Carnegie Clean Energy – Annual Report 2020
2020
Annual Report
i
Carnegie Clean Energy – Annual Report 2020
Corporate Directory
Directors
Terry Stinson
Michael Fitzpatrick
Grant Mooney
Anthony Shields
Non-
Non-
Non-
Non-
Executive Chairman
Executive Director
Executive Director
Executive Director
Share Registry
Automic
Group
GPO Box 5193
Sydney NSW 2001
1300 288 664 (within Australia)
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 600
Website: www.carnegiece.com
ASX Code: CCE
Chief Executive Officer
Jonathan Fiévez
Company Secretary
Grant Mooney
Registered Office
21 North Mole Drive
North Fremantle, WA 6159
Postal Address
39
PO Box
North Fremantle WA 6159
Telephone:
(08) 6168 8400
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Carnegie Clean Energy – Annual Report 2020
Table of Contents
Corporate Report
Chairman’s Report ................................................................................................................................ iv
Company Overview ............................................................................................................................... vi
Review of Operations ............................................................................................................................. x
Corporate Governance....................................................................................................................... xviii
Additional Information...................................................................................................................... xxvii
Financial Report
Directors’ Report .................................................................................................................................... 3
Auditor’s Independence Declaration ................................................................................................... 12
Consolidated Statement of Profit or Loss and Other Comprehensive Income ................................... 13
Consolidated Statement of Financial Position ..................................................................................... 15
Consolidated Statement of Changes in Equity .................................................................................... 16
Consolidated Statement of Cash Flows ............................................................................................... 17
Notes to the Financial Statements....................................................................................................... 18
Directors’ Declaration .......................................................................................................................... 47
Independent Auditor’s Report ............................................................................................................. 48
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Carnegie Clean Energy – Annual Report 2020
Chairman’s Report
On behalf of the Carnegie Clean Energy team and my fellow directors, I
Last year, Jonathan
am pleased to provide an overview of the past year.
Fievez and I presented Carnegie’s new strategy for success and our key
goals and milestones for the year.
We also committed to keep
shareholders informed of our progress and have provided updates to
shareholders throughout the year.
even with the impacts of
achieved progress along the
and are currently below budget. Most notably, the team celebrates the
successful completion of the Wave Predictor and Generator Study. Great
progress was made over the past 12 months and delivering on the
milestones for the past year has hopefully demonstrated to our funding
and technology partners, our future customers, and to our valued
shareholders, that the company is delivering on our commitments.
In summary, the good news is that
Jonathan and the team have
Pathway objectives
COVID 19,
Digital
Development
TERRY STINSON
Chairman
Carnegie continues to maintain a simplified and easy to manage balance sheet, enabled by our new
more cost-effective Digital Development Pathway.
through the year and the
Company has approximately
Carnegie’s ten years plus of investment in intellectual property (IP) and know-how, combined with
our new and significant learnings, are all focused on deriving future revenue from wave energy
related licensing and royalty activities.
The team has frugally managed shareholder funds
A$3.5m in in the bank at
October 9, 2020.
As I highlighted last year, future shareholder funding may be required to bridge the gap to license
and royalty revenues and to realise our long-term potential.
energy technical and commercial development efforts require funding.
been successfully identifying, developing and securing sources of non-debt funding over the past
year, and for the coming year.
Carnegie plans to continue to win and deploy appropriate Government
and other funding to support the future development and commercialisation of the CETO technology.
Carnegie’s key asset, the Garden Island Microgrid is also an option to offset the requirement for new
funding or be used to reduce debt as required.
As our shareholders know well, wave
To address this, the team has
Carnegie is making great strides toward meeting our full potential. As flagged in our regular updates
over the past six months, COVID 19 has impacted our Digital Development Plan and all key milestones
have been pushed out by a quarter. The team will work over the coming year to try and recover lost
time with the over-all objective to deliver on the original two-year plan.
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Carnegie Clean Energy – Annual Report 2020
Mike
Anthony
Shields,
Fitzpatrick, and
Carnegie’s ultimate success.
Carnegie team and board continue to be committed to achieving
The
My fellow directors,
success, are all very involved in the business and have made significant financial investments in
Carnegie’s future. Over the past year, Carnegie’s CEO, Jonathan Fiévez, provided great motivation for
the team and technical and commercial leadership as we deliver on milestones and successfully
navigate the recent and unique business operating environment created by
driving goal is to continue to achieve more for less, operating the business under a very high-tech,
frugal and efficient culture.
Mooney are all committed to
COVID 19.
Carnegie’s
Grant
The past year’s achievements have reinforced our belief that the
contributor to making our planet a cleaner and better place to live.
Attenborough’s “A Life on Our Planet”. In his closing remarks, Attenborough tells the audience that
one way to restore our planet to health and potentially avoid our future extinction is to quickly move
to using only renewable sources of energy. I believe that he is right and wave energy provides a new
and viable way, along with other renewable energy sources, of achieving this goal.
CETO technology can be a major
I recently watched
David
On behalf of my fellow directors and the team, please accept our gratitude for your continued
support. I look forward to the coming year and to presenting Carnegie’s progress and prospects for
the future at the upcoming AGM and in subsequent communications and shareholder meetings.
Terry Stinson
Chairman
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Carnegie Clean Energy – Annual Report 2020
CCE) is an
Carnegie’s
CETO wave energy
Energy (ASX:
ASX-listed technology company dedicated to developing and
Company Overview
Carnegie
Clean
commercialising the
CETO wave energy technology and associated products.
technology captures the energy in ocean waves and converts it into zero-emission electricity.
In 2019, Carnegie refocused the business as a technology developer, utilising a Digital Development pathway
to prove its
CETO wave energy technology and working with strategic partners to deploy the technology.
Carnegie’s focus is now on implementing technical advancements and intelligent control to reduce the cost
and increase the performance of the CETO technology in order to maximise the commercial attractiveness of
this tried and tested technology.
As a technology developer,
commercialisation of the technology and associated products without the distraction and high capital cost of
building and deploying large projects, which can be delivered effectively by strategic partners.
Carnegie is well placed to deliver on its vision by building on years of technology and IP development whilst
incorporating innovative new approaches to the challenge/opportunity of wave energy. Initially established
as a vertically integrated wave energy company focused on developing and deploying the
around the globe, Carnegie pivoted to be an ocean energy technology developer with the near-term goal of
delivering a virtual protype of an optimised CETO Unit to the market.
Carnegie can maintain a lean, focused team who are driven towards the
CETO technology
The CETO system
energy which
renewable
Named after a Greek sea goddess, Carnegie’s
CETO wave energy technology offers the
potential to revolutionise marine renewable
power and deliver carbon reduction through
can
the use of wave
complement
energy
other
technologies.
The CETO system is a fully submerged, point
absorber type wave energy technology
affording minimal visual impact from shore.
A submerged buoy sits a few metres below
the surface of the ocean and moves with the
ocean’s waves.
Power Take-Off (PTO) system that converts
the wave motion into grid-ready electricity
This orbital motion drives a
.
CETO Advantages
No Visual Impact – fully submerged and invisible from shore
Developed & Proven – over 10 years of onshore, tank and tens of thousands of hours of in-ocean testing
Flexible – operates in variety of water depths, swell directions, tides & seafloor conditions
Storm Survivability – fully submerged & extreme wave mitigation system
Security – provides emissions free sustainable energy and water security to countries & islands
Scalable – modular array design
Clean – minimal environmental impact, co-exists with and encourages marine life
Desalination – zero-emission freshwater co-production allows pseudo energy storage
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Carnegie Clean Energy – Annual Report 2020
Trends in renewable energy
The world is continuing to move away from reliance on traditional fossil fuels and is increasingly looking for a
diversified portfolio in order to fully decarbonise the energy system. Wave energy has the benefits of
consistency and predictability which allow it to firm up more variable renewables like solar and wind, avoiding
the need for enormous batteries. There are also locations where wave may be the only renewable energy that
is practical, such as mountainous or heavily forested islands. Carnegie is set to take advantage of this global
movement towards renewable energy and decarbonisation.
energy include:
1. Increased demand for electricity
Key trends outlining the potential for wave
: global population
is forecast to increase nearly 34% by 2050 to 9.47
billion and there is expected to be a 45% increase
global energy demand.
2. Climate change:
increased recognition of climate
change is driving need to decarbonise the economy.
3. Corporate environmental, social and governance
increased focus on sustainability in business is
(ESG):
driving
ESG reporting by businesses and changing
investor behaviours as they look to invest in socially
conscious corporates.
4. Demand for renewables:
renewables are replacing
Even the largest
coal and gas generated electricity.
traditional oil & gas entities globally are investing in
renewable
consistent and predictable and can support other more variable renewables in an energy portfolio.
projects.
energy
power
Wave
is
5. Blue Economy:
growing recognition of the value of the Blue Economy. Ocean related industries contribute
more than $1.5 trillion in value added to the overall economy each year.
6. Applied learning rates reduce energy cost:
more established renewable energies like wind and solar have
proven how the levelised cost of energy (LCOE) can be reduced over time making these energy sources
increasingly attractive and competitive compared to traditional fossil fuel sources.
Markets
Carnegie has evolved into an advanced technology company that uses state of the art computing, modelling
design and engineering techniques to help owners, developers, financiers and other partners build and
Carnegie understand and engage with the
It is important that
operate ocean energy projects of all scales.
markets for wave energy technologies to ensure we work with the right partners and support the growth of
this emerging sector.
The primary near-term market opportunities for
communities as well as demand locations (such offshore oil and gas, aquaculture etc). The primary drivers for
CETO technology are island and remote
Carnegie’s
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Carnegie Clean Energy – Annual Report 2020
targeting island, remote and demand locations is the high incumbent cost of energy and over-reliance on fossil
fuels which is problematic from both energy security and climate change perspectives.
In some of these
markets, like the demand market, access to energy is challenging or limited and new energy systems that can
incorporate on-site resources like wave energy are required. Ultimately these markets are a first step on the
journey to larger
scale grid market remains a significant opportunity for wave energy technologies.
CETO deployments with the ultimate target of utility scale power production as the utility
Remote and
Islands
Demand
locations
Utility Scale
Near-term Market Opportunities
Future Market Opportunity
Carnegie Business Plan
Carnegie has refocused its strategy and developed a roadmap to maximise value from our products and deliver
the next CETO project to generate sustained and growing operational revenue and sustainable profit.
Our new business plan is focused on 5 strategic themes with 14 key initiatives to deliver Carnegie’s goals, these
themes outlined below are:
1. Create Unique Competitive Products:
develop wave energy technology and IP that drives Carnegie’s
2.
position as the most successful ocean energy company and preferred partner to project developers.
Build a Market for Wave Energy:
education and increasing awareness of the wave energy potential worldwide
3. Foster the Carnegie Ecosystem:
drive success of Carnegie’s wave energy technology through fostering
create demand for wave energy through market intelligence,
a collaborative network and developing key partnerships
4. Secure Financial Stability:
secure long-term financial sustainability through a focus on technology
realisation and commercialisation in a lean operating environment
5. Cultivate an Aligned and High Performing Team:
ensure Carnegie has the skills, culture and capability
required to deliver on its business plan and strategic initiatives
Carnegie’s Team, Purpose and Vision
Carnegie is a team of enthusiastic and creative individuals working
collaboratively to develop CETO. The team is guided by core values:
Resilient
Creative
Aware
Individuality
Teamwork
Carnegie’s team of employees,
Directors and shareholders
share a passion to deliver on Carnegie’s purpose and vision.
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Carnegie Clean Energy – Annual Report 2020
Carnegie’s purpose is what drives the team towards our goal. Carnegie has defined our purpose as:
The long-term picture of success for Carnegie is described by the updated vision:
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Carnegie Clean Energy – Annual Report 2020
Review of Operations
Digital
Development Pathway,
Carnegie is integrating elements of machine learning, advanced
Carnegie made the decision to pivot away from the high cost model of wave energy project
CETO Wave Energy Technology - Digital Development Pathway
In 2019
development and full scale physical demonstration to pursue a smarter and more cost-efficient digital
development pathway that leverages advances in machine learning (a subset of artificial intelligence) and
computational power.
Through this
electrical machines and optimised hydrodynamics into the
innovation phase is to improve
term costs and risks associated with project deployments and the CETO commercialisation pathway.
Carnegie will validate the improved
CETO technology developed through the
through the use of virtual models that emulate in-ocean performance and small-scale component testing in
order to accurately demonstrate the performance, behaviour and cost of the full-scale design.
accepted computational design tools, the Company will also utilise the acquired knowledge of its staff to build
a virtual prototype of an improved, more competitive CETO Unit.
Through-out the digital development phase,
target partners, project developer(s) and equipment manufacturer(s).
through CETO technology license fees, royalties and technical / engineering services fees.
CETO performance and reduce technology costs, thereby reducing the long-
Carnegie will be identifying and cultivating relationships with
CETO technology. The intent of this rapid
Future revenues to be generated
Development Pathway
Building on
Digital
Carnegie is undertaking a portfolio of core innovations that were identified as having significant potential to
reduce cost and improve performance of CETO and fitting with the competencies of the Carnegie team. These
high impact innovations are being led by
additional expertise where it provides benefit to the process and technology.
The key core activities planned and underway are:
Carnegie with partners and contractors brought in to provide
Achieving intelligent wave energy control
Innovating a novel electric power take-off (PTO) system
Optimising the hydrodynamics and architecture of CETO
Developing a virtual prototype
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Carnegie Clean Energy – Annual Report 2020
CETO
Future development will extend the controller to avoid damaging waves in storms, which will enable
Achieving Intelligent Wave Energy Control
One of the key innovations in the Digital Development Pathway targets the development of an intelligent wave
energy control system that makes use of machine learning, a form of artificial intelligence, to increase the
amount of energy captured from the waves and thereby increase the annual electric power yield of a
Unit.
cost and risk reductions.
Machine learning can deliver significant benefit to the performance of
controllers for the generating units that can accurately predict and adjust to wave conditions in real time,
absorbing considerably more energy in moderate seas. Future development will extend the controller to avoid
damaging forces in extreme seas, which will enable cost and risk reductions. In the long term,
Carnegie is
working towards a future controller that has an objective function to minimise the cost of energy with
Reinforcement
changing environment.
Carnegie’s suite of intelligent control products is comprised of the following sub-components, the first of which
has been developed over the past year:
Learning allowing the controller to continually learn and improve while adapting to the
CETO through the ability to deliver
1) Wave Predictor
A machine learning (ML) based wave predictor that can predict the key
-
characteristics of waves 30 seconds into the future. This provides data that can be used to
determine the forces that will be applied to the CETO Unit into the future. This then feeds into the
Wave Solver.
2) Wave Solver
- An ML based hydrodynamic solver which utilises the output of the Wave Predictor
to compute the hydrodynamic forces applied by the waves on the system faster than real time.
This provides data that can be used by the next step, the Wave Controller, to decide how the CETO
device should react to upcoming waves in order to maximise power production.
3) Wave Controller
An intelligent controller, which utilises the outputs of the Wave
-
Solver to
optimally control the power take off (PTO) and maximise a CETO Unit’s energy capture.
MARINET2
Carnegie’s data analysis team
European funding mechanism, at no cost to
Carnegie has developed and tested the Wave Predictor.
GB of virtual wave data. The data analysis team then
Centre’s state of the art supercomputing resources to run a non-linear
Wave Predictor
During the past year,
utilised the Pawsey Supercomputing
wave propagation model and generate over 250
successfully delivered a Wave Predictor which achieves excellent accuracy.
Following on from the successful development of the Wave Predictor, a tank testing campaign was undertaken
to validate the tool on physical waves. Access to the Cantabria Coastal and Ocean Basin, located in Santander,
Spain, was secured through the
Carnegie. The
campaign took place in July 2020 and during this testing campaign over 200 wave tests were run, generating
over 15 GB of physical data.
The tank testing campaign was an important milestone in the development of the Wave Predictor, as it allows
Carnegie’s analysis team not only to validate the tool, but also to further optimise it.
measured information, the data generated at the tank includes noise and other “real world” imperfections,
which the wave predictor needs to cope with to allow its use in the CETO control system and other industrial
applications. This allows Carnegie’s engineers to take a step beyond what had been achieved with numerical
data, and to make the tool ocean-ready. The technical team is now confident that the wave predictor can
accurately predict long and short crested waves for a range of sea states.
In
Carnegie’s website.
Carnegie released an animation explaining the wave predictor which can be found on
September 2020,
As with any sensor-
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Carnegie Clean Energy – Annual Report 2020
Carnegie’s Wave Predictor animation (left), Magnus supercomputer at Pawsey (top right) and Carnegie
engineer analysing data produced through wave tank testing (bottom right
)
Wave Solver
Internal work has been performed to progress the development of the machine learning based hydrodynamic
wave solver, the link between knowing the upcoming conditions via the wave predictor and then optimising
the performance of the CETO Unit via the Wave Controller. Progress on the Wave Solver was slowed by the
challenge of recruiting Hydrodynamic Engineering resources imposed by the COVID19 pandemic. Carnegie has
now hired a new recruit to fill this gap. Carnegie has also been working with control industry partners on the
development of an alternative wave solver which uses a different set of inputs.
CETO
Carnegie team has developed and proven a controller for a simplified model of
Wave Controller
The Carnegie team has made encouraging progress on the development of the Intelligent Controller for CETO.
This work is being undertaken through an internal process to develop a machine learning based
Intelligent Controller as well via additional parallel controller development efforts being undertaken alongside
external collaborative partners.
Internally, the
CETO (one
degree of freedom). The controller has been tested numerically and is able to operate the PTO model within
force and displacement constraints, while delivering an increase in annual average power over the reference
spring damper controller previously utilised for CETO. The team is now increasing the complexity of the model
to further develop and test the ML based controller for real world application.
In addition to this, Carnegie has been collaborating with University of Adelaide’s (UoA) world-leading control
team on the development of a physics-based advanced controller. This work has also delivered promising
results with increases in annual average power over the reference controller.
undertaken to explore options to further improve these results.
Finally, Carnegie is investigating the option of making use of an alternative Machine Learning technique, called
Reinforcement Learning (RL), in the CETO controller. Carnegie is liaising with key industrial stakeholders in the
field of RL as well as with academic partners to advance this work.
Carnegie will continue to progress these controller developments with the aim to select the controller that is
best able to optimise performance of the
undertaken mid-2021 to confirm
controller. This test will involve a model scale the
controller will
be implemented to
baseline controller will be measured.
A second round of wave tank testing will be
of
PTO and its performance improvement over
PTO. The intelligent wave energy
CETO Unit.
the
Additional work is being
the intelligent wave
CETO Unit and its
control the
improvement
performance
a
energy
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Carnegie Clean Energy – Annual Report 2020
Innovating a novel electric power take off (PTO) System
An electric power take-off (PTO) system has the potential to offer significant efficiency and reliability
improvements for
CETO compared to the previously used hydraulic PTO. Recent developments in the wave
energy converter (WEC) space have seen leading developers, including
Power Take
can enable. The PTO is a critical system within the WEC, converting prime mover kinetic energy to electrical
energy. Carnegie is looking to apply direct drive rotating electrical machines to its PTO, leveraging advances in
wind power and electric vehicles on direct drive machines.
Carnegie, converge toward rotary
Off (PTO) systems, principally motivated by the levelised cost of energy (LCOE) reduction these
PTO
Some of the key activities underway within the
innovation stream during the last year include the
identification of a low cost electrical generator that
meets the PTO requirements, the development of a
mooring tensioner (reducing the electrical generator
short
efficient
requirements and providing
term energy
a
development of
translation system converting the motions of the WEC
prime mover into rotary motion and driving the
electrical generator.
storage) and the
an
Adopting existing electrical generator products and technologies is part of
EV market shows promise and may provide
Carnegie with the opportunity to leverage
Electrical Generators
Carnegie has canvassed the latest electrical drive technology from around the world and widely engaged with
potential generator suppliers from several industries including, wind power, machine tools and various Electric
Vehicle (EV) platforms including marine, trucks and automobiles. The engagement with several leading
suppliers in the
significant volume/cost benefits that can be realised from the increasing EV uptake worldwide. Carnegie has
consolidated information gathered from various markets and potential suppliers into a comprehensive
electrical generator product landscaping and market study.
The applications vary in size and power providing
Carnegie with the opportunity to scale the PTO to support different sizes of CETO device and identify the best
size/power/cost configurations.
Carnegie’s roadmap to compete with existing energy sources and achieve commercial success.
The exact generator selected will depend on the outcome of the scale study ongoing as part of the
Architecture activities.
preferred. This technology is heavily utilised in the wind industry and has found particular application for in-
wheel motors in the auto, truck and bus EV market. Furthermore, a strong and competitive supply base exists
serving the marine propulsion, machine tool and industrial market, where Carnegie can potentially leverage
volume and cost benefits from existing markets. PMGs generally lend themselves to high torque, low speed
applications, aligned with operation of most wave energy converters. The generator technologies and
products identified can be designed and built to be highly energy efficient across a broad operational range
that can be complimentary to the motion created by waves. Carnegie has developed thorough parametric cost
models for this technology, allowing exploration of the optimal CETO scale in relation to required generator
size.
Carnegie has also engaged with local engineering firms to explore opportunities for leveraging local expertise
PTO solutions. This includes explorations of electrification solutions
in heavy industry for development of
transferred from the mining industry. Exploration of locally sourced solutions is particularly important at this
present moment, with uncertainty associated with international manufacture and trade due to current and
future impacts of COVID 19.
Generator (PMG) technology will be
However, it is likely that
Permanent
Magnet
CETO
Translation and Tensioning Systems
More broadly, within the PTO innovation stream, development work continues on other sub-systems such as
the translation and tensioning systems which convert the buoy motion from linear to rotary and maintain
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Carnegie Clean Energy – Annual Report 2020
mooring tension respectively.
translation system and is progressing possibilities for jointly funded developments in this area.
Carnegie has engaged with a number of parties for development of the
with
Carnegie
Australia
calls the
collaboration
To unlock the potential of the rotary PTO
requires implementation of a method for
rotary mechanical energy storage and
mooring line pre-tension balancing. Such
a system, which
Mooring Tensioner was developed by
and is now
Carnegie
being further
developed
in
Advanced Composite Structures
(ACS-A), University of
ClimateKIC representing the
Ocean Energy Group (AOEG).
This work is being undertaken through a
project funded by the
Cooperative
The
BE
to
funding
Tensioner for
(MoTWEC) Project, a $1.6 million project
led by
and test the Mooring Tensioner including
Blue
Centre (BE
CRC awarded $850,000 of grant
the
Converters
support
Energy
Wave
Project will design
Economy
CRC).
Carnegie. This
Queensland and
Australian
Research
Mooring
design, suitably verified for
coupon/material testing and scale prototype testing. The Mooring Tensioner will be constructed using high
performance, light weight and durable fibre reinforced composites (known as Carbon-Fibre), allowing easier
integration to the space constrained WEC environment.
Carnegie’s objective is to deliver a reliable, cost-effective
Tensioner
systems. The funded
composite
systems
product opportunities and supporting the growth of the broader Blue
Economy. Carnegie’s novel electric PTO concept
be
tested onshore using a purpose-built test rig(s) in Carnegie’s
Fremantle facility in 2021.
Project will also explore the suitability of
Mooring Tensioner mechanisms to anchoring and tethering
application to real
developed will
Mooring
WEC
Aquaculture,
crossover
creating
Offshore
North
for
CRC
BE
Im age Courtesy: Blue Economy CRC
Carnegie has substantial experience using
CETO as it has a significant impact on the amount of energy
Optimising the Hydrodynamics and Architecture of CETO
Hydrodynamics is core to the development of
captured and thus directly impacts power production and cost.
cutting edge numerical modelling of the wave interaction with its device which is being further advanced
through the Digital Development pathway.
The
current focus of this innovation stream is on the optimisation of the system scale
architecture. Detailed simulation will take place to produce load and motion requirements that each
individual component will need to be designed to.
All of the activities being undertaken by Carnegie and its partners, including those detailed above, feed into
the definition of the system architecture of the optimised CETO Technology which will be deployed in future
commercial projects. This architecture selection includes the use of
energy (LCOE) model which considers parameters such as the optimised unit dimensions, the buoyant actuator
shape and number of PTOs to optimise for the lowest LCOE.
Any changes to those parameters impact several drivers of the cost of energy such as power production,
efficiency and/or cost. Assessing the magnitude of the impact of a design parameter change on those drivers
Carnegie’s parametric levelised cost of
and
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Carnegie Clean Energy – Annual Report 2020
Design decisions almost always involve a trade-off between cost and
is a critical but not insignificant task.
performance, so it is important to make those decisions based on the best outcome for the overall cost of
energy. Having a tool allowing Carnegie’s design team to make informed decisions based on accurate cost of
energy estimates is crucial to fast track the development of a technology. To facilitate these assessments,
Carnegie has developed a techno-economic modelling tool that can evaluate the impact on the cost of energy
of different architecture choices. The techno-economic modelling tool is now complete, and the team is
currently focused on producing performance data that will be fed in this tool for different architecture choices.
Assessment of these different architectures and their impact on the cost of energy will be undertaken with
the objective to select an LCOE optimised configuration that sets the technology on a commercial pathway.
Advanced techniques such as the active shifting of the device shape during operation will be investigated over
the coming year to reduce the peak loads and motions experienced by the device during large storms while
maintaining its average power production.
A large amount of synthetic data will also be produced to support the development of the intelligent
controller by providing training data set for the machine learning software developed.
Carnegie is leveraging on access to extensive computational facilities such as Pawsey Supercomputing Centre.
For these activities,
Developing a Virtual Prototype
Carnegie will develop a virtual CETO prototype in 2021 that can demonstrate the operations of a CETO system
to verify its performance. Like a flight simulator which provides pilots with the opportunity to practice their
skills and explore non-standard scenarios, this virtual prototype will help Carnegie test and demonstrate how
the CETO device performs in a range of conditions.
This virtual prototype will build upon Carnegie’s existing modelling capabilities and will utilise coupled models.
It will provide Carnegie and its partners with increased confidence in how the system will operate in real
conditions before investing in capital intensive deployments. It will also reduce integration risks for the first
physical
or
and
unwanted/unexpected behaviours. The Virtual Prototype can be a helpful tool to support decision making for
future projects and thus will support the development of new strategic partnerships with
OEMs, project
developers and ultimately customers.
demonstration
inefficiencies
identifying
exploring
potential
project by
any
CETO Partnerships and Collaborations
and industrial partners to
Additional technology development is underway with a range of
academic
advance non-core CETO
subsystems and future opportunities. These opportunities are
those where there exists potential for improvement but where they
are secondary to the core innovations being undertaken by Carnegie
as outlined above and also where there is strong expertise and
capability available in Carnegie’s partners.
Direct collaborations are undertaken to advance non-core
systems that have the potential to support the commercialisation of
the
Carnegie also engages with the wider offshore energy industry and
can benefit from other advances without having to fund the
research.
electrical cables, biofouling and grid connection subsystems are
examples that are undergoing well-funded development and cost
For instance, the foundation, dynamic and export
In addition to our direct collaborations,
CETO technology.
CETO
reduction thanks to demands from other industries such as offshore wind and tidal energy. Carnegie can
benefit from this but also has a library of designs and a wealth of experience in these subsystems from
previous projects.
Therefore, whilst Carnegie is focused on delivering the core activities driven through internal expertise, a range
of non-core activities are being supported and driven by Carnegie through external expertise. Over the year,
Carnegie continued to progress its external research collaborations which feed into the
CETO technical and
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Carnegie Clean Energy – Annual Report 2020
commercial development, including via direct collaborations with suppliers and academic research partners;
funded research projects; and industry associations such as the Australian Ocean Energy Group (AOEG).
Blue Economy Cooperative Research Centre
Blue
Carnegie announced its involvement in four short-term scoping projects recently
awarded funding by the
Cooperative
The
economy in the areas of seafood production, marine renewable energy and
offshore engineering. These projects involve collaboration between industry and
BECRC is coordinating a $300m+ programme to advance
Australia’s blue
Centre (BECRC).
Research
Economy
academia and will guide the BECRC’s future work and funding allocations. Carnegie is a partner in the following
projects:
Offshore/High Energy Sustainable Hybrid Power Systems
Operational modelling for offshore aquaculture & energy
Blue Economy Biofouling Challenges and Possible Solutions
Integrating Blue Economy Governance Integrity Research
Carnegie expects the research outcomes from these projects to deliver increased knowledge in relation to
integration of wave energy in the blue economy.
The
develop the novel Mooring Tensioner, a key component that will support the use of rotary power take-off
systems and associated cost reductions for wave energy converters.
CRC has also awarded $850,000 of grant funding to support the
Project, to
Carnegie led
MoTWEC
BE
Australian Representative to International Standards group
Australia recently became a full member of the IEC TC 114 – the International Electrotechnical
Commission’s Technical
developing international standards for marine energy covering wave, tidal and other water
current converters.
Carnegie’s
Committee on marine energy. This international committee is
Pichard, was selected as one of
Chief Technology
Australia’s
Officer,
Alexandre
industry representatives. Carnegie is excited to represent the growing Australian ocean energy industry in this
international forum and provide Australia an opportunity to have a voice in the development of standards for
wave energy converters worldwide.
Australian Ocean Energy Group
Carnegie is a founding member and works closely with the
Energy
throughout the wave and tidal energy industry. AOEG’s mission is to accelerate
Group, an industry led cluster formed to facilitate collaboration
Australian Ocean
commercialisation of Australia’s ocean energy as the next frontier in low carbon generating capacity and add
ocean energy to Australia’s energy resource mix.
Academic and Research Institution partners
Carnegie is proud to be involved in several productive collaborations with valued research partners across
Australia and internationally including the University of
University of Queensland and Wave Energy Scotland.
CSIRO, University of Western
Adelaide,
Australia,
xvi
Carnegie Clean Energy – Annual Report 2020
Garden Island Microgrid
During the year, Carnegie commenced operations of the Garden Island Microgrid, a 2MW solar PV installation,
a 2MW/0.5MWh battery energy storage system and a wave energy connection point located on HMAS Stirling
Agreement,
on Garden Island. Under an Electricity Supply
Garden Island Microgrid to the Department of Defence. The total production from the system stands at more
than 1300 MWh which has avoided more than 900 tonnes of carbon emissions.
Carnegie is selling all the power produced by the
Towards the end of the financial year, the Garden Island Microgrid was temporarily disconnected as part of
Department of Defence’s base-wide electrical system upgrade on HMAS Stirling which has impacted the total
electrical production from the system to date. The previously indicated electrical upgrade is part of the larger
3A base redevelopment, with more than $350m being spent on the island by the Department of Defence. The
system has been required to remain disconnected whilst the works are ongoing at Carnegie’s connection point
into the Defence system. Carnegie has worked with Defence and its contractors to minimise the impact of this
temporary disconnection in terms of both time and cost. The works undertaken to upgrade Defence’s electrical
system are expected to support more streamlined operations of the Garden Island Microgrid into the future.
xvii
Carnegie Clean Energy – Annual Report 2020
Clean
Energy
Limited is a wave energy technology development company. The
Corporate Governance
Carnegie
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 4
Corporate
2021. However, the Company has chosen to adopt the 4
Recommendations which come into effect for the financial year ended 30
Company has established
Principles and
Governance
June
th Edition of Corporate Governance Policies and Procedures early.
th edition of the ASX Corporate Governance Councils'
Company is following the
Company follows each recommendation where the
The corporate governance statement set out in this report discloses the extent to which the
recommendations as at the date of this report. The
considered the recommendation to be an appropriate benchmark for its corporate governance practices. Where the
Company's corporate governance practices follow a recommendation, the
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 2020.
Board has made appropriate statements
Board has
Governance-related documents can be found on the
"About Us - Corporate Information” and within the section marked "Corporate Governance".
Company's website at www.carnegiece.com, under the menu
Compliance with Corporate Governance Principles and Recommendations
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
The listing entity should disclose:
the respective roles and responsibilities of its board and management; and
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)
(b)
undertake appropriate checks before appointing a person, or putting forward to security
holders a candidate for election, as a director; and
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
Executives
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.
Policy. The appointment of any director is
Evaluation
Board and
Senior
Recommendation 1.3
A listed entity should have a written agreement with each director and senior executive setting out the terms of
their appointment.
xviii
Carnegie Clean Energy – Annual Report 2020
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)
(b)
(c)
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;
disclose that policy or a summary of it; and
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;
(1)
(2)
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
if the entity is a “relevant employer” under the Workplace Gender Equality Act, the
entity’s most recent “Gender
under the Act.
Indicators”, as defined in and published
Equality
Company has not yet set measurable objectives for
Company does not comply with this recommendation. The
Board continues to monitor diversity across the organisation and is satisfied with the current
The
achieving diversity. The
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
basis) 12 staff (3 females and 9 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.
Company currently employs (including on a consulting
Recommendation 1.6
A listed entity should:
(a)
(b)
have and disclose a process for periodically evaluating the performance of the board, its
committees and individual directors; and
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
Results from the
assessment are then considered by the Chairman and, if required, with assistance from an independent consultant, and
a report provided back to the Board for consideration with recommendations for implementation.
Chairman and confirmed in the
Report.
Annual
Recommendation 1.7
A listed entity should:
xix
Carnegie Clean Energy – Annual Report 2020
(a)
(b)
have and disclose a process for periodically evaluating the performance of its senior
executives; and
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 does not comply with this recommendation as the Company does not have a nomination committee. The
Board considers that, given the current size and scope of Carnegie’s operations, efficiencies or other benefits would not
be gained by establishing a separate nomination committee.
Board considers the matters and issues that would otherwise be addressed by a nomination committee in
The full
accordance with Carnegie’s Nomination and Remuneration Policy.
Under the Board Charter, candidacy for the Board is based on merit against objective criteria with a view to maintaining
an appropriate balance of skills and experience.
individually assessed by the Chairman and the Chief Executive Officer before appointment or nomination to ensure that
they possess the relevant skills, experience or other qualities considered appropriate and necessary to provide value and
assist in advancement of Carnegie’s operations.
As a matter of practice, candidates for the office of
Director are
Board will reconsider the requirement for, and benefits of, a separate nomination committee as
The
operations grow and evolve.
Carnegie’s
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.
Company complies with this recommendation. The
The
skills matrix to assess strengths and identify weaknesses. A summary of the blend of skills is set out below:
Board has undertaken an assessment of its mix of skills using a
xx
Carnegie Clean Energy – Annual Report 2020
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
Finance and strategic planning
Engineering
Manufacturing
Research and Development
Quality
Management
Science
The skills, experience and expertise of each of the Company's directors are set out in this report.
Recommendation 2.3
A listed entity should disclose:
(a)
(b)
the names of the directors considered by the board to be independent directors;
if a director has an interest, position, association or relationship of the type described in
Box 2.3 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
(c)
the length of service of each director.
Independent
Company complies with this recommendation.
The
considered
Fitzpatrick and Anthony Shields may be considered not independent due to their Convertible Note holding and substantial
shareholdings in the Company.
Directors. The length of service of each
Director is set out in this report.
Directors Terry
Non-Executive
Stinson and
Grant
Mooney are
Directors
Mike
Recommendation 2.4
A majority of the board of a listed entity should be independent directors.
Company does not comply with this recommendation.
The
independent (Grant Mooney and Terry Stinson).
at
commitment to the Company as large shareholders, noteholders and their corporate and industry experience.
Fitzpatrick is in the best interests of
It is the view of the Directors that the involvement of key stakeholders
Directors are considered to be
Shareholders given their
Only 50% of the
Board level such as
Shields and
Anthony
Board of
Mike
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.
xxi
Carnegie Clean Energy – Annual Report 2020
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.
Company complies with this recommendation. The
The
senior executives and employees which is actively monitored by the
available on the Company's website.
Company has established a code of conduct for all directors,
Board for performance against it and which is
Recommendation 3.3
A listed entity should:
(c) have and disclose whistleblower policy; and
(d) 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. A copy of the policy can be found on the Company’s website.
Recommendation 3.4
A listed entity should:
(e) have and disclose an anti-bribery and corruption policy; and
(f) 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.
deals with the responsibilities of all
followed.
The Company considers that the Code of Conduct adequately
Directors, employees and contractors to ensure that proper ethical standards are
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,
xxii
Carnegie Clean Energy – Annual Report 2020
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
(b)
if it does not have an audit committee, disclose that fact and the processes it employs that
independently verify and safeguard the integrity of its corporate reporting, including the
processes for the appointment and removal of the external auditor and the rotation of the
audit engagement partner.
The Company does not comply with this recommendation. During the year, chose to undertake the function of an Audit
& Risk Committee directly at Board Level.
As the Company grows, the Board will consider the re-implementation of an
Audit and Risk Committee.
Recommendation 4.2
CEO and
The board of the listed entity should, before it approves the entity's financial statements for a financial period,
receive from its
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.
CFO a declaration that, in their opinion, the financial records of the entity have been
Company complies with this recommendation. The
The
the Chief Financial Officer 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
Management which is
available on the Company's website.
Company also has a separate policy in relation to
Board receives assurance from the
Chief Executive Officer and
Risk
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.
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
and balanced disclosure
timely
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.
xxiii
Carnegie Clean Energy – Annual Report 2020
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
Communication Policy which is set out on the Company website.
Company and shareholders and investors. The
Company has a
Shareholder
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
A listed entity should give security holders the option to receive communications from, and send communications
to, the entity and its security registry electronically.
Company complies with this recommendation. The
The
communications electronically, notification of this option is provided by the Company registry.
Company provides the option to shareholders to receive
xxiv
Carnegie Clean Energy – Annual Report 2020
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.
Company does not comply with this recommendation.
The
undertake the role and function of the
size to justify a separate Audit and Risk Committee.
Audit and Risk Committee at
Company’s size, the
Given the
Board level until such time as the Company is of a
Company has chosen to
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.
Company does not comply with this recommendation as no separate review was undertaken during the year.
The
However, any perceived risks are addressed at Board Meetings convened at regular intervals throughout the year.
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.
Company does not comply with this recommendation. The
The
Company, it is not practical to have an internal audit function and that risk management is undertaken by the Board and
senior management.
Directors are of the view that given the size of the
Recommendation 7.4
xxv
Carnegie Clean Energy – Annual Report 2020
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 and senior management 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.
Company does not comply with this recommendation. Given the
The
Remuneration
the year to undertake the role and function of the
Company is of a size to justify a separate Remuneration Committee.
Recommendation 8.2
Company’s size, the
Committee at
Board level until such time as the
Company has chosen during
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.
Company complies with this recommendation. The
The
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.
Company has separate policies relating to the remuneration of
Recommendation 8.3
A listed entity which has an equity-based remuneration scheme should:
(a) have a policy on whether participants are permitted to enter into transaction (whether
through the use of derivatives or otherwise) which limit the economic risk of participating
in the scheme; and
(b) disclose that policy or a summary of it.
Company complies with this recommendation. The
Company's policy on trading the
Company has a
Securities Trading
Company's securities.
Policy which, among other
A copy of this policy is on the
The
things, sets out the
website.
Company's
xxvi
Carnegie Clean Energy – Annual Report 2020
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 13 October 2020.
Spread of Holdings
Number of holders of ordinary shares
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
251
506
811
4,196
5,220
Number of Holders: 10,984
Number of Shareholders holding less than a marketable parcel: 8,246
SUBSTANTIAL SHAREHOLDERS
Shareholder Name
Log Creek Pty Ltd
Asymmetric Credit Partners Pty Ltd
Number of Shares
%
1,486,826,795 13.4%
641,750,000 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
Log Creek Pty Ltd <88 Green A/C>
HRM Investments Pty Ltd
Log Creek Pty Ltd
Citicorp Nominees Pty Limited
Daws & Son Pty Ltd
Asymmetric Credit Partners Pty Ltd
Mr Grant Jonathan Mooney
Richcab Pty Limited
ACN 112 940 057 Pty Ltd
Dawnray Pty Ltd
Asymmetric Arbitrage Ltd
Eminent Holdings Pty Ltd
Cathben Pty Ltd
Fraser Investment Holdings Pty Ltd
Mr Kenneth Roger James
J P Morgan Nominees Australia Pty Limited
Mr Barry Leslie Ramsay
Mr Carl Gianatti & Mrs Margaret R Gianatti
Mr Scott Dominic Grogan & Mr Bradley Vincent Grogan
Richcab Pty Ltd
TOTAL
Number of
Percentage of
Shares
Capital
584,099,520
5.24%
460,000,000
4.13%
400,000,000
260,624,172
250,000,000
250,000,000
250,000,000
3.59%
2.34%
2.24%
2.24%
2.24%
200,000,000
1.80%
200,000,000
1.80%
200,000,000
1.80%
200,000,000
167,724,687
99,595,205
1.80%
1.51%
0.89%
96,325,162
80,000,000
77,504,010
0.86%
0.72%
0.70%
74,000,000
0.66%
72,935,589
70,000,000
0.65%
0.63%
63,638,760
0.57%
4,467,935,915
40.10%
xxvii
Carnegie Clean Energy – Annual Report 2020
HOLDERS OF SECURITIES IN AN UNLISTED CLASS
OPTIONS (MANAGEMENT AND STAFF)
Optionholder Name
Management & Staff (Various)
Jonathan Fievez
300,000,000
20-Jul-22
No. Options
Price $
Date
0.002
Exercise
Exercise
10,000,000
0.016 10-Oct-21
HOLDERS OF SECURITIES IN AN UNLISTED CLASS
OPTIONS
Optionholder Name
No. Options
Price $
Date
Exercise
Exercise
Grant Mooney
Asymmetric Credit Partners Pty Ltd
250,000,000
0.00125
28-Oct-25
250,000,000
0.00125
28-Oct-25
Eminent Holdings Pty Ltd (ACN 009 265 972)
800,000,000
0.0015
28-Oct- 22
Log Creek Pty Ltd (ACN 100 874 851) <88 Green A/C>
400,000,000
0.0015
28-Oct-22
Dawnray Pty Ltd (ACN 100 971 980) ATF The HWBL
Superannuation Fund
200,000,000
0.0015
28-Oct-22
Richcab Pty Ltd (ACN 069 335 459)
200,000,000
0.0015
28-Oct-22
Asymmetric Credit Partners Pty Ltd
HFM Investments Pty Ltd
Asymmetric Credit Partners Pty Ltd
Wolf Capital Pty Ltd
Chris Dale
200,000,000
0.0015
28-Oct-22
460,000,000
0.0015
28-Oct-22
25,000,000
0.06
24-Jan-24
6,250,000
0.06
24-Jan-24
3,750,000
0.06
24-Jan-24
HOLDERS OF RESTRICTED SECURITIES
Convertible Notes
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
Number of Notes
40 1,000,000
20 500,000
Value $
10 250,000
10 250,000
10 250,000
23 575,000
113 2,825,000
xxviii
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
FINANCIAL REPORT
FOR THE YEAR ENDED
30 JUNE 2020
1
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
CONTENTS
__________________________________________________________________________________________
Page No.
DIRECTORS' REPORT ........................................................................................................ 3
AUDITOR’S INDEPENDENCE DECLARATION .... ……………………… ….……………. 12
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME ............................................................................................. 13
CONSOLIDATED STATEMENT OF FINANCIAL POSITION............................................ 15
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................ 16
CONSOLIDATED STATEMENT OF CASH FLOWS ......................................................... 17
NOTES TO THE FINANCIAL STATEMENTS .................................................................... 18
DIRECTORS' DECLARATION ........................................................................................... 47
INDEPENDENT AUDITOR’S REPORT………………………………………………….……48
2
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2020
The Directors present their report on Carnegie Clean Energy Limited ("the Company", or “Carnegie”) and its
controlled entities, ("the “Group") for the financial year ended 30 June 2020.
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 (resigned as a director 18
November 2019). 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 3D metal
printing technology company Aurora Labs Limited (appointed 26 February 2020) and is also Non-Executive
Chairman 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 a 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 of 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, Aurora Labs Limited appointed 25 March 2020 and Riedel Resources Limited appointed 31
October 2018. Mr Mooney is also a member of Chartered Accountants Australia and New Zealand.
3
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2020
Anthony Shields B.Bus (Non-Executive Director) - appointed 25 November 2019
Mr Shields is the Managing Director of Asymmetric Investment Management Fund Pty Ltd (Asymmetric), a Perth-
based investment manager specialising in private debt, venture capital and risk management. He also sits on a
number of other non-listed company boards both in Executive and Non-Executive capacities (Asymmetric
Investment Management, Source Certain International, NWQ Capital and Old Perth Port). Prior to Asymmetric,
Mr Shields established and managed an investment portfolio for a family office in Perth, Western Australia. He
currently sits on the investment committee of Canci Group advising on investment strategy and portfolio
management. Prior to his family investment roles, Mr Shields worked for Deutsche Bank in equity and derivatives
sales and trading, and for Macquarie Bank as an equity analyst and in institutional equity sales and trading.
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 (i)
Michael Fitzpatrick (ii)
Grant Jonathan Mooney (iii)
Anthony Shields (iv)
ORDINARY
SHARES
4,700,000
OPTIONS
-
1,486,826,795
860,000,000
263,141,390
641,750,000
250,000,000
450,000,000
i. Mr T Stinson has an interest in 4,700,000 ordinary shares held by Terry Stinson .
ii. Mr M Fitzpatrick is a Director of Log Creek Pty Ltd and therefore is deemed to have an interest in 442,727,275
ordinary shares and 400,000,000 options held by Log Creek Pty Ltd <88 Green Ventures A/C>, as well as
584,09,520 ordinary shares held by Log Creek Pty Ltd. Mr M Fitzpatrick is a Director of HFM Investments Pty
Ltd and therefore is deemed to have an interest in 460,000,000 ordinary shares and 460,000,000 options
held by HFM Investments Pty Ltd. In addition, Log Creek Pty Ltd <88 Green Ventures A/C> holds 20
convertible notes with a face value of $500,000 convertible into shares at $0.00125 per share (refer to note
17(ii)). HFM Investments Pty Ltd holds 23 convertible notes with a face value of $575,000 convertible into
shares at $0.00125 per share (refer to note 17).
iii. Mr G J Mooney is a Director of Mooney & Partners Pty Ltd and therefore is deemed to have an interest in
13,141,390 ordinary shares held by Mooney & Partners Pty Ltd. Mr G J Mooney has an interest in
250,000,000 ordinary shares and 250,000,000 options.
iv.
Mr A Shields is a Director of Asymmetric Credit Partners Pty Ltd and therefore is deemed to have an interest
in 641,750,000 ordinary shares and 450,000,000 options held by Asymmetric Credit Partners Pty Ltd. In
addition, Mr A Shields is a Director of Asymmetric Arbitrage Ltd which holds 10 convertible notes with a face
value of $250,000 convertible into shares at $0.00125 per share (refer to note 17).
COMPANY SECRETARY
Mr Grant Jonathan Mooney held the position of company secretary during the financial year and to the date of this
report.
PRINCIPAL ACTIVITIES
The principal activity of the Group during the year was the development of the CETO Wave Energy Technology.
OPERATING RESULTS
The net loss of the Group for the financial year ended 30 June 2020 was $275,522, which included a profit from
discontinued operations of $1,536,861. (2019: loss of $51,930,513, which included a loss from discontinued
operations of $8,564,208).
DIVIDENDS
The Directors do not recommend the payment of a dividend for the financial year ended 30 June 2020. No dividends
were paid during the financial year.
4
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2020
REVIEW OF OPERATIONS
During the year, the Group took significant steps to advance and restructure its business including:
CETO Wave Energy Technology
Carnegie continued to progress the development of the CETO technology along the CETO technology
pathway outlined in the Prospectus Recapitalisation Plan, including advancing 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.
Carnegie made significant advancements in the development of the machine learning based Wave
Predictor, the first step towards the creation of a new Intelligent Control System for the CETO technology
and with potential for applications beyond the CETO technology.
Carnegie received a final milestone payment of $865,000 under the ARENA CETO 6 Funding Agreement
in December 2019 and the Funding Agreement was mutually terminated.
Various suppliers of generator/motor technologies were engaged during the period to provide
performance and cost data. This is a key element of the PTO (Power Take Off) and drives the scale of
the overall system.
Carnegie began engaging with the Blue Economy CRC and working with partners on scoping projects.
A submission for funding of a Carnegie led project to develop the tensioner part of the PTO has also
been made.
Garden Island Microgrid
Garden Island Microgrid commenced operations in August 2019. Under the Company’s Power Supply
Agreement, the Department of Defence is purchasing all of the power produced by the plant.
Teething issues and panel failures were addressed during the year and resulted in constraints to
generation at full capacity of the plant.
In early April the plant was disconnected due to infrastructure changes on the Naval Base. This was
expected but out of Carnegie’s control. Reconnection is expected in Q3 2020.
Corporate
Carnegie successfully completed its Recapitalisation, raising $5.5 million from Shareholders and new
third party investors through an Entitlement Offer and Shortfall Offer.
Carnegie’s Deed of Company Arrangement effectuated on 28 October 2019 and Administrators Korda
Mentha resigned as the Deed Administrators.
The Creditors Trust was established on behalf of Carnegie’s creditors with $1.4 million from Carnegie’s
Recapitalisation.
Carnegie was reinstated to official quotation on the ASX on 31 October 2019.
Mr Anthony Shields was appointed as a Director of Carnegie at the Annual General Meeting on 25
November 2019.
Carnegie engaged Churchill Consulting to update its strategic business plan. Carnegie’s new strategic
business plan was implemented during the 2020 financial year.
The Carnegie team worked remotely during the final quarter of the year due to COVID-19 but was able
to largely continue work on the Digital Development Pathway with some inevitable modifications and
delays. Following the relaxing of COVID-19 restrictions in Western Australia, the team returned to the
office in a COVID safe way.
5
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2020
FINANCIAL POSITION
The net assets of the Group increased by $8.47 million from $9.39 million to $17.86 million as at 30 June 2020. This
is predominantly the result of the capital raising, conversion of some of the debt notes into issued capital and a net
profit from discontinued operations.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
On 28 October 2019, the control of the Company was handed back to Directors after the Administrators resigned.
The Company was reinstated to official quotation on the ASX on 31 October 2019. There has been no other
significant change in the state of affairs of the Group to the date of this report.
SIGNIFICANT EVENTS SUBSEQUENT TO YEAR END
No 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 Group, the results of those operations or the state of affairs of the Group in subsequent financial years.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
Carnegie engaged an external consulting firm to update its strategic business plan including, refreshing the
company’s vision, mission and detailed internal strategic focus areas and actions. The core components of the
business plan include articulation of Carnegie’s purpose, vision and goals and identification of the strategic themes,
initiatives and actions that Carnegie will undertake to achieve its ambitions.
ENVIRONMENTAL ISSUES
The 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.
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,
300,000,000 options outstanding in respect of unissued ordinary shares exercisable at 0.2 cent per share
on or before 20 July 2022,
35,000,000 options outstanding in respect of unissued ordinary shares exercisable at 6 cents per share on
or before 8 February 2023,
2,260,000,000 options outstanding in respect of unissued ordinary shares exercisable at 0.15 cent per
share on or before 28 October 2024, and
500,000,000 options outstanding in respect of unissued ordinary shares exercisable at 0.125 cent per share
on or before 28 October 2024.
INDEMNIFYING OFFICERS
During or since the year end, the Company has given an indemnity or entered an agreement to indemnify, the
Directors against certain risks they are exposed to as Directors of the Company.
6
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2020
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, Mr Jonathan Fievez.
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 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 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 Group is as follows:
The remuneration policy, setting the terms and conditions for the Executive Directors and other senior executives,
was developed by the Board of Directors after seeking professional advice from independent external consultants.
The Board of Directors 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 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 and planned to be reaffirmed at this year’s
Annual General Meeting) as the mechanism by which options may be issued to executive management and staff
to adequately incentivise these individuals.
The Board of Directors reviews executive packages annually by reference to the 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 Group.
Company Performance, Shareholder Wealth and KMP Remuneration
Revenue
Net loss after tax
2016
$
1,729,797
(6,349,387)
2017
$
4,845,575
(14,382,638)
2018
$
10,045,707
(63,349,694)
2019*
$
534,034
(51,930,513)
2020
$
117,668
(275,522)
Share price at year end
0.030
0.057
0.024
0.0*
0.001
* The Company was in suspension on the ASX at year end in 2019, so no share price was quoted.
7
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2020
REMUNERATION REPORT – AUDITED (CONTINUED)
The remuneration for each KMP of the Group paid during the year was as follows:
Details of Remuneration for Year Ended 30 June 2020
Directors’ fees were ceased being paid during the administration period and resumed on 28 October 2019.
* Fees include company secretarial fees of $32,387 paid to Mooney & Partners Pty Ltd, a company associated with
Grant Mooney, for company secretarial services.
Options Issued as Part of Remuneration for the Year Ended 30 June 2020
There were no options issued as part of remuneration for the year ended 30 June 2020.
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.
** Michael Ottaviano fees included $274,342 in termination/redundancy payments.
*** Fees include company secretarial fees of $35,000 paid to Mooney & Partners Pty Ltd, a company associated
with Grant Mooney, for company secretarial services.
8
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2020
REMUNERATION REPORT – AUDITED (CONTINUED)
Employment Contracts of KMP
The employment conditions of KMP are formalised in Service Contracts.
The Company 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) express provisions protecting the Company’s confidential information and intellectual property;
(iv) Mr Fievez may terminate the agreement by giving 3 months’ notice in writing to the Company; and
(v) 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.
Messrs Fitzpatrick, Mooney and Shields each receive an annual remuneration as Non-Executive Directors of
$40,000 (exclusive of mandatory superannuation contributions and GST) while Mr Stinson (Chairman) receives
$60,000 per annum (exclusive of mandatory superannuation contributions and GST). These salaries took effect
from effectuation of the DOCA on 28 October 2019.
Their appointment shall cease if:
(a)
(b)
(c)
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;
the Non-Executive Director is removed as a Director in accordance with the Corporations Act or the
Constitution.
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 2019
Granted as
Compensation
Options
expired
unexercised
Net Change
Other
Balance
30 June 2020
Michael Fitzpatrick
Grant Mooney
Anthony Shields
Jonathan Fievez
Total
-
-
-
10,000,000
10,000,000
-
-
-
-
-
- 860,000,0001
860,000,0000
- 250,000,0001
250,000,000
- 450,000,0001
450,000,000
-
-
10,000,000
- 1,560,000,000
1,570,000,000
1 Convertible Note holders received free attaching options with the new convertible notes issued in October
2019.
9
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
DIRECTORS' REPORT
30 JUNE 2020
REMUNERATION REPORT – AUDITED (CONTINUED)
Details of equity settled options for KMP outstanding at balance date are as follows:
Terms & Conditions for Each Grant
KMP
Asymmetric Credit Partners1
Vested &
Granted
Number
25,000,000
Grant Date Value per
Option at
Grant Date
0.024 cents
08 Feb18
Exercise
Price
First
Exercise
Date
Last
Exercise
Date
6.0 cents
08 Feb 2018 24 Jan 2024
Jonathan Fievez
10,000,000
10 Oct 18
0.10 cents
1.6 cents
10 Oct 2018 10 Oct 2021
1Asymmetric Credit Partners is a company associated with Anthony Shields.
All options were granted for nil consideration.
Shareholdings
Number of Shares held by KMP
Terry Stinson
Balance
30 June 2019
700,000
Michael Fitzpatrick
125,365,349
Grant Mooney
Anthony Shields
Jonathan Fievez
2,628,728
-
-
Total
128,694,077
Received as
Compensation
-
-
-
-
-
-
Options
Exercised
-
Net Change
Other1
Balance
30 June 2020
4,000,000
4,700,000
-
-
-
-
-
1,361,461,446
1,486,826,795
260,513,112
263,141,840
641,750,000
641,750,000
20,000,000
20,000,000
2,287,724,558
2,416,418,635
1Shares were acquired during the recapitalisation of the Company in October 2019 in the rights issue and/or
conversion of loans and convertible notes to equity.
DIRECTORS' MEETINGS
There were 6 Directors' meetings held during the financial year ended 30 June 2020. Attendances were as follows:
Director
Terry Stinson
Grant Mooney
Michael Fitzpatrick
Anthony Shields
Directors
No. Meetings
attended
6
6
6
6
No. Meetings held
during time in
office
6
6
6
6
There were also three (3) circular resolutions passed by the Board of Directors during the financial year.
END OF REMUNERATION REPORT
10
CARNEGIE CLEAN ENERGY LIMITED ABN 69 009 237 736 AND CONTROLLED ENTITIES 11 DIRECTORS' REPORT 30 JUNE 2020 NON-AUDIT SERVICES Neither the current or previous external auditors were engaged for non-audit services during the financial year ended 30 June 2020. AUDITOR’S INDEPENDENCE DECLARATION The auditor’s independence declaration for the year ended 30 June 2020 has been received and can be found on page 12. Signed on 26 August 2020 in accordance with a resolution of the Board of Directors. GRANT J. MOONEY TERRY STINSON Director Director AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Carnegie Clean Energy Limited
for the year ended 30 June 2020, 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
26 August 2020
N G Neill
Partner
12
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2020
Note
Group
Continuing Operations:
Revenue
Cost of sales
Gross Profit
Other income:
Net gain on disposal of fixed assets
Government grants and subsidies
Other income
Expenses
Bad and doubtful debts
Professional fees
Depreciation and amortisation expense
Employee and Directors expenses
Employee Share based payments
Finance costs
Impairment costs
Occupancy and Administration
Research expenses
Loss before income tax
Income tax benefit/(expense)
Loss after tax from continuing operations
2
2
3
5
13(a)
4
2020
$
117,668
(52,167)
65,501
82,247
50,371
19,626
152,244
2019
$
534,034
(176,298)
357,736
-
-
22,316
22,316
(7,800)
(132,597)
(399,679)
(711,256)
-
(176,918)
-
(601,878)
-
(1,812,383)
-
(1,812,383)
(41,310)
(298,082)
(250,991)
(2,479,505)
(10,000)
(232,081)
(38,284,415)
(1,972,275)
(178,174)
(43,366,305)
-
(43,366,305)
Profit/(Loss) from discontinued operations
30
1,536,861
(8,564,208)
Loss after tax from continuing and discontinued operations
(275,522)
(51,930,513)
Other comprehensive income/(loss)
Exchange gains on translating overseas controlled entities and
foreign currencies
Income tax relating to components of other comprehensive
income
Total comprehensive loss for the year
(12,507)
85,971
-
(288,029)
-
(51,844,542)
13
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED)
Note
Group
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 earnings/(loss) per share (cents per share)
Diluted earnings/(loss) per share (cents per share)
7
7
7
7
2020
$
(0.021)
(0.021)
2019
$
(1.51)
(1.51)
0.018
0.018
(0.30)
(0.30)
The accompanying notes form part of these financial statements.
14
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Assets held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Other financial assets
Property, plant, and equipment
Leased assets – right of use
Intangibles
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Short-term provisions
Lease liability
Short-term borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Long-term provisions
Lease liability
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
Group
2020
$
2019
$
8
9
31
9
10
11
12
13
14
15
16
17
15
16
3,414,671
169,815
-
3,584,486
255,606
713,291
200,868
1,169,765
542,264
12,414
2,357,941
119,821
14,590,973
17,623,413
1,945,306
12,414
2,675,949
-
15,000,000
19,633,669
21,207,899
20,803,434
256,785
82,862
79,881
2,825,000
3,244,528
5,253,825
69,329
-
6,039,987
11,363,141
51,837
48,603
100,440
49,484
-
49,484
3,344,968
11,412,625
17,862,931
9,390,809
18
19
203,221,135
887,761
(186,245,965)
17,862,931
194,460,984
900,268
(185,970,443)
9,390,809
The accompanying notes form part of these financial statements.
15
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020
Group
Balance at 1 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
Issued
Capital
194,460,984 (137,809,888)
Accumulated
Losses
Foreign
Currency
Reserve
(35,703)
Convertible
Note/Option
Reserve
4,609,958
Total
61,225,351
-
-
-
-
-
-
-
(51,930,513)
-
-
85,971
(51,930,513)
85,971
-
-
-
(51,930,513)
85,971
(51,844,542)
-
2,169,958
1,600,000
3,769,958
-
-
-
10,000
(2,169,958)
(1,600,000)
(3,759,958)
10,000
-
-
10,000
Balance at 30 June 2019
194,460,984 (185,970,443)
50,268
850,000
9,390,809
Balance at 1 July 2019
Comprehensive loss
Loss for the year
Other comprehensive loss
Total comprehensive loss for the
year
Transactions with owners
Share capital issued during the period
Conversion of loans to equity
Conversion of convertible notes to
equity
Capital raising costs
Sale of treasury shares
Accrual for share issue for interest on
convertible note to 30 June 2020
Total transactions with owners
194,460,984
(185,970,443)
50,268
850,000
9,390,809
-
-
-
(275,522)
-
-
(12,507)
(275,522)
(12,507)
5,500,003
1,075,000
2,250,000
(255,500)
34,615
156,033
8,760,151
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(275,522)
(12,507)
(288,029)
5,500,003
1,075,000
2,250,000
(255,500)
34,615
156,033
8,760,151
Balance at 30 June 2020
203,221,135
(186,245,965)
37,761
850,000
17,862,931
The accompanying notes form part of these financial statements.
16
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020
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) 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 cash (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Share issue costs
Sale of treasury shares
Net proceeds from issue of convertible notes
Net proceeds from borrowings
Repayment of borrowings
Loss of control of subsidiaries – cash no longer available
Payments for lease liabilities
Net cash (used in)/provided by financing activities
23
Note
Group
2020
$
2019
$
117,668
14,779
(20,885)
(2,601,662)
-
1,065,493
(1,424,607)
4,839,045
27,468
(236,652)
(14,057,910)
2,157,137
2,887,500
(4,383,412)
22
(677,517)
(1,692)
15,040
(664,169)
(1,669,148)
(79,714)
4,709
(1,744,153)
5,500,003
(255,500)
34,615
-
-
-
-
(31,277)
5,247,841
-
-
-
1,650,000
600,000
(1,400,000)
(2,903,359)
-
(2,053,359)
Net increase/(decrease) in cash held
Cash and cash equivalents at beginning of financial year
3,159,065
255,606
(8,180,924)
8,436,530
Cash and cash equivalents at end of financial year
8
3,414,671
255,606
The accompanying notes form part of these financial statements.
17
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
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 2020 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. 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 reassesses 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 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 26 August 2020.
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
In the year ended 30 June 2020, 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 reporting period.
Those which have a material impact on the Group are set out below.
AASB 16 Leases
AASB 16 replaces AASB 117 Leases. AASB 16 removes the classification of leases as either operating leases of
finance leases-for the lessee – effectively treating all leases as finance leases.
The Group has adopted AASB 16 from 1 July 2019.
The Group has applied AASB 16 retrospectively with the effect of initially applying this standard recognised at the
date of initial application, being 1 July 2019 and has elected not to restate comparative information. Accordingly,
the information presented for 30 June 2019 has not been restated.
The impact on the financial performance and position of the Group from the adoption of this Accounting Standard
is detailed in notes 12 and 16. On transition the Group applied the short-term lease practical expedient to the
office lease as there was less than 12 months remaining on the lease at the date of initial application. Due to the
Group being in administration at that time there was no reasonable certainty that the lease would be extended
beyond the termination date. No right of use asset or lease liabilities were therefore recognised at 1 July 2019.
During the year the Group entered into a new lease.
Other than the above, there is no material impact of the new and revised Standards and Interpretations on the
Company and therefore, no material change is necessary to Group accounting policies.
18
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
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. Whilst the board
acknowledges that the Convertible notes are due for repayment within 12 months, the Company has several
options available to it in relation to the satisfaction of the outstanding debt should the debt holders choose
not to convert. These options include the deferral or refinancing of the underlying debt. Additionally, the
Company, in order to raise funds, may refinance or sell existing assets of the entity or raise additional
capital from equity markets. The Company also may choose to defer discretionary spending to ensure the
Company remains a going concern.
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.
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 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.
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 32 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 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.
19
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Tax (continued)
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.
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.
Goodwill and other Intangible Assets
Goodwill and other intangible assets that that have an indefinite useful life are not subject to amortisation and are
tested annually for impairment, or for frequently if events or changes in circumstances indicate that they might be
impaired. Other non-financial assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying value exceeds its recoverable amount.
Recoverable amount is the higher of an assets fair value less costs of disposal and value-in-use. The value-in-
use is the present value of the estimated future cashflows relating to the asset using a pre-tax discount rate
specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent
cashflow flows are grouped together to form a cash-generating unit.
The amortisation rate for each class of intangible assets are:
Class of Intangible Asset
Microgrid/battery technology development asset
Useful Life
7 years
Property, Plant and Equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisitions of the items.
Depreciation is calculated on a straight-line basis to write off the net costs of each item of plant & equipment
The depreciation rates used for each class of depreciable asset are:
Class of Fixed Asset
Plant and equipment
Depreciation Rate
1.0% – 50.0%
Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
Leaseholder improvements are depreciated over the unexpired period of the lease or the estimated useful life
of the assets, whichever is shorter.
Any item of property, plant and equipment is derecognised upon disposal or where there is no future economic
benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to
profit or loss. Any revaluation surplus reserve relating to the items disposed of is transferred directly to
accumulated losses.
20
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Leases
The Group has applied AASB 16 Leases retrospectively with the effect of initially applying this standard
recognised at the date of initial application, being 1 July 2019 and has elected not to restate comparative
information. Accordingly, the information presented for 30 June 2019 has not been restated.
The impact on the financial performance and position of the Group from the adoption of this Accounting Standard
is detailed in notes 12 and 16. On transition the Group applied the practical expedients available and did not
recognise any right of use asset, primarily as the Group was in administration at the time of the transition. During
the year the Group entered into a new lease.
Financial Instruments
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:
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 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.
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).
the entity’s business model for managing the financial asset
the contractual cash flow characteristics of the financial asset.
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.
21
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial Instruments (continued)
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.
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. 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.
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.
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.
22
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Employee Benefits (continued)
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.
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.
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
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, deposits held at call with banks, other short-term highly liquid
investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of
changes in value.
Revenue and Other Income
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled
in exchange for transferring goods or services to a customer. For each contract with a customer, the Group:
identifies the contact with a customer; identifies the performance obligations in the contract, determines the
transaction price which takes into account estimates of variable consideration and the time value of money;
allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone
selling price of each distinct good or service to be delivered; and recognises revenue when or as each
performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods of service
promised.
Sale of Goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the
goods, which is generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on
either a fixed price or hourly rate.
23
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue and Other Income (continued)
Interest
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial asset.
Royalty income
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.
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.
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 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 Group, adjusted
for, the dilutive effects of any outstanding unlisted options over ordinary shares in the parent.
24
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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 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.
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.
Impairment
AASB 9 requires the Group to take a forward-looking expected credit loss (ECL) approach and 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 fair value
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.
25
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 Group for the annual reporting period ended 30 June
2020.
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 (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).
NOTE 2: REVENUE AND OTHER INCOME
The Group derives its sales revenue from the sale of goods and provision of services under AASB 15.
Sales revenue
Garden Island Microgrid
Other income
Interest income
Other income
Group
2020
$
2019
$
117,668
534,034
17,806
22,316
1,820
19,626
-
22,316
26
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 3: DEPRECIATION AND AMORTISATION EXPENSE
Depreciation – property, plant, and equipment
Amortisation - property, plant, and equipment
Amortisation– right of use asset
NOTE 4: INCOME TAX EXPENSE
a.
The components of tax expense comprise:
Current tax expense
Current period
Notes
11
11
12
Group
2020
$
2019
$
17,037
250,991
342,702
39,940
-
-
399,679
250,991
-
-
-
-
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
—
Income tax at 27.5% (2019: 30%)
Add: Tax effect of:
— Other non-allowable items
— Non-deductible R&D costs
—
Assessable government grants
—
Impairment
Share options expensed during year
— Gain on deconsolidation
—
— Movement in deferred tax balances not recognised
—
Effect of lower foreign tax rates
2020
$
2019
$
(1,812,383)
(43,366,305)
1,536,861
(8,564,208)
(275,522)
(51,930,513)
(75,768)
(15,579,153)
19,349
2,803
91,338
56,669
268,407
585,226
-
-
-
11,363,366
2,871,798
3,000
(228,175)
607,756
13,384
-
-
-
The Group has tax revenue losses carried forward of $46,429,517 (2019: $45,544,029) and capital tax losses
carried forward of $1,239,028 (2019: $1,239,028). 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.
27
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 5: INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP)
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or
payable to each member of the Group’s KMP for the year ended 30 June 2020.
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
Anthony Shields
Jonathan Fievez
Non-Executive Director and Company Secretary
Non-Executive Director (appointed 25 November 2019)
Chief Executive Officer
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 profit/(loss) per share (cents per share) from
discontinued operations
Diluted profit/(loss) per share (cents per share) from
discontinued operations
28
2020
$
400,080
-
-
34,932
435,012
Group
2020
$
117,350
5,000
122,350
2019
$
871,113
10,000
-
60,688
941,801
2019
$
-
79,787
79,787
Group
2020
(0.021)
2019
(1.51)
(0.021)
(1.51)
0.018
0.018
(0.30)
(0.30)
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 7: EARNINGS/(LOSS) PER SHARE (CONTINUED)
(a)
Loss used in the calculation of basic and diluted
EPS – continuing operations
Profit/(loss) used in the calculation of basic and
diluted EPS – discontinuing operations
Group
2020
$
2019
$
(1,812,383)
(43,366,305)
1,536,861
(8,564,208)
Group
2020
2019
(b) Weighted average number of ordinary shares used in
calculation of weighted average earnings per share
8,448,446,149
2,881,452,450
As at 30 June 2019 and 30 June 2020, 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
Term Deposits
NOTE 9: TRADE AND OTHER RECEIVABLES
Group
2020
$
134
2,414,537
1,000,000
3,414,671
2019
$
252
255,354
-
255,606
Group
2020
CURRENT
Trade receivables
Allowance for expected credit loss
Net trade receivables
Prepayments
Other receivables*
Gross Amount
$
Past due but not impaired
(days overdue)
Within trade
terms
1-30
$
31-60
$
61+
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
137,592
-
137,592
-
32,223
169,815
137,592
-
137,592
-
32,223
169,815
29
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 9: TRADE AND OTHER RECEIVABLES (CONTINUED)
Group
2020
NON-CURRENT
Security deposits
Gross Amount
$
Past due but not impaired
(days overdue)
Within trade
terms
1-30
$
31-60
$
61+
$
$
542,263
542,263
-
-
-
-
-
-
542,263
542,263
* Other receivables are mainly represented by cash security for bank guarantees, GST receivable and accrued
income.
Group
2019
CURRENT
Trade receivables
Allowance for expected credit loss
Net trade receivables
Prepayments
Other receivables*
NON-CURRENT
Security deposits
Gross Amount
$
142,888
-
142,888
32,399
538,004
713,291
1,945,306
1,945,306
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 primarily represented by a GST receivable due to reversed debtors and creditors
invoices. The Company was under administration at the end of 2019 financial year. 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.
Group
Non-current financial assets
Non-current financial assets comprise:
Unlisted investment, shares in
other corporations
2020
$
12,414
2019
$
12,414
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.
30
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
Plant and equipment:
At cost
Accumulated depreciation
Total plant and equipment
Group
2020
$
2,844,013
(486,072)
2,357,941
2019
$
2,841,916
(165,967)
2,675,949
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.
Group:
Balance at the beginning of year
Additions
Disposals
Impairment of Garden Island Microgrid
Write offs assets no longer held
Depreciation expense
Plant and
Equipment
2020
$
2,675,949
41,731
-
-
-
(359,739)
Plant and
Equipment
2019
$
14,443,068
79,714
(196,271)
(4,764,782)
(195,490)
(56,772)
Assets no longer held due to loss of control of subsidiaries
Carrying amount at the end of year
-
(6,633,518)
2,357,941
2,675,949
NOTE 12: RIGHT OF USE ASSETS
AASB16 has been adopted during the period. Refer to Note 1 for details
Group
Reconciliation
Balance on initial application
Additions during the year
Amortisation
Closing balance 30 June
2020
$
-
159,761
(39,940)
119,821
2019
$
-
-
-
-
31
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 13: INTANGIBLE ASSETS
Intangibles – CETO technology development asset
Movements for year ended 30 June
Opening Balance
Group
2020
$
2019
$
15,000,000
49,900,000
Subsequent development expenditure – CETO Technology
656,466
525,849
Other grants received
R&D tax incentive
Impairment
Balance as at 30 June
(1,065,493)
(1,423,234)
-
-
(482,982)
(33,519,633)
14,590,973
15,000,000
The CETO technology has yet to be commercialised and is in the development phase. The cash generating unit
to which the CETO technology belongs comprises significant other assets at 30 June 2020. Accordingly, the
approach adopted for this year’s valuation is 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), and
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.
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. In
the current year management has prepared a valuation model using the RRM which was then assessed by a
suitably qualified independent consultant after the conclusion of the financial year. 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.
32
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 13: INTANGIBLE ASSETS (CONTINUED)
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;
• 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 15-year forecast period with a terminal value has been utilised in the
financial model;
• 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;
• Management estimates of the cost to Carnegie (net of grants and research & development rebates) to
commercialise would require an R&D budget of $2 million per year until 2026;
• A tax rate of 25% until revenues reach $50m and 30% where revenue is above $50m;
• A discount rate of 21% derived by applying the capital asset pricing model (CAPM).
On this basis no additional impairment is required.
NOTE 14: TRADE AND OTHER PAYABLES
Group
2020
$
2019
$
210,623
1,101,998
46,162
4,151,827
256,785
5,253,825
Group
2020
$
2019
$
82,862
82,862
51,837
51,837
69,329
69,329
49,484
49,484
-
-
-
330,000
(330,000)
-
Trade creditors
Accruals
NOTE 15: PROVISIONS
Current
Annual, Long Service Leave and Other Employee Provisions
Non-current
Long Service Leave and Other Employee Provisions
Defect Liability Period Provisions
Opening balance as at 1 July
Decrease due to loss of control of subsidiaries
Closing Balance 30 June
33
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 15: PROVISIONS (CONTINUED)
Make Good Provisions
Opening balance as at 1 July
Decrease due to loss of control of subsidiaries
Closing Balance 30 June
2020
$
2019
$
-
-
-
385,116
(385,116)
-
Provision for Employee Benefits
A provision has been recognised for employee entitlements relating to long service leave (LSL), annual leave
and loyalty leave. 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 recognised for defect liability periods (DLP) on work performed when Energy Made
Clean (EMC) was owned and operated by the Group. 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 prior year.
NOTE 16: LEASE LIABILITY
Premises
Current liabilities
Non-current liabilities
Total lease liability
AASB16 has been adopted during the year, refer to Note 1 for details.
Reconciliation
Balance on initial application (i)
Liabilities incurred during the year (ii)
Principal repayments
Closing Balance 30 June
Group
2020
$
2019
$
79,881
48,603
128,484
Group
2020
$
2019
$
-
159,761
(31,277)
128,484
-
-
-
-
-
-
-
(i)
(ii)
No balances were initially recognised at 1 July 2019. Refer to Note 1
Extension of Fremantle office lease to 31 December 2021.
34
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17: BORROWINGS
Current
Carnegie convertible notes
Existing convertible notes
Convertible Notes reconciliation
Balance at the beginning of the period
Unwinding of finance costs
Conversion to equity during the period
Cancel existing convertible notes
Placement of new convertible notes
2020
$
Group
2019
$
2,825,000
1,650,000
-
4,389,987
2,825,000
6,039,987
6,039,987
4,337,047
110,013
52,940
(3,325,000)
(2,825,000)
-
-
2,825,000
1,650,000
2,825,000
6,039,987
On 22 October 2019, the Company entered into two convertible note facility agreements (Convertible Note
Facility Agreements) with the following parties:
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).
The Convertible Note Facility Agreements are 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 subscribed for the 2021 Notes to the value of $2,825,000. The commitment
amount was utilised in satisfaction of 50% of the debt owing to HFM and the CCE Noteholders when the
Company went into administration;
b) each 2021 Note will has a face value of A$25,000;
c) each 2021 Note converts 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 subject to voluntary escrow for six months from the date of issue);
d) the 2021 Notes mature 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);
f) 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.
b. Senior loan facility
Restricted access was available at the reporting date to the following lines of credit:
Current
Revolving R&D debt facility (i)
Addition funding drawn down
Less: unwinding finance costs
Repayment of debt facility
Group
2020
$
-
-
-
-
-
2019
$
722,827
600,000
77,173
(1,400,000)
-
(i)
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 previous financial year.
35
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 18: SHARE CAPITAL
Group
2020
$
2019
$
11,141,452,450 (2019: 2,881,452,450) fully paid ordinary
shares
203,221,135
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
2020
No.
2019
No.
At the beginning of reporting period
2,881,452,450
2,881,452,450
Shares issued during the year
—
—
—
—
Rights issue 28 October 2019
5,500,000,000
Shares issued from conversion of 50% of HMF loan to
equity 28 October 2019
Shares issued from conversion of 50% of the old
convertible Notes to equity 28 October 2019
Shares issued from conversion of funding loans to DoCA
proponents 28 October 2020
460,000,000
1,800,000,000
500,000,000
-
-
-
-
At reporting date
11,141,452,450
2,881,452,450
b. Ordinary shares $
At the beginning of reporting period
Shares issued during the year
2020
$
Group
2019
$
194,460,984
194,460,984
Rights issue 28 October 2019 @ $0.001 per share
5,500,003
—
—
—
—
Shares issued from conversion of 50% of the HMF loan to
equity 28 October 2019 @ $0.00125 per share
Shares issued from conversion of 50% of the old convertible
Notes to equity 28 October 2019 @ $0.00125 per share
Shares issued from conversion of funding loans to DoCA
proponents 28 October 2019 @ $0.001 per share
—
Sale of treasury shares
Accrual for unissued shares; interest on convertible notes
156,033
575,000
2,250,000
500,000
34,615
(255,500)
Share issue costs
At reporting date
-
-
-
-
-
-
-
203,221,135
194,460,984
36
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 18: SHARE 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 and debt funding via convertible notes.
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.
During the year there was a change in the capital structure due to recapitalisation of the Company following
a period of Administration via a rights issue. In addition, previous convertible notes were 50% converted to
equity. The remaining 50% of the previous convertible notes were cancelled and replaced with new
convertible notes (Refer to Note 17).
NOTE 19: RESERVES
2020
$
Group
2019
$
a.
Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange
differences arising on translation of foreign controlled subsidiaries
and foreign currencies
37,760
50,268
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
850,000
887,760
850,000
900,268
NOTE 20: BUSINESS RISK
The net loss of the Group for the financial year ended 30 June 2020 was $275,522, which included a profit on
discontinued operations of $1,536,861. (2019: net loss $51,930,513, which included a loss from discontinued
operations of $8,564,208). As at 30 June 2020, the Group had net assets of $17,862,931 (2019: $9,390,809).
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.
37
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
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.
2020
Revenue
External customers
Inter-segment
Continuing
Operations
Discontinued
Operations
Total
segments
Adjustments
and
eliminations Consolidated
117,668
-
117,668
-
-
-
117,668
-
117,668
-
-
-
117,668
-
117,668
2020
Continuing
Operations
Discontinued
Operations
Total
segments
Adjustments
and
eliminations Consolidated
Segment profit/(loss)
(1,812,383)
1,536,861
(275,522)
Total assets
Total liabilities
21,207,899
(3,344,968)
-
-
21,207,899
(3,344,968)
-
-
-
(275,522)
21,207,899
(3,344,968)
38
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21: OPERATING SEGMENTS (CONTINUED)
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
1,191,142
-
4,261,083
634,792
5,452,255
(634,792)
(634,792)
-
4,817,144
2019
Segment loss
Total assets
Total liabilities
Continuing
Operations
Discontinued
Operations
Total
segments
Adjustments
and
eliminations Consolidated
(43,366,305)
20,803,434
11,412,625
(8,564,208)
-
-
(51,930,513)
-
-
-
-
-
(51,930,513)
20,803,434
11,412,625
NOTE 22: RECONCILATION OF CASH FLOW FROM OPERATIONS WITH PROFIT/(LOSS) AFTER
INCOME TAX
Loss after income tax
Non-cash flows in loss
Depreciation and amortisation
Impairment
Write-off of assets
Effect of discontinued operations
Share options & loan funded shares expensed
Doubtful Debts
Changes in assets and liabilities, net of the effects of
purchase and disposal of subsidiaries
Group
2020
$
(275,522)
399,679
-
-
1,536,861
-
7,800
(Increase)/decrease in trade and other receivables
1,946,518
Increase/(decrease) in inventory
(Decrease)/increase in development assets
-
(56,435)
Increase/(decrease) in trade payables and accruals
(4,997,040)
Increase/(decrease) in provisions
Net cashflow (used in) operations
13,532
(1,424,607)
2019
$
(51,930,513)
250,991
37,877,887
25,171,525
(9,657,555)
10,000
41,310
(4,299,157)
(464,937)
1,669,148
(2,129,676)
(922,435)
(4,383,412)
39
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 23: CHANGES IN LIABILITIES FROM FINANCING ACTIVITIES
Consolidated
Balance as at 1 July 2019
Unwinding financing costs
Conversion to equity
Cancel old Convertible notes and
reissued new Convertible notes
Acquisition of leases
Net cash used in financing
activities
Balance as at 30 June 2020
Convertible Notes
Lease Liability
6,039,987
110,013
(3,325,000)
-
-
-
-
-
-
-
159,761
(31,277)
Total
6,039,987
110,013
(3,325,000)
-
159,761
(31,277)
2,825,000
128,484
2,953,484
NOTE 24: EVENTS AFTER THE REPORTING PERIOD
No 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 Group, the results of those operations or the state of affairs of the Group in subsequent
financial years.
NOTE 25: RELATED PARTY 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
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.
.Balances outstanding with Director and Director related entities:
Mooney & Partners Pty Ltd
Amount owing from Solar Farm Carnarvon Pty Ltd
Asymmetric Arbitrage Ltd – 10 convertible notes (1)
HFM Investments Pty Ltd – 23 convertible notes (2)
2020
$
4,400
-
250,000
575,000
Log Creek Pty Ltd <88 Green A/c> - 20 convertible notes (2)
500,000
2019
$
5,500
51,208
-
-
-
(1) Asymmetric Arbitrage Ltd is a company associated with Anthony Shields, who is a
Director.
(2) HFM Investments Pty Ltd and Log Creek Pty Ltd <88 Green A/c> are companies
associated with Mike Fitzpatrick, who is a Director.
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 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.
40
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 26: FINANCIAL RISK MANAGEMENT (CONTINUED)
(a)
Interest rate risk
The 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
$
0.81%
1,414,671
2,000,000
-
-
-
-
-
-
1,414,671
2,000,000
-
-
-
-
2,825,000
2,825,000
-
-
-
-
-
-
-
-
3,414,671
169,815
169,815
12,414
12,414
182,229
3,596,900
256,785
256,785
-
2,825,000
256,785
3,081,785
Weighted
Average
Effective
Interest
Rate
%
Floating
Interest
Rate
$
Fixed Interest Rate
Maturing
Within
year
$
1 to 5
years
$
Non-
interest
Bearing
$
Total
$
Group
30 June 2020:
Financial assets:
Cash and cash
equivalents
Receivables
Financial assets
Financial liabilities:
Accounts payable
Borrowings
Group
30 June 2019:
Financial assets:
Cash and cash
equivalents
0.00
218,678
-
Receivables
0.95
Financial assets
-
- 1,945,306
-
-
218,678 1,945,306
-
-
-
-
36,928
255,606
713,291
2,658,597
12,414
12,414
762,633
2,926,617
Financial liabilities:
Accounts
payable
Borrowings
-
-
- 5,253,825
5,253,825
- 6,039,987
-
-
6,039,987
- 6,039,987
- 5,253,825
11,342,812
41
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 26: FINANCIAL RISK MANAGEMENT (CONTINUED)
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 Group does not have any material credit risk exposure to any single debtor or group of debtors under financial
instruments entered into by the 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).
2020
Financial assets:
Financial assets:
—
Unlisted investments
2019
Financial assets:
Financial assets:
—
Unlisted investments
Level 1
$
Level 2
$
Level 3
$
Total
$
-
-
-
-
-
-
-
-
12,414
12,414
12,414
12,414
12,414
12,414
12,414
12,414
(d) Sensitivity Analysis
Interest Rate Risk
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.
42
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 26: FINANCIAL RISK MANAGEMENT (CONTINUED)
Interest Rate Sensitivity Analysis
At 30 June 2020, 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:
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%
(e) Liquidity Risk
2020
$
21
(21)
21
(21)
2019
$
6,523
(6,523)
6,523
(6,523)
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;
• 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.
NOTE 27: SHARE BASED PAYMENTS
Types of share-based payment plans
Employee share option plan
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.
Consultant & financier share options
Share options are granted to consultants at the discretion of the Board of Directors for services
provided to the 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 Group.
43
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 27: SHARE BASED PAYMENTS (CONTINUED)
No shares or options were issued to consultants and financiers during the financial year ended 30
June 2020 (2019: nil). No other shares or share options were issued during the financial year (2019:
Nil) in relation to the above share-based payment plans.
Total options outstanding and exercisable are as follows:
Group
Number
of options
Weighted Average
Exercise Price
$
Outstanding options as at 1 July 2019
45,000,000
Granted
Outstanding as at 30 June 2020
Exercisable as at 30 June 2020
2,760,000,000
2,805,000,000
2,805,000,000
0.05020
0.00143
0.00143
0.00143
The options outstanding as at 30 June 2020 had a weighted average exercise price of $0.00143
and a weighted average remaining contractual life of 2.33 years. Exercise prices range from
$0.00125 to $0.06 in respect to options outstanding as at 30 June 2020.
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.
2020
$
2019
$
STATEMENT OF FINANCIAL POSITION
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 loss
44
3,547,346
1,116,867
17,666,720
15,068,574
21,214,066
16,185,441
3,245,048
11,403,289
100,440
49,484
3,345,488
11,452,773
17,868,578
4,732,668
203,221,135
194,372,911
850,000
850,000
(186,202,557)
(190,490,243)
17,868,578
4,732,668
(141,707)
(70,776,974)
(141,707)
(70,776,974)
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
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
2020
$
Group
2019
$
464,937
-
(464,937)
-
-
-
-
-
-
-
NOTE 30: PROFIT/(LOSS) FROM DISCONTINUED OPERATIONS
On 14 March 2019, EMC was placed into voluntary administration. After holding meetings with creditors, the
Administrators placed EMC into liquidation. 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
Cash from sale of Northam Solar Farm
Creditors, accruals and other liabilities
Payment to Creditor Trust as agreed for delay in relisting
KordaMentha administration fee
Cash transferred to creditors trust
Payment to Creditor Trust for Northam Solar Farm expired
bank guarantee
Profit/(Loss) from discontinued operations
NOTE 31: ASSETS HELD FOR SALE
Northam Solar Farm Partnership
2020
$
-
-
-
-
-
-
(200,868)
3,783,432
(463,615)
(1,400,000)
(18,253)
2019
$
(11,798,583)
(5,224,274)
(8,148,668)
(85,000)
(5,258,049)
21,950,366
-
-
-
-
-
(163,835)
1,536,861
-
(8,564,208)
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 administrators sold
the remaining 11.33% investment in October 2019 for $200,868, and the funds were retained in
the creditors trust by the administrators.
Loss on revaluation of investment held for sale – Northam Solar Farm
Net Assets as at 1 July 2018
Net change in fair value of assets FY 19
Less impairment charge
Disposal value
2020
$
-
-
-
-
2019
$
3,016,909
(123,868)
(2,692,173)
200,868
45
CARNEGIE CLEAN ENERGY LIMITED
ABN 69 009 237 736
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 32: 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)
2020
2019
Carnegie Recreational Watercraft Pty Ltd
CETO IP (Australia) Pty Ltd
CETO Wave Energy Ireland
CETO Wave Energy UK
CMA Nominees Pty Ltd
New Millennium Engineering Pty Ltd
Australia
Australia
Ireland
United Kingdom
Australia
Australia
100
100
100
100
100
100
100
100
100
100
100
100
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
46
CARNEGIE CLEAN ENERGY LIMITED ABN 69 009 237 736 AND CONTROLLED ENTITIES 47 DIRECTORS’ DECLARATION The Directors of the Company declare that: 1. the financial statements and notes, as set out on pages 13 to 46, are in accordance with the Corporations Act 2001 and: a. comply with Accounting Standards and the Corporations Regulations 2001; b. give a true and fair view of the financial position as at 30 June 2020 and of the performance for the year ended on that date of the Group; 2. the financial statements comply with International Financial Reporting Standards as set out in Note 1; 3. 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. the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001; b. 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 TERRY STINSON Director Director Dated this 26th day of August 2020 INDEPENDENT AUDITOR’S REPORT
To the members of Carnegie Clean Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Carnegie Clean Energy Limited (“the Company”) and its
controlled entities (“the Group”), which comprises the consolidated statement of financial position
as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income,
the consolidated statement of changes in equity and the consolidated statement of cash flows for
the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2020 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 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.
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. We have determined the matters described below to
be the key audit matters to be communicated in our report.
48
Key Audit Matter
Fair value of intangible assets
Note 13 – Intangible Assets
As at 30 June 2020, the Group has recorded
intangible assets with a value of $14,590,973 which
relate
to capitalised development costs and
intellectual property associated with the CETO
technology development asset. This asset is in the
development phase and is not yet available for use.
Under AASB 136 Impairment of Assets, intangible
assets that are not yet available for use are subject
to an annual impairment assessment irrespective
of whether indicators of impairment exist.
How our audit addressed the key audit
matter
Our procedures included but were not
limited to the following:
• We reviewed the valuation obtained by
independent
the valuation approach
from an
management
expert and
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 consider the recoverability of intangible assets
to have been a key audit matter as it involved
complex matters
involving subjectivity and
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
Going concern
Note 1 of the financial report
The Group recorded a consolidated
loss of
$275,522 which included a profit from discontinued
operations of $1,536,861 and had cash outflows
investing activities of
from operating and
$1,424,607 and $664,169 respectively.
As at 30 June 2020 the Group had cash and cash
equivalents of $3,414,671 and has convertible
notes due within 12 months.
inappropriate,
If the going concern basis of preparation of the
financial statements was
the
carrying amount of certain assets and liabilities
In addition,
may have significantly differed.
management and
the auditor must consider
whether a material uncertainty exists that may cast
significant doubt on the Group’s ability to continue
as a going concern. Disclosure is required in the
financial report should significant doubt exist.
Due to the significant judgement involved with
forecasting cash flows, this is considered a key
audit matter.
• 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.
Our audit procedures included but were not
limited to the following:
• We considered the appropriateness of
the going concern basis of accounting
by
underlying
assumptions in cash flow projections
prepared by
including
sensitivity analysis;
the Group
evaluating
the
• We obtained
from
management surrounding assumptions
within the forecast;
representations
and
• We
assessed
evaluated
management’s plans for future actions;
• We considered alternative sources of
capital and financing for the repayment
of the convertible notes and the ability
of the Group to raise funds if required;
and
• We examined
the adequacy of
disclosures made in 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 Group’s annual report for the year ended 30 June 2020 but does not
include the financial report and our auditor’s report thereon.
49
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or 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 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 Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
-
50
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 2020.
In our opinion, the Remuneration Report of Carnegie Clean Energy Limited for the year ended 30
June 2020 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
26 August 2020
N G Neill
Partner
51
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Carnegie Clean Energy – Annual Report 2020
We harness ocean energy to make
the world more sustainable.
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