CAP-XX Limited
ABN 47 050 845 291
Annual report 2012
Annual report 2012
Contents
Corporate directory
Chairman’s statement
Business review
Directors’ report
Independence declaration
Corporate governance statement
Financial statements
Directors’ declaration
Independent audit report to the directors
Page
3
5
6
10
17
18
19
53
54
Page 2
Corporate directory
Directors
Michael Quinn
Chairman
Anthony Kongats
Managing Director
Brett Sandercock (Resigned June 30th, 2012)
Patrick Elliott
Bruce Grey ( Appointed August 24th, 2012)
Secretaries
Robert Buckingham
Michael Taylor
Notice of annual general meeting
The annual general meeting of CAP-XX Limited
will be held at:
Innovation Capital
Suite 401, 35 Lime Street
Sydney NSW 2000
Australia
time: 6.00pm
date: 6th November 2012
A formal notice of meeting is enclosed.
Suite 126
117 Old Pittwater Road
Brookvale NSW 2100
Australia
Units 9 and 10
12 Mars Road
Lane Cove NSW 2066
Australia
Computershare Investor Services Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford
Victoria 3067
Australia
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol
BS99 6ZY
United Kingdom
Registered office
Principal place of business
Registrars to shares
Registrars to depositary interests
Page 3
Corporate directory (continued)
Nominated adviser and broker to the
Company
Auditor
Solicitors to the Company as to Australian
law
Solicitors to the Company as to English law
Seymour Pierce Limited
20 Old Bailey
London EC4M 7EN
United Kingdom
PricewaterhouseCoopers
201 Sussex Street
Sydney NSW 1171
Australia
DibbsBarker
Level 9, Angel Place
123 Pitt Street
Sydney
New South Wales 2000
Australia
Olswang Solicitors
90 High Holburn
London WC1V 6XX
United Kingdom
Bankers
Commonwealth Bank of Australia
120 Pitt Street
Sydney, NSW 2000
Australia
Stock exchange listings
Shares are listed as Depositary Interests on AIM, a market
regulated by London Stock Exchange plc under the code CPX
Website address
www.cap-xx.com
Page 4
Chairman’s statement
Company highlights for 2012 were dominated by the world wide interest in the CAP-XX supercapacitor technology
associated with the automotive markets and especially the stop-start application. The Company completed a capital
raising exercise in the second half of the year.
For the fiscal year ended 30 June 2012, the Company reported total revenue of AUD $3.5 million (2011: AUD $ 3.8
million) with the decline due to the final payments associated with the R&D feasibility program being received in the 2011
financial year (2011: AUD$0.7million). Product sales were up 10%. The net loss for the twelve months to 30 June 2012
was AUD $2.9 million (2011: loss of AUD $3.3 million). Although the loss is similar to the previous year, it needs to be
highlighted that operational improvements at both Penang and Lane Cove over the past twelve months were able to
cover the shortfall in the Murata R&D receipts from the previous year. Similar to last year, the 2012 result does include
an accrued tax rebate from the Australian Taxation Office related to eligible Research & Development expenditure. The
previous year’s cash rebate was received in December 2011 and it is expected that this year’s cash rebate will be
received in a similar time frame.
During the year, we successfully developed a supercapacitor module for use in automotive Stop-Start applications. The
module provides significant performance improvements relative to battery-only systems. The Stop-Start application is an
important market opportunity, as vehicle manufacturers increasingly adopt Stop-Start systems to reduce vehicle
emissions and improve fuel efficiency. The demand and interest of the automotive supercapacitor module has been
greater that initially estimated and the module is currently being tested by numerous major automotive OEMs and their
Tier 1 suppliers. In order to meet the demand for samples a small scale assembly machine has been ordered for the
production of large prismatic supercapacitors. It is expected that this will be commissioned in the first half of the current
financial year. The Company anticipates that a partner to commercialise the technology associated with the Stop-Start
application will be found within the next 12 months.
It is pleasing to report that despite uncertainty in world markets, the Company continues to report a year on year volume
increase in product sales. For the year ended June 2012, volumes increased by 14%. The majority of the increase
continued to be generated from traditional markets such as hand held computers, point-of-sale systems, solid state drives
and location tracking devices. The first shipments of a new portable medical device associated with the management of
diabetes were also commenced late in the 2012 financial year. While initial volumes are modest they are anticipated to
grow substantially in the coming years. The Average Selling Price increased to US$3.47 which represents a 1% increase
over the previous year. The strengthening Australian dollar did have a negative impact (5%) on revenue, which
culminated in total product sales increasing 10% over the prior year.
Murata have continued to actively market and sell CAP-XX supercapacitors over the past twelve months. Although the
Murata sales that have been achieved are lower than expected, Murata’s investment in product line extensions and
increased manufacturing capacity support the Board’s expectations of accelerated sales growth over the coming years.
CAP-XX and Murata have deferred the surface mount device license negotiations as it is the Company’s understanding
that Murata is focusing its efforts on increasing sales of the supercapacitor products already in production. CAP-XX is in
initial negotiations with several other manufacturers regarding licensing the surface mount technology.
During the year, the Company undertook a capital raising with 9.245m shares being issued at a £ 0.30 share price. This
transaction occurred in March 2012 with 72% of the shares issued being acquired by new institutional investors with the
remainder being acquired by existing institutional shareholders. Apart from general working capital requirements, the
additional funds will be utilised to acquire new production plant and machinery which will assist with the reduction of
manufacturing costs and increase the competiveness of the CAP-XX product range. The funds will also be used to
accelerate the production of large prismatic supercapacitor samples for automotive and other new applications. It was
highlighted at the time of the capital raising that a Chinese automotive component company agreed to subscribe for 1.7m
shares, subject to Chinese Government approval. Despite numerous requests and frustrating ongoing negotiations the
Board have concluded that the necessary Chinese Government approvals will not be received and therefore there is no
realistic prospect that the subscription funds will be forthcoming. The financial impact of the transaction (AUD$0.7m) has
been removed from internal cash projections.
In what has been a difficult operating environment, the CAP-XX management team and staff have performed admirably in
achieving new and exciting product developments, delivering operational improvements and continuing to increase sales.
Given the amount of interest shown in the new and emerging technologies and the increase in enquiries from developing
markets, the Board remain confident of further advancement in these key areas over the next twelve months.
Michael Quinn
Chairman
8 October 2012
Page 5
Business Review
About CAP-XX Limited
CAP-XX Limited is a world leader in the design and manufacture of revolutionary thin-form supercapacitors
predominately for use in small electronic devices and automotive applications. Supercapacitors can considerably
extend battery run-times and provide power-hungry functions that are not possible with current battery technology or
ambient energy harvesters.
CAP-XX supercapacitors have a compact, prismatic design and can store higher volumes of energy and output higher
power levels than competing supercapacitor products. These attributes are critical for current and future generation
electronic devices, such as mobile phones offering high quality flash photography and audio playback. Other
applications include industrial handheld computers and point of sale systems (POS), cache protection in solid state
drives (SSD), mobile phone accessories, LED flash and alkaline battery support in digital cameras, energy storage
and peak power support for energy harvesting systems, battery-free e-Book readers, portable drug delivery systems,
wireless sensor networks, uninterrupted power supplies, toll tags and location tracking devices. Large scale market
opportunities also include Stop-Start systems in cars, battery support units for large vehicles and hybrid electric
vehicles. Longer term, as the market for fuel cell systems develops, supercapacitors will also be used to support
modulated output for fuel cell powered vehicles.
In 2011-2012, CAP-XX continued to supply supercapacitors to a number of blue chip consumer electronics companies
for use in these current generation application but is also now focussed on the larger opportunities represented by the
emerging market opportunities mentioned - both directly and via licensee partnerships such as that already in place
with, Murata Manufacturing of Japan. In addition, CAP-XX is actively seeking licensing or joint venture opportunities
for surface mount and large cell supercapacitors for automotive applications to market.
CAP-XX is incorporated in Australia and has its headquarters, research and development and electrode
manufacturing facilities in Sydney, , where 22 staff are employed. These facilities are ISO 9001-2008 certified and all
products are UL registered and RoHS, REACH, WEEE and Conflict Materials compliant. Larger manufacturing
facilities, which are also ISO9001-2008 certified, are operated in Malaysia by Polar Twin Advance Sdn Bhd and
Nationgate Technologies Sdn Bhd under manufacturing agreements with CAP-XX.
Historical Milestones
In 1994, a company associated with Anthony Kongats, now Chief Executive Officer of CAP-XX Limited, entered into
an agreement with CSIRO (the Australian Commonwealth Scientific and Industrial Research Organisation) to research
and commercialise supercapacitor technology that had resulted from CSIRO research.
CAP-XX Limited (formerly known as Energy Storage Systems Pty Limited) was established in 1997 by Anthony
Kongats as the vehicle to hold the intellectual property resulting from the partnership with CSIRO. CAP-XX received
research and development grants from the Australian Government and was backed by some of the world's leading
technology investors, including ABN Amro, Acer, Innovation Capital, Intel, Technology Venture Partners and Walden.
In 1999, the Company built a pilot production plant in Lane Cove, Sydney, Australia, and progressively improved
production capacity. It began shipping supercapacitor products to customers in 2003. Customers supplied to date
include Sony, Sony Ericsson, IP Wireless, Option, Sierra Wireless and Flextronics. Product shipped to Motorola,
Intermec and Hand Held Products has been incorporated in field-critical devices such as those used by leading parcel
delivery companies like FedEx and UPS.
In late 2004, the Company entered into a manufacturing agreement with Polar Twin Advance Sdn Bhd (“PTA”) of
Malaysia to provide high volume manufacturing services. The production flow process developed in Sydney was
replicated successfully in Malaysia.
CAP-XX was named a 2005 Technology Pioneer by the World Economic Forum for developing and applying
innovative and transformational technology.
In February 2006, the CAP-XX technology was recognised by Frost & Sullivan's 2005 Technology Innovation of the
Year Award as a ‘breakthrough nanotechnology process for producing supercapacitors to meet the pulse-power
requirements of portable devices’. This Award recognises research expected to make significant contributions to the
electronics industry.
CAP-XX has received numerous other international awards for its products and electronic circuit designs including
EDN’s Top Overall Power Product for 2009 and being voted 3rd overall in Electronic Design’s Top 101 Components for
2009.
On 20 April 2006, CAP-XX Limited was listed on the AIM market of the London Stock Exchange in conjunction with a
placement of 18,433,333 shares at 93 pence per share, which raised gross proceeds of AUD$41million (£17.1 million)
and increased the total shareholding to 48,565,893 shares and market capitalisation (at 93 pence per share) to about
AUD$108 million (£45.2 million). Shareholding rose to 49,112,791 by 30 June 2008 as various Employee Shareholder
Page 6
Business Review (continued)
Option Plan participants exercised their options. On 25 June 2009, a secondary capital raising was completed with
12,940,000 shares being placed at 12.5 pence per share. On 25 March 2011, a capital raising was completed with
5,906,493 shares being placed at 33 pence per share. On 6th June 2011, a capital raising was completed with
9,072,813 shares being placed at 16 pence per share. On 15th March 2012, a capital raising was completed with
9,245,333 shares being placed at 30 pence per share. Total shares outstanding as at June 2012 was 86,277,430
shares.
In May 2008, CAP-XX entered into a technology license agreement with Murata Manufacturing Corporation (Murata)
of Japan to jointly develop and supply high performance supercapacitors for mobile handsets and other power hungry,
space constrained portable applications. Murata is recognised as one of the world’s leading manufacturing companies
for electric components and is an existing supplier to all of the top mobile handset market companies. CAP-XX and
Murata continue to work together to scale supercapacitor production to meet the anticipated demand of the global
handset market. Volume mass production and sales from this partnership commenced in the first half of 2011.
In October 2008, the companies signed a Supply Agreement which provides CAP-XX with a proportion of the Murata
manufactured product for re-sale to CAP-XX’s existing and new customers under the CAP-XX name. While product
sales to date from this agreement have been modest through to June 2012, CAP-XX believes that demand and sales
will grow strongly in the near future.
In November 2008, both companies signed a Feasibility Study Agreement for the first stage of a proposed
Collaborative R&D program which concluded with the successful demonstration of a working surface mountable
supercapacitor in the first half of 2009. On the 5 March 2010, CAP-XX and Murata signed a R&D Agreement which
was an extension of the collaboration in developing supercapacitors with Murata. The contract covered surface
mounted devices (SMD’s) which will enable manufacturers to mount supercapacitors directly onto printed circuit
boards using reflow solder techniques. These supercapacitors are particularly suitable for high volume applications.
This project was successfully concluded in June 2011. At present, CAP-XX and Murata have deferred the associated
license negotiations, as it is the Company’s understanding that Murata is focusing its efforts on increasing sales of the
supercapacitor products already in production. CAP-XX is in initial negotiations with several other manufacturers
regarding licensing the surface mount technology.
On 30 July 2009, CAP-XX signed a contract manufacturing agreement with Nationgate Technologies of Penang,
Malaysia. Under the terms of the agreement, Nationgate acquired and transferred to Penang, the supercapacitor
assembly manufacturing plant, from CAP-XX’s Lane Cove facility. Following the re-commissioning of the plant at its
Penang facility, Nationgate began producing saleable supercapacitors in Q1 2010. Since 2010, Nationgate, with the
assistance of CAP-XX, has successfully commissioned a second assembly line at their Penang site which doubles the
available capacity. Polar Twin Advance, also in Penang, continues as a contract manufacturer, for CAP-XX.
Review of Operations and Activities
CAP-XX, has manufactured and sold more than 8 million supercapacitors modules (16 million cells) since launching
its first supercapacitor products in 2003 Since 2008 CAP-XX has established a new revenue stream with the
commencement of license fees and other related payments including royalties from Murata. Although the Murata sales
to date are lower than expected, Murata’s investment in product line extensions and increased manufacturing capacity
support the Board’s expectations of accelerated sales growth over the coming years.
Total sales revenue for the 12 months to 30 June 2012, decreased by AUD$0.3 million to AUD$3.5 million compared
to AUD$3.8 million in 2011. This decrease is due to the final Murata instalment from the R&D feasibility program being
received in the 2011 financial year (AUD$0.7 million). Pleasingly, product sales increased by more than 10% from
AUD$3.1m to AUD$3.5m with unit sales increasing by 14% to1.0 million dual cell devices. Average selling price in US
dollars increased 1%. The strengthening AUD negatively impacted the year on year revenue by 5%. The operating
result for the twelve months to 30 June 2012, was a loss of AUD$2.9 million (2011: loss of AUD$3.3 million).
Operational improvements at both Penang and Lane Cove over the past twelve months were able to cover the
cessation in service revenue from the Murata R&D program. As in previous years, the 2012 result does include an
accrued tax rebate from the Australian Taxation Office related to eligible Research & Development expenditure.
Business Environment
Space constrained and portable electronic devices provide the greatest opportunities for CAP-XX's current products.
Driven by customer requests, manufacturers are constantly adding to the functions and applications available on
these devices and striving to reduce their size, a combination which increases the demands on, and requirements for,
high performance power management solutions with supercapacitors at their core.
Automotive applications such as Stop-Start systems in conventional engines, hybrid electric vehicles and full electric
vehicles offer extremely attractive and rapidly growing new opportunities for CAP-XX products. Numerous automotive
OEM’s and battery manufacturers are currently evaluating CAP-XX’s products and the feedback has been pleasing.
Due to the unforseen demand, additional equipment to assist with the production of large supercapacitor samples for
automotive and other markets has been purchased and is expected to be commissioned in the first half of the current
Page 7
Business Review (continued)
financial year.
CAP-XX technology provides a competitive advantage for its products over those of most other supercapacitor
manufacturers, such as AVX, Maxwell Technologies and NEC/Tokin Corporation. Other manufacturers have not been
able to match the CAP-XX parts in terms of thinness, energy density and power density. Many other companies
manufacture higher-capacity, large package supercapacitors and focus on applications where the CAP-XX
combination of thinness, energy density and power density is not required. In the future, CAP-XX’s surface mount
capability will offer another very significant point of difference with the competition.
Opportunities
Video cameras, digital cameras and mobile phones remain a very large and attractive market for CAP-XX and its
partners as evidenced by Sony launching a range of video cameras using supercapacitors supplied by CAP-XX’s
licensee, Murata. Royalties received by CAP-XX from Murata were AUD$47K for the 2011/12 financial year with the
expectation that royalty income will grow significantly as Murata accelerates its sales efforts.
During the year the number of enquiries for automotive solutions from CAP-XX has increased dramatically. CAP-XX is
continuing to refine its current product offering and is concentrating on a number of automotive opportunities including
Stop-Start systems and hybrid electric vehicles.
Other applications include SSDs, energy harvesting, portable drug delivery systems, e-Book readers, wireless sensor
networks, uninterrupted power supplies, RFID and toll tags, building management systems and location tracking
devices.
An additional benefit of the Murata manufacturing agreement is that it has validated the CAP-XX supercapacitor as a
mainstream consumer electronics technology and increased exposure to markets and customers that were previously
not targeted due to the Company’s limited resources. Association with Murata is helping gain recognition for and
acceptance of the abilities of CAP-XX supercapacitors to support high-power functions.
Murata will not be able to meet the product type or size requirements of all markets. Murata will refer non-core
customers to CAP-XX and CAP-XX will supply these markets directly using products made by its contract
manufacturers.
Strategies for Growth
The Company continues to have discussions aimed at securing business with a number of global original equipment
manufacturers active in consumer commercial and clean-tech electronics. We are strengthening our relationships with
these organisations and conduct regular engineering meetings with their design teams. We are unable to comment on
specific clients, but are pleased with overall progress, and confident that the available market for supercapacitors is
increasing as manufacturers become familiar with the technology.
As mentioned in the past, CAP-XX is continuing to expand its market coverage through the appointment of qualified
distributors. Over the past 12 months, new value-added distributors have been appointed in Japan, Africa and India
whilst sample sales capabilities have been added through the inclusion of selected CAP-XX products in the element14
and RS Components catalogues and the Tecate and McCoy websites. Sales growth from this distributor network is
encouraging and distributors experience in selling our product continues to improve. It is expected that CAP-XX will
appoint further distributors over the next twelve months.
The Company will explore additional opportunities to increase the product offering both through the current distributors
and direct to customers. These offerings may take the form of complementary energy storage devices and modules.
Separately, the Company is exploring opportunities in various new markets with potential licensees or joint venture
partners to leverage its strong intellectual property and engineering expertise. Given the increasing interest in CAP-XX
technology and application expertise, the Company believes the automotive market may offer significant new
opportunities for short term growth.
Research and Development
CAP-XX has a research facility at its headquarters in Lane Cove, Australia where a research and development team
comprised of 11 engineers and scientists, is continuing development work to maintain CAP-XX’s lead position in the
engineering of electrode, separator and electrolyte material in supercapacitor devices. We also have a close
association with leading research institutions whilst our Scientific Advisory Board provides clear direction on the
commercially relevant technologies for our ongoing R&D programme.
The market in which the Company operates is competitive and is characterised by rapid technological change. CAP-
XX has a strong competitive position in all its target markets with its capability to produce supercapacitors with a high
Page 8
Business Review (continued)
energy density and power density in a small conveniently sized flat package. CAP-XX devices are also lightweight,
work over a broad temperature range and have an operating lifetime measured in years.
The Company’s success depends on its ability to protect and prevent any infringements of its intellectual property. To
protect this important asset the Company has considerable intellectual property embodied in patents covering the
design, manufacture and use of its high performance supercapacitors. The CAP-XX patent portfolio currently consists
of 19 patent families with 37 granted national patents (14 USA, 7 US continuations, 13 in Europe, 1 in Japan and 1 in
China) with an additional 33 applications pending in various jurisdictions. The patents cover supercapacitive devices,
components for supercapacitors, techniques for manufacturing devices and applications of the devices in electronic
circuits.
Outlook
The Company had recognised that several successful and reliable large scale contract manufacturers needed to be
identified in order to pursue the mobile phone market and other opportunities for small supercapacitors. With the
addition of Murata and Nationgate, CAP-XX’s long term supply strategy for these markets is now in place. Access to
capacity for the longer term is also in place to meet the expected increase in demand for the CAP-XX supercapacitor.
Murata is well recognised as a worldwide components manufacturer and already supplies to large mobile handset
manufacturers. Murata’s worldwide distribution expertise will also assist with the sales and marketing of the CAP-XX
supercapacitor. Murata have commissioned their production plant and have commenced sales. They are forecasting
an increase in sales over the coming years. Polar Twin Advance and Nationgate are also well known in South East
Asia as contract manufacturers of choice and have been operating successfully for more than 10 years. Both have
impressive lists of customers.
As previously reported, Murata, via its already well established supply chain interaction, with the mobile handset
manufacturers, has assumed the business development role in acquiring a mobile design win which would incorporate
the CAP-XX supercapacitor. Although progress has been impacted by the global slowdown in the electronics market,
expectations remain high. Murata has advised that it continues to promote supercapacitors strongly to mobile phone
manufacturers and other applications. It is planning for strong growth in volumes in 2012 and beyond.
CAP-XX continues to pursue other business opportunities in addition to mobile handset manufacturers and good
progress has been made especially in a number of non-traditional markets. Sales volumes continue to increase
and on a year on year basis were up 14%. Sales volumes in FY13 are also up when compared to the same
period from the previous year.
Separately CAP-XX is in the process of identifying potential partners who have the necessary manufacturing
experience and scale to successfully partner with CAP-XX in the automotive market and on surface mount
supercapacitors.
The major short term focus for CAP-XX will be to complete licensing for its automotive technology; ensuring the
increase in sales enquiries and associated demand is followed up and leads to a strong increase in sales volumes
from current and emerging markets; distributors are in place to support the increase in world-wide demand for
supercapacitor technology; assisting Murata where necessary in discussions with mobile phone manufacturers; and
ensuring that the new business opportunities identified above are aggressively pursued.
Page 9
Directors’ report
Your directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of CAP-XX
Limited (the Company or CAP-XX) and the entities it controlled at the end of, or during, the year ended 30 June 2012.
Directors
The following persons were directors of CAP-XX Limited during the financial year and up to the date of this report:
Michael Quinn
Anthony Kongats
Brett Sandercock Resigned 30th June 2012
Patrick Elliott
Bruce Grey Appointed 24th August 2012
Chairman
Managing Director
Principal activities
The Group’s principal continuing activities during the financial year consisted of the development, manufacture and sale
of supercapacitors. There have been no significant changes in the nature of the Group’s activities.
Dividends
No dividends were paid, declared or recommended during the financial year or since 30 June 2012.
Review of operations
The Group experienced net losses of $2,912,819 during the year ended 30 June 2012 (2011: loss of $3,285,307).
Information on the operations and financial position of the Group and its business strategies and prospects is set out on
pages 6 to 8 of this Annual Report.
Significant changes in the state of affairs
There were no significant changes in the Group’s state of affairs during the financial year ended 30 June 2012.
Matters subsequent to the end of the financial year
No matter or circumstances have arisen since 30 June 2012 that has significantly affected or may significantly affect the
following:
(a)
(b)
(c)
the Group’s operations in future financial years, or
the results of those operations in future financial years, or
the Group’s state of affairs in future financial years.
Likely developments and expected results of operations
Information on likely developments in the Group’s operations and the expected results of operations have not been
included in this report because the directors believe it would be likely to result in unreasonable prejudice to the Group.
Environmental regulation
The Group holds an Environment Protection licence and is subject to standard waste management environmental
regulations in respect of its research and manufacturing activities conducted at Lane Cove, Sydney, Australia. The
licence requires discharges to air and water to be below specified levels of contaminants, and solid wastes to be removed
to an appropriate disposal facility. These requirements arise under the Clean Air Act 1961, Clean Waters Act 1970,
Pollution Control Act 1970, Noise Control Act 1975 and the Waste Minimisation & Management Act 1995.
During the year there were no breaches of the regulatory requirements.
Page 10
Directors’ report (continued)
Information on directors
Michael Quinn Chairman. Age 65.
Experience and qualifications
Michael became a director on 12 November 1998. He is executive chairman of venture capital fund manager, Innovation
Capital Associates Pty Ltd, and was previously co-founder of Memtec Ltd, which is a high technology filtration company,
which was listed on the ASX, NASDAQ and then NYSE. Michael is also a director of QRxPharma Ltd, which is listed on
the ASX, a director of ResMed Inc., which is listed on NYSE, and is on the board of two not-for-profit organisations. Prior
to its acquisition, he was executive chairman of the ASX listed company Phoenix Scientific Industries Ltd that
manufactured and imported medical and scientific equipment. Michael has also held executive positions in the banking,
transport and high-technology plastics industries and has been a director of numerous listed and unlisted companies. He
has an MBA from Harvard.
Specific Board responsibilities
Nil.
Interests in shares and options
106,199 ordinary shares in CAP-XX Limited. (including shares held by Kaylara Pty Limited)
306,710 options over ordinary shares in CAP-XX Limited (including options held by Innovation Capital Limited, Innovation
Capital LLC and Kaylara Pty Limited).
Anthony Kongats Managing Director. Age 54.
Experience and qualifications
Anthony founded the Company in 1997. Prior to CAP-XX, he was the managing director of a manufacturer of passive
components before selling the business to a competitor. Previously, Anthony worked as a management consultant with
McKinsey & Company and held various engineering positions in Australia and Europe. He has a Bachelor of Engineering
degree (honours) in engineering from the University of New South Wales, a Bachelor of Science degree from the
University of Sydney and an MBA from the Australian Graduate School of Management.
Specific Board responsibilities
Nil.
Interests in shares and options
5,232,151 ordinary shares in CAP-XX Limited (including shares held by Ducon Management Pty Limited and
Management Matters Pty Limited).
911,828 options over ordinary shares in CAP-XX Limited.
Patrick Elliott Non-executive director. Age 60.
Experience and qualifications
Pat is a company director specialising in the resources sector with 35 years experience in investment and corporate
management. His early career was at Consolidated Gold Fields Australia Limited and covered investment analysis and
management, minerals marketing (copper, tin, rutile and zircon). In 1979 he went into investment banking and became
Head of Corporate Finance for Morgan Grenfell Australia Limited in 1982. Pat subsequently became Managing Director
of Natcorp Investments Ltd in 1986 which owned a number of manufacturing businesses. After its takeover he became
an active early stage venture capital investor with an emphasis on resources. He is Chairman of Argonaut Resources NL,
Australia Oriental Minerals NL and Tamboran Resources P/L. He is also a director of Platsearch NL Global Geoscience
Limited and Crossland Uranium Mines Limited, and a number of privately owned companies. Pat holds an MBA in
Mineral Economics (Macquarie University) and B Comm. (University NSW).
Specific Board responsibilities
Chairman of Audit Committee
Member of Remuneration Committee
Interests in shares and options
800,000 ordinary shares in CAP-XX Limited (including shares held by Panstyn Investments Pty Limited).
85,000 options over ordinary shares in CAP-XX Limited (including options held by Panstyn Investments Pty Limited).
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Directors’ report (continued)
Bruce Grey Non-executive director. Age 66.
Experience and qualifications
Bruce was Managing Director of the Bishop Technology Group Limited, prior to becoming Managing Director of the
Advanced Manufacturing Cooperative Research Centre. Bruce has been an Executive Director of two Australian public
companies and for 10 years until 2009, was Chairman of a German joint venture between Bishop and Mercedes-Benz
Lenkungen GmbH. Bruce has more than 20 years experience in managing industry R&D and 30 plus years experience in
international commercialisation of Australian innovation and has been directly responsible for creating new manufacturing
facilities in Germany, Thailand and South Korea and indirectly the US, all based on Australian innovation. Bruce was
Group General Manager of Clyde Industries Limited from 1985 until 1995. In 2005 Bruce was appointed Chairman of the
Federal Government’s Advanced Manufacturing Action Agenda and is currently Chairman of the IP and
Commercialisation Committee for the Murdoch Children’s Research Institute and also Chairman of the Victorian
Government’s Small Technology Industry Uptake Program, Expert Advisory Panel. In 2012 Bruce was appointed to the
Australian Federal Government's Clean Technology Investment Committee. Bruce is a Fellow of the Australian Academy
of Technological Sciences and Engineering.
Specific Board responsibilities
Member of Audit Committee
Interests in shares and options
Nil
Company Secretaries
The Company Secretary is Robert Buckingham.
Robert is Managing Partner of Allan Hall Partnership, Chartered Accountants, a position he has held since 1989. He has
a Bachelor of Commerce degree (honours) from the University of New South Wales and is a member of the Institute of
Chartered Accountants in Australia and an Associate Member of CPA Australia.
On 25 November, 2008, Michael Taylor, Chief Financial Officer, was appointed as Co- Company Secretary.
Michael graduated from Kuring-Gai College with a Bachelor of Business and from Macquarie University with a Master of
Applied Finance. He is a member of CPA Australia.
Page 12
Directors’ report (continued)
Meetings of Directors
The number of meetings of the Company’s board of directors and of each board committee held, during the year
ended 30 June 2012, and the number of meetings attended by each director were:
Michael Quinn
Anthony Kongats
Brett Sandercock
Patrick Elliott
Full
Meetings of
Directors
A
7
7
7
7
B
6
7
7
7
Audit
Committee
Meetings
A
B
3
3
3
3
Remuneration
Committee
Meetings
A
B
2 2
2 2
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a member of the committee during the year
Directors’ remuneration
Details of the remuneration of each director of CAP-XX Limited, for the year ended 30 June 2012, are set out in the following
table. The cash bonuses are dependent on the satisfaction of performance conditions. All other elements of remuneration are
not directly related to performance.
Directors of CAP-XX Limited
2012
Name
Executive directors
Anthony Kongats
Non-executive directors
Michael Quinn
Brett Sandercock
Patrick Elliott
Total
Cash
salary and
accrued
fees
$
310,443
48,440
36,330
35,235
430,448
Primary
Cash
bonus
$
Non-
monetary
benefits
$
Post-employment
Equity
Super-
annuation
$
Retirement
benefits
$
Options
$
Total
$
-
-
-
-
-
-
-
-
-
-
27,940
-
3,270
-
31,210
-
-
-
-
-
32,163
370,546
11,807
11,807
1,969
60,247
51,407
37,204
57,746
519,404
Page 13
Directors’ report (continued)
Details of the remuneration of each director of CAP-XX Limited, for the year ended 30 June 2011, are set out in the
following table. The cash bonuses are dependent on the satisfaction of performance conditions. All other elements of
remuneration are not directly related to performance.
Directors of CAP-XX Limited
2011
Name
Executive directors
Anthony Kongats
Non-executive directors
Michael Quinn
John Murray
Graham Titcombe
Brett Sandercock
Total
Cash
salary and
accrued
fees
$
301,402
48,702
24,183
31,053
36,526
441,866
Primary
Cash
bonus
$
Non-
monetary
benefits
$
Post-employment
Equity
Super-
annuation
$
Retirement
benefits
$
Options
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
27,126
-
-
-
3,287
30,413
-
-
-
-
-
-
86,185
414,713
2,785
-
2,785
51,487
24,183
31,053
42,598
91,755
564,034
Loans to directors and executives
The Group has no loans to directors and/or executives.
Share options granted to directors and the most highly remunerated officers
Options over unissued ordinary shares of CAP-XX granted during the financial year to any of the directors or the 5 most
highly remunerated officers of the Company and Group as part of their remuneration were as follows:
Directors
Michael Quinn
Brett Sandercock
Patrick Elliott
Anthony Kongats
Michael Quinn
Brett Sandercock
Other executives of CAP-XX Limited
Michael Taylor
Pierre Mars
Philip Aitchison
Date
Granted
8 December 2011
8 December 2011
8 December 2011
8 December 2011
21 April 2012
21 April 2012
Options
Granted
75,000
75,000
85,000
250,000
10,000
10,000
Date
Granted
8 December 2011
8 December 2011
8 December 2011
Options
Granted
250,000
250,000
250,000
The options were granted under the terms and conditions of the CAP-XX Limited Employee Share Option Plan.
No options over unissued ordinary shares of CAP-XX have been granted since the end of the financial year to any of
the directors or the 3 most highly remunerated officers of the Company and Group as part of their remuneration.
Page 14
Directors’ report (continued)
Shares under option
Unissued ordinary shares of CAP-XX Limited under option at the date of this report are as follows:
Date Options Granted
Expiry Date
1 November 2002
1 April 2004
30 June 2004
1 July 2005
1 July 2005
19 September 2006
8 May 2007
25 February 2008
21 April 2008
19 December 2008
12 January 2009
21 April 2009
6 April 2010
21 April 2010
21 April 2011
8 December 2011
21 April 2012
30 September 2012
30 September 2012
31 May 2014
31 May 2015
31 May 2015
19 September 2016
8 May 2017
25 February 2018
21 April 2018
19 December 2014
12 January 2015
21 April 2009
6 April 2016
21 April 2020
21 April 2021
8 December 2015
21 April 2022
Issue Price of
Shares
Number
Under Option
$15.64
$15.64
$0.47
$0.47
$15.64
$2.38
$2.58
$0.71
$0.43
£0.25
£0.20
£0.169
£0.56
£0.33
£0.19
£0.21
£0.29
26,001
11,502
30,000
518,576
8,004
625,000
10,000
160,000
20,000
855,000
50,000
20,000
1,650,000
20,000
20,000
1,835,000
20,000
5,879,083
No option holder has any right under the options to participate in any other share issue of the Company or of any
other entity.
Shares issued on the exercise of options
No ordinary shares of CAP-XX were issued during the year ended 30 June 2012 on the exercise of options granted
under the CAP-XX Employee Option Plan. No other shares under option have been issued since that date. No
amounts are unpaid on any of the shares.
Indemnification and Insurance of Officers
Indemnification
CAP-XX has agreed to indemnify the current directors and executive officers of the Group and former directors of the
Company against all liabilities to another person (other than the Company or a related body corporate) that may arise
from their position as directors of the Company and its controlled entities, except where the liability arises out of
conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any
such liabilities, including costs and expenses.
Insurance Premiums
The directors have not included details of the nature of the liabilities covered nor the amount of the premium paid in
respect of the Directors’ and Officers’ liability insurance contracts, as such disclosure is prohibited under the terms of
the contract.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out on page 17.
Page 15
Directors’ report (continued)
Non-audit Services
It is the Group’s policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties
where PricewaterhouseCoopers’ expertise and experience with the Group are important. These assignments are
principally tax advice where PricewaterhouseCoopers is awarded assignments on a competitive basis. It is the Group’s
policy to seek competitive tenders for all major consulting projects.
Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) for audit and non-audit services
provided, during the year, are set out in Note 22 to the financial statements.
Auditor
PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of the directors.
Michael Quinn
Director
Sydney
8 October 2012
Page 16
Page 17
Corporate Governance Statement
Over the past year the Board has conducted the affairs of the Company in accordance with principles of good
corporate governance.
Whilst companies whose shares are listed on AIM are not formally required to comply with the Combined Code on
Corporate Governance (July 2003), the Board supports the Code and applies it in so far as is practicable and
appropriate for a public company of its size. The Board is committed to ensuring that high standards of corporate
governance are maintained.
There is a clear division of responsibility between the Chairman and the Managing Director. The Board comprises four
directors, three of whom are non-executive directors and two of whom are independent non-executive directors. None
of the non-executive directors have any day-to-day involvement in the running of the business.
The Board is responsible for overall strategy, the policy and decision making framework in which this strategy is
implemented, approval of budgets, monitoring performance, and risk management.
The Board meets at regular scheduled intervals and follows a formal agenda. It also meets as and when required.
During the year ended 30 June 2012, seven Board meetings were held.
The directors may take independent professional advice at the Company’s expense.
Board Committees
The Company has an audit committee and a remuneration committee both consisting of two non-executive directors.
The terms of reference and composition of the audit and remuneration committees were determined as part of the
process of the listing of the Company. During the year ended 30 June 2012, three audit committee and two
remuneration committee meetings were held. Each committee is to meet at least twice a year.
The audit committee comprises Patrick Elliott (Chairman), and Bruce Grey. The remuneration committee comprises
Michael Quinn (Chairman), and Patrick Elliott.
The audit committee assists the Board with its oversight responsibilities for the financial statements, the integrity of
financial reporting and the effectiveness of the Company’s internal controls over financial reporting.
The remuneration committee determines, agrees and reviews with the Board the framework or broad policy for the
remuneration of the Company’s Chairman and executives and within the terms of the agreed policy (in consultation
with the Chairman and/or chief executive as appropriate) determines the total individual remuneration package of
each senior executive. The remuneration committee also reviews and notes annually the remuneration trends across
the Group.
Code of Conduct
The Company has a policy in place that complies with its obligations under Rule 21 of the AIM listing rules which
provides that ”the Company must ensure that its directors and applicable employees do not deal in any of its AIM
securities during a closed period”.
Relationships with Shareholders
The Board understands the need for clear communications with its shareholders. In addition to presentations after
publication of results and the annual general meeting, meetings are held with fund managers, analysts, and
institutional investors. Information is posted on the Company’s web site, www.cap-xx.com.
Intellectual Property
The Board has always been vigilant in managing the Company’s intellectual property (“IP”) portfolio which currently
consists of 19 patent families with 37 granted national patents (14 USA, 7 US continuations and 13 in Europe, 1 in
Japan and 1 in China) with an additional 33 applications pending in various jurisdictions. The Company’s IP strategy
has been to build company value by focusing on opportunities to capture market share and exclude competition with
an IP portfolio capable of generating licensing revenue. The directors believe comprehensive embodiments and
interlocking patent groups, combined with a ‘quick to file, quick to abandon’ policy, have given the Company a strong
and focused IP portfolio.
Page 18
CAP-XX Limited
Financial statements
– 30 June 2012
Contents
Income statement
Statement of comprehensive income
Balance sheet
Statement of changes in equity
Cash flow statement
Notes to the financial statements
Page
20
21
22
23
24
25
This financial report covers the Group consisting of CAP-XX Limited and its subsidiaries. The financial report is
presented in the Australian currency.
CAP-XX Limited is a company limited by shares, incorporated and domiciled in Australia. Its principal place of
business is:
Units 9-10
12 Mars Road
Lane Cove NSW 2066
Its registered office is:
Suite 126
117 Old Pittwater Road
Brookvale NSW 2100
A description of the nature of the Group's operations and its principal activities is included in the Chairman’s
statement on page 5, business review on pages 6 to 9 and in the directors’ report on pages 10 to 16, all of
which are not part of this financial report.
The financial report was authorised for issue by the directors on 5 October 2012. The Company has the power
to amend and reissue the financial report.
Through the use of the internet, we have ensured that our corporate reporting is timely, complete, and available
globally at minimum cost to the Company. All press releases, financial reports and other information are
available at our Investors’ Centre on our website: www.cap-xx.com.
Page 19
CAP-XX Limited
Income statement
For the year ended 30 June 2012
Currency: Australian Dollars
Notes
Revenue from continuing operations
Cost of sale of goods & services
Gross margin on sale of goods & services
Other revenue
Other income
General and administrative expenses
Process and engineering expenses
Selling and marketing expenses
Research and development expenses
Other expenses
Loss before income tax
Income tax benefit / (expense)
5
7
5
6
7
8
Consolidated
2012
$
2011
$
3,466,502
(2,725,562)
740,940
3,844,296
(3,237,993)
606,303
107,610
333,324
110,471
14,281
(2,354,639)
(367,327)
(411,324)
(1,998,271)
(74,562)
(4,024,249)
(2,231,798)
(386,547)
(432,807)
(1,522,909)
(117,301)
(3,960,307)
1,111,430
675,000
Net loss for the year
(2,912,819)
(3,285,307)
Loss attributable to owners of CAP-XX
Limited
(2,912,819)
(3,285,307)
Earnings per share for (loss) attributable to
the ordinary equity holders of the Company
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
30
30
Cents
(3.7)
(3.7)
Cents
(4.8)
(4.8)
The above income statement should be read in conjunction with the accompanying notes.
Page 20
CAP-XX Limited
Statement of comprehensive income
For the year ended 30 June 2012
Currency: Australian Dollars
Notes
Consolidated
2012
$
2011
$
Loss for the year
(2,912,819)
(3,285,307)
Other comprehensive income
Exchange differences on translation of foreign
operations
20
(20,243)
113,214
Other comprehensive income for the year,
net of tax
(20,243)
113,214
Total comprehensive income for the year
attributable to owners of CAP-XX Limited
(2,933,062)
(3,172,093)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
Page 21
CAP-XX Limited
Balance sheet
As at 30 June 2012
Currency: Australian Dollars
Notes
Consolidated
2012
$
2011
$
ASSETS
Current assets
Cash and cash equivalents
Receivables
Inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Other
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Payables
Provisions
Other
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
9
10
11
12
13
14
15
16
17
18
3,816,979
1,709,390
758,027
81,677
6,366,073
515,716
236,507
752,223
3,073,481
1,272,221
1,466,257
59,260
5,871,219
755,111
208,233
963,344
7,118,296
6,834,563
900,264
740,382
772650
2,413,296
1,247,073
516,226
772,650
2,535,949
230,612
230,612
1,136,826
1,136,826
2,643,908
3,669,775
4,474,388
3,164,788
19
20
20
87,932,560
3,306,477
(86,764,649)
83,979,118
3,037,500
(83,851,830)
4,474,388
3,164,788
The above balance sheet should be read in conjunction with the accompanying notes.
Page 22
CAP-XX Limited
Statement of changes in equity
For the year ended 30 June 2012
Consolidated
Contributed
Equity
$
Reserves
$
Accumulated
losses
$
Total
$
Notes
Balance at 1 July 2010
81,878,750
2,491,744
(80,566,523)
3,803,971
Total comprehensive income for
the year as reported in the 2011
financial statements
Transactions with owners in their
capacity as owners:
Contributions of equity, net of
transaction costs
Employee share options - value of
employee services
19
20
-
113,214
(3,285,307)
(3,172,093)
2,100,368
-
-
432,542
2,100,368
432,542
-
-
-
2,100,368
432,542
2,532,910
Balance at 30 June 2011
83,979,118
3,037,500
(83,851,830)
3,164,788
Total comprehensive income for
the year
Transactions with owners in their
capacity as owners:
Contributions of equity, net of
transaction costs and tax
Employee share options - value of
employee services
19
20
-
(20,243)
(2,912,819)
(2,933,062)
3,953,442
-
-
3,953,442
289,220
289,220
-
-
-
3,953,442
289,220
4,242,662
Balance at 30 June 2012
87,932,560
3,306,477
(86,764,649)
4,474,388
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Page 23
CAP-XX Limited
Cash flow statement
For the year ended 30 June 2012
Currency: Australian Dollars
Notes
$
2012
2011
$
Consolidated
Cash flows from operating activities
Receipts from customers (inclusive of goods
and services tax)
Payments to suppliers and employees
(inclusive of goods and services tax)
Tax credit received
Grants received
Interest received
Net cash (outflow) from operating activities
27
3,793,426
5,101,183
(7,988,747)
(4,195,321)
693,986
304,521
107,610
(3,089,204)
(8,406,428)
(3,305,245)
-
14,281
110,471
(3,180,493)
Cash flows from investing activities
Payments for property, plant and equipment
Net cash (outflow) from investing activities
(100,497)
(100,497)
(73,580)
(73,580)
Cash flows from financing activities
Proceeds from issue of shares (net of costs)
19
Net cash inflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of
the financial year
Effects of exchange rate changes on cash
and cash equivalents
Cash and cash equivalents at the end of
the financial year
3,953,442
3,953,442
2,100,368
2,100,368
763,741
(1,153,705)
3,073,481
4,113,970
(20,243)
113,216
9
3,816,979
3,073,481
The above cash flow statement should be read in conjunction with the accompanying notes.
Page 24
CAP-XX Limited
Notes to the financial statements
30 June 2012
Contents of the notes to the financial statements
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Summary of significant accounting policies
Financial risk management
Critical accounting estimates and judgements
Segment information
Revenue
Other income
Expenses
Income tax expense
Current assets - Cash and cash equivalents
Current assets - Receivables
Current assets - Inventories
Current assets - Other
Non-current assets - Property, plant and equipment
Non-current assets - Other
Current liabilities - Payables
Current liabilities - Provisions
Current liabilities – Other liabilities
Non-current liabilities - Provisions
Contributed equity
Reserves and accumulated losses
Key management personnel disclosures
Remuneration of auditors
Commitments
Related party transactions
Subsidiaries
Events occurring after the balance sheet date
Reconciliation of profit after income tax to net cash outflow from operating activities
Share-based payments
Economic dependency
Earnings per share
Parent entity
Page
26
32
33
34
35
36
36
37
38
38
39
39
40
41
41
41
43
43
43
44
45
46
46
47
47
47
47
48
51
51
52
Page 25
CAP-XX Limited
Notes to the financial statements
30 June 2012
Note 1 Summary of significant accounting policies
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated. The financial
statements are for the consolidated entity consisting of Cap-XX Limited and its subsidiaries.
All amounts shown are in Australian Dollars unless otherwise stated.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. CAP-XX
Limited is a for-profit entity for the purpose of preparing the financial statements.
Compliance with IFRS
The consolidated financial statements of the CAP-XX Limited group also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Historical cost convention
These financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to
the financial statements are disclosed in note 3.
(b) Continuation as a going concern
During the year ended 30 June 2012, the Group incurred an operating loss before tax and net cash outflows from
operating activities as disclosed in the income statement and the cash flow statement, respectively. The continuing
viability of the Group and its ability to continue as a going concern and meet its debts and commitments as they fall due
are dependent upon the Group being successful with respect to the following factors:
i.
ii.
iii.
iv.
v.
The Company finalising technology license agreements from existing or new customers which will generate
revenue and cash inflows. The Company is currently in discussions with several interested parties;
It is expected that the revenue associated with the royalty arrangement between Murata and CAP-XX will
continue to grow as a result of sales of Murata supercapacitor product meeting forecast volumes;
The ongoing R&D Tax concession claim for the year ended June 2012 is lodged and processed successfully
under the amended legislation;
The ability of the Group to raise additional funds from shareholders and new investors. The Company has
successfully conducted a number of small equity placements over the last four years.
Continued close and effective monitoring of the Company’s operating expenditure, including the undertaking of
appropriate cost saving initiatives as necessary. The Board approves an annual budget and regularly receives
forecasts from management to monitor performance against budget and to consider longer term prospects.
As a result, there is material uncertainty with regards to the Group’s ability to continue as a going concern and
therefore whether it will realise its assets and settle its liabilities and commitments in the normal course of business
and at the amounts stated in the financial statements.
However, the Directors believe that the Group will be successful in achieving favourable outcomes on the above
matters and that it will have sufficient funds to pay its debts and meet its commitments for at least the next 12
months from the date of this financial report, and accordingly, have prepared the financial report on a going concern
basis. At this time, the directors are of the opinion that no asset is likely to be realised for an amount less than the
amount at which it is recorded in the financial report at 30 June 2012. As such, no adjustments have been made to
the financial statements relating to the recoverability and classification of the asset carrying amounts or classification
of liabilities that might be necessary should the Group not continue as a going concern.
Page 26
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 1 Summary of significant accounting policies (continued)
(c) Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of CAP-XX Limited
(''Company'') as at 30 June 2012 and the results of all subsidiaries for the year then ended. CAP-XX Limited and its
subsidiaries together are referred to in this financial report as the Group or the consolidated entity.
Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the
financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The
existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing
whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
(d)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board.
(e)
Foreign currency translation
(i)
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in Australian dollars, which is CAP-XX Limited’s functional and presentation currency.
(ii)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement on a net basis within other income or other expenses.
(iii) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the presentation
currency as follows:
•
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that
balance sheet;
income and expenses for each income statement are translated at average exchange rates (unless this is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognised in other comprehensive income.
•
•
When a foreign operation is sold, a proportionate share of such exchange differences are recognised in the income
statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entities and translated at the closing rate.
(f)
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net
of returns, trade allowances and duties and taxes paid.
Page 27
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 1 Summary of significant accounting policies (continued)
Sale of goods are recognised when products have been delivered to the customer. Sales of services are recognised in
the accounting period in which the services are rendered. For fixed term contracts revenue is recognised under the
percentage of completion method, based on the actual service provided as a proportion of the total services provided.
Where this cannot be reliably measured revenue is spread evenly over the contract term.
Interest income is recognised on a time proportion basis using the effective interest method.
(g)
Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will
be received and the Group will comply with all attached conditions.
(h)
Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the
national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the
assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for
each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary
differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising
from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these
temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction
did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised directly in
equity. In this case, the tax is also recognised directly in equity.
Tax consolidation legislation
CAP-XX Limited and its wholly owned Australian controlled entities have implemented the tax consolidation legislation as
of 1 July 2002.
The head entity, CAP-XX Limited, and the controlled entities in the tax consolidated group continue to account for their
own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group
continues to be a stand alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, CAP-XX Limited also recognises the current tax liabilities (or
assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled
entities in the tax consolidated group.
Tax funding agreements are currently not in place. Amounts assumed are recognised as a contribution to (or distribution
from) wholly owned tax consolidated entities.
(i)
Leases
Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are
classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair value of the
Page 28
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 1 Summary of significant accounting policies (continued)
leased property and the present value of the minimum lease payments. The corresponding rental obligations, net of
finance charges, are included in other long term payables.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases (note 23). Payments made under operating leases are charged to the income statement on a
straight-line basis over the period of the lease.
(j)
Impairment of assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs to sell 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 which are largely independent of the cash inflows from other assets
or groups of assets (cash generating units). Non-financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at each reporting date.
(k)
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of approximately three months that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value.
(l)
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for
doubtful debts. Trade receivables are due for settlement no more than 45 days from the date of recognition.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written
off. A provision for doubtful receivables is established when there is objective evidence that the Group will not be able to
collect all amounts due according to the original terms of receivables. The amount of the provision is the difference
between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective
interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.
The amount of the provision is recognised in the income statement.
(m)
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value. Cost
comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the
latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on a
basis of first in first out. Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale.
Raw materials held for development purposes are also stated at the lower of cost and net realisable value, hence are
generally recognised in the income statement as an expense when received.
(n)
Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes. The nominal value less estimated credit adjustments of trade receivables and payables are
assumed to approximate their fair values.
(o)
Property, plant and equipment
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial
period in which they are incurred. Capital work in progress is not depreciated until the asset is installed ready for use.
Page 29
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 1 Summary of significant accounting policies (continued)
Depreciation on assets is calculated using the straight-line method to allocate their cost amounts, net of their residual
values over their estimate useful lives as follows:
Furniture and fittings
Plant and equipment – Manufacturing
Plant and equipment – Research & Development
2-10 years
2-10 years
2-10 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount (note 1(j)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the
income statement.
(p) Research & development
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to the
design and testing of new or improved products) are recognised as intangible assets when it is probable that the project
will, after considering its commercial and technical feasibility, be completed and generate future economic benefits and
its costs can be measured reliably. The expenditure capitalised comprises all directly attributable costs, including costs of
materials, services, direct labour and an appropriate proportion of overheads. Other development expenditures that do
not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an
expense are not recognised as an asset in a subsequent period. Capitalised development costs are recorded as
intangible assets and amortised from the point at which the asset is ready for use on a straight-line basis over its useful
life, which varies from 3 to 5 years.
(q)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid within 55 days of recognition.
(r)
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is
probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably
estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with
respect to any one item included in the same class of obligations may be small.
(s)
Employee benefits
(i) Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within
12 months of the reporting date are recognised in other provisions in respect of employees' services up to the
reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits 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 using the projected unit credit method. Consideration is given to expected future wage and salary
levels, experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the reporting date on national government bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
(iii) Retirement benefit obligations
The Group does not maintain a Group superannuation plan. The Group makes defined fixed percentage
contributions for all Australian resident employees to complying third party superannuation funds. The Group’s
legal or constructive obligation is limited to these contributions.
Contributions to the defined contribution complying third party superannuation funds are recognised as an
Page 30
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 1 Summary of significant accounting policies (continued)
expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
(iv) Share-based payments
Share-based compensation benefits are provided to employees via the CAP-XX Limited Share Option Exchange
Plan and the CAP-XX Limited Employee Share Option Plan. Information relating to these schemes is set out in
note 29.
The fair value of options granted under the CAP-XX Limited Share Option Exchange Plan and the CAP-XX
Limited Employee Share Option Plan is recognised as an employee benefit expense with a corresponding
increase in equity. The fair value is measured at grant date and recognised over the period during which the
employees become unconditionally entitled to the options.
The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the
exercise price, the term of the option, the impact of dilution, the non-tradeable nature of the option, the share price
at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free
interest rate for the term of the option.
Non marketing vesting conditions are included in assumptions about the number of options that are expected to
vest. The total expense is recognised over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of
options that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the
revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
The 2006 Share Option Exchange Plan and the CAP-XX Limited Employee Share Option Plan are both
administered by the Board of Directors of CAP-XX Limited. When options are exercised, the entity transfers the
appropriate amount of shares to the employee. The proceeds received net of any directly attributable transactions
costs are credited directly to equity
(v) Bonus plans
The Group recognises a liability and an expense for bonuses where contractually obliged or where there is a past
practice that has created a constructive obligation.
(t)
Contributed equity
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.
Where such ordinary shares are subsequently re-issues, any consideration received, net of any directly attributable
incremental transactions costs and the related income tax effects, is included in equity attributable to the owners of CAP-
XX Limited.
(u)
Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation
to dilutive potential ordinary shares.
(v) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as
part of the expense.
Page 31
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 1 Summary of significant accounting policies (continued)
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance
sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.
(w) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2012
reporting periods. The Group’s has not adopted these new standards and interpretations and is it is not expected that
their adoption will have a material impact on future financial statements.
(x) Parent entity financial information
The financial information for the parent entity, Cap-XX Limited, disclosed in note 31 has been prepared on the same
basis as the consolidated financial statements, except as set out below:
(i) Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the financial statements of Cap-XX Limited.
Note 2 Financial risk management
The Group's activities expose it to a variety of financial risks; market risk (including currency risk, interest rate risk and price
risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the financial performance of the Group.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
(a) Market risk
Consolidated
2012
$
3,816,979
1,709,390
5,526,369
2011
$
3,073,481
1,272,221
4,345,702
900,264
900,264
1,247,073
1,247,073
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are
denominated in a currency that is not the entity’s functional currency.
The Group operates internationally and is exposed to foreign exchange risk arising particularly from currency
exposures to the US dollar. The Group sells most of its products and services in US dollars, buys the majority of
its raw materials and pays its contract tolling fees in US dollars. Its USA operations are financed out of the net
proceeds.
Page 32
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 2 Financial risk management (continued)
Sensitivity analysis
The Group’s after tax profit and equity for the year would have been $175,134 lower/ $192,647 higher (2011:
$80,812 lower/$88,893 higher) had the Australian dollar strengthened/weakened by 10% against the US dollar,
mainly as a result of foreign exchange gains/losses on the translation of US dollar denominated sales and
purchases of goods and services.
The group's exposure to foreign currency risk at the end of the reporting period, as expressed in Australian dollar,
was as follows:
2012
2011
USD
$
187,422
592,323
238,278
GBP
$
2,945
-
6,089
Other
$
4,205
-
USD
$
287,763
225,913
675,047
GBP
$
35,452
-
7,541
Other
$
3,474
-
Cash and cash
equivalents
Trade receivables
Trade payables
(b) Credit risk
The Group has some concentrations of credit risk. The Group has policies in place to ensure that sales of products are
made to customers with an appropriate credit history. Cash and cash equivalents are placed in financial institutions with
good credit ratings.
(c)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash, to ensure debts are paid as and when they fall
due. The Group has experienced recurring operating losses and operating cash outflows since inception to 30 June 2012
as the Group is transitioning from development stage. Due to the negative cash flow position the Group has not
committed to any credit facilities rather relied upon equity financing through private and public equity investors.
(d)
Interest rate risk
The Group’s interest-rate risk mainly arises from interest bearing assets, with the Group’s income and operating cash
flows exposed to changes in market interest rates. The interest bearing assets have been predominantly deposited at
short term fixed rates exposing the Group to cash flow interest-rate risk.
The Group’s exposure to interest-rate risk is immaterial in terms of the possible impact on profit or loss or equity. It has
therefore not been included in the sensitivity analysis.
As at 30 June 2012, the Group had no borrowings.
(e)
Fair value estimation
The carrying amount of financial assets and liabilities recorded in the financial statements represents their respective net
fair value unless otherwise noted, determined in accordance with the accounting policies disclosed in note 1.
Note 3 Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
(a)
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. Apart from the going concern assumption as discussed in note 1(b),
the estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
Page 33
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 3 Critical accounting estimates and judgements (continued)
(b)
Critical judgements in applying the entity’s accounting policies
(i) Impairment loss on plant and equipment
The Group has continued to use the Sydney, Australia manufacturing site for the production of electrode material
and selected supercapacitor product lines, whilst the larger volume supercapacitor product lines are outsourced.
In assessing the carrying value of its plant and equipment, the Group considers whether previous impairment
write downs remain adequate and the current depreciation rates fairly reflect the carrying value of such assets.
The Group has reviewed the carrying value of its current plant and equipment particularly the assets transferred
to Nationgate. These particular assets had a $1,005k impairment provision booked against them in the June 2008
accounts. Given that the final proceeds from this transaction were received in November 2010, the Group was
able to re-affirm a recoverable amount and extended useful life of the nominated manufacturing equipment.
These considerations have meant that the impairment provision has been adjusted in prior years, 2012 Nil (2011:
$157,000).
(ii) Fair value of share options
Share-based compensation benefits are provided to employees via the 2006 Share Option Exchange Plan and
the CAP-XX Limited Employee Share Option Plan. The fair value of options granted under the 2006 Share
Option Exchange Plan and the CAP-XX Limited Employee Share Option Plan is recognised as an employee
benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised
over the period during which the employees become unconditionally entitled to the options. The fair value at
grant date is determined using the Black-Scholes option pricing model. The key inputs and assumptions used in
the model is set out in note 28.
(iii) Inventory provision
The Group makes estimates and assumptions concerning the future saleability of inventory for amounts in excess
of cost. The provision for inventory obsolescence is based on management’s expectation of the future price of
inventory, taking into account the age and condition and demand of the inventory and management’s assessment
of future demand for the inventory.
Note 4 Segment information
(a)
Description of segments
Management has determined the operating segment based on the reports reviewed by the Board that are used to make
strategic decisions. Management has identified one reportable segment which is the development, manufacture and
sale of supercapacitors.
Although the Group is managed on a global basis, it operates in 3 main geographical areas being Asia Pacific, North
America and Europe.
(b)
Other segment information
(i) Segment revenue
Revenues from external customers are derived from the sale of supercapacitors and related services.
Segment revenue reconciles to revenue from sale of goods and services as follows:
Page 34
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 4 Segment information (continued)
Asia Pacific
Europe
North America
Total revenue from sale of
goods and services (note 5)
Segment revenues from sales
to external customers
2011
$
2012
$
1,975,906
970,621
519,975
2,565,272
647,330
631,694
3,466,502
3,844,296
The entity is domiciled in Australia. The amount of its revenue from external customers in Australia is $23,803
(2011: $ 26,077) and the total revenue from external customers in other countries is $3,442,699 (2011: $3,818,219).
Segment revenues are allocated based on the country in which the customer is located.
(ii) Segment assets
Segment assets and capital expenditure are allocated based on the physical location of the asset.
Reportable segment assets are reconciled to total assets as follows:
Asia Pacific
Europe
North America
Total assets as per balance sheet
Segment assets
2012
$
7,118,296
-
-
7,118,296
2011
$
6,834,565
-
-
6,834,565
The total of non-current assets located in Australia is $491,893 (2011: $585,346) and the total of non-current assets
located in other countries is $ 260,331 (2011: $376,998).The value of the non-current assets located in other countries
represents the manufacturing equipment that has been re-located to the Nationgate manufacturing facility in Penang,
Malaysia during the current financial year.
Note 5
Revenue
Sales revenue
Sale of goods
Sale of services
Other revenue
Interest
Total revenue
Consolidated
2012
$
2011
$
3,466,502
-
3,466,502
3,127,197
717,099
3,844,296
107,610
3,574,112
110,471
3,954,767
Page 35
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 6 Other income
Foreign Exchange Gains – (net)
Government grants (note 1(g))
(a) Government grants
Consolidated
2012
$
2011
$
28,803
304,521
-
14,281
333,324
171,281
The following grants were recognised as other income by the Group during the year ended 30 June 2012. There are no
unfulfilled conditions attached to these grants
2012
$ $
2011
NSW Global Growth
Commercialisation Australia
Advanced Manufacturing Cooperative Research Centre
10,000
237,500
57,021
14,281
-
-
304,521
14,281
Consolidated
2012
$
2011
$
Note 7 Expenses
Loss before income tax includes the following specific expenses:
Cost of sale of goods
Direct materials and labour
Indirect manufacturing expenses
Total cost of sale of goods
Depreciation
Plant and equipment
Furniture and fittings
Total depreciation
Other expenses
Net foreign exchange losses (net gain in
2011 - see note 6)
Impairment on plant and equipment
Provision for credit notes / doubtful debts
Provision for make good on premises
Provision for Withholding Tax Diminution
Provision for returns and rework
1,773,122
952,440
2,725,562
2,035,332
1,202,661
3,237,993
336,295
3,597
339,892
452,909
3,790
456,699
-
-
18,912
40,000
1,650
14,000
74,562
279,384
(157,000)
(12,462)
40,000
(32,621)
117,301
Rental expense relating to operating leases
Minimum lease payments
318,361
399,711
Employee benefits expense
2,412,025
2,514,322
Share based payments
289,220
432,542
Page 36
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 8 Income tax expense
(a)
Income tax expense
Current tax
Deferred tax
2012
$
2011
$
1,111,430
-
1,111,430
675,000
-
675,000
(b)
Numerical reconciliation of income tax benefit
to prima facie tax benefit
(Loss) before income tax benefit
(4,024,249)
(3,960,307)
Tax at the Australian tax rate of 30%
Tax effect of amounts which are not deductible
(taxable) in calculating taxable income:
Share based payments
Research & Development additional claims
Sundry items
Adjustments for current tax of prior periods
Benefit arising from temporary differences not
recognised
Benefit arising from tax losses not recognised
Income tax benefit
(c)
Tax losses
(1,207,275)
(1,188,092)
86,766
(908,428)
-
(2,028,937)
1,052,663
(159,923)
24,767
(1,111,430)
129,762
(585,471)
-
(1,643,801)
(293,852)
129,164
1,133,489
(675,000)
Unused tax losses for which no deferred tax asset
has been recognised
Potential tax benefit @ 30%
89,924,785
26,977,436
89,267,429
26,780,300
All unused tax losses were incurred by Australian entities. The deferred tax assets in relation to the tax losses will only be
obtained if:
i)
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the
deductions for the losses to be realised, and
the Group continues to comply with the conditions for deductibility imposed by tax legislation, and
no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the losses.
ii)
iii)
(d)
Unrecognised temporary differences
Temporary difference for which no deferred
tax asset has been recognised
Potential tax benefit @ 30%
(e) Tax consolidation legislation
1,973,600
592,080
2,506,677
752,003
CAP-XX Limited and its wholly owned Australian controlled entities have implemented the tax consolidation legislation as of 1
July 2002. The accounting policy in relation to this legislation is set out in note 1(h). CAP-XX Limited has not recognised any tax
consolidation distribution from or to wholly owned tax consolidated entities.
Page 37
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 9 Current assets – Cash and
cash equivalents
Cash at bank and on hand
Cash on deposit
Note 10 Current assets – Receivables
Trade receivables
Provision for doubtful receivables
Research & Development – tax receivable
Other receivables
(a)
Impaired trade receivables
Consolidated
2012
$
2011
$
285,344
3,531,635
3,816,979
366,876
2,706,605
3,073,481
Consolidated
2012
$
2011
$
600,288
(30,015)
570,273
228,930
(11,100)
217,830
1,092,444
46,673
1,139,117
675,000
379,391
1,272,221
There were no impaired trade receivables for the Group in 2012 (2011: Nil).
(b)
Past due but not impaired
As at 30 June 2012, trade receivables of $78,864 (2011: $46,166) were past due but not impaired.
These relate to a number of independent customers for whom there is no recent history of default.
The ageing analysis of these trade receivables is as follows:
Up to 3 months
3 to 6 months
(c)
Fair value and credit risk
Consolidated
2012
$
2011
$
53,155
25,709
78,864
46,166
-
46,166
Due to the short-term nature of these receivables, their carrying value is assumed to approximate their fair value. The
current receivables are non-interest bearing. Further information relating to amounts due from related parties is set out in
note 25. There is some concentration of credit risk with respect to current receivables, as the Group has a limited number
of customers, internationally dispersed. The total amount outstanding is comprised of 9 customers with the top 3 making
up 91% of the total balance.
Page 38
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 10 Current assets – Receivables (continued)
(d)
Foreign exchange and interest rate risk
Information about the Group's and the exposure to foreign currency risk and interest rate risk in relation to trade and
other receivables is provided in note 2.
Note 11 Current assets – Inventories
Raw materials and stores - net realisable
value
Finished goods - net realisable value
Note 12 Current assets – Other
Prepayments
Other
Consolidated
2012
$
2011
$
347,427
410,600
758,027
764,534
701,723
1,466,257
Consolidated
2012
$
2011
$
73,895
7,782
81,677
51,896
7,364
59,260
Page 39
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 13 Non-current assets – Property,
plant and equipment
Plant and equipment at cost
Accumulated depreciation
Net book amount
Furniture and fittings at cost
Accumulated depreciation
Net book amount
Leasehold improvements at cost
Accumulated depreciation
Net book amount
Total property, plant and equipment
Total accumulated depreciation
Total net book amount
Consolidated
2012
$
2011
$
16,257,901
(15,755,597)
502,304
16,176,264
(15,438,162)
738,102
66,779
(53,367)
13,412
436,877
(436,877)
-
66,779
(49,770)
17,009
436,877
(436,877)
-
16,761,557
(16,245,841)
515,716
16,679,920
(15,924,809)
755,111
Movement in classes of assets:
Consolidated
Plant and
equipment
$
Furniture and
fittings
$
Year ended 2012
Opening net book amount
Additions
Disposals
Impairment
Depreciation
Closing net book amount
738,102
100,497
-
(336,295)
502,304
17,009
-
-
-
(3,597)
13,412
Movement in classes of assets:
Consolidated
Plant and
equipment
$
Furniture and
fittings
$
Year ended 2011
Opening net book amount
Additions
Disposals
Impairment
Depreciation
Closing net book amount
960,431
73,580
-
157,000
(452,909)
738,102
20,799
-
-
-
(3,790)
17,009
Total
$
755,111
100,497
-
-
(339,892)
515,716
Total
$
981,230
73,580
-
157,000
(456,699)
755,111
Plant & equipment impairment provision adjustment - (note 3(b)).
The useful lives of the assets transferred to the Nationgate manufacturing facility in Malaysia have been extended to
equal the remaining term of the manufacturing contract between CAP-XX and Nationgate. This has resulted in a
significant decrease in the depreciation expense when compared to the previous year.
Page 40
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 14 Non-current assets – Other
Consolidated
2012
$
2011
$
Rental bond
236,507
208,233
A term of the current lease agreement for the Lane Cove premises is a requirement for CAP-XX to have a bank
guarantee in place as security for the landlord against loss or damage from any event of default. The rental bond of
$236,507 represents the current value of this bank guarantee.
Note 15 Current liabilities – Payables
Trade payables
Other payables and accrued expenses
Note 16 Current liabilities –
Provisions
Employee benefits – annual leave and long service
leave
Product returns and warranties
Make good provision
(a) Make good provision
Consolidated
2012
$
2011
$
624,419
275,845
900,264
1,097,092
149,981
1,247,073
Consolidated
2012
$
2011
$
490,382
50,000
200,000
740,382
320,226
36,000
160,000
516,226
CAP-XX Ltd is required to restore the leased premises of its office/warehouse to their original condition at the end of the
respective lease term. A provision has been recognised for the present value of the estimated expenditure required to
remove any leasehold improvements.
(b) Amounts not expected to be settled within the next 12 months
Provision for employee benefits includes accruals for annual leave. The entire obligation is presented as current, since
the Group does not have an unconditional right to defer settlement. However, based on past experience, the Group does
not expect all employees to take the full amount of accrued leave within the next 12 months. The following amounts
reflect leave that is not expected to be taken within the next 12 months:
Page 41
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 16 Current liabilities -
Provisions (continued)
Annual leave obligation expected to be
settled after 12 months
(c)
Risk exposure
Consolidated
2012
$
2011
$
96,599
76,049
Information about the Group's exposure to foreign exchange risk is provided in note 2.
(d)
Product returns and warranties
Provision is made for estimated product returns and warranty claims in respect of products sold. The Group provides a
one year warranty on products sold to customers. The Group has to date experienced minimal product returns and
warranty claims.
(e) Movements in provisions
Movements in the product returns and warranties provision during the financial years are set out below:
Carrying amount at start of year
Charged/(credited) to profit or loss
- provision adjustment
Carrying amount at end of year
Consolidated
2012
$
2011
$
36,000
69,258
14,000
50,000
(33,258)
36,000
The product returns and warranties provision has been adjusted to reflect the increased level of product returns from existing
customers.
Movements in the make good on premises provision during the financial year is set out below:
Carrying amount at start of year
Charged/(credited) to profit or loss
- additional provisions recognised
Carrying amount at end of year
Consolidated
2012
$
2011
$
160,000
120,000
40,000
200,000
40,000
160,000
Page 42
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Consolidated
2012
$
2011
$
Note 17 Current liabilities – Other
liabilities
Advance payment on sale of plant and equipment
772,650
772,650
772,650
772,650
The advance payment received from Nationgate for supercapacitor manufacturing equipment is being amortised over the
remaining term of the manufacturing contract between CAP-XX and Nationgate.
2012
$
2011
$
Note 18 Non-current liabilities –
Provisions and Other liabilities
Employee benefits – long service leave
Advance payment on sale of plant and equipment
35,367
195,245
164,264
969,562
230,612
1,136,826
Consolidated
2012
Shares
2011
Shares
Note 19 Contributed equity
(a)
Share capital
Fully paid ordinary shares (no par value)
86,277,430
77,032,097
(b) Movement in ordinary share capital:
Date
Details
1 July 2010
6 June 2011
6 June 2011
30 June 2011
Opening balance
Allotment of shares
Share issuance costs
Balance
1 July 2011
15 March 2012
15 March 2012
30 June 2012
Opening balance
Allotment of shares
Share issuance costs
Balance
Number of
shares
67,959,284
9,072,813
77,032,097
77,032,097
9,245,333
86,277,430
Issue price
$
$0.24
$0.45
81,878,750
2,215,246
(114,878)
83,979,118
83,979,118
4,164,006
(210,564)
87,932,560
Page 43
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 19 Contributed equity (continued)
(c)
Ordinary shares
At 30 June 2012, there were 86,277,430 (2011: 77,032,097) issued ordinary shares which were fully paid, with no par
value. Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote,
and upon a poll each share is entitled to one vote.
(d) Options
Information relating to the CAP-XX Limited Share Option Exchange and CAP-XX Limited Employee Share Option Plan,
including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of
the financial year, is set out in note 28.
Consolidated
2012
$
2011
$
Note 20 Reserves and accumulated
losses
(a)
Reserves
Foreign currency translation reserve note 20(c)(i)
Share-based payments reserve note 20(c) (ii)
3,855
3,302,622
3,306,477
24,098
3,013,402
3,037,500
Movements:
Foreign currency translation reserve
Balance 1 July
Currency translation differences arising during the year
Balance 30 June
24,098
(20,243)
3,855
(89,116)
113,214
24,098
Share-based payments reserve
Balance 1 July
Option expense
Balance 30 June
(b)
Accumulated losses
3,013,402
289,220
3,302,622
2,580,860
432,542
3,013,402
Movements in accumulated losses were as follows:
Balance 1 July
Net (loss) for the year
Balance 30 June
(83,851,830)
(2,912,819)
(86,764,649)
(80,566,523)
(3,285,307)
(83,851,830)
(c)
Nature and purpose of reserves
(i) Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency
translation reserve, as described in note 1(e). The reserve is recognised in profit and loss when the net
investment is disposed of.
Page 44
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 20 Reserves and accumulated losses (continued)
(ii) Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of options issued but not exercised.
Note 21 Key management personnel disclosures
(a)
Directors
The names of the directors who have held office during the financial year are as follows:
Executive director
Anthony Kongats (Managing Director)
Non-executive directors
Michael Quinn (Chairman)
Brett Sandercock (Resigned June 30, 2012)
Patrick Elliott
Bruce Grey (Appointed August 24,2012)
(b)
Key management personnel compensation
Key management personnel compensation is set out below. The key management personnel include all the directors of the
Company and those executives that report directly to the Managing Director, including:
Jean Pierre Mars, VP Applications Engineering
Michael Taylor, Chief Financial Officer/Chief Operating Officer
Peter Buckle, VP Sales & Marketing Asia
Phil Aitchison, VP Research
Short-term benefits
Post-employment benefits
Share-based payments
Total
Consolidated
2012
2011
$
$
1,274,060
106,964
182,083
1,563,107
1,290,452
106,786
187,781
1,585,019
(c)
Other transactions with key management personnel or entities related to them
There were no other transactions with key management personnel.
Page 45
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 22 Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the Group, its related practices
and non-related audit firms:
(a) PricewaterhouseCoopers Australia
Audit services
Audit and review of financial statements
Total remuneration for audit services
Consolidated
2012
$
2011
$
104,000
104,250
104,000
104,250
Taxation services
Tax compliance services, including review of company income
tax returns , employee share scheme and R&D Tax concession
34,000
34,000
Total remuneration of PricewaterhouseCoopers Australia
138,000
138,250
(b) Related practices of PricewaterhouseCoopers Australia
Taxation services
Tax compliance services, including review of company income
tax returns
Total remuneration for related practices of
PricewaterhouseCoopers Australia
12,500
26,000
12,500
26,000
It is the Group’s policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties
where PricewaterhouseCoopers’ expertise and experience with the Group are important. These assignments are
principally tax advice, or where PricewaterhouseCoopers is awarded assignments on a competitive basis. It is the
Group’s policy to seek competitive tenders for all major consulting projects.
Note 23 Commitments
(a)
Lease commitments: Group / company as lessee
The Group leases factory space with an office and warehouse under a non-cancellable operating lease which
commenced on the 1st July 2011 and is due to expire on 30th June 2013
The Group also leases office equipment under cancellable operating leases. The Group is required to give 3 months
notice for termination of these leases.
Commitments for minimum lease payments in relation to
operating leases are payable as follows:
Within one year
Later than one year but not later than 5 years
Later than 5 years
Consolidated
2012
$
2011
$
367,991
18,270
-
386,261
355,700
372,839
-
728,539
Page 46
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 24 Related party transactions
(a)
Parent entity
The ultimate parent entity within the Group is CAP-XX Limited.
(b) Subsidiaries
Interests in subsidiaries are set out in note 25.
(c) Key management personnel
Disclosures relating to key management personnel are set out in note 21.
Note 25 Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 1(c):
Name of entity
Country of
incorporation
Class of
shares
Equity holding *
30 June 2012
%
30 June 2011
%
CAP-XX (Australia) Pty Ltd
CAP-XX Research Pty Ltd
CAP-XX USA, Inc
Australia
Australia
United States
Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
*
The proportion of ownership interest is equal to the proportion of voting power held.
Note 26 Events occurring after the balance sheet date
No matter or circumstances have arisen since 30 June 2012 that has significantly affected or may significantly affect the
following:
(a)
(b)
(c)
the Group’s operations in future financial years, or
the results of those operations in future financial years, or
the Group’s state of affairs in future financial years.
Note 27 Reconciliation of profit after tax to net cash (outflow) from operating activities
Consolidated
2012
$
2011
$
Net loss
(2,912,819)
(3,285,307)
Depreciation and amortisation
Non-cash employee benefit expense – share based
payments
Reversal of impairment
339,892
456,699
289,220
-
432,542
(157,000)
Changes in assets and liabilities:
(Increase) decrease in receivables
Decrease (increase) in inventories
(Increase) decrease in other assets
(Decrease) increase in payables
Increase (decrease) in provisions
Net cash (outflow) from operating activities
(352,443)
708,230
(135,419)
(1,121,126)
95,261
(3,089,204)
(903,316)
(434,384)
(814)
681,987
29,100
(3,180,493)
Page 47
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 28
Share-based payments
(a)
2006 Share Option Exchange
The establishment of the 2006 Share Option Exchange (the “CAP-XX Limited Exchange”) was approved by the
Company’s Board of Directors with effect from on 5 April CAP-XX Limited. The 2006 Share Option Exchange provides
for the issuance of stock options for the purchase of ordinary shares of the Company's in exchange for the surrender of
options previously granted but unexercised in CAP-XX, Inc. The 2006 Exchange provides for the grant of share options
for the purchase of shares of the Company’s ordinary shares by officers, employees, independent contractors,
consultants, advisers and directors of the Company and/or any of its subsidiaries. The Board is responsible for
administration of the 2006 Exchange.
Set out below are summaries of options granted under the 2006 Exchange:
Grant Date
Expiry date
Consolidated – 2012
1 November 2002 30 September 2012
1 April 2004
30 September 2012
30 June 2004
31 May 2014
1 July 2005
1 July 2005
31 May 2015
31 May 2015
Exercise
price
A$
Balance at
start of the
year
Granted
during
the year
Number Number
Exercised
during the
year
Forfeited
& expired
during
the year
Number Number Number
Balance at
end of the
year
Exercisable
at end of the
year
Number
$15.64
$15.64
$0.47
$0.47
26,001
12,003
30,000
522,451
$15.64
8,004
-
-
-
-
-
598,459
-
-
-
-
-
-
-
-
(501)
26,001
11,502
-
30,000
26,001
11,502
30,000
(3,875)
518,576
518,576
-
8,004
8,004
(4,376)
594,083 594,083
Weighted Average Exercise Price
$1.64
-
-
$2.21
$1.63
$1.63
Grant Date
Expiry date
Consolidated – 2011
1 November 2002 30 September 2012
1 April 2004
30 September 2012
30 June 2004
1 July 2005
1 July 2005
31 May 2014
31 May 2015
31 May 2015
Exercise
price
A$
Balance at
start of the
year
Number
Granted
during the
year
Number
Exercised
during the
year
Forfeited
& expired
during
the year
Number Number Number
Balance at
end of the
year
Exercisable
at end of
the year
Number
$15.64
$15.64
$0.47
$0.47
29,502
12,003
30,000
528,451
$15.64
8,004
-
-
-
-
-
607,960
-
-
-
-
-
-
-
(3,501)
-
-
26,001
12,003
30,000
26,001
12,003
30,000
(6,000)
522,451
522,451
-
8,004
8,004
(9,501)
598,459
598,459
Weighted Average Exercise Price
$1.71
-
-
$6.06
$1.64
$1.64
Except for the adjustment to the exercise price and number of ordinary shares subject to the share option, the share
options are governed by their original terms and conditions and will continue to vest pursuant to the same vesting
schedule.
4,376 share options were forfeited during the year ended 30 June 2012 (2011: 9,501).
The weighted average remaining contractual life of share options outstanding at the end of the period was 2.7 years
(2011: 3.7 years).
Page 48
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 28 Share-based payments (continued)
(b) CAP-XX Limited Employee Share Option Plan
The CAP-XX Limited Employee Share Option Plan (the “CAP-XX Limited Plan”), provides for the grant of share options
for the purchase of ordinary shares of the Company by officers, employees, consultants, advisors and directors of the
Company or a related body corporate. The Board is responsible for administration of the CAP-XX Limited Plan. The
Board determines the term of each option, the option exercise price, and the number of shares for which each option is
granted and the rate at which each option is exercisable. Unless otherwise determined by the Board an offer of Options
must not provide for an exercise price that is less than the volume weighted average sale price of a share traded on AIM
over a defined period.
Set out below is a summary of options granted under the CAP-XX Limited Plan:
Grant Date
Expiry date
Consolidated – 2012
Exercise
price
$
Balance at
start of the
year
Granted
during
the year
Number Number
Exercised
during the
year
Number
Forfeited &
expired
during the
year
Number
Balance at
end of the
year
Number
Exercisable
at end of the
year
Number
19 September 2006 19 September 2016
$2.38
625,000 -
08 May 2007
08 May 2017
$2.58 20,000 -
25 February 2008
25 February 2018
$0.71 160,000
21 April 2008
21 April 2018
$0.43 30,000
-
19 December 2008 19 December 2014
£0.25
955,000
01 March 2009
21 April 2009
01 March 2015
21 April 2019
06 April 2010
06 April 2016
21 April 2010
21 April 2020
21 April 2011
21 April 2021
08 December 2011 8 December 2015
21 April 2022
21 April 2012
Weighted
Average Exercise
Price
50,000
£0.20
£0.167 30,000
£0.56 2,225,000
20,000
30,000
£0.33
£0.19
£0.21
£0.29
-
-
-
-
-
- 1,985,000
-
20,000
4,145,000
2,005,000
$1.05
$0.32
-
-
-
-
625,000
625,000
(10,000)
10,000 10,000
160,000 160,000
(10,000)
20,000
20,000
(100,000)
855,000
755,445
50,000
-
-
- (10,000) 20,000
50,000
20,000
-
-
-
-
-
-
(575,000) 1,650,000
923,322
-
(10,000)
20,000
20,000
(150,000) 1,835,000
20,000
20,000
-
20,000
20,000
(865,000)
5,285,000 2,583,767
$0.81
$0.81
$1.11
Page 49
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 28 Share-based payments (continued)
Grant Date
Expiry date
Consolidated – 2011
Exercise
price
Balance at
start of the
year
Granted
during
the year
Exercised
during the
year
Forfeited &
expired
during the
year
Balance at
end of the
year
Exercisable
at end of the
year
$
Number Number
Number
Number
Number
Number
20 April 2006
22 February 2011
19 September 2006 19 September 2016
$1.40
$2.38
60,000
875,000
-
08 May 2007
08 May 2017
$2.58 20,000 -
25 February 2008
25 February 2018
$0.71 160,000
21 April 2008
21 April 2018
$0.43 30,000
-
(60,000)
-
-
(250,000)
625,000
625,000
-
20,000 20,000
160,000 133,918
-
30,000
30,000
-
-
-
19 December 2008 19 December 2014
£0.25 1,205,000
(250,000)
955,000
604,397
12 January 2009
12 January 2015
01 March 2009
01 March 2015
21 April 2009
21 April 2019
06 April 2010
06 April 2016
21 April 2010
21 April 2020
21 April 2011
21April 2021
40,000
£0.25
50,000
£0.20
£0.167 30,000
£0.56 2,450,000
£0.33
£0.19
30,000
4,950,000
-
-
-
-
-
20,000
20,000
Weighted Average Exercise Price
$1.08
$0.29
-
(40,000)
-
50,000
-
-
- - 30,000
-
50,000
30,000
-
-
-
-
(255,000) 2,195,000
687,312
-
30,000
20,000
30,000
20,000
(825,000)
4,115,000 2,230,627
$1.76
$1.05
$1.19
The Stock Options are governed by their original terms and conditions and will continue to vest pursuant to the same
vesting schedule. 865,000 share options were forfeited & expired during the year ended 30 June 2012 (2011: 825,000).
The weighted average remaining contractual life of share options outstanding at the end of the period was 3.2 years
(2011: 4.2 years).
Fair value of options granted
The assessed fair value at grant date of options granted, during the year ended 30 June 2012, under the CAP-XX
Limited Plan were A$0.21 on 8 December 2011 and A$0.32 on 21 April 2012 per option, respectively. The assessed fair
value at grant date of options granted, during the year ended 30 June 2011, under the CAP-XX Limited Plan were
A$0.31 on 21 April 2011 per option. The fair value at grant date is determined using a Black-Scholes option pricing
model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact
of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.
The model inputs for options granted included:
(a)
options are granted for nil consideration, have a:
o
o
6-10 year life and 25% vest 12 months after the Vesting Commencement Date, and 1/48 of Total Option shall
vest on each monthly anniversary of the Vesting Commencement Date thereafter;
specific vesting criteria in some minor instances.
(b)
exercise price: refer tables above
(c)
grant date: refer tables above
(d)
expiry date: refer tables above
(e)
share price at grant date
(f)
expected price volatility of the Company’s shares: 78% (2011: 50%)
Page 50
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 28 Share-based payments (continued)
(g)
no expected dividend yield
(h)
risk-free interest rate: 1.88% (2011: 3.56%)
The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for
any expected changes to future volatility due to publicly available information.
(c) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit
expense were as follows:
Options issued under CAP-XX Limited Employee Share
Option Plan
Consolidated
2012
$
2011
$
289,220
289,220
432,542
432,542
Note 29 Economic dependency
The Group is highly dependent upon a small number of customers and potential customers. Alternative sources of
revenue are being sought to reduce future dependency on any particular entity.
The Group is also highly dependent upon a Malaysian contract manufacturer to fulfill a large proportion of sales orders.
Note 30 Earnings per share
Earnings per share for (loss) attributable to the ordinary equity holders of the Company
(a) Basic earnings per share
(Loss) attributable to the ordinary equity holders of the Company
(b) Diluted earnings per share
(Loss) attributable to the ordinary equity holders of the Company
Consolidated
2012
Cents
(3.7)
2011
Cents
(4.8)
(3.7)
(4.8)
Consolidated
2012
Number
2011
Number
(c) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
79,760,228
68,704,995
Weighted average number of ordinary shares and potential ordinary shares used
as the denominator in calculating diluted earnings per share
79,760,228
68,704,995
Options are considered to be potential ordinary shares. The options are not included in the calculation of diluted earnings
per share because they are antidilutive. These options could potentially dilute basic earnings per share in the future.
Page 51
CAP-XX Limited
Notes to the financial statements
30 June 2012 (continued)
Note 31 Parent Entity
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Net Assets
Shareholders’ equity
Issued capital
Reserves
Share-based payments
Retained earnings (i)
2012
$
2011
$
4,652,086
4,652,086
265,622
265,622
3,414,982
3,414,982
188,397
188,397
4,389,637
3,226,585
87,932,559
83,979,118
3,302,621
(86,845,544)
3,013,402
(83,765,935)
Loss for the year
(3,079,609)
(3,098,648)
Total comprehensive income
(3,079,609)
(3,098,648)
(i) Reconciliation to prior year retained earnings
Balance at beginning of period 1/07/2011
Net loss for the year
Balance at end of period 30/06/2012
(83,765,935)
(3,079,609)
(86,845,544)
Page 52
CAP-XX Limited
Directors’ declaration
30 June 2012
Directors’ declaration
In the directors’ opinion:
(a)
the financial statements and notes set out on pages 19 to 52 are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and mandatory professional
reporting requirements; and
giving a true and fair view of the Company’s and Group’s financial position as at 30 June 2012 and of
their performance, as represented by the results of their operations, changes in equity and their cash
flows, for the financial year ended on that date; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer in the form
contained in section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Michael Quinn
Director
Sydney
8 October 2012
Page 53
Liability limited by a scheme approved under Professional Standards Legislation
Page 54
Page 55