DATA#3 LIMITED — Earnings Release 2024

Aug 20, 2024

Appendix 4E

ASX Preliminary Final Report

Name of entity Data[#] 3 Limited ABN 31 010 545 267

Reporting period Previous corresponding period

Year ended 30 June 2024 (FY24)

Year ended 30 June 2023 (FY23)

Results for announcement to the market

Results					$
Revenues from ordinary activities		up	0.4%	to	815,683,000
Profit from ordinary activities after tax attributable to members		up	17.0%	to	43,311,000
Net profit for the period attributable to members		up	17.0%	to	43,311,000
Non-IFRS financial information
Gross sales and other revenue1		up	7.8%	to	2,764,118,000
Reconciliation of non-IFRS information to IFRS figures			Year	ended	30 June
			2024		2023
	Note		$’000		$’000
Gross Sales and other revenue1			2,764,118		2,564,570
Adjustment for sales recognised as agent			(1,948,435)		(1,752,075)
Revenue	3		815,683		812,495

1. Gross Sales is non-IFRS financial information and does not represent revenue in accordance with Australian Accounting Standards. Gross Sales represent gross proceeds from the sale of goods and services whether as agent or principal. The directors believe this non-IFRS information provides investors with additional information for the analysis of Data[#] 3’s results of operations, particularly in evaluating performance from one period to another. Data[#] 3’s management uses non-IFRS financial measures to make operating decisions, and they facilitate additional internal comparisons of Data[#] 3’s performance to historical results and to competitors' results.

Dividends	Amount per	Franked amount
	security	per security
Current period
Interim dividend	12.60 cents	12.60 cents
Final dividend	12.90 cents	12.90 cents
Previous corresponding period
Interim dividend	10.00 cents	10.00 cents
Final dividend	11.90 cents	11.90 cents

The Record Date for determining entitlements to the dividend is 16 September 2024.

Data[#] 3 Limited Financial Report 2024 1

Appendix 4E (continued) for the year ended 30 June 2024

Brief explanation of the figures reported above

In a highly competitive technology market with subdued economic conditions, Data[#] 3 has achieved strong gross sales and profit growth, delivering record FY24 results. The company has also continued to enhance its financial position through strong cash flow and diligent management of its balance sheet.

Please refer to the attached audited Annual Financial Report for FY24 for the following information:

• consolidated statement of comprehensive income

• consolidated balance sheet

• consolidated statement of changes in equity

• consolidated statement of cash flows

• notes to the consolidated financial statements

Retained profits

Retained profits
	Current year	Previous year
	$’000	$’000
Retained profits at the beginning of financial period	56,373	51,268
Net profit attributable to members	43,311	37,030
Net transfers to and from reserves	-	-
Dividends provided for or paid	(37,902)	(31,925)
Other	-	-
Retained profits at end of financial period	61,782	56,373

Additional dividend information

Details of dividends declared or paid during or subsequent to the year ended 30 June 2024 are as follows:

Record date	Payment date	Type	Amount per	Franked	Total dividend
			security	amount
				per security	$’000
16/09/2024	30/09/2024	Final	12.90 cents	12.90 cents	19,957
14/03/2023	28/03/2024	Interim	12.60 cents	12.60 cents	19,492
15/09/2023	29/09/2023	Final	11.90 cents	11.90 cents	18,410

Total dividend per security (interim plus final)

Total dividend per security (interim plus final)
	Current year	Previous year
Ordinary securities	25.5 cents	21.9 cents
Dividend reinvestment plan
Not applicable.
Net tangible assets per security
	Current year	Previous year
Net tangible asset backing per ordinary security	$0.40	$0.34

Right-of-use assets accounted for in accordance with AASB 16 have been included in the calculation of net tangible assets.

Data[#] 3 Limited Financial Report 2024 2

Appendix 4E (continued) for the year ended 30 June 2024

Control gained over entities having a material effect

Not applicable.

Loss of control of entities having a material effect

Not applicable.

Details of aggregate share of profits (losses) of associates and joint venture entities

Not applicable.

Compliance with IFRS

The attached Annual Financial Report complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IFRS).

Commentary on the results for the period

The results for FY24 reflect another record performance, with basic earnings per share increasing by 16.9% to 28.0 cents, and total fully franked dividends increasing by 16.4% to 25.5 cents per share.

Please refer to the attached Operating and Financial Review for further information in relation to the results for the period.

Compliance statement

This report is based on financial statements that have been audited.

Signed:

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A M Gray Chairman

Date: 21 August 2024

Data[#] 3 Limited Financial Report 2024 3

Operating and Financial Review

Operational Overview

We are pleased to report record gross sales of $2.8 billion in FY24 and sales growth in line with the forecast Australian IT market growth rate.[1] In addition, we maintained the average gross margin earned on gross sales and delivered gross profit growth of 7.8% in FY24. We see this as a solid achievement considering the highly competitive markets in which we operated, together with the subdued economic conditions caused by higher interest rates, high inflation and global geopolitical conflicts during the financial year. In addition, some customers deliberated on non-discretionary IT spending this financial year, which resulted in fewer deals to compete for, and the year saw some competitors lower pricing to gain market share. Although we didn’t exceed market growth rates as we have in recent years, to continue to achieve growth while maintaining gross margins is a testament to Data[#] 3’s continuing value proposition and competitive advantages.

Our core business of connectivity, collaboration, modern workplace, end-user computing, multi-cloud and enterprise security offerings continues to align with customer priorities and underpins their continued investment in IT infrastructure, software and services.

We achieved growth across most customer sectors this financial year, including Government, Defence, Education and Mining. Geographically, we continued to expand in the ACT, Victoria, Western Australian and Fiji, while sales in New South Wales were relatively flat year on year given the particularly competitive local market.

Demand for our Security solutions remained strong as security was yet again our customers’ top priority in FY24. Growth in this area was underpinned by sales of Microsoft E5 and Managed Security Operations Centre (“SOC”) services, with customers focused on securing cloud services, incident response, planning and management and protecting and managing information and identities. In response to increasing demand, we opened our own SOC in Brisbane in July 2024 to meet the highest standards of data protection and sovereignty in delivering threat monitoring, detection and response. We expect this to present further opportunities in FY25 as protection against the threat of cyber attacks continues to be our customers’ number one priority. Having a local SOC provides comfort to customers who prefer their operations to be supported locally by an Australian company.

Some key infrastructure projects completed this financial year include the Sydney Football Stadium, Stadium Australia, Queens Wharf and Griffith University. Our expertise in the design and implementation of both wired and wireless networking equipment at large sites such as hospitals, stadiums and universities means we are well placed to capitalise on upcoming opportunities, such as infrastructure projects for the 2032 Brisbane Olympics, and continue to build our large project pipeline.

The launch of ChatGPT during FY23, followed by Copilot for Microsoft 365 (“Copilot”) this financial year, has sparked widespread interest in the future of generative AI (“Gen AI”).

We are leading the Australian market for Copilot services and licenses and were one of only 600 organisations globally to have taken part in the Copilot Early Adopter’s Program in FY24. We have begun helping our customers understand how they can use and apply Gen AI with our Copilot Readiness Assessments, while also helping them minimise any potential risks surrounding data governance and security through our specialised consulting services.

AI is complementary to our solutions and will be infused across all our vendor offerings, providing opportunity right across our solutions. This will benefit our solutions from device to cloud in infrastructure, software and services, providing customers with compelling reasons to upgrade to the latest solutions to gain efficiencies and competitive advantage. Like our customers, we also continue to adopt and use AI, including order automation, invoice automation, data analysis and insights and our internal use of Microsoft Copilot.

Operating results by functional area

The core Data[#] 3 business is structured around three functional areas – Software Solutions, Infrastructure Solutions and Services – operating across eight regions. Business Aspect operates independently but within the Data[#] 3 structure.

Pleasingly, we experienced strong gross sales growth in Software Solutions, Managed and Maintenance Services and moderate growth in Project Services but saw a decline in Infrastructure Solutions, Consulting and People Solutions, as outlined in the following sections.

1 Gartner: Forecasts IT spending in Australia to Grow 7.8% in 2024

Data[#] 3 Limited Financial Report 2024 4

Operating and Financial Review (continued)

Gross Sales trend by functional area ($M)

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3,000
2,500
2,000
Services
1,500
Software
1,000 Infrastructure
500
-
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
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Infrastructure Solutions

The Infrastructure Solutions business provides technology that enables our customers to achieve a broad range of business outcomes. It provides notebook computers through to networking, collaboration, data centre, and multi-cloud solutions. The business helps customers procure industry-leading solutions and maximise returns from infrastructure investments, utilising Data[#] 3’s warehouses, digital customer platforms, and customer success teams.

Infrastructure Solutions gross sales of $547.4 million for FY24 was down 3.6% on the prior year, predominately due to a decline in sales of networking hardware and a slight slowdown in customer decision making on larger contracts.

While our FY24 Infrastructure result was negatively impacted by customers ordering in advance of requirements in FY23 following the supply chain challenges experienced in recent years, we are seeing improved sales of networking hardware into FY25. Our Infrastructure sales are also linked to and supplemented by sales of maintenance support contracts, particularly those under Enterprise Agreements, and which are reported as Services sales. The combined product and maintenance business grew by 2% in FY24.

End user computing sales were up 3% this financial year, with many customers approaching their renewal period and upgrading devices to facilitate Windows 11 upgrades. Customers continue to assess their future requirements, including for newly released AI enabled devices. We see significant opportunity in this space heading into FY25.

Sales of collaboration tools increased on the prior year, reflecting significant opportunities to enable the integration of vendor products, such as Cisco with Microsoft.

There has been a gradual shift from capital expenditure to As-a-Service software purchasing models, as customers opt for flexibility and better cash flow management. This increases recurring revenue and customer retention but can spread profitability over a longer time period.

Customers continue to look at ways of optimising their IT environments and we are seeing a continuing shift by customers from purely on premise or public cloud to a hybrid or multi-cloud environment in preparation for their adoption of artificial intelligence (“AI”) and to reduce the significant costs of public cloud computing. This evolution provides further opportunities for us to design, procure and implement hardware, software and services to enable our customers’ success.

Data[#] 3 retained its position on the HP Global Partner Advisory Board, Microsoft Surface Global Advisory Board and remained a member of the Cisco, HPE/Aruba, Dell and Lenovo Advisory Boards for Asia Pacific during FY24.

Data[#] 3 Limited Financial Report 2024 5

Operating and Financial Review (continued)

Software Solutions

The Software Solutions business helps customers maximise business value from their software investments through effective procurement, deployment, management and optimisation.

The business achieved solid gross sales growth in FY24 of 11.0% to $1.83 billion, as we retained our market leading position in Public Sector verticals and gained market share in other sectors, particularly Education.

Customers continue to invest in public cloud offerings with subscription services for Microsoft Azure and Office 365 delivering consistent and annuity-based growth, particularly in security.

Software Advisory Services, including Software Asset Management services and consulting, have become increasingly popular as customers seek to drive efficiency across their software portfolio. Software Advisory provides excellent links between the customer’s software licensing agreements and Data[#] 3’s Project Services, Maintenance and Managed Services, which help with the deployment, adoption, and management of the software.

Packaged services offerings are being attached to software sales and drive customer outcomes and loyalty throughout the product lifecycle.

Our partnerships with major global vendors continue to strengthen, as we are rewarded and recognised for continuing to deliver on customer success and overall long-term customer experience through global vendor awards and incentives earned under the vendor incentive programs.

Services

The Services function includes a wide portfolio of services and capabilities, broadly categorised as follows:

• Consulting (through Business Aspect) for management and information technology consulting services

• Project Services for the design and implementation of technology solutions

• Maintenance Services for the provision of vendor and Data[#] 3 delivered hardware support under annuitybased contracts

• Managed Services for the outsourcing of the management of part or all of a customer’s information technology functions and processes, and

• People Solutions for the provision of contractors and permanent staff.

In aggregate, the Services business achieved gross sales growth of 9.6% to $375.9 million in FY24, predominately driven by growth in Project Services, Maintenance and Managed Services as outlined below.

Consulting

Our Business Aspect team has extensive consulting skills, experience and expertise in digital transformation, cloud strategy, architecture, security, risk, control, planning, design and governance.

The FY24 consulting market was competitive with generally reduced demand, however we performed well in the higher education, healthcare and utilities sectors. Gross sales were down on prior year by 5.5% to $31.4 million in FY24, with some delayed customer decision making and some customers choosing to hire permanent consultants. The financial impact of the decline in sales was offset by cost reductions and internal efficiencies, which improved net profitability on the prior period.

Project Services

Our Project Services business continued to deliver transformation projects for customers this year, with excellent growth in NSW and Victoria and solid momentum into FY25. Opportunities with networking and data centre projects and increasing interest in Microsoft CoPilot for M365 drove demand for professional services this financial year.

Gross sales increased by 6.0% to $79.0 million in FY24, with average utilisation rates above 80% and a solid pipeline of projects heading into FY25. Margins and profitability continue to improve, with our highly skilled and growing Professional Services team reducing the need for third party delivered services.

Data[#] 3 Limited Financial Report 2024 6

Operating and Financial Review (continued)

Managed Services

We onboarded a number of new customers and renewed and expanded the services provided to existing customers in our Managed Services business this financial year. As customers are faced with managing more complex, multi-cloud environments and have increased concern about cybersecurity threats, they are seeking specialised skillsets which is driving an increased demand for managed services.

We are pleased to report that Managed Services gross sales increased by 11.6% to $43.9 million in FY24. The overall profitability of the business also improved and should continue to do so as we scale the business up and our most recent contracts mature and in turn become more profitable.

Customer attrition was low, and the small number of contract terminations were driven by customers bringing services in-house or due to acquisition. Our average contract tenure reduced from 9 years to 7 years because of the continued growth in new business.

We continue to build our capability and expertise in Managed Services following our recertification under the Microsoft expert MSP program and ISO 27001 accreditation across more of the operations’ locations. We are also building out our Solution offerings in the areas of network management with Managed Software Defined Wide Area Networking (SDWAN) and Secure Access Service Edge (SASE) solutions.

Maintenance Services

Our Maintenance Services business achieved strong growth in gross sales of 26.8% to $158.5 million in FY24, as customers move from traditional software support to Enterprise Agreements. These agreements enable organisations to buy, consume and manage their technology across the software portfolio with a three-to-fiveyear cross platform agreement. We are increasingly seeing a shift to these types of support agreements by vendors, such as Cisco and Palo Alto.

People Solutions

Following its peak in FY23, the contingent labour market has transitioned to a more balanced state, impacted by changing cost management priorities by customers. These factors presented growth challenges for our People Solutions business during FY24, with gross sales down on prior year by 11.6% to $60.2 million.

Following a material reduction in demand for contingent labour by one of our key customers this year, we focused on rebuilding pipeline with strategic onshore and offshore augmentation solutions. Demand for labour in the technology sector has softened with improved resource availability, but we are still facing skill shortages in some key specialist areas.

Financial Overview

Change in accounting policy – revenue recognition for contracts with customers

During the year, the group undertook a detailed review of its software licensing and vendor delivered maintenance agreements to reassess whether it is acting as a principal or agent under these agreements. This was in response to updated guidance released for software resellers in 2022 on the application of the revenue accounting standard (AASB 15). The review resulted in a change to the company’s revenue accounting policy to present software licensing and vendor-delivered maintenance support revenues on a net basis, including an adjustment of comparatives. This is a statutory presentation change only, and the group will continue to measure its operational performance in terms of Gross Sales, with both Gross Sales and statutory revenue to be reported to ensure comparability with historical reporting and to align with how the company internally measures performance. A detailed explanation of the changes to revenue recognition and a reconciliation by business unit of revenue recognised in the Consolidate Statement of Comprehensive Income to Gross Sales is provided in Note 3 of the financial statements.

A summary of non-IFRS adjustments is also provided in the following table:

Data[#] 3 Limited Financial Report 2024 7

Operating and Financial Review (continued)

	FY24	FY231
	$'000	$'000
Statutory revenue – Product	549,364	553,486
Statutory revenue – Services	256,382	255,139
Interest income	9,690	3,508
Other income	247	362
Total statutory revenue	815,683	812,495
Non-IFRS adjustments – Product	1,828,909	1,664,171
Product Gross Sales2	2,378,273	2,217,657
Non-IFRS adjustments – Services	119,526	87,904
Services Gross Sales2	375,908	343,043
Total Gross Sales2	2,754,428	2,561,062
Change in inventory	312	13,665
Purchase of goods	414,630	413,876
Non-IFRS adjustments – Product	1,828,909	1,664,171
Product Gross Profit	134,422	125,945
_Product Gross Margin_2	5.7%	5.7%
Employee and other direct contractor costs	88,083	99,148
Other cost of sales Services	32,877	31,285
Non-IFRS adjustments – Services	119,526	87,904
Services Gross Profit	135,422	124,706
_Services Gross Margin_2	36.0%	36.4%

1. The prior year has been adjusted to reflect the change in revenue accounting policy to present software licensing and vendor-delivered maintenance support contract revenues on a net basis as agent.

2. Gross Sales and Gross Margin are non-IFRS financial measures and are not presented in accordance with Australian Accounting Standards. Gross Sales represents gross proceeds from the sale of goods and services, both as agent and principal. Total Gross Sales includes Product and Services Gross sales and other income. Refer to Note 3 for further information. Gross Margin represents Gross Profit relative to Gross Sales.

While the group only has one reportable segment for financial reporting purposes, it aggregates financial information from the Statement of Comprehensive Income as Product and Services when reporting on its operating performance to provide greater insights to Financial Report users.

FY24 Financial Results

The Data[#] 3 group delivered another solid financial performance in FY24, with record gross sales of $2.8 billion. This represented growth of 7.6% – in line with the forecast Australian IT market growth rate. This growth was underpinned by the continued investment by our customers in enterprise security, networking, storage, multicloud and digital transformation. In addition, we saw strong growth in Software Solutions and growth across most of our Services business, in line with our strategic priorities.

We achieved solid overall growth in sales of Product (Software Solutions and Infrastructure Solutions) and Services of 7.2% and 9.6% respectively; however, performance was mixed by business area and region, as outlined in the ‘Operating results by functional area’ section.

Total statutory revenue increased by 0.4% to $815.7 million following the adjustment relating to our change in revenue recognition accounting policy for software licensing and vendor delivered maintenance support contract revenues as mentioned earlier. The decline in Infrastructure revenues recognised on a gross basis as principal, was offset by higher Services revenue and increased agency fees and incentives recognised on a net basis in relation to software licensing and vendor delivered maintenance sales.

Data[#] 3 Limited Financial Report 2024 8

Operating and Financial Review (continued)

Recurring revenue increased from 65% to 67%, reflecting a gradual shift by our customers to multi-year subscription and As-a-Service purchasing models, in addition to growth in longer term contracts (typically three to five years) in our Managed and Maintenance Services businesses. Recurring revenue increases the predictability of our earnings, and longer-term customer relationships are generally more profitable.

We delivered record interest income of $9.7 million (FY23: $3.5 million) as a result of our diligent management of working capital and higher interest rates.

Total gross profit increased by 7.8% to $270.1 million in FY24, and our total gross margin of 9.8% was consistent with the prior year - a solid outcome given the highly competitive market in which we operated this financial year. Product gross margins were stable at 5.7% and Services margins decreased slightly from 36.4% in FY23 to 36.0% in FY24, however we are pleased to report that the net profitability of our Services business improved on the prior financial period.

Gross sales and other income ($M) Total gross profit ($M)

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2,764.1 270.1
2,564.6 250.7
2,193.0 218.2
1,956.2 188.0 194.7
173.9
1,625.9
1,415.6
FY19 FY20 FY21 FY22 FY23 FY24 FY19 FY20 FY21 FY22 FY23 FY24
----- End of picture text -----

Vendor rebates earned relative to gross sales were consistent with the prior year and are reflective of our continued alignment with major vendors and the high standards of service we provide our customers.

Internal staff costs increased by 7.6% in FY24, driven by a 2% increase in headcount and general remuneration increases in line with the market. The increase in permanent headcount was comprised predominately of billable Services staff, in addition to some specialist Infrastructure sales roles to drive strategic growth.

Other operating expenses increased by 12.5% from $24.3 million to $27.4 million as a result of general price rises, such as insurance and software licensing, increased travel relative to higher sales activity and internal investments in systems. Spend on IT projects increased in FY24 as we completed work to enhance and consolidate e-commerce platforms, implement a new payroll system and customer success platform, and uplift cyber security, among others. These projects will realise either a financial benefit in the form of increased sales or cost reductions, or a non-financial benefit in the form of risk reduction over several years.

Our internal cost ratio (staff and operating expenses as a percentage of gross profit) increased slightly from 80.3% to 80.6%, due to the higher costs of operating in a competitively priced market, and continued investment in people and systems. This includes our Managed Services business, which is expected to improve its margins as contracts mature and we achieve greater scale. Our goal remains to achieve a steady improvement in our internal cost ratio with a continued focus on gaining operating efficiencies through system and process improvements, in addition to scaling up our higher margin Services business over time.

The group’s total profit before tax increased by 16.6% from $53.2 million to $62.1 million, with the pre-tax profit margin measured on gross sales increasing from 2.08% to 2.25%. This represented basic earnings per share of 28.00 cents, an increase of 16.9% on the prior year.

The Board declared fully franked dividends of 25.5 cents per share for the full year, an increase of 16.4% and representing a payout ratio of 91.1%.

Return on equity was 57.8% (FY23: 54.2%).

Data[#] 3 Limited Financial Report 2024 9

Operating and Financial Review (continued)

Profit after income tax ($M)

Basis earnings per share & dividends per share (cents)

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----- Start of picture text -----

28.00
25.2
23.96
21.90
19.61
43.3 17.90
16.51
37.0 15.35 15.00
13.90 EPS
30.3
11.76
23.6 25.4 10.70 DPS
18.1
FY19 FY20 FY21 FY22 FY23 FY24 FY19 FY20 FY21 FY22 FY23 FY24
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Balance sheet and cash flow

The company’s FY24 balance sheet remains strong and debt-free, with inventory and trade receivables returning to their pre-pandemic normal.

The cash balance closed the year at $276.4 million, down on the prior year closing balance of $404.8 million due to the timing of customer receipts prior to period end. This reflects our seasonal temporary cash surplus at 30 June each year, with payments to suppliers for June sales payable in the first quarter of the next financial year.

Trade receivables and payables are relatively high at year end due to the typical May/June sales peak. Trade and other receivables at 30 June 2024 were $519.1 million and trade and other current payables were $704.4 million, reflecting the timing differences in the collections from customers and payments to suppliers around 30 June.

The key trade receivables indicator of average days’ sales outstanding (DSO) improved from 33 days in FY23 to 26 days in FY24, reflecting our ongoing focus on effective working capital management.

Total inventory holdings remained consistent with the prior financial period at around $19 million, following its return to pre pandemic normal levels in the second half of FY23. All inventory is committed to customer contracts; therefore, we carry a low risk of obsolescence.

The net cash outflow from operating activities was $86.2 million (FY23: $291.0 million inflow), predominately due to the traditional May/June sales peak and the spike in collections before the end of June. These collections generate temporary cash surpluses which subsequently reverse after 30 June when the associated supplier payments are made, resulting in a material cash outflow in the first half. The prior year’s net cash flow from operating activities was inflated by the realisation of carried forward debtors and inventory caused by supply chain issues in the preceding years.

Performance by region

FY24 Gross Sales split by region (Total $2,754M):

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FIJI 0.4%
WA 12%
QLD 18%
SA 7%
TAS 2%
NSW 15%
VIC 19%
ACT 27%
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Data[#] 3 Limited Financial Report 2024 10

Operating and Financial Review (continued)

• Queensland – sales performance was relatively flat year on year, with some delays in Public Sector decision making and slight softness in the consulting market. This was offset by a solid performance from our Queensland Software Solutions business

• New South Wales – sales were in line with the previous financial period following reduced demand in a key People Solutions account and a highly competitive Infrastructure market; offset by solid growth in sales of software licenses

• ACT – achieved strong sales growth of 10%, underpinned by Public Sector software licensing renewals and growth across all lines of business

• Victoria – continued to gain market share with 8% sales growth in FY24 and growth across all lines of business, but predominately in Managed Services and Infrastructure Solutions

• Tasmania – delivered a strong result with 11% growth in sales, driven by Software Solutions and Services

• South Australia – achieved solid growth in sales of 8%, driven by increases across all lines of business

• Western Australia – continued its strong performance and achieved sales growth of 17% for FY24

• Fiji and the Pacific Islands – again achieved strong growth in sales through our key Software accounts, increasing 18% on the previous year.

People

We ended FY24 with 1,480 people in the group, up from 1,447 people at the end of FY23. This includes a combination of permanent, contracted and casual staff.

Some of our incredible people-related achievements in FY24 include the following:

• We were recognised as one of Australia’s Best Workplaces in Technology by Great Place to Work.

• Our staff satisfaction survey achieved a significant response rate, and 96% of our people agreed that Data[#] is an excellent company to work for and they would recommend Data[#] 3 to others in the industry.

• We achieved recognition as a HRD Employer of Choice for the ninth year in a row.

• Our annual voluntary turnover rate was below the industry average.

• Across our business, 26,000 hours of learning and training activities were completed by our people.

Vendor relationships and external awards

In FY24 we continued to strengthen our partnerships with key global vendors such as Microsoft, Cisco, HP, Adobe and Dell, in addition to many others. By aligning with these partners, we are capturing a significant proportion of the addressable market in large corporate and public sector organisations.

We finished the year in leading positions with our major vendor partners Microsoft, HP and Cisco.

Our major vendors prefer working with fewer, larger partners who are equipped and certified to provide customers with their full range of products in their target customer markets. Of particular note was Data#3’s renewal of the Microsoft Azure Expert Managed Service Provider certification in FY24. We are one of few certified partners in Australia and this certification underpins our ability to support and manage Microsoft Azure. This is complementary to our leading position with licensing customers for Azure in Australia and ensures we are well positioned to enable our customers to gain value from the Azure platform.

Customers also prefer to partner with an experienced solution provider such as Data[#] 3 that can deliver a full breadth of products and services, minimising the need for multiple suppliers.

In addition to major vendors such as Microsoft, Cisco, HP and Dell, we work with hundreds of other vendors such as Palo Alto, Veeam, Lenovo, Citrix, Mimecast, Fortinet and VMware. Our Vendor Management and Solutions teams regularly scan the market for new and emerging vendors that complement our existing solutions and offerings, while remaining focused on the vendors that best meet our customers’ requirements and strategic growth areas.

Increasingly the vendor channel programs are focusing on the adoption and usage of their technologies. Many vendor programs have a customer experience emphasis which focuses on the full lifecycle of their products combined with our specialist services. The programs are, therefore, promoting longer-term, ongoing customer engagement rather than short-term transactions. This translates into greater opportunities for organisations with services teams that are skilled in the associated technologies, such as Data[#] 3.

Each year we receive national and international recognition from our global partners, and we are delighted to have been awarded the following in 2024:

Data[#] 3 Limited Financial Report 2024 11

Operating and Financial Review (continued)

• Cisco Global Software Partner of the Year

• Microsoft Worldwide Surface Reseller Partner of the Year

• Microsoft ANZ Modern Work Partner of the Year

• HP Greater Asia Poly Partner of the Year

• Veeam ProPartner of the Year ANZ

• Palo Alto Networks’ Nextwave Partner of the Year

Cisco and Microsoft have over 60,000 and 400,000 partners globally, so for an Australian company to win global awards is a significant achievement.

Award recognition from our vendors shows that where Data[#] 3 invests, we succeed. This provides confidence to our customers that Data[#] 3 has the skill and competency to implement and manage their preferred vendor’s solutions.

Data[#] 3 is also the number one Microsoft security reseller in Australia and Asia and number five globally, so we are well placed to continue to grow our security practice in FY25.

Performance against strategic priorities

We have made pleasing progress on all our strategic priorities during FY24 as outlined below:

Solutions

We have continued to enhance our solutions to adapt to changing market demands. Every customer has a business strategy that includes digital technologies, and all digital technologies require a foundation of multicloud, networks and end-user computing and security.

FY24 saw another strong year of growth for our Software Solutions business, in addition to our Managed Services business, which are both aligned to our strategies of increasing recurring revenue and growing our Services business through our customer lifecycle solutions.

We refined and optimised our partnerships and alignment with key global vendors to maximise financial returns from vendor incentive programs and drive strategic growth this financial year. Our agility in adapting to changes in incentive programs, internal expertise in managing these programs, and alignment of our sales strategy with that of our vendors, means we are well placed to continue to maximise these returns and execute on our Solutions strategy in FY25.

Customer Experience

This strategic priority is focused on increasing our customer engagements across our Solutions lifecycle to drive customer outcomes and long-term profitability. We continued to build out our customer success digital platforms during FY24, and we enhanced and merged existing platforms to gain efficiencies, reduce costs and improve our customers’ user experience.

We successfully increased adoption and consumption engagements by leveraging customer data to drive targeted engagements and expansion within our existing customer base.

We worked jointly with our major vendors on embedding our data analysis into customer contracts and service level agreements, as commenced in the prior year. In addition, the lifecycle of services for our solutions continues to provide opportunities to expand our relationships with existing customers, as well as attract new ones.

People and Community

Our employee value proposition was enhanced so that we can attract, develop and retain the best talent. Our People Development strategy was focused this year on enhancing the capabilities of our workforce to meet the needs of our business and our customers, through the development of a three-year Workforce Plan. The Plan included initiatives such as the identification of our future skills requirements, a skills gap audit and the promotion of a culture of ongoing learning and development.

In addition, our People and Community strategic priority was focused on the development and enhancement of our Environment, Social and Governance (“ESG”) policies and practices to create positive social, environmental and economic returns. See the ESG section for further details.

Data[#] 3 Limited Financial Report 2024 12

Operating and Financial Review (continued)

Operational Excellence

This financial year we enhanced our operational efficiency by delivering a range of projects aimed at leveraging our digital platforms and data, optimising business processes, and driving innovation leveraging AI this financial year. This included our participation in the Microsoft Copilot Early Adopter program, which enabled us to not only test the internal benefits of its use, but also develop use cases to assist with our AI go to market strategy.

Other workstreams completed during FY24 under this strategic priority include the development of a knowledge base outlining our internal platform capabilities, development of a data governance policy, scoping the implementation of a data warehouse and analytics tools, and automations such as order and invoice processing.

FY25 Strategy and Outlook

Our Strategic Priorities for FY25 remain as follows:

• Solutions – accelerating Data[#] 3’s services

• People and Community – connecting Data[#] 3 with its people and the communities in which it operates

• Customer experience – differentiating Data[#] 3 through the experiences we deliver to our customers

• Operational excellence – connecting and simplifying Data[#] 3 to deliver an agile and efficient business.

Customer success is at the core of our strategy. We combine our innovative solutions, remarkable people and operational excellence to enable our customers’ success. This in turn provides exceptional performance for Data[#] 3.

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Our strategy enables customer business outcomes across solutions including Security, Connectivity, Cloud and the Modern Workplace - all infused with AI. We will execute this strategy in FY25 by evolving solutions and services which centre around our world leading vendors and that address customer challenges, while capitalising on the strengths of our core business.

Services are key to this approach as they ensure we are leveraging the great talent we have in our business to assist customers, particularly in areas where specialised skillsets are in high demand. Our Customer Experience strategic priority will help drive growth in our Services business by continuing to enhance the way in which we help customers use, adopt, and optimise technology to drive outcomes.

Our solution lifecycle approach ensures we are engaging with customers early and continuing to provide value right throughout the solution lifecycle.

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Data[#] 3 Limited Financial Report 2024 13

Operating and Financial Review (continued)

We will look to strengthen our partnerships with major global vendors in FY25 and align our investments, including actively investing in our people and solutions to address the rapidly changing solution landscape. Data[#] 3 has representation on a number of local and global advisory boards which provide feedback and early access to vendor strategy changes.

There is continued sales opportunity relating to AI and other industry high growth areas such as security, with AI now embedded across existing solutions, and not just available as a separate solution. We have seen the recent release of AI enabled PCs. Device and Server technology now incorporates Neural Processing Units (NPUs) specifically designed to enhance AI performance. AI provides opportunity for our Consulting, Professional Services, Customer Success and Managed Services teams as we assist customers to determine how AI can improve their business processes and information management while also providing data security and change management best practice.

We are expecting to see continued momentum in As-a-Service and recurring revenue solutions through FY25, ensuring customers have access to different consumption approaches.

Demand for end user devices will be driven by the need to support Windows 11, and AI-enabled edge, in addition to post-covid refresh cycles. Our Device as a Service offerings gained momentum in FY24, and we see this continuing into FY25.

Our Security practice will only strengthen as customers are challenged by ongoing cyber threats, in addition to security related challenges presented by their gradual adoption of AI.

Cloud and data centre will likely see growth in response to security and data concerns, and in determining how AI is best utilised in the right location for workloads and use cases. Sustainability will be a focus as customers navigate the increase in AI-enabled infrastructure, which can potentially be high in its environmental footprint. Vendors such as Microsoft and HP who are leading the way in sustainability practices will be an important influence on customer decision making.

We see continued engagement and coverage across all key verticals. Our strong government engagement will continue this year across all states, and we should see solid customer engagement across the Resources, Education and Healthcare sectors.

Our digital approach to sales and customer experience is increasing in adoption and maturity. We have actions in place to better connect our customers to our data and drive the right experience to optimise their environments. We’ve made investments in the supporting platforms which provide these services to ensure we have better leverage across our business and ensure a great customer experience for all customers.

There is some optimism that the challenging trading conditions caused by a highly inflationary and high-interestrate economic environment will ease early in calendar year 2025, resulting in improved consumer sentiment and a return to more normal levels of sales growth. Investments by the Public Sector in new infrastructure projects should also help to grow our pipeline across all lines of business.

The foreseeable risks (and any available mitigants) to achieving our short to medium-term financial growth aspirations, specific to Data[#] 3 and in addition to the general macro-economic risks that would impact most organisations, include the following:

• Major changes to customer and reseller sales strategies and vendor incentive programs that would negatively impact future profitability.

• Mitigant: Data[#] 3 works closely with vendors to stay abreast of any potential changes and adapts sales strategies and vendor management processes accordingly.

• Access to skilled technology labour to enable us to deliver contracted work and achieve growth in areas of strategic focus.

• Mitigant: Our talent attraction and retention policies, including staff benefits and people development initiatives.

• Any negative geopolitical influence on the region or supply chains. Mitigant: We work with vendors to expedite deliveries (where possible), utilise distributors with available stock, and provide customers with ongoing updates, as evidenced with the pandemic-related supply chain challenges.

• Delayed decision making due to state government elections.

• Mitigant: We work with Agencies in the lead up to the election to ensure customer requirements have been addressed prior to lock down periods and again after an election to ensure any technology requirements for Machinery of Government Changes are addressed.

Data[#] 3 Limited Financial Report 2024 14

Operating and Financial Review (continued)

• Government change in policy with regards to the use of contractors . Mitigant: We provide both contract resources and outcome-based project offerings. While some governments may prefer to reduce contractors in preference of employing full time staff, the limited access to skilled resources means outcome-based projects are still a solution for public sector customers.

Sustainability and ESG

Our vision is to harness the power of people and technology for a better future, and we are committed to a sustainable environment, social and governance (ESG) framework that makes a meaningful difference within our business and the local communities in which we operate.

We are pleased with the progress made on ESG initiatives in FY24, as outlined in our full Data[#] 3 FY24 ESG Report which will be released with our FY24 Annual Report.

Data[#] 3 ESG highlights for FY24 are as follows:

• Being named the APAC winner of Frost & Sullivan Institute’s Enlighted Growth Leadership Award for Best Practices Recognition in 2024

• Becoming a founding member of the Sustainability Tech Coalition

• Partnering with external sustainability consultants to continue to measure and refine our reported Greenhouse Gas Emissions, and establish an accurate emissions baseline

• Progressing the development of our Net Zero Strategy through the completion of a Climate Related Financial Disclosure (CRFD) Gap Assessment, and planning for a Climate Risk and Opportunity Assessment and Climate Scenario Analysis to be completed in FY25

• Partnering with Supply Nation and the Indigenous Literacy Foundation, and we began working on our Indigenous Procurement Policy

• Being named in the top 25 Australia’s Best Workplaces in Technology for 2024

• Installing solar panels at our logistics hub in Darra, Queensland

• Forming a new partnership with impact organisation SolarBuddy in the pursuit to fight energy poverty

Data[#] 3 Limited Financial Report 2024 15

Directors’ report

Your directors present their report on the consolidated entity consisting of Data[#] 3 Limited (the company) and the entities it controlled at the end of, or during, the year ended 30 June 2024. Throughout the report the consolidated entity is referred to as the group. “We”, “our”, or “us” refer in this report to the directors speaking on behalf of the group.

1. Principal activities

We provide information technology solutions which draw on our broad range of products and services and, where relevant, with our alliances with other leading industry providers. Our technology solutions are broadly categorised into the following areas:

• Cloud – highly secure data centre solutions to improve business efficiency, reduce costs and scale customers’ technology requirements in hybrid IT environments

• Modern Workplace – solutions to optimise our customers’ IT environment and assist them to realise the full value of their technology assets

• Security – solutions designed to help our customers navigate the complexities of cyber security and a changing threat landscape

• Data and Analytics – solutions designed to enhance visibility and control over customers’ data to enable them to make faster, more accurate business decisions

• Connectivity – solutions to enable customers to seamlessly connect to business networks and information – anywhere, any time and on any device

Our service capabilities include the following:

• consulting

• project services

• maintenance services

• managed services • recruitment

There were no significant changes in the nature of our group’s activities during the year.

2. Dividends

2. Dividends
	Cents	$’000
Finaldividend declaredfor FY24subsequent to yearend	12.90c	19,957
Dividends paid in the year:
Interim for FY24	12.60c	19,492
Final for FY23	11.90c	18,410
	24.50c	37,902

3. Operating and financial review

Information on the operations and financial position of the group and its business strategies and prospects is set out in the attached Operating and Financial Review, as follows:

	Page
Operational review	4
Operating results by functional area	4
Financial review	7
Performance by region	10
Our strategy and plan for FY25	13

Data[#] 3 Limited Financial Report 2024 16

Directors’ report (continued)

4. Business strategy

Our vision is to harness the power of people and technology for a better future.

For more information on our business strategy please refer to page 13 of the attached Operating and Financial Review.

5. Earnings per share

5. Earnings per share
	2024	2023
	Cents	Cents
Basic earnings per share	28.00	23.96
Diluted earnings per share	27.90	23.88

6. Significant changes in the state of affairs

There was no significant change in the state of the group’s affairs during the year.

7. Significant events after the balance date

The directors declared a dividend in relation to FY24 subsequent to year end (see item 2 above). No other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect

(a) the group’s operations in future financial years; or

(b) the results of those operations in future financial years; or

(c) the group’s state of affairs in future financial years.

8. Likely developments and expected results

Information on likely developments and expected results is included in the attached Operating and Financial Review on page 13.

9. Directors

The names and details of Data[#] 3 Limited’s directors are set out below. Mr R Anderson, OAM and Mr L Baynham were directors from the beginning of the year until 31 October 2023 and 1 March 2024, the respective dates they ceased to be directors. Mr Colledge was a director from 1 March 2024, the date of his appointment, and remains in office at the date of this report. All other directors were in office for the entire financial year and remain in office at the date of this report.

Names, qualifications, experience and special responsibilities

R A Anderson, OAM, BCom, FCA, FCPA ( Chairman, Non-executive Director until 31 October 2023) Independent non-executive director since 1997 and Chairman since 2000. Mr Anderson was formerly a partner with PricewaterhouseCoopers, the firm’s Managing Partner in Queensland, and a member of the firm’s National Committee. He was previously a member of the Capital Markets Board of Queensland Treasury Corporation and President of CPA Australia in Queensland.

During the past three years Mr Anderson also served as a non-executive director of one other public company: Lindsay Australia Limited (until 31 August 2021). Mr Anderson is also president of Guide Dogs Queensland.

Special responsibilities:

Chair of the Board (until 31 October 2023) Member of the remuneration and nomination committee (until 31 October 2023)

Data[#] 3 Limited Financial Report 2024 17

Directors’ report (continued)

9. Directors (continued)

L C Baynham, BBus (Honours), FAICD ( Managing Director until 1 March 2024)

Managing Director 2016 to 2024. Serving as Chief Executive Officer from 2014 until March 2024, Mr Baynham has served Data[#] 3 in various roles since 1994, including as Group General Manager for ten years. Prior to joining Data[#] 3, Mr Baynham gained a broad range of international IT industry experience. Mr Baynham is a graduate of the INSEAD Business School (Singapore) Strategic Management Academy and sits on a number of global advisory boards for key strategic partners representing Data[#] 3 and the wider Australian IT channel community.

B D Colledge BBus ( Managing Director from 1 March 2024)

Managing Director and Chief Executive Officer since March 2024. Brad has more than 30 years’ experience in the business technology industry and joined Data[#] 3 in 1995. Initially working to establish the Licensing Solutions business in Data[#] 3, Brad’s responsibility subsequently expanded to the broader Software Solutions business, Infrastructure Solutions business and Services businesses.

M R Esler, FAICD ( Non-executive Director)

Independent non-executive director since August 2019. Mr Esler has extensive experience in IT, first in a number of roles with IBM before joining the Data[#] 3 group in 1984 as an executive director. Mr Esler served as an executive director of Data[#] 3 Limited from 1997 to 2002, and performed senior management roles in Sales and Marketing, Operations and Supply Chain before retiring from his role as Queensland General Manager in 2014. Mr Esler has been actively involved in many IT-related forums and was a member of both the Asia Pacific and Worldwide Hewlett-Packard Global Partner Advisory Boards from 2011 until 2014. He has also been recognised as a 30-year Fellow of the Australian Institute of Company Directors.

Special responsibilities:

Member of the Audit and Risk Committee

S M Forrester AM, BA, LLB (Hons), EMBA, FAICD ( Non-executive Director)

Independent non-executive director since her appointment on 30 March 2022. Ms Forrester is a highly respected company director with an executive career spanning over 25 years in large professional services firms, covering law, finance, human resources and corporate governance. Bringing a wealth of experience having served as chair and non-executive director on multiple ASX listed companies for over a decade, Susan has a particular focus on strategy and governance within industries that are undergoing rapid change, often as a result of technology. Susan is a Member (AM) in the General Division of the Order of Australia for significant service to business through governance and strategic roles as an advocate for women. In addition, Ms Forrester serves on the Diligent Institute Advisory Board in New York as a corporate governance specialist representing Asia Pacific and is a Queensland Councillor with the AICD.

Ms Forrester is currently serving as non-executive chairs of Jumbo Interactive Limited (since 2020) and South Bank Corporation (since 2024), and as non-executive director of Plenti Group Limited (since 2020).

During the past three years Ms Forrester has also served as non-executive director of Over the Wire Holdings Limited (2015 - 2022).

Special responsibilities:

Member of the Remuneration and Nomination Committee

A M Gray, DUniv, B.Econ (Hons), FAICD (Chair (from 31 October 2023), Non-executive Director)

Independent non-executive director since August 2017. Mr Gray is Chairman of Sugar Terminals Limited, Deputy Chairman of Queensland Urban Utilities and a non-executive director of the Northern Australia Infrastructure Facility, the Royal Flying Doctor Service of Australia (Queensland), and Queensland Cricket. Previous senior executive appointments include Under Treasurer of the Queensland Treasury Department, Chief Executive Officer of the Queensland Competition Authority and the Queensland Independent Commission of Audit, Office Head (Queensland) at Macquarie Group and Executive Director with BDO.

During the past three years, Mr Gray has served as a non-executive director of one other public company: Sugar Terminals Limited (director since 2017).

Special responsibilities:

Chair of the Remuneration and Nomination Committee Member of the Audit and Risk Committee

Data[#] 3 Limited Financial Report 2024 18

Directors’ report (continued)

9. Directors (continued)

L M Muller, BCom, CA, GradDip App Fin and Inv, GAICD ( Non-executive Director)

Independent non-executive director since February 2016. Ms Muller has extensive experience in finance with a 30-year career in senior corporate financial management roles and professional advisory services roles. Ms Muller has previously held Chief Financial Officer (or equivalent roles) with RACQ, Uniting Care Queensland and Energex. Prior to those appointments Ms Muller worked for PricewaterhouseCoopers and with the Australian Securities Commission. Ms Muller is currently on the boards of Sugar Terminals Limited and Guide Dogs Queensland.

During the past three years, Ms Muller has served as a non-executive director of one other public company: Sugar Terminals Limited (director since 2017).

Special responsibilities:

Chair of the Audit and Risk Committee

Directors’ interests in shares and options

The movements during the reporting period in the number of ordinary shares in Data[#] 3 Limited held directly, indirectly, or beneficially by each key management person, including their personally related entities, are shown in section H of the Remuneration Report. There was no movement in shares held directly, indirectly, or beneficially from 30 June 2024 up to the date of this report. No directors hold options or share rights.

Meetings of directors

The number of meetings of our Board of directors (including meetings of the Board committees) held during the year, and the numbers of meetings attended by each director are shown below:

Name	Full meetings of directors	Full meetings of directors	Meetings of Audit	Meetings of Audit	Meetings of Remuneration	Meetings of Remuneration
			and Risk Committee		and Nomination Committee
	Meetings	Meetings	Meetings	Meetings	Meetings	Meetings
	attended	**held ***	attended	**held ***	attended	**held ***
R A Anderson	6	6	**	**	2	2
L C Baynham	11	11	**	**	**	**
B D Colledge	4	4	**	**	**	**
M R Esler	15	15	4	4	2	2
S M Forrester	15	15	**	**	4	4
A M Gray	15	15	4	4	4	4
L M Muller	15	15	4	4	**	**

* Number of meetings held during the time the director held office or was a member of the committee during the year.

** Not a member of the committee during the year.

10. Company secretary

Mr T W Bonner, LLB, BComm, AGIA, was appointed to the position of Joint Company Secretary in 2007 and has been sole company secretary since April 2023. He has served as our General Counsel since 2005 and is a member of the Queensland Law Society and the Governance Institute of Australia.

11. Shares under option and share rights

Unissued shares

As at the date of this report 573,648 share rights over ordinary shares were outstanding (573,648 at reporting date). Holders of share rights do not have any right to participate in any share issue of the company by virtue of the share rights. Refer to Note 22 for further information on the share rights outstanding.

Shares issued on settlement of share rights

During the year 104,880 fully paid ordinary shares in Data[#] 3 Limited were issued at a weighted average share price of $6.829 in settlement of vested share rights. Refer to Note 22 for further information on the share rights settled during the year.

Share options

No options were granted, lapsed, forfeited, settled or exercised during the year or up to the date of this report.

Data[#] 3 Limited Financial Report 2024 19

Directors’ report (continued)

12. Indemnification and insurance of directors and officers

During the financial year, we paid a premium to insure the directors and members of the executive management team (officers) against any claims raised or liability incurred by them in their Data[#] 3 role capacity. Subject to typical terms of D&O insurance policies, our directors and officers are also indemnified against any liability for costs and expenses incurred in defending civil or criminal proceedings. The amount of the premium is not disclosed in accordance with the terms of the policy.

13. Environmental regulation and performance

Our group is not subject to any particular and significant environmental regulations.

14. Rounding

The company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, relating to the “rounding off” of amounts in the directors’ report and financial report. We have rounded off amounts in the directors’ report and financial report to the nearest thousand dollars, or in certain cases to the nearest dollar, in accordance with that instrument.

15. Proceedings on behalf of the company

No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

The company was not a party to any such proceedings during the year.

16. Auditor independence and non-audit services

Pitcher Partners continued as our auditor in FY24. We employ Pitcher Partners on assignments additional to its statutory duties where the firm’s expertise and experience with our company are important. Fees we paid or owed to the auditor for these non-audit services during the year are included in the following table of total fees paid or payable to the auditor:

	2024 2023 $ $
Audit and other assurance services Audit and review of financial statements	183,500 175,000
Non-audit services Tax compliance services Other business advice	21,280 20,314 4,700 -
	25,980 20,314
Total remuneration	209,480 195,314

The Board of directors has considered the position and, in accordance with the advice received from the audit and risk committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The directors are satisfied that the provision of non-audit services by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• all non-audit services have been reviewed by the audit and risk committee to ensure they do not impact the impartiality and objectivity of the auditor

• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants (including Independence Standards) .

A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on the page following this Directors’ report.

Data[#] 3 Limited Financial Report 2024 20

Directors’ report (continued)

17. Remuneration report – audited

The remuneration report sets out the following, in accordance with section 300A of the Corporations Act 2001 (Corporations Act):

• A. Key Management Personnel (KMP)

• B. Role of the Remuneration and Nomination Committee

• C. Non-executive directors’ remuneration

• D. Executive remuneration strategy and structure

• E. Contractual arrangements with executive KMP

• F. KMP remuneration table

• G. The group’s performance

• H. Other statutory information

A. Key Management Personnel (KMP)

KMP are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the group, directly or indirectly, including any director (whether executive or otherwise) of the company.

The KMP disclosed for the financial year ended 30 June 2024 are detailed in the following table.

Name	Title	Period KMP (if less than full year)
Directors
Richard Anderson	Non-executive Director and Chairman	Retired 31 October 2023
Laurence Baynham	Managing Director/Chief Executive Officer	Resigned 1 March 2024
Brad Colledge	Managing Director/Chief Executive Officer	KMP from FY16; appointed MD/CEO 1 March 2024
Mark Esler	Non-executive Director
Susan Forrester	Non-executive Director
Mark Gray	Non-executive Director and Chairman	Non-executive director from FY18; appointed Chairman 31 October 2023
Leanne Muller	Non-executive Director
Executives
Michael Bowser	Executive General Manager – Services
Cherie O’Riordan	Chief Financial Officer
John Tan	Chief Customer Officer	From 1 March 2024

Following the appointment of Brad Colledge as Chief Executive Officer and Managing Director effective 1 March 2024, the company restructured its Executive Management Team and as a result John Tan, Chief Customer Officer, met the definition of KMP from 1 March 2024.

There have been no changes in KMP since the end of the reporting period.

Data[#] 3 Limited Financial Report 2024 21

Directors’ report (continued)

17. Remuneration report – audited (continued)

B. Role of the Remuneration and Nomination Committee

The Data[#] 3 Board of Directors (“the Board”) has delegated certain remuneration and nomination responsibilities to the Remuneration and Nomination Committee (RNC), a separate committee of the Board made up of nonexecutive directors. The ultimate responsibility for approval of remuneration and nomination policy matters rests with the Data[#] 3 Board.

In relation to remuneration the RNC is responsible for reviewing the following:

• Data[#] 3’s remuneration, recruitment, retention and termination policies for senior executives

• superannuation arrangements

• the remuneration for non-executive directors

The RNC has the authority to engage independent counsel and other advisers as it determines necessary to carry out its duties. The RNC seeks input regarding the governance of KMP remuneration from the following sources:

• shareholders

• RNC members

• external remuneration consultants

• tax advisors and lawyers

• managers within the group

C. Non-executive directors’ remuneration

Non-executive directors receive a board fee and additional fees for chairing the Board or participating in committees of the Board. Non-executive directors do not receive bonus payments or share options and are not provided with retirement benefits other than statutory superannuation.

Board fees are reviewed annually, considering the level of fees paid to non-executive directors of other publicly listed Australian companies of similar size and industry and the specific requirements for a Data[#] 3 Board member.

The maximum annual total directors’ fee amount approved by the shareholders at the Annual General Meeting on 27 October 2022 is $900,000. Board fees are allocated as follows (inclusive of superannuation):

Fees	From 1 January 2023
	$
Base fees
Chair	173,000
Other non-executive directors	105,000
Additional fees
Chair of anyformal committee of the Board	12,000

From the retirement of Richard Anderson on 31 October 2023, the Board is composed of five directors (four nonexecutive directors and the Managing Director/CEO). All non-executive directors enter into a letter of appointment with the company. The letter sets out the expectations of the appointment, summarises the Board policies and terms, including remuneration, relevant to the role of the director.

Data[#] 3 Limited Financial Report 2024 22

Directors’ report (continued)

17. Remuneration report – audited (continued)

D. Executive remuneration strategy and structure

The Board’s objective in relation to remuneration policy is to achieve the following:

• set remuneration at levels that are intended to attract and retain executives capable of managing our operations, achieving our strategic objectives, and increasing shareholder wealth

• motivate senior executives to pursue the long-term growth and success of Data[#] 3

• demonstrate a clear relationship between senior executives’ performance and remuneration

• consider prevailing market conditions

• be reflective of the group’s short-term and long-term performance objectives

• • be transparent and acceptable to shareholders

Executive compensation packages include a mix of fixed and variable remuneration, and short and long-term performance-based incentives. Short-term incentives are set at a level designed to encourage high performance without creating an environment that promotes undue risk taking. Long-term incentives are assessed over a three-year period and are designed to achieve long-term growth in shareholder returns.

The group’s remuneration framework is set out below.

Element	Purpose	Performance metrics	Proportion of target **compensation **	Changes for FY24
Annual fixed remuneration (FR)	Provide a competitive market salary, including superannuation and non-monetary benefits	Requirements of position description	CEO: 58% Former CEO: 64% CFO: 54% Other execs: 54-59%	Reviewed in line with market position
Short-term incentives (STI)	Reward for current year performance	Net profit targets (before tax and STI expense), individual performance	CEO: 27% Former CEO: 26% CFO: 22% Other execs: 26-35%	None
Long-term incentives (LTI)	Alignment to long- term shareholder value	Three-year cumulative EPS targets and achievement of group strategic priorities	CEO: 15% Former CEO: 10% CFO: 24% Other execs: 6-20%	None

Annual fixed remuneration (FR)

Fixed executive remuneration comprises a combination of cash and non-cash benefits at the executive’s discretion, plus statutory superannuation. There are no guaranteed fixed remuneration increases included in any executives’ contracts. FR is reviewed annually or on promotion and is benchmarked against remuneration for comparable roles at other publicly listed Australian companies of similar size. The RNC aims to position executives at the median of the benchmark, with flexibility to consider the position and responsibilities of each executive. Exceptions are managed separately for occasions where particular expertise must be retained or acquired.

Short-term incentives (STI)

Incentives under the group’s current STI plan are at-risk components of remuneration for executives provided in the form of cash. Under the plan executives can earn an annual cash bonus if predefined targets are met. The STI is linked to the achievement of financial and non-financial objectives that are relevant to meeting the group’s business objectives. A major part of the STI is determined by the actual performance against planned group and divisional profit targets relevant to each individual. A smaller portion of the STI is set with reference to the executive’s non-financial performance objectives which are agreed annually. The structure of the short-term incentive plan is set out below.

Data[#] 3 Limited Financial Report 2024 23

Directors’ report (continued)

17. Remuneration report – audited (continued)

D. Executive remuneration strategy and structure (continued)

Variable executive remuneration – the short-term incentive (STI) plan

Feature		Description	Description	Description
Purpose		The STI plan aims to provide an incentive for executives to deliver and outperform annual business objectives that will lead to sustainable, superior returns for shareholders. The target STI is composed of financial and non-financial elements as follows: • Managing Director/CEO–70% financial and 30% non-financial • Executive General Manager – Software, Infrastructure & Services–71% financial and 29% non-financial (note: this role ceased on 1 March 2024, the date Mr Colledge was promoted to CEO/MD) • Executive General Manager – Services–74% financial and 26% non-financial • Chief Financial Officer–75% financial and 25% non-financial. • Chief Customer Officer–91% financial and 9% non-financial. Using a profit target for the financial component ensures variable reward is only available when value has been created for shareholders and when profit is consistent with the business plan. Profit targets are based on the group’s overall result as well as an individual’s business unit result, where applicable.
		individual’s business unit result, where applicable.
Award opportunities		Role Managing Director/CEO	Base offer 46% of total fixed remuneration	Maximum offer 62% of total fixed remuneration
		Former Managing Director/CEO	40% of total fixed remuneration	54% of total fixed remuneration
		Executive General Manager – Software, Infrastructure & Services	59% of total fixed remuneration	78% of total fixed remuneration
		Executive General Manager – Services	48% of total fixed remuneration	66% of total fixed remuneration
		Chief Financial Officer	41% of total fixed remuneration	56% of total fixed remuneration
		Chief Customer Officer	59% of total fixed remuneration	86% of total fixed remuneration
Performance metrics		For the financial component of the STI, the STI is earned based on the following: ▪targets set equal to budgeted net profit before tax plus bonus value ▪bonuses are earned in linear proportion to the profit target achieved – for example, achievement of 90% of the financial target will equate to earning 90% of the financial STI bonus and so on up to a maximum of 150% achievement of the financial target. For the non-financial component of the STI, the STI is earned based on the individual’s achievement against personal performance objectives, which are aligned to the group’s annual strategic goals, and which include sustainability.
Award determination and payment		Financial component – calculated and paid subsequent to the end of each quarter. Non-financial component – calculated and paid subsequent to the end of each half year. Payments are made in cash net of PAYG withholding.
Cessation of employment		Employment agreements and remuneration policies set out how STIs are managed on termination of employment. Depending on the reason for termination – resignation, termination for cause, or redundancy – STIs have different treatment (including pro-rata treatment or forfeiture of future STI entitlements).
Board discretion		The Board has discretion to adjust remuneration outcomes up or down to prevent any inappropriate reward outcomes, including reducing (down to zero, if appropriate) any STI awards.

Data[#] 3 Limited Financial Report 2024 24

Directors’ report (continued)

17. Remuneration report – audited (continued)

D. Executive remuneration strategy and structure (continued)

Long-term incentives (LTI)

Executives may be invited to participate in the group’s LTI plan at the Board’s discretion. LTI are at-risk components of remuneration for executives provided in the form of equity in the company to ensure executives:

• consider the achievement of longer term financial and strategic objectives,

• hold a stake in the company,

• align their interests with those of shareholders, and

• share risk with shareholders.

The LTI is based on performance rights that vest based on assessment against group objectives. The measurement period is three years, and the measure used is as deemed best by the Board to drive value creation for shareholders. The structure of the LTI plan is set out in the following table.

Data[#] 3 Limited Financial Report 2024 25

Directors’ report (continued)

17. Remuneration report – audited (continued)

D. Executive remuneration strategy and structure (continued)

Variable executive remuneration – the long-term incentive (LTI) plan

Feature	Description
Purpose	The aim of the LTI remuneration element is to provide compensation based on earnings per share (EPS) performance by Data#3 Limited, as the Board believes EPS is the best measure to drive long-term value creation for shareholders given the specific circumstances of the company.
Form of equity and exercise price	The LTI plan is in the form of a performance rights plan. The rights are subject to vesting, and each right entitles the holder to one ordinary share in Data#3 Limited for no consideration. There is no entitlement to dividends during the measurement period.
Award allocation	FY24 offers Former MD/CEO: nil; Executive General Managers and CFO: $150,000 each. The award value was divided by the relevant volume weighted average share price for the five trading days following the release of the FY23 audited financial statements to determine the number of performance rights granted.
Measurement period	Three years unless otherwise determined by the Board. FY24 offers – Three years from 1 July 2023 to 30 June 2026.
Vesting conditions	Vesting of the rights is based on three-year cumulative EPS performance and assessment of strategic priorities execution against rolling three-year strategic targets. The Board establishes a three-year cumulative EPS target taking into account historical financial performance and future growth predictions (including forecast economic conditions and other market factors). The cumulative EPS target for the LTI is not disclosed as this is considered sensitive information. Vesting of the rights is based on a sliding scale of cumulative EPS performance and do not exceed 100%. Performance rights that do not vest will lapse.
Conversion of vested performance rights	Vested rights will be settled via the issue of ordinary shares within 60 days following release of the FY26 financial report, except where the Board exercises its discretion to settle in the form of cash.
Cessation of employment	Under the plan performance rights do not vest until the end of the relevant three-year period. Cessation of employment during this period will cause the performance rights to lapse unless the Board exercises its discretion and determines otherwise, such as in the case of retirement, injury, disability, death or redundancy.
Board discretion	The Board retains discretion to adjust the EPS performance condition to ensure participants are not penalised nor provided a windfall benefit arising from matters outside of management’s control. The Board also has discretion over the vesting and settlement of performance rights in the event of a change in control of the company.

Assessing performance

The CEO is responsible for assessing the performance of KMP who report to him against key performance indicators (KPIs), and the Board assesses the performance of the CEO. Performance assessments are based on detailed performance evaluations, business unit results, the earnings per share result, and verifiable data such as data from independently run surveys to ensure assessments are fair.

Data[#] 3 Limited Financial Report 2024 26

Directors’ report (continued)

17. Remuneration report – audited (continued)

D. Executive remuneration strategy and structure (continued)

Independent advice

When required, the Board or RNC obtains independent advice from remuneration consultants on the appropriateness of the group’s executive and non-executive director remuneration framework.

Advice was sought from Crichton & Associates in the second half of FY24. The advice provided has been considered in relation to remuneration reviews for the Board and executive management team for FY25.

E. Contractual arrangements with executive KMP

A summary of contractual arrangements with the CEO and executive KMP is set out below.

Component	CEO1 Other Executive KMP
Fixed remuneration	Current – $560,000 plus super Range of $309,000 to 387,000
	Former – $655,601 plus super
Contract duration	Ongoing contract Ongoing contract
Required termination notice by individual/employer	Current – six months2 Former – six months Three months
Post-employment restraint of trade	Current – six months Former – twelve months Three months
Termination of employment (without cause)	• Entitlement to pro rata annual STI. • At the Board’s discretion, unvested LTI may remain on foot subject to achievement of the performance hurdles at the original date of testing
	(on a pro rata basis for each full year of performance).
	• The Board has discretion to award a greater or lower amount of either
	incentive.
Termination of employment (with	• Entitlement to pro rata annual STI.
cause)	• Unvested LTI will lapse.
	• Vested and unexercised LTI can be exercised in accordance with the
	terms of the LTI plan.
Termination of employment by the individual (resignation)	• Entitlement to pro rata annual STI. • Unvested LTI will lapse.
	• Vested and unexercised LTI can be exercised in accordance with the
	terms of the LTI plan.
Non-financial benefits	Car park, laptop, mobile phone, salary continuance insurance, business
	subscriptions

Data[#] 3 Limited Financial Report 2024 27

Directors’ report (continued)

17. Remuneration report – audited (continued)

E. Contractual arrangements with executive KMP (continued)

1. Mr Baynham announced his retirement and tendered his resignation from the CEO/MD position on 30 October 2023 to take effect 1 March 2024. Mr Baynham’s last day as KMP was 1 March 2024. The company elected to make a termination payment in lieu of notice and pay out his leave entitlements on the basis of what would have been earned if he had remained employed until such leave entitlements had been exhausted (calculated as at 25 November, 2024). On that basis the Board approved payment of his full FY24 STI based on the average of the last three years’ performance for FY21-23, and the Board confirmed entitlement to the FY22-24 LTI share rights that are due to vest subsequent to FY24, as set out in the table below.

Grant date of share	Number of	Treatment
rights tranche	rights
30 November 2021	47,067	100% vesting upon achievement of cumulative EPS target for the three years ending 30 June 2024.

Vested rights will be settled via the issue of ordinary shares within 60 days following release of the FY24 financial report.

The termination payment for Mr Baynham set out in the KMP remuneration table in section F comprises the following:

Pay element	$
Long service leave entitlement	331,154
Annual leave entitlement	134,747
STI bonus(exgratia)	95,373
	561,274

Ex gratia share-based termination benefit for Mr Baynham

The Board exercised its discretion in relation to the retirement of a long-standing and high performing executive to provide Mr Baynham with the following termination benefit:

• a) That up to two-thirds of the FY23-FY25 LTI share rights issued on 18 November 2022 will vest upon achievement of the cumulative EPS target subsequent to FY25 (given 50,722 rights were issued, a maximum of 33,815 will vest).

• b) Up to 15,325 ordinary shares to be purchased on market subject to achievement of the cumulative EPS target applicable to the FY24-FY26 LTI shares granted on 31 October 2023 to other KMP, with a threeyear vesting period. The number of shares is equal to one third of the number of rights that Mr Baynham would have been granted under the LTI plan had he not resigned.

In accordance with the plan rules, the Board has discretion to maintain the LTIs on issue notwithstanding the period of employment ending prior to the vesting date.

1. Mr Colledge was promoted to CEO/MD on 1 March 2024 from his previous position of Executive General Manager – Software, Infrastructure & Services.

Data[#] 3 may terminate Mr Colledge’s employment agreement for cause by providing the minimum statutory notice set out in the Fair Work Act 2009 or minimum three months (circumstance dependent).

Data[#] 3 Limited Financial Report 2024 28

Directors’ report (continued)

17. Remuneration report – audited (continued)

E. Contractual arrangements with executive KMP (continued)

Previous KMP

Mr B Hill, the previous CFO, announced his retirement in November 2022. His successor, Ms O’Riordan, commenced employment on 30 January 2023; Mr Hill transitioned his CFO duties to her, officially finishing as a KMP on 31 March 2023, with his continuing role as Outgoing CFO whilst largely on annual or long service leave. Mr Hill’s final day of employment was 8 January 2024. In addition to Mr Hill’s Fixed Remuneration (which remained consistent with FY23), the Company provided STI remuneration payments of $157,352.60 (gross) on his retirement.

Discretion exercised under the Long-Term Incentive Plan for Mr Hill

The Board exercised its discretion in relation to the retirement of a long-standing and high performing executive to provide Mr Hill with the following termination benefit:

• a) That up to two-thirds of the FY22-24 LTI share rights issued on 30 November 2021 will vest upon achievement of the cumulative EPS target subsequent to FY24 (given 27,580 rights were issued, a maximum of 18,387 will vest).

• b) That up to one-third of the FY23-25 LTI share rights issued on 18 November 2022 will vest upon achievement of the cumulative EPS target subsequent to FY25 (given 24,230 rights were issued, a maximum of 8,077 will vest).

F. KMP remuneration table

Compensation paid, payable, or provided by the group or on behalf of the group to KMP as calculated in accordance with applicable accounting standards is set out in the following table.

Data[#] 3 Limited Financial Report 2024 29

Directors’ report (continued)

17. Remuneration report – audited (continued)

F. KMP remuneration table

Fixed remuneration Variable remuneration

		Cash salary	Post-employment	Termination	Cash bonus	Non-	Share-based	Total	Performance	Change in accrued
		and fees (e)	benefits (b)	benefits	(c) (e)	monetary (e)	(d) (f)	reward	related	leave (a) (e)
		$	$	$	$	$	$	$	%	$
Non-executive directors
Anderson, R.A. (until 31/10/2023)	2024	52,759	5,803	-	-	-	-	58,562	-	-
Chairman	2023	148,281	15,569	-	-	-	-	163,850	-	-
Esler, M. R.	2024	95,023	10,452	-	-	-	-	105,475	-	-
	2023	87,511	9,189	-	-	-	-	96,700	-	-
Forrester, S. M.	2024	95,023	10,452	-	-	-	-	105,475	-	-
	2023	87,511	9,189	-	-	-	-	96,700	-	-
Gray, A.M.	2024	139,668	15,363	-	-	-	-	155,031	-	-
Chairman (from 1/11/2023)	2023	97,941	10,284	-	-	-	-	108,225	-	-
Muller, L.M.	2024	105,882	11,647	-	-	-	-	117,529	-	-
	2023	97,941	10,284	-	-	-	-	108,225	-	-
Subtotals – non-executive	2024	488,355	53,717	-	-	-	-	542,072	-	-
directors	2023	519,185	54,515	-	-	-	-	573,700	-	-
Executive Director
Baynham, L.C. (until 1/3/2024)	2024	437,067	27,399	561,274	187,913	304	310,281	1,524,238	32.7	(390,686)
Chief Executive Officer/MD	2023	628,983	25,292	-	272,233	2,000	237,301	1,165,809	43.7	60,140
Colledge, B.D. (CEO/MD from				-
1/3/2024, Executive General	2024	560,000	27,399		275,099	-	146,540	1,009,038	41.8	68,833
Manager until 28/2/2024)	2023	436,832	25,292	-	259,099	2,000	143,484	866,707	46.4	26,787
Other KMP
Bowser, M.J.	2024	387,000	27,399	-	201,946	-	146,540	762,885	45.7	12,348
Executive General Manager	2023	372,590	25,292	-	198,495	2,000	143,484	741,861	46.1	13,911
Hill, B.I. (CFO until 31/3/2023)	2023	277,753	25,292	-	93,762	2,000	143,484	542,291	43.7	(41,922)
O’Riordan, C.E. (from 1/4/2023)	2024	309,000	27,399	-	137,661	-	46,124	520,184	35.3	19,214
Chief Financial Officer	2023	74,795	7,853	-	33,275	-	-	115,923	28.7	11,614
Tan, J. E. (from 1/3/2024)	2024	115,000	12,650	-	132,026	-	34,194	293,870	56.6	(1,092)
Chief Customer Officer	2023	-	-	-	-	-	-	-	-	-
Subtotals – Executive KMP	2024 2023	1,808,067 1,790,953	122,246 109,021	561,274 -	934,645 856,864	304 8,000	683,679 667,753	4,110,215 3,432,591	39.4 44.4	(291,383) 70,530
Totals – KMP	2024	2,296,422	175,963	561,274	934,645	304	683,679	4,652,287	34.8	(291,383)
	2023	2,310,138	163,536	-	856,864	8,000	667,753	4,006,291	38.1	70,530

Data[#] 3 Limited Financial Report 2024 30

Directors’ report (continued)

17. Remuneration report – audited (continued)

F. KMP remuneration table (continued)

• (a) This is the change in accrued annual and long service leave and is measured in accordance with AASB 119 Employee Benefits .

• (b) Post-employment benefits comprise statutory superannuation.

• (c) Short-term bonus is composed of STI.

• (d) Share-based remuneration comprises share-based incentives and share-based ex-gratia rewards. Remuneration expense is recognised for each tranche of rights granted and outstanding on a straight-line basis over the vesting period.

• (e) This is a short-term benefit as it is a movement in current provision, except for $5,222 which is non-current (FY23: $2,067).

• (f) This is a long-term benefit.

G. The group’s performance

Relationship between remuneration and group performance

The overall level of executive reward takes into account the group’s performance over a number of years, with greater emphasis given to improving performance over the prior year. Since 2019 the group’s net profit has grown at an average compounded rate of 19.0% per year, the average executive remuneration has decreased by an average compounded rate of 0.9% per year, and total shareholder return decreased by an average compounded rate of 0.8%. The Board is satisfied with the level of executive remuneration that is at risk and based on group performance and believes the group’s executives are remunerated fairly and in line with the longterm performance of the group. The equity-based LTI plan ensures significant focus is maintained on the group’s long-term performance, as each year’s LTI offering is subject to three-year vesting.

Short-term incentives

In FY24 profit-related performance targets were exceeded by approximately 3%, resulting in actual short-term bonuses that were above target.

Long-term incentives

LTI remuneration is based primarily on the basic earnings per share (EPS) performance of Data[#] 3 Limited. In FY24 the EPS target was exceeded, resulting in vesting of LTI that was on target for 100% vesting.

Group performance

Measures of the group’s performance during FY24 and the previous four years, as required by the Corporations Act, is set out below.

	Profit after tax	Basic earnings	Share price	Dividends	Change in
	to members of	per share	at 30 June	paid per	shareholder
	Data#3 Limited			share	value each year*
	$’000	Cents	$	Cents	$
FY24	43,311	28.00	8.37	24.50	1.42
FY23	37,030	23.96	7.20	20.65	2.75
FY22	30,262	19.61	4.66	16.75	(0.78)
FY21	25,414	16.51	5.61	14.30	1.21
FY20	23,636	15.35	4.54	12.20	2.54

* calculated as the share price increase or decrease plus dividends paid per share during the financial year.

Data[#] 3 Limited Financial Report 2024 31

Directors’ report (continued)

17. Remuneration report – audited (continued)

H. Other statutory information

(i) Performance-based remuneration granted and forfeited during the year

Cash bonuses

For each short-term cash bonus included in the table of remuneration expenses in section (f), the percentage of the planned bonus that was actually earned in the financial year, and the percentage that was forfeited because the person did not meet the relevant profit or other performance-related criteria, are set out below.

Name	Earned	Forfeited
	%	%
Baynham, L.C.	104%	0%
Bowser, M.J.	101%	0%
Colledge, B.D.	101%	0%
O’Riordan, C.E.	101%	0%
Tan,J.	104%	0%

Remuneration in FY24 reflected overachievement of short-term profit targets in relation to the short-term incentive plan (STI).

Equity instruments

All rights and options refer to rights and options over ordinary shares of Data[#] 3 Limited, which are exercisable one-for-one under the Data[#] 3 Long Term Incentive Plan.

The share-based amounts included in the table of remuneration expenses in section F relate to rights issued to KMP. Compensation expense is recognised for each tranche of rights granted on a straight-line basis over the vesting period. The share-based payment amounts for KMP in FY24 were calculated as follows:

Grant date of rights		Compensation expense	Compensation expense	Compensation expense
	L Baynham	M Bowser	B Colledge	C O’Riordan	J Tan
	$	$	$	$	$
30 November 2021	83,152	48,725	48,725	-	11,369
18 November 2022	108,2071	51,691	51,691	-	12,062
31 October 2023	-	46,124	46,124	46,124	10,763
1 March 2024	118,922	-	-	-	-
FY24 LTI compensation expense	310,281	146,540	146,540	46,124	34,194

1. The rights issued to Mr Baynham on 18 November 2022 have been prorated to two thirds due to his resignation and the service requirement has been removed. Refer to section (E) above for further detail.

No options were granted or vested during the reporting period. Performance rights with nil exercise price were granted to KMP as compensation during FY24 for no consideration as follows:

Key management person	Performance	Date of grant	Fair value	Fair value of
	rights		per right at	rights
	granted		grant date
			$	$
Baynham, L.C.1	15,325	1 March 2024	7.76	118,922
Bowser, M.J.	21,964	31 October 2023	6.30	138,373
Colledge, B.D.	21,964	31 October 2023	6.30	138,373
O’Riordan, C.E.	21,964	31 October 2023	6.30	138,373
Tan,J.E.	5,125	31 October 2023	6.30	32,288

1. Refer to section E (1) for further explanation.

Data[#] 3 Limited Financial Report 2024 32

Directors’ report (continued)

17. Remuneration report – audited (continued)

H. Other statutory information (continued)

The fair value of the rights was determined using the Black Scholes Model that takes into account the market price of the company’s shares at the grant date, the three-year vesting period and expected dividends during that period that will not be received by the employees.

During the reporting period, the following ordinary shares were issued with a nil exercise price on the exercise of vested rights previously granted as compensation:

Key	Performance	Date of	Date of	Share price	Total value	Vested
management	rights vested/	initial grant	exercise	of shares	of shares	%
person	shares issued			issued	issued
				$	$
Baynham, L.C.	27,510	12/11/2020	01/09/2023	6.829	187,877	100%
Bowser, M.J.	25,790	12/11/2020	01/09/2023	6.829	176,130	100%
Colledge,B.D.	25,790	12/11/2020	01/09/2023	6.829	176,130	100%

(ii) Details of equity incentives affecting current and future remuneration

The terms and conditions of each grant of rights affecting remuneration in the current or a future reporting period are as follows:

Grant date	Vesting and exercise date	Expiry date	Value per right	Performance	Vested
			at grant date	achieved	%
			$
30 November 2021	Release date of	60 days after	5.30	60.08 cents	100%
	30/06/2024 annual	exercise date		cumulative
	financial results			EPS
18 November 2022	Release date of	60 days after	6.40	To be	n/a
	30/06/2025 annual	exercise date		determined
	financial results
31 October 2023	Release date of	60 days after	6.30	To be	n/a
	30/06/2026 annual	exercise date		determined
	financial results

All rights and options expire on the earlier of their expiry date or termination of the individual’s employment (unless the Board exercises its discretion to keep the rights on foot). In addition to a continuing employment service condition, vesting is conditional on the achievement of (1) a cumulative earnings per share target and (2) specific strategic priorities. For rights granted in the current year, the earliest vesting date is 1 July 2026. For the performance rights granted on 30 November 2021 in FY22, the cumulative three-year basic EPS target was a minimum 43.62 cents and a maximum 61.33 cents. The actual cumulative three-year basic EPS achieved was 71.12 cents. The number of rights over ordinary shares in the company provided as remuneration to KMP is shown in section (i) above. The rights carry no dividend or voting rights. When exercisable, each right is convertible into one ordinary share of Data[#] 3 Limited within 60 days after the release of the annual financial results to the market. The exercise price for all rights granted to date is nil.

Movements in options and rights over equity instruments

The movements during the reporting period in the number of rights over ordinary shares in Data[#] 3 Limited held directly, indirectly or beneficially by each key management person, including their personally related entities, are shown below. No options have been issued or are outstanding.

Data[#] 3 Limited Financial Report 2024 33

Directors’ report (continued)

17. Remuneration report – audited (continued)

H. Other statutory information (continued)

Key	Held at	Granted as	Exercised	Lapsed	Became/	Held at	Vested and
management	1 July	compensation		or	(ceased as)	30 June	exercisable at
person	2023			forfeited	KMP	2024	30 June 2024
Baynham, L.C.	125,299	15,325	(27,510)	(16,907)	(96,207)	-	-
Bowser, M.J.	77,600	21,964	(25,790)	-	-	73,774	-
Colledge, B.D.	77,600	21,964	(25,790)	-	-	73,774	-
O’Riordan, C.E.	-	21,964	-	-	-	21,964	-
Tan,J.E.	-	5,125	-	-	12,089	17,214	-

Movements in shares

The movements during the reporting period in the number of ordinary shares in Data[#] 3 Limited held directly, indirectly, or beneficially by each key management person, including their personally related entities, are shown below.

	Balance	Received upon	Other	Balance
	30 June 2023	exercise of	changes1	30 June 2024
		rights
Directors
Anderson, R.A.2	670,000	-	(670,000)	-
Baynham, L.C.2	300,325	27,510	(327,835)	-
Colledge, B.D.	373,939	25,790	-	399,729
Esler, M.R.	2,799,330	-	-	2,799,330
Forrester, S.M.	26,705	-	1,277	27,982
Gray, A.M.	20,000	-	13,385	33,385
Muller,L.M.	50,000	-	-	50,000
Other executives
Bowser, M.J.	292,153	25,790	(35,000)	282,943
O’Riordan, C.E.	-	-	-	-
Tan,J.E.2	-	-	13,957	13,957

1. Except as noted, other changes refer to the individual’s on-market trading.

2. The amount in other changes is the individual’s shareholding at the date the person commenced or ceased to be a key management person, as applicable, in addition to the individual’s on-market trading.

None of the shares in the preceding table are held nominally by the directors or any of the other KMP.

(iii) Other transactions with KMP

From time to time, directors of Data#3, or their related entities, may purchase goods from the group. These purchases are on the same terms and conditions as those entered into by other group employees or customers and are trivial or domestic in nature.

There were no other transactions during FY24 with KMP or their personally related entities other than compensation and transactions in relation to shares and performance rights as discussed in this report.

(iv) Voting of shareholders at the 2023 Annual General Meeting We received a 96.57% vote in support of the adoption of our Remuneration Report for the 2023 financial year.

This is the end of the audited remuneration report.

Data[#] 3 Limited Financial Report 2024 34

Directors’ report (continued)

This report is made in accordance with a resolution of the directors.

==> picture [136 x 62] intentionally omitted <==

A M Gray Chairman

Brisbane

21 August 2024

Data[#] 3 Limited Financial Report 2024 35

==> picture [124 x 42] intentionally omitted <==

Level 38, 345 Queen Street Brisbane, QLD 4000

Postal address GPO Box 1144 Brisbane, QLD 4001 p. +61 7 3222 8444

pitcher.com.au

The Directors Data[#] 3 Limited 555 Coronation Drive TOOWONG QLD 4066

Auditor’s Independence Declaration

In relation to the independent audit for the year ended 30 June 2024, to the best of my knowledge and belief there have been:

• (i) No contraventions of the auditor independence requirements of the Corporations Act 2001 and

• (ii) No contraventions of APES 110 Code of Ethics for Professional Accountants (including Independence Standards).

This declaration is in respect of Data[#] 3 Limited and the entities it controlled during the year.

==> picture [109 x 31] intentionally omitted <==

PITCHER PARTNERS

JASON EVANS Partner

Brisbane, Queensland 21 August 2024

Adelaide | Brisbane | Melbourne | Newcastle | Perth | Sydney

==> picture [80 x 26] intentionally omitted <==

Nigel Fischer Jason Evans Brett Headrick Simon Chun James Field Felicity Crimston Murray Graham Edward Fletcher Tracey Norris Mark Nicholson Kylie Lamprecht Warwick Face Jeremy Jones Daniel Colwell Cheryl Mason Andrew Robin Robert Hughes Peter Camenzuli Norman Thurecht Cole Wilkinson Tom Splatt Robyn Cooper Kieran Wallis Karen Levine Ventura Caso

Pitcher Partners is an association of independent firms. An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.

Data[#] 3 Limited Financial Report 2024 36

Financial report 2024

Contents

	Page
Consolidated financial statements
Consolidated statement of comprehensive income	38
Consolidated balance sheet	39
Consolidated statement of changes in equity	40
Consolidated statement of cash flows	41
Notes to the consolidated financial statements
About this report	42
Group performance
1 Changes in accounting standards	43
2 Segment information	43
3 Revenue	43
4 Expenses	47
5 Income tax	48
Assets and liabilities
6 Cash and cash equivalents	50
7 Trade and other receivables	51
8 Other assets	53
9 Intangible assets	53
10 Trade and other payables	55
11 Contract liabilities	55
12 Provisions	55
Capital structure, financing and risk management
13 Earnings per share	56
14 Dividends	57
15 Contributed equity	57
16 Leases	58
17 Net cash/(debt) reconciliation	59
18 Financial risk management	60
Other
19 Related parties	63
20 Contingent liabilities	63
21 Key management personnel	64
22 Share-based payments	65
23 Remuneration of auditor	67
24 Accounting standards not yet effective	67
Consolidated entity disclosure statement	69
Directors’ declaration	70
Independent audit report to the members of Data#3 Limited	71
Shareholder information	75

Data[#] 3 Limited Financial Report 2024 37

Consolidated statement of comprehensive income

for the year ended 30 June 2024

		2024	2023
	Notes	$’000	$’000
Revenue
Revenue from contracts with customers	3	805,746	808,625
Other revenue	3	9,937	3,870
		815,683	812,495
Expenses
Change in inventory		(312)	(13,665)
Purchase of goods		(414,630)	(413,876)
Employee and contractor costs directly on-charged (cost of sales on services)		(88,083)	(99,148)
Other cost of sales on services		(32,877)	(31,285)
Internal employee and contractor costs		(190,321)	(176,941)
Telecommunications		(2,239)	(2,073)
Rent		(1,777)	(1,780)
Travel		(1,474)	(1,299)
Professional fees		(1,022)	(1,304)
Depreciation and amortisation	4	(6,303)	(6,280)
Finance costs	4	(1,114)	(1,247)
Other		(13,458)	(10,363)
		(753,610)	(759,261)
Profit before income tax expense		62,073	53,234
Income tax expense	5	(18,762)	(16,204)
Profit for the year attributable to the ordinary equity holders of the company		43,311	37,030
Other comprehensive income, net of tax:
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations		(191)	231
Total comprehensive income attributable to the ordinary equity holders of the company		43,120	37,261
Earnings per share for profit attributable to the ordinary equity holders of the company:		Cents	Cents
Basic earnings per share	13	28.00	23.96
Diluted earnings per share	13	27.90	23.88

The accompanying notes form part of these financial statements.

Data[#] 3 Limited Financial Report 2024 38

Consolidated balance sheet

as at 30 June 2024

		2024	2023
	Notes	$’000	$’000
Current assets
Cash and cash equivalents	6	276,381	404,766
Trade and other receivables	7	519,148	454,788
Contract assets		3,351	5,855
Inventories – at net realisable value		19,101	19,413
Other	8	6,133	5,214
Total current assets		824,114	890,036
Non-current assets
Trade and other receivables	7	744	217
Property and equipment		2,605	3,202
Right-of-use assets	16	17,399	21,064
Deferred tax assets	5	8,033	5,879
Intangible assets	9	13,252	15,207
Total non-current assets		42,033	45,569
Total assets		866,147	935,605
Current liabilities
Trade and other payables	10	704,365	775,582
Contract liabilities	11	46,786	52,120
Lease liabilities	16	3,990	3,587
Current tax liabilities		7,219	4,159
Provisions	12	8,008	7,806
Total current liabilities		770,368	843,254
Non-current liabilities
Lease liabilities	16	16,605	20,296
Provisions	12	4,258	3,710
Total non-current liabilities		20,863	24,006
Total liabilities		791,231	867,260
Net assets		74,916	68,345
Equity
Contributed equity	15	12,577	11,861
Share-based payments reserve	22	960	323
Foreign currency translation reserve		(403)	(212)
Retained earnings		61,782	56,373
Total equity		74,916	68,345

The accompanying notes form part of these financial statements.

Data[#] 3 Limited Financial Report 2024 39

Consolidated statement of changes in equity

for the year ended 30 June 2024

Contributed equity Notes $’000	Attributable to owners of Data#3 Limited Share-based payment reserve Foreign currency translation reserve Retained earnings Total shareholders’ equity $’000 $’000 $’000 $’000
Balance at 1 July 2022 10,313 Profit for the year - Other comprehensive income, net of tax -	559 (443) 51,268 61,697 - - 37,030 37,030 - 231 - 231
Total comprehensive income -	- 231 37,030 37,261
Transactions with owners in their capacity as owners: Payment of dividends 14 - Issue of shares under employee share scheme 22 1,548 Employee share schemes – value of employee services 22 - Employee share schemes – movement in deferred tax 5 -	- - (31,925) (31,925) (1,548) - - - 1,009 - - 1,009 303 - - 303
1,548	(236) - (31,925) (30,613)
Balance at 30 June 2023 11,861	323 (212) 56,373 68,345
Profit for the year -	- - 43,311 43,311
Other comprehensive income, net of tax -	- (191) - (191)
Total comprehensive income -	- (191) 43,311 43,120
Transactions with owners in their capacity as owners:
Payment of dividends 14 -	- - (37,902) (37,902)
Issue of shares under employee share scheme 22 716	(716) - - -
Employee share schemes – value of employee services 22 -	1,162 - - 1,162
Employee share schemes – movement in deferred tax 5 -	191 - - 191
716	637 - (37,902) (36,549)
Balance at 30 June 2024 12,577	960 (403) 61,782 74,916

The accompanying notes form part of these financial statements.

Data[#] 3 Limited Financial Report 2024 40

Consolidated statement of cash flows

for the year ended 30 June 2024

		2024	2023
	Notes	$’000	$’000
Cash flows from operating activities
Receipts from customers and agency arrangements (inclusive of GST)		2,969,179	2,886,667
Payments to suppliers and employees (inclusive of GST)		(3,013,776)	(2,555,014)
GST paid		(32,766)	(29,162)
Interest received		9,923	2,777
Interest and other borrowing costs paid		(1,086)	(1,219)
Income taxpaid(net of refunds)		(17,664)	(13,033)
Net cash inflow (outflow) from operating activities	6	(86,190)	291,016
Cash flows from investing activities
Payments for property and equipment		(607)	(981)
Proceeds from sale of equipment		2	13
Net cash (outflow) from investing activities		(605)	(968)
Cash flows from financing activities
Payment of dividends	14	(37,902)	(31,925)
Lease liability payments	16	(3,497)	(3,047)
Net cash (outflow) from financing activities		(41,399)	(34,972)
Net increase/(decrease) in cash and cash equivalents held		(128,194)	255,076
Cash and cash equivalents, beginning of financial year		404,766	149,459
Effect of exchange rate changes on cash and cash equivalents		(191)	231
Cash and cash equivalents, end of financial year	6	276,381	404,766

The accompanying notes form part of these financial statements.

Data[#] 3 Limited Financial Report 2024 41

Notes to consolidated financial statements

About this report

The material accounting policies we have adopted in the preparation of our financial report are set out in the following notes to the financial statements. These policies have been consistently applied to all the periods presented, unless otherwise stated. The financial statements are for the group consisting of Data[#] 3 Limited (“the company”) and its subsidiaries. References in this financial report to “we”, “us” or “our” refer to management speaking on behalf of the consolidated group (“the group”).

We have prepared these general-purpose financial statements in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001 . These financial statements are presented in Australian dollars and have been prepared under the historical cost convention. The functional currency is also Australian dollars. Data[#] 3 Limited is a forprofit entity for the purpose of preparing the financial statements.

Compliance with IFRS

Our financial statements also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

Changes in accounting standards and regulatory requirements

We adopted all the new and revised accounting standards and interpretations issued by the Australian Accounting Standards Board that are relevant to our operations and effective for an accounting period that begins on or after 1 July 2023. Please refer to Note 1 for further information.

Change in accounting policy – revenue recognition for contracts with customers

During the financial year the group undertook a detailed review of its software licensing and vendor-delivered maintenance agreements to reassess whether it is acting as a principal or agent under these agreements. This was in response to updated guidance released for software resellers in 2022 on the application of the revenue accounting standard (AASB 15). The review resulted in a change to the company’s revenue accounting policy to present software licensing and vendor-delivered maintenance revenues on a net basis, including an adjustment of comparatives. Please refer to Note 3 for further information.

Critical estimates, judgements and errors

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management must also exercise judgement in applying the group’s accounting policies. Following is an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be wrong. Detailed information about each of these estimates and judgements is included in other notes together with information about the basis of calculation for each affected line item in the financial statements. The areas involving significant estimates or judgements are as follows:

• recognition of revenue and allocation of transaction price (note 3)

• impairment of financial assets (note 7(b))

• estimation of goodwill impairment (note 9)

• • estimation uncertainties and judgements made in relation to lease accounting (note 16)

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

Corporate information

The financial report was authorised for issue in accordance with a resolution of the directors on 21 August 2024. Data[#] 3 Limited is a public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business follows:

Level 1 555 Coronation Drive TOOWONG QLD 4066

Data[#] 3 Limited Financial Report 2024 42

Notes to consolidated financial statements (continued)

Note 1. Changes in accounting standards

We adopted the following new accounting standards on 1 July 2023, neither of which had a material effect on the consolidated financial statements for FY24:

• AASB 2021-2 and 2021-6 – the amendments provide a definition of and clarifications on accounting estimates and clarify the concept of materiality in the context of disclosure of accounting policies.

• AASB 2021-5 – the amendments narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences and clarify that the exemption does not apply to transactions such as leases and decommissioning obligations.

Note 2. Segment information

Our business is conducted primarily in Australia. Our management team makes financial decisions and allocates resources based on the information it receives from our internal management system. We attribute sales to an operating segment based on the type of product or service provided to the customer. Revenue from customers domiciled in Australia comprised 99.9% of external sales for FY24 (FY23: 99.5%). During the year there was no customer that individually accounted for more than 10% of the group’s total revenue (FY23: none).

The sale of product and services is highly integrated into the IT solutions that each of our business units delivers to its customers. Each business unit services a similar customer base, applies similar methods to distribute those products and services to customers, and operates within a similar economic and regulatory environment. On this basis, we have determined that separate reporting of our business units does not add significantly to the understanding of them because there is significant overlap of product and services within each business unit, and there are frequent changes between the business units, resulting in the business units having characteristics that are so similar that they are expected to have the same future outcome. As a result, we have concluded that the company has only one reportable segment, which is that of value-added IT reseller and IT solutions provider. These solutions typically comprise a combination of infrastructure, software and service elements.

The company’s revenue, results and assets for this reportable segment can be determined by reference to the Consolidated Statement of Comprehensive Income and the Consolidated Balance Sheet.

Note 3. Revenue

Change in accounting policy

In May 2022, the IFRS Interpretations Committee (IFRIC) issued a final agenda decision on ‘Principal versus Agent: Software Reseller (IFRS 15)’ about whether a reseller of software licenses is acting as principal or agent for the purposes of recognising revenue under IFRS 15 Revenue from Contracts with Customers .

Following the release of IFRIC’s decision, management undertook a detailed review of new and updated software licensing and maintenance agreements and obtained independent advice from a third party. We analysed revenue recognition in respect of various contracts with our customers to reassess if we are acting as principal or agent.

Management concluded that while Data[#] 3 does meet some criteria of control, on balance it does not demonstrate sufficient control of the licenses for vendor-delivered software licensing and maintenance contracts before they are transferred to the customer and therefore has determined that we act as an agent in respect of these sales. The group has revised its accounting policy for the recognition of sales of vendor-delivered software licensing and maintenance contracts to account for this revenue as agent. On this basis, revenue recognised as agent is the net of revenue due under the contract (including related volume rebates or incentives) and costs of sale. The effect on the FY23 Consolidated Statement of Comprehensive Income of the change in accounting policy is shown below:

Data[#] 3 Limited Financial Report 2024 43

Notes to consolidated financial statements (continued)

Note 3. Revenue (continued)

	As
	previously	Adjustments	Adjusted1
	reported
	$’000	$’000	$’000
Year ended 30 June 2023
Revenue from contracts with customers	2,560,700	(1,752,075)	808,625
Total revenue	2,564,570	(1,752,075)	812,495
Purchase ofgoods	(2,078,047)	1,664,171	(413,876)
Other costs of sales on services	(119,189)	87,904	(31,285)
Total expenses	(2,511,336)	1,752,075	(759,261)
Profit before income tax	53,234	-	53,234

1. At 31 December 2023 we had adjusted for all vendor-delivered software licensing contracts. Upon further investigation, we determined that vendor-delivered maintenance contracts also meet the criteria for reporting on an agent basis; we have adjusted for this change in these figures. Also, certain reclassifications have been made to prior year financial statements disclosed in our report for the six months ended 31 December 2023 to conform with classifications used in the current year. These reclassifications had no impact on net profit, shareholders’ equity or cash flows as previously reported.

Revenue recognition critical judgements

Management exercises judgment in determining the categorisation of revenues as there is an increasing tendency for vendors to bundle various elements in the products and services that we resell – for example, some infrastructure offerings include software and/or bundled services, and support offerings can include software licenses. Principal versus agent assessments depend on the specific facts and circumstances in the agreements with suppliers and customers and can be complex, requiring a high degree of judgement.

Revenue from contracts with customers

We sell hardware, software licenses, maintenance contracts, consulting, recruitment, and contracting services. Revenue is recognised based on the completion of performance obligations at the transaction price allocated to the performance obligation. The transaction price is determined by the price specified in the underlying contract or order. Where the contracts include multiple performance obligations, the transaction price is allocated to each performance obligation based on prices set out on the customer’s purchase order; when one or more performance obligations relate to services to be delivered in the future, the associated revenue is deferred and recognised in accordance with the specific accounting policy applicable to the service (refer below for our services revenue accounting policies). No discounts, loyalty points or returns are offered to customers. A performance obligation is satisfied when control of the promised good or service is transferred to the customer.

Each sale is evaluated to determine whether we are operating as principal or agent and recording revenue on a gross or net basis, respectively. The main criteria demonstrating if we act as principal are as follows:

• we are primarily responsible for fulfilling the promise to provide the specified goods or service

• we have control over the item sold before the specified good or service has been transferred to a customer

• with physical goods, we have title to the goods and inventory risk until we receive payment for the goods

• we have discretion in establishing the price for the specified good or service.

Our disaggregated revenues and accounting policies for each material revenue stream are set out below.

A summary of our revenue by business unit and accounting basis is as follows:

Data[#] 3 Limited Financial Report 2024 44

Notes to consolidated financial statements (continued)

Note 3. Revenue (continued)

Note 3. Revenue (continued)
		Revenue
	Policy	recognition	2024	20231
Business unit/revenue stream	note	timing	$’000	$’000
Infrastructure Solutions (INS)
Hardware – as principal	A (1)	Point in time	470,199	482,721
Software licensing and vendor-branded maintenance services – as agent	A (2)	Point in time	11,031	8,090
Services – as principal	B (2)	Over time	1,463	397
Software Solutions (SWS)
Software licensing, vendor-branded maintenance services and consumption sales – as agent	A (2)	Point in time	68,134	62,063
Consulting – as principal	B (2)	Over time	1,452	1,159
Services
Consulting services – as principal	B (2)	Over time	32,718	34,591
Maintenance services – as principal	B (1)	Over time	89,044	86,869
Managed services – as principal	B (1)	Over time	43,880	39,594
Vendor branded maintenance contracts – as agent	A (2)	Point in time	27,649	25,050
Contractingservices – asprincipal	B(3)	Over time	60,176	68,091
Total revenue from contracts with customers			805,746	808,625
Other revenue			9,937	3,870
			815,683	812,495

1. Adjusted for the change in accounting policy described above. Please refer to the table below:

	As previously	Adjustments	Adjusted
Business unit	reported
	$’000	$’000	$’000
Year ended 30 June 2023
Infrastructure Solutions	566,187	(74,933)	491,254
Software Solutions	1,652,453	(1,589,238)	63,215
Business Aspect	33,204	-	33,204
Project Services	74,549	-	74,549
Support Services	164,330	(87,904)	76,426
People Solutions	68,091	-	68,091
DiscoveryTechnology	1,886	-	1,886
Total revenue from contracts with customers	2,560,700	(1,752,075)	808,625

Product revenue

A Product revenue

(1) Sales of hardware

We sell hardware products that are sourced from and delivered by multiple suppliers. We recognise revenue from the sale of these products at the point in time when control of the promised goods has passed to the customer (at which time an invoice is raised) and as principal. Payments from customers are generally due within 30 days of invoice date. The following indicators are used by the company in determining when control has passed to the customer:

Data[#] 3 Limited Financial Report 2024 45

Notes to consolidated financial statements (continued)

Note 3. Revenue (continued)

• we have a right to payment for the product or service

• we have transferred physical possession of the product to the customer

• the customer has the significant risks and rewards of ownership of the product

• the customer has accepted the product.

We record the gross value of the consideration from the customer as revenue. We are acting as principal in these sales for the following reasons:

• we have primary responsibility for the acceptability of goods sold, as the customer’s order is based on our recommendation

• we have title to the goods until the customer pays us

• we are exposed to inventory risk during the delivery period

• we have complete control to establish the selling price.

Suppliers typically provide standard warranties on most of the infrastructure products we sell. These manufacturer warranties are assurance-type warranties and are not considered separate performance obligations. The warranties are not sold separately and only provide assurance that products will conform with the manufacturer’s specifications.

(2) Software licensing contracts and vendor-branded maintenance contracts

We sell software licenses (including Software as a Service or “SaaS” cloud computing solutions) and vendorbranded maintenance contracts on behalf of our suppliers. As our performance obligation is the fulfillment of the end user’s order with product or services provided by the supplier, we recognise revenue for these sales on an agent basis at the time the order is fulfilled (at the time the software license/maintenance contract is activated by the vendor), whereby the revenue is equal to the amount of consideration receivable from the end user less the cost of sale due to the supplier. This represents a change in revenue recognition from principal to agent and means the software supplier is effectively our customer rather than the end user. Previously the sales recognised on a principal basis equalled the gross amount of consideration due from the end user. In relation to software license sales, we also receive vendor rebates and incentives which are accounted for as revenue at the time that receipt of the rebate/incentive is considered probable.

(a) Multi-year software licensing contracts

Under multi-year software sales contracts, customers commit to a minimum number of software licenses over a three-year term, with the right to change to another reseller at the end of each year; historically changes of partner have been rare and immaterial. We recognise revenue annually on an agent basis at the time each annual order is fulfilled, whereby the revenue is equal to the amount of consideration receivable from the end user less the cost of sale due to the supplier. At the end of each year of the contract, we review the actual usage by the customer; at that time we recognise additional fees and invoice the customer for usage above the minimum levels included in the contract. Customers are invoiced annually, and payment is generally due 30 days from invoice date. We satisfy performance obligations under the contract by arranging the transfer of the licensing to the customer; therefore, we recognise revenue on a net basis, as we are acting as an agent in the transaction.

(b) Consumption sales

In these contracts, consumption is charged based on actual usage of services, which is measured in units like compute hours, data storage, and data transfer. Charges are billed to customers monthly, with payment generally due 30 days from invoice date, and we recognise revenue for the services consumed under the contract on an agent basis at the point in time the usage is known, whereby the revenue is equal to the amount of consideration receivable from the end user less the cost of sale due to the supplier.

B Services revenue

(1) Maintenance and managed services

We provide maintenance and managed services to customers as principal where we are primarily responsible for the service provided to the customers. We recognise revenue from these services over time as the services are provided in accordance with the sales contract. Customers are normally invoiced monthly, with payment generally due 30 days from invoice date.

Data[#] 3 Limited Financial Report 2024 46

Notes to consolidated financial statements (continued)

Note 3. Revenue (continued)

(2) Consulting and contracting services

We provide consulting and contracting services on both fixed fee and time-and-material bases. The services are provided by our own employees or by third party contractors. For fixed fee contracts we recognise revenue from these services as principal over time based on labour hours worked as a percentage of total estimated hours, for each contract where we have an enforceable right to payment for performance completed. Where it is probable that a loss will arise from a fixed price service contract, we immediately recognise the excess of total costs over revenue as an expense. For time-and-material contracts we recognise revenue over time at agreed-upon billing rates when services are provided. Customers are normally invoiced monthly, with payment generally due 30 days from invoice date.

We act as principal in providing these services, as we are primarily responsible for fulfilling the services (whether we engage a third-party contractor or not) and we have discretion in setting the price for the services to the customer.

C Incentives and rebates

We account for incentives and rebates from suppliers in the period in which they are earned. Rebates earned were traditionally related to sales volumes and short term in nature, with rebates earned but not yet received typically relating to the preceding quarter’s sales. In recent times, our key vendors have transitioned from volumebased to more services incentive programs to incentivise increased customer engagement and adoption of their products. Incentives and rebates are earned in relation to sales made as principal or agent; they are recognised in cost of goods sold or revenue, respectively, in the Consolidated Statement of Comprehensive Income; incentives and rebates earned but not yet received are included within accrued income in the Statement of Financial Position.

D Other revenue

Other revenue comprises primarily interest revenue, which is recognised as it accrues using the effective interest method.

Note 4. Expenses

	2024	2023
	$’000	$’000
Depreciation and amortisation of property and equipment	1,195	1,161
Depreciation of right-of-use assets (Note 16)	3,911	3,806
Amortisation of software recorded in depreciation and amortisation (Note 9)	1,197	1,313
Depreciation and amortisation - recorded in depreciation and amortisation expense	6,303	6,280
Amortisation of software - recorded in cost of sales(Note 9)	758	874
Total depreciation and amortisation	7,061	7,154
Finance costs
Interest on lease liabilities (Note 16)	1,084	1,188
Other interest and finance charges paid/payable	2	31
Unwindingof discount onprovisions and otherpayables(Note 12)	28	28
	1,114	1,247
Employee benefits expense	172,215	157,555
Termination benefits expense (excluding employee-originated terminations)	474	304
Defined contribution superannuation expense	19,876	18,447
Other charges against assets - impairment of trade receivables(Note 7(b))	420	7

Data[#] 3 Limited Financial Report 2024 47

Notes to consolidated financial statements (continued)

Note 5. Income tax

Note 5. Income tax
	2024 2023 $’000 $’000
The major components of income tax expense are as follows: Current income tax expense Deferred income tax relating to the origination and reversal of temporary differences Adjustments for current tax of prior years	20,722 16,440 (1,985) (310) 25 74
Income tax expense	18,762 16,204
A reconciliation between income tax expense and the product of accounting profit before income tax multiplied by the company’s applicable income tax rate is as follows: Accounting profit before income tax	62,073 53,234
Income tax calculated at the Australian tax rate: 30% (FY23: 30%) Tax effect of amounts which are not deductible in calculating taxable income: Non-deductible items	18,622 15,970 134 183
Difference in overseas tax rates Under/(over) provision inprioryear	18,756 16,153 (19) (23) 25 74
Income tax expense	18,762 16,204
Effective tax rate (income tax expense as a percentage of profit before tax)	% % 30.2 30.4

We paid income taxes (net of refunds in relation to the prior year, if any) of $17,664,000 during FY24 (FY23: $13,033,000).

Data[#] 3 Limited Financial Report 2024 48

Notes to consolidated financial statements (continued)

Note 5. Income tax (continued)

Deferred income tax assets and liabilities are attributable to the following temporary differences:

	2024	2023
	$’000	$’000
Lease liabilities	6,178	7,165
Accrued liabilities	3,532	3,098
Provisions	3,814	3,473
Depreciation	715	303
Share-based payments	1,013	688
Other	30	31
Total deferred tax assets	15,282	14,758
Right-of-use assets	(5,220)	(6,319)
Intangible assets	(856)	(589)
Contract assets	(1,166)	(1,988)
Other	(7)	17
Total deferred tax liabilities	(7,249)	(8,879)
Net deferred tax assets	8,033	5,879

Movements in deferred tax assets are as follows:

	Lease	Accrued	Provisions	Depreciation	Share-	Other	Total
	liabilities	liabilities			based
					payments
	$’000	$’000	$’000	$’000	$’000	$’000	$’000
Balance at 30 June 2022	7,693	2,936	3,164	180	547	41	14,561
(Charged)/credited
- to profit or loss	(528)	162	309	132	(162)	7	(80)
- to current tax liability	-	-	-	(9)	-	(17)	(26)
- to equity	-	-	-	-	303	-	303
Balance at 30 June 2023	7,165	3,098	3,473	303	688	31	14,758
(Charged)/credited
- to profit or loss	(987)	434	341	410	134	21	353
- to current tax liability	-	-	-	2	-	(22)	(20)
- to equity	-	-	-	-	191	-	191
Balance at 30 June 2024	6,178	3,532	3,814	715	1,013	30	15,282

Data[#] 3 Limited Financial Report 2024 49

Notes to consolidated financial statements (continued)

Note 5. Income tax (continued)

Movements in deferred tax liabilities are as follows:

	Right-of-use	Intangible	Contract	Other	Total
	assets	assets	assets
	$’000	$’000	$’000	$’000	$’000
Balance at 30 June 2022	(7,076)	(282)	(1,747)	(164)	(9,269)
(Charged)/credited
- toprofit or loss	757	(307)	(241)	181	390
Balance at 30 June 2023	(6,319)	(589)	(1,988)	17	(8,879)
(Charged)/credited
- to profit or loss	1,099	(267)	822	(22)	1,632
- to current tax liability	-	-	-	(2)	(2)
Balance at 30 June 2024	(5,220)	(856)	(1,166)	(7)	(7,249)

Note 6. Cash and cash equivalents

Note 6. Cash and cash equivalents
	2024	2023
	$’000	$’000
Cash at bank and on hand	26,381	35,752
Deposits at call	250,000	369,014
	276,381	404,766

For purposes of the consolidated statement of cash flow, cash and cash equivalents include cash on hand, deposits held at call with financial institutions, and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. We show any bank overdrafts within borrowings in current liabilities on the balance sheet.

Data[#] 3 Limited Financial Report 2024 50

Notes to consolidated financial statements (continued)

Note 6. Cash and cash equivalents (continued)

Reconciliation of net profit to net cash flow from operations

Reconciliation of net profit to net cash flow from operations
		2024	2023
	Notes	$’000	$’000
Profit for the year		43,311	37,030
Loss/(gain) on disposal of property, equipment and software		7	(7)
Depreciation and amortisation	4	7,061	7,154
Unwinding of discount on provisions	4	28	28
Bad and doubtful debts	4	420	7
Non-cash employee benefits expense – share-based payments	22	1,162	1,009
Other		(1)	46
Change in operating assets and liabilities
Decrease/(increase) in receivables		(65,307)	73,997
Decrease/(increase) in contract assets		2,504	(79)
Decrease/(increase) in inventories		312	13,570
Decrease/(increase) in other operating assets		(919)	(1,259)
Decrease/(increase) in net deferred tax assets1		(1,963)	(284)
Increase/(decrease) in payables		(71,217)	152,884
Increase/(decrease) in contract liabilities		(5,334)	2,410
Increase/(decrease) in current tax liabilities		3,060	3,454
Increase/(decrease)inprovision for employee benefits		686	1,056
Net cash inflow/(outflow) from operating activities		(86,190)	291,016

1. The movement in deferred tax assets is net of the tax effect of $191,000 related to the share-based payments equity reserve (FY23: $303,000).

Non-cash transactions

During FY24 we entered into new leases resulting in the recognition of additional lease assets of $246,000 (FY23: $1,285,000) and corresponding lease and make-good liabilities of $209,000 and $36,000, respectively (FY23: leases of $1,285,000). These transactions are excluded from the consolidated statement of cash flows.

Note 7. Trade and other receivables

Note 7. Trade and other receivables
	2024	2023
	$’000	$’000
Current
Trade receivables (a)	500,033	436,480
Allowance for impairment(b)	(448)	(62)
	499,585	436,418
Other receivables(c)	19,563	18,370
	519,148	454,788
Non-current
Trade receivables on deferredpayment terms(d)	744	217

We carry loans and receivables at amortised cost using the effective interest method. We establish an allowance for impairment of loans and receivables using the simplified approach permitted by AASB 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Data[#] 3 Limited Financial Report 2024 51

Notes to consolidated financial statements (continued)

Note 7. Trade and other receivables (continued)

To measure the expected credit losses, we group trade receivables based on shared credit risk characteristics (being government versus other debtors) and the days past due. The expected loss rates are based on the historical credit losses experienced over the previous five years. We adjust historical loss rates to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. More material or higher risk receivable balances are reviewed individually, and we consider specific circumstances including payment history, the forecast of economic conditions in the customer’s operating sector, communication quality and responsiveness to determine future expected credit losses. We provide individually, where necessary, based on the perceived level of risk. In addition, any entities that are in administration are provided for individually.

Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.

(a) Trade receivables

Trade receivables are non-interest bearing and generally due for settlement within 30 days.

(b) Allowance for impairment

We recognised an impairment loss of $420,000 in the current year (FY23: $7,000). Impairment amounts are included in profit or loss within other expenses. Movements in the provision for impairment loss were as follows:

	$’000
Carrying amount at 1 July 2022	111
Impairment loss recognised during the year	7
Receivables written off during the year	(7)
Unusedprovision reversed duringtheyear	(49)
Carrying amount at 30 June 2023	62
Impairment loss recognised during the year	420
Receivables written off duringtheyear	(34)
Carrying amount at 30 June 2024	448

Our ageing of trade receivables, receivables past due not impaired, and the expected loss percentage applied to each ageing category at 30 June 2024, is as follows:

		2024	2024			2023	2023
	Expected	Trade	Credit	Past due	Expected	Trade	Credit	Past due
	loss	receivables	loss	but not	loss	receivables	loss	but not
			allowance	impaired			allowance	impaired
	%	$’000	$’000	$’000	%	$’000	$’000	$’000
Current	-	478,794	-	-	-	411,074	-	-
1-30 days	0.3%	15,368	51	15,317	-	17,701	-	17,701
31-60 days	1.2%	3,391	41	3,350	-	1,872	-	1,872
61-90 days	1.3%	870	11	859	0.5%	2,197	11	2,186
91-120 days	1.6%	561	9	552	1.0%	720	7	713
+120 days	32.0%	1,049	336	713	1.5%	2,916	44	2,872
		500,033	448	20,791		436,480	62	25,344

The increase in the expected loss percentage relates to two specifically identified debtors as at 30 June 2024 and does not represent underlying deterioration of the credit quality of our customers. For trade receivables that are past due, each customer’s account has been placed on hold where deemed necessary until full payment is made.

Data[#] 3 Limited Financial Report 2024 52

Notes to consolidated financial statements (continued)

Note 7. Trade and other receivables (continued)

(c) Other receivables

These amounts generally arise from accrued rebates or transactions outside our usual operating activities. Interest is normally not charged, collateral is not normally obtained, and the receivables are normally due within 30 days of recognition. None of these receivables are past due.

(d) Trade receivables on deferred payment terms

Non-current trade receivables are unsecured, non-interest bearing and payable within two years. None of these receivables are past due.

Note 8. Other assets

Note 8. Other assets
			2024	2023
			$’000	$’000
Prepayments			6,030	5,125
Securitydeposits			103	89
			6,133	5,214
Note 9. Intangible assets
			2024	2023
			$’000	$’000
Goodwill – at cost			11,843	11,843
Accumulated impairment			(1,787)	(1,787)
			10,056	10,056
Software assets – at cost			7,740	7,740
Accumulated amortisation and impairment			(4,544)	(3,347)
			3,196	4,393
Internally generated software assets – at cost			8,471	8,471
Accumulated amortisation and impairment			(8,471)	(7,713)
			-	758
			13,252	15,207
	Goodwill	Software	Internally	Total
		assets	generated
			software
	$’000	$’000	$’000	$’000
Carrying amount at 1 July 2022	10,056	5,706	1,632	17,394
Amortisation(Note 4)	-	(1,313)	(874)	(2,187)
Carrying amount at 30 June 2023	10,056	4,393	758	15,207
Amortisation(Note 4)	-	(1,197)	(758)	(1,955)
Carrying amount at 30 June 2024	10,056	3,196	-	13,252

Data[#] 3 Limited Financial Report 2024 53

Notes to consolidated financial statements (continued)

Note 9. Intangible assets (continued)

Goodwill

We initially measure goodwill on acquisition at cost, being the excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Subsequently goodwill is carried at cost less any accumulated impairment losses. We test goodwill for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired, and we write its value down when impaired (refer below).

Software

Software assets include those we have developed ourselves and those we have purchased. We capitalise costs incurred in purchasing or developing software where the software will provide a future financial benefit to the group and we have control over the use of the software. Costs of internally generated software that we capitalise from the date we have determined the software’s technical feasibility include external direct costs of materials and service and direct payroll and payroll-related costs of employees’ time spent on the project. Software assets are carried at cost less accumulated amortisation and impairment losses. We calculate amortisation using the straight-line method over the estimated useful lives of the respective assets, generally two to five years.

Impairment testing

Goodwill is not subject to amortisation; we test it annually for impairment or more frequently if events or changes in circumstances indicate it might be impaired. We test other assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We recognise an impairment loss 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 or value in use. For the purposes of assessing impairment, we group together assets that cannot be tested individually into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cash-generating unit or CGU). For the purpose of goodwill impairment testing, we aggregate CGUs to which goodwill has been allocated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes. We allocate goodwill acquired in a business combination to groups of CGUs that are expected to benefit from the synergies of the combination.

We have allocated goodwill to our cash-generating units (CGUs) according to business unit, unless that unit did not exist at the time of the business acquisition which generated the goodwill. Goodwill summarised by business unit is shown below:

Cash generating unit (CGU)	Carrying	Reallocation	of	Carrying	Impairment	Carrying
	amount at	goodwill during		amount at	recognised	amount at
	1 July 2022	FY23		30 June 2023	during FY24	30 June 2024
	$’000	$’000		$’000	$’000	$’000
Infrastructure Solutions	847	877		1,724	-	1,724
Software Solutions	2,013		-	2,013	-	2,013
Business Aspect	1,532		-	1,532	-	1,532
Project Services	1,211		-	1,211	-	1,211
Support Services	2,396		-	2,396	-	2,396
People Solutions	1,180		-	1,180	-	1,180
DiscoveryTechnology	877	(877)		-	-	-
	10,056		-	10,056	-	10,056

We determine whether goodwill is impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash generating units to which the goodwill is allocated. We determined the recoverable amount of each cash generating unit based on a value-in-use calculation using cash flow projections based on financial projections approved by senior management for FY25. In FY23, following the integration of Discovery Technology operations into the Infrastructure Solutions CGU, the goodwill associated with Discovery Technology was reallocated to Infrastructure Solutions. We applied a 12% before-tax discount rate to cash flow projections (FY23: 12%) and extrapolated cash flows for the four years beyond the FY25 financial year using an average growth rate of 3.5% (FY23: 3.5%) and a terminal value growth rate thereafter of 3.0% (FY23: 3.0%). No impairment was identified on these cash generating units at 30 June 2024 (FY23: nil).

Data[#] 3 Limited Financial Report 2024 54

Notes to consolidated financial statements (continued)

Note 9. Intangible assets (continued)

Key assumptions used in value-in-use calculations

We determined budgeted gross profits based on past performance and our expectations for the future. The discount rate was estimated based on our weighted average cost of capital at the date of impairment test. We have considered and assessed reasonably possible changes to these key assumptions and have not identified any that could cause the carrying amount of goodwill to exceed its recoverable amount.

Note 10. Trade and other payables

Note 10. Trade and other payables
	2024	2023
	$’000	$’000
Current
Trade payables – unsecured	679,619	728,721
Otherpayables – unsecured	24,746	46,861
	704,365	775,582

Current trade and other payables are unsecured and are usually paid within 30 to 60 days of recognition.

Note 11. Contract liabilities

	2024	2023
	$’000	$’000
Contract liabilities	46,786	52,120

Contract liabilities arise primarily from revenue contracts when customers pay us amounts due under the contracts before the goods or services identified in the contracts are delivered and from rebates received in advance from vendors on multi-year contracts. The contract liabilities primarily relate to contracts where the revenue is recognised at a point in time, and revenue is normally recognised within one to three years. We recognised revenue of $24,742,000 that was included in the contract liability balance at 1 July 2023 in relation to customer and related vendor contracts for the provision of IT products and services (FY23: $46,344,000).

Note 12. Provisions

		2024			2023
	Current	Non-	Total	Current	Non-	Total
		current			current
	$’000	$’000	$’000	$’000	$’000	$’000
Employee benefits (long service leave)	7,990	3,186	11,176	7,806	2,684	10,490
Lease remediation	18	1,072	1,090	-	1,026	1,026
	8,008	4,258	12,266	7,806	3,710	11,516

Data[#] 3 Limited Financial Report 2024 55

Notes to consolidated financial statements (continued)

Note 12. Provisions (continued)

Movements in provisions other than employee benefits are as follows:

		Lease
		remediation
		$’000
Balance at	1 July 2022	998
Increase to	present value	28
Balance at	30 June 2023	1,026
Additions		36
Increase to	present value	28
Balance at	30 June 2024	1,090

Note 13. Earnings per share

Note 13. Earnings per share
	2024	2023
Basic earnings per share (cents)	28.00	23.96
Diluted earningsper share(cents)	27.90	23.88
Earnings used in the calculation of basic and diluted earningsper share($000)	43,311	37,030
Weighted average number of ordinary shares for basic earnings per share (number)	154,686,011	154,556,033
Adjustment for dilutive elements(share rights – number)	549,494	499,183
Weighted average number of ordinary shares for diluted earnings per share (number)	155,235,505	155,055,216

During FY24 104,880 shares were issued under the Data[#] 3 Long Term Incentive Plan (FY23: 249,999). Please refer to Note 22 for further detail.

Data[#] 3 Limited Financial Report 2024 56

Notes to consolidated financial statements (continued)

Note 14. Dividends

Note 14. Dividends
	2024	2023
	$’000	$’000
Dividends paid on ordinary shares during the year
Final fully franked dividend for FY23: 11.90c per share (FY22: 10.65c)	18,410	16,465
Interim fullyfranked dividend for FY24: 12.60cper share(FY23: 10.00c)	19,492	15,460
	37,902	31,925
Dividends declared (not recognised as a liability at year end)
Final fully franked dividend for FY24: 12.90c (FY23: 11.90c)	19,957	18,397
The tax rate at which dividends paid have been franked is 30% (FY23: 30%).
Dividends declared will be franked at the rate of 30% (FY23: 30%).
Franking credit balance
Franking credits available for subsequent financial years based on a tax rate of 30% (FY23:30%)	38,561	34,086

The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for the following:

(a) franking credits that will arise from the payment of the current tax liability;

(b) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and (c) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.

The dividend declared by the directors since year end, but not recognised as a liability at year end, will result in a reduction in the franking account of $8,553,000 (FY23: $7,885,000).

Note 15. Contributed equity

Note 15. Contributed equity
(a) Movements in ordinary share capital	Number of shares
Ordinary shares on issue at 1 July 2022	154,349,185
Ordinary shares issued during the year (Note 22)	249,999
Ordinary shares on issue at 30 June 2023	154,599,184
Ordinaryshares issued duringtheyear(Note 22)	104,880
Ordinary shares on issue at 30 June 2024	154,704,064

(b) Ordinary shares

All ordinary shares issued as at 30 June 2024 and 2023 are fully paid. 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 the shares held. Every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote per share. Ordinary shares have no par value, and the company has an unlimited amount of authorised capital. Subject to legislative requirements, the directors control the issue of shares in the company.

(c) Share options

No share options are outstanding as at 30 June 2024 (2023: nil).

(d) Share rights

Please refer to Note 22.

Data[#] 3 Limited Financial Report 2024 57

Notes to consolidated financial statements (continued)

Note 15. Contributed equity (continued)

(e) Capital management

When managing capital (equity), the Board’s objectives are to ensure the group continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. The Board adjusts the capital structure as necessary to take advantage of favourable costs of capital or high returns on assets. As the market is constantly changing, the board may change the amount of dividends to be paid to shareholders, return capital to shareholders, issue new shares or reduce debt that may be incurred to acquire assets.

During FY24 the Board paid dividends of $37,902,000 (FY23: $31,925,000). The Board’s intent is to maintain the historical dividend payout ratio; however, market conditions and funding requirements are taken into consideration prior to the declaration of each dividend.

We are not subject to any externally imposed capital requirements.

Note 16. Leases

Right-of-use assets

Right-of-use assets
		2024	2023
		$’000	$’000
Right-of-use assets – premises leases		33,235	32,989
Accumulated amortisation		(16,017)	(12,154)
		17,218	20,835
Right-of-use assets – equipment leases		239	239
Accumulated depreciation		(58)	(10)
		181	229
		17,399	21,064
The movement in right-of-use assets follows:
	Right-of-use	Right-of-use	Total right-
	assets	assets	of-use
	(premises)	(equipment)	assets
	$’000	$’000	$’000
Carrying amount at 1 July 2022	23,585	-	23,585
Additions	1,046	239	1,285
Depreciation(Note 4)	(3,796)	(10)	(3,806)
Carrying amount at 30 June 2023	20,835	229	21,064
Additions	246	-	246
Depreciation(Note 4)	(3,863)	(48)	(3,911)
Carrying amount at 30 June 2024	17,218	181	17,399

Data[#] 3 Limited Financial Report 2024 58

Notes to consolidated financial statements (continued)

Note 16. Leases (continued)

Lease liabilities

Lease liabilities
	2024	2023
	$’000	$’000
Current lease liabilities	3,990	3,587
Non-current lease liabilities	16,605	20,296
Total lease liabilities	20,595	23,883
Total payments for leases during the year comprise the following:
Principal payments	3,497	3,047
Interest expense	1,084	1,188
Payments made in relation to lease liabilities	4,581	4,235
Payments made for low-value leases	251	350

The future payments of lease liabilities, including interest, are set out in Note 18(c).

We lease various offices, warehouses and office equipment under rental contracts that normally range from three to eight years, with many contracts containing extension options, normally for two to three years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Under the relevant lease agreements (mainly premises) the rentals are subject to periodic review to market and/or for CPI increases. Generally, the premises lease agreements require us to maintain a bank guarantee (please refer to Note 18(c)) as security for the lease agreement. All our significant premises leases allow assignment of the lease or sublease of the premises with the approval of the landlord. All leases are under normal commercial lease terms and conditions.

Note 17. Net cash/(debt) reconciliation

An analysis of net cash/(debt) and the movements in net debt are set out below.

Net cash/(debt)		2024	2023
		$’000	$’000
Cash and cash equivalents		276,381	404,766
Leases		(20,595)	(23,883)
Net cash		255,786	380,883
Movement in net cash/(debt)	Cash	Leases	Total
	$’000	$’000	$’000
Net cash/(debt) at 1 July 2022	149,459	(25,645)	123,814
Cash flows	255,307	3,047	258,354
Acquisition – leases	-	(1,285)	(1,285)
Net cash/(debt) at 30 June 2023	404,766	(23,883)	380,883
Cash flows	(128,385)	3,497	(124,888)
Acquisition – leases	-	(209)	(209)
Net cash/(debt) at 30 June 2024	276,381	(20,595)	255,786

Data[#] 3 Limited Financial Report 2024 59

Notes to consolidated financial statements (continued)

Note 18. Financial risk management

Our business activities can expose us to a variety of financial risks: market risk (including foreign exchange risk, price risk, and cash flow and fair value interest rate risk), credit risk, and liquidity risk. Our overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on our financial performance. To date we have not used derivative financial instruments. We use sensitivity analysis to measure interest rate and foreign exchange risks, and aging analysis for credit risk. Risk management is carried out by our Chief Financial Officer (CFO) under policies approved by the Board of directors. The CFO identifies, evaluates and mitigates financial risks in close cooperation with senior management.

All our financial assets except cash and cash equivalents are within the loans and receivables category at amortised cost, and our financial liabilities are all within the financial liabilities recorded at amortised cost category.

(a) Market risk

(i) Foreign exchange risk

Foreign exchange risk arises for us when future commercial transactions and recognised assets and liabilities are denominated in a currency other than the Australian dollar. We make sales via our Fiji branch to customers who require the currency of settlement to be in Fiji dollars. At year end the Australian dollar value of assets/(liabilities) denominated in Fiji dollars is as follows:

denominated in Fiji dollars is as follows:
	2024	2023
	$’000	$’000
Cash	18,353	17,879
Accounts receivable	398	702
Other(liabilities)	(124)	(44)

At 30 June 2024 if the foreign exchange rates had changed, as illustrated in the table below, with all other variables remaining constant, other comprehensive income and equity would have been affected as follows:

	Other comprehensive	Other comprehensive		Equity
	income
	Higher/(lower)		Higher/(lower)
	2024	2023	2024	2023
	$’000	$’000	$’000	$’000
-2.5% (FY23: -3.5%)	(454)	(603)	(454)	(603)
+2.5%(FY23: +4.0%)	478	743	478	743

The rate changes above are based on economic forecasts of major banks for FY25 together with the variation in rates experienced during the current year. Profit or loss would not be affected by a movement in the exchange rates as calculated in the table above because the foreign exchange gain or loss is unrealised and is recorded in other comprehensive income until such time as the gain or loss is realised.

(ii) Price risk

We are not exposed to equity securities or commodity price risk.

Data[#] 3 Limited Financial Report 2024 60

Notes to consolidated financial statements (continued)

Note 18. Financial risk management (continued)

(iii) Cash flow and fair value interest rate risk

Our exposure to cash flow interest rate risk arises predominantly from cash and cash equivalents bearing variable interest rates. Our surplus cash position fluctuates regularly, and ongoing liquidity needs mean most of our funds are maintained in at-call accounts. Our borrowings are not material, and our lease liabilities are fixed rate instruments which do not expose us to fair value interest rate risk. At balance date we maintained the following variable rate accounts:

	30 June	2024	30 June	2023
	Weighted	Balance	Weighted	Balance
	average		average
	interest rate		interest rate
	%	$’000	%	$’000
Cash at bank and on hand	2.0%	26,381	1.3%	35,752
Deposits at call	4.3%	250,000	2.1%	369,014
Cash and cash equivalents	4.0%	276,381	1.9%	404,766

At balance date, if the interest rates had changed, as illustrated in the table below, with all other variables remaining constant, after-tax profit and equity would have been affected as follows:

		After-tax profit	After-tax profit		Equity
		Higher/(lower)		Higher/(lower)
		2024	2023	2024	2023
		$’000	$’000	$’000	$’000
-0.75% (75	basis points) (FY23: -0.50%)	(1,355)	(1,354)	(1,355)	(1,354)
+0.25%(25	basispoints) (FY23: +1.25%)	451	677	451	677

The rate changes above are based on economic forecasts of major Australian banks for FY25.

(b) Credit risk

Credit risk arises from the financial assets of our group, which comprise cash and cash equivalents, contract assets, and trade, finance lease and other receivables. Our exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. We do not hold any credit derivatives to offset the credit exposure. We have policies in place to ensure that sales of products and services are made to customers with an appropriate credit history; collateral is not normally obtained. We set risk limits for each individual customer in accordance with parameters set by the Board. These limits are regularly monitored.

Specific information as to our credit risk exposures is as follows:

• Cash and cash equivalents are maintained at two large financial institutions with high credit ratings.

• During FY24 year, no customer individually accounted for more than 10% of total revenue (FY23: none); gross sales to one government customer comprised 7.0% of total gross sales on a non-IFRS basis (FY23: 6.9%).

• At 30 June 2024, one debtor comprised 11% of total debtors (FY23: 12%), and the ten largest debtors comprised approximately 39% of total debtors (FY23: 48%), of which 100% were accounts receivable from government customers (FY23: 89%).

• Our customers generally do not have independent credit ratings. Our risk control procedures assess the credit quality of the customer considering its financial position, past experience and other factors. We set individual risk limits based on internal or external ratings in accordance with limits set by the Board. Our credit management department regularly monitors compliance with credit limits. Management believes the credit quality of our customers is high based on the very low level of bad debt write-offs experienced historically. In FY24 total bad debt write-offs as a percent of the trade receivables carrying amount as at 30 June 2024 was 0.08% (FY23: 0.00%).

Data[#] 3 Limited Financial Report 2024 61

Notes to consolidated financial statements (continued)

Note 18. Financial risk management (continued)

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. We aim to maintain flexibility in funding by keeping committed credit lines available. We manage liquidity risk by monitoring cash flows and ensuring that adequate cash and unused borrowing facilities are maintained.

At reporting date we had used $4,140,000 (FY23: $8,143,000) of the multi-option financing facility for bank guarantees and our corporate credit card facility and had access to the following undrawn borrowing facilities at the reporting date:

		2024	2023
		$’000	$’000
Multi-option	bank facility	20,860	16,857

The multi-option facility is a comprehensive borrowing facility which includes a bank overdraft facility and is subject to certain financial undertakings. The facility is subject to annual review. Interest is variable and is charged at prevailing market rates. The weighted average interest rate for FY24 was 8.1% (FY23: 6.8%).

Maturity of financial liabilities

The table below categorises our financial liabilities into relevant maturity groups based on their contractual maturities, calculated as their undiscounted cash flows. All the financial liabilities are non-derivative and measured at amortised cost.

	Less than	Between 1	Between 2	More than	Total	Carrying
	1 year	and 2 years	and 5 years	5 years	contractual	amount
					cash flows
	$’000	$’000	$’000	$’000	$’000	$’000
At 30 June 2024
Trade and other payables	693,578	-	-	-	693,578	693,578
Lease liabilities	4,935	4,677	9,132	4,973	23,717	20,595
	698,513	4,677	9,132	4,973	717,295	714,173
At 30 June 2023
Trade and other payables	765,350	-	-	-	765,350	765,350
Lease liabilities	4,669	4,747	10,789	7,813	28,018	23,883
	770,019	4,747	10,789	7,813	793,368	789,233

(d) Fair values

The carrying amounts of financial assets (net of any provision for impairment) and current financial liabilities approximate fair value primarily because of their short maturities. The carrying amount of the non-current receivables approximates fair value because the interest rate applicable to the receivables approximates current market rates.

Data[#] 3 Limited Financial Report 2024 62

Notes to consolidated financial statements (continued)

Note 19. Related parties

Wholly-owned group

The consolidated financial statements include the financial statements of Data[#] 3 Limited (being the ultimate parent entity) and the subsidiaries listed in the following table.

Name of entity	Country of	Equity holding	Equity holding
	formation or	(ordinary shares)
	incorporation
		2024	2023
		%	%
Business Aspect Group Pty Ltd	Australia	100.0	100.0
Business Aspect (Australia) Pty Ltd	Australia	100.0	100.0
Business Aspect Pty Ltd	Australia	100.0	100.0
DiscoveryTechnologyPtyLtd	Australia	100.0	100.0

Data[#] 3 Limited established the Data[#] 3 Employee Share Trust in FY20 and it remains in operation (refer to Note 22 for further information).

Parent entity

Summarised financial information for the parent entity is as follows:

	2024	2023
	$’000	$’000
As at 30 June
Current assets	811,054	879,329
Total assets	857,428	929,016
Current liabilities	767,426	840,296
Total liabilities	788,084	864,146
Shareholders’ equity
Contributed equity	12,577	11,861
Share-based payments reserve	960	323
Foreign currency translation reserve	(403)	(212)
Retained earnings	56,210	52,898
Total equity	69,344	64,870
For the year ended 30 June
Net profit for the year	41,214	35,545
Other comprehensive income, net of tax:
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations	(191)	231
Total comprehensive income	41,023	35,776

Note 20. Contingent liabilities

At 30 June 2024 we had provided bank guarantees totalling $2,952,000 (FY23: $2,952,000) to lessors as security for premises we lease and $1,117,000 (FY23: $5,117,000) to customers for contract performance. The guarantees will remain in place for the duration of the relevant contracts. Bank guarantees are secured by charges over all our assets.

Data[#] 3 Limited Financial Report 2024 63

Notes to consolidated financial statements (continued)

Note 21. Key management personnel

Key management personnel compensation is set out below.

Key management personnel compensation is set out below.
	2024	2023
	$	$
Short-term employee benefits (including change in current employment
provisions)	2,934,766	3,243,465
Share-based compensation (long-term employee benefits)	683,679	667,753
Termination benefits	561,274	-
Change in non-current employment provisions (long-term employee benefits)	5,222	2,067
Post-employment benefits	175,963	163,536
	4,360,904	4,076,821

For additional information refer to the remuneration table on page 30.

Transactions with key management personnel

There were no transactions during FY24 or FY23 with key management personnel or their personally related entities other than compensation and transactions in relation to shares and performance rights as discussed in this report (refer to Note 22).

The following table shows the rights granted and outstanding at the beginning and end of the reporting period in relation to key management personnel:

	Fair value per	Share rights
	right granted
	$	Number
Balance 30 June 2022		484,686
Share rights granted	6.40	123,412
Share rights settled		(249,999)
Balance 30 June 2023		358,099
Share rights granted	6.30	71,017
Share rights granted	7.76	15,325
Share rights forfeited		(16,907)
Share rights settled		(79,090)
Share rights of new/(exiting)KMPs		(161,718)
Balance 30 June 2024		186,726

Data[#] 3 Limited Financial Report 2024 64

Notes to consolidated financial statements (continued)

Note 21. Key management personnel (continued)

Ordinary shares held directly, indirectly or beneficially by key management personnel, including their personally related entities, are shown below.

	Ordinary shares
	Number
Balance 30 June 2022	4,980,401
Received upon exercise of rights	249,999
Other changes*	(697,948)
Balance 30 June 2023	4,532,452
Received upon exercise of rights	79,090
Other changes*	(1,004,216)
Balance 30 June 2024	3,607,326

• Other changes refer to the individual’s on-market trading plus the individual’s shareholding at the date the person commenced or ceased to be a key management person, as applicable.

None of the shares in the preceding table are held nominally by the directors or any of the other key management personnel.

Note 22. Share-based payments

The Data[#] 3 Long Term Incentive Plan (LTIP) was approved by shareholders at the 2018 Annual General Meeting. The LTIP has been designed to align the interests of eligible employees with the interests of shareholders of the company by enabling directors and employees to have involvement with, and share in the future and growth of, the company and to assist the company to attract, reward and retain high quality staff. Under the LTIP participants are granted rights or options which only vest if certain performance conditions are met. The exercise price, vesting conditions and vesting period are set by the Board in its discretion. Participation in the LTIP is at the Board’s discretion, and no individual has a contractual right to participate in the LTIP or to receive any guaranteed benefits. Rights or options are granted under the LTIP for no consideration and carry no dividend or voting rights. Vested rights are exercisable for 60 days following issuance of the audited financial statements.

The number of rights to be granted is determined based on the currency value of the board-approved LTI divided by the volume weighted average share price for the five trading days following the release of the preceding year’s audited financial statements.

The following table shows the rights granted and outstanding at the beginning and end of the reporting period:

	Fair value per	Share rights
	right granted
	$	Number
Balance at 30 June 2022		568,341
Settled on 1 September 2022		(249,999)
Granted on 18 November 2022	6.40	213,876
Balance at 30 June 2023		532,218
Settled on 1 September 2023		(104,880)
Granted on 31 October 2023	6.30	147,892
Forfeited on 1 March 2024		(16,907)
Granted on 1 March 2024	7.76	15,325
Balance at 30 June 2024		573,648

At 30 June 2024 204,269 of the performance rights (FY23: 104,880) vested. The 104,880 rights granted in FY21 were settled during the year (nil exercise price) (FY23: 249,999 rights and nil exercise price). No options were granted, lapsed, forfeited, settled or exercised during the year (FY23: nil).

Data[#] 3 Limited Financial Report 2024 65

Notes to consolidated financial statements (continued)

Note 22. Share-based payments (continued)

Settlement of FY21 rights

On 1 September 2023 ordinary shares were issued to the Data[#] 3 Employee Share Trust (“the share trust”), which in turn provided the shares to executives whose rights vested under the Data[#] 3 Long Term Incentive Plan. Data[#] 3 Limited provided the funds to the share trust to enable the acquisition of shares. The rights were granted on 12 November 2020 and fully vested on 30 June 2023. Other details of the share issuance are set out below.

Number of rights converted to shares 104,880 Share price of shares issued $6.829

Refer to the table below for the amounts recorded in the financial statements in relation to the performance rights.

Fair value of performance rights granted

For the rights outstanding at balance date, the assessed fair value at grant date of performance rights granted was calculated using the Black Scholes Model that takes into account the following inputs:

		Date of	rights grant
	FY22	FY23	FY24	FY24
	30 November 2021	18 November 2022	31 October 2023	1 March 2024
Exercise price per share	Nil	Nil	Nil	Nil
Expiry date	30 June 2024	30 June 2025	30 June 2026	30 June 2026
Share price at grant date	$5.68	$6.85	$6.77	$8.26
Expected dividendyield	2.65%	2.63%	2.70%	2.70%

Amounts recorded in the financial statements in relation to the performance rights are set out below.

	$000
Share-based payments reserve at 1 July 2022	559
Issue of shares for performance rights under employee share scheme (offsets contributed equity)	(1,548)
Employee benefits expense in relation to performance rights	1,009
Movement in deferred tax related toperformance rights	303
Share-based payments reserve at 30 June 2023	323
Issue of shares for performance rights under employee share scheme (offsets contributed equity)	(716)
Employee benefits expense in relation to performance rights	1,162
Movement in deferred tax related toperformance rights	191
Share-based payments reserve at 30 June 2024	960

Accounting policy

We provide equity-settled share-based payments to employees through the Long-term Incentive Plan (LTIP).

The fair value of the incentives and options granted is determined at grant date and is recognised as an employee benefit expense with a corresponding increase in equity on a straight-line basis over the period during which the employees become unconditionally entitled to the incentives or options. We determine the fair value using the Black Scholes Model that takes into account the market price of the company’s shares at the grant date, the three-year vesting period and expected dividends during that period that will not be received by the employees.

At each balance sheet date we revise the estimated number of rights/options that are expected to become exercisable. The employee benefits expense recognised each period takes into account the most recent estimate.

Data[#] 3 Limited Financial Report 2024 66

Notes to consolidated financial statements (continued)

Note 23. Remuneration of auditor

The following fees were paid or payable to the auditor for audit and non-audit services:

	2024 2023 $ $
Audit and other assurance services Audit and review of financial statements	183,500 175,000
Non-audit services Tax compliance services Other business advice	21,280 20,314 4,700 -
	25,980 20,314
Total remuneration	209,480 195,314

We employ Pitcher Partners on assignments additional to its statutory duties where the firm’s expertise and experience with our group are important.

Note 24. Accounting standards not yet effective

Relevant Australian Accounting Standards that have recently been issued or amended, but are not yet effective and have not been adopted for the annual reporting period ended 30 June 2024, are as follows:

Standard/Interpretation	Application	Application
	date of	date for the
	Standard1	group1
AASB 2020-1 and 2020-6_Amendments to Australian Accounting Standards –_
Classification of Liabilities as Current or Non-current	1 January 2024	1 July 2024
AASB 2023-1_Amendments to Australian Accounting Standards – Supplier_
Finance Arrangements	1 January 2024	1 July 2024
AASB 2024-2_Amendments to Australian Accounting Standards – _Classification and Measurement of Financial Instruments	1 January 2026	1 July 2026
AASB 18_Presentation and Disclosure in Financial Statements_	1 January 2027	1 July 2027

1. Application date is for annual reporting periods beginning on or after the date shown in the above table.

The directors anticipate that the adoption of these standards and interpretations in future years may have the following impacts:

AASB 2020-1 – the standard amends AASB 101 Presentation of Financial Statements to clarify that liabilities are classified as either current or non-current depending on the rights that exist at the end of the reporting period. When this Standard is first adopted for the year ending 30 June 2025, we do not expect there will be any changes to the classification of liabilities within our financial report, as we do not have any material borrowings.

AASB 2023-1 – the standard amends AASB 107 and AASB 7 to require an entity to provide additional disclosures about its supplier finance arrangements to enable users of financial statements to assess how supplier finance arrangements affect an entity’s liabilities, cash flows and exposure to liquidity risk. When this Standard is first adopted for the year ending 30 June 2025, we do not expect there will be any material changes to the disclosures within our financial report, as we do not have any material financing arrangements.

Data[#] 3 Limited Financial Report 2024 67

Notes to consolidated financial statements (continued)

Note 24. Accounting standards not yet effective (continued)

AASB 2024-2 – the standard amends AASB 7 and AASB 9 to provide guidance on when a financial asset or a financial liability is recognised and derecognised and includes an exception for the derecognition of certain financial liabilities that are settled using an electronic payment system. The amendments also set out new measurement and disclosure requirements in relation to cash flows with ESG-linked conditions and additional disclosures relating to investments in equity instruments. As the initiation and settlement of our trade payables occurs within the same day for all material payments, when this Standard is first adopted for the year ending 30 June 2027, we do not expect there will be any material changes to the disclosures within our financial report, as we do not currently have material transactions which are the subject of this amendment.

AASB 18 – the standard replaces AASB 101 Presentation of Financial Statements to improve how entities communicate in their financial statements, with a particular focus on information about financial performance in the statement of profit or loss. When this Standard is first adopted for the year ending 30 June 2028, there will be changes in the format of information presented on each of the primary financial statements in the financial report.

Data[#] 3 Limited Financial Report 2024 68

Consolidated entity disclosure statement

Set out below is relevant information relating to entities that are consolidated in the consolidated financial statements at the end of the financial year as required by the Corporations Act 2001 (s.295(3A)(a)):

Name of entity	Country of	Country of tax	Equity holding
	formation or	residency	(ordinary shares)
	incorporation		%
Parent entity
Data#3 Limited	Australia	Australia1	N/A
Wholly owned subsidiaries
Business Aspect Group Pty Ltd	Australia	Australia	100
Business Aspect (Australia) Pty Ltd	Australia	Australia	100
Business Aspect Pty Ltd	Australia	Australia	100
Discovery Technology Pty Ltd	Australia	Australia	100
Other entities
Data#3 Employee Share Trust	Australia	Australia	N/A

1. Data[#] 3 Limited also operates a branch in Fiji which has its tax residency in Fiji.

At the end of the financial year, no entity within the consolidated entity was a trustee of a trust within the consolidated entity, a partner in a partnership within the consolidated entity, or a participant in a joint venture with the consolidated entity.

Data[#] 3 Limited Financial Report 2024 69

Directors’ declaration

In the opinion of the directors:

• (a) the financial statements and notes set out on pages 38 to 68 are in accordance with the Corporations Act 2001 , including:

• (i) complying with Australian Accounting Standards and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

• (ii) giving a true and fair view of the group’s financial position as at 30 June 2024 and of its performance for the financial year ended on that date;

• (b) there are reasonable grounds to believe that the group will be able to pay its debts as and when they become due and payable; and

• (c) the consolidated entity disclosure statement set out on page 69 is true and correct.

The notes to the consolidated financial statements confirm that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The directors have been given the declarations by the managing director and chief financial officer required by section 295A of the Corporations Act 2001 .

This declaration is made in accordance with a resolution of the directors.

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A M Gray Chairman

Brisbane

21 August 2024

Data[#] 3 Limited Financial Report 2024 70

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Level 38, 345 Queen Street Brisbane, QLD 4000

Postal address GPO Box 1144 Brisbane, QLD 4001 p. +61 7 3222 8444

pitcher.com.au

Independent Auditor’s Report to the Members of Data[#] 3 Limited

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Data#3 (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated balance sheet as at 30 June 2024, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001 , including:

• (a) giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its financial performance for the year then ended; and

• (b) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Adelaide | Brisbane | Melbourne | Newcastle | Perth | Sydney

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Nigel Fischer Jason Evans Brett Headrick Simon Chun James Field Felicity Crimston Murray Graham Edward Fletcher Tracey Norris Mark Nicholson Kylie Lamprecht Warwick Face Jeremy Jones Daniel Colwell Cheryl Mason Andrew Robin Robert Hughes Peter Camenzuli Norman Thurecht Cole Wilkinson Tom Splatt Robyn Cooper Kieran Wallis Karen Levine Ventura Caso

Pitcher Partners is an association of independent firms. An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.

Data[#] 3 Limited Financial Report 2024 71

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Key Audit Matter

How our audit addressed the key audit matter

Revenue Recognition ($805,746,000) Refer to note 3

We have focused on revenue as a key audit matter.

Given the nature of the Group’s operations, the performance at the end of the financial year has a significant impact on the Group’s profit for the year. This is due to the quantum of revenue transactions occurring near year-end.

The Group enters into differing types of contracts with customers and recognises revenue from contracts with customers for software & cloud and solutions & services as disclosed in note 3 of the consolidated financial statements. AASB15 Revenue from Contracts with Customers requires management to apply judgement, also when assessing whether the Group acts as a principal or agent and the timing of revenue recognition. The assessment whether the Group acts as a principal or agent affects whether revenue is presented on a gross or net basis.

The assessment regarding the timing of revenue recognition determines whether revenue is recognised in the appropriate period.

Our procedures included, amongst others:

• Understanding and evaluating the design and implementation of controls over the revenue recognition and invoicing process;

• Evaluating the operating effectiveness of key controls that are relevant to the recognition of revenue;

• Assessing the revenue recognition policy based on AASB15;

• Selecting a sample of transactions prior to yearend and agreeing to supporting documentation to obtain evidence that the goods have been delivered and accepted at a customer’s specified location (sales recognised at a point in time), a specified project milestone had been achieved (sales recognised over time) or labour hours had been worked (sales recognised over time), in the same period to which the revenue is recognised;

• Performing substantive tests of detail on receivables, contract assets and contract liabilities recognised at year end to obtain evidence on the existence / completeness of the assets / liabilities at year-end and the corresponding revenue being recognised in the correct period; and

• Assessing the adequacy of the disclosures in the financial report.

Other Information

The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2024, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Other Matter – Change in accounting policy

We draw attention to note 3 which discloses the nature and amounts adjusted in the prior period as a result of a change in accounting policy with regard to the recognition of revenue as an agent not a principle for certain customer contracts. Our opinion is not modified in respect of this matter.

Pitcher Partners is an association of independent firms. An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.

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Data[#] 3 Limited Financial Report 2024 72

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Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of:

• (a) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and

• (b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001 ; and

• for such internal control as the directors determine is necessary to enable the preparation of:

• (i) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and

• (ii) the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

Pitcher Partners is an association of independent firms. An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.

3

Data[#] 3 Limited Financial Report 2024 73

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We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 21 to 34 of the directors’ report for the year ended 30 June 2024. In our opinion, the Remuneration Report of Data#3, for the year ended 30 June 2024, complies with section 300A of the Corporations Act 2001 .

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

PITCHER PARTNERS

JASON EVANS Partner

Brisbane, Queensland 21 August 2024

Pitcher Partners is an association of independent firms. An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.

4

Data[#] 3 Limited Financial Report 2024 74

Shareholder information

The shareholder information set out below was applicable as at 5 August 2024.

1. Distribution of equity securities

• (a) Analysis of numbers of equity security holders by size of holding:

	Number of shares	% of issued capital	Number of holders
1 to 1,000	1,194,366	0.77	2,861
1,001 to 5,000	7,104,293	4,59	2,671
5,001 to 10,000	8,384,347	5.42	1,092
10,001 to 50,000	28,290,805	18.29	1,278
50,001 to 100,000	11,676,303	7.55	160
100,001 and over	98,053,950	63.38	114
	154,704,064	100.00	8,176

• (b) There were 209 holders of less than a marketable parcel of ordinary shares.

2. Twenty largest quoted equity security holders

2. Twenty largest quoted equity security holders
Name	Ordinary	shares
	Number held	% of issued shares
HSBC Custody Nominees (Australia) Limited	23,955,562	15.48
Citicorp Nominees Pty Limited	18,632,545	12.04
J P Morgan Nominees Australia Pty Limited	17,117,691	11.06
National Nominees Pty Limited	2,523,389	1.63
Oakport Pty Ltd	2,118,478	1.37
Powell Clark Trading Pty Ltd (Data3 Prof Serv S/F A/C)	2,000,000	1.29
BNP Paribas Nominees Pty Ltd (Agency Lending A/C)	1,761,117	1.14
J T Populin	1,661,379	1.07
BNP Paribas Nominees Pty Ltd	1,580,164	1.02
Anacacia Pty Limited (Wattle Fund A/C)	1,179,249	0.76
BNP Paribas Nominees Pty Ltd ACF (Clearstream)	1,071,647	0.69
Thomson Associates Pty Ltd	1,000,000	0.65
Citicorp Nominees Pty Limited (Colonial First State Inv A/C)	920,503	0.60
U Pty Ltd (Andelise Super Fund A/C)	753,880	0.49
BNP Paribas Nominees Pty Ltd (IB AU Noms Retail A/C)	747,257	0.48
HSBC Custody Nominees (Australia) Limited	703,830	0.45
Elterry Pty Ltd (Powell Family A/C)	660,000	0.43
Banksia Administration Services Pty Ltd (Ron Gilbert Homes S/F A/C)	637,000	0.41
BNP Paribas Nominees Pty Ltd HUB24 Custodial Serv Ltd (DRP A/C)	554,674	0.36
DensleyPtyLtd(Litvin Gamble Unit A/C)	502,000	0.32
	80,080,365	51.76

Data[#] 3 Limited Financial Report 2024 75

Shareholder information (continued)

3. Substantial shareholders

Not applicable.

4. Unquoted equity securities

Not applicable.

5. Voting rights

The voting rights attaching to the ordinary shares, set out in the company’s constitution, are as follows:

(a) every shareholder present at a general meeting has one vote on a show of hands; and

(b) on a poll, each shareholder has one vote for each fully paid share held.

Options have no voting rights.

Data[#] 3 Limited Financial Report 2024 76