deferred revenue arises where payment is received prior to work being performed and is
allocated to the performance obligations within the contract and recognised on satisfaction of the performance obligation.
Contract fulfilment costs
Costs generally incurred prior to the commencement of a contract may arise due to setup costs as these costs are incurred
to fulfil a contract. Where the costs are expected to be recovered, they are capitalised and expensed over the period of
revenue recognition. Where the costs, or a portion of these costs, are reimbursed by the customer, the amount received
is recognised as deferred revenue.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
k) Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.
l) Goods and Services Tax (GST) and Value Added Tax (VAT)
Revenues, expenses, and assets are recognised net of the amount of GST or VAT, except where the amount of GST or VAT
incurred is not recoverable from the Australian Tax Office (ATO) and Israel Tax Authority (ITA).
Receivable and payables are stated inclusive of the amount of GST or VAT receivable or payable. The net amount of the
GST or VAT recoverable from, or payable to, the ATO or ITA is included with other receivables and payables in the statement
of financial position.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST or VAT component of investing
and financing activities, which are disclosed as operating cash flows.
29 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
m) Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment over their
expected useful lives.
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group.
Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
n) Research and development
Expenditure on research activities is recognised in profit or loss as incurred. Development expenditure is capitalised only
if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future
economic benefits are probable, and the Company intends to and has sufficient resources to complete development and
to use or sell the asset. Otherwise, it is recognised in profit or loss as incurred.
o) Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to the end
of the reporting period. Employee benefits that are expected to be settled within 12 months have been measured at the
amounts expected to be paid when the liability is settled. Employee benefits payable later than 12 months have been
measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the
liability, consideration is given to employee wages increases and the probability that the employee may satisfy any vesting
requirements. Those cash flows are discounted using market yields on national government bonds with terms to maturity
that match the expected timing of cash flows attributable to employee benefits.
Equity-settled compensation
The Group operates an employee share and option plan. Share-based payments to employees are measured at the fair
value of the instruments issued and amortised over the vesting periods. The fair value of performance right options is
determined using the satisfaction of certain performance criteria (Performance Milestones). The number of share option
and performance rights expected to vest is reviewed and adjusted at the end of each reporting period such that the amount
recognised for services received as consideration for the equity instruments granted is based on the number of equity
instruments that eventually vest. The fair value is determined using either a Black Scholes, Binominal or Monte Carlo
simulation model depending on the type of share-based payment.
p) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will result, and that outflow can be reliably measured. Provisions are
measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.
q) Equity and reserves
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. The option reserve records the value of
share-based payments.
30 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
r)
Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each entity within the Group is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in USA dollars which is
the Parent’s functional currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured
at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured
at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive
income to the extent that the underlying gain or loss is recognized other comprehensive Income; otherwise the exchange
difference is recognised in profit or loss.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s
presentation currency are translated as follows:
•
•
•
assets and liabilities are translated at year-end exchange rates prevailing at that reporting period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than USA dollars are
recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of
financial position. These differences are recognised in profit or loss in the period in which the operation is disposed.
s)
Segment Information
Identification of reportable segments
The Group has identified its operating segment based on the internal reports that are reviewed and used by the Board of
Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources.
The Group’s sole operating segment is consistent with the presentation of these consolidated financial statements.
t)
Earnings per share
Basic earnings per share is calculated by dividing:
•
•
the profit attributable to member of the parent entity, excluding any costs of servicing equity other than ordinary
shares
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements
in ordinary shares issued during the year (if any).
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
•
•
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
the weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
31 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
u) Critical Accounting estimates and judgements
The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based on
current trends and economic data, obtained both externally and within the Group.
Key Estimates and judgements
Revenue from contract with customer
The Group applied the following judgements that significantly affect the determination of the amount and timing of revenue
from contracts with customers:
Identifying performance obligations
The Group provides marking units, being the marker technology implemented as a sticker or by embedding into a material;
to include an encrypted QR code and Carbon Dots based marker with detection capability all aimed for personal protective
equipment. The obligation is satisfied at a point in time which is the date of delivery of the product.
Determining amount to be recognised over time
Where contracts include multiple deliverables that are separate performance obligations, judgement is required in
determining the allocation of the transaction price to each performance obligation based on the stand-alone selling prices.
Where these are not directly observable, they are estimated based on expected cost-plus margin.
Share based payments
Share-based payments are measured at the fair value of goods or services received or the fair value of the equity instruments
issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date
the goods or services are received. The fair value of options is determined using either the Black-Scholes, Binominal or Monte
Carlo valuation models. The number of shares and options expected to vest is reviewed and adjusted at the end of each
reporting period such that the amount recognised for services received as consideration for the equity instruments granted
is based on the number of equity instruments that eventually vest.
Bird Grant Liability
Government grant liability reflects the grant received from the Bird Foundation. The grant is repayable upon the Group
commencing product commercialisation and generating revenue from sale of product, with repayments being based on 5%
of each dollar of revenue related to the grant’s sponsored development. The total repayment is based on the timing of the
repayment and ranges from the grant amount to 150% of the grant amount. As required by AASB 9 Financial Instruments,
the liability has been recognised at fair value on initial recognition and subject to management’s estimate of discount rate,
and the timing and quantity of future revenues. As the Company currently does not expect to generate revenues from the
development under this grant the fair value of the liability at reporting date was determined to be nil. The Company will
continue from time to time to evaluate the probability of revenue generation from the development made under this grant.
Lease term and discount rate used
In determining the lease term, management considers all facts and circumstances that create an economic incentive to
exercise option, or not exercise option a termination option. Extension options (or period after termination options) are only
included in the lease term if the lease is reasonably certain to be extended (or not terminated).
The determination of the Group’s discount rate is set by reference to the market yields at the end of the reporting period on
government bonds.
v) Change in presentation of consolidated statement of profit or loss
In the consolidated statement of profit or loss and other comprehensive income certain comparative balances have been
reclassified to ensure consistency with change to current presentation and classification.
32 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 2: REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue recognised at a point in time:
-
Revenue from contract with customers
Total revenue
2020
US$
375,811
375,811
2019
US$
33,731
33,731
The Group has recognised the following assets and liabilities related to contracts with customers:
-
Contract liabilities
33,757
-
There were no significant movements in contract assets or liabilities during the year.
NOTE 3: EXPENSES
Loss before income tax from continuing operations includes the following specific
expenses:
Research and development expenses
- Wages and benefits
-
-
-
-
Consulting fees
Lab expenses
Other R&D expenses
Fair value change in grant liability
General, administrative, selling and marketing expenses
- Wages and benefits
-
-
-
-
Consulting fees
Sales and marketing expenses
Director fees
Other expenses
2020
US$
2019
US$
(354,408)
(420,484)
(434,743)
(244,311)
(62,552)
(39,890)
257,481
(29,680)
(90,369)
-
(634,112)
(784,844)
(227,915)
(218,270)
(515,542)
(484,353)
(412,822)
(518,324)
(185,183)
(186,747)
(777,624)
(808,233)
(2,119,086)
(2,215,927)
NOTE 4: INCOME TAX
The financial accounts for the year ended 31 December 2020 comprise the results of Dotz Nano Limited (“Dotz Australia”)
and Dotz Nano Ltd (“Dotz Israel”). The legal parent is incorporated and domiciled in Australia where the applicable tax rate is
27.5% (2019: 27.5%). The applicable tax rate in Israel is 23% (2019: 23%).
(a) Income tax expense
Current tax
Deferred tax
2020
US$
-
-
2019
US$
-
-
33 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 4: INCOME TAX (CONTINUED)
2020
US$
2019
US$
(b) The prima facie tax payable on loss from ordinary activities before
income tax is reconciled to the income tax expense as follows:
Income tax benefit on operating loss at 27.5% (2019: 27.5%)
(1,091,474)
(1,030,305)
Non-deductible items
Non-deductible expenditure
Non-assessable income
Adjustment for difference in tax rates
Temporary differences not recognised
Income tax attributable to operating income/(loss)
The applicable weighted average effective tax rates are as follows:
Balance of franking account at year end
Deferred tax assets
Tax losses
Black hole expenditure
Unrecognised deferred tax asset
Set-off deferred tax liabilities
Net deferred tax assets
Less deferred tax assets not recognised
Net assets
Tax losses
676,188
225,255
113,494
301,792
-
Nil%
Nil
US$
408,062
114,427
522,489
-
522,489
(522,489)
-
106,117
698,933
-
Nil%
Nil
US$
674,966
87,137
762,103
-
762,103
(762,103)
-
Unused tax losses for which no deferred tax asset has been recognised
4,786,955
3,334,392
Carry forward losses
Potential future income tax benefits attributable to tax losses carried forward have not been brought to account at 31
December 2020, because the Directors do not believe it is appropriate to regard realisation of the future income tax benefits
as probable.
NOTE 5: RELATED PARTY TRANSACTIONS
a) Key Management Personnel Compensation
Details of key management personnel compensation are disclosed in audited remuneration reports and the totals of
remuneration paid to KMP during the year are summarised below:
Short-term salary, fees and commissions
Other
Share based payments
Total KMP Compensation
2020
US$
897,942
60,504
354,819
2019
US$
821,722
92,928
420,997
1,313,265
1,335,647
34 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 5: RELATED PARTY TRANSACTIONS
The Service Agreement with Mr Uzi Breier was terminated following his resignment on 25 September 2020. At this date LTC
Lime Ltd (“Service Provider”) by Mr Breier and Dotz Nano Ltd entered into a Separation Agreement. The terms of the
Separation Agreement were as follows:
• Mr Breier will be paid 6 months’ notice period on a monthly basis, an additional US$10,000 as total salary in the final
pay month (total payment is US$130,000 over six month period).
•
It was also agreed that the board of directors will recommend to the Company’s shareholders that Mr Breier be granted
the following options:
o
o
500,000 options, to be held in escrow until the lapse of 6 months from the Separation Date, for no exercise price
per each Option which will be fully vested upon grant and will expire on 31 December 2022; and
750,000 Options, subject to the Group receiving at least US$1 million under its agreement with Breathe Medical
Manufacturing Ltd, prior to 30 August 2021. These options will expire on 31 December 2022.
The grant of the above options is subject to shareholder approval which at the date of this report has not been obtained.
b) Other related party transactions
Details of other related party transactions is provided in remuneration report and summarised below:
Entity
Nature of
transactions
Key
Management
Personnel
Total Transactions
Payable Balance
2020
US$
2019
US$
Ian Pamensky – CFO 2 Grow
Oxen 9 Ltd
Doron Eldar
Company secretarial
services
Advisory services
Travel expenses
Ian Pamensky
20,298
Doron Eldar
Doron Eldar
65,832
20,712
-
-
-
2020
US$
4,624
-
-
2019
US$
-
-
-
NOTE 6: AUDITOR’S REMUNERATION
Remuneration of the auditor of the Group for:
-
-
Auditing and reviewing the financial reports (BDO) – Australia
Auditing and reviewing the financial reports (BDO) – Israel
Non-assurance services
-
-
Tax (BDO) – Australia
Tax (BDO) – Israel
NOTE 7: LOSS PER SHARE
(Loss) per share (EPS)
2020
US$
26,124
34,200
60,324
2,762
3,800
6,562
2020
US$
2019
US$
26,615
29,070
55,685
9,179
3,230
12,409
2019
US$
a)
Loss used in calculation of basic EPS and diluted EPS
(3,968,996)
(3,746,564)
b) Weighted average number of ordinary shares outstanding during the
year used in calculation of basic and diluted loss per share
319,518,815
218,410,831
35 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 8 a: CASH AND CASH EQUIVALENTS
Cash at bank
Total cash and cash equivalents in the statement of cash flows
NOTE 8 b: CASH FLOW INFORMATION
Loss after income tax
Non-cash flows in loss after income tax
Share based payment expense
Depreciation
Other
Amortisation of rights of use asset
Fair value movement in grant liability
Foreign exchange
Changes in assets and liabilities
Decrease/(Increase) in trade and other receivables
Decrease/(Increase) in prepayments
(Decrease)/Increase in payables
(Decrease)/Increase in payables in other payables
(Decrease)/Increase in unearned revenue
(Decrease)/Increase in payables in provisions
Decrease/(Increase) in inventory
Cash flow used in operating activities
Credit Standby Facilities
The Group has no credit standby facilities.
Non-Cash investing and financing activities
2020
US$
2019
US$
5,259,087
1,371,275
5,259,087
1,371,275
2020
US$
2019
US$
(3,968,996)
(3,746,564)
1,392,484
86,148
(2,631)
132,831
(257,481)
731,308
88,105
190,000
125,442
-
(15,220)
(22,719)
(19,605)
5,781
41,555
55,569
165,711
(16,040)
-
(124,244)
33,757
9,717
(10,163)
-
14,516
(4,312)
(2,447,667)
(2,667,384)
During the year ended 31 December 2020, there were no non-cash investing and financing activities.
NOTE 9: TRADE AND OTHER RECEIVABLES
CURRENT
Other receivables
NON-CURRENT
Other receivables
2020
US$
2019
US$
189,478
189,478
144,592
144,592
-
-
27,914
27,914
All amounts are short-term. The net carrying value of trade receivables is considered a reasonable approximation of fair
value.
36 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 10: RIGHT-OF-USE ASSETS & LEASE LIABILITIES
i.
AASB 16 related amounts recognised in the statement of financial position
Office space – right-of use
Motor vehicles – right-of-use
Net carrying amount
2020
US$
7,372
40,473
47,845
2019
US$
95,841
78,822
174,663
The group leases office space and vehicles. Rental contracts are typically made for a fixed period of 1-3 years, with extension
options available on the office lease. Lease terms are negotiated on an individual basis and contain a range of terms and
conditions. The lease agreements impose standard covenants such as mileage limitation, but leased assets may not be used
as security for borrowing purposes.
ii.
Lease liabilities included in the Statement of financial position
Current
Non-current
Total lease liabilities
iii.
AASB 16 related amounts recognised in the statement of profit or loss
Depreciation charge related to right-of-use assets
Interest expense on lease liabilities (under finance cost)
iv.
AASB 16 related amounts recognised in the statement of cash flows
Cash outflows in financing activities
Cash outflows in operating activities
39,332
148,325
7,736
35,266
47,068
183,591
132,830
125,442
11,418
37,079
144,896
100,165
11,418
42,499
156,314
142,664
Short -term leases and leases of low-value assets
The Group at the end of the year had non-material short-term leases.
The Group applies the low-value assets recognition exemption to leases of office equipment that are considered low value
($10,000 or less). Lease payments on short-term leases and leases of low-value assets are recognised as expense on straight-
line basis over the lease term.
NOTE 11: PLANT AND EQUIPMENT
Plant and equipment at costs
Accumulated depreciation
Opening balance at reporting date
Additions
Depreciation
Balance at the end of the year
2020
US$
2019
US$
529,920
512,053
(314,962)
(228,814)
214,958
283,239
283,239
17,867
(86,148)
214,958
322,592
48,752
(88,105)
283,239
37 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 12: TRADE AND OTHER PAYABLES
Trade and other payables
Accruals
All amounts are short-term. The carrying values are considered to approximate fair value.
NOTE 13: NON-CURRENT BORROWINGS
Grant at fair value
NOTE 14: ISSUED CAPITAL
(a) Share Capital
2020
US$
280,027
148,770
428,797
2019
US$
156,136
114,296
270,432
2020
US$
-
-
2019
US$
257,481
257,481
2020
US$
2019
US$
376,382,378 fully paid ordinary shares (31 December 2019: 295,004,274)
28,971,254
22,627,901
(b) Reconciliation of Share Capital
Opening balance at 1 January 2019
No.
US$
180,714,622
18,762,675
Shares issued on conversion of Convertible Loan on 15 February 2019
Shares issued to the CEO on 15 February 2019*
Shares issue on conversion of Convertible Loan on 19 February 2019
Shares issued under the Placement on 7 May 2019
Shares issued under the Placement on 8 May 2019
Shares issued under the Cleansing Prospectus on 8 May 2019
Shares issued in lieu of cash payment on 8 May 2019
Shares issued under the Placement on 29 July 2019
Shares issued under Cleansing Prospectus on 29 July 2019
Shares issued in lieu of cash payment on 12 September 2019
Exercised of unquoted options expiring on 1 October 2021
Shares issued to Lead Manager on 12 September 2019
Shares issued under Placement on 26 November 2019
Shares issued to Consultant on 8 December 2019
Shares issued to CEO on 31 December 2019
Shares issued under Cleansing Prospectus on 31 December 2019
Shares issued to Employee on vesting options on 31 December 2019
Less: capital raising fees
Closing balance at 31 December 2019
*Subject to voluntary holding lock until 15 February 2020
9,791,632
1,500,000
875,000
19,750,000
5,250,000
100
283,672
16,129,045
100
300,000
695,000
554,833
86,058
49,917
830,804
220,658
4
13,730
690,971
4
11,324
-
1,000,000
42,551
55,000,003
1,349,931
2,500,000
1,000,000
100
215,000
70,130
43,479
3
-
-
(99,171)
295,004,274
22,627,901
38 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 14: ISSUED CAPITAL (CONTINUED)
(b) Reconciliation of Share Capital
Opening balance at 1 January 2020
Shares issued on exercise of options, 10 February 2020
Shares issued on exercise of options, 10 February 2020
Shares issued under Cleansing Prospectus, 6 May 2020
No.
US$
295,004,274
22,627,901
347,977
500,000
100
-
-
4
Shares issued under Deferred Share Placement, 18 June 2020
13,888,889
342,250
Shares issued on exercise of options, 18 June 2020
Shares issued on exercise of options, 18 June 2020
Shares issued to Mr Uzi Breier, 18 June 2020
Shares cancelled relating to Mr Uzi Breier, 18 June 2020
Shares issued to former employee, 18 June 2020
Shares issued on exercise of options, 18 June 2020
Shares issued on exercise of options, 10 July 2020
Shares issued on exercise of options, 22 July 2020
Shares issued on exercise of options, 28 July 2020
Shares issued on exercise of options, 20 August 2020
Shares issued to Consultant, 20 August 2020
Shares issued on exercise of options, 3 September 2020
Shares issued on exercise of options, 3 September 2020
Shares issued under Deferred Share Placement, 10 September 2020
Shares issued on exercise of options, 10 September 2020
Shares issued on exercise of options, 25 September 2020
Shares issued on exercise of options, 8 October 2020
Shares issued on exercise of options, 28 October 2020
Shares issued under Placement, 28 October 2020
Shares issued on exercise of options, 12 November 2020
Less: capital raising fees
Closing balance at 31 December 2020
(c) Capital Management
1,200,000
1,500,000
1,000,000
(1,000,000)
1,000,000
1,000,000
50,000
425,000
208,334
1,125,001
1,500,000
80,648
495,000
13,888,889
803,299
2,662,635
1,000,000
12,790,443
-
-
58,183
(42,440)
-
-
2,952
26,693
13,107
69,508
177,581
5,294
-
363,651
52,218
156,150
64,404
872,878
25,068,000
4,443,303
1,843,889
52,991
-
(315,374)
376,382,378
28,971,254
Due to the nature of the Group’s activities, the Group does not have ready access to credit facilities, with the primary source
of funding being equity raisings. Therefore, the focus of the Group’s capital risk management is the current working capital
position against the requirements of the Group to meet research and development programs and corporate overheads. The
Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view
to initiating appropriate capital raisings as required. Any surplus funds are invested with major financial institutions.
(d) Performance Shares
The were no performance shares on issue as at 31 December 2020 (2019: 22,000,000), with the 22,000,000 performance
shares expiring during the financial year prior to performance milestones being met.
39 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 14: ISSUED CAPITAL (CONTINUED)
(e) Convertible Note
On 8 February 2019, shareholders approved the issue of 10,666,632 Ordinary Fully Paid Shares and 2,666,659 Unquoted
Options (exercisable at AU$0.12 each on or before 30 June 2020). The shares were issued on conversion of the Convertible
Loan Facility and accrued interest (Facility). No convertible notes were on issue during the current financial year.
NOTE 15: RESERVES
(a) Reserves
82,547,879 Option Reserve (31 December 2019: 91,224,527)
Foreign currency translation reserve
(b) Options Reserve
Opening balance at 1 January 2019
Issue of free attaching options on conversion of Convertible Loan on 15
February 2019
Issue of options to directors on 8 February 2019
Issue of options to employee on 8 February 2019
Issue of free attaching options on conversion of Convertible Loan on 19
February 2019
Issue of free attaching options under the Placement on 7 May 2019
Issue of free attaching options under the Placement on 8 May 2019
Issue of options to Lead Manager on 19 June 2019
Issue of free attaching options under the Placement on 29 July 2019
Broker options expired on 8 August 2019
Issue of options under Employees Share Option Plan on 22 August 2019
Employees Share Option Plan cancellation
Exercised options under Employees Share Option Plan
Issue of options to Lead Manager on 31 October 2019
Options expired on 31 October 2019
Issue of options to consultant on 3 December 2019
Issue of placement options
Conversion of options to shares on 31 December 2019
Option cancellation on 31 December 2019
Expired of Tranche 3 options under Employees Share Option Plan on 27
November 2018
Vested Tranche 1 options under Employees Share Option Plan on 21 January
2019 and 22 August 2019
Vested Tranche 2 options under Employees Share Option Plan on 27 November
2018
Vested Tranche 3 options under Employees Share Option Plan on 27 November
2018
2020
US$
2019
US$
3,312,190
2,102,496
277,569
(44,611)
3,589,759
2,057,885
No.
US$
40,325,000
1,626,095
2,447,909
-
3,000,000
1,000,000
218,750
9,875,005
2,625,000
5,000,000
8,064,526
(10,000,000)
210,000
(1,465,000)
(695,000)
10,000,000
(5,500,000)
10,000,000
18,333,337
(215,000)
(1,000,000)
(1,000,000)
-
-
-
103,780
31,676
-
-
-
122,302
-
-
849
(5,625)
-
26,110
-
14,344
-
-
-
-
30,823
138,232
13,910
Closing balance at 31 December 2019
91,224,527
2,102,496
40 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 15: RESERVES (CONTINUED)
(b) Options Reserve
Opening balance at 1 January 2020
Cancellation of options, 5 February 2020
Exercise of options, 10 February 2020
Cancellation of options, 10 February 2020
Cancellation of options, 20 April 2020
No.
US$
91,224,527
2,102,496
(6,000,000)
(847,977)
(652,023)
(2,425,000)
-
-
-
-
Issue of options, 11 May 2020 and 6 November 2020
16 (a)
750,000
14,675
Cancellation of options, 14 June 2020
Exercise of options, 18 June 2020
Cancellation of options, 18 June 2020
Issue of options, 18 June 2020
Issue of free attaching options, 18 June 2020
Cancellation of options, 30 June 2020
Exercise of options, 10 July 2020
Exercise of options, 22 July 2020
Exercise of options, 28 July 2020
Cancellation of options, 1 August 2020
Exercise of options, 20 August 2020
Issue of options, 20 August 2020
Issue of options, 20 August 2020
Exercise of options, 3 September 2020
Exercise of options, 10 September 2020
Issue of free attaching options under Deferred Placement, 10 September 2020
Exercise of options, 25 September 2020
Exercise of options, 8 October 2020
(5,000,000)
(3,700,000)
(210,000)
16 (b)
1,350,000
4,629,630
(2,666,659)
(50,000)
(425,000)
(208,334)
(1,500,000)
(1,125,001)
500,000
500,000
(575,648)
(803,299)
4,629,630
(2,662,635)
(1,000,000)
16 (f)
16 (g)
-
-
(859)
21,025
-
-
-
-
-
-
-
14,332
8,155
-
-
-
-
-
Issue of options to Lead Manager, 19 October 2020
5,000,000
487,979
Exercise of options, 28 October 2020
Issue of options under Employees Share Option Plan, 30 October 2020
Issue of options under Employees Share Option Plan, 30 October 2020
Issue of options under Employees Share Option Plan, 30 October 2020
Exercise of options, 12 November 2020
Issue of options, 12 November 2020
Issue of options, 12 November 2020
Vested value of consultant options issued 3 December 2019
16 (c)
16 (d)
16 (e)
16 (h)
16 (i)
(12,790,443)
6,650,000
5,650,000
5,650,000
(1,843,889)
100,000
400,000
-
-
350,163
192,032
59,944
-
17,761
12,006
32,481
Closing balance at 31 December 2020
82,547,879
3,312,190
41 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 15: RESERVES (CONTINUED)
(c) Foreign currency translation reserve
Opening balance
Difference arising on translation
Balance at the end of the year
2020
US$
(44,611)
322,180
277,569
2019
US$
(17,731)
(26,880)
(44,611)
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled
subsidiary.
NOTE 16: SHARE BASED PAYMENTS
The following new share-based payment arrangements existed at 31 December 2020:
a)
3,000,000 Distributor Options
3,000,000 Distributor Options were granted on 6 May 2020 with an exercise price of AU$0.048 per option expiring
on 6 May 2023, as per Distribution Agreement with Universal Exports Group. These options have been valued using
the Black and Scholes option valuation methodologies taking into account the terms and conditions upon which the
options were granted. The options are issued on quarterly basis and during the year 750,000 options were issued as
per the agreement.
b)
1,350,000 Consultant Options
1,350,000 Consultant Options were granted on 9 June 2020 with an exercise price of AU$0.07 per option expiring on
18 May 2022, as per Consulting Agreement. These options have been valued using the Black and Scholes option
valuation methodologies taking into account the terms and conditions upon which the options were granted.
c)
6,650,000 Employee Options
6,650,000 Employee Options were granted on 30 July 2020 with a nil exercise price expiring on 31 December 2022
and vesting on 30 June 2021 under the Company’s Employee Share Option Plan. These options have been valued
using market share price taking into account the terms and conditions upon which the options were granted,
additional detail follows at the end of the note in the summary of inputs.
d)
5,650,000 Employee Options
5,650,000 Employee Options were granted on 30 July 2020 with a nil exercise price expiring on 31 December 2022
and vesting on 31 December 2021 under the Company’s Employee Share Option Plan. These options have been
valued using market share price taking into account the terms and conditions upon which the options were granted,
additional detail follows at the end of the note in the summary of inputs.
e)
5,650,000 Employee Options
5,650,000 Employee Options were granted on 30 July 2020 with an exercise price of AU$0.20 expiring on 31
December 2023 and vesting on 31 December 2022 under the Company’s Employee Share Option Plan. These options
have been valued using the Black and Scholes option valuation methodologies taking into account the terms and
conditions upon which the options were granted.
f)
500,000 Advisor Options
500,000 Advisor Options were granted on 20 August 2020 with an exercise price of AU$0.12 per option expiring on
31 December 2022, as per Advisor Agreement. These options have been valued using the Black and Scholes option
valuation methodologies taking into account the terms and conditions upon which the options were granted.
42 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 16: SHARE BASED PAYMENTS (CONTINUED)
g)
500,000 Advisor Options
500,000 Advisor Options were granted on 20 August 2020 with an exercise price of AU$0.15 per option expiring on
31 December 2022, as per Advisor Agreement. These options have been valued using the Black and Scholes option
valuation methodologies taking into account the terms and conditions upon which the options were granted.
h)
100,000 Consultant Options
100,000 Consultant Options were granted on 16 October 2020 with an exercise price of AU$0.05 per option expiring
on 16 October 2022, as per Consulting Agreement. These options have been valued using the Black and Scholes
option valuation methodologies taking into account the terms and conditions upon which the options were granted.
i)
400,000 Consultant Options
400,000 Consultant Options were granted on 16 October 2020 with an exercise price of AU$0.30 per option expiring
on 16 October 2022, as per Consulting Agreement. These options have been valued using the Black and Scholes
option valuation methodologies taking into account the terms and conditions upon which the options were granted
j)
5,000,000 Advisor Options
5,000,000 Advisor Options were granted on 19 October 2020 with an exercise price of AU$0.375 expiring on 19
October 2023 and vesting immediately. These options have been valued using the Black and Scholes option valuation
methodologies taking into account the terms and conditions upon which the options were granted.
A summary of the inputs used in the valuation of the options and shares is as follows:
Options and Shares
Distributor
Options
Consultant
Options
Employee
Options
Employee
Options
Employee
Options
Advisor
Options
Advisor
Options
Financial year
Exercise price
2020
2020
AU$0.048
AU$0.070
2020
Nil
2020
Nil
2020
2020
2020
AU$0.020
AU$0.120
AU$0.150
Price at measurement
AU$0.045
AU$0.086
AU$0.160
AU$0.160
AU$0.160
AU$0.165
AU$0.165
Grant date
Vesting date
06-May-20
09-Jun-20
30-Jul-20
30-Jul-20
30-Jul-20
20-Aug-20
20-Aug-20
06-May-22
09-Jun-21
30-Jun-21
31-Dec-21
31-Dec-22
30-Jun-21
31-Dec-21
Expected volatility (i)
78%
80%
N/A
N/A
85%
85%
85%
Expiry date
06-May-23
18-May-22
31-Dec-22
31-Dec-22
31-Dec-23
31-Dec-22
31-Dec-22
Expected dividends
Risk free interest rate
N/A
0.25%
N/A
0.28%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.28%
0.26%
0.26%
Value per option or share
AU$0.0218
AU$0.0413
AU$0.160
AU$0.160
AU$0.085
AU$0.094
AU$0.085
Number of options
3,000,000
1,350,000
6,650,000
5,650,000
5,650,000
500,000
500,000
Total value in AUD
AU$65,400
AU$55,755 AU$1,064,000 AU$904,000 AU$480,250 AU$47,000 AU$42,500
Total value in USD
US$44,822
US$38,188
US$761,718 US$647,174 US$344,092 US$33,837 US$30,536
43 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 16: SHARE BASED PAYMENTS (CONTINUED)
A summary of the inputs used in the valuation of the options and shares is as follows:
Options and Shares
Financial year
Exercise price
Consultants
Options
Consultant
Options
Advisor
Options
2020
2020
2020
AU$0.050
AU$0.300
AU$0.375
Price at measurement
AU$0.290
AU$0.290
AU$0.280
Grant date
Vesting date
16-Oct-20
16-Oct-20
19-Oct-20
16-Oct-20
16-Jun-21
19-Oct-20
Expected volatility (i)
90%
90%
90%
Expiry date
Expected dividends
Risk free interest rate
16-Oct-22
16-Oct-22
19-Oct-23
N/A
0.13%
N/A
0.13%
N/A
0.13%
Value per option or share
AU$0.245
AU$0.132
AU$0.138
Number of options
Total value in AUD
Total value in USD
100,000
400,000
5,000,000
AU$24,500
AU$52,800
AU$688,000
US$17,761
US$38,388
US$487,949
(i) Volatility was calculated based on historical trading prices over relevant periods.
For the year ending 31 December 2020 a share-based payment expense of US$1,392,484 (2019: US$731,308) was
recognised in line with option vesting periods, in which US$36,861 was recognised as a vesting expense from options
issued in a prior period.
Share based compensation comprises of the following:
Vested options issued in prior reporting period
Option issued to distributors on 11 May 2020
Option issued to consultants on 18 June 2020
Shares issued to advisor on 20 August 2020
Option issued to advisor on 20 August 2020
Option issued to advisor on 20 August 2020
Option issued to advisors on 19 October 2020
Option issued to employees on 30 October 2020
Option issued to employees on 30 October 2020
Option issued to employees on 30 October 2020
Options issued to consultants on 12 November 2020
Options issued to consultants on 12 November 2020
2020
US$
36,861
14,675
21,025
177,581
14,332
8,155
487,949
350,163
192,032
59,944
17,761
12,006
1,392,484
44 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 16: SHARE BASED PAYMENTS (CONTINUED)
Share based compensation comprises of the following:
Shares issued to Uzi Breier on 15-Feb-19
Options issued to Uzi Breier on 15-Feb-19
Options issued to Volker Mirgel on 15-Feb-19
Options issued under the ESOP to Tomer Segev on 13-Feb-19
Options issued to lease manager on 19-Jun-19
Options issued under the ESOP to Inna Sasson on 22-Aug-19
Options issued to lease manager on 12-Sep-19
Shares issued to unrelated party in lieu of cash payment on 12-Sep-19
Shares issued to lead manager on 12-Sep-19
Options issued to Australian Strategic Consultant on 3-Dec-19
Shares issued to consultant on 8-Dec-19
Shares issued to Uzi Breier on 31-Dec-19
Options issued under the ESOP on 27-Nov-18
NOTE 17: OPERATING SEGMENTS
Segment Information
Identification of reportable segments
2019
US$
85,747
68,936
33,961
63,516
121,873
7,410
26,423
11,473
43,112
14,681
69,535
43,755
140,886
731,308)
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of
Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources.
The Group’s sole operating segment is consistent with the presentation of these consolidated financial statements.
NOTE 18: FINANCIAL INSTRUMENTS
Financial Risk Management Policies
The Group’s financial instruments consist mainly of deposits with banks, other debtors and accounts payable. The main
purpose of non-derivative financial instruments is to raise finance for Group’s operations.
Specific Financial Risk Exposures and Management
The main risk the Group is exposed to through its financial instruments are market risk (including fair value and interest rate
risk) and cash flow interest rate risk, credit risk and liquidity risk.
(a) Interest Rate Risk
From time to time the Group has significant interest-bearing assets, but they are as a result of the timing of equity raising
and capital expenditure rather than a reliance on interest income. The interest rate risk arises on the rise and fall of interest
rates. The Group’s income and operating cash flows are not expected to be materially exposed to changes in market interest
rates in the future and the exposure to interest rates is limited to the cash and cash equivalents balances.
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of
changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial
liabilities, is below:
45 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 18: FINANCIAL INSTRUMENTS (CONTINUED)
Floating
Interest
Rate
Non-interest
bearing
2020
Total
Floating
Interest
Rate
Non-interest
bearing
2019
Total
US$
US$
US$
US$
US$
US$
Financial assets
- Within one year
Cash and cash equivalents
5,259,087
-
5,259,087
1,371,275
-
1,371,275
Trade and Other receivables
-
24,923
24,923
-
11,228
11,228
Total financial assets
5,259,087
24,923
5,284,010
1,371,275
11,228
1,382,503
Weighted average interest rate
0.08%
0.08%
Financial Liabilities
- Within one year
Trade and other Payables
Other Liabilities
Lease liabilities
Bird Grant
Total financial liabilities
Weighted average interest rate
-
-
-
-
-
180,537
180,537
-
-
33,757
33,757
-
-
214,294
214,294
-
-
-
-
-
84,782
84,782
-
-
148,325
148,325
257,481
257,481
490,588
490,588
Net financial assets
5,259,087
(189,371)
5,069,716
1,371,275
(479,360)
891,915
Sensitivity Analysis
The following table illustrates sensitivities to the Consolidated Entity’s exposures to changes in interest rates. The table
indicates the impact on how profit and equity values reported at reporting date would have been affected by changes in the
relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the movement
in a particular variable is independent of other variables.
Movement in
Movement in
Profit
US$
Equity
US$
Year ended 31 December 2019
+/-1% in interest rates
9,364
9,364
Year ended 31 December 2020
+/-1% in interest rates
33,152
33,152
(b) Credit risk
The maximum exposure to credit risk is limited to the carrying amount, net of any provisions for impairment of those assets,
as disclosed in the Statement of Financial Position and notes to the financial statements.
Credit risk related to balances with banks and other financial institutions is managed by the Group in accordance with
approved Board policy. Such policy requires that surplus funds are only invested with counterparties with a Standard and
Poor’s rating of at least AA-. The following table provides information regarding the credit risk relating to cash and money
market securities based on Standard and Poor’s counterparty credit ratings.
46 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 18: FINANCIAL INSTRUMENTS (CONTINUED)
(b) Credit risk
Cash and cash equivalents - AA Rated
(c) Liquidity risk
Note
8a
2020
US$
2019
US$
5,259,087
1,371,275
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting
its obligations related to financial liabilities. The Group’s approach to managing liquidity is to ensure, as far as possible, that
it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash
flows.
The Group has no access to credit standby facilities or arrangements for further funding or borrowings in place. The financial
liabilities of the Group are confined to trade and other payables as disclosed in the Statement of Financial Position. All trade
and other payables are non-interest bearing and due within 12 months of the reporting date.
Interest
rate
2020
Less than 6
months
6-12
months
1-2
years
2-5 years
Over 5
years
Total
contractual
cash flows
US$
US$
US$
US$
US$
US$
Carrying
amount
assets/
(liabilities)
US$
Financial
liabilities at
amortised cost
Trade and other
payables
Lease liabilities
- Office lease
- Car lease
Bird Grant
N/A
(180,537)
-
-
12.95%
15.65%
N/A
(9,546)
(19,736)
-
(11,413)
-
(9,009)
-
-
-
-
(180,537)
(180,537)
(9,546)
(40,158)
-
-
(9,535)
(37,533)
-
Interest
rate
2019
Less than 6
months
6-12
months
1-2
years
2-5 years
Over 5
years
Total
contractual
cash flows
US$
US$
US$
US$
US$
US$
Carrying
amount
assets/
(liabilities)
US$
Financial
liabilities at
amortised cost
Trade and other
payables
Lease liabilities
- Office lease
- Car lease
Bird Grant1
N/A
(84,782)
-
-
-
12.95%
15.65%
N/A
(53,240)
(25,574)
-
(163,596)
(53,239)
(25,573)
-
(78,812)
(8,873)
(36,070)
-
(44,943)
-
(11,619)
(530,873)
(542,492)
-
-
-
-
-
(84,782)
(84,782)
(115,352)
(98,836)
(530,873)
(829,843)
(108,577)
(75,015)
(257,481)
(525,855)
1 Contractual cash outflow is dependent on the generation of revenue.
47 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 18: FINANCIAL INSTRUMENTS (CONTINUED)
(d) Net fair Value of financial assets and liabilities
Fair value estimation
Due to the short-term nature of the receivables and payables the carrying value approximates fair value.
The following table provides the level of the fair value hierarchy within which the disclosed fair value measurements are
categorised in their entirety and a description of the valuation technique(s) and inputs used:
Description
Fair Value Hierarchy
Level
Bird Grant
3
Valuation Technique(s)
Inputs Used
Income approach using
discounted cash flow
methodology
•
•
Company discount rate
Future expected royalty
payment
(e) Financial arrangements
The company had no other financial arrangements in place at 31 December 2020 based on the information available to the
current board.
(f) Currency risk
The currency risk is the risk that the value of financial instruments will fluctuate due to change in foreign exchange rates.
Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency
that is not the Company’s functional currency. The company is exposed to foreign exchange risk arising from various currency
exposures primarily with respect to the US Dollar (the functional currency), the New Israeli Shekel, the Australian Dollar, the
Swiss Franc and Euro.
The Company’s policy is not to enter into any currency hedging transactions.
2020
2019
Cash and cash equivalents
Foreign Currency
USD Equivalent
Foreign Currency
USD Equivalent
New Israeli Shekels
Australian Dollar
Swiss Franc
Euro
172,085
6,722,925
5,598
-
53,526
5,182,441
6,355
-
646,935
915,548
7,163
1,573
187,192
642,074
7,037
1,404
48 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 19: PARENT ENTITY FINANCIAL INFORMATION
The following information has been extracted from the books and records of the legal parent Dotz Nano Limited which have
been prepared in accordance with Australian Accounting Standards and the accounting policies as outlined in note 1.
(a)
Financial Position of Dotz Nano Limited
ASSETS
Current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
NET ASSETS
SHAREHOLDERS’ EQUITY
Issued capital
Reserves
Accumulated Losses
SHAREHOLDERS’ EQUITY
2020
US$
4,751,383
4,751,383
102,338
102,338
4,649,045
2019
US$
1,385,967
1,385,967
86,303
86,303
1,299,664
344,252,452
3,442,038
(343,045,445)
4,649,045
337,962,811
1,824,716
(338,487,863)
1,299,664
(b) Statement of profit or loss and other comprehensive income
Loss for the year
Total comprehensive loss
(4,557,582)
(4,557,582)
(3,732,780)
(3,732,780)
(c) Guarantees entered into by Dotz Nano Limited for the debts of its subsidiary
There are no guarantees entered into by Dotz Nano Limited (2019: Nil).
(d) Contingent liabilities of Dotz Nano Limited
The Company’s subsidiary Dotz Nano Ltd has a contingent liability related to the grant received from BIRD. As stated
under Note 1 the company currently does not expect to generate revenues from the development made under this
grant. As the liability is contingent on royalty payments on developed products, should this assumption change
the Company will be required to pay royalties to BIRD ).
(e) Commitments by Dotz Nano Limited
Known commitments as at 31 December 2020 are disclosed in the consolidated entities in Note 21 below (2019: Nil).
NOTE 20: CONTROLLED ENTITIES
Controlled entity
Dotz Nano Ltd
Country of
Incorporation
Israel
Dotz Nano Singapore PTE Ltd*
Singapore
*De-registration during the financial year
NOTE 21: COMMITMENT
Percentage Owned
2020
100%
-
2019
100%
100%
The Group has no commitments which are not recorded on the statement of financial position as at 31 December 2020.
49 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 22: CONTINGENT LIABILITIES
The Company has a contingent liability related to the grant received from BIRD. As stated under Note 1 the company
currently does not expect to generate revenues from the development made under this grant. As the liability is contingent
on royalty payments on developed products, should this assumption change the Company will be required to pay royalties
to BIRD (2019: Nil).
NOTE 23: EVENTS SUBSEQUENT TO REPORTING DATE
Since the reporting date the following significant events have occurred:
•
•
•
•
The Company’s securities were suspended from trading on the ASX from 20 November 2020 to 15 March 2021 to
finalise an agreement with Caerus Therapeutics Inc and respond to queries from the ASX. The responses to the ASX
queries were announced on 1 March and 12 March 2021.
The Company entered into an amended service agreement with Caerus Therapeutics Inc to facilitate the
development and commercialisation of the Company’s Rapid SARS-CoV-2 Diagnostic kit (the “Dotz Test Kit”). The
terms of the agreement are incorporated as part of the Group announcement made on 1 March 2021.
On 25 January 2021, the Company obtained authorization to use the CE mark for its Dotz Test Kits in respect of
nasopharyngeal swab samples. The CE mark authorisation clears the Dotz Test Kit for sale in the European Union
(although it is notes that some countries in the European Union have additional import regulatory requirements that
Dotz will still need to comply with if it indents to sell the Dotz Test Kits in those countries).
On 22 March 2021, the Company obtained authorization for its Dotz Test Kits in respect of saliva samples. The CE
mark authorisation clears the saliva-based diagnostic Dotz Test Kits for sale in the European Union (although it is
notes that some countries in the European Union have additional import regulatory requirements that Dotz will still
need to comply with if it indents to sell the Dotz Test Kits in those countries).
Other than these matters, no matters have arisen since the end of the financial year to the date of this report of a material
and unusual nature likely, in the opinion of the Directors, to affect significantly the operations of the Group, the results of
those operations, or the state of affairs of the Group in future financial years.
NOTE 24: NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS
There are no Australian accounting standards and Interpretations that have recently been issued or amended but are not
yet effective and have not been adopted by the Group for the year ended 31 December 2020 which are expected to have a
material impact on the Group in future reporting.
50 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
DIRECTORS’ DECLARATION
In the Director’s opinion:
1.
The consolidated financial statements and notes set out on pages 20 to 50 are in accordance with the Corporations
Act 2001, including:
a)
complying with Australian Accounting Standards and Corporations Regulations 2001;
b) giving a true and fair view, the consolidated entity’s financial position as at 31 December 2020 and of its
performance for the year ended on that date; and
2.
3.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
This declaration has been made after receiving the declaration required to be made to the directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 31 December 2020.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
Directors by:
Bernie Brookes AM
Non-Executive Chairman
31 March 2021
51 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Dotz Nano Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Dotz Nano Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 31 December 2020, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, 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:
(i)
Giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its
financial performance for the year ended on that date; and
(ii)
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 Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (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 confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Accounting for Share-Based Payments
Key audit matter
How the matter was addressed in our audit
During the financial year ended 31
December 2020, the Group issued equity
instruments, in the form of shares and
options, to eligible directors, employees
and other consultants, which have been
accounted for as share-based payments, as
disclosed in 16 to the financial report.
The Group’s policy for accounting for
share-based payments and significant
judgements applied to these arrangements
are disclosed in Note 1(u).
Share-based payments are a complex
accounting area and due to the complex
and judgemental estimates used in
determining the fair value of share-based
payments, we consider the Group’s
accounting for share-based payments to be
a key audit matter.
Our audit procedures in respect of this area included
but were not limited to the following:
• Reviewing relevant supporting documentation
to obtain an understanding of the contractual
nature and terms and conditions of the share-
based payment arrangements;
• Reviewing management’s determination of the
fair value of the share-based payments
granted, considering the appropriateness of the
valuation models used and assessing the
valuation inputs;
•
Involving our valuation specialists to assess the
assumptions and inputs used in the valuation;
• Assessing the allocation of the share-based
payment expense over management’s expected
vesting period; and
•
Assessing the adequacy of the disclosure in
Note 1(u) and Note 16 in the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2020, but does not include
the financial report and the 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. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group 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 has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 18 of the directors’ report for the
year ended 31 December 2020.
In our opinion, the Remuneration Report of Dotz Nano Limited, for the year ended 31 December 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Ashleigh Woodley
Director
Perth, 31 March 2021
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance Statement is current as at 31 March 2021 and has been approved by the Board of the Company.
A description of the Group’s main corporate governance practices is set out below. All these practices, unless otherwise
stated, were in place and complied with all the ASX Corporate Governance Principles and Recommendations 3rd edition
(Principles and Recommendations) for the entire year ending 31 December 2020 (reporting period).
Although the 4th edition of the ASX Corporate Governance Principles and Recommendations is not required to be reported
against until the financial year ending 30 June 2021, the Company has early adopted, such that it was compliant with the 4th
edition from 1 July 2019.
The Company has adopted Corporate Governance Policies (Corporate Governance Plan) which provide written terms of
reference for the Company’s corporate governance practices and has been following these practices since 1 July 2016. The
Board of the Company has not yet formed an audit committee, nomination committee, risk management committee or
remuneration committee.
During 2021, the Company reviewed its Corporate Governance policies and charters with a view to ensuring the Company’s
Corporate Governance is fit for purpose and reflects the Company’s strategies and development plans. This included
adopting a new Continuous Disclosure Policy in December 2020
The Company’s Corporate Governance Policies are contained within the Corporate Governance Plan and available on the
Company’s website at https://www.dotz.tech/investors/
Principle 1: Lay solid foundations for management and oversight
Roles of the Board & Management
The role of the Board is to provide overall strategic guidance and effective oversight of management. The Board derives its
authority to act from the Company’s Constitution.
The Board is responsible for and has the authority to determine all matters relating to the strategic direction, policies,
practices, establishing goals for management and the operation of the Company. The Board delegates responsibility for the
day-to-day operations and administration of the Company to the Managing Director/Chief Executive Officer.
The role of management is to support the Managing Director/Chief Executive Officer and implement the running of the
general operations and financial business of the Company, in accordance with the delegated authority of the Board.
In addition to matters it is expressly required by law to approve, the Board has reserved the following matters to itself:
•
•
•
Driving the strategic direction of the Company, ensuring appropriate resources are available to meet objectives and
monitoring management’s performance;
Appointment, and where necessary, the replacement, of the Managing Director/Chief Executive Officer and other
senior executives and the determination of their terms and conditions including remuneration and termination;
Approving the Company’s remuneration framework;
• Monitoring the timeliness and effectiveness of reporting to Shareholders;
•
•
•
•
•
Reviewing and ratifying systems of audit, risk management and internal compliance and control, codes of conduct and
legal compliance to minimise the possibility of the Company operating beyond acceptable risk parameters;
Approving and monitoring the progress of major capital expenditure, capital management and significant acquisitions
and divestitures;
Approving and monitoring the budget and the adequacy and integrity of financial and other reporting such that the
financial performance of the company has sufficient clarity to be actively monitored;
Approving the annual, half yearly and quarterly accounts;
Approving significant changes to the organisational structure;
56 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CORPORATE GOVERNANCE STATEMENT
•
•
•
•
Approving decisions affecting the Company’s capital, including determining the Company’s dividend policy and
declaring dividends;
Ensuring a high standard of corporate governance practice and regulatory compliance and promoting ethical and
responsible decision making;
Procuring appropriate professional development opportunities for Directors to develop and maintain the skills and
knowledge needed to perform their role as Directors effectively;
Ensuring that the Company acts legally and responsibly on all matters and assuring itself that the Company has
adopted, and that its practice is consistent with, a number of guidelines including:
Corporate Code of Conduct;
Continuous Disclosure Policy;
Diversity Policy;
Performance Evaluation;
Risk Management;
Trading Policy;
Shareholder Communication Strategy; and
−
−
−
−
−
−
−
− Whistleblower Policy.
Subject to the specific authorities reserved to the Board under the Board Charter, the Board delegates to the Managing
Director/Chief Executive Officer responsibility for the management and operation of the Company. The Managing
Director/Chief Executive Officer is responsible for the day-to-day operations, financial performance and administration of
the Company within the powers authorised to him from time-to-time by the Board. The Managing Director/Chief Executive
Officer may make further delegation within the delegations specified by the Board and will be accountable to the Board for
the exercise of those delegated powers.
Further details of Board responsibilities, objectives and structure are set out in the Board Charter which is contained within
the Corporate Governance Plan on the Company’s website at https://www.dotz.tech/investors/
Board Appointments
The Company undertakes comprehensive reference checks prior to appointing a director or putting that person forward as
a candidate to ensure that person is competent, experienced, and would not be impaired in any way from undertaking the
duties of director. The Company provides relevant information to shareholders for their consideration about the attributes
of candidates together with whether the Board supports the appointment or re-election.
The terms of the appointment of a non-executive director, executive directors and senior executives are agreed upon and
set out in writing at the time of their appointment.
The Company Secretary
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper
functioning of the Board, including agendas, Board papers and minutes, advising the Board and its Committees (as applicable)
on governance matters, monitoring that the Board and Committee policies and procedures are followed, communication
with regulatory bodies and the ASX and statutory and other filings.
Board Committees
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation
of separate committees at this time including audit and risk, remuneration or nomination committees, preferring at this
stage of the Company’s development, to manage the Company through the full Board of Directors. The Board assumes the
responsibilities normally delegated to the audit and risk, remuneration and nomination Committees.
If the Company’s activities increase, in size, scope and nature, the appointment of separate committees will be reviewed by
the Board and implemented if considered appropriate.
57 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CORPORATE GOVERNANCE STATEMENT
Diversity
The Board has adopted a Diversity Policy which provides a framework for the Company to establish and achieve measurable
diversity objectives, including in respect to gender, age, ethnicity and cultural diversity. The Diversity Policy allows the Board
to set measurable gender diversity objectives (if considered appropriate) and to assess annually both the objectives (if any
have been set) and the Company’s progress towards achieving them.
The Board considers that, due to the size, nature and stage of development of the Company, setting measurable objectives
for the Diversity Policy at this time is not appropriate. The Board does not presently intend to set measurable gender
diversity objectives because:
a)
b)
c)
it is the Board’s view that the existing Directors and senior executives have sufficient skill and experience to carry out
the Company’s plans;
if it becomes necessary to appoint any new Directors or senior executives, the Board will consider the application of a
measurable gender diversity objective requiring a specified proportion of women on the Board and in senior executive
roles will, given the small size of the Company and the Board, unduly limit the Company from applying the Diversity
Policy as a whole and the Company’s policy of appointing based on skills and merit; and
the respective proportions of men and women on the Board, in senior executive positions and across the whole
organisation (including how the entity has defined “senior executive’s” for these purposes) for each financial year will
be disclosed in the Company’s Annual Report.
The participation of women in the Company at the date of this report is as follows:
• Women employees in the Company
• Women in senior management positions
• Women on the Board
54%
0%
0%
The Company’s Diversity Policy is contained within the Corporate Governance Plan on the Company’s website at
https://www.dotz.tech/investors/
Board & Management Performance Review
On an annual basis, the Board has committed to conducting a review of its structure, composition and performance. During
the 2020 financial year there were a number of Board changes.
The annual review includes consideration of the following measures:
•
•
•
•
•
•
comparing the performance of the Board against the requirements of its Charter;
assessing the performance of the Board over the previous 12 months having regard to the corporate strategies,
operating plans and the annual budget;
reviewing the Board’s interaction with management;
reviewing the nature and timing of information provided to the Board by management;
reviewing management’s performance in assisting the Board to meet its objectives; and
identifying any necessary or desirable improvements to the Board Charter.
The method and scope of the performance evaluation will be set by the Board and may include a Board self-assessment
checklist to be completed by each Director. The Board may also use an independent adviser to assist in the review.
The Chairman has primary responsibility for conducting performance appraisals of Non-Executive Directors, in conjunction
with them, having particular regard to:
•
•
•
contribution to Board discussion and function;
degree of independence including relevance of any conflicts of interest;
availability for and attendance at Board meetings and other relevant events;
58 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CORPORATE GOVERNANCE STATEMENT
•
•
•
contribution to Company strategy;
membership of and contribution to any Board committees; and
suitability to Board structure and composition.
The Board conducts an annual performance assessment of the Managing Director/Chief Executive Officer against agreed key
performance indicators.
The Managing Director/Chief Executive Officer conducts an annual performance assessment of senior executives against
agreed key performance indicators.
Given the fact the Company was only reinstated under its present structure on 14 November 2016 and there have been a
number of Board changes over the last few years, no formal appraisal of the Board or any senior executive has been
conducted.
Independent Advice
Directors have a right of access to all Company information and executives. Directors are entitled, in fulfilling their duties
and responsibilities, to seek independent external professional advice as considered necessary at the expense of the
Company, subject to prior consultation with the Chairman. A copy of any such advice received is made available to all
members of the Board.
Principle 2: Structure the board to be effective and add value
Board Committees
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation
of separate committees at this time including audit and risk, remuneration or nomination committees, preferring at this
stage of the Company’s development, to manage the Company through the full Board of Directors. The Board assumes the
responsibilities normally delegated to the audit and risk, remuneration and nomination Committees.
If the Company’s activities increase, in size, scope and nature, the appointment of separate committees will be reviewed by
the Board and implemented if considered appropriate.
Board Composition
Board is comprised of the following members at 09 March 2021:
Mr Bernie Brookes AM
Non-Independent – Chairman and Interim CEO (appointed 15 January 2020);
Mr Doron Eldar
Mr Ian Pamensky
Mr James Cotton
Independent - Non-Executive Director (appointed 15 January 2020);
Independent - Non-Executive Director (appointed 25 September 2020); and
Independent - Non-Executive Director (appointed 16 November 2020).
Dotz Nano has adopted a definition of 'independence' for Directors that is consistent with the Recommendations.
The Board comprises a majority of non-executive directors, two of whom are considered independent.
Details of the Directors interests, positions, associations and relationships have been included in the 2020 Annual Report.
Board Selection Process
The Board considers that a diverse range of skills, backgrounds, knowledge and experience is required in order to effectively
govern Dotz Nano. The Board believes that orderly succession and renewal contributes to strong corporate governance and
is achieved by careful planning and continual review.
59 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CORPORATE GOVERNANCE STATEMENT
The Board is responsible for the nomination and selection of directors. The Board reviews the size and composition of the
Board regularly and at least once a year as part of the Board evaluation process.
The Company does not comply with the recommendation as the Company’s Board was not of a relevant size to consider
formation of a separate Nomination Committee to deal with the selection and appointment of new directors or executives
and as such a Nomination Committee has not been formed.
Nominations of new Directors or executives are considered by the full Board. If any vacancies arise on the Board or at
executive level, all directors are involved in the search and recruitment of a replacement. The Board has taken a view that
the full Board will hold special meetings or sessions as required. The full Board also assesses its balance of skills, knowledge,
experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.
Under the Nomination Committee Charter (in the Company’s Corporate Governance Plan), the Nomination Committee (or,
in its absence, the Board) is required to prepare a Board skill matrix setting out the mix of skills and diversity that the Board
currently has (or is looking to achieve) and to review this at least annually against the Company’s Board skills matrix to ensure
the appropriate mix of skills and expertise is present to facilitate successful strategic direction.
The Board has developed a specific skill matrix. The composition of the Board is to be reviewed regularly to ensure the
appropriate mix of skills and expertise is present to facilitate successful strategic direction. This role will be performed by the
Nomination Committee (or, in its absence, the Board). The Company will disclose the Board skill matrix in, or in conjunction
with, its Annual Reports.
The Board Skills Matrix will includes the following areas of knowledge and expertise:
strategic expertise;
specific industry knowledge;
executive management;
human capital;
sales and marketing;
external communication
•
•
•
•
•
•
• Going global;
•
•
•
•
•
accounting and finance;
risk management;
diversity;
experience with financial markets; and
investor relations.
Induction of New Directors and Ongoing Development
New Directors are issued with a formal Letter of Appointment that sets out the key terms and conditions of their
appointment, including Director's duties, rights and responsibilities, the time commitment envisaged, and the Board's
expectations regarding involvement with any Committee work.
An induction program is in place and new Directors are encouraged to engage in professional development activities to
develop and maintain the skills and knowledge needed to perform their role as Directors effectively.
New Directors are provided with key materials such as the Code of Business Conduct and the Company’s Security Trading
Policy. The Company will consider site visits and professional development where appropriate.
The Company has historically had a continuous disclosure policy in place to ensure compliance with Listing Rule 15.7. In
response to the queries raised by the ASX while the Company’s securities were suspended from quotation in late 2020, the
Company undertook a review of its continuous disclosure policy and adopted from 31 December 2020 a new and materially
more comprehensive continuous disclosure policy which specifically addresses, amongst other things, requirements to
ensure compliance with Listing Rule 15.7, including:
(a)
a requirement not to discuss price sensitive information unless that particular information has been formally
disclosed to the market via an announcement;
60 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CORPORATE GOVERNANCE STATEMENT
(b)
(c)
disclosure obligations in connection with investor or analyst briefings; and
disclosure obligations while the Company's securities are subject to a trading halt or suspension.
As part of its review of its continuous disclosure arrangements, the Company has taken steps, including weekly calls between
the Board and management, to ensure:
(d)
(e)
management provides timely and fulsome updates to the Board; and
management is made aware of all external disclosures / presentations so as to ensure the accuracy of the
information provided and to determine whether any disclosures to the market are required.
The Company has provided a copy of the updated continuous disclosure policy to each of its directors and key management
personnel and required them to sign a confirmation that they have reviewed, understood, and undertake to comply with,
the updated policy.
Each of the Company’s directors and its key management were also recently provided with information from a law firm on
certain Listing Rule obligations of the Company, including its continuous disclosure obligations under Listing Rule 3.1 and the
requirements under Listing Rule 15.7. In addition, the Company intends to commence a training program with the law firm
for its directors and key management in order to further strengthen the Company’s continuous disclosure processes,
compliance with the Listing Rules and general corporate governance.
Principle 3: Instil a culture of acting lawfully, ethically and responsibly
Company Values
The Board has approved the Company’s statement of values, the Code and related policies, and charged the Executive Team
with the responsibility of instilling those values across the organisation. This includes ensuring that all employees receive
appropriate training on the values and senior executives continually reference and reinforce those values in their interactions
with staff (i.e. setting the “tone at the top”), in order to instil and continually reinforce a culture across the organisation of
acting lawfully, ethically and responsibly.
All directors of the Company also agree to comply with the Board governance protocols which outline, amongst other
matters, the directors’ duties and the conduct expected of them as directors
Code of Conduct
The Company has implemented a Code of Conduct, which provides a framework for decisions and actions in relation to
ethical conduct in employment. It underpins the Company’s commitment to integrity and fair dealing in its business affairs
and to a duty of care to all employees, clients and stakeholders.
All employees and Directors are expected to:
•
•
•
•
•
•
behave honestly and with integrity and report other employees who are behaving dishonestly;
carry out your work with integrity and to a high standard and in particular, commit to the Company’s policy of producing
quality goods and services;
operate within the law at all times;
act in the best interests of the Company;
follow the policies of the Company; and
act in an appropriate business-like manner when representing the Company in public forums.
An employee that breaches the Code of Conduct may face disciplinary action including, in the cases of serious breaches,
dismissal. If an employee suspects that a breach of the Code of Conduct has occurred or will occur, he or she must report
that breach to the Company Secretary, or in their absence, the Chairman. No employee will be disadvantaged or prejudiced
if he or she reports in good faith a suspected breach. All reports will be acted upon and kept confidential.
61 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CORPORATE GOVERNANCE STATEMENT
Whistleblower Policy, Securities Trading and Antibribery & Corruption Policy
Supporting good corporate governance and strengthening the Company’s core values, the Company’s Whistleblower,
Securities Trading and Antibribery & Corruption policies apply to all directors and employees, as well as contractors,
consultants and any other person who might be engaged by the Company to perform services for or on behalf of the
Company where appropriate. The Company encourages employees to report known or suspected instances of inappropriate
conduct, including breaches of the Code or any of the Company’s policies. The Company will protect a whistleblower,
including their identity to the extent permitted by law, and will not allow any detrimental treatment to happen to a
whistleblower because of the whistleblower’s report of any misconduct or improper state of affairs or circumstances. A copy
of these policies is available on the Company’s website along with other corporate governance policies of the Company.
The Company adopted a Whistleblower Policy on 7 January 2020.
The Company adopted an Antibribery & Corruption Policy on 27 March 2020.
Any material breaches of the Code of Conduct, Whistleblower policy, Securities Trading policy or Antibribery & Corruption
Policy, are to be reported to the Board immediately. For non-material breaches/matters, reporting to the Board/ Audit &
Risk Committee is scheduled on a six-monthly basis.
Principle 4: Safeguard integrity in corporate reporting
Given the size and scale of the Company’s operations, the full Board undertakes the role of the Audit Committee as detailed
in the Audit Committee Charter.
The Audit Committee is responsible for reviewing the integrity of the Company’s financial reporting and overseeing the
independence of the external auditors. The Board sets aside time to deal with issues and responsibilities usually delegated
to the Audit Committee to ensure the integrity of the financial statements of the Company and the independence of the
auditor.
The Board reviews the audited annual and half-year financial statements and any reports which accompany published
financial statements and recommends their approval to the members.
The Board is responsible for the initial appointment of the external auditor and the appointment of a new external auditor
when any vacancy arises. Candidates for the position of external auditor must demonstrate complete independence from
the Company throughout the engagement period. The Board may otherwise select an external auditor based on criteria
relevant to the Company’s business and circumstances. The Board also reviews annually the performance of the external
auditor, the appointment of the external auditor, their independence and their fees.
The Board receives regular reports from management and from external auditors. It also meets with the external auditors
as and when required.
The external auditors attend Dotz Nano's AGM and are available to answer questions from security holders relevant to the
audit.
Prior approval of the Board must be gained for non-audit work to be performed by the external auditor. There are qualitative
limits on this non-audit work to ensure that the independence of the auditor is maintained.
There is also a requirement that the lead engagement partner responsible for the audit not perform in that role for more
than five years. There was a change in audit partner for the year ended 31 December 2021.
The Board is also responsible for establishing policies on risk oversight and management. The Company has not formed a
separate Risk Management Committee due to the size and scale of its operations.
62 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CORPORATE GOVERNANCE STATEMENT
CEO and CFO Certifications
The Board, before it approves the entity’s financial statements for a financial period, receives from its CEO and CFO (or the
persons fulfilling those functions) a declaration provided in accordance with Section 295A of the Corporations Act that, in
their opinion, 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.
External Corporate Reports
Non-audited corporate reports receive extensive management review prior to release to the market, whilst the Corporate
Governance Statement is reviewed and endorsed by Board prior to approval.
Principle 5: Make timely and balanced disclosure
The Company has a Continuous Disclosure Policy which outlines the disclosure obligations of the Company as required under
the ASX Listing Rules and Corporations Act. The policy is designed to ensure that procedures are in place so that the market
is properly informed of matters which may have a material impact on the price at which Company securities are traded.
The Company has historically had a continuous disclosure policy in place to ensure compliance with Listing Rule 15.7. In
response to the queries raised by the ASX while the Company’s securities were suspended from quotation in late 2020, the
Company undertook a review of its continuous disclosure policy and adopted from 31 December 2020 a new and materially
more comprehensive continuous disclosure policy which specifically addresses, amongst other things, requirements to
ensure compliance with Listing Rule 15.7, including:
(f)
(g)
(h)
a requirement not to discuss price sensitive information unless that particular information has been formally
disclosed to the market via an announcement;
disclosure obligations in connection with investor or analyst briefings; and
disclosure obligations while the Company's securities are subject to a trading halt or suspension.
The Company’s practice on disclosure is consistent with the Principles and Recommendations. The Board strictly adheres to
the Company’s Continuous Disclosure Policy and procedures are in place to ensure compliance with ASX Listing Rule
disclosure requirements, which includes the requirement that any new or substantive information is released on the ASX
Market Announcements Platform ahead of being provided to analysts and investors during a one-on-one or group briefing
The Board considers whether there are any matters requiring disclosure in respect of each and every item of business that
it considers in its meetings. Individual Directors are required to make such a consideration when they become aware of any
information in the course of their duties as a Director of the Company.
The Company is committed to ensuring all investors have equal and timely access to material information concerning the
Company.
The Board has designated the Company Secretary as the person responsible for communicating with the ASX. All key
announcements at the discretion of the Managing Director are to be circulated to and reviewed by all members of the Board.
The Chairman, the Board, Managing Director and the Company Secretary are responsible for ensuring that:
a)
b)
company announcements are made in a timely manner, that announcements are factual and do not omit any material
information required to be disclosed under the ASX Listing Rules and Corporations Act; and
company announcements are expressed in a clear and objective manner that allows investors to assess the impact of
the information when making investment decisions.
The Continuous Disclosure Policy and the Shareholder Communication Policy are available on the Company’s website.
63 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CORPORATE GOVERNANCE STATEMENT
The Board and the Executive Team are included in an email distribution list to receive a copy of all ASX market
announcements made by the Company to ensure they have visibility of the nature and quality of the information being
disclosed to the market, and the frequency of such disclosures.
Listing Rules 15.5 has been amended to make it clearer how a document should be given to ASX. A document given by an
entity to ASX must: include, or be sent with a covering letter that includes, the entity’s name, address and corporate logo,
unless a form prescribed by the listing rules or an Australian law is used; be dated; identify the title of the body, or the name
and title of the officer, of the entity who authorised the document to be given to ASX; and if the document is an
announcement under rule 3.1, include the name, title and contact details of a person who security holders or other interested
parties can contact if they have any queries.
All material presentations by the Company are released to the ASX and posted on the Company’s website.
Principle 6: Respect the rights of security holders
The Company recognises the value of providing current and relevant information to its shareholders. The Board of the
Company aims to ensure that the shareholders are informed of all major developments affecting the Company’s state of
affairs.
The Company respects the rights of its shareholders and to facilitate the effective exercise of those rights the Company is
committed to:
•
•
communicating effectively with shareholders through releases to the market via ASX, the company website,
information posted or emailed to shareholders and the general meetings of the Company;
giving shareholders ready access to clear and understandable information about the Company; and
• making it easy for shareholders to participate in general meetings of the Company.
The Company also makes available a telephone number and email address for shareholders to make enquiries of the
Company. These contact details are available on the “Contact Us” page of the Company’s website.
Shareholders may elect to, and are encouraged to, receive communications from Dotz Nano and Dotz Nano's securities
registry electronically. The contact details for the registry are accessible from the “For Investors” page of the Company’s
website.
The Company maintains information in relation to its Constitution, governance documents, Directors and senior executives,
Board and committee charters, annual reports and ASX announcements on the Company’s website.
Since 1 January 2020, all resolutions at a meeting of security holders are decided by a poll rather than by a show of hands,
allowing all shareholders to vote based on of the number of shares held by them, also providing access to register their vote
regardless of whether they attend or not.
The Company’s policies and procedures, and in particular the Shareholder Communication Policy, comply with the Principles
and Recommendations in relation to the rights of shareholders.
Principle 7: Recognise and manage risk
The Board is committed to the identification, assessment and management of risk throughout Dotz Nano's business activities.
The risk committee is combined with the audit committee and is subject to the same Charter.
The Board is responsible for the oversight of the Company’s risk management and internal compliance and control
framework (Further information is disclosed in Principle 2 and 4 above). The Company does not have an internal audit
function. Responsibility for control and risk management is delegated to the appropriate level of management within the
Company with the Managing Director having ultimate responsibility to the Board for the risk management and internal
compliance and control framework. Dotz Nano has established policies for the oversight and management of material
business risks.
64 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CORPORATE GOVERNANCE STATEMENT
Dotz Nano's Risk Management and Internal Compliance and Control Policy recognises that risk management is an essential
element of good corporate governance and fundamental in achieving its strategic and operational objectives. Risk
management improves decision making, defines opportunities and mitigates material events that may impact security holder
value.
Dotz Nano believes that explicit and effective risk management is a source of insight and competitive advantage. To this
end, Dotz Nano is committed to the ongoing development of a strategic and consistent enterprise wide risk management
program, underpinned by a risk conscious culture.
Dotz Nano accepts that risk is a part of doing business. Therefore, the Company’s Risk Management and Internal Compliance
and Control Policy is not designed to promote risk avoidance. Rather Dotz Nano's approach is to create a risk conscious
culture that encourages the systematic identification, management and control of risks whilst ensuring the Company does
not enter into unnecessary risks or enter into risks unknowingly.
Dotz Nano assesses its risks on a residual basis; that is it evaluates the level of risk remaining and considering all the mitigation
practices and controls. Depending on the materiality of the risks, Dotz Nano applies varying levels of management plans.
The Board has required management to design and implement a risk management and internal compliance and control
system to manage Dotz Nano’s material business risks. It receives regular reports on specific business areas where there
may exist significant business risk or exposure. The Company faces risks inherent to its business, including economic risks,
which may materially impact the Company’s ability to create or preserve value for security holders over the short, medium
or long term. The Company has in place policies and procedures, including a risk management framework (as described in
the Company’s Risk Management and Internal Compliance and Control Policy), which is developed and updated to help
manage these risks.
During the reporting period, the Board determined that it did not have any material exposure to economic, environmental
and social sustainability risks. The Board does note however that the Company is subject to general economic risks, and
economic risks associated with the Company’s proposed products seeking to develop new markets. In addition, there are
inherent risks associated with the Company’s research and development facilities and team being located in Israel, due to
the political and military instability, obligations of Israeli citizens to perform military service, and the potential for other
countries to impose boycotts over Israeli produced products and companies.
The Company’s process of risk management and internal compliance and control includes:
•
•
•
identifying and measuring risks that might impact upon the achievement of the Company’s goals and objectives, and
monitoring the environment for emerging factors and trends that affect those risks;
formulating risk management strategies to manage identified risks, and designing and implementing appropriate risk
management policies and internal controls; and
monitoring the performance of, and improving the effectiveness of, risk management systems and internal compliance
and controls, including regular assessment of the effectiveness of risk management and internal compliance and
control.
The Board review’s the Company’s risk management framework at least annually to ensure that it continues to effectively
manage risk.
Management reports to the Board as to the effectiveness of Dotz Nano’s management of its material business risks at each
Board meeting.
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation
a dedicated internal audit function. The Company may consider to periodically engages external consultants to perform
internal control reviews.
Principle 8: Remunerate fairly and responsibly
The Board as a whole fulfils to the functions normally delegated to the Remuneration Committee (Further information is
disclosed in Principle 2 above) as detailed in the Remuneration Committee Charter.
65 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
CORPORATE GOVERNANCE STATEMENT
Dotz Nano has implemented a Remuneration Policy which was designed to recognise the competitive environment within
which Dotz Nano operates and also emphasise the requirement to attract and retain high calibre talent in order to achieve
sustained improvement in Dotz Nano’s performance. The overriding objective of the Remuneration Policy is to ensure that
an individual’s remuneration package accurately reflects their experience, level of responsibility, individual performance and
the performance of Dotz Nano.
The key principles are to:
•
•
•
•
•
•
review and approve the executive remuneration policy to enable the Company to attract and retain executives and
Directors who will create value for shareholders;
ensure that the executive remuneration policy demonstrates a clear relationship between key executive performance
and remuneration;
fairly and responsibly reward executives having regard to the performance of the Group, the performance of the
executive and the prevailing remuneration expectations in the market;
remunerate fairly and competitively in order to attract and retain top talent;
recognise capabilities and promote opportunities for career and professional development; and
review and approve equity-based plans and other incentive schemes to foster a partnership between employees and
other security holders.
The Board determines the Company’s remuneration policies and practices and assesses the necessary and desirable
competencies of Board members. The Board is responsible for evaluating Board performance, reviewing Board and
management succession plans and determines remuneration packages for the Managing Director, Non-Executive Directors
and senior management based on an annual review.
Dotz Nano’s executive remuneration policies and structures and details of remuneration paid to directors and key
management personnel (where applicable) are set out in the Remuneration Report.
Non-Executive Directors receive fees (including statutory superannuation where applicable) for their services, the
reimbursement of reasonable expenses and, in certain circumstances options.
The maximum aggregate remuneration approved by shareholders for Non-Executive Directors is AU$500,000 per annum.
The Directors set the individual Non-Executive Directors fees within the limit approved by shareholders.
Executive directors and other senior executives (where appointed) are remunerated using combinations of fixed and
performance-based remuneration. Fees and salaries are set at levels reflecting market rates and performance-based
remuneration is linked directly to specific performance targets that are aligned to both short and long term objectives.
The Company prohibits Directors and employees from entering into any transaction that would have the effect of hedging
or otherwise transferring the risk of any fluctuation in the value of any unvested entitlement in the Company’s securities to
any other person.
There is currently no minimum holding of the Company’s securities required by a non-executive director.
The Company’s equity-based incentive schemes to which the Executive Team and other employees are eligible to participate
in are presented to shareholders for approval at the AGM every three years, the last approval having been received on 2
March 2020.
The Securities Trading Policy contains a prohibition against directors and employees altering the economic benefit derived
by the director or employee in relation to an equity-based incentive award or grant made by the Company.
Detailed information on remuneration of directors and other Key Management Personnel is contained in the Remuneration
Report.
Further details in relation to the company’s remuneration policies are contained in the Remuneration Report, within the
Directors’ report.
66 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
ADDITIONAL ASX INFORMATION
The shareholder information set out below was applicable as at 23 March 2021.
As at 23 March 2021 there were 1,091 holders of Ordinary Fully Paid Shares.
VOTING RIGHTS
The voting rights of the ordinary shares are as follows:
(a)
(b)
at meetings of members each member entitled to vote may vote in person or by proxy or attorney; and
on a poll each person present in person or by proxy or by attorney has one vote for each ordinary share held.
There are no voting rights attached to any of the options that the Company currently has on issue. Upon exercise of these
options, the shares issued will have the same voting rights as existing ordinary shares.
TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest holders of each class of listed securities are listed below:
Ordinary Fully Paid Shares
Holder Name
CITICORP NOMINEES PTY LIMITED
SOUTHERN ISRAEL BRIDGING FUND TWO LP
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
IBI TRUST MANAGEMENT
AVOCADO VENTURES INC
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
KNH INVESTMENTS (AUST) PTY LTD
BNP PARIBAS NOMS PTY LTD
MR NATANEL HARPAZ
BNP PARIBAS NOMINEES PTY LTD
IBI TRUST MANAGEMENT
ROMFAL SIFAT PTY LTD
IBI TRUST MANAGEMENT
MR EVAN NEUMANN & MR RICKY NEUMANN
LS CAPITAL HOLDINGS PTY LTD
SILVERELLA PTY LTD
MR GAREN AZOYAN SUTISY & MRS ARMINEH MOSES MINASKANIANS
MR BRUNO NOSEK
BUZZ CAPITAL PTY LTD
Total
Holding
94,495,150
67,883,334
40,373,189
15,952,279
11,746,611
10,270,548
10,121,104
8,532,678
6,557,035
6,203,675
6,178,109
5,146,201
4,500,000
2,993,461
2,700,000
2,658,704
2,500,000
2,363,158
2,100,000
2,000,000
305,275,236
% IC
25.11%
18.04%
10.73%
4.24%
3.12%
2.73%
2.69%
2.27%
1.74%
1.65%
1.64%
1.37%
1.20%
0.80%
0.72%
0.71%
0.66%
0.63%
0.56%
0.53%
81.11%
Total issued capital - selected security class(es)
376,382,378
100.00%
67 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
ADDITIONAL ASX INFORMATION
SUBSTANTIAL HOLDERS
The names of the substantial shareholders disclosed to the Company as substantial shareholders as at 23 March 2021 are:
Name
No of Shares Held
% of Issued Capital
CITICORP NOMINEES PTY LIMITED
SOUTHERN ISRAEL BRIDGING FUND TWO LP
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
DISTRIBUTION OF EQUITY SECURITIES
Ordinary Fully Paid Shares
Holding Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Totals
94,495,150
67,883,334
40,373,189
25.11%
18.04%
10.73%
Holders
Total Units
% Issued Share
Capital
142
205
191
395
158
1,091
8,692
682,754
1,587,420
13,865,711
360,237,801
376,382,378
0.00%
0.18%
0.42%
3.68%
95.71%
100.00%
Based on the price per security, number of holders with an unmarketable holding: 147, with total 14,821, amounting to
0.004% of Issued Capital (based on share price of $0.34)
RESTRICTED SECURITIES
As at 23 March 2021 the following shares are subject to escrow:
• Nil
UNQUOTED SECURITIES
As at 23 March 2021, the following unquoted securities are on issue:
5,000,000 Options Expiring 19/10/23 @ $0.37.5 – 1 Holders (DTZOPT30)
Holders with more than 20%
Holder Name
KETOM PTY LTD
4,629,630 Options Expiring 17/06/22 @ $0.09 – 1 Holders (DTZOPT25)
Holders with more than 20%
Holder Name
SOUTHERN ISRAEL BRIDGING FUND TWO LP
Holding
5,000,000
% IC
100%
Holding
4,629,630
% IC
100%
68 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
ADDITIONAL ASX INFORMATION
4,629,630 Options Expiring 10/09/22 @ $0.09 – 1 Holders (DTZOPT29)
Holders with more than 20%
Holder Name
SOUTHERN ISRAEL BRIDGING FUND TWO LP
500,000 Options Expiring 31/12/22 @ $0.09 – 1 Holders (DTZOPT28)
Holders with more than 20%
Holder Name
ZINNIAH GROUP LIMITED
500,000 Options Expiring 31/12/22 @ $0.12 – 1 Holders (DTZOPT27)
Holders with more than 20%
Holder Name
ZINNIAH GROUP LIMITED
1,350,000 Options Expiring 18/05/22 @ $0.07 – 1 Holders (DTZOPT26)
Holders with more than 20%
Holder Name
EVAN CHARLES NEUMANN & RICKY STEVEN NEUMANN
375,000 Options Expiring 11/05/23 @ $0.048 – 1 Holders (DTZOPT23)
Holders with more than 20%
Holder Name
UNIVERSAL EXPORTS GROUP LTD
10,300,003 Options Expiring 07/05/2021 @ $0.085 – 12 Holders (DTZOPT18)
Holders with more than 20%
Holder Name
ZINNIAH GROUP LIMITED
LIONS INVESTMENT LTD
1,000,000 Options Expiring 15/02/2023 @ $nil – 1 Holders (DTZOPB)
Holders with more than 20%
Holder Name
TOMER SEGEV
10,000,000 Options Expiring 11/09/2021 @ $Nil – 1 Holders (DTZESOPT5)
Holders with more than 20%
Holder Name
ATLANTIC CAPITAL HOLDINGS PTY LTD
Holding
4,629,630
% IC
100%
Holding
500,000
% IC
100%
Holding
500,000
% IC
100%
Holding
1,350,000
% IC
100%
Holding
375,000
% IC
100%
Holding
5,000,000
2,625,000
% IC
48.5%
25.5%
Holding
1,000,000
% IC
100%
Holding
10,000,000
% IC
100%
69 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
ADDITIONAL ASX INFORMATION
5,000,000 Options Expiring 19/06/2021 @ $0.10 – 4 Holders (DTZOPT19)
Holders with more than 20%
Holder Name
EVOLUTION EQUITIES PTY LTD
BLUE OLIVE CAPITAL PTY LTD
4,820,094 Options Expiring 29/07/2021 @ $0.10 – 11 Holders (DTZOPT20)
Holders with more than 20%
Holder Name
AUSTRALIAN SHARE NOMINEES PTY LTD
6,368,522 Options Expiring 11/12/2021 @ $0.09 – 13 Holders (DTZOPT21)
Holders with more than 20%
Holder Name
KNH INVESTMENTS (AUS) LTD
10,000,000 Options Expiring 11/12/2021 @ $0.09 – 1 Holders (DTZOPT22)
Holders with more than 20%
Holder Name
MARZAMENO LTD
Holding
2,440,000
1,710,000
% IC
48.8%
34.2%
Holding
% IC
2,732,186
56.7%
Holding
% IC
2,307,408
36.2%
Holding
% IC
10,000,000
100.00%
6,650,000 Options - ESOP T1 VEST 30/6/2021 EXP 31/12/2021– 13 Holders (DTZESOPT6)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT < MICHAEL SHTEIN A/C>
5,650,000 Options ESOP T2 VEST 31/12/21 EXP 31/12/22– 13 Holders (DTZESOPT7)
Holders with more than 20%
Holder Name
There are no holders with more than 20%
5,650,000 Options ESOP T3 VEST 31/12/21 EXP 31/12/23 – 13 Holders (DTZESOPT8)
Holders with more than 20%
Holder Name
There are no holders with more than 20%
200,000 Options ESOP EXP 31/12/22 @ $0.06 – 1 Holders (DTZESOPT9)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
Holding
% IC
2,000,000
30.08%
Holding
% IC
Holding
% IC
Holding
200,000
% IC
100%
70 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020
ADDITIONAL ASX INFORMATION
100,000 Options Expiring 16/10/22 @ $0.05 – 1 Holders (DTZOPT31)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
400,000 Options Expiring 16/10/22 @ $0.30 – 1 Holders (DTZOPT32)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
ON-MARKET BUY BACK
There is currently no on-market buyback program.
ASX LISTING RULE 4.10.19
Holding
100,000
% IC
100%
Holding
400,000
% IC
100%
The Company has used its cash and assets in a form readily convertible to cash that it had at the time of reinstatement of
the Company’s securities to quotation in a way consistent with its business objectives.
71 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2020