ANNUAL
REPORT
2022
The power of change
ii
Chairman’s Letter to Shareholders
2
CEO’s Letter to Shareholders
4
SiBoxTM Review
6
Aurora Enery Project Review
8
Corporate Governance
10
Corporate Directory
10
Financial Statements
11
Directors’ Report
12
Declaration of Independence
23
Statement of Profit or Loss
24
and Other Comprehensive Income
Statement of Financial Position
25
Statement of Cash Flows
26
Statement of Changes in Equity
27
Notes to the Financial Statements
28
Directors’ Declaration
44
Independent Auditor’s Report
45
Shareholder Information
49
Our vision is to commercialise
the technology to decarbonise
the world’s energy supply.
“
”
1
Dear Shareholders,
The 2022 Financial Year was one of
consolidation for 1414 Degrees, with
the signing of two important contracts
which have placed the company on a
solid path for both our SiBox technology
and our Aurora project.
There was a change towards the end
of the financial year in our Executive
Leadership team, with our Chief
Executive Officer, Mr Matthew Squire,
stepping down. Matthew, whilst only at
the firm for just short of twelve months,
worked tirelessly with the team and
external stakeholders to execute the key
contracts mentioned above. We wish
Matt all the very best, and whilst we
conduct our search for a replacement
of Matthew the company is in good
hands with our Chief Operating Officer,
Dr Jordan Parham, acting in the Chief
Executive Officer role.
From a Board governance perspective,
the company had been fortunate
enough to acquire the services of two
new directors, adding corporate and
commercial expertise and experience.
Ms Ford has practiced as a solicitor
for over 30 years, initially in private
practice and then as in house counsel
and company secretary, largely in the
energy and resources sector. Ms Evans
has extensive executive leadership
experience in private and ASX listed
companies in the energy and resources
sector, with a focus on growth and
energy markets. They were chosen
after an extensive search, with their
skill sets aligned to the Board’s newly
implemented skills matrix. Sadly,
subsequent to this financial year, Ms
Ford resigned due to personal reasons.
I thank Ms Ford for her efforts and will
genuinely miss her professionalism and
sound advice.
In addition to the significant
contributions already made by Ms Ford
and Ms Evans, I would like to thank Mr
Larson and Mr Gan for their sensible and
pragmatic approach to their director
duties during the year. It has been an
honour to lead all four of them as Chair,
and I appreciate the faith they have
placed in me.
Turning to our projects, firstly an
agreement was signed with Woodside
Energy Technologies Pty Ltd (Woodside),
a subsidiary of Woodside Energy Ltd
in October 2021, for up to $2 million
to support further development of our
SiBox technology. Since that date the
team at 1414 Degrees and Woodside
have been working on the design,
engineering and fabrication of the
1MWh SiBox Demonstration Module.
Further support for the transformational
potential of the SiBox technology was
demonstrated when 1414 Degrees was
awarded a $2.2 million grant from the
Australian Federal Government’s Modern
Manufacturing Initiative (MMI).
Our Aurora Energy Project has also
moved forward this year, as we have
found excellent partners to work
with. After a false start with Ovida
Infrastructure, who withdrew from their
exclusivity MOU due to a strategic
decision by their shareholders to no
longer invest in such electricity projects,
we were pleased to announce to the
market in June 2022 our joint venture
to develop Aurora with a subsidiary of
Vast Solar.
This agreement was executed after a
process whereby several prospective
parties were approached or expressed
significant interest in Aurora. The joint
venture agreement sets out that we
will be working with Vast on realising
the vision for Aurora’s development as
a long-term renewable energy project.
Firstly, by accelerating the development
of our Stage 1 BESS. In the longer-
term providing access rights within
the precinct for Vast to independently
progress a Concentrated Solar Project
(CSP) using Vast’s proprietary technology
and for 1414 Degrees to independently
progress a pilot of its Thermal Energy
Storage System (TESS).
In addition to Vast’s capital contribution
associated with the 50% sale of shares
in Silicon Aurora Ltd, Vast will also
contribute 50% of all development
costs associated with the initial stage
1 development of the project, including
the reimbursement for associated costs
incurred since the GPS commencement.
This deal with Aurora has meant that
funding of up to $2.9 million was secured
through the arrangements with Ovida
Infrastructure and Vast Solar Pty Ltd,
which is in addition to the important
50% sharing of all development costs
CHAIRMAN’S LETTER
TO SHAREHOLDERS
2
associated with the initial Stage 1
development, which will help drive
the project development successfully
towards final investment decision.
From a geopolitical perspective,
whilst the year of 2022 has started
with significant turmoil in Europe,
which is extremely tragic, the flow-on
effects in energy markets highlights
the importance of moving away from
traditional power sources into more
renewable energy alternatives. Indeed,
to that very end, we are starting to see
an increased activity by governments
and investors throughout the world to
limit the use of fossil fuels and actively
encourage and reward those businesses
which are developing products and
services in the renewable energy space.
This trend makes sense from both an
environmental perspective but also
from an economic perspective. With
governments now moving towards
providing greater subsidies to support
the renewables space and enhanced
costs and penalties for fossil fuel sector,
we should start to see more uptake
of clean energy technology. This is
beneficial for 1414 Degrees as we look to
continue the work commenced in the
past year on delivering value on our two
key projects which both actively support
a more sustainable future.
From an Operations perspective, I’m
very pleased with the work the team has
done to progress its two key strategic
priorities. Each time I set foot in Melrose
Park it is a delight to see the progress
conducted, and the passion with which
the team are working towards an end
goal of enabling a clean energy future.
Importantly, the core group of staff who
are working on these key projects have
remained intact, which has been a key
ingredient to our progress this year. In
addition to the great work performed
by Jordan Parham during the year,
I’d like to call out the wonderful work
done by Josh, Nathan, Mahesh, Will and
Brian in relation to the engineering side
of the business. I’d also like to thank
Annie, Catherine and Shane for all their
work in administration management,
human resource leadership and financial
management and stewardship. Finally,
I would also like to personally thank
our company secretary, Tania Sargent,
for her professionalism, loyalty and
commitment to corporate governance.
Furthermore, I had been delighted to
see very little turnover of staff within the
company, evidencing the happy work
life that has existed up until recently at
1414 Degrees. Our people are our biggest
asset, and it’s extremely important they
are well looked after and protected. I am
concerned about protecting our people
as best as I can from any repercussions
and fallout from some activities which
happened subsequent to the end of the
financial year, which were addressed in an
Extraordinary General Meeting. There is a
small number of shareholders who seem
to continue to wish to create instability.
I earnestly want to see calm restored
not just for the sake of our staff but also
to enable a clear pathway forward for
the Company. I will be working with our
Board to try to facilitate this. It is very
unnerving to staff, Board members,
SiBox and Aurora stakeholders and
capital markets in general.
Fellow shareholders, despite the agitations
of a small block of Shareholders, please
be assured that my confidence in the
future direction of the company remains
strong, and that I will be acting in the best
interests of all our Shareholders, as well
as our staff and key business stakeholders
to advance its cause in a methodical
and logical manner. Projects and
developments like the ones we are looking
at take time, as most things of significance
do, but the foundations of the work that
we are doing fills me with confidence.
I take this opportunity to stress the
importance of having a stable and steady
Board to help both the stewardship of
the company and the provision of a clear
runway for a necessary capital raising
required to ensure 1414 Degrees delivers
upon our two key pathways.
The existing Board and I remain
committed to working with the executive
team to assist them where possible to
enable the successful delivery of value to
you, our esteemed shareholders. As I said
in my letter last year, I like to operate an
‘open door’ policy. I have spoken to many
shareholders this year, and it is good to
hear the majority of them are supportive
of what we are doing. So, if you do have
any questions or would like to discuss
anything with me directly, please feel free
to do so.
Best wishes,
Tony Sacre
Chairman
3
CEO’S LETTER TO
SHAREHOLDERS
4
Dear Shareholders,
The last 12 months has seen 1414
Degrees make significant progress
towards the Company’s key
strategic priorities of developing and
commercialising our silicon-based
thermal energy storage technology,
SiBox, and developing a hybrid
renewable energy power plant to provide
clean and reliable electricity, the Aurora
Energy Project (AEP).
The engineering team have focussed
on the design and engineering of
the SiBox Demonstration Module, in
collaboration with Woodside Energy
Technology. Detailed engineering, and
major equipment selection has been
largely completed with fabrication in
progress on key items including the
SiBox furnace, energy recovery system
heat exchanger, energy recovery system
circulation and exhaust fans, air flow
path components. Construction and
rigorous testing of the Demonstration
Module will take place in early 2023.
Our research and development efforts
have focussed on refining the preferred
thermal storage media concepts for
SiBox. Testing and thermal cycling of
different configurations in our furnaces
continues to support our selection of
materials and optimised design for the
SiBox Demonstration Module. Samples
have now completed six months of
rigorous testing under anticipated real-
life conditions. Complementary R&D
continued in parallel on innovations to
further improve the storage media cost
and performance.
Regarding AEP, the Company now
has development approval for up to
140MW/280MWh battery energy storage
system (BESS), 70MW Solar Photo-
Voltaic (PV), 150MW Concentrated
Solar Power (CSP) as well as a pilot
for our SiBox thermal energy storage.
The project is staged with our initial
focus on Stage 1 being the development
and connection of the 140 MW/1-
2hr BESS to the adjacent 275kV
transmission system. The AEP project
tenure was also restated following the
execution of an amended Tripartite
agreement between 1414 Degrees’
subsidiary Silicon Aurora Pty Ltd,
the pastoral leaseholders Buckleboo
Nominees and SA Government.
The company has also been progressing
technical activities on AEP including
executing a work order with ElectraNet
to commence the Generator
Performance Standard (GPS) study.
This follows confirmation of the key
technical input parameters of the
Stage 1 140MW/1-2hr capacity BESS.
The GPS study is the primary activity
remaining in order to be approved by
the Australian Energy Market Operator
to connect to the National Electricity
Market and negotiate a Transmission
Connection Agreement with ElectraNet.
1414 Degrees has appointed Emanden
Technical Solutions as owner’s engineer
and AECOM as the modelling consultant
to manage and execute the GPS study.
SiBox and AEP have clear forward
pathways and critical upcoming
commercial milestones. The engineering
team are focussed on delivering the
SiBox Demonstration Module, moving to
construction, commissioning and testing
in the next 12 months, which will deliver
test results to validate models for design
and scale-up of the technology. This will
be complemented by the R&D team
working on improvements to the SiBox
storage media and SiBox design to further
improve SiBox competitiveness.
Commercialising the SiBox technology
will be a significant focus for the Company,
in particular to inform negotiations
with Woodside on the creation of the
SiBox special purpose vehicle. A key
step on this journey will be updating
the marketing and communications to
robustly articulate SiBox’s commercial
value proposition as well as the ‘go to
market’ strategy to attract prospective
customers or partners and secure
investment in SiBox projects. This will be
supported by our collaboration with the
Heavy Industry Low-Carbon Technology
Co-operative Research Centre (HILT-CRC),
Long Duration Energy Storage Council
and Woodside.
The Aurora team will work closely with
our joint-venture partner Vast Solar and
our various contractors to develop the
Aurora Stage 1 BESS to final investment
decision. This will include completing
the engineering studies, negotiating the
Transmission Connection Agreement
and securing key vendors for the BESS
supply and EPC contractor for the
balance of plant. In parallel, commercial
engagement will focus on securing
finance to enable procurement and
preliminary works to progress as soon
as final investment decision is taken.
These tasks, whilst not easy, must be
delivered for the long-term success of
the company. To this end, I would like to
acknowledge the outstanding efforts and
dedication of the staff and support of the
Board at 1414 Degrees. Their ongoing
resilience, dedication and enthusiasm
to deliver outcomes puts us in the best
possible position to realise value for
Shareholders. I would also like to thank
our broader team, particularly Woodside
Energy Technology and Vast Solar, as
well as our key suppliers and contractors,
who provide complementary skills and
expertise to execute our key projects.
Thank you for your ongoing support
of 1414 Degrees and we look forward
to an exciting year ahead.
Yours sincerely,
Jordan Parham
Acting Chief Executive Officer
SiBox™ and Aurora Energy Project
have clear forward pathways and critical
upcoming commercial milestones.
5
THE FUTURE
OF CLEAN HEAT
A low-carbon revolution
for industry
SiBox™ will harness the extremely high latent heat capacity
of silicon, to store heat from intermittent renewables.
It will provide industry with reliable, decarbonised, ultra-high
temperature heat 24 hours a day, seven days week, targeted
at large scale industrial applications and combined heat
and power opportunities.
The Company is focussed on building the SiBox
Demonstration Module to showcase the technology
as a competitive clean energy product, with the support
of Woodside Energy Technology and the Australian
Federal Government through a Modern Manufacturing
Initiative grant.
6
7
NOTHING
BUT BLUE SKY
Low-cost, reliable,
clean energy
The vision for Aurora Energy Project is to be a hybrid
renewable energy power plant delivering reliable
electricity to the National Energy Market.
We are working closely with our joint-venture partner
Vast Solar to develop the Stage 1 Battery to final
investment decision.
In the longer-term Aurora provides the opportunity
to deploy Concentrated Solar Power (CSP) using
Vast’s proprietary technology and a pilot of our
SiBox technology.
8
9
Corporate Governance
1414 Degrees Limited and the Board
are committed to achieving and
demonstrating the highest standards
of corporate governance.
The Company has reviewed its corporate
governance practices against the
Corporate Governance Principles
and Recommendations (4th edition)
published by the ASX Corporate
Governance Council.
The 2022 Corporate Governance
Statement is dated as at 30 June 2022
and reflects the corporate governance
practices in place throughout the 2022
financial year.
The 2022 Corporate Governance
Statement has been approved by
the Board.
A description of the Company’s current
corporate governance practices is
set out in the Corporate Governance
Statement which can be viewed at
1414degrees.com.au
Corporate Directory
Current Directors
Tony Sacre – Chairman
Peter Gan – Non Executive Director
Dana Larson – Non Executive Director
Alison Evans – Non Executive Director
Kevin Moriarty – Non Executive Director
Company Secretary
Tania Sargent
Registered Office &
Principal Place of Business
1414 Degrees Limited
136 Daws Road
Melrose Park SA 5039
T +61 8 8357 8273
E info@1414degrees.com.au
Share Registry
Computershare Investor
Services Pty Limited
Level 5, 115 Grenfell Street
Adelaide SA 5000
T +61 3 9415 4000
W computershare.com.au
Stock Exchange
1414 Degrees Limited shares
are quoted on the Australian
Securities Exchange(ASX:14D)
Solicitors
HWL Ebsworth Lawyers
Level 21, 91 King William Street
Adelaide SA 5000
Patent & Trade Mark Attorneys
Madderns
Level 4, 19 Gouger Street
Adelaide SA 5000
Auditor
BDO Audit Pty Ltd
Level 7, 420 King William Street
Adelaide SA 5000
Website
1414degrees.com.au
10
FINANCIAL
STATEMENTS
11
Directors’ report
For the year ended 30 June 2022
The directors of 1414 Degrees Limited
present their report on the Company for
the financial year ended 30 June 2022.
Directors
The following persons were directors of
1414 Degrees Limited during the whole
of the financial year and up to the date of
this report, unless otherwise stated:”
Dana Larson
Tony Sacre
Peter Gan
Alison Evans – Appointed 1 May 2022
Kevin Charles Moriarty – Resigned as
Director 19 July 2021 and as Executive
Chairman 2 September 2021, re-elected
28 July 2022
Sheree Ford – Appointed 1 May 2022,
Resigned 15 September 2022
Company secretary
Tania Sargent
Principal activities
1414 Degrees is developing and
commercialising its silicon-based
thermal energy storage technology,
SiBox™, to enable a clean energy future.
SiBox will harness the extremely high
latent heat capacity of silicon in its
proprietary storage system. This will
enable intermittent renewables to
provide flexible, ultra-high temperature
heat 24/7 for large industrial applications
and to deliver reliable heat and power
supply when required. It is envisaged
that the flexibility of the SiBox™
modular development concept will
provide a decarbonisation pathway for
energy users such as high temperature
industrial customers, minerals
processing industries, thermal power
stations and those needing a combined
heat and power solution.
1414 Degrees is also developing the
Aurora Energy Project (AEP) located
near Port Augusta, South Australia. The
focus of the project is to develop a hybrid
renewable energy project delivering
reliable electricity to the region and
national electricity market. The AEP
site is also an opportunity to build and
demonstrate a large-scale pilot of the
SiBox™ technology.
Dividends
No dividends have been paid during
or since the financial year ended
30 June 2022.
Review of operations
The Company’s strategies, structure and
people have continued to evolve as it
progresses through the development of
a new technology in a dynamic market.
In the past year, there have been several
significant achievements regarding the
technical and commercial development of
our silicon based thermal energy storage
technology and Aurora Energy Project.
This is occurring as we continue to see a
very favourable investment environment
for clean energy technology and
renewable energy generation projects.
Sibox thermal energy storage
technology
The Company’s core research and
development to harness the high energy
density of molten silicon has resulted
in a new, robust, scalable and energy
dense storage media concept. This
breakthrough technology, arranged in a
new internal heat exchanger design, is
called ‘SiBox™’.
In the past year the Company has
executed agreements with Woodside
Energy Technologies Pty Ltd (Woodside),
a subsidiary of Woodside Energy Ltd,
to support further development and
potential partnership in the future
commercialisation of the SiBox™
technology. Woodside will contribute
up to $2m to the circa 1 MWh
demonstration module. Following
completion of the demonstration
module program Woodside will decide
whether to participate further in the
direct investment of the technology.
Should Woodside choose to do so, 1414
Degrees and Woodside will create a
Special Purpose Vehicle (SPV) to hold
the SiBox intellectual property (IP) for its
future development.
Further support for the transformational
potential of the SiBox technology was
demonstrated when 1414 Degrees
was awarded a $2.2 million grant from
the Australian Federal Government’s
Modern Manufacturing Initiative (MMI).
The grant will be used to support
the commercialisation of the SiBox
technology through the construction
of the demonstration module,
complementing the agreement with
Woodside Energy Technologies. It will
also fund commercialisation activities
including market research and
technoeconomic evaluation of brown-
field opportunities for SiBox.
Over the past year the engineering
team have focussed on the design and
engineering of the SiBox Demonstration
Module. Detailed engineering, and major
equipment selection has been largely
completed with fabrication in progress
on key items including the SiBox furnace,
energy recovery system heat exchanger,
energy recovery system circulation
and exhaust fans, and air flow path
components. Construction and rigorous
operations and testing will take place in
early 2023.
R&D efforts have focussed on refining
the preferred thermal storage media
concepts for SiBox. Testing and thermal
cycling of these options in our furnaces
continues to support our selection of
materials and optimised configuration
for the SiBox demonstration modules.
Samples have now completed six
months of rigorous testing under
anticipated real-life conditions.
Complementary R&D is underway on
innovations to further improve the
Storage Media cost and performance.
Aurora energy project
In December 2019, the Company
acquired SolarReserve Australia II Pty
Ltd, now renamed SiliconAurora Ltd to
develop the Aurora Energy Project (AEP).
During the year the Company updated
relevant approvals for the AEP, such that
it now has development approval for
up to 140MW/280MWh battery energy
storage system (BESS), 70MW Solar
Photo-Voltaic (PV), 150MW Concentrated
Solar Power (CSP) as well as a pilot for
our SiBox thermal energy storage. The
project is staged with our initial focus
on Stage 1 being the development and
connection of the 140 MW BESS to the
adjacent 275kV transmission system.
The AEP project tenure was also restated
following the execution of an amended
Tripartite agreement between 1414
Degrees’ subsidiary Silicon Aurora Pty
Ltd, the pastoral leaseholders Buckleboo
Nominees, the Minister for Environment
and Water, and the Minister for Primary
Industries and Regional Development.
The company has also been progressing
technical activities including executing a
work order with ElectraNet to commence
the Generator Performance Standard
(GPS) study. This follows confirmation
of the key technical input parameters
of the Stage 1 140MW/1-2hr capacity
BESS. The GPS study is the primary
activity remaining to be approved by
the Australian Energy Market Operator
(AEMO) to connect to the National
Electricity Market (NEM) and negotiate
a Transmission Connection Agreement
with ElectraNet. 1414 Degrees has
appointed Emanden Technical Solutions
(Emanden) as owner’s engineer and
AECOM as the modelling consultant to
manage and execute the GPS study.
In the past year we brought in Ovida
Infrastructure to the AEP via an
exclusivity MOU. However, this was
terminated before progressing to any
further agreements due to a strategic
decision by their shareholders to no
12
longer invest in unregulated electricity
projects. 1414 Degrees received
$391,000 in payments from Ovida
during their involvement and retained
all intellectual property generated since
execution of the MoU.
Subsequent to Ovida’s exit, 1414 Degrees
executed agreements with a subsidiary
of Vast Solar Pty Ltd to create a joint
venture to develop AEP by way of a sale
of 50% of the shares in SiliconAurora
Pty Ltd. Under the terms of the share
sale agreement, the purchase price
for the 50% shares in SiliconAurora is
$2.5 million in cash payable by Vast in
two instalments: an initial $1.0 million
following completion and a further $1.5
million following the receipt by Silicon
Aurora of a written offer to connect to the
transmission system from the relevant
Network Service Provider under the rules
of the National Electricity Market. Vast
will contribute 50% of all development
costs associated with developing the
Stage 1 BESS to a position of readiness
for a Final Investment Decision
(FID). In addition to accelerating the
development of our Stage 1 BESS, the
joint venture agreements also provide
for development of Aurora in further
stages, including access rights within
the precinct for Vast to independently
progress a CSP Project using Vast’s
proprietary technology and for 1414
Degrees to independently progress a
pilot of its SiBox technology.
Intellectual property
The Company continues to actively
manage, document and protect all its
intellectual property.
Current status of patents and trade
names:
— Patent 2010282232– “Thermal Energy
Storage Apparatus, Arrangement and
Method”. Granted in AU, NZL, EU, China
and US.
— Patent 2012292959 – Thermal Energy
Storage Apparatus” joint ownership.
Granted in AU, NZL, EU, China and US.
— PCT Application 2018239960 “Energy
Storage and Retrieval System” (TESS-
IND). Granted in US, in progress in AU,
NZL and EU.
— PCT Application PCT/AU2019/000113
“Energy Recovery System” (GAS-TESS).
Proceeding with National/Regional Phase
registration Aus, NZL and US.
— Australian provisional patent application
No. 2020904050 (SiBox Storage Media).
In application/patent pending.
— 1414 Degrees, SiBox trademark
registered in AU, PRC, USA, EU.
Corporate
Matthew Squire joined the Company as
Chief Executive Officer on 2nd August
2021. He tendered his resignation as
Chief Executive Officer for personal
reasons on 19 May, finishing on 30 June
2022. The Company’s Chief Operating
Officer, Dr Jordan Parham, was appointed
to the role of Acting Chief Executive
Officer. Dr Parham has been with 1414
Degrees since the beginning of 2019
and has been actively involved in key
commercial negotiations concerning
the Woodside Energy partnership and
the associated development of the
SiBox technology. Dr Parham has also
been driving the development of the
Aurora Energy Project, and was pivotal
in progressing the partnership with Vast
Solar Pty Ltd.
To further support and strengthen the
Company as we enter the final stages
of the research and development of our
SiBox technology and further develop
our Aurora Project, 1414 Degrees
appointed two new Non-Executive
Directors effective 1 May 2022. Sheree
Ford and Alison Evans both bring
significant corporate and commercial
expertise from many years’ experience
within resource and energy companies.
Additional details below in the Directors’
Report.
COVID-19
The COVID-19 pandemic caused the
Company to review its budgets and
work practices. The Company continues
to monitor its finances and workplace
arrangements to manage the risk from
COVID-19, related isolation periods for
impacted employees and flow-on effects
from suppliers.
Significant changes in state of affairs
New SiliconAurora Joint Venture
arrangement entered into with Vast
Solar Aurora Pty Ltd, detailed above in
‘Review of Operations’.
On June 30, 2022 the Company had
201,985,458 Ordinary Shares on issue
and 3,564 shareholders.
Matters subsequent to the end of the
financial year
An Extraordinary General Meeting was
held on 28 July 2022, following receipt
of a section 249D notice from Focem
Pty Ltd as trustee for the Towarnie
Superannuation Fund (Focem) (being
a company associated with Dr Kevin
Moriarty), as announced to the market on
1 June 2022. The meeting considered the
resolutions proposed by Focem in the
Notice, with the outcome being that Dr
Kevin Moriarty was elected as a Director
of the Company. The Company received
a second section 249D notice from a
group of shareholders as announced to
the market on 12 September 2022. A
member meeting has been convened
for 11 November 2022 to consider the
resolutions. The Company also wishes
to advise that Sheree Ford resigned as a
non-executive director on 15 September
2022 for personal reasons.
Environmental regulation
The Company is not subject to
significant environmental regulations
and is not aware of any breaches of any
environmental regulations during the year.
Meetings of directors
The number of meetings of the board of
directors (including board committees)
held during the year ended 30 June 2022,
and the number of meetings attended by
each director are set out below:
Board
Directors
Held
Attended
Dana Larson
10
10
Peter Gan
10
10
Tony Sacre
10
10
Sheree Ford
3
3
Alison Evans
3
3
Kevin Moriarty
1
1
13
Information on directors
Dana Larson
Title
Non-Executive Director
Date of Appointment/Re-election
18 October 2017, 25 November 2021
Qualifications
B.Sc Chemical and Petroleum
Engineering
Experience and expertise
Dana is an energy expert with 16 years’
of experience primarily focusing on
acquisitions, reservoir engineering,
financial modelling, and engineering
management. He has a passion for
cultivating a culture of success and for
leveraging technical knowledge to create
and optimise value for companies. He
consults for hedge funds and wealthy
individuals on exploration & production,
mining, and renewable energy and is
currently running an energy acquisition
and divestiture consultancy.
Other current directorships
None
Former directorships (last 3 years)
None
Interests in shares
250,000 ordinary shares
Interests in options
None
Contractual rights to shares
None
Peter Gan
Title
Non-Executive Director
Date of Appointment/Election
4 January 2021, 25 November 2021
Qualifications
BEng (Hons), MBA
Experience and expertise
Peter is an experienced executive and
governance professional, having held
positions as Chief Executive Officer,
Chief Operating Officer and Company
Secretary with both listed and private
companies. Peter is currently the CEO
of Royal Wins Ltd, a company listed on
the Canadian Stock Exchange. Peter’s
experience includes roles with energy
companies, technology start-ups and
professional services, whilst also having
extensive experience in capital markets.
Peter has an Engineering degree (Hons)
and also holds a Masters in Business
Administration.
Other current directorships
Royal Wins Corporation
Former directorships (last 3 years)
None
Interests in shares
0 ordinary shares
Interests in options
None
Contractual rights to shares
None
Tony Sacre
Title
Chairman and Non-Executive Director
Date of Appointment/Election
3 June 2021, 25 November 2021
Qualifications
BBus, FINSIA, ACA, ACPA, MBA, GAICD
Experience and expertise
Tony is an experienced Non-Executive
Director and Executive with more than
25 years’ experience with both publicly
listed and private companies. Tony is
currently the CEO of Bentleys, Australia’s
tenth largest national accounting
organisation. Tony’s experience
includes roles with international
financial institutions, one of Australia’s
primary securities exchanges and large
professional services organisations.
Tony has a Bachelor of Business
(Queensland University of Technology),
is a Fellow of the Securities Institute of
Australia, a Chartered Accountant and
Certified Practising Accountant, holds
a Masters in Business Administration
(Macquarie University) and is a Graduate
of the Australian Institute of Company
Directors.
Other current directorships
Chair – Allinial Global – Asia Pacific
Former directorships (last 3 years)
None
Interests in shares
50,000 ordinary shares
Interests in options
None
Contractual rights to shares
None
14
Sheree Ford
Title
Non-Executive Director
Date of Appointment
1 May 2022,
Resigned 15 September 2022
Qualifications
BA, LLB, GD Resources Law, MBA
Experience and expertise
Sheree has practiced as a solicitor
for over 30 years, initially in private
practice and then as in house counsel
and company secretary, largely in the
energy and resources sector. In the
energy sector, Sheree commenced her
career as a lawyer for BHP Limited and
subsequently undertook roles as general
counsel and company secretary and
as a member of the executive team at
several listed and unlisted companies,
including Beach Energy Limited, Interoil
Corporation and Roc Oil Company
Limited.
Other current directorships
None
Former directorships (last 3 years)
None
Interests in shares
None
Interests in options
None
Contractual rights to shares
None
Alison Evans
Title
Non-Executive Director
Date of Appointment
1 May 2022
Qualifications
BA, LLB
Experience and expertise
Alison has extensive executive leadership
experience in private and ASX listed
companies in the energy and resources
sector, with a focus on growth and
energy markets. She has worked in
several legal counsel roles with Centrex
Metals, GTL Energy and AGL Energy, and
most recently she was General Counsel
and Company Secretary of Cooper
Energy Limited. Alison is currently the
Company Secretary for the Adelaide
Symphony Orchestra.
Other current directorships
None
Former directorships (last 3 years)
None
Interests in shares
None
Interests in options
None
Contractual rights to shares
None
Kevin Moriarty
Title
Non-Executive Director
Date of Appointment
4 July 2016
Date of Resignation
19 July 2021
Date of Re-election
28 July 2022
Qualifications
BSc (Hons), Ph.D., MAusIMM
Experience and expertise
Dr. Kevin Charles Moriarty, BSc (Hons),
Ph.D., MAusIMM has 30 years corporate
experience in roles including Chairman and
Managing Director of listed companies.
He founded and led several companies
to develop mines in Australia and Africa.
He was Executive Chairman of 1414
Degrees Ltd for 5 years until retiring in
2021. During his term, 1414 Degrees built
several prototype devices utilising high
temperature silicon energy storage to
produce electricity. Two charged from
electricity and one by burning biogas.
They did not perform to specification
and Dr Moriarty brought in new more
highly qualified technical team with
material science background as well as
engineering. This team developed the new
SiBox technology aimed at very efficient
energy storage and recovery at high
temperatures to replace gas burning in
industry. This attracted major support from
Woodside Energy and the Commonwealth
government. He negotiated the purchase
of the Aurora Solar project for 1414
Degrees. He was re-elected to the board of
1414 Degrees in 2022.
Other current directorships
None
Former directorships (last 3 years)
None
Interests in shares
12,915,694 ordinary shares
Interests in options
None
Contractual rights to shares
None
Other current directorships’ quoted
above are current directorships for listed
entities only and excludes directorships
of all other types of entities, unless
otherwise stated.
Former directorships (last 3 years)’
quoted above are directorships held in
the last 3 years for listed entities only and
excludes directorships of all other types
of entities, unless otherwise stated.
15
Company secretary
Tania Sargent is an experienced
governance, company secretary and
non-executive director and is the current
State Chair of the Governance Institute.
Tania has a Bachelor of Arts (Accounting)
from the University of South Australia, is
a member of the Institute of Chartered
Accountants (Aust & NZ), has completed
a Masters in Business Administration,
is a graduate member of the Australian
Institute of Company Directors and
has completed a Diploma of Applied
Corporate Governance with the
Governance Institute of Australia.
Remuneration report (audited)
The remuneration report details the
Key Management Personnel (‘KMP’)
remuneration arrangements for the
Company, in accordance with the
requirements of the Corporations Act
2001 and its Regulations.
KMP are those persons having authority
and responsibility for planning, directing
and controlling the activities of the
entity, directly or indirectly, including all
directors.
The remuneration report is set out under
the following main headings:
— Principles used to determine the nature
and amount of remuneration
— Details of remuneration
— Employment agreements
— Share-based compensation
— Additional disclosures relating to key
management personnel
Principles used to determine the
nature and amount of remuneration
The objective of the consolidated entity’s
executive reward framework is to ensure
reward for performance is competitive
and appropriate for the results delivered.
The framework aligns executive reward
with the achievement of strategic
objectives and the creation of value for
shareholders, and it is considered to
conform to the market best practice
for the delivery of reward. The Board
of Directors (‘the Board’) ensures that
executive reward satisfies the following
key criteria for good reward governance
practices:
— competitiveness and reasonableness
— acceptability to shareholders
— performance linkage / alignment of
executive compensation
— transparency
The Board is responsible for determining
and reviewing remuneration
arrangements for its directors and
executives and reviews the remuneration
arrangements annually for KMP. During
the year, the Board approved a new
Reward and Remuneration Policy,
with reward and remuneration to be in
alignment with the overall strategy of
the Company. The performance of the
Company depends on the quality of its
directors and executives, and the Reward
and Remuneration philosophy to attract,
motivate and retain high performance
and high quality personnel.
The Board has structured an executive
remuneration framework that is market
competitive and complementary to the
reward strategy of the Company, with an
appropriate level of fixed remuneration
for KMP, as well as a proportion of
performance based remuneration.
The reward framework is designed
to align executive reward and their
performance hurdles to the targets of
the Company as well as shareholders’
interests. In considering shareholder
wealth, the Board considers that
this is generally driven by successful
commercialisation and long-term
proposition, rather than being directly
linked to financial performance. The
Board also considers the Enterprise
Value of the Company, being the market
capitalisation at the end of each period
end, adjusted for cash held at year end.
Additionally, the reward framework should
seek to enhance KMP’s interests by:
— rewarding capability and experience
— reflecting competitive reward
for contribution to growth in
shareholder wealth
In accordance with best practice
corporate governance, the structure of
non-executive director and executive
remuneration is separate.
Non-executive directors’ remuneration
Fees and payments to Non-Executive
Directors reflect the demands and
responsibilities of their role. Non-
Executive Directors fees are reviewed
periodically by the Board and are
regularly compared with companies
with comparable market capitalisation
and stage of development. Non-
Executive Directors do not receive
share Performance Rights or other
incentives. The Chairman’s fees are
determined independently to the fees
of Non-Executive Directors based on
comparative roles in the external market
ASX listing rules require the aggregate
Non-Executive Directors’ remuneration
be determined periodically by a
general meeting. The maximum annual
aggregate remuneration for Non-
Executive Directors has been set at
$300,000.
Executive remuneration
The Company aims to reward
executives based on their position and
responsibility, with a level and mix of
remuneration which has both fixed and
variable components.
The executive remuneration and reward
framework has three components:
— base pay and non-monetary benefits
— share-based payments
— other remuneration such as
superannuation and long service leave
The combination of these comprises the
executive’s total remuneration.
The Company has a Performance
Rights Plan under which it can issue
Performance Rights to staff and
executives.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key
management personnel of the Company
are set out in the following tables.
The key management personnel of the
Company consisted of the following
directors of 1414 Degrees Ltd:
— Dana Larson – Non-Executive Director
— Tony Sacre – Chairman and
Non-Executive Director
— Peter Gan – Non-Executive Director
— Sheree Ford – Non-Executive Director –
Appointed 1 May 2022,
Resigned 15 September 2022
— Alison Evans – Non-Executive Director –
Appointed 1 May 2022
— Kevin Moriarty – Executive Chairman –
Resigned as Director 19 July 2021 and as
Executive Chairman 2 September 2021,
re-elected as Non-Executive Director 28
July 2022
And the following persons:
— Matthew Squire – Chief Executive Officer
– Appointed 1 August 2021, Resigned 30
June 2022
— Jordan Parham – Chief Operating Officer
16
Short-term benefits
Post-
employment
benefits
Long-
term
benefits
Share-based payments
Salary
and fees
Cash
bonus
Non-
monetary
Super-
annuation
Long
service
leave
Equity-
settled
shares
Equity-
settled
Performance
Rights
Total
2022
$
$
$
$
$
$
$
$
Non-Executive Directors:
Tony Sacre
66,667
–
–
–
–
–
–
66,667
Dana Larson
41,667
–
–
–
–
–
–
41,667
Peter Gan
41,667
–
–
–
–
–
–
41,667
Sheree Ford *
8,333
–
–
–
–
–
–
8,333
Alison Evans *
8,333
–
–
–
–
–
–
8,333
Executive Directors:
Kevin Moriarty **
89,315
–
–
5,144
–
–
–
94,459
Other Key Management Personnel:
Matthew Squire ***
321,246
–
–
23,509
–
–
25,800
370,555
Jordan Parham
223,167
–
–
21,755
7,165
5,500
25,740
283,326
800,395
–
–
50,407
7,165
5,500
51,540
915,007
*
Represents remuneration from 1 May 2022 to 30 June 2022
** Represents remuneration from 1 July 2021 to 2 September 2021
*** Represents remuneration from 1 August 2021 to 30 June 2022
17
Short-term benefits
Post-
employment
benefits
Long-
term
benefits
Share-based payments
Salary
and fees
Cash
bonus
Non-
monetary
Super-
annuation
Long
service
leave
Equity-
settled
shares
Equity-
settled
Performance
Rights
Total
2021
$
$
$
$
$
$
$
$
Non-Executive Directors:
Tony Sacre
5,417
–
–
–
–
–
–
5,417
Dana Larson
30,000
–
–
–
–
–
–
30,000
Peter Gan
20,000
–
–
–
–
–
–
20,000
Richard Willson *
80,438
–
–
7,048
–
–
–
87,486
Executive Directors:
Kevin Moriarty
182,500
–
–
17,337
7,443
–
–
207,280
Penelope Bettison **
73,362
–
–
5,424
–
–
–
78,786
Other Key Management
Personnel:
Matthew Squire
–
–
–
–
–
–
–
Jamie Summons ***
132,002
–
–
10,847
–
–
–
142,849
Jordan Parham
170,937
–
–
16,239
5,669
–
15,000
207,845
Marie Pavlik ****
128,635
–
–
10,444
–
–
35,800
174,879
823,291
–
–
67,339
13,112
–
50,800
954,542
*
Represents remuneration from 1 July 2020 to 24 May 2021
**
Represents remuneration from 1 July 2020 to 28 August 2020
*** Represents remuneration from 14 January 2021 to 23 June 2021
**** Represents remuneration from 1 July 2020 to 5 March 2021
18
Dana Larson
Title
Non-Executive Director
Agreement commenced
1 December 2018; varied effective 1 May
2022
Term of agreement
Ongoing
Details
Annual fee effective 1 May 2022 of
$50,000; varied effective 1 August 2022
to $45,000
Tony Sacre
Title
Chairman and Non-Executive Director
Agreement commenced
3 June 2021; varied effective 1 May 2022
Term of agreement
Ongoing
Details
Annual fee effective 1 May 2022 of
$75,000; varied effective 1 August 2022
to $70,000
Peter Gan
Title
Non-Executive Director
Agreement commenced
4 January 2021; varied effective 1 May
2022
Term of agreement
Ongoing
Details
Annual fee effective 1 May 2022 of
$50,000; varied effective 1 August 2022
to $45,000
Sheree Ford
Title
Non-Executive Director
Agreement commenced
1 May 2022
Term of agreement
Resigned 15 September 2022
Details
Annual fee effective 1 May 2022 of
$50,000; varied effective 1 August 2022
to $45,000
Alison Evans
Title
Non-Executive Director
Agreement commenced
1 May 2022
Term of agreement
Ongoing
Details
Annual fee effective 1 May 2022 of
$50,000; varied effective 1 August 2022
to $45,000
Kevin Moriarty
Title
Non-Executive Director
Agreement commenced
28 July 2022
Term of agreement
Ongoing
Details
Annual fee effective 1 August 2022 of
$45,000
Matthew Squire
Title
Chief Executive Officer
Agreement commenced
1 August 2021
Term of agreement
Resigned 30 June 2022
Details
Base salary for the year ended 30 June
2022 of $350,000 plus superannuation.
3 month termination notice by
either party.
Jordan Parham
Title
Chief Operating Officer
Agreement commenced
14 January 2019; varied effective 1
September 2021
Term of agreement
Ongoing
Details
Base salary for the year ended 30 June
2022 of $211,500 plus superannuation;
revised to $261,500 from 1 July 2022. 3
month termination notice by either party.
Key management personnel have no
entitlement to termination payments in
the event of removal for misconduct.
Contract Details
Remuneration and other terms of
employment for key management
personnel are formalised in employment
agreements. Details of these agreements
are as follows:
19
Share-based compensation
Issue of shares
Shares issued to directors and other
key management personnel as part of
compensation during the year ended 30
June 2022
Name
Grant Date
Number of Shares Issued
Value of Shares Issued
$
Jordan Parham
14-Dec-21
50,000
5,500
Performance Rights
Performance Rights issued to directors
and other key management personnel
as part of compensation during the year
ended 30 June 2022
Name
Number of PR’s Granted
Value of PR’s Issued
$
Matthew Squire – Converted 19 April 2022
300,000
25,800
Matthew Squire – Lapsed 30 June 2022
3,200,000
272,000
Values of PR over ordinary shares
granted, exercised and lapsed for
directors and other key management
personnel as part of compensation
during the year ended 30 June 2022 are
set out below:
Value of PR granted
during the year
Value of PR exercised
during the year
Value of PR lapsed
during the year
Remuneration
consisting of
Shares & PR for
the year
Name
$
$
$
%
Jordan Parham
–
44,000
(45,350)
11%
Matthew Squire
297,800
25,800
(272,000)
7%
Kevin Moriarty
–
–
(120,000)
Dana Larson
–
–
(15,000)
297,800
69,800
(452,350)
Company performance link to
remuneration
The remuneration of key management
personnel is linked to the development
of the Company’s intangible assets, the
continued progress towards developing
the TESS technology and progress on
the Aurora site at Port Augusta. Various
performance criteria are linked to
Performance Rights granted.
Other transactions with key
management personnel and their
related parties
Nil
20
Additional disclosures relating to key
management personnel
Shareholding
The number of shares in the Company
held during the financial year by each
director and other members of key
management personnel of the Company,
including their personally related parties,
is set out below:
2022
Balance at
the start
of the year
Received as
part of
remuneration
Additions
Disposals/ other
Balance at
the date of
this report
Ordinary shares
Tony Sacre
–
–
50,000
–
50,000
Peter Gan
–
–
–
–
–
Dana Larson
250,000
–
–
–
250,000
Sheree Ford
–
–
–
–
–
Alison Evans
–
–
–
–
–
Kevin Moriarty
12,653,000
–
352,694
(90,000)
12,915,694
Jordan Parham
150,000
–
450,000
–
600,000
Matthew Squire
–
–
450,000
–
450,000
13,053,000
–
1,302,694
(90,000)
14,265,694
Performance Rights holding
The number of PR over ordinary shares
in the Company held during the financial
year by each director and other members
of key management personnel of the
Company, including their personally
related parties, is set out below:
2022
Balance at
the start
of the year
Granted
Exercised
Expired/
forfeited/ other
Balance at
the date of
this report
PR over ordinary shares
Kevin Moriarty
800,000
–
–
(800,000)
–
Dana Larson
100,000
–
–
(100,000)
–
Matthew Squire
–
3,500,000
(300,000)
(3,200,000)
–
Jordan Parham
1,150,000
–
(400,000)
(250,000)
500,000
2,050,000
3,500,000
(700,000)
(4,350,000)
500,000
Refer to note 18 for further disclosure
of performance rights.
Matthew Squire was granted
Performance Rights after the
Company obtained approval under
ASX Listing Rule 10.14.
None of the performance rights
outstanding as at the date of this
report are vested and therefore
cannot be exercised.
This concludes the audited
remuneration report.
21
Indemnification and insurance of
officers and auditors
No indemnities have been given or
insurance premiums paid, during or
since the end of the financial year, for any
person who is or has been an auditor of
1414 Degrees Limited.
The Company has indemnified the
Directors and executives of the Company
for costs incurred, in their capacity as a
Director or executive, for which they may
be held personally liable, with standard
exceptions for fraud and misconduct.
During the financial year, the Company
paid a premium in respect of a contract
to insure the Directors and executives
of the Company against a liability to the
extent permitted by the Corporations
Act 2001. The contract of insurance
prohibits disclosure of the nature of the
liability and the amount of the premium.
Proceedings on behalf of the company
No person has applied to the Court
under section 237 of the Corporations
Act 2001 for leave to bring proceedings
on behalf of the Company, or to
intervene in any proceedings to which
the Company is a party for the purpose
of taking responsibility on behalf of
the Company for all or part of those
proceedings.
Non-audit services
Details of the amounts paid or payable
to the auditor for non-audit services
provided by the auditor are outlined in
note 7 to the financial statements. The
amount is nil during the financial year
as no non-audit services were provided
(2021: nil).
Officers of the company who
are former partners of accounting
firm BDO
There are no officers of the Company
who are former partners of Accounting
Firm BDO Audit Pty Ltd.
Auditor’s independence declaration
A copy of the auditor’s independence
declaration as required under section
307C of the Corporations Act 2001 is
set out immediately after this directors’
report.
Auditor
Accounting Firm BDO Audit Pty Ltd
continues in office in accordance
with section 327 of the Corporations
Act 2001.
This report is made in accordance with
a resolution of directors, pursuant to
section 298(2)(a) of the Corporations
Act 2001.
Tony Sacre
Chairman and Non-Executive Director
Dated this 27th day of September 2022
22
BDO Centre
Level 7, 420 King William Street
Adelaide SA 5000
GPO Box 2018 Adelaide SA 5001
Australia
Tel: +61 8 7324 6000
Fax: +61 8 7324 6111
www.bdo.com.au
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
DECLARATION OF INDEPENDENCE
BY PAUL GOSNOLD
TO THE DIRECTORS OF 1414 DEGREES LIMITED
As lead auditor of 1414 Degrees Limited for the year ended 30 June 2022, I declare that, to the best of
my knowledge and belief, there have been:
1.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2.
No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of 1414 Degree Limited and the entity it controlled during the period.
Paul Gosnold
Director
BDO Audit Pty Ltd
Adelaide, 27 September 2022
23
Page 12
2022
2021
Note
AUD$
AUD$
5
566,612
486,553
20
1,563,046
-
20
1,730,638
-
-
6,553
1,596,249
1,319,515
Provision for Gas-TESS Decommissioning (Glenelg Project)
500,000
-
1,556
73,739
69,541
50,851
380,879
136,772
997,516
2,933,040
6
1,063,714
1,285,226
149,121
252,949
161,338
83,561
32,695
214,276
276,998
104,249
(1,369,310)
(5,974,178)
8
-
-
(1,369,310)
(5,974,178)
Other comprehensive income for the year
-
-
-
-
-
-
Total comprehensive (loss) for the year
(1,369,310)
(5,974,178)
Basic loss per share
17
(0.68) cents
(3.11) cents
Diluted loss per share
17
(0.68) cents
(3.11) cents
ACN 138 803 620
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
1414 DEGREES LIMITED
Employee Benefits Expense
Share Based Payments (Equity-settled)
Other Income
(Loss) for the year
Occupancy Expenses
Marketing Expenses
Directors Fees
Profit on Sale of 50% of Shares in SiliconAurora
SiliconAurora Fair Value Gain/(Loss)
Items that will be reclassified subsequently to profit or loss:
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
Other Expenses
Finance Costs
(Loss) before income tax
Depreciation and Amortisation
Research and Development Expenses
Administration and Professional Expenses
Income tax benefit / (expense)
Asset Impairment
24
Page 13
2022
2021
Note
AUD$
AUD$
ASSETS
Current assets
Cash and cash equivalents
9
3,549,416
5,704,957
Trade and other receivables
10
3,442,624
544,370
Other current assets
137,021
131,721
Total current assets
7,129,061
6,381,048
Non-current assets
Property, plant and equipment
60,966
173,434
Investments
20
2,500,000
-
Silicon Aurora Loan A/C
64,075
-
Intangible Assets
11
1,822,904
5,661,300
Right-of-use assets
12
414,705
1,601,502
Total non-current assets
4,862,650
7,436,236
Total assets
11,991,711
13,817,284
LIABILITIES
Current liabilities
Trade and other payables
13
444,991
608,819
Other Current Liabilities
14
500,000
-
Provision for employee benefits
58,577
78,825
Lease liabilities
205,000
315,000
Total current liabilities
1,208,568
1,002,644
Non-current liabilities
Provision for employee benefits
75,238
31,072
Lease liabilities (NC)
15
232,167
1,255,232
Total non-current liabilities
307,405
1,286,304
Total liabilities
1,515,973
2,288,948
Net assets
10,475,738
11,528,336
EQUITY
Contributed equity
16
32,656,879
32,486,429
Share Based Payments Reserve
18
323,395
196,904
Accumulated losses
(22,504,536)
(21,154,997)
Total equity
10,475,738
11,528,336
STATEMENT OF FINANCIAL POSITION
1414 DEGREES LIMITED
ACN 138 803 620
The above statement of financial position should be read in conjunction with the accompanying notes.
AS AT 30 JUNE 2022
25
Page 14
2022
2021
Note
AUD$
AUD$
Cash flows from operating activities
Cash received from customers
172,334
50,975
Cash paid to suppliers and employees
(3,019,385)
(2,912,441)
Research & Development tax offset received
-
-
Government grants
-
492,250
Interest received
19,004
18,398
Ovida Payments (Partner Project Contributions)
390,909
-
Interest paid on lease liabilities
-
(42,637)
Net cash inflow/(outflow) from operating activities
19
(2,437,138)
(2,393,455)
Cash flows from investing activities
Purchase of property, plant and equipment
(47,828)
(7,548)
Payments for product development activities
(2,259,751)
(1,376,133)
Partner Project Contributions
1,113,025
-
Government grant received and used for intangible asset
896,000
16,000
Proceeds from 50% sale of SiliconAurora Pty Ltd
20
100,000
-
Research and development tax offset received and used for intangible asset
830,107
1,954,840
Net cash inflow/(outflow) from investing activities
631,553
587,159
Cash flows from financing activities
Proceeds from borrowings
-
-
Repayment of borrowings
-
-
Repayment of lease liabilities
(350,000)
-
Transaction costs related to issues of shares or options
-
(59,492)
Proceeds from exercise of share options
-
-
Proceeds from the issue of shares
-
3,175,540
Net cash inflow/(outflow) from financing activities
(350,000)
3,116,048
Net increase/(decrease) in cash and cash equivalents
(2,155,585)
1,309,752
Net foreign exchange differences
44
(274)
Cash and cash equivalents at beginning of period
5,704,957
4,395,479
Cash and cash equivalents at end of period
9
3,549,416
5,704,957
The above statement of cash flows should be read in conjunction with the accompanying notes.
ACN 138 803 620
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
1414 DEGREES LIMITED
26
Page 15
Contributed
equity
Share Based
Payments
Reserve
Accumulated
Losses
Total equity
$
$
$
$
At 30 June 2020
29,197,369
116,968
(15,215,288)
14,099,049
Adjustment for prior period restatement of leased asset
34,471
34,471
Loss for the year
-
-
(5,974,178)
(5,974,178)
Other comprehensive income
-
-
-
-
Total comprehensive income for the year
-
-
(5,974,178)
(5,974,178)
Employee Share Scheme - Performance Rights Valuation
-
252,949
-
252,949
Employee Share Scheme - Conversion of Performance Rights
173,013
(173,013)
-
-
Contributions of equity net of transaction costs
3,116,047
-
-
3,116,047
3,289,060
79,936
-
3,368,996
At 30 June 2021
32,486,429
196,904
(21,154,997)
11,528,336
Loss for the year
-
-
(1,369,310)
(1,369,310)
Other comprehensive income
-
-
-
-
Total comprehensive income for the year
-
-
(1,369,310)
(1,369,310)
Share Based Payment
11,000
147,820
19,772
178,592
Employee Share Scheme - Performance Rights Valuation
-
138,121
-
138,121
Employee Share Scheme - Conversion of Performance Rights
159,450
(159,450)
-
-
170,450
126,491
19,772
316,713
At 30 June 2022
32,656,879
323,395
(22,504,536)
10,475,738
Transactions with owners in their capacity as owners
The above statement of changes in equity should be read in conjunction with the accompanying notes.
1414 DEGREES LIMITED
ACN 138 803 620
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Transactions with owners in their capacity as owners
27
Page 16
NOTE 1
CORPORATE INFORMATION
NOTE 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(b) Other Income Recognition
Grant
Interest
(c) Goods and Services Tax (GST)
Interest is recognised as interest accrues using the effective interest method. The effective interest method uses the effective interest rate which is the rate that
exactly discounts the estimated future cash receipts over the expected life of the financial asset.
Revenues and expenses are recognised net of GST except where GST incurred on a purchase of goods and services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included
as part of receivables or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which
is recoverable from, or payable to, the taxation authority are classified as operating cash flows.
The address of the Company's registered office and principal place of business is 136 Daws Rd, Melrose Park SA 5039
The following significant accounting policies have been adopted in the preparation and presentation of the financial statements.
The accounting policies have been consistently applied, unless otherwise stated.
All revenue is stated net of the amount of goods and services tax (GST).
The financial statements of 1414 Degrees Limited for the year ended 30 June 2022 were authorised for issue in accordance with a resolution of the directors on 27
September 2022 and cover the Company as required by Australian Accounting Standards.
The financial statements are presented in the Australian currency.
1414 Degrees Limited is a company limited by shares incorporated and domiciled in Australia.
1414 DEGREES LIMITED
ACN 138 803 620
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
(a) Basis of Preparation
These financial statements are general purpose financial statements prepared in accordance with Australian Accounting Standards, Australian Interpretations and
other authoritative pronouncements of the Australian Accounting Standards Board. The Company is a for-profit entity for financial reporting purposes under
Australian Accounting Standards.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable
information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also
comply with International Financial Reporting Standards.
The financial statements have been prepared on an accruals basis and are based on historical costs modified by the revaluation of selected non-current assets,
financial assets and financial liabilities for which the fair value basis of accounting has been applied. Amounts have been rounded to whole dollars.
Grants from the government are recognised at their fair value where there is reasonable assurance that the grant will be received and the Company will comply
with all the attached conditions. Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with
the costs that they are intended to compensate. Government grants relating to intangible assets are deducted from the cost of the asset.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
28
Page 17
NOTE 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Income Tax
(e) Impairment of Assets
(f) Cash and Cash Equivalents
(g) Trade Receivables
(h) Property, Plant and Equipment
- Plant and equipment
2 - 15 years
Plant and equipment is stated at historical cost, including costs directly attributable to bringing the asset to the location and condition necessary for it to be
capable of operating in the manner intended by management, less depreciation and any impairments.
The carrying amount of plant and equipment is reviewed annually by the directors to ensure it is not in excess of the recoverable amount from these assets. The
recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets' employment and subsequent disposal. The
expected net cash flows have been discounted to their present values in determining recoverable amounts.
The depreciable amount of all fixed assets is depreciated on a straight line or diminishing value basis over the asset’s useful life to the Company commencing from
the time the asset is held ready for use. The following estimated useful lives will be used in the calculation of depreciation:
The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period.
Where it is not possible to estimate recoverable amount for an individual asset, recoverable amount is determined for the cash-generating unit to which the asset
belongs.
Current and deferred tax balances relating to amounts recognised directly in other comprehensive income are also recognised in other comprehensive income.
At the end of each reporting period, the Company assesses whether there is any indication that individual assets are impaired. Where impairment indicators exist,
recoverable amount is determined and impairment losses are recognised in profit or loss where the asset's carrying value exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset. Goodwill on business acquisition and the intangible asset that is not yet ready for use is tested for impairment annually, or more frequently if events
or changes in circumstances indicated that they might be impaired.
For the purposes of the Statement of Cash Flows, cash and cash equivalents includes cash on hand and at bank, deposits held at call with financial institutions,
other short term, highly liquid investments, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value and bank overdrafts.
FOR THE YEAR ENDED 30 JUNE 2022
1414 DEGREES LIMITED
ACN 138 803 620
NOTES TO THE FINANCIAL STATEMENTS
Deferred tax assets and liabilities are recognised for all temporary differences, between carrying amounts of assets and liabilities for financial reporting purposes
and their respective tax bases, at the tax rates expected to apply when the assets are recovered or liabilities settled. Exceptions are made for certain temporary
differences arising on initial recognition of an asset or a liability if they arose in a transaction, other than a business combination, that at the time of the
transaction did not affect either accounting profit or taxable profit.
Receivables are recognised and carried at original invoice amount less any allowance for any uncollectible amounts. An estimate for doubtful debts is made when
collection of the full amount is no longer probable. Bad debts are written off when identified.
All trade and other receivables are non interest bearing.
Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable amounts will be available
to utilise those temporary differences and losses.
Gains and losses on disposals are calculated as the difference between the net disposal proceeds and the asset's carrying amount and are included in profit or loss
in the year that the item is derecognised.
The income tax expense for the period is the tax payable on the current period's taxable income based on the national income tax rate adjusted by changes in
deferred tax assets and liabilities attributable to temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
29
Page 18
NOTE 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(i) Intangible Assets
Product Development
(j) Leases
Lease Liabilities
(k) Trade and Other Payables
All trade and other payables are non interest bearing.
(l) Employee benefits
Short-term employee benefits
Other long-term employee benefits
Defined contribution superannuation expense
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 Company's incremental
borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate,
amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur,
and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are
incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following:
future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties.
When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use
asset is fully written down.
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration
is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using
market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
1414 DEGREES LIMITED
ACN 138 803 620
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
The R&D refund is recognised on an accrual basis, calculated using actual costs incurred on eligible activities and is subject to potential review by Government for
up to 5 years.
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.
Trade and other payables represent liabilities for goods and services provided to the Company prior to the year end and which are unpaid. These amounts are
unsecured and are usually paid within 30 days of recognition.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the
shorter. Where the Company 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.
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the
lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct
costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying
asset, and restoring the site or asset.
Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility
studies identify that the project will deliver future economic benefits and these benefits can be measured reliably. Expenditure capitalised comprises costs of
materials and services. The carrying value of development costs is reviewed annually when the asset is not yet available for use, or when events or circumstances
indicate that the carrying value may be impaired. As the asset is not yet available for use, the useful life has not yet been determined.
Right-of-use Assets
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services.
30
Page 19
NOTE 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(m) Contributed Equity
Ordinary shares are classified as equity.
(n) Financial Assets
Financial assets at fair value through profit or loss
Financial assets at fair value through other comprehensive income
Impairment of financial assets
Financial assets at fair value through other comprehensive income include equity investments which the entity intends to hold for the foreseeable future and has
irrevocably elected to classify them as such upon initial recognition.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the entity has transferred substantially all the
risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off.
NOTES TO THE FINANCIAL STATEMENTS
Costs directly attributable to the issue of new shares or options are shown as a deduction from the equity proceeds, net of any income tax benefit.
1414 DEGREES LIMITED
ACN 138 803 620
FOR THE YEAR ENDED 30 JUNE 2022
If the non-vesting condition is within the control of the entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not
within the control of the entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining
vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new
replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification.
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at fair value through profit
or loss. Typically, such financial assets will be 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 a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.
The entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other
comprehensive income. The measurement of the loss allowance depends upon the entity's assessment at the end of each reporting period as to whether the
financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This
represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a
financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime
expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash
shortfalls over the life of the instrument discounted at the original effective interest rate.
Financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value
through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined
based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless, an accounting
mismatch is being avoided.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the American or Black-
Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions
that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other
vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to
profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired
portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts
already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of
whether or not that market condition has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over
the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification.
31
Page 20
NOTE 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(o) Principles of Consolidation
Subsidiaries
(p) Business Combinations
(q) Accounting Standards Issued But Not Yet Effective
(r) Application of new and revised Accounting Standards
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, statement of comprehensive
income, statement of changes in equity and balance sheet respectively.
The acquisition method of accounting is used to account for business combinations by the group.
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other comprehensive income. In all other
cases, the loss allowance is recognised in profit or loss.
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The
consideration transferred for the acquisition of a subsidiary comprises the:
- fair values of the assets transferred
- liabilities incurred to the former owners of the acquired business
- equity interests issued by the group
- fair value of any asset or liability resulting from a contingent consideration arrangement, and
- fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair
values at the acquisition date. The group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or
at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
The excess of the:
- consideration transferred,
- amount of any non-controlling interest in the acquired entity, and
- acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as
goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss
as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of
exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent
financier under comparable terms and conditions.
FOR THE YEAR ENDED 30 JUNE 2022
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value
with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is
remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss.
1414 DEGREES LIMITED
ACN 138 803 620
NOTES TO THE FINANCIAL STATEMENTS
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity where the group 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 group. They are deconsolidated from the date that control ceases.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the group.
The Company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board
('AASB') that are mandatory for the current reporting period.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Company.
There are no accounting standards that have not been early adopted for the year ended 30 June 2022 but will be applicable to the Company in future reporting
periods which are expected to have a material impact on the financial statements.
32
Page 21
NOTE 3
ACCOUNTING ESTIMATES AND JUDGEMENTS
Key Estimates - Impairment
Key Estimates - Gas-TESS Decommissioning Provision
Key Judgements - Product Development
NOTE 4
SEGMENT REPORTING
There is only one segment which is the entire business, which operates entirely within Australia.
2022
2021
AUD$
AUD$
NOTE 5
OTHER INCOME
Interest Received
19,001
18,828
Rent & Office Recoveries
-
4,257
Claim Settlement
151,430
46,718
Ovida Contribution
390,909
-
Other Income
5,272
Government grants
-
416,750
566,612
486,553
NOTE 6
EXPENSES
Profit(loss) before income tax includes the following specific expenses:
Defined contribution superannuation expense
79,691
107,841
Right of Use Assets - Depreciation expense
277,819
103,539
Right of Use Assets - Depreciation adjustment for change in Tripartite Agreement terms
64,851
-
Right of Use Assets - Interest expense
147,758
104,249
Right of Use Assets - Interest adjustment for change in Tripartite Agreement terms
129,240
-
699,359
315,629
The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information.
Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the
C
FOR THE YEAR ENDED 30 JUNE 2022
1414 DEGREES LIMITED
ACN 138 803 620
NOTES TO THE FINANCIAL STATEMENTS
The Company assesses impairment at the end of each reporting period by evaluating conditions and events specific to the Company that may be indicative of
impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions.
With respect to cash flow projections for intangible assets and those with a finite useful life but not yet considered ready for use, relevant inputs have been
factored into valuation models on the basis of management’s expectations regarding the growth of the market and the Company’s ability to capture market share.
Pre-tax discount rates of 11% have been used in all models.
Included within intangible assets at the end of the reporting period is Product Development with a net carrying value of $1,822,904 (2021: $3,789,832 ) being the
carrying value of the Product Development intangible asset of $10,018,165 (2021: $9,801,097) less the associated Government Grant funding of $1,896,000 (2021:
$1,000,000), the R&D refundable tax offsets applied of $5,249,261 (2021: $5,011,265) and the Woodside Energy Technologies Pty Ltd contributions applied
$1,050,000 (2021: Nil). The directors believe that while the development and commercialisation of the technology remains in-progress and the asset is not yet
generating economic benefits (beyond customer trials), it is not considered ready for use. A reliable estimate for the useful life of the asset will only be capable
of being determined once the asset is assessed as ready for use, after which point, amortisation will commence. The directors are satisfied that it is probable that
the intangible asset will generate future economic benefits based on internal financial models and potential project scenario analysis.
The $500,000 provision for decommissioning the Gas-TESS (Glenelg Project) site is based on supplier estimates for removal and reinstatement works on major
components (approximately $300,000), plus an estimate of $150,000 for relocation expenses based on similar costs incurred in past projects, plus $50,000 for
project management, other minor costs, and contingency.
33
Page 22
NOTE 7
AUDITORS' REMUNERATION
Audit services
Amounts paid/payable to BDO for audit/review of the financial statements of the group
35,000
31,225
Amounts paid/payable to the auditor or a related practice of the auditor for other services
-
-
35,000
31,225
NOTE 8
INCOME TAX EXPENSE
Income Tax expense/(benefit) comprises:
Current tax expense/(benefit)
-
-
Adjustments for previous years
-
-
Total current income tax expense
-
-
Origination and reversal of temporary differences
-
-
-
-
Total income tax expense/(benefit) in profit or loss
-
-
Profit/(Loss) from operations before tax
(1,369,310)
(5,974,178)
Income tax calculated at 25.0% (2021: 26%)
(342,328)
(1,553,286)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income
342,328
1,553,286
Non-deductible expenses
79,178
81,795
Assessable income not included in profit/loss
-
4,160
Other reconciling items
(47,422)
(49,319)
Timing differences on deferred tax assets not recognised
3,788
503
Tax losses not recognised
306,784
1,516,147
Tax expense
-
-
NOTE 9
CASH AND CASH EQUIVALENTS
Cash at bank
3,549,416
5,704,957
Cash term deposits
-
-
3,549,416
5,704,957
NOTE 10
TRADE AND OTHER RECEIVABLES
Trade receivables
-
696
R&D refundable tax offset
991,633
538,577
SiliconAurora Sales Proceeds Receivable
2,400,000
-
Other receivables
50,991
5,097
3,442,624
544,370
Current tax expense
1414 DEGREES LIMITED
An amount of $125,381 included as cash has been set aside to support a bank guarantee issued to the landlords of rented properties.
The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax
expense/(benefit) in the financial statements as follows:
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
ACN 138 803 620
Deferred tax expense
34
Page 23
2022
2021
AUD$
AUD$
NOTE 11
INTANGIBLE ASSETS
Product Development - Intellectual Property
Intangible assets under development - at cost
10,018,165
9,801,097
Government Grants applied
(1,896,000)
(1,000,000)
R&D Refundable Tax Offset applied
(5,249,261)
(5,011,265)
Woodside Funding applied
(1,050,000)
-
Goodwill - SiliconAurora
-
1,871,468
1,822,904
5,661,300
Reconciliation of Intangible Assets
Balance at the beginning of the year
5,661,300
8,359,688
Additions
2,259,751
1,376,133
Government Grants applied
(896,000)
(16,000)
R&D Refundable Tax Offset applied
(1,283,163)
(1,125,481)
TESS IND MKII Impairment
(997,516)
GAS TESS Impairment
-
(2,933,040)
Woodside Funding applied
(1,050,000)
-
Sale of SiliconAurora
(1,871,468)
-
Closing carrying value
1,822,904
5,661,300
NOTE 12
NON-CURRENT ASSETS - RIGHT-OF-USE ASSETS
Land and buildings - Right-of-Use
716,307
1,766,174
Less: Accumulated depreciation
(301,602)
(164,672)
414,705
1,601,502
Opening Balance
1,601,502
1,126,136
Initial recognition of Daws Rd lease
-
570,437
Daws Rd amortisation
(214,686)
(60,045)
Asset revaluation on cease of Daws Rd sub-let
119,000
-
Tripartite Lease revaluation on terms adjustment
819,774
-
Tripartite lease amortisation
(51,646)
(35,026)
Sale of SiliconAurora Pty Ltd
(1,859,239)
-
414,705
1,601,502
NOTE 13
Trade and other payables
355,481
395,133
Other payables and accruals
89,510
213,686
444,991
608,819
NOTE 14
OTHER CURRENT LIABILITIES
Provision for Gas TESS Decommissioning
500,000
-
ACN 138 803 620
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Intellectual property consists of TESS (thermal energy storage system) development of bulk energy storage solutions.
No amortisation has been recognised as the intellectual property is not available for use as at 30 June 2022. The intangible asset is tested for impairment
annually. The government grants relate to accelerating the commercialisation of the Company's intellectual property.
TRADE AND OTHER PAYABLES
The recoverable amount of the Company's Product Development intangible asset has been determined by a value-in-use calculation using a discounted cash flow
model, based on an 8 year projection period approved by management.
The following key assumptions were used in the discounted cash flow model:
● 11% pre-tax discount rate;
● No revenue earned until 2024;
● Major project deliverables in 2024, 2027, and 2030.
The discount rate of 11% pre-tax reflects management’s estimate of the time value of money and the Company’s weighted average cost of capital, the risk free
rate and the volatility of the share price relative to market movements.
Management believes the revenue presented in the model is justified, based on the potential indicated in the market.
There were no other key assumptions.
1414 DEGREES LIMITED
35
Page 24
2022
2021
AUD$
AUD$
NOTE 15
NON-CURRENT LIABILITIES - LEASE LIABILITIES
Opening Value
1,255,232
975,485
Revaluation of SiliconAurora Lease to reflect change in timing of lease payments
-
37,983
Initial recognition of Daws Road lease
-
365,437
Revaluation of SiliconAurora Lease on adjustment to terms of Tripartite Agreement
1,014,161
-
Disposal of SiliconAurora Subsidiary
(1,988,964)
-
Revaluation of Daws Rd Lease on cessation of sub-let agreement
151,130
-
Re-class to Current Liability
(199,392)
(123,583)
Lease liabilities
232,167
1,255,232
Rate Applied to
Lease Type
Term
Lease Liability
Tripartite Agreement - Pastoral Lease
40 years
6.23%
-
965,089
Office Space
2 years & 2 months, 1 year right of renewal
4.98%
232,167
290,143
232,167
1,255,232
Total cash outflow for the year ended 30 June 2022
2022
AUD$
Tripartite Agreement - Pastoral Lease
110,000
Office Space
250,000
360,000
NOTE 16
2022
2022
2021
2021
No. of Shares
AUD$
No. of Shares
AUD$
Share capital
Ordinary shares - authorised, issued and fully paid opening balance
200,310,458
32,486,429
172,904,923
29,197,369
Shares issued
100,000
11,000
-
-
Employee Share Scheme - Conversion of Performance Rights
1,575,000
159,450
942,500
173,013
Share Purchase Plan
-
-
26,463,035
3,175,540
Costs of issue
-
-
-
(59,493)
Ordinary shares - authorised, issued and fully paid closing balance
201,985,458
32,656,879
200,310,458
32,486,429
Ordinary shares have no par value.
Capital Management
Management controls the capital of the Company in order to ensure that the Company can fund its operations and continue as a going concern.
The Company's capital includes ordinary share capital and financial liabilities, supported by financial assets. There are no externally imposed capital requirements.
1414 DEGREES LIMITED
ACN 138 803 620
FOR THE YEAR ENDED 30 JUNE 2022
CONTRIBUTED EQUITY
NOTES TO THE FINANCIAL STATEMENTS
Ordinary shareholders are entitled to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on
the shares held. Every ordinary shareholder present at a meeting in person or by proxy is entitled to one vote on a show of hands or by poll.
Management effectively manages the Company’s capital by assessing the Company’s financial risks and adjusting its capital structure in response to changes in
these risks and in the market. There have been no changes in the strategy adopted by management to control the capital of the Company since the prior year and
the objectives for managing capital have been met.
36
Page 25
NOTE 17
EARNINGS PER SHARE
2022
2021
AUD$
AUD$
Earnings per share for profit (loss)
Profit (loss) after income tax
(1,369,310)
(5,974,178)
Profit (loss) after income tax attributable to the owners of 1414 Degrees Ltd
(1,369,310)
(5,974,178)
Profit (loss) after income tax attributable to the owners of 1414 Degrees Ltd used in calculating diluted earnings per share
(1,369,310)
(5,974,178)
Cents
Cents
Basic earnings per share
(0.68)
(3.11)
Diluted earnings per share
(0.68)
(3.11)
Number
Number
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic earnings per share
200,968,335
191,870,410
Adjustments for calculation of diluted earnings per share:
Options over ordinary shares if dilutive
-
-
Convertible notes
-
-
-
-
Weighted average number of ordinary shares used in calculating diluted earnings per share
200,968,335
191,870,410
The 2,250,000 performance rights have not been taken into account when calculating diluted earnings per share as they are anti dilutive.
NOTE 18
SHARE BASED PAYMENTS
ACN 138 803 620
NOTES TO THE FINANCIAL STATEMENTS
1414 DEGREES LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
A Performance Rights plan was established by the Company in the 2019 financial year, whereby the Company may, at the discretion of the board, grant
Performance Rights (PR) over ordinary shares in the Company to certain employees of the Company. The PR are issued for nil consideration and vest in accordance
with performance guidelines established by the board.
700,000 shares were issued to key management personnel in this financial year as part of the Company's Performance Rights plan, with an additional 50,000 shares
issued to key management personnel as part of compensation. In the year ended 30 June 2021 350,000 shares were issued to key management personnel during
the financial year.
37
Page 26
NOTE 18
SHARE BASED PAYMENTS (continued)
Set out below are summaries of PR's outstanding at the end of the financial year:
Balance at
Expired/
Balance at
Vesting and
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
2/04/2019
15/01/2023
$0.00
500,000
-
-
-
500,000
23/07/2020
1/07/2021
$0.00
250,000
-
(250,000)
-
-
23/07/2020
1/07/2022
$0.00
100,000
-
-
(100,000)
-
23/07/2020
15/01/2023
$0.00
1,000,000
-
-
-
1,000,000
30/11/2020
30/11/2021
$0.00
500,000
-
-
(500,000)
-
30/11/2020
30/11/2022
$0.00
400,000
-
-
(400,000)
-
9/04/2021
15/07/2021
$0.00
250,000
-
(200,000)
(50,000)
-
9/04/2021
31/07/2021
$0.00
100,000
-
-
(100,000)
-
9/04/2021
1/09/2021
$0.00
100,000
-
(100,000)
-
-
9/04/2021
15/01/2022
$0.00
325,000
-
(25,000)
(300,000)
-
9/04/2021
15/01/2023
$0.00
100,000
-
-
(50,000)
50,000
9/04/2021
15/01/2024
$0.00
500,000
-
-
-
500,000
9/04/2021
31/12/2021
$0.00
500,000
-
(500,000)
-
-
11/04/2022
14/04/2022
$0.00
-
300,000
(300,000)
-
-
11/04/2022
1/08/2024
$0.00
-
3,200,000
-
(3,200,000)
-
6/06/2022
15/06/2022
$0.00
-
200,000
(200,000)
-
-
6/06/2022
15/06/2023
$0.00
-
200,000
-
-
200,000
-
4,625,000
3,900,000
(1,575,000)
(4,700,000)
2,250,000
Weighted average exercise price
$0.00
$0.00
$0.00
$0.00
$0.00
Balance at
Expired/
Balance at
Vesting and
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
2/04/2019
1/07/2020
$0.00
250,000
-
(75,000)
(175,000)
-
2/04/2019
15/01/2021
$0.00
775,000
-
(125,000)
(650,000)
-
2/04/2019
15/01/2022
$0.00
875,000
-
-
(875,000)
-
2/04/2019
15/01/2023
$0.00
750,000
-
-
(250,000)
500,000
23/07/2020
31/07/2020
$0.00
-
742,500
(542,500)
(200,000)
-
23/07/2020
1/07/2021
$0.00
-
250,000
-
-
250,000
23/07/2020
15/01/2021
$0.00
-
600,000
(200,000)
(400,000)
-
23/07/2020
15/01/2022
$0.00
-
400,000
-
(400,000)
-
23/07/2020
1/07/2022
$0.00
-
100,000
-
-
100,000
23/07/2020
15/01/2023
$0.00
-
1,000,000
-
-
1,000,000
30/11/2020
30/11/2021
$0.00
-
700,000
-
(200,000)
500,000
30/11/2020
30/11/2022
$0.00
-
600,000
-
(200,000)
400,000
9/04/2021
15/07/2021
$0.00
-
250,000
-
-
250,000
9/04/2021
31/07/2021
$0.00
-
100,000
-
-
100,000
9/04/2021
1/09/2021
$0.00
-
100,000
-
-
100,000
9/04/2021
15/01/2022
$0.00
-
325,000
-
-
325,000
9/04/2021
15/01/2023
$0.00
-
100,000
-
-
100,000
9/04/2021
15/01/2024
$0.00
-
500,000
-
-
500,000
9/04/2021
31/12/2021
$0.00
-
500,000
-
-
500,000
2,650,000
6,267,500
(942,500)
(3,350,000)
4,625,000
Weighted average exercise price
$0.00
$0.00
$0.00
$0.00
$0.00
1414 DEGREES LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
ACN 138 803 620
NOTES TO THE FINANCIAL STATEMENTS
2022
2021
38
Page 27
NOTE 18
SHARE BASED PAYMENTS (continued)
There are no Performance Rights exercisable at the end of the financial year.
The weighted average remaining contractual life of Performance Rights outstanding at the end of the financial year was 0.80 years (2021: 0.94).
2022
2021
NOTE 19
AUD$
AUD$
Reconciliation of profit after income tax to net cash flow from operating activities
Loss for the year
(1,369,310)
(5,974,178)
Non-cash flows in profit/(loss):
- Depreciation and Amortisation (excluding SiliconAurora)
253,574
136,772
- Share Based Payments
316,713
252,949
- Foreign exchange differences
(44)
274
- SiliconAurora Sale Proceeds
(2,400,000)
-
- 50% of JV Assets sold
769,362
-
- Silicon Aurora Investment Fair Value Adjustment
(1,730,638)
-
- Asset Impairment
997,516
2,933,040
- Provision for Gas-TESS decommissioning
500,000
-
Change in operating assets and liabilities
- (increase)/decrease in trade and other receivables
18,522
771
- (increase)/decrease in other current assets
(5,300)
11,161
- (increase)/decrease in lease liability
350,000
-
- increase/(decrease) in trade and other payables
(161,451)
241,393
- increase/(decrease) in employee benefits
23,918
4,363
Net cash flow from operating activities
(2,437,138)
(2,393,455)
NOTE 20
Number of Shares Sold
1,105,672
AUD$
Initial Payment Received - 29 June 2022
100,000
Balance Payment Received - 29 July 2022
900,000
Deferred Payment - Due 30 days from Connection Agreement
1,500,000
Total Sale consideration
2,500,000
Net Assets
50% Sold
SiliconAurora Assets Sold
PP&E
58,552
29,276
Right of Use asset
1,859,239
929,619
Goodwill
1,871,468
935,734
Lease & Other accrued liabilities
(2,250,535)
(1,125,267)
769,362
Call Option Valuation (12,119,127 Options)
167,592
936,954
Consolidated Profit on disposal of 50% of Net Assets in SiliconAurora Pty Ltd
1,563,046
ACN 138 803 620
During the year the expense recognised in relation to the valuation of these Performance Rights was $138,121.
DISPOSAL OF SUBSIDIARY
On 13 December 2019 1414 Degrees Ltd (14D) acquired 100% of the issued shares in SolarReserve II Pty Ltd (Renamed to SiliconAurora Pty Ltd). SiliconAurora owns
the Aurora Energy Project near Port Augusta in South Australia and includes development approval from the South Australian government for a Battery Energy
Storage System (BESS) up to 140 MW / 280 MWh, 70 MW solar photo-voltaic array (PV) and 150 MW concentrated solar thermal plant (CSP) as well as connection to
the adjacent 275 kV transmission line.
On 19 June 2022 14D entered into an agreement for the sale of 50% of the shares in SiliconAurora Pty Ltd to a wholly owned subsidiary of Vast Solar Pty Ltd (Vast
Solar). In addition, 14D and Vast Solar have executed a Shareholders Agreement that will govern the ongoing operation of Silicon Aurora and the development of
the Aurora Energy Project.
CASH FLOW INFORMATION
All Performance Rights granted during the year had zero dollar exercise price, such Rights have a default value per Right being the Company share price on grant
date. Therefore an option pricing model for estimating the fair value of Rights granted was not required.
1414 DEGREES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Sale of 50% of the shares in SiliconAurora Pty Ltd to Vast Solar Aurora Pty Ltd
39
Page 28
NOTE 20
Silicon Aurora Fair Value Adjustment
Opening value
1,538,724
Sale of 50% of SiliconAurora Investment to Vast Solar Aurora Pty Ltd
(769,362)
Value on Sale Completion
769,362
Fair Value Adjustment
1,730,638
Closing balance
2,500,000
NOTE 21
CONTINGENCIES
Contingent Liabilities
At 30 June 2022 those charged with governance of the Company note that there are no known contingent liabilities (2021: nil).
NOTE 22
RELATED PARTY
(a)
Related Party Transactions
There were no transactions with related parties during the year ended 30 June 2022
(b)
Director and Director-related Interests in the Company
NOTE 23
KEY MANAGEMENT PERSONNEL COMPENSATION
The totals of remuneration paid to KMP of the Company during the year are as follows:
2022
2021
AUD$
AUD$
Short-term employee benefits
800,395
823,291
Post-employment benefits
50,407
67,339
Other long term benefits
7,165
13,112
Share-based payments
57,040
50,800
Total KMP compensation
915,007
954,542
These amounts represent the Company's employee benefits and shared-based-payments expense for the year.
NOTE 24
FINANCIAL RISK MANAGEMENT
Note
2022
2021
AUD$
AUD$
Financial Assets
Financial Assets at amortised cost:
Cash and cash equivalents
9
3,549,416
5,704,957
Trade and other receivables - SiliconAurora Sales Proceeds
10
2,400,000
-
Trade and other receivables - R&D tax refund
10
991,633
538,577
Total financial assets
6,941,049
6,243,534
Financial Liabilities
Financial Liabilities at amortised cost:
Trade and other payables
13
444,991
608,819
Lease Liabilities
437,167
1,570,232
Total financial liabilities
882,158
2,179,051
1414 DEGREES LIMITED
ACN 138 803 620
The totals for each category of financial instruments, measured in accordance with AASB 9 as detailed in the accounting policies to these financial statements, are
as follows:
DISPOSAL OF SUBSIDIARY (continued)
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless
otherwise stated.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
The Company's financial instruments consist mainly of deposits with banks, accounts receivable and payable.
Disclosures relating to director and director-related interests, as well as key management personnel are set out in Note 23 below and the remuneration report
included in the director's report.
1414 Degrees Ltd.'s remaining 50% share in SiliconAurora was remeasured to its fair value of $2,500,000 on completion of the sale to Vast Solar Aurora Pty Ltd.
40
Page 29
NOTE 24
FINANCIAL RISK MANAGEMENT (continued)
Market Risk
Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.
Liquidity Risk
Financial liability and financial asset maturity analysis
AUD$
AUD$
AUD$
AUD$
AUD$
AUD$
AUD$
AUD$
2022
2021
2022
2021
2022
2021
2022
2021
444,991
608,819
-
-
-
-
444,991
608,819
205,000
315,000
232,167
333,104
-
922,128
437,167
1,570,232
649,991
923,819
232,167
333,104
-
922,128
882,158
2,179,051
Cash at bank
3,549,416
5,704,957
-
-
5,704,957
3,391,633
538,577
-
-
538,577
Cash term deposits
-
-
-
-
-
6,941,049
6,243,534
-
-
6,243,534
The Company’s activities have no material exposure to financial risks of changes in interest rates. The Company analyses it’s risk by considering sensitivity on its
interest rate exposures and determining the potential impact on it’s effected expenses and revenue of movements in these rates. If the potential variance is
material then management may seek to minimise this exposure but it does not consider this to be the case at this time.
The Company undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the
entity's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.
In common with all other businesses, the Company is exposed to risks that arise from its use of financial instruments. This note describes the Company’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 Company’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.
The Company does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the group,
except for the Australian Taxation Office which is the counterparty to the R&D refundable tax offset shown in note 10 and Vast Solar Pty Ltd which is our Joint
Venture partner following their purchase of 50% of the shares in Silicon Aurora Pty Ltd. Trade receivables represent the maximum exposure to credit risk, credit
quality is considered good.
General objectives, policies and processes
Within 1 year
1414 DEGREES LIMITED
ACN 138 803 620
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
-
-
6,941,049
-
Trade and other
payables
3,391,633
Trade and other
receivables
-
Lease Liabilities
Financial assets - cash
flows realisable
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The directors manage liquidity risk by monitoring
forecast cash flows and ensuring that the Company's operations are adequate to meet liabilities due.
1 to 5 years
Over 5 years
Total
-
Financial liabilities
due for settlement
-
-
3,549,416
-
-
41
Page 30
NOTE 24
FINANCIAL RISK MANAGEMENT (continued)
Sensitivity Analysis
Interest rate risk
Foreign currency risk
2022
2021
2022
2021
Cash at bank held in or trade payables denominated in
AUD$
AUD$
AUD$
AUD$
US dollars
840
772
-
-
Euros
486
510
-
-
1,326
1,282
-
-
NOTE 25
COMMITMENTS FOR EXPENDITURE
There was one capital commitment as at 30 June 2022 (2021: nil)
Asset Class
1 to 5 years
Over 5 years
Plant & Equipment - Furnace
-
-
Management has considered that both a positive and negative 1% variance is sufficient to illustrate the potential variations in interest income.
At 30th June 2022 investment in Cash, Fixed Interest and Floating Interest rate deposits amounted to $3,549,416. A +/-1% change in interest rates during the year
ended 30th June 2022 will result in a +/- change in net interest income of $35,494.
At 30th June 2021 investment in Cash, Fixed Interest and Floating Interest rate deposits amounted to $5,704,957. A +/-1% change in interest rates during the year
ended 30th June 2021 will result in a +/- change in net interest income of $57,050.
Assets
Liabilities
NOTES TO THE FINANCIAL STATEMENTS
The Company had net assets denominated in foreign currencies of $1,326 as at 30 June 2022 (2021: $1,282).
Based on this exposure, had the Australian dollar weakened by 10%/strengthened by 5% (2021: weakened by 10%/strengthened by 5%) against these foreign
currencies with all other variables held constant, the Company's profit before tax for the year would have been $133 lower/$66 higher (2021: $128 lower/$64
higher) and equity would have been $133 lower/$66 higher (2021: $128 lower/$64 higher).
The percentage change is the expected overall volatility of the significant currencies, which is based on management’s assessment of reasonable possible
fluctuations taking into consideration movements over the last 6 months each year and the spot rate at each reporting date.
The actual foreign exchange loss for the year ended 30 June 2022 was $6,138 (2021: loss of $497).
1414 DEGREES LIMITED
ACN 138 803 620
FOR THE YEAR ENDED 30 JUNE 2022
Within 1 Year
521,213
42
Page 31
NOTE 26
SUBSEQUENT EVENTS
NOTE 27
INTERESTS IN SUBSIDIARIES
Name
2022
2021
SiliconAurora Pty Ltd (ceased consolidating in 2022)
50%
100%
Aurora FinCo Pty Ltd
100%
100%
NOTE 28
DEFERRED TAXES
The balance comprises temporary differences attributable to:
2022
2021
Deferred tax assets attributable to:
Capital Raising Costs - 5yr write-off
3,603
32,754
Employee benefits
33,454
27,394
Superannuation accrual
8,587
10,858
Interest accrual
-
15,571
Lease liability
58,042
313,808
103,685
400,386
Set-off deferred tax liabilities pursuant to set-off provisions:
Deferred tax liabilities attributable to:
Accrued interest revenue
(9)
(10)
Right of use asset
(103,677)
(400,376)
(103,685)
(400,386)
Net deferred tax asset/(liability) balance
-
-
Deductible temporary differences have been brought to account as Deferred Tax Assets above to the extent they offset Deferred Tax Liabilities
Unrecognised deductible temporary differences relating to Capital Raising Costs $109,157 (2021: $257,798)
The company has no franking credits available for use in subsequent reporting periods.
The amount of gross tax losses carried forward though not brought to account as Deferred Tax Assets is $15,255,878 (2021: $14,171,581).
An Extraordinary General Meeting was held on 28 July 2022, following receipt of a section 249D notice from Focem Pty Ltd as trustee for the Towarnie
Superannuation Fund (Focem) (being a company associated with Dr Kevin Moriarty), as announced to the market on 1 June 2022. The meeting considered the
resolutions proposed by Focem in the Notice, with the outcome being that Dr Kevin Moriarty was elected as a Director of the Company. The Company received a
second section 249D notice from a group of shareholders as announced to the market on 12 September 2022. A member meeting has been convened for 11
November 2022 to consider the resolutions. The Company also wishes to advise that Sheree Ford resigned as a non-executive director on 15 September 2022 for
personal reasons.
Ownership Interest
The financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1:
1414 DEGREES LIMITED
ACN 138 803 620
Australia
Australia
Principal place of business /
Country of incorporation
43
Page 32
In accordance with a resolution of the directors of 1414 Degrees Limited, the directors of the Company declare that:
1
2
3
4
The directors have been given the declarations as required by s295A of the Corporations Act.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:
Tony Sacre
Chairman and Non-Executive Director
Sydney
Dated this 27th day of September 2022
In the directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
1414 DEGREES LIMITED
ACN 138 803 620
DIRECTORS' DECLARATION
The financial statements, comprising the statement of profit or loss and other comprehensive income, statement of financial position, statement of cash
flows, statement of changes in equity and accompanying notes are prepared in accordance with Australian Accounting Standards and present a true and fair
view of the Company's financial position as at 30 June 2022 and its performance for the year ended on that date.
The Company has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial
Reporting Standards.
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BDO Centre
Level 7, 420 King William Street
Adelaide SA 5000
GPO Box 2018 Adelaide SA 5001
Australia
Tel: +61 8 7324 6000
Fax: +61 8 7324 6111
www.bdo.com.au
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF 1414 DEGREES LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of 1414 Degrees Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Company in accordance with the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
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Accounting and disclosure for the loss of control over a subsidiary
KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
The measurement and treatment for the disposal
of a subsidiary as set out in note 20 is a key audit
matter due to:
The significance of the impact of the
transaction on profit or loss.
The extent of audit procedures undertaken to
evaluate management’s application of the
measurement and recognition criteria for
disposal of a subsidiary as required by AASB
10 Consolidated Financial Statements.
Our audit procedures included, but were not limited to:
Assessing the contractual terms as they related to the
consideration receivable for the disposal.
Vouching that the carrying amount of assets and
liabilities of the disposed subsidiary were fairly stated.
Considering transactions associated with the disposal
including the grant date and fair value of options granted
to the acquirer.
Checking that the disclosure of the disposal accurately
reflected the substance of the transaction, the amounts
involved and met the requirements of AASB 10
Consolidated Financial Statements.
Accounting for the recognition of a joint venture
KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
The recognition and carrying value of the joint
venture as set out in the statement of financial
position and note 20 is a key audit matter due to:
The significance of the total balance.
The extent of audit procedures undertaken to
evaluate management’s application of the
measurement and recognition criteria for
joint venture asset fair value required by
AASB 11 Joint Arrangements.
Our audit procedures included, but were not limited to:
Assessing the contractual terms and arrangements
indicating joint control as defined by AASB 11 Joint
Arrangements.
Considering the evidence supporting the measurement of
the asset fair value on creation of the joint venture with
reference to the consideration payable by the joint
venture partner for their interest.
Intangible Asset – Product Development
KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
The carrying value of the intangible asset
product development – intellectual property as
set out in note 11 is a key audit matter due to:
The significance of the total balance.
The extent of audit procedures undertaken to
evaluate management’s application of the
recognition criteria for internally generated
intangible assets required by AASB 138
Intangible Assets.
Our audit procedures included, but were not limited to:
Assessing the composition of development costs and the
capitalisation criteria against the requirements of AASB
138 – Intangible Assets.
Considering the application of third party funding and
verifying amounts applied to underlying agreements.
Agreeing a sample of additions to supporting
documentation, and ensuring the amounts were
appropriately capitalised.
46
KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
The level of judgment applied by
management and inherent subjectivity in
their assessment of the potential impairment
of the asset and compliance with the
requirements of AASB 136 Impairment of
Assets.
Obtaining an understanding of the key processes and
controls associated with the allocation of costs to the
product development category.
Considering and evaluating assumptions contained within
management’s impairment assessment and assessing the
discount rate applied.
Performing a sensitivity analysis on the key financial
assumptions of the forecasted cash flows and discount
rate in the model and considering the likelihood of such
movements in these key assumptions.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2022, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
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 Group’s ability 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 has 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.
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A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 16 to 21 of the directors’ report for the
year ended 30 June 2022.
In our opinion, the Remuneration Report of 1414 Degrees Limited, for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
Paul Gosnold
Director
Adelaide, 27 September 2022
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Shareholder Information
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in
this report is as follows. The information is current as at 21 September 2022.
- 201,985,458 fully paid Ordinary Shares are held by 3,591 individual Shareholders.
- 2,250,000 Unlisted Performance Rights with various performance hurdles are held by 6 individual holders.
- All Ordinary Shares carry one vote per share.
- There is no current on-market buyback.
Range
Securities
%
No. of holders
%
1 to 1,000
21,661
0.01%
62
1.73%
1,001 to 5,000
2,280,881
1.13%
718
19.99%
5,001 to 10,000
6,976,362
3.45%
927
25.81%
10,001 to 100,000
52,517,281
26.00%
1,606
44.72%
100,001 Over
140,189,273
69.41%
278
7.74%
Total
201,985,458
100.00%
3,591
100.00%
Unmarketable Parcels at 10.0 cents per share
840
23.39%
(As disclosed in substantial holding notices given to the Company)
No. of Shares Held
%
FOCEM PTY LTD
12,715,694
6.30%
Rank
Name
No. of Shares Held
%
1 FOCEM PTY LTD
12,715,694
6.30
2 AMMJOHN PTY LTD
6,466,039
3.20
3 MR JOHN HENRY MOSS + MRS WENDY ELIZABETH MOSS
5,249,188
2.60
4 MEWTWO GLOBAL INVESTMENTS
4,333,333
2.15
5 MR HAROLD TOMBLIN + MRS JUDITH JOHNSTON
4,206,976
2.08
6 MR ROBERT JOHN KEITH SHEPHERD + MRS LYNETTE DOROTHY SHEPHERD
4,015,216
1.99
7 BNP PARIBAS NOMS PTY LTD
3,673,425
1.82
8 MR JOHN LANGLEY HANCOCK
2,778,333
1.38
9 MRS SUSAN JACQUELINE JOHNSON
2,657,448
1.32
10 MR TREVOR WRIGHT + MRS OLIVE WRIGHT
2,500,000
1.24
11 CITICORP NOMINEES PTY LIMITED
2,445,497
1.21
12 BENGER SUPERANNUATION PTY LIMITED
2,300,000
1.14
13 LHO LA PTY LTD
2,000,000
0.99
13 RANAT INVESTMENTS PTY LTD
2,000,000
0.99
15 MR IAN ROSS BURDON + MS CATHERINE LOUISE TAYLOR
1,700,000
0.84
16 KNIGHTS VALLEY LTD
1,666,500
0.83
17 MR IAN ROSS BURDON + MS CATHERINE LOUISE TAYLOR
1,500,000
0.74
18 MR JONATHAN WHALLEY + MRS MARTINE ANNE WHALLEY
1,393,085
0.69
19 MS MARETTA ALYSSA LAYTON
1,357,000
0.67
20 MARHFEL PTY LTD
1,325,000
0.66
Total
66,282,734
32.82
Balance of register
135,702,724
67.18
Grand total
201,985,458
100.00%
Twenty largest holders of Quoted Ordinary Shares
ASX additional information
Share Capital
Distribution of Equity Securities
The number of shareholders, by size of holding, in each class are:
Substantial Shareholders
49
1414 Degrees Ltd
ABN 57 138 803 620
136 Daws Road
Melrose Park SA 5039
E info@1414degreescom.au
T +61 8 8357 8273
W 1414degrees.com.au
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