X2M CONNECT LIMITED

X2M Connect Limited (ASX:X2M) ASX Announcement

ANNUAL REPORT 2021

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1st October 2021

X2M Connect Limited provides the attached Annual Report 2021 to shareholders.

The Board of X2M has approved this announcement.

For further information contact:

Shareholder Enquiries Automic Pty Ltd [email protected] +612 9698 5414

Media and Investor Relations Mohan Jesudason [email protected] 1 800 926 926 (1 800 X2M X2M)

About X2M Connect Group

X2M Connect (X2M) is an Australian technology company with proprietary Internet of Things (IoT) technology that uses the internet to deliver productivity improvements, cost savings and improved public safety to enterprise and government customers. The technology connects devices over the internet and enables data exchange and the remote control of devices. Revenue is generated via the sale of hardware, as well as monthly subscription services (Software as a Service (SaaS)).

The Company’s strategy is to invest in growth and scale the business internationally. X2M’s current focus is on servicing the utility sector in the Asia-Pacific (APAC) and the Company has successfully established a number of government and enterprise customer relationships. The business is head quartered in Melbourne Australia and has subsidiaries in Japan, South Korea, Taiwan, and the recently established subsidiary in Beijing, China.

Further information on can be found on the Company’s website www.x2mconnect.com

SNAPSHOT FY 2021 ................................................................................................................................................. 2 CHAIRMAN’S LETTER ............................................................................................................................................... 4 OPERATIONAL OVERVIEW ....................................................................................................................................... 6 DIRECTORS REPORT .............................................................................................................................................. 14 REMUNERATION REPORT ...................................................................................................................................... 24 AUDITORS INDEPENDENCE DECLARATION ........................................................................................................... 36 2021 FINANCIAL REPORT ...................................................................................................................................... 37 Income Statement ............................................................................................................................................................... 37 Statement of financial position ........................................................................................................................................... 38 Statement of changes in equity........................................................................................................................................... 39 Statement of Cashflows ...................................................................................................................................................... 40 DIRECTORS DECLARATION .................................................................................................................................... 73 CORPORATE GOVERNANCE STATEMENT As at 19[th] September 2021 ................................................................. 77 ADDITIONAL INFORMATION .................................................................................................................................. 85 COMPANY DIRECTORY ........................................................................................................................................... 93

Key Notes:

All currency is reported in Australian Dollars unless otherwise noted.
Reporting year 2020 represents the period in which the Company was incorporated 9[th] December 2019 to 30[th] June 2020.
PCP refers to the previous comparative period.

SNAPSHOT FY 2021

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Revenue

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devices connected

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Increase in key customers

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Offices

in countries

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Successful listing on

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Entered the vertical

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CHAIRMAN’S LETTER

My name is Alan Stockdale and I am the Chairman of X2M Connect Limited (“X2M”).

The 2020-2021 year has been an historic one for our company.

On the 20th of September 2021, X2M was admitted to the Australian Securities Exchange (“ASX”) and trading of the company’s shares commenced on the 22nd of September 2021.

On behalf of the X2M Board and management, I welcome you as a shareholder and as a stakeholder in what we believe will be a successful future of our company. I commend this Annual Report to you and hope that you will find it interesting and encouraging.

A new independent Board for our company was appointed on 8[th] February 2021. Details of the Directors’ qualifications and experience are set out in this Report. The Directors have been working very well together throughout the year and I believe that the company is fortunate to have such a strong and diligent Board. I would like to take the opportunity to thank the previous Board for their oversight of the Company.

The Board would like to congratulate our CEO, Mr. Mohan Jesudason and his senior executive team, as well as our advisers and brokers on the successful listing of X2M.

The current strategic focus of the business is on digitising the utility sector in the Asia Pacific Region (APAC) with its proprietary Internet of Things (IoT) technology. The Company’s core value proposition is to assist both utilities and governments to save time, money and enhance public safety, by enabling new and existing utility devices to communicate both to each other and to a centralised system via the internet. Details of the company’s business are set out comprehensively in the Prospectus which was the basis of investment in the listed Group and in this Report. Essentially the company offers utilities hardware and local governments Software-as-a-Service (SaaS) monitoring and control of meters and other devices through platform that has near-universal interoperability across devices and communications technologies. We also sell to or partner with manufacturers of meters and other devices.

In the longer term, X2M has potential to participate in markets outside utility industries but, even within utilities in the APAC region, the company’s addressable market is significant. The company has been experiencing substantial growth and we expect that to continue.

The company’s IPO raised $8.0 million and, accordingly, for the foreseeable future, X2M is in a good position to carry out its growth plans. Strategically, the company is aiming to further upgrade its sales and marketing workforce across its operating geographies and to make other investments to support the focus on growth.

The year under review has been an exciting one for our company.

Business development continues to progress well. Revenues for the 2021 year were $5.7 million and the number of devices connected to our platform at year-end was 123,256.

Before IPO costs, the result for the year was an EBITDA loss of $4.4 million. This reflects the Company’s strategy to invest in growth and scale the business internationally, as well as the costs associated with delivering the additional revenue and the first full year of operation.

We are gaining traction in key markets.

The company established an office in Beijing during 2021 and, whilst early days, the Directors believe that there are good opportunities for expansion in China. Our products and services strongly complement government programs, especially urbanisation of its population and the investment in infrastructure including the digitisation of utilities.

Our biggest market is currently South Korea and, again, we believe that the market offers good prospects of further growth. Several municipalities have already contracted X2M to upgrade their metering technologies. In addition, the South Korean Government is encouraging and providing funding for municipalities to improve the technological capabilities of their utilities. These policies make South Korea a target for still further increases in market penetration.

We have built momentum in Japan, and we expect that roll-out to continue apace.

X2M also has growth prospects in Australia and Taiwan and, over the next few years is targeting entry into other national utility markets in the APAC region.

X2M is a leader in IoT technologies. Whilst the products are well through the development phase, we continue to enhance our devices and the platform to meet customer needs. Our base platform is substantially built which has facilitated a significant reduction in development costs and the Board and management maintain a strong focus on overall cost control. The worldwide shortage of semiconductors poses a threat to companies like ours, but management is implementing measures to protect the business from that risk. We are also further refining our hardware to reduce costs and further improve competitiveness.

Our products and services provide important efficiencies, accountability, and safety to user utilities. The rapid urbanisation of APAC countries generally is increasing the number of households in cities, Governments in the region are pursuing policies that make our offerings even more attractive and the region has a long history of rapid uptake of new technologies.

Your Director’s and management see great opportunities ahead for our company.

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HON. ALAN STOCKDALE AO CHAIRMAN

OPERATIONAL OVERVIEW

About X2M

X2M Connect (X2M or the Company) is an Australian technology company with proprietary Internet of Things (IoT) technology that uses the internet to deliver productivity improvements, cost savings and improved public safety, to enterprise and government customers. The technology connects devices over the internet and enables data exchange and remote control of devices. The platform collects data and communicates between analogue and digital technologies without requiring a major system upgrade.

Whilst the Company’s technology can be taken into any virtual market, X2M’s current focus is digitizing the utility sector in Asia-Pacific (APAC) through the provision of technology which connects devices over the internet, such as water meters and gas pressure sensors and which enables data exchange and control of these devices. This category is commonly referred to as the Internet of Things (IoT).

The business is currently operated through subsidiaries in Japan, South Korea, Taiwan and China, with the head office based in Melbourne, Australia.

In February this year, the former Board of X2M, which represented the two largest shareholders, resigned to make way for an Independent Board to oversee the broader interests of all shareholders and prepare the Company for listing on the Australian Securities Exchange (ASX). On the 22[nd] of September 2021, X2M commenced trading on the ASX under ticker code ‘X2M’.

Technology and the Business Model

X2M’s technology is built on an end-to-end, interoperable IoT solution which enables different computerized products and systems to readily connect and exchange information with one another. The Company is currently focussed on enabling individual devices in the utility sector to exchange data with the Company’s proprietary software platform.

There are 3 core components to X2M’s technology offering.

1) Network Interface Card (NIC): The NIC can be added to or integrated within devices including meters, valves, and pumps. It enables existing devices without communication capability to transmit and receive information with one another and, where required, to control devices.
2) Micro Engine: This is the core of the Company’s technology offering. This is an ‘intelligence engine’ or ‘logic concentrator’ that interacts with multiple devices over any network. Applications running on the Micro Engine can make autonomous decisions based on the information they receive from individual devices or from groups of devices (commonly known as ‘distributed intelligence’). The Micro Engine applications can also collate and normalise the information received from each device and send it to the X2M IoT platform, resulting in an overall reduction in the amount of data that needs to be sent to the platform.

3) X2M’s IoT Platform : The X2M IoT platform is a SaaS offering that manages, monitors, diagnoses and controls deployed Micro Engines and all connected devices.

It acts as an aggregation point for all customer data, report generation, and network management. It integrates via an open interface to billing, enterprise resource planning, customer care, marketing, and geospatial systems.

The X2M IoT platform is known as the ‘Vision Platform’. The platform includes the mobile application known as ‘PRISM’. PRISM is the user application that allows households to access their usage data and alerts and is available if the utility provider subscribes to this service. An example screenshot of the Vision and PRISM user interface is below.

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Figure 1: Screenshots of the user interface of X2M’s software platform

The platform enables a utility provider to interact with, analyse and control their meter network remotely, including at the individual meter level. In turn, this allows utility companies to receive extensive live data from any meter or sensor, analyse it and send commands back within seconds. The versatility of the technology means it can be applied to a number of industries in addition to utility meter monitoring.

The technology enables the Company to generate revenues from a combination of:

a) hardware sales
b) upfront connection fees for non X2M devices as they come on to the X2M IoT platform, c) time-based subscription fees and,
d) licensing fees from hardware manufacturers or system integrators.

The Company’s primary focus is building recurring revenue streams by embedding X2M technology in a customer’s ordinary course of operations and then charging monthly fees for access to Vision and PRISM and through platform licensing arrangements

Impact of the Covid 19 Pandemic

The Covid-19 pandemic had limited impact on X2M in 2021. The Company currently services the utility sector, which is relatively immune to external influences, including the pandemic. Because the utility sector remained operational, the Company was able to continue servicing customers and developing the sales pipeline. Management also adopted several proactive strategies that included establishing a virtual management operating rhythm, very tight control of discretionary expenses, and a number of supply chain initiatives to minimise any potential impact.

X2M will continue to adapt to the operating environment and manage risk appropriately as the impacts of the global pandemic continue to play out.

Strategy

The Company has a clear strategy to invest in growth. For the next few years, the Company will invest available funds in people and initiatives to sustain substantial growth rates.

The growth strategy is working as shown by the growth in top-line revenue in FY 2021 compared to the full year as per the pro forma accounts published in the Prospectus. The FY 2021 EBITDA loss reflects investment in growth, even in the context of tight cost control, against the higher costs associated with securing additional revenue and the effect on cost of goods under existing and new contracts.

There are 5 core pillars to the X2M strategy:

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2020 Comparative Reporting Financial Reporting Period

X2M was incorporated on the 9[th of] December 2019. Therefore, the comparative period reported in the statutory accounts is for the part-year 9[th] December 2019 to 30[th] June 2020.

Group Performance Summary

The 2021 financial year was the first full year of X2M’s operations. The Group reported revenue of $5.7 million, and an EBITDA loss of ($4.4 million). The EBITDA results exclude share-based payment expenses, which are non-cash, and IPO related costs which are nonrecurring.

Key highlights for the Group as of 30[th] June 2021 include:

Revenue $5.7 million.
EBITDA loss $4.4 million.
Connected devices 123,256, up 93%.
Number of enterprise customers 34, up 26%.
Cash at bank $1.9 million.
Total assets $6.9 million, up 26%.

Summary of Financial Results

$000’s	FY2021	9 DEC 2019 - 30 JUN 2020
Revenue	5,700	1,314
EBITDA	(4,440)	(951)
Depreciation and amortisation	(1,245)	(386)
EBIT	(5,685)	(1,337)
Share Based Payment Expense	(2,072)	-
IPO Expenses	(681)	-
Finance Costs	(161)	(113)
Income tax benefit	344	62
Loss after Tax	(8,255)	(1,388)

Table 1: Summary of Financial Results 2021 vs Statutory Comparative Period

Key Performance Metrics

Operational Metrics - Number of Connected Devices - 000’s

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Graph 1: Number of connected devices. Results prior to February 2020 represents performance before ownership by X2M

The number of connected devices is an indicator of the revenue earned from subscription to the X2M platform. In FY 2021, the growth in connected devices was driven by the increased market penetration and new connections in South Korea and Japan:

74% of devices were added via licencing arrangements in Japan.
A further 21% of devices were added from further penetration into existing customers in South Korea.

Financial Metrics ($m)

a) Revenue

$000’s	2021	9 DEC 2019 – 30 JUN 2020
Revenue	5,700	1,314
TotalRevenue and Other Income	6,520	1,494

Total Revenue and Other Income increased to $6.5 million. Growth was largely driven by accounting for the full year trading period, increased market penetration in South Korea, Japan and Taiwan, and entry into China.

Other income predominantly consists of government assistance in response to the Covid 19 pandemic including JobKeeper $0.4 million, research and development tax credits $0.3 million and receipt of an export government grant of $0.1 million.

Platform and subscription revenue grew to $1.4 million in 2021 and hardware sales grew to $4.1 million. A further $0.1 million was earned from costs associated with developing proof of concepts.

b) Total Expenses

$000’s	2021	2020
Total expenses	15,119	2,945

The increase in operating expenses reflects the Company’s strategy to invest in growth and scale the business internationally. The increase in expenses is associated with a full year of operations and the increased cost of achieving the additional revenue.

In addition to the full year operating costs, the increase in expenses was driven by:

Full year cost of sales - $4.1 million.
Full year employee benefits expense - $6.7 million that includes the appointment of the Board, an additional 3 FTE versus 2020, and share based payment expenses that included a number of one-off awards related to listing - $2.1 million.
Finance costs of $0.2 million primarily as a result of interest charged on loans.
Full year of depreciation and amortisation - $1.2 million.
One off cost associated with the IPO - $0.7 million.

c) Comparison with pcp as per Prospectus Pro Forma Accounts

$000’s	FY 2021	PROFORMA FY 2020	CHANGE
Revenue	5,700	3,126	82%
EBITDA	(4,440)	(4,944)	(10)%
Share basedpayment expenses	(2,072)	-	-
IPO expenses	(681)	-	-
Depreciation and amortisation	(1,245)	(913)	36%
Finance costs	(161)	(56)	186%
Income taxbenefits	344	-	-
Loss after Tax	(8,255)	(5,913)	40%

Table 2: Comparison with proforma pcp

Pro-forma results for FY 2020 are provided to facilitate a year-on-year comparison, which is more meaningful for assessing underlying performance than the statutory part year. The FY 2020 pro-forma results are from the X2M Prospectus dated the 24[th ] of August 2021. A copy of the Prospectus can be found on the Company’s website: www.x2mconnect.com.

The EBITDA loss for FY 2021 is 11% lower than the loss reported in the pcp as per the full year Pro Forma accounts published in the Prospectus.

Funding and Capital

Cashflow continued to be managed tightly, balancing the cash requirements of driving growth with the increased costs of scaling the business and listing.

The short-term funding strategy prior to listing on the ASX was primarily focussed on the use of convertible notes to provide short term funding. The group issued $4.2 million of convertible notes in the prior year which were converted to ordinary shares in March 2021. As of the 30[th ] of June 2021, the Balance Sheet reflects an outstanding loan balance of $2.4 million of which $1.5 million is outstanding convertible notes, $0.5 million from related party loans and the balance is an unrelated party loan.

The longer-term funding strategy is to access capital from the public markets following the Company’s September 2021 listing on the ASX. In the IPO, the Company raised $8.0 million (before costs associated with the listing).

Segment Performance

Four segments were identified for reporting in FY 2021 – South Korea, China, Taiwan and Other. The results to date recognize the early stage of operations in key markets and the investment required to drive market penetration.

	REVENUE	REVENUE	EBIT	EBIT
$000’s	2021	9 DEC 2019 – 30 JUN 2020	2021	9 DEC 2019 – 30 JUN 2020
South Korea	3,901	1,020	(1,912)	(360)
China	1,089	-	(280)	(2)
Taiwan	547	29	(944)	(242)
Other	285	265	(2,549)	(734)
Eliminations	(122)	-	-	-
Group	5,700	1,314	(5,685)	(1,338)

Table 3: Comparison of revenue and EBIT by segment

a) South Korea

South Korea is currently the largest market for X2M and achieved revenue of $3.9 million. The three largest customers accounted for 40% of the Groups revenue.

During the period, the Company secured seven new municipalities for its water monitoring solution. This added in excess of 400,000 households to the Company’s addressable market, bringing the total number of addressable households from existing customers to 600,000 as of the 30[th of] June 2021.

South Korea reported an EBIT loss of $1.9 million. This was driven by the increase in expenses reflecting the total cost of trading for the full year and the increased cost to scale the business and increase market penetration. Results also reflect the increased cost of goods associated with the increased revenue, and the additional cost of appointing 3 incremental sales resources to drive market penetration and expand existing municipality relationships.

b) China

In 2021, X2M entered The People’s Republic of China, generating revenue of $1.1 million, and an EBIT loss of $0.3 million.

The Chinese market is currently run out of Taiwan and is under the management of the Taiwan team. The Company secured an Internet Content Provider Licence during the year which enables the delivery of software services into the Chinese market. The Company generated hardware revenues of $1.1 million through two reselling contracts. The Company’s strategy is to enter this market through similar hardware reselling arrangements and establish a base of devices for integration of its software.

The costs associated with establishing the new subsidiary and appointing a resource is reflected in the cost base.

c) Taiwan

Taiwan achieved revenue of $0.5 million.

The Company has broadened its business base beyond the gas sector where it provides enterprise customers remote meter reading, data collection, leak detection and pressure monitoring services to the water and energy sectors through industrial battery monitoring services. Investment in growing the market resulted in an EBIT loss of $0.9 million.

d) Other

The Other segment currently includes Japan, Hong Kong and Australia. Australia is the cost centre for corporate costs including head office expenses and R&D software development costs. This segment reported revenue of $0.3 million and an EBIT loss of $2.5 million, excluding unallocated costs described below.

In Japan, approximately half the residential market are supplied with gas via bottles rather than from reticulated networks and, accordingly the bottled gas market is substantial. Revenue generated in Japan is via a SaaS based licensing arrangement with one of the

country’s largest gas and water meter manufacturers. The Company earns recurring software revenues per connected device for the monitoring of bottled gas usage and logistics management. Connected devices on the X2M platform increased from 17,000 devices to 61,000 at the end of June 2021.

Revenue in Australia is currently limited to gas usage monitoring for a utility provider.

Unallocated corporate overheads and expenses included in this segment are comprised of governance overheads, Board costs, increased accounting costs and professional fees.

DIRECTORS REPORT

Governance

To the extent the Directors regard as appropriate to the size and stage of development of the Company, X2M has adopted the recommendations of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (4th edition) throughout the reporting period (exceptions are set out below). Details are provided in the Corporate Governance Statement. Given the Company has only recently listed on the ASX, the following governance principles will be implemented in 2022.

Governance Principles to be Implemented in 2022

The following governance principles will be adopted in the coming year.

The Board will undertake a review of the Board and Board Committees. In the meantime, whenever required, the Board as a whole will undertake the function of the Nomination Committee and a Remuneration Committee.
Company values will be formally launched internally and reported.
The approach to risk management will be formalised to include a risk management
framework and risk appetite statement.
Appointment of an internal audit function will be considered during the year.

Governance Principles to be Adopted at a Later Date

Due to the Company’s current size, the following governance principles won’t be adopted by X2M in 2022 but will be considered by the Board annually.

Appointment of a Nomination Committee.
Appointment of a Remuneration Committee.

Further details of the key corporate governance policies and practices of the Company during the year are set out in the Corporate Governance Statement on page 77. Full details of the Corporate Governance Statement are also available on the company website

Board and Committee Membership

Table 4 sets out the Directors of X2M and their attendance at Board and Committee meetings during the financial year. Details of their skills and experience are detailed on pages 15-16.

DIRECTORS	BOARDMEETINGS	BOARDMEETINGS	AUDIT& RISK COMMITTEE	AUDIT& RISK COMMITTEE
	ELIGIBLE	ATTENDED	ELIGIBLE	ATTENDED
AlanStockdale ▲	12	12	1◉	1◉
Jodie Leonard	12	12	1	1
DamienJohnston▲▲	12	12	1	1
John Stewart	12	12	1	1
MichaelAn	1	1	-	-
Lee Mayberry	1	1	-	-
Narender Lakhwani	-	-	-	-

Table 4: Board and Committee Membership. Legend: ▲ Chair of Board. ▲▲Chair of Audit and Risk Committee. ◉: Observer

BOARD OF DIRECTORS

Hon. Alan Stockdale AO

Independent Chair

B.A; LLB

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Background and Experience

Mr. Stockdale has significant legal, Government, investment banking and other business experience. He was Victorian Treasurer (19921999) and was the Minister for IT and Multimedia from 1996 to 1999. He was a successful barrister, law firm Partner and Consultant and worked as an investment banker for Macquarie Bank.

Mr. Stockdale is Chairman of Knosys Limited and was previously Chairman of ASX-listed companies Senetas, Axon Instruments and Symex (now Pental) and Chairman of the Medical Research Commercialisation Fund.

Special Responsibilities

Observer Audit & Risk Committee

Other Current ASX Roles Knosys Limited (ASX:KNO)

Former ASX Directorships (3 yrs)

Nil

Appointment Date

8[th] February 2021

Damien Johnston Non-Executive Director

B.Com; FCPA, MAICD

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Background and Experience

Mr. Johnston is an ASX experienced Finance Executive. Mr. Johnston was Chief Financial Officer at Tabcorp Holdings Limited until 2019 and held several senior financial roles at BHP Group Limited. Mr. Johnston has solid governance experience through his involvement on the Tabcorp Holdings Ltd Board and related committees. Mr. Johnston has extensive experience in mergers and acquisitions at Tabcorp Holdings Limited and BHP Group Limited.

Special Responsibilities

Chair Audit & Risk Committee

Other Current ASX Roles Nil

Former Directorships (3 yrs) Nil

Appointment Date 8[th] February 2021

Jodie Leonard

Non-Executive Director

B.Bus; FAICD;

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Background and Experience

Ms. Leonard is an experienced ASX Non‐Executive Director with a focus on companies undertaking growth and transformation. She has experience in a diverse range of industries including banking & financial services, technology & telecommunications, and media & entertainment. Ms. Leonard also has extensive governance experience, having worked in multiple APRA regulated entities.

Ms. Leonard is currently a NonExecutive Director of Great Ocean Road Coast & Parks Authority and was previously a Non-Executive Director of BWX Limited, Flexigroup Limited (now HUM), RACV, Beyond Bank Australia, Kinetic Superannuation, Racing Victoria and Tourism North East.

Special Responsibilities Member of Audit & Risk Committee

Other Current ASX Roles

Nil

Former ASX Directorships (3 yrs) Flexigroup Limited (ASX:FXL) BWX Limited (ASX:BWX)

Appointment Date 8[th] February 2021

John Stewart

Non-Executive Director LLB (Hons); Law; B.Com

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Background and Experience

Mr. Stewart has 25 years’ experience in merger and acquisition advisory roles and has been CEO of a start-up with 50 employees. Mr. Stewart held senior roles at Gresham Partners, Lazard, JPMorgan and Thomas Weisel Partners and has strong networks in business, venture capital, finance, law and politics. Mr. Stewart is a director of SSW Dairy Pty Limited, Stratford Retail Group (UK), Sovereign Investments, Gander APP Pty Ltd and Access Investing Limited.

Special Responsibilities

Member Audit & Risk Committee

Other Current ASX Roles

Nil

Former Directorships (3 yrs)

Michael An

Chair (former) B.Com

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Background and Experience

Mr. An is the Founder and Managing Director of Perle Ventures, a venture capital investment firm focused on large scale emerging technology opportunities globally. He has over 15 years’ experience across both venture capital and private equity sectors contributing as a founder, investor, board member and strategic consultant to multiple private and publicly listed companies including Catapult Sports (ASX:CAT), Temple & Webster (ASX:TPW) and Fiscal Note Inc. Mr. An is also a Venture Partner at Aura Group, a boutique corporate advisor and investment firm with more than $1 billion in assets under management and advice.

Resignation Date

12[th] February 2021

Narender Lakhwani

Non-Executive Director (former) CFA (Masters)

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Background and Experience

Mr. Lakhwani started his career in 2009 and has significant experience of capital markets and has worked in the areas of listed assets, private equity, venture capital and business development. Prior to joining Future Family Office in 2017, he was an Investment Associate at Cyan Limited – an investment arm of Dawood Hercules (conglomerate) making equity investments in growth-oriented businesses in Asia.

Mr. Lakhwani holds a Master of Finance degree from Melbourne Business School.

Resignation Date

17[th] November 2020

Nil

Appointment Date

8[th] February 2021

Lee Mayberry

Non-Executive Director (former) CPA B.Bus

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Background and Experience

Lee is a Certified Practicing Accountant with over 15 years of experience in supporting Private Equity, Family business, Investment & Analysis, Wealth transitioning & Estate planning and Accounting & Taxation. Lee is the CEO of the Future Family Office (6 founding partners of Carsales.com) where he advises and supports families in various roles including Family Wealth, Board Directorships & Consulting, Private Equity support and management of the groups Venture Capital Funds (Constant Innovation) and Property Funds (Fortune Building)

Brett Tucker

Joint Company Secretary B.Com; CA; GDipAppFin

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Background and Experience

Mr. Tucker is a charted accountant who has acted as company secretary to over 10 ASX listed companies across a wide range of industries, including communications and technology. Mr. Tucker has a strong knowledge of ASX Listing Rules and public company governance.

Resignation Date 8[th] February 2021

Board Skills and Experience

The Board comprises Directors with a diverse range of skills, experience, and backgrounds that support the effective governance and robust decision-making of X2M, with a particular focus on:

		DIRECTORS
SKILLS/EXPERIENCE	SUMMARY	WITH SKILL/
		EXPERIENCE

Asia Pacific Market	Experience working in/leading an organisation with global	4
	operations, or an understanding of different political,
Experience	cultural, regulatory, and business environments

	Experience defining strategic objectives, assessing	4
Strategy
	businessplans and drivingexecution.

	Expertise in adopting new digital technologies or
Digital, Data and	implementing technology projects, and experience with	4
	managing digital disruption, leveraging digital
Technology	technologies or understanding the use of data and data
	analytics.
Governance and	Experience in the design and application of corporate	4
	governance and compliance programs with a commitment
Compliance	to high standards ofgovernance.

	Understand financial drivers of the business and
Financial and Risk	experience implementing or overseeing financial	4
Management	accounting, reporting, internal controls, and risk
	management frameworks.

Mergers and	Experience in undertaking or overseeing corporate mergers	4
	and acquisitions with ability to evaluate transactions and
Acquisitions	govern the transitionphase.

Capital Management	Experience in capital management strategies including	4
	debt financing and capital raisings.

	Experience monitoring a company’s culture, OHS program,	4
People and Culture	people management, succession planning, and
	remuneration frameworks.
	Experience in a capacity requiring skills and knowledge in	4
Legal and Regulatory	relation to the law, especially with reference to company
	law and other relevant legal disciplines.
Government,	Experience in dealing with Governments and Government	4
Regulatory Agencies	agencies and a broad knowledge of the workings of
& Politics	governments and politics.
	Experience in dealing with and/or marketing and selling to	1
Infrastructure	infrastructure industries, especially electricity, gas water
	and otherutilities.

Table 5: Board Skills and Experience

EXECUTIVE KEY MANAGEMENT PERSONNEL

Mohan Jesudason

Chief Executive Officer B.Com; GDipMkt

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Keith Jelley

Chief Operating Officer and Joint Company Secretary B.Sc

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Background and Experience

Mr. Jesudason has over 30 years’ business and executive experience and was previously the Managing Director of Gaming and Group Marketing at Tabcorp Holdings Ltd for 10 years. He also worked at Telecom New Zealand (now Spark New Zealand Ltd) which included the position of Managing Director at Telecom Mobile.

Background and Experience

Mr. Jelley has over 35 years' experience in operations and technology development across 9 countries, delivering mission critical systems and transformations through major programs in the military, telecommunications, and embedded systems industries. Mr. Jelley held senior positions in the highly regulated gaming industry in Victoria.

Mr. Jesudason also worked at National Mutual/AXA (now AMP Limited) for 16 years where he served in a variety of roles from Graduate trainee to senior executive. Mr. Jesudason is a Director of the Melbourne Football Club, on the Advisory Board of Enterprise Victoria and a past Director of Racing Victoria Limited where he was also a Member of the Racing Integrity Council.

Principal Activities

X2M operates across Asia Pacific with offices in Australia, Japan, South Korea, Taiwan and China. The Company employed 38 people at year end.

X2M currently operates in the utility space in the Asia Pacific region. During the financial year, the principal continuing activities of the Group included:

Gas monitoring and control.
Water monitoring and control.
Energy monitoring and optimatisation.

The technology uses the internet to deliver productivity improvements, cost savings and improved public safety to enterprise and government customers. The technology connects devices over the internet and enables data exchange and the remote control of devices. It enables remote monitoring and control of devices and sensors, including utility meters and pressure sensors, to connect to each other and a centralized system via the internet.

X2M has more than 123,000 devices connected to its IoT platform and distributed intelligence solution. It generates real-time information and control to over 30 enterprise and government customers across Asia Pacific and operates over multiple radio technologies.

Company Secretary

Joint Company Secretaries were appointed on the 12[th ] of August 2020 to provide Company Secretarial support to X2M. Profiles of the Joint Company Secretaries can be found on pages 17 and 19.

Directors and Officers Liability Insurance

The Company’s Constitution provides that X2M will indemnify any current or former Director, Secretary or other Officer of the Company or a wholly owned subsidiary of the Company against:

a) any liability incurred by the person in that capacity.
b) legal costs incurred in defending, whether civil, criminal or of an administrative or investigatory nature in which the person becomes involved because of that capacity; and
c) legal costs incurred in good faith in obtaining legal advice on issues relevant to the performance of their functions and discharge of their duties.

Non-Executive Directors have entered into a Deed of Indemnity and Access that provides for indemnity against liability as a Non- Executive Director, except to the extent of indemnity under an insurance policy or as prohibited by law.

The Deed also entitles the Non- Executive Directors or Officers to access company documents and records, subject to confidentiality, and to receive Directors’ and Officers’ insurance cover paid for by the Company.

During the financial period, the Company paid a premium in respect of an insurance contract. Disclosure of the total amount of the premiums and coverage liability is prohibited by the policy.

Non-Audit Services

During the period, Grant Thornton, the Company’s Auditor, performed services in addition to their statutory duties. The Board are satisfied that the provision of these services is compatible with the Auditor independence requirements of the Corporations Act 2001 (Cth), as they did not involve reviewing or auditing the Auditor’s own work, acting in a management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing risks or rewards .

‑ Details of amounts paid to the Auditor for non audit services provided by the auditor in 2021 are outlined in Note 27 in the financial statements.

Dividends

Dividends were not paid, recommended, or declared in 2021. Due to the investment and growth stage of the Company’s strategy, there are no plans to pay dividends at this stage.

Proceedings brought on behalf of the Company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

Matters Subsequent to the end of the Financial Period

A number of significant matters have occurred since the 30[th] of June 2021. Details are noted below.

a) During the financial period, the COVID-19 pandemic has had a significant impact on local and international economies. Whilst in the short-term the Company has not had a major impact from the pandemic, the longer-term impacts of COVID-19 on the operations of the Group remain uncertain and cannot be quantified at this time.
b) On the 2[nd] of July 2021, the Company issued 5,219,448 fully paid ordinary shares to key management personnel under the Company's employee incentive scheme.

c) On the 7[th] of July 2021 and the 8th of July 2021, the Company received $0.2 million and $0.3 million funding respectively in the form of convertible notes. The convertible notes, together with a $1.5 million of convertible notes issued in June 2021, were converted into issued capital on the 14th of July 2021.
d) On the 14[th] of July 2021, the Company issued 1,486,704 fully paid ordinary shares to a key management person under the Company’s employee incentive scheme.
e) On 16[th] of July 2021, the Company issued 9,411,283 unlisted options to two key management personnel. These options had an exercise price of $0.25 expiring the 15[th] of July 2025.
f) On the 14[th] of September 2021, the company issued the following securities upon completion of the Public Offer a Replacement Prospectus lodged with ASIC:
32,000,000 fully paid ordinary shares at an issue price of $0.25, raising $8.0 million before costs.
5,408,029 unlisted options under the Employee Options Offer, exercisable at $0.3575 each. These options were subject to the satisfaction of vesting conditions, expiring the 13[th] of September 2025.
9,559,588 unlisted options under the Executive Options Offer, vesting immediately on issue. These options were exercisable at $0.3575 each, expiring the 13[th] of September 2025.
3,292,308 unlisted options to Lead Manager in two tranches:
- Tranche 1: 1,646,154 options, vesting immediately on issue, exercisable at $0.25 each, expiring the 13[th] of September 2024.
- Tranche 2: 1,646,154 options, vesting immediately on issue, exercisable at $0.3125 each, expiring the 13[th] of September 2024.
g) On the 22[nd] of September 2021, the Company commenced trading as a listed company on the ASX having completed an Initial Public Offering.
h) Since the 1[st] of July 2021, 5 new enterprise and government contract orders for a total of $0.8 million have been received.
i. one customer, Okcheon in South Korea, placed follow on orders totalling $0.4 million.
ii. two other existing customers in South Korea placed further orders; and
iii. one existing and one new customer placed gas monitoring and energy management orders respectively.

The above five orders are in addition to other business. X2M will also continue to deploy the $2.3 million Bucheon region contract in South Korea secured in April 2021, for which $1.8 million revenue is expected in FY 2022.

i) Mr. Brett Tucker and Mr Keith Jelley resigned as Joint Company Secretaries from the 30[th] of September 2021 and the 8th of October 2021 respectively. The Board appointed Mr. Oliver Carton as Company Secretary from the 1st of October 2021. Details of Mr. Carton’s qualifications and experience can be found on the Company website.

No other matter or circumstance has arisen since the 30[th] of June 2021 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.

Use of funds

As X2M was admitted to the Official List after the end of the Reporting Period there was no use of cash assets to be reported under Listing Rule 4.10.19.

Likely Developments and Expected Results of Operations

X2M will continue to focus on growing its customer base providing utility monitoring and control services in the APAC region. The Group will continue to add devices to its IoT platform and focus on growing platform subscription revenue.

Environmental Regulation

The Group does not have any significant obligations under environmental legislation or regulation in Australia or any of the other jurisdiction in which it operates.

Key Risks

An exhaustive list of risks was outlined in the Prospectus. A copy of the Prospectus can be found on the Company website at www.x2mconnect.com.

Other Information

The following information, contained in other sections of this Annual Report, forms part of this Directors’ Report:

i. Operating and Financial Review details in pages 6 to 13 inclusive in the Annual Report.
ii. Matters subsequent to end of the financial year as outlined in pages 21 to 22 and note 33 of the financial statements.
iii. The Remuneration Report in pages 24 to 35.
iv. Auditor’s Independence Declaration on page 36.

This Report is made in accordance with a Resolution of the Directors of X2M and is dated 30[th] of September 2021.

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HON. ALAN STOCKDALE AO MOHAN JESUDASON CHAIRMAN CHIEF EXECUTIVE OFFICE

REMUNERATION REPORT

The Board of Directors are pleased to present the Remuneration Report for X2M Connect for the financial year ended the 30[th] of June 2021.

Given the size of the Company, the responsibilities of the Remuneration and Nomination Committee are overseen by the full Board of Directors. The need for a separate Committee will be reviewed annually and appointed once the Company builds further scale.

At X2M, people are our greatest asset, and the Company aims to provide a workplace that delivers high levels of employee engagement and satisfaction. We have a high-performance culture that supports our pace of growth and aspiration, and we strongly believe that everyone in the team needs to align with the Company values and expectations to drive business performance.

Diversity is about our commitment to treating everyone equally and with respect. We embrace diversity and are represented by over 8 nationalities and speak 10 languages. We believe our diverse and inclusive culture helps drive our innovative and entrepreneurial spirit.

Gender diversity remains a challenge across the technology industry. Given the current size of the team and the limited opportunity for change, we will only be able to address gender diversity as we add to or replace team members. However, the Company is an equal opportunity employer and will seek to improve gender diversity as the business grows. Details of the Company’s diversity targets can be found in the Corporate Governance Plan on the X2M company website at www.x2mconnect.com and on page 77 of this report.

Remuneration Overview

Strategic Priorities

The remuneration framework is designed to support the Company’s strategic priorities. A clear set of principles have been agreed which guide the Companies remuneration decisions, and remuneration plans are designed to reflect that X2M is an early-stage technology company.

The Board determines and reviews the Company’s remuneration strategy to ensure it aligns the interests of KMP and staff generally with the interests of shareholders and that it provides a strong link between performance and reward. Executive reward outcomes are dependent on delivering long term value to shareholders, as well as attracting, motivating, and retaining top talent by offering market competitive remuneration and incremental reward for delivery of strong results.



Commercialise our	Build Footprint Across	Increase Market	Increase Revenue	Build Our
			from SaaS
Technology	Asia Pacific	Penetration	Licensing	Capability

Table 6: Remuneration Strategy

Remuneration Principles

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Attract and Retain Align with Performance Reward Merit
Talent Strategy Focused Fairly Based
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Table 7: Remuneration Principles.

Remuneration Governance

The Board actively reviews the remuneration principles and framework and may apply discretion, so it effectively delivers appropriate outcomes for shareholders, customers, and the team.

Remuneration Framework

The remuneration framework outlined below has been structured to support the group strategy.



Total Fixed Remuneration(TFR)	Short Term Incentive (STI)	Long Term Incentive (LTI)

	Rewards current year	Reward long-term sustainable
Attract and retain the best talent.
	performance.	performance.

Base salary and superannuation.	Annual cash payment.	Options or performance rights

TFR is set in relation to the external
	STI provides appropriate	LTI supports alignment to long-
market and considers size and	differentiation of pay for	term overall Company
complexity of role along, with	performance and is based on	performance and aligns with
individual responsibilities,	business and individual	shareholder value.
experience, and skills.	performance outcomes.

TFR positioning is 50thto 75th		Hurdles set to align with
percentile of the market comparator	2021 objectives based on	strategic business drivers and
group.	achieving personal KPI’s.	long-term shareholder value.

Table 8: Remuneration Framework.

2021 Executive KMP Remuneration Mix

The mix of fixed remuneration vs at risk remuneration for FY 2021 is shown in Graph 2 below. It reflects the breakdown of annual Total Fixed Remuneration (TFR), short term incentive (STI) potential, and the long-term incentive (LTI) opportunity should performance hurdles be met. The remuneration mix for Executive KMP’s reflects remuneration agreements in place prior to listing and is weighted towards at risk remuneration.

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Graph 2: 2021 Executive KMP Remuneration Mix FY 2021

Last Year’s Performance on Key Metrics

In assessing performance against defined key performance indicators (KPI’s), the Board reviews the Group’s financial and other key performance indicators and milestones to determine whether Executives and other staff are eligible for awarding a short term or longterm incentive and, if so, to what extent. Financial results are independently verified by the Company’s external Auditors. In the event of serious misconduct or material misstatement, the Board can cancel, defer or reduce performance-based remuneration.

FY 2021 Executive Remuneration at a Glance

EXECUTIVE KMP	FIXED REMUNERATION	SUPER	STI	LTI	OTHER	TOTAL
Mohan Jesudason Group CEO	$465,704	$21,694	$0	$1,165,431	$33,948	$1,686,777
Keith Jelley1 COO & Joint CoSec	$262,597	$21,694	$172,000	$450,423	$14,102	$920,816

Table 9: Executive KMP Remuneration Earned in FY 2021

1 Mr Jelley was paid $172,000 sign on bonus upon signing his contract on the 21st of May 2021 and this is shown as an STI in Table 9.

Executive KMP Remuneration

Key Performance Indicators

Key Performance Indicators (KPI’s) are set by the Board and reviewed annually, with targets based on the delivery of key drivers of the annual business plan. In 2021, the KPI’s reflected prelisting priorities and focussed on:

Successfully listing on the ASX
Achieving revenue targets
Delivering growth of connected devices
Building the sales pipeline
OPEX management
Cashflow management

Short Term Incentive (STI)

The STI plan primarily focusses on the delivery of personal KPI’s.

Prior to listing, STI arrangements were negotiated on different terms and conditions across the Company. In 2021, the CEO was the only KMP eligible to earn an STI. The quantum of the CEO’s STI payment reflects the risk and reward of successfully establishing and leading the Company through the acquisition of Freestyle Technology’s assets, developing the Company’s business model and taking the Company to listing. It also represents the opportunity cost of not pursuing other opportunities external to X2M.

The STI entitlement was not awarded in 2021 and payment will be considered in 2022.

The payment made to the Chief Operating Officer reflects a sign on bonus paid for re-signing with the Company and has been noted in the table below for transparency. Table 10 details the Executive KMP STI arrangements in the reporting year.

	STI ARRANGEMENTS	STI$ VALUE
Mohan Jesudason	Upon the Company meeting all the ASX conditions required for
Group CEO
	admission to the ASX Official List, Mr. Jesudason will receive a bonus	$525,381
	equivalent to 1.5% of the Company's post-IPO money valuation

	immediately precedingtradingon the ASX.
Keith Jelley	Sign on bonus pursuant to the 12th ofMay 2021 employment
		$172,000
COO & Joint CoSec
	agreement.

Table 10: Details of Executive KMP STI arrangements FY 2021.

Long Term Incentive Plan (LTI)

The LTI plan aligns key management personnel with shareholder objectives and expectations. A fundamental principle of the plan is to ensure that KMP are rewarded when shareholders are rewarded. The LTI plan is also a key retention tool and plays an important part in attracting top talent and retaining key executives.

In order to incentivise KMP and align with shareholder objectives, the 2021 LTI plan provided for the potential to be awarded shares, performance rights and options. A summary of the key LTI plan terms and conditions follow in Table 11 and 12.

Incentive Share Plan Terms and Conditions

TERMS & CONDITIONS OF EMPLOYEE INCENTIVE SHARE PLAN	TERMS & CONDITIONS OF EMPLOYEE INCENTIVE SHARE PLAN
FEATURE	DESCRIPTION
Eligibility	Directors,employees,and contractors are eligible toparticipate.
	The Board is responsible for the operation of the Share Plan and has broad
Administration of Plan
	discretion to administer theplan.

Issue Price	Determined by theBoard.
	Except in the case of Directors, the KMP and other employees must meet plan
Vesting Condition
	conditions including current employment, and eligibility. May vest under special
	conditions includingdeath & disability,retirement,or redundancy.
	Unvested shares lapse at the time of resignation unless determined by the Board.
Resignation
	Shares will vest pro rata to the proportion of the period from the date of issue to
	the date of resignation and must be Board approved.
Hedging	Hedging prohibited
	Forfeiture can occur under conditions that include:
	• Plan vesting conditions not satisfied
Forfeiture	• Participant no longer an eligible participant
	• Board discretion to cancel the plan

	• Change of control or a winding up resolution or order is made, and the
	Board does not waive the vestingcondition.
Malus & Claw Back	Forfeiture due tofraud, dishonesty, orother improperbehaviour
	Transfers not permitted unless the sale, transfer or disposal requires the
Restriction on Transfer
	preparation of a disclosure document

	Plan shares quoted on ASX and subject to the Listing Rules, as well as any holding
Quotation on ASX
	lock applyingto that applies to the shares.

	Same terms and conditions as the Company’s issued shares (other than plan
Rights Attaching to
	transfer restrictions). Shares will have equal rank with all other issued Shares
Plan Shares	from the issue date (except for entitlements which have a record date before the
	issue date)
	The Board retains discretion for Shares to be held by a Trustee on trust, and the
Appointment of
	Board maintains power to approve or deny application to withdraw Shares held
Trustee
	bythe Trustee on their behalf.

Maximum Number of	8,395,387 Shares (being, 5% of the issued capital of the Company post IPO on a
Shares	fullydiluted basis).

Table 11: Summary of LTI Share plan terms and conditions FY 2021

Performance Rights and Options Plan Terms and Conditions

TERMS & CONDITIONS – EMPLOYEE INCENTIVE PERFORMANCE RIGHTS AND OPTIONS PLAN

TERMS & CONDITIONS – EMPLOYEE INCENTIVE PERFORMANCE RIGHTS AND OPTIONS PLAN	TERMS & CONDITIONS – EMPLOYEE INCENTIVE PERFORMANCE RIGHTS AND OPTIONS PLAN
FEATURE	DESCRIPTION
	Directors, employees (full time and part time) and key contractors are eligible to
Eligibility
	participate.

	Each Option entitles the holder to subscribe for one Share upon exercise of the
Entitlement
	Option

	Nil cash consideration. Unless the Options are quoted on the ASX, Options issued
Issue Price
	will be issued for no more than nominal cash consideration.

Options Exercise Price	Determined by theBoard
	An Award may be made subject to vesting conditions as determined by the Board
Vesting Conditions	in its discretion and as specified in the offer for the Awards. Shares may vest
	under special conditions including death & disability, retirement or redundancy

	or other special circumstances includingfinancial hardship.
	Subject to the Listing Rules, Awards are only transferrable in Special
	Circumstances with the prior written consent of the Board (which may be
Not Transferable
	withheld in its absolute discretion) or by force of law upon death, to the
	Participant’s legal personal representative or upon bankruptcy to the
	participant’s trusteeinbankruptcy.
	Shares resulting from the exercise of the Awards shall, rank on equal terms with
Shares
	all otherShares on issue.

	Within 10 Business Days of the later of the date the Shares are issued and the
Quotation of Shares
	date anyRestriction Period applyingto the Shares ends.

	There are no participation rights or entitlements inherent in the Awards and
No Participation Rights
	Participants will not be entitled to participate in new issues of capital offered to
	Shareholders during the currency oftheAwards without exercising theAward.
Hedging	Hedging prohibited
	Forfeiture can occur under conditions that include:
	• Plan vesting conditions not satisfied.
Forfeiture & Lapsing	• Participant no longer an eligible participant.
	• Board discretion to cancel the plan.

	Change of control or a winding up resolution or order is made, and the Board does
	not waive the vesting condition
Malus & Claw Back	Forfeiture due to fraud, dishonesty, or other improper behaviour
	Subject to the terms of an Offer, where a Participant becomes a Good Leaver:
	• Options will continue in force and remain exercisable until the Expiry
Good Leaver	Date
	• Performance Rights held will continue in force and remain exercisable.

	The Board has discretion to allow some or all of unvested awards to be held with
	theremainderlapsing.
	Unless determined by the Board otherwise, if Bad Leaver determined, all vested
Bad Leaver
	Awards not yet exercised will remain in force and exercisable until 1 month after
	termination date thereafter automatic lapse will occur.
Change in Exercise price
	No right to a change in exercise price or in the number of underlying Shares over
of no. underlying
	which the Award can be exercised.
securities

	Rights consistent with the Corporations Act and the Listing Rules at the time of
Re-organisation
	the reorganisation.

	In lieu of paying the aggregate Exercise Price, the Board may, permit holder to
	receive, without payment of cash or other consideration, (upon surrender) a
	number of Shares determined in accordance with the following formula:
	A = [B x (C – D)]/ C where:
Cashless exercise	A = the number of Shares (rounded down to the nearest whole number) to be
	issued to the Participant.

	B = the number of Shares otherwise issuable upon the exercise of the Option or
	portion of the Options being exercised.
	C = the market value of one Share; and
	D =theExercisePrice.
	The Board may make amendments subject to plan rules, the Corporations Act,
Amendments
	ListingRules, and any otherapplicable law

Maximum Number of	16,790,774 Securities (being 10% of the issued capital post IPO on a fully diluted
Securities	basis at listing assuming the MaximumSubscription israised public the offer).

Table 12: Summary of LTI Performance Rights and Options Plan FY 2021.

Long Term Incentive Plan Commitments

Prior to listing, KMP LTI arrangements were also negotiated on different terms and conditions. Table 13 details the individual Executive KMP LTI arrangements. The commitments outlined are one off and reflect listing incentives and foregone incentive commitments.

	EXECUTIVE KMP LTI EQUITY ARRANGEMENTS 2021	EXECUTIVE KMP LTI EQUITY ARRANGEMENTS 2021	EXECUTIVE KMP LTI EQUITY ARRANGEMENTS 2021
	EQUITY VEHICLE	ISSUE PRICE	VESTING PERIOD	QUANTUM	VALUE OF AWARD
Mohan Jesudason Group CEO	Shares	$Nil	Immediatelyupon award	9,323,448	$1,165,431
Keith Jelley COO & Joint CoSec	Shares	$ Nil	Immediately uponaward	3,603,384	$450,423

Table 13: Executive KMP LTI Plan Arrangements FY 2021.

Remuneration Governance

The Role of the Board

Ultimately, the Board is responsible for the Company’s remuneration policies and practices. The role of the Board is to ensure that appropriate and effective remuneration packages and policies are implemented to attract and retain high quality Executives and Non-Executives Directors, and to motivate Executives to create value for our shareholders.

When reviewing performance and determining incentive outcomes, the Board ensures that performance outcomes align with market-reported outcomes, management activity and shareholder outcomes. To achieve this alignment, the Board retains discretion over final performance and incentive outcomes and recognises that there are cases where adjustments should be sought.

The Board also monitors compliance with Board approved remuneration policies and practices and stays abreast of remuneration trends and the general external environment.

Remuneration Consultants

In accordance with section 206K of the Corporations Act 2001, the Board can engage remuneration consultants to receive information, advice, and recommendations directly from remuneration consultants to ensure remuneration recommendations are free of undue influence by management. In consultation with external remuneration consultants, the Company aims to provide a market competitive remuneration framework that is complementary to our remuneration strategy.

No remuneration recommendations were made in 2021, however KMP remuneration was benchmarked using independent market data.

Non-Executive Director Benefits

Independent Non-Executive Directors

In preparation for listing, an independent Board was appointed on the 8[th] of February 2021. The independent Non-Executive Director fees are paid from an aggregate annual fee pool of $400,000, as approved by shareholders on the 30[th of] March 2021. Fees and payments to independent Non-Executive Directors reflect their responsibilities and the demands that are made on the Non-Executive Directors. Details are set out in Table 14.

INDEPENDENT DIRECTORS	ANNUAL FEES	ANNUAL FEES
	2021 ANNUAL BASIS	2021 ACTUALS 2
Chairman 3	$109,500	$88,354
Non-Executive Director	$50,000	$19,589
Audit &RiskCommittee Chair	No additionalfee	$19,589
Audit & Risk Committee Member	No additional fee	$19,589

Table 14: Non-Executive Director fees including superannuation

All Directors are entitled to reimbursement for reasonable travel, accommodation, and other expenses in attending meetings and carrying out their duties. Non-Executive Directors were also entitled to participate in the Employee Incentive Plans in 2021. Director participation is not subject to Company business performance criteria or conditions.

Payment to Former Directors

Prior to the appointment of the independent Board, the Board consisted of 3 Directors who represented the major shareholders. The Directors approved the appointment of the Independent Board Directors, and all former Directors resigned by the 12[th of] February 2021.

In lieu of fees, the former Chair (Michael An) was awarded equity prior to listing. The former Chair’s nominee was issued 682,746 fully paid ordinary shares (post consolidation) for nil cash consideration for services provided to the Company. Further details can be found in Note 30 of the financial statements.

Non-Executive Directors Equity

Prior to listing, Non-Executive Directors were able to take part in the Company’s Long Term Incentive Plan as part of their remuneration. Non-Executive Directors were awarded Performance Rights to ensure alignment with the Company goals in the initial phase of the Companies listing. Non-Executive Directors were awarded Shares in 2021 and will be awarded options under the Prospectus Offers in 2022. Shares and options issued to Directors are not subject to any business performance conditions and the amount is not material enough to influence independence.

Non-Executive Director Minimum Shareholding Requirements

There is no minimum shareholding requirement for Non-Executive Directors, however, all Non-Executive Directors are shareholders.

2 Remuneration for year ended 30th of June 2021 including superannuation (pro rata from date appointed – 8th of February 2021. 3 Includes monthly consulting fees of $7,575.75 ex GST paid from 1st of August 2020 to 31st of January 2021 totaling $45,455.

KMP Statutory Disclosures

KMP Remuneration

The following tables detail the KMP remuneration expense recognised for the current and previous financial year.

				LONG
	CASH SALARY	CASH		SERVICE	EQUITY
DIRECTORS	& FEES	BONUS	SUPER	LEAVE	SETTLED	TOTAL

*2021*
Alan Stockdale4	$84,362	-	$3,722	-	$72,068	$160,422
JodieLeonard 5	$17,889	-	$1,700	-	$36,034	$55,623
Damien Johnston6	$17,889	-	$1,700	-	$36,034	$55,623
JohnStewart 7	$17,889	-	$1,700	-	$36,034	$55,623
MichaelAn8	-	-	-	-	$124,943	$124,943
Narender Lakhwani9	-	-	-	-	-	-
Lee Mayberry10	-	-	-	-	-	-
*Total*	$138,299	$0	$8,822	$0	$305,113	$452,234
*2020* 11
AlanStockdale	-	-	-	-	-	-
Jodie Leonard	-	-	-	-	-	-
DamienJohnston	-	-	-	-	-	-
John Stewart	-	-	-	-	-	-
MichaelAn	-	-	-	-	-	-
Narender Lakhwani	-	-	-	-	-	-
Lee Mayberry	-	-	-	-	-	-
*Total*	$0	$0	$0	$0	$0	$0

Table 15: Non-Executive Director Remuneration expense for FY 2021 and FY 2020.

	CASH SALARY &			LONG
				SERVICE	EQUITY
EXECUTIVE KMP	FEES	CASH BONUS	SUPER	LEAVE	SETTLED	TOTAL
*2021*
MohanJesudason	$465,704	-	$21,694	$33,948	$1,165,431	$1,686,777

KeithJelley	$262,597	$172,000	$21,694	$14,102	$450,423	$920,816
*Total*	$728,300	$172,000	$43,388	$48,050	$1,615,854	$2,607,593
*2020 12 (1 Feb - 30 Jun)*
MohanJesudason	$177,717	-	$8,751	$5,912	-	$192,380
Keith Jelley	$94,972	-	$8,751	$4,409	-	$108,132
*Total*	$272,689	$0	$17,502	$10,321	$0	$300,512

Table 16: Executive KMP Remuneration $ for FY 2021 and FY 2020.

4 Appointed 8th of February 2021. Prior to his appointment, Mr. Stockdale received monthly consulting fees of $7,575.75 excluding GST from 1st of August 2020 until the 31st of January 2021, totaling $45,455. This has been disclosed in the "Cash salary and fees" column. 5 Appointed 8th of February 2021.

6 Appointed 8th of February 2021.

7 Appointed 8th of February 2021.

8 The Company issued Mr. An’s nominee Null Cipher 720,000 fully paid ordinary shares on the 12th of February 2021 (259,201 post the share consolidation on the 7th of June 2021) and 423,546 fully paid ordinary shares on the 30th of June 2021 as compensation for Chairman and Director services rendered. Mr. An resigned on the 12th of February 2021.

9 No remuneration was received in 2021. Mr. Lakhwani resigned on the 17th of November 2020.

10 No remuneration was received in 2021. Mr. Mayberry resigned on the 8th of February 2021.

11 Directors did not receive income in 2020.

12 Although the Company was incorporated on the 9th of December 2019, Mr. Jesudason & Mr. Jelley commenced their employment on the 1st of February 2020.

KMP Shareholdings

The tables below detail the number of ordinary shares and options in X2M that were held during the financial year by key management personnel, including their related parties.

Movement in Ordinary Shares and Options

The movement during the reporting period in the number of ordinary shares held, directly, indirectly, or beneficially, by each KMP, including their related parties follows:

TOTAL KMP SHAREHOLDINGS EARNED AS REMUNERATION 2021	TOTAL KMP SHAREHOLDINGS EARNED AS REMUNERATION 2021	TOTAL KMP SHAREHOLDINGS EARNED AS REMUNERATION 2021	TOTAL KMP SHAREHOLDINGS EARNED AS REMUNERATION 2021	TOTAL KMP SHAREHOLDINGS EARNED AS REMUNERATION 2021
					BALANCE AT
		RECEIVE AS PART OF
ORDINARY	BALANCE AT START	REMUNERATION		DISPOSALS	THE END OF
SHARES 2021			ADDITIONS	& OTHER	THE PERIOD
		POST CONSOLIDATION

*Directors*

AlanStockdale	-	576,541	-	-	576,541

JodieLeonard	-	288,271	-	-	288,271

DamienJohnston	-	288,271	-	-	288,271

JohnStewart	-	288,271	-	-	288,271

MichaelAn13	-	682,746	-	(682,746)	-

Narender Lakhwani	-	-	-	-	-

Lee Mayberry	-	-	-	-	-

*Executive KMP*			-	-	-

MohanJesudason	-	9,323,448	-	-	9,323,448

Keith Jelley	-	3,603,384	-	-	3,603,384

*Total*	-	14,627,386	-	(682,746)	14,368,186

Table 17: Total KMP Shareholdings (post consolidation) received as part of FY 2021 remuneration.

Shares and Options Outstanding

Table 18 sets out the grants and outstanding number of shares for KMP. No amounts were paid or are payable by the recipient on receipt of the shares.

	OUTSTANDING KMP SHARE RIGHTS	OUTSTANDING KMP SHARE RIGHTS	OUTSTANDING KMP SHARE RIGHTS	OUTSTANDING KMP SHARE RIGHTS	OUTSTANDING KMP SHARE RIGHTS
	AWARD GRANT DATE SHARES14 FAIR VALUE PER SHARE VALUE
*Directors*
	2021 Tranche1	24/03/2021	218,880	$0.125	$27,360
Alan Stockdale	2021 Tranche 2	30/06/2021	357,661	$0.125	$44,708
	2021 Tranche 1	24/03/2021	109,440	$0.125	$13,680
Jodie Leonard	2021 Tranche 2	30/06/2021	178,831	$0.125	$22,354
	2021 Tranche 1	24/03/2021	109,440	$0.125	$13,680
Damien Johnston	2021 Tranche 2	30/06/2021	178,831	$0.125	$22,354
	2021 Tranche 1	24/03/2021	109,440	$0.125	$13,680
John Stewart	2021 Tranche 2	30/06/2021	178,831	$0.125	$22,354
Michael An15	2021 Tranche1	12/02/2021	259,200	$0.278	$72,000
	2021 Tranche2	30/06/2021	423,546	$0.125	$52,943

13 Mr An resigned on 12 February 2021. The balance disclosed in Disposals/Other represents all shares issued to him in the period

14 Shares are on a post consolidation basis and have nil tax value as they were issued under the Employee Share Scheme Start Up Concession. The fair value per share reflects the accounting value of the shares.

15 The shares issued to Mr. An’s nominee are on a post consolidation basis and have nil tax value as they were issued under the Employee Share Scheme Start Up Concession. The fair value per share reflects the accounting value of the shares.'

	OUTSTANDING KMP SHARE	OUTSTANDING KMP SHARE	RIGHTS (CONTINUED)	RIGHTS (CONTINUED)
	AWARD	GRANT DATE	SHARES16	FAIR VALUE PERSHARE	VALUE
*Executive KMP*
Mohan Jesudason 17	2021 Tranche1	25/03/2021	4,104,000	$0.125	$513,000
	2021 Tranche 2	2/07/2021	5,219,448	$0.125	$652,431
Keith Jelley	2021 Tranche1	24/03/2021	1,440,000	$0.125	$180,000
	2021 Tranche 2	30/06/2021	2,163,384	$0.125	$270,423

Table 18: Outstanding KMP Shares

All shares are restricted for 3 years from date of issue. No options were granted in FY 2021.

Other Services Obtained from Related Parties

a) Consulting Services Provided prior to Appointment to Independent Board

Prior to being appointed as the Chair of the Company, Mr. Stockdale acted in a consulting capacity to the Company. EC Strategies Pty Ltd was paid fees of $7,575.75 (ex GST) from 1[st] of August 2020 to 31[st] of January 2021 totaling $45,455, for consulting services provided by Mr. Stockdale. See Note 30 of the financial report for further details.

b) Reimbursement to Executive KMP

In June 2021, X2M paid $70,000 to the CEO Mr. Mohan Jesudason for reimbursement of past costs. The company also paid $16,000 for graphic design and supporting services to Azimbo Consulting Pty Ltd, an entity associated with the COO, Keith Jelley. The transactions were made on normal commercial terms.

c) Loans to KMP and Their Related Parties

No loans were provided from the Company to any key management person or their related parties in 2021.

d) Loans from KMP and Their Related Parties to the Company

Michael An is a Director of Perle Ventures Pty Ltd and was a Director of X2M Connect Limited until 12[th] of February 2021. Perle Ventures engaged in a number of dealings with X2M during the current year and the previous period. Perle Ventures subscribed to convertible notes in the prior period on similar terms to other convertible notes issued at that time (see note 19) and which were converted in the current year, and they participated in loan funding and other transactions all in a total amount of $1,471,967. As at 30 June 2021, there was an outstanding balance of $329,460 to Perle Ventures Pty Ltd which was extinguished on 26[th] of July 2021.

There were no other related party transactions.

16 Shares are on a post consolidation basis and have nil tax value as they were issued under the Employee Share Scheme Start Up Concession. The fair value per share reflects the accounting value of the shares. 17 On the 1[st] of July 2021, Mr. Jesudason was issued 5,219,448 fully paid ordinary shares at a fair value per share price of $0.125 (per share). The service commencement date of these shares deemed to be 1[st] of July 2020.

AUDITORS INDEPENDENCE DECLARATION

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2021 FINANCIAL REPORT

Income Statement

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Statement of financial position

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Statement of changes in equity

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Statement of Cashflows

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Notes To Financial Statements

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DIRECTORS DECLARATION

X2M Limited Directors' declaration 30 June 2021

In the Directors' opinion:

The attached financial statements and notes comply with the Accounting Standards as described in note 2 to the financial statements;
The attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2021 and of its performance for the financial period ended on that date; and
There are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

The directors have been given the declarations required by section 295A of the Corporations Act 2001.

On behalf of the Directors

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Hon. Alan Stockdale AO Non-Executive Chairman

30[th] September 2021

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CORPORATE GOVERNANCE STATEMENT AS AT 19[TH] SEPTEMBER 2021

X2M (the Company) is committed to achieving and demonstrating the highest standards of corporate governance to protect and enhance shareholder interests.

This Corporate Governance Statement reports against the ASX Corporate Governance Principles and Recommendations (4th Edition) (ASX Principles). The practices detailed in the Corporate Governance Plan are current as of the 19th of September 2021 and have been approved by the Board. A full copy of the Corporate Governance Plan can be found on the company website at www.x2mconnect.com. Key details of the plan are detailed below.

Principle 1: The Board Lays Solid Foundations for Management Oversight

Board Responsibilities and Delegations

The Company’s Board Charter was adopted by the Board in February 2021. The Board Charter is located on the Company website at www.x2mconnect.com.

The Board Charter provides a framework for the effective operation of the Board, setting out:

a) the Board’s role and responsibilities and size and composition.
b) the establishment The Audit and Risk Committee (as described below) and the Board’s ability to delegate any of its powers to a Board Committee, a Director or other person from time to time, subject to ultimate responsibility residing with the Directors;
c) the responsibilities delegated by the Board to the Chief Executive Officer

(CEO) and members of the Executive Team; and

d) the role of the Board Chair and the Company Secretary.

The Board Charter provides that the Board's role is to, amongst other things:

a) set X2M’s values and standards of conduct and ensure that they are adhered to.
b) provide and demonstrate leadership.
c) define and set X2M’s strategic direction.
d) monitor the operational and financial position and performance of the Company and monitor that the Company is properly managed to protect and enhance shareholder interests and
e) adopt internal controls, a risk management framework, as well as corporate governance policies and practices that promote the responsible management and conduct of X2M.

The Board’s responsibilities include:

a) the appointment of a Chair.
b) the appointment and removal of the CEO.
c) approval of X2M’s Group’s statement of values and Code of Conduct; and
d) approval of major capital expenditure, acquisitions, and divestitures in excess of authority levels delegated to management.

The Board Charter provides that the Company Secretary is accountable to the Board through the Chair on all matters to do with the proper functioning of the Board. This includes advising the Board and its Committees on governance matters and

monitoring that Board and Committee policies and procedures are followed.

The Board Charter delegates responsibility for day-to-day management and administration of X2M to the CEO and members of the Executive Team. The CEO is responsible for providing effective leadership, direction and supervision of the Executive Team to achieve the strategies, business plans and budgets adopted by the Board and in accordance with the values and culture set by the Board. The Board has procedures in place to regularly assess the performance of the CEO and members of the Executive Team.

Board Committees

The Board has established an Audit and Risk Committee to assist it in discharging its function. All other responsibilities are managed by the full Board.

Board Meetings

The Board meets as often as necessary to fulfil its role. Directors are required to allocate sufficient time to X2M to perform their responsibilities effectively, including adequate time to prepare for Board meetings. From the 8[th] of February 2021 when the Independent Board was established, the Board met 12 times.

For full details of Directors’ attendance at Board and Committee Meetings for 2021, refer to “Board and Committee Meeting Attendance” on page 14.

Access to Information and Independent Professional Advice.

Directors have access to Management to seek explanations and information, as well as to the Auditors to seek explanations and information without Management present, at any time they consider it appropriate. The Board collectively, and each Director

individually, has the right to seek, at the expense of the Company, any independent professional advice that they consider necessary to fulfil their responsibilities subject to the approval of the Chair which cannot be unreasonably withheld or delayed.

The Company has appointed a Company Secretary who is accountable to the Board, through the Chair, on all matters to do with the proper functioning of the Board.

Remuneration Committee

Due to the size of the Board, X2M does not have a separate Remuneration Committee. The roles and responsibilities of the Remuneration Committee are currently undertaken by the Board.

Background Checks Before Appointing Directors and Senior Executives

X2M formally undertakes background checks for Directors and senior executives and will require certain information to be provided to shareholders each time an existing Director stands for re-election. In addition, the Company will provide shareholders with any other material information relevant to a decision on whether to elect or re-elect a Director at a General Meeting.

Prior to the appointment of a new Director or senior executive (being a member of the Executive Team), the Board undertakes appropriate background checks as to the candidate’s character, experience and education and confirms that the candidate does not have a criminal record. For Directors only, confirmation is also obtained that the Director is not an undischarged bankrupt. Having satisfied the background checks, the candidate for a Director is required to provide the Chair with the commitment that they will have adequate time to fulfil their

responsibilities as a Non-Executive Director of X2M. The Chair must be satisfied that the candidate for Director can materially contribute to the overall skills and experience of the Board with reference to the X2M Director Skills Matrix.

X2M has entered into written agreements with each Director setting out the terms, conditions and responsibilities of their appointment, as well as the key terms of all employment, service or consultancy agreements with the CEO, the Directors and any other related parties to the CEO and the Directors.

Diversity

Consistent with X2M’s values, the Company is committed to providing an inclusive, equitable and fair workplace where everyone is treated with respect and dignity regardless of gender, marital or family status, sexual orientation, gender identity, age, ability, ethnicity, religious beliefs, cultural background, socioeconomic background, perspective, and experience.

X2M’s Diversity Policy includes requirements to ensure that employment related decisions are transparent, equitable and fair; that a diverse range of candidates are considered for positions; to guard against any conscious or unconscious biases that might discriminate against certain candidates; to ensure that staff have access to development and career opportunities based on merit; and to ensure a workplace which is free from discrimination, harassment, bullying, victimisation and vilification.

The Board is responsible for reviewing the Company’s Diversity Policy periodically to check that it is operating effectively. The Diversity Policy was approved by the Board in February 2021 and a copy is available on the X2M website at www.x2mconnect.com.

Diversity Status

The Board plays a specific role in driving diversity, particularly gender diversity across the business by reviewing and approving annual diversity objectives and progress towards these objectives.

X2M has a diverse workforce and is represented by a broad range of ages and nationalities. Gender diversity remains a challenge across the technology industry and is represented in the table below. However, X2M is an equal opportunity employer and is committed to improving diversity as the business scales. The workforce diversity as at the 30[th] of June 2021 follows:

	FEMALE	FEMALE	MALE	MALE

	NUMBER	%	NUMBER	%

Board*	1	25%	3	75%
Senior
	2	10%	10	83%
Management**

Total Employees	7	16%	38	84%

Table 19: Diversity status of the 30[th] of June 2021.

(The Board target is below the market expectation of ≥30% as the Board only consists of 4 Directors. *Senior Management includes the CEO and the Executive Team who report to the CEO.)

The Board is responsible for assessing whether there is any gender or other inappropriate bias with respect to the remuneration of Directors, the Executive Team or other employees. The Board also sets and reviews the diversity targets annually.

Diversity Targets

X2M set gender diversity targets annually. Given the current size of the team and the limited opportunity for change, X2M will only be able to address gender diversity as it adds to or replaces team members. However, the Company is an equal

opportunity employer and will seek to improve gender diversity as the business grows.

The midterm gender diversity targets are:

	TARGET
Board*	≥25%
SeniorManagement**	≥25%
TotalEmployees	≥25%

Table 20: Midterm Diversity Targets

Performance Review of the Board

The X2M’s Board Charter requires an annual Board assessment and review of its performance, its committees, and Directors annually. Given the timing of the Boards appointment in 2021, a review was not undertaken but will occur next year.

Performance Review of the CEO and Executive Team

X2M’s Board Charter provides that the Board is responsible for monitoring the performance of the Executive Team. The performance of the CEO and Senior Executives is assessed annually with reference to agreed milestones. Performance reviews were undertaken during the reporting period. Details of the remuneration of the Executive Team considered by the Company to be Key Management Personnel is set out in the Remuneration Report.

The Board is responsible for agreeing the remuneration arrangements and terms of employment for the CEO and Executive Team. The Board is also responsible for:

f) any equity-based remuneration plans for the Executive Team and other employees.
g) reviewing and approving the design and total proposed payments from any Executive Team incentive plan; and

the Executive Team under the rules of any Executive Team incentive plan.

Principle 2: The Board is Structured to be Effective and to Add Value

Nomination Committee

Due to the size of the Board, X2M does not have a separate Nomination Committee. The roles and responsibilities of the Nomination Committee are currently undertaken by the Board.

Composition of the Board and Details of Directors

X2M currently has four Directors, all of whom are Non-Executive Directors. The Board considers that the current size of the Board is appropriate to discharge its duties effectively.

The criteria by which the Board determines the independence of a Director are set out in the Board Charter. The Board has determined that all of the Non-Executive Directors are independent. There is a clear division of responsibility between the Chair, who is an Independent NonExecutive Chair, and the CEO.

Each Director must provide to the Board all information relevant to the assessment of his or her independence and where a Director’s independent status changes, X2M will immediately disclose and explain this to the market.

DIRECTOR	STATUS	APPOINTMENT DATE
AlanStockdale	Independent	8February2021
JodieLeonard	Independent	8February2021
DamienJohnston	Independent	8February2021
JohnStewart	Independent	8February2021

Table 21: Status of Director Independence

h) the proposed award to each member of

For details of the current Directors, their qualifications, skills, and experience refer to page 15-16 in Directors’ Report.

Board Skills Matrix

Under the Company’s Constitution, the Board must comprise at least three Directors and a maximum of twelve Directors. The Board regularly reviews the composition of the Board, considering the number and skill mix of the Directors.

The Board recognises the need to review and consider the composition of the Board to align it with ASX best practice and ensure that it comprises the necessary skills to establish and deliver upon the Company’s strategic objectives. The Board considers, and, updates, the Board skills matrix at least annually to ensure that as X2M grows, the Board comprises the appropriate mix of skills, expertise, experience, and diversity. In 2021, the Board developed a Board skills matrix that included the following skills and experience:

Key Board Skills and Experience	Number
Asia Pacific Market Experience
Experience working in/leading an
	4
organisation with global operations, or an
understanding of different political,
cultural regulatory and business
, , environments
Strategy
Experience defining strategic objectives,	4
assessing business plans and driving
execution.
Digital, Data and Technology
Expertise in adopting new digital
technologies or implementing technology	4
projects, and experience with managing
digital disruption, leveraging digital
technologies or understanding the use of
data and data analytics.
Governance and Compliance
Experience in the design and application of
	4
corporate governance and compliance
programs with a commitment to high
standards ofgovernance.

Financial and Risk Management

Understand financial drivers of the business 4 and experience implementing or overseeing financial accounting, reporting, internal controls, and risk management frameworks.

Financial and Risk Management Understand financial drivers of the business and experience implementing or overseeing financial accounting, reporting, internal controls, andrisk managementframeworks.	4
Merger and Acquisitions
Experience in undertaking or overseeing
	4
corporate mergers and acquisitions with
ability to evaluate transactions and govern
the transitionphase.
Capital Management
Experience in capital management	4
strategies including debt financing and
capitalraisings.
People and Culture
Experience monitoring a company’s culture,
	4
OHS program, people management,
succession planning, and remuneration
frameworks.
Legal and Regulatory
Experience in a capacity requiring skills
	4
and knowledge in relation to the law,
especially with reference to company
law and other relevant legal disciplines.
Government, Regulatory Agencies and
Politics
Experience in dealing with Governments	4
and Government agencies and a broad

knowledge of the workings of
governments and politics.
Experience with Infrastructure
Industries
Experience in dealing with and/or	1
marketing and selling to infrastructure

industries especially electricity gas
, , water and other utilities.

Table 22: Board Skills Assessment

Director Selection, Appointment and Induction

From time to time, the Board reviews the size, structure and composition of the Board, taking into consideration the balance of skills, experience and knowledge of Board members.

A formal Non-Executive Director Induction and Professional Development Policy will be developed in 2022. The Company Secretary is responsible for arranging for new Directors to undertake an induction

program to enable them to gain an understanding of:
a) the Company’s operations.

www.x2mconnect.com.

Trading Policy

b) the industry,
c) the culture and values of the Company
d) the Company’s financial, strategic, operational and risk management position and
e) the rights, duties, and responsibilities of the new Director.

The policy will also consider annual requirements for the Directors to undergo regular professional development.

Principle 3: The Board instils a culture of acting lawfully, ethically, and responsibly

The X2M Trading Policy governs the sale and purchase of Company securities by Directors and Employees (Relevant Persons). Relevant Persons must not trade, arrange for someone else to trade, pass on information to someone they know, who may use the information to trade (or procure another person to trade) X2M shares when they are in possession of price sensitive information which is not generally available to the market. The policy also prohibits Relevant Persons from undertaking any financial arrangements to hedge the economic risk of X2M securities or to enter margin lending arrangements over securities.

Code of Conduct

The Board recognises the need to observe a high standard of corporate practice and business conduct. Accordingly, the Board adopted the Code of Conduct, which outlines how X2M expects everyone to behave and conduct business, consistent with the Company values.

All Directors, Officers, senior executives, employees, contractors, and consultants must comply with the Code of Conduct. The Code details the core values that are expected to drive Director and employee behaviour and aspirations. As set out in the Code of Conduct, the Company expects all parties to comply with the letter and spirit of the law, rule or regulation and not knowingly participate in any illegal or unethical activity. In addition, X2M expects that all parties carry out the Company’s operations with high standards of honesty, integrity, and ethical, responsible and law-abiding behaviour.

The Code of Conduct was approved by the Board in February 2020 and a copy can be found on the Company’s website at

Relevant Persons are prohibited from dealing in X2M securities (subject to exceptional circumstances) other than during the following mandated Open Periods:

a) the period six weeks from commencement of the release Company’s Annual Results.
b) the period six weeks from commencement of the release Company’s half year results; and
c) any other period designated by the Board from time to time.

Provided a that relevant person may not deal in X2M securities at any time at which they are in possession of price sensitive information

If a Director, the CEO or the Executive Team wish to trade in X2M shares during an Open Period, the Trading Policy provides for:

a) prior written approval by the Chair to be given to Directors (the Chair himself must seek prior written approval from

the Chair of the Audit and Risk Committee); and

b) prior written approval from the CEO or Chair to be given to the members of the Executive Team.

Principle 4: The Board Safeguards the Integrity of Corporate Reports

Audit and Risk Committee (ARC)

For all Relevant Persons, notification to the Company Secretary prior to, and after, trading is also required under the policy.

The current Trading Policy was adopted by the Board in February 2021. The Policy is located on the X2M website at www.x2mconnect.com.

Whistleblower Policy and Anti-Bribery and Corruption Policy

X2M recognises the important role whistleblowing can play in the early detection of misconduct and has adopted a Whistleblower Policy. The purpose of this policy is to establish a reporting system which secures protections for individuals who disclose misconduct and encourages employees and X2M’s partners to report known or suspected misconduct. The Whistleblower Policy is located on the X2M Company website at www.x2mconnect.com.

The Company also recognises the importance of protecting the assets and reputation of the Company and has adopted an Anti-Bribery and Corruption Policy. The purpose of the Anti-Bribery and Corruption Policy is to reinforce the commitment and responsibility of X2M in identifying fraudulent and corrupt activities and to establishing policies, controls and procedures for prevention and detection of these activities. In addition, the Policy reinforces the requirement that all employees must refrain from and report any corrupt and fraudulent conduct. The Anti-Bribery and Corruption Policy is located on the X2M website at www.x2mconnect.com.

The ARC has three members, Damien Johnston (Chair), Jodie Leonard and John Stewart.

The ASX Principles recommend that an audit committee have at least three members, all of whom are non-executive Directors and a majority of whom are independent and that the chair of the audit committee be an independent Director who is not the chair of the board. The ARC met these requirements in 2021.

For full details of Committee members attendance at Committee Meetings for 2021, refer to “Board and Committee Meeting attendance” which is contained in the Directors’ Report on page 14.

The ARC Charter requires that all members of the ARC can read and understand financial statements and that at least one member is a qualified accountant or other financial professional with appropriate experience of financial and accounting matters. The ARC met these requirements in 2021. For details of the qualifications, skills and experience of the ARC, refer to page 15 -16 for further details.

The ARC Charter sets out the role and responsibilities of the ARC and the Charter is located on the X2M website at www.x2mconnect.com. The ARC reviews its Charter annually or as required. The objectives of the ARC are to:

a) assist the Board to achieve its objectives in relation to corporate and financial reporting, the application of accounting policies, business policies and practices, legal and regulatory

compliance and internal control and the risk management framework.
b) maintain and improve the quality, credibility, and objectivity of the financial accountability process; and
c) promote a culture of compliance across X2M.
d) provide a forum for communication between the Board and the Company’s management in relation to audit and compliance matters affecting X2M.
e) oversee the internal audit (if any) and external audit functions and communication between the Board and the internal auditor (if any) and the external auditor; and
f) review and comment on Management’s plans for managing the material financial, non-financial and reporting risks faced by the Company.

Independent Audit

The responsibilities of the ARC in relation to external audit include:

a) approving the terms of engagement with the external auditor at the beginning of each financial year.
b) reviewing the external auditor’s proposed audit scope and approach.
c) recommending to the Board for approval, the appointment or removal of the external auditor.
d) reviewing the performance of the external auditor and approving the fees payable to the external auditor.
e) developing and overseeing the implementation of the Company’s policy on the engagement of the external auditor to supply non-audit services and monitoring compliance with that policy.
f) providing advice to the Board in relation to whether the ARC is satisfied that the provision of non-audit services is compatible with the general standard of independence and an explanation of why those non-audit services do not compromise audit independence; and
g) meeting with the external auditor to review audit reports.

The external auditor must be independent of X2M. The ARC regularly reviews and assesses the independence of the external auditor and makes recommendations to the Board.

The ARC may obtain information from, and consult with, management, the external Auditor and external advisers, as it considers appropriate. The ARC also has access to the external auditor to discuss matters without management being present.

The ARC is responsible for engaging in the proactive oversight of, and adequacy of, the Company’s financial reporting and disclosure processes. The ARC reviews all periodic financial reports with management, advisers and the external auditor (as appropriate) and recommends to the Board, adoption of applicable financial reports if the reports reflect the understanding of the ARC Committee and provide a true and fair view of the financial position and performance of the Company.

CEO and CFO Declaration

Prior to Board approval of X2M’s annual financial reports, the CEO and CFO must provide the Board with the declarations required under section 295A of the Corporations Act and Recommendation 4.2 of the ASX Principles. This declaration is also provided prior to Board approval of the Company’s half-year financial reports.

For the half-financial year ended 31 December 2020 and for the financial year ended 30 June 2021, the CEO and CFO made a declaration in accordance with section 295A of the Corporations Act and Recommendation 4.2 of the ASX Principles.

Auditor at the AGM

At X2M’s 2021 AGM, Grant Thornton, as the independent external auditor, will be present and available to answer shareholder questions on the:

a) conduct of the independent external audit.
b) preparation and content of the independent external auditor’s report.
c) accounting policies adopted by X2M in relation to the preparation of the financial statements; and
d) independence of Grant Thornton in relation to the conduct of the audit.

Principle 5: The Board Makes Timely and Balanced Disclosure

It is the intention of the Board to ensure that shareholders are kept informed of all major developments affecting the state of affairs of X2M.

The Company’s Continuous Disclosure Policy sets out the disclosure obligations under the Corporations Act and ASX Listing Rules and is located on the X2M website at www.x2mconnect.com.

Under the Continuous Disclosure Policy, the Board bears the primary responsibility for X2M’s compliance with its continuous disclosure obligations and is responsible for overseeing and implementing this policy. The Board makes the ultimate decision on whether there is any materially price sensitive information that needs to be disclosed to the ASX, and Board approval is required for any release which relates to any matter which is both material and strategically important for the Company. In addition, at each Board meeting, consideration is given to any information that must be disclosed to the ASX in accordance with X2M continuous disclosure

obligations.

The Company Secretary has primary responsibility for all communication with the ASX in relation to ASX Listing Rule matters. The Company Secretary is also responsible for ensuring that the Directors receive copies of all material market announcements promptly after they have been made.

The Board is responsible for regularly reviewing the Continuous Disclosure Policy to ensure that it remains effective and consistent with all relevant legal pronouncements and the ASX Principles.

Principle 6: The Board Respects the Rights of Security Holders

X2M respects the rights of its shareholders and promotes effective two-way communication with shareholders and other stakeholders. The Company will ensure shareholders are fully informed of X2M’s business, governance, and financial performance, and they understand how to assess relevant information about the Company’s activities.

The Company Website

X2M’s website is located at www.x2mconnect.com. The site is kept current to maintain effective communication with shareholders and stakeholders. Information available on the website includes information about the Company’s operations and its brands; the Board of Directors; copies of all key governance documentation; announcements; archived investor presentations; current share price information; and company events.

All ASX announcements made by the Company can also be accessed via the

‘Announcements’ section of the ASX website

www.asx.com.au/asx/statistics/announce ments.do, using the X2M ticker code X2M.

Investor Relations

Relationships with investors are very important to X2M. Following the release of its half-year and annual financial statements, the Company will conduct investor briefings and investor roadshows with institutional groups and analysts. X2M will send details of its half-year and fullyear investor call to the ASX to ensure that a wide set of stakeholders are able to attend. The X2M AGM will be held in November and the Chair, Directors and Key Management Personnel will engage with Shareholders in advance of the AGM, as appropriate.

attend the AGM are encouraged to vote on the proposed motions by appointing a proxy via the proxy form that accompanies the notice of meeting, or online through the share registry’s website. For the 2021 AGM and onwards, all questions will be decided by a poll rather than a show of hands.

Shareholders have the opportunity to submit written questions and comments to X2M and its external auditor.

Presentations and speeches made by the Chair and CEO at the AGM are made available on the ASX announcements platform and X2M website before the commencement of the meeting. X2M will advise the results of the AGM to the ASX and on its website promptly following the conclusion of the AGM.

Shareholder Communications

Shareholders may elect to receive all communications from X2M’s share registry electronically. Electronic communications are timelier, cost effective, and are encouraged by the Company. Shareholders should contact the share registry if they wish to elect to receive electronic communications by emailing [email protected].

The Company’s’ share registry is managed by Automic Group Pty Ltd. Their website address is www.automicgroup.com.au.

Shareholder Engagement and Participation

To encourage shareholder engagement and participation at the AGM, when possible, shareholders have the opportunity to attend the AGM, ask questions from the floor, participate in voting and meet the Board and the Executive Team in person. In the event the AGM is held electronically, the Company will ensure that appropriate technology is used to facilitate the participation of shareholders at such meetings. Shareholders who are unable to

Principle 7: The Board Recognises and Manages Risk

Risk Committee

The ARC is charged with the responsibility to assist the Board in the oversight of risk. Please refer to page 15-16 for details of the members of the Committee, qualifications and experience of members and individual attendances at Committee meetings.

The sections of the ARC Charter with respect to risk management includes the following:

a) oversee the establishment and implementation of the risk management framework and internal compliance and control systems.
b) monitoring the mechanism for assessing the ongoing efficiency and effectiveness of the risk management framework and internal compliance and control systems.
c) monitoring whether X2M is operating within the risk appetite set by the

Board and make recommendations on any necessary changes that should be made to the risk appetite.

d) review risk management policies and procedures at least annually to ensure that the risk systems and processes in place are operating effectively and efficiently, in regard to identifying, assessing, monitoring and managing risk; and
e) review X2M’s risk management framework at least annually to evaluate compliance and internal control processes and making recommendations to the Board.

The Audit and Risk Committee Charter is available on the X2M website at www.x2mconnect.com.

Review of Risk Management Framework

The Board has overall responsibility for the Group’s risk management and internal controls. The Board has delegated detailed review of these matters to the ARC which reports material issues to the Board.

The Company has adopted a Risk Management Policy which is available on the Company website at www.x2mconnect.com. This policy highlights the risks relevant to the Group’s operations and the policies the Group has enacted for the supervision and management of material business risks.

The ARC oversees the establishment and implementation of, the Group’s Risk Management Framework and makes recommendations to the Board on the soundness of risk management across X2M. In 2021, management identified the material business risks of X2M. In 2022, the risk management processes of the Company will develop further as the Company matures.

X2M’s internal compliance and control systems are designed to ensure effective

and efficient operations, including financial reporting and compliance with laws and regulations, and managing risk across the Group’s business activities. The internal control systems which have been adopted by the Company aim to develop a culture which is able to identify, communicate and manage material risk.

Internal Audit Function

Prior to listing on the ASX, X2M did not appoint an Internal Auditor as the size and scale of the operations did not warrant the function.

Moving forward, the Management team in consultation with the ARC, will review the need for an Internal Auditor who will assist with the oversight and validation of key elements of the Company’s internal governance.

Material Exposure to Environmental or Social Risks

The Audit and Risk Committee Charter requires the Audit and Risk Committee (or, in its absence, the Board) to assist management to determine whether the Company has any potential or apparent exposure to environmental or social risks and, if it does, put in place management systems, practices and procedures to manage those risks.

The Company’s Corporate Governance Plan requires the Company to disclose whether it has any potential or apparent exposure to environmental or social risks and, if it does, put in place management systems, practices and procedures to manage those risk.

Where the Company does not have material exposure to environmental or social risks, report the basis for that determination to the Board, and where appropriate benchmark the Company’s environmental or social risk profile against

its peers.

The Company considers that it does not have material exposure to environmental or social risks given the nature of its business and operations.

Principle	8:	The	Board
Remunerates		Fairly	and
Responsibly

X2M’s approach to remuneration is framed by the strategic direction and operational demands of the business, as well as the international context in which the business operates, sustainable shareholder returns, and the Company’s governance standard.

Remuneration Committee

The responsibilities of the Remuneration Committee are discharged by the full Board.

Board. A copy of the Charter is located on the X2M website at www.x2mconnect.com. The Charter was approved in February 2021 and is reviewed annually or as required.

Remuneration Policies and Practices

In 2021 an Employee Share Scheme was implemented prelisting aimed at aligning key personnel with the goals and objectives of the company, as well as the goals and objectives of shareholders. Further work will be undertaken in 2022 to streamline both long- and short-term incentives to ensure they apply consistently across the group.

Details about X2M’s remuneration strategy, framework, policies, and practices are set out in the Company’s Remuneration Report on page 24.

The Company’s Remuneration Policy is located on the X2M website at www.x2mconnect.com.

The Board is responsible for

a) adopting appropriate remuneration policies and practices to attract and retain high quality Directors and to attract, retain and motivate senior executives who will create value for shareholders.
b) monitoring compliance with the Board approved remuneration policies, incentives and behaviours arising from the remuneration structure; and
c) Ensure the Executive Team are fairly and responsibly rewarded having regard to the performance of the Company, the performance of the Executive Team and the general external remuneration environment.

Policy on Hedging Equity-based Incentive Schemes

X2M offers an equity-based remuneration scheme through its STI and LTI plans. The STI Plan Rules, LTI Plan Rules and the X2M Trading Policy prohibits employees from hedging the value of restricted shares and unvested securities.

Breaches of this prohibition will result in awards being forfeited by the relevant employee.

The Company’s Trading Policy is located on the X2M website at www.x2mconnect.com.

The Remuneration Committee Charter sets out the role and responsibilities of the

ADDITIONAL INFORMATION

Additional Information required by the Australian Securities Exchange and not shown elsewhere in this report is as follows: The information is current at 29[th] of September 2021.

Twenty Largest Shareholders

The name of the twenty largest holders of quoted Ordinary shares is:

		LISTED ORDINARY SHARES	LISTED ORDINARY SHARES
RANK	NAME OF HOLDER	NUMBER OF SHARES	% OF SHARES
1	Super Properties Pty Ltd	19,923,329	14.22%
2	Mazzara Succession PtyLtd	17,260,015	12.32%
3	Andrew C Greig	11,689,623	8.34%
4	M & M JesudasonCoPtyLtd	10,810,152	7.72%
5	Perle VenturesPtyLtd<877CapitalInvestments2 A/C>	5,563,775	3.97%
6	VanewPtyLtd	4,801,165	3.43%
7	Allegro Capital NomineesPtyLtd	4,800,000	3.43%
8	AzimboInvestmentsPtyLtd	3,603,384	2.57%
9	Perle VenturesPtyLtd	3,569,517	2.55%
10	Miller FamilyEnterprisesPtyLtd	3,000,001	2.14%
11	KMRSharesPtyLtd	3,000,001	2.14%
12	HailanShi	3,000,000	2.14%
13	Junfei Zhao	2,666,667	1.90%
14	FengmeiShang	2,666,667	1.90%
15	IntercontinentalPtyLimited	2,415,996	1.72%
16	ChengyuFang	2,250,000	1.61%
17	JD InvestmentsHoldingPtyLtd	2,000,000	1.43%
18	QiangFei	2,000,000	1.43%
19	JMLCapitalLimited	1,600,000	1.14%
20	HSBC Custody Nominees (Australia)Limited	1,551,227	1.11%
	TOTAL	108,171,519	77.21%

Table 23: Distribution of Shareholdings by Size as at 29[th] of September 2021.

Substantial Shareholders

The names of the substantial shareholders (>5%) and their associates are set out below:

		LISTED ORDINARY SHARES	LISTED ORDINARY SHARES
	NAME OF HOLDER	NUMBER OF SHARES	% OF SHARES
1	Super PropertiesPtyLtd	29,056,621	20.7%
2	Mazzara Succession PtyLtd	17,260,015	12.32%
3	Andrew C Greig	11,689,623	8.34%
4	M & M Jesudason Co PtyLtd	10,810,152	7.72%
5	Allegro Capital Nominees PtyLtd	7,215,996	5.15%

Table 24: Substantial Shareholders (>5%) as at 29[th] of September 2021.

Distribution of Securities

Distribution of Ordinary Shareholdings by Size of holdings:

	ORDINARY FULLY PAID	ORDINARY FULLY PAID	SHARES

	NUMBER OF	NUMBER OF	% OF ISSUED
DISTRIBUTION OF SHAREHOLDINGS
	HOLDERS	SHARES	CAPITAL

1-1,000
	2	322	0.00%
1,001 –5,000
	110	293,027	0.21%
5,001 – 10,000
	155	1,283,575	0.92%
10,001 – 100,000
	165	5,558,532	3.97%
100,001 –9,999,999,999
	81	132,966,080	94.91%
TOTAL
	513	140,101,536	100.00%
Shareholdersholding less thanamarketable parcel ofshares	52	93,219	0.07%

Table 25: Distribution of Shareholdings by Size of Holding as at 29[th] of September 2021.

Distribution of Options

Distribution of Options by Size of holdings:

		OPTIONS

	NUMBER OF	NUMBER OF	% OF ISSUED
DISTRIBUTION OF HOLDINGS
	HOLDERS	SHARES	CAPITAL

1-1,000
	-	-	-
1,001 –5,000
	-	-	-
5,001 – 10,000
	-	-	-
10,001 – 100,000
	13	748,894	2.71%
100,001 –9,999,999,999
	21	26,922,314	97.29%
TOTAL
	34	27,671,208	100.00%

Table 26: Distribution of Options by Size of Holding as at 29[th] of September 2021.

Issued Options

Distribution of options issued along with escrow period.

		OPTIONS	OPTIONS

				% OF
	ESCROW	NUMBER OF	NUMBER OF
DISTRIBUTION OF HOLDINGS
				ISSUED
	PERIOD	HOLDERS	SHARES
				CAPITAL

Employee Options @ $0.3575Expire13/9/25	12 months	27	5,047,690	100.00%
Employee Options @ $0.3575Expire13/9/25	24 months	4	360,339	100.00%
Executive Options @ $0.3575Expire13/9/25	12 months
		1	2,389,897	100.00%
Executive Options @ $0.3575Expire13/9/25	24 months	1	7,169,691	100.00%
Executive Options @ $0.25Expire15/7/25	24 months	1	7,058,462	100.00%
Executive Options @ $0.25Expire15/7/25	-	1	2,352,821	100.00%
TOTAL		35	24,378,900

Table 27: Distribution of options issued and escrow period as at 29[th] of September 2021.

Shares under Escrow

	ORDINARY FULLY PAID	ORDINARY FULLY PAID	SHARES

	NUMBER OF	NUMBER OF	% OF ISSUED
ESCROW ARRANGEMENTS
	HOLDERS	SHARES	CAPITAL18

Escrowed Shares12MonthsFrom04/06/21
	8	4,180,000	100.00%
Escrowed Shares12MonthsFrom09/06/21
	5	9,745,844	100.00%
Escrowed Shares12MonthsFrom 23/06/21
	7	3,800,000	100.00%
Escrowed Shares12MonthsFrom 14/07/21
	6	5,333,332	100.00%
Escrowed Shares12MonthsFrom 11/02/21
	1	259,200	100.00%
Escrowed Shares12MonthsFrom30/06/21
	1	423,546	100.00%
Escrowed Shares12MonthsFromQuotation
	4	33,417,755	100.00%
Escrowed Shares24MonthsFromQuotation
	4	547,200	100.00%
Escrowed Shares24MonthsFromQuotation
	1	4,104,000	100.00%
Escrowed Shares24MonthsFromQuotation
	4	894,154	100.00%
Escrowed Shares24MonthsFromQuotation
	1	5,219,448	100.00%
Escrowed Shares24MonthsFromQuotation
	1	1,486,704	100.00%
VoluntaryEscrow Shares Until28/02/2022
	6	17,033,441	100.00%
VoluntaryEscrow Shares Until24/03/2024
	6	1,785,428	100.00%
VoluntaryEscrow Shares Until 30/06/2024
	6	3,027,476	100.00%
TOTAL	61	91,257,528

Table 28: Details of escrow share arrangements as at 29[th] of September 2021.

Unmarketable Parcels

b) Options

There were 52 holders of unmarketable parcels of shares as of the 29[th] of September 2021.

Voting Rights

The voting rights attached to each class of equity securities are set out below:

No options or performance rights have been issued as part of various performance plans in the 2021 financial year, as of the 30[th] of June 2020:

Number of participants: 0 participants.
Maximum number of ordinary shares which may be issued if the performance conditions are achieved: 0.
Participants do not have voting rights.

a) Ordinary shares

Holders of ordinary shares have the right to vote at every general meeting of the Company and at separate meetings of holders of Ordinary Shares. At a general or separate meeting, every holder of ordinary shares present in person or by proxy has on poll, one vote for each ordinary share held

Securities Purchased on Market

There were no securities purchased on market during the year ended June 30, 2021 .

18 % Issued capital refers to the class of escrowed shares

Unquoted Equity Securities

Changes to Unaudited Preliminary Financial Report

a) Ordinary shares

X2M Limited has 82,062,050 unquoted equity securities on issue on the 30[th] of June 2021.

b) Options

X2M Limited has 0 unquoted options on issue as of the 30[th] of June 2021.

Stock Exchange Listing

X2M Limited ordinary shares listed on the Australian Securities Exchange (ASX) under code: X2M.

Share Buy Backs

The Company did not undertake a share buy back in 2021. Given the growth agenda planned, there are no plans to undertake a share buy back in 2022.

Dividends

The Company did not pay a dividend in 2021. Given the current growth strategy, there are no plans to pay a dividend in the foreseeable future.

On the 20[th] of September 2021, the Group released its unaudited preliminary financial report for the year ended 30[th] of June 2021. Upon finalising the audit, the following immaterial variances were noted in the statement of profit or loss and other comprehensive income:

Net increase of $45,833 in total expenses
Increase of $98,785 in income tax benefit
As the result of the above, loss after income tax benefit improved to $8,255,114, representing a positive net change of $52,952.

The Group's net assets increased by $629,380, from net liabilities of $444,160 to net assets of $185,220. This was mainly attributable to a reclassification from the employee benefits provision to the share-based payments reserve.

COMPANY DIRECTORY

Registered Address

Level 3 549 Blackburn Rd Mount Waverley Victoria, Australia 3149 1800 926 926 email: [email protected]

Investor Relations

Shareholder Enquiries

Automic Pty Ltd [email protected] +612 9698 5414

Keith Jelley

[email protected] 1 800 926 926 (1 800 X2M X2M)

Media

Mohan Jesudason

[email protected] 1 800 926 926 (1 800 X2M X2M)

Auditor

Grant Thornton

5/727 Collins Street Melbourne VIC 3008

Corporate Governance Statement

[email protected] 1 800 926 926 (1 800 X2M X2M)

Company Secretary

Brett Tucker (resigned 30[th] September 2021) Keith Jelley (resigned effective 8[th] October 2021)

Oliver Carton

[email protected] 1 800 926 926 (1 800 X2M X2M)

A copy of the Corporate Governance Statement can be found on the website. Visit www.x2mconnect.com.

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AI assistant

X2M CONNECT LIMITED — Annual Report 2021

66094_rns_2021-09-30_b6c0ecb4-6264-4f9e-8f8f-c08632b69b98.pdf

ANNUAL REPORT 2021

1st October 2021

For further information contact:

About X2M Connect Group

TABLE OF CONTENTS

Key Notes:

SNAPSHOT FY 2021

CHAIRMAN’S LETTER

The 2020-2021 year has been an historic one for our company.

The year under review has been an exciting one for our company.

We are gaining traction in key markets.

OPERATIONAL OVERVIEW

About X2M

Technology and the Business Model

Impact of the Covid 19 Pandemic

Strategy

2020 Comparative Reporting Financial Reporting Period

Group Performance Summary

Summary of Financial Results

Key Performance Metrics

Financial Metrics ($m)

c) Comparison with pcp as per Prospectus Pro Forma Accounts

Funding and Capital

Segment Performance

a) South Korea

b) China

c) Taiwan

d) Other

DIRECTORS REPORT

Governance

Governance Principles to be Implemented in 2022

Governance Principles to be Adopted at a Later Date

Board and Committee Membership

BOARD OF DIRECTORS

Hon. Alan Stockdale AO

Background and Experience

Special Responsibilities

Former ASX Directorships (3 yrs)

Background and Experience

Special Responsibilities

Jodie Leonard

Background and Experience

Other Current ASX Roles

John Stewart

Special Responsibilities

Other Current ASX Roles

Michael An

Resignation Date

Narender Lakhwani

Resignation Date

Appointment Date

Lee Mayberry

Background and Experience

Brett Tucker

Board Skills and Experience

EXECUTIVE KEY MANAGEMENT PERSONNEL

Mohan Jesudason

Keith Jelley

Principal Activities

Company Secretary

Directors and Officers Liability Insurance

Non-Audit Services

Dividends

Proceedings brought on behalf of the Company

Matters Subsequent to the end of the Financial Period

Use of funds

Likely Developments and Expected Results of Operations

Environmental Regulation

Key Risks

Other Information

REMUNERATION REPORT

Remuneration Overview

Strategic Priorities

Remuneration Principles

Remuneration Governance

Remuneration Framework

2021 Executive KMP Remuneration Mix

X2M CONNECT LIMITED Annual Report 2021