ANNUAL
REPORT
2021
DRILLING
OPTIMISATION
PRODUCTS
ROCK
KNOWLEDGE
SENSORS
REAL-TIME
DATA AND
ANALYTICS
IMDEX IS A
LEADING
MINING-TECH
COMPANY
We believe mining is essential to all aspects of
modern life.
Our opportunity is to change the minerals
drilling industry forever.
WHY WE DELIVER
A strong core business that outperforms industry growth
A strong financial platform with quality revenue and
increasing EBITDA margins
Established global presence and client network
Market leading technologies with unique defendable IP
A committment to targeted R&D to maintain technical
leadership
End-to-end solutions that are applicable across the mining
value chain
Opportunities to enhance less-cyclical earnings by
extension into adjacent mining production markets
The ability to make acquisitions to complement existing
product offering
Experienced leadership team and world-class geoscience
capabilities
A low carbon footprint and opportunities to enhance the
sustainability of operations for clients
3
IMDEX Annual Report 2021
ABOUT THIS REPORT
This Annual Report provides a summary of Imdex Limited’s operations
and performance for the 2021 financial year (FY21).
A digital version of our FY21 Annual Report is available on our website at
www.imdexlimited.com/investors.
Unless otherwise stated: references to ‘IMDEX’, the ‘Group’, the
‘Company’, ‘we’, ‘us’ and ‘our’ refer to Imdex Limited and its controlled
entities. References to a year are to the financial year ended 30 June; and
references to dollar figures are in AUD currency.
FORWARD LOOKING STATEMENTS
This report may contain forward looking statements.
Further information can be found on page 136 of this report.
SUSTAINABILITY
REPORT
2021
SUSTAINABILITY
REPORT
Further details regarding our sustainability approach, health and safety
performance and other material information for FY21 is included in our
FY21 Sustainable Report. Together the Annual Report and Sustainability
Report provide a complementary review of our business.
For further information or feedback, please contact
Kym Clements – IMDEX Investor Relations Officer at
kym.clements@imdexlimited.com
IMDEX’s focus on its people and its
broad approach to their wellbeing,
was particularly evident this year.
ANTHONY WOOLES, IMDEX CHAIRMAN
TABLE OF CONTENTS
OVERVIEW
About IMDEX
Operational Highlights
Financial Highlights
Chairman’s Address
CEO Review of Operations
Executive Leadership Committee
09
09
14
17
18
20
25
FINANCIAL
PERFORMANCE
AND STRATEGY
Financial Summary
Quality Revenue Model
Growth Strategy
OPERATING
ENVIRONMENT
COVID-19
Market and Industry Review
28
28
33
34
36
36
37
CORPORATE
Risk
Safety & Quality
People & Culture
Sustainability
GOVERNANCE
Board of Directors
Corporate Governance
Directors Report
39
39
41
45
49
51
51
53
56
REMUNERATION 60
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
Contacts
Shareholder Statistics
Key Announcements
Annual General Meeting
Corporate Calendar
Company History
79
130
130
131
133
134
134
135
OVERVIEW
ABOUT IMDEX
IMDEX is a leading global Mining-Tech company that enables drilling contractors and resource
companies to find, mine and define orebodies with precision and at speed.
Our product offering includes a broad range of drilling optimisation products, rock knowledge sensors and real-time data and
analytics. This product offering is commodity agnostic and can be applied across the mining value chain.
We have two market leading brands, AMC and REFLEX. Increasingly we are working with clients to provide integrated IMDEX
solutions that unlock real-value and provide critical insights.
OUR PRODUCT OFFERING
Drilling
Drilling
Optimisation
Drilling
Optimisation
Optimisation
Products
Products
Products
1.33
1.33
1.33
Rock
Rock
Rock
Knowledge
Knowledge
Knowledge
Sensors
Sensors
Sensors
Drilling
Optimisation
Products
.........
.........
.........
Real-time Data
Real-time Data
Real-time Data
and Analytics
and Analytics
and Analytics
Rock
Knowledge
Sensors
1.33
1.33
1.33
EXPLORATION
EXPLORATION
EXPLORATION
RESOURCE
DELINEATION
RESOURCE
RESOURCE
DELINEATION
DELINEATION
Applicable across mining value chain
Applicable across mining value chain
Applicable across mining value chain
PRE-FEASIBILITY
PRE-FEASIBILITY
PRE-FEASIBILITY
FRAGMENTATION
FRAGMENTATION
FRAGMENTATION
MINING
MINING
MINING
OPPORTUNITY TO GAIN IN SITU ROCK KNOWLEDGE
OPPORTUNITY TO GAIN IN SITU ROCK KNOWLEDGE
OPPORTUNITY TO GAIN IN SITU ROCK KNOWLEDGE
UNDERGROUND
UNDERGROUND
UNDERGROUND
STOCK PILING
AND BLENDING
STOCK PILING
STOCK PILING
AND BLENDING
AND BLENDING
PROCESSING
PROCESSING
PROCESSING
Real-time
Data and
Analytics
.........
.........
.........
Our Drilling Optimisation suite
of products enhance drilling
productivity while improving
safety and the impact on the
environment
Our best-in-class sensors
collect critical data on the four
elements of rock knowledge –
location, grade, mineralogy and
texture
Our cloud platform and market
leading geoscience analytical
software enrich data and enable
real-time decisions to be made
further upstream
• Drilling Fluids
• Solids Removal Units
• Remote Fluid Testing
Technologies
• Rig Alignment Technologies
• Drilling Productivity Technologies
• Downhole Survey Sensors
• Core Orientation Sensors
• Gamma Logging Sensors
• Structural Orientation Sensors
• In-Field Sampling and Analysis
• Cloud-based Data Collection and
Validation Platform (IMDEXHUB-IQ™)
• Advanced Reporting Software
(IMDEX Mobile™)
• Geoscience analytics software
(ioGAS™)
• Interpretive mineralogy software
(aiSIRIS™)
SALES AND
RENTAL
REVENUE
RENTAL
REVENUE
SaaS
REVENUE
OUR INTEGRATED SOLUTIONS
Drilling
Optimisation
Products
1.33
Rock
Knowledge
Sensors
.........
Real-time Data
and Analytics
Applicable across mining value chain
EXPLORATION
RESOURCE
DELINEATION
PRE-FEASIBILITY
FRAGMENTATION
MINING
STOCK PILING
AND BLENDING
PROCESSING
OPPORTUNITY TO GAIN IN SITU ROCK KNOWLEDGE
UNDERGROUND
1.33
.........
9
IMDEX Annual Report 2021 ROCK KNOWLEDGE & QUALITY DATA
MANY $BN MINING
INVESTMENT DECISIONS
ARE MADE HAVING
SAMPLED ONLY 1%
OF 1% OF THE OREBODY.
Rock knowledge is an
understanding of location,
texture, grade and
mineralogy.
It answers the questions
where to drill next and
how processing can be
optimised.
We enable the timely delivery
of quality data, giving clarity on
the nature of the rock to allow
real-time decisions to be made,
rather than having to wait weeks
or months.
Seam
Every mine in the world makes decisions on the four
components of rock knowledge - location, texture,
grade and mineralogy. Our technology stack currently
addresses three of these components and aiSIRIS
satisfies the fourth - mineralogy.
PAUL HOUSE, IMDEX CEO
10
IMDEX Annual Report 2021 THE FOUR COMPONENTS OF ROCK KNOWLEDGE
LOCATION
IMDEXHUB-IQTM connected survey tools
mean geologists can see where their holes
are anywhere and anytime, rather than relying
on paper based flows.
TEXTURE
IMDEX’s Structural-IQ solution
combines multiple sensors
to allow geologists to see the
position of their structures in 3D
as they log in the core farm. This
replaces workflow where data
gathering and interpretation were
separated by weeks or months.
MINERALS
AusSpec’s aiSIRIS SaaS product
provides a real-time mineralogy
solution to IMDEX’s rock
knowledge offering. It replaces
a workflow reliant on laboratory
and expert interpretation that is
asynchronous to data collection.
GRADE
IMDEX’s In-field GeoAnalysis solution enables
geoscientists to obtain quality assay data at the rig or
core farm rather than waiting for laboratory results.
IMDEXHUB-IQTM
Timely information
for critical decision
making
Au
Au
Fe Cu
Fe Cu
Ag
Ag
Au
Fe Cu
Ag
QUALITY DATA
REPRESENTIVITY
TIME SAVINGS
• Industry leading sensors
• QA/QC at point of data
collection
• Digital workflows remove risk
of human error
• AI and machine learning
remove human subjectivity
• Cost effective methods
allowing data to be
collected for every metre
drilled
• Repeatable
sensor-based
data (IoG)
• Actionable information
in real-time
• Driller operable
instrumentation
- not reliant on third-party
service providers
• More efficient digital
workflows
11
IMDEX Annual Report 2021
OUR ESTABLISHED GLOBAL BUSINESS
replace with Timaru
Our global presence is unrivalled. This presence provides a compelling opportunity to embed real
value for clients and maximise revenue and earnings for IMDEX.
During FY21 we supported clients in more than 100 countries. We have 22 IMDEX facilities, together with warehouses and
calibration centres in key mining regions of the world. Our Head Office is located in Balcatta, Western Australia.
Smithers - Canada
Vancouver - Canada
East Sussex - UK
Rastede - Germany
Timmins - Canada
Amsterdam - Netherlands
Salt Lake City - USA
San Luis Obispo - USA
Phoenix - USA
Torreón - Mexico
Coahuila - Mexico
Quito - Ecuador
Lima - Peru
Mendoza - Argentina
Santiago - Chile
IMDEX Facilities
(Excluding
distributors)
Exploration &
Mining Projects
Accra - Ghana
Parauapebas - Brazil
Belo Horizonte - Brazil
Itajai - Brazil
Manila - Phillipines
Jakarta - Indonesia
Johannesburg
South Africa
Kalgoorlie - WA
PERTH - WA
Townsville - QLD
Brisbane - QLD
Adelaide - SA
Melbourne
- VIC
Timaru
- New Zealand
Arrowtown
12
MARKET CAP494.4mSTRONG MARKETPRESENCE ON70%OF MINERAL RIGSGLOBALLYIMDEX Annual Report 2021
OUR CLIENTS AND BUSINESS PARTNERS
Our long-standing client base includes large drilling contractors and tier-1 resource companies within
the global minerals industry.
We are creating a collaborative ecosystem, where we partner with all clients to optimise orebodies.
OPERATING
IN ALL KEY
MINING
REGIONS OF
THE WORLD
SALES IN
100+
COUNTRIES
80%
OF OUR TOP 100
CLIENTS HAVE
BEEN WITH IMDEX
FOR >5 YEARS
13
IMDEX Annual Report 2021 OPERATIONAL HIGHLIGHTS
IMPROVED SAFETY
PERFORMANCE
(LTIFR FY21: 1.85 v FY20: 3.97)
CONTINUED TO
SUCCESSFULLY
NAVIGATE COVID-19
with increasing pressure on supply
chains and people
A STRONG FOCUS ON
ENHANCING EMPLOYEE
WELLBEING
workplace flexibility and diversity
ACQUIRED AusSPEC
and its aiSIRIS software
to enhance real-time rock
knowledge offering with spectral
mineralogy and AI technologies
IMPLEMENTED A
SUSTAINABILITY
POLICY
release first Sustainability
Report in September 2021
SIGNED THREE JDAs1
to support new product development
and delivery with future opportunities
being discussed with a variety of clients
1 Joint development agreements.
CONVERTED CLIENT
TRIALS FOR DRILLING
OPTIMISATION FLUIDS
in the mining production market into
recurring operational revenue
A RECORD
NUMBER
of rock knowledge
sensors on rent
UP 35%
on pre-COVID-19 peak
IMDEXHUB-IQ™
connected revenue
UP 30%
INCREASED
PRODUCTION
CAPABILITIES
for gyro-related technologies in
response to demand
RESPONDED TO INCREASING DEMAND FOR
REMOTE WORKING SOLUTIONS
upgraded IMDEXHUB-IQ™ and released ioGAS 7.3™ geochemistry data
analysis software
DIVIDENDS
PAID
an interim fully
franked dividend of
1.0cps
DIVIDENDS
DECLARED
a final fully
franked dividend of
1.4cps
a fully franked
SPECIAL DIVIDEND
of
0.4cps
FINANCIAL HIGHLIGHTS
Compared to FY20 at 30 June 2020
RECORD REVENUE of
EBITDA of
$264.4 million
up 11.2% (up 18% on a
constant currency basis)
STRONG CASH
GENERATION
with cash from operations
UP 8.6%
$75.5 million
up 38.8% (up 50% on a
constant currency basis)
ROBUST BALANCE SHEET
with a strong net cash
position of
$47.4 million
UP 47.7%
KEY METRICS
$m (unless indicated otherwise)
Revenue
EBITDA1
EBITDA1 Margin %
NPBT
NPAT
EPS (cents)
Operating Cash Flow
Operating Cash Flow Per Share (cents)
Net Assets (at 30 June)
Net Cash (at 30 June)2
Fully Franked Final Dividend (cents)
Fully Franked Special Dividend (cents)
Full Time Employees (at 30 June)
FY21
264.4
75.5
28.5
44.5
31.7
8.0
56.9
14.4
253.1
47.4
1.4
0.4
521
FY20
237.7
54.4
22.9
29.1
21.8
5.6
52.4
13.6
221.6
32.1
0.7
2.0
485
1 Excluding $3.6m gain on VES sale in FY20 and $2.9m net gain in FY21 on Flexidrill and AusSpec deferred consideration fair value adjustment.
2 Cash less external borrowings (excluding lease liabilities)
VAR %
11.2
38.8
24.5
52.9
45.5
42.0
8.6
5.9
14.2
47.7
100
-
7.4
17
IMDEX Annual Report 2021 CHAIRMAN’S
ADDRESS
Dear shareholders,
On behalf of the IMDEX Board of Directors (the Board)
I’m pleased to present the Company’s Annual Report
for the 2021 financial year (FY21).
FY21 was another positive year for IMDEX. The
Company protected its people, performed strongly,
delivered on its growth strategy and maintained its
sustainable dividend policy.
PROTECTING OUR PEOPLE
IMDEX’s focus on its people and its broad approach to
their wellbeing, was particularly evident this year.
Pleasingly, the Company’s safety performance
improved considerably and its lost time and total
recordable injury frequency rates reduced by half.
Other notable achievements included: the introduction
of an IMDEX Diversity Policy and a global diversity
program; new employee entitlements that deliver
greater workplace flexibility; targeted training and
capability development; a formal employee recognition
program; and a new reward and remuneration
framework.
All of these important initiatives enhance IMDEX’s
employee value proposition and align with the
Company’s strategic milestones.
Further information regarding IMDEX’s safety
performance and people can be found on pages 41-43
of this report. Similarly, the Company will expand on
these topics in its first Sustainability Report, due to be
released in September 2021.
The Board and Executive Leadership Team are
committed to enhancing IMDEX’s ESG related
disclosure. We have adopted a stepwise approach
to ensure this disclosure is material and supports
informed decision making by all stakeholders.
OUTPERFORMING EXPECTATIONS
The strength of IMDEX’s underlying business enabled the
Company to leverage buoyant market conditions and perform
strongly.
The revenue result of $264.4m represented an 11.2% increase
on FY20, and EBITDA was $75.5m, a 38.8% increase on the
previous year.
A SUSTAINABLE DIVIDEND POLICY
The Board declared a fully franked final dividend of 1.4 cents
per share. This in line with the Company’s historical 30%
payout ratio. In light of the strong growth and cash balance
a special dividend of 0.4 cents per share was also declared.
This brings the full year dividend total to 2.8 cents per share.
IMDEX maintains a sustainable dividend policy, while
continuing to invest in technologies and software that have
the potential to deliver substantial growth for shareholders.
Dividend record and payment dates are 28 September and
12 October 2021, respectively.
DELIVERING ON STRATEGY
A RESPONSIVE AND TALENTED TEAM
Earlier this year, we were pleased to welcome Trace Arlaud
as a Non-executive Director. Trace is a very practical and
candid professional who has slotted in seamlessly with our
The Company did an excellent job of adapting to the
Board. Her industry experience, technical knowledge and
challenges presented by COVID-19 and executing its
geographic network enable her to provide valuable counsel
growth strategy. Paul provides greater detail in his Review
and client insights. Further information regarding Trace’s
of Operations; however, I would like to highlight three
appointment and her complementary expertise can be found
achievements:
in IMDEX’s market announcement on 11 February 2021.
•
The acquisition of AusSpec and its aiSIRIS platform to
strengthen IMDEX’s real-time rock knowledge offering for
all clients across the mining value chain;
•
Delivery against the Company’s disciplined and stage-
gated development roadmap to maintain technical
leadership; and
•
Greater industry collaboration to overcome restrictions
and advance client-lead solutions.
My sincere thanks to all of our Board members. Everyone
has continued to do a terrific job, well above and beyond
what is required. It is a true pleasure working with you.
I would also like to express my gratitude to Paul House, who
settled in impeccably and did an excellent job during his first
year as CEO. The Executive Leadership Committee and all
of IMDEX’s global team should be congratulated for their
unwavering commitment, particularly in uncharted operating
During FY22, key priorities for our Board include:
conditions.
•
•
•
•
•
Continued improvement in safety at all levels and the
wellbeing of IMDEX’s people;
The Board is excited about the prospects for IMDEX as the
Company continues to evolve as a leading Mining-Tech
Strong corporate governance, including emerging ESG
company with considerable global reach.
related requirements;
Rigorous assessment of the performance of the
Company’s underlying business;
Guiding the next phase of IMDEX’s growth strategy; and
Clear focus on the milestones underpinning IMDEX’s Long
Term Incentive Plan.
Anthony Wooles
IMDEX Chairman
19
IMDEX Annual Report 2021 CEO REVIEW OF
OPERATIONS
Dear Shareholders,
I am pleased to provide a review of our operations for the
2021 financial year, my first twelve months as IMDEX CEO.
FY21 was truly challenging, and ultimately a
rewarding year. I am often asked what I enjoy
most about my role as CEO. My response has
always been, ‘because it’s fun’. This would not
be so, if it were not for the multitude of talented
people around me. Their innovation, commitment,
and intricate knowledge of orebodies and data
platforms astounds me every day.
RECORD FINANCIAL PERFORMANCE
OPERATIONAL ACHIEVEMENTS
Our results were a highlight. We generated record revenue
I would like to echo the comments by Anthony regarding our
of $264.4m and our EBITDA of $75.5m was up 38.8%. On
safety performance. Many organisations have experienced
a constant currency basis, revenue and earnings grew 18%
an increase in HSE incidents as both the pressure and
and 50% respectively, highlighting the real strength in the
change of work practices under COVID-19 impact their
underlying business.
Our strong uplift in earnings reflected the increasing
percentage of revenue coming from our higher-margin
teams. Pleasingly, we have seen the opposite. It has taken a
lot of attention and engagement, and it is a testament to our
team.
sensors and software business. At the close of FY21, rentals
Safety is more than just the incidents that we report. It is the
and subscriptions represented 55% of revenue. Our focus
way we look after ourselves and each other. At work and at
on streamlining operations and the benefits of our digital
home.
transformation - Digital 1.0 - were evident.
There are a number of other achievements I would like to
The investment we have made in Digital 1.0 to improve the
highlight:
cost to serve, and the quality of service, is delivering leverage
in gross and net margins. This leverage allows us to spend
more time engaging with clients and building a pipeline of
new and next generation technologies.
In a year when balance sheet management was critical for
most organisations, we outperformed. And we did so in all
the jurisdictions we operate.
It may be easy to attribute our strong results with the overall
strength of the market, but that would take away from the
true underlying performance of our business. Our objective
has always been to outperform our market proxies. In FY21
we achieved this in an exceptional way.
20
•
Our joint development agreements (JDAs) to support
new product development and delivery in partnership
with our clients;
•
Our record number of rock knowledge sensors on
rent and the growth of our IMDEXHUB-IQ™ connected
revenue; and
•
Our ability to respond to changing client needs.
JDAs to support new product development and
delivery
Our conscious step to build JDAs to bring new products
to market has been a success in its first year. With three
agreements signed and four in the works, we are excited by
this model.
IMDEX Annual Report 2021 Increasingly, the solutions that we are designing benefit
multiple players within the mining value chain. The JDA
INDUSTRY AND MARKET UPDATE
model ensures that any of these players come together in a
Activity recovered throughout 1H21, boosted by strong
structured manner.
Throughout the year we made great progress in soliciting
client feedback. We have developed multiple user
communities that play a key role in shaping the products
and technologies we build. In one case, we have a group
industry fundamentals and a keen willingness by clients to
sustain and increase operations.
This positive momentum continued into 2H21. The pace of
growth was tempered due to supply chain pressures, and
short-term labour and rig shortages – notably in Australia,
comprising 33 resource companies that provide critical
Canada, and the USA.
insights. The power of this engagement is that a 500-person
company like IMDEX, can be a 5000-person company
contributing to better technologies and better outcomes.
Record Sensors on Rent and Growth of our
IMDEXHUB-IQ™ Connected Revenue
Demand for our sensors was reflective of our leading
technologies and strong market conditions. We had a record
December 2020 and a strong uptake in January 2021. At
the close of FY21, we had achieved the highest number of
sensors on hire, and revenue from all regions was near to, or
exceeded pre-COVID-19 levels.
Over the same period, our recurring IMDEXHUB-IQ™
connected revenue was up 30% and connected metres
drilled was up 60%. This uplift on the previous year, is
more than our revenue growth, and highlights that our
technologies enable better workflows for clients. This is a
true measure of success.
Responded to Increasing Demand for Remote
Working Solutions
I am immensely proud of how everyone in our business
COVID-19 increased industry pressure on our supply chain,
particularly delivery times and freight charges. Fortunately,
we have multiple supply chain contingencies and continue to
support clients without material disruption.
In most of our jurisdictions, mining operations are
considered essential to economic recovery and are exempt
from hard lockdowns. Pleasingly, the implementation of
COVID-19 vaccination programs began to support greater
mobility, particularly in the USA.
We will continue to closely monitor risks and leverage
positive industry structural changes, together with increasing
demand for technologies and software that enable remote
operations.
GROWTH STRATEGY
Although COVID-19 impacted our market and business, our
underlying strategy remains unchanged:
•
Growth of our core business by enhancing technical
leadership and embedding value for clients; and
amended their priorities and helped clients navigate
•
Expansion within the larger production stage of the
COVID-19.
Our ability to be flexible and redirect resources to meet
mining value chain, which is a larger market and less
subject to cyclical impact.
changing needs is a highlight of our results and culture.
To deliver, we are committed to targeted R&D, providing
Two examples include the upgrade of IMDEXHUB-IQ™ and
end-to-end IMDEX solutions, and leveraging our core
the release of IMDEX ioGAS 7.3™ geochemistry data analysis
competencies throughout the mining value chain. The
software.
Enabling clients to work remotely, efficiently, securely,
and safely are key components of our customer value
proposition.
strength of our balance sheet and net cash position also
enables us to make on-strategy acquisitions as they present.
To be on-strategy, these acquisitions must complement
our product offering, have unique IP, and accelerate
our development roadmap to deliver real-time orebody
knowledge.
21
IMDEX Annual Report 2021 FOCUS AREAS FOR FY22
CULTURE AND PEOPLE
For the balance of FY22 our people will remain front and
There is a well known phrase that culture will eat strategy for
centre. Concurrently, we will focus on four key operational
breakfast. The reason it is well known is that it is true. The
initiatives:
1. Prosecuting our R&D roadmap to accelerate growth and
build scale;
culture that we are building to take that next step as a growth
company made great strides this year. We have expanded
on these achievements on pages 45 - 47 of this Report and
within our first Sustainability Report, which we are proud to
2. Securing additional joint development agreements to
release in September 2021.
engage with resource companies and drilling clients for
new product development and delivery;
Later in the year we will also launch our refreshed IMDEX
brand and values in line with our 40th Anniversary. Key
3. Building key account management capabilities to
embed value for clients and enhance IMDEX solution
selling; and
themes include:
Our global thinking;
4. Commencing our digital Transformation 2.0 to further
streamline costs and enhance client experience.
•
An awareness that the work we do has a direct impact
on efficient and sustainable mining practices
At all times we will ensure a high level of discipline and a
relentless execution to be best-in-class.
•
•
Innovation to solve industry challenges
The importance of collaboration.
22
The pride I feel in how our
people around the world
have responded to overcome
barriers between families,
colleagues and clients has
been truly remarkable
PAUL HOUSE, IMDEX CEO
A REMARKABLE TEAM AND A POSITIVE
OUTLOOK
My sincere thanks to our Board members, Paul Evans, our
XCo, and everyone at IMDEX for your guidance and positive
contributions.
This year I can say confidently, despite travel restrictions, the
distance between the Board Room and our front-line teams
has been shorter than it has ever been.
The pride I feel in how our people around the world have
responded to overcome barriers between families, colleagues
and clients has been truly remarkable.
Against this backdrop the outlook remains brighter than at any
time in our past. The underlying fundamentals for our industry
are excellent. The pipeline of our technologies that has been
put together with input from our clients is long. And the team
we have assembled both to build and deliver those products
has never been stronger.
We have the talent, the network and the balance sheet to
respond to market needs and opportunities as they present.
We look forward with great excitement to FY22 and what the
years that follow will bring to IMDEX’s team, its clients and
ultimately its shareholders.
Paul House
IMDEX CEO
23
EXECUTIVE LEADERSHIP COMMITTEE
PAUL EVANS
Chief Financial Officer
& Company Secretary
Time with IMDEX
Commenced as Chief Financial Officer
and Company Secretary in 2006
Experience
35 years within the mining services,
media, manufacturing, and
telecommunications sectors
Expertise
Finance, governance, and general
management
Professional Qualifications
Chartered Accountant Australia and
New Zealand
Memberships and Associations
Fellow of Chartered Accountants
Australia and New Zealand
Graduate Member of Australian
Institute of Company Directors
SHAUN SOUTHWELL
Chief Operating Officer
Time with IMDEX
Joined Imdex in 2018 as Vice
President Asia Pacific and Global
Supply Chain Manager, transition to
Chief Operating Officer in 2020
Experience
27 years with Gearhart United – a
subsidiary of SGS and a leading
designer and manufacturer of oilfield
equipment in Australia
Expertise
General management and all
aspects of supply chain including
manufacturing, service, fleet
management and logistics
The drilling and equipment industry
Professional Qualifications
Leading Organisational Impact –
Melbourne Business School Executive
Program
PAUL HOUSE
Chief Executive Officer
Time with IMDEX
Joined as Chief Executive of
REFLEX in 2017. Transitioned to
Chief Operating Officer in 2019 and
commenced as CEO in 2020
Experience
30 years within the resources and
technologies sectors
Lived and worked in a wide range of
international markets including the
USA, Australia, Africa, India, the Middle
East, and Southeast Asia
14 years with SGS, the world’s leading
inspection and testing firm, with a
dominant presence in the resources
geochemistry assay and metallurgy
sectors
Expertise
Management, strategy, operations,
corporate finance and governance
Professional Qualifications
Bachelor of Commerce from the
University of Western Australia
Memberships and Associations
Fellow of the Australian Institute of
Management
Graduate Member of Australian
Institute of Company Directors
25
IMDEX Annual Report 2021
MICHELLE CAREY
Chief of Product Management and
Marketing
DAVE LAWIE
Chief Geoscientist / Chief
Technologist – Mining Solutions
MATHEW REGAN
Chief of Corporate Shared Services
Time with IMDEX
Commenced as Chief Information
and Transformation Officer in 2017.
Transitioned to Chief of Shared
Corporate Services in 2020
Experience
19 years with CBH in senior and
executive roles including Chief
Information Officer, Shared Services,
Innovation and Strategy and
Transformation
Time with IMDEX
Joined following IMDEX’s acquisition
of ioGlobal in 2012. Appointed to
General Manager of IMDEX Product
Development in 2019. Transitioned to
Chief Product and Marketing Officer
in 2020
Experience
Over 25 years experience in the mining
industry.
Expertise
Business transformation, strategy,
innovation, supply chain optimisation
and digital technologies
More than 10 years’ experience
as a geoscientist in technical and
management roles for tier one mining
companies
Professional Qualifications
Bachelor of Computer Science from
Edith Cowan University and a Master
of Information Technology from the
University of Western Australia
Stanford University Executive Program
Memberships and Associations
Member of the Curtin University
Faculty of Science and Engineering
Advisory Board
15 years focusing on mining
technology development
Expertise
Innovation and product development
within the mining industry
Professional Qualifications
PhD in Geochemistry from Monash
University
Memberships and Associations
Member of Austmine Board
Member of the Insead Alumni
Association
26
Time with IMDEX
Joined as Chief Geoscientist following
IMDEX’s acquisition of ioGlobal in
2012. Appointed Chief Geoscientist
and Chief Technologist - Mining
Solutions in 2015
Experience
Global positions in exploration
geochemistry and R&D with Pasminco
and Anglo American before co-
founding ioGlobal in 2004
Expertise
Geochemistry, geometallurgy,
innovation, analytics and cloud-based
data management and analysis
Professional Qualifications
PhD in Geosciences and Analytics
from the University of New England
Trade qualified Instrument Technician
Memberships and Associations
A member of AusIMM
IMDEX Annual Report 2021 TIM PRICE
Chief of Engineering and Research
and Development
KIAH GRAFTON
Executive General Manager of
Human Resources
Time with IMDEX
Joined in 2011 as General Manager of
Engineering and Product Development,
IMDEX Technology Germany
Experience
35 years’ experience in engineering
and product development
20 years with Scientific Drilling
International holding positions from
Design Engineer to Senior Vice
President of Engineering
5 years in Aerospace and
Semiconductor Test Industries
Expertise
Downhole instrumentation,
engineering management and
research and development
Professional Qualifications
Bachelor of Science in Electronic
Engineering and Master of Science in
Electrical Engineering from California
Polytechnic State University, San Luis
Obispo
Memberships and Associations
Member of Institute of Electrical and
Electronic Engineers
Member of Society of Petroleum
Engineers
Time with IMDEX
Joined as Human Resources Manager
Asia Pacific in 2017. Transitioned to
Global Head of Human Resources
then Executive General Manager of
Human Resources
Experience
Over 18 years as a human resources
generalist
Broad industry experience including
resources, banking, hospitality and
not-for-profit sectors for national and
global organisations
Expertise
Strategy, talent acquisition, industrial
relations, and organisational
development
Professional Qualifications
Bachelor of Business, Human
Resources Management &
Management, Edith Cowan University
Memberships and Associations
Graduate Member of Australian
Institute of Company Directors
Graduate Member of Chief Executive
Women (CEW) Leaders Program
MICHAEL TOMASZ
General Counsel and Company
Secretary
Time with IMDEX
Joined in 2021 as General Counsel
and Company Secretary
Experience
International experience gained across
a wide range of markets, including
North America, Asia Pacific, the Middle
East, Japan, and Europe
Worked with a tier one mining
company and one of world’s largest
oilfield services companies
Expertise
Corporate and commercial law
Building collaborative partnerships
within the resources sector
Professional Qualifications
Admitted as a barrister and solicitor
in the Supreme Court of New South
Wales; admitted as a Solicitor in
England & Wales
Master of Business Administration
from Curtin University, Bachelor
of Laws from Murdoch University,
Bachelor of Science (Geology) from
University of Western Australia
Memberships and Associations
AMPLA (Australian Mining and
Petroleum Lawyers Association)
ACC Australia (Association of
Corporate Counsel)
27
IMDEX Annual Report 2021 FINANCIAL PERFORMANCE AND STRATEGY
FINANCIAL SUMMARY
REVENUE
13%
5 YEAR CAGR
(Comparable S&P CAGR 8.3%**)
264.4
243.7
237.7
218.5
176.2
EBITDA
23.5%++
5 YEAR CAGR
75.5*^
52.3
+
54.4*
48.0
+
42.4
+
+
31.5
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
AFRICA/EUROPE
AMERICAS
ASIA PAC
$m
$m
$m$m
EBITDA MARGIN %
EBITDA RECONCILIATION
28.5
21.3++
22.2++
23.9++
22.9
75.5*^
(8.8)
(1.4)
(7.1)
(1.3)
56.9
FY17
FY18
FY19
FY20
FY21
%%
*
Including AASB 16
+ Excluding AASB 16
EBITDA Working
Other Tax
Capital
Finance
Costs
Cash from
Operations
$m
$m
^ Excluding $2.9m net gain in FY21 on Flexidrill and AusSpec deferred consideration fair value adjustment
** IMDEX uses S&P Market Intelligence global exploration expenditure for nonferrous metals as an industry benchmark for growth
++ Notionally adjusted for inclusion of the impact of AASB 16
28
IMDEX Annual Report 2021
A COMMITMENT TO RESEARCH & DEVELOPMENT
RESEARCH & DEVELOPMENT R&D SPEND ($M)
)
m
$
(
d
n
e
p
S
D
&
R
20
18
16
14
12
10
8
6
4
2
0
19.1
17.5
16.5
12.7
5.8%
6.8%
7.3%
7.2%
FY18
FY19
FY20
FY21
% of Revenue
INVESTMENT IN R&D IN ALL
MARKET CONDITIONS
ABILITY TO TARGET AND REDIRECT
R&D SPEND IN LINE WITH DEMAND
DISCIPLINED STAGE GATE PRODUCT
DEVELOPMENT PROCESS
INCREASING PERCENTAGE OF
EXPENDITURE ON SOFTWARE
VERSUS HARDWARE
R&D IS LARGELY EXPENSED
BALANCE SHEET
$m
Cash
Receivables
Inventory
Fixed assets 1
Intangibles 2
Other assets / deferred tax
TOTAL ASSETS
Payables
Borrowings 3
Other liabilities, provisions and current tax 4
TOTAL EQUITY
ROE
ROCE
30 JUNE 2021
30 JUNE 2020
58.5
58.2
41.5
78.6
92.9
36.4
366.1
37.9
11.1
64.0
253.1
13.3%
15.5%
38.3
43.5
41.2
79.6
83.6
31.9
318.1
26.9
6.1
63.5
221.6
9.9%
11.4%
INTERIM
FULLY-FRANKED
DIVIDEND OF 1.0 CPS
FINAL
FULLY-FRANKED
DIVIDEND OF 1.4
CPS IN LINE WITH
HISTORICAL 30%
PAYOUT RATIO
SPECIAL FULLY
FRANKED DIVIDEND
OF 0.4 CPS
CONTINUED
INVESTMENT IN
LEADING
TECHNOLOGIES TO
DRIVE FUTURE
GROWTH
1 Includes leases assets of $33.0m in June 2021 ($36.5m June 2020)
2 Includes intangibles of $9.8 arising from the acquisition of AusSpec
3 Increased USD borrowings to manage our currency exposures
4 Includes lease liabilities of $38.9m ($41.5m June 2020) and deferred consideration
for the purchase of Flexidrill of $12.2m ($14.7m June 2020) and AusSpec $2.5m
SUMMARY OF FINANCIAL HIGHLIGHTS
Revenue from continuing operations (excluding interest income)
FY21
$m
264.4
FY20
$m
237.7
Earnings before interest, tax, depreciation & amortisation (EBITDA) from
continuing operations1
78.4
58.0
EBITDA margin
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of Intangible Assets
Earnings before tnterest & tax (EBIT)
Net interest expense
Net profit before tax
Income tax expense
Net profit after tax from continuing operations
29.7%
(20.3)
(6.0)
(4.5)
47.6
(3.1)
44.5
(12.9)
31.7
24.4%
(19.0)
(5.9)
(1.6)
31.5
(2.4)
29.1
(7.4)
21.7
Basic earnings per share from continuing and discontinued operations (cents)
8.0
5.6
Net cash provided by operating activities
Cash on hand
Net assets
Total borrowings
Net tangible assets per share (cents per share)
56.9
52.4
58.5
38.3
253.1
221.6
11.1
6.1
40.4
35.6
1 FY21 includes $2.9m relating to the fair value gain on deferred consideration. FY20 contains $3.6m relating to the sale of interest in VES
31
IMDEX Annual Report 2021
The strength of IMDEX’s underlying
business enabled the Company to
take full advantage of buoyant market
conditions and outperform expectations.
ANTHONY WOOLES, IMDEX CHAIRMAN
QUALITY REVENUE MODEL
SENSORS & SOFTWARE
%
44
44
57
57
56
56
43
43
PRODUCTION EXPOSURE
%
10
10
20
20
90
90
80
80
27
27
25
25
10
15
10
15
7
8
7
8
35
35
34
34
31
31
30
30
39
39
44
44
45
45
50
50
FY17
FY17
FY21
FY21
FY17
FY17
FY21
FY21
FY17
FY17
FY21
FY21
FY17
FY17
FY21
FY21
SALES
RENTAL AND SAAS
EXPLORATION & DEVELOPMENT (PRINCIPALLY NEAR MINE)
MINING PRODUCTION
• Increasing revenue from sensors
and software – higher margins
and quality recurring revenue
• Increasing revenue from mining
production phase – a larger
addressable market and less-cyclical
44
44
57
57
56
56
43
43
10
10
20
20
90
90
80
80
AMERICAS
%
27
27
25
25
BROAD COMMODITY EXPOSURE
%
7
8
7
8
10
10
15
15
35
35
34
34
31
31
30
30
39
39
44
44
45
45
50
50
FY17
FY17
FY21
FY21
FY17
FY17
FY21
FY21
FY17
FY17
FY21
FY21
FY17
FY17
FY21
FY21
AMERICAS
APAC
EUROPE/
AFRICA
GOLD
CRITICAL
METALS
IRON ORE
OTHER
• Increasing revenue from the
• Product offering is commodity
Americas
agnostic
• Critical metals are expected to grow
at a faster rate
33
IMDEX Annual Report 2021 GROWTH STRATEGY
IMDEX has a clear strategy to achieve
sustainable earnings growth, which includes:
•
Growing its core business in exploration and
development; and
•
Expansion within mining production phase,
which is a less-cyclical larger market.
To deliver this growth strategy the Company invests in:
complementary acquisitions; ongoing and targeted R&D to
maintain technical leadership; and industry collaboration to
optimise orebodies and deliver end-to-end solutions.
IMDEX’s strong financial position, world-class R&D capabilities,
established global presence and strong leadership team,
support its ongoing success for shareholders.
LARGER TAM
LESS CYCLICAL*
S
E
I
G
O
L
O
N
H
C
E
T
/
S
T
C
U
D
O
R
P
W
E
N
I
G
N
T
S
I
X
E
NEW PRODUCTS,
SENSORS AND
SOFTWARE
NEW PRODUCTS,
SENSORS AND
SOFTWARE
CORE BUSINESS
NEXT GENERATION
PRODUCTS, SENSORS
AND SOFTWARE
MARKET EXTENSION
OF CORE BUSINESS
EXPLORATION
& DEVELOPMENT
MINING
PRODUCTION
MARKETS
*Total addressable market
34
IMDEX Annual Report 2021
KEY FOCUS AREAS AND OPERATIONAL
INITIATIVES FOR FY22
Protecting our people
Protecting the continuity of our business to support clients
Increased R&D for connected sensors and software solutions to
accelerate growth and build scale
Joint development agreements to engage with resource
companies and drilling clients for new product development and
delivery
Key account management to embed value for clients and
enhance IMDEX solution selling
Digital transformation 2.0 to further streamline costs and
enhance client experience
IMDEX BLASTDOGTM
OPERATING ENVIRONMENT
COVID-19
EVOLUTION OF COVID-19 GOVERNMENT MANDATED
RESTRICTIONS ON IMDEX MINING REGIONS
This table shows the impact of government mandated COVID-19 lock-downs on our key regions from April 2020. In most jurisdictions
mining is considered essential to economic recovery and is exempt from hard lockdowns.
NO LOCKDOWN
NO LOCKDOWN
(REGULATED)
SOFT LOCKDOWN
HARD LOCKDOWN
(MINING EXEMPTED)
HARD LOCKDOWN
(NOT EXEMPTED)
KEY OPPORTUNITIES
KEY CHALLENGES
•
•
•
•
Acceleration of positive industry
structural change
New efficient ways of working - beneficial
for the long-term
Increasing demand for IMDEXHUB-IQ™
cloud-based technologies and software
Increasing demand for solutions to
support clients to work remotely,
efficiently, securely, and safely
•
•
•
Increasing pressure on industry
processes to protect labour and supply
chains
Corporate restrictions continue to limit
access to sites, including for trials of new
products
Government restrictions continue to
be fluid, impacting labour mobility and
project continuity
36
IMDEX Annual Report 2021 MARKET AND INDUSTRY REVIEW
Broad-based recovery in the minerals sector globally
Recovery spanned all key mining areas and was particularly evident in the Americas
Strong commodity prices supported by government stimulus, decarbonisation targets
and demand across a broad range of sectors including consumer, industrial and
government related industries
Large, mid-cap and junior resource companies are well funded and increased their
expenditure to replace diminishing reserves
Short-term supply chain pressure, labour, and rig constraints
Exploration was predominantly focused on lower-risk brownfield projects
New discoveries are likely to be under cover and at depth resulting in larger drilling
campaigns
Increasing demand for mining-technologies to deliver real-time orebody knowledge
Increasing demand for mining-technologies that support remote working
The industry is
clearly willing to
invest in capital
and increase
exploration
expenditure.
The challenge will
be the speed at
which it can move.
The industry drivers of depleting
reserves, strong commodity
pricing and the trend towards
decarbonisation, is driving
substantially increased industry
exploration budgets. Delivery
against these targets will require
time and investment in labour,
drilling rigs, and other supply
chain pressures that are a current
constraint.”
PAUL HOUSE, IMDEX CEO - JUNE 2021 MACQUARIE EMERGING LEADERS CONFERENCE
37
IMDEX Annual Report 2021 CORPORATE
RISK
RISK MANAGEMENT
REGULATORY COMPLIANCE
Throughout the year we broadened and deepened our risk
We strengthened our regulatory compliance framework
management practices across all aspects of our business
and improved the compliance maturity of our global IMDEX
including:
businesses. Our aim was to embed procedures and contact
•
•
•
•
Enterprise risk
Anti-bribery and anti-corruption risk
New product project risk
Shared services risk.
To support best-practice risk processes, we expanded our
dedicated internal risk function. This function is responsible
for promoting and facilitating stronger engagement in risk
management activities from identification to assessment,
management and control.
A key focus was ensuring a strong targeted framework for
COVID-19 resilience. Protecting our people and our business
was critical and included infection prevention and control,
crisis management and business continuity.
points in daily business processes.
Other achievements included:
•
Significant investment into new systems and processes
for compliance risk management, compliance tracking
and action management;
•
Expansion of our internal capability with the goal of
supporting a consistently high level of regulatory
compliance performance across all jurisdictions; and
•
A 3-year strategy update to strengthen our regulatory
compliance maturity, processes and systems in
consultation with global IMDEX businesses, the IMDEX
XCo, IMDEX Board and external stakeholders.
MODERN SLAVERY
ENGAGEMENT WITH INTERNAL AUDIT
Our internal audit function was integrated into the risk and
regulatory compliance function to better align with our
We were pleased to publish our first Modern Slavery
Statement in FY20. As part of this process, we engaged
a broad range of stakeholders within our business to
strengthen modern slavery awareness and risk management
strategic objectives and the functions of the IMDEX Board
practices.
ARCC.
Other notable achievements included:
•
Additional capability and systems to support internal
stakeholders in managing and resolving internal audit
When preparing our Modern Slavery Statement, suppliers
comprising 98% of our annualised spend were subject to a
risk assessment. Other initiatives included:
•
Implementation of a targeted audit program on high-risk
findings; and
suppliers; and
•
Stronger links between risk management, regulatory
compliance, quality systems, information security and
the internal audit functions to ensure that the function is
risk-based, proportionate, and focused on adding value
•
Development of a three-year strategy to strengthen and
enhance our risk management strategies for modern
slavery, child labour, and other forms of forced labour in
the IMDEX global supply chain.
to our business.
Our FY20 Modern Slavery Statement can be found on our
website at:
https://www.imdexlimited.com/about-us/corporate-governance
Our FY21 Modern Slavery Statement will be released in December 2021
39
IMDEX Annual Report 2021 This year I can say
confidently, despite travel
restrictions, the distance
between the Board Room and
our front-line teams has been
shorter than it has ever been.
PAUL HOUSE, IMDEX CEO
SAFETY AND QUALITY
Our HSE team partners with all stakeholders to
provide trusted advice, support regional needs
and uphold global standards to eliminate work-
related injuries and illness.
Further information regarding our QHSE Policies
can be found on our website at:
KEY FOCUS AREAS FOR FY22
• Managing High Potential Incidents through enhanced
reporting and investigation workflows.
•
Developing a Management & Supervisors Essentials
course that includes HSE as a core component.
•
Building on existing HSE training resources within
https://www.imdexlimited.com/about-us/qhse
IMDEX Academy.
KEY SAFETY INITIATIVES FOR FY21
•
Safety Engagement through individual objectives, for
every part of the business
•
Enhancing communication via monthly performance
reports, updates, and Safety Alerts
OCCUPATIONAL HEALTH AND SAFETY
MANAGEMENT SYSTEM
QHSE Standards are central to our IMDEX Management
System. These Standards form a robust framework
to minimise operational risk, provide a safe working
•
Driving accountability through live leading indicator
environment and protect the health and wellbeing of our
dashboards, highlighting individual performance, from
team.
front line to the CEO
The QHSE Standards cover all employees and workers at any
•
Establishing five new QHSE Courses in IMDEX Academy,
of our locations globally and everyone is required to adhere
covering topics from Hazard and Risk Management to
to our IMDEX QHSE Management System.
Health & Wellbeing
To enhance the effectiveness of this system, an internal
Notable achievements throughout the year included
audit program is in place to target higher risk activities.
the continued success of iAuditor to enhance safety
engagement and our improved lost time injury rates.
Our Safety Engagement average increased from 12 to 17.6.
This rate is measured in iAuditor and records the number of
safety activities per employee.
Pleasingly, our Lost Time and Total Recordable Injury
Frequency Rates reduced by half.
Our six largest facilities around the world are independently
certified to ISO 9001:2015 and ISO 45001:2018.
IMDEX Lost Time & Total Recordable Injuries Frequency Rate (LTIFR & TRIFR) - 12 Months to date
41
IMDEX Annual Report 2021
HAZARD IDENTIFICATION, RISK
ASSESSMENT, AND INCIDENT
INVESTIGATION
OCCUPATIONAL HEALTH SERVICES AND
TRAINING
During the year we complemented our confidential Employee
The identification of workplace hazards during routine and
Assistance Program and IMDEX Wellness Series with
non-routine tasks is supported by online applications, Take
a Mental Health Strategy and regional Peer Supporter
5 and Job Safety Analysis, together with detailed workplace
Program.
inspections and Safety Observations.
Additional supporting courses have been created in IMDEX
All hazards and incidents are managed via our IMDEX Quality
Academy, including:
Alert system. We have also adopted the Incident Cause
Analysis Method (ICAM) to investigate incidents, identify
causal factors and implement improvement opportunities.
Leadership is a key part of our safety culture. Leaders
perform physical and virtual Safety Walkthroughs, engage
with team members and promote safe work practices.
Managers are accountable for the risk assessments
and registers that relate to their teams. All workers are
responsible for workplace safety and are encouraged to stop
work if they feel unsafe or observe an unsafe act.
WORK-RELATED INJURIES
During FY21 there were three recordable injuries relating to
sprains, strains and minor lacerations. All injured workers
made a full recovery.
•
•
HSE Induction
Health & Wellbeing
• Work Related Stress
Other opportunities for safety participation and training
include:
• Monthly Health & Safety meetings
•
•
Our online Quality Alert System
Our Digital Workplace, which provides mobile access to
all resources and business applications.
42
IMDEX Annual Report 2021 DATA SECURITY
During FY21 we focussed on improving visibility in the
Key focus areas in FY22 include:
network, building out our DevSecOps program and building
an Architecture Development Methodology. Notable
achievements during the period included:
•
Development and implementation of a data
classification scheme
•
Deploying a Data Loss Prevention system to address the
•
Deploying an industry leading Security Information
and Event Management solution to correlate logs and
risk of data loss
generate alerts for anomalies
•
Improving the DevSecOps program by conducting an
in-house Capture the Flag exercise to train developers
about secure software development
•
Developing an enterprise architecture framework
following TOGAF framework and embedding a software
architect in each of the software development projects.
•
Implementing a Cloud Access Security Broker to reduce
the risk from cloud apps
We will also work to expand our ISO/IEC 27001 certification
to include aiSIRIS, a product included in the IMDEX offering
through the acquisition of AusSpec.
TOGAF is a proven Enterprise Architecture methodology and framework used by the world’s leading
organisations to improve business efficiency. It is the most prominent and reliable Enterprise
Architecture standard. By embedding a software architect with security skills in each software
development team, IMDEX will also ensure that software developed for the consumption by
customers is safe and secure.
ISO/IEC 27001:2013 CERTIFICATION
Last year we achieved ISO/IEC 27001:2013 certification through SGS – a globally renowned inspection, verification,
testing and certification company. ISO/IEC 27001:2013 is an international information security standard, which is
recognised in 161 countries. Our certification demonstrates we operate an Information Security Management System
that is compliant with its mandatory requirements, have systematic processes for managing information security risks,
and have implemented controls mandated by the standard.
Our certification comprises a comprehensive range of activities including:
•
•
Software development processes
The product development life-cycle for its real-time subsurface intelligent solutions
• Manufacturing and deployment of products and technologies
•
•
Client support processes
Information technology systems for supporting these activities and digital functions
This was a significant milestone for our Company and provides additional assurance to clients regarding the end-to-
end security of their information – for example, ordering and dispatch using our Global Digital Rentals platform, critical
data collection and transfer with our award-winning cloud solution IMDEXHUB-IQ™ and ongoing support via our
24/7 Customer Care portal.
43
IMDEX Annual Report 2021 PEOPLE AND CULTURE
During FY21 our global workforce increased by
over 7% to 521 people, largely due to growth in
software engineering and supply chain teams.
DIVERSITY AND INCLUSION
We value and encourage diversity in our global workforce.
We seek to employ, retain and develop employees for the
long-term, assisting in their professional development and
the development of the culture and values of our Company.
Our aim is to build a diverse workforce and inclusive
environment where everyone feels able to participate and
achieve their potential. This strategy extends beyond legal
compliance and seeks to add value by contributing to our
employees’ health and well-being. IMDEX is committed to
providing equal opportunities for all employees.
We ensure employment decisions are made solely on
the basis of merit, taking into account relevant skills,
qualifications, experience and ability and without bias or
prejudice.
By building and developing teams that reflect the diversity of
our clients, and the local cultures we operate in, we continue
to grow as a global business spread across culturally diverse
regions.
IMDEX WOMEN-EQ
Our IMDEX WOMEN-EQ program continues to act as a
forum to share learnings and provide guidance, leadership,
inspiration, empowerment, and support for the personal
and professional development of all women at IMDEX. This
program is currently facilitated in APAC and South Africa.
EMPLOYEE WELLBEING
To support the health and well-being of our employees, we
continue to offer an Employee Assistance Program (EAP).
We launched a ‘Caring for the IMDEX Community’ program
aligned to our mental health and wellness strategy.
The program, and supporting initiatives, aim to ensure
psychological safety at work; employees feel supported to
bring their ‘full selves’ to work to be the best they can be and
feel connected to IMDEX.
A Peer Supporter network initiative was launched to promote
better understanding and awareness of mental health
challenges globally.
EMPLOYEE REWARDS
We take a holistic view to reward, to encourage a positive
Our approach to diversity is simple – we want everyone to
cultural environment that influences the attraction and
feel welcome at IMDEX and to achieve success in what they
retention of employees. Programs are designed to be fair,
do in an environment that values different perspectives and
equitable and compliant with local practices.
collaboration.
Pay analysis was conducted to evolve the Remuneration
We do this by deploying inclusion initiatives that support all
Framework in most locations that IMDEX operates, to
people to engage and collaborate without barriers, making a
enable us to review internal consistency and market
better workplace for everyone. In 2021, IMDEX supported our
competitiveness globally.
workforce on more inclusive workplace practices including:
A Global Recognition Framework was developed to provide
•
Updating our remote-working policies to create more
our employees with a set of tools to encourage recognition.
flexibility
Introducing paid domestic violence leave and support
From a simple ‘thank you’ to a special appreciation gift, the
framework helps create an environment more conducive of
the culture needed to meet the challenges and opportunities
Improving paid parental leave provisions.
of the future.
•
•
Further information can be found within our Diversity Policy
and Global Code of Conduct Policy on our website.
Further information relating to our remuneration policies for
Key Management Personnel are set out in the Remuneration
Report within the FY21 Financial Report.
45
IMDEX Annual Report 2021 HR TECHNOLOGY AND INNOVATION
CAPABILITY DEVELOPMENT
Further enhancements to People HUB, our human resources
information system, have been launched over the course
of the year. In June 2021, Succession Planning and Career
Development modules were introduced to the platform to
help manage career pathways for individuals, identify key
talent, and mitigate risks against business-critical roles.
Remuneration Reviews were launched in the platform to
help guide managers with pay structures across our global
locations.
GLOBAL INTERNSHIP PROGRAMS
During FY21 we continued to mature and expand our Global
Internship Programs. The Programs offer undergraduates
and new graduates the opportunity to work at one of our
global facilities and provide a hands-on learning environment
and practical experience, together with coaching and
mentoring opportunities. The Internship Programs were run
in Asia Pacific and the Americas and enrolments spanned
diverse disciplines including: engineering; finance; legal;
human resources; quality; and information technology.
CULTURAL TRANSFORMATION
A cultural transformation roadmap was developed in
response to our global engagement survey to drive
development of IMDEX’s brand proposition, vision, and
values, to create greater connection for our employees.
Team alignment strategies were facilitated with the
Executive team to create synergy and focus on collectively
driving delivery of strategic objectives.
We employ great minds to develop great solutions for our
clients. Our Learning and Development (L&D) framework
was launched to foster a culture of continuous learning and
offer development opportunities to our people. The L&D
Framework outlines development opportunities at four levels:
1. How we align new employees to IMDEX
2. Creating operational excellence in each function
3. Fostering leadership growth
4. Building strategic leadership.
Nominated IMDEX employees participated in the IMDEX
‘XSell Customer Solutions’ program aimed at developing
capabilities within our global sales team. The program
focused on equipping sales teams with skills to deliver value
propositions and present value based IMDEX solutions to
address client requirements.
As a result of the leadership capability assessment project,
we designed and implemented the ‘Leading IMDEX into the
Future Program (LIFT)’ focussing on:
•
•
•
•
•
•
Delivering a compelling vision and strategy
Instilling trust and fostering team performance
Finding a way to deliver
Decisive decision-making
Courage to challenge
Cultivating innovation.
46
IMDEX Annual Report 2021 OUR EMPLOYEE VALUE PROPOSITION
REMUNERATION
REFLECTING
BUSINESS
REQUIREMENTS,
STRATEGIC
MILESTONES AND
MARKET PRACTICES
BENEFITS
TANGIBLE AND
INTANGIBLE OFFERINGS
THAT REPRESENT
IMDEX’S BRAND AND
SUPPORT WELLBEING AND
DEVELOPMENT
WORKPLACE
AN ENVIRONMENT
THAT SUPPORTS
ENGAGEMENT AND
PRODUCTIVITY
RECOGNITION
DEVELOPMENT
FORMAL AND INFORMAL
PROGRAMS THAT ALIGN
WITH CORPORATE VALUES
AND INSTIL A CULTURE OF
CELEBRATION
PROGRAMS AIMED AT
FUTURE PROOFING
IMDEX AND SUPPORTING
EMPLOYEES TO THRIVE
SUSTAINABILITY
We are committed to enhancing our ESG related disclosure and delivering solutions that support
the sustainability of our clients’ operations.
INSIDE IMDEX
During FY21 we established an IMDEX Sustainability Policy, undertook an ESG materiality
assessment and prepared our first Sustainability Report.
Our Sustainability Report will be released to the market on 15 September 2021.
OUTSIDE IMDEX
Our products and technologies are designed to enhance efficiency, productivity and safety
while reducing costs and environmental impact. Examples of positive contributions to
sustainable operations include:
•
•
•
•
•
•
•
Reduced water consumption
Reduced site footprint and risk of environmental contamination
Enhanced safety for site personnel and wildlife
Reduced energy consumption
Reduced transportation to and from site
Availability of biodegradable and reusable packaging
Dust suppression.
SUSTAINABILITY
REPORT
2021
SUSTAINABILITY REPORT
Our FY21 Sustainability Report will be released to the market
on 15 September 2021.
The Sustainability Report can be found on our website at
https://www.imdexlimited.com/investors/annual-reports
49
IMDEX Annual Report 2021 The Company did an excellent job of adapting
to the challenges presented by COVID-19 and
executing its growth strategy.
ANTHONY WOOLES, IMDEX CHAIRMAN
GOVERNANCE
BOARD OF DIRECTORS
Our Board has extensive professional expertise,
business experience and knowledge of the
mineral exploration, mining, and technology
industries. It also has considerable experience
within capital and financial markets. Members
of the Board are well respected in these sectors
and play an active role in our Company’s
strategic planning.
Key priorities for the Board during FY21 included:
•
•
•
•
Enhancing safety performance
Underlying business performance and growth
Rigorous strategy development
Governance and enhancing ESG disclosure
During FY22 the Board will remain focused on these
priorities together with disciplined cost management,
execution of our strategy and achieving performance
milestones.
In February 2021 Ms Trace Arlaud was appointed Non-Executive Director. Trace has critical
skills in mining engineering, geology, and geophysics, together with broad international
experience. Based in Colorado, USA, she will contribute significantly to the governance of
IMDEX given our growing presence and prospects within that region.
Ms Sally-Anne Layman
Non-Executive Director
Mr Kevin Dundo
Non-Executive Director
Mr Anthony Wooles
Non-Executive Chairman
Mr Ivan Gustavino
Non-Executive Director
Appointed to the Board
6 February 2017
Appointed to the Board
14 January 2004
Appointed as Chairman
1 July 2016
Appointed to the Board
3 July 2015
Expertise:
Exploration, mining and
finance
Expertise:
Corporate and
commercial Law
Expertise:
Financial and capital
markets and strategic
marketing
Expertise:
Strategic growth and
transactions within the
technology sector
51
IMDEX Annual Report 2021 CORPORATE GOVERNANCE
CORPORATE GOVERNANCE STATEMENT
Our Corporate Governance Statement sets out the key features of our governance framework and
discloses the extent to which we have followed the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendation (ASX Recommendations).
We regularly review our corporate governance practices and policies against the requirements of both the Corporations Act
2001 (Cth) (Corporations Act) and the Listing Rules of the Australian Securities Exchange (ASX), and current best practice.
In FY21 we completed a review of our governance documents and are pleased to be able to report that the majority of our
governance practices align to the 4th edition of the ASX Recommendations.
Our Corporate Governance Statement is accurate and
current as at the date of this annual report and has been
approved by the Board.
Our Corporate Governance Statement can found on our website at:
https://www.imdexlimited.com/about-us/corporate-governance
IMDEX CODE OF CONDUCT
SUPPLIER CODE OF CONDUCT
Our IMDEX Code of Conduct (the Code) provides a
We are committed to transparent, safe, and ethical
framework for our decisions and actions and outlines the
procurement practices. Our aim is to partner with like-
standard of conduct expected of everyone who works for or
minded suppliers to help us deliver leading solutions that
on behalf of the Company.
All employees are expected to be familiar with and
understand the Code and complete training regarding the key
areas on an annual basis.
The Code is endorsed by our Board and Executive Leadership
Team and is reviewed and updated regularly to support the
growth of our business.
enhance our clients’ operations. To achieve this, we have
developed a Supplier Code of Conduct, which clearly sets out
our minimum expectations of suppliers, their subsidiaries,
and subcontractors (suppliers). The Supplier Code of
Conduct aligns with our Corporate Governance Polices,
company values and internal expected behaviours. Central to
these polices, values and behaviours is:
•
Safety for employees, contractors, clients, suppliers, and
•
•
•
the public
Compliant and ethical business practices
Diversity and human rights
Protecting the environment and communities in which
we operate
•
Respect, transparency, and support to speak-up.
We may choose not to work with, or cease to work with,
suppliers who do not meet these minimum expectations.
Our IMDEX Code of Conduct and Supplier Code of Conduct can
be found on our website at:
https://www.imdexlimited.com/about-us/corporate-governance
53
IMDEX Annual Report 2021 ETHICS AND CONFLICTS OF INTEREST
CERTIFICATION
SPEAK-UP POLICY
Our Speak-Up Policy supports our Code of Conduct and is
To safeguard the ongoing ethical and compliant operation of
designed to ensure that:
our global business, all employees are required to complete
an Ethics and Conflicts of Interest Certification annually. This
• We maintain the highest standards of corporate
governance and ethical conduct across all our
involves employees:
operations
•
Certifying that they have read and understand IMDEX’s
•
Our Company is a safe, respectful, and inclusive place
Speak Up Policy, Code of Conduct and the Anti-Bribery &
to work
Anti-Corruption Policy
•
Confirming that, to the best of their knowledge, they
All employees are encouraged to ask questions, query, and
report actual or suspected violations of our Code of Conduct
have been compliant with the Code, the two Policies and
or other IMDEX Polices without fear of retribution.
all applicable laws and regulations
•
Completing a conflict of interest declaration and
updating this declaration if their circumstances change
This process aims to ensure that all relevant risks are being
adequately reported and addressed and provides another
confidential means for employees to communicate potential
breaches or concerns.
Several methods are provided for making confidential
reports. In the first instance employees are encouraged to
report any matters of concern directly to their manager or
supervisor. Alternatively, they can make a report via phone,
email, mail or anonymously through our reporting platform,
IntegraCall®. IntegraCall® is multilingual and can be
accessed anytime from any mobile or device using either the
mobile app or the web portal.
We are committed to ensuring that:
•
All matters that are reported will be treated respectfully
and confidentially
•
Any investigations will be conducted in a timely manner
and will be fair and independent from any persons to
whom the disclosure relates
•
No one will suffer any detriment as a result of making a
report.
Our Speak-Up Policy can be found on our website at:
https://www.imdexlimited.com/about-us/corporate-governance
54
IMDEX Annual Report 2021 STAKEHOLDERS
We are committed to providing all stakeholders with transparent and genuine engagement to enhance and support their
experience with our products and business globally.
Further information on how we engage and collaborate with stakeholders is provided in our FY21 Sustainability Report.
KEY STAKEHOLDERS
GOVERNMENT & REGULATORS
SUPPLIERS
INDUSTRY PARTNERS
DISTRUBUTORS
CLIENTS
EMPLOYEES
COMMUNITY
SHAREHOLDERS
BOARD OF DIRECTORS
BOARD COMMITTEES
ESG
COMMITTEE *
AUDIT, RISK &
COMPLIANCE
COMMITTEE
RENUMERATION &
NOMINATION
COMMITTEE
DIGITAL
ADVISORY GROUP *
POLICIES &
PROCEDURES
CORPORATE CULTURE
& VALUES
RISK
MANAGEMENT
& INTERNAL
CONTROL
SYSTEMS
CHIEF EXECUTIVE OFFICER
IMDEX MANAGEMENT & EMPLOYEES
* These are not formally appointed Board Committees, but instead have Board and Management representation
55
IMDEX Annual Report 2021 IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
DIRECTORS REPORT
The Directors of IMDEX Limited (“IMDEX” or “the Company”) present their report together with the annual Financial Report of the
Company and its Subsidiaries (“the Group”) for the financial year ended 30 June 2021.
In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:
Directors
The names and particulars of the Directors of the Company during or since the end of the financial year are:
Name
Role
Particulars
Mr. A. Wooles
Non-Executive
Chairman
Ms. S. Layman
Independent,
Non-Executive
Director
•
Corporate Advisor and Executive
•
Director and Chairman since 1 July 2016
•
Chair of the Remuneration and Nomination Committee
• Member of the Audit, Risk and Compliance Committee
•
Has held executive and advisory roles in diverse industries including mining, oil
and gas, power generation, manufacturing, telecommunications, food and
beverages and retail
Non-Executive Director of High Peak Royalties Limited (2012 – current)
•
Engineer and Certified Practicing Accountant
Director since 6 February 2017
Chair of the Audit, Risk and Compliance Committee
•
•
•
• Member of the Australian Institute of Company Directors and CPA Australia
•
Extensive experience within the mining sector and financial markets with
significant international and cross commodity experience. Previously Division
Director – Metals & Energy Capital Division at Macquarie Bank Limited
Non-Executive Director of Pilbara Minerals Ltd (2018 – current), Beach Energy
Limited (2019 – current), Newcrest Mining Ltd (2020 – current), and formerly a
Non-Executive Director of Perseus Mining Ltd (2017 – 2020) and Gascoyne
Resources Limited (2017 – June 2019)
•
Mr. K. Dundo
Independent,
Non-Executive
Director
Lawyer
Director since 14 January 2004
•
•
• Member of the Remuneration and Nomination Committee and the Audit, Risk and
•
Compliance Committee
Non-Executive Director of Red 5 Limited (2010 – Current), Avenira Limited (2019 –
Current) and formerly a Non-Executive of Cash Converters International Limited
(2015 – 2020)
Mr. I. Gustavino
Independent,
Non-Executive
Director
Ms. T. Arlaud
Independent,
Non-Executive
Director
56
•
•
•
•
•
Corporate Advisor
Director since 3 July 2015
•
•
• Member of the Remuneration and Nomination Committee
•
Prior to his role as a corporate advisor, Mr. Gustavino was a co-founding
shareholder and Director of Surpac Software, now Dassault Systèmes GEOVIA Inc.
Non-Executive Chairman of CVCheck Limited (2018 – current)
Corporate Advisor
Director since 10 February 2021
Since 2019, Ms Arlaud has been Chief Executive Officer – Mining Specialist at IMB,
Inc, Frisco in Colorado, USA. Prior to this role she was Regional Director Mining for
the US and Western Canada/Mass Mining Lead (Globally)
Non-Executive Director of Global Atomic Corporation (TXX: GLO) (June 2020 –
current) and Non-Executive Director of Seabridge Gold (TSX: SEA, NYSE:SA) (June
2021 – current)
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
Directors’ Meetings
The following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held during the
financial year and the number of meetings attended by each Director (while they were a Director or committee member).
Board of Directors
Audit, Risk and Compliance
Committee
Remuneration and Nomination
Committee
(Number)
(Number)
(Number)
Held
Attended
Held
Attended
Held
Attended
A Wooles
K A Dundo
I Gustavino
S Layman
T Arlaud (i)
7
7
7
7
2
7
7
7
7
2
5
5
N/A
5
N/A
5
5
N/A
5
N/A
5
5
5
N/A
N/A
5
5
5
N/A
N/A
(i)
Ms T. Arlaud became a Non-Executive Director on 10 February 2021.
Company Secretary
Mr. P. Evans
Mr. Evans, a Chartered Accountant, joined IMDEX on 17 October 2006. After leaving professional practice he worked in a range of
commercial and financial roles in the media, manufacturing and telecommunications industries. Mr. Evans is a Fellow of the
Chartered Accountants Australia and New Zealand.
Mr. M. Tomasz
Mr Tomasz joined IMDEX in May 2021. He is admitted as a barrister and solicitor in the Supreme Court of New South Wales and
admitted as a Solicitor in England & Wales. He has experience in both corporate and commercial law gained from a variety of
multinational resource and industrial conglomerate companies.
Operations Review
Principal Activities
IMDEX is a leading global Mining-Tech company that enables resource companies and drilling contractors to safely find, mine and
define orebodies with precision and at speed.
The Company’s product offering includes an integrated range of drilling optimisation products, cloud-connected rock knowledge
sensors, and data and analytical software. This product offering is commodity agnostic and can be applied across the mining value
chain.
During FY21 IMDEX supported clients in more than 100 countries. The Company’s long-standing client base typically includes tier 1
drilling contractors and resource companies operating within the global minerals industry.
IMDEX has 22 facilities in all key mining regions of the world. Its head office is in Balcatta, Western Australia.
Review of Operations
A review of the operations of the consolidated entity during the financial year and of the results of those operations is contained in
the Annual Report.
57
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
Dividends
The following dividends have been paid by the Company or declared by the Directors since the commencement of the financial
year ended 30 June 2021:
(i)
(ii)
(iii)
(iv)
fully-franked final dividend of 0.7 cents (2019: 1.4 cents) per share paid on 13 October 2020;
fully-franked interim dividend of 1.0 cents (2020: 1.0 cents) per share paid on 23 March 2021;
fully-franked final dividend of 1.4 cents (2020: 0.7 cents) per share to be paid on 12 October 2021; and
fully-franked special dividend of 0.4 cents (2020: 2.0 cents) per share to be paid on 12 October 2021.
Changes in State of Affairs
There were no significant changes in the state of affairs of the Group.
Subsequent Events
There have been no matters or circumstances that have arisen since the end of the financial year that have significantly affected, or
may significantly affect, the operations of the Group, the result of these operations, or the state of affairs of the Group in future
financial years.
Environmental Regulations
The only entity in the Group that is subject to environmental regulations is Samchem Drilling Fluids and Chemicals (Pty) Ltd. They
are required to comply with the South African National Water Act, Act No 36 of 1998 which requires the management of effluent
discharge. This is controlled through an effluent system.
Non-audit services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in
note 5.8 to the financial statements. The Directors are satisfied that the provision of non-audit services, during the year, by the
auditor (or by another person or firm on the auditor’s behalf) is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.
The Directors are of the opinion that the fees paid for services provided as disclosed in note 5.8 to the financial statements do not
compromise the external auditor’s independence, based on advice received from the Audit, Risk and Compliance Committee, for
the following reasons:
•
All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of
the auditor, and
• None of the services undermine the general principles relating to auditor independence as set out in Code of Conduct
APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board,
including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the
Company, acting as an advocate for the Company or jointly sharing economic risks and rewards.
Auditor’s Independence Declaration
The auditor’s independence declaration is included in the Annual Report immediately prior to the Audit Report.
Indemnification of Officers and Auditors
During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company, the
Company Secretary, and all Executive Officers of the Company and of any related body corporate against a liability incurred as such
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 end of the financial year, except to the extent permitted by law, indemnified
or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an
officer or auditor.
58
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
Rounding Off of Amounts
The amounts contained in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) where
noted ($’000) under the option available to the Company under ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191. The Company is an entity to which this legislative instrument applies.
ASX Governance Principles and ASX Recommendations
The Australian Securities Exchange Corporate Governance Council sets out best practice recommendations, including corporate
governance practices and suggested disclosures (ASX Recommendations). ASX Listing Rule 4.10.3 requires companies to disclose
the extent to which they have complied with the ASX Recommendations and to give reasons for not following them.
Unless otherwise indicated, the ASX Recommendations including corporate governance practices and suggested disclosures have
been adopted by IMDEX for the full year ended 30 June 2021. In addition, the Company has a Corporate Governance section on its
website: www.imdexlimited.com (under the “Investors” heading) which includes the relevant documentation suggested by the ASX
Recommendations.
The IMDEX Group’s Corporate Governance Statement (Statement) for the financial year ending 30 June 2021 is dated as at 30 June
2021 and was approved by the Board of IMDEX (Board) on 15 August 2021. The extent to which IMDEX has complied with the ASX
Recommendations during the year ended 30 June 2021, and the main corporate governance practices in place can be viewed in the
Corporate Governance section on the Company website.
59
IMDEX Annual Report 2021
IIMMDDEEXX LLIIMMIITTEEDD
REMUNERATION
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
REMUNERATION REPORT
Remuneration Report (Audited)
This Remuneration Report for the year ended 30 June 2021 outlines the remuneration arrangements of the Company in
accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been
audited as required by section 308(3C) of the Act.
The report is presented under the following sections:
1.
Introduction
2. Highlights for FY21
3. Remuneration Governance
4. Executive Remuneration Arrangements
A. Remuneration principles and strategy
B. Approach to setting remuneration and details of incentive plans
C. Executive contracts
D. Looking forward to FY22
5. Executive Remuneration Outcomes for FY21
6. Non-Executive Director Remuneration
7. Additional Disclosures Relating to Options and Shares
8. Other Transactions
1.
Introduction
The Remuneration Report details the remuneration arrangements for Key Management Personnel (KMP) who are
defined as those persons having authority and responsibility for planning, directing and controlling the major activities
of the Company, directly or indirectly, including any Director (whether executive or otherwise) of the Company.
The table below details the KMP of the Company during FY21. Each was a KMP for the entire period unless otherwise
stated. For the purposes of this report, the term “Executive” includes the Senior Executives of the Company.
Non-Executive Directors
Mr A. Wooles
Mr K. Dundo
Mr I. Gustavino
Ms S. Layman
Ms T. Arlaud
Senior Executives
Mr P. House1
Mr P. Evans
Mr S. Southwell2
Mr M. Regan3
Ms M. Carey4
Mr T. Price5
Mr D. Loughlin6
Mr B. Ridgeway7
Non-Executive Chair
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 10 February 2021)
Chief Executive Officer
Chief Financial Officer and Company Secretary
Chief Operating Officer
Chief of Corporate Shared Services
Chief of Product Management and Marketing
Chief of Engineering and R&D
Global Business Development Director (ceased 8 February 2021)
Former Managing Director (ceased 1 July 2020)
Mr House commenced as Chief Executive Officer on 1 July 2020.
Mr Southwell commenced as Chief Operating Office and a member of KMP on 1 July 2020. Prior to this date, Mr Southwell occupied a
non-KMP role.
Mr Regan was appointed to the role of Chief of Corporate Shared Services effective 1 July 2020.
Ms Carey was appointed to the role of Chief of Product Management and Marketing effective 1 July 2020.
Mr Price’s position title was amended effective 1 July 2020.
Mr Loughlin left employment with the Company and ceased as a member of KMP on 8 February 2021.
Mr Ridgeway retired and ceased as a member of KMP effective 1 July 2020.
1.
2.
3
4.
5.
6.
7.
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2.
Highlights for FY21
As a result of changes to the IMDEX operating model, the roles and
responsibilities of Mr Regan and Ms Carey were significantly expanded in
FY21. Their base salaries were reviewed and adjusted in consideration
of appropriate external benchmarks relevant to the new roles.
Executive Fixed
Remuneration
increases
Market adjustments for two
executives
There were no other increases for Executives during the year.
The CEO’s base salary remained unchanged at $700,000 per annum
during FY21.
Short-term incentive
(“STI”) outcomes
100%
of maximum
Long-term incentive
(“LTI”) outcomes
2017 LTI
85%
vesting
Where applicable, the 20% reduction in pay for the period 1 April 2020
to 30 June 2020 in response to the COVID-19 pandemic, was reinstated
effective 1 July 2020.
See Statutory Remuneration in Section 5 for more details.
The Company had strong financial and safety performance in FY21,
exceeding budget EBITDA and Group Lost Time Injury Frequency Rate
(LTIFR), resulting in STI payments of 100% of maximum for Executives.
The CEO was awarded 100% of maximum. To increase his shareholding,
the CEO elected to receive the entire award (100%) in performance
rights subject to a three-year deferral period requiring continued
employment. The Board also resolved to match the deferred component
of the award at the future vesting date, subject to Mr House’s continued
service over the period.
See Section 5 for more information.
The 2017 LTI (FY18) had a three-year performance period ending on
30 June 2020. As result of performance testing untaken in September
2020, the Board approved vesting of this award at 85%.
For the three-year performance period ending 30 June 2021, the 2018
LTI (FY19) is anticipated to vest at 72%. Note - the outcome for this
award will not be known until all peer company reports for the
comparator group are released (typically from August to October 2021).
Indicative testing of results for this award have been provided in Section
5 of this report with final outcomes to be disclosed in the FY22
Remuneration Report.
See Section 5 for more information.
There were no increases to fees for NEDs in FY21.
Non-Executive
Directors (NEDs)
remuneration
increases
Review of the
Executive
Remuneration
Framework
NIL
The 20% reduction in Fees for the period 1 April 2020 to 30 June 2020 in
response to the COVID-19 pandemic, was reinstated effective 1 July
2020.
Refer to Section 6 for disclosures regarding our NEDs.
The review of our Executive Remuneration Framework was concluded
during FY21. Key changes to apply from 1 July 2021 include:
•
•
•
Remuneration mix revised to emphasise greater ‘at risk’
STI deferral introduced
LTI measures revised to relative TSR (50%), absolute EPS (20%) and
strategic milestones (30%)
The Board welcomes shareholder feedback in relation to the revised
framework for FY22, and ongoing to ensure IMDEX’s remuneration
remains appropriate.
Please refer to Section 4D for key changes relating to FY22.
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3.
Remuneration Governance
Remuneration and Nomination Committee
The Remuneration and Nomination Committee (the Committee) comprises three independent NEDs.
The Committee has delegated decision making authority for some matters related to the remuneration arrangements
for NEDs and Executives and is required to make recommendations to the Board on other matters.
Specifically, the Board approves the remuneration arrangements of the Chief Executive Officer (CEO) and other
Executives, and all awards made under the short-term incentive (STI) and long-term incentive (LTI) plans, following
recommendations from the Committee. The Board also sets the aggregate remuneration of NEDs, which is then subject
to shareholder approval, and NED fee levels. The Committee approves the level of the STI pool, having regard to the
recommendations made by the CEO.
The Committee meets regularly through the year. The CEO attends certain Committee meetings by invitation, where
management input is required and is not present during any discussions related to his own remuneration
arrangements.
Further information on the Committee’s role, responsibilities and membership can be seen at www.imdexlimited.com
Use of remuneration consultants
To ensure the Committee is fully informed when making remuneration decisions, it seeks external remuneration advice.
Remuneration consultants are engaged by, and report directly to the Committee. In selecting remuneration
consultants, the Committee considers potential conflicts of interest and requires independence from the Company’s
KMP and other Executives as part of their terms of engagement.
During the financial year, the Committee engaged The Reward Practice Pty Ltd as remuneration consultants to provide
remuneration services in respect to external benchmarking and general insights for Executive remuneration structures.
During the period no remuneration recommendations, as defined by the Corporations Act, were provided by The
Reward Practice Pty Ltd.
Remuneration report approval at 2020 AGM
The FY20 Remuneration Report received strong shareholder support at the 2020 AGM with a vote of 99.81% in favour.
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44..
Executive Remuneration Arrangements
4A: Remuneration principles and strategy
IMDEX’s Executive remuneration strategy is designed to attract, motivate and retain high performing individuals and
align the interests of Executives and shareholders.
The following diagram illustrates how the Company’s remuneration strategy aligns with the strategic direction and links
remuneration outcomes to performance.
Business Objective
Providing leading mining solutions to enhance the productivity and efficiency of our client’s operation across the mining value
chain.
Align the interests of Executives with our shareholders
Attract, motivate and retain high performing individuals
How our Remuneration Strategy links to our Business Objective
•
•
The Remuneration Framework incorporates “at-risk”
components, including both short and longer term
elements, delivered in cash and equity; and
Performance is assessed against financial and non-
financial measures, which are linked to IMDEX’s increased
growth and profitability and hence, shareholder value.
•
•
The remuneration offering is competitive for companies
of a similar size and complexity; and
Longer-term elements encourage retention.
Remuneration Component
Vehicle
Purpose
Base Salary
Comprises cash base salary
only.
Superannuation/Pension
STI
LTI
Compulsory superannuation/
pension contributions plus
other cash and non-cash
benefits.
Default payment is cash
unless Board discretion is
applied (e.g., grant of
performance rights).
Awards are made in the form
of performance rights.
To provide a competitive
base salary set with reference
to the role, location and
experience.
Statutory requirement and
benefits commensurate with
role, location and experience.
Focusses the efforts and
rewards Executives for their
contribution to achieving
outcomes that are a priority
for the Company in the
financial year, in addition to
individual performance.
Rewards Executives for their
contribution to the creation
of shareholder value over the
longer term.
Link to Performance
Company and individuial
performance considered
during the annual
remuneration review.
Benefits are considered
during the annual
remuneration review.
EBITDA is the key financial
metric.
Also linked to other internal
measures including safety,
customer service,
implementation of key
growth initiatives, risk
managment and people and
capability.
Vesting of awards is
dependent on Total
Shareholder Return (TSR) and
Earnings Per Share (EPS)
performance relative to a
peer group of companies.
Page 4 of 68
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IMDEX Annual Report 2021
64
IIMMDDEEXX LLIIMMIITTEEDD aanndd iittss ccoonnttrroolllleedd eennttiittiieess DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021 Page 5 of 68 44.. Executive Remuneration Arrangements (Continue) 4B: Approach to setting remuneration and details of incentive plans In FY21, the Executive remuneration framework consisted of base salary and short and long-term incentives as outlined below. Overall remuneration level and mix How is overall remuneration and mix determined? Remuneration levels are considered annually through a review that considers comparative market data, the performance of the Company and individual, and the broader economic environment. The Company aims to reward Executives with a level and mix (proportion of base salary and other benefits, short term incentives and long-term incentives) of remuneration appropriate to their position, responsibilities, and performance within the Company and that which is aligned with targeted market comparators. Comparative companies are based on the following: • Industry peers with similar market capitalisation; • Mining, Equipment, Technology and Services companies with comparable market capitalisation; and • Other industry companies with which IMDEX competes for talent. In FY21 remuneration benchmarking was undertaken with reference to industry peers with a comparative market capitalisation. The Company’s policy is to position base salary around the 62.5 percentile of industry peers. The chart below summarises the CEO other Executives’ remuneration mix based on maximum opportunity for Fixed Remuneration (base salary plus superannuation), STI and LTI. The mix is considered appropriate for IMDEX based on market relativity and alignment to the Company’s short term and long-term strategic imperatives. CEO Executives (Avg.) Base salary and other benefits How is base salary and other benefits reviewed and approved? Base salary and other benefits are reviewed annually from benchmarked remuneration data, and any changes for Executives are subject to approval from the Board considering recommendations from the Remuneration and Nomination Committee. IMDEX Annual Report 2021 IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
Short Term Incentives
What is the STI
plan?
The Company operates an annual STI program that is available to Executives subject to the
attainment of clearly defined Company and individual financial and non-financial measures.
What are the
performance
criteria and
how do they
align with
business
performance?
Actual STI payments awarded to each Executive depend on the extent to which performance
criteria set at the beginning of the financial year are met.
The performance criteria consist of several Key Performance Indicators (KPIs) covering financial
and non-financial, corporate, and business unit measures of performance which are focussed on
key performance drivers for the business. Within each KPI, stretch objectives are set.
Executives will only be eligible for a payment to the extent that the overarching EBITDA Gate is
met or exceeded. EBITDA is considered a key measure against which Management and the Board
assess the short-term financial performance of the Company.
Targets are set based on budget, adequacy of challenge and business objectives. Targets reflect
business expectations at that time and may vary from prior year performance depending on
economic and market conditions. The targets and outcomes may be adjusted (up or down) to
exclude the impacts of uncontrollable items such as fair value gains on deferred consideration and
gains on sale of investment.
The performance criteria and weightings are summarised as follows:
Performance Criteria Weighting Detail of Measures
Corporate
Safety
Individual
Performance
50%
20%
30%
Based on Group EBITDA outcomes versus
target
Based on Group LTIFR versus target
Based on key measures identified annually for
the executive and assessed against
expectations for the role. A combination of
scores assessed for executives based on
individual goals relating to:
• Customer Focus and Technical Leadership
• Operational Excellence & Quality
• Risk, Compliance & Safety
• People & Capability
• Strategic Initiatives
As part of the assessment, the participant will
be considered against the IMDEX values as
part of determining final outcomes.
What is the
value of the STI
award
opportunity?
How are STI
payouts
determined?
What happens
to STI awards
on cessation of
employment?
The CEO has a maximum STI opportunity of 30% of base salary. Other Executives have a maximum
STI opportunity of up to 25% of base salary if the EBITDA Gate is exceeded and all the stretch
targets are met.
On an annual basis, after consideration of performance against KPIs (including satisfying the
EBITDA Gate), the Board in line with their responsibilities, determine the amount (if any) of the STI
to be paid to each Executive, seeking recommendations from the CEO as appropriate. The use of
the EBITDA Gate ensures that the STI payouts are affordable to the business and are capped at the
sum of the individual’s target opportunity.
If an Executive ceases employment before the end of the financial year, generally no STI is
awarded for that year subject to overarching Board discretion.
Page 6 of 68
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IMDEX Annual Report 2021
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aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
Long Term Incentive
What is the LTI
plan?
Under the LTI plan, annual grants of performance rights (Rights) are made to Executives to align
remuneration with creation of shareholder value over the long-term.
How much can
Executives
earn?
The number of Rights granted is calculated on a Face Value basis. The CEO has a maximum LTI
opportunity of 50% of base salary. Other Executives also have a maximum LTI opportunity of
between 35% to 50% of base salary.
How is
performance
measured?
Executives are not eligible to receive dividends, or dividend equivalent payments on unvested
Rights.
Awards are subject to two measures, weighted equally: relative TSR and relative EPS.
Relative TSR is used to recognise the creation of shareholder value relative to market peers.
Relative EPS (rather than absolute EPS) has been selected by the Board to incentivise long term
behaviours and outcomes, relative to market peers. This is particularly important where resources
sector returns simply reflect a ‘rising tide’ across the sector.
Calculation of Relative TSR and relative EPS
IMDEX’s TSR and EPS is measured relative to a comparator group of ASX-listed companies
comprising the ASX300 Resources Index. These companies were chosen as they are of similar size
and reflect the Company’s competitors for capital. The TSR and EPS for IMDEX and comparator
companies is measured over three financial years (e.g., 1 July 2020 to 30 June 2023 for the 2021
LTI grant).
Relative TSR measures the percentage change in a company’s share price, plus the value of
dividends received during the period, assuming that all those dividends are reinvested into new
shares. No vesting will occur when the TSR for the performance period is negative.
Relative EPS is calculated as a company’s profit divided by the outstanding number of its ordinary
shares. The resulting number serves as an indicator of a company’s profitability. EPS performance
for each company in the comparator group (including IMDEX) uses reported basic EPS for both the
base year and third year and calculates the percentage growth over the three years. Where a
comparator company and/or IMDEX has a negative base year EPS and a positive final year EPS, the
absolute growth is calculated, adjusted for the correct sign of growth. This is considered an
equitable approach for determining the company performance over the performance period.
Note where IMDEX and/or a comparator company results in a final year negative EPS the company
is excluded from the analysis. Specifically, if IMDEX EPS results in a negative EPS final year, the LTI
will not vest.
The proportion of Rights that may vest based on relative TSR and relative EPS performance is
determined based on a combined ranking approach. The TSR for IMDEX and each company in the
comparator group is measured and the companies are ranked by their TSR performance. The EPS
growth for IMDEX and each company in the comparator group is calculated and the companies are
ranked by their EPS growth performance.
The ranking results for each company are then combined with the percentage of LTI awards that
vest to participants based on IMDEX’s percentile ranking against the combined results under the
following vesting schedule:
Combined percentile ranking of IMDEX
Below the 50th percentile
At the 50th percentile
Between the 50th percentile and 90th
percentile
At or above the 90th percentile
Portion of LTI that
vests
Nil vesting
33.33%
Pro-rata
100%
Note: Notwithstanding the percentile ranking, no vesting will occur where IMDEX’s TSR for the
Performance Period is negative or the EPS in the final year is negative.
Page 7 of 68
How is
performance
measured?
(continued)
66
IMDEX Annual Report 2021
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
Long Term Incentive
The performance measures are tested at the end of the three-year performance period to
determine the number of Rights that vest. There is no opportunity for re-testing. Rights will lapse
if the performance measures are not met at the end of the performance period.
Where a participant ceases employment prior to their award vesting due to resignation or
termination for cause, all Rights will be forfeited. Where a participant ceases employment due to a
qualifying reason (death, total and permanent disability, retirement, or redundancy), then vesting
will be determined based on the amount of performance period remaining and subject to Board
discretion.
In these circumstances, vesting will be determined at the discretion of the Board.
When is
performance
measured?
What happens
on cessation of
employment?
What happens
if there is a
change in
control?
4C: Executive contracts
Remuneration arrangements for KMP are formalised in employment agreements. The following outlines the details of
contracts with KMP.
CEO – Mr Paul House (effective 1 July 2020)
Mr. House is employed under an ongoing contract, which can be terminated with notice by either side.
Under the terms of the present contract:
• Mr House receives a base salary of $700,000 per annum.
• A maximum STI opportunity of 30% of base salary.
•
Eligibility to participate in the IMDEX LTI plan on terms determined by the Board. Maximum opportunity
at Face Value is 50% of base salary.
Termination provisions
Termination provisions specify that the CEO or the Company may terminate the agreement without cause by giving 6
months written notice. In addition to payment for accrued but untaken annual and long service leave, an additional
payment of 4 months’ base salary is payable on termination by the Company where termination is affected without
cause on 6 months’ notice, inclusive of any redundancy payment payable to the CEO. The Company may otherwise
terminate the contract on 3 months’ notice (due to illness or incapacity), 1 months’ notice (for misconduct) or no notice
(if engaged in criminal activity which brings the Company into disrepute). IMDEX can make a payment in lieu of notice
for all or some of the applicable notice period.
All other Executives are employed on individual open-ended employment contracts that set out the terms of their
employment. The termination provisions for other Executives are as follows:
Reason
Notice period
Payment in lieu of
notice
Treatment of STI on
termination
Treatment of LTI on
termination
Resignation
Up to 6 months
Up to 6 months
Unvested awards forfeited. Unvested awards forfeited.
Termination for cause
None
None
Unvested awards forfeited. Unvested awards forfeited.
Termination in cases of
death, disablement,
redundancy, without cause
Up to 6 months
Up to 12 months
Unvested awards
forfeited subject to
Board discretion
Vesting will be determined
based on the amount of
performance period
remaining and the
Executive’s performance,
subject to Board discretion.
Page 8 of 68
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IMDEX Annual Report 2021
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
4D: Looking forward to FY22
As foreshadowed in the 2020 Remuneration Report, a review of the Executive Remuneration Framework was deferred
due to the pandemic and has now been completed.
The review comprised a comprehensive assessment of Fixed Remuneration and the current STI and LTI Framework
which included seeking external advice and market benchmarking. The Board considered all aspects of remuneration
to ensure alignment with the business requirements, relevant market practice and key stakeholder expectations. As a
result of the review, the following key design changes have been determined:
Key change
Remuneration mix revised to increase the percentage of
the package that is ‘at risk’.
Rationale
Market alignment.
STI modified to introduce mandatory deferral of half of
the award for Executives into rights to IMDEX Limited
shares.
Encourage greater equity ownership aligned with
shareholder interests and performance assurance.
Revised performance measures for STI and LTI.
Align with short and long-term business imperatives.
The changes outlined below, in respect of Executives, have been approved by the Board for implementation from 1 July
2021.
Fixed Remuneration
There will be targeted increases to base salaries for two Executives. Consideration for these increases is driven by the
responsibilities of the roles, performance of the individuals and relativity with our external market comparators. These
target increases will be 13% on average.
The CEO’s base salary will increase from $700,000 to $750,000 per annum.
STI
The key change is the mandatory deferral of half the award into Rights to IMDEX Limited shares. The Rights will be
deferred for 12 months and are subject to continued service. An increase to the maximum opportunity is also outlined
below.
Component
Vehicle
Current Plan
Default payment is cash unless
Board discretion is applied (e.g.,
grant of performance rights).
Revised Plan
50% cash
50% Rights, deferred for 12 months
Maximum Opportunity
(% of Base Salary)
Performance Measures
CEO – 30%
Other Executives: 25%
EBITDA Gate
CEO – 50%
Other Executives 35%
EBITDA Gate remains
EBITDA (50%)
Safety (20%)
Individual (30%)
Corporate (50%) – including financial / non-financial
Regional (20%) - including financial / non-financial
Individual (30%) - including financial / non-financial
LTI
The key changes are the introduction of absolute EPS and strategic milestones and an increase to the maximum
opportunity for all Executives in line with our external market comparators. The vesting schedule has also been
amended to more align with relevant market practice.
Component
Vehicle
Performance Period
Current Plan
Performance Rights
Three years
Maximum Opportunity
Performance Measures
CEO – 50%
Other Executives: 35%-50%
Relative TSR (50%)
Relative EPS (50%)
Revised Plan
Performance Rights
Three years
CEO – 100%
Other Executives: 70%
Relative TSR (50%)
Absolute EPS (20%)
Strategic Measures (30%)
Comparator Group
Constituents of the S&P ASX300
Resources Index
Constituents of the S&P ASX300 Resources Index
68
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IMDEX Annual Report 2021
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
5.
Executive Remuneration Outcomes for FY21
Company performance
A summary of IMDEX’s business performance as measured by a range of financial and other indicators, including disclosure
required by the Corporations Act 2001, is outlined in the table below.
Measure
Revenue ($’000)
Adjusted EBITDA ($’000) 1
Net profit before tax ($’000)
Net profit after tax ($’000)
Share price at start of year (cents)
Share price at end of year (cents)
Interim dividend (cents) – fully franked
Final dividend (cents) – fully franked
Special dividend (cents) – fully franked
Basic earnings / (loss) per share (cents)
Diluted earnings / (loss) per share (cents)
FY21
264,375
75,501
44,531
31,667
111.0
204.0
1.0
1.4
0.4
8.01
7.80
FY20
237,691
54,447
29,142
21,758
131.0
111.0
1.0
0.7
2.0
5.64
5.46
FY19
243,655
52,336
37,452
27,608
123.5
131.0
0.8
1.4
-
7.37
7.01
FY18
218,475
42,384
28,591
21,115
75.5
123.5
-
-
-
5.73
5.37
FY17
186,702
31,496
5,906
3,663
21.0
75.5
-
-
-
1.14
1.06
1.
Fair value gain on deferred consideration of $2.9m (FY21) and gain on sale of investment $3.6m (FY20) were deemed by the Board as
uncontrollable and were therefore excluded in the EBITDA calculation.
Company performance and its link to short-term incentives
An STI payment will only be made to the extent that the overarching EBITDA Gate is met or exceeded.
The following table shows IMDEX’s actual EBITDA performance to budget target over the three financial years from 1
July 2018 to 30 June 2021.
Financial year
EBITDA vs Gate
FY21
FY20
FY19
Performance in FY21
Exceeded
Not met
Not met
The table below sets out the STI measures for FY21 and performance outcomes against those measures. The EBITDA
and Safety (LTIFR) performance significantly exceeded FY20 outcomes, which is testament to the efforts of the
employees and management of IMDEX over the previous 12 months. This results in STI outcomes at or near maximum
for Executives and is the first time in the last three years that the STI has been awarded.
Objective
Weighting
Performance Achieved/Comments
% Achieved
Corporate
50%
FY21 EBITDA of $75.5m is a material improvement on FY20 results
and improvement on the FY21 budgeted EBITDA.
This has resulted in the EBITDA Gate being achieved, and this
portion of the STI being awarded in full.
Safety
20%
Actual LTIFR of 1.85 was significantly better than the target of
<3.97, resulting in this portion of the STI being awarded in full.
Individual
30%
Individual objectives for the year related to achieving key results in
Customer Focus & Technical Leadership, Operational Excellence &
Quality, Risk, Compliance & Safety, People & Capability and
strategic initiatives.
50%
20%
30%
Page 10 of 68
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IMDEX Annual Report 2021
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
Objective
Weighting
Performance Achieved/Comments
Based on individual performance throughout the year, Executives
achieved 100% of outcomes.
% Achieved
The Board assessed the CEO’s individual performance as 100%.
The following table outlines the STI outcomes for Executives, including the proportion of maximum STI that was earned
and forfeited in relation to FY21.
Corporate
Outcome
Safety
Outcome
Individual
Outcomes
Overall Outcomes
STI
Awarded
Percentage of
maximum STI
Executive
Mr P. House2
Mr P. Evans
Mr S. Southwell
Mr M. Regan
Ms M. Carey
Mr T. Price
Mr D. Loughlin3
Mr B. Ridgeway4
(%)
100
100
100
100
100
100
-
-
(%)
100
100
100
100
100
100
-
-
(%)
100
100
100
100
100
100
-
-
(% of base
salary)
30.0
22.5
25.0
22.5
25.0
25.0
-
-
($)
Awarded
Forfeited
210,000
117,393
105,000
107,500
92,500
142,045
N/A
N/A
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
1.
2.
3.
4.
FY21 STI will be paid in September 2021, after the end of the performance period.
Mr House has elected, and the Board agreed to defer his entire award into Rights to IMDEX Limited shares – see note below.
Mr Loughlin left employment with the Company and ceased as a member of KMP on 8 February 2021. As such, he was not eligible to
participate in the FY21 STI.
Mr Ridgeway retired and ceased as a member of KMP effective 1 July 2020. As such, he was not eligible to participate in the FY21 STI.
Voluntary Deferral of STI for the CEO
To increase his shareholding in the Company, the CEO, Mr House elected, and the Board agreed to defer his entire FY21
STI award ($210,000) into Rights to IMDEX Limited shares. The Rights will be deferred for three years, vesting in 2024 and are
subject to continued service. The Board also resolved to match the deferred component of the award at the future vesting date,
subject to Mr House’s continued service over the period.
70
Page 11 of 68
IMDEX Annual Report 2021
71
IIMMDDEEXX LLIIMMIITTEEDD aanndd iittss ccoonnttrroolllleedd eennttiittiieess DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021 Page 12 of 68 Company performance and its link to long-term incentives LTI vesting is driven by the Company’s TSR and EPS performance relative to the companies within the ASX 300 Resources Index peer group. The chart below shows the performance of the Company as measured by the Company's three-year relative TSR and EPS compared to the peer group for each of the LTI grants vesting over the past five years. The following table provides a summary of the Company’s performance and vesting outcomes for each of the LTI grants. 2018 LTI1 2017 LTI2 2016 LTI 2015 LTI 2014 LTI3 Grant Date Jul-18 Jul-17 Jul-16 Jul-15 Jul-14 Expiry Date Jun-21 Jul-20 Jul-19 Jul-18 Jul-17 IMDEX 3-year TSR 62% 66% 382% 305% -5.2% IMDEX 3-year EPS Growth 33% 395% 132% 155% 144% Combined Percentile Rank 73rd 81st 76th 82nd 73rd Vesting Percentage 72% 85% 76% 87% 0% 1. 2018 (FY19) LTI is indicative only. The outcome will be known when company reports for the comparator group are released (typically from August to October 2021). 2. 2017 (FY18) LTI outcome has been updated to reflect final performance testing undertaken in September 2020. 3 2014 (FY15) LTI resulted in no vesting due to a negative TSR for IMDEX over the three-year performance period. IMDEX Annual Report 2021 d
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IMDEX Annual Report 2021
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
6.
Non-Executive Director Remuneration
Remuneration policy
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed
annually against fees paid to Non-Executive Directors of comparable ASX listed companies with similar market
capitalisation of the Company, as well as similar sized industry comparators. The Board considers advice from external
consultants when undertaking the annual review process.
The Company’s constitution and the ASX listing rules specify that the NED fee pool shall be determined from time to
time by a general meeting. The latest determination was at the 2015 AGM when shareholders approved an aggregate
fee pool of $700,000 per annum.
Structure
The remuneration of NEDs consists of Director Fees and Committee Fees. The payment of additional fees for serving on
a committee recognises the additional time commitment required by NEDs who serve on sub-committees. The Board
Chair attends all committee meetings but does not receive any additional fees in addition to the Board Chair fee. To
ensure independence, NEDs do not participate in any incentive schemes.
The table below summarises the NED fee policy for FY21:
Director Fees
Board Chair
Non-Executive Directors
Committee Fees
Committee Chair
Committee Member
$245,000
$110,000
$25,000
-
The remuneration of NEDs for FY21and FY20 is detailed below. Note figures for FY20 include a 20% reduction for the
period 1 April 2020 to 30 June 2020 in response to the COVID-19 pandemic.
Non-Executive
Director
Mr. A. Wooles1
Ms. S. Layman2
Mr. K. Dundo3
Mr. I. Gustavino4
Ms T. Arlaud5
Year
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
Short-term benefits
Post-employment
Director Fees
Other
Superannuation
245,000
233,127
135,000
128,638
98,536
97,353
96,162
99,727
42,778
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,544
9,474
9,544
9,474
-
-
Total
245,000
233,127
135,000
128,638
108,080
106,827
105,706
109,201
42,778
-
Totals
636,564
577,793
1. Mr Wooles is a director of Trudo Consulting Pty Ltd. His director’s fees (which are subject to GST) were paid to Trudo Consulting Pty Ltd and are shown
617,476
558,845
19,088
18,948
FY21
FY20
-
-
net of GST.
2. Ms Layman is a director of RL Advisory Pty Ltd. Her director’s fees (which are subject to GST) were paid to RL Advisory Pty Ltd and are shown net of GST.
3 Mr Dundo is a director of KD Legal Pty Ltd. His director’s fees (which are subject to GST) were paid to KD Legal Pty Ltd and are shown net of GST.
4. Mr Gustavino is a director of Gustavino Capital Pty Ltd. His director’s fees (which are subject to GST) were paid to Gustavino Capital Pty Ltd and are
shown net of GST.
5 Ms Arlaud was appointed as a Non-Executive Director on 10 February 2021. Fees for FY21 are reflective of her appointment date.
Page 14 of 68
73
IMDEX Annual Report 2021
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
7.
Additional Disclosures Relating to Options and Shares
Performance Rights awarded, vested and lapsed during the year
The following table sets out the Rights held by Executives, including the movements in Rights held during FY21.
Executive
Mr P. House
Mr P. Evans
Mr S. Southwell
Mr M. Regan
Ms M. Carey
M. T. Price
Mr D. Loughlin
Balance at
start of period
1 July 2020
Granted as
remuneration
Performance
Rights exercised
Performance
Rights lapsed/
forfeited
Balance1 at
end of period
30 June 2021
544,030
483,336
105,255
310,877
398,507
592,078
491,836
319,635
150,091
134,247
196,346
168,950
202,527
-
-
(164,664)
(188,590)
-
-
(123,498)
(220,752)
(193,221)
(30,090)
(34,460)
-
-
(22,568)
(40,337)
(114,621)
668,911
410,377
239,502
507,223
421,391
533,516
183,994
-
-
1,389,608
Mr B. Ridgeway
1,389,608
1.
2.
3.
Includes Performance Rights held directly, indirectly and beneficially by Executives.
Mr Loughlin left employment with the Company and ceased as a member of KMP on 8 February 2021. Closing balance is at this date.
Mr Ridgeway retired and ceased as a member of KMP effective 1 July 2020. Closing balance is at this date.
Performance Rights in existence during the current year
Award1
Grant Date
Expiry
Date
Exercise
Price
Tranche 19
1-Jul-17
Jul-20
MD Tranche
19-Oct-17
Jul-20
Tranche 20
1-Jul-18
Jul-21
MD Tranche
4-Nov-18
Jul-21
Tranche 21
21-Oct-19
Jul-22
MD Tranche
21-Oct-19
Jul-22
Tranche 22
1-Jul-20
Jul-23
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Market
Value
at
Grant
$
Number of Performance Rights
Opening
balance
Granted
Satisfied
by the
allotment
of shares
Expired2
Closing
balance
0.740
3,888,120
0.965
643,762
0.947
2,626,391
0.763
364,086
1.109
3,300,386
1.109
127,602
-
-
-
-
-
-
1.254
-
3,640,787
(3,408,944)
(479,176)
(547,348)
(96,414)
-
-
-
-
-
-
-
(188,240)
2,438,151
-
364,086
(399,462)
2,900,924
-
127,602
(79,745)
3,561,042
1.
2.
MD Tranche relates to the former Managing Director of IMDEX.
Rights expire due to not meeting the service and/or performance conditions.
74
Page 15 of 68
IMDEX Annual Report 2021
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
Performance rights on issue at the date of this report
There were no alterations to the terms and conditions of Performance Rights awarded as remuneration since their
award date
Issuing
Entity
Award1
Class of
shares
Exercise
price
Grant
date
Expiry
date
Key
terms
Number of
shares under
Performance
Rights
IMDEX
Performance Rights (Tranche 20)
Ordinary
Nil
1 Jul 2018
Jul 2021
(aa)
2,438,151
IMDEX
Performance Rights
(Managing Director Tranche 9)
Ordinary
Nil
4 Nov 2018
Jul 2021
(bb)
364,086
IMDEX
Performance Rights (Tranche 21)
Ordinary
Nil
21 Oct 2019
Jul 2022
(cc)
2,900,924
IMDEX
Performance Rights
(Managing Director Tranche 10)
Ordinary
Nil
21 Oct 2019
Jul 2022
(dd)
127,602
IMDEX
Performance Rights (Tranche 22)
Ordinary
Nil
1 Jul 2020
Jul 2023
(ee)
3,561,042
1.
(aa)
(bb)
(cc)
(dd)
(ee)
Managing Director Tranche relates to the former Managing Director of IMDEX.
To be satisfied by the issue of fully paid ordinary shares in IMDEX on or about September 2021. A combination of Performance Rights
subject to the achievement of specified performance hurdles and ongoing employment tenure, and Performance Rights subject only to
ongoing employment tenure.
To be satisfied by the issue of fully paid ordinary shares in IMDEX on or about September 2021. Subject to achievement of specified
performance hurdles and ongoing employment tenure.
To be satisfied by the issue of fully paid ordinary shares in IMDEX on or about September 2022. A combination of Performance Rights
subject to the achievement of specified performance hurdles and ongoing employment tenure.
To be satisfied by the issue of fully paid ordinary shares in IMDEX on or about September 2022. Subject to achievement of specified
performance hurdles and ongoing employment tenure.
To be satisfied by the issue of fully paid ordinary shares in IMDEX on or about September 2023. Subject to achievement of specified
performance hurdles and ongoing employment tenure.
Page 16 of 68
75
IMDEX Annual Report 2021
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2021
KMP Shareholdings
The table below details the number of shares held in IMDEX and the movement during FY21.
Class of
shares
Balance at
start of period
1 July 2020
Shares
allocated
under
remuneration
framework1
Non-Executive Directors
Mr A. Wooles
Ms S. Layman
Mr K. Dundo
Mr I. Gustavino
Ms T. Arlaud3
Senior Executives
Mr P. House
Mr P. Evans
Mr S. Southwell4
Mr M. Regan
Ms M. Carey
Mr T. Price
Mr D. Loughlin5
Mr B. Ridgeway6
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
700,000
70,000
204,546
62,077
-
-
659,021
-
-
200,906
546,164
479,000
4,970,907
-
-
-
-
-
164,664
188,590
-
-
123,498
220,752
193,221
-
Number of
Performance
Rights2 not
vested at year-
end
Balance1 at
end of period
30 June 2021
400,000
70,000
204,546
62,077
-
164,664
687,611
-
-
259,404
552,159
580,000
-
-
-
-
-
668,911
410,377
239,502
507,223
421,391
533,516
183,994
Net change
Other
(300,000)
-
-
-
-
-
(160,000)
-
-
(65,000)
(214,757)
(92,221)
-
4,970,907
1,389,608
1.
2.
3.
4
5.
6.
All shares were issued for nil consideration.
Includes Ordinary Shares and Performance Rights held directly, indirectly and beneficially by KMP.
Ms Arlaud was appointed as a Non-Executive Director on 10 February 2021. Data in the table above is reflective of her appointment
date.
Mr Southwell commenced as a member of KMP on 1 July 2020. Data in the table above is reflective of his appointment date.
Mr Loughlin left employment with the Company and ceased as a member of KMP on 8 February 2021. Closing balance is at this date.
Mr Ridgeway retired and ceased as a member of KMP effective 1 July 2020. Closing balance is at this date.
8.
Other Transactions
Mr. I Gustavino is a director and shareholder in consulting company Atrico Pty Ltd, that during the financial year from 1 July 2020 to
30 September 2020 (when the agreement was terminated), provided consulting services to the value of $16,200 (2020: $86,100) to
the IMDEX Group on normal commercial terms and conditions. At the direction of the vendors of AusSpec International Limited
(Refer Note 5.2 Acquisition of subsidiaries), the Group issued IMDEX shares to Atrico Pty Ltd to satisfy a fee owed by the vendors to
Atrico Pty Ltd. Refer to ASX announcement 12 August 2020.
There are no other transactions and balances with key management personnel and their related parties.
End of Remuneration Report.
Signed in accordance with a resolution of the Directors made pursuant to S.298(2) of the Corporations Act 2001.
On behalf of the Directors
Mr. Anthony Wooles
Chairman
PERTH, Western Australia, 15 August 2021
76
Page 17 of 68
IMDEX Annual Report 2021
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ DECLARATION
The Directors declare that:
(a)
(b)
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable;
in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act
2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance
of the Group;
(c)
in the Directors’ opinion, the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board, as stated in note 1.1 to the financial statements; and
(d) the Directors have been given the declarations required by s.295A of the Corporations Act 2001.
At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 2016/191. The nature of
the deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of
any debt in accordance with the deed of cross guarantee.
In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Class
Order applies, as detailed in note 5.3 to the financial statements will, as a group, be able to meet any obligations or liabilities to
which they are, or may become, subject by virtue of the deed of cross guarantee.
Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.
Dated at PERTH, Western Australia, 15 August 2021
Mr. Anthony Wooles
Page 18 of 68
77
IMDEX Annual Report 2021
CONTENTS
FINANCIAL
STATEMENTS
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
79
80
81
82
83
NOTES TO THE
FINANCIAL
STATEMENTS
About this Report
1.1 Basis of Presentation
1.2 Basis of Consolidation
1.3 Changes to Accounting Policies
1.4 Critical Accounting Judgements
and Key Sources of Estimation Uncertainty
Operating Performance
2.1 Earnings per Share
2.2 Segment Information
2.3 Revenue and Expenses
2.4 Dividends
2.5 Other Income
Debt & Capital
3.1 Cash
3.2 Borrowings
3.3
Issued Capital
3.4 Financial Risk Management
3.5 Commitments For Expenditure
Other Assets & Liabilities
4.1 Trade and Other Receivables
4.2
Inventories
4.3 Property, Plant & Equipment
4.4 Leases
4.5
Intangible Assets
4.6 Trade & Other Payables
4.7 Provisions
4.8 Deferred Consideration
Other
5.1 Taxation
5.2 Acquisition of subsidiaries
5.3 Parent Entity & Subsidiary Information
5.4 Reserves
5.5 Contingent Assets & Liabilities
5.6 Key Management Personnel Compensation
5.7 Related Party Transactions
5.8 Auditor Remuneration
5.9 Subsequent Events
84
84
86
91
97
106
SHAREHOLDER
INFORMATION
130
IMDEX Annual Report 2021
FINANCIAL STATEMENTS
IMDEX LIMITED
and its controlled entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2021
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 30 JUNE 2021
Revenue from sale of goods, rentals and software
Other income
Raw materials and consumables used
Employee benefit expense
Depreciation and amortisation expense
Finance costs
Other expenses
Profit before tax
Income tax expense
Profit for the period
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences arising on the translation of foreign operations
Other comprehensive income for the year, net of income tax
Total comprehensive income for the year
Year Ended
30 June 2021
Year Ended
30 June 2020
Notes
$’000
$’000
2.3
2.5
2.3
2.3
2.3
2.3
5.1
264,375
237,691
3,042
3,814
(81,572)
(67,090)
(30,783)
(3,246)
(40,195)
44,531
(77,573)
(66,448)
(26,488)
(2,631)
(39,223)
29,142
(12,864)
(7,384)
31,667
21,758
(1,416)
(1,416)
(3,177)
(3,177)
30,251
18,581
Profit attributable to owners of the parent
31,667
21,758
Total comprehensive income attributable to owners of the parent
30,251
18,581
Earnings per share
Basic profit per share (cents)
Diluted profit per share (cents)
2.1
2.1
8.01
7.80
5.64
5.46
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
80
Page 20 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
AS AT 30 JUNE 2021
Notes
30 June 2021
$’000
30 June 2020
$’000
Current assets
Cash and Cash Equivalents
Trade and other receivables
Inventories
Current tax assets
Other
Total current assets
Non-current assets
Property, plant and equipment
Right-of-Use Assets
Deferred tax assets
Intangible assets
Other
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Deferred consideration
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Deferred consideration
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
3.1
4.1
4.2
5.1
4.3
4.4
5.1
4.5
4.6
4.4
4.8
5.1
4.7
4.4
4.8
3.2
4.7
3.3
5.4
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
58,477
58,243
41,501
2,330
5,185
165,736
45,621
32,960
25,144
92,943
3,708
200,376
366,112
37,885
4,064
5,741
4,582
5,693
57,965
34,809
8,926
11,128
233
55,096
113,061
253,051
169,078
1,088
82,885
253,051
38,263
43,520
41,161
3,155
4,001
130,100
43,143
36,489
24,808
83,582
-
188,022
318,122
26,876
6,385
107
2,382
4,621
40,371
35,132
14,619
6,115
253
56,119
96,490
221,632
158,697
4,464
58,471
221,632
Page 21 of 68
81
IMDEX Annual Report 2021
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F
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest and other costs of finance paid
Income tax paid
Net cash provided by operating activities
Cash flows from investing activities
Interest received
Payment for property, plant and equipment
Payment for intangible assets
Proceeds on sale of investment
Acquisition of AusSpec
Acquisition of Flexidrill
Net cash used in investing activities
Cash flows from financing activities
Repayment of borrowings
Proceeds from borrowings
Dividends paid
Hire purchase payments
Repayment of lease liabilities
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on the balance of cash held in
foreign currencies
Cash and cash equivalents at the end of the financial year
Year Ended
30 June 2021
$’000
Year Ended
30 June 2020
$’000
Notes
272,359
(207,890)
(491)
(7,080)
56,898
270,722
(208,176)
(527)
(9,649)
52,370
142
(24,567)
(2,572)
-
(1,004)
-
(28,001)
(8,129)
13,363
(6,740)
-
(6,890)
(8,396)
20,501
38,263
(287)
58,477
189
(23,171)
-
6,362
-
(2,537)
(19,157)
(200)
-
(17,075)
(67)
(6,392)
(23,734)
9,479
29,476
(692)
38,263
3.1
5.2
3.1
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Page 23 of 68
83
IMDEX Annual Report 2021
The results of subsidiaries acquired or disposed of during the year
are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of disposal,
as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies into
line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
A change in the ownership interest of a subsidiary that does not
result in a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it:
•
•
•
•
•
•
derecognises the assets
liabilities of the subsidiary;
(including goodwill) and
derecognises the carrying amount of any non-controlling
interest;
recognises the fair value of the consideration received;
recognises the fair value of any investment retained;
recognises any surplus or deficit in profit or loss, and;
reclassifies to profit or loss or transfers directly to
retained earnings, as appropriate, the parent’s share of
components
other
comprehensive income.
recognised
previously
in
Certain prior year disclosures have been reclassified for
consistency with the current year presentation.
These
reclassifications are not material to the current period financial
report.
NOTES TO THE FINANCIAL STATEMENTS
IMDEX LIMITED
and its controlled entities
ABOUT THIS REPORT
ABOUT THIS REPORT
IMDEX Limited (the Company) is a listed public company,
incorporated in Western Australia and along with its subsidiaries
(collectively the “Group”) operates in Asia-Pacific, Africa / Europe
and the Americas. For the purposes of preparing the consolidated
financial statements, the Company is a for-profit entity.
1.1
Basis of Presentation
The Financial Report has been prepared on the going concern basis
and on the basis of historical cost. Cost is based on the fair values
of the consideration given in exchange for assets. All amounts are
presented in Australian dollars, unless otherwise noted and
accounting policies have been applied consistently in all periods
presented.
The amounts contained in the financial report have been rounded
to the nearest $1,000 (where rounding is applicable) where noted
($’000) under the option available to the Company under ASIC
Corporations
Financial/Directors’ Reports)
Instrument 2016/191. The Company is an entity to which this
legislative instrument applies.
(Rounding
in
The Financial Report is a general purpose financial report which:
•
•
•
•
in accordance with Australian
has been prepared
Accounting Standards (AASBs),
including Australian
Accounting Interpretations adopted by the Australian
Accounting Standards Board, and the Corporations Act
2001. The Financial Report of the Group also complies
with International Financial Reporting Standards (IFRSs)
and Interpretations as issued by the International
Accounting Standards Board (IASB);
presents reclassified comparative information where
appropriate to enhance comparability with the current
period presentation.
adopts all new and amended Accounting Standards and
Interpretations issued by the AASB that are relevant to
the operations of the Group and effective for reporting
periods beginning on or after 1 July 2020. Refer to note
1.3 for further details;
does not early adopt any Accounting Standards and
Interpretations that have been issued or amended but
are not yet effective, unless otherwise disclosed. Refer
to note 1.3 for further details; and
The financial statements were authorised for issue by the Directors
on 15 August 2021.
1.2
Basis of Consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the
Company (its subsidiaries). Control is achieved when the Group
has power over an entity and is exposed to, or has rights over, the
variable returns of the entity, as well as the ability to use this
power to affect the variable returns of the entity.
84
Page 24 of 68
IMDEX Annual Report 2021
1.4
of Estimation Uncertainty
Critical Accounting Judgements and Key Sources
In the application of the Group’s accounting policies,
management is required to make judgements, estimates and
assumptions about carrying values of assets and liabilities
that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical
experience and other relevant factors. Actual results may
differ from these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis. Significant
judgements, estimates and assumptions made by
management in the preparation of these financial statements
are outlined in the following notes:
•
•
•
•
•
•
4.1 – Recoverability of receivables
4.3 – Recoverability of non-current assets
4.5 – Intangible Assets
4.8 – Deferred consideration
5.1 – Taxation
5.2 – Acquisition of subsidiaries
IMDEX LIMITED
and its controlled entities
ABOUT THIS REPORT
ABOUT THIS REPORT
1.3
Changes to Accounting Policies
The Group has adopted all new and amended Australian
Accounting Standards and Interpretations which were required to
be applied from 1 July 2020.
Amendments to existing standards effective and adopted from
1 July 2020 but not relevant or significant to the Group:
Amendments to AASB 2020-4 COVID-19 Related Rent
Concessions
Amendments to IAS 1/IAS 8 Definition of material
Interpretation to IAS 38
Configuration or Customisation
Costs in a Cloud Computing
Arrangement
IMDEX has revised its accounting policy at 30 June 2021 to align
with the recent interpretation from the IFRS Interpretations
Committee in relation to accounting for cloud-based Software-as-
a-Service (SaaS) arrangements. The recent interpretation clarifies
the circumstances in which configuration and customisation
services associated with SaaS arrangements may be capitalised,
with emphasis on the requirement for ‘control’ of the intellectual
property of the underlying software code. As a result of this
change in accounting policy at 30 June 2021, IMDEX has de-
recognised $0.6 million of SAAS configuration or customisation
costs previously capitalised to the balance sheet, and opening
adjustment to retained earnings of $0.5 million and a net $0.1
million impact to the profit and loss for the year ended 30 June
2021.
New standards and amendments to standards that have been
issued but not yet effective or early adopted by the Group:
AASB 17
Insurance Contracts
Amendments to AASB 1
Amendments to AASB 3
Amendments to AASB 16
Amendments to AASB 137
Classification of Liabilities as
Current or Non-current
Reference to the Conceptual
Framework
Property, Plant and Equipment –
Proceeds Before Intended Use
Onerous Contracts – Cost of
Fulfilling Contract
85
Page 25 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OPERATING PERFORMANCE
OPERATING PERFORMANCE
2.1
Earnings per Share
Profit attributable to equity holders of the Company in the calculation of
basic and diluted earnings per share
Weighted average number of ordinary shares for the purposes of basic
earnings per share
Weighted average number of ordinary shares used in the calculation of
diluted earnings per share
From continuing operations
Basic earnings per share
Diluted earnings per share
2021
$'000
2020
$'000
31,667
21,758
Number of Shares
395,286,525
385,882,006
406,065,175
398,460,563
8.01
7.80
5.64
5.46
2.2
Segment Information
The primary means by which the Board view the
business and make key decisions
is based on
geographical lines.
An operating segment is a component of the Group that
engages in business activities from which it may earn
revenues and
incur expenses (including revenues and
expenses relating to transactions with other components of
the Group), whose operating results are regularly reviewed
by the Group’s Chief Operating Decision Maker (CODM) to
make decisions about resources to be allocated to the
segment and assess its performance and for which discrete
financial information is available. Management will also
consider other factors in determining operating segments
such as the existence of a regional general manager and the
level of segment information presented to the Board of
Directors.
Information reported to the CODM for the purposes of
resource allocation and assessment of segment performance
focuses on the regions serviced. The Directors of the
Company have chosen to organise the Group around
different geographical markets serviced by the entity’s
products and services.
No operating segments have been aggregated in arriving at
the reportable segments of the Group. All segments are in the
business of the manufacture and sale/rental of products and
software to the mining sector along the
following
geographical lines:
AM - Americas
APAC - Asia Pacific
AE – Africa / Europe
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items mainly
comprise deferred tax assets, treasury cash, net financing
costs for the Group and the corporate portion of head office
costs. Segment capital expenditure is the total cost incurred
during the period to acquire segment assets that are
expected to be used for more than one period.
The following is an analysis of the revenue and results for the
year, analysed by reportable segment.
86
Page 26 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OPERATING PERFORMANCE
OPERATING PERFORMANCE
2.2
Segment Information (continued)
Segment Revenues
AM – Americas
APAC – AsiaPac
AE – Africa / Europe
Total Revenue
Segment Results
AM – Americas
APAC – AsiaPac
AE – Africa / Europe
Total of all Segments
IMDEX Technology (i)
Central Administration Costs (ii)
Gain on sale of investment
Fair value gain on revaluation of deferred consideration
Finance costs (iii)
Profit before Income Tax
Income Tax Expense
Profit attributable to ordinary equity holders of IMDEX
2021
$'000
115,307
81,700
67,368
264,375
2020
$'000
98,169
80,462
59,060
237,691
27,026
24,389
23,991
75,406
(25,823)
(6,590)
-
2,917
(1,379)
44,531
(12,864)
31,667
9,665
26,808
18,633
55,106
(22,715)
(5,868)
3,625
-
(1,006)
29,142
(7,384)
21,758
(i)
(ii)
(iii)
During the year IMDEX revised the presentation of Engineering and Product Development (EPD) costs together with Product
Management costs, presenting these costs together as ‘Imdex Technology Costs’ to align with information presented to the Board of
Directors and management structure. In the prior year, EPD activities were reflected as a separate unallocated cost, whilst Product
Management costs were included within the operating segment results. Prior year comparatives have been reclassified for consistency.
EPD spend in FY21 totalled $19.1 million (FY20: $17.5 million).
Central Administration Costs comprise the corporate portion of head office costs. Head office costs attributable to operations are
allocated to reportable segments in proportion to the revenues earned from those segments.
Unallocated finance costs represent the finance costs associated with the Group treasury function. Interest on lease liabilities is
considered directly attributable to the segments and has been included in their segment results.
Segment Assets and Liabilities
AM - Americas
APAC - AsiaPac
AE – Africa / Europe
Total of all segments
Unallocated
Consolidated
Assets
Liabilities
2021
$'000
2020
$'000
2021
$'000
2020
$'000
110,575
129,604
58,470
298,649
67,463
366,112
91,326
133,751
50,799
275,876
42,246
318,122
24,036
50,982
7,666
82,684
30,377
113,061
18,506
48,030
6,731
73,267
23,223
96,490
For the purposes of monitoring segment performance and allocating resources between segments:
•
•
•
All assets are allocated to reportable segments other than tax assets and treasury cash.
All liabilities are allocated to reportable segments other than tax liabilities, the external loan and the deferred
consideration.
Certain prior year disclosures have been reclassified for consistency with the current year presentation. These
reclassifications are not material to the financial report.
Page 27 of 68
87
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OPERATING PERFORMANCE
OPERATING PERFORMANCE
2.2
Segment Information (continued)
Other Segment Information
2021
Depreciation on property plant and
equipment
Depreciation on right of use assets
Amortisation of intangible assets
Interest on lease liabilities
Acquisition of segment net assets
Significant non-cash expenses other than
depreciation and amortisation
2020
Depreciation on property plant and
equipment
Depreciation on right of use assets
Amortisation of intangible assets
Interest on lease liabilities
Acquisition of segment net assets
Significant non-cash expenses other than
depreciation and amortisation
AM -
Americas
$'000
APAC -
AsiaPac
$'000
AE – Africa /
Europe
Unallocated
Total
$'000
$'000
$'000
9,446
2,084
1,961
324
4,299
-
9,958
2,053
570
264
8,980
-
4,503
1,480
1,388
557
3,012
-
4,236
1,289
724
317
6,095
-
4,550
859
1,145
50
2,443
-
3,462
1,037
271
67
5,524
-
1,782
1,585
-
936
(1,639)
2,917
1,324
1,564
-
977
2,572
3,035
20,281
6,008
4,494
1,867
8,115
2,917
18,980
5,943
1,565
1,625
23,171
3,035
88
Page 28 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OPERATING PERFORMANCE
OPERATING PERFORMANCE
2.3
Revenue and Expenses
Revenue
Sale of goods (i)
Rentals and software (ii)
Note
2021
$’000
108,857
155,518
264,375
2020
$’000
110,401
127,290
237,691
(i)
(ii)
The Group typically satisfies the obligation associated with the sale of goods at a point in time upon shipment or delivery when control is
transferred to customers.
The Group typically satisfies the obligation to provide rental products and software subscriptions over time.
Expense analysis by nature:
Employee benefits expense
Salaries and wages
Defined contribution superannuation/pension costs
Share based payments
Depreciation and amortisation expense
Depreciation of Property, Plant and Equipment
Depreciation of Right-of-Use assets
Amortisation of Intangible Assets
Finance costs
Interest on lease liabilities
Accretion of interest on deferred considerations
Amortisation of borrowing costs
Interest and other financing costs
Note
4.3
4.4
4.5
4.4
4.8
3.2
2021
$’000
(60,540)
(3,539)
(3,011)
(67,090)
(20,281)
(6,008)
(4,494)
(30,783)
(1,867)
(791)
(97)
(491)
(3,246)
2020
$’000
(59,944)
(3,469)
(3,035)
(66,448)
(18,980)
(5,943)
(1,565)
(26,488)
(1,625)
(413)
(66)
(527)
(2,631)
Page 29 of 68
89
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OPERATING PERFORMANCE
OPERATING PERFORMANCE
2.3
Revenue and Expenses (continued)
Other expenses
Commissions
Consulting and legal expenses (i)
Rent and premises costs
Travel and accommodation
Motor vehicle costs
Obsolete stock
Doubtful debts
Software and network infrastructure
Materials associated with developing technologies
Other expenses
Note
2021
$’000
2020
$’000
(1,900)
(11,262)
(2,773)
(1,419)
(2,036)
(1,962)
(759)
(3,625)
(4,777)
(9,682)
(40,195)
(1,556)
(9,677)
(3,190)
(3,749)
(2,034)
(527)
(2,153)
(2,781)
(3,361)
(10,195)
(39,223)
4.1
(i)
Includes legal, audit, taxation, share registry, corporate secretarial fees and consulting services
During the period, the Group received $0.4 million (2020: nil) of COVID-19 related overseas government grants. These have been
offset against employee benefits expense.
Defined contribution plans
Contributions to defined contribution superannuation/pension plans are expensed when incurred.
2.4
Dividends
The following dividends have been paid by the Company or declared by the Directors since the commencement of the financial
year ended 30 June 2021:
(i)
(ii)
(iii)
(iv)
fully-franked final dividend of 0.7 cents (2020: 1.4 cents) per share paid on 13 October 2020;
fully-franked interim dividend of 1.0 cents (2020: 1.0 cents) per share paid on 23 March 2021;
fully-franked final dividend of 1.4 cents (2020: 0.7 cents) per share to be paid on 12 October 2021; and
fully-franked special dividend of 0.4 cents (2020: 2.0 cents) per share to be paid on 12 October 2021.
The franking account balance is $42.1 million (2020: $44.1 million).
2.5
Other Income
Other income
Fair value gain on deferred consideration
Gain on sale of investment
Interest Income
Other
Note
4.8
2021
$’000
2020
$’000
2,917
-
142
(17)
3,042
-
3,625
189
-
3,814
90
Page 30 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
DEBT & CAPITAL
DEBT & CAPITAL
3.1
Cash
Reconciliation of cash
For the purposes of the Statement of Cash Flows, cash includes cash on hand and held at banks, net of outstanding bank overdrafts.
Cash at bank earns interest at floating rates based on daily bank deposit rates. Cash at the end of the year as shown in the
Statement of Cash Flows is reconciled to the related items in the balance sheet as follows:
Cash
Reconciliation from the Profit for the Year to Net Cash Provided by Operating Activities
Profit for the year
Adjustments for non-cash items
Depreciation and amortisation of non-current assets
Interest received disclosed as investing activities
Share options and performance rights expensed
Gain on sale of investment
Fair value gain on deferred consideration
Interest on lease liabilities
Amortisation of borrowing costs
Other
Changes in assets and liabilities during the financial year
(Increase) / decrease in assets:
Current receivables
Current inventories
Other current assets
Other non-current assets
Increase / (decrease) in liabilities:
Current payables
Provision for employee entitlements
Current and deferred tax liability
Net Cash provided by Operating Activities
2021
$’000
2020
$’000
58,477
38,263
31,667
21,758
30,783
(142)
3,011
-
(2,917)
1,867
97
(181)
(17,137)
(2,844)
(1,598)
(3,708)
11,135
1,081
5,784
56,898
26,488
(189)
3,035
(3,625)
-
1,625
66
1,470
8,420
(6,654)
3,551
-
2,683
(1,455)
(4,803)
52,370
Page 31 of 68
91
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
DEBT & CAPITAL
DEBT & CAPITAL
3.2
Borrowings
Non-current borrowings
Secured
Bankwest
Commonwealth Bank of Australia
2021
$’000
-
11,128
11,128
2020
$’000
6,115
-
6,115
30-Jun-20
Cash flows
Non-cash changes
30-Jun-21
$’000
Repaid
$’000
Drawn
$’000
Foreign
Exchange
Movement
$’000
Bankwest Facility
Non-current borrowings
6,115
(6,129)
-
(155)
Commonwealth Bank of
Australia
Non-current borrowings
Total liabilities from
financing activities
-
(2,000)
13,363
(163)
6,115
(8,129)
13,363
(318)
$’000
-
-
-
Reclassification
Other
$’000
$’000
169
-
(72)
11,128
97
11,128
All loans and borrowings are initially recognised at the fair
value of the consideration received less directly attributable
fees, premiums paid and transaction costs. After initial
loans and borrowings are
recognition,
subsequently measured at amortised cost using the effective
interest method.
interest-bearing
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the
liability for at least twelve months after the reporting date.
On 29 September 2020, the Group replaced the previous
Bankwest facility with a new facility from the Commonwealth
Bank of Australia.
The key terms of the Commonwealth Bank Facility are as
follows:
Term: The facility has no repayment requirements other than
at expiry. The facility is due to expire on 1 July 2023.
Maximum Facility: $30 million.
Drawn Balance at 30 June 21: $10.9 million, and bank
guarantees and credit card borrowings $0.25 million.
Undrawn Balance at 30 June 21: $18.9 million.
Weighted Average Interest Rate: 2.49%.
92
Page 32 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
DEBT & CAPITAL
DEBT & CAPITAL
3.3
Issued Capital
Issued and Paid-Up Capital - Fully paid
ordinary shares
Notes
Number
$'000
Number
$'000
2021
2020
Balance at beginning of the financial year
388,057,257
158,697
378,825,085
156,483
Issue of shares
Issue of shares under performance rights
Closing balance at end of the financial year
(ii)
5.4
(i)
4,438,851
3,956,292
5,000
5,381
-
9,232,172
396,452,400
169,078
388,057,257
-
2,214
158,697
(i)
(ii)
Fully paid ordinary shares carry one vote per share and
carry the right to dividends.
During the current period, the Company issued 4.4
million shares to the owner of AusSpec International
Limited. Refer to note 5.2.
from the proceeds.
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of
tax,
Incremental costs directly
attributable to the issue of new shares or options for the
acquisition of a business are not included in the cost of the
acquisition as part of the purchase consideration.
Where any Group company purchases the Company’s
equity instruments, for example as the result of a share buy-
back or a share-based payment plan, the consideration
paid, including any directly attributable incremental costs
(net of income taxes) is deducted from equity attributable
to the owners of the Company as treasury shares until the
shares are cancelled or reissued.
Where such ordinary shares are subsequently reissued, any
consideration received, net of any directly attributable
incremental transaction costs and the related income tax
effects, is included in equity attributable to the owners of
the Company.
3.4
Financial Risk Management
Categories of financial instruments
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Lease liabilities
Borrowings
2021
$’000
58,477
61,951
120,428
37,885
38,873
11,128
87,886
2020
$’000
38,263
43,520
81,783
26,876
41,517
6,115
74,508
Financial risk management objectives
The Group is exposed to financial risks through the normal course of its business operations. The key financial risks impacting the
Group relate to its financial instruments as per those disclosed in the statement of financial position. Specifically, those key risks are
considered to be foreign currency risk and interest rate risk. The Group monitors its exposure to these risks on a regular basis and
may enter into derivative financial instruments to manage these risks where appropriate. There are no derivative financial
instruments in operation at the reporting date.
Page 33 of 68
93
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
DEBT & CAPITAL
DEBT & CAPITAL
3.4
Financial Risk Management (continued)
Foreign currency risk management
Exposure
The functional currency of the Company is Australian dollars.
Certain financial instruments of the Group are exposed to
movements in various currencies. The Group undertakes
certain transactions denominated in foreign currencies,
hence exposures to foreign exchange rate fluctuations arise.
Exchange rate exposures are managed with the use of
natural hedges where possible and with the use of financial
instruments where benefit outweighs cost within approved
policy parameters. During the current and prior year no
instruments were used to manage foreign
derivative
exchange risk.
The carrying amount in Australian dollars of the Group’s
monetary assets and liabilities denominated in currencies
other than Australian dollars at the reporting date are as per
the table below. Non-Australian dollar liabilities include trade
creditors and borrowings recorded in Australian as well as
non-Australian entities. Non-Australian dollar assets
include cash on hand and debtors recorded in Australian as
well as non-Australian entities. Any fluctuation in exchange
rates relative to the Australian dollar will cause the below
assets and liabilities to change in value.
Liabilities
Assets
2021
$'000
2020
$'000
2021
$'000
2020
$'000
17,265
1,936
857
1,500
1,763
13,277
3,290
827
1,609
2,330
34,809
4,713
3,384
10,335
7,751
21,557
3,394
1,906
5,094
10,975
United States Dollars
Euro
South African Rand
Canadian Dollars
Other
Sensitivity
The Group is mainly exposed to United States Dollars, Euro and Canadian Dollars. The following table details the Group’s
sensitivity to a 10% (2020: 10%) increase o r decrease in the Australian Dollar against the relevant foreign currencies.
10% increase
10% decrease
10% increase
10% decrease
United States Dollar Impact
2021
$'000
2020
$'000
Canadian Dollar Impact
2020
2021
$'000
$'000
884
(884)
348
(348)
1,754
(1,754)
828
(828)
Euro Impact
2021
$'000
277
(277)
2020
$'000
10
(10)
Profit / (loss) impacts are mainly attributable to exposure on outstanding receivables and payables at the reporting date
denominated in the applicable foreign currency.
94
Page 34 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
DEBT & CAPITAL
DEBT & CAPITAL
3.4
Financial Risk Management (continued)
Interest rate risk management
The Group’s cash flow is exposed to interest rate risk as entities in the Group borrow, lend and deposit funds at floating rates of
interest. The following table details the Group’s pre-tax loss sensitivity to a 1% increase and decrease in variable interest rates:
Increased interest rate
Decreased interest rate
Consolidated Impact
2021
$ '000
(500)
500
2020
$ '000
(476)
476
Credit risk management
The Group’s maximum exposure to credit risk is the carrying
amount of those assets as indicated in the statement of
financial position. Credit risk on financial instruments refers
to the potential financial loss to the Group that may result
from counterparties failing to meet their contractual
obligations. The Group manages its counterparty risk by
limiting its transactions to counterparties of sound credit
worthiness. The Group faced no significant credit exposures
at the balance date.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests
with the Board of Directors, who monitors short, medium and
long term liquidity requirements through the use of financial
models. The treasury function reports regularly to key
management personnel and the Board on matters affecting
liquidity risk. The Group manages liquidity risk by maintaining
adequate reserves, banking facilities and reserve borrowing
facilities by continuously monitoring forecast and actual cash
flows and matching the maturity profiles of financial assets
and liabilities. At 30 June 2021 the Company/Group has
undrawn facilities of $18.9 million.
Maturity of financial liabilities
The following tables detail the Company’s and the Group’s
remaining contractual maturity
its non–derivative
financial liabilities. The tables have been drawn up based on
the undiscounted cash flows of financial liabilities based on
the earliest date on which the Group may be required to pay.
The table includes both interest and principal cash flows.
for
Weighted
average
effective
interest rate
%
-
4.50%
2.49%
-
4.50%
2.11%
0-3
months
3 months to
1 year
1-5 years
5+ years
Total
$’000
$’000
$’000
$’000
$’000
37,885
1,416
-
39,301
26,876
1,475
-
28,351
-
4,248
-
4,248
-
4,426
-
4,426
-
15,798
11,128
26,926
-
15,861
6,115
21,976
-
30,078
-
30,078
-
31,194
-
31,194
37,885
51,540
11,128
100,553
26,876
52,956
6,115
85,947
2021
Trade and other payables
Lease liabilities
CBA credit facility
2020
Trade and other payables
Lease liabilities
Bankwest credit facility
Page 35 of 68
95
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
DEBT & CAPITAL
DEBT & CAPITAL
3.4
Financial Risk Management (continued)
Maturity of financial assets
The following tables detail the Company’s and the Group’s remaining contractual maturity for its financial assets. The tables have
been drawn up based on the undiscounted cash flows of financial assets including interest that will be earned on those assets
except where the Company/Group anticipates that the cash flow will occur in a different period.
Weighted average
effective interest rate
0-3 months
3 months
to 1 year
1-5 years
5+ years
Total
%
$’000
$’000
$’000
$’000
$’000
2021
Trade and other
receivables
Cash
2020
Trade and other
receivables
Cash
-
0.27%
-
0.75%
58,243
58,477
116,720
43,520
38,263
81,783
-
-
-
-
-
-
3,708
-
3,708
-
-
-
-
-
-
-
-
-
61,951
58,477
120,428
43,520
38,263
81,783
Non- derivative financial instruments
3.5
Commitments for Expenditure
Recognition and measurement
Capital expenditure commitments
At 30 June 2021 the Group had $8.8 million capital
commitments (2020: $0.5 million).
Financial instruments are initially measured at cost on trade
date, which includes transaction costs, when the related
contractual rights or obligations exist. Subsequent to initial
recognition these instruments are measured as set out below.
The classification depends on the nature and purpose of the
financial assets and is determined at the time of initial
recognition. All regular purchases or sales of financial assets
are recognised and derecognised on a trade date basis, where
the purchase or sale of an investment is under a contract
whose terms require delivery of the investment within the
timeframe established by the market concerned.
Fair value of financial Instruments
The Directors consider that the carrying amount of financial
assets and liabilities recorded in the financial statements
represents or approximate their respective fair values.
96
Page 36 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER ASSETS & LIABILITIES
OTHER ASSETS & LIABILITIES
4.1
Trade and Other Receivables
Current
Trade receivables
Less allowance
Other receivables
Notes
(i)
(ii)
2021
$’000
2020
$’000
60,538
(3,505)
57,033
1,210
58,243
43,007
(4,059)
38,948
4,572
43,520
(i) The average credit period on sales of goods is approximately 60 days. Trade receivables are interest free unless outside of terms at which point
interest may be charged.
(ii) Movement in the loss allowance
Balance at the beginning of the year
Amounts written off during the year
Increase in allowance recognised in profit or loss
Balance at the end of the year
4,059
(1,313)
759
3,505
2,711
(805)
2,153
4,059
The expected credit loss calculation for trade receivables considers both quantitative information from historic losses as well as
qualitative information on different debtor profiles. The concentration of credit risk is limited due to the customer base being large
and unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the loss allowance
above.
Ageing of past due but not impaired debtors
0 - 30 days past due
31 - 60 days past due
61 + days past due
6,794
2,480
4,968
2,965
2,842
3,330
9,137
The above analysis shows debtors that are past due at the end of the reporting date where no provision has been raised as the
Group believes that the amounts are still considered recoverable. The Group does not hold any collateral over these balances.
14,242
4.2
Inventories
Current
Raw materials
Work in progress
Finished goods
2021
$’000
1,624
1,034
38,843
41,501
2020
$’000
1,376
692
39,093
41,161
Inventories are valued at the lower of cost or net realisable value. Costs, including an appropriate portion of fixed and variable
overhead expenses, are assigned to inventory on hand by the method most appropriate to each particular class of inventory, with
the majority being valued on a first in first out basis. Net realisable value represents the estimated selling price less all estimated
costs of completion and costs necessary to make the sale.
An allowance for diminution of stock of $2.2 million existed at 30 June 2021 (2020: $0.9 million).
Page 37 of 68
97
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER ASSETS & LIABILITIES
OTHER ASSETS & LIABILITIES
4.3
Property, Plant and Equipment
Plant and
Equipment at
cost
$’000
Leasehold
Improvements
at cost
$’000
Capital Works in
Progress at cost
TOTAL
$’000
$’000
Notes
5.2
4.5
2.3
2021
Cost
Accumulated depreciation
Total carrying value
Movement
Carrying amount at the beginning of the year
Additions (i)
Acquisition of a subsidiary
Transfer to intangible assets
Depreciation expense
Foreign currency exchange differences
Carrying amount at the end of the year
2020
Cost
Accumulated depreciation
Total carrying value
Movement
Carrying amount at the beginning of the year
Additions (i)
Acquisition of a subsidiary
Disposals
Depreciation expense
Foreign currency exchange differences
Carrying amount at the end of the year
109,927
(68,131)
41,796
38,768
23,795
3
(1,482)
(19,450)
162
41,796
82,295
(43,527)
38,768
35,996
21,157
417
801
(18,185)
(1,418)
38,768
7,166
(5,689)
1,477
2,098
231
-
-
(831)
(21)
1,477
9,276
(7,178)
2,098
2,596
307
-
(10)
(795)
-
2,098
2,348
-
2,348
2,277
541
-
(503)
-
33
2,348
2,277
-
2,277
775
1,707
-
(148)
-
(57)
2,277
119,441
(73,820)
45,621
43,143
24,567
3
(1,985)
(20,281)
174
45,621
93,848
(50,705)
43,143
39,367
23,171
417
643
(18,980)
(1,475)
43,143
(i)
Includes external acquisitions and transfers from inventory.
Property, plant and equipment
Plant and equipment and leasehold improvements are stated at
cost less accumulated depreciation and impairment. Cost
includes expenditure that
is directly attributable to the
acquisition of the item. In the event that settlement of all or part
of the purchase consideration is deferred, cost is determined by
discounting the amounts payable in the future to their present
value as at the date of acquisition.
The gain or loss arising on disposal or retirement of an item of
property, plant and equipment is determined as the difference
between the sales proceeds and the carrying amount of the
asset and is recognised in profit or loss.
Capital works in progress
Capital works in progress in the course of construction for
production or supply purposes, or for purposes not yet
determined, are carried at cost, less any recognised impairment
loss. Cost includes professional fees and, for qualifying assets,
borrowing costs capitalised in accordance with the Group’s
accounting policy.
Depreciation
Depreciation is calculated on a straight line basis in order to
write off the net cost of each asset over its expected useful life
to its estimated residual value. Leasehold improvements are
depreciated over the estimated useful life, using the straight line
method. The estimated useful
lives, residual values and
depreciation method are reviewed at the end of each annual
reporting period, with the effect of any changes recognised on a
prospective basis. The annual depreciation rate for plant and
equipment is 33% and the annual depreciation range for
leasehold improvement is 10 – 33%. Depreciation of capital
works in progress, on the same basis as other property, plant and
equipment assets, commences when the assets are ready for
their intended use.
98
Page 38 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER ASSETS & LIABILITIES
OTHER ASSETS & LIABILITIES
4.4
Leases
Right of use assets
2021
Cost
Accumulated depreciation
Total carrying value
Movement
Carrying amount at the beginning of the year
Additions
Disposals
Lease remeasurements
Depreciation
Other
Foreign currency exchange differences
Carrying amount at the end of the year
2020
Cost
Accumulated depreciation
Total carrying value
Movement
Carrying amount at the beginning of the year
Additions
Acquisition of a subsidiary
Lease remeasurements
Depreciation
Foreign currency exchange differences
Carrying amount at the end of the year
Lease liabilities
Opening
Additions
Acquisition of a subsidiary
Disposal of lease liability
Lease remeasurements
Repayments
Accretion of interest
Net foreign exchange differences
Carrying amount at 30 June
Current
Non-current
Carrying amount at 30 June
Land and
Buildings
$’000
Motor
Vehicles
$’000
Other
TOTAL
$’000
$’000
37,578
(7,582)
29,996
33,686
1,128
(29)
(279)
(4,440)
169
(239)
29,996
37,542
(3,856)
33,686
25,156
13,701
72
57
(4,682)
(618)
33,686
3,128
(1,299)
1,829
1,303
1,202
(73)
497
(1,129)
-
29
1,829
1,986
(683)
1,303
1,292
1,024
-
(69)
(910)
(34)
1,303
1,925
(790)
1,135
1,500
78
(5)
-
(439)
-
1
1,135
1,840
(340)
1,500
1,249
492
-
78
(351)
32
1,500
42,631
(9,671)
32,960
36,489
2,408
(107)
218
(6,008)
169
(209)
32,960
41,368
(4,879)
36,489
27,697
15,217
72
66
(5,943)
(620)
36,489
2021
$’000
41,517
2,408
-
(11)
218
(6,890)
1,867
(236)
38,873
2021
$’000
4,064
34,809
38,873
2020
$’000
31,824
15,217
74
-
66
(6,392)
1,625
(897)
41,517
2020
$’000
6,385
35,132
41,517
Page 39 of 68
99
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER ASSETS & LIABILITIES
OTHER ASSETS & LIABILITIES
4.4
Leases (Continued)
The table below presents the contractual undiscounted cash flows associated with the Group’s lease liabilities, representing
principal and interest. The figures will not necessarily reconcile with the amounts disclosed in the consolidated statement of
financial position.
Due for payment in:
1 year or less
1-2 years
2-3 years
3-4 years
4-5 years
More than 5 years
recognises a Right-of-Use asset at
The Group
the
commencement date of the lease, initially measured at the
present value of the future lease payments, with the right-of-
use asset adjusted by the amount of any lease payments pre-
commencement date plus any make good obligations. The
Group accounts for the remeasurement of lease liabilities by
making corresponding adjustments to the relevant right-of-
use asset.
The Right-of-Use asset is depreciated over the shorter of the
asset’s useful life and the term of the lease, on a straight-line
basis.
Lease Liabilities
At the commencement date of a lease, the Group recognises
and measures the lease liability at the present value of lease
payments that are unpaid at that date.
The lease payments include:
•
•
•
•
Fixed payments, offset by any lease incentives
receivable;
Variable lease payments linked to an index or rate;
Exercise price of a purchase option (where the
Group is reasonably certain to exercise that
option); and
Payment of penalties for terminating the lease
(where the life of the lease has assumed
termination).
For short-term leases (lease term of 12 months or less) and
leases of low-value assets (which includes tablets and
personal computers, small items of office furniture and
telephones), the Group has opted to recognise a lease
expense on a straight-line basis as permitted by AASB 16. This
expense is presented within ‘other expenses’ in profit or loss
(30 June 2021: $0.7 million, June 2020: $0.2 million).
2021
$’000
5,664
4,594
4,035
3,797
3,372
30,078
51,540
2020
$’000
5,901
4,952
4,090
3,647
3,172
31,194
52,956
Key Estimates and Judgements
(a) Control
Judgement is required to assess whether a contract is or
contains a lease at inception by assessing whether the Group
has the right to direct the use of the identified asset and
obtain substantially all the economic benefits of the use of
that asset.
(b) Lease term
Judgement is required when assessing the term of the lease
and whether to include optional extension and termination
periods. Option periods are only included in determining the
lease term at inception when they are reasonably certain to
be exercised. Lease terms are reassessed when a significant
change in circumstances occurs.
The Group included the renewal period as part of the lease
term for the lease of the corporate head office and the lease
of the Western Australian manufacturing and distribution
facility, as both properties were purpose built for the Group
and the extensions of these leases is reasonably certain.
Renewal options for motor vehicles are not included as part
of the lease term because the Group typically leases vehicles
for not more than five years and is not likely to exercise any
renewal options.
(c) Discount rates
Judgement is required to determine the discount rate, where
the discount rate is the Group’s incremental borrowing rate if
the rate implicit in the lease cannot be readily determined.
The incremental borrowing rate is determined with reference
to the Group’s borrowing portfolio at the inception of the
arrangement or the time of the modification.
100
Page 40 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER ASSETS & LIABILITIES
OTHER ASSETS & LIABILITIES
4.5
Intangible Assets
Notes
5.2
4.3
2.3
At cost
Accumulated amortisation
Accumulated impairment losses
Net carrying amount as at 30 June 2021
Movement
As at 30 June 2020
Additions
Acquisition of assets/subsidiary
Transfer from property, plant and
equipment
Disposals due to SaaS adjustment (i)
Amortisation expense
Foreign currency exchange differences
As at 30 June 2021
At cost
Accumulated amortisation
Accumulated impairment losses
Net book value as at 30 June 2020
Movement
As at 30 June 2019
Additions
Acquisition of assets/subsidiary
Amortisation expense
Foreign currency exchange differences
As at 30 June 2020
Goodwill
$’000
86,399
-
(24,295)
62,104
57,784
-
4,271
-
-
-
49
62,104
82,079
-
(24,295)
57,784
59,177
-
-
-
(1,393)
57,784
Patents and
licences with
definite
useful life
$’000
33,244
(5,802)
-
27,442
25,798
-
5,500
-
-
(3,847)
(9)
27,442
27,755
(1,957)
-
25,798
354
-
27,059
(1,565)
(50)
25,798
Software (ii)
TOTAL
$’000
5,203
(1,806)
-
3,397
-
2,572
-
1,985
(513)
(647)
-
3,397
$’000
124,846
(7,608)
(24,295)
92,943
83,582
2,572
9,771
1,985
(513)
(4,494)
40
92,943
-
-
-
-
-
-
-
-
-
109,834
(1,957)
(24,295)
83,582
59,531
-
27,059
(1,565)
(1,443)
83,582
(i)
(ii)
Effect of change in accounting policy for IFRS Interpretations in relation to accounting for cloud-based Software-as-a-Service (SaaS)
arrangements. Refer to note 1.3 for further details.
Of which, $1.2 million of software is under development and not available for use at 30 June 2021.
Goodwill is allocated to operating segments as follows:
Africa / Europe
Asia Pacific
Americas
2021
$’000
8,182
33,658
20,264
62,104
2020
$’000
7,100
32,334
18,350
57,784
Page 41 of 68
101
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER ASSETS & LIABILITIES
OTHER ASSETS & LIABILITIES
4.5
Intangible Assets (continued)
Goodwill
Goodwill arising in a business combination is recognised as an
asset at the date that control is acquired. Where the fair value
of the consideration paid for a business acquisition exceeds
the fair value of the identifiable assets acquired and liabilities
assumed, the difference is treated as goodwill.
Goodwill is not amortised but is tested for impairment at least
annually.
Identifiable intangibles
Patents and licences with finite useful lives were acquired in
the Flexidrill acquisition (completed January 2020) and
AusSpec Acquisition (see note 5.2). These intangible assets
are amortised on a straight-line basis over the estimated
useful life (up to 10 years).
Impairment Testing of Assets
IMDEX assesses impairment at the Operating Segment level
for Goodwill. Goodwill exists in relation to three Segments:
•
•
•
Asia Pacific
Africa / Europe
Americas
IMDEX assesses impairment at the Cash Generating Unit
(CGU) level for fixed assets and other intangible assets. A CGU
being the smallest identifiable group of assets that generates
cash inflows that are largely independent of the cash inflows
from other assets or groups of assets. CGUs identified are at
a lower
level than each Operating Segment (based on
regional hubs).
The Group has five CGUs:
Asia Pacific
Europe
Africa
•
•
•
• North America
South America
•
The Group reviews the carrying amounts of its CGU’s at each
reporting period, to determine whether there
is any
indication that those assets have suffered an impairment loss.
If any such indication exists, a formal estimate of the asset’s
recoverable amount is calculated.
Recoverable amount is the higher of Fair Value Less Costs to
Sell and Value in Use. In assessing Value in Use, the estimated
future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific
to the asset for which the estimates of future cash flows have
not been adjusted.
If the carrying amount of the CGU exceeds its recoverable
amount, the asset or CGU is written down and an impairment
loss is recognised in the income statement. Where an
impairment loss subsequently reverses, the carrying amount
of the asset is increased to the revised estimate of its
recoverable amount, but only to the extent that the increased
102
carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been
recognised for the asset in prior years.
Significant accounting estimates and assumptions
The determination of
involves the use of
impairment
judgements and estimates that include, but are not limited
to, the cause, timing and measurement of the impairment.
Goodwill is tested at least annually and where there is an
indicator of impairment through testing of the Operating
Segments (groups of CGU’s) to which the goodwill has been
allocated.
Fixed assets and other intangible assets are grouped into
CGUs that have been identified as being the smallest
identifiable group of assets that generate cash flows, which
are independent of cash flows of other assets or groups of
assets. The determination of these CGUs is based on
management’s judgement in regard to shared infrastructure,
geographical proximity, and similar exposures to market risk
and materiality.
Determining whether goodwill, intangibles and fixed assets
are impaired requires an estimation of the “Value in Use” of
the Operating Segment or CGU to which these assets are
attributable. The Value in Use calculation requires the entity
to estimate the future cash flows expected to arise from the
Operating Segment or CGU and a suitable discount rate in
order to calculate present value. A
forward-looking
estimation of this nature is inherently uncertain.
Management is required to make significant judgements
concerning the identification of impairment indicators, such
as changes in competitive positions, expectations of growth,
increased cost of capital, and other factors that may indicate
impairment. In addition, management is also required to
make significant estimates regarding future cash flows and
the determination of fair values when assessing the
recoverable amount of assets (or group of assets). Inputs into
these valuations require assumptions and estimates to be
made about forecast earnings before interest and tax and
related future cash flows, growth rates, applicable discount
rates, useful live and residual values.
IMDEX’s forecasted results reflect the activity levels within
the minerals industry. The judgements, estimates and
assumptions used in assessing impairment are management’s
best estimates based on current and forecast market
conditions. Changes in economic and operating conditions
impacting these assumptions could result in changes in the
recognition of impairment charges in future periods.
Page 42 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER ASSETS & LIABILITIES
OTHER ASSETS & LIABILITIES
4.5
Intangible Assets (continued)
Management has considered a range of external, internal and
other indicators that may indicate some level of impairment
at the individual asset level. These include evidence of
obsolescence or physical damage of an asset, and evidence
available from internal reporting that indicates that the
economic performance of an asset is, or will be, worse than
expected.
The Group continues to monitor the impact of the COVID-19
pandemic. The below plan performance experienced in the
South America (SAM) CGU in the prior period, impacted by
COVID-19 disruptions, has continued to recover throughout
the period, with a return to plan performance and expected
return to pre-COVID levels in 2022. Whilst a level of
uncertainty continues to remain around the economic impact
and duration that COVID-19 related issues will have on the
markets in which the Group operates, COVID-19 was not
considered an indicator of impairment for the Group’s asset
values at 30 June 2021.
At 30 June 2021, the Group held intangible assets of $22.9
million relating to intellectual property acquired in the
acquisitions of Flexidrill (completed January 2020). The Group
continues to progress the development of the associated
Maghammer and Corevibe technologies. Management
assesses the recoverability of the associated intangible assets
at each reporting date as these technologies progress
towards commercialisation.
These assessments did not
impairment for any of the CGUs.
identify any
indicators of
Value in Use assessments and sensitivities:
Inputs to impairment calculations
For Value in Use calculations, cash flow projections are based
on IMDEX’s corporate plans and business forecasts prepared
by management and approved by the Board for the 2022
financial year.
The key assumptions impacting the discounted cashflow
models used to determine the Value in Use for each CGU
were as follows:
• Revenue growth has been based on a range of growth
rates. Initial rates are based on the forecasted numbers
approved by the Board of Directors for FY22 and are in
the range of 8%-15%;
• Subsequent growth rates are between 2% - 5% for 5
years up to the terminal (5 years) period;
• Cash flows beyond the five-year period are extrapolated
using an estimated growth rate of 2.5%, which is based
on Group estimates, taking into consideration historical
performance as well as expected long-term operating
conditions to arrive at a terminal value. Growth rates do
not exceed the consensus forecasts of the long-term
average growth rate for the industry in which the CGU
operates.
• Capital investment for the 2022 financial year is based
on the forecasted numbers approved by the Board of
Directors. Going forward to terminal date, capital
investment gradually increases each year so that it
equals the replacement cost of assets, excluding growth
capital investment by terminal date;
• Tax rates used were those applicable to the countries in
the region; and
• Post-tax discount rates used were country risk adjusted
and based on data supplied by external sources and
ranged from 8.5%-11.5%.
Other assumptions are determined with reference to internal
and external sources of information.
in discount rates or changes
Increases
in other key
assumptions, such as operating conditions or financial
performance, may cause the recoverable amounts to fall
below carrying values. Management have considered various
reasonably possible sensitivities
in Use
assessment, with changes to the following key assumptions:
in the Value
•
•
•
Increase/decrease of 1% to the terminal growth rate.
Increase/decrease of 1-2% to the discount rate.
Increase/decrease of 5% in operating margins.
The above sensitivities have been performed in isolation, with
all other assumptions in the Value in Use assessment held
constant. No reasonably possible change made to these key
assumptions has given rise to an impairment. However,
forward looking estimation of this nature is inherently
uncertain and the outcomes of these sensitivities may vary in
the future.
Impairment losses recognised by cash generating unit:
There have been no impairment losses for any CGU in the
current or prior year.
Page 43 of 68
103
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER ASSETS & LIABILITIES
OTHER ASSETS & LIABILITIES
4.6
Trade & Other Payables
Trade payables
Accruals and other payables
Notes
(i)
(ii)
2021
$’000
19,173
18,712
37,885
2020
$’000
15,882
10,994
26,876
(i)
(ii)
Trade payables are interest free for periods ranging from 30 to 180 days. Thereafter interest may be charged at commercial rates. The
consolidated entity has financial risk management policies in place to endeavour pay all payables within the credit timeframe.
Accruals and other payables include a $6.0 million accrual for the FY21 STI bonuses.
4.7
Provisions
Current provisions
Employee entitlements
Others
Non-current provisions
Employee entitlements
Provisions are recognised when the Group has a present
obligation (legal or constructive), as a result of a past event,
it is probable that the Group will be required to settle the
obligation, and a reliable estimate can be made of the
amount of the obligation.
Significant accounting estimates and assumptions
The amount recognised as a provision is the best estimate
of the consideration required to settle the present
obligation at reporting date, taking into account the risks
and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to
settle the present obligation, its carrying amount is the
present value of those cash flows.
When some or all of the economic benefits required to settle
a provision are expected to be recovered from a third party,
the receivable is recognised as an asset if it is virtually certain
that recovery will be received and the amount of the
receivable can be measured reliably.
2021
$’000
4,943
750
5,693
2020
$’000
4,621
-
4,621
233
253
Employee entitlements
Provision is made for benefits accruing to employees in
respect of wages and salaries, annual leave, long service
leave, and sick leave when it is probable that settlement will
be required and they are capable of being measured reliably.
Provisions made in respect of employee benefits expected to
be settled within short term, are measured at their nominal
values using the remuneration rate expected to apply at the
time of settlement.
Provisions made in respect of employee benefits which are
not expected to be settled within short term are measured as
the present value of the estimated future cash outflows to be
made by the Group in respect of services provided by
employees up to reporting date.
Expected future payments are discounted using market yields
at the reporting date on high quality corporate bonds with
terms to maturity and currencies that match, as closely as
possible, the estimated future cash outflows.
Termination benefit
A liability for a termination benefit is recognised at the earlier
of when the entity can no longer withdraw the offer of the
termination benefit and when the entity recognises any
related restructuring costs.
104
Page 44 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER ASSETS & LIABILITIES
OTHER ASSETS & LIABILITIES
4.8
Deferred Consideration
Gross Carrying Amount
Balance at beginning of the financial year
Acquisition of assets/subsidiaries
Interest accretion
Fair value (gain)/loss on deferred consideration
Effect of foreign exchange movements
Balance at end of the financial year
Current deferred consideration
Non-current deferred consideration
Significant accounting estimates and assumptions
Fair Value of Deferred Consideration - Flexidrill acquisition
A deferred consideration liability of $12.2 million was
recognised
in respect of the acquisition of Flexidrill
(completed in January 2020). The fair value of the deferred
consideration includes the estimated fair value of revenue-
based instalments associated with the Flexidrill technologies
(Corevibe and Maghammer), determined after estimating the
fair value of the dividend and share price appreciation
components of the deferred consideration.
The fair value of the deferred consideration has been
estimated using a Discounted Cash Flow model. The valuation
requires management to make certain assumptions about the
model inputs, including forecast cash flows, the discount rate,
future dividends, future share prices of IMDEX, future
AUD/NZD exchange rates and volatility. The probabilities of
the various estimates within the range can be reasonably
assessed and are used in management’s estimate of fair value
of the deferred consideration.
Estimates around future share prices of IMDEX were
determined using an Option Pricing Model that included
inputs for the IMDEX share price, volatility in IMDEX’s share
price and the risk-free interest rate at reporting date.
Note
2021
$’000
2020
$’000
5.2
2.3
2.5
14,726
2,100
791
(2,917)
(33)
14,667
5,741
8,926
-
14,825
413
-
(512)
14,726
107
14,619
Current deferred consideration includes an amount of $1.0
million in relation to the acquisition of AusSpec. This was paid
on 1 July 2021, following achievement of certain new
revenue-generating contracts. The balance of the current
deferred consideration
the
acquisition of Flexidrill, including the issue of NZ$2.5 million
of IMDEX Limited ordinary sharers and the payment of NZ$2.5
million cash upon the successful commercialisation of
Maghammer.
($4.7 million) relates
to
Non-current deferred consideration includes the non-current
portion of the consideration for AusSpec ($1.5 million), which
includes the payment of $1.0 million cash and the issue of
$0.5 million of IMDEX Limited ordinary shares in July 2022 on
the achievement of certain new
revenue-generating
contracts. The balance of non-current deferred consideration
relates to the acquisition of Flexidrill ($7.5 million),
representing the fair value of the revenue-based instalments.
The estimated fair value of the deferred consideration at 30
June 2021 resulted in recognition of a fair value gain of $2.9
million in the profit and loss for the period.
Page 45 of 68
105
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.1
Taxation
Income tax expense recognised in the income statement
Tax expense comprises:
Current tax expense
Deferred tax expense/(benefit) relating to the origination and reversal of
temporary differences
Losses brought to account from prior year
Under/(over) provision in prior year income tax
Total tax expense
Income tax expense recognised in equity
Deferred tax expense/(benefit) relating to the origination and reversal of
temporary differences
Prima facie income tax expense on pre-tax accounting profit from continuing
operations reconciles to income tax expense in the financial statements as follows:
Profit before tax from continuing operations
Income tax expense calculated at 30% (i)
Tax losses not recognised or impaired
Other deferred tax assets brought to account
Non-assessable gain on VES sale
Other non-deductible and non-assessable items
Tax rate differential arising from foreign entities
Losses brought to account from prior year
Under/(over) provision in prior year income tax
At the effective income tax rate of 29% (2020: 25%)
2021
$’000
2020
$’000
12,966
15,111
74
(842)
666
12,864
(6,053)
(1,406)
(268)
7,384
(410)
-
44,531
13,359
302
(237)
-
1,085
(1,706)
(605)
666
12,864
29,142
8,743
992
-
(1,909)
1,418
(624)
(968)
(268)
7,384
(i)
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits
under Australian law. There has been no change in the corporate tax rate when compared with the previous reporting year.
Recognised Current and Deferred Tax Balances
Current tax assets and liabilities
Current tax receivable
Current tax payable
Deferred tax balances
Deferred tax assets comprise balances that relate to:
Provisions
Inventory
Property, plant and equipment
Leases
Carry forward tax losses
Unrealised FX
Other
Net deferred tax balances
106
2021
$’000
2020
$’000
2,330
(4,582)
3,155
(2,382)
4,025
2,657
9,250
1,581
5,574
(691)
2,748
25,144
2,385
1,645
10,485
1,474
7,613
(814)
2,020
24,808
Page 46 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.1
Taxation (continued)
Unrecognised Deferred Tax Assets
Temporary differences relating to the translation of investments in
subsidiary undertakings
Deferred Tax Assets in respect of unrecognised tax losses
Deferred Tax Assets in respect of unrecognised provisions
Current tax
The tax currently payable is based on taxable profit for the
period. Taxable profit differs from profit as reported in the
income statement because of items of income or expense
that are taxable or deductible in other periods and items that
are never taxable or deductible. The Company and the
Group’s liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the end
of the reporting period.
Deferred tax
Deferred tax
is recognised on temporary differences
between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is
probable that taxable profits will be available against which
those deductible temporary differences can be utilised. Such
deferred tax assets and liabilities are not recognised if the
temporary difference arises from goodwill or from the initial
recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences associated with investments in subsidiaries,
except where the Company and the Group is able to control
the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the
foreseeable
from
deductible temporary differences associated with such
investments and interests are only recognised to the extent
that it is probable that there will be sufficient taxable
profits against which to utilise the benefits of the
temporary differences and they are expected to reverse in
the foreseeable future.
future. Deferred tax assets arising
The carrying amount of deferred tax assets is reviewed at the
end of each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
2021
$’000
2,859
1,378
286
2020
$’000
3,901
1,771
214
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates (and
tax laws) that have been enacted or substantively enacted by
the end of the reporting period. The measurement of
tax
deferred
consequences that would follow from the manner in which
the Company and the Group expects, at the end of the
reporting period, to recover or settle the carrying amount of
its assets and liabilities.
liabilities and assets
reflects
the
tax
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes
levied by the same taxation authority and the Company and
the Group intends to settle its current tax assets and liabilities
on a net basis.
Current and deferred tax for the period
Current and deferred tax are recognised as an expense or
income in profit or loss, except when they relate to items that
are recognised outside profit or loss (whether in other
comprehensive income or directly in equity), in which case
the tax is also recognised outside profit or loss, or where they
arise from the initial accounting for a business combination.
In the case of a business combination, the tax effect is
included in the accounting for the business combination.
Relevance of tax consolidation to the Group
The Company and its wholly-owned Australian resident
entities are an income tax consolidated group and are taxed
as a single entity. IMDEX Limited is the head company of the
Australian tax consolidated group.
Tax expense/income, deferred tax liabilities and deferred tax
assets arising from temporary differences in the members of
the tax-consolidated group are recognised in the separate
financial statements of the members of the tax-consolidated
group using the ‘separate taxpayer within Group’ approach
by reference to the carrying amounts in the separate financial
statements of each entity and the tax values applying under
tax consolidation.
Page 47 of 68
107
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.1
Taxation (continued)
Significant accounting estimates and assumptions
Relevance of tax consolidation to the Group (continued)
Current tax liabilities and assets and deferred tax assets
arising from unused tax losses and relevant tax credits of the
members of the tax-consolidated group are recognised by the
Company (as head entity in the tax-consolidated group).
Due to the existence of a tax funding arrangement between
the entities in the tax-consolidated Group, amounts are
recognised as payable to or receivable by the Company and
each member of the Group in relation to tax amounts paid or
payable between the parent entity and the other members of
the tax consolidated Group
in accordance with the
arrangement.
A net deferred tax asset of $25.1 million has been recognised
on the face of the Consolidated Statement of Financial
Position. The largest components of this asset are the future
tax benefits available to the Group in respect of unused tax
losses and timing differences between the recording of
expenses for accounting purposes and the claiming of a
deduction for the expense for taxation purposes. These tax
benefits will be realised over the coming years when future
taxable profits are available against which the unused tax
losses can be utilised and as timing differences move. This
net asset has been raised as it is considered more likely than
not that it will be realised due to trading and/or sale of
assets. In making this assessment of likelihood, a forward-
looking estimation of tax payments and the likelihood of
business success needs to be made. A forward-looking
estimation of this nature is inherently uncertain.
As part of the process for preparing the Group’s financial
statements, management is required to calculate income tax
accruals. This process involves estimating the current tax
exposures together with assessing temporary differences
resulting from differing treatment of items for tax and
accounting purposes. These differences result in deferred tax
assets and liabilities, which are included in the Consolidated
Statement of Financial Position.
While the Group aims to ensure the accruals for its tax
liabilities are accurate, the process of agreeing tax liabilities
with the relevant tax authorities can take time. Management
estimate is therefore required in determining the provision
for income tax and the recognition of deferred tax assets and
liabilities and therefore the actual tax liabilities could differ
from the amounts accrued.
108
Page 48 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.2
Acquisition of Subsidiaries
On 22 July 2020, the Group acquired 100 per cent of the issued share capital of AusSpec International Limited (“AusSpec”),
incorporated in New Zealand and operating out of premises located in New Zealand. AusSpec is a leading provider of spectral
mineralogy through its unique aiSIRIS platform – Artificial Intelligence (AI) Spectral InfraRed Interpretation System. The AusSpec
acquisition enhances IMDEX’s rock knowledge offering with spectral mineralogy and AI technologies.
The agreed acquisition price was $8.5 million. The Group paid $1.0 million in cash and issued IMDEX Limited ordinary shares to the
value of $5.0 million on the settlement date. The balance of the agreed acquisition price will be settled through:
•
•
The payment of $1.0 million cash in July 2021 on the achievement of certain new revenue-generating contracts;
The payment of $1.0 million cash and the issue of $0.5 million of IMDEX Limited ordinary shares in July 2022 on the
achievement of certain new revenue-generating contracts.
Assets acquired and liabilities assumed at the date of acquisition:
Cash
Receivables (i)
Property, plant & equipment
Intangibles
Payables
Deferred tax liability
Net assets acquired
$’000
11
130
3
5,500
(150)
(1,650)
3,844
(i)
The fair value of the receivables of $0.1 million equals the gross contractual value of $0.1 million.
Satisfied by:
Cash
Equity instruments (4,438,851 ordinary shares of IMDEX Limited)
Contingent and deferred consideration arrangements
Fair value of consideration paid/payable
Goodwill arising on acquisition:
Estimated purchase consideration
Less: fair value of identifiable net assets acquired
Goodwill arising on acquisition
1,015
5,000
2,100
8,115
8,115
(3,844)
4,271
Goodwill of $4.3 million arose on the acquisition of AusSpec (including goodwill of $1.6 million associated with recognition of
deferred tax liabilities in relation to identified intangible assets). The goodwill recognised reflects the growth potential and
synergies arising from the acquisition.
Net cash outflow arising on acquisition:
Cash consideration
Less: cash and cash equivalent balances acquired
Net cash outflow
1,015
(11)
1,004
As at 30 June 2021, the balance of deferred consideration liability in relation to the acquisition of AusSpec is $2.5 million.
Subsequent to year end, on 1 July 2021, a payment of $1.0 million was made. The remaining deferred consideration will be
satisfied through the payment of $1.0 million cash and the issue of $0.5 million of IMDEX Limited ordinary shares in July 2022 on
the achievement of certain new revenue-generating contracts.
Included in the Group result for the year is a loss after tax of $0.1 million in relation to AusSpec. Revenue for the year includes $0.8
million in respect of AusSpec. Had the acquisition occurred on 1 July 2020, the Group’s financial performance for the period would
not be significantly different.
Page 49 of 68
109
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.2
Acquisition of Subsidiaries (continued)
On 6 January 2020, the Group acquired 100 per cent of the issued share capital of Flex drill Constructions Limited and Flexidrill
Limited (together “Flexidrill”), obtaining control of Flexidrill. Flexidrill are public unlisted companies involved in the Research and
Development of Patent-Protected Drilling Technologies COREVIBETM and MAGHAMMERTM. The Group acquired Flexidrill for the
purpose of commercialising those technologies.
The agreed acquisition price is NZ$40 million. The Group has paid $7.1 million in cash and issued IMDEX Limited ordinary shares to
the value $5.2 million up to and including the settlement date. The balance of the agreed acquisition price will be settled through:
•
•
•
•
The issue of NZ$2.5 million of IMDEX Limited ordinary shares and the payment of NZ$2.5 million cash upon the successful
commercialisation of MAGHAMMERTM;
The payment of quarterly instalments equivalent to 10% of revenues generated from the COREVIBETM and
MAGHAMMERTM technologies;
The payment of dividends on the IMDEX Limited ordinary shares issued over a 4-year period from the date of their issue;
and
The share price appreciation on those IMDEX Limited ordinary shares over a 4-year period from the date of their issue.
The Group chose to early adopt “AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business” in the
prior year which resulted in this transaction being considered an asset acquisition, not a business combination under “AASB 3
Business Combinations”.
The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are set out in the table below.
Cash
Receivables (i)
Inventory
Other assets
Property, plant and equipment
Intangibles
Payables
Loans
Provisions
Net assets acquired
Satisfied by:
Cash
Equity instruments (4,737,656 ordinary shares of IMDEX Limited)
Contingent and deferred consideration arrangements
Fair value of consideration paid/payable
Net cash outflow arising on acquisition:
Cash consideration
Less: cash and cash equivalent balances acquired
Net cash outflow
$’000
344
716
1,778
51
483
27,059
(1,082)
(2,126)
(66)
27,157
7,141
5,191
14,825
27,157
7,141
(344)
6,797
(i)
The fair value of the receivables of $0.7 million equals the gross contractual value of $0.7 million.
A deferred consideration liability of $14.8 million was recognised in respect of elements of the acquisition price that was settled
post 6 January 2020. We expect that the majority of this cash flow will be incurred over a six-year period and that all will be
incurred by the end of FY26. The potential undiscounted amount of all future payments that the Group could be required to make
in respect of the deferred consideration liability is estimated to be between $15.2 million and $20.2 million.
The fair value of the 4,737,656 ordinary shares issued as part of the consideration paid for Flexidrill ($5.2 million) was determined
with reference to the volume weighted average price of IMDEX Limited securities over the 10 trading days preceding their issue.
Flexidrill operated as a Research and Development enterprise, focusing on the development of the Patent-Protected Drilling
Technologies COREVIBETM and MAGHAMMERTM with all Research and Development activities conducted during the financial year
funded by IMDEX. If the acquisition of Flexidrill had been completed on the first day of the financial year 2020, Group revenue for
the year would have been unchanged at $237.7 million and Group profit would have been unchanged at $21.8 million.
110
Page 50 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.3
Parent Entity & Subsidiary Information
The ultimate parent entity in the Group is IMDEX Limited, a company incorporated in Western Australia.
The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are
the same as those applied in the consolidated financial statements.
Financial Position
Assets
Current Assets
Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued Capital
Employee Equity-Settled Benefits Reserve
Foreign Currency Translation Reserve
Accumulated Losses
Total Equity
Financial Performance
Profit for the year
Other comprehensive income, net of income tax
Total comprehensive profit/(loss)
Retained loss at the beginning of the financial year
Effect of change in accounting for cloud-based SaaS arrangements
Profit for the year
Effect of initial adoption of AASB16
Dividend paid
Retained loss at the end of the financial year
30 June 2021
$’000
30 June 2020
$’000
47,151
104,079
151,230
10,532
30,608
41,140
110,090
169,078
7,436
(1,695)
(64,729)
110,090
32,038
87,978
120,016
7,102
43,771
50,873
69,143
158,697
9,805
(1,695)
(97,664)
69,143
Year Ended
30 June 2021
$’000
Year Ended
30 June 2020
$’000
26,708
-
26,708
(97,664)
(513)
26,708
-
6,740
(64,729)
9,313
-
9,313
(87,231)
-
9,313
(2,671)
(17,075)
(97,664)
The profit for the year and associated increase in total assets is primarily due to the receipt of intercompany dividends which have
no impact on the consolidated Group as a whole.
Page 51 of 68
111
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.3
Parent Entity & Subsidiary Information (continued)
Guarantee provided under the deed of cross guarantee
Commitments for the acquisition of property, plant and equipment by
the parent entity
Within one year
30 June 2021
$’000
30 June 2020
$’000
103,377
93,523
334
334
14
14
Subsidiaries
Parent Entity
Imdex Limited
Notes
Country of
Incorporation
Ownership Interest
2020
2021
%
%
(i),(ii),(iii)
Australia
(ii),(iii)
(ii),(iii)
(ii),(iii)
Controlled Entities
Australian Mud Company Pty Ltd
Samchem Drilling Fluids & Chemicals (Pty) Ltd
Imdex International Pty Ltd
Reflex Instruments Asia Pacific Pty Ltd
Reflex Instrument North America Ltd
Reflex Instrument South America Ltda
Reflex Instruments Europe Ltd
AMC Europe GmbH
Flexit Australia Pty Ltd
Imdex South America S.A.
AMC Chile S.A.
AMC Reflex Argentina S.A.
AMC Reflex Peru S.A.C.
AMC Drilling Fluids Pvt Limited
Imdex Nominees Pty Ltd
Imdex USA Inc
Imdex Technologies USA LLC
AMC USA LLC
Reflex USA LLC
AMC Oilfield Services Pte Ltd
Imdex DO Brasil Industria e Comercio Ltda
Imdex Global B.V.
AMC Oil & Gas International Limited BVI
AMC Drilling Fluids & Products – Mexico S. de RL de C.V. Mexico
AMCREFLEX CIA LTDA
Flexidrill Limited
Flexidrill Construction Limited
AusSpec International Limited
(ii)
(ii)
(iv)
(v)
(vi)
Australia
South Africa
Australia
Australia
Canada
Chile
United Kingdom
Germany
Australia
Chile
Chile
Argentina
Peru
India
Australia
United States of America
United States of America
United States of America
United States of America
Singapore
Brazil
Netherlands
British Virgin Islands
Mexico
Ecuador
New Zealand
New Zealand
New Zealand
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
112
Page 52 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.3
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Parent Entity & Subsidiary Information (continued)
IMDEX Limited is the ultimate parent company and is the head entity within the tax consolidated group.
These companies are part of the Australian tax consolidated group.
These wholly-owned subsidiaries entered into a deed of cross guarantee with Imdex Limited pursuant to ASIC Class Order 98/1418 and
are relieved from the requirement to prepare and lodge an audited financial report. Australian Mud Company Pty Ltd became a party to
the deed on 29 Jun 2006, Imdex International Pty Ltd on 20 Oct 2006, Reflex Instruments Asia Pacific Pty Ltd on 14 Sep 2007, and Reflex
Technology International Pty Ltd on 28 Apr 2011 (de-registered 19 Sep 2019).
This entity was liquidated on 2 June 2021.
This entity was liquidated on 7 May 2021.
This entity was acquired on 22 July 2020.
The consolidated income statement of the entities which are party to the deed of cross guarantee are:
Income Statement
2021
$’000
2020
$’000
Revenue from sale of goods, rentals and software
125,345
118,625
Other income
Foreign exchange gain / (loss)
Raw materials and consumables used
Employee benefit expenses
Depreciation and amortisation expense
Write back / (down) of intercompany loans
Finance costs
Consulting and legal expenses
Commissions
Rent and premises costs
Travel and accommodation
Motor vehicle costs
Research and development costs
Doubtful debts
Other expenses
Profit/(loss) before income tax expense
Income tax expense
Profit/(loss) for the year
23,049
(903)
(44,812)
(36,324)
(11,070)
-
(2,438)
(9,192)
(1,339)
(1,161)
(604)
(184)
(12,289)
167
(11,319)
16,926
(1,869)
15,057
37,362
(390)
(39,706)
(33,824)
(11,516)
11,183
(2,351)
(6,553)
(1,074)
(374)
(1,587)
(148)
(2,432)
(632)
(5,739)
60,844
(6,919)
53,925
Page 53 of 68
113
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.3
Parent Entity & Subsidiary Information (continued)
The consolidated statement of financial position of the entities which are party to the deed of cross guarantee are:
Balance Sheet
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Other financial assets
Property, plant and equipment
Right-of-use assets
Other intangible assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Other financial liabilities
Lease liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed capital
Employee equity-settled benefits reserve
Foreign currency translation reserve
Retained earnings (i)
Total equity
(i) Retained Earnings at the beginning of the financial year
Effect of change in accounting for cloud-based SaaS arrangements
Net profit/(loss)
Dividends received
Retained earnings at the end of the financial year
2021
$’000
2020
$’000
47,609
41,122
20,293
1,426
110,450
93,805
8,783
26,352
3,397
6,848
139,185
249,635
36,773
1,923
3,670
42,366
19,489
30,161
11,128
233
61,011
103,377
146,258
169,042
7,534
7,239
(37,557)
146,258
(52,101)
(513)
15,057
-
(37,557)
29,668
41,523
19,537
64
90,792
81,377
10,563
29,565
1,043
3,886
126,434
217,226
32,395
3,279
3,423
39,097
17,098
30,960
6,115
253
54,426
93,523
123,703
158,662
9,903
7,239
(52,101)
123,703
(106,026)
-
16,563
37,362
(52,101)
114
Page 54 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.4
Reserves
The individual financial statements of each group entity are
presented
in the currency of the primary economic
environment in which the entity operates (its functional
currency). For the purpose of the consolidated financial
statements, the results and financial position of each entity
are expressed in Australian dollars, which is the functional
currency of IMDEX, and the presentation currency for the
consolidated financial statements.
In preparing the financial statements of the individual
entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the
rates of exchange prevailing on the dates of the transactions.
At each balance sheet date, monetary items denominated in
foreign currencies are retranslated at the rates prevailing at
the balance sheet date. Non-monetary items carried at fair
value that are denominated in foreign currencies are
retranslated at the rates prevailing on the date when the fair
value was determined. Non-monetary
items that are
measured in terms of historical cost in a foreign currency are
not retranslated.
Exchange differences are recognised in profit or loss in the
period in which they arise except for exchange differences
on monetary items receivable from or payable to a foreign
operation for which settlement is neither planned or likely to
occur, which form part of the net investment in a foreign
operation, and which are recognised in the foreign currency
translation reserve and recognised in profit or loss on
disposal of the net investment.
On consolidation, the assets and liabilities of the Group’s
foreign operations are translated into Australian dollars at
exchange rates prevailing on the balance sheet date. Income
and expense items are translated at the average exchange
rates for the period, unless exchange rates fluctuated
significantly during that period, in which case the exchange
rates at the dates of the transactions are used.
Exchange differences arising, if any, are classified as equity
and transferred to the Group’s translation reserve. Such
exchange differences are recognised in profit or loss in the
period in which the foreign operation is disposed.
Goodwill and fair value adjustments arising on the
acquisition of a foreign entity on or after the date of
transition to A-IFRS are treated as assets and liabilities of the
foreign entity and translated at exchange rates prevailing at
the reporting date. Goodwill arising on acquisitions before
the date of transition to A-IFRS is treated as an Australian
dollar denominated asset.
Equity-settled performance rights with employees and
others providing similar services are measured at the fair
value of the equity instrument at the grant date. Fair value
is measured by the use of the Black-Scholes Model, Binomial
Tree Method or Monte-Carlo Simulation as appropriate. The
expected life used in the model has been adjusted, based
on management’s best estimate, for the effects of non-
restrictions, and behavioural
transferability, exercise
considerations.
The fair value determined at the grant date of the
performance right is expensed over the vesting period, based
on the Group’s estimate of shares that will eventually vest.
At each reporting date, the Group revises its estimate of the
number of performance rights expected to vest. The impact
of the revision of the original estimates, if any, is recognised
in profit or loss over the remaining vesting period, with a
corresponding adjustment to the employee equity-settled
benefits reserve.
Performance Rights Plan
At the Imdex Limited Annual General Meeting on 15 October
2009 the Shareholders approved the formation of a
Performance Rights Plan (PRP or Plan) and subsequently
renewed at the Annual General Meeting on 18 October 2012,
20 November 2015 and 4 October 2018. The Plan allows for
the issue of performance rights to employees from time to
time. The quantum of performance rights granted to
employees is at the discretion of the Directors and is generally
based on seniority and level of contribution to the strategic
goals of IMDEX. A performance right is the right to receive
one fully paid IMDEX ordinary share for nil consideration
should set hurdles be achieved and tenure of employment be
maintained. The hurdles are set by the Directors when
performance rights are issued and are generally linked to the
achievement of financial or other strategic goals of IMDEX.
Page 55 of 68
115
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.4
Reserves (continued)
Performance rights granted in the current year
Performance rights granted in the prior year
Staff Performance Rights
Staff Performance Rights
3,640,787 performance rights were issued to employees
(Level 5 and above)
Upon successful
achievement of the below hurdles, allotment of these
performance rights will be in September 2023 (once the 2023
financial year independent audit report is signed).
in July 2020.
The performance rights are subject to a number of hurdles: a
market based vesting condition in Total Shareholder Return
(TSR) and a non-market based vesting condition in Earnings
Per Share (EPS). In the case of the TSR and the EPS hurdles,
IMDEX’s performance will be measured against the TSR and
EPS of a peer group consisting of the ASX300 Resources Index
over the 3-year measurement period (2021 to 2023 financial
year).
3,407,658 performance rights were issued to employees
(Level 5 and above)
Upon successful
achievement of the below hurdles, allotment of these
performance rights will be in September 2022 (once the 2022
financial year independent audit report is signed).
in July 2019.
The performance rights are subject to a number of hurdles: a
market based vesting condition in Total Shareholder Return
(TSR) and a non-market based vesting condition in Earnings
Per Share (EPS). In the case of the TSR and the EPS hurdles,
IMDEX’s performance will be measured against the TSR and
EPS of a peer group consisting of the ASX300 Resources Index
over the 3-year measurement period (2020 to 2022 financial
year).
The specified conditions for performance rights relating to
each employee level are:
The specified conditions for performance rights relating to
each employee level are:
Employee Level
Specified Conditions
Employee Level
Specified Conditions
5, 6, 7 and 8
50% based on EPS and 50% based
on TSR
5, 6, 7 and 8
50% based on EPS and 50% based
on TSR
Exercise of the performance rights at the end of the 3-year
period (30 June 2023) will commence when the Company’s
performance (as calculated by the Performance Measures) is
at 50% and above of the Peer Group performance. At 50%,
the allocation will be 33% of the total entitlement. This
entitlement increases on a linear scale and achieves 100%
entitlement when the Company’s performance is at the 90th
percentile against the Peer Group.
The fair value of a market performance right (TSR) at grant
date was $0.84 per right. The expected total cost of the
estimated 1,780,521 fully paid ordinary shares to be issued in
IMDEX will therefore be $1,495,638. This value will be
expensed over the vesting period from July 2020 to June
2023, with $497,634 expensed in the current year.
The fair value of a non-market performance right (EPS) at
grant date was $1.254 per right. For the purposes of the 2021
financial statements, the Directors have made an estimate
that out of the 1,780,521 non-market performance rights
issued, 75% will meet the required hurdles and will result in
1,335,391 fully paid IMDEX shares being issued. The expected
total cost of the estimated 1,335,391 fully paid ordinary
shares to be issued in IMDEX will therefore be $1,674,580.
This value will be expensed over the vesting period from July
2020 to June 2023, with $557,173 expensed in the current
year.
Exercise of the performance rights at the end of the 3-year
period (30 June 2022) will commence when the Company’s
performance (as calculated by the Performance Measures) is
at 50% and above of the Peer Group performance. At 50%,
the allocation will be 33% of the total entitlement. This
entitlement increases on a linear scale and achieves 100%
entitlement when the Company’s performance is at the 90th
percentile against the Peer Group.
The fair value of a market performance right (TSR) at grant
date was $0.86 per right. The expected total cost of the
estimated 1,450,462 fully paid ordinary shares to be issued in
IMDEX will therefore be $1,247,397. This value will be
expensed over the vesting period from July 2019 to June
2022, with $393,766 expensed in the current year.
The fair value of a non-market performance right (EPS) at
grant date was $1.357 per right. For the purposes of the 2021
financial statements, the Directors made an estimate that out
of the 1,450,462 non-market performance rights issued, 75%
(FY20: 50%) will meet the required hurdles and will result in
1,087,847 fully paid IMDEX shares being issued. The expected
total cost of the estimated 1,087,847 fully paid ordinary
shares to be issued in IMDEX will therefore be $1,476,208.
This value will be expensed over the vesting period from July
2019 to June 2022, with $547,714 expensed in the current
year.
116
Page 56 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.4
Reserves (continued)
Former Managing Director’s Performance Rights
381,760 performance rights were granted to the former
Managing Director on 21 October 2019 following approval by
the shareholders at the Annual General Meeting. The former
Managing Director forfeited 254,158 performance rights on
his retirement on 1 July 2020. Upon successful achievement
of the below hurdles, the remaining 127,602 performance
rights will vest and convert to fully paid ordinary shares in the
Company (once the 2022 financial year independent audit
report is signed).
The former Managing Director is subject to two hurdles each
with equal weighting; a market based vesting condition in
Total Shareholder Return (TSR) and a non-market based
vesting condition in Earnings Per Share (EPS). In each case the
TSR and the EPS of IMDEX will be measured against the TSR
and EPS of a peer group consisting of the ASX300 Resources
Index over the 3-year measurement period (2020 to 2022
financial year).
Exercise of the performance rights at the end of the 3-year
period (30 June 2022) will commence when the Company’s
performance (as calculated by the Performance Measures) is
at 50% and above of the Peer Group performance. At 50%,
the allocation will be 33% of the total entitlement. This
entitlement increases on a linear scale and achieves 100%
entitlement when the Company’s performance is at the 90th
percentile against the Peer Group.
The fair value of a market performance right (TSR) at grant
date was $0.86 per right. The expected total cost of the
estimated 65,801 fully paid ordinary shares to be issued in
IMDEX will therefore be $54,869. This value will be expensed
over the vesting period from October 2019 to June 2022, with
$2,040 expensed in the current year.
The fair value of a non-market performance right (EPS) at
grant date was $1.357 per right. For the purposes of the 2021
financial statements, the Directors have made an estimate
that out of the 63,801 non-market performance rights issued,
75% (FY20: 50%) will meet the required hurdles and will result
in 47,851 fully paid IMDEX shares being issued. The expected
total cost of the estimated 47,851 fully paid ordinary shares
to be issued in IMDEX will therefore be $64,933. This value
will be expensed over the vesting period from October 2019
to June 2022, with $11,049 expensed in the current year.
Page 57 of 68
117
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.4
Reserves (continued)
Outstanding Performance Rights
2021
Grant
Date
1-Jul-17
19-Oct-17
1-Jul-18
4-Nov-18
21-Oct-19
21-Oct-19
1-Jul-20
Grant
Date
1-Jul-16
25-Nov-16
1-Jul-17
19-Oct-17
1-Jul-18
4-Nov-18
21-Oct-19
21-Oct-19
Expiry
Date
Jul-20
Jul-20
Jul-21
Jul-21
Jul-22
Jul-22
Jul-23
Expiry
Date
Jul-19
Jul-19
Jul-20
Jul-20
Jul-21
Jul-21
Jul-22
Jul-22
Tranche 19
MD Tranche
Tranche 20
MD Tranche
Tranche 21
MD Tranche
Tranche 22
2020
Tranche 18
MD Tranche
Tranche 19
MD Tranche
Tranche 20
MD Tranche
Tranche 21
MD Tranche
Estimated Number of Performance Rights
Market
Value at
Grant
Date
$
Exercise
Price
$
Opening
balance
Granted
-
-
-
-
-
-
-
0.740 3,888,120
643,762
0.965
2,626,391
0.947
364,086
1.079
3,300,386
1.109
127,602
1.109
-
1.047
-
-
-
-
-
-
3,640,787
Satisfied
by the
allotment
of shares
(3,408,944)
(547,348)
-
-
-
-
-
Expired ^
Closing
balance
(479,176)
(96,414)
-
-
(188,240) 2,438,151
364,086
(399,462) 2,900,924
127,602
(79,745) 3,561,042
-
-
Market
Value at
Grant
Date
$
0.220
0.620
0.740
0.965
0.947
1.079
1.109
1.109
Exercise
Price
$
-
-
-
-
-
-
-
-
Estimated Number of Performance Rights
Opening
balance
9,332,504
2,268,946
4,017,730
643,762
2,789,476
364,086
-
-
Granted
-
-
-
-
-
-
3,407,658
381,760
Satisfied
by the
allotment
of shares
(7,510,042)
(1,722,130)
-
-
-
-
-
-
Expired ^
(1,822,462)
(546,816)
(129,610)
-
(163,085)
-
(107,272)
(254,158)
Closing
balance
-
-
3,888,120
643,762
2,626,391
364,086
3,300,386
127,602
^ - Performance rights expire either on failure to maintain employment tenure or on failure to satisfy performance hurdles.
Significant accounting estimates and assumptions
Share-based payments recorded for the performance rights are subject to estimation as they are calculated using the Black-Scholes
option pricing, Binomial Tree Method or Monte-Carlo Simulation model, as appropriate, which is based on significant assumptions
such as volatility, dividend yield, expected term and forfeiture rate.
118
Page 58 of 68
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.5
Contingent Assets & Liabilities
The Group is party to legal proceedings and claims which
arise in the normal course of business. Any liabilities may be
mitigated by legal defences, insurance, and third-party
indemnities. Unless recognised as a provision (refer Note 4.7),
management do not consider it to be probable that they will
require settlement at the Group’s expense.
(i)
Contingent Liabilities
A contingent liability is a possible obligation that arises from
past events whose existence will be confirmed by the
occurrence or non- occurrence of one or more uncertain
future events beyond the control of the Group or a present
obligation that is not recognised because it is not probable
that an outflow of resources will be required to settle the
obligation. A contingent liability also arises in extremely rare
cases where there is a liability that cannot be recognised
because it cannot be measured reliably. The Group does not
recognise a contingent liability but discloses its existence in
the financial statements.
(ii)
Contingent Assets
A contingent asset is a possible asset that arises from past
events whose existence will be confirmed by the occurrence
or non- occurrence of one or more uncertain future events
beyond the control of the Group. The Group does not
recognise contingent assets but discloses its existence where
inflows of economic benefits are probable, but not virtually
certain.
A subsidiary of the Group (Australian Mud Company Pty Ltd
or “AMC”) is currently a party to litigation in relation to
infringement of patents by a third party. The courts have
found in favour of AMC on the matter, and the company is
awaiting an outcome on the quantum of the financial
settlement.
5.6
Key Management Personnel Compensation
The aggregate compensation of the Key Management Personnel of the Group and the Company is set out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
(i)
5.7
Included the compensation of former Managing Director.
Related Party Transactions
2021
$
4,057,244
166,817
49,525
111,024
864,319
5,248,929
2020 (i)
$
3,621,712
167,857
(45,339)
-
1,153,364
4,897,594
Other Transactions with Key Management Personnel (and their related parties) of IMDEX
Mr. I. Gustavino is a director and shareholder of the consulting company Atrico Pty Ltd, that provided consulting services to the
IMDEX Group on normal commercial terms and conditions from 1 July 2020 to 30 September 2020 (when the agreement was
terminated).
Transactions with Directors
Profit from ordinary activities before income tax includes the following
items of expense:
Consultancy expense
2021
$
2020
$
16,200
86,100
During the reporting period, at the direction of the vendors of AusSpec International Limited (Refer Note 5.2), the Group issued
IMDEX shares to Atrico Pty Ltd to satisfy a fee owed by the vendors to Atrico Pty Ltd. Refer to ASX announcement 12 August 2020.
Page 59 of 68
119
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
OTHER
OTHER
5.8
Auditor Remuneration
The auditor of IMDEX is Deloitte Touche Tohmatsu.
During the year, the following fees were paid or were payable for services provided by the auditor of the parent entity and its
related practices:
Notes
2021
$
2020
$
Deloitte and related network firms
Audit or review of the financial report
- Group
- Subsidiary
Other assurance and agreed-upon procedures under other legislation or
contractual arrangements
Other services:
- Tax and corporate compliance services
- Legal services
- IT support services
Other auditors and their related network firms
Audit or review of the financial report
- Subsidiaries
Other services:
- Tax compliance services
- Accounting and other services
(i)
407,500
125,480
532,980
367,850
78,410
446,260
12,750
12,350
2,440
2,660
13,322
18,422
564,152
16,159
37,213
31,809
85,181
543,791
105,534
195,271
-
884
884
106,418
24,687
6,066
30,753
226,024
(i)
IT support services performed by Presence of IT, an existing supplier to IMDEX, whose team joined Deloitte on 9 December 2019.
Amounts paid are for support services during the period up to transition of this contract to a new service provider.
5.9
Subsequent Events
There have been no matters or circumstances that have arisen since the end of the financial year that have significantly affected, or
may significantly affect, the operations of the Group, the result of these operations, or the state of affairs of the Group in future
financial years.
120
Page 60 of 68
IMDEX Annual Report 2021
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
The Board of Directors
IMDEX Limited
216 Balcatta Road
Balcatta WA 6021
15 August 2021
Dear Board Members
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo IIMMDDEEXX LLiimmiitteedd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration
of independence to the directors of IMDEX Limited.
As lead audit partner for the audit of the financial report of IMDEX Limited for the year ended 30 June 2021, I
declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DDEELLOOIITTTTEE TTOOUUCCHHEE TTOOHHMMAATTSSUU
DD KK AAnnddrreewwss
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
121
IMDEX Annual Report 2021
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff
IIMMDDEEXX LLiimmiitteedd
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Opinion
We have audited the financial report of IMDEX Limited (the “Company”) and its subsidiaries (the “Group”) which
comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies and other explanatory information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
122
IMDEX Annual Report 2021
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
AAccccoouunnttiinngg ffoorr tthhee aaccqquuiissiittiioonn ooff AAuussSSppeecc
As disclosed in Note 5.2, effective 22 July 2020
Imdex Limited acquired 100% of the issued share
capital of of AusSpec International Limited
(“AusSpec”) for an agreed consideration of $8.1
million.
The assets acquired consist largely of intangible
assets in relation to the intellectual property
associated with the the aiSIRIS platform.
Judgement was exercised in:
• Assessing whether the transaction is
accounted for as an asset acquisition or
a business combination in accordance
with the requirements of AASB 3
Business Combinations;
• Determining the value of the deferred
consideration to be recognised as a
liability at acquisition date; and
• Assessing the fair values of identifiable
assets and liabilities acquired and the
adjustment to carrying values on
acquisition.
RReeccoovveerraabbiilliittyy ooff nnoonn--ccuurrrreenntt aasssseettss
Included in the Group’s consolidated statement
of financial position at 30 June 2021 are goodwill,
intangible assets, right of use lease assets and
property, plant and equipment totalling $197
million.
Management undertakes impairment testing to
test the recoverability of goodwill annually.
Additionally, an assessment is made as to
whether any non-current asset or cash
generating unit (‘CGU’) may be impaired at
balance date.
The assessment requires significant judgement
due to assumptions and estimates involved in
preparing a value in use model (‘VIU’) to
estimate a CGU’s recoverable amount, including:
Forecast future cash flows; and
-
- Discount rates.
Our audit procedures included, but were not limited to:
•
Reviewing the Share Sale Agreement to
understand key terms and conditions, including
the elements of consideration payable under
the agreement;
• Obtaining management’s assessment and
calculations for the acquisition accounting and
performing the following:
o Evaluating the fair value of the
consideration payable, including
assessing the probability of the
contingent consideration being paid
and calculating the fair value of the
deferred consideration payable at
acquisition date;
o Engaging our internal valuation
specialists to challenge the fair value
determined for the intangible assets
acquired; and
o Assessing the fair value of the
remaining identifiable assets acquired
and liabilities assumed and the
adjustments to derive the values at
acquisition.
• We also assessed the appropriateness of the
disclosures in the Notes to the financial
statements.
Our procedures included, but were not limited to:
•
Evaluating the risk of impairment in each CGU,
or group of CGU’s to which goodwill is allocated,
by assessing whether a CGU’s implied EBITDA
multiple exceeded an acceptable market-based
EBITDA multiple at balance date;
• Obtaining management’s impairment
assessment carried out for CGU’s, and groups of
CGU’s to which goodwill is allocated, and
assessing the work performed against the
requirements of the relevant accounting
standard;
• Assessed the recoverable value modelling for
the African and South American CGU’s, as these
CGU’s demonstrated characteristics that
suggested impairment testing was required, by:
123
IMDEX Annual Report 2021
o
Inquiring of management and the
directors in relation to forecasting
assumptions within the VIU
models and agreeing these to the
board approved budgets;
o Reviewing the mathematical
accuracy and modelling integrity
of the VIU models;
o Challenging the assumptions
contained in the cash flow
forecasts, including the revenue
projections, forecast gross margins
and capital expenditures, including
the ongoing impact of COVID-19;
o Assessing the appropriateness of
the discount rates used in the
value in use models, with the
assistance of our internal valuation
specialists,, and
o Performing sensitivity analysis on
key assumptions within the model,
including the expected revenues,
margins, growth rates and
discount rates.
• We also assessed the appropriateness of the
disclosures in the Notes to the financial
statements.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2021 but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we will not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
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IMDEX Annual Report 2021
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
•
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the Group’s audit. We remain solely responsible for our
audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
125
IMDEX Annual Report 2021
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in on pages 60 to 76 of the Directors’ Report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of IMDEX Limited, for the year ended 30 June 2021, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DDEELLOOIITTTTEE TTOOUUCCHHEE TTOOHHMMAATTSSUU
DD KK AAnnddrreewwss
Partner
Chartered Accountants
Perth, 15 August 2021
126
IMDEX Annual Report 2021 IMDEX LIMITED
and its controlled entities
ADDITIONAL SECURITIES EXCHANGE INFORMATION
ADDITIONAL SECURITIES EXCHANGE INFORMATION
AS AT 11 AUGUST 2021
AS AT 11 AUGUST 2021
(a) Distribution of Shareholders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Holding less than a marketable parcel
(b) Substantial Shareholders
Ordinary Shareholders
MORGAN STANLEY
L1 CAPITAL PTY LTD
FMR LLC
YARRA FUNDS MANAGEMENT
FIL LIMITED
(c) Twenty Largest Holders of Quoted Equity Securities
Ordinary Shareholders
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
CS THIRD NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
SANDHURST TRUSTEES LTD
MR RICHARD KARL HILL
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
UBS NOMINEES PTY LTD
WARBONT NOMINEES PTY LTD
MR BERNARD RIDGEWAY
CS FOURTH NOMINEES PTY LIMITED
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
MR BRUCE CRAIG MUNRO
WEAR SERVICES PTY LTD
Number of Fully Paid
Ordinary Shareholders
Number of
Performance Rights
Holders
1,083
1,248
549
749
116
3,745
262
-
2
5
50
25
82
-
Fully Paid
Number
Percentage
41,494,745
32,595,205
22,495,350
17,712,047
17,133,650
10.50
8.20
5.70
4.50
4.30
Fully Paid
Number
Percentage
83,942,117
76,802,773
76,731,074
21,207,642
20,683,224
12,641,255
7,154,942
6,703,567
5,100,000
4,565,645
4,535,398
3,894,579
3,349,126
3,161,279
2,369,715
1,883,859
1,666,611
1,453,101
1,300,258
1,015,166
340,161,331
21.17
19.37
19.35
5.35
5.22
3.19
1.80
1.69
1.29
1.15
1.14
0.98
0.84
0.80
0.60
0.48
0.42
0.37
0.33
0.26
85.80
Page 67 of 68
127
IMDEX Annual Report 2021
IMDEX LIMITED
and its controlled entities
ADDITIONAL SECURITIES EXCHANGE INFORMATION
ADDITIONAL SECURITIES EXCHANGE INFORMATION
AS AT 11 AUGUST 2021
AS AT 11 AUGUST 2021
(d)
Director and Company Secretary Shareholdings
Number of
Shares
Number of
Performance
Rights
400,000
204,546
70,000
62,077
-
-
-
-
-
-
687,611
410,377
-
-
1,384,234
410,377
Name
Mr. A. Wooles
Mr. K. Dundo
Ms. S. Layman
Mr. I. Gustavino
Ms T. Arlaud
Mr. P. Evans
Mr. M Tomasz
(e)
Company Secretary
Mr Paul Anthony Evans
Mr Michael Tomasz
(f)
Registered Office
216 Balcatta Road
Balcatta
Western Australia
6021
Phone: (08) 9445 4010
(g)
Share Registry
Computershare Investor Services
Level 11
172 St Georges Terrace
Perth
Western Australia
6000
Phone: (08) 9323 2000
128
Page 68 of 68
IMDEX Annual Report 2021
SHAREHOLDER INFORMATION
CORPORATE INFORMATION
Registered Company Name:
IMDEX Limited
ABN:
Exchange:
ASX Code:
78 008 947 813
Listed on the Australian Securities Exchange (ASX)
IMD
Listing Date:
24 September 1987
Registered Head Office:
216 Balcatta Road Balcatta Western Australia 6021
Registered PO Box:
PO BOX 1262 Osborne Park Western Australia 6916
Telephone:
Email:
+61 (8) 9445 4010
imdex@imdexlimited.com
Web Address:
www.imdexlimited.com
Bank Institutions:
Commonwealth Bank of Australia
Auditors:
Deloitte Touche Tohmatsu
Legal Advisors:
HopgoodGanim
Share Registry:
Computershare
SHARE REGISTRY ENQUIRIES
Investors seeking information about their shareholdings should contact IMDEX’s share registry:
Computershare Investor Services Pty Limited
Computershare can assist with queries on share transfers, dividend payments, the dividend reinvestment plan, notification of
tax file numbers and changes of name, address or bank account details.
Address: Level 11, 172 St Georges Terrace Perth WA 6000
Postal address: GPO Box D182 Perth WA 6840
Telephone: 1300 558 507 (within Australia) +61 3 9415 4632 (outside Australia)
Facsimile: +61 3 9473 2500
Email: web.queries@computershare.com.au
Further information and downloadable forms can be found at
https://www.imdexlimited.com/investors/shareholder-services
130
IMDEX Annual Report 2021 SHAREHOLDER STATISTICS
SHARE PRICE AND MARKET CAPITALISATION AT 30 JUNE 2021
Share Price
Shares on Issue
Market Capitalisation
$2.04
$396.5m
$808.8m
SHARE PRICE PERFORMANCE
SHARES BY COMPOSITION
SHARES BY GEOGRAPHY
Total sharesholder
%
Total shares by
%
composition
Institutional
Retail
Broker
Corporate
71%
7%
13%
2%
geography
Australia
North America
United Kingdom
Europe
60%
16%
12%
3%
131
IMDEX Annual Report 2021 KEY ANNOUNCEMENTS
16/6/2021
4/6/2021
11/2/2021
8/2/2021
8/2/2021
8/2/2021
8/2/2021
8/2/2021
8/1/2021
Macquarie Emerging Leaders Conference Market Update
Appointment of Additional Company Secretary
Director Appointment/Resignation
IMDEX 2021 Half Year Results Teleconference Script
Dividend/Distribution - IMD
Half Yearly Results Presentation
Half Yearly Results Announcement
Half Yearly Report and Accounts
1H21 Teleconference Details
26/10/2020
Change of Directors Interest Notice
15/10/2020
Results of Meeting
15/10/2020
Chairman’s Address to Shareholders
23/9/2020
11/9/2020
17/8/2020
17/8/2020
17/8/2020
17/8/2020
17/8/2020
17/8/2020
17/8/2020
17/8/2020
12/8/2020
12/8/2020
12/8/2020
12/8/2020
11/8/2020
10/8/2020
10/8/2020
4/8/2020
22/7/2020
22/7/2020
7/7/2020
1/7/2020
Employee Rights Plan Appendix 2A and Appendix 3G
Notice of Annual General Meeting/Proxy Form
FY20 Results Webcast Script
Dividend/Distribution - IMD
Full Year Results Presentation
Full Year Results Announcement
Appendix 4G and Corporate Governance Statement
Full Year Statutory Accounts
Annual Report to shareholders
Preliminary Final Report
Reinstatement to Official Quotation
Change of Director’s Interest Notice
Court Orders Granted
Suspension from Official Quotation
Court Application Update
Trading Halt
Delayed Appendix 2A and Cleansing Notice
FY20 Results Teleconference Details
Proposed issue of Securities - IMD
IMDEX completes strategic AusSpec acquisition
Acquisition of AusSpec
IMDEX confirms retirement of Managing Director
133
IMDEX Annual Report 2021 ANNUAL GENERAL MEETING
Our Annual General Meeting will be held on 7 October 2021, at 11:00 am (AWST) at IMDEX’s Head Office
216 Balcatta Road, Balcatta, Western Australia.
Members of our Board and Executive Leadership Team will be available to discuss the Company’s
performance, operations, and technologies.
CORPORATE CALENDAR
16 August 2021
16 - 20 August 2021
15 September 2021
07 October 2021
31 December 2021
7 February 2022
7 - 11 February 2022
30 June 2022
15 August 2022
Release of FY21 Full Year Financial Results
FY21 Full Year Results Road Show
Release of FY21 Sustainability Report
FY21 Annual General Meeting
1H22 Year End
Release of 1H22 Results
1H22 Results Road Show
FY22 Full Year End
Release of FY22 Results
15 - 19 August 2022
FY22 Results Road Show
134
IMDEX Annual Report 2021 COMPANY HISTORY
December 1980
Australian company Pilbara Gold NL incorporated
July 1985
Pilbara Gold NL changed name to IMDEX Limited
September 1987
IMDEX Limited listed on the ASX
1988
1997
2001
2005
2005
Formation of Australian Mud Company
Acquisition of Surtron Technologies Pty Ltd and Ace Drilling Supplies
Joint venture formed with IMDEX and Rashid Trading Establishment (RTE) in Saudi Arabia July
Sale of IMDEX Minerals August
Acquisition of African based company Samchem
August 2006
Acquisition of Swedish based REFLEX Group of Companies and United Kingdom based company
Chardec
May 2007
Acquisition of Swedish based company Flexit
July 2007
Ace merged with REFLEX. IMDEX finalised the sale of its interest in IMDEX Arabia to RTE Acquisition
of Canadian based Poly-Drill and a 75% interest in Kazakhstan based Suay Energy Services
October 2007
Sale of Surtron Technologies
November 2007
Acquisition of Chilean based company Southernland
January 2008
Acquisition of German based company System Entwicklungs
July 2008
Acquisition of the remaining 25% of Kazakhstan based Suay Energy Services
September 2008
Acquisition of Australian based company Wildcat Chemicals Australia
July 2010
New regional structure implemented and business reporting streamlined into Minerals and Oil & Gas
Divisions
September 2010
Acquisition of Australian based companies Fluidstar and Ecospin March 2011 Acquisition of German
based company Mud-Data
July 2011
Formation of DHS Services joint venture Acquisition of Australian based company Australian Drilling
Specialties Pty Ltd
August 2011
Acquisition of Brazilian based company System Mud Indústria e Comércio Ltda
January 2012
Acquisition of Vaughn Energy Services (VES) by IMDEX’s DHS Services joint venture
November 2012
Acquisition of ioGlobal Pty Ltd, ioAnalytics Pty Ltd and ioGlobal Solutions Inc. (together ioGlobal)
December 2012
DHS Services and Vaughn Energy Services rebranded as VES International
September 2014
Acquisition of 2iC
June 2015
Divestment of Suay Energy Services
2016
Divestment of AMC Oil & Gas
January 2018
Option to acquire Flexidrill Limited and Flexidrill Construction Limited (together Flexidrill)
January 2020
Completed acquisition of Flexidrill
July 2020
Completed acquisition of AusSpec International
135
IMDEX Annual Report 2021 FORWARD LOOKING STATEMENTS
This report may contain certain ‘forward-looking statements’ and projections
provided by or on behalf of Imdex limited (IMDEX).
Forward looking statements can generally be identified by the use of forward-
looking words such as, ‘expect’, ‘anticipate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’,
‘predict’, ‘plan’, ‘propose’, ‘will’, ‘believe’, ‘forecast’, ‘estimate’, ‘target’ ‘outlook’,
‘guidance’ and other similar expressions within the meaning of securities laws
of applicable jurisdictions. These forward looking statements reflect various
assumptions made by or on behalf of IMDEX.
You are cautioned not to place undue reliance on forward looking statements.
The statements, opinions and estimates in this report are based on assumptions
and contingencies subject to change without notice, as are statements about
market and industry trends, projections, guidance, and estimates.
The forward looking statements contained in this report are not guarantees or
predictions of future performance and involve known and unknown risks and
uncertainties and other factors, many of which are beyond the control of IMDEX,
and may involve significant elements of subjective judgement and assumptions
as to future events which may or may not be correct. The forward looking
statements are subject to significant business, economic and competitive
uncertainties and contingencies associated with the Mining-Tech industry
which may be beyond the control IMDEX, which could cause actual results or
trends to differ materially, including but not limited to retention of key business
relationships, environmental impacts and claims, operational and executional
risks, research and development and intellectual property risks, an inability to
meet customer demand, price and currency fluctuations, operating results,
legislative, fiscal and regulatory developments, economic and financial market
conditions in various countries, approvals and cost estimates, environmental
risks, ability to meet funding requirements and share price volatility. Accordingly,
there can be no assurance that such statements and projections will be realised.
IMDEX makes no representations as to the accuracy or completeness of any
such statement of projections or that any forecasts will be achieved.
A number of important factors could cause actual results, achievements or
performance to differ materially from the forward looking statements, including
the risks and uncertainties set out above. Investors should consider the forward
looking statements contained in this report in light of those matters. the forward
looking statements are based on information available to IMDEX as at the date
of this report. Except as required by law or regulation (including the ASX listing
rules), IMDEX undertakes no obligation to provide any additional or updated
information whether as a result of new information, future events, or results or
otherwise. indications of, and guidance or outlook on, future earnings or financial
position or performance are also forward looking statements.
136
IMDEX Annual Report 2021 imdex@imdexlimited.com
www.imdexlimited.com