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AnnuAl RepoRt 2021
BECAUSE TRUTH
IN DATA MATTERS
Nuix Limited
Annual Report 2021
FINDING TRUTH IN
A DIGITAL WORLD
Nuix at a glance
Nuix is a leading provider of investigative analytics and intelligence software.
1,000+
customers across 79 countries
439
staff worldwide
ASX: NXL
Listed on the ASX on 4 Dec, 2020
Australia
Headquartered in Sydney, Australia
Contents
02
06
08
10
12
16
18
Finding truth in a digital world
Our platform is evolving
Our opportunity is large
Chairman’s Letter
CEO’s Review
Our Vision
ESG Report
42
63
88
141
151
154
Directors’ Report
Remuneration Report
Financial Report
Directors’ Declaration
Shareholder Information
Corporate Directory
01
FY21 Key Financial Metrics
Statutory Revenue
Gross Margin
$176.1m
Up 0.1% on FY20
89.3%Up from 88.2% in FY20
Up 7.4% on constant currency basis
89.3% in constant currency
Annualised Contract Value (ACV)
Customer Churn
$165.6m
Down 1.7% on FY20
3.7%Down from 4.7% in FY20
Up 4.1% on constant currency basis
3.7% in constant currency
Pro forma EBITDA
Net Dollar Retention (NDR)
$67.0m
Up 20.9% on FY20
95.5%Down from 107% in FY20
Up 31.9% on constant currency basis
100.8% in constant currency
Subscription ACV
89%Up from 84% in FY20
88% in constant currency
Consumption ACV
$20.2m
Up 12.1% in FY20
Up 22.4% in constant currency
Net Cash
$70.9m
Up from $38.5m in FY20
02 Nuix Limited
Annual Report 2021
FINDING TRUTH
IN A DIGITAL WORLD
Nuix is a global software technology company that helps customers
transform massive amounts of messy data into actionable intelligence
at scale and speed with forensic accuracy.
Nuix is a leader in eDiscover and digital forensic software, and an
emerging player in the governance, risk and compliance (GRC) market.
With customers in 79 countries, Nuix has been developing its software
for over 15 years.
A key strength lies in Nuix’s data processing capability delivered
by the Nuix engine. The engine is the core of the platform and
enables revenue generation across multiple customer segments,
use cases and geographies.
THE PATENTED NUIX ENGINE
A supercharged data processing, search and
intelligence platform
AN END-TO-END SOLUTION
Products that solve real-world problems,
from the endpoint to the courtroom
INVESTIGATIVE ANALYTICS
identify intelligence, patterns, and correlations
that no human could otherwise find
A FULLY INTEGRATED PLATFORM
Open, extensible and intuitive for users
OUR PEOPLE
We hire the best and build their expertise
into our software
03
CLARITY FROM
COMPLEXITY
Nuix makes data searchable, particularly unstructured data,
including emails, text messages, images, videos, voice messages
and social media data. Files can be searched, sorted and digitally
linked back to the source, providing forensic accuracy that can
be used as evidence in courtrooms.
Nuix software is used by many of the world’s leading organisations in
some of their most critical work such as digital forensic investigation,
financial crime, litigation support, employee and insider investigations,
data protection and privacy, data governance, and eDiscovery and
regulatory compliance.
04 Nuix Limited
Annual Report 2021
AT THE HEART OF
DATA ECOSYSTEMS
The Nuix platform comprises a powerful, proprietary, data
processing engine called the Nuix Engine and software
applications – Nuix Engine, Nuix Discover, Nuix Investigate,
Nuix Enterprise Collection Center, Nuix Adaptive Security,
and APIs and connectors for third party applications.
The applications have been developed in-house and shaped by
feedback from long-standing government and private sector
customers over the past 15 years. Not only does the Nuix
Engine search for data at speed and scale, but it also identifies
intelligence, patterns, and correlations that no human could
find and can process over 1,000 different file types.
05
YOU’LL FIND
OUR PLATFORM
SOFTWARE
APPLICATIONS1
NUIX
WORKSTATION
NUIX
INVESTIGATE
NUIX
ENDPOINT
NUIX
DISCOVER
APIS AND
CONNECTORS
(FOR THIRD
PARTY
APPLICATIONS)
ENGAGE WITH THE DATA
Nuix Engine
Enrich data with specific identifiers for
detailed and granular search capabilities
NUIX ENGINE1
Consolidate metadata into
Nuix format for search
Extract text and metadata
from each file type
Ingestion engine for 1,000+ file types
SOURCES
OF DATA
Human
generated data
Digital
User data
Enterprise
and cloud
repositories
Logs
Endpoint
behaviour
monitoring
Network
data
Third party
feeds
Communications
Multimedia
Structured
data
Endpoint
collections
1. Components of the Nuix platform are represented by the software applications boxes and the Nuix Engine boxes.
Nuix Endpoint
monitoring and
data collections
06 Nuix Limited
Annual Report 2021
OUR PLATFORM
IS EVOLVING
Nuix’s Software as a Service (SaaS) journey continues, capitalising on
the rapid and massive shift of data to the cloud. The Discover product
is already offered on a SaaS basis, with strong customer endorsement.
A key development goal for the near term is Engine as a Service: horizontally
scalable processing in the cloud.
Nuix continues to build on its already strong product portfolio, with
investment towards a Unified Collections platform, as well as delivering
further value-add solutions, such as those associated with Governance,
Risk and Compliance (GRC), Compliance Scanner and eComms Surveillance.
Data compliance
challenges
increasingly costly
for customers
Compliance
solutions
and Engine as a
Service address key
time to value and
cost pain points
Entire portfolio
and solutions
available as SaaS
CLOUD
eComms Surveillance
eComms Surveillance
Compliance Scanner
Compliance Scanner
Nuix Discover®
Additional Solutions
Nuix Discover®
Engine as a Service
Nuix SaaS
ON PREMISE
Nuix Adaptive Security
Nuix Enterprise
Collection Centre
Nuix Investigate®
Nuix Engine
Unified Collections
Nuix Investigate®
Nuix Engine
New market Solutions
Additional offering
Existing market solutions
07
AND MOVING
TO THE CLOUD
Governance, Risk and Compliance is a key focus area
for Nuix customers, and a strong growth opportunity.
Data proliferation to the cloud complicates GRC mandates.
Cost benefits, time to value and speed of resolution are
critical to customers’ immediate requirements.
Currently, the Nuix Discover product is available on a
SaaS basis. The next stage of Nuix’s cloud evolution
involves not only introducing new products to the cloud,
but also making some existing products available on a
SaaS basis. Important work is currently underway on
these initiatives, including Engine as a Service.
Ultimately, Nuix will be able to offer entire portfolio
solutions to customers on a SaaS basis, as well as
having on-premises capability for those customers
that need or want it.
08 Nuix Limited
Annual Report 2021
OUR
OPPORTUNITY
IS LARGE
MULTIPLE GROWTH LEVERS
Future growth depends on expanding into new markets and gaining
market share by developing applications around the powerful Nuix Engine.
1WIN NEW
CUSTOMERS
Expand across geographies
and in targeted industries
by winning new customers
and gaining market share
in $27bn1 total addressable
market (TAM).
2‘LAND AND EXPAND’
STRATEGY
Expand across key industry
verticals. This involves
driving new customer
acquisition and upsell
and renewal of existing
customers.
3INVESTMENT TO
EXTEND THE NUIX
PLATFORM
Extend the functionality
of the Nuix software
platform by creating
products which attract new
customers, drive upsell or
create renewal activity.
4OPERATING
EFFICIENCY
Extract benefits of scale as
the business grows; continue
to drive improvements in
operating margin.
5PARTNER
CONSIDERATIONS
Build a network of strategic
partners who can provide
complimentary delivery
and market expansion
capabilities to drive future
revenue sources.
6VALUE-ACCRETIVE
M&A
Assess opportunities based
on strategic fit, relevance
and synergies and target
the acquisition of capabilities
rather than revenue alone.
1. Refer FY21 Results Presentation for further information on TAM.
09
CUSTOMER STORY:
Squire Patton Boggs
Conducting two large disputes
with 14 million documents
between them, law firm
Squire Patton Boggs knew it
would need all the technological
help it could get to meet
dispute deadlines.
The firm’s litigation teams used
Nuix Discover Software as a
Service, hosted in Australian
datacentres, to process
approximately 10 terabytes
of data. Nuix’s suite of analytics
tools – including search terms,
visualisations, customisable
views and machine learning –
was used to reduce the volume
of data to a manageable number
of documents for review.
Results
• Managed costs and quality
by processing and reviewing
all data in-house, while
retaining flexibility.
• Achieved review and
production quantities
that would not have been
possible with manual or
outsourced processes.
• Maintained the confidentiality
of sensitive client data
thanks to Nuix’s robust
cloud security measures.
Squire Patton Boggs
Squire Patton Boggs is an
international law firm with
45 offices in 20 countries.
Its client base spans a diverse
mix of business, both private and
public, worldwide, from Fortune
100 and FTSE 100 corporations
to emerging companies, and
from individuals to local and
national governments.
10 Nuix Limited
Annual Report 2021
CHAIRMAN’S
LETTER
Hon. Jeffrey Bleich
Chair
On behalf of your Directors, I am grateful to present the 2021
Annual Report for Nuix Limited, our first since listing on the
Australian Securities Exchange in December 2020.
Like many people, I was first
drawn to Nuix by the calibre of
Nuix’s technology, people and
customers – and their potential
to do something important; to
bring order to a chaotic digital
world. This mission, and the Nuix
solutions, teams, and customers
behind it, are the source of Nuix’s
strength. Now, after nearly a year
as Chair, my faith in that mission,
and my belief in Nuix’s potential
has never been greater. Nuix’s
three pillars – extraordinary
technology, innovative people,
and inspiring customers – have
stayed resilient and undiminished
throughout a turbulent year. Nuix
has grown stronger and wiser
from each challenge, and it is
poised to achieve its full potential.
In the two decades since Nuix’s
founding, Nuix has demonstrated
a rare ability to evolve and adapt
to a rapidly changing environment.
It has continually anticipated
and adapted to the challenges
of finding patterns and meaning
in structured, semi-structured
and unstructured data. Its purpose
has been its one constant –
finding truth in a digital world.
Our core technology built around
the Nuix Engine accomplishes this
in a unique, world-leading way.
It has earned the commitment
of some of the most respected
customers in the world and
propelled a once-small company
in Sydney to a global leader.
As a result, despite unexpected
challenges and impacts this past
year, we continued to grow our
customer base, attract exceptional
new talent, accelerate our
movement of the Nuix Engine
into the cloud and re-engineer
our offerings to deliver them
to our customers through
a Software-as-a-Service
(SaaS) model.
DEMONSTRATING
RESILIENCE AND
ADAPTABILITY
Our FY21 performance reflects
these qualities of resilience and
adaptation. While our FY21 revenue
results did not meet our initial
expectations, we delivered a solid
financial performance across
revenue, Annualised Contract
Value (ACV) and earnings before
interest, depreciation and
amortisation (EBITDA). This was
on the back of low churn, a strong
increase in multi-year deals and a
rise in consumption (including
SaaS) licences. Among the many
tests faced in the early part of its
life as an ASX-listed company,
Nuix encountered unexpected
effects from Covid-19-related
events, an extended transition
of government administration in
the United States following the
November 2020 election, and
unusual levels of critical attention.
Nuix demonstrated resilience
through the volatile pandemic
conditions across all of our
international markets. Our people
worked tirelessly to ensure
continuity of our client services
and this passionate commitment
and energy was expressed across
the entire organisation.
A strong endorsement of the
strength and uniqueness of our
technology is that our customers
have overwhelmingly stuck with
us because of the tremendous
value our solutions bring to their
operations. We are grateful to
them and committed to continuing
to deliver the highest standard
of technical excellence and
support to help them achieve
their ambitions.
We recognise that our people
are our most important asset
and as an organisation we have
concentrated on our valued
team members around the globe,
ensuring they have the necessary
support and incentives to deliver
future success for our business.
Nuix continues to attract great
talent, welcoming 119 new people
this year, a new world-class
Chief Financial Officer in
Chad Barton, two coveted
Solutions leads in Abdes Afran
and Oliver Harvey, and other
deeply talented leaders. As we
look forward to FY22, we will
continue to work to attract the
very best people and keep
investing for growth, particularly
in sales and engineering roles.
STRENGTHENING OUR
GOVERNANCE
The transition from private
to public ownership had
disappointments, and we
recognize the toll this took
on those who had higher hopes
for the year. But the measure
of a company’s governance is not
whether it has ever disappointed,
but whether it acknowledges
shortcomings and improves.
Already, we have drawn lessons,
and taken actions over these past
11
months to emerge stronger and
unlock the tremendous potential
of this business.
The Board and senior management
are committed to strengthening
our governance and we have
listened carefully to the wisdom
of our stakeholders and are taking
necessary measures to achieve
their aspirations for us. In doing
so, we expect gradually but fully
to restore the trust and confidence
of the market, including all of our
valued shareholders. Hiring our
new, highly accomplished Head
of Investor Relations, Brett Dimon,
reflects this commitment to
enhancing our engagement
with the market and to meeting
your expectations of world-class
governance.
After establishing an Independent
Board Sub-Committee to examine
and address concerns in May 2021,
and enhancing our internal risk
management capabilities, we have
seen our progress generating
momentum. The effort to expand
our Board drew an exceptional
field of candidates, leading to the
additions of skilful and experienced
Non-Executive Directors Jackie
Korhonen and Rob Mactier, in
October 2021.
The effort to expand our Board
drew an exceptional field of
candidates, leading to the additions
of skilful and experienced
Non-Executive Directors Jackie
Korhonen and Rob Mactier,
in October 2021. And with our
CEO succession now underway,
we are encouraged by the response
from a remarkably talented field
of candidates with ambitions to
serve as Nuix’s next CEO.
We will continue to engage
transparently and in good
faith with our key stakeholders,
including our regulators, and
we remain confident in our
financial accounting and in the
processes that underpinned the
development of our Prospectus.
CARING FOR OUR
PEOPLE AND
COMMUNITIES
Our commitment to finding
truth and order in the digital
world extends to the physical
world as well. And this begins
with us. Nuix is committed to
promoting the wellbeing of our
team members and contributing
to the communities wherever
we operate.
This past year, we implemented
a global wellbeing program
enabling our team members
to focus on their health and
wellness by accessing resources
and activities, fitness initiatives
and a range of other programs.
The best employees stay sharp,
and that requires healthy habits.
Our employee social groups have
also driven their own initiatives
in each region. Over one-third of
our global workforce participated
in a six-week team fitness
challenge this year, and our teams
developed other means to increase
connectedness through social
interactions, and a devotion to
public causes.
In 2020 we formalised The Nuix
Foundation to protect and defend
vulnerable groups by donating
software and services to agencies
and not-for-profit organisations.
During FY21, the Foundation
supported Freeland and TRAFFIC,
enabling these organisations
to combat the horror of illegal
human trafficking and the
exploitation of wildlife trafficking.
The Foundation has supported
a range of projects to deliver
positive learning outcomes
at all levels in digital discovery
and forensics, as well as building
schools, providing literacy
materials and sponsoring higher
education paths. The Foundation
builds on Nuix’s longstanding
relationship with Room to Read,
a not-for-profit organisation for
improving literacy and gender
equality in developing countries.
We are proud of our spirit of
sacrifice and service to others.
Nuix matches donations made
by our staff to various causes
and during the year those
donations supported communities
devastated by the floods in the
Philippines, the explosion in Beirut
and the COVID crisis in India.
We also participate broadly
in global health causes such
as Movember. We introduced
one day of volunteer leave for all
staff globally this year, enabling
all staff to dedicate time to causes
that are important to them.
LOOKING FORWARD
TO THE FUTURE
We are already hard at work writing
the next chapter of the Nuix story.
Having seen how the most vital
parts of Nuix have responded
to this first year, and stepped
up to any challenge, Nuix is
better-positioned than ever
to succeed over the long-term.
Our technology remains best-in-
class, our customers have shown
that they understand the unique
value we are able to provide, and
we have strengthened our team
and matured our structure to
capture the significant market
opportunity ahead of us.
I would like to thank all Nuix team
members for their commitment
and resilience this year. And I am
grateful to our shareholders
for your ongoing confidence
and support.
Yours sincerely,
Hon. Jeffrey Bleich
Chair
12 Nuix Limited
Annual Report 2021
CEO’S
REVIEW
Rod Vawdrey
Group Chief Executive Officer
To speak to the strength of the Nuix offering is really to
speak to three different components: our technology, our
customer base and our people, in conjunction with our
broader stakeholder groups.
Nuix is a global business, with more than 1,000 customers across
the globe, generating nearly 90% of revenue outside Australia.
Our customer base is long-term and sticky, as well as being well
diversified. Our technology is best in class, supported by an exceptional
pool of people advancing the Nuix story with a shared vision. The power
of the Nuix Engine as a platform for new use cases, together with
our strength in eDiscovery, Forensics and Government, Risk and
Compliance continues to be our competitive advantage and the
focus of our land and expand strategy.
WORKING THROUGH
THE PANDEMIC
Working through the pandemic
has been challenging for
everyone. For Nuix, this has
meant most of our staff worked
from home from March 2020.
Our people and our technology
are our greatest assets. Over the
last year, our people pivoted to
delivering virtual marketing
events and engagement with
customers, providing virtual
setup, support and training, with
an increase in the number of
customers achieving various
accreditations. We continue to
engage with our employees not
only on their wellbeing, but also
the work environment that they
need to meet the way that they
work, while continuing to deliver
for our customers.
I’d like to take this opportunity
to sincerely thank the team for
the way they’ve responded to
these challenges over the last
12 months and for the way our
customers have acknowledged
and rewarded us with an
even stronger commitment
to our software.
13
“ THE OPPORTUNITY FOR NUIX TO
CONTINUE TO CONTRIBUTE TO
OUR CUSTOMERS’ TECHNOLOGY
NEEDS AND PARTICIPATE IN
BROADER SOCIAL GOOD IS
SIGNIFICANT.”
BUSINESS
PERFORMANCE
Our financial results for FY21
highlighted the recurring
nature of our revenue and
sticky customer base. Statutory
revenue came in at $176.1 million,
up 0.1% on the previous year and
up 7.4% on a constant currency
basis. Annualised contract
value (ACV) at 30 June 2021 was
$165.6 million, down 1.7% on
the same time last year and up
4.1% on a constant currency
basis. Pro forma EBITDA for the
full year was $67.0 million, up
20.9% on FY20 and 31.9% on a
constant currency basis, driven
by continued cost savings.
At the statutory revenue and
ACV levels we did not meet our
prospectus forecasts. The primary
reasons for the miss were foreign
exchange impacts, a weaker than
expected result from our
US Government business
and the short-term impacts
of customer transitions to
consumption licences. EBITDA
exceeded prospectus forecasts.
Nuix’s customer base remains
strong, highlighted by a very low
churn figure of 3.7%, endorsing
the competitive advantage
of our technology.
Subscription ACV, which is an
important indicator of recurring
revenue for the Group rose to
89% from 84% a year ago.
The shift to consumption licences
is an important trend affecting
our market. Consumption ACV
grew to $20.2 million over the
course of the year, up 12%,
and up 22% in constant currency.
Consumption licences include
SaaS licences as a sub-component.
The growth in consumption
licences is customer led and
we continue to respond to this
market demand. The shift in
customers from module-based
licences to consumption-based
licences is a key reason our
overall upsell figures were
muted over the course of the
year. As customers transition to
consumption-based licences we
typically see an initial downsell to
the minimum contracted amount,
with data volumes increasing over
time. From Nuix’s perspective,
there are important benefits in
linking our revenue more closely
to increasing data growth in
the market over the medium
to long-term.
Nuix finished the year in a strong
financial position, with almost
$71 million in net cash, giving the
organisation flexibility to pursue
growth opportunities.
PROGRESS ON KEY
INITIATIVES
Nuix made important progress
during the year on a number
of key initiatives. In the US,
corporate and law firms were
particular areas of growth.
Customer confidence in these
areas was strong, with two
large Discover SaaS deals won
from tier-1 global law firms.
Many customers committed to
multi-year deals at higher than
anticipated levels, demonstrating
the importance of continuity with
Nuix as their business expands.
It was a challenging year for
our US Government business,
given the election and the
pandemic. Pleasingly, we saw
some significant contract wins
come through late in the financial
year, building momentum into
FY22, as we’ve seen departments
restarting projects.
In EMEA, multi-year contracts
were re-signed with two major
advisory firms and we had
important wins with significant
European corporates. In Germany,
we welcomed 27 new SaaS
customers and new employees
were onboarded for our
expansion into Southern Europe.
14 Nuix Limited
Annual Report 2021
CEO’S REVIEW (CONTINUED)
In Australia, we had several
important wins with government
agencies and law firms. A big
four bank is using Nuix to
identify Personally Identifiable
Information (PII) data across
the enterprise using Compliance
Scanner, our first out GRC use
case. In fact, in all regions,
we’re seeing solid customer
interest around our emerging
GRC applications, eComms
surveillance and Compliance
Scanner, with several early
adopters.
INVESTING IN RESEARCH
AND DEVELOPMENT
Our Research and Development
program continues at pace.
During FY21 we made solid
progress towards FedRAMP
accreditation, which will open
up new opportunities for our US
Government business in FY22 and
beyond. This accreditation is part
of a broader investment in SaaS
capability. During the year, our
team developed important
connectors into market leading
business and productivity
applications, as well as the ability
to quickly review chat messages
in Discover and Investigate.
We were able to open up new
markets with localised versions of
Discover (French) and Investigate
( Japanese and German) as well as
developing support for additional
mobile forensics platforms.
Our investment into Research and
Development will continue into
the near future with current work
seeing us expand our offering
beyond AWS and Azure in the
near term based on customer
requirements. We will continue
the Nuix SaaS journey, capitalising
on the rapid and massive shift to
the cloud. Our Discovery product
is already offered on a SaaS basis
with strong customer endorsement.
A key development goal for the
near term is Engine-as-a-Service,
horizontally scalable processing
in the cloud.
Other important elements of our
investment include building on our
already strong product portfolio,
with a unified collections platform,
as well as delivering further
value-added solutions such
as Compliance Scanner and
eComms Surveillance.
THE NUIX TEAM
Our people remain at the heart of
our organisation. Nuix continues
to attract high quality candidates
as we grow. Two significant hiring
campaigns commenced in
relation to EMEA and engineering,
which was followed with a third
campaign to add sales resources
in the United States. This year,
Nuix added people in France and
Italy for the first time, and we’ve
made further improvements in
our approach to ESG, including
important initiatives for our
people and a renewed focus on
our remuneration programs,
wellbeing, training, development
and recruitment.
Nuix’s leadership team continues
to expand. Over the last 18 months,
about 40% of the leadership team
are new to Nuix and this brings
new ideas and fresh approaches
to an already robust leadership
team, which will aid in the
evolution of the company.
Despite some challenging
conditions in FY21, the Nuix
team made considerable
advances in terms of customer
wins and expansion, research
and development and initiatives
to support our people.
The opportunity for Nuix to
continue to contribute to our
customers’ technology needs
and participate in broader
social good is significant.
As an organisation we remain
on track to innovate and evolve.
We will continue to work hard
to support all our stakeholder
groups into FY22 and beyond.
Thank you to our people,
customers, partners, shareholders
and other stakeholders for
your support this year.
Rod Vawdrey
Group Chief Executive Officer
15
NUIX FINISHED
THE YEAR IN A
STRONG FINANCIAL
POSITION, WITH
$70.9 MIllIon IN
NET CASH, GIVING
THE ORGANISATION
FLEXIBILITY TO
PURSUE GROWTH
OPPORTUNITIES
16 Nuix Limited
Annual Report 2021
Our Vision
FINDING TRUTH
IN A DIGITAL
WORLD
Nuix’s vision is “finding truth in a digital world”. Nuix strives to
foster a customer-collaborative and innovative culture through a
talented team of employees who are motivated to build software
with purpose and assist its customers to contribute to a wider
public and social good. All Nuix employees are encouraged to follow
Nuix’s six core values, which drives the success or the organisation.
NUIX CORE
VALUES
17
CUSTOMER STORY:
Police Scotland
Seeking to improve the
efficiency of its digital
forensics investigations, Police
Scotland benchmarked its
traditional technologies and
processes against a workflow
using Nuix Workstation and
Nuix Investigate.
For the proof of concept, Police
Scotland used a series of drug
supply cases that involved data
from seized mobile devices and
an investigation into a major
fraud operation, which had
netted more than £4 million and
involved more than 100 mobile
devices and computers.
“This is, without doubt,
more robust, more efficient
and more cost-effective
than anything ever used
previously and is definitely
the way forward.”
– Senior investigator,
Police Scotland
Results
• Halved the average time
it took officers to complete
a forensic analysis.
• Increased the average
number of cases completed
per analyst by 75 per cent.
• Allowed investigators to
complete a case in months
that would have taken years
using the old methods.
Police Scotland
Police Scotland’s purpose is
to improve the safety and
wellbeing of people, places
and communities in Scotland,
focusing on Keeping People Safe
in line with the values of Integrity,
Fairness and Respect. It is the
second largest force in the UK
after the Metropolitan Police
with a workforce of 23,000 officers
and staff working together for
the people of Scotland.
18 Nuix Limited
Annual Report 2021
ESG Report
ENVIRONMENT,
SOCIAL AND
GOVERNANCE
This is the first time Nuix
Limited is presenting
information on Environmental,
Social and Governance (ESG)
topics and it covers the period
from 1 July 2020 to 30 June 2021.
In developing this information,
Nuix was guided by the
Sustainability Accounting
Standards Board’s (SASB),
Software and IT Services
Sustainability Standard on
the basis of preparation and
identification of the most
relevant and significant areas
of focus for this report.
Nuix is a powerful platform
trusted by organisations around
the world to deliver insights into
data. Whilst this is our first ESG
Report we have a long history
of contributing to society.
Our software is often used for
beneficial societal outcomes,
such as:
• Nuix’s software is used by
customers involved in counter-
terrorism and investigations of
other violent and premeditated
crimes, as well as preventing
and remediating insider threat
and cyber security breaches
• Nuix helps higher education
institutions that offer
coursework in eDiscovery and
digital forensic investigation by
providing Nuix software and
training for university staff
who teach these disciplines
• Nuix has established
relationships with 11 higher
education providers across
the US and the UK
• Nuix has provided investigation
software at no charge in
a number of high-profile
investigations including
Matla A Bana – a Not For
Profit working with the child
protection units and the
International Consortium
of Investigative Journalists
(ICIJ) to support its work in
publishing the Paradise Papers,
Panama Papers and the
Offshore Leaks Database.
19
NUIX IS A POWERFUL
PLATFORM TRUSTED
BY ORGANISATIONS
AROUND THE WORLD
Since listing, Nuix continues to formulate its strategy and approach to ESG and we will continue to
refine our approach. This includes defining issues that matter most in the context of the work that
Nuix undertakes. Nuix identified the following key areas of focus within the pillars of ESG:
ENVIRONMENT
SOCIAL
GOVERNANCE
FY21
HIGHLIGHTS
• Continued to partner
with suppliers with
Net Zero or Carbon
Neutral plans in place.
• Formalised the Nuix Foundation
to build on the previous
philanthropic work Nuix has
undertaken in the past 10 years
through Room to Read.
• Released the inaugural
Modern Slavery Statement
in March 2021.
• Introduced volunteer leave
for all staff globally.
• Established a global
wellbeing program.
• Appointment of interim
Chief Financial Officer,
Chad Barton in June 2021.
• Established an internal Investor
Relations function and
appointed a Head of Investor
Relations in July, to lead Nuix’s
engagement with investors and
other stakeholders to ensure
Nuix remains responsive to
market feedback and engages
proactively and regularly on
matters that are important to
our stakeholders.
• Established a risk function.
• Establishment of an
Independent Board Sub-
Committee to ensure appropriate
oversight and review of recent
matters raised by market
participants. The Independent
Board Sub-Committee is
comprised of independent
directors Hon. Jeff Bleich,
Sir Iain Lobban and Sue Thomas
and it works with external
advisers and Nuix’s internal
legal and risk management
functions.
20 Nuix Limited
Annual Report 2021
ENVIRONMENT, SOCIAL
AND GOVERNANCE (CONTINUED)
ENVIRONMENT
SOCIAL
GOVERNANCE
FUTURE
DIRECTION
• To continue to assess
and review our
existing supplier and
partner network’s
compliance with the
law.
• Operating Nuix’s
infrastructure with
AWS efficiently and
to mitigate future
emissions.
• Enhancing future
procurement decisions
to better consider the
environment and
climate impacts.
• We intend to further
study Nuix’s carbon
footprint and develop
a pathway towards
carbon neutrality.
• During FY22, Nuix will further
formalise its ESG strategy,
including key performance
indicators and targets to
measure and track our
performance.
• Additional Board Appointments:
After the end of the Financial
Year, Nuix announced the
expansion of the Board with
the appointment of two new
independent Non-Executive
Directors. These appointments
expand the Board composition
from five to seven members.
• Working toward developing
and implementing components
of each of the Risk Management
Framework pillars in a
considered manner.
• Further support our staff through
a number of initiatives, including
focus on: values, leadership,
employee engagement,
communication, talent acquisition
and retention and diversity.
• Increasing our awareness and
understanding of our partner and
supplier compliance, amend our
current third-party risk
assessment to include questions
aimed at uncovering potential
modern-day slavery and human
trafficking issues, and eliciting
minimum commitments with
respect to ongoing compliance.
• Working with suppliers to better
understand our supply chain both
in terms of human rights and
climate targets.
• Implement a process, to ensure
to the maximum extent possible
that our technology is not sold to
parties who may use it for social
purposes which do not meet our
values.
• Enhancing Nuix’s giving through
the Foundation and enabling
further support to the causes that
are important to our employees
with matching programs.
• Leadership: further developing
the understanding of employee
roles as leaders and how they
“show up” to their teams.
Increasing capability through
training, coaching and toolkits,
and engaging leaders in
communications and the
role they play.
• Diversity: building awareness of
inclusion and the importance of
creating an inclusive environment
and better leveraging diversity
initiatives such as broadening the
impact of Women in Nuix,
increasing awareness of biases
and tools for ensuring an
inclusive work environment.
This report contains information on current ESG initiatives and Nuix’s plans for the year ahead and beyond.
Nuix intends to undertake a more formal materiality assessment in the coming year to explore and prioritise
the most relevant areas of focus for ESG reporting.
21
CUSTOMER STORY:
Bird & Bird
International law firm
Bird & Bird relied on external
providers to collect and process
data for investigations and
legal cases. Nuix was able to
offer a more efficient solution.
Bird & Bird’s in-house digital
forensics team now uses Nuix
Enterprise Collection Centre to
gather digital evidence from
client sites, including files email,
cloud sources and mobile devices.
The team then applies Nuix
Workstation to process, filter
and interrogate the data before
loading relevant items into its
secure review environment.
Results
• Reduced data volumes sent
for review by up to 90%.
• Controlled fees paid
to external providers,
allowing greater flexibility
on pricing client services.
• Streamlined discovery
processes with fewer data
exchanges between parties.
Bird & Bird
Bird & Bird (www.twobirds.com)
is an international law firm with
a focus on helping organisations
being changed by technology
and the digital world. It has more
than 1,300 lawyers in 29 offices
across Europe, the Middle East,
Asia-Pacific and North America.
“We don’t have to rely on our clients knowing
how to extract data – we give them a hard drive;
they plug it in and it collects everything for them.”
– Head of Forensic Technology, Bird & Bird Poland
22 Nuix Limited
Annual Report 2021
ESG Report
ENVIRONMENTAL
RESPONSIBILITY
As a global company we play an important role in
addressing climate change. The company is currently
undertaking work to more accurately measure its carbon
footprint and greenhouse gas emissions. It is anticipated
further detail will be released in the FY22 annual report.
Nuix’s longer-term ambition is to become Net Zero or
Carbon Neutral for our global operations, whereby our
greenhouse gas emissions are reduced and offset by
purchasing carbon offsets. The next steps in our Net Zero
commitment will be commenced once the company’s
global carbon footprint work is completed.
ENVIRONMENTAL
FOOTPRINT OF
HARDWARE
INFRASTRUCTURE
Nuix’s carbon emissions and the
environmental footprint of our
hardware infrastructure is largely
attributable to the buildings we
occupy as part of the Nuix offices
around the globe where our
staff are located.
These buildings are under
leasing arrangements. As such
Nuix’s operations are not carbon
intensive and direct emissions
include energy use from
electricity and gas for heating
and cooling the offices Nuix
staff are located in.
Indirect greenhouse gas
emissions, also known as
Scope 3 emissions, that occur
as a consequence of the activities
of a facility, but from sources not
owned or controlled by facility’s
business, most significantly
includes the use of data centres
that host Nuix’s SaaS platform.
23
DATA CENTRES –
INDIRECT EMISSIONS
IN OUR SUPPLY CHAIN
Nuix utilises multiple data centre
providers to run its business/
corporate and customer services.
All customer services are run
on Amazon Web Services (AWS).
Amazon Web Services (AWS) has
made the following investments
in renewable energy1 in regions
that Nuix utilises:
• AWS CAD: Purchases
Renewable Energy Credits
and Guarantees of Origin;
• AWS SYD: One wind farm
and two solar farms;
• AWS FRA: Purchases
Renewable Energy Credits
and Guarantees of Origin;
• AWS LHR: Four wind farms;
• AWS GOV: 52 renewable energy
sites made up primarily of solar
farms and some wind farms.
AWS also focuses on its
environmental footprint
through end-to-end efficiency
across its facilities and its
water stewardship program.
Surveys conducted by 451
Research show that AWS’s
infrastructure is 3.5 times more
energy efficient than the median
of US enterprise datacentres
surveyed. AWS’s environmental
sustainability plan is to be
100 per cent renewable by 2025.
Nuix also utilises QTS in
Ashburton, Virginia, USA and
Macquarie Cloud Services in
Sydney, Australia. QTS2 has
set key environmental goals
for all of their facilities across
the USA, including:
• AWS NVA: 52 renewable energy
sites made up primarily of solar
farms and some wind farms;
• Produce 100 per cent
of power from renewable
energy sources;
• AWS ORE: Purchases
Renewable Energy Credits and
Guarantees of Origin; and
• Pursue green building
certification in 90 per cent
of QTS facilities by 2025;
• Conserve at least 10 million
gallons of water each year;
• Install electronic vehicle (EV)
charging stations at 30% of
ATS facilities by 2025;
• Recycle 600 million pounds
of material by 2025; and
• Macquarie Cloud Services
currently does not share their
sustainability plans for their
data centres.
E-WASTE – RECYCLING
OF OLD COMPUTER
EQUIPMENT
Nuix recycles all unwanted
or used computer equipment
annually, avoiding this equipment
ending up in landfill and causing
greenhouse gas emissions.
During FY21, Nuix employed
Reclamere in the USA to recycle
all unwanted equipment in the
Seattle, WA, office.
Nuix plans on measuring the
amount of equipment in tonnes
that is recycled and diverted
from landfill next financial year.
1
2
Sustainability in the Cloud (aboutamazon.com).
Environmentally-Friendly Green Data Centers | QTS Data Centers.
24 Nuix Limited
Annual Report 2021
ESG Report
SOCIAL
RESPONSIBILITY
As a global company with a vision to find the truth in a digital
world, Nuix has a responsibility to ensure that our social impact
is managed appropriately and that we continually look for ways
to make a positive contribution to the world in which we live.
Nuix’s software is used by our customers to solve real societal
problems. This is just one of the ways that Nuix works for the
greater good.
Nuix’s people are our most important asset. Nuix will continue
to invest in the welfare of its people with a range of different
initiatives focussing on wellbeing and development.
25
HELPING CUSTOMERS
SOLVE REAL SOCIETAL
ISSUES
Nuix software is used to solve
complex data problems across
a broad scope of use cases,
demonstrating the breadth
and flexibility of the platform.
Nuix’s customer base consists of
more than 1,000 existing customers
as at 30 June 2021, including large
government agencies, regulators,
corporations and professional
services firms. Nuix software is
sold directly by Nuix and indirectly
through a partner network of
over 180 partners who actively
market, and in some cases
support, the Nuix platform.
Alongside traditional corporate
uses, Nuix software is also used
for social good causes such as
combating child exploitation
and terrorism. Investigators
across different jurisdictions
use Nuix software to combat
criminal acts involving children
and other vulnerable groups
using tools that piece together
disparate information sets,
including dealing with evidence
in a sensitive way. Our product
teams and engineering teams
are dedicated to continuing to
innovate so that these crimes
can be prosecuted and prevented
in the future.
Additionally, our software is
used by customers involved
in counter-terrorism and
investigations of other violent
and premediated crimes. Nuix
Investigate allows analysts to
view data in relationship which
means they can see who was
talking to whom and from
where. Investigators can draw
relationships between seemingly
disparate data sources to combat
criminal activity.
Nuix Workstation, Investigate and
Adaptive Security are also used by
customers working to identify
and remediate insider threat and
cyber security breaches. Adaptive
Security allows Nuix customers to
analyse behaviour on endpoints
and stop processes in real time.
The tool can also incorporate
preventative rules to prevent
risky behaviour.
ENSURING OUR
CUSTOMERS’ VALUES
ARE ALIGNED TO A
GREATER GOOD
In order to ensure that Nuix
only conducts transactions with
parties in lawful3 jurisdictions,
all transactions are subject to
and conditioned upon successful
completion by Nuix of the
following procedures:
• Screening of all transactions
(including at the time of order
entry and shipment) for
Prohibited Destinations;
• Screening of all new leads,
contacts and opportunities
against the U.S. Consolidated
Screening List and other
international economic
sanctions and export screening
lists (for example, BIS Denied
Persons/Unverified List,
Most Wanted Terrorist List
(FBI), the Office of the
Superintendent of Financial
Institutions (OSFI) (Canada),
HM Treasury Sanction List (UK),
European Union Consolidated
Financial Sanctions List, United
Nations Security Council
Consolidated List); and
• Identification and notification
to the Legal Department of any
“red flags” or other indications
that shipment may present
a risk of diversion.
All positive hits and red flags
are reported to Nuix’s legal
department before any action is
taken or commitment is made.
Because the Prohibited Parties
and Prohibited Destinations
lists are modified frequently,
Nuix screens the entire customer
database periodically to ensure
that existing Nuix customers
subsequently designated as a
Prohibited Party are identified.
3
For example, the Crimea region of Ukraine, Cuba, Iran, North Korea, and Syria (Prohibited Destinations) or parties named
on the various sanctions and export screening lists maintained by the U.S. and other governments (Prohibited Parties).
26 Nuix Limited
Annual Report 2021
SOCIAL
RESPONSIBILITY (CONTINUED)
SOCIAL CONTRIBUTION –
THE NUIX FOUNDATION
Nuix has been contributing to the
greater good of solving societal
problems for over ten years
through its philanthropic work
with Room to Read, a not-for-
profit organisation for improving
literacy and gender equality
in developing countries.
During the year, the Nuix
Foundation was formalised.
The Foundation is a philanthropic
organisation which assists in
protecting and defending
vulnerable groups by donating
software and services to a range
of agencies and not-for-profits.
These organisations drive positive
learning outcomes in digital
discovery and forensics, as well
as build schools, provide literacy
materials and sponsoring higher
education paths.
These activities reflect Nuix’s
core values by partnering with
progressive organisations that
strive to make a positive
contribution to society.
During FY21, the Nuix Foundation
continued to build on its
past success by donating its
investigation software and
associated training to the
value of A$150,000 to Freeland
and TRAFFIC enabling these
organisations to combat human
and wildlife trafficking crimes.
Nuix is currently in discussion
with other not-for-profits as
to how Nuix may be able to
help solve problems that they
are facing.
Nuix matches staff donations
made to supported causes.
During the last financial year
donations have been made
to support those impacted by
the floods in the Philippines,
the explosion in Lebanon and
the COVID-19 crisis in India,
as well as global causes such
as Movember.
In addition, in FY21 Nuix
introduced one day volunteer
leave for all staff globally.
This enables all staff to dedicate
time to the causes that are
important to them and we
encourage our staff to share
their experiences with their
colleagues. Due to the
restrictions placed on many
of our jurisdictions as a result
of COVID-19, Nuix has been
providing our staff with ideas
as to how they can utilise their
volunteer day in a virtual
environment.
WE ARE COMMITTED
TO ACTING ETHICALLY
THROUGHOUT OUR
ORGANISATION
27
MANAGING
HUMAN RIGHTS
Nuix is fully committed to
preventing modern slavery and
human trafficking in its
operations and supply chains
across all jurisdictions in which it
operates. Nuix is also committed
to continuously improving its
processes and policies with
respect to the identification and
elimination of modern slavery.
The Modern Slavery Statement
for Nuix covering the 12 months
ending 30 June 2020 was
approved by the Board and
lodged with the Australian
government in March 2021.
This Statement outlines the
steps Nuix has taken to identify
and address the risks of modern
slavery to its business operations
and supply chain.
Nuix’s six corporate values
underpin its approach to social
issues including Modern Slavery
and Human Rights issues,
incorporating work in the
community via the Nuix
Foundation and our partnerships,
supply chains and employees.
We are committed to acting
ethically throughout our
organisation by complying
with all applicable legal
obligations and we take a
zero-tolerance approach to
any form of modern slavery.
Nuix has assessed the risk
of modern slavery within our
direct business operations
as low, given the level of control
we have within our operations
and our comprehensive labour
management. However, we
recognise that we may be
indirectly exposed to these risks
through our supply chain and
partner network.
We have not been made aware
of any allegations of human
trafficking/slavery activities
against any of our subsidiaries,
suppliers or partners. We have
identified the following
procurement categories that
may have a higher risk of
modern slavery:
• Facilities service providers
(i.e., cleaning services,
office maintenance, waste
management and security);
and
• Information and
Communication Technology
(ICT) infrastructure and
hardware.
Nuix is working with our
suppliers to ensure that we
have a thorough understanding
of their approach to the
management of modern slavery
and human rights issues.
28 Nuix Limited
Annual Report 2021
SOCIAL
RESPONSIBILITY (CONTINUED)
DATA SECURITY
AND PRIVACY
At Nuix, we understand that data
security and privacy are of the
highest importance to not only
our organisation, but most
importantly to our customers.
Nuix has implemented risk
management measures in
accordance with ISO/IEC
27001:2013 – Information
Technology – Security Techniques –
Information Security Risk
Management (Second Edition)
Standard. Such measures help
to mitigate risk, for example
relating to the Nuix-hosted cloud
environment, hosted within AWS
data centre(s). In this scenario,
although the customer has
full control over the document
data that is uploaded into
Nuix Discover SaaS, Nuix is
responsible for the security
and availability of the data.
Nuix has an IT Security and Risk
Committee which undertakes
monthly assessments of an IT
risk register.
Protecting customer data
Nuix prioritises the safety
and security of customer data.
Since 2019, Nuix has maintained
ISO 27001:2013 certification
and in 2020 was assessed to
host Australian Government
data classified as PROTECTED
under the Information Security
Registered Assessors Program
(iRAP) program (700 controls).
2021 will see Nuix continue with
its ISO program, not only
recertifying in ISO 27001:2013
(206 controls) but adding ISO/IEC
27017 (13 additional controls)
and ISO/IEC 27018 (28 additional
controls). Nuix has also been
assessed compliant against the
Australian Prudential Regulation
Authority (APRA) CPS234 cyber
resilience program.
Nuix operates the Discover SaaS
platform in six AWS regions with
a new region coming on-line in
December 2021, US Gov-Cloud.
Nuix’s customer data is
managed by over 947
independently verified controls.
Further to this, as Nuix works
towards Federal Risk and
Authorization Management
Program (FedRAMP) HIGH
assessment, an additional
421 controls will be added and
independently verified.
To achieve these certifications
and assurances, Nuix invests
heavily in many security and
monitoring tools to cover all
aspects of the environment.
Firstly, Nuix’s SaaS environment
that hosts customer data is
physically and logically separated
from Nuix’s corporate network.
Nuix utilises world-class
cybersecurity vendors such as
Palo Alto, Splunk, DUO, Carbon
Black, TrendMicro and Nuix to
protect and defend the
environment.
Nuix, and its authorised Cloud
Service Providers (CSP), offer
and use high-grade software
encryption to protect customer
data at rest and in transit,
including backups using industry
standard encryption techniques
and cryptographic resources.
Nuix applies a least privileged
access approach to managing
the SaaS environment. A team
of staff based in Sydney, Cork
and Virginia are responsible
for the 24x7x365 operational
management of the SaaS
platform.
29
WE UNDERSTAND
THAT DATA SECURITY
AND PRIVACY ARE
OF THE HIGHEST
IMPORTANCE
Protecting our
corporate network
Much like Nuix’s SaaS platform,
Nuix’s Corporate Network utilises
world class products to protect
and defend Nuix’s assets.
The entire network, firewall
configurations and Standard
Operating Environment (SOE)
have been independently
verified and tested by an
independent expert.
Vulnerability management
of the platform
Vulnerability management at
Nuix takes on three distinct
forms, code vulnerabilities,
SaaS infrastructure vulnerabilities
and corporate IT vulnerabilities.
Nuix utilises industry standard
code quality, dynamic
and static code analysis
platforms and follows common
vulnerability scoring system
(CVSS) for remediation.
SaaS Infrastructure is constantly
scanned using Tenable.IO to
detect vulnerabilities across
the infrastructure and allow for
real-time remediation. Nuix
performs monthly patching
across the SaaS platform
and will performs critical
patching as needed.
Nuix’s endpoints are all
connected and managed to a
central endpoint management
platform. Endpoints are patched
on a monthly basis or more
frequently depending on the
criticality of the patch. Each year,
an independent security specialist
conducts a threat hunt across
the environment and provides
remediation actions to Nuix IT
and CISO to implement. Nuix
conducts bi-annual penetration
testing of the SaaS and Corporate
IT environment.
Continuous monitoring
Nuix has a 24x7x365 Security
Operations Centre (SOC)
managed by an external host
based in the USA. Nuix has also
deployed application, network
and administrative monitoring
across the platform to ensure
that all administrative operations
are logged. Nuix SaaS provides
customers the ability to log the
actions of their own users and
run usage reports as needed.
Nuix is the only eDiscovery
software company to have
achieved iRAP PROTECTED
assessment from the Australian
Cyber Security Centre and offer
it directly to customers as a
SaaS platform.
INTELLECTUAL
PROPERTY REGULATION
Nuix is subject to laws and
regulations relating to intellectual
property in the jurisdictions in
which it operates. The primary
intellectual property assets of
Nuix are its patented processing
technology, copyrights and
trademarks. Nuix’s material
patents are currently all located
in the United States and Nuix
software is developed in Australia
and the United States.
In the United States, patent,
copyright, trademark and trade
secret rights contained in laws
and regulations govern the
ownership, prosecution,
maintenance, enforcement and
infringement of intellectual
property. Examples of such laws
and regulations are the Patent Act
of 1952, Copyright Act of 1976,
Digital Millennium Copyright Act
of 1998, Lanham Act of 1946,
Defend Trade Secrets Act of 2016
and other federal and state laws
and regulations.
30 Nuix Limited
Annual Report 2021
ESG Report
OUR
PEOPLE
RECRUITING AND MANAGING
A GLOBAL, DIVERSE AND
SKILLED WORKFORCE
Nuix is headquartered in Sydney,
Australia and had a total headcount
of 439 as at 30 June 2021 across North
America, EMEA and Asia Pacific. In
addition, there were a small number of
individuals that were engaged through
labour hire firms or contractors.
Nuix believes that it is important to
create the best possible work
environment for everyone and every
person, regardless of position, shares
in the responsibility for promoting a
positive work environment. Nuix’s
continued success is dependent upon
its ability to attract and retain skilled
and qualified employees.
31
WITH AN ESTABLISHED
GLOBAL FOOTPRINT,
NUIX HAS
56%
of its staff based
in North America
32%
based in
Asia Pacific
12%
based
in EMEA
AS At 30 June, nuIX HAD
STAFF LOCATED ACROSS
11 CountRIeS AnD poSt
30 June HAS eXpAnDeD
INTO TWO NEW COUNTRIES
43%
of our staff are
focussed on sales
and distribution
41%
are dedicated to Research and
Development, with the remaining
staff providing support to the business
GUIDED AND INSPIRED
BY OUR VALUES
As a growing global business,
values are extremely important
to underpin how we want to be
known and how we unite as a
global team. Nuix has six core
values – Customers, Innovation,
Teamwork, People, Integrity and
Passion. All these values support
our vision as a company to find
truth in a digital world.
It has been a challenging year
for Nuix and Nuix has invested
in ensuring that our staff
understand these values and they
are a key part of the culture of
Nuix. Nuix staff work hard and
care deeply about the quality of
the work they do. They show their
passion, purpose and skill and
care about our customers and
helping them to be successful.
Our people at Nuix are proud of
the work we get to do and are
collaborative and always willing
to work “shoulder to shoulder”
with each other and with our
customers to support projects.
Nuix has an employee recognition
program linked to the values
called Catch Me At My Best.
Throughout the year staff can
nominate individual colleagues
or teams for behaviours that
demonstrate the Nuix values.
On a quarterly basis, regional
winners are announced and at
the end of each year a global
winner is announced against
each of the values.
Nuix’s Code of Conduct outlines
the expectations that we have
of our staff and their behaviour
and underpinning this Code of
Conduct are the Nuix values.
Nuix is committed to behaving
with integrity, developing best-in-
class software, and providing
superior service which will be
achieved through its people.
Nuix is committed to instilling and
continually reinforcing a culture
across the organisation of acting
lawfully, ethically and responsibly.
On an annual basis all staff are
required to attest that they have
read the Code of Conduct and
understand the behaviours by
which they will be measured.
Nuix is committed to conducting
its business with integrity and in
accordance with Nuix’s corporate
values. Nuix has adopted a
revised Whistleblower Policy,
which applied upon listing on the
ASX, which encourages current
and former directors, employees,
consultants, contractors and
suppliers (as well as their
relatives, dependants or spouses)
to raise any concerns regarding
actual or suspected illegal or
unethical conduct or practices,
or violations of Nuix’s policies
on a confidential and, if desired,
anonymous basis. The Whistleblower
Policy outlines how Nuix will
protect such persons for raising
concerns and how reported
concerns are received and,
where appropriate, investigated
by Nuix. Nuix has a phone and
web-based reporting system
called the Nuix Whistleblower
hotline which enables all our
staff to confidentially report
any concerns that they may
face. This hotline is managed
by an independent third party
and is designed to enhance
communication and empower
our staff to promote safety,
security and ethical behaviour.
It is Nuix’s policy to conduct all
business in an honest and ethical
manner. Nuix’s Anti-Corruption
and Anti-Bribery Policy outlines
the company’s zero tolerance
approach to bribery and
corruption, as well as
implementing and enforcing
effective systems to counter
such actions. It also reinforces
Nuix’s commitment to acting
professionally, fairly and with
integrity in business dealings
and relationships.
32 Nuix Limited
Annual Report 2021
OUR PEOPLE
(CONTINUED)
Over one third of Nuix’s global
workforce participated in a
six-week team fitness challenge
which saw global teams form
to compete against one another
by encouraging all employees
to undertake 15 minutes of
exercise every day.
WORKING TO IMPROVE
DIVERSITY OF OUR
WORKFORCE
Nuix considers our people to
be our greatest asset and Nuix
has a commitment to increasing
the diversity of its employee base
over time, from both a gender
and ethnicity perspective.
The workforce is made up of
many individuals with diverse
skills, values, experiences,
backgrounds, and attributes.
Nuix values its strong and diverse
workforce and is committed
to supporting and further
developing this diversity through
attracting, recruiting, engaging,
developing, and retaining this
diverse talent. We believe that
our commitment to diversity
creates competitive advantage
and enhances our employee
participation.
Building awareness of inclusion
and the importance of creating an
inclusive environment is a critical
path to creating an environment
that enables diversity to flourish.
Nuix continues to educate our
teams around understanding
their biases and how they can
impact day to day decision
making unconsciously, as well
as providing tools and education
to ensure an inclusive work
environment.
Diversity initiatives
Nuix has several initiatives to
improve female representation,
which has been a challenge in
the IT software and technology
sector. Currently 26% of the
Nuix workforce is represented
by females. This has been at
a consistent level for the last
few years.
Nuix is committed to improving
diversity on many fronts and has
been working with our talent
acquisition partners to increase
the diversity of our workforce.
Women in Nuix is a group of
both female and male staff across
Nuix globally that are focused
on raising the awareness of
the importance of diversity.
This group has grown and
focuses on:
• Career development for one
another and other women in
our industry;
• Charitable work to help
lend a hand to women in
underprivileged situations; and
• Elevating the voices of women
in our industry (both at Nuix
and beyond).
33
As part of the Women in Nuix
efforts, a podcast was launched.
We have a panel of women that
serve as the rotating hosts of the
podcast. The content is delivered
in a series of interviews, where
customers and partners who
are breaking new ground or may
be advocating for the under-
represented are interviewed.
As well as interviewing women in
other industries who are taking
bold steps to achieve success in
previously inaccessible roles.
The group actively focuses on
ensuring that balance is achieved
between genders for external
events and promotions related to
Nuix, such as podcast, webinars,
white papers and conferences.
The group looks to support,
empower and elevate women
in Nuix through mentoring,
development, information sharing
and allowing women to take the
opportunity to give back through
volunteering and charity work.
34 Nuix Limited
Annual Report 2021
OUR PEOPLE
(CONTINUED)
OUR SUCCESS IS
UNDERPINNED
BY OUR PEOPLE
INVESTING IN
OUR PEOPLE
Nuix continues to be focused
on our people, their needs
and their development as our
success is underpinned by
our people. We take pride in
providing and creating ongoing
opportunities for our people
to grow and succeed.
Wellbeing
Nuix has put in place a wellbeing
program globally which has
enabled our staff to take the
time to focus on themselves and
their health and wellbeing and
their development. The program
includes an online information
portal enabling our people to
access a range of health and
wellbeing resources and
activities, fitness initiatives and a
range of sessions focused purely
on the interests of our people.
Over the course of the last year,
our employee social groups
have also driven their own
initiatives in each region to
increase connectedness with
various social interactions from
virtual lunches, Halloween
costume competitions to virtual
watercooler engagement.
Flexibility
Nuix believes that providing our
people with flexibility in the way
they work contributes to a more
inclusive work environment,
increases their engagement
and retention and increases
wellbeing all while delivering
business outcomes. This approach
to flexibility has continued
throughout COVID-19 and our
people have appreciated what
this has meant for them and their
ability to continue working in
rewarding roles, while balancing
their personal commitments
and responsibilities.
Learning and development
All of our people have the ability
to participate in professional
development with Nuix. This is
tailored to the role that the
individual undertakes.
Responding to Nuix’s multiple
regions and teams, Nuix’s
Learning and Development (L&D)
team developed a series of
onboarding and professional
development courses that
are offered via a Learning
Management System, the Nuix
Academy. Here employees can
undertake all of their compliance
and governance training as well
as product, sales and soft skills
courses like leadership, time
management, sales acumen and
other self-guided learning.
In addition, on annual basis, our
people undertake compliance
refresher courses which involves
training across all our employees
and reaccreditation of the
various compliance courses
that Nuix requires.
In the last financial year, a
significant number of Nuix staff
had access to the training that
Nuix provides our customers,
with 60 of our staff receiving
Nuix accreditations and 45 staff
becoming Nuix Masters.
This year, Nuix launched its first
people month, focusing on our
people and their development.
Over the course of May, courses,
sessions, and seminars were run
for staff in the various regions
to provide them with personal
development opportunities.
Sessions covered a range of
different topics from radical
candour, understanding yourself
and your motivation, driving
your own career and focusing
on your own development.
35
RESPONDING
to CoVID-19
COVID-19 required a significant
and rapid change to Nuix’s
business, people and customers.
The company responded to
changing government and
health authorities’ guidelines
to prioritise the safety of staff
and ensure no disruption
to customers.
Remote working and virtual
teams have become the new
normal for many of our people
as over 80% of our workforce has
worked remotely for the past year
with only our Sydney office having
reopened during the financial
year. For our Sydney office,
throughout the year we put in
place the appropriate measures
required at the time, following
local health and regulatory
authorities including physical
distancing, cleaning protocols,
and personal protective
equipment where required.
Our people have responded to the
changed working environment
with resilience and ingenuity,
while never losing the focus on
responding to our clients’ needs.
Various technologies and
strategies have been used
to ensure continued
connectedness with our
colleagues and our customers.
We saw our people pivot to
deliver virtual marketing events
and engagement with our
customers over the year,
providing virtual set up, support
and training for customers with
an increase in the number of
customers that achieved the
various Nuix accreditations.
We continue to engage with
our employees on not only their
wellbeing but also what they
will be focused on for a work
environment for the future,
so as to ensure as we evolve
our thinking on the future of
the work environment for Nuix,
we have created an environment
that meets the needs of our
employees and also ensures
that we continue to deliver
to our customers.
Nuix did not seek or receive any
government payments that
were provided to employers as
part of any COVID-19 package.
36 Nuix Limited
Annual Report 2021
ESG Report
GOVERNANCE AND
RISK MANAGEMENT
CURRENT CONTEXT
Our transition to becoming
a public company over the
last six months has surfaced
a number of challenges
relating to historical events,
specific individuals and
company governance.
Nuix acknowledges the
historical events that have
come to light recently in the
media and has responded to
these as relevant via Nuix’s
Investor Centre and ASX
Announcements.
Nuix is committed to the
highest standards of corporate
governance. The Company
has operated across multiple
jurisdictions over many years
and has a proud history of
working with regulators
exercising the highest standards
of probity. Nuix’s performance
and market position with
customers continues to be
strong and Nuix remains
confident of its long-term
prospects. The management
team remains firmly focused
on delivering its clear growth
strategy including expansion
into high growth target markets
and industry verticals and
value accretive mergers
and acquisitions.
We are listening to the feedback
from our shareholders and the
market. While Nuix cannot change
what has occurred, we can and
already have taken action to
strengthen our corporate
governance. Our new initiatives
are important building blocks
to continue to strengthen
corporate governance and
achieve our performance
objectives. We remain focused
on delivering for our customers,
maintaining a robust and vibrant
corporate culture and achieving
our potential. New controls
and initiatives we are
implementing are focused on
renewal, replenishment, and
strengthening, which will only
serve to make us more resilient
and provide fresh perspectives.
37
OUR APPROACH
TO GOVERNANCE
Nuix recognises that strong
governance and effective risk
management are key to the
success of an organisation.
Nuix has customers across all
aspects of law enforcement,
regulators, legal and corporates
globally and applies the highest
standards to the sensitive client
data that we host. As part of
Nuix’s transition from a privately
owned company to a listed entity,
Nuix established a risk function
to bring together the elements
of risk management that were
already being undertaken and
has been focused on building
out existing risk management
and governance frameworks and
policies. We are committed to
ensuring that a consistent and
long-term focused governance
and risk management approach
is embedded across all levels
at Nuix.
We are currently formalising our
Risk Management Framework
which will be based on best
industry practice and incorporate
policies designed to improve the
consistency in risk management
decision making and identify,
manage and mitigate identified
risks to the business. As part
of that process, Nuix has
strengthened cyber security
practices and continues to
do so as part of continuous
improvement. Nuix has
established corporate governance
practices which are formally
embodied in corporate
governance policies and codes
adopted by the Board. The aim
of the policies is to ensure that
Nuix is effectively directed and
managed, risks identified,
monitored and assessed, and
appropriate disclosures made.
Responsibility for governance
and risk management is shared
between the Board and senior
management. The Board reviews
and ratifies the Risk Management
Framework and provides
oversight of management’s
execution of it. The Board
monitors the adequacy of the
processes for managing risk,
including management’s
performance against the
framework and whether
management is operating with
due regard to the risk appetite
set by the Board, and whether
the Company is adequately
addressing financial and non-
financial risk and contemporary
and emerging risks such as
conduct risk, digital disruption,
cyber-security, privacy and data
breaches, sustainability and
climate change.
The Board is ultimately
responsible for the overall
governance, operation and
stewardship of the Company,
and in particular for protecting
and optimising the long-term
sustainable growth and
profitability of the Company.
Nuix’s Corporate Governance
Statement and investor website
provides full details of corporate
governance policies and charters.
38 Nuix Limited
Annual Report 2021
GOVERNANCE AND RISK
MANAGEMENT (CONTINUED)
We remain committed to
maintaining effective risk
management systems and
a risk culture that provides our
employees with opportunities
to grow.
OUR APPROACH TO
RISK MANAGEMENT
Overview
Risk recognition and management
are integral to our objectives of
creating and maintaining
shareholder value, and to the
successful execution of our
strategies. It aims to enable
the pursuit of opportunities
while achieving compliance with
applicable laws, regulations,
and contractual obligations.
Nuix has always had risk
management front of mind and in
transitioning from a privately
owned company to a listed
company, our risk management
framework (RMF) and processes
are continuing to be
strengthened. We remain
committed to maintaining
effective risk management
systems and a risk culture that
provides our employees with
opportunities to grow and
improve their risk management
capability that will support
consistent and appropriate
risk decisions.
Nuix has placed priority on
further developing the RMF to be
undertaken during FY22, as well
as operationalising the assessment
and management of risk. Works
are already underway and
significant progress has been
made since the second half of FY21.
Some of the achievements to
date include:
• Established a Risk function;
• Developed the Nuix RMF pillars
which act as a guardrail to help
drive a risk culture of
accountability and ownership.
We are working toward
developing and implementing
components from each pillar
but doing so in a considered
manner. Our evolving risk
management focus and
approach is appropriate for
a newly – listed company;
• Recent workshops held to
identify the inherent risk
profile of Nuix that provides:
– Greater clarity around our
risks, gaps and related
prioritisation;
– Increased accountability to
guide decision making.
Risk Management Framework
Nuix has a Risk Management
Framework (RMF) which
contributes to overall governance.
The defined elements of our
RMF outline our approach
to risk management, seek to
ensure a consistent approach
to managing risk exists within
the company and include formal
processes to update the Board
through the Audit and Risk
Management Committee.
The purpose of the RMF adopted
by the Board is to support the
Risk Management Policy which
ensures that:
• Appropriate systems are in
place to identify to the extent
reasonably practicable all
material risks that may impact
on the Company’s business;
• The financial and non-financial
impact of identified risks is
understood, and appropriate
internal control systems are
in place to limit the Company’s
exposure to such risks; and
• Appropriate responsibilities
are delegated to control the
identified risks effectively.
39
Monitoring &
Reporting
Training &
Awareness
Compliance
Management
Policies &
Procedures
NUIX RISK
MANAGEMENT
FRAMEWORK
Three Lines
of Defence
Risk
Management
Process
Risk
Management
Strategy
Risk
Appetite
Risk
Culture
Nuix has a great opportunity
ahead to ensure its RMF is more
formal, consistent, measured and
prioritised for the size and scale
of our company. Our RMF
represents the mechanisms
through which we deliver reliable
products and service to our
customers and retain the trust
of key stakeholders, we do this
by maximising opportunities
to achieve our objectives and
goals without exposing the
organisation to unnecessary risk.
Risk Culture
Risk Management Governance
Effective risk management is
dependent on a positive risk
culture so through the RMF,
employees are encouraged to
think about risk proactively, in
a consistent and disciplined way.
We recognise the importance
of having regular and varied risk
conversations that are open,
purposeful and held at all levels
of the organisation and of equal
importance is to hold ourselves
and others accountable to
closing actions against our
identified risks.
The Board is responsible for risk
oversight and the management
and internal control of the
processes by which risk is
considered for both ongoing
operations and prospective
actions. The Board has delegated
the risk management function
to Nuix’s management with
oversight by the Audit and Risk
Management Committee.
Management provides risk
reporting to the Audit and Risk
Committee on a quarterly basis.
40 Nuix Limited
Annual Report 2021
GOVERNANCE AND RISK
MANAGEMENT (CONTINUED)
Risk Management Process
Key Risks
Details of Nuix’s major risks
and associated mitigation
strategies are set out in Section
2.6 of the Director’s Report.
Details on Financial Risks
can be found in Section 7.1
of the Financial Report.
In relation to Contingencies
(Sheehy litigation, ASIC
investigation and Class
Action Risk), detail is
provided in Section 9.5
of the Financial Report.
A key component of our RMF is
the periodic assessment of key
risks and we have established
a continuous and dynamic
process through which risks are
identified, assessed, mitigated,
and monitored.
A risk profile was produced
following a series of workshops
which identified potential risks,
described the risks including
estimated impacts and likelihoods
of the risk occurring and
developed strategies to mitigate
or address the risks. Given the
broad range of risks Nuix
manages, the identified risks
were mapped to a stable set of
risk categories which include
Human Capital and Culture,
Cyber, Data Privacy and
Protection, Legal and Financial
and Treasury.
These risks are actively
managed and reported on as part
of Nuix’s RMF and this structured
approach provides a common
understanding and alignment of
the Nuix risk profile between
management and the Board.
41
Nuix Limited
and Controlled Entities
DIRECTORS’,
REMUNERATION AND
FINANCIAL REPORTS
FOR THE YEAR ENDED 30 JUNE 2021
A.C.N 80 117 140 235
ASX Code: NXL
Contents
42 Directors’ Report
91 Consolidated statement of cash flows
62 Auditor’s Independence Declaration
92 Notes to the consolidated financial statements
63 Remuneration Report
88 Financial Report
88 Consolidated statement
of comprehensive income
141 Directors’ Declaration
142 Independent Auditor’s Report
to the Members
151 Shareholder Information
89 Consolidated statement of financial position
154 Corporate Directory
90 Consolidated statement of changes in equity
42 Nuix Limited
Annual Report 2021
DIRECTORS’ REPORT
The Directors of Nuix Limited (Nuix) present their report for the consolidated entity comprising Nuix and its
controlled entities (collectively referred to as the Group) in respect of the financial year ended 30 June 2021.
1. DIRECTORS
The following persons were Directors of Nuix during the year and up to the date of this report:
Jeffrey Bleich
Daniel Phillips
Non‑Executive Director, appointed as Chairman on 18 November 2020
Non‑Executive Director, resigned as Chairman on 18 November 2020
Rodney Vawdrey
Executive Director and Group Chief Executive Officer
The following people were appointed Directors of Nuix on 18 November 2020, and remain in office as at the
date of this report:
Sir Iain Lobban
Susan Thomas
Non‑Executive Director
Non‑Executive Director
The following people were Directors of Nuix from the beginning of the year until their resignation on
18 November 2020:
David Standen
Non‑Executive Director
Roy Grady
Non‑Executive Director
Mark de Ambrosis
Non‑Executive Director
Anthony Castagna
Non‑Executive Director
2. OPERATING AND FINANCIAL REVIEW
The operating and financial review for the year ended 30 June 2021 has been designed to provide shareholders
with a clear and concise overview of the Group’s operations, financial position, business strategies and
prospects. The review also discusses the impact of key transactions and events that have taken place during
the reporting period, to allow shareholders to make an informed assessment of the results. Information that,
if disclosed could give rise to likely material detriment to Nuix, for example, information that is commercially
sensitive, confidential or could give a third party a commercial advantage has not been included.
The operating and financial review includes pro forma numbers for FY21 and the comparative period prepared
on the same basis as presented in the Prospectus dated 18 November 2020.
The pro forma adjustments for the year ended 30 June 2021 remove the impact of offer costs, non‑recurring
transaction costs related to a sale process explored by Nuix as an alternative to the offer, and share‑based
payment expenses in respect of existing options that were cancelled on completion. The pro forma
adjustments for FY21 also provide for a full year of listed company costs and the relevant tax impact of the
pro forma adjustments.
You should read the following commentary with the consolidated financial statements and the related notes
in the Financial Report. Some parts of this commentary include information regarding the plans and strategy
for the business and include forward‑looking statements that involve risks and uncertainties. Actual results
and the timing of certain events may differ materially from future results expressed or implied by the forward‑
looking statements contained in this commentary. All amounts are presented in Australian dollars to the
nearest thousand except where indicated.
Non‑GAAP measures have been included, as we believe they provide useful information for readers to assist in
understanding Nuix’s financial performance. Non‑GAAP financial measures should not be viewed in isolation
or considered as substitutes for measures reported in accordance with Australian equivalents to International
Financial Reporting Standards. These non‑GAAP financial measures have not been audited or reviewed in
accordance with Australian Auditing Standards.
43
2.1 Principal activities
The principal continuing activities of the Group are the development and distribution of software.
No significant change in the nature of these activities occurred during the year.
2.2 Significant changes in state of affairs
The Company completed an initial public offering (‘IPO’ or the ‘Offer’) of its shares, whereby 51,904,161 new
shares were issued by the Company and 127,574,983 shares were offered by existing shareholders at an offer
price of $5.31 per share.
The Company was admitted to the Official List of ASX Limited on 4 December 2020.
In relation to the Offer, the Company performed the following transactions:
• Issued 51,904,161 new shares at $5.31 each;
• Cancelled 38,961,508 existing options to acquire shares of the Company;
• Incurred $45,409,000 of costs related to the offer, $1,014,000 related to listing fees and $2,637,000 related
to the sale process explored by Nuix as an alternative to the offer; and
• Granted options and performance rights as detailed in the Prospectus.
There were no other significant changes to the state of affairs of the Group during the year.
2.3 Business strategies
Nuix is a leading provider of investigative analytics and intelligence software with a vision of “finding truth
in a digital world”. Nuix’s mission is to create innovative software that empowers organisations to simply and
quickly find the truth from any data in a digital world. Nuix software has been used in investigations into some
headline events over the last 15 years, including the Panama Papers, the Royal Commission into Misconduct
in the Banking, Superannuation and Financial Service Industry in Australia, organised crime rings, corporate
scandals and terrorist activities.
Nuix offers a software platform (Nuix platform) comprising a powerful, proprietary, data processing engine
(Nuix Engine) and several software applications. It has been developed in‑house, shaped by feedback from
long‑standing government and private sector customers over the past 15 years, and assists customers in
solving many of their complex data challenges. The Nuix platform operates at a “forensic level”, providing
users with a highly detailed, contextualised and legally defensible way of viewing and interacting with their
data. In simple terms, Nuix’s Engine processes data fed into it by the customer, which is then available for use
by the customer through one or more of Nuix’s applications or directly through its Application Programming
Interfaces (APIs) and connectors.
The market for investigative analytics and intelligence software includes the markets for eDiscovery software,
digital forensics software, governance risk and compliance (GRC) software and endpoint security software.
Currently, Nuix’s core markets are the eDiscovery software market and the digital forensics software
market. Whilst these are not the only markets which Nuix serves today, they are the most relevant in terms of
contribution to current revenue generation by Nuix. Both markets are global in nature. Nuix also operates in
several other markets within the broader investigative analytics and intelligence software market, being the
GRC software market and the endpoint security software market. These markets are a key part of the broader
and strategic growth plan for Nuix and represent markets in which the Company is looking to expand its
presence going forward.
Nuix’s growth strategy seeks to expand its presence across geographies and in targeted industry verticals by
winning new customers, employing an industry‑centric “land and expand” strategy across industry verticals,
continued investment in functionality of the Nuix platform, and improvements in overall operating efficiency
and extracting potential benefits of increased scale. In addition, Nuix believes that growth can be accelerated
by focusing on building a network of strategic partners to provide complementary delivery and market
expansion capabilities, as well as through a considered approach to value accretive mergers and acquisitions.
44 Nuix Limited
Annual Report 2021
DIRECTORS’ REPORT (CoNtiNuEd)
2.4 Group performance
Statutory revenue rose to $176,068,000 up 0.1% on a functional currency basis, and 7.4% on a constant
currency basis1. New business contributed $27,638,000 to revenue, with subscription‑based revenue rising
to 93% of the total revenue.
Nuix contracted 100 new customers over the course of the year. Average new order value rose to $240,000,
driven by higher value wins through a focus on enterprise sales. Customers displayed a continued willingness
to enter into multi‑year deals, with these contracts rising to 36.3% of revenue for the full year.
In North America, corporate and law firms were areas of strength, with 27 new customers signed. Our
US Government (USG) team secured several significant contract wins with governmental agencies in the
latter part of the year, building momentum into FY22.
Our EMEA business achieved important new customers wins during the year, with demand from Corporates
particularly strong. In Germany we signed 27 new SaaS customers in the first year, and employees have been
onboarded for our Southern European expansion.
Growth in Asia Pacific was driven by key logo wins across a range of industries and included a break‑through
corporate deal in Japan. In Australia, Discover SaaS data under management tripled.
As flagged during the second half, trading conditions affected upsell opportunities, particularly in the United
States. In addition, the trend towards consumption‑based licences impacted the timing of revenue recognition.
Although this transition weighs on customer upsell in the short‑term, the shift to consumption licences,
including SaaS, allows Nuix to benefit more fully from growth in data volumes over time.
Table 1: Financial Highlights
Revenue
Cost of goods sold
Gross profit
Operating expenses
EBITDA
EBIT
NPAT2
NPAt result
FY21
$000
STATUTORY
FY21
$000
PRO FORMA
FY20
$000
PRO FORMA
VARIANCE
PRO FORMA
176,068
176,068
175,859
(18,851)
(18,851)
(20,686)
157,217
157,217
155,173
(126,697)
(90,168)
(99,711)
30,520
(553)
(1,406)
67,049
35,976
25,239
55,462
27,057
18,767
209
1,835
2,044
9,543
11,587
8,919
6,471
Statutory loss after tax was $1,406,000, as against the pro forma result being a profit after tax of $25,239,000.
The pro forma adjustments for FY21 are reconciled back to the statutory result in Table 2 below.
1 Constant currency metrics have been calculated using the below methodology:
• Constant currency rates are calculated by dividing the total FY2020 consolidated AUD revenue associated with a currency by the total FY2020
transaction currency revenue of the same currency, providing a weighted average exchange rate based on statutory revenue transaction in FY2020.
This is then checked against the average daily rate provided by the RBA for appropriateness.
• This modified rate is then applied at a transaction level across FY2021 revenue to ensure that all metrics (region, domain, profit and loss department,
etc) are re-weighted appropriately.
• Where there is a cost transaction in a currency where there have been no revenue transactions, the average RBA rate for FY2020 is used.
• Exchange rates used for constant currency calculations were: USD 1.4975; EUR 1.6505; GBP 1.8832 and CAD 1.0931.
2 Table 2 reconciles statutory and pro forma NPAT for FY21 and prior comparative period.
45
FY20
$000
23,587
(7,160)
–
341
–
(65)
2,064
18,767
FY21
$000
(1,406)
(2,980)
2,637
–
33,291
3,581
(9,884)
25,239
Table 2: Pro forma adjustments to statutory results and comparable prior period
Statutory net (loss)/profit after tax
Incremental public company costs3
Corporate actions4
Net finance costs5
Offer costs6
Share‑based payment expense7
Tax impact8
Pro forma net profit after tax
EBitdA result
Nuix’s pro forma EBITDA result of $67,049,000, up 20.9% per cent against the FY20 pro forma result, reflects
consistent gross margins, with reduced total operating costs.
Table 3: EBITDA result
Revenue
Cost of goods sold
Gross profit
Gross margin %
Sales and distribution
Research and development
General and administrative
EBITDA
FY21
$000
STATUTORY
FY21
$000
PRO FORMA
FY20
$000
PRO FORMA
VARIANCE
$000
PRO FORMA
176,068
176,068
175,859
(18,851)
(18,851)
(20,686)
157,217
157,217
155,173
89.3%
(49,784)
(10,775)
(66,138)
30,520
89.3%
(49,106)
(10,042)
(31,020)
67,049
88.2%
(60,725)
(8,179)
(30,807)
55,462
209
1,835
2,044
1.1%
11,619
(1,863)
(213)
11,587
3 Reflects incremental public company costs: Nuix’s estimate of the incremental annual costs that Nuix will incur as a result of being a listed company.
These costs include director’s fees, ASX listing fees, share registry costs, audit and legal fees, directors’ and officers’ insurance premiums, investor relations
costs, annual general meetings costs, annual report costs and other public company costs. The adjustment for the year ended 30 June 2021 reflect the
inclusion of estimated costs on a pro rata basis for five months, being such a period before Nuix was a listed company.
4 Removes non-recurring transaction costs arising from corporate actions: specifically the costs of a sale process explored by Nuix as an alternative to the
offer in FY21.
5 Removes net finance costs: as the offer proceeds have not been used to pay down existing debt facilities during the period, no adjustment has been made
vis a vie finance costs.
6 Removes one-off offer costs: total transaction fees related to the offer were $45,409,000 of which $13,132,000 (before tax) is directly attributable to the
issue of new shares by Nuix, and has been recognised directly in equity. The remaining $32,277,000 (before tax) relates to the sale of shares by the selling
shareholders and is treated as an expense (within General and Administration). In addition to the costs related to the offer are the costs related with the
listing fees of $1,014,000, which are also included in this pro forma adjustment.
7 Removes share-based payment expense: these adjustments remove share-based payment expenses in respect of existing options that were cancelled
on completion.
8 Tax impact of the above adjustments: these adjustments reflect the net tax impact of the pro forma adjustments at the relevant tax rates on the
deductible amounts.
46 Nuix Limited
Annual Report 2021
DIRECTORS’ REPORT (CoNtiNuEd)
Revenue
Revenue for the financial year was $176,068,000, up 0.1% on the FY20 pro forma result.
New business growth was underpinned by higher average new order values and a material lift in the
proportion of multi‑year deals. Weaker net upsell detracted from the revenue outcome. Upsell was impacted
by delays associated with US Government purchasing decisions, along with a more challenging operating
climate in the US, partly due to the pandemic and broader economic uncertainty.
Traditional module‑style licenses drove the bulk of statutory revenue. Consumption licenses continued to
grow, with perpetual licenses and services falling year on year. The transition of customers to consumption
licenses impacted revenue during the year, weighing on revenue growth in the short‑term.
On a regional basis, the revenue fall in the US business was offset by rises in EMEA and APAC. Industry mix
remains well diversified, with only small proportional changes year on year by industry group.
Software revenue metrics
Software companies like Nuix operate on many of the same performance metrics as traditional companies,
such as revenue and cash flow. However, understanding the performance of software companies and being
able to benchmark them is assisted by an understanding of specific non‑GAAP metrics. The primary software
revenue metric we use is Annualised Contract Value.
Annualised Contract Value (‘ACV’)
Annualised Contract Value (ACV) at 30 June 2021 was $165,590,000, down 1.7% compared to 30 June 2020.
Subscription ACV grew year on year as a result of new business won and the transition from perpetual to
consumption licenses. “Other ACV”, comprised of both short‑term (less than 12 months) and perpetual
licenses, and services ACV fell on the year. Negative net upsell also detracted from the ACV outcome.
Churn was lower than the previous year.
On a regional basis USA ACV fell year on year, more than offsetting the increase in ACV from EMEA and APAC.
The composition of ACV amongst subscription and other ACV streams is illustrated below:
Annualised Contract Value (ACV)
168
28
166
19
175
20
141
147
155
146
24
122
200
150
100
106
24
50
82
0
FY18
FY19
FY20
FY21
FY21 Constant
Currency
Subscription ACV
Other ACV
47
Definition and basis of preparation
ACV is an adjusted, non‑IFRS measure and does not represent Total Revenue in accordance with Australian
Accounting Standards Board (AASBs) or Nuix’s accounting policies or cash receipts from customers.
ACV is used by Nuix to assess the total contract value of its software contracts on an annualised basis by
removing fluctuations from multi‑year deals contracts reflected in Nuix’s revenue, as a result of statutory
revenue recognition requirements.
The calculation of ACV at the end of the relevant financial period adjusts Total Revenue to account for:
A) Revenue generated from Subscription licenses with a term of 12 months or more, as well as Consumption
licenses which exist at the end of the relevant financial period as if those contracts’ revenues were generated
(and recognised) in each financial year on a straight‑line basis over the relevant contract period, expressed
on an annualised basis; B) last 12‑month contribution from short‑term Software licenses (including Perpetual
licenses) or other Software licenses with a term of less than 12 months, excluding Consumption licenses; and
C) the last 12‑month contribution of services and third party software sales.
Other ACV reflects the last 12‑month contribution of Perpetual license sales, services and third‑party
software and short‑term Software licenses, or licenses with a term of less than 12 months but excluding
Consumption licenses.
operating costs
Operating costs fell year on year, with a significant foreign exchange impact lowering costs, along with lower
headcount over the full year in some areas. Cost of Goods Sold was impacted by some favourable third party
agreement outcomes, despite continued spend on SaaS instances to support the cloud strategy. Sales and
Distribution costs were lower on foreign exchange movements and lower headcount, along with reduced
marketing and travel costs due to the pandemic. Research and development expenses rose year on year,
due to a lower capitalisation rate. General and Administrative expenses were relatively flat year on year on
a pro forma basis.
Total spend on Research and Development for the financial year was $45,022,000 (2020: $50,911,00).
Foreign exchange changes accounted for most of the fall in spend. As a proportion of overall revenue,
Research and Development spend fell to 25.6% of revenue compared to 28.9% the prior year. The proportion
of Research and Development capitalised fell to 76.1% from 83.7% a year earlier.
Net finance costs
Table 4: Net finance costs
FY21
$000
STATUTORY
FY21
$000
PRO FORMA
FY20
$000
PRO FORMA
VARIANCE
PRO FORMA
Net finance expense9
3,407
3,407
1,519
1,888
Net finance expenses have increased $1,888,000 on both a pro‑forma and statutory basis, due to an increase
in realised and unrealised foreign exchange losses of $1,764,000, offset by lower interest costs of $124,000.
9 Net finance expense includes other gains and losses which relate to net realised and unrealised foreign exchange losses.
48 Nuix Limited
Annual Report 2021
DIRECTORS’ REPORT (CoNtiNuEd)
Nuix’s cash flow generation capability
Table 5: Summary cash flow information
FY21
$000
STATUTORY
FY20
$000
STATUTORY
VARIANCE
STATUTORY
FY21
$000
PRO FORMA
FY20
$000
PRO FORMA
VARIANCE
PRO FORMA
EBITDA
30,520
62,681
(32,161)
67,049
55,462
11,587
Add back non‑cash items
4,627
5,032
(405)
1,046
5,097
(4,051)
EBITDA ex non‑cash items
35,147
67,713
(32,566)
68,095
60,559
7,536
Change in working capital
(24,151)10
(8,736)
(15,415)
(24,151)
(6,928)
(17,223)
Cash taxes
(195)
(419)
224
(195)
(419)
224
Operating cash flow
10,801
58,558
(47,757)
43,749
53,212
(9,463)
CAPEX – Property and
equipment
(1,051)
(1,355)
304
(1,051)
(1,355)
CAPEX – Intangibles
(34,256)
(43,476)
Investing cash flow
(35,307)
(44,831)
9,220
9,524
(34,256)
(43,476)
(35,307)
(44,831)
304
9,220
9,524
Free cash flow
(24,506)
13,727
(38,233)
8,442
8,381
61
Issued capital
Capitalised offer costs
Cancellation of options
275,661
(13,132)
(175,614)
–
–
–
Lease payments
(3,739)
(2,812)
Transaction costs on loans
–
(151)
275,661
(13,132)
(175,614)
(927)
151
Loan payments
(25,071)
–
(25,071)
–
–
–
–
–
–
–
–
–
(3,739)
(2,812)
(927)
–
–
(1,595)
1,595
–
Financing cash flow
58,105
(2,963)
61,068
(3,739)
(4,407)
Net cash flows
33,599
10,764
22,835
4,703
3,974
–
668
729
Cash flows
The movement in cash during the year included a number of one‑off amounts associated with the offer,
ASX listing and potential trade sale as well as the associated cash proceeds from share issuance and option
cancellation payments.
Operating cash flows continue to be positive on both a statutory and pro forma basis.
Capital management
Nuix listed on the Australian Securities Exchange in December after an oversubscribed IPO which raised
$275,611,000 through the issue of 51,904,161 new shares at $5.31 each. Proceeds from the IPO have been
used to fund option cancellation payments totalling $175,614,000 during the year.
10 Change in working capital in FY21 primarily relates to an increase in unbilled revenue of $19,728,000.
49
FY20
$000
10,764
(7,154)
–
364
–
–
–
–
3,974
FY21
$000
33,599
(2,980)
2,637
–
46,423
(275,661)
175,614
25,071
4,703
Table 6: Reconciliation of statutory to pro forma
Statutory net cash flow
Incremental public company costs11
Corporate actions12
Net finance costs13
Offer costs14
Offer proceeds15
Cancellation of options16
Loan payments
Pro forma net cash flow
Nuix’s level of debt
Nuix Limited currently has a Facility Agreement with the Commonwealth Bank of Australia (‘CBA’) which
provides funding to the Company through a Cash Advance Facility. Funding under the Cash Advance Facility is
made available under two tranches, being Tranche A for AUD $40 million, and Tranche B for USD $7.5 million.
Accordingly, the available funding under the facilities as denominated in Australian dollars fluctuates from
period to period, with $50,000,000 being available under these facilities as of 30 June 2021 (2020: $50,943,000).
The Company had fully paid all of these facilities as of 30 June 2021 (2020 utilisation: $25,531,000) and has
not drawn down any additional funding since 30 June 2021 (2020: drawdown $5,697,000 ($4,000,000 USD)).
For the abundance of caution the Company sought (and CBA agreed to) waivers of potential technical or
administrative breaches of the Facility Agreement which may have been subsisting as at 30 June 2021
(including a waiver, until 20 November 2021), of any breaches which may have arisen as a result of the ASIC
investigation previously disclosed to the market. This waiver was entered into post the end of the financial
year. The Company had fully paid all of those facilities as of 30 June 2021 and has not drawn down any
additional funding since 30 June 2021.
The Facility Agreement also provides for a bank guarantee facility and CBA has issued a bank guarantee
under that facility in an amount of $746,460 to support Nuix Limited’s obligations under a real property
lease. Nuix Limited’s obligations in respect of that bank guarantee are contingent only.
Nuix Limited continues to review its various financing options and requirements, which may include
restructuring or refinancing its existing facilities, entering into new financing arrangements with a third
party and/or cancelling facilities entirely.
11 Reflects incremental public company costs: Nuix’s estimate of the incremental annual costs that Nuix will incur as a result of being a listed company.
These costs include directors’ fees, ASX listing fees, share registry costs, audit and legal fees, directors’ and officers’ insurance premiums, investor relations
costs, annual general meetings costs, annual report costs and other public company costs. The adjustment for FY21 reflects the inclusion of estimated costs
on a pro rata basis for five months, being such period before Nuix was a listed company.
12 Removes non-recurring transaction costs arising from corporate actions: specifically the costs of a sale process explored by Nuix as an alternative to the
offer in FY21.
13 Removes net finance costs: as the offer proceeds have not been used to pay down existing debt facilities during the period, no adjustment has been made
vis-à-vie finance costs.
14 Removes one off offer costs: total transaction fees paid during the period related to the offer were $45,409,000 of which $13,132,000 is directly attributable
to the issue of new shares by Nuix, and has been recognised as part of financing activities. The remaining $33,291,000 relates to the sale of shares by the
selling shareholders and listing costs which are treated as an operating cash flow. In addition to the costs related to the offer are the costs related with the
listing fees of $1,014,000, which are also included in this pro forma adjustment.
15 Reflects the gross proceeds raised from the issuance of new shares under the offer.
16 Reflects the payment of $175,614,000 to option holders in respect of existing options that were cancelled on completion of the offer.
50 Nuix Limited
Annual Report 2021
DIRECTORS’ REPORT (CoNtiNuEd)
2.5 Group financial position
The Group remains committed to maintaining a balance sheet that positions Nuix to achieve its business
strategies. Net cash was $70,865,000 (30 June 2020: $38,539,000).
Nuix’s balance sheet
Table 7: Summary balance sheet
Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Property and equipment
Intangibles
Other non‑current assets
Deferred tax assets and lease assets
Total assets
Liabilities
Trade and other payables
Deferred tax and lease liabilities
Deferred revenue
Provisions
Borrowings
Total liabilities
Equity
Issued capital
Reserves
Retained earnings
Total equity/net assets
30 JUN 2021
$000
30 JUN 2020
$000
70,865
63,767
6,209
2,018
38,539
51,218
1,897
2,412
197,415
197,155
9,474
14,261
8,986
13,371
364,009
313,578
20,325
13,829
45,360
3,420
–
21,031
20,577
47,791
3,171
25,531
82,934
118,101
370,696
104,227
(174,322)
84,701
5,143
86,107
281,075
195,477
Cash and cash equivalents have increased $32,326,000 primarily as a result of the impact of the IPO. Cash net
of borrowings is $70,865,000. Other current assets have increased $4,310,000 primarily as a result of the
impact of prepaid insurance costs incurred towards the end of the reporting period.
Deferred revenue has decreased compared to the opening balance sheet, primarily as a result of the timing of
revenue recognition on a significant agreement which was deferred as of the previous balance date, offset by
amounts deferred in the current period.
51
Issued capital has increased $266,469,000 as a result of the issuance of new equity totalling $275,661,000
offset by the portion of offer costs recognised directly in equity of $13,132,000 ($9,192,000 net of related
tax effect).
Reserves decreased $179,465,000 as a result of the movement in the foreign currency translation reserve of
$8,478,000 and the impact of cancelling options due to option holders of $175,040,000, net of the impact of
equity settled share‑based payment expenses of $4,053,000. In addition to the equity settled share‑based
payment expenses recognised against the share‑based payment reserve, a further amount of $574,000 has
been recognised in profit and loss associated with the service period share‑based payments which were
modified from equity settled to cash settled. The movement in the foreign currency translation reserve arises
from translating the opening net assets of US based operations using a higher closing foreign exchange rate
of 1 AUD to 0.75 USD as at 30 June 2021, compared to 1 AUD to 0.69 USD at 30 June 2020.
2.6 Risk Management
The Group takes a structured approach to identifying, evaluating and managing those risks which have the
potential to affect achievement of strategic objectives.
The Group deals with a variety of business risks that could affect our business activities, financial position or
operating and financial performance and these are actively assessed and managed as part of the Group’s risk
management framework.
To support a broad view of risk, and to seek out best practice standards appropriate to the size and risk profile
of Nuix, we continue our investment across a range of areas enabling us to grow, support and protect our
environment and our customers through:
• Embedding our Risk Management Framework – the formal establishment of the risk function and the
appointment of our Head of Risk in 2021 has allowed us to consider, record and report on our risk profile
in an aggregated, consistent and structured way.
• Use of independent experts – the Group seeks external input for independent review and benchmarking
purposes across our technology and cyber posture, data privacy protections and risk
management practices.
• Investing in our people and internal expertise – individuals with expertise and dedicated focus are sought
to supplement our resourcing and focus on areas such as data privacy, investor relations, product
and engineering.
• Purchase of tools and software to support and protect – just as threats evolve, so too must our suite of
tools to prevent and detect threats. We work with a range of trusted third parties and constantly reassess
that we have the right mix of people, processes, systems and tools to remain secure.
Details of the Group’s major risks and associated mitigation strategies are set out below. The mitigation
strategies are designed and continue to evolve to reduce the likelihood of the risk occurring and/or to
minimise the adverse consequences of the risk should it happen. However, some risks are affected by
factors external to, and beyond the control of, the Group.
Details on Financial Risks can be found in Section 7.1. In relation to Contingencies (Sheehy Litigation,
ASIC Investigation and Class Action Risk), detail is provided in section 9.5.
The Group’s operations are not significantly impacted by environmental regulations under a law of the
Commonwealth or of a state or any other territories of Australia or territory in which it operates, however,
in recognition of its importance, climate change risk is addressed separately in the Group’s ESG report that
is to be included with the Group’s annual report.
In addition to addressing climate change, the ESG report will provide further detail on Nuix’s approach
to Risk Management and the associated Risk Management Framework. Nuix is committed to maintaining
high standards of risk management and building a culture that prioritises, values and embeds the Risk
Management Framework to address both financial and non‑financial risks in order to benefit our employees,
customers and shareholders.
52 Nuix Limited
Annual Report 2021
DIRECTORS’ REPORT (CoNtiNuEd)
Risk Description
Mitigation, Monitoring and Investment strategy
Human Capital and Culture
• Investing in the future growth of the business by recruiting key
The risk of not being able to meet
strategic and growth objectives
or customer expectations due
to an inability to have sufficient,
appropriate and highly engaged
staff with clear understanding of
roles and responsibilities.
Corporate Strategy Alignment
The risk of failing to invest
sufficiently in evolving a robust
corporate strategy that drives
growth. The risk that we are not
aligned to a common goal so do not
prioritise or resource appropriately
in support of achieving it.
individuals that will enable different product lines to
be developed;
• In a tight candidate market, evolving our employee value
proposition and diversifying the sources and locations of finding
key staff by partnering with a range of different organisations
that can assist us in providing us with talent;
• Investing in programs, processes and systems to ensure
knowledge and skills are maintained within the company by
cross‑training and promoting existing employees into new
opportunities to enable them to leverage their
previous experience;
• Deepening our understanding of market remuneration and
offering remuneration that is appropriate and competitive to
support, motivate and retain our people and ensuring that our
benefits packages are comparable in each of the jurisdictions in
which we operate;
• Running a global wellness program for all staff to opt into
participating in, to enable an increased engagement with our
people on their wellbeing; and
• Enabling all staff to continue to work remotely throughout the
COVID‑19 pandemic, while providing support through a range
of different tools and initiatives such as regular communication,
opportunities to connect and remote learning.
• Creating a mechanism to monitor effectiveness of strategy
through related corporate goals and measures; and
• Maintaining a network of corporate development market contacts
to ensure early awareness of significant market events.
Customer Attraction and Retention
• Continued innovation in functionality to drive benefits for
The risk of failing to deliver on
our customers’ expectations in
the services, support and product
development offered.
our customers;
• Continuing to build strong and effective relationships with
our customers and partners;
• On‑premise customers: providing quarterly releases for all
our products along with minor patch versions;
• Providing fortnightly releases for our managed environments;
• Providing a training program for customers and partners to
ensure they can obtain the best results from Nuix’s products
and services;
• Evolving the mechanisms our customers can use to engage
with us throughout the life cycle of our engagement;
53
Risk Description
Mitigation, Monitoring and Investment strategy
Customer Attraction
and Retention (continued)
• Using objective data to pair with anecdotal customer feedback
to improve the customer experience;
The risk of failing to deliver on
our customers’ expectations in
the services, support and product
development offered.
• For customers in certain high‑risk jurisdictions, Nuix engages in
a heightened review and approvals process. This is done when
Nuix is presented with a sales opportunity (direct or indirect) with
an end‑user in countries that may pose a high risk to Nuix for
international sanctions, human rights abuse, IP theft and other
corporate social responsibility concerns. Nuix limits the type and
terms of the software provided to high‑risk countries; and
• For all customers, Nuix requires representations to the effect
that the customer is legally entitled to enter into the agreement in
question, and is not breaching any laws applicable to their entity
or business by doing so.
data Privacy and Protection
Failure to adequately safeguard
Nuix or customer data resulting in
a breach of privileged, confidential
or proprietary information.
• Layered approach to protecting customer data that includes
least privileged access and extensive monitoring and auditing
of Nuix’s SaaS platform;
• ISO 27001: 2013 certified and are working towards ISO 27017
and 27018;
• iRAP (Information Security Registered Assessors Program)
assessed to host Australian Government data classified
as protected;
• Australian Prudential Regulation Authority (APRA) CPS234
Cyber Security assessed to host prudential data in progress;
• USA Federal Risk and Authorization Management Program
(FedRAMP) readiness in‑progress;
• Twice yearly penetration testing of all SaaS and Corporate
IT networks;
• Regular red team, blue team threat simulation and remediation;
• Implementing a Microsoft 365 data loss prevention (DLP) capability;
• Independent review of data privacy framework and
controls underway;
• Appointment of a Data Privacy Officer with recruiting
underway; and
• Monitoring of data privacy laws in relevant jurisdictions.
Cyber
The risk of external threats,
cybersecurity incidents occurring
and that measures taken to
protect our IT systems may prove
inadequate, particularly in the
context of our SaaS model.
• Investing in highly skilled cyber security and technical employees
who focus on identifying and responding to existing and
emerging threats;
• Employee awareness activities to continually promote cyber
security awareness;
• Physical and logical separation of environments and duties
across Nuix SaaS and Corporate IT;
54 Nuix Limited
Annual Report 2021
DIRECTORS’ REPORT (CoNtiNuEd)
Risk Description
Cyber (continued)
The risk of external threats,
cybersecurity incidents occurring
and that measures taken to
protect our IT systems may prove
inadequate, particularly in the
context of our SaaS model.
Product development
Failure to continue to develop our
products may result in our products
not remaining competitive or being
at the forefront of innovation in
meeting our customers’ needs.
Agile delivery of software changes
and upgrades may introduce errors
or defects. These may remain
undetected and compromise the
integrity of our products and
services, adversely impacting
our customers.
Compliance with laws, regulations
and certifications
There is a risk that we do not
comply with the broad range of
international laws, regulations,
and certification obligations which
require continual evaluation to
ensure compliance. We seek to
uplift our control practices in
support of certifications such
as FedRAMP.
Mitigation, Monitoring and Investment strategy
• Monitoring of critical systems for signs of performance, intrusion,
or interruption;
• Digital Forensics Incident Response (DFIR) retainer with reputable
third‑party consulting group;
• Contracted consulting groups as Nuix’s Cyber Security advisories
and assessors;
• 24×7 Security Operation Centre (SOC); and
• Investing in market‑leading third‑party tools to protect and
monitor the SaaS and Corporate IT environments.
• Product roadmap to develop applications or provide software
solutions that satisfy current and future customer requirements;
• Investing in highly skilled engineers and product
development employees;
• Proactively monitoring market, industry and competitor
intelligence to identify strategic opportunities; and
• Continued investment in tools to verify the integrity and known
vulnerabilities of code prior to release.
• Policies, supported by staff training, on key legal and regulatory
obligations and expected practices;
• Dedicated legal function involved in onboarding of all new
customers, partners, transactions and contracts assessed
against legal and compliance obligations;
• Dedicated team supporting responses to customer questionnaires
and continual auditing against certification control standards;
• Annual Independent certification audits to validate efficacy
of processes and controls;
• Engaging with external corporate law firms on issues requiring
subject matter expertise as required, or otherwise to provide
resourcing and compliance support in order to provide legal
advice and assistance;
• Regular Board of Director meetings to ensure compliance
with ASX obligations; and
• Extensive policy framework to ensure compliance with
ASX obligations.
55
Risk Description
Mitigation, Monitoring and Investment strategy
Legal
• Standardising contractual Terms and Conditions;
The risk that we do not have
valid, executed contracts in place,
or that we inadvertently breach a
contract as we do not understand
and track commitments, bespoke
arrangements and indemnities
provided to customers.
• Implementation of a Contract Management System continues;
• Contractual safeguards (e.g. NDAs) are required prior to any
proprietary disclosures;
• Engaging with external counsel to develop an IP strategy to
ensure the maximum and most efficient mechanisms for legal
protection are, and continue to be, pursued with respect to
Nuix’s IP rights;
• Nuix standard terms limit liability; and
• Implementing a benchmark of our standard contract terms
and negotiating positions and corresponding insurance coverage/
potential areas of exposure to assess our coverage against
industry standards.
taxation
• Engaging with local professional services firms for tax
The risk that we are not meeting
our tax obligations globally.
compliance advice;
• Review of returns by International Tax Counsel;
• Consultation with a professional services firm on the formulation
of a Tax Risk Management Framework;
Financial and treasury
• Undertaking end‑to‑end process reviews for financial reporting
The risk that our financial
statements are incorrect,
inaccurate, untimely, or not
well understood by the market.
This includes the risk that our
current procedures for revenue
recognition are not appropriate
due to the level of complexity and
judgement required. This may
lead to poor quality information
for strategic decision making.
processes and controls;
• Early engagement and consultation with external auditors/
professional firms on significant deals and key accounting policies;
• Given the balanced, global nature of operations and foreign‑
exchange flows, this helps us manage our foreign exchange
risks on a net basis; and
• Refer to Section 7.1 on how Nuix manages its financial risks
(foreign exchange, credit and liquidity risks).
technology Platform
Maintenance and Support
• Using a third‑party vendor for the incident, customer support
and change management; and
The risk that our systems
are not fit for purpose or
unavailable. Impact to Nuix of
critical service outages due to
staff not following process and
making unauthorised changes
to production environments.
• Nuix SaaS has been architected for high‑availability and
resilience utilising third‑party high‑availability infrastructure
and S3 for backup.
56 Nuix Limited
Annual Report 2021
DIRECTORS’ REPORT (CoNtiNuEd)
Risk Description
Mitigation, Monitoring and Investment strategy
Business Resilience
• Monitoring of critical systems for signs of performance, intrusion
The risk that we are not resilient
to global economic, pandemic or
other incidents and do not have
the appropriate processes and
procedures in place to effectively
maintain our current operational
capacity, including timely
notification to customers
of disruptions.
third Parties
The risk of not selecting,
maintaining and managing strong
relationships with appropriate
sales partners and third‑party
software on which Nuix relies.
or interruption;
• Proactive communication to engage customer groups through
Nuix’s IT Service Management platform and SaaS Status Page; and
• Business continuity planning continues to be enhanced.
• Due diligence undertaken which for partners, comprises both
an internal and external third‑party risk questionnaire, for which
responses and a business case are required from both the internal
stakeholder and proposed partner. These responses are assessed
by the Legal Team prior to the engagement or negotiation of
such relationship;
• Due diligence undertaken which for third‑party software, Nuix
engages in a collaborative process using internal stakeholders
and external advisers to ascertain the reliability and reputation
of the proposed third‑party arrangements. Assessments of
multiple providers are conducted prior to final selection;
• Screening new leads, contacts and opportunities against
the US Consolidated Screening List and other international
economic sanctions and export screening lists which contributes
to increasing our understanding of the manner in which our
software is used;
• Assessment against Modern Slavery Act requirements; and
• A dedicated Partner management team and framework includes
a partner portal, training, quarterly business reviews and a
Partner Advisory Council.
Governance
The risk that we fail to put in place
or apply good governance over
our processes to support effective
management decision making.
Also, that we fall short of market
expectations around Environmental,
Social and Corporate Governance
(ESG) practices and behaviours.
• A number of policies are in place that support the overall
governance of the company;
• Strategic, operational and emerging risks and mitigations
identified and managed as part of the Risk
Management Framework;
• Formation of the Nuix Foundation dedicated to enriching
communities and organisations it services; and
• Closely monitoring business performance metrics.
57
3. ENVIRONMENTAL REGULATION
The Group’s operations are not significantly impacted by environmental regulations under a law of the
Commonwealth or of a state or any other territories of Australia or territory in which it operates.
4. DIVIDENDS PAID OR RECOMMENDED
The payment of dividends by the Company is at the complete discretion of the Directors, and the Directors
do not provide any assurance of the future level of dividends paid by the Company.
The ability to pay dividends will depend on a number of factors, many of which are beyond the control of
the Company. In determining whether to declare future dividends, the Directors will have regard to Nuix’s
earnings, cash flows after development costs, overall financial condition and capital requirements, taxation
considerations (including the level of franking credits available), the general business environment, and any
other factors that the Directors may consider to be relevant.
There were no dividends paid or declared since the start of the financial year and up to the date of this report.
5. EVENTS SINCE THE END OF THE FINANCIAL YEAR
As previously disclosed to the market (most recently on 2 September 2021), ASIC is conducting an investigation
in relation to potential contraventions of the Corporations Act concerning Nuix. Nuix understands that ASIC’s
investigations relevantly concern: 1) the financial statements of Nuix Limited for the period ending 30 June 2018,
30 June 2019 and 30 June 2020; 2) Nuix’s prospectus dated 18 November 2020; and 3) Nuix’s market disclosure
in the period between the period 4 December 2020 to 31 May 2021. Nuix remains confident that it has complied
with its accounting and disclosure obligations. Nuix has not received any indication of what (if any) action ASIC
may take following the conclusion of any investigation.
As noted in Section 2.4 of this report, for the abundance of caution Nuix has obtained waivers from CBA of
potential technical or administrative breaches of the CBA Facility Agreement (which was initially entered into
in 2014), including a waiver until 20 November 2021, of any breaches which may have arisen as a result of the
ASIC investigation. This waiver was entered into post the end of the financial year. The Company had fully paid
all of these facilities as of 30 June 2021 and has not drawn down any additional funding since 30 June 2021.
Nuix Limited continues to review its various financing options and requirements, which may include restructuring
or refinancing its existing facilities, entering into new financing arrangements with a third party and/or
cancelling facilities entirely.
On 13 September 2021, the Group announced that it has entered into an agreement to acquire all the shares
in Topos Labs, Inc. (Topos) a developer of Natural Language Processing (NLP) software that helps computer
systems better understand text and spoken words at speed and scale. The initial cost of the acquisition is USD
$5 million on financial close, with the potential for a further USD $20 million comprised of USD $18.5m cash
payable to the sellers of the shares in Topos, and up to USD $1.5 million in performance rights payable over
30 months.
The performance rights are granted to certain Topos team members who join Nuix and continue to provide
services to Nuix during the period between closing and at the time of conversion of the performance rights.
The additional cash consideration is only payable, and the performance rights will only convert into ordinary
shares, on achievement of revenue, staff retention and product development milestones, each of which relate
directly to the further development of the Artificial Intelligence driven NLP platform and its successful integration
into the Nuix environment.
58 Nuix Limited
Annual Report 2021
DIRECTORS’ REPORT (CoNtiNuEd)
6. INFORMATION ON DIRECTORS
The details of the Company’s Directors in office at the date of this report are set out below
.
Jeffrey Bleich
Jeffrey has been a Non‑Executive Director of Nuix since 2017 and was appointed as
Chairman of the Company in November 2020. Jeffrey lives in Piedmont, California, U.S.A.
Jeffrey has over 30 years’ experience in the legal, government, and technology sectors,
and most recently served as a Court‑Appointed Special Master and Mediator in the
United States District Court, before being named the Chief Legal Officer of Cruise LLC,
a San Francisco‑based autonomous vehicle company. After clerking for the Chief Justice
of the United States Supreme Court, Jeffrey practised law as a Partner at Munger, Tolles
& Olson LLP from 1992 to 2009 and 2014 to 2016, and as both CEO of Dentons Diplomatic
Solutions and a Partner in the Public Policy and Regulatory practice of Dentons international
law firm from 2016 to 2019. Jeffrey’s practice focused on cyber security, technology, complex
international disputes, as well as high profile pro bono matters before the U.S. Supreme Court.
Jeffrey served four years as the U.S. Ambassador to Australia from 2009 to 2013 and as special
counsel to President Obama in 2009. He has served as Board Chair of the San Francisco
based Pacific Gas & Electric Company, Chair of the Fulbright Foreign Scholarship Board,
Chair of the California State University Board of Trustees, President of the State Bar of
California, and as a Director of a number of charitable and public policy organisations
including the Australian‑American Leadership Dialogue, RAND Australia, Stanford University’s
Centre for Advanced Study in the Behavioural Sciences, Amherst College, the American
Security Project, and Futures Without Violence.
Jeffrey holds a Bachelor of Political Science from Amherst College, a Master in Public Policy
from Harvard University and Juris Doctor from the University of California Berkeley. He has also
received an honorary Doctorate of Laws from San Francisco State University and honorary
Doctorates from Griffith University and Flinders University.
daniel Phillips
Dan has been a Director of Nuix since 2011 and acted as Chairman between 2018 and
November 2020 and is currently Chair of the Remuneration and Nomination Committee.
Dan lives in Sydney, Australia.
Dan has more than 25 years’ experience providing venture capital to high growth
companies in Australia, Asia, Europe and the United States. Dan is currently an employee
of the Macquarie Group, having joined Macquarie Group in January 1989 and founded
Macquarie Group’s technology venture capital investment business in 1996.
Dan has served on boards of the ASX listed entities oOh!media Group Ltd and IBA Health.
Dan is currently a Director of several companies, including NextPayments Pty Ltd, RedEye
Apps Pty Ltd, RecordPoint Software Holdings Pty Ltd, FoodByUs Pty Ltd and Australian
Philanthropic Services. Dan also served as a member of the Australian Federal Government’s
ICT Advisory Board.
Dan is a member of Chartered Accountants Australia and New Zealand.
59
Rodney Vawdrey
Rod joined Nuix as Chief Operating Officer in July 2015 and was appointed Chief Executive
Officer of Nuix in May 2017, and an Executive Director in September 2017. Rod lives in
Sydney, Australia.
Rod oversees Nuix’s business activities globally which encompasses sales, customer support,
training and technical services, engineering and development, product, marketing, finance,
IT partners, corporate development and strategy and human resources – with all Senior
Leadership Team members reporting directly to Rod.
Rod was previously Corporate Executive Vice President and President of Fujitsu Limited
between 2011 and 2014, and from 2003 to 2011 was Chief Executive Officer of Fujitsu ANZ.
Rod is currently a Director of Qualitas Services who provide consulting services. Rod is also
a member of the Australian Institute of Company Directors.
Sir iain Lobban
Iain has been an adviser to the Board since October 2018 and was appointed as a
Non‑Executive Director of the Company in November 2020. Iain lives in the United Kingdom.
Iain has over 30 years’ experience in the security and intelligence sector, including having
served as the Director of the British Intelligence Agency GCHQ from 2008 to 2014. Iain was
one of the five experts appointed by Australia’s Prime Minister to create Australia’s first
National Cyber Security Strategy in 2015. He was subsequently one of the senior
three‑person team appointed by the Prime Minister to conduct the 2017 Independent
Review of the Australian Intelligence Community.
Iain is currently a Director of Prevalent AI, a company specialising in security data science
software and solutions, of C5 Holdings, an investment company specialising in cyber
security, data analytics and cloud, and of Enveil, a pioneering Privacy Enhancing Technology
company. His advisory work for boards spans cyber security risk management and financial
crime compliance.
Iain holds a Bachelor of Arts in French with German from the University of Leeds.
Iain is a Visiting Professor of King’s College London and an Honorary Fellow of the Judge
Business School at the University of Cambridge. Iain was appointed a Companion of the
Bath in 2006 and Knight Commander of St Michael and St George in 2013.
Susan thomas
Sue has been a Non‑Executive Director of the Company since November 2020,
and is Chair of the Audit and Risk Management Committee.
Sue has over 30 years’ experience in the financial services and information technology
sectors, having founded and acted as Managing Director of FlexiPlan Australia Limited,
which was subsequently sold to MLC/NAB. Sue lives in Perth, Australia.
Sue is currently a Director of ASX listed companies Temple and Webster Group Limited and
Fitzroy River Corporation Limited, and a former Director of ASX listed Alexium International
Group Limited. Sue was formerly a Director of BT Funds Board, Property Exchange Australia
Limited and Grant Thornton Australia Limited.
Sue holds a Bachelor of Law and Bachelor of Commerce from the University of New South
Wales and has received a diploma from the Australian Institute of Company Directors.
60 Nuix Limited
Annual Report 2021
DIRECTORS’ REPORT (CoNtiNuEd)
7. DIRECTORS’ INTERESTS IN SECURITIES
At the date of this report, the Directors had the following relevant interests in the securities of the Company:
NAME
Jeffrey Bleich
Daniel Phillips
Rod Vawdrey
Sir Iain Lobban
Susan Thomas
ORDINARY
SHARES
35,000
Nil
1,680,509
Nil
18,833
OPTIONS
240,000
Nil
169,891
250,000
Nil
8. MEETINGS OF DIRECTORS
The numbers of meetings of the Company’s Board of Directors held during the fiscal year ended 30 June 2021,
and the numbers of meetings attended by each director were:
FULL BOARD
REMUNERATION AND
NOMINATIONS COMMITTEE
AUDIT AND RISK
MANAGEMENT COMMITTEE
HELD17
ATTENDED
HELD
ATTENDED
HELD
ATTENDED
Jeffrey Bleich
Iain Lobban
Sue Thomas
Dan Phillips
Rod Vawdrey
David Standen
Roy Grady
Mark de Ambrosis
Anthony Castagna
15
8
8
15
15
8
8
8
8
15
7
8
15
15
8
8
8
7
2
2
2
1
2
2
4
4
7
3
4
4
7
3
9. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Directors and Officers of Nuix are indemnified against liabilities pursuant to agreements with the
Company. The Company insure the Directors and Officers of the company and its Australian‑based controlled
entities, and the general managers of each of the divisions of the Group. The liabilities insured are legal costs
that may be incurred in defending civil or criminal proceedings that may be brought against the Directors and
Officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities
incurred by them in connection with such proceedings. This does not include such liabilities that arise from
conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position
or of information to gain advantage for themselves or someone else or to cause detriment to the company.
It is not possible to apportion the premium between amounts relating to the insurance against legal costs
and those relating to other liabilities.
17 Number of meetings held during the time the director held office or was a member of the committee during the year.
61
During FY2021, the Company paid a premium under a contract insuring each of certain Directors and Officers
of the Group against liability incurred in that capacity. Disclosure of the nature of the liability and the amount
of the premium is prohibited by the confidentiality clause of the contract of insurance.
10. INDEMNIFYING OF AUDITORS
Nuix has agreed to indemnify its auditors, PricewaterhouseCoopers, to the extent permitted by law, against
any claim by a third party arising from Nuix’s breach of their agreement. The indemnity stipulates that Nuix
will meet the full amount of any such liabilities including a reasonable amount of legal costs.
11. AUDITOR
PricewaterhouseCoopers continues in office in accordance with section 327B of the Corporations Act 2001.
12. AUDIT AND NON‑AUDIT SERVICES
Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers Australia) for audit and
non‑audit services during the year are disclosed in Note 9.3.
The Company may decide to employ the auditor on assignments additional to its statutory audit duties
where the auditor’s expertise and experience with the Company and/or the Group are important.
The Board of Directors, in accordance with advice provided by the audit committee, is satisfied that the
provision of the non‑audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non‑audit services by
the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
• all non‑audit services have been reviewed by the audit committee to ensure they do not impact the
impartiality and objectivity of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
13. ROUNDING OF AMOUNTS
Nuix is a company of the kind referred to in Australian Securities Investments Commission’s ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument 2016/191. In accordance with that Instrument, all
financial information presented has been rounded to the nearest thousand dollars, unless otherwise stated.
14. AUDITOR’S INDEPENDENCE DECLARATION
The Directors have received the Lead Auditor’s Independence Declaration under section 307C of the
Corporations Act 2001. The Lead Auditor’s Independence Declaration is set out on page 62 and forms part
of the Directors’ Report for the year ended 30 June 2021.
This report is signed in accordance with a resolution of the Board of Directors.
SIGNED
Jeffrey Bleich
Chairman
Sydney, Australia
30 September 2021
62 Nuix Limited
Annual Report 2021
AUDITOR’S INDEPENDENCE DECLARATION
Nuix Limited and Controlled Entities
Auditor’s Independence Declaration
As lead auditor for the audit of Nuix Limited for the year ended 30 June 2021, I declare that to the best
of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
Scott Walsh
Partner
PricewaterhouseCoopers
Sydney
30 September 2021
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
REMUNERATION REPORT
63
Dear Shareholders
On behalf of the Board, I am pleased to present the Remuneration Report for Nuix Limited (Nuix or the Group)
for the year ended 30 June 2021 (FY21), our inaugural Report as a listed Group.
FY21 – A YEAR IN OVERVIEW
A landmark year for Nuix
FY21 was a significant year in Nuix’s history with the Group listing on the Australian Securities Exchange
on 4 December 2020. This was a remarkable achievement for our Group and our people.
Resilience in a challenging environment
As the world continued to evolve, the behaviours of our customers and their preferences evolved.
We have seen a larger than expected number of existing customers make the transition from module‑based
subscription licenses to consumption and SaaS model licenses, which has had an impact on both revenue
and Annualised Contract Value (ACV) profiles.
While the transition to consumption licenses, including SaaS deployments, has had a near‑term negative
impact on statutory revenue generation, it does not diminish Nuix’s longer‑term growth prospects which
remain strong, with increases in new customers and retention of existing customers. In particular, Nuix has
added 100 new customers in this financial year and the total order value and average order value from these
new customers was higher than the prior year.
As a result, Nuix delivered a revenue result below what was indicated in our IPO prospectus but an EBITDA
above what was forecast.
Our people
At Nuix, we know that our people and our technology are our greatest assets, and the Group is on a journey
of renewing its key leaders to manage the business on the next phase of its journey.
The Board was pleased to announce the appointment of Chad Barton during FY21 as the Group’s Interim Chief
Financial Officer (CFO) (while a global search is undertaken for a permanent CFO following the departure of
Stephen Doyle in late June). Mr Barton is a highly regarded executive with significant experience in managing
large complex finance operations across a range of industries.
As previously disclosed, Nuix’s Chief Executive Officer (CEO) and Executive Director Rod Vawdrey gave notice
in June 2021 of his decision to retire from the Group. Rod will continue in his role while an international search
is conducted for a new CEO to lead Nuix on the next phase of its journey.
For all of FY21, the majority of our staff have worked from home and we have maintained our strong focus
on the wellbeing of our people. We are proud of the ways in which our staff have remained connected and
continued to collaborate to deliver on behalf of Nuix, and the resilience, ingenuity and responsiveness of our
staff, is a testament to the quality of our team. Despite the challenges presented by the pandemic, we have
managed to continue to sign new customers, maintain a high level of delivery and support to all of our
customers, and continue to evolve our product.
64 Nuix Limited
Annual Report 2021
REMUNERATION REPORT (CoNtiNuEd)
EXECUTIVE REMUNERATION AT NUIX
An overview of our post‑listing framework for our Executive Key Management Personnel (KMP) is outlined in
section 3. There have been no changes made to the executive remuneration framework that was put in place
as part of the IPO in December 2020.
At Nuix, our remuneration framework is designed to ensure that our Executives maintain a deliberate and
continued focus on delivering strong financial performance and creating value for our shareholders, as well
as encouraging long‑term sustainable decision‑making in the interests of all of our shareholders, customers
and other key stakeholders
In particular, the remuneration packages are heavily weighted to the performance‑tested long‑term incentive
(LTI) (representing almost half of Executive KMP’s target pay mix). The LTI is also delivered in options, which
have an “in‑built” share price condition in the form of an exercise price. That is, the Nuix LTI awards will only
deliver value to Executive KMP where the share price increases, as the market price at the time of exercise will
need to exceed the exercise price (in addition to performance hurdles being met).
LINKING FY21 REMUNERATION OUTCOMES TO PERFORMANCE
At Nuix, we are focused on ensuring our remuneration arrangements and outcomes for our Executive KMP are
closely aligned with our performance and the experience of our shareholders, and also meet the expectations
of our stakeholders.
While our FY21 performance outcomes were solid and our Executive KMP worked hard to deliver the listing
of Nuix, we do acknowledge the experience of our shareholders and that we did not achieve our forecast
revenue. This has been reflected in executive remuneration outcomes for FY21.
Although STI and LTIs were paid to the CEO and former CFO for the period up until the listing of Nuix, for the
period following the listing of Nuix:
• the Board exercised its discretion to reduce STI awards to nil for the CEO and the outgoing CFO, despite
partial vesting against the EBITDA component (30%). There was no vesting against the revenue component
(70%); and
• there were no LTI awards eligible to be tested and vest this year.
Refer section 4 for further detail on remuneration outcomes for FY21.
CONCLUSION
The Board will continue to monitor Nuix’s executive remuneration framework to ensure that it provides the
right balance between attracting, motivating and retaining our executives to deliver on our strategy for our
shareholders and our customers, while meeting the expectations of the Group’s external stakeholders.
I invite you to read Nuix’s Remuneration Report and welcome your feedback on our remuneration practices
and disclosures.
Daniel Phillips
Chair of Remuneration and Nomination Committee
65
1. WHO IS COVERED BY THIS REPORT?
This Report outlines the remuneration arrangements in place for KMP of the Group in FY21, which comprise
all Non‑Executive Directors and senior executives who have authority and responsibility for planning, directing
and controlling the activities of the Group. The FY21 KMP are set out in the table below.
As noted above, Nuix’s CEO and Executive Director Rod Vawdrey gave notice of his decision to retire from the
Group on 15 June 2021 and will continue in his role while an international search is conducted for a new CEO.
Mr. Doyle ceased as Executive KMP on 21 June 2021 and Chad Barton was appointed as Interim CFO
(effective from that date). While Mr. Doyle retained no operational duties, he was available to assist with the
orderly handover of his responsibilities before concluding his employment with the Group on 30 June 2021.
Further detail in respect of the treatment of Mr. Doyle’s incentive arrangement is outlined in Section 4.6 below.
Table 1: Overview of FY21 KMP
KMP
CURRENT POSITION
TERM AS KMP
Executive KMP
Rod Vawdrey
Group CEO and Executive Director
Full year (i.e. from 1 July 2020)
Stephen Doyle (former)
Former CFO
Ceased as KMP on 21 June 2021
Chad Barton
Jonathan Rees
Interim CFO
Executive Vice President,
International
Effective on 21 June 2021
Effective on 15 June 2021
Ethan Treese
Executive Vice President, Americas
Effective on 15 June 2021
Non‑Executive Directors
Jeffrey Bleich
Independent Chairman
Full year (i.e. from 1 July 2020)18
Sir Iain Lobban
Independent Non‑executive Director
Partial year from 18 November 2020
Daniel Phillips
Sue Thomas
Non‑executive Director
Full year (i.e. from 1 July 2020)
Independent Non‑executive Director
Partial year from 18 November 2020
Anthony Castagna (former)
Former Non‑executive Director
Ceased as KMP on 18 November 2020
Roy Grady (former)
Former Independent
Non‑executive Director
Ceased as KMP on 18 November 2020
David Standen (former)
Former Non‑executive Director
Ceased as KMP on 18 November 2020
Mark De Ambrosis (former)
Former Non‑executive Director
Ceased as KMP on 18 November 2020
18 Mr Bleich was an Independent Non-executive Director of the Company from 1 July 2020 and was appointed as Chairman of the Board on 18 November 2020.
66 Nuix Limited
Annual Report 2021
REMUNERATION REPORT (CoNtiNuEd)
2. OUR VALUE PROPOSITION
At Nuix, we strive to foster a customer‑collaborative and innovative culture, and a talented team of employees
who are motivated to build software with a purpose and assist our customers to contribute to a wider public
and social good.
We recognise that remuneration is only one of a number of reasons why our people come to work for us
every day and our broader value proposition (beyond remuneration) is key to our ability to attract, retain
and motivate world class talent to deliver on our vision of “finding truth in a digital world”.
We value our people and seek to provide a supportive and inclusive workplace that delivers high employee
engagement and satisfaction, and encourages everyone to be the best they can be. We have a high‑
performing culture (which is founded on trust) to support our future aspirations.
It is our fundamental belief that the behaviour and performance of all employees should be aligned with
our values (see section 3 below) and expectations to drive business performance and meet the expectations
of our stakeholders and the community.
Diagram 1. Our value proposition
INNOVATION
•
Innovation is critical
to our competitive
advantage
• We are focussed
on fostering an
innovative culture
and unleashing our
“collective genius”
CUSTOMER
FOCUSED
• At Nuix, we are truly
customer centric
• We exist to assist
and add value to
our customers lives
and contribute to
a wider public and
social good
DEVELOPING
OUR LEADERS
• At Nuix, we are
focussed on building
a high-performing
team, where our
teams come to
work to be the
best they can be
• We invest in our
leaders through
training, coaching
and tool-kits
ONE TEAM
• Our customer-
collaborative culture is
critical to our success
• Working together is
how we succeed
DIVERSITY
• We value diversity
and our individual
differences
• When we think about
diversity, we think
beyond gender
• Our workforce is
diverse in many
ways and we embrace
our differences
INCLUSION
• We recognise the
importance of creating
a truly inclusive
environment
• We encourage our
people to speak up
and share their ideas
CUSTOMER
FOCUSED
Deliver and
delight
DEVELOPING
OUR LEADERS
Unmatched
talent
INNOVATION
Unleash our
collective genius
NUIX
FINDING TRUTH
IN A DIGITAL
WOLD
INCLUSION
We listen to
our people
ONE TEAM
Stronger
together
DIVERSITY
We value our
differences
67
3. FY21 – EXECUTIVE KMP REMUNERATION AT A GLANCE
At Nuix our executive remuneration framework is set in line with our key remuneration principles which
are designed to encourage behaviour aligned with our core values and support our strategic priorities in
the interests of our shareholders.
OUR VALUES
Aligning with our core values and expected behaviours
INTEGRITY
INNOVATION
TEAMWORK
CUSTOMERS
Authentic and
Accountable
Unleash
collective genius
Stronger
together
Focus, Deliver,
Delight
PEOPLE
Respect,
Encourage,
Reward
PASSION
Committed to
the mission
STRATEGIC PRIORITIES
Our vision of finding truth in the digital world
WIN NEW
CUSTOMERS
Expand market
share and win
new customers
LAND AND
EXPAND
Expand across
key industry
verticals
INVEST TO
EXTEND THE
PLATFORM
Create new
products
OPERATING
EFFICIENCY
PARTNER
CONSIDERATION
Extract benefits
of scale
Build a network
of strategic
partners
VALUE
ACCRETIVE
M&A
Creating
synergy
REMUNERATION PRINCIPLES
Supporting our business objectives
SIMPLICITY
Simple and
easy to
understand
ACTING LIKE
OWNERS
Shareholder
and customer
alignment
STRATEGY
LED
Rewarding for
delivery on our
strategic priorities
PERFORM &
INNOVATE
Encouraging the
best from
our people
RIGHT
BEHAVIOURS
Encouraging
behaviours aligned
with our values
68 Nuix Limited
Annual Report 2021
REMUNERATION REPORT (CoNtiNuEd)
OUR FRAMEWORK
Our remuneration framework aligns with our values and strategy
TOTAL FIXED
REMUNERATION (TFR)
SHORT‑TERM
INCENTIVE (STI)1
LONG‑TERM
INCENTIVE (LTI)
• Base salary and superannuation
(or other equivalent pension
arrangements)
• TFR is reviewed annually having
regard to the individual’s role,
responsibilities, skills, experience
and performance, as well as
fixed remuneration levels
offered to comparable roles
within companies with which the
Company competes for talent
• Performance period of 1 year
• Assessed against revenue (70%) and
EBITDA (30%), being the key metrics
used by the market to assess the
Company’s performance post IPO
• Delivered in cash (2/3) and share
rights (1/3) deferred for 12 months.
STI deferral, in the form of share
rights, creates further alignment
with shareholder interests and
acts as a retention instrument
• As part of its overarching discretion,
the Board has the ability to make
downward adjustments for any
behaviour that is inconsistent with
the Company’s culture and values
(as well as any risk, regulatory or
reputational issues)
• STI provides motivation for
the achievement of annual
performance goals
• Delivered in options
• Performance tested against
revenue (50%) and EBITDA (50%)
after 3 years. The FY21 LTI is
tested at the end of 30 June 2023
given the IPO occurred part way
through FY21
• Options become progressively
exercisable (at the end of the
3 year performance period) in
thirds (being at vesting and
after a further 1 and 2 years)
• LTI drives the delivery of
Nuix’s longer term objectives
in a sustainable manner
• Options have an in‑built
incentive to increase the
share price, better aligning the
executives to the shareholder
experience and encouraging
long‑term value creation
1
The Executive Vice President, International and Executive Vice President, Americas are assessed against their respective
portfolios and not Company wide and their STI is delivered in cash.
KMP PAY MIX
Pay mix for performance
• The pay mix for the CEO and former CFO at target and maximum is outlined below. The pay mix is heavily
weighted towards the LTI to encourage a focus on long‑term sustainable decision making in the interests of
Nuix’s shareholders and other stakeholders.
Target
Max
48%
33%
24%
28%
25%
42%
Fixed STI LTI
• The Group’s Interim CFO was not eligible for an STI or LTI for FY21 due to the interim nature of his
employment contract.
• The Executive Vice President, International and Executive Vice President, Americas were determined to be
KMP towards the end of the financial year on 15 June 2021 and their remuneration arrangements are consistent
with other senior non‑KMP staff, split between fixed annual remuneration, STI and LTI.
69
4. FY21 EXECUTIVE REMUNERATION OUTCOMES – IN DETAIL
4.1 Overview of Group performance
As noted above, it is important to Nuix that the remuneration outcomes for our Executive KMP align with
the Group’s performance. An overview of Nuix’s FY21 performance is set out in table 2 below.
Statutory revenue rose to $176,068,000 up 0.1% on a functional currency basis, and 7.4% on a constant
currency basis. New business contributed $27,638,000 to revenue, with subscription‑based revenue rising
to 93% of the total revenue.
Nuix contracted 100 (2020: 103) new customers over the course of the year. Average new order value rose to
$240,000 (2020: $145,000), driven by higher value wins through a focus on enterprise sales. Customers displayed
a continued willingness to enter into multi‑year deals, with these contracts rising to 36.3% (2020: 25.4%) of
revenue for the full year.
In North America, corporate and law firms were areas of strength, with 27 new customers signed. Our US
Government (USG) team secured several significant contract wins with governmental agencies in the latter
part of the year, building momentum into FY22.
Our EMEA business achieved important new customers wins during the year, with demand from Corporates
particularly strong. In Germany we signed 27 new SaaS customers in the first year, and employees have been
onboarded for our Southern European expansion.
Growth in Asia Pacific was driven by key logo wins across a range of industries and included a break‑through
corporate deal in Japan. In Australia, Discover SaaS data under management tripled.
As flagged during the second half, trading conditions affected upsell opportunities, particularly in the United
States. In addition, the trend towards consumption‑based licences impacted the timing of revenue recognition.
Although this transition weighs on customer upsell in the short‑term, the shift to consumption licences,
including SaaS, allows Nuix to benefit more fully from growth in data volumes over time.
Annualised Contract Value (ACV) at 30 June 2021 was $165,590,000, down 1.7% compared to 30 June 2020.
Subscription ACV grew year on year as a result of new business won and the transition from perpetual to
consumption licenses. “Other ACV”, comprised of both short‑term (less than 12 months) and perpetual
licenses, and services ACV fell on the year. Churn was lower than the previous year.
On a regional basis USA ACV fell year on year, more than offsetting the increase in ACV from EMEA and APAC.
Table 2. FY21 Group performance
A$M (UNLESS OTHERWISE STATED)
Annualised contract value (ACV)
Revenue
EBITDA
Net profit/(loss) after tax (NPAT)
4.2 Total fixed remuneration (TFR)
FY21
165.6
176.1
30.5
(1.4)
Table 3 below sets out the annualised TFR payable to the Executive KMP in FY21 based on their contractual
values. Executive KMP TFR levels were set as part of the IPO process having regard to benchmarking data
in respect of companies of a comparable size to Nuix’s expected market capitalisation (as well as peers in the
technology sector).
70 Nuix Limited
Annual Report 2021
REMUNERATION REPORT (CoNtiNuEd)
Table 3. Executive KMP fixed remuneration levels
EXECUTIVE KMP
Rod Vawdrey
Stephen Doyle (former CFO)
Chad Barton19
Jonathan Rees
Ethan Treese
4.3 FY21 short‑term incentive outcomes
A. overview
TOTAL FIXED
REMUNERATION
(ANNUALISED) $
721,694
455,000
801,694
478,400
438,900
As noted above, Executive KMP participate in an STI program. The maximum STI awards that Executive KMP
were eligible to receive in respect of FY21 are set out in Table 4 below. The Interim CFO was not eligible for
an STI award in FY21 due to the interim nature of the employment contract. The Executive Vice President,
International and Executive Vice President, Americas were not KMP for the full year, and their STI was
calculated under the staff remuneration policy, with the portion related to service during the time they
were KMP during FY21 presented in the table below.
As outlined in Table 4 below, for the period from 4 December 2020 to 30 June 2021, post Nuix’s listing, the
Board exercised its discretion to reduce STI outcomes to nil for the CEO and outgoing CFO for FY21, despite
partial vesting against the EBITDA component being achieved. Revenue threshold levels of performance
were not met.
Table 4. Executive KMP STI outcomes
STI OUTCOMES (FY21)
MAXIMUM STI
OPPORTUNITY
($)
MAXIMUM STI
OPPORTUNITY
(% TFR)
VALUE OF STI
AWARDED
% OF FY21 STI
AWARDED
% OF FY21 STI
AWARD
FORFEITED
EXECUTIVE KMP
Rod Vawdrey
541,271
Stephen Doyle (former CFO)
341,250
Chad Barton
Jonathan Rees21
Ethan Treese21
N/A
12,855
12,024
75%
75%
N/A
65%
67%
156,08920
74,70020
N/A
13,797
9,836
29%
22%
N/A
107%
82%
71%
78%
N/A
0%
18%
B. FY21 Sti – assessment of performance measures
An overview of performance against the FY21 STI measures is set out below.
19 The fixed annual remuneration for the Interim CFO reflects that the Interim CFO is not eligible for STI or LTI due to the fixed term nature of the employment
arrangement and includes superannuation.
20 These payments related to the period from 1 July 2020 to 3 December 2020, prior to the listing of Nuix.
21 The award represents the period that the Executive Vice President, International and Executive Vice President, Americas were KMP. The Executive Vice President,
International and the Executive Vice President, Americas were determined to have become KMPs from 15 June 2021, and their remuneration packages have
not been changed as a result of this assessment. For these individuals, rather than Maximum STI, the above table represents On Target Earnings (OTE).
71
Table 5. Performance against FY21 STI performance measures
MEASURE
Revenue
EBITDA
Key
WEIGHTING
OUTCOMES
EXPLANATION
STI PERFORMANCE MEASURES
70%
30%
Nuix achieved 91% of revenue target in FY21.
Nuix achieved 105% of EBITDA target in FY21.
Below threshold
Between threshold and target
Above target
C. FY21 Sti terms – further detail
Key terms and conditions applying to the STI arrangements for the Executive KMP during FY21 is set out below.
Table 6. Description of key terms of FY21 Executive KMP STI
SHORT‑TERM INCENTIVE – KEY TERMS22
Term
Further detail – CEO and former CFO
Further detail – Executive Vice
President, International and
Executive Vice President, Americas
Performance
period
STI awards are assessed over the 12‑month financial year. Any STI award payments are
made after performance is tested at the end of the performance period.
Instrument
Performance
Measures
Once the total dollar value of the STI earned by a KMP is
determined, 2/3 will be awarded in cash, the remaining
1/3 will be delivered in share rights to support alignment
between Executive KMP and Nuix’s shareholders. Each
share right will vest into one share after 12 months.
The number of share rights granted will be calculated by
dividing the dollar value attributable to those share rights
by the closing Share price on the trading day immediately
before the date of the grant.
Once the total dollar value
of the STI earned by a KMP
is determined, the STI will
be awarded in cash as their
STI was calculated and
awarded under the staff
remuneration policy.
The STI is assessed against two
performance measures being:
• Group‑wide revenue (70% weighting)
• Group‑wide EBITDA (30% weighting).
It is considered that these two metrics
reflect the key financial drivers of value in
the business. As part of its overarching
discretion, the Board also retains discretion
to adjust STI outcomes for behaviour that
is inconsistent with the Group’s values and
culture (as well as any risk, regulatory or
reputational issues).
The STI is assessed against two
performance measures being:
• Relevant region revenue (70% weighting)
• Relevant region contribution margin
(30% weighting).
It is considered that these two metrics
reflect the key financial drivers of value
in the business. As part of its overarching
discretion, the Board also retains discretion
to adjust STI outcomes for behaviour that
is inconsistent with the Group’s values
and culture (as well as any risk, regulatory
or reputational issues).
Treatment on
cessation of
employment
Where an Executive KMP ceases employment prior to the end of the performance period,
the default position is that the executive would not be eligible for an STI award for that
financial year (unless the Board determines otherwise).
Change of
control
Where there is a change of control event (for example, a takeover bid, scheme of
arrangement, merger or any other transaction or event that in the Board’s opinion is a
change of control event), the Board has discretion in respect of the treatment of the STI
(subject to the ASX Listing Rules).
22 The Interim CFO was not eligible for an STI award in FY21 due to the interim nature of the employment contract.
72 Nuix Limited
Annual Report 2021
REMUNERATION REPORT (CoNtiNuEd)
4.4 FY21 long‑term incentive awards – granted
A. overview
As noted above, Executive KMP are eligible to participate in the LTI program. Table 7 below outlines the notional
value of LTI awards granted to Executive KMP during FY21. These LTI awards were outlined in the prospectus
and granted as part of the IPO process. The number of options granted was calculated by reference to the Issue
Price for the IPO of $5.31. The maximum LTI opportunity levels as a percentage of TFR reflect the heavy weighting
of Executive KMP packages towards the LTI. The Interim CFO was not eligible for an LTI award in FY21 due to
the fixed term nature of the employment arrangement.
Table 7. FY21 LTI awards to Executive KMP
EXECUTIVE KMP
Rodney Vawdrey
Stephen Doyle (former CFO)
Chad Barton
Jonathan Rees23
Ethan Treese23
MAXIMUM LTI
OPPORTUNITY
($)
MAXIMUM LTI
OPPORTUNITY
(% OF TFR)
902,118
568,750
N/A
234,490
229,169
125%
125%
N/A
N/A
N/A
B. FY21 Lti key terms – further detail
Table 8 below outlines the key terms attaching to the LTI awards granted to Executive KMP during FY21.
Table 8. Key terms of FY21 LTI awards granted to Executive KMP
Further detail
LONG‑TERM INCENTIVE – KEY TERMS
Entitlement
Subject to the satisfaction of the performance conditions and payment of the exercise
price, each LTI option entitles the holder to one fully paid ordinary share in Nuix Limited
(or a cash equivalent payment at the discretion of the Board).
Allocation
methodology
The number of LTI options to be granted is calculated by dividing the participant’s dollar
value LTI opportunity for FY21 (as outlined in table 7 above) by the market value of the
underlying share.
The exercise price is not taken into account in determining the number of Options
granted (e.g. the number of Options is not increased to recognise that the Participant is
required to pay an exercise price to exercise the Options). For example, the CEO received
169,891 Options which were calculated as the LTI opportunity of $902,118 divided by the
IPO offer price of $5.31. The participant is required to pay an exercise price of $5.31 to
exercise any Option.
Exercise price
The exercise price in respect of the FY21 LTI options is equal to the IPO offer price as
per Nuix’s prospectus, being $5.31 per option.
23 The Executive Vice President, International and the Executive Vice President, Americas were determined to have become KMPs from 15 June 2021,
and their remuneration packages have not been changed as a result of this assessment. Rather than Maximum LTI, for these individuals the table
represents a fixed amount.
73
Further detail
LONG‑TERM INCENTIVE – KEY TERMS
Expiry date
The FY21 LTI options will expire on 7 years from grant date, unless they have otherwise
lapsed before that date (e.g. if performance conditions are not met).
Performance
conditions and
vesting
schedule
The FY21 LTI options are subject to performance testing against the following
performance conditions:
• revenue (50%); and
• EBITDA (50%).
The revenue and EBITDA targets are assessed at the end of FY23. If the targets are met,
one‑third of the vested LTI Options will be available to be exercised upon the release of
the Company’s financial results for each of FY23, FY24 and FY25.
The vesting schedule in respect of the revenue and EBITDA measures is outlined below.
Specific targets will not be disclosed until the end of FY23 due to commercial sensitivity.
LEVEL OF
VESTING
REVENUE
EBITDA
Threshold
66.6% To be disclosed at the end
of FY23
Maximum
100% To be disclosed at the end
of FY23
To be disclosed at the end
of FY23
To be disclosed at the end
of FY23
Where an Executive KMP ceases employment prior to the expiry date noted above:
• for cause or resignation, the default position is that any unvested or vested and
unexercised LTI options will lapse (unless the Board determines otherwise); and
• in all other circumstances, the LTI options will remain on foot (unless the Board
exercises its discretion to treat them as lapsed).
Any vested options that are retained upon cessation of employment will need to be
exercised by the Executive KMP within 90 days of cessation of employment or such
longer period as the Board may determine.
Refer section 4.6 for further detail regarding the treatment of the former CFO’s
LTI options.
Treatment on
cessation of
employment
Forfeiture and
clawback
Under the post‑IPO framework, forfeiture and claw‑back provisions apply to the LTI
options in a range of circumstances including (but not limited to) where (1) a participant
has acted fraudulently or dishonestly, or breached his duties or obligations to the
Group; (2) has done an act which brings the Group into disrepute; or (3) there has
been a material misstatement or omission in the Group’s financial statements or a
circumstances which will require the financial statements of the Group to be restated.
Change of
control
Where there is a change of control event (for example, a takeover bid, scheme of
arrangement, merger or any other transaction or event that in the Board’s opinion
is a change of control event), the Board has discretion in respect of the treatment
of the awards (subject to the ASX Listing Rules).
74 Nuix Limited
Annual Report 2021
REMUNERATION REPORT (CoNtiNuEd)
4.5 Legacy option awards
The CEO and former CFO both had additional options on foot prior to IPO. These Options were granted and
vested while the Group was unlisted and were fully disclosed in the Prospectus. The Options were cancelled
and a cash payment made to the CEO and former CFO in respect of the cancellation at the time of IPO.
The CEO and former CFO chose to invest a significant portion of the post‑tax value of this cash payment into
Nuix shares (i.e. $8,392,503 and $4,430,505 respectively). The resulting Nuix shares were subject to an escrow
arrangement under which the Executive KMP were restricted from dealing with those Nuix shares until the
release of the Group’s FY21 financial results to the ASX.
Further detail in respect of those legacy awards and the terms of the cancelled options, are outlined in section
6.4.2.7 and 6.4.6 of Nuix’s prospectus.
The Executive Vice President, International and Executive Vice President, Americas also both had additional
options on foot prior to IPO. The Board resolved to accelerate vesting for half of the remaining unvested
portion of options historically granted to ExCo members, and cancel all vested options at the time of the IPO.
This acceleration of vesting and cancellation for half of the vested options held by ExCo members, included
options held by both the Executive Vice President, International and Executive Vice President, Americas.
These transactions occurred prior to these individuals being determined to be KMPs.
Table 9. Key terms of historical awards granted to ExCo members including Executive Vice President, International and
Executive Vice President, Americas.
Term
Description
Exercise Price
The exercise price is between $2.00 – $3.00 per option
Rights
Vesting
Each option entitles the holder to one Share on exercise of the option.
Options remained unvested on Completion of the IPO.
The options vest proportionately on a monthly linear basis over 60 months
from the date of the grant.
Expiry
An option will lapse on the earlier of:
Only vested options are exercisable.
• the expiry date of the original option, which may be between 28 August 2024
to 10 September 2028
• 90 days (or such longer period determined by the Board) from the date of written
notice of an “insolvency Event”, which includes pursuant to an application made
to the Court, the Court orders a meeting to be held in relation to a proposed
compromise or arrangement for the purpose of or in connection with, a scheme
for the reconstruction of the Company of its amalgamation with any other
company, or a voluntary or compulsory winding‑up;
• the date the optionholder is terminated for committing any act of fraud, defalcation
or gross misconduct in relation to the affairs of Nuix or any related body corporate
of Nuix (whether or not charged with an offense) or doing any act which in the
reasonable opinion of the Board brings Nuix or any related body corporate of
Nuix into disrepute;
• depending on the optionholder, 180 days following the date that the optionholder’s
employment ceases for death or, in the Board’s opinion a permanent
disablement preventing them from continuing as an employee of Nuix; and
75
Term
Description
Expiry (cont)
Change in
circumstances
• depending on the optionholder, either on the date the optionholder ceases to
be employed by Nuix or 30 days following the date that the optionholder ceases
to be employed by Nuix for any reason other than as a result of death or, in the
Board’s opinion, a permanent disablement preventing them from continuing
as an employee of Nuix.
• Capital reorganisations: For certain optionholders, options are not entitled
to participate in any new issue of shares a s a result of a capital reorganisation
of Nuix unless they are exercised prior to the record date of any capital
reorganisation. The terms of the options shall be proportionately reorganised
in accordance with the relevant reorganisation plan.
• Bonus issues: If Nuix makes a bonus issue of shares (including on a pro rata
basis) to existing shareholders for no consideration, then the number of shares
over which an option is exercisable shall be increased by the number of shares
which the optionholder would have received if the optionholder had exercised
the option prior to the record date for the bonus issue.
Change in structure or
control
In the event of a Corporate Transactions (defined below), the Board may take
one or more of the following actions in respect of the options:
• arrange for the surviving or acquiring corporation to assume or continue the
option, or substitute the option with a similar award;
• cancel or arrange for the cancellation of the option, to the extent not vested or
not exercised prior to the effective time of the Corporate Transaction, which may
be in exchange for cash consideration (if any) as the Board (in its sole discretion)
may consider appropriate;
• make payment to the optionholder (in a form as may be determined by the
Board) equal to the value of the Share the optionholder would have received
upon the exercise of the option, over any exercise price payable by the
optionholder in connection with such exercise.
The option terms define Corporate Transaction as (relevantly) any of the following:
• a sale or other disposition of all or substantially all, as determined by the
Board in its sole discretion, of the consolidated assets of Nuix and its related
bodies corporate;
• a sale or other disposition of at least fifty percent (50%) of the outstanding
securities of Nuix;
• a merger, consolidation or similar transaction following which Nuix is not the
surviving entity; or
• a merger, consolidation or similar transaction following which Nuix is the
surviving entity but the Shares outstanding immediately preceding the merger,
consolidation or similar transaction are converted or exchanged by virtue of the
merger, consolidation or similar transaction into other property, whether in the
form of securities, cash or otherwise.
Other terms
Options are not transferable and will not be quoted. Other terms include provisions
relating to amendments to the terms by the Board.
Any changes to option terms are subject to the ASX Listing Rules
76 Nuix Limited
Annual Report 2021
REMUNERATION REPORT (CoNtiNuEd)
4.6 Treatment of equity arrangements for former CFO
As outlined in section 1, former CFO Stephen Doyle ceased as KMP on 21 June 2021 and concluded his
employment with the Group on 30 June 2021.
Table 10. Treatment of various incentives for former CFO:
INCENTIVE/ENTITLEMENT FURTHER DETAIL
Notice period
Short‑term
incentive
(section 4.3)
FY21 LTI award
(section 4.4)
Mr Doyle worked out a portion of his 6‑month notice period from 21 June to
30 June 2021. He received a payment in lieu of the remainder of this notice period
which was paid in July 2021.
Mr Doyle was awarded an STI payment for the period from 1 July 2020 to the date
of listing under his previous employment contract. No STI was awarded to Mr Doyle
post the listing of Nuix for the remainder of FY21.
The Board determined that 50% of Mr Doyle’s FY21 LTI award (i.e. 53,555 options)
would be cancelled. The remaining 50% of Mr Doyle’s FY21 LTI award (i.e. 53,555
options) will remain on foot to be tested against the original revenue and EDITDA
performance conditions and vest (as applicable) at the end of the original 3‑year
performance period. The treatment of any options that remain on foot (to the extent
performance hurdles are met) will remain subject to the forfeiture and clawback
provisions of the LTI plan rules in various circumstances including fraud
or dishonesty.
77
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78 Nuix Limited
Annual Report 2021
REMUNERATION REPORT (CoNtiNuEd)
5. NON‑EXECUTIVE DIRECTOR REMUNERATION
5.1 Overview
The Board sets the fees for its Non‑Executive Directors in line with the key objectives of the Group’s
Non‑Executive Director remuneration policy set out below.
Non‑Executive Director remuneration is reviewed annually and the Remuneration and Nomination Committee
makes recommendations to the Board regarding the remuneration of Non‑Executive Directors.
The Group does not make sign‑on payments to new Non‑Executive Directors nor provide for retirement
allowances/benefits for Non‑Executive Directors (other than superannuation). Executive Directors of the
Group are not entitled to be paid Non‑Executive Directors’ fees.
MARKET
COMPETITIVE
INDEPENDENCE
AND IMPARTIALITY
INDEPENDENCE
AND IMPARTIALITY
• The Board’s policy is
to pay Non‑Executive
Directors at market
competitive rates to
attract and retain high
calibre Directors with
the necessary skills,
expertise and experience
for the Nuix Board
• In positioning fees, the
Board has regards to fees
payable by comparable
companies (based on
external benchmarking
data) as well as the
time commitment
and workloads of
Non‑Executive Directors
• No element of
• Non‑Executive Directors
are encouraged to
hold securities in the
Company to create
alignment between
interests of Directors
and shareholders
Non‑Executive Director
remuneration is “at risk”
(i.e. subject to performance
conditions) in order to
preserve the Directors’
independence and
impartiality
• Two Non‑Executive
Directors held options
over Nuix shares that were
granted to them pre‑IPO.
These options are not
performance tested so
as not to conflict with
their obligation to bring an
independent judgement to
matters before the Board.
No options have been
granted to Non‑Executive
Directors since Listing
• It is not intended to
grant Options to NED’s
in the future
79
5.2 Fee pool and schedule
Non‑Executive Directors are paid from an aggregate annual fee pool of $1,100,000, as approved by the
Group’s shareholders upon its listing in 2020.
Table 12 below sets out the fees (inclusive of superannuation) payable to the Non‑Executive Directors of the
Group in respect of FY21.
Daniel Phillips was not paid fees for being a Non‑executive Director, or for chairing or being a member of any
Board Committee, during FY21. Former Non‑Executive Directors, Mark De Ambrosis and David Standen, also
did not receive any Non‑Executive Director fees in FY21 (i.e. between 30 June 2021 and 18 November 2021).
Non‑EXECUTIVE DIRECTOR FEES
Table 12. NED fees for FY21
POSITION
Chairman
Directors
Committee chairman
Committee member
FEES FOR FY21
(ANNUALISED)
$240,000
$120,000
$20,000
$10,000
5.3 Legacy options held by Non‑Executive Directors
As outlined in section 6.4.2.7 of Nuix’s Prospectus, Non‑Executive Directors Jeffrey Bleich and Sir Iain Lobban
(via Cyberswift Ltd) each held 625,000 options over Nuix shares prior to completion of the IPO. Upon
completion of the IPO, 375,000 of those options were cancelled for cash and 250,000 options remained on
foot for each of them.
Blackall Limited legally and beneficially held 15,000,000 options over Nuix shares that were cancelled prior to
the completion of the IPO for cash. Blackall Limited is ultimately owned by Delrick Limited, a company limited
by guarantee incorporated in Vanuatu which maintained a retirement fund for Nuix Co‑Founder Dr. Anthony
Castagna. Dr. Castagna was a nominated Director by Blackall Limited. In addition, Blackall Limited also holds
13,345,750 shares that remained subject to escrow as of 30 June 2021.
The terms of the options remaining on foot for the Non‑Executive Director options on Completion are noted
below. In accordance with best practice and the Group’s Remuneration Policy, these options do not have
performance conditions attached and are intended as a once‑off arrangement.
80 Nuix Limited
Annual Report 2021
REMUNERATION REPORT (CoNtiNuEd)
Table 13. Key terms of legacy awards granted to Non-Executive Directors
TERM
DESCRIPTION
Exercise Price
$5.01 per option. All options are exercisable from Completion.
Rights
Expiry
Each option entitles the holder to one Share on exercise of the option.
An option will lapse on the earlier of:
• 5:00pm on 30 September 2023;
• 90 days (or such longer period determined by the Board) from the date of written
notice of an “insolvency Event”, which includes pursuant to an application made to
the Court, the Court orders a meeting to be held in relation to a proposed
compromise or arrangement for the purpose of or in connection with, a scheme
for the reconstruction of the Company of its amalgamation with any other company,
or a voluntary or compulsory winding‑up;
• 180 days following the date that Jeffrey or Iain’s appointment ceases for death, or in
the Board’s opinion, a permanent disablement preventing them from continuing as
a Director of Nuix; and
• the date that Jeffrey or Iain ceases to be appointed as a non‑Executive Director,
other than as a result of death or, in the Board’s opinion, a permanent disablement
preventing them from continuing as a Director of Nuix.
Change in
circumstances
• Capital reorganisations: Options are not entitled to participate in any new issue of
Shares as a result of a capital reorganisation of Nuix unless they are exercised prior
to the record date for any capital reorganisation. The terms of the options shall be
proportionately reorganised in accordance with the relevant reorganisation plan.
• Bonus issues: If Nuix makes a bonus issue of Shares pro rata to existing shareholders
for no consideration, then the number of Shares over which an option is exercisable
shall be increased by the number of Shares which the optionholder would have received
if the optionholder had exercised the option prior to the record date for the bonus issue.
Change in
structure
or control
In the event of a Corporate Transactions (defined below), the Board may take one or
more of the following actions in respect of the options:
• arrange for the surviving or acquiring corporation to assume or continue the option,
or substitute the option with a similar award;
• cancel or arrange for the cancellation of the option, to the extent not vested or not
exercised prior to the effective time of the Corporate Transaction, which may be in
exchange for cash consideration (if any) as the Board (in its sole discretion) may
consider appropriate;
• make payment to the optionholder (in a form as may be determined by the Board)
equal to the value of the Share the optionholder would have received upon the
exercise of the option, over any exercise price payable by the optionholder in
connection with such exercise.
The option terms define Corporate Transaction as (relevantly) any of the following:
• a sale or other disposition of all or substantially all, as determined by the Board in its
sole discretion, of the consolidated assets of Nuix and its related bodies corporate;
• a sale or other disposition of at least fifty percent (50%) of the outstanding securities
of Nuix;
• a merger, consolidation or similar transaction following which Nuix is not the
surviving entity; or
81
TERM
DESCRIPTION
Change in
structure
or control (cont)
• a merger, consolidation or similar transaction following which Nuix is the surviving
entity but the Shares outstanding immediately preceding the merger, consolidation
or similar transaction are converted or exchanged by virtue of the merger,
consolidation or similar transaction into other property, whether in the form
of securities, cash or otherwise.
Other terms
Options are not transferable and will not be quoted. Other terms include provisions
relating to amendments to the terms by the Board.
Any changes to option terms are subject to the ASX Listing Rules.
5.4 Non‑Executive Directors – statutory remuneration
The fees paid or payable to the Non‑Executive Directors of the Group in respect of FY21 are set out in the
table below.
Table 14. FY21 – NED statutory remuneration table
Short‑term
benefits
Long‑term
benefits
Share‑based
payments
Total
NON‑EXECUTIVE DIRECTOR
REMUNERATION
FINANCIAL
YEAR
SALARY &
FEES
$
SUPER‑
ANNUATION
$
Jeffrey Bleich
Sir Iain Lobban31
Daniel Phillips
Sue Thomas32
FY21
FY21
FY21
FY21
228,556
121,820
–
–
–
–
130,231
7,591
Dr Anthony Castagna33(former)
FY21
238,530
10,847
Roy Grady (former)
David Standen (former)
Mark De Ambrosis (former)
TOTAL
FY21
FY21
FY21
FY21
38,056
3,615
–
–
–
–
OPTIONS
$
TOTAL
$
392,787
621,343
372,652
494,472
–
–
–
–
–
–
–
137,822
249,377
41,671
–
–
757,193
22,053
765,439
1,544,685
PERFOR
–MANCE
RELATED
–
–
–
–
–
–
–
–
–
31 Sir Iain Lobban – Sir Iain Lobban was engaged as an adviser to the Board prior to being appointed as a Director on 18 November 2020. In this role he was
paid $41,087 and this amount is included in the total fees paid in the above table.
32 Sue Thomas was engaged as an adviser to the Board prior to being appointed as a Director on 18 November 2020. In this role she was paid $50,332 and this
amount is included in the total fees paid in the above table.
33 Former Chairman Dr Anthony Castagna was engaged as a consultant from 1 January 2021 until 28 May 2021, when the arrangement was terminated by the
Group, to facilitate and provide advice on a range of matters such as strategic initiatives, organisational structure, leading strategic projects and coaching
of leaders as required. Fees payable under the consultancy agreement totalled $180,000 with an additional $10,847 paid in respect of superannuation
contributions. These fees are not included in the above table on the basis that these transactions were not in respect of his service to the Group as a KMP.
82 Nuix Limited
Annual Report 2021
REMUNERATION REPORT (CoNtiNuEd)
6. REMUNERATION GOVERNANCE
6.1 Responsibility for setting remuneration
Nuix maintains a robust remuneration governance framework, which aims to ensure that the Group’s
remuneration practices are fair and reasonable, aligned with best practice and balance both financial and
non‑financial risk considerations.
Diagram 2. Nuix’s remuneration governance framework
NUIX BOARD
The Board is responsible for the overall corporate governance, operation and stewardship of the Group and,
in particular, for the long‑term growth and profitability, the strategies, values, policies and
financial objectives.
The Board reviews, challenges, applies judgment and, as appropriate, approves the Remuneration and
Nomination Committee’s recommendations. It approves the remuneration of Executive KMP and of
Non‑Executive Directors and the polices and frameworks that govern both.
REMUNERATION AND NOMINATION COMMITTEE
The role of the Remuneration and Nomination Committee is to assist the Board by reviewing and making
recommendations to the Board in relation to:
• the Group’s Remuneration Policy, including as it applies to Non‑Executive Directors and the process by
which any pool of Non‑Executive Directors’ fees approved by shareholders is allocated to Directors;
• remuneration packages of senior executives, Non‑Executive Directors and Executive Directors,
equity‑based incentive plans and other employee benefit programs;
• succession issues and planning for the Board, Chief Executive Officer, senior executives and Executive
Directors and the recruitment of new Non‑Executive Directors and senior executives;
• the appointment and re‑election of people as members of the Board and its committees;
• the Group’s recruitment, retention and termination policies;
• the process for the evaluation of the performance of the Board, its Board committees and individual
Non‑Executive Directors; and
• the size and composition of the Board and strategies to address Board Diversity and the Group’s
performance in respect of the Group’s Diversity Policy.
MANAGEMENT
EXTERNAL ADVICE
Management is responsible for preparing
proposals to be considered by the Remuneration
and Nomination Committee on remuneration
arrangements and outcomes.
Management also oversees the implementation
of approved remuneration policies and processes.
External advisers may be used from time‑to‑time
to supplement the Remuneration and Nomination
Committees own information and insights
(as required) and to ensure the Committee is
appropriately informed when discharging
its obligations.
83
6.2 Use of remuneration consultants
The Remuneration and Nomination Committee seeks external remuneration advice to assist the Committee
with discharging its duties and ensure that it is fully informed when making decisions (including on recent
market trends and practices and other remuneration related matters).
Any advice from consultants is used as a reference point by the Remuneration and Nomination Committee and
the Board only, and does not serve as a substitute for thorough consideration by Non‑Executive Directors.
During FY21, the Committee received advice from KPMG including benchmarking services and market practice
in respect of incentive arrangements in ASX listed entities.
No remuneration recommendations (as defined in section 9B of the Corporations Act 2001) were obtained
during the financial year ended 30 June 2021.
6.3 Details of Executive Service Agreements
Key terms of the service agreements of Executive KMP are summarised in Table 15 below.
Table 15. Key terms of Executive KMP contracts in FY21
Element
Duration
Periods of notice
required to
terminate
Termination
payments
Restraints
EXECUTIVE SERVICE AGREEMENTS
Further detail
Ongoing term, except Interim CFO, which is fixed term.
Either party may terminate the contract by giving the following notice:
• CEO and CFO – 6 months’ written notice;
• Executive Vice President, International and Executive Vice President, Americas –
90 days or 3 months’ written notice; and
• Interim CFO – 1 month’s written notice.
For all Executive KMP, the Group may terminate the service agreement immediately
without notice in certain circumstances, including (but not limited to) where the
relevant Executive KMP engages in a serious breach of agreement or
serious misconduct.
Members of the Executive KMP are not entitled to any termination payments.
A payment may be made in lieu of notice at the discretion of the Board where
termination occurs other than for cause.
The CEO and CFO are subject to a post‑employment restraint period of 12 months
and 9 months respectively. The Executive Vice President International and Executive
Vice President, Americas have a 6 months’ post‑employment restraint period.
The Interim CFO has a 1 month post‑employment restraint period.
84 Nuix Limited
Annual Report 2021
REMUNERATION REPORT (CoNtiNuEd)
7. FURTHER INFORMATION
7.1 Executive KMP and Director share ownership
Tables 16 and 17 below set out the number of shares held directly, indirectly or beneficially by KMP.
Table 16. Movements in shareholdings not held under an employee share plan
OPENING
BALANCE
PURCHASE OF
SHARES
DISPOSAL
OF SHARES
OTHER CHANGES
DURING THE
YEAR
BALANCE
30‑JUN‑21
Non‑Executive Directors
Jeffrey Bleich
Sir Iain Lobban
Daniel Phillips
Sue Thomas
Dr Anthony Castagna
(former)34
Roy Grady (former)
David Standen (former)
Mark De Ambrosis
(former)35
Executive KMP
Rod Vawdrey
Stephen Doyle (former)36
Chad Barton
Jonathan Rees37
Ethan Treese37
–
–
–
–
13,345,750
–
–
–
–
–
–
4,610
–
35,000
–
–
18,833
–
–
–
–
1,680,509
834,370
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
13,345,750
–
–
–
–
834,370
–
–
–
35,000
–
–
18,833
–
–
–
–
1,680,509
–
–
4,610
–
34 Held through Blackall Limited, and have been shown as part of “other changes” as Dr Anthony Castagna ceased to be a KMP on 18 November 2020.
These shares remained subject to escrow as of 30 June 2021. Blackall Limited is a New Zealand incorporated company and legal and beneficial owner
of described shares. Blackall Limited is ultimately owned by Delrick Limited, a company limited by guarantee incorporated in Vanuatu which maintains
a retirement fund for Nuix co-founder Dr Anthony Casagna.
35 Cavill Armitage Services Pty Ltd, the trustee of Cavill Armitage Co-Investment Fund, a special purpose investment vehicle managed by Armitage
Associates Pty Ltd held 17,939,783 shares in Nuix and sold down half of these in the IPO. Mark De Ambrosis was the nominated director of the
shareholder to the Nuix board.
36 Shares held by Stephen Doyle have been shown as part of “other changes” as he ceased to be a KMP on 30 June 2021. These shares remained subject
to escrow as of 30 June 2021.
37 Opening balance for Jonathan Rees and Ethan Treese reflect the number of shares held on 15 June 2021 when they became KMPs.
85
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7.3 Other transactions and balances with Executive KMP
A. Loans to Executive KMP
No Executive KMP or their related parties received loans, guaranteed or secured, directly or indirectly from
the Group during the year.
B. other Executive KMP transactions
With the exception of the Consultancy arrangement with Dr. Anthony Castagna disclosed in section 5.4,
the group did not engage in any transactions with Executive KMP or their related parties during the year.
C. other transactions
A former director, Dr. Tony Castagna is a director of Haventec Pty Ltd and had the capacity to significantly
influence decision making of that company during the year. Nuix Limited provided office space to Haventec
Pty Ltd for nil consideration during the year, under an arrangement which has ceased prior to 30 June 2021.
88 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
For the year ended 30 June 2021
Revenue
Cost of goods sold
Gross profit
Sales and distribution
Research and development
General and administration
Other income
Other gains/(losses) – net
Operating (loss)/profit
Finance costs
(Loss)/Profit before income tax
Income tax benefit/(expense)
(Loss)/Profit for the year
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive income, net of tax
Total comprehensive income for the year, net of tax
NOTES
2.1
2.3
2.4
2.3
2.5
3.1
2021
$000
2020
$000
176,068
175,859
(18,851)
(20,686)
157,217
155,173
(52,399)
(37,932)
(68,598)
1,160
(2,015)
(2,567)
(1,393)
(3,960)
2,554
(1,406)
(8,478)
(8,478)
(9,884)
(64,075)
(32,903)
(24,675)
1,011
(250)
34,281
(1,859)
32,422
(8,835)
23,587
1,809
1,809
25,396
Earnings per share
Basic
Diluted
$
$
2.7
2.7
(0.00)
(0.00)
0.09
0.08
The consolidated statement of comprehensive income should be read in conjunction with the
accompanying notes.
The change in classification of comparative period balances is detailed in Note 1.9.
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
For the year ended 30 June 2021
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non‑current assets
Deferred tax asset
Intangible assets
Property and equipment
Right‑of‑use assets
Other non‑current assets
Total non‑current assets
Total assets
Current liabilities
Current tax liabilities
Trade and other payables
Deferred revenue
Provisions
Borrowings
Lease liabilities
Total current liabilities
Non‑current liabilities
Deferred tax liabilities
Deferred revenue
Provisions
Lease liabilities
Total non‑current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
89
NOTES
2021
$000
(AS ADJUSTED)
2020
$000
4.1
4.2
4.3
3.3
5.1
5.2
5.3
4.2
3.4
4.4
4.5
4.6
4.7
5.3
3.3
4.5
4.6
5.3
8.1
8.2
70,865
63,767
6,209
140,841
5,225
197,415
2,018
9,036
9,474
223,168
364,009
571
19,754
33,832
2,878
–
2,635
59,670
2,467
11,528
542
8,727
23,264
82,934
281,075
370,696
(174,322)
84,701
281,075
38,539
51,218
1,897
91,654
499
197,155
2,412
12,872
8,986
221,924
313,578
327
20,704
36,419
2,664
25,531
3,704
89,349
5,334
11,372
507
11,539
28,752
118,101
195,477
104,227
5,143
86,107
195,477
The consolidated statement of financial position should be read in conjunction with the accompanying notes.
The restatement of comparative period balances is detailed in Note 1.9.
90 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
For the year ended 30 June 2021
ISSUED CAPITAL
$000
SHARE OPTION
RESERVE
$000
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$000
Balance at 1 July 2019
104,227
(1,339)
Profit for the year
Other comprehensive
income, net of tax
Total comprehensive
income
Share‑based payments
–
–
–
–
Balance at 30 June 2020
104,227
Profit for the year
Other comprehensive
income
Total comprehensive
income
–
–
–
Contributions of equity, net
of transaction costs and tax
266,469
–
–
–
685
(654)
–
–
–
–
Cancellation of options
Share‑based payments
–
–
(175,040)
4,053
RETAINED
EARNINGS
$000
62,520
23,587
TOTAL EQUITY
$000
169,396
23,587
–
1,809
23,587
–
86,107
(1,406)
25,396
685
195,477
(1,406)
3,988
–
1,809
1,809
–
5,797
–
(8,478)
–
(8,478)
(8,478)
(1,406)
(9,884)
–
–
–
–
–
–
266,469
(175,040)
4,053
Balance at 30 June 2021
370,696
(171,641)
(2,681)
84,701
281,075
The consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
91
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2021
Cash flows from operating activities
Receipts from customers
Payments to employees and suppliers45
Interest received
Interest paid
Income tax paid
Net cash from operating activities
Cash flows from investing activities
Payments for software development costs
Purchase of intangible assets
Purchase of property and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issuance of ordinary shares
Payments to option holders for cancellation of options
Payments for share issue costs45
Principal payments of lease
Repayment of borrowings
Transaction costs on borrowings
Net cash provided by/(used in) financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Exchange differences on cash and cash equivalents
Cash and cash equivalents at end of financial year
NOTES
2021
$000
2020
$000
164,482
176,507
(152,039)
(115,744)
17
(1,464)
(195)
10,801
37
(1,823)
(419)
58,558
(34,130)
(42,455)
(126)
(1,051)
(1,021)
(1,355)
(35,307)
(44,831)
275,661
(175,614)
(13,132)
(3,739)
(25,071)
–
58,105
33,599
38,539
(1,273)
70,865
–
–
–
(2,812)
–
(151)
(2,963)
10,764
27,332
443
38,539
3.5
2.6
5.1
5.1
5.2
8.1
8.2
4.7
4.1
4.1
The consolidated statement of cash flows should be read in conjunction with the accompanying notes.
45 Cash flows related to payment of offer costs are recognised in the statement of cash flows between operating activities and financing activities, on a basis
consistent with the split between recognition in equity and profit and loss (refer Note 4). The total amount of cash paid for offer costs during the year was
$45,409,000 of which $32,277,000 was recognised within payments to employees and suppliers as part of operating activities, and $13,132,000 was
recognised as payments for share issue costs as financing activities.
92 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The notes are grouped into 9 sections. Each section contains an introduction and general information,
along with the relevant accounting policies and key judgements.
The layout of these financial statements has been streamlined to present them in a way that is intuitive for
readers to follow. This is achieved by grouping disclosures, and focusing information in a manner which
provides increased clarity and ease of understanding.
This section describes the key accounting principles and policies that we have adopted in preparing the
financial statements for the Group as a whole. This section also analyses the impact of any newly issued
but not yet effective accounting standards which will be effective for Nuix in future years.
1.1 Reporting entity
Nuix Limited (the ‘Company’) is a company that is incorporated and domiciled in Australia. The Company’s
registered address is Level 27, 1 Market Street, Sydney NSW Australia. Nuix is a leading provider of
investigative analytics and intelligence software. These consolidated financial statements comprise the
Company and its subsidiaries (together referred to as ‘the Group’).
1.2 Basis of accounting
The consolidated financial statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards adopted by the Australian Accounting Standards Board, and
the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting
Standards adopted by the International Accounting Standards Board.
The financial statements were authorised for issue by the Board of Directors on 30 September 2021.
The consolidated financial statements are presented in Australian dollars, which is the reporting currency
of the Company, and has been prepared on the basis of historical cost except in accordance with relevant
accounting policies where assets and liabilities are stated at their fair values.
Nuix is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191. In accordance with that instrument all financial information presented has been rounded
to the nearest thousand dollars, unless otherwise stated.
1.3 Basis of consolidation
The Group accounts for business combinations using the acquisition method when the acquired set of
activities and assets meets the definition of a business and control is transferred to the Group.
The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an
acquired set of activities and assets is not a business. The optional concentration test is met if substantially all
of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar
identifiable assets.
The acquisition method of accounting is used to account for all business combinations, regardless of whether
equity instruments or other assets are acquired.
The consideration transferred in the acquisition is generally measured at fair value. The consideration
transferred does not include amounts related to the settlement of pre‑existing relationships. Such amounts
are generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay
contingent consideration that meets the definition of a financial instrument is classified as equity, then it is
not remeasured, and settlement is accounted for within equity. Otherwise, other contingent consideration is
remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent
consideration are recognised in profit or loss.
93
Identifiable assets and liabilities in a business combination are, with limited exceptions, measured initially
at their fair values at the acquisition date. The Group recognises any non‑controlling interest in the acquired
entity on an acquisition‑by‑acquisition basis either at fair value or at the non‑controlling interest’s
proportionate share of the acquired entity’s net identifiable assets.
The excess of the consideration transferred, the amount of any non‑controlling interest in the acquired entity
and the acquisition‑date fair value of any previous equity interest in the acquired entity over the fair value of
the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of
the net identifiable assets of the business acquired, the difference is recognised directly in profit and loss as
a bargain purchase. Any goodwill that arises is tested annually for impairment.
Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
1.3.1 Subsidiaries
Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it 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 over the entity. The financial statements of subsidiaries are included in the consolidated
financial statements from the date on which control commences until the date on which control ceases.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
1.3.2 transactions eliminated on consolidation
Intra‑group balances and transactions, and any unrealised income and expenses (except for foreign currency
transaction gains or losses) arising from intra‑group transactions, are eliminated.
1.4 Foreign currency transactions and balances
1.4.1 Functional and presentation currency
Transactions in foreign currencies are translated into the respective functional currencies of Group companies
at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rates at the dates of the transactions. Non‑monetary assets and liabilities that are measured
at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair
value was determined. Non‑monetary items that are measured based on historical cost in a foreign currency
are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally
recognised in profit or loss and presented within finance costs.
1.4.2 Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition, are translated into Australian dollars at the exchange rates at the reporting date. The income
and expenses of foreign operations are translated into Australian dollars at the exchange rates at the dates
of the transactions.
Foreign currency differences are recognised in other comprehensive income (OCI) and accumulated in the
translation reserve, except to the extent that the translation difference is allocated to non‑controlling interests.
When a foreign operation is disposed of in its entirety or partially such that control, significant influence
or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is
reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes part of its interest
in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to
non‑controlling interests.
94 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
1.5 New standards, interpretations and amendments adopted by the Group
A number of new or amended standards and interpretations became applicable for the current reporting period
effective from 1 July 2020. The Group did not have to change its accounting policies or make retrospective
adjustments to adopt these standards. As a result of its shares becoming listed on the Australian Stock Exchange,
the Group has applied AASB 133/IAS 33 Earnings Per Share for the first time for the year ended 30 June 2021.
1.6 Impact of standards issued but not yet applied by the Group
A number of new or amended standards and interpretations have been published that are not mandatory for
30 June 2021 full year reporting and have not been early adopted by the Group. When they are required to be
adopted, they are not expected to have a significant impact on the Group’s consolidated financial statements.
1.7 Use of judgements and estimates
In preparing these consolidated financial statements, management has made judgements and estimates that
affect the application of accounting policies and the reported amounts of assets and liabilities, income and
expenses. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on‑going basis. Revisions to accounting estimates
are recognised in the year in which the estimate is revised if the revision affects only that year or in the year of
the revision and future years if the revision affects both current and future years.
Significant areas of estimation and critical judgements are described in the relevant note.
• Revenue recognition – Note 2.1;
• Uncertain tax position – Note 3;
• Capitalisation and useful life of intangible assets – Note 5.1;
• Impairment testing of goodwill – Note 5.4; and
• Contingent liabilities – Note 9.5.
1.8 Significant events and transactions
The Company completed an initial public offering (‘IPO’ or the ‘Offer’) of its shares, whereby 51,904,161 new
shares were issued by the Company and 127,574,983 shares were offered by existing shareholders at an offer
price of $5.31 per share.
The Company was admitted to the Official List of ASX Limited on 4 December 2020.
In relation to the Offer, the Company performed the following transactions:
• Issued 51,904,161 new shares at $5.31 each (refer Note 8.1);
• Cancelled 38,961,508 existing options to acquire shares of the Company (refer Note 8.2);
• Incurred $45,409,000 of costs related to the offer, $1,014,000 related to listing fees and $2,637,000 related
to the sale process explored by Nuix as an alternative to the offer (refer Note 2.3);
• Granted options and performance rights as detailed in the Prospectus (refer Note 6.2).
The accounting for these transactions during the year is described in the relevant notes to the consolidated
financial statements.
COVID‑19 was declared a pandemic by the World Health Organisation on 11 March 2020. The outbreak and the
response of governments in dealing with the pandemic are interfering with general activity levels within the
community and the economy. The scale and duration of these developments continue to remain uncertain.
Nuix has continued to operate through COVID‑19 (and government restrictions to manage the pandemic) with
95
the majority of staff able to carry out their roles, working remotely where required, in developing software,
entering into new customer contracts, supporting and training customers, and operating the business.
Nuix is currently requiring or encouraging its staff to work remotely and has implemented work‑related
travel restrictions on staff.
1.9 Changes in classification and presentation
During 2021, the Group amended the classification and presentation of share‑based payment expenses to
reflect more appropriately the functions that incur these costs. Comparative amounts in the statement of
profit and loss and other comprehensive income were reclassified for consistency. As a result, amounts of
$452,000, $98,000 and $135,000 were reclassified to the comparative sales and distribution, research and
development and general and administration costs respectively.
The Group has also amended the presentation in the balance sheet to reflect the portion of unbilled revenue
and deferred revenue expected to be realised greater than 12 months post balance date as non‑current.
This resulted in a reduction in current unbilled revenues of $8,986,000 and a corresponding increase in other
non‑current assets, and a reduction in current deferred revenues of $11,372,000 and a corresponding increase
in non‑current deferred revenues compared to amounts previously presented as at 30 June 2020.
1.10 Financial instruments
1.10.1 Recognition and initial measurement
Trade receivables are initially recognised when customers are invoiced. All other financial assets and financial
liabilities are initially recognised when the Group becomes a party to the contractual obligations.
A financial asset (unless it is a trade receivable) or financial liability is initially measured at fair value plus
transaction costs that are directly attributable to its acquisition. Trade receivables are initially measured
at the transaction price.
1.10.2 derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset
expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially
all of the risks and rewards of ownership of the financial asset are transferred, or in which the Group neither
transfers/retains substantially all of the risks and rewards of ownership, and it does not retain control.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or
expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of
the modified financial liability are substantially different, in which case a new financial liability based on the
modified terms is recognised at fair value. On derecognition of a financial liability, the difference between
the carrying amount extinguished and the consideration paid is recognised in profit or loss.
1.10.3 offsetting
Financial assets and financial liabilities are offset and the net amount presented in the consolidated statement
of financial position when, and only when, the Group currently has the legally enforceable right to set off the
amounts and it intends either to settle them net, or to realise the asset and settle the liability simultaneously.
1.10.4 impairment
The Group assesses on a forward‑looking basis, the expected credit losses associated with its trade
receivables and contract assets. Loss allowances for trade receivables and contract assets are always
measured at an amount equal to the expected lifetime losses. The expected lifetime losses are those that
result from all possible default events over the expected life of a financial instrument. Loss allowances for
financial assets measured at amortised cost, are deducted from the gross carrying amount of the assets.
96 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
1.11 Goods and services tax
Revenues, expenses and assets are recognised net of the associated goods and services tax (GST), unless the
GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of
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 taxation authority is
included with other receivables or payables in the balance sheet. 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 taxation authority, are presented as operating cash flows.
1.12 Classification of expenses
1.12.1 Presentation of results
The Group has presented the expense categories within the consolidated statement of profit or loss on a
functional basis. The categories used are cost of goods sold, research and development, sales and distribution
and general and administration. The presentation style provides insight into the Company’s business model
and enables users to consider the results of the Group compared to other major software companies.
The methodology and the nature of costs within each category are further described below.
1.12.2 Cost of goods sold
Cost of goods sold consists of expenses directly associated with securely hosting the Group’s services
and providing support to customers. Costs include data centre costs, personnel and related costs directly
associated with cloud infrastructure and customer consulting, implementation and customer support,
contracted third party costs, reseller channel costs and allocated overheads.
1.12.3 Research and development expenses
Research and development expenses consist primarily of personnel and related costs directly associated with
the Company’s research and development employees, as well as direct costs of research and development
(including subscriptions) and allocated overheads. When future economic benefits from development of
an intangible asset are determined probable and the development activities are capable of being reliably
measured, the costs are capitalised as an intangible asset and then amortised to profit or loss over the
estimated life of the asset created. The development activities comprise the interface design, coding,
documentation and testing of a chosen alternative for new or improved software products, processes, systems
and services. The amortisation of those costs capitalised is included as a research and development expense.
1.12.4 Sales and distribution expenses
Sales and distribution expenses consist of personnel costs directly associated with the sales and marketing
team’s activities to acquire new customers and grow revenue from existing customers. Other costs included
are external advertising, digital platforms, marketing and promotional events as well as allocated overheads.
1.12.5 General and administration expenses
General and administration expenses consist of personnel and related costs for the Company’s executive,
Board of Directors, finance, legal, human resources, corporate strategy, CISO, and IT employees. They also
include legal, accounting and other professional services fees, insurance premiums, acquisition and
integration costs associated with the Company’s ongoing acquisition strategy, other corporate expenses
and allocated expenses.
1.12.6 overhead allocation
The presentation of the consolidated statement of profit or loss and other comprehensive income by function
requires certain overhead costs to be allocated to functions. These allocations require management to apply
judgement. The costs associated with the Group’s facilities, internal information technology and non‑product
related depreciation and amortisation are allocated to each function based on respective headcount.
97
2. OPERATING RESULTS AND FINANCIAL PERFORMANCE NOTES
this section focuses on the operating results and financial performance of the Group.
it includes disclosures related to revenue and its recognition during the period, breakdowns of selected
costs, segment reporting, other income, and a reconciliation of profit before tax to operating cash flows.
2.1 Revenue
Software
Services
Hardware
disaggregation of revenue
The Group disaggregates revenue by categories shown in the tables below.
TIMING OF REVENUE RECOGNITION
Point in time
Overtime
REVENUE
Subscription licences
Perpetual licences
Consumption licences
2021
$000
2020
$000
171,513
168,969
4,465
90
5,891
999
176,068
175,859
2021
$000
118,592
57,476
176,068
2021
$000
2020
$000
118,648
57,211
175,859
2020
$000
119,049
113,278
30,442
22,022
35,043
20,610
Total licence revenues (including related support and maintenance)
171,513
168,931
Professional services
Hardware
Total other revenues
Total revenues
Accounting policies
(i) Revenue recognition
4,465
90
4,555
5,930
998
6,928
176,068
175,859
Revenue is recognised upon transfer of control of promised products or services to customers in an amount
that reflects the consideration expected to be received in exchange for those products or services. We enter
into contracts that can include various combinations of products and services, which are generally capable
of being distinct and accounted for as separate performance obligations. Revenue is recognised net of
allowances for returns and any taxes collected from customers, which are subsequently remitted to
governmental authorities.
The timing of revenue recognition may differ from the timing of invoicing to our customers.
98 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
(ii) Nature of products and services
Licences for on‑premises software provide the customer with a right to use the software as it exists when made
available to the customer. Customers may purchase perpetual licences or subscribe to licences for on‑premise
software, which provide customers with the same functionality and differ mainly in the duration over which
the customer benefits from the software. Revenue from distinct on‑premises licenses are recognised upfront
at the point in time when the software is made available to the customer, and in the case of renewals, when
the original period ends and the additional period has started on the basis that this is the date from which the
customer can use and benefit from the renewal.
Subscription licencing agreements are generally combined with support and maintenance, which conveys
rights to unspecified upgrades released over the contract period and support and maintenance to help
customers deploy and use products more efficiently. On‑premises licenses are considered distinct
performance obligations when sold with support and maintenance.
Revenue allocated to support and maintenance is recognised rateably over the contract period as customers
simultaneously consume and receive the benefits, given that support and maintenance comprises distinct
performance obligations that are satisfied over time.
For consumption licences, the customer is charged based on the volume of data processed or under
management in each licence period. Customers are charged on a tiered “cost per gigabyte” basis, typically
with minimum annual volume/revenue commitments.
Where such consumption licences are for a right to use software, and there is a fixed minimum commitment, a
portion of the contract value related to the sale of the licence is recognised when the licence is made available
to the customers, with the portion related to support and maintenance recognised over time. Any overage
charges are recognised when the usage occurs, as this corresponds directly with the value to the customer of
Nuix’s performance completed to date.
Where such consumption licences are for a right to access software, generally the case for consumption
licences related to our SaaS offering Discover SaaS, revenue is recognised over time. This is because the
obligation to provide a SaaS service is determined to be a series of distinct service periods, and allocation of
the fees earned to each distinct service period based on the customer’s usage each period would reasonably
reflect the fees to which Nuix expect to be entitled for providing the SaaS during that period.
A licence is a right to access software where:
• the contract requires, or the customer reasonably expects, that the entity will undertake activities that
significantly affect the IP to which the customer has rights;
• the rights granted by the licence directly expose the customer to any positive or negative effects of the
entity’s activities that significantly affect the IP; and
• those activities do not result in the transfer of a good or a service to the customer as those activities occur.
(iii) Support and maintenance revenue
Support and maintenance services are either bundled into licensing arrangements or sold separately
to customers.
Where these services are bundled the Group allocates the transaction price to support and maintenance
performance obligations based on their relative standalone selling price. We determine standalone selling price by
considering multiple factors including but not limited to prices we charge for similar offerings, market conditions,
competitive landscape and pricing practices. Priority is placed on observable pricing where available. Support
and maintenance services are provided over the contractual period and accordingly are recognised over time.
(iv) Professional services revenue
Professional services revenue mainly consists of fees charged for consultancy and training service.
Revenue from a contract to provide consulting and training services is recognised over time as the
consulting and training is performed.
99
(v) Sale of goods
The Group on occasion will provide 3rd Party Software and Hardware to a customer. Revenue from the sale of
these goods is recognised at the point of delivery as this corresponds to the transfer of control of the goods to
the customer.
(vi) Costs of obtaining a customer contract
Incremental costs associated with acquiring a customer contract, such as sales commissions, are generally
required to be recognised as an asset and amortised over a period that corresponds with the period of benefit.
An assessment of commissions paid by the Group was performed in connection with the sale of software
products. As a practical expedient, Nuix generally recognises the commissions as an expense when incurred
given the amortisation period of any capitalised amount would be recognised in one year or less. This is a
result of license revenue being recognised at a point in time and commensurate commission being paid upon
inception of a contract. Consequently, under current arrangements costs of obtaining a contract are expensed
in the period incurred.
(vii) Sales through partners
Where the Group uses partners, the Group must assess whether its customer is the partner or the end user.
Where the end user is the customer, revenue is recognised for the consideration paid by the end user with any
commission retained by the partner recognised as commission expense within costs of goods sold. Where the
partner is the customer, revenue is recognised at the net (of commission) amount received.
(viii) Contract balances and other receivables
Timing of revenue recognition may differ from the timing of invoicing to customers. We record an unbilled
revenue when revenue is recognised prior to invoicing, or deferred revenue when revenue is recognised
subsequent to payment being received or due. For multi‑year agreements, we generally invoice customers
annually at the beginning of each annual coverage period. We record a receivable related to revenue
recognised for multi‑year on‑premises licences as we have an unconditional right to invoice and receive
payment in the future related to those licences.
Deferred revenue comprises mainly unearned revenue related to support and maintenance obligations, cloud
services (Nuix hosted SaaS services), and revenues from subscription licences where Nuix presently have billed
customers, but the customer can only begin to benefit from the licence post balance date.
Payment terms and conditions vary by contract type, although terms generally include a requirement of
payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing
of invoicing, we have determined our contracts generally do not include a significant financing component.
The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of
purchasing our products and services, not to receive financing from our customers or to provide customers
with financing. An example of providing such simplified and predictable ways of purchasing our product and
services include multi‑year on‑premises licences that are invoiced annually, with revenue recognised up front.
Significant judgements and assumptions
Determination of contract term
For licences to use our software, determining the non‑cancellable term of a contract with a customer can
require significant judgement. Given a substantial portion of our contracting is with governmental agencies,
and the varied nature of our contracting with customers, interpretation of termination clauses at the inception
of the contract requires judgement. If a contract term is determined to be non‑cancellable for a longer period,
a higher amount of revenue is likely to be recognised upfront; whereas a contract term that is determined to
be non‑cancellable for a shorter period, a lower amount of revenue is likely to be recognised upfront.
100 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
Contracts with multiple performance obligations
The Group enters into contracts with its customers that can include promises to transfer multiple performance
obligations. A promised good or service must be distinct to be accounted for as a separate performance
obligation. For software license contracts, there is a combination of goods and services that include software
licensing, software maintenance and support services which are generally treated as separate performance
obligations on the basis that the customers can benefit from them separately (or with other rights that they
have), and they are separately identifiable in the contract.
Judgement has been exercised in estimating the standalone selling price for software licences with bundled
support and maintenance. To estimate the standalone selling prices for the software licenses and bundled
support and maintenance, Nuix considers available observable inputs, such as the support and maintenance
charges where there is no bundling, including adjustments to these observable inputs to reflect differences
in the licensing arrangements, market conditions, competitive landscape and pricing practices.
Recognition of revenue on sales made through partners
Where the Group transacts with customers through partners, we are required to assess whether the
partner is:
• our customer – in which case, Nuix will recognise the net consideration receivable from the partner as
revenue; or
• an agent, and the end customers are Nuix’s customers, in which case Nuix will recognise the gross
consideration paid by the end customer as revenue, with the partner’s fee usually recognised as a cost.
Nuix sells through partners which includes entities that are referred to by Nuix as resellers and distributors.
Nuix’s partners help to extend coverage and capacity of Nuix’s distribution network. The flagship program for
Nuix partners is known as the Partner Connect Program, which involves the tiering of partners to deliver a
strategic focus by Nuix on high revenue generating partners and an efficient support framework for those
with less sales frequency and volume. A reseller is an intermediary that acts on behalf of Nuix and sells Nuix
software to third parties. A distributor also sells Nuix software to third parties, however the distributor may
also appoint sub‑distributors or agents to market and sell Nuix products on their behalf. There are a number
of other types of organisations that Nuix considers to be partners that do not support indirect sales in the
same way as a reseller or distributor. These partnerships include advisories and service providers, integrations
partners, authorised training partners, original equipment manufacturing (OEM) partners and
transactional resellers.
Nuix has concluded that it is only through reseller partners, that the partners do not obtain control of the
goods and services that are provided by Nuix to end customers as part of that sales channel. In relation to
sales of licences to Nuix software, resellers are required to provide Nuix with an order from an end customer
and Nuix has the unilateral ability to decline such an order form. On the basis that the licence to an end
customer is generated only on acceptance by Nuix of such an order form, and that the licence and associated
support and maintenance is provided directly to the end customer, Nuix has concluded that the end customer
is its customer, and the reseller is acting as an agent in these arrangements. In these instances, Nuix applies
judgment to determine the consideration to which it is entitled using all relevant facts and circumstances that
are available.
For all other sales made through partners (e.g. advisories, distributors and original equipment manufacturing
partners), Nuix have concluded that the partners take control of the licence and related support and
maintenance, and as a result those partners are Nuix’s customers in those arrangements.
2.2 Segment information
The Group manages its operations as a single business operation and there are no parts of the Group that
qualify as operating segments under AASB 8 Operating Segments. The CEO (Chief Operating Decision Maker
or “CODM”) assesses the financial performance of the Group on an integrated basis only and accordingly,
the Group is managed on the basis of a single segment. Information presented to the CODM on a monthly
basis is categorised by type of revenue as provided below.
101
Further, earnings before interest, tax and depreciation and amortisation (EBITDA) is used to assess the
performance of the business.
Segment performance:
CONTINUING OPERATIONS
Software
Services
Hardware
Total revenue
2021
$000
2020
$000
171,513
168,969
4,465
90
5,891
999
176,068
175,859
In general, a large amount of revenue is generated by customers that are global, from transactions that cross
multiple countries and where the source of revenue can be unrelated to the location of the users accessing the
software. Accordingly, the Group is managed as a single segment.
Reconciliation of segment EBITDA to the net profit after tax is as follows:
EBITDA
Interest expense
Foreign exchange gains and losses
Depreciation and amortisation
Income tax benefit/(expense)
Net (loss)/profit after tax
Geographic information
2021
$000
30,520
(1,393)
(2,015)
(31,072)
2,554
(1,406)
2020
$000
62,931
(1,859)
(250)
(28,400)
(8,835)
23,587
The amounts for revenue by region in the following table are based on the invoicing location of the customer.
Revenue generated by location of customer:
Asia Pacific
Americas
Europe, Middle East and Africa (EMEA)
Non‑current assets by geographic location:
Asia Pacific
Americas
Europe, Middle East and Africa (EMEA)
2021
$000
29,519
92,348
54,201
2020
$000
28,749
97,556
49,554
176,068
175,859
2021
$000
121,272
99,604
2,292
2020
$000
112,430
108,424
1,070
223,168
221,924
102 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
2.3 Profit for the year
The profit for the year has been arrived at after charging the following items:
Finance costs
Other losses
2021
$000
1,393
2020
$000
1,859
Net realised and unrealised foreign exchange loss
(2,015)
(250)
Expenses (included in general and administration)
Offer costs46
Corporate action/trade sale47
Listing fees
Bad debts expense
Low value/short‑term leases
Depreciation and amortisation (recognised across functions)
Sales and distribution
Research and development
General and administration
2.4 Other income
Government grant income
Other income
32,277
2,637
1,014
2,215
106
2,615
27,157
1,300
2021
$000
1,086
74
1,160
–
–
–
1,709
372
2,887
24,626
887
2020
$000
974
37
1,011
Government grants recognised as other income for the current financial year relates to benefits received
under the Research and Development Tax Incentive regime in excess of the statutory income tax rate.
Accounting policies – government grants
Grants from the government are recognised where there is a reasonable assurance that the grant will be
received and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary
to match them with the costs that they are intended to compensate.
Government grants relating to intangible assets are included in non‑current liabilities as deferred income
and they are credited to profit or loss on a straight‑line basis over the expected lives of the related assets.
Allowances under the Australian Research and Development Tax Incentive regime are accounted for as
a tax credit, except for the incremental benefit above the statutory income tax rate which is accounted
for as a government grant.
46 The total costs related to the offer were $45,409,000, of which $13,132,000 ($9,192,000, net of related tax impact) related to the issue of new shares by the
Company and are offset against equity raised in the offer. The remaining $32,277,000 ($22,593,000, net of related tax impact) relates to the sale of existing
shares and is recognised as an expense within General and Administration, with the related tax benefit recognised in profit and loss.
47 Relates to one-off costs of a sale process explored by Nuix Limited as an alternative to the Offer.
103
2021
$000
1,393
1,393
2020
$000
1,859
1,859
2.5 Finance costs
Interest expense
Accounting policies – finance costs
Interest expense is recognised using the effective interest method. The ‘effective interest rate’ is the rate
that exactly discounts estimated future cash payments through the expected life of a financial liability to the
amortised cost of the financial liability.
2.6 Reconciliation of cash flows from operating activities
Cash flows from operating activities
(Loss)/profit for the year (before income tax)
(3,961)
32,422
2021
$000
2020
$000
Non-cash flows in (loss)/profit:
Depreciation
Amortisation of intangible assets
Amortisation of capitalised borrowing costs
Bad debts expense
Share‑based payment expense
Net exchange rate differences
Fixed assets write‑off
Changes in assets and liabilities:
4,567
26,506
69
2,225
4,627
1,687
–
5,048
23,351
–
1,709
685
748
197
Increase in trade and other receivables
(15,884)
(16,405)
(Increase)/decrease in deferred tax asset
Increase in other current assets
(Decrease)/increase in trade and other payables
(Decrease)/increase in deferred revenue
Increase in employee benefits provisions
Decrease in current tax liabilities
Increase in deferred tax liabilities
Increase in provision for make good
381
(4,310)
(3,035)
(3,073)
1,542
(377)
(165)
2
2,101
(384)
1,458
8,308
2,903
(10,015)
6,431
1
Net cash from operating activities
10,801
58,558
104 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
2.7 Earnings per share
(Loss)/profit for the year ($’000)
2021
$000
2020
$000
(1,406)
23,587
Basic weighted average number of ordinary shares
295,123,838
265,400,633
Basic earnings per share (cents)
(Loss)/Profit for the year ($’000)
(0.00)
0.09
(1,406)
23,587
Basic weighted average number of ordinary shares
295,123,838
265,400,633
Shares issuable in relation to equity‑based compensation scheme
18,519,92048
36,499,547
Effect of share options and performance rights
Antidilutive49
–
Diluted weighted average number of ordinary shares
295,123,838
301,900,180
Diluted earnings per share (cents)
(0.00)
0.08
Accounting policies – earnings per share
Basic earnings per share is calculated by dividing:
• profit attributable to owners, excluding any costs of servicing equity other than ordinary shares
• by the weighted average number of ordinary shares outstanding during the financial year, excluding any
treasury shares.
Diluted earnings per share adjusts amounts used to compute basic earnings per share to take into account:
• the after‑tax effect of interest/financing costs associated with dilutive potential ordinary shares, and
• the weighted average number of additional ordinary shares that would have been outstanding assuming
the conversion of all dilutive potential ordinary shares.
48 Calculated as the gross shares issuable under option (i.e. not calculated using the treasury method).
49 In the year ended 30 June 2021, the conversion of the options and performance rights on issue would reduce the loss per share.
Potential ordinary shares are ‘antidilutive’ when their conversion to ordinary shares would decrease loss per share from continuing operations.
The calculation of diluted earnings per share does not assume conversion, exercise, or other issue of potential ordinary shares that would have
an antidilutive effect on earnings per share.
As a result, the effect of share options and performance rights on diluted earnings per share is considered to be ‘antidilutive’ in the year ended 30 June 2021.
105
3. TAXATION OF OUR GLOBAL OPERATIONS
this section focuses on the taxation of our global operations.
it includes disclosures related to the income tax expense recognised from both current and deferred
taxes, a reconciliation of the effective tax rate for the group, and breakdowns for the deferred tax assets
and liabilities of the group.
the note also includes disclosures of significant judgements and uncertainties related to our tax positions
3.1 Income tax (benefit)/expense
Current tax
Current tax on profits for the year
Total current tax expense
Deferred income tax
Increase in deferred tax assets
Increase in deferred tax liabilities
Total deferred tax (benefit)/expense
Income tax (benefit)/expense
3.2 Reconciliation of effective tax rate
(Loss)/profit before income tax expense
Tax at the Australian tax rate of 30% (2020: 30%)
Tax effect of amounts which are not deductible (taxable) in calculating
taxable income:
Entertainment
Share‑based payments
Difference in overseas tax rates
Benefit of Australian R&D tax credit amortised to other income
Benefit of United States R&D tax credit recognised in income tax expense
Others
Income tax (benefit)/expense
2021
$000
2020
$000
5,039
5,039
(4,727)
(2,866)
(7,593)
(2,554)
2021
$000
(3,960)
(1,188)
7
1,388
(1,121)
(326)
(660)
(654)
4,724
4,724
(1,223)
5,334
4,111
8,835
2020
$000
32,422
9,727
48
150
(659)
(303)
(119)
(9)
(2,554)
8,835
106 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
3.3 Deferred tax balances
deferred tax assets
Research and development tax credit to carry forward
2021
$000
2020
$000
20,314
19,038
Employee benefits
Deferred revenue
Lease liabilities
Tax losses
Property and equipment
s40‑880 “black hole” deductions related to IPO costs
Accruals and provisions
Others
Total deferred tax assets
Set‑off deferred tax liabilities pursuant to set‑off provisions
Net deferred tax assets
deferred tax liabilities
Intellectual property
Right‑of‑use assets
Unbilled revenues
Others
Total deferred tax liabilities
Set‑off deferred tax assets pursuant to set‑off provisions
Net deferred tax liabilities
1,374
6,193
2,794
820
–
12,106
1,207
1,858
46,666
(41,441)
5,225
2021
$000
39,136
2,220
1,152
1,400
43,908
(41,441)
2,467
1,317
9,823
3,697
22
244
–
525
776
35,442
(34,943)
499
2020
$000
35,374
3,127
815
961
40,277
(34,943)
5,334
Except for the recognition $3,939,000 of the deferred tax asset related to offer costs being directly in equity,
all movements in deferred taxes were recognised in profit and loss.
3.4 Current tax liabilities
Opening balance
Current income tax provision (net of tax credits)
Income tax payments
Prior year adjustments
Foreign exchange difference
Closing balance
2021
$000
327
454
(195)
(47)
32
571
2020
$000
411
332
(419)
–
3
327
107
Accounting policies – income tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent
that it relates to a business combination, or items recognised directly in equity or other comprehensive income.
i. Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax
payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects
uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted
at the reporting date. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
ii. Deferred tax
Deferred tax is recognised in respect of the temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is
not recognised for:
• Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss;
• Temporary differences related to investments in subsidiaries, associates and joint arrangements to the
extent that the Group is able to control the timing of the reversal of the temporary differences and it is
probable that they will not reverse in the foreseeable future; and
• Taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which they
can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary
differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset
in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered,
based on the business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be
realised; such reductions are reversed when the probability of future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that
it has become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they
reverse, using tax rates that are expected to be applied to temporary differences when they reverse, using
tax rates enacted or substantively enacted at the reporting date, and reflects an assessment of uncertain tax
positions taken.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which
the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority.
iii. Accounting for Investment Tax Credits
The accounting for an Investment Tax Credit (ITCs) is dependent upon whether the arrangement is more akin
to a credit received for investment in a certain area, or a rather reduction in an applicable tax rate. Where an
ITC is the former, it is treated as a government grant (with the relevant benefit amortised over the period
necessary to match the benefits with the costs that they are intended to compensate), and where it is the latter,
it is treated as a part of current tax expense.
108 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
iv. Uncertainty over income tax treatments
The application of the tax law to a particular transaction or circumstances may be unclear and the acceptance
of the treatment may not be known until the relevant taxation authority undertakes an examination of the tax
treatment adopted or, in the event of a dispute, when a court makes a decision at a future time.
Where there is uncertainty over income tax treatments the recognition and measurement of current or
deferred tax assets or liabilities is determined applying Interpretation 23 – Uncertainty Over Income
Tax Treatments.
Each uncertain tax treatment is considered separately unless consideration together with one or more other
uncertain tax treatments gives rise to a better prediction of the resolution of the uncertain treatments on
examination by the relevant taxation authority.
Where it is considered probable (more likely than not) that the relevant taxation authority will accept the tax
treatment used or planned to be used in its income tax filings the tax treatment adopted is consistent with
that used or planned treatment in the income tax filings.
In assessing such probability in the recognition and measurement of uncertain tax treatments it is assumed
that the relevant taxation authority will examine amounts it has the right to examine and have full knowledge
of all related information when making those examinations and determining whether or not to accept the tax
treatment in the relevant income tax filings. In the event that the relevant taxation authority will not accept
the tax treatment, the uncertainty of each treatment is measured using either of the following methods:
• The most likely amount – the single most likely amount in a range of possible outcomes, particularly where
the outcome is binary or concentrated on one value; or
• The expected value – the sum of the probability weighted amounts in a range of possible outcomes.
In the event that an uncertain tax treatment affects both current and deferred tax the judgements made in
relation to the uncertain tax treatment are made consistently for current and deferred tax.
Significant judgements and assumptions
Uncertain tax position
The Group is subject to tax in numerous jurisdictions. Significant judgement is required in recognising and
measuring current and deferred tax assets and liabilities as there are transactions in the ordinary course of
business and calculations for which the ultimate tax treatment on examination by a relevant taxation authority
or, in the event of dispute, decision by a court is uncertain.
The Group recognises liabilities based on estimates of whether additional tax will be due. Where the final tax
outcomes of these matters is different from the amount that was initially recognised, such differences will
impact on the results for the year in which the respective income tax and deferred tax assets or provisions in
the year in which such determination is made. The Group recognises tax assets based on forecasts of future
profits against which those assets may be utilised.
The Group recognises and measures uncertain tax treatments in accordance with the policy stated above.
In the current and prior periods, the Group has exercised judgement in recognising and measuring the tax
benefit of Research and Development (‘R&D’) tax offsets available under Australian tax legislation relating to
eligible R&D expenditure incurred on eligible overseas development activities in excess of expenditure
incurred on related eligible core Australian activities. In respect of the Group’s Endpoint project, the relevant
overseas and Australian activities were the subject of an advance overseas finding for the years ended
30 June 2016 to 30 June 2018. The relevant advance overseas finding continues to be in force.
An advance overseas finding was made that the overseas expenditure on the eligible overseas development
activities would not exceed the Australian portion of the total development expenditure on the eligible R&D
activities as required by section 28C Industry Research and Development Act 1986 over the life of the project
activities. The finding was made on the basis of estimates of actual and anticipated expenditure on the
activities provided by the Group totalling $42,673,000 in the course of the application for an advance overseas
finding in September 2016 for years ended 30 June 2016 to 30 June 2018 only.
109
The Group has exercised judgement in prior years in assessing that it is probable that the relevant taxation
authority (the Australian Tax Office, ‘ATO’) will accept the tax treatment for the Endpoint project for the years
ended 30 June 2016 to 30 June 2018. This judgement that it is probable that the tax treatment for the Endpoint
project for the years ended 30 June 2016 to 30 June 2018 would be accepted has remained consistent in the
preparation of both the current and prior year financial statements.
In the current period the Group has initiated an early engagement request with the ATO to obtain certainty in
relation to the overseas development expenditure on the Endpoint project for the years ended 30 June 2016 to
30 June 2019.
The Group has further exercised judgement that the core Australian activities approved under the advance
overseas finding were effectively completed during the year ended 30 June 2019. As such the Group will not be
claiming R&D tax offsets for expenditure relating to the Endpoint project in the year ended 30 June 2020 or
later years.
Pending the outcome of such early engagement with the ATO the Group has resolved to amend its filed tax
position for the year ended 30 June 2019 to align the tax return treatment with the financial statement treatment
adopted in the finalisation of the FY2020 financial statements (i.e. tax asset of $1,477,700 in relation to FY2019
was not recognised in the FY2020 financial statements), and as presented in the Interim Financial Report for
the half year ended 31 December 2020. The tax treatment applied in the anticipated filed positions for the years
ended 30 June 2019 and 30 June 2020 is consistent with the treatment applied in the preparation of the financial
statements, and management have concluded that it is probable that the tax authority will accept the treatment
applied in the filed positions for the years ended 30 June 2016 through 30 June 2018. Should the treatment applied
in relation to the filed positions for the years ended 30 June 2016 through 30 June 2018 not be accepted, the
financial effect as of 30 June 2021 would be that a deferred tax asset of $3,640,000 and a deferred government
grant revenue balance of $1,826,890 would be derecognised.
The Group has exercised judgement in determining that it is probable that expenditure for years ended
30 June 2019 to 2021 which may be ineligible for R&D tax offset will be accepted by the ATO on examination
with full knowledge of related information, as being eligible for deduction under section 8‑1 ITAA 1997 having
a revenue characterisation.
The Group envisages that the outcome of the early engagement with the ATO will be known during the course
of the year ending 30 June 2022 with any recognition of a deferred tax asset attributable to the R&D tax offsets
arising under the advance overseas finding for the Endpoint project for the year ended 30 June 2019 occurring
in that year.
The recognition of R&D offsets in previous periods in relation to the Endpoint project has not given rise to
underpayment of tax in the current or prior periods.
3.5 Income tax paid by legal entity
Nuix North America Inc.
Nuix Limited
Nuix Technology UK Ltd
Nuix Pte. Ltd.
Nuix Philippines Regional Operating Headquarters
Nuix Ireland Ltd
2021
$000
–
–
168
11
10
6
195
2020
$000
188
–
16
–
13
202
419
110 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
3.6 Franking credits
Franking credits arising from the payment of income tax, by the Company during the years ended 30 June 2021
and 30 June 2020 are represented below.
FRANKING CREDITS ATTRIBUTABLE TO THE COMPANY
Franking credits available for subsequent financial years based on a tax rate
of 30% (2020: 30%)
2021
$000
669
2020
$000
669
The amounts represent the balance of the franking account as at the end of the reporting period, adjusted for:
• franking credits that will arise from the payment of the amount of the provision for income tax;
• franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
(2020: Nil); and
• franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
(2020: Nil).
Franking credits attributable to the Company only are represented above. Additional franking credits will be
received if the distributable profits of the subsidiaries were paid as dividends to the Company.
4. WORKING CAPITAL
this section focuses on the working capital of the group as of balance date, how it has moved during the
year, and how balances are anticipated to be realised in forthcoming periods.
4.1 Cash and cash equivalents
Bank balances
Total cash and cash equivalents
Accounting policies – cash
2021
$000
70,865
70,865
2020
$000
38,539
38,539
Cash comprises cash on hand and demand deposits. Cash equivalents are short‑term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to insignificant risk
of changes in value. Refer to notes 1.10 and 7.1 for accounting policies and disclosures related to financial
instruments respectively.
4.2 Trade and other receivables
Trade receivables
Provision for impairment of trade receivables and unbilled revenue
Unbilled revenue
Other debtors
Total trade and other receivables
2021
$000
20,880
(1,565)
53,838
87
73,241
2020
$000
26,205
(470)
34,110
359
60,204
111
2020
$000
51,218
8,986
60,204
2020
$000
7,340
738
917
8,995
2021
$000
63,767
9,474
73,241
2021
$000
3,601
561
1,176
5,338
Presentation of balances
Current
Non‑current
Total trade and other receivables
Ageing of overdue receivables
1 – 3 months
4 – 6 months
Over 6 months
Accounting policies – trade and other receivables
Trade receivables are recognised initially at the amount of consideration that is unconditional, unless they
contain significant financing components when they are recognised at fair value. They are subsequently
measured at amortised cost using the effective interest method, less loss allowance.
Nuix has contracts with certain customers, for purchases of a subscription licenses that cover a multiyear
period. As the term of a license is a characteristic of the license which is delivered to and controlled by the
customer at a point‑in‑time, the portion of the consideration related to the provision of the license is
recognised as revenue when the license is delivered to the customer, the contractual term of the license
period begins, and the customer can benefit from having the license.
Refer to notes 1.10 and 7.1 for accounting policies and disclosures related to financial instruments respectively.
4.3 Other current assets
Prepayments
Other receivables
Total other current assets
2021
$000
6,057
152
6,209
2020
$000
1,698
199
1,897
112 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
4.4 Trade and other payables
Sundry payables and accrued expenses
Trade payables
Customer deposits
Payroll tax and other statutory liabilities
Indirect taxes payable
Total trade and other payables
2021
$000
9,670
5,846
186
3,686
366
2020
$000
9,498
6,770
453
1,822
2,161
19,754
20,704
Accounting policies – trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of
the financial year, which are unpaid. The amounts are unsecured and are usually paid within 45 days of
recognition. Trade and other payables are presented as current liabilities unless payment is not due within
12 months from the reporting date. Refer to notes 1.10 and 7.1 for accounting policies and disclosures
related to financial instruments respectively.
4.5 Deferred revenue
Customer‑related
Support and maintenance on term licences
Term licences (billed) commencing post balance date
Support and maintenance on perpetual licenses
Perpetual licences commencing post balance date
Processing income
Professional services income
Tax incentive related
Research and development
Total deferred revenue
2021
$000
2020
$000
14,946
7,284
12,561
32
2,138
3,004
14,396
10,000
14,912
6
1,443
1,195
39,965
41,952
5,395
45,360
5,839
47,791
113
2021
$000
2020
$000
41,952
33,017
(80,016)
(61,253)
79,817
(1,788)
39,965
2021
$000
5,839
(1,086)
642
5,395
2021
$000
33,832
11,528
45,360
70,182
6
41,952
2020
$000
5,839
(974)
974
5,839
2020
$000
36,419
11,372
47,791
2021
$000
2020
$000
2,519
359
2,878
237
305
542
2,330
334
2,664
204
303
507
Movements during the year of customer related deferred revenue
Opening balance
Revenue recognised in the current year
Non‑cancellable right to invoice established during the period
Exchange differences
Closing balance
Movements during the year of tax incentive related deferred revenue
Opening balance
Other income recognised in the current year
Additional research and development incentive
Closing balance
Presentation of balances
Current
Non‑current
Total deferred revenue
4.6 Provisions
Current
Annual leave
Long service leave
Non‑current
Long service leave
Make good obligation
114 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
Movements during the year
Annual leave – current
Opening balance
Charged to profit or loss
Closing balance
Long service leave – current
Opening balance
Charged to profit or loss
Closing balance
Total – current
Long service leave – non‑current
Opening balance
Charged to profit or loss
Closing balance
Make good obligation – non‑current
Opening balance
Charged to profit or loss
Closing balance
Total – non‑current
Accounting policies – provisions
2021
$000
2020
$000
2,330
189
2,519
334
25
359
3,094
(764)
2,330
168
166
334
2,878
2,664
204
33
237
303
2
305
542
242
(38)
204
302
1
303
507
The current portion of these liabilities represents the Group’s obligations to which the employee has a current
legal entitlement. These liabilities arise mainly from accrued annual leave entitlements at the reporting date.
A provision has been recognised for employee benefits relating to long service leave for employees. In calculating
the present value of future cash outflows in respect of long service leave, the probability of long service leave
being taken is based upon historical data. The measurement and recognition criteria for employee benefits have
been included in Note 6.1.
Nuix is required to restore the leased office at 1 Market Street in Sydney and Unit 17C in Cork Airport Business
Park in Cork to the original condition at the end of the respective leases. A provision has been recognised for
the present value of the estimated expenditure required to remove any leasehold improvements. These costs
have been capitalised as part of the cost of leasehold improvements and are amortised over the shorter of the
term of the lease or the useful life of the assets.
The discount rate used to determine the present value is a pre‑tax rate that reflects current market assessments
of the time value of money and the risks specific to the liability. The increase in the provision due to the passage
of time is recognised as an interest expense.
115
2021
$000
2020
$000
–
25,531
4.7 Borrowings
Current
Bank loans
A. Secured liabilities
Nuix Limited currently has a Facility Agreement with the Commonwealth Bank of Australia (‘CBA’) which
provides funding to the Company through a Cash Advance Facility. Funding under the Cash Advance Facility is
made available under two tranches, being Tranche A for AUD $40 million, and Tranche B for USD $7.5 million.
Accordingly, the available funding under the facilities as denominated in Australian dollars fluctuates from
period to period, with $50,000,000 being available under these facilities as of 30 June 2021 (2020: $50,943,000).
The Company had fully paid all of these facilities as of 30 June 2021 (2020 utilisation: $25,531,000) and has not
drawn down any additional funding since 30 June 2021 (2020: drawdown $5,697,000 ($4,000,000 USD)).
For the abundance of caution the Company sought (and CBA agreed to) waivers of potential technical or
administrative breaches of the Facility Agreement which may have been subsisting as at 30 June 2021 including
a waiver, until 20 November 2021, of any breaches which may have arisen as a result of the ASIC investigation
previously disclosed to the market and in Note 9.6. This waiver was entered into post the end of the financial
year. The Company had fully paid all of these facilities as of 30 June 2021 and has not drawn down any
additional funding since 30 June 2021.
The Facility Agreement also provides for a bank guarantee facility and CBA has issued a bank guarantee
under that facility in an amount of $746,460 to support Nuix Limited’s obligations under a real property lease.
Nuix Limited’s obligations in respect of that bank guarantee are contingent only.
Nuix Limited continues to review its various financing options and requirements, which may include
restructuring or refinancing its existing facilities, entering into new financing arrangements with a third
party and/or cancelling facilities entirely.
B. Loan covenants
Under the terms of the loan facilities with the bank, the Group is required to comply with the following
financial covenants every quarterly testing date:
• Gross leverage ratio (GLR) does not exceed 1.75:1;
• Interest cover ratio (ICR) is equal to or greater than 3.00:1;
• Obligors own at least 95% of total assets of the Group and are responsible for at least 95% of EBITDA of the
Group during the relevant period.
In addition, the Borrower must hold a minimum cash balance of $10M at all times.
The Group has complied with the financial covenants throughout the reporting periods.
Accounting policies – borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and
the redemption amount is recognised in the consolidated statement of comprehensive income over the period
of the borrowing using the effective interest method. Fees paid on the establishment of loan facilities are
recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will
be drawn down. In this case, the fee is deferred until the draw‑down occurs. To the extent there is no evidence
that it is probable that some or all of the facility will be drawn down, the fee is capitalised and amortised over
the period of the facility to which it relates. Refer to notes 1.10 and 7.1 for accounting policies and disclosures
related to financial instruments respectively.
116 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
5. NON‑CURRENT ASSETS
this section focuses on the non‑current assets of the group including how management identify activities
that are required to be capitalised, how balances have moved during the period, and how we have
assessed whether there has been any impairment of these assets.
Most of the non‑current assets held by Nuix relate to the intellectual property embedded within the
software platform that has been developed (the Nuix platform). this software platform comprises a
powerful, proprietary, data processing engine (called the Nuix Engine) and several software applications.
it has been developed in‑house, shaped by feedback from long‑standing government and private sector
customers, and assists customers in solving many of their complex data challenges.
the Nuix Engine is at the core of the Nuix platform and can be deployed at varying scales, for example,
on a single laptop or across multiple servers depending on the volume of data that require analysis or the
speed at which that analysis is to be delivered. A key part of the processing performed by the Nuix Engine
is to “normalize data at its binary level.” the Nuix Engine uses parallel data processing technology to
process, normalize, index, enrich and analyse data at speed and scale. Currently, the Nuix Engine can
process over 1,000 file types, and this capability is expected to continue growing over time. Customers
can also export data processed by the Nuix Engine to third party applications or further enrich that data,
for example by merging data processed by the Nuix Engine with an existing database, creating an
enhanced data set from which more informed decisions can be made. this is made possible through
open application programming interfaces (or APis) and connectors developed by Nuix.
in addition to the Nuix Engine, the Nuix platform comprises a suite of visualization, analytics and
relationship‑mapping software applications (Nuix Workstation, Nuix investigate, Nuix Endpoint and Nuix
discover) that use the outputs of the Nuix Engine to provide insights and intelligence to customers in many
different investigative and analytical situations. these applications have extended and continue to extend
the number of use cases for the Nuix platform and assist Nuix to grow into new and broader markets.
5.1 Intangible assets
Reconciliation of carrying amount
GOODWILL
$’000
EXTERNAL
LICENSES
$’000
BRAND
$’000
INTELLECTUAL
PROPERTY
$’000
TOTAL
$’000
Carrying amount at 1 July 2019
At cost
Accumulated amortisation & impairment
Balance at 1 July 2019
Year ended 30 June 2020
Balance at 1 July 2019
Effect of movements in exchange rates
– cost
Effect of movements in exchange rates
– accumulated amortisation & impairment
Additions
Disposals
Amortisation
4,422
–
4,422
4,422
121
–
–
–
–
Balance at 30 June 2020
4,543
2,111
(1,884)
227
712
199,408
206,653
–
(37,135)
(39,019)
712
162,273
167,634
227
36
(28)
24
(18)
(113)
128
712
162,273
167,634
18
1,790
1,965
–
–
–
–
66
38
51,039
51,063
(176)
(194)
(23,238)
(23,351)
730
191,754
197,155
117
GOODWILL
$’000
EXTERNAL
LICENSES
$’000
BRAND
$’000
INTELLECTUAL
PROPERTY
$’000
TOTAL
$’000
Carrying amount at 30 June 2020
At cost
4,543
2,153
730
252,061
259,487
Accumulated amortisation & impairment
–
(2,025)
–
(60,307)
(62,332)
Balance at 30 June 2020
4,543
128
730
191,754
197,155
Year ended 30 June 2021
Balance at 1 July 2020
Effect of movements in exchange rates
– cost
Effect of movements in exchange rates
– accumulated amortisation & impairment
Additions
Disposals
Amortisation
Balance at 30 June 2021
4,145
Carrying amount at 30 June 2021
4,543
128
730
191,754
197,155
(398)
(133)
(64)
(8,438)
(9,033)
–
–
–
–
124
126
–
(134)
111
–
–
–
–
1,418
1,542
34,130
34,256
–
–
(26,371)
(26,505)
666
192,493
197,415
At cost
4,145
2,146
666
277,753
284,710
Accumulated amortisation & impairment
–
(2,035)
–
(85,260)
(87,295)
Balance at 30 June 2021
4,145
111
666
192,493
197,415
Accounting policies – intangible assets
i. Development costs recorded as Intellectual Property
Development costs are capitalised where future economic benefits from development of a chosen
alternative for new or improved software products, processes, systems or services are considered
probable, and expenditure in relation to such activities is capable of reliable measurement. Future economic
benefits are considered probable where commercial benefit and technical feasibility have been established.
The expenditure includes all directly attributable costs, including external direct costs of materials, services,
direct labour and overheads.
Other development expenditure that does not meet these criteria, which includes research activities and the
expenditure on maintenance of computer software, is expensed as incurred.
ii. Goodwill
Goodwill acquired in a business combination is measured at cost and subsequently at cost less any impairment
losses. The cost represents the excess of the cost of a business combination over the fair value of the
identifiable assets and liabilities acquired.
iii. External software licenses
External software licenses are carried at historic cost or fair value at the date of acquisition less accumulated
amortisation and impairment losses.
118 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
iv. Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill,
is recognised in profit or loss as it is incurred.
v. Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using
the straight‑line method over their estimated useful lives and is recognised in profit or loss. Goodwill and
brand is not amortised. Intangible assets, other than goodwill and brand, have finite useful lives. Goodwill has
an indefinite useful life
Class of intangible
Depreciation rate (per year)
External software
Intellectual property
33%
10%
Significant judgements and assumptions
Capitalisation and useful life of intangible assets
Management has made judgements in respect of intangible assets when assessing whether an internal project
in the development phase meets the criteria to be capitalised, and on measuring the costs and economic life
attributed to such projects. On acquisition, specific intangible assets are identified and amortised over their
estimated useful lives. The capitalisation of these assets and the related charges are based on judgements
about their value and economic life.
Management has also made judgements and assumptions when assessing the economic life of intangible
assets and the pattern of consumption of the economic benefits embodied in these assets. The economic lives
for intangible assets are estimated at between three and ten years. Amortisation methods, useful lives and
residual values are reviewed at each reporting date and adjusted, if appropriate.
5.2 Property and equipment
Reconciliation of carrying amount
Carrying amount at 1 July 2019
At cost
Accumulated depreciation
Balance at 1 July 2019
Year ended 30 June 2020
Balance at 1 July 2019
Effect of movements in exchange rates – cost
Effect of movements in exchange rates – accumulated
depreciation
Additions
Disposals
Depreciation
Balance at 30 June 2020
OFFICE &
COMPUTER
EQUIPMENT
$’000
FURNITURE &
FIXTURES
$’000
LEASEHOLD
IMPROVE‑
MENT
$’000
TOTAL
$’000
9,805
(8,915)
890
890
162
(137)
895
(3)
(760)
1,047
1,079
3,351
14,235
(590)
489
489
23
(8)
12
–
(188)
328
(2,262)
(11,767)
1,089
2,468
1,089
47
(16)
448
–
(531)
1,037
2,468
232
(161)
1,355
(3)
(1,479)
2,412
119
Carrying amount at 30 June 2020
At cost
Accumulated depreciation
Balance at 30 June 2020
Year ended 30 June 2021
Balance at 1 July 2020
Effect of movements in exchange rates – cost
Effect of movements in exchange rates – accumulated
depreciation
Additions
Disposals
Depreciation
Balance at 30 June 2021
Carrying amount at 30 June 2021
At cost
Accumulated depreciation
Balance at 30 June 2021
OFFICE &
COMPUTER
EQUIPMENT
$’000
FURNITURE &
FIXTURES
$’000
LEASEHOLD
IMPROVE‑
MENT
$’000
TOTAL
$’000
10,859
1,114
3,846
15,819
(9,812)
1,047
1,047
(653)
603
815
–
(712)
1,100
(786)
328
328
(87)
61
–
–
(127)
175
(2,809)
(13,407)
1,037
2,412
1,037
(209)
131
236
–
(452)
743
2,412
(949)
795
1,051
–
(1,291)
2,018
11,021
1,027
3,873
15,921
(9,921)
1,100
(852)
175
(3,130)
(13,903)
743
2,018
Accounting policies – property and equipment
i. Recognition and measurement
Items of property and equipment are measured at cost, which includes capitalised borrowing costs, less
accumulated depreciation and impairment losses. If significant parts of property and equipment have
different useful lives, then they are accounted for as separate items or property and equipment. Any gain
or loss on disposal of an item of property and equipment is recognised in profit and loss.
ii. Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that future economic benefits will flow to
the Group.
iii. Depreciation
The depreciable amount of all plant and equipment is depreciated on a straight‑line basis over the useful lives
commencing from the time that the assets are held ready for use. Depreciation methods, useful lives and
residual values are reviewed at each reporting date and adjusted if appropriate.
Class of plant and equipment
Depreciation rate (per year)
Office and computer equipment
Furniture and fixtures
33%
20%
Leasehold improvements
20% or lease term whichever is shorter
120 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
5.3 Leases
Amounts recognised in the balance sheet
Right‑of‑use assets, net of depreciation
Lease liabilities
Current
Non‑current
Lease liabilities
RIGHT‑OF‑USE ASSETS
Balance at 1 July
Termination of lease, net of accumulated depreciation
Remeasurement of ROU assets
Depreciation expense
Exchange difference
Balance at 30 June
Amounts recognised in profit or loss
Depreciation charge of right‑of‑use assets
Interest expense (included in finance cost)
Expenses relating to short‑term leases
Expenses relating to leases of low‑value assets that are not shown above
as short‑term leases
2021
$000
9,036
2,635
8,727
11,362
2021
$000
2020
$000
12,872
3,704
11,539
15,243
2020
$000
12,872
16,363
(6)
80
(3,276)
(634)
9,036
2021
$000
3,276
573
285
68
4,202
–
–
(3,569)
78
12,872
2020
$000
3,569
727
350
15
4,661
Accounting policies – leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange
for consideration.
(a) As lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates
the consideration in the contract to each lease component on the basis of its relative standalone prices.
However, for the leases of property the Group has elected not to separate non‑lease components and account
for the lease and non‑lease components as a single lease component.
121
The Group recognises a right‑of‑use asset and a lease liability at the lease commencement date. The right‑of‑
use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for
any lease payments made at or before the commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset, less any
lease incentives received.
The right‑of‑use asset is subsequently depreciated using the straight‑line method from the commencement
date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by
the end of the lease term or the cost of the right‑of‑use asset reflects that the Group will exercise a purchase
option. In that case the right‑of‑use asset will be depreciated over the useful life of the underlying asset, which
is determined on the same basis as those of property and equipment. In addition, the right‑of‑use asset is
periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing
rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various financing
sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
• fixed payments, including in substance fixed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate at the
commencement date;
• amounts expected to be payable under a residual value guarantee; and
• the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments
in any optional renewal period if the Group is reasonably certain to exercise an extension option, and
penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when
there is a change in future lease payments arising from a change in an index or rate, if there is a change in the
Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes
its assessment of whether it will exercise a residual value guarantee, if the Group changes its assessment of
whether it will exercise a purchase, extension or termination option or if there is a revised in‑substance fixed
lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right‑of‑use asset or is recorded in profit or loss if the carrying amount of the right‑of‑use asset has been
reduced to zero.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss
over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the
liability for each period.
Right‑of‑use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs, and
• restoration costs.
Right‑of‑use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on
a straight‑line basis. If the Group is reasonably certain to exercise a purchase option, the right‑of‑use asset is
depreciated over the underlying asset’s useful life.
122 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
Short-term leases and leases of low-value assets
The Group has elected not to recognise right‑of‑use assets and lease liabilities for leases of low‑value assets
and short‑term leases, including low‑value IT equipment. The Group recognises the lease payments associated
with these leases as an expense on a straight‑line basis over the lease term.
(b) As a lessor
At inception or on modification of a contract that contains a lease component, the group allocates the
consideration in the contract to each lease component on the basis of their relative stand‑alone prices.
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an
operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers
substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case,
then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group
considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
When the Group is in intermediate lessor, it accounts for its interests in the head lease and the sub‑lease
separately. It assesses the lease classification of a sub‑lease with reference to the right‑of‑use asset arising
from the head lease, not with reference to the underlying asset. If a head lease is a short‑term lease to which
the Group applies the exemption described above, then it classifies the sub‑lease as an operating lease.
If an arrangement contains lease and non‑lease components, then the Group applies IFRS 15 to allocated
consideration in the contract.
5.4 Impairment testing of non‑financial assets
Key assumptions in the Group’s discounted cash flow model
A value‑in‑use discounted cash flow model has been used at 30 June 2021 to determine the recoverable
amount of the CGU, over which impairment testing is required. This model includes projected revenues, gross
margins and expenses which have been determined with reference to historical company experience, industry
data and management’s expectation of the future.
The following inputs and assumptions have been adopted:
Post‑tax discount rate per annum
Pre‑tax discount rate per annum
Long‑term perpetuity growth rate
Sensitivity Analysis
2021
9.8%
14.0%
2.5%
2020
9.2%
13.1%
2.5%
Management has performed sensitivity analysis and assessed reasonable changes for key assumptions and
has not identified any instances that cause the carrying amount of the CGU, over which goodwill is monitored
to exceed its recoverable amount.
123
Accounting policies – impairment testing of non‑financial assets
At each reporting date, the Group reviews the carrying values of its non‑financial assets (other than contract
assets and deferred tax assets) to determine whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows from other assets or CGUs.
Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to
benefit from the synergies of the combination.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of
disposal. Value in use is based on the estimated future cash flows, discounted to their present value using
a pre‑tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of
any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU
on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed
only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have
been determined, net of depreciation or amortization, if no impairment loss had been recognised.
Significant judgements and assumptions
Impairment testing of goodwill
Determining whether goodwill is impaired requires judgement to allocate amounts of goodwill to CGUs and
a combination of judgement and assumptions to estimate recoverable amounts.
Management have determined that goodwill is required to be tested at the CGU that comprises the
consolidated Group, on the basis that this is where goodwill is allocated and monitored.
When Ringtail was acquired from FTI Consulting in September 2018, Nuix obtained control of the Ringtail
platform (now Nuix Discover) which included its software assets and software engineering team. The goodwill
recorded as of 30 June 2021 solely relates to this acquisition. Management concluded as this acquisition
provided a review and analytics frontend to the Nuix Engine, and the software assets acquired were already
deeply integrated with the Nuix Engine with a closely aligned customer proposition to other products from the
Nuix platform, that the synergies from the acquisition would be expected to accrete to the Nuix Group CGU.
As a result, the goodwill from the Ringtail acquisition is allocated to the Nuix Group CGU, and no lower‑level
CGUs have been identified.
The model which is used to estimate the recoverable amount, requires an estimate of the future cash flows
expected to arise from the CGU, and a suitable discount rate in order to calculate the net present value.
124 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
6. REMUNERATION
this section focuses on the expenses recognised in relation to the remuneration of our people, which
includes details of the employee benefit expenses recognised across the profit and loss, judgements
related to accounting for share‑based payments, and summary information for remuneration of Key
Management Personnel (KMPs).
Nuix is committed to attracting and retaining the best people to work in the organisation, including
directors and senior management. A key element in achieving that objective is to ensure that the
Company is able to appropriately remunerate its key people. Nuix has adopted a Remuneration Policy,
the purpose of which is to establish a framework for remuneration that is designed to:
• ensure that coherent remuneration policies and practices are observed which enable the attraction
and retention of directors and management who will create value for Shareholders;
• fairly and responsibly reward directors and senior management having regard to the Company’s
performance, the performance of senior management and the general pay environment; and
• comply with all relevant legal and regulatory provisions.
Refer to the Remuneration Report for detailed information related to KMPs.
6.1 Employee benefit expenses
Wages and salaries
Sales and distribution50
Research and development50
General and administration
Share‑based payment expenses
Sales and distribution
Research and development
General and administration
2021
$000
2020
$000
49,303
8,977
12,806
71,086
1,139
977
2,511
4,627
48,961
4,271
12,456
65,688
452
98
135
685
Accounting policies – employee benefit expenses
i. Short-term obligations
Liabilities for wages and salaries, including non‑monetary benefits and annual leave expected to be settled
within 12 months after the end of the period in which the employees render the related service are recognised
in respect of employees’ services up to the end of the reporting period and are measured at the amounts
expected to be paid when the liabilities are settled.
The liability for annual leave is recognised in the provision for employee benefits. All other short‑term
employee benefit obligations are presented as payables.
50 Wages and salaries expense disclosed for the research and development function (and sales and distribution function to the extent that those employees are
involved in the testing of development activities), presented above are net of amounts required to be capitalised as development costs to intangible assets.
The amount of wages and salaries capitalised as development costs to intangible assets totalled $29,245,000 during the year ended 30 June 2021
(2020: $42,471,000), with the remaining amounts capitalised being directly attributable costs and incremental overheads of development activities.
125
ii. Defined contribution superannuation plans
All obligations for contributions in respect of employees’ defined contribution benefits are recognised as an
expense as the related service is provided.
iii. Other long-term employee benefits obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months after
the end of the period in which the employees render the related service is recognised in the provision for
employee benefits and measured as the present value of expected future payments to be made in respect of
services provided by employees up to the end of the reporting period 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 end of the reporting
period on high‑quality corporate bond rates with terms to maturity and currency that match, as closely as
possible, the estimated cash flows.
iv. Share-based payments
Share‑based compensation benefits are provided to employees via the Nuix Employee Share Option Plans.
The fair values of options granted under the Employee Share Option Plans are recognised as a share‑based
payments expense with a corresponding increase in equity. The total amount to be expensed is determined
by reference to the fair value of the options granted, which includes the impact of any non‑vesting conditions.
Non‑market vesting conditions are included in assumptions about the number of options that are expected to
vest. The total expense is recognised over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At the end of each reporting period, the Company revises estimates of
the number of options that are expected to vest based on the non‑market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
6.2 Share‑based payments
INSTRUMENTS ON ISSUE
Options
Performance Rights
30 JUN 2021
30 JUN 2020
4,827,141
39,654,623
643,273
–
RECONCILIATION
1 JUL 2020 TO
30 JUN 2021
1 JUL 2019 TO
30 JUN 2020
1 JUL 2020 TO
30 JUN 2021
1 JUL 2019 TO
30 JUN 2020
Options
Performance Rights
Opening balance (1 July)
39,654,623
41,154,823
Grant under ESOP
Cancellation
Forfeitures
Grant to NEDs
Grant under LTIP
Performance rights granted
Exercised options
3,315,627
349,800
(38,961,508)
–
(343,186)
(1,850,000)
500,000
671,585
–
(10,000)
–
–
–
–
–
–
–
–
–
–
643,27351
–
Closing balance (30 June)
4,827,141
39,654,623
643,273
51 Performance Rights lapsed in August 2021 upon release of the Preliminary Final Report.
–
–
–
–
–
–
–
–
–
126 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
A. Employee Share option Plan (ESoP)
The establishment of the Nuix Limited ESOP was approved by the Board of Directors on or around fiscal year
2012. The ESOP is designed to align the interests of eligible employees more closely with shareholders and
provide greater motivation and incentive for them to focus on the Company’s longer‑term goals. Under the
plan, participants are granted options which may only be exercised if the Relevant Requirement has been met.
Participation in the plan is at the Board’s discretion and no individual has a contractual right to participate
in the plan or to receive any guaranteed benefits.
Options are granted under the plan for no consideration and carry no dividend or voting rights and are
non‑statutory stock options. Option holders cannot assign, transfer, sell or otherwise deal with the options
granted under the Plan without Board of Directors approval.
The amount of Options that vest depends upon the vesting rules of the respective Plan rules (generally three
to five years). The Options vest in a series of successive equal monthly instalments beginning on the first
anniversary of the vesting commencement date, subject to the option holders’ continued employment.
Once vested, the options became exercisable following the consummation of a Corporate Transaction/
Liquidity Event (as defined in the Plan rules) or a date determined by the Board. However, under some
earlier Plan rules, Options are exercisable for a period of three years once they become fully vested.
Following the exercise of the options, a vested option is converted into one ordinary share within a certain
number of business days as determined by the plan rules. The exercise price of options is determined by
a combination of internal and external valuation methodologies and presided over by the Board.
B. Grant to Non‑Executive directors
Jeffrey Bleich and Iain Lobban were each granted 250,000 options, which vested on IPO completion.
C. Grant under LtiP
On IPO completion the senior management team were granted 671,585 options.
The total number of options that will vest will depend on whether Nuix meets minimum revenue and EBITDA
targets in respect of FY23, as set by the Board. Vesting for 50% of the options will be tested against a revenue
target and vesting for 50% of the options will be tested against an EBITDA target. One third of the vested
options will be exercisable upon the release of the Company’s financial results for each of FY23, FY24
and FY25.
The options that vest will become exercisable at $5.31 per option, subject to Nuix’s Securities Trading Policy.
Options that do not vest will not be exercisable. Options will expire after seven years of the date of the grant
of options. Vesting and exercise of options is also subject to the rules of the Nuix Incentive Plan, including
relating to continuing employment.
d. Fair value of options granted
The assessed fair value at grant date of options granted during the year ended 30 June 2021 ranged between
$1.31 and $2.98. The fair value of each grant at grant date is independently determined using an adjusted form
of the Black Scholes Model that takes into account the exercise price, the term of the option, the impact of
dilution (where material), the share price at grant date and expected price volatility of the underlying share,
the expected dividend yield, the risk‑free interest rate for the term of the option and the correlations and
volatilities of the peer group companies. Options are granted for no consideration and vest over different
periods depending on terms.
127
The model inputs for options granted during the year ended 30 June 2021 included: –
Exercise price
Grant date
Expiry date
30 JUN 2021
ESOP GRANTS
31 DEC 2020
NED OPTIONS
31 DEC 2020
LTIP
31 DEC 2019
ESOP GRANTS
$3.00 & $5.79
$5.01
$5.31
$2.40
18 Nov 2020 &
8 Mar 2021
30 Sep 2020
18 Nov 2020
7 years after
grant date
30 Sep 2023
7 years after
grant date
Generally tied
to employee’s
hire date
7 and 10 years
after grant date
for Australian
and overseas
employees
respectively
Share price fair value
$5.31 & $4.70
$5.31
$5.31
$2.40
Expected price volatility
of the Company’s shares
42.00% for each
grant date
Expected dividend yield
0.00%
Risk‑free interest rate
0.94% & 0.78%
42.00%
0.00%
0.87%
42.00%
0.00%
0.94%
19.55%
0.00%
1.65%
The expected price volatility is based on the historic volatility of comparable listed companies (based on the
remaining life of the options), adjusted for any expected changes to future volatility due to publicly
available information.
E. Fair value of performance rights granted
The assessed fair value at grant date of the performance rights granted during was determined with reference
to the fair value of shares on grant date, adjusted for any expected dividend included in the share price as
of grant date. As there were no dividends expected to be paid between grant date and vesting date no
adjustment to the share price on grant date is required in determining the fair value of performance rights.
As the non‑market performance conditions associated the grant of the performance rights have not been met,
and the service commencement date related to these share‑based payments was within this financial year, the
performance rights have had no impact on profit or loss for the full year.
128 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
F. Reconciliation of outstanding share options
RECONCILIATION
Opening balance (1 July)
Cancellation
Granted during the year
Forfeitures during the year
Exercised options
Outstanding at 30 June
Exercisable at 30 June
1 Jul 2020 to 30 Jun 2021
1 Jul 2019 to 30 Jun 2020
NUMBER OF
OPTIONS
WEIGHTED‑
AVERAGE PRICE
NUMBER OF
OPTIONS
WEIGHTED‑
AVERAGE PRICE
39,654,623
(38,961,508)
4,487,212
(343,186)
(10,000)
4,827,141
$0.84
$0.84
$5.47
$4.50
$5.01
$5.03
41,154,823
–
349,800
(1,850,000)
–
39,654,623
Nil
n/a
36,046,274
$0.84
–
$2.40
$1.40
–
$0.84
$0.70
The options outstanding at 30 June 2021 had an exercise price in the range of $2.00 to $5.79 (2020: weighted
average $0.71) and a weighted‑average contractual life of 5.7 years (2020: 2.0 years).
Accounting policies – share‑based payments
Share‑based compensation benefits are provided to employees via the Nuix Employee Share Option Plans.
The fair values of options granted under the Employee Share Option Plans are recognised as a share‑based
payments expense with a corresponding increase in equity. The total amount to be expensed is determined by
reference to the fair value of the options granted, which includes the impact of any non‑vesting conditions.
Non‑market vesting conditions are included in assumptions about the number of options that are expected to
vest. The total expense is recognised over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At the end of each reporting period, the Company revises estimates of
the number of options that are expected to vest based on the non‑market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
6.3 KMP Remuneration
Short‑term employee benefits
Termination benefits
Post‑employment benefits
Long‑term benefits
Share‑based payment expense
Total
Short‑term employee benefits
2021
$
2020
$
2,425,667
1,883,202
197,083
64,743
39,269
–
76,505
84,699
1,927,356
238,803
4,457,035
2,283,209
These amounts include salaries, fees, cash bonuses and fringe benefits paid to Key Management Personnel
including executive and non‑executive Directors.
Post‑employment benefits
These amounts include the cost of superannuation contributions made during the year.
other long‑term benefits
These amounts represent long service leave and long‑term annual leave benefits accruing during the year.
129
7. FINANCIAL RISKS
the Group has exposure to credit, liquidity and market risks relating to its use of debt and working
capital. this section presents information about the Group’s exposure to each of these risks, and its
objectives, policies and processes for measuring and managing risk.
7.1 Financial risk management
The Group’s activities expose it to a variety of financial risks including:
• market risk (including currency risk and price risk),
• credit risk, and
• liquidity risk.
The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks
to minimise potential adverse effects on the financial performance of the Group. The Group uses different
methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis
in the case of interest rate, foreign exchange and other price risks and ageing analysis for credit risk to
determine market risk. Risk management is carried out by the corporate finance department under policies
approved by the Board of Directors.
The Company has principles for overall risk management covering areas such as foreign exchange risk,
credit risk and derivative financial instruments.
A. Market risk
i. Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to the United States dollar, British Pound and European Euro. Foreign
exchange risk arises from future commercial transactions and recognised assets and liabilities denominated
in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting. Management has set up a policy requiring Group companies to manage their foreign
exchange risk against their functional currency.
The Group’s exposure to foreign currency risk at the end of the reporting period, expressed in thousands
of Australian dollars, was as follows:
Cash and cash equivalents
Trade receivables
Trade payables
2021
USD
EURO
GBP
USD
7,066
3,848
83
14,333
4,212
16,774
1,392
113
612
26
4,266
148
2020
EURO
6,869
614
210
GBP
5,062
405
8
The Group’s exposure to other foreign exchange movements is not considered material.
Sensitivity
As shown in the table above, the Group is primarily exposed to changes in USD exchange rates. The sensitivity
of profit or loss to changes in the exchange rates arises mainly from US‑dollar. Impact on profit after tax of
+/– 10% change of USD against AUD in relation to the financial assets and liabilities recognised on balance
sheet as of 30 June would result in an increase/(decrease) of $1,083,000/($1,083,000) for the fiscal year ended
30 June 2021 (2020: $2,089,000/($2,089,000)).
130 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
B. Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, deposits with
banks and financial institutions and outstanding receivables, contract assets and committed transactions.
For all customers in all instances the Group retains title over the software. A full‑term license key to use the
software is not issued until full payment is received, thus reducing risk of impairment to accounts receivable.
Compliance with credit limits for wholesale customers are regularly monitored by Group Finance. Sales to
retail customers are required to be settled by using major credit cards, mitigating credit risk. There are no
significant concentrations of credit risk, whether through exposure to individual customers, specific industry
sectors and/or regions.
Trade receivables and contract assets
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables and contract assets.
To measure the expected credit losses, trade receivables and contract assets have been grouped based on
shared credit risk characteristics and the days past due. The contract assets relate to unbilled receivables
and have substantially the same risk characteristics as the trade receivables for the same types of contracts.
The Group has therefore concluded that the expected loss rates for trade receivables are a reasonable
approximation of the loss rates for the contract assets.
The expected loss rates are based on the payment profiles of sales over a period of 36 months before
30 June 2020 and the corresponding historical credit losses experienced within this period. The historical
loss rates are adjusted to reflect current and forward‑looking information on macroeconomic factors
affecting the ability of the customers to settle the receivables.
On that basis, the loss allowance as at 30 June 2021 and 30 June 2020, expressed in thousands of Australian
dollars was determined as follows for both trade receivables and contract assets:
2021
2020
BALANCE
’000
EXPECTED
LOSS RATE
LOSS
ALLOWANCE
’000
BALANCE
’000
EXPECTED
LOSS RATE
LOSS
ALLOWANCE
’000
Current
30 days
60 days
90 days
Over 90 days
25,017
2,639
524
435
1,045
0.9%
1.4%
5.4%
11.2%
17.3%
Specific provision52
694
100.0%
218
26,196
3,238
3,129
989
0.1%
1.5%
3.9%
6.9%
1,639
10.6%
–
–
38
28
49
181
694
Total
Unbilled receivables
Total
30,354
44,452
74,806
1,208
35,191
0.8%
357
25,483
0.1%
1,565
60,674
52 As at 30 June 2021 there were $694,000 of specifically identified impaired debtors, that have been provided for but not written off. As at 30 June 2020,
all specifically identified bad debtors had been provided for and written off.
31
50
123
69
173
–
446
24
470
131
The loss allowances for trade receivables and contract assets as at 30 June reconcile to the opening loss
allowances as follows:
As at 1 July
Increase in loss allowance recognised in profit or loss during the year
Receivables written off during the year as uncollectible
Unused amount reversed
Foreign exchange difference
As at 30 June53
2021
$000
470
2,225
(1,058)
–
(72)
1,565
2020
$000
456
1,082
(1,076)
8
–
470
Trade receivables and contract assets are written off where there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor
to engage in a repayment plan with the Group, and a failure to make contractual payments for a period of
greater than 120 days past due. Impairment losses on trade receivables and contract assets are presented as
net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are
credited against the same line item.
C. Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through adequate committed credit facilities (Note 4.7) to meet financial obligations
as and when they fall due. At the end of the reporting period the Group held deposits at call of $70,865,000
(2020: $38,539,000).
Management monitors rolling forecasts of the Group’s liquidity reserve as discussed above and cash and cash
equivalents (Note 4.1) on the basis of forecasted cash flows. This is carried out at a Group level by Corporate
Finance. In addition, the Group’s liquidity management policy involves projecting cash flows in major
currencies and considering the level of liquid assets necessary to meet these and monitoring balance sheet
liquidity ratios against internal requirements.
The below page analyses the Group’s financial liabilities into relevant maturity groupings based on their
contractual maturities for all non‑derivative financial liabilities. The amounts disclosed in the table are the
contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the
impact of discounting is not considered material.
53 As at 30 June 2021 there were $694,000 of specifically identified impaired debtors, that have been provided for but not written off. As at 30 June 2020,
all specifically identified bad debtors had been provided for and written off.
132 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
CONTRACTUAL
MATURITIES OF
FINANCIAL LIABILITIES
LESS THAN 6
MONTHS
$000
6‑12 MONTHS
$000
BETWEEN 1‑3
YEARS
$000
MORE THAN 3
YEARS
$000
TOTAL
$000
CARRYING
AMOUNT
$000
At 30 June 2020
Trade payables
Lease liabilities
Borrowings
At 30 June 2021
Trade payables
Lease liabilities
6,770
2,351
26,555
35,676
5,846
1,630
7,476
–
–
–
1,947
7,971
4,966
–
–
–
1,947
7,971
4,966
–
1,343
1,343
–
6,765
6,765
–
2,567
2,567
6,770
17,235
26,555
50,560
5,846
12,305
18,151
6,770
15,243
25,531
47,544
5,846
11,359
17,205
d. Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement
or for disclosure purposes. The carrying amounts of trade receivables and payables are assumed to
approximate their fair values due to their short‑term nature. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future contractual cash flows at the current market interest rate that
is available to the Group for similar financial instruments. The fair value of borrowings approximates the
carrying amount, as the impact of discounting is not significant.
8. BUSINESS STRUCTURE
this section focuses on the structure of the group, specifically movements in issued capital and reserves.
8.1 Issued capital
MOVEMENTS IN ORDINARY SHARES
2021
SHARES
2020
SHARES
Opening balance
265,400,633
265,400,633
Shares issued on IPO, net of costs
51,904,161
Shares issued on option exercise
Transaction costs arising from issue of
shares, net of tax
10,000
–
–
–
–
2021
$000
104,227
275,611
50
(9,192)
2020
$000
104,227
–
–
–
Closing balance
317,314,794
265,400,633
370,696
104,227
Ordinary shares participate in dividends and the proceeds upon winding up of the Company, proportionately
to the shareholding. At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is
called, otherwise each shareholder has one vote on a show of hands. The issued shares do not have a
par value.
133
Management controls the capital of the Group in order to maintain an appropriate debt to equity ratio,
provide the shareholders with returns and ensure that the Group can fund its operations and continue
as a going concern. The Group’s debt and capital includes ordinary share capital and financial liabilities,
supported by financial assets. There are no externally imposed capital requirements aside from debt
covenants. Management effectively manages the Group’s capital by assessing the Group’s financial risks
and adjusting its capital structure in response to changes in these risks and in the market. These responses
include the management of debt levels, distributions to shareholders and share issues.
8.2 Reserves
Foreign currency translation reserve
The Foreign Currency Translation Reserve comprises all foreign currency differences arising from the
translation of the financial statements of foreign operations.
Share‑based payment reserve
A total of 38,961,408 options were cancelled on completion of the offer for cash (calculated as the Offer
Price less the exercise price of the options). The Company has concluded that on 18 November 2020 when
the Prospectus was published, option holders would consider it being more probable than not that their
share‑based payment arrangements would be cash settled (for an aggregate sum of $175,614,000).
On the basis that part of the service period was outstanding and being performed between 18 November 2020
and listing on 4 December 2020, a portion of the amount for which the options were cancelled ($574,000) is
recognised in profit and loss as a cash settled share‑based payment.
A portion of these option cancellation payments have been made to employees of the group. Through
operation of various legislative requirements for the relevant jurisdictions of their employment, certain of
these payments are subject to PAYG withholding obligations for employee personal taxation arrangements
and other oncosts related to their employment relationship with the Group. These oncosts primarily related
to payroll tax and amounted to $1,778,000 (2020: nil) which has been recognised in profit and loss.
MOVEMENTS IN RESERVES
Share option reserve
As at 1 July
Share‑based payment arrangements
Cancellation of options
As at 30 June
Foreign currency translation reserve
As at 1 July
Foreign currency translation reserve
As at 30 June
Total Reserves
2021
$000
2020
$000
(654)
4,053
(175,040)
(171,641)
5,797
(8,478)
(2,681)
(174,322)
(1,339)
685
–
(654)
3,988
1,809
5,797
5,143
134 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
9. OTHER
this section provides information that is not directly related to specific line items in the financial
statements, including information about dividends, related party transactions, auditor’s remuneration,
events after the reporting date and other statutory information.
9.1 Dividends
During the year the Directors did not declare an interim dividend (2020: Nil) and have not recommended
a final dividend be paid after 30 June 2021 (2020: Nil).
9.2 Related party disclosures
A. Parent entity
The ultimate and parent entity within the Group is Nuix Limited.
B. interests in other entities
Ownership interest
held by the Group
Ownership interest
held by non‑con‑
trolling interests
NAME OF ENTITY
PLACE OF
BUSINESS/
COUNTRY OF
INCORPORATION
2021
2020
2021
2020
PRINCIPAL ACTIVITIES
Nuix North America, Inc
USA
100%
100%
Nuix Ireland Ltd
Ireland
100%
100%
Nuix Pte Ltd
Singapore
100%
100%
Nuix Holding Pty Ltd
Nuix SaleCo Limited
Nuix USG Inc.
Nuix Technology UK Ltd
Australia
Australia
USA
UK
100%
100%
100%
–
100%
100%
100%
100%
Nuix Philippines ROHQ
Philippines
100%
100%
–
–
–
–
–
–
–
–
–
–
–
Sale of Software
Sale of Software
Sale of Software
– Holding Company
– Holding Company
–
–
Sale of Software
Sale of Software
– Business Support
C. option cancellation payments made to Key Management Personnel
Of the 38,961,508 options cancelled during the year, 9,400,000 options were held by KMPs at the time.
The total value of the option cancellation payments made to option holders who were KMPs at the time
of the payment was $34,816,750.
135
d. transactions with other related parties
Macquarie Corporate Holdings
Macquarie Corporate Holdings has an interest of 30% in Nuix (2020: 66%), which allows it to exercise significant
influence over the Group. As a result, Macquarie Corporate Holdings and by extension all related entities of
Macquarie Group Limited, are related parties to Nuix.
Nuix entered into an Underwriting Agreement with Macquarie Capital (Australia) Limited and Morgan Stanley
Australia Limited as Joint Lead Managers in relation to the IPO. The terms of this agreement were that the
Company pay the Joint Lead Managers an underwriting fee of 1.60%, and a management and selling fee of
0.40% of the Offer proceeds. Additionally, the agreement provides that Nuix may also, in its absolute
discretion, pay to one or both of the Joint Lead Managers an incentive fee of up to 1.00% of the total Offer
proceeds. The agreement also provides that the Company has agreed to reimburse the Joint Lead Managers
for costs and expenses incurred by the Joint Lead Managers in relation to the Offer.
Amounts paid to Macquarie Capital (Australia) Limited in relation to the Underwriting Agreement (excluding
any reimbursement for costs and expenses incurred by the Joint Lead Managers in relation to the Offer) are
disclosed below (excluding GST).
2021
$
2020
$
TRANSACTION
OUTSTANDING
BALANCE
TRANSACTION
OUTSTANDING
BALANCE
14,462,295
–
112,083
36,215
–
8
–
–
–
46,296
112,083
676
–
4,705
–
–
Sale and purchases of goods and services
Underwriting fees
Sale of goods to other related parties
Support and maintenance54
Purchase of service from other related
party
Daniel Phillips and David Standen
Nuix has not been charged any fees in relation to the remuneration of Daniel Phillips or David Standen.
Dr. Anthony Castagna – reimbursement of fees for legal advice related to the IPO
In August 2020, each major shareholder (including Blackall Limited) was requested to provide certain
information relevant to potential disclosure in the IPO Prospectus, and their respective capacities to deal
in the shareholder’s Nuix shares both for the IPO and a possible trade sale. Blackall Limited is a New Zealand
incorporated company and legal and beneficial owner at the time of the IPO Prospectus of shares and options
related to Nuix, which are ultimately owned by Delrick Limited, a company limited by guarantee incorporated
in Vanuatu which maintains a retirement fund for Nuix co‑founder Dr Anthony Castagna.
These were complex issues, for which legal advice was obtained by Blackall Limited, that enabled appropriate
disclosure to be made in the IPO Prospectus. It was agreed that these fees totalling $122,022 would be
reimbursed on that basis.
54 Portion of total transaction value from the sale of a subscription licence disclosed in the financial statements for the year ended 30 June 2019 which was
allocated to the support and maintenance performance obligations and is required to be recognised over time.
136 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
9.3 Auditor’s remuneration
PricewaterhouseCoopers Australia (Auditors of the Group)
Audit of financial reports
Audit of financial reports
Other statutory assurance services
Other assurance services
Total for audit and other assurance
Other services
Tax advisory services
Tax compliance services
Total for other non‑audit services
2021
$
2020
$
1,159,158
300,000
3,381,607
42,785
4,540,765
342,785
645,743
14,760
660,503
19,866
8,415
28,281
Total for PricewaterhouseCoopers Australia
5,201,268
371,066
Other auditors and their related network firms
Audit and review of financial statements
Other statutory assurance services
Total services provided by other auditors
68,623
89,832
158,455
75,284
620
75,904
It is the Group’s policy to engage PricewaterhouseCoopers Australia on assignments in addition to their
statutory audit duties where their expertise and experience with the Group are relevant. The other assurance
services in the current year primarily related to PricewaterhouseCoopers role as Investigating Accountant.
137
2021
$000
89,397
205,763
295,160
24,669
2,645
27,314
2020
$000
42,550
198,277
240,827
42,218
12,700
54,918
267,846
185,909
370,696
68,782
(171,632)
267,846
(13,546)
104,227
82,327
(645)
185,909
19,862
9.4 Parent or the Company financial information
Current assets
Non‑current assets
Total assets
Current liabilities
Non‑current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained earnings
Reserves
Total equity
(Loss)/profit for the year
determining the parent entity financial information
The financial information for the parent entity has been prepared on the same basis as the consolidated
financial statements, except in so far as investments in subsidiaries are recognised at cost.
9.5 Contingencies
On the basis that Group has determined the below matters to be contingent liabilities, no liabilities have
been recognised in the financial statements in relation to these matters.
Sheehy litigation
In November 2019, Nuix compromised a claim and formal proceedings brought by former CEO, Eddie Sheehy
under which Nuix agreed to consent to a form of declaration proffered by Mr Sheehy being made by the
Supreme Court of NSW in the form of Judgment. Pursuant to that compromise, the Supreme Court made a
declaration that ‘453,273 options granted over unissued shares of Nuix held by Mr Sheehy are exercisable on
the occurrence of a sale of Nuix’s business’ in accordance with an options agreement between the parties
made in September 2008 (the Judgment). In accordance with the Judgment, Nuix’s options register records
that Mr Sheehy holds 453,273 options, each over one share at an exercise price of $2.00 per option and
without an expiry date.
138 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
Despite the 2019 Judgment, on 23 October 2020 Mr Sheehy commenced proceedings against Nuix in the
Federal Court of Australia alleging that Nuix has acted inconsistently with the terms of the 2008 options
agreement and has acted in an oppressive, unfairly prejudicial, unfairly discriminatory and/or unconscionable
way against him. Mr Sheehy seeks orders to the effect that a sale of business for the purposes of the 2008
options agreement has occurred and that he is now entitled to exercise, and has validly exercised on
27 January 2021, his 453,273 options in return for 22,663,650 shares in Nuix as a result of a 1 for 50 share split
conducted by Nuix in March 2017. Mr Sheehy alleges that it was an implied term of his 2008 options agreement
with Nuix that ‘if the shares of Nuix were split by a particular divisor, upon exercise of the options Mr Sheehy
would be issued with the number of shares set out in the 2008 Option Agreement multiplied by the divisor,
and that the exercise price of the options would be the exercise price divided by the divisor’.
Mr Sheehy seeks declarations as to his alleged entitlements, compensation and damages.
Nuix rejects Mr Sheehy’s claim in its entirety and is defending the proceedings. In particular, Nuix maintains
that the dispute was properly compromised and validly determined by the Judgment issued by the NSW
Supreme Court in 2019 and it is not open for Mr Sheehy to seek to re‑litigate the issue, that Mr Sheehy’s
options were not the subject of the 2017 share split as a result of the express terms of the 2008 option
agreement and that, in any event, no ‘sale of the business’ of the kind contemplated by the parties in
the 2008 options agreement has occurred with the effect that none of Mr Sheehy’s options are presently
exercisable at all.
The matter is not yet scheduled for a hearing.
If Mr Sheehy’s new claim were successful, it may result in an additional 22,210,377 shares becoming issuable
in relation to Nuix’s equity‑based compensation schemes and/or a potential damages payment. The damages
sought by Mr Sheehy have not yet been specified by him. On 27 January 2021, Mr Sheehy purported to exercise
his 453,273 options in respect of 22,663,650 Nuix shares. Nuix does not accept that any options held by Mr Sheehy
are currently exercisable and the purported exercise was declined. While Mr Sheehy has not articulated the
amount of damages or compensation he seeks, if he was to be successful in establishing his claims, damages
are likely to be calculated by reference to the value of the opportunity Mr Sheehy may have had to be issued
with 22,663,650 shares following his 27 January 2021 purported exercise of options versus the value of those
shares at the time of any judgment in the proceedings. If Mr Sheehy was to be unsuccessful in relation to his
claims, he would not be entitled to any payment from Nuix.
ASiC investigation
As previously disclosed to the market (most recently on 2 September 2021), ASIC is conducting an investigation
in relation to potential contraventions of the Corporations Act concerning Nuix. ASIC’s investigations relevantly
concern: 1) the financial statements of Nuix Limited for the period ending 30 June 2018, 30 June 2019 and
30 June 2020; 2) Nuix’s prospectus dated 18 November 2020; and 3) Nuix’s market disclosure in the period
between the period 4 December 2020 to 31 May 2021. Nuix remains confident that it has complied with its
accounting and disclosure obligations.
Nuix has not received any indication of what (if any) action ASIC may take following the conclusion of
any investigation.
139
Class Action Risk
In the period since Nuix was listed on the ASX, it has become aware of various media reports of class actions
law firms considering potential class actions against Nuix in relation to its prospectus or market disclosure.
No claim of that nature has yet been filed and no party has made any contact with Nuix in relation to any
such claim. Nuix remains confident that it has complied with its accounting and disclosure obligations.
Bank guarantee
The Company has obtained a bank guarantee in the amount of $746,460 to secure certain obligations of the
Company that arise under a commercial property lease.
Accounting policies – contingent liabilities
A provision is recognised when:
• there is a legal or constructive obligation arising from past events or, in cases of doubt over the existence
of an obligation (e.g. a court case), when it is more likely than not that a legal or constructive obligation has
arisen from a past event;
• it is more likely than not that there will be an outflow of benefits; and
• the amount can be estimated reliably.
In some cases, it may be disputed whether certain events have occurred or, particularly in the case of
a legal claim, it may be disputed whether there is an obligation even if it is clear that there is a past event.
In such cases of uncertainty, a past event is deemed to give rise to a present obligation if, after taking
account of all available evidence, it is more likely than not that a present obligation exists at the reporting
date. Otherwise, such an obligation is a contingent liability.
Contingent liabilities are not recognised in the statement of financial position except for certain contingent
liabilities that are assumed in a business combination. Contingent liabilities are reviewed continuously to
assess whether an outflow of resources has become probable. If the recognition criteria are met, then a
liability is recognised in the statement of financial position in the period in which the change in
probability occurs.
If a present obligation relates to a past event, the possibility of an outflow is probable and a reliable estimate
can be made, then the obligation is not a contingent liability, but instead is a liability for which a provision is
required to be recognised.
Contingent liabilities are disclosed unless the likelihood of an outflow of resources embodying economic
benefits is remote.
Significant judgements and assumptions
Assessing whether past events give rise to present obligations
In determining the accounting for matters where there is a potential outflow of benefits, the key judgements
and assumptions required to be made relate to whether an obligation has arisen.
Where on balance it has not been determined that it is more likely than not that a present obligation for an
outflow of benefits exists at reporting date, such a liability is a contingent liability.
As contingent liabilities are generally not recognised in the statement of financial position (except for those
assumed in a business combination), concluding that it is not more likely than not that a present obligation
does exist, has the result that no accounting entries are booked and there is no impact reported in profit
or loss.
140 Nuix Limited
Annual Report 2021
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CoNtiNuEd)
9.6 Events after the reporting date
As previously disclosed to the market (most recently on 2 September 2021), Nuix understands that ASIC
is conducting an investigation in relation to potential contraventions of the Corporations Act concerning
Nuix. Nuix understands that ASIC’s investigations relevantly concern: 1) the financial statements of Nuix
Limited for the period ending 30 June 2018, 30 June 2019 and 30 June 2020; 2) Nuix’s prospectus dated
18 November 2020; and 3) Nuix’s market disclosure in the period between the period 4 December 2020 to
31 May 2021. Nuix remains confident that it has complied with its accounting and disclosure obligations.
Nuix has not received any indication of what (if any) action ASIC may take following the conclusion of
any investigation.
As noted in Note 4.7 of this report, for the abundance of caution Nuix has obtained waivers from CBA of
potential technical or administrative breaches of CBA Facility Agreement (which was initially entered into in
2014), including a waiver until 20 November 2021 of any breaches which may have arisen as a result of the
ASIC investigation. This waiver was entered into post the end of the financial year. The Company had fully paid
all of those facilities as of 30 June 2021 and has not drawn down any additional funding since 30 June 2021.
Nuix Limited continues to review its various financing options and requirements, which may include
restructuring or refinancing its existing facilities, entering into new financing arrangements with a third
party and/or cancelling facilities entirely.
On 13 September 2021, the Group announced that it has entered into an agreement to acquire all the shares
in Topos Labs, Inc. (Topos) a developer of Natural Language Processing (NLP) software that helps computer
systems better understand text and spoken words at speed and scale. The initial cost of the acquisition is USD
$5 million on financial close, with the potential for a further USD $20 million comprised of USD $18.5m cash
payable to the sellers of the shares in Topos, and up to USD $1.5 million in performance rights payable over
30 months.
The performance rights are granted to certain Topos team members who join Nuix and continue to provide
services to Nuix during the period between closing and at the time of conversion of the performance rights.
The additional cash consideration is only payable, and the performance rights will only convert into ordinary
shares, on achievement of revenue, staff retention and product development milestones, each of which
relate directly to the further development of the Artificial Intelligence driven NLP platform and its successful
integration into the Nuix environment.
DIRECTORS’ DECLARATION
141
In accordance with a resolution of the Directors of Nuix Limited, we state that:
1. In the opinion of the Directors of Nuix Limited (the ‘Company’):
a) the consolidated financial statements and notes that are set out on pages 88 to 140 and the
Remuneration Report on pages 65 to 87, are 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
performance for the financial year ended on that date; and
ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
2. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the chief executive officer and chief financial officer for the financial year ended 30 June 2021.
3. The Directors draw attention to Note 1.2 to the consolidated financial statements, which includes a
statement of compliance with International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Directors.
SIGNED:
Jeffrey Bleich
Chairman
Sydney, Australia
30 September 2021
142 Nuix Limited
Annual Report 2021
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS
Independent auditor’s report
To the members of Nuix Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Nuix Limited (the Company) and its controlled entities (together
the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its
financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
●
●
●
●
●
●
the consolidated statement of financial position as at 30 June 2021
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
the directors’ declaration.
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
143
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
The principal activities of the Group continue to be the development and distribution of software.
Materiality
Audit scope
Key audit matters
● For the purpose of our audit
we used overall Group
materiality of $1.5 million,
which represents
approximately 5% of the
Group’s profit before tax,
adjusted for the Initial Public
Offering (‘IPO’) related costs.
● We applied this threshold,
together with qualitative
considerations, to determine
the scope of our audit and the
nature, timing and extent of
our audit procedures and to
evaluate the effect of
misstatements on the
financial report as a whole.
● We chose Group profit before
tax because, in our view, it is
the benchmark against which
the performance of the Group
is most commonly measured.
We adjusted for the impact of
IPO-related costs as these are
● Our audit focused on where the
● Amongst other relevant
Group made subjective
judgements; for example,
significant accounting
estimates involving
assumptions and inherently
uncertain future events.
● The Group operates across the
Americas, Europe and the Asia
Pacific region. The Group head
office is based in Sydney.
topics, we communicated the
following key audit matters to
the Audit and Risk
Committee:
− Revenue recognition
− Development costs
recorded as intellectual
property assets
− Accounting for IPO and
related transactions
−
Share based payments
− Claims and contingencies
− Uncertain tax positions
−
Impairment assessment
of intangible assets
● These are further described in
the Key audit matters section
of our report.
144 Nuix Limited
Annual Report 2021
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS (CoNtiNuEd)
infrequently occurring items
impacting profit and loss.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit 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. Further, any commentary on the outcomes of a
particular audit procedure is made in that context.
Key audit matter
Revenue recognition (note 2.1)
The Group used a model to determine stand-alone
prices and allocate revenue for multiple element
contracts and then recognised revenue according to
the accounting policy for each revenue stream.
Revenue recognition for multiple element contracts
was a key audit matter due to its financial significance
and the judgements and assumptions required to
determine the stand-alone selling prices.
Revenue recognition for partners was a key audit
matter due to the judgements and assumptions
required to determine whether the partner or the end
user is the customer for accounting purposes.
How our audit addressed the key audit
matter
We performed the following procedures, amongst
others:
● Developed an understanding of and
evaluated the design effectiveness of the key
systems underpinning each of the material
revenue streams and the relevant business
process controls.
● Evaluated the Group’s standalone selling
price allocation methodology for each
material revenue stream to assess whether
the resulting revenue recognition was in
accordance with Australian Accounting
Standards.
● Tested the mathematical accuracy of the
model used to allocate contractual value for
software licence, maintenance and support
performance obligations and obtained
supporting documents, such as contracts and
software licence agreements for the
assumptions and data used in the model.
● On a sample basis, obtained key supporting
documentation such as contracts and
software agreements, to check that the
transactions occurred and that they were
recognised in accordance with the Group’s
revenue recognition policy.
● For a sample of transactions, obtained
supporting documentation such as contracts
and agreements to evaluate termination
rights which could impact the recognition of
revenue.
145
● With respect to sales made via the reseller
channel, evaluated the appropriateness of
accounting judgements relating to the
determination of revenue by obtaining key
supporting documentation.
● Evaluated whether revenue was recorded in
the correct period by obtaining supporting
documents for a sample of transactions that
were recorded during a defined risk period
before and after year end.
● Evaluated the adequacy of disclosures in
light of the requirements of Australian
Accounting Standards.
Development costs recorded as intellectual
property assets (note 5.1)
Together with PwC IT specialists, we performed the
following procedures, amongst others:
Capitalisation of software development costs was a
key audit matter due to:
●
●
●
the judgement required in determining
which activities undertaken by the Group
under their agile software development
approach are required to be capitalised
the significance of the level of development
costs being capitalised
the judgement required about the allocation
of costs attributable to activities that are
required to be capitalised, a key input of
which is data from key software
development work management systems.
● Assessed the Group’s accounting policies and
methodology using our knowledge of the
business and through discussions with
various stakeholders, including those in the
research & development (R&D) function.
● Developed an understanding of and
evaluated the Group’s relevant R&D
processes and how the R&D team uses key
software development work management
systems to record their activities.
● Developed an understanding of and
evaluated the design effectiveness of the IT
general controls over relevant systems.
● Assessed how the Group calculated the
capitalisation rate for salaries and wages and
other costs including:
- Obtaining an understanding of the
nature of activities, task descriptions
and classifications used in the Group’s
systems
Investigating the nature of activities and
tasks through enquiry of the relevant
product managers
Assessing if the costs meet the criteria in
Australian Accounting Standards for
capitalisation.
-
-
● Assessed the reliability of the system
generated report used by the Group in
determining the capitalisation rate.
146 Nuix Limited
Annual Report 2021
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS (CoNtiNuEd)
● For a sample of salaries and wages data used
to determine the amount of capitalised
software development costs, obtained
relevant pay slips to check the amounts and
classification of the employees as R&D
personnel.
Accounting for IPO and related transactions
(note 2.3, 8.1 & 8.2)
Our procedures over the IPO related transactions
included the following, amongst others:
The Group has recognised IPO transaction costs in
profit and loss and in equity for the year ended 30
June 2021.
During the year, the Group completed an IPO and
became listed on the Australian Stock Exchange
(ASX), raising funds through the issue of ordinary
shares.
At around the same time, certain share options were
cancelled for cash consideration.
Under Australian Accounting Standards, the Group
had to determine when the share options’
classification changed from ‘equity settled’ to ‘cash
settled’ and this required judgement about when the
constructive obligation to deliver cash to option
holders arises. Following this date, the difference
between the unamortised fair value at grant date and
the cash payment is recognised in profit and loss.
The option cancellation also results in withholding tax
and there was judgement needed regarding the
accounting treatment of the withholding tax, as well
as the tax deductibility of these options.
In addition, the Group incurred significant
transaction costs in relation to the IPO, the treatment
of which required judgement regarding the allocation
of these costs between equity and expenses under
Australian Accounting Standards.
The Group’s accounting for the option cancellation
payments and transaction costs related to the IPO was
a key audit matter as they both involved significant
judgement by the Group.
● With respect to the IPO, agreed the cash
received on share issue, and cash payments
made upon cancellation of options to the
Group’s bank statements.
● For a sample of transaction costs, obtained
relevant invoices to assess the allocation of
the IPO transaction costs between expenses
and equity and whether they were accounted
for in accordance with Australian Accounting
Standards.
● Developed an understanding of the Group’s
determination of the date on which the share
options were re-classified as ‘cash settled’
and obtained supporting evidence such as
board minutes, communication to employees
and cancellation agreements with
employees.
● Together with PwC tax experts:
- Developed an understanding of the
withholding tax payments made in
connection with the option cancellation
payments and evaluated whether they
were accounted for appropriately in
accordance with Australian Accounting
Standards.
Evaluated and assessed the Group’s
treatment in respect of deductibility of
the IPO transaction costs and the option
cancellation payments.
-
● Evaluated the adequacy of disclosures in
light of the requirements of Australian
Accounting Standards.
147
Share-based payments (note 6.2)
Accounting for share-based payments was a key audit
matter due to the judgements required in determining
the grant date and key valuation input assumptions.
Together with PwC valuations experts, our procedures
over share-based payments expense included the
following, amongst others:
● We tested the mathematical accuracy of the
model and, assessed the share-based
payment models and key assumptions (such
as volatility rates) used to determine the fair
value of the share-based payment options.
● Assessed whether the share-based payments
were recognised in accordance with
Australian Accounting Standards by
agreeing on a sample basis for grants,
forfeitures and accelerations to award letters
issued and other relevant documents during
the period.
● Evaluated the adequacy of disclosures in
light of the requirements of Australian
Accounting Standards.
Claims and contingencies (note 9.5)
Our procedures over claims and contingencies
included the following, amongst others:
The Sheehy litigation was a key audit matter because
the outcome is uncertain and the Group has used
judgement in determining the appropriate financial
reporting outcome with respect to an unresolved
claim relating to the options held by a former key
management personnel (KMP).
● Obtaining legal confirmations with respect
to any open legal matters.
● Together with a barrister auditor expert:
- made enquiries of management’s
external legal counsel, read position
papers, relevant legal advice and
correspondence
considered possible legal outcomes and
scenarios
assessed the consistency of the
disclosure with the evidence provided by
the Group.
-
-
● Evaluated the adequacy of disclosures in
light of the requirements of Australian
Accounting Standards.
Uncertain tax positions (note 3.4)
The Group’s financial reporting treatment of
uncertain tax positions relating to the Endpoint
project was a key audit matter because of the
judgements applied in assessing the likelihood that
Together with our taxation experts, our procedures
over uncertain tax positions included the following,
amongst others:
• Evaluated the Group’s approach to reflect
the uncertain tax position in the financial
report in light of requirements under
Australian Accounting Standards
148 Nuix Limited
Annual Report 2021
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS (CoNtiNuEd)
the relevant taxation authorities will accept the
position adopted in the Group’s tax filings.
• Evaluated the evidence available including
correspondence with taxation authorities
and enquiries with management and
taxation authorities.
• Evaluated the adequacy of disclosures in
light of the requirements of Australian
Accounting Standards.
Impairment assessment of intangible assets
(note 5.4)
Together with our valuation experts, our procedures
over the impairment of intangible assets included the
following, amongst others:
The Group’s testing of intangible assets for
impairment was a key audit matter, given the
financial significance of intangible assets and the
judgements applied in assessing the forward-looking
assumptions the Group used in their value in use
model.
• Evaluated the Group’s determination of the
cash generating unit (CGU) and the
determination that goodwill is tested within
a single CGU, based on our understanding of
the Group’s business and assessment of how
earnings are monitored and reported
internally.
• Assessed the impairment testing
methodology used by the Group and
evaluated whether it meets the requirements
of Australian Accounting Standards.
Tested the mathematical accuracy of the
Group’s value in use model.
•
• Assessed the Group’s cash flow projections
including consideration of historical
accuracy of management forecasting and
historical results.
• Evaluated the Group’s assumption for
terminal growth rate and discount rate in
comparison to economic and industry
forecasts
• Evaluated the adequacy of disclosures in
light of the requirements of Australian
Accounting Standards.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2021, but does not include the
financial report and our auditor’s report thereon. Prior to the date of this auditor's report, the other
information we obtained included the directors’ report. We expect the remaining other information to
be made available to us after the date of this auditor's report.
149
Our opinion on the financial report does not cover the other information and we do not and will not
express an opinion or any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed 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 other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and use our
professional judgement to determine the appropriate action to take.
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 have 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 the 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 at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor's report.
150 Nuix Limited
Annual Report 2021
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS (CoNtiNuEd)
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 63 to 87 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the remuneration report of Nuix 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.
PricewaterhouseCoopers
Scott Walsh
Partner
Sydney
30 September 2021
SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
The shareholder information set out below is applicable at 23 September 2021.
Number of Equity Security Holders
Number of holders of Ordinary equity securities
Number of holders of unquoted Options
Number of holders of unquoted Performance Rights
151
21,988
14
10
VOTING RIGHTS
The voting rights attaching to each class of equity securities are set out below:
Ordinary shares
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.
Options
Holders of Options do not have any voting rights.
Performance rights
Holders of Performance Rights do not have any voting rights.
DISTRIBUTION OF EQUITY SECURITIES
Analysis of number of holders of quoted Ordinary Shares by size of holding:
RANGE
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
SECURITIES
% NO. OF HOLDERS
249,955,515
32,294,594
11,835,029
18,090,954
5,138,702
78.77
10.18
3.73
5.70
1.62
317,314,794
100.00
71
1,320
1,552
7,154
11,891
21,988
%
0.32
6.00
7.06
32.54
54.08
100.00
152 Nuix Limited
Annual Report 2021
SHAREHOLDER INFORMATION (CoNtiNuEd)
Analysis of number of unquoted Options holders by size of holding:
RANGE
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
SECURITIES
1,459,716
452,920
0
0
0
% NO. OF HOLDERS
76.32
23.68
0.00
0.00
0.00
7
7
0
0
0
%
50.00
50.00
0.00
0.00
0.00
1,912,636
100.00
14
100.00
Analysis of number of unquoted Performance Rights holders by size of holding:
RANGE
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
SECURITIES
% NO. OF HOLDERS
0
342,755
0
0
0
0.00
100.00
0.00
0.00
0.00
342,755
100.00
0
10
0
0
0
10
%
0.00
100.00
0.00
0.00
0.00
100.00
SUBSTANTIAL HOLDERS
Substantial holders as disclosed in substantial holding notices given to the Company are:
NAME
Macquarie Group Limited
UBS Group AG
ECP Asset Management Pty Ltd
MARKETABLE PARCEL
NUMBER
HELD
PERCENTAGE
%
97,635,132
30.77%
20,625,110
15,934,458
6.50%
5.06%
The number of holders holding less than a marketable parcel of Ordinary Shares
3,338
153
TWENTY LARGEST QUOTED EQUITY SECURITY HOLDERS
The names of the twenty largest holders of quoted Ordinary Shares are listed below:
Ordinary shares
NAME
NUMBER HELD
% OF ISSUED
SHARES
1 Macquarie Corporate Holdings Pty Ltd
2
J P Morgan Nominees Australia Pty Limited
3 HSBC Custody Nominees (Australia) Limited
4 BNP Paribas Nominees Pty Ltd
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