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ACN 093 977 3362
Annual Report
Aeris Environmental Ltd
pg 1
Annual Report 2022 pg 2
Aeris Environmental Ltd Contents
Chairman and CEO Report ........................................................................................................... 04
Review of Operations ..................................................................................................................... 06
Directors’ Report .............................................................................................................................. 14
Auditor’s Independence Declaration ....................................................................................... 40
Statement of profit or loss and other comprehensive income ....................................... 44
Statement of financial position .................................................................................................. 46
Statement of changes in equity ................................................................................................. 48
Consolidated statement of cash flows..................................................................................... 50
Notes to the financial statements ............................................................................................. 52
Directors’ Declaration ...................................................................................................................106
Independent Auditor’s Report ..................................................................................................108
Australian Securities Exchange (ASX) Additional Information......................................116
Corporate Directory......................................................................................................................120
pg 3
Annual Report 2022 Chairman and
CEO Report
Dear Shareholders
Since the onset of the pandemic the impact on both business and society has been unprecedented. The
challenge and the opportunity for the Company are adapting to the “new norm” whilst focussing on the
current priorities of its customers and distributors.
Aeris’ Board recognises that the performance of the Company in terms of shareholder value and top-
line sales has been disappointing. The market volatility impacting each sector of the business has been
extraordinary. The Company acknowledges that it must adapt more quickly to these changing conditions
and the related business environment. To this end, today we have a new CEO and a refreshed team, and
have re-examined our corporate strategy, the outcomes of which are now being implemented.
Aeris’ strategic focus is the application of products and services to improve energy efficiency and
environmental hygiene in the built environment. Today’s customers, particularly those in the enterprise
market, are now implementing Environmental, Social and Governance (ESG) practices as fundamental
to their shareholder requirements and indeed their business strategy.
Aeris is positioning itself at the heart of these requirements through its concentration on reducing
energy consumption, achieving a lower carbon footprint, improving indoor air quality and the safety of
hard surfaces. Our scientific background and in-field capabilities enable Aeris to be a committed partner
in assessing product performance, implementing effective strategies, and reporting improvements on
ESG related baselines, which is becoming mandatory in this new era.
A similar opportunity exists in the farm to fork value chain, where the core competencies of energy
efficiency and environmental hygiene offer high value to customers. Operating system efficiencies and
food hygiene for enhanced shelf life and quality are significant R&D drivers to complement our existing
product suite.
pg 4
Aeris Environmental Ltd We have acted on customer and distributor feedback to adapt our
products, packaging, and pricing to improve our competitive positioning
both domestically and internationally. This renewed customer-centric focus
is expected to facilitate stronger and more successful relationships with
our customers and distributors. Key to our plans going forward is the focus
on profitable recurring revenue to create a viable scaling and attractive
business model. Of critical importance is Aeris’ investment in improving
the workflow and profitability of our customers globally, whilst in parallel
achieving their environmental and OH&S goals.
The Company has appointed specialised resources to its key international
markets, and we are already seeing better engagement with our distribution
partners. This has been attained by targeting specific product ranges to
address opportunities with our environmental, hygiene, energy efficiency,
mould and corrosion protection products and pursuing channel partners
who have specific domain knowledge and expertise in their local markets.
The China market continues to offer considerable promise. Aeris’ WFOE
entity in Shanghai is now in place and providing sizable opportunities,
particularly in the government sector, which are only available to companies
with a local presence. First orders have been received and shipped and a
multi-channel approach to the market is being developed with a number
of Chinese companies, each having a strong track record in both market
development and sales.
Aeris today is fully focussed on leveraging its new strategic direction and
commercial-ready product portfolio, whilst investing in relationships with
corporations and individuals who share our belief that innovation remains at
the heart of meeting both the social and business challenges our customers
are facing globally. This includes new and promising relationships with a
range of international OEMs that share our market focus and are delivering
leading technologies in our space.
With Andrew Just having joined Aeris as CEO in late March 2022, we believe
that the Company is now well positioned to meet both the business and
social goals of our customers. The product portfolio is rapidly evolving
and demonstrating significant differentiation in the marketplace. The Aeris
team and Board recognise both the challenges and opportunities before
us, and we are committed to the growth of annuity revenue and increased
shareholder value.
Maurie Stang
Chairman
Andrew Just
CEO
pg 5
Annual Report 2022 Review of
Operations
pg 6
Aeris Environmental Ltd 2022 Annual Report: Review of Operations
As the Company transitions to meet the market demands of the Covid endemic, it is evolving its
traditional core business competencies to directly serve the growing ESG requirements of customers.
The financial year ending 30th June 2022 witnessed depressed demand for pandemic related products
such as hand sanitiser, with Aeris experiencing falling demand for some of its leading products and
bloated inventories. Whilst these products provided a significant revenue stream during pandemic times,
this is clearly a commoditized market segment and not a core focus moving forward. The learnings and
the opportunities derived from the peak of the pandemic are now leveraging what we believe is an
attractive and sustainable business model focused on the ESG value levers of environmental hygiene
and energy efficiency.
The tail end of the financial year was dedicated to clarifying the forward focus of the Company, addressing
resource allocation opportunities, and moving swiftly to enact the ensuing change program. We see real
opportunities in serving the global needs of energy usage reduction and safety of indoor environments,
with the Aeris product platform having substantial and significant advantages in delivering a clear
and cost-effective solution. Updating and improving our business focus to prepare for scaling up and
expanding its product reach was a top priority for the Company over the last quarter of the financial
year.
Our essential value proposition is making built environments safer through measurable improved air
quality, hard surface residual disinfection, and significantly more energy efficient through optimizing
the performance and lifespan of our current assets. This value proposition directly addresses customers’
needs to improve performances on ESG metrics.
pg 7
Annual Report 2022 Finance
Annual revenue for the 2021-22 financial year was $2,678,133 (2021: $7,130,684). The Company made
a loss before income tax of $7,423,212 compared to a loss of $5,985,414 in the prior year. The loss
primarily results from the problems associated with servicing markets during the pandemic and the
commoditization of pandemic related products, such as hand sanitiser and cleaning products. Gross
margins were steady at 45% (improved from 39% in the June 2020-21 year), reflecting the proportional
revenue shift away from lower margin products.
The Company’s cash receipts from customers for the year were $3,240,986 compared to the previous
year of $11,367,172. As 30 June 2022 Aeris has net assets of $6,592,865 compared to $13,471,368 on 30
June 2021. Cash at 30 June 2022 was $5,303,142 compared to $11,485,616 at 30 June 2021. The net cash
used in operating activities increased by $4,827,418. Balance sheet movements included a decrease in
trade debtors of $392,773.
HVAC&R
Aeris is focused on escalating the adoption and distribution of its heating, ventilation, air-conditioning,
and refrigeration (HVAC&R) product range which delivers lower energy consumption, improved air
quality and a lighter carbon footprint. The human and environmental safety profile of this product
range, compared to incumbents, offers an improved corporate responsibility position and cost savings
for customers. This core technology is the foundation for our ability to improve customers’ ESG
performance and represents a key growth driver for Aeris.
During the last quarter of the financial year, Aeris commenced a focused effort on revitalizing its HVAC&R
product range with a view to updating and improving the body of evidence for how these products
affect energy efficiency and air purity. This work has generated interest from key clients who are eager to
participate in case studies, with a view to Aeris generating annuity revenue on an ongoing basis.
pg 8
Aeris Environmental Ltd Environmental Hygiene
Aeris Defence achieved a new level of approval from the Australian Government Therapeutic Goods
Administration (TGA), endorsing the claim of residual kill protection against COVID-19 for 24 hours. This
is our flagship hard surface disinfectant, applicable across the full spectrum of hard surfaces, from high
risk e.g., aged care facilities to social environments. The upgraded TGA approval provides an important
differentiator from competitors’ products and the advanced formulation, driven by market research,
positions the product well for solid sales growth in the coming year. The Aeris Defence value proposition
of “protects between cleans” has resonated with target markets and is supported by Aeris’ range of
disinfectant products, such as our hard surface disinfecting biodegradable paper rolls.
A new product “Mould Pro” was launched late in the financial year, specifically targeting this topical
issue in the domestic market. It is clear that throughout the equatorial regions of the world, mould and
mildew are a pervasive problem. The triple actions of Mould Pro of killing, cleaning, and preventing
regrowth of mould all position it well to build as a strong brand over time. Aeris now has a complete
system of managing mould, suitable for all customers from professional remediators through to spot
cleans and prevention.
Specialty Products and Services
Aeris’ advisory service enjoyed a busy year, with several consulting projects completed for customers
requesting water damage and mould remediation assessments. Our scientists in this team conducted
pivotal training for government staff, leading to accreditation as official consultants for the Queensland
Government. Regular work is now underway for the Queensland Health Department. This technical
support is a key plank for the overall Aeris value proposition, with our program results in energy efficiency
and clean air quality being backed by robust data and industry leading methods.
Our Corrosion Protection product range saw early but strong interest from several new Original
Equipment Manufacturers (OEMs), with trials currently underway at two USA-based air conditioning
coil manufacturers. Although a long sales cycle, these OEMs offer a very worthwhile recurring revenue
stream over time. The Company is investing in further research and development on this product range
in order to expand the application use cases and thereby broaden the market.
pg 9
Annual Report 2022 International
Aeris has identified substantial opportunities in several international markets, with attention on the
USA and China. In the USA, the 2021-22 financial year witnessed resource changes in the Company’s
structure, reduced operational costs and putting in place a leaner and more scalable model. After some
turbulent revenue years, we have now secured a key representative, who was instrumental in prior
customer success, to rebuild the traditional customer base and develop new opportunities. As the
global environment continues to favour sovereign self-sufficiency, the US manufacturing partners are a
key factor in the Company’s distribution strategy for the US market. Two contract manufacturing partners
are in place, with multiple products being evaluated for domestic production. Recently our AerisGuard
Surface Treatment achieved an upgraded EPA approval to now endorse a claim of SARS-CoV-2 efficacy.
The Company’s plans to develop a stable path to market in China have progressed, with market
mapping of channels covering wholesaler packaging and distribution, provincial distribution channels,
a third-party ecommerce partnership, and direct registration and marketing activities. China’s central
government has affirmed its zero COVID policy pledge which bodes well for both our HVAC&R and
Environmental Hygiene platform offerings. Weathering the global macroeconomic storm, it remains a
positive outlook for this market based on the central government stance on Covid and the exclusive
claims within the Aeris product range.
The Middle East and Europe continue to hold promise as developing markets for Aeris products, although
disrupted supply chains were a handbrake to developing channel partners during the financial year. As
trading conditions stabilize the core products can be developed with registrations and new distribution
partners.
pg 10
Aeris Environmental Ltd Australia
The financial year saw domestic revenues collapse, largely driven by the large fall in demand for sanitization
products as lockdowns and social controls eased, combined with the dual impacts of oversupply and
decreased demand on pricing levels. Whilst the pandemic offered short term revenue from sales of hand
sanitiser, attention was diverted from investment in building the core business of HVAC&R.
Refreshing the product focus, updating branding to match customer needs, and upgrading key product
formulations were all highly valuable activities in the financial year and worthwhile investments for the
coming year. In addition, we have implemented new distribution policies aimed directly at a better
engagement with our distribution channels both locally and internationally. These new programs
are based on an elevated sense of long-term partnerships and value propositions that will underpin
sustainable relationships.
The Australian market presents both challenges and opportunities evident from the global supply chain
risks, and positive steps were made to ensure domestic production is secured and stable. The volatile and
high freight rates for import and export are driving advantages in local manufacturing, and significant
effort was devoted to improving the demand and supply forecasting efficiency.
Looking forward, the Australian market offers an opportunity to “bolt on” additional products and services
to our target verticals to improve customer engagement, increase profits, and support our target goal
to be the market leader in environmental hygiene and energy efficiency products and services. Market
feedback, particularly from enterprise level customers, has provided a clear and attractive path for our
future investment and development.
pg 11
Annual Report 2022 ESG
Aeris is focused on its ability to deliver ESG benefits to customers, and further develop its capabilities
in this area. Our core product range delivers environmental benefits of reduced carbon footprints
through direct energy usage reductions, cleaner air and surfaces free from harmful pathogens, and more
environmentally friendly products which have safer use profiles than competitive products. The social
benefits of our programs assist to fulfill the duty of care for occupants of built environments and could
potentially contribute to lower absenteeism and rates of illness due to airborne viruses, moulds and
bacteria. The compliance advantages of Aeris’ programs include greater assurance on meeting OH&S
and WH&S requirements, as well as increasingly stringent EPA requirements. Overall, the Aeris value
proposition is one that has a high impact on ESG related metrics and needs, and hence is a sharp focus
for the Company moving forward.
Outlook
The 2021-22 financial year witnessed highly challenging market conditions, with global supply chain
disruptions and pandemic related demand changes negatively affecting the Company. A pivotal change
program is underway to refresh and refocus the strategy on market opportunities that are available,
commercially interesting, and scalable both in domestic and international markets. Resource deployment
and go to market strategies are being aligned with these goals, driven by customer needs. The Company
continues to be net debt free.
Despite experiencing a challenging year, the Company has responded to the changing environment
by defining a clear strategic vision for its products to capitalize on an opportunity for long term growth
and building shareholder value. Whilst market conditions are likely to demonstrate ongoing volatility it
is becoming evident that investments are and will continue to be made in protecting occupants in the
built environment and lowering carbon footprints through energy efficiency and improved processes.
This is Aeris’ market focus and will continue to evolve to meet the needs of our customers in achieving
these important goals.
pg 12
Aeris Environmental Ltd pg 13
Annual Report 2022 Directors’ Report
pg 14
Aeris Environmental Ltd Directors’ Report
The Directors of Aeris Environmental Ltd submit herewith the Annual Report for the financial year ended
30 June 2022. In order to comply with the provisions of the Corporations Act 2001, the Directors’ Report
is as follows:
Directors
The names and details of the Directors and Company Secretary of Aeris Environmental Ltd during the
whole of the financial year and up to the date of this Report, unless otherwise stated:
Maurie Stang
Non-Executive Chairman
Steven Kritzler
Non-Executive Director
Mr Maurie Stang has more than three decades of
experience building and managing companies
in the healthcare and biotechnology industry
in Australia and internationally. His strong
business development and marketing skills have
resulted in the successful commercialisation of
intellectual property across global markets.
Director since: 24 July 2002 - appointed
Chairman in 2002
Mr Kritzler (M.Sc from the UNSW in the field
of Polymer Chemistry) holds a number of
international patents. He is the Technical
Director of Novapharm Research. Mr Kritzler
has over 40 years of experience in commercial
R&D in the areas of pharmaceutical, medical,
cosmetic and specialty industrial products.
Under his technical direction, Novapharm
in
Research has become a world-leader
infection control science.
Directorship of other listed companies held in
the last three years:
Director since: 24 July 2002
Directorship of other listed companies held in
the last three years: None
Non-Executive Chairman of Nanosonics Limited
(ASX:NAN) until 1 July 2022 (Deputy Chairman
since 1 July 2022).
Non-Executive Deputy Chairman of Vectus
Biosystems Limited (ASX:VBS) since December
2005.
pg 15
Annual Report 2022 Jenny Harry
Non-Executive Director
Abbie Widin
Non-Executive Director
Dr Widin (PhD (Physiology) and B. Med. Science
(Hons), both from the University of Sydney, and
a Diploma of Business Administration from
AGSM, and GAICD) was appointed as a Director
in March 2021. She has over 20 years’ experience
in the highly-competitive consumer goods and
consulting markets. Dr Widin has held various
marketing, commercial and management roles
in both private and public companies, such as
Procter & Gamble (Australia and Europe), SC
Johnson, Reckitt Benckiser and Kellogg. She
has strengths in marketing strategy, innovation
pipelines and leading cross-functional teams.
Director since: 2 March 2021
Directorship of other listed companies held in
the last three years: None
Michael Ford
Non-Executive Director
Mr Ford (B.Com, MBA, FCA, FCPA, GAICD) has
over 30 years of experience in Finance and
Strategy roles in a wide range of industries
including manufacturing, property
and
financial services. He is the Chief Financial
Officer of News Corp Australia and a Director of
Foxtel. Mr Ford is a former Group CFO of QBE
Insurance and Deputy CFO of Commonwealth
is an experienced
He
Bank of Australia.
Company Director and has completed the
Advanced Management program at Harvard
Business School.
Director from 23 April 2020 until he resigned on
14 December 2021
Directorships of other listed companies held in
the last three years: None
Dr Harry (PhD GAICD) was appointed as a
Director in April 2021. She is a graduate
the Harvard Business School General
of
Manager Program and the Australian Institute
of Company Directors. Dr Harry has 25 years’
experience
in executive management of
companies in the biotechnology, diagnostic
and biopharmaceutical sectors. She is an
accomplished CEO with experience in growing
companies from start-up to commercialisation,
and has demonstrated expertise in building
high-performing teams, establishing global
partnerships, capital raising, investor relations,
together with corporate governance and
compliance. Dr Harry is an experienced Non-
Executive Director on the Boards of listed and
unlisted companies. She is currently a Non-
Executive Director of Neuren Pharmaceuticals
Limited (ASX:NEU) and a member of the Board’s
IP sub-Committee of the Children’s Medical
Research Institute.
Director since: 21 April 2021
Directorship of other listed companies held
in the last three years: Non-Executive Director
of Neuren Pharmaceuticals Limited (ASX:NEU)
since 2018.
pg 16
Aeris Environmental Ltd Other Key Management Personnel
Andrew Just
Chief Executive Officer
Peter Bush
Chief Executive Officer
Mr Just (Bec., Hec., MBA, GAICD) was formerly the
Regional Director Asia Pacific for Radiometer, a
Danaher Company. He has 30 years’ global
experience in delivering growth and scale
leading Fortune 500
competencies with
companies, including GE Healthcare, Danaher,
Stryker, and Cochlear. Andrew has held a
variety of senior leadership roles across diverse
business functions, with expertise in sales
and marketing, performance management,
commercial transactions, and operations in
both turnaround and growth environments.
Appointed: 28 March 2022
Directorships of other listed companies held in
the last three years: Non-Executive Director of
Singular Health Group (ASX:SHG) since March
2021.
Robert Waring
Company Secretary
Mr Bush (B.Com, CA) was formerly the Chief
Financial Officer of the Regional Health Care
Group of companies and of Gryphon Capital
(an independent merchant bank that facilitates
the financing and development of emerging
healthcare-related entities). He began his
career working for five years at BDO, a global
accounting and consulting firm, and has since
spent a number of years working in industry. Mr
Bush holds a number of private directorships
and board positions.
Appointed: 2013. Resigned on 28 March 2022.
Directorship of other listed companies held in
the last three years: Non-Executive Director of
Vectus Biosystems Limited (ASX:VBS) since July
2015.
roles
secretarial
Mr Robert J Waring (B.Ec, CA, FCIS, FFin, FAICD)
was appointed to the position of Company
Secretary of the Company in 2002. He has
over 40 years of experience in financial and
corporate roles, including over 30 years in
for ASX-listed
company
companies and over 19 years as a Director of
ASX-listed companies. Mr Waring has over 30
years of experience in industry and, prior to
that, spent nine years with an international
firm of chartered accountants. He is a director
of Oakhill Hamilton Pty Ltd, which provides
company secretarial and corporate advisory
services to a range of listed and unlisted
companies. Mr Waring is also presently the
Company Secretary of ASX-listed companies
Vectus Biosystems Limited (ASX:VBS) and Xref
Limited (ASX:XF1).
pg 17
Annual Report 2022 Share Registry
Computershare Investor Services Pty Ltd
Yarra Falls, 452 Johnston Street
Abbotsford VIC 3067
GPO Box 2975, Melbourne VIC 3001
Telephone: +61 3 9415 4000
Web: www.computershare.com
Directors’ Meetings
The following table sets out the number of Directors’ meetings and Committee meetings held during
the financial year and the number of meetings attended by each Director (while they were a Director).
Board of
Directors
Audit and Risk
Committee
Corporate
Governance
Committee
Remuneration
and Nomination
Committee
Number of meetings held
Directors and their attendance
Maurie Stang*
Steven Kritzler
Michael Ford**
Abbie Widin***
Jenny Harry****
12
12
11
6
12
12
3
3
-
1
-
3
1
1
-
1
-
-
-
-
-
-
-
-
*Chairman of the Board. Chairman of both the Remuneration and Nomination Committee, and the Corporate Governance
Committee until 24 February 2022.
**Ceased to be a Director on 14 December 2021, and also ceased to be a member of the Audit and Risk Committee (and its
Chairman), the Corporate Governance Committee, and the Remuneration and Nomination Committee on 14 December 2021.
***Became Chair of the Related Parties Committee on 12 August 2021.
****Became the third member of both the Audit and Risk Committee, and the Remuneration and Nomination Committee,
on 29 July 2021. Became the Chair of the Audit and Risk Committee, the Remuneration and Nomination Committee, and the
Corporate Governance Committee on 24 February 2022.
In addition, the Board has a Disclosure Committee and a Related Parties Committee, to meet as and
when required. The Disclosure Committee did not meet during the 2021-22 financial year and the
Related Parties Committee met three times. Update and sales meetings were also attended by some or
all Directors during the financial year.
pg 18
Aeris Environmental Ltd
Committee Membership
As at the date of this Report, the Company had an Audit and Risk Committee, a Corporate Governance
Committee, a Remuneration and Nomination Committee, a Related Parties Committee, and a Disclosure
Committee of the Board of Directors. Members acting on the Committees of the Board during the
financial year are:
Audit and Risk Committee – Jenny Harry (Chair), Maurie Stang, and Michael Ford (previous Chair, for part
of year)
Corporate Governance Committee – Jenny Harry (Chair), Maurie Stang (previous Chair), and Michael
Ford (part of year)
Related Parties Committee - Abbie Widin (Chair), Jenny Harry, and Michael Ford (part of year)
Remuneration and Nomination Committee – Jenny Harry (Chair), Maurie Stang (previous Chair), and
Michael Ford (part of year)
The Disclosure Committee has not met since it was formed. It is composed of not less than three
members, one of whom will be a Non-Executive Director, and will normally also include the Chairman.
The Chair of the Committee will be elected by the members at each meeting.
Principal activities
The principal activities of the consolidated entity during the course of the financial year were:
•
research, development, commercialisation of proprietary technologies and global distribution of
HVAC/R Hygiene, anti-corrosion and disinfectant products;
• provision of HVAC/R Hygiene and Remediation Technology, Indoor Air Quality and Corrosion
Protection services.
There is no significant change in the nature of activities performed by the Company during the financial
year.
pg 19
Annual Report 2022 Review of operations
The results of the operations of the consolidated entity during the financial year were as follows:
Income
Expenses
Loss after income tax
2022
$
2021
$
Change
$
2,806,835
7,336,311
(4,529,476)
(9,937,262)
(13,203,489)
3,266,227
(7,130,427)
(5,867,178)
(1,263,249)
Change
%
(62%)
(25%)
22%
The Company’s Review of Operations commences on page 7 of this report.
Dividends
The Directors do not recommend the payment of a dividend in respect of the year ended 30 June 2022
(2021: Nil). No dividends have been paid or declared since the start of the financial year.
Significant changes in the state of affairs
There have been no significant changes in the state of affairs of the Group.
Significant events after the balance date
On 15 July 2022, 550,000 options with an exercise price of $0.01 were issued to consultant Tim Fortin for
services performed from June 2021 to January 2022. The options vested on the date of issue and each
option may be exercised from the date of issue at any time up until the expiry date of 15 July 2025.
On 5 August 2022, former CEO Peter Bush was issued 1,068,531 performance rights, with no exercise
price, in accordance with contractual commitments for prior years’ service, which were due to expire (if
not converted) at 5pm on 1 July 2023.
On 2 September 2022, former CEO Peter Bush was issued 1,068,531 shares on the conversion of his
1,068,531 performance rights that were issued on 5 August 2022 and two consultants were issued a total
of 150,000 shares on the conversion of their performance rights that were issued on 9 September 2019.
On 2 September 2022, a contractor was issued 50,000 shares as the result of work completed, issued at
a deemed issue price of $0.05 per share.
pg 20
Aeris Environmental Ltd There have been no other matters or circumstances, which have arisen since 30 June 2022 that have
significantly affected or may significantly affect:
(a) the operations, in financial years subsequent to 30 June 2022, of the consolidated entity;
(b) the results of those operations; or
(c) the state of affairs, in the financial years subsequent to 30 June 2022, of the consolidated entity.
Likely developments and expected results of operations
Disclosure of information other than that disclosed elsewhere in this Report regarding likely developments
in the operations of the consolidated entity in future financial years and the expected results of those
operations is likely to result in unreasonable prejudice to the consolidated entity. Accordingly, this
information has not been disclosed in this Report.
Environmental regulations
The economic entity is not subject to any significant environmental Commonwealth or State regulation
in respect of its operating activities.
Indemnification of Officers and Auditors
Indemnification
The Company has a Deed of Access and Indemnity with each of its Directors, by which the Company
indemnifies each Director in relation to any liability incurred as a result of being a Director of the Company
except where there is lack of good faith.
During or since the financial year, the Company has not indemnified or agreed to indemnify the Auditor
of the Company or any related entity against a liability incurred by the Auditor.
Insurance Premiums
During the financial year, the Company paid a premium in respect of a contract to insure its Directors
and executives against a liability to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of liability and the amount of the premium.
During the financial year, the Company has not paid a premium in respect of a contract to insure the
Auditor of the Company.
pg 21
Annual Report 2022
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or to intervene
in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of
the Company for all or part of those proceedings.
The Company was not a party to any such proceedings during the financial year.
Directors’ interests
Equity holdings
Maurie Stang
Steven Kritzler
Michael Ford (Director until 14 December 2021)
Particulars of options or rights granted over unissued shares
Number of options or rights on issue over unissued ordinary shares
Shares issued in the period as the result of the exercise of options or rights
Options or rights expired or forfeited during the period
Ordinary shares
Rights over ordinary
shares
23,698,288
11,252,785
75,000
35,026,073
2022
150,000
548,183
708,417
1,406,600
-
-
-
-
2021
1,406,600
1,182,358
218,333
2,807,291
Full details of options or rights on issue are shown in note 25 and note 26.
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
Officers of the Company who are former audit partners of UHY Haines Norton
There are no Officers of the Company who are former audit partners of UHY Haines Norton.
pg 22
Aeris Environmental Ltd
Auditors
UHY Haines Norton continues in office in accordance with section 327 of the Corporations Act 2001.
Auditor’s independence declaration
The Auditor’s Declaration of Independence for the year ended 30 June 2022 is attached to this Directors’
Report on page 41.
Corporate Governance
Aeris Environmental Ltd’s Corporate Governance Statement and ASX Appendix 4G are released to ASX
on the same day the Annual Report is released. The Company’s Corporate Governance Statement, and
its Corporate Governance Compliance Manual, can be found on the Company’s website at: https://www.
aeris.com.au/investors
pg 23
Annual Report 2022 Remuneration Report (audited)
Key Management Personnel (KMP)
The KMP of the Company comprise the Directors and Chief Executive Officer only, as follows:
Non-Executive Directors
Executive
Maurie Stang
Steven Kritzler
Abbie Widin
Jenny Harry
Michael Ford (Director until 14 December 2021)
Andrew Just (Chief Executive Officer appointed
28 March 2022)
Peter Bush (Chief Executive Officer until 28
March 2022)
Robert Waring, who was considered to be a KMP in the previous financial year is now no longer
considered to be a KMP at the start of the 2022 financial year. He was the Company Secretary throughout
the full year ended 30 June 2022.
Principles used to determine the nature and amount of remuneration
Remuneration policies
Details of Aeris’ remuneration policies and practices, together with details of Directors’ and Executives’
remuneration, are as follows:
a) Overview of remuneration structure
The objective of the Company’s executive reward framework is to ensure that reward for
performance is competitive and appropriate for the results delivered. Processes have been
established to ensure that the levels of compensation and remuneration are sufficient and
reasonable, and explicitly linked to the achievement of personal and corporate objectives.
The short and long-term incentive plans are specifically aligned to shareholder interests.
Aeris’ Remuneration and Nomination Committee advises the Board on remuneration
policies and practices generally, and makes specific recommendations on remuneration
packages and other terms of employment for staff, including Directors, the Company
Secretary and senior managers of the Company. The Committee has access to the advice
of independent remuneration consultants to ensure the remuneration and incentive
schemes are consistent with its philosophy as well as current market practices, however
no external report was received in the financial year.
pg 24
Aeris Environmental Ltd b) Non-Executive Directors
Total compensation for all Non-Executive Directors was approved at the Company’s 2014
Annual General Meeting (AGM) at $300,000 per annum. A Resolution was approved at
the AGM held on 27 January 2022 to increase the limit of Directors’ Fees by $150,000. The
increase provides some headroom in the future for an increase in the rate of Directors’ fees
and to enable Aeris to appoint additional Directors as the Company grows. It is noted that
Directors’ Fees are payable for the first time in the 2020-21 financial year for two Directors
who have not been compensated with Directors’ Fees since the 2002 IPO. Amounts paid
to Directors were set out in conjunction with advice from external advisors in reference
to fees paid to Non-Executive Directors of comparable companies, however no external
report was received in the financial year. The base fee for the Chairman is $90,000 per
annum and, for other Non-Executive Directors $60,000 per annum. Directors’ Fees will
cover all main Board activities and membership of Committees of the Board. This may be
re-assessed if Directors sit on more than one Committee. While it is recognised that various
organisations recommend that Non-Executive Directors do not receive performance-
related compensation, in the case of Aeris, because it is at a relatively early stage of
commercialising its technologies, and wishes to minimise its cash outgoings, it has in
the past, and plans in the future to, partially remunerate its Non-Executive Directors with
options, as detailed in the Remuneration Report. There are no retirement benefits provided
to Non-Executive Directors, apart from statutory superannuation.
c) Executives
The objective of Aeris’ executive reward system is to ensure that remuneration for
performance is competitive and appropriate for the results delivered. Executive pay
structures include a base salary and superannuation. In addition, executives and senior
managers can participate in the Employee Share Option Plan.
d) Short-term incentives (STI)
During the financial year ended 30 June 2022 no amounts were paid to KMPs as STIs. The
STI arrangement is reviewed annually by the Board.
e) Long-term incentives (LTI)
The LTI provide an annual opportunity for selected executives to receive awards in cash and
equity. The equity portion, being performance rights, vest over three years and is intended
to align a significant portion of an executive’s overall remuneration to shareholder value
over a longer term. Equity grants are subject to performance conditions (revenue and /
or earnings per share) and are tested against the performance hurdles set at the end of
three financial years. If performance hurdles are not met at the vesting date, the rights and
pg 25
Annual Report 2022
options lapse. In addition, performance rights and options will only vest if the executive
KMP member remains in continuous employment with Aeris in their current or equivalent
position from the date of grant to the respective vesting date of each grant.
During the financial year ended 30 June 2022 no amounts were paid as LTIs to KMPs.
f ) Share-based compensation
In October 2014, the Board established an Employee Incentive Plan (EIP). The EIP was
approved by shareholders at the Annual General Meeting (AGM) held on 27 November
2014 and was re-approved by shareholders at the AGM held on 29 November 2018 and 27
January 2022. The terms where options or shares issued under the EIP normally have the
following conditions:
•
•
•
Vesting
33.3% vest on the first anniversary of grant of options or performance rights,
33.3% vest on the second anniversary of grant of options or performance rights, and
33.4% vest on the third anniversary of grant of options or performance rights.
The contractual life of the options or performance rights issued ranges from three to five
years.
The exercise price determined in accordance with the Rules of the EIP is determined
by the Board when the performance of staff and contractors is evaluated following a
recommendation of the Remuneration and Nomination Committee, normally with external
remuneration adviser assistance. The option exercise price will normally be based on the
volume weighted average price (VWAP) of the Company’s shares for the 20 trading days
prior to the offer.
•
Each option or performance right is convertible into one fully paid ordinary share.
• All options or performance rights expire on the earlier of their expiry date or 90 days after
voluntary termination of the participant’s employment, with a Board discretion in special
circumstances.
There are no voting or dividend rights attached to options or performance rights. There are
no voting rights attached to the unissued ordinary shares. Voting rights will be attached to
the ordinary shares, which will be issued when the options have been exercised or when
the performance rights have been converted into fully paid ordinary shares.
The options or performance rights issued are on an equity-settled basis. There are no cash
settlement alternatives.
•
•
pg 26
Aeris Environmental Ltd Equity holdings transactions
Equity holdings transactions
Equity holdings transactions
Equity holdings transactions
The movement during the reporting period in the number of ordinary shares in Aeris Environmental Ltd
The movement during the reporting period in the number of ordinary shares in Aeris Environmental Ltd
held directly, indirectly or beneficially by each specified Director and Executive, including their personally
held directly, indirectly or beneficially by each specified Director and Executive, including their personally
related entities, are as follows:
related entities, are as follows:
Balance at
the start of
the year
Received
as part of
remuneration
Additions
Disposals/
other
2022 Ordinary shares
Specified Directors
Maurie Stang
Steven Kritzler
Michael Ford
Abbie Widin
Jenny Harry
23,698,288
11,252,785
75,000
-
-
35,026,073
Specified Executives
Peter Bush (CEO until 28 March 2022)
1,632,358
Andrew Just (Appointed CEO on 28
March 2022)
-
1,632,358
36,658,431
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
441,179
-
441,179
441,179
-
-
-
-
-
-
-
-
-
-
Balance at
the end of
the year
23,698,288
11,252,785
75,000
-
-
35,026,073
2,073,537
-
2,073,537
37,099,610
pg 27
Annual Report 2022 2021 Ordinary shares
Specified Directors
Maurie Stang
Bernard Stang (Director until 26 Nov
2020)
Steven Kritzler
Michael Ford
Abbie Widin (Appointed a Director on
2 March 2021)
Jenny Harry (Appointed a Director on
21 April 2021)
Specified Executives
Peter Bush
Robert Waring *
Balance at
the start of
the year
Received
as part of
remuneration
Additions
Disposals/
other
Balance at
the end of
the year
23,698,288
20,527,194
11,252,785
75,000
-
-
55,553,267
-
-
-
-
-
-
-
750,000
992,326
1,742,326
57,295,593
882,358
-
882,358
882,358
-
-
-
-
-
-
-
-
-
-
-
-
23,698,288
(1,740,555)
18,786,639
-
-
-
-
11,252,785
75,000
-
-
(1,740,555)
53,812,712
-
-
-
1,632,358
992,326
2,624,684
(1,740,555)
56,437,396
*Robert Waring, who was considered to be a KMP in the previous financial year is now no longer
considered to be a KMP at the start of the 2022 financial year. He remains the Company Secretary
throughout the full year ended 30 June 2022.
pg 28
Aeris Environmental Ltd 2022 Options and rights
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
Specified Directors
Maurie Stang
Steven Kritzler
Michael Ford
Abbie Widin
Jenny Harry
-
-
-
-
-
-
Specified Executives
Peter Bush (CEO until 28 March 2022)
441,179
Andrew Just (Appointed CEO on 28
March 2022)
-
441,179
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(441,179)
-
(441,179)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2021 Options and rights
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
Specified Directors
Maurie Stang
Bernard Stang (Director until 26 Nov
2020)
Steven Kritzler
Michael Ford
Abbie Widin (Appointed a Director on
2 March 2021)
Jenny Harry (Appointed a Director on
21 April 2021)
Specified Executives
Peter Bush
Robert Waring
-
-
-
-
-
-
-
1,323,537
50,000
1,373,537
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(882,358)
-
(882,358)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
441,179
50,000
491,179
pg 29
Annual Report 2022 Transactions with Directors and Director related entities
A number of specified Directors, or their personally-related entities, hold positions in other entities that
result in them having control or significant influence over the financial or operating policies of those
entities. A number of these entities transacted with the Company in the reporting period. The terms
and conditions of those transactions were no more favourable than those available, or which might
reasonably be expected to be available, on similar transactions to unrelated entities on an arms-length
basis. Details of these transactions are as follows.
There were no options over ordinary shares issued to Directors and other key management personnel as
part of compensation that were outstanding at 30 June 2022.
pg 30
Aeris Environmental Ltd
Regional Healthcare Group Pty Ltd
The Company and its controlled entities incur expenses for services provided by
Regional Healthcare Group Pty Ltd
Office and administration expenses
Insurance expenses
Rent
Distribution expenses
Corporate expenses
The Company and its controlled entities transacted with Regional Healthcare
Group Pty Ltd as customer for:
Sale of goods and administrative charges
Sales returns
Mr M Stang is a Director and Shareholder of Regional Healthcare Group Pty Ltd
Novapharm Research (Australia) Pty Ltd
The Company and its controlled entities incur expenses for services provided by
Novapharm Research (Australia) Pty Ltd.
Research and development
Parent and other expenses
The Company and its controlled entities transacted with Novapharm Research
(Australia) Pty Ltd and invoiced them for providing supply chain functions
Mr M Stang and S Kritzler are Directors and Shareholders of Novapharm
Research (Australia) Pty Ltd
Ramlist Pty Ltd
The Company and its controlled entities incur expenses for rent and utility
outgoings to Ramlist Pty Ltd.
Mr M Stang is a Director and Shareholder of Ramlist Pty Ltd.
Ensol Systems Pty Ltd
The Company and its controlled entities incur expenses for marketing and other
operational services to Ensol Systems Pty Ltd.
The Company and its controlled entities transacted with Ensol Systems Pty Ltd
and invoiced them for administrative charges
Mr M Stang is a Shareholder of Ensol Systems Pty Ltd
Teknik Lighting Solutions Pty Ltd
The Company and its controlled entities incur expenses for marketing and other
operational services to Teknik Lighting Solutions Pty Ltd. and invoiced them for
administrative charges
The Company and its controlled entities transacted with Teknik Lighting
Solutions Pty Ltd. and invoiced them for administrative charges
Mr M Stang is a Shareholder of Teknik Lighting Solutions Pty Ltd.
2022
$
2021
$
174,340
1,613
63,678
36,034
88,261
85,253
(152,398)
157,775
136,913
56,604
34,127
84,374
56,819
-
353,137
4,136
193,849
208,895
54,071
50,000
24,113
52,537
17,317
18,982
136,561
27,941
2,720
1,705
2,032
1,609
pg 31
Annual Report 2022 Henry Schein
The Company and its controlled entities sold products to Henry Schein
-
38,866
Mr M Stang is a Director of Henry Schein
Vectus Biosystems Limited
The Company and its controlled entities provided financial and other services to
Vectus Biosystems Limited
Mr M Stang and Mr P Bush are Directors and Shareholders of Vectus Biosystems
Limited
24,552
28,081
Bright Accountants
The Company and its controlled entities incur expenses for accounting services
from Bright Accountants.
-
52,111
Mr P Bush is a related party to Bright Accountants.
Oakhill Hamilton Pty Ltd
The Company and its controlled entities incur expenses for company secretarial
services from Oakhill Hamilton Pty Ltd
177,004
111,035
Mr R Waring is a Director and Shareholder of Oakhill Hamilton Pty Ltd
Outstanding balances payable from purchase of services
Regional Healthcare Group Pty Ltd - for purchase of services
39,192
114,547
Regional Healthcare Group Pty Ltd - for refund owing from credits due to sales
returns
Novapharm Research (Australia) Pty Ltd
Ramlist Pty Ltd
Ensol Systems Pty Ltd
Teknik Lighting Solutions Pty Ltd
Oakhill Hamilton Pty Ltd.
Outstanding balances receivable for sales and services provided
Vectus Biosystems Limited
Regional Healthcare Group Pty Ltd
Novapharm Research (Australia) Pty Ltd
Ensol Systems Pty Ltd
Teknik Lighting Solutions Pty Ltd
112,517
98,352
-
1,761
-
10,484
12,916
-
5,364
-
54
-
19,181
6,849
20,606
165
9,186
28,181
17,877
-
30,735
1,239
pg 32
Aeris Environmental Ltd Details of remuneration
Equity holdings transactions
The movement during the reporting period in the number of ordinary shares in Aeris Environmental
Ltd held directly, indirectly or beneficially by each specified Director and Executive, including their
personally-related entities, are as follows:
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the
following tables.
Termination
payments
Equity based benefits
Post-
employment
benefits
Super-
annuation
$
8,182
5,455
1,261
5,456
5,456
2022
Short-term benefits
Salary &
Director’s
fees
$
STI
Cash
bonus
$
Non-
monetary
benefits
$
Non-Executive Directors:
Maurie Stang
Steven Kritzler
Michael Ford
(Resigned 14
December 2021)
Abbie Widin
Jenny Harry
Executives (Note (i)):
Executives (Note (i)):
Peter Bush (Resigned
28 March 2022)*
Andrew Just
(Appointed CEO on
28 March 2022)
81,818
54,545
26,453
54,565
54,565
223,724
68,750
564,420
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22,346
140,045
5,892
-
54,048
140,045
$
-
-
-
-
-
Shares
$
-
-
-
-
-
-
-
-
Options &
rights
(Note (ii))
$
-
-
-
-
-
Total
$
90,000
60,000
27,714
60,021
60,021
59,838
445,953
-
74,642
59,838
818,351
*During the year ended 30 June 2022, Peter Bush received shares on exercise of old performance rights;
these have been expensed by the Company and previously reported in other financial years.
pg 33
Annual Report 2022
2021
Short-term benefits
Salary &
Director’s
fees
$
STI
Cash
bonus
$
Non-
monetary
benefits
$
Non-Executive Directors:
Maurie Stang
Bernard Stang
Steven Kritzler
Michael Ford
Abbie Widin
Jenny Harry
Executives (Note (i)):
Executives (Note (i)):
Peter Bush
Robert Waring
82,192
-
54,795
57,272
19,389
14,862
280,289
82,371
591,170
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Post-
employment
benefits
Super-
annuation
$
7,808
-
5,205
2,728
1,847
1,412
26,654
-
45,654
Termination
payments
Equity based benefits
Shares
$
-
-
-
-
-
-
-
-
-
Options &
rights
(Note (ii))
$
-
-
-
-
-
-
Total
$
90,000
-
60,000
60,000
21,236
16,274
8,088
315,031
-
82,371
8,088
644,912
$
-
-
-
-
-
-
-
-
-
pg 34
Aeris Environmental Ltd
Notes to the tables of details of Directors’ and Executive Officers’ remuneration.
i) “Executive Officers” are officers who are or were involved in, concerned in, or who take part in, the
management of the affairs of Aeris and/or related bodies corporate.
ii) The fair value of the options is calculated at the date of grant using a Black-Scholes model and allocated
to each reporting period evenly over the period from grant date to vesting date. The value disclosed is
the portion of the fair value of the options allocated to this reporting period. In valuing the options,
market conditions have been taken into account in both the current and prior periods. Comparative
information was not restated as market conditions were already included in the valuation.
The following factors and assumptions were used in determining the fair value of options on grant date.
Grant Date
Expiry Date
Fair value at
grant date
Exercise
price
Price on
shares
on grant date
Estimated
volatility
%
Risk free
interest rate
%
23/12/2016
23/12/2016
14/10/2021
23/10/2021
$0.2823
$0.2828
$0.42
$0.42
$0.37
$0.37
108.30%
108.30%
2.34%
2.34%
The following factors and assumptions were used in determining the fair value of performance shares
on issue date.
Grant Date
30/05/2018
30/05/2018
30/05/2018
Vesting Date
Price of shares on grant date
Exercise price
11/04/2019
11/04/2020
11/04/2021
$0.1650
$0.1650
$0.1650
Not applicable
Not applicable
Not applicable
pg 35
Annual Report 2022 Executive employment
Chief Executive Officer (CEO):
The following sets out the key terms of the employment for the former CEO, Peter Bush
Term:
Fixed remuneration:
Notice period:
Continuous employment until notice is given by either party
$246,070. This is reviewed annually.
To terminate his employment, Mr Bush is required to provide Aeris with 3
months written notice. Aeris must provide 3 months written notice.
Resignation or termination:
On resignation, unless the Board determines otherwise:
Statutory entitlements:
Termination for serious misconduct:
Post-Termination Restraint of Trade:
All unvested short term or long term-benefits are forfeited.
All vested but unexercised benefits are forfeited after 90 days following
cessation of employment.
Annual leave applies in all cases of separation. Long Service applies
unless Mr Bush’s service is under 10 years and he is dismissed for
misconduct.
Aeris may immediately terminate employment at any time in the case of
serious misconduct and Mr Bush will only be entitled to payment of fixed
remuneration until the termination date. Such termination will result
in all unvested benefits being forfeited. Treatment of any vested but
unexercised benefits will be at the discretion of the Board.
For a period of 6 months or, if that period is unenforceable, 3 months
after the termination of employment, Mr Bush must not, in the area of
Australia or, if that area is unenforceable, New South Wales:
(i) solicit, canvas, approach or accept any approach from any person
who was at any time during his last 12 months with the Company a
client of the Company in that part or parts of the business carried on by
the Company in which he was employed with a view to obtaining the
custom of that person in a business that is the same or similar to the
business conducted by the Company; or
(ii) interfere with the relationship between the Company and its
customers, employees or suppliers; or
(iii) induce or assist in the inducement of any employee of the Company
to leave their employment.
There are no contracts to which a Director is a party under which a Director is entitled to benefit other
than as disclosed above and note 32 to the financial statements.
pg 36
Aeris Environmental Ltd Chief Executive Officer (CEO):
The following sets out the key terms of the employment for the CEO, Andrew Just
Term:
Fixed remuneration:
Notice period:
Continuous employment until notice is given by either party
$302,500. This is reviewed annually.
To terminate his employment, Mr Just is required to provide Aeris with 3
months written notice. Aeris must provide 3 months written notice.
Resignation or termination:
On resignation, unless the Board determines otherwise:
Statutory entitlements:
Termination for serious misconduct:
Post-Termination Restraint of Trade:
All unvested short term or long-term benefits are forfeited.
All vested but unexercised benefits are forfeited 90 days following
cessation of employment.
Annual leave applies in all cases of separation. Long Service applies
unless Mr Just’s service is under 10 years and he is dismissed for
misconduct.
Aeris may immediately terminate employment at any time in the case of
serious misconduct and Mr Just will only be entitled to payment of fixed
remuneration until the termination date. Such termination will result
in all unvested benefits being forfeited. Treatment of any vested but
unexercised benefits will be at the discretion of the Board.
For a period of 12 months or, if that period is unreasonable, 6 months
after the termination of employment, Mr Just must not, in the area of
New South Wales or, if that area is unreasonable, the half of New South
Wales closest to the Company’s place of business where the CEO last
worked for the Company:
(i) solicit, canvas, approach or accept any approach from any person
who was at any time during his time with the Company a client of the
Company in that part or parts of the business carried on by the Company
in which he was employed with a view to obtaining the custom of
that person in a business that is the same or similar to the business
conducted by the Company; or
(ii) interfere with the relationship between the Company and its
customers, employees or suppliers; or
(iii) induce or assist in the inducement of any employee of the Company
to leave their employment.
There are no contracts to which a Director is a party under which a Director is entitled to benefit other
than as disclosed above and note 32 to the financial statements.
pg 37
Annual Report 2022 Link between remuneration and performance statutory performance indicators
The table shows measures of the Group’s financial performance over the last five years as required by
the Corporations Act 2001. However, these are not necessarily consistent with the measures used in
determining the variable amounts of remuneration to be awarded to KMP. As a consequence, there may
not always be a direct correlation between the statutory key performance measures and the variable
remuneration awarded.
Profit (Loss) for the year attributable to
owners of Aeris Environmental Ltd
Basic Earnings (loss) per share (cents
per share)
Increase/(decrease) in share price (%)
Total KMP remuneration as percentage
of profit (loss) for the year (%)
2022
$
2021
$
2020
$
2019
$
2018
$
(7,130,427)
(5,867,178)
1,982,941
(3,628,499)
(3,590,176)
(2.92)
(2.41)
0.90
(1.98)
(2.28)
(68.00%)
(10.47%)
(71.42%)
(10.99%)
70.97%
23.07%
121.43%
(13.51%)
(50.00%)
(12.01%)
Share options and performance rights
There are no options and performance rights to take up ordinary shares in Aeris Environmental Ltd that
were issued to KMP that remain unexercised at 30 June 2022 (2021: 491,179 options and performance
rights).
No options or performance rights to take up ordinary shares in Aeris Environmental Ltd were issued to
KMP during the financial years 2022 and 2021. Subsequent to year-end, former CEO Peter Bush was issued
1,068,531 performance rights, with no exercise price, in accordance with contractual commitments for
prior years’ service, which expire (if not converted) at 5pm on 1 July 2023.
No options issued to KMP expired or were forfeited during the years 2022 and 2021.
Option holders do not have any right, by virtue of the option, to participate in any share issue of the
Company or any related body corporate, or in the interest of any other registered scheme.
This concludes the remuneration report, which has been audited.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the Directors
Maurie Stang Sydney
30 September 2022
Non-Executive Chairman
pg 38
Aeris Environmental Ltd
pg 39
Annual Report 2022 Auditor’s Independence
Declaration
For the year ended 30 June 2022
pg 40
Aeris Environmental Ltd Level 11 | 1 York Street | Sydney | NSW | 2000
GPO Box 4137 | Sydney | NSW | 2001
t: +61 2 9256 6600 | f: +61 2 9256 6611
sydney@uhyhnsyd.com.au
www.uhyhnsydney.com.au
Auditor's Independence Declaration under section 307C of the Corporations Act 2001
To the Directors of Aeris Environmental Ltd
As lead auditor for the audit of Aeris Environmental Ltd for the year ended 30 June 2022, I
declare that, to the best of my knowledge and belief, there have been:
(a) no contraventions of the independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the
audit.
This declaration is in respect of Aeris Environmental Ltd and the entities it controlled during
the year.
Mark Nicholaeff
Partner
Sydney
30 September 2022
UHY Haines Norton
Chartered Accountants
An association of independent (cid:386) rms in Australia and New Zealand and a member
of UHY International, a network of independent accounting and consulting (cid:386) rms.
22
UHY Haines Norton—ABN 85 140 758 156 NSWBN 98 133 826
Liability limited by a scheme approved under Professional Standards Legislation.
Passion beyond numbers
pg 41
Annual Report 2022
Financial Statements - Contents
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Aeris Environmental Ltd
Australian Securities Exchange (ASX) Additional Information
Corporate directory
44
46
48
50
52
106
108
116
120
General information
The financial statements cover Aeris Environmental Ltd as a consolidated entity consisting of Aeris
Environmental Ltd and the entities it controlled at the end of, or during, the year. The financial statements
are presented in Australian dollars, which is Aeris Environmental Ltd’s functional and presentation
currency.
Aeris Environmental Ltd is a listed public company limited by shares, incorporated and domiciled in
Australia. Its registered office and principal place of business is:
5/26-34 Dunning Avenue
ROSEBERY
NSW 2018
A description of the nature of the consolidated entity’s operations and its principal activities are included
in the Directors’ report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 30
September 2022. The Directors have the power to amend and reissue the financial statements.
pg 42
Aeris Environmental Ltd pg 43
Annual Report 2022 Statement of profit or loss
and other comprehensive
income
For the year ended 30 June 2022
pg 44
Aeris Environmental Ltd Revenue
Expenses
Research and development and patent expense
Employee benefits expense
Depreciation and amortisation expense
Impairment of assets
Finance costs
Cost of sales
Distribution
Sales, Marketing and Travel expenses
Occupancy
Administration
Loss before income tax benefit
Income tax benefit
Note
5
6
6
6
2022
$
2021
$
2,806,835
7,336,311
(636,100)
(2,568,260)
(99,851)
(1,594,891)
(12,457)
(812,429)
(3,148,284)
(132,552)
(1,462,697)
(56,409)
(1,472,176)
(4,375,528)
(571,255)
(699,275)
(432,498)
(528,559)
(616,352)
(313,894)
(2,143,284)
(1,875,021)
(7,423,212)
(5,985,414)
7
292,785
118,236
Loss after income tax benefit for the year attributable to the
owners of Aeris Environmental Ltd
21
(7,130,427)
(5,867,178)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
57,301
57,301
(90,774)
(90,774)
Total comprehensive income for the year attributable to the
owners of Aeris Environmental Ltd
(7,073,126)
(5,957,952)
Basic earnings per share
Diluted earnings per share
24
24
Cents
(2.92)
(2.92)
Cents
(2.41)
(2.41)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
pg 45
Annual Report 2022 Statement of financial
position
As at 30 June 2022
pg 46
Aeris Environmental Ltd Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Total non-current assets
Total assets
Liabilities
Current Liabilities
Trade and other payables
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Equity attributable to the owners of Aeris Environmental Ltd
Non-controlling interest
Total equity
Note
2022
$
2021
$
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
5,303,142
1,092,236
1,262,798
310,401
7,968,577
109,255
-
109,255
11,485,616
1,485,009
2,811,899
367,022
16,149,546
106,017
295,036
401,053
8,077,832
16,550,599
1,392,486
2,337,691
-
92,481
91,225
388,669
1,484,967
2,817,585
-
-
-
227,113
34,533
261,646
1,484,967
3,079,231
6,592,865
13,471,368
62,520,726
1,861,906
62,430,276
1,700,432
(57,793,452)
(50,663,025)
6,589,180
13,467,683
3,685
3,685
6,592,865
13,471,368
The above statement of financial position should be read in conjunction with the accompanying notes.
pg 47
Annual Report 2022 Statement of changes in
equity
For the year ended 30 June 2022
pg 48
Aeris Environmental Ltd Consolidated
Issued
Capital
$
Reserves
$
Retained
Profits
$
Non-controlling
interest
$
Total equity
$
Balance at 1 July 2020
62,195,687
1,904,803
(44,795,847)
3,685
19,308,328
Loss after income tax benefit for
the year
Other comprehensive income for
the year, net of tax
Total comprehensive income for
the year
Transactions with owners in their
capacity as owners:
Shares issued against exercise of
options and rights
Shares issued to consultants
Movement in share-based
payments reserve
-
-
-
-
(5,867,178)
(90,774)
-
(90,774)
(5,867,178)
145,589
89,000
-
-
-
(113,597)
-
-
-
-
-
-
-
-
-
(5,867,178)
(90,774)
(5,957,952)
145,589
89,000
(113,597)
Balance at 30 June 2021
62,430,276
1,700,432
(50,663,025)
3,685
13,471,368
Consolidated
Issued
Capital
$
Reserves
$
Retained
Profits
$
Non-controlling
interest
$
Total equity
$
Balance at 1 July 2021
62,430,276
1,700,432
(50,663,025)
3,685
13,471,368
Loss after income tax benefit for
the year
Other comprehensive income for
the year, net of tax
Total comprehensive income for
the year
-
-
-
-
(7,130,427)
57,301
-
57,301
(7,130,427)
Shares issued
90,450
-
Transactions with owners in their
capacity as owners:
Share-based payments (note 20)
-
104,173
-
-
-
-
-
-
-
(7,130,427)
57,301
(7,073,126)
90,450
104,173
Balance at 30 June 2022
62,520,726
1,861,906
(57,793,452)
3,685
6,592,865
The above statement of changes in equity should be read in conjunction with the accompanying notes.
pg 49
Annual Report 2022 Consolidated statement of
cash flows
For the year ended 30 June 2022
pg 50
Aeris Environmental Ltd Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers (inclusive of GST)
R&D tax offset rebate received
Interest received
Government grants
Interest and other finance costs paid
Net cash used in operating activities
Note
2022
$
2021
$
3,240,986
11,367,172
(9,343,010)
(13,484,135)
-
687,807
(6,102,024)
(1,429,156)
-
-
(5,332)
24,465
181,162
(56,409)
36
(6,107,356)
(1,279,938)
Cash flows from investing activities
Payments for property, plant and equipment
12
Net cash used in investing activities
Cash flows from financing activities
Repayment of lease liabilities
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
(63,826)
(63,826)
(93,359)
(93,359)
(68,595)
(68,595)
(6,239,777)
11,485,616
57,303
-
-
(1,373,297)
12,949,339
(90,426)
Cash and cash equivalents at the end of the financial year
8
5,303,142
11,485,616
The above statement of cash flows should be read in conjunction with the accompanying notes.
pg 51
Annual Report 2022 Notes to the financial
statements
30 June 2022
pg 52
Aeris Environmental Ltd Note 1. Significant accounting policies
Corporate information
The financial report of Aeris Environmental Ltd (the Group) for the year ended 30 June 2022 was
authorised for issue in accordance with a resolution of the Directors on 30 September 2022.
Aeris Environmental Ltd (the parent) is a company limited by shares incorporated in Australia whose
shares are publicly listed on the Australian Stock Exchange (ASX code: AEI).
The nature of operations and principal activities of the Group are described in the Directors’ Report.
New or amended Accounting Standards and Interpretations adopted
No new or amended Accounting Standards were applicable to the Group for the current financial year.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted.
Statement of compliance
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in
a financial report containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also
comply with International Financial Reporting Standards.
pg 53
Annual Report 2022 Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity
of normal business activities and the realisation of assets and discharge of liabilities in the normal course
of business.
As disclosed in the financial statements, the Group earned annual revenue for the financial year ended
30 June 2022 of $2,678,133 (2021: $7,130,684) and made a loss before income tax of $7,423,212 (2021:
$5,985,414). The Group’s cash outflow for the financial year ended 30 June 2022 was $6,239,777 (2021:
$1,373,297). Cash at 30 June 2022 was $5,303,142 compared to $11,485,616 at 30 June 2021.
The loss before income tax and cash outflow for the financial year ended 30 June 2022, and the cash as
at 30 June 2022 prima facie give rise to a material uncertainty that may cast significant doubt over the
Company’s ability to continue as a going concern. Therefore, the Company may be unable to realise its
assets and discharge its liabilities in the normal course of business at the amounts stated in the financial
report.
However, the Directors believe the Company will be able to continue as a going concern, subject to the
successful implementation of the following mitigating factors in relation to material uncertainty:
•
•
Significant fixed and variable cost reductions were executed in July 2022, with the resulting
substantial lowering of the long-term cost structures achieved. This will lead to a significant
reduction in the net cash flow outflows for the year ending 30 June 2023.
The sales outlook for the Company is markedly improved from previous year, with a conservative
sales budget still yielding significant growth. Several new products are slated to be introduced.
• Our forecast budget for the year ending 30 June 2023 has a cash outflow of an amount that
is less than the current cash balance in the bank, therefore we believe the above will lead to a
significant reduction in the net operating cash outflow.
•
July and August 2022 saw the budget being largely achieved from a net loss perspective,
demonstrating the reasonable and achievable nature of the budget.
Accordingly, this financial report has been prepared on a going concern basis. Therefore, no adjustments
have been made to the financial report relating to the recoverability and classification of the carrying
amounts of assets or the amounts and classifications of liabilities that might be necessary should the
Company not continue as a going concern.
pg 54
Aeris Environmental Ltd Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’)
and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements
also comply with International Financial Reporting Standards as issued by the International Accounting
Standards Board (‘IASB’).
The AASB has issued new and amended accounting standards and interpretations that have mandatory
application dates for future reporting periods and which the Group has decided not to early adopt.
These standards are not expected to have a material impact on the Consolidated Entity in the current or
future reporting periods and on foreseeable future transactions.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for,
where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss,
financial assets at fair value through other comprehensive income, investment properties, certain
classes of property, plant and equipment and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the
consolidated entity’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 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
consolidated entity only. Supplementary information about the parent entity is disclosed in note 33.
pg 55
Annual Report 2022
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Aeris
Environmental Ltd (‘Company’ or ‘parent entity’) as at 30 June 2022 and the results of all subsidiaries
for the year then ended. Aeris Environmental Ltd and its subsidiaries together are referred to in these
financial statements as the ‘consolidated entity’.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity
controls an entity when the consolidated entity 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 to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to
the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the
consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change
in ownership interest, without the loss of control, is accounted for as an equity transaction, where the
difference between the consideration transferred and the book value of the share of the non-controlling
interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement
of profit or loss and other comprehensive income, statement of financial position and statement of
changes in equity of the consolidated entity. Losses incurred by the consolidated entity are attributed to
the non-controlling interest in full, even if that results in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including
goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation
differences recognised in equity. The consolidated entity recognises the fair value of the consideration
received and the fair value of any investment retained together with any gain or loss in profit or loss.
Subsidiaries are accounted for at cost in the separate financial statements of Aeris Environment Ltd less
any impairment charges.
pg 56
Aeris Environmental Ltd
Significant accounting policies
Accounting policies are selected and applied in a manner which ensures that the resultant financial
information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the
underlying transactions and other events are reported.
The following significant accounting policies have been adopted in the preparation and presentation of
the financial report and have been consistently applied unless otherwise stated.
Foreign currency translation
The functional and presentation currency of Aeris Environmental Ltd and its Australian subsidiaries is
Australian dollars (A$). Overseas subsidiaries use the currency of the primary economic environment in
which the entity operates, which is translated to the presentation currency upon consolidation.
Foreign currency transactions
All foreign currency transactions during the financial year are brought to account using the
exchange rate in effect at the date of the transaction. Foreign currency monetary items at
reporting date are translated at the exchange rate existing at reporting date. Non-monetary
assets and liabilities carried at fair value that are denominated in foreign currencies are translated
at the rates prevailing at the date when the fair value was determined.
Exchange differences are recognised in statement of profit or loss and other comprehensive
income in the period in which they arise.
Group companies
The results and financial positions of all the Group entities that have a functional currency
different from the presentation currency are translated into the presentation currency as follows:
• Assets and liabilities for each statement of financial position presented are translated at the
closing rate at the date of that balance sheet;
•
Income and expenses for each statement of profit or loss are translated at average exchange
rates; and
• All resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange difference arising from the translation of any net investment in
foreign entities, and of borrowings and other financial instruments designated as hedges of such
investments, are recognised in the foreign currency translation reserve. When a foreign operation
is sold or any borrowings forming part of the net investment are repaid, a proportionate
share of such exchange differences are recognised in the statement of profit or loss and other
comprehensive income as part of the gain or loss on sale where applicable.
pg 57
Annual Report 2022
Revenue recognition
The consolidated entity recognises revenue as follows:
Sale of goods and disposal of assets
Revenue from the sale of goods and disposal of assets is recognised when the consolidated
entity has passed the risks and rewards of the goods or assets to the buyer.
Revenue from services
Revenue from consultancy and engineering services is recognised by reference to the stage of
completion. Stage of completion is measured by reference to labour hours incurred to date as a
percentage of total estimated labour hours for each contract. When the contract outcome cannot
be measured reliably, revenue is recognised only to the extent that the expenses incurred are
eligible to be recovered.
Government grants
Grants from the government are recognised at their fair value where there is a reasonable
assurance that the grant will be received and the Group will comply with all attached conditions.
Government grants related to costs are deferred and recognised in the income statement over
the period necessary to match them with the costs that they are intended to compensate.
Interest income
Interest income is recognised as it is accrued using the effective interest rate method.
Other income
Other income is recognised as it is earned.
pg 58
Aeris Environmental Ltd
Income tax
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised
in the income statement except to the extent that it relates to items recognised directly in equity, in
which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is accounted for using the balance sheet liability method, providing for temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for taxation purposes. The following temporary differences are not provided for:
goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither
accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that
they will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance
sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is
no longer probable that the related tax benefit will be realised.
Tax consolidation
The Company and all its wholly-owned Australian resident entities have entered into a tax
consolidated group under Australian taxation law.
The Company is the head entity in the tax-consolidated group comprising all the Australian
wholly-owned subsidiaries set out in note 34. The head entity recognises all of the current and
deferred tax assets and liabilities of the tax consolidated group (after elimination of intragroup
transactions).
pg 59
Annual Report 2022
Current and non-current classification
Assets and liabilities are presented in the 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 consolidated entity’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 consolidated entity’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; or there is no unconditional right to defer the settlement of the
liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash in banks, investments in money market
instruments and short-term deposits with a maturity of three months or less, net of outstanding bank
overdrafts.
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 consolidated entity 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.
pg 60
Aeris Environmental Ltd
Inventories
Inventories and raw materials are carried at the lower of cost and net realisable value. Costs are assigned
on first in first out basis.
Financial assets
Financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. They are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is
determined based on the purpose of the acquisition and subsequent reclassification to other categories
is restricted.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the consolidated entity has transferred substantially all the risks
and rewards of ownership.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are either: i) held for trading, where they are
acquired for the purpose of selling in the short-term with an intention of making a profit; or
ii) designated as such upon initial recognition, where they are managed on a fair value basis
or to eliminate or significantly reduce an accounting mismatch. Except for effective hedging
instruments, derivatives are also categorised as fair value through profit or loss. Fair value
movements are recognised in profit or loss.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets, principally equity securities,
that are either designated as available-for-sale or not classified as any other category. After initial
recognition, fair value movements are recognised in other comprehensive income through the
available-for-sale reserve in equity. Cumulative gain or loss previously reported in the available-
for-sale reserve is recognised in profit or loss when the asset is derecognised or impaired.
pg 61
Annual Report 2022
Financial instruments issued by the Company
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the
substance of the contractual agreement.
Interest
Interest is classified as an expense consistent with the balance sheet classification of the related
debt or equity instruments.
Depreciation
All assets have limited useful lives and are depreciated/amortised using the straight line method over
their estimated useful lives, taking into account residual values. Depreciation and amortisation rates and
methods are reviewed annually for appropriateness. Depreciation and amortisation are expensed.
Depreciation and amortisation are calculated on a straight line basis so as to write off the net cost or
other revalued amount of each asset over its expected useful life.
The following estimated useful lives are used in the calculation of depreciation.
Computer equipment
Computer software
Field equipment
Office furniture
Plant and equipment
Leasehold improvements
2-3 years
3 years
2-3 years
5 years
2-3 years
6 years
Field equipment under finance lease
2-3 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at
each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful
life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future
economic benefit to the consolidated entity. Gains and losses between the carrying amount and the
disposal proceeds are taken to profit or loss.
pg 62
Aeris Environmental Ltd
Research and development
Research and development expenditure is expensed as incurred except to the extent that development
expenditure recoverability is assured beyond reasonable doubt, in which case it is capitalised. Deferred
development expenditure is amortised on a straight line basis over the period during which the related
benefits are expected to be realised once commercial production has commenced.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any
lease payments made at or before the commencement date net of any lease incentives received, any
initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs
expected to be incurred for dismantling and removing the underlying asset, and restoring the site or
asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or
the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to
obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated
useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease
liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability
for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on
these assets are expensed to profit or loss as incurred.
Financial liabilities
The Group classifies its financial liabilities as measured at amortised cost. The Group does not use
derivative financial instruments in economic hedges of currency or interest rate risk.
These financial liabilities include the following items:
Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and
subsequently carried at amortised cost using the effective interest method.
Lease liabilities are initially recognised at fair value net of any transaction costs directly attributable to the
issue of the instrument and subsequently carried at amortised cost using the effective interest method.
pg 63
Annual Report 2022
Impairment of assets
At each reporting date, the Company 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 the asset does not generate cash flows that are independent from
other assets, the Company estimates the recoverable amount of the cash-generating unit to which the
asset belongs.
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 (cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair
value, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating
unit) is increased to the revised estimate of its recoverable amount, but only to the extent 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 (cash-generating unit) in prior years. A reversal of
an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair
value, in which case the reversal of the impairment loss is treated as a revaluation increase.
Trade and other payables
Trade payables and other accounts payable are recognised when the consolidated entity becomes
obliged to make future payments resulting from the purchase of goods and services. Trade accounts
payable are normally settled within 30 days.
pg 64
Aeris Environmental Ltd
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made over the term of the lease, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity’s
incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid
under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that
do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts
are remeasured if there is a change in the following: future lease payments arising from a change in an
index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination
penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use
asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Borrowings and convertible notes
Loans and borrowings are initially recognised at the fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortised cost using the effective interest method
if the impact is material to the financial report.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the
reporting date, the loans or borrowings are classified as non-current.
Convertible notes are separated into liability and equity components based on the terms of the contract.
On issuance of the convertible notes, the fair value of the liability component is determined using a market
rate for an equivalent non-convertible bond. This amount is classified as a financial liability measured at
amortised cost (net of transaction costs) until it is extinguished on conversion or redemption.
The remainder of the proceeds is allocated to the conversion option that is recognised and included in
equity. Transaction costs are deducted from equity, net of associated income tax. The carrying amount
of the conversion option is not remeasured in subsequent years.
Transaction costs are apportioned between the liability and equity components of the convertible notes
based on the allocation of proceeds to the liability and equity components when the instruments are
initially recognised.
pg 65
Annual Report 2022
Provisions
Provisions are recognised when the consolidated entity has a present obligation, the future sacrifice of
economic benefits is probable, and the amount of the provision can be measured reliably.
When some or all of the economic benefits required to settle a provision are expected to be recovered
from a third party, the receivable is recognised as an asset if it is probable that recovery will be received
and the amount of the receivable can be measured reliably.
The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at reporting date, taking into account the risks and uncertainties surrounding the
obligation. Where a provision is measured using the cash flows estimated to settle the present obligation,
its carrying amount is the present value of those cash flows.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service
leave expected to be settled wholly within 12 months of the reporting date are measured at the
amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months
of the reporting date are measured at the present value of expected future payments to be made
in respect of services provided by employees up to the reporting date using the projected unit
credit method. Consideration is given to expected future wage and salary levels, experience of
employee departures and periods of service. Expected future payments are discounted using
market yields at the reporting date on high quality corporate bonds with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which
they are incurred.
pg 66
Aeris Environmental Ltd Share-based payment
Share-based compensation benefits are provided to employees via the Aeris Environmental Ltd
Employee Option Plan. Information relating to these schemes is set out in note 26.
The fair value of options granted under the Employee Option Plan is recognised as an employee
benefit expenses with a corresponding increase in equity. The fair value is measured at grant date
and recognised over the period during which the employees become unconditionally entitled to
the options.
The fair value at grant date is independently determined using a Black-Scholes option pricing
model. At each balance sheet date, the entity revises its estimate of the number of options that
are expected to become exercisable. The employee benefit expense recognised each period
takes into account the most recent estimate. The impact of the revision to original estimates, if
any, is recognised in the income statement with a corresponding adjustment to equity.
pg 67
Annual Report 2022 Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date; and assumes
that the transaction will take place either: in the principal market; or in the absence of a principal market,
in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset
or liability, assuming they act in their economic best interests. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising the
use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that
reflects the significance of the inputs used in making the measurements. Classifications are reviewed at
each reporting date and transfers between levels are determined based on a reassessment of the lowest
level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed to be significant. External valuers are
selected based on market knowledge and reputation. Where there is a significant change in fair value of
an asset or liability from one period to another, an analysis is undertaken, which includes a verification
of the major inputs applied in the latest valuation and a comparison, where applicable, with external
sources of data.
Recoverable amount of non-current assets
The carrying amounts of non-current assets valued on the cost basis are reviewed to determine whether
they are in excess of their recoverable amount at reporting date. If the carrying amount of a non-current
asset exceeds its recoverable amount, the asset is written down to the lower amount. The write-down is
expensed in the reporting period in which it occurs.
Where a group of assets working together supports the generation of cash inflows, recoverable amount
is assessed in relation to that group of assets. In assessing recoverable amounts of non-current assets, the
relevant cash flows have been discounted to their present value.
pg 68
Aeris Environmental Ltd
Share capital
Financial instruments issued by the Group are treated as equity only to the extent that they do not meet
the definition of a financial liability. The Group’s ordinary shares are classified as equity instruments. Any
transaction costs associated with the issuing of shares are deducted from share capital.
The Group is not subject to any externally imposed capital requirements.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of
whether equity instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred,
equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and
the amount of any non-controlling interest in the acquiree. For each business combination, the non-
controlling interest in the acquiree is measured at either fair value or at the proportionate share of the
acquiree’s identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-
controlling interest in the acquiree and the fair value of the consideration transferred and the fair value
of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred
and the pre-existing fair value is less than the fair value of the identifiable net assets acquired, being a
bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the
acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of
the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred
and the acquirer’s previously held equity interest in the acquirer.
Comparative amounts
Where necessary, comparative amounts have been changed to reflect changes in disclosures in the
current year.
pg 69
Annual Report 2022
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Aeris
Environmental Ltd, excluding any costs of servicing equity other than ordinary shares, by the
weighted average number of ordinary shares outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per
share to take into account the after income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares and the weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Goods and Services Tax (‘GST’) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other
payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing
or financing activities which are recoverable from, or payable to the tax authority, are presented as
operating cash flows.
pg 70
Aeris Environmental Ltd
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgments, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually
evaluates its judgments and estimates in relation to assets, liabilities, contingent liabilities, revenue and
expenses. Management bases its judgments and estimates on historical experience and on other various
factors it believes to be reasonable under the circumstances, the result of which form the basis of the
carrying values of assets and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions and conditions.
Management has identified the following critical accounting policies for which significant judgments,
estimates and assumptions are made. Actual results may differ from these estimates under different
assumptions and conditions and may materially affect financial results or the financial position reported
in future periods.
Further details of the nature of these assumptions and conditions may be found in the relevant notes to
the financial statements.
The following critical estimates and judgments have been made in respect of the following items:
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which they are granted. The
fair value is determined by using either the Binomial or Black-Scholes model taking into account
the terms and conditions upon which the instruments were granted. The accounting estimates
and assumptions relating to equity-settled share-based payments would have no impact on the
carrying amounts of assets and liabilities within the next annual reporting period but may impact
profit or loss and equity.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and
judgement. It is based on the lifetime expected credit loss, grouped based on days overdue,
and makes assumptions to allocate an overall expected credit loss rate for each group. These
assumptions include recent sales experience, historical collection rates, the impact of the
Coronavirus (COVID-19) pandemic and forward-looking information that is available. The
allowance for expected credit losses, as disclosed in note 9, is calculated based on in-depth
evaluation of customers expected to incur future credit losses. The actual credit losses in future
years may be higher or lower.
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and
judgement. The level of the provision is assessed by taking into account the recent sales
experience, the ageing of inventories and other factors that affect inventory obsolescence.
pg 71
Annual Report 2022 Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and
amortisation charges for its property, plant and equipment and finite life intangible assets.
The useful lives could change significantly as a result of technical innovations or some other
event. The depreciation and amortisation charge will increase where the useful lives are less
than previously estimated lives, or technically obsolete or non-strategic assets that have been
abandoned or sold will be written off or written down.
Fair value of financial instruments
When the fair value of financial assets and financial liabilities recorded in the statement of
financial position cannot be derived from active markets, their fair value is determined using
valuation techniques including the discounted cash flow model. The inputs to these models
are taken from observable markets where possible, but where this is not feasible, a degree of
judgement is required in establishing fair values. The judgements include considerations of inputs
such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could
affect the reported fair value of financial instruments.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated
entity considers it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and
lease liability. Judgement is exercised in determining whether there is reasonable certainty that
an option to extend the lease or purchase the underlying asset will be exercised, or an option to
terminate the lease will not be exercised, when ascertaining the periods to be included in the
lease term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered
at the lease commencement date. Factors considered may include the importance of the asset
to the consolidated entity’s operations; comparison of terms and conditions to prevailing market
rates; incurrence of significant penalties; existence of significant leasehold improvements; and
the costs and disruption to replace the asset. The consolidated entity reassesses whether it is
reasonably certain to exercise an extension option, or not exercise a termination option, if there is
a significant event or significant change in circumstances.
Employee benefits provision
As discussed in note 1, the liability for employee benefits expected to be settled more than
12 months from the reporting date are recognised and measured at the present value of the
estimated future cash flows to be made in respect of all employees at the reporting date. In
determining the present value of the liability, estimates of attrition rates and pay increases
through promotion and inflation have been taken into account.
pg 72
Aeris Environmental Ltd Note 3. Financial risk management
The Group’s activities expose it to a variety of financial risks; market risk (including currency risk, credit
risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The
Group’s overall risk management program focuses on the unpredictability of financial markets and seeks
to minimise potential adverse effects on the financial performance of the Group.
Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities
are denominated in a currency that is not the entity’s functional currency. The Group is exposed to
foreign exchange risk predominantly arising from currency exposures to the US dollar on its loans to its
overseas subsidiaries. Currency protection measures may be deemed appropriate in specific commercial
circumstances and are subject to strict limits laid down by the Board. The Group has not entered into any
foreign currency hedging contracts during the year.
Credit risk
Credit risk arises from the potential failure of counterparties to meet their obligations under the respective
contracts at maturity. There is negligible credit risk on financial assets of the Group since there is limited
exposure to individual customers and the economic entity’s exposure is limited to the amount of cash,
short term deposits and receivables which have been recognised in the balance sheet.
Cash flow and fair value interest rate risk
As the Group has no significant interest-bearing assets or liabilities, the Group’s income and operating
cash flows are not materially exposed to changes in market interest rates.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to
enable the Company to operate as a going concern. The Board monitors liquidity on a monthly basis and
management monitors liquidity on a daily basis.
pg 73
Annual Report 2022
Note 4. Operating segments
Identification of reportable operating segments
From Board of Directors’ (Chief Operating Decision Makers’ - CODM) perspective, the Group
is organised into business units based on its geographical area of operation. The Group has
identified two reportable segments as mentioned below.
The reportable segments are based on aggregated operating segments determined by the
similarity of the revenue stream and products sold and/or the services provided in Australia and
internationally, as these are the sources of the Group’s major risks and have the most effect on the
rates of return.
The CODM reviews revenue, COGS, operating expenses, profit before tax, assets & liabilities for the
following segments:
(a) Australia - Sales and service on account of Australian operations
(b) International - Sales and service on account of international operations
Intersegment transactions
Intersegment transactions are made at arm’s length and are eliminated on consolidation.
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received and are eliminated on
consolidation.
Major customer
During the year ended 30 June 2022 the most significant client accounts for approximately 15%
(2021: 33%) of the consolidated entity’s external revenue through Australian Sales and Services
operating segment. There were no other customers who individually amounted to 10% or more
of the total revenue during 2022 and 2021.
pg 74
Aeris Environmental Ltd Operating segment information of the consolidated entity
2022
Revenue
Sales
Other income
Total Revenue
Expenses
Cost of goods sold
Operating expenses
Total Expenses
Profit (Loss) before tax
2021
Revenue
Sales
Other income
Total Revenue
Expenses
Cost of goods sold
Operating expenses
Total Expenses
Profit (Loss) before tax
Australia
International
Intersegment
eliminations
Consolidated
2,558,829
117,639
2,676,468
188,776
11,063
199,839
(69,472)
2,678,133
-
128,702
(69,472)
2,806,835
(1,362,628)
(9,029,213)
(179,020)
(962,112)
69,472
(1,472,176)
1,233,454
(8,757,871)
(10,391,841)
(1,141,132)
1,302,926
(10,230,047)
(7,715,373)
(941,293)
1,233,454
(7,423,212)
Australia
International
Intersegment
eliminations
Consolidated
6,292,080
956,848
(118,244)
7,130,684
205,625
2
-
205,627
6,497,705
956,850
(118,244)
7,336,311
(3,795,309)
(8,619,182)
(698,463)
(841,905)
118,244
(4,375,528)
514,890
(8,946,197)
(12,414,491)
(1,540,368)
633,134
(13,321,725)
(5,916,786)
(583,518)
514,890
(5,985,414)
pg 75
Annual Report 2022 Segment assets and liabilities
Segment assets and liabilities
Australia
International
Total
Assets
2022
Assets
2021
Liabilities
2022
Liabilities
2021
9,082,505
16,548,826
2,436,327
4,777,701
1,866,865
964,955
6,454,193
4,083,079
10,949,370
17,513,781
8,890,520
8,860,780
Intersegment elimination
(2,871,538)
(963,181)
(7,405,553)
(5,781,548)
Consolidated
8,077,832
16,550,600
1,484,967
3,079,232
Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods and services over time and at a point in
time for the following major geographical segments:
Segment revenue
Intersegment elimination
Australia
2022
Australia
2021
International
2022
International
2021
2,558,829
6,292,080
188,776
956,848
(69,472)
(118,244)
-
-
Revenue from external customers
2,489,357
6,173,836
188,776
956,848
Timing of revenue recognition
At a point in time
Over time
1,782,756
5,097,304
188,776
956,848
706,601
1,076,532
-
-
2,489,357
6,173,836
188,776
956,848
pg 76
Aeris Environmental Ltd Note 5. Revenue
Revenue from contracts with customers
Revenue from sales
Revenue from services
Total Revenue
Other revenue
Government grants
Financial income
Revenue
Consolidated
2022 $
2021 $
1,971,532
706,601
2,678,133
124,257
4,445
128,702
2,806,835
6,054,152
1,076,532
7,130,684
200,040
5,587
205,627
7,336,311
pg 77
Annual Report 2022 Note 6. Expenses
Profit (Loss) before income tax includes the following items of expense:
Loss before income tax includes the following specific expenses
Depreciation
Leasehold improvements
Plant and equipment
Right-of-use assets
Total depreciation
Employment benefit expenses
Base salary and fees
Superannuation & statutory costs
Share based payment
Other employment expenses
Consolidated
2022 $
2021 $
981
59,607
39,263
99,851
2,120,948
352,751
64,381
30,180
6,332
45,754
80,465
132,551
2,722,895
317,050
24,492
83,847
Total employment benefit expenses
2,568,260
3,148,284
Finance costs
Interest, bank fees and other financial expenses
12,457
56,409
Other expenses
Impairment (recovery) of receivables
Impairment of inventory
Rental & occupancy expenses
Research and development and patent expenses
145,646
1,365,000
432,498
636,100
271,697
1,191,000
313,894
812,429
pg 78
Aeris Environmental Ltd Note 7. Income Tax Benefit
The prima facie income tax benefit on pre-tax accounting loss reconciles to the income tax benefit in
the financial statements as follows:
Income tax benefit
Current tax
Aggregate income tax benefit
Consolidated
2022 $
2021 $
(292,785)
(292,785)
(118,236)
(118,236)
Numerical reconciliation of income tax benefit and tax at the
statutory rate
Loss before income tax benefit
Tax at the statutory tax rate of 25% (2021: 26%)
(7,423,212)
(1,855,803)
(5,985,414)
(1,556,208)
Temporary differences and tax losses not recognised:
Non-deductible expenses
Share-based payments
R&D tax offset receivable
Income tax benefit
1,839,708
16,095
-
(292,785)
(292,785)
1,416,394
21,578
(118,236)
-
(118,236)
Deferred tax balances not recognised
Calculated at 25% (2021: 26%) of not brought to account assets or liabilities:
Deferred tax assets not recognised
Tax losses
Revenue tax losses available for offset against future taxable income
7,845,547
6,728,307
Consolidated
2022 $
2021 $
Deferred tax assets not recognised comprises temporary
differences attributable to:
Allowance for expected credit losses
Provision for inventory impairment
Provision for employee entitlements
Difference between book and tax values of fixed assets
Accrued expenses
Future lease obligations
53,589
639,000
40,260
(7,308)
132,145
-
857,686
8,703,233
90,000
297,750
105,800
17,160
7,500
5,826
524,036
7,252,343
pg 79
Annual Report 2022 Tax consolidation
(i) Relevance of tax consolidation to the consolidated entity
Legislation to allow groups comprising a parent entity and its Australian resident wholly-owned
entities, to elect to consolidate and be treated as a single entity for income tax purposes (‘the tax
consolidation system’) was substantively enacted on 21 October 2002. The Company, its wholly-
owned Australian resident entities and its sister entities within Australia are eligible to consolidate
for tax purposes under this legislation and have elected to implement the tax consolidation
system from 1 July 2005.
(ii) Method of measurement of tax amounts
The tax consolidated group has adopted the “stand-alone” method of measuring current and
deferred tax amounts applicable to each company.
(iii) Tax sharing agreements
There are no tax sharing or funding agreements in place.
(iv) Tax consolidation contributions
There were no amounts recognised for the period as tax consolidations contributions by (or
distributions to) equity participants of the tax consolidated group.
Note 8. Current assets - cash and cash equivalents
Cash at bank and on hand
Cash on deposit
Consolidated
2022 $
269,737
5,033,405
5,303,142
2021 $
906,653
5,033,405
11,485,616
The carrying amount of the Group’s cash balances are a reasonable approximation of their fair values.
pg 80
Aeris Environmental Ltd Note 9. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
R&D tax offset rebate receivable
Consolidated
2022 $
1,013,805
(214,354)
799,451
292,785
1,092,236
2021 $
1,845,009
(360,000)
1,485,009
-
1,485,009
The carrying amounts of the Group’s receivables are a reasonable approximation of their fair values.
Allowance for expected credit losses
For the 2022 and 2021 financial years, the Group has undertaken an in-depth evaluation of each individual
customer which the entity considers to have a risk of incurring credit losses.
Based on the evaluation and considering average industry credit terms of 60 days, loss allowance
provision was calculated and grouped as follows:
Consolidated
Current < 60 days
Past due > 60 days
Past due > 90 days
Expected credit loss
rate
2022
%
-
-
2021
%
-
-
Carrying Amount
2022
$
2021
$
324,829
598,051
148,855
118,930
Allowance for
expected credit losses
2022
$
-
-
2021
$
-
-
39.68629% 31.91410%
540,121
1,128,028
214,354
360,000
1,013,805
1,845,009
214,354
360,000
Less than 6 months overdue
More than 6 months overdue
Amounts recognised in profit or loss
During the year, the following losses were recognised in profit or loss in
relation to impaired receivables
Individually impaired receivables
Previous provisions written back
Movement in provision for impairment
Consolidated
2022 $
-
214,354
-
195,646
(50,000)
2021 $
-
360,000
(81,697)
-
(190,000)
pg 81
Annual Report 2022
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Unused amounts reversed
Closing balance
Note 10. Current assets - inventories
Inventories - at cost
Less: Provision for impairment
Consolidated
2022 $
360,000
50,000
(195,646)
214,354
2021 $
170,000
190,000
-
360,000
Consolidated
2022 $
3,818,798
(2,556,000)
1,262,798
2021 $
4,002,899
(1,191,000)
2,811,899
The carrying amounts of the Group’s inventories are a reasonable approximation of their fair values.
Note 11. Current assets - other
Prepayments
Deposits, bonds and other receivables
Consolidated
2022 $
288,402
21,999
310,401
2021 $
351,751
15,271
367,022
The carrying amount of the Group’s other current assets are a reasonable approximation of their fair
values.
pg 82
Aeris Environmental Ltd Note 12. Non-current assets - property, plant and equipment
Consolidated
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment under lease
Less: Accumulated depreciation
Computer equipment - at cost
Less: Accumulated depreciation
Office equipment - at cost
Less: Accumulated depreciation
Field equipment - at cost
Less: Accumulated depreciation
R & D equipment - at cost
Less: Accumulated depreciation
Software - at cost
Less: Accumulated depreciation
2022 $
130,228
(130,228)
-
187,474
(162,801)
24,673
347,393
(318,736)
28,657
133,595
(130,789)
2,806
51,647
(51,647)
-
40,773
(32,367)
8,406
50,762
(6,049)
44,713
109,255
2021 $
130,228
(129,247)
981
187,474
(137,338)
50,136
331,582
(296,231)
35,351
133,595
(128,757)
4,838
51,647
(51,647)
-
40,773
(26,062)
14,711
2,817
(2,817)
-
106,017
pg 83
Annual Report 2022 Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial
year are set out below:
Consolidated
Computer
equipment
$
Leasehold
improvements
$
Offie
furniture
$
Plant and
equipment
$
R&D
Equipment
$
Software
$
Balance at 1 July 2020
Additions
Exchange differences
30,822
24,109
(614)
7,313
-
-
10,814
3,462
-
16,410
50,026
-
-
15,762
-
Depreciation expense
(18,966)
(6,332)
(9,438)
(16,300)
(1,051)
Balance at 30 June 2021
Additions
35,351
15,881
981
-
4,838
50,136
14,711
-
-
-
Depreciation expense
(22,575)
(981)
(2,032)
(25,463)
(6,305)
-
-
-
-
-
47,945
(3,232)
Total
$
65,359
93,359
(614)
(52,087)
106,017
63,826
(60,588)
Balance at 30 June 2022
28,657
-
2,806
24,673
8,406
44,713
109,255
Note 13. Non-current assets - right-of-use assets
Land and buildings - right-of-use
Less: Accumulated depreciation
Reconciliations
Consolidated
2022 $
-
-
-
2021 $
455,965
(160,929)
295,036
Reconciliations of the written down values at the beginning and end of the current and previous financial
year are set out below:
Consolidated
Balance at 1 July 2020
Depreciation expense
Balance at 30 June 2021
Disposals
Depreciation expense
Balance at 30 June 2022
Refer to note 17 for further information on lease liabilities.
pg 84
Consolidated
Right-of-use asset $
375,501
(80,465)
295,036
(255,773)
(39,263)
-
-
Total $
375,501
(80,465)
295,036
(255,773)
(39,263)
Aeris Environmental Ltd Note 14. Current liabilities - trade and other payables
Trade payables
GST and PAYG payable
Other payables
Consolidated
2022 $
524,578
35,287
832,621
1,392,486
2021 $
1,592,014
(10,180)
755,857
2,337,691
Refer to note 27 for further information on financial instruments.
The carrying amounts of the Group’s current trade and other payables are a reasonable approximation
of their fair values.
Note 15. Current liabilities - lease liabilities
Lease liability
Consolidated
2022 $
-
2021 $
91,225
Refer to note 17 for further information on lease liabilities and note 27 for further information on financial
instruments.
Note 16. Current liabilities - provisions
Annual leave
Long service leave
Consolidated
2022 $
92,481
-
92,481
2021 $
354,645
34,024
388,669
The carrying amounts of the Group’s provisions are a reasonable approximation of their fair values.
pg 85
Annual Report 2022 Note 17. Non-current liabilities - lease liabilities
Lease liability
Refer to note 27 for further information on financial instruments.
Consolidated
2022 $
-
2021 $
227,113
Particulars relating to lease liabilities
The Group had recognised ‘Right-of-Use Asset’ and an associated ‘Lease Liability’ in the 2021 financial
year for the office space leased in Brisbane following AASB 16 for accounting of leases. During the year
ended 30 June 2022, it was decided not to take up the renewal option upon expiry of lease on 12
February 2022. Following this decision, the Group has adjusted the carrying amount of ‘Right-of-Use
Asset’ and ‘Lease Liability’ to that effect and as a result the values have significantly decreased with no
balances at 30 June 2022. The ‘Right-of-Use Asset’ is disclosed in note 13 and the current lease liability is
disclosed in note 15.
The financial statements shows the following amounts relating to
leases:
Depreciation
Interest expense (included in finance cost)
Value of Right-of-Use asset included in property, plant and equipment
Expense relating to short-term leases (included in occupancy expenses)
Total cash flows for leases
Consolidated
2022 $
2021 $
39,263
10,160
-
39,263
72,630
80,465
16,850
295,036
63,197
187,854
pg 86
Aeris Environmental Ltd Note 18. Non-current liabilities - provisions
Long service leave
Consolidated
2022 $
-
2021 $
34,533
The carrying amounts of the Group’s non-current liabilities and provisions are a reasonable approximation
of their fair values.
Note 19. Equity - issued capital
Ordinary shares - fully paid
244,376,020
243,827,837
62,520,726
62,430,276
2022
Shares
2021
Shares
2022
$
2021
$
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Movements in reserves
Details
Balance - no par value
Shares issued on exercise of options
Shares issued to consultants and advisors
Date
Shares
Issue Price
S
1 July 2020
242,545,479
882,358
400,000
$0.16
$0.22
$0.08
$0.49
62,195,687
145,589
89,000
62,430,276
37,500
52,950
Balance - no par value
30 June 2021
243,827,837
Shares issued on conversion of performance rights
Shares issued on conversion of performance rights
441,179
107,004
Balance - no par value
30 June 2022
244,376,020
62,520,726
For the purposes of these disclosures, the Group considers its capital to comprise its ordinary share
capital and accumulated losses. Neither the share based payments reserve nor the translation reserve is
considered as capital.
Share buy-back
There is no current on-market share buy-back.
pg 87
Annual Report 2022 Note 20. Equity - reserves
Foreign currency reserve
Share-based payments reserve
Movements in reserves
Consolidated
2022 $
(98,955)
1,960,861
1,861,906
2021 $
(156,257)
1,856,689
1,700,432
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2020
Foreign currency translation
Share based payments during the year allocated to:
Employees and consultants
Key Management Personnel
Utilised for share issue
Balance at 30 June 2021
Foreign currency translation
Share based payments during the year allocated to:
Employees and consultants
Key Management Personnel
Utilized for share issue
Foreign
Currency
translation
reserve
$
Share based
payments
reserve
$
Total
$
(65,483)
1,970,286
1,904,803
(90,774)
-
(90,774)
-
-
-
74,904
8,088
74,904
8,088
(196,589)
(196,589)
(156,257)
1,856,689
1,700,432
57,301
-
57,301
-
-
-
134,685
134,685
59,938
(90,450)
59,938
(90,450)
Balance at 30 June 2022
(98,956)
1,960,862
1,861,906
Nature and purpose of reserve
The foreign currency translation reserve records the impact of the movement of the exchange rate as it
relates to the Company’s investment in overseas subsidiaries.
The share-based payments reserve records the value of options or performance rights issued to
employees, consultants and Directors, as part of the remuneration for their services and issued in
consideration for business combinations.
pg 88
Aeris Environmental Ltd Note 21. Equity - accumulated losses
Accumulated losses at the beginning of the financial year
Loss after income tax benefit for the year
Accumulated losses at the end of the financial year
Consolidated
2022 $
(50,663,025)
(7,130,427)
(57,793,452)
2021 $
(44,795,847)
(5,867,178)
(50,663,025)
Note 22. Equity - non-controlling interest
Retained profits
Consolidated
2022 $
3,685
2021 $
3,685
Note 23. Equity - dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
pg 89
Annual Report 2022 Note 24. Earnings per share
Loss after income tax attributable to the owners of Aeris Environmental
Ltd
Weighted average number of ordinary shares used in calculating basic
earnings per share
Weighted average number of ordinary shares used in calculating diluted
earnings per share*
Basic earnings per share
Diluted earnings per share
Consolidated
2022 $
2021 $
(7,130,427)
(5,867,178)
Number
Number
243,957,661
243,104,095
243,957,661
243,104,095
Cents
(2.92)
(2.92)
Cents
(2.41)
(2.41)
Options and performance rights eligible for conversion into ordinary shares in future
Performance rights**
Options over ordinary shares issued subsequent to year-end
Performance rights issues subsequent to year-end**
Number
150,000
550,000
1,068,831
1,768,831
Number
1,011,600
-
-
1,011,600
*Options and rights eligible for conversion into ordinary shares in future have an anti-dilutive effect,
hence diluted EPS is same as basic EPS.
**These performance rights were converted into ordinary shares subsequent to year-end (refer to note
35).
pg 90
Aeris Environmental Ltd Note 25. Options
Set out below are summaries of options granted under the plan:
2022 Unlisted
Grant Date
Expiry Date
Exercise
Price
23/12/2016
23/10/2021
$0.42
2021 Unlisted
Grant Date
Expiry Date
23/12/2016
23/10/2021
30/05/2018
01/03/2021
Exercise
Price
$0.42
$0.01
Balance at
the start of
the year
395,000
395,000
Granted
Exercised
-
-
-
-
Expired/
forfeited/
other
(395,000)
(395,000)
Balance at
the end of
the year
-
-
Balance at
the start of
the year
495,000
100,000
595,000
Granted
Exercised
-
-
-
-
-
-
Expired/
forfeited/
other
Balance at
the end of
the year
(100,000)
395,000
(100,000)
-
(200,000)
395,000
These options do not entitle the holder to participate in any share issue of the Company or any other
body corporate unless the options are exercised prior to the new share issue entitlement date.
These options expire on the earlier of their expiry date or the date of termination of the employee’s
employment, or, in the case of voluntary termination, 90 days after voluntary termination of the
employee’s employment.
pg 91
Annual Report 2022
Note 26. Share-based payments
Recognised share-based payment expenses
The expense recognised for employee services and external consultants during the year is shown in the
table below:
Employee Share Option Plan
Employees and consultant
Key Management Personnel
Total arising from share-based payment transactions
Details of share-based payment plan
Consolidated
2022 $
2021 $
104,173
-
104,173
74,904
8,088
82,992
The share-based payment plan is described in the remuneration report in the Directors’ Report. There
have been no cancellations or modifications to the plan during 2022 and 2021.
Fair value of options or rights granted
The fair value of the options granted under the plan is estimated using the Black-Scholes valuation
methodology taking into account the terms and conditions under which the options are granted. The
fair value of performance rights granted is based on the market price of shares at the date of issue.
pg 92
Aeris Environmental Ltd
Particulars of options or performance rights granted over unissued shares:
Options or rights on issue:
Employees and consultants
Key management personnel*
Options or rights granted during the year:
Employees and consultants
Key management personnel
Shares issued as a result of exercise of options
or rights:
Employees and consultants
Key management personnel
Options
Rights
2022
2021
2022
2021
-
-
-
-
-
-
-
-
-
345,000
50,000
395,000
150,000
-
570,421
441,179
150,000
1,011,600
-
-
-
-
-
-
-
-
-
-
-
-
107,004
441,179
548,183
300,000
882,358
1,182,358
Options or rights expired or forfeited:
Employee and consultants
Key management personnel
Weighted average remaining contractual life
Range of exercise prices
345,000
50,000
395,000
0 years
$0.42
200,000
313,417
18,333
-
-
-
200,000
313,417
18,333
0.32 years
1.07 years
1.04 years
$0.42
-
-
*Robert Waring, who was considered to be a KMP in the previous financial year is now no longer
considered to be a KMP at the start of the 2022 financial year. He was the Company Secretary throughout
the full year ended 30 June 2022.
pg 93
Annual Report 2022
Note 27. Financial instruments
Financial risk management objectives
Capital
The Group considers its capital to comprise its ordinary share capital and accumulated losses.
In managing its capital, the Group’s primary objective is to ensure its continued ability to provide a
consistent return for its equity shareholders through a combination of capital growth and distributions.
In order to achieve this objective, the Group seeks to maintain a sufficient funding base to enable the
Group to meet its working capital and strategic investment needs. In making decisions to adjust its
capital structure to achieve these aims, either through new share issues or debt, the Group considers not
only its short-term position but also its long-term operational and strategic objectives.
Financial instrument risk exposure and management
In common with all other businesses, the Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group’s objectives, policies and processes for managing those risks
and the methods used to measure them.
Further quantitative information in respect of these risks is presented throughout these financial
statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them from
previous periods unless otherwise stated in this note.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risks arise, are as
follows:
•
•
•
•
Cash at bank;
Trade and other receivables;
Deposits and bonds; and
Trade and other payables
pg 94
Aeris Environmental Ltd
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives
and policies and has the responsibility for designing and operating processes that ensure the effective
implementation of the objectives and policies to the Group’s finance function. The Board receives monthly
reports through which it reviews the effectiveness of the processes put in place and the appropriateness
of the objectives and policies it sets.
The overall objective of the board is to set policies that seek to reduce risk as far as possible without
unduly affecting the Group’s competitiveness and flexibility. Further details regarding these policies are
set out below:
(i) Credit risk
Credit risk arises principally from the Group’s trade receivables, cash and term deposits. It is the risk
that the counterparty fails to discharge its obligation in respect of the instrument.
The maximum exposure to credit risk at balance sheet date is as follows:
Trade receivables
R&D tax offset rebate receivable
Deposits and bonds
Deposits with Bankwest
Deposits with Wells Fargo, USA
Deposits with Bank of America, USA
Deposits with ANZ Bank
Consolidated
2022 $
799,451
292,785
21,999
2021 $
1,485,009
-
15,271
5,033,419
10,578,975
-
61,395
208,328
6,417,377
7,826
73,145
824,311
12,984,537
pg 95
Annual Report 2022
(ii) Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and
principal repayments on its debt instruments. It is the risk that the Group will encounter difficulty
in meeting its financial obligations as they fall due.
The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities
when they become due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities)
to meet expected requirements for a period of at least 45 days.
The Board receives cash flow projections on a monthly basis as well as information regarding cash
balances. At the balance sheet date, these projections indicated that the Group expected to have
sufficient liquid resources to meet its obligations under all reasonably expected circumstances.
Maturity analysis of financial assets and liability based on management’s expectations
The risk implied from the values shown in the table below, reflects a balanced view of cash inflows
and outflows. Trade payables and other financial liabilities mainly originate from the financing of
assets used in our ongoing operations such as property, plant, equipment and investments in
working capital (e.g. trade receivables and inventories). These assets are considered in the Group’s
overall liquidity risk.
Maturity analysis - 2022
Financial assets
Cash flows
$
<6 months
$
6-12 months
$
1-3 years
$
>3 years
$
Cash and cash equivalents
5,303,142
5,303,142
Trade and other receivables
R&D tax offset rebate receivable
Security deposits
Financial liabilities
Trade payables
Other payables including GST
and PAYG payable
Net Maturity
799,451
292,785
21,999
799,451
292,785
-
6,417,377
6,395,378
(524,578)
(524,578)
(867,908)
(867,908)
(1,392,486)
(1,392,486)
5,024,891
5,002,892
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,999
21,999
-
-
-
21,999
pg 96
Aeris Environmental Ltd Maturity analysis - 2021
Financial assets
Cash flows
$
<6 months
$
6-12 months
$
1-3 years
$
>3 years
$
Cash and cash equivalents
11,485,616
11,485,616
Trade and other receivables
1,485,009
1,485,009
Security deposits
15,271
-
12,985,896
12,970,625
Financial liabilities
Trade payables
(1,683,461)
(1,683,461)
Other payables and accruals
(654,230)
(654,230)
Lease liabilities*
(318,338)
(38,036)
Net Maturity
(2,656,029)
(2,375,727)
10,329,867
10,594,898
-
-
-
-
-
-
-
-
-
-
-
-
(39,849)
(39,849)
(39,849)
(175,802)
(175,802)
(175,802)
-
-
15,271
15,271
-
-
(64,651)
(64,651)
(49,380)
* Lease liabilities calculated under AASB 16 which is effective from 1 July 2019.
pg 97
Annual Report 2022
(iii) Market risk
Interest rate risk
The Group’s exposure to fluctuations in interest rates that are inherent in financial markets arise
predominantly from assets and liabilities bearing variable interest rates.
The Company’s exposure to interest rate risk and the effective weighted average interest rate for
classes of financial assets and financial liabilities is set out below:
Notes
Weighted
Average
Interest Rates
Floating
Interest
Rates
Fixed
Interest
Rates
Non-
Interest
Bearing
Total
2022
Financial assets
Cash and cash equivalents
Deposits
Trade and other receivables
Total assets
Financial liabilities
8
11
9
0.20%
2.20%
0.00%
5,033,405
-
-
5,033,405
Trade and other payables
14
0.00%
-
2021
Financial assets
Cash and cash equivalents
Deposits
Trade and other receivables
8
11
9
1.00%
2.20%
0.00%
-
-
-
-
-
-
-
-
-
-
269,737
5,303,142
21,999
21,999
1,092,236
1,092,236
1,383,972
6,417,377
(1,392,486)
(1,392,486)
(8,514)
5,024,891
906,653
11,485,616
15,271
15,271
1,485,009
1,485,009
2,406,933
12,985,896
5,033,405
10,578,963
-
-
10,578,963
15, 17
14
4.71%
0.00%
-
-
-
(318,338)
-
(318,338)
-
(2,337,692)
(2,337,692)
(318,338)
(2,337,692)
(2,656,030)
10,578,963
(318,338)
69,241
10,329,866
Total assets
Financial liabilities
Lease liabilities
Trade and other payables
Total liabilities
Net financial assets
pg 98
Aeris Environmental Ltd The following sensitivity analysis is based on the interest rate risk exposure in existence at the
balance sheet date. The analysis assumes all other variables remain constant.
Sensitivity Analysis
Carrying Amount
+2% Interest Rate
Profit or Loss
-1% Interest Rate
Profit or Loss
2022
Deposits on call
Tax charge of 25%
2021
Deposits on call
Tax charge of 26%
Currency risk
5,033,405
-
5,033,405
10,578,963
-
10,578,963
100,668
(25,167)
75,501
211,579
(55,011)
156,568
(50,334)
12,584
(37,750)
(105,790)
27,505
(78,285)
The Group’s policy is, where possible, to allow group entities to settle liabilities denominated
in their functional currency with the cash generated from their own operations in that
currency. Where group entities have liabilities denominated in a currency other than their
functional currency (and have insufficient reserves of that currency to settle them) cash already
denominated in that currency will, where possible, be transferred from elsewhere within the
Group.
The Group’s exposure to foreign currency risk, including inter-company balances which are
eliminated on consolidation, is as follows:
2022
US$
2021
US$
Cash at bank
42,309
61,277
2022
SGD
9,334
2021
SGD
9,334
33,230
116,852
12,500
12,500
2022
Euro
2021
Euro
-
-
-
-
2022
GBP
-
6,556
2021
GBP
-
-
(3,081,489)
(3,052,244)
(5,778)
(5,778)
(7,457)
(5,330)
(87,781)
(3,695)
(3,005,950)
(2,874,115)
16,056
16,056
(7,457)
(5,330)
(81,225)
(3,695)
Trade and other
receivables
Trade and other
payables
Sensitivity analysis on the foreign currency exposure risk is not disclosed as the foreign currency
balances are not material and the impact of any change in exchange rates would be immaterial.
pg 99
Annual Report 2022 Fair value measurement
The carrying amounts of trade and other receivables and trade and other payables are assumed
to approximate their fair values due to their short-term nature. The fair value of financial liabilities
is estimated by discounting the remaining contractual maturities at the current market interest
rate that is available for similar financial liabilities.
Therefore, table detailing the consolidated entity’s assets and liabilities, measured or disclosed at
fair value, using a three level hierarchy, based on the lowest level of input that is significant to the
entire fair value measurement is not required.
Note 28. Key management personnel disclosures
Directors
The following persons were Directors of Aeris Environmental Ltd during the financial year:
Maurie Stang
Steven Kritzler
Abbie Widin
Jenny Harry
Michael Ford - Director until 14 December 2021
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling
the major activities of the consolidated entity, directly or indirectly, during the financial year:
Andrew Just (Chief Executive Officer - appointed on 28 March 2022)
Peter Bush (Chief Executive Officer until 28 March 2022)
Robert Waring, who was considered to be a KMP in the previous financial year is now no longer considered
to be a KMP at the start of the 2022 financial year. He was the Company Secretary throughout the full
year ended 30 June 2022.
pg 100
Aeris Environmental Ltd
Compensation
The aggregate compensation made to Directors and other members of key management personnel of
the consolidated entity is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2022 $
704,465
54,048
59,838
818,351
2021 $
591,170
45,654
8,088
644,912
Further, disclosures relating to key management personnel are set out in remuneration report in the
Directors’ Report.
Note 29. Remuneration of auditors
Remuneration of UHY Haines Norton for -
Audit of the annual financial report
Review of the half yearly financial report
Consolidated
2022 $
2021 $
35,900
19,576
55,476
31,200
16,200
47,400
Note 30. Contingent liabilities
There are no contingent liabilities of the Company or the Group.
Note 31. Commitments for expenditure
Commitments for manufacturing of inventory within 1 year
Consolidated
2022 $
-
2021 $
487,500
pg 101
Annual Report 2022 Note 32. Related party transactions
Parent entity
Aeris Environmental Ltd is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 34.
Key management personnel
Disclosures relating to key management personnel are set out in note 28 and the remuneration report
included in the Directors’ Report.
Transactions with related parties
Disclosures relating to transactions with Directors and Director related entities are set out in the
remuneration report in the Directors’ Report.
Receivable from and payable to related parties
There were trade receivables from and trade payables to related parties at the current and previous
reporting date, which are set out in the remuneration report in the Directors’ Report.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
pg 102
Aeris Environmental Ltd
Note 33. Parent entity information
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital (net of costs)
Accumulated losses
Share-based payment reserve
Net profit (loss) after tax for the period
Total comprehensive loss for the period
Contractual obligations/commitments (refer to 31)
Parent
2022 $
6,936,049
8,086,981
(1,441,009)
(1,441,009)
62,520,725
(57,835,612)
1,960,861
6,645,974
(7,136,271)
(7,078,970)
-
Parent
2021 $
16,107,507
16,548,763
(2,734,030)
(2,961,142)
62,430,275
(50,699,342)
1,856,688
13,587,621
(5,798,371)
(5,889,145)
487,500
Note 34. Interests in subsidiaries - particulars
relating to controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of the following
subsidiaries in accordance with the accounting policy described in note 1:
Name of entity
Aeris Pty Ltd
Aeris Biological Systems Pty Ltd
Aeris Hygiene Services Pty Ltd
Aeris Environmental LLC
Aeris Cleantech Pte Ltd
Aeris Cleantech Europe Ltd
Aeris Environmental (UK) Ltd
Shanghai Aeris Environmental Technology Co., Ltd
Principal place of business /
Country of incorporation
Ownership Interest
2022 %
2021 %
Australia
Australia
Australia
USA
Singapore
Malta
UK
China
100.00%
100.00%
100.00%
100.00%
75.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
75.00%
100.00%
100.00%
-
pg 103
Annual Report 2022 Note 35. Subsequent events
On 15 July 2022, 550,000 options with an exercise price of $0.01 were issued to consultant Tim Fortin for
services performed from June 2021 to January 2022. The options vested on the date of issue and each
option may be exercised from the date of issue at any time up until the expiry date of 15 July 2025.
On 5 August 2022, former CEO Peter Bush was issued 1,068,531 performance rights, with no exercise
price, in accordance with contractual commitments for prior years’ service, which were due to expire (if
not converted) at 5pm on 1 July 2023.
On 2 September 2022, former CEO Peter Bush was issued 1,068,531 shares on the conversion of his
1,068,531 performance rights that were issued on 5 August 2022 and two consultants were issued a total
of 150,000 shares on the conversion of their performance rights that were issued on 9 September 2019.
On 2 September 2022, a contractor was issued 50,000 shares as the result of work completed, issued at
a deemed issue price of $0.05 per share.
There have been no other matters or circumstances, which have arisen since 30 June 2022 that have
significantly affected or may significantly affect:
(a) the operations, in financial years subsequent to 30 June 2022, of the consolidated entity;
(b) the results of those operations; or
(c) the state of affairs, in the financial years subsequent to 30 June 2022, of the consolidated
entity.
Note 36. Reconciliation of loss after income tax to
net cash used in operating activities
Reconciliation of cash
For the purposes of the statement of cash flows, cash includes cash on hand and in banks and investments
in money market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year
as shown in the statement of cash flows is reconciled in the related items in the statement of financial
position as follows:
Cash at bank and on hand
Deposits on call
pg 104
2022
269,737
5,033,405
5,303,142
2021
906,653
10,578,963
11,485,616
Aeris Environmental Ltd Loss after income tax benefit for the year
Adjustments for:
Depreciation and amortisation
Impairment of current assets
Interest on lease liability
Share-based payments
Other adjustments
Change in operating assets and liabilities:
Decrease in trade and other receivables
Decrease/(increase) in inventories
Decrease/(increase) in other operating assets
Decrease in trade and other payables
Increase/(decrease) in employee benefits
Increase in other creditors and accruals
Net cash used in operating activities
Consolidated
2022 $
(7,130,427)
2021 $
(5,867,178)
99,851
1,594,891
7,125
104,172
90,450
156,154
184,101
63,349
(946,301)
(330,721)
-
132,552
1,462,697
16,850
82,992
38,000
3,864,817
(516,038)
(104,988)
(587,000)
99,535
97,823
(6,107,356)
(1,279,938)
Note 37. Additional company information
Aeris Environmental Ltd is a public listed company, incorporated in Australia.
Principal registered office and principal place of business
5/26-34 Dunning Avenue
ROSEBERY
NSW 2018
pg 105
Annual Report 2022 Directors’ Declaration
30 June 2022
pg 106
Aeris Environmental Ltd 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 1 to the financial
statements;
the attached financial statements and notes give a true and fair view of the consolidated entity’s
financial position as at 30 June 2022 and of its performance for the financial year ended on that date;
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
Maurie Stang Sydney
30 September 2022
Non-Executive Chairman
pg 107
Annual Report 2022
Independent Auditor’s
Report
to the members of Aeris Environmental Ltd
pg 108
Aeris Environmental Ltd INDEPENDENT AUDITOR’S REPORT
To the Members of Aeris Environmental Ltd
Report on the Audit of the Financial Report
Opinion
Level 11 | 1 York Street | Sydney | NSW | 2000
GPO Box 4137 | Sydney | NSW | 2001
t: +61 2 9256 6600 | f: +61 2 9256 6611
sydney@uhyhnsyd.com.au
www.uhyhnsydney.com.au
We have audited the financial report of Aeris Environmental Ltd (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
i. giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial
performance for the year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our
audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 of the financial report, which discloses the Group’s ability to continue as a
going concern. The matters described in Note 1 of the Financial Report, indicate a material uncertainty that
may cast doubt on the Group’s ability to continue as a going concern and, therefore, whether it will realise
its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the
financial report. Our opinion is not modified in respect of this matter.
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of UHY International, a network of independent accounting and consulting (cid:386) rms.
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pg 109
Annual Report 2022
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 year. These matters were addressed in the context of our audit of
the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
We have determined the matters described below to be the key audit matters to be communicated in our
report.
PROVISION FOR INVENTORY OBSOLESCENCE
Why a key audit matter
How our audit addressed the risk
As disclosed in Note 10 of the financial
report, the Group recorded an inventory
balance of $1.26 million as at 30 June 2022,
net of provision for obsolescence.
Impairment expense balance of $1.37
million for FY22 is disclosed within Note 6 of
the financial report.
Inventory obsolescence has been identified
as a major risk due to the fact that the
significant amounts of
Group holds
inventory that is obsolete, as most of the
inventory has use by dates and the sales for
these line items are not sufficient to clear
the number of stock items held by the use
by date.
Our procedures included, amongst others:
for
► We discussed with management
the
accounting policies
impairment of
inventory and their procedures for estimating
the provision for impairment and assessed
the appropriateness of these policies
in
accordance with the requirements of the
Australian Accounting Standards.
► Performed
substantive
on
management’s
stock
obsolescence as at 30 June 2022, including
the testing of ageing, the use by date and
forecasted sales.
testing
of
assessment
RECOVERABILITY OF TRADE RECEIVABLES
Why a key audit matter
How our audit addressed the risk
As disclosed in Note 9 of the financial
report,
trade
receivable balance of $0.80 million as at 30
June 2022, net of expected credit losses.
recorded a
the Group
The gross trade receivables balance has
decreased from $1.85 million as at 30 June
Our procedures included, amongst others:
► Reviewed aged debtor listing including long
outstanding receivables and assessed the
recoverability of these through inquiry with
management and by obtaining sufficient
An association of independent (cid:386) rms in Australia and New Zealand and a member
of UHY International, a network of independent accounting and consulting (cid:386) rms.
62
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Passion beyond numbers
pg 110
Aeris Environmental Ltd
2021 to $1.01 million as at 30 June 2022.
The allowance for expected credit losses
has decreased from $0.36 million as at 30
June 2021 to $0.21 million as at 30 June
2022.
Valuation of trade receivables is a key audit
matter due to the size of the trade
receivable balance and the high level of
management
in
judgement
determining
loss
provision.
used
the expected credit
GOING CONCERN
corroborative evidence such as subsequent
receipts etc. to support the conclusions.
► Reviewed management’s allowance
for
calculations and
loss
expected
independently assessed the reasonable of
the amounts provided for.
credit
► Reviewed subsequent credit notes issued to
check for reversal of revenue/receivable.
Why a key audit matter
How our audit addressed the risk
The Group has had a history of making
losses. The net loss after tax for 2022 was
$7.13 million (2021: loss of $5.87 million).
Therefore, there is a risk that the Group may
not have the ability to continue as a going
concern.
At 30 June 2022, the Group had $5.30
million (2021: $11.49 million) of cash in the
bank. The net cash outflow from operating
activities in 2022 was $6.11 million (2021:
outflow of $1.28 million).
A key audit matter is the Group’s ability to
continue as a going concern.
Our audit procedures included, amongst others:
► Assessed the cash flow projections for 15
months from the end of the financial year
ended 30 June 2022.
► Assessed the significant forecast cash flows
including cost reductions executed post 30
June 2022. We used our knowledge of the
Group, its industry and current status of
these initiatives to assess the level of the
associated uncertainty.
► Discussed with management the forecast
cash flows and the cost reductions executed
post 30 June 2022.
the
financial
the Group’s going concern
► Evaluated
disclosures
report by
in
comparing them to our understanding of the
matter,
conditions
events
incorporated into the cash flow projection
assessment, the Group’s plans to address
those events or conditions, and accounting
standards requirements.
the
or
An association of independent (cid:386) rms in Australia and New Zealand and a member
of UHY International, a network of independent accounting and consulting (cid:386) rms.
UHY Haines Norton—ABN 85 140 758 156 NSWBN 98 133 826
Liability limited by a scheme approved under Professional Standards Legislation.
63
Passion beyond numbers
pg 111
Annual Report 2022
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2022, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon, 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 and,
in doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
An association of independent (cid:386) rms in Australia and New Zealand and a member
of UHY International, a network of independent accounting and consulting (cid:386) rms.
UHY Haines Norton—ABN 85 140 758 156 NSWBN 98 133 826
Liability limited by a scheme approved under Professional Standards Legislation.
64
Passion beyond numbers
pg 112
Aeris Environmental Ltd
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats
or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
An association of independent (cid:386) rms in Australia and New Zealand and a member
of UHY International, a network of independent accounting and consulting (cid:386) rms.
UHY Haines Norton—ABN 85 140 758 156 NSWBN 98 133 826
Liability limited by a scheme approved under Professional Standards Legislation.
65
Passion beyond numbers
pg 113
Annual Report 2022
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 24 to 38 of the directors’ report for the year
ended 30 June 2022.
In our opinion, the Remuneration Report of Aeris Environmental Ltd for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Mark Nicholaeff
Partner
Sydney
30 September 2022
UHY Haines Norton
Chartered Accountants
An association of independent (cid:386) rms in Australia and New Zealand and a member
of UHY International, a network of independent accounting and consulting (cid:386) rms.
UHY Haines Norton—ABN 85 140 758 156 NSWBN 98 133 826
Liability limited by a scheme approved under Professional Standards Legislation.
66
Passion beyond numbers
pg 114
Aeris Environmental Ltd
pg 115
Annual Report 2022 Australian Securities
Exchange (ASX) Additional
Information
pg 116
Aeris Environmental Ltd Additional information required by ASX Listing Rule 4.10, and not disclosed elsewhere in this Annual
Report, is detailed below. This information was prepared based on the Company’s Share Registry
information, its Option Register, ASX releases and the Company’s Constitution.
SHAREHOLDING INFORMATION
Distribution of Shareholders
Analysis of the quoted fully paid ordinary shares by holding as at 26 September 2022:
Spread of Holdings
Number of Holders
Ordinary shares
% of Total Issued
Capital
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – 500,000
500,001 – 1,000,000
1,000,001 and over
Total
180
349
229
507
147
25
45
93,304
1,039,034
1,840,945
18,335,413
33,620,820
17,554,138
173,160,897
0.04
0.42
0.75
7.46
13.69
7.15
70.49
1,482
245,644,551
100.00
Based on the market price at 26 September 2022 there were 801 shareholders with less than a
marketable parcel of $500 worth of shares at a share price of $0.04. There are 117,000 shares that are
subject to Company-imposed voluntary escrow.
pg 117
Annual Report 2022 Statement of Shareholdings as at 26 September 2022
The names of the 20 largest holders of fully paid ordinary shares are listed below:
Rank Shareholder
Number of Shares
% Holding
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
National Nominees Limited
J P Morgan Nominees Australia Pty Limited
Maurie Stang
Stang Family Holding Co Pty Ltd
Steven Kritzler
Bernard Stang
Girdis Superannuation Pty Ltd
Potski Pty Ltd
Energy Trading Systems Pty Ltd
Kefford Holdings Pty Ltd
Meditsuper Pty Ltd
Development Management & Constructions Pty Ltd
Seguro Super Pty Ltd
Towns Corporation Pty Ltd
Bennelong Resources Pty Limited
Lotsa Nominees Pty Ltd
Benlee Company Pty Ltd
Dillon Ventures Pty Ltd
Steven Kritzler
BNP Paribas Noms Pty Ltd
18,372,993
16,899,999
15,279,749
11,083,084
8,331,609
6,960,000
6,922,828
6,917,604
5,529,411
4,738,610
4,272,281
4,247,353
4,105,695
3,909,000
3,500,000
3,333,333
3,168,283
3,142,068
2,921,176
2,827,706
7.48
6.88
6.22
4.51
3.39
2.83
2.82
2.82
2.25
1.93
1.74
1.73
1.67
1.59
1.42
1.36
1.29
1.28
1.19
1.15
Total of Top 20 Holdings
136,462,782
Other Holdings
109,181,769
Total Ordinary Shares
245,644,551
55.55
44.45
100.00
pg 118
Aeris Environmental Ltd UNQUOTED EQUITY SECURITIES as at 26 September 2022
For details of the unissued ordinary shares of the Company, refer below and to the “Share Options”
section of the Directors’ Report.
Number
Class – Options
Number of Holders
550,000
Options issued to consultant Timothy Fortin on 15 July 2022, which vested on
the date of issue, and which expire (if not exercised) on 15 July 2025, and have an
exercise price of 1 cent.
550,000
Total Options on Issue
1
1
VOTING RIGHTS
At general meetings of the Company, all fully paid ordinary shares carry one vote per share without
restriction. On a show of hands, every member present at such meetings, or by proxy, shall have one
vote and, upon a poll, each share shall have one vote. Option holders have no voting rights until their
options are exercised into shares.
SUBSTANTIAL SHAREHOLDERS as at 26 September 2022
Substantial shareholders in Aeris Environmental Ltd, based on Substantial Shareholder Notices received
by the ASX and the Company, are as follows:
Name
Maurie Stang
Bernard Stang
Number
Class
Voting Power
23,881,819
Ordinary fully paid shares
20,253,664
Ordinary fully paid shares
Perennial Value Management Limited
19,332,848
Ordinary fully paid shares
ON-MARKET BUY-BACK
There is no current on-market buy-back of shares in the Company.
9.86%
8.36%
7.91%
pg 119
Annual Report 2022 Corporate Directory
pg 120
Aeris Environmental Ltd Aeris Environmental Ltd
093 977 336
ACN:
19 093 977 336
ABN:
Directors
Maurie Stang
Steven Kritzler
Abbie Widin
Jenny Harry
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer
Andrew Just
Company Secretary
Robert Waring
Registered and Principal Office
Unit 5, Level 1, 26-34 Dunning Avenue
Rosebery NSW 2018 Australia
Telephone:
Facsimile:
Email:
Website:
+61 2 8344 1315
+61 2 9697 0944
info@aeris.com.au
www.aeris.com.au
Auditor
UHY Haines Norton Sydney
Level 11, 1 York Street, Sydney NSW 2000
GPO Box 4137, Sydney NSW 2001
+ 61 2 9256 6600
Telephone:
www.uhyhnsydney.com.au
Website:
Share Registry
Computershare Investor Services Pty Ltd
Yarra Falls, 452 Johnston Street, Abbotsford VIC
3067 Australia
GPO Box 2975, Melbourne VIC 3001 Australia
Stock Exchange
The Company’s fully paid ordinary shares are
quoted on the official list of the Australian
Securities Exchange (ASX Limited).
1300 850 505 (within Australia)
+61 3 9415 4000 (outside
Telephone:
Telephone:
Australia)
Facsimile:
Website:
Investor Link: www.investorcentre.com/au
+61 3 9473 2500
www.computershare.com
ASX Code
AEI
pg 121
Annual Report 2022
pg 122
Aeris Environmental Ltd