APPENDIX 4E AND
FINANCIAL STATEMENTS
DTI Group Ltd
30 June 2019
RESULTS FOR ANNOUNCEMENT TO THE MARKET
Appendix 4E
For the period ended 30 June 2019
DTI Group Ltd
Results for announcement to the market
Appendix 4E
Preliminary Final Report
Period Ended 30 June 2019
Name of entity
DTI Group Ltd
ABN or equivalent company reference
Period ended (‘Current Period’)
15 069 791 091
30 June 2019
Previous corresponding period: 30 June 2018
Extracts from this report for announcement to the market
Revenues from ordinary activities
Profit/(loss) from ordinary activities after tax
attributable to members
Net profit/(loss) after tax for period attributable to
members
Up
Up
Up
$000s
0.4%
to
19,176.9
17.1%
to
(9,440.7)
17.1%
to
(9,440.7)
Dividends (distributions)
Final dividend
Interim Dividend
Record date for determining
entitlements to the dividend
Amount per security
Franked amount per
security
nil
nil
N/A
N/A
N/A
Brief explanation of any of the figures reported above and short details of any bonus or cash issue or
other item(s) of importance not previously released to the market:
Not applicable
Commentary on Results
For commentary on the results of DTI Group Ltd refer to the attached Audited Annual Report with the
details and explanations provided in the accompanying financial statements for the year ended
30 June 2019.
Appendix 4E
For the period ended 30 June 2019
Ratios and Other measures
NTA backing
Net tangible asset backing per
ordinary security
Dividends
Date the dividend is payable
Record date to determine
entitlements to the dividend
Amount per security
Final Dividend:
Current year
Previous year
Interim Dividend:
Current year
Previous year
Total Dividends
Total Dividend:
Current year
Previous year
DTI Group Ltd
Current Period
Previous corresponding
Period
$0.023
$0.068
N/A
N/A
Amount per security
Franked amount per
security
nil
nil
nil
nil
nil
nil
nil
nil
Amount per security
Total amount ($000s)
nil
nil
nil
nil
Control gained over entities having material effect
During the year ended 30 June 2019 there was no control gained over entities having material effect
on the financial results or financial position of the Consolidated Entity.
Loss of control of entities having material effect
During the year ended 30 June 2019 there was no loss of control over entities having material effect
on the financial results or financial position of the Consolidated Entity.
Audit Status
This report is based on financial statements that have been audited. The Independent auditor’s report
is included in the 2019 Audited Annual Report. Note 19 in the financial report describes the events
and conditions which give rise to the existence of a material uncertainty that may cast doubt about
the Group’s ability to continue as a going concern. The audit opinion is not modified in respect of this
matter.
MICHELLE KONG
Chief Financial Officer
30 August 2019
Perth, Western Australia
Annual Report 2019
D T I
G R O U P L T D
A B N 1 5 0 6 9 7 9 1 0 9 1
2019 Year End Report
Contents
Directors’ Report ....................................................................................................................................... 3
Audited Remuneration Report ............................................................................................................ 14
Consolidated Statement of Profit or Loss and Other Comprehensive Income ................... 26
Consolidated Statement of Financial Position .............................................................................. 27
Consolidated Statement of Changes in Equity ............................................................................. 28
Consolidated Statement of Cash Flows .......................................................................................... 29
Notes to the Consolidated Financial Statements ......................................................................... 30
Directors’ Declaration ............................................................................................................................ 73
Auditor’s Report ...................................................................................................................................... 74
Auditor’s Independence Declaration ................................................................................................ 79
Corporate directory ................................................................................................................................ 80
Additional ASX Information ................................................................................................................. 81
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P a g e | 2
Directors’ Report
Directors’ Repor t
The Directors present their report, together with the consolidated financial statements of the Group
comprising of DTI Group Limited (“DTI” or “the Company”) and its subsidiaries for the financial year ended
30 June 2019 and the auditor’s report thereon.
Directors
The directors of the Company at any time during or since the end of the financial year are:
Greg Purdy
Non-Executive Chairman
Qualifications & Experience:
Greg Purdy was appointed to the Board on 16 October 2018 and the role of
Non-Executive Chairman of DTI on 20 November 2018. Mr Purdy is a
member of the Australian Institute of Company Directors.
Mr Purdy is an experienced corporate executive with a strong background
in technology and communications companies and execution of major
technology projects. Mr Purdy
is a
Hewlett Packard, Telstra and the Tenix Group.
former senior executive with
Other Directorships:
Non-Executive Director of NTT DATA Australia.
Steve Gallagher
Independent Non-Executive Director
Qualifications & Experience:
Steve Gallagher was appointed to the Board on 16 October 2018 and is a
member of the Australian Institute of Company Directors and holds a
Bachelor of Engineering (Honours) from the University of Melbourne and
Bachelor of Commerce from Monash University.
Mr Gallagher has experience in industrial automation, building technology,
power systems and payment solutions and has held senior executive
positions with a range of engineering technology companies including
Vix Technology, ERG Ltd and Siemens AG. More recently Steve was a
director of Hong Kong listed CCRTT, a Chinese government-controlled
corporation specialising in the development of urban rail transit systems
and technology applications for intelligent rail transport.
Other Directorships:
Non-Executive Director with Optal Ltd, Vix Technology Ltd, Ventura Bus
Lines Pty Ltd and Transact1 Pty Ltd.
Neil Goodey
Independent Non-Executive Director
Qualifications & Experience:
Neil Goodey resigned from the role of Non-Executive Chairman of DTI on
20 November 2018 and remains as Non-Executive Director from that date.
Mr Goodey co-founded DTI in 1995 and held the position of Managing
Director until 2008.
Over the last 27 years, Mr Goodey has founded and managed a number of
successful technology-driven companies. He created the software-focused
vision for DTI and worked directly with the Company’s engineering team to
develop DTI’s products and underlying intellectual property.
Other Directorships:
None
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Directors’ Report
Andrew Lewis
Independent Non-Executive Director
Qualifications & Experience:
Andrew Lewis was appointed to the Board on 16 October 2018. Mr Lewis
holds a Bachelor of Economics from Monash University and has a
background in real estate, hospitality and project management and
currently holds a senior management position with Morris Group, a
privately held business operating across tourism, hospitality, renewable
energy, finance, technology and aviation.
Other Directorships:
None
Peter Tazewell
Managing Director
Qualifications & Experience:
Peter Tazewell resigned from the Board on 30 June 2019. Mr Tazewell is
a qualified chartered accountant with over 30 years’ of varied
management, financial and corporate experience including finance,
accounting, corporate strategy, purchase/supply and
identification
evaluation and execution of significant corporate transactions.
Education:
Memberships:
Bachelor of Commerce – University of Western Australia
Fellow of the Institute of Chartered Accountants
Other Directorships:
None
Richard Johnson
Executive Director
Qualifications & Experience:
Richard Johnson resigned from the board on 16 October 2018. Mr
Johnson has more than 20 years’ experience in the transit technology
sector.
Education:
Bachelor of Science (Electrical Engineering) - University of Calgary
Master of Engineering Studies – University of Western Australia
Master of Business Administration - University of Western Australia
Other Directorships:
None
Glyn Denison
Independent Non-Executive Director
Qualifications & Experience:
Glyn Denison resigned from the Board on 20 November 2018. Mr Denison
has over 30 years’ experience in the development of international
distribution of technical products for the public transport industry, including
senior roles at ERG Limited.
Education:
Bachelor of Engineering – University of Western Australia
Diploma in Business and Administration – Curtin University
Other Directorships:
Non-Executive Chairman of McDowall Affleck Pty Ltd and
Wesbuilders Cooperative Limited.
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Directors’ Report
Jeremy King
Independent Non-Executive Director
Qualifications & Experience:
Jeremy King resigned from the Board on 17 January 2019. He is a
qualified lawyer with extensive corporate experience, particularly in
relation to cross-border private equity and leveraged buy-out acquisitions,
as well as acting for banks, financial institutions and corporate issuers in
respect of various debt and equity capital raisings.
Education:
Bachelor of Laws – University of Western Australia
Other Directorships:
Non-Executive Director of Transcendence Technologies Ltd, HER
Resources Ltd, Red Mountain Mining Ltd, Cott Oil and Gas Ltd, Smart
Parking Limited and Pure Minerals Limited. Formerly a Non-Executive
Director of CEB Resources plc and Orca Energy Limited and Chairperson
of Continuation Investments Ltd.
Unless otherwise stated, the above-named directors held their current position for the whole of the financial
year and since the end of the financial year.
Company Secretary
Ian Hobson
Mr Ian Hobson was appointed as Company Secretary on 21 February 2019. He is a member of the Institute
of Chartered Accountants, Chartered Secretaries Australia and the Australian Institute of Company Directors.
My Hobson has previously held senior positions with PwC, Sanford Securities, Ferrier Hodgson and, most
recently has owned and operated his own Chartered Accountant and Chartered Company Secretary service.
Raj Surendran
Mr Raj Surendran resigned from the position of Company Secretary on 8 February 2019. He is a qualified
accountant and holds a MBA from the University of Western Australia.
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Directors’ Report
Directors’ meetings
The number of directors’ meetings (including meetings of committees of directors) and number of meetings
attended by each of the directors of the Company during the financial year are:
Directors
G Purdy1
S Gallagher2
N Goodey
A Lewis3
P Tazewell4
R Johnson5
G Denison6
J King7
Held
Attended
6
6
8
6
8
2
4
4
6
6
8
6
8
2
3
4
1. Mr Purdy was appointed to the Board on 16 October 2018 and as Chairman on 20 November 2018.
2. Mr Gallagher was appointed to the Board on 16 October 2018.
3. Mr Lewis was appointed to the Board on 16 October 2018.
4. Mr Tazewell resigned from both the Board and ceased to be KMP on 30 June 2019.
5. Mr Johnson resigned from the Board on 16 October 2018 and ceased to be KMP on 14 August 2019.
6. Mr Denison resigned from the Board on 20 November 2018.
7. Mr King resigned from the Board on 17 January 2019.
Principal activities
The principal activities of the Group during the course of the financial year were the development,
manufacture and supply of integrated surveillance, passenger communication systems, and fleet
management solutions for the global mass transit industry and other related markets.
There were no significant changes in the nature of the activities of the Group during the year.
Operating and Financial Review
Overview
DTI’s customers are transit agencies, transit vehicle manufacturers and transit operators. The Company
offers the following products and services:
•
•
Advanced surveillance solutions – specialised hardware systems, incorporating video, audio, GPS
tracking, communications and high-speed recording technology; supported by sophisticated device and
data management software to provide comprehensive, fleet-wide, CCTV and vehicle management
solutions.
Passenger communication solutions – specialised hardware systems, incorporating real time passenger
information through graphical and high brightness displays as well as public address and hearing aid
loop communications, passenger emergency communications, driver awareness systems incorporating
live viewing of passengers, and infotainment systems; supported by sophisticated device and content
management software to provide a comprehensive, fleet-wide, passenger information management
solution.
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Directors’ Report
• Managed services – back-end control room communications and infrastructure comprising wide-area
urban surveillance, driver development and risk mitigation, video management, vehicle data analysis
and monitoring, schedule adherence analysis, IT infrastructure, help desk, technical support and
monitoring, and first line maintenance.
DTI markets and distributes its product range to customers worldwide, both directly and in conjunction with a
network of integrators and business partners.
Shareholder returns
The table below sets out summary information about the Group’s earnings and movement in shareholder
wealth for the five years to 30 June 2019.
Revenue
EBITDA
Net profit/(loss) after tax
Share price at start of year
Share price at end of year
Dividends
Basic (loss)/
earnings per share
$
$
$
$
$
cps
cps
FY19
FY18
FY17
FY16
FY15
19,176,894
19,103,076
15,867,660
16,216,338
14,705,897
(8,179,879)
(10,127,646)
(3,024,987)
3,645,667
1,529,197
(9,440,710)
(11,384,311)
(5,847,874)
31,558
690,511
0.06
0.17
0.03
0.06
-
-
(4.42)
(8.72)
0.39
0.17
-
(5.32)
(13.5)
0.29
0.39
-
0.03
22.7
n/a
0.29
-
0.14
10.08
Return on Capital Employed %
(153.90)
(65.60)
Net profit/(loss) amounts have been calculated in accordance with Australian Accounting Standards
(AASBs).
Review of Financial Condition
FY19 Financial Performance
During the year ended 30 June 2019 DTI recorded revenue of $19.2 million (2018: $19.1 million). This
represents a 0.4 per cent increase compared to the prior year and is attributed to a similar order book in the
rail and bus sectors. DTI’s revenue continues to be largely dependent upon capital projects during the year.
There is an increased focus on securing revenue from maintenance and recurring equipment sales.
Revenue from these sources was $10.7 million (2018: $9.9 million) which represents an 8 per cent increase
compared to the prior year.
DTI recorded negative EBITDA of $8.2 million for the year ended 30 June 2019 (2018: negative
$10.1 million). Reported EBITDA was adversely impacted by the identification and impairment of
unrecoverable assets and the execution of several contracts with less than optimum margins. These matters
are further elaborated in the discussion on Underlying EBITDA below.
Corporate overheads of $3.4 million (2018: $2.9 million) increased by 14 per cent compared to prior year.
This increase is largely due to increase in legal, professional and consulting fees. Employee benefits
expense of $7.4 million (2018: $7.7 million) was 4.0 per cent lower than prior year and includes restructuring
provision totalling $0.5 million.
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Directors’ Report
Underlying EBITDA
During the year DTI recorded a number of non-recurring expenses attributed to events from earlier reporting
periods. In order to present an underlying EBITDA result, these items have been identified in the following
table:
Reconciliation of Underlying EBITDA
Statutory EBIT
Depreciation/Amortisation
Reported EBITDA
Impairment of intangible assets
Impairment of inventory
Impairment of trade receivables
Impairment of contract costs
Restructuring/redundancy costs
Underlying EBITDA
Net Impairment charges:
FY19
$
FY18
$
(9,535,657)
(13,125,393)
1,355,778
2,997,747
(8,179,879)
(10,127,646)
1,493,687
5,163,573
2,668,910
2,045,819
348,326
383,015
500,000
-
500,000
270,272
(2,668,956)
(2,264,967)
DTI regularly reviews the capitalised value of intangible assets to confirm
that the carrying value can be recovered against future product sales.
Where a product has become obsolete or is determined not to generate
sufficient sales to support the carrying value then the intangible asset is
impaired.
During the financial year, DTI performed a comprehensive review of its
Statement of Financial Position with a focus on asset recoverability and
valuation and as a result of this review DTI impaired certain inventory,
which was no longer deemed commercial and long standing receivables,
contract costs, which were deemed to be unrecoverable.
As at 30 June 2019, the market capitalisation of DTI did not exceed its
net assets, which is an indicator of asset impairment under accounting
standards. For the purpose of impairment testing the intangibles are
allocated to one Cash Generating unit (CGU) on the group level. The
recoverable amount of the CGU was then determined using the value is
use model which requires the use of key assumption and judgments
relating to future revenues, anticipated gross margins, growth rates
expected and discount rate. The Board determined that the underlying
assumptions supporting the impairment model were sensitive to create
uncertainty of the model outcomes. As a result, the Board has taken the
decision to impair the balance of capitalised development costs by
$1,493,687 (2018: $5,163,573).
Cash Flow
DTI generated negative cash flow from operations of $0.96 million during the financial year. Net cash
outflow for the year was $3.1 million. Key impacts on net cash flow included:
i) Continued investment in R&D activities amounting to $2.0 million;
ii) Continued working capital intensity, primarily for rail projects, amounting to $2.6 million; and
iii) R&D grant received of $1.6 million relating to FY18 financial year.
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Directors’ Report
Rail projects typically have a larger investment in engineering and design and can be subject to delays
outside of DTI’s control. The working capital intensity of these rail projects gives rise to irregular cash flows.
Financial Position
As at the end of the financial year, DTI maintained positive cash reserves of $2.0 million and sufficient levels
of liquid working capital. DTI has no term debt and the only financial indebtedness relates to insurance
premium funding.
As described in the Financial Statements as at 30 June 2019, DTI is not in compliance with its financial
covenants with Bankwest. Bankwest has provided a waiver of this non-compliance until the next review in
September 2019.
Review of principal business
DTI services the global mass transit market. The principal underlying drivers for DTI business are:
i)
Increased public and private investment in public transport infrastructure;
ii) Requirement for improved security and surveillance on mass transit systems; and
iii) Increased demand for passenger information systems on mass transit systems.
DTI considers these are strong drivers of demand for its products and services which will continue into FY20
and beyond.
Investments for future performance
DTI completed a major investment in new products which resulted in material R&D costs incurred and a lag
in revenue as these new products were introduced to market. This contributed to the Group’s net loss for the
year. While R&D activities will continue to be a focus for DTI, it is considered that the level of R&D spend will
be reduced in FY20 and be more focused on software features and services.
Operational performance
Throughout FY19 DTI won a number of significant new contracts on the basis of its unique product offering.
DTI was awarded contracts to provide surveillance and other associated equipment for London
Underground, Virgin Trains, MTM COMENG fleet and London Midland.
DTI continues to provide long-term maintenance and support services to municipal transit authorities in
Australia (Brisbane City Council, Public Transit Authority of Western Australia, Department of Planning,
Transport and Infrastructure of South Australia, and Action Bus (Canberra)) and in the UK. DTI is also
continuing to supply its mobile video surveillance solutions to long term customers in San Francisco and
Philadelphia.
Throughout FY19, DTI made significant investment in new products, primarily for deployment on Alstom
trains for the Sydney Metro project. Deliveries of these products (by train-set) commenced in FY17 and
continued throughout FY19. The DART project in the USA moved to completion and has entered the
warranty phase.
DTI successfully completed an external surveillance audit for its ISO9001:2008 Quality Assurance
certification by Bureau Veritas. The ISO9001 accreditation provides further assurance to customers that
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Directors’ Report
they receive the very best in quality and service from our company and will cater to broadening business
opportunities globally.
Significant changes in state of affairs
In the opinion of the directors, there were no significant changes in the state of affairs of the Group that
occurred during the financial year under review.
Outlook
Opportunity Pipeline
DTI continues to enjoy strong demand for its products and services with an Opportunity Pipeline exceeding
$120 million. FY19 was a challenging year for the Group with a significant investment made in developing
new products that have positioned the business strongly to drive future revenue growth. Efforts to position
DTI with major rail and bus providers should continue to develop into new projects and service opportunities
in FY20. A large number of markets indicate major new investment in either new fleets or retrofit of existing
fleets. This should position DTI well, as recent product developments can now be offered for these
opportunities.
Order Book
DTI continued to secure new projects including a large rail upgrade project for MTM in Melbourne. This project
included core technology offerings for passenger information, hearing loop, CCTV and emergency
communications. The Central Line project in the UK was also secured which include camera and digital
recording products.
Smaller product and project sales across Europe continued to be awarded to DTI through our system
integrator network. Ongoing orders for digital recording systems for new buses in Australia through key bus
manufacturers was also a highlight.
Business Strategies
DTI’s business strategy to develop innovative hardware and software products for the transit industry
covering passenger information, multi-use digital video recording and emergency communications systems
has resulted in a suite of products and solutions ready for the global transit market. DTI will continue to seek
new projects in selected markets to capitalise on these new offerings.
Into FY20, DTI will focus on its existing customer base and concentrate on improving its delivery of projects
together with ensuring we secure long term maintenance and support agreements.
Product development focus will include exciting new software analytics offerings.
Future Developments
With regards to its current balance of contracted work, DTI expects to deliver improved revenue and gross
margin during the second half of FY20 as a number of projects move into final delivery stages. Focus on
growing DTI’s service businesses to deliver improved customer service outcomes and increased gross
margin contributions to the overall DTI business, will continue. The opportunity to win new contracted work
from its range of new products is strong and DTI is focussed on building its backlog of contracted work in
order to demonstrate strong future revenue. Cost control across the business will continue to receive
attention.
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Directors’ Report
Dividends
In respect of the financial year ended 30 June 2019, no interim dividend was paid and the directors have
determined that no final dividend will be paid.
Events since the end of the financial year
On 20 August 2019, DTI announced it proposes to make a 5 for 9 non-renounceable entitlement offer to
raise approximately $3 million via the issue of approximately 119.6 million new shares at 2.5 cents per share
(Entitlement Offer). The Entitlement Offer will be underwritten by Finico Pty Ltd and UIL Limited who are
major shareholders of the Company. The proceeds of the capital raising will provide necessary working
capital and to strengthen the Company’s balance sheet for future growth.
Pursuant to the Underwriting Deeds, the Underwriters also agreed to advance the Underwriter Loans
($810,552 from UIL and $971,684 from Finico) to the Company on 20 August 2019, the repayment of which
will be satisfied and offset by the Company via the issue of 32,422,088 New Shares to UIL and 38,867,358
New Shares to Finico under the proposed Entitlement Offer.
Other than what has been mentioned above, no matters or circumstance have arisen that have significantly
affected, or may significantly affect, the operations of DTI Group Ltd, the results of those operations or the
state of affairs of DTI Group Ltd in subsequent years that is not otherwise disclosed in this report.
Likely developments and expected results of operations
The Group will continue to pursue its policy of developing communications and passenger information
technologies for the global mass transit market. DTI remains confident in its outlook as it seeks to drive
growth via its strong pipeline of opportunities. The Group’s ongoing investment in R&D aims to strive for
continued innovation and market leadership of the products and services that DTI offers to the global mass
transit industry and other related markets.
Environmental regulation
The Company is not subject to any specific environmental regulation. The Directors have considered
compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities to report
greenhouse gas emissions and energy use. The Directors have assessed that there are no current reporting
requirements, but the Company may be required to do so in the future.
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Directors’ Report
Directors’ interests
The relevant interest of each director in the shares, debentures, interests in registered schemes and rights or
options over such instruments issued by the companies within the Group and other related bodies corporate,
as notified by the directors to the ASX in accordance with S205G(1) of the Corporations Act 2001, at the date
of this report is as follows:
Ordinary Shares
DTI Group Limited
Options over Ordinary
Shares
Rights over Ordinary Shares
G Purdy
S Gallagher
N Goodey
A Lewis
P Tazewell1
R Johnson2
G Denison3
J King4
Nil
Nil
6,575,198
1,875
n/a
n/a
n/a
n/a
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
n/a
n/a
Nil
Nil
1. Mr Tazewell resigned from both the Board and ceased to be KMP on 30 June 2019.
2. Mr Johnson resigned from the Board on 16 October 2018 and ceased to be KMP on 14 August 2019.
3. Mr Denison resigned from the Board on 20 November 2018.
4. Mr King resigned from the Board on 17 January 2019.
Indemnification of officers and auditors
The Company has also agreed to indemnify the current directors of its controlled entities for all liabilities to
another person (other than the Company or a related body corporate) that may arise from their position,
except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that
the Company will meet the full amount of any such liabilities, including costs and expenses.
During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the
Company and all executive officers of the Company against a liability incurred as such Director, secretary or
executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an
officer or auditor of the Company or of any related body corporate against a liability incurred as such an
officer or auditor.
Non-audit services
The Board is satisfied that the provision of non-audit services during the year is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied
that the services disclosed below did not compromise the external auditor’s independence for the following
reasons:
•
All non-audit services are reviewed and approved by Board prior to commencement to ensure they do
not conversely affect the integrity and objectivity of the auditor.
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Directors’ Report
•
The nature of the services provided does not compromise the general principles relating to auditor
independence as set out in the APES Code of Ethics for Professional Accountants.
The total fees for non-audit services paid to the auditor or related practices of the auditor during the year
ended 30 June 2019 were $7,593 (2018: $7,234) in relation to UK Tax services.
Proceedings on behalf of the Company
No person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party,
for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
Auditor’s independence declaration
The auditor’s independence declaration is set out on page 79 and forms part of the directors’ report for the
financial year ended 30 June 2019.
Corporate Governance Statement
The Board of DTI is responsible for the corporate governance of the company and its subsidiaries. The
Board has governance oversight of all matters relating to the strategic direction, corporate governance,
policies, practices, management and operations of DTI with the aim of delivering value to its Shareholders
and respecting the legitimate interests of other stakeholders, including employees, customers and suppliers.
Under ASX Listing Rule 4.10.3, DTI is required to provide in its annual report details of where shareholders
can obtain a copy of a corporate governance statement, disclosing the extent to which the Company has
followed the ASX Corporate Governance Council Principles and Recommendations in the reporting period.
DTI has published its corporate governance statement on the “Corporate Governance” page of its web site at
www.dti.com.au
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Directors’ Report
Audited Remuneration Report
This Remuneration Report, which forms part of the Directors' Report, sets out information about the
remuneration of Key Management Personnel (KMP) of the Group for the financial year ended 30 June 2019.
The term Key Management Personnel refers to those persons having authority and responsibility for
planning, controlling and directing the activities of the consolidated entity, directly or indirectly, including any
director (whether executive or otherwise) of the consolidated entity. Any reference to “Executives” in this
report refers to those KMP who are not Non-Executive Directors. The prescribed details for each person
covered by this report are detailed below under the following headings:
•
•
•
•
•
•
•
Key management personnel
Remuneration policy
Remuneration structure
Relationship between the remuneration policy and company performance
Remuneration of directors and key management personnel
Key terms of employment contracts
Key management personnel equity holdings
Key Management Personnel
The directors and other Key Management Personnel of the consolidated entity during or since the end of the
financial year were:
Non-Executive Directors
The following persons acted as non-executive directors of the Company during the financial year:
Mr G Purdy
(Appointed to board on 16 October 2018 and as Chairman from 20 November 2018)
Mr S Gallagher
(Appointed to board on 16 October 2018)
Mr N Goodey
(Chairperson until 20 November 2018)
Mr A Lewis
(Appointed to board on 16 October 2018)
Mr G Denison
(Resigned from the Board on 20 November 2018)
Mr J King
(Resigned from the Board on 17 January 2019)
Unless otherwise stated, the named persons held their current position for the whole of the financial year and
since the end of the financial year.
DTI Executives
The following persons were employed as Group executives during the financial year:
Mr F Havelka
(Chief Executive Officer – Appointed on 31 May 2019)
Mr P Tazewell
(Chief Executive Officer and Managing Director – resigned on 30 June 2019)
Mr R Johnson
(Executive Director – resigned from board on 16 October 2018 and ceased to be KMP
from 14 August 2019)
Mr I Hobson
(Company Secretary – Appointed on 21 February 2019)
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Directors’ Report
Audited Remuneration Report
Ms M Kong
(Chief Financial Officer – Appointed on 1 April 2019)
Mr R Surendran
(Chief Financial Officer/Company Secretary – resigned on 8 February as Company
Secretary and 4 March 2019 as Chief Financial Officer)
Unless otherwise stated, the named persons held their current position for the whole of the financial year and
since the end of the financial year.
Remuneration Policy
Non-Executive Directors
Non-Executive Directors receive a Board fee and fees for chairing or participating on Board committees, as
set out below. They do not receive performance-based pay or retirement allowances. The fees are inclusive
of superannuation. The Chairman does not receive additional fees for participating in or chairing
committees.
The Chairman of the Board receives a fixed fee of $50,000 per annum. Other Non-Executive Directors each
receive an annual Board fee of $30,000 plus an additional $5,000 per annum for membership of the Audit,
Risk and Compliance Committee. A further fee of $5,000 per annum is paid to the chairman of the Audit,
Risk and Compliance Committee. However with the dissolution of the Audit, Risk and Compliance and
Nominations and Remuneration Committees, Non-Executive Directors will no longer be entitled to receive
membership fees to the Audit Committee. No additional fees apply with respect to the Nominations and
Remuneration Committee. The maximum annual aggregate Directors’ fee pool limit is $250,000. Fees will
be reviewed annually by the Board in the future.
All Non-Executive Directors have entered into a service agreement with the Company in the form of a letter
of appointment. The letter summarises various matters relating to the appointment including the position’s
role and responsibilities, time commitments, remuneration and expenses, outside interests, securities dealing
policy and the treatment of confidential information. These matters are consistently applied for each
Non-Executive Director.
DTI Executives
The Company’s remuneration policy for DTI executives is to fairly and responsibly reward them having
regard to the performance of the Group, the performance of the executive and prevailing remuneration
expectations in the market.
The Company also seeks to establish remuneration structures which align the interests of its key
management personnel with the interests of the Company and its shareholders. DTI has established a
Management Compensation Plan (MCP) under which certain executives are entitled to receive short-term
incentives (STI) and long term incentives (LTI) based on the delivery of key Group and individual outcomes,
and the profitability of the DTI Group. During the financial year, only Mr Tazewell and Mr Johnson were
participants of the MCP.
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Directors’ Report
Audited Remuneration Report
Other DTI executives do not have a formal STI or LTI component of their remuneration package however
they may receive a cash bonus as a STI, at the discretion of the Board.
As detailed in this report, no DTI executives received any STI or LTI payments in respect of FY19.
The amount of compensation for current and future periods for DTI executives is based on consideration of
market factors, comparison to peers and reference to the individual’s experience and performance. Overall,
remuneration policies are subject to the discretion of the Board and can be changed to reflect the
competitive market and business conditions when in the interest of the Company and shareholders.
Performance Evaluation
Each DTI executive is subject to a review of their individual performance each year in accordance with the
Company’s Development and Appraisal Process. This process usually takes place in September each year.
Remuneration Structure
DTI executive
The remuneration structure for DTI executives participating in the MCP is based on the concept of a total
package target (TPT) assuming budgeted financial performance is achieved and the participants performed
satisfactorily. If the business and/or the participants perform below standard then the total remuneration will
be less. If financial performance exceeds budget and there is above average performance then the package
can increase by up to 18.75 per cent of the TPT. The TPT comprises three components:
i)
ii)
iii)
A fixed component, representing base salary plus superannuation, which comprises 75 per cent of
the TPT;
a variable component, represented by a STI paid as a cash bonus, which comprises 12.5 per cent of
the TPT. This component can increase to 25 per cent of the fixed component for exceptional
performance; and
a variable component, represented by a LTI in the form of an equity issue of DTI shares, which
comprises 12.5 per cent of the TPT. This component can increase to 33.3 per cent of the fixed
component for exceptional performance.
The STI and LTI are determined following the finalisation of the audited annual financial results. If
employment has ceased for any reason on or before the date when the STI and LTI are paid or are due for
payment, eligibility to receive the STI and LTI lapses. The participants may elect to receive the STI payment
in equity securities, subject to shareholder approval.
In the event of serious misconduct or a material misstatement in the Company’s financial statements, the
Board can cancel or defer performance-based remuneration and may also claw back performance-based
remuneration paid in previous financial years.
The Board of DTI Group reserves the right not to pay an STI or LTI if financial performance, earnings per
share and/or operational performance have not met the expectations of the Board.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Directors’ Report
Audited Remuneration Report
The remuneration structure for DTI executives not participating in the MCP is based on a fixed component,
representing base salary plus superannuation. DTI Executives may be granted a cash bonus at the
discretion of the Board.
Fixed Component
Fixed remuneration comprises base salary, employer superannuation contributions and other allowances
and non-cash benefits. Each Executive’s fixed remuneration is reviewed and benchmarked annually.
Variable Component – STI and LTI
Variable remuneration for participants in the MCP comprises STIs linked to Company and individual
performance over one year, and LTIs linked to performance over a period greater than a year. The following
table sets out the maximum variable remuneration each Executive Officer could have achieved, on an
annualised basis, in FY19, expressed as a percentage of total remuneration, if maximum performance was
achieved for the STI and LTI components of their variable components.
Executives
Fixed
Variable – STI
Variable – LTI
2019
2018
2019
2018
2019
2018
Peter Tazewell
Managing Director
Frank Havelka
Chief Executive Officer
Richard Johnson
Executive Director
Michelle Kong
Chief Financial Officer
Raj Surendran
Chief Financial Officer
Bruce Mitchell
Chief Financial Officer
Andy Oldland
General Manager - Operations
63.3
63.3
15.8
15.8
20.9
20.9
100.0
n/a
n/a
n/a
n/a
n/a
63.2
63.2
15.8
15.8
21.0
21.0
100.0
n/a
n/a
100.0
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Key Performance indicators (KPIs) for incentive payments
The KPIs for incentive payments for those executives participating in the MCP are as follows:
Incentive Metric
Weighting
(%)
Test
Outcome
STI
STI
LTI
LTI
Budgeted
EBITDA
Other
subjective
70.0
Achievement of Budgeted EBITDA
-
30.0
Successful project execution, achievement of anticipated margins,
Business expansion, service levels and product reliability
EPS accretion
50.0
Compared to prior year
Other
subjective
–
50.0
Leadership, replicability and character
Below target
Below target
Below target
At target
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Directors’ Report
Audited Remuneration Report
Relationship between the remuneration policy and company
performance
One of the directors’ remuneration objectives is to align the interests of its key management personnel with
the interests of the Company and its shareholders. In FY19 this was achieved through the participation of
the Company’s two principal executives in the MCP which placed a material proportion of executives’
remuneration at risk. It is intended to introduce an incentive plan for other executives in the future.
As noted previously, no awards of STI will be made to DTI executives in relation to FY19. Refer Table on
page 20 for further remuneration details of key management personnel.
The relationship between remuneration and DTI’s performance for the following executive KMPs are set out
below.
Peter Tazewell
• ST Incentive cash bonus based on the achievement of budgeted EBITDA (50 per cent weighting),
achievement of revenue, profit before and after tax and operating and investing cash flow (20 per cent
weighting) and the achievement of other criteria including expansion and diversification, business plans
and strategy (30 per cent weighting). The composition of the cash bonus is 12.5 per cent of the package
guide or up to 25 per cent of the base salary for exceptional performance.
• LT Incentive based on the achievement of earnings per share performance compared to the previous
period (50 per cent weighting) and non-financial performance including shareholder and broker
relationships, communication and presentation skills, board-reporting and management information
systems, risk assessment and problem solving, forward thinking and innovative mindset (50 per cent
weighting). The LT Incentive forms 12.5 per cent of the package guide or up to 33.3 per cent of the base
salary for exceptional performance.
• Mr Tazewell was allocated 300,000 performance rights as an LTI in FY19 which will be subjected to
further service and performance conditions. Refer to DTI Employee Performance Rights page 24.
Richard Johnson
• Cash bonus based on the achievement of budgeted EBITDA (70 per cent weighting) and the
achievement of other criteria including projects and margins, business expansion, service levels and
product reliability (30 per cent weighting). The composition of the cash bonus is 12.5 per cent of the
package guide or up to 25 per cent of the base salary for exceptional performance.
• LT Incentive based on the achievement of earnings per share performance compared to the previous
period (50 per cent weighting) and non-financial performance including leadership, replicability and
character (50 per cent weighting). The LT Incentive forms 12.5 per cent of the package guide or up to
33 per cent of the base salary for exceptional performance.
• Mr Johnson was allocated 100,000 performance rights as an LTI in FY19 which will be subjected to
further service and performance conditions. Refer to DTI Employee Performance Rights page 24.
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Directors’ Report
Audited Remuneration Report
Remuneration of directors and key management personnel
Details of the elements comprising the remuneration of the Company’s key management personnel are set
out in the following table. The table does not include the following components of remuneration because
they were not part of the remuneration package offered to Executives during FY19:
•
•
•
•
•
Short term cash profit sharing bonuses;
Payments made to KMP in respect of a period before or after the person held the KMP position;
Long term incentives distributed in cash;
Post employment benefits other than superannuation; and
Non-monetary benefits.
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Directors’ Report
Audited Remuneration Report
Short-term Benefits
Employment
Benefits
Post
Long-term
Share Based
Benefits
Payments
Proportion
Total
Performance
related
Salary &
fees
STI
Total
annuation
Service
Super-
Long
benefits
Leave
$
$
$
$
$
$
$
%
Non - Executive Directors
G Purdy 1
2019
33,288
(Chairman)
S Gallagher 2
N Goodey 3
A Lewis 4
G Denison 5
J King 6
C Morris 7
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
-
21,250
-
36,090
47,184
21,250
-
14,583
35,000
21,853
40,000
-
18,333
Executive Directors/Officers
PJ Tazewell 8
(MD & CEO)
FJ Havelka 9
(CEO)
R Johnson 10
(Commercial Exec)
I Hobson 11
(Co. Secretary)
M Kong 12
(CFO)
R Surendran 13
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
300,000
300,000
29,270
-
287,177
264,292
3,900
-
45,000
-
155,171
(CFO/Co. Secretary)
2018
215,205
B Mitchell 14
2019
-
(CFO/Co. Secretary)
2018
27,492
A Oldland 15
(GM - Operations)
Total
Total
2019
2018
2019
-
125,306
968,832
2018
1,072,812
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,288
-
21,250
-
36,090
47,184
21,250
-
14,583
35,000
21,853
40,000
-
18,333
-
-
-
-
3,429
-
-
-
-
-
4,483 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,288
-
21,250
-
39,519
51,667
21,250
-
14,583
35,000
21,853
40,000
-
18,333
0.0%
n/a
0.0%
n/a
0.0%
0.0%
0.0%
n/a
n/a
0.0%
n/a
0.0%
n/a
n/a
3,500
324,031
1.1%
300,000
20,531
300,000 25,000
-
-
325,000 0.0%
29,270
2,375
-
-
-
-
-
-
31,645
-
287,177
22,248
12,662
1,167
323,254
0.0%
n/a
0.4%
264,292 22,800 4,000
-
291,092 0.0%
3,900
-
-
-
45,000
4,275
-
155,171
215,205
-
-
14,094
21,973
-
27,492
1,023
-
125,306
968,832
-
11,619
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,900
-
49,275
-
1,167
170,432
-
-
-
-
-
237,178
-
28,515
-
136,925
0.0%
n/a
0.0%
n/a
0.7%
0.0%
n/a
n/a
n/a
n/a
66,952
12,662
5,834
1,054,280
1,072,812
86,898
4,000
-
1,163,710
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Directors’ Report
Audited Remuneration Report
1. Mr Purdy was appointed to the Board on 16 October 2018 and as Chairman on 20 November 2018.
2. Mr Gallagher was appointed to the Board on 16 October 2018.
3. Mr Goodey stepped down as Chairman on 20 November 2018 and remains on the Board as a non-executive director.
4. Mr Lewis was appointed to the Board on 16 October 2018.
5. Mr Denison resigned from the Board on 20 November 2018.
6. Mr King resigned from the Board on 17 January 2019.
7. Mr Morris resigned from the Board on 4 January 2018.
8. Mr Tazewell resigned from both the Board and ceased to be KMP on 30 June 2019.
9. Mr Havelka commenced as CEO on 31 May 2019.
10. Mr Johnson resigned from the Board on 16 October 2018 and ceased to be KMP on 14 August 2019.
11. Mr Hobson commenced as Company Secretary on 21 February 2019.
12. Ms Kong commenced as CFO on 1 April 2019.
13. Mr Surendran resigned as Company Secretary on 8 February 2019 and ceased to be a KMP on 4 March 2019.
14. Mr Mitchell ceased to be a KMP on 24 July 2017.
15. Mr Oldland ceased to be a KMP on 10 January 2018.
Key terms of employment contracts
The Company has formal employment contracts with each of its former and continuing executives as set out
below:
Name
Frank Havelka1
Michelle Kong
Peter Tazewell
Fixed
Remuneration
$372,242
$213,525
$325,000
Richard Johnson
$262,800
Raj Surendran
Bruce Mitchell
Andy Oldland
$240,900
$175,000
$219,000
MCP Participant
Duration
Notice Period
Termination
Benefits
No
No
Yes
Yes
No
No
No
Ongoing
Ongoing
Ceased
Ceased
Ceased
Ceased
Ceased
Four weeks
Four weeks
Four weeks
Four weeks
Four weeks
Four weeks
Four weeks
None
None
None
None
None
None
None
1. Mr Havelka’s package includes $51,240 per annum of remote allowance for living in Perth.
* Refer page 16 and 17 for details of MCP plan and criteria.
The Company also has letters of appointment with each of its Non-executive directors.
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Directors’ Report
Audited Remuneration Report
Loans to Key management personnel
There are no loans from the Company to a KMP.
Key management personnel equity holdings
The movement during the reporting period in the number of shares in DTI Group Limited held directly,
indirectly or beneficially, by each key management person, including related parties, is as follows:
2019
Directors
G Purdy 1
S Gallagher 2
N Goodey
A Lewis 3
P Tazewell
G Denison 4
J King 5
Executives
F Havelka 6
R Johnson
M Kong 7
R Surendran 8
Balance at
1 July 2018
No.
Granted as
Remuneration
No.
On Exercise of
Options
No.
Net Other
Change
No.
Balance at
30 June 2019
No.
n/a
n/a
6,575,198
n/a
360,000
3,030,495
767,892
n/a
841,344
n/a
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,575,198
1,875
360,000
n/a
n/a
-
841,344
-
n/a
1. Mr Purdy commenced as KMP from 16 October 2018, and the presentation in this table may not indicate the status of his shareholding at the
beginning of the relevant reporting period.
2. Mr Gallagher commenced as KMP from 16 October 2018, and the presentation in this table may not indicate the status of his shareholding at the
beginning of the relevant reporting period.
3. Mr Lewis commenced as KMP from 16 October 2018, and the presentation in this table may not indicate the status of his shareholding at the
beginning of the relevant reporting period.
4. Mr Denison ceased to be a KMP on 20 November 2018 and the presentation in this table may not indicate the status of his shareholding at the end of
the relevant reporting period
5. Mr King ceased to be a KMP on 17 January 2019 and the presentation in this table may not indicate the status of his shareholding at the end of the
relevant reporting period.
6. Mr Havelka commenced as KMP from 31 May 2019, and the presentation in this table may not indicate the status of his shareholding at the beginning
of the relevant reporting period.
7. Ms Kong commenced as KMP from 1 April 2019, and the presentation in this table may not indicate the status of her shareholding at the beginning of
the relevant reporting period.
8. Mr Surendran ceased to be a KMP on 4 March 2019 and the presentation in this table may not indicate the status of his shareholding at the end of the
relevant reporting period
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Directors’ Report
Audited Remuneration Report
2018
Directors
N Goodey
P Tazewell
R Johnson
G Denison
J King
C Morris 1
Executives
R Surendran
B Mitchell 2
A Oldland 3
Balance at
1 July 2017
No.
Granted as
Remuneration
No.
On Exercise of
Options
No.
Net Other
Change
No.
Balance at
30 June 2018
No.
6,575,198
150,000
494,908
3,030,495
451,701
24,549,506
-
533,835
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,575,198
210,000
346,436
-
316,191
-
-
-
-
360,000
841,344
3,030,495
767,892
n/a
-
n/a
n/a
1. Mr Morris ceased to be a KMP on 4 January 2018 and the presentation in this table may not indicate the status of his shareholding at the end ofthe
relevant reporting period
2. Mr Mitchell ceased to be a KMP on 24 July 2017 and the presentation in this table may not indicate the status of his shareholding at the end of the
relevant reporting period.
3. Mr Oldland ceased to be a KMP on 10 January 2018 and the presentation in this table may not indicate the status of his shareholding at the end of
the relevant reporting period.
DTI Employee Share Plan
The DTI Employee Share Plan (DESP) has been established to permit shares to be issued by the Company
to employees for no cash consideration. All permanent employees (excluding directors) who have been
continuously employed by the group for a period of at least one year are eligible to participate in the scheme.
Employees may elect not to participate in the scheme.
The shares are recognised at the closing share price on the grant date (31c on 15 April 2016) as an issue of
treasury shares by the trust and as part of employee benefit costs over the period the shares vest. The
shares vest one third per year on the anniversary date of 15 April over the subsequent three years.
DTI Capital Pty Ltd (Trustee), a wholly owned subsidiary of the Company, has been appointed by the
Company to act as the trustee of the DESP. The Company has issued 2,000,000 DESP shares to the
Trustee to hold for the benefit of employees until the DESP shares cease to be subject to any vesting
conditions, at which time the DESP shares will be transferred to the employee or sold on behalf of the
employee, with the sale proceeds remitted to the employee.
Treasury shares are shares in the Company that are held by DTI Capital Ltd for the purpose of issuing
shares under the DESP. The shares are held as treasury shares until such time as they are vested.
Forfeited DESP shares may be reallocated in subsequent grants.
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Directors’ Report
Audited Remuneration Report
DTI Employee Performance Rights
On 20 November 2018 during the Annual General Meeting of Shareholders, it was resolved that DTI would
be permitted to issue performance rights, options and restricted shares under a new DTI Group Limited
Equity Plan. The Company has established the Plan to assist in the motivation, retention and reward of
employees and replaces the DESP.
The Plan is designed to align the interests of executives and employees with the interests of shareholders by
providing an opportunity for the participants to receive any equity interest in the Company. At the date of this
report 273,000 shares and 925,000 Performance Rights have been granted under this plan.
The performance rights have a three-year vesting period and will be subject to a relative total shareholder
return hurdle (RTSR Hurdle), which compares the total shareholder return performance of the Group with
each of the entities within the S&P/ASX Small Ordinaries Index. The performance rights are valued using a
hybrid option pricing model. The model uses a correlated simulation that simultaneously calculates the RTSR
of the Company and each constituent of the Peer Group on a risk neutral basis as at the vesting date with
regards to the performance period. The fair value at grant date each performance right issued was $0.035.
Company’s RTSR percentile rank against comparator group Vesting percentage
Less than 50th
At 50th
Between 50th and 75th
At 75th
Nil
50%
50 – 100% on a straight-line basis
100%
Reliance on External Remuneration Consultants
There has not been any reliance on external remuneration consultants.
Adoption of Remuneration Report
At the 2018 Annual General Meeting, the resolution adopting the 2018 Remuneration Report was carried
unanimously.
The Company received more than 98.1 per cent of “yes” votes on its Remuneration Report for the 2018
financial year. The Company did not receive any specific feedback at the Annual General Meeting or
throughout the year on its remuneration practices.
This concludes the remuneration report, which has been audited.
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Directors’ Report
Audited Remuneration Report
Signed in accordance with a resolution of the Directors made pursuant to section 298(2) of the Corporations
Act 2001.
GREG PURDY
Chairman
30 August 2019
Perth, Australia
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Page | 25
Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2019
Sales Revenue
Cost of Goods Sold
Gross Margin
Operational overheads
Impairment costs
Other income
Corporate overheads
Depreciation/amortisation
Net interest and finance gain/(loss)
Net Loss Before Tax
Tax benefit
Net Loss After Tax
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss:
Exchange differences
Total other comprehensive income/(loss)
Total comprehensive loss for the period
Total comprehensive loss is attributable to:
Owners of DTI Group Ltd
Loss per share for loss attributable to the
ordinary equity holders of the Company:
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Note
2019
$
2018
$
2
2
2
2
2
3
19,176,894
(17,790,673)
1,386,221
(2,979,000)
(5,010,923)
1,774,903
(3,351,080)
(1,355,778)
36,315
(9,499,342)
58,632
(9,440,710)
19,103,076
(15,899,380)
3,203,696
(3,618,772)
(7,592,407)
818,463
(2,938,626)
(2,997,747)
(39,976)
(13,165,369)
1,781,058
(11,384,311)
15,699
15,699
(481,747)
(481,747)
(9,425,011)
(11,866,058)
(9,425,011)
(11,866,058)
22
22
(4.42)
(4.42)
(8.72)
(8.72)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Financial Statements
Consolidated Statement of Financial Position
as at 30 June 2019
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Contract costs
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
Note
2019
$
2018
$
4
5
2
2
8
9
10
6
2
7
11
11
3
13
16
16
2,033,105
3,580,653
441,919
1,376,690
5,626,252
167,391
13,226,010
5,130,652
7,335,246
–
–
7,999,326
93,573
20,558,797
421,934
261,309
683,243
13,909,253
1,114,907
315,806
1,430,713
21,989,510
4,008,668
2,745,739
46,842
1,794,228
8,595,477
5,528,770
–
112,966
1,156,059
6,797,795
36,760
–
36,760
8,632,237
5,277,016
46,255
63,522
109,777
6,907,572
15,081,938
30,955,098
459,336
(26,137,418)
5,277,016
30,955,098
295,050
(16,168,210)
15,081,938
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Financial Statements
Consolidated Statement of Changes in Equity
for the year ended 30 June 2019
Contributed
Equity
$
Note
Employee
Share Plan
Reserve
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
$
Total
$
At 30 June 2017
Loss for the year
Other comprehensive
loss
Total comprehensive
loss for the year
Transactions with
owners in their
capacity as owners
Recognition of share-
based payments
Issue of share capital
Capital raising costs
At 30 June 2018
Impact of changes in
accounting policies
Restated equity at
the beginning of the
year
Loss for the year
Other comprehensive
income
Total comprehensive
income/(loss) for the
year
Transactions with
owners in their
capacity as owners
Recognition of share-
based payments
At 30 June 2019
24,969,359
–
202,373
–
451,812
–
(4,783,899)
(11,384,311)
20,839,645
(11,384,311)
–
–
–
(481,747)
–
(481,747)
–
(481,747)
(11,384,311)
(11,866,058)
–
6,206,919
(221,180)
30,955,098
122,612
–
–
324,985
–
–
–
(29,935)
–
–
–
(16,168,210)
122,612
6,206,919
(221,180)
15,081,938
2500
–
–
–
(528,498)
(528,498)
30,955,098
324,985
(29,935)
(16,696,708)
14,553,440
–
–
–
–
–
–
–
(9,440,710)
(9,440,710)
15,699
–
15,699
15,699
(9,440,710)
(9,425,011)
–
30,955,098
148,587
473,572
–
(14,236)
–
(26,137,418)
148,587
5,277,016
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Financial Statements
Consolidated Statement of Cash Flows
for the year ended 30 June 2019
Cash flows used in operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
R&D grant received
Interest paid
Tax paid
Net cash outflow used in operating activities
Cash flows used in investing activities
Payments for plant and equipment
Payments for intangible assets
Net cash outflow used in investing activities
Cash flows (used in)/from financing activities
Proceeds from issues of shares
Share issue expenses
Proceeds from borrowings
Repayment of borrowings
Net cash (used in)/from financing activities
Note
2019
$
2018
$
12(b)
23,834,278
(26,392,966)
41,566
1,568,581
(5,251)
(4,890)
(958,682)
21,177,089
(24,124,418)
6,576
2,690,218
(46,552)
(9,593)
(306,680)
(85,381)
(2,016,614)
(2,101,995)
(587,822)
(2,810,682)
(3,398,504)
–
–
167,910
(234,034)
(66,124)
6,206,919
(221,180)
1,000,000
(1,392,630)
5,593,109
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at the beginning of the
year
Effect of foreign exchange on opening balances
Cash and cash equivalents at the end of the year
(3,126,801)
1,887,925
5,130,652
29,254
2,033,105
3,139,852
102,875
5,130,652
12(a)
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 1: Segment information
Operating segments were reported in a manner consistent with the internal reporting provided to the chief
operating decision maker.
The CODM is the Chief Executive Officer (CEO) who monitors the operating results of the consolidated
group and organises its business activities and product lines to serve the global mass transit industry. The
performance of the consolidated group is evaluated based on Earnings before Interest, Taxes, Depreciation
and Amortisation (“EBITDA”) which is measured in accordance with the Group’s accounting policies.
The following is an analysis of the Group’s revenue and results from continuing operations by reportable
segment.
Segment Revenues and Results
Sales Revenue
Cost of Goods Sold
Gross Margin
Gross Margin
Impairment of intangible assets
Impairment of inventory
Impairment of trade receivables
Impairment of contract costs
Other Income
Operational overheads
Corporate overheads
EBITDA
Depreciation/amortisation
EBIT
Net Interest and finance loss
Net loss before tax
Tax benefit/(expense)
Net loss after tax
2019
$
19,176,894
(17,790,673)
1,386,221
7%
(1,493,687)
(2,668,910)
(348,326)
(500,000)
1,774,903
–
(6,330,080)
(8,179,879)
(1,355,778)
(9,535,657)
36,315
(9,499,342)
58,632
(9,440,710)
(3,618,772)
(2,938,626)
2018
$
19,103,076
(15,899,380)
3,203,696
17%
(5,163,573)
(2,045,819)
(383,015)
–
818,463
–
(6,557,398)
(10,127,646)
(2,997,747)
(13,125,393)
(39,976)
(13,165,369)
1,781,058
(11,384,311)
(2,979,000)
(3,351,080)
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 1: Segment information (cont’d)
Segment Assets and Liabilities
Total Assets & Liabilities
Consolidated total assets
Consolidated total liabilities
Geographical Assets
Australia
Others
Geographical Liabilities
Australia
Others
Major customers
2019
$
2018
$
13,909,253
8,632,237
21,989,510
6,907,572
8,772,154
5,137,099
13,909,253
14,670,741
7,318,769
21,989,510
5,817,544
2,814,693
8,632,237
5,582,756
1,324,816
6,907,572
DTI supplies goods and services to a broad range of customers in the transit industry. During the reporting
period, three (2018: four) major customers accounted for in excess of 49 per cent (2018: 30 per cent) of
Group’s revenue.
Note 2: Revenue and expenses
AASB 15 Revenue from Contracts with Customers
The Group has adopted AASB 15 Revenue from Contracts with Customers with a date of initial application of
1 July 2018. As a result, the Group has changed its accounting policy for revenue recognition as detailed
below.
The Group has applied AASB 15 using the cumulative effect method and therefore the comparative
information has not been restated and continues to be reported under AASB 118. The details of accounting
policies under AASB 118 are disclosed separately if they are different from those under AASB 15 and the
impact of changes is disclosed in Note 25.
A. Significant accounting policy
Revenue is measured based on the consideration specified in a contract with a customer and excludes
amounts collected on behalf of third parties. The Group recognises revenue when it transfers control over a
product or service to a customer.
In the comparative period 30 June 2018, revenue was recognised at fair value of the consideration received
net of the amount of GST or value added tax payable to the taxation authorities. Sales of products were
recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and
can be measured reliably. Risks and rewards were considered passed to the buyer at the time of delivery of
the goods to the customer or at the point where billing threshold has been met. Service revenue was
recognised when the fees in respect of services rendered were earned, usually when services had been
provided to customers or as per terms and conditions of service contracts.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 2: Revenue and expenses (cont’d)
B. Nature of Goods and Services
The following is a description of the principal activities from which the Group generates its revenue.
Products and services Nature, timing of satisfaction of performance obligations and significant
Sale of goods only
Project-based services
Maintenance and
technical support
payment terms
The Group recognises revenue when the customers obtain control of the
goods. This usually occurs when the goods are delivered. The amount of
revenue recognised for goods delivered is adjusted for expected returns.
Invoices are generated and revenue is recognised at that point in time.
Invoices are usually payable within 45 days (credit term). No element of
financing is deemed present as the sales are made within standard credit term,
which is consistent with market practice. The Group’s obligation to provide a
refund or replacement for faulty products under the standard warranty terms is
recognised as a provision.
Some contracts include multiple deliverables, such as the provision and
installation and commission of hardware and software. These multiple
deliverables form an integration service and could not be performed by another
party, the goods and services represent a single combined performance
obligation over which control is considered to transfer over time. This is
because the provision of goods and services by the Group enhance an asset
(i.e trains or buses) that the customer controls as the asset is enhanced.
Revenue is recognised overtime as the customisation or integration work is
performed, using the cost to cost input method to estimate progress towards
completion. When cost incurred is not proportionate to the entity’s progress in
satisfying the performance obligation, the input method is adjusted to
recognise revenue only to the extent of that cost incurred (For example, goods
have been delivered to the customers but installation has not commenced).
that give rise
Estimates of revenues, costs or extent of progress toward completion are
revised if circumstances changes. Any resulting increases or decreases in
estimated revenues or costs are reflected in profit or loss in the period in which
the circumstances
the revision become known by
to
management. Customers usually pay according to the agreed invoicing
schedule or contract milestones. If the goods and services rendered by the
Group exceed the payment, a contract asset is recognised. If the payments
exceed the goods and services rendered, a contract liability is recognised.
The Group provides maintenance and technical services. These services are
usually bundled together with sales of products or provision of project services
to customer. The maintenance and technical support can be obtained from
other providers and do not significantly customise or modify the product sold.
When these service is bundled together with other services provided by the
Group, the Group performed a re-allocation of contract consideration based on
the relative stand-alone selling prices of its bundled services. For maintenance
and technical support, which is billed based on hourly basis, the Group
recognises revenue as the services are performed.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 2: Revenue and expenses (cont’d)
C. Impact of initial adoption of AASB 15
Refer to Note 25.
D. Impact of initial adoption of AASB 15
Refer to Note 25.
E. Disaggregation of Revenue
In the following table, revenue is disaggregated by primary geographical market, major products/service lines
and timing of revenue recognition.
Primary geographical markets
Australia
Europe & Others
North America
Major products/service lines
Sale of products
Project-based services
Maintenance
Revenue recognition
At a point in time
Over time
2019
$
9,603,219
2,221,484
7,352,191
19,176,894
8,275,966
8,431,430
2,469,498
19,176,894
8,275,966
10,900,928
19,176,894
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 2: Revenue and expenses (cont’d)
F. Impact of adopting AASB 15 on current period financial statements
The following tables summarise the impact of adopting AASB 15 as compared to AASB 118 and related
interpretations that were in effect before the changes on the Group’s consolidated financial statements for
the year ended 30 June 2019.
(i)
Consolidated statement of financial position (extracted)
As at 30 June 2019
Impact of changes in accounting policies
Current assets
Contract assets
Contract costs
Inventories
Total assets
Current liabilities
Contract liabilities
Total liabilities
Net assets
Equity
Accumulated losses
Reserves
Total equity
As reported
$
Adjustments
$
Balances without
adoption of
AASB 15
$
441,919
1,376,690
5,626,252
13,909,253
(441,919)
(1,376,690)
1,376,690
(441,919)
–
–
7,002,942
13,467,334
2,745,739
8,632,237
5,277,016
(2,745,739)
(2,745,739)
2,303,820
–
5,886,498
7,580,836
(26,137,418)
459,336
5,277,016
2,303,820
–
2,303,820
(23,833,598)
459,336
7,580,836
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 2: Revenue and expenses (cont’d)
(ii)
Consolidated statement of profit or loss and OCI (extracted)
For the Year ended 30 June 2019
Impact of changes in accounting policies
As reported
Adjustments
$
$
Balances without
adoption of
AASB 15
$
Sales revenue
Net loss after tax
Other comprehensive income
19,176,894
(9,440,710)
15,699
2,745,739
2,303,820
–
21,922,633
(7,136,890)
15,699
Total other comprehensive income
15,699
–
15,699
Total comprehensive loss for the period
(9,425,011)
2,303,820
(7,121,191)
F. Contract balances and contract costs
Contract assets
Contract costs
Contract liabilities
30 Jun 2019
$
1 July 2019*
$
441,919
1,376,690
1,818,609
–
1,036,774
1,036,774
2,745,739
2,745,739
320,296
320,296
* The Group has adopted cumulative effect method, under this method only balances at transition is
presented.
(i) Definition
Contract Assets
The contract assets primarily relate to the Group’s rights to consideration for work completed but not billed at
the reporting date. The contract assets are transferred to receivables when the rights become unconditional.
Contract Liabilities
The contract liabilities primarily relate to the advance consideration received from customers for project-
based service, for which revenue is deferred until revenue can be recognised on the completion of its
passenger information system.
Contract Costs
Management expects that incremental costs incurred as a result of obtaining project-based contracts are
recovered. These incremental costs of completing a particular project-based contract is capitalised as
contract costs and expensed when the related revenue is recognised. The Group have applied the practical
expedient in paragraph 94 of AASB 15, the Group recognises the incremental costs of obtaining contracts as
an expense when incurred if the amortisation period of the assets that the Group otherwise would have
recognised is one year or less. The Group applies impairment policy on contract costs as stated in Note 10.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 2: Revenue and expenses (cont’d)
(ii) Significant changes in contract assets and contract liabilities
Contract assets have increased as the group has provided more services ahead of the agreed payment
schedules for fixed price-contracts.
Contract liabilities have increased due to to the advance consideration received from customers for project-
based service, for which revenue is deferred until revenue can be recognised on the completion of its
passenger information system.
(iii) Revenue recognised in relation to contract liabilities
Revenue recognised for the year ended 30 June 2019 that was included in the contract liability balance at
the beginning of the period is Nil.
The amount of revenue recognised for the year ended 30 June 2019 from performance obligations satisfied
(or partially satisfied) in previous periods is nil.
(iv) Unsatisfied long-term contracts
The aggregate amount of transaction price allocated to unsatisfied performance obligations resulting from
long-term contracts as at 30 June 2019 is $21.6 million.
Management expects that 56% of the transaction price allocated to the unsatisfied contracts as of
30 June 2019 will be recognised as revenue during the next reporting period. The remaining 44% will be
recognised between 2021 to 2023 financial year. The amount disclosed above does not include variable
consideration which is constrained.
As permitted under the transitional provisions in AASB 15, the transaction price allocated to unsatisfied
performance obligations (partially or fully) as of 30 June 2018 is not disclosed. The Group applies the
practical expedient in paragraph 121 of AASB 15 and does not disclose information about remaining
performance obligations that have original expected durations of one year or less.
G. Other Income
Other Income
R&D grant (i)
Foreign exchange gain
2019
$
2018
$
452,882
1,322,021
1,774,903
347,450
471,013
818,463
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 2: Revenue and expenses (cont’d)
(i) Government grants
Government grants are assistance by the government in the form of transfers of resources to the Company
in return for past or future compliance with certain conditions relating to the operating activities of the entity.
Government grants include government assistance where there are no conditions specifically relating to the
operating activities of the Company other than the requirement to operate in certain regions or industry
sectors. Government grants relating to income are recognised as income over the periods necessary to
match them with the related costs and grants relating to assets are regarded as a reduction in asset.
Government grants that are receivable as compensation for expenses or losses already incurred or for the
purpose of giving immediate financial support to the Company with no future related costs are recognised as
income of the period in which it becomes receivable. The requirements of AASB 120: Government Grants,
R&D Grant Income, requires that income earned from the grant in relation to expenditure on capitalised
intangible assets, are offset against the value of those intangible assets. This is done after reducing it by the
amount of amortisation recognised in the financial year as follows:
R&D grant income earned in current year
R&D grant income offset (included in Note 10)
R&D grant income recognised in the Statement of
Profit or loss and Other Comprehensive Income
2019
$
2018
$
452,882
–
1,158,169
(810,719)
452,882
347,450
Interest income is recognised on a time proportion basis using the effective interest method.
Net interest and finance gain/(loss)
Interest expense
Interest received
Share-based payment expense
Employee share based payment expense
Depreciation and amortisation expense
Depreciation
Amortisation
Impairment expense
Inventory
Intangible assets
Contract cost
Trade receivables
2019
$
2018
$
(5,251)
41,566
36,315
(46,552)
6,576
(39,976)
(148,587)
(122,612)
(778,354)
(577,424)
(1,355,778)
(469,603)
(2,528,144)
(2,997,747)
(2,668,910)
(1,493,687)
(500,000)
(348,326)
(5,010,923)
(2,045,819)
(5,163,573)
–
(383,015)
(7,592,407)
Employee benefits – Wages & Salaries
(7,371,133)
(7,657,246)
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 3: Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the
taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or
substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability
(or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary
differences arising from differences between the carrying amount of assets and liabilities in the financial
statements and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets
are recognised to the extent that it is probable that sufficient taxable income will be available against which
deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax
assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial
recognition of assets and liabilities (other than as a result of a business combination) which affects neither
taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to
taxable temporary differences arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in associates
and are only recognised to the extent that it is probable that there will be sufficient taxable profits against
which to utilise the benefits of the temporary differences and that they are expected to reverse in the
foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s)
when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities
and assets reflects the tax consequences that would follow from the manner in which the Company expects,
at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the consolidated statement of profit or
loss and other comprehensive income, except when it relates to items credited or debited directly to equity,
in which case the deferred tax is also recognised directly in equity, or where it arises from the initial
accounting for a business combination, in which case it is taken into account in the determination of goodwill
or excess.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
Page | 38
Notes to the Consolidated Financial Statements
Note 3: Income tax (cont’d)
(a)
Income tax benefit
Deferred tax
Adjustments for current tax of prior periods
(b) Numerical reconciliation of income tax benefit
to prima facie tax receivable
Loss before income tax benefit
Prima facie tax benefit on loss at 27.5% (2018:27.5%)
Tax effect of:
R&D tax incentive
Other
Other non-deductible
Under/over (prior year adjustments and deferred tax)
Effect of lower / higher statutory income tax rate in the UK and USA
Current year losses for which no deferred tax assets is recognised
Deferred taxes not brought to account
(c) Deferred income tax balances recognised in the accounts
Deferred tax liabilities
Work in progress
Unrealised foreign exchange gain
Property, plant and equipment
Project WIP
Set off of deferred tax liabilities
Net recognised deferred tax liability
Deferred tax assets
Annual leave provision
Long service leave provision
Accrued audit fees and other creditors
Superannuation provision
Patents
Capital raising fees
Provision for diminution in trading stock
Provision for doubtful debts
Tax losses carried forward
Set off of deferred tax liabilities
Unrealised foreign exchange gain/losses
Development costs
Warranty
Deferred tax asset not brought to account as realisation is not probable
Net recognised deferred tax assets
2019
$
2018
$
(58,632)
–
(58,632)
(1,388,405)
(392,653)
(1,781,058)
(9,499,342)
(2,612,319)
(13,165,369)
(3,620,476)
(124,543)
(79,642)
69,853
(63,522)
264,362
1,768,809
718,370
(58,632)
135,386
80,035
1,122,342
(448,334)
225,918
–
724,071
(1,781,058)
–
(59,732)
–
–
59,732
–
(1,562,306)
(181,474)
(10,617)
(329,103)
2,019,978
(63,522)
179,794
88,156
238,882
13,111
–
83,672
417,922
–
3,229,761
(59,732)
–
–
97,026
(4,288,592)
–
199,967
84,724
102,300
14,048
10,503
148,159
10,500
109,211
1,769,649
(2,019,979)
–
286,561
–
(715,643)
–
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
Page | 39
Notes to the Consolidated Financial Statements
Note 3: Income tax (cont’d)
Net deferred tax assets are brought to account when it is probable that immediate sufficient tax profits will be
available against which temporary differences and tax losses can be utilised.
(d) Current tax liabilities
Income tax payable
Franking credits available for this financial year is $44,481 (2018:$44,481).
(e) Reconciliation
The overall movement in deferred tax account is as
follows:
Opening balance
Charge to statement of profit or loss and other
comprehensive income
Closing balance
Note 4: Cash and cash equivalents
2019
$
2018
$
–
–
2019
$
2018
$
(63,522)
(1,451,927)
63,522
–
1,388,405
(63,522)
2019
$
2018
$
Cash at bank
2,033,105
5,130,652
Note 5: Trade and other receivables
Trade receivables and other receivables are recorded at amounts due less any allowance for doubtful debts.
Significant Estimate
Trade Receivable
The loss allowances for trade receivable are based on assumptions about the risk of default and expected
loss rates. The group uses judgements in making these assumptions and selecting inputs to the impairment
calculation based on group past history of defaults, existing market condition as well as forward looking
estimates in each reporting period.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 5: Trade and other receivables (cont’d)
Current
Trade receivables (net of impairment)
Other debtors
R&D grant receivable (i)
(i)
R&D Grant Receivable
2019
$
2018
$
3,452,851
127,802
–
3,580,653
5,959,021
218,056
1,158,169
7,335,246
R&D Receivable in the prior year is based on best estimate prepared by the Group’s tax advisor. The
assessment of R&D claims in relation to 30 June 2019 financial year has not yet commenced and as such no
receivable was provided.
(a) Impaired trade receivables
At 30 June 2019 current trade receivables of the Group with a value of $348,326 (2018: $383,015) were
impaired.
It was assessed that a nominal portion of these receivables is expected to be recovered and the full amount
has been provided for.
Movements in the provision for impairment of
receivables are as follows:
Opening at 1 July
Additional impairment recognized from AASB 9 – initial
adoption – Note 25
Receivable written off during the year as uncollectable
Amount recovered
Closing at 30 June
2019
$
2018
$
364,038
7,651
208,202
348,326
(364,036)
556,530
–
383,015
(26,628)
364,038
The creation and release of the provision for impaired receivables has been included in ‘other expenses’ in
the statement of profit or loss and other comprehensive income. Amounts charged to the allowance account
are generally written off when there is no expectation of recovering additional cash.
(b) Past due but not impaired
At 30 June 2019 trade receivables of $784,333 (2018: $1,921,471) were past due, but not impaired. These
relate to a number of independent customers for whom there is no recent history of default. DTI is confident
that these receivables are collectible and are active in the management and reduction of these overdue
amounts.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 5: Trade and other receivables (cont’d)
The ageing analysis of these trade receivables is as follows:
Up to 3 months
3 to 6 months
Over 6 months
2019
%
68
32
–
100
2018
%
71
6
23
100
2019
$
2018
$
531,477
252,856
–
784,333
1,357,065
114,481
449,925
1,921,471
The other classes within Trade and other receivables do not contain impaired assets and are not past due.
Based on the credit history of these trade receivables, it is expected that these amounts will be received
when due. The Group does not hold any collateral in relation to these receivables.
(c) Foreign exchange and interest rate risk
Information on the Group’s exposure to foreign currency risk and interest rate risk in relation to trade and
other receivables is provided in Note 14.
(d) Fair value and credit risk
Due to the short-term nature of current receivables, their carrying amount is assumed to approximate their
fair value. Credit risk is assessed at the time a customer applies to open a credit account with the Group and
is monitored thereafter on a regular basis. Management assesses the credit quality of the customer, taking
into account its financial position, past experience, trade references, external rating where obtained and
other factors then sets credit limits. The compliance with credit limits by customers is regularly monitored by
management.
Note 6: Trade and other payables
Trade payables and other payables are recognised when the Company becomes obliged to make future
payments resulting from the purchase of goods and services. The amounts are unsecured and are usually
paid within 60 to 90 days of recognition.
Trade payables
Other payables
Superannuation liability
Payroll tax liability
Risk exposure
2019
$
2018
$
3,375,888
538,524
47,676
46,580
4,008,668
4,873,882
581,994
46,826
26,068
5,528,770
Information about the Group’s exposure to foreign exchange is provided in Note 14.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 7: Borrowings
Current Secured:
Net carrying amount – Capital Finance Australia Ltd loan
Net carrying amount – ANZ Ltd loan
Net carrying amount – Monument Premium Funding
2019
$
2018
$
–
–
46,842
46,842
16,564
96,402
–
112,966
In October 2018, the Company financed its insurance premiums through Monument Premium Funding with
the funds to be repaid within the next 12 months.
During the financial year, the company repaid it finance leases with Capital Finance Australia and ANZ Ltd in
full. Therefore, there were no asset financing facilities utilised at 30 June 2019 (2018: $112,966).
Reconciliation of borrowings arising from financing activities:
2018 Cash flows
$
$
Borrowings
112,966
(66,124)
Accounting Policy
Addition
Non-cash changes
Fair value
changes
2019
$
–
$
–
$
46,842
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transactions costs)
and the redemption amount is recognised in the consolidated statement of profit or loss and other
comprehensive income over the period of the borrowings using the effective interest method. Fees paid on
the establishment of loan facilities, which are not an incremental cost relating to the actual draw-down of the
facility, are recognised as prepayments and amortised on a straight-line basis over the term of the facility.
Financing Facility
The group has a $3.5 million, multi-option, multi-currency funding package with Bankwest. The $3.5 million
facility covers the Group’s working capital, bonding and overdraft facilities and encompasses sub-limits for
certain facilities. The working capital, bonding and overdraft facilities can be drawn in multiple currencies
using a variety of instruments. As at 30 June 2019, $885,082 was drawn down as bank guarantee with the
remaining $2,614,918 unutilised. Refer to Note 18(c).
• Refer to Note 15 for capital management details.
• Refer to Note 14 for risk exposures and risk management details.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 8: Inventories
Raw materials / unassembled stock
Work in progress
Impairment of inventory (i)
Provision for inventory obsolescence (ii)
2019
$
2018
$
8,295,162
–
(2,668,910)
–
5,626,252
9,043,371
1,036,774
(2,045,819)
(35,000)
7,999,326
(i)
(ii)
An impairment adjustment of $2,668,910 (2018: $2,045,819) was provided for components and
finished goods relating to projects that were not deemed to be recoverable.
No provision for inventory obsolescence (2018: $35,000) is included in the cost of goods sold in the
statement of profit or loss and other comprehensive income. In determining the obsolescence
provision management reviewed all inventory items and assessed future demand for these items
along with projected maintenance requirements for the support of existing contracts over the coming
years.
Accounting Policy
Inventories are valued at the lower of cost and net realisable value. Costs are assigned to inventory on hand
by the method most appropriate to each particular class of inventory, with the majority being valued on a
weighted average basis by location. Net realisable value is the estimated selling price in the ordinary course
of business less the estimated costs of completion and the estimated costs necessary to make the sale.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 9: Property, plant and equipment
Buildings
At cost
Less accumulated depreciation
Workshop and R&D plant and equipment
At cost
Less accumulated depreciation
Office equipment and software
At cost
Less accumulated depreciation
Motor vehicles
At cost
Less accumulated depreciation
Written Down Value
Movements in carrying amounts:
Buildings
Balance at the beginning of the year
Additions
Depreciation expense
Carrying amount at the end of the year
Workshop and R&D plant and equipment
Balance at the beginning of the year
Additions
Depreciation expense
Carrying amount at the end of the year
Office equipment and software
Balance at the beginning of the year
Additions
Depreciation expense
Carrying amount at the end of the year
Motor vehicles
Balance at the beginning of the year
Additions
Depreciation expense
Carrying amount at the end of the year
Accounting Policy
2019
$
2018
$
138,925
(86,100)
52,825
126,525
(71,314)
55,211
2,093,615
(1,789,857)
303,758
2,055,314
(1,227,761)
827,553
1,384,530
(1,344,917)
39,613
1,378,448
(1,192,441)
186,007
243,489
(217,751)
25,738
214,891
(168,755)
46,136
421,934
1,114,907
55,211
12,400
(14,786)
52,825
65,523
1,699
(12,011)
55,211
827,553
38,301
(562,096)
303,758
616,543
537,192
(326,182)
827,553
186,007
6,082
(152,476)
39,613
256,073
48,931
(118,997)
186,007
46,136
28,598
(48,996)
25,738
58,549
–
(12,413)
46,136
Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 9: Property, plant and equipment (cont’d)
Depreciation is provided on property, plant and equipment. Depreciation is calculated on either a diminishing
value or straight line basis so as to allocate the net cost or other re-valued amount of each asset over its
estimated useful life or in the case of certain leased plant and equipment the shorter lease term.
The following estimated useful lives are used in the calculation of depreciation:
• plant and equipment – 2.5 to 5 years
• motor vehicles under finance lease – 5 years
• buildings – 10 years
Note 10: Intangible assets
At 30 June 2019
Cost (gross carrying amount)
Accumulated amortisation
Impairment expense
Net carrying amount
Movements in carrying amounts
Balance at 1 July 2018
Additions
Amortisation expense
Impairment expense
Net carrying amount
At 30 June 2018
Cost (gross carrying amount)
Accumulated amortisation
Impairment expense
R&D grant income not recognisable
Net carrying amount
Movements in carrying amounts
Balance at 1 July 2017
Additions
Amortisation expense
Impairment expense
R&D grant income not recognisable
R&D grant income not received
Net carrying amount
Development
Costs
$
1,907,292
(413,605)
(1,493,687)
–
–
1,907,291
(413,604)
(1,493,687)
–
Goodwill
Patents
Total
$
–
–
–
–
–
–
–
–
–
$
$
593,065
(331,756)
–
261,309
2,500,357
(745,361)
(1,493,687)
261,309
315,806
109,323
(163,820)
–
261,309
315,806
2,016,614
(577,424)
(1,493,687)
261,309
15,833,540
(7,271,345)
(5,422,597)
(3,139,598)
–
2,432
–
(2,432)
–
–
483,742
(167,936)
–
–
315,806
16,319,714
(7,439,281)
(5,425,029)
(3,139,598)
315,806
5,291,134
2,755,014
(2,473,972)
(5,161,141)
(810,719)
399,684
–
2,432
–
–
(2,432)
–
–
–
314,310
55,668
(54,172)
–
–
–
315,806
5,607,876
2,810,682
(2,528,144)
(5,163,573)
(810,719)
399,684
315,806
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 10: Intangible assets (cont’d)
Accounting Policy
Amortisation of Capitalised Development Costs
In prior financial period, DTI has reassessed the accounting estimates of the amortisation of its Capitalised
Development Costs. DTI has determined that a straight line basis in accordance with AASB108 para.40, is a
more appropriate method rather than amortisation based on the revenue method.
Impairment of assets
At each reporting date, the entity reviews the carrying amounts of its assets to determine whether there is
any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where the asset does not generate cash flows that are independent from other assets, the entity estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An
impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value,
in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is
increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss
been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is
recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the
reversal of the impairment loss is treated as a revaluation increase.
Intangibles
Internally generated intangible assets, excluding capitalised development costs, are not capitalised and
expenditure is recognised in profit or loss in the year in which the expenditure is incurred.
Capitalised Development Costs
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects
(relating to the design and testing of new or improved products) are recognised as intangible assets when it
is probable that the project will be a success considering its commercial and technical feasibility and its costs
can be measured reliably. The expenditure capitalised comprises all directly attributable costs, including
costs of materials, services and direct labour. Other development expenditures that do not meet these
criteria are recognised as an expense as incurred. Development costs previously recognised as an expense
are not recognised as an asset in a subsequent period.
The carrying value of an intangible asset arising from development expenditure is tested for impairment
annually when the asset is not yet available for use, or more frequently when an indication of impairment
arises during the reporting period. All other intangible assets are tested for impairment whenever events or
changes in circumstances indicate that the company amount may not be recoverable.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 10: Intangible assets (cont’d)
A summary of the policies applied to the Group’s intangible assets is as follows:
Policy
Useful lives
Amortisation methods
used
Internally generated or
acquired
Impairment testing
Patents
Finite
Amortised over the period
of expected future benefits
from the related project on
a straight-line basis
Development Costs
Finite
Amortised over the period
of expected future benefits
from the related product
on a straight-line basis
Acquired
Internally generated
Annually and more
frequently when an
indication of impairment
exists
Annually for assets not yet
available for use and more
frequently when an
indication of impairment
exists. The amortisation
method is reviewed at
each financial year end
Significant estimates: Useful life of Patents and Development cost
Patents have been assessed as having a useful life and are amortised using the straight line method over a
period of 10 years. The patents have been granted for between 15 and 20 years by the relevant government
agency.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the assets and are recognised in profit or loss when
the asset is derecognised.
Description of the Group’s Intangible Assets
(a) Development costs
Development costs are carried at cost less accumulated amortisation and accumulated impairment losses.
The net development costs has been subject to impairment testing. If an impairment indicator arises, the
recoverable amount is estimated and an impairment loss is recognised to the extent that the recoverable
amount is lower than the carrying amount.
(b) Goodwill
Goodwill has been externally acquired and is carried at cost less accumulated impairment losses. The
goodwill arose on the acquisition of the remaining 50.5 per cent of Virtual Observer Pty Ltd on 28 June 2012
and represents the difference between the purchase price and the net liabilities. This is fully impaired as at
30 June 2018.
(c) Patents
Patents have been externally acquired and are carried at cost less accumulated amortisation and
impairment losses. This intangible asset has been assessed as having a useful life and is amortised using
the straight line method over a period of 10 years. The patents have been granted for between fifteen and
twenty years by the relevant government agency. If an impairment indication arises, the recoverable amount
is estimated and an impairment loss is recognised to the extent that the recoverable amount is lower than the
carrying amount.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 10: Intangible assets (cont’d)
(d) Impairment
As at 30 June 2019, the market capitalisation of DTI did not exceed its net assets, which is an indicator of
asset impairment under accounting standards. For the purpose of impairment testing the intangibles are
allocated to one cash-generating unit (CGU) on the group level. The recoverable amount of the CGU was
then determined using the value in use model which requires the use of key assumption and judgments
relating to future revenues, anticipated gross margin, growth rates expected and discount rate. The
calculations use cash flow projects based on financial budgets approved by the board covering a period of
five years.
The board determined that the underlying assumptions supporting the impairment were sufficiently sensitive
to create uncertainty of the model outcomes. As a result, the board has taken the decision to impair the
balance of capitalised development costs by $1,493,687 (2018: $5,163,573) to a nil amount.
Note 11: Provisions
Current
Employee entitlements – long service leave
Employee entitlements – annual leave
Provision for restructuring
Provision for warranty
Non-current
Employee entitlements – long service leave
Accounting Policy
2019
$
2018
$
283,807
657,598
500,000
352,823
1,794,228
236,158
668,901
–
251,000
1,156,059
36,760
46,255
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long
service leave, and sick leave when it is probable that settlement will be required and they are capable of
being measured reliably. Provisions made in respect of wages and salaries, annual leave, long service leave
and sick leave expected to be settled within 12 months are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement.
Provision for restructuring represents the costs associated with the re-organisation of the operations of the
business in the next six to nine months in order to improve the overall efficiency and longer-term profitability
of the business.
The provision for warranty claims represents the present value of the directors’ best estimate of the future
outflow of economic benefits that will be required under the group’s obligations for warranties under local
sale of goods legislation. The estimate has been made on the basis of historical warranty trends and may
vary as a result of new materials, altered manufacturing processes or other events affecting product quality.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 12: Notes to the cash flow statement
For statement of cash flow purposes, cash and cash equivalents includes cash on hand and deposits held at
call with financial institutions.
(a) Reconciliation of cash
For the purpose of the cash flow statement, cash includes cash on hand and in banks and short-term
deposits with banks. Cash at the end of the financial year as shown in the cash flow statement is reconciled
to the related items in the statement of financial position as follows:
Australian Dollar bank accounts
British Sterling bank accounts
US Dollar bank accounts
Euro bank accounts
2019
$
948,177
225,390
460,118
399,420
2,033,105
2018
$
4,285,655
70,887
254,622
519,488
5,130,652
(b) Reconciliation of loss after income tax to the net cash used in operating activities
Net loss after tax
Non-cash items:
Depreciation and amortisation
Employee share plan expense
Impairment of intangible assets
R&D grant income offset against intangible assets
R&D grant income not received
Exchange differences on foreign operations
Change in operating assets and liabilities
Decrease in trade and other receivables
Decrease in inventories
Increase in contract assets
Increase in contract costs
(Increase)/decrease in other assets
Decrease in trade and other payables
Increase in provision
Increase in contract liabilities
Decrease in tax liabilities
Decrease in deferred tax
Net outflow from operating activities
Non-cash financing and investing activities
2019
$
2018
$
(9,440,710)
(11,384,311)
1,355,778
148,587
1,493,687
–
–
(13,555)
2,997,747
122,612
5,163,573
810,719
(399,684)
(584,622)
3,546,392
2,373,074
(441,919)
(1,376,690)
(73,819)
(1,520,102)
628,674
2,425,443
–
(63,522)
(958,682)
4,764,231
818
–
–
140,699
(245,666)
97,855
–
(402,246)
(1,388,405)
(306,680)
Shares were issued to employees on the conversion of options under the DTI Employee Option Plan
(Refer Note 17: Share-based payments).
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
Page | 50
Notes to the Consolidated Financial Statements
Note 13: Contributed equity
Ordinary shares
Balance at the beginning of financial
year
Issued of share capital
Capital raising costs
Shares exercised under employee
share plan
Balance at the end of the financial year*
2019
No.
2019
$
2018
No.
2018
$
213,388,875
30,955,098 124,671,579
24,969,359
–
–
10,725
–
–
–
88,670,271
–
6,206,919
(221,180)
47,025
–
213,399,600
30,955,098 213,388,875
30,955,098
*Balance excludes 1,942,250 Treasury Share held in trust for DESP.
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
Employee Share Plan
The DTI Employee Share Plan (DESP) has been established by the Board to permit shares to be issued by
the Company to employees for no cash consideration and has been put in place by the Company. All
permanent employees (excluding directors) who have been continuously employed by the group for a
period of at least one year are eligible to participate in the scheme. Employees may elect not to participate
in the scheme.
The shares are recognised at the closing share price on the grant date (31c on 15 April 2016) as an issue
of treasury shares by the trust and as part of employee benefit costs over the period the shares vest. The
share vest one third per year on the anniversary date of 15 April over the next three years.
DTI Capital Pty Ltd (Trustee), a wholly owned subsidiary of the Company, has been appointed by the
Company to act as the trustee of the DESP. The Company has issued 2,000,000 DESP shares to the
Trustee to hold for the benefit of employees until the DESP shares cease to be subject to any vesting
conditions, at which time the DESP shares will be transferred to the employee or sold on behalf of the
employee, with the sale proceeds remitted to the employee. As at 30 June 2019, 57,750 shares had vested
with eligible employees and transferred to them, 1,468,250 shares had vested with eligible employees, but
remain registered with the Trustee. The remaining 474,000 shares has not been allocated and has lapsed
and was forfeited. Refer to Note 17.
Treasury shares are shares in the Company that are held by DTI Capital Ltd for issuing shares under the
DESP. The shares are held as treasury shares until they are vested. Forfeited DESP shares may be
reallocated in subsequent grants.
On 20 November 2018 during the Annual General Meeting of Shareholders, it was resolved that DTI would
be permitted to issue performance rights, options and restricted shares under a new DTI Group Limited
Equity Plan. The Company has established the Plan to assist in the motivation, retention and reward of
employees and replaces the DESP.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 13: Contributed equity (cont’d)
The Plan is designed to align the interests of executives and employees with the interests of shareholders by
providing an opportunity for the participants to receive any equity interest in the Company. At the date of this
report 273,000 shares and 925,000 Performance Rights have been granted under this plan.
Performance rights
Pursuant to DTI Group Limited Equity Plan the Company has granted 925,000 performance rights to
executives to align remuneration with the creation of shareholder value over the long-term.
The performance rights have a three-year vesting period and will be subject to a relative total shareholder
return hurdle (RTSR Hurdle), which compares the total shareholder return performance of the Group with
each of the entities within the S&P/ASX Small Ordinaries Index. The performance rights are valued using a
hybrid option pricing model. The model uses a correlated simulation that simultaneously calculates the RTSR
of the Company and each constituent of the Peer Group on a risk neutral basis as at the vesting date with
regards to the performance period. The fair value at grant date each performance right issued was $0.035.
Company’s RTSR percentile rank against comparator group Vesting percentage
Less than 50th
At 50th
Between 50th and 75th
At 75th
Nil
50%
50 – 100% on a straight-line basis
100%
During the year ended 30 June 2019, no performance rights have vested. The share-based payment
expense recognised for the year ended 30 June 2019 was $10,792. The fair value of the performance rights
is $32,375.
Accounting Policy
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds. If the Company re-acquires its own
equity instruments, for example as a result of a share buy-back, those instruments are deducted from equity
and the associated shares are cancelled. No gain or loss is recognised in profit or loss and the consideration
paid including any directly attributable incremental costs (net of income taxes) is recognised directly in
equity.
The Group’s principal financial instruments are cash, trade and other receivables, trade and other payables,
and borrowings. The main purpose of these financial instruments is to raise finance for the Group’s
operations. The Group has various other financial assets and liabilities such as trade and other receivables
and trade payables, which arise directly from its operations. The Group does not enter into derivative
transactions. The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk,
credit risk and foreign exchange risk. The Board reviews and agrees policies for managing each of these
risks.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 14: Financial risk management
The following table details the Group’s exposure to interest rate risk. The amounts disclosed in the tables are
the contractual undiscounted cash flows. The payables cash flows equal their carrying balances as the
impact of discounting is not significant.
Maturing
1 Year or
Less
$
Over 1 to 2
Years
$
Over 2
Years
$
Total
Contractual
Cash Flows
$
Total
Carrying
Value
$
Weighted
Average
Active
Interest
Rate
%
30 June 2019
Financial Liabilities
Fixed rate
Other borrowings
Non-interest
bearing
Payables
46,842
4,008,668
4,055,510
–
–
–
Maturing
–
46,842
46,842
3.45%
–
–
4,008,668
4,055,510
4,008,668
4,055,510
–
–
1 Year or
Less
$
Over 1 to 2
Years
$
Over 2
Years
$
Total
Contractual
Cash Flows
$
Total
Carrying
Value
$
Weighted
Average
Active
Interest
Rate
%
30 June 2018
Financial Liabilities
Fixed rate
Other borrowings
Non-interest
bearing
Payables
114,645
5,528,770
5,643,415
–
–
–
–
114,645
112,966
3.90%
–
–
5,528,770
5,643,415
5,528,770
5,641,736
–
–
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 14: Financial risk management (cont’d)
Net Fair Value
The carrying amount of financial assets and financial liabilities recorded in the financial statements
represents their respective net fair values, determined in accordance with the accounting policies disclosed
in Note 26.
Credit Risk Exposure
The Group's maximum exposure to credit risk at reporting date in relation to each class of recognised
financial assets is the carrying amount of those assets as disclosed in the statement of financial position.
There are no historical default rates in respect of receivables. Cash balances and term deposits are held with
financial institutions of minimum AA ratings.
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a
lifetime expected loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk
characteristics and the days past due. The expected loss rates are based on the payment profiles of sales
over a period of 12 month before 1 July 2019 and the corresponding historical credit losses experienced
within this period. The historical loss rates are adjusted to reflect current and forward-looking information on
macroeconomic factors affecting the ability of the customers to settle the receivables. The Group identified
the GDP and unemployment in which it sells its goods and services to be the most relevant factors, and
accordingly adjusts the historical loss rates based on expected changes in these factors.
Trade receivables are 100% credit impaired when there is no reasonable expectation of recovery. Indicators
that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage
in a repayment plan with the group and a failure to make contractual payments for a period of greater than
120 days past due.
On that basis, the loss allowance at the amount equal to the expected lifetime credit losses under the
simplified approach as at 1 July 2018 and 30 June 2019 was determined as follows for both trade
receivables:
1 July 2018
Current
More
Than 30
Days
Past Due
More
Than 60
Days
Past Due
More
Than 90
Days
Past Due
Credit
Impaired
Total
Expected loss rate
Gross carrying amount of
trade receivables
Loss allowance
2.4%
3.3%
5.4%
9.3%
100%
$5,317,088
$128,293
$77,114
$25,304
$440,594
$23,682
$332,427
$30,923
$364,038
$364,038
$6,531,261
$572,240
30 June 2019
Current
More
Than 30
Days
Past Due
More
Than 60
Days
Past Due
More
Than 90
Days
Past Due
Credit
Impaired
Total
Expected loss rate
Gross carrying amount of
trade receivables
Loss allowance
2.4%
3.3%
5.4%
9.3%
100%
$2,728,792
$65,491
$559,317
$18,457
$20,455
$1,105
$252,856
$23,516
$447,961
$447,961
$4,009,381
$556,530
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 14: Financial risk management (cont’d)
Foreign Exchange Risk
The Group has transactions in currencies other than Australian Dollars which carry receivables and payables
in the respective currency. These financial instruments are not hedged. The Group’s exposure to foreign
currency risk at the end of the reporting period, expressed in Australian dollars, was as follows:
USD
$
460,118
1,154,262
(2,654,886)
(1,040,506)
0.70
30 June 2019
EUR
$
399,420
633,859
(6,011)
1,027,268
0.62
Cash
Trade and other debtors
Trade and other payables
Exchange rates
Interest Rate Risk
GBP
$
225,390
USD
$
254,622
30 June 2018
EUR
$
519,488
1,355,997 2,806,817 1,745,707
(60,301)
(4,824)
(4,057,378)
(995,939) 2,260,371
1,521,086
0.63
0.55
0.74
GBP
$
70,887
242,354
(199,319)
113,922
0.56
The Group's loan and lease arrangements are subject to fixed interest rates and therefore would not have
been impacted by any increase/decrease in interest rates during the current year.
Profit is sensitive to higher/lower interest income from cash and cash equivalents and term deposits as a
result of changes in interest rates. At year end the Group’s bank account was earning interest of 1.50 per
cent (2018:1.50 per cent).
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Board's approach to managing liquidity is to ensure, as far as possible, that the Group will always have
sufficient liquidity to meet its liabilities when due. As at 30 June 2019 and the date of this report, the Group
has sufficient liquid assets to meet its financial obligations.
Sensitivity Analysis
Interest Rate Risk
The Group's loan and lease arrangements are subject to fixed interest rates and therefore would not have
been impacted by any increase/decrease in interest rates during the current year. Accordingly, an increase in
interest rates would not have impacted the Group's interest expense.
Movements in interest rates on the Group’s bank accounts and term deposits would not have a significant
impact on the Group’s results for the year.
Foreign Exchange Rate Risk
Based on the financial instruments held at 30 June 2019, had the Australian dollar weakened by 5 per cent
against the US Dollar, Euro and British Sterling, with all other variables held constant, the Group’s pre-tax
results for the year would have been $79,360 better (2018: $72,545 higher). If the Australian dollar had
strengthened the corresponding impact would be a reduction in pre-tax results by the same amount.
Price Risk
Investments held are not listed or traded in active markets and therefore no price risk arises.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 15: Capital management
The Group’s objectives when managing capital are to:
• safeguard their ability to continue as a going concern, so that they can continue to provide returns for
shareholders and benefits for other stakeholders; and
• maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Under the terms of the major borrowing facilities with Bankwest that were entered into in December 2018,
the Group is required to comply with the following financial covenants:
•
•
the Debtors/Gross Debt must at all times be greater than or equal to 2 times;
tangible net worth must be greater than or equal to $10,000,000; and
• coverage tests – DTI Group Ltd and the guarantor must ensure that combined EBITDA for the preceding
12-month period and combined total assets are at least 90% of the Consolidated Group’s EBITDA and
Consolidated Group’s total assets respectively.
The guarantor is defined as Virtual Observer Pty Ltd and DTI EMEA Limited.
As at 30 June 2019, the Debtors/Gross Debt is 4 times, tangible net worth is $5,015,707 and coverage test is
below 90%. As the tangible net worth of $5,015,707 and coverage test falls below the requirement to support
the current bank guarantee arrangement, the Group is not in compliance with these covenants at
30 June 2019. However, Bankwest has provided a waiver for this non-compliance until the next review in
September 2019.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 16: Reserves and accumulated losses
Reserves
Employee Share Plan reserve
Foreign currency translation reserve
Employee Share Plan Reserve
Balance 1 July
Arising on share-based payments
Balance 30 June
2019
$
2018
$
473,572
(14,236)
459,336
324,985
(29,935)
295,050
324,985
148,587
473,572
202,373
122,612
324,985
Employee Share Plan Reserve records as an expense over the 3 year vesting period, the value of the DTI
Employee Share Plan shares issued. The expense for the current financial year is for the full year.
Foreign currency translation reserve
Balance 1 July
Currency translation differences – current year
Balance 30 June
2019
$
2018
$
(29,935)
15,699
(14,236)
451,812
(481,747)
(29,935)
The foreign currency translation reserve is used to record exchange differences arising from the translation
of the financial statements of foreign subsidiaries.
Accumulated losses
Balance 1 July
Impact of changes in accounting policies
Net loss for the year
Balance 30 June
2019
$
2018
$
(16,168,210)
(528,498)
(9,440,710)
(26,137,418)
(4,783,899)
–
(11,384,311)
(16,168,210)
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 17: Share-based payments
Shares in the DTI Employee Share Plan (DESP) were issued to employees. Details of the DESP are in
Note 13.
Opening Balance
Shares Granted
Shares allocated
Shares vested to employees
Shares forfeited
Shares available /
Closing Balance
2019
Allocated
1,478,975
–
(10,725)
(1,468,250)
–
Avail. To
Allocate
474,000
–
–
–
(474,000)
2018
Allocated
1,636,000
–
(47,025)
–
(110,000)
Avail. To
Allocate
364,000
–
–
–
110,000
–
–
1,478,975
474,000
These represent total number of shares to be issued under the DESP.
Note 18: Capital and leasing commitments
Leased assets classified as finance leases are recognised as assets. The amount initially brought to account
is the present value of minimum lease payments. Finance leased assets are amortised on a diminishing
value basis over the estimated useful life of the asset.
Finance lease payments are allocated between interest expense and reduction of lease liability over the term
of the lease. The interest expense is determined by applying the interest rate implicit in the lease to the
outstanding lease liability at the beginning of each lease payment period. Leases in which a significant
portion of the risks and rewards of ownership are not transferred to the Company as lessee, are classified as
operating leases. Payments made under operating leases (net of any incentives received from the lessor)
are charged to the consolidated statement of profit or loss and other comprehensive income on a straight-
line basis over the period of the lease.
(a) Finance lease commitments
The Company signed two motor vehicle leases commencing in April 2014 and three motor vehicle leases
commencing in November 2014. The leases are with Capital Finance Australia Ltd for a period of five years
with lease payments paid monthly in advance. There are no terms of renewal, purchase options or escalation
clauses in respect of the leases.
In December 2015 and April 2016, DTI negotiated chattel mortgage loans with the ANZ bank to finance the
purchase of specialised technical equipment for R&D. In prior year, the total amount utilised under the facility
was $112,966 at interest rates of 3.99% and 3.90% respectively. The loans were fully repaid at
30 June 2019.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 18: Capital and leasing commitments (cont’d)
Minimum finance lease payable:
Not later than 1 year
Later than 1 year but not later than 5 years
Minimum lease payments
Future finance charges
Present value of minimum lease payments
(b) Operating lease commitments
2019
$
2018
$
–
–
–
–
–
114,645
–
114,645
(1,679)
112,966
The Company signed an operating lease in June 2012 for the land on which the office and workshop
facilities are situated with a lease term of 5 years, with the option to extend for a further 5 years. The
Company does not have the option to purchase the leased asset at the expiry of the lease. The Company
was offered an early lease sign-on benefit in August 2016, which extended the lease until 2022.
DTI EMEA Ltd signed an operating lease commencing 14 May 2018, for an office space in the UK with a
lease term of 5 years. The Company does not have the option to purchase the leased asset at the expiry of
the lease.
Non-cancellable operating lease payable:
Not later than 1 year
Later than 1 year but not later than 5 years
(c) Bank guarantee and insurance bonds
Bank guarantees for unconditional undertaking of contracts
Insurance bonds
2019
$
2018
$
148,680
271,013
419,693
145,732
612,834
758,566
2019
$
2018
$
885,082
-
885,082
107,800
7,063,370
7,171,170
The Company has given bank guarantees relating to performance requirements of contracts. A bank
guarantee in relation to this contract of $760,082 (2018: $Nil) is included in the amounts above.
Under the contract for the lease of land on which the office and workshop facilities are situated, the Company
may at some future point (at the option of the Lessor) be required to “make good” the land and remove the
building and any improvements thereon. The Lessor is required to give four year notice of any such
requirement. A bank guarantee in relation to this contract of $125,000 (2018: $107,800) is included in the
amounts above.
The insurance bonds in previous year relate to guarantees to an unrelated party for the performance in a
contract. No liability is expected to arise.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 19: Going concern
The financial statements have been prepared on a going concern basis, which contemplates the continuity of
normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of
business. The Group recorded a loss after tax of $9.4 million for the year ended 30 June 2019
(2018: $11.4 million loss) and had operating cash outflows of $0.96 million (2018: $0.31 million).
At 30 June 2019, its trade working capital (excluding cash, contract assets, contract costs, contract liabilities,
provisions and borrowings) decreased by $5.2 million to $3.5 million (2018: $8.7 million), and the Group’s
cash and cash equivalents decreased by $3.1 million to $2.0 million (2018: $5.1 million). At 30 June 2019,
the Group is not in compliance with its banking covenant in relation to its bank guarantee. The Group
obtained a waiver from the bank for this (refer to Note 15 and 18). These conditions indicate the existence of
a material uncertainty that may cast a significant doubt about the Group's ability to continue as a going
concern.
The ability of the Group to continue as a going concern is dependent upon the success of the following
measures undertaken by management:
• The Group is expected to receive an additional $3.0 million of working capital from capital raising
subsequent to year end (refer Note 21);
• The Group has $3.5 million of working capital as at 30 June 2019 to fund its working capital
requirements until the completion of capital raising;
• The Group has sufficient cash at the date of this report to deal with the consequence on the non-
compliance of its banking covenants;
• The Group is focused on improving commercial terms to reduce future working capital requirement and
profitability; and
• The Group has recently commenced a turnaround plan and following execution of this plan, they expect
to produce positive cash flow from operations.
The directors believe that there are reasonable grounds that the Group will continue as a going concern.
Should the Group not be able to continue as a going concern, it may be required to realise its assets and
discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those
stated in the financial statements. The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, nor to amounts or classification of liabilities that
might be necessary should the Group not be able to continue as a going concern.
Note 20: Contingent liabilities
There were no contingent liabilities or assets as at 30 June 2019.
Note 21: Events occurring after the reporting period
On 20 August 2019, DTI announced it proposes to make a 5 for 9 non-renounceable entitlement offer to
raise approximately $3 million via the issue of approximately 119.6 million new shares at 2.5 cents per share
(Entitlement Offer). The Entitlement Offer will be underwritten by Finico Pty Ltd and UIL Limited who are
major shareholders of the Company. The proceeds of the capital raising will provide necessary working
capital and to strengthen the Company’s balance sheet for future growth. Pursuant to the Underwriting
Deeds, the Underwriters also agreed to advance the Underwriter Loans ($810,552 from UIL and $971,684
from Finico) to the Company on 20 August 2019, the repayment of which will be satisfied and offset by the
Company via the issue of 32,422,088 New Shares to UIL and 38,867,358 New Shares to Finico under the
proposed Entitlement Offer.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 21: Events occurring after the reporting period (cont’d)
Other than what has been mentioned above, no matters or circumstance have arisen that have significantly
affected, or may significantly affect, the operations of DTI Group Ltd, the results of those operations or the
state of affairs of DTI Group Ltd in subsequent years that is not otherwise disclosed in this report.
Note 22: Earnings/(Loss) per share
Basic Earnings / (Loss) per Share
Basic earnings per share is calculated by dividing:
•
•
the profit or loss attributable to owners of the company, 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.
Diluted Earnings / (Loss) per Share
Diluted earnings/(loss) 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.
Loss per share
2019
Cents per
Share
2018
Cents per
Share
Basic loss per share (cents per share)
(4.42)
(8.72)
Diluted loss per share (cents per share)
(4.42)
(8.72)
Reconciliation of losses used in calculating loss per share
The following reflects the income and share data used in the
calculations of basic and diluted earnings per share:
2019
$
2018
$
Net loss used in calculating basic and diluted earnings per share
(9,440,710)
(11,384,311)
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 22: Earnings/(Loss) per share (cont’d)
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used in calculating
basic loss per share
Weighted average additional shares issued during the period
Adjusted weighted average number of ordinary shares used in
calculating diluted loss per share
2019
Number of
Shares
2018
Number of
Shares
213,388,875
5,260
124,671,579
5,830,794
213,394,135
130,502,373
Note 23: Related-party transactions
(a) Key management personnel
Compensation by category:
key management personnel
Short-term benefits
Long-term benefits
Post-employment benefits
Share based payments
2019
$
2018
$
968,832
12,662
66,952
5,834
1,054,280
1,072,812
4,000
86,898
–
1,163,710
Detailed remuneration disclosures are provided in the remuneration report on pages 14 to 25.
(b) Subsidiaries
The consolidated financial statements include the following subsidiaries:
Name
Incorporation
Shares
DTI Capital Pty Ltd
Virtual Observer Pty Ltd
DTI EMEA Limited
DTI USA Holdings Inc
DTI USA Inc (i)
Digital Technology International
(SA) (Pty) Ltd (ii)
Australia
Australia
UK
USA
USA
South Africa
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
(i) This entity is owned by DTI USA Holdings Inc.
Equity
%
2019
2018
100
100
100
100
100
100
100
100
100
100
100
100
(ii) DTI EMEA Ltd incorporated a wholly owned subsidiary in South Africa, Digital Technology International
(SA) (Pty) Ltd.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 24: Parent entity financial information: DTI Group Ltd
The individual financial statements for the parent entity show the following amounts:
Statement of Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Shareholders’ equity:
Issued capital
Employee share plan reserve
Accumulated losses
Total Equity
Statement of Loss and
Other Comprehensive Loss
Loss for the year
Total comprehensive loss
2019
$
2018
$
7,965,161
2,961,956
10,927,117
13,302,512
6,225,185
19,527,697
5,266,012
384,089
5,650,101
5,277,016
4,368,709
77,050
4,445,759
15,081,938
30,955,098
473,572
(26,151,654)
5,277,016
30,955,098
324,985
(16,198,145)
15,081,938
(9,953,509)
(9,953,509)
(11,896,383)
(11,896,383)
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 25: Impact on the statement of financial position as at 1 July 2018 due to changes in
accounting policies
The following table summarises the impact on the statement of financial position as at 1 July 2018 due to
changes in accounting policies:
Statement of Financial Position
(extract)
30 June 2018
$
AASB 9
(i)
$
AASB 15
(ii)
$
1 July 2018
Restated
$
Current assets
Trade and other receivables
Contract costs
Inventories
Total current assets
Current liabilities
Contract liabilities
Total current liabilities
Net assets
Equity
Accumulated losses
Total equity
7,335,246
–
7,999,326
20,558,797
(208,202)
–
–
(208,202)
–
1,036,774
(1,036,774)
–
7,127,044
1,036,774
6,962,552
20,350,595
–
6,797,795
15,081,938
–
–
(208,202)
320,296
320,296
(320,296)
320,296
7,118,091
14,553,440
(16,168,210)
15,081,938
(208,202)
(208,202)
(320,296)
(320,296)
(16,696,708)
14,553,440
(i) The Group was required to revise its impairment methodology under AASB 9 for it trade receivables
balance. The impact of the change in impairment methodology on the Group’s trade receivables and
retained earnings is shown above.
(ii) Accounting for project-based service
In previous reporting period, the consideration received for non-refundable retainer fee is recognised as
revenue when invoice is raised with associated cost capitalised under inventory. Under AASB 15, the
non-refundable retainer fee is reversed to contract liabilities and only release to revenue based on the
progress of the project when the project commenced.
The associated costs relating to cost to fulfil the project contract is previously recognised in inventories.
Under AASB15, these costs are reclassified to contract costs. These costs are amortised based on the
progress of the related projects, consistent with the pattern of recognition of the associated revenue.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 26: Summary of significant accounting policies
Statement of Compliance
This financial report includes the consolidated financial statements and notes of the Group. The financial
report is a general purpose financial report which has been prepared in accordance with the Corporations
Act 2001, Australian Accounting Standards, Australian Accounting Interpretations, and other authoritative
pronouncements of the Australian Accounting Standards Board. The Group’s financial statements and
accompanying notes also comply with International Financial Reporting Standards (IFRS).
DTI is a for-profit company limited by shares incorporated in Australia whose shares have been publicly
traded on the Australian Securities Exchange from 9 December 2014.
financial statements were authorised as per
The
30 August 2019.
the Directors’ declaration on page 73 dated
Basis of Preparation
The financial report has been prepared on the basis of historical cost. Cost is based on the fair values of the
consideration given in exchange for assets. In the application of IFRS management is required to make
judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily
apparent from other sources.
The estimates and associated assumptions are based on historical experience and various other factors that
are believed to be reasonable under the circumstance, the results of which form the basis of making the
judgments. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period,
or in the period of the revision and future periods if the revision affects both current and future periods.
Refer to Note 26(g) for future disclosure on significant accounting estimates and judgement.
Accounting Policies
Accounting policies are selected and applied in a manner which ensures that the resulting financial
information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the
underlying transactions or other events is reported.
The accounting policies set out below have been applied in preparing the financial statements for the year
ended 30 June 2019 and the comparative information presented in these financial statements for the year
ended 30 June 2018.
The following significant accounting policies have been adopted in the preparation and presentation of the
financial report:
(a) Principles of consolidation
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 26: Summary of significant accounting policies (cont’d)
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment
of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
(b) Classification and initial measurement of financial assets (AASB 9 Financial Instruments)
Accounting Policy
The Group has adopted AASB 9 Financial Instruments with a date of initial application of 1 July 2018.
AASB 9 Financial Instruments replaces AASB 139’s ‘Financial Instruments: Recognition and Measurement’
requirements. It makes major changes to the previous guidance on the classification and measurement of
financial assets and introduces an ‘expected credit loss’ model for impairment of financial assets. When
adopting AASB 9, the Group elected not to restate prior periods. Rather, differences arising from the
adoption of AASB 9 in relation to classification, measurement, and impairment are recognised in opening
retained earnings as at 1 July 2018.
As a result of the adoption of AASB 9, the impairment of financial assets using the expected credit loss
model applies now to the Group’s trade receivables. For contract assets arising from AASB 15 and trade
receivables, the Group applies a simplified model of recognising lifetime expected credit loss as these items
do not have a significant financing component.
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset
expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial
liability is derecognised when it is extinguished, discharged, cancelled or expires.
Financial assets are classified according to their business model and the characteristics of their contractual
cash flows and are initially measured at fair value adjusted for transaction costs (where applicable).
Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets, other than those designated and effective as
hedging instruments, are classified into the following four categories:
• Financial assets at amortised cost
• Financial assets at fair value through profit or loss (FVTPL)
• Debt instruments at fair value through other comprehensive income (FVTOCI)
• Equity instruments at FVTOCI
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Notes to the Consolidated Financial Statements
Note 26: Summary of significant accounting policies (cont’d)
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
Financial assets at amortised cost
Financial assets with contractual cash flows representing solely payments of principal and interest and held
within a business model of ‘hold to collect’ contractual cash flows are accounted for at amortised cost using
the effective interest method. The Group’s trade and most other receivables fall into this category of financial
instruments.
Impairment of financial assets
AASB 9’s new forward looking impairment model applies to Group’s investments at amortised cost and debt
instruments at FVTOCI. The application of the new impairment model depends on whether there has been a
significant increase in credit risk.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as
contract assets and records the loss allowance at the amount equal to the expected lifetime credit losses. In
using this practical expedient, the Group uses its historical experience, external indicators and forward
looking information to calculate the expected credit losses using a provision matrix (Refer Note 14).
Impact of the new impairment model
For assets in the scope of the AASB 9 impairment model, impairment losses are generally expected to
increase. The Group has determined that the application of AASB 9’s impairment requirements at 1 July
2018 results in an additional impairment allowances as follows.
$
Loss allowance at 30 June 2018 under AASB 139
364,038
Additional impairment recognised at 1 July 2018 on:
Trade and other receivables as at 30 June 2018 (Refer to
note 14 and note 25)
208,202
Loss allowance at 1 July 2018 under AASB 9
572,240
(c) Foreign currency
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of
the primary economic environment in which the entity operates (‘the functional currency’).
The consolidated financial statements are presented in Australian dollars, which is the Company’s functional
and presentation currency.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 26: Summary of significant accounting policies (cont’d)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at
year end exchange rates are generally recognised in profit or loss. They are deferred in equity if they relate
to qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net
investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the consolidated statement of
profit or loss in finance costs. All other foreign exchange gains and losses are presented in the income
statement on a net basis within other income or other expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined. Translation differences on assets and liabilities carried
at fair value are reported as part of the fair value gain or loss.
For example, translation differences on non-monetary assets and liabilities such as equities held at fair value
through profit or loss are recognised in profit or loss as part of the fair value gain or loss and translation
differences on non-monetary assets such as equities classified as available-for-sale financial assets are
recognised in other comprehensive income.
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
•
•
•
assets and liabilities for each statement of financial position presented are translated at the closing rate
at the date of that statement of financial position;
income and expenses for each statement of profit or loss and other comprehensive income are
translated at average exchange rates (unless this is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which case income and expenses are
translated at the dates of the transactions); and
all resulting exchange differences are recognised in other comprehensive income.
(d) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
•
•
where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part
of the cost of acquisition of the asset or as part of the item of expense; or
for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 26: Summary of significant accounting policies (cont’d)
Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows
arising from investing and financing activities which is recoverable from, or payable to, the taxation authority
is classified as operating cash flows.
(e) Comparative Figures
Where required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
(f) New accounting standards and Australian accounting interpretations
New and amended accounting standards adopted
New and amended standards adopted by the Group
The Group has applied the following standards and amendments for the first time for their annual reporting
period commencing 1 July 2018:
• AASB 9 Financial Instruments
• AASB 15 Revenue from Contracts with Customers
• AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of
Share-based Payment Transactions
• AASB 2017-1 Amendments to Australian Accounting Standards - Transfers to Investment Property,
Annual Improvements 2014-2016 Cycle and Other Amendments
The Group had to change its accounting policies following the adoption of AASB 9 and AASB 15. This is
disclosed in Note 2 and Note 26.
Other than AASB 9 and AASB 15, the other amendments listed above did not have any impact on the
amounts recognised in prior and current periods.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 26: Summary of significant accounting policies (cont’d)
New accounting standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for
30 June 2019 reporting periods and have not yet been applied in the financial report. The Group’s
assessment of the impact of these new standards and interpretations is set out below.
AASB
Amendment
AASB 16
Affected
Standard(s)
Leases
Application
Date of
Standard
1 Jan 2019
Application
Date for
Group
(Year ended)
30 Jun 2020
Nature of
Change to
Accounting
Policy
AASB 16
eliminates the
operating and
finance lease
classifications for
leases currently
accounted for
under AASB 117
Leases. It instead
requires an entity
to bring most
leases onto its
balance sheet in
a similar way to
how existing
finance leases
are treated under
AASB 117.
An entity will be
required to
recognise a lease
liability and a right
of use asset in its
balance sheet for
most leases.
There are some
optional
exemptions for
leases with a
period of 12
months or less
and for low value
leases.
Impact
To the extent that the entity,
as lessee, has operating
leases outstanding at the
date of initial application, 1
January 2019, right-of-use
assets will be recognised for
the amount of the
unamortised portion of the
useful life, and the lease
liabilities will be recognised at
the present value of the
outstanding lease payments.
Thereafter, earnings before
interest, depreciation,
amortisation and tax
(EBITDA) will increase
because operating lease
expenses currently included
in EBITA will be recognised
instead as amortisation of the
right-of-use asset, and
interest expense on the lease
liability.
However, there will be an
overall reduction in net profit
before tax in the early years
of a lease because the
amortisation and interest
charges will exceed the
current straight line expense
incurred under AASB 117
Leases.
This trend will reverse in the
later years. The Group will
make a more detailed
assessment of the impact
over the next 12 months.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 26: Summary of significant accounting policies (cont’d)
(g) Significant accounting estimates and judgements
Revenue recognition
The recognition of revenue detailed in Note 2 relating to project-based services is subject to the
management’s judgement on measurement of progress towards satisfaction of performance obligation using
the input method. The Group also did not recognise revenue when management has determined that it was
not highly probable that a portion of the revenue will not reverse.
When management determine multiple distinct performance obligations in a contract, transaction price is
allocated based on stand-alone selling price of the product or service sold. The stand-alone selling price is
estimated on the basis of the retail price.
Inventory obsolescence
Inventories are accounted for in accordance with the accounting policy detailed in Note 8. Where the net
realisable value of inventory is lower than its cost the Group recognises a provision for inventory
obsolescence. At 30 June 2019 management has determined $2,668,910 (2018: $2,045,819) of impairment
is required for inventory where net realisable value is lower than its cost.
Development costs capitalised
Development costs are carried at cost less accumulated amortisation and accumulated impairment losses.
The net development costs has been subject to impairment testing. If an impairment indication arises, the
recoverable amount is estimated and an impairment loss is recognised to the extent that the recoverable
amount is lower than the carrying amount.
Impairment
As at 30 June 2019, the market capitalisation of DTI did not exceed its net assets, which is an indicator of
asset impairment under accounting standards. For the purpose of impairment testing the intangibles are
allocated to one cash-generating unit (CGU) on the group level. The recoverable amount of the CGU was
then determined using the value in use model which requires the use of key assumption and judgments
relating to future revenues, anticipated gross margin, growth rates expected and discount rate. The
calculations use cash flow projects based on financial budgets approved by the board covering a period of
five years. The Board determined that the underlying assumptions supporting the impairment were
sufficiently sensitive to create uncertainty of the model outcomes. As a result, the Board has taken the
decision to impair the balance of capitalised development costs by $1,493,687 (2018: $5,163,573) to a nil
amount.
Amortisation of intangible assets
Intangible assets are amortised over their useful lives (5 to 10 years). Amortisation commences when the
asset is available for commercial sale.
Share-based payment transactions
The Company measures the cost of equity-settled transactions with employees by reference to the fair value
of the equity instruments at the dated at which they are granted. The fair value is the ASX share price.
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Notes to the Consolidated Financial Statements
Note 26: Summary of significant accounting policies (cont’d)
(h) Auditor’s remuneration
BDO Audit (WA) Pty Ltd
Remuneration of the auditors of the entities for:
Auditing or reviewing the current year financial report
Auditing or reviewing the half year review
BDO LLP
Remuneration of the auditors of the entities for:
Auditing or reviewing the current year’s financial report
Non-audit services performed by BDO during the year
comprise:
DTI EMEA Ltd Tax Consulting
2019
$
2018
$
51,000
27,689
78,689
51,500
30,750
82,250
18,067
18,928
7,593
7,234
Note 27: Company information
DTI Group Ltd is a listed public company (ASX: DTI), incorporated and operating in Australia.
Registered office and principal place of business
31 Affleck Road
Perth Airport, WA, 6105
Tel: (08) 9479 1195
Internet: www.dti.com.au
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
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Directors’ Declaration
In the opinion of the Directors of DTI Group Ltd ("Company"):
1. The financial statements and accompanying notes set out on pages 26–72 are in accordance with the
Corporations Act 2001, and
(i)
(ii)
comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
give a true and fair view of the consolidated entity’s financial position as at 30 June 2019 and of
its performance for the year ended on that date.
2.
In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
3. The Company has included in the notes to the financial statements an explicit and unreserved Statement
of Compliance with International Financial Reporting Standards.
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer
required by section 295A of the Corporations Act 2001.
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:
Greg Purdy
Chairman
30 August 2019, Perth, Australia
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
Page | 73
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 DTI Group Ltd
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of DTI Group Ltd (the Company or DTI) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2019, the
consolidated statement of profit or loss and other comprehensive income, 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 30 June 2019 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 (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.
Material uncertainty related to going concern
We draw attention to Note 19 in the financial report which describes the events and conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
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. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Recoverability of Inventory
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 8 of the financial report, an
impairment of inventory and provision for
inventory obsolescence was recognised.
This area is considered a key audit matter given
the nature of inventories, the carrying value of
inventory and the extent of management
estimates and judgements involved in assessing
inventory impairment and provisioning for
obsolescence.
Refer to Note 8 and Note 26 of the financial
report for a description of the accounting policy
and significant estimates and judgements applied
to these arrangements.
Our procedures included, but were not limited
to:
· Performing a price test on the cost of a
sample of inventory by agreeing the
purchase price as per supplier invoice to the
inventory listing; and
· Performing a net realisable value test on a
sample of inventory by obtaining the latest
sales invoice of the samples and assessing
that the sale price of the samples exceeds
its cost price;
· Assessing and testing management’s position
paper and assessment over slow moving and
obsolete inventory of the Group; and
· Assessing the adequacy of financial report
disclosures.
Revenue from Contracts with Customers
Key audit matter
How the matter was addressed in our audit
DTI generates a significant portion of its revenue
from customer contracts for the provision,
installation and maintenance of equipment as
disclosed in Note 2.
The group has applied AASB 15 “Revenue from
contracts with customers” (‘AASB 15’) from 1
July 2018 using the cumulative effect method.
Revenue recognition was determined to be a key
audit matter as this area involves significant
judgments and estimates made by management
including whether contracts contain multiple
performance obligations which should be
accounted for separately and the most
appropriate method of recognition of revenue
for the identified performance obligations. This
comprises allocation of consideration to the
individual performance obligations based on its
standalone pricing and whether the performance
obligation is satisfied at a point in time or
overtime. Furthermore performance obligations
that are satisfied overtime requires assessment
of the degree of completion of the project based
contracts.
The Group’s disclosures in relation to its revenue
accounting policy and significant judgements
applied in revenue recognition are disclosed in
Note 2 and Note 26.
Our procedures included, but were not limited to
the following:
· Discussing with management and critically
assessing the financial impact of the new
revenue standard and changes to the Group’s
revenue recognition policies on transition 1
July 2018;
· Reviewing DTI’s revenue recognition policies
across all revenue streams and ensuring
compliance with the accounting standard;
· Obtaining and reviewing a sample of key
contracts, considering the terms and
conditions, performance obligations of these
arrangements, its stand-alone pricing and
assessing the accounting treatment under AASB
15;
· Challenging management’s assessment of the
performance obligations promised to customers
within a contract;
· Vouching a sample of revenue and other
revenue transactions to supporting
documentation;
· Performing cut-off testing to ensure revenue
is recorded in the relevant period;
· Performing detailed analytical procedures
over revenue, cost of sales and margins
including comparison to prior period and BDO
expectations to identify unusual trends or
onerous projects;
· Enquiring and reviewing credit notes issued
post year end which relates to year ending 30
June 2019;
· Reviewing contract balances to ascertain that
they has been accounted for accurately;
· Reviewing disclosures in Note 2 and Note 26 in
the financial report and ensuring compliance
with the accounting standard.
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 30 June 2019, 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:
http://www.auasb.gov.au/auditors_responsibilities/ar1.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 14 to 24 of the directors’ report for the
year ended 30 June 2019.
In our opinion, the Remuneration Report of DTI Group Ltd, for the year ended 30 June 2019, 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
Dean Just
Director
Perth, 30 August 2019
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 NAME OF DEAN JUST TO THE DIRECTORS OF DTI GROUP LTD
As lead auditor of DTI Group Limited for the year ended 30 June 2019, 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 DTI Group Ltd and the entities it controlled during the period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 30 August 2019
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.
Corporate directory
Directors
Greg Purdy
Steve Gallagher
Neil Goodey
Andrew Lewis
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Company Secretary
Ian Hobson
Registered and
Principal Office
Auditor
Share Registrar
Bankers
31 Affleck Road
Perth Airport WA 6105
Telephone: (08) 9479 1195
Facsimile: (08) 9479 1190
Website: www.dti.com.au
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford Vic 3067
Bankwest
Division of Commonwealth Bank of Australia
Bankwest Place
300 Murray Street
Perth WA 6000
Stock Exchange Listing
DTI Group Ltd shares are listed on the Australian Securities Exchange
(ASX code: DTI)
D T I G R O U P L T D – A N N U A L R E P O R T 2 0 1 9
Page | 80
Additional ASX Information
The shareholder information set out below was applicable at 28 August 2019.
Ordinary Share Capital
215,341,850 fully paid ordinary shares (inclusive of DTI Treasury shares) held by 783 individual shareholders.
All issued ordinary shares carry one vote per share and are entitled to dividends.
Distribution of Holders of Equity Securities
Size of Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of
Shareholders
Percentage of
Shareholding
38
210
147
277
111
783
0.00
0.28
0.54
4.68
94.49
100.00
There were 458 holders of less than a marketable parcel of ordinary shares.
Twenty Largest Registered Shareholders
Name
INVIA CUSTODIAN PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
INDUCAM NV/C
BLUEKARA PTY LTD
MONEX BOOM SECURITIES (HK) LTD
WOOD STREET PTY LTD
LEGRANDE INVESTMENTS PTY LTD
MR LESLIE KROLL
LTC GROUP HOLDINGS PTY LTD
LTC GROUP HOLDINGS PTY LIMITED
MR GLYN DENISON
DTI CAPITAL PTY LTD
MR NEIL EDWARD GOODEY
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ENERVIEW PTY LTD
FINESHORE PTY LTD
ANNAPURNA PTY LTD
BOND STREET CUSTODIANS LIMITED
SUPER RAB PTY LTD
MR ADRIAN RICHARD CREEDON
Total
Number of
Shares
Percentage of
Issued Shares
69,961,245
58,359,759
32.49
27.10
6,203,078
4,646,880
3,756,170
3,034,886
2,508,485
2,500,000
2,046,353
2,007,642
1,955,660
1,942,250
1,928,318
1,771,592
1,700,000
1,696,121
1,500,000
1,400,000
1,400,000
1,300,000
2.88
2.16
1.74
1.41
1.16
1.16
0.95
0.93
0.91
0.90
0.90
0.82
0.79
0.79
0.70
0.65
0.65
0.60
171,618,439
79.70
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Additional ASX Information
Substantial Shareholders
The names of substantial shareholders which have notified the Company in accordance with
section 671B of the Corporations Act 2001 are:
Fully Paid Ordinary Shares
Name
INVIA CUSTODIAN PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
Number
69,961,245
58,359,759
%
32.5
27.1
Voting Rights
Subject to any special rights or restrictions attached to any class or classes of shares in the
Company, at a general meeting every holder of shares present in person or by proxy, body
corporate representative or attorney has one vote on a show of hands and one vote for each Share
held on a poll.
Votes are cast by a show of hands unless a poll is demanded. The chairperson of the meeting or
least five Shareholders entitled to vote on the resolution or shareholders with at least 5 per cent of
the votes that may be cast on the resolution may demand a poll.
Escrowed Shares
The number of shares subject to voluntary escrow is nil (2018: Nil).
On-market Buyback
The Company is not currently conducting an on-market buyback of its shares.
Company Secretary
Ian Hobson
Registered and
Principal Office
Share Registrar
31 Affleck Road
Perth Airport WA 6105
Telephone: (08) 9479 1195
Facsimile: (08) 9479 1190
Website: www.dti.com.au
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford Vic 3067
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