Annual Report 2022
Inspiring confidence
to make smarter, more
timely decisions from
exploration to production
IMDEX
is a leading
Mining-Tech
Company
We believe mining is essential to all aspects
of modern life. Our opportunity, indeed
our responsibility, is to change the global
minerals industry forever.
Why We Deliver
A strong core business with an objective of outperforming
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 commitment to targeted R&D to maintain technical
leadership
End-to-end solutions that are applicable across the mining
value chain
Opportunities to grow core business via new technologies
and solution selling
The ability to make acquisitions or collaborate with
industry partners to complement existing product offering
An 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 2022 About This Report
This Annual Report provides a summary of Imdex Limited’s operations and performance for the
2022 financial year (FY22) from 1 July 2021 to 30 June 2022.
A digital version of our FY22 Annual Report is available on our website at:
www.imdexlimited.com/investors.
Our Corporate Governance Statement, which is available at
www.imdexlimited.com/about-us/corporate-governance, discloses the extent to which
IMDEX has complied with the Australian Securities Exchange Corporate Governance Council’s
‘Corporate Governance Principles & Recommendations – 4th edition’.
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 142 of this report.
Sustainability
Report
Further details regarding our sustainability approach, health and safety performance and other material
information for the year is included in our FY22 Sustainability Report, released in September 2022.
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
Contents
Overview
About IMDEX
Operational Highlights
Financial Highlights
Chairman’s Address
CEO Review of Operations
09
09
14
16
20
23
Executive Leadership Committee
29
Financial
Performance
and Strategy 32
Financial Summary
Research & Development
Balance Sheet
Quality Revenue Model
Growth Strategy
FY23 Focus Areas
Corporate
Risk
Safety & Quality
Data Security
People & Culture
IMDEX Values
Sustainability
32
34
36
39
40
41
43
43
45
47
49
52
55
Governance
57
Board of Directors
Corporate Governance
Directors’ Report
57
59
62
Remuneration 66
Financial
Statements
83
Shareholder
Information
Corporate Information
Share Price Performance
Top 20 Largest Shareholders
Key Announcements
Annual General Meeting
Corporate Calendar
Share Registry Enquiries
Company History
Forward Looking Statements
136
136
137
137
139
140
140
140
141
142
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, confidence 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 and Integrated Solutions
1
Drilling
optimisation
2
Rock knowledge
sensors
3
Real-time data
and analytics
A suite of products that enhance
drilling productivity while
improving safety and efficiency:
• Drilling fluids
•
•
Solids removal units
Remote fluid testing
technologies
Best-in-class sensors that originate
critical data on the four elements of
rock knowledge - location, grade,
mineralogy and texture:
• Downhole survey sensors
• Core orientation sensors
• Gamma logging sensors
•
Rig alignment technologies
•
Structural orientation sensors
1
2
3
DRILLING
OPTIMISATION
ROCK KNOWLEDGE
SENSORS
REAL- TIME DATA
AND ANALYTICS
APPLICABLE ACROSS WHOLE MINING VALUE CHAIN
A secure cloud platform and
market leading geoscience
analytical software to enrich data
and enable real-time decisions to
be made further upstream:
• Cloud-based data collection
and validation platform
•
Advanced reporting software
• Geoscience analytics software
•
Interpretive mineralogy
software
•
3D visualisation software
Exploration
Resource Delineation
Planning
Fragmentation
Mining
Stock Pilling
and Blending
Processing
Opportunity to gain in situ knowledge upstream where it provides greater value
Underground
9
IMDEX Annual Report 2022 Rock Knowledge & Quality Data
Rock knowledge is an understanding of location, texture, grade and
mineralogy.
It answers questions relating to 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.
Many billion dollar mining
investment decisions are made
having sampled only 1% of 1% of the
orebody.
- Paul House, Chief Executive Officer
10
IMDEX Annual Report 2022 The Four Components of Rock Knowledge
LOCATION
IMDEX HUB-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
IMDEX’s aiSIRIS™ software 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.
Timely Information for Critical Decision Making
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
• Autonomous operations
• More efficient digital
workflows
11
IMDEX Annual Report 2022 Our Established Global Business
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 FY22 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
Salt Lake City - USA
San Luis Obispo - USA
Phoenix - USA
Torreón - Mexico
East Sussex - UK
Rastede - Germany
Val D’Or - Canada
Timmins - Canada
Amsterdam - Netherlands
Chandler - USA
Dubai - UAE
Quito - Ecuador
Lima - Peru
Mendoza - Argentina
Santiago - Chile
Parauapebas - Brazil
Belo Horizonte - Brazil
Itajai - Brazil
Johannesburg
South Africa
Kalgoorlie - WA
PERTH - WA
Townsville - QLD
Brisbane - QLD
Melbourne
- VIC
Auckland -
New Zealand
Timaru -
New Zealand
IMDEX FACILITIES (NOT INCLUDING DISTRIBUTORS)
IMDEX PRINCIPAL R&D FACILITIES
Our Customers and Business Partners
Our long-standing customer 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 customers to optimise orebodies.
Operating in all
key mining
regions
of the world
Sales in
100+
COUNTRIES
65%
of our top 100
customers have
been with
IMDEX for
>5 years
As a capital light, people light business, with deep
supply chain capability and the ability to support
our customers remotely anywhere in the world, we
are positioned to service our growing and evolving
customer needs.
- Paul House, Chief Executive Officer
Operational Highlights
Improved safety
engagement and
performance
Average number of engagements per
employee 37.4, up from 15
LTIFR 0.77 v 1.85 and TRIFR 2.32 v 2.78
A strong focus on
enhancing IMDEX’s
employee value
proposition
Employee engagement up 15%1
Released first
Sustainability Report
acheived a Low Risk
Sustainalytics score of 11.92
IMDEX HUB-IQ™
connected revenue
up 58%
A record number of rock
knowledge sensors on rent
up 27%
44% of top 250 clients
with >3 products, up from 33%
Acquired MINEPORTAL™ 3D visualisation software
to accelerate IMDEX BLAST DOG™ for mining production
1 Based on Gallup Engagement Survey.
2 Sustainalytics ESG Risk Rating June 2022, Technology Hardware Industry and Electronics Equipment Subindustry.
Note: Percentages are comparable to FY21
14
IMDEX Annual Report 2022
Released premium
IMDEX HUB-IQ™ SaaS
chargable module
for Quality Assurance survey data
Released fully automated
next generation aiSIRIS™
software
client utilisation increased with
volume of spectra analysed up 62%
Released
IMDEX OMNI™ sensor
and and next generation
IQ-LOGGER™ core
technologies
Invested in Datarock
Holdings Pty Ltd
which develops geoscientific
image analysis software
Progressed
IMDEX BLAST DOG™
from engineering
prototype to
commercial
prototype
commercial prototype revenue
expected in FY23
Mitigated Supply
Chain Risk
Maintained a
disciplined approach
of our product portfolio and
global operations
Commenced Digital
2.0 to optimse
cost base, build scalable systems and
further enhance customer experience
15
IMDEX Annual Report 2022
Financial Highlights
(compared to FY21 at 30 June)
RECORD REVENUE
29%
EBITDA^
39%
Up 26.5% on a constant currency basis
Strong demand in all regions
Up 33.8% on a constant currency basis
Strong fixed cost leverage
(FY22 $341.8m v FY21 $264.4m)
(FY22 $104.9m v FY21 $75.5m)
NPAT
41%
EBITDA MARGIN^
31%
Effective tax rate 28.5%
Strong trend of growth
(FY22 $44.7m v FY21 $31.7m)
(FY22 30.7% v FY21 28.5%)
NET CASH
$24M
Includes funding MINEPORTAL™
acquisition and investment in
Datarock
(FY22 $24.2m v FY21 $47.4m)
FULL YEAR DIVIDEND
3.4CPS
Final 1.9 cps, interim 1.5 cps
30% NPAT payout ratio
(FY22 3.4 cps v FY21 2.4 cps*)
^ Stated before a net expense of $2.9m, being an impairment loss on COREVIBE IP, inventory and associated fixed assets of $14.1 m offset
by the related $11.2m estimated deferred consideration no longer payable (FY21 - $2.9m gain on deferred consideration fair value
adjustment for Flexidrill and AusSpec).
* This 2.4cps excludes FY21 0.4cps special dividend.
Percentages comparable to FY21.
16
IMDEX Annual Report 2022
Key Metrics
$m (unless indicated otherwise)
FY22
FY21
VAR %
Revenue
EBITDA1
EBITDA1 Margin %
NPBT
NPAT
EPS (cents)
Pre-Tax Operating Cash Flow2
Pre-Tax Operating Cash Flow Per Share (cents)
Net Assets (at 30 June)
Net Cash (at 30 June)3
ROE (%)
ROCE (%)
Full Year Fully Franked Dividend (cents)
Full Time Employees (at 30 June)
341.8
104.9
30.7
62.6
44.7
11.3
69.0
17.4
297.2
24.2
16.2
19.3
3.4
622
264.4
75.5
28.5
44.5
31.7
8.0
64.0
16.1
253.1
47.4
13.3
15.5
2.44
521
29.3
38.9
7.7
40.7
41.0
41.3
7.8
8.1
17.4
-48.9
21.8
24.5
41.7
19.4
1 Stated before a net expense of $2.9m, being an impairment loss on COREVIBE IP, inventory and associated fixed assets of $14.1m offset by
the related $11.2m estimated deferred consideration no longer payable (FY21 - $2.9m gain on deferred consideration fair value adjustment for
Flexidrill and AusSpec).
2 The pre-tax operating cash flow to EBITDA conversion rate was lower than the pcp due to allowances made for longer supply chain lead
times. Outside of this, the working capital investment was in line with historical levels. Net cash further reduced due to the acquisition of
MinePortal and the 30% investment into Datarock.
3 Cash less external borrowings (excluding lease liabilities).
4 Excluding a special dividend of 0.4 cents per share.
17
IMDEX Annual Report 2022 Operating Environment
Strong Industry Fundamentals
Large, mid-cap and junior resource companies all remain well-funded and
committed to current programs
Continued demand and extraction of mineral resources with diminishing
reserves
New discoveries are likely to be at depth resulting in larger drilling
campaigns
Global commitment towards net zero emissions and increasing demand
for critical metals
Exploration spend profile is shifting due to a mix of targeting, compliance
and drilling at depth
Increasing demand for secure real-time rock knowledge data and solutions
to support remote and automated operations
The commitment to growth in exploration
by all participants in the resource sector is
high and reflects both the positive underlying
fundamentals and the sense of urgency
required. Execution, however, is likely to take
place over a longer period of time than planned.
- Paul House, Chief Executive Officer, June 2022 Macquarie Emerging Companies Conference
18
IMDEX Annual Report 2022 Key Market
Constraints
IMDEX’s Response
Access to Mine Sites
• Ability to redirect R&D capital allocation in response to client demand
• Ability to accelerate projects that will provide additional and sustainable
revenue to IMDEX
Labour Shortages
•
People light business model
• Attractive Employee Value Proposition
• Global business – access to employees in diverse regions
Supply Chains
• Multiple supply contingencies
• Global distribution hubs
•
Increased inventory holding in short-term to meet demand and mitigate
longer delivery times
19
IMDEX Annual Report 2022
Chairman’s Address
Dear fellow shareholders,
Strong Performance Growth
On behalf of the IMDEX Board of Directors,
I am pleased to present the Company’s
Annual Report for the 2022 financial year
(FY22).
Despite another challenging year for global economies
and communities, I am pleased to report that IMDEX
continued to demonstrate the strength of its core
business, growth strategy and global team.
The Company delivered a record revenue result of
$341.8m, which represented an 29.3% increase on FY21.
EBITDA was $104.9m1, another record and a 38.9%
increase on the previous year.
Anthony Wooles
Safety & Wellbeing
The safety of IMDEX’s people globally remains the
Board’s key priority. Notably, the Company achieved
Disciplined Capital
Management
significant improvement in its safety engagement and
During the year the Board was pleased to pay an
performance during FY22. IMDEX’s Lost Time Injury
interim fully franked dividend of 1.5 cents and declare
Frequency rate improved from 1.85 to 0.77.
This result was particularly pleasing given the
disruption and ongoing distractions caused by
COVID-19. I am immensely proud of the way the
a fully franked final dividend of 1.9 cents per share.
This brings the full year dividend total to 3.4 cents per
share. Dividends paid and declared are in line with the
Company’s historical 30% NPAT payout ratio.
Company’s global teams responded to these challenges
Dividend record and payment dates are 27 September
and maintained operational excellence throughout the
and 11 October 2022, respectively.
year.
The Board is committed to balancing IMDEX’s dividend
policy with the Company’s ongoing investment in
technologies to deliver sustainable earnings growth for
shareholders.
The safety of IMDEX’s people globally remains the Board’s
key priority. Notably, the Company achieved significant
improvement in its safety engagement and performance
during FY22.
1 Stated before a net expense of $2.9m, being an impairment loss on COREVIBE IP, inventory and associated fixed assets of $14.1 m
offset by the related $11.2m estimated deferred consideration no longer payable (FY21 - $2.9m gain on deferred consideration fair
value adjustment for Flexidrill and AusSpec).
IMDEX Annual Report 2022 ESG
In line with the Company’s commitment to enhancing
ESG related disclosure, IMDEX released its first
Sustainability Report in September 2021. During
FY22, the Company improved its Sustainalytics
ESG Risk Rating score and continued to develop its
sustainability targets and strategy, together with
related initiatives and polices. Noteworthy examples
include:
•
The ongoing substantial commitments we have
made in gender equality and diversity yielding
considerable progress in FY22 across a number of
initiatives; and
A Talented And Collaborative
Team
As Chair of IMDEX, I am delighted with the continued
achievement of the Company. On behalf of the
Board of Directors, I thank Paul House, our Executive
Leadership Committee and our global teams. Each of
you has worked tirelessly through another challenging
year, and your commitment to our purpose and vision
as a global mining-tech company has been outstanding.
I also extend my sincere thanks to my fellow Board
members. As always, it is a great pleasure working
with you. All members have continued to display
tremendous flexibility and dedication throughout the
•
Enhancing IMDEX’s employee value proposition
year.
in order to attract, retain, and develop highly
Finally, I acknowledge and thank our shareholders
talented employees.
Further information will be provided in IMDEX’s
FY22 Sustainability Report, which will be released in
September 2022.
To formalise our commitment to ESG, in FY23 the
ESG Committee will become a sub-committee of
IMDEX’s Audit Risk and Compliance Committee. In
FY24 it is proposed that a separate ESG Committee is
established reporting directly to the Board.
for your ongoing support. IMDEX has a strong core
business with outstanding prospects for sustainable
growth. The Company is well-positioned in its core
and emerging markets for continued success.
Anthony Wooles
IMDEX Chairman
21
IMDEX Annual Report 2022 CEO Report and Review of
Operations
Dear Shareholders,
I am pleased to provide a review of our
results and our operations for the 2022
financial year (FY22).
Record Financial Performance
The FY22 year was defined by a combination of positive
market demand, offset by some challenging labour and
supply chain considerations, and the advancement of
our own strategic plans.
The clear highlights in FY22 are the record revenues,
record earnings, and continued EBITDA margin
expansion. The key features of our business model
have ensured that we can respond to the emerging
challenges in our marketplace, continue to support
customers and continue to invest in our strategy. The
end result is a reflection of our objective to outperform
industry market growth in all conditions.
In a year where supply chain pressures and a high
Whilst not immune from the various challenges due
to supply chain, labour availability and inflationary
pressures, we are well protected relative to other
industries, including mining services. As a people light,
capex light business, with deep supply chain capability
and the ability to support our customers remotely
anywhere in the world, we are well positioned to service
our dynamic customer needs.
During the year we generated record revenue of
$341.8m and our record EBITDA of $104.9m was up
38.9%. On a constant currency basis, revenue and
earnings grew 26.5% and 33.8% respectively.
Our strong uplift in earnings continues to reflect the
increasing percentage of revenue coming from our
higher-margin sensors and software business. At the
close of FY22, rentals and subscriptions represented
58% of revenue.
The benefits of our Digital 1.0 program, which
delivered scalable operating systems to support our
business, have been sustained. This has paved the
inflationary environment have had a combined impact
on net working capital, our business performed
strongly. Whilst net working capital grew in 1H22 it
peaked in 3Q22 and eased in 4Q22. The majority of
working capital growth was directly in line with revenue
growth, with a smaller portion attributable to the
longer lead times within global supply chains. Our
expectation is that while there are signs of easing,
supply chains will remain under some form of pressure
for the next 12 – 24 months. Pleasingly, IMDEX is well
positioned with its network of suppliers around the
world ensuring continuity of customer service.
After accommodating the supply chain and inflationary
movements, operational cash generation remains
strong. This has afforded us with the opportunity
to make a number of investments including our
acquisition of MINEPORTAL™, our 30% investment in
Datarock and the acceleration of our IMDEX Mining
Technology initiatives.
Strong financial results are the end result of strong
way for our Digital 2.0 program of work, leveraging the
operational achievements, and I am pleased to
same disciplined project execution, to drive further
highlight a selection of these.
improvements in the two to three years ahead.
23
IMDEX Annual Report 2022 Operational Achievements
Safety Engagement and Performance
At the height of COVID-19 we were focused on
protecting our people and protecting the continuity
of business for our clients. Whilst the urgency around
COVID-19 has given way to greater certainty in how we
live and work with COVID now, it will remain present
in our workplaces for some time to come. Accordingly,
we must continue to respond to our employees’
physical and mental wellbeing.
Our most recent employee engagement survey,
conducted by Gallup, showed a 15% improvement
in our engagement score, and clearly indicates that
IMDEX has navigated these pandemic and workplace
challenges well. I am thankful to our teams all around
the world for continuing to make IMDEX an attractive
place to work and a safe place to work. It is not
something we take for granted.
At IMDEX we place a high focus on HSE, whether in
a stream of enhancements or problems to solve. The
discipline in our R&D process is our ability to evaluate
those opportunities critically in two key areas. The
first is selecting projects that support our current
business (Horizon 1) and our future business (Horizons
2 & 3) in the right proportion. The second is our
ability to focus on the right effort at the right time
in a product lifecycle and determine when to keep
investing, cease investing, change priorities or remove
support for a product that is at its end-of-life. In turn,
this discipline frees up capital to deploy on projects
that meet our clients most pressing needs.
We maintain a disciplined approach to our product
portfolio. This whole-of-life-cycle lens is a key feature
of our business model and ensures we are optimising
value for customers and returns for shareholders both.
Following the review of our product portfolio, several
end-of-life products and early-stage projects will be
phased out or no longer progressed. One of these
development projects is COREVIBE™. During the
our own places of work or at our clients. Pleasingly, we
period we completed a body of test work, the outcome
saw a marked increase in safety engagement across
our global group during FY22. Whilst we all report
safety incidents in their various forms, a long-term
safety culture requires deep employee engagement
with safety as a behaviour. As such, we prioritise
engagement first and HSE outcomes second. During
the year engagement increased by 146% and for the
first time in our history we recorded over 365 days
of which was that COREVIBE™ no longer meets the
financial and operational stage gate hurdles we have
set for it to be an IMDEX product. Similarly further test
work was undertaken on MAGHAMMER™, also acquired
as part of the Flexidrill transaction, and this product
continues to exhibit value. However, these products
are no longer considered core to the IMDEX strategy,
and the decision was made to pursue alternative
lost time injury free. Of course, the past is not always
partners to bring them to market, including divestment
a prediction of the future. Our focus in on ensuring
options.
we capture incidents, look after those who may be
affected and embed the lessons learned into our
Mining Production
business.
I am conscious that we set HSE expectations for our
people at a global level. As such, I am humbled by
the ownership our teams around the world have to
ensure we set the highest possible standards of HSE
engagement and outcomes for our people.
Investment in Research & Development
As a mining-technology company, one of our core
capabilities is disciplined research and development.
We have an outstanding network of R&D professionals,
frontline operational leaders, and clients who provide
24
One of the most significant achievements was
the progression of our IMDEX BLAST DOG™ from
engineering prototype to the commercial prototype
phase in the fourth quarter of FY22. This Horizon
3 investment has passed significant milestones in
engineering trials with customers in Australia, North
America, and South America. By moving to commercial
prototype, we move it from Horizon 3 to Horizon 2 and
will build the support structure required to expedite
further trials with the view to commercial contracts.
The development of BLAST DOG™ technology has
been a multi-year, multi-divisional event with some
IMDEX Annual Report 2022 60 people across seven business units being involved
Our acquisition of MINEPORTAL™, an early-stage
in its design development and deployment. Looking
cloud-based 3D visualisation and data processing
forward, we expect to establish IMDEX Mining as
solution, has been instrumental for our BLAST DOG™
a business unit to complement our core Imdex
project by ingesting, visualising, and demonstrating
Exploration & Development business unit.
the value of the rich rock knowledge data to trial
The growth opportunities within the mining production
phase are significant in both market size and the value
of the information we can extract from the orebody
for our customers.
Next generation sensors and software
As exciting as our BLAST DOG™ technology is,
maintaining technical leadership in our core business
is a priority. During FY22 a number of milestones
were achieved in developing sensors and software.
Two notable examples include: our OMNI™ survey
technology, which is once again faster, more accurate,
customers. This unique software enables customers
anywhere in the world to see and understand the value
of the data being extracted from their orebodies.
Finally, our initial 30% investment in Datarock is
progressing to plan. Since making this investment
in December 2021, Datarock has continued to build a
world-class geoscience team and collaboration with
IMDEX, on both defining its product roadmap and
taking complementary solutions to market, is moving
at pace.
Culture and People
and expands the addressable market; and our next
For the first time we have appointed a Chief People
generation IQ-LOGGER™ for recording the structure
Officer (CPO) in Kiah Grafton. Kiah and her team
and texture of core samples.
have played a very active role in a wide range of
IMDEX HUB-IQ™
The value of our IMDEX HUB-IQ™ cloud-based
platform was enhanced during FY22. The
establishment of a user community to guide new
feature development saw a number of upgrades to
the core product, including the release of our first
premium HUB-IQ™ modules that are chargeable on a
subscription basis.
Demand for remote working technology solutions
continued to increase. Customer adoption rates
projects including our brand and values refresh, our
employee value proposition, our employee engagement
program, our diversity and inclusion strategy, and the
development of our talented teams around the world.
We are very proud of our ability to attract the best
talent in our industry; however, it requires constant
reinvestment. Our employee value proposition
incorporates a combination of attractive remuneration
incentives, world-class facilities in which to work,
intrinsic and extrinsic benefits, policies that reflect
working in the modern age and continued learning
were up from 42% to 44% and revenue from HUB-IQ™
programs.
connected sensors increased up 58%.
Acquisitions and Investments
We are particularly pleased with our three latest
investments being aiSIRIS™, MINEPORTAL™ and
Datarock.
aiSIRIS™ continues to meet its post-acquisition
milestones including the development and deployment
of its fully automated module and an increase in
processing volumes of 62%. Our integration of
aiSIRIS™ with HUB-IQ™ remains on track and is
expected to be completed in FY23.
In addition to appointing a CPO, we also recruited
Michael Tomasz as our General Counsel and Co Sec,
and John Hickey as our Chief Technology Officer,
based in San Louis Obispo. Michael and John have
been wonderful members of our Executive Leadership
Committee (XCo) this year, made an immediate
impact and I thank them for choosing us!
Sustainability
Corporate sustainability continues to evolve as a major
theme in our industry, and rightly so. At IMDEX we
look at our ESG risks and opportunities in two parts.
The first being inside our business and the footprint of
25
IMDEX Annual Report 2022 our business practices that we can control. The second
is outside IMDEX, and the impact that we have on
Industry and Market Update
improving the sustainability footprint of our customers
Around our Regions
in the communities in which they operate.
All of our regions experienced growth in FY22. The
The drive towards net zero emissions has never been
challenges within each region varied, however,
stronger. Mining’s role in that journey is more essential
depending on global supply chain pressures, local
today than ever before and is slowly being recognised
governments responses to COVID-19 and the
as such. At IMDEX we have the capability and indeed
availability of rigs and labour to meet demand.
the responsibility, to support the resources industry on
that journey.
Retaining experienced drillers and attracting new
labour into the industry is a challenge consistent
So how do we do that? Our products are methodically
amongst our clients across all regions. This challenge is
assessed for their ESG impact on both our business
exacerbated in regions with higher rig utilisation, being
and our clients’ businesses as it is developed through
north America and Australia, and is evident in the form
our stage gate process. To provide but one example,
of higher wage growth in those jurisdictions. That
the opportunity for our BLAST DOG™ to impact
wage growth needs to be offset by an improvement in
the sustainability footprint of mining companies at
productivity, which remains key to the IMDEX strategy.
multiple levels is significant.
Drillers in North America and Australia, whilst
The core activity in mining is to extract only what ore
continuing to invest in rig fleets maintain that the
is needed and to break it down into its component
largest pressure expected in FY23 will continue to be
minerals as efficiently as possible. BLAST DOG™
attracting, retaining, and training labour in order to
enables mining companies to process far less waste,
optimise drilling programs.
recover substantially more ore and through an accurate
understanding of the orebody, reduce the cost of the
extraction of critical metals. To put this in quantitative
terms, it is estimated that 4% of the world’s electricity
is consumed in the crushing and grinding circuits of
Growth Strategy & Focus Areas
for FY23
resource companies as they seek to extract those
Key components of our strategy include growing our
critical metals. Better orebody knowledge enables
core business in resources-focussed exploration and
better fragmentation through explosive energy, which
development; and expanding our technologies within
may be one tenth of the energy consumed in the
the mining production market, which is substantially
crushing and grinding circuit.
larger and less subject to cyclical impact.
Our four growth drivers include:
1. Technology Leadership – investing in targeted R&D
to maintain technology leadership;
2. Extension into Mining Production – leveraging our
core capabilities within the mining production
market;
3.
Integrated Solutions – designing tailored product
solutions for the optimal determination of
orebody knowledge for clients; and
4. On-Strategy Acquisitions – acquiring technologies
and software to build on geoscience analytics, AI
and computer visualisation capabilities.
26
IMDEX Annual Report 2022
In addition to driving our growth strategy, we will
remain focused on: protecting our people and
developing our team; accelerating investment in IMDEX
My Sincere Thanks to a
Talented Global Team
Mining Technologies and software, including MinePortal
I am most pleased by the progress that our XCo team
and Datarock; building scalable systems, and further
has made in FY22. Our ability to attract world-class
enhancing customer experience with investment in
talent to support our growth, both now and in the
Digital 2.0; and maintaining a disciplined approach to
future, and for us to work together in a purposeful,
our product portfolio and global operations.
challenging, and supportive way has been a highlight.
Outlook
We are transitioning from a period of uncertainty
The value I place in our team’s work effort, intelligence,
and ability to challenge each other makes for the
most rewarding work environment I have ever known.
In turn, their ability to build, align and lead their own
driven by COVID-19 to a period of uncertainty driven by
teams is exemplary, particularly under such challenging
a high inflationary and rising interest rate environment.
conditions.
Our position is that the underlying fundamentals for
our business remain largely unchanged. As a result,
we are looking at the next three to five years as
having relatively low risk, despite some elements of
uncertainty in the market place.
I learnt long ago that the best ideas never originate in
the boardroom, they come from the frontline teams
who use our products and have a front row seat to
witness our customer’s emerging challenges. Our
performance in this industry is critically dependent on
The underlying demand drivers for our industry remain
our ability to listen to our frontline teams.
strong. Whether it is the global commitment toward
net zero emissions and the resultant demand for
critical metals, or the continued extraction of reserves
outstripping their replacement, the demand drivers
are strong.
Our drilling clients report strong forward looking order
Finally, the clear but ambitious strategy that we have
embarked upon would not have been possible without
the support of our Board. Each member invests
significant time in understanding our current business,
our future business and our people. To Anthony and
the rest of the Board on behalf of myself and the XCo
books, and our resource company clients report strong
my sincere thanks.
ongoing exploration budgets.
In the short-term, we anticipate workplace
absenteeism will continue to impact labour availability
for customers and their ability to maximise drilling
shifts. Similarly, whilst we have seen early signs of
supply chain pressures easing, they are expected to
temper activity. Our expectation is that the current
short-term uncertainty will not substantially impact
the industry’s activity, nor its commitment to medium
and long-term development.
For the balance of FY23 we remain committed
to maintaining the strength of our core business;
accelerating our extension into mining production; and
executing Digital 2.0.
IMDEX is well positioned to leverage the robust
industry fundamentals its global presence, leading
technologies and integrated solutions provide.
Paul House
IMDEX Chief Executive Officer
27
IMDEX Annual Report 2022 Executive Leadership
Committee
Mr Paul House
CHIEF EXECUTIVE OFFICER
Mr Paul Evans
CHIEF FINANCIAL OFFICER
Time with IMDEX
Time with IMDEX
Joined as Chief Executive of REFLEX in 2017.
Commenced as Chief Financial Officer and Company
Transitioned to Chief Operating Officer in 2019 and
Secretary in 2006.
commenced as Chief Executive Officer in 2020.
Experience
Experience
>35 years within the mining services, media,
>30 years within the resources and technologies
manufacturing, and telecommunications sectors.
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
Expertise
Finance, governance and management.
Professional Qualifications
Chartered Accountant Australia and New Zealand.
resources geochemistry assay and metallurgy sectors.
Memberships and Associations
Fellow of Chartered Accountants Australia and New
Zealand and Graduate Member of Australian Institute
of Company Directors.
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 and
Graduate Member of Australian Institute of Company
Directors.
29
IMDEX Annual Report 2022 Mr Shaun Southwell
CHIEF OPERATING OFFICER
Time with IMDEX
Joined IMDEX in 2018 as Vice
President Asia Pacific and Global
Supply Chain Manager, transitioned
to Chief Operating Officer in 2020.
Experience
Dr Michelle Carey
Dr Dave Lawie
CHIEF OF PRODUCT
MANAGEMENT
AND MARKETING
Time with IMDEX
Joined following IMDEX’s acquisition
of ioGlobal in 2012. Appointed to
General Manager of IMDEX Product
Development in 2019. Transitioned
CHIEF GEOSCIENTIST
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.
>25 years with Gearhart United – a
to Chief Product and Marketing
Experience
subsidiary of SGS and a leading
designer and manufacturer of
oilfield equipment in Australia.
Officer in 2020.
Experience
Expertise
>25 years in the mining industry. >10
years as a geoscientist in technical
Global positions in exploration
geochemistry and R&D with
Pasminco and Anglo American
before cofounding ioGlobal in 2004.
General management and all
and management roles for tier
Expertise
aspects of supply chain including
one mining companies. >15 years
Geochemistry, geometallurgy,
manufacturing, service, fleet
focusing on mining technology
innovation, analytics and cloud-
management and logistics.
development.
based data management and
The drilling industry and equipment.
Expertise
analysis.
Professional Qualifications
Innovation and product
Leading Organisational Impact
development within the mining
- Melbourne Business School
industry.
Professional Qualifications
PhD in Geosciences and Analytics
from the University of New England.
Executive Program.
30
Professional Qualifications
PhD in Geochemistry from Monash
University.
Memberships and Associations
Member of AusIMM, member
of Advisory Board UWA Data
Memberships and Associations
Institute and member of Centre for
Member of Austmine Board.
Exploration Targeting (CET-UWA)
Member of the Insead Alumni
Technical Working Group.
Association.
Member of Datarock Pty Ltd Board.
IMDEX Annual Report 2022
Mr John Hickey
CHIEF TECHNOLOGY OFFICER
Kiah Grafton
CHIEF OF PEOPLE
Time with IMDEX
Time with IMDEX
Joined in 2022 as Chief Technology
Joined as Human Resources
Officer.
Experience
>30 years in oil and gas formation
evaluation, drilling tool development
and operations with companies
Manager Asia Pacific in 2017.
Transitioned to Global Head of
Human Resources then Executive
General Manager of Human
Resources.
including Teleco Oilfield Services,
Experience
Baker Hughes and APS Technology.
>18 years as a human resources
Expertise
Engineering, R&D, business
development and field operations
globally.
Professional Qualifications
Bachelor of Science in Petroleum
Engineering from Penn State and
Master of Science in Environmental
Management from University of
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
Houston – Clear Lake.
Professional Qualifications
Bachelor of Business, Human
Resources Management &
Management, Edith Cowan
University.
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, Middle East, Japan, and
Europe. Worked for tier one mining
company and one of world’s largest
oilfield services companies.
Expertise
Corporate and commercial law.
Corporate governance and dispute
resolution. Building collaborative
partnerships within the resources
sector.
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
organisational development.
Professional Qualifications
Memberships and Associations
Murdoch University, Bachelor of
Graduate Member of Australian
Science (Geology) from University of
Institute of Company Directors
Western Australia.
and Graduate Member of Chief
Executive Women (CEW) Leaders
Program.
Memberships and Associations
AMPLA (Australian Mining and
Petroleum Lawyers Association)
and ACC Australia (Association of
Corporate Counsel).
31
IMDEX Annual Report 2022 FINANCIAL PERFORMANCE AND STRATEGY
Financial Summary
REVENUE
Revenue
14%
5 YEAR
CAGR**
(Comparable S&P
CAGR 9%**)
218.5
243.7
237.7
264.4
341.8
42.4+
EBITDA
27%++
The clear highlights
in FY22 are the
5 YEAR
record revenues,
CAGR
record earnings,
and continued
EBITDA margin
expansion.
104.9*^
75.5*^
52.3+
54.4*
Paul House, Chief Executive Officer
EBITDA
MARGIN%
22.2++
23.9++
22.9
28.5
30.7
$m
FY18
Around Our Grounds
FY22 REVENUE GROWTH BY REGION ON PCP
FY19
FY22
FY20
FY18
FY21
$m
FY20
FY19
FY21
FY22
%
FY18
NORTH AMERICA
FY19
Strong client activity and demand, notably in Canada
High rig utilisation and labour constraints
FY22
FY21
FY20
SOUTH AMERICA
Increasing client activity and strong demand for fluids
AFRICA
Increasing client activity and increasing demand for fluids
EUROPE
Steady client activity, minimal impact from Russian
market withdrawal (market is <1% of IMDEX revenue)
AUSTRALIA
Strong client activity and demand, some project start-up delays
High rig utilisation and labour constraints
ASIA
Steady client activity and demand
39%
FY22 Revenue
Growth by
region on PCP
21%
22%
NORTH AMERICA
AFRICA
AUSTRALIA
Clients are well funded driving
Increasing client activity in 4Q22.
Clients are well funded driving strong
the strong growth trajectory. Rig
utilisation and labour shortages
impacting their operations. Strong
demand for IMDEX solution selling.
SOUTH AMERICA
Activity increased in 2H22 with
strong demand for IMDEXsolutions,
particularly fluids.
32
EUROPE
Steady client activity, minimal
impact from Russian market
withdrawal.
growth trajectory. Rig utilisation and
labour shortages impacting their
operations.
ASIA
Steady client activity and demand,
increasing in 2H22.
IMDEX Annual Report 2022 REVENUE
REVENUE
EBITDA
EBITDA
EBITDA
14%
14%
5 YEAR
CAGR**
5 YEAR
CAGR**
EBITDA
MARGIN%
EBITDA
MARGIN%
EBITDA Margin %
27%++
27%++
5 YEAR
CAGR
5 YEAR
CAGR
(Comparable S&P
CAGR 9%**)
(Comparable S&P
CAGR 9%**)
218.5
218.5
243.7
243.7
237.7
264.4
237.7
264.4
341.8
341.8
42.4+
42.4+
52.3+
52.3+
54.4*
75.5*^
54.4*
104.9*^
75.5*^
104.9*^
22.2++
22.2++
23.9++
23.9++
22.9
28.5
22.9
28.5
30.7
30.7
$m
$m
FY18
FY18
FY19
FY19
FY20
FY20
FY21
FY21
FY22
FY22
$m
$m
FY18
FY18
FY19
FY19
FY20
FY20
FY21
FY21
FY22
FY22
%
%
FY18
FY18
FY19
FY19
FY20
FY20
FY21
FY21
FY22
FY22
•
•
Strong fixed cost leverage
•
Trend of increasing margins
Increasing revenue from higher margin
sensors and software business
Strong Cash Generation
Operations
104.9
120
100
40
20
40
20
38.6
2.7
55.5
13.5
•
•
$m
EBITDA
Working
Capital
Tax-Related
Items
Other
Cash from
Operations
Expected growth
Mitigation of Supply Chain Risk ~20%
WORKING
CAPITAL
Increase in working
capital to support
client demand and
mitigate supply chain
risks
Inventory volumes
increased throughout
1H22, peaked in 3Q22
and started to ease
$m
in 4Q22
XX
XX
XX
XX
XX
XX
* Including AASB 16
+ Excluding AASB 16
^ Stated before a net expense of $2.9m, being an impairment loss on COREVIBE IP, inventory and associated fixed assets of $14.1 m
offset by the related $11.2m estimated deferred consideration no longer payable (FY21 - $2.9m gain on deferred consideration fair value
adjustment for Flexidrill and AusSpec).
** IMDEX uses S&P Market Intelligence global exploration expenditure for nonferrous metals as an industry benchmark for growth
++ Notionally adjusted for inclusion of the impact of AASB 16
33
IMDEX Annual Report 2022 Commitment to R&D and
Technology Leadership
Commitment to R&D and Technology Leadership
DISCIPLINED
R&D SPEND ($m)
Total R&D Spend* ($m)
)
m
$
(
d
n
e
p
S
D
&
R
30
25
20
15
10
5
-
6.8%
7.6%
8.5%
8.6%
FY19
FY20
FY21
FY22
Expensed R&D and capitalised software
development costs as a % of revenue
Horizon 1
Horizon 2
Horizon 3
* Total R&D spend includes expensed R&D plus capitalised software development costs
(FY22 $3.2m, FY21 $2.1m and FY20 $0.7m).
DISCIPLINED R&D
CAPITAL ALLOCATION
HORIZON 1 - Developing the next generation of our existing
product suite to maintain and grow our core market (impacting
revenues in current year)
HORIZON 2 – Developing new products supporting and adjacent
to our core (impacting revenues in 2 – 3 years)
HORIZON 3 – Developing transformational technologies for new
and existing markets (impacting revenues in 3 – 5 years)
DISCIPLINED STAGE GATE
DEVELOPMENT PROCESS
0
CONCEPT
1
PROJECT
PLANNING
2
3
ENGINEERING
PROTOTYPE
COMMERCIAL
PROTOTYPE
PILOT
PRODUCTION
4
PRODUCTION
END OF LIFE
5
6
34
IMDEX Annual Report 2022
Commitment to R&D and Technology Leadership
Commitment to R&D and Technology Leadership
DISCIPLINED
DISCIPLINED
R&D SPEND ($m)
R&D SPEND ($m)
)
m
)
$
(
m
d
$
(
n
e
d
p
n
S
e
p
S
D
&
D
R
&
R
30
30
25
25
20
20
15
15
10
10
5
5
-
-
6.8%
6.8%
7.6%
7.6%
8.5%
8.5%
8.6%
8.6%
FY19
FY19
FY20
FY20
FY21
FY21
Expensed R&D and capitalised software
development costs as a % of revenue
Expensed R&D and capitalised software
development costs as a % of revenue
FY22
FY22
Horizon 1
Horizon 1
Horizon 2
Horizon 2
Horizon 3
Horizon 3
DISCIPLINED R&D
DISCIPLINED R&D
CAPITAL ALLOCATION
CAPITAL ALLOCATION
Disciplined R&D Capital Allocation
HORIZON 1 - Developing the next generation of our existing
product suite to maintain and grow our core market (impacting
HORIZON 1 - Developing the next generation of our existing
revenues in current year)
product suite to maintain and grow our core market (impacting
revenues in current year)
HORIZON 2 – Developing new products supporting and adjacent
to our core (impacting revenues in 2 – 3 years)
HORIZON 2 – Developing new products supporting and adjacent
to our core (impacting revenues in 2 – 3 years)
HORIZON 3 – Developing transformational technologies for new
and existing markets (impacting revenues in 3 – 5 years)
HORIZON 3 – Developing transformational technologies for new
and existing markets (impacting revenues in 3 – 5 years)
DISCIPLINED STAGE GATE
DISCIPLINED STAGE GATE
DEVELOPMENT PROCESS
Disciplined Stage Gate Develpment Process
DEVELOPMENT PROCESS
0
0
CONCEPT
CONCEPT
1
PROJECT
1
PLANNING
PROJECT
PLANNING
2
3
ENGINEERING
2
PROTOTYPE
ENGINEERING
PROTOTYPE
COMMERCIAL
3
PROTOTYPE
COMMERCIAL
PROTOTYPE
PILOT
PRODUCTION
PILOT
4
PRODUCTION
4
PRODUCTION
PRODUCTION
5
END OF LIFE
END OF LIFE
6
5
6
35
IMDEX Annual Report 2022
Balance sheet
$m (Unless indicated otherwise)
30 JUNE 2022 30 JUNE 2021
Cash
Receivables
Inventory
Fixed assets 1
Intangibles 2
Investment in an associate 3
Other assets / deferred tax
TOTAL ASSETS
Payables
Borrowings
Other liabilities, provisions and current tax 4
TOTAL EQUITY
ROE
ROCE
36.4
73.3
57.1
83.7
97.8
5.0
40.3
393.6
34.7
12.2
49.5
297.2
16.2%
19.3%
58.5
58.2
41.5
78.6
92.9
0
36.4
366.1
37.9
11.1
64.0
253.1
13.3%
15.5%
16.2%
RETURN ON
EQUITY
19.3%
RETURN ON
CAPITAL
EMPLOYED
3.4CPS
FULL YEAR
DIVIDEND IN LINE
WITH HISTORICAL
30% PAYOUT
RATIO
CONTINUED
INVESTMENT
IN LEADING
TECHNOLOGIES
1 Includes leases assets of $28.2m in June 2022 ($33.0m June 2021).
2 Includes intangibles of $16.2m arising from the acquisition of MinePortal™.
3 30% initial interest in Datarock Holdings
4 Includes lease liabilities of $34.6m ($38.9m June 2021) and deferred consideration for the purchase of AusSpec $1.5m and Flexidrill $1.4m
(FY21: AusSpec $2.5m and Flexidrill $12.2m)
36
IMDEX Annual Report 2022 Summary of Financial Highlights for the Year Ended 30 June 2022
(Audited Results)
Revenue from continuing operations (excluding interest income)
341,843
264,375
FY22
$’000
FY21
$’000
Earnings/(Loss) before impairment, interest, tax, depreciation & amortisation
(EBITDA) from continuing operations 1
EBITDA margin
Depreciation of Property, plant and equipment
Depreciation of Right-of-Use assets
Amortisation of Intangible Assets
Impairment loss net of related fair value adjustment
Earnings before Interest & Tax (EBIT)
Net interest expense
Net profit before tax
Income tax expense
104,858
75,501
30.7%
28.6%
(25,170)
(20,281)
(6,178)
(6,008)
(4,861)
(4,494)
(2,871)
2,917
65,778
47,635
(3,212)
(3,104)
62,566
44,531
(17,855)
(12,864)
Net Profit after Tax from continuing operations
44,711
31,667
Basic earnings per share from continuing and discontinued operations (cents)
11.28
8.01
Net Cash provided by Operating Activities
Cash on hand
Net Assets
Total Borrowings
Net Tangible Assets per Share
55,535
56,898
36,368
58,477
297,226
253,051
12,166
11,128
50.30
40.39
1 Stated before a net expense of $2.9m, being an impairment loss on COREVIBE IP, inventory and associated fixed assets of $14.1m offset by the
related $11.2m estimated deferred consideration no longer payable (FY21 - $2.9m gain on deferred consideration fair value adjustment for Flexidrill
and AusSpec).
37
IMDEX Annual Report 2022
The key features of our business model have
ensured that we can respond to the emerging
challenges in our marketplace, continue to
support customers and continue to invest in
our strategy. The end result is a reflection of
our objective to outperform industry market
growth in all conditions.
Paul House, Chief Executive Officer
Quality Revenue Model
Sensors & Software
44%
58%
10%
20%
•
Increasing revenue from
sensors and software
• Higher margins and quality
recurring revenue
27%
24%
34%
29%
10%
15%
30%
7%
8%
35%
56%
42%
SALES
90%
80%
39%
47%
45%
50%
RENTAL AND SAAS
FY17
FY22
FY17
FY22
FY17
FY22
FY17
FY22
Americas
10%
20%
27%
24%
•
Increasing revenue from the Americas
7%
8%
10%
15%
44%
58%
• Americas 5-year revenue CAGR 18.5%
34%
29%
30%
35%
56%
42%
90%
80%
39%
47%
AMERICAS
APAC
45%
EUROPE/
AFRICA
50%
FY17
FY22
FY17
FY22
FY17
FY22
FY17
FY22
44%
58%
10%
20%
Broad Commodity Exposure^
27%
24%
34%
29%
10%
15%
30%
7%
8%
35%
•
Product offering is commodity agnostic
• Critical metals are growing at a faster rate
56%
42%
90%
80%
39%
47%
45%
50%
GOLD
IRON ORE
CRITICAL METALS
OTHER
FY17
FY22
FY17
FY22
FY17
FY22
FY17
FY22
^ Estimates only. IMDEX exposure is in line with exploration spend
39
IMDEX Annual Report 2022 Growth Strategy
We have a clear and consistent
To deliver this growth strategy we invest in:
growth strategy. Key components
•
Targeted R&D to maintain technology leadership and win
include:
market share;
• Growing our core business in resources-
•
Leveraging our core capabilities within the mining production
focused exploration and development;
market;
and
• Developing and marketing integrated solutions for orebodies
•
Expanding our technologies within the
to optimise value for clients and revenue for IMDEX; and
adjacent mining production market,
which is at least two times larger and
less subject to cyclical impact.
• Acquiring technologies and software, to build on geoscience
analytics, AI and computer visualisation capabilities that
deliver answer products for clients.
Four Compelling Drivers
1. TECHNOLOGY LEADERSHIP
Targeted R&D to win market share
W
E
N
NEW PRODUCTS,
SENSORS AND
SOFTWARE
NEW PRODUCTS,
SENSORS AND
SOFTWARE
2. EXTENSION INTO MINING PRODUCTION
Leverage into adjacent market where it is the same ore body
and the same client
3. IMDEX INTERGRATED SOLUTION SALES
Optimised solutions for for orebodies to maximise client value
and IMDEX revenue earned
4. COMPLEMENTARY AQUISITIONS
Emerging or established technologies and software that are on
strategy and complement existing revenue
I
S
E
G
O
L
O
N
H
C
E
T
/
S
T
C
U
D
O
R
P
40
I
G
N
T
S
X
E
I
Opportunity to
expand existing
revenue
Larger TAM
Less cyclical
CORE BUSINESS
NEXT GENERATION
PRODUCTS, SENSORS
AND SOFTWARE
MARKET
EXPANSION
OF CORE
BUSINESS
EXPLORATION
& DEVELOPMENT
MINING
PRODUCTION
MARKETS
IMDEX Annual Report 2022
STRATEGY DRIVERS
MEASURES OF SUCCESS
Technology
Leadership
Extension into Mining
Production
IMDEX Integrated
Solution Sales
•
•
•
•
Released next generation IMDEX OMNI™ sensor and IQ-LOGGER™ core
technologies
Released chargeable IMDEX HUB-IQ™ SaaS module for Quality Assurance
survey data
Released next generation aiSIRIS™ software – client utilisation increased
and the volume of spectra analysed was up 62%
Progressed IMDEX BLAST DOG™ from engineering prototype to commercial
prototype phase - on track for commercial revenues in FY23
•
44% of top 250 clients with >3 products up from 39.2%
On Strategy
Acquisitions
• Acquired MINEPORTAL™ 3D visualisation software to accelerate
IMDEX BLAST DOG™ for mining production
•
Invested in Datarock Holdings Pty Ltd, which develops image machine learning
and artificial intelligence software to extract value from geoscientific images
Key Focus Areas for FY23
Protecting our people and developing our
team
Increasing investment in IMDEX Mining
Technologies and software to accelerate
growth and build scale
Investment in Digital 2.0 to optimise cost
base, build scalable systems and further
enhance customer experience
Investing in our core business and
maintaining a disciplined approach to our
product portfolio and global operations
CORPORATE
Risk
Risk Management
Regulatory Compliance
Strengthening our COVID-19 preparedness was a
During the year we undertook initiatives to lift
particular focus throughout the year. Pleasingly,
compliance awareness and performance across our
we successfully minimised the impacts on business
global operations.
continuity across all IMDEX businesses. Changes in the
global COVID-19 risk profile will allow us to transition
this area of risk management back into business-as-
usual processes.
We operate in dozens of different legal jurisdictions
and manage a complex portfolio of compliance
requirements. Particular focus was placed on
international trade compliance and product compliance,
New product introduction and management of strategic
with significant effort being devoted to providing
business risks will continue to be our main focus in FY23.
education and awareness for business stakeholders on
We will also be expanding and enhancing our use of risk
how to manage these compliance obligations.
management technology to ensure that risks can be
identified, mitigated, and monitored as part of our core
business.
Regulatory compliance has become embedded in
business practice, allowing this function to provide
greater value such as in support of strategy and
A dedicated insurance function was created this
investment decisions.
year, allowing for better coordination of insurance
requirements. This function ensures that our insurance
program remains risk-based, value-for-money, and
focused on strategic and emerging opportunities.
The FY22 internal audit program was an area of
significant maturing for the business. Bringing
the internal audit function into the IMDEX Risk
& Compliance Team enabled us to unlock greater
value from the internal audit program and improve
engagement with assurance within the business.
This year has also provided opportunities to strengthen
engagement with our regulators and shape a shared
understanding of how compliance requirements interact
with our business.
Modern Slavery
We were pleased to upgrade our Modern Slavery
statement throughout the year to continue our focus on
this important compliance area. To support our aims,
we undertook the following:
•
Reviewed our third party due diligence process,
which has resulted in the decision to move providers
and broaden both our customer and supplier due
diligence process;
• Updated our Supplier Code of Conduct to
emphases our obligation to comply with human
rights obligations under the Universal Declaration of
Human Rights and modern slavery acts; and
• Updated our purchase order conditions to have a
positive obligation on modern slavery compliance.
Our FY21 Modern Slavery Statement can be found on our website at the following link:
https://www.imdexlimited.com/media/home/IMDEX_ModernSlavery_2021_FINAL.pdf
Our FY22 Modern Slavery Statement will be released in November 2022
43
IMDEX Annual Report 2022 Quality, Health, Safety and
Environmental Objective
Our goal is to establish a strong QHSE culture to achieve zero harm. At the same time we
continuously improve operational and product quality, safety and efficiency.
FY22 Key Safety Initiatives & Achievements
FY22 Key Performance Indicators
FY22 Outcomes
Reduce Lost Time Incident Frequency Rate (LTIFR)
to < 1.71
FY22 LTIFR 0.77
Reduce Total Recordable Incident Frequency Rate (TRIFR)
to < 3.42
FY22 TRIFR 2.32
Increase global HSE Engagement by 20%
(Target: Engagement rate increase from 15 engagement
activities per person to 18)
Establish assurance plan,
achieve >80% compliance with assurance plan
Establish and implement HSE training plan globally
Global HSE engagement improved by
149%.
(From average 15 engagement
activities per person in FY21 to
average 37.4 engagement activities per
person in FY22).
Assurance plan was established.
82% of scheduled assurance activities
were completed.
11 mandatory HSE training modules
were established in IMDEX Academy
and assigned.
45
IMDEX Annual Report 2022 9
8
7
6
5
4
3
2
1
0
2.75
1.83
1
2
G
U
A
2.59
1.72
1
2
T
C
O
1
2
P
E
S
1
2
L
U
J
3.42
3.34
3.16
3.12
2.32
1.71
1
2
C
E
D
1.65
2
2
B
E
F
2
2
N
A
J
1
2
V
O
N
0.78
0.77
2
2
R
P
A
2
2
Y
A
M
2
2
N
U
J
2
2
R
A
M
FIRST AID
MEDICAL TREATMENT
LOST TIME
RESTRICTED DUTIES
LTIFR
TRIFR
LTIFR IMDEX BENCHMARK (TARGET)
TRIFR IMDEX BENCHMARK (TARGET)
Improved Safety Performance
IMDEX Lost time & Total Recordable Injuries Frequency Rate (LTIFR & TRIFR)
2.75
2.65
1.83
1.77
2.59
1.72
3.43
4.02
3.42
3.34
3.31
3.16
3.12
1.72
1.71
1.67
1.65
1.61
0.79
0.78
2.32
0.77
1
2
L
U
J
1
2
G
U
A
1
2
P
E
S
1
2
T
C
O
1
2
V
O
N
FIRST AID
MEDICAL TREATMENT
LOST TIME
RESTRICTED DUTIES
1
2
C
E
D
LTIFR
TRIFR
2
2
N
A
J
2
2
B
E
F
2
2
R
A
M
2
2
R
P
A
2
2
Y
A
M
LTIFR IMDEX BENCHMARK (TARGET)
TRIFR IMDEX BENCHMARK (TARGET)
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
46
IMDEX Annual Report 2022
Data Security
During FY22 we continued our focus
on improving visibility in the network,
fortifying our DevSecOps program and
embedding the TOGAF Architecture
Development Methodology.
Notable achievements during the period included:
• Development and implementation of a
standardised data classification scheme;
ISO/IEC 27001:2013
Certification
We maintain 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 compliant with mandatory
• Deploying an industry leading Data Loss Prevention
requirements, have systematic processes for managing
system to address the risk associated with data
information security risks, and have implemented
exfiltration;
controls mandated by the standard.
• Cementing the DevSecOps program through
Our certification comprises a comprehensive range of
continuous secure software development training
activities including:
made available on our IMDEX Academy platform;
and
•
Exchanging contracts for an industry leading
Cloud Access Security Broker to reduce the risks
associated with “as a service” cloud application.
Key focus areas in FY23 include:
• Growing ISO/IEC 27001 certification audit to
incorporate aiSIRIS which emerged from the IMDEX
acquisition of AusSpec; and
• Deploying the Cloud Access Security Broker across
key services.
The Open Group Architecture
Framework
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 ensure that software
developed for consumption by customers is
safe and secure.
•
•
Software development processes;
The product development life cycle for real-time
subsurface intelligent solutions;
• Manufacturing and deployment of products and
technologies;
• Client support processes; and
•
Information technology systems that support
these activities and digital functions.
This investment provides additional assurance to
our clients regarding the end-to-end security of the
information they provide, such as when ordering and
despatching via our Global Digital Rentals platform,
transferring critical data with our award-winning cloud
solution IMDEX HUB-IQ™ and support data collection
via our 24/7 Customer Care portal.
47
IMDEX Annual Report 2022 The value I place in our team’s work effort, intelligence,
and ability to challenge each other makes for the most
rewarding work environment I have ever known. In turn,
their ability to build, align and lead their own teams
is exemplary, particularly under such challenging
conditions.
- Paul House, Chief Executive Officer
People and Culture
During FY22, our global workforce increased by 101 to 622 fulltime employees. This 19.4%
uplift was largely to support strategic growth areas including the IMDEX Mining Technology
business unit, software and engineering capabilities and customer care (IT support).
Additional sales and marketing personal were also engaged to support increased market
activity and demand for our product portfolio.
The average workforce turnover of 18% was up from 16% in FY21. The increase can be largely attributed to
talent shortages, high demand for mining and technology capabilities and the global impact from the Great
Resignation.
These market pressures increased the cost-for-talent; however, we have deployed a range of tactics to address
changing needs. Initiatives included: proactively developing recruitment pipelines, hiring from adjacent
industries, building on our strong Employee Value Proposition (EVP) and providing hybrid working opportunities.
Cultural Transformation
Diversity and Inclusion
During FY22, we refreshed our brand and corporate
Over the past 12 months we have made substantial
values. This highly collaborative process involved more
progress with a range of initiatives including flexible
than 350 employees globally to reflect who we are as a
working and closing our gender pay-gap, together with
company today and our mission for success, together
new policies and benefits to support our inclusive
with the mindset and core behaviours that will shape
culture. An example is the introduction of our Domestic
our future tomorrow.
As part of this cultural journey, a second employee
engagement survey was run to measure our progress
since 2021. This highlighted a significantly positive
Violence Policy that provides employees with access to
temporary housing, additional leave and legal advice.
The support for affected employees and their families
at a stressful time makes a meaningful difference.
increase in overall employee engagement, together with
We reviewed our IMDEX Women-EQ program and
a meaningful increase in the percentage of engaged
created our GEDx Committee. The vision of this global
employees.
Leaders in all of our global regions facilitated 54
engagement action planning workshops with their
Committee is to promote gender equity and diversity
in a welcoming environment that supports the dynamic
and innovative nature of our people.
teams. These workshops focused on:
Our Diversity Strategy during FY22 has facilitated the
•
Team alignment including creating a culture of
accountability;
• Capability development and ensuring career
pathways exist for our employees; and
• Creating a greater sense of belonging through
successful operation of our teams and growth of our
business in a range of cultures. It has supported us
to build relationships with diverse regional clients and
prospective clients. Implementing inclusion training
is key to employee building awareness of the cultural
sensitivities we need to best support our clients
defined teamwork opportunities.
globally.
Our Diversity Policy can be found on our website at the following link:
https://www.imdexlimited.com/about-us/corporate-governance
49
IMDEX Annual Report 2022 Employee Wellbeing
Functional Maturity
With sustained focus on employee wellbeing, we
A review was conducted across functions to determine
continued to monitor morale and resilience during key
the maturity of capability in our teams, systems and
change periods and pandemic waves. Customised
processes. This review informed the relative strength
training was provided to our twenty Peer Supporters
of each function across the business and strategic
who are tasked with promoting and maintaining
planning and capability investments for FY23.
wellbeing conversations within our teams. A range of
activities were provided, including the celebration of
Mental Health and Safety month in October, with a
theme of resilience.
Capability Development
Key organisational capabilities were identified to
sustain our growth as a mining technology company. We
continued to strengthen our core business, including
shaping team structures and operating models,
targeted M&A activity and acquiring new talents. Our
new people capability initiatives were also introduced
including our Kickstart a Career @ IMDEX program,
which aligns with our Game-Changer and Together
Values.
Based on survey results, each function created an
action plan to address gaps within teams, or in
partnership with other teams. As an example, our HR
team was restructured, and key changes were made to
the way we work. Collectively, this work has provided
a clear pathway regarding how the function will better
support our growing business, both now and into the
future.
Remuneration
IMDEX is committed to attracting and retaining the
right people. We do this by rewarding employees
appropriately for the work they perform, and ensuring
they are incentivised to deliver sustainable and superior
business performance. As our Company has grown, we
During FY22 traineeships were included in our Kickstart
have continued to evolve our remuneration offerings.
a Career @ IMDEX program. Two trainees have
Key changes during FY22 are set out below.
commenced in our manufacturing team in Western
Australia. Fourteen internships were provided across
Long Term Incentive (LTI)
a range of disciplines and five secured permanent roles
The extent of Executive and Senior Manager
within our team.
We successfully implemented several development
programs including Leading IMDEX into the FuTure
(LIFT) and XSell Sales development. Our ongoing
IMDEX Academy training program also expanded
with more structured learning design protocols, for
both product and non-product training, and increased
analytics.
50
participation has been aligned with market practice,
as well as introducing the opportunity for key and
emerging talent to participate. The increased target
opportunity for wealth creation supports the alignment
of leadership behaviours and long-term decision making
with shareholder return.
Performance measures have been simplified for
investor clarity and are less volatile against changing
market conditions. The introduction of the strategic
milestones aims to focus on the execution of strategic
initiatives and provide greater line of sight between
management and company performance.
Short Term Incentive (STI)
We have introduced the opportunity for employees
to defer their cash incentive for an annual deferral
of performance rights. If an employee elects to
participate, the performance rights will also be
matched by our Company on a one-for-one basis. This
IMDEX Annual Report 2022 encourages IMDEX share ownership across all levels
of the organisation to further promote employee
A look forward for FY23
engagement and encourages employee retention.
During FY23 we will remain focused on sustaining
Base Salary
We have a commitment to fair pay across our
competitive employment to support our growth
strategy. Concurrently, we will continue to evolve as a
more distinctive employer with unique advances, EVP
organisation. We are committed to resolving any gaps
and ways of working.
between teams or peers performing equivalent roles
and bringing all employees in line with benchmarks. Our
overall gender pay gap reduced from 30% down to 13%
during FY22. When comparing gender pay for equivalent
roles, this further reduces our current state to 4%.
Benefits
We engaged Willis Towers Watson (WTW) to conduct
a global benefits review. Virtual focus groups were
run in late FY22 to understand employee preferences.
WTW has also commenced market analysis to identify
insights into EVP options and opportunities being
offered in the market, particularly post-pandemic.
These insights will shape our benefits and programs in
FY23 and beyond.
Recognition
Our IMDEX High5 Award Program was designed
and launched to enable peers to spontaneously
acknowledge peers who demonstrate core behaviours
aligned to our IMDEX Values. This Award has been well
supported and has highlighted employees who have
gone above and beyond, have worked safely and who
have been active and responsive listeners.
Our IMDEX Impact Award Program recognises
employees who demonstrated extraordinary
achievements within our business. From around 70
nominations globally in FY22, over 20 recipients were
tangibly rewarded for their substantial positive impact.
Some immediate changes to bolster our EVP include
a judicious, staged expansion of hybrid working2
practices. As needed, we will employ in-demand skills
via virtual work models or in alternate IMDEX locations
in order to secure high calibre candidates. This
approach was successfully utilised for some technology
roles in FY22.
During FY23 we will continue to strengthen and expand
commercial, marketing and technology functions.
In addition, we expect to strengthen our people
capabilities including solutions consulting, client
relationship management and analysis of market and
competitors.
On a macro-level, we are positioned to scale as needed
with any fluctuation in resource sector pricing and
investments during FY23. We are ready to take a more
adaptive approach to workforce and change strategies
as required, setting clear strategy but flexing programs
quarter-by-quarter to match the industry environment.
1 Top business concerns for Australian employers,
particularly for IT and Engineering,
2 Office-based teams in mining were over 90% onsite pre-
pandemic and have reduced to 30-40% post-pandemic,
51
IMDEX Annual Report 2022
IMDEX Values
Forever
curious.
We go
beyond.
We believe in shaping the
future of mining through the
We are passionate about creating
positive customer experiences
relentless pursuit of technologies
that deliver successful outcomes
and services that question
the status quo, address our
for our customers now and into the
future. We achieve this by working
customers’ challenges and set
in partnership with our customers,
new benchmarks for what can be
achieved in our industry.
actively listening to their needs
and delivering genuine value
through efficient solutions.
We listen to our people and customers
to develop new technologies.
We step up and challenge the status
quo.
We give our people the space to be
curious and create.
We are informed by industry trends to
be open to new ideas.
We optimise our customers’ experience.
We place our customers’ needs first and
foremost, delivering on our promises.
We encourage customer ownership and
involvement.
We create value for our customers
through collaboration and innovation.
Together
we thrive.
We’re
global game
changers.
We are a global team of diverse
Our rich global experience
and talented people, who
and diverse thinking drives all
empower each other to be our best
development within IMDEX.
selves. We harness our strengths
It enables us to solve unique
by combining our knowledge
problems for global customers
across boundaries in a positive
reducing environmental and social
and accountable workplace.
impacts to shape a better global
industry.
We reduce the environmental
impact of our activities to shape a
better global industry.
We embrace flexible thinking for the
benefit of our people, customers and
the societies in which we operate.
We serve our customers globally by
leveraging our diverse teams and
enabling inclusive decision making.
We connect our expertise to customers
to add values.
We hold each other accountable and take
ownership for our actions.
We advocate for the safety and wellbeing
of our people in everything we do.
We recognise and acknowledge each
other’s successes.
We back each other as a united team, by
sharing learnings and expertise between
departments and across borders.
Sustainability
We are committed to enhancing our ESG related disclosure and delivering solutions that
support the sustainability of our clients’ operations.
At IMDEX we consider our ESG risks and opportunities through two distinct lenses:
•
Inside our business and the practices that we can control to ensure we are setting the right targets and
continuously improving for our people and our planet.
• Outside IMDEX and how we can leverage our research and development capabilities to improve the
sustainability of our customers operations and the communities in which they operate.
Our ESG objectives and material topics are set out in the table below. Further details regarding our FY22
achievements, together with our targets and initiatives for FY23 will be provided in our FY22 Sustainability
Report, which will be released in September 2022.
Our Sustainability Policy can be found on our website at the following link:
https://www.imdexlimited.com/media/home/IMDEX-Sustainability-Policy_2021_v1.pdf
IMDEX ESG Focus Areas and Material Topics
OUR COMMITMENT
WHAT IS MOST IMPORTANT AT IMDEX
IMDEX LEAD
Drive the Sustainability of the
Global Minerals Industry
Innovation
Technology Solutions, Thought
Chief of Product
Leadership & Associations
Management &
Michelle Carey
Ensure a Safe and Inclusive
Global Workplace
Health, Safety & Wellbeing, Diversity,
People
Inclusion & Cross Culture, People &
Culture
Marketing
Kiah Grafton
Chief of People
Contribute to a Low Emissions
Future
Climate Resilience, Operational
Shaun Southwell
Environment
Emissions, Water & Effluents, Land
Chief Operating
Disturbance & Rehabilitation
Officer
Support Economic Development
and Our Local Communities
Society
Sustainable Earnings Growth,
Local Support & Engagement
Paul Evans
Chief Financial
Officer
Uphold Ethical and Sustainable
Business Practices
Corporate Governance & Risk Human
Michael Tomasz
Governance
Rights & Modern Slavery Privacy &
General Counsel &
Data Security
Co. Secretary
55
IMDEX Annual Report 2022 I am delighted with the continued
achievement of the Company.
Each of you has worked tirelessly
through another challenging
year, and your commitment to our
purpose and vision as a global
mining-tech company has been
outstanding.
Anthony Wooles, Non-Executive Chairman
GOVERNANCE
Board of Directors
Our Board has extensive professional
Key priorities for the Board during FY22 included:
expertise, business experience and
•
Enhancing safety performance
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.
• Underlying business performance and growth
•
Rigorous strategy development
• Governance and enhancing ESG disclosure
During FY23 the Board will remain focused on these
priorities, together with disciplined cost management,
execution of our strategy and achieving performance
milestones.
Mr Ivan Gustavino
Ms Sally-Anne Layman
Mr Anthony Wooles
Ms Trace Arlaud
Mr Kevin Dundo
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Director
Director
Chairman
Director
Director
Appointed
3 July 2015
Appointed
6 February 2017
Appointed
1 July 2016
Appointed
Appointed
Februrary 2021
14 January 2004
Expertise:
Expertise:
Expertise:
Expertise:
Expertise:
Strategic growth and
Exploration, mining
Financial and
Mining engineering,
Corporate and
transactions within
and finance
capital markets and
geology and
commercial Law
the technology
sector
strategic marketing
geophysics
57
IMDEX Annual Report 2022 58
IMDEX Annual Report 2022 Corporate Governance
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 FY22 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
procurement practices. Our aim is to partner with
the standard of conduct expected of everyone who
likeminded suppliers to help us deliver leading solutions
works for or on behalf of the Company.
that enhance our clients’ operations. To achieve this,
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 Committee and is reviewed and updated
regularly to support the growth of our business.
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; and
•
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
59
IMDEX Annual Report 2022 Conflicts of Interest
Certification
At IMDEX we have a Managing Conflicts of Interest
Procedure that applies to all IMDEX employees,
contractors and consultants. The purpose of this
Speak-up Policy
Our Speak-Up Policy supports our Code of Conduct and
is designed to ensure that:
• We maintain the highest standards of corporate
governance and ethical conduct across all our
procedure is to:
operations; and
• Assist employees to identify actual, potential or
• Our Company is a safe, respectful, and inclusive
perceived conflicts of interest (together Conflicts);
place to work.
• Guide employees on their obligations; and
•
Set out the process for disclosing and managing
conflicts.
To safeguard the ongoing ethical and compliant
operation of our global business, all employees
are required to complete a Conflicts of Interest
Certification annually. This involves employees
completing a Conflict of Interest declaration and
updating this declaration if their circumstances change.
This process ensures that any conflicts are identified,
disclosed and managed appropriately.
All employees are encouraged to ask questions, query,
and report actual or suspected violations of our Code
of Conduct or other IMDEX Polices without fear of
retribution.
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, Speeki®. Speeki® 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; and
• 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
60
IMDEX Annual Report 2022 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 FY22 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
During FY23 IMDEX’s ESG Committee will become a sub-committee of the Audit, Risk & Compliance Committee.
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
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 2022.
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 (ASX: HPR) (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 (ASX: PLS) (2018 – current), Beach
Energy Limited (ASX: BPT) (2019 – current) and Newcrest Mining Ltd (ASX: NCM)
(2020 – current)
•
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 (ASX: RED) (2010 – current) and Avenira
Limited (ASX: AEV) (2019 – current)
Mr. I. Gustavino
Independent,
Non-Executive
Director
Ms. T. Arlaud
Independent,
Non-Executive
Director
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 CV Check Limited (ASX: CV1) (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 (TSX: GLO) (2020 – current)
and Seabridge Gold (TSX: SEA, NYSE:SA) (2021 – current)
•
•
•
•
•
62
Classification | Public
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
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
Mr. A. Wooles
Mr. K. Dundo
Mr. I. Gustavino
Ms. S. Layman
Ms. T. Arlaud
6
6
6
6
6
6
6
6
6
6
5
5
N/A
5
N/A
5
5
N/A
5
N/A
3
3
3
N/A
N/A
3
3
3
N/A
N/A
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 Chartered
Accountants Australia and New Zealand. Mr Evans resigned as joint Company Secretary of IMDEX effective from 22 October 2021.
Mr. M. Tomasz
Mr. Tomasz joined IMDEX in May 2021 and was appointed as Company Secretary effective from 24 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 FY22 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 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.
Classification | Public
63
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
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 2022:
(i)
(ii)
(iii)
(iv)
fully-franked final dividend of 1.4 cents (2020: 0.7 cents) per share paid on 12 October 2021;
fully-franked special dividend of 0.4 cents (2020: 2.0 cents) per share paid on 12 October 2021;
fully-franked interim dividend of 1.5 cents (2021: 1.0 cents) per share paid on 24 March 2022; and
fully-franked final dividend of 1.9 cents (2021: 1.4 cents) per share to be paid on 11 October 2022.
Changes in State of Affairs
There were no significant changes in the state of affairs of the Group.
Subsequent Events
Subsequent to the end of the financial year, the Group finalised a Deed of Termination and Settlement with the prior owners of the
Flexidrill technologies, with final settlement paid in August 2022. This has not resulted in any material change to the deferred
consideration liability recognised at 30 June 2022 (refer to Note 4.8).
Other than the above, 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.
During the current period, we have not had any reports of environmental regulatory non-compliance globally.
More specific details about IMDEX’s sustainability initiatives and performance, including safety, health and environment, can be
found on IMDEX’s website www.imdexlimited.com/investors/esg.
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 (including Independence Standards) 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.
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IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
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.
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 2022. 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 ended 30 June 2022 is dated as at 30 June
2022 and was approved by the Board of IMDEX (Board) on 14 August 2022. The extent to which IMDEX has complied with the ASX
Recommendations during the year ended 30 June 2022, and the main corporate governance practices in place can be viewed in the
Corporate Governance section on the Company website.
Classification | Public
65
IMDEX Annual Report 2022 REMUNERATION
IIMMDDEEXX LLIIMMIITTEEDD
Remuneration Report
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
Remuneration Report (Audited)
This Remuneration Report for the year ended 30 June 2022 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:
Introduction
1.
2. Highlights for FY22
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
5. Executive Remuneration Outcomes for FY22
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 FY22. 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. House
Mr P. Evans1
Mr S. Southwell
Ms M. Carey
Mr M. Tomasz2
Mr M. Regan3
Mr T. Price4
Non-Executive Chair
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer
Chief Financial Officer
Chief Operating Officer
Chief of Product Management and Marketing
General Counsel and Company Secretary (appointed 24 May 2021)
Chief of Corporate Shared Services (ceased 1 April 2022)
Chief of Engineering and R&D (ceased 1 September 2021)
1.
2.
3.
4.
Mr Evans resigned as Company Secretary during the year.
Mr Tomasz joined the Company as General Counsel on 17 May 2021 and was appointed as Company Secretary during the year.
Mr Regan left employment with the Company and ceased as a member of the KMP on 1 April 2022.
Mr Price retired from the Company and ceased as a member of the KMP on 1 September 2021. Mr Price continues to provide service to the Company as a consultant.
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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
2.
Highlights for FY22
Executive fixed
remuneration
increases
From 7% to 19% for
three executives
Short-term
incentive (“STI”)
outcomes
100%
of maximum
Long-term
incentive (“LTI”)
outcomes
Non-Executive
Directors (NEDs)
remuneration
increases
2018 LTI
65%
vesting
NIL
Approved changes
to the Executive
Remuneration
Framework
Implemented
An executive remuneration review was conducted whereby each executive’s
remuneration position against our external market comparators was assessed,
together with individual performance, role complexity and internal remuneration
relativity.
As a result, The CEO’s base salary increased 7% from $700,000 to $750,000 per
annum during FY22. Mr Southwell and Ms Carey also received an annual base salary
increase of 12% and 19% respectively.
There were no other increases for Senior Executives during the year.
See Statutory Remuneration in Section 5 for more details.
The Company had strong financial and safety performance in FY22, exceeding
budgeted EBITDA and the targeted Group Lost Time Injury Frequency Rate
(LTIFR), with mandatory Compliance and Safety training fully completed.
The Executives were awarded 100% of maximum for these components, 50% of
which will be awarded in performance rights subject to a 12-month deferral period
requiring continued employment. The remaining 50% will be awarded as cash.
See Section 5 for more information.
The 2018 LTI (FY19) had a three-year performance period ending on 30 June 2021.
As result of performance testing undertaken in September 2021, the Board
approved vesting of this award at 65%.
For the three-year performance period ending 30 June 2022, the 2019 LTI (FY20) is
anticipated to vest at 63%. 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 2022). Indicative testing of results for this award have been
provided in Section 5 of this report with final outcomes to be disclosed in the FY23
Remuneration Report.
See Section 5 for more information.
Aggregate NED fee pool was approved by shareholders at the 2021 AGM to increase
from $700,000 to $950,000. This increase moved the NED fee pool more in line with
benchmarking peers and provides headroom for future NED appointments.
There were no increases to fees for NEDs in FY22.
Refer to Section 6 for disclosures regarding our NEDs.
Key changes to the Executive Remuneration Framework effective from 1 July 2021
include:
•
•
•
•
•
Remuneration mix revised to emphasise greater ‘at risk’
STI deferral introduced to encourage greater equity ownership
STI maximum opportunity increased from 35% to 50% for the CEO and from
25% to 35% for other executives to align to the market
LTI maximum opportunity increased from 50% to 100% for the CEO and from
35% to 70% for other executives to align to the market
LTI measures revised to relative Total Shareholder Return (TSR) (50%), absolute
EPS (20%) and strategic milestones (30%) to align with long term business
imperatives
Executive remuneration and incentive structures continue to be monitored and
reviewed annually to ensure alignment with business need and relevant market
practices.
The Board welcomes ongoing shareholder feedback to ensure IMDEX’s
remuneration remains appropriate.
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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 for KMP roles and general insights for Executive
remuneration structures, with a total fee of $32,000 for these services. During the period no remuneration
recommendations, as defined by the Corporations Act, were provided by The Reward Practice Pty Ltd.
Remuneration report approval at 2021 AGM
The FY21 Remuneration Report received strong shareholder support at the 2021 AGM with a vote of 99.28% in favour.
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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
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.
Providing leading mining solutions to enhance the productivity and efficiency of our client’s operation across the mining value
chain.
Business Objective
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
Link to Performance
Base Salary
Comprises cash base salary
only.
Superannuation/Pension Compulsory superannuation/
STI
LTI
pension contributions plus
other cash and non-cash
benefits.
Half the award is paid in cash
and half is granted as
deferred 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. The deferred
component aligns with
prevelant Australian market
practice and encourages
executive share ownership.
Rewards Executives for their
contribution to the creation
of shareholder value over the
longer term.
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
management, IMDEX values and
people and capability. Mandatory
Compliance and Safety training
completion is also required.
Vesting of awards is dependent on
Total Shareholder Return (TSR)
performance relative to a peer
group of companies, Absolute
Earnings Per Share (EPS) and the
achievement of long-term
strategic milestones.
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4B: Approach to setting remuneration and details of incentive plans
In FY22, 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 FY22 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.
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.
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Short Term Incentives
What is the STI plan?
What are the
performance criteria
and how do they align
with business
performance?
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.
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. Half the STI award
is paid in cash and half is delivered as deferred performance rights (Rights) which may vest
after 12 months subject to continued employment.
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 and 100% of mandatory compliance and safety training is
achieved. 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
50%
20%
Individual Performance
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
• IMDEX Values
• 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 50% of base salary. Other Executives have a
maximum STI opportunity of up to 35% 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 and 100% completion of the mandatory Compliance and Safety training),
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 maximum 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.
Where a participant ceases employment prior to the deferred portion of their STI award
vesting due to resignation or for cause, the Rights will be forfeited. Where a participant
ceases employment due to a qualifying reason (death, total and permanent disability,
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retirement, or redundancy), then vesting will be determined based on the amount of
performance period remaining and subject to Board discretion.
What happens to STI
awards on cessation of
employment?
(continued)
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 100% of base salary. Other Executives have a maximum LTI opportunity of 70% 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 three measures, weighted as follows:
1) Relative TSR
2) Absolute EPS
3) Strategic Milestones
Weighting
50%
20%
30%
Purpose
To recognise the creation
of shareholder
value relative to
market peers
To recognise
profitable growth
over the long term
To recognise the
achievement of strategic
milestones over the long-
term
The calculation of each performance measure is outlined below:
1) Relative TSR
IMDEX’s TSR 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 an d reflect the
Company’s competitors for capital. The TSR for IMDEX and comparator companies is measured
over three financial years (e.g., 1 July 2021 to 30 June 2024 for the FY22 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.
The proportion of Rights that may vest based on relative TSR performance is determined based on
a ranking approach. The TSR for IMDEX and each company in the comparator group is measured
and the companies are ranked by their TSR performance with vesting based on the following
schedule:
TSR percentile ranking of IMDEX
TSR Portion of LTI that vests
(50%)
Below the 50th percentile
At the 50th percentile
Between the 50th percentile and 75th
percentile
At or above the 75th percentile
Nil vesting
50%
Pro-rata
100%
Note: Notwithstanding the percentile ranking, no vesting will occur for the relative TSR portion
where IMDEX’s TSR for the Performance Period is negative.
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How is
performance
measured?
(continued)
2) Absolute EPS
EPS growth targets are set by the Board at the time of the LTI grant. EPS compound annual growth
rate (CAGR) performance determines the proportion of rights that may vest relative to absolute
EPS as follows:
EPS CAGR
Below 10%
10%
Between 10% and 15%
At or above 15%
3) Strategic Milestones
EPS Portion of LTI that
vests (20%)
Nil vesting
50%
Pro-rata
100%
Strategic milestones and associated measures relating to IMDEX’s long-term objectives are set by
the Board at the time of the LTI grant. Each strategic milestone is assessed over the three-year
performance period with annual progress reviews undertaken between management and the
Board. Due to the sensitive nature of the initiatives related to the strategic milestones, outcomes
will be provided in the remuneration report following the conclusion of the performance period.
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 2021)
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 $750,000 per annum.
• A maximum STI opportunity of 50% of base salary.
•
Eligibility to participate in the IMDEX LTI plan on terms determined by the Board. Maximum opportunity
is 100% 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.
Classification | Public
Page 8 of 67
73
IMDEX Annual Report 2022
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
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.
5.
Executive Remuneration Outcomes for FY22
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)
FY22
341,843
104,858
62,566
44,711
204.0
184.5
1.5
1.9
-
11.28
10.80
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
1.
Stated before a net expense of $2.9m, being an impairment loss on COREVIBE IP, inventory and associated fixed assets of $14.1m offset by the related $11.2m estimated deferred
consideration no longer payable (FY21: $2.9m gain on deferred consideration fair value adjustment for Flexidrill and AusSpec).
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 and 100% of
mandatory compliance and safety training is completed by the Executive.
IMDEX’s actual EBITDA performance to budget
target over the three financial years from 1 July
2019 to 30 June 2022:
Financial year
EBITDA vs Gate
Exceeded
Exceeded
Not met
FY22
FY21
FY20
74
Mandatory Compliance and Safety training
completion:
Compliance and safety training
programs 100% completed by all
Executives.
Classification | Public
Page 9 of 67
IMDEX Annual Report 2022
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
Performance in FY22
The table below sets out the STI measures for FY22 and performance outcomes against those measures. The EBITDA
and Safety (LTIFR) performance significantly exceeded FY22 outcomes, which is testament to the efforts of the
employees and management of IMDEX over the previous 12 months. This results in STI o utcomes at maximum for
Executives.
Objective
Weighting
Performance Achieved/Comments
% Achieved
FY22 EBITDA of $104.9m is a material improvement on FY21 results
and improvement on the FY22 budgeted EBITDA.
Corporate
50%
All executives completed 100% of mandatory compliance and
safety training
100%
This has resulted in both Gates being achieved, and this portion of
the STI being awarded in full.
Safety
20%
Actual LTIFR of 0.77 was significantly better than the target of
<1.71, resulting in this portion of the STI being awarded in full.
100%
Individual
30%
Individual objectives for the year related to achieving key results in
Customer Focus & Technical Leadership, Operational Excellence &
Quality, Risk, Compliance & Safety, People & Capability and
strategic initiatives.
Based on individual performance throughout the year, Executives
achieved 100% of outcomes.
The Board assessed the CEO’s individual performance as 100%.
100%
The following table outlines the STI outcomes for Executives, including the proportion of maximum STI that was earned
and forfeited in relation to FY22.
Corporate
Outcome
Safety
Outcome
Individual
Outcomes
Overall Outcomes
STI
Awarded1
Percentage of
maximum STI
Executive
Mr P. House
Mr P. Evans
Mr S. Southwell
Ms M. Carey
Mr M. Tomasz
Mr M. Regan2
Mr T. Price3
(%)
100
100
100
100
100
100
-
(%)
100
100
100
100
100
100
-
(%)
100
100
100
100
100
100
-
(% of base
salary)
50.0
35.0
35.0
35.0
35.0
26.5
-
($)
375,000
164,351
164,500
154,000
140,000
113,808
-
Awarded
100%
Forfeited
-
100%
100%
100%
100%
75.6%
-
-
-
-
-
24.4%
100%
1.
2.
3.
FY22 STI will be paid in September 2022, after the end of the performance period.
Mr Regan left employment with the Company and ceased as a member of KMP on 1 April 2022. Mr Regan was eligible to participate in the FY22 STI on a pro-rata basis and it was all
in cash.
Mr Price retired and ceased as a member of KMP effective 1 September 2022. As such, he was not eligible to participate in the FY22 STI.
Mandatory Deferral of STI for the Executives
To promote increased shareholding in the Company, and in line with approved FY22 changes to the executive
remuneration framework, 50% of the FY22 STI award will be awarded as deferred Rights to IMDEX Limited shares. The Rights
will be deferred for twelve months, vesting in June 2023 and are subject to continued service.
Classification | Public
Page 10 of 67
75
IMDEX Annual Report 2022
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
Company performance and its link to long-term incentives
LTI vesting for grants made prior to FY22 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.
Grant Date
Jul-19
Jul-18
Jul-17
Jul-16
Jul-15
2019 LTI1
2018 LTI2
2017 LTI
2016 LTI
2015 LTI
Expiry Date
Jun-22
Jun-21
Jul-20
Jul-19
Jul-18
IMDEX 3-year TSR
180%
IMDEX 3-year EPS Growth
9%
Combined Percentile
Rank
Vesting Percentage
68th
63%
62%
40%
69th
65%
66%
382%
305%
395%
132%
155%
81st
85%
76th
76%
82nd
87%
1.
2.
2019 (FY20) LTI is indicative only. The outcome will be known when company reports for the comparator group are released (typically
from August to October 2022).
2018 (FY19) LTI outcome has been updated to reflect final performance testing undertaken in September 2021.
76
Page 11 of 67
Classification | Public
IMDEX Annual Report 2022
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aa
IMDEX Annual Report 2022
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
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 2021 AGM when shareholders approved an aggregate
fee pool of $950,000 per annum.
Structure
The remuneration of NEDs consists of Director Fees and Committee Fees. The payment of additional fees for serving as
a Chair on a committee recognises the additional time commitment required by NEDs who serve on sub -committees.
To ensure independence, NEDs do not participate in any incentive schemes.
The table below summarises the NED fee policy for FY22:
Director Fees
Board Chair
Non-Executive Directors
Committee Fees
Committee Chair
Committee Member
$220,000
$110,000
$25,000
-
The remuneration of NEDs for FY22 and FY21 is detailed below.
Non-Executive
Director
Mr. A. Wooles1
Ms. S. Layman
Mr. K. Dundo2
Mr. I. Gustavino3
Ms T. Arlaud4
Totals
Year
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
Short-term benefits
Director Fees
220,000
220,000
110,000
110,000
100,000
98,536
100,000
96,162
110,000
42,778
640,000
567,476
Post-employment
benefits
Superannuation
-
-
-
-
10,000
9,544
10,000
9,544
-
-
20,000
19,088
Other
25,000
25,000
25,000
25,000
-
-
-
-
-
-
50,000
50,000
Total
245,000
245,000
135,000
135,000
110,000
108,080
110,000
105,706
110,000
42,778
710,000
636,564
1.
2.
3.
4.
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 net of GST.
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.
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.
Ms Arlaud was appointed as a Non-Executive Director on 10 February 2021. Fees for FY21 are reflective of her appointment date.
78
Classification | Public
Page 13 of 67
IMDEX Annual Report 2022
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
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 FY22.
Executive
Mr P. House
Mr P. Evans
Mr S. Southwell
Ms M. Carey
Mr M. Tomasz
Mr M. Regan 2
Mr. T. Price 3
Balance at
start of period
1 July 2021
Granted as
remuneration
Performance
Rights exercised
Performance
Rights lapsed/
forfeited
668,911
410,377
239,502
421,391
-
507,223
533,516
597,244
167,855
167,943
157,223
168,453
153,650
202,526
(101,755)
(81,578)
(36,795)
(80,132)
-
(94,123)
(99,079)
(54,718)
(43,868)
(13,080)
(43,090)
-
(261,133)
(428,203)
Balance1 at
end of period
30 June 2022
1,109,682
452,786
357,570
455,392
168,453
305,617
208,760
Totals
2,780,920
1,614,894
(493,462)
(844,092)
3,058,260
1.
2.
3.
Includes Performance Rights held directly, indirectly and beneficially by Executives.
Mr Regan left employment with the Company and ceased as a member of KMP on 1 April 2022. Closing balance is at this date.
Mr Price retired and ceased as a member of KMP effective 1 September 2021. Closing balance is at this date.
KMP Shareholdings
The table below details the number of shares held in IMDEX and the movement during FY2 2.
Class of
shares
Balance at
start of period
1 July 2021
Shares
allocated
under
remuneration
framework1
Non-Executive Directors
Mr A. Wooles
Ms S. Layman
Mr K. Dundo
Mr I. Gustavino
Ms T. Arlaud
Senior Executives
Mr P. House
Mr P. Evans
Mr S. Southwell
Ms M. Carey
Mr M. Tomasz
Mr M. Regan 3
Mr T. Price 4
Totals
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
400,000
70,000
204,546
62,077
-
164,664
687,611
-
259,404
-
-
552,159
-
-
-
-
-
101,755
81,578
36,795
80,132
-
94,123
99,079
Number of
Performance
Rights2 not
vested at year-
end
Balance at
end of period
30 June 2022
250,000
70,000
204,546
-
-
266,419
689,189
36,795
270,743
-
-
-
-
-
-
-
-
1,109,682
452,786
357,570
455,392
168,453
305,617
208,760
Net change
Other
(150,000)
-
-
(62,077)
-
-
(80,000)
-
(68,793)
-
(94,123)
(651,238)
2,400,461
493,462
(1,106,231)
1,787,692
3,058,260
1.
2.
3.
4.
All shares were issued for nil consideration.
Includes Ordinary Shares and Performance Rights held directly, indirectly and beneficially by KMP.
Mr Regan left employment with the Company and ceased as a member of KMP on 1 April 2022. Closing balance is at this date.
Mr Price retired and ceased as a member of KMP effective 1 September 2021. Closing balance is at this date.
Classification | Public
Page 14 of 67
79
IMDEX Annual Report 2022
IIMMDDEEXX LLIIMMIITTEEDD
aanndd iittss ccoonnttrroolllleedd eennttiittiieess
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2022
8.
Other Transactions
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, 14 August 2022
80
Page 15 of 67
Classification | Public
IMDEX Annual Report 2022 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, 14 August 2022
Mr. Anthony Wooles
Classification | Public
Page 16 of 67
81
IMDEX Annual Report 2022 Contents
Financial Statements
83
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
84
85
86
87
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
2.6 Net impairment loss
Debt & Capital
3.1 Cash
3.2 Borrowings
3.3 Issued Capital
88
88
90
96
3.4 Financial Risk Management
3.5 Commitments For Expenditure
Other Assets & Liabilities
97
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
4.9 Investment in an associate
Other
5.1 Taxation
106
5.2 Acquisition of Assets/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
Auditor’s Independence Declaration
Auditor Report
127
128
Additional Securities Exchange Information 132
Shareholder
Information
136
IMDEX LIMITED
FINANCIAL STATEMENTS
and its controlled entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the Year Ended 30 June 2022
Revenue from sale of goods, rentals and software
Other income
Raw materials and consumables used
Employee benefit expense
Other expenses
Share of loss of an associate
Earnings before fair value gain, interest, income tax, depreciation,
amortisation and impairment expense – EBITDA
Depreciation and amortisation expense
Impairment loss net of related fair value adjustment
Earnings before interest and income tax – EBIT
Finance income
Finance costs
Profit before tax
Income tax expense
Profit for the period
Year Ended
30 June 2022
Year Ended
30 June 2021
Notes
$’000
$’000
2.3
2.5
2.3
2.3
4.9
2.3
2.6
2.3
341,843
526
(104,543)
(83,777)
(48,516)
(675)
104,858
(36,209)
(2,871)
65,778
186
(3,398)
62,566
264,375
-
(81,572)
(67,090)
(40,212)
-
75,501
(30,783)
2,917
47,635
142
(3,246)
44,531
5.1
(17,855)
(12,864)
44,711
31,667
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
3,813
3,813
(1,416)
(1,416)
48,524
30,251
Profit attributable to owners of the parent
44,711
31,667
Total comprehensive income attributable to owners of the parent
48,524
30,251
Earnings per share
Basic profit per share (cents)
Diluted profit per share (cents)
2.1
2.1
11.28
10.80
8.01
7.80
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
84
Classification | Public
Page 18 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Consolidated Statement of Financial Position as at 30 June 2022
Notes
30 June 2022
$’000
30 June 2021
$’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
Intangible assets
Investment in an associate
Deferred tax 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
4.5
4.9
5.1
4.6
4.4
4.8
5.1
4.7
4.4
4.8
3.2
4.7
3.3
5.4
36,368
73,349
57,061
1,939
7,201
175,918
55,538
28,189
97,793
5,031
27,590
3,551
217,692
393,610
34,696
4,301
2,936
5,565
6,067
53,565
30,350
-
12,166
303
42,819
96,384
297,226
169,078
13,635
114,513
297,226
58,477
58,243
41,501
2,330
5,185
165,736
45,621
32,960
92,943
-
25,144
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
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Classification | Public
Page 19 of 67
85
IMDEX Annual Report 2022
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T
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Consolidated Statement of Cash Flows
for the Financial Year Ended 30 June 2022
Year Ended
30 June 2022
$’000
Year Ended
30 June 2021
$’000
Notes
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 generated from operating activities
Cash flows from investing activities
Interest received
Payment for property, plant and equipment
Payment for intangible assets
Payment for deferred consideration
Payment for acquisitions
Payment for the investment in an associate
Net cash used in investing activities
Cash flows from financing activities
Repayment of borrowings
Proceeds from borrowings
Dividends paid
Cash paid due to settlement of performance rights
Repayment of lease liabilities
Net cash used in financing activities
3.1
4.8
5.2
4.9
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of foreign exchange rate changes
Cash and cash equivalents at the end of the financial year
3.1
351,748
(282,124)
(585)
(13,504)
55,535
272,359
(207,890)
(491)
(7,080)
56,898
186
(32,951)
(4,715)
(1,000)
(8,667)
(5,706)
(52,853)
-
-
(13,083)
(4,214)
(7,425)
(24,722)
(22,040)
58,477
(69)
36,368
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
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Classification | Public
Page 21 of 67
87
IMDEX Annual Report 2022
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
for
Certain prior year disclosures have been reclassified
consistency with the current year presentation.
These
reclassifications are not material to the current period financial
report.
IMDEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS
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
Reports)
Instrument 2016/191. The Company is an entity to which this
legislative instrument applies.
Financial/Directors’
(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 2021. 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 14 August 2022.
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 Company
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.
88
Classification | Public
Page 22 of 67
IMDEX Annual Report 2022 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 2021.
Amendments to existing standards effective and adopted from
1 July 2021 but not relevant or significant to the Group:
AASB2020-8
AASB2021-3
Amendments
to Australian Accounting
Standards – Interest Rate Benchmark Reform
– Phase 2
to Australian Accounting
Amendments
Standards – Covid 19 – Related Rent
Concession beyond 30 June 2021
New standards and amendments to standards that have been
issued but not yet effective or early adopted by the Group:
Amendments to AASB 1
Amendments to AASB 3
Classification of Liabilities as
Current or Non-current
Reference to the Conceptual
Framework
Amendments to AASB 16
Property, Plant and Equipment –
Proceeds Before Intended Use
Amendments to AASB 137 Onerous Contracts – Cost of
Fulfilling Contract
1.4
Critical Accounting Judgements and Key Sources
of Estimation Uncertainty
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:
2.3 – Revenue recognition – estimating variable
consideration for volume rebates
4.1 – Recoverability of receivables
4.3 – Recoverability of non-current assets
4.4 – Leases
4.5 – Intangible assets
4.7 – Provisions
4.8 – Deferred consideration
5.1 – Taxation
5.2 – Acquisition of assets/subsidiaries
5.4 – Share-based payments
Classification | Public
89
Page 23 of 67
IMDEX Annual Report 2022
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
2022
$’000
2021
$’000
44,711
31,667
Number of Shares
396,452,400
395,286,525
413,861,320
406,065,175
11.28
10.80
8.01
7.80
2.2
Segment information
The primary means by which the Board views the
business and makes 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
following
the mining sector along
geographical lines:
the
to
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.
90
Classification | Public
Page 24 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
Operating Performance
OPERATING PERFORMANCE
2.2
Segment Information (continued)
Segment results
2022
Revenue from sale of goods, rentals and
software
Earnings before fair value gain,
interest, income tax, depreciation,
amortisation and impairment expense
– EBITDA
Depreciation and amortisation
expenses
Impairment loss net of related fair value
adjustment
Earnings before interest and income
tax – EBIT
Finance income
Finance costs
Profit before tax
Income tax expense
Profit for the period
2021
Revenue from sale of goods, rentals and
software
Earnings before fair value gain,
interest, income tax, depreciation,
amortisation and impairment expense
– EBITDA
Depreciation and amortisation
expenses
Impairment loss net of related fair value
adjustment
Earnings before interest and income
tax – EBIT
Finance income
Finance costs
Profit before tax
Income tax expense
Profit for the period
AM –
Americas
APAC –
AsiaPac
$’000
$’000
AE –
Africa /
Europe
$’000
Segment
Total
IMDEX
Technology(i)
Central
administration
costs(ii)
Un-
allocated
(iii)
Total
160,404
99,649
81,790
341,843
-
-
-
341,843
66,833
39,179
40,488
146,500
(32,591)
(8,376)
(675)
104,858
(18,186)
(9,263)
(7,665)
(35,114)
(821)
(274)
-
(36,209)
-
-
-
-
-
-
(2,871)
(2,871)
48,647
29,916
32,823
111,386
(33,412)
(8,650)
(3,546)
65,778
-
-
-
-
(541)
(780)
(302)
(1,623)
-
-
48,106
29,136
32,521
109,763
(33,412)
-
(147)
(8,797)
186
(1,628)
(4,988)
186
(3,398)
62,566
-
-
-
-
-
-
(17,855)
(17,855)
48,106
29,136
32,521
109,763
(33,412)
(8,797)
(22,843)
44,711
115,307
81,700
67,368
264,375
-
-
-
264,375
43,221
34,089
31,793
109,103
(26,352)
(7,250)
(14,487)
(8,085)
(7,034)
(29,606)
(860)
(317)
-
-
75,501
(30,783)
-
-
-
-
-
-
2,917
2,917
28,734
26,004
24,759
79,497
(27,212)
(7,567)
-
-
(664)
(801)
28,070
25,203
-
-
-
(215)
24,544
-
-
(1,680)
77,817
-
-
-
(27,212)
-
-
(187)
(7,754)
2,917
142
(1,379)
1,680
47,635
142
(3,246)
44,531
-
(12,864)
(12,864)
28,070
25,203
24,544
77,817
(27,212)
(7,754)
(11,184)
31,667
(i)
(ii)
(iii)
During the period IMDEX has expanded IMDEX Technology costs to include Software Development. Prior period figures have been
restated. This category includes Engineering and Product Development (EPD) $22.0 million (FY21: $19.1 million), Software Development
$4.2 million (FY21: $1.4 million) together with Product Management costs $7.2 million (FY21: 6.7 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. Prior period figures have been restated to
better align with the definition of central administration costs.
Unallocated items includes the share of loss of an associate, impairment loss net of related fair value adjustment, finance income and
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.
Classification | Public
Page 25 of 67
91
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
OPERATING PERFORMANCE
Operating Performance
2.2
Segment Information (continued)
Segment assets and liabilities
AM – Americas
APAC – AsiaPac
AE – Africa / Europe
Total of all segments
Unallocated
Consolidated
Assets
Liabilities
2022
$’000
2021
$’000
2022
$’000
2021
$’000
152,244
119,301
75,553
347,098
46,512
393,610
110,575
129,604
58,470
298,649
67,463
366,112
21,508
44,235
9,974
75,717
20,667
96,384
24,036
50,982
7,666
82,684
30,377
113,061
For the purposes of monitoring segment performance and allocating resources between segments:
•
•
All assets are allocated to reportable segments other than tax assets, investment in associate and treasury cash.
All liabilities are allocated to reportable segments other than tax liabilities, the external loan and the deferred
consideration.
Other segment information
2022
AM –
Americas
$’000
APAC –
AsiaPac
$’000
Acquisition of segment assets
7,594
4,787
AE – Africa /
Europe
$’000
3,861
Unallocated
Total
$’000
5,706
$’000
21,948
2021
Acquisition of segment net assets
4,299
3,012
2,443
(1,639)
8,115
92
Classification | Public
Page 26 of 67
IMDEX Annual Report 2022
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
2022
$’000
133,860
207,983
341,843
2021
$’000
108,857
155,518
264,375
(i)
(ii)
The Group typically satisfies the obligation associated with the sale of drilling fluids and equipment 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 services and software subscriptions over time.
Revenue from contracts with customers is recognised at an amount that reflects the consideration to which the Group expects to
be entitled in exchange for those goods or services. Revenue is recognised net of allowances for returns and customer claims and
any taxes collected from customers, which are subsequently remitted to government authorities. Contract assets and contract
liabilities are not material to the Group’s financial position.
Determining whether products and services and software subscriptions are considered distinct performance obligations that should
be accounted for separately versus together require significant judgement. The Group provides products and services to its
customers based on contracts that may contain several elements but for the vast majority of contracts, these elements represent
only one single performance obligation for which revenue is recognised. Software revenue is presented together with rental
revenue, given the high level of integration between our sensors and software technologies (in particular IMDEX HUB-IQ).
The Group may be entitled to variable consideration in several forms which are determined through its agreements with
customers. The Group can offer prompt payment discounts, sales rebates or other incentive payments to customers. Sales rebates
and other incentive payments are typically awarded upon achievement of certain performance metrics, including volume. The
Group utilises forecasted sales data and rebate percentages specific to each customer agreement and updates its judgement of the
amount to which the customer is entitled each period, to determine the variable consideration to be received.
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 consideration
Amortisation of borrowing costs
Interest and other financing costs
Note
5.4
4.3
4.4
4.5
4.4
4.8
2022
$’000
(74,197)
(4,766)
(4,814)
(83,777)
(25,170)
(6,178)
(4,861)
(36,209)
(1,770)
(719)
(82)
(827)
(3,398)
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)
Classification | Public
93
Page 27 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
Operating Performance
OPERATING PERFORMANCE
2.3
Revenue and expenses (continued)
Other expenses
Consulting and legal expenses (i)
Facilities and utilities expenses
Travel and accommodation
Motor vehicle costs
Slow-moving and obsolete stock
Allowance for expected credit losses
Software and network infrastructure
Materials associated with developing technologies
Other expenses
Note
2022
$’000
2021
$’000
4.1
(16,191)
(3,948)
(3,471)
(2,239)
(1,182)
(917)
(4,069)
(6,269)
(10,230)
(48,516)
(11,262)
(2,773)
(1,419)
(2,036)
(1,962)
(759)
(3,625)
(4,777)
(11,599)
(40,212)
(i)
Includes legal, audit, taxation, share registry, corporate secretarial fees and consulting services
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 2022:
(i)
(ii)
(iii)
(iv)
fully-franked final dividend of 1.4 cents (2020: 0.7 cents) per share paid on 12 October 2021;
fully-franked special dividend of 0.4 cents (2020: 2.0 cents) per share paid on 12 October 2021;
fully-franked interim dividend of 1.5 cents (2021: 1.0 cents) per share paid on 24 March 2022; and
fully-franked final dividend of 1.9 cents (2021: 1.4 cents) per share to be paid on 11 October 2022.
The franking account balance is $40.9 million (2021: $42.1 million).
2.5
Other income
Other income
Other income
Note
2022
$’000
2021
$’000
526
526
-
-
During the period, the Group received $0.7 million (2021: $0.4m) of COVID-19 related overseas government grants, of which $0.5
million has been recorded in other income and $0.2 million (2021: $0.4m) has been offset against employee benefits expense since
they were direct reimbursement for these expenses.
94
Classification | Public
Page 28 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
OPERATING PERFORMANCE
Operating Performance
2.6
Impairment loss net of related fair value adjustment
Impairment loss net of related fair value adjustment
Impairment of inventory
Impairment of property, plant and equipment
Impairment of intangible assets
Fair value gain on deferred consideration
Note
4.2
4.3
4.5
4.8
2022
$’000
2021
$’000
(1,581)
(425)
(12,113)
11,248
(2,871)
-
-
-
2,917
2,917
At 30 June 2022, an impairment loss net of related fair value adjustment of $2.9 million pre-tax ($2.3 million post tax) has been
recognised in relation to COREVIBE tangible and intangible assets, acquired in the acquisition of Flexidrill (completed January 2020).
This follows completion of COREVIBE laboratory and field trials throughout the period, through which the technology achieved some
benefits, however failed to meet the IMDEX hurdle rates to be a product within our portfolio. As such, the Group has taken the
decision to cease further development of the COREVIBE technology.
The impairment loss net of related fair value adjustment of $2.9 million includes a full write-down of COREVIBE intangible assets of
$12.1 million, COREVIBE inventory of $1.6 million and associated fixed assets of $0.4 million.
Concurrently, during the annual update of the strategic plan, the Company commenced a strategic review of its product and
operations. As a result of this review, the Group has taken the decision to pursue divestment options for the commercialisation of
the MAGHAMMER technology (also acquired in the acquisition of Flexidrill). An updated valuation of MAGHAMMER technology has
been completed during the period, which supports the carrying value of associated intangible assets at 30 June 2022. Refer to Note
4.5 Intangible assets.
The impairment loss net of related fair value adjustment includes a $11.2 million (FY21: $2.9 million) fair value gain in connection
with the re-estimated deferred consideration liability in relation to the acquisition of Flexidrill. Following the decision to cease
development of COREVIBE, as well as the decision to pursue divestment options for the commercialisation of MAGHAMMER, this
deferred consideration has been re-estimated, based upon a percentage payable upon anticipated future divestment. Refer to Note
4.8 Deferred consideration.
Subsequent to the end of the financial year, the Group finalised a Deed of Termination and Settlement with the prior owners of the
Flexidrill technologies, with final settlement paid in August 2022. This has not resulted in any material change to the deferred
consideration liability recognised at 30 June 2022 (refer to Note 5.9).
Classification | Public
95
Page 29 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
DEBT & CAPITAL
Debit & 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. 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 generated from 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
Share of loss of an associate
Impairment loss net of related fair value adjustment
Interest on lease liabilities
Accretion of interest on deferred considerations
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 generated from operating activities
2022
$’000
2021
$’000
36,368
58,477
44,711
31,667
36,209
(186)
4,814
675
2,871
1,770
719
82
62
(18,554)
(18,396)
(2,052)
157
(2,148)
450
4,351
55,535
30,783
(142)
3,011
-
(2,917)
1,867
791
97
(972)
(17,137)
(2,844)
(1,598)
(3,708)
11,135
1,081
5,784
56,898
96
Classification | Public
Page 30 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
DEBT & CAPITAL
Debit & Capital
3.2
Borrowings
Non-current borrowings
Secured
Commonwealth Bank of Australia
2022
$’000
12,166
12,166
2021
$’000
11,128
11,128
30-Jun-21
Cash flows
Non-cash changes
30-Jun-22
$’000
Repaid
$’000
Drawn
$’000
Foreign
Exchange
Movement
$’000
Reclassification
$’000
Other
$’000
Commonwealth Bank of
Australia
Non-current borrowings
Total liabilities from
financing activities
11,128
11,128
-
-
-
-
966
966
-
-
72
72
$’000
12,166
12,166
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
recognition,
loans and borrowings are
subsequently measured at amortised cost using the effective
interest method.
interest-bearing
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.
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.
Drawn Balance at 30 June 2022: borrowings $12.2 million,
bank guarantees $1.1 million and credit card borrowings $0.1
million.
Undrawn Balance at 30 June 2022: $16.6 million.
Effective Interest Rate: 4.4%.
Classification | Public
97
Page 31 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
DEBT & CAPITAL
Debit & Capital
3.3
Issued capital
Issued and Paid-Up Capital - Fully paid
ordinary shares
Notes
Number
$'000
Number
$'000
2022
2021
Balance at beginning of the financial year
396,452,400
169,078
388,057,257
158,697
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
396,452,400
169,078
396,452,400
169,078
(i)
(ii)
Fully paid ordinary shares carry one vote per share and
carry the right to dividends.
During the prior 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 carried at amortised cost
Cash and cash equivalents
Trade and other receivables
Financial liabilities carried at amortised cost
Trade and other payables
Lease liabilities
Borrowings
Financial risk management objectives
2022
$’000
36,368
76,900
113,268
34,696
34,651
12,166
81,513
2021
$’000
58,477
61,951
120,428
37,885
38,873
11,128
87,886
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.
98
Classification | Public
Page 32 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
Debit & 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
2022
$'000
2021
$'000
2022
$'000
2021
$'000
17,943
1,175
791
1,476
1,061
17,265
1,936
857
1,500
1,763
33,510
4,311
4,015
10,780
3,783
34,809
4,713
3,384
10,335
7,751
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% (2021: 10%) increase or decrease in the Australian Dollar against the relevant foreign currencies.
10% increase
10% decrease
10% increase
10% decrease
United States Dollar Impact
2022
$'000
2021
$'000
Canadian Dollar Impact
2021
2022
$'000
$'000
930
(930)
884
(884)
1,557
(1,557)
1,754
(1,754)
Euro Impact
2022
$'000
314
(314)
2021
$'000
277
(277)
Profit / (loss) impacts are mainly attributable to exposure on outstanding receivables and payables at the reporting date
denominated in the applicable foreign currency.
Classification | Public
99
Page 33 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
DEBT & CAPITAL
Debit & 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
2022
$ '000
(468)
468
2021
$ '000
(500)
500
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 2022 the Company/Group has
undrawn facilities of $16.6 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
2022
Trade and other payables
Lease liabilities
CBA credit facility
2021
Trade and other payables
Lease liabilities
CBA credit facility
Effective
interest rate
0-3
months
3 months to
1 year
1-5 years
5+ years
Total
%
$’000
$’000
$’000
$’000
$’000
-
4.4%
4.4%
-
4.4%
4.3%
34,696
1,717
-
36,413
37,885
1,416
-
39,301
-
5,153
-
5,153
-
4,248
-
4,248
-
24,361
12,166
36,527
-
15,798
11,128
26,926
-
18,010
-
18,010
-
30,078
-
30,078
34,696
49,241
12,166
96,103
37,885
51,540
11,128
100,553
100
Classification | Public
Page 34 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
DEBT & CAPITAL
Debit & 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.
Effective interest rate
0-3 months
3 months
to 1 year
1-5 years
5+ years
Total
2022
Trade and other
receivables
Cash
2021
Trade and other
receivables
Cash
%
-
0.4%
-
0.3%
$’000
$’000
$’000
$’000
$’000
73,349
36,368
109,717
58,243
58,477
116,720
-
-
-
-
-
-
3,551
-
3,551
3,708
-
3,708
-
-
-
-
-
-
76,900
36,368
113,268
61,951
58,477
120,428
Non- derivative financial instruments
3.5
Commitments for Expenditure
Recognition and measurement
Capital expenditure commitments
At 30 June 2022 the Group had $2.5 million capital
commitments (2021: $8.8 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.
Classification | Public
101
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IMDEX LIMITED
and its controlled entities
Other Assets & Liabilities
OTHER ASSETS & LIABILITIES
4.1
Trade and other receivables
Current
Trade receivables
Less allowance for expected credit losses
Other receivables
Notes
2022
$’000
2021
$’000
(i)
(iii)
(ii)
76,242
(3,951)
72,291
1,058
73,349
60,538
(3,505)
57,033
1,210
58,243
(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) The net carrying amount of trade and other receivables approximates their fair values.
(iii) Movement in the loss allowance
Balance at the beginning of the year
Written off during the year
Allowance for expected credit losses
Balance at the end of the year
2.3
3,505
(471)
917
3,951
4,059
(1,313)
759
3,505
The Expected Credit Loss (ECL) calculation for trade receivables considers both quantitative information from historic losses as well
as qualitative information on different debtor profiles. The provision rates are based on days past due for groupings of various
customer segments that have similar loss patterns. The assessment of the correlation between historical loss rates, forecast economic
conditions and ECLs is a significant estimate. The Group’s historical credit loss experience and forecast of economic conditions may
also not be representative of customer’s actual default in the future. 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 provided for ECL debtors
0 - 30 days past due
31 - 60 days past due
61 + days past due
The Group does not hold any collateral over these balances.
4.2
Inventories
Current
Raw materials
Work in progress
Finished goods
9,087
4,666
4,003
17,756
2022
$’000
1,466
1,336
54,259
57,061
6,794
2,480
4,968
14,242
2021
$’000
1,624
1,034
38,843
41,501
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.
Inventory includes a provision for slow moving and obsolete stock of $3.2 million (2021: $2.2 million). In addition, a provision for
impairment of $1.6 million was recognised in relation to COREVIBE inventory (2021: nil). Refer to Note 2.6 for further details.
102
Classification | Public
Page 36 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
Other Assets & Liabilities
OTHER ASSETS & LIABILITIES
4.3
Property, plant and equipment
2022
Cost
Accumulated depreciation and impairment loss
Total carrying value
Movement
Carrying amount at the beginning of the year
Additions (i)
Transfer from inventory
Transfer within property, plant and equipment
Depreciation expense
Impairment expense
Foreign currency exchange differences
Carrying amount at the end of the year
2021
Cost
Accumulated depreciation
Total carrying value
Movement
Carrying amount at the beginning of the year
Additions (i)
Acquisition of assets/subsidiary
Transfer to intangible assets
Depreciation expense
Foreign currency exchange differences
Carrying amount at the end of the year
Plant and
Equipment at
cost
$’000
Leasehold
Improvements
at cost
$’000
Capital Works in
Progress at cost
TOTAL
$’000
$’000
Notes
128,641
(78,764)
49,877
41,796
31,732
1,388
(1,524)
(24,274)
(425)
1,184
49,877
109,927
(68,131)
41,796
38,768
23,795
3
(1,482)
(19,450)
162
8,241
(5,710)
2,531
1,477
415
-
1,524
(896)
-
11
2,531
7,166
(5,689)
1,477
2,098
231
-
-
(831)
(21)
2.3
2.6
5.2
4.5
2.3
3,130
-
3,130
2,348
804
-
-
-
-
(22)
3,130
2,348
-
2,348
2,277
541
-
(503)
-
33
2,348
140,012
(84,474)
55,538
45,621
32,951
1,388
-
(25,170)
(425)
1,173
55,538
119,441
(73,820)
45,621
43,143
24,567
3
(1,985)
(20,281)
174
45,621
1,477
Includes external acquisitions and direct cost associated with internally manufactured plant and equipment.
41,796
(i)
Property, plant and equipment
Depreciation
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.
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 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.
Capital works in progress
Impairment
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.
During the current period, an impairment expense of $0.4
million was made in relation to COREVIBE Property, plant and
equipment (2021: nil). Refer to Note 2.6 for further details.
Classification | Public
Page 37 of 67
103
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
OTHER ASSETS & LIABILITIES
Other Assets & Liabilities
4.4
Leases
Right of use assets
2022
Cost
Accumulated depreciation
Total carrying value
Movement
Carrying amount at the beginning of the year
Additions
Disposals
Lease remeasurements
Depreciation
Foreign currency exchange differences
Carrying amount at the end of the year
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
Lease liabilities
Opening
Additions
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
Notes
2.3
2.3
Land and
Buildings
$’000
34,498
(10,073)
24,425
29,996
8,300
(80)
(9,310)
(4,479)
(2)
24,425
37,578
(7,582)
29,996
33,686
1,128
(29)
(279)
(4,440)
169
(239)
29,996
Notes
2.3
Motor
Vehicles
$’000
Other
TOTAL
$’000
$’000
5,062
(2,064)
2,998
1,829
2,394
(81)
35
(1,267)
88
2,998
3,128
(1,299)
1,829
1,303
1,202
(73)
497
(1,129)
-
29
1,829
2022
$’000
38,873
10,766
(154)
(9,275)
(7,425)
1,770
96
34,651
4,301
30,350
34,651
1,945
(1,179)
766
1,135
72
(8)
-
(432)
(1)
766
1,925
(790)
1,135
1,500
78
(5)
-
(439)
-
1
1,135
41,505
(13,316)
28,189
32,960
10,766
(169)
(9,275)
(6,178)
85
28,189
42,631
(9,671)
32,960
36,489
2,408
(107)
218
(6,008)
169
(209)
32,960
2021
$’000
41,517
2,408
(11)
218
(6,890)
1,867
(236)
38,873
4,064
34,809
38,873
104
Classification | Public
Page 38 of 67
IMDEX Annual Report 2022
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
2022
$’000
6,870
6,160
4,654
3,803
9,744
18,010
49,241
2021
$’000
5,664
4,594
4,035
3,797
3,372
30,078
51,540
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. The useful life is within the range from 1-20 years.
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 2022: $1.4 million, June 2021: $0.7 million).
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. Refer to Note
3.2 Borrowings for the effective interest rate during the year.
Classification | Public
105
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IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
Other Assets & Liabilities
OTHER ASSETS & LIABILITIES
4.5
Intangible assets
At cost
Accumulated amortisation
Accumulated impairment losses
Net carrying amount as at 30 June 2022
Movement
As at 30 June 2021
Additions
Acquisition of assets/subsidiary
Amortisation expense
Impairment expense
Foreign currency exchange differences
As at 30 June 2022
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 (ii)
Amortisation expense
Foreign currency exchange differences
As at 30 June 2021
Notes
5.2
2.3
2.6
5.2
4.3
2.3
Goodwill
$’000
86,495
-
(24,295)
62,200
62,104
-
-
-
-
96
62,200
86,399
-
(24,295)
62,104
57,784
-
4,094
-
-
-
226
62,104
Intellectual
property and
other
intangibles
$’000
48,940
(8,281)
(12,113)
28,546
27,442
-
16,242
(3,813)
(12,113)
788
28,546
33,244
(5,802)
-
27,442
25,798
-
5,500
-
-
(3,847)
(9)
27,442
Software (i)
TOTAL
$’000
8,903
(1,856)
-
7,047
3,397
4,715
-
(1,048)
-
(17)
7,047
5,203
(1,806)
-
3,397
-
2,572
-
1,985
(513)
(647)
-
3,397
$’000
144,338
(10,137)
(36,408)
97,793
92,943
4,715
16,242
(4,861)
(12,113)
867
97,793
124,846
(7,608)
(24,295)
92,943
83,582
2,572
9,594
1,985
(513)
(4,494)
217
92,943
(i)
(ii)
Of which, $4.7 million of software is under development and therefore not yet in use at 30 June 2022 (30 June 2021: $1.2 million).
Effect of change in accounting policy for IFRS Interpretations in relation to accounting for cloud-based Software-as-a-Service (SaaS)
arrangements.
Goodwill is allocated to operating segments as follows:
Africa / Europe
Asia Pacific
Americas
2022
$’000
8,182
33,658
20,360
62,200
2021
$’000
8,182
33,658
20,264
62,104
106
Classification | Public
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IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
Other Assets & Liabilities
OTHER ASSETS & LIABILITIES
4.5
Intangible assets (continued)
Impairment testing of assets
Intellectual property and other intangibles
Intellectual property and other intangibles with finite useful
life 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). Amortising
intangible assets are tested for impairment whenever there is
an indication that the asset may be impaired. Refer to Note
2.6 for details.
Intellectual property and other intangibles not yet available
in the MinePortal acquisition
for use were acquired
(completed September 2021).
These assets are not
amortised until they are in the manner intended for use by
management. They are tested annually for impairment as
well as if there is an indication that the asset may be impaired.
No impairment was required during 2022.
Software
The Group capitalises development expenditure for
internally generated software. Development expenditure is
capitalised only if it can be measured reliably, the project or
process is technically and commercially feasible, future
economic benefits are probable and the Group intends to
and has sufficient resources to complete development and
to use or sell the asset. Otherwise, it is recognised in profit
or loss as incurred. Subsequent to initial recognition,
development expenditure is measured at cost less
accumulated amortisation and any accumulated impairment
losses. Software assets with a finite life are amortised on a
straight-line basis over their expected useful life to the
Group, being up to 5 years. Expenditure on capitalised
software is capitalised only when it increases the future
economic of the specific asset to which it relates and which
the Group controls. All other expenditure is expensed as
incurred.
SaaS arrangements are service contracts providing the
Group with the right to access the cloud provider’s
application software over the contract period. Costs
incurred to configure or customise, and the ongoing fees to
obtain access to the cloud provider's application software,
are recognised as operating expenses when the services are
received.
Significant accounting estimates and assumptions
Management reviews the appropriateness of useful lives of
assets at least annually, any changes to useful lives may affect
prospective amortisation rates and asset carry values.
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.
IMDEX assesses impairment at the Operating Segment level
for Goodwill. Goodwill exists in relation to three Segments:
Asia Pacific, Africa / Europe and Americas.
IMDEX assesses impairment at the Cash Generating Unit
(CGU) level for fixed assets and other intangible assets. A CGU
is 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 and 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
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.
107
Page 41 of 67
Classification | Public
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
OTHER ASSETS & LIABILITIES
Other Assets & Liabilities
4.5
Intangible assets (continued)
Value in Use assessments and sensitivities:
Significant accounting estimates and assumptions
(continued)
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 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.
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.
Refer to note 2.6 for details of the impairment loss recognised
during the period in relation to intellectual property acquired
in the acquisition of Flexidrill (completed in January 2020),
specifically in relation to the COREVIBE Technology.
At 30 June 2022, the Group held intangible assets of $8.1
million in relation to the MAGHAMMER Technology, also
acquired in the acquisition of Flexidrill. During the annual
update of the strategic plan, IMDEX commenced a strategic
review of its product and operations. As a result of this
review, the Group has taken the decision to pursue
divestment options for the commercialisation of the
MAGHAMMER technology. An updated valuation for the
MAGHAMMER technology has been completed during the
period (including an updated valuation supported by an
Independent Technical Review on key assumptions), which
supports the carrying value of associated intangible assets at
30 June 2022.
Other than the matter above in relation to the MAGHAMMER
Technology, these assessments did not identify any indicators
of impairment for any of the CGUs.
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 2023
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 FY23 Budget approved
by the Board of Directors;
• Subsequent growth rates are within the range included in
the Corporate Valuation Model 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 Group’s effective tax rate; and
• Post-tax discount rates used were country risk adjusted
and based on data supplied by external sources and
ranged from 9.8%-13.2%.
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.
Classification | Public
Page 42 of 67
IMDEX Annual Report 2022
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)
2022
$’000
2021
$’000
16,378
18,318
34,696
19,173
18,712
37,885
(i)
(ii)
Trade payables are interest free for periods ranging from 30 to 180 days. Thereafter interest may be charged at commercial rates. The
carrying amount of trade payables approximates their fair values due to their short-term nature. 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 $6.7 million accrual for the FY22 STI bonuses (30 June 2021: $6.0 million).
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.
2022
$’000
5,867
200
6,067
2021
$’000
4,943
750
5,693
303
233
Employee entitlements
Provision is made for benefits accruing to employees in
respect of wages and salaries, annual leave, long service
leave, sick leave and related on costs 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.
Classification | Public
109
Page 43 of 67
IMDEX Annual Report 2022
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/subsidiary
Payment
Interest accretion
Fair value gain 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 $1.4 million (30 June
2021: $12.2 million) was recognised in respect of the
acquisition of the Flexidrill technologies (completed
in
January 2020). The fair value of the deferred consideration at
30 June 2022 is based upon a percentage payable to the
previous owners of the MAGHAMMER technology, upon the
anticipated
future divestment of MAGHAMMER. This
estimate has been based upon the updated valuation for
MAGHAMMER completed during the current period. In the
prior year, the deferred consideration liability was based
upon the estimated fair value of revenue-based instalments
associated with the Flexidrill technologies (COREVIBE and
MAGHAMMER).
The valuation requires management to make certain
assumptions about the forecast cash flows. 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.
Note
5.2
2.3
2.6
2022
$’000
2021
$’000
14,667
-
(1,000)
719
(11,248)
(202)
2,936
2,936
-
14,726
2,100
-
791
(2,917)
(33)
14,667
5,741
8,926
Current deferred consideration includes an amount of $1.5
million (FY21: $1.0 million current and $1.5 million non-
current) in relation to the acquisition of AusSpec. This was
paid on 1 July 2022 in cash pursuant to a revised agreement
(previously $1 million in cash and $0.5 million IMDEX shares),
following achievement of certain new revenue-generating
contracts.
The balance of the current deferred consideration ($1.4
million) relates to the acquisition of Flexidrill. Following the
decision to cease development of COREVIBE, as well as the
the
to pursue divestment options
decision
for
commercialisation
deferred
the
consideration has been re-estimated, based upon a
percentage payable upon anticipated future divestment.
of MAGHAMMER,
The estimated fair value of the deferred consideration at 30
June 2022 resulted in recognition of a fair value gain of $11.2
million as part of net impairment loss in the profit and loss for
the period.
Subsequent to the end of the financial year, the Group
finalised a Deed of Termination and Settlement with the prior
owners of the Flexidrill technologies, with final settlement
paid in August 2022. This has not resulted in any material
change to the deferred consideration liability recognised at
30 June 2022 (refer to Note 5.9).
110
Classification | Public
Page 44 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
OTHER ASSETS & LIABILITIES
Other Assets & Liabilities
4.9
Investment in an associate
The Group acquired a 30% interest in Datarock Holdings Pty Ltd (“Datarock”) on 23 November 2021 for $5.7 million cash. Datarock
is an Australian-based mining technology company servicing the global exploration and mining sector. Datarock’s product suite,
both existing and planned, complements IMDEX’s software offering and strengthens the Group’s cloud-based platform (IMDEX
HUB-IQTM) to deliver real-time rock knowledge answer products. IMDEX has exclusive options to acquire the remaining interest in
Datarock over the next four years in a two-tranche process, subject to Datarock achieving agreed strategic milestones.
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the
financial operating policy decisions of the investee, but is not control or joint control over those policies. The Group’s interest in
Datarock is accounted for using the equity method in the consolidated financial statements.
Under the equity method, the investment in an associate is initially recognised at cost. The carrying amount of the investment is
adjusted to recognise changes in the Group’s share of net assets of the associate since the acquisition date. The statement of profit
or loss reflects the Group’s share of the results of operations of the associate. The Group’s share of profit or loss of an associate is
shown on the face of the statement of profit or loss.
The following table illustrates the summarised financial information of the Group’s investment in Datarock:
Net assets
Group’s share in net assets – 30%
Notional intangible assets
Group’s carrying amount of the investment
Loss before tax
Income tax expense
Loss for the period
Group’s share of loss for the period – 30%
Amortisation of the notional intangible assets
Group’s total share of loss for the period
2022
$’000
(2,693)
(808)
5,839
5,031
(1,045)
-
(1,045)
(313)
(362)
(675)
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its
investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment
in the associate is impaired. There has been no impairment loss in the current year.
The financial statements of the associate are prepared for the same reporting period as the Group. The associate had no material
contingent liabilities or capital commitments as at 30 June 2022.
Classification | Public
111
Page 45 of 67
IMDEX Annual Report 2022
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
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% (2021: 29%)
2022
$’000
2021
$’000
17,145
12,966
3,019
(1,287)
(1,022)
17,855
74
(842)
666
12,864
(714)
(410)
62,566
18,770
545
(883)
3,454
(2,605)
(404)
(1,022)
17,855
44,531
13,359
302
(237)
1,085
(1,706)
(605)
666
12,864
(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
112
2022
$’000
2021
$’000
1,939
(5,565)
2,330
(4,582)
3,289
4,450
10,576
1,960
2,676
(370)
5,009
27,590
4,025
2,657
9,250
1,581
5,574
(691)
2,748
25,144
Classification | Public
Page 46 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
Other
OTHER
5.1
Taxation (continued)
Unrecognised Deferred Tax Assets
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.
2022
$’000
1,097
-
2021
$’000
1,378
286
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
deferred
tax
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.
Classification | Public
113
Page 47 of 67
IMDEX Annual Report 2022
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 $27.6 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 temporary 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 temporary 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.
114
Classification | Public
Page 48 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
Other
OTHER
5.2
Acquisition of assets/subsidiaries
On 17 September 2021, the Group finalised an Asset Purchase Agreement (“APA”) to acquire the MinePortal software from
Californian-based DataCloud International Inc (“DataCloud”). MinePortal is a new-generation native cloud application that enables
geological data modelling and real-time 3D visualisation. MinePortal will integrate with IMDEX HUB-IQTM to deliver a connected
real-time orebody knowledge ecosystem and accelerate IMDEX’s product development roadmap. The initial release of MinePortal
will support the delivery of the IMT vision, specifically with the 3D visualisation of data collected by the Blast Dog System.
The total purchase consideration comprises a combination of cash and equity. The Group has paid $8.0 million in cash in September
2021. The balance of the transaction is payable by the issue of IMDEX shares over a three-year period, with an option to settle the
payment by equivalent cash value based on the prevailing share price at the date of each anniversary (at IMDEX’s discretion), as set
out below:
•
•
•
The issue of 1,578,117 million of IMDEX Limited ordinary shares upon the first anniversary of completion (“Tranche 1”);
The issue of 1,578,117 million of IMDEX Limited ordinary shares upon the second anniversary of completion (“Tranche 2”);
The issue of 2,104,156 million of IMDEX Limited ordinary shares upon the third anniversary of completion (“Tranche 3”).
The Tranche 3 is applicable if revenue from the DataCloud assets achieves the target agreed between the parties by the
third anniversary of completion. If this revenue target is not achieved any shares will be issued in Tranche 3.
This transaction is considered as 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.
MinePortal intellectual property(i)
Net assets acquired
Satisfied by:
Cash
Equity instruments
Acquisition costs
Fair value of consideration paid/payable
Net cash outflow arising on acquisition:
Cash consideration
Acquisition costs
Less: cash and cash equivalent balances acquired
Net cash outflow
$’000
16,242
16,242
8,000
7,575
667
16,242
8,000
667
-
8,667
(i)
The fair value of the MinePortal intellectual property of $16.2 million is the residual value of the total purchase
consideration.
The fair value of the ordinary shares to be issued as part of the consideration paid for MinePortal ($7.6 million) was determined at
the share price of IMDEX Limited securities at the acquisition date. For Tranche 3, the fair value is modified based on the probability
that the target will be achieved.
Classification | Public
115
Page 49 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
OTHER
Other
5.2
Acquisition of assets/subsidiaries (continued)
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)
Other assets
Property, plant & equipment
Intangibles
Payables
Deferred tax liability
Net assets acquired
$’000
11
130
177
3
5,500
(150)
(1,650)
4,021
(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
(4,021)
4,094
Goodwill of $4.1 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
The balance of deferred consideration liability in relation to the acquisition of AusSpec is $1.5 million (FY21: $2.5 million).
Subsequent to year end, on 1 July 2022, a payment of $1.5 million in cash pursuant to a revised agreement was made on the
achievement of certain new revenue-generating contracts (previously $1.0 million in cash and $0.5 million IMDEX shares).
Included in the Group result for prior year was a loss after tax of $0.1 million in relation to AusSpec. Revenue for prior year
included $0.8 million in respect of AusSpec. Had the acquisition occurred on 1 July 2020, the Group’s financial performance for the
prior period would not be significantly different.
116
Classification | Public
Page 50 of 67
IMDEX Annual Report 2022
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
Dividend paid
Retained loss at the end of the financial year
30 June 2022
$’000
30 June 2021
$’000
19,863
149,857
169,720
12,486
22,795
35,281
134,439
169,078
16,579
(1,695)
(49,523)
134,439
47,151
104,079
151,230
10,532
30,608
41,140
110,090
169,078
7,436
(1,695)
(64,729)
110,090
Year Ended
30 June 2022
$’000
Year Ended
30 June 2021
$’000
28,289
-
28,289
(64,729)
-
28,289
(13,083)
(49,523)
26,708
-
26,708
(97,664)
(513)
26,708
6,740
(64,729)
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.
Classification | Public
117
Page 51 of 67
IMDEX Annual Report 2022
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 2022
$’000
30 June 2021
$’000
84,270
103,377
-
-
334
334
Subsidiaries
Parent Entity
Imdex Limited
Notes
Country of
Incorporation
Ownership Interest
2021
2022
%
%
(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
Imdex DO Brasil Industria e Comercio Ltda
Imdex Global B.V.
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)
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
Brazil
Netherlands
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
118
Classification | Public
Page 52 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
Other
OTHER
5.3
(i)
(ii)
(iii)
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).
The consolidated income statement of the entities which are party to the deed of cross guarantee are:
Income Statement
2022
$’000
2021
$’000
Revenue from sale of goods, rentals and software
158,518
125,345
Other income
Foreign exchange gain / (loss)
Raw materials and consumables used
Employee benefit expenses
Depreciation and amortisation expense
Finance costs
Consulting and legal expenses
Rent and premises costs
Travel and accommodation
Motor vehicle costs
Research and development costs
Allowance for expected credit losses
Other expenses
Share of loss of an associate
Impairment loss net of related fair value adjustment
Profit before income tax expense
Income tax expense
Profit for the year
38,689
(1,682)
(58,087)
(47,100)
(10,984)
(1,896)
(12,848)
(1,701)
(1,674)
(192)
(16,369)
521
(10,945)
(675)
(2,871)
30,704
(3,768)
26,936
26,872
(2,720)
(44,812)
(36,324)
(11,070)
(2,438)
(9,192)
(1,161)
(604)
(184)
(12,289)
167
(10,841)
-
2,917
23,666
(1,869)
21,797
Classification | Public
119
Page 53 of 67
IMDEX Annual Report 2022
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
Investment in an associate
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
Dividends paid
Net profit
Retained earnings at the end of the financial year
120
2022
$’000
2021
$’000
20,773
45,618
30,356
3,234
99,981
108,951
10,079
14,475
6,745
8,264
5,031
153,545
253,526
38,212
2,079
4,326
44,617
8,676
18,508
12,166
303
39,653
84,270
169,256
169,042
16,676
7,242
(23,704)
169,256
(37,557)
-
(13,083)
26,936
(23,704)
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)
(6,740)
21,797
(37,557)
Classification | Public
Page 54 of 67
IMDEX Annual Report 2022
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.
fair value adjustments arising on the
Goodwill and
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-
transferability, exercise
restrictions, and behavioural
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, 4 October 2018 and 7 October 2021. 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.
Classification | Public
121
Page 55 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
OTHER
Other
5.4
Reserves (continued)
Performance rights granted in the current and prior year
Tranche 23 -
Executives
$
Tranche 23 -
Employees
$
Nil
1,464,179
12-Aug-21
Nil
1,783,958
16-Aug-21
CEO rights
$
Nil
214,396
25-Jun-21
Tranche 22
$
Nil
3,640,787
01-Jul-20
Tranche 21
$
Nil
3,407,658
01-Jul-19
MD Tranche
$
Nil
381,760
21-Oct-19
STI Rights
$
Nil
1,697,344
01-Jul-21
01-Jul-21
01-Jul-21
12-Aug-21
01-Jul-20
01-Jul-19
01-Jul-19
01-Jul-21
3.00
3.00
3.00
3.00
3.00
3.00
1.00
2.00
30-Jun-24
Note 1
$1.835
$2,474,698
$704,759
2.00
30-Jun-24
Note 1
$2.185
$3,757,945
$1,120,495
2.12
11-Aug-24
Note 2
$1.859
$188,562
$55,449
1.00
30-Jun-23
Note 3
$1.047
$3,301,800
$823,842
0.00
30-Jun-22
Note 3
$1.109
$2,890,627
$437,935
0.25
31-Oct-22
Note 4
$1.109
$141,447
$34,073
1.00
30-Jun-23
Note 5
$1.930
$3,275,874
$1,637,937
Item
Exercise price
Number of rights granted
Grant date
Commencement of
measurement period
Performance period
(years)
Remaining performance
period (years)
Vesting date
Vesting conditions
Valuation per right at grant
date
Estimated total cost
Current period cost
Note 1.
3,248,137 performance rights were issued to employees in November 2021 (50% based on Relative TSR, 20% based on absolute EPS and 30% based
on strategic measures). Upon successful achievement of the hurdles, allotment of these performance rights will be in September 2024 (once the
2024 financial year independent audit report is signed).
Exercise of the performance rights at the end of the 3-year period will commence when the Company’s performance (as calculated by the Performance
Measures) is at 50% and above. At 50%, the allocation will be 50% of the total entitlement. This entitlement increases on a linear scale and achieves
100% entitlement when the Company’s performance is at the 75th percentile.
The number of Relative TSR Rights and EPS Rights that vest is based on the Relative TSR performance against a peer group consisting of the ASX300
Resources Index and against absolute EPS performance over the 3-year measurement period. The Strategic Rights vest subject to growth in new
businesses from transformational (non-core) revenue linked to the transformational (non-core) component of the research and development
budget. Performance relating to the Strategic Rights is assessed by the Board of Imdex at the end of the performance period.
Note 2.
The CEO Rights vest subject to the continued service of the holder over three years from the date of issue of the CEO Rights.
Note 3.
3,640,787 performance rights were issued to employees in July 2020 (3,407,658 in July 2019) (50% based on Relative TSR and 50% based on
Relative EPS). Upon successful achievement of the hurdles, allotment of these performance rights will be in September 2023 (Tranche 21
September 2022) once the financial year independent audit report is signed.
Note 4.
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 (50% based on Relative TSR and 50% based on Relative EPS). The former Managing Director forfeited 254,158 performance
rights on his retirement on 1 July 2020. Upon successful achievement of the 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).
Note 5.
The Company provides an option for the employees to defer the STI payments with additional performance rights (STI Rights) based on employee’s
elections by 30 April 2022. The STI Rights will be vested over a 12-month vesting period subject to continued employment with the Company, from
1 July 2022. The number of STI Rights is calculated based on a 5-day VWAP of the Company’s shares up to 30 June.
122
Classification | Public
Page 56 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
OTHER
Other
5.4
Reserves (continued)
Outstanding Performance Rights
2022
Grant
Date
1-Jul-18
4-Nov-18
1-Jul-19
21-Oct-19
1-Jul-20
12-Aug-21
25-Jun-21
Expiry
Date
Jul-21
Jul-21
Jul-22
Jul-22
Jul-23
Jul-24
Aug-24
Exercise
Price
$
Market
value at
grant
date $
-
-
-
-
-
-
-
0.947
1.079
1.109
1.109
1.047
2.027
1.859
Opening
balance
2,438,151
364,086
2,900,924
127,602
3,561,042
-
-
Estimated Number of Performance Rights
Satisfied
by the
allotment
of shares
Granted
Expired ^
- (1,627,417) (810,734)
(236,766) (127,320)
-
(293,233)
-
-
-
(407,460)
-
(210,250)
3,248,137
-
214,396
-
-
-
-
-
Closing
balance
-
-
2,607,691
127,602
3,153,582
3,037,887
214,396
Estimated Number of Performance Rights
Grant
Date
1-Jul-17
19-Oct-17
1-Jul-18
4-Nov-18
1-Jul-19
21-Oct-19
1-Jul-20
Expiry
Date
Jul-20
Jul-20
Jul-21
Jul-21
Jul-22
Jul-22
Jul-23
Exercise
Price
$
Market
value at
grant
date $
-
-
-
-
-
-
-
0.740
0.965
0.947
1.079
1.109
1.109
1.047
Opening
balance
3,888,120
643,762
2,626,391
364,086
3,300,386
127,602
-
Satisfied
by the
allotment
of shares
Granted
- (3,408,944)
(547,348)
-
-
-
-
-
-
-
-
-
-
3,640,787
Expired ^
(479,176)
(96,414)
(188,240)
-
(399,462)
-
(79,745)
Closing
balance
-
-
2,438,151
364,086
2,900,924
127,602
3,561,042
Tranche 20
MD Tranche
Tranche 21
MD Tranche
Tranche 22
Tranche 23
CEO Tranche
2021
Tranche 19
MD Tranche
Tranche 20
MD Tranche
Tranche 21
MD Tranche
Tranche 22
^ - 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.
Classification | Public
Page 57 of 67
123
IMDEX Annual Report 2022
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.
Subsequent to 30 June 2022, a Federal Court judgement was
delivered on the 12th July 2022 relating to a case whereby
the Group was seeking to invalidate a Globaltech
Corporation Pty Ltd patent. The Group was unsuccessful in
its petition to the court, with the patent being upheld. The
initial decision has granted costs be payable to Globaltech
Corporation Pty Ltd. The parties are yet to agree on the
quantum of costs and if this cannot be agreed, costs will
need to be determined by the Registrar of the Court. The
Group is seeking to stay the outcome of this judgment
subject to appeal, which is not expected to be determined
until the end of 2022 or early 2023 (depending on court
availability). In the event the appeal is successful, the costs
decision would likely be overturned.
The Group has also sought to reserve its rights to apply to
set off its costs against payment due by Globaltech
Corporation Pty Ltd in a separate Federal Court proceeding
(NSD1089/2016), a matter in which the Group have had a
judgment in their favour where Globaltech has been found
to be infringing the Group patent and the parties are
progressing to a hearing on damages.
Whilst the outcome of these legal proceedings are, by their
nature, uncertain, the Directors do not currently anticipate
that the outcome of the proceedings either individually or in
aggregate will have a material adverse effect on upon the
Group’s financial position.
An estimated of the financial effect of this matter has not
been provided because it is not practicable to do so.
(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.
An estimated of the financial effect of this matter has not
been provided because it is not practicable to do so.
124
Classification | Public
Page 58 of 67
IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
OTHER
Other
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
2022
$
4,106,200
170,899
41,678
281,098
997,611
5,597,486
2021
$
4,098,805
166,817
49,525
111,024
864,319
5,290,490
5.7
Related party transactions
Other transactions with key management personnel (and their related parties) of IMDEX
There are no other transactions and balances with key management personnel and their related parties during the current period.
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
2022
$
2021
$
-
16,200
During the prior 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.
Classification | Public
Page 59 of 67
125
IMDEX Annual Report 2022
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
2022
$
2021
$
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
- Other services
- IT support services
Other auditors and their related network firms
Audit or review of the financial report
- Subsidiaries
Other services:
- Accounting and other services
(i)
(ii)
432,000
182,500
614,500
407,500
125,480
532,980
13,800
12,750
3,140
2,507
47,250
-
52,897
681,197
2,440
2,660
-
13,322
18,422
564,152
149,759
105,534
2,101
2,101
151,860
884
884
106,418
(i)
(ii)
Related to Payment Times Reporting services.
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 prior period up to transition of this contract to a new service provider.
5.9
Subsequent events
Subsequent to the end of the financial year, the Group finalised a Deed of Termination and Settlement with the prior owners of the
Flexidrill technologies, with final settlement paid in August 2022. This has not resulted in any material change to the deferred
consideration liability recognised at 30 June 2022 (refer to Note 4.8).
Other than the above, 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.
126
Classification | Public
Page 60 of 67
IMDEX Annual Report 2022
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
14 August 2022
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 2022, 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
DELOITTE TOUCHE TOHMATSU
PPeetteerr RRuupppp
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
127
IMDEX Annual Report 2022
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 2022, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of profit or loss and other comprehensive income
statement of 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)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial
performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We
are independent of the Group in accordance with the auditor independence requirements of the Corporations Act
2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We 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.
128
IMDEX Annual Report 2022
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
RReeccoovveerraabbiilliittyy ooff nnoonn--ccuurrrreenntt aasssseettss
OOuurr pprroocceedduurreess iinncclluuddeedd,, bbuutt wweerree nnoott lliimmiitteedd ttoo:
Included in the Group’s consolidated statement of
financial position at 30 June 2022 are goodwill,
intangible assets, right of use lease assets and property,
plant and equipment totalling $181.5 million.
• 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, including:
Management undertakes impairment testing to test
the recoverability of goodwill annually. Additionally, an
assessment is made as to whether any non-current
assets, including those not yet available for use, or cash
generating units (‘CGU’s) may be impaired at balance
date.
Management did not identify any impairment triggers
except for COREVIBE tangible and intangible assets
following the decision to cease further development of
the COREVIBE technology.
The assessment requires significant judgement due
to the assumptions and estimates involved in preparing
a value in use (‘VIU’) model to estimate the recoverable
amount of CGU’s, and other non-current assets subject
to assessment, including:
•
•
forecast future cash flows; and
discount rates.
-
-
performing our own assessment at the
CGU level by confirming, in conjunction
with our valuations specialists, that the
implied EBITDA multiple for each CGU
exceeded an acceptable market-based
EBITDA multiple at balance date;
assessing budgets and forecasts for
reasonableness by reference to our
knowledge of the business, review of
board minutes and external factors
known in the market;
• Obtaining management’s assessment of non-
current assets, including those not yet available for
use (for example Capital Works in Progress), and
considered the trigger assessment performed, in
conjunction with our valuation specialists;
At 30 June 2022, impairment write-downs have been
recognised in respect of the COREVIBE intangible asset
($12.1 million), COREVIBE inventory ($1.6 million) and
associated fixed assets ($0.4 million) which relate to
the Flexidrill acquisition.
•
Assessing the impairment recognised in respect of
COREVIBE and the reasonableness of
management’s assumptions by reference to the
non-achievement of the required IMDEX
engineering performance hurdles;
•
Considering the adequacy of the related disclosure
in notes 2.6 and 4.8.
The $2.9 million impairment loss, net of related fair
value movement, recognised in the statement of profit
or loss and other comprehensive income is presented
net of the $11.2 million fair value gain on
the remeasurement of the Deferred Consideration
liability which also relates to the Flexidrill acquisition.
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 2022, 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.
129
IMDEX Annual Report 2022
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report, or our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as
the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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 skepticism 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
intentional omissions,
misrepresentations, or the override of internal control.
involve collusion, forgery,
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.
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IMDEX Annual Report 2022
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 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 pages 66 to 80 of the Directors’ Report for the year ended 30
June 2022.
In our opinion, the Remuneration Report of IMDEX Limited, for the year ended 30 June 2022, 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.
DELOITTE TOUCHE TOHMATSU
PPeetteerr RRuupppp
Partner
Chartered Accountants
Perth, 14 August 2022
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IMDEX Annual Report 2022
IMDEX LIMITED
and its controlled entities
ADDITIONAL SECURITIES EXCHANGE INFORMATION
Additional Securities Exchange Information as at 11 August 2022
AS AT 11 AUGUST 2022
(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
L1 CAPITAL PTY LTD
VANGUARD GROUP HOLDINGS
FMR LLC
YARRA CAPITAL MANAGEMENT GROUP
BLACKROCK INC
(c) Twenty Largest Holders of Quoted Equity Securities
Ordinary Shareholders
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSI EDA
BNP PARIBAS NOMS PTY LTD
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