Financial Calendar
Content
YEAR ENDED 30 JUNE 2021
Corporate Directory
26 NOVEMBER 2021*
Annual General Meeting
Chairman’s Report
Operating and Financial Review
Directors’ Report
Remuneration Report
28 FEBRUARY 2022*
Half Year Results
Audit Independence Declaration to the Directors
Statement of Profit or Loss and Other Comprehensive Income
YEAR ENDING 30 JUNE 2022
Statement of Cash Flows
Statement of Financial Position
31 AUGUST 2022*
Preliminary full year results
30 SEPTEMBER 2022*
Full year results
Statement of Changes in Equity
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Information
*These dates are subject to change
Corporate Governance Statement
Corporate Directory
Directors
Mr. Uwe Boettcher (Appointed 28 April 2009 – Chairman from 25 June 2009)
Mr. Christopher Fullerton (Appointed 24 April 2018)
Mr. Christopher Pyne (Appointed 30 November 2020)
Mr. Mark Smethurst (Appointed 29 April 2021)
Secretary
Lawrence Gardiner (Appointed 17 August 2004)
Principal Registered
Office in Australia
3 Faulding Street
Symonston ACT 2609
Telephone: +61 2 6163 5588
Facsimile: +61 2 6280 6518
Website: www.xtek.net
Australian Securities
Exchange Listing
Australian Securities Exchange Limited
Level 3, Securities Exchange Centre
530 Collins Street
Melbourne VIC 3000
Australia
Auditor
Hardwickes Chartered Accountants
Hardwickes House
Level 1, 6 Phipps Close
Deakin ACT 2600 Australia
Share Registry
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067 Australia
Solicitors
Minter Ellison
Collins Arch
447 Collins Street
Melbourne VIC 3000 Australia
1
Chairman’s Operating and Financial Review Report
Dear fellow shareholders,
The Group’s performance during the reporting period was unsatisfactory
with a significant trading loss of $3.9m being recorded.
Influencing factors were the end of the delivery of our Small Unmanned
Aerial System contract and the inability to commence full commercial
production of armour plates at the new armour production facility in Adelaide.
This was directly linked to extensive technical delays and cost overruns
encountered in the completion of the XTclaveTM machine and its associated
plant works. Constraints imposed by COVID-19 lockdowns also contributed
to the loss incurred by the Australian operations of the Group.
I can confirm that every effort has been made to review the reasons for the
trading loss, and the Group has developed and subsequently implemented
a range of effective remedial measures to improve the financial performance
of the Group going forward into FY2022. This has included a management
restructure to ensure future conformance with expected management
standards effective from 30 July 2021.
However, a number of strong positives continued to support our business
strategy during the year, including:
•
•
•
•
an ongoing Defence Support Contract for Small Unmanned Aerial
Systems (SUAS),
strong performance of HighCom Armor in the US,
successful commissioning of the ballistic armour plant; and
launch of a series of XTEK developed products on the world market.
Principal Activities
During the year the principal activities of the Group were:
• The supply of products and services to Defence and Law Enforcement agencies throughout Australasia,
• Completion and commissioning of the XTclaveTM ballistic armour factory complex in Adelaide,
• The continued development and commercialisation of XTatlas contextual video and mosaic mapping
technology, and
• Securing a range of new and enhanced products to assist governments in countering the terror threat.
Operating Results
Revenue
FY21 showed a decrease in revenue to $28.3m (FY20: $42.7m) and a loss of $3.97m (FY20: Profit of $0.3m). The
end of the supply of the SUAS contract has meant a decrease of $25.7m in revenue compared to FY20, partially
compensated by an additional revenue of $10.3m for the support of the SUAS fleet now fully delivered and deployed.
Although plans were in place to compensate for that decrease of business, the forecast rise of gross margin from
20% to 29% has been achieved as planned, indicating the successful implementation of the change in the mix of
XTEK’s product offering.
1
Chairman’s Operating and Financial Review Report
Financial Position
XTEK raised $12.2m in August/September 2020 through a successful Placement and a Share Purchase Plan raising
respectively $9.3m and $2.9m. Three institutional investors who entered the register during this capital raise left
within a few months. About 4m shares were acquired by HighCom Global within the acquisition of HighCom Armor
in 2019. HighCom Global has sold these shares on market during the FY. Unfortunately these transactions have put
substantial pressure on the XTEK share price during FY21.
At the end of June, cash was $5.9m with $2.4m invested in Virolens stock (25 machines and 160,000 test cartridges),
the purchase of a Milrem Themis robot system for $0.6m and a $2.2m factory investment and operational ramp up.
A debt facility was negotiated with CBA to fund additional equipment beyond the XTclave to a value of $2.5m.
$1.95m has been drawn down as at 30 June at competitive interest rates.
A Sovereign Industry Capability grant from the Australian Department of Defence for $825K was also awarded for
the industrialisation work in Adelaide.
The simplified Income Statement for the financial year ended 30 June 2021 is outlined below:
FY20
42.7
(34.1)
8.6
20
0.83
0.3
FY20
3.1
37.7
FY21
28.3
(20.2)
8.1
29
(3.04)
(3.97)
FY21
5.9
29.5
Summary Income Statement
Revenue
COGS
Gross profit
Gross margin
EBITDA
Net profit
Other key metrics
Cash balance
Market Capitalisation–30 June
Review of Operations
$m
$m
$m
%
$m
$m
$m
$m
FY19
37.9
(31.0)
6.9
18
0.31
0.2
FY19
5.3
17.5
In-House Development and Manufactured Products
• Ballistic Plates and Helmets produced with XTclave
• Software applications for exploitation of video from SUAS
• Sensor detection equipment and products
Adelaide Manufacturing
The commissioning of our Adelaide Manufacturing Centre (AMC) was
substantially delayed in 2020 due to extensive technical issues and cost
overruns encountered in the completion of the XTclave machine and its
associated plant works. Certification by the relevant authorities for the high-
pressure XTclave system was also delayed due to constraints imposed by
COVID-19
time,
considerable work was done in the factory to commission other equipment,
establish proper production systems, quality systems, IT and ERP systems as
well as recruitment of new production staff and their training.
the reporting period. During
lockdowns during
that
The delays were at substantial cost as the AMC was manned, although to a
minimum level, for an extensive period of time without significant production
coming through. Therefore, costs which should have accounted in Cost of
2
Chairman’s Operating and Financial Review Report
Goods Sold had to be recognised as overhead. However, by the end of April 2021, the AMC was fully commissioned
and ready to deliver ballistic products using the production equipment and staff. New factory management have
already implemented cost down/cost out reviews, and introduced lean production processes, which will provide
beneficial outcomes and ongoing operational savings. A new contract has been signed with Skykraft, a small satellite
manufacturer in Australia and funded activity was undertaken during FY21. Further international connections were
established during FY21.
HighCom Armor
The acquisition of HighCom Armor has been validated by its strong financial
performance, despite global supply chain COVID 19 disruptions, now back under
control. The activity in HighCom Armor has been growing substantially during FY21.
In addition to a full consolidation for the FY compared to only nine months in FY20,
HighCom revenue increased to $14m (FY20: $9.5m). Unrest in some parts of the
US helped focus US Law Enforcement agencies to invest in the protection of their
personnel. Profit after tax for HighCom Armor for FY21 was $0.6m. Adelaide
Manufacturing Centre (AMC) products are now being delivered to HighCom Armor
and sold into the US market. HighCom contributed half of the turnover for the
consolidated entity in FY21.
Actionable Intelligence
XTEK continues to commercialise its suite of XTatlas software applications for 3D Mapping & Modelling (“Scout”)
and Tactical Targeting (“AirWolf”) for sale to Defence Forces globally. XTatlas can be integrated with mounted and
dismounted navigation systems, including in GPS denied environments, and connects sensor data with effectors,
i.e. SUAS video data to direct and indirect fire assets on crewed and uncrewed vehicles.
During the period, XTEK signed a contract with Electro Optic Systems (EOS) to supply an unmanned sensor-to-
shooter application in support of the unmanned equipment systems market. EOS is the prime for the Army’s
C4EDGE program. This contract is part of a larger contract signed with the Commonwealth to demonstrate an
integrated sovereign system to manage and direct the soldier end of the battlefield. It is a very novel approach not
yet addressed in most armies in the West. This system integration approach of XTEK consists in gathering
information with SUAS’s, processing it with XTatlas to get actionable intelligence and forwarding it to weapons as
target indication, possibly carried by an Unmanned Ground Vehicle (UGV).
This complete unmanned chain has been enhanced with the signing of a distribution agreement with a prominent
UGV manufacturer, Milrem Robotics, in Europe, having deployed medium sized UGV in combat and through several
countries like the US, the UK and the Netherlands. The company also signed a collaboration agreement with an
artificial intelligence company to classify equipment and people from video feed and validate their threat to a friendly
force. Reception of this approach by the Australian Army has been very compelling. In FY21 a small number of
XTatlas licenses were sold into the Australian, New Zealand and European markets.
Favourable Defence market themes
FY21 was marked by a consistent increase in budgetary funding for Defence in Australia. Issues of instability in the
Asia Pacific as well as in other part of the world have continued to push investment in new Defence capabilities. In
Australia, recognition of the isolation of the continent in case of conflict in the Asia Pacific has promoted a
requirement for our own sovereign capability, a trend that has been constant for several years already. XTEK has
developed its capabilities and products and systems in response to this trend. It is now well placed to continue its
expansion on that basis.
3
Chairman’s Operating and Financial Review Report
Value Added Reseller Products
Unmanned Systems (SUAS and UGVs):
The end of the Acquisition of the Land 129 Phase 4
contract saw a drastic reduction in revenues in FY21;
this contract had contributed $25m in FY20. However,
SUAS support during FY21 contributed $10m to the
revenue, dampening the effect of the end of the
deliveries of the main contract. XTEK continues to
support the Australian Army’s Wasp SUAS fleet, under
a 5+ year contract with the provision of spare parts and
maintenance services, providing recurring revenues.
Significant opportunities now exist for new SUAS
procurement in Australia and New Zealand in FY22
XTEK continues its 14 years of support to the Australian Army’s fleet of “tEODor” Explosive Ordnance Disposal
robots, and is currently responding to a significant RFT from the Australian Army (Project Land 154 Phase 4) for the
replacement of its fleets of EOD robots. Some of the tendered solutions are the current generation of the in-service
platform. Separately, XTEK purchased a Milrem Robotics Themis UGV during H2 FY21, and has subsequently
undertaken successful demonstrations to the Australian Army. XTEK continues to engage with Defence to support
capability development assessments for Remote and Autonomous Systems, and their integration into future Land
Warfare Capability.
Virolens
Virolens is a rapid non-invasive COVID19 testing device that provides a highly accurate result in 20 seconds using
Artificial Intelligence software. XTEK has been appointed a value-added reseller for Key Options, the master agent
responsible for Virolens in Asia Pacific. Key Options is progressing Therapeutic Goods Administration (TGA)
approval for Virolens’ use in Australia, and other regional approvals for use in New Zealand and the Pacific. The
application has been reviewed by TGA. In addition, a parallel Virolens vs PCR clinical trial is to commence shortly
in Australia, the findings of which will be included in the final TGA submission, along with additional new data from
other global Virolens trials. XTEK is working towards sales commencing in H2 FY2022, subject to receipt of TGA
approval. This highly accurate mass point-of-care screening capability (to airports, events, hospitals, cruise ships,
etc,) will contribute to help the country and economy recover to a new normal.
Outlook
Despite a weak FY21, XTEK is starting FY22 on a sound basis. The manufacturing capacity is now available to
deliver strong and competitive products. New distributors are signed up worldwide and ballistic contracts are sought
across the world. New SUAS contracts are now strongly anticipated.
In July 2021, XTEK commissioned a review of the Group, its processes and people. The report’s recommendations
have largely already been implemented. The retirement of the Managing Director for the last 5 years and the
departure of the Chief Technical Officer will allow our new Group CEO, Mr Scott Basham, to implement a Group
wide restructure and move the enterprise forward.
Savings in operating costs are being sought. New project management processes and enhanced reporting will
streamline the company’s operations. Further appointments in the sales team will expand our reach both
domestically and overseas.
Finally, I would like to acknowledge that it has been a challenging year; I thank my fellow Directors and the staff for
their continued support. I look forward to keeping you updated on the company’s progress over the coming year.
4
Chairman’s Operating and Financial Review Report
Significant changes in the state of affairs
1. On 14 August 2020, the Parent Company raised ~A$9.3 million in capital through a placement and subsequently
issued 13,291,801 new securities to sophisticated investors.
2. On 4 September 2020, the Parent Company raised ~A$ 2.9 million in capital through a Share Purchase Plan
and subsequently issued 4,180,321 new securities to eligible security holders.
3. On 27 November 2020, Mr Ivan Slavich resigned as Director of the Parent Company.
4. On 30 November 2020, Mr Christopher Pyne was appointed as a Director of the Parent Company.
5. On 29 April 2021, Mr Mark Smethurst was appointed as a Director of the Parent Company.
6. On 30 April 2021, Mr Robert Quodling resigned as a Director of the Parent Company.
There were no other significant changes to the state of affairs in financial year 2021.
Matters subsequent to the end of the financial year
1. On 30 July 2021, Mr Philippe Odouard resigned as a Director of the Parent Company.
2. On 31 August 2021, the Company entered into a short-term loan facility to the value of $1m with a related party. The
company does not intend to draw down on this facility.
3. On 23 September 2021, Mr Scott Basham was appointed Chief Executive Officer of the Group.
4. A capital raise is planned to be undertaken during October 2021. The raise will consist of a placement and a
conventional non renounceable entitlements offer to existing shareholders.
Sincerely,
Uwe Boettcher
Chairman
Dated this 30th day of September 2021
5
XTEK Limited and Controlled Entities Directors’ Report
Your Directors present their report on the consolidated entity consisting of XTEK Limited and its controlled entities for
financial year ended 30 June 2021. The information in the preceding operating and financial review forms part of this
Directors’ report for the financial year ended 30 June 2021 and is to be read in conjunction with the following information.
Directors
The following persons were Directors of XTEK Limited during the financial year ending 30 June 2021:
-
-
-
-
Mr. Uwe Boettcher
Mr. Philippe Odouard
Mr. Christopher Fullerton
Mr. Ivan Slavich
Mr. Christopher Pyne
Mr. Robert Quodling
Mr. Mark Smethurst
Directors have been in office since the start of the financial year to the date of this report unless otherwise advised.
Particulars of each Director’s experience and qualifications are set out later in this report.
Significant Events After the Balance Date: COVID-19
The COVID-19 outbreak has impacted the way of life in Australia. This has affected the ability of the Group to continue
operations as usual and has impacted on its operating results. In accordance with national guidelines, the Group has
implemented remote working arrangements in response to government requirements and to ensure the wellbeing and
safety of all employees and visitors.
The Group has determined that there are no going concern risks arising from the impact of the COVID-19 outbreak and has
risk mitigation strategies in place with regards to COVID-19 outbreaks and other ongoing impacts.
Indemnifying Officers or Auditor
During the financial year, the Company has given an indemnity or entered into an agreement to indemnify, or paid or
agreed to pay insurance premiums as follows:
•
The Company has paid a premium of $96,996 to insure the Directors and Officers of the Company. The liabilities
insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against
the officers in their capacity as officers of entities in the Company, and any other payments arising from liabilities
incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from
conduct involving a willful 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.
•
No payment has been made to indemnify Hardwickes Chartered Accountants during or since the financial year.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237
of the Corporations Act 2001.
6
XTEK Limited and Controlled Entities Directors’ Report
Non-audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's
expertise and experience with the Company is important but has not done so during this reporting period.
During the year the following fees were paid or payable for services provided by the auditor of the Parent Company,
Hardwickes Chartered Accountants in 2021 (2020 Hardwickes Chartered Accountants):
Assurance services
2021
$
2020
$
Audit and review of financial reports and other audit work under the
Corporations Act 2001 – Parent company only, see note 9.
68,000
60,000
Auditors Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2021 has been received and can be found on
page 13 of the financial report.
Information relating to the Directors and Company Secretary during the reporting period
Mr. Uwe Boettcher
Experience
Interest in Shares
Director (Non-Executive & Chairman)
Mr. Boettcher is the Principal of the law firm, Boettcher Law, starting his career at the firm
now known as King & Wood Mallesons. He is a Fellow of the Australian and New Zealand
College of Notaries. In 2011 he was appointed as a Foundation Fellow of the Australian
Association of Angel Investors. In 2005 he was appointed a Fellow of the Australian
Institute of Banking and Finance. In 1996/97 he was the Treasurer of the ACT Law Society.
Mr. Boettcher has a special interest in commercialising new and innovative technologies,
investing in them and bringing them to market.
5,740,408 ordinary shares at 30 June 2021
Special Responsibilities
Chairman of the Nomination Committee
Other Directorships
Chairman of the Kord Defence Group of Companies, Chairman of Health-Innovate Pty Ltd,
Chairman of Manuka Corporate Pty Ltd, Chairman of Mineral Carbonation International
Pty Ltd, Director of Lava Blue Limited, Director of Greenmag Group Pty Ltd
Mr. Christopher Fullerton
Director (Non-Executive)
Experience
Interest in Shares
Mr. Fullerton has extensive experience in investment, management and investment
banking and is a qualified chartered accountant. He worked in Hong Kong and Singapore
for 15 years before returning to Australia in 1992. He is an investor in listed equities and
private equity and has been a non-executive director of a number of ASX listed companies.
His current unlisted company directorships cover companies in the property investment
and Agtech sectors.
200,000 ordinary shares at 30 June 2021
Special Responsibilities
Chairman of Finance, Audit and Risk Management Committee, effective 1 July 2018
Other Directorships
Director of Kador Group Holdings Pty Ltd and Kool Global Solutions Pty Ltd
7
XTEK Limited and Controlled Entities Directors’ Report
Mr. Christopher Pyne
Director (Non-Executive)
Experience
Christopher Pyne brings a wealth of commercial, political and global defence experience
to XTEK, having served as a Member for Parliament (MP) for over 25 years, from which
he retired in 2019. Mr. Pyne served as the 54th Australian Defence Minister and was
responsible for delivering the $200 billion build-up of Australia’s military capability, the
largest in Australia’s peacetime history. He assisted in developing the 2016 Defence White
Paper and implementing the Integrated Investment Program.
Mr. Pyne was elected to Parliament in 1993 and served as the Member for Sturt for 26
years. During this time, he was in the Liberal Party Leadership Group for ten years, Leader
of the House of Representatives for six years, and served in Cabinet for six years. Mr.
Pyne has worked to ensure the growth and sustainment of Australia’s Defence Industry,
and thus implemented Australia’s Defence Export Strategy, Defence Industrial Capability
Plan, and the Naval Shipbuilding Plan. He also created the Defence Cooperative
Research Centre, the Centre for Defence Industry Capability, the Defence Innovation Hub,
and the Next Generation Technology Fund. Additionally, he is the driving force behind the
recent establishment of the Australian Space Agency.
Mr. Pyne is the current Chairman of Pyne and Partners and Principal of GC Advisory,
consulting to business in the domain of government and political engagement. Both are
headquartered in Adelaide, South Australia but operate nationally and globally. He is an
Industry Professor in the University of South Australia Business School specialising in
Defence and Space. Before entering Parliament, Mr. Pyne practised as a solicitor at Corrs
Chambers Westgarth and Thomson Geer.
Interest in Shares
nil
Other Directorships
Chairman of Pyne and Partners Pty Ltd, Director of the International Centre for Democratic
Partnerships Pty Ltd, Principal of GC Advisory Pty Ltd.
Mr. Mark Smethurst
Director (Non-Executive)
Experience
Mark Smethurst’s significant Defence experience spans over 35 years in Australian Army,
with 27 years as a Senior Special Forces Officer. He was the Deputy Commander of the
Australian Special Forces. He commanded all the NATO Special Forces in Afghanistan
and was the Deputy Chief of Operations for the US Special Operations Command. Prior
to leaving the Australian Defence Force in early 2017 after over 7 years as a Brigadier, he
was the Head of Preparedness / Director General Joint Force Analysis, responsible for
developing Futures Concepts, Experimentation, Lessons and Preparedness.
Mark is a member of, and Advisor to the Global SOF Foundation and is the Chairman of
the Commando Welfare Trust. Through his other business interests, he is well positioned
to support XTEK both within the Australian and international contexts.
Interest in Shares
72,460 ordinary shares at 30 June 2021
Special Responsibilities
Chairman of the Remuneration Committee, effective 26 August 2021
Other Directorships
Non Executive Director of KORD Group
8
XTEK Limited and Controlled Entities Directors’ Report
Mr. Robert Quodling
Experience
Director (Executive) resigned as a Director on 30 April 2021
Mr. Quodling has extensive experience as a leader and motivator of high performance
commerce teams in the defence and aerospace sectors at the operational and executive
level. His skills have been gained in a diverse range of activities including corporate
governance, corporate planning, financial planning, project management, marketing,
sales and business development. Mr. Quodling as a former Army Officer held a range of
command and operational appointments in the Australian Army between 1975 and 1994.
He was awarded a Conspicuous Service Medal (CSM) for conspicuous service with the
Special Air Service Regiment.
Interest in Shares
537,024 ordinary shares at 30 June 2021
Special Responsibilities
Chief Operating Officer
Other Directorships
Director of Simmersion Holdings Pty Ltd and Asura Marketing Pty Ltd
Mr. Philippe Odouard
Director (Executive) resigned as a Director 30 July 2021
Experience Mr. Odouard has over 27 years in general management of defence related companies in
Australia and overseas. He developed Quickstep, an innovative ASX listed company from
a start up to a leader in composite manufacture and technology with $50m revenue. He
specialises in developing and commercialising new technology in a defence environment
and is a Graduate of the Australian Institute of Company Directors.
890,595 ordinary shares at 30 June 2021
Interest in Shares
Special Responsibilities
Managing Director
Other Directorships
None
Mr. Ivan Slavich
Experience
Director (Non-Executive) resigned as a Director 27 November 2020
Mr. Slavich has over 30 years of senior management and executive experience in the
energy, banking, telecommunications and business consulting arena. He has a proven
track record over numerous years of being an exceptional leader and motivator in
developing and implementing strategic innovations, business process re-engineering and
integration, resulting in substantial improvement of business sales and profitability. He has
held an officer’s rank in the Australian Army Reserve and is a Graduate and Fellow of the
Australian Institute of Company Directors.
Interest in Shares
752,507 ordinary shares at 30 June 2021
Special Responsibilities
Chairman of Human Resources and Remuneration Committee
Other Directorships
Director of Service One Alliance Bank, and Director of Trident Corporate Services.
Mr. Lawrence Gardiner
Experience
Company Secretary (Resigned as Executive Director on 1 August 2016)
Mr. Gardiner served with the Australian Army and specialised in the fields of logistic
management and explosive ordnance disposal operations. In addition to his military
service, Mr. Gardiner also served with the Australian Federal Police (AFP), performing
senior executive roles in the areas of counter terrorist first response and protective
security operations. Mr. Gardiner is a current member of the Australian Institute of
Company Directors.
Interest in Shares
48,403 ordinary shares at 30 June 2021
Special Responsibilities
Corporate Governance
Other Directorships
None
9
XTEK Limited and Controlled Entities Directors’ Report
Meetings of
Directors
Directors’ meetings
Number
eligible to
attend
Number
attended
Finance, Audit and
Risk Management
Committee
Number
eligible to
attend
Number
attended
Nomination
Committee
Remuneration
Committee
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
6
6
4
2
6
5
2
3
3
1
-
3
3
1
3
3
1
-
3
3
1
2
2
2
-
2
2
1
2
2
2
-
2
2
1
Mr Uwe Boettcher
Mr Christopher
Fullerton
Mr Christopher Pyne
Mr Mark Smethurst
Mr Philippe Odouard
Mr Robert Quodling
Mr Ivan Slavich
12
12
6
3
12
10
6
12
12
6
3
12
10
6
6
6
4
2
6
5
2
10
Remuneration Report
Table 1: Benefits and Payments for the Year Ended 30 June 2021
Key
Management
Personnel KMP)
Short-term Benefits
Post-Employment
Benefits
Long-
term
Benefits
Salary,
Fees and
Leave *1
Bonus
Non-
monetary
Benefits
Share
based
Payments
Super-
annuation
Other
LSL*2
Total
Perf.
Related
$
$
$
$
$
$
$
$
%
Mr Uwe
Boettcher
2021
2020
130,000
130,000
Mr Chris
Fullerton
2021
2020
65,000
65,000
Mr Christopher
2021
37,917
Pyne
2020
-
60,000
-
Mr Mark
Smethurst
Mr Philippe
Odouard
2021
2020
2021
2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
90,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
355,700 24,379
28,273
72,161
25,000 11,107
355,700 33,080
27,118
199,775
25,000 11,934
1,283
653,890
Mr Robert
Quodling
2021
2020
166,260 14,908
193,077 14,800
Mr Ivan
Slavich
2021
2020
27,083
65,000
-
-
Mr Lawrence
Gardiner
2021
2020
131,730
8,265
139,994
-
-
-
-
-
-
-
10,292
19,800
17,493
8,000
-
216,953
20,223
5,000
778
253,678
-
-
-
-
-
-
-
-
27,083
65,000
5,034
14,085
8,265
10,849
14,330 10,849
2,110
1,354
169,489
177,376
Mr David
Brooking
2021
2020
198,483
8,917
1,517
180,000 11,160
-
4,763
11,160
19,834
18,160
-
-
6,751
3,757
240,265
224,237
130,000
220,000
-
41%
-
-
-
-
-
-
-
-
-
65,000
65,000
37,917
-
60,000
-
516,620
-
-
-
-
-
-
19%
36%
12%
16%
-
-
8%
12%
6%
10%
Total KMP
2021 1,172,173 56,469
2020 1,128,771 59,040
29,790
27,118
92,250
76,412 27,372
8,861 1,463,327
331,584
77,713 27,783
7,172 1,659,181
* Notes
1.
2.
Salary, fees and leave are per payroll summary or actual invoices received. These payments may vary to contract
due to employee benefits, voluntary salary reductions, additional pay, back pay and annual leave.
Amounts included above for long service leave are movements in accrued entitlements for the relevant twelve-month
period.
11
Remuneration Report
a)
Options Rights Granted as Remuneration
There were no new issues of share options or share performance rights during the FY2020-21 (FY20 nil). Any
share options or share performance rights issued by the parent company have lapsed. During the year no shares
were issued as a result of the exercise of options or share performance rights by staff.
b)
Service Agreements
Remuneration and other terms of employment for the Managing Director, Chief Operating Officer, Company
Secretary, Chief Financial Officer and the other specified executives employed during the period are formalised in
individual service agreements. The major provisions relating to remuneration are set out below.
Mr Scott Basham - Group Chief Executive Officer
• A written employment agreement is in place, salary level effective 23 September 2021.
• Base salary, exclusive of superannuation, to the value of $272,727 per annum.
• Eligibility for Company Long Term Incentive Plan.
• Eligibility for Company Short Term Incentive Plan.
Mr Lawrence Gardiner - Company Secretary
• A written employment agreement is in place, salary level effective 1 July 2020.
• Base salary, exclusive of superannuation, to the value of $175,000 per annum (full time equivalent)
• Eligibility for Company Long Term Incentive Plan
• Eligibility for Company Short Term Incentive Plan
Mr David Brooking - Chief Financial Officer
• A written employment agreement is in place, effective 1 July 2020.
• Base salary, exclusive of superannuation, to the value of $200,000 per annum.
• Eligibility for Company Long Term Incentive Plan.
• Eligibility for Company Short Term Incentive Plan.
This Directors’ Report and Remuneration Report is signed in accordance with a resolution of the Board of Directors.
Uwe Boettcher Chairman
Dated this 30th day of September 2021
12
Auditor’s Independence Declaration
The accompanying notes form part of these financial statements.
13
Consolidated Statement of Profit or Loss and Other
Comprehensive Income for the Year Ended 30 June 2021
Notes
2021
$
2020
$
Changes in inventories of finished goods and work in progress
(20,205,212)
(34,085,386)
Gross profit
8,127,248
8,629,881
Revenue
5(a)
28,332,460
42,715,267
Corporate and administrative expenses
Other income
5(b)
6
353,346
850,647
(12,455,542)
(9,177,850)
Profit/(loss) from operations before income tax
(3,974,948)
302,678
Income tax expenses
-
-
Total comprehensive income/(loss) for the period
(3,974,948)
302,678
The accompanying notes form part of these financial statements.
14
Consolidated Statement of Financial Position
as at 30 June 2021
Notes
2021
$
2020
$
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Goodwill
Property, plant and equipment
Intangibles
Total non-current assets
12
13
14
15
16
17
5,901,223
1,851,007
10,736,212
494,192
18,982,634
1,175,913
11,865,024
352,868
13,393,805
3,057,031
15,372,060
9,036,996
1,604,629
29,070,716
1,288,191
4,664,000
300,012
6,252,203
TOTAL ASSETS
32,376,439
35,322,919
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Provisions
Contract liabilities
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Provisions
Contract liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
18(a)
18(b)
19
20
18(a)
18(b)
19
20
22
30(a)
30(b)
6,157,599
16,548,035
613,340
545,913
34,119
7,350,971
2,242,018
1,339,004
34,064
1,640
3,616,726
10,967,697
21,408,742
45,039,118
(332,790)
(23,297,586)
21,408,742
-
498,813
1,723,292
18,770,140
1,172,701
816,725
54,744
46,951
2,091,121
20,861,261
14,461,658
33,741,882
42,414
(19,322,638)
14,461,658
The accompanying notes form part of these financial statements.
15
Consolidated Statement of Changes in Equity
for the Year Ended 30 June 2021
Issued
capital
(note 22)
$
Equity-
based
payments
reserve
$
Accumulated
losses
$
Foreign
Exchange
valuation
reserve
$
Total Equity
$
Balance at 1 July 2019
Profit / (Loss) for the year
Total income and expense for the period
Issues of ordinary shares during the year
Issue of share capital
Foreign exchange reserve
Transaction costs associated with share
capital
Share based payment reserve
27,312,482
-
-
6,663,012
-
(233,612)
-
-
-
-
-
19,446
8,775
-
(19,625,316)
302,678
302,678
-
-
-
7,695,941
302,678
302,678
-
-
-
-
-
14,193
-
-
6,663,012
14,193
(233,612)
19,446
Balance at 30 June 2020
33,741,882
28,221
(19,322,638)
14,193
14,461,658
Balance at 1 July 2020
33,741,882
28,221
(19,322,638)
Profit / (Loss) for the year
Total income and expense for the
period
Issues of ordinary shares during the year
Issue of share capital
Foreign exchange reserve
Transaction costs associated with share
capital
Share based payment reserve
-
-
12,181,855
-
(884,619)
-
-
-
-
-
-
8,281
(3,974,948)
(3,974,948)
14,193
-
-
14,461,658
(3,974,948)
(3,974,948)
-
-
-
-
-
(383,485)
-
-
12,181,855
(383,485)
(884,619)
8,281
Balance at 30 June 2021
45,039,118
36,502
(23,297,586)
(369,292)
21,408,742
The accompanying notes form part of these financial statements.
16
Statement of Cash Flows for the Year Ended 30 June 2021
Cash flows from/(used in) operating activities
Receipts from customers
43,155,914
52,364,311
Payments to suppliers and employees
(43,399,123)
(56,926,343)
Note
2021
$
2020
$
(243,209)
(4,562,032)
7,370
(50,574)
(286,413)
17,678
(1,015)
(4,545,369)
180,312
429
(171,737)
(790,095)
(781,091)
3,669,643
(233,612)
(421,006)
368,643
(356,825)
3,026,843
(2,299,617)
6,774
5,349,874
3,057,031
Net cash flows (used in)/from operating activities
25
Interest received
Finance costs
Cash flows (used in)/from investing activities
Cash acquired from subsidiary
Proceeds from sale of assets
Payment for intangibles
Payments for equipment
Net cash flows (used in)/from investing activities
Cash flows (used in)/ from financing activities
Proceeds from issue of ordinary shares
Payment of transaction costs associated with issued share capital
22(a)
Repayment of lease liabilities
Proceeds from borrowings
Repayment of loan
-
13,436
68,814
(8,371,651)
(8,358,215)
12,055,642
(884,619)
(600,979)
1,135,619
-
Net cash flows (used in)/from financing activities
11,705,663
Net increase/(decrease) in cash and cash equivalents
Exchange rate impact on cash
Cash and cash equivalents at beginning financial year
Cash and cash equivalents at end of year
12
3,061,035
(216,843)
3,057,031
5,901,223
The accompanying notes form part of these financial statements.
17
Notes to the Financial Statements for the
Year Ended 30 June 2021
The financial report covers XTEK Limited and the Controlled Entities ('the Group'). XTEK Limited and the Controlled Entities
is a for-profit Company limited by shares, incorporated and domiciled in Australia.
Each of the entities within the Group prepare their financial statements based on the currency of the primary economic
environment in which the entity operates (functional currency). The consolidated financial statements are presented in
Australian dollars which is the parent entity’s functional and presentation currency.
The financial report was authorised for issue by the Directors on 30 September 2021. Comparatives are consistent with
prior years, unless otherwise stated.
1
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with the
Australian Accounting Standards and the Corporations Act 2001. Material accounting policies adopted in the
preparation of these financial statements are presented below and have been consistently applied.
These financial statements comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
2
Change in Accounting Policy
No changes in Accounting Policy were made.
3
Summary of Significant Accounting Policies
(a)
Basis for consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of XTEK Limited
and its 100% owned subsidiaries (Simmersion Holdings Pty Limited, XTEK, Inc holder of HighCom Armor
Solutions, Inc). Subsidiaries are entities the parent controls. The parent 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 assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the
Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains
or losses on transactions between group entities are fully eliminated on consolidation. Accounting policies
of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
(b)
Income tax
The income tax expense on revenue for the period is the tax payable on the current period’s taxable income
based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax bases of assets and liabilities and their
carrying amounts in the financial statements, and to unused tax losses. Deferred income tax is provided on
all temporary differences at the statement of financial position date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are
recognised for all taxable differences:
The accompanying notes form part of these financial statements.
18
•
•
except where the deferred income tax liability arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, except where the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused
tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax assets and unused tax
losses can be utilised;
•
•
except where the deferred income tax asset relating to the deductible temporary differences arises from
the initial recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which
the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at all tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted
or substantially enacted at the statement of financial position date.
Income taxes relating to items directly in equity are recognised in equity and not in the Statement of
Comprehensive Income.
(c)
Leases
For any new contracts entered into on or after 1 July 2018, the Entity considers whether a contract is, or
contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an
asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the
Entity assesses whether the contract meets three key evaluations which are whether:
•
•
•
the contract contains an identified asset, which is either explicitly identified in the contract or implicitly
specified by being identified at the time the asset is made available to the Entity
the Entity has the right to obtain substantially all of the economic benefits from use of the identified asset
throughout the period of use, considering its rights within the defined scope of the contract
the Entity has the right to direct the use of the identified asset throughout the period of use. The Entity
assesses whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the
period of use.
At lease commencement date, the Entity recognises a right-of-use asset and a lease liability on the balance
sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease
liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the
asset at the end of the lease, and any lease payments made in advance of the lease commencement date
(net of any incentives received).
The accompanying notes form part of these financial statements.
19
Notes to the Financial Statements for the
Year Ended 30 June 2021
The Entity depreciates the right-of-use assets on a straight-line basis from the lease commencement date
to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Entity
also assesses the right-of-use asset for impairment when such indicators exist.
At the commencement date, the Entity measures the lease liability at the present value of the lease payments
unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or
the Entity’s incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including
in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a
residual value guarantee and payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest.
It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed
payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset,
or profit and loss if the right-of-use asset is already reduced to zero.
The Entity has elected to account for short-term leases and leases of low-value assets using the practical
expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these
are recognised as an expense in profit or loss on a straight-line basis over the lease term.
On the statement of financial position, right-of-use assets have been included in plant and equipment and
lease liabilities have been included in trade and other payables.
(d)
Revenue and other income
Revenue from contracts with customers
The core principle of AASB 15 is that revenue is recognised on a basis that reflects the transfer of promised
goods or services to customers at an amount that reflects the consideration the Group expects to receive in
exchange for those goods or services. Revenue is recognised by applying a five-step model as follows:
1. Identify the contract with the customer
2. Identify the performance obligations
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations
5. Recognise revenue as and when control of the performance obligations is transferred
Specific revenue streams
The revenue recognition policies for the principal revenue streams of the Group are as follows.
The accompanying notes form part of these financial statements.
20
Timing of revenue recognition based on transfer of control of performance obligations
AASB 15 requires revenue from these products to be recognised when the performance obligations to
transfer goods and services have been satisfied. The Group considers that performance obligations are
satisfied when the physical transfer of the goods has occurred as this is when control transfers to the
customer.
Transfer of control to a customer - over time or at a point in time
AASB 15 has specific criteria regarding whether control is transferred over time or at a point in time. The
Group has reviewed its contracts and concluded that the criteria for recognition over time is not met in some
circumstances. In such cases, revenue and related production costs will be recognised at the delivery of
each separate performance obligation instead of over the contract using a single margin.
Deferred income
Deferred income consists of customer deposits received and government grants. Deferred income relating
to customer deposits is not recognised as revenue until such time as the ownership of the goods is
transferred to the customer. In the case of Government grants, grants are recognised in accordance with
the accounting policy outlined in note 3 (u).
(e)
Finance costs
Finance cost includes all interest-related expenses, other than those arising from financial assets at fair
value through profit or loss.
(f)
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (i.e.
an asset that necessarily takes a substantial period of time to get ready for its intended use or sale) are
capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period they occur.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of
funds. XTEK does not currently hold any qualifying assets but, if it did, the borrowing costs directly associated
with this asset would be capitalised (including any other associated costs directly attributable to the
borrowing and temporary investment income earned on the borrowing).
(g)
Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except
where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or
payables in the statement of financial position.
Cash flows in the statement of cash flows are included on a gross basis and the GST component of cash
flows arising from investing and financing activities which is recoverable from, or payable to, the taxation
authority is classified as operating cash flows.
The accompanying notes form part of these financial statements.
21
Notes to the Financial Statements for the
Year Ended 30 June 2021
(i)
Property, plant and equipment
Cost and valuation
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment in value.
Depreciation
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows.
Major depreciation periods typically are:
•
plant and equipment 3 - 15 years
Impairment
The carrying values of property, plant and equipment are reviewed for impairment when events or changes
in the circumstances indicate the carrying value may not be recoverable. If any such indication exists and
where
the carrying values exceed the estimated recoverable amount, the assets are written down to their
recoverable amount. The recoverable amount of plant and equipment is the greater of fair value less costs
to sell and value in use.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in the Statement of Comprehensive Income.
(j) Financial instruments
Financial instruments are recognised initially on the date that the Group becomes party to the contractual
provisions of the instrument.
On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for
instruments measured at fair value through profit or loss where transaction costs are expensed as incurred).
Financial assets
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair
value, depending on the classification of the financial assets.
Classification
On initial recognition, the Group classifies its financial assets into the following categories, those measured
at:
•
•
•
amortised cost;
fair value through profit or loss – FVTPL; and
fair value through other comprehensive income - equity instrument (FVOCI - equity).
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its
business model for managing financial assets.
The accompanying notes form part of these financial statements.
22
Amortised cost
Assets measured at amortised cost are financial assets where:
•
•
the business model is to hold assets to collect contractual cash flows; and
the contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
The Group's financial assets measured at amortised cost comprise trade and other receivables and cash
and cash equivalents in the statement of financial position.
Subsequent to initial recognition, these assets are carried at amortised cost using the effective interest rate
method less provision for impairment.
Interest income, foreign exchange gains or losses and impairment are recognised in profit or loss. Gain or
loss on derecognition is recognised in profit or loss.
Fair value through other comprehensive income
Equity instruments
The Group has no investments in listed and unlisted entities over which are they do not have significant
influence nor control.
Financial assets through profit or loss
All financial assets not classified as measured at amortised cost or fair value through other comprehensive
income as described above are measured at FVTPL.
The Group does not hold any assets that fall into this category.
Impairment of financial assets
Impairment of financial assets is recognised on an expected credit loss (ECL) basis for the following assets:
•
financial assets measured at amortised cost
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECL, the Group considers reasonable and supportable information that is
relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis based on the Group's historical experience, informed credit assessment and
includes forward looking information.
The Group uses the presumption that an asset which is more than 30 days past due has seen a significant
increase in credit risk.
The Group uses the presumption that a financial asset is in default when:
•
the other party is unlikely to pay its credit obligations to the Group in full, without recourse of the Group
to actions such as realising security (if any is held); or
•
the financial assets are more than 90 days past due.
Credit losses are measured as the present value of the difference between the cash flows due to the Group
in accordance with the contract and the cash flows expected to be received. This is applied using a
probability weighted approach.
The accompanying notes form part of these financial statements.
23
Notes to the Financial Statements for the
Year Ended 30 June 2021
Trade receivables and contract assets
Impairment of trade receivables and contract assets have been determined using the simplified approach in
AASB 9 which uses an estimation of lifetime expected credit losses. The Group has determined the
probability of non-payment of the receivable and contract asset and multiplied this by the amount of the
expected loss arising from default.
The amount of the impairment is recorded in a separate allowance account with the loss being recognised
in finance expense. Once the receivable is determined to be uncollectable then the gross carrying amount
is written off against the associated allowance.
Where the Group renegotiates the terms of trade receivables due from certain customers, the new expected
cash flows are discounted at the original effective interest rate and any resulting difference to the carrying
value is recognised in profit or loss.
Other financial assets measured at amortised cost
Impairment of other financial assets measured at amortised cost are determined using the expected credit
loss model in AASB 9. On initial recognition of the asset, an estimate of the expected credit losses for the
next 12 months is recognised. Where the asset has experienced significant increase in credit risk then the
lifetime losses are estimated and recognised.
Financial liabilities
The Group measures all financial liabilities initially at fair value less transaction costs, subsequently financial
liabilities are measured at amortised cost using the effective interest rate method.
The financial liabilities of the Group comprise trade payables, bank and other loans and finance lease
liabilities.
(k)
Impairment of non-financial assets
At the end of each reporting period the Group determines whether there is evidence of an impairment
indicator for non-financial assets.
Where an indicator exists and regardless for goodwill, indefinite life intangible assets and intangible assets
not yet available for use, the recoverable amount of the asset is estimated.
Where assets do not operate independently of other assets, the recoverable amount of the relevant
cash-generating unit (CGU) is estimated.
The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the
value in use. Value in use is the present value of the future cash flows expected to be derived from an asset
or cash-generating unit.
Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit
or loss.
Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment
loss, except for goodwill.
The accompanying notes form part of these financial statements.
24
(l)
Intangibles
Research and development
Development expenditure incurred on an individual project is expensed. Expenditure is only capitalised when
it is probable that future economic benefits associated with the item will flow to the entity and the costs
incurred can be reliably measured. On recognising that there is an asset with a future economic benefit to
the Group the cost model is applied requiring the asset to be carried at cost less any accumulated
amortisation and accumulated impairment losses. Any expenditure carried forward is amortised over the
period of expected future sales from the related project.
The carrying value of development costs is reviewed for impairment annually when the asset is not yet in
use, or more frequently when an indicator of impairment arises during the reporting year indicating that the
carrying value may not be recoverable. Where recognition criteria are not met, development costs are
recognised in the Statement of Comprehensive Income as incurred.
Gains or losses from de-recognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the Statement of
Comprehensive Income when the asset is derecognised.
(m) Cash and cash equivalents
Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand and
short-term deposits with an original maturity of three months or less. For the purposes of the Statement of
Cash Flows, cash and cash equivalents consist of cash and equivalents as defined above, net of outstanding
bank overdrafts.
(n)
Employee benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up to the
reporting date. These benefits include wages and salaries, annual leave and long service leave.
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits expected
to be settled within twelve months of the reporting date are measured at their nominal amounts based on
remuneration rates which are expected to be paid when the liability is settled. All other employee benefit
liabilities are measured at the present value of the estimated future cash outflow to be made in respect of
services provided by employees up to the reporting date. In determining the present value of future cash
outflows, the market yield as at the reporting date on national government bonds, which have terms to
maturity approximating the terms of the related liability, are used.
Employee benefit expenses and revenues arising in respect of the following categories:
• wages and salaries, non-monetary benefits, annual leave, long service leave and other leave
entitlements; and
•
other types of employee entitlements,
are charged against surpluses on a net basis in their respective categories.
The contributions made to superannuation funds are charged to the statement of profit or loss and other
comprehensive income.
The accompanying notes form part of these financial statements.
25
Notes to the Financial Statements for the
Year Ended 30 June 2021
i. Long service leave
The liability for long service leave 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 reporting date using the projected unit credit method. Consideration is given to expected future wage
and salary levels, experience of employee departures and periods of service. Expected future payments are
discounted using market yields at the reporting date on national government bonds with terms to maturity
and currency that match, as closely as possible, the estimated future cash outflows.
ii. Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or
when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises
termination benefits when it is demonstrably committed to either terminating the employment of current
employees according to a detailed formal plan without possibility of withdrawal or providing termination
benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than
twelve months after Statement of Financial Position date are discounted to present value.
(o)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually
certain. The expense relating to any provision is presented in the Statement of Comprehensive Income net
of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
(p)
Earnings per share
i. Basic earnings per share
Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity
(other than dividends) and preference share dividends, divided by the weighted average number of ordinary
shares, adjusted for any bonus element.
The accompanying notes form part of these financial statements.
26
ii. Diluted earnings per share
Diluted EPS is calculated as net profit attributable to members, adjusted for:
•
•
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses;
other non-discretionary charges in revenues or expenses during the period that would result from the
dilution of potential ordinary shares; and
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares,
adjusted for any bonus element.
(q) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares
or options for the acquisition of a business are not included in the cost of the acquisition as part of the
purchase consideration.
(r)
Foreign currency transactions and balances
Foreign currency transactions are recorded at the spot rate on the date of the transaction.
At the end of the reporting period:
•
Foreign currency monetary items are translated using the closing rate;
• Non-monetary items that are measured at historical cost are translated using the exchange rate at the
date of the transaction; and
• Non-monetary items that are measured at fair value are translated using the rate at the date when fair
value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates
different from those at which they were translated on initial recognition or in prior reporting periods are
recognised through profit or loss, except where they relate to an item of other comprehensive income or
whether they are deferred in equity as qualifying hedges.
(s)
Share based payment transactions
The Group has an ability to provide benefits to employees (including key management personnel) in the
form of share-based payments, whereby employees render services in exchange for shares or rights over
shares ('equity settled transactions').
There are currently two plans in place to provide such benefits:
•
•
the XTEK Long Term Incentive Performance Rights Plan (LTIPRP); and
the Employee Tax Exempt Share Plan, which provides benefits to all employees.
The cost of these equity settled transactions with employees is measured by reference to the fair value at
the date at which they are granted. The fair value is determined by reference to either the Black Scholes
valuation or by an external valuer using a binomial model.
The accompanying notes form part of these financial statements.
27
Notes to the Financial Statements for the
Year Ended 30 June 2021
In valuing equity settled transactions, no account is taken of any vesting conditions, other than conditions
linked to the price of the shares of XTEK ('market conditions') if applicable.
The cost of equity settled transactions is recognised, together with a corresponding increase in equity, over
the period in which the performance and/or service conditions are fulfilled (the vesting period), ending on the
date on which the relevant employees become fully entitled to the award ('vesting date').
At each subsequent reporting date until vesting, the cumulative charge to the Statement of Comprehensive
Income is the product of (i) the grant date fair value of the award, (ii) the current best estimate of the awards
that will vest, taking into account such factors as the likelihood of employee turnover during the vesting
period and the likelihood of non-market performance conditions being met; and (iii) the expired portion of the
vesting period. The charge to the Statement of Comprehensive Income for the period is the cumulative
amount as calculated above less the amounts already charged in previous periods. There is also a
corresponding credit to equity.
Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards
vest than were originally anticipated to do so. Any award subject to a market condition is considered to vest
irrespective of whether or not the market condition is fulfilled, provided that all other conditions are satisfied.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms
had not been modified. An additional expense is recognised for any modification that increases the total fair
value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at
the date of modification.
If an equity-settled award is cancelled, it is treated as if it has vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted
for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled
and new award are treated as if they were a modification of the original award, as described in the previous
paragraph.
(t)
Interest bearing loans and borrowings
All loans and borrowings are initially recognised at cost, being the fair value of the consideration received
net of issue costs associated with the borrowing. After initial recognition, interest bearing loans and
borrowings are subsequently measured at amortised cost using the effective interest method. Amortised
cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Gains
and losses are recognised in the Statement of Comprehensive Income when the liabilities are derecognised
as well as through the amortisation process.
(u)
Government grants
Government grants are recognised when there is reasonable assurance that the grant will be received, and
all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as
income over the periods necessary to match the grant on a systematic basis to the costs that it is intended
to compensate. They are not credited directly to shareholders equity.
The accompanying notes form part of these financial statements.
28
When the grant relates to an asset, the fair value is credited to a deferred income account and is released
to the Statement of Comprehensive Income over the expected useful life of the relevant asset by equal
annual instalments.
(v)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed and determinable payments that are not
quoted in an active market. Such assets are carried at amortised cost using the effective interest rate
method. Gains and losses are recognised in profit and loss when the loans and receivables are derecognised
or impaired, as well as through the amortisation process.
Impairment of Loans
If there is objective evidence that an impairment loss on receivables carried at amortised cost has been
incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows (excluding future credit losses that have not been incurred)
discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at
initial recognition). The carrying amount of the asset is reduced either directly or through the use of an
allowance account. The amount of the loss is recognised in profit or loss.
(w) Dividends
No dividends were declared on or before or subsequent to the end of the financial year.
(x)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial
year, which are unpaid. The amounts are unsecured and are usually paid within thirty days of recognition.
(y)
Trade receivables
Trade receivables are recognised and carried at original invoice amount less a provision for any
uncollectable amounts. Receivables are non-interest bearing and are generally on thirty day terms, unless
otherwise agreed with the customer. Collectability of trade receivables is reviewed on an ongoing basis.
Debts that are known to be uncollectable are written off when identified. An allowance for doubtful debts is
raised when there is objective evidence that the Group will not be able to collect the debt.
Receivables from related parties are recognised and carried at amortised cost, with interest recognised using
the effective interest rate method.
(z) Adoption of new and revised accounting standards
The Company has adopted all standards which became effective for the first time at 30 June 2021, the
adoption of these standards has not caused any material adjustments to the reported financial position,
performance or cash flow of the Company.
The accompanying notes form part of these financial statements.
29
Notes to the Financial Statements for the
Year Ended 30 June 2021
4
Critical accounting estimates and judgments
The directors make estimates and judgements during the preparation of these financial statements regarding
assumptions about current and future events affecting transactions and balances.
These estimates and judgements are based on the best information available at the time of preparing the financial
statements, however as additional information is known then the actual results may differ from the estimates.
The significant estimates and judgements made have been described below.
Key estimates - impairment of property, plant and equipment
The Group assesses impairment at the end of each reporting period by evaluating conditions specific to the Group
that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using
value-in-use calculations which incorporate various key assumptions.
Key estimates - provisions
As described in the accounting policies, provisions are measured at management’s best estimate of the expenditure
required to settle the obligation at the end of the reporting period. These estimates are made taking into account a
range of possible outcomes and will vary as further information is obtained.
Key estimates - receivables
The receivables at reporting date have been reviewed to determine whether there is any objective evidence that
any of the receivables are impaired. An impairment provision is included for any receivable where the entire balance
is not considered collectible. The impairment provision is based on the best information at the reporting date.
Key judgements
The COVID-19 outbreak has impacted the way of life in Australia. This has affected the ability of the Group to
continue operations as usual and has impacted on its operating results. In accordance with national guidelines, the
Group has implemented remote working arrangements in response to government requirements and to ensure the
wellbeing and safety of all employees and visitors.
The Group has determined that there are no going concern risks arising from the impact of the COVID-19 outbreak
and has risk mitigation strategies in place with regards to COVID-19 outbreaks and other ongoing impacts The
board members have determined that the Company remains in a healthy position and retained a stable revenue
stream for the 2022 financial year.
The accompanying notes form part of these financial statements.
30
5
Revenue and Other Income
(a)
Revenue from operations
Value added reseller products
In-house development and manufactured products
Logistic engineering maintenance
Grant and other revenue
Total Revenue
(b)
Other Income
Interest
Other
Total Other income
2021
$
2020
$
10,349,586
28,884,243
16,652,403
10,738,409
1,225,731
2,580,023
104,740
512,592
28,332,460
42,715,267
2021
$
7,370
345,976
353,346
2020
$
17,678
832,969
850,647
Total Revenue and Other Income
28,685,806
43,565,914
6
Expenses
Profit/(loss) before income tax from continuing operations includes the following specific expenses.
(a)
Employee Benefits
Salaries and wages
Superannuation contributions
Payroll tax
Other employee expenses
Total Employee Benefits
(b)
Depreciation
Plant and equipment
Motor vehicles
Office furniture and equipment
Computer software
Demonstration equipment
Leasehold property improvements
Right to use assets
Total Depreciation
2021
$
2020
$
4,024,619
3,941,313
525,435
583,991
325,908
437,935
362,009
54,756
5,459,953
4,796,013
2021
$
2020
$
217,757
216,015
5,677
108,328
134,478
25,693
106,668
512,142
1,110,743
3,707
90,454
47,921
22,876
62,970
331,420
775,363
The increase in the depreciation reflects an increasing professionalisation of the firm’s systems. A significant
investment has been made in both XTEK’s product development capability and IT security.
The accompanying notes form part of these financial statements.
31
Notes to the Financial Statements for the
Year Ended 30 June 2021
(c)
Finance costs
Interest on lease liabilities
Other interest expense
Total Finance costs
2021
$
186,380
13,334
199,714
2020
$
166,929
1,015
167,944
(The “Interest on lease liabilities” refers not to borrowings but is the application of AASB16. It refers to the internal
interest component of the lease on rented properties.)
(d)
Operational expenditure
Accounting, tax and audit fees
Bank charges
Consultancy fees
Directors’ fees (non-Executive)
Insurance
FBT
Minor operating leases
2021
$
252,679
78,612
757,614
278,000
599,069
22,653
32,570
2020
$
179,387
28,310
679,956
260,000
285,434
23,557
12,820
With the consolidation of HighCom for the full 2020-21 financial year, a number of the individual expense lines have
increased when compared to the previous period. Most notably are employee costs and rental costs (seen as
Interest on Lease Liabilities and Depreciation on the Right of Use Assets).
As a result of due diligence and half year and full year audits of XTEK Ltd and the subsidiaries, a total of four
financial audits were conducted in the 2021 financial year and five in the 2020 financial year.
The accompanying notes form part of these financial statements.
32
7
Income Tax Expense
(a)
The major components of tax expense (income) comprise
Current tax expense
Current income tax charge
Loss used not recognised
R&D tax offset
Deferred tax expense
Origination and reversal of temporary differences
Change in unrecognised deductible temporary difference
(b)
Reconciliation of income tax to accounting profit
Profit
Tax
Add:
Tax effect of amounts which are not deductible (taxable) in calculating
taxable income
- Capital raising cost amortised
- Entertainment
- Losses not brought to account
- Timing differences not brought to account
- Research and development expenditure
- Research and development offsets
- Non assessable foreign subsidiary income
Income tax expense
2021
$
(1,128,267)
1,128,267
-
(122,805)
122,805
-
2020
$
36,504
-
(36,504)
(67,516)
67,516
-
2021
$
2020
$
(3,974,948)
302,679
26.0%
(1,033,486)
27.5%
83,237
(70,971)
(33,783)
-
1,128,267
122,805
-
-
2,524
-
67,516
149,167
(68,525)
(146,614)
(200,136)
-
-
Note: The tax position is reconciled to the position of the parent company, for which no tax is payable.
Subsumed within the accounts is HighCom’s tax expense for the year of a USD equivalent of A$233,701.
The accompanying notes form part of these financial statements.
33
Notes to the Financial Statements for the
Year Ended 30 June 2021
(c)
Recognised Deferred Tax Assets and Liabilities
Deferred tax liabilities
Accrued interest
Gross deferred tax liabilities
Deferred tax liability not recognized
Total
Deferred tax assets
Accrued expenses
Superannuation
Employee leave entitlements
Unrealised foreign exchange losses
Lease assets
Impaired assets
Potential tax losses
Potential capital tax losses
Deferred differences and losses not recognised
Net deferred tax asset
(d)
Tax Losses
2021
$
5
5
(5)
-
2021
$
8,840
49,950
2020
$
1,116
1,116
(1,116)
-
2020
$
8,549
28,793
150,794
152,228
75,207
85,221
1,964
71,046
225,228
238,222
6,460,940
5,640,327
404,628
427,972
(7,460,808)
(6,569,101)
-
-
The Parent Company and subsidiaries are consolidated for taxation purposes.
The Group has capital tax losses for which no deferred tax asset is recognised on the Balance Sheet that
arise in Australia of $1,556,260 (2020: $1,556,260) and are available indefinitely for offset against future
capital gains of a similar nature subject to continuing to meet relevant statutory tests.
The Group has accumulated tax losses for which no deferred tax asset has been recognised of $24,849,774
(Parent company, 2020: $20,510,285). The deferred tax asset associated with the loss will only be realisable
in the future in the event of sufficient taxable profits being available to utilise the losses, subject to loss
recoupment rules.
(e)
Unrecognised Temporary Differences
At 30 June 2021, there are no unrecognised temporary differences associated with the Parent Company's
investments in subsidiaries as the Parent has no liability for additional taxation should unremitted earnings
be remitted (2020: nil).
The accompanying notes form part of these financial statements.
34
8
Key Management Personnel Remuneration
Refer to the remuneration report in the Directors’ report for details of remuneration paid or payable to each member
of the Group’s key management personnel for the year ended 30 June 2021.
Key management personnel remuneration included within employee expenses for the year is shown below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
9
Auditors’ Remuneration
Audit and review of financial reports and other audit work under the
Corporations Act 2001
Remuneration of the lead auditor, Hardwickes Chartered Accountants
Remuneration of US based auditor, Turner Stone
Total
2021
$
2020
$
1,350,682
1,546,513
103,784
8,861
105,496
7,172
1,463,327
1,659,181
2021
$
2020
$
68,000
60,446
60,000
89,108
128,446
149,108
In the 2019-20 financial year due diligence, half year and full year audits of XTEK Ltd and the subsidiaries, a total
of five financial audits were conducted. In the 2020-21 financial year only half year and full year audits were
conducted, the audit costs have reduced correspondingly.
10
Dividends
Ordinary shares
No dividends were declared on or before or subsequent to the end of the financial year.
Franking account
The franking credits available for subsequent financial years
981,110
981,110
2021
$
2020
$
The above available balance is based on the dividend franking account at year-end adjusted for:
(a)
Franking credits that will arise from the payment of the current tax liabilities;
(b)
Franking debits that will arise from the payment of dividends recognised as a liability at the year-end;
(c)
Franking credits that will arise from the receipt of dividends recognised as receivables at the end of the year.
The ability to use the franking credits is dependent upon the Company's future ability to declare dividends.
The accompanying notes form part of these financial statements.
35
Notes to the Financial Statements for the
Year Ended 30 June 2021
11
Operating Segments
Segment information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
Board of Directors (chief operating decision maker) in assessing performance and determining the allocation of
resources.
The Group is managed primarily on the basis of product category and service offerings as the diversification of the
Group's operations inherently have notably different risk profiles and performance assessment criteria. Operating
segments are therefore determined on the same basis.
Reportable segments
The homeland security value added reseller business remains XTEK’s major reportable segment (see note 5a) and
includes the supply of homeland security equipment and services to predominantly government customers in the
Australasian region. The Board reviews internal management reports for the strategic business units on a monthly
basis.
Operating Segments
(a) Major customers
The Parent company has a number of customers to whom it provides both products and services. The Group
supplies the agencies of a number of Australian governments, which combined, account for 96% of revenue
(2020 Parent company: 96%).
The US subsidiary supplies through a network of distributors, 99% of domestic sales are ultimately in the
hands of US Federal, state and municipal bodies. (2020 99%)
(b) Geographical information
In presenting information, the segment revenue is based on the geographical location of the Group’s
customers.
Australia
North America
Europe
New Zealand
Other
Total revenue
2021
$
2020
$
11,626,002
30,890,269
14,932,535
11,416,266
1,626,999
146,924
-
-
313,443
95,289
28,332,460
42,715,267
The accompanying notes form part of these financial statements.
36
12
Cash and Cash Equivalents
Cash at bank and in hand
2021
$
2020
$
5,901,223
3,057,031
5,901,223
3,057,031
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Reconciliation of cash
Cash and Cash equivalents reported in the statement of cash flows are reconciled to the equivalent items in the
statement of financial position as follows:
Cash and cash equivalents
Balance as per statement of cash flows
13
Trade and Other Receivables
CURRENT
Trade receivables
Other receivables
Total current trade and other receivables
Terms and conditions
2021
$
2020
$
5,901,223
3,057,031
5,901,223
3,057,031
2021
$
2020
$
1,704,515
4,779,104
146,492
10,592,956
1,851,007
15,372,060
Trade and other receivables are non-interest bearing and generally on thirty-day terms.
A provision for impairment loss is recognised when there is objective evidence that an individual trade receivable
is impaired. There was no impairment loss recognised in FY 2021 (2020: nil).
The accompanying notes form part of these financial statements.
37
Notes to the Financial Statements for the
Year Ended 30 June 2021
At 30 June 2021, the ageing analysis of trade receivables is as follows:
Not impaired
Not impaired
Gross amount
$
< 30 days
$
Past due but not
impaired
(days overdue)
Past due but not
impaired
(days overdue)
Past due but not
impaired
(days overdue)
31-60
$
61-90
$
> 90
$
1,704,515
1,704,515
48,788
48,788
824,983
824,983
694,498
694,498
136,246
136,246
4,779,104
4,779,104
3,380,572
3,380,572
1,346,595
1,346,595
40,282
40,282
11,655
11,655
2021
Trade
receivables
Total
2020
Trade
receivables
Total
95.8% of all trade receivables at 30 June 2021 were received by 31 August 2021.
The Group does not hold any financial assets with terms that have been renegotiated, but which would otherwise
be past due or impaired.
The other classes of receivables do not contain impaired assets.
The carrying value of trade receivables is considered a reasonable approximation of fair value due to the short-term
nature of the balances.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables in the
financial statements.
14
Inventories
CURRENT
Work in progress
Products and spare parts
2021
$
2020
$
1,706,673
9,029,539
5,931,544
3,105,452
10,736,212
9,036,996
During the 2021 financial year there were no write downs due to obsolescence. (2020: $65,820).
Any expense would be included in the changes in inventories of finished goods and work in progress in the
Statement of Comprehensive Income.
The accompanying notes form part of these financial statements.
38
15
Other Current Assets
CURRENT
Prepayments
Short term loan
16
Property, plant and equipment
PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Total plant and equipment
Office Furniture and Equipment
At cost
Accumulated depreciation
Total office furniture and equipment
Motor vehicles
At cost
Accumulated depreciation
Total motor vehicles
Demonstration Equipment
At cost
Accumulated depreciation
Total demonstration equipment
Computer software
At cost
Accumulated depreciation
Total computer software
Leasehold Improvements
At cost
Accumulated depreciation
Total leasehold improvements
UAS
At cost
Total UAS
Right of use, lease assets
At cost
Accumulated depreciation
Total right of use, lease assets
2021
$
2020
$
471,750
1,546,971
22,442
57,658
494,192
1,604,629
2021
$
2020
$
9,770,229
1,669,532
(1,318,847)
(451,298)
8,451,382
1,218,234
685,017
552,582
(442,814)
(259,506)
242,203
293,076
71,168
(46,925)
24,243
71,168
(41,248)
29,920
241,577
221,354
(183,072)
(157,379)
58,505
63,975
571,993
286,624
(270,625)
(136,146)
301,368
150,478
900,397
449,265
(277,888)
(145,097)
622,509
304,168
81,312
81,312
81,312
81,312
3,063,809
(980,307)
3,001,920
(479,083)
2,083,502
2,522,837
Total property, plant and equipment
11,865,024
4,664,000
The accompanying notes form part of these financial statements.
39
Notes to the Financial Statements for the
Year Ended 30 June 2021
(a) Movements in carrying amounts of property, plant and equipment
Movement in the carrying amounts for each class of property, plant and equipment between the beginning
and the end of the current financial year:
Plant and
Equipment
$
Office
Furniture and
Equipment
$
Motor Vehicles
$
Demonstration
Equipment
$
Computer
Software
$
Year ended 30 June 2021
Balance at the beginning of year
Additions
Disposals
Depreciation expense
Revaluation
Foreign exchange movement
1,218,234
7,491,458
(14,267)
(217,757)
293,076
65,787
-
(108,328)
29,920
-
-
(5,677)
63,975
20,223
-
(25,693)
(26,286)
(8,332)
-
-
150,478
271,789
(4,920)
(134,478)
18,499
-
Balance at the end of the year
8,451,382
242,203
24,243
58,505
301,368
Leasehold
Improvements
$
UAS
$
Right of Use,
Lease Assets
$
Total
$
Year ended 30 June 2021
Balance at the beginning of year
Additions
Disposals
Depreciation expense
Revaluation
Foreign exchange movement
304,168
433,656
-
(106,668)
-
(8,647)
Balance at the end of the year
622,509
81,312
-
-
-
-
-
81,312
2,522,837
173,377
-
(512,142)
-
(100,570)
4,664,000
8,456,290
(19,187)
(1,110,743)
18,499
(143,835)
2,083,502
11,865,024
The accompanying notes form part of these financial statements.
40
Plant and
Equipment
$
Office
Furniture and
Equipment
$
Motor Vehicles
$
Demonstration
Equipment
Computer
Software
$
$
Year ended 30 June 2020
Balance at the beginning of year
Additions
Disposals
Depreciation expense
473,236
972,571
(11,558)
(216,015)
178,485
205,045
-
(90,454)
Balance at the end of the year
1,218,234
293,076
5,014
28,613
-
(3,707)
29,920
59,728
27,123
-
(22,876)
108,176
91,723
(1,500)
(47,921)
63,975
150,478
Year ended 30 June 2020
Balance at the beginning of year
Additions
Disposals
Depreciation expense
Balance at the end of the year
17
Intangible Assets
Patents
Patent cost
Certifications
Amortisation
Total Intangibles
Leasehold
Improvements
$
382,771
29,370
(45,003)
(62,970)
304,168
UAS
$
81,312
-
-
-
81,312
Right of Use,
Lease Assets
$
Total
$
1,019,472
1,834,785
-
(331,420)
2,308,194
3,189,230
(58,061)
(775,363)
2,522,837
4,664,000
2021
$
321,429
43,243
(11,804)
352,868
2020
$
252,615
47,397
-
300,012
The accompanying notes form part of these financial statements.
41
Notes to the Financial Statements for the
Year Ended 30 June 2021
(a) Movements in carrying amounts of intangible assets
Year ended 30 June 2021
Balance at the beginning of the year
Additions
Amortisation
Foreign exchange movement
Closing value at 30 June 2021
Year ended 30 June 2020
Balance at the beginning of the year
Additions
Amortisation
Closing value at 30 June 2020
18
Trade and Other Payables / Borrowings
(a)
Trade and other payables - current
CURRENT
Trade and other payables*
GST payable
Sundry payable and accrued expenses
Derivative financial liability
Lease liability
(a) Trade and other payables – non-current
NON-CURRENT
Lease liability
Patents
$
Certification
$
Total
$
252,615
68,814
(11,804)
-
309,625
47,397
-
-
(4,154)
43,243
300,012
68,814
(11,804)
(4,154)
352,868
Patents
$
Certification
$
Total
$
155,891
96,724
-
-
47,397
-
155,891
144,121
-
252,615
47,397
300,012
2021
$
2020
$
5,342,118
13,979,261
-
607,027
-
406,716
534,089
7,141
208,454
1,620,828
6,157,599
16,548,035
2021
$
2020
$
2,242,018
1,172,701
2,242,018
1,172,701
The accompanying notes form part of these financial statements.
42
(b)
Borrowings – current
CURRENT
Bank loan – interest bearing (see note 21)
(b)
Borrowings – non-current
NON-CURRENT
Bank loan – interest bearing (see note 21)
19
Employee Benefits
Current liabilities
Annual leave provision
Long service leave
Non-current liabilities
Long service leave
2021
$
613,340
613,340
2021
$
1,339,004
1,339,004
2021
$
401,584
144,329
545,913
2021
$
34,069
34,069
2020
$
-
-
2020
$
816,725
816,725
2020
$
300,336
198,477
498,813
2020
$
54,744
54,744
Nature and timing of provisions
Refer to note 3(n) for the relevant accounting policy and discussion of the significant estimations and assumptions
applied in the measurement of this provision.
20
Contract liabilities
CURRENT
Customer deposits
Government grants
Total
NON-CURRENT
Customer deposits
Government grant
Total
2021
$
34,119
-
34,119
2021
$
1,640
-
1,640
2020
$
370,512
1,352,780
1,723,292
2020
$
46,951
-
46,951
The accompanying notes form part of these financial statements.
43
Notes to the Financial Statements for the
Year Ended 30 June 2021
21
Interest bearing liabilities
At 30 June 2021 the only borrowings of the Group were the Commonwealth Bank loan ($1,952,344), drawn under
the details below. At 30 June 2020 $816,725.
In 2019-20, the year the US subsidiary drew down and fully repaid a loan from a US bank to the amount of
USD250,000.
During the 2019-20 financial year, XTEK Ltd obtained a loan facility from the Commonwealth Bank to the amount
of $2.5m. The loan is interest only for the first twelve months, interest plus a capital repayment of $500,000 in the
subsequent two years with a $1.5m balloon payment at the end.
22
Issued Capital
71,036,559 (2020: 53,167,209) Ordinary shares
Total
There were no options on issue at 30 June 2021 (30 June 2020: nil).
(a) Movement in ordinary shares
2021
$
2020
$
45,039,118
33,741,882
45,039,118
33,741,882
Opening balance
Shares issued
2021
No.
2021
$
2020
No.
2020
$
53,167,209
33,741,882
40,579,906
27,312,482
17,869,350
12,181,855
12,587,303
6,663,012
Transaction cost in relation to capital
-
(884,619)
-
(233,612)
Total
71,036,559
45,039,118
53,167,209
33,741,882
(b)
Expired options and share performance rights
There were no options on issue at 30 June 2021 (30 June 2020: nil).
There were no share performance rights exercisable at the end of any prior year.
As at 30 June 2021 there were no unissued shares nor were there any at the end of any prior year.
(c) Capital Management
When managing capital, management’s objective is to ensure the entity continues as a going concern as
well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also
aims to maintain a capital structure that ensures the lowest cost of capital available to the entity.
No dividends were declared on or before or subsequent to the end of the financial year.
The accompanying notes form part of these financial statements.
44
23
Earnings per Share
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity
holders of the Company (after declaring interest on the convertible redeemable preference shares) by the weighted
average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders
of the Company (after deducting interest on the convertible redeemable preference shares) by the weighted average
number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that
would be issued on the conversion of all potential shares into ordinary shares.
Basic profit per share
Dilutive profit per share
2021
$
(0.058)
2020
$
0.006
(0.058)
0.006
Reconciliations of earnings used in calculating basic and diluted earnings per share
(a)
Reconciliation of earnings to profit or loss from continuing operations
Profit from continuing operations
Earnings used in the calculation of dilutive EPS from continuing
operations
(b) Earnings used to calculate overall earnings per share
2021
$
2020
$
(3,974,948)
302,678
(3,974,948)
302,678
2021
$
2020
$
Earnings used to calculate overall earnings per share
(3,974,948)
302,678
(c) Weighted average number of ordinary shares outstanding during the year used in calculating basic
EPS
2021
No.
2020
No.
Weighted average number of ordinary shares outstanding during the year
used in calculating basic EPS
68,575,941
51,322,177
Weighted average number of ordinary shares outstanding during the year
used in calculating dilutive EPS
68,575,941
51,322,177
The accompanying notes form part of these financial statements.
45
Notes to the Financial Statements for the
Year Ended 30 June 2021
(d) Options and share performance right
Options and share performance rights granted to employees and Directors that are considered to be
potential ordinary shares would be included in the determination of diluted earnings per share, to the extent
to which they are dilutive. As at reporting date, no options or share performance rights have not been
included in the determination of basic earnings per share.
(e)
Share Issuance
The issued capital of XTEK Ltd & controlled entities at 30 June 2021 comprised 71,036,559 (2020:
53,167,209) fully paid Ordinary Shares. There were no issued options as at 30 June 2021 (2020 nil).
24
Government grants
(a)
AusIndustry’s R&D tax incentive
No income from the AusIndustry R&D Tax Incentive was recognised in the 2021 financial year (FY 2020 – nil).
As the Group’s revenue exceeded $20m any R&D incentive would not be received as a cashback.
25
Cash flow information
(a) Reconciliation of cash flow from operations with profit/(loss) after income tax.
Profit for the year
Adjustments for non-cash flow in profits:
Depreciation
Bonus issue of shares to employees
Share based payment to employee
Loan forgiveness
Finance cost on lease
Loss on sale of assets
Changes in assets and liabilities
(Increase) in trade debtors
Decrease / (Increase) in inventory
(Increase) / Decrease in prepayments and other
assets
Increase / (Decrease) in trade and other payables
Increase / (Decrease) in deferred income
Increase / (Decrease) in employee provisions
Net cash flows from/(used in) operating activities
(b)
Non-cash Financing and investing activities
Notes
32
2021
$
(3,974,948)
1,122,648
126,213
-
-
186,378
7,147
13,521,052
(1,699,215)
1,110,437
(8,943,943)
(1,768,603)
2020
$
302,678
775,363
113,369
19,446
(368,643)
167,944
14,527
5,962,165
(4,686,340)
(597,192)
(5,661,567)
(760,783)
26,421
173,664
(286,413)
(4,545,369)
In FY 2020-21 205,229 shares issued to employees. As at 30 June 2021 59,185 shares remain in
escrow.
In FY 2019-20 432,467 shares were issued to employees, 82,166 shares remained in escrow at 30
June 2020.
Shares that have vesting conditions are held in escrow and are allotted to the employee recipient
after three years from the time of granting or upon their leaving the employment of the Company.
The accompanying notes form part of these financial statements.
46
26
Share-based Payments
During the year ended 30 June 2021, 205,229 new ordinary shares were issued as part of staff incentive plans for
employees of the company (FY20 197,685 new ordinary shares).
Employee Share Ownership Plans
The Company provides benefits to employees (including key management personnel) in the form of share-based
payments, whereby employees render services in exchange for shares or rights over shares ('equity settled
transactions'). There are currently two approved by shareholders:
(i)
The XTEK Long Term Incentive Performance Rights Plan (LTIPRP); and
(ii)
The Employee Tax Exempt Share Plan, which provides benefits to all eligible employees.
The cost of these equity settled transactions with employees is measured by reference to the fair value at the date
at which they were granted.
Share Options and Share Performance Rights
There were no unlisted options at 30 June 2021 (2020: nil). There were no options or share performance rights in
the hands of staff issued at the start of financial year 2021 or the prior year. There were no options or share
performance rights in the hands of staff exercisable at the end of the year or any prior year. As at 30 June 2020,
there were no unissued shares.
Employee/Director Share Issue
The Board may approve a bonus comprising cash and fully paid ordinary shares separate from the LTIP - note 3(s).
No non-executive director bonus was paid in FY2021 (FY2020 200,000 fully paid ordinary shares). 205,229 fully
paid ordinary shares were issued to staff in accordance with a Board resolution of 18 November 2020 (FY20
197,685 fully paid ordinary shares).
Weighted Average Share Price
The weighted average market price at 30 June 2021 was 60.0 cents (2020: 64.8 cents).
27
Events Occurring After the Reporting Date
The financial report was authorised for issue on 30 September 2021 by the Board of Directors.
No matters or circumstances have arisen since the end of the financial year which significantly affected or could
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group
in future financial years.
The COVID-19 outbreak has impacted the way of life in Australia. This has affected the ability of the Group to
continue operations as usual and has impacted on its operating results. In accordance with national guidelines, the
Group has implemented remote working arrangements in response to government requirements and to ensure the
wellbeing and safety of all employees and visitors.
The Group has determined that there are no going concern risks arising from the impact of the COVID-19 outbreak
and has risk mitigation strategies in place with regards to COVID-19 outbreaks and other ongoing impacts The
board members have determined that the Group remains in a healthy position.
The accompanying notes form part of these financial statements.
47
Notes to the Financial Statements for the
Year Ended 30 June 2021
28
Related Parties
(a)
The Group's main related parties are as follows:
1.
Entities
The Group is XTEK Limited and its wholly owned subsidiaries:
- Simmersion Holdings Pty Ltd.
- XTEK, Inc (registered in Delaware, USA) (is the owner of HighCom Armor Solutions, Inc)
The financial details for the Parent entity are at Note 31.
2.
Directors
Details of all Directors can be found in the Directors' Report.
3.
Key management personnel
Disclosures relating to key management personnel are set out in the remuneration report.
(b)
Transactions with related parties
Transactions between related parties, if they occur, are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
There were no related party transactions in the 2020-21 year.
There were no related party transactions in the 2019-20 year.
29
Financial Risk Management
The Group is exposed to a variety of financial risks through its use of financial instruments.
The Group‘s overall risk management plan seeks to minimise potential adverse effects due to the unpredictability
of financial markets.
The most significant financial risks to which the Group is exposed to are described below.
Specific risks
•
Liquidity risk
• Credit risk
• Market risk - currency risk, interest rate risk and price risk
Financial instruments used
The principal categories of financial instrument used by the Group are described below.
•
Trade receivables
• Cash at bank
•
Trade and other payables
The accompanying notes form part of these financial statements.
48
Summary Table
Financial assets
Held at amortised cost
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial liabilities
Financial liabilities at fair value
Trade and other payables
Total financial liabilities
2021
$
2020
$
5,901,223
3,057,031
1,851,007 15,372,060
7,752,230 18,429,091
6,159,239
18,537,461
6,159,239
18,537,461
The Group has not restated comparatives when initially applying AASB 9, the comparative information has
been prepared under AASB 139 Financial Instruments: Recognition and Measurement.
Financial Risk Management
Objectives, policies and processes
The Board of Directors has overall responsibility for the establishment of the Group’s financial risk management
framework. This includes the development of policies covering specific areas such as foreign exchange risk, interest
rate risk, credit risk and the use of derivatives.
Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the
Group’s activities.
The day-to-day risk management is carried out by the Group’s finance function under policies and objectives which
have been approved by the Board of Directors. The Chief Financial Officer has been delegated the authority for
designing and implementing processes which follow the objectives and policies. This includes monitoring the levels
of exposure to interest rate and foreign exchange rate risk and assessment of market forecasts for interest rate and
foreign exchange movements.
The Board of Directors receives monthly reports which provide details of the effectiveness of the processes and
policies in place.
The XTEK Group does not engage in the trading of financial assets for speculative purposes. Mitigation strategies
for specific risks faced are described below.
The accompanying notes form part of these financial statements.
49
Notes to the Financial Statements for the
Year Ended 30 June 2021
Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and principal
repayments on its debt instruments. It is the risk that the Group could encounter difficulty in meeting its financial
obligations as they fall due.
The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities as and when
they fall due. The Group maintains cash and marketable securities to meet its liquidity requirements for up to 30-day
periods. Funding for long-term liquidity needs is additionally secured by an adequate amount of committed credit
facilities and the ability to sell long term financial assets.
The Group manages its liquidity needs by carefully monitoring scheduled debt servicing payments for long-term
financial liabilities as well as cash-outflows due in day-to-day business.
Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the
basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day period are identified
monthly.
At the reporting date, these reports indicate that the Group expected to have sufficient liquid resources to meet its
obligations under all reasonably expected circumstances and will not need to establish a financing facilities.
Financial guarantee liabilities are treated as payable on demand since the Group has no control over the timing of
any potential settlement of the liabilities.
The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement
dates and does not reflect management's expectations that banking facilities will be rolled forward. The amounts
disclosed in the table are the undiscounted contracted cash flows and therefore the balances in the table may not
equal the balances in the statement of financial position due to the effect of discounting.
The Group’s liabilities have contractual maturities which are summarised below:
Trade payables
Total
Not > 1 month
Total
2021
$
5,231,700
2020
$
13,979,261
2021
$
5,231,700
2020
$
13,979,261
5,231,700
13,979,261
5,231,700
13,979,261
The accompanying notes form part of these financial statements.
50
Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and trade and
other receivables. The Group’s exposure to credit risk arises from the potential default of the counter party, with a
maximum exposure being equal to the carrying amount of these instruments. Exposure at statement of financial
position date is addressed in each applicable note.
The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it
the Group’s policy to securitise its trade and other receivables. The Group minimises concentrations of credit risk
in relation to trade and other receivables by undertaking transactions with a large number of government entities.
It is the Group’s policy that all non-government customers who wish to trade on credit terms are subject to credit
verification procedures including an assessment of their financial position, past experience and industry reputation.
In addition, receivables balances are monitored on an ongoing basis with the result that the Group’s exposure to
bad debts is not significant.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices.
(i)
Foreign exchange risk
The Group has transactional currency exposures. Such exposure arises from sales or purchases by the Group in
currencies other than the Group’s functional currency. Approximately 70% (2020: 81%) of the Group’s purchases
are denominated in currencies other than the functional currency of the Group, whilst 17% of sales are denominated
in the Group’s functional currency (2020: 52%).
The following sensitivity analysis is based on the foreign currency risk exposures in the Statement of Financial
Position as they relate to the Parent Entity. Movements in the value of the assets of the foreign subsidiary have no
immediate impact on the profit / loss of the Group as variations in the exchange rate impact the foreign exchange
reserve (see note 30a) not the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
At 30 June 2021, had the Australian Dollar moved, with all other variables held constant, post-tax profit/(loss) would
have been affected as follows:
USD
Net results
EUR
Net results
GBP
Net results
NZD
Net results
2021
+10%
$
280,350
-10%
$
(342,650)
2020
+10%
$
402,969
-10%
$
(492,518)
26,507
(32,398)
30,897
(30,763)
1,645
(2,010)
19
(24)
3,999
5,123
(4,889)
(4,191)
The accompanying notes form part of these financial statements.
51
Notes to the Financial Statements for the
Year Ended 30 June 2021
Market risk
(i)
Foreign exchange risk
Exposure to foreign exchange rates vary during the year depending on the volume of overseas trading transactions.
Nonetheless, the analysis table is considered to be representative of the Group’s exposure to foreign currency risk
through the year.
In order to minimize XTEK’s exposure to currency fluctuation, the firm is increasingly negotiating with government
customers for them to accept invoices in the source currency of the manufacturer. This gives us a natural offset in
the invoicing and cost base. With the Group’s increased level of trade throughout North America and Europe
(ii)
Interest rate risk
The Group’s exposure to market interest rates relates primarily to the cash at bank. At reporting date, the Company
had financial assets comprising cash and cash equivalents totaling $5,901,223 (2020: $3,057,031) exposed to
Australian variable interest rate risk that are not designated in cash flow hedges.
The following sensitivity analysis is based on the interest rate risk exposures in existence at reporting date. At 30
June 2020, if interest rates had moved, as illustrated in the table below, with all other variables held constant, the
post-tax net profit/(loss) for the period and equity would have been affected as below.
The calculations are based on the financial instruments held at each reporting date. All other variables are held
constant.
For cash held
2021
2020
Net results
Equity
+1.00%
$
59,012
59,012
-0.01%
$
(590)
(590)
+1.00%
$
30,570
30,570
For borrowings
2021
2020
Net results
Equity
+1.00%
$
19,523
19,523
-1.00%
$
(19,523)
(19,523)
+1.00%
$
8,167
8,167
-0.60%
$
(18,342)
(18,342)
-1.00%
$
(8,167)
(8,167)
The accompanying notes form part of these financial statements.
52
30
Reserves and retained (losses)/profits
Equity Based Payment reserve
Equity based payments reserve consists of:
•
•
•
premium paid on the purchase of Simmersion Holdings Pty Ltd during FY 2016;
share performance rights granted to Executives and Management during 2008, and
options and share performance rights granted to Directors and Executives during 2007 credited against
equity during the year.
(a) Movement in reserves
Capital reserve
Balance at the beginning of the year
Transfer to Retained Earnings
Balance Capital Reserve
Foreign Exchange Reserve
Balance at the beginning of the year
Creation on consolidation of subsidiaries
Balance Foreign Exchange Reserve
Equity Based Payment Reserve
Balance at the beginning of the year
Equity Based Payments
Balance Equity Based Payment Reserve
Balance at the end of the year
(b)
Accumulated Losses
Movement in accumulated profit/(losses) were as follows:
Balance at the beginning of the year
Profit/(losses) for the year
Restatement due to adoption of AASB16
Transfer to Retained Earnings
Balance at the end of the year
2021
$
1,882
-
1,882
14,193
(383,485)
(369,292)
26,339
8,281
34,620
(332,790)
2020
$
1,882
-
1,882
-
14,193
14,193
6,893
19,446
26,339
42,414
2021
$
2020
$
(19,322,638)
(3,974,948)
-
-
(19,625,316)
302,678
-
-
(23,297,586)
(19,322,638)
The accompanying notes form part of these financial statements.
53
Notes to the Financial Statements for the
Year Ended 30 June 2021
31
Parent entity
The following information has been extracted from the books and records of the parent, XTEK Limited and has
been prepared in accordance with Accounting Standards.
The financial information for the parent entity, XTEK Limited has been prepared on the same basis as the
consolidated financial statements except as disclosed below.
Statement of Financial Position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Retained earnings
Reserves
Total Equity
Statement of Profit or Loss and Other Comprehensive Income
Total profit or loss for the year
Total comprehensive income
32
Contingencies
There were no contingent liabilities at 30 June 2021.
The Group had a contingent liability of USD253,000 at 30 June 2020.
2021
$
2020
$
17,423,133
10,756,454
28,581,936
3,258,995
28,179,587
31,840,931
4,991,650
2,602,301
15,485,084
2,539,248
7,593,951
18,024,332
20,585,636
13,816,599
45,039,118
(24,488,102)
34,620
33,741,882
(19,951,622)
26,339
20,585,636
13,816,599
(4,536,480)
(446,200)
(4,536,480)
(446,200)
The US subsidiary had been in receipt of a forgivable loan as part of the US Government’s COVID-19 stimulus
package. The conditions for the loan were met and the loan during the 2019-20 financial year and the fund were
recognised as Other Income during that year. The loan was formally forgiven during the 2020-21 financial year.
The accompanying notes form part of these financial statements.
54
33
Business Combination
On 29 September 2019, the parent company acquired a 100% interest in HighCom Armor Solutions, Inc
which resulted in XTEK, Inc (US incorporated, acquisition vehicle 100% owned by XTEK Ltd) obtaining control
of HighCom. This acquisition is expected to increase XTEK's share of this market and also provide an easy
segue to sell XTEK’s novel and high value products into the US.
At the acquisition date of HighCom, the following table (all in USD) shows the purchase consideration. The
value of assets acquired and liabilities assumed are from the audited Balance Sheet as at contract date. This
acquisition price harks back to the Chairman’s Report and the Managing Directors’ Report of purchasing the
business for AUD ~3.9m.
Purchase consideration
XTEK – September 2019
Total purchase consideration to end of Half Year Accounts
Assets or liabilities acquired at 29 September 2019:
Cash
Trade receivables
Inventory and other current assets
Plant and equipment and other non-current assets
Total net identifiable assets
Identifiable assets acquired and liabilities assumed
Goodwill on acquisition - September 2019
Less: Identifiable assets acquired
Capital Reserve
Fair value
$
USD
2,659,064
2,659,064
126,331
1,034,200
1,824,191
98,322
3,083,044
2,134,208
524,856
3,083,044
(423,980)
Under the terms of the acquisition contract, two more payments were made after settlement date:
- December 2019: USD 561,442 acquisition of target working capital USD2m.
- January 2020:
USD 75,583 purchase of working capital in excess of target amount.
An earnout payment threshold was not triggered.
34
Statutory Information
The principal registered office and place of business, of the company is:
XTEK Limited
3 Faulding Street
Symonston ACT 2609
The accompanying notes form part of these financial statements.
55
Directors’ Declaration
In accordance with a resolution of the Directors of XTEK Limited, the Directors declare that:
1.
The financial statements and notes are in accordance with the Corporations Act 2001 and:
(a)
(b)
Comply with Australian Accounting Standards, which as stated in accounting policy Note 1 to the financial
statements, constitutes compliance with International Financial Reporting Standards (IFRS) and;
Give a true and fair view of the financial position as at 30 June 2021 and of the performance for the year
ended on that date for the consolidated group.
2.
In the Directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts as and
when they fall due; and
3.
The Directors have been given the declarations required by s 295A of the Corporations Act 2001 from the
Managing Director and Chief Financial Officer.
On behalf of the Board
Uwe Boettcher
Chairman
Dated this 30th day of September 2021
The accompanying notes form part of these financial statements.
56
The accompanying notes form part of these financial statements.
57
The accompanying notes form part of these financial statements.
58
The accompanying notes form part of these financial statements.
59
The accompanying notes form part of these financial statements.
60
Additional Information
1.
The following information set out below was applicable as at 28 September 2021.
2. Shareholding
(a) Distribution of Shareholders
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Total holders
363
622
255
485
99
1,824
Number Ordinary Shares
197,733
1,650,135
2,016,631
16,645,243
50,526,817
71,036,559
(b) 20 Largest Shareholders – Ordinary Shares
Rank Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
UDB PTY LIMITED
FINEXIA SECURITIES LTD
ALTOR CAPITAL MANAGEMENT PTY LTD
ACM AEPF PTY LTD
MRS WENDY WING LIN LO
ALL OTHERS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
FAIRLANE MANAGEMENT PTY LTD
EMALYN HOLDINGS
UDB PTY LIMITED
BISSAPP SOFTWARE PTY LTD
WAVET FUND NO 2 PTY LTD
MR PHILIPPE ODOUARD
MR IVAN SLAVICH
BISSAPP SOFTWARE PTY LTD
MR NICHOLAS HENRY WEBER
DWKSJK PTY LTD
RCFT PTY LTD
ATECH GROUP PTY LIMITED
BUNDARRA TRADING COMPANY PTY LTD
Number of
Ordinary
Fully Paid
Shares
No.
% Held of
Issued
Ordinary
Capital
%
4,430,630
3,500,000
3,044,401
3,016,423
2,572,501
2,193,659
2,187,959
2,096,097
1,666,666
1,309,778
1,182,351
1,070,000
890,595
752,507
693,493
675,804
603,090
599,400
591,158
580,510
6.24
4.93
4.29
4.25
3.62
3.09
3.08
2.95
2.35
1.84
1.66
1.51
1.25
1.06
0.98
0.95
0.85
0.84
0.83
0.82
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total)
Total Remaining Holders Balance
33,657,022
37,379,537
47.38
52.62
3.
The name of the Company Secretary is Mr. Lawrence Gardiner.
4.
The address of the Principal Registered Office of XTEK Limited in Australia is
3 Faulding Street, Symonston, ACT, 2609
Telephone +61 2 6163 5588.
The accompanying notes form part of these financial statements.
61
XTEK Limited and Controlled Entities
Corporate Governance Statement
XTEK Limited and controlled entities is committed to implementing the highest standards of corporate governance. In
determining what those high standards should involve, the Company has turned to the ASX Corporate Governance
Council’s Corporate Governance Principles and Recommendations. The Company’s approach to corporate governance is
to have a set of values and behaviours that underpin everyday activities, ensure transparency and fair dealing and protect
security holder interests. This approach includes a commitment to best practice governance standards, which XTEK sees
as being in the best interests of investors whilst ensuring full compliance with legal requirements.
The framework for XTEK’s Corporate Governance Statement follows the Australian Securities Exchange (ASX) Corporate
Governance Council’s eight principles and recommendations for Corporate Governance (4th
Edition) of February 2019.
Principle 1: Lay Solid Foundations for Management and Oversight
Council Recommendation 1.1: A listed entity should disclose a Board Charter
which sets out the respective roles and responsibilities of the Board and
Management and includes a description of those matters expressly reserved to
the Board and those delegated to Management
The Board’s role is to govern the Company rather than to manage it. In governing the Company, the Directors must act
in the best interests of the Company as a whole. It is the role of senior management to manage the Company in
accordance with the direction and delegations of the Board and the responsibility of the Board to oversee the activities
of management in carrying out these delegated duties.
In carrying out its governance role, the main task of the Board is to drive the performance of the Company. The Board
must also ensure that the Company complies with all of its contractual, statutory and any other legal obligations,
including the requirements of any regulatory body. The Board has the final responsibility for the successful operations
of the Company.
To assist the Board to carry out its functions, it has adopted a formal Charter that details functions and responsibilities
of the Board and areas of authority as delegated. The Board Charter is supplemented by the Company Code of Conduct
that is available to guide Non - Executive Directors, Executive Directors, Company Secretary, Chief Financial Officer
and other senior executives and employees in the performance of their roles.
Role of Chief Executive Officer
The Chief Executive Officer’s role is to develop and agree with the Board the corporate strategy and vision and to
oversee implementation of the strategy and management of the Company to achieve the agreed vision in accordance
with the strategies, policies and programs set by the Board.
Responsibilities include:
•
•
Formulating and reviewing, with the Board, the vision and strategy and developing actions and plans to achieve
the vision and implement the strategy. Reporting to the Board on the progress against those plans;
Appointing a management team and negotiating terms and conditions for approval by the Human Resource and
Remuneration Committee or the Board. Providing leadership to and overseeing the senior management team,
ensuring employees are properly instructed to achieve a safe workplace and ensuring compliance with laws and
Company policies and that a high level of ethical behaviour is practiced;
The accompanying notes form part of these financial statements.
62
•
•
•
Reporting to the Board on various matters, including all matters requiring review or approval, significant changes
to the risk profile, certification to the Board on the fairness of the financial statements and adequacy of policies as
regards risk management, monthly reporting on performance of businesses and continual education of Directors
of the Company, its business environment and relevant changes of law;
Acting within delegated authority levels for capital expenditure, sale of assets, appointment and termination of
executives; and
All other matters necessary for the day-to-day management of the Company and not reserved for the Board.
Induction procedures are in place to allow new executive management personnel to participate fully and actively
in management decision making at the earliest opportunity upon appointment. This induction process will take into
account the individuals knowledge of the Company and the homeland security industry. The induction program for
senior executives is designed to make available the Company’s financial position, strategies, operations and risk
management policies. Also, the respective rights, duties, responsibilities and roles of the Board and senior
executives.
Responsibilities of the Board of Directors
In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices,
management and operations of the Company. It is required to do all things that may be necessary to be done in order
to carry out the objectives of the Company.
Without intending to limit this general role of the Board, the principal functions and responsibilities of the Board
include the following:
•
•
•
•
•
•
•
•
•
Leadership of the Organisation: overseeing the Company and establishing codes that reflect the values of the
Company and guide the conduct of the Board, management and employees.
Strategy Formulation: working with senior management to set and review the overall strategy and goals for the
Company and ensuring that there are policies in place to govern the operation of the Company.
Overseeing Planning Activities: overseeing the development of the Company’s strategic plan and approving that
plan as well as the annual and long-term budgets.
Shareholder Liaison: ensuring effective communications with shareholders
communications policy and promoting participation at general meetings of the Company.
through an appropriate
Monitoring, Compliance and Risk Management: overseeing the Company’s risk management, compliance, control
and accountability systems and reviewing the effectiveness and directing the financial and operational performance
of the Company.
Company Finances: approving expenses in excess of those approved under the Company authorisations process
and approving and monitoring acquisitions, divestitures and financial and other reporting.
Human Resources: appointing, and, where appropriate, removing the Chief Executive Officer, Company Secretary,
Chief Financial Officer (CFO) as well as reviewing the performance of the Chief Executive Officer and monitoring
the performance of senior management in their implementation of the Company’s strategy.
Ensuring the health, safety and well-being of Employees: in conjunction with the senior management team,
developing, overseeing and reviewing the effectiveness of the Company’s occupational health and safety systems
to ensure the well-being of all employees.
Delegation of Authority: delegating appropriate powers to the Chief Executive Officer to ensure the effective day-
to-day management of the Company and establishing and determining the powers and functions of the Committees
of the Board.
The accompanying notes form part of these financial statements.
63
XTEK Limited and Controlled Entities
Corporate Governance Statement
Whilst at all times the Board retains full responsibility for guiding and monitoring the Company, in discharging its
stewardship it makes use of sub-committees. Specialist committees are able to focus on a particular responsibility and
provide informed feedback to the Board. The Board has established the following Standing Committees, details of
which are included later in this Corporate Governance Statement:
•
•
•
Finance, Audit and Risk Management Committee;
Human Resources and Remuneration Committee; and
Nomination Committee.
The Board is responsible for ensuring that management’s objectives and activities are aligned with the expectations
and risks identified by the Board. The Board has a number of mechanisms in place to ensure this is achieved including:
•
•
•
•
Board approval of strategic plans designed to meet stakeholders’ needs and manage business risk;
Reviewing, ratifying and monitoring systems of risk management and internal control, codes of conduct and
legal compliance;
Ongoing development of strategic plans and approving initiatives and strategies designed to ensure the continued
growth and success of the entity; and
Implementation of budgets by management and monitoring progress against budget. This is achieved by the
establishment and reporting of both financial and non-financial key performance indicators.
Other matters expressly reserved for the Board of Directors
The following matters and responsibilities have been expressly reserved for the Board:
•
•
•
•
•
Approval of the annual and half-yearly financial reports;
Approving and monitoring the progress of major capital expenditure, capital management, and acquisitions and
divestitures;
Ensuring that any significant corporate risks that arise are identified, assessed, appropriately managed and
monitored;
Ensuring appropriate resources are available to senior executives; and
Reporting to security holders.
Full details of the Board’s role and responsibilities are contained in the Board Charter, a copy of which is contained on
the Company’s website at the Corporate Governance Section.
The Company complies with Recommendation 1.1.
The accompanying notes form part of these financial statements.
64
Council Recommendation 1.2: A listed entity should undertake appropriate
checks before appointing a Director or senior executive or putting someone
forward for election as a Director security a n d in addition should disclose all
material information in its possession relevant to a decision on whether or not
to elect or re-elect a Director.
The Company has adopted a policy as developed by the Nomination Committee for the selection and appointment of
Directors. This policy defines procedural processes for the appointment of new Directors and the re-election of
incumbent Directors. As part of this process, the Company undertakes appropriate background checks on all
candidates being considered for appointment. Directors are appointed based on the specific governance skills required
by the Company to fill Board vacancies when they arise. The Company discloses all material information to security
holders in its possession relevant to a decision on whether or not to elect or re-elect a Director. This is achieved
primarily through the release of information contained within the Notice of Annual General Meeting of the Company
covering motions on the election and re-election of Directors.
The Company complies with Recommendation 1.2.
Council Recommendation 1.3: A listed entity should have a written agreement
with each director and senior executive setting out the terms of their
appointment.
All new Directors and Senior Executives are provided with a letter of appointment setting out terms of the appointment,
which include the Company’s expectations, their individual responsibilities, rights and terms and conditions of their
employment. By way of induction, new Directors and Executives meet with the Chairman and Company Secretary upon
appointment. These briefings cover the operation of the Board and its Committees and financial, strategic, operations
and risk management issues.
The Company complies with Recommendation 1.3.
Council Recommendation 1.4: The Company Secretary of a listed entity should
be accountable directly to the Board, through the Chair, on all matters to do
with the proper functioning of the Board.
The Board has designated the Company Secretary as the Officer responsible for oversighting all governance matters
and coordinating disclosure of information to the ASX as well as communicating with the ASX. The Company Secretary
is responsible for ensuring that all Company announcements are made in a timely manner and are factual and do not
omit any material information. In addition, the Company Secretary is also responsible for the following matters:
•
•
•
•
•
•
advising the Board and its Committees on all governance matters;
monitoring of Board policy and procedures to ensure compliance standards are met by the Company;
ensuring the business of the Board/Committee meetings are accurately recorded in official Minutes and
disseminated in a timely manner;
overseeing and coordinating information disclosure to the ASX, security holders, analysts, brokers, the media and
the public;
advising Directors and staff on the Company’s governance and disclosure policies and raising awareness of
the principles underlying continuous disclosure; and
facilitating the induction and professional development of new Directors and Executives.
The Company complies with Recommendation 1.4.
The accompanying notes form part of these financial statements.
65
XTEK Limited and Controlled Entities
Corporate Governance Statement
Council Recommendation 1.5: A listed entity should have a disclosable
diversity policy which includes requirements to set measurable objectives for
achieving gender diversity.
The Company is committed to providing a safe working environment and equal employment opportunities for all
Directors, executives and employees at all levels within the Company. Whilst the Company is not subject to the
provisions of The Workplace Gender Equality Act, in that it employs less than 100 employees, it does recognise the
importance of diversity within the workplace.
The Company operates as an equal opportunity Employer and selects personnel based upon the principle of the best
person for the role/job, irrespective of gender, age, sexual orientation, ethnicity, marital or family status and religious
or cultural background. The Company Code of Conduct defines that discrimination, harassment, vilification and
victimisation cannot and will not be tolerated. Recruitment and selection practices at all levels are appropriately
structured to ensure all candidates are considered and that no conscious or unconscious biases are applied against
certain candidates.The Company is a small business enterprise with less than 60 personnel overall (inclusive of the
Board). None-the-less, the Company has successfully employed a number of women to management roles in recent
years.
Whilst the Company does not comply with Recommendation 1.5 fully, it nonetheless applies many of the core principles
through its Code of Conduct provisions.
Council Recommendation 1.6: A listed entity should have and disclose a
process for periodically evaluating the Board, Committees and individual
Directors and disclose for the reporting period whether a performance
evaluation has been undertaken.
The Nomination Committee of the Board is responsible for the conduct of a performance review of the Board (both
collectively and individually) and the Chief Executive Officer. This is an annual evaluation process and is based on a number
of goals for the Board and the individual Directors that have been established in the preceding year. The goals are
based on the role of the Board and individual Directors as well as corporate objectives and any areas for improvement
identified in previous reviews. The assessment of the performance of individual Directors is undertaken by the Nomination
Committee, with the Chairman meeting privately with each Director, Company Secretary and the Chief Executive Officer
to discuss their annual assessment. Performance assessment was conducted during the FY21 reporting period, with
the Chairman meeting will all Directors and the Company Secretary.
The Company complies with Recommendation 1.6.
Council Recommendation 1.7: A listed entity should have and disclose a
process for periodically evaluating the performance of its senior executives and
disclose for the reporting period whether a performance evaluation has been
undertaken.
The performance of senior executives is reviewed regularly through the application of a Performance Appraisal Program
(PAP) that defines appropriate evaluation measures to be applied in the assessment process. Each year senior
executives establish a set of performance targets. These targets are aligned to overall business goals and the
Company’s requirements of the position. The PAP is administered annually for all senior executives with the Chief
Executive Officer being responsible for their individual assessment and subsequent reporting of outcomes to the Board.
The Nomination Committee of the Board is responsible for the performance assessment of the Chief Executive Officer,
Company Secretary and the Chief Financial Officer in accordance with contractual performance measures and deliverables.
An informal review of the PAP outcomes for other senior executives and staff is carried out annually by the Human
Resource and Remuneration Committee. Performance assessment was conducted for all senior executives during the
The accompanying notes form part of these financial statements.
66
FY21 reporting period. A statement outlining specific matters reserved for the Board and Executive Management are
contained in the Board Charter, a copy of which is posted on the Company’s website at the Corporate Governance Section.
The Company complies with Recommendation 1.7.
Principle 2: Structure of the board to add value
Council Recommendation 2.1: The Board of a listed entity should have a
Nomination Committee
Nomination Committee
The role of the Nomination Committee is to help achieve a structured Board that adds value to the Company by ensuring
an appropriate mix of skills are present in Directors on the Board at all times. Under the Company’s Constitution, the
Board shall be comprised of not less than three and no more than twelve Directors, unless otherwise determined by a
general meeting. In consideration of the size of the Company and the Board, the Directors have resolved that the Board
as a whole shall comprise the Nomination Committee.
Members of the Nomination Committee during the reporting period were:
•
•
•
•
•
•
•
Mr. Uwe Boettcher (Chair);
Mr. Chris Fullerton;
Mr. Philippe Odouard;
Mr. Christopher Pyne;
Mr. Robert Quodling;
Mr. Ivan Slavich; and
Mr. Mark Smethurst
Role of Nomination Committee
The role of the Nomination Committee is to:
•
•
•
•
•
Review the structure, size and composition of the Board;
Identify, consider and select candidates with appropriate capabilities, to fill Board vacancies when they arise;
Ensure that candidates have adequate time available to fulfil their role as a Director;
Undertake or arrange for annual performance evaluation of the Board, its committees and Directors, and
Review the:
-
-
-
continuation of the Chairman after the initial term of appointment and subsequent re-appointments;
re-election of Directors who retire by rotation; and
membership of committees.
Director Selection and Appointment
The Board has adopted a policy as developed by the Nomination Committee for the selection and appointment of
Directors. This policy defines procedural processes for the appointment of Directors and the re-election of incumbent
Directors. Directors are appointed based on the specific governance skills required by the Company. Given the size of
the Company and the business that it operates, the Company aims at all times to have at least one Director with
experience in the industry, appropriate to the Company’s market. If the need for a new Board member is identified, the
Nomination Committee, may initiate a search or nominate eligible candidates, who are interviewed by the Chairman
and considered by the Board. The Board then appoints the most suitable candidate, who must stand for election at the
next general meeting of security holders.
The accompanying notes form part of these financial statements.
67
XTEK Limited and Controlled Entities
Corporate Governance Statement
Access to independent Professional Advice
To ensure that Directors have access to independent expertise necessary to effectively carry out their role as a Director
of the Company, the Board has adopted a policy to allow Directors to seek independent professional advice at the
Company’s expense, up to specified limits, to assist them to carry out their responsibilities.
The Company complies with Recommendation 2.1.
Council Recommendation 2.2: A listed entity should have and disclose a Board
skills matrix setting out the mix of skills and diversity that the Board currently
has or is seeking to achieve in its membership.
The current Board is comprised of four Directors who possess a wide range of background skills, expertise and
knowledge deemed appropriate for the Company’s industry type. The names of Directors in office and their term in
office at the date of this statement and their standing as Executive or Non-Executive and independence, are on the
Board of Directors page of XTEK’s website.
The Company complies with Recommendation 2.2.
Council Recommendation 2.3: A listed entity should disclose the names of the
Directors considered by the Board to be independent, if they have a relevant
interest and their length of service.
The Board considers independent decision-making as critical to effective governance and to meet the ASX Corporate
Governance Council Recommendations. Independent Directors are identified by their profiles in the 2021 Annual
Report. These profiles detail the skills, experience, and expertise relevant to the position of Director, and the terms of
office held by the Director and also the status of each Director in relation to the criteria listed below. Unless otherwise
stated, the Board does not consider a Director to be an independent Director of the Company if the Director:
•
•
•
•
•
•
•
is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial
shareholder of the Company;
is employed, or within the last three years, has been employed in an executive capacity by the Company, and there
has not been a period of at least three years between ceasing such employment and serving on the Board;
has within the last three years, been a principal of a material professional adviser or a material consultant to the
Company, or an employee materially associated with the service provided;
is a material supplier or customer of the Company or another group m ember, or an officer of or otherwise
associated directly or indirectly with a material supplier or customer;
has a material contractual relationship with the Company other than as a Director of the Company;
has served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the
Director’s ability to act in the best interests of the Company; and
is not free from any interest and any business or other relationship which could, or could reasonably be perceived
to materially interfere with the Director’s ability to act in the best interests of the Company.
The accompanying notes form part of these financial statements.
68
Similarly, the Board has adopted a policy that the Chair should be an independent Director. However due to changes to
the Board in 2009, Mr. Boettcher was appointed as a Director (Non-executive) and Chairman of the Company. Mr.
Boettcher, as a Director of a major shareholder of the Company, does not meet the Company’s criteria for
independence. The Company further recognises that Independent Directors are important in assuring shareholders that
the Board is properly fulfilling its role, therefore, in addition to being a Non-executive Directors, Messrs. Fullerton, Pyne
and Slavich also met the criteria for independence during the reporting period for FY2021.
The Company partially complies with Recommendation 2.3.
Council Recommendation 2.4: A majority of a Board of a listed entity should
be independent Directors
Under the Company’s Constitution, the Board is to be comprised of not less than three and no more than twelve
Directors, unless otherwise determined by a general meeting. The Board currently consists of three Non-executive
Directors and two Executive Directors.
To add value to the Company, the Board has been formed so that it has effective composition, size and commitment to
adequately discharge its responsibilities and duties. The names of the Directors and their qualifications and experience
are stated in their Director Profiles that form part of the 2021 Annual Report along with the term of office held by each of
the Directors. Directors are appointed based on the specific governance skills required by the Company and on the
independence of their decision-making and judgment. The Company recognises the importance of Non-Executive
Directors and the external perspective and advice that Non-Executive Directors can offer. Messrs Boettcher, Fullerton
Pyne, Slavich and Smethurst served as Non-Executive Directors during the reporting period for FY2021. The Company
further recognises that Independent Directors are important in assuring shareholders that the Board is properly fulfilling its
role, therefore, in addition to being a Non-executive Director, Messrs. Fullerton, Pyne and Slavich also met the criteria for
independence during the reporting period for FY2021.
The Board has a specific Code of Conduct for Directors and Senior Management. As part of this, where any Director has
a material personal interest in a matter, the Director will not be permitted to be present during discussions or to vote on
the matter. The enforcement of this requirement should ensure that the interest of shareholders, as a whole, are pursued
and not jeopardised by a lack of a majority of independent Directors. The independence of Non-Executive Directors is
assessed annually by the Nomination Committee.
The Company currently complies with Recommendation 2.4.
Council Recommendation 2.5: The Chairperson of a listed entity should be an
independent Director and, in particular should not be the same person as the
Chief Executive Officer of the entity.
Independence of Chairman
Whilst the Board recognises the importance of independence in decision-making, Mr. Boettcher, as a Director of
a major shareholder of the Company, does not meet the criteria for independence as a Director (Non-Executive) and
Chairman. Although Mr. Boettcher has a substantial interest as a Director of a major shareholder of the Company, the
Board believes due to his extensive business experience and knowledge, it is appropriate for Mr. Boettcher to remain
on the Board in his current position as Chairman.
The Company does not comply with this independence requirement.
The accompanying notes form part of these financial statements.
69
XTEK Limited and Controlled Entities
Corporate Governance Statement
Roles of Chairman and Chief Executive Officer
The roles of Chairman and the Chief Executive Officer are not exercised by the same individual.
The Company complies with this independence requirement.
Council Recommendation 2.6: A listed entity should have a program for
inducting new Directors and provide appropriate professional development
opportunities for Directors to develop and maintain skills and knowledge needed
to perform their role as Directors effectively.
The Board has designated the Company Secretary as the Officer responsible for facilitating the induction and professional
development of new Directors. By way of induction, new Directors meet with the Chairman and Company Secretary
upon appointment, whereby briefings are given on the operation of the Board and its Committees and financial, strategic,
operations and risk management issues applicable to the Company. The Company Secretary provides all new
Directors with a comprehensive induction package covering Company policies and procedures that are applicable to all
Directors and employees. As part of their ongoing professional development, new Directors may be required to
complete a Company Directors Course as conducted by the Australian Institute of Company Directors.
The Company complies with Recommendation 2.6
Principle 3: Promote ethical and responsible decision-making
Council Recommendation 3.1: A
disclose its values
listed entity should articulate and
The Company is committed to conducting all its busines activities honestly with a high level of integrity, and in compliance
with all applicable laws, rules and regulations. The Board is dedicated to the ongoing maintenance of high ethical standards
and has established a Company Code of Conduct to guide compliance with legal and other obligations to all legitimate
stakeholders. These stakeholders include shareholders, employees, customers, government authorities, creditors and
the community as whole. All Directors, senior executives and employees are made aware of the existence of the
Company Code of Conduct and are requested to confirm they have read it.
The Company complies with Recommendation 3.1.
Council Recommendation 3.2: A listed entity should have and disclose a code
of conduct for its Directors, senior executives and employees and that the Board
is informed of any material breaches of that code.
Company Code of Conduct
As part of its commitment to recognising the legitimate interests of stakeholders, the Company has established a Code
of Conduct that applies to all Directors, senior executives and employees.
The Company’s Code of Conduct gives guidance on the following.
•
Ethical Standards: All Directors, senior executives and employees are expected to act with the utmost honesty
and integrity, striving at all times to enhance the reputation and performance of the Company.
The accompanying notes form part of these financial statements.
70
•
•
•
•
Responsibilities to Shareholders and the Financial Community Generally: The Company complies with the spirit
as well as the letter of all laws and regulations that govern shareholders’ rights. The Company has processes
in place designed to ensure the truthful and factual presentation of the Company’s financial position and prepares
and maintains its accounts fairly and accurately in accordance with the generally accepted accounting and
financial reporting standards.
Responsibilities to Clients, Customers and Consumers: Each employee has an obligation to use their best efforts
to deal in a fair and responsible manner with each of the Company’s clients, customers and consumers. The
Company for its part is committed to providing clients, customers and consumers with fair value.
Employment Practices: The Company is committed to providing a safe workplace environment in which there
is equal opportunity for all employees at all levels of the Company. The Company does not tolerate the offering
or acceptance of bribes or the misuse of Company assets or resources.
Obligations Relative to Fair Trading and Dealing: The Company aims to conduct its business fairly and to compete
ethically and in accordance with relevant competition laws. The Company strives to deal fairly with the Company’s
customers, suppliers, competitors and other employees and encourages its employees to strive to do the same.
•
Responsibilities to the Community: As part of the community the Company:
-
-
is committed to conducting its business in accordance with applicable environmental laws and regulations
and encourages all employees to have regard for the environment when carrying out their jobs; and
encourages all employees to engage in activities beneficial to their local community.
Responsibility to the Individual: The Company is committed to keeping private information from employees, clients,
customers, consumers and investors confidential and protected from uses other than those for which it was
provided.
Conflicts of Interest: Employees and Directors must avoid conflicts as well as the appearance of conflicts between
personal interests and the interests of the Company.
How the Company Complies with Legislation: Within Australia, the Company strives to comply with the spirit and
the letter of all legislation affecting its operations. Outside Australia, the Company will abide by local laws in
all countries in which it operates. Where those laws are not as stringent as the Company’s operating policies,
particularly in relation to the environment, workplace practices, intellectual property and the giving of “gifts”,
Company policy will prevail.
How the Company Monitors and Ensures Compliance with its Code of Conduct: The Board, management and
all employees of the Company are committed to implementing this Code of Conduct and each individual is
accountable for such compliance. Disciplinary measures may be imposed for violating the Code.
•
•
•
•
The Company’s Code of Conduct policy is posted on the Company’s website at the Corporate Governance
Section.
The Company complies with Recommendation 3.2
The accompanying notes form part of these financial statements.
71
XTEK Limited and Controlled Entities
Corporate Governance Statement
Council Recommendation 3.3: A listed entity should have and disclose a
whistleblower policy and that the Board is informed of any material incidents
under that policy.
The Company’s Whistleblower Policy which forms part of the Code of Conduct provides for the reporting of unlawful and
unethical behaviour by Directors, Senior Executives and Employees of the Company.
These provisions allow for whistleblower protection in accordance with legislative requirements and good practice
recommendations. The policy aims to provide a working environment that enables employees to voice genuine concerns
in relation to:
-
-
-
-
-
-
-
breaches of relevant legislation;
breaches of the Company’s vision and values;
financial misconduct or impropriety or fraud;
failure to comply with legal obligations;
danger to health and safety or the environment;
criminal activity; and
attempts to conceal any of the above.
Any material breaches of the Whistleblower Policy as defined by the Company are reported to the Board.
The Company complies with Recommendation 3.3
Council Recommendation 3.4: A listed entity should have and disclose an anti-
bribery and anti-corruption policy and that the Board is informed of any material
breaches of that that policy.
The Company’s Anti-Bribery and Anti-Corruption Policy forms part of the TRACE International Code of Conduct that
has been adopted by the Company. This policy provides guidance on the conduct of commercial transactions that may
involve the following risks:
-
-
-
-
bribery and facilitation of payments or extortion;
kick-backs/granting of a benefit;
conflicts of interest; and
political and philanthropic contributions.
The Company complies fully with this international policy and undertakes annual anti-bribery and anti-corruption training
with TRACE International. Any material breaches of this policy are reported to the Board and to TRACE International.
The Company complies with Recommendation 3.4
The accompanying notes form part of these financial statements.
72
Principle 5: Safeguard integrity in financial reporting
Council Recommendation 4.1: The Board of a listed entity should have an
Audit Committee.
Finance, Audit and Risk Management Committee
The Finance, Audit and Risk Management (formerly Audit) Committee was originally formed by resolution of the
Board on 4 September 2006. Below is a summary of the role, composition and responsibilities of the Finance,
Audit and Risk Management Committee.
Responsibilities
The Finance, Audit and Risk Management Committee reviews the audited annual and half-yearly financial statements
and any reports which accompany published financial statements before submission to the Board and recommends
their approval.
The Finance, Audit and Risk Management Committee also recommends to the Board the appointment of the external
auditor and the internal auditor and, each year, reviews the appointment of the external auditor, their independence, the
audit fee and any questions of resignation or dismissal. The Finance, Audit and Risk Management Committee is
responsible for establishing policies on risk oversight and management. The responsibilities of the Finance, Audit and
Risk Management Committee include:
•
•
•
•
•
•
•
•
•
Reviewing audit reports to ensure that where major deficiencies or breakdowns in controls or procedures have
been identified, appropriate and prompt remedial action is taken by management;
Liaising with the auditors and ensuring that the annual statutory audits are conducted in an effective manner;
Monitoring management efforts to continuously improve the quality of the accounting function;
Reviewing the half-year and annual reporting and financial statements prior to lodgment of those documents with
the Australian Securities Exchange and to make the necessary recommendations to the Board for the approval
of these documents;
Providing the Board with additional assurance regarding the reliability of financial information for inclusion in
the financial reports;
Recommending to the Board the appointment, removal and remuneration of the external auditors, and reviewing
the terms of their engagement the scope and quality of the audit;
Assessing the attention being given by management to matters likely to impact on the financial performance
of the Company, including monitoring of compliance with laws and regulations and monitoring and control of
business risks;
Management information and other systems of internal control and risk management; and
Ethical policies and practices for corporate conduct are in place and being adhered to.
The auditors, the Chief Financial Officer and Company Managers may be invited to the Finance Audit and Risk
Management Committee meetings at the discretion of the Committee Chair.
Composition
The Finance, Audit and Risk Management (FARM) Committee currently consists of five members. Members are
appointed by the Board from amongst the Directors. Members of the FARM Committee during the reporting period
were Messrs. Boettcher, Fullerton, Odouard, Pyne, Quodling, Slavich and Smethurst. Mr. Fullerton is the current Chair.
All members can read and understand financial statements and are otherwise financially literate. The details of the
member’s qualifications may be found in their Director profiles that form part of the Annual Report.
The accompanying notes form part of these financial statements.
73
XTEK Limited and Controlled Entities
Corporate Governance Statement
Charter
A formal charter for the Finance, Audit and Risk Management (formerly Audit) Committee was originally established by
resolution of the Board on 4 September 2006. This charter defines the role and responsibility of the Audit, Finance
and Risk Management Committee together with procedures for the selection and appointment of external auditors and
rotation of engagement partners and is posted on the Company’s web site. The Board, with the involvement of the
Finance, Audit and Risk Management Committee, has established procedures in relation to the external auditor selection
and appointment and for discussing with the auditor the rotation of the lead partner. The current external Auditor as
appointed by the Board is Hardwickes Chartered Accountants.
Further details are contained in the Finance, Audit and Risk Management Committees Charter, which is available on
the Company’s website at the Corporate Governance Section.
The Company complies with Recommendation 4.1.
Council Recommendation 4.2: The Board of a listed entity should before it
approves the entity’s financial statements for a financial period, receive
assurance from the Chief Executive Officer and Chief Financial Officer a
declaration, that in their opinion, the financial statements comply with the
appropriate accounting standards and give a true and fair view of the financial
position and performance of the entity and that the opinion has been formed
on the basis of a sound system of risk management and internal control which
is operating effectively.
Management Attestation
At the time the Board reviews the draft half year and full year financial statements and reports, the Chief Executive
Officer and Chief Financial Officer are required to provide a signed declaration that the statements and reports are
founded on a sound system of risk management and internal compliance and control that implements the policies adopted
by the Board, and that the Company’s risk management and internal compliance and control is operating efficiently and
effectively in all material respects.
On 28 September 2021, the Chief Executive Officer and the Chief Financial Officer declared to the Board that the risk
management and internal compliance and control systems were operating efficiently and effectively in all material
respects. Their statement has assured the Board that the financial statements are founded on a sound system of risk
management and internal compliance.
The Company complies with Recommendation 4.2.
Council Recommendation 4.3: A listed entity should disclose its process to verify
the integrity of any periodic corporate report, it releases to the market that is not
audited or reviewed by an external auditor.
The Company ensures that all of its periodic corporate reports (Half Year and Annual Report) it releases to the market
are firstly reviewed by Management and appropriate supporting documents and declarations are provided to the Board
for final review and approval. All financial reports are prepared in accordance accounting standards and give a true
and fair view of the financial position and performance of the Company. Additionally all financial reports released to
the market are subject to review by an external auditor and that the Auditor’s Report forms part of all Company
financial reports released to the market.
The Company complies with Recommendation 4.3.
The accompanying notes form part of these financial statements.
74
Principle 5: Make timely and balanced disclosures
Council Recommendation 5.1: A listed entity should have and disclose its
written policy for complying with continuous disclosure obligations under
ASX Listing Rule 3.1.
Continuous Disclosure
It is the policy of the Company to act at all times with integrity and in accordance with law, including the disclosure required
of:
•
•
•
•
Australian Securities Exchange (ASX) L isting Rules;
ASX Guidance Notes;
ASX Corporate Governance Council Recommendations; and
Corporations Act 2001.
In accordance with the ASX Listing Rules, the Company immediately notifies the ASX of information:
•
•
concerning the Company that a reasonable person would expect to have a material effect on the price or value
of the Company’s securities; and
that would, or would be likely to, influence persons who commonly invest in securities in deciding whether
to acquire or dispose of the Company’s securities.
The only exception to this is where the ASX Listing Rules do not require such information to be disclosed. Upon confirmation
of receipt from the ASX, the Company posts all information disclosed in accordance with this policy on the Company’s
website in an area accessible by the public.
The Board has designated the Company Secretary as the person responsible for overseeing and coordinating disclosure
of information to the ASX as well as communicating with the ASX. The Company Secretary is responsible for ensuring
that all Company announcements are made in a timely manner and are factual and do not omit any material information.
The Company Secretary is also responsible for ensuring that all announcements are expressed in a clear and objective
manner that allows investors to assess the impact of the information when making investment decisions.
To assist the Company Secretary to fulfil the Company’s disclosure requirements, all business unit managers are
responsible for immediately communicating to the Chief Executive Officer and Company Secretary any possible continuous
disclosure matter concerning their business unit. The manager of each business unit is required to promptly respond to
requests from the Company Secretary for further information concerning possible continuous disclosure matters.
The Company Secretary’s role includes:
•
•
•
overseeing compliance with the continuous disclosure requirements in the ASX Listing Rules;
overseeing and coordinating information disclosure to the ASX, shareholders, analysts, brokers, the media and
the public; and
advising Directors and staff on the Company’s disclosure policies and procedures and raising awareness of
the principles underlying continuous disclosure.
The accompanying notes form part of these financial statements.
75
XTEK Limited and Controlled Entities
Corporate Governance Statement
Price sensitive information is publicly released through the ASX before disclosing it to analysts or others outside
the Company. Further dissemination to investors through the ASX website and other information providers is also
managed through the ASX.
The Company’s Continuous Disclosure policy is posted on the Company’s web site at the Corporate Governance Section.
The Company complies with Recommendation 5.1.
Council Recommendation 5.2: A listed entity should ensure its Board receives
copies of all market announcements promptly after they have been made.
In accordance with the Company’s Continuous Disclosure Policy, all members of the Board are provided with material
market announcements promptly after they have been made. This information is also disseminated to all staff.
The Company complies with Recommendation 5.2
Council Recommendation 5.3: A listed entity that gives a new or substantive
investor or analyst presentation should release a copy of the presentation
materials on the ASX Market Announcements Platform ahead of the presentation
being undertaken.
The Company ensures that all substantive investor or analyst presentations are firstly released on the ASX Market
Announcements Platform prior to any presentation being made to select investor audiences.
The Company complies with Recommendation 5.3
Principle 6: Respect the right of security holders
Council Recommendation 6.1: A listed entity should provide information about
itself and its governance to investors via its website.
The Company aims to ensure that investors are kept informed of all major developments affecting the state of affairs of
the Company and its governance regime via its website. Information currently available to investors through the
Company’s website, which has a dedicated investor relations section, includes the following:
•
•
•
•
•
•
the names and brief biographical information of Directors and senior executives;
the Company Constitution, Board/Committee Charters and corporate governance polices;
the Annual Report and the Interim Report;
disclosures made to the Australian Securities Exchange;
notices and explanatory memoranda of annual and extraordinary general meetings; and
regular newsletters or market updates to security holders where appropriate.
The Company complies with Recommendation 6.1.
The accompanying notes form part of these financial statements.
76
Council Recommendation 6.2: A listed entity should have an investor relations
program that facilitates effective two-way communications with investors.
The Company recognises the importance of effective communications with investors and recently introduced a new
Investor Relation program to facilitate enhanced communication with both security holders and investors. The Board
has subsequently appointed a new Chief Executive Officer, who is now responsible for managing this program. Mr
Philippe Odouard is currently appointed to this position. To facilitate the effective communication with investors, the
Company is committed to:
•
•
communicating effectively with
Company’s website and information mailed to security holders and the general meetings of the Company; and
investors and security holders through releases to the market via ASX, the
providing investors and security holders with ready access to balanced and relevant information about the
Company and corporate proposals.
The Company website also includes a feedback mechanism and an option for investors and security holders to register
their email address for direct email updates of Company matters.
The Company complies with Recommendation 6.2.
Council Recommendation 6.3: A listed entity should disclose how it facilitates
participation at meetings of security holders.
The Company encourages full participation of security holders at the Annual General Meeting to ensure a high level
of accountability and identification with the Company’s strategy and goals. Important issues are presented to security
holders as single resolutions at general meetings. In order to make it easy for security holders to participate in general
meetings of the Company, a direct voting facility has been put in place so as to allow security holders to vote ahead
of the meeting without having to attend or appoint a proxy.
The Company complies with Recommendation 6.3.
Council Recommendation 6.4: A listed entity should ensure that all substantive
resolutions at a meeting of security holders security holders are decided by a poll
rather than by a show of hands
The Company encourages all security holders to exercise their option of communicating electronically during the conduct
of general meetings of the Company. In 2020, due to COVID-19 lockdowns being imposed by Government authorities, the
Company arranged for all security holders to vote on all resolutions by electronic polling as opposed to a show of hands
process. Given the success of this process, it is intended that the same arrangements will be put in place for the 2021 AGM
of the Company.
The Company complies with Recommendation 6.4.
Council Recommendation 6.5: A listed entity should give security holders the
options to receive communications from, and send communications to, the
entity and its security registry electronically.
The Company encourages all security holders to exercise their option of receiving communications electronically from
the Company and its security registry. This allows for the dissemination of Company information to security holders in a
timely and cost- effective manner. The Company in conjunction with its contracted security registry, routinely issues
notices and financial reports electronically to those security holders that have registered for this service. The Company
has developed formal policy for promoting electronic communication with shareholders.
The Company complies with Recommendation 6.5.
The accompanying notes form part of these financial statements.
77
XTEK Limited and Controlled Entities
Corporate Governance Statement
Principle 7: Recognising and managing risk
Council Recommendation 7.1: The Board of a listed entity should have a
committee to oversight material business risks and disclose the charter and
policies of such a committee.
The Board’s Charter clearly establishes that it is responsible for ensuring there is a sound system for oversighting,
assessing and managing risk. The Board has delegated certain responsibilities in these matters to the Finance Audit and
Risk Management Committee. In compliance with the Board’s approach, the Company has established specific
policies and procedures to identify, assess and manage critical areas of financial and operating risk.
The Company’s Risk Management policy is posted on the Company’s website at the Corporate Governance Section.
The Company complies with Recommendation 7.1.
Council Recommendation 7.2: The Board or a committee of the Board should
review the entity’s risk management framework at least annually to satisfy
itself that it continues to be sound and that the entity is operating with due regard
to the risk appetite set by the Board and subsequently disclose the findings of the
review.
The Board has delegated the responsibilities of conducting an annual review of the entity’s risk management to the Finance
Audit and Risk Management Committee. All such reviews are conducted in accordance with established risk management
policy and take into account the formal Management Statement as provided by the Chief Executive Officer and the Chief
Financial Officer on an annual basis.
Management Statement
The Chief Executive Officer and the Chief Financial Officer are required to provide a signed Management Statement to
the Board on an annual basis with regard to the risk management and internal control systems of the Company. This
statement requires the Chief Executive Officer and the Chief Financial Officer to confirm or declare otherwise:
•
•
•
that the risk management and internal compliance and control systems in all material respects implements the
policies adopted by the Directors;
that the risk management and internal compliance and control systems to the extent they relate to material business
risks are operating effectively and efficiently in all material respects, based on the risk management framework
adopted by the Company; and
that nothing has come to their attention that would indicate any material change to the statements as made in
relation to risk management and compliance.
On 28 September 2021, the Chief Executive Officer and the Chief Financial Officer provided the Board with a written
assurance that the risk management and internal compliance and control systems were operating efficiently and
effectively in all material respects. Their statement has assured the Board that risk management and internal
compliance and control systems are sound.
The Company complies with Recommendation 7.2.
The accompanying notes form part of these financial statements.
78
Council Recommendation 7.3: A listed entity should disclose if it has an internal
audit function, how the function is structured and what role it performs.
The Company has established an internal audit function that applies a systematic and disciplined approach to evaluating
and continually improving the effectiveness of quality systems covering risk management and internal control measures.
All internal audit functions are conducted throughout the year on a program authorised by the Chief Executive Officer.
Findings and observations from internal audits are reported to the Chief Executive Officer and Company Secretary for
subsequent corporate and Board action as required. Internal audits performed by the Company are subject to an annual
quality systems assurance review by an external auditor. Failure to meet the requisite audit standards could result in a
loss of quality systems accreditation by the Company.
The Company complies with Recommendation 7.3.
Council Recommendation 7.4: A listed entity should disclose whether it has
any material exposure to economic, environmental and social sustainability risks
and how it manages or intends to manage those risks.
The Company manages material exposure concerns associated with economic, environmental and social sustainability
risks as part of its overall risk management strategies as defined in relevant risk policy and procedures. In the course of
conducting its business as a listed entity and recognising the legitimate interests of stakeholders, the Company also
utilises policy contained within its Code of Conduct Policy to guide compliance with legal and other obligations to legitimate
stakeholders. These stakeholders include security holders, Directors, employees, customers, government authorities,
creditors and the community as whole. The Company’s Code of Conduct gives guidance on the following.
•
•
•
•
Ethical Standards: All Directors, senior executives and employees are expected to act with the utmost honesty
and integrity, striving at all times to enhance the reputation and performance of the Company.
Responsibilities to security holders and the financial community: The Company complies with the spirit as well
as the letter of all laws and regulations that govern business operations. The Company has processes in
place designed to ensure the truthful and factual presentation of the Company’s financial position and prepares
and maintains its accounts fairly and accurately in accordance with the generally accepted accounting and
financial reporting standards.
Responsibilities to Clients, Customers and Consumers: Each employee has an obligation to use their best efforts
to deal in a fair and responsible manner with each of the Company’s clients, customers and consumers. The
Company for its part is committed to providing clients, customers and consumers with fair value.
Obligations Relative to Fair Trading and Dealing: The Company aims to conduct its business fairly and to compete
ethically and in accordance with relevant competition laws. The Company strives to deal fairly with the Company’s
customers, suppliers, competitors and other employees and encourages it employees to strive to do the same.
•
Responsibilities to the Community: As part of the community the Company:
-
-
is committed to conducting its business in accordance with applicable environmental laws and regulations
and encourages all employees to have regard for the environment when carrying out their jobs; and
encourages all employees to engage in activities beneficial to their local community.
•
How the Company Complies with Legislation: Within Australia, the Company strives to comply with the spirit and
the letter of all legislation affecting its operations. Outside Australia, the Company will abide by local laws in
all countries in which it operates. Where those laws are not as stringent as the Company’s operating policies,
particularly in relation to the environment, workplace practices, intellectual property and the giving of “gifts”,
Company policy will prevail.
The accompanying notes form part of these financial statements.
79
XTEK Limited and Controlled Entities
Corporate Governance Statement
The Company has developed a formal policy for recognising and managing risk, this policy is publicly available
and published on the Company’s website.
The Company complies with Recommendation 7.4
Principle 8: Remunerate fairly and responsibly
Council Recommendation 8.1: The Board of a listed entity should have a
Remuneration Committee and disclose the charter of the committee.
Remuneration Committee
The role of the Committee is to review and make recommendations to the Board on remuneration packages for the
Chief Executive Officer, Executive Directors, Company Secretary and other senior executives. In addition, the
committee has an objective to ensure that the Company maintains a system of human resource management practices
that recognises the Company’s staff as an important asset of the Company and that human resource practices meet
legislative requirements for current and future business needs. This role also includes responsibility for share option
schemes, incentive performance packages and retirement and termination entitlements. Remuneration levels are
competitively set to attract suitably qualified and experienced directors and senior executives. The Committee may
obtain independent advice on the appropriateness of remuneration packages.
Composition
The Human Resource and Remuneration Committee currently consists of the Board. Mr. Smethurst is the current
Chair. The details of the member’s qualifications may be found in their Director profiles published on the Company’s website.
The Company complies with Recommendation 8.1
Council Recommendation 8.2: A listed entity should separately disclose its
the
policies regarding the
remuneration of Executive Directors and Senior Executives.
remuneration Non-Executive Directors and
Remuneration Practice
The Board has determined that Non-Executive Directors will be remunerated differently from Executive Directors and
Senior Executives in the following ways:
Remuneration of Non-Executive Directors
Non-Executive Directors are remunerated by fixed annual fees, superannuation, and at various times may also be
remunerated at agreed hourly rates, for additional time expended in the performance of authorised tasks that are in
addition to their normal Director functions.
The level of annual Directors’ fees is reviewed by the Human Resources and Remuneration Committee, taking into
account a number of factors, including the range of Directors’ fees paid in the market, and the Company’s costs and
operating performance. Non-executive Directors will receive fees in the form of cash fees and statutory superannuation.
The maximum total for annual fees for Directors is approved from time to time by security holders in a general meeting.
This is currently set at $500,000 per annum as approved by security holders on 29 November 2019.
The accompanying notes form part of these financial statements.
80
Non-Executive Directors may also, in view of the Company’s size and resources, from time-to-time be issued options
as part of their remuneration in place of a higher cash fee. Options would be issued after consideration by the
Human Resource and Remuneration Committee and the Board and subject to security holder approval.
Executive Directors and S e nio r Executives
Under the Company’s constitution, remuneration of Executive Directors, subject to other provisions in any contract
between these executives and the Company, may be by way of fixed salary, performance based bonus or participation
in the profits of the Company but may not be by way of commission on or percentage of operating revenue. Other
senior executives, including the Chief Executive Officer, Chief Financial Officer and the Company Secretary may be
remunerated by fixed salary and performance based bonuses. Remuneration packages will generally be set to be
competitive to both retain and attract experienced executives to the Company.
Where packages comprise a fixed element and variable incentive components, the variable components will depend
on Company and personal performance. Short term incentives may include annual cash incentives on meeting specific
profit and performance criteria that have been agreed in plans set with the Chief Executive Officer and the Board. Criteria
to be met may include Company and or business unit profit performance and personal Key Performance Indicators. The
amount of the incentive will depend upon the extent that the measure is exceeded. These conditions help to ensure that
the short-term incentives are aligned with the interests of security holders in the current period. The total cost of Directors
and senior executive remuneration packages for FY 2021, including the fair value of options, is listed in the Directors
Report and Financial Statements of the 2021 XTEK Annual Report.
The Company complies with Recommendation 8.2
Council Recommendation 8.3: A listed entity which has an equity-based
remuneration scheme should have and disclose policy on participation in
such a scheme.
The Company has approved equity-based incentive schemes in place to remunerate directors, senior executives and staff.
The Board has determined that all approved issues of securities made to directors and employees of the Company
under equity-based incentive schemes are disclosed to security holders and investors as part of its continuous
disclosure obligations.
Policy pertaining to participation in equity-based incentive schemes by directors and employees in contained within the
Human Resources and Remuneration Committee Policy, this policy is publicly available and published on the
Company’s website.
The Company complies with Recommendation 8.3.
The accompanying notes form part of these financial statements.
81
The accompanying notes form part of these financial statements.
82