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Wellington creates platform for growth – Revenue up 74%

Annual Report24 February 2022AOFFinancials

®
is a registered Trade Mark of Wellington Drive Technologies WT 9645


Wellington Drive Technologies Ltd

P: +64 9 477 4500 E: info@wdtl.com

21 Arrenway Drive, Rosedale, Auckland 0632

PO Box 302-533 North Harbour, Auckland 0751, New Zealand

www.wdtl.com


25 February 2022

Market Release

For immediate release


Wellington creates platform for growth - Revenue up 74%


Wellington Drive Technologies Limited (Wellington), a leading provider of Internet of Things (IoT) solutions

and energy-efficient motors to the retail food and beverage industry, today released its fully audited

financial statements for the year ended 31 December 2021. The 2021 Annual Report can be found on the

Company’s web site at https://www.wdtl.com/investors/financial-results-and-reports.


The result is consistent with guidance provided on 15 December 2021.


2021 revenue was $64.2m, a 74.1% increase over 2020 a COVID-affected year. FY21 revenue grew 4%

above the FY19 pre-COVID year, even though FY21 was impacted by COVID with factory closures and

supply chain constraints.


Gross margin was 27.8% for FY21 compared to 28.6% for FY20. To support the increased demand from

customers and to manage significant supply chain disruption we bought some component parts on the spot

market, when they were not available from regular suppliers, costing an additional $1.1m. This, along with

higher shipping costs, could not always be passed on and caused some reduction in gross margin this

year. We expect this position to continue into FY22.


Operating costs increased from $11.5m to $15.1m, reflecting the restoration of normal remuneration,

increased salary levels to assist retention and additional investment to support business growth. The cost in

FY21 also included the repayment of voluntary staff salary reductions in 2020 amounting to $1.1m.


EBITDA increased from $1.2m to $2.6m although the improvement in underlying earnings is not

immediately apparent in these numbers. EBITDA in FY20 benefited from voluntary staff salary reductions,

government wage support payments amounting to $1.1m and a $1.0m non-cash income relating to the iPX

earn out. EBITDA in FY21 is after repayment to the staff of the 2020 salary reductions and an $0.3m non-

cash charge relating to the iPX earn out.







WT 9645

2

Underlying EBITDA after adjusting for these non-recurring items was a $6.1m improvement over FY20.


$000

2021 2020

EBITDA as reported 2,626 1,190

FY20 voluntary staff salary reductions repaid in FY21 1,109 (1,109)

Government wage support paid (15) (1,090)

iPX non-cash earn out 323 (1,016)

EBITDA adjusted 4,043 (2,025)


The net profit after tax for FY21 was $5.4m, this includes a non-cash tax credit of $6.1m to partially

recognise temporary differences and historic tax losses.


Operating cash flows in FY21 was $3.9m. Cash on hand increased from $4.6m in December 2020 to $6.0m

at the end of FY21. We consider we are adequately funded to execute current business plans.


Wellington is updating its guidance in respect to earnings and maintaining existing guidance for revenue for

FY22.


Revenue is expected to continue growing strongly in FY22, with the Company forecasting growth of

approximately 25% to around US$60m. Revenue would likely be higher if there were no constraints on

component supply. The additional gross profit from this growth is being reinvested into the expansion of

engineering and sales staff, and infrastructure as Wellington broadens its product and geographic spread.

We expect EBITDA in FY22 to be in the range of $4.5m to $5.5m, this forecast result is subject to the

Company successfully navigating today’s challenging supply chain environment.


CEO Greg Balla commented, “The Wellington team and our partners delivered an exceptional result in a

challenging FY21 environment. We continue to see strong demand for our Connect IoT solution and our

energy efficient ECR motors. This demand is accelerating as our customer’s return on investment (ROI) from

our IoT solution improves with greater engagement. While we are still experiencing significant supply chain

disruption, our teams continue to find outstanding solutions to these challenges. We are investing in people

to accelerate new product development, expand geographies and ensure we are attracting and retaining

great people. We are very focussed on helping our customers connect their complete fleets to our Connect

IoT platform to deliver on the growth potential for Wellington.”

About Wellington Drive Technologies:

Wellington is a leading provider of IoT solutions, cloud-based fleet management platforms, energy-

efficient electronic motors and connected refrigeration control solutions. It serves some of the world’s

leading food and beverage brands and refrigerator manufacturers and offers proximity-based marketing

for Smart Cities to the Australian market. Wellington’s services and products improve sales, decrease

costs and reduce energy consumption. Headquartered in Auckland with a global reach, Wellington is

listed on the New Zealand stock exchange under the ticker symbol NZ:WDT

For further information visit www.wdtl.com








WT 9645

3


Contact:


Greg Balla Howard Milliner

Chief Executive Officer Chief Financial Officer

Phone +64 21 938601 +64 27 5870455

---

Template
Results announcement

(for Equity Security issuer/Equity and Debt Security issuer)

Updated as at 17 October 2019



Results for announcement to the market

Name of issuer Wellington Drive Technologies Limited

Reporting Period 12 months to 31 December 2021

Previous Reporting Period 12 months to 31 December 2020

Currency New Zealand Dollar

Amount (000s) Percentage change

Revenue from continuing

operations

$64,218 +74.1%

Total Revenue $64,218 +74.1%

Net profit/(loss) from

continuing operations

$5,425 n/a

Total net profit/(loss) $5,425 n/a

Interim/Final Dividend

Amount per Quoted Equity

Security

No dividend will be paid

Imputed amount per Quoted

Equity Security

n/a

Record Date n/a

Dividend Payment Date n/a

Current period Prior comparable period

Net tangible assets per

Quoted Equity Security

$0.018 $0.005

A brief explanation of any of

the figures above necessary

to enable the figures to be

understood

See announcement and attached Annual Report 2021

Authority for this announcement

Name of person


authorised

to make this announcement

Howard Milliner

Contact person for this

announcement

Howard Milliner

Contact phone number 0275870455

Contact email address Howard.milliner@wdtl.com

Date of release through MAP


2502/2021


Audited financial statements accompany this announcement.

---

Annual Report
2021

Wellington

Annual Report 2021

12
Annual Report 2021Annual Report 2021Wellington Drive Technologies Ltd

Wellington Drive Technologies Ltd

Contents

® is a registered Trade Mark of Wellington Drive Technologies Ltd

There are statements in this document that are “forward-looking statements”. As these forward-looking statements are predictive

in nature, they are subject to a number of risks and uncertainties relating to Wellington, its operations, the markets in which it

competes and other factors (some of which are beyond the control of Wellington).

All references in this document to $ or “dollars” are references to New Zealand dollars unless otherwise stated.

Wellington’s financial year is 31 December.

02

Business highlights

09-16

About Wellington

03-08

Letter from Chair

and CEO

17-18

Our stakeholders

21-28

Global trends

19-20

Our strategy for growth

31-40

Why do our global

customers love us

43-45

Executive

Management

41-42

Directors

47-84

Financial Statements

91-93

Shareholder informationCorporate governanceContacts

85-88

94-103

89-90

104

Independent Auditor’s

Report

Statutory information

21
Annual Report 2021Annual Report 2021Wellington Drive Technologies Ltd

$64.2m

Revenue

$2.6m

Positive EBITDA

$5.4m

Net profit

$25.2m

Wellington IoT revenue

Wellington Drive Technologies Ltd

When we first developed IoT for commercial

refrigeration, we knew we were on to a good thing.

Fast forward to 2021, we almost doubled our

revenue year-on-year to $64.2 million and are well on

track to becoming a $100 million revenue company

in 2023.

We’re growing into a hardware-enabled, software as

a service (SaaS) provider. It’s our pathway to lifting

recurring revenue, to expanding in existing markets

and exploring new regions around

the world.

The demand for many of our products now exceeds

our supply capability due to global supply chain

issues but this is expected to be a short term

issue. Sustainability, along with other macro trends

like urbanisation, presents tremendous growth

opportunities for us.

Our future is now firmly focused on meeting the

needs of our global customers to deliver cooler

intelligence and a connected advantage.

43
Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

We are extremely pleased to report that Wellington achieved $64.2 million

in revenue and EBITDA of $2.6 million during the financial year ending 31

December 2021 (FY21).

Our EBITDA result is above our initial plan and reflects of our team’s

dedication and commitment to go above and beyond for our customers, as

well as our continuous drive to design and deliver innovative solutions, while

operating in an uncertain and challenging business environment.

We grew revenue 74.1% compared to COVID-affected FY20. FY21 revenue

continued to be constrained by COVID but was nevertheless up 4.0% on our

pre-COVID result in FY19.

The speed at which we’ve rebounded positions us well to deliver the next

phase of our growth strategy. We are on track to solidify our global leadership

in IoT and high-efficiency motors for the commercial refrigeration industry – a

sector worth $11.8 billion globally.

Gross margin was 27.8% for FY21 compared to 28.6% for FY20. To support

the increased demand from customers and to manage significant supply

chain disruption we bought some component parts on the spot market, where

they were not available from regular suppliers, costing an additional $1.1

million. This, along with higher shipping costs, could not always be passed on

and caused some reduction in gross margin this year. We expect this position

to continue into FY22.

Operating costs increased from $11.5 million to $15.1 million reflecting the

restoration of normal remuneration, increased salary levels to assist retention

and additional investment to support business growth. The cost in FY21 also

included the repayment of voluntary staff salary reductions in 2020 amounting

to $1.1 million.

The net profit after tax for FY21 was $5.4 million, this includes a non-cash tax credit of $6.1 million to partially

recognise temporary differences and historic tax losses.

Operating cash flows in FY21 was $4.0 million. Cash on hand increased from $4.6 million at December 2020 to

$6.0 million at the end of FY21. We consider we are adequately funded to execute current business plans.

EBITDA increased from $1.2 million to $2.6 million although the improvement in underlying earnings is not

immediately apparent in these numbers. EBITDA in FY20 benefited from voluntary staff salary reductions, government

wage support payments amounting to $1.1 million and a $1.0 million non-cash income relating to the iPX earn out.


EBITDA in FY21 is after repayment to staff of the 2020 salary reductions and an $0.3 million non-cash charge relating

to the iPX earn out.

Underlying EBITDA after adjusting for these non-recurring items was a $6.1 million improvement over FY20.

Letter from

Chair and CEO

Gottfried Pausch

Chairman

Chief Executive Officer

Greg Balla

$000

20212020

EBITDA as reported2,6261,190

FY20 voluntary staff salary reductions repaid in FY21 1,109(1,109)

Government wage support paid(15)(1,090)

iPX non-cash earn out323(1,016)

EBITDA adjusted4,043(2,025)

65
United States and Canada

Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Sustainability, along with other macro trends like

urbanisation, presents enormous opportunities for

our business.

Demand for many of our products now exceeds supply.

To meet this growing opportunity, we are investing in our

people and manufacturing capacities with our partners.

We are increasing our research and development

(R&D) effort during FY22. The R&D effort will focus

on redesigning products to work around electronic

component shortages, as well as delivering new

products to market.

As more of our customers see the return-on-investment

(ROI) our IoT technology delivers, we are ready to

expand our offerings to existing customers, as well

as take advantage of the huge retrofit cooler market

worldwide.

For example, in FY 21 a large Australian beverage

customer committed to retrofitting and connecting its

entire refrigeration fleet with us. We are actively working

with several customers to retrofit their fleets.

We estimate that there are 90 million bottle coolers in

operation globally today and the addressable portion is

approximately 30 million coolers. Addressable coolers

are coolers that we have a solution for in a market that is

accessible to Wellington. Today we estimate that two and

a half million of those 30 million coolers are connected to

an IoT platform, one and a half million are connected to

the Wellington Connect IoT platform.

During FY21, we grew the number of refrigeration units

connected to our Connect™ Cloud platform by 42% from

FY20, taking recurring revenue up to $6.8 million.

Revenue grew significantly across all regions, compared

with FY20. This was an exceptional achievement,

set against shipping delays, electronic component

shortages, and other logistic and supply chain issues

that affected our operations.

Our United States and Canada business grew by 41%

on FY20 to $11.0 million, largely due to sales of our

energy-efficient ECR

®

2 motors.

Latin American revenue rose 91% on FY20 to

$40.1 million – mainly attributable to post-COVID

demand recovery but also assisted by the launch of

new products and directing additional resources to the

region to accelerate growth. The LATAM region presents

significant new build and retrofit opportunities for us,

which we will extensively explore in FY22.

In EMEA, revenue grew to $8.2 million, up 77% on

FY20. This stellar result is attributed to repositioning our

high-efficiency motors for supermarket chains.

The revenue in Asia-Pacific grew to $5.0 million, up 41%

on FY20, with our Connect™ IoT solution underpinning

this strong growth.



Wellington’s ongoing success lies in its ability to grow

into a hardware-enabled, full-service SaaS provider.

Our Connect IoT ecosystem is an example of Wellington

at its best. The hardware and software solutions offer

sizeable opportunities for recurring revenue growth, as

we further develop the ecosystem to service existing

markets and exploit new regions including, Europe and

North America.

During FY21, we bolstered our regional teams to

help customers derive value from our Connect IoT

ecosystem. This approach paid off, with a record number

of devices connected in FY21.

FY21 also saw the launch of new products to market,

driven by powerful customer insights. We launched

our new Connect™ Network product, which allows

contactless data uploading. This product gives a

new access point into the North America and EMEA

markets – two key growth regions we are targeting next

financial year.

We are currently validating the product with some

existing large Australian and Latin American clients.

By the end of Q1 FY22, we expect to be ready for pilot

customers in Europe and North America.

We also launched Connect™ Monitor, which will

significantly expand our market reach and access by

easily retrofitting non-connected refrigeration units. It

is compatible with our Connect IoT apps, and other

Connect™ products, and can capture operational data,

offering customers a cloud-based solution to harness

actionable insights.

Global growth achieved in

a challenging landscape

Tipping point for growth

Delivering on our IoT vision

Latin AmericanAsia-PacificEMEA

$11.0m

41%

$40.1m

91%

$8.2m

77%

$5.0m

41%

78
Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

In 2019, we presented our vision to grow revenue to

$100 million by 2023. Despite the disruption caused

by the global pandemic, we remain committed to this

objective.

As we move into FY22, we will re-focus on bringing

new innovative solutions for our customers’ varied

requirements, and most importantly, deliver profitable

growth.

Our evolution into a hardware-enabled SaaS company

is delivering results. In the past financial year, we almost

doubled our revenue to $64.2 million and we expect

continued strong growth in the year ahead.

Revenue is expected to continue growing strongly

in FY22, with the Company forecasting growth of

approximately 25% to around US$60 million. Revenue

would likely be higher than this if there were no

constraints on component supply. The additional gross

profit from this growth is largely being reinvested

back into the expansion of engineering, sales staff

and infrastructure as Wellington broadens its product

and geographic spread. We expect EBITDA in FY22

to be in the range of $4.5 million to $5.5 million

although this forecast result is subject to the Company

successfully navigating the very challenging supply chain

environment present today.

Our team is committed to making a difference with

solutions that reduce energy in refrigeration systems.

Refrigeration and air conditioning use approximately

15% of the global electricity demand. We have

sustainable solutions to help reduce the demand in our

markets. We are actively supporting customers and

working with standard groups to impact change. Our

customers have now installed over three million high-

efficiency motors with energy savings of 2.2TWh to date.

We are also focused on the impact manufacturing our

distributing our products has and we are evaluating

options to reduce our footprint.

The opportunities for growth are strong and our strategy

is focussed on leveraging these opportunities to

maximise shareholder value.

Key to our success will be to successfully completing

the transition from operating as a standalone hardware

company to a hardware-enabled SaaS company.

We are the developers of IoT for commercial refrigeration

and our SaaS ecosystem unlocks recurring revenue

streams as we continue to refine and develop

our world-leading platform to meet the needs of our

global customer base.

We would like to take this opportunity, on behalf of the

Wellington Board of Directors and Executive Leadership

Team, to convey our thanks to every member of our

resilient and innovative team for their dedication during

the last financial year and ongoing.

And to our shareholders, thank you for your continued

support and commitment to the success of the

organisation, we are extremely grateful.

FY22 outlook

Protecting

our environment

Summary

109
Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

About Wellington

We are proud to be a global leader of innovative

hardware and software refrigeration technology, working

with some of the world’s leading food and beverage

companies, to develop solutions that help them increase

sales, reduce costs, and improve sustainability.


Headquartered in New Zealand, with a global footprint,

Wellington is one of the world’s leading suppliers of

energy-efficient motors, refrigeration control solutions

and cloud-based IoT fleet management platforms.


We are the first company to apply IoT technology to

bottle coolers, which delivers integrated cloud computing

into the commercial refrigeration sector. This provides

our customers with valuable business data about the

performance of their refrigeration units, enabling them

to make more informed strategic decisions and

reduce costs.

Our world-leading technology also enables unique

consumer engagement experiences, allowing our

customers to influence their consumers at the point of

decision in new and exciting ways. This helps to build

brand loyalty and offers a strong competitive advantage

in an increasingly competitive retail environment.


As innovators, we are proud to employ some of

the leading minds in refrigeration engineering and

software development who are committed to working in

partnership with our global customers to deliver unique

and tailored solutions, which grow their market share

through innovative technology.

1211
Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Our innovative hardware and software helps some of the world’s leading food and beverage brands solve complex

business challenges, maximise profits and improve sustainability through customised solutions.

Connect IoT:

Our comprehensive ecosystem of hardware, wireless and digital IoT solutions, Connect IoT, brings world-leading

technology to commercial refrigeration, helping food and beverage manufacturers better manage their refrigeration

assets, reduce costs, increase sales, and provide valuable data which informs better business decisions.

ECR motors:

Our ECR technology provides our customers with energy-efficient refrigeration motors paving the way in sustainability.

With our ECR 2 motors proven to be up to 99.97% reliable and at only 36.5 dBA, they are among the quietest motors

in the industry with operational efficiency of up to 70%.

Consumer Engagement:

Our world-leading iProximity consumer engagement technology combines the latest location-based IoT devices,

smartphones and our powerful iPX™ Cloud platform. It allows our customers to deliver new, exciting communications

solutions, which improve their consumer engagement at the point-of-sale (POS), helping to influence purchasing

decisions and drive sales.

Our solutions

Monitor

Connect

ECR 2

motor

iPX

Cloud

platform

1413
Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

We never compromise on quality. We are committed

to being the global leader in the delivery of high-quality

refrigeration solutions and services.


Our flexible solutions, which are easily installed and

commissioned, are manufactured by our partners in

Vietnam. We are exploring opportunities to manufacture

in the Americas, closer to our customers.

All our factories are ISO9001 certified, and we closely

supervise the process and quality control across

our manufacturing facilities. We maintain direct and

strong relationships with our key component suppliers.

These relationships served Wellington well through the

pandemic and helped us navigate the challenges of

supply chain disruptions.

We know that reliable refrigeration services are critical.

That is why we test our products intensively, in both the

development and production phases. All our products are

tested at extreme abuse levels during development and

are validated using accelerated life testing. We conduct

continuous production sampling and testing to ensure all

our products continue to perform in the way intended.

Leading manufacturing, quality,

and reliability

1615
Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Our continuous commitment to success means

continuing to deliver innovative solutions that exceed

customer expectations, increase sales, and reduce

costs. That is why our customers are at the centre of our

ongoing R&D programme.


Our multi-disciplinary R&D team – based in New

Zealand – works in partnership with our customers

and their manufacturing partners, to develop the best

outcomes. In each region we also have teams of field

engineers based in each region, who work very closely

with our customers.


Our R&D hub is equipped with a highly accelerated life

testing (HALT), environmental chambers, airflow test

chambers, dynamometers, electromagnetic compatibility

testing facilities, a fully equipped toolroom and the ability

to build printed circuit board assemblies.


We are enormously proud of the Wellington team

which includes some of the world’s leading refrigeration

engineers and developers. Our team includes hardware,

software, mechatronics, refrigeration, manufacturing,

and quality engineers. Our expertise of motor control

systems and refrigeration offers us a strong advantage

against our competitors.

Our commitment is to exceed our customer’s

expectations, every time.


We partner collaboratively with our customers, to

deliver uniquely specialised solutions through a highly

personalised service that directly focuses on saving

our customers time, money and helping them gain a

competitive advantage in a crowded market.


As industry specialists, we understand the importance of

a strong global supply chain. We know how critical “on

time” delivery is to production. During FY21, despite the

ensuing components and materials shortages, caused

by the pandemic, our supply team was relentless in

the pursuit of components. Meeting customer demand

incurred an additional cost of $1.1 million for spot market

component buying.


We also understand the challenges of building products

in a manufacturing environment and so we design our

products to be flexible, easy to install and commissioned,

and to minimise the required stock keeping units (SKUs)

in inventory.


Our commitment to continued

innovation

Uncompromising customer

service

1817
Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

We pride ourselves on building strong and enduring relationships with our customers, partners, investors, and staff

because we know that our continued success is dependent on strong partnerships.


We believe our success in building mutually beneficial relationships is the result of focussing on the things our

stakeholders care about – using innovation to solve complex problems that result in increased sales, reduced costs

and improved sustainability.

We believe our investors share our view that there

are immense opportunities for growth as we continue

to innovate and drive change within the commercial

refrigeration sector.


We are committed to maximising shareholder return and

take advantage of these opportunities. Our partnerships

with some the world’s leading food and beverage

companies, such as Coca-Cola, PepsiCo, AB InBev

and Heineken position us exceptionally well as a global

leader in innovation for commercial refrigeration, drive

growth and deliver returns to our investors.


We are committed to continue providing our investors

with balanced, clear and transparent information,

allowing them to make informed decisions about their

investments.

Our business requires smart and skilled people to deliver

success. We know that our continued success relies on

our ability to attract and retain the highest-quality talent.


We have a global team of 89 comprising leading

innovators in hardware, software and digital product and

solution technology, with specialist knowledge in IoT

devices.


Our advantage is that our team have a common

passion for technology and shared learning. We are

all committed to collaborating with our customers and

suppliers to develop innovative solutions to complex

problems.

During the period, David Burden accepted the position of

Chief Customer Officer to lead our team in implementing

our growth strategy. David has extensive experience

in using technology to deliver innovative solutions for

customers. David commenced leading our global sales

and marketing teams, taking over from Steve Hodgson

who worked with us for many years, and we would like

to thank Steve for his service and commitment to

the organisation.

In an increasingly competitive employment market, we

know we need to continually enhance the employment

experience to remain an employer of choice. We have

employed a head of people and culture to ensure we

are at the forefront of delivering the best employee

experience to our team.

Our new Chief People Officer, Angela Lewis, came on

board at the very end of the year. Bringing her wealth of

expertise from working in large corporates, Angela will

lead and drive our people-led initiatives, talent retention

strategies, and evolve the employee value proposition

(EVP) offering.

In November, we welcomed Laura Bocock into the

newly created role of Transformation Lead. Laura is

leading initiatives that are focused on helping us scale

productively and increasing the speed at which we

deliver high-value innovative solutions to our customers.

East West Manufacturing

East West Manufacturing is our global manufacturing and supply chain partner,

specialising in motor mechanical assembly, plastics design, injection moulding and

integrated electronics manufacturing services.


In January 2022, East West acquired Compass Electronics Solutions, which will

provide Wellington the opportunity to manufacture with East West in the North

American market to better service our customers in the region.

Our partners and distributors

Investors

Our team

Our stakeholders

2019
Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

The opportunities for growth are strong and our strategy

is focussed on leveraging these opportunities to

maximise shareholder value.


In 2019 we presented our Vision 2023, with the aim of

achieving $100 million in revenue by 2023. Despite the

disruption caused by the global pandemic, we remain

committed to achieving this objective.


The key to our success will be continuing the successful

transition from operating as a hardware company to a

hardware-enabled SaaS company. We are the leaders in

IoT for commercial refrigeration and our SaaS platform

presents an enormous opportunity for recurring revenue

growth as we continue to refine and develop our

world-leading platform to meet the needs of our global

customer base.


This transition is already delivering results and we expect

expect continued strong growth in the year ahead. This

comes on the back of continued customer demand

for high-quality insights which enables more informed

business decisions.

The three key planks of our business strategy are:

1. Increasing market share of new coolers and

retrofitting existing coolers

There are approximately 30 million bottle coolers

globally and about two and a half million are

connected to a platform. Working with food and

beverage manufacturers to retrofit their existing

coolers is a key way we expect to grow our market

share.


We also have a clear opportunity to connect to

a higher proportion of the nine million new bottle

coolers manufactured each year. Currently we sell

approximately half a million controllers each year,

meaning there is a significant untapped market.


2. Accessing new regions

We will focus our efforts on not only growing our

market share within existing markets, but also

markedly increasing our presence in markets that

provide robust growth opportunities. We plan to

increase the presence of our IoT ecosystem in

EMEA and North America. Our newly released

products Connect Monitor and Connect Network

allow us to provide solutions that are suitable for

these markets.


3. Launching new verticals

We will use our software and engineering expertise

to launch a range of new products that meet the

needs of the various parts of the food and

beverage sector.


We will take advantage of the growing demand for

data by using our expertise in IoT to connect a wider

range of assets to our Connect IoT platform.

Our strategy

for growth

2021201920182020

COVID-19 impactedCOVID-19 impacted

New coolersNew regionsNew verticals

$58.8m

Revenue

$61.7m

Revenue

$36.9m

Revenue

$64.2m

Revenue

2221
Climate change remains one of the world’s greatest challenges. Last year’s United Nations Climate Change

Conference (COP 26) in Glasgow saw countries pledge further cuts in emissions to limit temperature rises.


At the same time, some of the world’s largest food and beverage companies have pledged to cut emissions. Among

them, are two of our customers – Coca-Cola Europacific Partners (CCEP), a major Coca-Cola bottler, which has

committed to achieve net zero emissions by 2040; and Heineken has committed to 100% of its coolers being in the

top efficiency class by 2027.


As governments and companies start looking at how they can achieve their emissions pledge, we believe we have a

vital role to play in helping the food and beverage sector significantly improve its energy efficiency.


Refrigeration is a significant user of electricity, which is still largely generated by fossil fuel in many parts of the world.

Our highly energy-efficient ECR 2 motors and our Connect IoT ecosystem, which provides in-depth data on energy

use, provide a distinct competitive advantage in the refrigeration market, and allows us to work proactively with leading

manufacturers to help them achieve their emissions targets.


Mexico’s largest food and drink company, GEPP, is an example of this commitment to emissions reduction, winning

the Wellington Sustainability Award in 2021 for its achievements. After installing our ECR 2 motor into its 126,000

stores, GEPP’s customers reported a saving of NZD$105.8 million on electricity costs. This is the energy-saving

equivalent of 37,343 car trips around the world

1

.

1

Comparative statistics sourced via https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator and https://yearbook.enerdata.net/

electricity/world-electricity-production-statistics.html

We live in a rapidly changing world.


Countries continue to grapple with the social and economic impacts of a global pandemic, there is a heightened

urgency to act on climate change, populations are growing and urbanising fast, and our economies are digitising at an

unprecedented pace.


These changes, however, present huge number of opportunities for adaptable flexible, and innovative companies such

as ours. We believe our focus on innovation and the development of new products and services will allow us to grow

rapidly as we continue to provide unique solutions to our customers.

Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Global trends

Climate change

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Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

The world population continues to grow rapidly and urbanise, particularly in

Asia, the Middle East and Central and South America. These regions are

also home to some of the world’s fastest growing economies with a rapidly

expanding middle class.


Increasing urbanisation and growing wealth is driving a modernised retail

sector and increased demand for refrigeration, with consumers demanding

access to chilled fresh produce, frozen food and chilled drinks.


Our presence in Latin America, the Middle East and Asia means that we can

take advantage of this growing market as we leverage the strong partnerships

we have built over many years.

Urbanisation and

demographic changes

2625
Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

The global economy continues to digitise at an unprecedented rate, and the

pandemic is only accelerating this process. Increased digitisation brings a

growing expectation from companies that they can capture accurate data in

real-time to help inform their business decisions.


This means there is growing demand for IoT technology, with a recent survey

finding 79% of organisations were planning to invest significant capital into IoT

over the next two years. While research firm IDC predicted that more than 50%

of global data generated will come from IoT devices by 2025.


As the inventors of IoT in bottle coolers, we stand to benefit from this

investment and growth. Our Connect IoT ecosystem provides food and

beverage manufacturers with sophisticated real-time data, giving us a distinct

competitive advantage in the refrigeration market.

Digitisation

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Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

At Wellington, we are proud to be partnering with some

of the world’s leading food and beverage manufacturers,

helping them to improve their energy efficiency, reduce

their carbon footprint and meet their sustainability goals.


From protecting the food supply to ensuring medicines

remain safe, refrigeration systems are increasingly

critical in the modern world. But refrigeration is also

energy intensive, with the International Institute of

Refrigeration estimating about 15% of the world’s

electricity is used to drive refrigeration and air-

conditioning systems

2

.


At the same time, the International Energy Agency (IEA)

says rapid increases in electricity demand is putting

power systems under strain and pushing power prices

and emissions to record levels

3

.


For the world to meet its climate change goals, with more

than 130 countries pledging or considering reducing

emissions to net-zero by 2050, emissions from electricity

need to decline. This means we need to be using

electricity more efficiently in all parts of the economy.


This presents an enormous opportunity for Wellington,

as companies actively seek energy-efficient solutions

for their refrigeration systems. We are committed to

leveraging this opportunity through ongoing innovation

and partnerships to help our customers develop more

energy-efficient solutions, as well as continuing to deliver

the highest standards of refrigeration.

Our energy-efficient motors, such as the ECR 2 motor,

significantly reduces energy consumption in beverage

coolers and vending machines by switching the fan to

low speed when the compressor is not operating. The

ECR 2 has an efficiency of up to 70% and a power factor

of 0.95. Traditional motors are only 18-22% efficient,

often with a power factor of less than 0.5. This means

our motors are over 300% more energy-efficient than

traditional motors.


A trial at a major supermarket chain found that replacing

older induction motors with our ECR 2 reduced energy

usage by 84% and delivered an ROI in less than a year.


Since the launch of our ECR 2 motor in 2016, more than

three million motors have been produced and installed

around the world. It is these kinds of innovations that

have seen our energy-efficient technology save over

20.5 TWh of energy since we started Wellington –

enough energy to power the entire world for 7.4 hours –

leading to a reduction in carbon emissions of 14.5 million

metric tonnes

4

.

We are proud that our environmental and sustainable

record was recognised by the Silver Medal by EcoVadis,

which places us in the top 20% of companies worldwide.

Sustainability

How we worked with Mexican food and beverage giant GEPP to

save energy and cut their carbon footprint


With coolers located in 126,000 stores across Mexico, GEPP is one of Mexico’s

largest beverage companies.

With the support of Wellington, GEPP commenced installing our ECR 2 motor

technology into their coolers and as a result was able to reduce its carbon

footprint by 369,933 tCO

2

, driven by an 824 GWh power saving

5

. This has saved

GEPP’s customers NZD$105.8 million in electricity costs.

2

https://iifiir.org/en/fridoc/how-to-improve-energy-efficiency-in-refrigerating-equipment-124004

3

https://www.iea.org/reports/electricity-market-report-january-2022

4


Comparative statistics sourced via https://www.statista.com/statistics/280704/world-power-consumption/

5

Comparative statistics sourced via https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator and https://yearbook.enerdata.net/

electricity/world-electricity-production-statistics.html

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Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

• Track the location of all field

equipment.

• Reduce equipment loss.

• Minimise CAPEX spend on new

equipment.

• Optimise cooler replacement

cycle based on actual

equipment condition.

A customer reclaimed over 45% of

their lost coolers after adopting the

Connect

TM

Track app.

Asset

management

One Wellington customer reduced

their average service cost by about

50%. Savings came from faster

diagnostics, accurate early fault

identification, and better first-time

fix rate.

• Verify equipment operation.

• Remote diagnostics reduce

downtime and prioritise issues.

• Easy tools simplify

troubleshooting and service in

the field.

• Operational data identifies

problem areas, reducing service

costs.

• Improve scheduling of

preventive maintenance.

Technical

performance

A customer reviewed their

equipment fleet in different channels

after analysing the data and

determining that over 50% of their

coolers were turning over less than

10% of their capacity per day.

• Maximise equipment ROI by

understanding activity at each

point of sale.

• Identify assets that aren’t

paying for themselves and right

size them.

• Upsize equipment to capture

unmet demand and increase

revenue.

Commercial

performance

A customer reduced their servings of

product that were out of temperature

spec across the fleet from 15% to

just 2% by identifying overnight

cooler switch offs and correcting the

retailer’s behaviour.

• Identify case contamination and

undesirable retailer behaviour.

• Support sustainability

initiatives by minimising energy

consumption while ensuring

product temperatures are safe

and desirable.

• Be alerted to potential product

quality/HACCP issues.

• Better justify future CAPEX

investments with performance

data for each asset.

Operations

management

Engage your customers by

dynamically sharing planograms,

new programs, and sales specials

with digital, on demand technology.

• Easily communicate

planograms, sales specials and

new programs.

• Dynamically update information

anytime with field trips or added

cost.

Customer

engagement

One customer increased sales by

114% over a 6-week promotion

that focused on new consumer

engagement at the POS equipment.

• Connect with consumers at

the POS with access to special

promotions.

• Influence decisions with

customisable content.

• Build loyalty with unique

experiences.

Consumer

engagement

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Our cutting-edge IoT technology is supporting some of

the world’s leading food and beverage manufacturers

to better manage their refrigeration assets in a range of

ways. Our solutions help improve maintenance efficiency

and servicing, reduce asset losses and save money for

our customers around the world.


Beverage manufacturers and bottlers are often required

to place commercial refrigeration assets (coolers) at

the POS. This wide distribution of refrigeration assets,

and the loss of direct control, means manufacturers can

suffer high rates of asset loss through misplacement,

theft, or poor compliance.


For example, a recent survey of our Latin American

beverage customers found the rate of loss was between

3% and 7% of their total cooler fleet annually. For an

average bottler, with a fleet of 60,000 coolers, this could

mean up to 4,200 coolers lost every year. Given the

average cooler costs $US500, this represents an annual

expenditure impact of USD$2.1 million.


Through the development of our leading Connect IoT

ecosystem, we can support our customers to actively

monitor their field equipment and reduce equipment

loss. Our IoT technology allows for ongoing passive

data acquisition and has geolocation capability. This

means manufacturers can monitor the precise location

and performance of each cooler; and our customers

can improve their cooler replacement cycle, reduce the

number of lost coolers and make better use of

capital budget.

How we helped one of our customers

recover 40% of their lost refrigeration

assets


A bottler in Latin America recently sought our help to

recover lost or stolen refrigeration assets.

The lost assets were written off and the company was

preparing to invest two to three times the book value of

these assets for replacement units.


They previously installed our Connect SCS electronic

controllers into many of their new build coolers, which

logs and stores operational and geolocation data.

With our support, the company implemented a cooler

collection plan, integrating our data acquisition software

into its own app. This allowed their commercial team to

collect the precise location and asset number of coolers

in the field.

After several months of data collection, an internal

control list was generated to identify the number and

precise location of the lost coolers. The company could

then launch a recovery operation to collect the lost

coolers. This resulted in the bottler recovering 40% of

its lost or stolen coolers, reducing capital spend and

delivering a ROI from our technology within two years.

Asset management

Why do our global

customers love us?

Return-on-investment period over total cooler connectivity investment

6

(investment to connect entire fleet)

6

Graph sourced from Wellington White Paper, How an investment in IoT for the field refrigeration fleet recovered 40% of lost assets and achieved

ROI (USD)ROI %

-$1,000,000

-100%

-100%

-47.92%

-$900,000

-$441,600

$475,200

$16,800

0123

1.78%

49.25%

-120%

-$800,000

-80%

-$600,000

-60%

-$400,000

-40%

-$200,000

Investment

%ROI

Years

-20%

$0

0%

$200,000

20%

$400,000

40%

$600,000

60%

ROI in less than two years https://www.wdtl.com/resources/white-papers/

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Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

We pride ourselves on developing tailored and innovative technology solutions

which improve the technical performance of our customers’ refrigeration units.


Food and beverage manufacturers must have confidence that their

refrigeration units are performing to the highest standards to ensure product

safety and to identify issues early.


Our globally leading IoT technology helps them to do this by verifying the

operation of their refrigeration equipment. Our technology allows remote

diagnostics, simplified troubleshooting and the improved collection of

operational data.


This helps our customers identify, then rectify issues quickly, to avoid or

minimise any potential loss of stock, due to temperature changes.


Our Connect™ Field app allows service technicians to connect to a cooler via

Bluetooth, displaying error flags and identifying issues. Our system also allows

the control of individual relays to check component operation and download

months of cooler data to a Smartphone. Technicians can then diagnose a

situation based on accurate information and real-time data, removing any

guess work.


This technology saves our customers money in unnecessary servicing costs.

For example, after implementing our Connect IoT ecosystem, one of our

customers halved its average service costs by providing faster diagnostics,

improving fault identification accuracy and delivering a better first-time fix rate.

Technical performance

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Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Our Connect IoT technology helps our customers to make the best use of their

refrigeration units, ensuring they have the right units at the right location to

meet demand and maximise sales.


Commercial refrigeration and coolers are a significant capital expense for food

and beverage manufacturers, and it is crucial that this investment delivers

maximum return.


By implementing our Connect IoT ecosystem, our customers collect a wide

range of business intelligence that tells them if a unit is over or undersized for

every single POS.


Unlike other options available, our technology allows our customers to identify

where assets might need to be upsized to capture unmet demand. As a result,

our technology is allowing customers to maximise the ROI of their coolers.

Commercial performance

Wellington’s Connect IoT technology allowed a customer to review its

equipment fleet in different channels.


After analysing the data, we discovered more than 50% of the coolers were

turning over less than 10% of their capacity per day.


Understanding this, enabled the customer to begin swapping these

underperforming units for smaller, more efficient units, resulting in

significant savings.

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Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Our Connect IoT ecosystem provides our customers

with critical insights into the field operation of their

commercial refrigeration and cooler units.


In turn, this helps our customers to improve

sustainability, identify case contamination and reduce the

risk of undesirable retailer behaviour.


For example, our Connect SCS is a sophisticated

smart controller that provides voltage and current

measurements, allowing our customers to report the real

energy usage across its fleet.


This also enables easy identification of when a retailer

might turn a cooler off overnight in the mistaken belief

this will save electricity, which can impact product quality

and result in food safety issues.

Our “always-on” technology means our customers are

alerted when equipment is unloaded and can track

product reloads, identify unauthorised products being

placed into a cooler. This allows prompt action to help

adjust retailer behaviour.


With our support, we helped one of our customers

reduce the number of coolers selling out-of-temperature

products from 15% to just 2% of its fleet by allowing

them to identify and rectify overnight cooler switch

offs. Cooler operating temperatures are critical to our

customers’ product sales and coolers operating

correctly will have up to 55% higher product sales than

warmer coolers.

Operations management

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Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Providing actionable insights for our

customers


We are committed to making life easier for our

customers, as well as for our customers’ customers.

We believe in the power of our IoT technology to help

achieve this.


By working in partnership with food and beverage

manufacturers, we continue to develop innovative and

leading solutions that provide our customers with the

competitive edge required to gain retail floor space in an

intensely competitive market.


As our Connect IoT ecosystem easily integrates with

different platforms, we can place a world of data at the

fingertips of sales teams – including detailed product

information and energy efficiency.


This helps empower our food and beverage customers

to engage with retailers and others in evidence-based

conversations, allowing them to easily demonstrate the

value and profitability of their refrigeration unit.

Our software technology solutions allow our customers

to engage with their consumers in new and exciting

ways, helping to increase sales and build brand loyalty.


Through our “always-on” technology, we can support

our customers to better control the brand experience,

offer personalised promotions to consumers and digitally

engage with individualised consumers, helping to

influence purchasing decisions.


Our iProximity engagement platform, for example, allows

customers to connect with consumers at the POS, giving

them access to special promotions. Customers can also

make use of our interactive ScreenSmarts solution to

integrate customised, interactive digital signage into food

and beverage coolers.

In a retail environment that is increasingly digitised and

connected. The ability to engage with consumers at

the POS can be a powerful point of difference, allowing

brands to engage directly with their consumers at the

right time to drive sales.


An example of the power of our Connect IoT ecosystem

to drive sales is when one of our customers, returned an

increase in sales of 114% during a six-week promotion

that focussed on new consumer engagement at the POS

using our technology.


Customer engagement

Consumer engagement

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Directors

Gottfried Pausch

Executive Appointment and

Remuneration


Audit and Risk

Chairman | Independent Director

Gottfried Pausch is an independent

director of McKay Ltd and

Blackhawk Tracking Ltd. Gottfried

holds an electrical engineering

degree from Austria and a Master’s

degree in Business Administration

from Duke University in the USA. He

is a director for one of the National

Science Challenges, an initiative of

the Ministry of Business, Innovation

and Employment (MBIE). Gottfried

was the former CEO at Actronic

Technologies, Executive Chairman

at AuCom Electronics, Chairman of

Invert Robotics - all companies with

New Zealand based engineering,

manufacturing and global sales &

service networks and an executive

in residence at The Icehouse. This

followed a 22-year career with

German engineering and electronics

conglomerate Siemens, one of

the world’s leading suppliers of

products, solutions and services in

the field of technology. During this

period, he held the positions of CEO

Siemens Energy Services Ltd and

managing director of Siemens New

Zealand.

John Scott

Independent Director

John Scott is CEO for Invenco,

a world leader in payments and

forecourt solutions (fintech and

IoT) in the petroleum space.

He has previously had a range

of c-suite roles across sales,

marketing, operations and

product management with Navico,

Brunswick and Navman. John

also had business development,

engineering and project engineering

roles with Ericsson/Volex

(communications). He graduated

from the University of Auckland in

1997 with a Bachelor of Engineering

(BE Mech). John has 20 years of

global experience in managing

large multilocation go-to-market,

operations and design teams – with

deep pricing experience across

all channels and markets. He has

been actively involved in multiple

acquisition events and fundraising

activities. John has an in-depth

knowledge of the rapidly developing

dynamics of global electronics

supply, big data and IoT growth

opportunities, and has operating

experience in the Asian, European

and North American markets.

Greg Allen

Director

Based in Vancouver Canada,

Greg Allen is the former CEO

of Wellington and has worked

around the world leading business

development, supply chain and tech

manufacturing for over 30 years.

Greg provides Wellington with the

benefit of his international customer

and corporate development

expertise as the Company continues

to focus on providing the best

solutions for the global food and

beverage market. Greg is currently

a Venture Partner for Chrysalix

Venture Capital, a global venture

capital fund focused on industry

4.0, climate technology and

resource productivity. In addition,

he serves as Board Chair of HaiLa,

a Canadian-based low-power Wi-

Fi solutions start-up; is a board

observer for Feasible, a US-based

EV battery intelligence company;

and is a member of the Economic

Advisory Committee for the City of

Richmond, British Columbia. Greg

gained his education in radio and

electronics in the New Zealand

Army, holds an MBA from Edinburgh

Napier University and holds the

Canadian Institute of Corporate

Directors ICD.D professional

designation.

John McMahon

Audit and Risk (Chair)

Independent Director

John McMahon has over 30 years’

experience in the Australasian

equity markets, predominantly

as an equity analyst covering

the telecommunications, media,

gaming, transport and industrials

sectors. Previous roles include

Head of Research and Head

of Equities for ABN AMRO NZ

and Managing Director of ASB

Securities. John is a director and

Chair of Solution Dynamics Ltd

(SDL) and was also a director of

NZX Ltd (NZX) until 31 December

2021. He holds a Bachelor of

Commerce (Honours), an MBA

and is a CFA (Chartered Financial

Analyst) charter holder.

Keith Oliver

Executive Appointment and

Remuneration (Chair)


Audit and Risk

Independent Director

Keith Oliver was appointed a

director of Wellington in March

2019. He is also an Independent

Director at Rakon Limited,

Chairman of Blackhawk Tracking

Limited and since 22 July 2021

he has been a director at VWork

Limited. He has over 20 years’

experience in CEO, director

and chairman roles, and has

extensive experience expanding

technology businesses in USA,

South America, Europe, Asia and

Australia. Keith was Chairman of

Actronic Technologies for 10 years,

and Chairman of Compac Sorting

Equipment Limited, where he also

held leadership and board director

roles. He has Crown company

governance experience in science

and health, having worked as

a Director of New Zealand’s

Institute of Environmental Science

and Research Limited (ESR).

Prior to his governance roles,

Keith had a 20-year career in

telecommunications, broadcasting,

strategic planning and private

equity investment in New Zealand,

Australia and Europe.

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Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Executive management

Greg Balla

Chief Executive Officer

Greg Balla was appointed CEO of Wellington in May 2021. He comes with

over 18 years of strong leadership experience in large complex organisations

including technology and manufacturing across a range of sectors including

industrial, healthcare technology, mining, pharmaceuticals and electrical

products. Greg’s extensive commercial skills spans government contracts, large

supplier agreements, distribution management, pricing and contract negotiation.

He also possesses extensive change management experience in multiple

sectors as well as in depth experience in implementing management operating

systems to drive strategic deployment and organisation visibility. Greg’s most

recent role was as Chief Operating Officer for Orion Health, a global health

technology company.

Angela Lewis

Chief People Officer

Angela Lewis joined Wellington in January 2022. She leads leads our people

focused initiatives as we continue to develop a vibrant culture with modern

thinking and ways of working while supporting the retention of our existing

talent and helping to attract the best future talent. Angela was previously the

Head of HR consulting at Coca-Cola Amatil (NZ) Ltd and has significant people

leadership experience from her career, including organisations such as Amazon,

Orion Health and Walt Disney.

Howard Milliner

Chief Financial Officer

Howard Milliner was appointed as CFO in November 2012. He oversees all

financial and administrative operations and helps to shape the overall strategy

and direction for the company. He holds a BCom from the University of Auckland

and is a chartered accountant, with accounting experience gained working for

Ernst & Young London. For 14 years he held both CFO and CEO roles for NZ-

listed engineering business, Mercer Group (now MHM Automation). Howard has

extensive experience in managing financial operations and business acquisitions

and divestments.

Marc Tinsel

Vice President, Supply Chain, Operations and GM Engineering

Marc is responsible for Wellington’s day-to-day leadership, supply chain and

operations, as well as delivery of all hardware, software and development

programs. He joined Wellington in 2013 as Programme Manager for sustaining

engineering, was promoted to Head of Manufacturing in 2015 then Vice

President, Supply Chain and Operations in January 2019 and in November 2020

his job responsibilities were also extended to engineering. Prior to Wellington, he

worked as a Project Manager for Electrix, managing multiple projects, budgets

and multidisciplinary teams. Marc was also employed by electrical safety

compliance testing laboratories based in Auckland and London for 13 years.

David Howell

Chief Technology Officer

David is currently Chief Technology Officer and has a strategic technology

leadership role that includes conception of the technology plan, taking a lead role

in technology and partnership acquisition, as well as exploring and implementing

new technology models. David joined Wellington as Engineering Manager in

1999. He has previously worked in new product development roles for Rover

Group (UK), Fisher and Paykel Healthcare Corporation Ltd and Tru-Test Ltd. He

is listed as inventor on 14 families of international patent applications, including

several of Wellington’s core motor patents.

David Burden

Chief Customer Officer

David Burden joined Wellington in 2018 as part of the iProximity acquisition,

initially in the role of Vice President Group Marketing and IoT products and in

December 2021 he was promoted to Chief Customer Officer. He is an Australian

entrepreneur with 30 years of experience in leading start-ups and successful

technology businesses. He founded and led what became Australia’s largest and

best-recognised interactive and mobile services company, Legion Interactive.

In 2008, he joined the ASX-listed digital media company Webfirm Group (now

Adslot) as group CEO. Within three years he took it from a valuation of AUD$2m

to a peak of AUD$120m. In December 2013, David and Rohan Lean established

an exciting new IoT company, iProximity, with a focus on proximity marketing and

digital information services. iProximity was acquired by Wellington in July 2018.

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Annual Report 2021Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Executive management

Beatriz Mibach

Vice President, Global Product Management

Beatriz Mibach joined Wellington in February 2020 as Global Head of Products,

where she leads the product management process from concept through

to customer delivery. Beatriz has 15 years’ experience across research,

engineering, product management and innovation for leading global companies.

She has previously held vice president roles for engineering and sales at Lancer

Corporation and worked as the equipment development manager at Coca-Cola

in Europe.

Laura Bocock

Transformation Lead

Laura Bocock joined Wellington in November 2021 as Transformation Lead,

where she leads a portfolio of activities that re-invent the way we do things at

Wellington. These support our customer centric focus, expanding lean/agile tools

and using data led insights to develop a continuous improvement and innovation

mindset. Laura enjoys a challenge and strives for great outcomes for people

and organisations. She has over 12 years’ experience across a breadth of skills

including lean six sigma and agile, software development delivery, emergency

management, change leadership, program management, analysis, training, and

collaborative engagement.

Prior to starting at Wellington, Laura was Planning and Intelligence Manager,

COVID Response Unit at Auckland Regional Public Health Service.

Peter Barnes

Global Quality Manager

Peter Barnes is currently Global Quality Manager, responsible for product

quality, quality improvement and all Company processes and procedures. Peter

joined Wellington in 2003 as a senior electronic design engineer. He held many

positions within the engineering team before changing his career direction and

moving into quality management. Prior to starting at Wellington, Peter worked at

a start-up company as a design engineer, developing various water temperature

control valves for domestic and industrial applications.

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Annual Report 2021Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Financial Statements

Consolidated Statement of Comprehensive Income

20212020

Note$000s$000s

Revenue2.264,21836,880

Cost of sales(46,345)(26,332)

Gross profit17,87310,548

Other income2.31281,156

Operating expenses2.4(15,052)(11,530)

(Loss) / gain on remeasurement of contingent

consideration

6.1b(323)1,016

Earnings before interest, taxation, depreciation,

amortisation & impairment

2,6261,190

Depreciation3.2(578)(641)

Amortisation3.3(2,015)(1,686)

Impairment3.3(393)(456)

(Loss) before interest & taxation(360)(1,593)

Finance income4.2117

Finance expenses4.2(207)(389)

(Loss) before income tax(556)(1,975)

Income tax credit / (expense) 2.5a5,981(179)

Profit / (loss) for the year5,425(2,154)

Other comprehensive income:

Items that may be reclassified subsequently to the

profit or loss:

Exchange differences on translation of foreign

operations

4.5b117(1,565)

Other comprehensive income / (loss) for the year117(1,565)

Total comprehensive income / (loss) for the year5,542($3,719)

Profit / (loss) for the year attributable to the Owners

of the Company

5,425(2,154)

Total comprehensive income / (loss) attributable

to the Owners of the Company

5,542(3,719)

Basic earnings per share – cents2.61.26(0.58)

Diluted earnings per share – cents2.61.23(0.58)


The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

Consolidated Statement of Movements in Equity

for the year ended 31 December 2021



2021


Note

Contributed

equity

$000s

Accumulated

losses

$000s

Other

reserves

$000s

Total

equity

$000s

Balance at 1 January 2021135,555(116,892)(3,948)14,715

Comprehensive income

Profit for year-5,425-5,425

Other comprehensive income

Exchange differences on translation of

foreign operations

4.5b--117117

Total comprehensive income-5,4251175,542

Share option compensation expensed4.5a--3131

Balance at 31 December 2021$135,555($111,467)($3,800)$20,288



2020


Note

Contributed

equity

$000s

Accumulated

losses

$000s

Other

reserves

$000s

Total

equity

$000s

Balance at 1 January 2020130,228(114,738)(2,383)13,107

Comprehensive income

Loss for year-(2,154)-(2,154)

Other comprehensive income

Exchange differences on translation of

foreign operations

4.5b--(1,565)(1,565)

Total comprehensive income-2,154(1,565)(3,719)

Contributions of equity, net of costs4.35,327--5,327

Balance at 31 December 2020$135,555($116,892)($3,948)$14,715


The above Consolidated Statement of Movements in Equity should be read in conjunction with the accompanying notes.

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Consolidated Statement of Financial Position

as at 31 December 2021



Note

2021

$000s

2020

$000s

Current Assets

Cash and cash equivalents3.1a5,9534,610

Trade and other receivables3.1b17,8478,624

Inventories3.1c4,6003,417

Total current assets28,40016,651

Non-Current Assets

Property, plant and equipment3.21,7242,083

Deferred tax asset2.5b6,051-

Intangible assets3.312,61912,397

Total non-current assets20,39414,480

Total assets48,79431,131

Current Liabilities

Trade and other payables3.1d19,1679,872

Contract liability2.21,4311,044

Provisions3.1e205315

Derivative financial instruments6.421-

Borrowings4.1731863

Total current liabilities21,55512,094

Non-Current Liabilities

Borrowings4.11,2661,170

Contract liability2.25,3623,152

Contingent consideration6.1b323-

Total non-current liabilities6,9514,322

Total liabilities28,50616,416

Net assets$20,288$14,715

Consolidated Statement of Financial Position - continued

as at 31 December 2021


Note

2021

$000s

2020

$000s

Equity

Contributed equity4.3135,555135,555

Accumulated losses4.4(111,467)(116,892)

Other reserves4.5(3,800)(3,948)

Total equity$20,288$14,715

For and on behalf of the Board

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

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Director

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5251
Wellington Drive Technologies Ltd

Consolidated Cash Flow Statement

for the year ended 31 December 2021


Note

2021

$000s

2020

$000s

Cash flows from operating activities

Receipts from customers exclusive of GST/VAT57,99341,531

Payments to suppliers and employees exclusive

of GST/VAT

(54,861)(42,606)

Other income2.31281,156

Interest paid(204)(404)

Interest received4.2117

Taxation (paid) / received(31)13

Net GST/VAT received911643

Net cash inflow from operating activities6.7a3,947340

Cash flows from investing activities

Payments for property, plant and equipment3.2(134)(210)

Payments for intangible assets3.3(2,089)(3,153)

Net cash outflow from investing activities(2,223)(3,363)

Cash flows from financing activities

Cash proceeds from ordinary shares4.3-5,327

New loans and drawdowns4.12,0717,240

Loan repayments4.1(1,902)(8,019)

Finance lease borrowing-27

Principal payments for right-of-use assets6.5(217)(193)

Net cash (outflow) / inflow from financing activities(48)4,382

Net increase in cash and cash equivalents1,6761,359

Cash and cash equivalents at the beginning of the

financial period

4,6103,459

Effect of exchange rate movements on cash(333)(208)

Cash and cash equivalents at end of year3.1a$5,953$4,610


The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.

Wellington Drive Technologies Ltd

Notes to the Financial Statements

1. Basis of preparation

This section sets out the Group’s significant accounting policies that relate to the financial statements as a whole.

Where an accounting policy is specific to a note, that policy is stated in the note to which it relates.

1.1 General Information

Wellington Drive Technologies Limited (the “Company”) and its subsidiaries (together the “Group”) develop

Internet of Things (IoT) solutions and manufacture, market and sell energy saving, electronically commutated (EC)

motors, connected controllers and fans for worldwide use.

The Company is a limited liability company incorporated and domiciled in New Zealand. The address of its

registered office is 21 Arrenway Drive, Rosedale, Auckland 0632 New Zealand. The Company is registered under

the Companies Act 1993 and is an FMC reporting entity under Part 7 of the Financial Markets Conduct Act 2013.

The financial statements have been prepared in accordance with the requirements of Part 7 of the Financial

Markets Conduct Act 2013 and the NZX Main Board Listing Rules.

These consolidated financial statements have been approved for issue by the Board of Directors on [Date].

1.2 Summary of Significant Accounting Policies

(a). Basis of preparation

These consolidated financial statements of the Group have been prepared in accordance with generally accepted

accounting practice in New Zealand. The Group is a for-profit entity for the purposes of financial reporting. The

consolidated financial statements comply with New Zealand Equivalents to International Financial Reporting

Standards (NZ IFRS), other New Zealand accounting standards and authoritative notices that are applicable

to entities that apply NZ IFRS. The consolidated financial statements also comply with International Financial

Reporting Standards (IFRS).

The principal accounting policies adopted in the preparation of the financial statements are set out below. These

policies have been consistently applied to all the years presented, unless otherwise stated.

Entities reporting

The financial statements are for the consolidated Group which is the economic entity comprising of Wellington

Drive Technologies Limited and its subsidiaries.

Historical cost convention

These financial statements have been prepared under the historical cost convention except for derivative financial

instruments and contingent consideration which is measured at fair value.

New standards, amendments and interpretations effective in the current year

The following accounting standards, amendments and interpretations have not had a material impact on the

financial statements.

• Software as a Service Arrangements

• Interest Rate Benchmark Reform

New standards, amendments and interpretations not yet adopted

The following accounting standards, amendments and interpretations are mandatory for future periods and are

Annual Report 2021Annual Report 2021

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Wellington Drive Technologies Ltd

unlikely to have a material impact on the financial statements prepared by the Company.

• Onerous Contracts – Cost of Fulfilling a Contract – effective from 1 January 2022

• Property, Plant and Equipment – effective from 1 January 2022

• Classification of Liabilities as Current and Non-Current – effective from 1 January 2023


Going concern assumption

The Group reported a profit for the 2021 year of $5,425,000 (2020: loss of $2,154,000) although this result for

2021 includes a $6,051,000 non-cash credit for the recognition of a deferred tax asset. Operating cash inflows for

the 2021 year was $3,947,000 (2020: $340,000). Cash at 31 December 2021 was $5,953,000 (2020: $4,610,000)

and net cash (defined as cash balances net of borrowings) was $3,956,000 (2020: $2,577,000).

The primary impact of COVID-19 in the 2021 year was on the supply chain in contrast to the 2020 year which saw

customer demand reductions. The Group remains subject to a higher than usual level of risk in the current global

environment including unexpected cost increases, factory closures or capacity reductions due to the COVID-19

virus, suppliers unable to supply some critical components and other unanticipated disruptions to supply. The

Group has managed through these disruptions in 2021 by;

• Increasing pricing to maintain gross margins.

• Actively sourcing alternate components.

• Redesigning products to utilise alternate components where required.

• Extending customer order lead times.

• Engaging with customers to delay deliveries and / or otherwise vary customer orders.

The Board expects these actions to continue to be required in 2022. Forecasts have been prepared which make

allowance for expected cost increases, product redesign and associated costs. These forecasts are most sensitive

to revenue declines due to customer demand and margin pressure and delays in delivering products to customers

due to the impact of macroeconomic supply chain factors, but the Board considers that there are actions that

would be taken to ensure that the Group would maintain adequate cash reserves.

The directors have, at the time of approving the financial statements, a reasonable expectation that the Group

have adequate resources to continue in operational existence for the foreseeable future from the date of

approving the financial statements and they have assessed it is appropriate to continue to adopt the going

concern basis in preparing the financial statements.

(b). Principles of consolidation

Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is

exposed to, or has rights to, variable returns from its involvement with the entity and can affect these returns

through its power over the entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are

deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The

cost of an acquisition is measured as the fair value of the assets transferred and equity instruments issued, and

liabilities incurred or assumed at the date of exchange. Identifiable assets acquired, and liabilities and contingent

liabilities assumed in a business combination are measured initially at their fair values at the acquisition date,

irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the

Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than

the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the Statement of

Comprehensive Income.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are

eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies of

the Group.

Wellington Drive Technologies Ltd

(c). Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency

of the primary economic environment in which the entity operates (‘the functional currency’). The Company’s

functional currency is US Dollars because its purchase and sale of product is mainly denominated in US Dollars.

Subsidiaries and operations in the USA, China, Brazil, Turkey, Mexico, Italy, Australia, Spain and Singapore use

their local currency as the functional currency.

The consolidated financial statements are presented in New Zealand dollars, rounded to the nearest thousand,

which is the Group’s presentation currency. The presentation currency remains New Zealand dollars due to the

Company’s shareholder base being concentrated in New Zealand.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing

at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such

transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in

foreign currencies are recognised in the Statement of Comprehensive Income.

(iii) Foreign operations

The results and balance sheets of all foreign operations that have a functional currency different from New

Zealand dollars are translated into the presentation currency as follows:

• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the

Statement of Financial Position.

• income and expenses for each Statement of Comprehensive Income are translated at average exchange

rates, unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the

transaction dates, in which case income and expenses are translated at the dates of the transactions; and

• all resulting exchange differences are recognised in other comprehensive income as a separate component

of equity.

(d). Critical accounting estimates and judgements


Estimates and judgments are continually evaluated and are based on historical experience and other factors,

including expectations of future events that are believed to be reasonable under the circumstances.

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will,

by definition, seldom equal the related actual 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 are

detailed in the following notes to the financial statements:

Areas of estimation

• Going concern – forecasts – note 1.2a

Areas of judgement

• Deferred tax asset – recognition – note 2.5c

• Development costs - capitalisation of expenses and impairment testing - note 3.3

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Wellington Drive Technologies Ltd

2. Results for the year

This section focuses on the results and performance for the Group and how those numbers are calculated.

2.1 Segment information

An operating segment is a component of an entity that engages in business activities from which it earns revenues

and incurs expenses, whose operating results are regularly reviewed by the chief operating decision maker and

for which discrete financial information is available.

The chief operating decision maker, who is responsible for allocating resources and assessing performance of the

operating segments, has been identified as the Chief Executive Officer supported by the management team who

report directly to the CEO.

(a). Reportable segments

The Group is organised on a global basis into two operating divisions – Motors and IoT. These divisions offer

different products and services and are managed separately because they require different technology and

marketing strategies. The Group’s chief executive officer reviews the financial performance of each division at

least monthly. Each division is a reportable segment.

There are varying levels of integration between the segments. There are engineering and sales staff that support

both segments as well as shared logistical and quality management services.

Information related to each reportable segment is set out below:

2021

Motors

$000s

IoT

$000s

Unallocated

$000s

Total

$000s

Revenue38,98525,233-64,218

Cost of goods sold(31,875)(14,470)-(46,345)

Gross profit7,11010,763-17,873

Gross margin %18.2%42.7%27.8%

Other income43688128

Operating expenses(2,539)(4,508)(8,005)(15,052)

Gain on remeasurement

of contingent consideration

-(323)-(323)

EBITDA4,5755,968(7,917)2,626

Depreciation(301)(192)(85)(578)

Amortisation(307)(1,669)(39)(2,015)

Impairment(393)--(393)

Loss before interest & taxation3,5744,107(8,041)(360)

Finance income--1111

Finance expense--(207)(207)

(Loss) / profit before income tax3,5744,107(8,237)(556)

Income tax credit / (expense)--5,9815,981

Profit / (loss) for the year$3,574$4,107($2,256)$5,425


2021

Motors

$000s

IoT

$000s

Unallocated

$000s

Total

$000s

Non-current assets

Property, plant & equipment5061111,1071,724

Deferred tax asset--6,0516,051

Goodwill-3,127-3,127

Other intangible assets3,5415,4944579,492

Total$4,047$8,732$7,615$20,394

2020

Motors

$000s

IoT

$000s

Unallocated

$000s

Total

$000s

Revenue24,41812,462-36,880

Cost of goods sold(19,275)(7,057)-(26,332)

Gross profit5,1435,405-10,548

Gross margin %21.1%43.4%28.6%

Other income2885563121,156

Operating expenses(2,449)(3,085)(5,996)(11,530)

Gain on remeasurement

of contingent consideration

-1,016-1,016

EBITDA2,9823,892(5,684)1,190

Depreciation(322)(235)(84)(641)

Amortisation(364)(1,312)(10)(1,686)

Impairment(44)(412)-(456)

Loss before interest & taxation2,2521,933(5,778)(1,593)

Finance income--77

Finance expense--(389)(389)

(Loss) / profit before income tax2,2521,933(6,160)(1,975)

Income tax expense--(179)(179)

(Loss) / profit for the year$2,252$1,933($6,339)($2,154)

Non-current assets

Property, plant & equipment6361501,2972,083

Goodwill-3,139-3,139

Other intangible assets3,8185,1522889,258

Total$4,454$8,441$1,585$14,480

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

(b). Geographical segments

The Group operates in three main geographical areas, although it is managed on a global basis.

Revenue from external customers by geographic areas

2021

$000s



2020

$000s

Americas51,06828,735

Asia / Pacific (APAC)4,9503,518

Europe / Middle East / Africa (EMEA)8,2004,627

Total$64,218$36,880

Revenue is allocated above based on the country in which the customer is located.

APAC revenue includes $1,493,000 (2020: $184,000) from New Zealand customers.

Major Customers

The Group has four major customers (defined as customers representing 10% or more of revenues) accounting

for invoiced revenues of $30,293,000 (2020: three customers accounting for invoiced revenues of $13,692,000),

all within the Americas geographic segment.

Total non-current assets

2021

$000s



2020

$000s

Americas2,07426

Asia / Pacific – mainly in New Zealand18,27314,379

Europe / Middle East / Africa4775

Total$20,394$14,480

Total non-current assets are allocated based on where the assets are located.

2.2 Revenue

2021

$000s



2020

$000s

Sales of goods revenue – recognised at a point in time62,77135,678

Services revenue – recognised over time1,4471,202

$64,218$36,880

Revenue is measured at the fair value of the consideration received or receivable for the sale of goods and

services, excluding GST / VAT, rebates and discounts and after eliminating sales within the Group. The Group

disaggregates revenue from contracts with customers by geographical regions, which is detailed in note 2.1(b).

(a). Sale of Goods

The Group manufactures and sells a range of energy efficient motors and IoT hardware to the food and beverage

market. Sales are recognised when control has transferred to the buyer which is usually when delivery of the

goods to the buyer pursuant to the Incoterms that apply is fulfilled, and there is no unfulfilled obligation that could

affect the customer’s acceptance of the products. Delivery occurs when the products have been delivered in

accordance with the pre-agreed Incoterms between the Group and the buyer, the risks of obsolescence and loss

have been transferred to the buyer, and either the buyer has accepted the products in accordance with the sales

arrangement, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for

acceptance and performance obligations under the contract with the customer have been satisfied.

Some of the sales of goods are subject to CIF (Cost, Insurance and Freight) Incoterms. The Group considers

these freight and insurance services to be a distinct service. For these sales, the total sales price is allocated to

the separate performance obligations, being the product and the insurance and freight costs. Further, the Group

considers itself an agent only in the provision of the freight services. Revenue for the CIF element is recognised

only to the extent of the margin for providing the agent services. However, there are limited sales under CIF terms

and the impact on revenue is estimated to be minor.

The Group has in-market distributors in China and Brazil to supply goods to buyers in those markets who require

local delivery. These distributors transact as agents. The Group is the principal in these transactions. Sales of

product are recognised when these distributors deliver the product to buyers at which point control passes to

the buyer.

Products may be sold with retrospective volume rebates based on aggregate sales over a 12-month period.

Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume

rebates. Accumulated experience and customer knowledge are used to determine the rebate amounts using

the expected value method and revenue is only recognised to the extended that it is highly probable significant

reversals will not occur. The liability to pay volume rebates is recognised (included in trade and other payables) in

respect of sales made until the end of the reporting period.

No element of financing is deemed present as the sales are made with a credit term of 30 - 120 days which is

consistent with market practice. A receivable is recognised when the goods are delivered as this is the point of

time that the consideration is unconditional because only the passage of time is required before the payment

is due.

(b). Sale of services

Associated with the supply of IoT hardware, the Group supplies a range of data, and reporting services, all

installed on every Connect SCS, Connect Monitor and Connect Click sold and are distinct services from the sale

of goods. Revenue from the provision of such services is recognised when services are rendered to the buyer.

Contracts typically cover a period from hardware supply of anywhere from 1 to 10 years, dependent on customer

requirements. Contracts specify the price for the provision of the services. Revenue from such contracts is

recognised on a straight-line basis over the contract term because the customer receives and uses the benefits

simultaneously. As set out in note 2.2(a), no explicit element of financing is deemed present as the purpose of the

advance payment of revenue is for reasons other than financing.

The Group also provides software development services for customers. Revenue from these services is

recognised when the contracted development is completed according to the agreed scope of work.

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Contract liabilities

2021

$000s



2020

$000s

Carrying amount at start of year4,1964,418

Invoiced in the year3,8601,310

Recognised in revenue(1,447)(1,202)

Exchange adjustment184(330)

Carrying amount at end of year$6,793$4,196

Current portion1,4311,044

Non-current portion5,3623,152

$6,793$4,196

2.3 Other income

2021

$000s



2020

$000s

Net foreign exchange gains7418

Covid-19 Government support151,090

Other income3948

$128$1,156


2.4 Operating expenses include

2021

$000s



2020

$000s

Wages and salaries and other short-term benefits11,3009,807

Employer contributions to Kiwisaver and 401K plans385324

Employee share options expense31-

Total employee benefits$11,716$10,131

Payments to contractors1,5911,331

Capitalisation of labour and expenses to intangible assets($2,057)($3,099)

The amount disclosed above for wages and salaries is stated before capitalisation of labour to intangible assets.

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave

expected to be settled within 12 months of the reporting date 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. Liabilities for non-accumulating sick leave are recognised when the leave is taken and

measured at the rates paid or payable.

Wages and salaries in 2021 included $1,109,000 for the reimbursement in the year of 2020 staff salary reductions

which were an important component of the Group’s COVID response.

The Group recognises a liability and an expense for bonuses and creates a provision where contractually obliged

or where there is a past practice that has created a constructive obligation.

2.5 Income tax expense

Current and deferred income tax

The income tax expense or revenue for the year is the tax payable on the current period’s taxable income (based

on the national income tax rate for each jurisdiction) adjusted by changes in deferred tax assets and liabilities

attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in

the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary 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

substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of

deductible and taxable temporary differences 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 than 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 utilise 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 entity is able to control the timing of the reversal of

the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Goods and Services Tax (GST) and Value Added Tax (VAT)

The Statement of Comprehensive Income has been prepared so that all components are stated exclusive of GST

and VAT. All items in the Statement of Financial Position are stated net of GST and VAT, except for receivables

and payables, which include GST and VAT invoiced.

(a). Income tax

2021

$000s



2020

$000s

Current year income tax expense(70)(179)

Deferred tax – initial recognition of deferred tax asset6,051-

Income tax credit / (expense)$5,981($179)

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

2021

$000s



2020

$000s

Tax losses to carry forward27,97827,211

Total temporary differences and tax losses to carry forward30,82729,550

Deferred tax asset recognised for:

Temporary differences2,849-

Carry forward tax losses utilised3,202-

Total recognised6,051-

Unrecognised tax losses$24,776$29,550


Of the total consolidated losses available to carry forward to future years, $2,798,000 (2020: $3,904,000) arises

in the USA and is subject to their continuity requirements. USA Federal tax losses expire after 15 to 20 years,

depending on when those losses were incurred. During the 2021 year no USA Federal tax losses expired

(2020: None).

(c). Imputation credits

The Group has no imputation credits available (2020: $nil) and no movements occurred in the Imputation Credit

Account (2020: $nil).

2.6 Earnings per share

Earnings per share (‘EPS’) is the amount of post-tax profit attributable to each share.

Basic EPS of a profit of 1.26 cents (2020: loss of 0.58 cents) is calculated by dividing the profit attributable to

equity holders of the Company of $5,425,000 (2020: loss of $2,154,000) by the weighted average number of

ordinary shares in issue during the year of 431,914,620 (2020: 372,315,814).

Diluted EPS of a profit of 1.23 cents (2020: loss of 0.58 cents) is calculated by dividing the profit attributable to

equity holders of the Company of $5,425,000 (2020: loss of $2,154,000) by the weighted average number of

shares in issue during the year, after adjusting for effects of all potentially dilutive ordinary shares.

The charge for the year can be reconciled to the result before tax as follows:

2021

$000s



2020

$000s

Reported (loss) / profit for period before tax(556)(1,975)

Tax at 28%(156)(553)

Effect of different tax rates of subsidiaries in

other jurisdictions

(5)-

Tax effect of non-deductible / non-assessable items(31)(467)

Tax effect of utilisation of losses not previously recognised122841

Initial recognition of deferred tax asset6,051-

Income tax credit / (expense) for the year$5,981($179)


(b). Deferred tax

The Group has not previously recognised income tax losses and temporary differences as a future income tax

benefit. As it is now probable that future taxable amounts will be available to utilise those temporary differences

and losses, a deferred tax asset is now recognised for deductible temporary differences and for that portion of the

unused tax losses that are expected to be utilised in the five years 2022 through to 2026. No deferred tax asset

has been recognised in respect of the remaining tax losses to carry forward due to uncertainty as to forecast

taxable income after the five years.

Losses available to be carried forward are subject to the shareholder continuity requirements of the New Zealand

Income Tax Act 1994 and the countries in which the losses have arisen.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset, and they

relate to the same tax authority. The tax rate applicable to each group company has been used to determine the

below recognised and unrecognised deferred tax assets:

2021

$000s



2020

$000s

Doubtful debts2645

Inventory provisions and eliminations 58207

Employee benefits357338

Internally generated development2,3941,992

Warranty provision5888

Rebates164152

Fixed assets81(153)

Right of use lease liability

(277

)

(327)

Other timing differences(12)(3)

Total temporary differences2,8492,339

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

3. Operating assets and liabilities

This section focuses on the assets used to generate the Group’s trading performance and the liabilities incurred as

a result.

3.1 Working capital

Working capital represents the assets and liabilities the Group generates through its trading activities. The Group

therefore defines working capital as cash, trade and other receivables, inventory, trade and other payables and

provisions.

(a). Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and other short

term and highly liquid investments with original maturities of three months or less that are readily convertible to

known amounts of cash and which are subject to an insignificant risk of changes in value.

2021

$000s



2020

$000s

Cash on hand and at bank2,4512,251

Call deposits3,4272,283

Short term bank deposit7576

$5,953$4,610

The carrying amount of the Group’s cash and cash equivalents is denominated in the following currencies:

NZD485636

USD4,5793,738

Other889236

$5,953$4,610

(b). Trade and other receivables

Trade receivables are recognised initially at the value of the invoice sent to the customer. The Group generally

holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them

subsequently at amortised cost using the effective interest method. Trade receivables are generally due for

settlement no more than 120 days from the date of recognition.

The Group applies the simplified approach permitted by NZ IFRS 9 which requires lifetime expected credit losses

to be recognised from initial recognition of the trade receivable. Trade receivables are written off when there is no

reasonable expectation of recovery.

The Group takes out trade credit insurance to hedge against some of the credit risk. NZ IFRS 9 requires the

Group to calculate expected credit losses on trade receivables using a provision matrix. The Group has reviewed

its credit loss experience over the period from 2013 to 2021 and has determined that the probability weighted

credit loss experience over that period was approximately 0.1% of revenue. Consideration has been given to

market environmental factors to determine whether future conditions will impact. The provision for expected credit

loss at balance date has been calculated at 1.5% for customers assessed as higher risk and 0.1% for all others

(2020: 1.5% and 0.1% respectively).

2021

$000s



2020

$000s

Trade receivables16,4987,695

Provision for loss allowance(90)(157)

Net trade receivables16,4087,538

Prepayments837462

VAT/GST refunds due133113

Income tax refund due214253

Other receivables255258

$17,847$8,624

The carrying amount of the Group’s trade and other receivables is denominated in the following currencies:

NZD13385

USD16,4437,163

EUR540702

MXP1304

Other730370

$17,847$8,624

Provision for loss allowance

Carrying amount at start of year157150

(Decrease) / increase in loss allowance(78)7

Exchange adjustment11-

Carrying amount at end of year$90$157

The decrease in provision is recognised within ‘Operating expenses’ in the Statement of Comprehensive Income.

(c). Inventories

Inventories are stated at the lower of cost and net realisable value. Costs are assigned to individual items of

inventory based on first in first out. Net realisable value is the estimated selling price in the ordinary course of

business less the estimated costs necessary to make the sale.

Management reviews inventory on a line-by-line basis. Judgments are made about expected selling prices and

obsolescence based on forecast sales. A provision is recognised for inventory which is expected to sell for less

than cost.

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

2021

$000s



2020

$000s

Finished goods – at cost4,7272,833

Work in progress – at cost-383

Raw materials – at cost320655

Less inventory provisions(447)(454)

Total inventories$4,600$3,417

Cost of inventories recognised as an expense and included in cost of sales $44,099,000 (2020: $25,051,000).

(d). Trade and other payables

Trade payables are recognised at the value of the invoice received from a supplier. These amounts represent

liabilities for goods and services provided to the Group prior to balance date. The amounts are unsecured and are

usually paid within 90 days of recognition.

2021

$000s



2020

$000s

Trade payables14,5087,375

Employee entitlements 1,7911,620

GST / VAT payable353-

Accrued expenses2,515877

$19,167$9,872

The carrying amount of the Group’s trade and other payables is denominated in the following currencies:

NZD2,2252,143

USD16,1067,355

Other836374

$19,167$9,872

(e). Provisions

Provisions are recognised when the Group has a present legal or constructive obligation because of past events,

is more likely than not that an outflow of resources will be required to settle the obligation, and the amount has

been reliably estimated. Provisions are not recognised for future operating losses.

The Group sells goods with warranty periods of up to five years. The terms of the warranty provide that the Group

will repair or replace items that fail to perform satisfactorily. A provision has been recognised based on historical

data and average levels of repairs and warranty claims experienced by the Group. It is expected that the provision

will be utilised within one year as any product failures are typically exhibited within one year of sale.

Warranty provision

2021

$000s



2020

$000s

Carrying amount at start of year315468

Additional provisions recognised5612

Amounts used(178)(148)

Exchange adjustment12(17)

Carrying amount at end of year$205$315


3.2 Property, plant and equipmen

t

All property, plant and equipment are stated at historical cost less depreciation and impairments. Historical cost

includes expenditure that is directly attributable to the acquisition of the items and the costs of bringing the asset

to the location and condition for it to be capable of operating in the manner intended.

Costs are included in the asset’s 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 Group and the cost of the item

can be measured reliably. All other repairs and maintenance are charged to the Statement of Comprehensive

Income during the financial year in which they are incurred.

Depreciation of owned plant and equipment is calculated using the straight-line method to allocate their cost net of

their residual values, over their estimated useful lives, as follows:

Useful Life

Plant and equipment3 – 15 years

Property12 years

Office equipment, furniture and fittings 3 – 15 years

The assets’ residual values and useful lives are reviewed and adjusted as appropriate at each balance date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is

greater than its estimated recoverable amount.

Plant and equipment can be analysed as follows:

Plant &

equipment

$000s



Office equipment,

furniture & fittings

$000s

Properties

$000s

Total

$000s

Year ended 31 December 2020

Opening net book amount1,3351821,1412,658

Reclassification(176)11066-

Additions14268-210

Depreciation(316)(125)(200)(641)

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

3.3 Intangible assets

Research, development and patent costs

Expenditure on research activities, undertaken with the prospect of obtaining new scientific or technical knowledge

and understanding, is recognised in the Statement of Comprehensive Income as an expense when it is incurred.

Expenditure on development activities, being the application of research findings or other knowledge to a plan or

design to produce new or substantially improved products or services before the start of commercial production

or use, is capitalised if the product or service is technically and commercially feasible and adequate resources

are available to complete development. This involves the use of judgement. Development costs are capitalised

once it can be demonstrated that the asset is supported by future economic benefits. Management considers

the following criteria when making its judgment as to when it is appropriate to commence capitalisation of

development costs:

• Technical feasibility of completing the development so that it will be available for use or sale.

• Intention to complete the development.

• Ability to use the developed asset or sell it.

• Existence of a market.

• Availability of adequate technical, financial and other resources to complete and commercialise the

development; and

• Ability to measure reliably the expenditure attributable to the development.

All capitalised development costs met the criteria as outlined above.

The expenditure capitalised comprises all directly attributable costs, including costs of materials, services, direct

labour and an appropriate proportion of overheads.


Development expenditure which does not meet the criteria for capitalisation is recognised in the Statement of

Comprehensive Income as an expense as incurred. Capitalised development expenditure is stated at cost less

accumulated amortisation and any impairment losses.

Amortisation of capitalised development costs is calculated using the straight-line method to allocate the cost over

the period of the expected benefit, up to a maximum of 10 years for motors and up to a maximum of 5 years for

IoT hardware. Judgment is involved in determining this period of benefit. For motors, the Group considered the

earlier versions of motors and the length of time from completion to continued sales contribution; whereas for IoT

hardware, the Group considered that 5 years is an appropriate life given the inherent risk of rapid technological

change.

Computer software

Acquired computer software licences are capitalised based on the costs incurred to acquire and bring to use the

specific software. These costs are amortised over their estimated useful lives (3 to 5 years).

Costs associated with maintaining computer software programmes are recognised as an expense as incurred.

Impairment testing of non-financial assets

Intangible assets that have an indefinite useful life or intangible assets not ready for use are not subject to

amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed

for impairment whenever events or changes in circumstances indicate that the carrying amount may not be

recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its

recoverable amount. The recoverable amount is the higher of an asset’s 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 identifiable cash flows (cash generating units).

Goodwill is tested annually for impairment, or immediately if events or changes in circumstances indicate that it

might be impaired and carried at cost less accumulated impairment losses. Impairment losses on goodwill are

not reversed.

Plant &

equipment

$000s



Office equipment,

furniture & fittings

$000s

Properties

$000s

Total

$000s

Disposals----

Exchange adjustment(71)(11)(62)(144)

Closing net book amount$914$224$945$2,083

At 31 December 2020

Cost6,1801,0232,1789,381

Accumulated depreciation and

impairment

(5,186)(729)(1,212)(7,127)

Exchange adjustment(80)(70)(21)(171)

Net book amount$914$224$945$2,083

Year ended 31 December 2021

Opening net book amount9142249452,083

Reclassification(9)9--

Additions5975-134

Depreciation(276)(135)(167)(578)

Disposals----

Exchange adjustment31233185

Closing net book amount$719$196$809$1,724

At 31 December 2021

Cost6,2111,0922,1789,481

Accumulated depreciation and

impairment

(5,443)(849)(1,379)(7,671)

Exchange adjustment(49)(47)10(86)

Net book amount$719$196$809$1,724

The above amounts include those relating to right-of-use assets. Refer to note 6.5 for further disclosures.

Capital commitments

Capital commitments contracted for at 31 December 2021 amounted to $244,000 (2020: $95,000).

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Internally generated development costs include $3,383,000 (2020: $5,493,000) for projects underway and not

complete at balance date. This cost is not yet being amortised. An impairment assessment has been performed at

31 December 2021 considering costs to complete the developments, costs to set up the manufacturing capability,

estimates of market volume and price and estimated manufacturing unit costs.

Amortisation and impairment

2021

$000s



2020

$000s

Amortisation of intangible assets2,0151,686

Impairment of intangible assets393456

$2,408$2,142

Impairment losses have been recognised as follows:

Patent costs – $ (2020: $44,000) - The carrying value of patents which were not renewed.

Internally generated development costs - $393,000 (2020: $412,000) - the carrying value of costs for the

development of an EC-C frame has been impaired as it is not now certain that the development will be completed.

Goodwill and intangible assets with indefinite lives

Goodwill acquired through business combinations with indefinite lives has been allocated to the IoT Cash

Generating Unit (CGU) which is also an operating and reportable segment for impairment testing. The Group

performed its impairment test as at 31 December 2021.

The recoverable amount of the IoT CGU on 31 December 2021 has been determined based on a value in use

calculation using cash flow projections from the annual operating plan approved by senior management for 2022,

together with a forecast for 2023. The pre-tax discount rate applied to cash flow projections is 14% (2020: 14%)

and cash flows beyond 2023 using a 5.0% growth rate (2020: 5%).

The calculation of value in use is most sensitive to the following assumptions:

• Gross margins.

• Completion and launch of new IoT products under development and retaining volumes to current customers.

• Growth rates used to extrapolate cash flows beyond the forecast period.

• Operating expense increases.

Gross margins are based on current pricing and product costs. The gross margin in 2021 was 42.7% and is

forecast in the range of 43% to 46% for the two years 2022 and 2023. The forecasts include revenues on products

currently under development that are expected to launch in 2022. The amount of forecast revenue in respect of

these new products in 2022 is $1,573,000 and $2,400,000 in 2023. The assumption is that operating expenses

comprising mainly employee costs are maintained at the same ratio to sales. In the 2022 operating plan, the ratio

of operating expenses to revenue is 17%.

As a result of this analysis, management did not identify an impairment for this CGU.

Internally

Generated

Development

$000s

Patents

$000s

Goodwill

$000s

Other

$000s

Total

$000s

Year ended 31 December 2020

Opening net book amount8,5283093,2238712,147

Reclassification(102)(1)(4)107-

Additions3,08846-193,153

Amortisation(1,592)(81)-(13)(1,686)

Impairment(412)(44)--(456)

Exchange adjustment(656)(12)(80)(13)(761)

Closing net book amount$8,854$217$3,139$187$12,397

At 31 December 2020

Cost20,6041,5713,21986126,255

Accumulated amortisation &

impairment

(11,531)(1,370)-(645)(13,546)

Exchange adjustment(219)16(80)(29)(312)

Net book amount$8,854$217$3,139$187$12,397

Year ended 31 December 2021

Opening net book amount8,8542173,13918712,397

Additions2,04239-82,089

Amortisation(1,948)(53)-(14)(2,015)

Impairment(393)---(393)

Exchange adjustment53012(12)11541

Closing net book amount$9,085$215$3,127$192$12,619

At 31 December 2021

Cost22,6461,6103,21986928,344

Accumulated amortisation &

impairment

(13,872)(1,423)-(659)(15,954)

Exchange adjustment31128(92)(18)229

Net book amount$9,085$215$3,127$192$12,619

Goodwill relates to the iProximity Pty Limited which is a component of the IoT reportable segment.

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

4. Capital and financing costs

This section sets out the Group’s capital structure and shows how it finances its operations and growth.

To finance the Group’s activities (now and in the future) the Board monitors and determines the appropriate capital

structure for Wellington to execute strategy and to deliver its business plan.

4.1 Borrowings

Working capital represents the assets and liabilities the Group generates through its trading activities. The Group

therefore defines working capital as cash, trade and other receivables, inventory, trade and other payables and

provisions.

2021

$000s



2020

$000s

Current portion

Bank trade finance facility75572

Bank loans228-

Liabilities in respect of right-of-use assets232217

Other borrowings19674

Liability at end of year$731$863

Non-Current portion

Liabilities in respect of right-of-use assets760992

Bank loans28473

Other borrowings222105

Liability at end of year$1,266$1,170

Borrowings, other than in respect of right-of-use assets, are initially recognised at fair value, net of transaction

costs incurred, and are subsequently measured at amortised cost. Any difference between the proceeds and the

redemption amount is recognised in the Statement of Comprehensive Income over the period of the borrowings

using the effective interest method. Borrowings are classified as current liabilities unless the Group has an

unconditional right to defer settlement of the liability for at least 12 months after balance date. Borrowing costs are

expensed when incurred.

Accounting policies relating to lease liabilities are outlined in note 6.5.

Movements in bank and other loans during the year were:

2021

$000s



2020

$000s

Liability at start of year8241,683

New loans and drawdowns2,0717,267

Repayments(1,902)(8,019)

Exchange adjustment12(107)

Liability at end of year$1,005$824


Bank trade finance facility

The $2.5m facility has no term, is repayable on demand and is secured. The Company can finance invoices to

certain customers over a maximum term of 120 days. Interest is payable at a 3% margin above bank base lending

rate. The weighted average interest rate charged in 2021 was 4.28% (2020: 4.11%). The Company has complied

with all cover covenants.

Bank term loans

The Company’s US subsidiary borrowed US$198,800 under the Small Business Act. The SBA loan has monthly

repayments over a 30-year term with repayments commencing in July 2021. Interest is payable at 3.75% pa.

The Company’s Mexican subsidiary borrowed 3 million Mexican Pesos ($213,330 at 31 December 2021) from the

Banco del Bajio. The loan is repayable after six months and interest is payable at 4% pa above the Tiie Rate.

4.2 Finance

2021

$000s



2020

$000s

Finance income

Other interest income117

$11$7

Finance expenses

Interest expense – Bank loans2787

Other interest expense180302

$207$389

Annual Report 2021Annual Report 2021

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

4.3 Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or

options are shown in equity as a deduction, net of tax, from the proceeds.

2021

Shares



2020

Shares

2021

$000s

2020

$000s

Ordinary shares – fully paid431,914,620431,914,620135,553135,553

Ordinary shares – partly paid-421,98022

Total shares on issue431,914,620432,336,600$135,555$135,555

(a). Ordinary shares – fully paid

Opening balance of ordinary shares on issue431,914,620322,707,005135,553130,202

Issue of ordinary shares during the year:

• Rights issue

-

107,978,028-5,399

• Exercise of part paid shares and options

-

1,229,587-69

• Share issue costs

-

--(117)

Ordinary fully paid shares on issue at year end431,914,620431,914,620$135,553$135,553

All ordinary shares are authorised and have no par value. Ordinary shares entitle the holder to participate in

dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on

shares held.

(b). Ordinary shares – partly paid

Partly paid shares outstanding at start of year421,9805,810,742226

Exercise of part paid shares during the year-(940,940)-(1)

Surrendered or lapsed(421,980)(4,447,822)-(23)

Ordinary part paid shares on issue at year end-421,980$2$2


4.4 Accumulated losses

2021

$000s



2020

$000s

Opening balance(116,892)(114,738)

Profit for the year5,425(2,154)

Accumulated losses at end of year($111,467)($116,892)

4.5 Other reserves

2021

$000s



2020

$000s

Share option compensation reserve353322

Currency translation reserve(4,153)(4,270)

($3,800)($3,948)

(a). Share Option Compensation Reserve

2021

$000s



2020

$000s

Share based compensation recognised at start of year322322

Net compensation expensed31-

$353$322

(b). Currency Translation Reserve

2021

$000s



2020

$000s

Opening balance(4,270)(2,705)

Exchange gains / (losses) on translation

of foreign operations

117(1,565)

($4,153)($4,270)

Annual Report 2021Annual Report 2021

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

5. Risk

This section presents information about the Group’s exposure to financial and commercial risks; the Group’s

objectives, policies and processes for managing those risks.

5.1 Key financial risks

The Group’s principal financial instruments comprise receivables, payables, cash and cash equivalents,

borrowings, derivatives and contingent consideration.

The Group manages its exposure to the key financial risks – market risk (including foreign currency risk and

interest rate risk), credit risk, liquidity risk and capital risk. The Group enters into derivative transactions (principally

forward currency contracts) to manage currency risks.

(a). Financial market risk

Foreign currency risk

The Group operates internationally and is exposed to foreign currency risk arising from various currency

exposures. Presently the Group’s revenue is based on USD pricing and invoicing is almost entirely USD

denominated. The Company’s functional currency is USD. The majority of the Group’s product, manufacturing and

logistics cost is invoiced and settled in USD. This provides a strong natural hedge position between revenues and

costs. USD funds are converted to NZD to meet New Zealand operational costs as required.

The Group is primarily exposed to changes in other currencies against the USD exchange rate. The Group’s

exposure to foreign currency risk at the end of the reporting period, expressed in NZD was:

20212020

Carrying

amount

$000



Currencies

other than

USD $000

Carrying

amount

$000

Currencies

other than

USD $000

Cash5,9531,3744,610872

Trade and other receivables17,8471,4048,6241,461

Trade and other payables(19,167)(3,061)(9,872)(2,517)

Borrowings(1,997)(1,410)(2,033)(1,388)

The sensitivity of profit or loss to changes in the exchange rates arises mainly from changes in other currencies

against the USD exchange rate. The impact on post tax profit holding all other variables constant at 10%

sensitivity movement is as follows:

2021

$000s

2020

$000s

USD exchange rate increase 10% relative to other currencies122113

USD exchange rate decrease 10% relative to other currencies(122)(113)

The impact on other components of equity is not material because of minimal foreign forward exchange contracts

designated as cash flow hedges.

Interest Rate Risk

The interest rate on the bank trade finance facility is at variable rates. All other debt is fixed interest.

The Group has cash deposits in various currencies to facilitate trading in the countries in which it has a presence.

Most of the cash deposits are held in either NZD or USD.

The impact of a 1% increase / decrease in interest rates over a one-year period on the closing cash balance is

not significant.

(b). Credit risk

The Group generally trades with customers and banking counterparties who are well established. While there

are individually significant customers, the Group takes out trade credit insurance to provide better security.

Receivables balances are managed by and reported regularly to senior management according to credit

management policies and procedures. The amount outstanding at balance date represents the maximum

exposure to credit risk.

At balance date, the Group had three major debtors (defined as debtors representing 10% or more of trade

receivables) accounting for outstanding debt of $7,929,000 (2020: three debtors accounting for outstanding debt

of $2,952,000).

At balance date, trade receivables of $725,000 were past due but not considered impaired (2020: $655,000). Of

this amount $228,000 (2020: $622,000) was 3 months or more overdue.

The Group arranges forward foreign exchange contracts within specified policy limits and only with counterparties

approved by directors.

Cash and cash equivalents are deposited with several financial institutions in New Zealand and overseas.

$2,248,000 is deposited with a major NZ trading bank with a Standard & Poors rating of AA- (2020: $2,205,000

AA-) and $2,230,000 (2020: $1,851,000) with Western Union with a Standard & Poors rating of BBB/A-2. The

remaining balance of $1,475,000 (2020: $554,000) is held across several territories and non-performance of

obligations by the relevant banks is not expected due to the credit rating of the counter parties considered.

(c). Liquidity risk

The Group maintains regular forecasts of liquidity based on expected cash flows. The table below analyses the

Group’s financial liabilities into relevant groups based on the remaining period at the reporting date to the end of

the contractual date.

The amounts disclosed are the contractual discounted cash flows.

$000s20212020

Less than

6 months



7 to 12

months

2 to 5

years

Less than

6 months

7 to 12

months

2 to 5

years

Trade and other payables19,046--9,785--

Borrowings394105506572-73

Right-of-use asset liabilities1141187601431481,097

$19,554$223$1,266$10,500$148$1,170

Trade and other payables above exclude any liabilities for tax (including payroll taxes), statutory liabilities and

contract liabilities.

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

(d). Capital risk management

The Company closely monitors its cash requirements.

The Group has complied with financial covenants under the bank trade finance facility.

Gearing ratio

2021

$000s

2020

$000s

Total borrowing1,9972,033

Total equity20,28814,715

Gearing9.8%13.8%

6. Other information

This section includes other information that must be disclosed to comply with accounting standards and other

pronouncements, but that is not immediately related to individual line items in the financial statements.

6.1 Subsidiaries

(a). The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in

accordance with the accounting policy described in Note 1.2b.

Country of

incorporation

Class of

shares

20212020

Wellington Drive Sales LtdNew ZealandOrdinary100%100%

Wellington Drive Technologies US, IncUSAOrdinary100%100%

Wellington Motor Teknolojileri San Tic Ltd StiTurkeyOrdinary100%100%

Wellington Italia SrlItalyOrdinary100%100%

Wellington Drive Technologies Pte LtdSingaporeOrdinary100%100%

Wellington Latin America Services SA de CVMexicoOrdinary100%100%

Wellington Mexico Tecnologia SA de CVMexicoOrdinary100%100%

iProximity Pty LimitedAustraliaOrdinary100%100%

Wellington Iberia S.L.SpainOrdinary100%100%

All subsidiaries have a common balance date of 31 December.

(b). Contingent consideration for acquisition of subsidiary

On 2 July 2018, the Company acquired 100% of the issued share capital of iProximity Pty Limited, an Australian

based innovative proximity marketing solutions and consumer intelligence company. The consideration for the

acquisition comprised up-front payments of AU$1,250,000 and cash and share-based earn out targets as follows:

• A$500,000 based on meeting specified EBIT targets (for iProximity’s existing business) for the 2018 and 2019

financial years; and

• the issue of fully paid ordinary shares in the Company in tranches based on meeting specified EBIT targets

for the period ending 31 December 2020 (9,448,964 shares) and based on Wellington’s Connect SCS System

controller unit sales (‘SCS Target’) for the same period (9,448,964 shares).

The purchase consideration was:

$000s

Cash paid1,367

Contingent consideration2,327

Total purchase consideration$3,694

EBIT targets were not achieved so the A$500,000 cash consideration is not payable and the 9,448,964 fully paid

ordinary shares are not required to be issued in respect of those targets. The Company agreed to extend the

period for the SCS Target to be achieved to 31 December 2021 and increased the number of units required to be

Annual Report 2021Annual Report 2021

(a).

8079
Wellington Drive Technologies LtdWellington Drive Technologies Ltd

sold for the remaining shares to be issued. 4,724,482 ordinary shares in the Company have been issued to 31

December 2020.

In the year ended 31 December 2021, 480,000 SCS controllers were sold which is in the SCS Target range

requiring the issue of a further 1,574,828 shares. The fair value of the share-based contingent consideration was

calculated to be $322,840 on 31 December 2021 and this resultant increase in contingent consideration has been

recognised as a fair value charge in the Statement of Comprehensive Income (Note 6.4).

Contingent consideration

2021

$000s

2020

$000s

Fair value at start of year-1,016

Remeasurement recognised in income statement323(1,016)

Total323-

6.2 Related party transactions

(a). Directors

The names of persons who are directors of the Company are on pages 41 to 42.

(b). Key management personnel and compensation

Key management personnel compensation is set out below. Key management personnel comprise the Directors

including the Chief Executive Officer (CEO) and all the senior executives who report directly to the CEO.

2021

$000s

2020

$000s

Salaries, fees and other short-term benefits1,7761,351

Share based remuneration31-

Directors’ remuneration561168

Total$2,368$1,519

(c). Employee share-based remuneration

Equity settled, share based compensation was provided in previous years to employees via the Wellington Partly

Paid Share Scheme and the US Employees Share Option Plan. The part paid shares issued in 2016 expired

during the year and lapsed. Amounts paid by employees for these partly paid shares will be refunded in 2022. At

31 December 2021 there were no outstanding partly paid shares or US Employees share options.

During the year, 12,930,000 options were issued to the Chief Executive Officer. 8,620,000 options (Tranche One)

will vest on 1 October 2024 and 4,310,000 options (Tranche Two) will vest on 1 October 2025, if the CEO remains

a full-time employee on those dates. The exercise price of the Tranche One options is 9.1 cents and of the

Tranche Two options is 11.5 cents.

The fair value of the employee services received in exchange for the grant of part paid shares or options are

recognised as an expense over the vesting period. The proceeds received net of any directly attributable

transaction costs are credited to share capital when the partly paid share proceeds are received, or options

are exercised.

Fair value is assessed at the date that the share options are issued using a binomial option pricing model that

takes into account the exercise price, the term of the options, the exercise criteria, the likelihood of staff turnover,

the non-tradable nature of the option, the share price at the issue date, the volatility of the returns on the

underlying share and the risk-free interest rate for the term of the options.

(d). Incentive scheme – deferral of settlement

At 31 December 2020, the Company had a liability under a short-term incentive plan (STI) to senior executives

amounting to $885,000 in respect of 2019 on target performance, payment of which was delayed to assisting the

Company to manage its cash flow following the Covid-19 demand reductions. Interest was payable at 10% pa.

This was settled in full in January 2021.

(e). East West Manufacturing LLC

East West Manufacturing LLC (East West), a substantial security holder in the Company, supplies goods and

services to the Company from its manufacturing facility in Vietnam and purchases product for distribution in

the USA.

2021

$000s

2020

$000s

Purchases from East West41,10819,685

Sales to East West512459

Cash payments to East West33,29026,036

Cash receipts from East West357879

Trade receivable from East West at 31 December20145

Trade payable to East West at 31 December12,1034,285

Interest payments to East West for extended credit terms-103

6.3 Contingencies

There are no material contingent liabilities or assets (2020 - $nil).

6.4 Financial instruments by category

2021

$000s

2020

$000s

Assets per Statement of Financial Position

Financial assets measured at amortised cost

Trade and other receivables17,5008,258

Cash and cash equivalents5,9534,610

$23,453$12,868

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

2021

$000s

2020

$000s

Liabilities per Statement of Financial Position at amortised cost

Trade and other payables19,1679,872

Borrowings1,9972,033

Liabilities (at fair value)

Derivative financial instruments21-

Contingent consideration323-

$21,508$11,905

Fair value estimation

The only financial instruments carried at fair value are derivatives comprising forward foreign exchange contracts

and contingent consideration.

The forward exchange contract has been classified as Level 2.

The different levels have been defined as follows:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

• Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either

directly (i.e. as prices) or indirectly (i.e. derived from prices) (Level 2).

• Inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs)

(Level 3).

The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance

sheet date, with the resulting value discounted back to present value. The fair value of contingent consideration in

respect of the acquisition of iProximity Pty Limited is determined using the number of shares that are to be issued

to the vendors pursuant to the purchase agreement (1,574,828 shares) and the Company’s share price at 31

December 2021 (20.5 cents).

6.5 Leases

Property, plant and equipment in the Statement of Financial Position shows the following amounts related to

leases of right-of-use assets:

Right-of-use assets

2021

$000s

2020

$000s

Properties765893

Plant & equipment2140

Office equipment and furniture & fittings58

Total$791$941

Additions to right-of-use assets in the year

2021

$000s

2020

$000s

Plant & equipment

-

27

Total$-$27

The Consolidated Statement of Comprehensive Income shows the following amounts related to right-of-use

leases:

Depreciation charge for right-of-use assets

Properties180170

Plant & equipment189

Office equipment and furniture & fittings33

Total$201$182

Interest expense on lease liabilities$75$86

Expense relating to short-term leases (included in operating

expenses)

$42$37

The Consolidated Cash Flow Statement shows the following amounts related to right-of-use leases:

Total principal payments for right-of-use assets$217$193

The Group leases property, equipment and cars. Rental contracts are typically made for fixed periods but may

have extension options as described below. Lease terms for equipment and cars tend to be industry standard.

Other leases are negotiated on an individual basis.

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is

available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance

cost is charged to Statement of Comprehensive Income over the lease period to produce a constant periodic rate

of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the

shorter of the asset’s useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include

the net present value of the following lease payments:

• Fixed payments (including in-substance fixed payments), less any lease incentives receivable.

• Variable lease payments based on an index or rate.

• Amounts expected to be payable by the lessee under residual value guarantees.

• The exercise price of a purchase option if the lessee is reasonably certain to exercise that option.

• Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or

the Group’s incremental borrowing rate.

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Right-of-use assets are measured at cost comprising the following:

• The amount of the initial measurement of lease liability.

• Any lease payments made at or before the commencement date less any lease incentives received.

• Any initial direct costs.

• Restoration costs.

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line

basis as an expense in the Statement of Comprehensive Income. Short-term leases are leases with a lease term

of 12 months or less. Low-value assets are assets of a value of US$5,000 or less.

Lease renewal options are included in the property lease. In determining the lease term, management considers

all facts and circumstances that create an economic incentive to exercise the renewal option. Renewal options are

only included in the lease term if the lease is reasonably certain to be extended. The assessment is reviewed if a

significant event or a significant change in circumstances occurs which affects this assessment and that is within

the control of the lessee.

6.6 Other disclosures

Auditors’ remuneration

2021

$000s

2020

$000s

Deloitte

Audit of financial statements of the Group – current year170147

Audit of the financial statements of the Group – last year-40

Non audit services *

1

4926

Audit of subsidiaries by other auditors – Thong & Lim44

$223$217

*

1

Non audit services relate to tax compliance and payroll services.

6.7 Cash flow information

(a). Reconciliation of profit / (loss) for the year to net cash inflow from operating activities

2021

$000s

2020

$000s

Profit / (loss) for the year5,425(2,154)

Adjustments for:

Income tax credit / (expense)(5,981) -

Depreciation, amortisation & impairment2,9862,783

Share based payments31-

(Decrease) in inventory provision(7)(82)

(Decrease) / increase in loss allowance provision(67)7

(Decrease) in provision for warranty(110)(153)

2021

$000s

2020

$000s

Change in fair value of contingent consideration323(1,016)

Net foreign exchange differences(163)(478)

(Increase) / decrease in trade and other receivables(9,206)6,160

Increase / (decrease) in contract liabilities2,597(222)

(Increase) / decrease in inventories(1,176)1,461

Increase / (decrease) in trade and other payables9,295(5,966)

Net cash inflow from operating activities$3,947$340

(b). Net cash reconciliation

2021

$000s

2020

$000s

Cash and cash equivalents5,9534,610

Borrowings – repayable within one year(731)(863)

Borrowings – repayable after one year(1,266)(1,170)

Net cash$3,956$2,577

The bank trade finance facility is at variable interest rates. All other borrowings are at fixed interest rates,

with borrowings movements disclosed in note 4.1. The increase in cash during the year of $1,343,000 (2020:

$1,151,000 included a $333,000 decrease (2020: $208,000 decrease) caused by exchange rate movement.

6.8 Events after reporting date

There are no events after reporting date requiring disclosure.

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Independent Auditor’s Report

To the Shareholders of Wellington Drive Technologies Limited

We have audited the consolidated financial statements of Wellington Drive Technologies Limited

(the ‘Company’) and its subsidiaries (the ‘Group’), which comprise the consolidated statement of

financial position as at 31 December 2021, and the consolidated statement of comprehensive income,

statement of movements in equity and cash flow statement for the year then ended, and notes to the

consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements, on pages 47 to 84, present fairly,

in all material respects, the consolidated financial position of the Group as at 31 December 2021, and

its consolidated financial performance and cash flows for the year then ended in accordance with

New Zealand Equivalents to International Financial Reporting Standards (‘NZ IFRS’) and International

Financial Reporting Standards (‘IFRS’).

We conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and

International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities under those

standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated

Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.

We are independent of the Group in accordance with Professional and Ethical Standard 1

International Code of Ethics for Assurance Practitioners (including International Independence

Standards) (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board and

the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional

Accountants (including International Independence Standards), and we have fulfilled our other ethical

responsibilities in accordance with these requirements.

Our firm carries out other assignments for the Group in the area of taxation advice, including tax

compliance services for the Mexican subsidiary. These services have not impaired our independence

as auditor of the Company and Group. In addition to this, partners and employees of our firm deal

with the Company and its subsidiaries on normal terms within the ordinary course of trading activities

of the business of the Company and its subsidiaries. The firm has no other relationship with, or

interest in, the Company or any of its subsidiaries.

We consider materiality primarily in terms of the magnitude of misstatement in the financial

statements of the Group that in our judgement would make it probable that the economic

decisions of a reasonably knowledgeable person would be changed or influenced (the ‘quantitative’

materiality). In addition, we also assess whether other matters that come to our attention during the

audit would in our judgement change or influence the decisions of such a person (the ‘qualitative’

materiality). We use materiality both in planning the scope of our audit work and in evaluating the

results of our work.

We determined materiality for the Group financial statements as a whole to be $900,000.

Key audit matters are those matters that, in our professional judgement, were of most significance

in our audit of the consolidated financial statements of the current period. These matters were

addressed in the context of our audit of the consolidated financial statements as a whole, and in

forming our opinion thereon, and we do not provide a separate opinion on these matters.

Opinion

Basis for opinion

Audit materiality

Key audit matters

Evaluation of cash flow forecasts supporting the use of the

going concern assumption

The financial statements have been prepared on a going

concern basis as discussed in note 1.2(a).

The Group reported revenues of $64.2 million, up from

$36.9m in 2020 and $61.7m in the previous year. However,

the Group also reported a loss before tax for the 2021 year of

$556,000 (2020: loss before tax of $1,975,000) and the Group

remains subject to higher than usual level of risk in the current

global environment including unexpected cost increases,

factory closures or capacity reductions due to the COVID-19

virus, suppliers unable to supply some critical components,

and unanticipated disruptions to supply.

In determining that the use of the going concern assumption

is appropriate, the Board of Directors prepared cash flow

forecasts to assess the Group’s ability to have adequate

resources to continue in operational existence, including

generating sufficient cash flows to pay its debts as they fall due

for a period of at least 12 months from the date of approval

of these financial statements. The Board has determined

that these cash flow forecasts are most sensitive to revenue

declines due to customer demand and gross margin pressure,

and delays in delivering products to customers due to the

impact of macroeconomic supply chain factors.

The cash flow forecasts used in the going concern assessment

are considered to be a key audit matter due to the high level

of judgement and estimation uncertainty, extent of auditor

attention and the importance to the financial statements as

a whole.

In assessing the appropriateness of the cash flow forecasts

used in the going concern assessment, our procedures

included, amongst others:

• Obtaining an understanding of the Group’s FY22 Budget

and FY23 – 26 forecasts and the controls and processes in

place for preparing and approving the cash flow forecast

to support the going concern assumption.

• Performing and evaluating inquiries and responses with

supply chain management to assess the Group’s responses

to supply chain issues, specifically the Group’s ability to

satisfy customers’ orders.

• Assessing the Group cashflow forecast prepared for a

period of at least 12 months from the date of approval

of the financial statements. This involved obtaining an

understanding of the inputs to the model and challenging

key judgements and assumptions, as follows:

-Assessing the reasonableness of forecast sales based

on our understanding of historical sales trends

including forecast volumes at a customer level

compared to historical levels;

-Challenging the reliability of the Group’s revenue

growth rates by comparing forecast growth rates

to historical forecasts and actual results. This also

included consideration of COVID-19 on both forecast

revenue and profitability of the Group;

-Assessing the operating, financing and capital cash

flow requirements of the Group over the forecast

period; and

-Performing sensitivity analysis over key assumptions

in the model such as forecast revenue, gross margin

and timing of new products being developed in light

of supply chain delays.

• Checking the mechanical accuracy of the cash flow

forecast.

• Reviewing the bank facility terms; including the Group’s

ability to meet repayment terms and comply with

covenant restrictions.

Key audit matterHow our audit addressed the key audit matter

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Capitalisation of internal development costs

The Group capitalised $2.0 million of internal development

costs (2020: $3.1 million), as set out in note 3.3 ‘Intangible

assets’. This includes capitalised employee and contractor

time.

Judgement is required to determine if the recognition criteria

to capitalise costs of development under NZ IAS 38 Intangible

Assets have been met. Key areas of judgement include

assessments of technical feasibility, likelihood of generating

future economic benefits and the availability of funding

necessary for completing the products.

We have included capitalisation of internal development

costs as a key audit matter due to the level of judgement

required to determine whether the costs meet the criteria for

capitalisation, the manual nature of the calculation and the

growing importance of development of IoT and new motor

products.

We have evaluated the appropriateness of internal

development costs capitalised by:

• Challenging the Group’s determination of which

development costs meet the criteria to be capitalised

under NZ IAS 38. We obtained an understanding of the

nature of the projects from management, including how

they are used in the business, the stage of development,

and the likelihood of the development being successfully

completed and used to generate revenue.

• Checking capitalisation of cost calculations for

mathematical accuracy.

• Testing the amounts capitalised on a sample basis and

agreeing this to underlying evidence, including, for

employee and contractor costs allocated to development

projects, testing a sample of hours worked on each project

and the relevant wage rates.

• Challenging the recoverability of capitalised costs by

assessing the reasonableness of management’s forecast

revenues in relation to each product

Key audit matterHow our audit addressed the key audit matter

The directors are responsible on behalf of the Group for the other information. The other information

comprises the information in the Annual Report that accompanies the consolidated financial

statements and the audit report.

Our opinion on the consolidated financial statements does not cover the other information and we do

not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and consider whether it is materially inconsistent

with the consolidated financial statements or our knowledge obtained in the audit or otherwise

appears to be materially misstated. If so, we are required to report that fact. We have nothing to

report in this regard.

The directors are responsible on behalf of the Group for the preparation and fair presentation of the

consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal control

as the directors determine is necessary to enable the preparation of consolidated financial statements

that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the directors are responsible on behalf of the

Group for assessing the Group’s ability to continue as a going concern, disclosing, as applicable,

matters related to going concern and using the going concern basis of accounting unless the directors

either intend to liquidate the Group or to cease operations, or have no realistic alternative but to

do so.

Our objectives are to obtain reasonable assurance about whether the consolidated financial

statements as a whole are free from material misstatement, whether due to fraud or error, and to

issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance

but is not a guarantee that an audit conducted in accordance with ISAs and ISAs (NZ) will always

detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence

the economic decisions of users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the consolidated financial statements is

located on the External Reporting Board’s website at:

https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-

report-1

This description forms part of our auditor’s report.

This report is made solely to the Company’s shareholders, as a body. Our audit has been undertaken

so that we might state to the Company’s shareholders those matters we are required to state to them

in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not

accept or assume responsibility to anyone other than the Company’s shareholders as a body, for our

audit work, for this report, or for the opinions we have formed.

Other information

Auditor’s

responsibilities for

the audit of the

consolidated financial

statements

Restriction on use

Directors’

responsibilities for the

consolidated financial

statements

Paul Seller, Partner

for Deloitte Limited

Auckland, New Zealand

25 February 2022

This audit report relates to the consolidated financial statements of Wellington Drive Technologies Limited (the ‘Company’) for the year ended 31 December 2021

included on the Company’s website. The Directors are responsible for the maintenance and integrity of the Company’s website. We have not been engaged to

report on the integrity of the Company’s website. We accept no responsibility for any changes that may have occurred to the consolidated financial statements

since they were initially presented on the website. The audit report refers only to the consolidated financial statements named above. It does not provide an

opinion on any other information which may have been hyperlinked to/from these consolidated financial statements. If readers of this report are concerned with

the inherent risks arising from electronic data communication, they should refer to the published hard copy of the audited consolidated financial statements and

related audit report dated 25 February 2022 to confirm the information included in the audited consolidated financial statements presented on this website.

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Statutory information

Introduction

Directors have resolved that no dividend be declared.

The Company does not have a credit rating.

Remuneration of Directors

During the year the following remuneration was paid or payable to directors:

2021


2020

Mr J McMahon

1

$50,000$23,333

Mr G Pausch

2

$193,000$69,333

Mr K Oliver

3

$50,000$32,500

Mr J Scott $45,000$30,000

Mr G Allen


4

$109,008-

Dr L Jacobs


5

-$9,167

Note.

1. Fees for Mr J McMahon are paid to Meta Capital Ltd.

2. Fees for Mr G Pausch are paid to Board Advisory Services Ltd.

3. Fees for Mr K Oliver are paid to Alto Capital Ltd.

4. Mr G Allen was appointed a director on 30 October 2020. His fees are paid to RJ-Alpha Advisory Services Ltd.

5. Dr L Jacobs resigned with effect from 28 February 2020.

Interested transactions

The directors have disclosed the following transactions with the Company:

• Interested transactions: There have been no transactions during the year with interested or related parties of the

directors.

• Directors’ remuneration: Remuneration details of directors are provided above. Gottfried Pausch’s remuneration

includes a $151,179 consultancy fee paid for his interim Auckland-based executive role. Greg Allen’s remuneration

includes a $109,000 consultancy fee paid for the period from 1 April 2021 to 31 December 2021.

• Indemnification and insurance of officers and directors: The Company indemnifies directors and executive officers

of the Group against all liabilities which arise out of the performance of their normal duties as director or executive

officer, unless the liability relates to conduct involving lack of good faith. To manage this risk, the Group has

indemnity insurance. The total cost of this insurance expensed during the year ended 31 December 2021 was

$115,315 (2020: $98,214).

• Directors’ share transactions: Details of numbers of shares held by directors are shown below.

• Directors’ loans: There were no loans by the Company to directors.

• The Board received no notices during the year from directors requesting to use Company information received in

their capacity as directors which would not otherwise have been available to them.

Directors’ shareholding

31 December 2021 31 December 2020

Ordinary sharesTotal Relevant Interest

DirectTotal Relevant Interest Direct

Mr J McMahon19,178,253-19,178,253-

Mr J Scott-850,000-850,000

Mr G Allen-7,493,382-7,493,382

Mr G Pausch-2,416,6402,416,640

Employees

The number of employees, other than directors, within the Group receiving remuneration and benefits above

$100,000, as is required to be disclosed in accordance with section 211(1) (g) of the Companies Act 1993, is indicated

in the following table.

GroupGroup

2021202020212020

$100,000 - $109,999 46$210,000 - $219,999 22

$110,000 - $119,999 75$240,000 - $249,9991-

$120,000 - $129,999 44$250,000 - $259,99931

$130,000 - $139,999 42$270,000 - $279,9992-

$140,000 - $149,999 15$290,000 - $299,9991-

$150,000 - $159,99922$300,000 - $309,9992-

$160,000 - $169,99931$310,000 - $319,999-1

$170,000 - $179,999 12$320,000 - $329,9991-

$180,000 - $189,999 42$340,000 - $349,9991-

$190,000 - $199,999 21$390,000 - $399,999-1

$200,000 - $210,00023$440,000 - $449,9991-

In 2020, employee salaries were reduced during the period from May 2020 to December 2020 by agreement, as part

of the Company’s response to COVID-19. The amount of salary sacrifice was paid to employees in 2021. Payment

under the short-term incentive plan for the 2019 year (payable in 2020) was also delayed by agreement with relevant

employees until early 2021. It was paid in January 2021. The amounts paid to employees in 2021 include the

payments of salary sacrifice and the 2019 short-term incentive.

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Shareholder information

Shareholders

As at 31 December 2021 there were 2,723 shareholders holding 431,914,620 fully paid ordinary shares.

Share issues

There were no issues of shares in 2021.

Shareholder details

The ordinary shares of Wellington Drive Technologies Limited are listed on the New Zealand Stock Exchange. The

information in the disclosures below has been taken from the Company’s share register at 15 February 2022:

20 largest shareholders Ordinary Shares

1. East West Legacy LLC.55,149,807

2. Wairahi Investments Limited25,800,000

3. Ballynagarrick Investments Ltd21,185,103

4. Tea Custodians Ltd20,015,916

5. ASB Nominees Ltd (Meta Capital Ltd)19,178,253

6. HSBC Nominees (New Zealand) Ltd18,801,403

7. Hobson Wealth Custodians Ltd16,369,839

8. Graham Trustees Ltd16,092,744

9. FNZ Custodians Ltd10,475,396

10. New Zealand Depository Nominee Ltd9,303,392

11. Flynn No 2 Trustees Ltd8,564,758

12. Greg Allen6,488,049

13. BNP Paribas Nominees (NZ) Ltd6,135,089

14. Accident Compensation Corporation 6,000,000

15. JP Morgan Chase Bank NA New Zealand Branch4,901,165

16. Forsyth Barr Custodians Ltd4,278,935

17. Howard Duncan Milliner3,536,561

18. Lean Holdings Pty Ltd3,338,025

19. FNZ Custodians Ltd3,215,858

20. Circada Ltd3,200,000

20. Stephen Christopher Montgomery3,200,000

Distribution of equity securities

Size of holdings at 15 February 2022.

Shareholders Fully paid Ordinary Shares

Number%Number%

1-99985330.7273,5680.1

1,000-1,9992308.3301,6410.1

2,000-4,99934012.21,052,3260.2

5,000-9,9992639.51,775,8170.4

10,000-49,99960521.813,792,7543.2

50,000-99,9991766.311,910,4652.8

100,000-499,9992117.644,205,18910.2

500,000-999,999391.425,991,1066.0

over1,000,000602.2332,611,75477.0

2,777100.00431,914,620100.00


2,732 (or 98.4%) shareholders, holding 360,687,882 shares (or 95.0%) reside in New Zealand.

Substantial product holders

Pursuant to section 26 of the Securities Markets Act 1988, details of substantial product holders and their total relevant

interests as per their most recent notices are:

Name Number of shares

2

Date of notice

Jarden Securities Ltd & Harbour Asset Management Ltd48,823,48620 July 2021

Wairahi Investments Ltd26,120,2864 August 2021

East West Legacy, LLC55,149,80724 December 2021

2

Number of shares is taken from notices received. No adjustments have been made for changes that may have subsequently occurred from the

dates of notices stated. The definition of “relevant interest” in the Securities Markets Act 1988 provides that more than one relevant interest can

exist in respect of the same securities.

Shareholder enquiries

Shareholders should send changes of address to Computershare Investor Services Limited at the address noted

in the directory on page 108. Notification must be in writing. Questions relating to shareholdings should also be

addressed to Computershare Investor Services Limited. For information about the Group please contact the Company

at the registered office by sending an email to info@wdtl.com or visit our website http:/www.wdtl.com.

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Announcements to shareholders

The Company has established an email list of shareholders that wish to receive announcements made by the

Company to the New Zealand Stock Exchange. Announcements are emailed to shareholders who wish to receive

them shortly after they are released to the NZX. This will include the annual meeting addresses. If you wish to be

added to this listing, please email info@wdtl.com and advise us of your email address. Your email details will be

kept confidential.

Announcements are also posted on our website www.wdtl.com.

Corporate governance

The Board and Management of Wellington Drive Technologies Limited are committed to acting with integrity and

expect high standards of behaviour and accountability from all the Company’s officers and staff.

Role of the Board

The Board’s primary objective is the enhancement of shareholder value by following a set of core principles,

appropriate governance and ethical strategies and ensuring effective and innovative use of Company resources. The

Board is responsible for the management oversight, supervision and direction of the Group. Day-to-day management

of the Group is delegated to the Chief Executive Officer.

Compliance

The governance principles adopted by the Board are designed to meet best practice recommendations for listed

companies to the extent that they are appropriate to the size and nature of Wellington’s operations. The Board

endorses the overall principles embodied in the NZX Corporate Governance Code 2020 (the NZX Code) and believes

the Company’s corporate governance principles, policies and practices are appropriately aligned with the NZX Code.

The Company is reporting against the recommendations in the NZX Code, by describing below the corporate

governance policies and practices Wellington has in place and highlighting the small number of areas of the NZX

Code where we have not fully followed the Code’s recommendations.

Wellington takes a “continuous improvement” approach to corporate governance. Our governance programme

includes reviewing of policies and Board and committee charters, with the last major reviews having been completed

in 2020.

This statement is current to 23 February 2022 and has been approved by the Wellington Board of Directors.

Board and committee charters, codes and policies referred to in this section are available to view at www.wdtl.com/

governance.

NZX Code

Principle 1 – Code of ethical behaviour

The Company is committed to transparency and fairness in dealing with

all its stakeholders and to ensuring adherence to all applicable laws and

regulations. The Company expects its directors, officers, and employees

to maintain high standards of ethical conduct and expects employees

to act legally, ethically and with integrity in a manner consistent with

the policies and guiding principles that are in place. These include the

following:

• Code of Business Conduct and Ethics for Wellington team members and directors: Wellington team

members are committed to being ethically and socially responsible and our business decisions should reflect our

values, acting within the laws of the countries in which it operates. The code, which can be found at http://www.

wdtl.com/governance, provides a guide to these general principles of conduct and ethics. It brings together all

our policy principles and provides a working guide for directors and employees to do the right thing when making

decisions in our daily activities, and to:

√Act safely, ethically and responsibly

√Act in Wellington’s best interests always

√ Protect the confidentiality of Wellington’s business information

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

√Always comply with the principles in the Code, the legal and regulatory obligations in their country and the spirit of

the law

√Hold their colleagues accountable for behaving ethically and following the Code

√Not engage in any activity whether within or outside of the workplace that is likely to bring Wellington

into disrepute

√Deal honestly with Wellington’s people, customers, shareholders, suppliers and other stakeholders

√Ensure that they do not knowingly enter into transactions or make commitments on behalf of Wellington that the

Company cannot or does not intend to fully honour

√Undertake their duties with care and diligence

√ Ensure that any personal opinions Wellington people express are clearly identified as their own and are not

represented to be the views of the Company

√Value individuals’ differences and treat people with respect

√ To the best of their ability, ensure that Wellington’s records and documents, including financial reports, are true,

correct and conform to Wellington’s reporting standards and internal controls

√Not accept or offer bribes or improper inducements

√Speak up about unsafe or unethical behaviours

The Code includes a policy regarding a respectful workplace and diversity, requiring equal opportunity for all.

Wellington is committed to attracting, developing and advancing the best person for the role. Selection processes

for recruitment and employee development are unbiased and based on merit. Wellington values diversity and has a

workforce consisting of individuals with diverse skills, values, backgrounds, gender, ethnicity and experience. Any form

of discrimination, bullying or harassment is not tolerated.

Wellington takes the Code seriously. It is the responsibility of all Wellington people globally to promptly bring

suspected violations to the attention of the Company, for the benefit of all.

• Rules for Trading in Wellington Securities: The Rules for Trading in Wellington Securities, which can be found

at http://www.wdtl.com/governance, require all staff and directors to seek approval in accordance with the rules

before buying or selling any Wellington securities. The policy details “blackout periods” where trading is forbidden,

as well as a process for authorisation at all other times.

The Company has an ongoing programme to maintain employee awareness and understanding of these ethical

standards and policies.

Principle 2 – Board composition and performance

The Wellington Board comprises directors with an appropriate range

and mix of skills and experience; who have a proper understanding

of, and competence to deal with, current and emerging issues of

the business; and who can effectively review and challenge the

performance of management and exercise judgment independent of

management. The Board’s structure and governance arrangements are

set out in the Wellington Board Charter which can be found at http://

www.wdtl.com/governance.

The Wellington Constitution requires the Company to comply with the minimum Board composition requirements

of the NZ Stock Exchange which are that there must be at least three directors, and at least two directors must be

independent directors and two ordinarily resident in New Zealand. We assess director independence against the

“disqualifying relationship” criteria in the NZX Listing Rules. The Board currently has five directors, four of whom are

considered independent and one director, Greg Allen, who is not considered independent due to his recent role as

Chief Executive Officer of the Company.

Profiles of all directors and their dates of appointment are set out in the Directors section of this Annual Report on

pages 41 to 42 and are available on the Company’s website.

Attendance at meetings held during 2021 was:

Directors’ meetings

John

McMahon

Gottfried

Pausch

Keith

Oliver

John

Scott

Greg

Allen

Meetings held whilst a director1010101010

Attendance10101088

Audit and Risk Committee meetings

John

McMahon

Keith

Oliver

Gottfried

Pausch

Meetings held whilst a committee

member

221

Attendance221

As the Board is small, the Company has not established a separate nomination committee as recommended under

the NZX Corporate Governance Code, believing these matters are best dealt with by the full Board of Directors.

Periodically the Board evaluates its performance, composition, size, diversity and mix of skills. The method of review

is determined by the chairperson annually and may include interviews, questionnaires and/or external review. The

Board is satisfied that it is operating well and that the performance processes we have used are both effective and

suited to the Company.

When a decision is made to recruit a new director, the Board identifies candidates with a mix of capabilities and

perspectives considered necessary for the Board to carry out its responsibilities effectively. The Board also considers

the skills of the existing directors to ensure that the skills of the new director will complement and add to the

effectiveness of decision making. Appropriate pre-appointment checks are made on the background and suitability

of all directors. New Board members enter into a written agreement establishing the terms of their appointment.

A director appointed by the Board must stand for election at the next annual meeting. Listing Rule 2.7.1 requires

directors to stand for re-election on the later of three years and the third annual shareholders’ meeting after their

appointment. Retiring directors are eligible for re-election.

Year of director appointment:

Gottfried

Pausch

John

McMahon

Keith

Oliver

John

Scott

Greg

Allen

20132014201920192020


Directors undertake to attend appropriate education to remain current in how to best perform their duties as directors.

Directors are encouraged to attend courses and maintain membership of relevant bodies, such as the Institute

of Directors.

Directors receive information independently from management in relation to specific issues relevant to Wellington,

the markets in which the Company operates and to NZX listed companies generally. All directors have access to

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

management for any additional information they consider necessary for informed decision making.

The Company recognises our people are critical to our business. Wellington has a very small number of employees, a

significant number of whom are based outside of New Zealand, which makes it challenging for the Company to adopt

any formal targets in relation to diversity as is recommended by the NZX Code. While we do not have any such formal

targets, Wellington values and respects the contributions, ideas and experiences of people from all backgrounds

and is proud to have a diverse company with staff from around the world and from many cultures. As stated, the

Company has a diversity policy included in its Code of Business Conduct and Ethics, and is committed to attracting,

developing and advancing the best person for the role. Recognising the small size of the Company, the Company’s

diversity policy does not include measurable objectives to be met, as recommended by the NZX Code. Attracting the

best person for a role may involve a global search for a suitable candidate and that selection may add to our diversity.

Wellington recognises diversity brings a range of ideas, skills and innovation to the Company, which is important to

the achievement of our objectives. The Board is generally not satisfied with the Company’s performance in relation to

diversity, and considers that the Company could improve its diversity at the senior management and board level and is

conscious of the benefits a diverse leadership team can provide to the business.

During 2022, the Company will continue to strive to ensure the best person for the role is identified in the recruitment

process for all positions becoming available and will strive to ensure it continues to improve diversity in its workforce.

It will ensure gender, race, sexual orientation, disability, age, religious or other bias are not present in hiring decisions.

The Company aims to encourage development of its existing staff through global re-deployment and training.

Diversity by gender statistics

In accordance with NZX Listing Rule 3.8.1 the Company makes the following diversity disclosures as at 31 December

2021:

MaleFemaleTotal

31 December 2021#%#%

Board5100%--5

Senior management team* 675%225%8

Other staff 6479%1721%81

Total Company 7580%1920%94

MaleFemaleTotal

31 December 2020#%#%

Board5100%--5

Senior management team* 788% 1 12%8

Other staff 6073% 2227% 82

Total Company 7276% 2324% 95


* The senior management team comprises of the Chief Executive Officer (CEO) and all the senior executives who report directly to the CEO. The

senior management team are “officers” for the purpose of the NZX Listing Rules.

Principle 3 – Board committees

The Board has established several committees to guide and assist

them with overseeing certain aspects of corporate governance.

These committees are the Audit and Risk Committee, the Technology

and Innovation Committee and the Executive Appointment and

Remuneration Committee. Each committee is empowered to seek

any information it requires from employees in pursuing its duties and

to obtain independent legal or other professional advice.

Audit and Risk Committee

The Audit and Risk Committee operates under a charter approved by the Board and assists the Board in: taking

reasonable steps to acquire and maintain up-to-date knowledge of enterprise risk management; overseeing the

quality and integrity of external financial reporting including the accuracy, completeness and timeliness of financial

statements; the appropriateness of accounting policies, areas of judgement, compliance with accounting standards,

stock exchange and legal requirements; and the business’s relationship with, and the independence of, the

external auditor.

The committee also approves any non-audit work carried out by the Company’s auditor and ensures that the lead

partner in the audit firm is rotated every five years.

The committee currently comprises three non-executive directors, all of whom independent and one of whom has

a financial or accounting background. The Chairman of the Committee is not also the Chairman of the Board.

Employees only attend meetings of the Audit and Risk Committee at the invitation of the Committee.

The current members are John McMahon (Committee Chairman), Keith Oliver and Gottfried Pausch.

The Audit and Risk Committee charter can be found at http://www.wdtl.com/governance.


Executive Appointment and Remuneration Committee

The Executive Appointment and Remuneration Committee operates under a charter approved by the Board and

assists the Board in; the remuneration and appointment of the senior executive team; management succession

planning; reviewing and approving compensation arrangements; establishing employee incentive schemes and the

remuneration of the Board. The committee also advises on proposals for significant company-wide remuneration

policies and programmes. In carrying out this role, the sub-committee operates independently of senior management

of the Company and, where appropriate, obtains independent advice on remuneration policy and packages.

The Committee must be comprised of at least a majority of independent directors. Employees only attend meetings of

the Executive Appointment and Remuneration Committee at the invitation of the Committee.

The current members are independent directors Keith Oliver (Committee Chairman) and Gottfried Pausch (Past

Committee Chairman).

The Executive Appointment and Remuneration Committee charter can be found at http://www.wdtl.com/governance.

Other committees

From time-to-time the Board may establish a committee to assist in the management of a matter or project.

The Company has established protocols for dealing with a takeover should an offer be received.

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Health and safety

Whilst not a committee of Board members, Wellington has a Health and Safety Committee that meets monthly and

reports to the Board. The Company is strongly committed to maintaining a safe and healthy workplace and believes all

accidents are preventable. The committee is made up of a mix of senior management and staff from key operational

areas. The committee strives to; maintain and continually improve our health and safety systems; proactively identify

hazards and take all steps to eliminate or mitigate these; consult and actively promote participation in health and

safety matters throughout the Company.

The health and safety policy can be found at http://www.wdtl.com/governance.

Principle 4 – Reporting and disclosure

The Company is committed to ensuring integrity and timeliness of

its financial reporting and in providing information to the market and

shareholders.

Financial reporting

The Board has overall responsibility for ensuring the integrity of the

Company’s reporting to shareholders, including for financial statements

that comply with generally accepted accounting practice. The Audit

and Risk Committee assists the Board to fulfil its responsibilities in this

area. The committee makes enquiries of management and the external auditors (including requiring management

representations) so that the Company can be satisfied as to the validity and accuracy of all aspects of Wellington’s

financial reporting.

The CEO and CFO certify to the Board that: the annual report is true, and the statements therein are not materially

misleading; and no matters in the annual report would make any of the statements untrue or materially misleading.

Wellington strives to improve the clarity and readability of its financial statements, while continuing to comply with

all the requirements of the financial reporting standards including the Companies Act 1993, the Financial Markets

Conduct Act 2013, and the Listing Rules.

Continuous disclosure

The Company has a formal Group Market Disclosure Policy that can be found at http://www.wdtl.com/governance.

The policy seeks to promote investor confidence by ensuring that dealing in its securities takes place in an efficient,

competitive and informed market. The Company strives to ensure that all investors have equal and timely access to

market sensitive information. The Company considers that evenly balanced disclosure (during good times and bad)

is fundamental to building shareholder value and earning the trust of staff, customers, suppliers, communities

and shareholders.

The Board reviews and approves material announcements and specifically considers with management at each

Board meeting whether there are any issues which might require disclosure to the market under the NZX continuous

disclosure requirements.

Trading in shares

Wellington is committed to transparency and fairness in dealing with all its stakeholders and to ensuring adherence to

all applicable laws and regulations.

Wellington has a detailed share trading policy, the Rules for Trading in Wellington Securities that can be found at

http://www.wdtl.com/governance, which applies to all directors and employees. No director or employee may use

confidential non-public price sensitive information in his or her position to engage in securities trading for personal

benefit or to provide benefit to any third party. Short-term trading in Wellington shares and buying or selling (while in

possession of non-public price-sensitive information) is strictly prohibited.

Given the small size of the Company, all directors and employees must obtain consent to trade in securities prior to

trading. All members of the Board need to consent to the application. Once these consents have been received the

Chair of the Wellington Board or (where the Chair is unavailable) the Chair of the Board’s Audit and Risk Committee,

will approve or decline the application. The Company monitors trading and reports share movements to the Board at

every meeting.

Information for investors

Wellington’s investor website http://www.wdtl.com/news-and-information includes the Company’s reports, investor

communications, audio and video releases and the Policies and Charters referred to in this section. The Annual and

Interim Reports are available in electronic and hard copy format.

Principle 5 – Remuneration

The Executive Appointment and Remuneration Committee is

responsible for ensuring directors and executives receive the

appropriate rewards to support Wellington in achieving its commercial

and stakeholder goals. The Executive Appointment and Remuneration

Committee has a formal charter. Its membership and role are set out

under Principle 3 above.

Director remuneration

Directors’ fees are intended to be aligned with other organisations of similar scale and complexity. Directors’ fees are

currently set at a maximum aggregate cap of $400,000 per annum. This was approved by shareholders at the 2019

Annual Meeting. Directors’ fees paid in the 2021 financial year amounted to $186,821 due to the small size of the

Board, and the fact that Directors forwent part of their fees during the year in response to COVID-19. Full disclosure

of director remuneration is set out on page 89. Gottfried Pausch received a consulting fee in 2021 of $151,179 for

his interim Auckland based executive role with the Company. Greg Allen received remuneration for his role as Chief

Executive Officer until 31 March 2021 and a consultancy fee of $109,008 for the period from 1 April 2021 to 31

December 2021. Greg Allen did not receive director fees in 2021. His director fees commenced on 1 January 2022,

upon expiry of his consultancy. Other than as disclosed here, no director is entitled to any other remuneration or

retirement benefits from Wellington. Directors are entitled to be reimbursed for reasonable travel, accommodation and

other expenses incurred by them in connection with their attendance at Board or shareholder meetings or otherwise in

connection with Wellington business.

The Executive Appointment and Remuneration Committee conducts a regular review of directors’ fees, to determine

whether the level of fees paid to the Company’s chairperson and other non-executive directors is aligned with other

organisations of similar scale, scope and complexity. The next review is scheduled for early 2022. Any increases

in fees paid to directors must be authorised by the Board and be within the above aggregate cap approved by

shareholders.

Executive Remuneration Policy

Wellington’s approach is to pay a base salary and a performance-based bonus that includes a short-term and a

long-term incentive component. This ensures executive motivation is aligned with the goals of the Company in the

short and long term.

Base salary

As stated above, the Company recognises our people are critical to our business and its growth strategies.

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Wellington Drive Technologies LtdWellington Drive Technologies Ltd

Wellington’s remuneration strategy is to pay executives a remuneration that is fair and reasonable in a competitive

market for the skills, knowledge and experience required by the Company. Salaries are determined for their current

position in the market using relevant and up to date market benchmark data and an individual’s performance and are

reviewed annually. Many of our employees are based outside of New Zealand and remuneration varies by location in

accordance with the local market.

Short-Term Incentive

Our Short-Term Incentive (STI) model is focused on delivering financial and business improvement performance

goals, predicated on measurable outcomes, differentiating high performance, and rewarding delivery. The STI

programme applies only to key management and other selected staff members. STI values are calculated as a

percentage of base salary, ranging between 10% to 33% for eligible employees. Executive team STI payments are

determined following a Board level review of the Company’s and the individual’s performance and may be paid out at

between zero to 100% of an individual’s STI target. It is possible for an executive to achieve 200% on financial metrics

if targets are substantially overachieved.

Employee share purchase plans

Wellington has two Long Term Incentive (LTI) share purchase plans, a partly paid share scheme which has been

operating since 2008 and the United States employee share option plan which has operated since 2010. There are no

partly paid share issues or options currently outstanding.

The Company intends to review its long-term incentive plans to ensure that the Company continues to have plans that

are fit for the purpose of retaining and attracting the right talent for the business.

CEO remuneration

The following tables sets out the payments made to the CEO during FY2021.

Greg Allen – CEO until 31 March 2021

Fixed remuneration$220,950

Short term incentive for 2019, paid in January 2021$131,321

Total remuneration$352,271

The Greg Allen’s STI payment for the FY2019 year was $121,224. Payment was made in January 2021 with accrued

interest of $10,097. STI targets for FY2020 were not achieved.

Greg Balla – CEO from 8 August 2021

Fixed remuneration$214,360

Total remuneration$214,360

Greg Balla does not participate in the Company’s STI programme. He has been issued 12,930,000 share options

representing 2.99% of the Company’s ordinary shares at the time of issue. Provided he is a full-time employee at that

date, 8.62 million options shall vest on 1 October 2024 and may be exercised within 18 months following 1 October

2024 at an exercise price of 9.1 cents per share. Provided he is a full-time employee on 1 October 2025, a further 4.31

million options shall vest on 1 October 2025 and may be exercised within 18 months of that date at an exercise price

of 11.5 cents per share.

Principle 6 – Risk management

The identification and effective management of the Company’s risks are

a priority of the Board.

As discussed above, the Board has established an Audit and Risk

Committee to assist the Board with its oversight, monitoring and review

of risk. Bi-annually there is a review of the entire risk landscape to

establish a forward-looking perspective on business risks, both financial

and non-financial, in both the internal and external environment.

The committee provides a forum for discussion of risk, including the Board’s appetite for risk, with the CEO and

management. The CEO and senior management team are required to regularly identify the major risks affecting the

business and to develop strategies to mitigate these risks. Significant risks are discussed at each Board meeting, or

as required.

The Company maintains insurance policies that it considers adequate to meet the insurable risks of the Group.

Exposure to any foreign exchange risk is managed in accordance with policies laid down by the Board.

The Health and Safety Committee meets monthly and reports to the Board on health, safety and wellbeing matters.

Minutes of the Health and Safety Committee are a priority agenda item at all Board meetings and specific reviews

are sought as required. The committee continuously reviews health and safety risks and systems used to identify

and manage those risks, ensuring they are fit for purpose, are being effectively implemented, regularly reviewed and

improved. The frequency of incidents has been low and no Accident Compensation claims involving the Company

have been recorded for several years. The Board undertakes ongoing health and safety education and visits key

operational sites on a regular schedule.

Principle 7 – Auditors

Oversight of Wellington’s external audit arrangements is the

responsibility of the Audit and Risk Committee.

The Company has adopted a policy to ensure that audit independence

is maintained, both in fact and appearance, such that Wellington’s

external financial reporting is viewed as being reliable and credible. The

policy covers the following areas:

• The external auditor must always remain independent of the Company and comply with the New Zealand Institute

of Chartered Accountants’ (NZICA) Code of Ethics

• The external auditor must monitor its independence and report to the Board that it has remained independent

• Guidelines in relation to the provision of non-audit services by the external auditor in order that the provision of

such services does not impair the external auditor’s independence or objectivity

• The audit firm may be permitted to provide non-audit services that are not considered to conflict with the

preservation of the independence of the auditor subject to the approval of the Audit and Risk Committee

• The Audit and Risk Committee must approve significant permissible non-audit work assignments that are awarded

to an external auditor

Deloitte is the existing auditor of the Company and was automatically re-appointed by virtue of section 207T of the

New Zealand Companies Act 1993.

During 2021 other services provided by Deloitte amounted to $49,000 relating to tax compliance services.

To ensure full and frank dialogue between the Audit and Risk Committee and the auditors, the auditor’s senior

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Wellington Drive Technologies Ltd

representatives meet separately with the committee (without management present) at least twice a year, including

immediately before finalisation and release of the Company’s half-year and full-year financial results to the market.

Due to its small size, the Company does not have an internal audit function as is recommended by the NZX Code. As

discussed above, the CEO is accountable for all operational and compliance risks across the Company’s operations

and businesses. The CFO has management accountability for the effective control, implementation and improvement

of internal systems and controls.

Representatives of the Company’s external auditor, Deloitte are invited to attend the annual shareholders meeting

where they are available to answer shareholders’ questions relevant to the audit.

Principle 8 – Shareholder rights and relations

The Board’s policy is to ensure, in an open and transparent manner,

that shareholders are informed of all major and strategic developments

affecting the Company.

We provide information about who we are, including our governance

policies, on our website for investors to access at any time.

The Company releases all material information via the NZX in

accordance with its continuous disclosure requirements. All major

disclosures are also posted on the Company’s website (http://www.wdtl.com/news-and-information) on a timely

basis. Audio files of investor conference calls held with institutional and large investors are also available on the

Company’s website.

Shareholders can directly communicate with the Company via http://www.wdtl.com/contact-investors. Our CEO and

CFO also respond directly to shareholder phone calls and emails.

Shareholders are encouraged to receive all shareholder communications by email. The Company provides a printed

copy of its Interim and annual reports to shareholders who have elected to receive printed copies. Interim and annual

reports are available on the Company’s website in accordance with the requirements of the NZ Companies Act 1993.

The Company’s share register is managed and maintained by Computershare. Shareholders can access their

shareholding details or make enquiries about their current shareholding interests electronically.

Notices of annual meetings are made available as soon as possible and posted on the website of the Company

usually more than one month prior to the meeting. However, the Company has not typically been able to post the

notices on its website within 20 working days prior to the meetings, as recommended by Recommendation 8.5 of the

NZX Corporate Governance Code. The reason for this in 2021 was due to the challenges posed by COVID-19.

The annual meeting for the 2021 year is planned to be held on 25 May 2022. Due to COVID-19 considerations,

the annual meeting may be held virtually, as was the case in 2020. All shareholders are welcome to attend and ask

questions, whether or not the meeting is held virtually or in person or appoint a proxy on their behalf, or submit a

postal vote, if they are unable to attend. The external auditor, Deloitte will be in attendance to answer questions about

the audit and their audit report.

Shareholders are encouraged to attend, participate and vote at meetings. Results of proxies and postal votes are

summarised and disclosed at the meeting. Results of meetings are announced on the NZX as soon as possible

following the closure of the shareholder meeting.

Annual Report 2021Annual Report 2021

Contacts

Wellington offices

New Zealand (Head office)

Wellington Drive Technologies Ltd

21 Arrenway Drive

Rosedale, Auckland 0632

New Zealand

Postal Address

P.O. Box 302 – 533

North Harbour

Auckland 0751, New Zealand

Ph: 64-9-477 4500

Mexico

Wellington Latin America Services SA de CV

San Serafin No. 4

Residencial San Gil

San Juan del Rio, Qro,

Mexico 76815

PO Box 57

San Juan del Rio

Querétaro

Mexico 76800

Ph: +52 427 167 3857

Brazil

Wellington Drive Technologies (Brazil)

Rua Xamim, 370 - Iririu

Joinville, SC

Brazil 89227917-315

Ph: +55 47 3028 3858

Wellington Drive Technologies Ltd

Turkey

Wellington Motor Teknolojileri San Tic Ltd. Sti.

Fatih Sultan Mehmet Mah.

Poligon Cad. No: 8C

Buyaka Kule 3 Kat:11 Daire:70

Tepeüstü 34771 Umraniye – Istanbul

Ph: +90 0 (216) 420 12 02

Fax: +90 0 (216) 420 12 05

Phone/fax

Ph: 64-9-477 4500

Fax: 64-9-479 5540

Internet and social media

Website: www.wdtl.com

Email: info@wdtl.com

LinkedIn

Twitter

Address and registered office

21 Arrenway Drive

Rosedale, Auckland 0632, New Zealand

PO Box 302-533, North Harbour,

Auckland 0751, New Zealand

Auditor

Deloitte Limited

80 Queen Street, Auckland CBD, Auckland 1010

Banker

Bank of New Zealand

Share registry

Computershare Investor Services Ltd,

Private Bag 92119,

Auckland 1142,

New Zealand

Annual Report 2021
www.wdtl.com

WT9621

Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.

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