DXN Limited
(ACN 620 888 548)
Annual Report
For the year ended 30 June 2021
MAKING
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GLOBAL
LOCAL
DXN Limited | 2021 ANNUAL REPORT CONTENTS
Vision and Mission ..............................................................................................................................4
Corporate Directory ............................................................................................................................5
Chairman’s Report .............................................................................................................................7
CEO Report ...........................................................................................................................................8
Directors’ Report.............................................................................................................................. 12
Auditor’s Independence Declaration ........................................................................................... 28
Statement of Profit or Loss and Other Comprehensive Income ............................................. 29
Statement of Financial Position .................................................................................................... 30
Statement of Changes in Equity ................................................................................................... 31
Statement of Cash Flows ............................................................................................................... 32
Notes to the Financial Statements ............................................................................................... 33
Directors’ Declaration ..................................................................................................................... 72
Independent Audit Report .............................................................................................................. 73
Corporate Governance Statement ................................................................................................ 78
Additional Shareholder Information ............................................................................................ 82
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DXN Limited | 2021 ANNUAL REPORT Vision and Mission
VISION AND MISSION
OUR VISION:
To define the EDGE by bringing critical communication infrastructure closer
to our customers by making global local.
OUR MISSION:
We will be Australia’s leading edge infrastructure company for colocation and
turnkey solutions, building the best modular solutions safely, creating value
for our customers, staff and shareholders.
OUR KEY VALUE PROPOSITIONS:
DESIGN
Deep domain knowledge in house skills including mechanical
electrical and structural engineering.
BUILD
Australian owned Prefabricated Modular manufacturer with the
highest quality standards that the data centre industry expects.
OPERATE
Secures, Maintains and Operates critical infrastructure.
Our Vision, Mission and Key Value Propositions are the
critical focus points for our organisation and have helped
shape our FY21 year.
CERTIFICATIONS AND GLOBAL STANDARDS
Management Systems
Certified Company
Quality Certified System
ISO 9001
Environmental
Certified System
ISO 14001
Safety Certified System
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Corporate Directory
CORPORATE
DIRECTORY
NON- EXECUTIVE
CHAIRMAN
John Baillie
CHIEF EXECUTIVE OFFICER
& MANAGING DIRECTOR
Matthew Madden
NON-EXECUTIVE
DIRECTORS
Richard Carden
John Dimitropoulos
COMPANY SECRETARY
George Lazarou
REGISTERED OFFICE
5 Parkview Drive
SYDNEY OLYMPIC PARK NSW 2127
Telephone: 1300 328 2390
PRINCIPAL OFFICE
3 Dampier Road
WELSHPOOL WA 6106
Telephone: 1300 328 239
AUDITORS
Moore Australia Audit (WA)
Level 15 Exchange Tower
2 The Esplanade
PERTH WA 6000
Telephone: +61 8 9225 5355
SHARE
REGISTRAR
Automic Pty Ltd
Level 2
267 St Georges Terrace
PERTH WA 6000
Telephone: 1300 288 664
SOLICITORS
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
PERTH WA 6000
Telephone: +61 8 9321 4000
BANKERS
ANZ
15 Hutton Street
OSBORNE PARK WA 6017
STOCK EXCHANGE
LISTING
Australian Securities Exchange
(Home Exchange: Perth,
Western Australia)
Code: DXN, DXNOD
DXN Limited | 2021 ANNUAL REPORT <5>
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DXN Limited | 2021 ANNUAL REPORT Chairman’s Report
Chairman’s
Report
Dear fellow shareholder,
The last two years have been particularly challenging for DXN.
During 2020 we reviewed our Board structure and Corporate
Strategy with the assistance of independent consultants and
the outcome being that John Dimitropoulos joined the Board.
John brings vast experience in global M&A transactions in the
Telco and Technology sector. The strategy review endorsed
and validated our focus on regional Edge data centres and our
modular manufacturing business direction.
This financial year is going to be transformational. There is
increased institutional interest from Asia in our story. As an
early indication of this interest, we welcome our new strategic
investor DC Alliance, a Singapore based DC owner and operator.
Our recent purchase of Secure Data Centre (SDC) in Darwin
NT is just an example of our focus for the future, specifically,
regional smaller edge data centres well connected to sub sea
cable locations within the Asia Pacific region. There is enormous
growth potential in the edge data centre market primarily driven
by an expanded 5G infrastructure, data sovereignty, the Internet
of Things (IoT) and the huge growth in video streaming.
The Asia Pacific and ASEAN countries is where growth will be
in the modular data centre market. Our modules are already
deployed in over 10 countries and within major global mining
companies. We recently engaged with Austrade to assist us in our
export expansion.
A new division and revenue stream is being considered to service
our modular sales, this will provide an annuity income stream
over time. Further new products such as Micro Data Centre’s for
locations like 5G sites will be launched.
On behalf of the Board of Directors, I want to thank the DXN team
for their efforts during this challenging year with lockdowns and
working remotely during the global pandemic. Thank you also to
all our shareholders for your continued interest and support.
John Baillie
Non-Executive Chairman
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DXN Limited | 2021 ANNUAL REPORT CEO Report
DXN designs, builds, owns and operates data centres. Offering
integrated and tailored solutions to its customers through our
two business units.
• Modular manufacturing - prefabricated data centre
solutions that are scalable, purpose built and rapidly
deployable for customers globally.
•
Data centre operations - offers a highly secure
environment for mission critical computing
infrastructure. Currently two fully operational data
centres in Sydney (SYD01) and Hobart (TAS01) and
soon to be three, with SDC in Darwin.
MOVING TOWARD THE EDGE – DXN’S OPPORTUNITY
Email, web browsing, TV streaming services, Cloud storage and
Zoom or Teams meetings with the latter becoming a part of our
normal daily activity for schooling, university lectures, telehealth
and business meetings. All of there services amongst many
others, are growing demand exponentially and are delivered
as a part of the complex ecosystem made up of a web of
infrastructure that includes: network connectivity like fibre optic
cable systems on land and under sea, in the air through mobile
cell towers and with streetside cabinets all routed through
myriads of Data Centres in one big continuous cycle.
This infrastructure is in the midst of a transition from the mobile
internet driven by the evolution of the smartphone to the hyper
connected era where nearly every object in our physical world
can have computing and connectivity built in, whether it’s a simple
consumer doorbell or a complicated robotic manufacturing device.1
This hyper-connectivity will also cause a transition from vertically-
integrated, industry-specific solutions that is now driving the
decentralization of computing, communications and business
processes.1
The decentralisation of this infrastructure will require different
types of data centres and processing locations to be built or
enhanced, many of these will be through prefabricated modular
solutions built in a factory and shipped to the site.
As of January 2021 there were 4.66 billion active internet users
worldwide - 59.5 percent of the global population. Of this total, 92.6
percent (4.32 billion) accessed the internet via mobile devices.2
Whilst much of this demand has been delivered by Hyperscale
Data Centres, which will continue to grow throughout the next
decade, much more of the demand will be delivered by smaller
distributed EDGE data centres closer to the customer. The likely
key areas for growth will be in South East Asia, India, The Pacific,
South America and Africa.
These are the key demand drivers and the opportunity that DXN
is uniquely positioned to exploit.
1 State of the Edge 2021: A Market and Ecosystem Report for Edge Computing
2 Worldwide digital population as of January 2021
Matthew Madden
Chief Executive Officer and Managing Director
CEO REPORT
On behalf of DXN Limited, I would like to
welcome our shareholders to this year’s
Annual Report, which covers the 12-month
financial reporting period ending 30 June 2021.
FY21 was a transformational year for the
company with the successfully delivery of
a number of key customer projects, new
customers, reduced operational cost,
increased revenue and the maiden
achievement of a cashflow positive quarter
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DXN Limited | 2021 ANNUAL REPORT CEO REPORT
Continued
MODULAR MANUFACTURING
The DXN Modules manufacturing strategic focus is on three key
segments: Subsea Cables, the Resources Sector and EDGE data
centre opportunities delivered improved results in FY21. New
customers secured included contracts with Newcrest Mining,
CPS, Streamline Connect, Sub.Co, Solomon Island Cable Company,
Boeing Defence, and Covalent Lithium. These customers are a
validation of DXN’s strategic focus into those sectors.
travel restrictions presented challenges for project delivery
for DXN throughout FY21. To offset potential delays and issues
caused by Covid-19, DXN entered into several sub-contract
arrangements to help with commissioning and installation
activities in both international and Australian locations as well
as adaptions to our Factory acceptance testing process with the
use of independent third-party verification and virtual factory
acceptance using video.
SUBSEA CABLE
With the delivery of 10 Cable Landing Stations (CLS) in the region,
DXN is fast becoming the go to company for prefabricated CLS
that are built in our factory and delivered to site, to meet project
time frames and exacting standards. FY21 saw the successful
delivery of a number of international CLS projects including
Southern Cross Next Cable, Teletok, Solomon Islands submarine
cable company and Sub.Co. Border closures and International
Finalisation of the Southern Cross Next project was a great
celebration for the DXN team. An extremely challenging project
that required close collaboration with the customer resulting
in a safe and successful delivery. We commissioned three cable
landing stations in extremely remote locations in the pacific.
The islands of Kiribati, and Tokelau will be receiving highspeed
internet services for the first time when these cables are turned
on in 2023.
“ DXN is fast becoming the go to company to get
Cable landing stations built and delivered to meet
project time frames and exacting standards.
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DXN Limited | 2021 ANNUAL REPORT CEO REPORT
Continued
RESOURCES
The mining sector has also seen growth over prior years with
deliveries to Newcrest Mining, Streamline Connect and CPS. The
Data Centre delivery to their mine site in Cadia (near Orange in
NSW) was the first prefabricated modular data centre delivered
for Newcrest.
EDGE
By 2025, 175 zettabytes (or 175 trillion gigabytes) of data will be
generated around the globe. Edge devices will create more than
90 zettabytes of that data 3.The requirement for specialised EDGE
data centres is increasing and a greater level of redundancy
and reliability is being requested. The company has seen this
increased demand and has developed two TIER-Ready III module
designs that have been approved by the Uptime Institute. We
are now seeing an increase in our pipeline and expect the EDGE
opportunities to continue to grow.
SAFETY ABOVE ALL ELSE
We are a Manufacturing Company, and Safety is of critical
importance to us. “Safety above all else” is a company value and
is part of our embedded safety culture at DXN and something
that we are very proud of. In FY21, DXN transitioned to the new
Workplace Health and Safety standard ISO 45001 certification.
Over 45,000 manufacturing and site work hours were completed
during FY21 with zero lost time injury. We moved our factory
operations from Balcatta to Welshpool during the year to a
purpose built facility creating a more efficient and safer work
place. DXN constantly reviews our safety practices and systems
with our people, customers and suppliers to ensure that we
maintain our goal of zero injuries. Well done DXN team!
3 IDC Data Age 2025 report The Digitization of the World: From Edge to Core
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Over 45,000 manufacturing and site
work hours with zero lost time injury.
DXN Limited | 2021 ANNUAL REPORT CEO REPORT
Continued
DATA CENTRE OPERATIONS
Revenue in Data centre operations increased from ~$100k in
FY20 to ~$1m in FY21 largely driven by our Tasmanian Data
Centre TAS01 acquired in May 2020 and fully integrated in FY21.
SYD01 our Sydney Data centre located in Sydney Olympic Park
had a slow uptake in FY21, our new sales strategy implemented
in September 2020 has seen an increase in Telco connectivity to
the site lifting the number of Telecommunication carriers from
three to five with the addition of 5GN and FibreconX.
Telecommunications choice and inter data centre connectivity is
an important selection criteria for customers and we expect to
see an improvement in FY22 as a result of increased connectivity
and product choices.
Our strategy of Regional EDGE data centres will be a primary
focus in FY22. We look forward to onboarding SDC Darwin into
DXN, bringing on line our third data centre in Australia. Watch
this space.
STRATEGY IMPLEMENTATION
DXN has made significant progress with its restructuring and
strategy implementation throughout FY21. The results of which
are key financial improvements in comparison to prior years.
Increased revenues, reduced costs and margin maintenance.
•
•
Operating revenue increased by 55% to $8m, driven by
strong growth in both the modules business (39%) and
the Colocation business with the addition of TAS01
EBITDA loss of $2.6m ($683k gain including liability
write off) has improved 71% from an EBITDA loss of
$9.3m in 2020
Operating costs have been a strong focus for the company
and have decreased from $12.1m in FY20 to $6.2m in FY21.
Gross Margin has remained stable with a slight increase from
27% to 28%.
“
DXN is positive about the future of the company with a strong
sales pipeline and the onboarding of a new data centre in Darwin.
We would like to take the opportunity to thank our shareholders,
staff and customers for their ongoing support.
Matthew Madden
DXN LIMITED, CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR
”
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DXN Limited | 2021 ANNUAL REPORT DIRECTORS’
REPORT
Directors’ Report
The directors present the following report on DXN Limited and its controlled entities (“the Group”) during or at
the end of the financial year ended 30 June 2021.
1. DIRECTORS
The names and details of the Group’s directors in office during and since the financial year end until the date of
the report are as follows.
Mr John Baillie
Mr Matthew Madden
(appointed to Board 26 August 2020)
Mr Richard Carden
Mr John Dimitropoulos (appointed 1 October 2020)
Mr John Duffin
(resigned 26 August 2020)
INFORMATION ON DIRECTORS
John Baillie
Independent Non-Executive Chairman
Period as Director
Since 23 May 2019
Qualifications
Graduate of the Australian Institute of Company Directors (GAICD)
Experience
Graduate Diploma (Securities) from the Securities Institute of Australia
Mr Baillie has over 25 years’ experience in financial services, including wealth
management, corporate advisory, investor relations and private equity capital
raisings. Mr Baillie was a Senior Investment Advisor with Shaw and Partners
(formally Shaw Stockbroking) for 22 years, with a focus on portfolio management,
trading and private equity raisings. In 2015 Mr Baillie established JB & Partners
Corporate Advisory that specializes in strategic advice and succession planning
for private companies; particularly family businesses. He has advised in a diverse
range of industries, including financial services (particularly AFSL issues), FMCG
companies, e-Commerce and the funeral industry.
Interest in Equities
2,634,982 Fully paid Ordinary Shares
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DXN Limited | 2021 ANNUAL REPORT
Matthew Madden
Chief Executive Officer & Managing Director
Period as Director
Since 26 August 2020
Qualifications and
Memberships
Experience
MBA from Macquarie Graduate School of Management
Member of the Australian Institute of Company Directors (MAICD)
Mr Madden is a highly experienced data centre and telecommunications executive
with a solid track record of building and leading high performing teams, as well
as a strategic focus on world-class customer solutions underpinning long term
partnerships. Mr Madden has broad experience in B2B telco, data centre and
technology companies having held a variety of senior executive positions including
General Manager Corporate and Enterprise markets at Nextgen Group, and Managing
Director, Infoplex. At Nextgen, Mr Madden was responsible for significant sales into
the Metronode data centres for the corporate, enterprise and reseller channels.
Interest in Equities
5,000,000 Fully paid Ordinary Shares
7,500,000 Options exercisable at $0.10 on or before 19 August 2022
5,000,000 Listed options exercisable at $0.02 on or before 18 May 2023
6,000,000 Performance Rights
Richard Carden
Non-Executive Director
Period as Director
Since 4 August 2017
Qualifications and
Memberships
Nil
Experience
Mr Carden is an Asia based business leader with over 25 years of experience in the
telecoms, data centre and IT industry. Richard has a solid track record in driving sales
productivity and revenue growth. He was previously the SVP Global Enterprise Sales
for Speedcast (ASX:SDA). Mr Carden joined Speedcast in 2013 when the company
had just been acquired for circa A$40M and as part of the Executive team developed
the M&A plus organic growth strategy that allowed the company to list in 2014 and
achieve a market cap of over A$1.5B in 2018. Prior, Mr Carden was the Global SVP for
Pacnet and responsible for over 300 sales staff and revenues of more than A$800M.
Earlier, Mr Carden spent almost 10 years in Japan in roles that included President &
CEO of Verizon, Japan.
Interest in Equities
3,312,500 Fully paid Ordinary Shares
John Dimitropoulos
Independent Non-Executive Director
Period as Director
Since 1 October 2020
Qualifications and
Memberships
Experience
Bachelor of Business (Accounting and Computer Science) Deakin University
Member of the Australian Institute of Company Directors (MAICD)
Mr Dimitropoulos brings over 30 years of extensive international experience in the
Telecoms, Media and Technology sectors. Mr Dimitropoulos recent stints include
assisting internet security giant McAfee in the US with both Corporate Development
and Sales Channel optimisation, and as a Corporate Advisor to Korea’s SK Telecom’s
group company’s CEO’s within SE Asia.
Mr Dimitropoulos has been involved with, and led, many international acquisitions
and divestments in Europe, Asia, and the US for numerous US based technology
companies. At Real Networks, a Seattle based company where Mr Dimitropoulos
spent nearly 12 years consulting, he was responsible for assisting in the
development of the long-term strategy for its Mobile Entertainment division as well
as driving M&A activity to deliver over US$600m in deals during his tenure.
In Australia, Mr Dimitropoulos assisted in the foundational work that resulted in Run
Property, and in the mid 90’s was CEO of the first pre-paid mobile company
in Australia. Mr Dimitropoulos has financial interests in an online e-commerce
company as well as small cottage manufacturing of Australian products for export.
Interest in Equities
Nil
The Directors have been in office to the date of this report unless otherwise stated.
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DXN Limited | 2021 ANNUAL REPORT INFORMATION ON DIRECTORS (Continued)
DIRECTORSHIPS OF OTHER LISTED COMPANIES
Directorships of other listed companies held by directors in the three (3) years immediately before the end of
the financial period are as follows:
Name
John Baillie
Company
Wilson Alternative Assets Limited
(formerly Blue Sky Alternatives
Access Fund Limited)
Period of directorship
29 November 2018 to present
Richard Carden
John Duffin
(resigned 26 August 2020)
Matthew Madden
(appointed 26 August 2020)
John Dimitropoulos
(appointed 1 October 2020)
-
-
-
-
-
-
-
-
CHIEF FINANCIAL OFFICER
Mr Greg Blenkiron was appointed Chief Financial Officer on 28 October 2019. Resigned 28 May 2021.
Ms Kristy Challingsworth was appointed Chief Financial Officer on 19 July 2021.
COMPANY SECRETARY
The following person held the position of Company Secretary during and at the end of the financial period:
MR GEORGE LAZAROU
Mr Lazarou is a qualified Chartered Accountant with over 25 years’ experience, including five years as a partner
of a mid-tier accounting firm, specialising in the areas of audit, advisory and corporate services. Mr Lazarou
has extensive skills in the areas of corporate services, due diligence, independent expert reports, mergers &
acquisitions and valuations.
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DXN Limited | 2021 ANNUAL REPORT
2. PRINCIPAL ACTIVITIES
Data centres provide space, power, cooling, and physical security for clients to house their computer servers
and related storage and networking equipment. Data centres provide a recurring revenue stream and our
modular approach allows us to match our capital requirements with capacity sold, thereby reducing our upfront
capital requirements. This disruptive model is at the forefront of data centre engineering techniques. Our
construction cost (per megawatt) is less than our industry peers.
Our DXN Modules division engineers, constructs and commissions data centre solutions globally. Our data
centre infrastructure has a wide range of applications, these include edge data centres and telecommunications
applications (satellite, radio centres, cable landing stations). Our prefabricated construction method reduces
the on-site labour and time to deploy and improves quality. Solutions by DXN Modules are ideal for rapid
deployments in both urban and remote locations.
3. OPERATING RESULTS
The loss of the Group after providing for income tax amounted to $4,812,631 (2020: $12,590,529).
4. DIVIDENDS PAID OR RECOMMENDED
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of
a dividend to the date of this report.
5. REVIEW OF OPERATIONS
DATA CENTRE OPERATIONS
Colocation sales in SYD01 our Sydney Data Centre continue to be slow but our sales strategy implemented in
September 2020 has seen an increase in Telco connectivity to the site with 5GN and Fibreconnex installing
racks and fibre services.
TAS01 (our Hobart Data Centre), Contributed $877k of revenue to the FY21 results. TAS01 has capacity to triple
its current capacity under its current approved DA. This can be done without interrupting current services at the
site due to its modular construction. Our primary customer at the site is Tasmanet, one of only two accredited
suppliers to the Tasmanian Government for the Tasmanian Cloud which is hosted at TAS01. The Tasmanian
Cloud delivers services to enable the Tasmanian Government to better serve the needs of its community,
support the local ICT industry, and moving the majority of Government data to the Tasmanian Cloud (secure on-
island data centre services).
MODULAR DIVISION
The DXN Modules manufacturing strategic focus on subsea cables, the resources sector and EDGE data centre
opportunities has seen revenue increase 39% to $7.1m. During the year a significant cable landing station
contract was awarded by SUB.CO, as well as modular data centre sales in the mining sector with contracts
awarded by Newcrest Mining, Streamline Connect and Covalent Lithium as well as Boeing Defence. The pipeline
of new business opportunities in our key markets continues to be strong and this is expected to support sales
into FY22.
6. SIGNIFICANT CHANGES IN STATE OF AFFAIRS
The following significant changes in the state of affairs of the Group occurred during the financial year:
•
•
•
•
•
•
On 15 July 2020, the Group issued 5,000,000 fully paid ordinary shares following the exercise
of options $0.02.
On 19 August 2020, the Group advised that 3,750,000 options have expired and 150,000 performance
rights were cancelled
On 25 August 2020, the Group issued 159,120 fully paid ordinary shares following the exercise of
options at $0.02.
On 9 September 2020, the Group issued 5,000,000 fully paid ordinary shares following the exercise
of options at $0.02.
On 18 September 2020, the Group issued 18,850 fully paid ordinary shares following the exercise
of options at $0.02.
On 28 September 2020, the Group issued 65,000 fully paid ordinary shares following the exercise
of options at $0.02.
•
On 28 October 2020, the Group advised that 750,000 options have expired.
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DXN Limited | 2021 ANNUAL REPORT
•
•
•
•
•
•
•
•
On 11 November 2020, the Group advised that 105,568,130 options have expired.
On 30 November 2020, the Group advised that 32,500,000 options have expired.
On 21 December 2020, the Group advised that 111,111 performance rights were cancelled.
On 24 December 2020, the Group issued 111,111 fully paid ordinary shares upon vesting of
performance rights.
On 12 March 2021, the Group issued 411,813 fully paid ordinary shares upon vesting of
performance rights.
On 5 April 2021, the Group advised that 6,828,125 options have expired.
On 15 April 2021, the Group issued 44,000,000 fully paid ordinary shares at $0.012 and 22,000,000
options with expiry date on 30 April 2023 at $0.03.
On 2 June 2021, the Group advised the cancellation of 1,200,000 performance rights and 1,000,000
options with an expiry date 28 October 2021 and 1,500,000 with an expiry date 28 October 2022
There were no other significant changes in the state of affairs of the Group during the financial year.
7. FUTURE DEVELOPMENTS
Our primary focus is to grow our revenues from our Data Centres and our modules business. Tasmania
has provided a good contribution to Data Centre Operations revenues this year. Our Goal is to expand our
Data Centre (DC) footprint to other Regional geographies. We are looking at both greenfield and brownfield
opportunities to grow revenue and profit. With regard to greenfield opportunities, DXN board and management
have established investment principles and investment hurdles. As an example, a new site opportunity must
have substantial underlying revenue commitments prior to an investment being presented for board approval.
8. AFTER REPORTING DATE EVENTS
On 9 September 2021, the Company entered into a binding share and unit sale agreement to purchase 100% of
a data centre in Darwin, Northern Territory, for a purchase price of ~$4.6 million in cash and $200,000 worth of
shares in the Company. $850,000 of the purchase price will be retained to cover any warranty claims associated
with the acquisition. Subject to any warranty claims, the retention amount will be paid one year
after settlement.
On 9 September 2021, the Company announced it had executed a binding term sheet for a new four year
secured $4 million debt facility with Pure Asset Management to support the acquisition of the Darwin Data
Centre and the Company’s future growth strategies.
On 9 September 2021, the Company announced it would undertake a Share Purchase Plan to existing
shareholders to raise up to $1.5 million, with the offer closing on 30 September 2021.
On 10 September 2021 the Company completed a placement for ~$1.64 million through a placement to
strategic investor DC Alliance Pte Ltd and sophisticated investors.
No other matters or circumstances have arisen since the end of the financial year which significantly affected
or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of
the Group in future financial years.
9. MEETINGS OF DIRECTORS
During the year, 11 meetings of directors were held. Attendances by each director during the year were as follows:
Directors’ Meetings
Audit & Risk
Remuneration &
Nomination
Eligible to
Attend
Attended
Eligible to
Attend
Attended
Eligible to
Attend
Attended
11
11
8
9
2
11
11
8
9
-
3
3
1
2
-
3
3
1
2
-
1
1
1
-
-
1
1
1
-
-
Director
John Baillie
Richard Carden
John Dimitropoulos
(appointed 1 October 2020)
Matthew Madden
(appointed 26 August 2020)
John Duffin
(resigned 26 August 2020)
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DXN Limited | 2021 ANNUAL REPORT 10. ENVIRONMENTAL ISSUES
The Group’s operations are not regulated by any significant environmental regulations under a law of the
Commonwealth or of a state or territory of Australia.
11. OPTIONS
At the date of this report unissued ordinary shares of the Group under option are:
Expiry Date
19-Aug-22
31-Dec-22
30-Apr-23
18-May-23
Exercise Price
Number of Shares
$0.10
$0.10
$0.03
$0.02
7,500,000
7,500,000
22,000,000
641,936,886
22,000,000 options at $0.03 with an expiry date of 30 April 2023 were issued during the year. 149,396,255
options expired, 2,500,000 options were cancelled and 10,242,970 options were exercised during the year.
12. INDEMNIFYING OFFICERS OR AUDITOR
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001 every Officer or
agent of the Group shall be indemnified out of the property of the Group against any liability incurred by them
in their capacity as Officer or agent of the Group or any related corporation in respect of any act or omission
whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.
The Group has paid premiums to insure each Director and officer against liabilities for costs and expenses
incurred by them in defending any legal proceedings arising out of their conduct while acting in their capacity of
Director or officer of the Group, other than conduct involving a wilful breach of duty in relation to the Group. The
total amount of premiums paid was $47,000.
13. PROCEEDINGS ON BEHALF OF COMPANY
The Company’s liability to pay rent for the Melbourne property is the subject of a dispute. There are currently
legal proceedings on foot between the landlord of the Lorimer Street property and the Company, in which the
landlord is claiming unpaid rent since April 2021. The Company has brought a claim alleging that the landlord
repudiated the lease, the lease has been terminated and the Company has no ongoing liability to pay rent. In
addition, the Company has sued the landlord for loss and damage arising as a result of alleged breaches of the
lease by the landlord. Rent has been characterised as a contingent liability pending determination or resolution
of the dispute. A $3.3 million lease liability write off has been recorded in this year’s Statement of profit and
loss and other comprehensive income.
14. AUDITORS INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2021 has been received and can be
found on page 28 of the annual report.
15. NON-AUDIT SERVICES
The following non-audit services were provided by Moore Australia (VIC) Pty Ltd, an independent member
firm of the Moore Australia network. The Directors are satisfied that the provision of non-audit services is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The nature and scope of each type of non-audit service provided means that auditor independence was not
compromised.
Moore Australia (VIC) Pty Ltd or their related or other network entities received or are due to receive the
following amounts for the provision of non-audit services:
Tax Compliance Services
Consulting Services
2021
$
9,280
23,740
33,020
2020
$
9,620
9,620
<17>
DXN Limited | 2021 ANNUAL REPORT 16. DIVERSITY
The Company believes that the promotion of diversity on its Board and within the organisation generally is good
practice and is committed to managing diversity as a means of enhancing the Company’s performance. There
are currently no women on the Company’s board and two woman filling senior management positions within
the Company, however the Company (as set out in the Diversity Policy, further information in relation to which
is set out on the Company’s website at https://dxn.solutions/ in the Corporate Governance section) will focus
on participation of women on its Board and within senior management and has set measurable objectives for
achieving gender diversity.
Gender diversity objectives for the employment of women are as follows:
•
•
•
to the Board – 20% by 2022;
to senior management (including board and company secretary) – 20% by 2022
to the organisation as a whole – 25% by 2022
As at the date of this report, the Company has the following proportion of women appointed:
•
•
•
to the Board – 0%
to senior management (including board and company secretary) – 29%
to the organisation as a whole – 18%
<18>
DXN Limited | 2021 ANNUAL REPORT 17. REMUNERATION REPORT - AUDITED
DETAILS OF KEY MANAGEMENT PERSONNEL
The following persons were directors of the Group during the financial year unless otherwise stated:-
Mr John Baillie
Independent Non-Executive Director
Mr Matthew Madden
Managing Director (appointed 26 August 2020)
Mr Richard Carden
Non-Executive Director
Mr John Duffin
Independent Non-Executive Director (resigned 26 August 2020)
Mr John Dimitropoulos
Non-Executive Director (appointed 1 October 2020)
REMUNERATION POLICY
The remuneration policy of the Group has been designed to align director and executive objectives with
shareholder and business objectives by providing a fixed remuneration component which is assessed on an
annual basis in line with market rates and offering specific long-term incentives based on key performance
areas affecting the Group’s financial results. The board believes the remuneration policy to be appropriate and
effective in its ability to attract and retain the best directors and executives to run and manage the Group.
The board’s policy for determining the nature and amount of remuneration for board members and senior
executives of the Group is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and other senior
executives, was developed by the board. All executives receive a base salary (which is based on factors such
as length of service and experience) and superannuation. The board reviews executive packages annually
by reference to the Group’s performance, executive performance and comparable information from industry
sectors and other listed companies in similar industries.
The board may exercise discretion in relation to approving incentives, bonuses and options. The policy is to
attract the highest calibre of executives and reward them for performance that results in long-term growth in
shareholder wealth.
Executives are also entitled to participate in any employee incentive plan the Group adopts.
The executive directors and executives receive superannuation guarantee contribution required by the
government, which is currently 10% (2021: 9.5%) and do not receive any other retirement benefits.
All remuneration paid to directors and executives is valued at the cost to the Group and expensed. Shares given
to directors and executives are valued as the difference between the market price of those shares and the
amount paid by the director or executive. Options and performance rights are valued using a binomial option
pricing method.
The board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The board determines payments to the non-executive directors and reviews
their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required. The maximum aggregate amount of fees that can be
paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting (currently
$500,000). Fees for non-executive directors are not linked to the performance of the Group. However, to align
directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Group and are
able to participate in any employee incentive plan the Group adopts.
Performance based remuneration
The Group has a performance-based remuneration component built into director and executive remuneration
packages as disclosed in the “Compensation of Key Management Personnel” for the year table on page 20.
Company performance, shareholder wealth and director’s and executive’s remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders and directors
and executives. This will be facilitated through the issue of options or performance rights to the majority of
directors and executives to encourage the alignment of personal and shareholder interests. The Group believes
the policy will be effective in increasing shareholder wealth.
<19>
DXN Limited | 2021 ANNUAL REPORT Compensation of key management personnel for the year ended 30 June 2021 and 30 June 2020
SHORT-TERM BENEFITS
POST EMPLOYMENT
EQUITY-BASED BENEFITS
TOTAL
Salary &
Fees
$
Cash
Bonus
$
Non-
Monetary
$
Super-
annuation
$
Termination
Benefits
$
Options or
Performance
Rights $
% Performance
based of Total
Remuneration
$
Directors
John Baillie – Non-Executive Chairman 10
2021
2020
62,000
40,855
-
-
Douglas Loh – Non-Executive Chairman 1
2021
2020
-
58,669
-
-
-
-
-
-
John Dimitropoulos – Non-Executive Director 2
2021
2020
27,000
-
-
-
-
-
Terry Smart – Independent Non-Executive Director 3
2021
2020
-
25,662
-
-
Richard Carden – Non-Executive Director 10
2021
2020
35,400
34,800
-
-
-
-
-
-
John Duffin – Independent Non-Executive Director 4, 10
2021
2020
4,892
34,800
-
-
Tim Desmond – Non-Executive Director 5
2021
2020
-
18,000
Specified Executives
-
-
-
-
-
-
-
-
-
4,063
2,565
-
-
2,438
-
-
465
456
-
-
Matthew Madden – Chief Executive Officer & Managing Director
2021
2020
300,000
261,538
25,398
48,750
Greg Blenkiron – Chief Financial Officer 6
2021
2020
200,777
137,572
26,453
-
George Lazarou – Company Secretary 7
2021
2020
-
57,391
-
-
-
-
-
-
-
-
Simon Forth – Joint Interim Chief Executive Officer 8
2021
2020
-
172,104
-
-
-
-
Richard Whiting – Joint Interim Chief Executive Officer 9
25,000
25,000
20,127
13,069
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2021
2020
-
100,420
-
-
-
-
-
6,640
-
43,044
Shalini Lagrutta – Global Head of Sales and Marketing (from 1st of February 2021)
16,350
5,228
9.868
58,025
68,016
-
-
48,272
5. Resigned 17 March 2020.
6. Resigned 28 May 2021
7.
Citadel Capital Pty Ltd, a company Mr Lazarou has an interest in,
received fees for Chief Financial Officer services and Company
Secretarial services for the period 1 July to 25 October 2019 (Mr
Lazarou ceased being a key management personnel on this date). Mr
Lazarou continues to receive fees for Company Secretarial services and
2021
103,869
-
Total Remuneration
2021
2020
733,938
941,811
51,851
48,750
-
-
-
1.
Mr Loh provided consultancy services amounting to $15,900 on normal
commercial terms, through Emmanuel Investment Holdings Pty
Ltd, a Company Mr Loh has an interest in. These are included in the
remuneration above. Mr Loh resigned 17 March 2020.
2. Appointed 1 October 2020.
3. Resigned 17 March 2020.
4. Resigned 26 August 2020.
<20>
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
62,000
40,855
-
64,260
50.6%
126,992
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
204,641 41.5%
208,183
38.3%
-
34,655
10.7%
18.7%
-
-
15,579
21.3%
29,565
-
-
28,099
35,400
34,800
5,357
35,256
-
18,000
555,039
543,471
247,357
185,297
-
72,970
-
-
-
93,473
32.6%
287,155
-
-
-
45,773
23.4%
195,877
6,225
5.2%
119,962
210,866 20.0%
461,924 29.44%
1,054,680
1,568,773
is now an employee of the Group.
8. Resigned 8 May 2020
9. Resigned 20 December 2019
10.
Note the directors accepted a 20% reduction in directors’ fees for a
period of 3 months due to Covid19 from 1 May 2020
DXN Limited | 2021 ANNUAL REPORT OPTIONS OR PERFORMANCE RIGHTS ISSUED AS PART OF REMUNERATION
During the financial year ended 30 June 2021 there were no performance rights and options issued as part of
remuneration to directors, key executives, employees, and consultants.
For details on the valuation of the Performance Rights, including models and assumptions used, please refer
to Note 29. There were no alterations to the terms and conditions of the Performance Rights granted as
remuneration since their grant date.
REMUNERATION POLICY OF KEY MANAGEMENT PERSONNEL
The objective of the Group’s executive reward framework is set to attract and retain the most qualified and
experienced directors and senior executives. The board ensures that executive reward satisfies the following
key criteria for good reward governance practices:
•
•
•
•
Competitiveness
Acceptability to shareholders
Performance linkage
Capital management
NON-EXECUTIVE DIRECTORS
The constitution of the Group provides that the non-executive Directors may collectively be paid as
remuneration for their services a fixed sum not exceeding the aggregate maximum sum per annum from
time to time determined by the Group in a general meeting (currently $500,000). The Chairman’s fees are
determined independently to the fees of non-executive Directors based on comparative roles in the external
market. The remuneration policy has been tailored to increase goal congruence between shareholders and
Directors. The Group will look to adopt an employee incentive plan to encourage the alignment of personal and
shareholder interests. The Group believes this policy will be effective in increasing wealth.
DIRECTORS’ FEES
A director may be paid fees or other amounts as the directors determine where a director performs special
duties or otherwise performs services outside the scope of the ordinary duties of a director. A director may also
be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.
SERVICE AGREEMENTS
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. Details of these agreements are as follows:-
<21>
DXN Limited | 2021 ANNUAL REPORT Name:
Title:
Matthew Madden
Chief Executive Officer
Agreement Commenced:
19 August 2019
Term of Agreement:
The employment shall continue until terminated in accordance with the provisions
for termination, being by either party with 3 months’ notice.
Details:
There are three components to Mr Madden’s remuneration:
(a) Gross Annual Remuneration Package
Mr Madden will be paid a base annual remuneration of $300,000 plus statutory
superannuation contributions, which is capped at $27,500 per annum. The employer
may review the employee’s performance, remuneration and benefits in accordance
with the employer policy from time to time.
(b) Short Term Incentive Benefits
Subject to the Mr Madden’s continued employment by the Group at the relevant
Review Date, the Board may, in its absolute discretion, elect to provide the Executive
with an annual bonus up to an amount equal to 30% of the Base Salary, plus
superannuation, based on the Annual Review (STI Bonus).
Mr Madden (in his sole discretion) can elect to have the STI Bonus (in whole or in
part) paid in Shares. The value of the Shares shall be the 15-day volume weighted
average price (VWAP) of Shares calculated on the day after release of the Group’s
full year financial accounts
(c) Long Term Incentive Benefits
Mr Madden has been issued the following Performance Rights in accordance with
the terms and conditions of the Company’s Employee Incentive Plan:
(a) 6,000,000 Performance Rights subject to the following vesting conditions:
(i) Milestone 1: 3,000,000 Performance Rights will vest on or before 30 June 2022,
upon the achievement of the Sydney Data Centre owned by the Group achieving
either:
A. an annual gross revenue equal to or in excess of $15,000,000; or
B. filled capacity of 5 MW; or
C. sales equal to or in excess of 500 server racks; and
(ii) Milestone 2: 3,000,000 Performance Rights will vest upon DXN Modules
achieving total sales equal to or in excess of $50,000,000 or total sales equal to
or in excess of $25,000,000 are achieved over a rolling 12-month period, both on
or before 30 June 2022,
and 7,500,000 options in accordance with the terms and conditions of the Company’s
Employee Incentive Plan:
(i) to vest on achieving a share price that is at least $0.35 for 10 consecutive trading
days on ASX, calculated on a daily VWAP basis, by no later than 19 August 2022.
<22>
Name:
Title:
Kristy Challingsworth
Chief Financial Officer
Agreement Commenced:
19 July 2021
Term of Agreement:
The employment is for a minimum period of three months and thereafter shall
continue until terminated in accordance with the provisions for termination, being by
either party with 3 months’ notice.
Details:
There are three components to Ms Challingsworth’s remuneration:
(a) Gross Annual Remuneration Package
Ms Challingsworth will be paid a base annual remuneration of $230,000 plus
statutory superannuation contributions, which is capped at $27,500 per annum. The
employer may review the employee’s performance, remuneration and benefits in
accordance with the employer policy from time to time.
(b) Short Term Incentive Benefits
Subject to the Ms Challingsworth’s continued employment by the Group at the
relevant Review Date, the Board may, in its absolute discretion, elect to provide the
Executive with an annual bonus up to an amount equal to 25% of the Base Salary,
plus superannuation, based on the Annual Review (STI Bonus).
Ms Challingsworth (in her sole discretion) can elect to have the STI Bonus (in whole
or in part) paid in Shares. The value of the Shares shall be the 15-day volume
weighted average price (VWAP) of Shares calculated on the day after release of the
Group’s full year financial accounts
(c) Long Term Incentive Benefits
The LTI component has an annual grant value of up to 25% of the executive
remuneration package. The number of performance rights and/or options will
depend on the share price at the allocation or grant date.
Name:
Title:
Greg Blenkiron
Chief Financial Officer
Agreement Commenced:
28 October 2019
Term of Agreement:
The employment is for a minimum period of six months and thereafter shall
continue until terminated in accordance with the provisions for termination, being by
either party with 3 months’ notice.
Details:
Base salary of $200,000 plus superannuation. STI up to 30% to be reviewed and
approved by the Board
Resignation Date:
28 May 2021
DXN Limited | 2021 ANNUAL REPORT <23>
Name:
Title:
Shalini Lagrutta
Head of Sales and Marketing
Agreement Commenced:
1 February 2021 (previously employed as a consultant/contractor)
Term of Agreement:
The employment is continuous until terminated in accordance with the provisions
for termination, being by either party with 3 months’ notice.
Details:
There are three components to Ms Lagrutta’s remuneration:
(a) Gross Annual Remuneration Package
Ms Lagrutta will be paid a base annual remuneration of $249,285 plus statutory
superannuation contributions, which is capped at $27,500 per annum. The employer
may review the employee’s performance, remuneration and benefits in accordance
with the employer policy from time to time.
(b) Commission Plan
The executive will be entitled to receive an On Target Earning (OTE) commission of
$154,285 inclusive of superannuation.
The executive will be paid their OTE commission based on sales performance set out
in the Sale commission plan and Sales commission annual target letter.
(c) Long Term Incentive Benefits
The LTI component has an annual grant value of up to 25% of the executive
remuneration package. The number of performance rights and/or options will
depend on the share price at the allocation or grant date.
Name:
Title:
John Baillie
Non-Executive Chairman
Agreement Commenced:
Effective 1 July 2021
Term of Agreement:
Subject to re - election every 3 years
Details:
Name:
Title:
Base salary of $84,000 plus superannuation per annum (if applicable), to be
reviewed annually by the Board.
Richard Carden
Non-Executive Director
Agreement Commenced:
Effective 1 July 2021
Term of Agreement:
Subject to re - election every 3 years
Details:
Name:
Title:
Base salary of $50,400 plus superannuation per annum (if applicable), to be
reviewed annually by the Board, plus. $1,500 per annum plus superannuation (if
applicable) as Chairman of the Audit & Risk Committee.
John Duffin
Non-Executive Director
Agreement Commenced:
1 October 2018
Term of Agreement:
Subject to re - election every 3 years
Details:
Base salary of $36,000 plus superannuation per annum (if applicable), to be
reviewed annually by the Board.
Resignation Date:
26 August 2020
Name:
Title:
John Dimitropoulos
Non-Executive Director
Agreement Commenced:
Effective 1 July 2021
Term of Agreement:
Subject to re - election every 3 years
Details:
Base salary of $50,400 plus superannuation per annum (if applicable), to be
reviewed annually by the Board, plus $1,500 per annum plus superannuation (if
applicable) as Chairman of the Remuneration & Nomination Committee.
<24>
RETIREMENT BENEFITS
Other retirement benefits may be provided directly by the Group, if approved by shareholders.
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
The movement during the reporting period in the number of options over ordinary shares in the Group held,
directly, indirectly or beneficially, by each key management person, including related parties, is as follows:
2021
Balance at 1
July 2020
Received on
exercise of
right or option
Bought
& (Sold)
Holding on Date
of Resignation or
Appointment
Balance at
30 June 2021
John Dimitropoulos*
-
Richard Carden
John Baillie
3,312,500
2,634,982
Greg Blenkiron**
500,000
John Duffin***
Shalini Lagrutta ****
-
-
-
-
-
-
-
299,500
Matthew Madden
5,000,000
-
11,447,482
299,500
-
-
-
-
-
-
-
-
-
-
-
(500,000)
-
2,300,00
-
-
3,312,500
2,634,982
-
-
2,599,500
5,000,000
1,800,000
13,546,982
* Appointed 1 October 2020
** Resigned 28 May 2021
*** Resigned 26 August 2020
****Appointed 1 February 2021
2020
Balance at
1 July 2019
Received on
exercise of right
or option
Bought & (Sold)
Holding on Date
of Resignation
Balance at
30-Jun-20
Douglas Loh *
1,387,500
1,260,000
Richard Carden
2,650,000
Terry Smart **
12,012,097
John Duffin ***
-
Tim Desmond ****
27,850,000
John Baillie
1,379,175
-
-
-
-
-
George Lazarou
1,140,625
900,000
Greg Blenkiron
Matthew Madden
-
-
-
-
Simon Forth*****
700,000
1,800,000
Richard Whiting****** 700,000
900,000
47,819,397
4,860,000
163,000
662,500
-
-
-
1,255,807
(2,040,625)
500,000
5,000,000
(2,500,000)
(1,600,000)
1,440,682
2,810,500
-
-
12,012,097
-
27,850,000
-
-
-
-
-
-
3,312,500
-
-
-
2,634,982
-
500,000
5,000,000
-
-
42,672,597
11,447,482
* Resigned 17 March 2020
** Resigned 17 March 2020
*** Resigned 26 August 2020
**** Resigned 17 March 2020
***** Resigned 8 May 2020
****** Resigned 20 December 2019
DXN Limited | 2021 ANNUAL REPORT <25>
OPTION HOLDINGS OF KEY MANAGEMENT PERSONNEL
The movement during the reporting period in the number of options over ordinary shares in the Group held,
directly, indirectly or beneficially, by each key management person, including related parties, is as follows:
2021
Balance at
1 July 2020
Received as
Remuneration
Expired
Acquired Holding
at Date of
Resignation or
Appointment
Balance
at 30 June
2021
Total
Vested at
30 June
2021
Total
Exercisable
at 30 June
2021
Richard Carden
715,000
John Duffin*
John
Dimitropoulos**
-
-
John Baillie
1,333,932
Greg Blenkiron***
3,750,000
Shalini Lagrutta****
-
Matthew Madden
21,250,000
27,048,932
-
-
-
-
-
-
-
-
* Resigned 26 August 2020
** Appointed 1 October 2020
*** Resigned 28 May 2021
**** Appointed 1 February 2021
(715,000)
-
-
(1,333,932)
(3,750,000)
-
(3,750,000)
(9,548,932)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
2,000,000
-
17,500,000
-
-
-
-
-
-
-
2,000,000
19,500,000 -
-
-
-
-
-
-
-
-
<26>
PERFORMANCE RIGHT HOLDINGS OF KEY MANAGEMENT PERSONNEL
The movement during the reporting period in the number of performance rights in the Group held, directly, indirectly or beneficially, by
each key management person, including related parties, is as follows:
2021
Balance at 1
July 2020
Holding
at Date of
Appointment
Lapsed /
Expired
Exercised
Balance at
30 June 2021
Total Vested
at 30 June
2021
Total
Unvested at
30 June 2021
Matthew Madden
6,000,000
-
Shalini Lagrutta*
-
599,000
-
-
-
6,000,000
(299,500)
299,500
Greg Blenkiron**
1,200,000
-
(1,200,000)
-
-
7,200,000
599,000
(1,200,000)
(299,500)
6,299,500
-
-
-
-
6,000,000
299,500
-
6,299,500
* Appointed 1 February 2021
** Resigned 28 May 2021
2020
Balance at 1
July 2019
Matthew Madden
Greg Blenkiron
-
-
Issued
During the
Year
6,000,000
1,200,000
Simon Forth *
1,800,000
-
Doug Loh
1,800,000
Richard Whiting **
1,800,000
George Lazarou
900,000
-
-
Lapsed /
Expired
Exercised
Balance at
30 June 2020
Total Vested
at 30 June
2020
Total
Unvested at
30 June 2020
-
-
-
(540,000)
(900,000)
-
-
-
6,000,000
1,200,000
-
-
6,000,000
1,200,000
(1,800,000)
(1,260,000)
(900,000)
(900,000)
-
-
-
-
1,800,000
1,260,000
1,800,000
900,000
-
-
-
-
4,500,000
9,000,000
(1,440,000)
(4,860,000)
7,200,000
5,760,000
7,200,000
* Resigned 8 May 2020
** Resigned 20 December 2019
OTHER TRANSACTIONS WITH RELATED PARTIES AND KEY MANAGEMENT PERSONNEL
Please refer to Note 24 for details of other transactions with key management personnel or their related entities.
Signed in accordance with a resolution of the Board of Directors.
John Baillie
Non-Executive Chairman
Dated this 30th day of September 2021
DXN Limited | 2021 ANNUAL REPORT <27>
Auditor’s Independence Declaration
Moore Australia Audit (WA)
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace, WA 6831
T +61 8 9225 5355
F +61 8 9225 6181
www.moore-australia.com.au
F +61 (0)8 9225 6181
www.moorestephens.com.au
AUDITOR’S INDEPENDENCE DECLARATION
UNDER S307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF DXN LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2021 there have
been no contraventions of:
i.
the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
ii. any applicable code of professional conduct in relation to the audit.
SUAN-LEE TAN
PARTNER
MOORE AUSTRALIA AUDIT (WA)
CHARTERED ACCOUNTANTS
Signed at Perth this 30th day of September 2021
Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation
<28>
DXN Limited | 2021 ANNUAL REPORT
Statement of Profit or Loss and Other Comprehensive Income
STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the year ended 30 June 2021
Continuing operations
Sales to customers
Cost of Sales
Gross Profit
Revenue
R&D tax incentive claim
Export marketing development grant
Government Covid support
Other income
Lease Liability reversed
Interest received
Foreign exchange gain
14
14
13
13
3
Expenses
Acquisition expenses
Administration expenses
Amortisation – intangibles
Compliance and legal expenses
Consultants and contractors
Depreciation
Employee expenses 3
Finance expenses
Foreign exchange loss
Impairment on right of use assets
Impairment of trade receivables
Impairment of Non-current assets held for sale
Impairment of inventory
Lease amortisation
Lease interest charge
Loss on sale of plant & equipment
Marketing expenses
Occupancy expenses
Telecommunication and technology expenses
Travel Expenses
Note
Consolidated Consolidated
2021
$
2020
$
2
2
8,035,137
(5,787,131)
2,248,006
5,188,280
(3,787,169)
1,401,111
725,766
100,000
291,000
187,048
3,302,433
10,422
-
4,616,669
(54,487)
(370,320)
(493,231)
(365,217)
(160,486)
(3,903,980)
(3,670,467)
(203,495)
(92,142)
-
-
(136,006)
(211,388)
(599,555)
(295,482)
(1,169)
(1,942)
(993,353)
(101,461)
(23,125)
(11,677,306)
918,157
87,774
245,000
9,391
-
64,935
79,190
1,404,447
(28,808)
(422,820)
(77,550)
(205,400)
(559,665)
(1,590,639)
(5,401,590)
(180,435)
-
(3,743,255)
(36,428)
-
(1,197,751)
(217,849)
(1,548)
(241,801)
(966,801)
(208,455)
(315,292)
(15,396,087)
Loss before income tax expense
Income tax expense 4
4
(4,812,631)
-
(12,590,529)
-
Total comprehensive income/ (loss) for the period
(4,812,631)
(12,590,529)
Basic earnings per share (cents per share) 26
26
(0.45)
(2.57)
The accompanying notes form part of these financial statements
<29>
DXN Limited | 2021 ANNUAL REPORT
Statement of Financial Position
STATEMENT OF financial position
As at 30 June 2021
Annual Report 30 June 2021
DXN Limited and its controlled entities
STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Non-Current Assets held for sale
Inventory / Work in Progress
Total Current Assets
Non-Current Assets
Bank guarantees
Plant and equipment
Intangible
Lease right of use assets
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Income in advance
Borrowings
Provisions
Lease liabilities
Total Current Liabilities
Non-Current Liabilities
Borrowings
Lease liabilities
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Option reserve
Share based payments reserve
Accumulated losses
TOTAL EQUITY
Note
Consolidated
Consolidated
7
8
9
10 (a)
10 (b)
2021
2020
$
$
1,663,955
3,592,472
666,152
124,854
544,011
389,726
511,409
-
1,231,781
1,204,672
4,230,753
5,698,279
11
12
13
14
15
16
17
18
14
17
14
20
21
22
23
1,028,917
3,087,841
8,701,703
13,139,787
1,502,016
8,407,598
1,734,707
8,180,752
19,640,234
26,143,087
23,870,987
31,841,366
2,153,523
387,556
1,027,255
181,290
625,417
785,512
734,573
872,920
143,162
1,104,312
4,375,041
3,640,479
605,011
2,486,586
7,882,462
10,790,503
8,487,473
13,277,089
12,862,514
16,917,568
11,008,473
14,923,798
40,345,107
39,604,052
310,302
866,654
310,302
710,403
(30,513,590)
(25,700,959)
11,008,473
14,923,798
The accompanying notes form part of these financial statements.
<30>
29
DXN Limited | 2021 ANNUAL REPORT Statement of Changes in Equity
STATEMENT OF change in equity
Annual Report 30 June 2021
For the year ended 30 June 2021
DXN Limited and its controlled entities
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2021
Issued
Capital
Option
Reserve
$
$
Share
Payments
Reserve
$
Accumulated
Losses
Total
$
$
Balance at 1 July 2019
29,662,628
310,302
11,621
(13,110,430)
16,874,121
Total comprehensive income
for the period
Loss for the period
Transaction with owners in
their capacity as owners:
Issue of shares
Capital raising costs
Capital raising costs-share
based payments
Share based payment
expense
Reclass to equity
-
-
10,903,046
(867,532)
(437,604)
-
343,514
-
-
-
-
-
-
-
-
-
(12,590,529)
(12,590,529)
(12,590,529)
(12,590,529)
-
-
437,604
604,692
(343,514)
-
-
-
-
-
10,903,046
(867,532)
-
604,692
-
Balance at 30 June 2020
39,604,052
310,302
710,403
(25,700,959)
14,923,798
Issued Capital
Option
Reserve
$
$
Share
Payments
Reserve
$
Accumulated
Losses
Total
$
$
Balance at 1 July 2020
39,604,052
310,302
710,403
(25,700,959)
14,923,798
Total comprehensive income
for the period
Loss for the period
Transaction with owners in
their capacity as owners:
Issue of shares
Capital raising costs
Share based payment
expense
Reclass to equity
-
-
732,859
(19,519)
-
27,715
-
-
-
-
-
-
-
-
(4,812,631)
(4,812,631)
(4,812,631)
(4,812,631)
-
-
183,966
(27,715)
-
-
-
-
732,859
(19,519)
183,966
-
Balance at 30 June 2021
40,345,107
310,302
866,654
(30,513,590)
11,008,473
The accompanying notes form part of these financial statements.
30
<31>
DXN Limited | 2021 ANNUAL REPORT Statement of Cash Flows
STATEMENT OF cash flows
For the year ended 30 June 2021
Note
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
R&D tax incentive claim
Government grants
Payment of deposit
Receipt of deposit
Consolidated
Consolidated
2021
2020
$
$
7,264,873
5,350,036
(11,056,801)
(12,526,572)
19,141
(70,520)
725,766
454,000
-
-
108,790
(150,748)
918,157
269,774
-
-
Net cash flows provided by (used in) operating activities 27(a)
(2,663,541)
(6,030,563)
Cash flows from investing activities
Refund / (Payment) of deposits and guarantees
Purchase of plant and equipment
Purchase of intangible assets
2,058,925
(12,821)
(140,112)
(3,281,314)
(39,036)
(157,201)
Acquisition of the assets from Data Centre 3 19
-
(2,700,000)
Net cash flows provided by (used in) investing activities
1,879,777
(6,151,336)
Cash flows from financing activities
Proceeds from convertible notes
Proceeds from the issue of shares and options
Payment of capital raising costs
Finance facility drawdown
Repayment of finance facility
Loans made to employee
Repayment of loans made to employees
-
1,000,000
732,860
(19,520)
9,903,285
(867,772)
1,179,429
1,315,885
(3,037,522)
(944,287)
-
-
-
5,125
Net cash flows provided by (used in) financing activities
(1,144,753)
10,412,236
Net increase / (decrease) in cash held
Cash and cash equivalents at beginning of period
(1,928,517)
(1,769,663)
3,592,472
5,362,135
Cash and cash equivalents at end of the period 7,27(b)
1,663,955
3,592,472
The accompanying notes form part of these financial statements
<32>
DXN Limited | 2021 ANNUAL REPORT
Notes to the Financial Statements
NOTES TO THE FINANCIAL
STATEMENTS
For the period ended 30 June 2021
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
DXN Limited and its controlled entity (referred to as the “Consolidated Group” or “Group”) is domiciled in
Australia and listed on the ASX.
The address of the Group’s registered office is 5 Parkview Drive, Sydney Olympic Park NSW 2127. The full year
financial statements of the Group as at and for the twelve months ended 30 June 2021 comprises DXN Limited
and its controlled entity.
The principal activities of the Group during the period were to manufacture modular data centre solutions for
other operators and to operate modular colocation data centres.
BASIS OF PREPARATION
The accounting policies set out below have been consistently applied to all periods presented.
Statement of Compliance
The financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards (AASBs) (including Australian Interpretations) as issued by the Australian
Accounting Standards Board (AASB) and the Corporations Act 2001 for profit-oriented entities. The financial
report of the Group complies with International Financial Reporting Standards (lFRSs) as issued by the
International Accounting Standards Board.
The financial statements were authorised for issue by the Board of Directors on 30 September 2021.
BASIS OF MEASUREMENT
The financial statements have been prepared on the historical cost basis except for the following material items
in the statement of financial position:
•
•
•
financial instruments at fair value through profit or loss are measured at fair value
available-for-sale financial assets are measured at fair value
liabilities for cash-settled share-based payment arrangements are measured at fair value
FUNCTIONAL AND PRESENTATION CURRENCY
These financial statements are presented in Australian dollars, which is the Group’s functional currency.
USE OF ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with AASBs requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimates are revised and in any future periods affected.
GOING CONCERN
The accounts have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and settlement of liabilities in the normal course of business.
The Group incurred a loss of $4,812,631 for the year ended 30 June 2021 (2020: $12,590,529) and operating
cash outflows of $ 2,663,541 (2020: $6,030,563).
The ability of the Group to continue to pay its debts as and when they fall due is dependent upon the Group
successfully raising additional share capital, refinancing debt facilities and generating sufficient revenue.
<33>
DXN Limited | 2021 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
The Directors believe it is appropriate to prepare these accounts on a going concern basis because:
•
•
•
•
the Directors have an appropriate plan to raise additional funds as and when it is required, and the
Directors believe that the additional capital required can be raised either in the market or via debt
funding partners. Subsequent to the reporting period, the Company has raised ~$1.64 million through
a placement to institutional and sophisticated investors, are currently undertaking a Share Purchase
Plan to existing shareholders to raise up to $1.5 million, with the offer closing on 30 September 2021
and has executed a binding term sheet for a new four year secured $4 million debt facility with Pure
Asset Management to support the acquisition of the Darwin Data Centre and the Company’s future
growth strategies;;
the Directors have an appropriate plan to contain certain operating expenditure such as reducing
employee and administrative costs, if appropriate funding is unavailable;
the Directors have an appropriate plan to contain capital expenditure as the modular nature of the
Group’s data centres allows it to expand and incur additional expense when current capacity is fully
utilised; and
the Directors have an appropriate plan to increase revenues through expanding the number of owned
and managed colocation sites and additional modules sales.
The accounts have been prepared on the basis that the Group can meet its commitments as and when they fall
due and can therefore continue normal business activities, and the realisation of assets and liabilities in the
ordinary course of business.
(a) Critical Accounting Judgements Estimates and Assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and
assumptions of future events. The key estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting
period are:
INCOME TAX EXPENSES
Judgement is required in assessing whether deferred tax assets and liabilities are recognised on the statement
of financial position. Deferred tax assets, including those arising from temporary differences, are recognised
only when it is considered more likely than not that they will be recovered, which is dependent on the
generation of future assessable income of a nature and of an amount sufficient to enable the benefits to
be utilised.
IMPAIRMENT
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that
may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is
determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of
key estimates.
FAIR VALUE MEASUREMENT
The Group measures financial instruments, such as derivatives, at fair value at each balance sheet date. Also,
from time to time, the fair values of non-financial assets and liabilities are required to be determined, eg.,
when the entity acquires a business, or where an entity measures the recoverable amount of an asset or
cash-generating unit (CGU) at fair value less costs of disposal.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
The fair value of an asset or liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use
of unobservable inputs. Changes in estimates and assumptions about these inputs could affect the reported
fair value.
SHARE BASED PAYMENTS
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined using the Black-Scholes
or Monte-Carlo model taking into account the assumptions detailed within note 29. Inputs to pricing models
may require an estimation of reasonable expectations about achievement of future vesting conditions. Vesting
conditions must be satisfied for the counterparty to become entitled to receive cash, other assets or equity
instruments of the entity, under a share-based payment arrangement. Vesting conditions include service
conditions, which require the other party to complete a specified period of service, and performance conditions,
which require specified performance targets to be met (such as a specified increase in the entity’s profit or
revenues over a specified period of time) or completion of performance hurdles.
The Group recognises an amount for the goods or services received during the vesting period based on the
best available estimate of the number of equity instruments expected to vest and shall revise that estimate, if
necessary, if subsequent information indicates that the number of equity instruments expected to vest differs
from previous estimates.
<34>
DXN Limited | 2021 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
ESTIMATION OF USEFUL LIFE OF ASSETS
The entity determines the estimated useful lives and related depreciation and amortisation charges for its
property, plant and equipment and finite-life intangible assets. The useful lives could change significantly as
a result of technical innovations, or some other event. The depreciation and amortisation charge will increase
where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets
that have been abandoned or sold will be written off or written down.
During the year ended 30 June 2021, the board decided to accelerate the depreciation on the SYD01 DC module
assets to reflect a change in the market demand or service output of this asset. This change in depreciation
rate was effectuated prospectively from 1 July 2020. Depreciation of this asset increased by $1,706,966 during
the year ended 30 June 2021 as a result.
(b) New and amended accounting policies adopted by the Group
The Group has considered the implications of new or amended Accounting Standards which have become
applicable for the current financial reporting period and have determined that they do not have any material
impact on the 2021 financial statements.
(c) Principles of consolidation
SUBSIDIARIES
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of DXN Ltd (“the
Company” or “parent entity”) as at 30 June 2021 and the results of all subsidiaries for the year then ended. DXN
Ltd and its subsidiaries together are referred to in these financial statements as the ‘consolidated entity’ or ‘the
Group’.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity
controls an entity when the consolidated entity 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. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated
entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated
entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary
to ensure consistency with the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference
between the consideration transferred and the book value of the share of the non-controlling interest acquired
is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit
or loss and other comprehensive income, statement of financial position and statement of changes in equity of
the consolidated entity. Losses incurred by the consolidated entity are attributed to the non-controlling interest
in full, even if that results in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair
value of any investment retained together with any gain or loss in profit or loss.
ASSOCIATES
Associates are entities over which the consolidated entity has significant influence but not control or joint
control. Investments in associates are accounted for using the equity method. Under the equity method, the
share of the profits or losses of the associate is recognised in profit or loss and the share of the movements in
equity is recognised in other comprehensive income. Investments in associates are carried in the statement
of financial position at cost plus post-acquisition changes in the consolidated entity’s share of net assets of the
associate. Goodwill relating to the associate is included in the carrying amount of the investment and is neither
amortised nor individually tested for impairment. Dividends received or receivable from associates reduce the
carrying amount of the investment.
<35>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
(d) Intangible assets
INTERNALLY GENERATED SOFTWARE
Internally developed software is capitalised at cost less accumulated amortisation. Amortisation is calculated
using the straight-line basis over the asset’s useful economic life which is generally three years. Their useful
lives and potential impairment are reviewed at the end of each financial year.
LICENCES/TRADEMARKS/COPYRIGHTS
Certain licences, trademarks and copyrights that the Group possesses will be amortised over their useful life
and are carried at cost less impairment losses and are subject to impairment review at least annually and
whenever there is an indication that it may be impaired. Other licences that the Group acquires are carried
at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on
a straight-line basis over the estimated useful life. The estimated useful life and amortisation method are
reviewed at the end of each annual reporting period.
SOFTWARE UNDER DEVELOPMENT
Costs incurred in developing products or systems and costs incurred in acquiring software and licences
that will contribute to future period financial benefits through revenue generation and/or cost reduction are
capitalised to software and systems. Costs capitalised include external direct costs of materials and services
and employee costs.
Assets in the course of construction include only those costs directly attributable to the development phase
and are only recognised following completion of technical feasibility and where the Group has an intention and
ability to use the asset.
Software under development shall only commence being amortised when the software is completed and ready
for use.
Other licences that the Group acquires are carried at cost less accumulated amortisation and accumulated
impairment losses. Amortisation is recognised on a straight-line basis over the estimated useful life. The
estimated useful life and amortisation method are reviewed at the end of each annual reporting period.
CUSTOMER CONTRACTS
This relates to the minimum estimated EBITDA arising from the acquisition of the data centre in Hobart,
Tasmania which have been guaranteed for three years by the vendor. This asset is recorded at original cost and
is amortised on a straight-line basis over its useful economic life which is three years from its acquisition date.
GOODWILL
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the
sum of the consideration transfer over the acquisition date fair value of any identifiable assets acquired and
liabilities assumed. Goodwill is tested for impairment annually and is allocated to the Group’s cash-generating
units or groups of cash-generating units, which represent the lowest level at which goodwill is monitored.
(e) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-
term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
(f) Plant and equipment
Plant and equipment are stated at cost less accumulated depreciation and impairment losses. In the event the
carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount
is written down immediately to the estimated recoverable amount and impairment losses are recognised either
in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. The cost of
fixed assets constructed within the Group includes the cost of materials, direct labour, borrowing costs and an
appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably.
All other repairs and maintenance are recognised as expenses in profit or loss in the financial period in which
they are incurred.
<36>
DXN Limited | 2021 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
DEPRECIATION
The depreciable amount of all fixed assets relating to newly constructed greenfield data centres (such as DXN-
SYD01) is depreciated using the reducing balance method to allocate their cost, net of any residual values, over
their estimated useful lives.
The depreciable amount of fixed assets of existing data centres (such as the DXN-TAS01) and other fixed assets
are depreciated on a straight line basis over their useful lives to the Group commencing from the time the asset
is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset Depreciation
Rate
Plant & Equipment
DC Modules
ICT Hardware
Office Equipment
Motor Vehicles
Leasehold improvements
13% – 73%
10% – 73%
40% – 67%
20% – 67%
25%
10% – 67%
Depreciation on assets under construction shall only commence when the assets construction is completed and
ready for use.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in the profit or loss in the statement of comprehensive income.
(g) Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an
orderly (ie unforced) transaction between independent, knowledgeable and willing market participants at the
measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is
used to determine fair value. Adjustments to market values may be made having regard to the characteristics
of the specific asset or liability. The fair values of assets and liabilities that are not traded in an active market
are determined using one or more valuation techniques. These valuation techniques maximise, to the extent
possible, the use of observable market data.
As fair value is a market-based measure, the closest equivalent observable market pricing information is
used to determine fair value. Adjustments to market values may be made having regard to the characteristics
of the specific asset or liability. The fair values of assets and liabilities that are not traded in an active market
are determined using one or more valuation techniques. These valuation techniques maximise, to the extent
possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability
(ie the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such
a market, the most advantageous market available to the entity at the end of the reporting period (ie the market
that maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability,
after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to
use the asset in its highest and best use or to sell it to another market participant that would use the asset in its
highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based
payment arrangements) may be valued, where there is no observable market price in relation to the transfer of
such financial instruments, by reference to observable market information where such instruments are held as
assets. Where this information is not available, other valuation techniques are adopted and, where significant,
are detailed in the respective note to the financial statements.
<37>
DXN Limited | 2021 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
(h) Impairment of assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be
impaired. The assessment will include the consideration of external and internal sources of information. If such
an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of
the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying
amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in
profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (e.g. in
accordance with the revaluation model in AASB 116: Property, Plant and Equipment). Any impairment loss of a
revalued asset is treated as a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible
assets not yet available for use.
(i) Trade and other receivables
Trade and other receivables include amounts due from customers for goods sold and services performed
over an ordinary course of business. Receivables expected to be collected within 12 months of the end of the
reporting period are classified as current assets. All other receivables are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured using a forward
looking “expected credit loss” (ECL) model. Refer to notes 1(m) for further discussion on the application of the
expected credit loss model under AASB 9 Financial Instruments.
(j) Trade and other payables
Trade payables and other accounts payable are recognised when the Group becomes obliged to make future
payments resulting from the purchase of goods and services.
(k) Revenue Recognition
The Group’s revenue recognition policy complies with AASB 15: Revenue from Contracts with Customers. AASB
15 establishes principles for reporting the nature, amount, timing, and uncertainty of revenue and cash flows
arising from the Group’s contracts with the customer, identify performance obligations in the contract, and
recognise revenue when performance obligations are satisfied.
Revenue generated by the Group is categorised into the following major business activities:
Data Centre Services
Revenue is recognised only when the service has been provided, the amount of revenue can be measured
reliably, and it is probable that the economic benefits associated with the transaction will flow to the Group. Any
upfront discounts provided to customers are amortised over the contract term. This approach is considered
consistent with AASB 15 in that revenue is deferred and recognised over the term of the contract with the
customer. As the performance obligation is fulfilled over time, such revenue is recognised over time.
DXN Module Sales
The Group custom builds turnkey data centre modules for customers. Revenue is recognised based on key
milestones and in proportion to the stage of completion of the work performed at the reporting date. Revenue
from these sales is based on the price stipulated in the contract and any agreed variations to the contract sum.
Revenue is only recognised to the extent that there is a high probability that a significant reversal of revenue
will not occur. As the performance obligation is fulfilled over time, such revenue is recognised over time.
AASB 15 also provides guidance relating to the treatment of contract costs, such as incremental costs of
obtaining a contract. From 1 July 2018, eligible costs that are expected to be recovered are capitalised as a
contract asset and amortised over the term of the contract with the customer.
Interest Income
Interest income is recognised over time using the effective interest method. When a receivable is impaired, the
Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted
at the original effective interest rate of the instrument and continues unwinding the discount as interest income.
Interest income on impaired loans is recognised using the original effective interest rate.
Refundable Research & Development Tax Offset
The Group recognises refundable R & D tax offset as a government grant under AASB 120 Government Grants.
Such refunds are recognised on an accrual basis only when the amount can be measured reliably, and it is
probable that the economic benefits associated with the offset will flow to the Group. Accordingly, revenues
from the receipt of refundable R & D tax offset is recognised only at a point in time.
<38>
DXN Limited | 2021 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
(l) Income Tax
The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax
expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income for the current
period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the
relevant taxation authority using tax rates (and tax laws) that have been enacted or substantively enacted by the
end of the reporting period.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax
relates to items that are recognised outside profit or loss or arising from a business combination.
A deferred tax liability shall be recognised for all taxable temporary differences, except to the extent that the
deferred tax liability arises from:
(a) The initial recognition of goodwill; or
(b) The initial recognition of an asset or liability in a transaction which:
(i) is not a business combination; and
(ii) at the time of the transaction, affects neither accounting profit nor taxable profit
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled and their measurement also reflects the manner in which
management expects to recover or settle the carrying amount of the related asset or liability. With respect
to non-depreciable items of property, plant and equipment measured at fair value and items of investment
property measured at fair value, the related deferred tax liability or deferred tax asset is measured on the basis
that the carrying amount of the asset will be recovered entirely through sale. When an investment property that
is depreciable is held by the company in a business model whose objective is to consume substantially all of
the economic benefits embodied in the property through use over time (rather than through sale), the related
deferred tax liability or deferred tax asset is measured on the basis that the carrying amount of such property
will be recovered entirely through use.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset
can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates and
joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable
future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where: (i) a legally enforceable right of set-off exists; and (ii) the
deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the
same taxable entity or different taxable entities, where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability will occur in future periods in which significant
amounts of deferred tax assets or liabilities are expected to be recovered or settled.
(m) Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions to the instrument. For financial assets, this is the date that the Group commits itself to either the
purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments (except for trade receivables) are initially measured at fair value plus transaction costs,
except where the instrument is classified “at fair value through profit or loss”, in which case transaction costs
are expensed to profit or loss immediately. Where available, quoted prices in an active market are used to
determine fair value. In other circumstances, valuation techniques are adopted.
Trade receivables are initially measured at the transaction price if the trade receivables do not contain a
significant financing component or if the practical expedient was applied as specified in AASB 15.63.
<39>
DXN Limited | 2021 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
Classification and subsequent measurement
Financial liabilities
Financial instruments are subsequently measured at:
•
•
amortised cost; or
fair value through profit or loss.
A financial liability is measured at fair value through profit and loss if the financial liability is:
- a contingent consideration of an acquirer in a business combination to which AASB 3: Business
Combinations applies;
- held for trading; or
- initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of
allocating interest expense in profit or loss over the relevant period. The effective interest rate is the internal
rate of return of the financial asset or liability. That is, it is the rate that exactly discounts the estimated future
cash flows through the expected life of the instrument to the net carrying amount at initial recognition.
A financial liability is held for trading if:
- it is incurred for the purpose of repurchasing or repaying in the near term;
- part of a portfolio where there is an actual pattern of short-term profit taking; or
- a derivative financial instrument (except for a derivative that is in a financial guarantee contract or a
derivative that is in a effective hedging relationships).
Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are
not part of adesignated hedging relationship The change in fair value of the financial liability attributable
to changes in the issuer’s credit risk is taken to other comprehensive income and are not subsequently
reclassified to profit or loss. Instead, they are transferred to retained earnings upon derecognition of the
financial liability. If taking the change in credit risk in other comprehensive income enlarges or creates
an accounting mismatch, then these gains or losses should be taken to profit or loss rather than other
comprehensive income.
A financial liability cannot be reclassified.
Financial assets
Financial assets are subsequently measured at:
- amortised cost;
- fair value through other comprehensive income; or
- fair value through profit or loss.
Measurement is on the basis of two primary criteria:
- the contractual cash flow characteristics of the financial asset; and
- the business model for managing the financial assets.
A financial asset that meets the following conditions is subsequently measured at amortised cost:
- the financial asset is managed solely to collect contractual cash flows; and
- the contractual terms within the financial asset give rise to cash flows that are solely payments of
principal and interest on the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured at fair value through other
comprehensive income:
- the contractual terms within the financial asset give rise to cash flows that are solely payments of
principal and interest on the principal amount outstanding on specified dates;
- the business model for managing the financial assets comprises both contractual cash flows collection
and the selling of the financial asset.
<40>
DXN Limited | 2021 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair
value through other comprehensive income are subsequently measured at fair value through profit or loss.
The Group initially designates a financial instrument as measured at fair value through profit or loss if:
- it eliminates or significantly reduces a measurement or recognition inconsistency (often referred to as
“accounting mismatch”) that would otherwise arise from measuring assets or liabilities or recognising
the gains and losses on them on different bases;
- it is in accordance with the documented risk management or investment strategy, and information about
the groupings was documented appropriately, so that the performance of the financial liability that was
part of a Group of financial liabilities or financial assets can be managed and evaluated consistently on a
fair value basis;
- it is a hybrid contract that contains an embedded derivative that significantly modifies the cash flows
otherwise required by the contract.
The initial designation of the financial instruments to measure at fair value through profit or loss is a one-time
option on initial classification and is irrevocable until the financial asset is derecognised.
Equity instruments
At initial recognition, as long as the equity instrument is not held for trading and not a contingent consideration
recognised by an acquirer in a business combination to which AASB 3:Business Combinations applies, the
Group has the option to make an irrevocable election to measure any subsequent changes in fair value of the
equity instruments in other comprehensive income, while the dividend revenue received on underlying equity
instruments investment will still be recognised in profit or loss. The Group currently has no equity instrument
financial assets.
Regular way purchases and sales of financial assets are recognised and derecognised at settlement date in
accordance with the Group’s accounting policy.
Derecognition
Derecognition refers to the removal of a previously recognised financial asset or financial liability from the
statement of financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (ie when the obligation in the contract is discharged, cancelled
or expires). An exchange of an existing financial liability for a new one with substantially modified terms, or
a substantial modification to the terms of a financial liability is treated as an extinguishment of the existing
liability and recognition of a new financial liability.
The difference between the carrying amount of the financial liability derecognised and the consideration paid
and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder’s contractual rights to its cash flows expires, or the asset is
transferred in such a way that all the risks and rewards of ownership are substantially transferred.
All of the following criteria need to be satisfied for derecognition of financial asset:
- the right to receive cash flows from the asset has expired or been transferred.
- all risk and rewards of ownership of the asset have been substantially transferred; and
- the Group no longer controls the asset (ie the Group has no practical ability to make a unilateral decision
to sell the asset to a third party).
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss.
On derecognition of a debt instrument classified as at fair value through other comprehensive income, the
cumulative gain or loss previously accumulated in the investment revaluation reserve is reclassified to profit
or loss.
On derecognition of an investment in equity which was elected to be classified under fair value through other
comprehensive income, the cumulative gain or loss previously accumulated in the investment revaluation
reserve is not reclassified to profit or loss but is transferred to retained earnings.
<41>
DXN Limited | 2021 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
IMPAIRMENT
The Group recognises a loss allowance for expected credit losses on:
- financial assets that are measured at amortised cost or fair value through other comprehensive income;
- contract assets (eg amounts due from customers under construction contracts);
- loan commitments that are not measured at fair value through profit or loss; and
- financial guarantee contracts that are not measured at fair value through profit or loss.
Loss allowance is not recognised for:
- financial assets measured at fair value through profit or loss; or
- equity instruments measured at fair value through other comprehensive income.
Expected credit losses are the probability-weighted estimate of credit losses over the expected life of a
financial instrument. A credit loss is the difference between all contractual cash flows that are due and all cash
flows expected to be received, all discounted at the original effective interest rate of the financial instrument.
The Group uses the following approach to impairment, as applicable under AASB 9: Financial Instruments:
- the simplified approach
Simplified approach
The simplified approach does not require tracking of changes in credit risk at every reporting period, but
instead requires the recognition of lifetime expected credit loss at all times. This approach is applicable to:
- trade receivables or contract assets that result from transactions within the scope of AASB 15: Revenue
from Contracts with Customers and which do not contain a significant financing component
In measuring the expected credit loss, a provision matrix for trade receivables is used taking into consideration
various data to get to an expected credit loss (ie diversity of customer base, appropriate groupings of historical
loss experience, etc).
Recognition of expected credit losses in financial statements
At each reporting date, the Group recognises the movement in the loss allowance as an impairment gain or loss
in the statement of profit or loss and other comprehensive income.
The carrying amount of financial assets measured at amortised cost includes the loss allowance relating to
that asset.
(n) Contributed equity
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.
(o) Employee benefits
Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee benefits
are benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the
end of the annual reporting period in which the employees render the related service, including wages, salaries
and sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid
when the obligation is settled.
The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are
recognised as a part of current trade and other payables in the statement of financial position. The Group’s
obligations for employees’ annual leave and long service leave entitlements are recognised as provisions in the
statement of financial position.
<42>
DXN Limited | 2021 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
Equity-settled compensation
The Group operates an employee option and performance rights plan. Share-based payments to employees are
measured at the fair value of the instruments at grant date and amortised over the vesting periods. Share-
based payments to non-employees are measured at the fair value of goods or services received or the fair
value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be
reliably measured, and are recorded at the date the goods or services are received.
The corresponding amounts are recognised in the share payment reserve and statement of profit and loss
respectively. The fair value of options and performance rights are determined using the Black-Scholes or
Binomial pricing model. The number of performance rights and options expected to vest is reviewed and
adjusted at the end of each reporting period such that the amount recognised for services received as
consideration for the equity instruments granted is based on the number of equity instruments that
eventually vest.
(p) Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and conditions are accounted for as follows:
• Raw materials: purchase cost on a first-in/first-out basis; and
• Finished goods and work in progress: cost of direct materials and labour and a portion of manufacturing
overheads based on the normal operating capacity but excluding borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
(q) Non-current assets held for sale
These are assets that will be recovered principally through a sale transaction generally within one year from
the date of classification. Non-current assets held for sale are valued at the lower of its carrying value and the
fair value less costs to sell.
(r) New accounting standards for application in future periods
The AASB has issued a number of new and amended Accounting Standards that have mandatory application
dates for future reporting periods, some of which are relevant to the Group. The directors have decided not to
early-adopt any of the new and amended pronouncements. The Group has not yet assessed the impact of these
new or amended Accounting Standards and Interpretations.
<43>
DXN Limited | 2021 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
2. REVENUE FROM CONTINUING ACTIVITIES
Consolidated
2021
$
Consolidated
2020
$
Sales to customers 1
8,035,137
5,188,280
1 100% of the group’s revenue from external customers is recognised over time.
3. EXPENSES
Loss has been determined after the following specific
expenses/revenue:
- Amortisation of intangibles
- Auditing or reviewing the financial report
- Depreciation
- Impairment of ROU Assets
- Lease Liability write off
- Lease amortisation
- Lease interest charge
- Short term lease expense - rental
Employee benefits expense:
- Annual leave
- Allowances
- Commissions / Bonuses
- Director’s fees
- Fringe benefits tax
- Long service leave
- Payroll tax
- Recruitment
- Share based payments
- Staff onboarding, training & welfare
- Superannuation
- Wages
493,231
50,000
3,903,980
-
(3,302,433)
599,555
295,482
87,461
38,127
35,924
222,737
216,292
1,883
-
181,497
4,295
183,967
14,761
285,133
2,485,851
77,550
50,000
1,590,639
3,743,255
-
1,197,751
217,849
-
58,664
28,750
181,353
196,885
16,766
-
145,308
50,482
604,692
18,715
354,230
3,745,745
3,670,467
5,401,590
<44>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
4. INCOME TAX
(a) The components of tax expense comprise:
Current tax
Deferred tax
Income tax expense
Consolidated Consolidated
2021
$
2020
$
-
-
-
-
-
-
(b)The prima facie income tax expense on pre-tax accounting profit from
operations reconciles to the income tax expense in the financial
statements as follows:
Profit/(loss) from operations
(4,812,631)
(12,590,529)
Income tax expense (revenue) calculated at 25% (2020: 27.5%)
Tax effect of revenue losses not recognised
Tax effect of non-deductible expenditure
Tax effect of other non-assessable income
Tax effect of other deferred tax balances not recognised
(1,203,158)
1,840,686
522,291
(193,942)
(965,877)
-
(3,462,395)
2,673,431
178,094
(252,493)
863,363
-
Income tax rate
The rate used in the above reconciliation is the corporate rate of 25%
payable by the Australian base rate corporate entities for 2022 and
future financial years.
(c) Deferred tax recognised at 25% (2020: 27.5%) (Note 1):
Deferred tax liabilities
Accrued income
Prepayment
Leased right of use asset
Deferred tax assets
Carried forward revenue losses
Net tax deferred
(d) Unrecognised deferred tax assets at 25% (2020: 27.5%) (Note 1):
Carried forward revenue losses
Capital raising costs
Provisions and accruals
Lease liability
Customer contracts
(34)
-
(2,101,899)
(19,759)
-
(2,249,706)
2,101,933
-
2,269,465
-
3,869,533
387,617
65,497
2,126,970
135,242
6,584,859
2,691,244
578,182
92,707
3,271,074
22,474
6,655,681
(e) The tax benefits of the above Deferred Tax Assets will only be obtained if:
(i) the Group derives future assessable income of a nature and of an amount sufficient to enable the benefits
to be utilised;
(ii) the Group continues to comply with the conditions for deductibility imposed by law; and
(iii) no changes in income tax legislation adversely affect the Group in utilising the benefits.
<45>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
5. AUDITOR’S REMUNERATION
Consolidated Consolidated
2021
$
2020
$
Remuneration of the auditor Moore Australia Audit (WA)
- Auditing and reviewing the financial statements of the Group
50,000
50,000
6. DIVIDENDS PAID OR PROVIDED FOR ON ORDINARY SHARES
No dividends were paid during the period. No recommendation for payment of dividends has
been made.
7. CASH AND CASH EQUIVALENTS
Current
Cash at bank and on hand
8. TRADE AND OTHER RECEIVABLES
Current
Trade receivables 1
Less: Provision for loss allowance/impairment
GST receivable
Interest receivable
1 Aging of gross carrying amounts due
0-30 days
30-60 days
60-90 days
90+ days
Loss allowance provision
Total
Consolidated Consolidated
2021
$
2020
$
1,663,955
1,663,955
3,592,472
3,592,472
Consolidated Consolidated
2021
$
2020
$
666,018
-
666,018
-
134
666,152
574,598
91,420
-
-
-
666,018
330,878
-
330,878
49,996
8,852
389,726
306,074
23,957
-
847
-
330,878
<46>
DXN Limited | 2021 ANNUAL REPORT
Annual Report 30 June 2020
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
DXN Limited and its controlled entities
8.
TRADE AND OTHER RECEIVABLES (CONTINUED)
The Group applies the simplified approach to providing for expected credit losses prescribed by
AASB 9, which permits the use of the lifetime expected loss provision 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.
Credit risk
The Group has no significant concentration of credit risk with respect to any single counterparty or
group of counterparties other than those receivables specifically provided for and mentioned
within Note 8. The class of assets described as "trade and other receivables" is considered to be
the main source of credit risk related to the Group.
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime
expected credit loss. The expected credit losses on trade receivables are estimated using a
provision matrix by reference to past default experience of the debtor (where applicable) and an
analysis of the debtor's current financial position, adjusted for factors that are specific to the
debtor, general economic conditions of the industry in which the debtor operates and an
assessment of both the current and the forecast direction of conditions at the reporting date.
There has been no change in the estimation techniques used or significant assumptions made
during the current reporting period.
The Group writes off a trade receivable when there is information indicating that the debtor is in
severe financial difficulty and there is no realistic prospect of recovery; for example, when the
debtor has been placed under liquidation or has entered into bankruptcy proceedings, or when the
trade receivables are over two or more years past due, whichever occurs earlier. None of the trade
receivables that have been written off are subject to enforcement activities.
The Group does not currently hold any collateral as security.
<47>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
9. OTHER ASSETS
Current
Prepayments
Deposits
10 (a). NON-CURRENT ASSETS HELD FOR SALE
Non-Current Assets held for sale (net of impairment)
10 (b). INVENTORIES / WORK IN PROGRESS
Materials and consumables
Work in progress - Customers 1 (Contract asset)
1 Relates to external customers
11. BANK GUARANTEES
9 Mumford Place, Balcatta WA 1
5 Parkview Drive, Olympic Park, Sydney NSW 1
286-292 Lorimer Street, Port Melbourne, Victoria 1
3 Dampier Road, Welshpool, WA 1
ANZ Chattel Finance Facility 2
Consolidated Consolidated
2021
$
2020
$
111,298
13,556
124,854
497,853
13,556
511,409
Consolidated
2021
$
Consolidated
2020
$
544,011
544,011
-
-
Consolidated Consolidated
2021
$
2020
$
660,956
570,825
1,231,781
963,376
241,296
1,204,672
Consolidated Consolidated
2021
$
2020
$
-
495,000
500,000
33,917
-
1,028,917
76,000
507,128
504,713
-
2,000,000
3,087,841
1 Relates to term deposits given to secure bank guarantees over leased premises. The bank guarantees are
restricted cash.
2 The term deposit is restricted cash and is provided as security for the ANZ Chattel Finance Facility
per note 17.
<48>
DXN Limited | 2021 ANNUAL REPORT
Annual Report 30 June 2020
DXN Limited and its controlled entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
12. PLANT AND EQUIPMENT
Plant and Equipment
At cost
Accumulated depreciation
DC Modules
At cost
Accumulated depreciation
ICT Hardware
At cost
Accumulated depreciation
Office Equipment
At cost
Accumulated depreciation
Motor Vehicles
At cost
Accumulated depreciation
Leasehold Improvements
At cost
Accumulated depreciation
Assets Under Construction
At cost
Accumulated depreciation
Total cost
Total accumulated depreciation
Total Written Down Value
Consolidated Consolidated
2021
$
2020
$
260,685
(116,195)
144,490
2,896,793
(464,102)
2,432,691
11,227,465
(4,608,445)
6,619,020
9,297,085
(1,114,648)
8,182,437
340,736
(259,378)
81,358
376,629
(139,543)
237,086
61,126
(37,678)
23,448
26,016
(8,780)
17,236
86,104
(37,030)
49,074
26,016
(5,528)
20,488
2,285,853
(469,702)
1,816,151
2,292,567
(91,436)
2,201,131
-
-
-
16,880
-
16,880
14,201,881
(5,500,178)
8,701,703
14,992,074
(1,852,287)
13,139,787
<49>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
12. PLANT AND EQUIPMENT (CONTINUED)
Movements in carrying amounts
Plant and Equipment
Carrying amount at beginning of reporting period
Transferred to DC Modules
Transferred to Non Current assets held for Sale
Additions
Disposals
Depreciation expense
Carrying amount at end of reporting period
DC Modules
Carrying amount at beginning of reporting period
Transferred from assets under construction
Transferred from Plant and Equipment
Additions
Acquisition of DC3
Depreciation expense
Carrying amount at end of reporting period
ICT Hardware
Carrying amount at beginning of reporting period
Additions
Disposals
Depreciation expense
Carrying amount at end of reporting period
Office Equipment
Carrying amount at beginning of reporting period
Additions
Disposals
Depreciation expense
Carrying amount at end of reporting period
Motor Vehicles
Carrying amount at beginning of reporting period
Additions
Disposals
Depreciation expense
Carrying amount at end of reporting period
<50>
Consolidated Consolidated
2021
$
2020
$
2,432,691
(1,576,537)
(680,017)
11,137
-
(42,784)
144,490
2,639,695
-
-
75,626
-
(282,630)
2,432,691
8,182,437
16,880
1,576,537
144,325
-
(3,301,158)
6,619,021
-
7,038,892
-
925,858
1,332,335
(1,114,648)
8,182,437
237,086
-
(1,106)
(154,622)
81,358
49,074
-
(8,081)
(17,546)
23,447
20,488
-
-
(3,252)
17,236
95,693
225,300
(2,627)
(81,280)
237,086
65,800
4,297
-
(21,023)
49,074
23,740
-
-
(3,252)
20,488
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
12. PLANT AND EQUIPMENT (CONTINUED)
Leasehold Improvements
Carrying amount at beginning of reporting period
Additions
Disposals
Depreciation expense
Carrying amount at end of reporting period
Assets Under Construction
Carrying amount at beginning of reporting period
Additions
Transferred to DC Modules
Transferred to inventory
Disposals
Depreciation expense
Carrying amount at end of reporting period
Consolidated
2021
$
Consolidated
2020
$
2,201,131
548,315
-
(362)
(384,618)
1,816,151
1,740,622
-
(87,806)
2,201,131
16,880
-
(16,880)
-
-
-
-
7,769,012
-
(7,038,892)
(713,240)
-
-
16,880
Total
8,701,703
13,139,787
13. INTANGIBLES
Non-Current
Software at cost 1
Accumulated amortisation
Patents and Trademarks at cost 2
Accumulated amortisation
Software Development at cost 3
Accumulated amortisation
Customer Contracts 4
Accumulated amortisation
Goodwill 5
Accumulated amortisation
Consolidated
2021
$
Consolidated
2020
$
203,855
(93,282)
110,573
36,480
(6,430)
30,050
494,031
-
494,031
164,819
(49,368)
115,451
36,480
(4,480)
32,000
272,526
-
272,526
1,342,104
(500,283)
841,821
1,342,104
(52,915)
1,289,189
25,541
-
25,541
25,541
-
25,541
<51>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
13. INTANGIBLES (CONTINUED)
Total cost
Total accumulated amortisation
Total Written Down Value
2,102,011
(599,995)
1,502,016
1,841,470
(106,763)
1,734,707
1 Relates to acquired software and is amortised over a period of 3 years.
2 Relates to patents and is amortised over the estimated useful life of the patents.
3 Relates to the development costs spent to date on IoT software.
4 Relates to the minimum contracted revenues / EBITDA in relation to the acquisition of DC Module
assets of Data Centre 3 Pty Ltd from TasmaNet Pty Ltd and is amortised over a period of 3 years.
5 Goodwill on the acquisition of assets and revenue of Data Centre 3 Pty Ltd from TasmaNet Pty Ltd.
14. RIGHT-OF-USE ASSETS / LEASE LIABILITIES
The Group's lease portfolio includes land and buildings only. These leases have
varying lease terms ranging from 3 to 15 years and typically contain the option to
renew the lease after that date.
The Group’s weighted average incremental borrowing rate on 1 July 2020 applied to
the lease liabilities was 8.5%.
Information about leases for which the Group is a lessee is presented below.
i. Right-of-use-assets
Land & Buildings
Balance at 1 July 2020
Depreciation expense
Tas01 Right of Use
Balance at 30 June 2021
2021
$
8,180,752
(599,555)
826,401
8,407,598
ii. Lease liabilities
The measurement principles of AASB 16 are only applied from 1 July 2019. At the date
of initial application, the right-of-use assets equals to the lease liabilities and there
was no adjustment to the retained earnings. The lease liabilities are presented below:
<52>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
14. RIGHT-OF-USE ASSETS / LEASE LIABILITIES (CONTINUED)
Balance at 1 July 2020
Payment
Melbourne Lease Liability reversal
Tas01 Lease Liability
Interest charges during period
Balance at 30 June 2021**
Lease Liability recognised as at 30 June 2021
Of which are:
Current Lease Liabilities
Non-current Lease Liabilities
** - closing balance includes make good obligations
iii. Amounts recognised in profit or loss
30 June 2021 – Leases under AASB 16
Interest on lease liabilities
Depreciation charge
Lease Liability reversed 1
11,894,815
(1,206,386)
(3,302,433)
826,401
295,482
8,507,879
625,417
7,882,462
8,507,879
295,482
599,555
3,302,433
1 Liability reversal of the carrying value of the liability for the Melbourne data centre facility.
15. TRADE & OTHER PAYABLES
Trade Creditors 1
Other creditors & accruals 2
GST Payable
Payroll liabilities
Consolidated
2021
$
Consolidated
2020
$
1,354,906
271,601
102,614
424,402
2,153,523
467,556
151,050
-
166,906
785,512
Terms and conditions relating to the above financial instruments.
1 Trade creditors are non-interest bearing and generally on 30 day terms.
2 Other creditors are non-interest bearing have no fixed repayment terms.
For further details refer to note 25 Financial Instruments.
<53>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
16. INCOME IN ADVANCE
Income in advance
Consolidated
2021
$
387,556
387,556
Consolidated
2020
$
734,573
734,573
The above balance relates to amounts received in advance from external customers for the custom-built
DXN data centre and cable landing station modules.
17. BORROWINGS
Current
Chattel mortgage 1
Export Finance Loan 2
Insurance premium funding
Less: unexpired charges
Non-Current
Chattel mortgage 1
Less: unexpired charges
Consolidated Consolidated
2021
$
2020
$
366,145
639,364
54,765
(33,019)
1,027,255
949,296
-
55,026
(131,402)
872,920
628,384
(23,373)
605,011
2,615,697
(129,111)
2,486,586
1 $971,000 secured principal and interest chattel finance facility with ANZ bank to finance generators and chillers.
The interest rate on the loan is 4.47% p.a
2 $500,000 loan facility was drawndown with Export Finance in October 2020 with $136,363 outstanding at
30 June 2021.The interest rate was 6.53%. A second loan facility of $503,000 was drawndown with Export
Finance in June 2021. Repayments will start in October 2021 with repayment of the loan in full due in December
2021.The interest rate on this loan 6.53%.
18. PROVISIONS
Current
Annual Leave
Consolidated
2021
$
Consolidated
2020
$
181,290
181,290
143,162
143,162
The Group currently has 29 employees including Directors.
<54>
DXN Limited | 2021 ANNUAL REPORT
Annual Report 30 June 2020
DXN Limited and its controlled entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
19. INTERESTS IN SUBSIDIARIES
a) Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares
which are held directly by the Group. The proportion of ownership interests held equals
the voting rights held by the Group. Each subsidiary’s principal place of business is also
its country of incorporation.
Name of Subsidiary
Principal
Place of
Business
Ownership Interest
Held by the Group
Proportion of Non-
controlling Interests
Tas01 Pty Ltd
Tasmania
100
2021
%
2020
%
100
2021
%
2020
%
-
-
b) Acquisition (Prior year 2020)
On 18 May 2020, the Parent Entity acquired the assets and revenue of Data Centre 3 Pty
Ltd from TasmaNet Pty Ltd via a newly incorporated wholly-owned subsidiary, Tas01 Pty
Ltd.
Purchase consideration:
Cash
Less:
Customer Contracts 1
Property, plant and equipment
Identifiable assets acquired and liabilities assumed
Goodwill
Fair Value
$
2,700,000
1,342,104
1,332,355
2,674,459
25,541
1 The directors believe the customer contracts are fully recoverable and no provision for
impairment is required
No amount of the goodwill is deductible for tax purposes.
Revenue of Tas01 Pty Ltd included in the consolidated revenue of the Group in FY 2020
since the acquisition date on 18 May 2020 amounted to $101,876. Loss of Tas01 Pty Ltd
included in consolidated loss of the Group in FY 2020 since the acquisition date amounted
to ($25,944).
<55>
DXN Limited | 2021 ANNUAL REPORT
Annual Report 30 June 2020
DXN Limited and its controlled entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
20. ISSUED CAPITAL
1,105,318,536 (2020:1,050,552,642) fully paid ordinary
shares
Consolidated Consolidated
2021
$
2020
$
40,345,107
39,604,052
(a) Movements in fully paid ordinary shares on issue
2021
At the beginning of the reporting period
Shares issued during the period:
Issue of Shares on exercise of options at
$0.02
Issue of Shares on exercise of performance
rights
Shares subscribed for in placement at $0.012
Issue of shares on exercise of performance
rights
Less: Capital raising costs
$
Number
39,604,052 1,050,552,642
204,859
10,242,970
5,889
111,111
528,000
21,826
44,000,000
411,813
(19,519)
-
Balance at 30 June 2021
40,345,107 1,105,318,536
At the beginning of the reporting period
Shares issued during the period:
Shares subscribed for in placement at $0.055
Shares subscribed for in placement at $0.01
Issue of shares on exercise of performance
rights
Less: Capital raising costs
2020
$
29,662,628
Number
361,271,724
4,981,247
5,921,799
90,568,130
592,179,856
343,514
6,532,932
(1,305,136)
-
Balance at 30 June 2020
39,604,052 1,050,552,642
(b) Terms of Ordinary Shares
Ordinary shares participate in dividends and the proceeds on winding up of the Group in proportion to the number of shares held and in
proportion to the amount paid up on the shares held.
At shareholder’s meetings each ordinary share is entitled to one vote in proportion to the paid up amount of the share when a poll is
called, otherwise each shareholder has one vote on a show of hands. These fully paid ordinary shares have no par value.
(c) Capital risk management
Management controls the capital of the Group in order to maintain a prudent debt to equity ratio, provide the shareholders with adequate
Management controls the capital of the Group in order to maintain in order to maintain a prudent debt to equity ratio, provide the shareholders
with adequate returns and ensure the Group can fund its operations and continue as a going concern.
returns and ensure the Group can fund its operations and continue as a going concern.
The Group’s debt and capital includes ordinary share capital and financial liabilities supported by financial assets.
The Group’s debt and capital includes ordinary share capital and financial liabilities supported by financial assets.
There are no externally imposed capital requirements. Management effectively manages the Group’s capital by assessing the Groups financial
There are no externally imposed capital requirements. Management effectively manages the Group’s capital by assessing the Groups
risks and adjusting it’s capital structure in response to changes in these risks
financial risks and adjusting it’s capital structure in response to changes in these risks and in the market. These responses include the
management of debt levels, distributions to shareholders and share issues.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
<56>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
20. ISSUED CAPITAL CONTINUED
For the year ended 30 June 2021
Annual Report 30 June 2020
and in the market. These responses include ethe management of debt levels, distributions
to shareholders and share issues.
20. ISSUED CAPITAL CONTINUED
DXN Limited and its controlled entities
and in the market. These responses include ethe management of debt levels, distributions to
shareholders and share issues.
Total Borrowings
Less Cash and Cash Equivalents
Total Borrowings
Net Debt/(Cash)
Less Cash and Cash Equivalents
Total Equity
Net Debt/(Cash)
Total Capital
Total Equity
Net Debt/Equity Ratio
Total Capital
Net Debt/Equity Ratio
21. OPTION RESERVE
21. OPTION RESERVE
683,936,886 (2020:824,076,111 options)
683,936,866 (2020:824,076,111 options)
(a) Movements in listed options on issue:
(a) Movements in listed options on issue:
Options
At the beginning of the reporting period
Options
At the beginning of the reporting period
Options issued during the period:
Options subscribed for as part of placement
Options issued during the period:
Options exercised
Options subscribed for as part of placement
Options cancelled
Options exercised
Options expired during the period
Options cancelled
Balance at 30 June 2021
Options expired during the period
Balance at 30 June 2021
30 June
2021
$
30 June
2021
1,632,266
$
1,663,955
1,632,266
(31,689)
1,663,955
11,008,473
(31,689)
10,976,784
11,008,473
-0.29%
14,304,694
0.29%
30 June
2020
$
30 June
2020
3,359,506
$
3,592,472
3,359,506
(232,966)
3,592,472
14,923,798
(232,966)
14,690,832
14,923,798
-2%
21,875,776
1.56%
Consolidated
2021
Consolidated
$
2021
310,302
$
310,302
Consolidated
2020
Consolidated
$
2020
310,302
$
310,302
2021
$
$
2021
Number
Number
310,302
824,076,111
310,302
824,076,111
-
-
-
-
-
-
-
310,302
-
310,302
22,000,000
(10,242,970)
22,000,000
(2,500,000)
(10,242,970)
(149,396,255)
(2,500,000)
683,936,886
(149,396,255)
683,936,886
2020
Options
At the beginning of the reporting period
Options
At the beginning of the reporting period
Options issued during the period:
Options subscribed for as part of placement
Options issued during the period:
Options issued to senior management (refer note 29)
Options subscribed for as part of placement
Options issued as part of capital raise (refer note 29)
Options issued to senior management (refer note 29)
Options expired during the period
Options issued as part of capital raise (refer note 29)
Balance at 30 June 2020
Options expired during the period
Balance at 30 June 2020
$
2020
Number
$
310,302
Number
122,323,048
310,302
122,323,048
-
-
-
-
-
-
-
310,302
-
310,302
682,747,986
19,500,000
682,747,986
82,500,000
19,500,000
(82,994,923)
82,500,000
824,076,111
(82,994,923)
824,076,111
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
<57>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
Annual Report 30 June 2020
(b) Terms of Options
DXN Limited and its controlled entities
At the end of reporting period, there are 683,936,886 options over unissued shares as
follows:
Expiry Date
19 August 20211
19 August 2021
31 December 2022
30 April 2023
18 May 2023
Exercise Price
$0.10
$0.10
$0.10
$0.03
$0.02
Number of
Options
5,000,000
7,500,000
7,500,000
22,000,000
641,936,886
683,936,886
1 These options expired on 19 August 2021 and were not exercised.
22. SHARE BASED PAYMENTS RESERVE
Share based payments at the beginning of the year
Capital raising costs - options (refer note 29)
Employee equity settled transactions (refer note 29)
Reclassified to issued capital
Share based payments at the end of the year
23. ACCUMULATED LOSSES
Consolidated
2021
$
710,403
-
183,966
(27,715)
866,654
Consolidated
2020
$
11,621
437,604
604,692
(343,514)
710,403
Consolidated
2021
$
Consolidated
2020
$
Accumulated losses at the beginning of the reporting
period
Net loss attributable to members
Accumulated losses at the end of the reporting period
(25,700,959)
(13,110,430)
(4,812,631)
(30,513,590)
(12,590,529)
(25,700,959)
24.
RELATED PARTY DISCLOSURES
(a) Loans to key management personnel
There were no loans to key management personnel at the end of the period.
(b) Other transactions and balances with key management personnel
There were no transactions and balances with KMPs other their renumeration disclosed in the
Renumeration report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
<58>
DXN Limited | 2021 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
Annual Report 30 June 2020
DXN Limited and its controlled entities
24.
RELATED PARTY DISCLOSURES (CONTINUED)
24 (c) Key management personnel compensation
The key management personnel compensation
comprised:
Short term employment benefits
Bonus payments
Post-employment benefits
Termination payments
Share based payments
Consolidated
Consolidated
2021
$
2020
$
733,938
51,851
58,025
-
210,866
1,054,680
941,811
48,750
68,016
48,272
461,924
1,568,773
Detailed remuneration disclosures are provided in the Remuneration Report on pages 17 to 25.
25.
FINANCIAL INSTRUMENTS
Financial Risk Management Objectives and Policies
The Group has exposure to the following risks from their use of financial instruments:
(a)
(b)
(c)
(d)
credit risk;
liquidity risk;
market risk; and
Interest rate risk
This note presents information about the Group’s exposure to each of the above risks, their
objectives, policies and processes for measuring and managing risk. The Board has overall
responsibility for the establishment and oversight of the risk management framework. The Board
reviews and agrees policies for managing each of these risks and they are summarised below.
The Group’s principal financial instruments comprise cash. The Group also has other financial
instruments such as receivables and payables which arise directly from its operations. For the
period under review, it has been the Group’s policy not to trade in financial instruments.
Financial Instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Bank guarantees
Financial liabilities
At amortised cost:
Trade and other payables
Borrowings
Lease liabilities
Consolidated
2021
$
Consolidated
2020
$
1,663,955
666,152
1,028,917
3,359,024
3,592,472
389,726
3,087,841
7,070,039
2,153,523
1,632,266
8,507,879
12,293,668
785,512
3,359,506
11,894,815
16,039,833
<59>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Annual Report 30 June 2020
Annual Report 30 June 2020
For the year ended 30 June 2021
DXN Limited and its controlled entities
DXN Limited and its controlled entities
FINANCIAL INSTRUMENTS (CONTINUED)
FINANCIAL INSTRUMENTS (CONTINUED)
For the year ended 30 June 2021
For the year ended 30 June 2021
25.
25.
(a)
(a) Credit risk
(a) Credit risk
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting
Credit risk refers to the risk that a counterparty will default on its contractual obligations
in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy
Credit risk refers to the risk that a counterparty will default on its contractual obligations
resulting in financial loss to the Group. The Group has adopted a policy of only dealing with
counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating
resulting in financial loss to the Group. The Group has adopted a policy of only dealing with
creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means
the risk of financial loss from defaults. The Group only transacts with entities that are rated the
creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means
of mitigating the risk of financial loss from defaults. The Group only transacts with entities that
equivalent of investment grade and above.
of mitigating the risk of financial loss from defaults. The Group only transacts with entities that
are rated the equivalent of investment grade and above.
are rated the equivalent of investment grade and above.
The Group’s exposure and the credit ratings of its counterparties are continuously monitored.
The Group’s exposure and the credit ratings of its counterparties are continuously monitored.
Credit exposure is controlled by counterparty limits that are reviewed and approved by the Board
The Group’s exposure and the credit ratings of its counterparties are continuously monitored.
Credit exposure is controlled by counterparty limits that are reviewed and approved by the
Credit exposure is controlled by counterparty limits that are reviewed and approved by the
annually.
Board annually.
Board annually.
The Group does not have any significant credit risk exposure .
The Group does not have any significant credit risk exposure to the bank, given total borrowings
The Group does not have any significant credit risk exposure to the bank, given total borrowings
are $1,632,266.
(b) Liquidity risk
are $1,632,266.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who
have built an appropriate liquidity risk management framework for the management of the
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who
have built an appropriate liquidity risk management framework for the management of the
Group’s short, medium and long-term funding and liquidity management requirements. The
have built an appropriate liquidity risk management framework for the management of the
Group’s short, medium and long-term funding and liquidity management requirements. The
Group manages liquidity risk by maintaining adequate reserves and banking facilities and by
Group’s short, medium and long-term funding and liquidity management requirements. The
Group manages liquidity risk by maintaining adequate reserves and banking facilities and by
continuously monitoring forecast and actual cash flows and matching maturity profiles of financial
Group manages liquidity risk by maintaining adequate reserves and banking facilities and by
continuously monitoring forecast and actual cash flows and matching maturity profiles of
assets and liabilities. The Group had $1.6m in bank facilities available, with $1.6m currently
continuously monitoring forecast and actual cash flows and matching maturity profiles of
financial assets and liabilities. $$11..66mm iinn bbaannkk ffaacciilliittiieess aavvaaiillaabbllee,, wwiitthh $$11..66mm ccuurrrreennttllyy uuttiilliisseedd
financial assets and liabilities. $$11..66mm iinn bbaannkk ffaacciilliittiieess aavvaaiillaabbllee,, wwiitthh $$11..66mm ccuurrrreennttllyy uuttiilliisseedd
utilised and $0 in undrawn facilities at its disposal as at reporting date.
aanndd $$00 iinn uunnddrraawwnn ffaacciilliittiieess aatt iittss ddiissppoossaall aass aatt rreeppoorrttiinngg ddaattee..
aanndd $$00 iinn uunnddrraawwnn ffaacciilliittiieess aatt iittss ddiissppoossaall aass aatt rreeppoorrttiinngg ddaattee..
The table below analyses the Group’s financial liabilities into relevant maturity groupings
The table below analyses the Group’s financial liabilities into relevant maturity groupings
The table below analyses the Group’s financial liabilities into relevant maturity groupings
based on their contractual maturities. The amounts disclosed in the table are the contractual
in the table are the
based on their contractual maturities. The amounts disclosed
based on their contractual maturities. The amounts disclosed
in the table are the
undiscounted cash flows. Balances due within 12 months equal their carrying balances as the
contractual undiscounted cash flows. Balances due within 12 months equal their carrying
contractual undiscounted cash flows. Balances due within 12 months equal their carrying
balances as the impact of discounting is not significant.
impact of discounting is not significant.
balances as the impact of discounting is not significant.
Less than
Less than
1 year
1 year
1-2 years 2-5 years
1-2 years 2-5 years
>5 years
>5 years
$
$
$
$
$
$
$
$
Total
Total
contractual
contractual
cash flows
cash flows
Carrying
Carrying
Amount
Amount
$
$
2,153,523
2,153,523
-
-
-
-
-
-
2,153,523
2,153,523
2,153,523
2,153,523
1,027,255
1,027,255
625,417
625,417
225544,,776633
335500,,224488
-
335500,,224488
225544,,776633
-
758,793 2,047,790 5,075,879
758,793 2,047,790 5,075,879
1,632,266
1,632,266
8,507,879
8,507,879
3,806,195 1,109,041 2,302,553 5,075,879 12,293,668 12,293,668
3,806,195 1,109,041 2,302,553 5,075,879 12,293,668 12,293,668
1,632,266
1,632,266
8,507,879
8,507,879
Less than
Less than
1 year
1 year
$
$
785,512
785,512
1-2 years 2-5 years
1-2 years 2-5 years
>5 years
>5 years
$
$
$
$
$
$
Total
Total
contractual
contractual
cash flows
cash flows
Carrying
Carrying
Amount
Amount
$
$
-
-
-
-
-
-
785,512
785,512
785,512
785,512
872,920 1,236,801 1,249,785
872,920 1,236,801 1,249,785
3,359,506
3,359,506
1,104,311 1,093,886 3,542,476 6,154,142 11,894,815 11,894,815
1,104,311 1,093,886 3,542,476 6,154,142 11,894,815 11,894,815
2,762,743 2,330,687 4,792,261 6,154,142 16,039,833 16,039,833
2,762,743 2,330,687 4,792,261 6,154,142 16,039,833 16,039,833
3,359,506
3,359,506
-
-
Contractual
Contractual
maturities of
maturities of
financial
financial
liabilities
liabilities
30 June 2021
30 June 2021
Trade and
Trade and
other
other
payables
payables
Borrowings
Borrowings
Lease
Lease
liabilities
liabilities
Net maturity
Net maturity
Contractual
Contractual
maturities of
maturities of
financial
financial
liabilities
liabilities
30 June 2020
30 June 2020
Trade and
Trade and
other
other
payables
payables
Borrowings
Borrowings
Lease
Lease
liabilities
liabilities
Net maturity
Net maturity
<60>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Annual Report 30 June 2020
For the year ended 30 June 2021
DXN Limited and its controlled entities
25.
25.
FINANCIAL INSTRUMENTS (CONTINUED)
FINANCIAL INSTRUMENTS (CONTINUED)
For the year ended 30 June 2021
(c) Market risk
(a) Credit risk
The Group does not currently hold any financial instruments which are subject to these
market risks. Market risk is the risk that changes in the market prices such as foreign
Credit risk refers to the risk that a counterparty will default on its contractual obligations
exchange rates, and equity prices will affect the Group’s income or value of its holdings of
resulting in financial loss to the Group. The Group has adopted a policy of only dealing with
financial instruments. The Group limits its exposure to credit risk by only investing in liquid
creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means
securities and only with counterparties that have acceptable credit ratings
of mitigating the risk of financial loss from defaults. The Group only transacts with entities that
are rated the equivalent of investment grade and above.
(d) Interest rate risk
The Group’s exposure and the credit ratings of its counterparties are continuously monitored.
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument
Credit exposure is controlled by counterparty limits that are reviewed and approved by the
will fluctuate due to changes in market interest rates. Current financial assets and financial
Board annually.
liabilities are generally not exposed to interest rate risk because of their short-term nature.
The Group does not have any significant credit risk exposure to the bank, given total borrowings
At 30 June 2021, the Group’s cash/cash equivalents (note 7) and borrowings (note 17) are
are $1,632,266.
fixed interest rate instruments. Therefore, they are not subject to interest rate risk.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who
Fair value measurements
have built an appropriate liquidity risk management framework for the management of the
The fair values of cash, receivables, trade and other payables approximate their carrying
Group’s short, medium and long-term funding and liquidity management requirements. The
amounts as a result of their short-term maturity.
Group manages liquidity risk by maintaining adequate reserves and banking facilities and by
continuously monitoring forecast and actual cash flows and matching maturity profiles of
financial assets and liabilities. $$11..66mm iinn bbaannkk ffaacciilliittiieess aavvaaiillaabbllee,, wwiitthh $$11..66mm ccuurrrreennttllyy uuttiilliisseedd
aanndd $$00 iinn uunnddrraawwnn ffaacciilliittiieess aatt iittss ddiissppoossaall aass aatt rreeppoorrttiinngg ddaattee..
Consolidated
2020
The table below analyses the Group’s financial liabilities into relevant maturity groupings
$
in the table are the
based on their contractual maturities. The amounts disclosed
12,590,529
contractual undiscounted cash flows. Balances due within 12 months equal their carrying
balances as the impact of discounting is not significant.
(a) Loss used in the calculation of basic and dilutive
earnings per share for continuing operations
Consolidated
2021
$
26. EARNINGS PER SHARE
4,812,631
$
1-2 years 2-5 years
Less than
1 year
Contractual
maturities of
financial
liabilities
(b) Weighted average number of ordinary shares
$
30 June 2021
outstanding during the reporting period used in
Trade and
calculation of basic and diluted earnings per share
-
other
payables
Borrowings
Lease
liabilities
Net maturity
2,153,523
1,027,255
625,417
225544,,776633
335500,,224488
$
-
>5 years
Number of
shares
2021
Total
contractual
cash flows
Number of
Carrying
shares
Amount
2020
$
1,069,101,004
$
489,941,094
-
-
2,153,523
2,153,523
1,632,266
1,632,266
8,507,879
8,507,879
758,793 2,047,790 5,075,879
3,806,195 1,109,041 2,302,553 5,075,879 12,293,668 12,293,668
Contractual
maturities of
financial
liabilities
30 June 2020
Trade and
other
payables
Borrowings
Lease
liabilities
Net maturity
Less than
1 year
1-2 years 2-5 years
>5 years
$
$
$
$
Total
contractual
cash flows
Carrying
Amount
$
785,512
-
-
872,920 1,236,801 1,249,785
-
-
785,512
785,512
3,359,506
3,359,506
1,104,311 1,093,886 3,542,476 6,154,142 11,894,815 11,894,815
2,762,743 2,330,687 4,792,261 6,154,142 16,039,833 16,039,833
<61>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
27. CASH FLOW INFORMATION
(a) Reconciliation of cash flow from operations with
loss from ordinary activities after income tax.
Consolidated
2021
Consolidated
2020
$
$
Loss after income tax
Adjustment for;
- Amortisation - intangibles
- Lease amortisation
- Lease interest charge
- Chattel Mortgage interest charge
- Depreciation
- Foreign exchange gain/loss
- Gain/loss on sale of plant and equipment
- Provision for doubtful debts
- Share based payment
- Lease liability reversal
- Impairment of assets
Changes in assets and liabilities
- (Increase)/decrease in trade and other
receivables
- (Increase)/decrease in prepayments
- (Increase)/decrease in inventory/Work
in progress
- (Increase)/decrease in deposits
- Increase/(decrease) in trade and other payables
- Increase/(decrease) in income in
advance
- Increase/(decrease) in provisions
Net cash flow used in operating activities
(b) Reconciliation of cash and cash equivalents
Cash and cash equivalents comprises:
Cash at bank and on hand
(4,812,631)
(12,590,529)
493,231
599,555
295,482
130,855
3,903,980
-
-
-
183,967
(3,302,433)
347,394
77,550
1,197,751
217,849
29,687
1,590,639
(79,190)
(7,843)
83,768
604,692
-
3,743,255
(271,400)
669,150
386,554
(86,591)
(238,497)
84,314
-
(168,876)
4,020
(1,101,209)
(347,018)
(526,539)
38,128
(2,663,541)
58,663
(6,030,563)
Consolidated
2021
$
Consolidated
2020
$
1,663,955
3,592,472
1,663,955
3,592,472
(c) Acquisition of Entities
There was no acquisition of entities during the period.
(d) Non-cash financing and investing activities
There was no non-cash financing and investing activities during the period.
<62>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
28. SEGMENT INFORMATION
An operating segment is a component of an entity that engages in business activities from which
it may earn revenue and incur expenses, whose operating results are regularly reviewed by the
Group’s Chief Operating Decision Maker (CODM) in order to effectively allocate Group resources
and assess performance.
The group has identified its operating segments based on internal reports that are reviewed and
used by the Chief Executive Officer (CEO) in the capacity of CODM. Two operating segments have
been identified:
• Data Centre Manufacturing
• Data Centre Operations
Year ended 30 June
2021
Revenue from
external customers
Other Income
Data Centre
Manufacturing
Data Centre
Operations
Other
(Corporate)
Total
7,050,936
984,201
-
8,035,137
-
43,696
4,572,973
4,616,669
Total Revenue
7,050,936
1,027,897
4,572,973
12,651,807
Profit / (loss) before
income tax expense
Total segment
assets
Total segment
liabilities
Year ended 30 June
2020
Revenue from external
customers
Other Income
Total Revenue
Profit / (loss) before
income tax expense
Total segment assets
Total segment
liabilities
849,864
(5,166,389)
(496,106)
(4,812,631)
2,639,828
18,463,810
2,767,349
23,870,987
1,781,997
9,631,800
1,448,717
12,862,514
Data Centre
Manufacturing
Data Centre
Operations
Other
(Corporate)
Total
5,070,234
-
5,070,234
118,046
-
118,046
-
5,188,280
1,404,447
1,404,447
1,404,447
6,592,727
(136,148)
(3,610,734)
(8,843,647)
(12,590,529)
1,863,085
20,490,935
9,487,346
31,841,366
1,010,593
11,496,961
4,410,014
16,917,568
The revenue reported above represents revenue generated from external customers. There were no
intersegment sales during the period. 100% of the Group’s revenue from external customers is
recognised over time.
The accounting policies of the reportable segments are the same as the Group’s accounting policies.
Segment profit represents the profit earned by each segment without allocation of the share of central
administration costs including directors’ salaries, finance income, non-operating gains and losses in
respect of financial instruments and finance costs, and income tax expense. This is the measure
reported to the Group’s Managing Director for the purpose of resource allocation and assessment of
segment performance.
Assets used jointly by reportable segments are allocated on the basis of the revenues earned by
individual reportable segments.
<63>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
28. SEGMENT INFORMATION (CONTINUED)
Major customers
The Group has a number of customers to which it provides services and products. The Group
supplies 2 single external customers in the Data Centre Manufacturing segment which
accounts for 25% and 22% of external revenue (2020: 21%, 18%, 15%). The next most
significant customer accounts for 10% (2020:14%) of external revenue. Within the Data Centre
Operations segment, the Group supplies one single external customers which accounts for
92% of external revenue (2020: 86%).
29. SHARE BASED PAYMENTS
(a) Recognised employee share based payment expenses
The expense recognised for employee services received during the period are as follows:
Total expense rising from employee, consultant and
Director share based payment transactions;
- Performance rights & options
- Reversal of prior period expense following
departures/terminations
Consolidated Consolidated
2021
$
2020
$
221,354
604,692
(37,387)
-
183,967
604,692
Performance Rights
No performance rights were granted during the year ended June 30 2021.The value of
performance rights granted in previous periods was calculated using the Black-Scholes
Option Pricing Model incorporating a Monte Carlo simulation. The performance right issue
expense for FY2021 amounted to $123,492 (2020: $470,932). The values and inputs are as
follows:
<64>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
29. SHARE BASED PAYMENT (CONTINUED)
2020 Performance Rights
Performance rights issued
Underlying share value
Exercise price of performance rights
Risk free interest rate
Share price volatility
Expiration periods
Probability of meeting milestone hurdle
Valuation per performance right
9,300,000
0.050-0.053
Nil
0.92-0.77%
75%
16 April 2020 to 30 June 2022
100%
0.050-0.053
The expected life of the performance rights is based on historical data and is not necessarily indicative
of exercise patterns that may occur. The expected volatility reflects the assumption that historical
volatility is indicative of future trends, which may also not necessarily be the actual outcome.
A summary of main vesting conditions are as follows:
Senior Executives
Milestones: DXN-SYD01 achieving either;
i.
An annual gross equal to or in excess of $15,000,000;
Or ii. Filled capacity of 5 MW;or
iii. Sales equal to or in excess of 500 server racks; and Milestone 2: DXN modules achieving
total sales equal to or in excess of $25,000,000 over a rolling 12-month period, both on or
before 30 June 2022.
Sales Staff
Twelve (12) months from date of issue 1
Twenty-four (@$) months from date of issue1
‘1 These performance rights were later amended to date of employment rather than date of issue.
The performance rights were subscribed for nil consideration per performance right, and no
performance rights have vested since the financial period. The reversal of prior period expense related
to performance rights of a former employee amounted to $16,635
(b) Equity-settled share based payments
Options issued to CEO - 2021
During the period, the Group granted no options to the CEO.
Options issued to CEO – 2020
On 19 August 2019, the Group issued three (3) tranches of options to senior management;
i) 3,750,000 options exercisable at $0.10 on or before 19 August 2020
ii) 5,000,000 options exercisable at $0.10 on or before 19 August 2021
iii) 7,500,000 options exercisable at $0.10 on or before 19 August 2022
The first tranche of options expired without them being exercised on 19 August 2020, and the second
tranche of options have also expired subsequent to year end, without them being exercised on
19 August 2021.
Inputs for measurement of issue date fair value
Options
The options were issued during the financial period and were provided at no cost to the recipient.
<65>
DXN Limited | 2021 ANNUAL REPORT
Annual Report 30 June 2020
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
DXN Limited and its controlled entities
Tranche 1
The expense during the year ended 30 June 2021 amounted to $5,686 (2020: $35,938). The
values and inputs are as follows:
29. SHARE BASED PAYMENTS (CONTINUED)
Options – 19 August 2020 ($0.10)
Options issued
Underlying share value
Exercise price of options
Risk free interest rate
Expected future volatility
Dividend yield
Expiration period
Valuation per option
3,750,000
$0.05
$0.10
1%
75%
0%
19-Aug-20
$0.011
Tranche 2
The expense during the year ended 30 June 2021 amounted to $40,181 (2020:
$34,787). The values and inputs are as follows:
Options – 19 August 2021 ($0.10)
Options issued
Underlying share value
Exercise price of options
Risk free interest rate
Expected future volatility
Dividend yield
Expiration period
Valuation per option
5,000,000
$0.05
$0.10
1%
75%
0%
19-Aug-21
$0.016
Tranche 3
The expense during the year ended 30 June 2021 amounted to $51,995
(2020:$45,015). The values and inputs are as follows:
Options – 19 August 2022 ($0.10)
Options issued
Underlying share value
Exercise price of options
Risk free interest rate
Expected future volatility
Dividend yield
Expiration period
Valuation per option
7,500,000
$0.05
$0.10
1%
75%
0%
19-Aug-22
$0.02
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
<66>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
Annual Report 30 June 2020
DXN Limited and its controlled entities
29. SHARE BASED PAYMENTS (CONTINUED)
On 28 October 2019, the Group issued three (3) tranches of options to senior
management;
i) 750,000 options exercisable at $0.10 on or before 28 October 2020
ii) 1,000,000 options exercisable at $0.10 on or before 28 October 2021
iii) 1,500,000 options exercisable at $0.10 on or before 28 October 2022
The first tranche of options expired without them being exercised on 28 October 2020, and
the second and third tranche of options were cancelled on 31 May 2021, pursuant to the
terms and conditions under which they were issued. The reversal of prior period expense
related to these options during the year ended 30 June 2021 amounted to $18,020.
Inputs for measurement of issue date fair value
Tranche 1
The options were issued during the prior financial period and were provided at
Options – 28 October 2020 ($0.10)
no cost to the recipient.
Options issued
Underlying share value
Exercise price of options
Risk free interest rate
Expected future volatility
Dividend yield
Expiration period
Valuation per option
750,000
$0.06
$0.10
1%
75%
0%
28-Oct-20
$0.01
Tranche 2
The values and inputs are as follows:
Options – 28 October 2021 ($0.10)
Options issued
Underlying share value
Exercise price of options
Risk free interest rate
Expected future volatility
Dividend yield
Expiration period
Valuation per option
1,000,000
$0.06
$0.10
1%
75%
0%
28-Oct-21
$0.02
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
29. SHARE BASED PAYMENTS (CONTINUED)
<67>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
Annual Report 30 June 2020
DXN Limited and its controlled entities
Tranche 3
The values and inputs are as follows:
Options – 28 October 2022 ($0.10)
Options issued
Underlying share value
Exercise price of options
Risk free interest rate
Expected future volatility
Dividend yield
Expiration period
Valuation per option
Options issued as part of capital raise
2021
1,500,000
$0.06
$0.10
1%
75%
0%
28-Oct-22
$0.02
On 15 April 2021, the Group issued 22,000,000 free attaching options exercisable at $0.03 on or
before 30 April 2023 as part of the placement to a new institutional investor. These options are
valued at $Nil given they are a part of a placement.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
<68>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
29. SHARE BASED PAYMENTS (CONTINUED)
2020
On 11 November 2019, the Group issued 15,000,000 options exercisable at $0.10 on or before 11
November 2020 to a consultant for raising capital costs as part of a capital placement.
The value of the options issued during the period was calculated using a binomial option pricing model
and totalled Nil (2020: $103,617). The values and inputs are as follows;
Options – 11 November 2020 ($0.10)
Options issued
Underlying share value
Exercise price of options
Risk free interest rate
Expected future volatility
Dividend yield
Expiration period
Valuation per option
15,000,000
$0.06
$0.10
1%
75%
0%
11-Nov-20
$0.007
On 7 January 2020, the Group issued 7,500,000 options exercisable at $0.10 on or before 31 December
2022 to a consultant for capital raising costs as part of a capital placement.
The value of the options issues during the period was calculated using a binormal option pricing model
and Nil (2020:$113,413). The values and inputs are as follows:
Options – 31 December 2022 ($0.10)
Options issued
Underlying share value
Exercise price of options
Risk free interest rate
Expected future volatility
Dividend yield
Expiration period
Valuation per option
7,500,000
$0.05
$0.10
1%
75%
0%
31-Dec-22
$0.015
On 19 May 2020, the Group issued 60,000,000 options exercisable at $0.2 on or before 18 May 2023 to a
consultant as a part of placement.
The value of the options issued during the period was calculated using a binomial option pricing model
and totalled Nil (2020: $220,568). The values and inputs are as follows:
Options – 31 December 2022 ($0.10)
Options issued
Underlying share value
Exercise price of options
Risk free interest rate
Expected future volatility
Dividend yield
Expiration period
Valuation per option
60,000,000
$0.01
$0.02
0.3%
75%
0%
18-May-23
$0.00367
<69>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
29. SHARE BASED PAYMENTS (CONTINUED)
Options outstanding as at 4 August 2017
Options subscribed for
Convertible noteholder options
Options outstanding as at 30 June 2018
Options issued as part of placement
Options outstanding as at 30 June 2019
Options issued to senior executives
Options issued as part of placement
Options issued as part of placement
Options expired during the period
Options outstanding as at 30 June 2020
Options exercised during the period
Options expired during the period
Options expired during the period
Options cancelled during the period
Options issued during the period as a part
of placement
Options outstanding 30 June 2021
Weighted
Average
Exercise
Price
-
$0.30
$0.30
$0.30
$0.10
$0.165
$0.10
$0.10
$0.02
$0.10
$0.046
$0.02
$0.10
$0.30
$0.10
$0.03
$0.02
Number
-
32,500,000
6,828,125
39,328,125
82,994,923
122,323,048
19,500,000
113,068,130
652,179,856
(82,994,923)
824,076,111
(10,242,970)
(110,068,130)
(39,328,125)
(2,500,000)
22,000,000
683,936,886
30. EVENTS SUBSEQUENT TO REPORTING DATE
On 9 September 2021, the Company entered into a binding share and unit sale agreement to
purchase 100% of a data centre in Darwin, Northern Territory, for a purchase price of ~$4.6
million in cash and $200,000 worth of shares in the Company. $850,000 of the purchase price
will be retained to cover any warranty claims associated with the acquisition. Subject to any
warranty claims, the retention amount will be paid one year after settlement.
On 9 September 2021, the Company announced it has executed a binding term sheet for a new
four year secured $4 million debt facility with Pure Asset Management to support the
acquisition of the Darwin Data Centre and the Company’s future growth strategies.
On 9 September 2021, the Company announced it would undertake a Share Purchase Plan to
existing shareholders to raise up to $1.5 million, with the offer closing on 30 September 2021.
On 10 September 2021 the Company completed a placement for ~$1.64 million through a
placement to strategic investor DC Alliance Pte Ltd and sophisticated investors.
No other matters or circumstances have arisen since the end of the financial period which
significantly affected or may significantly affect the operations of the Group, the results of
those operations, or the state of affairs of the Group in future financial years.
<70>
DXN Limited | 2021 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
31. CONTINGENT LIABILITIES
A contingent liability of $3.3m has been recorded as at 30 June 2021, relating to the lease
dispute for the Melbourne data centre site. There are currently legal proceedings on foot
between the landlord of the Lorimer Street property and the Company in which the landlord
is claiming unpaid rent since April 2021. The Company has brought a claim alleging that the
landlord repudiated the lease, the lease has been terminated and the Company has no ongoing
liability to pay rent. In addition, the Company has sued the landlord for loss and damage arising
as a result of alleged breaches of the lease by the landlord. Rent has been characterised as a
contingent liability pending determination or resolution of the dispute.
Consolidated
2021
$
-
-
-
-
Consolidated
2020
$
53,449
-
-
53,449
Consolidated
2021
$
Consolidated
2020
$
366,145
628,384
994,529
(56,391)
938,138
1,004,321
2,615,697
3,620,018
(260,512)
3,359,506
32. COMMITMENTS
Capital expenditure commitments
No later than 1 year
Between 1 and 2 years
Greater than 2 years
Chattel Mortgage Commitments
Payable – minimum payments:
– not later than 1 year
– between 1 and 5 years
Minimum payments
Less future finance charges
Present value of minimum payments
33. COMPANY DETAILS
The registered office address is;
5 Parkview Drive
Sydney Olympic Park NSW 2127
The principal place of business address is:
3 Dampier Road
Welshpool WA 6106
Other business addresses in Australia are;
40-50 Innovation Drive
Dowsing Point Tasmania 7010
<71>
DXN Limited | 2021 ANNUAL REPORT
Directors’ Declaration
DIRECTORS’
DECLARATION
The directors declare that:
1.
The financial statements, notes and additional disclosures included in the Directors’ report and
designated as audited, are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards and Corporations Regulations 2001;
(b)
(c)
giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
performance for the period ended on that date;
the financial statements are in compliance with International Financial Reporting Standards, as
stated in note 1 to the financial statements.
2.
The Chief Executive Officer and Chief Financial Officer have declared that:
(a)
the financial records of the Group for the financial period have been properly maintained in
accordance with section 295A of the Corporations Act 2001;
(b)
the financial statements and notes for the financial period comply with Accounting Standards; and
(c)
the financial statements and notes for the financial period give a true and fair view.
3.
In the directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its
debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
John Baillie
Non-Executive Chairman
Dated this 30th day of September 2021
<72>
DXN Limited | 2021 ANNUAL REPORT Independent Audit Report
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF DXN LIMITED
Report on the Audit of the Financial Report
Opinion
Moore Australia Audit (WA)
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace, WA 6831
T +61 8 9225 5355
F +61 8 9225 6181
www.moore-australia.com.au
We have audited the financial report of DXN Ltd (the “Company”) and its controlled entity (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 statements, including
a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
i.
ii.
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 then ended; and
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (the “Code”) that are relevant to our audit of
the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We 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.
Emphasis of Matter - Material Uncertainty Related to Going Concern
Without modification to our opinion expressed above, we draw attention to Note 1 “Going Concern” of the
financial statements which states that the financial statements have been prepared on a going concern basis.
Should the Company be unable to achieve the funding and operational outcomes described in Note 1 and
continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in
the normal course of business and at amounts other than as stated in the financial report.
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 year. 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.
Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation
<73>
DXN Limited | 2021 ANNUAL REPORT
Key Audit Matters (continued)
Customer contracts – revenue recognition, valuation of works in progress (WIP), trade accounts receivable and
income received in advance
Refer to Notes 1(k) Revenue Recognition, 8 Trade & Other Receivables, 10(b) Work in Progress & 16 Income In
Advance
For the year ended 30 June 2021, a significant portion of
the Group’s revenue is derived from the sales of DXN
Modules. At balance date, DXN Module-related Works in
Progress (WIP) balance was $0.57 million, trade debtors
were $0.66 million and income in advance was $0.39
million.
The accurate recording of revenue is highly dependent
upon the following key factors:
• Knowledge of the individual characteristics and status
of contracts.
• Management’s invoicing process including
-
-
-
Accurate measurement of work done based on
the Module build’s stage of completion
Invoices prepared in compliance with contract
terms and conditions described in the contract,
provided they fulfil the criteria of AASB 15
Revenue from Contracts with Customers.
Recognition of any variations in accordance with
contractual terms and based on an assessment
as to when the Group believes it is highly
probable that a significant reversal in revenue
recognised will not occur.
We focused on this matter as a key audit matter due to
the significance of contract-based revenue to the Group
combined with the need to comply with a variety of
contractual conditions,
judgemental risk
leading to
associated with revenue recognition.
Our procedures included among others:
• Obtained an understanding of the processes and
relevant controls relating to accounting for customer
contracts to ensure compliance with AASB 15
• Read significant customer contracts to understand
the terms/conditions and their revenue recognition
impact, & accuracy of income in advance.
• Tested the accuracy and completeness of contracting
revenue and related cost of sales to supporting
documentation on a sample basis
• Performed cut-off testing on revenue and income in
advance to ensure they were recorded accurately and
in the appropriate reporting period
• Examined costs included within WIP balances on a
sample basis by verifying the amounts to source
documentation and tested its recoverability through
subsequent invoicing (if applicable), discussions with
management & review of other supporting evidence
• Reviewed ageing of trade receivables and & testing its
recoverability to subsequent receipts. We also
reviewed Board minutes and other documents
concerning any expected credit loss
• Reviewed the relevant disclosures contained in the
financial statements.
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DXN Limited | 2021 ANNUAL REPORT
Key Audit Matters (continued)
Plant & Equipment - Carrying values of Plant & Equipment & Non-Current Assets Held for Sale
Refer to Note 10(a) Non-Current Assets Held for Sale and Note 12 Plant & Equipment
At 30 June 2021, total Plant and Equipment amounted to
$8.7 million (representing the Group’s single largest
asset) which comprised 2 core categories, namely:
DC Modules $6.62 million (76%) &
Leasehold improvements $1.82 mill (21%)
Our procedures included the following:
• Testing expenditures related to capitalised costs
during the year on a sample basis against supporting
documentation such as supplier invoices to ensure
expenditures
in
accordance with AASB 116 Property Plant &
Equipment
appropriately
recorded
are
•
•
Of the DC Modules carrying value of $6.62 million, $5.44
million relates to DXN-SYD01 while $1.18 million refers to
DXN-TAS01. Leasehold improvements of $1.82 million
predominantly relate to DXN-SYD01.
The Group also held $0.54 million in excess plant and
equipment for sale at balance date (Note 10a).
Given the relative infancy of the Group’s operations,
particularly in relation to DXN-SYD01, we were unable to
rely on forecast cash flows as a reliable estimate of this
asset’s value-in-use.
The fixed assets of DXN-SYD01 including those held for
sale were subject to a professional independent valuation
during the year to ensure their carrying book values were
not higher than their recoverable amounts (market value)
pursuant to AASB 136 Impairment and AASB 5 Non-
current Assets Held for sale and Discontinued Operations.
The carrying values of these assets were considered key
audit matters given the significance of these assets to the
Group and the judgement involved in the assessment of
impairment.
• Evaluation of the independent professional valuation
of DXN-SYD01
including the external expert’s
competence, capabilities, and objectivity. We also
assessed the methodology adopted by the expert to
the
estimate market values and considered
appropriateness of any critical assumptions adopted
by the expert.
• Checking, on a sample basis, the accuracy and
relevance of the input data provided by management
to the external valuer.
• Held discussions with management concerning
excess core capital assets which management assert
can either be sold on a standalone basis (non-current
assets held for sale) or fully utilised in the future
expansion of DXN-SYD01.
• Based on the independent valuation, an impairment
of $136K was recognised for the Non-current Assets
Held for Sale.
• In addressing the existence assertion for major assets
located at DXN-SYD01, we noted DXN-SYD01 was
independent valuer
physically
during the year. Their inspection also extended to the
non-current assets held for sale.
inspected by the
• Reviewed the relevant disclosures contained in the
financial statements
<75>
DXN Limited | 2021 ANNUAL REPORT Key Audit Matters (continued)
Contingent Liabilities / Reversal of Lease Liability
Refer to Note 14 Right of Use Assets/Lease Liabilities and Note 31 Contingent Liabilities
As detailed in the Directors’ Report and Note 31, the
Company is party to a legal dispute regarding the lease of
the Melbourne property.
Our procedures included the following:
• Holding discussions with the Board, management and
the Company’s legal advisors regarding their views on
this significant legal matter;
legal
Based on advice received by the Company’s
advisors, management has exercised
significant
judgment in respect of reversing the associated lease
liability to profit and loss (per Note 14) and the
classification of the dispute as a contingent liability.
This
is considered a key audit matter given the
significance of the dispute and the material adjustment
adjudged by management to be appropriate.
• Issuing requests for confirmation of the litigation to
the Company’s legal advisors. We assessed the
correspondence received by comparing this to our
understanding of views expressed by management
and the Board, and the consistency of facts and
conditions gathered across our work;
• Reviewing
the
correspondence between
the
stakeholders
• Assessing whether the status of the claim meets the
definition of a liability or a contingent liability in
accordance with Australian Accounting Standards
We also assessed the appropriateness of the related
disclosures in Note 31 of the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Company’s annual report for the year ended 30 June 2021, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company 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 Company or to cease
operations, or has no realistic alternative but to do so.
<76>
DXN Limited | 2021 ANNUAL REPORT
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 audit report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report as included in the directors’ report for the year ended 30 June
2021.
In our opinion, the Remuneration Report of DXN 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.
SUAN LEE TAN
PARTNER
Signed at Perth on the 30th day of September 2021
MOORE AUSTRALIA AUDIT (WA)
CHARTERED ACCOUNTANTS
<77>
DXN Limited | 2021 ANNUAL REPORT
Corporate Governance Statement
CORPORATE GOVERNANCE
STATEMENT
1.1. Roles and Responsibilities of Board and Management
THE ROLE OF THE BOARD AND DELEGATIONS
The Board is accountable to shareholders for the activities and performance of DXN by overseeing the creation
of sustainable shareholder value within an appropriate risk framework and having regard for stakeholder
interests and community expectations.
The Board is responsible for setting DXN’s vision and strategy. DXN’s vision is to bring critical communication
infrastructure closer to our customers. We will be the preferred partner of EDGE infrastructure owners and
developers supplying, operating and maintaining physical EDGE infrastructure, networks and maintenance
products and services. This is a long-term vision and the Board sets strategic priorities each year to work
towards fulfilling this vision.
Directors are actively involved in setting, approving and regularly monitoring DXN’s strategic priorities and
holding management accountable for progress.
This process includes one annual Board strategy offsite, regular Board reporting and meetings, and discussion
and review with management. Similarly, the Board ensures that rigorous governance processes operate
effectively to guide decision making across the business.
The Board’s responsibilities are set out in the Board Charter, which is available at: Corporate Governance Plan
The Board’s role and responsibilities include:
•
•
•
•
•
•
•
•
•
establishing, promoting and maintaining the strategic direction of DXN;
approving business plans, budgets and financial policies;
considering management recommendations on strategic business matters;
establishing, promoting and maintaining proper processes and controls to maintain the integrity of
accounting and financial records and reporting;
fairly and responsibly rewarding executives, having regard to the performance of the executives, DXN’s
risk management framework and culture, the interests of shareholders, market conditions and DXN’s
overall performance;
adopting and overseeing of implementation of corporate governance practices;
overseeing the establishment, promotion and maintenance of effective risk management policies
and processes;
reviewing Board composition and performance;
appointing, evaluating and remunerating the Chief Executive Officer (CEO) and approving the
appointment of the Chief Financial Officer (CFO) and Company Secretary; and
•
determining the CEO’s delegated authority.
The Board has established committees to assist in carrying out its responsibilities and to consider certain
issues and functions in detail.
The Board committees are discussed at section 1.3.
MANAGEMENT RESPONSIBILITY
The Board has delegated to the CEO the authority and powers necessary to implement the strategies approved
by the Board and to manage the business affairs of DXN within the policies and delegation limits specified by
the Board from time to time. The CEO may delegate authority to management but remains accountable for all
authorities delegated to management.
<78>
DXN Limited | 2021 ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT (CONTINUED)
1.2. Directors’ Skills Matrix
The Board has determined that its current members have an appropriate collective mix of skills, experience and
expertise to:
•
•
•
•
exercise independent judgement;
have a proper understanding of, and competence to deal with, current and emerging issues of the
business;
encourage enhanced DXN performance; and
effectively review and challenge the performance of management.
The Board’s competencies are assessed annually and the results of the most recent (August 2021) assessment
are shown in the table below.
Areas of expertise/leadership qualities
Average Self-Assessment Rating*
Administration
Capital raising expertise
Early stage companies/start-ups
Financial oversight/audit expertise
Government
Leadership skills
Legal
Marketing, public relations
Mergers & acquisitions
Human resources/compensation expertise
Industry knowledge/expertise
Operational expertise
Risk management expertise
Strategic planning
Sales
Technology
3
3.5
4
3.25
2.75
4.25
2.75
3.5
3.5
3.25
3.25
3.75
3.25
4.5
4.5
3.75
* Self-assessment rating from 1 to 5, with 1 being the lowest and 5 being the highest.
Given the relatively small size of the Board at present the Board skills matrix shows some skill gaps. The
Board will consider adding Non-Executive Directors with complementary skills to augment, add perspective
and to help improve diversity on the Board.
1.3. Board Committees
To assist it in undertaking its duties, the Board has established the following standing committees:
•
•
Audit & Risk Committee; and
Nomination & Remuneration Committee.
Each committee has its own charter, copies of which are available at: Corporate Governance Plan
The charters specify the composition, responsibilities, duties, reporting obligations, meeting arrangements,
authority and resources available to the committees and the provisions for review of the charter.
Details of Directors’ membership of each committee and those eligible members’ attendance at meetings
throughout the period from 1 July 2020 to 30 June 2021 are set out below.
During the period, 11 meetings of directors were held. Attendances by each director during the period were
as follows:
<79>
DXN Limited | 2021 ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Directors’ Meetings
Audit & Risk
Nomination &
Remuneration
Eligible to
Attend
Attended
Eligible to
Attend
Attended
Eligible
to Attend
Attended
11
11
8
9
2
11
11
8
9
-
3
3
1
2
-
3
3
1
2
-
1
1
1
-
-
1
1
1
-
-
Directors
John Baillie
Richard Carden
John Dimitropoulos
(appointed 1 October 2020)
Matthew Madden
(appointed 26 August 2020)
John Duffin
(resigned 26 August 2020)
1.4. Risk Management Framework
DXN’s Board is responsible, in conjunction with senior management, for the management of risks associated
with the business and implementing structures and policies to adequately monitor and manage these risks.
The Board has established the Audit & Risk Committee (ARC) to assist in discharging its risk management
responsibilities. In particular, this committee assist the Board in setting the appropriate risk appetite and for
ensuring that there is an effective risk management framework that is able to manage, monitor and control the
various risks to which the business is exposed.
On a day-to-day basis, the CEO, has the responsibility for monitoring the implementation of the risk framework,
including the monitoring, reporting and analysis of the various risks faced by the business, and providing
effective challenges to activities and decisions that may materially affect DXN’s risk profile.
DXN has a robust risk management framework which supports its operating segments, and its risk appetite
distinguishes risks from which DXN will seek to make an economic return from those which it seeks to
minimise and which it does not consider will provide a return. The management of these risks is fundamental to
DXN’s business, customers and to building long-term shareholder value.
<80>
DXN Limited | 2021 ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT (CONTINUED)
In addition to having a separate risk management function, DXN recognises that a requirement for an effective
risk management framework is for there to be a strong risk culture throughout the organisation, where risk
is everybody’s business. The foundation of this risk culture is a set of values, the DXN values. All employees
are assessed against the DXN values as part of the annual performance review process, and this outcome
contributes to the overall performance rating and remuneration outcomes. In addition to this, DXN regularly
assesses its risk culture through external audits to ensure that the management of risk and day-to-day
compliance remains entrenched within the way in which DXN operates. The Board is responsible for setting
and monitoring the risk appetite for DXN when pursuing its strategic objectives. The Board’s approach to, and
appetite for risk provides that, subject to earning acceptable economic returns, it can retain exposure to credit
risk, liquidity risk and market risk.
•
•
Credit default risk – is the risk of loss in the value of an asset due to a counterparty failing to discharge
its contractual obligations when they fall due;
Liquidity risk – is the potential impact of DXN’s short, medium and long-term funding and liquidity
management requirements; and
• Market risk - is the risk that changes in the market prices such as foreign exchange rates, interest rates
and equity prices will affect DXN’s income or value of its holdings of financial instruments.
DXN seeks to minimise or hedge the risks for which it does not consider an appropriate return can be generated.
These risks include:
•
•
•
•
Foreign exchange risk – is the risk of a change in asset values as a result of movements in foreign
exchange rates;
Inflation risk – is the risk of a change in asset values and DXN’s earnings as a result of movements in
inflation both in Australia and jurisdictions in which DXN owns assets;
Operational risk – is the risk of loss resulting from inadequate or failed internal processes, people and
systems or from external events; and
Regulatory and compliance risk – is the risk of legal or regulatory sanctions or loss as a result of DXN’s
failure to comply with laws, regulations or regulatory policy applying to its business.
<81>
DXN Limited | 2021 ANNUAL REPORT Additional Shareholder Information
ADDITIONAL SHAREHOLDER
INFORMATION
SHAREHOLDING
The distribution of members and their holdings of equity securities in the Company as at 19 September 2021
were as follows:
Number Held as at 19 September 2021
Fully Paid Ordinary Shares
Class of Equity Securities
1- 1,000
1,001 - 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
TOTALS
28
16
17
1,098
1,154
2,313
Holders of less than a marketable parcel: 497
Substantial Shareholders
The names of the substantial shareholders listed in the Company’s register as at 19 September 2021:
Shareholder
DC Alliance Pte Ltd
SG Hiscock & Company
Number
138,888,889
94,884,309
Voting Rights
Ordinary Shares
In accordance with the Company’s Constitution, on a show of hands every member present in person or by
proxy or attorney or duly authorised representative has one vote. On a poll every member present in person or
by proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share held.
On-market buyback
There is no current on-market buy-back.
<82>
DXN Limited | 2021 ANNUAL REPORT ADDITIONAL SHAREHOLDER INFORMATION (CONTINUED)
Unquoted Securities
Securities
Number of Securities
Number of Holders Holders with more than 20%
Options – 19 August 2022
7,500,000
Options – 31 December 2022
7,500,000
Options – 30 April 2023
22,000,000
Performance Rights
14,711,813
1
1
1
3
Mr Matthew Madden – 100%
Canaccord Genuity
(Australia) Limited – 100%
Armytage Private
Pty Ltd – 100%
Ms Shalini Lagrutta – 58.5%
and Mr Matthew Madden –
40.8%
Twenty Largest Shareholders
The names of the twenty largest ordinary fully paid shareholders as at 19 September 2021 are as follows:
Name
Number of
Ordinary Fully Paid
Shares Held
% Held of Issued
Ordinary Capital
DC Alliance Pte Ltd
HSBC Custody Nominees (Australia) Limited
Mr Andrew Walsh
National Nominees Limited
Altor Capital Management Pty Ltd
Mr Brendan Erin Joseph Power
Mr Malcolm John McClure
Mr Thiam Huat Low
Citicorp Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd
Mrs Kim Sorensen
Mrs Hemangee Adjit Joshi & Mr Ajit Bhalchandra Joshi
Estate of Mr Robert Steel Renton
Chelseref Pty Ltd
Mr Jason Andrew Chan
J P Morgan Nominees Australia Pty Ltd
Thang Pty Ltd
DXN Limited
Mr Ross Ellwood Shannon & Mrs Ruth Shona Shannon &
Shannon Trustee Company Ltd
ZW 2 Pty Ltd
TOTAL
138,888,889
136,612,961
50,500,000
48,990,215
27,107,411
25,000,000
21,400,000
20,900,000
20,220,036
15,322,435
11,671,929
11,286,327
9,600,000
9,200,000
8,000,000
7,500,000
6,500,000
6,500,000
6,483,503
10.78
10.61
3.92
3.80
2.10
1.94
1.66
1.62
1.57
1.19
0.91
0.88
0.75
0.71
0.62
0.58
0.50
0.50
0.50
6,066,990
587,750,696
0.47
45.61
<83>
DXN Limited | 2021 ANNUAL REPORT ADDITIONAL SHAREHOLDER INFORMATION (CONTINUED)
Option Holders
The distribution of members and their holdings of listed options in the Company as at 19 September 2021 were as follows:
Number Held as at 19 September 2021
Class of Equity Securities
Listed options exercisable at $0.02 on
or before 18 May 2023
1- 1,000
1,001 - 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
TOTALS
Holders of less than a marketable parcel:
4
9
2
116
330
461
145
Twenty Largest Option Holders
The names of the twenty largest listed option holders as at 19 September 2021 are as follows:
Name
Number of Listed
Options exercisable at
$0.02 on or before 18
May 2023 Held
% Held of Listed
Options
National Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited
Mr Brendan Erin Joseph Power
Jorac Pty Ltd
Thang Pty Ltd
Mr Bilal Ahmad
Mr Aaron Yuk Leung Chan
Smart Capital Investments Pty Ltd
Mr Malcolm John McClure
Mrs Kim Sorensen
Mr Andrew Walsh
Mr Salim Panjwani & Miss Shailee Oza
Mr Vimal Ramesh Adnani
Thang Pty Ltd
Ms Limei Chen
Light Family Holdings Pty Ltd
Three Zebras Pty Ltd
Ms Sigrid-Eva Munzel & Mr Dieter Ernst Paussa
Mr Bernard Choon Yin Hui
Mr Christopher Bright
TOTAL
85,000,000
47,546,013
25,000,000
23,975,249
17,500,000
17,043,229
15,000,000
13,702,420
12,390,000
11,934,134
10,356,622
10,017,075
8,124,975
6,800,000
6,500,000
6,300,000
6,000,000
5,771,088
5,500,000
5,468,495
339,929,300
13.24
7.41
3.89
3.73
2.73
2.66
2.34
2.13
1.93
1.86
1.61
1.56
1.27
1.06
1.01
0.98
0.93
0.90
0.86
0.85
52.95
<84>
DXN Limited | 2021 ANNUAL REPORT ADDITIONAL SHAREHOLDER INFORMATION (CONTINUED)
COMPANY SECRETARY
The name of the Group Secretary is George Lazarou.
ADDRESS AND TELEPHONE DETAILS OF THE ENTITY’S REGISTERED AND ADMINISTRATIVE OFFICE
5 Parkview Drive
Sydney Olympic Park NSW 2127
Telephone: 1300 328 239
ADDRESS AND TELEPHONE DETAILS OF THE OFFICE AT WHICH A REGISTER OF SECURITIES IS KEPT
Automic Pty Ltd
Level 2
267 St Georges Terrace
PERTH WA 6000
Telephone: 1300 288 664
SECURITIES EXCHANGE ON WHICH THE GROUP’S SECURITIES ARE QUOTED
The Group’s listed equity securities are quoted on the Australian Securities Exchange.
<85>
DXN Limited | 2021 ANNUAL REPORT <86>