Annual Report 2021
D T I
G R O U P L T D
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A B N 1 5 0 6 9 7 9 1 0 9 1
2021 Year End Report
Contents
Directors’ Report ................................................................................................................................. 3
Audited Remuneration Report ....................................................................................................... 11
Consolidated Statement of Profit or Loss and Other Comprehensive Income .................. 18
Consolidated Statement of Financial Position ........................................................................... 19
Consolidated Statement of Changes in Equity .......................................................................... 20
Consolidated Statement of Cash Flows ...................................................................................... 21
Notes to the Consolidated Financial Statements ...................................................................... 22
Directors’ Declaration ...................................................................................................................... 57
Auditor’s Report ................................................................................................................................ 58
Auditor’s Independence Declaration ............................................................................................ 62
Corporate directory .......................................................................................................................... 63
Additional ASX Information ............................................................................................................ 64
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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 2 1
P a g e | 2
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 2021 and the auditor’s report thereon.
The Directors of the Company at any time during or since the end of the financial year are:
Directors’ Report
Directo rs’ Rep ort
Directors
Mr Greg Purdy
Qualifications & Experience:
Independent Non-Executive Chairman
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 the execution of major
technology projects. Mr Purdy
former senior executive with
NTT Data, Hewlett Packard, Telstra, and the Tenix Group.
is a
Independent Non-Executive Director
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 has been a
Director of several listed and public companies including Hong Kong listed
CCRTT, Optal Ltd, Vix Technology Ltd, KubaPay, Littlepay, Orbital UAV
and Snapper Services.
Non-Executive Director with Optal Ltd, Vix Technology Ltd, KubaPay,
Littlepay, Orbital UAV and Snapper Services
Independent Non-Executive Director
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 the tourism, hospitality, renewable energy,
finance, technology and aviation sectors.
Other Directorships:
Nil
Mr Steve Gallagher
Qualifications & Experience:
Other Directorships:
Mr Andrew Lewis
Qualifications & Experience:
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Other Directorships:
Nil
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Directors’ Report
Mr Chris Afentoulis
Independent Non-Executive Director
Qualifications & Experience:
Chris Afentoulis was appointed to the Board on 19 November 2019. Mr
Afentoulis is a qualified chartered accountant and a graduate of the
Australian Institute of Company Directors. With more than 15 years’
experience in professional services and senior executive positions
including finance, management, and corporate strategy with a range of IT
service and technology companies.
Nil
The above-named Directors held their current position for the whole of the financial year and since the end of
the financial year.
Other Directorships:
Company Secretary
Mr 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.
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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 Purdy
S Gallagher
A Lewis
C Afentoulis
Held
12
12
12
12
Attended
12
12
12
12
Principal activities
The Group’s principal activities during the financial year were the development, manufacture and supply of
integrated surveillance systems, 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.
l
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.
Managed services – video management, vehicle data analysis and monitoring, schedule adherence
analysis, IT infrastructure, help desk, technical support, monitoring, and first-line maintenance.
DTI markets and distributes its product range to customers worldwide, both directly and with a network of
integrators and business partners.
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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 2 1
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Directors’ Report
Shareholder returns
The table below sets out summary information on the Group’s earnings and movement in shareholder wealth
for the five years to 30 June 2021.
Revenue
EBITDA
EBIT
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
FY21
FY20
FY19
FY18
FY17
18,572,598
14,085,266
19,176,894
19,103,076
15,867,660
435,174
(2,230,530)
(8,179,879)
(10,127,646)
(3,024,987)
76,058
(2,697,174)
(9,535,657)
(13,125,393)
(4,827,070)
24,844
(2,731,270)
(9,440,710)
(11,384,311)
(5,847,874)
0.02
0.03
0.06
0.17
0.02
0.02
0.03
0.06
-
-
-
-
0.39
0.17
-
0.01
(0.91)
(4.42)
(8.72)
(5.32)
Return on Capital Employed %
1.43
(51.52)
(179.45)
(58.62)
(30.07)
Net profit/(loss) amounts have been calculated in accordance with Australian Accounting Standards
(AASBs).
Review of Financial Condition
FY21 Financial Performance
During the year ended 30 June 2021, DTI reported revenue of $18.6 million (2020: $14.1 million). This
represents a 32 per cent increase compared to the prior year and is primarily attributed to the delivery on a
pipeline of contracted work.
DTI recorded positive EBITDA of $0.44 million for the year ended 30 June 2021 (2020: negative
$2.2 million). The improvement in EBITDA was driven by increased volumes, a focus on operational
efficiency, avoidance of onerous contract impacts and other non-recurring impacts.
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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 2 1
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During FY21 DTI recorded multiple non-recurring impacts and an underlying EBITDA loss of $0.58 million,
an improvement from a $0.85 million loss in the prior year as illustrated in the table below:
FY21
$
FY20
$
76,058
(2,697,174)
359,116
466,644
435,174
(2,230,530)
(75,233)
(486,000)
(50,000)
(136,144)
(199,050)
(132,453)
-
(396,000)
(50,000)
-
-
-
-
1,402,733
-
(245,867)
61,895
664,433
(581,811)
(855,231)
Directors’ Report
Underlying EBITDA
Reconciliation of Underlying EBITDA
EBIT
Depreciation/Amortisation
Statutory EBITDA
R&D Grant
Jobkeeper payment
Cash flow boost income
Payroll tax relief
Impairment of inventories/(reversal)
Impairment of trade receivables/(reversal)
Impairment of contract costs
Restructuring costs/(reversal)
Warranty claims
Underlying EBITDA
Cash Flow
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During the year, DTI generated negative cash flow to operations of $1.48 million (2020: negative $1.16
million). Total net cash outflow for the year was $1.89 million. Key impacts on net cash flow included a:
$0.78 million reduction in trade payables;
ii) $0.11 million reduction in superannuation payable; and
iii) $0.64 million outflow on investing activities.
Financial Position
At the end of the financial year DTI maintained unrestricted cash reserves of $0.77 million and net assets of
$5.2 million. DTI has no term debt.
Refer to Note 19 Going Concern for further details on working capital.
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) Customer demand for improved security and surveillance on mass transit systems; and
iii) Customer demand for passenger information systems on mass transit systems.
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Directors’ Report
DTI considers these are strong drivers of demand for its products and services which will continue into FY22
and beyond.
Operational performance
DTI provide direct long-term maintenance and support services to municipal transit authorities in Australia
the UK, U.S.A and Africa.
European end-customers are also engaged through business partners in eastern & western Europe.
DTI’s operational performance has improved markedly during the past 5-years.
Significant changes in state of affairs
In the opinion of the Directors, the Group’s state of affairs did not change significantly during the financial
year.
Outlook
Opportunity Pipeline
Business Strategies
Future Developments
Dividends
DTI continues to enjoy strong demand for its products and services with an Opportunity Pipeline exceeding
$65 million.
DTI’s business strategy is to support the mass the transit industry through the provision of innovative
hardware and software solutions and services.
In FY22, DTI is expanding its multi-level product range to provide a broader customer offer and strengthen
the value proposition for existing customers in targeted market segments.
DTI expects to continue executing contracted work, pursuing cost-effective work practices, and improving
customer satisfaction.
In respect of the financial year ended 30 June 2021, 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
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the
potential impact after the reporting date. The situation is rapidly developing and is dependent on measures
imposed by the Australian Government and other countries, such as the maintenance of social distancing
requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
However, it should be noted that COVID-19 is continuing to impact the supply chain. Although the impact
remains uncertain, worldwide logistics chains are being disrupted and the timely availability of cost-effective
components, such as some semi-conductors, could cause business impacts.
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 2 1
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Directors’ Report
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No other matters or circumstances 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 video systems, communications, and passenger
information technologies for the global mass transit market. DTI remains confident in its outlook as it seeks
to drive growth via a pipeline of opportunities.
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.
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:
G Purdy
S Gallagher
A Lewis
C Afentoulis
Ordinary Shares
DTI Group Limited
Options over Ordinary
Shares
Rights over Ordinary Shares
Nil
Nil
1,875
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Indemnification of officers and auditors
The Company has 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 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.
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 2 1
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Directors’ Report
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.
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 2021 were $nil (2020: $6,605) 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 58 and forms part of the Directors’ report for the
financial year ended 30 June 2021.
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 www.dti.com.au/investors .
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Directors’ Report
Audited Remuneration Report
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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 2021.
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:
·
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·
·
Key management personnel
Remuneration policy
Remuneration structure
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:
The following persons acted as non-executive Directors of the Company during the financial year:
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 M Strack
Mr D Hood
Ms M Kong
(Chief Executive Officer)
(Chief Financial Officer – Appointed on 12 April 2021)
(Chief Financial Officer – Resigned on 31 March 2021)
Non-Executive Directors
· Mr G Purdy
· Mr S Gallagher
· Mr A Lewis
· Mr C Afentoulis
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Directors’ Report
Audited Remuneration Report
Remuneration Policy
Non-Executive Directors
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.
Non-Executive Directors receive a Board fee 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. The maximum annual aggregate Directors’ fee pool limit is
$250,000 and the current total is well under this amount. 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 rewards them fairly and responsibly 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 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 the Chief Executive Officer was a participant
of the MCP.
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 FY21.
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.
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 2 1
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Directors’ Report
Audited Remuneration Report
Remuneration Structure
DTI executive
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ii)
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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:
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.
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 FY21, expressed as a percentage of total remuneration, if maximum performance was
achieved for the STI and LTI components of their variable components.
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 2 1
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Directors’ Report
Audited Remuneration Report
Executives
Matthew Strack
Chief Executive Officer
Frank Havelka
Interim Chief Executive Officer
David Hood
Chief Financial Officer
Michelle Kong
Chief Financial Officer
Richard Johnson
Executive Director
Fixed
Variable – STI
Variable – LTI
2021
%
2020
%
2021
%
2020
%
2021
%
2020
%
63.2
63.2
15.8
15.8
21.0
21.0
n/a
100.0
100.0
n/a
100.0
100.0
n/a
99.0
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
1.0
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 FY21:
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.
During the last quarter of FY20, the current Non-Executive Directors and Officers were subjected to the
following for a period of up to six months:
· 10 per cent reduction in their directors’ fees or annual salary; and
· 10 per cent deferral in their directors’ fees or annual salary.
The deferred amounts were repaid by the Company over a six-month period.
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Directors’ Report
Audited Remuneration Report
Executive Directors/Officers
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Non - Executive Directors
G Purdy
(Chairman)
S Gallagher
A Lewis
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C Afentoulis 1
N Goodey 2
M Strack 3
(CEO)
FJ Havelka 4
(Interim CEO)
I Hobson
(Company Secretary)
D Hood 5
(CFO)
M Kong 6
(CFO)
Total
Total
R Johnson 7
(Commercial Exec)
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Salary &
fees
$
49,301
48,329
29,500
29,000
29,500
29,000
29,500
17,500
-
11,500
295,000
126,538
-
199,056
13,900
27,740
46,846
-
191,915
188,500
-
31,479
685,462
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
Short-term Benefits
employment
Post-
Share
Based
Payments
Proportion
Total
Performance
related
Long-term
Benefits
Long
Benefits
Super-
STI
$
Total
annuation
Service
benefits
Leave
$
$
$
$
$
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
49,301
48,329
29,500
29,000
29,500
29,000
29,500
17,500
-
-
-
-
-
-
-
-
-
-
11,500
1,093
295,000
126,538
-
29,545
10,501
-
199,056
12,837
13,900
27,740
46,846
-
191,915
188,500
-
31,479
685,462
-
-
4,450
-
17,148
17,908
-
2,777
51,143
45,116
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
487
-
487
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
n/a
0.0%
0.0%
0.0%
n/a
0.0%
0.0%
0.0%
0.0%
n/a
0.0%
0.0%
n/a
0.0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
49,301
48,329
29,500
29,000
29,500
29,000
29,500
17,500
-
12,593
324,545
137,039
-
211,893
13,900
27,740
51,296
-
209,063
206,408
-
34,743
736,605
-
754,245
2020
708,642
-
708,642
1. Mr Afentoulis was appointed to the Board on 19 November 2019.
2. Mr Goodey resigned from the Board on 18 November 2019.
3. Mr Strack commenced as CEO on 20 January 2020.
4. Mr Havelka commenced as Interim CEO on 31 May 2019 and resigned on 31 January 2020.
5. Mr Hood commenced as CFO on 12 April 2021.
6. Ms Kong resigned as CFO on 31 March 2021 and ceased to be KMP.
7. Mr Johnson resigned as Commercial Executive on 14 August 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 2 1
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Directors’ Report
Audited Remuneration Report
Key terms of employment contracts
The Company has formal employment contracts with each of its former and continuing executives as set out
below:
Name
Matthew Strack
David Hood
Frank Havelka1
Michelle Kong
Richard Johnson
Fixed
Remuneration
$328,500
$229,950
$372,242
$213,525
$262,800
MCP Participant
Duration
Notice Period
Yes
Yes
No
No
Yes
Ongoing
Ongoing
Ceased
Ceased
Ceased
Four weeks
Four weeks
Four weeks
Four weeks
Four weeks
Termination
Benefits
None
None
None
None
None
1. Mr Havelka’s package includes $51,240 per annum of remote allowance for living in Perth.
* Refer page 12 and 13 for details of MCP plan and criteria.
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The Company also has letters of appointment with each of its Non-executive Directors.
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:
2021
Directors
G Purdy
S Gallagher
A Lewis
C Afentoulis
Executives
M Strack
I Hobson
D Hood 1
M Kong 2
Balance at
1 July 2020
Number
Granted as
remuneration
On Exercise of
Options
Net Other Change
Balance at
30 June 2021
Number
Number
Number
Number
-
-
-
1,875
-
-
-
n/a
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,875
-
-
-
-
n/a
1. Mr Hood commenced as KMP from 12 April 2021, and the presentation in this table may not indicate the status of his shareholding at the beginning of
the relevant reporting period.
2. Ms Kong ceased as KMP from 31 March 2021, and the presentation in this table may not indicate the status of her shareholding at the end of the
relevant reporting period.
During the year ended 30 June 2021, no share options were held by key management personnel.
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 2 1
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Directors’ Report
Audited Remuneration Report
Reliance on External Remuneration Consultants
There has not been any reliance on external remuneration consultants.
Adoption of Remuneration Report
At the 2020 Annual General Meeting, the resolution adopting the 2020 Remuneration Report was carried
unanimously.
The Company received more than 98.6 percent of “yes” votes on its Remuneration Report for the 2020
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.
Signed in accordance with a resolution of the Directors made pursuant to section 298(2) of the Corporations
Act 2001.
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GREG PURDY
Chairman
31 August 2021
Melbourne, Australia
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Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2021
Sales Revenue
Cost of Goods Sold
Operational overheads
Onerous project expense
Gross Margin
Impairment (expense) / reversal
Other income
Other expenses
Corporate overheads
Depreciation/amortisation
Net interest and finance gain/(loss)
Net Profit/(Loss) Before Tax
Tax (expense)/benefit
Net Profit/(Loss) After Tax
Other comprehensive (loss)/income
Items that may be reclassified to profit or loss:
Exchange differences
Total other comprehensive income/(loss)
Total comprehensive income/(loss) for the
period
Total comprehensive income/(loss) is
attributable to:
Owners of DTI Group Ltd
Earnings/(loss) per share for profit/(loss)
attributable to the ordinary equity holders
of the Company:
Basic earnings/(loss) per share (cents per share)
Diluted earnings/(loss) per share (cents per share)
Note
2021
$
2020
$
2
2
2
2
2
2
3
18,572,598
(13,503,511)
(2,779,743)
(521,785)
1,767,559
331,503
774,485
(61,895)
(2,376,478)
(359,116)
(46,860)
29,198
(4,354)
24,844
14,085,266
(12,661,659)
(691,041)
–
732,566
(1,402,733)
1,415,007
(664,433)
(2,310,937)
(466,644)
(30,058)
(2,727,232)
(4,038)
(2,731,270)
90,073
90,073
(385,674)
(385,674)
114,917
(3,116,944)
114,917
(3,116,944)
22
22
0.01
0.01
(0.91)
(0.91)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
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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 2 1
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Financial Statements
Consolidated Statement of Financial Position
as at 30 June 2021
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Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Other current assets
Total current assets
Non-current assets
Other receivables
Property, plant and equipment
Intangible assets
Contract assets
Right of use asset
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Provisions
Lease liability
Total current liabilities
Non-current liabilities
Provisions
Lease liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
Note
2021
$
2020
$
4
5
2
8
5
9
10
2
18
6
2
7
11
18
11
18
13
16
16
765,789
3,043,896
1,301,445
3,604,373
438,633
9,154,136
2,701,353
4,674,283
628,754
4,446,166
696,834
13,147,390
380,041
386,690
606,256
185,672
157,244
1,715,903
10,870,039
505,041
141,593
348,076
31,675
254,130
1,280,515
14,427,905
2,601,263
623,080
56,283
1,990,229
277,537
5,548,392
4,579,431
2,724,840
85,625
1,669,621
132,820
9,192,337
111,247
–
111,247
5,659,639
5,210,400
–
140,085
140,085
9,332,422
5,095,483
33,885,113
169,131
(28,843,844)
5,210,400
33,885,113
79,058
(28,868,688)
5,095,483
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 2 1
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Financial Statements
Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
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Contributed
Equity
$
Employee
Share Plan
Reserve
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
$
Total
$
30,955,098
–
–
473,572
–
–
(14,236)
–
(385,674)
(26,137,418)
(2,731,270)
–
5,277,016
(2,731,270)
(385,674)
–
–
(385,674)
(2,731,270)
(3,116,944)
–
5,396
–
–
5,396
2,990,868
(60,853)
33,885,113
–
–
–
–
478,968
–
–
–
–
(399,910)
–
90,073
–
–
(28,868,688)
24,844
–
2,990,868
(60,853)
5,095,483
24,844
90,073
–
–
–
–
90,073
24,844
114,917
–
–
–
–
–
33,885,113
–
–
478,968
–
–
(309,837)
–
–
(28,843,844)
–
–
5,210,400
At 30 June 2019
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 2020
Profit for the year
Other comprehensive income
Total comprehensive income
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 2021
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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Financial Statements
Consolidated Statement of Cash Flows
for the year ended 30 June 2021
Cash flows used in operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Government grants received
Interest paid
Tax paid
Net cash outflow used in operating activities
Cash flows used in investing activities
Payments for plant and equipment
Proceeds from sale of property plant & 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
Payment for leased property
Cash inflow / (outflow) from bank guarantee facility
Net cash from financing activities
Net increase/(decrease) 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
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Note
2021
$
2020
$
18,510,192
(20,677,609)
2,574
743,233
(49,434)
(4,354)
(1,475,398)
15,991,805
(17,435,207)
9,799
314,000
(39,857)
(4,038)
(1,163,498)
12(b)
(312,049)
4,978
(339,346)
(646,417)
–
–
264,450
(293,791)
(120,324)
380,041
230,376
(4,707)
13,000
(135,774)
(127,481)
2,990,868
(60,853)
2,037,526
(1,998,743)
(95,159)
(930,082)
1,943,557
(1,891,439)
652,578
2,701,353
(44,125)
765,789
2,033,105
15,670
2,701,353
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 2 1
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Notes to the Consolidated Financial Statements
Note 1: Segment information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker (CODM).
Segment information has been prepared in conformity with the accounting policies adopted for preparing and
presenting the financial statements of the consolidated Group. The Group has one primary business
segment being the provision of integrated surveillance and passenger communication systems to the mass
transit industry.
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.
Major customers
DTI supplies goods and services to a broad range of customers in the transit industry. During the reporting
period, three (2020: four) major customers accounted for 62 per cent (2020: 50 per cent) of the Group’s
revenue.
Note 2: Revenue and expenses
A. Significant accounting policy
B. Nature of Goods and Services
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.
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
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
terms, 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.
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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 2 1
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Project-based services
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Maintenance and
technical support
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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 over time 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 change. 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 this 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 an hourly basis, the Group
recognises revenue as the services are performed.
D. In the following table, revenue is disaggregated by primary geographical market, major products/service
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C. Disaggregation of Revenue
lines and timing of revenue recognition.
Primary geographical
markets
Australia
Europe & Others
North America
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Sale of products
Project-based services
Maintenance
Revenue recognition
At a point in time
Over time
2021
$
2020
$
14,909,623
3,277,079
385,896
18,572,598
9,584,725
3,933,333
567,208
14,085,266
8,298,888
8,273,219
2,000,491
18,572,598
4,026,902
7,720,249
2,338,115
14,085,266
8,298,888
10,273,710
18,572,598
4,026,902
10,058,364
14,085,266
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 2 1
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D. Contract balances and contract costs
The group has recognised the following contract assets and liabilities:
Current contract assets
Capitalised contract costs
Non-current contract assets
Retention
Current contract liabilities
(i) Definition
Contract Assets
2021
$
2020
$
1,301,445
628,754
185,672
31,675
623,080
2,724,840
· Accrued Revenue
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 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.
An impairment loss of $nil (2020: $1,402,733) has been recognised for the excess of the capitalised cost
over the expected remaining consideration less any directly related costs not yet recognised as expense.
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.
(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 reduced due to to the completion of works for project-based service, for which
advance consideration was received from customers.
(iii) Revenue recognised in relation to contract liabilities
Revenue recognised for the year ended 30 June 2021 which was included in the contract liability balance at
the beginning of the period is $2,076,220 (2020: $2,144,191).
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 2 1
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E. Other Income
Other Income
R&D grant (i)
Profit on disposal of assets
JobKeeper payment (ii)
Cash flow boost income (iii)
Payroll tax relief
Foreign exchange gain
Other income
Restructuring costs reversal
(i) Government grants
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The amount of revenue recognised for the year ended 30 June 2021 from performance obligations satisfied
(or partially satisfied) in previous periods is $nil (2020: 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 2021 is $30.4 million (2020: $32.1 million).
Management expects that 13.5% of the transaction price allocated to the unsatisfied contracts as of
30 June 2021 will be recognised as revenue during the next reporting period. The amount disclosed above
does not include variable consideration which is constrained.
2021
$
2020
$
75,233
5,495
486,000
50,000
136,144
9,226
12,387
–
774,485
–
13,000
396,000
50,000
–
703,279
6,861
245,867
1,415,007
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.
(ii) JobKeeper payment
COVID-19 has presented a fast evolving and significant challenge to global health systems and economies.
The Australian Government has provided JobKeeper Payment to eligible employers who continue to retain
the existing JobKeeper Payment until
their employees. The company met
27 September 2020. During FY21, the Company received $486,000 in JobKeeper Payments from the
government.
the requirement
for
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 2 1
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(iii) Cash flow boosts income
Temporary cash flow boosts were provided by the government to support small and medium businesses and
not-for-profit organisations during the economic downturn associated with COVID-19. Eligible businesses
who employ staff will receive between $20,000 to $100,000 in cash flow boost amounts by lodging their
activity statements up to the month or quarter of September 2020. During FY21, the Company received
$50,000 in cash flow boost amounts from the government.
Interest income is recognised on a time proportion basis using the effective interest method.
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Net interest and finance (loss)/gain
Interest expense
Interest expense – right of use asset
Interest received
Share-based payment expense
Employee share based payment expense
Depreciation and amortisation expense
Depreciation
Depreciation – Right of use assets
Amortisation
Impairment (expense) / reversal
Inventory (i)
Contract cost
Trade receivables (ii)
Employee benefits – Wages & Salaries
Other expenses
Warranty claim
(i) Reversal is due to a change in estimate as per note 8
(ii)Reversal is due to over provision
2021
$
2020
$
(5,162)
(44,272)
2,574
(46,860)
(7,732)
(32,125)
9,799
(30,058)
–
(5,396)
(67,469)
(210,482)
(81,166)
(359,116)
(285,048)
(132,589)
(49,007)
(466,644)
199,050
–
132,453
331,503
–
(1,402,733)
–
(1,402,733)
(6,662,514)
(6,105,731)
(61,895)
(664,433)
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 2 1
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Note 3: Income tax
Current tax
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Deferred 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 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.
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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.
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(a)
Income tax benefit
Current tax expense
Deferred tax
Adjustments for current tax of prior periods
(b) Numerical reconciliation of income tax expense (benefit)
to prima facie tax receivable
Profit / (loss) before income tax benefit
Prima facie tax benefit on loss at 26% (2020:27.5%)
Tax effect of:
Other
Other deductible
Other non-deductible
Other non-assessable income
Effect of lower / higher statutory income tax rate in the UK and USA
Recoupment of prior year losses
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
Prepayments
Unrealised foreign exchange gain
Project WIP
Right of use asset
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
Capital raising fees
Right of use liability
Provision for diminution in trading stock
Provision for doubtful debts
Tax losses carried forward
Set off of deferred tax liabilities
Warranty
Deferred tax asset not brought to account as realisation is not probable
Net recognised deferred tax assets
2021
$
4,354
–
–
4,354
2020
$
4,038
–
–
4,038
29,198
7,591
(2,727,232)
(749,989)
16,637
–
1,926
(32,561)
(18,032)
(47,910)
374,066
(297,363)
4,354
(3,762)
(44,961)
(338,376)
(40,883)
427,982
–
29,573
(2,195)
4,556
–
(73,091)
(286,224)
1,338,759
(257,351)
4,038
(2,999)
(198,240)
(252,657)
(69,886)
523,782
–
113,745
74,550
290,368
–
20,006
72,160
199,304
6,147
4,574,598
(427,982)
50,819
(4,973,715)
–
104,498
57,329
265,561
31,367
60,784
75,049
245,887
93,487
5,073,108
(523,782)
84,111
(5,567,398)
–
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.
Franking credits available for this financial year is $44,481 (2020: $44,481).
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 2 1
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Trade receivables and other receivables are recorded at amounts due less any allowance for doubtful debts.
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 history of defaults, existing market condition as well as forward looking estimates
in each reporting period.
Note 4: Cash and cash equivalents
Cash at bank
Note 5: Trade and other receivables
Significant Estimate
Trade Receivable
Current
Trade receivables (net of impairment)
Other debtors
Other receivables – cash deposit held for
bank guarantee (refer to note 7)
Other receivables – cash deposit
Non Current
Other receivables – cash deposit held for
bank guarantee (refer to note 7)
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Movements in the provision for impairment of
receivables are as follows:
Opening at 1 July
Receivable written off during the year as uncollectable
Amount recovered
Closing at 30 June
2021
$
2020
$
765,789
2,701,353
2021
$
2020
$
2,854,179
19,717
4,008,161
241,081
125,000
380,041
45,000
3,043,896
45,000
4,674,283
380,041
505,041
2021
$
2020
$
511,539
(230,393)
(132,453)
148,693
556,530
–
(44,991)
511,539
Other receivables – cash deposit includes cash backing deposits associated with the issue of bank
guarantee to a major customer and the lessor. These deposits are therefore not available for general use by
the Group. Refer to Note 7.
(a) Impaired trade receivables
It was assessed that a nominal portion of these receivables is expected to be recovered and the full amount
has been provided for.
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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 2021 trade receivables of $434,275 (2020: $1,039,057) were past due, but not impaired. These
relate to several 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.
The ageing analysis of these trade receivables is as follows:
Up to 3 months
3 to 6 months
2021
%
87
13
100
2020
%
96
4
100
2021
$
2020
$
375,986
58,289
434,275
1,000,676
38,381
1,039,057
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 set 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.
2021
$
2020
$
1,199,794
1,358,943
1,542
40,984
2,601,263
1,979,220
2,392,647
114,064
93,500
4,579,431
Trade payables
Other payables
Superannuation liability
Payroll tax liability
Risk exposure
Information about the Group’s exposure to foreign exchange is provided in Note 14.
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Note 7: Borrowings
Current Secured:
Net carrying amount – Premium Funding
Reconciliation of borrowings arising from financing activities:
2021
$
2020
$
56,283
56,283
85,625
85,625
2020
Opening
Cash flows
Non-cash changes
Addition
Fair value
changes
$
$
$
85,625
(293,792)
264,450
$
–
2021
Closing
$
56,283
Premium Funding
Accounting Policy
Premium Funding
Financing Facility
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.
In November 2020, the Company financed its insurance premiums with the funds to be repaid within the next
10 months. This facility is secured against the insurance policies.
As at year ended 30 June 2021, a $250,000 American Express facility was available and in use.
Bank guarantee and insurance bonds
2021
$
2020
$
505,041
505,041
885,082
885,082
Bank guarantees for unconditional undertaking of contracts
The Company has given bank guarantees relating to performance requirements of contracts. A bank
guarantee in relation to this contract of $380,041 (2020: $760,082) 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. A bank guarantee of $125,000 (2020: $125,000), for this contract,
is included in the amounts above.
· Refer to Note 14 for risk exposures and risk management details.
· Refer to Note 15 for capital 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 2 1
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Note 8: Inventories
Raw materials / unassembled stock
Impairment of inventory
Provision for inventory obsolescence
2021
$
2020
$
4,434,229
–
(829,856)
3,604,373
5,620,208
–
(1,174,042)
4,446,166
During FY21, $145,136 of obsolescence provision was applied to inventory sold throughout the year. A
further write-back of $199,050 was recognised (2020: $nil) in the statement of profit or loss and other
comprehensive income, following a revision to the Group’s policy for providing for obsolete inventory. This
represents a change in accounting estimate under AASB 108 and has been applied prospectively in the
current year.
In determining the appropriate policy for the inventory obsolescence provision, management considered the
composition of stock, improvements in stock ageing and turnover, as well as recent sales activity. Based on
these factors it was determined the provision for stock obsolescence should be $829,856 as at 30 June
2021.
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 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.
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Note 9: Property, plant and equipment
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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
Sales Demo equipment
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
Writeback in depreciation
Depreciation expense
Carrying amount at the end of the year
2021
$
2020
$
138,925
(118,379)
20,546
138,925
(101,621)
37,304
2,098,272
(2,058,439)
39,833
2,098,272
(2,030,086)
68,186
1,409,512
(1,381,008)
28,504
1,384,530
(1,368,262)
16,268
284,415
(1,185)
283,230
–
–
–
124,034
(109,457)
14,577
172,065
(152,230)
19,835
386,690
141,593
37,304
–
(16,758)
20,546
52,825
–
(15,521)
37,304
68,186
–
(28,353)
39,833
303,758
4,707
(240,279)
68,186
16,268
39,613
27,634
66
(15,464)
28,504
–
(23,345)
16,268
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Sales Demonstration & Testing
equipment
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
Disposals
Depreciation expense
Carrying amount at the end of the year
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$
2020
$
–
284,415
(1,185)
283,230
–
–
–
–
19,835
450
–
(5,708)
14,577
25,738
–
–
(5,903)
19,835
Accounting Policy
Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
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
·
sales demo equipment – 10 years
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Note 10: Intangible assets
At 30 June 2021
Cost (gross carrying amount)
Accumulated amortisation
Net carrying amount
Movements in carrying amounts
Balance at 1 July 2020
Additions
Amortisation expense
Net carrying amount
At 30 June 2020
Cost (gross carrying amount)
Accumulated amortisation
Net carrying amount
Movements in carrying amounts
Balance at 1 July 2019
Additions
Amortisation expense
Net carrying amount
Development
Costs
$
Patents
Total
$
$
363,281
(16,046)
347,235
704,904
(445,883)
259,021
1,068,185
(461,929)
606,256
116,502
246,779
(16,046)
347,235
231,574
92,567
(65,120)
259,021
348,076
339,346
(81,166)
606,256
116,502
–
116,502
612,337
(380,763)
231,574
728,839
(380,763)
348,076
–
116,502
–
116,502
261,309
19,272
(49,007)
231,574
261,309
135,774
(49,007)
348,076
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 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.
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 2 1
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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
Capitalised Development Costs
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.
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.
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.
New products capitalised during FY21 are amortised using the straight-line method over a period of 5 years.
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.
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 2 1
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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) 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.
The board determined that the underlying assumptions supporting the future economic benefit from the
intangible assets were sufficient. As a result, the board has not impaired these assets (2020: $348,076).
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(c) Impairment
Note 11: Provisions
Current
Employee entitlements – long service leave
Employee entitlements – annual leave
Provision for restructuring
Provision for warranty
Onerous contract provision
Non-current
Employee entitlements – long service leave
Accounting Policy
2021
$
2020
$
175,483
445,831
–
290,793
1,078,122
1,990,229
208,467
386,081
100,000
975,073
–
1,669,621
111,247
111,247
–
–
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 based on historical warranty trends and may vary as
a result of new materials, altered manufacturing processes or other events affecting product quality.
When it is probable that the future costs to complete a contract will exceed future revenues, the expected
loss is recognised as a provision for onerous contract and as an expense immediately.
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 2 1
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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:
(b) Reconciliation of Profit / (loss) after income tax to the net cash used in operating activities
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Australian Dollar bank accounts
British Sterling bank accounts
US Dollar bank accounts
Euro bank accounts
Rand bank account
Profit / (loss) after tax
Non-cash items:
Depreciation and amortisation
Employee share plan expense
Profit on disposal of property, plant & equipment
Exchange differences on foreign operations
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables
Decrease in inventories
Decrease/(increase) in contract assets
Decrease/(increase) in contract costs
Increase in other assets
Increase in right of use asset
Increase/(decrease) in trade and other payables
(Decrease)/increase in provisions
(Decrease)/increase in contract liabilities
Increase in lease liability
Net outflow from operating activities
Non-cash financing and investing activities
2021
$
311,527
16,951
242,304
40,285
154,723
765,789
2020
$
1,720,267
292,695
570,660
110,301
7,430
2,701,353
2021
$
2020
$
24,844
(2,731,270)
359,116
–
(4,978)
133,681
466,644
5,396
(13,000)
(906,385)
1,375,346
841,793
(153,997)
(672,691)
258,201
6,728
(1,978,168)
431,855
(2,101,760)
4,632
(1,475,398)
(163,548)
1,180,086
410,244
747,936
(529,443)
(291,560)
570,763
(161,367)
(20,899)
272,905
(1,163,498)
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 2 1
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Note 13: Contributed equity
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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*
2021
No.
2021
$
2020
No.
2020
$
333,382,585
33,885,113
213,399,600
30,955,098
–
–
–
–
119,634,710
–
2,990,868
(60,853)
40,000
–
348,275
–
333,422,585
33,885,113
333,382,585
33,885,113
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*Balance excludes 1,553,975 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. During 30 June 2021, 40,000 shares had been transferred to
eligible employees, while 1,119,975 shares remain registered with the Trustee. 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.
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.
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 2 1
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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.
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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 2 1
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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
%
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30 June 2021
Financial Liabilities
Fixed rate
Other borrowings
Lease liability
Non-interest
bearing
Payables
l
56,283
296,878
3,679,385
4,032,546
–
–
–
–
–
–
–
–
56,283
296,878
56,283
277,537
2.22%
6.97%
3,679,385
4,032,546
3,679,385
4,013,205
–
–
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30 June 2020
Financial Liabilities
Fixed rate
Other borrowings
Lease liability
Non-interest
bearing
Payables
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Net Fair Value
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
%
85,625
153,236
–
146,878
4,579,431
4,818,292
–
146,878
–
–
–
–
85,625
300,114
85,625
272,905
3.20%
9.57%
4,579,431
4,965,170
4,579,431
4,937,961
–
–
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 25.
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 2 1
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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 2021 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 2020 and 30 June 2021 was determined as follows for both trade
receivables:
Current
More
Than 30
Days
Past Due
More
Than 60
Days
Past Due
More
Than 90
Days
Past Due
Credit
Impaired
Total
0%
0%
0%
0%
100%
$2,667,053
$0
$21,118
$0
$107,718
$0
$71,447
$0
$148,693 $3,002,871
$148,693
$148,693
Current
More
Than 30
Days
Past Due
More
Than 60
Days
Past Due
More
Than 90
Days
Past Due
Credit
Impaired
Total
2.4%
3.3%
5.4%
9.3%
100%
$4,015,244
$96,366
$163,306
$5,389
$32,310
$1,745
$156,429
$14,548
$393,491 $4,760,780
$511,539
$393,491
30 June 2021
Expected loss rate
Gross carrying amount of
trade receivables
Loss allowance
30 June 2020
Expected loss rate
Gross carrying amount of
trade receivables
Loss allowance
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:
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 2 1
Page | 42
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·
Cash
USD
$
242,304
30 June 2021
EUR
$
GBP
$
ZAR
$
40,285
16,951
154,723
USD
$
570,660
30 June 2020
EUR
$
GBP
$
110,301
292,695
ZAR
$
7,430
Trade and other debtors
379,656
1,156,670
153,403
12,995
736,269
195,437
101,735
91,574
(936,359)
(6,617)
(213,393)
(143,030)
(1,288,645)
-
(156,034)
(147,383)
(314,398)
1,190,338
(43,040)
24,687
18,284
305,738
238,396
(48,379)
0.7518
0.6320
0.5429
10.7991
0.6863
0.6111
0.5586
11.8607
Trade and other payables
Exchange rates
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.
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 0.05 per
cent (2020:1.0 per cent).
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 2021 and the date of this report, the Group
has sufficient liquid assets to meet its financial obligations. Refer to Note 19 Going Concern for further
details.
Liquidity Risk
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 2021, had the Australian dollar weakened by 5 per cent
against the US Dollar, Euro, British Sterling and South African Rand, with all other variables held constant,
the Group’s pre-tax results for the year would have been $61,683 better (2020: $29,601 higher). If the
Australian dollar had strengthened the corresponding impact would be a reduction in pre-tax results by
approximately the same amount.
Price Risk
Investments held are not listed or traded in active markets and therefore no price risk arises.
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.
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 2 1
Page | 43
Employee Share Plan Reserve records as an expense over the vesting period, the value of the DTI
Employee Share Plan shares issued. The expense for the current financial year is for the full year.
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
Foreign currency translation reserve
Balance 1 July
Currency translation differences – current year
Balance 30 June
Accumulated losses
Balance 1 July
Impact of changes in accounting policies
Net profit / (loss) for the year
Balance 30 June
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2021
$
2020
$
478,968
(309,837)
169,131
478,968
(399,910)
79,058
478,968
–
478,968
473,572
5,396
478,968
2021
$
2020
$
(399,910)
90,073
(309,837)
(14,236)
(385,674)
(399,910)
2021
$
2020
$
(28,868,688)
–
24,844
(28,843,844)
(26,137,418)
–
(2,731,270)
(28,868,688)
The foreign currency translation reserve is used to record exchange differences arising from the translation
of the financial statements of foreign subsidiaries.
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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.
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Opening Balance
Shares Granted
Shares allocated
Shares vested to employees
Shares forfeited
Shares available / Closing Balance
2021
Allocated
Avail. To
Allocate
2020
Allocated
Avail. To
Allocate
–
–
(40,000)
40,000
–
–
–
–
–
–
–
–
–
–
(348,275)
348,275
–
–
–
–
–
–
–
–
These represent total number of shares to be issued under the DESP.
Note 18: Right of use asset & lease liability
Right of use asset
Current
Property – Land
Lease Liability
Current
Property - Land
Non Current
Property - Land
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2021
$
2020
$
157,244
254,130
277,537
132,820
–
140,085
2021
$
2020
$
210,482
132,589
44,272
32,125
Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
Depreciation charge of right-of-use assets
Property - Land
Finance costs
Interest expense
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased
asset is available for use by the group. Each lease payment is allocated between the liability and finance
cost. The finance cost is charged to profit or loss over the lease period to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over
the shorter of the asset's useful life and the lease term on a straight-line basis.
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 2 1
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Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the fixed payments (including in-substance fixed payments).
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be
determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay
to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with
similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
the amount of the initial measurement of lease liability
·
· any lease payments made at or before the commencement date less any lease incentives received
Payments associated with short-term leases are recognised on a straight-line basis as an expense in profit
or loss. Short-term leases are leases with a lease term of 12 months or less.
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 profit after tax of $0.03 million for the year ended 30 June 2021
(2020: $2.7 million loss) and had operating cash outflows of $1.48 million (2020: $1.16 million outflow).
These conditions 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.
The ability of the Group to continue as a going concern is dependent upon the success of the following
measures being undertaken by management:
· The successful implementation of the turnaround plan including a continued focus on projects and
contracts that generate positive returns;
· Continued improvement in project performance coupled with a strong working capital and net asset
position;
· Continued reduction of cash burn; and
·
Implementation of the new strategy to return to DTI to profitability.
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.
The Directors believe that there are reasonable grounds that the Group will continue as a going concern and
the business forecast shows positive cash flow for the next 12 months to 31 August 2022.
The major shareholders have provided financial support through shareholders loans in the past and expect
to continue to support DTI on this basis.
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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 2 1
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Note 20: Contingencies and commitments
There were no contingent liabilities or assets as at 30 June 2021.
There were no commitments as at 30 June 2021.
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Note 21: Events occurring after the reporting period
The impact of the Coronavirus (COVID-19) pandemic is ongoing, and it is not practicable to estimate the
potential impact after the reporting date. The situation is rapidly developing and is dependent on measures
imposed by the Australian Government and other countries, such as maintaining social distancing
requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
However, it should be noted that COVID-19 is continuing to impact the supply chain. Although the impact
remains uncertain, worldwide logistics chains are being disrupted and the timely availability of cost-effective
components, such as some semi-conductors, could cause business impacts.
No other matters or circumstances 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.
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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 2 1
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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.
Earnings / (loss) per share
Basic earnings / (loss) per share (cents per share)
Diluted earnings / (loss) per share (cents per share)
Reconciliation of profit / (loss) used in calculating earnings/(loss)
per share
The following reflects the income/(loss) and share data used in
the calculations of basic and diluted earnings per share:
Profit/(loss) used in calculating basic and diluted earnings per share
Weighted average number of shares used as the denominator
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Weighted average number of ordinary shares used in calculating basic
earnings/(loss) per share
Weighted average additional shares issued during the period
Adjusted weighted average number of ordinary shares used in
calculating diluted earnings/(loss) per share
2021
Cents per
Share
2020
Cents per
Share
0.01
(0.91)
0.01
(0.91)
2021
$
2020
$
24,844
(2,731,270)
2021
Number of
Shares
2020
Number of
Shares
333,382,585
213,399,600
35,397
86,872,926
333,417,982
300,272,526
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 2 1
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Note 23: Related-party transactions
(a) Key management personnel
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Compensation by category:
key management personnel
Short-term benefits
Long-term benefits
Post-employment benefits
Share based payments
2021
$
2020
$
685,462
–
51,143
–
736,605
708,642
487
45,116
–
754,245
Detailed remuneration disclosures are provided in the remuneration report on pages 16 to 17.
(b) Subsidiaries
The consolidated financial statements include the following subsidiaries:
Name
l
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
Australia
Australia
UK
USA
USA
South Africa
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
(i) This entity is owned by DTI USA Holdings Inc.
Equity
%
2021
2020
100
100
100
100
100
100
100
100
100
100
100
100
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Note 24: Parent entity financial information: DTI Group Ltd
The individual financial statements for the parent entity show the following amounts:
2021
$
2020
$
7,806,372
1,565,090
9,371,463
11,766,712
718,707
12,485,419
5,072,996
111,247
5,184,243
4,187,220
7,326,634
1,178,763
8,505,397
3,980,022
33,885,113
478,968
(30,176,861)
4,187,220
33,885,113
478,968
(30,384,059)
3,980,022
207,198
207,198
(4,232,405)
(4,232,405)
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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
Profit/(loss) for the year
Total comprehensive loss
Contingent liabilities
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The parent has no contingent liabilities at 30 June 2021.
Bank guarantee
The parent has bank guarantee of $505,041. Refer to Note 7 for more details.
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Note 25: 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.
The financial statements were authorised as per
31 August 2021.
the Directors’ declaration on page 57 dated
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
The financial report has been prepared on a historical cost basis. 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 25(f) for further disclosure on significant accounting estimates and judgement.
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Basis of Preparation
Accounting Policies
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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 2021 and the comparative information presented in these financial statements for the year
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 2 1
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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.
(b) Classification and initial measurement of financial assets (AASB 9 Financial Instruments)
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument.
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
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).
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 2 1
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(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.
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.
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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.
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.
(d) Comparative Figures
Where required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
(e) 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 2021 management has determined no additional impairment (2020: $nil) is
required for inventory where net realisable value is lower than its cost.
Refer to Note 8 for details surrounding the change in estimate occurring in the current year in relation to the
provision for obsolescence of inventories.
Development costs capitalised
Development costs are carried at cost less accumulated amortisation and accumulated impairment losses.
The net development costs have 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.
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 2 1
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Impairment
The board determined that the underlying assumptions supporting the impairment were sufficient. As a
result, the board has not impaired the capitalised development costs (2020: $348,076).
Amortisation of intangible assets
Estimation of onerous contracts provision
Intangible assets are amortised over their useful lives (5 to 10 years). Amortisation commences when the
asset is available for commercial sale.
When the Group is aware that it is probable that the future costs to complete a contract will exceed future
revenues, the expected loss is recognised as a provision for onerous contract and as an expense
immediately. Estimation is involved in determination of total contract costs and forecast costs to complete.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has
had, or may have, on the consolidated entity based on known information. This consideration extends to the
nature of the products and services offered, customers, supply chain, staffing and geographic regions in
which the consolidated entity operates. Other than as addressed in specific notes, there does not currently
appear to be either any significant impact upon the financial statements or any significant uncertainties with
respect to events or conditions which may impact the consolidated entity unfavourably as at the reporting
date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is
based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to
allocate an overall expected credit loss rate for each group. These assumptions include recent sales
experience, historical collection rates, the impact of the Coronavirus (COVID-19) pandemic and forward-
looking information that is available. The allowance for expected credit losses, as disclosed in note 14, is
calculated based on the information available at the time of preparation. The actual credit losses in future
years may be higher or lower.
Warranty provision
In determining the level of provision required for warranties the consolidated entity has made judgements in
respect of the expected performance of the products, the number of customers who will claim under the
warranty and how often, and the costs of fulfilling the conditions of the warranty. The provision is based on
estimates made from historical warranty data associated with similar products and services.
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2021
$
2020
$
48,000
18,000
66,000
44,500
18,000
62,500
–
23,028
–
6,605
(f) Auditor’s remuneration
BDO Audit (WA) Pty Ltd
Remuneration of the auditors of the entities for:
Auditing the full year financial report
Reviewing the half year financial report
BDO LLP
Remuneration of the auditors of the entities for:
Auditing the full year’s financial report
Non-audit services performed by BDO during the year
comprise:
DTI EMEA Ltd Tax Consulting
Note 26: Company information
31 Affleck Road
Perth Airport, WA, 6105
Tel: (08) 9479 1195
Internet: www.dti.com.au
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DTI Group Ltd is a listed public company (ASX: DTI), incorporated and operating in Australia.
Registered office and principal place of business
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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 18–56 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 2021 and of
its performance for the year ended on that date.
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:
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Chairman
31 August 2021
Melbourne, Australia
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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
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INDEPENDENT AUDITOR'S REPORT
To the members of DTI Group Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of DTI Group Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the financial
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 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations Act
2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110
Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 19 in the financial report which describes the events and/or 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.
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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.
Revenue Recognition
Key audit matter
How the matter was addressed in our audit
The Group generates a significant portion of its
revenue from customer contracts for the
provision, installation and maintenance of
equipment as disclosed in Note 2.
Revenue recognition is a key audit matter as the
accounting for the contracts involves significant
level of judgement in assessing whether the
criteria set out in AASB 15 Revenue from
Contracts with Customers (“AASB 15”) is met.
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 25.
Our procedures included, but were not limited
to the following:
Reading contracts or agreements for key
projects to obtain an understanding of key
contract terms and conditions;
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 our
expectations to identify unusual trends or
potentially onerous contracts;
Assessing the accuracy and completeness of
the calculation of onerous contract
provision;
Reviewing credit notes issued post year-end;
Reviewing the Group’s revenue recognition
policies across all revenue streams and
ensuring compliance with the accounting
standard; and
Reviewing disclosures in Note 2 and Note 25
in the financial report and ensuring
compliance with the accounting standard
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Existence and Valuation of Inventory
Key audit matter
How the matter was addressed in our audit
Due to significant value, there is a risk that the
inventories balance has not been appropriately
recognised in accordance with AASB 102
Inventories.
The existence and valuation of inventory is
considered a key audit matter given the nature of
inventories, the carrying value of such items and
the extent of management estimates and
judgements involved in assessing inventory
impairment and provisioning for obsolescence.
Refer to Note 8 and Note 25 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:
Attending the year-end stocktake for a
sample of locations counted a sample of
items;
Performing roll forward procedures from the
inventory count date to the financial year-
end date;
Testing inventory cut-off procedures;
Agreeing the carrying values of inventory to
supporting reconciliations;
Testing the cost of inventory by agreeing the
purchase price to supplier invoices;
Assessing the provision for obsolescence for
consistency with the Group’s provisioning
policy by reviewing the ageing profile of
inventory and sales activity;
Performing analysis on inventory turnover;
Assessing management’s provision over slow
moving and obsolete inventory; and
Reviewing disclosures in Note 8 and Note 25
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 2021, 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.
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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 at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 17 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of DTI Group Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Phillip Murdoch
Director
Perth, 31 August 2021
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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 PHILLIP MURDOCH TO THE DIRECTORS OF DTI GROUP LIMITED
As lead auditor of DTI Group Limited for the year ended 30 June 2021, 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 Limited and the entities it controlled during the period.
Phillip Murdoch
Director
BDO Audit (WA) Pty Ltd
Perth, 31 August 2021
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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.
62
Corporate directory
Directors
Company Secretary
Registered and
Principal Office
Auditor
Share Registrar
Bankers
Stock Exchange Listing
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Mr Greg Purdy
Mr Steve Gallagher
Mr Andrew Lewis
Mr Chris Afentoulis
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Mr Ian Hobson
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
DTI Group Ltd shares are listed on the Australian Securities Exchange
(ASX code: DTI)
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15
16
17
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19
20
Additional ASX Information
The shareholder information set out below was applicable at 25 August 2021.
Ordinary Share Capital
334,976,560 fully paid ordinary shares (inclusive of DTI Treasury shares) held by 698 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
Number of
Shareholders
Percentage of
Shareholding
e
s
u
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
39
148
100
220
115
622
0.00
0.12
0.24
2.37
97.27
100.00
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There were 367 holders with less than a marketable parcel of ordinary shares.
Twenty Largest Registered Shareholders
Rank Name
Number of
Shares
INVIA CUSTODIAN PTY LIMITED
124,831,863
Percentage
of Issued
Shares
%
37.27
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
103,253,989
30.82
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
INDUCAM NV/C
MONEX BOOM SECURITIES (HK) LTD
BLUEKARA PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
LTC GROUP HOLDINGS PTY LTD
WOOD STREET PTY LTD
10
MR LESLIE KROLL
ENERVIEW PTY LTD
LEGRANDE INVESTMENTS PTY LTD
BOND STREET CUSTODIANS LIMITED
MR BRADFORD PINTO
LTC GROUP HOLDINGS PTY LIMITED
2,007,642
MR NEIL EDWARD GOODEY
EMERALD SHARES PTY LTD
DR GARRY EDWARD RICHARDS
FINESHORE PTY LTD
HUMDINGER PTY LTD
1,928,318
1,750,000
1,720,101
1,696,121
1,686,157
Total
284,902,385
85.05
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7,582,286
6,203,078
5,350,000
4,646,880
3,857,140
3,183,216
3,034,886
2,750,000
2,644,445
2,508,485
2,177,778
2,090,000
2.26
1.85
1.60
1.39
1.15
0.95
0.91
0.82
0.79
0.75
0.65
0.62
0.60
0.58
0.52
0.52
0.51
0.50
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:
Name
INVIA CUSTODIAN PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
Number
124,831,863
103,253,989
%
37.27
30.82
Fully Paid Ordinary Shares
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.
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Escrowed Shares
On-market Buyback
The number of shares subject to voluntary escrow is nil (2019: Nil).
The Company is not currently conducting an on-market buyback of its shares.
Company Secretary
Registered and
Principal Office
Share Registrar
Ian Hobson
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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