Harris Technology Group Limited 2024 Annual Report 1
Harris Technology Group Limited Annual Report
Year Ended 30 June 2024
ABN: 93 085 545 973
Harris Technology Group Limited 2024 Annual Report 2
Harris Technology Group Growth Strategy
Leverage
rapid growth
from major
e-Commerce
Platforms
Become the
leading Tech
Seller on all
major
e-Commerce
marketplaces
Expand into
other
catagories
and grow
market share
Harris Technology Group Limited 2024 Annual Report 3
Chairman and CEO Letter
Dear Shareholders,
We hereby present the review of operations and Annual Report for Harris Technology Group Limited for
the financial year ended 30 June 2024.
The Directors are disappointed with the loss returned for the year but encouraged by its reduction from
the prior year and improving margins from the move into refurbished tech products and home products.
The company continues to see slow demand for IT products which are impacted by difficult trading
conditions within the macroeconomic environment but the move into refurbished tech is gaining traction
and success.
Review and Results of Operations
Sales decline
The Company experienced a 31% decrease in year on year sales to $16.7M. (2023: $24.2M) with all our
key marketplaces experiencing similar trends. The Company continues to expand its presence on new
and emerging platforms as well as progressively enhancing its own website and growing traffic for
refurbished technology across all marketplaces.
Amazon continues to be a key channel for Harris Technology with our position and rating continuing to
be excellent .
Challenging trading conditions
Whilst interest rates and inflation continue to remain high, it is expected that demand for IT products will
continue to be lackluster in the immediate future. Countering this trend is the demand for good quality
previously owned technology products such as Notebooks, Servers and Networking products where
Harris Technology has quickly pivoted to take advantage of the market.
Strengthening the balance sheet
The team continues to focus on improving margins and managing inventory levels with good success.
This will continue to remain a focus with strict control over inventory and working capital management.
The reduction of the trading loss for the year is encouraging and contained by the progress made in
moving to higher margin categories, with operating cash flow stable as a result of strong working capital
management.
Inventory and working capital levels have been reduced year-on-year and we are confident that the
company is able to meet its expected working capital requirements in the next financial year.
Conclusion
We believe the company is well positioned to benefit from the continued adoption of online shopping
and with higher margin categories in our portfolio and improvement in the economic sentiment, Harris
Technology will again return to strong financial performance.
Sincerely,
Alan Sparks (Chairman)
Garrison Huang (CEO)
Harris Technology Group Limited 2024 Annual Report 4
FY24 Summary
Full year profit and loss summary
Revenue from continuing
operations
FY24
($m)
FY23
($m)
Change
($m)
Sales revenue
16.71
24.19
(7.48)
Total revenue and other income
16.71
24.19
(7.48)
Net profit/(loss) after tax
(1.41)
(3.30)
1.89
Full year profit and loss summary - underlying
Financial results include:
FY24
($m)
FY23
($m)
Change
($m)
Gross profit
4.86
3.76
1.10
Total operating expenses
6.28
6.28
0.00
Profit/(loss) before income tax
(1.41)
(2.52)
1.11
Total comprehensive profit/(loss)
(1.41)
(3.30)
1.89
Balance Sheet
30 Jun 24
($m)
30 Jun 23
($m)
Cash and cash equivalents
0.97
1.77
Inventories
3.28
4.75
Net assets
1.58
2.98
Harris Technology Group Limited 2024 Annual Report 5
Cash position
Cash and cash equivalents of $974,318 as at 30 June 2024.
Based on the cash position at end of FY24 and as a result of a stringent budgeting process as well as
the review of underperforming products, together with the continuing facility support of the CEO,
the Company believes it is in a position to meet its working capital requirements throughout FY25
( see Note 2 a )
Harris Technology Group Limited 2024 Annual Report 6
Management Team
Garrison Huang
Executive Director & Chief Executive Officer
+20 years’ experience in management in the IT Importing and
Distribution industry
Co-Founder of Anyware Corporation Pty Ltd – a leading IT
accessory distributor with well-established importing &
distribution channels
Appointed Executive Director and Chief Executive Officer on
19 July 2016
Harris Technology Group Limited 2024 Annual Report 7
Corporate Information
DIRECTORS
Mr Alan Sparks
Non-Executive Chairman
Mr Garrison Huang
Executive Director & CEO
Mr Guy Polak
Non-Executive Director - Resigned on 15th August 2024
COMPANY SECRETARY
Mr Brett Crowley Appointed as a Non-Executive Director on 16th August 2024
REGISTERED OFFICE
124 Abbott Road
Hallam Victoria 3803
Tel: 1300 13 99 99
AUDITORS
SW Audit
Level 10, 530 Collins Street
Melbourne Victoria 3000
BANKER
CBA
Level 20, Tower 1 Collins Square
727 Collins Street Melbourne, VIC 3008
SHARE REGISTRY
Boardroom Pty Limited
Level 12, 225 George Street
Sydney New South Wales 2000
Tel: 1300 13 99 99
EXCHANGE LISTING
Harris Technology Group Limited’s ordinary
shares are quoted on the Australian Securities
Exchange (ASX: HT8)
STATE OF INCORPORATION
Victoria
Harris Technology Group Limited 2024 Annual Report 8
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
The Directors present their report together with the financial report of the consolidated entity
consisting of Harris Technology Group Limited (the Company) and its controlled entities (the Group),
for the financial year ended 30 June 2024 and independent auditor's report thereon.
INFORMATION ON DIRECTORS AND COMPANY SECRETARY
The qualifications, experience and special responsibilities of each person who has been a Director of
Harris Technology Group Limited, together with details of the Company Secretary, during the
financial year and until the date of this report are as follows. Directors were in office for this entire
year unless otherwise stated.
Names, qualifications, experience, and special responsibilities
Alan Sparks, Independent, Non-Executive Chairman
Mr. Sparks was appointed to the Board on 1 December 2020 as an Independent Non-Executive
Director. Mr Sparks assumed the role of Executive Chairman from 1 April 2021.
Experience and expertise
Alan is an accomplished senior executive with over 40 years’
experience in distribution, retail and technology with a proven track
record of growing businesses and improving their efficiency. Alan is a
member of the South African Institute of Chartered Accountants and a
Graduate of the Australian Institute of Company Directors. Alan has 20
years of leadership experience in APAC, ANZ and Africa, leading
growth of businesses across these markets for global brands. Alan’s
career highlights include having served as CEO – Cellnet Group Ltd
(ASX:CLT), Vice President – Belkin Asia Pacific based in Hong Kong,
President APAC – Carrier Corporation APAC, and Senior Vice President
– Philips Consumer Electronics – APAC, based in Singapore.
Other directorships held by
Director in the last 3 years
Alan is a director of Pacificomm Group Ltd and BirdDog Technology
Ltd ( BDT:ASX )
Special responsibilities
Chair of the Board
Relevant interest in Harris
Technology Group securities
as at the date of this report
Mr Sparks has a relevant interest in 680,000 fully paid ordinary shares
in Harris Technology Group Limited which are held by an entity Mr
Sparks controls.
Harris Technology Group Limited 2024 Annual Report 9
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
Garrison Huang, Executive Director
Mr Huang was appointed to the Board on 3 March 2016 as a Non-Executive Director. Mr Huang was
appointed as Executive Director and CEO on 19 July 2016.
Experience and expertise
Mr. Huang came to Australia from Shanghai, where he was born,
and became an Australian citizen in 1996. Mr. Huang holds a
Bachelor of Engineering degree from Zhejiang University, in China,
a Graduate Diploma in Computer Systems Engineering from
Swinburne University and a Graduate Certificate in Marketing from
Melbourne University.
Mr. Huang is a co-founder of Anyware Corporation Pty Ltd – a
leading IT accessory distributor in Australia. Anyware is a well-
established importing and distribution business with offices and
warehouses in Melbourne, Sydney, Brisbane, Perth and Adelaide. In
2015
Anyware
Corporation
Pty
Ltd
acquired
Harris
Technology (www.ht.com.au) from Office works, one of Australia’s
longest established and leading e-commerce businesses focusing
on technology products.
Other directorships held
by Director in the last 3
years
During the last three years, Mr Huang has not served as a director
of any other listed companies.
Special responsibilities
CEO
Relevant interest in Harris
Technology Group
securities as at the date of
this report
Mr Huang has a relevant interest in 93,059,621 fully paid ordinary
shares in Harris Technology Group Limited which are held by an
entity that Mr Huang controls.
Guy Polak, Non -Executive Director
Mr Polak was appointed to the Board on 1 April 2021 as a Non-Executive Director and resigned
from his position on 15th August 2024.
Experience and expertise
Mr Polak is a skilled retail professional with over 25 years of
experience within the industry, specialising in sales, wholesale,
distribution, buying, sourcing, merchandising and ownership. In
2014, Guy was promoted to Head of Buying at Catch Group where
he reported to the CEO. Guy transformed and grew the buying
department introducing structure and buying principles that
made Catch.com.au the premium destination for all branded
products across major consumer categories. The growth and
success of the buying department ensured Catch.com.au had a
unique advantage over its competitors which was a strong
attraction for the Wesfarmers acquisition of Catch.com.au in 2019.
Harris Technology Group Limited 2024 Annual Report 10
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
Other directorships held
by Director in the last 3
years
During the last 3 years, Mr Polak has not served as a director of
any other listed companies.
Special responsibilities
None.
Relevant interest in Harris
Technology Group
securities as at the date of
this report
Mr Polak has a relevant interest in 195,000 fully paid ordinary
shares in Harris Technology Group Limited which is held by BNB
Paribas Nominees Pty Ltd a nominee for Mr Polak.
Brett Crowley, Company Secretary
Mr Crowley was appointed as Company Secretary on December 2018 and appointed as a non-
Executive director on 16th of August 2024
Experience and expertise
Mr Crowley is a practicing solicitor and a former Partner of Ernst
& Young in Hong Kong and Australia, and of KPMG in Hong Kong.
Mr Crowley is an experienced chairman, finance director and
company secretary of ASX-listed companies, and is a former
Senior Legal Member of the NSW Civil and Administrative
Tribunal. He has been HT8 Secretary since December 2018.
Harris Technology Group Limited 2024 Annual Report 11
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
Directors’ Meetings
The number of meetings of the Board of Directors held during the financial year and the numbers of
meetings attended by each Director (while they were a Director) were as follows:
Director
Eligible to Attend
Number Attended
Mr. Alan Sparks
4
4
Mr. Garrison Huang
4
4
Mr. Guy Polak
4
4
Board Committees
Functions previously being undertaken by the Nomination and Remuneration Committee and the
Audit and Risk Management Committee are currently being performed by the Board as a whole. This
will continue to be the case until the Board determines otherwise.
Directors’ Interests in Shares and Options of the Group
As at the date of this report, the relevant interests of the Directors (and former Directors during the
year) in the shares and options of the Group were:
Director
Number of ordinary shares Number of options (unlisted)
Shares
Share rights and Options
Mr. Alan Sparks 1
680,000
nil
Mr. Garrison Huang 2
93,759,475
nil
Guy Polak 3
195,000
nil
1.
The shares are held by Sparks Superannuation controlled by Mr. Alan Sparks
2.
The shares are held by Australian PC Accessories Pty Ltd ATF GWH A/C and Double Eight Superfund; Mr. Huang
controls these entities.
3.
The shares are held by BNP Paribas Nominees Pty Ltd as nominee for Mr. Guy Polak
Harris Technology Group Limited 2024 Annual Report 12
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
Earnings Per Share
Cents
Basic and diluted earnings per share
(0.47)
Dividends Paid, Recommended and Declared
No dividends were paid, declared, or recommended since the start of the financial year ended 30
June 2024 (2023: nil).
OPERATING AND FINANCIAL REVIEW
Corporate Structure
Harris Technology Group Limited is a company limited by shares that is incorporated and domiciled
in Australia and listed on the Australian Securities Exchange (ASX). Harris Technology Group Limited
has prepared a consolidated financial report incorporating the entities that it controlled during the
financial year ended 30 June 2024. The Company’s subsidiary entities are set out in note 28 to the
consolidated financial statements.
Nature of operations and principal activities
The Group’s principal activities during the course of the financial year were in the areas of technology
distribution and online retailing.
Employees
The Group has 28 employees, inclusive of casual and part-time staff as at 30 June 2024 (2023: 23).
The Group does not have consulting agreements with any contractors as at 30 June 2024 (2023: Nil).
Group EPS Performance over the five-year period
2024
2023
2022
2021
2020
Basic earnings/(loss) per share (cents)
(0.47)
(1.10)
(0.49)
0.71
0.54
Harris Technology Group Limited 2024 Annual Report 13
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
Financial position
The Group had net assets of $1,575,811 as at 30 June 2024 (2023: $2,982,605).
The Group had trade and other receivables of $1,132,511 as at 30 June 2024 (2023: $1,443,007).
The Group had trade and other payables of $2,330,523 as at 30 June 2024 (2023: $2,724,345).
Cash flows
The Group generated net cash operating inflows of $13,678 during the year ended 30 June 2024
(2023: net cash operating inflows $485,516). No proceeds from share issues. Repayments of
borrowings amounts to $621,578 for the year ended 30 June 2023. ( 2023: $914,493 )
There was a cash balance at 30 June 2024 of $974,318 (2023: $1,766,018).
Risk Management
The Board takes a proactive approach to risk management. The Board is responsible for ensuring
that risks, and also opportunities, are identified on a timely basis and that the Company’s objectives
and activities are aligned with the risks and opportunities identified by the Board. The Audit and Risk
Management Committee functions are carried out by the Board as a whole.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year
Appointments and resignations of office holders
Guy Polak resigned from his non-executive director position on 15th August 2024
Brett Crowley appointed as a non-executive director on 16th August 2024
Significant events after the balance date
No matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may
significantly affect the consolidated entity’s operations, the results of those operations, or the
consolidated entity’s state of affairs in future financial years.
Harris Technology Group Limited 2024 Annual Report 14
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
Environmental regulation
The Group’s operations are not subject to any significant Commonwealth or State environmental
regulations or laws.
Shares issued during the year
Nil
Share options
The following options were issued to directors at the 2023 Annual General Meeting under the
Company's Long-Term Incentive plan.
Name
No of Options
Alan Sparks
2,000,000
Garrison Huang
4,000,000
Guy Polak
1,000,000
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Company for costs incurred, in
their capacity as a director or executive, for which they may be held personally liable, except where
there is a lack of good faith.
During the financial year, the Company has not paid a premium in respect of a contract to insure the
Directors and officers of the Company or any related entity.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, ShineWing
Australia, as part of the terms of its audit engagement agreement against claims by third parties
arising from the audit (for an unspecified amount). No payment has been made to indemnify
ShineWing Australia during or since the financial year.
Harris Technology Group Limited 2024 Annual Report 15
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the company, or to intervene in any proceedings to which the
company is a party for the purpose of taking responsibility on behalf of the company for all or part
of those proceedings.
Remuneration Report (Audited)
This Remuneration Report for the year ended 30 June 2024 outlines the remuneration arrangements
of the Company and the Group in accordance with the requirements of the Corporations Act 2001
(the Act) and its regulations. This information has been audited as required by section 308(3C) of the
Act.
At the Company’s 2021 Annual General Meeting, shareholders approved Harris Technology Group’s
Long-Term Incentive Plan (LTIP).
The remuneration report is presented under the following sections:
1.
Key Management Personnel (KMP) disclosed in this report
2.
Remuneration governance
3.
Executive remuneration arrangements
4.
Non-executive Director remuneration arrangements
5.
Details of Key Management Personnel remuneration
6.
Additional disclosures relating to options and shares
1.
Key Management Personnel (KMP) disclosed in this report
Key management personnel are those persons having authority and responsibility for planning,
directing and controlling activities of the Group, including any Director of the Group.
Key Management Personnel during the financial year are as follows:
(i) Executive directors
Mr Garrison Huang*
Director (executive)
(ii) Non-executive directors (NEDs)
Mr Alan Sparks**
Chairman (non-executive)
Mr Guy Polak***
Director (non-executive)
*Garrison Huang appointed Executive Director and CEO on 19 July 2016.
**Alan Sparks appointed as Non-Executive Director on 1st of December 2020.
***Guy Polak appointed as Non-Executive Director on 01st of April 2021 and resigned from his position on 15th of
August 2024.
Harris Technology Group Limited 2024 Annual Report 16
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
Remuneration Report (Cont.) (Audited)
2.
Remuneration governance
Remuneration Policy
The performance of the Group depends upon the quality of its Directors and executives. To be
successful, the Group must attract, motivate, and retain highly skilled Directors and executives. To
this end, the Group seeks to provide competitive rewards to attract high calibre executives. The
Nomination and Remuneration Committee assesses the appropriateness of the nature and amount
of remuneration of Non-Executive Directors, the Chief Executive Officer, and other Key Management
Personnel on a periodic basis. In doing so, the Nomination and Remuneration Committee has
reference to relevant employment market conditions, with the overall objective of ensuring
maximum stakeholder benefit from the retention of a high-quality Board and executive team. A
recommendation of the Nomination and Remuneration Committee is presented to the Board of
Directors for adoption and approval. The Nomination and Remuneration Committee functions are
currently being performed by the entire Board.
Hedging of equity awards
The Group has a policy in place to prohibit Directors and executives from entering into equity
hedging arrangements to protect the value of unvested options.
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive and executive
remuneration is separate and distinct.
3.
Executive remuneration arrangements
The Group aims to reward executives with a level and mix of remuneration commensurate with their
position and responsibilities within the Group so as to:
Reward executives for the Group and individual performance;
Align the interests of executives with those of shareholders;
Link reward with the strategic goals and performance of the Group; and
Ensure total remuneration is competitive by market standards.
Currently remuneration is paid in the form of salaries & fees, superannuation contributions and
shares where applicable.
Harris Technology Group Limited 2024 Annual Report 17
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024
Remuneration Report (Cont.) (Audited)
4.
Non-Executive Director remuneration arrangements
The Group’s constitution provides that the total amount of remuneration provided to all non-
executive Directors must not exceed $500,000.
5.
Details of Key Management Personnel Remuneration
Details of remuneration received by key management personnel of the Group for the current
financial year are set out in the following table:
Short-term benefits
Post-
employment
Security based
payments
Total
$
Performa
nce
related %
Executive Directors
Salary & fees
$
Cash
bonu
s
$
Superannuati
on
$
Option
s $
Share
s
$
Mr Garrison Huang 1
2024
2023
119,076
-
-
-
13,098
-
-
-
-
-
132,174
-
-
-
Non-Executive Directors
Mr Alan Sparks 2
2024
2023
50,000
50,000
-
-
-
-
-
-
-
-
50,000
50,000
-
-
Mr. Guy Polak 3
2024
2023
19,998
19,998
-
-
-
-
-
-
-
-
19,998
19,998
-
-
Total KMP
2024
2023
187,074
69,998
-
-
13,098
-
-
-
-
-
202,172
69,998
-
1.
Garrison Huang appointed Executive Director and CEO on 19 July 2016.
2.
Alan appointed Non-Executive Director and CEO on 1 December 2020.
3.
Guy Polak appointed Non-Executive Director on 01st of April 2021 and resigned from his position on 15th of August 2024.
Harris Technology Group Limited 2024 Annual Report 18
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
Remuneration Report (Cont.) (Audited)
6.
Additional disclosures relating to options and shares
a.
Performance rights holdings of key management personnel
As at the end of FY24 there no rights granted to KMP under the LTIP.
Shares issued on exercise of options.
There were no shares issued to KMP during the year upon the exercise of options.
b.
Shareholdings of key management personnel
Balance at
1 July 2023
No.
Acquired / (dis-
posed) during
the year
No.
Other
movements
Balance at
30 June 2024
No.
Executive Directors
Mr Garrison Huang 1
93,059,621
699,854
-
93,759,475
Non-Executive Directors
Mr Alan Sparks 2
680,000
-
680,000
Mr Guy Polak 3
Other Key
Management
Personal
Mr. Brett Crowley
195,000
-
-
-
-
-
195,000
-
1.
The shares are held by Australian PC Accessories Pty Ltd ATF GWH A/C and Double Eight Super fund; Mr Huang
controls these entities.
2.
The shares are held by Sparks Superannuation controlled by Mr. Alan Sparks
3.
The shares are held by custodian holding control by Mr. Guy Polak
Harris Technology Group Limited 2024 Annual Report 19
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
Remuneration Report (Cont.) (Audited)
Share-based compensation
Issue of shares
Nil
Options
The following options were issued to directors at the 2023 Annual General Meeting under the
Company's Long-Term Incentive plan.
Name
No of Options
Alan Sparks
2,000,000
Garrison Huang
4,000,000
Guy Polak
1,000,000
c. Loans from key management personnel and their related parties
Details of loans from Directors of Harris Technology Group Limited and other key management
personnel of the Group, including their close family members and entities related to them, are set
out below:
($)
2024
2023
Name of director
Garrison Huang
1,728,447
2,250,918
Harris Technology Group Limited 2024 Annual Report 20
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
Remuneration Report (Cont.) (Audited)
d. Other transactions and balances with key management personnel and their related parties
All transactions were made on normal commercial terms and conditions and at market rates unless
otherwise stated.
2024
2023
$
$
Purchases from entities controlled by KMP and their related parties
Rental of office and warehouse buildings 1
177,978
171,400
Interest expense on directors’ loans 2
107,113
89,289
Directors’ Salaries
202,172
105,998
Total related party purchases
487,263
366,687
1. Rental to GWH Trust an entity controlled by Garrison Huang.
2. The Group accrued $107,113 interest expense in FY23 for loans from Garrison Huang and his controlling
entities. (2023: $89,289)
Harris Technology Group Limited 2024 Annual Report 21
Directors’ Report
(FOR THE YEAR ENDED 30 JUNE 2024)
Tax consolidation
Harris Technology Group and its 100% owned subsidiaries are part of an income tax consolidated
group.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the
financial year by the auditor are outlined in note 29 to the consolidated financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the
auditor (or by another person or firm on the auditor's behalf), is compatible with the general standard
of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 29 to the consolidated financial
statements do not compromise the external auditor's independence requirements of the
Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact
the integrity and objectivity of the auditor; and
●
none of the services undermine the general principles relating to auditor independence as
set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting
Professional and Ethical Standards Board, including reviewing or auditing the auditor's own
work, acting in a management or decision-making capacity for the company, acting as
advocate for the company or jointly sharing economic risks and rewards.
Rounding of amounts
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian
Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been
rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in
certain cases, the nearest dollar.
Auditor’s independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations
Act 2001 is set out immediately after this director’s report.
Signed in accordance with a resolution of the Directors.
Alan Sparks-Chairman
29th August 2024
Harris Technology Group Limited 2024 Annual Report 22
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF HARRIS TECHNOLOGY
GROUP LIMITED
As lead auditor, I declare that, to the best of my knowledge and belief, during the year ended 30 June 2024
there have been:
i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in
relation to the audit, and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.
SW Audit
Chartered Accountants
Nick Michael
Partner
Melbourne, 29 August 2024
Harris Technology Group Limited 2024 Annual Report 23
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
(FOR THE YEAR ENDED 30 JUNE 2024)
Notes
2024
2023
$
$
Sales revenue
7 (a)
16,708,641
24,185,555
Direct costs
(11,843,715)
(20,427,911)
Gross profit
4,864,926
3,757,644
Other income
7 (b)
9,353
6,397
Expenses
Sales transaction expenses
8 (b)
(2,663,860)
(2,905,760)
Employee, contractor and director expenses
(2,159,783)
(2,089,968)
Distribution expenses
(496,015)
(484,726)
Legal, administration and registry expenses
(362,042)
(308,323)
Depreciation expenses
8 (a)
(167,143)
(170,170)
Finance costs
8 (c)
(185,561)
(168,861)
Technology expenses
(143,999)
(107,170)
Marketing expenses
(48,238)
(34,655)
Foreign exchange (loss)/gain
4,743
(4,205)
Other expenses
(59,175)
(10,484)
(6,281,073)
(6,284,322)
Loss before income tax for the year
(1,406,794)
(2,520,281)
Income tax expense
9
-
(783,392)
Loss after income tax for the year
(1,406,794)
(3,303,673)
Other comprehensive income for the year
-
-
Total comprehensive income/(loss) for the year
(1,406,794)
(3,303,673)
Earnings per share from profit
- Basic earnings per share
10
(0.47)
(1.10)
- Diluted earnings per share
10
(0.47)
(1.10)
Harris Technology Group Limited 2024 Annual Report 24
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(AS AT 30 JUNE 2024)
Notes
2024
$
2023
$
Current Assets
Cash and cash equivalents
11
974,318
1,766,018
Trade and other receivables
12
1,132,511
1,443,007
Inventories
13
3,281,219
4,747,855
Prepayments and deposits
14
552,574
234,200
Total Current Assets
5,940,622
8,191,080
Non-current Assets
Property, plant and equipment
15
79,851
111,268
Right-of-use assets
16
1,281,007
1,416,823
Intangible assets
9,491
9,320
Deferred tax assets
9
-
-
Total Non-current Assets
1,370,349
1,537,411
Total Assets
7,310,971
9,728,491
Current Liabilities
Trade and other payables
17
2,330,523
2,724,345
Borrowings
18
333,300
444,000
Lease liabilities
19
132,789
124,779
Employee benefit liabilities
20
132,355
132,720
Total Current Liabilities
2,928,967
3,425,844
Non-current Liabilities
Borrowings
18
1,395,147
1,806,918
Lease liabilities
19
1,296,290
1,401,562
Employee benefit liabilities
20
114,756
111,562
Total Non-current Liabilities
2,806,193
3,320,042
Total Liabilities
5,735,160
6,745,886
Net Assets
1,575,811
2,982,605
Equity
Contributed equity
21
17,590,784
17,590,784
Accumulated losses
22
(16,014,973)
(14,608,179)
Total Equity
1,575,811
2,982,605
Harris Technology Group Limited 2024 Annual Report 25
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(FOR THE YEAR ENDED 30 JUNE 2024)
Share Capital
Reserves
Accumulated
Losses
Total Equity
$
$
$
$
At 1 July 2023
17,590,784
-
(14,608,179)
2,982,605
Loss for the year
-
-
(1,406,794)
(1,406,794)
Other comprehensive income
-
-
-
-
Total comprehensive income/(loss)
-
-
(1,406,794)
(1,406,794)
At 30 June 2024
17,590,784
-
(16,014,973)
1,575,811
Share Capital
Reserves
Accumulated
Losses
Total Equity
$
$
$
$
At 1 July 2022
17,590,784
-
(11,304,506)
6,286,278
Loss for the year
-
-
(3,303,673)
(3,303,673)
Other comprehensive income
-
-
-
-
Total comprehensive income/(loss)
-
-
(3,303,673)
(3,303,673)
Contributions to equity (net of equity
raising costs)
-
-
-
Share based payment transactions
-
-
-
At 30 June 2023
17,590,784
-
(14,608,179)
2,982,605
Harris Technology Group Limited 2024 Annual Report 26
CONSOLIDATED STATEMENT OF CASH FLOWS
(FOR THE YEAR ENDED 30 JUNE 2024)
2024
2023
Notes
$
$
Cash flows from operating activities
Receipts from customers
16,773,443
25,381,722
Payments to suppliers and employees
(16,768,424)
(24,901,537)
Interest received
8,659
5,331
Net cash flows provided by/ (used in) operating activities
11
13,678
485,516
Cash flows from investing activities
Payments for plant and equipment
(5,822)
(22,956)
Net cash flows used in investing activities
(5,822)
(22,956)
Cash flows from financing activities
Repayment of borrowings
(621,578)
(914,493)
Repayment of lease liabilities
(177,978)
(167,852)
Net cash flows (used in)/ provided by financing activities
(799,556)
(1,082,345)
Net (decrease) in cash and cash equivalents
(791,700)
(619,785)
Cash and cash equivalents at the beginning of the financial
year
1,766,018
2,385,803
Cash and cash equivalents at the end of the financial year
974,318
1,766,018
Harris Technology Group Limited 2024 Annual Report 27
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
1.
CORPORATE INFORMATION
The consolidated financial report of Harris Technology Group Limited (the Company or Harris Technology
Group) and controlled entities (the Group) for the year ended 30 June 2024 was authorised for issue in
accordance with a resolution of the Directors on 28th August 2024.
Harris Technology Group is a company limited by shares incorporated in Australia whose shares are publicly
traded on the Australian Securities Exchange.
2.
SUMMARY OF MATERIAL ACCOUNTING POLICIES
Basis of preparation
These general-purpose financial statements of the Group have been prepared in accordance with the
Corporations Act 2001, Australian Accounting Standards and Interpretations of the Australian Accounting
Standards Board (AASB), and the Company’s Constitution. The Group is a for-profit entity for financial reporting
purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of
the financial statements are presented below and have been consistently applied unless stated otherwise.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in
financial statements containing relevant and reliable information about transactions, events and conditions.
The financial report also complies with International Financial Reporting Standards (IFRS) as issued by the
International Standards Board.
The financial statements, except for the cash flow information, have been prepared on an accruals basis and
are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-
current assets, financial assets and financial liabilities.
The functional currency of the Group is measured using the currency of the primary economic environment in
which the entity operates. The financial statements are presented in Australian dollars which is the entity’s
functional and presentation currency and is rounded to the nearest dollar.
Where necessary, comparative information has been reclassified and repositioned for consistency with current
year disclosures.
Harris Technology Group Limited 2024 Annual Report 28
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
2.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
Accounting policies
(a)
Going concern
As disclosed in the consolidated financial statements, the Group made a loss of $1,406,794 (2023: loss of
$3,303,673) and had net cash inflow from operating activities of $13,678 (2023: net cash inflows of $485,516)
for the year ended 30 June 2024. These conditions indicate a significant or material uncertainty about the
consolidated Group’s ability to continue as a going concern.
The Directors believe that there are reasonable grounds to believe that the Group will be able to continue as
a going concern, after consideration of the following factors:
The CEO, Mr Garrion Huang has committed a total facility of $4 million, of which 1.73 million has
been utilised as at year end. The facility is valid for 12 months from the date of signing of these
financial statements;
The Group has prepared budgets and cash flow forecasts for the next 12 months from the date of this
report which indicate the Group will have a positive cash balance during this year;
The Group is managing its cash flow and negotiating with creditors as needed;
Active management of the current level of discretionary expenditure; and
Raising additional working capital through the issue of debt or equity securities and/or other funding.
This financial report does not include any adjustments relating to the recoverability and classification of
recorded asset amounts or to the amounts and classification of liabilities that might be incurred should the
consolidated entity not continue as a going concern.
(b)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at
30 June 2024. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group has:
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities
of the investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated
statement of profit or loss and other comprehensive Income from the date the Group gains control until the
date the Group ceases to control the subsidiary.
Harris Technology Group Limited 2024 Annual Report 29
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
2.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(b)
Basis of consolidation (continued)
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income,
expenses and cash flows relating to transactions between members of the Group are eliminated in full on
consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it:
De-recognises the assets (including goodwill) and liabilities of the subsidiary;
De-recognises the carrying amount of any non-controlling interests;
De-recognises the cumulative translation differences recorded in equity;
Recognises the fair value of the consideration received;
Recognises the fair value of any investment retained;
Recognises any surplus or deficit in profit or loss; and
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained
earnings, as appropriate, as would be required if the Group had directly disposed of the related assets
or liabilities.
(c)
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to
be entitled in exchange for transferring goods or services to a customer. For each contract with a
customer, the Group: identifies the contract with a customer; identifies the performance obligations in
the contract; determines the transaction price which takes into account estimates of variable
consideration and the time value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each distinct good or service to be
delivered; and recognises revenue when or as each performance obligation is satisfied in a manner
that depicts the transfer to the customer of the goods or services promised.
Harris Technology Group Limited 2024 Annual Report 30
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
2.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(c)
Revenue recognition (continued)
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such
as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other
contingent events. Such estimates are determined using either the 'expected value‘' or 'most likely ’mount'
method. The measurement of variable consideration is subject to a constraining principle whereby revenue
will only be recognised to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty
associated with the variable consideration is subsequently resolved. Amounts received that are subject to the
constraining principle are recognised as a refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the
goods. Dependent on the terms of the specific contract the transfer of control occurs either upon despatch or
upon delivery.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
(d)
Foreign currencies
Functional and presentation currency
The financial statements of each entity are measured using its functional currency, which is the currency of the
primary economic environment in which that entity operates. The consolidated financial statements are
presented in Australian dollars, as this is the parent entity’s functional and presentation currency.
Transactions and balances
Transactions in foreign currencies of entities within the Group are translated into functional currency at the
rate of exchange ruling at the date of the transaction.
Foreign currency monetary items that are outstanding at the reporting date (other than monetary items arising
under foreign currency contracts where the exchange rate for that monetary item is fixed in the contract) are
translated using the spot rate at the end of the financial year.
Resulting exchange differences arising on settlement or re-statement are recognised as revenues and expenses
for the financial year.
Harris Technology Group Limited 2024 Annual Report 31
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
2.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(d)
Foreign currencies (continued)
Group companies
The financial statements of foreign operations whose functional currency is different from the Group’s
presentation currency are translated as follows:
Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
Income and expenses are translated at average exchange rates for the year; and
All resulting exchange differences are recognised as a separate component of equity.
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s foreign
currency translation reserve as a separate component of equity in the reserve account.
(e)
Income tax and other taxes
Current income tax expense is the tax payable on the current year’s taxable income. This is based on the
applicable income tax rate adjusted by changes in deferred tax assets and liabilities.
Deferred tax assets and liabilities are recognised for temporary differences between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. No deferred tax asset or liability is recognised
in relation to temporary differences arising from the initial recognition of an asset or a liability if they arose in
a transaction, other than a business combination, that at the time of the transaction did not affect either
accounting profit or taxable profit or loss.
Deferred tax assets are recognised for temporary differences and unused tax losses only when it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised
directly in equity.
Tax consolidation
Harris Technology Group Limited and its wholly owned subsidiaries have formed an income tax consolidated
group under tax consolidation legislation.
The head entity, Harris Technology Group Limited and the controlled entities in the tax consolidated group
continue to account for their own current and deferred tax amounts. The Group has applied the group
allocation approach in determining the appropriate amount of current taxes and deferred taxes to allocate to
members of the tax consolidated group.
Harris Technology Group Limited 2024 Annual Report 32
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
2.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(e)
Income tax and other taxes (continued)
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as
amounts receivable from or payable to other entities in the Group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding
agreement are recognised as a contribution to (or distribution from) wholly owned tax consolidated entities.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
When the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part
of the expense item as applicable.
Receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the consolidated statement of financial position.
Cash flows are included in the consolidated statement of cash flows on a gross basis and the GST
component of cash flows arising from investing and financing activities, which is recoverable from, or
payable to, the taxation authority is classified as part of operating cash flows.
(f)
Cash and cash equivalents
Cash and cash equivalents include cash on hand and at banks, short-term deposits with an original maturity of
three months or less held at call with financial institutions and bank overdrafts. Bank overdrafts are shown
within short-term borrowings in current liabilities on the consolidated statement of financial position.
Cash and cash equivalents also include amounts collected in respect of online sales during the year by agents
on behalf of the Group where clear title of ownership exists.
(g)
Trade and other receivables
Trade receivables are initially recognised at transaction value and subsequently measured at amortised cost
using the effective interest method, less any allowance for expected credit losses. Trade receivables are
generally due for settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based
on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Harris Technology Group Limited 2024 Annual Report 33
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
2.
SUMMARY OF MATEIRAL ACCOUNTING POLICIES (CONTINUED)
(h)
Inventories
Inventories, consisting of products available for sale, are primarily accounted for using the latest purchase price
method, and are valued at the lower of cost or net realisable value. Inventories are recorded at weighted
average cost basis.
This valuation requires the Group to make judgements, based on currently available information, about the
likely method of disposition and expected recoverable values of each disposition category.
Volume rebates in relation to purchases are recognised in cost of sales when credited by the supplier.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost
necessary to make the sale.
Harris Technology Group Limited 2024 Annual Report 34
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
2.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)(i)
(i) Intangibles assets other than goodwill (continued)
Impairment of other intangible assets
Other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.
Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which
the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-
use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate
specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent
cash flows are grouped together to form a cash-generating unit.
(j)
Property, plant and equipment
Property, plant and equipment is stated at cost, net of accumulated depreciation and / or any accumulated
impairment losses, if any.
The carrying amount of plant and equipment is reviewed for impairment annually by the Directors for events
or changes in circumstances that indicate the carrying value may not be recoverable. If any such indication
exists and where the carrying value exceeds the estimated recoverable amount, the assets are written down to
their recoverable amount.
Depreciation
The depreciable amounts of fixed assets are depreciated on a straight-line basis over their estimated useful
lives of the assets as follows:
Office and warehouse equipment
5 years
Furniture and fixtures
5 years
In the case of leasehold property, expected useful lives are determined by reference to comparable owned
assets or over the term of the lease, if shorter.
Harris Technology Group Limited 2024 Annual Report 35
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
2.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(k)
Impairment of property, plant, equipment, goodwill and intangible assets
The Group assesses at each reporting date whether there is an 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 or value in use, to the asset’s carrying value. Any excess of
the asset’s carrying value over its recoverable amount is expensed to the consolidated statement of profit and
loss and other comprehensive income, unless the asset is carried at revalued amount in which case the
impairment loss is treated as a revaluation decrease.
(l)
Right-of-use-assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at
cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments
made at or before the commencement date net of any lease incentives received, any initial direct costs incurred,
and, except where included in the cost of inventories, an estimate of costs expected to be incurred for
dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of
the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use
assets are subject to impairment or adjusted for any re measurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are
expensed to profit or loss as incurred.
Harris Technology Group Limited 2024 Annual Report 36
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
2.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(m)
Financial instruments
Classification
The Group classifies its financial instruments in the following categories: loans and receivables and financial
liabilities. The classification of investments depends on the purpose for which the investments were acquired.
Management determines the classification of its investments at initial recognition.
Financial liabilities
The Group’s financial liabilities include trade payables, other payables and loans from third parties including
inter-company balances and loans from or other amounts due to director-related entities.
The Group’s financial liabilities are recognised at fair value and carried at amortised cost, comprising original
debt less principal payments and amortisation.
(n)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year and which are unpaid. Due to their short term nature they are measured at amortised cost and
are not discounted. The amounts are unsecured and are usually paid within 30-60 days of recognition.
(o)
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at
the present value of the lease payments to be made over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate.
Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that
depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of
a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated
termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in
the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a
rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a
lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss
if the carrying amount of the right-of-use asset is fully written down.
(p)
Provisions
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the
most reliable evidence available at the reporting date, including the risks and uncertainties associated with the
present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be
required at settlement is determined by considering the class of obligations as a whole.
Harris Technology Group Limited 2024 Annual Report 37
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
2.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(q)
Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, and annual leave that are expected to be
settled wholly within 12 months of the reporting date are recognised in respect of employees’ services up to
the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.
Expenses for non-accumulating sick leave are recognised when the leave is taken and are measured at the
rates paid or payable. All other short-term employee benefit obligations are presented as payables.
The liability for long service leave is recognised and measured as the present value of expected future payments
to be made in respect of services provided by employees up to the reporting date using the projected unit
credit method. Consideration is given to expect future wage and salary levels, experience of employee
departures, and periods of service. Expected future payments are discounted using market yields at the
reporting date on national government bonds with terms to maturity and currencies that match, as closely as
possible, the estimated future cash outflows.
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
(r)
Share based payments
Equity settled transactions
The Group provides benefits to the directors, senior executives and the employees in the form of share
options/performance rights under Harris Technology Group’s Long Term Incentive Plan. These are equity
settled transactions under Australian Accounting Standards.
The cost of these equity-settled transactions with directors and senior executives is measured by reference to
the fair value of the equity instruments at the date when the grant is made using an appropriate valuation
model. The cost is recognised together with a corresponding increase in other capital reserve in equity over
the period in which the performance and / or service conditions are fulfilled.
Harris Technology Group Limited 2024 Annual Report 38
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
2.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(s)
Share based payments (Cont.)
Equity settled transactions (Cont.)
The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of
equity instruments that will ultimately vest.
In valuing equity-settled transactions, no account is taken of any non-market vesting conditions.
The charge to the consolidated statement of profit and loss and other comprehensive income for the year is
the cumulative amount as calculated less the amounts already charged in previous periods. There is a
corresponding entry to equity.
No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions for
which vesting are conditional upon a market or non-vesting condition. These are treated as vesting irrespective
of whether or not the market or non-vesting condition is satisfied, provided that all other performance and /
or service conditions are satisfied.
(t)
Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent divided by the
weighted average number of ordinary shares.
Diluted earnings per share is calculated as net profit attributable to members of the parent, divided by the
weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standard Board (“AASB”) that are mandatory for the current reporting period.
There were no standards adopted in the current period that had a material impact on the Group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Harris Technology Group Limited 2024 Annual Report 39
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
New Accounting Standards and Interpretations not yet mandatory or early adopted
AASB 18 - This Standard will replace AASB 101 ( Presentation of Financial Statements ) and will improve how
entities communicate in their financial statements, with a particular focus on information about financial
performance in the statement of profit or loss. There are also limited changes to the presentation of the
statement of financial position and the statement of cash flow. The key presentation and disclosure
requirements established by AASB 18 are:
the presentation of newly defined subtotals in the statement of profit or loss;
the disclosure of management-defined performance measures; and
enhanced requirements for grouping information (i.e. aggregation and disaggregation).
These new requirements will enable investors and other financial statement users to make more informed
decisions, including better allocations of capital, that will contribute to long-term financial stability. (Effective
for annual reporting periods beginning on or after 1 January 2027)
3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise cash, trade and other receivables, trade and other
payables.
The Group manages its exposure to key financial risks, including interest rate risk in accordance with the
Group’s financial risk management policy. The objective of the policy is to support the delivery of the Group’s
financial targets whilst protecting future financial security.
The main risks arising from the Group’s financial instruments are interest rate risk, currency risk, credit risk and
liquidity risk. The Group uses different methods to measure and manage different types of risks to which it is
exposed. These include monitoring levels of exposure to interest rate risk and assessments of market forecasts
for interest rates. Derivative financial instruments are used by the Group to hedge exposure to exchange rate
risk associated with foreign currency transactions. Ageing analyses and monitoring of specific credit allowances
are undertaken to manage credit risk. Liquidity risk is monitored through the development of future rolling
cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews
and agrees policies for managing each of the risks identified below, including the setting of limits for interest
rate risk, hedging limits, credit allowances and future cash flow forecast projections.
Harris Technology Group Limited 2024 Annual Report 40
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
Risk exposures and responses
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s financial
assets at floating interest rates and debt obligations with a fixed interest rate. At reporting date, the Group had
the following financial instruments exposed to Australian variable interest rate risk.
2024
$
2023
$
Financial assets
Cash and cash equivalents (non-interest bearing)
974,318
1,766,018
Financial liabilities
Interest bearing liabilities – fixed rate (current)
(1,728,447)
(2,250,918)
Net exposure
(754,129) (484,901)
To minimise the exposure to credit risk for financial liabilities, the Group entered into a fixed rate contract for
the finance facility. Accordingly, the financial liabilities are assessed as having a low credit risk.
Harris Technology Group Limited 2024 Annual Report 41
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
3.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Risk exposures and responses (continued)
Interest rate risk (continued.)
The Group constantly analyses its interest rate exposure. Within this analysis consideration is given to potential
renewals of existing positions, alternative financing and the mix of fixed and variable interest rates.
The Group has no material interest rate risk exposure.
Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and trade
and other receivables. The Group’s exposure to credit risk arises from potential default of the counterparty,
with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is
addressed in each applicable note.
It is the Group’s policy that all customers who wish to trade on credit terms are assessed as to creditworthiness,
including an assessment of their independent credit rating, financial position, past experience and industry
reputation. Risk limits are set for individual customers.
The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount,
net of any provisions for impairment of those assets, as disclosed in the consolidated statement of financial
position and notes to the consolidated financial statements. The Group has adopted a lifetime expected loss
allowance in estimating expected credit losses to trade receivables through the use of a provisions matrix using
fixed rates of credit loss provisioning. These provisions are considered representative across all customers of
the Group based on recent sales experience, historical collection rates and forward-looking information that is
available.
Harris Technology Group Limited 2024 Annual Report 42
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
3.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Foreign currency risk
The Group’s exposure to currency risk is minimal at this stage of its operations.
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of
private equity facility and equity raisings.
As at 30 June 2024, 22% of the Group’s financial liabilities will mature in less than one year (2023: 78%).
The table below reflects all contractually fixed payables and receivables for settlement, repayments and interest
resulting from recognised financial assets and liabilities. The respective undiscounted cash flows for the
respective upcoming fiscal periods are presented. Cash flows for financial assets and liabilities without fixed
amount or timing are based on the conditions existing at 30 June 2024.
The remaining contractual maturities of the Group’s financial assets and liabilities are:
Year ended 30 June 2024
< 1 year
1-2 years
2-5 years
> 5 years
Total
$
$
$
$
$
Financial assets
Cash and cash equivalents
974,318
-
-
-
974,318
Trade and other receivables
1,132,511
-
-
-
1,132,511
Total
2,106,829
-
-
-
2,106,829
Financial liabilities
Trade and other payables
(2,330,523)
-
-
-
(2,330,523)
Lease liabilities
(179,226)
(369,278)
(582,077)
(298,498)
(1, 429,079)
Related party loans
(333,300)
(1,395,147)
-
-
(1,728,447)
Total
(2,843,049)
(1,764,425)
(582,077)
(298,498)
(5,488,049)
Net maturity
(736,220)
(1,764,425)
(582,077)
(298,498)
(3,381,220)
Harris Technology Group Limited 2024 Annual Report 43
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
3.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
The remaining contractual maturities of the Group’s financial assets and liabilities are:
Year ended 30 June 2023
< 1 year
1-2 years
2-5 years
> 5 years
Total
$
$
$
$
$
Financial assets
Cash and cash equivalents
1,766,018
-
-
-
1,766,018
Trade and other receivables
1,443,007
-
-
-
1,443,007
Total
3,209,025
-
-
-
3,209,025
Financial liabilities
Trade and other payables
(2,724,345)
-
-
-
(5,966,987)
Lease liabilities
(124,779)
(354,938)
(559,474)
(487,150)
(1,526,341)
Related party loans
(2,250,918)
-
-
-
(2,250,918)
Total
(5,100,042)
(354,938)
(559,474)
(487,150)
(6,501,604)
Net maturity
(1,891,017)
(354,938)
(559,474)
(487,150)
(3,292,579)
Maturity analysis of financial assets and liabilities based on management’s expectation.
Management’s expectation reflects a balanced view of cash inflows and outflows. The Group’s assets mainly
consist of cash and trade receivables with the liabilities consisting of trade payables from the ongoing
operations of the business. To monitor existing financial assets and liabilities as well as to enable an effective
controlling of funding for the business, the Group has established risk that reflects expectations of
management in terms of expected settlement of financial assets and liabilities.
All financial assets and most liabilities are payable within 12 months of reporting date. Accordingly, the book
value of each liability is equivalent to its fair value.
The liabilities due after 12 months are loans with fixed interest rate. The carrying values of these loans are
equivalent to their fair value.
4.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the Group’s consolidated financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and
the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions
and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or
liabilities affected in future years.
Harris Technology Group Limited 2024 Annual Report 44
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
4.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
Judgements
In the process of applying the Group’s accounting policies, management has made the following judgements,
which have the most significant effect on the amounts recognised in the consolidated financial statements:
Revenue recognition
The Directors have utilised judgement in determining the point of transfer of control to customers under each
revenue contact. Judgment is required as there are multiple criteria to be assessed when determining the point
of transfer of control of goods to customers.
Deferred tax assets
The Directors have utilised judgement in determining whether sufficient future taxable profits are probable
against which to offset unutilised tax losses and temporary differences.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities
within the next financial year, are described below. The Group based its assumptions and estimates on
parameters available when the consolidated financial statements were prepared. Existing circumstances and
assumptions about future developments, however, may change due to market changes or circumstances
arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.
Provision for obsolescence of inventories
Inventory provisions are recognised for slow-moving and unsalable inventory and are reviewed on a regular
basis. In determining inventory provisions, the Group reviews the aging and the category of the inventory in
order to make appropriate provisions to reflect the slow-moving risk of the inventory. Categories are
determined based on stock turnover rates. Progressively higher provisions are applied as inventory turnover
rates decrease. This methodology is significantly affected by the forecasted needs for inventory
Expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based
on the lifetime expected credit loss, grouped based on days overdue, assumptions include recent sales
experience, historical collection rates, the impact of the Coronavirus (COVID-19) pandemic and forward-
looking information that is available. The allowance for expected credit losses is disclosed in note 12.
Volume rebates
Volume rebates in relation to purchases are recognised in cost of sales when the corresponding inventory is
sold. Estimation is required with respect to which inventory items volume rebates are allocated to in
determining the cost of sales.
Harris Technology Group Limited 2024 Annual Report 45
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
5.
PARENT ENTITY INFORMATION
Information relating to Harris Technology Group Limited –
Parent
2024
2023
$
$
Current Assets
3,402
3,465
Non-Current Assets
6,565,445
8,947,512
Total Assets
6,568,847
8,905,976
Current Liabilities
(335,078)
(614,624)
Non-Current Liabilities
(1,967,136)
(1,826,582)
Total Liabilities
(2,302,214)
(2,441,207)
Net Assets
4,266,634
6,509,770
Contributed equity
18,835,613
18,835,613
Accumulated losses
(14,568,979)
(12,325,843)
Total equity
4,266,634
6,509,770
Total comprehensive profit/(loss) of the parent entity
(2,243,136)
(2,929,284)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries.
The parent entity and some of its subsidiaries are party to a deed of cross guarantee under which each company
guarantees the debts of the others. No deficiencies of assets exist in any of these subsidiaries.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed
in note 2, except for the following:
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its
receipt may be an indicator of an impairment of the investment.
6.
CONTINGENCIES OF THE PARENT ENTITY
The parent entity has no contingent liabilities as at 30 June 2024 (2023: Nil).
The parent entity has no capital commitments for property, plant and equipment as at 30 June 2024 (2024:
Nil).
Harris Technology Group Limited 2024 Annual Report 46
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
7.
REVENUE
7 (a) Sales revenue
2024
2023
$
$
Sale of goods ( Point time )
16,708,641
24,185,555
Total sales revenue
16,708,641
24,185,555
7 (b) Other income
2024
2023
$
$
Interest received
8,659
5,331
Sundry income
694
1,066
Total other income
9,353
6,397
8.
EXPENSES
8 (a) Depreciation and amortisation expenses
2024
2023
$
$
Property, plant and equipment
31,327
29,331
Right-of-use assets
135,816
140,839
Total depreciation and amortisation expenses
167,143
170,170
8 (b) Transaction expenses
2024
2023
$
$
Selling expenses
2,663,280
2,904,174
Bank fees
579
1,586
Total transaction expenses
2,663,860
2,905,760
8 (c) Finance costs
2024
2023
$
$
Interest expenses – related party loans
107,113
89,289
Interest expense – ROU liability
78,448
79,572
Total finance costs
185,561
168,861
Harris Technology Group Limited 2024 Annual Report 47
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
9.
INCOME TAX
2024
$
2023
$
Current tax
-
-
Deferred tax
-
(783,392)
Income tax expense
-
(783,392)
A reconciliation between tax expense and the product of
accounting profit/(loss) before income tax multiplied by
the Group’s applicable income tax rate is as follows:
Profit/(loss) before income tax expense
(1,406,794)
(2,520,281)
At the Group’s statutory income tax rate of 25% (2024:
25%)
(351,698)
(630,070)
Tax effect amounts which are not deductible / (taxable) in
calculating taxable income:
17,919
(46,187)
Deferred tax assets not recognised – current year
333,779
676,257
Deferred tax assets prior year - reversed
-
(783,392)
Income tax expense
-
(783,392)
Deferred Tax Asset recognition
The Directors have determined it is not probable there is sufficient future taxable profits against which to offset
unutilised tax losses and temporary differences as at 30 June 2024 and consequently have:
Not recognised any deferred tax asset on losses incurred during the year.
The assessment of the probability of sufficient future taxable profits will be re-assessed at each reporting date.
The total sum of losses not recognised for a deferred tax asset at 30 June 2024 is $7,550,019
Reconciliation of unutilised losses
2024
$
2023
$
Brought forward
6,214,902
3,509,875
Current year tax loss
1,335,116
2,705,027
Carried forward
7,550,018
6,214,902
Harris Technology Group Limited 2024 Annual Report 48
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
10.
EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net profit for the year attributable to ordinary equity holders
of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share is calculated by dividing the net profit for the year attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares outstanding during the year plus
the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive
potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the calculations of basic and diluted earnings per
share:
2024
2023
Basic and diluted earnings per share (cents)
Basic and diluted earnings per share
(0.47)
(1.10)
Basic and diluted earnings per share from total
comprehensive income
(0.47)
(1.10)
Total comprehensive profit for the year ($)
(1,406,794)
(3,303,673)
Weighted average number of ordinary shares used in calculating
basic earnings per share
299,135,481
299,135,481
Weighted average number of ordinary shares used in calculating
diluted earnings per share
299,135,481
299,135,481
As at 30 June 2024 and 30 June 2023 the issue of potential ordinary shares was assessed to be non-dilutive
and consequently diluted earnings per share is equal to basic earnings per share.
Harris Technology Group Limited 2024 Annual Report 49
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
11.
CASH AND CASH EQUIVALENTS
2024
2023
$
$
Cash at bank and on hand
974,318
1,766,018
Total cash and cash equivalents
974,318
1,766,018
Reconciliation of net profit/(loss) after tax to net operating
cash flows
2024
$
2023
$
Net (loss) after tax
(1,406,794)
(3,303,673)
Non-cash items
Decrease in deferred taxes
-
783,392
Interest expenses
185,561
168,861
Depreciation and amortisation
167,143
170,170
TOTAL non-cash items
352,704
1,122,423
Changes in operating assets and liabilities
Decrease in trade and other receivables
310,496
949,696
Decrease/(Increase) in prepayments and deposits
(318,374)
50,229
Decrease in inventories
1,466,638
5,040,341
(Decrease) in contract liabilities
-
(156,026)
(Decrease) in trade and other payables
(393,822)
(3,242,642)
Increase in employee benefit liabilities
2,830
25,168
TOTAL changes in operating assets and liabilities
1,067,768
2,666,766
Net cash flows provided by/(used in) operating activities
13,678
485,516
Harris Technology Group Limited 2024 Annual Report 50
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
12.
TRADE AND OTHER RECEIVABLES
2024
$
2023
$
Trade and other receivables
1,180,834
1,491,330
Allowance for expected credit losses
(48,323)
(48,323)
Total trade and other receivables
1,132,511
1,443,007
2024
$
2023
$
Current
30 days
1,138,720
1,275,164
60 days
17,428
85,134
90 days +
24,686
131,032
Total
1,180,834
1,491,330
Trade and other receivables are usually non-interest bearing, unsecured and generally payable on no more
than 30-day terms.
Past due but not impaired
receivables
At balance date no trade and other receivables were past due but not
impaired.
Impaired receivables
At balance date, other than debtors that have been provided for as a doubtful
from the prior year, no other receivables have been determined to be
impaired.
Credit risk
The Group has no significant credit risks identified at 30 June 2024. The sales
of goods receivable balances outstanding are within the terms of the
customer agreements and are considered to be of high credit quality.
Harris Technology Group Limited 2024 Annual Report 51
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
13.
INVENTORIES
2024
2023
$
$
Finished goods
3,556,685
5,361,987
Provision for stock obsolescence
(275,466)
(614,132)
Total inventories
3,281,219
4,747,855
14.
PREPAYMENTS AND DEPOSITS
2024
2023
$
$
Prepayments
552,574
231,337
Deposits
-
2,863
Total prepayments and deposits
552,574
234,200
Harris Technology Group Limited 2024 Annual Report 52
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
15.
PROPERTY, PLANT AND EQUIPMENT
Office and
warehouse
equipment
$
Furniture &
Fixtures
$
Total
$
Gross carrying amount
At 1 July 2023
140,559
17,545
158,104
Additions – assets acquired
2,400
3,251
5,651
Disposal
(9,811)
-
(9,811)
At 30 June 2024
133,148
20,796
153,944
Accumulated Depreciation
At 1 July 2023
42,597
4.239
46,836
Depreciation for the year
25,785
5,542
31,327
Disposal – reversal depreciation
(4,070)
-
(4,070)
At 30 June 2024
64,312
9781
74,093
Net carrying amount
At 30 June 2023
97,962
13,306
111,268
At 30 June 2024
68,836
11,014
79,851
Harris Technology Group Limited 2024 Annual Report 53
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
16.
RIGHT-OF-USE ASSETS
2024
2023
$
$
Buildings right-of-use assets cost
1,683,521
1,683,521
Less: Accumulated depreciation
(402,514)
(266,698)
Carrying value
1,281,007
1,416,823
The Group leases land and buildings for its office and warehouse under an agreement of two further terms of
three years each. Expiry date of the term being 4 May 2026 and renewal 6 months prior to the expiry date of
4 May 2026.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
Buildings
right-of-use
$
Opening carrying value at 30 June 2023
1,416,823
Depreciation expense
(135,816)
At 30 June 2024
1,281,007
17.
TRADE AND OTHER PAYABLES
2024
$
2023
$
Trade payables
2,159,420
2,602,953
Other payables
171,103
121,392
Total trade and other payables
2,330,523
2,724,345
Terms and conditions of the above trade and other payables:
(i)
Trade payables are non-interest bearing and are normally settled on 30 days EOM terms.
(ii)
Other creditors are non-interest bearing and are normally payable within 30 and 90 days.
Fair value
Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value.
Foreign exchange and interest rate risk
Detail regarding foreign exchange and interest rate risk exposure is disclosed in note 3.
Harris Technology Group Limited 2024 Annual Report 54
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
18.
BORROWINGS
2024
$
2023
$
Unsecured
Related party loans (Note 23)
1,728,447
2,250,918
Third party loans
-
-
Total current borrowings
1,728,447
2,250,918
$
$
Opening balance
2,250,918
3,076,122
Interest
107,113
89,289
Non-cash settlement
(8,006)
-
Repayment of borrowings
(621,578)
(914,493)
Closing balance
1,728,447
2,250,918
19.
LEASE LIABILITIES
2024
$
2023
$
Lease liabilities – current
132,789
124,779
Lease liabilities – non-current
1,296,290
1,401,562
Total lease liabilities
1,429,079
1,526,341
Harris Technology Group Limited 2024 Annual Report 55
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
20.
EMPLOYEE BENEFIT LIABILITIES
2024
$
2023
$
Current
Annual leave
105,631
121,139
Long service leave
26,724
11,581
Total current
132,355
132,720
Non-current
Annual Leave
86,091
87,969
Long service leave
28,665
23,593
Total non-current
114,756
111,562
Reconciliations of the liabilities at the beginning and end of the current and previous financial year are set
out below:
Movement in liabilities - Annual Leave
2024
$
2023
$
Opening balance
209,108
158,042
Expense recognition
104,954
76,962
Leave taken
(122,340)
(25,896)
Closing balance
191,722
209,108
Movement in liabilities - Long Service Leave
2024
$
2023
$
Opening balance
35,174
61,072
Expense recognition
22,441
30,670
Leave taken adjustment
(2,226)
(56,568)
Closing balance
55,389
35,174
Harris Technology Group Limited 2024 Annual Report 56
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
21.
CONTRIBUTED EQUITY
Issued and paid-up capital
2024
$
2023
$
Ordinary shares fully paid
(net of equity raising costs)
17,590,784
17,590,784
Contributed equity
17,590,784
17,590,784
Movements in ordinary shares on issue
Number of Shares
$
Opening balance
299,135,481
298,295,481
Shares issued during the year
-
840,000
Closing balance
299,135,481
299,135,481
Terms and conditions of ordinary shares
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company,
to participate in the proceeds from the sale of all surplus assets in proportion to the number and amounts
paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a
meeting of the Company.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating
and healthy capital ratios to support its business and maximise the shareholder’s value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic
conditions. To maintain or adjust the capital structure, the Group may return capital to shareholders or issue
new shares. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus
net debt.
Harris Technology Group Limited 2024 Annual Report 57
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
22.
ACCUMULATED LOSSES
2024
$
2023
$
Balance at beginning of financial year
(14,608,179)
(11,304,506)
Net profit for the year
(1,406,794)
(3,303,673)
Share based payments transfer
-
-
Share based payment adjustment
-
-
Balance at end of financial year
(16,014,973)
(14,608,179)
23.
RELATED PARTY LOANS
The loan balances are set out as below:
2024
$
2023
$
Name of director
Garrison Huang
1,728,447
2,250,918
Total related party loans
1,728,447
2,250,918
The loan facility is secured by a registered mortgage and general security charge over the assets of the
Group. The facility is interest only, with a fixed interest rate of 6% effective from 1 July 2023, matures on 30
September 2025
The loan facility previously had a maturity of 30 September 2024 and was extended 30 September 2025 on
30 June 2024. Mr Huang has committed a total facility of $4M
At 30 June 2024, the Group had access to:
2024
$
2023
$
Cash advance facility
3,000,000
3,000,000
Drawn balance
(1,728,447)
(2,250,918)
Undrawn balance
1,271,553
749,082
24.
COMMITMENTS
The Group has no material commitments as at 30 June 2024 (2023: none) that are not recognised as
liabilities.
25.
CONTINGENT ASSETS AND LIABILITIES
The Group has no contingent assets and no contingent liabilities which require disclosure.
Harris Technology Group Limited 2024 Annual Report 58
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
26.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
No matters or circumstances has arisen since 30 June 2024 that has significantly affected, or may significantly
affect the Group ’s operations, the results of those operations, or the Group ’s state of affairs in future
financial years.
27.
AUDITOR’S REMUNERATION
2024
$
2023
$
Audit and review of the financial report of Group for the year
85,600
80,000
Other services
-
-
Total auditors’ remuneration
85,600
80,000
28.
RELATED PARTY TRANSACTIONS
(a) Subsidiary
The consolidated financial statements include the financial statements of Harris Technology Group Limited and the
subsidiaries listed in the following table:
Name of entity
Country of
Incorporation
% of Equity interest
2024
2023
APCA Trading Pty Ltd
Australia
100
100
Harris Technology Pty Ltd
Australia
100
100
Lincd HQ Pty Ltd
Australia
100
100
(b) Ultimate parent
The consolidated financial statements include the financial statements of Harris Technology Group Limited and its
controlled entities. Harris Technology Group Limited is the ultimate parent company.
(c) Inter-group transactions
Loans
The inter-group entities have provided or received intercompany loans within the group for working capital. The
intercompany loans are repayable to the inter-group entities at call and no interest is payable. At 30 June 2024, those
loans have been eliminated in the consolidated balance sheet.
(d) Other related party transactions
During the financial year ended 30 June 2024, there were a total of $1,728,447 Directors’ loans reported by the period.
Refer to note 23 (2023: $2,250,918). All agreements bear interest at 6% unless otherwise stated.
Refer to section 6d of Remuneration Report for more details relating to other related party transactions.
Harris Technology Group Limited 2024 Annual Report 59
Notes to the Consolidated Financial Statements
(for the Financial Year ended 30 June 2024)
29.
KEY MANAGEMENT PERSONNEL
The total remuneration paid to KMP of the Company and the Group during the year are as follows:
2024
$
2023
$
Short-term employee benefits
202,172
105,998
Post-employment benefits
-
-
Total
202,172
105,998
Short-term employee benefits
These amounts include fees and benefits paid to the non-executive Chair and non-executive directors as well as all
salary, paid leave benefits, fringe benefits and cash bonuses awarded to executive directors and other KMP.
Post-employment benefits
These amounts are superannuation contributions made during the year.
Share-based payments
These amounts represent the expense related to the participation of KMP in equity-settled benefit schemes as
measured by the fair value of the options, rights and shares granted on grant date.
Further information in relation to KMP remuneration can be found in the Directors' Report.
30.
SEGMENT REPORTING
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board
of Directors (who are identified as the Chief Operating Decision Markers (CODM)) in assessing the performance of the
Group and determining investment requirements. The operating segments are based on the manner in which services
are provided to the market.
The Group consists of one business segment which operates in one geographical area, being Australia.
Harris Technology Group Limited 2024 Annual Report 60
DIRECTOR’S DECLARATION
(for the Financial Year ended 30 June 2024)
In accordance with a resolution of the directors of Harris Technology Group Limited and its controlled
entities, I state that:
1. In the opinion of the directors:
(a) the financial statements and notes of Harris Technology Group Limited and its
controlled entities for the financial year ended 30 June 2024 are in accordance with
the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30
June 2024 and of its performance for the year ended on that date; and
(ii) complying with Accounting Standards and the Corporations Regulations 2001;
(b) the financial statements and notes also comply with International Financial Reporting
Standards as disclosed in Note 2(b); and
(c) There are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable.
2. This declaration has been made after receiving the declarations required to be made to the
directors by the chief executive officer in accordance with section 295A of the Corporations
Act 2001 for the financial year ended 30 June 2024.
On behalf of the Board
Alan Sparks
Non-Executive Chairman
29 August 2024
Harris Technology Group Limited 2024 Annual Report 61
DIRECTOR’S DECLARATION
(for the Financial Year ended 30 June 2024)
Harris Technology Group Limited and controlled entities
Consolidated entity disclosure statement
As at 30 June 2024
Entity name
Entity type
Place formed /
Country of
incorporation
Ownership
interest%
Tax residency
APCA Trading Pty Ltd
Body corporate
Australia
100.00%
Australia
Harris Technology Pty
Ltd
Body corporate
Australia
100.00%
Australia
Lincd Pty Ltd
Body corporate
Australia
100.00%
Australia
In accordance with a resolution of the directors of Company Harris Technology Group Limited, the directors of
the company declare that:
1. the financial statements and notes, as set out on pages 23 to 58, are in accordance with the
Corporations Act 2001 and:
comply with Australian Accounting Standards applicable to the entity, which, as stated in accounting
policy Note 1 to the financial statements, constitutes compliance with International Financial Reporting
Standards; and
give a true and fair view of the financial position as at 30th June 2024] and of the performance for the
year ended on that date of the consolidated group;
2. in the directors' opinion there are reasonable grounds to believe that the company will be able to pay
its debts as and when they become due and payable; and
3. the directors have been given the declarations required by section 295A of the Corporations Act 2001
from the Chief Executive Officer and Chief Financial Officer.
The company and a wholly-owned subsidiary, Company ABC Limited, have entered into a deed of cross
guarantee under which the company and its subsidiary guarantee the debts of each other.
At the date of this declaration, there are reasonable grounds to believe that the companies which are party to
this deed of cross guarantee will be able to meet any obligations or liabilities to which they are, or may become,
subject to by virtue of the deed.
4. the information disclosed in the attached consolidated entity disclosure statement is true and correct.
(New requirement)
On behalf of the Board
Alan Sparks
Non-Executive Chairman
29 August 2024
Harris Technology Group Limited 2024 Annual Report 62
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF HARRIS TECHNOLOGY GROUP LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Harris Technology Group Limited (the Company) and its subsidiaries
(the Group) which comprises the consolidated statement of financial position as at 30 June 2024, 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
consolidated financial statements, including a summary of material accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of Harris Technology Group Limited is in accordance with
the Corporations Act 2001, including:
a. giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its financial
performance for the year then ended, and
b. complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 2(a) in the financial report, which indicates that the Group incurred a net loss after
tax of $1,406,794 for the year ended 30 June 2024 and had net cash inflows from operating activities of
$13,678 for the year ended 30 June 2024. As stated in Note 2(a), these events or conditions, along with
other matters as set forth in Note 2(a), indicate that a material uncertainty exists that may cast significant
doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this
matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit of
the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Harris Technology Group Limited 2024 Annual Report 63
1. Inventories
Area of focus
How our audit addressed the key audit matter
Refer to Note 4 Significant Accounting Estimates
and Judgements and Note 13 Inventories
The Group’s inventory of $3,281,219 is material to the
financial statements and has decreased by
$1,466,636, from the prior year balance of
$4,747,855.
Inventory is required to be carried at the lower of its
cost and net realisable value. Cost is determined on a
first in first out basis.
The valuation of inventory involves judgement by
management depending on the age and type of
inventory.
Because of the nature of the inventory, being mostly
technological goods, the high level of judgement
involved in determining its net realisable value, and
the significant carrying amounts involved, we have
determined that this is a key audit matter.
Our audit procedures included:
Obtaining an understanding and assessing
key controls over the valuation of inventory
Comparing cost and subsequent sales prices
to ensure inventory was valued at the lower of
cost and net realisable value
Evaluating the aging of inventory and any
inventory that is expected to be slow moving
Assessing the appropriateness of the
inventory provisioning policy adopted by
management
Ensuring costs assigned to inventory were
reasonable
Obtaining an understanding of the methods,
assumptions and data used by management
in determining the need for writing down
inventory to net realisable value
Assessing whether the methods, assumptions
and data were appropriate, and
Assessing the adequacy of the disclosures in
the financial statements in respect of
inventory.
2. Revenue recognition
Area of focus
How our audit addressed the key audit matter
Refer to Note 4 Significant Accounting Estimates
and Judgements and Note 7 Revenue
The Group sales revenue of $16,708,641 is material
to the financial statements and has decreased by
$7,476,914 from the prior year amount of
$24,185,555.
Revenue recognition involves judgement by
management on determining when control passes to
the customer as well as identifying and quantifying
any potential variable consideration.
Because of the complexities involved in applying
AASB 15 Revenue from Contracts with Customers,
and the estimation involved in quantifying variable
consideration, we have determined that this is a key
audit matter.
Our audit procedures included:
Obtaining an understanding of the various
revenue streams and assessing key controls
over revenue recognition
Evaluating whether the Group’s accounting
policy is in line with AASB 15 Revenue from
Contracts with Customers
Obtaining an understanding of the methods,
assumptions and data used by management
in revenue recognition
Assessing whether the methods, assumptions
and data were appropriate
Evaluating the point of transfer of control to
customers
Recalculating variable consideration
components, and
Assessing the adequacy of the disclosures in
the financial statements in respect of revenue
recognition.
Harris Technology Group Limited 2024 Annual Report 64
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2024, 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 Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Harris Technology Group Limited 2024 Annual Report 65
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them, all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats
or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 15 to 20 of the directors’ report for the year
ended 30 June 2024.
In our opinion, the Remuneration Report of Harris Technology Group Limited for the year ended 30 June
2024 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.
SW Audit
Chartered Accountants
Nick Michael
Partner
Melbourne, 29 August 2024
Harris Technology Group Limited 2024 Annual Report 66
Additional Information
In accordance with ASX Listing Rule 4.10, the Company provides the following information to shareholders not
elsewhere disclosed in this Annual Report. The information provided is current as at 2 August 2024 (Reporting
Date).
Corporate Governance Statement
The Company’s Directors and management are committed to conducting the Group’s business in an ethical
manner and in accordance with the highest standards of corporate governance. The Company has adopted
and substantially complies with the ASX Corporate Governance Principles and Recommendations (Third
Edition) (Recommendations) to the extent appropriate to the size and nature of the Group’s operations.
The Company has prepared a statement which sets out the corporate governance practices that were in
operation throughout the financial year for the Company, identifies any Recommendations that have not been
followed, and provides reasons for not following such Recommendations (Corporate Governance Statement).
In accordance with ASX Listing Rules 4.10.3 and 4.7.4, the Corporate Governance Statement will be available
for review on Harris Technology Group Limited’s website (www.ht8.com.au/investor-relations/corporate-
governance) and will be lodged together with an Appendix 4G with ASX at the same time that this Annual
Report is lodged with ASX.
The Appendix 4G will particularise each Recommendation that needs to be reported against by Harris
Technology Group Limited and will provide shareholders with information as to where relevant governance
disclosures can be found.
The Company’s corporate governance policies and charters are all available on Harris Technology Group
Limited’s website (www.ht8.com.au/investor-relations/corporate-governance).
Substantial holders
As at the Reporting Date, the names of the substantial holders of Harris Technology and the number of equity
securities in which those substantial holders and their associates have a relevant interest, as disclosed in
substantial holding notices given to Harris Technology, are as follows:
Holder of Equity
Securities
Class of Equity
Securities
Number of Equity
Securities held
% of total, issued
securities capital
in relevant class
Australian PC
Accessories Pty Ltd
Ordinary Shares
88,440,872
29.56%
Number of holders
As at the Reporting Date, the number of holders in each class of equity securities:
Class of Equity Securities
Number of holders
Fully Paid Ordinary Shares
1,524
Voting rights of equity securities
Harris Technology Group Limited 2024 Annual Report 67
The only class of equity securities on issue in the Company which carries voting rights is ordinary shares.
At a general meeting of Harris Technology, every holder of ordinary shares present in person or by proxy,
attorney or representative has one vote on a show of hands and on a poll, one vote for each ordinary share
held. On a poll, every member (or his or her proxy, attorney or representative) is entitled to vote for each fully
paid share held and in respect of each partly paid share, is entitled to a fraction of a vote equivalent to the
proportion which the amount paid up (not credited) on that partly paid share bears to the total amounts paid
and payable (excluding amounts credited) on that share. Amounts paid in advance of a call are ignored when
calculating the proportion.
Distribution of holders of equity securities
The distribution of holders of equity securities on issue in the Company as at the Reporting Date is as follows:
Distribution of ordinary shareholders
Holdings Ranges
Holders
Total Units
%
1 – 1,000
120
20,299
0.01
1,001 – 5,000
263
1,014,465
0.34
5,001 – 10,000
288
2,315,174
0.77
10,001 – 100,000
633
24,382,728
8.15
100,001 – 9,999,999,999
220
271,402,815
90.73
Totals
1,524
299,135,481
100.00
Less than marketable parcels of ordinary shares (UMP Shares)
There are 99 holders of less than a marketable parcel of ordinary shares based on the closing market price of
1.1c per share at the Reporting Date.
Harris Technology Group Limited 2024 Annual Report 68
Twenty largest shareholders
The Company only has one class of quoted securities, being ordinary shares. The names of the 20 largest
holders of ordinary shares, and the number of ordinary shares and percentage of capital held by each holder
as at 02th August 2024 is as follows:
Name/Address 1
Number
%
AUSTRALIAN PC ACCESSORIES PTY LTD
88,440,872
29.565%
MR KENNETH JOSEPH HALL
14,000,000
4.680%
BNP PARIBAS NOMINEES PTY LTD
12,265,245
4.100%
MR WEIYU ZHANG
12,244,086
4.093%
FU-TIEN LEE
8,216,242
2.747%
CITICORP NOMINEES PTY LIMITED
7,092,844
2.371%
MR JUNJI KAMOSHIDA
5,645,775
1.887%
CHA SHIN CHI INVESTMENT CO LTD
5,488,969
1.835%
MR GARRISON HUANG & MS XIAOYING TANG
4,618,749
1.544%
PING SHEN
4,545,455
1.520%
MISS PING YU
4,136,097
1.383%
CORREIA SUPER INVEST PTY LTD
3,000,000
1.003%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
2,998,626
1.002%
ARIAN PONY PTY LTD
2,500,000
0.836%
FRONTON AUSTRALIA PTY LTD
2,500,000
0.836%
H & J INVESTMENT PTY LTD
2,485,444
0.831%
MS WEILI MA
2,415,602
0.808%
MR RICHARD BLACK
2,000,000
0.669%
MR JIANCHAO WANG
1,900,000
0.635%
EXTRA DIMENSION SOLUTIONS PTY LTD
1,822,075
0.609%
Total Securities of Top 20 Holdings
188,316,081
62.953%
Total of Securities
299,135,481
Disclosure required by ASX Listing Rule 10.14
At the 2023 Annual General Meeting, approval for the issue to directors of the following options was
obtained under Listing Rule 10.14.
Name
Alan Sparks
2,000,000
Garrison Huang
4,000,000
Guy Polak
1,000,000
Harris Technology Group Limited 2024 Annual Report 69