Atotech Annual Report 2023

Plain-text annual report

Altech Batteries Limited 2023 A N N U A L R E P O R T COMPANY PROFILE ABOUT ALTECH BATTERIES LTD ASX: ATC / FRA: A3Y SILUMINA ANODES BATTERY MATERIALS PROJECT TM CERENERGY BATTERIES PROJECT ® Altech Batteries Ltd is a specialty battery technology company that has a joint venture agreement with world leading German battery institute Fraunhofer IKTS (“IKTS”) to commercialise the revolutionary CERENERGY Sodium Chloride Solid State (SCSS) Battery. CERENERGY batteries are the game-changing alternative to lithium-ion batteries. CERENERGY batteries are ﬁre and explosion-proof; have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and is lithium-free; cobalt-free; graphite-free; and copper- free, eliminating exposure to critical metal price rises and supply chain concerns. ® ® ® The joint venture is commercialising its CERENERGY battery, with plans to construct a 100MWh production facility on Altech's land in Saxony, Germany. The facility intends to produce CERENERGY battery modules to provide grid storage solutions to the market. ® ® Altech has licenced its proprietary high purity alumina coating technology to 75% owned subsidiary Altech Industries Germany GmbH (AIG), which is ﬁnallising a Deﬁnitive Feasibility Study for the development of a 10,000tpa silicon/graphite alumina coating plant in the state of Saxony, Germany to supply its Silumina Anodes product to the burgeoning European electric vehicle market. TM The Company patented its game changing technology of incorporating high-capacity silicon into lithium-ion batteries. Through in house R&D, the Company has cracked the “silicon code” and successfully achieved a 30% higher energy battery with improved cyclability or battery life. Higher density batteries result in smaller, lighter batteries and substantially less greenhouse gases, and is the future for the EV market. The TM Company's proprietary silicon graphite product is registered as Silumina Anodes . The Company is in the race to get its patented technology to market, and a Preliminary Feasibility Study (PFS) for the construction of a 10,000tpa Silumina Anodes material plant at AIG's 14-hectare industrial site within the Schwarze Pumpe Industrial Park in Saxony, Germany. The European graphite and silicon feedstock supply partners for this plant will be SGL Carbon and Ferroglobe. The project has also received green accreditation from the independent Norwegian Centre of International Climate and Environmental Research (CICERO). To support the development, AIG has commenced construction of a pilot plant adjacent to the proposed project site to allow the qualiﬁcation process for its Silumina Anodes product. AIG has executed NDAs with two German automakers as well as a European based battery company. TM TM A LT E C H cerenergy ® The pilot plant is scheduled to be commissioned by end of Q4, 2023. “ALTECH IS A BATTERY ENERGY COMPANY TO MEET A BATTERY STORAGE FUTURE” - IGGY TAN CEO Silumina An desTM OUR VISION MEETING A BATTERY STORAGE FUTURE AS THE WORLD TRANSITIONS TO THE ELECTRIFICATION OF ENERGY SOLUTIONS CHAIRMAN’S REPORT Dear fellow Altech Shareholders, This year has seen Altech successfully move forward with its two key battery projects. Ÿ CERENERGY Sodium Chloride Solid State (SCSS) Battery. ® Ÿ Silumina Anodes Battery Materials. TM On 14 September 2022, Altech announced that it had executed a Joint Venture Shareholders' Agreement with world-leading German battery institute Fraunhofer IKTS (“Fraunhofer”) to commercialise Fraunhofer's revolutionary CERENERGY Sodium Chloride Solid State (SCSS) Battery. ® Altech is the majority owner of the JV company, which is commercialising a 100 MWh battery plant to be constructed on Altech's land in Schwarze Pumpe, ® Germany. The SCSS CERENERGY battery uses common table salt and ceramic solid-state technology. ® Altech believes that CERENERGY batteries are the game-changing grid storage alternative to lithium-ion batteries. CERENERGY batteries are ﬁre and explosion-proof, have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and nickel - is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns. ® The Deﬁnitive Feasibility Study in relation to the CERENERGY 100 MWh battery plant is scheduled to be completed by Q4 of 2023, at which time, the Company aims to execute an offtake agreement and subsequently obtain the required ﬁnance to move forward with construction of the 100 MWh battery plant, to produce the CERENERGY 1MWh GridPack battery, destined for the lucrative and growing grid storage battery market. ® ® TM Altech continued with the development and commercialisation of the Silumina Anodes Battery Materials Project in Saxony, Germany. To this extent, Altech is ﬁnalising construction of the pilot plant to produce 120kg per day of Silumina Anodes for distribution to potential customers, with the aim being to secure an offtake agreement. The pilot plant is scheduled to be commissioned by the end of Q4, 2023. TM In conjunction with this, and with the results achieved from the outstanding Preliminary Feasibility Study for the full-scale plant to produce 10,000tpa of Silumina Anodes , Altech is preparing a Deﬁnitive Feasibility Study that will provide additional assurance over the project. TM Subsequent to the end of the ﬁnancial year, Altech successfully completed a capital raising, receiving gross funds of $15.8 million. The Company is now well funded to move forward on both of its German battery projects. I would like to thank all shareholders for their support during the year. I would also like to extend my gratitude to Managing Director Mr Iggy Tan, as well as the Altech team, for their effort and commitment shown throughout the year. Luke Atkins Non-Executive Chairman BOARD OF DIRECTORS LUKE ATKINS LLB - Non-Executive Chairman A highly qualiﬁed mining executive and lawyer by profession, Mr Atkins has had extensive experience in capital raisings and has held a number of executive and non- executive directorships of private and publicly listed companies including a number of mining and exploration companies. Mr Atkins is the co-founder of ASX-listed Australian Silica Quartz Group Limited (formerly Bauxite Resources Limited) (ASX: ASQ) and is currently the company's non- executive director. Mr Atkins brings to the board extensive experience in the areas of mining, exploration and corporate governance. IGNATIUS (IGGY) TAN B.Sc. MBA, GAICD - Managing Director Mr Tan is a highly experienced mining and chemical executive with a number of signiﬁcant achievements in commercial mining projects such as capital raisings, funding, construction, start-ups and operations. Mr Tan has over 30 years chemical and mining experience and has been an executive director of a number of ASX-listed companies. He holds a Master of Business Administration from the University of Southern Cross, a Bachelor of Science from the University of Western Australia and is a Graduate of the Australian Institute of Company Directors. Mr Tan previously held managing director positions at ASX-listed Kogi Iron Limited (ASX: KFE) and Galaxy Resources Limited (ASX: GXY). PETER BAILEY Independent Non-Executive Director Mr Peter Bailey is a highly experienced and qualiﬁed engineer with over 40 years experience in the mining and industrial chemical production industry. He was previously chief executive ofﬁcer at Sherwin Alumina, an alumina reﬁnery located in Texas, USA. Prior to Sherwin, in 1998 Mr Bailey was president of Alcoa Worldwide Chemical's industrial chemicals department. He was responsible for managing the company's 13 alumina plants that were located in eight countries, with combined annual revenue of approximately US$700 million. In 1996, Mr Bailey was president of Alcoa Bauxite and Alumina and was responsible for eight (8) alumina plants outside of Australia. He was also chairman of the Alcoa Bauxite joint venture in Guinea, Africa. DANIEL TENARDI Non-Executive Director Mr Tenardi is a highly experienced global resource executive with over 40 years experience in the mining and processing sectors. During his extensive career, Mr Tenardi spent 13 years at Alcoa's alumina reﬁnery in Kwinana as well as at the company's bauxite mines in the Darling Ranges of Western Australia. Mr Tenardi was the founding managing director of Bauxite Resources Limited (since renamed Australian Silica Quartz Limited) (ASX: ASQ) where he led the rapid growth of the company from its initial exploration phase, expansion of land holdings, to the commencement of trial shipments of ore. Mr Tenardi was most recently a non-executive independent director of Australian iron ore producer, Grange Resources Limited (ASX: GRR). TUNKU YAACOB KHYRA B.Sc (Hons), CA - Non-Executive Director Tunku Yaacob Khyra is the executive chairman of the Melewar Khyra Group of Companies (Melewar), a Malaysian-based diversiﬁed ﬁnancial and industrial services group. He is the major owner and shareholder of Melewar and sits on the boards of Khyra Legacy Berhad, Mycron Steel Berhad, MAA Group Berhad, Melewar Industrial Group Berhad, Ithmaar Bank B.S.C. (listed on Bahrain Stock Exchange) and several other private companies. Tunku Yaacob graduated with a Bachelor of Science (Hons) Degree in Economics and Accounting from City University, London. An accountant by training, he is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of the Malaysian Institute of Accountants. UWE AHRENS Alternate Non-Executive Director (for Tunku Yaacob Khyra) Mr Uwe Ahrens is executive director of Melewar Industrial Group Berhad and managing director of Melewar Integrated Engineering Sdn Bhd. He also sits on the board of several other private limited companies. Mr Ahrens holds Masters degrees in both Mechanical Engineering and Business Administration from the Technical University Darmstadt, Germany. Upon graduation, Mr Ahrens joined the international engineering and industrial plant supplier, KOCH Transporttechnik GmbH in Germany, now belonging to FLSmidth Group, where he held a senior management position for 12 years, working predominantly in Germany, USA and South Africa. Mr Ahrens is the alternate non-executive director for Tunku Yaacob Khyra. HANSJOERG PLAGGEMARS Non-Executive Director Mr Plaggemars was previously a member of the board of Delphi Unternehmensberatung AG and Deutsche Balaton AG (Altech major shareholder) and currently acts as their representative. Mr Plaggemars is based in Heidelberg, Germany and is an experienced company director and manager. He studied business administration at the University of Bamberg from 1990 to 1995. Mr Plaggemars has been a management consultant since June 2017 and is a board member of various companies within the scope of projects. Mr Plaggemars is currently a member of the management board of Frankfurt Stock Exchange listed Altech Advanced Materials AG. Mr Plaggemars also currently serves as a non-executive director at ASX listed Geopaciﬁc Resources Limited, Wiluna Mining Corporation, Spartan Resources Limited, PNX Metals Limited, Kin Mining Limited and Azure Minerals Limited. Stackable and all weather Altech MWh GridPacks MANAGING DIRECTOR’S REVIEW OF OPERATIONS SUMMARY 4. Nearing completion of the Deﬁnitive Feasibility Study, for the full-scale plant to produce 10,000tpa of Silumina Anodes in Saxony, Germany. Altech acquired an ~14Ha industrial site in Saxony, Germany that is an ideal location for the full-scale plant. TM 5. Continuing the process of securing the green bond and project level equity to ﬁnance the remaining construction for the Johor, Malaysia high-purity alumina production plant. Iggy Tan Managing Director and Chief Executive Ofﬁcer It is with pleasure that I provide a review of Altech's operations. The past year enabled Altech to aggressively move forward with its CERENERGY Sodium Chloride Solid State (SCSS) battery project destined for the grid storage battery market, as well as its patented Silumina Anodes battery materials coating technology, which aims to increase the capacity of lithium-ion batteries by including high-purity alumina coated silicon and graphite in the anode of the battery. TM ® The principal activities of the Company during the ﬁnancial year were: 1. On 14 September 2022, executing a Joint Venture Shareholders' Agreement with world-leading German battery institute Fraunhofer IKTS (“Fraunhofer”) to commercialize Fraunhofer's revolutionary CERENERGY Sodium Chloride Solid State (SCSS) Battery. ® 2. Commercialising a 100MWh plant to produce CERENERGY batteries. To ® this extent, Altech is preparing a Deﬁnitive Feasibility Study scheduled to be ﬁnalised by end of Q4 2023, appointed its major suppliers for the plant's design, launched product designs for the ABS60 CERENERGY 60KWh battery pack as well as ABS1000 CERENERGY 1MWh GridPack, commenced fabrication of two prototype ABS60 CERENERGY 60KWh battery packs and announced the battery speciﬁcations for both the ABS60 and ABS1000. ® ® ® TM 3. Nearing completion of construction by Küttner GmbH & Co on the Silumina Anodes pilot plant that will produce 120kg per day (~37,000 kg per year) of the Silumina Anodes product for product qualiﬁcation with end users, that will assist in securing an offtake agreement for the full-scale plant. The pilot plant is scheduled to be commissioned by end of Q4 2023. TM CERENERGY SODIUM CHLORIDE SOLID STATE BATTERY ® Fraunhofer has estimated that the total cost of production for CERENERGY batteries will be 40%-50% cheaper than lithium-ion batteries. This will be determined in the Deﬁnitive Feasibility Study (“DFS”). ® The joint venture partners are nearing completion of the DFS required for the commercialisation process, with the DFS scheduled to be ﬁnalised by end of Q4 2023. Once the Train 1 (100 MWh) plant is built and operating, the longer-term vision for the joint venture is to construct additional trains or a Gigawatt battery facility. SCSS CERENERGY BATTERIES ® Altech believes that Sodium Chloride Solid State (SCSS) CERENERGY batteries are ® the game-changing grid storage alternative to lithium-ion batteries. CERENERGY batteries are ﬁre and explosion-proof, have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and nickel - is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns. ® The SCSS technology has been developed by Fraunhofer over the last eight years and has revolutionised previous technology, allowing higher energy capacity and lower production costs. SCSS-type batteries, in terms of capacity, have already been successfully tested in stationary battery modules. The Fraunhofer SCSS batteries are in the ﬁnal phase of product testing and ready to commercialise. Fraunhofer has spent in the region of EUR 35 million on research & development and operates a EUR 25 million pilot plant in Hermsdorf, Germany. The ﬁnal CERENERGY battery packs are specially designed for the grid storage market and have been undergoing extensive performance testing in Germany. These modules are designed to ﬁt in racks housed in sea containers that can then be deployed and easily conﬁgured. ® The joint venture partners have elected to develop a 100 MWh SCSS battery plant (Train 1) on Altech’s site in Saxony, Germany. The target market for this project will speciﬁcally focus on the grid (stationary) energy storage market which is expected to grow by 28% CAGR (Compound Annual Growth Rate) in the coming decades. The global grid energy storage market is expected to grow from USD 4.4 billion in 2022 to USD 15.1 billion by 2027. Or further out, the market is expected to grow from 20 GW in 2020 to over 3,000 GW by 2050. Altech believes that SCSS batteries can provide high security, at low acquisition and operating costs, for the stationary energy storage market. THE IDEAL BATTERY? Based on the challenges facing lithium-ion batteries and the increasing prices of the critical materials and metals used in these batteries, the industry has been searching for a battery technology that resolves these problems. A battery that is ﬁre and explosion proof, has a lifespan of more than 15 years, and operates in cold and desert climates. A battery technology where it is lithium free, cobalt free, graphite free and ﬁnally copper free, which limits the exposure to critical materials prices rises and supply chain concerns. Altech believes that SCSS CERENERGY batteries resolve some of the biggest problems and challenges facing lithium-ion batteries today. SCSS CERENERGY batteries are not designed to replace the successful lithium-ion batteries, but provide an ideal alternative for the stationary storage market. ® ® GRID STORAGE MARKET Grid energy storage (also called large-scale energy storage) is a collection of methods used for energy storage on a large scale within an electrical power grid. Electrical energy is stored during times when electricity is plentiful and inexpensive (especially from intermittent power sources such as renewable electricity from wind power, tidal power, and solar power) or when demand is low, and later returned to the grid when demand is high, and electricity prices tend to be higher. Developments in battery storage have enabled commercially viable projects to store energy during peak production and release it during peak demand, and for use when production unexpectedly falls giving time for slower responding resources to be brought online. ® Altech’s CERENERGY batteries are targeted to supply this grid energy storage market which is expected to grow by a 28% compound annual growth rate in the coming decades. The global grid energy storage market is expected to grow from USD 4.4 billion in 2022 to USD 15.1 billion by 2027. Or further out, growth is expected from 20 GW in 2020 to over 3,000 GW by 2050. Ceramic solid-state electrolyte at Fraunhofer pilot plant facility SCSS individual cell rated at 2.58 V each LAUNCH OF CERENERGY 60KWH BATTERY PACK (ABS60) DESIGN FOR RENEWABLE ENERGY STORAGE MARKET ® LAUNCH OF CERENERGY 1MWH GRIDPACK (ABS1000) DESIGN FOR RENEWABLE ENERGY STORAGE MARKET ® ® Altech designed and launched the CERENERGY 1.0 MWh GridPack (ABS1000). Based on preliminary discussions with potential off-takers and to minimise on site installation of individual ABS60 60KWh battery packs, a pre-installed solution has been launched. Each GridPack will have up to eighteen 60 KWh battery packs installed and connected to pack power management system. Every GridPack has a distinct rating of 600 volts DC and 100 Ah, and it can be arranged in series (cluster or array) to achieve the required rating of several thousand KWs for grid functioning. A video in relation to this can be viewed on Altech’s website. Altech designed and launched the CERENERGY 60 KWh battery pack (ABS60). Based on preliminary discussions with potential off-takers for the 100MWh CERENERGY battery project, the 60 kilowatt-hour (KWh) battery pack (ABS60) is rated at a higher voltage of 620 volts and 100 amp hour (Ah). ® ® A video of the battery design can be seen on Altech web site www.altechgroup.com or on YouTube https://youtu.be/OHPdGvaOlmI ABS60 60 KWh 620 Volts 100 Ah 60 KWh Battery Pack 1.0 MWh GridPack (ABS1000) LAUNCH OF CERENERGY 1MWH GRIDPACK (ABS1000) DESIGN FOR RENEWABLE ENERGY STORAGE MARKET ® The Altech GridPacks have been speciﬁcally engineered to adhere to the Ingress Protection (IP) 65 standard (relating to a high level of electrical enclosure sealing), ensuring complete protection from both dust and inclement weather. This means that there is no need for any additional shelters or buildings to house the Altech GridPack batteries, and they can be safely installed outdoors in any weather conditions. The Altech GridPacks will be constructed using a sea container design, which facilitates their easy transportation by sea or road to the installation site, as well as ensuring simple installation. The “plug and play” feature of the site installation for the GridPacks ensures that they can be easily installed in remote locations. Additionally, the containers have been designed to be stackable, which minimises the battery footprint. Unlike other mega battery pack designs on the market, these GridPacks can be stacked on top of each other. This stackable feature, coupled with the “plug and play” design, makes the GridPacks easily scalable and adaptable to meet future energy storage requirements of the site. Furthermore, the Altech GridPacks are designed without the requirement for any moving parts such as cooling fans, which are typically found in lithium-ion battery mega packs. This is a notable advantage as end-use customers have raised concerns about the noise generated by mega packs, preventing them from being placed near residential areas. With the absence of any moving parts, the Altech GridPacks are completely noise-free operation, making them an ideal solution for noise-sensitive environments. Finally, GridPacks are low in maintenance costs over the battery life. The Altech 1 MWh GridPacks are designed to operate in any climate, without the need for thermal management. The battery's internal temperature remains relatively constant throughout the charging and discharging cycles, due to its endothermic and exothermic properties. These 1 MWh GridPacks will offer signiﬁcant beneﬁts for the fast growing renewable energy and grid storage sectors. These larger battery packs are capable of storing more energy, resulting in more efﬁcient utilisation of renewable energy sources such as wind and solar power. Altech believes that the proposed GridPacks are an excellent means of stabilising the grid by providing a source of backup power during periods of high demand or when renewable energy sources are not producing at capacity. They are also a cost-effective solution for storing and distributing renewable energy across a variety of applications, including grid-scale storage, microgrids, and electric vehicle charging. Moreover, they are non-ﬂammable and pose zero ﬁre and explosion hazards. With a projected lifespan of over 15 years with unlimited cycling and can operate in extreme cold and hot climates. Altech believes that these GridPacks will be the preferred choice for customers seeking a reliable and long-lasting energy storage solution. Containers have been designed to be stackable, minimising the battery footprint TWO ABS60 60 KWH BATTERY PACK PROTOTYPES IN PRODUCTION Altech has commenced production and fabrication of two prototypes of the 60 KWh (ABS60) CERENERGY battery packs at the Fraunhofer IKTS facility in Hermsdorf, Germany. Once completed, the battery packs will undergo cycling testing under extreme conditions, and they will be available for testing at customer premises. ® The design for the CERENERGY 60 KWh battery pack was launched by Altech and its joint venture partner Fraunhofer, on 7 November 2022. This battery pack boasts a rated operating voltage of 600 volts at 100 amp (A). ® Following the launch, the joint venture carried out extensive cycling simulations to evaluate the temperature proﬁle of the internal components of the battery. Typically, the charging process involves a net endothermic (heat energy absorption) reaction, whereas the discharge process leads to an exothermic (heat energy release) reaction. The simulations indicate that the battery can undergo charge and discharge cycling while maintaining stable internal temperatures without overheating, even under extreme conditions such as a desert environment, where the ambient temperature was recorded at 60°C. No instances of overheating were reported during these simulations. Based on the results of these simulations, the speciﬁcations for the 60 KWh battery packs have been ﬁnalised, and orders for materials required for the production of two prototype batteries have been placed. This process involves the manufacture of 480 ceramic solid-state cells, along with the production and procurement of auxiliary equipment including but not limited to cabling, module structures, composite isolation cabinet and battery management system (BMS). CERENERGY PROPOSED BATTERY SPECIFICATIONS ® Altech has released preliminary battery speciﬁcations for its CERENERGY 60 KWh (ABS60) and 1 MWh (ABS1000) GridPack battery products. Collaborating closely with its joint venture partner Fraunhofer, Altech has developed these speciﬁcations to cater to the evolving needs of the renewable energy and grid storage market. These preliminary speciﬁcations serve as a signiﬁcant milestone for Altech, enabling the company to initiate discussions with potential off-take partners and secure future sales. ® The increasing demand for renewable energy sources, coupled with the intermittent nature of renewable power generation, has underscored the critical need for efﬁcient and reliable energy storage solutions. Grid storage batteries have emerged as a key enabler for balancing energy supply and demand, ensuring stable power delivery, and maximising the utilisation of renewable energy sources. The transition of countries like Germany to a power system heavily reliant on weather- dependent renewables is reaching its limitations, a challenge that all nations adopting wind and solar energy will eventually confront. The absence of sunlight and wind for prolonged periods raises concerns about power supply. Additionally, the short, dark, and cold days of midwinter pose a speciﬁc problem for meeting countries’ power demand through renewables. In addition to shortages, surpluses also pose a signiﬁcant issue. On days when sunlight is abundant, but demand is low, excess power is discharged to the ground. This results in substantial wastage of electrical power. Germany alone wastes approximately EUR 2 billion annually due to this discharge. Similarly, the state of California wastes approximately US$3 billion of renewable energy each year due to surpluses or lack of grid capacity to bring the power to where it is needed. Excess power in the grid can lead to negative prices, compelling grid operators to pay customers to consume electricity. The expansion of renewables ampliﬁes the volatility within the system. Grid battery storage is crucial to maintain a delicate balance in power supply to ensure a stable and reliable energy infrastructure, whilst accommodating the ﬂuctuations inherent in renewable energy sources. The grid energy storage market is expected to grow by a 28% compound annual growth rate in the coming decade. Altech recognises the potential of this market and aims to contribute to its growth and development through the introduction of its CERENERGY battery products. Altech has developed cutting-edge battery speciﬁcations that meet the speciﬁc requirements of this sector. The preliminary speciﬁcations for the CERENERGY 60 KWh (ABS60) battery pack, as well as the 1 MWh (ABS1000) GridPack battery products, are outlined below: ® ® SPECIFICATIONS 60 KWH BATTERY PACK (ABS60) The 60 KWh Battery Pack (ABS60) is rated at an operating voltage of 600 volts and 100 amp (Ah). The battery is designed to provide battery backup and excellent performance in grid-tied commercial applications for an uninterrupted power supply. Battery Type: Application: Battery Pack ABS 60 Sodium Nickel Chloride Solid State Battery Power Grid Operation & Renewable Energy Storage ABS 60 - Battery Pack 500mm x 2330mm x 1100mm ͌ 800kg 600 V DC 410 V DC (min) to 670 V DC (max) 100Ah Nominal cont. 25 A / trans. 33A min. 270° C - max. 350° C ~40° C to 60° C IP65 Dimensions Weight: Nom. Voltage: Voltage Range: Current Capacity: Discharge Current: Internal Ops Temp.: Ambient Ops Temp.: IP Rating: Nominal Energy Capacity: 60kWh Operational SoC Range: 15% - 95% (80%) C-Rate: C-Rate Power Mode: 24h Cycle Capacity: Cycle per day: Design Life: Warranty: 0.16C - 0.33C bi-directional 0.5C for 15 Minutes Yes, continuous without interruptions up to 3 @ 80% >15 years 5 years or 5000 cycles Note: A AC conversion included, all permits on AC BMS included SPECIFICATIONS 1 MWH GRIDPACK (ABS1000) The ABS1000 GridPack battery targets larger-scale applications, such as grid-level storage and industrial power backup. With a capacity of 1 MWh, this high-performance battery system ensures a stable and uninterrupted power supply, contributing to grid stability and reducing reliance on fossil fuels. The preliminary speciﬁcations for the ABS1000 GridPack battery positions Altech as a frontrunner in the grid storage market, offering a technologically advanced and commercially viable solution to meet the industry's evolving needs. ABS 1000 - Grid Pack 18 Battery Pack, with controller BMS Open standard high cube 20ft Container 20ft high cube container 2.4m x 5.9m x <27m <17t 600 V DC 410 V DC (min) to 670 V DC (max) 100Ah Nominal cont. 25 A / trans. 33A min. 270° C - max. 350° C ~40° C to +60° C IP65, CE Arrangement: Dimensions: Delivery: Weight: Nom. Voltage: Voltage Range: Current Capacity: Discharge Current: Internal Ops Temp.: Ambient Ops Temp.: IP Rating: Nominal Energy Capacity: 1MWh / nominal 1,08 MWh Operational SoC Range: 15% - 95% (80%) C-Rate: C-Rate Power Mode: 24h Cycle Capacity: Cycle per day: Design Life: Warranty: 0.16C - 0.33C bi-directional 0.5C for 15 Minutes Yes, continuous without interruptions up to 3 @ 80% >15 years 5 years or 5000 cycles * Levelised energy storage cost is the overall costs including capital, maintenance and operating cost over the life of the battery GridPack USP - Macro Parameters Ÿ Safe, non-ﬂammable, zero ﬁre and explosive hazards Ÿ No location limitation Ÿ Stackable up to 3 GridPacks Ÿ Operates in any climate without external thermal management, forced cooking Ÿ Negligible maintenance costs Ÿ Plug and play ready to operate Ÿ High availability (>99%) Ÿ Battery may be idle for any period of time and be restarted without capability loss Ÿ Round-trip efﬁciency of avg. 90% (DC) Ÿ Lowest levelised energy storage costs Ÿ Can be shipped fully assembled The Altech GridPacks have been engineered to ensure complete protection from both dust and any external environments. This means that there is no need for any additional shelters or buildings to house the Altech GridPack batteries, and they can be safely installed outdoors in any weather conditions. The Altech GridPacks will be constructed using a sea container design, which facilitates their easy transportation by sea or road to the installation site, as well as ensuring simple installation. Unlike other mega battery pack designs on the market, these GridPacks can be stacked on top of each other. The ability of the GridPacks to be stacked minimises the battery footprint and permits easy scalability to meet any energy storage requirements. The stackable feature, coupled with the "plug and play" design, makes the GridPacks the obvious choice for BESS solutions to meet any future energy storage requirements. The Altech GridPacks are also designed without the requirement for any moving parts such as cooling fans, which are typically found in lithium-ion battery mega packs. This is a notable advantage, as end-users have raised concerns about the noise generated by mega packs, preventing them from being placed near residential areas. With the absence of any moving parts, the Altech GridPacks are practically maintenance-free and completely noise-free in operation, making them an ideal solution for remote and noise-sensitive environments. Schwarze Pumpe Industrial Site Saxony, Germany Location of ~14Ha Industrial Site Saxony, Germany SILUMINA ANODES PROJECT TM TM The Silumina Anodes project involves combining silicon and graphite, and then coating this composite product with a nanometre layer of high-purity alumina, for inclusion in lithium battery anodes to increase lithium battery capacity. Altech advanced this technology during the year and continues to progress with commercialisation of the product. The Company has made signiﬁcant progress in incorporating high-capacity high-purity alumina-coated silicon and graphite in lithium-ion batteries, and has previously concluded a Preliminary Feasibility Study for the construction of a 10,000tpa Silumina Anodes plant in Saxony, Germany, that boasts an impressive NPV of US$507M. As Altech races to bring its patented technology to market, it is nearing completing construction of a pilot plant adjacent to the proposed project site to facilitate the qualiﬁcation process for its Silumina Anodes product. TM TM A YouTube video update of the pilot plant can be viewed at https://youtu.be/lRWCDLx6UTI SILUMINA ANODES PILOT PLANT CONSTRUCTION TM Altech, further to executing an Engineering, Procurement and Construction Contract with Küttner GmbH & Co, is nearing completion of construction of the Silumina Anodes pilot plant that will produce 120kg per day (~37,000 kg per year) of the Silumina Anodes product for product qualiﬁcation with end users, to assist in securing an offtake agreement. TM TM The pilot plant will also provide optimised inputs for the full-scale 10,000tpa commercial plant design, and will produce customer samples for testing and qualiﬁcation. TM The construction of the Silumina Anodes pilot plant is progressing well and according to plan. The front end of the pilot plant, also known as the wet circuit, is making excellent progress, with power supply, laboratory, building modiﬁcations, and front-end wet circuit infrastructure completed. The pilot plant is located in an existing building in Dock3 at Schwarze Pumpe, Germany, and the necessary building modiﬁcations and electrical panel infrastructure construction have been completed. Silumina An desTM The on-site laboratory has been established and is going through commissioning. This development is a signiﬁcant step towards enabling Altech to conduct necessary testing and analysis of the Silumina Anodes product. Additionally, the Company has established an on-site glove box, which will facilitate the production of lithium-ion battery coin half cells. These half cells will be used to test the performance of the Silumina Anodes produced from the pilot plant. This is a crucial component of the product qualiﬁcation process and will provide important data on the product's performance characteristics. TM TM While fabrication of the back-end of the pilot plant, including the coating equipment, dryer, and calciner (with longer lead times), is currently underway in South Africa and Europe, Altech is expediting the production of some back-end items like silicon carbide linings. The Company anticipates that the ﬁnal items will be installed and commissioned by end of Q4 2023. SILUMINA ANODES FULL SCALE PLANT DEVELOPMENT TM Whilst the pilot plant is being constructed, Altech continues to move forward with the development of its full-scale plant to be constructed in Germany to produce TM Silumina Anodes . TM An outstanding Preliminary Feasibility Study (“PFS”) for a full-scale plant to produce 10,000tpa of Silumina Anodes has been completed. The PFS included a low capital cost of US$95 million, a pre-tax Net Present Value of US$507 million and an attractive Internal Rate of Return (IRR) of 40%. A summary of the key ﬁnancial metrics within the PFS is set out in the table below. A Deﬁnitive Feasibility Study in relation to the full scale plant is well underway. Altech has acquired an ~14Ha industrial site in Saxony, Germany, to house a full-scale plant for its Silumina Anodes project. Altech believes that the site is the ideal location for a 10,000tpa HPA battery materials coating plant, as it is strategically located to supply the European lithium-ion battery and EV markets. TM US Per Annum Annual Production 10,000 tonnes Exchange Rate 0.83 EUR/USD Project Capex 95 million Opex p.a. NPV Discount Rate Payback (real) IRR Revenue p.a. EBITDA p.a. 122 million 507 million 8.0 3.1 40 % years % 185 million 63 million The battery materials coating plant project was awarded the “Medium Green” rating from the independent Centre of International Climate and Environmental Research (CICERO), based on the project achieving an environmentally sustainable design, as well as lower CO emissions of between ~19% and ~52%. This positive project evaluation, formally termed a “Green Bond Second Opinion”, conﬁrms that the project would be suitable for future green bond ﬁnancing. 2 CICERO were engaged by Altech as part of its PFS to conduct the independent evaluation of the proposed battery materials coating plant. The plant is being designed with a speciﬁc focus on minimising environmental impact, and in accordance with prevailing German, European and International environmental standards. In determining the overall project framework rating of “Medium Green”, CICERO assessed the proposed governance procedures and transparency as “Good” and conﬁrmed that the project aligns with all green bond principles. In assessing the proposed plant design and coating process, CICERO noted “The plant has near zero Scope 1 and 2 emissions as the plant's processes, including steam generation, are fully electriﬁed, and it will use renewable electricity sourced from on- site solar panels and renewable energy certiﬁcates”. CICERO's independent assessment of Altech’s proposed battery materials coating plant, and its suitability for possible future green bond ﬁnancing, is an important inclusion for the current preliminary feasibility study – and certainly adds credibility to this proposed project. ® CICERO Medium Green Altech has secured feedstock supplies from world leading European suppliers of high- quality materials, being SGL Carbon for graphite and Ferroglobe for silicon. During the recent crisis in Europe forcing supply chain pressures and rising energy prices, it has demonstrated the importance of European material supply for European battery and EV makers. The manufacturing supply risks are becoming increasingly evident, and more focus will be placed on European supply. Altech has also executed a Non-Disclosure Agreement with two German automakers and one European battery maker. FRAUNHOFER STRATEGIC PARTNERSHIP WITH SILUMINA ANODES TM A strategic partnership has also been entered into with world class German battery research and development institute Fraunhofer for Silumina Anodes qualiﬁcation. TM The independent performance testing and qualiﬁcation of the Silumina Anodes product by Fraunhofer will fast track and assist with early market entry. The strategic partnership continues to develop the technology. TM NEW COMPANY NAME Altech is pleased to advise that, following shareholder approval on 21 February 2023 to change the name of the Company to Altech Batteries Limited, Altech received formal approval from the Australian Securities & Investments Commission that the change of name to Altech Batteries Ltd was ofﬁcially registered. ALTECH BATTERIES INTERACTIVE INVESTOR HUB Engage with Altech directly by asking questions, watching video summaries and seeing what other shareholders have to say about this, as well as past announcements, at our Investor Hub https://investorhub.altechgroup.com Board of Directors Visit to Schwarze Pumpe Industrial Park, Saxony, Germany CORPORATE INFORMATION Altech Batteries Limited ABN 45 125 301 206 DIRECTORS Luke Atkins Ignatius Tan Daniel Tenardi Peter Bailey Tunku Yaacob Khyra Uwe Ahrens Hansjoerg Plaggemars Non-executive Director Chairman Managing Director Non-executive Director Non-executive Director Non-executive Director Alternate Director CHIEF FINANCIAL OFFICER & COMPANY SECRETARY Martin Stein REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS Suite 8, 295 Rokeby Road, Subiaco, Western Australia 6008 Phone: +618 6168 1555 Email: info@altechgroup.com Website: www.altechgroup.com AUDITOR Moore Australia Audit (WA) Level 15, Exchange Tower, 2 The Esplanade, Perth, Western Australia, 6000 SHARE REGISTRY Automic Registry Services Level 2, 267 St Georges Terrace Perth WA 6000 Telephone: 1300 288 664 (Int): +61 2 9698 5414 Facsimile: +61 2 8583 3040 STOCK EXCHANGE LISTING The Company is listed on the Australian Securities Exchange Limited (ASX) and its shares are also quoted on the Frankfurt Stock Exchange (Börse Frankfurt) (FWB) Home Exchange: Perth ASX Code: ATC Frankfurt Stock Exchange: FWB Code: A3Y COMPETENT PERSONS STATEMENT The information in this report that relates to exploration results is based on information compiled by Jeff Randell, a Competent Person, who is a Member of the Australian Institute of Geoscientists. Mr Randell is a Senior Consultant of Geos Mining and has sufﬁcient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as deﬁned in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Mr Randell consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. FORWARD-LOOKING STATEMENTS This announcement contains forward-looking statements which are identiﬁed by words such as 'anticipates', 'forecasts', 'may', 'will', 'could', 'believes', 'estimates', 'targets', 'expects', 'plan' or 'intends' and other similar words that involve risks and uncertainties. Indications of, and guidelines or outlook on, future earnings, distributions or ﬁnancial position or performance and targets, estimates and assumptions in respect of production, prices, operating costs, results, capital expenditures, reserves and resources are also forward- looking statements. These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions and estimates regarding future events and actions that, while considered reasonable as at the date of this announcement and are expected to take place, are inherently subject to signiﬁcant technical, business, economic, competitive, political and social uncertainties and contingencies. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, the directors and management. We cannot and do not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this announcement will actually occur and readers are cautioned not to place undue reliance on these forward-looking statements. These forward- looking statements are subject to various risk factors that could cause actual events or results to differ materially from the events or results estimated, expressed or anticipated in these statements. The Green Bonds referred to this report is indicative in nature; are non- binding; and contain the general terms of a proposed transaction. Any issuance is contingent upon all internal approvals of the Company and structuring agent as well as the completion of detailed due diligence (including but not limited to legal and technical due diligence) and legally binding documentation. There is no certainty that the Green Bonds will be approved or a transaction concluded based on what is contemplated in this report. The Company makes no representations or warranties whatsoever as to the outcome of the Green Bonds process. Altech Batteries Limited www.altechgroup.com (formerly Altech Chemicals Limited) ABN 45 125 301 206 ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2023 CONTENTS DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT PAGE 1 17 18 19 20 21 22 48 49 CORPORATE DIRECTORY DIRECTORS Luke Atkins Chairman Ignatius Tan Managing Director Daniel Tenardi Non-Executive Director Peter Bailey Non-Executive Director Tunku Yaacob Khyra Non-Executive Director Hansjoerg Plaggemars Non-Executive Director Uwe Ahrens Alternate Director (for Tunku Yaacob Khyra) CHIEF FINANCIAL OFFICER & COMPANY SECRETARY Martin Stein REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS Suite 8, 295 Rokeby Road, Subiaco, Western Australia, 6008 Phone: Email: Website: +61 8 6168 1555 info@altechgroup.com www.altechgroup.com AUDITOR Moore Australia Audit (WA) Level 15, Exchange Tower 2 The Esplanade Perth, WA 6000 SHARE REGISTRY Automic Pty Ltd Level 5, 191 St Georges Terrace Perth, WA 6000 Telephone: 1300 288 664 +61 2 9698 5414 STOCK EXCHANGE LISTING Securities of the Company are quoted on the Australian Securities Exchange Limited (ASX) and its shares are also quoted on the Frankfurt Stock Exchange (Börse Frankfurt) (FWB) Home Exchange: ASX Code: ATC (shares) Perth FWB Code: A3Y ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 The directors present their report, together with the financial statements of the Group, being the Company and its controlled entities, for the financial year ended 30 June 2023. DIRECTORS The names and details of the directors of Altech Batteries Limited during the financial year and until the date of this report are: Ignatius (Iggy) Tan B.Sc, MBA, GAICD Managing Director Appointed: 25 August 2014 Mr Tan is a highly experienced mining and chemical executive with a number of significant achievements in commercial mining projects such as capital raisings, funding, construction, start-ups and operations. Mr Tan has over 30 years chemical and mining experience and been an executive director of a number of ASX-listed companies. He holds a Master of Business Administration from the University of Southern Cross, a Bachelor of Science from the University of Western Australia and is a Graduate of the Australian Institute of Company Directors. Mr Tan became the Company's Managing Director in August 2014. Having been involved in the commissioning and start-up of seven resource projects in Australia and overseas, including high purity technology projects. Mr Tan is an accomplished project builder and developer. Mr Tan previously held Managing Director positions at ASX listed Kogi Iron Limited (ASX: KFE) (23-08-2013 to 1-05-2014) and Galaxy Resources Limited (ASX: GXY) (11-11-2011 to 11-06-2013). Mr Tan is currently Non-Executive Chair of ASX listed Lithium Universe Limited (ASX: LU7) (from 10/08/2023). Luke Frederick Atkins LLB Non-Executive Chairman Appointed: 8 May 2007 A highly qualified mining executive and a lawyer by profession, Mr Atkins has had extensive experience in capital raisings and has held a number of executive and non-executive directorships of private and publicly listed companies including a number of mining and exploration companies. Mr Atkins is the co-founder and is currently a Non-Executive Director of ASX-listed Australian Silica Quartz Group Limited (formally Bauxite Resources Limited) (ASX: ASQ). Mr Atkins brings to the board extensive experience in the areas of mining, exploration and corporate governance. Peter Bailey Independent Non-Executive Director Appointed: 8 June 2012 Mr Bailey is a highly experienced and qualified engineer with over 40 years of experience in the mining and industrial chemical production industry. Mr Bailey spent the majority of his career in the alumina chemicals and alumina refining industries. He was previously chief executive officer at Sherwin Alumina, an alumina refinery located in Texas, USA. Prior to Sherwin, in 1998 Mr Bailey was president of Alcoa Worldwide Chemicals’ industrial chemicals department. He was responsible for managing the company’s 13 alumina plants that were located in eight countries, with combined annual revenue of approximately US$700 million. In 1996, Mr Bailey was president of Alcoa Bauxite and Alumina and was responsible for 8 alumina plants outside of Australia. He was also the Chairman of the Alcoa Bauxite joint venture in Guinea, Africa. He has a solid business network throughout the global alumina industry. Mr Bailey has not held any other listed company directorships in the past 3 years. Daniel Lewis Tenardi Non-Executive Director Appointed: 17 September 2009 Mr Tenardi is a highly experienced global resource executive with over 40 years of experience in the mining and processing sectors. During his extensive career, Mr Tenardi spent 13 years at Alcoa’s alumina refinery in Kwinana as well as the company’s bauxite mines in the Darling Ranges of Western Australia. Mr Tenardi was the founding Managing Director of Bauxite Resources Limited (since renamed Australian Silica Quartz Group Limited (ASX: ASQ)), where he led the rapid growth of the company from its initial exploration phase, expansion of land holdings, to the commencement of trial shipments of ore and securing supportive strategic partnerships with key Chinese investors. Having built strong networks with industry leaders in the alumina sector, Mr Tenardi provides valuable alumina-specific industry experience. Mr Tenardi previously served as a Non-Executive independent director of Australian iron ore producer, Grange Resources Limited (ASX: GRR), was CEO of Ngarda Civil & Mining and has also held senior executive and operational roles at CITIC Pacific, Alcoa, Roche Mining and Rio Tinto. - 1 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 Tunku Yaacob Khyra B.Sc (Hons), CA Non-Executive Director Appointed: 22 October 2015 Tunku Yaacob Khyra is the executive Chairman of the Melewar Khyra Group of Companies (Melewar), a Malaysian-based diversified financial and industrial services group. He is the major owner and shareholder of Melewar and sits on the boards of Khyra Legacy Berhad, Mycron Steel Berhad, MAA Group Berhad, Melewar Industrial Group Berhad, Ithmaar Bank B.S.C. (listed on Bahrain Stock Exchange) and several other private companies. Tunku Yaacob graduated with a Bachelor of Science (Hons) Degree in Economics and Accounting from City University, London. An accountant by training, he is a Fellow of the Institute of Chartered Accountants in England & Wales and a member of the Malaysian Institute of Accountants. He started his career as an Auditor with Price Waterhouse, London from 1982 to 1985 and subsequently joined Price Waterhouse Kuala Lumpur from 1986 to 1987. He joined Malaysian Assurance Alliance Berhad in 1987 and retired as its Chief Executive Officer in 1999. Tunku Yaacob has not held any other Australian listed company directorships in the last 3 years. Hansjoerg Plaggemars Non-Executive Director Appointed: 19 August 2020 Mr Plaggemars was a previous member of the board of Delphi Unternehmensberatung AG and Deutsche Balaton AG (ATC major shareholder) and currently acts as their representative. Mr Plaggemars is based in Heidelberg, Germany and is an experienced company director and manager. He studied business administration at the University of Bamberg from 1990 to 1995. Mr Plaggemars has been a management consultant since June 2017, and is a board member of various companies within the scope of projects. Mr Plaggemars is currently a member of the management board of Frankfurt Stock Exchange listed Altech Advanced Materials AG. Mr Plaggemars also currently serves as a non-executive director of ASX listed Geopacific Resources Limited, Wiluna Mining Corporation, Spartan Resources Limited, PNX Metals Limited, Kin Mining Limited and Azure Minerals Limited. Uwe Ahrens Alternate Non-Executive Director (for Tunku Yaacob Khyra) Appointed: 22 October 2015 Mr Ahrens is executive director of Melewar Industrial Group Berhad and Managing Director of Melewar Integrated Engineering Sdn Bhd. He also sits on the board of several other private limited companies. Mr Ahrens holds Masters degrees in both Mechanical Engineering and Business Administration from the Technical University Darmstadt, Germany. Upon graduation, Mr Ahrens joined the international engineering and industrial plant supplier, KOCH Transporttechnik GmbH in Germany, now belonging to FLSmidth Group, where he held a senior management position for 12 years, working predominantly in Germany, USA and South Africa. Mr Ahrens has not held any other Australian listed company directorships in the past 3 years. Mr Ahrens is the Alternate Non-Executive Director for Tunku Yaacob Khyra. CHIEF FINANCIAL OFFICER & COMPANY SECRETARY Martin Stein Chartered Accountant, B. Bus, Chartered Secretary Chief Financial Officer and Company Secretary Appointed: Chief Financial Officer 1 November 2021 and Company Secretary 9 March 2022 Mr Stein is a finance and corporate executive with over 20 years’ of international experience. Mr Stein has held the positions of Chief Financial Officer and Company Secretary in several ASX listed companies. In these roles, Mr Stein has been responsible for all aspects of capital raising, financial management, shareholder liaison and corporate governance. Prior to this, Mr Stein held senior positions with Anvil Mining Limited as well as with PwC at its London office. Whilst with PwC, Mr Stein provided corporate services for companies listed on the LSE, NYSE and AIM, including Colgate-Palmolive, Sony, Heinz, DHL Express and Bosch. Shane Volk B.Bus (Accounting), Grad Dip (Applied Corp. Gov.), AGIA Company Secretary Appointed: 12 November 2014 , Resigned 19 October 2022 Mr Volk is an experienced company secretary and chief financial officer having served in these positions for numerous ASX listed companies since 2007. His experience also includes senior management roles in the resources industry (gold and coal) in Indonesia, Papua New Guinea and Australia, with a variety of international resources companies. Mr Volk is a member of the Governance Institute of Australia and has in excess of 30 years of experience in the mining and resources industries. - 2 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 PRINCIPAL ACTIVITIES The principal activities of the Group during the financial year were: - Executing a Joint Venture Shareholders’ Agreement with world-leading German battery institute Fraunhofer IKTS (“Fraunhofer”) to commercialise Fraunhofer’s revolutionary battery. - Commenced preparation of a Definitive Feasibility Study in relation to a 100 MWh plant to produce CERENERGY® batteries, to be constructed on Altech’s land in Germany. - Designed and launched the CERENERGY® Sodium Chloride Solid State 60 KWh battery pack (ABS60) designed for the renewable energy and grid storage market. - Designed and launched the CERENERGY® Sodium Chloride Solid State 1.0 MWh GridPack (ABS1000) destined for the renewable energy and grid storage market. - Announced the production and fabrication of two prototypes of the 60 KWh (ABS60) battery pack at the Fraunhofer facility in Hermsdorf, Germany. Once completed, the battery packs will undergo cycling testing under extreme conditions. - Released preliminary battery specifications for the CERENERGY® 60 KWh (ABS60) and 1 MWh (ABS1000) GridPack battery products. - Commenced preparation of a Definitive Feasibility Study in relation to a 10,000tpa plant to produce the Silumina AnodesTM product, to be constructed on Altech’s land in Germany. - Expanded the Research and Development Laboratories in Perth, Western Australia to allow the production of pouch cell size batteries to proceed to the next stage of the Silumina AnodesTM Project. - Executed a framework agreement with leading German institute Fraunhofer as a strategic partner to expedite the testing and qualification process for the Silumina AnodesTM product. - Continued construction of the Silumina AnodesTM pilot plant in Saxony, Germany, to produce 120kg per day of the product to provide to potential end users for their internal testing, with the aim of securing an offtake agreement. - Changed name to Altech Batteries Limited. The new name reflects the vision of Altech to meet a battery storage future as the world transitions to the electrification of energy solutions. FINANCIAL POSITION & RESULTS OF OPERATIONS The financial results of the Group for the financial year ended 30 June 2023 are: Cash and cash equivalents Net Assets Revenue Net profit /(loss) after tax Profit / (Loss) per share Dividend 2023 $ 3,571,159 33,875,059 296,456 (61,779,873) (0.060) - 2022 $ 10,912,939 97,537,643 468,659 (5,802,429) (0.004) - DIVIDENDS No dividend has been paid since the end of the previous financial year and no dividend is recommended for the current year. REVIEW OF OPERATIONS AND ACTIVITIES The year ended 30 June 2023 was prosperous for Altech, as it executed a Joint Venture Shareholders’ Agreement with world-leading German battery institute Fraunhofer to commercialise Fraunhofer’s revolutionary CERENERGY® Sodium Chloride Solid State (SCSS) Battery. In addition to this, the Company successfully moved forward with its patented Silumina AnodesTM technology. CERENERGY® Project On 14 September 2022, Altech executed a Shareholders’ Agreement to commercialise Fraunhofer’s revolutionary CERENERGY® Sodium Chloride Solid State (SCSS) Battery. Altech believes that CERENERGY® batteries are the game-changing grid storage alternative to lithium-ion batteries. CERENERGY® batteries are fire and explosion-proof, have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and nickel - is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns. For more information on the advantages of CERENERGY® batteries watch the following YouTube video https://youtu.be/UBwxxgEJHvo - 3 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 The CERENERGY® SCSS technology has been developed by Fraunhofer over the last eight years and has revolutionised previous technology, allowing higher energy capacity and lower production costs. SCSS-type batteries, in terms of capacity, have already been successfully tested in stationary battery modules. The Fraunhofer SCSS batteries are in the final phase of product testing and ready to commercialise. Fraunhofer has spent in the region of EUR 35 million on research & development and operates a EUR 25 million pilot plant in Hermsdorf, Germany. The final CERENERGY® battery modules, are specially designed for the grid storage market and have been undergoing extensive performance testing in Germany. These modules are designed to fit in racks housed in sea containers that can be deployed for grid storage. Fraunhofer had been searching for an entrepreneurial partner that has German land available, has access to funding, is a builder of projects, has battery background, and has technology in alumina used in ceramics. Altech fitted the criteria, and the Joint Venture Shareholders’ Agreement was executed. Altech owns 56.25% of the project with Fraunhofer 25% free carried. The intellectual property will be licensed exclusively to the joint venture. The joint venture partners have elected to develop a 100 MWh SCSS battery plant (Train 1) on Altech’s site in Saxony, Germany. The target market for this project will specifically focus on the grid (stationary) energy storage market which is expected to grow by 28% CAGR (Compound Annual Growth Rate) in the coming decades. The global grid energy storage market is expected to grow from USD 4.4 billion in 2022 to USD 15.1 billion by 2027. Or further out, the market is expected to grow from 20 GW in 2020 to over 3,000 GW by 2050. Altech believes that SCSS batteries can provide high security, at low acquisition and operating costs, for the stationary energy storage market. The proposed battery plant will produce 100 SCSS GridPacks per annum, rated at 1 MWh each. Fraunhofer has estimated that the total cost of production for CERENERGY® batteries will be 40%-50% cheaper than lithium-ion batteries. The joint venture partners have commenced the planning process for the Definitive Feasibility Study required for the commercialisation process. Once the Train 1 (100 MWh) plant is built and operating, the longer-term vision for the joint venture is to construct additional trains or a Gigawatt battery facility. Silumina AnodesTM Project In relation to the Silumina AnodesTM project, which involves combining silicon and graphite and coating this composite product with a nanometre layer of high-purity alumina for inclusion in lithium battery anodes, Altech advanced this technology throughout the year. Altech continues to commercialise the Silumina AnodesTM project in Saxony, Germany, and has achieved the following exciting milestones in relation to the construction of a pilot plant for the product. - - - - Nearing finalisation of construction of the Silumina AnodesTM Pilot Plant that will produce 120kg per day (~37,000 kg per year) of Silumina AnodesTM product for product qualification with end users, that will assist in securing an offtake agreement. Pilot plant to provide optimised inputs for 10,000tpa commercial plant design, and produce customer samples for testing and qualification. Strategic partnership continues with world class German battery research and development institute Fraunhofer IKTS for Silumina AnodesTM qualification. The independent performance testing and qualification of Silumina AnodesTM product by Fraunhofer IKTS will assist early market entry. Engaging and building relationships with Saxony State authorities for support. Whilst the pilot plant construction is being finalised, Altech continues to move forward with the development of a full-scale plant to be constructed in Germany to produce the Silumina AnodesTM product. Altech continues to move forward with preparation of a Definitive Feasibility Study for the Silumina AnodesTM Battery Materials Project to produce 10,000tpa of Silumina AnodesTM. Johor HPA Project The site for the production facility in Johor is currently on care and maintenance. - 4 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 Risk Management Due to its size and scope of operations, the Group does not have a dedicated Risk Management Committee. Rather, the Company’s board as a whole is responsible for the oversight of the Group’s risk management and control framework. Responsibility for control and risk management is delegated to the appropriate level of management within the Group, with the Managing Director having ultimate responsibility to the board for the risk management and control framework. The Managing Director highlights areas of significant business risk and the board has arrangements in place whereby it monitors risk management, including the periodic reporting to the board in respect of operations and the financial position of the Company. The Company does not have a dedicated internal audit function, however it works closely with its external auditors and management for the evaluation and continual improvement of the effectiveness of its risk management and internal control procedures. The Board has established an Audit Committee. EMPLOYEES The Group had 19 permanent employees as at 30 June 2023 (2022: 11 permanent employees). SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS In the opinion of the directors, there were no other significant changes in the state of affairs of the Group that occurred during the financial year under review. EVENTS SUBSEQUENT TO BALANCE DATE Capital Raised On 18 July 2023 the Company issued a Prospectus in relation to a pro-rata non-renounceable entitlement issue of one (1) Share for every eight (8) Shares held by those Shareholders registered at the Record Date at an issue price of $0.07 per Share to raise up to $12,859,201. On 21 July 2023, the Company issued 42,857,142 fully paid ordinary shares to professional and sophisticated investors at $0.07 per share, raising gross proceeds from the share placement of $3.0 million. On 11 August 2023, the Company issued 147,145,801 fully paid ordinary shares at $0.07 per share, raising gross proceeds of $10.3 million. The shares were issued as part of the pro-rata non-renounceable entitlement issue pursuant to the Prospectus dated 18 July 2023. On 17 August 2023, the Company issued 29,414,218 fully paid ordinary shares at $0.07 per share, raising gross proceeds of $2.06 million. The shares were issued as part of the shortfall to the pro-rata non-renounceable entitlement issue pursuant to the Prospectus dated 18 July 2023. In addition, the Company intends to issue an additional 7,142,857 shortfall fully paid ordinary shares at $0.07 per share, to raise gross proceeds of $0.5 million. The Company will issue these additional 7,142,857 shortfall shares subject to receiving shareholder approval at the Annual General Meeting to be held on 27 October 2023. Further, there has not arisen since the end of the financial year any other item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years. OPTIONS OVER UNISSUED CAPITAL Since 30 June 2022 and up until the date of this report the Company had not issued any new options (2022: nil). There are no options outstanding at the date of this report. Information in relation to this is available on both the ASX and Company website. - 5 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 PERFORMANCE RIGHTS OVER UNISSUED CAPITAL As at the date of this report unissued ordinary shares of the Company subject to performance rights are: Performance Right Series Rights outstanding Exercise Price Rights Vested Rights not Vested Expiry Date Managing Director Managing Director Managing Director Non-executive Directors Non-executive Directors Employees Employees Employees 5,000,000 10,000,000 15,000,000 6,000,000 27,000,000 500,000 4,750,000 51,600,000 Total 119,850,000 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 5,000,000 10,000,000 15,000,000 6,000,000 27,000,000 500,000 4,750,000 51,600,000 119,850,000 11/6/25 29/11/26 11/5/28 26/11/25 11/5/28 27/9/25 31/1/29 11/5/28 Details of performance rights issued to the directors and Key Management Personnel of the Company during the period of this report are contained in the Remuneration Report. The above performance rights represent unissued ordinary shares of the Company under option as at the date of this report. These performance rights do not entitle the holder to participate in any share issue of the Company. The holders of performance rights are not entitled to any voting rights until the performance rights are exercised into ordinary shares, which is only possible if the vesting conditions attached to the performance rights have been attainted. The names of all persons who currently hold performance rights granted are entered in a register kept by the Company pursuant to Section 168(1) of the Corporations Act 2001 and the register may be inspected free of charge. CORPORATE STRUCTURE Altech Batteries Limited (ACN 125 301 206) is a Company limited by shares that was incorporated on 8 May 2007 and is domiciled in Australia. FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES The Group has what it believes to be a significant opportunity for the Company, with continued commercialisation of the CERENERGY® Sodium Chloride Solid State (SCSS) Battery Project in Saxony, Germany. To this extent, Altech continues with the Definitive Feasibility Study (“DFS”) in relation to the 100 MWh plant, planned to be constructed on Altech’s land. Once the DFS is finalised, and subject to satisfactory results, the Company aims to secure an offtake agreement and raise the required capital to construct the plant. The joint venture with Fraunhofer further allows for the commercialisation of the CERENERGY® battery through increasing production to gigawatts. The Group also has a significant opportunity with the Silumina AnodesTM Battery Materials Project in Saxony, Germany. Altech will continue with the development and commercialisation of the Silumina AnodesTM project. To this extent, Altech will continue with the construction of the pilot plant to produce 120kg per day of Silumina AnodesTM for distribution to potential customers, with the aim being to secure an offtake agreement. Furthermore, Altech aims to finalise the Definitive Feasibility Study in relation to a full-scale 10,000tpa Silumina AnodesTM plant. In addition, work continues at the dedicated research and development laboratory in Western Australia, with Phase 2 R&D work striving to attain Silumina AnodesTM battery capacity retention beyond the current 30%. - 6 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 Development Risk The proposed 100 MWh battery plant, as well as 10,000tpa battery materials plant, construction and operation activities is a high-risk undertaking. Likewise, the proposed mining, beneficiation and HPA plant construction and operation activities are all high-risk undertakings. The Company is on a proposed development path and in 2015 completed a Bankable Feasibility Study (BFS) that determined the technical and commercial viability for the construction and operation of a 4,000tpa high purity alumina (HPA) processing plant at Tanjung Langsat, Johor, Malaysia, and an associated kaolin quarry and container loading facility at Meckering, Western Australia to provide feedstock for the HPA plant. The BFS was updated in March 2016 and this update confirmed the technical and commercial viability of the project compared to the original study. In October 2017, the Company published a Final Investment Decision study (FIDS) for the project based on an increased plant output of 4,500tpa, and in February 2018 announced that it had executed definitive terms for a US$190 million senior project finance debt facility with German government owned KfW IPEX-Bank. However, there is no certainty that the financing, mining, construction and operation of the abovementioned operations and facilities will be able to proceed as envisaged, and if they do proceed as envisaged – that the operations will function as expected in the FIDS (or any subsequent study update) and deliver the results that were foreshadowed. Amongst other things, equity and additional debt financing at terms acceptable to the Company and the senior lender (KfW IPEX-Bank) must be secured, capital cost and operating cost estimates and assumptions must be confirmed and various design, operational, processing, supply chain, market, regulatory, industrial and development risks, amongst others, will need to be identified and successfully managed to deliver the development and operating outcomes envisaged in the FIDS and any subsequent study updates. Inescapably, the FIDS and subsequent study updates are detailed studies of what is possible based on a combination of detailed information on hand at the time, and a series of professional judgements, assumptions and estimates at the time; inevitably situations and circumstances change, judgements, assumptions and estimates are different from what actually transpires, debt and equity markets constantly change and as a result actual outcomes will almost certainly vary from those contemplated in a FIDS and any subsequent study updates. MINERAL RESOURCE STATEMENT AND MINERAL RESOURCE ORE RESERVE ESTIMATION GOVERNANCE STATEMENT Altech Batteries Limited ensures that its Mineral Resource and Ore Reserve estimates are subject to appropriate levels of governance and internal controls. Mineral Resource and Ore Reserve estimation procedures are well established and are subject to periodic systematic peer and technical review by competent and qualified professionals. Altech reviews and reports its Mineral Resource and Ore Reserve estimates at a minimum on an annual basis and in accordance with the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code) 2012 Edition. The most recent annual review for the year ended 30 June 2023 has not identified any material issues. The table below sets out the Mineral Resources and Ore Reserves comparatives as at 30 June 2023 and 30 June 2022. Meckering kaolin (aluminous clay) deposit Mineral Resource estimate (JORC 2012) as at 30 June 2023 Mineral Resource estimate (JORC 2012) as at 30 June 2022 In Fraction < 300µ Classification Measured Indicated Inferred Tonnes 1,500,000 3,300,000 7,900,000 Al2 O3 % 30.0 30.0 29.1 Fe2O3 % 1.01 0.97 1.0 Total Mineral Resources* 12,700,000 29.5 0.99 TiO2 % 0.62 0.61 0.63 0.62 Yield % 69 69 69 Tonnes 1,500,000 3,300,000 7,900,000 69 12,700,000 * rounded to the nearest one hundred thousand tonnes Notes: 1. 2. The minus 45 micron percentage was measured by wet screening Brightness is the ISO brightness of the minus 45 micron material In Fraction < 300µ Al2 O3 % Fe2O3 % TiO2 % 30.0 30.0 29.1 29.5 1.01 0.97 1.0 0.99 0.62 0.61 0.63 0.62 Yield % 69 69 69 69 Mineral Reserve estimate (JORC 2012) as at 30 June 2023 Mineral Reserve estimate (JORC 2012) as at 30 June 2022 Classification Proven Probable Tonnes 454,000 770,000 Total Proven & Probable* 1,224,000 * rounded to the nearest one thousand tonnes Al2 O3 % Fe2O3 % TiO2 % 30.1 30.0 30.0 0.9 0.9 0.9 0.6 0.6 0.6 K2O % 0.5 0.4 0.4 Yield % 69 71 70 Tonnes 454,000 770,000 1,224,000 Al2 O3 % Fe2O3 % TiO2 % 30.1 30.0 30.0 0.9 0.9 0.9 0.6 0.6 0.6 K2O % 0.5 0.4 0.4 Yield % 69 71 70 - 7 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 Competent Persons Statement – Meckering kaolin deposit Mineral Resource estimate The information in this report that relates to Mineral Resources for the Company’s Meckering kaolin (aluminous clay) deposit is based on information compiled by Ms Sue Border, who is a Fellow of AusIMM and of AIG and is a consultant to the Company and is employed by Geos Mining mineral consultants. Ms Border has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that she is undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. The information contained in this report pertaining to the Mineral Resource estimate as at 30 June 2023 is extracted from the ASX announcement entitled “Altech updates kaolin resource for its Meckering Mining Lease” dated 8 July 2016 and the ASX announcement entitled “Maiden Ore Reserve at Altech’s Meckering Kaolin Deposit” dated 11 October 2016. Both announcements are available to view on the Company web site www.altechgroup.com. The Company confirms that there are no material changes to the Company’s Mineral Resources since its ASX announcement of 11 October 2016. Competent Persons Statement – Meckering kaolin deposit Mineral Reserve estimate The information in this report that relates to Mineral Reserves for the Company’s Meckering kaolin (aluminous clay) deposit is based on information compiled by Mr Carel Moormann who is employed by Orelogy Consulting Pty Ltd as a Principal Consultant. Orelogy Consulting Pty Ltd is an independent mine planning consultancy based in Perth, Western Australia. Orelogy was requested by Altech Batteries Ltd to prepare a reserve estimate for the Meckering kaolin deposit to provide feedstock for high purity alumina production. Mr Moormann is a Fellow of the Australasian Institute of Mining and Metallurgy and a Competent Person as defined by the 2012 JORC Code. Mr Moorman has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 JORC Code. The information contained in this report pertaining to the Mineral Reserve estimate as at 30 June 2023 is extracted from the ASX announcement entitled “Maiden Ore Reserve at Altech’s Meckering Kaolin Deposit” dated 11 October 2016. The announcement is available to view on the Company web site www.altechgroup.com. The Company confirms that there are no material changes to the Company’s Mineral Reserve estimate and the assumptions underpinning the Mineral Reserve estimate since its ASX announcement of 11 October 2016. ENVIRONMENTAL REGULATION AND PERFORMANCE The Company holds an exploration licence and a mining licence that regulate its exploration and future mining activities in Western Australia. These licences include conditions and regulations with respect to the rehabilitation of areas disturbed during the course of its exploration or future mining activities. So far as the directors are aware, there has been no known breach of the Company’s licence conditions and all exploration activities comply with relevant environmental regulations. DIRECTORS’ SHAREHOLDINGS, OPTION HOLDINGS AND PERFORMANCE RIGHTS HOLDINGS As at the date of this report the directors’ interests in shares and unlisted options of the Company are as follows: Director Ignatius Tan Luke Atkins Daniel Tenardi Peter Bailey Tunku Yaacob Khyra Uwe Ahrens Hansjoerg Plaggemars Interest in Ordinary Shares 7,940,000 10,857,438 5,594,915 3,774,710 92,655,251 1,000,000 - Interest in Listed options - - - - - - - Interest in Unlisted Options - - - - - - - Interest in Performance Rights 30,000,000 4,000,000 4,000,000 4,000,000 4,000,000 13,000,000 4,000,000 DIRECTORS’ MEETINGS The number of meetings of the Company’s directors held in the period each director held office during the financial year and the numbers of meetings attended by each director were: Board of Director Meetings Audit Committee Renumeration Committee Meetings held whilst a director N/A 1 1 1 N/A N/A 1 Meetings Attended 1 1 1 1 N/A N/A N/A Meetings held whilst a director 1 1 1 1 N/A N/A N/A Director Meetings Attended Meetings held whilst a director Meetings Attended Luke Atkins Ignatius Tan Daniel Tenardi Peter Bailey Tunku Yaacob Khyra Uwe Ahrens (alternate director) Hansjoerg Plaggemars 5 5 5 5 1 4 4 N/A 1 1 1 N/A N/A 1 5 5 5 5 5 5 5 - 8 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 REMUNERATION REPORT Remuneration Committee Recommendation 8.1 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (4th edition) states that the board should establish a Remuneration Committee. The board has established a Remuneration Committee. Use of Remuneration Consultants The board did not engage a remuneration consultant to make any recommendations in relation to its remuneration policies for any of the key management personnel for the Company during the financial year covered by this report. Voting and comments made at the Company’s 2022 Annual General Meeting The Company received 6,037,254 proxy votes (1.72%) against its 2022 remuneration report (from the 352,396,850 proxy votes received and eligible to vote on the resolution) tabled at the 2022 Annual General Meeting. The Company did not receive any specific feedback at the Annual General Meeting or throughout the year on its remuneration practices. This report details the amount and nature of remuneration of each director of the Company and executive officers of the Company during the year. Overview of Remuneration Policy The board of directors is responsible for determining and reviewing compensation arrangements for the directors and executive management. The board remuneration policy is to ensure that remuneration properly reflects the relevant person’s duties and responsibilities, and that the remuneration is competitive in attracting, retaining and motivating people of the highest quality. The board believes that the best way to achieve this objective is to provide the non-executive directors, executive director and the executive management with a remuneration package consisting of both fixed and variable components that together reflects the positions, responsibilities, duties and personal performance. An equity based remuneration arrangement for the board and executive management is in place. The remuneration policy is to provide a fixed remuneration component and a specific equity related component, with appropriate vesting (performance) conditions. The board believes that this remuneration policy is appropriate given the stage of development of the Company and the activities that it undertakes, and is appropriate in aligning director and executive objectives with shareholder and business objectives. The remuneration policy in regard to setting the terms and conditions for the non-executive directors has been developed by the board taking into account market conditions and comparable salary levels for companies of a similar size and operating in similar sectors. Performance rights are valued using the Black-Scholes methodology. In accordance with current accounting policy the value of these performance rights are expensed over the relevant vesting period. Non-Executive Directors The board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at a General Meeting, and has been set not to exceed $500,000 per annum. Actual remuneration paid to the Company’s non-executive directors is disclosed below. Cash remuneration fees paid to non-executive directors are not linked to the performance of the Company. However, to align directors interests with shareholder interests, the directors are encouraged to hold shares in the Company and the directors are awarded performance rights that are subject to vesting conditions, with the approval of Shareholders. Board fees (per year) Chairman Other non-executive directors (excluding alternate director) 2023 $99,750 $73,500 2022 $95,000 $70,000 The Chairman’s board fees are paid monthly, other non-executive director board fees are paid quarterly, in arrears. Mr Uwe Ahrens, the alternate director for non-executive director Tunku Yaacob Khyra, has been paid a consulting fee of $5,250 per month for non-board related services provided to the Company. These services are performed in Germany and Malaysia. He has also been paid a short term incentive of $50,000 during the year. - 9 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 REMUNERATION REPORT (continued) Executive management The remuneration of the executive management is stipulated in individual services agreements. The Company aims to reward executives with a level of remuneration commensurate with their position and responsibilities within the Company so as to: ● ● ● Reward executives for Company and individual performance against targets set by reference to appropriate benchmarks; Reward executives in line with the strategic goals and performance of the Company; and Ensure that total remuneration is competitive by market standards. Structure Remuneration consists of the following key elements: ● ● ● fixed remuneration; short term incentive scheme; and performance rights Fixed remuneration Fixed remuneration consists of a fixed monthly salary, which is set so as to provide a base level of remuneration that is both appropriate to the position and is competitive in the market. Remuneration packages for the staff that report directly to the Managing Director are based on the recommendation of the Managing Director, subject to the approval of the board. Short term incentive scheme Executives and employees of the Company participate in a short-term incentive scheme that makes available an annual cash incentive (bonus) to individuals based on the attainment of overall Company and group objectives, which are set annually. The scheme is structured to encourage executives and employees to work as a team for the attainment of the Company’s overall objectives, as opposed to prescriptive individual performance objectives. Under the scheme, executives and employees can be awarded a cash bonus of between 10% and 40% of individual annual base salary, depending upon their role in the Company. The board, on the recommendation of the Managing Director, sets annual bonus objectives, and the board also on the recommendation of the Managing Director, approves annual bonus awards. The board has complete discretion over the short-term incentive scheme. During the year covered by this report short-term incentives were awarded by the board to executives for the attainment of pre-determined milestones. Mr Tan was awarded an amount of $87,000 plus superannuation of 10.5% (2022: $95,700 plus superannuation of 10.0%), while Mr Stein was awarded $57,500 plus superannuation of 10.5% (2022: $7,700 plus superannuation of 10.0%). The board does not participate in the short term incentive scheme. Performance rights The board considers equity based incentive compensation to be an integral component of the Company’s remuneration platform enabling it to offer market-competitive remuneration arrangements, the award of performance rights is intended to enable recipients to share in any increase in the Company’s value (as measured by share price) beyond the date of allocation of the performance rights, provided the specific performance conditions (milestones) are met. The performance conditions that were chosen for the performance rights issued to the directors, executive management, employees and key consultants of the Company are on the basis that the achievement of each milestone will represent a significant and challenging performance outcome which will require the performance rights recipients to devote effort, time and skill above and beyond what would normally be expected for their respective fixed compensation. The attainment of each vesting condition (milestone) is not certain, but if achieved could be expected to see an increase in the value of the Company (as measured by share price), enabling the individuals to participate in this increase in value. Each milestone is transparently measurable, with the vesting condition either achieved or not achieved, with the achievement publicly announced to the ASX. The respective recipients must be employed or otherwise retained by the Company at the time of vesting for the performance rights to vest, subject to a milestone being achieved. During the financial year, a total of 42,000,000 performance rights were issued to the directors. The issue of these performance rights were approved by the shareholders during the Annual General Meeting on 30 November 2022 and by the Board of Directors by way of resolution on 16 December 2022. In addition, 6,000,000 new performance rights were also issued to Mr Martin Stein. The issue of these performance rights were approved by the Board of Directors by way of resolution on 16 December 2022. The objectives of the award of performance rights are to provide a remuneration mechanism, through share ownership, to motivate, retain and reward the performance of employees, key consultants and Company directors. All performance rights vest based on pre-determined vesting conditions. - 10 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 REMUNERATION REPORT (continued) No performance rights held by directors or key management personnel that were outstanding as at 30 June 2023 or awarded since that date, have vested. Details of remuneration The following tables show details of the remuneration received by Altech Batteries Limited’s key management personnel for the current and previous financial year. 2023 Directors I Tan – managing director L Atkins – non-executive chairman D Tenardi – non-executive P Bailey – non-executive(i) Tunku Yaacob Khyra - non-executive U Ahrens - alternate director (ii) H Plaggemars – non-executive Executives M Stein – CFO & company secretary S Volk – company secretary TOTAL Primary Compensation Base Salary/Fees $ Short Term Incentive $ Post- Employment Superannuation Contributions $ Equity Compensation Performance Rights $ 445,875 97,375 71,750 71,750 71,750 56,250 71,750 260,425 69,163 1,216,088 87,000 - - - - 50,000 - 57,499 - 194,499 55,952 10,224 7,534 - - - - 33,382 944 108,036 509,957 22,044 22,044 22,044 22,044 88,175 22,044 82,646 - 790,998 Total $ 1,098,784 129,643 101,328 93,794 93,794 194,425 93,794 433,952 70,107 2,309,621 (i) Directors’ fees were all paid to Waylen Bay Capital Pty Ltd. (ii) Services were provided in Germany and Malaysia pursuant to a consultancy agreement with the Company, effective from 1 January 2019. Note: The fair value of performance rights is estimated at each balance date taking into account, amongst other factors, the likelihood that the various tranches of performance rights will vest to the respective participants by the vesting date. At 30 June 2023, in the case of all participants, it was deemed likely that the vesting conditions pertaining to the respective tranches of performance rights would be achieved by the vesting dates and accordingly a pro-rata portion of the deemed value of the rights has been expensed to the Profit and Loss account and accordingly has been disclosed as deemed income for each key management personnel. 2022 Directors I Tan – managing director L Atkins – non-executive chairman D Tenardi – non-executive P Bailey – non-executive(iii) Tunku Yaacob Khyra - non-executive U Ahrens - alternate director (iv) H Plaggemars – non-executive Executives M Stein – CFO & company secretary S Volk – CFO & company secretary TOTAL Primary Compensation Base Salary/Fees $ Short Term Incentive $ Post- Employment Superannuation Contributions $ Equity Compensation Performance Rights $ 435,000 95,000 70,000 70,000 70,000 65,000 70,000 140,000 84,095 1,099,095 95,700 - - - - 50,000 - 7,700 63,036 216,436 53,070 9,500 7,000 - - - - 14,770 14,713 99,053 363,640 12,485 12,485 12,485 12,485 12,485 12,485 25,231 25,231 489,012 Total $ 947,410 116,985 89,485 82,485 82,485 127,485 82,485 187,701 187,075 1,903,596 (iii) Directors’ fees were all paid to Waylen Bay Capital Pty Ltd. (iv) Services were provided in Germany and Malaysia pursuant to a consultancy agreement with the Company, effective from 1 January 2019. The base salary includes $5,000 which relates to services performed in prior year. Note: The fair value of performance rights is estimated at each balance date taking into account, amongst other factors, the likelihood that the various tranches of performance rights will vest to the respective participants by the vesting date. At 30 June 2022, in the case of all participants, it was deemed likely that the vesting conditions pertaining to the respective tranches of performance rights would be achieved by the vesting dates and accordingly a pro-rata portion of the deemed value of the rights has been expensed to the Profit and Loss account and accordingly has been disclosed as deemed income for each key management personnel. - 11 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 REMUNERATION REPORT (continued) The proportion of remuneration linked to performance and the fixed proportion are as follows: Name Directors I Tan – managing director L Atkins – non-executive Chairman D Tenardi – non-executive P Bailey – non-executive Tunku Yaacob Khyra - non-executive U Ahrens - alternate director H Plaggemars – non-executive Executives M Stein – CFO & company secretary S Volk – CFO & company secretary Fixed remuneration 2022 2023 At risk remuneration 2022 2023 46% 83% 78% 76% 76% 29% 76% 68% 100% 52% 89% 86% 85% 85% 51% 85% 82% 53% 54% 17% 22% 24% 24% 71% 24% 32% - 48% 11% 14% 15% 15% 49% 15% 18% 47% Service agreements Remuneration and other terms of employment for key management personnel are formalised in service agreements. The service agreements specify the components of remuneration, benefits and notice periods. Participation in the STI and LTI plans is subject to the board’s discretion. Other major provisions of the services agreements are set out below. Name Ignatius Tan Managing Director Term of agreement and notice period * No fixed term 6 months notice Base salary (including superannuation) $504,709 p.a. Martin Stein Chief Financial Officer & Company Secretary No fixed term 1 month notice $317,688 p.a. Termination payments ** 6 months, plus 3 months if terminated because of a change in control of the Company 1 month, plus 3 months if terminated because of a change in control of the Company Non-executive director service arrangements are detailed on the first page of the remuneration report. * The notice period applies equally to either party ** Termination benefit is payable if the Company terminates employees with notice, and without cause (e.g. for reasons other than unsatisfactory performance or gross misconduct). Details of share based compensation During the financial year, the Company issued 15,000,000 performance rights to Mr Iggy Tan, 12,000,000 performance rights to Mr Uwe Ahrens and 3,000,000 performance rights to each of the other directors. The issue of these performance rights were approved by the shareholders during the Annual General Meeting on 30 November 2022 and by the Board of Directors by way of resolution on 16 December 2022. In addition, 6,000,000 new performance rights were also issued to Mr Martin Stein. The issue of these performance rights were approved by the Board of Directors by way of resolution on 16 December 2022. Further, 1,000,000 performance rights for Mr Shane Volk were cancelled following his resignation as Company Secretary (2022: 10,000,000 and 1,000,000 expired performance rights were replaced for Mr Iggy Tan and Mr Shane Volk respectively, and 1,000,000 performance rights were issued to Mr Martin Stein) Details of performance rights (subject to vesting conditions), awarded to directors and other key management personnel as part of remuneration in current and prior periods and held as at 30 June 2023, are set out below: - 12 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 No. of Performance Rights Issue price Fair Value at issue date Vested & Exercised at 30/06/23 REMUNERATION REPORT (continued) Name Directors Mr Iggy Tan Mr Iggy Tan Mr Iggy Tan Mr Luke Atkins Mr Luke Atkins Mr Dan Tenardi Mr Dan Tenardi Mr Peter Bailey Mr Peter Bailey Tunku Yaacob Khyra Tunku Yaacob Khyra Mr Uwe Ahrens Mr Uwe Ahrens Mr H Plaggemars Mr H Plaggemars Record Date 12/06/18 29/11/21 12/05/23 27/11/20 12/05/23 27/11/20 12/05/23 27/11/20 12/05/23 27/11/20 12/05/23 27/11/20 12/05/23 27/11/20 12/05/23 5,000,000 10,000,000 15,000,000 1,000,000 3,000,000 1,000,000 3,000,000 1,000,000 3,000,000 1,000,000 3,000,000 1,000,000 12,000,000 1,000,000 3,000,000 Executives Mr Martin Stein Mr Martin Stein 31/1/22 12/05/23 1,000,000 6,000,000 nil nil nil nil nil nil nil nil nil nil nil nil nil nil nil nil nil $ 875,000 1,400,000 1,500,000 45,000 300,000 45,000 300,000 45,000 300,000 45,000 300,000 45,000 1,200,000 45,000 300,000 120,000 600,000 - - - - - - - - - - - - - - - - - Un-vested at 30/06/23 Final date for vesting 5,000,000 10,000,000 15,000,000 1,000,000 3,000,000 1,000,000 3,000,000 1,000,000 3,000,000 1,000,000 3,000,000 1,000,000 12,000,000 1,000,000 3,000,000 11/06/25 29/11/26 11/05/28 26/11/25 11/05/28 26/11/25 11/05/28 26/11/25 11/05/28 26/11/25 11/05/28 26/11/25 11/05/28 26/11/25 11/05/28 1,000,000 6,000,000 31/01/29 11/05/28 The assessed fair value of the performance rights at issue date to recipients is allocated equally over the period from the grant date to vesting date, and the amount is included in the remuneration tables above. Fair values at issue date and at each subsequent reporting date are determined using a 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 rate for the term of the option. Equity instruments held by key management personnel (KMP) The tables below show the number of: shares in the Company; (i) options over ordinary shares in the Company (both listed and unlisted options); and (ii) (iii) rights over ordinary shares in the Company that were held during the financial year by the directors and key management personnel of the Company directly, indirectly or beneficially. KMP Holdings of Ordinary Shares 30 June 2023 Directors I Tan L Atkins D Tenardi P Bailey Tunku Yaacob Khyra U Ahrens H Plaggemars Executives S Volk M Stein Balance at Beginning of year Vested as Remuneration during year Acquired/(disposed) during year Other changes during year Balance at End of Year 7,817,000 10,857,438 5,594,915 3,774,710 135,034,675 1,000,000 - - - - - - - - - - 123,000 - - - - - - - - - - (42,379,424) 7,940,000 10,857,438 5,594,915 3,774,710 92,655,251 1,000,000 - 1,307,727 - - - (361,365) - - - 946,362 1 - 1 Holding at the date that S Volk ceased to be a KMP. - 13 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 REMUNERATION REPORT (continued) KMP Holdings of Ordinary Shares (continued) 30 June 2022 Directors I Tan L Atkins D Tenardi P Bailey Tunku Yaacob Khyra U Ahrens H Plaggemars Executives S Volk M Stein Balance at Beginning of year Vested as Remuneration during year Acquired/(disposed) during year Other changes during year Balance at End of Year 7,817,000 10,857,438 5,594,915 3,774,710 135,034,675 1,000,000 - - - - - - - - - - - - - - - - - - - - - - 7,817,000 10,857,438 5,594,915 3,774,710 135,034,675 1,000,000 - 1,307,727 - - - - - - - 1,307,727 - KMP Holdings of Performance Rights 30 June 2023 Directors I Tan L Atkins D Tenardi P Bailey Tunku Yaacob Khyra U Ahrens H Plaggemars Executives S Volk M Stein 30 June 2022 Directors Balance at beginning of year Awarded or Acquired during year Expired unexercised / Cancelled during year Exercised during year Balance at end of Year Vested and exercisable at year end Unvested and unexercisable at year end 15,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 15,000,000 3,000,000 3,000,000 3,000,000 3,000,000 12,000,000 - 3,000,000 - - - - - - - - - - - - 30,000,000 4,000,000 4,000,000 4,000,000 4,000,000 13,000,000 4,000,000 - 30,000,000 - 4,000,000 - 4,000,000 - 4,000,000 4,000,000 - - 13,000,000 4,000,000 - - (1,000,000) - 6,000,000 - - 7,000,000 - - - - 7,000,000 Balance at beginning of year Awarded or Acquired during year Expired unexercised / Cancelled during year Exercised during year Balance at end of Year Vested and exercisable at year end Unvested and unexercisable at year end I Tan L Atkins D Tenardi P Bailey Tunku Yaacob Khyra U Ahrens H Plaggemars 15,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 10,000,000 - - - - - - (10,000,000) - - - - - - 15,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 - 1,000,000 - - - - - - - - - - - - - 15,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Executives S Volk M Stein 1,000,000 - 1,000,000 1,000,000 - (1,000,000) - 1,000,000 1,000,000 - - - 1,000,000 1,000,000 - 14 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 REMUNERATION REPORT (continued) KMP Holdings of Listed Options 30 June 2023 Directors I Tan L Atkins D Tenardi P Bailey Tunku Yaacob Khyra U Ahrens H Plaggemars Executives S Volk M Stein 30 June 2022 Directors I Tan L Atkins D Tenardi P Bailey Tunku Yaacob Khyra U Ahrens H Plaggemars Executives S Volk M Stein Balance at beginning of year Awarded or Acquired during year Expired unexercised / Cancelled during year Exercised during year Balance at end of Year Vested and exercisable at year end Unvested and unexercisable at year end - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Balance at beginning of year Awarded or Acquired during year Expired unexercised / Cancelled during year - 250,000 - - 29,408,101 - - - - - - - - - - (250,000) - - (29,408,101) - - - - - - - - Exercised during year Balance at end of Year Vested and exercisable at year end Unvested and unexercisable at year end - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - _________________________________________________________________________________________________________ This concludes the remuneration report, which has been audited. - 15 - ALTECH BATTERIES LIMITED DIRECTORS’ REPORT For the year ended 30 June 2023 INDEMNIFYING OFFICERS AND AUDITOR During the year, the Company paid an insurance premium to insure certain officers of the Company. The officers of the Company covered by the insurance policy include the directors and the company secretary named in this report. The Directors and Officers Liability insurance provides cover against all costs and expenses that may be incurred in defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the officers in their capacity as officers of the Company. The insurance policy does not contain details of the premium paid in respect of individual officers of the Company. The insurers do not permit the premium amount paid by the Company for this insurance to be disclosed. The Company has not provided any insurance for an auditor of the Company. AUDITORS’ INDEPENDENCE DECLARATION Section 370C of the Corporations Act 2001 requires the Group’s auditor Moore Australia Audit (WA), to provide the directors of the Company with an Independence Declaration in relation to the audit of the financial report. This Independence Declaration is attached on the following page. NON-AUDIT SERVICES There were no non-audit services provided by the external auditors during the year. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of those proceedings. The Company was not party to any such proceedings during the year. CORPORATE GOVERNANCE In recognising the need for the highest standards of corporate behaviour and accountability, the directors of the Company support and have adhered to the principles of corporate governance for a Company of the current size. The Company’s corporate governance statement is contained in the Annual Report. Signed in accordance with a resolution of the directors. Iggy Tan Managing Director DATED at Perth this 19th day of September 2023 - 16 - Moore Australia Audit (WA) Level 15, Exchange Tower, 2 The Esplanade, Perth, WA 6000 PO Box 5785, St Georges Terrace, WA 6831 T +61 8 9225 5355 F +61 8 9225 6181 www.moore-australia.com.au AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF ALTECH BATTERIES LIMITED AND CONTROLLED ENTITIES I declare that, to the best of my knowledge and belief, during the year ended 30 June 2023, there have been: a) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit, and b) no contraventions of any applicable code of professional conduct in relation to the audit. SHAUN WILLIAMS PARTNER MOORE AUSTRALIA AUDIT (WA) CHARTERED ACCOUNTANTS Signed at Perth this 20th day of September 2023. - 17 - Moore Australia Audit (WA) – ABN 16 874 357 907. An independent member of Moore Global Network Limited - members in principal cities throughout the world. Liability limited by a scheme approved under Professional Standards Legislation. ALTECH BATTERIES LIMITED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2023 Revenue from ordinary activities Interest Income R&D tax refunds Other income Fair value gain / (loss) on investment (AAM AG) Total Income Expenses 30-Jun-23 30-Jun-22 Notes $ $ 234,078 41,570 20,808 14,740,750 15,037,206 227,104 241,555 - - 468,659 Employee benefit expense (incorporating director fees) (4,478,536) (2,201,945) Depreciation Other expenses Share-based payments Share in profit / (loss) of associate - AAM AG Impairment - investment in associate (AAM AG) Impairment of property, plant & equipment and development expenditure Research and development Profit / (loss) on disposal of assets Interest expense Forex gain / (loss) Profit / (loss) before income tax expense Income tax benefit Net profit / (loss) from continuing operations Other comprehensive profit / (loss) Items that may be reclassified subsequently to profit and loss: Exchange differences on translating foreign controlled entities Total comprehensive profit / (loss), net of tax Profit / (loss) for the year attributable to: Owners of the parent entity Non-controlling interest Total profit / (loss) for the year, net of tax Total comprehensive profit / (loss) for the year attributable to: Owners of the parent entity Non-controlling interest Total comprehensive profit / (loss) loss for the year Earnings Per Share Basic profit / (loss) per share ($ per share) Diluted profit / (loss) loss per share ($ per share) 2(a) 17(e) 7, 10 3 30 4 4 (347,771) (3,900,958) (1,076,658) (241,130) - (63,958,139) (3,748,711) (67) (56,989) 472,585 (328,891) (2,414,379) (583,627) (328,979) (119,051) - (546,262) - (3,400) (9,917) (62,299,168) (6,067,791) 519,295 265,362 (61,779,873) (5,802,429) (2,980,966) (64,760,839) 1,964,499 (3,837,930) (59,717,465) (2,062,408) (61,779,873) (5,729,919) (72,510) (5,802,429) (62,698,431) (2,062,408) (3,765,420) (72,510) (64,760,839) (3,837,930) (0.060) (0.060) (0.004) (0.004) The above Consolidated statement of Profit and Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. - 18 - ALTECH BATTERIES LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2023 Current Assets Cash and cash equivalents Trade and other receivables Total Current Assets Non-Current Assets Property, plant and equipment Right of Use Assets Exploration and evaluation expenditure Development expenditure Investments in Associates Other Financial Assets Other non-current receivable Total Non-Current Assets TOTAL ASSETS Current Liabilities Lease liabilities Trade and other payables Provisions Total current liabilities Non-Current Liabilities Lease liabilities Provisions Loans payable Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS Equity Contributed Equity Reserves Accumulated losses Non-controlling interests TOTAL EQUITY 30-Jun-23 30-Jun-22 Notes $ $ 5(a) 6 3,571,159 2,884,702 10,912,939 502,908 6,455,861 11,415,847 7 8 9 10 11 12 13 14 15 15 16 17 18 20 12,595,817 31,999,798 4,398,139 981,637 - - 17,850,837 2,596,055 5,950,181 782,659 37,679,490 3,351,214 - 7,208,984 38,422,485 86,972,327 44,878,346 98,388,174 34,442 6,326,018 225,022 6,585,482 - 173,800 4,244,005 4,417,805 11,003,287 55,394 412,222 219,814 687,430 34,532 128,569 - 163,102 850,531 33,875,059 97,537,643 124,487,779 124,487,779 1,822,560 3,726,868 (90,321,959) (30,604,494) (2,113,321) (72,510) 33,875,059 97,537,643 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. - 19 - ALTECH BATTERIES LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2023 Contributed Equity $ Accumulated losses $ Share- based payment reserves $ Foreign currency translation reserves $ Other equity interests $ Total $ At 1 July 2022 124,487,779 (30,604,494) 1,762,369 1,964,499 (72,510) 97,537,643 Profit / (Loss) after income tax for the year Other comprehensive profit / (loss) for the year (net of tax) Total comprehensive profit / (loss) for the year Transactions with owners in their capacity as owners: Issue of share capital Share based payments (issue of performance rights) Expiration / cancellation of performance rights At 30 June 2023 - - - - - (59,717,465) - - - - (2,062,408) (61,779,873) (2,980,966) - (2,980,966) (59,717,465) - (2,980,966) (2,062,408) (64,760,839) - 1,285,407 - (208,749) - - 21,597 - - 21,597 1,285,407 (208,749) 124,487,779 (90,321,959) 2,839,027 (1,016,467) (2,113,321) 33,875,059 Contributed Equity $ Accumulated losses $ Share- based payment reserves $ Foreign currency translation reserves $ Other equity interests $ Total $ At 1 July 2021 107,509,911 (27,473,110) 7,346,777 1,543,044 - 88,926,622 Profit / (Loss) after income tax for the year Other comprehensive profit / (loss) for the year (net of tax) Total comprehensive profit / (loss) for the year Transactions with owners in their capacity as owners: Issue of share capital (net of issue costs) Share based payments (issue of performance rights) Exercise of options Conversion of performance rights to share capital Expiration of performance rights - - - (5,729,919) - (5,729,919) 9,910,024 - 3,498,344 3,569,500 - - - - - - - - 583,627 - (3,569,500) 2,598,534 (2,598,534) - (72,510) (5,802,429) 421,455 - 421,455 421,455 (72,510) (5,380,974) - - - - - - - - - - 9,910,024 583,627 3,498,344 - - At 30 June 2022 124,487,779 (30,604,494) 1,762,369 1,964,499 (72,510) 97,537,643 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. - 20 - ALTECH BATTERIES LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 30 June 2023 Cash Flows from Operating Activities Payments to suppliers, contractors and employees R&D refund received Interest received Other receipts Interest paid 30-Jun-23 30-Jun-22 Notes $ $ (8,801,229) 306,932 234,906 34,725 (56,989) (5,286,968) 241,555 227,104 - (3,400) Net cash flows used in operating activities 5(b) (8,281,655) (4,821,709) Cash Flows from Investing Activities Acquisition of plant and equipment Payment for investment in Altech Advance Materials AG Payments for research and development Payments for exploration expenditure Security deposits paid Proceeds from sale of 25% of Altech Industries Germany Gmbh Net cash flows used in investing activities Cash Flows from Financing Activities Loans from AAM Proceeds from issue of shares Share issue costs Proceeds from exercise of options Lease repayment (principal) Net cash flows from financing activities Net increase /(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Foreign exchange variance on cash Cash and cash equivalents at the end of the financial year 5(a) (3,262,022) - (3,748,711) (198,978) (40,983) 5,096,839 (2,443,218) (1,713,805) - (177,838) - - (2,153,855) (4,334,862) 3,135,396 - - - (58,164) - 10,331,348 (421,324) 3,498,344 (56,998) 3,077,232 13,351,370 (7,358,278) 10,912,939 16,498 4,194,799 6,728,978 (10,838) 3,571,159 10,912,939 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. - 21 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 GENERAL INFORMATION The financial statements cover Altech Batteries Limited as a consolidated entity consisting of Altech Batteries Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Altech Batteries Limited’s functional and presentation currency. Altech Batteries Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Suite 8, 295 Rokeby Road Subiaco Western Australia 6008 The financial statements were authorised for issue on the 19th of September 2023, in accordance with the resolution of directors. The directors have the power to amend and reissue the financial statements. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. The principal accounting policies adopted in preparing the financial report of the Group, Altech Batteries Limited (“ATC” or “Company”), are stated to assist in a general understanding of the financial report. These policies have been consistently applied to all the years presented, unless otherwise indicated. Altech Batteries Limited is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the official list of the Australian Securities Exchange (ASX). The financial statements are presented in Australian dollars, which is the Group’s functional currency. (a) Basis of Preparation These general purpose financial statements have been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and International Financial Reporting Standards as issued by the International Accounting Standards Board. The financial report is presented in Australian dollars. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise. Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. (b) Use of Estimates and Judgements The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses, these include employee provisions, ammortisation and depreciation rates, share based payments and the valuation of capitalised exploration and development costs. Actual results may differ from these estimates and further disclosure on these estimates is detailed below. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. (c) Income Tax The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred asset or liability is recognised in relation to those temporary differences 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 or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Current and future tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. (d) Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised. Interest income Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset. - 22 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 (e) Cash and Cash Equivalents Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short term deposits with an original maturity of three months or less. For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, which are readily convertible to cash on hand and which are used in the cash management function on a day-to-day basis. (f) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Property Freehold land and buildings are recorded at cost of acquisition.. Plant and Equipment Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or. A formal assessment of the recoverable amount is made when impairment indicators are present (refer to Note 1(q) for details of impairment). The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are recognised as expenses in profit or loss during the financial period in which they are incurred. Land Land is recorded at the total cost of acquisition. The value of land in Australia (Meckering) and in Germany (Saxony) is not amortised. Land in Malaysia (Johor HPA plant site) is recorded at the total cost of acquisition and is amortised on a straight-line basis over the 30-year term of the land lease. The carrying amount of land is reviewed annually to ensure that it is not in excess of the recoverable amount from its disposal. In the event that the carrying amount of any land is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss account or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of the recoverable amount is made when impairment indicators are present (refer to Note 1(q) for details of impairment). - 23 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 (f) Property, Plant and Equipment (continued) Depreciation The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated on a straight-line basis over the asset’s useful life to the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Plant & equipment Office Equipment Depreciation Rate 33% to 66% 20% The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are recognised in profit or loss in the period in which they arise. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings. (g) Employee Benefits Short-term employee benefits Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled. The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as a part of current trade and other payables in the statement of financial position. The Group’s obligations for employees’ annual leave and long service leave entitlements are recognised as provisions in the statement of financial position. Other long-term employee benefits Provision is made for employees’ long service leave and annual leave entitlements not expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service. Other long-term employee benefits are measured at the present value of the expected future payments to be made to employees. Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures and are discounted at rates determined by reference to market yields at the end of the reporting period on corporate bonds that have maturity dates that approximate the terms of the obligations. Any re-measurements for changes in assumptions of obligations for other long-term employee benefits are recognised in profit or loss in the periods in which the changes occur. The Group’s obligations for long-term employee benefits are presented as non-current provisions in its statement of financial position, except where the Group does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which case the obligations are presented as current provisions. Share-based payment transactions The Group currently operates a Performance Rights Plan and also awards Performance Rights to its directors outside of the plan but on the same terms and conditions, which provides benefits to directors, consultants, executives and employees. The Group may also award performance rights or other equity instruments outside of the performance rights plan to directors, consultants, executives and employees. The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Any underlying assumptions are detailed in Note 16(e). The cost of equity-settled transactions is recognised as a share based payment expense in the profit and loss account 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. If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification. If the non-vesting condition is within the control of Group or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. - 24 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 (g) Employee Benefits (continued) 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. (h) Exploration and Development Expenditure Exploration, evaluation and development expenditures incurred are capitalised in respect of each identifiable area of interest. These costs are only capitalised to the extent that they are expected to be recovered through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against profit or loss in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to capitalise costs in relation to that area. Costs of site restoration are provided for over the life of the project from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with local laws and regulations and clauses of the permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis. Any changes in the estimates for the costs are accounted for on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly, the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site. (i) Research and Development 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 is expected to deliver future economic benefits and these benefits can be measured reliably. Development costs have a finite life and are amortised on a systematic basis based on the future economic benefits over the useful life of the project. An intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated: • • • • • the technical feasibility of completing the intangible asset so that it will be available for use or sale; the intention to complete the intangible asset and use or sell it; the ability to use or sell the intangible asset; how the intangible asset will generate probable future economic benefits; the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and the ability to measure reliably the expenditure attributable to the intangible asset during its development. • Capitalised development costs will be amortised over their expected useful life once commercial sales commence. (j) Going Concern This report has been prepared on the going concern basis, which contemplates the continuation of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business for a period of 12 months from the date of issuing the financial statements. The Group has incurred net cash outflows for the year ended 30 June 2023 of $7,358,278 (2022: net cash inflows of $4,194,799). In addition, as at 30 June 2023, the Group had net current liabilities of $129,621 (30 June 2022: net current assets of $10,728,417). On 21 July 2023, the Company issued 42,857,142 fully paid ordinary shares to professional and sophisticated investors at $0.07 per share, raising gross proceeds from the share placement of $3.0 million. On 11 August 2023, the Company issued 147,145,801 fully paid ordinary shares at $0.07 per share, raising gross proceeds of $10.3 million. The shares were issued as part of the pro-rata non-renounceable entitlement issue pursuant to a Prospectus dated 18 July 2023. On 17 August 2023, the Company issued 29,414,218 fully paid ordinary shares at $0.07 per share, raising gross proceeds of $2.06 million. The shares were issued as part of the shortfall to the pro-rata non-renounceable entitlement issue pursuant to a Prospectus dated 18 July 2023. In addition, the Company intends to issue an additional 7,142,857 shortfall fully paid ordinary shares at $0.07 per share, to raise gross proceeds of $0.5 million. The Company will issue these additional 7,142,857 shortfall shares subject to receiving shareholder approval at the Annual General Meeting to be held on 27 October 2023. Cashflow forecasts indicate that the Company will have sufficient cash to remain as a going concern for at least the next 12 months. - 25 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 (k) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (“ATO”). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables are stated with the amount of GST included. GST incurred is claimed from the ATO when a valid tax invoice is provided. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows. (l) Payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. (m) Issued Capital Contributed Equity Issued capital is recognised as the fair value of the consideration received by the Group. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received. Earnings per Share Basic earnings per share (“EPS”) are calculated based upon the net loss divided by the weighted average number of shares. Diluted EPS are calculated as the net loss divided by the weighted average number of shares and dilutive potential shares. (n) Leases At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease present, a right-of-use asset and a corresponding lease liability is recognised by the Group where the Group is a lessee. However, all contracts that are classified as short-term leases (lease with remaining lease term of 12 months or less) and leases of low-value assets are recognised as an operating expense on a straight-line basis over the term of the lease. Initially, the lease liability is measured at the present value of the lease payments still to be paid at the commencement date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily determined, the Group uses the incremental borrowing rate. Lease payments included in the measurement of the lease liability are as follows: • • • • fixed lease payments less any lease incentives; variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date; the amount expected to be payable by the lessee under residual value guarantees; the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; - - lease payments under extension options if lessee is reasonably certain to exercise the options; and payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease. Subsequently, the lease liability is measured by a reduction to the carrying amount of any payments made and an increase to reflect any interest on the lease liability. The right-of-use assets is an initial measurement of the corresponding lease liability less any incentives and initial direct costs. Subsequently, the measurement is the cost less accumulated depreciation (and impairment if applicable). Right-of-use assets are depreciated over the lease term or useful life of the underlying asset whichever is the shortest. Where a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the underlying asset. Leased Asset The Company leases its research and development laboratory at Unit 2, 91 Leach Highway, Kewdale WA 6105. This lease has a 3 year term (expiring 31 March 2024), and the Company has an option to renew the lease for an additional 3 year term. Lease payments are made monthly and there is an annual 3% increase in the amount payable on the first and second anniversary of the lease. Variable outgoings are also paid to the building body corporate on a monthly basis, and adjusted against actual outgoings expenses annually. The Company’s wholly owned Malaysian subsidiary, Altech Batteries Sdn Bhd leases an office space in Tanjung Langsat, Johor, Malaysia. This lease has a 1 year term (expired 31 August 2023), and the Company has an option to renew the lease for an additional 1 year term. The Company’s 75%-owned subsidiary, Altech Industries Germany GmbH leases an office space in Dock 3, Saxony, Germany. This lease has a 5 year term (expiring 11 January 2026). The Company accounts for all leases in accordance with the requirements specified in AASB 16, and has consequently recognised a right of use asset in the balance sheet as summarised in Note 8. - 26 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 (o) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. (p) (q) Financial risk management The board of directors has overall responsibility for the establishment and oversight of the risk management framework, to identify and analyse the risks faced by the Group. These risks include credit risk, liquidity risk and market risk from the use of financial instruments. The Group has only limited use of financial instruments through its cash holdings being invested in short term interest bearing securities. The primary goal of this strategy is to maximise returns while minimising risk through the use of accredited banks. Working capital is maintained at its highest level possible and regularly reviewed by the full board. Impairment of Assets At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (e.g. in accordance with the revaluation model in AASB 116). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash- generating unit to which the asset belongs. Impairment testing is performed annually for goodwill and intangible assets with indefinite lives. (r) Critical accounting estimates and judgements The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are: Share based payment transactions The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an internal valuation using a Black-Scholes option pricing model, using the assumptions detailed in Note 17(e). Exploration and evaluation assets Determining the recoverability of exploration and evaluation expenditure capitalised in accordance with the Group’s accounting policy (refer Note 1(h)), requires estimates and assumptions as to future events and circumstances, in particular, whether successful development and commercial exploitation, or alternatively sale, of the respective areas of interest will be achieved. The Group applies the principles of AASB 6 and recognises exploration and evaluation assets when the rights of tenure of the area of interest are current, and the exploration and evaluation expenditures incurred are expected to be recouped through successful development and exploitation of the area or where exploration activities have not reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. If, after having capitalised the expenditure under the Group’s accounting policy in Note 9, a judgment is made that recovery of the carrying amount is unlikely, an impairment loss is recorded in profit or loss in accordance with the Group’s accounting policy in Note 1(h). The carrying amounts of exploration and evaluation assets are set out in Note 9. Development expenditure and Malaysian HPA Plant (work in progress) Judgment is applied by management in determining when development and other capital expenditure relating to the Malaysian HPA plant is commercially viable and technically feasible. Any judgments may change as new information becomes available. If, after having commenced the development activity, a judgment is made that the asset under development is impaired, the appropriate amount will be written off to the Statement of Profit or Loss & Other Comprehensive Income. Whilst the current economic climate and the impacts of the COVID-19 pandemic in the medium to longer term are still uncertain, impairment assessments are undertaken based on the best available current information. (s) New and Amended Accounting Policies Adopted by the Group The Group has considered the implications of new or amended Accounting Standards which have become applicable of the current financial reporting period. There have been no new or amended accounting standards for the current financial reporting period. (t) New Accounting Standards for Application in Future Periods A number of new standards and amendments to standards have been issued and are effective for future accounting periods, however the Group has not yet adopted these and does not expect any standard or amendment not yet effective, to have a significant impact on the financial statements of the Group in future periods. - 27 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 (u) Principles of Consolidation The consolidated financial statements incorporate all of the assets, liabilities and results of the parent, Altech Batteries Limited and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries is provided in Note 29. The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Company from the date on which control is obtained by the Company. The consolidation of a subsidiary is discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Company. Equity interests in a subsidiary not attributable, directly or indirectly, to the Company are presented as “non-controlling interests”. The Company initially recognises non-controlling interests that are present ownership interests in subsidiaries and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the non-controlling interests’ proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and each component of other comprehensive income. Non-controlling interests are shown separately within the equity section of the statement of financial position and statement of comprehensive income. (v) Investment in Associates An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the entity but is not control or joint control of those policies. Investments in associates are accounted for in the consolidated financial statements by applying the equity method of accounting, whereby the investment is initially recognised at cost (including transaction costs) and adjusted thereafter for the post-acquisition change in the Group’s share of net assets of the associate. In addition, the Group’s share of the profit or loss and other comprehensive income is included in the consolidated financial statements. The carrying amount of the investment includes, when applicable, goodwill relating to the associate. Any discount on acquisition, whereby the Group’s share of the net fair value of the associate exceeds the cost of investment, is recognised in profit or loss in the period in which the investment is acquired. Profits and losses resulting from transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group discontinues recognising its share of further losses unless it has incurred legal or constructive obligations or made payments on behalf of the associate. When the associate subsequently makes profits, the Group will resume recognising its share of those profits once its share of the profits equals the share of the losses not recognised. The requirements of AASB 128: Investments in Associates and Joint Ventures and AASB 9: Financial Instruments are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group’s investment in an associate or a joint venture. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with AASB 136: Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable amount of the investment subsequently increases. (w) Financial Instruments Initial recognition and measurement Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions to the instrument. For financial assets, this is the date that the Group commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted). Financial instruments (except for trade receivables) are initially measured at fair value plus transaction costs, except where the instrument is classified "at fair value through profit or loss", in which case transaction costs are expensed to profit or loss immediately. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Classification and subsequent measurement Financial liabilities Financial instruments are subsequently measured at amortised cost. A financial liability cannot be reclassified. Financial assets Financial assets are subsequently measured at: – – – amortised cost; fair value through other comprehensive income; or fair value through profit or loss. Measurement is on the basis of two primary criteria: – – the contractual cash flow characteristics of the financial asset; and the business model for managing the financial assets. - 28 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 (W) Financial Instruments (continued) Impairment A financial asset that meets the following conditions is subsequently measured at amortised cost: – – the financial asset is managed solely to collect contractual cash flows; and the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates. A financial asset that meets the following conditions is subsequently measured at fair value through other comprehensive income: – the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates; the business model for managing the financial assets comprises both contractual cash flows collection and the selling of the financial asset. – By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair value through other comprehensive income are subsequently measured at fair value through profit or loss. The Group initially designates a financial instrument as measured at fair value through profit or loss if: – it eliminates or significantly reduces a measurement or recognition inconsistency (often referred to as “accounting mismatch”) that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases; it is in accordance with the documented risk management or investment strategy, and information about the groupings was documented appropriately, so that the performance of the financial liability that was part of a group of financial liabilities or financial assets can be managed and evaluated consistently on a fair value basis; – The Group uses the following approaches to impairment, as applicable under AASB 9: Financial Instruments: – – – – the general approach the simplified approach the purchased or originated credit impaired approach; and low credit risk operational simplification. General approach Under the general approach, at each reporting period, the Group assesses whether the financial instruments are credit-impaired, and if: – the credit risk of the financial instrument has increased significantly since initial recognition, the Group measures the loss allowance of the financial instruments at an amount equal to the lifetime expected credit losses; or there is no significant increase in credit risk since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. – Simplified approach The simplified approach does not require tracking of changes in credit risk at every reporting period, but instead requires the recognition of lifetime expected credit loss at all times. This approach is applicable to: – trade receivables or contract assets that result from transactions within the scope of AASB 15: Revenue from Contracts with Customers and which do not contain a significant financing component; and lease receivables. – Evidence of credit impairment includes: – – – – – significant financial difficulty of the issuer or borrower; a breach of contract (e.g. default or past due event); a lender granting to the borrower a concession, due to the borrower's financial difficulty, that the lender would not otherwise consider; high probability that the borrower will enter bankruptcy or other financial reorganisation; and the disappearance of an active market for the financial asset because of financial difficulties. (x) Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in profit or loss net of any reimbursement. Provisions are measured at management’s best estimate of the expenditure required to settle the present obligation at the reporting date. The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: • assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of • financial position; income and expenses for each consolidated statement of profit and loss and other comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and • all resulting exchange differences are recognised in other comprehensive income. - 29 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 (y) Foreign Currency Functional and presentation currency Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Australian dollars, which is the Company’s functional and presentation currency. Transactions and Balances Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are generally recognised in profit or loss. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. Foreign exchange gains and losses that relate to borrowings are presented in the consolidated statement of profit and loss and other comprehensive income, within finance costs. All other foreign exchange gains and losses are presented in the consolidated statement of profit and loss and other comprehensive income on a net basis within other income or other expenses. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. 2. Loss for the year includes the following specific income and expenses (a) Other expenses Accounting and audit fees ASX and share registry fees Corporate & consulting Insurance expense Occupancy Legal fees Investor relations and marketing Office & administration 30-Jun-23 30-Jun-22 $ $ (46,209) (116,217) (1,027,870) (331,819) (478,212) (447,568) (876,742) (576,321) (55,180) (121,903) (836,490) (276,927) (166,277) (174,618) (477,796) (305,188) (3,900,958) (2,414,379) - 30 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 3. Income Tax Income tax benefit / (expense) Current income tax benefit / (expense) Tax reconciliation Accounting profit (loss) before tax At statutory tax rate of 25% Adjustment for: Non-assessable income Research & Development Spend Research & Development Offset Share based payments to employees Non-deductible expenses Deferred Tax Asset temporary differences not brought to account Deferred Tax Asset losses not brought to account Foreign Tax rate differential Recoupment of prior year tax losses not previously brought to account Deferred tax assets Provisions, accruals and other Tax losses Offset by deferred tax liabilities Deferred tax liabilities Capitalised mineral exploration and evaluation expenditure Development expenditure Offset by deferred tax assets Deferred tax assets not recognised Tax losses Temporary differences 30-Jun-23 $ 30-Jun-22 $ 519,295 519,295 265,362 265,362 (62,299,168) (15,574,792) (6,067,791) (1,516,948) (3,685,188) 298,446 508,903 269,165 901,146 4,475,892 12,232,960 1,092,763 - 519,295 123,476 - 123,476 - 136,565 265,362 - 1,182,934 484,417 628 (287,597) 265,362 68,646 677,013 745,659 (123,476) (745,659) - - (123,476) - (123,476) 123,476 - 2,517,955 3,788,581 6,306,536 (96,794) (648,865) (745,659) 745,659 - 2,017,465 - 2,017,465 - 31 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 4. Earnings per share Basic profit (loss) per share Diluted profit (loss) per share The weighted average number of ordinary shares used in the calculation of basic earnings per share was: 30-Jun-23 $ (0.060) (0.060) 30-Jun-22 $ (0.004) (0.004) Number 1,080,764,077 Number 1,080,764,077 Potential ordinary shares have not been included in the above number as they would be anti-dilutive. 5. Cash and cash equivalents (a) Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the Consolidated Statement of Financial Position as follows: Cash at bank and on hand 30-Jun-23 $ 3,571,159 (b) Reconciliation of the loss from ordinary activities after income tax to the net cash flows used in operating activities: Profit/(Loss) from ordinary activities after income tax Non-cash items: - Depreciation expense (Operations) - Foreign exchange (gains) / losses - Share based payments - Loss on disposal of assets - Share in loss of associate (AAM AG) - Impairment of property, plant and equipment and development expenditure - Fair value (gain) / loss on investment in AAM AG - Minority equity interest Change in operating assets and liabilities: - Increase / (decrease) in Operating trade and other payables - (Increase) / decrease in Operating trade and other receivables - Increase / (decrease) in Operating provisions Net cash outflows from Operating Activities 6. Trade and other receivables CURRENT RECEIVABLES Research and development tax rebate Sundry debtors GST receivable Deposits paid AAM AG Other receivable - 32 - 30-Jun-23 $ (61,779,873) 347,771 2,827,176 1,076,658 67 241,130 63,958,139 (14,740,750) 2,062,408 15,991 (2,340,811) 50,439 (8,281,655) 30-Jun-23 $ 519,295 180,326 1,950,323 49,376 26,628 158,754 2,884,702 30-Jun-22 $ 10,912,939 30-Jun-22 $ (5,802,429) 328,891 (200,699) 583,627 - 328,979 - 119,051 72,510 (14,867) (255,990) 19,218 (4,821,709) 30-Jun-22 $ 265,362 - 130,231 30,383 68,930 8,001 502,908 ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 7. Property, Plant and Equipment OFFICE EQUIPMENT At cost Less: accumulated depreciation Total office equipment LAND At cost Total land PLANT AND EQUIPMENT At cost Less: accumulated depreciation Total plant and equipment MALAYSIAN HPA PLANT (work in progress) At cost Less: Provision for impairment Total Malaysian HPA Plant SILUMINA PILOT PLANT - GERMANY (work in progress) At cost Total German Pilot Plant CERENERGY BATTERY PLANT - GERMANY (work in progress) At cost Total German Pilot Plant 30-Jun-23 30-Jun-22 $ 382,418 (252,711) $ 281,816 (211,866) 129,707 69,951 3,779,406 3,779,406 3,578,359 3,578,359 224,897 (108,136) 116,761 205,774 (36,896) 168,879 26,777,563 27,367,758 (26,313,376) - 464,187 27,367,758 6,185,191 6,185,191 814,852 814,852 1,920,565 1,920,565 - - Total Property, Plant and Equipment 12,595,817 31,999,798 Reconciliation Reconciliation of the carrying amounts for each class of plant and equipment are set out below: OFFICE EQUIPMENT Carrying amount at the beginning of the year Additions Disposals Depreciation expense (profit & loss account) Carrying amount at the end of the year LAND Carrying amount at the beginning of the year Additions Less: amortisation Carrying amount at the end of the year - 33 - 30-Jun-23 30-Jun-22 $ 69,951 111,363 (67) (51,540) 129,707 $ 101,722 21,171 - (52,942) 69,951 3,578,359 201,047 1,575,497 2,002,862 - - 3,779,406 3,578,359 ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 7. Property, Plant and Equipment (continued) Reconciliation (continued) PLANT AND EQUIPMENT Carrying amount at the beginning of the year Additions Less: depreciation Carrying amount at the end of the year MALAYSIAN HPA PLANT (work in progress) Carrying amount at the beginning of the year Additions Provision for impairment of assets Foreign currency translation Carrying amount at the end of the year 30-Jun-23 $ 30-Jun-22 $ 168,879 19,123 (71,241) 116,761 25,857 168,390 (25,368) 168,879 27,367,758 28,228,513 - (26,313,376) - - (590,195) (860,755) 464,187 27,367,758 The Malaysian HPA plant is part way constructed, and is currently on care and maintenance. The Company requires further capital in order to complete the plant. Due to uncertainties surrounding the prospect of obtaining funding for this plant, the Company has taken the prudent approach to provide for impairment of the Malaysian HPA Plant to its fair value less costs of disposal. A valuation of the HPA plant conducted by a licenced professional valuer formed the basis of the impairment. SILUMINA PILOT PLANT - GERMANY (work in progress) Carrying amount at the beginning of the year Additions Carrying amount at the end of the year CERENERGY BATTERY PLANT - GERMANY (work in progress) Carrying amount at the beginning of the year Additions Carrying amount at the end of the year 8. Right-of-use Assets At cost Accumulated depreciation Net carrying amount 814,852 5,370,339 6,185,191 - 1,920,565 1,920,565 - 814,852 814,852 - - - 5,310,736 (912,597) 4,398,139 6,854,271 (904,090) 5,950,181 Reconciliation Reconciliation of the carrying amount of right-of-use assets at the beginning and end of year are set out below: Right-of-use assets At beginning of the year net of accumulated depreciation Impairment Depreciation charge for the year Net carrying amount at the end of the year 5,950,181 (1,366,617) (185,425) 4,398,139 6,195,810 (15,345) (230,284) 5,950,181 Lease liabilities are significantly lower in comparison to the carrying amount of the right-of-use assets as the lease of the land in Malaysia (Johor HPA plant site) has been paid upfront in full. - 34 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 9. Exploration and Evaluation expenditure Carrying amount at the beginning of year Exploration and evaluation expenditure incurred during the year (at cost) Carrying amount at the end of the year 10. Development expenditure Carrying amount at the beginning of the year Development expenditure incurred during the year (at cost) including foreign exchange movements Provision for impairment of assets - development Carrying amount at the end of the year 30-Jun-23 30-Jun-22 $ 782,659 198,978 981,637 $ 604,821 177,838 782,659 30-Jun-23 30-Jun-22 $ $ 37,679,490 36,463,669 (1,179,979) (36,499,511) 1,215,821 - - 37,679,490 The Malaysian HPA plant is part way constructed, and is currently on care and maintenance. The Company requires further capital in order to complete the plant. Due to uncertainties surrounding the prospect of obtaining funding for this plant, the Company has taken the prudent approach to provide for impairment of these development costs. A valuation of the HPA plant conducted by a licenced professional valuer formed the basis of the impairment. 11. Investment in Associate (Altech Advanced Materials AG) 30-Jun-23 30-Jun-22 Carrying amount at the beginning of the period Acquisition of shares in Altech Advanced Materials AG (AAM AG) Share of associate’s loss for the period since acquisition Reclassification to investments¹ Carrying amount at the end of the year $ 3,351,214 - (241,130) (3,110,084) - $ 2,085,439 1,713,806 (328,979) (119,052) 3,351,214 ¹ The Company’s ownership in AAM decreased from 27.1% as at 30 June 2022 to 10.86% as at 31 December 2023 as a result of a share issue conducted by AAM. The Company is no longer deemed to have significant influence over AAM and, as such, the Company now accounts for its ownership in AAM as Other Financial Assets. Refer to note 12. 12. Other Financial Assets 30-Jun-23 30-Jun-22 Carrying amount at the beginning of the period Reclassification from Investment in Associate (AAM AG) 1 Fair value gain / (loss) on investment Carrying amount at the end of the period $ - 4,629,897 13,220,940 17,850,837 $ - - - - The Company measures the fair value of the above investment, as required by Accounting Standard AASB 13 Fair Value Measurement, based on the fair value hierarchy the investment is level 1 with quoted prices in active markets for identical assets or liabilities. The investment is subject to market risk, the risk in changes in market prices that will affect the fair value of the investment. 13. Other non-current receivables Deferred consideration sale of 25% AIG to AAM AG 30-Jun-23 30-Jun-22 $ $ 2,596,055 7,208,984 On 23 December 2020, Altech sold 25% of its Geramn subsidiary AIG for $8 million to Altech Advanced Materials AG. The initial cash consideration of $400,000 was received upon the signing of the share sale, deferred consideration of $7.6m was remaining. Altech Batteries Limited received the first of two installments in March 2023, the amount received was $5.12m. The final instalment is due in December 2023. The Company charges Altech Advanced Materials AG, 3% p.a interest on a quarterly basis. - 35 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 14. Trade and other payables CURRENT PAYABLES (Unsecured) Trade creditors Accrued expenses Payroll Tax payable Other creditors and accruals Total trade and other payables 15. Provisions CURRENT Provision for annual leave NON-CURRENT Provision for long service leave Total provisions 16. Loans Payable Advances from Altech Advanced Materials AG (AAM) 30-Jun-23 30-Jun-22 $ $ 5,671,831 502,939 13,628 137,620 6,326,018 289,623 48,102 6,255 68,242 412,222 30-Jun-23 $ 30-Jun-22 $ 225,022 219,814 173,800 398,822 128,569 348,383 30-Jun-23 $ 4,244,005 4,244,005 30-Jun-22 $ - - Loans Payable are advances from AAM to Altech Industries Germany GmbH (AIG) as part of its 25% contribution towards AIG’s operations in Germany and AAM’s 25% contribution to Altech Energy Holdings GmbH (AEH). Together with the Company’s 75% share of advances, AEH would then on-lend the loan to is its 75%-owned subsidiary, Altech Batteries GmbH (ABG) for development of a 100MWh battery production plant in Saxony, Germany (see Note 23). Interest payable by AIG and AEH to AAM is 3.25% per annum on the outstanding loan amount. 17. Contributed Equity (a) Ordinary shares 30-Jun-23 $ 30-Jun-22 $ Contributed equity at the beginning of the period 124,487,779 107,509,911 Shares issued during the period Options conversion Transfer of historical share-based payment reserve to share capital Transaction costs relating to shares issued - - - - 10,331,350 3,498,343 3,569,500 (421,326) Contributed Equity at the end of the reporting period 124,487,779 124,487,779 Movements in ordinary share capital: Ordinary shares on issue at the beginning of reporting period 30-Jun-23 30-Jun-22 1,426,765,869 1,286,482,133 Shares issued during the period: 12-Aug-21 at $0.08 (Exercise of options) 13-Oct-21 at $0.08 (Exercise of options) 20-Oct-21 at $0.08 (Exercise of options) - - - 2,600 466,722 145,729 - 36 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 17. Contributed Equity (continued) 4-Nov-21 at $0.08 (Exercise of options) 10-Nov-21 at $0.08 (Exercise of options) 16-Nov-21 at $0.08 (Exercise of options) 23-Nov-21 at $0.08 (Exercise of options) 30-Nov-21 at $0.08 (Exercise of options) 8-Dec-21 at $0.08 (Exercise of options) 9-Dec-21 at $0.107 (Placement) 15-Dec-21 at $0.08 (Exercise of options) 22-Dec-21 at $0.08 (Exercise of options) 23-Dec-21 at $0.107 (Share Purchase Plan) 4-Jan-22 at $0.08 (Exercise of options) 17-Jan-22 at $0.08 (Exercise of options) 24-Jan-22 at $0.08 (Exercise of options) 31-Jan-22 at $0.08 (Exercise of options) 14-Feb-22 at $0.08 (Exercise of options) 28-Feb-22 at $0.08 (Exercise of options) 14-Mar-22 at $0.08 (Exercise of options) 24-Mar-22 at $0.08 (Exercise of options) 31-Mar-22 at $0.08 (Exercise of options) 7-Apr-22 at $0.08 (Exercise of options) 21-Apr-22 at $0.08 (Exercise of options) 27-Apr-22 at $0.08 (Exercise of options) 3-May-22 at $0.08 (Exercise of options) 10-May-22 at $0.08 (Exercise of options) 17-May-22 at $0.08 (Exercise of options) 27-May-22 at $0.08 (Exercise of options) 2-Jun-22 at $0.08 (Exercise of options) Ordinary shares on issue at the end of the reporting period (b) Performance Rights 30-Jun-23 - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,426,765,869 30-Jun-22 137,500 463,419 966,819 153,844 346,862 59,440 75,964,556 14,540 120,445 20,589,886 104,500 93,612 587,217 3,789,506 491,370 240,529 224,782 202,800 695,971 671,926 91,942 625,530 27,349,788 2,698,777 900,531 667,420 1,362,942 1,426,765,869 During the year, a total of 2,800,000 ex-employees’ performance rights were cancelled. The Company issued a total of 15,000,000 performance rights to the Managing Director, 27,000,000 performance rights to the Non-executive Directors and 51,600,000 performance rights to certain employees pursuant to the Altech Batteries Limited Performance Rights Plan. At 30 June 2023, the Company had the following unlisted performance rights on issue: Performance rights - managing director (exercise price: nil) Performance rights - employees (exercise price: nil) Performance rights - non-executive directors (exercise price: nil) Total performance rights on issue at 30 June 2023 30,000,000 57,850,000 33,000,000 120,850,000 - 37 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 17. Contributed Equity (continued) (b) Performance Rights (continued) At 30 June 2022, the Company had the following unlisted performance rights on issue: Performance rights - managing director (exercise price: nil) Performance rights - employees (exercise price: nil) Performance rights - non-executive directors (exercise price: nil) Total performance rights on issue at 30 June 2022 15,000,000 9,050,000 6,000,000 30,050,000 Each performance right converts to one fully paid ordinary share of the Company and the conversion of each performance right is subject to the holder attaining certain pre-determined vesting conditions. (c) Listed Options The Company did not issue any listed options during the reporting period (2022: nil). At 30 June 2023, the Company did not have any listed options on issue (2022: nil). (d) Unlisted Options The Company did not issue any unlisted options during the reporting period (2022: nil). At 30 June 2023, the Company did not have any unlisted options on issue (2022: nil). (e) Share Based Payments Performance Rights Share based payments expense relating to Managing Director and Non-Executive Directors during the year totalled $509,957 and $198,394 respectively (2022: $363,640 and $74,908 respectively). In addition, share based payments expense relating to employees’ performance rights totalled $482,940 (2022: $145,079) During the year, the Company cancelled 2,800,000 performance rights of ex-employees. The fair value of the performance rights awarded during the period at the award date was calculated using the Black Scholes pricing model that took into account the term, the underlying value of the shares, the exercise price, the expected dividend yield, the impact of dilution and the risk-free interest rate. Inputs used for each series granted included: Variable Exercise price for the performance right Market price for the shares at date of valuation / issue Volatility of company share price Dividend yield Risk free rate Expiry from date of grant (number of years) Number of Rights issued Performance Rights - Valuation Assumptions Directors $0.00 $0.10 80.0% 0% 3.23% - 3.56% 5.00 93,600,000 The fair value of performance rights is estimated at the date of grant using a Black-Scholes valuation model taking into account the terms and conditions upon which the performance rights were awarded, and the fair value of performance rights is re-assessed each balance date by reference to the fair value of the performance rights at the time of award, adjusted for the probability of achieving the vesting conditions, which may change from balance date to balance date and consequently impact the amount to be expensed via profit and loss account in future periods. Vesting of the performance rights are subject to the attainment of the applicable performance milestones. Performance Rights Plan Altech Batteries Limited’s Performance Rights Plan (“Plan”) was approved by ordinary resolution at a General Meeting of shareholders on 5 November 2014 and re-approved by shareholders in General Meetings on 12 June 2018 and 29 November 2021. All eligible directors, executive officers, employees and consultants of Altech Batteries Limited, who have been continuously employed by the Company are eligible to participate in the Plan. - 38 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 17. Contributed Equity (continued) The Plan allows the Company to issue rights to eligible persons for nil consideration. The rights can be granted free of charge, vesting is subject to the attainment of certain pre-determined conditions, and exercise is at a pre-determined fixed price calculated in accordance with the Plan. The fair value of any performance rights issued by the Company during the reporting period is determined at the date of grant using a Black- Scholes valuation model taking into account the terms and conditions upon which the performance rights are awarded. At each balance date the fair value of all performance rights is re-assessed by reference to the fair value of the performance rights at the time of award, adjusting for the probability of achieving the vesting conditions, which may change from balance sheet date and consequently impact the amount that is expensed or reversed in the profit and loss account for the relevant reporting period. During the year, the Company issued 15,000,000 performance rights (2022: 10,000,000 replacement performance rights) to the Managing Director, 27,000,000 performance rights (2022: Nil) to the Non-executive Directors and 51,600,000 performance rights (2022: 5,750,000 performance rights) to certain employees pursuant to the Altech Batteries Limited Performance Rights Plan. A total of 2,800,000 performance rights of ex-employees were cancelled during the year. 18. Reserves Share based payments reserve Foreign currency translation reserve Carrying amount at the end of the year Movements: Share based payments reserve Balance at the beginning of the period Fair value of performance rights issued Transferred to contributed equity – conversion of performance rights to share capital Expiration / forfeiture of performance rights Balance at end of year Foreign currency translation reserve Balance at the beginning of the period Foreign exchange movements on translation of subsidiary financial statements Balance at end of year 30-Jun-23 30-Jun-22 $ $ 2,839,027 1,762,369 (1,016,467) 1,964,499 1,822,560 3,726,868 30-Jun-23 30-Jun-22 $ $ 1,762,369 7,346,777 1,285,407 583,626 - (3,569,500) (208,749) (2,598,534) 2,839,027 1,762,369 1,964,499 1,543,044 (2,980,966) 421,455 (1,016,467) 1,964,499 - 39 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 19. Financial Instruments The Company's activities expose it to a variety of financial risks and market risks. The Company's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company. (a) Interest rate risk The Company’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in market, interest rates and the effective weighted average interest rates on those financial assets, is as follows: Weighted Average Effective Interest % 0.50% Notes 2023 Financial Assets Cash and cash equivalents Trade and other receivables Other non-current receivables 5(a) 6 13 Total Financial Assets Financial Liabilities Trade and other payables Lease liabilities Loans Payable Total Financial Liabilities 0.00% 14 16 Funds Available at a Floating Interest Rate $ Fixed Interest Rate $ Assets/ (Liabilities) Non Interest Bearing $ Total $ 3,571,159 - - 3,571,159 - - - - - - - - 34,442 4,244,005 4,278,447 - 2,884,702 2,596,055 5,480,757 6,326,018 - 3,571,159 2,884,702 2,596,055 9,051,916 6,326,018 34,442 4,244,005 6,326,018 10,604,465 Net Financial Assets/(Liabilities) 3,571,159 (4,278,447) (845,261) 1,552,549 - 40 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 19. Financial Instruments (continued) Weighted Average Effective Interest % Notes Funds Available at a Floating Interest Rate $ Fixed Interest Rate $ Assets/ (Liabilities) Non Interest Bearing $ Total $ 2022 Financial Assets 0.50% 10,912,939 Cash and cash equivalents Trade and other receivables Other non-current receivables 5(a) 6 13 Total Financial Assets Financial Liabilities Trade and other payables 14 0.00% Lease liabilities Total Financial Liabilities - - 10,912,939 - - - - - - - 89,926 89,926 - 502,908 7,208,984 7,711,892 412,222 412,222 10,912,939 502,908 7,208,984 18,624,831 412,222 89,926 502,148 Net Financial Assets/(Liabilities) 10,912,939 (89,926) 7,299,670 18,122,683 (b) Credit Risk The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date, is the carrying amount, net of any provisions for doubtful debts, as disclosed in the balance sheet and in the notes to the financial statements. The Company does not have any material credit risk exposure to any single debtor or group of debtors, under financial instruments entered into by it. (c) Liquidity Risk The Group has recuced liquidity risk due to the significant capital raisings post year-end. The Group’s objective is to maintain a balance between continuity of development funding and flexibility through the use of available cash reserves. The following table discloses the maturity analysis of financial assets and liabilities based on managements expectations: Within 1 Year 2023 $ 2022 $ Within 1-5 Years 2022 $ 2023 $ Over 5 Years 2023 $ 2022 $ Total 2023 $ 2022 $ Consolidated Group Financial Assets Cash and cash equivalents Trade and other receivables Other non-current receivables 3,571,159 10,912,939 2,884,702 502,908 2,596,055 - Total Financial Assets 9,051,916 11,415,847 Financial Liabilities Trade and other Payables Lease Liabilites (6,326,018) (412,222) (34,442) (55,394) Loans Payable (4,244,005) - Total Financial Liabilities Net Exposure (10,604,465) (467,616) (1,552,549) 10,948,231 - - - - - - - - - - - - - - - - - - 3,571,159 10,912,939 2,884,702 502,908 2,596,055 7,208,984 9,051,916 18,624,831 (6,326,018) (412,222) (34,442) (89,926) (4,244,005) - (10,604,465) (502,148) (1,552,549) 18,122,683 - - 7,208,984 7,208,984 - (34,532) - (34,532) 7,174,452 - - - - - - - - - - 41 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 19. Financial Instruments (continued) (d) Net Fair Values For assets and other liabilities, the net fair value approximates their carrying value. No financial assets and financial liabilities are readily traded on organised markets in standardised form. The Company has no financial assets where the carrying amount exceeds net fair values at balance date. The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the balance sheet and in the notes to the financial statements. (e) Foreign Exchange Risk The Group has exposures arising from transactions that are denominated in Euro’s and Malaysian Ringit. The Group holds cash and bank balances denominated in Euro and Malaysian Ringitt for working capital purposes. Consequently, the Group is exposed to movements in foreign currency exchange rates. The Group does not use any financial derivatives such as foreign currency forward contracts, foreign currency options or swaps for hedging purposes. 20. Accumulated losses Carrying amount at the beginning of the period Profit (loss) for the period Expiration of performance rights Carrying amount at the end of the year 21. Auditors' remuneration Audit - Moore Australia Audit (WA) Audit and review of the financial reports 22. Related Parties Key management personnel compensation Short-term employee benefits Post-employment benefits Share-based payments 30-Jun-23 30-Jun-22 $ (30,604,494) (59,717,465) - (90,321,959) $ (27,473,110) (5,729,919) 2,598,535 (30,604,494) 30-Jun-23 30-Jun-22 $ $ 48,778 50,619 30-Jun-23 30-Jun-22 $ 1,410,587 108,036 790,997 2,309,620 $ 1,317,967 99,297 489,012 1,906,276 During the financial year there were no loans made or outstanding at year end (2022: nil) Other transactions with key management personnel The mother of Luke Atkins (non-executive chairman) is the owner of the office premises that the Company rents for its registered office and principal place of business. During the year the Company paid $100,000 (2022:$100,000) rent and outgoings on normal commercial terms and conditions. Other related party transactions MIE Tech Sdn Bhd, a company controlled by Non-Executive Director, Tunku Yaacob Khyra, recharges RM52,800 monthly for secondment of Mr Uwe Ahrens to the Group. Altech Industries Germany GmbH and Altech Batteries GmbH each reimburses Altech Advanced Materials AG €1,900 monthly in relation to Mr Uwe Ahrens’s remuneration for services rendered in Germany, The Company pays Mr Uwe Ahrens €2,750 monthly for consultancy services performed in Germany. The Company charges Altech Advanced Materials AG, 3% p.a interest on a quarterly basis, on balance of consideration (€1,583,333) for sale of 25% of Altech Industries Germany AG. Altech Advanced Materials AG have a receivable amount of 26,628 owing to the Group at year-end. As per note 16 the Group has a loan of $4,244,055 owing to Altech Advanced Materials AG (AAM). It represents advances from AAM to Altech Industries Germany GmbH (AIG) and to Altech Energy Holdings GmbH (AEH). Interest payable by AIG and AEH to AAM is 3.25% per annum on outstanding loan amount. - 42 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 23. Expenditure commitments (a) Exploration The Company has certain obligations to perform minimum exploration work on the various mineral leases that it holds. These obligations may vary over time, depending on the Company's exploration programs and priorities. As at 30 June 2023, total exploration expenditure commitments on tenements held by the Company have not been provided for in the financial statements and those which cover the following twelve month period amount to $228,000 (2022: $228,000). These obligations are also subject to variations, may be subject to farm-out arrangements, sale of relevant tenements or via application for expenditure exemptions from prior-year commitments from the relevant government department. (b) Loan Commitments 0n 1 May 2015, the Company entered into an Intercompany Loan Agreement (Agreement) with its 100% owned subsidiary Altech Chemicals Sdn Bhd (ATCSB). Under the terms of the Agreement: • The Company extends a loan facility up to the amount of $100,000,000 to provide funding to enable ATCSB to advance the development of a high purity alumina manufacturing facility in Malaysia. Interest payable is nil for the period up to and preceding the date at which ATCSB commences commercial production from its proposed high purity alumina manufacturing facility. From the date at which ATCSB commences commercial production from its proposed high purity alumina manufacturing facility, interest shall be charged on the loan at an arms-length commercial rate of interest. • • 0n 1 April 2020, the Company entered into a Shareholder Loan Agreement with its 75% owned subsidiary Altech Industries Germany GmbH (AIG). On 29 December 2020, the Shareholder Loan Agreement was amended to include the party Altech Advanced Materials AG (AAM), the holder of the remaining 25% in AIG. Under the terms of the Shareholder Loan Agreement and as amended on 29 December 2020: • The Company extends a loan facility up to the amount of €50,000,000 to provide funding to enable AIG to advance the development of its operations in Germany. • AIG simultaneously and proportionally (75% to 25%) utilises the facility made available under the AAM Shareholder Loan Agreement. That is, funding to be provided to AIG is allocated in the proportions of 75% by the Company and 25% by AAM. • Under this agreement, interest payable is nil for the period up to and preceding the date at which AIG commences commercial production from its proposed battery materials manufacturing facility. • An Amendment Agreement was entered into by both parties on 11 November 2022, following which interest is payable by AIG at 3.25% on outstanding loan amount. 0n 22 November 2022, the Company entered into a Shareholder Loan Agreement with its 75% owned subsidiary Altech Energy Holdings GmbH (AEH) and AAM, the holder of the remaining 25% in AEH. Under the terms of the Shareholder Loan Agreement: • The Company and AAM provides financing up to the amount of €15,000,000 to AEH proportionally (75% to 25%) to enable AEH to on-lend the funds to its 75% owned subsidiary, Altech Batteries GmbH (ABG) for the development of a 100MWh battery production plant in Saxony, Germany. Interest payable by AEH is 3.25% per annum on outstanding loan amount. • 0n 6 December 2022, the Company’s 75% owned subsidiary, AEH entered into a Shareholder Loan Agreement with its 75% owned subsidiary Altech Batteries GmbH (ABG). Under the terms of the Shareholder Loan Agreement: • AEH extends a loan facility up to the amount of €15,000,000 to enable ABG to advance the development of a 100MWh battery production plant in Saxony, Germany. Interest payable by ABG is 3.25% per annum on outstanding loan amount. • On 7 December 2022, the Company’s subsidiary ABG entered into a Research and Development Agreement with Fraunhofer-Institut Fur Keramische Technologien Und Systeme IKTS (“Fraunhofer”) to develop battery systems for stationary energy storage based on sodium nickel chloride technology. The aim is to bring the technology to commercial production through the development of a 100MWh battery production plant in Saxony, Germany. Under the terms of the Research and Development Agreement: • The project starts on 13 September 2022 and has an expected period of performance of 4 years. • ABG makes quarterly payments up to a total combined amount of €13,600,000 for services performed by Fraunhofer, in accordance with an R&D Payment Plan, over a period of 4 years commencing on 13 December 2022: Payment Instalment (€ ‘mil) 0.360 0.360 0.560 0.660 1.020 1.020 1.370 0.700 1.150 0.900 0.700 0.700 0.550 0.550 1.500 1.500 Payment Date 13.12 .2022 13.03 .2023 13.06 .2023 13.09 .2023 13.12 .2023 13.03 .2024 13.06 .2024 13.09 .2024 13.12 .2024 13.03 .2025 13.06 .2025 13.09 .2025 13.12 .2025 13.03 .2026 13.06 .2026 13.09 .2026 Payment P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 P13 P14 P15 P16 - 43 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 23. Expenditure commitments (continued) • By mutual agreement, the timeline has been pushed back by one month, with the first payment being made in January 2023. • • In the event that ABG fails to provide timely payment, Fraunhofer may terminate the R&D contract. If commercialisation becomes unviable through outcome of a Definitive Feasibility Study, ABH may terminate the R&D contract. Within 1 month from the complete performance of the project and full payment of the €13,600,000, Fraunhofer shall transfer the ownership of the foreground IP in relation to the project to ABG. (c) Capital commitments EPC contracts for the construction of the Malaysian HPA plant and the Australian kaolin loading facility have been executed with SMS group GmbH and Simulus Engineering Pty Ltd for prices of US$280 million and US$2.5 million respectively. Commitment to the contracted expenditure is subject to a number of conditions being met including the securing of the total targeted project funding. As at 30 June 2023, the Company had no capital commitments in relation either contract (2022: Nil). All works completed as stage 1 or stage 2 early works construction under the US$280 million SMS group GmbH contract had been billed to the Company and paid as at 30 June 2023. As at 30 June 2023, no early works had been completed under the Simulus Engineering Pty Ltd contract. On 9 August 2022, the Company’s 75%-owned subsidiary, Altech Industries Germany GmbH entered into a Contract for Supplies and Services with Hatch Kuttner GmbH (formerly Kuttner GmbH & Co) for the development of a battery materials pilot plant in Saxony Germany, for the price of €2,981,146. The contract sum was subsequently varied to €4,074,828. As at 30 June 2023, the Group had capital commitments of $2,192,241. It is currently anticipated that all of the commitment amounts will become payable during the subsequent financial year (2023/24). 24. Segment Information The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The financial statements presented above are the same as the reports the directors review. Reportable Segments The Group operates four reportable segments, being the development of Silumna Anodes™, CERENERGY® and High Purity Alumina (HPA) and Corporate, which reflects the structure used by the Group’s management to assess the performance of the Group. Silumina Anodes™ $ CERENERGY® $ High Purity Alumina (HPA) $ Corporate $ Total $ (i) Segment performance Year ended 30 June 2023 Geographical Revenue Interest and other revenue R&D tax refunds Other income Total Revenue Result Segment loss before tax Income tax benefit Share of loss of associate Profit / (loss) Segment assets Segment liabilities Germany & Australia Germany Malaysia & Australia - - 3,071 3,071 (3,358,396) - - (3,358,396) 10,760,213 (6,302,801) - - - - - - - - (2,788,129) - - (2,788,129) 4,870,083 (2,312,129) (47,691,414) - - (47,691,414) 6,774,775 (29,796) Australia 234,078 41,570 17,737 293,385 (8,220,099) 519,295 (241,130) (7,941,934) 22,473,275 (2,358,562) 234,078 41,570 20,808 296,456 (62,058,038) 519,295 (241,130) (61,779,873) 44,878,346 (11,003,288) 25. Employee entitlements and superannuation commitments Employee Entitlements Employee entitlements at 30 June 2023 are: Annual Leave Provision $225,022 (2022: $219,814) and Long Service Leave Provision $173,800 (2022: $128,569). Directors, officers, employees and other permitted persons’ Performance Rights Plan Details of the Company's Performance Rights Plan are disclosed in the Remuneration Report. - 44 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 25. Employee entitlements and superannuation commitments (continued) Superannuation commitments The Company contributes to individual employee accumulation superannuation plans at the statutory rate of the employees’ wages and salaries, in accordance with statutory requirements, to provide benefits to employees on retirement, death or disability. Accordingly no actuarial assessment of the plans is required. Funds are available for the purposes of the plans to satisfy all benefits that would have been vested under the plans in the event of: ▪ termination of the plans; ▪ voluntary termination by all employees of their employment; and ▪ compulsory termination by the employer of the employment of each employee. During the year employer contributions (including salary sacrifice amounts) to superannuation plans totalled $272,968 (2022: $156,933). 26. Contingent liabilities There were no material contingent liabilities not provided for in the financial statements of the Group as at 30 June 2023 other than: Native Title and Aboriginal Heritage Native title claims have been made with respect to areas which include tenements in which the Group has an interest. The Group is unable to determine the prospects for success or otherwise of the claims and, in any event, whether or not and to what extent the claims may significantly affect the Group or its projects. Agreement is being or has been reached with various native title claimants in relation to Aboriginal Heritage issues regarding certain areas in which the Group has an interest. 27. Events subsequent to balance date Capital Raising On 18 July 2023 the Company issued a Prospectus in relation to a pro-rata non-renounceable entitlement issue of one (1) Share for every eight (8) Shares held by those Shareholders registered at the Record Date at an issue price of $0.07 per Share to raise up to $12,859,201. On 21 July 2023, the Company issued 42,857,142 fully paid ordinary shares to professional and sophisticated investors at $0.07 per share, raising gross proceeds from the share placement of $3.0 million. On 11 August 2023, the Company issued 147,145,801 fully paid ordinary shares at $0.07 per share, raising gross proceeds of $10.3 million. The shares were issued as part of the pro-rata non-renounceable entitlement issue pursuant to the Prospectus dated 18 July 2023. On 17 August 2023, the Company issued 29,414,218 fully paid ordinary shares at $0.07 per share, raising gross proceeds of $2.06 million. The shares were issued as part of the shortfall to the pro-rata non-renounceable entitlement issue pursuant to the Prospectus dated 18 July 2023. In addition, the Company intends to issue an additional 7,142,857 shortfall fully paid ordinary shares at $0.07 per share, to raise gross proceeds of $0.5 million. The Company will issue these additional 7,142,857 shortfall shares subject to receiving shareholder approval at the Annual General Meeting to be held on 27 October 2023. Further, there has not arisen since the end of the financial year any other item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years. - 45 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 28. Parent entity disclosure STATEMENT OF FINANCIAL POSITION ASSETS Current assets Non-Current assets TOTAL ASSETS LIABILITIES Current liabilities Non-Current liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Accumulated losses Share based payments reserve TOTAL EQUITY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Net profit / (loss) Total comprehensive loss for the year 29. Controlled entities Investments in controlled entities comprise: Name Altech Batteries Ltd Wholly owned and/or controlled entities: Altech Batteries GmbH Altech Industries Germany GmbH Altech Chemicals Sdn Bhd (Malaysia) 30-Jun-23 30-Jun-22 $ $ 1,030,615 11,055,759 94,943,654 92,252,694 95,974,269 103,308,454 764,980 173,800 938,780 560,654 158,930 719,583 95,035,489 102,588,871 124,487,777 124,487,777 (32,291,315) (23,661,275) 2,839,027 1,762,369 95,035,489 102,588,871 (8,630,039) (4,394,441) (8,630,039) (4,394,441) Beneficial percentage held by economic entity 2023 % 2022 % 56 75 100 - 75 100 Principal activities Parent entity Grid-Storage Battery Plant Battery Materials Plant HPA Plant Altech Meckering Pty Ltd Altech Chemicals Australia Pty Ltd Kaolin Mine Intellectual Property/Patent Holder Mineral exploration Altech Chemicals Sdn Bhd is incorporated in Malaysia, Altech Batteries GmbH and Altech Industries Germany GmbH are incorporated in Germany, all other controlled entities are incorporated in Australia. Altech Batteries Limited is the head entity of the consolidated group, which includes all of the controlled entities. Canning Coal Pty Ltd 100 100 100 100 100 100 - 46 - ALTECH BATTERIES LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 30. Interests in other entities Set out below is the summarised financial information for each subsidiary that has non-controlling interests that are material to the Group, before any intragroup eliminations. Altech Industries Germany GmbH Altech Energy Holdings GmbH Altech Batteries GmbH 2023 $ 2022 $ 2023 $ 2022 $ 2023 $ 2022 $ Summarised Financial Position Current assets Non-current assets Current liabilities 2,239,092 188,920 8,499,164 2,817,713 (3,647,767) (411,750) 119,867 5,487,747 (13,381) Non-current liabilities (11,326,648) (2,895,579) (5,623,174) NET ASSETS (4,236,159) (300,696) (28,942) Carrying amount of non- controlling interests Summarised Financial Performance Revenue 142,804 - Profit/(loss) after tax (3,358,396) (137,447) Other comprehensive income after tax Total comprehensive income - - - - 42,093 (12.012) - - Profit/(loss) attributable to non-controlling interests (839,599) (72,510) (3,003) - - - - - - - - - - 7,799,876 1,964,110 (2,308,313) (5,491,563) 1,964,110 2,920 (2,788,129) - (2,788,129) (1,219,806) - - - - - - - - - - - 47 - ALTECH BATTERIES LIMITED DIRECTORS’ DECLARATION For the year ended 30 June 2023 The Directors of the Company declare that: 1. The financial statements and note, as set out on pages 1-47, are in accordance with the Corporations Act 2001: (a) comply with Accounting Standards, which, as stated in accounting policy Note 1 to the financial statements, constitutes compliance with International Financial Reporting Standards (IFRS); and (b) give a true and fair view of the financial position as at 30 June 2023 and of the performance for the year ended on that date of the consolidated group. 2. The Managing Director and Chief Financial Officer have given the declaration required by s295A of the Corporations Act 2001. 3. 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. This declaration is made in accordance with a resolution of the board of directors and is signed by authority for and on behalf of the directors by: Iggy Tan Managing Director DATED at Perth this 19th day of September 2023 - 48 - INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALTECH BATTERIES LIMITED Report on the Audit of the Financial Report Opinion Moore Australia Audit (WA) Level 15, Exchange Tower, 2 The Esplanade, Perth, WA 6000 PO Box 5785, St Georges Terrace, WA 6831 T +61 8 9225 5355 F +61 8 9225 6181 www.moore-australia.com.au We have audited the financial report of Altech Batteries Limited (the Company) and its subsidiaries (the “Group”), which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial performance for the year then ended; and 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & 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. Key Audit Matters We have determined the matters described below to be the key audit matters to be communicated in our report. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Moore Australia Audit (WA) – ABN 16 874 357 907. An independent member of Moore Global Network Limited - members in principal cities throughout the world. Liability limited by a scheme approved under Professional Standards Legislation. - 49 - INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALTECH BATTERIES LIMITED (CONTINUED) Key Audit Matters (continued) Carrying value of Property, Plant and Equipment & Capitalised Development Expenditure (relating to the High Purity Alumina HPA Project) Refer to Note 1(f & i), Note 7 Property Plant Equipment & Note 10 Development Expenditure Property, plant and equipment (PPE as disclosed in Note 7 and capitalised development expenditure (DE) in Note 10 represented a significant balance prior impairment recorded in the period. the to These assets were predominantly related to the preliminary and design costs, stage one and two development costs of the Company’s High Purity Alumina (HPA) Project which comprises the proposed construction and operation of a HPA processing plant located in Malaysia. The evaluation of the recoverable amount of these assets requires significant judgment in determining the key assumptions supporting the expected future cash flows of the business and the utilisation of the relevant assets. A valuation was performed in the period and the Malaysian development costs and plant & equipment were written down to nil. Group’s ability to continue as a Going Concern Refer to Note 1(j) The financial statements are prepared on a going concern basis in accordance with AASB 101 Presentation of Financial Statements. The Group continues to incur significant operating losses in its ongoing efforts to advance the development of its Battery Minerals Project. As the directors’ assessment of the Group’s ability to continue as a going concern is subject to significant identified going concern as a significant risk requiring special audit consideration. judgement, we Our procedures included, amongst others: • Capitalised PPE and DE costs were formally impairment tested by management at 30 June 2023 through the use of a third party valuation. This resulted in the Malaysian Development costs and property, plant and equipment being written down to nil. We reviewed and discussed this impairment assessment. • Assessing the appropriateness of the relevant disclosures included in Notes 8 & 11 to the financial report. • Reviewed the remaining balance relating to the project, being the lease of the land as per note 8 and assessed for impairment. • Assessed the credentials of the independent valuer, their underlying assumptions and method of valuation. Our audit procedures included, amongst others, the following: • An evaluation of the directors’ assessment of the Group’s ability to continue as a going concern. In particular, we reviewed budgets and cashflow forecasts for at least the next 12 months and reviewed and challenged the directors’ assumptions. • Reviewed plans by the directors to defer certain payments and secure additional funding through either the issue of further shares and/or debt funding or a combination thereof. • An evaluation of the directors plans for future operations and actions in relation to its going concern assessment, taking into account any relevant events subsequent to the year end, through discussion with the directors. • Review of disclosure in the financial statements to ensure appropriate. Based on our work, we agree with the directors’ assessment that the going concern basis of preparation is appropriate. - 50 - INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALTECH BATTERIES LIMITED (CONTINUED) Other Information The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2023, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or 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. A further description of our responsibilities for the audit of the financial report is located on the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar1.pdf This description forms part of our auditor’s report. - 51 - INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALTECH BATTERIES LIMITED (CONTINUED) Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report as included in the directors’ report for the year ended 30 June 2023. In our opinion, the Remuneration Report of Altech Batteries Limited, for the year ended 30 June 2023 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. SHAUN WILLIAMS PARTNER MOORE AUSTRALIA AUDIT (WA) CHARTERED ACCOUNTANTS Signed at Perth this 20th day of September 2023. - 52 - ALTECH BATTERIES LIMITED CORPORATE GOVERNANCE STATEMENT For the year ended 30 June 2023 The board of directors of Altech Batteries Limited (“ATC”) is committed to conducting the Company’s business in accordance with the highest standards of corporate governance. The board is responsible for the Company’s Corporate Governance and the governance framework, policy and procedures, and charters that underpin this commitment. The board ensures that the Company complies with the corporate governance requirements stipulated in the Corporations Act 2001 (Cth), the ASX Listing Rules, the constitution of the Company and any other applicable laws and regulations. The table below summarises the Company’s compliance with the ASX Corporate Governance Councils Corporate Governance Principles and Recommendations (4th Edition), in accordance with ASX Listing Rule 4.10.3. Principles and Recommendations Disclosure Compliance Principle 1 – Lay solid foundations for management and oversight 1.1 A listed entity should disclose: These matters are disclosed in the Company’s Board Charter, which is available on the Company’s website Complies Complies Complies Complies Complies When a requirement arises for the selection, nomination and appointment of a new directs, the board forms a sub-committee that is tasked with this process, and includes undertaking appropriate checks and any potential candidates. When directors retire and nominate for re-election, the board does not endorse a director who has not satisfactorily performed their role. The company executes a letter of appointment with each director and services agreements with senior executives. The Company Secretary reports to the chair of the board on all matters to do with the proper function of the board. Due to its size and limited scope of operations, the Company does not currently have a diversity policy. Does not comply The Company does not yet collect diversity data sets for employees, management or Board. We understand that diversity encompasses a wide range of dimensions, including age, sex, ethnicity and other characteristics that contribute to an inclusive and diverse workforce. As the Company's activities increase in size, scope and/or nature, the board will consider the appropriateness of adopting a diversity policy. (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management 1.2 A listed entity should: (a) undertake appropriate checks before appointing a director or senior executive or putting someone forward for election as a director; and (b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re- elect a Director 1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment. 1.4 The company secretary of a listed entity should be accountable directly to the board, through the chair; on all matters to do with the proper functioning of the board. 1.5 A listed entity should: (a) have and disclose a diversity policy; (b) through its board or a committee of the board set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and (c) disclose in relation to each reporting period: (1) (2) the measurable objectives set for that period to achieve gender diversity; the entity’s progress towards achieving those objectives; and (3) either: (A) the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined “senior executive” for these purposes); or if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under the Act. (B) ALTECH BATTERIES LIMITED CORPORATE GOVERNANCE STATEMENT For the year ended 30 June 2023 Principles and Recommendations 1.6 A listed entity should: (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and (b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period. 1.7 A listed entity should: (a) have and disclose a process for evaluating the performance of senior executives at least once every reporting period; and (b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period. Disclosure Compliance Complies The board currently undertakes, on an annual basis, an internal formal evaluation of the performance of the board and individual directors. In addition to this, the Chairman provides informal feedback to individual board members on their performance and contribution to board meetings, on an ongoing basis. The performance of all senior executives is evaluated on an annual basis by the Managing Director and in the case of the Managing Director, by the board. Complies Principle 2 – Structure the board to be effective and add value 2.1 The board of a listed entity should: Does not comply (a) have a nomination committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent Director; and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate skills, knowledge, experience, independence and diversity to enable it to discharge it duties and responsibilities effectively. 2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills that the board currently has or is looking to achieve in its membership. 2.3 A listed entity should disclose: (a) the names of the directors considered by the board to be independent directors; (b) if a director has an interest, position or relationship of the type described in Box 2.3 but the board is of the opinion that it does no compromise the independence of the director, the nature of the interest, position or relationship in question and an explanation of why the board is of that opinion; and (c) the length of service of each director. Due to its size and limited scope of operations, the Company does not currently have a nomination committee, however board sub-committees are formed, as required, to manage matters that would normally be dealt with by a formally constituted nomination committee, as was the case with the search and appointment of the current Managing Director. As the Company's activities increase in size, scope and/or nature, the board will consider the appropriateness of a nomination committee. A copy of the board skill matrix is appended to this Corporate Governance Statement. Complies Mr Peter Bailey is considered by the board to be an independent director and this is disclosed on the Company web site and in its annual and half- yearly director reports. Complies The length of service of each director is disclosed in the Company’s annual and half yearly director reports and in notices of meetings when directors are nominated for re-election. ALTECH BATTERIES LIMITED CORPORATE GOVERNANCE STATEMENT For the year ended 30 June 2023 Principles and Recommendations Disclosure Compliance 2.4 A majority of the board of a listed entity should be independent directors. Mr Peter Bailey is the only independent member of the Company’s board. 2.5 The chair of the board of a listed entity should be an independent director and, in particular; should not be the same person as the CEO of the entity. Mr Luke Atkins is the Chairman and is not an independent Non-Executive Director. 2.6 A listed entity should have a program for inducting new directors and for periodically reviewing whether there is a need for existing directors to undertake professional development to maintain the skills and knowledge needed to perform their role as directors effectively. The Company Secretary and Managing Director ensure the comprehensive induction of all new directors to the Company, this includes site visits, presentations and meetings with executives. All directors are afforded opportunities for ongoing professional development at Company expense. Principle 3 – Instil a culture of acting lawfully, ethically and responsibly Does not comply however the board is of the view that the skills and experience of the directors allow the board to act in the best interests of shareholders and is appropriate for the size of the Company. Does not comply, however the board is of the view that this is appropriate for the Company, considering its size and stage of development. Complies 3.1 A listed entity should articulate and disclose its values 3.2 A listed entity should: (a) have and disclose a code of conduct for its directors, senior executives and employees; and (b) ensure that the board or a committee of the board is informed of any material breaches of that code. 3.3 A listed entity should: (a) have and disclose a whistleblower policy; and (b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy 3.4 A listed entity should: (a) have and disclose an anti-bribery and corruption policy; and (b) ensure that the board or a committee of the board is informed of any material breaches of that policy The Board is committed to the development of a statement of values. Does not Comply The Company code of conduct is available on the Company web site. Complies The Company’s Whistleblower Policy is available on the Company web site as well as company intranet. Complies An anti-bribery and corruption policy is available on the Company web site Complies ALTECH BATTERIES LIMITED CORPORATE GOVERNANCE STATEMENT For the year ended 30 June 2023 Principles and Recommendations Disclosure Compliance Principle 4 – Safeguard the integrity of corporate reports 4.1 The board of a listed entity should: (a) have an audit committee which: (1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and is chaired by an independent director; who is not the chair of the board, (2) Audit and Risk Management Committee has been formed. The Audit and Risk Management Committee Charter is available on the Company’s website. Complies and disclose: (3) (4) (5) the charter of the committee the relevant qualifications and experience of the members of the committee; and in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner. 4.2 The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. 4.3 A listed entity should disclose its process to verify the integrity of any periodic corporate report it releases to the market that is not audited or reviewed by an external auditor. Principle 5 – Make timely and balanced disclosure The board does receive a statement signed by the Managing Director and the Chief Financial Officer. Complies This process is currently being documented. Once this documentation is complete, a copy of the process will be available on the Company website. Does not comply 5.1 A listed entity should have and disclose a written policy for complying with its continuous disclosure obligations under listing rules 3.1 The Company does have a Continuous Disclosure policy, which is available on the Company web site. 5.2 A listed entity should ensure that its board receives copies of all material market announcements promptly after they have been made 5.3 A listed entity that gives a new and substantive investor or analyst presentation should release a copy of the presentation materials on the ASX Market Announcements Platform ahead of the presentation The board does receive copies of all market announcement, whether material or not, immediately after lodgement with the market. All new and substantive investor or analyst presentations are released to ASX ahead of presentation. Complies Complies Complies ALTECH BATTERIES LIMITED CORPORATE GOVERNANCE STATEMENT For the year ended 30 June 2023 Principles and Recommendations Disclosure Compliance The company does provide information about its governance on the Company’s web site. Complies The Company has implemented an investor relations program targeting retail investors and encourages all investors or potential investors to communicate with the Company via its web site. The Company Shareholder Communication Policy is available on the Company web site. For the first time, the company would be hosting the 2023 AGM online through its share registry platform. All resolution at the Company’s 2022 annual general meeting of shareholders were determined by poll Security holder can elect to receive communications from the Company electronically either by contacting the Company’s share registrar, or the Company directly. Complies Complies Complies Complies The Board has approved the formation of an Audit and Risk Management Committee. The Audit and Risk Management Committee Charter is available on the Company’s website. Complies Principle 6 – Respect the rights of security holders 6.1 A listed entity should provide information about itself and its governance to investors via its website. 6.2 A listed entity should have an investor relations program that facilitates effective two-way communication with investors. 6.3 A listed entity should disclose how it facilitates and encourages participation at meetings of security holders. 6.4 A listed entity should ensure that all substantive resolutions at a meeting of security holders are decided by a poll rather than by a show of hands. 6.5 A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically. Principal 7 – Recognise and manage risk 7.1 The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendance of the members at those meetings; or (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework. 7.2 The board or a committee of the board should: (a) review the entity’s risk management The board reviews the management framework annually. Complies framework at least annually to satisfy itself that it continues to be sound and that the entity is operating with due regard to the risk appetite set by the board; and (b) disclose, in relation to each reporting period, whether such a review has taken place. 7.3 A listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what role it performs; or (b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its governance, risk management and internal control processes. The Company does not currently have an internal audit function. The board considers that the Company is not of a size that currently warrants an internal audit function. Does not comply. ALTECH BATTERIES LIMITED CORPORATE GOVERNANCE STATEMENT For the year ended 30 June 2023 Principles and Recommendations Disclosure Compliance From 2023 onwards, the Company will be including Environmental, Social & Governance (ESG) Report as part of the Annual Report. Complies Partly Complies The Company has set up a Remuneration Committee which has four members comprising the Non-Executive Chairman, two Non-Executive Directors and the Managing Director. Only one director is considered independent and the Remuneration Committee is not chaired by an independent director. 7.4 A listed entity should disclose whether it has any material exposure to environmental or social risks and, if it does, how it manages or intends to manage those risks. Principle 8 – Remunerate fairly and responsibly 8.1 The board of a listed entity should: (a) have a remuneration committee which:: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director and disclose (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendance of the members at those meetings; or (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive. 8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives. 8.3 A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and (b) disclose that policy or a summary of it Complies Complies The Company discloses its practices in relation to the remuneration of non-executive directors, executive directors and senior executives in its annual remuneration report. The company’s Security Trading Policy obliges all directors, officers and employees of the Company to advise the Company, via the company secretary, or any securitisation of Company securities. A copy of the policy is available on the Company’s web site. As at the date of this statement the company secretary has not been advised by an officer or employee of the Company of any securitisation of Company securities that they own. As the Company's activities increase in size, scope and/or nature, the Company's corporate governance principles will be reviewed by the board and amended as appropriate. Further details of the Company's corporate governance policies and practices are available on the Company's website at www.altechgroup.com. ALTECH BATTERIES LIMITED CORPORATE GOVERNANCE STATEMENT For the year ended 30 June 2023 Board experience, skills and attributes matrix Experience, skills and attributes Total directors Experience Corporate leadership International experience Resources Industry experience Other board level experience Capital projects experience Equity and debt raising / capital markets Batteries and/or chemicals industry experience Knowledge and skills Legal Minerals and/or chemicals processing Engineering and project development Finance and Accounting Tertiary qualifications Law Engineering Commerce/Business Altech Batteries Limited board 6 6 6 5 6 6 6 5 1 4 4 3 1 4 2 ALTECH BATTERIES LIMITED ASX ADDITIONAL INFORMATION For the year ended 30 June 2023 The shareholder information set out below was applicable as at 19 September 2023. Altech Batteries Ltd has its registered office at Suite 8, 295 Rokeby Road, Subiaco, Western Australia, Australia, 6008. The telephone number is +61 8 6168 1555. Altech shares are listed on the Australian Securities Exchange as well the Frankfurt Stock Exchange. COMPANY SECRETARY The name of the Company Secretary is Mr Martin Stein. TWENTY LARGEST HOLDERS OF LISTED SECURITIES The names of the twenty largest holders of each class of listed securities are listed below: Ordinary Shares Name DEUTSCHE BALATON AKTIENGESELLSCHAFT DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT CITICORP NOMINEES PTY LIMITED BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM SMS INVESTMENTS S A MAA GROUP BERHAD BNP PARIBAS NOMS PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED MR KENNETH JOSEPH HALL BNP PARIBAS NOMS PTY LTD UOB KH PL AC LAKE MCLEOD GYPSUM PTY LTD MR JOHN SMITH & MS BARBARA SMITH MR YUSUF KUCUKBAS MR PETER JOSEPH BOURKE & MRS KERRIE LEEANNE JONES MR IAN EWART HALFORD BNP PARIBAS NOMINEES PTY LTD MR BASIL CATSIPORDAS MR PETER HUA MR PETER JOSEPH BOURKE LJ & K THOMSON PTY LTD Total Top 20 Others Total Ordinary Shares on Issue No of Ordinary Shares Held 225,719,835 102,928,401 80,744,322 75,989,860 57,418,528 48,616,267 35,324,154 Percentage % of Issued Shares 13.71% 6.25% 4.90% 4.62% 3.49% 2.95% 2.15% 34,484,190 14,000,000 2.09% 0.85% 11,874,282 0.72% 11,408,202 10,000,000 0.69% 0.61% 9,350,000 0.57% 7,573,000 0.46% 7,010,247 6,854,859 6,250,000 6,140,000 5,768,570 5,600,000 0.43% 0.42% 0.38% 0.37% 0.35% 0.34% 763,054,717 883,128,313 1,646,183,030 46.35% 53.65% 100.00% ALTECH BATTERIES LIMITED ASX ADDITIONAL INFORMATION For the year ended 30 June 2023 DISTRIBUTION OF EQUITY SECURITIES Analysis of numbers of security holders by size of holding as at 19 September 2023: Ordinary Shares Distribution Number of Shareholders Number of Shares 1 1,001 5,001 10,001 100,001 Totals – – – – – 1,000 5,000 10,000 100,000 and over 207 348 1,286 3,944 1,694 7,479 16,462 1,494,942 10,551,034 162,881,214 1,471,239,378 1,646,183,030 % of Issued Shares 0.00% 0.09% 0.64% 9.89% 89.37% 100.00% SUBSTANTIAL SHAREHOLDERS The names of the substantial shareholders listed in the holding Company's register as at 19 September 2023 are: Substantial Shareholder DEUTSCHE BALATON AKTIENGESELLSCHAFT DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT Number of Shares 225,719,835 102,928,401 % of Issued Shares 13.71% 6.25% UNMARKETABLE PARCELS The Company has 921 holders of unmarketable parcels, being a parcel of shares less than $500. UNQUOTED SECURITIES Altech has unquoted securities totalling 120,850,000 Performance Rights held by a total of 27 holders. The names of the holders holding more than 20% of each class of unlisted securities are listed below: Performance Rights Holder Managing Director Performance Rights Ignatius Tan VOTING RIGHTS Number 30,000,000 Subject to any rights or restrictions for the time being attached to any shares or class of shares of the Company, each member of the Company is entitled to receive notice of, attend and vote at a general meeting. Resolutions of members will be decided by a show of hands unless a poll is demanded. On a show of hands each eligible voter present has one vote. However, where a person present at a general meeting represents personally or by proxy, attorney or representative more than one member, on a show of hands the person is entitled to one vote only despite the number of members the person represents. On a poll each eligible member has one vote for each fully paid share held and a fraction of a vote for each partly paid share determined by the amount paid up on that share. ON-MARKET BUY BACK There is currently no on-market buyback program for any of Altech Batteries Limited’s listed securities. EXPLORATION AND MINING INTERESTS As at 30 June 2022, the Company has an interest in the following tenements: Tenement ID Registered Holder Location M70/1334 E70/4718-1 Altech Meckering Pty Ltd Canning Coal Pty Ltd WA Australia WA Australia Project Meckering Kerrigan ATC Interest 100% 100% Grant Date 19/05/16 1/12/15

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