Annual financial statement
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Matrix Composites & Engineering Ltd ABN 54 009 435 250 Consolidated Annual Report 30 June 2025
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LIGHTER· STRONGER· SMARTER CORPORATE DIRECTORY Directors Mr P J Hood AO (Chairman) Mr A P Begley (CEO) Mr S Kirsch Mr C Sutherland Ms A Terry Mr B W Cocks (CFO) Company Secretary Mr B W Cocks Mr J Louden Head Office Matrix Composites & Engineering Ltd 1 50 Quill Way Henderson WA 6166 Telephone: +61 (08) 9412 1200 E -mail: matrix@matrixengineered.com Overseas Offices Matrix Composites & Engineering (US), Inc 2925 Richmond Avenue, Suite 1200 Houston Texas 77027 U.S.A E mail: us@matrixengineered.com Auditor KPMG 235 St Georges Terrace Perth WA 6000 Law yers Gilbert + Tobin Level 16, Brookfield Place Tower 2, 123 St Georges Terrace PERTH WA 6000 Bankers ANZ Level 10, 77 St Georges Terrace Perth WA 6000 Share Regist ry MUFG Corporate Markets (AU) Limited Liberty Place Level 41, 161 Castlereagh Street Syd ney NSW 2000 ABN 54 009 435 250
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1 LIGHTER· STRONGER· SMARTER CONTENTS DIRECTORS’ REPORT 2 AUDITOR’S INDEPENDENCE DECLARATION 27 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 28 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 29 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 30 CONSOLIDATED STATEMENT OF CASH FLOWS 32 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 33 CONSOLIDATED ENTITY DISCLOSURE STATEMENT 92 DIRECTORS’ DECLARATION 94 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MATRIX COMPOSITES & ENGINEERING LTD 95
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MATRIX ANNUAL REPORT 2025 2 DIRECTORS’ REPORT DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2025 The directors of Matrix Composites & Engineering Ltd (“Matrix” or “the Company”) submit herewith the annual report of the Company for the financial year ended 30 June 2025. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows. Information about the Directors The names and particulars of the directors of the Company during or since the end of the financial year are: Peter J Hood AO Independent Non-Executive Chairman Qualifications & Experience Peter Hood is a qualified Chemical Engineer with over 50 years of experience in senior management and project development in the mining, oil and gas, and chemical industries. Mr Hood was previously the CEO of Coogee Resources Ltd, a company involved in the exploration and production of oil and gas in the Timor Sea. Prior to this he was the CEO of Coogee Chemicals Pty Ltd where he oversaw a period of significant growth in the company’s value. Mr Hood is a Past President of the Australian Chamber of Commerce and Industry (ACCI), and a Non-Executive Director of, GR Engineering Ltd and Cue Energy Resources Ltd, and Chairman of MAK Industrial Water Systems Pty Ltd. He was also previously Chairman of Apollo Gas Ltd and Vice-Chairman of APPEA. Mr Hood chairs the Nominations and Remuneration Committee and is a member of the Audit Committee and Risk and Sustainability Committee. Education Advanced Management Program, Harvard Business School, 1997 Graduate Diploma of Administration, Western Australian Institute of Technology (now Curtin University), 1974 Bachelor of Engineering (Chemical), Melbourne University, 1970 Memberships Fellow of the Australian Institute of Company Directors Fellow of the Institute of Chemical Engineers Member of the Australian Institute of Mining and Metallurgy
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3 LIGHTER· STRONGER· SMARTER DIRECTORS’ REPORT Aaron P Begley Managing Director & Chief Executive Officer Qualifications & Experience Aaron Begley has over 25 years’ experience in manufacturing and marketing specialised industrial equipment, materials and services to the oil & gas and marine technology sectors. Prior to his current role as Managing Director and Chief Executive Officer, Mr Begley held various positions within Matrix Composites & Engineering Ltd since starting with the company in 1993. Throughout his tenure, Mr Begley has overseen the company’s growth from a local engineering firm to a global market leader in the manufacture and development of composite materials technologies and engineered products for the oil & gas sector. Education Post Graduate Diploma of Management (Curtin), 2002 Bachelor of Economics (University of Western Australia), 1993 Memberships Society of Underwater Technology (SUT) Society of Petroleum Engineers (SPE) International Association of Drilling Contractors (IADC) Chris Sutherland Independent Non-Executive Director Qualifications & Experience Chris Sutherland has significant executive leadership expertise spanning more than 20 years, encompassing a wide array of sectors in Australia; including oil and gas, resources, infrastructure and manufacturing. Mr Sutherland previously spent 11 years as Managing Director and Chief Executive Officer of Programmed Maintenance Services Ltd. He has also served in other leadership roles which followed executive and management roles at major multidisciplinary engineering firms. Mr Sutherland is currently the President of the Fremantle Dockers, Chairman of the Fremantle Port Authority and a Director of Altitude Minerals Ltd (formerly Copper Search Ltd). Mr Sutherland chairs the Risk and Sustainability Committee and is a member of the Audit Committee and Nominations and Remuneration Committee. Education Bachelor of Engineering (Hons), University of Western Australia Advanced Management Program Harvard Business School
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MATRIX ANNUAL REPORT 2025 4 DIRECTORS’ REPORT Alison Terry Independent Non-Executive Director Qualifications & Experience Alison Terry is an experienced executive and non-executive director with over 20 years of governance, corporate affairs, sustainability and legal experience in major companies nationally. Most recently she held an Executive role at Fortescue Metals Group as Director of Sustainability and Corporate Affairs and Joint Company Secretary. Ms Terry is currently a Director at Johns Lyng Group Limited, Bannerman Energy Limited, UN Women Australia and the Black Swan State Theatre Company of Western Australia. Ms Terry chairs the Audit Committee and is a member of the Risk and Sustainability and Nominations and Remuneration Committees. Education Bachelor of Economics and Bachelor of Law (Hons), The Australian National University Graduate Diploma of Business (Accounting), Monash University Memberships Graduate of the Australian Institute of Company Directors Member of Chief Executive Women Brendan Cocks Executive Director and Chief Financial Officer Qualifications & Experience Brendan Cocks is an experienced executive and Chartered Accountant with over 25 years in finance, leadership and commercial roles. Mr Cocks has been Chief Financial Officer and Joint Company Secretary of the Company since joining Matrix in 2016. In the 10 years prior to joining Matrix, Mr Cocks held Chief Financial Officer roles with a number of ASX listed companies including Kresta Holdings and LogiCamms Ltd. Education Bachelor of Commerce, University of Western Australia Chartered Accountants Program Memberships Member of Chartered Accountants Australia and New Zealand
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5 LIGHTER· STRONGER· SMARTER DIRECTORS’ REPORT Steven Cole Independent Non-Executive Director Qualifications & Experience Steven Cole has over 40 years of legal, business and corporate experience as well as a range of executive management and non- executive appointments. His extensive boardroom and board sub- committee experience includes ASX listed, statutory, proprietary and NFP organisations covering the industrial, financial, educational, professional services, health, local government, property management and development and resources sectors. Mr Cole is Chairman of Neometals Limited and Primobius GmbH, Non-Executive Director of Bilton Canning Pty Ltd, Yourtoolkit.com Limited, and Reed Advanced Materials Pty Ltd. Mr Cole was also previously WA State President and a national board member of the Australian Institute of Company Directors. Mr Cole chairs the Audit Committee and is a member of the Risk and Nominations and Remuneration Committees. Education Bachelor of Laws (Hons) Stephan Kirsch Independent Non-Executive Director Qualifications & Experience Stephan Kirsch is a seasoned executive with over 25 years of experience in the mining, mineral processing, and manufacturing industries. He has held senior leadership roles at several globally recognised engineering and mining service companies, including Metso Outotec Group, Hofmann Engineering, and ThyssenKrupp Industrial Solutions. He currently serves as President for the Asia-Pacific region at FLSmidth, a global leader in sustainable technology and services for the mining and cement sectors. In addition to his executive responsibilities, Mr Kirsch is also a Non-Executive Director of GMA Garnet Group. Mr Kirsch brings deep industry expertise, strategic insight, and a strong background in operational leadership to his role as a Non-Executive Director for Matrix Composites & Engineering Ltd. Mr Kirsch is a member of the Audit, Nomination and Remuneration and Risk and Sustainability Committees. Education Dipl.-Ing. (MSc Eng) – Mining/Mineral Processing, RWTH Aachen University, Germany Engineering Degree Recycling & Waste Management, RWTH Aachen University (Germany), 1990-1991 Memberships President – West Australian German Business Association Member Australasian Institute of Mining and Metallurgy (AusIMM) The above-named directors held office during the whole of the financial year and since the end of the financial year other than Stephan Kirsch who was appointed on 25 February 2025 and Steven Cole who resigned on 28 February 2025.
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MATRIX ANNUAL REPORT 2025 6 DIRECTORS’ REPORT Directorships of Other Listed Companies Directorships of other listed companies held by directors in the three years immediately before the end of the financial year are as follows: Name Company Period of directorship PJ Hood GR Engineering Ltd 2010 - Current PJ Hood Cue Energy Resources Ltd 2018 - Current PJ Hood De Grey Mining Ltd 2018 - 2025 C Sutherland Remsense Technologies Ltd 2021 - 2024 C Sutherland Copper Search Ltd 2021 - Current A Terry Bannerman Energy Ltd 2022 - Current A Terry Johns Lyng Group Limited 2024 - Current S Kirsch GMA Garnet Group 2024 - Current Directors’ Shareholdings The following table sets out each director’s relevant interest in shares, options and performance rights of the Company or a related body corporate as at the date of this report. Directors Fully paid shares number Share options(i) Performance rights(i) PJ Hood 1,178,000 - - AP Begley 8,710,858 2,345,154 1,337,997 C Sutherland 418,433 - - A Terry 100,000 - - BW Cocks 1,195,737 1,425,233 819,401 S Kirsch - - - (i) In addition to the share options and performance rights above, at the Annual General Meeting of Shareholders held in November 2024, the grant of a total of 1,391,071 Executive Share Options and 931,793 Executive Performance Rights to Mr Aaron Begley and Mr Brendan Cocks pursuant to the Employee Awards Plan was approved by shareholders. Based on the Notice of Meeting those Options and Rights were required to be issued 90 days after the AGM and were not issued during this period. The Company intends to seek shareholder re-approval at the November 2025 Annual General Meeting to issue those Options and Rights to Mr Begley and Mr Cocks, together with any further Rights and Options awarded for the following year. A total of 1,976,574 performance rights previously granted to Mr Begley (1,244,510 performance rights) and Mr Cocks (732,064 performance rights) vested during the period and were converted to ordinary shares. In addition, a total of 3,835,228 options previously granted to Mr Begley (2,414,773 options and Mr Cocks (1,420,455 options) lapsed without exercise. There are no unissued shares under option as at 30 June 2025 (2024: Nil).
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7 LIGHTER· STRONGER· SMARTER DIRECTORS’ REPORT Remuneration of key management personnel Information about the remuneration of key management personnel is set out in the remuneration report of this director’s report, on pages 13 to 25. The term ‘key management personnel’ refers to those persons having authority and responsibility for planning, directing and controlling the activities of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the consolidated entity. Rights granted to directors and executive management No Executive Performance Rights or Executive Share Options were granted during or since the end of the financial year. As set out above, at the November 2025 Annual General Meeting the Company intends to seek shareholder re-approval for the grant of Options and Rights to Mr Begley and Mr Cocks that were originally approved at the November 2024 AGM but have not been granted. Company Secretary Mr John Louden (LLB, BCom) joined Matrix on 25 February 2025 and held the position of Joint Company Secretary of the Company at the end of the financial year. Mr Louden is a commercial lawyer with over 20 years of experience both in private practice and commercial organisations. Following 10 years with Jackson McDonald and Norton Rose, Mr Louden held a similar role as General Counsel and Company Secretary with Neptune Marine Services for four years. Most recently he was General Counsel with Quintis. Mr Brendan Cocks (BCom, CA) joined Matrix on 12 September 2016 and held the position of Joint Company Secretary of the Company at the end of the financial year. Ms Caitlin Flaherty (BCom, CA) joined Matrix on 26 April 2022 and held the position of Joint Company Secretary between 6 September 2023 until her resignation on 31 October 2024. Principal Activities for FY25 The consolidated entity’s principal activities during the course of the financial year were the: Manufacture of advanced composite materials, products and solutions for the energy, defence, resources and transport sectors: Manufacture and supply of capital drilling equipment (primarily comprised of syntactic foam buoyancy) and provision of inspection, maintenance, and repair services; Manufacture and supply of subsea umbilical risers and flowline (SURF) ancillary equipment and associated services; Manufacture and supply of VIV suppression equipment for rigid pipelines; Manufacture and supply of well construction products, including centralizers; and Supply of Epoxy based coating systems, hire of associated application equipment and coatings application training.
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MATRIX ANNUAL REPORT 2025 8 DIRECTORS’ REPORT Review of Operations Overview The Company recorded revenue for the period of $74.8m which was 12% off last year’s result. The Company experienced a subdued market for our drilling buoyancy however momentum with our push into the global subsea market reflected in growth in our production buoyancy for subsea umbilicals, flowlines and risers (“SURF”), is creating a new substantial market for Matrix. Safety Matrix has a strong focus on keeping our employees safe across all of our operating sites. There has been an increased focus on our safety systems in the recent periods as activity levels have increased. Matrix operates a work health and safety system that is accredited to ISO 45001 and continues to scrutinise and identify hazards and risks to prevent injuries and illnesses. Matrix continues to recognise hazards and improve controls to establish and maintain a safe work environment for our staff. Manufacturing Matrix continues to maintain its state-of-the-art manufacturing facility in Henderson, which provides the Company the capability to produce advanced composite products utilising the following technologies: Composite Syntactic Foam Engineering Thermoplastics Composite Laminates including carbon fibre, glass fibre and Kevlar. Matrix has maintained its full capacity and industry qualifications in the Henderson facility in recent years ensuring that the Company has benefited from the continued market recovery for our core products. Financial Results for the Year Matrix recorded a revenue for the year of $74.8m (FY24: $85.0m) which was a 12% decline from the prior year after registering an 80% growth in FY24. A record revenue for our SURF Buoyancy during the year demonstrates momentum with our penetration of this global market, it was 80% of total revenue. Revenue from our Advanced Material division was similar to last year at approximately $5.0m. Corrosion technologies recorded revenue of $4.6m down from $6.0m as activity of our key clients reduced and sales of the Passive Fire Protection system tailed off. The drilling market continues to be subdued but still delivered $8.0m of revenue for the year. The Company reported a net loss after tax of $2.2m (FY24: profit of $3.6m). Overheads were marginally higher during the year as the Company invested in product diversification and product expansion. The loss for the year was reflected in a reduction of cash inflow from operating activities of $0.4m (FY24: Cash inflow of $10.9m). Investing cash outflow during the period was $5.1m (FY24: Cash inflow of $3.0m) which was mainly related to purchases of plant and equipment and moulds for our buoyancy projects. Financing outflows for the period were $0.05m driven by net effect of refunds of
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9 LIGHTER· STRONGER· SMARTER DIRECTORS’ REPORT security deposits for bonding purposes, lease repayments and costs relating to the convertible note. Cash and term deposits at the end of the year was $18.3m (FY24: $23.3m). Subsequent Events There has not been any other matter or circumstance occurring subsequent to the end of the financial year that has significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years. Changes in the State of Affairs and Future Developments Similar to last year the Company’s strategic focus is three-fold. At the core of Matrix’s technology is large scale syntactic foam production for subsea applications. Matrix is experiencing a successful push into the Production Buoyancy (SURF) market where we have won, executed and had installed our Distributed Buoyancy products for key international projects. Growth in our customer and industry qualifications, building on our track record and expanding our suite of products to this market will offer opportunities for further growth. The Company continues to service the recovering Drilling market with Drilling Riser Buoyancy products and there is a focus on emerging markets in deep sea mining and floating wind which provides opportunity for product expansion. The Company will focus on market share and customer growth within our Corrosion Technology business. Servicing existing major customers in Woodside and Inpex and expanding our offerings with other major companies will provide a platform for growth for this division. Opportunities with Advanced Materials will be a priority and will target organic growth in resources, defence and infrastructure. The Company will focus on unique polymer solutions for our clients and pursue a suite of current opportunities in development including subsea drones for the Australian Navy, downhole centralisers for the international market and structural conveyor components for Australian resource companies. Matrix has added senior Business Development resources to our Resources and Well Construction divisions to capture momentum and growth for these product offerings. Environmental Regulations The consolidated entity’s principal operating site at Henderson, Western Australia is subject to the operation of the Environmental Protection Act 1986 (WA) (EP Act). Compliance with the provisions of the EP Act and reporting of any material breaches is overseen by the Company’s Health, Safety and Environment department. When breaches occur, they are reported to the Department of Environmental Regulation (DER) as required and actions are taken to prevent recurrences. During the year there were no breaches of the EP Act and Matrix has been able to demonstrate continued good environmental performance. This is demonstrated by compliance against the environmental licence in accordance with Part V of the EP Act. The Henderson site continues to operate as designed and had no reportable events. Environmental objectives and key performance indicators (KPIs) have been agreed and accepted at the senior management level. In addition, the Company has attained ISO 14001 accreditation.
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MATRIX ANNUAL REPORT 2025 10 DIRECTORS’ REPORT Climate Risk Matrix acknowledges the increasing interest of the Company’s stakeholders regarding the possible risks and opportunities presented by climate change and the increasing momentum towards a lower carbon economy. While Matrix's core traditional market is in the subsea oil and gas market, which the Company acknowledges as having longer term risks. These risks include the impact of energy transition on fossil fuel related projects, and an associated reduction in globally approved deep sea oil and gas fields. The energy transition also presents significant opportunities for the Company. Current activities of the Company in supporting our clients on energy transition projects include: Actively quoting buoyancy solutions for upcoming offshore floating wind developments Utilising recycled materials such as carbon fibre as key feedstock for our buoyancy products Retaining equipment and capability to support energy client decommissioning of subsea oil and gas projects in the coming years. Further to the above, the Company is exploring other avenues and work with our local client bases to support energy transition initiatives using our advanced materials and manufacturing experience. Matrix continues to identify ways to reduce its carbon footprint. The Company is progressing a number of initiatives including establishing renewable energy sources for the Henderson site, supporting customers with their carbon reduction initiatives and using recycled plastics in engineered composite products produced on site. Company Risk The Company maintains a formal process on risk identification and management. Key risks that the Company has identified and is actively managing includes, but is not limited to the following: Health and Safety of our employees Product design, performance and delivery Contractual and legal project risk Key person dependency Managing fluctuations in facility production activity Cyber Security Company Legal compliance
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11 LIGHTER· STRONGER· SMARTER DIRECTORS’ REPORT Dividends In respect of the financial year ended 30 June 2025, no interim dividend was paid, and the directors have determined that no final dividend will be paid (2024: nil). Indemnification of Officers and Auditors During the financial year, the Company paid a premium in respect of a contract insuring the directors of the Company (as named above) and all executive officers of the Company and any related body corporate against a liability incurred as such director or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate, against a liability incurred as such an officer or auditor. The Company was not a party to any such proceedings during the year. Directors’ Meetings The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while they were a director or committee member). During the financial year, seven board meetings, three remuneration committee meetings, three nominations committee meetings, one risk and sustainability committee meetings and three audit committee meetings were held. (i) Committees have been combined as the Nominations and Remuneration Committee effective 1 July 2024. (ii) Stephan Kirsch was appointed as director on 25 February 2025. Steven Cole resigned as a director on 28 February 2025. Board of Directors Nomination and Remuneration Committee (i) Audit Committee Risk and Sustainability Committee Eligible to Attend Attended Eligible to Attend Attended Eligible to Attend Attended Eligible to Attend Attended PJ Hood 7 7 3 3 3 3 1 1 AP Begley 7 7 - - - - - - BW Cocks 7 7 - - - - - - S Kirsch (ii) 4 4 1 1 2 2 1 1 S Cole (ii) 4 4 2 2 2 2 1 - C Sutherland 7 7 3 3 3 3 1 1 A Terry 7 7 3 3 3 3 1 1
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MATRIX ANNUAL REPORT 2025 12 DIRECTORS’ REPORT Proceedings on Behalf of Company No person has applied for leave of Court under the Corporations Act 2001 to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purposes of taking responsibility on behalf of the Company for all or any part of those proceedings. Provision of Non-Audit Services No non-audit services in the current financial year. Auditor’s independence declaration The auditor’s independence declaration is included on page 27 of the annual report. Corporate Governance Statement The Board of Matrix is responsible for the corporate governance of the company and its subsidiaries. The Board has governance oversight of all matters relating to the strategic direction, corporate governance, policies, practices, management and operations of Matrix with the aim of delivering value to its Shareholders and respecting the legitimate interests of its other valued stakeholders, including employees, customers and suppliers. Under ASX Listing Rule 4.10.3, Matrix is required to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL to the page on its website where such statement is located. Matrix has published its corporate governance statement on the “Corporate Governance” page of its web site at https://www.matrixengineered.com/investors/corporate-governance. ASIC Instrument 2016/191 The Company is of an entity to which Australian Securities and Investments Commission (ASIC) Corporations (Rounding in Financial/Directors’ Reports) Instruments 2016/191, dated 24 March 2016 applies. Amounts in the Directors’ Report and the Financial Statements have been rounded to the nearest thousand dollars in accordance with ASIC Instrument 2016/191, unless otherwise indicated.
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13 LIGHTER· STRONGER· SMARTER DIRECTORS’ REPORT Audited Remuneration Report This remuneration report, which forms part of the directors’ report, sets out information about the remuneration of the Company’s directors and key management personnel for the financial year ended 30 June 2025. The term Key Management Personnel refers to those persons having authority and responsibility for planning, controlling and directing the activities of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the consolidated entity. Any reference to “Executives” in this report refers to those Key Management Personnel who are not Non-Executive Directors. The prescribed details for each person covered by this report are detailed below under the following headings: Key management personnel Remuneration policy Remuneration structure Relationship between remuneration and company performance Remuneration of directors and key management personnel Key terms of employment contracts Related Party Transactions Key management personnel equity holdings Key management personnel share-based payment holdings – Performance Rights Key management personnel share-based payment holdings – Share Options Key Management Personnel The directors and other Key Management Personnel of the consolidated entity during or since the end of the financial year were: Non-Executive Directors The following persons acted as non-executive directors of the Company during the financial year: Mr PJ Hood (Chairperson) Mr S Cole (resigned 28 February 2025) Mr C Sutherland Ms A Terry Mr S Kirsch (appointed 25 February 2025) Unless otherwise stated, the named persons held their current position for the whole of the financial year and since the end of the financial year.
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MATRIX ANNUAL REPORT 2025 14 DIRECTORS’ REPORT Audited Remuneration Report (continued) Executive Officers The following persons were employed as Matrix executives (Key Management Personnel) during the financial year: Mr AP Begley (Chief Executive Officer / Director) Mr BW Cocks (Chie f Financial Officer / Director / Company Secretary) The named persons held their current position for the whole of the financial year and since the end of the financial year. Remuneration Policy Non-Executive Directors The remuneration policy aims to attract, retain, and motivate talented and highly skilled non- executive Directors and to remunerate fairly and responsibly having regard to the following factors: the level of fees paid to non-executive Directors are at market rate for comparable companies; the size and complexity of the Company’s operations; and the responsibilities and work requirements of the Directors. The Re muneration Committee determines payments to the non-executive Directors and reviews their remuneration annually based on market practice, duties, and accountability. Independent external advice is sought where required. Non-executive Directors are paid fixed annual fees; they do not receive any variable, performance-based remuneration. The maximum aggregate amount of fees that can be paid to non-executive Directors is subject to approval by shareholders (currently $500,000 per annum). The allocation of fees to non-executive directors within this cap has been determined after consideration of a number of factors including the time commitment of directors, the size and scale of the Company’s operations, the skillsets of Directors, the quantum of fees paid to non-executive directors of comparable companies and participation in Board Committee work. The table below reflects the annual fees of non-executive directors (inclusive of superannuation) for the financial year ended 30 June 2025 as opposed to the previous year to 30 June 2024. Name FY25 Fees FY24 Fees Peter Hood 111,500 111,000 Stephan Kirsch (i) 29,269 - Steven Cole (i) 52,034 77,700 Craig Duncan (ii) - 51,800 Chris Sutherland 78,050 77,700 Alison Terry (ii) 78,050 3 2,375 (i) Mr Kirsch was appointed on 25 February 2025 and Mr Cole resigned on 28 February 2025. Fees represent the pro rata fee for the period. (ii) Ms Terry was appointed on 12 February 2024 and Mr Duncan resigned on 19 February 2024. Fees represent the pro rata fee for the period.
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15 LIGHTER· STRONGER· SMARTER DIRECTORS’ REPORT Audited Remuneration Report (continued) In FY25, the Chairman received actual total annual fees of $111,500 (2024: $111,000). All other non- executive directors received an annual fee of $78,050 (2024: $77,000). All amounts specified in this section are inclusive of superannuation contributions. Matrix Executives The Company’s remuneration policy for Matrix executives (including executive directors) is to fairly and responsibly reward them having regard to the performance of the Company, the performance of the executive and prevailing remuneration expectations in the market. The Company also seeks to establish remuneration structures which align the interests of its key management personnel with the interests of the Company and its shareholders. The payment of any incentive amounts to executive Directors and Matrix executives is based on the delivery of key Group and individual outcomes, and the profitability of the Matrix Group. As detailed in this report, certain Matrix executives are entitled to receive short term incentive payments in respect of FY25 based on delivery of key financial and non-financial outcomes. The details of Matrix’s long term incentive plan for its executives are provided below. The amount of compensation for current and future periods for Matrix executives is based on consideration of market factors, comparison to peers and reference to the individual’s experience and performance. Overall, remuneration policies are subject to the discretion of the Board and can be changed to reflect the competitive market and business conditions when in the interest of the Company and shareholders. Remuneration Structure The remuneration structure for Matrix Executives comprises fixed and variable components which are reviewed annually by the Remuneration Committee. Fixed remuneration Fixed remuneration comprises base salary, employer superannuation contributions and other allowances and non-cash benefits. Each Executive’s fixed remuneration is reviewed and benchmarked annually. The level of remuneration is set to enable the Company to attract and retain proven performers. Variable remuneration Variable remuneration comprises short term incentives (STIs) linked to Company and individual performance over one year, and long term incentives (LTIs) linked to performance over a period greater than a year. The following table sets out the maximum variable remuneration each Executive can achieve for FY25, expressed as a percentage of total remuneration, if maximum performance was achieved for the STI and LTI components of their variable remuneration.
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MATRIX ANNUAL REPORT 2025 16 DIRECTORS’ REPORT Audited Remuneration Report (continued) Executive Maximum STI (% of Total Rem) Maximum LTI (% of Total Rem) Maximum Total Variable Remuneration (% of Total Rem) Aaron Begley Managing Director & Chief Executive Officer 27.5% 9.5% 37.0% Brendan Cocks Chief Financial Officer & Company Secretary 19.2% 9.0% 28.2% STI remuneration A comprehensive Short Term Incentive Plan (STI Plan) was in place for key management personnel for FY25. The STI Plan is based on a number of key performance indicators (KPIs) including a subjective performance KPI, safety performance KPI and profitability KPI. The STI Plan allows executives and employees to benefit from achieving results that surpass their target KPIs. Conversely, they will only be proportionately rewarded should the KPI targets not be fully achieved. STIs are paid as 100% cash. STI Key Performance Indicators The STI KPIs comprise a mix of financial and non-financial metrics which are aligned to both the financial success of the Company and its longer term sustainability and are set each year. The KPIs for each Executive are tailored to their individual responsibilities but are broadly described in the following categories: (i) Financial: Achievement of predetermined targets for EBITDAF (Earnings before Interest, Taxes, Depreciation, Amortisation, and Foreign Exchange) and cost management. (ii) Safety: The Board reviews the Company’s safety performance and has established a series of lagging and lead indicators to measure the Company’s performance in ensuring a safe workplace. The primary metrics include lost time injuries, medical treatment injury frequency rate (MTIFR) and hazard reporting, which is a behaviour-based lead indicator. (iii) Individual Objectives: The Board recognises each Executive contributes to the Company’s business strategy differently. Progress in the achievement of each Executive’s personal objectives is monitored by the Board and is included in the STI plan to ensure that an appropriate balance is maintained between the Company’s short term and long term objectives.
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17 LIGHTER· STRONGER· SMARTER DIRECTORS’ REPORT Audited Remuneration Report (continued) The following table sets out the various KPI categories for the FY25 STI Plan and the weightings attributable to each of them. The FY25 STI plan is under review by the Board. In the Board’s view, the KPIs that have been established align the reward of the Executives with the interests of shareholders. KPI A Begley BW Cocks EBITDAF 40.0 40. 0 Safety 15.0 15. 0 Individual Objectives 45.0 45. 0 TOTAL 100.0 10 0.0 The detailed KPIs are determined by the Nomination and Remuneration Committee. For the year, the EBITDAF measure was not met, while the Safety was met in full and Individual Objectives measures were partially met. LTI remuneration Long-term incentive remuneration is determined in accordance with the Matrix Rights Plan. The Matrix Rights Plan includes a Senior Executive Performance Rights Plan (SEPRP) and a Senior Executive Share Options Plan (SESOP) (together “the LTI Plans”). The LTI Plans apply exclusively to those Matrix Executives who are Key Management Personnel. Separate long-term incentive plans have been established for other Matrix employees in prior years. The Executives named below are invited to accept a dollar value grant of rights, which are allocated between rights issued under the SEPRP and the SESOP respectively, with an allocation of 50 per cent of the total value of their respective LTI Plan grants to the SEPRP and the remaining 50 per cent to the SESOP based on the total value of their respective LTI Plan grants. The total dollar value of the grant offered to each of these executives and their respective allocations of rights under the SEPRP and SESOP during the year are set out in the following table: Name Entitlement Executive Performance Rights entitled during year Executive Share Options entitled during the year (exercise price $0.43) Value Grant ed (iii) Fair value per right (i) Number (ii) Fair Value per option (i) Number (ii) Aaron Begley $220,000 $ 0.0719 554,039 $0.0436 827,123 Brendan Cocks $150,000 $ 0.0719 377,754 $0.0436 563,948 TOTAL 931,793 1,391,071
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MATRIX ANNUAL REPORT 2025 18 DIRECTORS’ REPORT Audited Remuneration Report (continued) (i) The fair value of the rights and options were revalued using a Monte Carlo Simulation at reporting date for the purposes of expense recognition. (ii) The number issued was calculated based on a valuation conducted and presented to the Board in September 2024. (iii) The entitlement amount is as determined by the Nomination and Remunerations Committee in September 2024. (iv) At the Annual General Meeting of Shareholders held in November 2024, the grant of a total of 1,391,071 Executive Share Options and 931,793 Executive Performance Rights to Mr Aaron Begley and Mr Brendan Cocks pursuant to the Employee Awards Plan was approved by shareholders. Based on the Notice of Meeting those Options and Rights were required to be issued 90 days after the AGM and were not issued during this period. The Company intends to seek shareholder re-approval at the November 2025 Annual General Meeting to issue those Options and Rights to Mr Begley and Mr Cocks, together with any further Rights and Options awarded for the following year. The Group has recognised the share-based payment expense on these share options based on valuation as at 30 June 2025. Aaron Begley’s and Brendan Cocks’ rights and options were approved on 18 September 2024. For purposes of these consolidated financial statements, the rights and options were revalued at 30 June 2025 as the grant date has not been achieved as at year end. The rights and options have a vesting date of 12 September 2027 and expiry dates of 21 November 2027 and 21 November 2029, respectively. The entitlement amount issued to each KMP is determined by the Nominations and Remuneration Committee. The Options above have an exercise price of $0.434. The Board determined that the target of $0.434 was the most appropriate target providing a stretch growth target from the share price at time of issue. Options granted under the SESOP Share Options granted under the SESOP are entitlements to purchase shares at the exercise price, should they vest. Share Options granted under the SESOP are subject to the following vesting conditions: three-year service period from issue; and Issued during FY22 - the 14-day VWAP of MCE shares at the vesting date reaching $0.32. Issued during FY23 - the 14-day VWAP of MCE shares at the vesting date reaching $0.38. Issued during FY24 - the 14-day VWAP of MCE shares at the vesting date reaching $0.35. Issued during FY25 – the 14-day VWAP of MCE shares at the vesting date reaching $0.43.
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19 LIGHTER· STRONGER· SMARTER DIRECTORS’ REPORT Audited Remuneration Report (continued) Options issued under the SESOP in current and prior years that had not vested prior to the start of the financial year are as follows: Name Date of Issue Fair Value per option Exercise price Number Issued Value $ Expiry Date Vesting Date Issued During FY22 – Senior Executive Share Options Plans (i) Aaron Begley 15/12/21 $0.0401 $0.32 2,414,773 $96,843 08/03/25 13/11/24 Brendan Cocks 08/03/22 $0.0472 $0.32 1,420,455 $67,112 08/03/25 31/08/24 Issued During FY23 – Senior Executive Share Options Plans Aaron Begley 17/11/22 $0.0749 $0.38 1,334,533 $100,000 15/12/25 31/08/25 Brendan Cocks 15/12/22 $0.0749 $0.38 667,267 $50,000 15/12/25 31/08/25 Issued During FY24 – Senior Executive Share Options Plans Aaron Begley 23/11/23 $0.1224 $0.35 1,010,621 $123,740 22/12/28 31/08/26 Brendan Cocks 22/12/23 $0.1639 $0.35 757,966 $124,201 22/12/28 31/08/26 Issued During FY25 – Senior Executive Share Options Plans (ii) (i) These options lapsed on expiry without being exercised during the year. (ii) In addition to the share options above, at the Annual General Meeting of Shareholders held in November 2024, the grant of a total of 1,391,071 Executive Share Options to Mr Aaron Begley and Mr Brendan Cocks pursuant to the Employee Awards Plan was approved by shareholders. Based on the Notice of Meeting those Options were required to be issued 90 days after the AGM and were not issued during this period. The Company intends to seek shareholder re-approval at the November 2025 Annual General Meeting to issue those Options to Mr Begley and Mr Cocks, together with any further Options awarded for the following year. The Group has recognised the share- based payment expense on these share options based on valuation as at 30 June 2025. Rights granted under the SEPRP Performance Rights granted under the SEPRP are entitlements to receive a set number of shares should the rights vest. Performance Rights granted under the SEPRP are subject to the following vesting conditions: Three-year service period from issue period; and Issued during FY22 – the 14-day VWAP of MCE shares at the vesting date reaching $0.32. Issued during FY23 - the 14-day VWAP of MCE shares at the vesting date reaching $0.38. Issued during FY24 - the 14-day VWAP of MCE shares at the vesting date reaching $0.35. Issued during FY25 – the 14-day VWAP of MCE shares at the vesting date reaching $0.43.
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MATRIX ANNUAL REPORT 2025 20 DIRECTORS’ REPORT Audited Remuneration Report (continued) Rights issued under the SEPRP in current and prior years that had not vested prior to the start of the financial year are as follows: Name Date of Issue Fair Value per right Number issued Value $ Expiry Date Vesting Date Issued During FY22 – Senior Executive Performance Rights Plans (i) Aaron Begley 15/12/21 $0.0774 1,244,51 0 $96,317 08/03/25 31/08/24 Brendan Cocks 08/03/22 $0. 0918 732,064 $67,227 08/03/25 31/08/24 Issued During FY23 – Senior Executive Performance Rights Plans Aaron Begley 17/11/22 $0. 1358 736,388 $100,000 15/12/25 31/08/25 Brendan Cocks 15/12/22 $0. 1358 368,194 $50,000 15/12/25 31/08/25 Issued During FY24 – Senior Executive Performance Rights Plans Aaron Begley 23/11/23 $0. 1619 601,609 $97,391 22/12/26 31/08/26 Brendan Cocks 22/12/23 $0. 2229 451,207 $100,564 22/12/26 31/08/26 Issued During FY25 – Senior Executive Performance Rights Plans (ii) (i) Performance rights of 1,244,510 for Aaron Begley and 732,064 for Brendan Cocks vested on 31 August 2024 with the rights being converted to ordinary fully paid shares for nil consideration. (ii) In addition to the share performance rights above, at the Annual General Meeting of Shareholders held in November 2024, the grant of a total of 931,793 Executive Performance Rights to Mr Aaron Begley and Mr Brendan Cocks pursuant to the Employee Awards Plan was approved by shareholders. Based on the Notice of Meeting those Rights were required to be issued 90 days after the AGM and were not issued during this period. The Company intends to seek shareholder re-approval at the November 2025 Annual General Meeting to issue those Rights to Mr Begley and Mr Cocks, together with any further Rights awarded for the following year. The Group has recognised the share-based payment expense on these performance rights based on valuation as at 30 June 2025. Hedging LTI grants The Company’s Remuneration Policy expressly prohibits participants in an equity-based remuneration plan from entering into transactions which limit the economic risk of participating in the plan, through the use of derivatives or otherwise.
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21 LIGHTER· STRONGER· SMARTER DIRECTORS’ REPORT Audited Remuneration Report (continued) Relationship between Remuneration and Company Performance One of the directors’ remuneration objectives is to align the interests of its key management personnel with the interests of the Company and its shareholders. In FY25, this was achieved through the continuation of the STI Plan which placed a material proportion of executives’ remuneration at risk, with STI Plan KPIs linked to financial performance, safety performance and the achievement of key strategic goals and objectives. The table below sets out summary information about the consolidated entity’s earnings and movement in shareholder wealth for the five years to 30 June 2025. FY25 FY24 FY23 FY22 FY21 Revenue $’000 74,770 85,038 47,204 28,625 17,618 Net profit / (loss) before tax $’000 (1,757) 3,646 8,682 (5,035) (27,924) Net profit / (loss) after tax $’000 (2,218) 3,646 8,682 (4,776) (27,924) Share price at start of the year $ 0.33 0.28 0.15 0.14 0.16 Share price at end of year $ 0.22 0.33 0.28 0.15 0.14 Dividends paid cps - - - - - Shareholder return of capital $ - - - - - Basic profit / (loss) per share cps (1.00) 1.66 5.20 (3.27) (27.3) Diluted profit / (loss) per share cps (1.00) 1.44 5.20 (3.27) (27.3) In addition, the operation of the Matrix Rights Plan in FY25 further aligns the interests of the Company’s key management personnel with its shareholders.
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MATRIX ANNUAL REPORT 2025 22 DIRECTORS’ REPORT Audited Remuneration Report (continued) Remuneration of Directors and Key Management Personnel Details of the elements comprising the remuneration of the Company’s key management personnel are set out in the following table. Short Term Benefits Post Employment benefits Long term benefits Share based payment Total Proportion performance realised Salary & fees Cash bonuses (i) Non- monetary benefits (ii) Total Superannuation benefits Long service leave Performance rights and share options (iii) $ $ $ $ $ $ $ $ % Executive Directors AP Begley (MD & CEO) 2025 476,900 88,000 35,644 600,544 29,932 (37,752) 174,635 767,359 34.2 2024 452,603 143,050 16,185 611,838 27,399 (3,962) 211,155 846,430 41.8 BW Cocks (CFO) (iv) 2025 374,581 59,400 (1,059) 432,922 29,932 7,958 142,544 613,356 32.9 2024 365,000 84,000 (961) 448,039 27,399 11,503 135,985 622,926 35.3 Non-Executive Directors PJ Hood 2025 100,000 - - 100,000 11,500 - - 111,500 - 2024 100,000 - - 100,000 11,000 - - 111,000 - S Kirsch(vi) 2025 26,250 - - 26,250 3,019 - - 29,269 2024 - - - - - - - - - S Cole (vi) 2025 46,667 - - 46,667 5,367 - - 52,034 - 2024 70,000 - - 70,000 7,700 - - 77,700 - CN Duncan (v) 2025 - - - - - - - - 2024 46,667 - - 46,667 5,133 - - 51,800 C Sutherland 2025 70,000 - - 70,000 8,050 - - 78,050 - 2024 70,000 - - 70,000 7,700 - - 77,700 - A Terry (v) 2025 70,000 - - 70,000 8,050 - - 78,050 - 2024 29,167 - - 29,167 3,208 - - 32,375 - Total 2025 1,164,398 147,400 34,585 1,346,383 95,850 (29,794) 317,179 1,729,618 2024 1,133,437 227,050 15,224 1,375,711 89,539 7,541 347,140 1,819,931
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23 LIGHTER· STRONGER· SMARTER DIRECTORS’ REPORT Audited Remuneration Report (continued) (i) The FY2025 remuneration includes cash bonus accrual for Aaron Begley and for Brendan Cocks. (ii) Represents the movement in accrued annual leave. (iii) Share based payments are accounted for over the vesting period. (iv) Brendan Cocks was appointed as an Executive Director on 12 February 2024. Disclosed amount for FY2024 includes remuneration as Key Management Personnel prior to his date of appointment. (v) Alison Terry was appointed as a Non-Executive Director on 12 February 2024. Craig Duncan resigned as a Non-Executive Director on 19 February 2024. (vi) Stephan Kirsch was appointed as a Non-Executive Director on 25 February 2025. Steven Cole resigned as a Non-Executive Director on 28 February 2025. Key terms of Employment Contracts Executive service agreements The Company has executive service agreements with each of its Key Management Personnel. The key terms of the executive service agreements are as follows. Name Original Start Date Term Notice period AP Begley Managing Director & CEO 04/10/1999 Indefinite 6 months (Company)/3 months (individual) BW Cocks CFO & Company Secretary 12/09/2016 Indefinite 6 months (Company)/3 months (individual) There are no other contracted termination payments other the notice periods detailed. Each of the above executives is entitled to participate in the Company’s STI and LTI programmes. Related Party Transactions There were no transactions with key management personnel and their related parties for the year ended 30 June 2025.
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MATRIX ANNUAL REPORT 2025 24 DIRECTORS’ REPORT Audited Remuneration Report (continued) Key management personnel equity holdings The movement during the reporting period in the number of shares in Matrix Composites & Engineering Ltd held directly, indirectly, or beneficially, by each key management person, including related parties, is as follows: (i) Represents the balance of shares held at resignation on 28 February 2025. Balance at 1 July 2024 Granted as remuneration On Exercise of Options / Performance Rights Purchased / (sold) on market Balance at 30 June 2025 No. No. No. No. No. Directors PJ Hood 1,608,000 - - (430,000) 1,178,000 AP Begley 7,456,348 - 1,244,510 10,000 8,710,858 BW Cocks 463,673 - 732,064 - 1,195,737 S Cole 500,000 - - - 500,000(i) C Sutherland 418,433 - - - 418,433 A Terry 100,000 - - - 100,000 S Kirsch - - - - -
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25 LIGHTER· STRONGER· SMARTER DIRECTORS’ REPORT Audited Remuneration Report (continued) Key management personnel share-based payment holdings – Performance Rights (PR) Balance at 1 July 2024 Granted as Remuner- ation (ii) Exercised Forfeited Rights Balance at 30 June 2025 Balance vested at 30 June 2025 Vested but not exercisable Vested and exercisable PRs vested during year No. No. No. No. No. No. No. No. No. Directors PJ Hood - - - - - - - - - AP Begley 2,582,507 554,039 (1,244,51 0) - 1,892,036 - - - 1,244,510(i) BW Cocks 1,551,465 377,754 (732,064) - 1,197, 155 - 732,064(i) S Cole - - - - - - - - - S Kirsch - - - - - - - - - C Sutherland - - - - - - A Terry - - - - - - - - - (i) Represents the full vesting of performance rights issued in FY22 during the year. (ii) At the Annual General Meeting of Shareholders held in November 2024, the grant of a total of 931,793 Executive Performance Rights to Mr Aaron Begley and Mr Brendan Cocks pursuant to the Employee Awards Plan was approved by shareholders. Based on the Notice of Meeting those Rights were required to be issued 90 days after the AGM and were not issued during this period. The Company intends to seek shareholder re-approval at the November 2025 Annual General Meeting to issue those Rights to Mr Begley and Mr Cocks, together with any further Rights awarded for the following year. The Group has recognised the share-based payment expense on these performance rights based on valuation as at 30 June 2025. Key management personnel share-based payment holdings – Share Options (SO) Balance at 1 July 2024 Granted as Remuner- ation (i) Exercised Expired/ Options Balance at 30 June 2025 Balance vested at 30 June 2025 Vested but not exercisable Vested and exercisable SOs vested during year No. No. No. No. No. No. No. No. No. Directors PJ Hood - - - - - - - - - AP Begley 4,759,927 827,123 - (2, 414,773) 3, 172,277 - - - 2, 414,773 BW Cocks 2,845,688 563,948 - (1, 420,455) 1, 989,181 1, 420,455 S Cole - - - - - - - - - S Kirsch - - - - - - - - - C S u t h e r l a n d - A Terry - - - - - - - - - (i) At the Annual General Meeting of Shareholders held in November 2024, the grant of a total of 1,391,071 Executive Share Options to Mr Aaron Begley and Mr Brendan Cocks pursuant to the Employee Awards Plan was approved by shareholders. Based on the Notice of Meeting those Options were required to be issued 90 days after the AGM and were not issued during this period. The Company intends to seek shareholder re-approval at the November 2025 Annual General Meeting to issue those Options to Mr Begley and Mr Cocks, together with any further Options awarded for the following year. The Group has recognised the share-based payment expense on these share options based on valuation as at 30 June 2025.
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MATRIX ANNUAL REPORT 2025 26 DIRECTORS’ REPORT DIRECTORS’ REPORT This Directors’ report is sig ned in accordance with a resolution of directors made pursuant to s.298(2) of the Corporations Act 2001. On behalf of the Director s Aaron P Begley Managing Dire ctor and Chief Executive Officer Perth, 26 August 2025
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KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Matrix Composites & Engineering Ltd I declare that, to the best of my knowledge and belief, in relation to the audit of Matrix Composites & Engineering Ltd for the financial year ended 30 June 2025 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Graham Hogg Partner Perth 26 August 2025
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MATRIX ANNUAL REPORT 2025 28 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2025 Consolidated Notes 2025 $’000 2024 $’000 Revenue 5 74,770 85,038 Cost of sales (63,997) (67,507) Gross profit 10,773 17,531 Finance income 6 3,260 1,556 Other income 6 372 13 Administration expenses (5,443) (5,524) Finance costs 7 (4,398) (3,807) Marketing expenses (2,656) (2,103) Research expenses (609) (573) Engineering expenses (3,023) (2,726) Other expenses 7 (33) (721) (Loss)/Profit before income tax (1,757) 3,646 Income tax expense 8 (461) - (Loss)/Profit after income tax for the years (2,218) 3,646 Other comprehensive (loss)/income Items that may be reclassified subsequently to profit or loss Net foreign currency translation differences (107) (6) Other comprehensive loss for the year (107) (6) Total comprehensive (loss)/income for the year (2,325) 3,640 (Loss)/Profit for the year is attributable to: Owners of Matrix Composites & Engineering Ltd (2,218) 3,646 (2,218) 3,646 Total comprehensive (loss)/income for the year is attributed to: Owners of Matrix Composites & Engineering Ltd (2,325) 3,640 (2,325) 3,640 Cents Cents (Loss)/Earnings per share Basic (loss)/earnings per share 31 (1.00) 1.66 Diluted (loss)/earnings per share 31 (1.00) 1.44 The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
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29 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2025 Consolidated Notes 2025 $’000 2024 $’000 ASSETS Current assets Cash and cash equivalents 9 18,343 23,320 Trade and other receivables 10 17,793 26,135 Inventories 11 9,200 8,701 Prepayments 12 1,118 1,611 Forward contract asset 18 32 - Total current assets 46,486 59,767 Non-current assets Prepayments 12 - 332 Property, plant and equipment 13 15,735 15,317 Right-of-use assets 14 17,501 18,745 Intangibles 15 1,055 990 Total non-current assets 34,291 35,384 Total assets 80,777 95,151 LIABILITIES Current liabilities Trade and other payables 16 9,378 9,835 Progress claims and deposits 5 279 10,317 Lease liabilities 14 766 630 Employee benefits 17 1,909 1,875 Forward contract liability 18 - 69 Convertible note 20 7,221 - Total current liabilities 19,553 22,726 Non-current liabilities Lease liabilities 14 29,076 29,847 Employee benefits 17 86 98 Provisions 19 2,738 2,549 Convertible note 20 - 8,916 Total non-current liabilities 31,900 41,410 Total liabilities 51,453 64,136 Net asset 29,324 31,015 EQUITY Issued capital 21 140,365 139,992 Reserves 22 (475) (398) Accumulated losses (110,566) (108,579) Total surplus in equity 29,324 31,015 The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
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MATRIX ANNUAL REPORT 2025 30 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2025 Consolidated Issued Capital Foreign Currency translation reserve Shared- based payment reserve Accumulated losses Total equity $’000 $’000 $’000 $’000 $’000 Balance at 1 July 2024 139, 992 (1,429) 1,031 (108,579) 31,015 Loss after income tax for the year - - - (2,218) (2,218) Other comprehensive loss for the year, net of tax - (107) - - (107) Total comprehensive loss for the year - (107) - (2,218) (2,325) Transactions with owners in their capacity as owners: Vesting / lapse of equity-settled share- based payments 373 - (604) 231 - Share-based payments (note 27) - - 634 - 634 Total transactions with owners in their capacity as owners 373 - 30 231 634 Balance at 30 June 2025 140,365 (1,536) 1,061 (110,566) 29,324 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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31 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2024 Consolidated Issued Capital Foreign Currency translation reserve Shared- based payment reserve Accumulated losses Total equity $’000 $’000 $’000 $’000 $’000 Balance at 1 July 2023 139,851 (1,423) 2,428 (114,091) 26,765 Profit after income tax for the year - - - 3,646 3,646 Other comprehensive loss for the year, net of tax - (6) - - (6) Total comprehensive income / (loss) for the year - (6) - 3,646 3,640 Transactions with owners in their capacity as owners: Vesting / lapse of equity-settled share- based payments 141 - (2,007) 1,866 - Share-based payments (note 27) - - 610 - 610 Total transactions with owners in their capacity as owners 141 - (1,397) 1,866 610 Balance at 30 June 2024 139,992 (1,429) 1,031 (108,579) 31,015 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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MATRIX ANNUAL REPORT 2025 32 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2025 Consolidated Notes 2025 $’000 2024 $’000 OPERATING ACTIVITIES Receipts from customers (inclusive of GST) 73,023 85,649 Payments to suppliers and employees (inclusive of GST) (71,546) (73,287) Interest received 745 888 Finance costs paid (368) (140) Interest expense on lease liabilities (2,270) (2,236) Net cash (used in)/provided by operating activities 24 (416) 10,874 INVESTING ACTIVITIES Purchase of property, plant and equipment 13 (4,857) (4,340) Payments for intangibles 15 (287) (153) Proceeds from disposal of property, plant and equipment - 15 Receipt of term deposits - 7,471 Net cash (used in)/provided by investing activities (5,144) 2,993 FINANCING ACTIVITIES Interest paid on convertible note 20 - (725) Refund/(payment) of security deposit 580 (1,675) Repayment of lease liabilities (630) (698) Net cash used in financing activities (50) (3,098) Net (decrease)/increase in cash and cash equivalents (5,610) 10,769 Effect of movements in exchange rates on cash held 633 4 Cash and cash equivalents at the beginning of the financial year 9 23,320 12,547 Cash and cash equivalents at the end of the financial year 9 18,343 23,320 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
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33 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1. General information The consolidated financial statements cover Matrix Composites & Engineering Ltd as a consolidated entity (the 'Group') consisting of Matrix Composites & Engineering Ltd (the 'Company') and the entities it controlled at the end of, or during, the year. Matrix Composites & Engineering Ltd is a limited liability company incorporated in Australia. The addresses of its registered office, principal places of business and principal activities are disclosed in the introduction to the annual report. A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of the consolidated financial statements. The Group operates as a “for-profit” enterprise. The consolidated financial statements were authorised for issue by the directors on 26 August 2025. Note 2. Summary of material accounting policies The following material accounting policies have been adopted in the preparation and presentation of the financial report. These policies have been consistently applied to all the years presented, unless otherwise stated. Going concern The consolidated financial statements have been prepared on a going concern basis which assumes the settlement of liabilities and the realisation of assets in the normal course of business. For the year ended 30 June 2025, the Group recognised total comprehensive loss of $2.33m and had operating cash outflows of $0.42m. The Group’s net current assets as at 30 June 2025 amounted to $26.93m. Management operating forecast for the next 12 months includes: Execution and delivery of current contracted work at budgeted margins Expected work to convert in-progress (outstanding) and expected upcoming quotations with established customers, into cashflow at forecast levels and margins Recurring sales of established products at forecast levels and margins. The Directors have reviewed the Company’s overall financial position, including forecast operating and financing assumptions, and believe the use of the going concern basis of accounting is appropriate as they believe the Company has sufficient funds available for at least the next 12 months.
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MATRIX ANNUAL REPORT 2025 34 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Basis of preparation These consolidated financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law. The financial statements comprise the consolidated financial statements of the Group and the Company. For the purpose of preparing the consolidated financial statements, the Company is a for-profit entity. Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Group comply with International Financial Reporting Standards (‘IFRS’). The Group has reclassified the Change in fair value of embedded derivatives amounting to $577,000 previously included in “Other income” in the prior year to “Finance income” to conform with the current year presentation. There was no impact to previously reported profit after income tax for the year. Historical cost convention The consolidated financial statements have been prepared on the basis of historical cost, except for certain non-current assets and financial instruments that are measured at fair values, as explained in the accounting policies below. Historical cost is generally based on the fair values of the consideration given in exchange for assets. Critical accounting estimates The preparation of the consolidated financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3. Standards and interpretations that are effective for the current year The Group has adopted all new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to its operations and effective for an accounting period that begins on or after 1 July 2024. Set out below are the new and revised Standards and amendments effective for the current year that are relevant to the Group: Classifying liabilities as current or non-current and non-current liabilities with covenants (Amendments to AASB 101 Presentation of Financial Statements) Lease Liability in a Sale-and-Leaseback (Amendments to AASB16) The adoption of the above new and revised Standards has no material impact on the consolidated financial statements upon adoption.
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35 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Standards and interpretations in issue not yet effective A number of new standards are effective for annual periods beginning after 1 July 2025 and earlier application is permitted; however, the Group has not early adopted the new or amended standards in preparing these consolidated financial statements. The following new and amended standards are not expected to have a significant impact on the Group's consolidated financial statements. Lack of Exchangeability (Amendments to AASB 121) Contracts Referencing Nature-dependent Electricity (Amendments to AASB 9) Classification and Measurement of Financial Instruments (Amendments to AASB 9 Financial Instruments and AASB 7 Financial Instruments: Disclosures) Annual Improvements to Australian Accounting Standards – Volume 11 AASB 18 Presentation and Disclosure in Financial Statements The Group is still assessing the impact of these new standards and amendments/improvements to standards as at the date of this report. Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary information about the parent entity is disclosed in note 30. Principles of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company: has power over the investee; is exposed, or has rights, to variable returns from its involvement with the investee; and has the ability to use its power to affect its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including: the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders; potential voting rights held by the Company, other vote holders or other parties; rights arising from other contractual arrangements; and
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MATRIX ANNUAL REPORT 2025 36 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the consolidated financial statements of subsidiaries to bring their accounting policies into line with the Company's accounting policies. Subsidiaries Subsidiaries are entities controlled by the Group. The Group 'controls' an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Loss of control When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost. Transactions eliminated on consolidation All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Company are eliminated in full on consolidation. Operating segments An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including those relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the Chief Operating Decision Makers (CODM) for which discrete financial information is available. The CODM has identified that the Group has one single operating segment which is the business operations of the Group.
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37 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Foreign currency transactions and balances Transaction and balances The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group entity are expressed in Australian dollars (‘$’), which is the functional currency of the parent and Australian subsidiaries and the presentation currency for the consolidated financial statements. In preparing the financial statements of each individual Group entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the translation of monetary and non-monetary items are recognised in the consolidated profit or loss and other comprehensive income, except where recognised in other comprehensive income as a qualifying cash flow or net investment hedge. Foreign currency cash flows Cash flows arising from transactions in a foreign currency shall be recorded in an entity’s functional currency by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the cash flow. The cash flows of a foreign subsidiary shall be translated at the exchange rates between the functional currency and the foreign currency at the dates of the cash flows. Cash flows denominated in a foreign currency are reported in a manner consistent with AASB 121 The Effects of Changes in Foreign Exchange Rates. This permits the use of an exchange rate that approximates the actual rate. Unrealised gains and losses arising from changes in foreign currency exchange rates are not cash flows. However, the effect of exchange rate changes on cash and cash equivalents held or due in a foreign currency is reported in the consolidated statement of cash flows in order to reconcile cash and cash equivalents at the beginning and the end of the period. This amount is presented separately from cash flows from operating, investing and financing activities and includes the differences, if any, had those cash flows been reported at end of period exchange rates. Revenue recognition Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be entitled in exchange for transferring goods or services to a customer. Please refer to Note 5 for the detailed accounting policies for each revenue stream of the Group.
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MATRIX ANNUAL REPORT 2025 38 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Interest income Interest income is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. All revenue is stated net of the amount of goods and services tax (GST). Cost of sales The cost of manufactured products includes direct materials, direct labour and manufacturing overheads. Income tax The charge for current income tax expense is based on the profit for the year end adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantively enacted by the end of the reporting period. Deferred tax is recognised in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. No deferred tax is recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Current and deferred tax is recognised in the profit or loss except where it relates to items that may be recognised directly in equity or in other comprehensive income. Deferred tax assets and liabilities are offset if there is a legally enforceable right to do so, and where they relate to income taxes levied by the same tax authority on the same or different tax entities that intend to settle current tax liabilities and assets on a net basis. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
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39 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Tax consolidation The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect from 1 July 2010 and are therefore taxed as a single entity from that date. The head entity within the tax-consolidated group is Matrix Composites & Engineering Ltd. Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in the separate financial statements of the members of the tax-consolidated group using the ‘separate taxpayer within group’ approach by reference to the carrying amounts in the separate financial statements of each entity and the tax values applying under tax consolidation. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group). Due to the existence of a tax funding arrangement between the entities in the tax-consolidated group, amounts are recognised as payable to or receivable by the Company and each member of the Group in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the tax-consolidated group in accordance with the arrangement. Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax sharing agreement with the head entity. Under the terms of the tax funding arrangement, Matrix Composites & Engineering Ltd and each of the entities in the tax-consolidated group has agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax asset of the entity. Current and non-current classification Assets and liabilities are presented in the consolidated statement of financial position based on current and non-current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; and the Group does not have the right to defer settlement for at least 12 months after the reporting date. All other liabilities are classified as non-current. Deferred tax assets and liabilities are always classified as non-current.
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MATRIX ANNUAL REPORT 2025 40 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less. For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise the above. Trade and other receivables Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days. The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. Other receivables are recognised at amortised cost, less any allowance for expected credit losses. Inventories Inventories include raw materials, work in progress and finished goods, and are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average principle, and included expenditures incurred in acquiring the inventories. The cost of manufactured products includes direct materials, direct labour and an appropriate share of manufacturing overheads. Costs are assigned using a standard costing methodology. Property, plant and equipment Each class of property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses. Recognition and measurement Property, plant and equipment is measured at cost basis less accumulated depreciation and impairment losses. The cost of self-constructed assets includes the cost of materials, direct labour, borrowing costs (where such assets are qualifying assets) and an appropriate proportion of fixed and variable overheads. Subsequent expenditure Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the consolidated statement of profit or loss and other comprehensive income during the financial period in which they are incurred.
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41 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Depreciation The depreciable amount of property, plant and equipment is depreciated on a straight-line basis over their useful lives to the entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of depreciable asset are shown below: Fixed asset class Depreciation rate (%) Building/Leasehold improvements 2.5 Plant and equipment 1.0 – 10.0 Motor vehicles 22.5 Office equipment 11.25 – 25.0 Computer equipment 37.50 – 50.0 The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the consolidated statement of profit or loss and other comprehensive income. Leases The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Group as a lessee The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.
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MATRIX ANNUAL REPORT 2025 42 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows: Land and buildings 20 years Plant and equipment 6 years If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policies in section 'Impairment of non-financial assets'. Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are determinable. After the commencement date, the amount of lease liabilities is increased to reflect incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term. This expense is presented within “administration expenses” in the consolidated statement of profit or loss and other comprehensive income.
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43 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Intangible assets Recognition and measurement Research and development Expenditure on research activities is recognised in profit or loss as incurred. Development expenditure is capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to and has sufficient resources to complete development and to use or sell the assets, Otherwise, it is recognised in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses. Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific assets to which it related. All other expenditure is recognised in profit or loss as incurred. Amortisation Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognised in profit or loss. The estimated useful lives of development costs and software for current and comparatives periods are 3 to 5 years. Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. Financial instruments Recognition and initial measurement Trade receivables are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.
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MATRIX ANNUAL REPORT 2025 44 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Classification and subsequent measurement Financial assets On initial recognition, a financial asset is classified as measured at: amortised cost; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL: it is held within a business model whose objective is to hold assets to collect contractual cash flows; and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. All financial assets not classified as measured at amortised cost as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. Financial assets – Assessment whether contractual cash flows are solely payments of principal and interest For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk and administrative costs), as well as a profit margin. Financial assets – Subsequent measurement and gains and losses Financial assets at amortised cost These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in the consolidated statement of profit or loss and other comprehensive income. Any gain or loss on derecognition is recognised in the consolidated statement of profit or loss and other comprehensive income. Financial liabilities - Classification, subsequent measurement and gains and losses Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
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45 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Derivative financial instruments – Classification, subsequent measurement and gains and losses Derivatives are recognised initially at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss. Embedded derivatives An embedded derivative is a component of a hybrid contract that also includes a non-derivative host – with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. Derivatives embedded in hybrid contracts with a financial asset host within the scope of IFRS 9 are not separated. The entire hybrid contract is classified and subsequently measured as either amortised cost or fair value as appropriate. Derivatives embedded in hybrid contracts with hosts that are not financial assets within the scope of IFRS 9 (e.g., financial liabilities) are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at fair value through profit or loss (FVTPL). An embedded derivative is presented as a non-current asset or non-current liability if the remaining maturity of the hybrid instrument to which the embedded derivative relates is more than 12 months and is not expected to be realised or settled within 12 months. Derecognition Financial assets The Group derecognises a financial asset when: the contractual rights to the cash flows from the financial asset expire; or it transfers the rights to receive the contractual cash flows in a transaction in which either: (i) substantially all of the risks and rewards of ownership of the financial asset are transferred; or (ii) the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. The Group enters into transactions whereby it transfers assets recognised in its statement of financial position but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised. Financial liabilities The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
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MATRIX ANNUAL REPORT 2025 46 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Offsetting Financial assets and financial liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously. Impairment of non-financial assets At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest Group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a post tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the consolidated statement of profit or loss and other comprehensive income. The Group assesses impairment of all non-financial assets at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. These include product and service delivery performance, technology, economic and political environments and future product expectations. If an impairment trigger exists, the recoverable amount of the asset is determined.
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47 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Trade and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid. Due to their short-term nature, they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. Provisions A provision has been recognised for the present value of anticipated costs for future restoration of leased premises. The provision includes future cost estimates associated with the end of the lease term. The calculation of this provision requires assumptions such as application of end dates and cost estimates. The provision is periodically reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs are recognised in the consolidated statement of financial position by adjusting the asset and the provision. Reductions in the provision that exceed the carrying amount of the asset will be recognised in profit or loss. Employee benefits Short-term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. Share-based payments Equity-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined using either the Black-Scholes or Monte Carlo option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the Group receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.
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MATRIX ANNUAL REPORT 2025 48 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied. If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification. If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification. Other long-term employee benefits The Group's net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognised in profit or loss in the period in which they arise. Termination benefits Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted. Defined contribution plans Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Earnings per share Basic earnings per share Basic earnings per share is calculated as net profit or loss attributable to members of the Group divided by the weighted average number of ordinary shares outstanding during the period.
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49 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of material accounting policies (continued) Diluted earnings per share Diluted earnings per share is determined by adjusting the profit or loss attributable to members of the Group and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. Goods and Services Tax ('GST') and other similar taxes Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. Rounding of amounts The Company is of an entity to which Australian Securities and Investments Commission (ASIC) Corporations (Rounding in Financial/Directors’ Reports) Instruments 2016/191, dated 24 March 2016 applies. Amounts in the Directors’ Report and the Financial Statements have been rounded to the nearest thousand dollars in accordance with ASIC Instrument 2016/191, unless otherwise indicated. Note 3. Critical accounting judgements, estimates and assumptions The preparation of the consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the consolidated financial statements. The following critical accounting policies were identified as requiring significant judgements, estimates and assumptions. Impairment of non-financial assets (refer to note 13, 14 and 15) The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. A specific key estimate and assumption that has a significant risk of causing a material adjustment to those carrying amounts within the next annual reporting period is the impairment of property, plant and equipment. In accordance with Group policy, management have completed an impairment indicator and reversal assessment at 30 June 2025 (June 2024 and December 2022: impairment indicator and reversal assessment) for all material cash generating units to ensure that the carrying values can be supported.
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MATRIX ANNUAL REPORT 2025 50 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 3. Critical accounting judgements, estimates and assumptions (continued) Provision for asset retirement obligation A provision has been made for the present value of anticipated costs for future restoration of leased premise. The provision includes future cost estimates associated with closure of the premise. The calculation of this provision requires assumptions such as application of closure dates and cost estimates. The provision recognised for the site is periodically reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs for site are recognised in the consolidated statement of financial position by adjusting the asset and the provision. Reductions in the provision that exceed the carrying amount of the asset will be recognised in profit or loss. Revenue recognition At the end of the reporting period the Group is required to estimate costs to complete on fixed price contracts recognised over time based on the work to be performed after the reporting date. This involves an objective evaluation of project progress, evaluation of the work to be performed and the associated costs to fully deliver the contract to the customer. Refer to Note 5 for further disclosure of performance obligations and revenue recognition policies.
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51 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 4. Operating segments In conjunction with AASB 8 Operating Segments, the Group has identified its operating segment based on internal reports that are reviewed and used by the Chief Operating Decision Maker (CODM) in assessing performance and in determining the allocation of resources. Performance monitoring and evaluation The CODM is identified as the Chief Executive Officer (CEO) who monitors the operating results of the consolidated group and organises its business activities and product lines to serve the global oil and gas industry. The performance of the consolidated group is evaluated based on on-IFRS Earnings before Interest, Taxes, Depreciation and Amortisation (“EBITDA”) and Earnings before Interest, Taxes, Depreciation, Amortisation, and Foreign Exchange (“EBITDAF”) which are measured in accordance with the Group’s accounting policies. The following is an analysis of the Group’s revenue and results from continuing operations by reportable segment. MCE Group 2025 $’000 MCE Group 2024 $’000 Revenue 74,770 85,038 EBITDAF (i) 4,968 10,994 Change in fair value of embedded derivatives (ii) 2,515 577 Foreign exchange gain/(loss) 346 (689) EBITDA 7,829 10,882 Depreciation and amortisation (5,900) (4,376) EBIT 1,929 6,506 Net finance costs (3,686) (2,860) (Loss)/Profit before tax (1,757) 3,646 (i) EBITDAF is reconciled to profit as above. (ii) Relates to the change in fair value of the convertible note embedded derivative. Refer to Note 20.
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MATRIX ANNUAL REPORT 2025 52 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 4. Operating segments (continued) MCE Group 2025 $’000 MCE Group 2024 $’000 Total consolidated assets 80,777 95,151 Total consolidated liabilities 51,453 64,136 Geographical Assets Australia 80,259 94,823 Others 518 328 80,777 95,151 Geographical Liabilities Australia 51,453 64,135 Others - 1 51,453 64,136 Major customers Matrix supplies goods and services to a broad range of customers in the global oil & gas industry. During the reporting periods, a major customer (2024: two major customers), accounted for 70 per cent (2024: 66 per cent) of the total group revenue.
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53 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 5. Revenue Consolidated 2025 $’000 2024 $’000 Revenue from contracts with customers 74,770 85,038 Disaggregation of revenue The disaggregation of revenue from contracts with customers is as follows: Major product lines Design, manufacture and supply of engineered composite products 66,849 75,766 Coatings products, equipment and service 4,635 6,377 Others 3,286 2,895 74,770 85,038 Geographical regions Australia 8,955 15,730 Brazil 58,363 46,359 United States of America 2,124 5,628 United Kingdom 4,130 - Japan 69 12,638 Others 1,129 4,683 74,770 85,038 Timing or revenue recognition Goods and services transferred at a point in time 10,795 11,866 Goods and services transferred over time 63,975 73,172 74,770 85,038
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MATRIX ANNUAL REPORT 2025 54 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 5. Revenue (continued) Performance obligations and revenue recognition policies The following table provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies. Design, manufacture and supply of engineered composite products Coatings products, equipment and service Others Nature of goods or services The construction contract business generates revenue from design, manufacture, and supply of engineered composites products. The Coating business generates revenue from supply of Epoxy based coating systems and associated equipment Consultancy for and manufacture of advanced composite materials, products and solutions for the defence, energy, and resource sectors. What revenue is recognised? Revenue is generally recognised over time based on the cost-to- cost method. Progress is determined based on the cost- to-cost method and the cost measure reflects the transformation of the work in progress. Revenue from supply of ready-made composite products is recognised when goods are delivered to the customer and all criteria for acceptance have been satisfied. Revenue is recognised when goods are delivered/services are provided to the customer and all criteria for acceptance have been satisfied. Revenue is recognised when goods are delivered/services are provided to the customer and all criteria for acceptance have been satisfied Obligations for returns and refunds, if any Bespoke products with no obligations for return or refunds. No contractual requirement to accept returns. May be considered on a commercial basis. No contractual requirement to accept returns. May be considered on a commercial basis. Obligation for warranties 12-24 months Nil 12 months
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55 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 5. Revenue (continued) Contract balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers. Consolidated 2025 $’000 2024 $’000 Trade receivables 6,301 19,283 Progress claims and deposits – contract liabilities (279) (10,317) Contract assets 10,012 4,690 The contract assets comprise the Group's rights to consideration for work completed but not billed at reporting date) on contracts with customers. The contract assets are transferred to trade receivables when the rights become unconditional. This usually occurs when the Group invoices the customer. Contract assets increased by $5.3 million mainly due to the net effect of revenue recognised but not billed on new contracts during the year of $8.7 million and reclassification of contract assets outstanding in the prior year billed during the year of $3.4 million. The contract liabilities primarily relate to advance consideration received from contracts with customers. Contract liabilities decreased by $10 million mainly due to recognition of revenue on contracts previously billed in the prior year. Significant changes in the contract assets and the contract liabilities balances during the period are as follows: Contract assets Contract liabilities 2025 $’000 2024 $’000 2025 $’000 2024 $’000 Revenue recognised that was included in the contract liabilities balance at the beginning of the year - - 10,309 8,524 Increase due to cash received, excluding amounts recognised as revenue during the year - - 292 10,311 Contract assets reclassified to trade receivables 3,353 8,940 - -
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MATRIX ANNUAL REPORT 2025 56 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 6. Income Consolidated 2025 $’000 2024 $’000 Finance income Interest received 745 888 Change in fair value of embedded derivative 2,515 577 Change in discount on asset retirement obligation - 91 3,260 1,556 Other income Net gain on disposal of property, plant and equipment - 2 Sundry income 26 11 Net foreign exchange gain 346 - 372 13 Note 7. Expenses Consolidated 2025 $’000 2024 $’000 Loss before income tax includes the following specific expenses: Depreciation Depreciation and amortisation 5,900 4,376 Finance costs Interest and finance charges paid on lease liabilities 2,270 2,236 Convertible note interest 1,604 1,431 Change in discount on asset retirement obligation 156 - Other finance costs 368 140 4,398 3,807 Employee benefits expense Employee benefits expense 21,788 20,862 Other expenses Net foreign exchange losses - 689 Accretion on asset retirement obligation 33 32 33 721
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57 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 8. Income tax Consolidated 2025 $’000 2024 $’000 Income tax expense Current tax 461 - Deferred tax - - Aggregate income tax expense 461 - Numerical reconciliation of income tax expense and tax at the statutory rate (Loss)/profit before income tax expense (1,757) 3,646 Tax (benefit)/expense at the statutory tax rate of 30% (2024: 30%) (527) 1,094 Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Effect of expenses that are not deductible in determining tax payable profit 658 161 Effect of change in income tax rates from 25% to 30% and other adjustments - (6,407) Utilisation of tax losses not previously recognised - - Effect of unused tax losses not recognised 871 5,448 Other tax adjustments (541) (296) Income tax expense 461 - The tax rate used for 2025 was 30% (2024: 30%) payable by Australian corporate entities on taxable profits under Australian tax law. The Directors have made a decision not to recognise deferred tax assets for tax losses in the financial statements for this reporting period (2024: $nil) given uncertainty over recovery.
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MATRIX ANNUAL REPORT 2025 58 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 8. Income tax (continued) Deferred tax assets and liabilities Consolidated 2025 $’000 2024 $’000 Deferred tax assets Assessed losses 26,552 25,408 Capital losses 2,226 2,250 Research and development claims 4,055 4,055 Provisions (i) 11,366 11,291 Other creditors & accruals 112 187 Intangible assets 1,275 1,208 Lease liabilities 8,953 9,143 Capital raising costs 153 243 Cash assets 17 - Derivatives 34 244 Other 675 845 55,418 54,874 Deferred tax liabilities Property, plant & equipment (3,076) (3,033) Right-of-use assets (9,913) (10,286) Cash assets - (4) Inventories (20) (12) (13,009) (13,335) Deferred tax balances Deferred tax assets 55,418 54,874 Deferred tax liabilities (13,009) (13,335) Not recognised as deferred tax assets (42,409) (41,539) - - (i) The provisions balance includes the provisions for impairment on property, plant and equipment, intangibles and right-of-use assets.
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59 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 8. Income tax (continued) 2025 Opening Recognised in profit or loss Recognised directly in equity Closing $’000 $’000 $’000 $’000 Temporary differences Provisions 11,291 75 - 11,366 Other creditors & accruals 187 (75) - 112 Intangible assets 1,208 67 - 1,275 Cash and cash equivalents (4) 21 17 Property, plant and equipment (3,033) (43) - (3,076) Inventories (12) (8) - (20) Derivatives 244 (210) - 34 Capital raising costs 243 (90) - 153 Right-of-use assets (10,286) 373 - (9,913) Lease liabilities 9,143 (190) - 8,953 Other 845 (170) - 675 9,826 (250) - 9,576 Unused tax losses and credits Tax losses and R&D credits 31,713 1,120 - 32,833 Not recognised as deferred tax assets (41,539) (870) - (42,409) (9,826) 250 - (9,576) 2024 Opening Recognised in profit or loss Recognised directly in equity Closing $’000 $’000 $’000 $’000 Temporary differences Provisions 9,924 1,367 - 11,291 Other creditors & accruals 37 150 - 187 Intangible assets 416 792 - 1,208 Cash and cash equivalents (17) 13 (4) Property, plant and equipment (2,549) (484) - (3,033) Inventories 67 (79) - (12) Prepayments (8) 8 - - Derivatives 330 (86) - 244 Capital raising costs 277 (34) - 243 Right-of-use assets (7,730) (2,556) - (10,286) Lease liabilities 6,659 2,484 - 9,143 Financial liability 200 (200) - - Other 611 234 - 845 8,217 1,609 - 9,826 Unused tax losses and credits Tax losses and R&D credits 27,874 3,839 - 31,713 Not recognised as deferred tax assets (36,091) (5,448) - (41,539) (8,217) (1,609) - (9,826)
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MATRIX ANNUAL REPORT 2025 60 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 8. Income tax (continued) Unrecognised deferred tax assets At 100% 2025 $’000 At 100% 2024 $’000 Unrecognised deferred tax assets Transferred tax losses 1,069 1,069 Capital losses 7,421 7,499 Group tax losses 87,437 83,623 Other temporary differences 45,437 46,271 141,364 138,462 Note 9. Cash and Cash Equivalents Consolidated 2025 $’000 2024 $’000 Current assets Cash and bank 10,464 17,500 Short term deposits (i) 7,879 5,820 18,343 23,320 (i) The short-term deposits have a maturity of 3 months and have been classified as cash and cash equivalents at 30 June 2025. As per the Group’s policy, short term deposits amounting to $4.96 million (2024: $5.82 million) is set aside to cover the bank guarantees outstanding at 30 June 2025.
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61 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 10. Trade and other receivables Consolidated 2025 $’000 2024 $’000 Current assets Trade receivables (i) 6,301 19,283 Other receivables (ii) 10,107 4,877 Security Deposits (iii) 1,194 1,706 GST refundable 191 269 17,793 26,135 (i) The Group’s standard terms and conditions require customers to pay trade receivables within 30 days from invoice date. The average collectability timeframe is ordinarily between 30 to 60 days. These amounts are generally non-interest bearing, although, there are customers who will be subjected to interest charges at management’s discretion. The Group has assessed the recoverability of all amounts, and no allowance is required for the trade receivables. (ii) Included in other receivables are contract assets amounting to $10.012m (June 2024: $4.690m) which relate to completed products which have been recognised as revenue but are yet to be invoiced, pending collection by customers. Refer to note 25 credit risk for further information. (iii) Balance relates to a security deposit paid to Export Finance Australia to fully or partially cash- back bank guarantees. Note 11. Inventories Consolidated 2025 $’000 2024 $’000 Current assets Raw materials 4,508 4,598 Work in progress (i) 1,987 1,850 Finished goods 2,705 2,253 9,200 8,701 The cost of materials and finished goods of $24,634k (2024: $28,950k) were charged to consolidated statement of profit or loss and other comprehensive income and part of cost of sales. (i) The work in progress at cost reflected the resources consumed for uncompleted projects which are to be completed in the subsequent financial year. Write-off Inventories have been reduced by $145k (2024: reduced by $42k) due to movement in the slow- moving stock provision. The adjustment is included in cost of sales. Inventories of $12k previously recorded in the slow-moving stock provision have been written off during the year (2024: $26k). A net additional $157k has been provided for slow moving stock (2024: $68k).
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MATRIX ANNUAL REPORT 2025 62 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 12. Prepayments Consolidated 2025 $’000 2024 $’000 Current assets Prepayments (i) 1,118 1,611 Non-current assets Prepayments (i) - 332 (i) Interest prepayment on convertible note has been classified as $0.33m current (2024: $0.78m) and Nil non-current (2024: $0.33m). Note 13. Property, plant and equipment Consolidated 2025 $’000 2024 $’000 Non-current assets Buildings – at cost (i) 8,409 8,409 Other leasehold improvements – at cost (ii) 281 281 Less: accumulated depreciation and impairment loss (8,690) (8,690) - - Plant and equipment – at cost 110,973 106,662 Less: accumulated depreciation and impairment loss (96,483) (92,131) 14,490 14,531 Motor vehicles – at cost 40 40 Less: accumulated depreciation and impairment loss (17) (13) 23 27 Computer equipment – at cost 2,488 2,268 Less: accumulated depreciation and impairment loss (2,238) (2,157) 250 111 Office equipment – at cost 454 448 Less: accumulated depreciation and impairment loss (447) (444) 7 4 Asset under construction – at cost 965 644 15,735 15,317
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63 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 13. Property, plant and equipment (continued) (i) Buildings were sold as part of the sale and lease back transactions in December 2019. However, the Group is deemed to control the offices and factory complex and hence accounted for the value to the extent of control under right-of-use assets. (ii) Leasehold improvements are located at Henderson. Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Building / leasehold improvement Plant and equipment Motor vehicles Computer equipment Office equipment Assets under construction Total Consolidated $’000 $’000 $’000 $’000 $’000 $’000 $’000 Balance at 30 June 2023 - 13,881 44 12 6 142 14,085 Additions (transfers) - 3,711 - 127 - 502 4,340 Disposals - - (16) - - - (16) Depreciation expense - (3,061) (4) (28) (2) - (3,095) Reversal of previously recognised impairment losses on disposed asset - - 3 - - - 3 Balance at 30 June 2024 - 14,531 27 111 4 644 15,317 Additions (transfers) - 4,310 - 220 6 321 4,857 Disposals - - - - - - Depreciation expense - (4,351) (4) (81) (3) - (4,439) Reversal of previously recognised impairment losses on disposed asset - - - - - - - Balance at 30 June 2025 - 14,490 23 250 7 965 15,735
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MATRIX ANNUAL REPORT 2025 64 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 13. Property, plant and equipment (continued) Impairment At 30 June 2025, management have completed an impairment indicator and reversal assessment for all material cash-generating units and have concluded that there are no indicators of impairment nor indicators for the reversal of previously recognised impairment losses. Note 14. Leases Right-of-use assets Consolidated 2025 $’000 2024 $’000 Non-current assets Right-of-use assets – at cost 43,061 43,061 Less: accumulated depreciation and impairment loss (25,560) (24,316) 17,501 18,745 Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Consolidated Right-of-use assets $’000 Balance at 1 July 2023 15,378 Additions 166 Change in rate (i) 4,375 Depreciation expense (1,174) Balance at 30 June 2024 18,745 Change in rate (i) (5) Depreciation expense (1,239) Balance at 30 June 2025 17,501 (i) Primarily relates to a rate adjustment on the property lease. The right-of-use asset is depreciated over 20 years on a straight-line basis. The initial lease term on the Company leased land and building at Henderson is 20 years with an option of a further extension of 15 years. At the reporting date, considering the length of time, Matrix has not yet determined the likelihood of extension. Hence, the optional 15 years have not been considered in calculating the value of the right-of-use asset and lease liability. The Group estimated that the potential future lease payments, should it exercise the extension option, would result in an increase in lease liability of $36.2 million.
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65 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 14. Leases (continued) Lease liabilities Consolidated 2025 $’000 2024 $’000 Current liabilities Lease liabilities 766 630 Non-current liabilities Lease liabilities 29,076 29,847 This lease liability is measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the average incremental borrowing rate of 7.9 per cent. At 30 June 2025, the lease liabilities have decreased to $29.84m (2024: $30.477m). The decrease primarily reflects repayment of the property lease obligations. The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored internally by the Group’s management. A total of $3.8m bank guarantees are in place as a security over the leases. Lease exemptions At 30 June 2025, Matrix is committed to $25k (2024: $57k) in relation to the office equipment leases. Matrix has assessed the value of the underlying assets and considered them as short-term or low value assets, respectively. Therefore, Matrix has applied the lease exemptions and accounted for the lease payments as an operating expense on a straight-line basis over the lease term. The operating expense presented in the consolidated statement of profit or loss and other comprehensive income are as follows: Consolidated 2025 $’000 2024 $’000 Multiple copiers 7 10 Multiple IT equipment 46 46 53 56 Amounts recognised in profit or loss Interest on lease liabilities 2,270 2,236 Expense relating to lease of low-value assets, excluding short-term leases of low-value assets 53 56 2,323 2,292 Amounts recognised in consolidated statement of cash flows Total cash outflow of leases 2,900 2,934
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MATRIX ANNUAL REPORT 2025 66 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 15. Intangibles Consolidated 2025 $’000 2024 $’000 Non-current assets Development – at cost (i) 8,273 7,986 Less: Accumulated amortisation (4,959) (4,737) Less: Impairment (2,259) (2,259) 1,055 990 (i) Development costs incurred to date relate to various ongoing projects that are in the development phase. The Group recognised an impairment loss in FY 2021 reducing the then carrying amount to zero. Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Consolidated Development costs $000 Balance at 1 July 2023 944 Additions 153 Amortisation expense (107) Balance at 30 June 2024 990 Additions 287 Amortisation expense (222) Balance at 30 June 2025 1,055 Note 16. Trade and other payables Consolidated 2025 $’000 2024 $’000 Current liabilities Trade payables 5,267 6,189 Other creditors and accruals 4,007 3,564 GST payable 104 82 9,378 9,835 Trade and other payables are generally paid within 30 to 45 days. No security is provided for these liabilities, and no interest has been paid.
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67 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 17. Employee benefits Consolidated 2025 $’000 2024 $’000 Current liabilities Employee entitlements – annual leave and long service leave 1,909 1,875 Non-current liabilities Employee entitlements – long service leave 86 98 Note 18. Forward contracts Consolidated 2025 $’000 2024 $’000 Current assets Forward contract asset 32 - Current liabilities Forward contract liability - 69 Management has entered into foreign exchange forward contracts to manage the foreign currency risk associated with anticipated sales and purchase transactions. The forward contract asset or liability relates to the fair value of the forward contracts outstanding at reporting date. Future cash commitments amount to $11.49m at the 30 June 2025 spot rate with all forward contracts maturing within the next 12 months. Note 19. Provisions Consolidated 2025 $’000 2024 $’000 Non-current liabilities Asset retirement obligation 2,738 2,549 Asset retirement obligation The provision represents the present value of the estimated costs to make good the premises leased by the Group at the end of the respective lease terms. Movements in provisions Movements in provision during the current and previous financial years, other than employee benefits, are set out below:
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MATRIX ANNUAL REPORT 2025 68 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 19. Provisions (continued) Consolidated 2025 $’000 2024 $’000 Carrying amount at the start of the year 2,549 2,608 Accretion 33 32 Change in discount rate 156 (91) Carrying amount at the start of the year 2,738 2,549 An external specialist was engaged in FY22 to estimate the asset retirement obligation at termination of the lease. There has been no change in the cost estimate of the provision at 30 June 2025. Note 20. Convertible note On 5 December 2022, the Company issued a convertible note (“Note”) to the Collins St Convertible Note Fund (“Fund”), managed by Collins Street Asset Management Pty Ltd, an Australian wholesale investment management company. The Note has a face value of $7.485 million, with a 3-year term to maturity and a 10.5% coupon rate paid monthly in advance. The Note is secured and convertible in full or part at the election of Collins Street at 35 cents per share, subject to a dilutionary adjustment. The Company has the discretion to redeem the Note, no earlier than 6 months after the issue date but prior to maturity, by repaying the outstanding amount at any time in full and an early redemption fee. The convertible note is a hybrid financial liability consisting of a financial liability and a derivative liability component. The initial fair value of the derivative liability was calculated as $1.917 million with the residual value of the convertible note being assigned to the financial liability. The derivative liability represents the value of the dilutionary adjustment and the value of the early redemption option. The derivate liability is accounted for at fair value through profit or loss As a result of the issue of shares in March 2023, the conversion price has been adjusted to 30.63 cents per share in line with the convertible note agreement. The derivative liability has been revalued at 30 June 2025 with the fair value adjustment being recognised in the profit or loss. The Company has calculated the fair value of the derivative using a Black Scholes Model. Key assumptions are set out below. - Maturity of 6 months - Volatility of 66% - Risk free rate of 3.216% - Conversion price of 30.63 cents - Share price at 30 June 2025 of 22 cents The financial liability has been recognised at amortised cost. The interest expense for the period was calculated by applying an effective interest rate of 24.52% per cent to the financial liability component for the period since the note was issued.
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69 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 20. Convertible note (continued) Movements in the derivative liability and financial liability have been included below. The convertible note liability was classified as current liability as at 30 June 2025 as the financial liability is due to be settled within 12 months and the Group has no right to defer settlement for at least 12 months from the reporting date. Note 21. Issued Capital 2025 Shares 2024 Shares 2025 $’000 2024 $’000 Ordinary shares – fully paid 223,811,179 219,550,565 140,365 139,992 Movements in ordinary share capital Date Shares Issue Price $’000 Balance 1 July 2024 219,550,565 139, 992 Issue of shares (i) 1 October 2024 4,260,614 N/A 373 Balance 30 June 2025 223,811,179 140,365 (i) Relates to the vesting of performance rights issued in FY22 for nil consideration. $000 Derivative liability at 1 July 2023 3,238 Change in fair value (577) Derivative liability at 30 June 2024 2,661 Change in fair value (2,515) Derivative liability at 30 June 2025 146 Financial liability at date 1 July 2023 5,611 Interest paid (725) Unwinding of prepaid interest (62) Interest charged (using effective interest rate) 1,431 Financial liability at 30 June 2024 6,255 Unwinding of prepaid interest (784) Interest charged (using effective interest rate) 1,604 Financial liability at 30 June 2025 7,075 Total convertible note liability at 30 June 2025 7,221 Total convertible note liability at 30 June 2024 8,916
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MATRIX ANNUAL REPORT 2025 70 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 21. Issued Capital (continued) Ordinary shares Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore, the Group does not have a limited amount of authorised capital and issued shares do not have a par value. Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. Ordinary shares carry one vote per share. Capital management The directors’ main objective is to ensure that the Group continues as a going concern and generates a return for shareholders better than the industry average benchmark. Management also seeks to maintain a capital structure that ensures the lowest cost of capital available to the Group. The directors are constantly reviewing the capital structure to ensure they can minimise the cost of capital. As the market is constantly changing, the directors may change the amount of dividends to be paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. There is no change in Group's approach to capital management during the year. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. Note 22. Reserves Consolidated 2025 $’000 2024 $’000 Foreign currency translation reserve (1,5 36) (1,429) Share-based payments reserve 1,061 1,031 (475) (398) Foreign currency translation reserve Exchange differences relating to the translation of results and net assets of the Group’s foreign operation from their functional currencies to the Group’s presentation currency (i.e., Australian dollars) are recognised directly in other comprehensive income and accumulated in the foreign currency translation reserve. Share-based payments reserve The above share-based premium reserve relates to equity-based instruments granted by the Group to its employees under its employee equity-based instruments plan. Further information about share-based payments is set out in note 27.
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71 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 22. Reserves (continued) Movements in reserves Movements in each class of reserve during the current and previous financial year are set out below: Foreign currency translation reserve Shared based payment reserve Total Consolidated $’000 $’000 $’000 Balance at 1 July 2023 (1,423) 2,428 1,005 Exchange differences arising on translation of foreign operation (6) - (6) Arising on share-based payments - 610 610 Vesting / lapse of equity-settled share-based payments - (2,007) (2,007) Balance at 30 June 2024 (1,429) 1,031 (398) Exchange differences arising on translation of foreign operation (107) - (107) Arising on share-based payments - 634 634 Vesting / lapse of equity-settled share-based payments - (604) (604) Balance at 30 June 2025 (1,536) 1,061 (475) Note 23. Remuneration of auditors Consolidated 2025 $ 2024 $ KPMG and related network firms Audit of financial reports - Group 196,650 199,988
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MATRIX ANNUAL REPORT 2025 72 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 24. Cash flow information Reconciliation of profit after income tax to net cash (used in)/provided by operating activities Consolidated 2025 $’000 2024 $’000 (Loss)/Profit after income tax for the year (2,218) 3,646 Adjustments for non-cash items: Depreciation of property, plant and equipment 4,439 3,095 Depreciation of right-of-use assets 1,239 1,174 Amortisation of intangibles 222 107 Expense recognised in respect of equity-settled share-based payments 634 610 Effects of translation of foreign operations (107) (6) Effects of exchange rate changes on security deposit (27) (30) Net gain arising on financial liabilities designated as at fair value through profit or loss (2,616) (1,308) Write-off of financial assets - 77 Interest expense on convertible note 1,604 1,431 Net gain on disposal of property, plant and equipment - (2) Change in asset retirement obligation (net) 189 (59) Change in operating assets and liabilities: Decrease/(Increase) in trade and other receivables 7,789 (2,757) Increase in inventories (499) (2,822) Decrease/(Increase) in prepayments 41 (170) (Decrease)/Increase in trade and other payables and progress billings (11,128) 7,574 Increase in employee benefits 22 315 Net cash (used in)/provided by operating activities (416) 10,875
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73 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 24. Cash flow information (continued) Changes in liabilities arising from financing activities Lease liabilities Consolidated $’000 Balance at 1 July 2023 26,634 Additions 4,541 Payment of lease liabilities (698) Balance at 30 June 2024 30,477 Adjustment for rate increases (5) Payment of lease liabilities (630) Balance at 30 June 2025 29,842 Convertible notes Consolidated $’000 Balance at 1 July 2023 8,849 Change in fair value of derivative liability (577) Interest paid (725) Unwinding of prepaid interest (62) Interest charged (using effective interest rate) 1,431 Balance at 30 June 2024 8,916 Change in fair value of derivative liability (2,515) Unwinding of prepaid interest (784) Interest charged (using effective interest rate) 1,604 Balance at 30 June 2025 7,221
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MATRIX ANNUAL REPORT 2025 74 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 25. Financial instruments Financial risk management policies The Group’s financial instruments consist mainly of deposits with banks, trade and other receivables, trade, and other payables. The main purpose of non-derivative financial liabilities is to raise finance for Group operations. Senior executives meet regularly to analyse and monitor the financial risk associated with the financial instruments used by the Group. Financial risk exposures and management The main risks the Group is exposed to through its financial instruments are foreign currency risk, liquidity risk and credit risk. Foreign currency risk The Group undertakes transactions denominated in foreign currencies and is consequently exposed to exchange rate fluctuations arises. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts. The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the reporting date were as follows: Assets Liabilities 2025 $’000 2024 $’000 2025 $’000 2024 $’000 US dollars 20,742 17,547 (3,175) (13,897) Euros 1,954 1,344 (339) (345) Pounds 3,762 18,354 (601) (899) 26,458 37,245 (4,115) (15,141) Foreign currency sensitivity analysis The Group is mainly exposed to fluctuations in the US Dollar and Pounds. The following table details the Group’s sensitivity to a 10 per cent increase and decrease in the Australian dollar against the relevant foreign currency. 10 per cent is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 10 per cent change in foreign currency rates. A positive number below indicates an increase in profit or equity where the Australian dollar strengthens 10 per cent against the relevant currency. For a 10 per cent weakening of the Australian dollar against the relevant currency, there would be a comparable impact on the profit or equity, and the balances would be negative.
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75 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 25. Financial instruments (continued) 2025 Profit after tax Increase/(decrease) $’000 2024 Profit after tax Increase/(decrease) $’000 US dollar +10% (1,597) (332) US dollar -10% 1,757 365 EUR +10% (147) (91) EUR -10% 162 100 GBP +10% (287) (1,587) GBP -10% 316 1,746 Credit risk Credit risk relates to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group. The maximum exposure to credit risk, excluding the value of any collateral or other security, at the reporting date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the consolidated statement of financial position and consolidated notes to the financial statements. At 30 June 2025, there is no outstanding credit facility that has any material amount of collateral provided. The Company issues bank guarantees for projects and as security for its leased property under a facility from the ANZ bank and Export Finance. ANZ retain a right of set off over term deposits held by the company to the value of the outstanding bank guarantees. The value of this right of set off at 30 June 2025 was $2.54m (2024: $5.629m). Security deposits of $1.15m have been paid to Export Finance as cash backing for guarantees provided on projects. Credit risk is managed on a Group basis and reviewed regularly by senior executives. It arises from exposures to customers and deposits with financial institutions. The following criteria are applied by senior executives in the assessment of counterparty risk: Deposits are with Australian based banks; and Significant customers are rated for credit worthiness. Cash and cash equivalents The Group and the Company held cash and cash equivalents of $18,343,000 at 30 June 2025 (2024: $23,320,000). The cash and cash equivalents are held with regulated bank and financial institution counterparties. As per the Group’s policy, short term deposits amounting to $4.96 million (2024: $5.82 million) is set aside to cover the bank guarantees outstanding as at 30 June 2025. Impairment on cash and cash equivalents and term deposits has been measured on the 12-month expected loss basis and reflects the short maturities of the exposures. The Group considers that its cash and cash equivalents and term deposits have low credit risk based on the external credit ratings of the counterparties. The amount of the allowance on cash and cash equivalents and term deposits is negligible.
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MATRIX ANNUAL REPORT 2025 76 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 25. Financial instruments (continued) Trade and other receivables The Group's maximum exposure to credit risk in trade and other receivables at the reporting date was: Consolidated 2025 $’000 2024 $’000 Trade receivables 6,301 19,283 Other receivables 10,107 4,877 Security deposits 1,194 1,706 Trade and other receivables 17,602 25,866 At reporting date, the aging analysis of trade receivables is as follows: Consolidated 2025 $’000 2024 $’000 Current 5,852 18,207 0-30 days 289 809 31-60 days - 205 61-90 days 4 62 Over 90 days 156 - 6,301 19,283 Trade receivables of $449,000 (2024: $1,076,000) were past due at 30 June, of which $351,000 have been collected up to the date of this report (2024: $895,000). There have been no bad debts written off during the year and there were no impairment provisions in respect of trade receivables that were past due as at 30 June 2025. Exposure to credit risk The exposure to credit risk for trade and other receivables and contract assets at the reporting date by geographic region was as follows: Consolidated 2025 $’000 2024 $’000 Australia 2,678 3,382 Brazil 14,578 18,964 United States of America 8 219 United Kingdom 43 - Switzerland - 2,303 Others 295 998 17,602 25,866
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77 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 25. Financial instruments (continued) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group manages liquidity risk by monitoring forecast cash flows, maintaining cash reserves and managing trade and other payables. Financing arrangements Working capital and contingent lines Currency Nominal interest rate Approved facilities Amount utilised Available facilities at 30 June 2025 % $’000 $’000 $’000 ANZ bank/performance guarantee and facilities AUD 0.75% 6,408 6,408 - Export Finance bond facility AUD 0.50% 4,216 4,216 - Remaining contractual maturities The following table details the Group’s expected maturity for its financial liabilities. The table has been drawn up based on the undiscounted contractual maturities of the financial liabilities including interest that will be paid on those liabilities. Weighted average interest rate Less than 1 month 1-3 months 3 months to 1 year 1-5 years Over 5 years Remaining contractual maturities Consolidated - 2025 % $’000 $’000 $’000 $’000 $’000 $’000 Non-derivatives Non-interest bearing Trade and other payables (9,140) (74) (60) - - (9,274) Interest-bearing Lease liabilities 7.85% - - (2,985) (12,595) (34,853) (50,433) Convertible note 24.52% - - (7,485) - - (7,485) Total non- derivatives (9,140) (74) (10,530) (12,595) (34,853) (67,192)
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MATRIX ANNUAL REPORT 2025 78 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 25. Financial instruments (continued) Weighted average interest rate Less than 1 month 1-3 months 3 months to 1 year 1-5 years Over 5 years Remaining contractual maturities Consolidated - 2024 % $’000 $’000 $’000 $’000 $’000 $’000 Non-derivatives Non-interest bearing Trade and other payables (9,475) (4) (274) - - (9,753) Interest-bearing Lease liabilities 7.85% - - (2,899) (12,346) (38,092) (53,337) Convertible note 24.52% - - - (7,485) - (7,485) Total non- derivatives (9,475) (4) (3,173) (19,831) (38,092) (70,575) The amounts included above for variable interest rate instruments is subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period. Fair value of financial instruments The following table shows the carrying amounts and fair values of financial assets and financial liabilities. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included in Level 1 that are observable for the financial asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). Level 3: inputs for the asset or liability that are not based on observable market data. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
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79 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 25. Financial instruments (continued) 30 June 2025 Fair value Note FVTPL Financial assets at amortised cost Financial liabilities at amortised cost Total Level 1 Level 2 Level 3 Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Financial assets not measured at fair value Cash and other equivalents 9 - 18,343 - 18,343 - - - - Trade and other receivables 10 - 17,602 - 17,602 - - - - Forward contract asset 18 32 - - 32 - 32 - 32 32 35,945 35,977 - 32 - 32 Financial liabilities measured at fair value Convertible note- embedded derivative 20 (146) - - (146) - (146) - (146) (146) - - (146) - (146) - (146) Financial liabilities not measured at fair value Trade and other payables 16 - - (9,274) (9,274) - - - - Lease liabilities 14 - - ( 29,842) (29,842) - - - - Convertible note- liability component 20 - - (7,075) (7,075) - - - - - - (46,191) (46,191) - - - -
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MATRIX ANNUAL REPORT 2025 80 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 25. Financial instruments (continued) 30 June 2024 Fair value Note FVTPL Financial assets at amortised cost Financial liabilities at amortised cost Total Level 1 Level 2 Level 3 Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Financial assets not measured at fair value Cash and other equivalents 9 - 23,320 - 23,320 - - - - Trade and other receivables 10 - 25,866 - 25,866 - - - - - 49,186 49,186 - - - - Financial liabilities measured at fair value Convertible note- embedded derivative 20 (2,661) - - (2,661) - (2,661) - (2,661) Forward contract liability 18 (69) - - (69) - (69) - (69) (2,730) - - (2,730) - (2,730) - (2,730) Financial liabilities not measured at fair value Trade and other payables 16 - - (9,753) (9,753) - - - - Lease liabilities 14 - - ( 30,477) (30,477) - - - - Convertible note- liability component 20 - - (6,255) (6,255) - - - - - - (46,485) (46,485) - - - -
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81 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 25. Financial instruments (continued) Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis Some of the Group’s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used). Financial liabilities Valuation technique and key inputs Significant unobservable inputs Relationship and sensitivity of unobservable inputs to fair value Convertible note – embedded derivative Black-Scholes model. The following variables were taken into consideration: current underlying share price, options strike price, time until expiration, implied share price volatility and risk -free rate. N/A N/A Forward exchange contracts Discounted cash flow. Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties. N/A N/A Note 26. Dividends Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Franking credits Consolidated 2025 $’000 2024 $’000 Franking credits available for subsequent financial years 13,221 13,221
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MATRIX ANNUAL REPORT 2025 82 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 26. Dividends (continued) The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for: franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date; franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date. Note 27. Share-based payments Share options There have been no share options exercised during the year (2024: nil). Long term incentive plans Matrix has established long term incentive plans designed to provide the opportunity to employees to acquire Matrix shares and thus assist with: attracting, motivating and retaining employees; delivering rewards to employees for individuals and Group performance; giving employees the opportunity to become shareholders; and aligning the interests of employees and shareholders. The Board is able to grant long term incentive awards to eligible participants, including senior executives. In general, those executives and employees who have capacity to impact the long term performance of the Group will be granted performance rights under the Matrix Rights Plan. All incentives granted to eligible participants under the Matrix long term incentive plan will only vest on the satisfaction of appropriate vesting conditions. The vesting conditions will be measured and tested over a period of three years. There are four types of grants under the Rights plans offered to professional staff, senior management and senior executives of Matrix. The plans are summarised below: Employee Performance Rights Plan (EMPRP) EMPRP will be open to certain professional staff with two or more years’ service with Matrix. Eligible participants will be offered a grant of Performance Rights in dollar value terms up to but not exceeding $1,500. Performance Rights granted under the EMPRP will be subject to a vesting condition of a three-year service period from beginning of financial year. Upon vesting, the
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83 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 27. Share-based payments (continued) Performance Rights will convert to Matrix fully paid ordinary shares on a one for one basis or the cash equivalent, at the discretion of the Board. Any shares transferred to EMPRP participants on conversion of Performance Rights may be acquired either on-market, or by way of a new issue of shares. Management Performance Rights Plan (MPRP) MPRP will be open to certain professional staff with two or more years’ service with Matrix. Eligible participants will be offered a grant of Performance Rights in dollar value terms up to but not exceeding $3,000. Performance Rights granted under the MPRP will be subject to a vesting condition of a three-year service period from beginning of financial year. Upon vesting, the Performance Rights will convert to Matrix fully paid ordinary shares on a one for one basis or the cash equivalent, at the discretion of the Board. Any shares transferred to MPRP participants on conversion of Performance Rights may be acquired either on-market, or by way of a new issue of shares. Executive Performance Rights Plan (EPRP) EPRP will be open to executives who are not participants in the Senior Executive Plan with two or more years’ services with Matrix. Eligible participants will be offered a grant of Performance Rights in dollar value terms up to but not exceeding $10,000. Performance Rights granted under the EPRP will generally be subject to the following vesting conditions: three-year service period; and the 14-day VWAP of MCE shares at the end of a 3-year period exceeding a board set hurdle share price. Upon vesting, the Performance Rights will convert to Matrix fully paid ordinary shares on a one for one basis or the cash equivalent, at the discretion of the Board. Any shares transferred to MPRP participants on conversion of Performance Rights may be acquired either on-market, or by way of a new issue of shares. Senior Executive Plan – Senior Executive Performance Rights Plan (SEPRP) and Senior Executive Share Option Plan (SESOP) Under the SEPRP and SESOP senior executives will be offered an annual dollar value grant in accordance with the terms of their respective Executive Service Agreements. Grants under the SEPRP and SESOP are made on an annual basis. SEPRP Rights granted under the SEPRP will be subject to the following conditions: three-year service period; and the 14-day VWAP of MCE shares at the end of a 3-year period exceeding a board set hurdle share price.
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MATRIX ANNUAL REPORT 2025 84 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 27. Share-based payments (continued) Upon vesting, the Performance Rights will convert to Matrix fully paid ordinary shares on a one for one basis or the cash equivalent, at the discretion of the Board. Any shares transferred to SEPRP participants on conversion of Performance Rights may be acquired either on-market, or by way of a new issue of shares. Holders of rights under the SEPRP will be not entitled to vote at shareholder meetings or participate in dividends or any other shareholder distributions. The rights are non-transferable however once the vesting condition is met, should shares be issued, there are no additional trading restrictions in relation to the shares. Should the rights have been converted into shares these shareholders will be entitled to vote at shareholder meetings and participate in dividends and other shareholder distributions. The rights are not taxable in the hands of the employees until the vesting conditions are met. At this point the value is crystallised and subject to income tax in the employees’ hands. The value of the rights is only tax deductible to Matrix at the point of vesting even though it is an expense for accounting (amortised over the three-year vesting period) at the point of granting. SESOP Under the SESOP, Share Options (SOs) will be issued to participants. The SOs will be an option to acquire a share in Matrix at a pre-determined exercise price. The Option only vests if the share price of Matrix is above the exercise price at the end of the 3-year period. SOs granted under the SESOP will be subject to the following vesting conditions: three-year service period; and the 14-day VWAP of MCE shares at the end of a 3-year period exceeding a board set hurdle share price. Upon vesting of any of the SO’s, participants will be able to subscribe for shares in the company at the exercise price up to the amount of options they have.
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85 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 27. Share-based payments (continued) Share rights and options in existence in the year The following share-based payment arrangements were in existence during the current and prior reporting periods: Series Grant Date Share price at issue Right/ option price at grant date Exercise price Expiry date Vesting date FY20 EPRP 29/01/2021 $0.15 $0. 10 $0.32 29/01/2024 31/08/2023 FY20 SESOP 29/01/2021 $0.15 $0. 03 $0.32 29/01/2024 31/08/2023 FY21 SEPRP - Aaron Begley 15/12/2021 $0.16 $0.08 $0. 32 08/03/2025 31/08/2024 FY21 SESOP - Aaron Begley 15/12/2021 $0.16 $0.04 $0. 32 08/03/2025 31/08/2024 FY20 EPRP Top Up 08/03/2022 $0.18 $0.10 $0.32 08/03/2024 31/08/2023 FY21 EPRP 08/03/2022 $0.18 $0.09 $0.32 08/03/2025 31/08/2024 FY21 SESOP 08/03/2022 $0.18 $0. 05 $0.32 08/03/2025 31/08/2024 FY22 SEPRP - Aaron Begley 17/11/2022 $0.22 $0.14 $0. 38 15/12/2025 31/08/2025 FY22 SESOP – Aaron Begley 17/11/2022 $0.22 $0.07 $0. 38 15/12/2025 31/08/2025 FY22 EPRP – Executives 15/12/2022 $0.22 $0.14 $0. 38 15/12/2025 31/08/2025 FY22 SESOP – Executives 15/12/2022 $0.22 $0.07 $0. 38 15/12/2025 31/08/2025 FY22 EPRP 31/03/2023 $0.31 $0. 19 $0.38 31/03/2026 31/08/2025 FY23 SEPRP – Aaron Begley 23/11/2023 $0.26 $0.16 $0.35 22/12/2026 31/08/2026 FY23 SESOP – Aaron Begley 23/11/2023 $0.26 $0.12 $0.35 22/12/2028 31/08/2026 FY23 EPRP – Executives 22/12/2023 $0.33 $0.22 $0.35 22/12/2026 31/08/2026 FY23 SESOP – Executives 22/12/2023 $0.33 $0.16 $0.35 22/12/2028 31/08/2026 FY23 EPRP 10/04/2024 $0.35 $0.24 $0.35 10/04/2027 31/08/2026 FY23 SESOP 10/04/2024 $0.35 $0.19 $0.35 10/04/2029 31/08/2026 (i) In addition to the share options and performance rights above, at the Annual General Meeting of Shareholders held in November 2024, the grant of a total of 1,391,071 Executive Share Options and 931,793 Executive Performance Rights to Mr Aaron Begley and Mr Brendan Cocks pursuant to the Employee Awards Plan was approved by shareholders. Based on the Notice of Meeting those Options and Rights were required to be issued 90 days after the AGM and were not issued during this period. The Company intends to seek shareholder re- approval at the November 2025 Annual General Meeting to issue those Options and Rights to Mr Begley and Mr Cocks, together with any further Rights and Options awarded for the following year. The Group has recognised the share-based payment expense on these share options and performance rights amounting based on valuation as at 30 June 2025.
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MATRIX ANNUAL REPORT 2025 86 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 27. Share-based payments (continued) There has been no alteration of the terms and conditions of the above share-based payment arrangements since the grant date. Fair value of share rights granted in the year The Performance Rights, Share Appreciation Rights and Share Options contemplated by the Rights Plan have been subject to valuation reports by Stantons International Securities dated 11 September 2019, 25 September 2020, 22 June 2022, 17 October 2022, 13 April 2023, 1 February 2024, 6 May 2024 and 30 September 2024, respectively. The valuations were adopted by the Directors of the Group. The valuation used a Monte-Carlo simulation as the appropriate methodology to value the rights and options granted under the SEPRP and SESOP. A Monte-Carlo simulation is a highly flexible valuation technique which can cope with a variety of award structures and is often used where instruments have more than one hurdle. The key assumptions adopted when valuing the rights and options is set out below: Series Expected life Volatility Risk free interest rate Dividend yield FY20 EPRP 2.6 years 66.00% 0.18% nil FY20 SESOP 2.6 years 66.00% 0.18% nil FY21 EPRP - Aaron Begley 3.3 years 70.00% 0.94% nil FY21 SESOP - Aaron Begley 3.3 years 70.00% 0.94% nil FY20 EPRP Top Up 2 years 66.00% 0.18% nil FY21 EPRP 3 years 70.00% 1.54% nil FY21 SESOP 3 years 70.00% 1.54% nil FY22 EPRP – Aaron Begley 3 years 75.00% 3.42% nil FY22 SESOP – Aaron Begley 3 years 75.00% 3.42% nil FY22 EPRP – Executives 3 years 75.00% 3.42% nil FY22 SESOP – Executives 3 years 75.00% 3.42% nil FY22 EPRP 3 years 75.00% 2.89% nil FY23 EPRP – Aaron Begley 3 years 66.99% 4.06% nil FY23 SESOP – Aaron Begley 5 years 70.05% 4.10% nil FY23 EPRP – Executives 3 years 66.95% 3.59% nil FY23 SESOP – Executives 5 years 69.87% 3.63% nil FY23 EPRP 3 years 66.05% 3.63% nil FY23 SESOP 5 years 69.82% 3.69% nil (i) In addition to the share options and performance rights above, at the Annual General Meeting of Shareholders held in November 2024, the grant of a total of 1,391,071 Executive Share Options and 931,793 Executive Performance Rights to Mr Aaron Begley and Mr Brendan Cocks pursuant to the Employee Awards Plan was approved by shareholders. Based on the Notice of Meeting those Options and Rights were required to be issued 90 days after the AGM and were not issued during this period. The Company intends to seek shareholder re-approval at the November 2025 Annual General Meeting to issue those Options and Rights to Mr Begley and Mr Cocks, together with any further Rights and Options awarded for the following year. The Group has recognised the share-based payment expense on these share options and performance rights based on valuation as at 30 June 2025. .
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87 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 27. Share-based payments (continued) Movements in share plans during the year The following table reconciles the share plans outstanding at the beginning and end of the year: Balance at the beginning of the year Granted during the year(i) Forfeited during the year Exercised during the year Lapsed during the year Balance at the end of the year No. No. No. No. No. No. SESOP FY21 SESOP 5,255,682 - - - (5,255,682) - FY22 SESOP 2,535,614 - - - - 2,535,614 FY23 SESOP 2,374,959 - - - - 2,374,959 10,166,255 - - - (5,255,682) 4,910,573 EPRP FY21 EPRP 4,260,614 - - (4,260,614 ) - - FY22 EPRP 2,286,487 - (77,321) - - 2,209,166 FY23 EPRP 2,329,427 - (105,281) - - 2,224,146 8,876,528 - (182,602) (4,260,614) - 4,433,312 (i) In addition to the share options and performance rights above, at the Annual General Meeting of Shareholders held in November 2024, the grant of a total of 1,391,071 Executive Share Options and 931,793 Executive Performance Rights to Mr Aaron Begley and Mr Brendan Cocks pursuant to the Employee Awards Plan was approved by shareholders. Based on the Notice of Meeting those Options and Rights were required to be issued 90 days after the AGM and were not issued during this period. The Company intends to seek shareholder re- approval at the November 2025 Annual General Meeting to issue those Options and Rights to Mr Begley and Mr Cocks, together with any further Rights and Options awarded for the following year. The Group has recognised the share-based payment expense on these share options and performance rights based on valuation as at 30 June 2025. Note 28. Related party transactions Parent entity The ultimate parent entity within the Group is Matrix Composites & Engineering Ltd. Subsidiaries Interests in subsidiaries are set out in note 29.
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MATRIX ANNUAL REPORT 2025 88 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 28. Related party transactions (continued) Key management personnel compensation Consolidated 2025 $ 2024 $ Short term employment benefits 1,346,383 1,375,711 Share based payments 317,179 347,140 Post-employment benefits 66,056 97,080 1,729,618 1,819,931 The Company’s remuneration policy for Matrix executives (including executive directors) is to fairly and responsibly reward them having regard to the performance of the Company, the performance of the executive and prevailing remuneration expectations in the market. The Company also seeks to establish remuneration structures which align the interests of its key management personnel with the interests of the Company and its shareholders. The payment of any incentive amounts to executive Directors and Matrix executives is based on the delivery of key Group and individual outcomes, and the profitability of the Matrix Group. Related party transactions There were no related party transactions during the year. Key management personnel There were no loans to key management personnel during the year or outstanding at the end of the year (2024: nil). Other transactions and balances with key management personnel There were no other transactions with key management personnel at the end of the year (2024: nil). Disclosures relating to key management personnel are set out in the remuneration report included in the directors' report.
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89 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 29. Interests in subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 2: Ownership interest Principal place of business/country of incorporation 2025 % 2024 % Specialist Engineering Services (Aust) Pty Ltd Australia 100% 100% Matrix Henderson Property Pty Ltd Australia 100% 100% Matrix Coating Technologies Pty Ltd Australia 100% 100% Matrix Composites & Engineering (US) Inc. USA 100% 100% Note 30. Parent entity information The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are the same as those applied in the consolidated financial statements. Refer to note 2 for a summary of the material accounting policies relating to the Group. 2025 $’000 2024 $’000 Statement of financial position Assets Current assets 46,161 59,771 Non-current assets 31,196 31,956 Total assets 77,357 91,727 Liabilities Current liabilities 19,552 22,373 Non-current liabilities 31,901 42,041 Total liabilities 51,453 64,414 Equity Issued capital 140,365 139,992 Accumulated loss (115,522) (113,710) Share based payment reserve 1,061 1,031 Total surplus 25,904 27,313 Statement of profit or loss and other comprehensive income (Loss)/Profit for the year (2,043) 3,488 Other comprehensive income - - Total comprehensive income (2,043) 3,488
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MATRIX ANNUAL REPORT 2025 90 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 30. Parent entity information (continued) Guarantees The parent entity had bank guarantees of $4.96m as at 30 June 2025 (2024: $5.63m) with cash- backing to the value of $5.82m (2024: $5.82m). Contingent liabilities The parent entity had no contingent liabilities as at 30 June 2025 and 30 June 2024. Capital commitments - Property, plant and equipment The parent entity had no capital commitments for property, plant and equipment as at 30 June 2025 and 30 June 2024. Material accounting policies The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the following: Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity. Note 31. (Loss)/Earnings per share 2025 $’000 2024 $’000 (Loss)/Profit after income tax (2,218) 3,646 Number Number Weighted average number of ordinary shares used in calculating basic (loss)/earnings per share 222,128,699 219,136,153 Weighted average number of ordinary shares used in calculating diluted (loss)/earnings per share 222,128,699 253,089,276 Cents Cents Basic (loss)/earnings per share (1.00) 1.66 Diluted (loss)/earnings per share (1.00) 1.44 At 30 June 2025, 4,433,312 performance rights, 4,910,573 unlisted options and 24,436,827 convertible options were excluded from the diluted weighted-average number of ordinary shares because their effect would be anti-dilutive. The average market value of the Company’s shares of the purpose of calculating the dilutive effect of share options and performance rights was based on quoted market prices for the year during which the share options and performance rights were outstanding.
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91 LIGHTER· STRONGER· SMARTER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 32. Contingencies In the opinion of the Directors, the Group did not have any contingencies at 30 June 2025 (30 June 2024: None). Note 33. Commitments The Group had no capital commitments as at 30 June 2025 (30 June 2024: nil) other than the forward contracts disclosed in note 18. Note 34. Events after the reporting period No matter or circumstance has arisen since 30 June 2025 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.
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MATRIX ANNUAL REPORT 2025 92 CONSOLIDATED ENTITY DISCLOSURE STATEMENT FOR THE YEAR ENDED 30 JUNE 2025 (i) This entity is part of a tax-consolidated group under Australian taxation law, for which Matrix Composites & Engineering Ltd is the head entity Determination of Tax Residency Section 295 (3A) of the Corporation Acts 2001 requires that the tax residency of each entity which is included in the Consolidated Entity Disclosure Statement (CEDS) be disclosed. For the purposes of this section, an entity is an Australian resident at the end of a financial year if the entity is: a) an Australian resident (within the meaning of the Income Tax Assessment Act 1997) at that time; or b) a partnership, with at least one partner being an Australian resident (within the meaning of the Income Tax Assessment Act 1997) at that time; or c) a resident trust estate (within the meaning of Division 6 of Part 111 of the Income Tax Assessment Act 1936) in relation to the year of income (within the meaning of that Act) that corresponds to the financial year. Body corporates Tax residency Entity name Entity type Place formed or incorporated % of share capital held Australian or foreign Foreign jurisdiction Matrix Composites & Engineering Ltd Body corporate Australia N/A Australian (i) N/A Specialist Engineering Services (Aust) Pty Ltd Body corporate Australia 100% Australian (i) N/A Matrix Henderson Property Pty Ltd Body corporate Australia 100% Australian (i) N/A Matrix Coating Technologies Pty Ltd Body corporate Australia 100% Australian (i) N/A Matrix Composites & Engineering (US) Inc. Body corporate USA 100% Foreign Jurisdiction USA
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93 LIGHTER· STRONGER· SMARTER The determination of tax residency involves judgment as the determination of tax residency is highly fact dependent and there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion on residency. In determining tax residency, the consolidated entity has applied the following interpretations: • Australian tax residency The consolidated entity has applied current legislation and judicial precedent, including having regard to the Commissioner of Taxation’s public guidance in Tax Ruling TR 2018/5. • Foreign tax residency The consolidated entity has applied current legislation and where available judicial precedent in the determination of foreign tax residency. Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in its determination of tax residency to ensure applicable foreign tax legislation has been complied with.
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MATRIX ANNUAL REPORT 2025 94 DIRECTORS’ DECLARATION In the directors' opinion: the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board 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 2025 and of its performance for the financial year ended on that date; the attached consolidated entity disclosure statement is true and correct; and there are reasonable grounds to believe that the Company 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. Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the directors ______________________________________________ Aaron P Begley Managing Director and Chief Executive Officer 26 August 2025
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KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s Report To the shareholders of Matrix Composites & Engineering Ltd Report on the audit of the Financial Report Opinion We have audited the Financial Report of Matrix Composites & Engineering Ltd (the Company). In our opinion, the accompanying Financial Report of the Company gives a true and fair view, including of the Group’s financial position as at 30 June 2025 and of its financial performance for the year then ended, in accordance with the Corporations Act 2001, in compliance with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated statement of financial position as at 30 June 2025; • Consolidated statement of profit or loss and other comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; • Consolidated entity disclosure statement and accompanying basis of preparation as at 30 June 2025; • Notes, including material accounting policies; and • Directors’ Declaration. The Group consists of the Company and the entities it controlled at the year end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with these requirements. Key Audit Matters Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.
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Revenue recognition ($74.8 million) Refer to Note 5 to the Financial Report The key audit matter How the matter was addressed in our audit Revenue recognition was a key audit matter due to the quantum of the balance, and the significant audit effort and judgement we have applied in assessing the Group’s recognition and measurement of revenue. This was the result of the: Different revenue recognition policies for the sale of goods and rendering of services, on either an over time or point in time basis; Significant judgements made by the Group in the recognition and measurement of revenue from ongoing revenue contracts. This required significant audit effort to assess the Group’s assumptions underlying the timing of its recognition of revenue, based on the terms of the relevant agreements and estimated costs to complete; and Assessed risk relating to revenue recognised shortly before and after year- end. In assessing this key audit matter, we involved senior audit team members who understand the Group’s business, industry and the economic environment it operates in. Our procedures included: Understanding the nature of the Group’s revenue streams and the related revenue recording processes and systems; Evaluating the appropriateness of the Group’s accounting policies related to revenue recognition against the requirements of the accounting standard.. This included the allocation of the transaction price to performance obligations; For a sample of revenue transactions recognised on a ‘point in time’ basis throughout the year: – Checking to underlying revenue contracts and delivery documents; and – Assessing the timing of revenue recognition by considering the completion of performance obligations and the Group’s revenue recognition policy; For key contracts where revenue is recognised on an ‘over time’ basis: – Obtaining an understanding of the activities required to complete the customer contract from the underlying sales contract and the customer’s purchase order; – Assessing the completion of the performance obligation, where relevant, to underlying records for project completion; – Comparing the cost to complete to underlying documentation such as quotations, actual costs incurred post year end and approved budgets; – Comparing the actual costs incurred to date to approved budgets and testing the accuracy of costs by checking a sample of expenses to underlying documentation; – Assessing the amount of revenue recorded by the Group based on the cost incurred to date or actual costs on completion and the projected cost to complete, considering modifications to the contract; and – Assessing the Group’s ability to budget by evaluating past performance against past project budgets.
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For a sample of revenue transactions recognised shortly before and after year-end and credit notes issued by the Group shortly after year-end, checking revenue recognised in the period audited by: – Checking to underlying revenue contracts and delivery documents; and – Assessing the basis of the credit notes issued. Evaluating the adequacy of the disclosures made in the Financial Report against the requirements of the accounting standards. Other Information Other Information is financial and non-financial information in Matrix Composites & Engineering Ltd’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s Report. The Chairman’s Report is expected to be made available to us after the date of the Auditor’s Report. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: • Preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; • Implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and • Assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.
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Auditor’s responsibilities for the audit of the Financial Report Our objective is: • To obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and • To issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/media/bwvjcgre/ar1_2024.pdf. This description forms part of our Auditor’s Report. Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of Matrix Composites & Engineering Ltd for the year ended 30 June 2025, complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in pages 13 to 25 of the Directors’ report for the year ended 30 June 2025. Our responsibility is to express an opinion as to whether the Remuneration Report complies in all material respects with Section 300A of the Corporations Act 2001, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Graham Hogg Partner Perth 26 August 2025