Carnegie Clean Energy Limited
Annual Report
2019
CARNEGIE CLEAN ENERGY 1
Corporate Directory
Directors
Share Registry
Terry Stinson
Michael Fitzpatrick
Grant Mooney
Anthony Shields
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
(Proposed)
Security Transfer Australia Pty Ltd
770 Canning Highway
Applecross 6153 WA
Telephone (domestic): 1300 992 916
Telephone (international): +61 (3) 9628 2200
Chief Executive Officer
Jonathan Fiévez
Company Secretary
Grant Mooney
Registered Office
21 North Mole Drive
North Fremantle, WA 6159
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
Lawyers
DLA Piper Australia
Level 31, Central Park
152-158 St Georges Terrace
Perth WA 6000
Postal Address
Website: www.carnegiece.com
PO BOX 39
North Fremantle WA 6159
ASX Code: CCE
Telephone: (08) 6168 8400
ii
CARNEGIE CLEAN ENERGY
Table of Contents
Corporate Report
Chairman’s Report .................................................................................................................................. iv
Company Overview .............................................................................................................................. vi
Review of Operations ............................................................................................................................ vi
Future Business Strategy and Plans ......................................................................................................... viii
Corporate Governance ............................................................................................................................. x
Financial Report
Directors’ Report ..................................................................................................................................... 3
Auditor’s Independence Declaration ......................................................................................................... 15
Statement of Profit and Loss and Other Comprehensive Income ................................................................ 16
Statement of Financial Position .............................................................................................................. 18
Statement of Changes in Equity .............................................................................................................. 19
Statement of Cash Flows ......................................................................................................................... 20
Notes to the Financial Statements ........................................................................................................... 21
Directors’ Declaration ............................................................................................................................ 66
Independent Auditor’s Report ................................................................................................................. 67
Additional Information
Additional Information ........................................................................................................................................... 71
CARNEGIE CLEAN ENERGY
iii
Chairman’s Report
On behalf of the Carnegie Clean Energy team and my fellow Board members, I am pleased to
have the opportunity to report on the events of this year including our combined efforts to
recapitalise the business since Carnegie went into voluntary administration in March. I would
also like to provide some insights on the new Carnegie and what we plan to accomplish over
the coming year.
In last year’s Annual Report, Carnegie had already made clear its intentions to divest EMC.
During the first part of this year, Carnegie progressed diligently towards a divestment of the
EMC Business to MPower Limited (formerly TAG Pacific Limited). However, on 30 November
2018, the agreement to divest the EMC Business was terminated. Management and the
Board continued to look for a viable EMC sale and other funding and diversification options.
Unfortunately, these engagements did not progress to a level of confidence sufficient to
resolve the remaining challenges around EMC. So, on 14 March 2019, the Company appointed Richard Tucker and John Bumbak
of KordaMentha Restructuring as voluntary administrators of the Company and certain subsidiaries, including EMC.
TERRY STINSON
Chairman
Rebooting and relisting the business has been our primary objective since the business entered voluntary administration in March.
During this time the Board and management have conducted a comprehensive strategic and technical review of the business. A
new business strategy and plan was developed and presented to shareholders as part of the Recapitalisation Proposal outlined in
the Prospectus dated 31 July 2019. This Recapitalisation Proposal was presented by CEO, Jonathan Fiévez and fellow board
member, Grant Mooney, to our shareholders and potential investors via a town hall meeting and webinar on 19 August 2019. The
Prospectus outlined Carnegie’s plan for the next two years and highlighted the key milestones of the new digital development
pathway that when achieved should demonstrate progress on the path to future wave energy technical and commercial success.
To be clear, to realise Carnegie’s full potential will take longer than two years. However, achieving the milestones highlighted in
the Recapitalisation Proposal will demonstrate to our funding and technology partners, to future customers, and hopefully to our
shareholders, that we are on the right track and have the potential to create significant shareholder value from the CETO
technology. We continue to believe that our CETO technology, as part of the emerging wave energy industry, can be a major
contributor to the reduction in harmful emissions and contribute to a cleaner world for generations to come.
I am pleased to report that Carnegie has achieved the minimum subscription amount of $5.5 million dollars required to fulfil
obligations outlined under the Prospectus. The funds received were predominately from existing shareholders, combined with
funds from new third-party investors. On behalf of the Board and the whole team, to all those who invested in Carnegie’s recent
capital raise, please accept our thanks for your continued support and for your confidence in the team and the wave energy
opportunity. Carnegie can now begin to rebuild and restart our efforts to create future shareholder value through wave energy
related activities.
Carnegie’s strategy, as outlined in the Prospectus, builds on the ten years plus of Carnegie’s investment in intellectual property
(IP) and know-how and is focused on deriving future revenue from related licensing and royalties. This new plan to commercialise
avoids the previous need for Carnegie shareholders to fully or substantially fund large capital infrastructure projects to
demonstrate wave energy technical feasibility. Carnegie will still seek to utilise appropriate Government funding to support the
development and commercialisation of the CETO technology.
The new digital development pathway will use advanced analytical models that have already been developed within the company
and new modelling capabilities developed over the next two years. The new IP and knowhow that will be created, combined with
the existing IP, will be the keys to creating future shareholder value and to securing one or more significant large scale industry
partners or OEMs to support and finance a physical CETO build, once the system and hardware are designed and proven through
Carnegie’s advanced modelling and in-house test and validation processes.
The new Carnegie has a much simplified and easy to manage balance sheet with a more efficient commercialisation and technical
development model facilitated by a lower cost digital development pathway. The result should be significantly lower operational
costs and, more importantly, far less capital cost required to achieve the same goal. The goal being a commercially successful
large-scale deployment of the CETO technology within the next 3 to 5 years. The business has approximately $4.5m in cash upon
reinstatement to ASX, which under the new operating model is projected to last well into 2021. During that time, the team will
be working on additional sources of non-debt funding and working hard to avoid the need to come back to shareholders for further
funds, however, to be transparent, future shareholder funding may be required to realise our full and longer-term potential.
iv
CARNEGIE CLEAN ENERGY
Carnegie has also retained the Garden Island Microgrid facility which is now a revenue generating asset. The Garden Island asset
can also be used to offset the requirement for new funding or be used to reduce debt as required.
The business has experienced a very significant cultural reset, which is to be expected considering the past twelve months and the
road into, and emergence from administration. Reflecting on the past two years and the process of coming back from the brink
has served to teach us painful but important lessons that are not soon forgotten. The board members and key staff have used
this learning to bring the business back from administration as we believe in Carnegie and in wave energy. Through this process
the Board and the team have become even more invested and have proven that they are committed to Carnegie’s ultimate
success. Anthony Shields, a long time Carnegie supporter and long-time shareholder joins as a new non-executive director and
welcome team member. Jonathan Fiévez is also recognised having provided critical leadership and guidance as we developed a
plan to achieve future success and bring the company back from administration to be reinstated on the ASX. The Board has
confidence and fully support Jonathan and believe in his leadership, technical abilities and the team he has built to deliver on the
goals and objectives set-out for the business.
Carnegie’s culture change extends to how we will do business in the future, where the business will live and how carefully we will
spend shareholder funds. The goal is to continuously strive to achieve more for less. Jonathan’s new team is much smaller and
now focused solely on CETO, related wave energy technologies and development of commercial strategies to deliver future
revenues and shareholder value. Building on this new more frugal and efficient culture, the team will need to have a laser focus
on delivering the key milestones presented in the two-year Recapitalisation Proposal. This frugality will also extend to corporate
spending. For example, the Board will remain small and each board member will be taking an increasingly active role in the
governance and guidance of the business. As an example of this frugality, you’ll notice that this annual report is simplified with
more basic graphic design, images and binding. These types of publications cost a lot of money and the shareholder funds are
better spent on technical development and on customer marketing materials.
As I have communicated to many of you over the past year, the Board and management are committed to keeping shareholders
informed of our progress against the milestones presented in the Recapitalisation Proposal, this will include both the good news
and the bad news, the achievements and the set-backs.
There is much to do over the coming year, and we are fortunate and privileged to be able to restart the Carnegie Clean Energy
business and extend gratitude again to our long term and new shareholders who invested and helped make this rebirth possible.
The Board has the responsibility to ensure that these new shareholder funds are spent wisely and effectively, and we take this
responsibility seriously. I look forward to the coming year and to presenting Carnegie’s progress and future prospects at the
upcoming AGM and in subsequent communications and shareholder meetings.
Terry Stinson
Chairman
CARNEGIE CLEAN ENERGY
v
Company Overview
Carnegie is an Australian incorporated ASX-listed 100% owner and developer of the CETO wave energy technology intellectual
property (CETO Technology) which converts ocean wave energy into zero-emission electricity. From 2008 to 2016, Carnegie’s
sole focus was on developing the CETO Technology, pursuant to which the team was dedicated to advancing the CETO
Technology and developing site applications both in Australia and internationally. This period culminated in the deployment of
the 5th generation of the CETO Technology (being the CETO 5 Units) at Garden Island in Western Australia.
In April 2016, Carnegie commenced a diversification of its business with an acquisition of a 35% interest in Energy Made Clean Pty
Ltd (EMC Co), the holder of the assets and undertakings comprising the EMC Business. In December 2016, Carnegie increased its
investment to 100% ownership of EMC Co. Carnegie was unable to achieve the desired level of financial performance from the
EMC Business due to a combination of factors, including EMC Co’s array of challenging projects, onerous joint venture
arrangements and legacy contracts.
On 14 March 2019, the Company appointed Richard Tucker and John Bumbak of KordaMentha Restructuring as voluntary
administrators of the Company and certain subsidiaries, including EMC. Mooney & Partners (a Shareholder associated with Non-
Executive Director, Mr Grant Mooney) and Asymmetric Credit Partners Pty Ltd (a secured creditor of the Company holding CCE
Notes associated with Proposed Director, Mr Anthony Shields) presented the Administrators with a proposal to restructure and
recapitalise Carnegie to return to being a wave energy business through a deed of company arrangement. At Carnegie’s second
meeting of creditors held on 17 April 2019, creditors resolved in favour of the deed of company arrangement. At EMC’s second
meeting of creditors held on 17 April 2019, creditors voted to put EMC into liquidation.
Carnegie released a Prospectus on 31 July 2019 outlining its new business strategy and plans and detailing the Entitlement Offer
and other Offers that formed part of Carnegie’s Recapitalisation. On 23 September 2019 Carnegie announced the successful
completion of the capital raising, which raised the required $5.5 million to enable Carnegie to re-emerge from administration.
Review of Operations
CETO Wave Energy Technology
During much of the year, Carnegie’s wave energy team was working to advance the design of the CETO 6 unit, illustrated
below, and conducting site development activities in Albany as part of the Albany Wave Energy Project (AWEP), with a view
to offshore installation of a CETO Unit and associated onshore infrastructure.
Illustration of the CETO Unit
The AWEP formally commenced in 2017 with support from the State of Western Australia through the Department of Primary
Industries and Regional Development (DPIRD) and the Commonwealth Government through the Australian Renewable Energy
Agency (ARENA). Following a series of events beginning with proposed changes to the R&D tax incentive scheme, DPIRD
vi
CARNEGIE CLEAN ENERGY
introduced a requirement for Carnegie to provide evidence that it was financially capable of delivering the project and had
the expertise and operational capacity to carry out the AWEP. The information provided by Carnegie specifically relevant to
its financial capability to fund the project did not satisfy DPIRD, leading to termination of the funding agreement with DPIRD
in March 2019 and the DPIRD funding being withdrawn. Carnegie’s inability to satisfy the funding requirement was primarily
due to the unsatisfactory financial performance of the EMC Business, coupled with difficulties in obtaining additional capital.
As a result of the withdrawal of the DPIRD funding, the Company has no current intention to proceed with AWEP. However,
the Company continues to collaborate with the Wave Energy Research Centre at Albany and intends to maintain its licence in
good standing. If the Company successfully implements its business strategy and successfully develops a commercial
prototype CETO Unit, the Company and/or customers and partners may reconsider the Albany site for commercial
deployment (in conjunction with other possible sites) due to the favourable conditions in Albany.
Throughout the year, regardless of political and financial challenges, Carnegie’s wave team have continued diligently
working on the development of the CETO technology. Carnegie continued strengthening its collaborative relationship with
Enel Green Power (EGP) throughout the year including hosting EGP in Perth and being invited to present at Enel’s internal
marine energy conference in Italy.
Following the decision not to proceed with the Albany Wave Energy Project, the team focus shifted from delivering a CETO
6 Unit at Albany to focusing on the best way to deliver on the company’s long-term objectives for delivering the CETO
technology. This has included identifying and pursuing the key innovation and development opportunities outlined as part
of the digital development pathway in the Recapitalisation Proposal. The team is already actively progressing along this new
pathway. For instance, the Machine Learning work outlined in the Recapitalisation Proposal is already advancing well and is
already providing promising results as was demonstrated in the August webinar and town hall meetings.
Following completion of the Recapitalisation Proposal, Carnegie will pursue its revised business strategy focusing on undertaking
concentrated research and development activities to optimise the CETO Unit design, by applying machine learning (artificial
intelligence), new low-cost electrical generators, optimised system configuration and modern hydrodynamic approaches. The new
approach being undertaken is outlined further in the Future Business Strategy and Plans Section.
Garden Island Microgrid (GIMG)
During the year, Carnegie completed the commissioning of its 2MW solar PV installation and 2MW/0.5MWh battery energy
storage system constructed by EMC and which is the subject to an arrangement with the Department of Defence (DoD). The
GIMG is located at Fleet Base West/HMAS Stirling and operates under a 15-year agreement with the DoD for the supply of
electricity to HMAS Stirling. The first period concludes in May 2022 but may be extended by two further option terms of five
years each. A water supply agreement is also in place to facilitate water sales from the associated desalination plant that is
co-located with the solar-battery system.
The GIMG received the Approval to Operate from Western Power in late June 2019 and in late July received final sign-off
from DoD and commenced operations.
Garden Island Microgrid
Northam Solar Farm
In early 2019, the Northam Solar Farm received approval to operate from Western Power and commenced operating
and exporting to the grid. During the year, Carnegie also completed a partial sale of its interest in the Northam Solar
Farm to Indigenous Business Australia. As part of the administration process, Carnegie’s remaining interest in the
Northam Solar Farm will not carry forward to the recapitalised Carnegie and the proceeds from the sale of Carnegie’s
CARNEGIE CLEAN ENERGY
vii
interest will be received into the Creditor’s Trust.
EMC
During the year, the EMC business was focused on delivering key projects such as the Northam Solar Farm, Delamere Microgrid
and Garden Island Microgrid and progressed several other projects through its Joint Venture with Lendlease.
Carnegie was unable to achieve the desired level of financial performance from the EMC Business due to a combination of factors,
including EMC Co’s array of challenging projects, onerous joint venture arrangements and legacy contracts. The financial
performance of the EMC Business consumed capital that could have been utilised in pursuing the development of the CETO
Technology. As such, during 2018, Carnegie progressed towards a divestment of the EMC Business to MPower Limited (formerly
TAG Pacific Limited). However, on 30 November 2018, the agreement to divest the EMC Business was terminated following the
counterparty not satisfying key conditions to the transaction.
Carnegie continued in its efforts to dispose of the EMC Business. Prior to the appointment of the Administrators in March 2019,
Carnegie had been conducting a sale process for the EMC Business and held discussions with potential acquirers but had not
received any firm proposals. The failure of the EMC Business to deliver profits and the incidence of losses on a number of key
projects forced Carnegie to consider seeking further capital from shareholders and the investment market in order to fund its
overall business operations and corporate overheads.
On 14 March 2019, the Company appointed Richard Tucker and John Bumbak of KordaMentha Restructuring (Administrators) as
voluntary administrators of the Company and certain subsidiaries, including EMC Co. At the meeting of EMC Creditors on 17 April
2019, EMC was placed into liquidation. Accordingly, EMC is currently in liquidation and will no longer form part of Carnegie.
Future Business Strategy and Plans
Carnegie is returning to its pure focus on wave energy and is now pursuing a revised business strategy focusing on:
i.
ii.
iii.
iv.
v.
undertaking concentrated research and development activities to optimise the CETO Unit design, by applying machine
learning (artificial intelligence), new low-cost electrical generators, optimised system configuration and modern
hydrodynamic approaches;
within the next 18 months, constructing a complete virtual prototype CETO Unit incorporating the design improvements
detailed below;
over the next two years, pursuing a partnership with an OEM or other commercial partners to contribute funding and
expertise to decrease the costs of producing CETO Units to a competitive level and increase market opportunities in the
long term;
in the next two to three years, identify and engage with utility scale partners to construct and/or utilise CETO Units on a
commercial scale; and
ultimately generating shareholder value through royalty or license agreements in respect to the CETO Technology.
CETO Development
Building upon the significant intellectual property accrued to date, Carnegie will continue to pursue the development of the CETO
Technology along the following streams:
a)
improvement in yield and reduction of costs using artificial intelligence and, more specifically, machine learning
techniques;
b) electrification of the PTO generation system and enhancement of the associated rotary translation system, which
converts the linear motion of the buoy into rotary motion suitable for an electrical generator;
c) enhancement of the computational models and linking them into a complete virtual prototype whereby the full system
can be near-realistically simulated under most, if not all scenarios;
d) electric PTO subsystem testing and wave tank testing of the technology;
e) seek partnerships with industry participants, capable of improving efficiencies in key components such as the foundation
f)
and mooring systems; and
collaboration with a development partner or technology licensee to prepare the next deployment site, probably either
in Australia or in Europe, to demonstrate the new generation of the CETO Unit.
Carnegie will seek to further develop some innovations that recently became more tangible. These include the use of machine
learning (a subset of artificial intelligence), advanced electrical generators derived from the electric vehicle sector and adaptive
hydrodynamic techniques. The Company will seek to integrate these innovations into the CETO Technology with an aim to reducing
viii
CARNEGIE CLEAN ENERGY
project and technology costs and increasing power production - to achieve the benefits of reducing the capital demands of a
demonstration project and creating a more competitive product. The latter part is critical to ensure the CETO Unit has the potential
to follow the deployment rates of the successful offshore wind industry that has more than 22,000 MW of deployed capacity and
deployed approximately 5,000 MW in 2018. Within the next 18 months, Carnegie seeks to deliver an improved CETO 6 Unit design,
integrating these innovations and demonstrating performance improvement.
Within the next two years, Carnegie intends to pursue a partnership with a large OEM to contribute funding and expertise to
decrease the costs of producing CETO Units to a competitive level and increase market opportunities in the long term. Carnegie
aims to mitigate the capital demands on Carnegie with respect to the development and commercialisation of the CETO Technology
through such partnerships.
In the medium to long term and subject to the delivery of the virtual CETO prototype, Carnegie will seek to derive value from CETO
Technology by entering into license fee or royalty arrangements in respect of the CETO Technology. Carnegie will also seek out
partners to construct and/or utilise CETO Units on a commercial scale.
Targeted CETO development pathway
Carnegie will also continue to seek relationships with key industry participants who have assisted in the CETO Technology
development. The Company will seek to utilise collaboration alliances with CSIRO / Pawsey, University of Western Australia, Enel
Green Power and the University of Edinburgh to assist in the development of the CETO Technology. Carnegie has continued
collaborating with Enel Green Power since the end of the Financial Year and will seek to further strengthen its collaboration with
Enel over the coming year. Enel Green Power has demonstrated a keen interest in the wave energy sector and are likely to have
a significant role to play in the industry in the coming years. Additionally, Carnegie has been consulting to various marine energy
proponents and will continue to seek to develop this potential income stream.
“Stable, predictable and always available: marine energy has enormous potential distributed evenly around
the world. Enel Green Power continues to explore the marine energy sector in search of effective, competitive
and scalable technologies to transform tides and waves into sustainable energy”
-
Antonio Cammisecra, CEO of Enel Green Power
CARNEGIE CLEAN ENERGY
ix
Garden Island Microgrid (GIMG)
Carnegie will also continue operating the Garden Island Microgrid with an aim to provide power sales revenue and strengthen the
value of the asset. Electricity and water supply agreements with the DoD are in place to allow the sale of power and water from
the solar-battery and desalination systems owned by Carnegie. GIMG retains the facility to connect future wave energy device
output and facilitate the sale of the power generated.
To strengthen the asset value and maximise profit, Carnegie will pursue extension of the relevant supply agreements, reduction
in operation and maintenance costs, and optimisation of the operation of the battery system.
Other Assets
Carnegie retains offshore lease areas and infrastructure off Garden Island (the site of the previous Perth Wave Energy Project)
and Carnegie’s corporate office and research facility in North Fremantle. Carnegie will continue to maintain these sites for both
its own testing and development purposes as well as for collaborations with industry partners who are seeking to test and
demonstrate either relevant enabling technologies or other wave energy converters.
Corporate Governance
Carnegie Clean Energy Limited is a wave energy technology development company. The Company has established procedures to
encourage and maintain a culture of good corporate governance. The Board is responsible for establishing the Company's
corporate governance framework, the key features of which are set out in this report. In establishing its corporate governance
framework, the Board has referred to the 4th edition of the ASX Corporate Governance Councils' Corporate Governance Principles
and Recommendations which come into effect for the financial year ended 30 June 2021. However, the Company has chosen to
adopt the 4th Edition of Corporate Governance Policies and Procedures early.
The corporate governance statement set out in this report discloses the extent to which the Company is following the
recommendations as at the date of this report. The Company follows each recommendation where the Board has considered the
recommendation to be an appropriate benchmark for its corporate governance practices. Where the Company's corporate
governance practices follow a recommendation, the Board has made appropriate statements reporting on the adoption of the
recommendation. In compliance with the "if not, why not" reporting regime, where, after due consideration, the Company's
corporate governance practices do not follow a recommendation, the Board has explained its reasons for not following the
recommendation and disclosed what, if any, alternative practices the Company will adopt instead of those in the recommendation.
Unless otherwise stated, the practices detailed in this statement have been in place for the entire reporting period ended 30 June
2019.
Governance-related documents can be found on the Company's website at www.carnegiece.com, under the menu "About Us -
Corporate Information” and within the section marked "Corporate Governance".
Compliance with Corporate Governance Principles and Recommendations
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
The listing entity should disclose:
(a) the respective roles and responsibilities of its board and management; and
(b) those matters expressly reserved to the board and those delegated to management.
The Company complies with this recommendation. A policy on matters reserved for the Board is outlined in the "Matters Reserved
for Board Approval" document and is available on the Company's website. The Company has established clear details of the roles
and responsibilities of each of its board management members.
Recommendation 1.2
A listed entity should:
(a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for
election, as a director; and
x
CARNEGIE CLEAN ENERGY
(b) provide security holders with all material information in its possession relevant to a decision on whether or not to
elect or re-elect a director.
The Company complies with this recommendation. The Company has a policy for the evaluation of the Board and Senior Executives
in accordance with the Board and Senior Executives Evaluation Policy. The appointment of any director is subject to subsequent
approval by shareholders at the next Annual General Meeting of the Company. Meeting materials for such meeting incorporates
all relevant details to assist shareholders in deciding whether or not to elect or re-elect that director.
Recommendation 1.3
A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.
The Company complies with this recommendation. Prior to the formal appointment of any director, a written agreement is entered
into between the Company and the director setting out the terms and conditions of their appointment.
Recommendation 1.4
The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with
the proper functioning of the board.
The Company complies with this recommendation.
Recommendation 1.5
A listed entity should:
(a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set
measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s
progress in achieving them;
(b) disclose that policy or a summary of it; and
(c) disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the
board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards
achieving them, and either;
(d) the respective proportions of men and women on the board, in senior executive positions and across the whole
organisation (including how the entity has defined “senior executive” for these purposes); or
(e) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender
Equality Indicators”, as defined in and published under the Act.
The Company does not comply with this recommendation. The Company has not yet set measurable objectives for achieving
diversity. The Board continues to monitor diversity across the organisation and is satisfied with the current level of gender diversity
within the Company. Due to the size of the Company, the Board does not consider it appropriate at this time to formally set
objectives for gender diversity. The Company currently employs (including on a consulting basis) 11 staff (3 females and 8 males).
The Company recognises that a diverse and talented workforce is a competitive advantage and that the Company’s success is the
result of the quality and skills of our people. The Company’s policy on diversity is to employ the right person for the right job
regardless of their gender, age, nationality, race, religious beliefs, cultural background, sexuality or physical ability.
Recommendation 1.6
A listed entity should:
(a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual
directors; and
(b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting
period in accordance with that process.
The Company complies with this recommendation. A detailed review of the performance of each director is undertaken
subsequent to the end of the financial year by the Chairman and with the assistance of an independent consultant and confirmed
CARNEGIE CLEAN ENERGY
xi
in the Annual Report. Results from the assessment are then considered by independent consultant and a report provided back to
the Board for consideration with recommendations for implementation.
Recommendation 1.7
A listed entity should:
(a) have and disclose a process for periodically evaluating the performance of its senior executives; and
(b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting
period in accordance with that process.
The Company complies with this recommendation. On an annual basis the Company undertakes a review of the senior executives
which is confirmed in the Annual Report.
Principle 2: Structure the board to add value
Recommendation 2.1
The board of a listed entity should:
(a) have a nomination committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director; and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout the period and
the individual attendances of the members at those meetings; or
(b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board
succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience,
independence and diversity to enable it to discharge its duties and responsibilities effectively.
The Company complies with this recommendation. A Nomination Committee has been established with members being Michael
Fitzpatrick (Chairman), Grant Mooney and Terry Stinson has since been appointed to the Committee. It is anticipated that Terry
Stinson will step down from the Committee and be replaced by proposed director Anthony Shields.
Recommendation 2.2
A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has
or is looking to achieve in its membership.
The Company complies with this recommendation. The Board has undertaken an assessment of its mix of skills using a skills matrix
to assess strengths and identify weaknesses. A summary of the blend of skills is set out below:
Expertise
Renewable energy
Infrastructure
Industrial & manufacturing
Engineering
Minerals & Mining
Capital Markets
Research & Development
Industry
Renewable energy
Power & electricity
Capital markets
Mineral exploration and mining
Technology and R&D
Construction
Infrastructure
Qualifications
Business & accounting
Management
Science
Engineering
The skills, experience and expertise of each of the Company's directors are set out in the Directors’ Report.
Recommendation 2.3
A listed entity should disclose:
xii
CARNEGIE CLEAN ENERGY
(c) the names of the directors considered by the board to be independent directors;
(d) if a director has an interest, position, association or relationship of the type described in Box 2.3 of the 3rd edition of
the ASX Corporate Governance Councils' Corporate Governance Principles and Recommendations but the board is of
the opinion that it does not compromise the independence of the director, the nature of the interest, position,
association or relationship in question and an explanation of why the board is of that opinion; and
(e) the length of service of each director.
The Company complies with this recommendation. Non-Executive Directors Terry Stinson and Grant Mooney are considered
Independent Directors. The length of service of each Director is set out in this report. Director Mike Fitzpatrick and proposed
director Anthony Shields may be considered not independent due to their Convertible Note and substantial shareholdings in the
Company at completion of the Offer.
Recommendation 2.4
A majority of the board of a listed entity should be independent directors.
The Company does not comply with this recommendation. Only 50% of the Board of Directors are considered to be independent
(Grant Mooney and Terry Stinson). It is the view of the Directors that the involvement of key stakeholders at Board level such as
Anthony Shields and Mike Fitzpatrick is in the best interests of Shareholders given their commitment to the Company through the
process of administration and their corporate and industry experience.
Recommendation 2.5
The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the
CEO of the entity.
The Company complies with this recommendation.
Recommendation 2.6
A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities
for directors to develop and maintain the skills and knowledge needed to perform their role as directors efficiently.
The Company complies with this recommendation. The Company has established a process for induction of new directors and
where possible, provides each director with opportunities for professional development such that they can improve their
effectiveness as directors of the Company.
Principle 3: Instil a culture of acting lawfully, ethically and responsibly
Recommendation 3.1
A listed entity should articulate and disclose its values.
The Company complies with this recommendation. The Company has established a code of conduct and a code of ethics which
are available on the Company's website.
Recommendation 3.2
A listed entity should:
(a) have and disclose a code of conduct for its directors, senior executives and employees; and
(b) ensure that the board or a committee of the board is informed of any material breaches of that that code.
The Company complies with this recommendation. The Company has established a code of conduct for all directors, senior
executives and employees which is actively monitored by the Board for performance against it and which is available on the
Company's website.
Recommendation 3.3
A listed entity should:
(a) have and disclose whistleblower policy; and
CARNEGIE CLEAN ENERGY
xiii
(b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy.
The Company does not comply with this recommendation as the Board doesn’t believe it is of such a size to justify such a policy
and that such matters contrary to the code of Conduct and Ethics can be raised directly with the Board of Directors.
Recommendation 3.4
A listed entity should:
(a) have and disclose an anti-bribery and corruption policy; and
(b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy.
The Company complies with this recommendation.
Principle 4: Safeguard integrity in corporate reports
Recommendation 4.1
The board of a listed entity should:
(a) have an audit committee which:
(1) has at least three members, all of whom are non-executive directors and a majority of whom are
independent directors; and
(2) is chaired by an independent director, who is not the chair of the board, and disclose:
(3) the charter of the committee;
(4) the relevant qualifications and experience of the members of the committee; and
(5) in relation to each reporting period, the number of times the committee met throughout the period and the
individual attendances of the members at those meetings; or
(6) if it does not have an audit committee, disclose that fact and the processes it employs that independently
verify and safeguard the integrity of its corporate reporting, including the processes for the appointment
and removal of the external auditor and the rotation of the audit engagement partner.
The Company complies with this recommendation. The Company has policies for Audit Committee Charter and the External
Auditor Selection. A copy of these policies are provided on the Company's website. Details of the audit committee meetings are
provided in this report.
Recommendation 4.2
The board of the listed entity should, before it approves the entity's financial statements for a financial period, receive from its CEO
and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial
statements comply with the appropriate accounting standards and give a true and fair view of the financial position and
performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal
control which is operating effectively.
The Company complies with this recommendation. The Board receives assurance from the Chief Executive Officer and the Chief
Financial Officer and/or the Company Secretary that the declaration in relation to section 295A of the Corporations Act is founded
on a sound system of risk management and internal control and that the system is operating effectively in all material respects in
relation to financial reporting risks. The Company also has a separate policy in relation to Risk Management which is available on
the Company's website.
Recommendation 4.3
A listed entity should disclose its process to verify the integrity of any periodic corporate report it releases to the market that is not
audited or reviewed by an external auditor.
xiv
CARNEGIE CLEAN ENERGY
The Company complies with this recommendation. Any such periodic corporate report that is not audited shall disclose details of
whether or not and to what extent any independent audit has taken place.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1
A listed entity should:
(a) have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and
(b) disclose that policy or a summary of it.
The Company complies with this recommendation. The Company has a Continuous Disclosure policy which is set out on the
Company's website.
Recommendation 5.2
A listed entity that gives a new substantive investor or analyst presentation should release a copy of the presentation materials on
the ASX Market Announcements Platform ahead of the presentation.
The Company complies with this recommendation.
Recommendation 5.3
A listed entity should ensure that its board receives copies of all material market announcements promptly after they have been
made.
The Company complies with this recommendation.
Principle 6: Respect the rights of security holders
Recommendation 6.1
A listed entity should provide information about itself and its governance to investors via its website.
The Company complies with this recommendation. A summary of the Company's Corporate Governance policies is set on the
Company's website.
Recommendation 6.2
A listed entity should design and implement an investor relations program to facilitate effective two-way communication with
investors.
The Company complies with this recommendation. The Company has established an investor relations program to ensure effective
communications between the Company and shareholders and investors. The Company has a Shareholder Communication Policy
which is set out on the Company website.
Recommendation 6.3
A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of
security holders.
The Company complies with this recommendation. The Company has a Shareholder Communication Policy which is set out on the
Company website.
Recommendation 6.4
A listed entity should ensure that all substantive resolutions at a meeting of security holders are decided by a poll rather than by a
show of hands.
The Company complies with this recommendation.
Recommendation 6.5
CARNEGIE CLEAN ENERGY
xv
A listed entity should give security holders the option to receive communications from, and send communications to, the entity and
its security registry electronically.
The Company complies with this recommendation. The Company provides the option to shareholders to receive communications
electronically, notification of this option is provided by the Company registry.
Principle 7: Recognise and manage risk
Recommendation 7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director;
And disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout the period and
the individual attendances of the members at those meetings; or
(b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it
employs for overseeing the entity’s risk management framework.
The Company complies with this recommendation.
The Company has an Audit Committee which, pursuant to its charter has the responsibility for:
monitoring corporate risk assessment and the internal controls instituted.
monitoring the establishment of an appropriate internal control framework, including information systems, and considering
enhancements.
reviewing external audit programs/reports to ensure that where deficiencies in controls or procedures have been identified,
appropriate remedial action is taken by management.
In addition, the Company’s Board of Directors actively manage risk by addressing risks associated with the Company’s business
operations regularly during board meetings and at intervals where any such risk is raised by management.
Recommendation 7.2
The board or a committee of the board should:
(a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and
(b) disclose, in relation to each reporting period, whether such a review has taken place.
The Company does not comply with this recommendation as no separate review was undertaken during the year. However, The
Board met regularly throughout the year and considered risks as well as any risks that were raised independently by the Audit
Committee. During the year, the Board of Directors met regularly and actively monitored the financial position of the Company
to ensure it remained in a position of solvency at all times leading up to the appointment of Administrators.
Recommendation 7.3
A listed entity should disclose:
(a) if it has an internal audit function, how the function is structured and what role it performs; or
(b) if it does not have an internal audit function, that fact and the processes it employs for evaluation and continually
improving the effectiveness of its risk management and internal control processes.
xvi
CARNEGIE CLEAN ENERGY
The Company does not comply with this recommendation. The Directors are of the view that given the size of the Company, it is
not practical to have an internal audit function and that risk management is undertaken by the Board and senior management.
Recommendation 7.4
A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and,
if it does, how it manages or intends to manage those risks.
The Company does not comply with this recommendation. The Directors are of the view that given the Company's size, risks are
addressed directly by the Board, senior management and Audit Committee and are not disclosed externally.
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The board of a listed entity should:
(a) have a remuneration committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director;
and disclose
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout the period and
the individual attendances of the members at those meetings; or
(b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and
composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate
and not excessive.
The Company complies with this recommendation. The Company has a Remuneration Committee and policies for the
Remuneration Committee Charter, the Senior Executives Remuneration and Non-Executive Director remuneration. A copy of
these policies are provided on the Company's website.
Recommendation 8.2
A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the
remuneration of executive directors and other senior executives.
The Company complies with this recommendation. The Company has separate policies relating to the remuneration of non-
executive directors as opposed to senior executives. These policies provide a basis for distinguishing the type of remuneration
which is suitable for the two classes.
Recommendation 8.3
A listed entity which has an equity-based remuneration scheme should:
(c) have a policy on whether participants are permitted to enter into transaction (whether through the use of derivatives
or otherwise) which limit the economic risk of participating in the scheme; and
(d) disclose that policy or a summary of it.
The Company complies with this recommendation. The Company has a Securities Trading Policy which, among other things, sets
out the Company's policy on trading the Company's securities. A copy of this policy is on the Company's website.
CARNEGIE CLEAN ENERGY
xvii
CARNEGIE CLEAN ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY
ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
FINANCIAL REPORT
FOR THE YEAR ENDED
30 JUNE 2019
1
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
CONTENTS
_____________________________________________________________________________________________
Page No.
DIRECTORS' REPORT ......................................................................................................... 3
AUDITOR’S INDEPENDENCE DECLARATION .... ……………………… ….……………. 15
STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME ...... 16
STATEMENT OF FINANCIAL POSITION .......................................................................... 18
STATEMENT OF CHANGES IN EQUITY .......................................................................... 19
STATEMENT OF CASH FLOWS ....................................................................................... 20
NOTES TO THE FINANCIAL STATEMENTS .................................................................... 21
DIRECTORS' DECLARATION............................................................................................ 66
INDEPENDENT AUDITOR’S REPORT………………………………………………….……67
2
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2019
The Directors present their report on Carnegie Clean Energy Limited, Subject to Deed of Company Arrangement,
Administrators appointed ("the Company", or “Carnegie”) and its controlled entities, ("the Consolidated Group”, or
“Group") for the financial year ended 30 June 2019.
DIRECTORS
The Directors of the Company in office at any time during or since the end of the financial year are:
Terry Stinson B.Bus Admin (Magnum Cum Laude) (Chairman) – appointed 15 November 2017
Mr Stinson has over 30 years of executive leadership experience with innovation companies globally. He was
formerly the Chief Executive Officer and Managing Director of Orbital Corporation Ltd. He was previously also a
Vice President and General Manager at Siemens AG responsible for overseeing an international business across
multiple sites, over 1,200 staff and delivering sales in excess of US $300m p.a. Mr Stinson was also previously
CEO and MD at Synerject, VP Manufacturing OMC, Director Advanced R&D Product and Process Mercury
Marine, division of Brunswick Corp, Project Engineer LT-5 Corvette engine, USA SME 1990 Young Engineer of
the Year, and leadership positions supporting various international ventures with Yamaha, Honda, Chrysler,
Penske and others. Mr Stinson is a non-executive director of Orbital and is also non-executive chair of Talga
Resources Ltd since 9 February 2017.
Michael Fitzpatrick B.Eng (Hons), B.A (Hons), M.A (Oxon) (Non-Executive Director) – appointed 28 November
2012
Mr Fitzpatrick has over 40 years in the financial services sector. He is past Chairman of the Pacific Current Group
(formerly Treasury Group Limited) as well as the Australian Football League. He also holds several non-executive
directorships, including Infrastructure Capital Group and Latam Autos Limited.
In 1994 Mr Fitzpatrick founded Hastings Funds Management Ltd (‘Hastings’), the pioneering infrastructure asset
management company where he was Managing Director until he sold his interest in 2005. Hastings was then one
of the largest managers of infrastructure and alternative assets in Australia (including infrastructure, high yield
debt, private equity and timberland) managing investments of approximately A$3.8 billion. Mr Fitzpatrick was a
director of several Hastings’ managed investments, including Pacific Hydro Limited, Global Renewables Limited,
Utilities of Australia, Australian Infrastructure Fund and Australia Development Group Pty Ltd (the holding
company of Perth Airport).
Mr Fitzpatrick is a former chairman of Victorian Funds Management Corporation, and the Australian Sports
Commission, a former director of Rio Tinto Limited and Rio Tinto plc, a former member of the Melbourne Park
Tennis Centre Trust, a former director of the Carlton Football Club and a former director of the Walter & Eliza Hall
Institute of Medical Research.
Mr Fitzpatrick has a Bachelor of Engineering with Honours from the University of Western Australia and a
Bachelor of Arts with Honours and a Masters of Arts from Oxford University where he was the 1975 Rhodes
Scholar from Western Australia.
Grant Jonathan Mooney B.Bus, CA (Non-executive Director and Company Secretary) – appointed 19 February
2008 Mr Mooney is the principal of Perth-based corporate advisory firm Mooney & Partners, specialising in
corporate compliance administration to public companies. Mr Mooney has gained extensive experience in the
areas of corporate and project management since commencing Mooney & Partners in 1999. His experience
extends to advice on capital raisings, mergers and acquisitions and corporate governance. Currently, Mr Mooney
serves as a Director to several ASX listed companies across a variety of industries including technology and
resources. He is a Director of Gibb River Diamonds Limited, appointed 14 October 2008, Barra Resources
Limited, appointed 29 November 2002, Accelerate Resources Limited, appointed 1 July 2017, Talga Resources
Limited, appointed 20 February 2014 and Riedel Resources Limited appointed 31 October 2018. Mr Mooney is
also a member of Chartered Accountants in Australia and New Zealand.
3
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2019
Mark Woodall – resigned 30 November 2018
Mr Woodall has been a leader in the development and financing of renewable energy and clean technologies for
nearly 25 years. He founded and led two specialist investment banking firms focused on the low carbon economy:
Impax Capital (1994) and Climate Change Capital (2002). He has been the adviser, investor or principal in over
90 clean technology transactions with total capital deployed of over US$4.5 billion.
Michael Edward Ottaviano (Chief Executive Officer and Managing Director) – resigned effective 30 September
2018
Dr Ottaviano has been responsible for the leadership of the company and oversight of all aspects of the business
management including the commercialisation of the CETO wave power and the Energy Made Clean business
activities. Dr Ottaviano has previously worked in research and development and consulted in technology and
innovation management. He has advised companies on new product development, intellectual property and
technology commercialisation across various industries and ranging from start-ups to large multi-nationals.
He is a former Board Member of the Clean Energy Council, Australia’s clean energy peak industry group, was a
member of the Australian Government’s Energy White Paper Consultative Committee and a non-executive director
of ASX-listed hearing technology start up, Nuheara Limited (resigned 4 July 2018). He is currently a director of
Western Australia’s Film and TV funding development organisation Screenwest. Dr Ottaviano has a Bachelor of
Engineering, a Masters of Science and a Doctorate in Business Administration.
At the date of this report, the direct and indirect interests of the Directors in the shares and options of the Company
were:
Terry Stinson
Michael Fitzpatrick (i)
Grant Jonathan Mooney (ii)
Michael Edward Ottaviano (resigned 30 September 2018) (iii)
Mark Woodall (resigned 30 November 2018)
ORDINARY
SHARES
-
125,365,359
2,628,278
-
-
OPTIONS
-
-
-
-
-
i. Mr M Fitzpatrick is a Director of Log Creek Pty Ltd and therefore is deemed to have an interest in 125,365,359
ordinary shares held by Log Creek Pty Ltd <88 Green Ventures A/C>. In addition, Log Creek Pty Ltd <88
Green Ventures A/C> holds 100 convertible notes with a face value of $1,000,000 convertible into shares at
4.0c (refer to note 16(ii)).
ii. Mr G J Mooney is a Director of Mooney & Partners Pty Ltd and therefore is deemed to have an interest in
2,628,278 ordinary shares held by Mooney & Partners Pty Ltd of which he is a director and shareholder.
Michael Ottaviano resigned on 30 September 2018 and held 35,000,000 shares which, subsequent to his
departure were returned to the Company’s treasury pursuant to the existing Management Incentive Equity
Plan. At the time of issue on 25 November 2013, these shares had a value of $871,471.
iii.
COMPANY SECRETARY
Mr Grant Jonathan Mooney held the position of company secretary at the end of the financial year.
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Group during the year were the development of the CETO Wave Energy
Technology and the development of the Energy Made Clean solar, battery and microgrid business. Following the
appointment of Administrators on 14 March 2019, the Company returned its focus to the development of the CETO
Wave Energy Technology.
4
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2019
OPERATING RESULTS
The consolidated loss of the Consolidated Group for the financial year ended 30 June 2019 was $51,930,513
(2018: consolidated loss $63,349,694).
DIVIDENDS
The Directors do not recommend the payment of a dividend for the financial year ended 30 June 2019. No dividends
were paid during the financial year.
REVIEW OF OPERATIONS
During the year, the Consolidated Group took significant steps to advance and restructure its business including:
CETO Wave Energy Technology
• Carnegie achieved its first milestone under the €1 million Enel Green Power Collaboration Agreement and
received the associated milestone payment on 2 January 2019.
•
• Carnegie continued to progress the development of the CETO 6 technology, including advancing major
innovation opportunities which have potential to improve the performance of CETO through greater energy
capture, more efficient conversion into electricity, higher system reliability, and reduction in cost.
In October, Carnegie received a $2.625 million milestone payment from the WA State Government as part of
a variation to the first $5.25 million AWEP project milestone. The Company was requested to provide a plan
to WA State Government concerning its ability to fund the balance of the project expenditures. The funding
plan was submitted subsequent to 31 December 2018. On 12 March 2019, the State Government of Western
Australia terminated the Albany Funding Agreement.
• Garden Island Microgrid was completed. Commissioning occurred subsequent to the end of the financial
year.
• The Company adopted a less capital-intensive digital development approach that will seek to leverage on
advances in machine learning (a subset of artificial intelligence) and computational power. Leveraging
advancing and accepted computational design tools, the Company going forward would utilise the acquired
knowledge of its staff and seek to build a digital prototype of an improved, more competitive CETO Unit.
Carnegie’s revised approach would seek to integrate elements of machine learning, advanced electrical
machines and advanced hydrodynamics into the prototype, with an aim of bringing the CETO Unit power
production costs down the cost curve far more rapidly than incremental in-sea deployments. Carnegie will
seek to validate the prototype by small scale testing in order to accurately demonstrate the performance,
behaviour and cost of the full-scale design and thereby providing the Company with sufficient evidence to
present a business case to existing collaborators and/or new partners.
Energy Made Clean (EMC)
• The Northam Solar Farm commenced exporting power to the grid and received Approval to Operate from
Western Power. In addition, the solar and battery microgrid at the Delamere Air Weapons Range in the
Northern Territory of Australia achieved Practical Completion. The Company sold a further 38.7% interest in
the project to partner Indigenous Business Australia (IBA) retaining a remaining 11.3% interest in the project.
The remaining interest was sold post year end.
• Carnegie and Tag Pacific Limited (Tag) terminated the Sale and Purchase Agreement executed in June 2018
for the sale of EMC.
• On 14 March 2019 EMC was placed into voluntary administration. After holding meetings with creditors, the
Administrators are taking steps to liquidate EMC.
5
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2019
Corporate
• On 28 September 2018, Mr Jonathan Fievez was appointed as the Chief Executive Officer of Carnegie
following the resignation of Dr Michael Ottaviano as Managing Director.
• Non-Executive Director Mr Mark Woodall retired as a Director of Carnegie at the Annual General Meeting on
•
30 November 2018.
In November 2018, Carnegie implemented a $2 million unsecured finance facility to provide funding for
operations. The facility has been provided by HFM Investments Pty Ltd, a company controlled by director Mr
Michael Fitzpatrick. Prior to the Company entering administration, $1.15 million was drawn on the facility.
• On 14 March 2019, the Directors placed the Company and its subsidiaries EMC Co Pty Ltd, Energy Made
Clean Pty Ltd and EMC Engineering Australia Pty Ltd into voluntary administration.
• On 17 March 2019, a Funding Agreement was entered into with Mooney & Partners Pty Ltd and Asymmetric
Credit Partners Pty Ltd (Funding Parties) to facilitate a recapitalisation of the Company by providing funding
of $500,000 to meet costs during the recapitalisation process.
• On 17 April 2019, creditors unanimously accepted a restructuring plan to recapitalise the Company and relist
on the Australian Securities Exchange. The plan, outlined in a Deed of Company Arrangement (DoCA),
provided for a recapitalisation of the Company, a restructure of its statement of financial position and a
readmission to quotation on the ASX following a capital raising.
• On 15 May 2019, the Administrators announced that Carnegie executed the DoCA with the Funding Parties.
This followed the unanimous creditor support received for the DoCA at a meeting of creditors held on 17 April
2019.
• The DoCA (once complete) extinguishes certain pre-administration creditor claims and converts a proportion
of Carnegie's debt to equity, with a portion of residual debt being restructured and carrying over to the
recapitalised Carnegie in the form of new convertible notes maturing in 2021.
• Pursuant to the DoCA, Carnegie would lodge a prospectus to complete a capital raising of not less than $5
million. Of the funds raised, up to $1.4 million is to be contributed towards the DoCA for the costs of the
administration, priority (employee) creditors in full (100c/$) and Participating Creditors up to 10c/$. Upon
completion of the DoCA, Mr Anthony Shields would join the board as a Non-Executive Director.
• On 26 June 2019 the Company announced the change of auditors from Crowe Horwarth to HLB Mann Judd.
FINANCIAL POSITION
The net assets of the Consolidated Group decreased by $51.84 million from $61.23 million to $9.39 million as at 30
June 2019. This is predominantly the result of a $37.9 million impairment of the CETO and Garden Island Microgrid
assets and $8.95 million write-off of Energy Made Clean Pty Ltd and related subsidiaries and related assets, and
an increase in short term borrowings of $1.65 million.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
The following significant changes in the state of affairs of the Consolidated Group occurred during the financial year:
• The Company was placed into Administration together with its subsidiary company Energy Made Clean Pty
Ltd and associated subsidiaries. As a result, the Company remained in Administration (subject to a Deed
of Company Arrangement) at the end of the Financial Year.
6
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2019
SIGNIFICANT EVENTS SUBSEQUENT TO YEAR END
The following events occurred subsequent to the end of the financial year:
1. Convertible Note Facility Agreements
On 22 October 2019, the Company entered into two convertible note facility agreements (Convertible Note
Facility Agreements) with the following parties:
i.
ii.
HFM Investments Pty Ltd (HFM) to the value of $1.15 million; and
existing noteholders holding convertible notes to the value of $4.5 million (CCE Noteholders).
Utilisation under the Convertible Note Facility Agreements is subject to satisfaction of conditions precedent.
A summary of the material terms of the Convertible Note Facility Agreements is as follows:
a) HFM and CCE Noteholders subscribe for the 2021 Notes to the value of $2,850,000. The commitment
amount will be utilised in satisfaction of 50% of the debt owing to HFM and the CCE Noteholders;
d)
e)
b) each 2021 Note will have a face value of A$25,000;
c) each 2021 Note will convert into Shares at $0.00125 per Share, with each Share being issued with one
free attaching Option exercisable at $0.0015 per Option, expiring three years from the date of issue (with
both the Shares and Options being subject to voluntary escrow for six months from the date of issue);
the Company shall repay the 2021 Notes on 31 March 2021 (Repayment Date);
the Company must pay interest on the 2021 Notes at a rate of 8% per annum (Coupon Rate), with an
issue price of the greater of $0.001 or the 90 day VWAP calculated prior to the relevant interest payment
date, being the date that is one year from the date of issue of the 2021 Notes, each of 31 March, 30 June,
30 September and 31 December thereafter and on 31 March 2021 (Interest Payment Dates);
the Lenders may elect to convert all or part of the 2021 Notes and the accrued interest to Shares any
time between one year after the 2021 Notes are issued and prior to the Repayment Date, by providing
notice to the Company; and
if at any time after the date of the Convertible Note Facility Agreements there occurs any reconstruction
of the issued capital of the Company then the entitlement of the Lenders to convert the 2021 Notes and
any amount of interest owing, then unconverted, shall be reconstructed in a manner that is consistent
with the ASX Listing Rules and in the same proportion and manner as any reconstruction of the issued
capital of the issue.
g)
f)
2. General Security Agreement
On 22 October 2019, pursuant to the terms of the DOCA, the Company entered into a General Security
Agreement (GSA). Under the terms of the GSA:
(a)
(b)
the Lenders, being the CCE Noteholders and HFM will be granted a security interest over all present
and after acquired property of the Company; and
the Company will utilise its best endeavours to seek consent from the DoD to obtain a valid charge over
the Garden Island Microgrid.
The GSA will be granted over all of the assets and undertakings of the Company, save that the security over the
GIMG asset will only apply following grant of the consent of the Department of DoD but at all times apply to any
proceeds from the GIMG asset.
7
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2019
3. Entitlement Issue
On 31 July 2019, the Company lodged a prospectus with ASIC to facilitate the recapitalisation of the Company
as contemplated under the DoCA . The following offers were made under the prospectus:
i.
ii.
iii.
iv.
a non-renounceable pro rata entitlement offer of four (4) New Shares for every one (1) Share held by
Eligible Shareholders at an issue price of $0.001 per New Share to raise a minimum of $5,500,000 (before
costs) and a maximum of approximately $11,525,810 (before costs);
An offer of 500,000,000 New Shares together with 500,000,000 free attaching New Options to the
Proponents (and/or their nominees) to the DOCA, being Asymmetric Credit Partners Pty Ltd (a company
associated to proposed director Anthony Shields) and Mooney & Partners Pty Ltd (a company associated
with director Grant Mooney); and
An offer of 113 Convertible Notes (2021 Notes) each with a face value of $25,000 to the CCE Noteholders
and HFM (and/or their nominees).
The Offer closed on 18 September 2019 and on 23 September 2019 the Company announced to ASX
that it had raised the required $5.5 million to meet the minimum subscription level and was working
towards meeting the remaining conditions in order to have its securities reinstated to quotation on ASX.
4. General Meeting of Shareholders
At the Company’s General Meeting of Shareholders held on 30 August 2019 all resolutions were passed to
proceed with current Entitlement Offer and Recapitalisation Proposal.
5. Garden Island Microgrid
On 23 August 2019, the Company announced that the Garden Island Microgrid (GIMG) had commenced
operations following approval from the Department of Defence. With approvals in place from Department of
Defence and Western Power (received in late June), Carnegie had officially powered up the system and
commenced producing clean renewable energy for HMAS Stirling, Australia’s largest naval base. Carnegie
subsequently announced on 12 September 2019 that it had submitted its first invoice for the sale of power to
Department of Defence.
With the exception of the above, no other matters or circumstances not otherwise dealt with in this report or the
consolidated financial statements, have arisen since the end of the financial year which significantly affected, or
may significantly affect, the operations of the Consolidated Group, the results of those operations or the state of
affairs of the Consolidated Group in subsequent financial years.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
The 2019 financial year saw the Company placed into Administration together with its subsidiary company Energy
Made Clean Pty Ltd (EMC) and associated subsidiaries. As a result, the Company remained in Administration at
the end of the Financial Year. The Company is currently undergoing a recapitalisation by way of a DoCA whereby
the Company will remove the loss making business of EMC and associated subsidiaries and seek reinstatement to
quotation on ASX and return its focus to development and commercialisation of its leading CETO wave energy
technology.
ENVIRONMENTAL ISSUES
The Consolidated Group is required to carry out its activities in accordance with the laws and regulations in the
areas in which it undertakes its activities. There have been no known significant breaches of these laws and
regulations.
8
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2019
SHARE OPTIONS
At the date of this report, there were:
• 10,000,000 options outstanding in respect of unissued ordinary shares to the current Chief Executive
Officer, exercisable at 1.6 cent per share on or before 10 October 2021 and
• 35,000,000 options outstanding in respect of unissued ordinary shares exercisable at 6 cents per share on
or before 8 February 2023.
INDEMNIFYING OFFICERS
During or since the year end, the Company has given an indemnity or entered an agreement to indemnify, or paid
or agreed to pay insurance premiums as follows:
• The Company has paid premiums to insure the Directors against certain risks they are exposed to as
Directors of the Company; and
• The Company has agreed to grant Directors a right of access to certain Company Records.
The Company has paid premiums to insure each Director against liabilities for costs and expenses incurred by them
in defending any legal proceedings arising out of their conduct while acting in the capacity of a Director of the
Company, other than conduct involving a wilful breach of duty in relation to the Company. The amount of the
premiums was $93,389.
REMUNERATION REPORT - AUDITED
This report details the nature and amount of remuneration for each Director of Carnegie Clean Energy Limited and
other Key Management Personnel (KMP) being the Chief Executive Officer.
REMUNERATION POLICY
The remuneration policy of Carnegie Clean Energy Limited has been designed to align KMP objectives with
shareholder and business objectives by providing a fixed remuneration component and offering specific long-
term incentives based on key performance areas affecting the Consolidated Group’s financial results. The Board
of Carnegie Clean Energy Limited believes the remuneration policy to be appropriate and effective in its ability to
attract and retain the best KMP to run and manage the Consolidated Group, as well as create goal congruence
between KMP and shareholders.
The Board’s policy for determining the nature and amount of remuneration for KMP of the Consolidated Group is
as follows:
The remuneration policy, setting the terms and conditions for the Executive Directors and other senior executives,
was developed by the Remuneration Committee after seeking professional advice from independent external
consultants. The Company’s Remuneration Committee benchmarks the Company’s salaries payable to senior
management by reference to independent industry data to ensure that the Company is consistent with prevailing
market conditions. All executives receive a base annual salary (which is based on factors such as length of
service and experience). The Remuneration Committee, in consultation with the Board of Directors, has chosen
to adopt an equity-based approach to remunerating executive staff and employees. The Company utilised the
Employee Share Option Plan as adopted by shareholders in November 2010 (most recently re-affirmed by
shareholders in November 2016) as the mechanism by which options may be issued to executive management
and staff to adequately incentivise these individuals.
9
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2019
REMUNERATION REPORT – AUDITED (CONTINUED)
The Remuneration Committee reviews executive packages annually by reference to the Consolidated Group’s
performance, executive performance and comparable information from industry sectors and other listed
companies in similar industries and then considers the justification of any salary review or participation in the
Employee Share Option Plan.
The performance of executives is measured against criteria agreed annually with each executive and is based
predominantly on the past year’s growth in shareholders’ value over the financial year and by contrast with its
peers and industry sector. All incentives must be linked to predetermined performance criteria. The policy is
designed to attract the highest calibre of executives and reward them for performance that results in long-term
growth in shareholder wealth.
The Board policy is to remunerate non-executive Directors at market rates for time, commitment and
responsibilities. The Executive Directors determine payments to the non-executive Directors and review their
remuneration annually, based on market practice, duties and accountability. Independent external advice is
sought when required. No remuneration consultants were used during the year. The maximum aggregate fees
that can be paid to non-executive Directors is subject to approval by shareholders at the Annual General Meeting.
Fees for non-executive Directors are not linked to the performance of the Consolidated Group.
Company Performance, Shareholder Wealth and KMP Remuneration
Revenue
2015
$
1,716,516
2016
$
1,729,797
Net loss after tax
(4,784,050)
(6,349,387)
2017
$
4,845,575
(14,382,63
8)
2018
$
10,045,707
2019*
$
534,034
(63,349,694)
(51,930,513)
Share price at year end
0.045
0.030
0.057
0.024
0.0*
* The Company was in suspension on the ASX at year end, so no share price was quoted.
The remuneration for each KMP of the Consolidated Group paid during the year was as follows:
Details of Remuneration for Year Ended 30 June 2019
* Mark Woodall’s remuneration includes consultancy fees of $12,000 paid to Tallarook Ltd, a company associated
with Mark Woodall.
*** Fees include company secretarial fees of $35,000 paid to Mooney & Partners Pty Ltd for company secretarial
services, a company associated with Grant Mooney.
10
Cash salary, leave paid and feesNon Cash Benefits% of Remuneration Performance BasedTerry Stinson83,077$ -$ 7,892$ 90,969$ -$ -$ - Mark Woodall*37,433$ -$ 2,416$ 39,849$ -$ -$ - Michael Fitzpatrick39,808$ -$ 3,782$ 43,590$ -$ -$ - Michael Ottaviano396,604$ -$ 20,531$ 417,135$ -$ -$ - Grant Mooney***74,808$ -$ 3,782$ 78,590$ -$ -$ - Jonathan Fievez239,383$ -$ 22,285$ 261,668$ -$ 10,000$ 3.80%Total871,113$ -$ 60,688$ 931,801$ -$ 10,000$ 1.07%Actual rewards received in the periodShort-term benefitsPost Employment Benefits - SuperTotalOther long term benefitsShare based payments
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2019
REMUNERATION REPORT – AUDITED (CONTINUED)
Options Issued as Part of Remuneration for the Year Ended 30 June 2019
10,000,000 options were issued to Chief Executive Officer Jonathan Fievez during the year. The options have an
exercise price of $0.016 per share and expire on 10 October 2021.
Details of Remuneration for Year Ended 30 June 2018
* Mark Woodall’s remuneration includes consultancy fees paid to Tallarook Ltd, a company associated with Mark
Woodall.
** John Davidson’s remuneration includes $378,000 in redundancy payments.
*** Fees include company secretarial fees paid to Mooney & Partners Pty Ltd, a company associated with Grant
Mooney.
@ Kieran O’Brien’s remuneration includes consultancy fees paid to Utility Advisory Services Pte Ltd, a company
associated with Kieran O’Brien.
Employment Contracts of KMP
The employment conditions of KMP are formalised in Service Contracts.
The Company has entered into an executive services agreement with Mr Jonathan Fievez on 27 September 2018
in respect of his employment as the CEO of the Company. The principal terms of the executive services agreement
are as follows:
(i) Mr Fievez receives a base salary of $250,000 per annum, excluding mandatory superannuation
contributions;
(ii) a cash bonus of up to 30% of the annual gross salary may be payable annually at the discretion of the
Directors.
(iii) the issue of 10 million options, exercisable at 1.6 cents per share on or before 10 October 2021. On 10
October 2018 these were issued;
(iv) express provisions protecting the Company’s confidential information and intellectual property;
(v) Mr Fievez may terminate the agreement by giving 3 months’ notice in writing to the Company; and
(vi) the Company may terminate the agreement (without cause) by giving Mr Fievez 3 months’ notice in writing
(or make payment in lieu of notice), unless the Company is terminating as a result of serious misconduct
(or other similar grounds) by Mr Fievez, in which case no notice is required.
11
Cash salary, leave paid and feesNon Cash Benefits% of Remuneration Performance BasedJeffrey Harding43,576$ -$ 4,139$ 47,715$ -$ -$ - Terry Stinson69,231$ -$ 6,928$ 76,158$ -$ -$ - Mark Woodall*88,942$ -$ 3,320$ 92,262$ -$ -$ - Michael Fitzpatrick57,500$ -$ 5,462$ 62,962$ -$ -$ - Michael Ottaviano588,005$ 33,444$ 20,048$ 641,497$ 6,576$ -$ 1.03%John Davidson**730,698$ 18,582$ 20,937$ 770,217$ -$ -$ - John Leggate46,834$ -$ -$ 46,834$ -$ -$ - Grant Mooney***120,500$ -$ 5,462$ 125,962$ -$ -$ - Kieran O'Brien@112,961$ -$ -$ 112,961$ -$ -$ - Greg Allen270,171$ -$ 20,059$ 290,230$ -$ -$ - Total2,128,418$ 52,026$ 86,355$ 2,266,799$ 6,576$ -$ 0.29%Actual rewards received in the periodShort-term benefitsPost Employment Benefits - SuperTotalOther long term benefitsShare based payments
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2019
REMUNERATION REPORT – AUDITED (CONTINUED)
The Company has entered into deeds of variation to non-executive director appointment letters with each of Messrs
Terry Stinson, Mike Fitzpatrick and Grant Mooney and a non-executive director appointment letter with proposed
director Mr Anthony Shields. Messrs Fitzpatrick, Mooney and Shields will each receive an annual remuneration of
$40,000 (exclusive of mandatory superannuation contributions and GST) while Mr Stinson (Chairman) shall receive
$60,000 per annum (exclusive of mandatory superannuation contributions and GST). The changes to the
remuneration of the existing Directors will take effect on and from effectuation of the DOCA.
Their appointment shall cease if:
(a)
(b)
the non-executive Director resigns;
at the close of any general meeting of Shareholders at which a resolution of their re-election is not approved;
and
the non-executive Director is removed as a director in accordance with the Corporations Act or the
Constitution.
(c)
The Company has entered into an agreement for the provision of Company secretarial services by Mooney &
Partners Pty Ltd, a company associated with director Mr Grant Mooney. The agreement provides for the provision
of Company Secretarial Services to the Company for $48,000 per annum plus statutory superannuation. Both Mr
Mooney and the Company can terminate the agreement by giving 3 months’ notice to either party.
Termination payments are generally not payable on resignation or dismissal for serious misconduct. In the instance
of serious misconduct the Company can terminate employment at any time. Termination payments are in
accordance with the Corporations Act 2001.
Options and Rights Holdings
Movement in equity settled options held by KMP is detailed below:
Balance
30 June 2018
Granted as
Compensation
5,000,000
15,000,000
-
-
Options
expired
unexercised
5,000,000
15,000,000
-
10,000,000
-
Michael Fitzpatrick
Grant Mooney
Jonathan Fievez
Net Change
Other
Balance
30 June 2019
-
-
-
-
-
-
10,000,000
10,000,000
Total
20,000,000
10,000,000
20,000,000
Details of equity settled options for KMP outstanding at balance date are as follows:
KMP
Vested No. Granted No. Grant Date Value per
Option at
Grant
Date
Exercise
Price
First
Exercise
Date
Last
Exercise
Date
Jonathan Fievez
10,000,000 10,000,000 25 Nov 2018 0.10 cent 1.6 cents 10 Oct 2018 10 Oct 2021
Terms & Conditions for Each Grant
All options were granted for nil consideration.
12
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2019
REMUNERATION REPORT – AUDITED (CONTINUED)
Shareholdings
Number of Shares held by KMP
Balance
30 June 2018
125,365,359
2,628,278
-
35,000,000
162,993,637
Received as
Compensation
-
-
-
-
-
Options
Exercised
-
-
-
-
-
Net Change
Other
Balance
30 June 2109
-
-
-
(35,000,000)
125,365,359
2,628,278
-
-
(35,000,000)
127,993,637
Upon cessation of employment, these shares have been returned to the Company in accordance with the
provisions of the Management Incentive Equity Scheme and Mortgage charge.
Michael Fitzpatrick
Grant Mooney
Jonathan Fievez
Michael Ottaviano*
Total
*
DIRECTORS' MEETINGS
There were 22 Directors' meetings held during the financial year ended 30 June 2019. Attendances were as follows:
Director
Terry Stinson
Grant Mooney
Michael Fitzpatrick
Michael Ottaviano
(Resigned 30 September
2018)
Mark Woodall
(Resigned 30 November
2018)
Directors
Audit Committee
No. Meetings
attended
22
22
20
9
14
No. Meetings held
during time in
office
22
22
22
9
15
No. Meetings
attended
N/A
3
3
N/A
2
No. Meetings
held during time
in office
N/A
3
3
N/A
2
There were also 5 circular resolutions passed by the Board of Directors during the financial year.
END OF REMUNERATION REPORT
NON-AUDIT SERVICES
Neither the current or previous external auditors were engaged for non-audit services during the financial year ended
30 June 2019.
13
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2019 has been received and can be found on
page 15.
Signed on 25 October 2019 in accordance with a resolution of the Board of Directors.
GRANT J. MOONEY
Director
14
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Carnegie Clean Energy Limited
(Subject To Deed Of Company Arrangement, Administrators Appointed) for the year ended 30
June 2019, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
25 October 2019
N G Neill
Partner
15
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE
INCOME FOR YEAR ENDED 30 JUNE 2019
Note
Consolidated Group
Continuing Operations:
Revenue
Sales revenue
Net loss on derivatives not designated as hedging instruments
Net gain on financial instruments at fair value through profit and
loss
Net research and development grant received
Other income
2
31
2
Cost of Goods Sold
Cost of sales - solar, battery energy storage systems, &
microgrids
Gross Profit
Expenses
Bad and doubtful debts
Consultancy expenses
Company secretarial expenses
Depreciation and amortisation expense
Employee and Directors expenses
Employee Share based payments
Fair value of additional shares and options issued
Finance costs
Impairment costs
Occupancy expense
Research expenses
Write-off of intangibles (other than goodwill)
Administrative expenses
Interest expense
Other expenses from ordinary activities
Loss before income tax
Income tax benefit/(expense)
Loss after tax from continuing operations
3
5
16
12,13(a)
13(b)
4
2019
$
534,034
-
-
-
22,316
556,350
2018
$
94,942
(8,300)
428,669
378,067
810,306
1,703,684
(176,298)
380,052
-
1,703,684
(41,310)
(263,082)
(35,000)
(250,991)
(2,479,505)
(10,000)
-
-
(38,284,415)
(452,083)
(178,174)
-
(1,519,716)
(232,081)
-
(43,366,305)
-
(43,366,305)
(4,651)
(467,237)
(63,000)
(117,784)
(3,074,877)
(3,352)
(1,783,158)
(1,019,617)
(31,310,570)
(570,046)
(79,380)
(3,623,698)
(1,327,075)
-
(4,319)
(41,745,080)
-
(41,745,080)
Loss from discontinued operations
30
(8,564,208)
(21,604,614)
Loss after tax from continuing and discontinuing operations
(51,930,513)
(63,349,694)
Other comprehensive income
Exchange differences on translating overseas controlled entities
and foreign currencies
Income tax relating to components of other comprehensive
income
Total comprehensive loss for the year
16
85,971
(43,358)
-
(51,844,542)
-
(63,393,052)
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE
INCOME FOR YEAR ENDED 30 JUNE 2019 (CONTINUED)
Loss attributable to:
Members of the parent entity
Total comprehensive loss attributable to:
Members of the parent entity
Earnings per share from continuing operations
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Earnings per share from discontinued operations
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Not
e
Consolidated Group
2019
$
2018
$
(51,930,513)
(63,349,694)
(51,844,542)
(63,393,052)
7
7
7
7
(1.51)
(1.51)
(1.56)
(1.56)
(0.30)
(0.30)
(0.81)
(0.81)
The accompanying notes form part of these financial statements.
17
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative assets
Assets held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Other financial assets
Property, plant and equipment
Intangibles
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Short-term provisions
Short-term borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables
Derivatives
Long-term provisions
Long-term borrowings
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
Consolidated Group
2018
2019
$
$
8
9
29
31
32
9
10
12
13
14
15
16
14
30
15
16
255,606
713,291
-
-
200,868
1,169,765
8,436,530
5,012,448
464,937
9,750
-
13,923,665
1,945,306
12,414
2,675,949
15,000,000
19,633,669
778,835
12,414
14,443,068
49,900,000
65,134,317
20,803,434
79,057,982
5,253,825
69,329
6,039,987
11,363,141
-
-
49,484
-
49,484
7,383,500
991,764
722,827
9,098,091
64,576
18,050
564,867
8,087,047
8,734,540
11,412,625
17,832,631
9,390,809
61,225,351
17
18
194,460,984
900,268
(185,970,443)
9,390,809
194,460,984
4,574,255
(137,809,888)
61,225,351
The accompanying notes form part of these financial statements.
18
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2019
Issued
Capital
185,212,910 (75,199,473)
Accumulated
Losses
Foreign
Currency
Reserve
7,655
Convertible
Note/Option
Reserve
2,905,885
Consolidated Group
Balance at 01 July 2017
Comprehensive loss
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
Transactions with owners
Share capital issued during the year
Capital raising costs
Equity portion of convertible notes
Transfer of equity portion of
convertible note on exercise
Share based payment expense
Transfer of expired share-based
payments
Total transactions with owners
Total
112,926,977
(63,349,694)
(43,358)
(63,393,052)
9,527,443
(279,369)
1,600,000
840,000
3,352
- (63,349,694)
-
-
-
(43,358)
(43,358)
- (63,349,694)
9,527,443
(279,369)
-
-
-
-
-
-
-
-
-
9,248,074
739,279
739,279
-
-
-
-
-
-
-
-
-
-
-
-
1,600,000
840,000
3,352
(739,279)
1,704,073
-
11,691,426
Balance at 30 June 2018
194,460,984
(137,809,888)
(35,703) 4,609,958
61,225,351
Balance at 01 July 2018
Comprehensive loss
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
Transactions with owners
Options issued during the year
Transfer expired options
Transfer lapsed notes
Total transactions with owners
194,460,984
(137,809,888)
(35,703)
4,609,958
61,225,351
-
-
-
-
-
-
-
(51,930,513)
-
(51,930,513)
-
85,971
85,971
-
-
-
(51,590,513)
85,971
(51,844,542)
-
2,169,958
1,600,000
3,769,958
-
-
-
10,000
10,000
(2,169,958)
(1,600,000)
(3,759,958)
-
-
10,000
Balance at 30 June 2019
194,460,984
(185,970,443)
50,268
850,000
9,390,809
The accompanying notes form part of these financial statements.
19
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CASH FLOWS FOR YEAR ENDED 30 JUNE 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Interest received
Interest paid
Payments to suppliers and employees
Receipts from R&D Tax Rebate
Receipts from Government grant funding
Net cash used in by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for development of asset
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Net proceeds from acquisition of subsidiaries
Net cash (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issue of shares (net of costs)
Net proceeds from issue of convertible notes
Net proceeds from borrowings
Repayment of borrowings
Loss of control of subsidiaries – cash no longer available
Net cash (used in)/provided by financing activities
Net (decrease)/increase in cash held
Cash and cash equivalents at beginning of financial year
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at end of financial year
8
Note
Consolidated Group
2019
$
2018
$
4,839,045
27,468
(236,652)
(14,057,910)
2,157,137
2,887,500
(4,383,412)
14,607,765
130,067
(502,048)
(25,783,089)
2,648,408
1,704,913
(7,193,984)
23
(1,669,148)
(79,714)
4,709
-
(1,744,153)
(2,013,183)
(9,509,006)
760,741
807,274
(9,954,174)
-
1,650,000
600,000
(1,400,000)
(2,903,359)
(2,053,359)
(8,180,924)
8,436,530
-
255,606
5,004,916
-
4,423,305
-
-
9,428,221
(7,719,937)
16,202,143
(45,676)
8,436,530
The accompanying notes form part of these financial statements.
20
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Carnegie Clean Energy Limited (“the Company”) is a company domiciled in Australia. The consolidated financial
statements of the Company as at and for the twelve months ended 30 June 2019 comprise the Company and its
subsidiaries (“the Group”). The consolidated financial statements incorporate the financial statements of the
Company and entities controlled by the Company and its subsidiaries. Control is achieved when the Company:
• has power over the investee;
•
is exposed, or has rights, to variable returns from its involvement in with the investee; and
• has the ability to its power to affect its returns.
The Company reassess whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements listed above
The separate financial statements of the Company, Carnegie Clean Energy Limited, have not been presented within
this financial report as permitted by the Corporations Act 2001. The Group is a ‘for profit’ entity for financial reporting
purposes under Australian Accounting Standards.
The consolidated financial statements were authorised for issue by the Board of Directors on 25 October 2019.
Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards (AASB), adopted by the Australian Accounting Standards Board and the Corporations Act
2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial
report containing relevant and reliable information about transactions, events and conditions to which they apply.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with
International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial
report are presented below. They have been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
New and amended accounting standards and interpretations
The Group has adopted all new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of
these Accounting Standards and Interpretations did not have any significant impact on the financial performance or
position of the Consolidated Group.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
Going concern
The consolidated financial statements have been prepared on a going concern basis which contemplates the
realisation of assets and the settlement of liabilities in the normal course of business.
The Company is currently under administration following the appointment of administrators Korda Mentha on 14
March 2019. The Company has entered into a Deed of Company Arrangement (DoCA) which provides for a
recapitalisation of the Company and a reinstatement of trading of the Company’s securities on ASX, subject to a
number of conditions being met including the raising a minimum of $5.5 million in cash to fund the business pursuant
to the prospectus dated 31 July 2019. On 23 September 2019, the Company announced it had raised the required
funds of $5.5 million and was working towards meeting the remaining conditions as set out by ASX and the DoCA
such that the DoCA can be effectuated in the near term.
At the date of execution of the Financial Report, the Directors were confident that the remaining outstanding terms
would be met and that the DoCA would be effectuated in the near term allowing the Company to exit the
administration process and be reinstated to ASX.
If the DoCA is not effectuated, there exists circumstances that gives rise to a material uncertainty that may cast doubt
whether the Company can realise its assets and extinguishing of its liabilities in the ordinary course of business as it
would likely to proceed into liquidation.
21
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Joint Operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the assets and obligations for the liabilities, relating to the arrangement. The Consolidated Group has
recognised its share of jointly held assets, liabilities, revenues and expenses of joint operations. These have
been incorporated in the financial statements under the appropriate classifications.
Accounting Policies
Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by
Carnegie Clean Energy Limited at the end of the reporting period. A controlled entity is any entity over which
Carnegie Clean Energy Limited has the power to direct the activities of the entity and is exposed to, or has
rights to, variable returns from its involvement. Control will generally exist when the parent owns, directly or
indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to
govern, the existence and effect of holdings of actual and potential voting rights are also considered.
Where controlled entities have entered or left the Group during the year, the financial performance of those
entities are included only for the period of the year that they were controlled. A list of controlled entities is
contained in Note 11 to the financial statements. During the year some group entities were deconsolidated
as control was lost at the date of administration for entities that are currently in the process of liquidation.
In preparing the consolidated financial statements, all inter-group balances and transactions between
entities in the Consolidated Group have been eliminated on consolidation. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent
entity.
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and
deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated
using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax
liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the
relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the
profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets
also result where amounts have been fully expensed but future tax deductions are available. No deferred
income tax will be recognised from the initial recognition of an asset or liability, excluding a business
combination, where there is no effect on accounting or taxable profit or loss
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at
reporting date. Their measurement also reflects the manner in which management expects to recover or
settle the carrying amount of the related asset or liability.
22
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Tax (continued)
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and liability
will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists,
the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability will occur in future periods in which
significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
Carnegie Clean Energy Limited has not formed a tax consolidated group with its Australian wholly owned
subsidiaries. As such each entity is responsible for accounting for its own current and deferred tax
amounts. Any unused tax losses and unused tax credits are therefore quarantined at each entity and are
unavailable to the remainder of the Group.
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess
of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the
expected net cash flows that will be received from the asset’s employment and subsequent disposal. The
expected net cash flows have been discounted to their present values in determining recoverable
amounts.
The cost of fixed assets constructed within the Consolidated Group include the cost of materials, direct
labour, borrowing costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
group and the cost of the item can be measured reliably. All other repairs and maintenance are charged
to the income statement during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including capitalised lease assets is depreciated on a straight-
line basis over their useful lives to the Consolidated Group commencing from the time the asset is held
ready for use.
The depreciation rates used for each class of depreciable asset are:
Class of Fixed Asset
Depreciation Rate
Plant and equipment
1.0% – 50.0%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each Statement
of Financial Position 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.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
gains and losses are included in the income statement. When revalued assets are sold, amounts
included in the revaluation reserve relating to that asset are transferred to retained earnings.
23
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the
asset, but not the legal ownership, is transferred to entities in the consolidated group are classified as
finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to
the fair value of the leased property or the present value of the minimum lease payments, including any
guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and
the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or
the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor,
are charged as expenses in the periods in which they are incurred.
Financial Instruments
Applicable to 30 June 2019
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset
expire, or when the financial asset and substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured
at the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value
adjusted for transaction costs (where applicable).
For the purpose of subsequent measurement, financial assets, other than those designated and effective
as hedging instruments, are classified into the following categories:
amortised cost
fair value through profit or loss (FVTPL)
equity instruments at fair value through other comprehensive income (FVOCI)
debt instruments at fair value through other comprehensive income (FVOCI).
•
•
•
•
All income and expenses relating to financial assets that are recognised in profit or loss are presented
within finance costs, finance income or other financial items, except for impairment of trade receivables
which is presented within other expenses.
the entity’s business model for managing the financial asset
the contractual cash flow characteristics of the financial asset.
The classification is determined by both:
•
•
All income and expenses relating to financial assets that are recognised in profit or loss are presented
within finance costs, finance income or other financial items, except for impairment of trade receivables
which is presented within other expenses.
24
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial Instruments (continued)
Applicable to 30 June 2018
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity
becomes a party to the contractual provisions of the instrument. For financial assets, this is equivalent to
the date that the company commits itself to either the purchase or sale of the asset (i.e. trade date
accounting is adopted).
Amortised cost is calculated as:
a. The amount at which the financial asset or financial liability is measured at initial recognition;
b. Less principal repayments;
c. Plus or minus the cumulative amortisation of the difference, if any, between the amount initially
recognised and the maturity amount calculated using the effective interest method; and
d. Less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the relevant
period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts
(including fees, transaction costs and other premiums or discounts) through the expected life (or when
this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying
amount of the financial asset or financial liability. Revisions to expected future net cash flows will
necessitate an adjustment to the carrying value with a consequential recognition of an income or expense
in profit or loss.
The Group does not designate any interests in subsidiaries or associates as being subject to the
requirements of accounting standards specifically applicable to financial instruments.
i.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market and are subsequently measured at
amortised cost.
ii.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not
suitable to be classified into other categories of financial assets due to their nature, or they
are designated as such by management. They comprise investments in the equity of other
entities where there is neither a fixed maturity nor determinable payments.
iii.
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently
measured at amortised cost.
iv. Derivatives not designated as hedging instruments
Forward sale contracts for large scale generation certificates are recognised when the
entity becomes a party to the contractual provisions to the instrument. The Group has
not designated these hedging instruments and recognises the fair value gain or loss on
these instruments at each balance date through the statement of profit or loss.
25
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Financial Instruments (continued)
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques
are applied to determine the fair value for all unlisted securities, including recent arm’s length
transactions, reference to similar instruments and option pricing models.
The fair value measurement of forward sales contracts is based on the presumption that the transaction
to sell the large- scale generation certificates takes place either:
In the principal market for the asset or liability; or
In the absence of a principal market, in the most advantageous market for the asset or liability
•
•
At each reporting date, the Group assesses whether there is objective evidence that a financial instrument
has been impaired. In the case of available-for-sale financial instruments, a significant or prolonged decline
in the value of the instrument is considered to determine whether an impairment has arisen. Impairment
losses are recognised in the income statement.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset
is transferred to another party whereby the entity no longer has any significant continuing involvement in
the risks and benefits associated with the asset. Financial liabilities are derecognised where the related
obligations are either discharged, cancelled or expired. The difference between the carrying value of the
financial liability extinguished or transferred to another party and the fair value of consideration paid,
including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. Where appropriate they are subsequently measured at amortised cost using the effective interest
method.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting
date, the loans or borrowings are classified as non-current.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in
the statement of financial position, net of transaction costs.
On the issue of convertible notes the fair value of the liability component is determined using a market rate for
an equivalent non-convertible bond and this amount is carried as a financial liability on the amortised cost
basis until extinguished on conversion or redemption. The increase in the liability due to the application of the
effective interest method is recognised as a finance cost. The remainder of the proceeds are allocated to the
conversion option. Where the conversion option meets the definition of equity, it is recognised and included in
shareholders’ equity, net of transaction costs. The carrying amount of the conversion option is not remeasured
in the subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.
Finance Costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the period in which they are incurred, including:
•
•
•
interest on bank overdrafts;
interest on short-term and long-term borrowings; and
interest on finance leases.
26
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Impairment of Assets including Goodwill
At the end of each reporting period, the Group assesses whether there is any indication that an asset may
be impaired. The assessment will include the consideration of external and internal sources of information
including dividends received from subsidiaries or associates. If such an indication exists, an impairment
test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the
asset’s fair value less costs to sell and value in use, to the asset’s carrying value. Any excess of the
asset’s carrying value over its recoverable amount is expensed immediately in the profit or loss unless
the asset is carried at a re-valued amount in accordance with another accounting standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for intangible assets with indefinite lives, including for goodwill.
Impairment is determined for goodwill by assessing the recoverable amount of each cash-generating unit
(“CGU”) or group of CGUs to which the goodwill relates. When the recoverable amount of the CGU is less
than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot
be reversed in future periods.
Intangible Asset – Acquired Intellectual Property and Development Costs
An intangible asset arising from externally acquired intellectual property and development expenditure on
an internal project is recognised only when the Group can demonstrate the technical feasibility of
completing the intangible asset so that it will be available for use or sale, its intention to complete and its
ability to use or sell the asset, how the asset will generate future economic benefits, the availability of
resources to complete the development and the ability to measure reliably the expenditure attributable to
the intangible asset during its development. Following the initial recognition of acquired intellectual
property and the development expenditure, the cost model is applied requiring the asset to be carried at
cost less any accumulated amortisation and accumulated impairment losses.
The carrying value of an intangible asset arising from acquired intellectual property and development
expenditure is tested for impairment annually when the asset is not yet available for use or has an indefinite
life, or more frequently when an indication of impairment arises during the reporting period.
Acquired intellectual property and development cost in respect of an asset available for use that has a
finite life is amortised over the asset’s useful life.
The amortisation rates used for each class of intangible asset are:
Class of Intangible Asset
Microgrid/battery technology development asset
Useful Life
7 years
Foreign Currency
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are presented
in Australian dollars which is the parent entity’s functional and presentation currency.
27
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Transaction and balances
Exchange differences arising on the translation of monetary items are recognised in the income statement,
except where deferred to equity as a qualifying cash flow or net investment hedge.
Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to
balance date. Employee benefits that are expected to be settled within one year have been measured at the
amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later
than one year have been measured at the present value of the estimated future cash outflows to be made for
those benefits.
The cost of cash-settled transactions is initially and at each reporting date until it is vested, determined by
applying the Black-Scholes option pricing model, considering the terms and conditions on which the benefit
was granted, and to the extent to which employees have rendered service to date. The cumulative cost
recognised until settlement is a liability and the periodic determination of this liability is as follows:
At each reporting date between grant and settlement, the fair value of the benefit is determined
(a) During the vesting period, the liability recognised at each reporting date is the fair value of the benefit at that
date multiplied by the expired portion of the vesting period;
(b) From the end of the vesting period until settlement, the liability recognised is the full fair value of the liability at
the reporting date; and
(c) All changes in the liability are recognised in profit or loss for the period.
For shares acquired under limited recourse loans, the Group is required to recognise within the income
statement a remuneration expense measured at the fair value of the shares inherent in the issue to the eligible
person, with a corresponding increase to a share-based payments reserve in equity. The fair value is measured
at grant date and recognised when the eligible person becomes unconditionally entitled to the shares,
effectively on grant. A loan receivable is not recognised.
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic benefits will result, and that outflow can be reliably
measured.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and deposits held at call with banks.
28
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
t.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue and Other Income
Applicable to 30 June 2019
In the current year, the Group has applied AASB 15 Revenue from Contracts with Customers which is
effective for an annual period that begins on or after 1 July 2018. AASB 15 introduced a 5-step approach to
revenue recognition.
To determine whether to recognise revenue, the Group follows a 5-step process:
Identifying the contract with a customer
Identifying the performance obligations
1)
2)
3) Determining the transaction price
4) Allocating the transaction price to the performance obligations, and
5) Recognising revenue when/as performance obligation(s) are satisfied.
The revenue and profits recognised in any period are based on the delivery of performance obligations and
an assessment of when control is transferred to the customer.
In determining the amount of revenue and profits to record, and related statement of financial position items
(such as contract fulfilment assets, capitalisation of costs to obtain a contract, trade receivables, accrued
income and deferred income) to recognise in the period, management is required to form a number of key
judgements and assumptions. This includes an assessment of the costs the Group incurs to deliver the
contractual commitments and whether such costs should be expensed as incurred or capitalised.
Revenue is recognised either when the performance obligation in the contract has been performed, so 'point
in time' recognition or 'over time' as control of the performance obligation is transferred to the customer.
Applicable to 30 June 2018
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured, regardless of when the payment is received. Revenue is measured
at the fair value of the consideration received or receivable, taking into account contractually defined terms
of payment and excluding taxes or duty. The Group has concluded that it is the principal in all of its revenue
arrangements since it is the primary obligor in all revenue arrangements, has pricing latitude, and is also
exposed to inventory and credit risks. All revenue is stated net of the amount of goods and services tax
(GST).
Revenue from the solar and battery microgrid engineering and construction operation is measured by the
percentage of completion based on costs incurred less revenue previously recognised and less provision for
foreseeable losses, allocated between amounts due from customers and amounts due to customers.
Revenue for variations is recognised when it is probable the variation will be approved by the customer and
the amount of revenue can be reliability measured.
29
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cost includes variable and fixed costs directly related to specific contracts, costs related to contract activity in
general which can be allocated to specific contracts on a reasonable basis and other costs specifically
chargeable under the contract. Costs expected to be incurred under penalty clauses and rectification provisions
are also included. Costs incurred in securing contracts are included when they can be separately identified and
measured reliably, and where it is probable that the contract will be obtained. Amounts received from customers
not recognised as revenue are allocated to Trade and Other Payables. Amounts recognised as revenue but
not yet billable are recognised as accrued revenue, with amounts billed but not payable until the satisfaction
of conditions specified in the contract for the payment of such amounts or until defects have been rectified are
classified as amount on retention.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial asset.
Royalty income is recognised on an accrual basis. Royalty income, when applicable, is received on a quarterly
basis and any under or over accrual applicable to previously recognised royalty income is adjusted for based
on the receipt of the royalty income entitlement.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial asset.
Royalty income is recognised on an accrual basis. Royalty income, when applicable, is received on a quarterly
basis and any under or over accrual applicable to previously recognised royalty income is adjusted for based
on the receipt of the royalty income entitlement.
Associates
Associates are entities over which the Consolidated Group has significant influence but not control or joint
control. Investments in associates are accounted for using the equity method. Under the equity method, the
share of the profits or losses of the associate is recognised in profit or loss and the share of the movements in
equity is recognised in other comprehensive income. Investments in associates are carried in the statement
of financial position at cost plus post-acquisition changes in the Consolidated Group's share of net assets of
the associate. Goodwill relating to the associate is included in the carrying amount of the investment and is
neither amortised nor individually tested for impairment. Dividends received or receivable from associates
reduce the carrying amount of the investment.
When the Consolidated Group's share of losses in an associate equals or exceeds its interest in the associate,
including any unsecured long-term receivables, the Consolidated Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the associate.
The Consolidated Group discontinues the use of equity accounting upon the loss of significant influence and
recognises any retained investment at its fair value. Any difference between the associate’s carrying amount,
fair value of the interest in investment and proceeds on disposal is recognised in profit or loss.
Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the entity that remain
unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts
normally paid within 30 days of recognition of the liability.
30
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Goods and Services Tax (GST) and Value Added Tax (VAT)
Revenues, expenses and assets are recognised net of the amount of GST and VAT, except where the
amount of GST and VAT incurred are not recoverable from the Tax Office. In these circumstances the
GST and VAT are recognised as part of the cost of acquisition of the asset or as part of an item of the
expense. Receivables and payables in the Statement of Financial Position are shown inclusive of GST
and VAT.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST and VAT
component of investing and financing activities, which are disclosed as operating cash flows.
Government Grants and Research and Development Tax Incentives
Government grants and research and development tax incentives are recognised at fair value where
there is reasonable assurance that the grant or tax incentive will be received and all grant or tax incentive
conditions will be met. Where grantor tax incentive conditions are not yet fully met, grants or tax
incentives will be treated as unearned funding in the balance sheet. Grants or tax incentives relating to
expense items are recognised as an offset against these expenses to match the costs they are
compensating. Grants or tax incentives relating to items capitalised as assets are recognised as an offset
against the asset to match the costs they are compensating.
Earnings/(loss) per share
Basic earnings/(loss) per share is calculated as net profit/(loss) attributable to members of the
Consolidated Group, adjusted to exclude any costs of servicing equity (other than dividends), divided by
the weighted average number of ordinary shares on issue throughout the reporting period.
Diluted earnings/(loss) per share is calculated as net profit/(loss) attributable to members of the
Consolidated Group, adjusted for, the dilutive effects of any outstanding unlisted options over ordinary
shares in the parent.
Fair Value Measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date; and assumes
that the transaction will take place either: in the principal market; or in the absence of a principal market,
in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset
or liability, assuming they act in their economic best interests. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising
the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy
that reflects the significance of the inputs used in making the measurements. Classifications are reviewed
at each reporting date and transfers between levels are determined based on a reassessment of the
lowest level of input that is significant to the fair value measurement.
31
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Derivatives not designated as hedging instruments
Forward sale contracts for large scale generation certificates are recognised when the entity becomes a
party to the contractual provisions to the instrument. The Consolidated Group has not designated these
as hedging instruments and recognises the fair value gain or loss on these instruments at each balance
date through the statement of profit or loss.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based
on the presumption that the transaction to sell the large-scale generation certificates takes place either:
•
•
In the principal market for the asset or liability; or
In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best
interest.
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.
The effects of adopting AASB 9 are set out below.
(i)
Classification and measurement
Under AASB 9, there is a change in the classification and measurement requirements relating to financial
assets. Previously, there were four categories of financial assets: loans and receivables, fair value through
profit or loss, held to maturity and available for sale. Under AASB 9, financial assets are either classified
as amortised cost, fair value through profit or loss or fair value through other comprehensive income.
New Accounting Standards in Application
In the year ended 30 June 2019, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group and effective for the current annual reporting
period. The Consolidated Group’s assessment of the impact of these new or amended Accounting Standards
and Interpretations, most relevant to the Consolidated Group, are set out below
AASB 9 Financial Instruments
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement for
annual periods beginning on or after 1 January 2018, bringing together all three aspects of the accounting for
financial instruments: classification and measurement; impairment; and hedge accounting.
The Group has applied AASB 9 retrospectively, with the initial application date of 1 January 2018 and has
adjusted the comparative information for the period beginning 1 July 2017, where necessary. There were no
material impacts on the comparative balances other than a change in classification of some receivables.
32
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial Assets
The Group has no significant financial assets held at fair value, nor did it have any in the prior period.
Financial Liabilities
The Group has no significant financial liabilities held at fair value through the profit or loss, nor did it have any
in the prior period.
(ii)
Impairment
The adoption of AASB 9 has changed the Group’s accounting for impairment losses for financial assets by
replacing AASB 139’s incurred loss approach with a forward-looking expected credit loss (ECL) approach.
AASB 9 requires the Group to recognise an allowance for ECLs for financial assets not held at fair value
through profit or loss.
As all of the Group’s trade receivables and other current receivables which the Group measures at amortised
cost are short term (i.e. less than 12 months), the change to a forward-looking ECL approach did not have a
material impact on the amounts recognised in the financial statements.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard
provides a single standard for revenue recognition. The core principle of the standard is that an entity will
recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard
will require: contracts (either written, verbal or implied) to be identified, together with the separate performance
obligations within the contract; determine the transaction price, adjusted for the time value of money excluding
credit risk; allocation of the transaction price to the separate performance obligations on a basis of relative
stand-alone selling price of each distinct good or service, or estimation approach if no distinct observable prices
exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be presented
separately as an expense rather than adjusted to revenue. For goods, the performance obligation would be
satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied
when the service has been provided, typically for promises to transfer services to customers. For performance
obligations satisfied over time, an entity would select an appropriate measure of progress to determine how
much revenue should be recognised as the performance obligation is satisfied. Contracts with customers will
be presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable,
depending on the relationship between the entity's performance and the customer's payment. Sufficient
quantitative and qualitative disclosure is required to enable users to understand the contracts with customers;
the significant judgments made in applying the guidance to those contracts; and any assets recognised from
the costs to obtain or fulfil a contract with a customer.
New Accounting Standards for Application in Future Periods
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Consolidated Group for the annual reporting period ended 30
June 2019. The Consolidated Group's assessment of the impact of these new or amended Accounting
Standards and Interpretations, most relevant to the Consolidated Group, are set out below.
33
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard
replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance
leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position,
measured as the present value of the unavoidable future lease payments to be made over the lease term. The
exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal
computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use'
asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to
the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial
direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line
operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included
in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the
earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation
and Amortisation) results will be improved as the operating expense is replaced by interest expense and
depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease
payments will be separated into both a principal (financing activities) and interest (either operating or financing
activities) component.
For lessor accounting, the standard does not substantially change how a lessor accounts for leases. The Group
currently has very minimal leases and will have no material impact on future accounts.
Significant accounting judgements, estimates and assumptions
In the process of applying the Group’s accounting policies, management has made the following
judgements, apart from those involving estimations, which have the most significant effect on the amounts
recognised in the financial statements:
Impairment of development asset
The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to
the Group and to the particular asset that may lead to impairment. If an impairment trigger exists, the
recoverable amount of the asset is determined.
Annual impairment testing is also carried out for all intangible assets with indefinite useful lives (refer to
Note 13).
Useful lives of available for use intangible assets
Acquired intellectual property and development costs in respect of an asset available for use that has a
finite life is amortised over the asset’s useful life. The Group assesses the useful life based on conditions
specific to the Group and to the particular asset, including the expected usage of the asset by the Group,
public information on estimates of useful lives of similar assets, and technical and technological
obsolescence.
Share based payment transactions
The Group measures the cost of equity settled transactions with employees by reference to the fair value
of the equity instrument at the date at which they are granted. The fair value is determined by using the
Black Scholes formula taking into consideration the terms and conditions upon which the instruments are
granted (refer to Note 27).
34
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTE 2: REVENUE AND OTHER INCOME
The Group derives it sales revenue from the sale of goods and provision of services over time under AASB 15.
Sales revenue
Solar, battery and microgrid
Other income
Interest income
Other income
Realised loss on foreign exchange
NOTE 3: DEPRECIATION AND AMORTISATION EXPENSE
Notes
Consolidated Group
2018
2019
$
$
534,034
94,942
22,316 742,855
-
-
22,316
67,451
810,306
Consolidated Group
2018
2019
$
$
Depreciation – property, plant and equipment
13(a)
250,991
117,784
NOTE 4: INCOME TAX EXPENSE
a.
The components of tax expense comprise:
Current tax expense
Current period
Deferred tax expense
250,991
117,784
Consolidated Group
2019
2018
$
$
-
-
-
-
Origination and reversal of temporary differences
(1,589,814)
(5,389,800)
Movement in deferred tax balances not recognised
1,589,814
5,389,800
-
-
35
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 4: INCOME TAX EXPENSE (CONTINUED)
b.
The prima facie tax benefit on loss from ordinary activities before income tax is reconciled to the income
tax as follows:
—
—
—
Loss from continuing operations
Loss from discontinued operations
Total Loss for the year
2019
$
2018
$
(43,366,305)
(41,745,080)
(8,564,208)
(21,604,615)
(51,930,513)
(63,349,695)
—
Income tax at 30% (2018: 30%)
(15,579,153)
(19,004,908))
Add:
Tax effect of:
—
Tax rate differential
— Other non-allowable items
— Non-deductible R&D costs
—
Assessable government grants
Impairment
—
— Gain on deconsolidation
—
— Movement in deferred tax balances not recognised
Share options expensed during year
-
91,338
56,669
585,226
2,976
447,612
23,814
-
11,363,366
13,140,708
2,871,798
3,000
-
-
607,756
5,389,798
-
-
The Group has tax losses carried forward of $51,144,192 (2018: $60,394,223). The tax losses do not expire
under current tax legislation. Deferred tax asset has not been recognised in respect of tax losses carried
forward as a formal assessment of the recoverability of the tax losses under the current tax legislation has
not been performed.
NOTE 5: INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP)
Refer to the Remuneration Report contained in the Report of the Directors for details of the remuneration paid
or payable to each member of the Group’s KMP for the year ended 30 June 2019.
a.
Names and positions held in economic and parent entity by KMP in office at any time during the
financial year are:
Key Management Person
Position
Terry Stinson
Non-Executive Chairman
Michael Fitzpatrick
Non-Executive Director
Grant J Mooney
Jonathan Fievez
Michael Ottaviano
Non-Executive Director and Company Secretary
Chief Executive Officer (appointed 28 September 2018)
Managing Director (resigned effective 30 September 2018)
36
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 5: INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP)
The totals of remuneration paid to KMP of the Group during the year are as follows:
Short term employee benefits
Share based payments
Other long-term benefits
Post-employment benefits
NOTE 6: AUDITORS’ REMUNERATION
• Remuneration of the current auditor of the Group for
auditing or reviewing the financial report
• Remuneration of the previous auditor of the Group for
auditing or reviewing the financial report
NOTE 7: EARNINGS/(LOSS) PER SHARE
Basic loss per share (cents per share) from continuing
operations
Diluted loss per share (cents per share) from continuing
operations
Basic loss per share (cents per share) from discontinued
operations
Diluted loss per share (cents per share) from discontinued
operations
(a)
Loss used in the calculation of basic and diluted EPS –
continuing operations
Loss used in the calculation of basic and diluted EPS –
discontinuing operations
37
2019
$
2018
$
871,113
2,180,444
10,000
-
60,688
-
6,576
86,355
941,801
2,273,375
Consolidated Group
2019
$
-
79,787
79,787
2018
$
-
115,500
115,500
Consolidated Group
2019
(1.51)
2018
(1.56)
(1.51)
(1.56)
(0.30)
(0.30)
(0.81)
(0.81)
Consolidated Group
2019
$
2018
$
(43,366,305)
(41,745,080)
(8,564,208)
(21,604,615)
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 7: EARNINGS/(LOSS) PER SHARE (CONTINUED)
Consolidated Group
2019
2018
(b) Weighted average number of ordinary shares used in
calculation of weighted average earnings per share
2,881,452,450
2,683,572,635
As at 30 June 2018 and 30 June 2019, the outstanding options were not dilutive as the weighted average
exercise price of the options were higher than the weighted average share price for the year.
There have been no other transactions involving ordinary shares or potential ordinary shares since the
reporting date and before the completion of these financial statements.
NOTE 8: CASH AND CASH EQUIVALENTS
Cash on hand
Cash at bank
NOTE 9: TRADE AND OTHER RECEIVABLES
Consolidated Group
Gross Amount
2019
CURRENT
Trade receivables
Allowance for expected credit loss
Net trade receivables
Prepayments
Other receivables*
NON-CURRENT
Security deposits
$
142,888
-
142,888
32,399
538,004
713,291
1,945,306
1,945,306
Consolidated Group
2019
$
252
255,354
255,606
2018
$
428
8,436,102
8,436,530
Past due but not impaired
(days overdue)
31-60
$
1-30
$
61+
$
Within trade
terms
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,990
127,898
-
-
14,990
127,898
32,399
-
538,004
14,990
698,301
-
-
1,945,306
1,945,306
*Other receivables are mainly represented by a GST receivable due to reversed debtors and creditors
invoices. As the company is under administration, this balance will be moved to the creditors trust when
the Deed of Company Arrangement is completed, as it related to a balance at Administration date.
38
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 9: TRADE AND OTHER RECEIVABLES (CONTINUED)
2018
CURRENT
Trade receivables
Consolidated Group
Gross Amount
Past due but not impaired
(days overdue)
31-60
$
1-30
$
61+
$
Within trade
terms
$
$
753,590
25,653
40,273 175,745
511,919
Allowance for expected credit loss
(100,000)
-
-
(100,000)
-
Net trade receivables
Prepayments
Accrued revenue
Amount on retention
Other receivables
Security deposits
NON-CURRENT
Security deposits
653,590
25,653
40,273
75,745
511,919
239,336
887,971
323,925
1,790,285*
1,117,339
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
239,336
887,971
323,925
1,790,285
1,117,339
5,012,446
25,653
40,273
75,745
4,870,775
778,835
778,835
-
-
-
-
-
-
778,835
778,835
*Includes $1,415,947 in research and development tax incentives receivable.
NOTE 10: FINANCIAL ASSETS
Financial assets
i.
Financial assets comprise:
Unlisted investment, at cost:
Consolidated Group
Notes
i
2019
$
12,414
2018
$
12,414
—
shares in other corporations
12,414
12,414
Financial assets comprise investments in the ordinary issued capital of various entities. There are no fixed
returns or fixed maturity date attached to these investments.
39
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 11: INTERESTS IN SUBSIDIARIES AND JOINT ARRANGEMENTS
The consolidated financial statements incorporate the assets, liabilities and results of the following
subsidiaries and joint arrangements in accordance with the accounting policy described in Note 1:
Country of
Incorporation
Percentage Owned (%)(i)
2019
2018
Carnegie Recreational Watercraft Pty Ltd
CETO IP (Australia) Pty Ltd
CETO Wave Energy Chile
CETO Wave Energy Ireland
CETO Wave Energy UK
Clear Energy Pty Ltd (ii)
CMA Nominees Pty Ltd
EMC Engineering Australia Pty Ltd (ii)
EMC Kimberley Pty Ltd (ii)
Energy Made Clean Pty Ltd (ii)
New Millennium Engineering Pty Ltd
Pacific Coastal Wave Energy Corp.
Solar Farm Cunderdin Pty Ltd
Solar Farm Jurien Bay Pty Ltd
Solar Farm Kellerberrin Pty Ltd
Solar Farm Moora Pty Ltd
Solar Farm Southern Cross Pty Ltd
EMC Lendlease Joint Venture (iii)
Northam Solar Project (iii)
Australia
Australia
Chile
Ireland
United Kingdom
Australia
Australia
Australia
Australia
Australia
Australia
Canada
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
0
100
0
0
0
100
0
100
100
100
100
100
0
0
100
100
100
100
100
100
100
100
100
100
100
95
100
100
100
100
100
50
50
i.
ii.
iii.
Percentage of voting power is in proportion to ownership.
Loss of control when administrators were appointed 14 March 2019, and subsequently in
liquidation
Accounted for as a joint operation (in prior year)
NOTE 12: PROPERTY, PLANT AND EQUIPMENT
Plant and equipment:
At cost
Accumulated depreciation
Total plant and equipment
Consolidated Group
2019
$
2,841,916
(165,967)
2,675,949
2018
$
16,394,067
(1,950,999)
14,443,068
40
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 12: PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
a. Movements in Carrying Amounts
Movement in the carrying amounts for each class of property, plant and equipment between the
beginning and the end of the current financial year.
Consolidated Group:
Balance at the beginning of year
Additions
Disposals
Impairment of Garden Island Microgrid
Write offs assets no longer held
Depreciation expense
Assets no longer held due to loss of control of subsidiaries
Depreciation capitalised to intangible asset development
Plant and
Equipment
2019
$
Plant and
Equipment
2018
$
14,443,068
79,714
(196,271)
(4,764,782)
(195,490)
(56,772)
(6,633,518)
-
6,501,304
8,406,785
14,193
(20,078)
-
(455,104)
-
(4,032)
Carrying amount at the end of year
2,675,949
14,443,068
NOTE 13: INTANGIBLE ASSETS
Intangible assets can be broken down as follows:
a)
Intangibles – CETO technology development asset
Consolidated Group
2019
$
2018
$
Initial acquisition cost of CETO Technology – 2009
55,989,877
55,989,877
Subsequent development expenditure – CETO Technology
82,445,308
81,919,459
Grants and R&D tax incentives received
(54,981,285)
(53,075,069)
Impairment
Movements for year ended 30 June
Opening Balance
Subsequent development expenditure – CETO Technology
Other grants received
R&D tax incentive
Impairment
Balance as at 30 June
41
(68,453,900)
(34,934,267)
15,000,000
49,900,000
49,900,000
83,041,247
525,849
(1,423,234)
3,323,625
(104,912)
(482,982)
(1,425,693)
(33,519,633)
(34,934,267)
15,000,000
49,900,000
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 13: INTANGIBLE ASSETS (CONTINUED)
The CETO technology has yet to be commercialised and is in the development phase. The cash generating unit
which the CETO technology belongs comprises significant other assets at 30 June 2019, which was not the case
during the prior year. Accordingly, the approach adopted for this year’s valuation has been amended to a relief
from royalty methodology (RRM) to value separately the CETO technology. Management has considered the
RRM as being the most appropriate methodology to value CETO technology as:
•
•
•
RRM is a commonly used and widely accepted method for valuing intellectual property (IP),
A cost based approach can be used as a crosscheck using the costs required to replicate the IP. Whilst
Management have details on the historical expenditure incurred in developing and maintaining the IP it is
not possible to identify what proportion of the historical expenditure is now obsolete, and
A market based approach is also rarely applied in the valuation of IP due to a lack of comparable
transactions of IP from which valuation metrics can be observed and deduced.
The basic principle of the relief from royalty methodology (RRM) is that if you do not own such intellectual property
(IP), you would need to pay to license it from the IP owner. By virtue of owning the asset, the IP owner is ‘relieved’
from the responsibility of licensing the IP from a third party. The value of that is therefore benchmarked to the
hypothetical cost to license such IP from a third party.
The determination of fair value is based on ‘fair value’ as defined under AASB 13: Fair Value Measurement. At
30 June 2019, as the fair value has been estimated to be less than the carrying value of the CETO technology,
$32,436,691 in impairment losses has been recognised as an expense.
Fair value was determined by the Company engaging a suitably qualified independent consultant after the
conclusion of the financial year to prepare an independent valuation report. The RRM utilises an estimate of the
forecast royalty stream that a hypothetical third party would pay to utilise the IP less the costs of
commercialisation.
Key assumptions are those to which the recoverable amount of an asset or cash-generating units is most
sensitive.
The calculation of the fair value less cost of disposal is based on the following key assumptions:
•
Expected revenue generated from the sale of CETO IP units, based on a minority market share of the
world’s installed wave energy capacity annually to 2050;
Remaining useful life of the IP will have a life beyond the remaining patent period as new technology is
developed and patented. As such, a 25 years useful life has been assumed;
A royalty rate range of 3% to 5% with a mid-point of 4% has been applied. To determine a royalty rate
range, royalty rates associated with the renewable energy sector were considered and selected. The
“profit split” between a licensee and licensor of IP was also considered;
Management estimates of the cost to Carnegie (net of grants and research & development rebates) to
commercialise of $4 million for 2019 and 2020, $3 million for 2021 and 2022, and $1 million for 2023 is
required to deploy a first CETO unit in 2020 and to reach full scale commercial operations by 2023;
A tax rate of 30%;
The assumed post-tax rate of return of 20% is based on the weighted average cost of capital plus an
intangible asset premium of 2%.
•
•
•
•
•
42
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 13: INTANGIBLE ASSETS (CONTINUED)
a)
Intangibles – Microgrid/battery technology development
assets
Consolidated Group
Opening balance
Amortisation
Write-off*
2019
$
-
-
-
-
2018
$
4,735,471
(1,111,773)
(3,623,698)
-
* Management have assessed the useful lives of these assets and have concluded that the pattern in which
the assets’ future economic benefits are expected to be consumed by the Consolidated Group don’t correlate
to the amortisation rate. Management has therefore assessed the net realisable value of the microgrid/battery
technology development assets, relating to intellectual property and know-how developed by the Energy Made
Clean Group, as having a nil recoverable value.
a)
Intangibles – Goodwill
The carrying amount of goodwill acquired on the acquisition of Energy Made Clean was allocated to the
following cash-generating units in the prior year:
Consolidated Group
Opening Balance
Write-off*
2019
$
-
-
-
2018
$
8,868,092
(8,868,092)
-
* Management has assessed the net realisable value of the Energy Made Clean related goodwill as having
a nil recoverable value and consequently have written-off the assets to nil. This write-off of goodwill is in
accordance with the accounting standard requirements regarding the allocation of impairment losses
recognised at the cash generating unit level and the hierarchy to which such impairment losses need to be
applied.
NOTE 14: TRADE AND OTHER PAYABLES
Consolidated Group
Trade creditors
Accruals
Other
NON-CURRENT
Other
2019
$
4,151,827
-
5,253,825
-
-
43
2018
$
3,428,983
2,590,543
7,383,500
64,576
64,576
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 15: PROVISIONS
Current
Annual, Long Service Leave and
Other Employee Provisions *
Defect Liability Period Provisions
Consolidated Group
2019
$
69,329
-
69,329
2018
$
661,764
330,000
991,764
*Leave provisions have decreased due to the large decrease in staff numbers due to redundancies during
the period.
Non-current
Annual, Long Service Leave and
Other Employee Provisions
Make Good Provisions
Annual, Long Service Leave and
Other Employee Provisions
Opening balance at 1 July
(Reduction)/additional provisions
Provisions moved to accruals
Defect Liability Period
Provisions
Opening balance at 1 July
Decrease due to loss of control of
subsidiaries
Additional provisions
Make Good Provisions
Opening balance at 1 July
Decrease due to loss of control of
subsidiaries
Additional provisions
49,484
-
49,484
841,515
(586,670)
(136,037)
118,813
330,000
(330,000)
-
-
385,116
(385,116)
-
-
118,813
44
179,751
385,116
564,867
1,002,277
(160,762)
-
841,515
-
-
330,000
330,000
-
-
385,116
385,116
1,556,631
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 15: PROVISIONS (CONTINUED)
Provision for Long-Term Employee Benefits
A provision has been recognised for employee entitlements relating to long service leave (LSL). In calculating
the present value of future cash flows in respect of LSL, the probability of LSL being taken is based on historical
data. The measurement and recognition criteria relating to employee benefits have been included in Note 1 of
this report.
Provision for Defect Liability Period
A provision was previously been recognised for defect liability periods (DLP) on work performed. In calculating
the present value of future cash flows in respect of DLP, the probability and cost of DLP being taken is based
on historical data. Due to the deconsolidation of EMC this amount has been derecognised in the current year.
Provision for Make Good
The Group has an obligation to return the leased land, on which the Northam Solar Farm asset it situated,
back to its condition prior to construction commencing at the end of the lease. These costs are currently
expected to be incurred in 2043 at the end of the project’s life. An estimate of future costs has been determined
for the restoration of the land and has been discounted to present value using the Australian 10-year
government bond rate. Due to the expected disposal of the Northam Solar Farm, this amount has been
derecognised.
NOTE 16: BORROWINGS
a. Convertible notes
Current
Carnegie convertible notes (ii)
EMC convertible notes (i)
Non-current
EMC convertible notes (ii)
Convertible Notes
Balance at the beginning of the period
Placement of new convertible notes (ii)
Equity component of convertible notes
Conversion to equity during the period
Unwinding of finance costs
Consolidated Group
2018
$
2019
$
1,650,000
4,389,987
-
-
-
4,337,047
6,039,987
4,337,047
4,337,047
7,519,183
1,650,000
-
-
-
-
(3,300,000)
52,940
117,864
6,039,987
4,337,047
45
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 16: BORROWINGS (CONTINUED)
In October 2017, Carnegie announced that it had entered into a Partnership Agreement with Bookitja Pty Ltd
and Indigenous Business Australia (IBA) as co-equity investors in relation to the 10MW Northam Solar Farm
Project. As part of this arrangement, Carnegie signed a term sheet for a $7.5 million construction debt facility
for the Northam Solar Farm Project. The facility is provided by Asymmetric Credit Partners Pty Ltd, who were
one of the existing convertible note holders. In order to secure the construction debt facility, Carnegie
undertook a debt restructure whereby:
•
the existing $2.8 million convertible notes would be wound up and converted at the rate of $0.038,
resulting in the issue of 73,684,211 ordinary Carnegie shares;
• existing convertible note holders would be issued (at no cost) an additional 19,649,123 Carnegie
shares within 7 days of signing detailed transaction documentation;
• and existing convertible note holders would be issued a further 35,000,000 unlisted Carnegie
options (expiring in 5 years with a fixed exercise price of $0.06 per share), within 7 days of signing
detailed transaction documentation.
The conversion of the existing convertible notes occurred during October 2017, however the issue of the
additional Carnegie shares and unlisted options occurred on 8 February 2018. The fair values of these shares
and options were calculated at the same date as the existing convertible notes were converted into ordinary
shares. The fair values were calculated as follows:
Additional Carnegie Shares issued
Unlisted options issued
Amount recognised in Profit/Loss 2018
$ 943,158
$ 840,000
$1,783,158
i.On 11 January 2017, the Company completed a capital raising of $5.0 million by issuing 500 unlisted
Convertible Notes at an issue price of $10,000 each. These notes have an 8.0% coupon rate and a 4.0 cents
conversion price convertible to equity at any time at the discretion of the note holder. As at the reporting date
there are 450 notes on issue which mature on 11 January 2020.
ii.Convertible notes to the value of $1,650,000 have been issued in lieu of amounts owing to the following
parties:
Two(2) convertible notes to the value of $250,000 each to the Proponents to the DoCA (the Funding
•
Parties) in satisfaction of the funds provided under the DoCA and which are convertible upon effectuation of
the DoCA into 250,000,000 fully paid ordinary shares per Convertible Note with one Attaching Option per
share convertible at $0.00125 per share within 5 years of issue; and
46 Convertible Notes to HFM Investments Pty Ltd (Lender) in satisfaction of funds provided by the
•
Lender prior to the appointment of administrators Korda Mentha and which are convertible upon effectuation
of the DoCA into 23 March 2021 Notes with a face value of $25,000 per note and 460,000,000 fully paid
ordinary shares and 460,000,000 Attaching Options convertible at $0.0015 per share within 3 years of issue.
46
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 16: BORROWINGS (CONTINUED)
b. Senior loan facility
Restricted access was available at the reporting date to the following lines of credit:
Total facilities
Post-construction debt refinancing (i)
Revolving R&D debt facility (i)
Project construction debt financing (ii)
Current
Revolving R&D debt facility (i)
Addition funding drawn down
Less: Unamortised borrowing costs/unwinding finance
costs
Repayment of debt facility
Non-current
Project construction debt financing (ii)
Unused at the reporting date
Post-construction debt refinancing (i)
Revolving R&D debt facility (i)
Consolidated Group
2018
$
2019
$
-
-
-
-
7
722,827
600,000
2,100,000
4,000,000
3,750,000
9,850,000
800,000
-
77,173
(77,173)
(1,400,000)
-
-
722,827
Consolidated Group
2019
$
2018
$
-
-
-
-
3,750,000
2,100,000
3,200,000
5,300,000
(i)
(ii)
In March 2018, the Company signed a $2.1 million project financing facility for the post-
construction debt refinancing of the Garden Island Microgrid and an additional $4.0 million
revolving debt facility to support research and development activities with the Commonwealth
Bank of Australia. Both facilities were terminated prior to the end of the financial year.
In accordance with the loan agreement between Asymmetric Credit Partners Pty Ltd and the
Consolidated Group, the $7.5 million facility was assigned to the Northam Solar Project Partners
on 18 April 2018. The amounts drawn down at 30 June 2018 represent the Consolidated Group’s
50% interest in the Northam Solar Project held at 30 June 2018.
47
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 17: ISSUED CAPITAL
Consolidated Group
2019
$
2018
$
2,881,452,450 (2018: 2,881,452,450) fully paid ordinary
shares
194,460,984
194,460,984
Ordinary shares have no par value. There is no limit to the authorised share capital of the Company.
a.
Ordinary shares number
At the beginning of reporting period
2,881,452,450
2,599,475,787
2019
No.
2018
No.
Shares issued during the year
—
—
—
—
9 October 2017 (1)
8 February 2018 (2)
16 February 2018 (3)
23 May 2018 (4)
At reporting date
-
-
-
-
73,684,211
19,649,123
12,500,000
176,143,332
2,881,452,450
2,881,452,450
2019
$
2018
$
b.
Ordinary shares $
At the beginning of reporting period
194,460,984
185,212,910
Shares issued during the year
—
—
—
—
9 October 2017 (1)
8 February 2018 (2)
16 February 2018 (3)
23 May 2018 (4)
At reporting date
-
-
-
-
2,800,000
943,158
500,000
5,284,300
194,460,984
194,460,984
(1) On 9 October 2017, 73,684,211 shares were issued on the conversion of convertible notes. The shares
had an effective issue price of $0.038 per share.
(2) On 8 February 2018 19,649,123 shares were issued as part fees to consultants and financiers. The shares
had an effective issue price of $0.048 per share.
(3) On 16 February 2018, 12,500,000 shares were issued on the conversion of convertible notes. The shares
had an effective issue price of $0.040 per share.
(4) On 23 May 2018, the Company raised $5,284,300 by issuing 176,143,332 ordinary shares pursuant to a
Share Purchase Plan to existing shareholders at an issue price of $0.030 per share.
48
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 17: ISSUED CAPITAL (CONTINUED)
c. Capital Management
Management controls the capital of the group in order to ensure that the Group can fund its operations and
continue as a going concern.
The Group’s capital is made up of ordinary share capital.
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting
its capital structure in response to changes in these risks and in the market. This includes the management
of share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group
since the prior year except for the appointment of administrators Korda Mentha on 14 March 2019 which
remained in place at the end of the financial year.
NOTE 18: RESERVES
Consolidated Group
2019
$
2018
$
a.
Foreign Currency Translation Reserve
The foreign currency translation reserve records
exchange differences arising on translation of
foreign controlled subsidiaries and foreign
currencies
b.
Convertible Note/Option Reserve
The reserve records items recognised as expenses
on valuation of share options and share based
payments including loan funded shares. It also
records amounts classified as “equity” under the
requirements of AASB 132.
Total
50,268
(35,703)
850,000
900,268
4,609,958
4,574,255
49
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 19: CAPITAL AND LEASING COMMITMENTS
Consolidated Group
Operating and Finance Lease
Commitments
Not later than 1 year
Later than 1 year but not later than 5
years
Later than 5 years
Capital Commitments
Not later than 1 year
Later than 1 year but not later than 5
years
Later than 5 years
2019
$
36,933
-
-
36,933
2018
$
732,497
310,855
513,683
1,557,035
Consolidated Group
2019
$
-
-
-
-
2018
$
2,038,705
-
-
2,038,705
NOTE 20: BUSINESS RISK
For the financial year ended 30 June 2019, the Group incurred an operating loss of $51.9 million (2018: $63.3
million). As at 30 June 2019, the Group had an accumulated deficit of $186.0 million. The majority of the
accumulated deficit has resulted from costs incurred in the CETO technology development program,
impairment of intangible assets, write off of Subsidiary Energy Made Clean Pty Ltd and from associated general
and administrative costs.
As the Group continues to develop its proprietary technologies, it expects to have a net decrease in cash from
operating activities until it achieves positive cash flow.
The Group cannot say with certainty when it will become profitable because of the uncertainties associated
with successfully commercializing a wave energy technology. If existing resources are insufficient to satisfy
the liquidity requirements, the Group may seek to sell its solar microgrid asset, additional equity or debt
securities or obtain credit facilities. If the Group is unable to obtain required financing, it may be required to
reduce the scope of its planned product development and commercialization efforts which could adversely
affect its financial position and operating results.
50
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTE 21: OPERATING SEGMENTS
The Group identifies its operating segments based on the internal reports that are reviewed and used by the
Board of Directors (chief operating decision makers) in assessing performance and determining the allocation
of resources.
The Group is organised into two operating segments:
- Discontinued operations
- Continuing operations
No operating segments have been aggregated to form the above reportable operating segments.
The financial information presented in the statement of comprehensive income and statement of financial
position is the same as that presented to the chief operating decision maker. Segment performance is evaluated
based on profit or loss and is measured consistently with profit or loss in the consolidated financial statements.
However, financing (including finance costs and finance income), gains and losses on fair value movements
through profit and loss, royalties, share of profit and losses of associates, losses on consolidation and disposal
of associates, and income taxes are managed on a group basis and are not allocated to operating segments.
Intersegment transactions are on arm’s length basis and are eliminated on consolidation. Intersegment loans
are initially recognised at the consideration received and earn or incur interest at prevailing market rates.
Intersegment loans are eliminated on consolidation.
All amounts reported to the Board of Directors as the chief decision maker are in accordance with accounting
policies that are consistent to those adopted in the annual financial statements of the Group.
2019
Revenue
Continuing
Operations
Discontinued
Operations
Total
segments
Adjustments
and
eliminations Consolidated
External customers
556,350
4,261,083
4,817,433
-
4,817,144
Inter-segment
634,792
-
634,792
(634,792)
-
1,191,142
4,261,083
5,452,255
(634,792)
4,817,144
2019
Continuing
Operations
Discontinued
Operations
Total
segments
Adjustments
and
eliminations Consolidated
Segment loss
Total assets
Total liabilities
(43,366,305)
(8,564,208)
(51,930,513)
20,803,434
11,412,625
-
-
-
-
-
-
-
(51,930,513)
20,803,434
11,412,625
51
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 21: OPERATING SEGMENTS (CONTINUED)
CETO wave
energy
technology/
microgrid
BOO
Solar &
battery
engineering,
procurement,
and
construction
Total
segments
Adjustments
and
eliminations Consolidated
2018
Revenue
External customers
90,773
8,987,864
9,078,637
-
9,078,637
Inter-segment
-
5,542,516
5,542,516
(5,542,516)
-
90,773
14,530,380
14,621,153
(5,542,516)
9,078,637
CETO wave
energy
technology/
microgrid
BOO
Solar &
battery
engineering,
procurement,
and
construction
Total
segments
Adjustments
and
eliminations Consolidated
(42,259,531)
(20,247,767)
(62,507,298)
(842,397)
(63,349,695)
86,005,203.
9,567,191
95,572,394 (16,514,412)
79,057,982
4,355,936
9,508,301
13,864,237
3,968,394
17,832,631
2018
Segment loss
Total assets
Total liabilities
52
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 23: CASH FLOW INFORMATION
Reconciliation of Cash Flow from
Operations with Loss after Income
Tax
Loss after income tax
Non-cash flows in profit
Depreciation and amortisation
Impairment
Net loss on disposal of assets
Net gain on foreign exchange
Write-off of assets
Effect of discontinued operations
Net gain on financial instruments
at fair value
Fair value gain on derivatives
Share options & loan funded
shares expensed
Finance costs
Doubtful Debts
Changes in assets and liabilities, net of
the effects of purchase and disposal of
subsidiaries
Increase/(decrease) in trade and
receivables
Increase/(decrease) in inventory
Decrease/(increase) in
development assets
Increase/(decrease) in trade
payables and accruals
Increase in provisions
Cashflow used in operations
Consolidated Group
2019
$
2018
$
(51,930,513)
(63,349,694)
117,784
31,310,570
3,689
(67,258)
3,623,698
13,368,473
(428,669)
8,300
1,786,510
1,019,617
4,651
2,632,660
361,852
886,064
1,355,560
172,209
(7,193,984)
250,991
37,877,887
-
-
25,171,525
(890,731)
-
-
10,000
-
41,310
(4,299,157)
(464,937)
1,669,148
(2,129,676)
(922,435)
(4,383,412)
53
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 24: EVENTS AFTER THE REPORTING PERIOD
The following events occurred subsequent to the end of the financial year:
1. Convertible Note Facility Agreements
On 22 October 2019, the Company entered into two convertible note facility agreements (Convertible Note
Facility Agreements) with the following parties:
iii.
iv.
HFM Investments Pty Ltd (HFM) to the value of $1.15 million; and
existing noteholders holding convertible notes to the value of $4.5 million (CCE Noteholders).
Utilisation under the Convertible Note Facility Agreements is subject to satisfaction of conditions precedent. A
summary of the material terms of the Convertible Note Facility Agreements is as follows:
(a) HFM and CCE Noteholders subscribe for the 2021 Notes to the value of $2,850,000. The commitment
amount will be utilised in satisfaction of 50% of the debt owing to HFM and the CCE Noteholders;
(b) each 2021 Note will have a face value of A$25,000;
(c) each 2021 Note will convert into Shares at $0.00125 per Share, with each Share being issued with one
free attaching Option exercisable at $0.0015 per Option, expiring three years from the date of issue
(with both the Shares and Options being subject to voluntary escrow for six months from the date of
issue);
(d) the Company shall repay the 2021 Notes on 31 March 2021 (Repayment Date);
(e) the Company must pay interest on the 2021 Notes at a rate of 8% per annum (Coupon Rate), with an
issue price of the greater of $0.001 or the 90 day VWAP calculated prior to the relevant interest payment
date, being the date that is one year from the date of issue of the 2021 Notes, each of 31 March, 30
June, 30 September and 31 December thereafter and on 31 March 2021 (Interest Payment Dates);
the Lenders may elect to convert all or part of the 2021 Notes and the accrued interest to Shares any
time between one year after the 2021 Notes are issued and prior to the Repayment Date, by providing
notice to the Company; and
(f)
(g) if at any time after the date of the Convertible Note Facility Agreements there occurs any reconstruction
of the issued capital of the Company then the entitlement of the Lenders to convert the 2021 Notes and
any amount of interest owing, then unconverted, shall be reconstructed in a manner that is consistent
with the ASX Listing Rules and in the same proportion and manner as any reconstruction of the issued
capital of the issue.
2. General Security Agreement
On 22 October 2019, pursuant to the terms of the DOCA, the Company entered into a General Security
Agreement (GSA). Under the terms of the GSA:
(a) the Lenders, being the CCE Noteholders and HFM will be granted a security interest over all present
and after acquired property of the Company; and
(b) the Company will utilise its best endeavours to seek consent from the DoD to obtain a valid charge over
the Garden Island Microgrid.
The GSA will be granted over all of the assets and undertakings of the Company, save that the security over the
GIMG asset will only apply following grant of the consent of the Department of DoD but at all times apply to any
proceeds from the GIMG asset.
54
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 24: EVENTS AFTER THE REPORTING PERIOD
3. Entitlement Issue
On 31 July 2019, the Company lodged a prospectus with ASIC to facilitate the recapitalization of the Company
as contemplated under the DoCA. The following offers were made under the prospectus:
(a) a non-renounceable pro rata entitlement offer of four (4) New Shares for every one (1) Share held by
Eligible Shareholders at an issue price of $0.001 per New Share to raise a minimum of $5,500,000
(before costs) and a maximum of approximately $11,525,810 (before costs);
(b) An offer of 500,000,000 New Shares together with 500,000,000 free attaching New Options to the
Proponents (and/or their nominees) to the DOCA, being Asymmetric Credit Partners Pty Ltd (a company
associated to proposed director Anthony Shields) and Mooney & Partners Pty Ltd (a company
associated with director Grant Mooney); and
(c) An offer of 113 Convertible Notes (2021 Notes) each with a face value of $25,000 to the CCE
Noteholders and HFM (and/or their nominees).
(d) The Offer closed on 18 September 2019 and on 23 September 2019 the Company announced to ASX
that it had raised the required $5.5 million to meet the minimum subscription level and was working
towards meeting the remaining conditions in order to have its securities reinstated to quotation on ASX.
4. General Meeting of Shareholders
At the Company’s General Meeting of Shareholders held on 30 August 2019 all resolutions were passed to
proceed with current Entitlement Offer and Recapitalisation Proposal.
5. Garden Island Microgrid
On 23 August 2019, the Company announced that that the Garden Island Microgrid (GIMG) had commenced
operations following approval from the Department of Defence. With approvals in place from Department of
Defence and Western Power (received in late June), Carnegie had officially powered up the system and
commenced producing clean renewable energy for HMAS Stirling, Australia’s largest naval base. Carnegie
subsequently announced on 12 September 2019 that it had submitted its first invoice for the sale of power to
Department of Defence.
With the exception of the above, no other matters or circumstances not otherwise dealt with in this report or the
consolidated financial statements, have arisen since the end of the financial year which significantly affected, or
may significantly affect, the operations of the Consolidated Group, the results of those operations or the state of
affairs of the Consolidated Group in subsequent financial years.
55
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 25: RELATED PARTY TRANSACTIONS
Sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in
cash. The Group has not recorded any impairment on receivables relating to amounts owed by related parties.
Transactions and balances with Director related entities
a) Company secretarial services have been provided by Mooney & Partners Pty Ltd, a company associated
with Grant Mooney during the financial year. These amounts have been included in the disclosures at
Note 5. These transactions were undertaken under normal commercial terms.
b) Consulting services have been provided by Tallarook Ltd, a company associated with Mark Woodall
during the financial year. These amounts have been included in the disclosures at Note 5. These
transactions were undertaken under normal commercial terms.
c) Consulting services provided by Utility Advisory Services, a company associated with Kieran O’Brien
during the previous financial year. These amounts have been included in the disclosures at Note 5.
These transactions were undertaken under normal commercial terms.
d) Balances outstanding with Director and Director related entities:
Amount owing from Solar Farm Carnarvon Pty
Ltd
Contingent amount owing (refer to Note 15)
Michael Fitzpatrick
Amount owing to Log Creek Pty Ltd
Michael Ottaviano
Amount owing from Michael Ottaviano
e)
Transactions and balances with Associates
Transactions with Associates
Sales to EMC Kimberley Pty Ltd
2019
$
51,208
2019
$
2019
$
-
-
-
-
2018
$
-
-
2018
$
(963,788)
32,532
2018
$
641,179
56
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 26: FINANCIAL RISK MANAGEMENT
Financial Risk Management Policies
The Board of Directors has responsibility for, amongst other issues, monitoring and managing financial risk
exposures of the Consolidated Group. The Board monitors the Group’s financial risk management policies
and exposures and approves financial transactions within the scope of its authority. It also reviews the
effectiveness of internal controls relating to commodity price risk, counter party credit risk, currency risk,
financing risk and interest rate risk.
(a)
Interest rate risk
The Consolidated Group’s exposure to interest rate risk, which is the risk that a financial instrument’s
value will fluctuate as a result of changes in market interest rates. The effective weighted average
interest rates in classes of financial assets and liabilities is as follows:
Weighted
Average
Effective
Interest
Rate
%
Floating
Interest
Rate
$
Fixed Interest Rate
Maturing
Within year
$
1 to 5 years
$
Non-
interest
Bearing
$
Total
$
Consolidated
Group
30 June 2019:
Financial assets:
Cash and cash
equivalents
Receivables
0.0%
0.95%
Financial assets
-
Financial liabilities:
Accounts payable
Borrowings
218,678
-
-
-
1,945,306
-
218,678
1,945,306
-
-
-
-
6,039,987
6,039,987
-
-
-
-
-
-
-
36,928
255,606
713,291
2,658,597
12,414
12,414
762,633
2,926,617
5,253,825
5,253,825
-
6,039,987
5,253,825 11,342,812
57
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 26: FINANCIAL RISK MANAGEMENT (CONTINUED)
Consolidated
Group
30 June 2018:
Financial assets:
Cash and cash
equivalents
Receivables
Financial assets
Weighted
Average
Effective
Interest
Rate
%
Floating
Interest
Rate
$
Fixed Interest Rate
Maturing
Within
year
$
1 to 5
years
$
Non-
interest
Bearing
$
Total
$
0.5
7,588,192
702,877
1.24
-
-
-
1,896,175
-
7,588,192
2,599,052
-
-
-
-
145,461
8,436,530
3,895,108
5,791,283
12,414
12,414
4,052,813
14,240,227
Financial liabilities:
Accounts payable
Borrowings
9.2
-
722,827
722,827
-
-
-
-
7,448,076
7,448,076
8,087,047
-
8,809,874
8,087,047
7,448,076
16,257,950
Credit Risk
(b)
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to
recognised financial assets is the carrying amount, net of any provisions for doubtful debts, as disclosed in the
Statement of Financial Position and notes to the Statement of Financial Position.
The Consolidated Group does not have any material credit risk exposure to any single debtor or group of debtors
under financial instruments entered into by the Consolidated Group. Details with respect to credit risk of trade and
other receivables are provided in Note 9. The credit risk on liquid funds is limited because the counter parties are
banks with high credit ratings.
Net fair value
(c)
The net fair value and carrying amounts of financial assets and financial liabilities are disclosed in the
Statement of Financial Position and in the notes to the Statement of Financial Position.
For unlisted investments where there is no organised financial market the net fair value has been based on a
reasonable estimation of the underlying net assets or discounted cash flows of the investment, where this
could not be done, they have been carried at cost. No financial assets or financial liabilities are readily traded
on organised markets in standardised form other than investments.
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the Statement of Financial Position have been analysed
and classified using a fair value hierarchy reflecting the significance of the inputs used in making the
measurements. The fair value hierarchy consists of the following levels:
— quoted prices in active markets for identical assets or liabilities (Level 1);
—
inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices) (Level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(Level 3).
—
58
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 26: FINANCIAL RISK MANAGEMENT (CONTINUED)
Consolidated Group
2019
Financial assets:
Financial assets:
—
Unlisted investments
2018
Financial assets:
Financial assets:
—
Unlisted investments
(d) Sensitivity Analysis
Interest Rate Risk
Level 1
$
Level 2
$
Level 3
$
Total
$
-
-
-
-
12,414
12,414
12,414
12,414
Level 1
$
Level 2
$
Level 3
$
Total
$
-
-
-
-
12,414
12,414
12,414
12,414
The group has performed sensitivity analysis relating to its exposure to interest rate risk, at
balance date. This sensitivity analysis demonstrates the effect on the current year results and
equity which could result from a change in these risks.
Interest Rate Sensitivity Analysis
At 30 June 2019, the effect on profit and equity as a result of changes in the interest rate, with
all other variables remaining constant would be as follows:
Consolidated Group
Change in profit
—
—
Increase in interest rate by 1%
Decrease in interest rate by 1%
Change in Equity
—
—
Increase in interest rate by 1%
Decrease in interest rate by 1%
2019
$
6,523
(6,523)
6,523
(6,523)
2018
$
155,340
(155,340)
155,340
(155,340)
59
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 26: FINANCIAL RISK MANAGEMENT (CONTINUED)
(e) Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling
its debts or otherwise meeting its obligations related to financial liabilities. The Group
manages this risk through the following mechanisms:
• preparing forward looking cash flow analysis in relation to its operational, investing
and financing activities;
• monitoring undrawn credit facilities;
• obtaining funding from a variety of sources;
• maintaining a reputable credit profile;
• managing credit risk related to financial assets;
•
investing only in surplus cash with major financial institutions; and
• comparing the maturity profile of financial liabilities with the realisation profile of
financial assets.
Borrowings, trade and sundry payables are expected to be paid as followed:
Contractual Cash flows
Less than 3 months
3 months to 12 months
1 to 5 years
NOTE 27: SHARE BASED PAYMENTS
Types of share-based payment plans
Employee share option plan
Consolidated Group
2018
$
2019
$
-
-
-
-
7,383,500
722,827
8,151,623
16,257,950
Share options are granted to executives and staff at the discretion of the Board of Directors. Share
options are only granted to Director’s after approval by shareholders. The plan is designed to align
participants’ interests with those of shareholders by increasing value of the Company’s shares.
Under the plan, the exercise price of the options is set by the Board of Directors at the time of issue.
Management Incentive Equity Plan
Following shareholder approval, shares were issued at market value to the Managing Director and
were funded by a limited recourse loan. The share issue is not recognized as issued capital and is
treated as a share option issue in accordance with accounting standards. The plan is designed to
align participants’ interests with those of shareholders by increasing value of the Company’s shares.
During the financial year, the Company announced the departure of Michael Ottaviano from the
position of Managing Director and Chief Executive Officer with effect from 30 September 2018. In
accordance with Michael Ottaviano’s departure, the shares issued to him pursuant to the Plan were
returned to the Company in accordance with the limited recourse loan.
60
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 27: SHARE BASED PAYMENTS (CONTINUED)
Consultant & financier share options
Share options are granted to consultants at the discretion of the Board of Directors for services provided
to the Consolidated Group. The exercise price of the options is set by the Board of Directors at the time
of issue.
Consultant & financier shares
Shares are granted to consultants and financiers at the discretion of the Board of Directors for services
provided to the Consolidated Group.
No shares or options were issued to consultants and financiers during the financial year ended 30 June
2019 (2018: 35,000,000) in relation to fees for the restructure of $2,800,000 in convertible notes (refer to
Note 17(i)). No other shares or share options were issued during the financial year (2018: Nil) in relation
to the above share-based payment plans.
Total options outstanding and exercisable are as follows:
Consolidated Group
Number
of options
Weighted Average
Exercise Price
Outstanding options at 1 July
2018
Granted
Exercised
Expired
Outstanding at 30 June 2019
Exercisable at 30 June 2019
95,100,000
10,000,000
-
(60,100,000)
45,000,000
45,000,000
$
0.0609
0.0016
-
0.054
0.0502
0.0502
The options outstanding at 30 June 2019 had a weighted average exercise price of $0.0609 and a
weighted average remaining contractual life of 1.87 years. Exercise prices range from $0.016 to $0.06 in
respect to options outstanding at 30 June 2019.
The fair value of the equity-settled share options granted of options issued during the year is estimated
as at the date of grant using the Black-scholes model taking into account the terms and conditions upon
which the options were granted. These are the key inputs to value the options.
Grant Date
Expiry Date
Exercise Price
Expected Volatility
Number of options
Value per option
Total Value of options issued during year
10 Oct 2018
10 Oct 2021
$0.016
75%
10,000,000
$0.001
$10,000
61
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 28: PARENT INFORMATION
The following information has been extracted from the books and
records of the parent and has been prepared in accordance with
Australian Accounting Standards.
STATEMENT OF FINANCIAL POSITION
2019
$
2018
$
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Non-current liabilities
TOTAL LIABILITIES
TOTAL NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
STATEMENT OF COMPREHENSIVE INCOME
Total loss
Total comprehensive expense
Guarantees
1,116,867
9,070,880
15,068,574
73,982,287
16,185,441
83,053,167
11,403,289
4,652,229
49,484
4,581,374
11,452,773
9,233,603
4,732,668
73,819,564
194,372,911
196,060,984
850,000
3,009,954
(190,490,243)
(125,251,374)
4,732,668
73,819,564
(70,776,974)
(50,916,679)
(70,776,974)
(50,916,679)
Pursuant to the Joint Venture arrangements between Energy Made Clean Pty Ltd (EMC) and Lendlease
Services Pty Limited (LLS), Carnegie Clean Energy Limited (CCE) and Lendlease Construction
Australia Holdings Pty Ltd (LLCAH) have entered into a Deed of Cross Guarantee dated 16 December
2016 (Guarantee). Under the Guarantee, CCE and LLCAH each guarantee the performance of their
respective subsidiaries EMC and LLS under the EMC Lendlease Joint Venture.
62
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 28: PARENT INFORMATION (CONTINUED) Under the Guarantee, CCE and LLCAH each guarantee
the performance of their respective subsidiaries EMC and LLS under the EMC Lendlease Joint Venture.
Contractual commitments
The Company had entered into the following contractual commitments for the acquisition of property, plant and
equipment:
Consolidated Group
Capital Commitments
Not later than 1 year
Later than 1 year but not later than 5
years
Later than 5 years
2019
$
2018
$
-
-
-
-
2,038,705
-
-
2,038,705
Capital commitments consist of the Group’s portion of commitments to build the Northam Solar Farm
due for completion in the 2019 financial year.
NOTE 29: INVENTORY
Balance at beginning of period
Add: Purchases during period
Less: loss of control of entity with inventory
Less: Cost of goods sold
Balance at end of period
Inventory is broken down as follows:
Raw materials
Goods in transit
Work in progress
Consolidated Group
2018
2019
$
$
464,937
1,389,218
-
10,660,324
(464,937)
-
-
-
-
-
-
-
(11,584,605)
464,937
464,937
-
-
464,937
63
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 30: LOSS FROM DISCONTINUED OPERATIONS
On 14 March 2019 EMC was placed into voluntary administration. After holding meetings with creditors,
the Administrators are taking steps to liquidate EMC. In addition, the loss from Northam Solar farm was
also classified as a discontinued operation. The total losses written off are as follows:
Loan write off EMC
Net debtors/creditor write off EMC
Investment write off EMC
Investment write off EMC Engineering (subsidiary of EMC)
Loss for the financial year from discontinued operations
Gain on write off Accumulated Losses EMC
Loss from discontinued operations
2019
$
11,798,583
5,224,274
8,148,668
85,000
5,258,049
(21,950,366)
8,564,208
NOTE 31: DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
Carnegie holds a 11.3% interest (2018: 50%) in the Northam Solar Farm (NSF)(to be disposed of under
the DoCA), which expects to create large scale generation certificates (LGCs) from its renewable energy
generation in future periods. Under the Renewable Energy Target Scheme (RET Scheme) renewable
energy producers create a certificate for each megawatt-hour of renewable electricity they produce and
liable entities are required to surrender LGCs to the Clean Energy Regulator. The price of LGCs is
determined based on supply and demand for these certificates and may be impacted by the actions of
market participants and any changes to existing government regulations.
The NSF holds agreements with various parties to supply LGCs at future dates. These forward contracts
are not designated as cash flow hedges and are entered into for periods consistent with the expected
renewable energy generation from the Partnership’s assets. Any of these actions or reduced confidence
in the RET scheme could adversely affect the Group’s revenue and future financial performance.
The fair value of the LGCs are based on quoted forward markets, being level one inputs in the fair value
hierarchy. Where a LGC is expected to be settled within 12 months they are to be disclosed as current.
All other LGCs are disclosed as non-current.
Current Asset
2019
$
2018
$
Opening balance
Movement in fair value of derivatives reflected in Profit and Loss
Closing balance
Non-Current Liability
Opening balance
Movement in fair value of derivatives reflected in Profit and Loss
Closing balance
Net loss on derivatives not designated as hedging instruments
Current asset derivatives
Non-current liability derivatives
64
9,750
(9,750)
-
(18,050)
18,050
-
-
-
-
-
9,750
9,750
-
(18,050)
(18,050)
9,750
(18,050)
(8,300)
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 32: ASSETS HELD FOR SALE
Northam Solar Farm Partnership
At 1 July 2018 the Company held a 50% interest in the Northam Solar Farm Joint
Arrangement, a 10 MW solar power station with Indigenous Business Australia and Bookitja.
As announced on 12 December 2018, the company completed the partial sale of its 50%
interest in the Joint Arrangement to Indigenous Business Australia (IBA) retaining 11.33%.
The Company sold the remaining 11.33% investment in October 2019 for $200,868.
Loss on revaluation of investment held for sale
Northam Solar Farm
Net Assets at 1 July 2018
Net change in value of assets FY 19
Less impairment charge
Value of assets held for sale
$
3,016,909
(123,868)
(2,692,173)
200,868
NOTE 33: COMPANY DETAILS
The registered office and Principal place of business of the Company is:
Carnegie Clean Energy Limited
21 North Mole Drive
NORTH FREMANTLE WA 6159
65
CARNEGIE CLEAN ENERGY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT,
ADMINISTRATORS APPOINTED)
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 16 to 65, are in accordance with the
Corporations Act 2001 and:
a.
b.
comply with Accounting Standards and the Corporations Regulations 2001;
give a true and fair view of the financial position as at 30 June 2019 and of the performance for
the year ended on that date of the Consolidated Group;
2.
3.
the financial statements comply with International Financial Reporting Standards as set out in Note 1;
the remuneration disclosures that are contained in the Remuneration Report in the Directors Report
comply with the Corporations Act 2001 and the Corporations Regulations 2001; and
4.
the Managing Director and Chief Finance Officer have each declared that:
a.
b.
the financial records of the company for the financial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with the Accounting Standards;
and
c.
the financial statements and notes for the financial year give a true and fair view;
5.
In the Director’s opinion, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
GRANT J. MOONEY
Director
Dated this 25th day of October 2019
66
INDEPENDENT AUDITOR’S REPORT
To the members of Carnegie Clean Energy Limited (Subject To Deed Of Company Arrangement,
Administrators Appointed)
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Carnegie Clean Energy Limited (Subject To Deed Of
Company Arrangement, Administrators Appointed) (“the Company”) and its controlled entities (“the
Consolidated Group”), which comprises the consolidated statement of financial position as at 30
June 2019, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Consolidated Group is in accordance with
the Corporations Act 2001, including:
a) giving a true and fair view of the Consolidated Group’s financial position as at 30 June 2019
and of its financial performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Consolidated Group in
accordance with the auditor independence requirements of the Corporations Act 2001 and the
ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110
Code of Ethics for Professional Accountants (“the Code”) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report, which indicates that a material uncertainty exists
that may cast significant doubt on the Consolidated Group’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter described in the Material
Uncertainty Related to Going Concern paragraph above, we have determined the matters
described below to be the key audit matters to be communicated in our report.
67
Key Audit Matter
How our audit addressed the key audit matter
Revenue and the related risk of fraud
Note 2 of the financial report
The Consolidated Group predominately generates
revenue through its Microgrid and large scale solar
projects.
Due to the presumption of risk over revenue
recognition as prescribed by
the Australian
Auditing Standards Board, this area has been
subject to significant audit procedures.
Fair value of intangible assets
Note 13 of the financial report
As at 30 June 2019, the Consolidated Group had
an intangible assets balance of $15.0 million which
related to capitalised development costs and
intellectual property.
Under AASB 136 Impairment of Assets, finite life
intangible assets are subject to an impairment test
should indicators of impairment arise.
We consider the recoverable amount of intangible
assets to be a key audit matter as it involves
involving subjectivity and
complex matters
the users’
is material
judgement,
understanding of the financial statements as a
whole and it required significant auditor attention
and communication with those charged with
governance.
to
it
Our procedures included but were not limited to
the following:
- We reviewed the Consolidated Group’s
accounting policy with
the
recognition of revenue and the deferral of
revenue and costs over the length of each
contract or subscription agreement with each
customer;
- Documented
of
Management’s accounting policies for the
Group’s contract revenues
understanding
regards
our
to
- We selected a sample of
revenue
transactions and agreed the transaction to
the underlying supporting documentation;
- We performed audit procedures to ensure
that revenue is materially complete by
examining procedures surrounding cut-off at
balance date and ensuring, for a sample of
item
purchase
sales
selected
transaction; and
- We assessed
transactions,
corresponded
the
Consolidated Group’s disclosures in respect
to revenue, deferred revenue and deferred
costs.
the adequacy of
that each
to
a
Our procedures included but were not limited to
the following:
- We reviewed the valuation obtained by
management from an independent expert
and the valuation approach adopted;
- We considered the ability to rely on the work
of the independent expert;
- We considered material assumptions and
calculations used to calculate the fair value
of the asset;
- We reviewed management’s assessment in
relation to recoverable amounts; and
- We assessed the appropriateness of the
disclosures included in the relevant notes to
the financial report.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Consolidated Group’s annual report for the year ended 30 June 2019,
but does not include the financial report and our auditor’s report thereon.
68
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the
Consolidated Group to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend
to liquidate the Consolidated Group or to cease operations, or have no realistic alternative but to
do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
-
-
- Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Consolidated Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Consolidated Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial report or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Consolidated Group to cease to continue as a going concern.
69
-
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2019.
In our opinion, the Remuneration Report of Carnegie Clean Energy Limited (Subject To Deed Of
Company Arrangement, Administrators Appointed) for the year ended 30 June 2019 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
25 October 2019
N G Neill
Partner
70
Additional Information
Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this
report. The information was prepared based on share registry information processed up to 28 October 2019.
Spread of Holdings
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Number of holders of ordinary shares
247
509
822
4,464
4,877
Number of Holders: 10,919
Number of Shareholders holding less than a marketable parcel: 8,677
SUBSTANTIAL SHAREHOLDERS
Shareholder Name
Log Creek Pty Ltd
Eminent Holdings Pty Ltd
Asymmetric Credit Partners Pty Ltd
Number of Shares
1,486,826,795
801,405,194
641,750,000
%
13.34%
7.19%
5.76%
Voting Rights: All ordinary shares carry one vote per share without restriction. Options for ordinary shares do not carry any
voting rights.
Statement of Quoted Securities: Listed on the Australian Stock Exchange are 11,141,452,450 fully paid shares. All ordinary
shares carry one vote per share without restriction. Options for ordinary shares do not carry any voting rights.
Company Secretary: The name of the Company Secretary is Grant Jonathan Mooney.
Registered Office: The registered office is at 21 North Mole Drive, North Fremantle WA 6169. The telephone number is (08)
6168 8400
TWENTY LARGEST HOLDERS OF EACH CLASS OF QUOTED EQUITY SECURITIES
ORDINARY FULLY PAID SHARES
Shareholder Name
Eminent Holdings Pty Ltd
Log Creek Pty Ltd
HFM Investments Pty Ltd
Log Creek Pty Ltd <88 Green A/c>
Grant Mooney
Asymmetric Credit Partners Pty Ltd
Richcab Pty Ltd
Citicorp Nominees Pty Ltd
ACN 112 940 057 Pty Ltd
Kenneth Roger James
Asymmetric Arbitrage Pty Ltd
Dawnray Pty Ltd
JP Morgan Nominees Australia Pty Ltd
John Rix Davidson
Prosperion Wealth Management Pty Ltd
Flourish Super Pty Ltd
Matthew Peter Fraser
Carl & MR Gianatti
Scott D & BV Grogan
Cathben Pty Ltd
TOTAL
71
CARNEGIE CLEAN ENERGY
Number of Shares Percentage of Capital
800,000,000
584,099,520
460,000,000
400,000,000
250,000,000
250,000,000
243,765,000
242,376,186
200,000,000
200,000,000
200,000,000
200,000,000
156,545,753
148,795,309
100,000,000
100,000,000
96,325,162
77,935,589
70,000,000
67,524,355
4,847,366,874
7.18
5.24
4.13
3.59
2.24
2.24
2.19
2.18
1.80
1.80
1.80
1.80
1.41
1.34
0.90
0.90
0.86
0.70
0.63
0.61
43.54%
HOLDERS OF SECURITIES IN AN UNLISTED CLASS
OPTIONS
Optionholder Name
Grant Mooney
Asymmetric Credit Partners Pty Ltd
Eminent Holdings Pty Ltd (ACN 009 265 972)
Log Creek Pty Ltd (ACN 100 874 851) <88 Green A/C>
No. Options
250,000,000
250,000,000
800,000,000
400,000,000
Dawnray Pty Ltd (ACN 100 971 980) ATF The HWBL Superannuation Fund
200,000,000
Richcab Pty Ltd (ACN 069 335 459)
Asymmetric Credit Partners Pty Ltd
HFM Investments Pty Ltd
Jonathan Fievez
Asymmetric Credit Partners Pty Ltd
Wolf Capital Pty Ltd
Chris Dale
200,000,000
200,000,000
460,000,000
10,000,000
25,000,000
6,250,000
3,750,000
Exercise Price
$
Exercise
Date
0.00125
0.00125
0.0015
0.0015
0.0015
0.0015
0.0015
0.0015
28 Oct 24
28 Oct 24
28 Oct 22
28 Oct 22
28 Oct 22
28 Oct 22
28 Oct 22
28 Oct 22
0.016
10 Oct 21
0.06
0.06
0.06
24 Jan 24
24 Jan 24
24 Jan 24
HOLDERS OF RESTRICTED SECURITIES
Convertible Notes (6-month conversion restriction)
Noteholder Name
Eminent Holdings Pty Ltd (ACN 009 265 972)
Log Creek Pty Ltd (ACN 100 874 851) <88 Green A/C>
Dawnray Pty Ltd (ACN 100 971 980) ATF The HWBL Superannuation Fund
Richcab Pty Ltd (ACN 069 335 459)
Asymmetric Credit Partners Pty Ltd
HFM Investments Pty Ltd
Total
Restricted securities are escrowed from conversion until 28 April 2020.
Number of Notes
40
20
10
10
10
23
113
Value $
1,000,000
500,000
250,000
250,000
250,000
575,000
2,825,000
ASX WAIVERS
Nature of Waiver
Listing Rule 7.11.3 - ratio of rights issue offer
Listing Rule 10.1 - granting of security to director related entity
Listing Rule 10.1 - granting of security to director related entity
Listing Rule 7.3.2 - Issue of securities subject to Shareholder Approval beyond 3 months
Listing Rule 10.13.3 and 10.13.5 - Issue of securities subject to related party Shareholder Approval
beyond 1 month
Listing Rule 14.7 - Issue of securities subject to related party Shareholder Approval beyond 1
month
Date Granted
9-Jul-19
9-Jul-19
6-Aug-19
6-Aug-19
6-Aug-19
6-Aug-19
CARNEGIE CLEAN ENERGY
72
The global need for renewable energy is critical.
Wave energy is an immense untapped resource.
Carnegie harnesses wave energy through our deep expertise,
innovative technology and passionate people.