XRF Scientific Limited (XRF) 2019年年度報告「ASX」.pdf

1、 XRF SCIENTIFIC LIMITED ABN 80 107 908 314 ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 1 CONTENTS CHAIRMANS LETTER 3 DIRECTORS REPORT 4 AUDITORS INDEPENDENCE DECLARATION 17 CONSOLIDATED STATEMENT OF PROFIT 18 OR LOSS AND OTHER COMPREHENSIVE INCOM

2、E CONSOLIDATED STATEMENT OF 19 FINANCIAL POSITION CONSOLIDATED STATEMENT OF 20 CHANGES IN EQUITY CONSOLIDATED STATEMENT OF 21 CASH FLOWS NOTES TO THE CONSOLIDATED 22 FINANCIAL STATEMENTS DIRECTORS DECLARATION 53 AUDITORS REPORT 54 SHAREHOLDER INFORMATION 58 CORPORATE DIRECTORY 60FINANCIAL RESULTS SU

3、MMARY 2 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT Sales up 20%Net Profit After Tax up 109%Operating Cash Flow up 380%Earnings Per Share up 100%21,05021,50824,24829,021FY16FY17FY18FY19Sales Revenue($000)1,5377941,0242,138FY16FY17FY18FY19Net Profit After Tax($000)4251568083,876FY16FY17FY18FY19Operatin

4、g Cash Flow($000)1.20.60.81.6FY16FY17FY18FY19Earnings Per Share(Cents)XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 3 CHAIRMANS LETTER Dear Fellow XRF Shareholder,After some challenging years XRFs financial performance has improved significantly with all major businesses strengthening their operations,i

5、mproving market share and generating better returns for our shareholders.Our substantial capital investment programme and a strong focus on management and consolidation of our laboratory services business in both Australia and overseas is beginning to generate the previously planned benefits which a

6、re expected to grow in the years ahead.Our Consumables business has successfully consolidated and expanded its product range and is winning new business around the world due to its high product quality and excellent customer service.Despite current trade tensions this business is well placed to reta

7、in its position as a global market leader especially with a weaker Australian Dollar.The expansion of our Precious Metals fabrication business is proceeding well with many achievements being made at our manufacturing plant in Melbourne through closer collaboration with our international sales force.

8、In particular,our relatively new German operation has developed a strong pipeline of potentially new industrial platinum business which includes exciting opportunities in the aerospace,glass and other global industries.Significantly the German business achieved monthly break-even during the second h

9、alf year and is working towards generating a consistent profit contribution going forward.Our Capital Equipment business had an excellent result with strong sales across its product range which has been updated and expanded over recent years.A further exciting new product with wide reaching potentia

10、l is under development and is expected to be in the market later this financial year.XRFs improved financial performance has seen a lift in the value of our shares,reflected in our current share price,and has allowed us to increase dividends paid to shareholders.The Board believes that XRFs sound st

11、rategy,strong management and the recent substantial investment in developing our products and operations provides us with a very solid platform for growth and improved shareholder returns.I would like to thank XRFs staff,ably led by our Managing Director,Vance Stazzonelli,for their significant effor

12、ts in positioning the company well for the future during challenging times.Finally in my first year as Chair I would like to thank my fellow directors and in particular former Chair,Ken Baxter,for their contribution,support and guidance.I am confident that XRF is well placed to grow strongly and del

13、iver improved shareholder returns over coming years.Fred S Grimwade Chairman FINANCIAL RESULTS SUMMARY 4 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT DIRECTORS REPORT Your directors present their report on the company XRF Scientific Limited and its controlled entities for the financial year ended 30 Ju

14、ne 2019.DIRECTORS The names of the directors in office at any time during or since the end of the financial year are:Fred Grimwade Vance Stazzonelli David Brown David Kiggins Ken Baxter(resigned 29 October 2018)Directors have been in office since the start of the financial year to the date of this r

15、eport unless otherwise stated.PRINCIPAL ACTIVITY The principal activity of the economic entity during the financial year was the business of manufacturing and marketing precious metal products,specialised chemicals and instruments for the scientific,analytical and mining industries.No significant ch

16、ange in the nature of these activities occurred during the year.DIVIDENDS XRF SCIENTIFIC LIMITED AND CONTROLLED ENTITIES Dividends paid to members during the financial year were as follows:2019 2018$Final dividend for the year 401,476 321,181 In addition to the above dividends,since the end of the f

17、inancial year the directors have declared the payment of a fully franked final dividend of 1 cent per share to be paid on 18 October 2019 out of retained earnings at 30 June 2019.DIRECTORS REPORT XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 5REVIEW OF OPERATIONS A review of the operations of the econom

18、ic entity during the financial year and the results of those operations found that,during the year,the economic entity continued to engage in its principal activity and the results and financial position are disclosed in the attached financial statements.The consolidated entity has produced a Net Pr

19、ofit After Tax(NPAT)of$2,137,590 for the year ended 30 June 2019,compared with$1,024,007 for the previous year.Details of the results for the financial year ended 30 June 2019 are as follows:June 2019 June 2018 Increase/(decrease)over prior year$%Total revenue and other income 29,054,08524,304,543 2

20、0 NPAT 2,137,5901,024,007 109 Basic earnings per share (cents per share)1.60.8 109 Diluted earnings per share (cents per share)1.60.8 109 Underlying profit before tax 1 3,625,0452,463,669 47 1 Non-IFRS financial information.Normalised for unusual amounts recorded in the P&L.Refer below for details:J

21、une 2019 June 2018$Profit before tax 3,151,2291,502,092 Precious metals division expansion costs 370,819743,847 Bank refinancing costs 102,997-Acquisition related costs-217,730 Underlying profit before tax 3,625,0452,463,669 OPERATING RESULTS XRF Scientific Ltd(“XRF”or“Company”)is pleased to report

22、its June 2019 full-year results to shareholders.The Company has generated revenue of$29m and a 109%increase in Net Profit After Tax to$2.14m.Underlying profit before tax has increased to$3.6m,before expensing costs associated with expansion of the Precious Metals division and debt refinancing.The Bo

23、ard has declared a final fully franked dividend of 1 cent per share,increasing the payout ratio for the year to 63%of NPAT(FY18:39%).Net cash inflow from operating activities was strong at$3.9m compared to$808k in 2018.Cash at bank has grown to$3.2m at 30 June 2019 compared to$415k at 30 June 2018.T

24、he improvement in the cash position is a result of the increased profits and a slowdown in capital equipment acquisition from the precious metals expansion.Short-term debt has decreased from$1.4m to$698k after a building loan was reallocated to long-term debt after being renegotiated.During the year

25、,$103k in borrowing costs were expensed,relating to the refinancing and movement of the Companys debt and banking facilities to HSBC.HSBCs global reach allows XRF to utilise one core bank and provides precious metals inventory funding,which is critical to our expansion in the Precious Metals divisio

26、n.DIRECTORS REPORT 6 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT OPERATING RESULTS continued The Consumables division had a strong year with profit increasing by 35%on the prior year to$2.2m.A record level of revenue was generated at$8m.During the year,several new customers were acquired as a result o

27、f the new product lines brought online from the Scancia acquisition.New mine site customers were also acquired during the period.Revenue in the June half was$3.6m compared to$3.4m in the Previous Corresponding Period(PCP).During the year ahead,we see opportunities to grow the division further throug

28、h the acquisition of new customers.The Capital Equipment division had an excellent year and delivered a profit before tax of$625k which was a 244%increase on the previous year.Revenue increased by 29%to$9.2m,as a record level order book was maintained for most of the year.The demand for new and repl

29、acement equipment has been strong in many sectors,both within Australia and internationally.A large proportion of the demand was driven by mining companies replacing older generation machines and new mine sites coming online.The first of our new generation machines,the xrFuse 6,has been in the marke

30、t now for almost five years.Our reputation for product reliability and the low cost of maintenance is assisting with sales.A new product,the Phoenix GO S,was launched in October,which is a one-position gas fusion machine and supersedes our Phoenix VFD 1000.This new machine is part of the recently la

31、unched Phoenix GO range,which uses gas only,reducing operating costs and installation complexity for customers.Product development remains a focus of the division,and we expect to launch new products during FY20.The Precious Metals division delivered a huge improvement,increasing profit to$925k from

32、$56k in the prior year.The result was driven by positive conditions in Australia,North America and Europe,as well as a large reduction in the loss from the German operations.Remanufacturing services were strong,as were new product sales,which is in line with the increased levels of fusion machines t

33、hat were sold by the Capital Equipment division.There were many advancements in the Melbourne production plant during the year.Our new equipment is being used to improve the manufacture of our existing products,as well as the development of more complicated items for customers of our German operatio

34、ns.Several complicated manufacturing capability projects came together in the last half of 2019,which opens up new revenue opportunities in the industrial platinum markets.Our primary goal in Melbourne is to continue to bring online new products into our industrial platinum portfolio,which can be ac

35、hieved with our existing team and equipment.The result from the German operations improved significantly,with the loss before tax decreasing to$371k compared to$788k in the prior year.There was a significant reduction in the loss through the year,with$247k being incurred in the first half and$124k i

36、n the second half.The second half included two months of profitability,including the maiden profit in January 2019.Revenue was$2.82m compared to$1.86m in the prior year.We are seeing success in the development of sales across all our product lines,including the primary target segment of industrial p

37、latinum products.During the year the division increased its platinum metal inventory via a loan,which resulted in a$1m increase to inventory and a corresponding increase to provisional liabilities.The new metal loan allows us to carry new platinum alloys in inventory,which is important to maintain s

38、hort lead times for customers being acquired in the precision products group.DIRECTORS REPORT XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 7OPERATING RESULTS continued Moving into FY20 we are expecting to build upon the results that were achieved in FY19 with additional revenue and profit growth.Whilst

39、 the Precious Metals division expansion remains our main focus,we are also growing our international markets for our core sample preparation products.MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR A final dividend of 1 cent per share fully franked(FY18:0.3 cents per share fully franked)was decl

40、ared on 26 August 2019,with a record date of 4 October 2019 and payment date of 18 October 2019.There were no other events subsequent to the reporting date which have significantly affected or may significantly affect the XRF Scientific Limited operations,results or state of affairs in future years.

41、LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS Likely results in the operations of the economic entity and the expected results of those operations in the future financial year have not been included in this report,as the disclosure of such information may lead to commercial prejudice to the

42、 economic entity.SIGNIFICANT CHANGES IN STATE OF AFFAIRS There have been no significant changes in the affairs of the Group.ENVIRONMENTAL REGULATION All companies within the Group continued to comply with all environmental requirements.Wherever possible,carbon emissions have been limited,and new pro

43、duction techniques adopted to reduce energy use.The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities to report greenhouse gas emissions and energy use.For the measurement period 1 July 2018 to 30 June 2019 the directors have asse

44、ssed that there are no current reporting requirements,but the Company may be required to do so in the future.The economic entity is also subject to the environmental regulations under the laws of the Commonwealth or of a State or Territory in which it operates.The Directors are not aware of any brea

45、ches of these regulations.CORPORATE GOVERNANCE DISCLOSURE The Groups Corporate Governance Statement for the year ended 30 June 2019 can be found at:http:/ statement also summarises the extent to which the Group has complied with the Corporate Governance Councils recommendations.DIRECTORS REPORT 8 XR

46、F SCIENTIFIC LIMITED|2019 ANNUAL REPORT INFORMATION ON DIRECTORS Fred Grimwade Chairman(Non-Executive)Date of appointment:1 May 2012(7 years)Qualifications:Bachelor of Commerce and Law,Master of Business Administration,Fellow of the Governance Institute of Australia,Fellow of the Australian Institut

47、e of Company Directors,and Life Member of the Financial Services Institute of Australasia Experience:Has held general management positions at Colonial Agricultural Company,the Colonial Group,Western Mining Corporation and Goldman,Sachs&Co.Currently a Principal and Director of Fawkner Capital.Other c

48、urrent directorships:Chairman of CPT Global Ltd;Non-Executive Director of Select Harvests Ltd,Australian United Investment Company Ltd and other private companies Former directorships in last 3 years:Chairman of Troy Resources Ltd;Non-Executive Director of NewSat Ltd and other private companies Spec

49、ial responsibilities:Chairman of the Remuneration Committee,member of the Audit&Governance Committee No.of shares:500,000 fully paid ordinary shares David Brown Director(Non-Executive)Date of appointment:7 June 2004(15 years)Qualifications:Bachelor of Science,Bachelor of Economics Experience:Has ove

50、r 45 years of experience in research and development and manufacturing of X-Ray Flux chemicals;formerly Chief Chemist for Swan Brewery Co.Ltd and Chairman of Scientific Industries Council of WA Other current directorships:Private companies only Former directorships in last 3 years:Private companies

51、only Special responsibilities:Technical consultant to XRF Chemicals Pty Ltd No.of shares:8,800,000 fully paid ordinary shares David Kiggins Director(Non-Executive)Date of appointment:1 May 2012(7 years)Qualifications:Bachelor of Science(Hons),Fellow of the Institute of Chartered Accountants of Engla

52、nd and Wales,Fellow of the Institute of Chartered Secretaries and Administrators,and member of Australian Institute of Company Directors Experience:Ten years at Arthur Andersen,working in audit and business consulting in the UK,Australia,Africa and the Middle East.Formerly GM Business Development an

53、d Company Secretary at Automotive Holdings Group Ltd;Finance Director and Company Secretary at Global Construction Services Ltd;Chief Financial Officer at Heliwest.Currently the Chief Financial Officer at Stealth Global Holdings Ltd.Other current directorships:Private companies only Former directors

54、hips in last 3 years:Private companies only Special responsibilities:Chairman of the Audit&Governance Committee,member of the Remuneration Committee No.of shares:212,900 fully paid ordinary shares Vance Stazzonelli Managing Director(Executive)Date of appointment:22 February 2018(1 year)Qualification

55、s:Bachelor of Commerce(Professional Accounting)Experience:Vance joined XRF Scientific as Chief Financial Officer in October 2009.He was subsequently appointed to Chief Operating Officer in January 2011 and then Chief Executive Officer in August 2012.On 22 February 2018,he was appointed as Managing D

56、irector.Other current directorships:Private companies only Former directorships in last 3 years:Private companies only Special responsibilities:N/A No.of shares:520,000 fully paid ordinary shares DIRECTORS REPORT XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 9COMPANY SECRETARIES Vance Stazzonelli,B.Comm

57、,CPA Vance has held the role of Company Secretary since June 2008.Andrew Watson,B.Comm,CA Andrew was appointed Joint Company Secretary in August 2013.OTHER KEY MANAGEMENT Andrew Watson(Chief Financial Officer XRF Scientific Limited)Andrew joined XRF Scientific as Group Accountant in August 2012 and

58、was promoted to Chief Financial Officer in July 2014.He is a member of the Chartered Accountants Australia and New Zealand and holds a Graduate Diploma of Applied Corporate Governance.MEETINGS OF DIRECTORS The number of meetings held by the Board of Directors including meetings of the committees of

59、the Board and the number of meetings attended by each of the Directors during the financial year ended 30 June 2019 were as follows:Full meetings of Directors Meetings of committees-Audit&Governance,Remuneration A B A B Fred Grimwade 12 12 3 3 David Brown 12 12*David Kiggins 12 11 3 3 Vance Stazzone

60、lli 12 12*Kenneth Baxter(resigned 29 October 2018)4 4 2 2 Kenneth Baxter(resigned 29 October 2018)4 4 2 2 A =Meetings held during the time the director held office or was a member of the Committee during the year.B =Meetings attended.*=Not a member of the relevant Committee.DIRECTORS REPORT 10 XRF S

61、CIENTIFIC LIMITED|2019 ANNUAL REPORT REMUNERATION REPORT(Audited)(a)Principles used to determine the nature and amount of remuneration.Remuneration governance The Remuneration Committee is a committee of the Board.Its objective is to ensure that remuneration policies and structures are fair and comp

62、etitive and aligned with the long-term interests of the company.It is primarily responsible for making recommendations to the Board on:the over-arching executive remuneration framework operation of the incentive plans which apply to the executive team,including key performance indicators and perform

63、ance hurdles remuneration levels of executive directors and other key management personnel,and non-executive director fees Non-executive directors Fees and payments to non-executive directors reflect the demands which are made on,and the responsibilities of,the directors.Non-executive directors fees

64、 and payments are reviewed periodically by the Board.The Chairmans fees are determined independently to the fees of non-executive directors based on comparative roles in the external market.The Chairman is not present at any discussions relating to determination of his own remuneration.The Chairmans

65、 remuneration is inclusive of committee fees.Non-executive directors may receive share options.Managing director No additional remuneration is paid to Mr Stazzonelli as part of his appointment as Managing Director and his contracted terms of employment remain unchanged.Directors fees Directors remun

66、eration was last reviewed in July 2019.The current fees are as follows:Chairman$89,610 Non-Executive Directors$56,650 Committee Chairman$8,240 The maximum amount payable is capped at$400,000 per annum and was approved by shareholders at the Annual General Meeting in November 2012.Executive pay The e

67、xecutive pay and reward framework has three components:1.Base pay and benefits,including superannuation 2.Short-term performance incentives,and 3.Long-term incentives.It is Board policy to review key management annually,and adjust such compensation taking into account the managers performance,the pe

68、rformance of the entity which they manage,and the performance of the Group of companies.Where appropriate,there is a direct link between financial performance(profit or growth)to key managers compensation by way of bonus,which is assessed under a weighted balanced scorecard method,as set out by the

69、Remuneration Committee at the start of each year.This method is accepted by the Board as being an appropriate incentive for encouraging key management personnel to reach targets that are in excess of budgeted growth.(i)Base Pay Executives are offered a competitive base pay that forms the fixed compo

70、nent of pay.Base pay for executives is reviewed annually to ensure the executives pay is competitive with the market.An executives pay is reviewed on promotion.DIRECTORS REPORT XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 11REMUNERATION REPORT(Audited)continued(ii)Benefits Executives may receive benefi

71、ts including car/mileage allowance.(iii)Superannuation Retirement benefits of 9.5%of the base pay are delivered to the individual super fund of the executives choice.(iv)Short-term performance incentives Bonuses may be paid on the performance of the individual entity based on full year performance f

72、or the financial year.In most instances bonus payments are based on the achievement of a percentage of that years budget and targets/objectives being met.A short-term incentive(STI)pool is available for executives during the annual review,which is subject to caps that are in place.Using a profit tar

73、get ensures variable reward is only available when value has been created for shareholders and when profit is consistent with the business plan.Specific details of key management personnel bonuses can be found under the service contracts section of this report.(v)Long-term incentives There are no sp

74、ecific long-term incentives in place,however the matter is currently being considered by the Remuneration Committee.(vi)Assessing performance and claw-back of remuneration The Companys current Executive Performance Reward Policy does not currently include any clawback provisions.(b)Details of remune

75、ration (i)Non-Executive Fred Grimwade Chairman David Brown Director David Kiggins Director Kenneth Baxter Director(resigned 29 October 2019)(ii)Executive Vance Stazzonelli Managing Director Andrew Watson Chief Financial Officer Fixed Remuneration The level of fixed remuneration is set as to provide

76、base level of remuneration which is both appropriate to the position and its competitive market.Fixed remuneration is reviewed annually by the Remuneration Committee based on market rates,as well as having regard to the Company and individual performance.The fixed remuneration of other key managemen

77、t personnel is contained in information that follows.Variable Remuneration(Short-Term Incentive)To assist in achieving the objective of retaining a high-quality executive team,the Remuneration Committee links the nature and amount of the executive emoluments to the Companys financial and operating p

78、erformance.For the Managing Director,variable remuneration is calculated based on an assessment of key performance indicators using a weighted balanced scorecard method,as set out by the Remuneration Committee at the start of each year.The maximum amount payable to the Managing Director for 2019 is$

79、70,000.There were five categories of STI performance measure(plus a discretionary component)for the year ended 30 June 2019.Those measures were chosen to provide a balance between corporate,individual,operational,strategic,financial and behavioural aspects of performance.The weighting assigned to ea

80、ch of the performance measures was as follows:Group financial performance(30%)Execution of business growth strategy(30%)Leadership(10%)Compliance and risk management(5%)Stakeholder&associated business relations(5%)Discretionary(20%)DIRECTORS REPORT 12 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT REMUNE

81、RATION REPORT(Audited)continued(b)Details of remuneration continued The Remuneration Committee considered the performance of the Managing Director against the performance measures outlined above.A range of financial,strategic and operational targets were met and internal expansion plans are on sched

82、ule.All compliance obligations were met throughout the year with no reported issues and relationships with internal and external stakeholders were well managed.It was decided that$31,963(plus superannuation of 9.5%)would be paid,which is approximately 50%of the maximum amount payable.Bonus payments

83、to other key management personnel were 100%discretionary,based on a range of financial,strategic and operational factors.These amounts were accrued at 30 June 2019 and paid in August 2019.Amounts of remuneration Details of the remuneration of directors and the key management personnel(as defined in

84、AASB 124 Related Party Disclosures)of XRF Scientific Limited are set out in the following:Short-term Post-employment Long-term Cash Salary Cash BonusesOtherSuper-annuationLong Service LeaveTermination benefits Total2019$Non-executive directors Fred Grimwade 71,865-6,827-78,692 David Brown 50,228-*17

85、1,000 4,772-226,000 David Kiggins 57,534-5,466-63,000 Kenneth Baxter*27,503-2,613-30,116 Sub-total non-executive directors 207,130-171,000 19,678-397,808 Executive directors Vance Stazzonelli 270,000 31,963-28,687 5,663-336,313 Sub-total executive directors 270,000 31,963-28,687 5,663-336,313 Other

86、key management personnel Andrew Watson 170,000 9,132*7,846 17,763 3,844-208,585 Sub-total key management personnel 170,000 9,132 7,846 17,763 3,844-208,585 647,130 41,095 178,846 66,128 9,507-942,706 Short-term Post-employment Long-term Cash Salary Cash Bonuses Other Super-annuation Long Service Lea

87、ve Termination benefits Total 2018$Non-executive directors Kenneth Baxter 79,452-7,548-87,000 David Brown 50,228-*171,000 4,772-226,000 David Kiggins 57,534-5,466-63,000 Fred Grimwade 57,534-5,466-63,000 Sub-total non-executive directors 244,748-171,000 23,252-439,000 Executive directors Vance Stazz

88、onelli*262,000-24,890 5,342-292,232 Sub-total executive directors 262,000-24,890 5,342-292,232 Other key management personnel Andrew Watson 159,650-15,167 3,036-177,853 Sub-total key management personnel 159,650-15,167 3,036-177,853 666,398-171,000 63,309 8,378-909,085*Technical services provided by

89、 consultancy(such as technical sales and support,analytical method development).*Resigned on 29 October 2018.*Cash payment of annual leave accrued by the employee.*Appointed as Managing Director on 22 February 2018.There were no changes to remuneration or other contracted employment terms.DIRECTORS

90、REPORT XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 13REMUNERATION REPORT(Audited)continued(b)Details of remuneration continued Percentage of performance related compensation of total remuneration Certain executive personnel are paid performance bonuses in addition to set remuneration amounts.The Board

91、 of Directors have set these bonuses to encourage growth and profitability.Bonuses are paid as per the conditions set out in page 11.The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:Fixed RemunerationAt risk -STI At risk-LTI 2019 2018 20

92、19 2018 2019 2018 Executive personnel Vance Stazzonelli 90%100%10%-Andrew Watson 95%100%5%-Options issued as part of total remuneration No options have been issued in 2018 or 2019 as part of total remuneration.Voting and comments made at the companys 2018 Annual General Meeting The company received

93、validly appointed proxies of 99%of“yes”votes on its remuneration report for the 2018 financial year.The remuneration resolution was carried on a show of hands.The company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.(c)Shareholder Wealth The f

94、ollowing is a summary of key shareholder wealth statistics for the Company over the past 5 years(listed since 2006).EBIT Earnings Per Share Dividends Declared Per Share Share Price Market Capitalisation$Cents Cents Cents$2014/15 3,477,167 2.0 0.7 21 27,752,990 2015/16 2,318,737 1.2 0.5 18 24,088,645

95、 2016/17 982,440 0.6 0.24 17 22,750,387 2017/18 1,598,268 0.8 0.3 16 22,081,257 2018/19 3,249,762 1.6 1.0 20 26,765,160 (d)Bonuses Each individual Key Management Personnel performance bonus was discussed and reviewed against the requirements set out on page 11.It was agreed that the proposed perform

96、ance bonuses met these conditions,specifically individual performance against agreed Key Performance Indicators.DIRECTORS REPORT 14 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT REMUNERATION REPORT(Audited)continued(e)Shares held by key management personnel Details of equity instruments(other than optio

97、ns and rights)held directly,indirectly or beneficially by key management personnel and their related parties are as follows:Name Balance at 1 July 2018 On-market trades Balance at 30 June 2019 Directors of XRF Scientific Limited Fred Grimwade 400,000 100,000 500,000 David Brown 8,670,894 129,106 8,8

98、00,000 David Kiggins 212,900-212,900 Vance Stazzonelli 450,000 70,000 520,000 Kenneth Baxter(resigned 29 October 2019)1,215,623 N/A N/A Securities Trading Policy The Company has adopted a policy that imposes certain restrictions on Directors and employees trading in the securities of the Company.The

99、 restrictions have been imposed to prevent trading in contravention of the insider trading provisions of the Corporations Act.Option holdings There were no options over ordinary shares in the company held during the financial year by directors of XRF Scientific Limited or other key management person

100、nel of the Group.Dividends received by key management personnel Details of dividends received directly,indirectly or beneficially by key management personnel and their related parties are as follows:Name 2019 2018 Directors of XRF Scientific Limited Fred Grimwade 1,200 960 David Brown 26,013 20,160

101、David Kiggins 639 511 Vance Stazzonelli 1,350 1,080 Kenneth Baxter(resigned 29 October 2019)3,647 2,917(f)Service Agreements Remuneration for the Managing Director and Chief Financial Officer is set out in service agreements,which are detailed below:Vance Stazzonelli,Managing Director of XRF Scienti

102、fic Limited Terms of agreement Ongoing employment contract effective 1 July 2012.Base salary is$278,100 per annum(effective 1 July 2019),plus superannuation benefits of 9.5%.Payment of a termination benefit on early termination by the Company,other than for gross misconduct,equal to six months full

103、pay.Notice period by the employee of six months.Payment of bonuses is based on a range of strategic,financial,operational,personnel,and Board-related key performance indicators.Andrew Watson,Chief Financial Officer of XRF Scientific Limited Terms of agreement Ongoing employment contract effective 24

104、 July 2014.Base salary is$175,100 per annum(effective 1 July 2019),plus superannuation benefits of 9.5%.Payment of a termination benefit on early termination by the Company,other than for gross misconduct,equal to three months full pay.Notice period by the employee of three months.Payment of bonuses

105、 is based on a range of strategic,financial,operational,personnel,and Board-related key performance indicators.No other key management personnel are currently employed under service contracts.DIRECTORS REPORT XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 15REMUNERATION REPORT(Audited)continued(g)Share-b

106、ased compensation There was no share-based compensation to any Director or Key Management Personnel for the years ended 30 June 2018 and 2019.The Company has not adopted an employee share option scheme.(h)Remuneration consultants No remuneration consultants were used in the years ended 30 June 2019

107、and 30 June 2018.(i)Other transactions with key management personnel Premises were rented from a related entity of Director David Brown during the financial year.These properties were rented on normal commercial terms and conditions,totalling$117,251(2018:$115,975).No amounts were outstanding at the

108、 end of the year.(j)Loans to directors and executives No loans were made to directors and executives during the financial years ended 30 June 2019 and 30 June 2018.End of remuneration report(Audited).NON-AUDIT SERVICES Details of the non-audit services provided by the Companys external auditor BDO A

109、udit(WA)Pty Ltd and its related practices during the year ended 30 June 2019 are outlined in the following table.The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.The nature a

110、nd the scope of each type of non-audit service provided means that auditor independence was not compromised.During the year the following fees were paid or payable for services provided by the auditor of the parent entity,its related practices and non-related audit firms:Consolidated 20192018$BDO Au

111、dit(WA)Pty Ltd Audit and review of financial reports 113,731119,201 Taxation services 49,05447,146 Other services 7701,224 BDO Rviseurs d Entreprises Soc.Civ.SCRL(Belgium)Audit and review of financial reports 7,82130,791 Taxation services 7,2406,611 BDO Canada s.r.l.(Canada)Taxation services 12,6961

112、6,094 BDO LLP(UK)Audit and review of financial reports 9,4348,609 Total remuneration for audit and other services 200,746229,676 The Board is satisfied that the auditors of the Company,BDO Audit(WA)Pty Ltd remain independent.DIRECTORS REPORT 16 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT OPTIONS No un

113、issued ordinary shares of XRF Scientific Limited remain under option at the date of this report.INSURANCE OF DIRECTORS AND OFFICERS During the financial year,the company paid insurance premiums to insure the directors and officers of the company and its Australianbased controlled entities.The liabil

114、ities insured are legal costs that may be incurred in defending civil or some criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group,and any other payments arising from liabilities incurred by the officers in connection with such proceedi

115、ngs.This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the company.It is not possible to app

116、ortion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.PROCEEDINGS ON BEHALF OF OR INVOLVING THE ECONOMIC ENTITY No person has applied for leave of Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on

117、 behalf of the company or 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 any part of those proceedings.No proceedings have been brought or intervened in on behalf of the company with leave of the Court under s

118、ection 237 of the Corporations Act 2001.AUDITORS INDEPENDENCE DECLARATION A copy of the auditors independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 17.AUDITOR BDO Audit(WA)Pty Ltd continues in office in accordance with section 327 of the Corporati

119、ons Act 2001.This report is made in accordance with a resolution of directors and signed for and on behalf of the Board by:Fred S Grimwade Chairman Perth 26 August 2019BDO Audit(WA)Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO A

120、ustralia Ltd ABN 77 050 110 275,an Australian company limited by guarantee.BDO Audit(WA)Pty Ltd and BDO Australia Ltd are members of BDO International Ltd,a UK company limited by guarantee,andform part of the international BDO network of independent member firms.Liability limited by a scheme approve

121、d under Professional Standards Legislation.Tel:+61 8 6382 4600Fax:+61 8 6382 .au38 Station StreetSubiaco,WA 6008PO Box 700 West Perth WA 6872AustraliaDECLARATION OF INDEPENDENCE BY GLYN OBRIEN TO THE DIRECTORS OF XRF SCIENTIFIC LIMITEDAs lead auditor of XRF Scientific Limited for the year ended 30 J

122、une 2019,I declare that,to the best ofmy knowledge and belief,there have been:1.No contraventions of the auditor independence requirements of the Corporations Act 2001 inrelation to the audit;and2.No contraventions of any applicable code of professional conduct in relation to the audit.This declarat

123、ion is in respect of XRF Scientific Limited and the entities it controlled during the period.Glyn OBrienDirectorBDO Audit(WA)Pty LtdPerth,26 August 2019CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2019 18 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT

124、 Note Consolidated 2019 2018$Revenue from continuing operations 5 29,028,642 24,250,362Cost of sales (17,673,013)(14,595,450)Gross profit 11,355,629 9,654,912 Other income 25,443 54,181 Administration expenses (6,675,829)(6,423,795)Other expenses (774,144)(961,916)Occupancy expenses (674,026)(722,71

125、8)Finance costs (105,844)(98,572)Profit before income tax 3,151,229 1,502,092Income tax expense 7(1,013,639)(478,085)Profit after income tax from continuing operations attributable to equity holders of XRF Scientific Limited 2,137,590 1,024,007 Other comprehensive income Items that will be classifie

126、d to profit or loss Foreign currency translation differences 21(a)350,763 258,567Total comprehensive income for the year 2,488,353 1,282,574 Total comprehensive income attributable to equity holders of XRF Scientific Limited 2,488,353 1,282,574 Earnings per share for the year attributable to equity

127、holders of XRF Scientific Limited Basic earnings per share(cents per share)30 1.6 0.8Diluted earnings per share(cents per share)30 1.6 0.8 The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.CONSOLIDATED STATEMEN

128、T OF FINANCIAL POSITION AS AT 30 JUNE 2019 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 19 Note Consolidated 2019 2018$CURRENT ASSETS Cash and cash equivalents 8 3,238,297 415,374Trade and other receivables 9 4,067,214 4,119,689Inventories 10 8,699,219 7,611,983Other assets 11 418,738 414,802Total Curr

129、ent Assets 16,423,468 12,561,848 NON-CURRENT ASSETS Property,plant and equipment 12 8,397,919 8,487,225Intangible assets 13 15,973,269 15,964,438Deferred tax asset 14 924,535 916,544Total Non-Current Assets 25,295,723 25,368,207Total Assets 41,719,191 37,930,055 CURRENT LIABILITIES Trade and other p

130、ayables 15 2,090,278 1,519,838Provisions 16 2,629,542 1,510,310Short-term borrowings 17 697,854 1,385,922Other current liabilities 195,685 166,793Current income tax liability 419,248 366,158Total Current Liabilities 6,032,607 4,949,021 NON-CURRENT LIABILITIES Long-term borrowings 17 1,561,072 883,40

131、9Deferred tax liability 18 230,423 278,176Provisions 19 83,722 94,959Total Non-Current Liabilities 1,875,217 1,256,544Total Liabilities 7,907,824 6,205,565Net Assets 33,811,367 31,724,490 EQUITY Issued capital 20 18,584,489 18,584,489Reserves 21(a)1,288,121 937,358Retained profits 21(b)13,938,757 12

132、,202,643Total Equity 33,811,367 31,724,490 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2019 20 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 30 JUNE 2019 CONSOLIDAT

133、ED Issued Share Capital Share Option Reserve Foreign Currency Translation Reserve Retained Profits Total$Balance at 1 July 2018 18,584,489759,243178,115 12,202,64331,724,490 Profit for the period-2,137,5902,137,590Other comprehensive income-350,763-350,763Total comprehensive income for the period-35

134、0,763 2,137,5902,488,353 Transactions with Equity Holders in their capacity as Equity Holders Ordinary shares issued,net of transaction costs-Dividends paid-(401,476)(401,476)-(401,476)(401,476)Balance at 30 June 2019 18,584,489759,243528,878 13,938,75733,811,367 30 JUNE 2018 CONSOLIDATED Issued Sha

135、re Capital Share Option Reserve Foreign Currency Translation Reserve Retained Profits Total$Balance at 1 July 2017 18,584,489759,243(80,452)11,499,81730,763,097 Profit for the year Other comprehensive income/(loss)-258,567 1,024,007-1,024,007258,567Total comprehensive income/(loss)for the period-258

136、,567 1,024,0071,282,574 Transactions with Equity Holders in their capacity as Equity Holders Ordinary shares issued,net of transaction costs-Dividends paid-(321,181)(321,181)-(321,181)(321,181)Balance at 30 June 2018 18,584,489759,243178,115 12,202,64331,724,490 The above Consolidated Statement of C

137、hanges in Equity should be read in conjunction with the accompanying notes.CONSOLIDATED STATEMENT OF CASH FLOWS AS AT 30 JUNE 2019 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 21 Note Consolidated 2019 2018$Cash flows from operating activities Receipts from customers(inclusive of GST)29,176,925 24,839,

138、074Payments to suppliers and employees(inclusive of GST)(24,185,794)(23,358,770)Payment of expenses relating to business acquisitions-(202,730)Finance costs(105,844)(98,572)Income taxes paid(1,016,292)(373,616)Interest received 7,311 2,397Net cash inflow(outflow)from operating activities 28 3,876,30

139、6 807,783 Cash flows from investing activities Payments for property,plant and equipment(521,110)(1,701,725)Payments for research and development(110,722)(232,619)Payments for intangible assets(9,670)-Proceeds from sale of property,plant and equipment-13,616Net cash inflow(outflow)from investing act

140、ivities(641,502)(1,920,728)Cash flows from financing activities Proceeds from borrowings 17 738,074 1,175,000Repayment of borrowings 17(748,479)(158,905)Dividends paid(401,476)(321,181)Net cash inflow(outflow)from financing activities(411,881)694,914 Cash and cash equivalents at the beginning of the

141、 financial period 415,374 833,405Net increase(decrease)in cash and cash equivalents 2,822,923(418,031)Cash and cash equivalents at the end of the financial period 8 3,238,297 415,374 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.NOTES TO THE

142、 CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 22 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of the financial statements are set out below.These policies have been consist

143、ently applied to all the years presented.(a)Basis of preparation The financial report of XRF Scientific Limited for the year ended 30 June 2019 was authorised for issue in accordance with a resolution of the directors on 26 August 2019 and covers XRF Scientific Limited as an individual entity as wel

144、l as the consolidated entity consisting of XRF Scientific Limited and its subsidiaries.These financial statements are presented in the Australian currency.XRF Scientific Limited is a company limited by shares incorporated in Australia and is a for-profit entity whose shares are publicly traded on th

145、e Australian Stock Exchange.These general purpose financial statements have been prepared in accordance with Australian Standards,other authoritative pronouncements of the Australian Accounting Standards Board,Australian Accounting Interpretations and the Corporations Act 2001.Compliance with IFRS T

146、he financial statements of XRF Scientific Limited also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.Historical cost convention These financial statements have been prepared under the historical cost convention.Critical accounting e

147、stimates The preparation of financial statements requires the use of certain critical accounting estimates.It also requires management to exercise its judgement in the process of applying the Groups accounting policies.The areas involving a higher degree of judgement or complexity,or areas where ass

148、umptions and estimates are significant to the financial statements,are disclosed in note 3.Financial statement presentation The following significant accounting policies have been adopted in the preparation and presentation of the financial report.(b)Principles of consolidation(i)Subsidiaries The co

149、nsolidated financial statements incorporate the assets and liabilities of all subsidiaries of XRF Scientific Limited(“company”or“parent company”)as at 30 June 2019 and the results of all subsidiaries for the year then ended.XRF Scientific Limited and its subsidiaries together are referred to in this

150、 report as the Group or the consolidated entity.The Group controls an entity when the Group is exposed to,or has rights to,variable returns from its investment with the entity and has the ability to affect those returns through its power to direct the activities of the entity.All controlled entities

151、 have a 30 June financial year end.The consolidated financial statements are prepared by combining the financial statements of all entities that comprise the consolidated entity,being the company(the parent company)and its subsidiaries.Consistent accounting policies are employed in the preparation a

152、nd presentation of the consolidated financial statements.On acquisition,the assets,liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition.Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is

153、 recognised as goodwill.If,after reassessment,the fair values of the identifiable net assets acquired exceed the cost of acquisition,the benefit is credited to profit or loss in the period of acquisition.The consolidated financial statements include the information and results of each subsidiary fro

154、m the date on which the company obtains control and until such time as the company ceases to control such entities.All intercompany balances and transactions between entities in the economic entity,including any unrealised profits or losses,have been eliminated on consolidation.Accounting policies o

155、f subsidiaries are consistent with the policies adopted by the Group.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 23NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued(ii)Investments in associates and joint-ventures I

156、nvestment in associates is accounted for using the equity method of accounting in the consolidated financial statements.Under the equity method,the investment in the associates is carried in the consolidated statement of financial position at cost plus post-acquisition changes in the Groups share of

157、 net assets of the associate.After application of the equity method,the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Groups net investment in the associate.The Group s share of the associate post-acquisition profits or losses is recognised

158、in the statement of profit or loss and other comprehensive income.The cumulative post-acquisition movements are adjusted against the carrying amount of the investment.When the Group s share of losses in the associate equals or exceeds its interest in the associate,including any unsecured long-term r

159、eceivables and loans,the Group does not recognise further losses,unless it has incurred obligations or made payments on behalf of the associate.The reporting dates of the associate and the Group are identical and the associates accounting policies conform to those used by the Group for like transact

160、ions and events in similar circumstances.(iii)Changes in ownership interests When the Group ceases to have control,joint control or significant influence,any retained interest in the entity is re-measured to its fair value with the change in carrying amount recognised in profit or loss.The fair valu

161、e is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate,jointly controlled entity or financial asset.In addition,any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group

162、had directly disposed of the related assets or liabilities.This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.If the ownership interest in a jointly-controlled entity or an associate is reduced but joint control or significant influence

163、is retained,only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.(c)Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decis

164、ion maker.The chief operating decision maker,who is responsible for allocating resources and assessing performance of the operating segments,has been identified as the Managing Director.(d)Foreign currency translation Functional and presentation currency The functional currency of each Group entity

165、is measured using the currency of the primary economic environment in which that entity operates.The consolidated financial statements are presented in Australian dollars which is the parent entitys functional and presentation currency.Transaction and balances Foreign currency transactions are trans

166、lated into functional currency using the exchange rates prevailing at the date of the transaction.Foreign currency monetary items are translated at the year-end exchange rate.Exchange differences arising on the translation of monetary items are recognised in the Statement of Profit or Loss and Other

167、 Comprehensive Income,except where deferred in equity as a qualifying cash flow or net investment hedge.The differences taken to equity are recognised in profit or loss on disposal of the net investment.Non-monetary items that are measured in terms of historical cost in a foreign currency are transl

168、ated using the exchange rate as at the date of the initial transaction and are recognised in the profit or loss.Group Companies The results and financial position of all the Group entities(none of which has the currency of a hyperinflationary currency economy)that have a functional currency differen

169、t from the presentation currency are translated into the presentation currency as follows.Assets and liabilities for each statements of financial position presented are translated at the closing rate at the date of that statement of financial position.Income and expenses for each profit or loss item

170、 are translated at average exchange rates.All resulting exchange differences are recognised in other comprehensive income.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 24 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES conti

171、nued (e)Revenue recognition Revenue is measured at the fair value of the consideration received or receivable.Amounts disclosed as revenue are net of returns,trade allowances and amounts collected on behalf of third parties.Revenue is recognised as follows:(i)Revenue from contracts with customers Gr

172、oup revenue is derived from the manufacture and sale of chemicals,equipment and accessories to production mines,construction material companies and commercial analytical laboratories,in Australia and overseas.These finished goods are primarily used in the preparation of samples for analysis.The Grou

173、p also derives service revenue from the installation,maintenance and repair of goods sold to customers.The group considers whether there are other promises in the contract that are separate performance obligations to which portion of the transaction price should be allocated(e.g.warranties).In deter

174、mining the transaction price to be used in the recognition of revenue for the sale of goods,the group considers the effects of variable consideration,the existence of significant financing components,non-cash consideration and consideration payable to the customer(if any)Sale of finished goods-Reven

175、ue is recognised at a point in time when control of the product has transferred to the customer,being when products are delivered.Delivery occurs when the products have been shipped to the specific location,the risks of obsolescence and loss have been transferred to the customer and the customer has

176、 accepted the product in accordance with the agreed terms.Sales of goods are standalone transactions and do not involve ongoing contracts,nor the supply of additional goods and services.Service revenue-When finished goods are bundled with installation services,they are listed separately on the sales

177、 invoice and there is a clear valuation assigned to each individual component.Installation is an optional service and could be performed by the customer or a third party,so it is considered to be a separate performance obligation.The performance of the service usually coincides with the delivery and

178、 installation of the goods,so both components can be recognised on the same date.Where there is a delay between the delivery of goods and the performance of services,the service components are allocated to the balance sheet as liabilities.This revenue will be recognised on the date that the service

179、has been performed.Maintenance and repair services fall into two main categories:Single services to be performed on a specified date in the future If invoiced in advance,the revenue for these transactions remains on the balance sheet as a liability until the service is performed.Contracts to provide

180、 multiple services over a period of time The revenue for these transactions is initially allocated to the balance sheet and then recognised on a monthly basis over the term of the contract(either 1 or 2 years),as the customer receives the benefit of the service on a simultaneous basis.(ii)Contract b

181、alances Contract assets-A contract asset is the right to consideration in exchange for goods or services transferred to the customer.If the group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due,a contract asset is recognised fo

182、r the earned consideration that is conditional.Trade receivables-Trade receivables represent the groups right to an amount of consideration that is unconditional(i.e.only the passage of time is required before payment of the consideration is due).Contract liabilities-A contract liability is the obli

183、gation to transfer goods or services to a customer for which the group has received consideration(or an amount of consideration is due)from the customer.If a customer pays consideration before the group transfers goods or services to the customer,a contract liability is recognised when payment is ma

184、de or is due(whichever is earlier).Contract liabilities are recognised as revenue when the group performs under the contract.(iii)Interest income Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.(f)Income tax The income

185、tax expense or revenue for the period is the tax payable on the current years 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 an

186、d their carrying amounts in the financial statements.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 25NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued Deferred tax assets and liabilities are recognised for temporary

187、differences at the tax rates expected to apply when the assets are recovered or liabilities are settled,based on those tax rates which are enacted or substantially enacted for each jurisdiction.The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differenc

188、es to measure the deferred tax asset or liability.An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability.No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction,other th

189、an a business combination,that at the time of the transaction did not affect either accounting profit or taxable profit or loss.Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilis

190、e those temporary differences and losses.Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent is able to control the timing of the reversal of the temporary differences and it

191、 is probable that the differences will not reverse in the foreseeable future.Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.XRF Scientific Limited and its wholly-owned Australian controlled entities have implemented the

192、tax consolidation legislation.The head entity,XRF Scientific Limited,and the controlled entities in the tax consolidated group account for their own deferred tax amounts.Current tax is accounted for by each subsidiary entity,which is then consolidated up into the tax consolidated group,as per the ta

193、x sharing agreement.In addition to its own share of current and deferred tax amounts,XRF Scientific Limited also recognises the current tax liabilities(or assets)and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated

194、 group.Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the Group.Income tax is allocated under the separate taxpayer within group approach.Details about the tax funding agreement a

195、re disclosed in note 7.(g)Leases Leases of property,plant and equipment where the entity has substantially all the risks and rewards of ownership are classified as finance leases.Finance leases are capitalised at the leases inception at the lower of fair value of the leased property and the present

196、value of the minimum lease payments.The corresponding rental obligations,net of finance charges,are included in other long-term payables.Each lease payment is allocated between the liability and finance cost.The finance cost is charged to the profit or loss over the lease period so as to produce a c

197、onstant periodic rate of interest on the remaining balance of the liability for each period.The property,plant and equipment acquired under finance leases are depreciated over the shorter of the assets useful life and the lease term.Leases in which a significant portion of the risks and rewards of o

198、wnership are retained by the lessor are classified as operating leases(note 24(a).Payments made under operating leases(net of any incentives received from the lessor)are charged to the profit or loss on a straight-line basis over the period of the lease.Lease income from operating leases is recognis

199、ed in income on a straight-line basis over the lease term.(h)Business combinations The acquisition method of accounting is used to account for all business combinations,including business combinations involving entities or businesses under common control,regardless of whether equity instruments or o

200、ther assets are acquired.The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred,the liabilities incurred and the equity interests issued by the Group.The consideration transferred also includes the fair value of any contingent considerat

201、ion arrangement and the fair value of any pre-existing equity interest in the subsidiary.Acquisition-related costs are expensed as incurred.Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are,with limited exceptions,measured initially at thei

202、r fair values at the acquisition date.On an acquisition-by-acquisition basis,the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interests proportionate share of the acquirees net identifiable assets.NOTES TO THE CONSOLIDATED FINANCIAL STA

203、TEMENTSFOR THE YEAR ENDED 30 JUNE 2019 26 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued The excess of the consideration transferred,the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous e

204、quity interest in the acquiree over the fair value of the Groups share of the net identifiable assets acquired is recorded as goodwill.If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed,the diff

205、erence is recognised directly in profit or loss as a bargain purchase.Where settlement of any part of cash consideration is deferred,the amounts payable in the future are discounted to their present value as at the date of exchange.The discount rate used is the entitys incremental borrowing rate,bei

206、ng the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.Contingent consideration is classified either as equity or a financial liability.Amounts classified as a financial liability are subsequently re-measured to fair value with

207、changes in fair value recognised in profit or loss.All purchase consideration is recorded at fair value at the acquisition date.Contingent payments classified as debt are subsequently re-measured through profit or loss.Acquisition-related costs are expensed as incurred.Non-controlling interests in a

208、n acquiree are recognised either at fair value or at the non-controlling interests proportionate share of the acquirees net identifiable assets.This decision is made on an acquisition-by-acquisition basis.If the Group recognises previous acquired deferred tax assets after the initial acquisition acc

209、ounting is completed there will no longer be any adjustment to goodwill.As a consequence,the recognition of the deferred tax asset will increase the Groups net profit after tax.(i)Impairment of assets Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation

210、and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired.Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.An impairment loss is rec

211、ognised for the amount by which the assets carrying amount exceeds its recoverable amount.The recoverable amount is the higher of an assets fair value less costs to sell and value in use.For the purposes of assessing impairment,assets are grouped at the lowest levels for which there are separately i

212、dentifiable cash inflows which are largely independent of the cash flows from other assets or groups of assets(cash-generating units).Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.(j)Cash and cash equival

213、ents For cash flow statement presentation purposes,cash and cash equivalents includes cash on hand,deposits held at call with financial institutions,other short-term,highly liquid instruments with original maturities of three months or less that are readily convertible to known amounts of cash and w

214、hich are subject to an insignificant risk of changes in value,and bank overdrafts.Bank overdrafts are shown within borrowings in current liabilities on the Statement of Financial Position.(k)Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amort

215、ised cost using the effective interest rate method,less provision for expected credit losses Trade receivables are due for settlement no more than 90 days from the date of recognition.Collectability of trade receivables is reviewed on an ongoing basis.Debts which are known to be uncollectable are wr

216、itten off to the Statement of Profit or Loss and Other Comprehensive Income.From 1 July 2018,a provision for impairment of receivables is established based on the expected credit loss approach.For trade receivables the Group applies the simplified approach permitted by AASB 9,which requires expected

217、 lifetime losses to be recognised from initial recognition of the receivables.Another indicator that determines the trade receivable is impaired is if the party is deemed to be bankrupt.The amount of the provision is the difference between the present value of cash flows due under the contract and t

218、he present value of the future cash flows an entity expects to receive,discounted at the original effective interest rate.Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.The movement in the provision is recognised in the Statement of Profit

219、 or Loss and Other Comprehensive Income.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 27NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued(l)Inventories Raw materials and stores,work in progress and finished goods Raw

220、 materials and stores,work in progress and finished goods are stated at the lower of cost and net realisable value.Cost comprises of direct materials,direct labour and an appropriate proportion of variable and fixed overhead expenditure,the latter being allocated on the basis of normal operating cap

221、acity.Costs are assigned to individual items of inventory on the basis of weighted average costs.Costs of purchased inventory are determined after deducting rebates and discounts.Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of comple

222、tion and the estimated costs necessary to make the sale.(m)Investments and other financial assets(i)Classification From 1 July 2018,the Group classifies its financial assets in the following measurement categories:Those to be measured subsequently at fair value(either through other comprehensive inc

223、ome,or through profit or loss);and Those to be measured at amortised cost.The classification depends on the Group s business model for managing financial assets and the contractual terms of the cash flows.For assets measured at fair value,gains and losses will either be recorded in profit or loss or

224、 other comprehensive income.For investments in trade and other financial assets,this will depend on the business model in which the investment is held.For investments in equity instruments that are not held for trading,this will depend on whether the Group has made an irrevocable election at the tim

225、e of initial recognition to account for the equity investment at fair value through other comprehensive income.(ii)Initial Measurement At initial recognition,the Group measures a financial asset at its fair value plus,in the case of a financial asset not at fair value through profit or loss,transact

226、ion costs that are directly attributable to the acquisition of the financial asset.Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.Measurement of cash and cash equivalents and trade and other receivables remains at amortised cost cons

227、istent with the comparative period.(iii)Subsequent Measurement Subsequent measurement of financial assets depends on the Group s business model for managing the asset and the cash flow characteristics of the asset.There are three measurement categories into which the Group classifies its financial a

228、ssets:Amortised cost:Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost.A gain or loss on trade and other financial assets that is subsequently measured at amortised cost is recognise

229、d in profit or loss when the asset is derecognised or impaired.Interest income from these financial assets is included in finance income using the effective interest rate method.Fair value through other comprehensive income(FVOCI):Assets that are held for collecting contractual cash flows and throug

230、h sale on specified dates.A gain or loss on a financial asset that is subsequently measured at FVOCI is recognised in other comprehensive income.Fair value through profit or loss(FVPL):Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL.All equity investments are me

231、asured at FVPL unless the Group makes an irrevocable election to classify as FVOCI.(iv)Impairment The Group assesses,on a forward-looking basis,the expected credit losses associated with its trade and other financial assets carried at amortised cost and FVOCI.The impairment methodology applied depen

232、ds on whether there has been a significant increase in credit risk.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 28 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued(n)Fair value estimation The fair value of financia

233、l assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.The carrying amount less impairment provision of trade receivables and payables are assumed to approximate their fair values.The fair value of financial liabilities for disclosure purposes

234、 is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Company for similar financial instruments.(o)Property,plant and equipment Property,plant and equipment is stated at historical cost less depreciation.Historical cost includes e

235、xpenditure that is directly attributable to the acquisition of the items.Subsequent costs are included in the assets carrying amount or recognised as a separate asset,as appropriate,only when it is probable that future economic benefits associated with the item will flow to the Company and the cost

236、of the item can be measured reliably.All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.Depreciation is calculated using a mixture of the straight line and diminishing value methods to allocate their cost,net of their residual value

237、s,over their estimated useful lives,as follows:Plant and Equipment 2%-40%Property Improvements 4%-25%Motor Vehicles 15%-25%Office Equipment 5%-66.67%The assets residual values and useful lives are reviewed,and adjusted if appropriate,at each reporting date.An assets carrying amount is written down i

238、mmediately to its recoverable amount if the assets carrying amount is greater than its estimated recoverable amount(note 1(i).Gains and losses on disposals are determined by comparing proceeds with carrying amount.These are included in the profit or loss.(p)Intangible assets(i)Goodwill Goodwill repr

239、esents the excess of the cost of an acquisition over the fair value of the Companys share of the net identifiable assets of the acquired subsidiary/associate/business at the date of acquisition.Goodwill on acquisitions of subsidiaries and businesses is included in intangible assets.Goodwill on acqui

240、sitions of associates is included in investments in associates.Goodwill is not amortised.Instead,goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired,and is carried at cost less accumulated impairment losses.Gains and

241、losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.For the purpose of impairment testing,goodwill is allocated to the consolidated entitys cash generating units identified according to business and geographical segments(note 13(a).(ii)Patents,trad

242、emarks and licences Patents,trademarks and licences have a finite useful life and are carried at cost less accumulated amortisation and impairment losses.Amortisation is calculated using the straight-line method to allocate the cost of patents,trademarks and licences over their estimated useful live

243、s,which vary from 3 to 20 years.(iii)Research and development Research expenditure is recognised as an expense as incurred.Costs incurred on development projects(relating to the design and testing of new or improved products)are recognised as intangible assets when it is probable that the project wi

244、ll be a success considering its commercial and technical feasibility and its costs can be measured reliably.The expenditure capitalised comprises all directly attributable costs,including costs of materials,services,direct labour and an appropriate proportion of overheads.Other development expenditu

245、res that do not meet these criteria are recognised as an expense as incurred.Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is

246、ready for use on a straight-line basis over its useful life,which varies from 1 to 8 years.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 29NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued(iv)Customer lists The custo

247、mer lists were acquired as part of a business combination.They are recognised at their fair value at the date of acquisition and subsequently amortised on a straight-line basis over the estimated useful lives,between 3 to 8 years.(q)Trade and other payables These amounts represent liabilities for go

248、ods and services provided to the Company prior to the end of the financial year which are unpaid.Due to their short-term nature they are measured at amortised cost and are not discounted.The amounts are unsecured and are usually paid within 60 days of recognition.(r)Borrowings Borrowings are initial

249、ly recognised at fair value,net of transaction costs incurred.Borrowings are subsequently measured at amortised cost.Any difference between the proceeds(net of transaction costs)and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest m

250、ethod.Fees paid on the establishment of loan facilities,which are not incremental costs relating to the actual draw-down of the facility,are recognised as prepayments and amortised on a straight-line basis over the term of the facility.Borrowings are removed from the Statement of Financial Position

251、when the obligation specified in the contract is discharged,cancelled or expired.The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid,including any non-cash assets transferred or liabilities assumed,

252、is recognised in other income or other expenses.Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.(s)Borrowing costs Borrowing costs incurred for the construction of any

253、qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale.All other borrowing costs are recognised as an expense in profit or loss in the period in which they are incurred.(t)Provisions Provisions are measured at the pr

254、esent value of managements best estimate of the expenditure required to settle the present obligation at the reporting date.The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.The increase in the

255、 provision due to the passage of time is recognised as an interest expense.Where there are a number of similar obligations,the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole.A provision is recognised even if the likelihood o

256、f an outflow with respect to any one item included in the same class of obligations may be small.Provisions for legal claims,service warranties and make good obligations are recognised when the Group has a present legal or constructive obligation as a result of past events,it is probable that an out

257、flow of resources will be required to settle the obligation and the amount has been reliably estimated.(u)Employee benefits(i)Short-term obligations Liabilities for wages and salaries,including non-monetary benefits and annual leave expected to be settled wholly within 12 months of the reporting dat

258、e are recognised in other payables in respect of employees services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.(ii)Other long-term employee benefit obligations The liability for long service leave is recognised in the provision for e

259、mployee 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,experiences of employee departures a

260、nd periods of service.There amounts are not expected to be settled wholly within 12 months of the reporting date.Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that match,as closely as possible,the estimated fu

261、ture cash outflows.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 30 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued (iii)Retirement benefit obligations The amount charged to profit or loss in respect of superannuat

262、ion represents the contributions made by the Group to superannuation funds as nominated by the individual employee.Contributions made by the Company to employee superannuation funds are charged as expenses when incurred.(iv)Termination benefits Termination benefits are payable when employment is ter

263、minated 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

264、possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy.Benefits falling due more than 12 months after reporting date are discounted to present value.(v)Contributed equity Ordinary shares are classified as equity.Incremental costs di

265、rectly attributable to the issue of new shares or options are shown in equity as a deduction 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 acquisition as part of the purchase considera

266、tion If the entity reacquires its own equity instruments,e.g.as the result of a share buy-back,those instruments are deducted from equity and the associated shares are cancelled.No gain or loss is recognised in the profit or loss and the consideration paid including any directly attributable increme

267、ntal costs(net of income taxes)is recognised directly in equity.(w)Dividends Provision is made for the amount of any dividend declared,being appropriately authorised and no longer at the discretion of the entity,on or before the end of the financial year but not distributed at reporting date.(x)Good

268、s and services tax Revenues,expenses and assets are recognised net of the amount of associated goods and services tax(GST),unless the GST incurred is not recoverable from the taxation authority.In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.Re

269、ceivables and payables are stated inclusive of the amount of GST receivable or payable.The net amount of GST recoverable from,or payable to,the taxation authority is included with other receivables or payables in the statement of financial position.Cash flows are presented on a gross basis.The GST c

270、omponents of cash flows arising from investing or financing activities which are recoverable from,or payable to,the taxation authority,are presented as operating cash flows.(y)Earnings per share(i)Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to

271、equity holders of the company,excluding any costs of servicing equity other than ordinary shares,by the weighted average number of ordinary shares outstanding during the financial year,adjusted for bonus elements in ordinary shares issued during the year.(ii)Diluted earnings per share Diluted earnin

272、gs per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for n

273、o consideration in relation to dilutive potential ordinary shares.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 31NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued(z)New accounting standards and interpretations Sever

274、al new or amended standards became applicable for the current reporting period resulting in the adoption of the following standards:(i)AASB 15 Revenue from Contracts with Customers Impact of Adoption The Group has applied AASB 15 Revenue from Contracts with Customers from 1 July 2018 which resulted

275、in changes to accounting policies but no adjustments to the amounts recognised in the financial statements at the reporting date and on transition to the standard.Refer to note 1(e)for further details.(ii)AASB 9 Financial Instruments Impact of Adoption AASB 9 Financial Instruments replaces AASB 139

276、Financial Instruments:Recognition and Measurement that relates to the recognition,classification and measurement of financial assets and financial liabilities,derecognition of financial instruments,impairment of financial assets and hedge accounting.The adoption of AASB 9 from 1 July 2018 did not gi

277、ve rise to any material transitional adjustments but has changed the Groups accounting policies in relation to the adoption of AASB 9s new expected credit loss model.Under AASB 9,the Group was required to revise the impairment methodology used in the calculation of its provision for doubtful debts t

278、o the expected credit loss model.This change in methodology has not had a material impact on the financial statements.The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables.Trade receivables are wri

279、tten off when there is no reasonable expectation of recovery.Indicators that there is no reasonable expectation of recovery include,amongst others,the failure of a debtor to engage in a repayment plan with the Group and failure to make contractual payments for a period greater than 120 days past due

280、,unless there is reasonable evidence that payment will be received.Critical accounting estimates and significant judgements-Loss allowances for financial assets are based on assumptions about risk of default and expected loss rates.The Group uses judgement in making these assumptions and selecting t

281、he inputs to the impairment calculation,based on the Groups recent history,existing market conditions as well as forward-looking estimates at the end of each reporting period.Management have estimated the expected credit loss is immaterial for trade receivables held at 30 June 2019.Certain new accou

282、nting Standards and Interpretations have been published that are not mandatory for 30 June 2019 reporting periods and have not been early adopted by the Group.The Groups assessment of the impact of these new Standards and Interpretations is set out below.In all cases the Group intends to apply these

283、 standards from the application date as indicated below.(i)AASB 16 Leases(effective from 1 July 2019)Lessee accounting-Lessees are required to recognise assets and liabilities for all leases with a term of more than 12 months,unless the underlying asset is of a low value.A lessee measures right-of-u

284、se assets similarly to other non-financial assets and lease liabilities similarly to other financial liabilities.Assets and liabilities arising from a lease are initially measured on a present value basis.The measurement includes non-cancellable lease payments,and also includes payments to be made i

285、n optional periods if the lessee is reasonably certain to exercise an option to extend the lease,or not to exercise an option to terminate the lease.AASB 16 contains disclosure requirements for leases.Lessor accounting-AASB 16 substantially carries forward the lessor accounting requirements in AASB

286、117.Accordingly,a lessor continues to classify its leases as operating leases or finance leases,and to account for those two types of leases differently.AASB 16 also requires enhanced disclosures to be provided by lessors that will improve information disclosed about a lessors risk exposure,particul

287、arly to residual value risk.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 32 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued To the extent that the entity,as lessee,has significant operating leases outstanding at t

288、he date of initial application,1 July 2019,right-of-use assets will be recognised for the amount of the unamortised portion of the useful life,and lease liabilities will be recognised at the present value of the outstanding lease payments.Thereafter,earnings before interest,depreciation,amortisation

289、 and tax(EBITDA)will increase because operating lease expenses currently included in EBITDA will be recognised instead as amortisation of the right-of-use asset,and interest expense on the lease liability.However,there will be an overall reduction in net profit before tax in the early years of a lea

290、se because the amortisation and interest charges will exceed the current straight-line expense incurred under AASB 117 Leases.This trend will reverse in the later years.There will be no change to the accounting treatment for short-term leases less than 12 months and leases of low value items,which w

291、ill continue to be expensed on a straight-line basis.Management is currently assessing the impact of the new rules.At this stage,the Group is not in a position to estimate the impact of the new rules on the Groups financial statements.The Group will make more detailed assessments of the impact over

292、the next 12 months.NOTE 2:FINANCIAL RISK MANAGEMENT The Groups activities expose it to a variety of financial risks;market risk(including foreign exchange risk,price risk,cash flow risk,fair value risk and interest rate risk);credit risk;and liquidity risk.The Groups overall risk management program

293、focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.Risk management is carried out by management under policies approved by the Board of Directors.Management identifies,evaluates and hedges financial risks in

294、close co-operation with the Companys operating units.The Board provides guidance for overall risk management and other specific areas,such as mitigating foreign exchange,interest rate and credit risks,use of financial instruments and investing excess liquidity.(a)Market risk(i)Foreign exchange risk

295、The Group is exposed to foreign currency risk on sales,purchases and borrowings that are denominated in a currency other than the Australian Dollar.The currencies giving rise to this risk are predominantly Euros,the US Dollar,and the Canadian Dollar.Foreign currency risk arises where settlement of a

296、 trade receivable,payable or borrowings is denominated in a currency that is not the entitys functional currency,which may result in a foreign currency gain or loss.The Group seeks to mitigate this risk by engaging in a majority of commercial transactions that are generally in AUD.The Groups exposur

297、e to foreign currency risk at the reporting date was as follows:30 June 2019 30 June 2018 CAD EUR USD CAD EUR USD Trade receivables 109,588 624,179 397,291 113,528 566,277 482,665 Trade payables 5,412 104,791 112,047 1,692 79,569 52,884 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDE

298、D 30 JUNE 2019 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 33NOTE 2:FINANCIAL RISK MANAGEMENT continued Group sensitivity Based on the financial instruments held at 30 June 2019,had the Australian dollar strengthened/weakened by 10%(based on historical reasonableness movements)against the exchange rat

299、es in the above tables,with all other variables held constant,the Groups post-tax profit for the year would have been$122,087 lower/$149,218 higher(2018:$135,214 lower/$165,262 higher),mainly as a result of foreign currency exchange gains/losses on translation of foreign currency denominated financi

300、al instruments as detailed in the table above.(ii)Price risk As the Group does not have any investments in equities or commodities,its exposure to equities price risk and commodity price risk is minimal.The majority of precious metals held in stock(Note 10)are hedged against customer orders,therefor

301、e no price risk exists.While the Group uses commodities in its operations,customer commitments to market rates purchased result in the Groups exposure to commodities price risk being immaterial.(iii)Cash flow,fair value and interest rate risk As at 30 June 2019 the Group had no variable interest rat

302、e debt,therefore consider fair value interest rate risk minimal.Group sensitivity At 30 June 2019,if interest rates had changed by-/+100 basis points(based upon forward treasury rates)from the year-end rates with all other variables held constant,post-tax profit for the year would have been$7,144 hi

303、gher/lower(2018:$6,732 higher/lower),mainly as a result of higher/lower interest income from cash and cash equivalents.Cash and cash equivalent balances at 30 June 2019 would have been higher/lower by the same amount.(b)Credit risk Management has a credit policy in place and the exposure to credit r

304、isk is monitored on an ongoing basis.Credit risk arises from cash and cash equivalents,trade receivables and other receivables.For banks and financial institutions,only independently rated parties with a minimum rating of A are accepted.The Group trades only with recognised,creditworthy third partie

305、s.In addition,receivable balances are monitored on an ongoing basis with the result that the Groups exposure to bad debts is not significant.Counterparties without external credit ratings are in majority existing customers(6months)with no history of defaults(Group 2).With respect to credit risk aris

306、ing from the other financial assets of the Group,which comprise of cash and cash equivalents,and trade and other receivables,the Groups exposure to credit risk arises from the default of the counter party,with a maximum exposure equal to the carrying amount of these financial assets.There are no sig

307、nificant concentrations of credit risk within the Group at the reporting date.The following table represents the Groups exposure to credit risk:Consolidated 2019 2018$Cash and cash equivalents(A+rated)3,238,297 415,374 Trade receivables,net of impairment provision(note 9)(Group 2)3,978,683 4,117,736

308、 Other receivables(external parties)88,531 1,953 7,305,511 4,535,063 Credit risk exposure is not significantly different for any of the segments of the Group.Details of impaired trade receivables,and trade receivables overdue but not impaired can be found at note 9.An analysis of the Groups consolid

309、ated trade receivables is as follows:Current Over 30 days Over 60 days Over 90 Days Total 2019 3,078,822 554,819 141,081 203,961 3,978,683 2018 2,919,884.838,994 182,309 176,549.4,117,736.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 34 XRF SCIENTIFIC LIMITED|2019 ANN

310、UAL REPORT NOTE 2:FINANCIAL RISK MANAGEMENT continued (c)Liquidity risk The Groups objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts,bank loans,debentures,finance leases and hire purchase contracts.The below analyses the Groups financ

311、ial liabilities into relevant maturity groupings based on the remaining period at the reporting date.The amounts disclosed in the table are the contractual undiscounted cash flows.There have been no breaches or defaults on the repayment of debt.Contractual maturities of financial liabilities Less th

312、an 6 months 6 12 months Between 1 and 2 years Between 2 and 5 years Over 5 years Total contractual cash flows Carrying Amount(assets)/liabilities As at 30 June 2019$Non-derivatives Trade and other payables 1,531,610-1,531,610 1,531,610 Property loan 71,375 70,510 138,427 835,081-1,115,393 1,047,138

313、Plant&equipment loans 163,791 133,500 267,000 400,500-964,791 883,409 Import Loans 333,400-333,400 328,380 Total non-derivatives 2,100,176 204,010 405,427 1,235,581-3,945,194 3,790,537 As at 30 June 2018 Non-derivatives Trade and other payables 986,931-986,931 986,931 Property loan 1,127,733-1,127,7

314、33 1,111,500 Plant&equipment loans 163,791 163,791 297,291 667,500-1,292,373 1,157,831 Total non-derivatives 2,278,455 163,791 297,291 667,500-3,407,037 3,256,262 The Group had access to the following undrawn borrowing facilities at the end of the reporting period:Consolidated 2019 2018$Bank overdra

315、ft facility 500,000 483,713 Bank guarantee facility(AUD denominated)17,824 313,245Bank guarantee facility(USD denominated)874,985-Import facility 1,171,620-2,564,429 796,958 (d)Fair value estimation The fair value bases of financial assets and financial liabilities are outlined in note 1(n).All fina

316、ncial assets and liabilities have carrying values that are reasonable approximates of their fair values,for the Consolidated Entity.The fair values of current and non-current borrowings are based on discounted cash flows using a current borrowing rate.They are classified as level 3 fair values in th

317、e fair value hierarchy due to the use of unobservable inputs,including own credit risk.Carrying value$2,258,927 Fair value$2,330,848 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 XRF SCIENTIFIC LIMITED|2019 ANNUAL REPORT 35NOTE 3:CRITICAL ACCOUNTING ESTIMATES AND SIGN

318、IFICANT JUDGEMENTS Estimates and judgements are continually evaluated and are based on historical experience and other factors,including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.The Group makes estimat

319、es and assumptions concerning the future.The resulting accounting estimates will,by definition,seldom equal the related results.The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year

320、 are discussed below.(a)Estimated impairment of goodwill The Group tests whether goodwill has suffered any impairment,in accordance with the accounting policy stated in note 1(p).Please refer to note 13 for the details on impairment tests performed on goodwill.(b)Capitalisation of development expend

321、itures The Group capitalises development costs where management considers it probable that the related projects will be commercially and technically feasible and successful,in accordance with the accounting policy stated in note 1(p)(iii).(c)Tax The determination of the Group s provision for income

322、tax as well as deferred tax assets and liabilities involves significant judgements and estimates on certain matters and transactions,for which the ultimate outcome may be uncertain.If the final outcome differs from the Group s estimates,such differences will impact the current and deferred income ta

323、x assets and liabilities in the period in which such determination is made.The Group has recognised a deferred tax asset relating to the start-up losses incurred during FY17 and FY18 by the new German division.The Group has concluded that the tax losses will be recovered against the estimated future

324、 taxable income based on the approved business plans and budgets of the German division.(d)Allowance for expected credit losses The allowance for expected credit losses assessment requires a degree of estimation and judgement.It is based on the lifetime expected credit loss,grouped based on days ove

325、rdue,and makes assumptions to allocate an overall expected credit loss rate for each group.These assumptions include recent sales experience and historical collection rates.NOTE 4:SEGMENT INFORMATION Operating Segments AASB 8 requires a management approach under which segment information is presente

326、d on the same basis as that used for internal reporting purposes.This is consistent to the approach used in previous periods.Operating segments are reported in a uniform manner to which is internally provided to the chief operating decision maker.The chief operating decision maker has been identifie

327、d as the Managing Director.An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses,including those that relate to transactions with any of the Groups other components.Each operating segments results are reviewed regularl

328、y by the Managing Director to make decisions about resources to be allocated to the segment and assess its performance,and for which discrete financial information is available.The Managing Director monitors segment performance based on profit before income tax expense.Segment results that are repor

329、ted to the Managing Director include results directly attributable to a segment as well as those allocated on a reasonable basis.Segment capital expenditure is the total cost incurred during the period to acquire property,plant and equipment and intangible assets other than goodwill.The consolidated

330、 entity has determined that strategic decision making is facilitated by evaluation of operations on the customer segments of Capital Equipment,Precious Metals and Consumables.For each of the strategic operating segments,the Managing Director reviews internal management reports on a monthly basis.(a)

331、Description of segments The following summary describes the operations in each of the Groups reportable segments:Capital Equipment-Design,manufacture and service organisation,specialising in automated fusion equipment,high temperature test and production furnaces,as well as general laboratory equipm

332、ent.Precious Metals-Manufactures products for the laboratory,industrial and platinum alloy markets.Consumables-Produces and distributes consumables,chemicals and other supplies for analytical laboratories.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 36 XRF SCIENTIFIC

333、 LIMITED|2019 ANNUAL REPORT NOTE 4:SEGMENT INFORMATION continued (b)Primary reporting format business segments Segment information provided to the Managing Director for the full-year ended 30 June 2019 is as follows:Capital Equipment Precious Metals Consumables Total Full-year ended 30 June 2019$Total segment revenue 9,195,212 13,110,835 7,996,027 30,302,074 Inter segment sales(667,446)(613,285)-(