K-TIG Limited and Its Controlled Entities
Appendix 4E
1. Company details
Name of entity:
ABN:
Reporting period:
Previous period:
K-TIG Limited
28 158 307 549
For the year ended 30 June 2021
For the year ended 30 June 2020
2. Results for announcement to the market
$
Revenues from ordinary activities
Up
368% to
1,561,556
Loss from ordinary activities after tax attributable to the owners of K-
TIG Limited
Down
47% to
(4,482,667)
Loss for the year attributable to the owners of K-TIG Limited
Down
47% to
(4,482,667)
Dividends
No dividend has been declared or paid for the year ended 30 June 2021 (30 June 2020: $nil).
Brief explanation of any of the figures reported above
The Group recorded $1,561,556 of revenue for the current year (2020: $333,366). The loss from ordinary activities for
the Group after providing for income tax amounted to $4,482,667 (30 June 2020: $8,411,825). Loss from ordinary
activities decreased mainly due to acquisition costs related to the acquisition of Keyhole TIG Limited incurred in the prior
year.
The Group continued to grow its international operations during the year with continued expansion in the USA with
appointment of key executives, signing of key distribution agreement and establishment of K-TIG demonstration and
support facility. Given the success of the US expansion, K-TIG also announced its UK and Europe market expansion
through the appointment of key management. K-TIG as continued to work with Defence Primes to demonstrate the
advantages of keyhole TIG welding to their applications. K-TIG continues to invest in R&D to expand the range of
metals that have independently verified welding protocols.
3. Net tangible assets
Reporting
period
Cents
Previous
period
Cents
Net tangible assets / (liabilities) per ordinary security
3.43
2.50
Right-of-use assets recognized under AASB 16 Leases are classified as intangible assets for the purpose of
determining the net tangible assets
K-TIG Limited and Its Controlled Entities
Appendix 4E
4. Control gained over entities
Name of entities (or group of entities)
Keyhole TIG (USA) Inc.
Date control gained
11 August 2020
During the financial year, K-TIG Limited incorporated a subsidiary entity in the USA to support the growth of K-TIG’s
business in this key international market.
Contribution of such entities to the reporting entity's loss from ordinary activities before income tax
during for the period 1 July 2020 to 30 June 2021
Loss from ordinary activities before income tax of the controlled entity for the whole of the previous
period
$
(621,291)
-
5. Loss of control over entities
Name of entities (or group of entities)
Date control lost
Vesseltech Pty Ltd
28 October 2020
During the financial year, Vesseltech Pty Ltd, a wholly owned subsidiary of K-TIG Limited, was deregistered. The
company had been dormant for the period up to date of deregistration in the current financial year.
6. Details of associates and joint venture entities
There are no associates or joint ventures during the period or previous reporting period.
7. Audit qualification or review
The financial statements have been audited.
Details of audit/review dispute or qualification (if any):
Not applicable.
8. Attachments
Details of attachments (if any):
The audited consolidated annual report of K-TIG Limited for the year ended 30 June 2021 is attached.
Signature:
___________________________
Stuart Carmichael
Chairman
31 August 2021
K-TIG Limited and Its Controlled Entities
ABN 28 158 307 549
Consolidated Annual Report - 30 June 2021
K-TIG Limited and Its Controlled Entities
Corporate Directory
For the year ended 30 June 2021
Directorships as at the date of this
report
Stuart Carmichael, Chairman
Syed Basar Shueb, Non-executive Director
Adrian Smith, Managing Director
Mark Twycross, Non-executive Director
Anthony McIntosh, Non-executive Director
Company secretaries
Registered office
Principal place of business
Share registry
Auditor
Solicitors
Principal Bankers
Brett Tucker
Deborah Ho
Ground Floor
16 Ord Street
West Perth WA 6005
Building 5
9 William Street
Mile End SA 5031
Phone: (08) 7324 6800
Automic Group
Level 2, 267 St Georges Terrace
Perth WA 6000
BDO Audit (SA) Pty Ltd
BDO Centre
Level 7, 420 King William Street
Adelaide SA 5000
HWL Ebsworth Lawyers
Level 20, 240 St Georges Terrace
Perth WA 6000
Westpac Banking Corporation
275 Kent Street
Sydney NSW 2000
Stock exchange listing
K-TIG Limited shares are listed on the Australian Securities Exchange
(ASX code: KTG)
Website
www.k-tig.com
K-TIG Limited and Its Controlled Entities
Contents
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
2
3
19
20
21
22
24
25
61
62
66
K-TIG Limited and Its Controlled Entities
Review of Operations
For the year ended 30 June 2021
Overview
K-TIG is a transformative, industry disrupting welding technology that seeks to change the economics of fabrication. K-
TIG’s high speed precision welding technology welds up to 100 times faster than traditional TIG welding, achieving full
penetration in a single pass in materials up to 16mm in thickness and typically operates at twice the speed of plasma
welding.
K-TIG works across a wide range of applications and is particularly well suited to corrosion resistant materials such as
stainless steel, nickel alloys, titanium alloys as well as carbon steels and most exotic materials. It easily handles longitudinal
and circumferential welds on pipes, spooling, vessels, tanks and other materials in a single pass.
Originally developed by the CSIRO, K-TIG owns all rights, title and interest in and to the proprietary and patented
technology and has been awarded Australian Industrial Product of the Year and the DTC Defence Industry Award.
2021 Highlights
During the year, K-TIG has made substantial progress and delivered on key business milestones.
Revenue Growth
• Revenue increased by 368% to $1,56m (2020: $0.3m)
• Operating cash receipts increased by 92% to $1m (2020: $0.5m)
• Continued sales momentum and increase in sales pipeline as potential customers responded to the increased
capabilities of the USA subsidiary and UK and Europe market expansion
Strong Balance Sheet
• Cash of $5.1m
• Net assets of $5.9m
Business Development and Operations
Despite a challenging macroeconomic environment in view of the global Covid-19 pandemic, K-TIG achieved a number of
key milestones during the year including:
• Successfully raised $5.6m (before costs) via a private placement with strong support from existing major shareholders,
new institutions & family offices, a sophisticated investors
• Established USA operations and appointed two senior business development executives to drive the USA market
expansion
• Signed USA distribution agreement with Key Plant including the establishment of a demonstration facility in Houston to
showcase the technology to new clients across aerospace, defence and oil and gas industries providing a platform for
sales acceleration
• Successfully demonstrated the weldability of High Hardness Armour, HHA, which advance K-TIG’s eligibility for
upcoming Defence procurements, both nationally and internationally
• Achieved first sales into the USA nuclear waste container industry
• Successfully developed welding procedures for A516 Grade 70 Carbon Steel – a high strength, low alloy steel plate
used globally to make critical components for heavy industries
• K-TIG partner Axiom Precision Manufacturing secured $1m in funding from the Australian government to fast track the
deployment of advanced welding technology to the Australian multi-billion dollar defence industry
• Signed of an MOU to develop advanced keyhole welding procedures for Hanwha Defense Australia and Hanwha
Defense Corporation (collectively referred to as “Hanwha”) where K-TIG will work with Hanwha to develop automated
welding procedures for the manufacture of components of the Land 8116 and Land 400 Phase 3 vehicles
• Signed of distribution agreement with UK based WB Alloy
• Development of welding protocols for A106B and A333 carbon steels
• Signed a contract with USA based integrated logistics supplier DT Gruelle Group to manage K-TIG’s USA supply chain
• Strengthened the executive management team to support continued international growth and allow the business to
execute on a number of strategic fronts
K-TIG remains focused on accelerating its strategic pillars including enhancing its presence in the USA, UK and European
markets, advancing K-TIG’s technology in the multi-billion dollar defence industry and undertaking R&D, in house and in
conjunction with innovative customers, to develop welding solutions for other metals such as aluminum, other exotics and
for other highly specialised industries.
2
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
The Directors present their report, together with the financial statements, on K-TIG Limited (“K-TIG” or “Company”) and its
controlled entities (“consolidated group”) for the for the year ended 30 June 2021.
Directors
The following persons were directors of K-TIG Limited during the whole of the financial year and up to the date of this report,
unless otherwise stated:
Stuart Carmichael
Syed Basar Shueb
Mark Twycross
Adrian Smith
Anthony McIntosh
Principal activities
K-TIG is a transformative, industry disrupting welding technology that is changing the economics of fabrication with its
proprietary high-speed precision welding technology.
Dividends
No dividends were declared or paid out during the financial year (30 June 2020: Nil).
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the consolidated group during the financial year.
Review of operations
Refer to the Review of Operations in the preceding section.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the
consolidated group’s operations, the results of those operations, or the consolidated group's state of affairs in future financial
years.
Likely developments and expected results of operations
The Company continues to build an extensive sales pipeline in key growth markets, including the United States, United
Kingdom and Europe.
Environmental regulation
The consolidated group is not subject to any significant environmental regulation under Australian Commonwealth or State
law.
3
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Stuart Carmichael
Non-executive Chairman (Appointed 30 June 2017)
B Com, C.A (Aust)
Mr Carmichael has extensive international corporate advisory, mergers and
acquisitions, and operational experience. Mr Carmichael held various senior
executive leadership positions with UGL, DTZ, AJG and KPMG Corporate Finance.
Mr Carmichael has extensive corporate and operational experience across multiple
geographies having lived and worked in the US, UK, Europe, the Middle East and
Australia.
Mr Carmichael’s sector experience includes the construction, transportation and
logistics, facilities management, corporate real estate and professional services
sectors. Mr Carmichael graduated from the University of Western Australia with a
Bachelor of Commerce degree, majoring in Accounting and Finance and is a qualified
Chartered Accountant.
Non-Executive Chairman of Schrole Limited (ASX:SCL)
Non-Executive Director of De.mem Limited (ASX:DEM)
Non-Executive Director of ClearVue Technologies Limited (ASX:CPV)
Non-Executive Director of Swick Mining Services Limited (ASX:SWK)
Non-Executive Director of Osteopore Limited (ASX:OSX)
Non-Executive Director of Harvest Technology Group Limited (ASX:HTG)
Former directorships (last 3 years): -
Interests in shares:
Interests in options:
Interests in performance rights:
175,438 fully paid ordinary shares
370,000 unlisted options exercisable at $0.30 per option, expiring 30 Sep 2023
500,000 Class A Performance Rights
500,000 Class B Performance Rights
500,000 Class C Performance Rights
4
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
Name:
Title:
Qualifications:
Experience and expertise:
Syed Basar Shueb
Non-executive Director (Appointed 30 September 2019)
Bachelor of Science in Computer Engineering
Mr Shueb is the General Manager of the Pal Group of Companies, a subsidiary of the
Abu Dhabi-based Royal Group, chaired by His Highness Sheikh Tahnoon Bin Zayed
Al Nahyan, and is the Chairman of Royal Falcon Mining LLC. Mr Shueb has extensive
experience in the process, manufacturing, fabrication, construction and service
industries.
Other current directorships:
-
Former directorships (last 3 years): -
Interests in shares:
Interests in options:
Interests in performance rights:
2,528,155 fully paid ordinary shares
180,000 unlisted options exercisable at $0.30 per option, expiring 30 Sep 2023
500,000 Class A Performance Rights
500,000 Class B Performance Rights
500,000 Class C Performance Rights
Name:
Title:
Qualifications:
Experience and expertise:
Mark Twycross
Non-executive Director (Appointed 20 February 2020 – 16 March 2020, from 28 July
2020)
Executive Director (Appointed 16 March 2020 – 28 July 2020)
BSc civil engineering, Grad diploma business, FAICD
Mr Twycross has over 40 years in the energy, oil and gas, water and infrastructure
industries in Australasia (Australia, New Zealand and Papua New Guinea) Southeast
Asia, Middle East, Africa, Caspian and United Kingdom. Mr Twycross brings a track
record of securing major contracts and contract execution to clients in the oil and gas,
and water infrastructure sectors.
Mr Twycross has previously held senior executive leadership positions with Quanta
Services and McConnell Dowell.
Other current directorships:
-
Former directorships (last 3 years): -
Interests in shares:
Interests in options:
Interests in performance rights:
40,000 fully paid ordinary shares
180,000 unlisted options exercisable at $0.30 per option, expiring 30 Sep 2023
500,000 Class A Performance Rights
500,000 Class B Performance Rights
500,000 Class C Performance Rights
5
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
Name:
Title:
Qualifications:
Experience and expertise:
Adrian Smith
Managing Director (Appointed 1 November 2020)
Executive Director (Appointed 28 July 2020 – 1 November 2020)
Non-executive Director (Appointed 20 February 2020 - 28 July 2020)
B.E. (Hons), B.SC. MBA, FAICD
Mr Smith has both large public company and private SME board experience who has
demonstrated history of growing innovative, business to business companies in both
Managing Director and Chief Executive Officer roles.
Skilled at working with technology and business entrepreneurs to transition
companies from small start-ups into sustainable enterprises, Mr Smith brings a strong
focus on managing people and relationships to deliver exceptional performance.
Mr Smith is currently Non-executive Director of Universal Motion Simulation, UniSA
Ventures, and an Advisory Board Member of elmTEK. Mr Smith has previously had
the role of Managing Director of Rheinmetall Defence Australia Pty Ltd. Previously,
Mr Smith was the founder and Chief Executive Officer of Sydac, a simulation and
training business. Sydac was founded in 1988 and culminated in becoming the world’s
#2 supplier of railway training systems with a staff of 135 and offices in Australia,
Europe and India before negotiating an exit with German multi-national Knorr-Bremse
GmbH.
Other current directorships:
-
Former directorships (last 3 years): -
Interests in shares:
100,000 fully paid ordinary shares
4,500,000 vesting long-term incentive shares
180,000 unlisted options exercisable at $0.30 per option, expiring 30 Sep 2023
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Anthony McIntosh
Non-executive Director (Appointed 23 June 2020)
B Com, GAICD
Mr McIntosh has extensive experience in investment marketing, investor relations and
strategic planning, with a focus on small caps, as well as a strong and well-established
network of stockbroking and investment fund manager.
Mr McIntosh is a graduate of the Australian Institute Company Director course and
Bond University with a Bachelor of Commerce degree majoring in marketing.
Other current directorships:
Non-executive Director of Alice Queen Limited (ASX:AQX)
Non-executive Director of Strategic Energy Resources Limited (ASX:SER)
Non-Executive Director of Copper Strike Resources Limited (ASX:CSE)
Former directorships (last 3 years): Non-executive Director of Echo Resources Limited (ASX: EAR) – November 2019
Interests in shares:
Interests in options:
Interests in performance rights:
Non-executive Director of Symbol Mining Limited (ASX:SL1) – June 2019
975,000 fully paid ordinary shares
180,000 unlisted options exercisable at $0.30 per option, expiring 30 Sep 2023
500,000 Class A Performance Rights
500,000 Class B Performance Rights
500,000 Class C Performance Rights
Other current directorships quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated. Former directorships (last 3 years)' quoted above are directorships held in
the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated.
6
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
Joint company secretary
Brett Tucker (Appointed 5 January 2017)
Mr. Tucker has acted as Company Secretary to a number of ASX listed and private companies and has been involved in
numerous public corporate acquisitions and transactions. Mr. Tucker is a Chartered Accountant with a strong corporate and
compliance background gained from experience in an international accounting practice, working in both audit and taxation
across a wide range of industries.
Deborah Ho (Appointed 31 January 2019)
Ms. Ho has over seven years of experience in company secretarial, corporate compliance and financial accounting matters.
She has acted as Company Secretary and financial accountant for a number of Australian publicly listed companies and has
also gained audit experience from her time with international accounting practices. She holds a Bachelor of Commerce from
Curtin University and is an Associate Member of the Governance Institute of Australia.
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the
year ended 30 June 2021, and the number of meetings attended by each director were:
Stuart Carmichael
Syed Basar Shueb
Mark Twycross
Adrian Smith
Anthony McIntosh
Board Meeting
Audit and Risk Committee*
Eligible to
Attend
13
13
13
13
13
Attended
13
-
13
12
13
Eligible to
Attend
-
-
-
-
-
Attended
-
-
-
-
-
* These are conducted by the Board as a whole, as part of board meetings.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the consolidated group, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The Board is responsible for determining and reviewing compensation arrangements for Directors and Senior Executives.
The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a yearly basis by
reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from
the retention of a high-quality board and executive team. The expected outcome of this remuneration structure is to retain
and motivate the Directors and Senior Executives.
As part of its Corporate Governance Policies and Procedures, the board has adopted a formal Remuneration Committee
Charter and Remuneration Policy. Currently, the full Board performs the function of the Remuneration Committee. Given that
the consolidated group remains at an early stage of development, the Board’s overall approach to compensation remains
subject to change and will continue to evolve as the consolidated group grows and develops its business.
In accordance with best practice corporate governance, the structure of non-executive director and executive director /
managing director remuneration is separate.
7
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
Non-executive directors’ remuneration
The Constitution provides that the remuneration of non-executive Directors will not be more than the aggregate fixed sum
determined by a general meeting of shareholders. The remuneration of executive Directors will be fixed by the Directors and
may be paid by way of fixed salary or consultancy fee.
Fees and payments to non-executive Directors reflect the demands which are made on, and the responsibilities of, the
Directors. Non-executive Directors’ fees and payments are reviewed annually by the Board. Non-executive Directors do not
receive performance-based pay.
All non-executive Directors are currently paid an annual stipend of A$15,000 to A$50,000. There are currently no separate
attendance fees or fees payable for chairing any committee. The maximum aggregate amount which has been approved to
be paid to non-executive Directors is currently set at A$200,000 per annum.
Executive directors
Executive Directors are not entitled to receive any additional compensation, including employee options, in their capacity as
Directors.
Chairman’s fees
The chairman’s fees are determined independently to the fees of non-executive Directors based on comparative roles in the
external market.
Additional Fees
A Director may also be paid fees or other amounts as the Directors determine if a Director performs special duties or
otherwise performs services outside the scope of the ordinary duties of a Director. A Director may also be reimbursed for
out-of-pocket expenses incurred as a result of their directorship or any special duties.
Retirement Allowances for Directors
Superannuation contributions required under the Australian Superannuation Guarantee Legislation continue to be made and
are deducted from the Directors’ overall fee entitlements where applicable.
Executive remuneration
Compensation Objectives
Pursuant to the Remuneration Policy, the consolidated group’s compensation policies and practices are designed to:
(a) align executive remuneration with shareholder interests;
(b) retain, motive and reward appropriately qualified executive talent for the benefit of the consolidated group;
(c)
(d)
(e)
to achieve a level of remuneration that reflects the competitive market in which the consolidated group operates;
to ensure that individual remuneration is linked to performance criteria if appropriate; and
to ensure that executives are rewarded for both financial and non-financial performance.
The Board aims to satisfy these objectives through the adoption of a compensation program for executive officers that
combines base remuneration, which is market related, with performance-based remuneration which is determined on an
annual basis. All market comparisons reflect an informal assessment and are based on the Board’s knowledge and
experience in executive compensation matters. No remuneration consultant was retained by the Company in determining
the remuneration of any of the KMP.
Overall remuneration decisions are subject to the discretion of the Board and can be changed to reflect competitive and
business conditions where it is in the interests of the consolidated group and shareholders to do so. Executive remuneration
and other terms of employment are reviewed annually by the Board having regard to the performance and relevant
comparative information.
Compensation Components
In accordance with the remuneration policy, the compensation currently consists primarily of three elements: base salary,
cash bonus and long-term equity incentives. Each element of compensation is described in more detail below.
8
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
Base Salary
A primary element of the Company’s compensation program is base salary. The Company’s view is that a competitive base
salary is a necessary element for attracting and retaining qualified executive officers. The amount payable to an executive
officer is determined based on the scope of his or her responsibilities and prior experience, while taking into account an
informal evaluation of competitive market compensation for similar positions and overall market demand for such executives
at the time of hire.
Base salaries are reviewed annually and increased for merit reasons, based on the executive officer’s success in meeting
or exceeding Company and individual objectives. Additionally, base salaries can be adjusted as warranted throughout the
year to reflect promotions or other changes in the scope or breadth of the executive officer’s role or responsibilities, as well
as for market competitiveness.
Cash Bonus Plan
Remuneration for certain individuals is directly linked to the performance of the consolidated group. A portion of cash bonus
and incentive payments are dependent on defined milestones being met. Ad hoc cash bonuses may be paid from time to
time if deemed appropriate by the Board, based on the attainment of particular objectives.
Long-Term Equity Incentives
Equity-based awards are a variable element of compensation that allow executive officers to be rewarded for their sustained
contributions to the consolidated group. Equity awards reward continued employment by an executive officer, with an
associated benefit to K-TIG of attraction of employees, continuity and retention. Executives may participate in share,
performance rights and option schemes generally made in accordance with thresholds set in plans approved by shareholders
if deemed appropriate. However, the Board considers it appropriate to retain flexibility to issue shares, performance rights
and options to executives outside of approved schemes in exceptional circumstances.
Voting and comments made at the Company's 2020 Annual General Meeting ('AGM')
At the 2020 AGM, 99.71% of the votes received supported the adoption of the remuneration report for the year ended 30
June 2020. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated group are set out in the following tables.
The key management personnel of the consolidated group consisted of the following directors of K-TIG Limited:
●
●
●
●
●
Stuart Carmichael
Syed Shueb
Mark Twycross
Adrian Smith
Anthony McIntosh
9
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
The value of remuneration received, or receivable by key management personnel for the consolidated group for the
financial year is as follows:
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Salary &
fees
$
Cash
bonus
$
Other
fees
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
60,000
32,375
40,000
273,249
35,680
-
-
-
175,000
-
10,820
-
5,000
9,375
-
5,700
3,076
-
22,167
3,390
441,304
175,000
25,195
34,333
-
-
-
-
-
-
-
118,594 195,114
- 118,594 154,045
118,594 163,594
-
403,530 883,321
-
- 118,594 157,664
-
877,906 1,553,738
2021
Directors
Stuart Carmichael
Syed Shueb
Mark Twycross
Adrian Smith
Anthony McIntosh
1 Cash bonus related to mutually agreed revenue and operational KPI’s being met at maximum of 75% of base salary per
Executive Services Agreement
Short-term benefits
Post-
employme
nt benefits
Long-term
benefits
Share-based payments
Salary &
fees
$
Cash
bonus
$
Other
fees
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
shares
$
Equity-
settled
options
$
2020
Directors
Stuart Carmichael
Syed Shueb2
Mark Twycross3
Adrian Smith3
Anthony
McIntosh4
Colm O’Brien5
Michael Edwards6
Kieran Purcell7
Neil Le Quesne8
William Wilson6
Other Key
Management
Personnel
Neil Le Quesne8
David Williams9
45,000
25,375
37,926
11,797
-
25,375
-
24,063
5,475
-
-
-
-
-
-
-
-
-
-
-
8,500
-
5,000
15,000
-
4,275
2,411
1,121
1,121
-
976
2,411
-
-
-
-
-
1,854
-
-
-
-
-
-
-
-
-
-
-
-
290,009
233,904
171,27510
-
-
-
25,001
17,905
(9,992)
-
698,924
171,275
29,476
56,099
(9,992)
-
-
-
-
-
-
-
-
-
-
-
-
-
10
Total
$
103,699
50,127
74,885
58,756
28,163
65,377
-
48,258
34,601
-
45,924
22,341
30,838
30,838
28,163
36,615
-
22,341
29,126
-
-
85,660
476,293
337,469
331,846 1,277,628
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
2
3
4
5
6
7
8
9
10
Appointed 30 September 2019
Appointed 20 February 2020
Appointed 23 June 2020
Resigned 23 June 2020
Resigned 30 September 2019
Appointed 30 September 2019, resigned 20 February 2020
Resigned as a Director in Keyhole on 30 September 2019, and appointed as President Market Development on 30
September 2019. This role is not considered to be a Key Management Personnel role in the financial year ended 30
June 2021.
Appointed as Chief Executive Officer from 30 September 2019 to 16 March 2020
Cash bonus related to specific milestone being met (3 commercial pilot agreement executed), as well as variable
compensation of up to 8% commission on sales achieved by the Executive, or by teams managed by the Executive
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Directors
Stuart Carmichael
Syed Shueb
Mark Twycross
Adrian Smith
Anthony McIntosh
Colm O’Brien
Michael Edwards
Kieran Purcell
Other Key Management
Personnel
Neil Le Quesne
David Williams
Fixed remuneration
2020
2021
At risk - STI
At risk - LTI
2021
2020
2021
2020
39%
23%
28%
80%
25%
-
-
-
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
20%
-
-
-
-
-
-
-
-
-
-
-
-
61%
77%
72%
-
75%
-
-
-
-
-
66%
100%
-
-
34%
-
-
-
-
-
-
-
-
-
-
-
-
-
Cash bonuses are dependent on meeting defined performance measures. Adrian Smith is entitled to an STI cash bonus of
up to 75% of base salary (excluding super) payable each year subject to the satisfaction of mutually agreed revenue and
operational KPI’s. The Board has approved the maximum 75% of base salary payable and the bonus is accrued evenly up
to 30 June 2021 on this basis. The bonus is payable on the anniversary of commencement of employment as Managing
Director.
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Resigned:
Details:
Mark Twycross
Executive Director (resigned 28 July 2020)
16 March 2020
Indefinite term until terminated (1 month written notice)
Resigned as Executive Director and appointed as Non-executive Director on 28 July
2020
Base salary of $7,500 per month plus superannuation
Agreed day rate of $1,000 for any international / interstate attendance
Review of the terms will be conducted by the Board annually
11
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Adrian Smith
Executive Director (to 1 November 2020)
28 July 2020 (amended effective 1 November 2020 as below)
12 months or until terminated (1 month written notice)
Base salary of $7,500 per month plus superannuation
Agreed day rate of $1,000 for any international / interstate attendance
Review of the terms will be conducted by the Board annually
Adrian Smith
Managing Director (from 1 November 2020)
1 November 2020 (as an amendment to existing Executive Services Agreement)
Until 1 November 2023 (1 month written notice)
Base salary of $29,166.67 per month plus superannuation
Cash bonus of up to 75% of base salary (excluding superannuation) subject to
satisfaction of mutually agreed KPI’s
Grant of 4,500,000 long-term incentive shares to be issued at subsequent anniversary
dates of commencement of employment in new role
Review of the terms will be conducted by the Board annually
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
12
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
Share-based compensation
Issue of shares
No ordinary shares were issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2021.
Performance Rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of directors and
other key management personnel in this financial year or future reporting years are as follows:
Number of
performance
rights
granted
Grant date
Milestone date
Expiry date
27/11/2020
22/12/2025
Fair value
per
performance
right
at grant date
Exercise
price
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
27/11/2020
27/11/2020
27/11/2020
Before 1 Apr 2021
Before 1 Oct 2021
Before 1 Oct 2022
Before 1 Apr 2021
Before 1 Oct 2021
Before 1 Oct 2022
Before 1 Apr 2021
Before 1 Oct 2021
Before 1 Oct 2022
Before 1 Apr 2021
Before 1 Oct 2021
Before 1 Oct 2022
22/12/2025
22/12/2025
22/12/2025
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$0.0995
$0.1252
$0.1563
$0.0995
$0.1252
$0.1563
$0.0995
$0.1252
$0.1563
$0.0995
$0.1252
$0.1563
Name
Stuart Carmichael
- Class A
- Class B
- Class C
Syed Shueb
- Class A
- Class B
- Class C
Mark Twycross
- Class A
- Class B
- Class C
Anthony McIntosh
- Class A
- Class B
- Class C
The Performance Rights have the following milestones attached to them and are subject to the milestone dates set out below:
a) Tranche 1 (Class A): 2,000,000 performance rights will vest when the Company achieves a volume weighted average
price (“VWAP”) of at least $0.35 over any twenty consecutive trading day period before 1 April 2021;
b) Tranche 2 (Class B): 2,000,000 performance rights will vest when the Company achieves a VWAP of at least $0.50 over
c)
any twenty consecutive trading day period before 1 October 2021; and
(Tranche 3 (Class C): 2,000,000 performance rights will vest when the Company achieves a VWAP of at least $0.75
over any twenty consecutive trading day period before 1 October 2022.
Performance rights granted carry no dividend or voting rights. All performance rights were granted over unissued fully paid
ordinary shares in the Company. Performance rights vest based on the vesting period whereby the executive becomes
beneficially entitled to the performance rights on vesting date. Performance rights are exercisable by the holder as from the
vesting date. There has not been any alteration to the terms or conditions of the grant since the grant date. There are no
amounts paid or payable by the recipient in relation to the granting of such performance rights.
Tranche 1 had already vested before the relevant milestone date of 1 April 2021 and Tranche 2 has already vested before
the relevant milestone date of 1 October 2021. None of the vested performance rights had been exercised by the holders as
at 30 June 2021.
13
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
The share-based payment expense recognised in relation to performance rights over ordinary shares granted, and the value
of performance rights exercised and lapsed for directors and other key management personnel as part of compensation
during the year ended 30 June 2021 are set out below:
Share-based
payment
expense of
performance
rights
granted
Value of
performance
rights
exercised
Value of
performance
rights
lapsed
during the during the during the
year
$
year
$
year
$
Remuneration
consisting of
performance
rights
for the
year
%
Stuart Carmichael
Syed Shueb
Mark Twycross
Anthony McIntosh
118,594
118,594
118,594
118,594
-
-
-
-
-
-
-
-
61%
77%
72%
75%
Options
No options were granted to directors and other key management personnel as part of compensation during the year ended
30 June 2021.
Long-term incentive shares
The terms and conditions of each grant of long-term incentive shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Number of
long-term
incentive
shares granted
Grant date Vesting date
Fair value
per share
at grant date
1,000,000
1,500,000
2,000,000
27/11/2020
27/11/2020
27/11/2020
1 Nov 2021
1 Nov 2022
1 Nov 2023
$0.27
$0.27
$0.27
Name
Adrian Smith
- Tranche 1
- Tranche 2
- Tranche 3
On 1 November 2020, Mr Smith was appointed as Managing Director of the Company. Shares will be issued at each
anniversary of employment, with 50% of shares issued subject to a voluntary escrow period of 12 months.
The share-based payment expense recognised in relation to long-term incentive shares granted and the value of long-term
incentive shares lapsed for directors and other key management personnel as part of compensation during the year ended
30 June 2021 are set out below:
Share-based
payment
expense of
long-term
incentive
shares
granted
Value of
long-term
incentive
shares
lapsed
during the during the
year
$
year
$
Remuneration
consisting of
long-term
incentive
shares
for the
year
%
Adrian Smith
403,530
-
20%
14
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
Additional information
The earnings of the consolidated group for the five years to 30 June 2021 are summarised below.
2021
$
2020
$
2019
$
2018
$
2017
$
2016
$
Sales revenue
EBITDA
EBIT
Loss after income tax
1,561,556
(4,233,702)
(4,473,399)
(4,482,667)
333,366
(8,245,702)
(8,407,290)
(8,411,825)
1,069,198
(1,641,599)
(1,686,617)
(1,690,187)
2,236,196
(33,018)
(101,189)
(105,787)
1,239,710
(1,166,257)
(1,199,963)
(1,199,963)
1,602,594
(491,402)
(533,842)
(533,842)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2021
2020
2019
2018
2017
Share price at financial year end ($) *
Total dividends declared (cents per share) *
Basic loss per share (cents per share) *
0.44
-
(2.76)
0.185
-
(6.97)
-
-
-
-
-
-
-
-
-
* Despite the consolidated group applying the continuation method of accounting for the acquisition of Keyhole TIG Ltd in
the financial year ended 30 June 2020, the factors affecting the TSR have not been presented for financial years before 30
June 2020 due to incomparable operations and capital structures.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management
personnel of the consolidated group, including their personally related parties, is set out below:
Balance at
the start of
the year
Balance
at
appointment
Received
as part of
remuneration
Additions/
other
Disposals/
other
Balance at
the end of
the year
Ordinary shares
Stuart Carmichael
Syed Shueb
Mark Twycross
Adrian Smith
Anthony McIntosh
175,438
2,528,155
-
-
375,000
3,078,593
-
-
-
-
-
-
-
-
-
-
-
-
-
40,0001
100,0001
600,0001
740,000
-
-
-
-
-
175,438
2,528,155
40,000
100,000
975,000
3,818,593
1
Participation in Company share placement and shares issued following approval by shareholders at the Company’s
Annual General Meeting on 27 November 2020
15
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
Performance rights holding
The number of performance rights over ordinary shares in the Company held during the financial year by each director and
other members of key management personnel of the consolidated group, including their personally related parties, is set out
below:
Balance at
the start of
the year
Granted
upon
appointment
Additions/
other
Exercised
Lapsed
Performance rights over
ordinary shares
Stuart Carmichael
Syed Shueb
Mark Twycross
Adrian Smith
Anthony McIntosh
-
-
-
-
-
-
-
-
-
-
-
-
1,500,0003
1,500,0003
1,500,0003
-
1,500,0003
6,000,000
-
-
-
-
-
-
Balance at
the end of
the year4
-
-
-
-
-
-
1,500,000
1,500,000
1,500,000
-
1,500,000
6,000,000
3
4
Granted following approval by shareholders at the Company’s Annual General Meeting on 27 November 2020
4,000,000 performance rights (1,000,000 per each key management personnel holding these rights) had vested and
were exercisable at 30 June 2021
Option holding
The number of options over ordinary shares in the Company held during the financial year by each director and other
members of key management personnel of the consolidated group, including their personally related parties, is set out below:
Balance at
the start of
the year
Granted
upon
appointment
Additions/
other
Exercised
Lapsed
Balance at
the end of
the year5
Options over ordinary shares
Stuart Carmichael
Syed Shueb
Mark Twycross
Adrian Smith
Anthony McIntosh
440,174
180,000
180,000
180,000
180,000
1,160,174
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(70,174) 6
-
-
-
-
(70,174)
370,000
180,000
180,000
180,000
180,000
1,090,000
5
6
All options are exercisable at 30 June 2021
Lapsed on 30 April 2021 but exercise underwritten in accordance with an underwriting agreement
Long-term incentive shares holding
Following approval by shareholders at the Company’s Annual General Meeting on 27 November 2020, Mr Smith is earning
up to 4,500,000 ordinary shares in the Company. No long-term incentive shares had converted into ordinary shares at 30
June 2021.
Other transactions with key management personnel and their related parties
During the financial year, payments for company secretarial, accounting and corporate advisory fees, totalling $96,531 (30
June 2020: $138,797) were made to Ventnor Capital Pty Ltd (director-related entity of Mr Carmichael). The current trade and
other payable balance as at 30 June 2021 was $12,320 (30 June 2020: $11,132). All transactions were made on normal
commercial terms and conditions and at market rates.
No related party loans were held or provided by the Company at any time during the financial year. During the previous
financial year, related party loans of $359,740 were settled in full through the issue of 5,667,946 ordinary shares of Keyhole
on 1 July 2019. Shares were valued at 6.3 cents per share upon conversion.
This concludes the remuneration report, which has been audited.
16
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
Shares under option
Unissued ordinary shares of K-TIG Limited under option at the date of this report are as follows:
Grant date
30/09/2019
21/02/2020
26/06/2020
Expiry date
30/09/2023
30/09/2023
30/09/2023
Exercise
price
$0.30
$0.30
$0.30
Number
under option
5,472,152
960,000
180,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the
Company or of any other body corporate.
Shares issued on the exercise of options
The following ordinary shares of K-TIG Limited were issued during the year ended 30 June 2021 and up to the date of this
report on the exercise of options granted:
Date options granted
29/01/2018
Exercise
price
$0.23
Number of
shares issued
2,101,428
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the
Company against a liability 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.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
Non-audit services
There were a total of $6,332 non-audit services provided during the financial year by the auditor (30 June 2020: $43,136).
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services as disclosed in Note 24 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 – Part
4A of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Company,
acting as advocate for the Company or jointly sharing economic risks and rewards.
●
Officers of the Company who are former partners of BDO Audit (SA) Pty Ltd
There are no officers of the Company who are former partners of BDO Audit (SA) Pty Ltd.
17
K-TIG Limited and Its Controlled Entities
Directors' report
For the year ended 30 June 2021
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
BDO Audit (SA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Stuart Carmichael
Chairman
31 August 2021
Perth
18
Tel: +61 8 7324 6000
Fax: +61 8 7324 6111
www.bdo.com.au
Level 7, BDO Centre
420 King William Street
Adelaide SA 5000
GPO Box 2018, Adelaide SA 5001
AUSTRALIA
DECLARATION OF INDEPENDENCE
BY GEOFF EDWARDS
TO THE DIRECTORS OF K-TIG LIMITED
As lead auditor of K-TIG Limited for the year ended 30 June 2021, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of K-TIG Limited and the entities it controlled during the period.
Geoff Edwards
Director
BDO Audit (SA) Pty Ltd
Adelaide, 31 August 2021
BDO Audit (SA) Pty Ltd ABN 33 161 379 086 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (SA) Pty Ltd and BDO (Australia) Ltd are members of BDO International
Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation.
K-TIG Limited and Its Controlled Entities
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
Sales revenue
Cost of sales
Gross profit/(loss)
Other income
Expenses
Marketing expenses
Corporate expense
Service expense
Employee benefits expense
Office / workshop expense
Travel expense
R&D expense
Reverse acquisition cost
Excess consideration arising on reverse acquisition
Other expenses
(Loss) before income tax expense
Income tax expense
(Loss) for the year
Other comprehensive income
Total comprehensive loss for the year
Loss per share to the owners of K-TIG Limited
Basic loss per share
Diluted loss per share
Note
Consolidated
2021
$
2020
$
4
5
6
3
7
1,561,556
(780,887)
780,669
333,366
(335,073)
(1,707)
86,300
147,933
(216,762)
(1,066,798)
(316,139)
(3,386,383)
(203,436)
(27,514)
(102,028)
(180,669)
(689,618)
(239,646)
(2,228,853)
(154,598)
(114,839)
(59,314)
- (1,853,772)
(3,000,777)
-
(35,965)
(30,576)
(4,482,667)
(8,411,825)
-
-
(4,482,667)
(8,411,825)
(13,141)
-
(4,495,808)
(8,411,825)
Cents
Cents
34
34
(2.76)
(2.76)
(6.97)
(6.97)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
20
K-TIG Limited and Its Controlled Entities
Consolidated statement of financial position
As at 30 June 2021
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Financial assets
Total current assets
Non-current assets
Other receivables
Property, plant and equipment
Right-of-use assets
Intangibles
Total non-current assets
Liabilities
Current liabilities
Trade and other payables
Amounts received in advance
Borrowings
Lease liabilities
Employee benefits
Total current liabilities
Non-current liabilities
Lease liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share based payment reserve
Foreign currency translation reserve
Accumulated losses
Total equity
Notes
Consolidated
2021
$
2020
$
8
9
10
9
11
12
13
14
15
16
17
18
17
18
19
20
5,064,345
884,728
573,144
40,000
6,562,217
14,150
547,699
80,458
41,933
684,240
7,246,457
871,584
170,945
-
85,209
190,299
1,318,037
-
13,107
13,107
3,493,579
111,670
368,008
-
3,973,257
-
479,242
168,228
52,989
700,459
4,673,716
420,235
114,862
-
87,888
126,665
749,650
85,209
6,242
91,451
1,331,144
841,001
5,915,313
3,832,615
23,443,733
1,739,664
(13,141)
(19,254,943)
17,732,901
871,990
-
(14,772,276)
5,915,313
3,832,615
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
21
K-TIG Limited and Its Controlled Entities
Consolidated statement of changes in equity
For the year ended 30 June 2021
Consolidated
Non-
Redeemable
Series A
Preference
Shares
$
Share based
payments
reserve
$
Foreign
currency
translation
reserve
$
Issued capital
$
Balance at 1 July 2019
2,348,884
2,978,935
603,925
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Issue of share options
Exercise of share options
Conversion to ordinary shares on reverse
acquisition
Issue of shares, net of transaction costs
Issue of shares to advisor
Conversion of borrowings to equity
Issue of options
Options exercised
Reverse acquisition deemed consideration
-
-
-
-
633,051
-
-
-
-
-
2,978,935
(2,978,935)
6,528,788
1,095,000
1,610,780
-
3,792
2,533,671
-
-
-
-
-
-
-
-
-
-
29,126
(633,051)
-
-
-
-
871,990
-
-
Accumulated
losses
$
Total
$
(6,360,451)
(428,707)
(8,411,825)
-
(8,411,825)
-
(8,411,825)
(8,411,825)
-
-
-
-
-
-
-
-
-
29,126
-
-
6,528,788
1,095,000
1,610,780
871,990
3,792
2,533,671
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at 30 June 2020
17,732,901
871,990
-
(14,772,276)
3,832,615
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
22
K-TIG Limited and Its Controlled Entities
Consolidated statement of changes in equity
For the year ended 30 June 2021
Consolidated
Non-
Redeemable
Series A
Preference
Shares
$
Share based
payments
reserve
$
Foreign
currency
translation
reserve
$
Issued capital
$
Accumulated
losses
$
Total
$
Balance at 1 July 2020
17,732,901
871,990
-
(14,772,276)
3,832,615
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Issue of shares, net of transaction costs
Issue of shares to directors, net of transaction
costs
Share-based payments - performance rights,
net of transactions costs
Share-based payments - long-term incentive
shares
Exercise of share options
-
-
-
5,042,503
185,000
-
-
483,329
Balance at 30 June 2021
23,443,733
-
-
-
-
-
-
-
-
-
-
-
-
-
464,144
403,530
-
-
(13,141)
(4,482,667)
-
(4,482,667)
(13,141)
(13,141)
(4,482,667)
(4,495,808)
-
-
-
-
-
-
-
-
-
-
5,042,503
185,000
464,144
403,530
483,329
1,739,664
(13,141)
(19,254,943)
5,915,313
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
23
K-TIG Limited and Its Controlled Entities
Consolidated statement of cash flows
For the year ended 30 June 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Other income
Interest and other finance costs paid
Notes
Consolidated
2021
$
2020
$
946,274
(4,793,079)
442,201
(4,317,879)
(3,846,805)
1,824
84,476
(9,268)
(3,875,678)
3,638
93,080
(8,173)
Net cash used in operating activities
31
(3,769,773)
(3,787,133)
Cash flows from investing activities
Payments for financial assets
Payments for property, plant and equipment
Cash acquired on acquisition
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for rights issue cost
Repayment of lease liabilities
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
3
33
(40,000)
(232,173 )
-
-
(143,192)
30,670
(272,173)
(112,522)
5,710,832
(10,232)
(87,888)
6,532,315
-
(82,901)
5,612,712
6,449,414
1,570,766
3,493,579
2,549,759
943,820
Cash and cash equivalents at the end of the financial year
8
5,064,345
3,493,579
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
24
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated group has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Adoption of the new and amended accounting standards had no material financial impact on the consolidated group.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated group's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in Note 2.
25
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 1. Significant accounting policies (continued)
Reverse Acquisition
On 30 September 2019, K-TIG Limited (previously known as Serpentine Technologies Limited) ('KTG') completed the 100%
acquisition of Keyhole TIG Limited ('Keyhole'). The acquisition of Keyhole resulted in the shareholders of Keyhole obtaining
control of the merged entity. Under Australian Accounting Standard ('AASB') 3 'Business Combinations', the acquisition is to
be accounted for as a reverse acquisition whereby Keyhole is deemed to be the accounting acquirer in this transaction, and
KTG is deemed to be the accounting acquiree. The acquisition has been accounted for as a share-based payment using the
principles set out in AASB 2 'Share-Based Payments', by which Keyhole is deemed to have issued shares in exchange for
the net assets and listing status of KTG. The difference between the fair value of the deemed consideration paid by Keyhole
and the fair value of the identifiable assets of KTG, is required to be recognised as an expense.
Accordingly, the consolidated financial statements of KTG have been prepared as a continuation of the business and
operations of Keyhole, with the exception of the capital structure. Keyhole has accounted for the acquisition of KTG from 30
September 2019. The implications of the acquisition by Keyhole on the financial statements are as follows:
Consolidated Statement of Profit or Loss and Other Comprehensive Income
•
The statement of profit or loss and other comprehensive income comprises the total comprehensive income for the year
ended 30 June 2020 for Keyhole as the accounting parent and KTG from 30 September 2019 as the accounting
subsidiary.
Consolidated Statement of Financial Position
•
The statement of financial position as at 30 June 2020 represents the K-TIG Limited consolidated group.
Consolidated Statement of Changes in Equity
•
•
The equity balance of Keyhole as at the beginning of the comparative year (1 July 2019).
The total comprehensive income for the year and transactions with equity holders, being 12 months from Keyhole as
the accounting parent and KTG from 30 September 2019 as the accounting subsidiary.
The equity balance of the K-TIG Limited consolidated group as at 30 June 2020.
•
Consolidated Statement of Cash Flows
•
•
•
The cash balance of Keyhole at the beginning of the comparative year (1 July 2019).
The cash balance as at 30 June 2020 reflects the K-TIG Limited consolidated group.
The transactions for the year ended 30 June 2020 for Keyhole as the accounting parent and KTG from 30 September
2019 as the accounting subsidiary.
Equity Structure
The equity structure (the number and type of equity instruments issued) in the financial statements reflects the equity
structure of KTG.
Earnings per Share
The weighted average number of shares outstanding for the year ended 30 June 2020 is based on the combined weighted
average number of shares of the K-TIG Limited consolidated group outstanding in the year.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated group only.
Supplementary information about the legal parent entity is disclosed in Note 28.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of K-TIG Limited ('company' or
'parent entity') as at 30 June 2021 and the results of for the year then ended (in the comparatives, the result of KTG from 30
September 2019 as the accounting subsidiary). K-TIG Limited and its subsidiaries together are referred to in these financial
statements as the 'consolidated group'.
Subsidiaries are all those entities over which the consolidated group has control. The consolidated group controls an entity
when the consolidated group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the consolidated group. They are de-consolidated from the date that control ceases.
26
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 1. Significant accounting policies (continued)
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated group are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Where the consolidated group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
consolidated group recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is K-TIG Limited's functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
Revenue recognition
The consolidated group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated group is expected to be entitled
in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated group:
identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction
price; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling
price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is
generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered.
Revenue from government grants
Grant income is recognised in line with AASB 120, this being when there is reasonable assurance the consolidated group
has complied with the conditions attached to the grant.
27
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 1. Significant accounting policies (continued)
WaaS
Welding as a Service (WaaS) revenue is recognised at an amount which reflects the greater of the monthly minimum charge
or the usage rate stipulated in the contract which the consolidated group is expected to be entitled to under an operating
lease in accordance with AASB 16. The minimum term of the license or lease period is generally three years. The license or
lease equipment is capitalised as an asset and depreciated over the expected useful life being five years. Upon signing of
the license or lease contract the customer is generally required to make a prepayment which is recorded on the statement
of financial position as “Amounts received in advance”. After delivery and commissioning of the WaaS asset, the prepayment
is applied against the monthly fee until it is exhausted.
Interest
Interest income is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
●
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
Prior to the acquisition of Keyhole TIG Limited in September 2019, K-TIG Limited (the 'legal parent') and its wholly-owned
Australian subsidiaries had formed an income tax consolidated group under the tax consolidation regime. K-TIG Limited is
in the process of adding Keyhole TIG Limited to that group. The legal parent and each subsidiary in the tax consolidated
group continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the
'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax
consolidated group.
In addition to its own current and deferred tax amounts, the legal parent also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax
consolidated group.
28
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 1. Significant accounting policies (continued)
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a
contribution by the legal parent to the subsidiaries nor a distribution by the subsidiaries to the legal parent.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
consolidated group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within
12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated group's normal operating cycle;
it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash
and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement
of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
The consolidated group has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Inventories
Materials and components and finished goods are stated at the lower of cost and net realisable value on a 'first in first out'
basis. Cost comprises of direct materials. Costs of purchased inventory are determined after deducting rebates and discounts
received or receivable.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and costs, net of rebates
and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Financial assets
Financial assets are measured at amortised cost if they are held within a business model whose objective is to hold the
financial assets and collect its contractual cash flows, and the contractual terms of the financial assets give rise to cash flows
that are solely payments of principal and interest on the principal amount outstanding. After initial recognition, these are
measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is
immaterial. The consolidated group’s cash and cash equivalents, trade and other receivables fall into this category of financial
instruments.
29
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 1. Significant accounting policies (continued)
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
consolidated group has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, its carrying value is written off.
Impairment of financial assets
The consolidated group recognises a loss allowance for expected credit losses on financial assets which are measured at
amortised cost. The measurement of the loss allowance depends upon the consolidated group's assessment at the end of
each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition,
based on reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment over
their expected useful lives as follows:
Leasehold improvements
WaaS assets
Plant and equipment
Computer Equipment
2 years
5 years
2.5 -20 years
3 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets,
whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the consolidated group expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The consolidated group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
30
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 1. Significant accounting policies (continued)
Intangible assets
Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised and
are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less
amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible
assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. The
method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption
or useful life are accounted for prospectively by changing the amortisation method or period.
Patents and trademarks
Significant costs associated with patents and trademarks are deferred and amortised on a straight-line basis over the period
of their expected benefit, being their finite life of 10 years. Amortisation expense is recognised as R&D expense in the profit
or Loss.
Impairment of non-financial assets
Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated group prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement
of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an
equivalent non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis until
extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance
cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included in shareholders
equity as a convertible note reserve, net of transaction costs. The carrying amount of the conversion option is not remeasured
in the subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.
31
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 1. Significant accounting policies (continued)
Leases
As a lessee
For any new contracts entered on or after 1 July 2019, the consolidated group considers whether a contract is, or contains
a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset)
for a period of time in exchange for consideration’. To apply this definition the consolidated group assesses whether the
contract meet three key evaluations which are whether:
- The contract contains an identified asset, which is either explicitly identified in the contact or implicitly specified by
being identified at the time the asset is made available to the consolidated group;
- The consolidated group has the right to obtain substantially all of the economic benefits from use of the identified
asset throughout the period of use, considering its rights within the defined scope of the contract;
- The consolidated group has the right to direct the use of the identified asset throughout the period of use. The
consolidated group assesses whether it has the right to direct ‘how and for what purposes’ the asset is used
throughout the period of use.
As a lessor
The consolidated group’s accounting policy under AASB 16 has not changed from the comparative period. As a lessor, the
consolidated group classified its leases as either operating or finance leases. A lease is classified as a finance lease if it
transfers substantially all the risks and rewards incidental to ownership of the underlying asset and classified as an operating
lease if it does not.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the consolidated group's incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on
an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset
is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Provisions
Provisions are recognised when the consolidated group has a present (legal or constructive) obligation as a result of a past
event, it is probable the consolidated group will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
32
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 1. Significant accounting policies (continued)
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted using market yields at
the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated
future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Black-Scholes option pricing model or a Monte Carlo simulation that takes into account the exercise price, the term
of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do
not determine whether the consolidated group receives the services that entitle the employees to receive payment. No
account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated group or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated group or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and
best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
33
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 1. Significant accounting policies (continued)
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree. All acquisition costs are expensed as incurred
to profit or loss.
On the acquisition of a business, the consolidated group assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated
group’s operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and the fair value of the
consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the
consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets acquired,
being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on
the acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the
non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest
in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends
on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information
possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of K-TIG Limited, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
34
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 1. Significant accounting policies (continued)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the consolidated group for the annual reporting period ended 30 June 2021. The consolidated
group has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Share-based payment transactions
The consolidated group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit
loss rate for each group. These assumptions include recent sales experience and historical collection rates.
Estimation of useful lives of assets
The consolidated group determines the estimated useful lives and related depreciation and amortisation charges for its
property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of
technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are
less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will
be written off or written down.
35
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible
assets at each reporting date by evaluating conditions specific to the consolidated group and to the particular asset that may
lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value
less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying
asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included
in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise
an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors
considered may include the importance of the asset to the consolidated group's operations; comparison of terms and
conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements;
and the costs and disruption to replace the asset. The consolidated group reassesses whether it is reasonably certain to
exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in
circumstances.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount
future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is
based on what the consolidated group estimates it would have to pay a third party to borrow the funds necessary to obtain
an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.
Employee benefits provision
As discussed in Note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting
date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all
employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases
through promotion and inflation have been taken into account.
Note 3. Acquisition of Keyhole TIG Limited
On 30 September 2019, K-TIG Limited (previously known as Serpentine Technologies Limited) (‘KTG’) completed the 100%
acquisition of Keyhole TIG Limited (‘Keyhole’). The acquisition of Keyhole resulted in the shareholders of Keyhole obtaining
control of the merged entity. Under Australian Accounting Standard (‘AASB’) 3 “Business Combinations’, the acquisition is
to be accounted for as a reverse acquisition whereby Keyhole is deemed to be the accounting acquirer in the transaction,
and KTG is deemed to be the accounting acquiree. The acquisition has been accounted for as a share-based payment using
the principles set out in AASB 2 ‘Share-Based Payments’, by which Keyhole is deemed to have issued shares in exchange
for the net assets and listing status of KTG. The difference between the fair value of the deemed consideration paid by
Keyhole and the fair value of the identifiable assets of KTG, is required to be recognised as an expense.
Acquisition Consideration
As consideration for the acquisition of 100% of the issued Keyhole securities, KTG issued 80,200,501 consideration shares
and up to 30,075,135 deferred consideration shares. Refer to Note 19 for terms of the deferred consideration shares.
Deemed Purchase Consideration
The deemed acquisition costs for obtaining control over KTG is calculated at fair value in accordance with AASB 13 'Fair
Value Measurement' hierarchy. The agreed acquisition price per share of KTG is more reliable. The deemed acquisition cost
is therefore $2,533,671 (26,608,857 of KTG shares at $0.0952 per share).
36
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 3. Acquisition of Keyhole TIG Limited (continued)
Fair value of securities transferred
Fair value of net identifiable assets held at acquisition date
- Cash and cash equivalents
- Trade and other receivables
- Trade and other payables
- Pre-paid share issue costs
Total fair value of identifiable net liabilities
Excess consideration arising on reverse acquisition
Note 4. Revenue
Revenue from contracts with customers
Sale of goods
Rendering of services
Other trading revenue
Revenue from WaaS lessor arrangements
Fair Value
30 Sep 2019
$
2,533,671
30,670
61,981
(582,459)
22,702
(467,106)
3,000,777
Consolidated
2021
$
1,163,208
184,973
51,363
1,399,544
162,012
2020
$
283,580
31,202
1,942
316,724
16,642
1,561,556
333,366
37
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 4. Revenue (continued)
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Geographical regions
Australia
United Kingdom
United States
South-East Asia (Singapore and Malaysia)
Rest of the World
Timing of revenue recognition
Revenue recognised at a point in time
Revenue recognised over time
Note 5. Other income
Interest received
Government grants
Other income
Consolidated
2021
$
2020
$
322,443
224,573
716,733
181,715
116,092
175,062
65,399
67,125
-
9,138
1,561,556
316,724
1,399,544
162,012
316,724
16,642
1,561,556
333,366
Consolidated
2021
$
2020
$
1,824
78,246
6,230
3,638
143,080
1,215
86,300
147,933
As part of its response to COVID-19, the Australian Government, in March 2020, announced various stimulus measures to
ease the burden experienced by businesses as a result of the economic fallout from the coronavirus lockdown and social
distancing measures. The ‘Boosting Cash Flow for Employers’ provides a tax-free ‘payment’ to eligible SMEs with aggregated
annual turnover of less than $50 million if they employ people between 1 January 2020 and 30 June 2020.
As both the ‘initial cash flow boost’ and ‘additional cash flow boost’ are effectively a waiver of the whole, or part, of the PAYG
liability, the amount of the ‘payment’ is recognised as a reduction in the PAYG liability and grant income under AASB
120 Accounting for Government Grants and Disclosure of Government Assistance because these cash flow boosts are being
provided by the Government in return for compliance with conditions relating to the operating activities of the entity. That is,
the receipt of the cash flow boosts is conditional upon the employer incurring salary expense, and therefore incurring a
withholding tax liability for PAYG.
38
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 6. Expenses
Loss before income tax from continuing operations includes the following specific
expenses:
Depreciation Expense
Leasehold improvements
Plant and equipment
Computer equipment
WaaS assets
Right-of-use assets
Amortisation
Amortisation of trademarks
Impairment expense
Property, plant and equipment written off
Finance Costs
Interest and finance charges on credit card and premium financing
Interest and finance charges on lease liabilities
Reverse Acquisition Costs
Shares issued to advisor
Options issued to advisor
Legal expenses
Other expenses
Net foreign exchange (gain) / loss
Net foreign exchange (gain) / loss
Rent
Rental expenses relating to operating leases not recognised due to being short-term or low
value
Superannuation Expense
Defined contribution superannuation expense
Professional Services
General legal fees
Share Based Payment Expense
Options issued to executive
Options issued to directors
Options issued to employees
Options issued to advisors
Performance rights issued to directors
Long-term incentive shares granted to director
Consolidated
2021
$
2020
$
53,014
40,204
11,891
35,762
87,770
228,641
33,368
17,887
8,106
3,401
87,770
150,532
11,056
11,056
29,959
-
4,321
4,947
9,268
-
8,114
8,114
-
-
-
-
-
1,095,000
537,654
180,380
40,738
1,853,772
(1,531)
5,543
7,332
9,756
138,354
131,667
37,483
37,315
-
-
-
-
474,376
403,530
877,906
85,660
260,503
17,131
537,654
-
-
900,948
39
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 7. Income tax expense
The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax expense as follows:
Loss before income tax expense
Consolidated
2021
$
2020
$
(4,482,667)
(8,411,825)
Prima facie tax payable from ordinary activities at 26% (2020: 27.5%)
(1,165,493)
(2,313,252)
Non-deductible expenses
Non-assessable income
Share based payments
Costs relating to acquisition
Deferred tax asset not recognised
Income tax expense
Deductible temporary differences, unused tax losses and unused tax credits for which no
deferred tax assets have been recognised are attributable to the following:
Unused tax losses – revenue
Unused tax losses – capital
Deductible temporary differences
Potential benefit at 26% (2020: 26%)
82,745
(5,200)
228,256
-
859,692
834,816
(27,500)
99,833
460,183
945,920
-
-
8,912,558
2,181,919
1,050,717
5,646,017
2,181,919
976,645
12,145,194
8,804,581
3,157,751
2,289,191
Prior to the acquisition of Keyhole TIG Limited in September 2019, K-TIG Limited (the 'legal parent') and its wholly-owned
Australian subsidiaries had formed an income tax consolidated group under the tax consolidation regime. K-TIG Limited is in
the process of adding Keyhole TIG Limited to that group. Unused tax losses for Keyhole TIG Limited for the period prior to 1
July 2019 have not been included in the unrecognized deferred tax amounts disclosed above as they are being reviewed to
determine if eligible to be transferred to the income tax consolidated group.
Note 8. Cash and cash equivalents
Cash at bank
Consolidated
2021
$
2020
$
5,064,345
3,493,579
The carrying amounts of cash and cash equivalents approximate their fair value and are denominated in the following
currencies:
Australian dollar
United states dollar
Euro
40
Consolidated
2021
$
2020
$
4,490,530
426,303
147,512
3,416,643
54,593
22,343
5,064,345
3,493,579
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 9. Trade and other receivables
Current
Trade receivables
Trade receivables
Provision for expected credit losses
Other receivables
GST receivable
Prepayments
VAT receivable (Ireland)
Other receivables
Trade and other receivables -
Non-current
Prepayments
Consolidated
2021
$
2020
$
685,117
-
685,117
54,972
144,298
-
341
199,611
13,752
-
13,752
7,922
60,024
29,565
407
97,918
884,728
111,670
14,150
-
Allowance for expected credit losses
The consolidated group has recognised $0 (30 June 2020: Nil) in profit or loss in respect of the expected credit losses for
the year ended 30 June 2021 due to the upfront nature of equipment sales and the requirement for WaaS license customers
to make an advance payment prior to shipment of the WaaS license system.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Consolidated
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Note 10. Inventories
Materials and components
Finished goods
Goods in transit
Expected credit loss rate
2021
%
2020
%
Carrying amount
2020
$
2021
$
Allowance for expected
credit losses
2021
$
2020
$
0%
0%
0%
0%
0%
0%
0%
0%
613,119
63,352
8,383
263
8,445
2,218
1,849
1,240
685,117
13,752
-
-
-
-
-
-
-
-
-
-
Consolidated
2021
$
2020
$
243,500
59,133
270,511
194,348
173,660
-
573,144
368,008
41
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 11. Property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Computer equipment - at cost
Less: Accumulated depreciation
WaaS assets - at cost
Less: Accumulated depreciation
Consolidated
2021
$
2020
$
183,307
(137,208)
46,099
374,133
(97,766)
276,367
53,196
(30,087)
23,109
241,287
(39,163)
202,124
178,620
(84,194)
94,426
253,669
(144,939)
108,730
37,535
(27,810)
9,725
269,762
(3,401)
266,361
547,699
479,242
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 30 June 2019
Additions
Transfers from inventory
Depreciation expense
Balance at 30 June 2020
Additions
Disposals
Transfers from / (to) inventory
Leasehold
improvements
$
Plant and
equipment
$
Computer
equipment
$
WaaS
assets
$
Total
$
38,869
88,925
-
(33,368)
94,426
4,687
-
-
86,839
39,778
-
(17,887)
108,730
202,211
(29,959)
35,589
3,342
14,489
-
(8,106)
9,725
25,275
-
-
-
-
269,762
(3,401)
266,361
-
(28,475)
129,050
143,192
269,762
(62,762)
479,242
232,173
(29,959)
7,114
Depreciation expense
(53,014)
(40,204)
(11,891)
(35,762)
(140,871)
Balance at 30 June 2021
46,099
276,367
23,109
202,124
547,699
42
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 12. Right-of-use assets
Land and buildings
Less: Accumulated depreciation
Consolidated
2021
$
2020
$
255,998
(175,540)
255,998
(87,770)
80,458
168,228
Adoption of AASB 16 ‘Leases’ resulted in right-of-use assets of $255,998 recognised in the previous year. This was a non-
cash transaction. The consolidated group leases land and buildings for its Adelaide office and warehouse under an
agreement. Effective 6 June 2020, the final extension on the current lease was exercised for a further two years with the
lease expiring on 5 June 2022. The consolidated group leases office and warehouse equipment under agreements that are
either short-term or low value, so have been expensed as incurred and not capitalised as right-of-use assets (Note 6).
Note 13. Intangibles
Trademarks - at cost
Less: Accumulated amortisation
Consolidated
2021
$
2020
$
110,569
(68,636)
110,569
(57,580)
41,933
52,989
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
2021
$
2020
$
52,989
-
(11,056)
64,045
-
(11,056)
41,933
52,989
Consolidated
2021
$
2020
$
154,887
240,066
(3,293)
479,924
120,652
149,174
806
149,603
871,584
420,235
Balance at 1 July
Additions
Amortisation expense
Balance at 30 June
Note 14. Trade and other payables
Trade payables
Other payables
Credit cards
Accrued expenses
Refer to Note 22 for further information on financial instruments.
43
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 15. Amounts received in advance
Sales and service
WaaS advance payment
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and
previous financial year are set out below:
Balance at 1 July
Sales and service
WaaS advance payment
Transfer to revenue
Balance at 30 June
Consolidated
2021
$
2020
$
154,611
16,334
15,800
98,982
170,945
114,782
114,782
154,611
-
(98,448)
7,300
15,800
98,982
(7,300)
170,945
114,782
Unsatisfied performance obligations - Sales and service
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end of the
reporting period was $154,611 as at 30 June 2021 (30 June 2020: $15,800) and is expected to be recognised as revenue in
future periods as follows:
Within 6 months
6 to 12 months
1-2 years
2-3 years
3-4 years
4-5 years
Consolidated
2021
$
2021
$
89,208
20,512
6,000
6,510
19,445
12,936
15,800
-
-
-
-
-
154,611
15,800
WaaS advance payment
The aggregate amount of WaaS amounts received as a prepayment at the end of the reporting period was $16,334 as at 30
June 2021 (30 June 2020: $98,982) and is expected to be recognised as revenue in future periods as follows:
Within 6 months
6 to 12 months
Consolidated
2021
$
2020
$
1,334
15,000
53,367
45,615
16,334
98,982
44
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 16. Borrowings
Loans with related parties (Note 27) were settled in full through the issue of ordinary shares of Keyhole TIG on 1 July 2019.
Shares were fair valued at 6.3 cents per share upon conversion. In total, 5,677,946 ordinary shares were issued to repay
loans to related parties.
The convertible notes were converted upon successful acquisition of Keyhole TIG Limited on 30 September 2019. The
convertible notes converted to 11,250,000 ordinary shares in K-TIG.
Note 17. Lease liabilities
Current
Non-Current
Reconciliation
Balance at 1 July
Adoption of AASB 16
Interest expense
Repayments
Balance at 30 June
Note 18. Employee benefits
Current
Non-Current
Consolidated
2021
$
2020
$
85,209
-
87,888
85,209
85,209
173,097
173,097
-
4,947
(92,835)
-
255,998
8,114
(91,015)
85,209
173,097
Consolidated
2021
$
2020
$
190,299
13,107
126,665
6,242
203,406
132,907
Amounts not expected to be settled within the next 12 months
The current provision for employee benefits includes all unconditional entitlements where employees have completed the
required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The
non-current amount represents the unvested long service leave accrual.
45
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 19. Issued capital
Ordinary shares - fully paid
Series A preference shares
Consolidated
2021
Shares
2020
Shares
2021
$
2020
$
169,111,261 144,609,833 23,443,733 17,732,901
-
-
169,111,261 144,609,833 23,443,733 17,732,901
-
-
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company
does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or
by proxy shall have one vote and upon a poll each share shall have one vote.
Series A Preference Shares
The holders of Series A preference shares were entitled to vote at all meetings of the company. Each Series A preference
share entitled the holder upon a poll to that number of votes equal to the number of ordinary shares into which the Series A
preference shares would be converted if the conversion occurred at the time of that vote. Series A Preference Shares were
converted to ordinary shares during the previous financial year.
Capital risk management
The consolidated group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that
it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital. Capital is regarded as total equity, as recognised in the consolidated statement of financial position,
plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
46
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 19. Issued capital (continued)
Movements in ordinary shares for the financial year
Date
Details
1 Jul 2019
1 Jul 2019
30 Sep 2019
30 Sep 2019
30 Sep 2019
30 Sep 2019
30 Sep 2019
30 Sep 2019
30 Sep 2019
30 Sep 2019
30 Sep 2019
30 Sep 2019
30 Sep 2019
13 Nov 2019
30 Jun 2020
16 Sep 2020
22 Dec 2020
18 Feb 2021
9 Mar 2021
24 Mar 2021
16 Apr 2021
23 Apr 2021
30 Apr 2021
13 May 2021
30 Jun 2021
30 Jun 2021
Balance
Issue of Keyhole shares to repay related party loans
Conversion of share options
Conversion of preference shares
Elimination of Keyhole shares
KTG shares on acquisition
KTG shares on acquisition
Issue of KTG shares on acquisition of Keyhole
Deemed consideration on acquisition of Keyhole
Issue of shares under public offer
Conversion of convertible note
Issue of shares to advisor
Share issue costs
Exercise of options
Balance
Issue of shares under Placement
Issue of shares to Directors
Exercise of options
Exercise of options
Exercise of options
Exercise of options
Exercise of options
Exercise of options
Exercise of options
Share issue costs
Balance
Number of
Shares
96,395,839
5,677,946
25,058,608
41,322,314
(168,454,707)
722,096,113
(709,428,270)
80,200,501
-
35,000,000
11,250,000
5,475,000
-
16,489
144,609,833
21,660,000
740,000
5,229
17,000
43,999
96,036
153,503
1,463,576
322,085
-
169,111,261
$
2,348,884
359,740
633,051
2,978,935
-
-
-
-
2,533,671
7,000,000
1,251,040
1,095,000
(471,212)
3,792
17,732,901
5,415,000
185,000
1,203
3,910
10,120
22,088
35,306
336,622
74,080
(372,497)
23,443,733
As at 30 June 2021, up to 30,075,135 deferred consideration shares to be issued in 3 tranches based on the cumulative
revenue over 48 months from 1 January 2020.
a) Tranche 1: up to 10,025,045 deferred consideration shares to be issued if K-TIG achieves $30,000,000 of cumulative
revenue within 36 months from 1 January 2020;
b) Tranche 2: up to 10,025,045 deferred consideration shares to be issued if K-TIG achieves $60,000,000 of cumulative
revenue within 48 months from 1 January 2020; and
c) Tranche 3: up to 10,025,045 deferred consideration shares to be issued if K-TIG achieves $15,000,000 of cumulative
EBITDA within 48 months from 1 January 2020.
Movements in series A preference shares for the financial year
Date
Details
1 Jul 2019
30 Sep 2019
30 Jun 2020
30 Jun 2021
Balance
Conversion of preference shares
Balance
Balance
Number of
Shares
41,322,314
(41,322,314)
-
-
$
2,978,935
(2,978,935)
-
-
47
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 20. Reserves
Options reserve
Performance rights reserve
2021
$
871,990
867,674
1,739,664
2020
$
871,990
-
871,990
The reserves are used to recognise share-based payment transactions. Amounts will be transferred to issued share capital
upon share options or performance rights being exercised or long-term incentive shares being converted.
Movements in options reserve for the year
Date
Details
1 Jul 2019
1 Jul 2019
1 Jul 2019
30 Sep 2019
30 Sep 2019
30 Sep 2019
30 Sep 2019
13 Nov 2019
21 Feb 2020
26 Jun 2020
30 Jun 2020
18 Feb 2021
9 Mar 2021
24 Mar 2021
16 Apr 2021
23 Apr 2021
30 Apr 2021
13 May 2021
30 Jun 2021
Balance
Issue of executive options
Cancellation of consultant options
Conversion of share options
KTG shares on acquisition
Expiry of options
Issue of options
Exercise of options
Issue of options
Issue of options
Balance
Exercise of options
Exercise of options
Exercise of options
Exercise of options
Exercise of options
Exercise of options
Exercise of options
Balance
Number of
Options
23,297,800
1,867,058
(106,250)
(25,058,608)
2,119,233
(1,316)
5,472,152
(16,489)
960,000
180,000
8,713,580
(5,229)
(17,000)
(43,999)
(96,036)
(153,503)
(1,463,576)
(322,085)
6,612,152
$
603,925
29,126
-
(633,051)
-
-
679,360
-
164,467
28,163
871,990
-
-
-
-
-
-
-
871,990
On 21 June 2019, 7,248,165 options were issued to employees under Keyhole’s employee share scheme. 4,337,610 options
were issued to an executive in lieu of services provided. These options were converted into shares on 30 September 2019.
On 1 July 2019, 1,867,058 options were issued to an executive in lieu of services provided. These options were converted
into shares on 30 September 2019.
On 30 September 2019, a total of 5,472,152 unlisted options exercisable at $0.30 each with an expiry date of 30 September
2023, and a subscription price of $0.0001 each, were issued as advisor and director options. 4,331,801 options were issued
under the Lead Manager Mandate for advisory services, totaling $537,654. The related expense was recognised in the year
ended 30 June 2020 as reverse acquisition costs. 1,140,351 options were issued to Directors for a total consideration of
$141,652. The related expense was recognised in the year ended 30 June 2020 as a share-based payment expense in the
consolidated statement of profit and loss and other comprehensive income.
On 21 February 2020, 960,000 unlisted options exercisable at $0.30 each with an expiry date of 30 September 2023 were
issued to directors and other key management personnel. The related expense of $164,467 was recognised in the year
ended 30 June 2020 as a share-based payment expense in the consolidated statement of profit and loss and other
comprehensive income.
On 26 June 2020, 180,000 unlisted options exercisable at $0.30 each with an expiry date of 30 September 2023 were issued
to Directors. The related expense of $28,163 was recognised in the year ended 30 June 2020 as a share-based payment
expense in the consolidated statement of profit and loss and other comprehensive income.
48
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 20. Reserves (continued)
Movements in performance rights reserve for the year
Date
Details
1 Jul 2020
27 Nov 2020
31 Dec 2020
30 Jun 2021
30 Jun 2021
Balance
Issue of performance rights to Directors
Rights issue cost
Vesting of long-term incentive shares to Director
Balance
Number of
Performance
Rights
-
6,000,000
-
-
6,000,000
$
-
474,376
(10,232)
403,530
867,674
On 27 November 2020, a total of 6,000,000 performance rights to be issued to Directors were approved at the Company’s
Annual General Meeting. The rights were subsequently issued in 3 Tranches on the 22 December 2020 with the following
terms:
a) Tranche 1: 2,000,000 performance rights will vest when the Company achieves a volume weighted average price
(“VWAP”) of at least $0.35 over any twenty consecutive trading day period before 1 April 2021;
b) Tranche 2: 2,000,000 performance rights will vest when the Company achieves a VWAP of at least $0.50 over any
twenty consecutive trading day period before 1 October 2021; and
c) Tranche 3: 2,000,000 performance rights will vest when the Company achieves a VWAP of at least $0.75 over any
twenty consecutive trading day period before 1 October 2022.
Refer to Note 35 for more details on the calculation of the fair value of the performance rights issued and the related share-
based payment expense for the year.
On 1 November 2020, Mr Smith was appointed as Managing Director of the Company. Shares will be issued to Mr Smith at
each anniversary of employment as follows, with 50% of shares issued subject to a voluntary escrow period of 12 months as
follows:
- 1,000,000 shares to be issued on 1 November 2021;
- 1,500,000 shares to be issued on 1 November 2022; and
- 2,000,000 shares to be issued on 1 November 2023.
Refer to Note 35 for more details on the calculation of the fair value of the long-term incentive shares granted and the related
share-based payment expense for the year.
Note 21. Dividends
There were no dividends paid during the financial year ended 30 June 2021 (2020: Nil). Franking credits available for
subsequent periods based on a 26% tax rate is Nil (30 June 2020: Nil).
Note 22. Financial instruments
Financial risk management objectives
The consolidated group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk, price
risk and interest rate risk), credit risk and liquidity risk. The consolidated group’s overall risk management program focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of
the consolidated group.
49
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 22. Financial instruments (continued)
Risk management is carried out by senior finance executives (‘finance’) in consultation with the Board of Directors (‘the
Board’). Finance identifies and evaluates financial risks within the consolidated group’s operating units. Finance reports to
the Board on a monthly basis.
Market risk
Foreign currency risk
The consolidated group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations. These transactions include customer sales agreements and supplier
agreements.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting.
In order to protect against exchange rate movements, the consolidated group monitors its cash balances in the foreign
currencies and utilises accumulated foreign currencies to purchase supplies to mitigate the exposure to currency changes.
The carrying amount of the consolidated group’s foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
Consolidated
US dollars
Euros
British pound
Assets
Liabilities
2021
$
2020
$
2021
$
2020
$
828,218
148,908
262
54,593
22,343
-
33,937
-
-
60,961
14,706
-
977,388
76,936
33,937
75,667
The consolidated group had net financial assets denominated in foreign currencies of $943,451 as at 30 June 2021 (30 June
2020: net assets $1,269). Based on this exposure, had the Australian dollar weakened by 10% against these foreign
currencies with all other variables held constant, the consolidated group’s loss before tax for the year would have been
$94,345 lower (30 June 2020: $127 lower) and equity would have been $94,345 lower (30 June 2020: $127 lower). The
percentage change is the expected overall volatility of the significant currencies, which is based on management’s
assessment of reasonable possible fluctuations taking into consideration movements over the last 6 months each year and
the spot rate at each reporting date. The actual foreign exchange gain for the year ended 30 June 2021 was $1,531 (30 June
2020: $6,472 loss).
Price risk
The consolidated group is not exposed to any significant price risk.
Interest rate risk
The consolidated group had converted all loans as at 30 September 2019 to equity as part of the reverse takeover. There
are no loans or borrowings subject to interest rate risk as at 30 June 2021 or 30 June 2020.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated group. The consolidated group has a strict process of obtaining advance payment for all equipment sales prior
to shipment. The consolidated group is exposed to customer credit for its WaaS licence customers in relation to the ongoing
monthly payments after the initial Advance Payment has been consumed. Furthermore, K-TIG retains full title of the products
provided under a WaaS operating licence agreement. This exposure is managed carefully with close interaction with the
customer. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount,
net of any provisions for impairment of those assets, as disclosed in the consolidated statement of financial position and
notes to the financial statements. The consolidated group does not hold any collateral.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
50
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 22. Financial instruments (continued)
Liquidity risk
Vigilant liquidity risk management requires the consolidated group to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The consolidated group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Remaining contractual maturities
The following tables detail the consolidated group’s remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Between 1
and 2 years
$
Between 2
and 5 years Over 5 years
$
$
Remaining
contractual
maturities
$
Consolidated – 2021
Non-derivatives
Non-interest bearing
Trade payables
Other Payables
Interest bearing
Lease liabilities
Weighted
average
interest rate 1 year or less
%
-
-
3.72
$
154,887
240,066
85,209
480,162
Consolidated – 2020
%
$
$
Non-derivatives
Non-interest bearing
Trade payables
Other Payables
Interest bearing
Lease liabilities
-
-
3.72
120,652
149,174
92,835
362,661
86,801
86,801
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
154,887
240,066
85,209
480,162
$
120,652
149,174
179,636
449,462
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Note 23. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated group
is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
51
Consolidated
2021
$
2020
$
641,499
34,333
-
877,906
899,675
56,099
(9,992)
331,846
1,553,738
1,277,628
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 24. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by BDO, the auditor of the company,
its network firms and unrelated firms:
Audit services – BDO Audit (SA) Pty Ltd
Audit of the financial statements
Review of half year financial statements
Total audit and review of financial statements
Non-audit services – BDO Advisory (SA) Pty Ltd
Tax compliance*
Business advice and consulting*
Total non-audit fees
Total services provided by BDO
Consolidated
2021
$
2020
$
49,970
15,000
64,970
-
6,332
6,332
30,500
24,500
55,000
846
42,290
43,136
71,302
98,136
* The material portion of the non-audit fees were earned prior to the consolidated group undertaking the reverse acquisition
and becoming listed.
Note 25. Contingent assets and liabilities
Contingent assets
No contingent assets noted as at 30 June 2021 (30 June 2020: Nil).
Contingent liabilities
In the opinion of the Directors, the consolidated group has contingencies in relation to deferred consideration shares as at
30 June 2021 (30 June 2020: deferred consideration shares and consultancy services agreement).
Deferred Consideration Shares
During the financial year ended 30 June 2020, K-TIG Limited completed the 100% acquisition of Keyhole TIG Limited. Part
of the acquisition consideration includes up to 30,075,135 deferred consideration shares. Refer to Note 19 for terms of
consideration shares.
52
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 26. Commitments
There are no lessee commitments as at 30 June 2021 related to equipment operating lease commitments (30 June 2020:
$9,756). From 1 July 2019, the consolidated group has recognized the facility lease commitments at its primary place of
business as right-of-use assets. Refer to Note 12 for right-of-use assets.
Lessor commitments receivable
Lessor commitments relate to operating lease payments to be received from WaaS license agreements. Licenses have a
minimum term of 0-3 years (generally 3-year minimum terms). As at 30 June 2021, all operating lease payments to be
received are payable in US dollars or Euros, and for the purposes of the maturity analysis have been translated at the spot
rate at reporting date. Maturity analysis of undiscounted operating lease payments to be received is set out below. The lessor
commitments receivable includes one license with a customer with no minimum term with a maximum term of 10 years,
where it is likely the maximum term could be 5 years.
Consolidated
2021
$
283,600
283,600
102,586
11,984
-
-
2020
$
139,362
336,437
323,199
135,044
30,000
107,500
681,770
1,071,542
Within 1 year
1-2 years
2-3 years
3-4 years
4-5 years
After 5 years
Note 27. Related party transactions
Parent entity
K-TIG Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 29.
Key management personnel
Disclosures relating to key management personnel are set out in Note 23 and the remuneration report included in the
directors’ report.
Transactions with related parties
The following transactions occurred with related parties:
Consolidated
2021
$
2020
$
Ventnor Capital Pty Ltd provided company secretarial, accounting and corporate advisory
services (director-related entity of Mr Carmichael)
96,531
138,797
Receivable from and payable to related parties
There are no receivables balances outstanding at the reporting date in relation to transactions with related parties.
Payables balances outstanding at the reporting date in relation to transactions with related parties:
53
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 27. Related party transactions (continued)
Trade payable to Ventnor Capital Pty Ltd (director-related entity of Mr Carmichael)
Loans to/from related parties
There were no loans to/from related parties outstanding as at 30 June 2021 or 30 June 2020.
Consolidated
2021
$
2020
$
12,320
11,132
During the previous financial year, all related party loans were settled in full through the issue of 5,677,946 ordinary shares
of Keyhole on 1 July 2019 (Note 19). Shares were valued at 6.3 cents per share upon conversion.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 28. Parent entity information
Set out below is the supplementary information about the legal parent entity (K-TIG Limited) for the full year ended 30 June.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive loss
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets / (liabilities)
Equity
Issued capital
Reserves*
Accumulated losses
Total equity
Parent
2021
$
2020
$
(5,474,415)
(5,474,415)
(7,566,267)
(7,566,267)
4,481,709
-
4,481,709
3,110,217
-
3,110,217
375,514
105,846
481,360
4,000,349
213,957
-
213,957
2,896,260
42,815,683 37,104,852
4,015,492
(43,698,499) (38,224,084)
4,883,165
4,000,349
2,896,260
* Relates to option reserve and performance right / performance share reserve
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity has not entered into any guarantees and in relation to the debts of its subsidiaries.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
54
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 28. Parent entity information (Continued)
Capital commitments – Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June 2020.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated group, as disclosed in Note 1.
Note 29. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiaries
in accordance with the accounting policy described in Note 1. Details of the legal parent’s subsidiary at the end of the
reporting period are as follows:
Name
Kabuni USA, Inc.
Stirling Minerals Pty Limited
Keyhole TIG Pty Limited*
Vessel Tech Pty Ltd**
Keyhole TIG (USA) Inc***
Principal place of business /
Country of incorporation
USA
Australia
Australia
Australia
USA
Ownership interest
2020
2021
%
%
100%
100%
100%
-
100%
100%
100%
100%
100%
-
*Keyhole TIG Pty Limited was acquired on 30 September 2019 as Keyhole TIG Limited. In June 2020, Keyhole TIG Limited
was changed to a proprietary limited company.
**Vessel Tech Pty Ltd was deregistered on 28 October 2020
*** Keyhole TIG (USA) Inc was incorporated on 11 August 2020
Note 30. Events after the reporting period
No matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the
consolidated group’s operations, the results of those operations, or the consolidated group’s state of affairs in future financial
years.
55
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 31. Reconciliation of profit after income tax to net cash from operating activities
Consolidated
2021
$
2020
$
Loss after income tax for the year
(4,482,667)
(8,411,825)
Adjustments for:
Depreciation
Amortisation of trademarks
Advisor shares issued
Reverse acquisition deemed consideration
Share-based payments
Property, plant and equipment written-off
Change in operating assets and liabilities:
(Increase) / Decrease in trade receivables
(Increase) in other receivables and prepayments
(Increase) in inventories
Increase in trade and other payables
Increase in income in advance
Increase / (Decrease) in employee benefits
228,641
11,056
-
-
877,906
29,959
(698,655)
(101,693)
(212,251)
451,349
56,083
70,499
150,532
11,056
1,095,000
2,533,671
900,948
-
1,273
(40,163)
(264,653)
187,326
107,562
(58,040)
Net cash (used in) operating activities
(3,769,773)
(3,787,313)
Note 32. Non-cash investing and financing activities
Share based payments expense
Note 33. Changes in liabilities arising from financing activities
Consolidated
2021
$
2020
$
877,906
900,948
Consolidated
Balance at 1 July 2019
Cash (used in) financing activities
Adoption of leases under AASB 16
Other changes (Note 16)
Balance at 30 June 2020
Cash (used in) financing activities
Balance at 30 June 2021
Convertible
notes
$
Lease
liability
$
Total
$
1,610,780
(82,901)
255,998
(1,610,780)
173,097
(87,888)
-
(82,901)
255,998
-
173,097
(87,888)
85,209
85,209
1,610,780
-
-
(1,610,780)
-
-
-
56
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 34. Loss per share
Consolidated
2021
$
2020
$
Loss after income tax attributable to the owners of K-TIG Limited
(4,482,667)
(8,411,825)
Basic loss per share
Diluted loss per share
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic loss per share
Cents
Cents
(2.76)
(2.76)
(6.97)
(6.97)
Number
Number
162,380,579 120,670,363
In the previous financial year, retrospectively adjustments were made to the weighted average number of ordinary shares
due to the share consolidation (57:1) and reverse acquisition that occurred in September 2019. These capital events are
effectively a re-denomination of shares, that changes the number of the Company’s ordinary shares outstanding without a
corresponding change in the Company’s resources.
Note 35. Share-based payments
Options
30 June 2020
On 21 June 2019, 7,248,165 options were issued to employees under Keyhole’s employee share scheme. 4,337,610 options
were issued to an executive in lieu of services provided. These options were valued at an independently assessed current
value per share.
On 1 July 2019, 1,867,058 options were issued to an executive in lieu of services provided. These options were valued at an
independently assessed current value per share.
On 30 September 2019, a total of 5,472,152 unlisted options exercisable at $0.30 each with an expiry date of 30 September
2023, and a subscription price of $0.0001 each, were issued as advisor and director options. 4,331,801 options related to
were issued under the Lead Manager Mandate for advisory services, totaling $537,654. The related expense was recognised
in the year end 30 June 2020 as reverse acquisition costs. 1,140,351 options were issued to Directors for a total consideration
of $141,652. The related expense was recognised in the year ended 30 June 2020 as a share-based payment expense in
the consolidated statement of profit and loss and other comprehensive income.
On 21 February 2020, 960,000 unlisted options exercisable at $0.30 each with an expiry date of 30 September 2023 were
issued to directors, other key management personnel and employees. The related expense of $164,467 was recognised in
the year ended 30 June 2020 as a share-based payment expense in the consolidated statement of profit and loss and other
comprehensive income.
On 26 June 2020, 180,000 unlisted options exercisable at $0.30 each with an expiry date of 30 September 2023 were issued
to Directors. The related expense of $28,163 was recognised in the year ended 30 June 2020 as a share-based payment
expense in the consolidated statement of profit and loss and other comprehensive income.
For the options granted during the financial year ended 30 June 2020, the valuation model inputs used to determine the fair
value at the grant date, are as follows. Volatility of the options issued on 30 September 2019 used was 100% as best estimate
as using historical movements was not appropriate due to the reverse acquisition (Note 3). For options issued after 30
September 2019, volatility was calculated based on historical movements from acquisition date (30 September 2019).
Grant date
Expiry date
Share price Exercise
at grant date
price
Expected
volatility
Dividend
yield
Risk-free
interest rate at grant date
Fair value
30/09/2019
21/02/2020
26/06/2020
30/09/2023
30/09/2023
30/09/2023
$0.20
$0.185
$0.180
$0.30
$0.30
$0.30
100%
199%
181%
0%
0%
0%
0.78%
0.64%
0.26%
$0.124
$0.171
$0.156
57
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 35. Share-based payments (Continued)
30 June 2021
No options were granted during the financial year.
Set out below are the options exercisable at the end of the financial year:
Grant date
Expiry date
Exercise Price
29/01/2018
30/09/2019
21/02/2020
26/06/2020
30/04/2021
30/09/2023
30/09/2023
30/09/2023
$0.23
$0.30
$0.30
$0.30
2021
Number
2020
Number
-
5,472,152
960,000
180,000
2,101,428
5,472,152
960,000
180,000
6,612,152
8,713,580
Balance at
the end of
the year
-
5,472,152
960,000
180,000
6,612,152
-
-
-
-
-
Balance at
the end of
the year
2021
Grant Date Expiry Date
30/04/2021
29/01/2018
30/09/2023
30/09/2019
30/09/2023
21/02/2020
30/09/2023
26/06/2020
Exercise
Price
$0.23
$0.30
$0.30
$0.30
Balance at
start of the
year
2,101,428
5,472,152
960,000
180,000
8,713,580
Granted
Exercised
Expired /
Cancelled
-
-
-
-
-
(2,101,428) *
-
-
-
(2,101,428)
* Of these options, 233,697 were exercised in accordance with an underwriting agreement.
2020
Grant Date Expiry Date
30/09/2019
31/10/2016
30/04/2021
29/01/2018
30/09/2023
30/09/2019
30/09/2023
21/02/2020
30/09/2023
26/06/2020
30/09/2019
01/07/2017
30/09/2019
21/06/2019
30/09/2019
01/07/2019
Exercise
Price
$0.23
$0.23
$0.30
$0.30
$0.30
-
-
-
Balance at
start of the
year
Granted
Exercised
Expired
1,316**
-
- 2,117,917**
5,472,152
-
960,000
-
180,000
-
-
11,712,025
-
11,585,775
1,867,058
-
23,297,800 10,598,443
-
(16,489)
-
-
-
(11,605,775)
(11,585,775)
(1,867,058)
(25,075,097)
(1,316)
-
- 2,101,428
- 5,472,152
960,000
-
180,000
-
-
(106,250)
-
-
-
-
(107,566) 8,713,580
** Relates to options existing in KTG at date of reverse acquisition, 30 September 2019
The weighted average remaining contractual life of options outstanding at the end of the financial year was 2.25 years (2019:
2.67 years).
Performance Rights
On 27 November 2020, a total of 6,000,000 performance rights to be issued to Directors were approved at the Company’s
Annual General Meeting. The rights were subsequently issued in 3 Tranches on the 22 December 2020 with the following
terms:
a) Tranche 1: 2,000,000 performance rights will vest when the Company achieves a volume weighted average price
(“VWAP”) of at least $0.35 over any twenty consecutive trading day period before 1 April 2021;
b) Tranche 2: 2,000,000 performance rights will vest when the Company achieves a VWAP of at least $0.50 over any
twenty consecutive trading day period before 1 October 2021; and
c) Tranche 3: 2,000,000 performance rights will vest when the Company achieves a VWAP of at least $0.75 over any
twenty consecutive trading day period before 1 October 2022.
58
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 35. Share-based payments (Continued)
The performance rights granted during the financial year were valued using the monte carlo model. The valuation model inputs
used to determine the fair value at the grant date, are as follows.
Grant date
Expiry
date
Share
price at
grant date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest
rate
Fair value
at grant
value
27/11/2020 22/12/2025
27/11/2020 22/12/2025
27/11/2020 22/12/2025
$0.27
$0.27
$0.27
-
-
-
90%
100%
100%
-
-
-
0.034%
0.05%
0.034%
$0.0995
$0.1252
$0.1563
The performance rights are subject to the satisfaction of certain milestones and the Board’s discretion as follows
Class
No. of performance rights Milestone
A
B
C
2,000,000
2,000,000
2,000,000
The Company achieving a VWAP of at least $0.35
over any twenty consecutive trading day period
before the Milestone Date.
The Company achieving a VWAP of at least $0.50
over any twenty consecutive trading day period
before the Milestone Date
The Company achieving a VWAP of at least $0.75
over any twenty consecutive trading day period
before the Milestone Date.
Set out below are the performance rights exercisable at the end of the financial year:
Milestone Date
1 April 2021
1 October 2021
1 October 2022
Grant date
Expiry date
Exercise Price
27/11/2020
27/11/2020
22/12/2025
22/12/2025
$-
$-
2021
Number
2020
Number
2,000,000
2,000,000
4,000,000
-
-
-
2021
Grant Date Expiry Date
Exercise
Price
Balance at
start of the
year
Granted
Exercised / Expired
/ Cancelled
Balance at
the end of
the year
Vested at
the end of
the year
27/11/2020
27/11/2020
27/11/2020
22/12/2025
22/12/2025
22/12/2025
-
-
-
Long-term incentive shares
- 2,000,000
- 2,000,000
- 2,000,000
- 6,000,000
-
-
-
-
2,000,000
2,000,000
2,000,000
6,000,000
2,000,000
2,000,000
-
4,000,000
On 1 November 2020, Mr Smith was appointed as Managing Director of the Company. Shares will be issued to Mr Smith at
each anniversary of employment as follows, with 50% of shares issued subject to a voluntary escrow period of 12 months as
follows:
- 1,000,000 shares to be issued on 1 November 2021;
- 1,500,000 shares to be issued on 1 November 2022; and
- 2,000,000 shares to be issued on 1 November 2023.
The long-term incentive shares granted during the financial year were valued at fair value at $0.27 per share.
None of the long-term incentive shares had vested and been converted to ordinary shares at 30 June 2021.
59
K-TIG Limited and Its Controlled Entities
Notes to the financial statements
For the year ended 30 June 2021
Note 36. Operating Segment
The consolidated group is considered to be one operating segment based on products delivered. This operating segment is
based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating
Decision Makers (‘CODM’) in assessing performance and in determining the allocation of resources. The information
presented in the financial statements approximates the information of the operating segment.
60
K-TIG Limited and Its Controlled Entities
Directors’ Declaration
For the year ended 30 June 2021
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in Note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated group's financial position as
at 30 June 2021 and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Stuart Carmichael
Chairman
31 August 2021
Perth
61
Tel: +61 8 7324 6000
Fax: +61 8 7324 6111
www.bdo.com.au
Level 7, BDO Centre
420 King William Street
Adelaide SA 5000
GPO Box 2018, Adelaide SA 5001
AUSTRALIA
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF K-TIG LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of K-TIG Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial report, including a summary of significant accounting policies and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit (SA) Pty Ltd ABN 33 161 379 086 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (SA) Pty Ltd and BDO (Australia) Ltd are members of BDO International
Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation.
Share Based Payments
KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
During the year ended 30 June 2021, the
Company issued performance rights over
ordinary shares (‘performance rights’)
and long term incentive shares
(‘inventive shares’) to key management
personnel, which were accounted for as
share based payments under AASB 2:
Share Based Payments. Share-based
payments are a complex accounting area
including assumptions utilised in the fair
value calculations and judgments
regarding the performance rights and
incentive shares issued during the year.
There is a risk in the financial report that
amounts are incorrectly recognised
and/or inappropriately disclosed. Refer
to Note 1 of the financial report for a
description of the accounting policy and
significant estimates and judgements
applied to these transactions.
Our audit procedures included but were not limited to:
•
Evaluating management’s assessment of the valuation
and recognition of the performance rights and
incentive shares.
• Obtaining an understanding of the key terms and
conditions of the performance rights and incentive
shares by inspecting relevant agreements.
• Holding discussions with management to understand
the share based payment arrangements in place and
evaluating management’s assessment of the likelihood
of meeting any condition attached to the performance
rights and incentive shares.
• Assessing the fair value of performance rights
determined by an expert management engaged. This
included assessing the reasonableness of the key
inputs used in the valuation model and valuation
methodology.
•
Reviewing the adequacy of the Company’s disclosures
in respect of the accounting treatment of share-
based payments in the financial statements,
including the significant judgments involved, and the
accounting policy adopted.
Other information
The directors are responsible for the other information. The other information comprises the
information contained in Director’s Report for the year ended 30 June 2021, but does not include the
financial report and our auditor’s report thereon, which we obtained prior to the date of this auditor’s
report, and the Group’s annual report, which is expected to be made available to us after that date.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above 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 on the other information that we obtained prior to the date
of this auditor’s report, 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.
When we read the group’s annual report, if we conclude that there is a material misstatement therein,
we are required to communicate the matter to the directors and will request that it is corrected. If it
is not corrected, we will seek to have the matter appropriately brought to the attention of users for
whom our report is prepared.
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.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 7 to 16 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of K-TIG Limited, for the year ended 30 June 2021, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (SA) Pty Ltd
Geoff Edwards
Director
Adelaide, 31 August 2021
K-TIG Limited and Its Controlled Entities
ASX Additional Information
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current at 27 August 2021.
Ordinary Fully Paid Shares
Distribution of Share Holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Number of
Holders
Number of
Shares
200
703
308
646
174
2,031
100,164
1,870,951
2,483,968
22,184,083
142,472,095
169,111,261
There were 287 holders holding a total of 199,550 ordinary shares holding less than a marketable parcel.
Top Twenty Share Holders
The names of the twenty largest holders of quoted shares are listed below:
Name
Number of shares
%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
ADVANCED SCIENCE & INNOVATION COMPANY (ASIC) LLC
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MR RICHARD SMITH
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
GREAT PLAINS HOLDING COMPANY PTY LTD
SWHL INVESTMENTS PTY LTD
CITICORP NOMINEES PTY LIMITED
MRS LYNETTE ANNE SHARMAN &
MR MICHAEL DAVID SHARMAN
WIGTOWN PTY LIMITED
SYED BASAR SHUEB
OVERSEAS PENSIONS AND BENEFITS LIMITED
MARTINI 29 PTY LTD
GARDEN ENTERPRISES PTY LTD
MAINSTAY HOLDINGS PTY LTD
SHOREBROOK PTY LTD
RAC & JD BRICE SUPERANNUATION P/L
SUSTAINABLE WEALTH PTY LTD
PANCHEK PTY LTD
WIGTOWN PTY LTD
MS BELINDA HELGA STEWART &
MR ALEXANDER CHRISTOPHER STEWART
INTERDALE PTY LTD
66
16,825,421
15,000,000
5,767,676
2,650,000
2,365,621
2,123,299
1,983,333
1,913,689
1,908,613
1,250,000
1,250,000
1,192,883
1,160,000
1,129,867
1,083,334
1,059,790
1,038,258
1,008,595
1,000,000
1,000,000
979,985
13.15%
11.73%
4.51%
2.07%
1.85%
1.66%
1.55%
1.50%
1.49%
0.98%
0.98%
0.93%
0.91%
0.88%
0.85%
0.83%
0.81%
0.79%
0.78%
0.78%
0.77%
975,000
0.76%
64,665,364
50.56%
K-TIG Limited and Its Controlled Entities
ASX Additional Information
Substantial Share Holders of Issued Capital
Name
Number of shares
%
ADVANCED SCIENCE & INNOVATION COMPANY (ASIC) LLC
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
NEIL GARRY LE QUESNE
Unlisted Options – exercisable at $0.30 per option expiring 30 September 2023
Distribution of Option Holders
19,717,068
16,825,421
11,962,407
11.66%
9.95%
7.07%
48,504,896
28.68%
Number of
Holders
Number of
Options
-
-
-
11
19
30
-
-
-
762,904
5,849,248
6,612,152
Number of Options
%
649,770
541,510
500,000
433,492
425,000
399,770
370,000
353,213
350,000
4,022,755
9.83%
8.19%
7.56%
6.56%
6.43%
6.05%
5.60%
5.34%
5.29%
60.84%
Number of
Holders
Number of
Performance
Rights
-
-
-
-
4
4
-
-
-
-
2,000,000
2,000,000
Number of
Performance
Rights
500,000
500,000
500,000
500,000
2,000,000
%
25.00%
25.00%
25.00%
25.00%
100.00%
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Substantial Option Holders
Name
DIVERSE CAPITAL PTE LTD
LONHRO (WA) PTY LTD
LDHW PTY LTD
CRB INVESTMENTS (WA) PTY LTD
SOLAR MATE PTY LTD
SRG PARTNERS PTY LTD
SBV CAPITAL PTY LTD
ACNS CAPITAL MARKETS PTY LTD
TR NOMINEES PTY LTD
Performance Rights
Distribution of Performance Rights Holders – Class A
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Substantial Performance Rights Holders – Class A
Name of KMP
STUART CARMICHAEL
MARK TWYCROSS
SYED BASAR SHUEB
ANTHONY MCINTOSH
Name of Registered Holder
SBV CAPITAL PTY LTD
MR MARK TWYCROSS
SYED BASAR SHUEB
MUTUAL TRUST PTY LTD
67
K-TIG Limited and Its Controlled Entities
ASX Additional Information
Performance Rights
Distribution of Performance Rights Holders – Class B
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Substantial Performance Rights Holders – Class B
Name of KMP
STUART CARMICHAEL
MARK TWYCROSS
SYED BASAR SHUEB
ANTHONY MCINTOSH
Performance Rights
Name of Registered Holder
SBV CAPITAL PTY LTD
MR MARK TWYCROSS
SYED BASAR SHUEB
MUTUAL TRUST PTY LTD
Distribution of Performance Rights Holders – Class C
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Substantial Performance Rights Holders – Class C
Name of KMP
STUART CARMICHAEL
MARK TWYCROSS
SYED BASAR SHUEB
ANTHONY MCINTOSH
Restricted Securities
Name of Registered Holder
SBV CAPITAL PTY LTD
MR MARK TWYCROSS
SYED BASAR SHUEB
MUTUAL TRUST PTY LTD
Number of
Holders
Number of
Performance
Rights
-
-
-
-
4
4
-
-
-
-
2,000,000
2,000,000
Number of
Performance
Rights
%
500,000
500,000
500,000
500,000
25.00%
25.00%
25.00%
25.00%
2,000,000 100.00%
Number of
Holders
Number of
Performance
Rights
-
-
-
-
4
4
-
-
-
-
2,000,000
2,000,000
Number of
Performance
Rights
%
500,000
500,000
500,000
500,000
25.00%
25.00%
25.00%
25.00%
2,000,000 100.00%
Restricted Class
Number of Securities
Restriction Period
Fully paid ordinary shares
Unlisted options
41,204,799
5,472,152
24 months from date of quotation
24 months from date of quotation
On-Market Buy Back
There is no current on-market buy back.
68
K-TIG Limited and Its Controlled Entities
ASX Additional Information
Voting Rights
All ordinary shares carry one vote per share without restriction. Options have no voting rights.
Use of Proceeds
In accordance with listing rule 4.10.19, the Company confirms that it has not used its cash and assets in a form readily
convertible to cash in a way consistent with its business objectives at the time of admission.
Since listing the Company has received total cash receipts of approx. $1.5m and grant funding receipts of approx. $0.2m.
Additionally, the Company undertook a secondary capital raising of $5.6m and received process of options conversion of
approx. $0.5m.
Since listing, the Company has provided regular updates to the market regarding its growth strategy and use of funds
including deferral of long-lead items due to COVID-19 (refer to ASX release dated 8 April 2020).
Corporate Governance
The Company’s corporate governance statement is found on the Company’s website at www.k-tig.com/corporate-
governance.
69