More annual reports from Hitech Group Australia:
2023 ReportHiTech Group Australia Limited
A.B.N. 41 062 067 878
Annual Report 2016
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CONTENTS
Corporate Directory
Chairman’s Report to Shareholders
Corporate Governance Statement
Directors’ Report
Directors’ Declaration
Auditor’s Independence declaration
Independent Audit Report
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the Financial Statements
Stock Exchange Information
Top 20 Shareholders
Notice of Annual General Meeting
Proxy Form
1
2
3-11
12-18
19
20
21-22
23
24
25
25
26-42
43
44
Enclosed
Enclosed
ANNUAL GENERAL MEETING
The Annual General Meeting is to be held at Level 7, 9 Young Street, Sydney on Friday, 25th of
November, 2016 at 4pm.
The notice of meeting has been sent with a proxy form.
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CORPORATE DIRECTORY
HiTech Group Australia Limited’s (“the Company’s”) shares are quoted on the official list of the
Australian Securities Exchange Limited.
The ASX code for the Company’s ordinary fully paid shares is “HIT”.
Directors
Ray Hazouri – Chairman
Elias Hazouri – CEO, Executive director
George Shad – Non-executive director
Company Secretaries
Ray Hazouri
Elias Hazouri
Registered office and principal place of business
Level 7
9 Young Street
Sydney NSW 2000
Telephone: (02) 9241 1919
Facsimile: (02) 9241 1731
Internet: www.hitechaust.com
E-mail:info@hitechaust.com
Share registry
Computershare Investor Services Pty Ltd
Level 3,
60 Carrington Street,
Sydney NSW 2000
Telephone: (02) 8234 5000
Auditors
Raymond Yi Kuen Lee
Suite 272,
Level 2, The Miramar
398-408 Pitt Street
Sydney NSW 2000
Bankers
St George Bank Limited
4-16 Montgomery Street
Kogarah NSW 2217
Page 1 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CHAIRMAN’S REPORT TO SHAREHOLDERS
Dear Shareholder,
It is with pleasure that the directors present this 17th annual report of HiTech Group Australia Limited
(‘HiTech’) since the listing of the company on the Australian Securities Exchange (“ASX”) on 17 April,
2000.
For the financial year ended 30 June 2016, HiTech’s results are at record high:
Operating revenue is $18,322,169, an increase of 21% over the previous corresponding period
(pcp). The high margin permanent placement income was 10% higher and contracting revenue was
23% higher.
Gross Profit is $3,892,918, an increase of 22% over pcp (FY15: $3,180,051). Net profit after taxation
(NPAT) is $2,171,768 (FY15: $807,721) due, mainly,
to an in increase in contracting revenue.
taxes, depreciation and amortization (EBITDA) are $3,139,789 (FY15:
Earnings before interest,
$1,348,972).
Our Net Tangible Assets (NTA) are $0.19 per share, an increase of 58% over pcp (FY15: $0.12).
Cash is $4,408,703, an increase of 140% over pcp (FY15: $1,838,730).
The directors have declared a fully franked dividend of 2 cents per share. The dividend was paid
on 23 September, 2016 to shareholders registered on close of business on 9 September, 2016. Total
amount is $620,000. This represents a dividend yield of 3.6% at the current share price of 55 cents.
The Australian job market, particularly the ICT sector, has seen renewed demand for quality talent.
We have succeeded in retaining our valued clients, winning new business, diversifying and ensuring
that operating costs are kept to a minimum. Throughout FY2016, we have been successful in being
retained as preferred suppliers to additional government departments including the NSW state
government and new Federal Government supply panels. This will provide us with an opportunity to
further diversify our revenue base. We are constantly evolving and improving our systems and
productivity to provide a better service to our valued clients and candidates.
HiTech is more resilient and stronger than ever. We have our strongest balance sheet to date with no
debt which is unique in our industry. We are committed to improving our revenues and profitability.
Our outlook for FY2017 is quite positive and already we see improved results for the first quarter.
Our major revenue is still generated from our core ICT recruitment and contracting business and we
are active in non-ICT areas of recruitment. We have been active in securing clients all around
Australia and international companies to expand our client base.HiTech has a proven business model
that has evolved over the past 23 years. I am confident that our commitment to growth and profitability
will enhance value for all our shareholders in the future.
We are ready to take advantage of market opportunities and potential EPS accretive acquisitions to
increase stakeholder returns. The future for HiTech has never looked brighter. Our results are the
best in our market sector in terms of profitability.
The directors extend their appreciation to all our team members for their efforts during the year,
shareholders, candidates and our valued clients.
Yours sincerely,
Raymond Hazouri
Chairman
28 October 2016
Page 2 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CORPORATE GOVERNANCE STATEMENT
HiTech Group Australia Limited is committed to good corporate governance and disclosure. The
Company has substantially adopted the ASX Corporate Governance Council’s “Corporate
Governance Principles and Recommendations’ (Third edition March 2014) for the entire FY2016
financial year.
Where the ASX Corporate Governance Council’s recommendations have not been adopted by the
Company, this has been identified and explained below.
Complied
Note
1.1 (a) Disclose the respective roles and responsibilities of its board and
Yes
management.
(b) Disclose those matters expressly reserved to the board and those
delegated to management.
1.2 (a) Undertake appropriate checks before appointing a person, or
putting forward to security holders a candidate for election, as a
director; and
(b) Provide security holders with all material information in its
possession relevant to a decision on whether or not to elect or re-elect
a director.
1.3 Have a written agreement with each director and senior executive
setting out the terms of their appointment.
1.4 The company secretary of a listed entity should be accountable
directly to the board, through the chair, on all matters to do with the
proper functioning of the board.
1.5 (a) Have a diversity policy which includes requirements for the board
or a relevant committee of the board to set measurable objectives for
achieving gender diversity and to assess annually both the objectives
and the entity’s progress in achieving.
(b) Disclose the diversity policy or a summary of it.
(c) Disclose as at the end of each reporting period the measurable
objectives for achieving gender diversity set by the board or a relevant
committee of the board in accordance with the entity’s diversity policy
and its progress towards achieving them, and either:
Yes
Yes
Yes
Yes
Yes
No
N/A
N/A
1
1
2
2
2
2
7
(1) the respective proportions of men and women on the board, in
Yes
7
senior executive positions and across the whole organisation
(including how the entity has defined “senior executive” for these
purposes)
(2) if the entity is a “relevant employer” under the Workplace Gender
Equality Act, the entity’s most recent “Gender Equality Indictors”,
as defined in and published under that Act.
1.6 (a) Have and disclose a process for periodically evaluating the
performance of the board, its committees and individual directors; and
(b) Disclose, in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting period in
accordance with that process.
N/A
Yes
Yes
2
2
Page 3 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CORPORATE GOVERNANCE STATEMENT (continued)
Note
Complied
1.7 (a) Have and disclose a process for periodically evaluating the
performance of its senior executives.
(b) Disclose, in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting period in
accordance with that process.
2.1 (a) Have a nomination committee.
(b) If it does not have a nomination committee, disclose that fact and
the processes it employs to address board succession issues and to
ensure that the board has the appropriate balance of skills,
knowledge, experience, independence and diversity to enable it to
discharge its duties and responsibilities effectively.
Yes
Yes
No
Yes
2.2 A listed entity should have and disclose a board skills matrix setting
No
out the mix of skills and diversity that the board currently has or is
looking to achieve in its membership.
2.3 (a) Disclose the names of the directors considered by the board to be
Yes
independent directors,
(b) Disclose if a director has an interest, position, association or
relationship but the board is of the opinion that it does not
compromise the independence of the director, the nature of the
interest, position, association or relationship in question and an
explanation of why the board is of that opinion.
(c) Disclose the length of service of each director.
2.4 A majority of the board of a listed entity should be independent
directors.
2.5 The chair of the board should be an independent director and, in
particular, should not be the same person as the CEO of the entity.
2.6 Have a program for inducting new directors and provide appropriate
professional development opportunities for directors to develop and
maintain the skills and knowledge needed to perform their role as
directors effectively.
3.1 (a) Have a code of conduct for its directors, senior executives and
employees.
(b) Disclose the code of conduct or a summary of it.
Yes
Yes
No
No
Yes
Yes
Yes
2
2
3
3
2
4
4
4
4
5
2
6
6
Page 4 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CORPORATE GOVERNANCE STATEMENT (continued)
Note
Complied
4.1 (a) Have an audit committee which:
(1) has at least three members, all of whom are non-executive
directors and a majority of whom are independent directors;
(2) is chaired by an independent director, who is not the chair of
the board, and disclose:
(3) the charter of the committee;
(4) has the relevant qualifications and experience of the members
of the committee.
(5) In relation to each reporting period, the number of times the
committee met throughout the period and the individual attendances
of the members at those meetings.
(b) If it does not have an audit committee, disclose that fact.
4.2 The board of a listed entity should, before it approves the entity’s
financial statements for a financial period, receive from its CEO and
CFO a declaration that, in their opinion, the financial records of the
entity have been properly maintained and that the financial statements
comply with the appropriate accounting standards and give a true and
fair view of the financial position and performance of the entity and
that the opinion has been formed on the basis of a sound system of
risk management and internal control which is operating effectively.
Yes
No
Yes
Yes
Yes
Yes
N/A
Yes
4.3 Ensure that its external auditor attends its AGM and is available to
answer questions from security holders relevant to the audit.
Yes
5.1 (a) Have a written policy for complying with its continuous disclosure
Yes
obligations under the Listing Rules and
(b) Disclose that policy or a summary of it.
6.1 Provide information about itself and its governance to investors via its
website.
6.2 Design and implement an investor relations program to facilitate
effective two-way communication with investors.
6.3 Disclose the policies and processes it has in place to facilitate and
encourage participation at meetings of security holders.
6.4 Give security holders the option to receive communications from, and
send communications to, the entity and its security registry
electronically.
Yes
Yes
Yes
Yes
Yes
8
8
8
8
8
8
9
8
10
10
10
11
11
11
Page 5 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CORPORATE GOVERNANCE STATEMENT (continued)
Note
Complied
7.1 (a) have a committee or committees to oversee risk, each of which:
(1) has at least three members, a majority of whom are
independent directors; and
(2) is chaired by an independent director, and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the
committee met throughout the period and the individual attendances
of the members at those meetings; or
(b) if it does not have a risk committee or committees that satisfy (a)
above, disclose that fact and the processes it employs for overseeing
the entity’s risk management framework.
Yes
No
Yes
Yes
Yes
Yes
N/A
7.2 (a) Review the entity’s risk management framework at least annually
Yes
to satisfy itself that it continues to be sound
(b) Disclose, in relation to each reporting period, whether such a
review has taken place.
Yes
7.3 (a) if it has an internal audit function, how the function is structured
No
and what role it performs; or
(b) If it does not have an internal audit function, that fact and the
processes it employs for evaluating and continually improving the
effectiveness of its risk management and internal control processes.
Yes
12
12
12
12
12
12
12
12
12
12
7.4 Disclose whether it has any material exposure to economic,
Yes
13
environmental and social sustainability risks and, if it does, how it
manages or intends to manage those risks.
8.1 (a) have a remuneration committee which:
(1) has at least three members, a majority of whom are
independent directors; and
(2) is chaired by an independent director, and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the
committee met throughout the period and the individual attendances
of the members at those meetings; or
(b) if it does not have a remuneration committee, disclose that fact
and the processes it employs for setting the level and composition of
remuneration for directors and senior executives and ensuring that
such remuneration is appropriate and not excessive.
14
No
N/A
N/A
N/A
N/A
N/A
Yes
14
Page 6 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CORPORATE GOVERNANCE STATEMENT (continued)
Complied
Note
8.2 Should separately disclose its policies and practices regarding the
Yes
14
remuneration of non-executive directors and the remuneration of
executive directors and other senior executives.
8.3 A listed entity which has an equity-based remuneration scheme
should:
(a) have a policy on whether participants are permitted to enter into
transactions (whether through the use of derivatives or otherwise)
which limit the economic risk of participating in the scheme; and
Yes
14
(b) Disclose that policy or a summary of it.
Yes
14
Notes
1.
The directors of the Company are accountable to shareholders for the proper management of the
business and affairs of the Company. The role of the board is to approve the strategic direction of
the Group, guide and monitor the management of HiTech in achieving its strategic plans, and
oversee good governance practice.
The express responsibilities of the board include:
•
•
•
•
•
•
establishing, monitoring and reviewing corporate strategies and performance objectives;
appointing and when necessary replacing the CEO, Company Secretary and senior
management;
reviewing the performance and composition of the board and approving board, CEO and
executive succession planning and remuneration frameworks;
approving and monitoring financial reporting and Company performance, including the
external audit and ensuring continuous material disclosure;
approving
raising/restructures;
ensuring that appropriate risk management systems, internal compliance and control,
reporting systems, codes of conduct, and legal compliance measures are in place and
effective; and
dividends, major
expenditure,
acquisitions
capital
capital
and
• monitoring progress in relation to the Company’s diversity objectives and compliance
with its diversity policy.
The managing director and Chief Executive Officer (CEO), Mr. E Hazouri, is a member of the
board. The CEO has responsibility for the day-to-day operations of the Company and is supported
in these functions by senior management. The board maintains ultimate responsibility for strategy
and control of the Company.
The board has delegated day-to-day responsibility for the management of the Company to the
CEO/Chairman, including:
•
•
•
implementing corporate strategies and making recommendations to the board on
significant corporate strategic initiatives;
implementing and maintaining appropriate risk management and compliance frameworks;
and
keeping the board updated on the performance of the Company, including financial
reporting and continuous disclosure information.
Page 7 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CORPORATE GOVERNANCE STATEMENT (continued)
2.
The board oversees the appointment and induction process for directors and committee
members, and the selection, appointment and succession planning process of the Company’s
executive management team. When a vacancy exists or there is a need for particular skills, the
board determines the selection criteria based on the required skills. The appropriate skill mix,
education, experience, personal qualities, and diversity are factors taken into account in each
case, and the appropriate checks are made into the candidate’s background. If these criteria are
met and the board appoints the candidate as a director, that director must have their appointment
the next annual general meeting. The skills, experience and
approved by shareholders at
expertise relevant to the position of each director in office during the year ended 30 June 2016
are detailed on pages 12 – 13 of this report.
The board aims through the notices of meeting for annual general meetings to provide
shareholders with all material information known to the board relevant to a decision on whether or
not to elect or re-elect a director, as well as a statement as to whether the board supports the
election or re-election of the director.
Senior executives,
term of office, duties,
description and letter of appointment describing their
responsibilities. The appointment letter is consistent with the ASX Recommendations.
There is no formal process for periodic evaluation of
the board, board
committees, individual directors and senior executive. While no performance evaluation of the
Board or management was carried out during the reporting period, this is continually monitored by
the Chairman and the Board. The Chairman also speaks to each director individually regarding
their role as a director
The Company Secretaries have responsibility for the company secretarial duties,
including
coordination of all Board business, including agendas, Board papers, minutes, communication
with regulatory bodies and ASX, and all statutory and other filings, and are accountable directly to
the board, through the Chairman. The decision to appoint or remove company secretaries are
made by the board.
including the CEO and the Company Secretaries, have a formal
job
rights and
the performance of
3.
The company does not have a nomination committee as the size of the company and the board
does not warrant such a committee. All board nomination matters are considered by the whole
board, including board succession, continuing development of board members and performance
evaluation.
4. Of the three directors, Mr. G. Shad is a non-executive and an independent director. While a
majority of the board members are not independent directors, the board believes that the people
on the board can and do make independent judgements in the best interests of the company at
all times.
No independent director of the Company has any interest, position, association or relationship
that may compromise the independence of the director based on the criteria described in Box 2.3
of the Corporate Governance Principles and Recommendations (Third edition March 2014).
5. The chairman is an executive director and a major shareholder and therefore is not an
independent director. The Board believes that even though the chairman is not an independent
director the chairman is able to make quality and independent judgements on all relevant issues
falling within the scope of the role of a chairman.
The length of service of each director is set out in the following table:
Director
Length of Service
Mr. R. Hazouri
Mr. E. Hazouri
Mr. G. Shad
23 years
23 years
13 years
CORPORATE GOVERNANCE STATEMENT (continued)
Page 8 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
6. The consolidated entity recognises the need for directors and employees to observe the highest
standards of behaviour and business ethics. All directors and employees are required to act in
accordance with the law and with the highest standard of propriety.
The Company has adopted a code of conduct to guide compliance with legal and other obligations
the Company which may be accessed on the Company’s website
to stakeholders of
(https://www.hitechaust.com). This code provides guidance to directors and management on
practices necessary to maintain confidence in the integrity of the Company.
7. The Board has not yet established objectives in relation to gender diversity but is committed to a
continuation of current employment practices where employees are selected on merit. The aim is
to achieve greater diversity not only in gender but also in matters of age, disability, ethnicity,
marital or family status, religious or cultural background, sexual orientation and gender identity
within director and senior executive positions as they become vacant and appropriately skilled
candidates are available.
Details of female representation in the company are set out below:
Number of women employees in the whole organisation
Number of women in senior executive positions*
Number of women on the Board
Number
7
1
-
%
70%
33%
-
* Senior executive positions include senior managers, executive Directors and Company Secretaries.
The Company is not a “relevant employer” under the Workplace Gender Equality Act.
8. The Company has established an Audit Committee with an independent chairman Mr George Shad
and one other member who is an executive director. The board has established an Audit and Risk
Management Committee which provides assistance to the board in fulfilling the corporate
governance and oversight responsibilities of the board to verify and safeguard the integrity of the
financial reporting of the Company. During the financial year, the audit and risk committee met 2
times.
A formal charter of the audit and risk management committee has been approved by the Board a
copy of which can be viewed on the Company’s website (http://www.hitechaust.com).
As required by Section 250T of the Corporations Act 2001 the company's auditor attends annual
general meetings of
those meetings allows a reasonable
opportunity for members to ask questions of the auditor concerning the conduct of the audit and the
preparation and content of the auditor's report.
the company and the chairman of
9. The board requires the managing director and the employees who jointly perform the function of the
chief financial officer (CFO) to state in writing to the board that in their opinion, the financial records
of the entity have been properly maintained and that the financial statements comply with the
appropriate accounting standards and give a true and fair view of
the financial position and
performance of the entity and that the opinion has been formed on the basis of a sound system of
risk management and internal control which is operating effectively.
10.The Company has established procedures designed to ensure compliance with the ASX Listing
Rules so that Company announcements are made in a timely manner, are factual, do not omit
material information and are expressed in a clear and objective manner that allows investors to
assess the impact of the information when making investment decisions.
Established policies which can be viewed on the Company’s website also ensure accountability at
a senior management level for ASX compliance. The Board approves all disclosures necessary to
ensure compliance with ASX Listing Rule disclosure requirements.
Page 9 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CORPORATE GOVERNANCE STATEMENT (continued)
11.The Company has a communications strategy and an established policy on stakeholder
communication and continuous disclosure to promote effective communication with shareholders,
subject to privacy laws and the need to act in the best interests of the Company by protecting
commercial information.
The Company’s policy on communication with shareholders is set out in the Company’s ‘Policy on
stakeholder communication and continuous disclosure’ which can be viewed on the Company’s
website
Investors are able to access information about the company and its governance via the company’s
website (https://www.hitechaust.com)
relations
representatives of HiTech are available to meet with shareholders from time to time, and respond
to queries addressed to our investor relations email address (info@hitechaust.com). Security
holders are able to send and receive communications electronically to the Company and our share
registry via our share registry, Computershare.
HiTech aims to actively engage with shareholders and other stakeholders at the Annual General
Meeting. At each AGM, discussion is encouraged regarding the performance of the company,
prospects, management and the board, and any other area of interest or concern. Security holders
who are unable to attend the AGM are able to ask questions and make comments ahead of the
meeting, for response both individually and as a discussion item at the AGM.
in the Investor Relations section.
Investor
12. The board has established policies on risk oversight and management which may be viewed on
the Company website (https://www.hitechaust.com). The audit and risk committee oversees both
the audit and risk management of the company. Details of the composition, independence and
membership of the committee can be found under the section 4.1 of this document, as related to
the audit function of the committee, and the committee charter may be found on the HiTech
website.
The board continually monitors areas of significant business risk with input from the audit and risk
committee. Practices have been established to ensure:
•
•
•
•
•
•
•
capital expenditure and revenue commitments above a certain size obtain prior Board
approval;
financial exposures are controlled, including the use of derivatives. Further details of the
Company’s policies relating to interest
forward exchange rate
management and credit risk management are included in the financial statements;
occupational health and safety standards and management systems are monitored and
reviewed to achieve high standards of performance and compliance with regulations;
business transactions are properly authorised and executed;
the quality and integrity of personnel;
financial
framework; and
crisis management policies are in effect.
reporting accuracy and compliance with the financial
reporting regulatory
rate management,
Systems of internal financial control have been put in place by the management of the Company
and are designed to provide reasonable, but not absolute protection against fraud and material
issues that
misstatement. These controls are intended to identify, in a timely manner, control
require attention by the board or audit and risk committee.
The board continually monitors the Company’s risk management framework, and reviews the audit
and risk committee charter and policy on risk oversight and management annually to ensure that
the framework is robust. The Company’s risk management framework has been continuously
monitored throughout the year ended 30 June 2016, and revisions have been made as necessary
on an ongoing basis throughout the financial year.
The risk management and internal control processes of the Company are evaluated and monitored
for effectiveness by the audit and risk committee in conjunction with the board on an ongoing
basis.
13. HiTech recognises the importance of ensuring the economic, environmental and social
sustainability of the Company. The board monitors sustainability issues and works closely with
management to establish best practices. The board has determined that there are no current
material exposures to economic, environmental and social sustainability risks.
Page 10 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CORPORATE GOVERNANCE STATEMENT (continued)
14.Due to the size of the Board, the Company does not have a remuneration committee. The
functions normally carried out by such a committee are currently handled by the whole Board.
The remuneration policy, which sets the terms and conditions for the chief executive officer and
other senior executive has been approved by the board. All executives receive a base salary,
superannuation and performance incentives. The board reviews executive packages annually by
reference to company performance, executive performance, comparable information from industry
sectors and other listed companies. Executives are entitled to participate in the employees share
option arrangements. The criteria used in determining the issue of options to management include
achievement of revenue and profit targets, new business generated, loyalty and years of service
plus other criteria.
Options are issued to Directors and Company Executives as part of their remuneration. The
issued based on performance criteria, but are issued to all Directors and
options are not
executives of
the Company to increase goal congruence among Directors, executives and
shareholders
The amount of remuneration of all directors and executives, including all monetary and non-
monetary components, is detailed in the Director’s Report. All remuneration paid and options
issued to executives are valued at a cost to the Company and expensed. Options are valued
using the Black-Scholes methodology.
If a participant in equity based remuneration scheme established by the Company enters into any
transactions (whether through the use of derivatives or otherwise) which is designed to limit the
economic risk of participating in the equity based remuneration scheme:
(a) the participant must disclose details of the transaction to the Company Secretary;
(b) the Company Secretary will disclose to the Board all details of any such economic risk
management transactions.
The board expects that the remuneration structure implemented will result in the company being
able to attract and retain the best executives to run the economic entity. It will also provide
executives with the necessary incentives to work to grow long-term shareholder value.
Page 11 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
DIRECTORS’ REPORT
The directors of HiTech Group Australia Limited present their report on the company and its controlled
entities for the financial year ended 30 June 2016.
Directors
Information on directors
The following persons were Directors of HiTech Group Australia Limited during the whole of the
financial year and up to the date of this report, unless otherwise stated.
Raymond Hazouri
Chairman, Company Secretary (appointed Company Secretary 13 February 2015)
Qualifications: BA (Sydney University), DipEd.
Experience: Founded HiTech in 1993 and has over 25 years’ experience in the IT industry. Prior to
establishing HiTech, Ray worked in a number of capacities in the information technology industry
ranging from management positions, technical IT consulting roles including systems
analysis/programming, project management and sales roles. Ray worked and consulted for a broad
range of employers in the private, multinational, SME, and public sectors.
Interest in shares and options: 18,460,000 ordinary shares in HiTech Group Australia Limited.
Other current and former directorship in last three years: Nil
George Shad
Non-executive Director.
Qualifications: Solicitor
Experience: Appointed to the Board on 30 July 2003. Principal of Shad Partners Solicitors with thirty
years’ experience as a lawyer specialising in commercial and conveyancing work.
George is a panel solicitor for a number of major banks and his expertise and contacts in the
corporate sector will assist HiTech in furthering its client base.
Special responsibilities: Chairman of the Audit and Risk Committee
Other current and former directorship in last three years: Nil
Elias Hazouri
Executive Director, Company Secretary (appointed Company Secretary 13 February 2015)
Qualifications: BSc, MBA
Experience: Appointed to the Board on 30 July, 2003 as an alternate Director representing Ray
Hazouri when he was not available. Over 26 years’ experience in IT and banking. Elias was
previously a director of HiTech from 1993-March 2000. Elias’s knowledge of HiTech’s business is
extensive.
Throughout his career, Elias has been integral to the development of many IT systems and IT support
departments. He has held roles ranging from programmer to technology support head. Elias is a key
resource and knowledge base to the HiTech account managers and is jointly responsible for
generating new business and developing new business.
Elias has advised on business strategy, both from a financial and operational perspective, since the
inception of HiTech in 1993. Elias is employed in the capacity of Chief Executive Officer.
Interest in shares and options: 26,202 ordinary shares, 3.9M options in HiTech Group Australia
Limited beneficially owned by him.
Other current and former directorship in last three years: Nil
Page 12 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Company Secretaries
Ray Hazouri (Director)
Elias Hazouri (Director)
Directors’ meetings
The following table sets out the number of directors’ meetings (including meeting of committees of
directors) held during the financial year and the number of meetings attended by each director (while
they were a director or a committee member). During the financial year 2 board meetings and 2 audit
& risk committee meetings were held.
Board of Directors
Audit & Risk Committee
No eligible to
Attend
Attended
No eligible to
Attend
Attended
Mr R Hazouri (*by invitation)
Mr E Hazouri
Mr G Shad
3
3
3
3
3
3
3*
3
3
3*
3
3
Dividends
No dividends have been declared in the 2016 financial year (2015: Nil).
Earnings per share
Basic and diluted earnings per share (cents)
cents
7.01
Corporate structure
HiTech Group Australia Limited is a listed public company, limited by shares, and is incorporated and
domiciled in Australia. HiTech has prepared a consolidated financial report incorporating the entities
that it controlled during the financial year.
Nature of operations and principal activities
The consolidated entity’s principal activity during the financial year was the supply of recruitment
services for permanent and contract staff to the ICT (Information and Communication Technology)
sector.
During the financial year, there were no significant changes in the nature of these operations.
Group overview
HiTech currently supplies permanent and contract staff from its large, personalised, database of over
300,000 specialised ICT, Finance and Office Support professionals which has been developed over
the past 23 years.
The HiTech client base of over 486 clients is well established, with strong representation by
technology companies, banking/financial services companies plus Federal Government departments
and agencies. HiTech has also entered into preferred supplier agreements for the supply of staff in
both the public and private sectors.
Investment activities
The Group maintains an investment portfolio comprising of traded shares in Australian listed entities.
Page 13 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Operating and financial review
Operating results
the financial year ended 30 June 2016,
For
the consolidated entity’s operating revenue is
$18,322,169, an increase of 21% over the previous corresponding period (pcp). The high margin
permanent placement income was 10% higher and contracting revenue was 23% higher.
Gross Profit is $3,892,918, an increase of 22% over pcp (FY15: $3,180,051). Net profit after taxation
(NPAT) is $2,171,768 (FY15: $807,721) due mainly to an in increase in contracting revenue. Earnings
before interest, taxes, depreciation and amortization (EBITDA) are $3,139,789 (FY15; $1,348,972).
Our Net tangible Assets (NTA) is $0.19 per share.
Permanent recruitment comprises the search and selection of candidates for full time employment
and is characterised by relatively high profit margins. ICT contracting, comprising the provision of ICT
professionals for temporary and other non-permanent staffing needs of clients for specific projects
has continued to supply HiTech with cash flow.
HiTech’s recruitment business is broadly based in this sector and operates across the full range of
ICT services, including system development, infrastructure support and networking, operation and
other skill sets. As the cycle turns, there is a growing need for skilled ICT professionals. HiTech is
addressing the demand for specialised ICT skills by making use of its database and comprehensive
contacts internationally.
HiTech has diversified into non-ICT areas of recruitment such as office support, sales, accounting,
legal and healthcare. Whilst this diversification remains minor in comparison to ICT recruitment, it
marks a start for all these other areas of business with a potential to grow further.
HiTech’s reputation for top quality service and the selection of suitable candidates for client job
requirements have resulted in HiTech establishing a small but successful niche market position. The
recruitment sector has changed with more jobs and less candidates.
HiTech’s market share of the total Australian recruitment market is relatively small. This represents a
huge growth potential. HiTech is focused on servicing existing clients by providing a complete
recruitment solution in addition to contracting.
As HiTech’s core competency is in recruitment, our strategy is to build on our existing client base and
maximize revenue from existing clients by effectively providing personnel to not only the ICT market
but also to other markets such as administration and office support, sales and marketing, finance and
legal. There is also a possibility of broadening the consolidated entity’s operations into geographical
markets in which HiTech operates.
We are working towards winning new business and ensuring that operating costs are kept to a
minimum.
Future developments, prospects and business strategies
The FY2017 growth will depend on the prevailing economic conditions at the time. There are signs of
growing business confidence coming into the market.
The most significant areas for change will be the continuation of an increase in job vacancies. Skilled
professionals of top quality remain in short supply. We cannot, at this point, forecast with any certainty
the results of next year.
The directors’ main objective will be organic growth in the consolidated entity’s core business to
enhance existing business and win new business. We are searching for appropriate EPS positive
acquisitions.
Significant Changes in state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial
year.
Environmental regulations
The consolidated entity’s operations are not subject to any significant environmental regulation under
a law of the Commonwealth or of a State or Territory.
Page 14 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Indemnifying officers or auditor
During or since the end of the financial year, the company has given an indemnity or entered into an
agreement to indemnify, or paid or agreed to pay insurance premiums as follows:
The company has paid premiums to insure all of the directors of the company has named above, the
company secretaries and all executive officers of the company against any liability incurred as such
by a director, secretary or executive officer to the extent permitted by the Corporations Act 2001.
The contract of insurance prohibits disclosure of the nature of the liability and the amount of the
premium.
The company has not otherwise, during or since the financial year, indemnified or agreed to indemnify
an officer or auditor of the company or any related body corporate against a liability incurred as such
by an officer or auditor.
Remuneration report - Audited
This report outlines the remuneration arrangements in place for directors and executives of HiTech
Group Australia Limited. The information provided in this remuneration report has been audited as
required by section 308(3C) of the Corporations Act 2001.
The names of directors in office at any time during or since the end of the year are:-
Mr Raymond Hazouri
Mr George Shad
Mr Elias Hazouri
Remuneration Policy
The Board determine the remuneration policy applicable to each executive key management person
as and when required based on market rates and capacity to pay. Currently all executive key
management personnel are contractors to the Company with the exception of the Managing Director
Ray Hazouri, and all were appointed under arm’s length agreements acceptable to both parties.
Key management personnel are entitled to participate in the employee share option benefits at the
discretion of the Board.
Details of remuneration
Details of the remuneration of the Directors, the key management personnel of the Group (as defined
in AASB 124 Related Party Disclosures) and specified executives of HiTech Group Australia Limited
are set out in the following table:-
Remuneration - Key management personnel of the Group 2016
2016
Short-term employee Benefits
Post-employment
benefits
Long-term
benefits
Name
Non-executive
directors
G. Shad*
Sub-total non-
executive
directors
Executive
directors
R. Hazouri
E. Hazouri*
Total key
management
personnel
compensation
(group)
Cash salary and
fees
Superannuation
Long service
leave
Total
$
-
-
$
-
-
-
-
$
-
-
325,000
354,758
25,437
19,262
36,410
-
386,847
374,020
679,758
44,699
36,410
760,867
Page 15 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Remuneration - Key management personnel of the Group 2015
2015
Short-term employee Benefits
Post-employment
benefits
Long-term
benefits
Name
Non-executive
directors
G. Shad*
Sub-total non-
executive
directors
Executive
directors
R. Hazouri
E. Hazouri*
Total key
management
personnel
compensation
(group)
Cash salary and
fees
Cash bonus
Superannuation
Long service
leave
$
10,000
10,000
239,031
278,625
$
-
-
-
40,000
$
-
-
-
-
Total
$
10,000
10,000
25,437
-
35,969
-
300,437
318,625
527,656
40,000
25,437
35,969
629,062
* Wholly paid to a related entity of the key management personnel
Group performance in relation to key management personnel compensation
The following table shows the performance of the Consolidated Group over the past seven financial
years:-
FY
2010
2011
2012
2013
2014
2015
2016
Sales
Revenue
$
5,496,087
8,748,895
9,583,560
7,309,770
7,975,179
NPAT/(NLAT)
$
136,775
648,404
556,699
164,504
Basic
EPS
Cents
0.44
2.09
1.80
0.53
Diluted
EPS
Cents
0.44
2.09
1.80
0.53
(150,658)
(0.49)
(0.49)
15,104,907
18,322,169
807,721
2,171,768
2.61
7.01
2.61
7.01
NTA
per
Net Equity
share Dividends
$
1,871,335
2,519,739
3,076,438
3,242,189
2,940,349
3,749,499
5,953,683
cents
6.03
8.12
10.00
10.45
9.00
12.08
19.00
$
-
-
-
-
155,000
-
-
Average
Share
Price
Cents
2.22
4.02
4.39
4.50
7.28
7.50
22.00
The outlook for FY2017 will depend on the prevailing state of the local and global economy. We
cannot forecast exact results at this point.
Employment contracts
The Chairman, Mr Ray Hazouri, is employed under a contract whilst the CEO, Mr Elias Hazouri, is
retained as a contractor under a service contract. Under the terms of the present contracts, these
executives may resign from their positions and thus terminate their contract by giving one year’s
written notice.
The company may terminate these employment agreements by providing twelve months written
notice or by payment in lieu of the notice period based on the executives’ remuneration package.
Page 16 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Options Granted as Remuneration
During the reporting period 1,600,000 options over ordinary shares were issued to employees under
the HiTech Employee Option Plan.
No shares were issued to key management personnel during the reporting year or since the end of
the reporting year up the date of this report, as a result of the exercise of remuneration options.
END OF AUDITED REMUNERATION REPORT
Page 17 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Auditor Independence declaration
The lead auditor’s independence declaration for the year ended 30 June, 2016, as required under
section 307C of the Corporations Act 2001, has been received and is set out on page 20 of the
financial report.
Non-audit services
The board of directors, in accordance with advice received from the audit committee, is satisfied that
the provision of non-audit services during the year is compatible with the general standard of
independence for auditor imposed by the Corporations Act 2001. The directors are satisfied that the
services disclosed below did not compromise the external auditor’s independence for the following
reasons:
•
all non-audit services are reviewed and approved by the audit committee prior to
commencement to ensure they do not adversely affect the integrity and objectivity of the
auditor; and
•
the nature of the services provided do not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set
by the Accounting Professional and Ethical Standards Board.
The following fees for non-audit services were paid/payable to the auditors for the year ended 30
June, 2016:
Taxation services
$ 1,200
Proceedings on behalf of the Company
No person has applied for leave of 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 any part of those
proceedings.
No proceedings have been brought or intervened in on behalf of the company with leave of the Court
under section 23 of the Corporations Act 2001.
Signed in accordance with a resolution of the board of directors,
Raymond Hazouri
Director
Sydney, 28 October 2016
Page 18 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 23-42, are in accordance with the
Corporations Act 2001, including:
a) Complying with Australian Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements, and
b)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016
and of its performance for the financial year ended on that date, and
2.
there are reasonable grounds to believe that the Group will be able to pay its debts as and when
they become due and payable.
Note 1(a) confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The Directors have been given the declaration by the Chief Executive Officer and Chief Financial Officer
as required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
Ray Hazouri
Director
Sydney, 28 October 2016
Page 19 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Auditor’s Independence Declaration
To The Directors of HiTech Group Australia Limited
In accordance with the requirements of section 307C of the Corporation Act 2001, as lead auditor for
the audit of HiTech Group Australia Limited for the year ended 30 June 2016, I declare that, to the
best of my knowledge and behalf, there have been:
a) no contraventions of the auditor independence requirements of the Corporation Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of HiTech Group Australia Limited and the entities it controlled during the
year.
Raymond Yi Kuen Lee
Registered Company Auditor
Sydney
28 October, 2016
Offfice Address: Suite 272 Level 2, The Miramar,
Tel: 02-9281 9797 Fax: 02-9281 9985
398-408 Pitt Street Sydney NSW 2000
Postal Address: P O Box 20003, World Square 2002
Liability limited by a Scheme approved under Professional Standards Legislation
Page 20 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
INDEPENDENT AUDITOR’S REPORT
To the members of HiTech Group Australia Limited
We have audited the accompanying financial report of HiTech Group Australia Limited (“Company”),
which comprises the consolidated statement of financial position as at 30 June 2016, 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 ended on that date, a summary of
significant accounting policies, other explanatory notes to the financial statements, and the directors’
declaration of the consolidated entity, comprising both the Company and the entities it controlled at
the year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of HiTech Group Australia Limited 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 control as the directors determine are necessary to enable the
preparation of the financial report that is free from material misstatement, whether due to fraud or
error; selecting and applying appropriate accounting policies; and making accounting estimates that
are reasonable in the circumstances. In Note 1, the directors also state, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements
comply with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express a conclusion on the consolidated financial report based on our audit.
We conducted our audit in accordance with Auditing Standards. These Auditing Standards require that
we comply with relevant ethical requirements relating to audit engagements and plan and perform the
audit to obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor's judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal controls, relevant to the entity's
preparation of the financial report that gives a true and fair view, 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 entity's internal controls. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report. Our audit did not involve an analysis
of the prudence of business decisions made by directors or management.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Matters Relating to Electronic Publication of the Audited Financial Report
This audit report relates to the financial report of HiTech Group Australia Limited for the year ended 30
June 2016 included on the website of HiTech Group Australia Limited. The directors of the company
are responsible for the integrity of the website and we have not been engaged to report on this
integrity. This audit report refers only to the subject matter described above. It does not provide an
opinion on any other information which may have been hyperlinked to or from the financial report. If
users of the financial report are concerned with the inherent risk arising from publication on a website,
they are advised to refer to the hard copy of the audited financial report to confirm the information
contained in the website version of the financial report.
Liability limited by a Scheme approved under Professional Standards Legislation
Page 21 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We have given to the directors of the company a written Auditor’s Independence
Declaration, a copy of which is included in the directors’ report.
Auditor’s opinion
In our opinion:
1.
the financial report of HiTech Group Australia Limited is in accordance with the Corporations
Act 2001, including:
(i)
(ii)
giving a true and fair view of
the company’s and consolidated entity’s financial
position as at 30 June 2016 and of their performance for the year ended on that date;
and
complying with Australian Accounting Standards and the Corporations Regulations
2001; and
2.
the financial
disclosed in Note 1.
report also complies with International Financial Reporting Standards as
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 4 to 6 of the directors' report for the year
ended 30 June 2016. 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.
Auditor’s Opinion on the Remuneration Report
In our opinion the Remuneration Report of HiTech Group Australia Limited for the year ended 30 June
2016, complies with section 300A of the Corporations Act 2001.
Raymond Yi Kuen Lee
Registered Company Auditor
Sydney, 28 September 2016
Suite 272, 398-408 Pitt Street
Sydney NSW 2000
Liability limited by a Scheme approved under Professional Standards Legislation
Page 22 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
For the Financial Year Ended 30 June 2016
Revenue from continuing operations
Services revenue
Cost of services
Gross Profit
Other revenue
Marketing expenses
Occupancy expenses
Insurance and legal expenses
Administration expenses
Borrowing costs
(Impairment)/Gain of current financial assets
(Loss)/Gain on sale of current financial assets
Other expenses from ordinary activities
Profit/(Loss) before Income Tax
Income tax expense
Profit/(Loss) attributable to Members of the parent entity
Other comprehensive income
Total comprehensive income for the year
Earnings per Share:
Consolidated Group
Note
2016
$
2015
$
4(a)
18,276,359
15,038,428
(14,383,441)
(11,858,377)
3,892,918
3,180,051
4(b)
45,810
(80,807)
66,479
(97,466)
(103,414)
(121,949)
(46,526)
(68,391)
(1,126,878)
(838,953)
-
(6,301)
870,015
(835,848)
(291,002)
(43,483)
80,523
(29,060)
3,116,633
1,329,085
6
(944,865)
(521,364)
2,171,768
807,721
-
-
2,171,768
807,721
Basic and diluted earnings (cents per share)
29
7.01
2.61
Notes to financial statements are included on pages 26-42
Page 23 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2016
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit and loss
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Deferred tax assets
Intangible assets
Other assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provision for taxation
Short-term provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Long term Provision
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
Notes to financial statements are included on pages 26-43
Consolidated Group
Note
2016
$
2015
$
7
8
9
10
11
12
13
14
15
16
16
17
18
4,408,703
1,838,730
3,082,699
2,636,241
560,036
14,422
654,343
22,717
8,065,860
5,152,031
70,674
52,861
2,277
24,063
30,163
297,535
3,610
24,063
149,875
355,371
8,215,735
5,507,402
1,417,771
1,033,034
750,702
620,715
63,543
95,526
2,232,016
1,749,275
30,036
30,036
8,628
8,628
2,262,052
1,757,903
5,953,683
3,749,499
2,869,213
2,869,213
340,905
2,743,565
308,489
571,797
5,953,683
3,749,499
Page 24 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Financial Year Ended 30 June 2016
Consolidated Group
Share Capital
Ordinary
Accumulated
Losses/
Accumulated
Profits
Employee
Equity-settled
benefits Reserve
Total
$
$
$
$
Balance at 1/7/2014
2,869,213
(235,924)
307,060
2,940,349
Total dividends paid for the year
Total comprehensive profit for the period
Employee share options – value of employee services
-
-
-
-
807,721
-
-
-
807,721
-
1,429
1,429
Balance at 30/6/2015
Balance at 1/7/2015
Total dividends paid for the year
Total comprehensive profit for the year
Employee share options – value of employee services
2,869,213
571,797
308,489
3,749,499
2,869,213
571,797
308,489
3,749,499
-
-
-
-
2,171,768
-
-
-
2,171,768
-
32,416
32,416
Balance at 30/6/2016
2,869,213
2,743,565
340,905
5,953,683
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Financial Year Ended 30 June, 2016
STATEMENT
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Dividends received
Interest received
Interest paid
Income tax (expense)/ refund
Note
Consolidated Group
2016
$
2015
$
19,657,536
15,495,318
(17,168,679)
(14,372,027)
17,128
1,656
-
(565,771)
44,420
2,972
(6,301)
5,532
Net cash provided by/ (used in) operating activities
28
1,941,870
1,169,914
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets
Proceeds from sale of financial assets
Payment of property, plant and equipment
Proceeds of sales from plant and equipment
Net cash provided by / (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of borrowings
Net cash used in financing activities
Net increase/(decrease) in cash held
Cash at the beginning of the financial year
Cash at the end of the financial year
(505,903)
(510,536)
1,189,055
1,448,141
(78,520)
23,470
(1,505)
-
628,102
936,100
-
-
(900,000)
(900,000)
2,569,973
1,206,014
1,838,730
632,716
7
4,408,703
1,838,730
Page 25 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the
consolidated entity consisting of HiTech Group Australia Limited and its subsidiaries.
(a)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
the Australian
Standards, Australian Accounting Interpretations, other authoritative pronouncements of
Accounting Standards Board (AASB) and the Corporations Act 2001.
The financial report was authorised for issue on 28 October 2016 by the Board of Directors.
Compliance with IFRS
(i)
the HiTech Group Australia Limited Group also comply with
The consolidated financial statements of
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB).
(ii)
Historical cost convention
These financial statements have been prepared under the historical cost convention, modified where applicable
by the measurement at fair value of selected financial assets and financial liabilities.
(b)
Financial report prepared on a going concern basis
The Directors believe that it is appropriate to prepare the financial report on a going concern basis because
a)
b)
c)
The Group had $4,408,703 in cash at 30 June 2016;
The Group had $560,036 in financial assets at fair value at 30 June 2016
The Group has budgeted for sales in FY2017 at the same level of FY2016 with expected new contracting income from
NSW Government contracts.
(c)
Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of HiTech Group Australia
Limited ('company' or 'parent entity') as at 30 June 2016 and the results of all subsidiaries for the year then ended.
HiTech Group Australia Limited and its subsidiaries together are referred to in this financial report as the group or the
consolidated entity.
Subsidiaries are all entities (including special purpose entities) over which the group has the power to govern the
financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The
existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing
whether the group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are de-consolidated
from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the group.
Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated.
the asset
Unrealised losses are also eliminated unless the transaction provides evidence of
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the group.
the impairment of
(d)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors.
Page 26 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e)
Revenue recognition
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic
benefits will flow to the entity and specific criteria have been met for each of the group's activities as described below.
The group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction
and the specifics of each arrangement.
Revenue for the rendering of contracting and consulting services is recognised upon delivery of the service to the client
while permanent placement fees are brought to account at the time of placement rather than the day of commencement
of work. Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as
revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.
Interest income is recognised using the effective interest method. When a receivable is impaired, the group reduces the
carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective
interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired
loans is recognised using the original effective interest rate.
All Australian revenue is stated net of the amount of goods and services tax (GST).
Dividends are recognised as revenue when the right to receive payment is established. This applies even if they are paid
out of pre-acquisition profits. However, the investment may need to be tested for impairment as a consequence, refer
note 1(k).
(f)
Income tax
The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of
the reporting period in the countries where the company's subsidiaries and associates operate and generate taxable
income.
It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax
liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination
that at
the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period
and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is
settled.
the time of
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in foreign operations where the company is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either
to settle on a net basis, or to realise the asset and settle the liability simultaneously.
HiTech Group Australia and its wholly-owned Australian controlled entities have not implemented the tax consolidation
legislation.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
(g)
Leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the group as lessee are
classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor)
are charged to profit or loss on a straight-line basis over the period of the lease.
Impairment of assets
(h)
Goodwill and 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
assets are tested 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. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For
the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating
units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
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HiTech Group Australia Limited and Controlled Entities
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NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(i)
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three
months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance
sheet.
Trade receivables
(j)
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days. They
are presented as current assets unless collection is not expected for more than 12 months after the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written
off by reducing the carrying amount directly. An allowance account (provision for impairment of trade receivables) is used
when there is objective evidence that the group will not be able to collect all amounts due according to the original terms
of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or
financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators
that the trade receivable is impaired. The amount of the impairment allowance is the difference between the asset's
carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.
The amount of the impairment loss is recognised in profit or loss within other expenses. When a trade receivable for
which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off are credited against other
expenses in profit or loss.
Investments and other financial assets
(k)
Classification
The group classifies its financial assets in the following categories: financial assets at fair value through profit or loss,
loans and receivables, held-to-maturity investments and available-for-sale financial assets. The classification depends on
the purpose for which the investments were acquired. Management determines the classification of its investments at
initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at the end of each
reporting date.
(i)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is
classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are
classified as held for trading unless they are designated as hedges. Assets in this category are classified as
current assets if they are expected to be settled within 12 months; otherwise they are classified as non-current.
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They are included in current assets, except for those with maturities greater than 12
months after the reporting period which are classified as non-current assets. Loans and receivables are included
in trade and other receivables (note 8) and receivables in the balance sheet.
Financial assets – reclassification
The group may choose to reclassify a non-derivative trading financial asset out of the held for trading category if the
financial asset is no longer held for the purpose of selling it in the near term. Financial assets other than loans and
receivables are permitted to be reclassified out of the held for trading category only in rare circumstances arising from a
single event that is unusual and highly unlikely to recur in the near term. In addition, the group may choose to reclassify
financial assets that would meet the definition of loans and receivables out of the held for trading or available-for-sale
categories if the group has the intention and ability to hold these financial assets for the foreseeable future or until
maturity at the date of reclassification.
(l)
Investments and other financial assets (continued)
Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or amortised
cost as applicable, and no reversals of fair value gains or losses recorded before reclassification date are subsequently
made.
Effective interest rates for financial assets reclassified to loans and receivables and held-to-maturity categories are
determined at the reclassification date. Further increases in estimates of cash flows adjust effective interest rates
prospectively.
Recognition and de-recognition
Purchases and sales of financial assets are recognised on trade-date – the date on which the group commits to purchase
or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.
When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in other
comprehensive income are reclassified to profit or loss as gains and losses from investment securities.
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HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Loans and receivables and held-to-maturity investments are subsequently carried at amortised cost using the effective
interest method.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair
value. Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss'
category are presented in profit or loss within other income or other expenses in the period in which they arise.
Dividend income from financial assets at fair value through profit or loss is recognised in profit or loss as part of revenue
from continuing operations when the group's right to receive payments is established. Interest income from these
financial assets is included in the net gains/(losses).
Impairment
The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or
group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses
are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the
initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash
flows of the financial asset or group of financial assets that can be reliably estimated. In the case of equity investments
classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is
considered an indicator that the assets are impaired.
Impairment testing of trade receivables is described in note 1(j) and (t).
(m)
Plant and equipment
Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item
can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised
when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they
are incurred.
Depreciation is calculated on a diminishing balance or straight-line method to allocate their cost or revalued amounts, net
of their residual values, over their estimated useful lives. Leasehold improvements are depreciated over the shorter of
either the expired period of the lease or the estimated useful lives of the improvements. The following estimated useful
lives are used in the calculation of depreciation:
Plant and equipment
Motor vehicles
Useful Life
3-5 years
5 years
The assets' residual values and useful
lives are reviewed, and adjusted if appropriate, at the end of each reporting
period. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount
is greater than its estimated recoverable amount (note 1(h)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit
or loss. When revalued assets are sold, it is group policy to transfer any amounts included in other reserves in respect of
those assets to retained earnings.
Intangible assets
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will
contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to the Non-
current asset – Intangible Assets (Note 12). Costs capitalised include external direct costs of materials and service,
direct payroll and payroll related costs of employees’ time spent on the project.
Amortisation is calculated on a
diminishing balance basis at 40% per annum.
Trade and other payables
These amounts represent liabilities for goods and services provided to the group prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised
initially at their fair value and subsequently measured at amortised cost using the effective interest method.
Employee benefits
(n)
(o)
(p)
(i)
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits plus annual
leave and long service leave
expected to be settled within 12 months after the end of the period in which the employees render the related
service are recognised in respect of employees' services up to the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are settled. The liability for annual leave is recognised in the
provision for employee benefits. All other short-term employee benefit obligations are presented as payables.
(ii)
Share-based payments
Share-based compensation benefits may be provided to directors, employees and company consultants (Note 30).
The fair value of shares or options granted is recognised as an employee benefits expense with a corresponding
increase in equity. The total amount to be expensed is determined by reference to the fair value of the
Page 29 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
shares/options granted, which includes any market performance conditions and the impact of any non-vesting
conditions but excludes the impact of any service and non-market performance vesting conditions.
Non-market vesting conditions are included in assumptions about the number of options that are
expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the
number of options that are expected to vest based on the non-marketing vesting conditions. It recognises the
impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity
(q)
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
(r)
Earnings per share
(i)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the company, excluding any
costs of servicing equity other than ordinary shares by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year
(ii)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares; and the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
(s) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except, where the
amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised
as part of the cost of acquisition of the asset or as part of an item of expense. Receivables and payables in the balance
sheet are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is
included with other receivables or payables in the balance sheet.
Cash flows are included in the statement of cash flows on a gross basis except for the GST component of cash flows
arising from investing and financing activities which are disclosed as operating cash flows.
(t)
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
(u)
Critical accounting estimates and judgements
The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and
best available current information. Estimates assume a reasonable expectation of future events and are based on current
trends and economic data, obtained both externally and within the group.
Key estimates – Impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to
impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-
use calculations performed in assessing recoverable amounts incorporate a number of key estimates.
The Group’s financial assets at fair value through profit or loss are financial assets held for trading and are shares in listed
Impairment gains
entities which are recorded at fair value at balance date being the closing market bid price on that day.
during the reporting period have been recorded as other income in the statement of comprehensive income.
Key judgements – impairment of receivables
The directors have reviewed outstanding debtors as at 30 June 2016 and have formed the opinion that all debtors
outstanding are collectible and have therefore decided that a provision for impairment should not be made. The major
portion of debtors outstanding at balance date was with Australian Government departments with little or no risk of default.
(v)
Parent entity financial information
The financial information for the parent entity, HiTech Group Australia Limited, disclosed in Note 26 has been prepared
on the same basis as the consolidated financial statements, except as set out below,
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the financial statements of HiTech Group Australia Limited.
(w)
New Accounting Standards for Application in Future Periods
The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory
application dates for future reporting periods, some of which are relevant to the Group. The Group has decided not to
early adopt any of
the new and amended
pronouncements that are relevant to the Group but applicable in future reporting periods is set out below:
the new and amended pronouncements. The Group’s assessment of
AASB 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods
beginning on or after 1 January 2018).
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined below)
instruments, revised
and includes revised requirements for the classification and measurement of financial
Page 30 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
recognition and de-recognition requirements for financial
accounting.
instruments and simplified requirements for hedge
The key changes that may affect
the Group on initial application include certain simplifications to the
classification of financial assets, simplifications to the accounting of embedded derivatives, upfront accounting for
expected credit loss, and the irrevocable election to recognise gains and losses on investments in equity
instruments that are not held for trading in other comprehensive income. AASB 9 also introduces a new model
for hedge accounting that will allow greater flexibility in the ability to hedge risk, particularly with respect to
hedges of non-financial items. Should the entity elect to change its hedge policies in line with the new hedge
accounting requirements of the Standard, the application of such accounting would be largely prospective.
Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s financial
instruments, including hedging activity, it is impracticable at this stage to provide a reasonable estimate of such
impact.
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods commencing on or
after 1 January 2017).
When effective, this Standard will replace the current accounting requirements applicable to revenue with a
single, principles-based model. Except for a limited number of exceptions, including leases, the new revenue
model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges between entities
in the same line of business to facilitate sales to customers and potential customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be
entitled in exchange for the goods or services. To achieve this objective, AASB 15 provides the following five-
step process:
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
determine the transaction price;
allocate the transaction price to the performance obligations in the contract(s); and
recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group’s financial
statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to
leases in AASB 117: Leases and related Interpretations. AASB 16 introduces a single lessee
accounting model that eliminates the requirement for leases to be classified as operating or
finance leases.
The main changes introduced by the new Standard include:
recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less
than 12 months of tenure and leases relating to low-value assets);
depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit
or loss and unwinding of the liability in principal and interest components;
variable lease payments that depend on an index or a rate are included in the initial measurement
of the lease liability using the index or rate at the commencement date;
by applying a practical expedient, a lessee is permitted to elect not
components and instead account for all components as a lease; and
to separate non-lease
Additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard
to comparatives in line with AASB 108 or recognise the cumulative effect of retrospective
application as an adjustment to opening equity on the date of initial application.
Although the directors anticipate that the adoption of AASB 16 will impact the Group's financial
statements, it is impracticable at this stage to provide a reasonable estimate of such impact
AASB 2014-3: Amendments to Australian Accounting Standards – Accounting for Acquisitions of
Interests in Joint Operations (applicable to annual reporting periods beginning on or after 1
January 2016)
Page 31 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2: FINANCIAL RISK MANAGEMENT
The Groups activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit risk
and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks
to minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to measure
different types of risk to which it is exposed. These methods include analysing the effect of interest rate rises, and other price
risks, aging analysis for credit risk and comparison of the investment portfolios against the ASX All Ordinaries Index to
determine market risk.
Risk management is carried out by management under policies approved by the Board of Directors. The Board provides written
principles for overall risk management, as well as policies covering specific areas including interest rate risk, credit risk, ,and
investment of excess liquidity. The groups functional and presentation currency is the Australian dollars and the Group has no
foreign exchange dealings and therefore does not use derivative financial instruments.
The total for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting
policies to these financial statements, are as follows:
Financial Assets
Cash
Bank deposits at call
Trade and other receivables
Financial assets at fair value through profit and loss
Other Assets - Term deposits
Total financial assets
Financial Liabilities
Trade and other payables
Total financial liabilities
(a) Credit risk
Consolidated Group
2016
$
3,653,063
755,640
3,082,699
560,036
24,063
8,075,501
1,417,771
1,417,771
2015
$
1,774,785
63,945
2,636,241
654,343
24,063
5,153,377
1,033,034
1,033,034
Credit risk arises from cash and cash equivalents, and deposits with banks and financial institutions, as well as credit
exposure to customers as outstanding receivables. For banks and financial institutions, only independently rated parties
with a minimum rating of ‘A’ are accepted. If customers are independently rated, these ratings are used. Otherwise, if there
is no independent rating, risk control assesses the credit quality of the customers, taking into account their financial
position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance
with limits set by the Group. The compliance with credit limits by customers is regularly monitored by line management.
Sales to customers are required to be settled in cash, mitigating credit risk.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised on
page 30.
NOTE 2: FINANCIAL RISK MANAGEMENT (continued)
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit
ratings (if available) or to historical information about counterparty default rates:
Trade receivables
Counterparts with external credit rating (Moody’s)
AAA Federal government departments and instrumentalities
2,442,447
1,988,967
Consolidated Group
2016
$
2015
$
Counterparts without external credit rating*
Group 1
Group 2
Group 3
Total trade receivables
Cash at bank and short-term bank deposits
AA2
* Group 1 — new customers (less than 6 months)
-
640,252
-
-
647,274
-
3,082,699
2,636,241
4,408,703
1,838,730
Group 2 — existing customers (more than 6 months) with no defaults in the past
Group 3 — existing customers (more than 6 months) with some defaults in the past. The default was not recovered.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities and the ability to close out market positions. The Group manages
liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets
and liabilities. Surplus funds are generally only invested in instruments that are tradeable in highly liquid markets
Page 32 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial Liabilities. The Group manages this risk through the following mechanisms:
•
•
•
•
preparing forward looking cash flow analysis in relation to its operational and financing activities;
Ensuring that adequate capital raising activities are undertaken;
maintaining a reputable credit profile; and
investing surplus cash only with major financial institutions.
The Group has no long term financial liabilities and uses existing cash and funds generated from operations to balance cash
flow requirements.
All financial liabilities are due to be settled in less than one year.
Weighted
average
interest
rate
Interest
free
Floating
Fixed interest
maturing
1 year or
less
1 to 5
years
2016
Financial Assets
Cash
Bank deposits at call
Trade and other
receivables
Financial assets at fair
value through profit or loss
Other Assets – Term
deposits
2.0%
2.0%
n/a
n/a
2.0%
354
3,652,709
-
755,640
3,082,699
560,036
-
-
-
-
3,643,089
4,408,349
-
-
-
-
24,063
24,063
Financial Liabilities
Trade and other payables
n/a
1,417,771
1,417,771
-
-
-
-
Total
3,653,063
755,640
3,082,699
560,036
24,063
8,075,501
1,417,771
1,417,771
-
-
-
-
-
-
-
-
NOTE 2: FINANCIAL RISK MANAGEMENT (continued)
Weighted
average
interest
rate
Interest
free
Floating
Fixed interest
maturing
1 year or
less
1 to 5
years
2015
Financial Assets
Cash
Bank deposits at call
Trade and other
receivables
Financial assets at fair
value through profit or
loss
Other Assets – Term
deposits
Financial Liabilities
Trade and other
payables
(d) Fair value estimation
1.5%
1.5%
n/a
n/a
1.5%
354
-
1,774,431
63,945
2,636,241
654,343
-
-
-
-
-
-
-
3,290,938
-
1,838,376
24,063
24,063
n/a
1,033,034
-
-
Total
1,774,785
63,945
2,636,241
654,343
24,063
5,153,377
1,033,034
-
-
-
-
-
-
-
The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their
carrying values as presented in the statement of financial position. Fair values are those amounts at which an asset could be
exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions
may have a material impact on the amounts estimated. Areas of judgment and the assumptions have been detailed below.
Where possible, valuation information used to calculate fair value is extracted from the market, with more reliable information
Page 33 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
available from markets that are actively traded.
market bid prices.
In this regard, fair values for listed securities are obtained from quoted
In all cases the carrying values of financial assets and liabilities are the same as the net fair values.
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using
a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy
consists of the following levels:
- quoted prices in active markets for identical assets or liabilities (Level 1);
- inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices) (Level 2); and
- inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
Consolidated
2016
Financial assets
Financial assets at fair value through profit and loss:
- Listed investments (Disposed of in July 2016)
Consolidated
2015
Financial assets
Level 1
Level 2
Level 3
$
560,036
$
-
Total
$
560,036
$
-
-
Financial assets at fair value through profit and loss:
- Listed investments
654,343
-
654,343
Included within Level 1 of the hierarchy are listed investments. The fair values of these financial assets have been based on the
closing quoted bid prices at reporting date, excluding transaction costs.
Page 34 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
NOTE 3: SEGMENT INFORMATION
The Consolidated Group operates primarily in one geographical and in one business segment, namely the recruitment industry
in Australia and reports to the Board on the performance of the Group as a whole.
NOTE 4: REVENUE
Revenue from continuing operations
(a) Services
Note
Consolidated Group
2016
$
2015
$
- Contracting and permanent placement revenue (i)
18,276,359
15,038,428
(b) Other revenue
-
Interest received – other entities
- Dividends – other entities
- Other
Total revenue
(i) Contracting revenue includes permanent placement fees, commission earned
on contracting and contract services provided.
NOTE 5: EXPENSES
Cost of providing services
Rental expense on operating leases
- Minimum lease payments
Depreciation and amortisation of non-current assets
Plant and equipment
-
- Motor vehicles
Software
-
Net transfers (from) provisions – employee benefits
Realised gain/(loss) on disposal of financial assets at fair value through profit and
loss
1,656
24,469
19,685
2,972
63,507
-
18,322,169
15,104,907
14,327,353
11,858,377
103,414
95,701
6,412
15,271
1,473
(10,575)
291,002
6,664
4,852
2,070
17,396
(80,523)
Impairment (gain)/loss on financial assets at fair value through profit and loss
(870,015)
835,848
NOTE 6: INCOME TAX
(a)
Income tax expense
Current
tax
Deferred tax
Recoupment of prior year tax losses
Deferred income tax expense included:
Decrease in deferred tax asset
Increase in deferred tax liability
750,702
194,163
-
944,865
661,272
(113,928)
(25,980)
521,364
11
244,674
113,231
-
(697)
244,674
112,534
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit from continuing operations before income tax expense at 30% (2015:30%)
934,990
398,726
Add tax effect of:
Imputation credits
Other assessable income
(2,202)
-
5,726
-
Non-deductible depreciation and amortisation and other non-allowable items
(265,815)
259,440
Less tax effect of:
Non-assessable income & imputation credit
Deductible expenses
Recoupment of prior year tax losses
DTA previously not recognised
Income tax expense
-
1,113
-
276,779
944,865
-
(2,620)
(25,980)
(113,928)
521,364
Page 35 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
NOTES TO THE FINANCIAL STATEMENTS
NOTE 7: CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Bank deposits at call
Note
Consolidated Group
2016
$
3,653,063
755,640
4,408,703
2015
$
1,774,785
63,945
1,838,730
The effective interest rate on bank deposits at call 2.0% (2015: 1.5%)
Reconciliation of cash
Cash at the end of the financial year as shown in the cash flow statement is reconciled to items
in the balance sheet as follows:
Cash and cash equivalents
Interest rate exposure
The Group and the parent entitiy’s exposure to interest rate risk is discussed in Note 2.
NOTE 8: CURRENT ASSETS - TRADE AND OTHER RECEIVABLES
Trade receivables
Provision for impairment of receivables
Other receivables
4,408,703
4,408,703
1,838,730
1,838,730
2,817,824
-
2,817,824
264,875
2,632,534
-
2,632,534
3,707
3,082,699
2,636,241
NOTE 8: CURRENT ASSETS – TRADE AND OTHER RECEIVABLES (continued)
(a) Past due but not impaired
As at 30 June 2016, trade receivables of $375,539 (2015: $172,247) were past due but not impaired. These relate to a
number of independent customers for whom there is no recent history of default. The ageing analysis of these trade
receivables is as follows:-
30-60 days
61-90 days
90+ days
(b) Credit terms
310,095
169,404
1,980
63,464
899
1,944
375,539
172,247
Credit terms which apply to trade customers are payment within 30 days from date of invoice.
(c) Fair value and credit risk
Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair value.
The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned
above. Refer to Note 2 for further information on the risk management policy of the Group and the credit quality of the
entity’s trade receivables.
NOTE 9: CURRENT ASSETS – FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT &
LOSS
Financial assets at fair value through profit and loss are all held for trading and include the following:
Australian listed equity securities
560,036
654,343
Changes in the fair value of financial assets at fair value through profit and loss are recorded in the income statement. Refer to
expenses Note 5.
These financial assets have been classifed as financial assets at fair value through profit and loss as they have been acquired
principally for the purpose of selling in the short term and are held for trading.
Information about the Group’s exposure to credit and price risk is provided in Note 2.
Page 36 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
NOTES TO THE FINANCIAL STATEMENTS
NOTE 10: NON-CURRENT ASSETS – PLANT AND EQUIPMENT
As at 1 July 2015
Cost or fair value
Accumulated depreciation
Net book value
Year ended 30 June 2016
Opening net book balance
Additions
Disposal
Depreciation charge
Net book balance
As at 30 June 2016
Cost or fair value
Accumulated depreciation
Net book value
Consolidated Entity
Plant & Equipment
Leasehold
Improvements
Motor vehicles
TOTAL
$
$
$
$
225,461
(212,663)
12,798
12,798
7,486
-
(6,412)
13,872
232,947
(219,075)
13,872
32,453
(32,453)
-
82,974
(65,609)
17,365
340,888
(310,725)
30,163
-
-
-
-
32,453
(32,453)
-
-
17,365
70,894
(16,186)
(15,271)
30,163
78,380
(16,186)
(21,683)
56,802
70,674
70,894
(14,092)
336,294
(265,620)
56,802
70,674
Plant and equipment has been tested for impairment at 30 June 2016 resulting in no impairment loss.
NOTE 11: NON-CURRENT ASSETS – DEFERRED TAX ASSETS
The balance comprises temporary differences attributable to :
Provisions
Fair value loss adjustments
Prior year tax losses brought to account
Total deferred tax assets
NOTE 12: NON-CURRENT ASSETS - INTANGIBLE ASSETS
Note
Consolidated Group
2016
$
24,787
28,074
-
52,861
2015
$
38,054
285,461
(25,980)
297,535
Consolidated Group
Intangibles at cost
At 1 July 2014
Computer software at cost
Accumulated amortisation and impairment
Net book value
Year ended 30 June 2015
Opening net book balance
Additions
Accumulated amortisation and impairment
Net book value
As at 30 June 2015
Computer software at cost
Accumulated amortisation and impairment
Net book value
Year ended 30 June 2016
Opening net book balance
Additions
Accumulated amortisation and impairment
Net book value
As at 30 June 2016
Computer software at cost
Accumulated amortisation and impairment
Net book value
Page 37 of 44
1,086,788
(1,083,245)
3,543
3,543
2,137
(2,070)
3,610
1,088,925
(1,085,315)
3,610
3,610
140
(1,473)
2,277
1,089,065
(1,086,788)
2,277
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
NOTES TO THE FINANCIAL STATEMENTS
NOTE 13: NON-CURRENT ASSETS – OTHER ASSETS
Security deposit for leased premises
NOTE 14: CURRENT LIABILITIES - TRADE AND OTHER PAYABLES
Unsecured liabilities
Trade payables
Sundry payables and accrued expenses
NOTE 15: PROVISION FOR TAXATION
Current Income Tax
NOTE 16: LIABILITIES – SHORT AND LONG TERM PROVISIONS
Employee benefits
Reconciliation of movement in the liability is recognized in the balance sheet as follows:-
Prior year closing balance
Increase in provision
Current year closing balance
Provisions
-
-
Total current
Total non-current
NOTE 17: CONTRIBUTED EQUITY
Consolidated Group
2016
$
2015
$
24,063
24,063
158,989
1,258,782
944,408
88,626
1,417,771
1,033 ,034
750,702
620,715
93,579
104,154
104,154
(10,575)
86,758
17,396
93,579
104,154
63,543
30,036
93,579
95,526
8,628
104,154
31,000,000 fully paid ordinary share (2015: 31,000,000)
Ordinary shareholders participate in dividends and the proceeds of winding-up of the parent entity in proportion to the number of
shares held.
At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has
one vote on a show of hands.
No shares were issued during the financial year
2,869,213
2,869,213
Share Options
Information relating to Group’s employee share option plan, including details of options issued, exercised and lapsed during the
financial year and options outstanding at the end of the financial year, is set out in Note 30.
Capital risk management
The Group’s objective when managing capital
is to safeguard their ability to continue as a going concern, so that they can
continue to provide returns to shareholders and benefits to other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
There are no externally imposed capital requirements and the Group’s capital management strategy has not changed during the
reporting period.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 18: RESERVES
The share option reserve records items recognised as expense on valuation of employee and director share options. Options
issued during the year to non key management personnel have been valued using the Black-Scholes options pricing model (refer to
Note 30).
Movements
Balance a at 1 July
Page 38 of 44
Consolidated Group
2016
$
2015
$
308,489
307,060
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Employee option expenses
Balance 30 June
NOTE 19: DIVIDENDS
Dividends paid
Franking credits available for subsequent financial years based on a tax rate of 30%
(2015: 30%)
NOTE 20: KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Key management personnel compensation:-
Short-term employee benefits
Post-employment benefits
Long Service Leave
7,398
315,887
1,429
308,489
-
-
240,353
240,353
629,758
44,699
36,410
710,867
557,656
25,437
35,969
619,062
Details of key management personnel compensation are disclosed in the Remuneration Report on pages 15-17.
(b) Equity instrument disclosures relating to key management personnel
(i) Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and shares issued on the exercise of such options, together with terms
and conditions of the options can be found in the Remuneration Report on pages 15-17.
(ii) Options holdings
2016
Staff
2015
Staff
Balance
1.7.16
3,900,000
Granted as
Remun-
eration
-
-
-
Options
Exercised
-
-
Balance
1.7.14
400,000
400,000
Granted as
Remun-
eration
-
-
Options
Exercised
-
-
Options
Cancelled/
lapsed
-
-
Options
Cancelled/
lapsed
-
-
Balance
30.6.16
3,900,000
-
Total Vested and
Exercisable
30.6.16
-
-
Total un-
exercisable
30.6.16
3,900,000
-
Balance
30.6.15
400,000
400,000
Total Vested and
Exercisable
30.6.15
-
Total un-
exercisable
30.6.15
400,000
-
400,000
(iii) Shareholdings
2016
No of shares held by Key Management Personnel
R. Hazouri
E. Hazouri
Balance
1.7.15
Received as
Remuneration
Options
Exercised
Balance
30.6.16
18,460,000
26,202
18,486,202
-
-
-
-
-
-
18,460,000
26,202
18,486,202
2015
The shareholding of key management personnel in 2016 was unchanged from 2015.
No specified executives or non-executive directors hold shares in the Parent Entity.
NOTE 21: REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided by the auditor of the parent entity:-
Consolidated Group
2016
$
2015
$
Audit and review of the financial statements
Other services:
- preparation of tax return and other services
NOTE 22: CONTINGENT ASSETS AND CONTINGENT LIABILITIES
There were no contingent assets or contingent liabilities at balance date.
NOTE 23: COMMITMENTS
Non-cancellable operating leases
Page 39 of 44
11,845
10,800
-
-
11,845
10,800
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
The Group Head Office lease was previously executed for the period 1 January 2013 to 31 December 2015. The current lease
is a periodic lease with rent payable monthly in advance.
NOTE 24: RELATED PARTY DISCLOSURES
(a)
(b)
Subsidiaries
Interests in subsidiaries are set out in Note 25.
Key management personnel
Disclosures relating to key management personnel are set out in Note 20.
NOTE 25: SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with
the accounting policy described in Note 1(b)
Name of entity
Country of Incorporation
Class of Shares
Equity holding**
2016
2015
Parent entity
HiTech Group Australia Limited
Controlled entities
HiTech Contracting Pty Ltd*
eConsulting Australia Pty Ltd*
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
* These subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with Class Order
98/1418 issued by the Australian Securities and Investments Commission.
** The proportion of ownership interest is equal to the proportion of voting power held.
NOTE 26: PARENT ENTITY FINANCIAL INFORMATION
The individual financial statements for the parent entity show the following aggregate amounts:-
Statement of Financial Position
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Contributed equity
Option reserve
Retained losses
Total equity
(Loss)/Profit for the year
Total Comprehensive income
Parent Entity
2016
$
2015
$
8,065,860
8,215,735
2,232,016
2,262,052
5,152,031
5,507,402
1,749,275
1,757,903
2,869,213
2,869,213
340,905
571,797
5,953,683
2,171,768
2,171,768
308,489
571,797
3,749,499
807,721
807,721
NOTES TO THE FINANCIAL STATEMENTS
NOTE 27: SUBSEQUENT EVENTS
The directors have declared a fully franked final dividend of 2 cents per share. The dividend was paid on 23 September, 2016 to
shareholders registered on close of business on 9 September, 2016.
NOTE 28: RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM
OPERATING ACTIVITIES
Profit from ordinary activities after related income tax
Depreciation and amortisation of non-current assets
Net loss/(gain) on sale of financial assets
Equity settled share based payments
Unrealized (gain)/loss on financial assets
Gain in disposal of plant and equipment
Decrease/(Increase) in assets
Trade and other receivables
Prepayments
Page 40 of 44
Consolidated Group
2016
$
2,171,769
23,156
291,002
32,416
(870,015)
(17,117)
2015
$
807,721
13,586
(80,523)
1,430
835,848
-
(446,458)
8,295
(1,033,764)
(11,384)
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Deferred tax assets
Increase/(Decrease) in liabilities
Provisions
Trade payables
Provision
Deferred tax liability
Net cash flows (used in)/from operating activities
NOTE 29: EARNINGS PER SHARE
Consolidated Group
2016
$
2015
$
244,674
(113,231)
129,987
384,737
(10,575)
-
620,715
102,042
28,171
(697)
1,941,870
1,169,914
Cents per ShareCents per Share
Basic earnings per share
7.01
Diluted earnings per share
Basic earnings per share
The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as
follows:-
7.01
2.61
2.61
Earnings (i)
$
$
2,171,768
807,721
No
31,000,000
Earnings used in the calculation of basic earnings per share are net profit after tax as per the income statement.
Weighted average number of ordinary shares (ii)
(i)
No.
31,000,000
(ii) The options outstanding are considered to be potential ordinary shares and therefore have not been included in the
determination of basic earnings per share. Where dilutive, these potential ordinary shares are included in the
determination of diluted earnings per share on the basis that each option will convert to one ordinary share (refer below).
Diluted earnings per share
(a) Earnings used in the calculation of diluted earnings per share reconciles to net profit in the income statement as follows:
Net (loss)/ profit
$
$
2,171,768
807,721
(b) Weighted average number of ordinary shares and potential ordinary shares used in the calculation of diluted earnings per
share reconciles to the weighted average number of ordinary shares used in the calculation of basic earnings per share as
follows:
WWeighted average number of ordinary shares outstanding during the year used in
calculating basic EPS
WWeighted average number of options outstanding
WWeighted average number of ordinary shares outstanding during the year used in
calculating diluted EPS
No
No
31,000,000
-
31,000,000
-
31,000,000
31,000,000
Page 41 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
NOTES TO THE FINANCIAL STATEMENTS
NOTE 30: SHARE-BASED PAYMENTS
Employee option plan
The Company has established an employee share option plan in respect of which share options may be issued to participating
employees and executive directors. Options issued to directors are approved by shareholders at annual general meetings.
The directors consider that the option plan provides employees and directors invited to take part in the plan, with an opportunity
and an incentive to participate in the company’s future growth and success.
The allocation of options to an employee or directors under the option plan is based on his or her potential future contributions
to the growth and profitability of the company.
When the options are converted to shares they carry full dividend and voting rights.
The closing share price of an ordinary share of HiTech Group Australia Limited on the Australian Stock Exchange at 30 June
2016 was 37.0 cents.
Balance at beginning of financial year (i)
Granted during the financial year (ii)
Exercised during the financial year
Lapsed/cancelled during the financial year (iii)
Outstanding at end of financial year (iv)
Fair value of options granted
No
2016
Weighted
Average
Exercise
Price
0.03
0.04
0.06
0.22
400,000
2,900,000
1,000,000
1,600,000
-
400,000
5,500,000
No
2015
Weighted
Average
Exercise Price
400,000
2,900,000
1,000,000
0.03
0.04
0.06
-
-
4,300,000
The assessed fair value at grant date of options granted during the year was determined using a Black-Scholes option pricing
model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and
expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the
option.
(i) Balance at beginning of financial year
Option series
No.
Grant Date
Exercise Date
Expiry date
Issued 2012
Issued 2007
Issued 2004
400,000
2,900,000
1,000,000
4,300,000
(ii)
Issued during the financial year
1/07/2012
5/06/2007
1/11/2004
14/06/2015
5/06/2007
1/11/2004
30/06/2015
5/06/2017
1/11/2019
1,600,000 options issued on 17/02/2016 to employees under the HiTech Employee Option Plan.
(iii)
Lapsed/cancelled during the financial year
Option series
No.
Grant Date
Exercise Date
Expiry date
Exercise Price
$
0.03
0.04
0.06
Exercise Price
$
Issued 7/2012
400,000
1/7/2012
14/06/2015
30/06/2015
0.03
Page 42 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
STOCK EXCHANGE INFORMATION
Statement of quoted securities as at 6 October 2016
DISTRIBUTION
•
•
•
There are 373 shareholders holding a total of 31,000,000 ordinary fully paid shares on issue by the Company.
The twenty largest shareholders between them hold 85.56% of the total issued shares on issue.
Voting rights for ordinary shares are that on a show of hands each member present in person or by proxy or attorney
or representative shall have one vote and upon a poll every member so present shall have one vote for every fully
paid share held and for each partly paid share held shall have a fraction of a vote pro-rata to the amount paid up on
each partly paid share relative to its issue price.
Distribution of quoted securities as at 6 October 2016
Ordinary fully paid shares
Range of holding
Number of holders
1 -
1,001 -
5,001 -
10,001 -
100,001 -
Total holders
1,000
5,000
10,000
100,000
and over
30
177
51
94
21
373
There are 16 shareholders holding less than a marketable parcel.
Substantial shareholdings as at 25 October 2016 of Fully Paid Ordinary Shares
Ordinary shareholder
Total relevant interest notified
% of total voting rights
Rayhazouri Nominees Pty Limited
and Raymond Hazouri
18,460,000 ordinary shares
Salem Hazouri
1,980,000 ordinary shares
59.07%
6.39%
Directors' share and option holdings
As at 6 October 2016 directors of the Company held a relevant interest in the following shares and options issued by the
Company.
Director
Shares
Options
R Hazouri
G. Shad
E Hazouri
18,460,000
-
26,202
-
-
3,900,000
On-market buy-backs
There is no on-market buy back currently in place in relation to the securities of the company.
Material differences to Appendix 4E
There are no material differences to the financial statements set out in this report when compared to the information set out in
the Company’s Appendix 4E preliminary final statement released to the ASX on 22 August 2016.
Restricted securities
There are no restricted securities on issue by the Company.
Page 43 of 44
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
STOCK EXCHANGE INFORMATION
TOP TWENTY SHAREHOLDERS
Rank
Shareholder name
Number of ordinary fully
paid shares held
% of total ordinary
shares on issue
1 RAYHAZOURI NOMINEES PTY LIMITED
2 RAYMOND HAZOURI
3
SALEM HAZOURI
4 MR JOHN RICHARD SNELL
5 CLAPSY PTY LTD
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