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Bluechiip Limited ACN 104 795 922
Productivity, sample
quality and integrity
Contents
2017-18 HIGHLIGHTS .......................................................................................... 4
CHAIRMAN’S LETTER ........................................................................................ 8
MANAGING DIRECTOR’S REPORT ............................................................... 9
DIRECTORS REPORT ........................................................................................12
AUDITOR INDEPENDENCE DECLARATION ..............................................17
REMUNERATION REPORT ..............................................................................18
CORPORATE GOVERNANCE .........................................................................29
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................ 30
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME ..................................................31
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ..................32
CONSOLIDATED STATEMENT OF CASH FLOWS ..................................33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ..........34
DIRECTORS’ DECLARATION......................................................................... 56
INDEPENDENT AUDITORS REPORT ..........................................................57
ADDITIONAL ASX INFORMATION................................................................61
CORPORATE INFORMATION ........................................................................63
2017-18 Highlights
World-first, highly differentiated technology, with protected IP
$200M+ growing target market, with very large adjacent markets
Dramatically increasing partner pipeline, 29 readers sold up from 14 in FY17
Sale of products $434k, up from $140k in FY17 representing a 209% increase
Well advanced product development
Partner opportunity conversion with three executed licence and supply
agreements and Bluechiip Enabled products in manufacture
Growing partner supply, over 250k chips delivered in 2H FY18. Initial repeat
revenues with sales up 136% year on year
Initial $1M order received in Dec 17
Post year end updated Labcon agreement over $US11.6m ($A15.9m)
FY19, 20 and 21
Cumulative Reader Sales
29
23
24
14
15
9
9
4
4
1
1
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
FY16
FY17
FY18
Quarterly Chip Deliveries and Revenue
Genea
Licence
Agreement
Dec 2015
Planet
Innovation
Licence
Agreement
Sept 2016
Labcon
Licence
Agreement
April 2017
Labcon
Order for
$1M
Dec 2017
s
0
0
0
’
s
e
i
r
e
v
i
l
e
D
p
h
C
i
250
200
150
100
50
0
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
FY16
FY17
FY18
Chips
Revenue
4
Bluechiip Limited Annual Report 2018
250
200
150
100
50
0
R
e
v
e
n
u
e
$
0
0
0
s
’
Bluechiip Overview
Bluechiip’s technology wirelessly tracks the identification and temperature of valuable
samples such as tissue, blood, serum and plasma which are stored in vials and bags in harsh
environments like liquid nitrogen. Bluechiip’s technology improves productivity, reduces
human error and ensures sample integrity in industries such as the US$2B bio-preservation
market. Bluechiip’s miniature chips – smaller than the size of a matchhead – are attached
to storage bags and vials, and information from these chips is read by a mechanical reader.
Current sample-tracking technology – largely barcodes, radio-frequency identification
(RFID) technology and written labels – is simply not keeping up with the increasing value of
biosamples. Bluechiip’s chips are currently being built into a range of vials by a US company,
Labcon North America, one of the world’s biggest consumables manufacturers. Bluechiip is in
discussion with several other manufacturers to incorporate its technology into their products.
Bluechiip’s strong IP portfolio across ten patent families, including 25 granted patents.
Bluechiip Technology
The chip, a Micro Electro Mechanical System (MEMS), measuring 1mm x 1mm x 1mm, is a purely mechanical device
with no powered electronics. Unlike other labelling technology – such as labels, barcodes and radio-frequency
identification (RFID) technology – Bluechiip’s chips perform in extreme environments like liquid nitrogen, operating
reliably at -196°C. They are also resistant to gamma sterilisation, they are extremely difficult to clone or corrupt, and
provide the temperature of samples when read.
Resonating Micro Beams Shifting with Temperature
Each chip is a unique micro electro mechanical system
(MEMS) containing multiple beams
1
10
1
0 0
1
1
0
1
0
1
-1960C
Miniature Chip
The beams resonate at different frequencies which
are translated to an ID. The frequency of the
beams are directly related to the temperature
Billions of ID Combinations
Billions of unique ID combinations can be achieved
and are captured in this miniaturised chip
5
Bluechiip Limited Annual Report 2018Bluechiip Strategy
Bluechiip is now in the commercialization phase, having secured three OEM Agreements with
companies in Australia and the USA. The company is manufacturing and shipping chips, and
producing growing revenue. Bluechiip’s experienced team is working with potential customers
to increase take up of the company’s products and services. The company is initially targeting
companies with high-value samples – where the cost of failure is high – such as IVF, regenerative
medicine, cryo-transport and pharmaceuticals.
Primary Target Markets
Bluechiip’s initial target is the US$2b bio-preservation and cryo-preservation market, which processes
more than 300 million samples per year of tissue, blood, serum, plasma, etc for industries such as
pharmaceuticals, IVF, research and clinical trials.
Our Product
Bluechiip’s product range consists of a wireless tracking/measuring chip, a reader, and associated software.
• Bluechiip works with OEM partners to embed Bluechiip core technology into our partners’ consumables.
• The reader: There are several types of Bluechiip reader – benchtop, handheld and multi-point. Readers
enable instant tracking of each sample’s data, including provenance, history and temperature.
• The software: Bluechiip’s easy-to-use software database has wireless connectivity, and keeps chain-of-
custody records for each sample in one location.
Customer
Database
Web Interfaces
BLUE CUBE
Mobile readers
HAND-HELD READER
Tags
MATCHBOX READER
MULTIVIAL READER
RETROFIT BUTTON
FOR CRYOVIALS
CRYOTAG
CRYOVIAL
BOX
USER ID
FOB
6
Bluechiip Limited Annual Report 2018Competitive Advantages
Few technologies work in extreme environments and no other technology provides integrated wireless temperature-
reading and tracking. Traditional tracking technologies such as barcode and labels are not suited for many high-
value industries because labels and barcodes cannot be read through frost and removing frost to take readings can
damage samples. RFID technologies typically do not work in very low temperatures or survive sterilization procedures.
Conventional temperature-sensing technologies are limited because they sense the environmental temperature,
not the temperature of the specific samples, and they require wiring and electronics which do not work in harsh
environments.
Senses temperature and
reads ID through frost
Overcomes issues with
illegible handwriting
Frost time wasted and uncontrolled temperature
Bluechiip Enabled Features
Cryo
Operational
On-Board
Sensor
Non-Visual
ID
Anti
Counterfeit
Sterilisation
Proof
Bluechiip
Bluechiip
Bluechiip
Bluechiip
Bluechiip
Labels
Labels
Labels
Labels
Labels
Barcodes
Barcodes
Barcodes
Barcodes
Barcodes
RFID
RFID
RFID
RFID
RFID
Bluechiip Enabled Benefits
Improved
productivity
Increased
Sample
Quality
Reduced
Human Error
7
Bluechiip Limited Annual Report 2018Chairman’s Letter
Building scale as sales orders increase
Dear Shareholder,
The directors are very pleased to present the 2018 Annual Report to you after a
significant and pivotal year that lays the platform for building scale as sales orders
increase.
During the year, Bluechiip met one of its key objectives being the commercialisation of
its unique wireless tracking technology in biobanking. In December 2017 we received
our largest single order to date, worth $1 million, from Labcon North America. This
deal was surpassed nine months later, in September 2018, with a pivotal, $15.9 million
deal over three years.
The company’s revenue increased from $237k in FY17 to over $561k in FY18, sales of
readers increased from 10 in FY17 to 15 and we delivered over 250,000 chips. There is
now a pipeline of 29 readers in the USA, Europe and China and we are experiencing an
increasing interest in our unique technology and its potential in the bio preservation
market.
Against this background and on the back of the second Labcon order, in September
2018 we successfully raised $5.5 million in fresh capital in a share placement that
was oversubscribed. This capital provides a solid platform for Bluechiip to fund its
commercialisation plans and growth.
The Board announced a Share Purchase Plan on 10 September which provides the
opportunity for all eligible shareholders to apply to purchase up to $15,000 worth of
new fully paid shares at the same share price as that paid by sophisticated investors in
the placement.
Andrew McLellan has led and driven the Bluechiip team to achieve these results. They
are extremely motivated and creative and they thoroughly deserve our acclamation
for an outstanding performance.
The directors take this opportunity to thank all our shareholders for their patience
and continuing support and we welcome all new shareholders to our register. Bluechiip
has a very bright and exciting future and your Board is very confident you will be
rewarded with your investment.
Iain Kirkwood
Chairman
8 Bluechiip Limited Annual Report 2018
Managing Director’s Report
The year 2017-18 saw Bluechiip Limited make exciting progress on several fronts,
including supplying hundreds of thousands of tracking chips to one of our key OEM
partners, San Francisco-based Labcon North America. This growing momentum was
seen in our fourth quarter sales revenue of $232,384 and sales receipts of $185,862,
delivering both the highest quarterly sales revenue and sales receipts since our
listing on the ASX. The full-year sales revenue of $561,544 and sales receipts of
$511,650 represent increases of 136% and 95% respectively on the previous year.
We are confident of continuing this momentum into the
coming year – signing more contracts and delivering
more chips and hardware to customers worldwide. This
will lead to significant revenue growth. Our aim remains
unchanged – to have our unique, patented, wireless
sample-tracking technology for harsh environments
delivered across multiple market platforms, including
the US$2b (A$2.6b) bio-preservation market and large
adjacent markets.
Bluechiip continues to evolve. Importantly, 2017-18 saw
our production ramp up, as our tracking chips were
incorporated into vials manufactured by Labcon North
America, one of our key OEM partners.
The year 2017-18 saw Bluechiip record significant
revenue growth from repeated licence, service and
product contracts.
Notably, the sales of our chips in the past year rose
significantly quarter by quarter, from 2,000 chips in the
first quarter, to 20,000+ in the second, 80,000+ in the
third and close to 140,000 in the last quarter.
Bluechiip continues to make steady progress. The
Bluechiip of today has a highly-differentiated, expanding
core technology that is protected by more than 25
granted patents, with 6 more patents pending.
We are expecting greater revenue growth in the coming
year as Labcon North America ramps up its Bluechiip-
enabled product range. We expect further revenue from
licences, service and products as our OEM partners
launch Bluechiip-enabled products into global markets.
Importantly, we have sold several developer/trial kits,
allowing partners to trial our products in different
products and markets, and create prototypes.
Bluechiip has now sold 29 developer/trial kits to key
global institutions, including the Chinese Centre for
Disease, Control and Prevention (CCDC), an agency
of the Chinese Ministry of Health based in Beijing, and
SIAD, a European biobank solution provider for the life
sciences sector. We have identified more than 50 major
opportunities in our partner pipeline.
During the year Bluechiip took delivery of Multi-Vial
Readers, co-developed by Planet Innovation. The Multi-
Vial Reader, which can read a box of 100 Bluechiip-
enabled samples at a time, joins the Matchbox Reader
and Hand-Held Readers in our range. For a biobank
with hundreds of thousands of samples in storage, the
ability to get information from 100 vials at a time leads to
significant time and safety efficiencies. Facilities that buy
Multi-Vial Readers are likely to buy significant volumes of
consumables.
Demand is being driven by an increase in marketing
activity and an increase in market presence, especially in
North America. We anticipate accelerating engagement
with partners in North America, Europe and Asia, with
conversion into more OEM partnerships
We have executed several supplier agreements and
demonstrated our products in the marketplace.
Several partners have signed full Original Equipment
Manufacturing (OEM) licence and supply agreements.
Bluechiip continues to target an immediate addressable
market of US$250 million (A$320 million) from its three
key licence and supply agreements with:
Genea Biomedx IVF tracking market (US$20M), with
upcoming ongoing licence revenue received and product
development with eventual launch through global
pharmaceuticals distribution partner.
Planet Innovation Cryogenic cold chain logistics
(US$30M) and adjacent market opportunities.
Labcon North America Ltd Licence and Supply
Agreement with San Francisco-based life science
consumable supplier, which produces more than 1.4 billion
consumables annually. Labcon has launched Coldpoint™
Bluechiip-enabled range for the global market, including
Cryovials, Boxes, Readers and Software.
9
Bluechiip Limited Annual Report 2018Managing Director’s Report
During the past year Bluechiip made the following key
announcements:
Partner Pipeline
Engagement
(Non-Disclosure
Agreement)
(> 50)
Over 50 partner
opportunities up from 2 in
2015
Sale of
Developer/Trial
Kit, Evaluation
Agreement
(>29)
29 Reader sales accelerating
Development
and Supply
Agreement
(3)
Genea Biomedx - FY16
Supply and Development Agreement
Planet Innovation – FY17
Supply agreement and investment
Labcon North America FY17
Supply and Licence Agreement
Demonstration
in Market
(2)
Genea Biomedx
Demonstrated ESHRE July 2016/17
Labcon
Coldpoint Bluechiip Enabled vials
Commercial
Product
“Bluechiip
Enabled”
(1)
Labcon North America
ColdPoint® Bluechiip Enabled vials in
manufacture Jan ‘18
5 July 2017 The company raises $3.425 million from
rights issue and placement.
19 October 2017 The company scales up production
to meet increasing demand, as customers tool up for
production.
5 December 2017 San Francisco-based Labcon North
America places orders for Bluechiip chips, readers,
software and services valued at over A$1 million.
19 February 2018 Labcon North America, Bluechiip’s
OEM partner, announces it is manufacturing a range
of cryogenic vials incorporating Bluechiip’s tracking
technology.
19 February 2018 Labcon’s Bluechiip-enabled cryogenic
vial range displayed at the Society of Laboratory
Automation Systems (SLAS) show in San Diego,
alongside Cryogenic boxes, a Bluechiip Multivial Reader,
Cold Top, Matchbox reader and Bluechiip’s stream
software.
25 June 2018 Bluechiip announces that it has
manufactured and shipped more than 250,000 chips
to Labcon North America during the year. By year-end
the company expects to be manufacturing and shipping
100,000+ chips a month.
We were heartened by the response to our rights issue
and placement. This capital has enabled the company
to convert its unique and differentiated technology into
platforms and long-term partnerships. We both welcome
a new group of investors and appreciate the ongoing
support of our long-term shareholders.
I am confident that FY2018-19 will see a continuation of
Bluechiip’s momentum especially with the revised Labcon
Supply Agreement valued at $US11.6m ($A15.9m) over
the coming three financial years announced in August
2018.
Bluechiip is well positioned to deliver substantial growth
over the coming year into several markets, building
on our key assets: a highly differentiated, expanding,
protected IP portfolio; a large growing target market;
dramatically increasing partner pipeline with well-
advanced product development; partner opportunity
conversion; and repeat revenues. I am confident licence,
service and product sales will grow significantly in
2018- 19.
I congratulate the Bluechiip team on the significant
progress it has made over the past year and thank the
company’s board for its guidance and continued support.
Andrew McLellan
Managing Director
10
Bluechiip Limited Annual Report 2018The Bluechiip patent portfolio currently has 10 patent families with 25 granted patents and 6 patent applications
pending. Recently the Family 9 provisional patent has progressed to PCT application, and a new patent in Family 10
has had a provisional application submitted.
Title
Publication Number
Patents Granted
Expiry Date
(filing date if not granted)
Family 1: Memory Devices
Memory Devices
Memory Devices
Family 2: Tagging Methods and Apparatus
EP 1618513
United Kingdom, France,
Germany, Switzerland,
17 March 2024
US 7,434,737
USA
14 November 2025
Tagging Methods and Apparatus
EP 2124171
United Kingdom, France,
Germany, Switzerland, Italy
22 May 2028
Tagging Methods and Apparatus
US 8,186,587
USA
1 July 2030
Family 3: RFID Memory Devices
RFID Memory Devices
EP 2297736
United Kingdom, France,
Germany, Switzerland, Italy
19 June 2029
RFID Memory Devices
US 8,884,743
USA
2 July 2033
Family 4: Ringup/Ringdown Interrogation of RFID Tags
Ringup/ Ringdown Interrogation of Rfid Tags
EP 2335182
United Kingdom, France,
Germany, Switzerland, Italy
30 September 2029
Family 5: Sample Storage and Monitoring System
Sample Storage and Monitoring System
US 9,140,487
USA
21 January 2032
Sample Storage and Monitoring System
EP 2509412
Family 6: Temperature Sensing and Heating Device
Europe
(7 December 2010)
Temperature Sensing and Heating Device
AU 2011357590
Australia
22 December 2031
Temperature Sensing and Heating Device
US 20140008355
USA
24 April 2034
Temperature Sensing and Heating Device
EP 2668820
Family 7: Storage Cassette and Rack System for Biospecimens
Storage Cassette and Rack System For
Biospecimens
US 20160175837
Family 8: Monitoring Apparatus for Temperature-Controlled
Sample Collection and Transport
Monitoring Apparatus for Temperature-
Controlled Sample Collection and Transport
PCT/AU2017/050683
Family 9: A Device, System and Method for Temperature Limit
Indication and Detection of Temperature-Sensitive Items
A Device, System and Method for
Temperature Limit Indication and Detection
of Temperature-Sensitive Items
PCT/AU2017/050933
Europe
(22 December 2011)
USA
(30 May 2014)
PCT application
(1 July 2017)
PCT application
(31 August 2017)
Family 10: Wearable Tag Reader for Temperature-Controlled Environments
Wearable Tag Reader for Temperature-
Controlled Environments
AU 2018900314
AU Provisional
(1 February 2018)
11
Bluechiip Limited Annual Report 2018Directors Report
Directors
The names and details of the Company’s Directors in office during the financial year and until the date of this report
are as follows. Directors were in office for this entire year unless otherwise stated.
Iain M Kirkwood – Non-Executive Chairman
Qualifications: MA (Hons) Oxon, FCPA
Andrew McLellan – Managing Director and CEO
Qualifications: MBA, B Eng (Hons), GAICD
Appointed to the Board in November 2007, Iain serves
as Chairman. He was appointed as Executive Chairman
on 28 January 2014 and reverted to the role of Non-
Executive Chairman on 1 July 2014. He is an experienced
private consultant, investor and non-executive Director.
He has considerable practical and operational experience
gained from a successful financial career spanning
35 years in a range of industries including auditing,
resources, manufacturing and latterly healthcare in
Australia, Britain and the USA. He started his career
at Arthur Andersen & Co in London. During his career,
he has held a range of senior financial and general
management positions, including Woodside Petroleum
Limited, Santos Limited, Pilkington plc, F.H. Faulding & Co
Limited and Clinuvel Pharmaceuticals Limited.
During the past three (3) years he has also served as a
Director of the following other ASX listed companies:
• Simonds Group Limited
(Appointed 20 September 2017)
• Novita Healthcare Limited (formerly Avexa Limited)
(Appointed 9 August 2010, Resigned 30 October
2017)
• Vysarn Limited (formerly MHM Metals Limited)
(Appointed 13 February 2013, Resigned 23 March
2015)
• Vision Eye Institute Limited (VEI) (VEI was removed
from the official list of ASX on 15 December 2015)
(Appointed 15 November 2004)
Appointed as Managing Director and CEO on 27 January
2015. Andrew has vast experience in innovation and
commercialisation combined with significant technical
and operational experience. Prior to joining Bluechiip, he
was the CEO of Advanced Manufacturing Co-operative
Research Centre (AMCRC) which he now serves as a non-
executive Director. Andrew focused on bringing together
industry and research to develop and commercialise
ground breaking innovations. He has held a range of
senior positions including Director at Leica Microsystems
Pty Ltd (previously Vision BioSystems Pty Ltd, a division
of the former publicly listed Vision Systems Limited),
Vice President of Marketing and Business Development
North America and Director of Product Management
at Vision BioSystems Pty Ltd. Andrew holds a Bachelor
of Engineering Degree (Hons) and an MBA (Strategy)
from Monash University (Melbourne). In addition, he is
also a graduate of the Australian Institute of Company
Directors (GAICD).
Michael Ohanessian – Non-Executive Director
Qualifications: B Eng, MBA
Appointed to the Board on 15 December 2014. Michael
is currently the CEO of Praemium Limited. Michael
has considerable executive experience gained from
technology-related businesses with a mixture of
operational, strategic and leadership capabilities.
Following a ten-year career at Mobil Oil, Michael joined
the Boston Consulting Group where he consulted to
clients in a wide range of industries which include
banking, airlines, mining, packaging, sports, oil and gas,
retailing and biotechnology.
Michael later moved on to be the CEO of Vision
BioSystems, a division of the former publicly listed Vision
Systems Limited, where he transformed the business
over seven years from a small unprofitable contract
manufacturer into a vertically integrated, profitable and
growing medical diagnostics business with distribution to
over 60 countries. More recently he has served as Chief
Executive of Genetic Technologies Limited and has been
involved in investment management and corporate advice
with Lion Capital prior to joining Praemium Limited, a
company listed on the ASX as its CEO on 9 August 2011.
12
Bluechiip Limited Annual Report 2018Company Secretary
Lee Mitchell
Qualifications: BA, LLM (Melb)
Lee is a director at Nicholson Ryan, a boutique law firm
based in Melbourne, Victoria. He is a qualified solicitor
practising principally in corporate and commercial law
advising on corporate and securities regulation, equity
capital raisings, formulation and implementation of
mergers and acquisitions, corporate governance and
company secretarial matters.
He joined Bluechiip Limited as Company Secretary in
September 2010.
Andrew Cox – Non-Executive Director
Qualifications: MBA, B Commerce (MELB), ICA
Appointed to the Board on 26 July 2017. Andrew is a
finance professional with experience in emerging and
international markets. Andrew was a co-founder and
former chairman of private equity-funded media/
technology business Inlink (sold to ASX-listed oOh!
Media Ltd in 2015), and is a co-founder of Rezex Pty Ltd
and Xperior Pty Ltd.
Andrew began his career with KPMG in Melbourne before
moving to China and Hong Kong, where he spent seven
years with SG Warburg, the Australian Trade Commission
and Ernst & Young. He is a member of the Translation
and Commercialisation Committee of the Murdoch
Children’s Research Institute and is fluent in Mandarin
Chinese. Andrew holds a Bachelor of Commerce from
the University of Melbourne and an MBA from the
International Institute for Management Development
(Lausanne, Switzerland). He is also a member of the
Australian Institute of Chartered Accountants (ICA) and
is a graduate of the Australian Institute of Company
Directors.
Blair Healy – Non-Executive Director
Qualifications: B Eng (Elec) (Hons), Royal Military
College, aic
Appointed to the Board on 23 August 2017, Blair has
spent the past 17 years establishing, growing and selling
technology companies, both publicly and privately. After
graduating from the Royal Military College, Duntroon,
Blair served in the Australian Army for 8 years in
various technical and command positions. He was then a
systems engineering consultant in several large defence
and public transport projects. He later joined Futjitsu
Telecommunications as their R&D Manager and moved on
to Canada’s Nortel Networks as their Director Business
Development & Operations Asia Pacific in Singapore. He
then joined KUSP Limited as their CEO until its sale to
Senetas Corporation Limited and as CEO of Innovonics
Limited, which was sold to privately US owned company
Integrian Pty Ltd. Between 2008 and 2013 he was
founder and Managing Director of private company
Cogent Energy, Australia’s first low carbon distributed
co-generation energy company, which was acquired
by Origin Energy, and then Managing Director of Maxx
Engineering Pty Ltd, a private mechanical engineering
services company which was subsequently sold to
ThyssenKrupp in 2015.
13
Bluechiip Limited Annual Report 2018Directors Report
Interests in the Shares and
Performance Rights of The Company
and Related Bodies Corporate
As at the date of this report, the interests of the
Directors in the shares and performance rights of
Bluechiip Limited were:
Number of
Ordinary
Shares
Number of
Performance
Rights Over
Ordinary
Shares
Iain Kirkwood
27,097,732
-
Andrew McLellan
4,274,999
*5,750,000
These have been negated by the increased in operating
expenses incurred of $3,753,550 (2017: $2,969,195) to
arrive at a loss before income tax which has increased
to $2,492,491 (2017: $2,018,633) as a result of amongst
others, the following:
•
•
increased external research and development (R&D)
expenses - $875,146 (2017: $585,001) as a result of
the increased R&D activities during the year;
increased business development expenses - $236,719
(2017: $176,274) as a result of increased marketing
and business development activities, i.e. trade shows
carried out in the USA and European Union;
• higher share based payment expenses - $124,137
(2017: $86,748) from the additional performance
rights issued to employees during the year; and
Michael Ohanessian
8,672,595
Andrew Cox
Blair Healy
-
17,857,143
-
-
-
• higher employee benefits expenses - $1,439,055
(2017: $1,173,209) a result of annual salary increment
and bonus payment to selected employees for
performance achievements.
* Further details of the performance rights and terms are set out on the Variable
Compensation — Long-term Incentive section of the remuneration report.
Capital Structure
Dividends
No dividends were paid or declared since the start of the
financial year (2017: Nil). No recommendation for payment
of dividends has been made.
Principal Activities
The principal activity of the Group during the financial
year was the development and commercialisation of
a wireless tracking solution for the healthcare and life
science, security, defence and manufacturing industries
which represents a generational change from current
methods such as labels (hand-written and pre-printed),
barcodes (linear and 2D) and microelectronic integrated
circuit (IC)-based RFID (Radio Frequency Identification).
There have been no significant changes in the nature of
these activities during the financial year.
Operating and Financial Review
Operating Results
The consolidated loss of the Group for the financial year
after providing for income tax amounted to $2,492,491
(2017: loss of $2,018,633).
Results of Operations
The Company recognised net revenue totalling $561,544
(2017: $237,773) during the financial year from licence
income received and the sale of products.
Other income increased from $779,990 to $1,023,152
mainly due to the R&D tax incentive income receivable
during the year in line with the increased R&D activities.
On 10 September 2018, the Company announced the
successful placement of approximately 93 million
new ordinary shares in Bluechiip to sophisticated and
professional investors at an issue price of $0.059 per
new ordinary share in Bluechiip for total proceeds of
$5.5 million. The Placement was successfully completed
on 14 September 2018 with the entire proceed of $5.5
million (less costs) fully received and 93,220,339 new
ordinary shares issued at $0.059 per ordinary share. As
at the date of this report, subsequent to the completion
of the Placement, the Company has 490,253,716 fully
paid ordinary shares on issue.
Significant Change in the State
of Affairs
Other than as detailed in this financial report, there has
been no significant change in the state of affairs of the
Company.
Events After Balance Date
On 29 August 2018, the Company announced that it had
entered into a development and supply agreement with
Labcon North America (Labcon) for a three (3) year
term to supply chips, readers, software and engineering
services worth USD11.9m ($15.9m). The agreement
provides for Bluechiip to meet the orders from Labcon
effective 24 August 2018 in the following manner:
a. supply of chips, readers, software and engineering
services worth USD4.2m ($5.8m) over a two (2) year
period;
b. supply of products and services with a minimum order
of USD7.4m ($10.1m) in the third year following the
two (2) year period; and
14
Bluechiip Limited Annual Report 2018c. extend a further two (2) years of development
and supply contract to a fourth and fifth year with
minimum orders to be determined.
On 10 September 2018, the Company announced the
successful placement of approximately 93 million
new ordinary shares in Bluechiip to sophisticated and
professional investors at an issue price of $0.059 per
new ordinary share in Bluechiip raising $5.5 million
before costs (Placement). In conjunction with the
Placement, the Company announced a Share Purchase
Plan (2018 SPP) for all its existing shareholders at the
same price of $0.059 per new share.
Subsequently, on 14 September 2018, the Company
announced the completion of the Placement with $5.5
million net proceeds fully received. As at the date of this
report, the 2018 SPP remains open for application until
its expected closing date on 28 September 2018.
Except for the above, there were no other matters
or circumstances that have arisen since the end of
the financial year which significantly affected or could
significantly affect the operations of the Group, the
results of these operations or the state of affairs of the
Group in future financial years.
Basis of Preparation
The financial report has been prepared on a going
concern basis which takes into account the Group’s
assets and liabilities and assumes that funds will be
obtained from several sources as outlined in Note 2 to
the Financial Statements.
Likely Developments and Expected
Results
The year ahead will focus on supporting our existing
Original Equipment Manufacturers (OEM) partners with
delivery to existing and new orders for chips, readers,
software and engineering support services while also
pursuing existing and new pipeline opportunities to
translate into sales. Bluechiip will continue with its
strategy of working with OEM partners to integrate
Bluechiip technology in OEM products. This will be
complemented by the progression of the Bluechiip
Multi-Vial Reader and Hand Held Reader into manufacture
and product registrations across the globe to address
the need for temperature tracking devices and solutions
for the high volume biobanking sector. This is expected
to lead to the demand for our technology and products.
The Company will continue to pursue sales, marketing
and business development activities, including collaborative
research and development activities with OEM players
while also working with end users through distribution
channels.
The Company will continue to work through its business
development team in the USA on the expansion of its OEM
pipeline in the USA, Europe and APAC markets and to
convert OEM partner opportunities.
The Company expects to continue research and
development of solutions to meet OEM partners’
requirements as well as continued expansion on
underlying core intellectual property including on our
overtemperature chip technology.
Environmental Regulation and
Performance
The Group’s operations are not regulated by any
significant environmental regulations under a law of the
Commonwealth or of a state or territory.
Options
Unissued Shares
As at the date of this report, there were no unexercised
options (2017: Nil) over ordinary shares or shares issued
on the exercise of options or rights.
As at the date of this report, there were 12,162,000
(2017: 8,500,000) unexercised performance rights (zero
exercise price options) over ordinary shares. Further
details of the performance rights and the terms are set
out in the Variable Compensation - Long-term Incentive
section of the remuneration report.
Indemnification of Directors and
Officers
The Company has not granted any indemnity to any
current or former Directors or officers against any
liability other than as provided in the Company’s
constitution. However, it is intended that the Company
will indemnify the Directors and Company Secretary
against any liability incurred while discharging their
duties and obligations – subject to Part 20.2 of the
Corporations Act 2001.
During the financial year, the Company has paid
premiums in respect of a contract insuring the Directors
of the Company (as named above) and all Executive
Officers of the Company against any liability incurred
as such a Director, secretary or executive officer to the
extent permitted by the Corporations Act 2001.
The total amount of Directors & Officers Liability
insurance contract premiums paid was $33,750
(2016: $19,983).
15
Bluechiip Limited Annual Report 2018
Directors Report
Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Deloitte Touche Tohmatsu, as part
of the terms of its audit engagement agreement against claims by third parties arising from the audit. No payment
has been made to indemnify Deloitte Touche Tohmatsu during or since the financial year.
Directors’ Meetings
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the
number of meetings attended by each Director was as follows:
Director’s Meetings
Remuneration and Nomination
Committee Meeting
Audit Committee Meetings
Eligible
Attended
Eligible
Attended
Eligible
Attended
I Kirkwood
A McLellan
M Ohanessian
Andrew Cox
– Appointed 26 July 2017
Blair Healy
– Appointed 23 August
2017
9
9
9
9
9
Committee Membership
9
9
9
9
9
1
-
1
1
1
1
-
1
1
1
2
-
2
2
2
2
-
2
2
2
As at the date of this report, the Company had an Audit committee and a Remuneration and Nomination committee of
the Board.
Members acting on the committees of the Board during the year are:
Audit
Remuneration and Nomination
Andrew Cox (Chairman) – Appointed 28 July 2017
Blair Healy (Chairman) - Appointed 25 August 2017
Iain Kirkwood (former Chairman) – Resigned as Chairman 28 July 2017
Michael Ohanessian – Resigned as Chairman 25
August 2017
Michael Ohanessian
Iain Kirkwood
Blair Healy - Appointed 25 August 2017
Andrew Cox - Appointed 28 July 2017
Rounding
The amounts contained in this report and in the financial report have been rounded to the nearest one dollar under
the option available to the Company under ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191. The Company is an entity to which the Instrument applies.
Auditor Independence Declaration
The Directors received the declaration set out on the following page from the auditor of Bluechiip Limited.
Non-Audit Services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in Note 27 of the financial statements. The Directors are satisfied that the provision of non-audit
services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The nature, value and scope of the non-audit services are considered not to have compromised auditor independence.
16
Bluechiip Limited Annual Report 2018Auditor Independence Declaration
Deloitte Touche Tohmatsu
ABN 74 490 121 060
550 Bourke Street
Melbourne VIC 3000
GPO Box 78
Melbourne VIC 3001 Australia
DX: 111
Tel: +61 (0) 3 9671 7000
Fax: +61 (0) 3 9671 7001
www.deloitte.com.au
21 September 2018
Board of Directors
Bluechiip Limited
1 Dalmore Drive
SCORESBY VIC 3179
Dear Board Members
Bluechiip Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide
the following declaration of independence to the directors of Bluechiip Limited.
As lead audit partner for the audit of the financial statements of Bluechiip Limited for
the financial year ended 30 June 2018, I declare that to the best of my knowledge and
belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation
to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Anneke Du Toit
Partner
Chartered Accountants
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of
member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/au/about for a detailed
description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
The entity named herein is a legally separate and independent entity. In providing this document, the author only acts in the named
capacity and does not act in any other capacity. Nothing in this document, nor any related attachments or communications or
services, have any capacity to bind any other entity under the ‘Deloitte’ network of member firms (including those operating in
Australia).
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
17
Bluechiip Limited Annual Report 2018
Remuneration Report
Compensation of Executives
This report outlines the compensation arrangements in
place for Directors and senior executives of the Company
being the Key Management Personnel (KMP) of the
Company – being those persons having authority and
responsibility for planning, directing and controlling the
major activities of the Company, directly or indirectly,
including any Director and includes all the executives in
the Company. For the purposes of this report, the term
“executive” includes the interim CEO/CSO and senior
executives but does not include the non-executive
Directors or the secretary of the Company.
All sections contained herein have been subject to audit
as required by section 308(3C) of the Corporations Act.
Remuneration is referred to as compensation in this
report.
Individual KMP Disclosures
Details of KMP of the Company are set out below:
Directors
Iain Kirkwood
Non-Executive Chairman
Andrew McLellan
CEO/Managing Director
Michael Ohanessian
Non-Executive Director
Andrew Cox
Blair Healy
Non-Executive Director
Appointed 26 July 2017
Non-Executive Director
Appointed 23 August 2017
Remuneration and Nomination
Committee
The The Remuneration and Nomination Committee of
the Board is responsible for making recommendations to
the Board on the remuneration arrangements for Non-
Executive Directors (NEDs) and executives. The Board
approves the remuneration arrangements for executives
having regard to the recommendations made by the
Remuneration and Nomination Committee including any
Short-term Incentive (STI) or Long-term Incentive (LTI)
arrangements. The Board also sets the aggregate fee
pool for NEDs (which is subject to shareholder approval)
and NED fee levels.
The Remuneration and Nomination Committee comprises
all two NEDs, each of which is considered independent.
The Remuneration and Nomination Committee meets
periodically as part of the Directors’ meetings during
the year. Executives are not present at meetings of the
Committee except by invitation.
The Remuneration and Nomination Committee has not
engaged any external remuneration advisers during the
financial year.
Further information on the Remuneration and
Nomination Committee’s role, responsibilities and
membership is located at bluechiip.com/about-us/
corporate-governance/
Principles of Compensation and
Strategy
The Remuneration & Nomination Committee of the
Board assesses the appropriateness of the nature and
amount of remuneration of NEDs and executives on
a periodic basis by reference to relevant employment
market conditions, with the overall objective of ensuring
maximum stakeholder benefit from the retention of
a high performing Director and executive team and
aligning the interests of the executives with those of the
shareholders.
Bluechiip’s remuneration strategy is designed to attract,
motivate and retain employees and NEDs by identifying
and rewarding high performers and recognising the
contribution of each employee to the continued
growth and success of the Company. To this end, key
objectives of the Company’s reward framework are
to ensure that remuneration practices are aligned to
the Company’s business strategy, offer competitive
remuneration benchmarked against the external
market, provide strong linkage between individual and
Group performance and rewards and align the interests
of executives with shareholders. Where relevant,
the remuneration framework incorporates at risk
components through STI and LTI arrangements tailored
to the particular executive by reference to both financial
and other metrics which generate value for shareholders.
In accordance with best practice corporate governance,
the structure of NED and executive remuneration is
separate and distinct.
The Board assumes full responsibility for compensation
policies and packages applicable to Directors and
senior executives of the Company. The broad
compensation policy is to ensure the compensation
package appropriately reflects the person’s duties
and responsibilities, and that compensation levels are
competitive in attracting, retaining and motivating
people who possess the requisite level of skill and
experience. Employees may receive at-risk incentive
payments remunerated as cash or share options based
on the achievement of specific goals related to the
performance of the individual and the Company (as
determined by the Directors). Incentives are provided to
senior executives and employees for the achievement of
18
Bluechiip Limited Annual Report 2018
individual and strategic objectives with the broader view
of creating value for shareholders.
Components of total compensation are ‘at risk’
(variable compensation) and dependent on meeting
pre-determined performance benchmarks including
Key Performance Indicators (KPIs). The inclusion of
appropriate challenging performance hurdles in relation
to variable compensation is designed to align employee
performance with the creation of shareholder value and
wealth. KPIs are agreed and set each year for KMP with
the specific objective of influencing both short and long-
term performance and the generation of shareholder
wealth.
Variable or performance-linked compensation comprises
cash bonus and/or share based payments.
Fixed Compensation
Fixed compensation consists of a base salary and
employer superannuation contributions. Fixed
compensation levels are set so as to provide a base
level of compensation which is both appropriate to the
position and is competitive in the market.
Fixed compensation is reviewed at least annually by
the Remuneration and Nomination Committee and
the process consists of a review of the Company’s
performance, relevant comparative compensation in
the market and, where appropriate, external advice on
policies and practices. Employees receive their fixed
compensation in cash. The Board’s policy is to ensure
that fixed remuneration is market competitive having
regard to industry peers and companies of similar
financial size. Given the Company’s size the Company
generally undertakes its own review of these matters,
which it does on an ongoing basis, but does from time to
time engage remuneration consultants where considered
necessary.
KPIs are individually tailored by the Board, based on
recommendations and input from the Remuneration &
Nomination Committee in advance for each employee
each year, and reflect an assessment of how that
employee can fulfil his or her particular responsibilities
in a way that best contributes to Company performance
and shareholder wealth in that year with close alignment
to the role and responsibility within the organisation
and in conjunction with the strategic objectives of the
Company.
Performance Linked Compensation
All employees are potentially eligible to receive at-
risk incentive payments and/or securities (shares or
options) based on the achievement of specific goals
related to (i) performance against individual KPI’s and/
or (ii) the performance of the Company as a whole as
determined by the Board based on a range of factors,
both financial and non-financial. These factors include
traditional financial considerations such as operating
performance, cash consumption and deals concluded
and also industry-specific factors. The purpose of these
payments is to reward employees for their contribution
to the Company.
Employment contracts for staff other than the CEO
provide for variable compensation of up to 10% of their
total fixed compensation package (although higher
variable compensation payments may be made at the
Board’s discretion).
The Remuneration & Nomination Committee makes a
recommendation annually to the Board in respect of
incentive compensation for employees and executives.
The Board at its sole discretion determines the
total amount of variable compensation payable as
a percentage of the total annualised salaries for all
employees employed as at the end of the financial year
(with pro rata reductions to the annualised salary made
for any employee not employed for the entire financial
year).
The CEO has the discretion to recommend the offer of
rights or options to acquire ordinary shares or the direct
issue of shares to any member of staff in recognition
of exemplary performance. Such securities may be
fully vested upon issue given that they are issued as
a reward for past performance rather than as a long-
term incentive. Any issue of rights or options proposed
as incentive compensation requires approval by the
Board and is subject to any limitations imposed by the
Corporations Act and the ASX Listing Rules. The Board
considers that the performance linked compensation
structure is operating effectively.
At, or as soon as practicable after, the beginning of
the financial year, individual and team performance
for the previous year is assessed for every employee
by their manager and new objectives set for the
forthcoming year. These objectives include department
and project specific objectives together with individual
stretch objectives, challenging, realistic and personal
development objectives tailored to the employee’s role
within the organisation. Measurement, management
support, target dates and training course requirements
are all set. Progress against the objectives is reviewed
during the year and percentage achievement
concluded at the end of the year, whereupon the cycle
recommences. The outputs of this process form the basis
of the assessment of the individual’s personal incentive
compensation.
The Board has discretion to reduce, cancel or clawback
any unvested performance-based remuneration in the
event of serious misconduct or a material misstatement
in the Group’s financial statements.
19
Bluechiip Limited Annual Report 2018Remuneration Report
Variable Compensation – Short-term Incentive (STI)
The Company does not operate a formal STI program other than in respect of the CEO. The CEO is eligible to
receive a cash bonus subject to the attainment of defined KPIs. The STI is based on the achievement of financial and
non-financial objectives. The actual STI payment awarded to the CEO will depend on the extent to which specific
targets set at the beginning of the year are met but potentially could be an amount of up to 25% of the CEO’s base
remuneration package. Financial performance targets include net sales target and net profit before tax and non-
financial performance targets include individual objectives which are aligned to the Group’s strategy. The Company
has predetermined financial performance benchmarks which must be met in order to trigger payments under the STI
plan and these are varied on a yearly basis in line with annual budgeting process.
A summary of the measures and weightings are set out below.
An amount of $124,137 (2017: $86,748) has been recognised in the 2018 financial year by way of share based payment
expense. This is in respect of performance rights (unvested) issued.
Service Contracts
Remuneration arrangements for executives are formalised in employment agreements. The following outlines the
details of contracts with executives.
Chief Executive Officer
The CEO, Andrew McLellan, is employed under an ongoing employment contract which can be terminated with notice
by either party.
The key terms of the contract are as follows:
• Annual base Salary of $290,000 including superannuation;
• Short-term Incentive of cash bonus being up to 30% of Andrew McLellan’s annual base salary, payable on the
achievement of agreed performance targets;
• Treatment of entitlements upon termination of employment are as follows:
Notice
Period
Payment
in Lieu of
Notice
Treatment of Short-term
incentives
Treatment of Long-term
Incentives
Termination by Company
(death, disablement,
redundancy etc)
3 months
3 months
Any STI payments are at
Board discretion
At the discretion of the Board
Termination for Cause
None
None
Any STI payments are at
Board discretion
Unvested awards forfeited
Vested and unexercised
awards forfeited
Resignation by Employee
3 months
None
Any STI payments are at
Board discretion
Unvested awards forfeited.
All other KMP are or were employed under contracts with the following common terms and conditions:
• combination of twelve (12) months fixed terms and/or no fixed term and no termination payment prescribed;
• terminable by either party on the giving of one (1) month notice in writing; and
• the Company may terminate any contract for cause (as defined).
20
Bluechiip Limited Annual Report 2018Variable Compensation – Long-term Incentive (LTI)
The Remuneration and Nomination Committee also reviews and approves the issue of share based payments to staff
and KMP as a means of providing a LTI for performance and loyalty.
LTI awards to executives are made under the executive Performance Rights Plan and are delivered in the form of
performance rights or zero exercise price options. The performance rights will vest over a period of up to three years
subject to meeting performance measures, The Company’s Performance Rights Plan in issue are as follow:
2018
3,000,000 performance rights (zero exercise price options) were issued to the CEO on 1 July 2017 (Performance
Rights Plan 2017) on the terms specified below. No other performance rights or options were issued to Directors or
KMP in the financial year ended 30 June 2018.
Performance Rights Plan 2017
The number of performance rights that will vest will be determined by the TSR performance relative to the movement
in the ASX All Ordinaries Accumulation Index (AORD). During the financial year, a total of 3,000,000 performance
rights were granted to Andrew McLellan and 4,000,000 performance rights were granted to employees of the
Company. The performance rights have been issued in three tranches.
Grant Date
No. of performance rights
granted to CEO
Tranche 1
1 July 2017
1,000,000
Tranche 2
1 July 2017
1,000,000
Tranche 3
1 July 2017
1.000,000
No. of performance rights
granted to employees
1,333,333
1,333,333
1,333,333
Vesting Date
30 August 2018
30 August 2019
30 August 2020
Performance Period
1 July 2017 – 30 June 2018
1 July 2018 – 30 June 2019
1 July 2019 – 30 June 2020
Expiry Date
30 June 2020
31 December 2021
31 December 2022
2017
3,000,000 performance rights (zero exercise price options) were issued to the CEO on 1 July 2016 (Performance
Rights Plan 2016). No other performance rights or options were issued to Directors or KMP in the financial year ended
30 June 2017.
21
Bluechiip Limited Annual Report 2018Remuneration Report
Non-Executive Director Compensation
The Constitution and the ASX Listing Rules specify that the aggregate compensation of Non-Executive Directors
shall be determined from time to time by a general meeting. An amount not exceeding $500,000 was last approved
by shareholders at the Company’s Annual General Meeting held on 10 November 2011 is to be divided between the
Directors as agreed by the Board.
Non-Executive Directors do not receive performance related compensation and the structure of Non-Executive
Director and senior management compensation is separate and distinct. Non-Executive Directors do not have
contracts of employment but are required to evidence their understanding and compliance with the Board policies of
Bluechiip Limited. These Board policies do not prescribe how compensation levels for Non-Executive Directors are
modified from year to year.
Compensation levels are to be reviewed by the Board each year taking into account cost of living changes, changes to
the scope of the roles of the Directors, and any changes required to meet the principles of the overall Board policies.
The remuneration of Non-Executive Directors’ for the years ended 30 June 2017 and 30 June 2016 is detailed in the
table below under ‘Remuneration of Key Management Personnel’.
Directors’ and Executive Officers’ Compensation Tables
Details of the nature and amount of each major element of the compensation of each KMP including Directors of the
Company are disclosed in accordance with Accounting Standard AASB 124 Related Party Disclosures and with the
Corporations Act 2001 in the following tables.
No options or performance rights are held by persons in the following compensation tables were exercised during the
2018 and 2017 financial years other than 1,375,000 performance rights held by Andrew were vested and exercised
during the financial year (2017: Nil).
In the following tables, the fair value of the performance rights granted to executive officers has been calculated
based on the value at the date of grant using a hybrid trinomial option pricing model which uses a combination of
Monte Carlo Simulation and a trinomial lattice to model the performance of the Company’s shares and the individual
shares within the selected peer group, taking into account their individual volatilities and correlations. The value as
disclosed is the portion of the fair value of the performance rights allocated to this reporting year. Refer to the next
sections of this report for full details of the performance rights valuations.
Loan
There were no loans to any Directors or KMPs during the financial year (2017: Nil).
Other Transactions and Balances With KMP
During the financial year, Iain Kirkwood fully subscribed to his commitment of 8,928,571 ordinary shares for a total
subscription price of $250,000 as part of the placement of shortfall shares in conjunction with the Rights Issue
completed in July 2017. The placement to Iain Kirkwood was subject to shareholders approval, which was obtained at
the 2017 AGM.
22
Bluechiip Limited Annual Report 2018e
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23
Bluechiip Limited Annual Report 2018
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#
#
Bluechiip Limited Annual Report 2018
Grants, Modifications and Exercise of Options and Performance Rights Over
Equity Instruments Granted as Compensation
Shares Issued on Exercise of Options and Performance Rights
No options or performance rights held by persons in the following compensation tables were exercised during the
2018 and 2017 financial years other than 1,375,000 performance rights held by Andrew McLellan that vested and were
exercised during the financial year (2017: Nil).
Additional Disclosures Relating to Shares
The number of ordinary shares in Bluechiip Limited held by or controlled by each KMP of the Group during the
financial year is as follows.
Balance at
1 July 2017
Granted as
Remuneration
I Kirkwood
19,887,732
A McLellan
2,173,166
M Ohanessian
6,504,446
A Coxi
B Healyii
Total
-
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28,565,344
i Appointed 26 July 2017.
ii Appointed 23 August 2017.
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Performance
Rights
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1,375,000
2,168,149
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27,962,125
1,375,000
Net Change
Other
Balance at
30 June 2018
-
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4,274,999
8,672,595
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17,857,143
57,902,469
25
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27
Bluechiip Limited Annual Report 2018
Consequences of the Company’s Performance on Shareholder Wealth
The following table summarises the Company’s performance in the current financial year and the previous four years
since the Company was listed in June 2011.
30 June 2014 $ 30 June 2015 $ 30 June 2016 $ 30 June 2017 $ 30 June 2018 $
Measures
Closing share price at 30 June
Basic Earnings Per Share (cents)
Dividends
0.04
(2.3)
None
0.05
(1.3)
None
0.022
(0.9)
None
0.028
(0.7)
None
0.054
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None
Loss before income tax
2,555,961
1,911,688
1,676,983
2,018,633
2,492,491
In considering the Company’s performance and how best to generate shareholder value, the Board has regard to
a broad range of factors, some of which are financial and others of which relate to the technical progress on the
Company’s products and, where applicable, relationship building with technical institutions, projects introduced,
internal innovation etc. The Board has some but not absolute regard to the Company’s result and cash consumption
for the year. It does not utilise earnings per share as a performance measure and does not contemplate consideration
of any dividends in the short to medium term given that all efforts are currently being devoted to obtaining value for
the Company’s assets and building the business to establish self-sustaining revenue streams. For this reason, adverse
movements in the share price do not necessarily reflect the performance of the CEO and that of other employees.
Signed in accordance with a resolution of the Board of Directors.
Iain Kirkwood
Chairman
21 September 2018
28
Bluechiip Limited Annual Report 2018
Corporate Governance
The board of Directors of Bluechiip Limited is responsible for establishing the corporate governance framework of
the Group having regard to the ASX Corporate Governance Council (CGC) published guidelines (3rd edition) as well as
its corporate governance principles and recommendations. The Board guides and monitors the business and affairs of
Bluechiip Limited on behalf of the shareholders by whom they are elected and to whom they are accountable.
An overview of the Company’s corporate governance structures and practices is published on the Company’s website
at www.bluechiip.com/investor/corporate-governance-policies.
The 2017/2018 Corporate Governance Statement is dated as at 21 September 2018 and reflects the corporate
governance practices in place throughout the reporting period. The Corporate Governance Statement was approved
by the Board on 21 September 2018 and can be viewed at
www.bluechiip.com/investor/corporate-governance-policies.
29
Bluechiip Limited Annual Report 2018Consolidated Statement of Financial Position
Note
2018 $
1,172,047
1,115,669
147,583
446,349
2017 $
972,767
803,171
141,023
361,700
2,881,648
2,278,661
27,195
124,224
151,419
3,033,067
643,845
600,000
79,896
1,323,741
79,609
79,609
1,403,350
1,629,717
26,316,085
4,871,034
(29,557,402)
1,629,717
26,540
78,550
105,090
2,383,751
1,066,835
619,469
59,626
1,745,930
40,681
40,681
1,786,611
597,140
22,856,944
4,805,107
(27,064,911)
597,140
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Inventory
Total Current Assets
Non-Current Assets
Term Deposit
Property, plant and equipment
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Interest-bearing loans and borrowings
Employee benefits
Total Current Liabilities
Non-Current Liabilities
Employee benefits
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
11
12
13
14
11
15
16
17
18
18
19
30
Bluechiip Limited Annual Report 2018Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Revenue from operating activities
Cost of sales
Other income
Employee benefits expense
Superannuation
Share based payment expense
Business development
Depreciation costs
Research and Development
Patent costs
Consultancy fees
Travel and accommodation
Occupancy costs
Legal and professional fees
Finance costs
Other expenses
Loss Before Income Tax
Income tax
Net Loss After Income Tax
Other comprehensive income
Note
6
7
23
8 (b)
8 (a)
8 (c)
9
2018 $
561,544
(323,636)
1,023,152
(1,439,055)
(115,869)
(124,137)
(236,719)
(19,185)
(875,146)
(78,568)
(31,314)
(76,914)
(65,945)
(273,152)
(59,393)
(358,154)
2017 $
237,773
(67,201)
779,990
(1,173,209)
(97,520)
(86,748)
(176,274)
(19,358)
(585,001)
(88,375)
(37,091)
(63,520)
(62,253)
(229,408)
(66,666)
(283,772)
(2,492,491)
(2,018,633)
-
-
(2,492,491)
(2,018,633)
-
Total Comprehensive Loss for The Year
(2,492,491)
(2,018,633)
Earnings Per Share
Basic losses per share (cents)
Diluted losses per share (cents)
10
10
(0.64)
(0.64)
(0.73)
(0.73)
31
Bluechiip Limited Annual Report 2018Consolidated Statement of Changes in Equity
At 1 July 2017
Transactions with owners in their
capacity as owners
Shares issued during the year
Transaction costs on share issue
Share-based payment expense
Note
19(a)
19(a)
Comprehensive income
Loss for the year
Other comprehensive income
Total comprehensive loss attributable
to members of the entity
Ordinary
Shares
$
Employee
Equity
Benefits
Reserve
$
Accumulated
Losses
$
22,856,944
4,805,107
(27,064,911)
Total
$
597,140
3,434,488
(58,210)
(33,557)
58,210
3,459,141
-
124,137
65,927
-
-
-
-
3,376,278
(33,557)
182,347
3,525,068
-
-
-
-
-
-
(2,492,491)
(2,492,491)
-
-
(2,492,491)
(2,492,491)
At 30 June 2018
26,316,085
4,871,034
(29,557,402)
1,629,717
At 1 July 2016
Transactions with owners in their
capacity as owners
Shares issued during the year
Transaction costs on share issue
Share-based payment expense
Note
19(a)
19(a)
Comprehensive income
Loss for the year
Other comprehensive income
Total comprehensive loss attributable
to members of the entity
Ordinary
Shares
$
Employee
Equity
Benefits
Reserve
$
Accumulated
Losses
$
Total
$
21,373,748
4,718,359
(25,046,278)
1,045,829
1,555,552
(72,356)
-
1,483,196
-
-
-
-
-
86,748
86,748
-
-
-
-
-
-
-
1,555,552
(72,356)
86,748
1,569,944
(2,018,633)
(2,018,633)
-
-
(2,018,633)
(2,018,633)
At 30 June 2017
22,856,944
4,805,107
(27,064,911)
597,140
32
Bluechiip Limited Annual Report 2018Consolidated Statement of Cash Flows
Cash Flows From Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
R&D tax concession received
Note
2018 $
2017 $
511,650
262,190
(3,730,947)
(2,572,949)
22,648
(54,740)
775,504
5,313
(51,342)
674,677
Net Cash Flows Used in Operating Activities
20
(2,475,885)
(1,682,111)
Cash Flows From Investing Activities
Purchase of property, plant and equipment
Net cash flows used in investing activities
Cash Flow from Financing Activities
Proceeds from issue of ordinary shares
Proceeds from share subscription
Transaction costs on share issue
Transaction costs on borrowings
Placement of term deposit as security for credit facility
Proceeds from borrowings
Repayment of borrowings
Net cash flows from financing activities
Net increase/ (decrease) in cash held
Cash and cash equivalents at beginning of financial year
Cash and Cash Equivalents at End of Financial Year
(45,428)
(45,428)
(4,214)
(4,214)
2,788,019
1,488,296
-
(57,963)
(9,463)
-
600,000
(600,000)
2,720,593
199,280
972,767
1,172,047
646,919
(35,317)
(2,200)
(26,540)
600,000
(500,000)
2,171,158
484,833
487,934
972,767
11
11
33
Bluechiip Limited Annual Report 2018Notes to the Consolidated Financial Statements
Note 1 Corporate Information
(a) Statement of Compliance
The consolidated financial report of Bluechiip Limited
for the year ended 30 June 2018 was authorised for
issue in accordance with a resolution of the Directors
on 20 September 2018.
Bluechiip Limited (the Parent) is a company limited
by shares incorporated in Australia whose shares are
publicly traded on the Australian Stock Exchange.
The nature of the operations and principal activities
of the Group during the year was the development
and commercialisation of a wireless tracking solution
for the healthcare and life science, security, defence
and manufacturing industries which represents a
generational change from current methods such as labels
(hand-written and pre-printed), barcodes (linear and 2D)
and microelectronic integrated circuit (IC)-based RFID
(Radio Frequency Identification).
Note 2 Summary of Significant
Accounting Policies
Basis of Preparation
The consolidated financial statements have been
prepared on the basis of historical cost. Historical cost is
generally based on the fair values of the consideration
given in exchange for goods and services. All amounts
are presented in Australian dollars, unless otherwise
noted.
Going Concern
The financial report has been prepared on a going
concern basis which takes account of the Group’s assets
and liabilities and assumes continuity of normal activities
and the Directors’ assessment included:
• sales revenue anticipated to be generated over the
next twelve months;
• grants from the Australian state and federal
governments, and from overseas sources which the
Group continues to actively pursue;
•
receipts from the Federal R&D tax incentive
programme on the basis that the Group continues to
qualify for these receipts;
• up-front license fees, milestone payments, co-
development or collaboration funding from third
party joint ventures may be generated within the next
twelve months; and
•
the completion of capital raised via a private
placement in September 2018.
These financial statements are general purpose financial
statements which have been prepared in accordance
with the Corporations Act 2001, Accounting Standards
and Interpretations, and comply with other requirements
of the law. The financial statements comprise the
consolidated financial statements of the Group. For
the purposes of preparing the consolidated financial
statements, the Company is a for-profit entity.
Accounting Standards include Australian Accounting
Standards. Compliance with Australian Accounting
Standards ensures that the financial statements and
notes of the Company and the Group comply with
International Financial Reporting Standards (‘IFRS’).
(b) New Accounting Standards and Interpretations
i. Changes in accounting policy and disclosures.
The accounting policies adopted are consistent with
those of the previous financial year, except as follows:
The Group has adopted the following amended
Australian Accounting Standards and AASB
interpretations as at 1 July 2017. The adoption of
these standards did not have a material impact on
the annual consolidated financial statements of the
Group.
• AASB 1057 Application of Australian Accounting
Standards and AASB 2015-9 Amendments to
Australian Accounting Standards – Scope and
Application Paragraphs
• AASB 2014-4 Amendments to Australian
Accounting Standards – Clarification of Acceptable
Methods of Depreciation and Amortisation
• AASB 2015-1 Amendments to Australian
Accounting Standards – Annual Improvements to
Australian Accounting Standards 2012-2014 Cycle
• AASB 2015-2 Amendments to Australian
Accounting Standards – Disclosure Initiative:
Amendments to AASB 101
ii. Accounting Standards and Interpretations issued
but not yet effective.
The Group has not applied the following new
and revised Australian Accounting Standards,
Interpretations and amendments that have been
issued but are not yet effective:
34
Bluechiip Limited Annual Report 2018Standard/Amendment
AASB 9 Financial Instruments
AASB 15 Revenue from Contracts with Customers, 2014-5 Amendments to Australian
Accounting Standards arising from AASB 15, 2015-8 Amendments to Australian
Accounting Standards – Effective date of AASB 15, 2016-3 Amendments to Australian
Accounting Standards – Clarifications to AASB 15
AASB 16 Leases
AASB 2015-10 Amendments to Australian Accounting Standards – Effective Date of
Amendments to AASB 10 and AASB 128
AASB 2016-5 Amendments to Australian Accounting Standards – Classification and
Measurement of Share-based Payment Transactions 1 January 2018
Interpretation 22 Foreign Currency Transactions and Advance Consideration
Effective for Annual Reporting
Periods Beginning on or After
1 January 2018
1 January 2018
1 January 2019
1 January 2018
1 January 2018
1 January 2018
AASB 2016-5
The Directors have considered the effects of the
changes and note that they impact is not considered to
significantly affect the financial statements of Bluechiip.
This is because there are no modifications to existing
share based payments arrangements that would
otherwise be impacted by these amendments as at the
date of this report.
IFRS 9 Financial Instruments
IFRS 9 issued in November 2009 introduced new
requirements for the classification and measurement
of financial assets. IFRS 9 was subsequently amended
in October 2010 to include requirements for the
classification and measurement of financial liabilities and
for derecognition and in November 2013 to include the
new requirements or general hedge accounting. Another
revised version of IFRS 9 was issued in July 2014 mainly
to include a) impairment requirements for financial
assets and b) limited amendments to the classification
and measurement requirements by introducing a ‘fair
value through other comprehensive income’ (FVTOCI)
measurement category for certain simple debt
instruments.
IFRS 9 is expected to change the value of the impairment
losses recognised on accounts receivable from an
incurred to expected loss model. The Company will
assess the impairment loss on accounts receivable at the
time revenue is recognised. While this may likely result in
an increase in the provision for doubtful debts but given
the nature of the accounts receivable, the expected
loss model is not expected to materially change the
impairment allowance for doubtful debts.
IFRS 15 Revenue from Contracts With
Customers
IFRS 15 establishes a single comprehensive model for
entities to use in accounting for revenue arising from
contracts with customers. IFRS 15 will supersede the
current revenue recognition guidance including IAS 18
Revenue, IAS 11 Construction Contracts and the related
Interpretations when it becomes effective.
The core principle of IFRS 15 is that an entity should
recognise revenue to depict the transfer of promised
goods or services to customers in an amount that
reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services.
Specifically, the Standard introduces a 5-step approach
to revenue recognition:
• Step 1: Identify the contract(s) with a customer
• Step 2: Identify the performance obligations in the
contract
• Step 3: Determine the transaction price
• Step 4: Allocate the transaction price to the
performance obligations in the contract
• Step 5: Recognise revenue when (or as) the entity
satisfies a performance obligation
Under IFRS 15, an entity recognises revenue when (or as)
a performance obligation is satisfied, i.e. when ‘control’
of the goods or services underlying the particular
performance obligation is transferred to the customer.
Apart from providing more disclosures on the Group’s
revenue transactions, the directors do not anticipate
that the application of AASB 15 will have a significant
impact on the financial position and/or financial
performance of the Group, particularly as given the key
future revenue stream will be through sale of goods.
35
Bluechiip Limited Annual Report 2018Notes to the Consolidated Financial Statements
The Group has also yet to fully commercialise its
products and generate significant trading losses.
The Directors will re-assess this as the Group starts
generating material revenue streams.
with the investee and has the ability to affect
those returns through its power over the investee.
Specifically, the Group controls an investee if and only
if the Group has:
IFRS 16 Leases
IFRS 16 introduces a comprehensive model for the
identification of lease arrangements and accounting
treatments for both lessors and lessees. IFRS 16 will
supersede the current lease guidance including IAS 17
Leases and the related interpretations when it becomes
effective. IFRS 16 distinguishes leases and service
contracts on the basis of whether an identified asset is
controlled by a customer. Distinctions of operating leases
(off balance sheet) and finance leases (on balance sheet)
are removed for lessee accounting, and is replaced by a
model where a right-of-use asset and a corresponding
liability have to be recognised for all leases by lessees
(i.e. all on balance sheet) except for short-term leases
and leases of low value assets.
The right-of-use asset is initially measured at cost
and subsequently measured at cost (subject to
certain exceptions) less accumulated depreciation and
impairment losses, adjusted for any remeasurement of
the lease liability. The lease liability is initially measured
at the present value of the lease payments that are
not paid at that date. Subsequently, the lease liability
is adjusted for interest and lease payments, as well
as the impact of lease modifications, amongst others.
Furthermore, the classification of cash flows will also be
affected as operating lease payments under IAS 17 are
presented as operating cash flows; whereas under the
IFRS 16 model, the lease payments will be split into a
principal and an interest portion which will be presented
as financing and operating cash flows respectively. In
contrast to lessee accounting, IFRS 16 substantially
carries forward the lessor accounting requirements in
IAS 17, and continues to require a lessor to classify a
lease either as an operating lease or a finance lease.
Furthermore, extensive disclosures are required by
IFRS 16.
The Group has a lease rental related to its office with
remaining 5 months to expiry and an option to renew
for another 12 months. At the date of this report,
management is in the process of quantifying the
expected impact.
(c) Basis of Consolidation
The consolidated financial statements comprise
the financial statements of Bluechiip Limited and its
subsidiaries (the Group) (as outlined in Note 28) as at
and for the year ended 30 June 2018.
Control is achieved when the Group is exposed, or
has rights, to variable returns from its involvement
• Power over the investee (i.e. existing rights that
give it the current ability to direct the relevant
activities of the investee)
• Exposure, or rights, to variable returns from its
involvement with the investee, and
• The ability to use its power over the investee to
affect its returns.
When the Group has less than a majority of the voting
or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing
whether it has power over an investee.
Consolidation of a subsidiary begins when the
Company obtains control over the subsidiary and
ceases when the Company loses control of the
subsidiary. Specifically, income and expenses of a
subsidiary acquired or disposed of during the year
are included in the consolidated statement of profit
or loss and other comprehensive income from the
date the Company gains control until the date when
the Company ceases to control the subsidiary. All
intragroup assets and liabilities, equity, income,
expenses and cash flows relating to transactions
between members of the Group are eliminated in full
on consolidation.
(d) Foreign Currency Translation
i. Functional and presentation currency
Both the functional and presentation currency of
Bluechiip Limited and its subsidiaries are Australian
dollars ($).
ii. Transactions and balances
IIn preparing the financial statements of each
individual group entity, transactions in currencies
other than the entity’s functional currency (foreign
currencies) are recognised at the rates of exchange
prevailing at the dates of the transactions. At the
end of each reporting period, monetary items
denominated in foreign currencies are retranslated
at the rates prevailing at that date. Non-monetary
items that are measured in terms of historical cost
in a foreign currency are not retranslated. Exchange
differences on monetary items are recognised in
profit or loss in the period in which they arise.
(e) Cash and Cash Equivalents (Ref Note 11)
Cash and cash equivalents in the statement of financial
position comprise cash at bank and in hand and short-
term deposits with maturity of three months or less that
are readily convertible to known amounts of cash and
36
Bluechiip Limited Annual Report 2018which are subject to an insignificant risk of changes in
value.
For the purposes of the statement of cash flows,
cash and cash equivalents consist of cash and cash
equivalents as defined above.
(f) Trade and Other Receivables (Ref Notes 12 and 13)
Impairment of Financial Assets
Financial assets are assessed for indicators of
impairment at the end of each reporting period. Financial
assets are considered to be impaired when there is
objective evidence that, as a result of one or more events
that occurred after the initial recognition of the financial
asset, the estimated future cash flows of the asset has
been affected.
For financial assets carried at amortised cost, the
amount of the impairment loss recognised is the
difference between the asset’s carrying amount and the
present value of estimated future cash flows, discounted
at the financial asset’s original effective interest rate.
For financial assets that are carried at cost, the amount
of the impairment loss is measured as the difference
between the asset’s carrying amount and the present
value of the estimated future cash flows discounted at
the current market rate of return for a similar financial
asset.
The carrying amount of the financial asset is reduced
by the impairment loss directly for all financial assets
with the exception of trade receivables, where the
carrying amount is reduced through the use of an
allowance account. When a trade receivable is considered
uncollectible, it is written off against the allowance
account. Subsequent recoveries of amounts previously
written off are credited against the allowance account.
Changes in the carrying amount of the allowance account
are recognised in profit or loss.
Collectability of trade and other receivables is reviewed
on an ongoing basis at an operating unit level. Individual
debts that are known to be uncollectible are written off
when identified. An impairment provision is recognised
when there is objective evidence that the Group will not
be able to collect the receivable. Financial difficulties
of the debtor, default payments or debts more than
90 days overdue are considered objective evidence of
impairment. The amount of the impairment loss is the
receivable carrying amount compared to the present
value of estimated future cash flows, discounted at the
original effective interest rate.
Amounts paid to manufacturer as advances are recorded
as Other Current Assets on the Statement of Financial
Position.
Effective Interest Method
The effective interest method is a method of calculating
the amortised cost of a debt instrument and of allocating
interest income over the relevant period. The effective
interest rate is the rate that exactly discounts estimated
future cash receipts (including all fees on points paid
or received that form an integral part of the effective
interest rate, transaction costs and other premiums
or discounts) through the expected life of the debt
instrument, or (where appropriate) a shorter period, to
the net carrying amount on initial recognition.
Financial Liabilities
Non-derivative financial liabilities (excluding financial
guarantees) are subsequently measured at amortised
cost.
Derecognition
Financial assets are derecognised where the contractual
rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no
longer has any significant continuing involvement in the
risks and benefits associated with the asset. Financial
liabilities are derecognised where the related obligations
are either discharged, cancelled or expired. The
difference between the carrying value of the financial
liability extinguished or transferred to another party
and the fair value of consideration paid, including the
transfer of non-cash assets or liabilities assumed is
recognised in profit or loss.
(g) Inventories (Ref Note 14)
Inventories are stated at the lower of cost and net
realisable value. Costs of inventories are determined on a
first-in-first-out basis. Net realisable value represents the
estimated selling price for inventories less all estimated
costs of completion and costs necessary to make the
sale.
(h) Non-current assets (Ref Note 15)
i. Property, Plant and Equipment
Plant and equipment is stated at historical cost less
accumulated depreciation and any accumulated
impairment losses. Such cost includes the cost of
replacing parts that are eligible for capitalisation
when the cost of replacing the parts is incurred.
Similarly, when each major inspection is performed,
its cost is recognised in the carrying amount of
the plant and equipment as a replacement only if
it is eligible for capitalisation. All other repairs and
maintenance are recognised in the Statement of
Profit or Loss and Other Comprehensive Income as
incurred.
Depreciation is calculated on a diminishing value
method basis over the estimated useful life of the
specific assets as follows:
37
Bluechiip Limited Annual Report 2018
Notes to the Consolidated Financial Statements
Computer & Office Equipment – 10% to 66.67%
Furniture, Fixtures and Fittings – 10% to 20%
Technical Equipment and Tools – 10% to 66.67%
The assets’ residual values, useful lives and
amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end.
(i) Leases
Leases of fixed assets where substantially all the risks
and benefits incidental to the ownership of the asset, but
not the legal ownership that are transferred to entities in
the Group are classified as finance leases.
Finance leases are capitalised by recording an asset and
a liability at the lower of the amounts equal to the fair
value of the leased property or the present value of
the minimum lease payments, including any guaranteed
residual values. Lease payments are allocated between
the reduction of the lease liability and the lease interest
expense for the year. Leased assets are depreciated
on a reducing balance basis over the shorter of their
estimated useful lives where it is likely that the Group will
obtain ownership of the asset or over the term of the
lease.
Operating lease payments are recognised as an
operating expense in the Statement of Profit or Loss and
Other Comprehensive Income on a straight-line basis
over the lease term. Lease payments are apportioned
between finance expenses and reduction of the lease
obligation so as to achieve a constant rate of interest on
the remaining balance of the liability. Finance costs are
recognised immediately in profit or loss. Operating lease
incentives are recognised as a liability when received
and subsequently reduced by allocating lease payments
between rental expense and reduction of the liability.
(j) Impairment of Non-financial Assets
Non-financial assets are tested for impairment whenever
events or changes in circumstances indicate that the
carrying amount may not be recoverable.
Bluechiip Limited conducts an annual internal review of
asset values, which is used as a source of information
to assess for any indicators of impairment. External
factors, such as changes in expected future processes,
technology and economic conditions, are also monitored
to assess for indicators of impairment. If any indication of
impairment exists, an estimate of the asset’s recoverable
amount is calculated.
An impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds its
recoverable amount. Recoverable amount is the higher
of an asset’s fair value less costs of disposal and value
in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there
are separately identifiable cash inflows that are largely
independent of the cash inflows from other assets or
groups of assets (cash-generating units). Non-financial
assets that suffered impairment are tested for possible
reversal of the impairment whenever events or changes
in circumstances indicate that the impairment may have
reversed.
(k) Research and Development Costs
Research and development costs are expensed as
incurred. An intangible asset arising from development
expenditure on an internal project is recognised only
when the Group can demonstrate the technical feasibility
of completing the intangible asset so that it will be
available for use or sale, its intention to complete and
its ability to use or sell the asset, how the asset will
generate future economic benefits, the availability of
resources to complete the development and the ability
to measure reliably the expenditure attributable to the
intangible asset during its development. Following the
initial recognition of the development expenditure, the
cost model is applied requiring the asset to be carried at
cost less any accumulated amortisation and accumulated
impairment losses. No development costs have been
capitalised to date because the Group is unable to
demonstrate that the products will be able to generate
future economic benefits.
(l) Financial Liability (Ref Notes 16 and 17)
Other financial liabilities, including borrowings and
trade and other payables, are initially measured at fair
value, net of transaction costs. Other financial liabilities
are subsequently measured at amortised cost using
the effective interest method, with interest expense
recognised on an effective yield basis. The effective
interest method is a method of calculating the amortised
cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future
cash payments through the expected life of the financial
liability, or (where appropriate) a shorter period, to the
net carrying amount on initial recognition.
Trade and other payables represent liabilities for goods
and services provided to the Group prior to the end of
the financial year that are unpaid and arise when the
Group becomes obliged to make future payments in
respect of the purchase of these goods and services.
The amounts are unsecured and are usually paid between
30 days and 60 days of recognition.
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting
date.
38
Bluechiip Limited Annual Report 2018(m) Provisions
(equity-settled transactions).
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 Group 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 the Statement of Profit or loss and Other
Comprehensive Income net of any reimbursement.
Provisions are measured at the present value of
management’s best estimate of the expenditure required
to settle the present obligation at the reporting date.
The discount rate used to determine the present value
reflects current market assessments of the time value of
money and the risks specific to the liability. The increase
in the provision resulting from the passage of time is
recognised in finance costs.
(n) Employee Benefits (Ref Note 18)
i. Short-term Benefits
Liabilities for wages and salaries, including non-
monetary benefits and certain annual leave
benefits expected to be settled within 12 months
of the reporting date are recognised in respect of
employees’ services up to the reporting date. Annual
leave balances that are expected to be settled after
12 months are measured at present value. They
are measured at the amounts expected to be paid
when the liabilities are settled. Expenses for non-
accumulating sick leave are recognised when the
leave is taken and are measured at the rates paid or
payable.
ii. Long-term benefits
The liability for long service leave and certain annual
leave benefits are recognised and measured as the
present value of expected future payments to be
made in respect of services provided by employees
up to the reporting date. Consideration is given to
expected future wage and salary levels, experience of
employee departures, and years of service. Expected
future payments are discounted at rates using
market yield on high quality Corporate Bonds at the
reporting date.
(o) Share-based Payment Transactions (Ref Note 23)
Equity-settled Transactions
The Group provides benefits to its employees and
Directors (including key management personnel) in the
form of share-based payments, whereby services are
rendered in exchange for shares or rights over shares
There is currently a Performance Rights Plan in place as
part of the LTI, for the issue of share based payments to
staff and KMP as a reward for performance and loyalty.
LTI awards to executives are made under the executive
Performance Rights Plan and are delivered in the form
of performance rights or zero exercise price options.
The performance rights will vest over a period of up to
three years subject to meeting performance measures,
The Company uses a combination of absolute total
shareholder return (TSR) and commercial targets as the
performance measure for the LTI plan.
The cost of these equity-settled transactions with
employees is measured by reference to the fair value
of the equity instruments at the date at which they
are granted. The fair value of the performance rights
granted to executive officers has been calculated based
on the value at the date of grant using a hybrid trinomial
option pricing model which uses a combination of Monte
Carlo Simulation and a trinomial lattice to model the
performance of the Company’s shares and the individual
shares within the selected peer group, taking into
account their individual volatilities and correlations.
In valuing equity-settled transactions, no account is
taken of any vesting conditions, other than (if applicable):
• Non-vesting conditions that do not determine
whether the Group or Company receives the services
that entitle the employees to receive payment in
equity or cash; and
• Conditions that are linked to the price of the shares of
Bluechiip Limited (market conditions).
The cost of equity-settled transactions is recognised,
together with a corresponding increase in equity, over
the period in which the performance and/or service
conditions are fulfilled (the vesting period), ending on
the date on which the relevant employees become fully
entitled to the award (the vesting date).
At each subsequent reporting date until vesting, the
cumulative charge to the Statement of Profit or Loss and
Other Comprehensive Income is the product of:
a. The grant date fair value of the award;
b. The current best estimate of the number of awards
that will vest, taking into account such factors as the
likelihood of employee turnover during the vesting
period and the likelihood of non-market performance
conditions being met; and
c. The expired portion of the vesting period.
The charge to the Statement of Profit or Loss and
Other Comprehensive Income for the year is the
cumulative amount as calculated above less the
amounts already charged in previous years. There is a
corresponding entry to equity.
39
Bluechiip Limited Annual Report 2018Notes to the Consolidated Financial Statements
If a non-vesting condition is within the control of
the Group, Company or employee, the failure to
satisfy the condition is treated as a cancellation. If a
non-vesting condition within the control of neither
the Group, Company nor employee is not satisfied
during the vesting period, any expense for the
award not previously recognised is recognised over
the remaining vesting period, unless the award is
forfeited.
If the terms of an equity-settled award are modified,
as a minimum an expense is recognised as if the
terms had not been modified. An additional expense
is recognised for any modification that increases
the total fair value of the share-based payment
arrangement, or is otherwise beneficial to the
employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated
as if it had vested on the date of cancellation, and
any expense not yet recognised for the award is
recognised immediately. However, if a new award is
substituted for the cancelled award and designated
as a replacement award on the date that it is granted,
the cancelled and new award are treated as if
they were a modification of the original award, as
described in the previous paragraph.
The dilutive effect, if any, of outstanding options
is reflected as additional share dilution in the
computation of diluted earnings per share (see Note 10).
(p) Contributed equity (Ref Note 19)
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax,
from the proceeds.
(q) Revenue recognition (Ref Note 6)
Revenue is recognised and measured at the fair value of
the consideration received or receivable to the extent
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:
i. Sales Revenue
• the Group retains neither continuing managerial
involvement to the degree usually associated with
ownership nor effective control over the goods
sold;
• the amount of revenue can be measured reliably;
•
it is probable that the economic benefits
associated with the transaction will flow to the
Group; and
• the costs incurred or to be incurred in respect of
the transaction can be measured reliably.
Rendering of Services
Revenue from a contract to provide services is
recognised by reference to the stage of completion
of the contract. The stage of completion of the
contract is determined as follows:
• stage of completion of labour hours (time)
incurred to date as a percentage of total labour
hours (total time) that has elapsed during the
reporting period;
• revenue from time and material contracts is
recognised at the contractual rates as labour
hours; and
• direct expenses are incurred.
License income
License income is recognised depending on the
substance of the underlying agreement. Depending
on the terms of agreement, licence income is either
recognised immediately if the substance is a sale or
over the life of the agreement to the extent there are
service conditions attached.
ii. Interest Revenue
Revenue is recognised as interest accrues using
the effective interest method. This is a method of
calculating the amortised cost of a financial asset
and allocating the interest income over the relevant
year using the effective interest rate, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the
net carrying amount of the financial asset. All revenue
is stated net of the amount of goods and services tax
(GST).
Sales revenue comprises revenue earned (net of
returns, discounts and allowances) from the provision
of services and products to purchasers external to
the Group.
(r) Income Tax and Other Taxes (Ref Note 9)
No taxation has been provided for and no deferred tax
assets have been recognised in view of losses incurred.
Sales of Goods
Revenue from the sale of goods is recognised when
the goods are delivered and titles have passed, at
which time all the following conditions are satisfied:
• the Group has transferred to the buyer the
significant risks and rewards of ownership of the
goods;
Deferred tax assets are only brought to account where it
is probable that future tax profits will be available against
which deductible temporary differences can be utilised. In
view of the Group just commenced generating revenues,
deferred tax assets are not recognised in respect of the
assessed and estimated tax losses to be carried forward
on the basis that recoupment is not probable at 30 June
2017.
40
Bluechiip Limited Annual Report 2018Current tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the
taxation authorities based on the current year’s taxable
income. The tax rates and tax laws used to compute
the amount are those that are enacted or substantively
enacted at the reporting date. Unrecognised deferred
income tax assets are reassessed at each reporting date
and are recognised to the extent that it has become
probable that future taxable profit will allow the deferred
tax asset to be recovered.
Deferred income tax assets and liabilities are measured
at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date. Deferred
tax assets and deferred tax liabilities are offset only if
a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax
assets and liabilities relate to the same taxable entity and
the same taxation authority.
Other Taxes
Revenues, expenses and assets are recognised net of the
amount of GST except:
• When the GST incurred on a purchase of goods
and services is not recoverable from the taxation
authority, in which case the GST is recognised as part
of the cost of acquisition of the asset or as part of
the expense item as applicable; and
• Trade receivables and other payables, which are
stated with the amount of GST included.
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables
or payables in the statement of financial position. Cash
flows are included in the statement of cash flows on
a gross basis and the GST component of cash flows
arising from investing and financing activities, which is
recoverable from, or payable to, the taxation authority is
classified as part of operating cash flows.
Commitments and contingencies are disclosed net of
the amount of GST recoverable from, or payable to, the
taxation authority.
(s) Government Grants (Ref Note 7)
Government grants are recognised in the Statement of
Profit or Loss and Other Comprehensive Income as other
income when the grant is receivable.
The R&D tax offset is brought to account only when the
amount receivable has been quantified, based on eligible
development spend and supported by appropriate claim
documentation.
(t) Earnings per share (Ref Note 10)
Basic earnings per share is calculated as net profit/
(loss) attributable to members of the parent, adjusted
to exclude any costs of servicing equity, divided by the
weighted average number of ordinary shares.
Diluted earnings per share is calculated as net profit/
(loss) attributable to members of the parent, adjusted
for:
• Costs of servicing equity; and
• Other non-discretionary changes in revenues or
expenses during the year that would result from the
dilution of potential ordinary shares, divided by the
weighted average number of ordinary shares and
dilutive potential ordinary shares, adjusted for any
bonus element.
As the Group incurred a loss during the year, the impact
of options and performance rights was anti-dilutive and
as such, basic and diluted EPS are the same amount.
(u) Financial Instruments
Initial Recognition and Measurement
Financial assets and financial liabilities are recognised
when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is
the equivalent to 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 are initially measured at fair value.
After initial recognition these instruments are measured
as set out below.
Classification and Subsequent Measurement
Financial instruments are subsequently measured at
amortised cost using the effective interest rate method,
or cost. Fair value is the price that would be received
to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the
measurement date. The fair value measurement is based
on the presumption that the transaction to sell the asset
or transfer the liability takes place either:
•
•
In the principal market for the asset or liability, or
In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must be
accessible to by the Group.
Amortised cost is calculated as:
a. the amount at which the financial asset or financial
liability is measured at initial recognition;
b. less principal repayments;
c. plus or minus the cumulative amortisation of the
difference, if any, between the amount initially
recognised and the maturity amount calculated using
the effective interest method; and
d. less any reduction for impairment.
41
Bluechiip Limited Annual Report 2018Notes to the Consolidated Financial Statements
The effective interest method is used to allocate interest income or interest expense over the relevant year and is
equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction
costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the
contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential
recognition of an income or expense in profit or loss.
Loans and Receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an
active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the
effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate,
except for short-term receivables when the effect of discounting is immaterial. Loan and receivables relate largely to
a R&D tax incentive and a term deposit.
Held to maturity
Term deposits with fixed or determinable payments and fixed maturity dates that the Group has the positive intent
and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are
measured at amortised cost using the effective interest method less any impairment.
Available-for-sale financial assets are included in non-current assets.
(v) Comparative Figures
When required by Accounting Standards, comparative figures will be adjusted to conform to changes in presentation.
No comparative adjustment has occured in the current year.
Note 3 Financial Risk Management Objectives and Policies
The Group’s financial instruments consist mainly of deposits with banks, accounts receivable, accounts payable and
interest-bearing liabilities.
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the
accounting policies to these financial statements, are as follows:
Financial Assets
Cash and cash equivalents
Term deposit
Trade and other receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Interest-bearing liabilities
Total Financial Liabilities
Note
2018 $
2017 $
11
11
12
16
17
1,172,047
27,195
1,115,669
2,314,911
643,845
600,000
1,243,845
972,767
26,540
803,171
1,802,478
1,066,835
619,469
1,686,304
Financial Risk Management Policies
The Directors’ overall risk management strategy seeks to assist the Company in meeting its financial targets, whilst
minimising potential adverse effects on financial performance. Risk management policies are approved and reviewed
by the Board on a regular basis.
42
Bluechiip Limited Annual Report 2018Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk
relating to interest rate risk. The Group is also exposed to a certain degree of foreign currency risk as some of its
transactions with suppliers and customers are denominated in foreign currencies.
(a) Credit Risk
Credit risk is minimised through investing surplus funds in financial institutions that maintain a high credit rating.
Credit risk is in relation to receivables held as at year end.
Credit Risk Exposures
The maximum exposure to credit risk by class of recognised financial assets at balance date, excluding the value of
any collateral or other security held, is equivalent to the carrying value and classification of those financial assets (net
of any provisions) as presented in the statement of financial position. There were no guarantees given at the balance
date.
Trade and other receivables that are neither past due or impaired are of high credit quality. Aggregates of such
amounts are as detailed at Note 12.
Credit risk related to balances with banks and other financial institutions is managed by management in accordance
with the approved Board policy.
(b) Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities. The Group manages risk through the following mechanisms:
• preparing forward looking cash flow analysis in relation to its operational, investing and financial activities;
• managing credit risk related to financial assets;
• only investing surplus cash with major financial institutions; and
• comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
43
Bluechiip Limited Annual Report 2018Notes to the Consolidated Financial Statements
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Bluechiip Limited Annual Report 2018
(c) Market Risk
i.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because
of changes in market interest rates.
Borrowings (see Note 17) are negotiated at fixed rates
to assist in managing the risk and that in determining
the interest rates, reference is made to bank lending or
borrowing rates at the time the loan is entered into.
ii. Sensitivity Analysis
The following table illustrates sensitivities to the Group’s
exposures to changes in interest rates. The table
indicates the impact on how profit and equity values
reported at balance date would have been affected by
changes in the relevant risk variable that management
considers to be reasonably possible. These sensitivities
assume that the movement in a particular variable is
independent of other variables.
Profit $
Equity $
Year Ended 30 June 2018
+1% in interest rates
-1% in interest rates
Year Ended 30 June 2017
+1% in interest rates
-1% in interest rates
11,992
(11,992)
9,993
(9,993)
-
-
-
-
Note 4 Significant Accounting
judgements, Estimates and
Assumptions
The preparation of the financial statements requires
the Directors to evaluate estimates and judgments
incorporated into the financial statements based
on historical knowledge and best available current
information. Estimates assume a reasonable expectation
of future events and are based on current trends and
economic data, obtained both externally and within
the Group. Further details of the nature of these
assumptions and conditions may be found in the relevant
notes to the financial statements.
Inventory
Management has to exercise significant judgement in
estimating the net realisable value of inventory which
includes estimating future sales quantities and selling
prices. These estimates are based on the current contracts
in place by the Company and given the application of the
technology is deemed reasonable. Management assess the
classification of inventory based on forward sales growth
and expect to realise the inventory in the next twelve
months.
Income from R&D Tax Incentive
In computing the income from R&D tax incentive
receivable, the Company has used some judgment
to decide on the basis of deriving at the eligible and
qualifying R&D expenditure.
Note 5 Operating Segments
The Group has identified its operating segments based
on the internal reports that are reviewed and used by the
CEO and Managing Director (the chief operating decision
maker or CODM) in assessing performance and in
determining the allocation of resources. The CODM only
reviews consolidated financial information and as such,
it has been determined that there is only one segment
at the present time. Furthermore, the Group’s business
activities are not organised on the basis of differences
in related products and services or differences in
geographical areas of operations. Given the Group’s
stage of development, the Directors consider this to be
appropriate.
Note 6 Revenue from Operating
Activities
Less Trade discount
(25,258)
(19,421)
Revenue From Operating
Activities
561,544
237,773
Note 7 Other Income
Other Revenue
Interest income
2018 $
2017 $
22,648
5,313
R&D tax incentive/concession
1,000,504
774,677
Total Other Income
1,023,152
779,990
45
The above sensitivities calculation assumption is based on cash and cash equivalent
and financial assets reported at balance date. Interest on borrowings are fixed.
Sale of product
Licence income
Gross Revenue From Sale of
Product and Licence income
2018 $
2017 $
433,795
153,007
586,802
140,439
116,755
257,194
Bluechiip Limited Annual Report 2018
Notes to the Consolidated Financial Statements
Note 8 Expenses
a) Finance Costs
Interest expense
Debt establishment fee (refer Note 17 for further detail)
Quarterly service fee for R&D Advance Facility
Total Finance Costs
(b) Depreciation
Depreciation of property, plant and equipment
(c) Other Expenses
Share registry, administration and secretarial
Insurance
Advertising and Branding
Conference and seminar
Telecommunications
Membership and subscriptions
Others
Total Other Expenses
Note 9 Income Tax Expense
2018 $
2017 $
50,030
9,363
-
59.393
19,185
19,185
68,383
44,402
110,979
2,754
17,362
8,100
106,174
358,154
52,666
12,000
2,000
66,666
19,358
19,358
66,902
37,974
80,380
-
17,356
3,729
77,431
283,772
No taxation has been provided in view of the losses incurred for the year (2017: Nil). Tax losses for the 2018 financial
year are $998,568 (2017:$976,685). The amount available of carried forward tax losses for offset against future
taxable income is $12,361,121 (2017:$11,367,180). The deferred tax asset of $3,684,761 (2017: $3,410,155) associated
with carried forward tax losses as well as deferred tax assets arising from temporary differences of $147,874
(2017:$135,872) have not been recorded on the basis that its recovery is not probable at this time. There are no
deferred tax liabilities arising from temporary differences on assets.
The prima facie tax on the loss from ordinary activities is reconciled to the income tax credit shown in the Statement
of Profit or Loss and Other Comprehensive Income as follows:
Prima facie tax on loss from ordinary activities before
income tax at 27.5% (2017: 30%)
Consolidated entity
Add/(Deduct): Tax Effect of
Non-deductible expenses
Research and development tax effect
Deferred tax assets arising not brought to account as at balance
sheet date because realisation is not considered probable
2018 $
2017 $
(685,435)
(685,435)
(605,590)
(605,590)
19,709
371,890
293,836
19,960
302,989
282,641
Income Tax Credit Attributable to the Consolidated Entity
-
-
46
Bluechiip Limited Annual Report 2018
Note 10 Earnings Per Share
Earnings/(loss) used to calculate basic and dilutive EPS
For Basic and Diluted EPS Tax Effect of
2018 $
(2,492,491)
2017 $
(2,018,633)
Weighted average number of ordinary shares outstanding during the year –
No. used in calculating basic EPS
386,632,392
276,627,524
As the Group incurred a loss during the year, the impact of performance rights were anti-dilutive and as such, basic and diluted EPS are the same amount.
Note 11 Cash and Cash Equivalents and Term Deposit
Current Assets – Cash and Cash Equivalents
Cash at banka
Non-current Assets
Term Depositb
2018 $
2017 $
1,172,047
972,767
27,195
26,540
a Cash at bank at end of previous financial year includes application money held in trust which relates to subscription money from the Rights Issue and Placement launched
in June 2017 pending completion and new ordinary shares in the Company to be issued. Please refer to Note 16 for further details.
b Term Deposit with a bank held as security for a credit card facility.
Note 12 Current Assets – Trade and Other Receivables
Current Assets – Cash and Cash Equivalents
Trade receivables
R&D tax off-set receivable
The ageing analysis of trade receivables is a
0-30 days
31-60 days
61-90 days (past due not impaired)
91+ days (past due not impaired)
Total Trade and Other Receivables
2018 $
2017 $
115,669
1,000,000
1,115,669
114,882
-
-
787
115,669
28,171
775,000
803,171
23,853
589
-
3,729
28,171
* Debts over 90 days are individually assessed for impairment. As at the date of this report, the Group deems these individually recoverable.
47
Bluechiip Limited Annual Report 2018Notes to the Consolidated Financial Statements
Note 13 Other Current Assets
Prepayment
Deposita
2018 $
30,933
116,650
147,583
a The deposit represents the balance of a supplier payment for the purchase of raw materials to manufacture the Company’s Matchbox™ readers.
Note 14 Inventory
Raw materials
Finished goods
Provision of net realisable value - Finished Goods
Total Inventory
2018 $
286,218
221,722
(61,591)
446,349
Note 15 Non-current Assets - Property, Plant and Equipment
Technical equipment and tools at cost
Accumulated depreciation
Total technical equipment and tools
Furniture, fixtures and fittings at cost
Accumulated depreciation
Total Furniture, Fixtures and Fittings
Computer and office equipment at cost
Accumulated depreciation
Total Computer and Office Equipment
2018 $
290,574
(184,001)
106,573
18,876
(13,104)
5,772
119,064
(107,185)
11,879
2017 $
24,373
116,650
141,023
2017 $
235,278
188,013
(61,591)
361,700
2017 $
235,060
(170,658)
64,402
18,876
(12,090)
6,786
109,719
(102,357)
7,362
Total Property, Plant and Equipment
124,224
78,550
(a) Movements in Carrying Amounts
Movement in the carrying amount for each class of property, plant and equipment between the beginning and the end
of the current financial year:
48
Bluechiip Limited Annual Report 2018Total
$
78,550
64,859
(19,185)
124,224
Total
$
88,149
9,759
(19,358)
78,550
2017 $
368,131
51,785
-
646,919
Consolidated
Balance at 30 June 2018
Balance at the beginning of year
Additions
Depreciation
Carrying Amount at End 30 June 2018
Consolidated
Balance at 30 June 2017
Balance at the beginning of year
Additions
Depreciation
Carrying Amount at End 30 June 2017
Technical
Equipment and
Tools
$
Furniture,
Fixtures and
Fittings
$
Computer
and Office
Equipment
$
64,402
55,514
(13,343)
106,573
6,786
-
(1,014)
5,772
7,362
9,345
(4,828)
11,879
Technical
Equipment and
Tools
$
Furniture,
Fixtures and
Fittings
$
Computer
and Office
Equipment
$
72,493
6,000
(14,091)
64,402
7,087
720
(1,021)
6,786
8,569
3,039
(4,246)
7,362
Note 16 Current Liabilities – Trade and Other Payables
Trade payables (a)
Sundry payables and accrued expenses
Unearned income (b)
Application money held in trust (c)
Total Current Liabilities
2018 $
546,832
62,222
34,791
-
643,845
1,066,835
a The trade payables as at 30 June 2018 includes directors’ fee owing of $9,750 (2017: $7,833).
b The unearned income relates to money received from customers for licence income to be recognised in the following month and delivery of products not fulfilled at end
of financial year.
c The application money held in trust relates to subscription money received from shareholders and investors for the Rights Issue and Placement launched in June 2017
which were subsequently completed with new ordinary shares in the Company issued.
Note 17 Interest-bearing Loans and Borrowings
Current
R&D Tax Prepayment Loana
Directors and Officers premium funding
Total Interest-bearing Liabilities
2018 $
2017 $
600,000
-
600,000
600,000
19,469
619,469
Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value.
a Relates to a R&D Advance Facility from R&D Capital Partners Pty Ltd (R&D Capital) secured by R&D tax incentive 2017/2018 to be received. In prior financial year, similar
facility was obtained with R&D Capital of $600,000 (2016/2017 Advance). The 2016/2017 Advance was secured and fully settled during the current financial year by the
R&D tax incentive 2016/2017. An establishment fee of $7,500 was incurred for the R&D Advance Facility during the financial year (2017: Nil). An interest rate of 15%
(2017:15%) per annum is calculated and payable monthly on the drawn down amount of the R&D Advance Facility.
49
Bluechiip Limited Annual Report 2018Notes to the Consolidated Financial Statements
Note 18 Employee Benefits
Current Employee Benefits
Annual Leave provision
Non Current Employee Benefits
Long Service Leave provision
Total Provisions
2018 $
2017 $
79,896
59,626
79,609
159,505
40,681
100,307
Refer to Note 2(n) for the relevant accounting policy and a discussion of the significant estimations and assumptions applied in the measurement of this provision.
Note 19 Issued Capital
397,033,377 (2017: 271,810,092) Ordinary shares
Less: Capitalised share issue costs
A Ordinary Shares
At the beginning of the reporting year
Issue of ordinary shares
Less: Capitalised share issue costs
2018 $
27,902,682
(1,586,597)
2017 $
24,409,984
(1,553,040)
26,316,085
22,856,944
22,856,944
3,492,698
(33,557)
21,373,748
1,555,552
(72,356)
26,316,085
22,856,944
Shares issued during the year were in relation to the following:
-25,693,407 shares issued ($719,415) pursuant to 2017 Rights Issue entitlement
-88,018,307 shares ($2,464,513) issued pursuant to shortfall shares placed with professional and sophisticated investors pursuant to 2017 Shortfall Placement
-20,000 shares ($560) issued as commission in connection with the 2017 Rights Issue.
-8,928,571 shares ($250,000) issued to a non executive director as part of the shortfall shares subscribed in the 2017 Rights Issue pursuant to shareholders approval at the
2017 AGM
-1,375,000 shares issued to CEO, Andrew McLellan pursuant to exercise of CS Rights Tranche 1 Performance Rights 2015 and Tranche 1 Performance Rights 2016.
-1,188,000 shares issued to eligible employees upon exercise of the Tranche 1 Performance Rights 2016.
B Ordinary Shares
At the beginning of the reporting year
Shares issued during the year:
Issue of ordinary shares
2018 No.
2017 No.
271,810,092
201,377,647
125,223,285
70,432,445
Total Issued and Fully Paid Ordinary Shares
397,033,377
271,810,092
Ordinary shares have no par value. There is no limit to the authorised share capital of the Company.
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.
At the shareholders meetings, each ordinary share is entitled to one vote when a poll is called; otherwise each shareholder has one vote on a show of hands.
At 30 June 2018, there were no options outstanding (2017: Nil).
A total 3,000,000 (2017:3,000,000) and 4,000,000 (2017:4,000,000) performance rights were granted in July 2017 to Andrew McLellan and employees respectively as part of
the Variable Compensation – LTI which entitle both Andrew McLellan and the employees to acquire one fully paid share in the Company for a nil exercise price (Performance
Rights). Further details of the performance rights and the terms are set out in the Variable Compensation – Long-term Incentive section of the remuneration report.
50
Bluechiip Limited Annual Report 2018
(c) Capital Management
Management controls the capital of the Group in order to ensure that the Company can fund its operations and
continue as a going concern. The Group’s debt and capital includes share capital and financial liabilities, supported by
financial assets. There is no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Company’s financial risk and adjusting its
capital structure in response to changes in these risks and in the market. There have been no changes in the strategy
adopted by management.
Note 20 Cash Flow Statement Reconciliation
Reconciliation of Net Loss after Tax to Net Cash Flows used in operating activities
Net loss
Non-cash Flows in Loss
Depreciation
Share based payment expense
Shares issue in lieu of cash bonus payment to employees
Shares issue in lieu of payment to supplier
Changes in Assets and Liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other assets
(Increase)/decrease in inventory
(Decrease)/increase in trade, other payables and deferred revenue
(Decrease)/increase in employee benefits
Note 21 Related Party Disclosures
(a) Key Management Personnel (KMP)
2018 $
2017 $
(2,492,491)
(2,018,633)
19,185
124,137
-
-
(312,498)
(6,561)
(84,649)
217,794
59,198
19,358
86,748
49,900
12,106
(77,407)
32,530
20,211
166,315
26,761
(2,475,885)
(1,682,111)
Details relating to KMP, including remuneration paid, shares issued and performance rights issued, are included in
Note 22 and the Remuneration Report.
(b) Transactions With Related Parties
Other than shares and performance rights issued to Directors and KMP of the Company disclosed in the Remuneration
Report, there were no other transactions with related parties during the year.
Note 22 Key Management Personnel
Compensation for key management personnel
The total remuneration provided and /or paid to key management personnel of the Group during the year are as
follows (refer to table in Remuneration Report for further detail):
51
Bluechiip Limited Annual Report 2018Notes to the Consolidated Financial Statements
Short-term employee benefits#
Post-employment benefits
Long-term employee benefits
Share-based payments
2018 $
513,931
31,485
9,747
56,357
611,520
2017 $
392,534
30,106
4,084
86,855
513,579
# The short-term employee benefits paid include Non-Executive Directors fees paid amounting to $190,000 (2017: $110,000)
Note 23 Share-based Payment Plans
Expenses Arising From Share-based Payment Transactions
The performance rights expense under the Performance Rights Plan 2017 has been determined based on the fair
values of the performance rights granted to Directors and officers calculated at grant date using a hybrid trinomial
option pricing model with a relative TSR hurdle. The hybrid trinomial option pricing model with TSR hurdle uses a
combination of Monte Carlo Simulation and a trinomial lattice to model the performance of the Company’s shares and
the individual shares within the selected peer group, taking into account their individual volatilities and correlations.
Performance Rights Plan Expense During the Year
Performance Rights Plan 2015
Performance Rights Plan 2016
Performance Rights Plan 2017
Fair Value of Performance Rights
2018 $
2017 $
5,795
40,555
77,787
124,137
18,370
68,378
-
86,748
The fair value of the performance rights granted to the CEO in the table below has been calculated at grant date using
the hybrid trinomial option pricing model with TSR hurdle. The model uses a combination of Monte Carlo Simulation
and a trinomial lattice to model the performance of the Company’s shares and the individual shares within the selected
peer group, taking into account their individual volatilities and correlations.
52
Bluechiip Limited Annual Report 20182018
During the financial year, the following performance rights were granted to the CEO, Andrew McLellan and employees
of the Company:
Number and Recipient
of Performance
Rights
3,000,000 to Andrew
McLellan comprising
Grant
Date
Vesting /
Expiry date
Fair Value Per
Performance
Right
Exercise
Price
Price of
Shares on
Grant Date
Risk Free
interest
Rate
Estimated
Volatility
Tranche 1
-1,000,000
Tranche 2
-1,000,000
Tranche 3
-1,000,000
1 July 2017
1 July 2017
30 Aug 2018/
30 Jun 2020
30 Aug 2019/
31 Dec 2021
$0.0186
$0.0207
Nil
Nil
$0.028
1.53%
90%
$0.028
1.66%
90%
1 July 2017 30 Aug 2020/
$0.0245
Nil
$0.028
1.86%
90%
31 Dec 2022
4,000,000 to
employees comprising
Tranche 1
-1,333,333
Tranche 2
-1,333,333
Tranche 3
-1,333,333
1 July 2017
1 July 2017
30 Aug 2018/
30 Jun 2020
30 Aug 2019/
31 Dec 2021
$0.0189
$0.0218
Nil
Nil
$0.028
1.57%
90%
$0.028
1.73%
90%
1 July 2017 30 Aug 2020/
$0.0230
Nil
$0.028
1.94%
90%
31 Dec 2022
Other than the Performance Rights granted to the CEO, Andrew McLellan and employees as set out above, no options were issued to Directors or other KMP during the
financial year ended 30 June 2018.
2017
During the financial year ended 30 June 2017, the following performance rights were granted to the CEO, Andrew
McLellan and employees of the Company:
Number and Recipient
of Performance
Rights
3,000,000 to Andrew
McLellan comprising
Grant
Date
Vesting /
Expiry date
Fair Value Per
Performance
Right
Exercise
Price
Price of
Shares on
Grant Date
Risk Free
interest
Rate
Estimated
Volatility
Tranche 1
-1,000,000
Tranche 2
-1,000,000
Tranche 3
-1,000,000
1 July 2016 30 Aug 2017/
$0.0168
31 Dec 2017
1 July 2016 30 Aug 2018/
$0.0168
31 Dec 2018
Nil
Nil
$0.022
1.49%
100%
$0.022
1.46%
100%
1 July 2016 30 Aug 2019/
$0.0168
Nil
$0.022
1.51%
100%
31 Dec 2019
4,000,000 to
employees comprising
Tranche 1
-1,333,333
Tranche 2
-1,333,333
Tranche 3
-1,333,333
1 July 2016 30 Aug 2017/
$0.0168
31 Dec 2017
1 July 2016 30 Aug 2018/
$0.01 86
31 Dec 2018
Nil
Nil
$0.022
1.49%
100%
$0.022
1.46%
100%
1 July 2016 30 Aug 2019/
$0.0201
Nil
$0.022
1.51%
100%
31 Dec 2019
Other than the Performance Rights granted to the CEO, Andrew McLellan and employees as set out above, no options were issued to Directors or other KMP during the
financial year ended 30 June 2017.
53
Bluechiip Limited Annual Report 2018Notes to the Consolidated Financial Statements
Note 24 Commitments
(a) Operating Lease Commitments
Non-cancellable operating leases contracted for:
Payable - minimum lease payments: not later than 12 months
The above lease commitments are in respect of office premises rental.
(b) Contractual Commitments
2018 $
2017 $
36,050
36,050
35,000
35,000
Subsequent to 30 June 2018, the Company has purchase orders made in 2014 with a foreign supplier which remains
unfulfilled with purchase cost totalling $260,348 (USD192,423) (2016: $249,926 or USD192,243) for the development
and production of chips.
Note 25 Contingencies
The Company has no contingent liabilities or contingent assets as at 30 June 2018 (2017:Nil).
Note 26 Events After the Balance Sheet Date
On 29 August 2018, the Company announced that it had entered into a development and supply agreement with
Labcon North America (Labcon) for a three (3) year term to supply chips, readers, software and engineering services
worth USD11.9m ($15.9m). The agreement provides for Bluechiip to meet the orders from Labcon effective 24 August
2018 in the following manner:
a. supply of chips, readers, software and engineering services worth USD4.2m ($5.8m) over a two (2) year period;
b. supply of products and services with a minimum order of USD7.4m ($10.1m) in the third year following the two (2)
year period; and
c. extend a further two (2) years of development and supply contracts to a fourth and fifth year with minimum
orders to be determined.
On 10 September 2018, the Company announced the successful placement of approximately 93 million new ordinary
shares in Bluechiip to sophisticated and professional investors at an issue price of $0.059 per new ordinary share in
Bluechiip raising $5.5 million before costs (Placement). In conjunction with the Placement, the Company announced a
Share Purchase Plan (2018 SPP) for all its existing shareholders at the same price of $0.059 per new share.
Subsequently, on 14 September 2018, the Company announced the completion of the Placement with $5.5 million net
proceeds fully received. As at the date of this report, the 2018 SPP remains open for application until its expected
closing date on 28 September 2018.
Except for the above, there were no other matters or circumstances that have arisen since the end of the financial
year which significantly affected or could significantly affect the operations of the Group, the results of these
operations or the state of affairs of the Group in future financial years.
54
Bluechiip Limited Annual Report 2018Note 27 Auditor’s Remuneration
The Auditor of Bluechiip Limited is Deloitte Touche Tohmatsu
2018 $
2017 $
Audit or review of the financial report
60,000
60,000
Other audit review services
2,500
2,500
Tax compliance services
Note 28 Controlled Entities
Parent Entity
Bluechiip Limited
Subsidiaries of Parent Entity
Bluechiip, Inc.a
Bluechiip Holdings, Inc. a
6,650
69,150
8,750
71,250
Country of
Incorporation
Percentage Owned
(%)*
2018
Percentage Owned
(%)*
2017
Australia
United States
United States
100%
100%
100%
100%
* Percentage of voting power is in proportion to ownership
a These companies (which are dormant) are in the process of dissolution as the Directors opine that the subsidiaries are not required at this moment.
Note 29 Parent Entity Information
Information Relating to Bluechiip Limited
Current assets
Total Assets
Current liabilities
Total Liabilities
Issued capital
Reserves
Accumulated losses
Total shareholder’s equity
Loss of the Parent Entity
Total Comprehensive Loss of the Parent Entity
2018 $
2017 $
2,881,648
3,033,067
1,323,741
1,403,350
26,316,085
4,871,034
2,278,661
2,383,751
1,745,930
1,786,611
22,856,944
4,805,107
(29,557,402)
(27,064,911)
1,629,717
(2,492,491)
(2,492,491)
597,140
(2,018,633)
(2,018,633)
55
Bluechiip Limited Annual Report 2018Directors’ Declaration
In accordance with a resolution of the Directors of Bluechiip Limited, I state that:
1.
In the opinion of the Directors:
a The financial statements and notes of Bluechiip Limited for the financial year ended 30 June 2018 are in
accordance with the Corporations Act 2001, including:
i. Giving a true and fair view of its financial position as at 30 June 2018 and performance for the period
ended on that date
ii. Complying with Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001
b The financial statements and notes also comply with International Financial Reporting Standards as disclosed in
Note 2(a)
c There are reasonable grounds to believe that the Group will be able to pay its debts as and when they become
due and payable as disclosed in Note 2
2. This declaration has been made after receiving declarations required to be made to the Directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
On behalf of the Board.
Iain Kirkwood
Chairman
21 September 2018
56
Bluechiip Limited Annual Report 2018Independent Auditors Report
Deloitte Touche Tohmatsu
ABN 74 490 121 060
550 Bourke Street
Melbourne VIC 3000
GPO Box 78
Melbourne VIC 3001 Australia
Tel: +61 3 9671 7000
Fax: +61 3 9671 7001
www.deloitte.com.au
Independent Auditor’s Report to the members of Bluechiip Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Bluechiip Limited (the “Company”) and its subsidiaries (the
“Group”), which comprises the consolidated statement of financial position as at 30 June 2018, 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:
(i)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2018 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 are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the directors of the Company, would be in the same terms if given to the directors as
at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report for the current period. These matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited.
57
Bluechiip Limited Annual Report 2018
Independent Auditors Report
Key Audit Matters
Key Audit Matter
How the scope of our audit responded to
the Key Audit Matter
Net realisable value of inventory
is
The Group
the process of
in
commercialising its products. Inventory
held by the Group is sold sporadically
during the process of exploring and
negotiating
commercial
new
partnerships.
Management has to exercise significant
judgement
the net
in estimating
inventory which
realisable value of
includes
sales
quantities and selling prices.
estimating
future
Our procedures included, but were not limited
to:
Obtaining
an
including
inventory,
understanding
of
management’s process for recording and
managing
the
process to forecast future inventory
sales projections as well as identify and
monitor inventory selling below cost
price;
Inquiring of management to understand
if there have been any changes in the
use or sales patterns of current
inventory items including understanding
and
of
management’s forecasted future sales
quantities and selling prices based on
existing and prospective partnership
discussions;
challenging
basis
the
recent
Selecting inventory items on a sample
basis, and viewing
sales,
including subsequent to 30 June 2018,
to determine whether the sales value of
these items exceeded their carrying
value;
Assessing
of
management’s inventory net realisable
provision based on inventory items
currently being sold below cost price;
and
adequacy
the
Assessing the appropriateness of the
disclosures in Note 14 to the financial
statements.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2018, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
58
Bluechiip Limited Annual Report 2018
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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as
intentional omissions,
involve collusion,
fraud may
misrepresentations, or the override of internal control.
forgery,
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial report.
We are responsible for the direction, supervision and performance of the Group’s audit. We
remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
59
Bluechiip Limited Annual Report 2018
Independent Auditors Report
Auditor’s Responsibilities for the Audit of the Financial Report (continued)
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 27 of the Directors’ Report for
the year ended 30 June 2018.
In our opinion, the Remuneration Report of Bluechiip Limited, for the year ended 30 June 2018,
complies with section 300A of the Corporations Act 2001.
Responsibilities
Report to be added at the end
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.
Check pages carefully
DELOITTE TOUCHE TOHMATSU
Anneke Du Toit
Partner
Chartered Accountants
Melbourne, 21 September 2018
60
Bluechiip Limited Annual Report 2018
Additional ASX Information
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as
follows. The information is current as at 17 September 2018.
a. Distribution of equity securities
(i) Ordinary shares
490,253,716 (17 August 2017: 385,541,806) fully paid ordinary shares are held by 914 (17 August 2017: 723)
individual shareholders.
All issued ordinary shares carry one vote per share and carry the rights to dividends.
(ii) Unlisted options
Nil (August 2017: Nil) options held by individual option holders.
The number of shareholders, by size of holding, in each class are
Shareholders
Number of Fully Paid
Ordinary Shares
% of Issued
Share Capital
Investor Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Holding less than a marketable parcel
b. Substantial shareholders
44
24
118
396
332
914
94
Bellwether Super Pty Ltd
Edward St Consulting Pty Ltd; Iain Kirkwood
Pulitano Family Superannuation Pty Ltd and; 3rd Pulitano Pty Ltd
5,653
75,503
974,117
18,574,013
470,624,430
490,253,716
250,262
Fully Paid
Number
32,500,000
27,097,732
26,589,899
85,587,631
0.00%
0.01%
0.20%
3.79%
96.00%
100.00%
0.05%
Fully Paid
Percentage
6.63
5.53
5.22
17.38
61
Bluechiip Limited Annual Report 2018Additional ASX Information
c. Twenty largest holders of quoted equity securities
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
EQUITAS NOMINEES PTY LIMITED
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