Excellence in Recruitment & Consulting
HiTech Group Australia Limited
A.B.N. 41 062 067 878
Financial Statements 2021
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Table of Contents
DIRECTORS’ REPORT ............................................................................................................................... 3
DIRECTORS’ DECLARATION ..................................................................................................................... 9
AUDITOR’S INDEPENDENCE DECLARATION ..........................................................................................10
INDEPENDENT AUDIT REPORT ..............................................................................................................11
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME.............16
CONSOLIDATED STATEMENT OF FINANCIAL POSITION........................................................................17
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY.........................................................................18
CONSOLIDATED STATEMENT OF CASH FLOWS.....................................................................................19
NOTES TO THE FINANCIAL STATEMENTS..............................................................................................20
Page 2 of 34
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 2021.
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 30 years’ experience in the IT industry. Prior to
establishing HiTech, Ray worked in several 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: 17,660,000 ordinary shares and 2,000,000 options 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 several 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
Interest in shares: 250,000 ordinary shares in HiTech Group Australia Limited.
Other current and former directorship in last three years: Nil
Elias Hazouri
Executive Director, Chief Executive Officer, Company Secretary (appointed Company Secretary 13
February 2015)
Qualifications: B Sc, MBA
Experience: Appointed to the Board on 30 July 2003 as an alternate Director representing Ray Hazouri
when he was not available. Over 30 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.
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: 7,776,202 ordinary shares, 1,050,000 options in HiTech Group Australia
Limited beneficially owned by him.
Other current and former directorship in last three years: Nil
Page 3 of 34
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
committee meetings were held.
Board of Directors
Audit Committee
No eligible to
Attend
Attended
No eligible to
Attend
Attended
Mr R Hazouri (*by invitation)
Mr E Hazouri
Mr G Shad
2
2
2
2
2
2
2*
2
2
2*
2
2
Dividends
The directors have declared a fully franked dividend of 5 cents per share which will be paid on 15
September 2021 to shareholders registered on close of business on 1 September 2021.
Earnings per share
Basic and Diluted earnings per share
9.32
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 sector.
During the financial year, there were no significant changes in the nature of these operations.
Group overview
The HiTech Group currently supplies permanent and contract staff
from its large, personalised,
database of over 386,000 specialised ICT, Finance and Office Support professionals which has been
developed over the past 28 years. Its main business comes from IT contracting/consulting.
The HiTech client base is well established, with strong representation by technology companies,
banking/financial services companies plus Federal & State Government departments and agencies.
HiTech has also entered into preferred supplier agreements for the supply of staff in both the public and
private sectors.
Page 4 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Operating and financial review
Operating results
For the financial year ended 30 June 2021, the consolidated entity’s operating revenue is $42,168,504
an increase of 26% over the previous corresponding period (pcp):
EBITDA is $5,214,886, an increase of 20% over pcp
Gross Profit is $7,059,491, an increase of 16% over pcp (FY20: $6,105,679).
NPAT is $3,636,602, an increase of 9% over pcp
Basic and Diluted EPS is 9.32 cents, an increase of 6% over pcp
Our Net Tangible Assets (NTA) is $0.16 per share.
Permanent recruitment comprises the search and selection of candidates for full time employment. 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 strong recurring cash
flow.
HiTech’s recruitment business is broadly based in the ICT sector and operates across the full range of
ICT services, including digital transformation, systems development, infrastructure architecture & cloud
integration, operations, support and project management. As the digital transformation cycle gains
momentum, there is a growing need for skilled ICT professionals, especially in the digital specialisation
space. HiTech is addressing the demand for specialised ICT skills by making use of its database and
comprehensive contacts internationally.
We have scope to grow our revenue by further developing our other divisions including; office support,
sales and finance. Whilst this diversification remains minor in comparison to ICT consulting and
recruitment, it allows us to potentially grow our earnings further.
HiTech’s reputation for top quality service and the provision of the best talent available, has resulted in
HiTech establishing a small but successful niche market position. The demand for quality technical
candidates has accelerated over the past 12 months.
HiTech’s market share of the total multibillion dollar Australian consulting & recruitment market is
relatively small but increasing. This represents a significant growth potential for the group. HiTech is
focused on servicing existing clients by providing a complete recruitment and ICT service solutions
(Managed Services) in addition to contracting.
As HiTech’s core competency is in recruitment & talent acquisition, our strategy is to build on our existing
client base and maximise revenue from existing clients by effectively providing personnel to not only the
ICT sector but also to other sectors such as administration and office support, sales and marketing, and
finance. 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 FY2022 growth will depend on the prevailing economic conditions at the time. Whilst the COVID-
19 impact has been to slow national economic activity, there are signs of continuing demand for ICT
digital specialists in the market despite lockdown conditions. The most significant fact for us will be the
continuation of strong demand for ICT specialists including cloud & cyber security expertise. Skilled
professionals of top quality remain in high demand. 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 and further enhancing existing client business.
Significant Changes in state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial
year.
Events subsequent to reporting date
The directors declared a fully franked final dividend of 5 cents per share. The dividend will be paid on
15 September 2021 to shareholders registered on close of business on 1 September 2021. (Note 18)
Page 5 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
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.
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 and 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. All executive key management 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:
Refer to note 29 for disclosure of share and option details.
Page 6 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Remuneration - Key management personnel of the Group 2021
2021
Short-term
employee Benefits
Post-employment
benefits
Long-term
benefits
Cash salary and
fees
Superannuation
Long service
leave
Name
Non-executive directors
G. Shad*
Sub-total non-executive
directors
Executive directors
R. Hazouri
E. Hazouri
Sub-total
Executive directors
Name
Non-executive directors
G. Shad*
Sub-total non-executive
directors
Executive directors
R. Hazouri
E. Hazouri
Sub-total
$
10,000
10,000
275,000
576,133
851,133
$
10,000
10,000
475,000
450,133
$
-
-
26,124
54,732
80,856
80,856
-
-
5,301
-
5,301
5,301
$
-
-
30,874
54,732
48,712
48,712
-
-
5,316
-
5,316
5,316
Total
$
10,000
10,000
306,425
630,865
937,290
947,290
Total
$
10,000
10,000
511,190
504,865
1,016,055
1,026,055
Total compensation (group)
861,133
Remuneration - Key management personnel of the Group 2020
2020
Short-term
employee Benefits
Post-employment
benefits
Long-term benefits
Cash salary and
fees
Superannuation
Long service leave
Executive directors
799,896
Total compensation (group)
809,896
* Wholly paid to a related entity of the key management person
Group performance in relation to key management personnel compensation
The following table shows the performance of the Consolidated Group over the past six financial years:-
FY
2015
2016
2017
2018
2019
2020
2021
Sales
Revenue
$
15,104,907
18,322,169
22,234,598
26,356,197
30,256,920
33,357,189
42,051,802
NPAT/(NLAT)
$
807,721
2,171,768
2,485,346
2,675,554
2,898,316
3,336,117
3,636,602
Basic
EPS
Cents
Diluted
EPS
Cents
2.61
7.01
6.57
6.75
7.62
8.77
9.32
2.61
7.01
6.55
6.75
7.62
8.77
9.32
NTA
per
Net Equity
share Dividends
$
3,749,499
5,953,683
6,664,836
7,411,833
7,266,148
6,349,515
6,319,116
cents
12.08
19.00
19.00
19.00
19.00
16.00
16.00
$
-
-
1,674,500
2,460,500
3,044,000
3,614,750
3,667,001
Average
Share
Price
Cents
7.50
22.00
56.00
83.22
101.00
119.90
182.00
The outlook for FY2022 will depend on the prevailing state of the local and global economy. We cannot
forecast exact results at this point.
Page 7 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Employment contracts
Mr Ray Hazouri, is employed under a contract, and the CEO, Mr Elias Hazouri, is employed under a
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’ fixed component of remuneration.
END OF AUDITED REMUNERATION REPORT
Page 8 of 34
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 16-34, 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 2021
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, 14 September 2021
Page 9 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
AUDITOR’S INDEPENDENCE
DECLARATION
The lead auditor’s independence declaration for the year ended 30 June, 2021, as required under
section 307C of the Corporations Act 2001, has been received and is set out on page 19 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,
2021:
Taxation services
$ 1,800
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, 14 September 2021
Page 10 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CONSOLIDATED STATEMENT OF PROFIT
AND LOSS AND OTHER COMPREHENSIVE
INCOME
For the Financial Year Ended 30 June 2021
Revenue from continuing operations
Sales Revenue
Cost of sales
Gross Profit
Other revenue
Marketing expenses
Occupancy expenses
Insurance and legal expenses
Administration expenses
Other expenses
Profit before income tax
Income tax expense
Profit attributable to members of the parent entity
Other comprehensive income
Total comprehensive income for the year
Earnings per Share:
Note
4(a)
5
Consolidated Group
2021
$
2020
$
42,051,802
33,357,189
(34,992,311)
(27,251,510)
7,059,491
6,105,679
4(b)
116,702
23,720
(10,982)
(17,242)
(171,484)
(202,774)
(16,055)
(11,011)
(1,662,359)
(1,472,949)
(203,687)
(188,989)
5,111,626
4,236,434
6
(1,475,024)
(900,317)
3,636,602
3,336,117
-
-
3,636,602
3,336,117
Basic and diluted earnings (cents per share)
28
9.32
8.77
Notes to financial statements are included on pages 20-34
Page 16 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
As at 30 June 2021
Consolidated Group
2021
$
2020
$
Notes
7
8
9
10
12
13
14
15
22
11
16
22
16
6,612,460
7,608,206
3,443,031
2,805,159
63,639
32,730
10,119,130
10,446,095
536,741
222,430
166,454
-
234,236
48,206
8,700
-
400,580
47,734
985,637
679,444
11,104,767
11,125,539
3,646,307
3,358,486
270,052
173,885
-
552,393
157,610
50,921
185,867
126,537
378,447
240,030
4,654,358
4,485,977
76,588
54,705
250,473
39,574
131,293
290,047
4,785,651
4,776,024
6,319,116
6,349,515
17
3,738,213
3,738,213
185,638
185,638
2,395,265
2,425,664
6,319,116
6,349,515
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Deferred tax assets
Intangible assets
Right of Use assets
Other non-current assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provision for taxation
Lease liabilities
Other current liabilities
Deferred tax liabilities
Short-term provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities
Long term provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
Notes to financial statements are included on pages 20-34
Page 17 of 34
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 2021
Share Capital
Ordinary
Retained
Earnings
Employee
Equity-settled
Benefits
Reserve
Total
$
$
$
$
Balance at 1/7/2019
3,738,213
2,704,297
185,638
6,628,148
Total dividends paid for the year
Total comprehensive profit for the year
Balance at 30/6/2020
Balance at 1/7/2020
Total Dividends paid for the year
Total comprehensive income for the year
-
-
(3,614,750)
3,336,117
-
-
(3,614,750)
3,336,117
3,738,213
2,425,664
185,638
6,349,515
3,738,213
2,425,664
185,638
6,349,515
-
-
(3,667,001)
3,636,602
-
-
(3,667,001)
3,673,902
6,319,118
Balance at 30/6/2021
3,738,213
2,395,265
185,638
Page 18 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
CONSOLIDATED STATEMENT OF CASH
FLOWS
For the Financial Year Ended 30 June 2020
Note
Consolidated Group
2021
$
2020
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Income tax (expenses)/refund
Net cash provided by operating activities
27
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets
Purchase for property, plant and equipment
Net cash (used in) / provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of Borrowings
Dividend Paid
Net cash (used in) / provided by financing activities
Net (decrease) / increase in cash and cash equivalents held
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
42,713,728
36,351,779
(38,481,592)
(30,362,728)
2,857
(1,354,375)
2,880,375
(20,585)
(205,053)
(225,638)
22,767
(859,594)
5,152,224
(18,439)
3,870
(14,569)
16,275
157,610
(3,667,001)
(3,614,750)
(3,650,726)
(3,457,140)
(995,746)
7,608,206
6,612,460
1,680,516
5,927,960
7,608,206
Page 19 of 34
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
group 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
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001.
The financial report was authorised for issue on 14 September 2021 by the Board of Directors.
(i)
Compliance with IFRS
The consolidated financial statements of the HiTech Group Australia Limited Group also comply with 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)
The Group had $6,612,460 in cash at 30 June 2021;
The Group has budgeted for sales in FY2022 at the same level of FY2021 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 2021 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.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the group.
(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 20 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
(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 to
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 time of
the transaction affects neither accounting nor taxable profit or 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.
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)
Operating Leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the group as lessee are
In relation to operating leases, a right of use asset and a lease liability is recognised with
classified as operating leases.
the right of use asset being depreciated and the lease liability being unwound in principal and interest components over
the life of the lease.
(h)
Impairment of assets
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.
Page 21 of 34
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)
(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 statement of financial
position.
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 statement of financial position.
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 derecognition
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.
Page 22 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
NOTES TO THE FINANCIAL STATEMENTS
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).
(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.
(n)
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.
(o)
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.
(p)
Employee benefits
(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.
Page 23 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
(ii)
Share-based payments
Share-based compensation benefits may be provided to directors, employees and company consultants.
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
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 statement of financial position.
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
entities which are recorded at fair value at balance date being the closing market bid price on that day.
Impairment gains
during the reporting period have been recorded as other income in the statement of profit or loss and other comprehensive
income.
Key judgements – impairment of receivables
The directors have reviewed outstanding debtors as at 30 June 2019 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 25 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.
Page 24 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
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
Deposits at call
Trade and other receivables
Financial assets at fair value through profit or loss
Other assets
Financial Liabilities
Trade and other payables
(a)
Credit risk
Consolidated Group
2021
$
2020
$
5,062,301
6,060,904
1,550,159
1,547,302
3,443,031
2,805,159
-
-
48,206
47,733
10,103,697
10,461,098
3,646,307
2,720,486
3,646,307
2,720,486
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.
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:
Consolidated Group
2021
$
2020
$
Trade and other receivables
Counterparts with external credit rating (Moody’s)
AAA Federal government departments and instrumentalities
3,204,682
2,481,541
Counterparts without external credit rating
Group 1
Group 2
Group 3
Total trade and other receivables
Cash at bank and short-term bank deposits
AA2
-
238,349
-
48,654
274,964
-
3,443,031
2,805,159
6,612,460
7,608,206
Group 1 — new customers (less than 6 months)
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.
Page 25 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
(b) 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
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
requirements.
All financial liabilities are due to be settled in less than one year.
liabilities and uses existing cash and funds generated from operations to balance cash flow
Weighted Av.
Interest Rate
Interest free
Floating
Fixed interest maturing
1 to 5
years
1 year or less
Total
2021
Financial Assets
Cash
Deposits at call
Trade and other
receivables
Other assets
Financial Liabilities
Trade and other payables
2020
Financial Assets
Cash
Deposits at call
Trade and other
receivables
Other assets
Financial Liabilities
Trade and other payables
NA
1.00%
NA
NA
NA
-
5,062,301
1,550,159
3,443,031
3,443,031
6,612,460
48,206
48,206
3,646,307
3,646,307
Weighted Av.
Interest Rate
Interest free
Floating
Fixed interest maturing
1 to 5
years
1 year or less
NA
1.01%
NA
NA
NA
-
6,060,904
1,547,302
2,805,159
32,730
2,805,159
7,640,936
47,734
47,734
2,720,486
2,720,486
Page 26 of 34
-
-
-
-
5,062,301
1,550,159
3,443,031
48,206
10,103,697
3,646,307
3,646,307
Total
6,060,904
1,547,302
2,805,159
80,464
10,493,829
2,720,486
2,720,486
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
Consolidated Group
2021
$
2020
$
- Contracting and permanent placement revenue (i)
42,051,802
33,357,189
(b) Other revenue
-
Interest received – other entities
- Other
Total revenue
3,329
113,373
23,720
-
42,168,504
33,380,909
(i) Contracting revenue includes permanent placement fees, commission earned on contracting and contract services provided.
NOTE 5: EXPENSES
Cost of providing services
Rental expenses on operating leases
- Minimum lease payments
Depreciation and amortisation of non-current assets
- Plant and equipment
- Motor vehicles
- Software
Net transfers to provisions – employee benefits
NOTE 6: INCOME TAX
(a)
Income tax expense
Current tax
Deferred tax
Consolidated Group
2021
$
2020
$
34,992,311
27,251,510
171,483
202,774
36,251
53,122
43,240
45,733
20,855
19,298
153,548
58,886
1,289,358
818,988
185,666
81,329
1,475,024
900,317
(b)
Numerical reconciliation of income tax (benefit)/expenses to prima facie tax payable
Page 27 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Profit before income tax expense at 26%
Add tax effect of:
Other assessable income
Non-deductible depreciation and amortisation and other non-allowable items
Less tax effect of:
Non-assessable income
Deductible Expenses
DTA previously not recognised
Income tax expense
NOTE 7: CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Bank term deposits
The effective interest rate on bank deposits at call is 1.00%
Reconciliation of cash
Cash at the end of the financial year as shown in the cash flow statement is
reconciled to items in the statement of financial position as follows:
Cash and cash equivalents
Interest rate exposure
The Group and the parent entity’s exposure to interest rate risk is discussed in Note 2.
NOTE 8: CURRENT ASSETS - TRADE AND OTHER RECEIVABLES
Trade and other receivables
(a) Impaired trade receivables
1,329,023
1,134,166
(74,030)
(226,924)
(6,856)
-
9,750
50,683
1,775
166,454
(8,700)
1,475,024
900,317
Consolidated Group
2021
$
5,062,301
1,550,159
2020
$
6,060,904
1,547,302
6,612,460
7,608,206
6,612,460
6,612,460
7,608,206
7,608,206
Consolidated Group
2021
$
2020
$
3,443,031
2,805,159
As at 30 June 2021, none of the trade receivables of the Group were impaired (2020: $0)
(b) Past due but not impaired
As at 30 June 2021, trade receivable of $264,784 (2020: $86,803) 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
(c) Credit terms
Page 28 of 34
134,088
130,696
65,977
23,424
-
(2,598)
264,784
86,803
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Credit terms which apply to trade customers are payment within 30 days from date of invoice.
(d) 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: OTHER CURRENT ASSETS
Prepayment
63,639
32.730
63,639
32,730
NOTE 10: NON-CURRENT ASSETS – PLANT AND EQUIPMENT
As at 01 July 2020
Cost or fair value
Accumulated depreciation
Net book value
Year ended 30 June 2021
Opening net book balance
Additions
Depreciation charge
Net book balance
As at 30 June 2021
Cost or fair value
Accumulated depreciation
Net book value
Consolidated Entity
Plant & Equipment
Leasehold
Improvements
Motor vehicles
$
$
$
482,286
(448,892)
33,394
33,394
165,962
(26,911)
172,445
648,248
(475,803)
172,445
79,303
(68,321)
10,981
10,981
-
(9,340)
1,641
79,303
(77,662)
1,641
278,772
(100,717)
178,055
178,055
227,841
(43,241)
362,655
506,613
(143,958)
362,655
TOTAL
$
840,361
(617,930)
222,430
222,430
393,803
(79,492)
536,741
1,234,164
(697,423)
536,741
Plant and equipment has been tested for impairment at 30 June 2021 resulting in no impairment loss.
NOTE 11: DEFERRED TAX LIABILITIES
The balance comprises temporary differences attributable to:
Provisions
Total deferred tax liabilities
NOTE 12: NON-CURRENT ASSETS - INTANGIBLE ASSETS
Consolidated Group
2021
$
2020
$
Note
185,666
185,666
126,537
126,537
At 1 July 2019
Computer software at cost
Accumulated Amortisation and impairment
Net book value
Year ended 30 June 2020
Page 29 of 34
Consolidated Group
$
1,108,370
(1,107,511)
859
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Opening net book balance
Additions
Amortisation and impairment
Net book value
As at 30 June 2020
Computer software at cost
Accumulated Amortisation and impairment
Net book value
Year ended 30 June 2021
Opening net book balance
Additions
Amortisation and impairment
Net book value
As at 30 June 2020
Computer software at cost
Accumulated Amortisation and impairment
Net book value
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
859
18,438
(19,297)
-
1,126,809
(1,126,809)
-
-
20,855
(20,855)
-
1,126,809
(1,126,809)
-
Consolidated Group
2021
$
48,206
48,206
2020
$
47,734
47,734
Consolidated Group
2021
$
315,835
3,330,472
3,646,307
2020
$
315,835
2,252,734
2,720,486
Consolidated Group
2021
$
270,433
2020
$
552,393
Page 30 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
NOTE 16: CURRENT LIABILITIES – SHORT-TERM PROVISIONS
Consolidated Group
Employee benefits
Reconciliation of movement in the liability is recognized in the statement of financial position
as follows:-
Prior year closing balance
Increase / (Decrease) in provision
Current year closing balance
Provisions
-
-
Total current
Total non-current
NOTE 17: CONTRIBUTED EQUITY
39,000,000 ordinary shares (2020: 38,050,000)
3,738,213
2021
$
2020
$
433,152
279,604
279,604
155,548
220,718
58,886
279,604
220,718
378,447
240,030
54,705
39,574
433,152
279,604
Consolidated Group
2021
$
3,738,213
2020
$
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.
Share Options
Information relating to the 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 29.
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.
NOTE 18: DIVIDENDS
Dividends paid
NOTE 19: KEY MANAGEMENT PERSONNEL DISCLOSURES
Page 31 of 34
Consolidated Group
2021
$
2020
$
3,667,001
3,614,750
Consolidated Group
2021
$
2020
$
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
(a) Key management personnel compensation:
Short-term employee benefits
Post-employment benefits
Long Service Leave
861,133
80,856
935,133
85,606
5,301
5,316
947,290
1,026,055
Details of key management personnel compensation are disclosed in the Remuneration Report on pages 16-18.
(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 16-18.
(ii) Options holdings
2021
Staff
2020
Staff
Balance
1.7.20
Granted as
Remuneration
Options
Exercised
4,000,000
-
-
-
-
-
Options
Cancelled/
lapsed
-
-
Balance
30.6.20
4,000,000
-
Total Vested and
Exercisable
30.6.21
950,000
-
Total un-
exercisable
30.6.21
3,050,000
-
Balance
1.7.19
Granted as
Remuneration
Options
Exercised
4,000,000
-
-
-
-
-
Options
Cancelled/
lapsed
-
-
Balance
30.6.19
4,000,000
-
Total Vested and
Exercisable
30.6.20
-
-
Total un-
exercisable
30.6.20
4,000,000
-
(iii) Shareholdings
2021
No of shares held by Key Management Personnel
R. Hazouri
E. Hazouri
Balance
1.7.20
Received as
Remuneration
Options
Exercised
Balance
30.6.21
17,660,000
6,826,202
24,486,202
-
-
-
-
950,000
-
17,660,000
7,776,202
25,436,202
NOTE 20: REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided by the auditor of the parent entity:
Audit and review of the financial statements
Other services:
- preparation of tax return and other services
14,225
14,225
1,800
1,800
16,025
16,025
Consolidated Group
2021
2020
$
$
NOTE 21: CONTINGENT ASSETS AND CONTINGENT LIABILITIES
There were no contingent assets or contingent liabilities at balance date.
NOTE 22: COMMITMENTS
Non-cancellable operating leases
Lease commitments
The Company has obligation under the terms of these leases of its office premises for terms of up to 5 years, there are contractual
options to extend the leases. Lease payments are payable in advance by equal monthly instalments due on the 1st day of each
month. Future minimum rental payables under non-cancellable operating leases as at 30 June 2021 are as follows:
Consolidated Group
2021
2020
Page 32 of 34
HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Due not later than one year
Due later than one year and not later than five years
$
173,885
76,588
250,473
$
157,610
_____ 250,473__
408,083
.
NOTE 23: RELATED PARTY DISCLOSURES
(a)
(b)
Subsidiaries
Interests in subsidiaries are set out in Note 24.
Key management personnel
Disclosures relating to key management personnel are set out in Note 19.
NOTE 24: 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**
2021
2020
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 25: 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 Profit
Total equity
Profit for the year
Total Comprehensive income
Parent Entity
2021
$
2020
$
10,119,130
10,446,095
11,104,767
11,125,539
4,654,358
4,785,651
4,485,977
4,776,024
3,738,213
185,638
2,395,265
6,319,116
3,636,602
3,636,602
3,738,213
185,638
2,425,664
6,349,515
3,336.117
3,336,117
NOTE 26: SUBSEQUENT EVENTS
The directors have declared a fully franked interim dividend of 5 cents per share. Total amount of $1,950,000 to be paid on 15
September 2021 to shareholders registered at close of business on 01 September 2021.
NOTE 27: RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM
OPERATING ACTIVITIES
Consolidated Group
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HiTech Group Australia Limited and Controlled Entities
A.B.N. 41 062 067 878
Profit after income tax
Depreciation and amortisation of non-current assets
Decrease / (Increase) in assets
Trade and other receivables
Deferred tax assets
Overprovision for taxation
Increase/ (Decrease) in liabilities
Provisions for taxation
Trade and other payables
Provisions
Deferred tax liabilities
Net cash flows provided by/(used in) operating activities
2021
$
2020
$
3,636,602
3,336,117
110,589
118,153
30,781
(380,062)
(157,754)
-
(8,700)
-
(282,341)
(665,936)
153,548
860,854
1,424,623
58,886
59,130
(257,647)
2,880,619
5,152,224
NOTE 28: EARNINGS PER SHARE
Basic and diluted earnings per share
Basic and diluted earnings per share
The earnings and weighted average number of ordinary shares used in the calculation of basic and diluted earnings per share
are as follows:-
9.32
8.77
Cents per ShareCents per Share
Earnings (i)
Weighted average number of ordinary shares (ii)
$
$
3,636,602
3,336,117
No
39,000,000
No.
38,050,000
(i)
Earnings used in the calculation of basic earnings per share are net profit after tax as per the statement of profit and loss
and other comprehensive income.
(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).
NOTE 29: 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. Options generally lapse on the employee’s resignation or termination.
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
2021 was $2.14.
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)
Exercisable at end of financial year (v)
2021
Weighted
Average Exercise
Price
0.75
No
4,000,000
-
950000
3,050,000
-
2020
Weighted
Average
Exercise Price
0.75
No
4,000,000
-
-
1,600,000
4,000,000
-
Page 34 of 34