ANNUAL REPORT
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Chairman and CEO Report
Review of operations
Directors’ Report
Auditor’s Independence Declaration
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
Australian Securities Exchange (ASX)
Additional Information
Corporate Directory
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AERIS ENVIRONMENTAL LTD
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The past 12 months have
seen a very focused effort to
align Aeris with the growing
market opportunity for
energy efficiency and
carbon neutrality.
Dear Shareholders
The past 12 months have seen a very focused effort
to align Aeris with the growing market opportunity
for energy efficiency and carbon neutrality. There is a
rapidly-changing landscape, both domestically and
internationally, which will focus on ‘real world’ outcomes
driven by the measurement, verification and reporting
requirements of both the enterprise and SME markets.
Each product and technology in the Aeris portfolio have
been reviewed and, where necessary, adapted to meet
both the commercial and technical parameters that
customers and distributors have outlined. In parallel,
the Company has acquired certain distribution rights for
products that are strongly aligned with delivering energy
efficiency, improved indoor air quality and an ability to
offer a more comprehensive solution in line with market
demand.
Aeris is driving an initiative called the ‘Energy Alliance’
to work closely with companies that have specific
capabilities to assist the broader community for
companies looking to define their metrics, which is
targeted ahead of the new IFRS reporting standards S1
and S2. It is expected that the Energy Alliance will be
suited to assist companies looking to deliver Scope 2
improvements (sustainability climate-related disclosures),
and each of these Alliance members has both a track
record and a capability that strongly supports the overall
value proposition that Aeris is focused on delivering.
Specifically, many customers and partners will require
a better understanding of energy certificate trading,
and the measurement and verification that will drive
these rebates. HVAC and lighting are two key areas that
will make an ongoing contribution to increased energy
relationships with our customers and distributors. Key
efficiency, and Aeris is participating in an effort to bring
to our plans going forward is the focus on profitable
a hardware agnostic software solution to our customers
recurring revenue to create a viable scaling and attractive
that will underpin not only the improved outcomes, but,
business model. Of critical importance is Aeris’ investment
importantly, the real time reporting capability going
in improving the workflow and profitability of our
forward.
Aeris continues to make investments in China and,
customers globally, whilst in parallel achieving their
environmental and OH&S goals.
as previously announced, a number of well-regarded
Going forward, the Company is now positioned to
Chinese companies have been engaged, both in terms
deliver cost-efficient solutions for enterprise Scope 2
of local manufacturing in China and distribution into
requirements, both domestically and internationally. We
a number of verticals. The companies that we have
are growing our mould remediation business with several
engaged with are well established, and have both scale
new products and technologies, and our team in Australia
and resources to take our value-added products and
has a record forward pipeline of qualified projects.
technologies into the domestic Chinese market. Early
shipments of products have already occurred.
Aeris remains focused on controlling costs, while targeting
increased revenues and margins. The 2023 financial year
A similar opportunity exists in the farm-to-fork value
has seen an increase in sales and a reduction in operating
chain, where the core competencies of energy efficiency
losses, whilst the Company has invested in a range of
and environmental hygiene offer high value to customers.
activities, as outlined in this Annual Report.
Operating system efficiencies, and food hygiene for
enhanced shelf life and quality are significant R&D drivers
to complement our existing product suite.
I take this opportunity to thank both the Aeris team and
our investors for supporting this important ESG focus of
the Company. We look forward to increasing our customer
We have acted on customer and distributor feedback to
base and revenues whilst we deliver industry leading
adapt our products, packaging and pricing to improve
technologies, services and software. Your Company is
our competitive positioning both domestically and
now positioned to meet the demand of a marketplace
internationally. This renewed customer-centric focus
impacted by energy costs and, indeed, requiring a
is expected to facilitate stronger and more successful
measurable move towards sustainability.
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AERIS ENVIRONMENTAL LTD F
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Consistent with the
Company’s focus on energy
efficiency and air quality
in the built environment,
its product portfolio is
now broader and deeper
than prior years, and being
actively designed to address
the needs of this market.
REVIEW OF OPERATIONS
Sector Outlook
The Company is focusing its business to cater for the
growing environmental, social and governance (ESG)
requirements of its enterprise clients, both in Australia and
internationally. Awareness and action on ESG issues are
growing in the business community, with organisations
recognising the social and economic costs of inaction.
The built sector comprises over a third of global energy
consumption, and there is now focused investment into
meeting the challenges of global warming, and energy
and carbon reduction.
Fundamental to enterprise compliance for ESG
performance is the ability to report satisfactorily on the
IFRS S1 and S2 requirements issued in June 2023, which
apply initially to large entities and will be required in
the 2024-25 financial year. These requirements include
mandated reporting for metrics and targets relating to
energy efficiency, and present an opportunity for Aeris
that is uniquely suited to help enterprises respond to the
proposed changes. In China, the government has released
new standards for indoor air quality (IAQ), which Aeris is
working to address as a priority.
Consistent with the Company’s focus on energy
efficiency and air quality in the built environment, its
product portfolio is now broader and deeper than prior
years, and being actively designed to address the needs
of this market.
Finance Performance
Annual revenue for the 2022-23 financial year (FY23)
was $2,110,315 (2022: annual revenue $2,806,835). The
Company made a loss before income tax of $4,028,470
compared to a loss before income tax of $7,423,212 in
the prior year. The loss primarily results from a further
reduction in demand for pandemic-related items. Gross
margins were steady at 53% (improved from 48% in the
June 2022 year), reflecting the proportional revenue shift
away from lower margin products.
The Company’s cash receipts from customers for the
year were $2,721,188 compared to the previous year of
$3,240,986. As at 30 June 2023 Aeris has net assets of
$2,951,081 compared to $6,592,865 on 30 June 2022. Cash
at 30 June 2023 was $2,599,996 compared to $5,303,142
Company acquired certain distribution rights for two
at 30 June 2022. The net cash used in operating activities
key IAQ technologies (AtmosAir and EnviroGuard) and
decreased by $3,524,769. Balance sheet movements
continues to research further technology additions.
included a decrease in trade debtors (net of expected
credit losses) of $403,475.
Heating, Ventilation,
Air-Conditioning and Refrigeration
(HVAC&R)
Aeris is delivering on a twin value proposition of energy
efficiency and IAQ, driven by its HVAC&R range of
products and services. FY23 has been a steady year of
progress for the programs relating to these deliverables,
with numerous funded pilot studies generating positive
outcomes at enterprise client sites. There are clear and
present needs in the built environment sector for site-
based programs that deliver higher operating efficiencies
from current assets and real improvements to air quality.
As the Company’s portfolio of solutions to address these
Enterprise customers in this segment face mounting
reporting requirements with respect to ESG, specifically
the recently issued IFRS S1 and S2 standards. The
changing nature of energy rebate schemes on a state-
by-state basis, along with the forward pricing outlook for
energy, creates the need for a comprehensive solution
provider that can address this evolving landscape.
The S2 standard is being prioritised by the government
and is focused on increasing energy efficiencies, which
aligns with Aeris’ value proposition and the body of
evidence from its site-based studies. Aeris is investing
resources into developing an integrated Energy Alliance
that brings several industry leaders together to provide
a comprehensive solution, including participation in the
development of an innovative software platform.
pressing issues develops, there is a broader scope of
Although the clarity of Scope 3 targets lags that for
opportunities to serve this market. During FY23 the
Scope 1 and 2, with the disclosures required for the
07
AERIS ENVIRONMENTAL LTD 2024-25 reporting period, it is obvious that organisations
for some of Aeris’ hygiene products. As the Company
should be working with their supply chain partners on
progresses its ESG mandate, some of its hygiene products
the environmental profile of manufactured products.
are being repositioned to address mould in the built
Environmental Profile Disclosures (EPDs) are a future
environment. The products and services that are valuable
requirement of supply chains that seek to comply with
for ESG-related activities are now the focal point for the
Scope 3 targets and will affect most enterprise clients.
Aeris portfolio. The Company has updated its market-
This is another strength of the Aeris portfolio, as the
leading hard surface disinfectant, Aeris Defence, which
Company’s products have a more environmentally-
continues to have a unique TGA registration of 24 hours of
friendly profile than many of its competitors.
residual kill protection against viruses, mould and bacteria,
Aeris is now able to assess a commercial building or
enterprise from the perspective of its overall energy and
IAQ profile, provide recommendations on how to reduce
overall energy consumption and improve air quality,
and implement product and service programs to drive a
consistent and sustainable improved ESG performance.
The Aeris HVAC&R portfolio is now broader in scope and
able to deliver on the needs of the built environment
sector as it develops its sustainability programs.
Environmental Hygiene
The Company’s fiscal year was impacted with the
overstocking by customers, particularly in relation to
PPE and hygiene products, which led to limited demand
including COVID-19. This latest formulation of Aeris
Defence will soon be available in a range of presentations,
such as disinfectant wipes, which show increasing
demand by customers.
Specialty Products and Services
The Company has a highly-regarded team of specialists
based in Queensland who have built a very solid
reputation in the mould remediation sector. The
core capability of site assessment and remediation
protocol design is now relied upon by multiple leading
companies, such as Grosvenor Engineering Group and the
Queensland Government. This service offering has grown
steadily over the past year, and unlocks the adjacent
product markets related to IAQ and mould remediation.
REVIEW OF OPERATIONS
Arising from Aeris’ proactive investment in research
To support the Aeris brand in China, the Company’s
and development (R&D), the Company now has an
wholly foreign-owned enterprise (WFOE) has successfully
increasing range of proprietary products, such as
registered multiple products in its own name (Aeris
Corrosion Protection Plus, which are highly focused on
Defence®, Actisan®, Aeris Protect®, Purox®) with China’s
meeting customer needs, and which Aeris believes to be
National Health Commission. This allows the Company
commercially attractive. This improved range of specialty
the ability to work with a variety of partners to cover
products addresses an attractive market opportunity for
promotion more effectively for different provinces.
the Company, with a focus on developing the original
Aeris’ contract manufacturing partners have provided
equipment manufacturer (OEM) market in the United
assistance with the registration process and are actively
States of America (USA).
International Markets
Through the course of the year, Aeris has applied
increasing resources to developing its international
markets, including China and the USA. These
international markets have a differing focus for near-term
product opportunities.
engaged in the market development activities. These
partners also enable the Company to compete more
effectively in a market that has speed and cost of supply
as critical sales factors.
China, in the near term, provides opportunities for a
range of consumable products, such as Aeris’ paper
technologies, where a competitive advantage can
be gained in the premium segment. In parallel, the
Company is developing its HVAC&R solutions in the
The Company has now secured contract manufacturing
Chinese market, which offer energy efficiencies and ESG-
agreements with three Chinese entities (two of which are
driven outcomes that appear to be increasingly aligned
publicly-listed companies), to better access the markets
available for Aeris technologies. Strong partnerships are
to domestic policy in China. Two product registrations
have been completed (Bioactive Surface Treatment®
essential for successful market development in China, in
and Bioactive Filter Treatment®), and early market
order to gain the promotional and logistical resources to
development work is underway.
access the domestic Chinese market. The partner entities
Aeris is working with are substantial companies with
experienced management teams and strong track records
of growth, covering multiple market segments.
It has been recognised by these groups that Aeris can
provide higher value and a point of differentiation to
its competitors. The Company’s distribution partners
provide important access across multiple verticals and
In the USA Aeris continues to focus on the HVAC&R
OEM corrosion protection market. This market has a
complex sales cycle due to the rigorous process of
introducing changes to production processes. Key
customers are now working to trial and implement the
Aeris Corrosion Protection solutions, and, once adopted,
the Company believes this could result in ongoing
annuity revenues. Trials are progressing according to
diversification in its China supply chain. Aeris proprietary
plan at installations in Texas, California and New Jersey
paper treatment technology is a key area where the
Company is collaborating with partners on products
specifically targeted at the local market. Strategically,
with several OEMs. Aeris’ corrosion protection products
retain their market-leading performance attributes of
world-leading salt test performance, and excellent heat
Aeris technology will provide a value-add component to
transfer and thermal properties.
existing products manufactured by these entities, and
elsewhere, the Company and its partners are combining
R&D expertise to develop novel products with Aeris and
partner branding. This development of premium products
in the Chinese market is driven by demand from the
Company’s partner entities that are seeking to invest in
higher margin products as part of their growth planning.
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AERIS ENVIRONMENTAL LTD Australia
Summary
In Australia the Company’s focus is on customers’ ESG
Aeris has been addressing the operational and strategic
needs, specifically on aiming for carbon neutrality and
changes required by the Company arising from the
meeting the growing reporting requirements of its
landscape post the COVID-19 pandemic. The Company
enterprise customers. Aeris has invested considerable
has addressed its cost base and priorities together
time and resources in understanding the “pain points”
with a substantial investment in the acquisition of new,
and challenges that its enterprise customers have. This
complementary technologies, and updated existing
activity is further supported by the initiative of the Energy
products in line with distributor and customer feedback.
Alliance, which offers highly-regarded expertise in energy
trading certificates, measurement and verification, and a
range of technologies that seek to improve both energy
efficiency and environmental hygiene.
It is widely accepted that not only enterprise customers,
but a wide range of SMEs will be required to provide
measurement and verification of their efforts to
demonstrate improvements in energy efficiency and
The strengthening of the Company’s expanded product
carbon neutrality. Environmental hygiene has also taken
range has been driven by its R&D focus, together with
a position of increased focus, as companies are required
developing strategic distribution agreements for products
to meet their obligations in terms of duty of care to their
that complement its proprietary HVAC&R range. Two
staff, customers and visitors.
Aeris has moved in a highly-focused way to assemble
solutions that will address these various needs of the built
environment. It is anticipated that an increasing number
of customers will find challenges in meeting both their
reporting and improvements to baseline energy goals,
and Aeris is clearly positioning itself as a comprehensive
and integrated solutions provider.
current examples are EnviroGuard and AtmosAir, active
air quality protection technologies that can be deployed
into small and large indoor environments. Now businesses
and organisations can implement world-class levels of
improved energy efficiency, air quality and environmental
hygiene to support employers’ duty of care requirements
in providing sustainable and healthy workplaces. The
Company’s IAQ solutions also offer real time air quality
monitoring, which will become one of the environmental
measures for healthy buildings.
In 2024 many Australian companies will commence ESG
reporting per the recent IFRS S2 requirements (issued in
June 2023), with energy efficiency metrics and targets
forming a large component of this reporting activity.
Aeris has an energy renovation program that delivers
efficiencies from in-situ assets, providing customers with
a solution to assess, plan and deliver energy efficiencies
with their current asset base. As the enterprise ESG
requirements grow, the Company’s broad set of solutions
will continue to be developed through both local and
global partnerships.
REVIEW OF OPERATIONS
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The Directors of Aeris Environmental Ltd submit herewith
the Annual Report for the financial year ended 30 June
2023. In order to comply with the provisions of the
Corporations Act 2001, the Directors’ Report is as follows:
Directors
The Directors of Aeris Environmental Ltd at the date of this
report are:
Maurie Stang Non-Executive Chairman
Steven Kritzler Non-Executive Director
Abbie Widin
Non-Executive Director
Jenny Harry
Non-Executive Director
All Directors served on the Board for the period 1 July
2022 to 30 June 2023.
Aeris has moved in a highly-focused
way to assemble solutions that will
address these various needs of the
built environment.
11
AERIS ENVIRONMENTAL LTD The names and details of the Directors, Chief Executive
Officer 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
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
Directorship of other listed companies held in the
last three years: Non-Executive Chairman of Nanosonics
Limited (ASX:NAN) until 1 July 2022 (Deputy Chairman
from 1 July 2022 until 18 November 2022).
Non-Executive Deputy Chairman of Vectus Biosystems
Limited (ASX:VBS) since December 2005.
Steven Kritzler
NON-EXECUTIVE DIRECTOR
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 (Australia)
Pty Ltd. Mr Kritzler has over 40 years of experience in
commercial R&D in the areas of pharmaceutical, medical,
cosmetic and speciality industrial products. Under his
technical direction, Novapharm Research has become a
world-leader in infection control science.
Director since: 24 July 2002
Abbie Widin
NON-EXECUTIVE DIRECTOR
Dr Widin, PhD (Physiology, Univ. Sydney), Diploma of
Business Administration (AGSM), GAICD, is a Non-Executive
Director of Aeris Environmental Ltd (ASX:AEI). She has over
20 years’ experience in global consumer goods, consulting
and proptech. Dr Widin has held various marketing,
commercial and international management roles in both
private and public companies, such as Procter & Gamble
(Australia and Europe) and Kellogg (Asia Pac). She is an
owner of companies supplying facade management and
soft services to the commercial real estate market. Dr
Widin has strengths in go-to-market 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
Jenny Harry
NON-EXECUTIVE DIRECTOR
Dr Harry (PhD GAICD) was appointed as a Director in
April 2021. She is a graduate of the Harvard Business
School General 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 pharmaceutical 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
Directorship of other listed companies held in the
a Non-Executive Director of Neuren Pharmaceuticals
last three years: None
Limited (ASX: NEU) and ACM Biolabs Pty Ltd 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.
DIRECTORS’ REPORT 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
Andrew Just
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 competencies with leading Fortune 500
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
Directorship of 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 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 company secretarial roles for ASX-listed 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).
Appointed: 25 July 2002
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AERIS ENVIRONMENTAL LTD 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.
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
Abbie Widin
Jenny Harry
8
8
3
7
8
4
4
-
-
4
1
1
-
-
1
2
2
-
-
2
In addition, the Board has a Disclosure Committee and
The Disclosure Committee is composed of not less than
a Related Parties Committee, to meet as and when
three members, one of whom is a Non-Executive Director,
required. Both the Disclosure Committee and the Related
and normally also includes the Chairman. The Chair of the
Parties Committee met a number of times during the
Committee is elected by the members at each meeting.
2022-23 financial year. Update, sales and strategy
meetings were also attended by some or all Directors
during the financial year.
Committee Membership
Principal activities
The principal activities of the consolidated entity during
the course of the financial year were:
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
•
research, development, commercialisation of
proprietary technologies and global distribution of
HVAC/R Hygiene, anti-corrosion and disinfectant
products;
Board of Directors. Members acting on the Committees of
•
provision of HVAC/R Hygiene and Remediation
the Board during the financial year are:
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.
Audit and Risk Committee
Jenny Harry (Chair) and Maurie Stang
Corporate Governance Committee
Jenny Harry (Chair) and Maurie Stang
Remuneration and Nomination Committee
Jenny Harry (Chair) and Maurie Stang
Related Parties Committee
Abbie Widin (Chair) and Jenny Harry
DIRECTORS’ REPORT REVIEW OF
OPERATIONS
The results of the operations of the consolidated entity during the financial year were as follows:
2023
$
2022
$
Change
$
Change
%
Income
2,110,315
2,806,835
(696,520)
(24.82)
Expenses - net of income tax benefit
(5,764,058)
(9,937,262)
4,173,204
Loss after income tax
(3,653,743)
(7,130,427)
3,476,684
42.00
48.76
The Company’s Review of Operations commences on page 6 of this report.
Dividends
The Directors do not recommend the payment of a
Likely developments and expected
results of operations
dividend in respect of the year ended 30 June 2023 (2022:
Disclosure of information other than that disclosed
Nil). No dividends have been paid or declared since the
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.
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
There have been no matters or circumstances, which have
arisen since 30 June 2023 that have significantly affected
or may significantly affect:
(a) the operations, in financial years subsequent to 30
June 2023, of the consolidated entity; or
(b) the results of those operations;
(c) the state of affairs; in the financial years subsequent to
30 June 2023, of the consolidated entity.
15
AERIS ENVIRONMENTAL LTD 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
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.
of being a Director of the Company except where there is
The Company was not a party to any such proceedings
lack of good faith.
during the financial year.
During or since the financial year, the Company has
agreed to indemnify the Auditor UHY Haines Norton, to
the extent permitted by law.
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.
DIRECTORS’ REPORT DIRECTORS’
INTERESTS
The results of the operations of the consolidated entity during the financial year were as follows:
Equity holdings
Ordinary shares
Rights over ordinary shares
Maurie Stang
Steven Kritzler
23,698,288
11,252,785
34,951,073
Particulars of options or rights granted
over unissued shares
Number of options or rights on issue over unissued ordinary shares
2023
700,000
Shares issued in the period as the result of the exercise of options or rights
1,218,531
Options or rights expired or forfeited during the period
-
-
-
-
2022
150,000
548,183
708,417
Full details of options or rights on issue are shown in note 24 and 25.
1,918,531
1,406,600
Non-audit services
Auditor’s independence declaration
There were no non-audit services provided during the
The Auditor’s Declaration of Independence for the year
financial year by the auditor.
ended 30 June 2023 is on page 29.
Officers of the company who are
former audit partners of UHY Haines
Norton
Corporate Governance
Aeris Environmental Ltd’s Corporate Governance
Statement and ASX Appendix 4G are released to ASX
There are no Officers of the Company who are former
on the same day the Annual Report is released. The
audit partners of UHY Haines Norton.
Company’s Corporate Governance Statement, and its
Auditors
UHY Haines Norton continues in office in accordance with
section 327 of the Corporations Act 2001.
Corporate Governance Compliance Manual, can be found
on the Company’s website at:
https://www.aeris.com.au/investors
17
AERIS ENVIRONMENTAL LTD REMUNERATION
REPORT (AUDITED)
of personal and corporate objectives. The short and
long-term incentive plans are specifically aligned to
shareholder interests.
Key Management Personnel (KMP)
The KMP of the Company comprise the Directors and
Chief Executive Officer only, as follows:
Non-Executive Directors
The Directors of Aeris Environmental Ltd at the date of this
report are:
• Maurie Stang
•
Steven Kritzler
• Abbie Widin
•
Jenny Harry
Executive
Andrew Just (Chief Executive Officer)
PRINCIPLES USED TO
DETERMINE THE
NATURE AND AMOUNT
OF REMUNERATION
Remuneration policies
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.
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 were paid 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 determined in earlier
years in conjunction with advice from external advisors
in reference to fees paid to Non-Executive Directors of
comparable companies. No external report was received
in the 2023 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
Details of Aeris’ remuneration policies and practices,
all main Board activities and membership of Committees
together with details of Directors’ and Executives’
of the Board. This may be re-assessed if Directors sit on
remuneration, are as follows:
a) Overview of remuneration structure
The objective of the Company’s executive reward
more than one Committee. From 1st January 2023, in
addition to the Non-Executive Director fee, Jenny Harry
was remunerated $12,000 for duties performed as Chair
of the following Committees: Audit and Risk Committee,
framework is to ensure that reward for performance is
Corporate Governance Committee and Remuneration and
competitive and appropriate for the results delivered.
Nomination Committee. Abbie Widin was remunerated
Processes have been established to ensure that the levels
$4,000 for duties performed as Chair of the Related
of compensation and remuneration are sufficient and
Parties Committee. While it is recognised that various
reasonable, and explicitly linked to the achievement
organisations recommend that Non-Executive Directors
DIRECTORS’ REPORT do not receive performance-related compensation, in
f) Share-based compensation
the case of Aeris Environmental Ltd, 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
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
The objective of Aeris’ executive reward system is to
or performance rights,
ensure that remuneration for performance is competitive
33.3% vest on the second anniversary of grant of
and appropriate for the results delivered. Executive pay
options or performance rights; and
structures include a base salary and superannuation. In
33.4% vest on the third anniversary of grant of options
addition, executives and senior managers can participate
or performance rights.
in the Employee Share Option Plan.
d) Short-term incentives (STI)
During the financial year ended 30 June 2023 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
•
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.
executive’s overall remuneration to shareholder value over
•
Each option or performance right is convertible into
a longer term. Equity grants are subject to performance
one fully paid ordinary share.
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 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.
•
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
During the financial year ended 30 June 2023 no amounts
or when the performance rights have been converted
were paid as LTIs to KMPs.
into fully paid ordinary shares.
•
The options or performance rights issued are on an
equity-settled basis. There are no cash settlement
alternatives.
19
AERIS ENVIRONMENTAL LTD 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:
2023 Ordinary shares
SPECIFIED DIRECTORS
Maurie Stang
Steven Kritzler
Abbie Widin
Jenny Harry
SPECIFIED EXECUTIVES
Andrew Just
2022 Ordinary shares
SPECIFIED DIRECTORS
Maurie Stang
Steven Kritzler
Michael Ford
Abbie Widin
Jenny Harry
SPECIFIED EXECUTIVES
Peter Bush (CEO until 28 March
2022)
Balance at
the start of
the year
Received
as part of
remuneration
Additions
Disposals/
other
23,698,288
11,252,785
-
-
34,951,073
-
-
34,951,073
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
the start of
the year
Received
as part of
remuneration
Additions
Disposals/
other
23,698,288
11,252,785
75,000
-
-
35,026,073
1,632,358
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
441,179
-
441,179
441,179
-
-
-
-
-
-
-
-
-
-
Balance at
the end of
the year
23,698,288
11,252,785
-
-
34,951,073
-
-
34,951,073
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
Andrew Just (Joined 28 March 2022)
-
1,632,358
36,658,431
DIRECTORS’ REPORT 2023 Options and rights
SPECIFIED DIRECTORS
Maurie Stang
Steven Kritzler
Abbie Widin
Jenny Harry
SPECIFIED EXECUTIVES
Andrew Just
Balance at
the start of
the period
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other Equity Holdings Transactions
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 after 1 July 2023
add (refer to Note 24).
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 after 5 August 2022 add (refer to Note 24).
2022 Options and rights
SPECIFIED DIRECTORS
Maurie Stang
Steven Kritzler
Michael Ford
Abbie Widin
Jenny Harry
SPECIFIED EXECUTIVES
Peter Bush (CEO until 28 March
2022)
Andrew Just (Joined 28 March 22)
Balance at
the start of
the period
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21
AERIS ENVIRONMENTAL LTD 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 2023.
Regional Health Care Group Pty Ltd
The Company and its controlled entities incur expenses for services provided by
Regional Health Care Group Pty Ltd
2023
$
2022
$
Office and administration expenses
117,772
174,340
Insurance expenses
Rent
Distribution expenses
Corporate expenses
The Company and its controlled entities transacted with Regional Health Care
Group Pty Ltd as customer for:
Sale of goods and administrative charges
Sales returns
Mr M Stang is a Director and Shareholder of Regional Health Care Group Pty Ltd
Regional Corporate Services Pty Ltd
The Company and its controlled entities incur expenses for services provided
by Regional Corporate Services Pty Ltd
Office and administration expenses
Insurance expenses
Rent
Distribution expenses
Mr M Stang is a Director and Shareholder of Regional Corporate Services Pty Ltd
12,137
23,436
48,524
62,352
1,613
63,678
36,034
88,261
21,521
85,253
-
(152,398)
2023
$
2022
$
27,820
75,314
4,126
5,978
-
-
-
-
DIRECTORS’ REPORT 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
Patent and other expenses
The Company and its controlled entities transacted with Novapharm Research (Australia)
Pty Ltd and invoiced them for providing supply chain functions
2023
$
2022
$
190,356
353,137
15,436
26,001
4,136
54,071
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
2023
$
2022
$
25,311
24,113
2023
$
5,150
2022
$
17,317
450
18,982
2023
$
199
2022
$
2,720
The Company and its controlled entities transacted with Teknik Lighting Solutions Pty Ltd
-
1,705
Mr M Stang is a Shareholder of Teknik Lighting Solutions Pty Ltd
Vectus Biosystems Limited
The Company and its controlled entities incur expenses for accounting services
provided by Vectus Biosystems Limited
The Company and its controlled entities provided accounting services to Vectus
Biosystems Limited
Mr M Stang is a Director and Shareholder of Vectus Biosystems Limited
2023
$
11,832
2022
$
-
-
24,552
23
AERIS ENVIRONMENTAL LTD Gryphon Capital Pty Ltd
The company and its controlled entities provided marketing services and sold products
to Gryphon Capital Pty Ltd
M Stang is director and shareholder of Gryphon Capital Pty Ltd.
Stangcorp Pty Ltd
The company and its controlled entities sold products to Stangcorp Pty Ltd
Outstanding balances payable from purchase of services
Regional Health Care Group Pty Ltd - for purchase of services
2023
$
9,479
2023
$
363
2023
$
1,613
Regional Health Care Group Pty Ltd - for refund owing from credits due to sales returns
100,465
Regional Corporate Services Pty Ltd
Novapharm Research (Australia) Pty Ltd
Ramlist Pty Ltd
Ensol Systems Pty Ltd
Teknik Lighting Solutions Pty LTd
Vectus Biosystems Limited
Gryphon Capital Pty Ltd
Stangcorp Pty Ltd
Outstanding balances receivable for sales and
services provided
Regional Healthcare Group Pty Ltd
Novapharm Research (Australia) Pty Ltd
Ensol Systems Pty Ltd
Teknik Lighting Solutions Pty Ltd
Vectus Biosystems Limited
Gryphon Capital Pty Ltd
Stangcorp Pty Ltd
23,148
28,050
1,347
-
127
2,442
-
-
2023
$
-
5,483
-
-
-
-
-
2022
$
-
2022
$
174
2022
$
39,192
112,517
-
98,352
-
1,761
-
-
-
-
2022
$
-
5,364
-
54
12,916
-
-
DIRECTORS’ REPORT 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.
Short-term benefits
Post-
employment
benefits
Termination
payments
Equity based
benefits
Salary &
Director’s
fees
$
STI Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Options
& rights
(Note (ii))
$
Shares
$
$
2023
NON-EXECUTIVE DIRECTORS:
Maurie Stang
Steven Kritzler
Abbie Widin
Jenny Harry
Executives
(Note i)
Andrew Just
81,448
54,299
56,150
59,854
283,461
535,212
-
-
-
-
-
-
-
-
-
-
-
-
8,552
5,701
5,896
6,285
26,403
52,837
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
90,000
60,000
62,046
66,139
309,864
588,049
25
AERIS ENVIRONMENTAL LTD Short-term benefits
Post-
employment
benefits
Termination
payments
Equity based
benefits
Salary &
Director’s
fees
$
STI Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Options
& rights
(Note (ii))
$
Shares
$
$
2022
NON-EXECUTIVE DIRECTORS:
Maurie Stang
Steven Kritzler
Michael Ford
(Resigned 14
December
2021)
Abbie Widin
Jenny Harry
Executives
(Note i) Peter
Bush (Resigned
28 March
2022)*
Andrew Just
(Joined 28
March 2022)
81,818
54,545
26,453
54,565
54,565
223,724
68,750
564,420
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,182
5,455
1,261
5,456
5,456
-
-
-
-
-
22,346
140,045
5,892
-
54,048
140,045
-
-
-
-
-
-
-
-
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.
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 data 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 restate as market conditions were
already included in the valuation.
DIRECTORS’ REPORT EXECUTIVE
EMPLOYMENT
Chief Executive Offer (CEO):
The following sets out the key terms of employment for the CEO, Andrew Just:
Term:
Continuous employment until notice is given by either party
Fixed remuneration:
$302,500 inclusive of superannuation.
This fixed remuneration is reviewed annually.
The remuneration for the 2023 financial year also includes an amount of $7,364 inclusive
of superannuation which was an advance payment due to successful completion of
probation period.
Notice period:
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: All unvested short term or long-
term benefits are forfeited.
All vested but unexercised benefits are forfeited 90 days following cessation of
employment.
Statutory entitlements:
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.
Termination for serious
Aeris may immediately terminate employment at any time in the case of serious
misconduct:
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.
Post-Termination Restraint
For a period of 12 months or, if that period is unreasonable, 6 months after the
of Trade:
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)
interefere 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 31 to the financial statements.
27
AERIS ENVIRONMENTAL LTD Link between remuneration and performance
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.
2023
$
2022
$
2021
$
2020
$
2019
$
Profit (Loss) for the year attributable to owners
of Aeris Environmental Ltd
(3,653,743)
(7,130,427)
(5,867,178)
1,982,941
(3,628,499)
Basic earnings (loss) per share (cents per share)
(1.49)
(2.92)
(2.41)
Increase/(decrease) in share price (%)
(47.92)%
(68.00)%
(71.42)%
Total KMP remuneration as percentage of
profit (loss) for the year (%)
(16.09)%
(10.47)%
(10.99)%
0.90
70.97%
23.07%
(1.98)
121.43%
(13.51)%
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 2023 (2022: nil options and performance rights).
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.
Peter Bush, who was considered to be a KMP in the previous financial year, ceased to be the CEO (and hence a KMP) on 28
March 2022.
No options issued to KMP expired or were forfeited during the years 2023 and 2022.
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
28 September 2023
Non-Executive Chairman
DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE
DECLARATION
FOR THE YEAR ENDED 30 JUNE 2023
Level
9
| 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 2023, 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
28 September 2023
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.
Passion beyond numbers
29
AERIS ENVIRONMENTAL LTD
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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
General information
31
32
33
34
35
72
73
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:
Unit 5, Level 1, 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 28
September 2023. The Directors have the power to amend
and reissue the financial statements.
FINANCIAL STATEMENTS
STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Note
2023
$
2022
$
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
Loss after income tax benefit for the year attributable to the
owners of Aeris Environmental Ltd
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
Total comprehensive loss for the year attributable to the owners
of Aeris Environmental Ltd
Basic earnings per share
Diluted earnings per share
5
6
6
6
6
6
6
6
7
20
23
23
2,110,315
2,806,835
(442,206)
(636,100)
(1,552,561)
(2,598,526)
(117,387)
(99,851)
(426,517)
(1,594,891)
(47,936)
(12,457)
(982,660)
(1,472,176)
(450,751)
(329,364)
(263,862)
(571,255)
(699,275)
(432,497)
(1,525,541)
(2,113,019)
(4,028,470)
(7,423,212)
374,727
292,785
(3,653,743)
(7,130,427)
17,079
17,079
57,301
57,301
(3,636,664)
(7,073,126)
Cents
(1.49)
(1.49)
Cents
(2.92)
(2.92)
The above statement of profit and loss and other comprehensive income should be read in conjunction with the
accompanying notes.
31
AERIS ENVIRONMENTAL LTD STATEMENT OF
FINANCIAL POSITION
AS AT 30 JUNE 2023
Note
2023
$
2022
$
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
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Reserves
Accumulated losses
Equity attributable to owners of Aeris Environmental Ltd
Non-controlling interest
Total equity
8
9
10
11
12
13
14
15
16
17
18
19
20
2,599,996
688,761
882,417
300,174
5,303,142
1,092,236
1,262,798
310,401
4,471,348
7,968,577
92,306
106,970
199,276
109,255
-
109,255
4,670,624
8,077,832
1,483,791
1,392,486
62,378
120,999
-
92,481
1,667,168
1,484,967
52,375
52,375
-
-
1,719,543
1,484,967
2,951,081
6,592,865
62,520,726
62,520,726
1,883,769
1,861,906
(61,453,414)
(57,793,452)
2,951,081
6,589,180
-
3,685
2,951,081
6,592,865
The above statement of profit and loss and other comprehensive income should be read in conjunction with the
accompanying notes.
FINANCIAL STATEMENTS STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
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/(loss) 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 25)
-
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
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Non-
controlling
interest
$
Total equity
$
Balance at 1 July 2022
62,520,726
1,861,906
(57,793,452)
3,685
6,592,865
Loss after income tax benefit for the year
Other comprehensive income for the year,
net of tax
Total comprehensive income/(loss) for the year
-
-
-
-
(3,653,743)
17,079
17,079
-
(3,653,743)
-
-
-
(3,653,743)
17,079
(3,636,664)
Transactions with owners in their capacity as owners:
Disposal of Investment in Aeris Cleantech
Pte Ltd (note 20 and 33)
Share-based payments (note 19 and 25)
-
-
-
-
(6,219)
(3,685)
(9,904)
4,784
4,784
-
-
(6,219)
(3,685)
4,784
(5,120)
Balance at 30 June 2023
62,520,726
1,883,769 (61,453,414)
-
2,951,081
The above statement of changes in equity should be read in conjunction with the accompanying notes.
33
AERIS ENVIRONMENTAL LTD STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to supplier (inclusive of GST)
R&D tax offset rebate received
Interest received
Interest and other finance costs paid
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant and equipment
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
Note
2023
$
2022
$
35
12
2,721,188
3,240,986
(5,771,359)
(9,343,010)
441,774
-
(2,608,397)
(6,102,024)
32,624
(6,814)
-
(5,332)
(2,582,587)
(6,107,356)
(72,967)
(72,967)
(63,826)
(63,826)
(64,671)
(64,671)
(68,595)
(68,595)
(2,720,225)
(6,239,777)
5,303,142
11,485,616
17,079
57,303
Cash and cash equivalents at the end of the financial year
8
2,599,996
5,303,142
The above statement of cash flows should be read in conjunction with the accompanying notes.
FINANCIAL STATEMENTS NOTES TO THE
FINANCIAL
STATEMENTS
30 JUNE 2023
Note 1. Significant accounting policies
Corporate information
The financial report of Aeris Environmental Ltd (the
Group) for the year ended 30 June 2023 was authorised
for issue in accordance with a resolution of the Directors
on 28 September 2023
Going concern
The Group made a loss before income tax for the financial
year ended 30 June 2023 of $4,028,470 (2022 loss before
income tax of $7,423,212). The Group’s cash outflow for
the financial year ended 30 June 2023 was $2,720,225
(2022 cash outflow of $6,239,777).
The Group held cash as at 30 June 2023 of $2,599,996
compared to $5,303,142 as at 30 June 2022.
The above matters may give rise to a material uncertainty
that may cast significant doubt over the Group’s ability to
continue as a going concern. Therefore the Group may
be unable to realise its assets and discharge its liabilities
Aeris Environmental Ltd (the parent) is a company limited
in the normal course of business at the amounts stated in
by shares incorporated in Australia whose shares are
the financial report. However, the Directors believe that
publicly listed on the Australian Stock Exchange (ASX
the Group will be able to continue as a going concern
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
due to the following mitigating factors in relation to the
material uncertainty.
The Directors have prepared detailed cash flow
projections for the period of 12 months from the
date of signing this Report. The sales outlook for the
Company is markedly improved from previous year,
No new or amended Accounting Standards were
with a conservative sales budget still yielding significant
applicable to the Group for the current financial year.
growth. Several new products are slated to be introduced.
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, however management will
However, the Group is dependent on capital raisings
to continue to operate. The Group has investigated the
funding options including a capital raise in 2024. Further,
in the event of the Group not raising sufficient funds to
meet its current cash flow forecasts, the Group will need
to further reduce its expenditure accordingly to be able to
pay its debts as and when they are due.
continue to assess closer to the application dates.
Consequently, the Group’s financial statements have been
Statement of compliance
prepared on a going concern basis, which contemplates
the realisation of assets and satisfaction of liabilities
Australian Accounting Standards set out accounting
and commitments in the normal course of business.
policies that the AASB has concluded would result
The consolidated financial statements do not include
in a financial report containing relevant and reliable
any adjustments relating to the recoverability and
information about transactions, events and conditions.
classification of recorded asset amounts or the amounts
Compliance with Australian Accounting Standards
and classification of liabilities should the Group be unable
ensures that the financial statements and notes also
to continue as a going concern.
comply with International Financial Reporting Standards.
35
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’).
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
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.
through other comprehensive income, investment
The acquisition of subsidiaries is accounted for using the
properties, certain classes of property, plant and
acquisition method of accounting. A change in ownership
equipment and derivative financial instruments.
interest, without the loss of control, is accounted for as
Critical accounting estimates
an equity transaction, where the difference between the
consideration transferred and the book value of the share
The preparation of the financial statements requires
of the non-controlling interest acquired is recognised
the use of certain critical accounting estimates. It
directly in equity attributable to the parent.
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 32.
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 Environmental Ltd less any
impairment charges.
Principles of consolidation
Significant accounting policies
The consolidated financial statements incorporate
the assets and liabilities of all subsidiaries of Aeris
Environmental Ltd (‘company’ or ‘parent entity’) as at 30
June 2023 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
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.
FINANCIAL STATEMENTS Foreign currency translation
Revenue recognition
The functional and presentation currency of Aeris
The consolidated entity recognises revenue as follows:
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
Sale of goods and disposal of assets
The group manufactures and sells a range of products that
enhances the performance, longevity, cost-effectiveness,
and energy efficiency of systems which contributes to
the creation of a more sustainable built environment
via the wholesaler market. Sales are recognised when
All foreign currency transactions during the financial year
control of the products has transferred, being when the
are brought to account using the exchange rate in effect
products are delivered to the wholesaler, the wholesaler
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
has full discretion over the channel and price to sell
the products, and there is no unfulfilled obligation that
could affect the wholesaler’s acceptance of the products.
Delivery occurs when the products have been shipped
to the specific location, the risks of obsolescence and loss
have been transferred to the wholesaler and either the
wholesaler has accepted the products in accordance with
the sales contract, the acceptance provisions have lapsed
or the group has objective evidence that all criteria for
acceptance have been satisfied.
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
position presented are translated at the closing rate at
recognised only to the extent that the expenses incurred
the date of that balance sheet;
are eligible to be recovered.
•
Income and expenses for each statement of profit or
Government grants
loss are translated at average exchange rates; and
Grants from the government are recognised at their fair
value where there is a reasonable assurance that the
•
All resulting exchange differences are recognised as a
grant will be received and the Group will comply with all
separate component of equity.
attached conditions.
On consolidation, exchange difference arising from the
Government grants related to costs are deferred and
translation of any net investment in foreign entities, and of
recognised in the income statement over the period
borrowings and other financial instruments designated as
necessary to match them with the costs that they are
hedges of such investments, are recognised in the foreign
intended to compensate.
currency translation reserve. When a foreign operation is
sold or any borrowings forming part of the net investment
Interest income
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.
Interest income is recognised as it is accrued using the
effective interest rate method.
Other income
Other income is recognised as it is earned.
37
AERIS ENVIRONMENTAL LTD Income tax
financial position based on current and non-current
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.
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
The amount of deferred tax provided is based on the
Cash and cash equivalents comprise cash on hand, cash
expected manner of realisation or settlement of the
in banks, investments in money market instruments and
carrying amount of assets and liabilities, using tax rates
short-term deposits with a maturity of three months or
enacted or substantively enacted at the balance sheet date.
less, net of outstanding bank overdrafts.
A deferred tax asset is recognised only to the extent that
Trade and other receivables
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 33. The head entity recognises
all of the current and deferred tax assets and liabilities
of the tax consolidated group (after elimination of
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.
intragroup transactions).
Inventories
Current and non-current classification
Inventories and raw materials are carried at the lower of
cost and net realisable value. Costs are assigned on first in
Assets and liabilities are presented in the statement of
first out basis.
FINANCIAL STATEMENTS Financial assets
Interest
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
Interest is classified as an expense consistent with the
balance sheet classification of the related debt or equity
instruments.
through profit or loss. They are subsequently measured
Depreciation
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
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.
or have been transferred and the consolidated entity
Depreciation and amortisation are calculated on a straight
has transferred substantially all the risks and rewards of
line basis so as to write off the net cost or other revalued
ownership.
amount of each asset over its expected useful life.
The following estimated useful lives are used in the
calculation of depreciation.
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
Computer equipment
Computer software
Field equipment
Office furniture
Plant and equipment
2-3 years
4 years
2-3 years
5 years
2-3 years
6 years
instruments, derivatives are also categorised as fair
Leasehold improvements
value through profit or loss. Fair value movements are
Field equipment under finance lease
2-3 years
recognised in profit or loss.
Available-for-sale financial assets
The residual values, useful lives and depreciation methods
are reviewed, and adjusted if appropriate, at each
Available-for-sale financial assets are non-derivative
reporting date.
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
Leasehold improvements are depreciated over the
unexpired period of the lease or the estimated useful life
of the assets, whichever is shorter.
income through the available-for-sale reserve in equity.
An item of property, plant and equipment is derecognised
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.
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
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.
are taken to profit or loss.
Research and development
Research and development costs are expensed in the
period in which they are incurred. Development costs
are capitalised as an intangible asset, only if the following
criteria are met:
39
AERIS ENVIRONMENTAL LTD •
when it is probable that the project will be a success
These financial liabilities include the following items:
considering its commercial and technical feasibility;
Trade payables and other short-term monetary
•
•
•
the consolidated entity is able to use or sell the asset;
liabilities, which are initially recognised at fair value and
subsequently carried at amortised cost using the effective
the consolidated entity has sufficient resources; and
interest method.
intent to complete the development and its costs can
be measured reliably.
Lease liabilities are initially recognised at fair value net of
any transaction costs directly attributable to the issue of
Development expenditure that do not meet the
the instrument and subsequently carried at amortised
criteria above are recognised as an expense as incurred.
cost using the effective interest method.
Capitalised development costs are amortised on a straight-
line basis over the period of their expected benefit.
Impairment of assets
Development costs previously recognised as an expense
At each reporting date, the company reviews the carrying
are not recognised as an asset in a subsequent period.
amounts of its tangible and intangible assets to determine
Right-of-use assets
whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists,
A right-of-use asset is recognised at the commencement
the recoverable amount of the asset is estimated in order
date of a lease. The right-of-use asset is measured at
to determine the extent of the impairment loss (if any).
cost, which comprises the initial amount of the lease
Where the asset does not generate cash flows that are
liability, adjusted for, as applicable, any lease payments
independent from other assets, the company estimates
made at or before the commencement date net of
the recoverable amount of the cash-generating unit to
any lease incentives received, any initial direct costs
which the asset belongs.
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.
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
Right-of-use assets are depreciated on a straight-line basis
is recognised in profit or loss immediately, unless the
over the unexpired period of the lease or the estimated
relevant asset is carried at fair value, in which case the
useful life of the asset, whichever is the shorter. Where the
impairment loss is treated as a revaluation decrease.
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.
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
The consolidated entity has elected not to recognise a
would have been determined had no impairment loss
right-of-use asset and corresponding lease liability for
been recognised for the asset (cash-generating unit) in
short-term leases with terms of 12 months or less and
prior years. A reversal of an impairment loss is recognised
leases of low-value assets. Lease payments on these assets
in profit or loss immediately, unless the relevant asset
are expensed to profit or loss as incurred.
Financial liabilities
is carried at fair value, in which case the reversal of the
impairment loss is treated as a revaluation increase.
The Group classifies its financial liabilities as measured
Trade and other payables
at amortised cost. The Group does not use derivative
Trade payables and other accounts payable are
financial instruments in economic hedges of currency or
recognised when the consolidated entity becomes
interest rate risk.
obliged to make future payments resulting from the
FINANCIAL STATEMENTS purchase of goods and services. Trade accounts payable
classified as a financial liability measured at amortised
are normally settled within 30 days.
cost (net of transaction costs) until it is extinguished on
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
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.
guarantees, exercise price of a purchase option when the
Provisions
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
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
right-of-use asset, or to profit or loss if the carrying amount
of the consideration required to settle the present
of the right-of-use asset is fully written down.
Borrowings and convertible notes
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
Loans and borrowings are initially recognised at the fair
settle the present obligation, its carrying amount is the
value of the consideration received, net of transaction
present value of those cash flows.
costs. They are subsequently measured at amortised
cost using the effective interest method if the impact is
material to the financial report.
Employee benefits
Short-term employee benefits
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
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
41
AERIS ENVIRONMENTAL LTD future payments to be made in respect of services
Fair value is measured using the assumptions that market
provided by employees up to the reporting date using
participants would use when pricing the asset or liability,
the projected unit credit method. Consideration is given
assuming they act in their economic best interests.
to expected future wage and salary levels, experience of
For non-financial assets, the fair value measurement is
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.
Share-based payment
Share-based compensation benefits are provided to
employees via the Aeris Environmental Ltd Employee
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.
Option Plan. Information relating to these schemes is set
For recurring and non-recurring fair value measurements,
out in note 25.
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
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
fair value is measured at grant date and recognised
one period to another, an analysis is undertaken, which
over the period during which the employees become
includes a verification of the major inputs applied in the
unconditionally entitled to the options.
latest valuation and a comparison, where applicable, with
The fair value at grant date is independently determined
using a Black-Scholes option pricing model. At each balance
Recoverable amount of non-current assets
external sources of data.
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.
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.
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.
Share capital
Financial instruments issued by the Group are treated
as equity only to the extent that they do not meet the
FINANCIAL STATEMENTS definition of a financial liability. The Group’s ordinary
Ltd, excluding any costs of servicing equity other than
shares are classified as equity instruments. Any transaction
ordinary shares, by the weighted average number of
costs associated with the issuing of shares are deducted
ordinary shares outstanding during the financial year,
from share capital.
adjusted for bonus elements in ordinary shares issued
The Group is not subject to any externally imposed
capital requirements.
Diluted earnings per share
during the financial year.
Business combinations
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into
The acquisition method of accounting is used to account
account the after income tax effect of interest and other
for business combinations regardless of whether equity
financing costs associated with dilutive potential ordinary
instruments or other assets are acquired.
The consideration transferred is the sum of the
acquisition-date fair values of the assets transferred, equity
shares and the weighted average number of shares
assumed to have been issued for no consideration in
relation to dilutive potential ordinary shares.
instruments issued or liabilities incurred by the acquirer
Goods and Services Tax (‘GST’) and other similar
to former owners of the acquiree and the amount of any
taxes
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
Revenues, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is
recognised as part of the cost of 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 taxation authority
is included in other receivables or other payables in the
statement of financial position.
pre-existing fair value is less than the fair value of the
Cash flows are presented on a gross basis. The GST
identifiable net assets acquired, being a bargain purchase
components of cash flows arising from investing or
to the acquirer, the difference is recognised as a gain
financing activities which are recoverable from, or
directly in profit or loss by the acquirer on the acquisition-
payable to the taxation authority, are presented as
date, but only after a reassessment of the identification
operating cash flows.
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.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the
profit attributable to the owners of Aeris Environmental
43
AERIS ENVIRONMENTAL LTD Note 2. Critical accounting
judgements, estimates and
assumptions
The preparation of the financial statements requires
management to make judgements, estimates and
assumptions that affect the reported amounts in the
financial statements. Management continually evaluates
its judgements and estimates in relation to assets,
liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements 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
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.
from other sources. Actual results may differ from these
Provision for impairment of inventories
estimates under different assumptions and conditions.
The provision for impairment of inventories assessment
Management has identified the following critical
accounting policies for which significant judgements,
estimates and assumptions are made. Actual results may
differ from these estimates under different assumptions
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.
and conditions and may materially affect financial results
Estimation of useful lives of assets
or the financial position reported in future periods.
The consolidated entity determines the estimated
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 judgements 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.
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.
FINANCIAL STATEMENTS Recovery of deferred tax assets
Note 3. Financial risk management
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
The Group’s activities expose it to a variety of financial
risks; market risk (including currency 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
prevailing market rates; incurrence of significant penalties;
contracts during the year.
existence of significant leasehold improvements; and the
costs and disruption to replace the asset. The consolidated
Credit risk
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.
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.
45
AERIS ENVIRONMENTAL LTD 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 2023 the most significant client accounts for approximately 9% (2022: 15%) of the
consolidated entity’s external revenue through Australian Sales and Services operating segment. There are no customers
who individually amounted to more than 10% or more of the total revenue during 2023 and no other customers above 10%
for 2022.
FINANCIAL STATEMENTS Operating segment information of the consolidated entity
2023
Revenue
Sales
Other income
Total Revenue
Expenses
Cost of goods sold
Operating expenses
Total Expenses
Australia
$
International
$
Intersegment
eliminations
$
Consolidated
$
1,909,750
172,140
2,081,890
148,010
89,702
237,712
(127,615)
1,930,145
(81,672)
180,170
(209,287)
2,110,315
(1,016,870)
(93,405)
127,615
(982,660)
(5,006,500)
(983,450)
833,825
(5,156,125)
(6,023,370)
(1,076,855)
961,440
(6,138,785)
Profit (Loss) before tax
(3,941,480)
(839,143)
752,153
(4,028,470)
2022
Revenue
Sales
Other income
Total Revenue
Expenses
Cost of goods sold
Operating expenses
Total Expenses
2,520,769
155,699
2,676,468
188,776
11,063
199,839
(69,472)
2,640,073
-
166,762
(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)
Profit (Loss) before tax
(7,715,373)
(941,293)
1,233,454
(7,423,212)
47
AERIS ENVIRONMENTAL LTD Segment assets and liabilities
Australia
International
Total
Assets
2023
Assets
2022
Liabilities
2023
Liabilities
2022
5,730,308
9,082,505
4,491,270
2,436,327
1,310,039
1,866,865
5,155,667
6,454,193
7,040,347
10,949,370
9,646,937
8,890,520
Intersegment elimination
(2,369,723)
(2,871,538)
(7,927,394)
(7,405,553)
Consolidated
4,670,624
8,077,832
1,719,543
1,484,967
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
2023
Australia
2022
International
2023
International
2022
1,909,750
2,520,769
148,010
188,776
(127,615)
(69,472)
-
-
Revenue from external customers
1,782,135
2,451,297
148,010
188,776
Timing of revenue recognition
At a point in time
Over time
Note 5. Revenue
Revenue from contracts with customers
Revenue from sales
Revenue from services
Other Revenue
Financial income
Other income
Revenue
1,262,705
1,782,756
148,010
188,776
519,430
706,601
-
-
1,782,135
2,489,357
148,010
188,776
Consolidated
2023
$
2022
$
1,410,715
1,933,472
519, 430
706,601
1,930,145
2,640,073
35,699
144,471
180,170
4,445
162,317
166,762
2,110,315
2,806,835
FINANCIAL STATEMENTS Note 6. Expenses
Profit (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
Total employment benefits expenses
Finance costs
Consolidated
2023
$
2022
$
-
63,902
53,485
981
59,607
39,263
117,387
99,851
1,321,022
2,120,948
195,427
352,751
4,784
31,328
64,381
60,446
1,552,561
2,598,526
Interest, bank fees and other financial expenses
47,936
12,457
Administration
Compliance cost
Corporate and Overheads
Insurance
IT and Maintenance
Total administration
Other expenses
Impairment of receivables
Impairment of inventory
Rental & occupancy expenses
Research and development and patent expenses
1,245,272
1,769,870
78,066
139,183
63,020
94,677
147,332
101,140
1,525,541
2,113,019
121,004
305,513
263,862
442,206
145,646
1,365,000
432,498
636,100
49
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
Numerical reconciliation of income tax benefit and tax at the statutory rate
Profit (Loss) for year
Income tax expense (benefit) at the Australian tax rate of 25%
Impact of overseas tax rates
R&D tax offset receivable - Current year
R&D tax offset receivable - Prior year adjustment
Consolidated
2023
$
2022
$
(374,727)
(292,785)
(374,727)
(292,785)
(4,028,470)
(7,423,212)
(1,007,118)
(1,855,803)
(38,422)
-
(230,000)
(148,816)
(292,785)
-
Temporary differences and tax losses not recognised
918,015
1,653,436
Other permanent differences
Share based payments
R&D Expenditure
1,196
16,095
130,418
186,273
Income tax expense (benefit) attributable to profit (loss)
(374,727)
(292,785)
The enacted corporate tax rates across all jurisdictions are as follows:
• Australia
• UK
25%
25%
• USA (Including state taxes) 29.99%
FINANCIAL STATEMENTS Deferred tax balances not recognised
Calculated at current tax rates and not brought to account assets or liabilities: which may be realised in future years:
Tax rate has been used for the calculation given the majority of the operations are in Australia. The tax rates that applied to
the UK and Australian entities were 25% and the US entity was 29.99%.
Deferred tax assets
Tax losses
Australian Tax Revenue Losses
Unused Australian tax losses for which no deferred tax asset has been recognised
potential tax benefit @ 25%
US Tax Revenue Losses
Unused US tax losses for which no deferred tax asset has been recognised potential tax
benefit @ 29.99%
UK Tax Revenue Losses
Unused UK tax losses for which no deferred tax asset has been recognised potential tax
benefit @ 25%
Consolidated
2023
$
2022
$
34,724,034
31,382,188
8,681,008
7,845,547
4,121,808
3,891,833
1,236,130
1,167,161
9,309
2,327
-
-
Revenue tax losses available for offset against future taxable income (tax effected)
9,919,465
9,012,708
Temporary differences
Provision for doubtful debts
Provision for inventory impairment
Provision for employee entitlements
Difference between book and tax values of fixed assets
Accruals
Future lease obligations
Total deferred tax assets
Deferred tax liabilities
Right of use assets
Total deferred tax liabilities
81,158
53,589
744,518
639,000
30,250
8,494
13,250
28,688
40,260
(7,308)
132,145
-
906,358
857,686
10,825,823
9,870,394
(26,743)
(26,743)
-
-
Net deferred tax asset not recognised
10,799,080
9,870,394
51
AERIS ENVIRONMENTAL LTD 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
2023
$
2022
$
136,575
269,737
2,463,421
5,033,405
2,599,996
5,303,142
The carrying amount of the Group’s cash balances are a reasonable approximation of their fair values.
Note 9. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
R&D tax offset rebate receivable
Consolidated
2023
$
2022
$
783,391
1,013,805
(324,630)
(214,354)
458,761
799,451
230,000
292,785
688,761
1,092,236
The carrying amounts of the Group’s receivables are a reasonable approximation of their fair values.
FINANCIAL STATEMENTS
Allowance for expected credit losses
For the 2023 and 2022 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:
Expected credit loss rate
Carrying amount
Allowance for expected
credit losses
Consolidated
Current < 60 days
Past due > 60 days
2023
%
-
-
2022
%
-
-
Past due > 90 days
72.80
39.69
2023
$
302,169
35,314
445,908
2022
$
324,829
148,855
540,121
2023
$
-
-
2022
$
-
-
324,630
214,354
783,391
1,013,805
324,630
214,354
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
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provision recognised
Unused amounts reversed
Closing balance
Note 10. Current assets - Inventories
Inventories - at cost
Less: Provision for impairment
Consolidated
2023
$
-
2022
$
-
324,630
214,354
(10,728)
-
(110,276)
-
195,646
(50,000)
214,354
110,276
360,000
50,000
-
(195,646)
324,630
214,354
Consolidated
2023
$
2022
$
3,743,930
3,818,798
(2,861,513)
(2,556,000)
882,417
1,262,798
The carrying amounts of the Group’s inventories are a reasonable approximation of their fair values.
53
AERIS ENVIRONMENTAL LTD Note 11. Current assets - other
Prepayments
Deposits, bonds and other receivables
Consolidated
2022
$
288,402
21,999
2023
$
285,985
14,189
300,174
310,401
The carrying amount of the Group’s other current assets are a reasonable approximation of their fair values.
Note 12. Non-current assets - property, plant and equipment
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
Consolidated
2023
$
2022
$
138,093
130,228
(131,461)
(130,228)
6,632
-
187,474
187,474
(182,879)
(162,801)
4,595
24,673
325,983
347,393
(318,283)
(318,736)
7,700
28,657
139,709
133,595
(132,882)
(130,789)
6,827
2,806
51,647
(51,647)
-
54,974
(44,352)
10,622
72,351
(16,421)
55,930
51,647
(51,647)
-
40,773
(32,367)
8,406
50,762
(6,049)
44,713
92,306
109,255
FINANCIAL STATEMENTS Reconciliations
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 2021
Additions
Computer
equipment
$
Leasehold
improvements
$
Office
furniture
$
Plant and
equipment
$
R&D
equipment
$
Software
$
Total
$
35,351
15,881
981
-
4,838
50,136
14,711
-
106,017
-
-
-
47,945
63,826
Depreciation expense
(22,575)
(981)
(2,032)
(25,463)
(6,305)
(3,232)
(60,588)
Balance at 30 June 2022
28,657
2,806
24,673
8,406
44,713
109,255
-
-
-
7,865
6,114
-
-
-
-
-
-
-
(504)
14,201
21,589
50,781
-
-
(3,324)
(1,233)
(2,093)
(20,078)
(11,985)
(10,372)
(63,902)
Exchange differences
Additions
Disposals
Depreciation expense
Balance at
30 June 2023
(504)
1,012
(3,324)
(18,141)
7,700
6,632
6,827
4,595
10,622
55,930
92,306
Note 13. Non-current assets - right-of-use assets
Land and buildings - right-of-use
Less: Accumulated depreciation
Reconciliations
Consolidated
2022
$
-
-
-
2023
$
160,455
(53,485)
106,970
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 2021
Disposals
Depreciation expense
Balance at 30 June 2022
Additions
Depreciation expense
Balance at 30 June 2023
Refer to note 17 for further information on lease liabilities.
Right-of-use
asset
$
Total
$
295,036
295,036
(255,773)
(255,773)
(39,263)
(39,263)
-
160,455
(53,485)
-
160,455
(53,485)
106,970
106,970
55
AERIS ENVIRONMENTAL LTD Note 14. Current liabilities - trade and other payables
Trade payables
GST and PAYG payable
Accrued expenses
Consolidated
2022
$
524,577
35,288
832,621
2023
$
687,515
6,043
790,233
1,483,791
1,392,486
Refer to note 26 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 liabilities
Consolidated
2023
$
62,378
2022
$
-
Refer to note 17 for further information on non-current lease liabilities and note 26 for further information on financial
instruments.
Note 16. Current liabilities - provisions
Annual leave
Long service leave
Consolidated
2022
$
83,016
9,465
92,481
2023
$
109,997
11,002
120,999
The carrying amounts of the Group’s provisions are a reasonable approximation of their fair values.
Note 17. Non-current liabilities - lease liabilities
Lease liabilities
Refer to note 26 for further information on financial instruments.
Consolidated
2023
$
52,375
2022
$
-
FINANCIAL STATEMENTS Particulars relating to lease liabilities
The Group has recognised ‘Right-of-Use Asset’ and an associated ‘Lease Liability’ in the 2023 financial year for the office space
leased in Townsville and Sydney following AASB 16 for accounting of leases. During the year ended 30 June 2023, a new lease
was signed for an office space in Townsville and renewed its lease in Sydney. Following this decision, the ‘Right-of-Use Asset’
is disclosed in note 13 and the current lease liability is disclosed in note 15.
The financial statements show the following amounts relating to leases:
Depreciation
Interest expense (included in finance cost)
Value of Right-of-Use asset
Expense relating to short-term leases (included in occupancy expenses)
Total cash flows for leases
Note 18. Equity - issued capital
2023
$
2022
$
53,485
10,219
106,970
-
64,671
39,263
10,160
-
39,263
72,630
2023
Shares
2022
Shares
Consolidated
2023
$
2022
$
Ordinary shares - fully paid
245,644,551
244,376,020
62,520,726
62,520,726
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Movements in ordinary share capital of Aeris Environmental Ltd
Date
Shares
Issue Price
$
Balance - no par value
1 July 2021
243,827,837
Shares issued on conversion of performance rights
Shares issued to consultants and advisors
441,179
107,004
Balance - no par value
30 June 2022
244,376,020
Shares issued on conversion of performance rights*
Shares issued to consultants and advisors**
1,068,531
200,000
62,430,276
37,500
52,950
62,520,726
-
-
0.08
0.49
0.00
0.00
Balance - no par value
30 June 2023
245,644,551
62,520,726
*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.
**On 2 September 2022, a contractor was issued 50,000 shares with no exercise price as the result of work completed. The
number of shares to be issued were calculated using a deemed price of 0.05 per share. Two other consultants were also
issued a total of 150,000 shares with no exercise price on the conversion of their performance rights that were issued on 9
September 2019.
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.
57
AERIS ENVIRONMENTAL LTD Share buy-back
There is no current on-market share buy-back.
Note 19. Equity - reserves
Share-based payments reserve
Foreign currency translation reserve
Movements in reserves
Consolidated
2023
$
2022
$
1,965,645
1,960,861
(81,876)
(98,955)
1,883,769
1,861,906
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2021
Foreign currency translation
Share based payments during the year allocated to:
Employees and consultants
Key Management Personnel
Utilized for share issue
Balance at 30 June 2022
Foreign currency translation
Share- based
payments
$
Foreign
currency
translation
$
Total
$
1,856,688
(156,256)
1,700,432
-
57,301
57,301
134,685
59,938
(90,450)
-
-
-
134,685
59,938
(90,450)
1,960,861
(98,955)
1,861,906
-
17,079
17,079
Share based payments during the year allocated to:
Employees and consultants
4,784
-
4,784
Balance at 30 June 2023
1,965,645
(81,876)
1,883,769
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.
FINANCIAL STATEMENTS Note 20. Equity - accumulated losses
Accumulated losses at the beginning of the financial year
Loss after income tax benefit for the year
Disposal of investment in Aeris Cleantech Pte Ltd
Consolidated
2023
$
2022
$
(57,793,452)
(50,663,025)
(3,653,743)
(7,130,427)
(6,219)
-
Accumulated losses at the end of the financial year
(61,453,414)
(57,793,452)
Please refer to Singapore entity closure in note 33.
Note 21. Equity - non-controlling interest
Retained profits (see Note 33)
Note 22. Equity - dividends
Consolidated
2023
$
-
2022
$
3,685
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 23. Earnings per share
Consolidated
2023
$
2022
$
Loss after income tax attributable to the owners of Aeris Environmental Ltd
(3,653,743)
(7,130,427)
Weighted average number of ordinary shares used in calculating basic earnings per share
245,422,124
243,957,661
Number
Number
Weighted average number of ordinary shares used in calculating diluted earnings
per share*
245,422,124
243,957,661
Basic earnings per share
Diluted earnings per share
Cents
(1.49)
(1.49)
Cents
(2.92)
(2.92)
59
AERIS ENVIRONMENTAL LTD Options and performance rights eligible for conversion into ordinary shares in future
Performance rights over ordinary shares to Consultants
Options over ordinary shares to Consultants
Performance rights over ordinary shares to KMP**
Number
Number
150,000
550,000
150,000
550,000
-
1,068,831
700,000
1,768,831
*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 in 2023 financial year (see note 25).
There were no options over ordinary shares issued subsequent to year-end 2023.
Note 24. Options and performance rights
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.
On 21 December 2022, 150,000 performance rights with a nil exercise price were issued to consultant Bruce Davison as
partial payment for R&D services provided. 33% of the performance rights will vest on 10 October 2023, 33% on 10 October
2024 and the final 34% on 10 October 2025.
Note 25. 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
Details of share-based payment plan
Number
Number
4,784
4,784
104,173
104,173
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 2023 and 2022.
FINANCIAL STATEMENTS Fair value of options or performance 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.
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 or rights expired or forfeited:
Employees and consultants
Key management personnel
Options
Rights
2023
2022
2023
2022
550,000
-
550,000
550,000
-
550,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
345,000
50,000
395,000
150,000
150,000
-
-
150,000
150,000
150,000
1,068,531
1,218,531
150,000
1,068,531
1,218,531
-
-
-
-
-
-
107,004
441,179
548,183
313,417
-
313,417
Weighted average remaining contractual life
2.04 years
0 years
3.48 years
1.07 years
Weighted average range of exercise prices
$0.01
$0.42
-
-
*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.
These were issued in 2023 financial year however the service requirements were in prior years and the expense related to
those has been recognised in prior years.
On 21 December 2022, 150,000 performance rights with a nil exercise price were issued to consultant Bruce Davison as
partial payment for R&D services provided. 33% of the performance rights will vest on 10 October 2023, 33% on 10 October
2024 and the final 34% on 10 October 2025.
**Peter Bush, who was considered to be a KMP in the previous financial year, ceased to be the CEO (and hence a KMP) on 28
March 2022.
61
AERIS ENVIRONMENTAL LTD Note 26. 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
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:
FINANCIAL STATEMENTS (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 Wise, USA
Deposits with Bank of America, USA
Deposits with ANZ Bank
Deposits with Bank of China, China
Consolidated
2022
$
799,451
292,785
21,999
2023
$
458,761
230,000
9,310
2,463,421
5,033,419
48,844
5,448
67,413
14,870
-
61,395
208,328
-
3,298,067
6,417,377
63
AERIS ENVIRONMENTAL LTD (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, however see going concern section per note 1 for further comments.
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 - 2023
Financial assets
Undiscounted
Cash flows
$
< 6 months
$
6 - 12
months
$
1-3 years
$
>3 years
$
Carrying
values
$
Cash and cash equivalents
2,599,996
2,599,996
Trade and other receivables
458,761
458,761
R&D tax offset rebate receivable
230,000
230,000
Security deposits
Financial liabilities
Trade payables
Other payables including GST
and PAYG payable
14,189
-
3,302,946
3,288,757
(687,519)
(687,519)
(796,276)
(796,276)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Lease liabilities
(123,657)
(30,390)
(30,390)
(62,877)
(1,607,452)
(1,514,185)
(30,390)
(62,877)
-
-
-
2,599,996
458,761
230,000
14,189
14,189
14,189
3,302,946
-
-
-
-
(687,519)
(796,276)
(114,753)
(1,598,548)
Net Maturity
1,695,494
1,774,572
(30,390)
(62,877)
14,189
1,704,398
FINANCIAL STATEMENTS Maturity analysis - 2022
Financial assets
Undiscounted
Cash flows
$
< 6 months
$
6 - 12
months
$
1-3 years
$
>3 years
$
Carrying
values
$
Cash and cash equivalents
5,303,142
5,303,142
Trade and other receivables
799,451
799,451
R&D tax offset rebate receivable
292,785
292,785
Security deposits
21,999
-
6,417,377
6,395,378
Financial liabilities
Trade payables
Other payables including GST
and PAYG payable
(524,578)
(524,578)
(867,908)
(867,908)
(1,392,486)
(1,392,486)
Net Maturity
5,024,891
5,002,892
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,303,142
799,451
292,785
21,999
21,999
21,999
6,417,377
-
-
-
(524,578)
(867,908)
(1,392,486)
21,999
5,024,891
65
AERIS ENVIRONMENTAL LTD (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:
2023
Financial assets
Cash and cash equivalents
Deposits
Trade and other receivables
Total assets
Financial liabilities
Trade and other payables
Lease liabilities
Total liabilities
2022
Financial assets
Cash and cash equivalents
Deposits
Trade and other receivables
Total assets
Financial liabilities
Weighted
Average
Interest Rates
Floating
Interest
Rates
Notes
Fixed
Interest
Rates
Non-Interest
Bearing
Total
8
11
9
1.25%
2,599,996
0.00%
0.00%
-
-
2,599,996
14
13, 15
0.00%
7.22%
-
-
-
-
-
-
-
-
-
2,599,996
14,189
14,189
688,761
688,761
702,950
3,302,946
(1,483,792)
(1,483,792)
(114,753)
-
(114,753)
(114,753)
(1,483,792)
(1,598,545)
2,599,996
(114,753)
(780,842) 1,704,401
Weighted
Average
Interest Rates
Floating
Interest
Rates
Notes
Fixed
Interest
Rates
Non-Interest
Bearing
Total
8
11
9
0.20%
5,033,405
2.20%
0.00%
-
-
5,033,405
-
-
-
-
-
-
-
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)
(1,392,486)
(1,392,486)
(8,514) 5,024,891
Trade and other payables
14
0.00%
Total liabilities
-
-
5,033,405
The following sensitivity analysis is based on the interest rate risk exposure in existence at the balance sheet date. The
FINANCIAL STATEMENTS analysis assumes all other variables remain constant.
Sensitivity analysis
Carrying
Amount
+2% Interest rate
Profit or Loss
-1% Interest rate
Profit or Loss
2023
Deposits on call
Tax charge of 25%
Total assets
2022
Deposits on call
Tax charge of 25%
Total assets
Currency risk
2,463,421
-
2,463,421
5,033,405
-
5,033,405
49,268
(12,317)
36,951
100,668
(25,167)
75,501
(24,634)
6,159
(18,475)
(50,334)
12,584
(37,750)
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 is exposed to currency risk in relation to the translation of the ultimate parent entity’s net investments in foreign
operations to its functional currency of Australian dollars. This translation is recognised directly in equity. The analysis below
demonstrates the impact on equity of a 10% strengthening or weakening against the AUD dollar of the major currencies to
which the Group is exposed through its net investments in foreign operations. The basis for the sensitivity calculation is the
Group’s actual residual exposure at the balance date of 7% plus movement in currency of 3%.
Exposure
Currency
Balance in
denominated
currency
2023
Balance in
functional
currency Sensitivity
Equity
Change
Balance in
denominated
currency
2022
Balance in
functional
currency Sensitivity
Equity
Change
US Dollar
(3,108,291)
(4,682,056)
10% 425,641
(2,587,128)
(3,754,211)
10% 341,292
Chinese
Yuan
Euro
GBP
4,737,589
983,749
10% (89,432)
-
-
(7,457)
(12,227)
(70,822)
(135,098)
10%
10%
1,112
12,282
(7,457)
(11,308)
(12,490)
(22,017)
10%
10%
10%
-
1,028
2,002
There are no foreign currency balances held in the parent entity.
67
AERIS ENVIRONMENTAL LTD 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 27. 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
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 (CEO)
•
Peter Bush, who was considered to be a KMP in the previous financial year, ceased to be the CEO (and hence a KMP) on 28
March 2022.
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
2023
$
535,212
52,837
-
588,049
818,351
Further, disclosures relating to key management personnel are set out in remuneration report in the Directors’ Report.
FINANCIAL STATEMENTS Note 28. Remuneration of auditors
Remuneration of UHY Haines Norton for -
Audit of the annual financial report
Review of the half yearly financial report
Note 29. Contingent liabilities
Consolidated
2023
$
2022
$
60,000
24,278
84,278
35,900
19,576
55,476
There are no contingent liabilities identified as at balance date 30 June 2023 (2022 contingent liabilities nil).
Note 30. Commitments for expenditure
There are no commitments for expenditure identified as at balance date 30 June 2023 (2022 commitments for expenditure nil).
Note 31. Related party transactions
Parent entity
Aeris Environmental Ltd is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 33.
Key management personnel
Disclosures relating to key management personnel are set out in note 27 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.
69
AERIS ENVIRONMENTAL LTD Note 32. Parent entity information
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Accumulated losses
Share-based payments reserve
Net profit (loss) after tax for the period
Total comprehensive loss for the period
Parent 2023
$
Parent 2022
$
4,524,838
6,936,049
5,730,275
8,086,981
(2,622,336)
(1,441,009)
(2,674,712)
(1,441,009)
62,520,725
62,520,725
(61,430,807)
(57,835,612)
1,965,645
1,960,861
3,055,563
6,645,974
(3,562,663)
(7,136,271)
(3,545,584)
(7,078,970)
Note 33. 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
Australia
Australia
Australia
USA
Singapore
Malta
UK
China
2023
%
100.00%
100.00%
100.00%
100.00%
0.00%
100.00%
100.00%
100.00%
2022
%
100.00%
100.00%
100.00%
100.00%
75.00%
100.00%
100.00%
100.00%
Aeris ceased operations in Aeris Cleantech Pte Ltd during the 2021-22 Financial year and the company was deregistered on
7/02/2022. Any remaining balances have been released through FY23 to remove from the consolidated group. See statement
of changes in equity and note 21.
FINANCIAL STATEMENTS Note 34. Subsequent events
There have been no matters or circumstances, which have arisen since 30 June 2023 that have significantly affected or may
significantly affect:
(a)
the operations, in financial years subsequent to 30 June 2023, of the consolidated entity; or
(b)
the results of those operations;
(c)
the state of affairs, in the financial years subsequent to 30 June 2023, of the consolidated entity.
Note 35. 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
Consolidated
2023
$
2022
$
136,575
269,737
2,463,421
5,033,405
2,599,996
5,303,142
Loss after income tax benefit for the year
(3,653,743)
(7,130,427)
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 receivables and other receivables
Decrease/(Increase) in inventories
Decrease/(Increase) in other operating assets
Decrease/(Increase) in trade and other payables
Increase/(decrease) in employee benefits
117,387
426,517
10,219
4,784
14,131
293,199
74,868
10,227
91,306
28,518
99,851
1,594,891
7,125
104,172
90,450
156,154
184,101
63,349
(946,301)
(330,721)
Net cash used in operating activities
(2,582,587)
(6,107,356)
Note 36. Additional company information
Aeris Environmental Ltd is a public listed company, incorporated in Australia.
Principal registered office and principal place of business
Unit 5, Level 1, 26-34 Dunning Avenue
Rosebery NSW 2018 Australia
71
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 2023 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
28 September 2023
Non-Executive Chairman
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DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S
REPORT TO THE MEMBERS OF
AERIS
ENVIRONMENTAL LTD
30 JUNE 2023
73
AERIS ENVIRONMENTAL LTD INDEPENDENT AUDITOR’S REPORT
To the Members of Aeris Environmental Ltd
Report on the Audit of the Financial Report
Opinion
Level
9
| 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 2023, 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 2023 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 that 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.
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.
Passion beyond numbers
FINANCIAL STATEMENTS 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.
GOING CONCERN
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 the financial
year ended 30 June 2023 was $3.65 million
(2022: loss of $7.13 million).
Therefore, there is a risk that the Group may
not have the ability to continue as a going
concern.
As at 30 June 2023, the Group held $2.60
million (2022: $5.30 million) of cash in the
bank. The net cash outflow from operating
activities for the financial year ended 30
June 2023 was $2.58 million (2022: outflow
of $6.11 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 30
June 2023.
► Assessed the significant forecast cash inflows
and outflows. 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 capital
raising initiatives and whether they will be
required, and the ability to reduce the
monthly expenditures in the event of any
difficulty with the capital raising.
the
the Group’s going concern
► Evaluated
disclosures
report by
financial
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.
Passion beyond numbers
75
AERIS ENVIRONMENTAL LTD
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
$0.88 million as at 30 June 2023, net of a
provision for obsolescence.
An impairment expense of $0.30 million for
FY2023 is disclosed in Note 6 of the financial
report.
Inventory obsolescence has been identified
as a major risk due to the fact that the Group
holds significant amounts of 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:
► We discussed with management
the
impairment of
accounting policies for
inventory, their procedures for estimating
the provision for impairment and assessed
the appropriateness of these policies in
accordance with the requirements of
Australian Accounting Standards.
► Performed
substantive
on
stock
management’s assessment of
obsolescence as at 30 June 2023, including
the testing of ageing and the use by date.
testing
the
this
inventory provision,
► Estimated
to management’s
compared
calculation
with
management the differences including the
required adjustment.
discussed
and
RECOVERABILITY OF TRADE RECEIVABLES
Why a key audit matter
How our audit addressed the risk
balance
the Group
recorded a
As disclosed in Note 9 of the financial
trade
report,
of
receivable
$0.46 million as at 30 June 2023 (2022:
$0.80 million), net of expected credit losses.
For 30 June 2023 this
included gross
receivables of $0.78 million and an
allowance for expected credit losses of
$0.32 million.
Recoverability of trade receivables is a key
audit matter due to the size of the trade
receivable balance and the high level of
judgement used
the
expected credit loss provision.
in determining
Our procedures included, amongst others:
► Reviewed the aged debtor listing including
long outstanding receivables and assessed
the recoverability of these through inquiry
with management and by obtaining
sufficient corroborative evidence such as
subsequent receipts etc. to support the
conclusions.
► Reviewed management’s allowance
for
expected credit
loss calculations and
independently assessed the reasonable of
the amounts provided for.
► Reviewed subsequent credit notes issued to
check for reversal of revenue/receivable.
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.
Passion beyond numbers
FINANCIAL STATEMENTS
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 2023, 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.
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.
Passion beyond numbers
77
AERIS ENVIRONMENTAL LTD
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
•
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as
a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
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.
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.
Passion beyond numbers
FINANCIAL STATEMENTS
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.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 28 of the directors’ report for the year
ended 30 June 2023.
In our opinion, the Remuneration Report of Aeris Environmental Ltd for the year ended 30 June 2023,
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
28 September 2023
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.
Passion beyond numbers
79
AERIS ENVIRONMENTAL LTD
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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 Options
and Performance Rights Registers, ASX releases and the Company’s
Constitution.
Shareholding Information
Distribution of Shareholders
Analysis of the quoted fully paid ordinary shares by holding as at
7 September 2023:
Spread of
Holdings
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
Number of
Holders
Ordinary
shares
% of Total
Issued Capital
173
327
208
456
139
22
45
88,768
966,012
1,664,196
16,205,149
30,634,537
15,329,852
180,756,037
0.04
0.39
0.68
6.60
12.47
6.24
73.58
Total
1,370
245,644,551
100.00
Based on the market price at 7 September 2023 there were 820 shareholders
with less than a marketable parcel of $500 worth of shares at a share price
of $0.029. There are 117,000 shares that are subject to Company-imposed
voluntary escrow.
)
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Statement of Shareholdings as at 7 September 2023
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
HSBC Custody Nominees (Australia) Limited
35,352,171
14.39
Bernard Stang
Maurie Stang
Steven Kritzler
Girdis Superannuation Pty Ltd
Potski Pty Ltd
Towns Corporation Pty Ltd
Energy Trading Systems Pty Ltd
Kefford Holdings Pty Ltd
Meditsuper Pty Ltd
Development Management & Constructions Pty Ltd
Seguro Super Pty Ltd
Bennelong Resources Pty Limited
Lotsa Nominees Pty Ltd
Benlee Company Pty Ltd
BNP Paribas Noms Pty Ltd
Steven Kritzler
Chiang Hao Wong
Uno Seguro Pty Ltd
Roo County Pty Ltd
18,043,084
15,279,749
8,331,609
6,922,828
6,917,604
5,850,000
5,529,411
4,738,610
4,272,281
4,247,353
4,105,695
3,500,000
3,333,333
3,168,283
3,018,706
2,921,176
2,861,557
2,800,695
2,757,935
7.35
6.22
3.39
2.82
2.82
2.38
2.25
1.93
1.74
1.73
1.67
1.42
1.36
1.29
1.23
1.19
1.16
1.14
1.12
Total of Top 20 Holdings
143,952,080
Other Holdings
101,692,471
58.60
41.40
Total Ordinary Shares
245,644,551
100.00
81
AERIS ENVIRONMENTAL LTD Unquoted Equity Securities as at 7 September 2023
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
Number Class – Performance Rights
Number of Holders
150,000
Performance Rights issued to consultant Bruce Davison on 21 December 2022, which
expire (if not converted) on 20 December 2026 with no exercise price, with one third
vesting each year for three years commencing on 10 October 2023.
150,000
Total Performance Rights 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. Options holders and performance rights holders have no voting rights until their options are exercised or their
performance rights convert.
Substantial Shareholders as at 7 September 2023
Substantial shareholders in Aeris Environmental Ltd, based on Substantial Shareholder Notices received by the ASX and the
Company, are as follows:
Name
Number
Class
Voting Power
Maurie Stang
23,881,819
Ordinary fully paid shares
Perennial Value Management Limited
22,642,424
Ordinary fully paid shares
Bernard Stang
20,253,664
Ordinary fully paid shares
9.86%
9.22%
8.36%
On-Market Buy-Back
There is no current on-market buy-back of shares in the Company.
AUSTRALIAN SECURITIES EXCHANGE (ASX) ADDITIONAL INFORMATION CORPORATE
DIRECTORY
Aeris Environmental Ltd
ACN:
093 977 336
ABN:
19 093 977 336
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
Share Registry
Computershare Investor Services Pty Ltd
Yarra Falls, 452 Johnston Street, Abbotsford VIC 3067 Australia
GPO Box 2975, Melbourne VIC 3001 Australia
Telephone:
1300 850 505 (within Australia)
Telephone:
+61 3 9415 4000 (outside Australia)
Facsimile:
+61 3 9473 2500
Website:
www.computershare.com
Investor Link:
www.investorcentre.com/au
Auditor
UHY Haines Norton Sydney
Level 9, 1 York Street, Sydney NSW 2000
GPO Box 4137, Sydney NSW 2001
Telephone:
+ 61 2 9256 6600
Website:
www.uhyhnsydney.com.au
Stock Exchange
The Company’s fully paid ordinary shares are quoted on
the official list of the Australian Securities Exchange (ASX
Registered and Principal Office
Unit 5, Level 1, 26-34 Dunning Avenue
Rosebery NSW 2018 Australia
Telephone:
+61 2 8344 1315
Facsimile:
+61 2 9697 0944
Email:
info@aeris.com.au
Website:
www.aeris.com.au
Limited).
ASX Code
AEI
83
AERIS ENVIRONMENTAL LTD