More annual reports from Clean TeQ Holdings:
2018 ReportPeers and competitors of Clean TeQ Holdings:
M8 Sustainable Limited2015 AnnuAl RepoRt
a brave new world in
environmental innovation
Through the development of Syerston, Clean TeQ has
the opportunity to become the leading, and lowest
cost, supplier of scandium to the global transportation
industry. A bulk sample of Syerston ore was taken during
the year for processing to produce Scandium Oxide.
Contents
OppOrtunities
Metals recO very
Water purificatiOn
2015 year in revieW
cHairMan and ceO’s repOrt
BOard and ManageMent
financial repOrt
sHareHO lder infOrMati On
cOrpOrate directOry
Our Vision
3
4
6
8
9
11
13
91
Ibc
Clean TeQ is a world leader in environmental innovation.
Our vision is to create a globally significant business which is
focused on providing clean solutions to a range of industries using
our proprietary Clean-iX® continuous ion exchange technology.
We are focused on the markets and ventures where our unique
technology is best placed to unlock significant long term value for
shareholders – metals recovery and industrial water purification.
Annual Report 2015 CleanTeQ | 1
Clean TeQ constructed a demonstration scale plant
to recover Scandium Oxide from Syerston ore utilising
our proprietary Resin In Pulp® continuous ion exchange
technology in order to prove the viability of the process
and to produce samples for customer validation.
2 | CleanTeQ Annual Report 2015
Opportunities
The acquisition of the Syerston
For our Water Division, the
Project allows Clean TeQ’s
Metals Division to capture
all of the value that can be
unlocked by the application of
our Clean-iX® continuous ion
exchange technology.
Through the development
of Syerston, Clean TeQ has
the opportunity to become
the leading, and lowest cost,
supplier of scandium to the
global transportation industry.
A range of additional
opportunities in the field of
metals recovery are being
pursued in Australia and
offshore.
large Chinese industrial market
and process waters from the
mining industry remain as key
opportunities.
Clean TeQ is committed to
the formal establishment of
a joint venture with Shanghai
Investigation, Design and
Research Institute Co. Ltd.
(SIDRI) majority-owned
by China Three Gorges
Corporation, the state-owned
Chinese power company
responsible for construction of
the Three Gorges Dam Project
(the world largest hydroelectric
power plant) and one of
the world’s largest energy
companies.
Annual Report 2015 CleanTeQ | 3
Metals Recovery
Our Clean-iX® Continuous Ion Exchange technology is an innovative process
for the extraction and purification of a range of valuable metals from slurries
and solutions that are not amenable to conventional separation.
● Business strategy aimed at
ownership, not service delivery
● Focused on markets where
extraction and purification
technology provides a
competitive advantage
● Opportunities for economic
processing of low grade
metal ores
● Successfully demonstrated
the extraction of scandium
from primary ore, refinery
waste streams and base
metals from mine locations
● Promising opportunities
identified in Australia and
offshore
● Strong intellectual
property portfolio
4 | CleanTeQ Annual Report 2015
Metals Recovery
Technologies and
Applications
Cobalt
Green
Mining
Unique
Technology
Platform
Scandium
Clean TeQ
Metals
Nickel
Undervalued
Reserves
Strong
IP Portfolio
Copper
Annual Report 2014 CleanTeQ | 5
Water Purification
Our Continuous Ionic Filtration & Exchange (CIF®) and Macroporous Polymer
Adsorption (MPA®) resin technology provides cost effective solutions to the
mining, oil and gas and municipal industries for the treatment of waste waters.
● Targeting filtration, separation
and purification of industrial
waters and wastewaters where
conventional technologies
struggle – complicated and
complex waters are our strength
● Suite of products developed
around Continuous Ion
Exchange for water and
wastewater recycling
● Now focused on securing large
opportunities to treat process
waters from the mining sectors
– focus on Australia, Africa and
South America
● Major opportunities in China
being pursued in conjunction
with strong local partner SIDRI
– targeting waste water and
industrial pollution
6 | CleanTeQ Annual Report 2015
Water Purification
Technologies and
Applications
Salt
Reduction
Continuous
Ionic
Filtration
(CIF™)
DeSALx™
Metals
Removal &
Recovery
Clean TeQ
Water
Solids
Removal
Evaporation
HIROx™
Brine
Reduction
& Salt
Recovery
Annual Report 2014 CleanTeQ | 7
2015 Year in Review
Clean TeQ’s Continuous Ion Exchange technology has been developed as
a means to employ ion exchange in a cost effective manner for the recovery
of metals and for the treatment of industrial waste water.
● Divestment of Air Purification
Division for cash proceeds of
$1.7 million to focus exclusively on
Clean TeQ’s proprietary continuous
ion exchange technology.
● $9.1 million in new equity issued
during the year, including the
conversion of convertible notes,
with an additional $8.9 million
raised in August 2015.
● Balance sheet significantly
strengthened with early conversion of
$4.1 million of convertible notes and
repayment of the Nippon Gas debt.
● As at 31 August 2015 the Company
had approximately $9.5 million in
cash and no debt other than the
$3 million of zero coupon promissory
notes payable to Ivanhoe Mines Ltd
in relation to the acquisition
of Syerston.
● Acquisition of the Syerston Scandium
Project – the world’s largest and
highest grade known scandium
resource.
● Completion of the Syerston scoping
study demonstrating strong project
economics.
● Collaboration agreements signed
with both Airbus AP Works and KBM
Affilips to develop the scandium
market for aerospace and other
industrial sectors.
● Scandium recovery pilot plant trial
in Japan confirmed Clean TeQ’s
ion-exchange extraction processes’
ability to recover low concentrations
of scandium from intermediate
process streams.
● Heads of Agreement with SIDRI
for the deployment of the company’s
proprietary water treatment
technologies in China.
● Comprehensive test work
programme undertaken which
successfully demonstrated the
viability of Clean TeQ’s process to
treat a complex industrial wastewater
stream from an industrial plant
in China – an important first step
towards the establishment of the
China joint venture with SIDRI.
8 | CleanTeQ Annual Report 2015
Chairman and
CEO’s Report
Dear ShareholDerS,
Over the past year Clean TeQ has made excellent
progress towards the successful commercialisation
of our world-class continuous ion exchange technology
platform. The company continues to focus on the
industries and ventures where our technology is best
placed to unlock significant value for shareholders –
metals recovery and industrial water purification.
The strategic decision to focus on metals recovery
and water purification resulted in the disposal of
Clean TeQ’s Air Purification business during the year.
The transaction consideration of $1.7 million cash
represented good value for Clean TeQ shareholders and
also provides the following additional benefits:
z Achieves a non-dilutive means of generating a
significant amount of free cash to be reinvested in
the company’s Metals and Water divisions;
z Focuses Clean TeQ’s strategic growth exclusively
on the company’s proprietary continuous ion
exchange technology;
z Provides the company with the opportunity to reduce
overhead and administrative costs; and,
z Simplifies Clean TeQ’s organisational, management
and financial structure.
MetalS DIvISIon
The acquisition of the Syerston Project provides the
company with the opportunity to deploy our technology
and capture all of the value from the development of a
strategically important asset. Through Syerston, we are
embarking on a journey which we believe will result in
Clean TeQ becoming the leading, and lowest cost, supplier
of scandium to the global transportation industry.
Economic factors are driving the aerospace industry to
develop lighter materials, without sacrificing strength,
durability and reliability. Regulated emissions targets
are also driving the global auto manufacturing industry
down the path of developing new and innovative
lightweight materials.
Scandium is, pound for pound, the most effective
alloying agent for aluminium. It provides unique
benefits unobtainable by conventional alloys, including:
z Grain Refinement – by changing the granular
structure of aluminium in Al-Sc alloys, scandium
provides significant additional strength with very
little relative increase in weight.
z Weldability – Al-Sc alloys are able to be welded
with no loss in strength, offering the aerospace
industry the opportunity to use conventional
welding techniques, providing significant savings
in assembly time and aircraft weight.
z Hardening and superplasticity – the alloys are
significantly harder but can still be subject to high
stresses in order to form complex shapes without
loss of strength.
z Corrosion resistance and conductivity – superior
corrosion resistance as well as thermal conductivity.
Widely acknowledged as having exceptional
performance characteristics in aerospace materials,
Al-Sc alloys are already used for limited applications
in aircraft manufacturing. Relative scarcity and price
volatility have limited the wider use of these alloys in
industrial applications for many decades. Through the
development of the world’s first primary scandium
mine, Clean TeQ intends to address both these issues.
Annual Report 2015 CleanTeQ | 9
Chairman and CEO’s Report CONTINUED
A comprehensive test work programme was undertaken
during the year which successfully demonstrated the
technical viability of the Clean TeQ process to treat
a complex industrial wastewater stream from an
industrial plant in China. The success of the test work
programme was an important first step towards the
establishment of the China venture with SIDRI. Clean
TeQ is continuing to progress the formal establishment
of the joint venture with SIDRI. Once this relationship is
formalised with this strong local partner we anticipate
that a number of value accretive industrial projects will
be pursued over the next twelve months.
I would like to conclude by thanking our shareholders
for their support and continued belief in our
management team’s ability to deliver on our vision
of creating a world class, environmentally focused
technology company. I would also like to thank
my colleagues on the board and, in particular, our
dedicated staff for their commitment and contribution
towards achieving our common goal.
Yours faithfully
Sam Riggall
Chairman and CEO
Primary mine production will allow Clean TeQ to
deliver large, scalable volumes of scandium to meet
the emerging and growing demands of the global
transportation sector. Syerston is development ready,
with key permits and critical water rights already in
place, and is located in a jurisdiction with low sovereign
risk, giving investors and off-takers confidence that
scandium will be supplied cheaply and reliably.
Through the deployment of our continuous ion exchange
technology, Clean TeQ intends to build a substantial
metals business, focussed on metals and projects
which are critical components of the next generation
of materials and technologies needed to sustainably
maintain and improve global living standards.
Water DIvISIon
Clean TeQ’s continuous ion exchange technology
provides significant cost and operational benefits in
treating industrial waste waters. The Water Division
is primarily focused on the large Chinese industrial
market where rapid growth over recent decades has
outpaced the effective implementation of environmental
protection legislation. The challenge to bring China’s
industry up to world class environmental standards
cannot be over-estimated, and the Chinese are actively
pursuing new and innovative technologies to address
the broad range of environmental challenges that
nation is facing.
During the year Clean TeQ signed a ground-breaking
Heads of Agreement with Shanghai Investigation,
Design and Research Institute Co. Ltd (SIDRI) in
China to establish a local joint venture to pursue
opportunities in China by deploying Clean TeQ’s unique
water treatment technology. SIDRI is majority-owned
by China Three Gorges Corporation, the state-owned
Chinese power company responsible for construction
of the Three Gorges Dam Project (the world largest
hydroelectric power plant) and one of the world’s
largest energy companies.
10 | CleanTeQ Annual Report 2015
Board and Management
The Clean TeQ team comprises a group of professionals with a diverse skill base
and great depth of experience in technical and commercial disciplines.
Mr Sam Riggall
Chairman and CEO
Mr Peter Voigt
Executive Director
Mr Roger Harley
Non-executive Director
Mr Ian Knight
Non-executive Director
Mr Eric Finlayson
Non-executive Director*
Mr John Carr
General Manager Metals Division
Mr Ealden Tucker
General Manager Water Division
Mr Ben Stockdale
Chief Financial Officer
Ms Melanie Leydin
Company Secretary
* Appointed 17 September 2015
Annual Report 2014 CleanTeQ | 11
During the year Clean TeQ completed a drill program
at Syerston which confirmed the extension of the high
grade scandium zones identified in a 2014 drill program
and historical drilling completed during the initial
assessment of the deposit in the 1990’s.
12 | CleanTeQ Annual Report 2015
Financial Report
FOR THE YEAR ENDED 30 JuNE 2015
Clean TeQ Holdings Limited and its controlled entities
ABN 34 127 457 916
Directors’ report
AuDitor’s inDepenDence Decl ArAtion
stAteMent oF proFit or l oss AnD other co Mprehensive inco Me
stAteMent oF FinAnciAl position
stAteMent oF chAnges in equity
stAteMent oF cAsh Flows
notes to the FinAnciAl st AteMents
Directors’ Decl ArAtion
inDepenDent AuD itor’s report
shAreholDer inForMA tion
14
30
31
33
34
35
36
88
89
91
Annual Report 2015 CleanTeQ | 13
Directors’ report
The directors present their report, together with
the financial statements, on the Consolidated Entity
(referred to hereafter as the ‘Consolidated Entity’)
consisting of Clean TeQ Holdings Limited (referred
to hereafter as the ‘Parent Entity’, ‘the Company’
or ‘Clean TeQ’) and the entities it controlled, and
interests in associates for the year ended 30 June
2015, and the auditor’s report thereon.
Directors
DiviDenDs
There were no dividends paid, recommended or
declared during the current or previous financial year.
review of oPerations
The loss for the Consolidated Entity after providing
for income tax amounted to $8,225,000 (30 June
2014: loss after tax of $4,910,000).
The following persons were directors of Clean TeQ
Holdings Limited during the whole of the financial year
and up to the date of this report, unless otherwise stated:
• Sam Riggall (Chairman and Executive Director)
• Peter Voigt (Executive Director)
• Roger Harley (Independent Non-Executive Director)
•
Ian Knight (Independent Non-Executive Director)
During the financial year the Consolidated Entity’s
revenues increased to $7,725,000 (2014: $6,108,000)
due to generally higher levels of project activity in the
Consolidated Entity’s Air Purification Division. During
the financial year the Consolidated Entity recorded
losses from continuing operations of $9,155,000 after
tax compared to a $6,193,000 loss incurred in the
prior year.
PrinciPal activities
During the financial year the principal continuing
activities of the Consolidated Entity consisted of:
• Provision of industrial air purification and odour
elimination solutions (‘Air Purification Division’)
• The continued development and use of the
Clean-iX® and proprietary CIF™ technologies in
conjunction with other technologies, which can
be used for the purification and recycling of waste
water and for desalination of brackish water to
produce high quality industrial water (‘Water
Division’); and,
• The continued development and use of the
Clean-iX® technology which can be used to
extract a range of resources in the mining industry
including base metals, precious metals and
radioactive elements (‘Metals Division’).
During the financial year the Consolidated Entity
divested its Air Purification Division to allow the
Consolidated Entity to focus exclusively on the Water
and Metals Divisions which are both primarily driven
by the Consolidated Entity’s proprietary continuous ion
exchange technology.
There have been no other significant changes in the
nature of the Consolidated Entity’s activities during the
financial year.
The Air Purification Division revenue increased from
$4,754,000 to $6,935,000, reflecting the effect of the
successful delivery of a number of projects awarded
late in the 2014 financial year as well as a number of
new contracts which were awarded during the current
financial year.
The overall net profit for the Air Purification Division is
lower than the prior year. The variation is mainly due
to changes in the accounting and reporting processes
within the Consolidated Entity, whereby the Air
Purification Division, which carried on its activities
within a separate company within the group, was
charged overhead and management costs which
were previously borne by the Consolidated Entity’s
corporate department.
The revenue in the Water and Metals Divisions remained
low but the key emphasis for these divisions continued
to be technology development and pursuit of revenue-
generating opportunities. These Divisions are anticipated
to produce substantial revenues in the future.
In the Water Division, the focus was on developing
commercial opportunities for the Consolidated Entity’s
technology to treat waste waters, with increased
emphasis on opportunities in the large Chinese market
via the Consolidated Entity’s proposed joint venture
with Shanghai Investigation, Design & Research
Institute Co. Ltd (‘SIDRI’), an affiliate of China Three
Gorges Corporation.
14 | CleanTeQ Annual Report 2015
During the financial year a comprehensive test work
programme was undertaken which successfully
demonstrated the technical viability of the
Consolidated Entity’s process to treat a complex
industrial wastewater stream from an industrial plant
in China. The success of the test work programme
was an important first step towards the establishment
of the China joint venture with SIDRI.
The Metals Division continued its development work
on the extraction and purification of a range of metals
with a focus on scandium, both from titanium dioxide
process streams and from primary mining activities at
the Consolidated Entity’s Syerston Scandium Project.
During the financial year a scandium recovery pilot
plant was delivered to Ishihara Sangyo Kaisha,
Ltd’s facility in Japan for completion of a scandium
recovery pilot trial. The piloting work confirmed
the Consolidated Entity’s ion-exchange extraction
processes’ ability to recover low concentrations of
scandium from intermediate process streams.
The Consolidated Entity also continued to progress the
development of the Syerston Scandium Project in NSW
that was acquired on 31 March 2015. In May 2015 the
Consolidated Entity completed a scoping study for the
Syerston Project which confirmed strong economics
for the proposed project development. The scoping
study was based on a flow sheet processing 64,000tpa
of feed from Syerston’s near-surface resource. The
proposed processing plant consists of a high pressure
acid leach circuit followed by the Consolidated Entity’s
Resin-In-Pulp continuous ion exchange technology for
scandium recovery, followed by purification.
High level results of the study include:
• Based on a long term scandium oxide (‘Sc2O3’)
(99.9% purity) price of USD$1,500/kg Sc2O3,
the project delivers a post-tax NPV of AUD$279M
(8% discount rate) and a 53% post-tax IRR;
• Average feed grade of 510g/t Sc (inclusive of
pit selection, dilution and mining factors) with
Scandium recovery of 85% to achieve average
production of 42.5t per annum 99.9% Sc2O3
over an initial 20 year mine life, with additional
resources available for decades of additional
production;
• A capital cost of AUD$78.4 million (USD$61.1
million) which includes a 20% contingency on
directs costs; and
• Average operating cash cost of AUD$571/kg
Sc2O3 (US$446/kg Sc2O3) over an initial 20 year
mine life.
The current global supply of scandium oxide is
approximately 10-15tpa, with prices ranging from
USD$2,000-3,000/kg Sc2O3. In order to facilitate
wider-scale adoption in key emerging markets
(such as high performance aluminium alloys), the
Consolidated Entity has used a long term scandium
oxide price of USD$1,500/kg Sc2O3in its project
valuation, which is at a significant discount to the
current market price.
The Consolidated Entity has signed collaboration
agreements with both Airbus and KBM Affilips to
develop the scandium market for aerospace and
other industrial sectors. The agreements provide a
framework under which the Consolidated Entity will
work with the downstream scandium supply chain
to determine potential demand and the ability of the
Syerston Project to meet that demand at the required
price and quality specifications.
The continuing development of the Consolidated
Entity’s technologies resulted in $666,000 of
expenditure being capitalised into intangible assets
during the financial year ended 30 June 2015. This
expenditure, along with the net cash outflows from
operating activities of $3,284,000 was financed largely
by share issues totalling $3,793,000 after issue costs.
significant changes
in the state of affairs
In August 2014, the Consolidated Entity and Nippon
Gas Co Limited (‘NGC’) agreed to modify the payment
terms for the Consolidated Entity to purchase NGC’s
50% share of the Associated Water Joint Venture and
NGC’s 85% share of Clean World Japan. The original
payment terms of $1,000,000 payable in August 2014
and $1,000,000 in May 2015 were modified to an
initial $100,000 payment by the Consolidated Entity
in August 2014 with a further $2,300,000 payment
(including interest) in September 2015.
On 18 September 2014 the Company announced the
issue of 18,685,714 fully paid ordinary shares at $0.07
(7 cents) per share via a private placement. The issue
raised a total of $1,308,000 before costs of issue.
In October 2014 the Consolidated Entity announced
the merger of the air treatment business carried on
by its subsidiary Clean TeQ Air Pty Ltd (‘Air’) and
the Australian air treatment business of Aromatrix
Technologies by way of any acquisition by Air of the
Aromatrix air business. The acquisition was completed
on 1 December 2014 (refer to Note 40 for details).
Annual Report 2015 CleanTeQ | 15
Directors’ rePort
continued
On 20 October 2014 the Consolidated Entity
announced that it had signed a Heads of Agreement
with SIDRI for the deployment of the Consolidated
Entity’s proprietary water treatment technologies
in China. The Heads of Agreement provides for a
stepwise approach to a collaborative partnership in
China. It provides for the establishment of a joint
venture which will be established by the Consolidated
Entity and SIDRI on the completion of a commercial
trial demonstrating the technical and commercial
viability of the Consolidated Entity’s ion exchange
technologies.
During the financial year a comprehensive test work
programme was undertaken which successfully
demonstrated the technical viability of the
Consolidated Entity’s process to treat a complex
industrial wastewater stream from an industrial plant
in China. The success of the test work programme
was an important first step towards the establishment
of the China joint venture. Negotiations with SIDRI on
the formation of the joint venture are well advanced
but a successful outcome is ultimately dependent
on securing an initial commercial project for the
technology in China.
Following successful technology demonstration,
discussions are also well advanced with the first
potential commercial customer in relation to the
proposed installation of a 1,500m3 per day toll
treatment wastewater facility at an industrial plant
in China. However, the outcome of those discussions,
and whether the contract will ultimately be secured,
is still uncertain.
The Consolidated Entity’s Chief Executive Officer,
Mr Cory Williams, resigned on 18 November 2014.
The Consolidated Entity’s Chairman, Mr Sam Riggall,
agreed to accept the role of Interim Chief Executive
Officer.
On 12 December 2014 the Company announced the
issue of 37,500,000 fully paid ordinary shares at a
price $0.06 (6 cents) per share via a private placement
to professional and sophisticated investors. The issue
raised a total of $2,250,000 before costs of the issue.
Effective 31 March 2015, the Consolidated Entity
completed the acquisition of the Syerston Project
in central New South Wales from a wholly owned
subsidiary of Ivanhoe Mines Ltd.
The acquired assets include:
• 100% title to the Syerston exploration licence
and the six mining lease applications underlying
the project;
16 | CleanTeQ Annual Report 2015
• All environmental approvals and development
consents previously obtained by the Syerston
Project Entity;
• Freehold land comprising 2,884 hectares in total,
underlying the mineral title; and
• An existing bore field and water rights.
The consideration for the acquisition comprised:
• 7,373,053 Clean TeQ fully paid ordinary shares;
• $100,000 cash, which was reduced to $31,667 at
completion after netting off the value of assets
and liabilities assumed by the Consolidated Entity
as part of the transaction;
• Deferred consideration via issue of a promissory
note with a face value of $3,000,000, payable in
three years’ time and carrying a zero coupon; and,
• A 2.5% gross revenue royalty payable to
Ivanhoe Mines.
In May 2015 the Company issued 7,449,143 shares
to NGC at approximately 14.1 cents per share in
settlement of $1,050,000 of principal and accrued
interest owing to NGC, reducing the amount payable in
September 2015 to $1,171,000 (including interest).
In accordance with the terms of the Convertible Notes
held by Robert Friedland, and as result of the share
issue to NGC, the Company also issued 1,246,537
shares to Robert Friedland at approximately 14.1 cents
per share for total cash consideration of approximately
$176,000.
In May 2015, the Company also issued 44,678,581
shares to Robert Friedland and 6,253,304 shares
to Sam Riggall upon the early conversion of their
convertible notes with face values of $3,572,000
and $500,000 respectively. The convertible notes
were convertible into fully paid ordinary shares of the
Company at a price of 7.9958 cents per share. The
original conversion price of 10 cents was adjusted
in accordance with the terms of the convertible
note agreements to reflect the value impact on the
convertible notes from share issues undertaken since
the date of issue.
Effective 30 June 2015 the Consolidated Entity
divested its 59% shareholding in Clean TeQ Aromatrix
Pty Ltd to Australia Sunshine Holdings Limited for
cash proceeds of $1,681,500. The divestment allows
the Consolidated Entity to focus exclusively on the
Consolidated Entity’s Water and Metals Divisions which
are both primarily driven by the Consolidated Entity’s
proprietary continuous ion exchange technology.
There were no other significant changes in the state of
affairs of the Consolidated Entity during the financial year.
Directors’ rePort
continued
Matters subsequent to the enD
of the financial year
Effective 1 July 2015 Sam Riggall, Executive Chairman
and Interim Chief Executive Officer, was appointed
Chairman and Chief Executive Officer.
Further information on likely developments in
the operations of the Consolidated Entity and the
expected results of operations have not been included
in this report because the directors believe it would
be likely to result in unreasonable prejudice to the
Consolidated Entity.
environMental regulation
The Consolidated Entity has an interest in the
exploration license disclosed in note 18. The
authorities responsible for the granting of these
licences require the tenement holder to comply
with the terms and conditions of the licence and
all directions given to it by those authorities. The
terms and conditions of any exploration licence
typically include certain environmental conditions,
covering such matters as Aboriginal cultural heritage,
threatened species, habitat, heritage items, trees
and vegetation, roads and tracks, groundwater,
streams and watercourses, erosion and sediment
controls, preventing and monitoring pollution, refuse,
chemicals, fuels and waste materials, transmission
lines and pipelines, drilling, rehabilitation of the land,
environmental reporting, and site security. There
have been no known breaches of the Consolidated
Entity’s licence conditions or any other environmental
regulation during the financial year or up until the date
of this report.
In early July 2015 the Consolidated Entity received
a further $455,000 cash rebate from the Australian
Tax Office for eligible research and development
expenditure in the 2014 financial year. The Company
anticipates that a significant proportion of the 2015
and 2016 financial years’ expenditure, including a large
proportion of Syerston testwork and feasibility studies,
will also be eligible for the refundable tax offset.
On 27 July 2015 the Company launched a non-
renounceable one for ten entitlement offer at a price
of $0.18 (18 cents) per share (‘Entitlement Offer’)
to raise $6,638,000 before costs of the Entitlement
Offer. The Entitlement Offer is fully underwritten by
BW Equities Pty Ltd.
Apart from the matters referred to above, no other
matter or circumstance has arisen since 30 June 2015
that has significantly affected, or may significantly
affect the Consolidated Entity’s operations, the results
of those operations, or the Consolidated Entity’s state
of affairs in future financial years.
likely DeveloPMents anD
exPecteD results of oPerations
The Consolidated Entity will continue to pursue its
objectives of advancing the development of its suite
of applications for the treatment of water for use
by the water and resource sectors. This will include
further commercial development of the applications
that are both currently in use and in development and
advancing the market penetration strategies to enable
the Consolidated Entity to fully exploit the potential of
its products in the Metals and Water Divisions.
The Consolidated Entity intends to fund its
development through operational revenues from
contracts entered into, and through securing additional
contracts throughout the year. The Consolidated Entity
will consider both debt and equity funding should the
need arise, and has already commenced the process
of raising equity funding by launching an entitlement
offer that is expected to raise $6,638,000 before costs.
Annual Report 2015 CleanTeQ | 17
Directors’ rePort
continued
inforMation on Directors
Mr Sam Riggall
Qualifications
Experience and expertise
Chairman & Chief Executive Officer
LLB (Hons), B.Com., MBA
Mr Riggall is a graduate in law and commerce from Melbourne
University and has an MBA from Melbourne Business School.
He was previously Executive Vice President of Business
Development and Strategic Planning at Ivanhoe Mines Ltd. Prior
to that Mr Riggall worked in a variety of roles in Rio Tinto for over
a decade covering project generation and evaluation, business
development and capital market transactions. Mt Riggall was
appointed to the Clean TeQ Board and to the position of Chairman
on 4 June 2013, and is a member of the Audit Committee, the
Nomination and Remuneration Committee, and the Market
Disclosure Committee. Mr Riggall was appointed Executive
Chairman and Chief Executive Officer effective 1 July 2015.
Other current directorships
Syrah Resources Limited
Former directorships (last 3 years)
Nil
Special responsibilities
Interests in shares
Interests in options
Mr Riggall is a member of the Audit Committee, the Nomination
and Remuneration Committee and of the Market Disclosure
Committee.
6,253,304 fully paid ordinary shares
8,000,000 unlisted options exercisable at $0.1619 (16.19 cents)
per option
Interests in rights
Nil
Executive Director
Mr Voigt has a Bachelor and Masters of Applied Science
(Chemistry) from the Royal Melbourne Institute of Technology.
Mr Voigt established Clean TeQ in 1990 and as Executive Director
is currently involved in the delivery of strategic initiatives in water
and resource recovery sectors. Mr Voigt became a Director of
the Company in 2007 and held the positions of Chief Technology
Officer from 2007 to 2009 and Chief Executive Officer from 2010
to 2013. Mr Voigt is a biochemist, with extensive experience
in technology development, commercialisation, partnering and
licencing globally. Prior to founding Clean TeQ, Mr Voigt held
a number of technical management positions with major food
companies and universities.
Nil
Nil
Nil
27,614,683 fully paid ordinary shares
1,000,000 unlisted options exercisable at $0.1935 (19.35 cents)
per option
Mr Peter Voigt
Qualifications
Experience and expertise
Other current directorships
Former directorships (last 3 years)
Special responsibilities
Interests in shares
Interests in options
18 | CleanTeQ Annual Report 2015
Directors’ rePort
continued
Mr Roger Harley
Qualifications
Experience and expertise
Independent Non-Executive Director
Mr Harley has a science degree from the University of
Melbourne and is a Fellow of the Australian Institute of
Company Directors.
Mr Harley is a founder and principal of independent corporate
advisory firm, Fawkner Capital. Previously he worked for 11
years for Deutsche Bank, and held positions including Director
of Corporate Finance and Director of Equity Capital Markets. His
current roles also include Director of People and Parks Foundation
and Trustee of the Alfred Deakin Lecture Trust. Mr Harley has
had various appointments by the Commonwealth Government
that related to the oversight of innovation and venture capital
programs and policies. These include membership of the Pooled
Development Funds Registration Board, the Industry Research
and Development Board and Innovation Australia. His previous
board positions include Director of Medibank Private. He was
appointed a Director of Clean TeQ on 1 June 2010.
Other current directorships
Former directorships (last 3 years)
Nil
Nil
Special responsibilities
Interests in shares
Interests in options
Mr Ian Knight
Qualifications
Experience and expertise
Mr Harley is a member of the Audit Committee and Chair of
the Nomination and Remuneration Committee and Market
Disclosure Committee.
1,754,220 fully paid ordinary shares
500,000 unlisted options exercisable at $0.1935 (19.35 cents)
per option
Independent Non-Executive Director
FCA, CPA
Mr Knight is a graduate in Business Studies and is also a
fellow of the Institute of Chartered Accountants, a member of
the Australian Society of Certified Practicing Accountants, an
Associate Fellow of the Australian Institute of Management and
a member of the Institute of Company Directors. His experience
includes presenting and working with boards of public, private
and private equity ownership, State and Federal Governments
and has extensive experience in strategising and implementing
mergers, acquisitions, divestments and capital raising initiatives.
Mr Knight was also formerly a Partner of KPMG where he held
the position of Head of Mergers and Acquisitions and Head
of Private Equity for KPMG Corporate Finance. Currently he is
Managing Director of nem Corporate Pty Ltd and a partner of
nem Australasia Pty Ltd. He was appointed a director of Clean
TeQ on 8 July 2013.
Other current directorships
Former directorships (last 3 years)
Nil
Nil
Special responsibilities
Interests in shares
Interests in options
Chair of the Audit Committee and member of the Nomination
and Remuneration Committee.
200,000 fully paid ordinary shares
Nil
Annual Report 2015 CleanTeQ | 19
Directors’ rePort
continued
‘Other current directorships’ quoted above are current directorships for listed entities only and excludes
directorships in all other types of entities, unless otherwise stated.
‘Former directorships’ quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships in all other types of entities, unless otherwise stated.
coMP any secretary
Ms Melanie Leydin was appointed to the position of Company Secretary on 7 July 2011. Ms Leydin is a
Chartered Accountant and principal of Leydin Freyer, a chartered accounting firm specializing in accounting and
company secretarial services. Ms Leydin has over 20 years’ experience in the accounting profession and is
company secretary for a number of junior mining, bioscience, biotechnology and IT entities listed on ASX.
Meetings of Directors
The number of meetings of the Company’s Board of Directors (‘the Board’) and of each Board committee held
during the year ended 30 June 2015, and the number of meetings attended by each director were:
Full Board
Audit Committee
Nomination and
Remuneration
Committee
Attended
Held
Attended
Held
Attended
Held
11
11
10
11
11
11
11
11
2
-
2
2
2
-
2
2
2
-
2
2
2
-
2
2
Sam Riggall
Peter Voigt
Roger Harley
Ian Knight
Held: represents the number of meetings held during the time the director held office or was a member of the
relevant committee.
No meetings of the Market Disclosure Committee were held during the year.
reMuneration rePort (auDiteD)
The remuneration report, which has been audited, outlines the director and executive remuneration
arrangements for the Consolidated Entity and the Company, in accordance with the requirements of the
Corporations Act 2001 and its Regulations. Remuneration is referred to as compensation throughout the
Remuneration Report.
The Remuneration Report is set out under the following main headings:
A. Principles used to determine the nature and amount of remuneration
B. Details of remuneration
C. Service agreements
D. Share-based compensation
E. Additional information
F. Additional disclosures relating to key management personnel
20 | CleanTeQ Annual Report 2015
Directors’ rePort
continued
a. Principles used to determine the
nature and amount of remuneration
(audited)
The Board of Directors is responsible for approving
the compensation arrangements for the Directors
and senior executives following recommendations
received from the Remuneration and Nomination
Committee. The Board, in conjunction with the
Remuneration and Nomination Committee, assesses
the appropriateness of the nature and amount of
emoluments of such officers on a periodic basis by
reference to relevant employment market conditions,
with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high quality
Board and executive team.
Key management personnel have authority and
responsibility for planning, directing and controlling the
activities of the Consolidated Entity. Key management
personnel as identified for the purposes of this report
by the criteria set out are as follows:
• Sam Riggall - Chairman and Chief Executive Officer
• Cory Williams - Chief Executive Officer
(resigned 18 November 2014)
• Peter Voigt - Executive Director
• Roger Harley - Independent Non-Executive Director
•
Ian Knight - Independent Non-Executive Director
• Tony Panther - Chief Financial Officer
(resigned 31 January 2015)
• Ben Stockdale - Chief Financial Officer
(appointed 15 January 2015)
There were no other employees in the Consolidated
Entity that met the definition of executive or key
management personnel in accordance with the
Corporations Act 2001 or Australian Accounting
Standards.
Compensation levels for key management personnel
and the Company Secretary are competitively set
to attract and retain appropriately qualified and
experienced directors and executives. As and
when required the Nomination and Remuneration
Committee has access to independent advice on the
appropriateness of compensation packages given
trends in comparative companies and the objectives of
the compensation strategy. Independent advice was
not sought during the 2015 or 2014 financial years.
The compensation structures explained below are
designed to attract and retain suitably qualified
candidates, reward the achievement of strategic
objectives, and create the broader outcome of
creating value for shareholders.
The compensation structures take into account:
•
•
the capability and experience of the key
management personnel;
the key management personnel’s ability to control
the relevant segments’ performance;
•
the Consolidated Entity’s performance including:
(i)
the Consolidated Entity’s earnings;
(ii) the growth in share price and delivering
constant returns on shareholder wealth; and
(iii) the amount of incentives within each key
management person’s compensation.
The directors’ and executives’ remuneration and
incentive policies and practices are performance
based and aligned to the Consolidated Entity’s vision,
values and overall business objectives. They are
designed to motivate key management personnel
to pursue the Consolidated Entity’s long term growth
and success. Compensation packages include a mix
of fixed and variable compensation and short and
long-term performance-based incentives.
In addition to their salaries, the Consolidated
Entity also provides non-cash benefits to its key
management personnel, and contributes to post-
employment superannuation plans on their behalf.
Fixed remuneration
Fixed compensation consists of base compensation
(which is calculated on a total cost basis and
includes any FBT charges related to employee
benefits including motor vehicles), as well as
leave entitlements and employer contributions to
superannuation funds.
Compensation levels are reviewed annually by the
Nomination and Remuneration Committee through a
process that considers individual, segment and overall
performance of the Consolidated Entity. An executive’s
compensation is also reviewed on promotion.
Performance-linked remuneration
Performance-linked compensation includes both
short-term and long-term incentives and is designed
to reward key management personnel for meeting
or exceeding their financial and personal objectives.
The short-term incentive (‘STI’) is an “at risk” bonus
provided in the form of cash and bonus shares, while
the long-term incentive (’LTI’) is provided as options
and performance rights over ordinary shares of the
Company under the rules of the Employee Share
Option Plan. The plans provide for Board discretion
on the provision of bonuses and options.
Annual Report 2015 CleanTeQ | 21
Directors’ rePort
continued
During the current year the Board exercised its
discretion and authorised the issue of options
to selected key management personnel but
did not award bonuses. Refer to section E of
this remuneration report for an analysis of the
Consolidated Entity’s recent performance and link
to overall remuneration.
Short-term incentive bonus
Each year the Nomination and Remuneration
Committee sets the key performance indicators
(’KPI’s’) for the key management personnel.
The KPI’s generally include measures relating to the
Consolidated Entity, the relevant segment and the
individual, and include financial, staff management,
safety, customer and strategy and risk measures.
The measures are chosen as they directly align the
individual’s reward to the KPI’s of the Consolidated
Entity and to its strategy and performance.
The financial performance objectives include
performance compared to budgeted amounts. The non-
financial objectives vary with position and responsibility
and include measures such as achieving strategic
outcomes, safety and environmental performance,
customer satisfaction and staff development.
At the end of the financial year, the Nomination
and Remuneration Committee assesses the actual
performance of the Consolidated Entity, the relevant
segment and individual against the KPI’s set at the
beginning of the financial year. A percentage of the
pre-determined maximum bonus amount is awarded
at the Board’s discretion and depending on results. No
bonus is awarded where performance falls below the
minimum. There were no bonuses or incentives paid
during the 2015 and 2014 financial years.
Long-term incentive
Options are issued under the Employee Share Option
Plan which provides for employees to receive, for
no consideration, options over ordinary shares at
specified exercise prices as determined by the Board.
The ability to exercise the options is conditional upon
each employee serving minimum service periods and
other applicable performance hurdles determined by
the Board from time to time.
The Employee Share Option Plan (’the Plan’) which
was adopted on 24 September 2007 states that the
total number of options on issue must not exceed 10%
of the total number of issued shares in the Company.
The Nomination and Remuneration Committee, in
conjunction with the Board, determines the number of
22 | CleanTeQ Annual Report 2015
options and the terms and conditions associated with
those options that are to be issued to employees each
year. The criteria used to assess the number of options
issued include Consolidated Entity performance,
individual performance and an industry analysis of
best practice. The method of assessment was chosen
as it provides the Nomination and Remuneration
Committee with an objective means of measuring
performance against expected performance.
The Company has adopted an Employee Tax Exempt
Share Plan (‘the Share Plan’) which allows eligible
employees of the Consolidated Entity the opportunity
to become shareholders of the Company without
having to pay any amount for the acquisition of the
shares. Each eligible employee is entitled to acquire
the equivalent of $1,000 of shares per annum at
zero cost. These shares are required to be held in
escrow for a three year period or until such time
as eligible employees terminate their employment
with the Consolidated Entity. Shares were issued to
eligible employees during the year ended 30 June
2015 pursuant to the Share Plan, although none were
issued to key management personnel.
Short-term and long-term incentive structure
The Nomination and Remuneration Committee
considers that the above performance-linked
compensation structure will generate the desired
outcome in respect of attracting and retaining high
calibre employees.
In the current year the Consolidated Entity has not
achieved its forecast earnings targets, with most
segments not meeting budgeted results. The level
of performance achieved during the current year has
resulted in the minimum short-term incentives not being
achieved, which has led to no short term incentives
being paid to the key management personnel.
Non-Executive Directors
The Company Constitution provides for Non-Executive
Directors to be paid or provided remuneration for
their services the total amount or value of which must
not exceed an aggregate maximum of $500,000 per
annum or such other maximum amount determined
from time to time by the Company in a general
meeting. The aggregate maximum sum will be
apportioned among them in such manner as the
Directors in their absolute discretion determine. Non-
Executive Directors fees are set based on advice from
external advisors with reference to fees paid to other
Non-Executive Directors of comparable companies.
Directors’ rePort
continued
Non-Executive Directors do not receive performance related remuneration. Directors’ fees cover all main Board
and Committee activities.
A Non-Executive Director is entitled to be paid travelling and other expenses properly incurred by them in attending
Directors’ or general meetings of the Company or otherwise in connection with the business of the Consolidated
Entity. No retirement benefits are to be paid to Non-Executive Directors. The Company determines the maximum
amount for remuneration, including thresholds for share-based remuneration, for Directors by resolution.
Other benefits
Key management personnel can receive non-cash benefits as part of their base compensation as part of the
terms and conditions of their appointment. Non-cash benefits typically include motor vehicles and toll road
payments. The Company pays fringe benefits tax on these benefits.
Voting and comments made at the Company’s 20 November 2014 Annual General Meeting (‘AGM’)
The Company received 92.4% of ‘for’ votes in relation to its remuneration report for the year ended 30 June
2014. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
b. Details of remuneration (audited)
Details of the nature and amount of each major element of remuneration of the key management personnel of
the Consolidated Entity are set out in the following tables.
2015
Short-term benefits
Post-
employment
benefits
Long-
term
benefits
Share-
based
payments
Cash
salary
and fees
Bonus
Non-
monetary
Super-
annuation
Long
service
leave
Equity-
settled
$
$
NON-EXECUTIVE
DIRECTORS
Roger Harley
Ian Knight
EXECUTIVE
DIRECTORS
Sam Riggall****
Peter Voigt
OTHER KEy
MANAGEMENT
PERSONNEL
Cory Williams*
Tony Panther**
45,872
50,000
137,300
200,001
371,476
125,867
Ben Stockdale***
104,167
1,034,683
-
-
-
-
-
-
-
-
Total
$
50,230
50,000
$
-
-
$
-
-
$
4,358
-
7,065
15,000
13,044
19,000
$
-
-
-
544,072
701,481
3,342
-
237,343
-
10,650
23,415
10,018
-
-
-
-
394,891
146,535
-
9,896
1,694
134,899
250,656
32,715
79,731
5,036
678,971
1,831,136
* Cory Williams resigned as Chief Executive Officer on 18 November 2014. His cash salary and fees includes a termination payment of $250,000.
** Tony Panther resigned as Chief Financial Officer on 31 January 2015. His cash salary and fees includes a termination payment of $14,583.
*** Ben Stockdale was appointed as Chief Financial Officer on 15 January 2015.
**** Sam Riggall was appointed to the position of Interim CEO on 18 November 2014.
Annual Report 2015 CleanTeQ | 23
Directors’ rePort
continued
2014
Short-term benefits
Post-
employment
benefits
Long-
term
benefits
Share-
based
payments
Cash
salary
and fees
Bonus
Non-
monetary
Super-
annuation
Long
service
leave
Equity-
settled
Total
$
$
$
$
NON-EXECUTIVE
DIRECTORS
Sam Riggall
127,300
Roger Harley
Ian Knight*
EXECUTIVE
DIRECTORS
45,872
50,000
Peter Voigt****
187,000
Greg Toll**
81,333
OTHER KEy
MANAGEMENT
PERSONNEL
Cory Williams***
229,552
Tony Panther
165,657
Melanie Leydin
96,000
982,714
-
-
-
-
-
-
-
-
-
$
-
-
-
10,000
-
-
12,700
4,243
-
13,000
8,250
18,500
3,666
8,286
-
$
$
-
-
-
-
-
150,000
50,115
50,000
222,166
97,869
-
9,343
-
21,234
16,188
-
4,570
3,185
-
156,952
412,308
-
-
194,373
96,000
40,593
81,151
11,421
156,952
1,272,831
* Ian Knight was appointed as director 17 July 2013.
** Greg Toll retired as a Director on 21 November 2013. His cash salary and fees includes a contractual termination payment of $50,000.
*** Cory Williams was appointed as Chief Executive Officer on 29 November 2013. From 1 July 2013 to 29 November 2013 he held the
position of Chief Operating Officer. Share based payments are options granted under the employee share scheme and represented
38% of his total remuneration. See section D.
**** Peter Voigt was the Chief Executive Officer from 1 July 2013 to 29 November 2013.
c. service agreements (audited)
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. Details of these agreements are as follows:
Peter Voigt
Agreement commenced
Term of agreement
Details
24 | CleanTeQ Annual Report 2015
Executive Director
1 March 2015
No fixed term
Remuneration is set at a base salary of $200,000 per annum plus
superannuation of $19,000 based on duties as executive director.
The Company may terminate the agreement upon three months’
notice or payment in lieu of notice. Mr Voigt can terminate
the agreement upon three months’ notice. The Company may
terminate the agreement immediately where the executive
commits any act of serious misconduct, persistent breach or
non-observance of a term of this agreement.
Directors’ rePort
continued
Ben Stockdale
Agreement commenced
Term of agreement
Details
Chief Financial Officer
15 January 2015
No fixed term
Remuneration set at base salary of $250,000 per annum plus
superannuation based on duties as Chief Financial Officer.
The Company may terminate the agreement upon six months’
notice or payment in lieu of notice. Mr Stockdale can terminate
the agreement upon three months’ notice. The Company may
terminate the agreement immediately where the executive
commits any act of serious misconduct, persistent breach or
non-observance of a term of this agreement.
The service contracts outline the components of compensation paid to the key management personnel.
The service contracts of the key management personnel prescribe how compensation levels are modified year
to year. Compensation levels are reviewed each year to take into account cost-of-living changes, any change in
the scope of the role performed by the senior executive and any changes required to meet the principles of the
compensation policy.
D. share-based compensation (audited)
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during
the year ended 30 June 2015.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and
other key management personnel in this financial year or future reporting years are as follows:
Grantee/
Number of options/
Grant date
Sam Riggall
4,000,000 options
25 February 2015
Sam Riggall
4,000,000 options
25 February 2015
Ben Stockdale
2,000,000 options
1 March 2015
Vesting date and
exercisable date
1 July 2015
25 February 2015
Expiry date
Exercise price
Fair value
per option at
grant date
25 February
2018
25 February
2018
$0.1619
$0.068
$0.1619
$0.068
1 March 2015
1 March 2018
$0.1495
$0.067
Options granted carry no dividend or voting rights.
Annual Report 2015 CleanTeQ | 25
Directors’ rePort
continued
The number of options over ordinary shares granted to directors and other key management personnel as part of
compensation during the year ended 30 June 2015 are set out below:
Name
Cory Williams
Sam Riggall
Ben Stockdale
Number of options granted
during the year
Number of options vested
during the year
2015
2014
-
4,000,000
8,000,000
2,000,000
-
-
2015
-
4,000,000
2,000,000
2014
-
-
-
Values of options over ordinary shares granted, exercised and lapsed for directors and other key management
personnel as part of compensation during the year ended 30 June 2015 are set out below:
Name
Cory Williams
Sam Riggall
Ben Stockdale
Value
of options
granted during
the year
$
Value
of options
exercised
during the year
$
Value
of options
lapsed during
the year
$
Remuneration
consisting
of options for
the year
%
-
544,072
134,899
-
-
-
156,952
-
-
-%
63%
54%
* Options vested in prior years and expired in the current year are disclosed in note 46 to the financial statements.
Equity Instruments
During the course of the 2008 financial year the Company introduced a share option plan for employees and
Directors of Clean TeQ (“the Plan”). All options refer to options over ordinary shares of Clean TeQ Holdings Limited,
which are exercisable on a one-for-one basis under the Plan. The broad details of the Plan are set out below:
(a) Under the Plan, eligible persons will be offered, and if accepted, granted, options entitling the holder
to subscribe for Shares. The options may be subject to vesting and exercise restrictions which will be
determined by the Board at the time of issue. If a person no longer qualifies for the Plan, they will have three
months to exercise any options which are capable of being exercised (except in limited circumstances).
(b) It is intended that the exercise price will generally be at or in excess of the prevailing volume weighted
average sale price of Shares traded on ASX in the period immediately prior to the date of offer of the options.
(c) The Board has at its discretion the ability to waive any conditions under certain limited circumstances and/or
to allow options to be exercised and Shares acquired or transferred for monetary consideration equivalent to
their value. The options are not otherwise transferable once granted.
(d) The determination of eligibility to participate is at the absolute discretion of the Board. The Board may also
determine at its absolute discretion the applicable performance criteria to be achieved and the time period in
which those criteria must be satisfied. While not limiting the Board’s discretion, the performance criteria are
generally focused on the key financial and other performance measures set by the Company.
e. additional information (audited)
In considering the Consolidated Entity’s performance and benefits for shareholder wealth, the current Nomination
and Remuneration Committee have regard to the following profit or loss after tax in the current and previous four
financial years, along with the share price and movement in the share price.
26 | CleanTeQ Annual Report 2015
Directors’ rePort
continued
The earnings of the Consolidated Entity for the five years to 30 June 2015 are summarised below:
Profit/(loss) after income tax
(5,274)
(1,248)
(4,631)
(4,910)
(8,225)
2011
$’000
2012
$’000
2013
$’000
2014
$’000
2015
$’000
The factors that are considered to affect total shareholders return (‘TSR’) are summarised below:
Share price at financial year end ($)
Movement in share price ($)
2011
0.04
(0.24)
2012
0.13
0.09
2013
0.10
(0.03)
2014
0.05
(0.05)
2015
0.23
0.18
Net profit after income tax is considered as one of the financial performance targets in setting the short-term
incentives. Dividends and changes in share price are included in the total shareholder return calculation, which is
one of the performance criteria assessed for the long-term incentives. The other performance criteria assessed
for the long term incentives is growth in earnings per share, which again takes into account the Consolidated
Entity’s net profit after income tax.
f. key management personnel transactions (audited)
Movement in shares held
The number of shares in the Company held during the financial year by each director and other members of key
management personnel of the Consolidated Entity, including their personally related parties, is set out below:
Ordinary shares
Peter Voigt
Roger Harley
Ian Knight
Sam Riggall
Ben Stockdale*
Balance at the
start of the
year
Received
as part of
remuneration
Additions
Disposals/
other
25,948,016
1,754,220
200,000
-
-
27,902,236
-
-
-
-
-
-
1,666,667
-
-
6,253,304
50,000
7,969,971
-
-
-
-
-
-
Balance at
end of the
year
27,614,683
1,754,220
200,000
6,253,304
50,000
35,872,207
* Ben Stockdale was appointed as Chief Financial Officer during the year.
Movement in options held
The number of options over ordinary shares in the Company held during the financial year by each director and
other members of key management personnel of the Consolidated Entity, including their personally related
parties, is set out below:
Options over
ordinary shares
Peter Voigt
Sam Riggall
Cory Williams*
Ben Stockdale
Balance at
the start of
the year
Granted as
part of
remuneration
1,000,000
-
-
8,000,000
4,000,000
-
-
2,000,000
5,000,000
10,000,000
Exercised
-
-
-
-
-
Expired/
forfeited/
other
-
-
Balance at
the end of
the year
1,000,000
8,000,000
(4,000,000)
-
-
2,000,000
(4,000,000)
11,000,000
* Cory Williams resigned as Chief Executive Officer during the year. His options have lapsed in accordance with the Employee Option Plan rules.
Annual Report 2015 CleanTeQ | 27
Directors’ rePort
continued
Other transactions with key management personnel
Details of other transactions with key management personnel are set out in notes 34 and 38.
This concludes the remuneration report, which has been audited.
shares unDer oPtion
Unissued ordinary shares of Clean TeQ Holdings Limited under option at the date of this report are as follows:
Grant date
1 July 2010
30 June 2011
Expiry Date
1 July 2015
30 June 2016
15 November 2012
30 November 2015
19 December 2014
19 December 2014
25 February 2015
1 March 2015
19 June 2017
19 June 2017
25 February 2018
1 March 2018
Exercise price
Number under option
$0.34
$0.40
$0.19
$0.12
$0.15
$0.16
$0.15
10,000
500,000
1,500,000
2,000,000
2,000,000
8,000,000
6,000,000
20,010,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share
issue of the Company or of any other body corporate.
For details of options issued to directors and executives as remuneration refer to the remuneration report.
shares issueD on the exercise of oPtions
There were no ordinary shares of Clean TeQ Holdings Limited issued on the exercise of options during the year
ended 30 June 2015 and up to the date of this report.
inDeMnity anD insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity
as a director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and
executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The invoice
from the Company’s insurers did not specify the amount of the premium paid for insurance against an officer’s
liability for legal costs.
inDeMnity anD insurance of auDitor
The Company has not, during or since the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related Entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of
the Company or any related Entity.
28 | CleanTeQ Annual Report 2015
Directors’ rePort
continued
ProceeDings on behalf
of the coMP any
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene
in any proceedings to which the Company is a party
for the purpose of taking responsibility on behalf of
the Company for all or part of those proceedings.
rounDing of aMounts
The Company is of a kind referred to in Class Order
98/100, issued by the Australian Securities and
Investments Commission, relating to ‘rounding-
off’. Amounts in this report have been rounded off
in accordance with that Class Order to the nearest
thousand dollars, or in certain cases, the nearest dollar.
leaD auDitor’s inDePenDence
Declaration
A copy of the lead auditor’s independence declaration
as required under section 307C of the Corporations
Act 2001 is set out on page 30 and forms part of
the directors’ report for the financial year ended
30 June 2015.
auDitor
KPMG continues in office in accordance with section
327 of the Corporations Act 2001.
This report is made in accordance with a resolution
of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
Sam Riggall
Chairman & Chief Executive Officer
25 August 2015
Melbourne
non-auDit services
Details of the amounts paid or payable to the auditor
for non-audit services provided during the financial
year by the auditor are outlined in note 35 to the
financial statements.
The directors are satisfied that the provision of
non-audit services during the financial year, by the
auditor (or by another person or firm on the auditor’s
behalf), is compatible with the general standard
of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services as
disclosed in note 35 to the financial statements do
not compromise the external auditor’s independence
requirements of the Corporations Act 2001 for the
following reasons:
•
•
all non-audit services have been reviewed and
approved to ensure that they do not impact the
integrity and objectivity of the auditor; and
none of the services undermine the general
principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional
Accountants issued by the Accounting Professional
and Ethical Standards Board, including reviewing
or auditing the auditor’s own work, acting in a
management or decision-making capacity for the
Company, acting as advocate for the Company or
jointly sharing economic risks and rewards.
officers of the coMP any
who are forMer auDit
Partners of kPMg
Ian Knight, appointed as a Non-Executive Director on
17 July 2013, was previously a Partner of KPMG and
Head of Private Equity for KPMG Corporate Finance,
until June 2012.
Annual Report 2015 CleanTeQ | 29
AuDitor’s inDepenDence DeclArA tion
30 | CleanTeQ Annual Report 2015
stAteMent oF proFit or loss AnD
other coMprehensive incoMe
For the yeAr enDeD 30 June 2015
REVENUE
Share of losses of joint ventures accounted for using the equity method
Other Income
EXPENSES
Inventory write downs
Changes in finished goods
Raw materials and other direct costs
Employee benefits expenses
Impairment of licence intangible asset
Depreciation and amortisation expenses
Legal and professional expenses
Occupancy expenses
Marketing expenses
Other expenses
Finance costs
Note
Consolidated
5
6
7
13
8
8
18
8
2015
$’000
790
-
-
(85)
-
(561)
(2,609)
(2,751)
(1,199)
(623)
(278)
(396)
(728)
(715)
2014
$’000
1,354
(291)
407
(361)
-
(517)
(3,422)
-
(705)
(610)
(303)
(402)
(880)
(463)
Loss before income tax benefit from continuing operations
(9,155)
(6,193)
Income tax benefit
Loss after income tax benefit from continuing operations
Profit after income tax expense from discontinued operations
Loss after income tax benefit/(expense) for the year
attributable to the owners of Clean TeQ Holdings Limited
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable
to the owners of Clean TeQ Holdings Limited
Total comprehensive income for the year is attributable to:
Continuing operations
Discontinued operations:
Non-controlling interests
Owners of the company
9
10
-
(9,155)
930
-
(6,193)
1,283
(8,225)
(4,910)
-
-
-
-
(8,225)
(4,910)
(9,155)
(6,193)
159
771
-
1,283
(8,225)
(4,910)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
Annual Report 2015 CleanTeQ | 31
stateMent of Profit or loss anD
other coMPrehensive incoMe
For the yeAr enDeD 30 June 2015
continued
Earnings per share for loss from continuing operations
attributable to the owners of CleanTeQ Holdings Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for profit from discontinued operations
attributable to the owners of CleanTeQ Holdings Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for loss attributable to the owners
of CleanTeQ Holdings Limited
Basic earnings per share
Diluted earnings per share
Note
Consolidated
2015
Cents
2014
Cents
45
45
45
45
45
45
(3.20)
(3.20)
(3.72)
(3.72)
0.33
0.33
0.77
0.77
(2.87)
(2.87)
(2.95)
(2.95)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
32 | CleanTeQ Annual Report 2015
stAteMent oF FinAnciAl position
As At 30 June 2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivable
Other financial assets
Total current assets
NON-CURRENT ASSETS
Other financial assets
Property, plant and equipment
Intangibles
Exploration and evaluation assets
Total non-current assets
Total assets
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
Employee benefits
Deferred revenue
Total current liabilities
NON-CURRENT LIABILITIES
Deferred revenue
Borrowings
Notes payable
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
EQUITy
Issued capital
Reserves
Accumulated losses
Total equity
Note
Consolidated
2015
$’000
2014
$’000
11
12
13
14
15
16
17
18
19
20
21
22
23
23
24
25
27
28
29
30
3,313
2,540
523
96
963
25
788
939
463
27
4,920
4,757
328
2,589
280
851
11,900
13,511
246
15,063
19,983
-
14,642
19,399
1,778
2,886
-
276
46
22
339
339
2,100
3,586
590
-
2,490
33
3,113
5,213
637
4,080
-
16
4,733
8,319
14,770
11,080
27,717
1,063
(14,010)
14,770
17,787
198
(6,905)
11,080
The above statement of financial position should be read in conjunction with the accompanying notes.
Annual Report 2015 CleanTeQ | 33
stAteMent oF chAnges in equity
For the yeAr enDeD 30 June 2015
Contributed
Equity
Accumulated
Losses
Reserves
Non
Control
Interests
Total
Equity
$’000
$’000
$’000
$’000
$’000
CONSOLIDATED
Balance at 1 July 2013
Loss after income tax benefit for the year
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
Equity contributions, net of transaction
costs (note 28)
Share-based payments (note 46)
Lapse of options
Total continuing transactions with
owners of the Company
Balance at 30 June 2014
CONSOLIDATED
Balance at 1 July 2014
Loss after income tax benefit for the year
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
Equity contributions, net of transaction
costs (note 28)
Share-based payments (note 46)
Lapse of options
13,149
-
-
4,622
16
-
4,638
17,787
17,787
-
-
9,930
-
-
Total contribution and distribution
9,930
Change in Ownership Interests:
Change in controlling interest without
a change in control (note 29)
Disposal of controlling interest in
subsidiary (note 10)
Disposal of subsidiary with NCI
Total Changes in Ownership Interests
Total Transactions with Owners
of the Company
Balance at 30 June 2015
All amounts are stated net of tax.
-
-
-
-
(2,045)
(4,910)
(4,910)
-
-
50
50
(6,905)
(6,905)
(8,384)
(8,384)
-
-
-
-
-
91
-
-
-
157
(50)
107
198
198
-
-
-
1,023
(158)
865
1,120
1,120
(1,120)
-
-
-
-
-
-
-
-
-
159
159
-
-
-
-
-
-
159
1,279
-
-
(159)
(159)
11,195
(4,910)
(4,910)
4,622
173
-
4,795
11,080
11,080
(8,225)
(8,225)
9,930
1,023
(158)
10,795
1,120
-
-
1,120
9,930
27,717
1,279
865
(159)
11,915
(14,010)
1,063
-
14,770
The above statement of changes in equity should be read in conjunction with the accompanying notes.
34 | CleanTeQ Annual Report 2015
stAteMent oF cAsh Flows
For the yeAr enDeD 30 June 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Cash used in operating activities
Interest received
Interest and other finance costs paid
Research and development tax incentive received
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Payments for exploration assets
Development expenditure
Proceeds from sale of business, net of cash disposed
Proceeds from sale of property, plant and equipment
Cash acquired from acquisition of subsidiaries
Net cash from/(used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares, net of issuance costs
Proceeds from issue of convertible notes
Payment of hire purchases
Cash on deposit for security over bank guarantees
Repayment of borrowings
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
11
Note
Consolidated
2015
$’000
2014
$’000
44
17
19
18
10
40
7,229
9,849
(10,214)
(13,151)
(2,985)
(3,302)
66
(365)
-
51
(443)
503
(3,284)
(3,191)
(55)
(246)
(59)
-
(1,178)
(1,028)
1,922
-
-
-
10
9
443
(1,068)
3,793
-
(30)
-
(149)
3,614
773
2,540
3,313
4,622
2,231
(19)
(17)
(1,099)
5,718
1,459
1,081
2,540
The above statement of cash flows should be read in conjunction with the accompanying notes
Annual Report 2015 CleanTeQ | 35
notes to the FinAnciAl st AteMents
For the yeAr enDeD 30 June 2015
note 1. general inforMation
The financial statements cover the Clean TeQ
Holdings Limited group as a Consolidated Entity
(‘Consolidated Entity’) consisting of Clean TeQ
Holdings Limited (‘Company”) and its subsidiaries.
The financial statements are presented in Australian
dollars, which is Clean TeQ Holdings Limited’s
functional and presentation currency.
Clean TeQ Holdings Limited is a for-profit listed
public company limited by shares, incorporated
and domiciled in Australia. Its registered office and
principal place of business is:
Ferntree Business Park
2 Acacia Place
Notting Hill
Victoria Australia 3168
A description of the nature of the Consolidated
Entity’s operations and its principal activities are
included in the directors’ report, which is not part
of the financial statements.
The financial statements were authorised for issue,
in accordance with a resolution of directors, on 25
August 2015. The directors have the power to amend
and reissue the financial statements.
note 2. significant
accounting Policies
The principal accounting policies adopted in the
preparation of the financial statements are set out
below. These policies have been consistently applied
to all the years presented, unless otherwise stated.
(a) Change in accounting policies
Certain comparative amounts in the statement of
profit or loss and other comprehensive income
have been reclassified during the year as a result of
discontinued operations during the year (see Note 10).
(b) Going concern
The Consolidated Entity reported a net loss after
tax from continuing operations for the financial half
year of $9,155,000 (2014: $6,193,000 loss). We note
there were no significant revenues from continuing
operations during the year. Operational revenues
were more than offset by business development
and corporate overhead costs. Working capital,
being current assets less current liabilities, amounts
to a $2,820,000 surplus (30 June 2014: $1,171,000
36 | CleanTeQ Annual Report 2015
surplus), with cash reserves increasing from
$2,540,000 to $3,313,000 during the period. Net cash
outflows from operating activities were $3,284,000
for the financial year (2014: net cash outflow of
$3,191,000).
During the financial year the following events have
taken place to support the going concern basis of
preparation for the Consolidated Entity:
• The Consolidated Entity has increased its cash on
hand as at 30 June 2015 to $3,313,000;
• During the financial year, the Consolidated
•
Entity raised $9,930,000 in equity capital after
issue costs, inclusive of non-cash share issues,
indicating strong support from investors to invest
in the Consolidated Entity and its technologies;
In early July 2015 the Consolidated Entity
received a further $455,000 cash rebate from
the Australian Tax Office for eligible research and
development expenditure in the 2014 financial
year. The Company anticipates that a significant
proportion of the forecast 2015 and 2016 financial
years’ development expenditure, including a large
proportion of Syerston testwork and feasibility
studies, will also be eligible for the refundable tax
offset;
• On 27 July 2015 the Consolidated Entity launched
a non-renounceable one for ten entitlement offer
at a price of $0.18 (18 cents) per share to raise
$6,638,000 before costs of the Entitlement Offer.
The Entitlement Offer is fully underwritten by BW
Equities Pty Ltd; and
• The forecast cash flows for the Consolidated
Entity indicate a net positive cash position for at
least the period of 12 months to 31 August 2016.
The Consolidated Entity expects that the relationship
with its major investors will assist in widening the
Consolidated Entity’s opportunities for profitable
commercialisation of its technologies in addition to
assisting in securing further funding required.
As set out in the financial statements, during the
financial year the Consolidated Entity made strong
progress in respect of the commercialisation of its
water and scandium recovery technologies including:
• The delivery of a scandium recovery pilot plant
to Ishihara Sangyo Kaisha Ltd’s facility in Japan
for completion of a scandium recovery pilot trial.
The piloting work confirmed the Consolidated
Entity’s ion-exchange extraction processes’ ability
to recover low concentrations of scandium from
intermediate process streams.
•
The signing of a heads of agreement with the
Shanghai Investigation, Design and Research
Institute Co. Ltd for the deployment of the
Consolidated Entity’s unique proprietary water
treatment technologies in China;
• The acquisition of the Syerston Project and
completion of a scoping study for the project
which confirmed strong economics for the
proposed project development; and
• The Consolidated Entity continues to negotiate
with prospective customers and business
partners with a view to securing profitable
transactions based on the Consolidated Entity’s
technologies, which along with a continued strong
focus on cost control, is expected to improve the
Consolidated Entity’s financial performance in
future periods.
The directors are confident that the Consolidated
Entity can continue to access debt and equity funding
to meet short term working capital requirements, and
has a history of securing such funding as required in
the past to support their confidence.
On the basis that sufficient funding is expected to be
raised to meet the Consolidated Entity’s expenditure
forecasts, the directors consider that the Consolidated
Entity remains a going concern and these financial
statements have been prepared on this basis.
While the directors are confident in the Consolidated
Entity’s ability to continue as a going concern, in the
event the cashflow forecasts are adversely impacted
and the agreements and commercial opportunities
described above do not eventuate as planned, including
continued access to equity funding which at the date of
this report is uncertain, there is a material uncertainty
as to whether the Consolidated Entity will be able
to generate sufficient net operating cash inflows or
execute alternative funding arrangements to enable it
to continue as a going concern, beyond the 12 months
from the date the directors sign the annual report.
Consequently, material uncertainty exists as to whether
the Consolidated Entity will continue as a going concern
and it may therefore be required to realise assets at
amounts different to their carrying amounts in the
statement of financial position, extinguish liabilities at
amounts different to those recorded in the statement
of financial position and settle liabilities other than in
the ordinary course of business.
(c) Basis of preparation
These general purpose financial statements have been
prepared in accordance with Australian Accounting
Standards (“AASBs”) and Interpretations issued by
the Australian Accounting Standards Board (‘AASB’)
and the Corporations Act 2001, as appropriate for
for-profit oriented entities. These financial statements
also comply with International Financial Reporting
Standards (“IFRSs”) as issued by the International
Accounting Standards Board (‘IASB’).
Historical cost convention
The financial statements have been prepared under
the historical cost convention unless otherwise
described in the accounting policies.
Critical accounting estimates
The preparation of the financial statements requires
the use of certain critical accounting estimates. It
also requires management to exercise its judgement
in the process of applying the Consolidated Entity’s
accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where
assumptions and estimates are significant to the
financial statements are disclosed in note 3.
(d) Parent Entity information
In accordance with the Corporations Act 2001,
these financial statements present the results of the
Consolidated Entity only. Supplementary information
about the Parent Entity is disclosed in note 39.
(e) Principles of consolidation
The Consolidated financial statements incorporate the
assets and liabilities of all subsidiaries of Clean TeQ
Holdings Limited as at 30 June 2015 and the results
of all subsidiaries for the year then ended. Clean
TeQ Holdings Limited and its subsidiaries together
are referred to in these financial statements as the
‘Consolidated Entity’.
Subsidiaries are all those entities over which the
Consolidated Entity has control. The Consolidated
Entity controls an Entity when the Consolidated
Entity is exposed to, or has rights to, variable returns
from its involvement with the Entity and has the
ability to affect those returns through its power to
direct the activities of the Entity. Subsidiaries are
fully Consolidated from the date on which control is
transferred to the Consolidated Entity. They are
de-Consolidated from the date that control ceases.
Annual Report 2015 CleanTeQ | 37
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 2. significant
accounting Policies continued
Business combinations
The acquisition method of accounting is used to account
for business combinations regardless of whether equity
instruments or other assets are acquired.
The consideration transferred is the sum of the
acquisition-date fair values of the assets transferred,
equity instruments issued or liabilities incurred by the
acquirer to former owners of the acquiree and the
amount of any non-controlling interest in the acquiree.
For each business combination, the non-controlling
interest in the acquiree is measured at either fair
value or at the proportionate share of the acquiree’s
identifiable net assets. Transaction costs are expensed
as incurred, except if related to the issue of debt or
equity securities.
On the acquisition of a business, the Consolidated
Entity assesses the financial assets acquired and
liabilities assumed for appropriate classification and
designation in accordance with the contractual terms,
economic conditions, the Consolidated Entity’s
operating or accounting policies and other pertinent
conditions in existence at the acquisition-date.
Where the business combination is achieved in
stages, the Consolidated Entity remeasures its
previously held equity interest in the acquiree at the
acquisition-date fair value and the difference between
the fair value and the previous carrying amount is
recognised in profit or loss.
Contingent consideration to be transferred by the
acquirer is recognised at the acquisition-date fair value.
Subsequent changes in the fair value of contingent
consideration classified as an asset or liability is
recognised in profit or loss. Contingent consideration
classified as equity is not remeasured and its
subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value
of assets acquired, liabilities assumed and any non-
controlling interest in the acquiree and the fair value of
the consideration transferred and the fair value of any
pre-existing investment in the acquiree is recognised
as goodwill. If the consideration transferred and the
pre-existing fair value is less than the fair value of
the identifiable net assets acquired, being a bargain
purchase to the acquirer, the difference is recognised
as a gain directly in profit or loss by the acquirer on
the acquisition-date, but only after a reassessment of
the identification and measurement of the net assets
acquired, the non-controlling interest in the acquiree,
if any, the consideration transferred and the acquirer’s
previously held equity interest in the acquirer.
Business combinations are initially accounted for
on a provisional basis. The acquirer retrospectively
adjusts the provisional amounts recognised and also
recognises additional assets or liabilities during the
measurement period, based on new information
obtained about the facts and circumstances that
existed at the acquisition date.
The measurement period ends on either the earlier
of (i) 12 months from the date of the acquisition or
(ii) when the acquirer receives all the information
possible to determine fair value.
Transactions eliminated on consolidation
Intercompany transactions, balances and unrealised
gains on transactions between entities in the
Consolidated Entity are eliminated. Unrealised gains
arising from transactions with equity-accounted
investees are eliminated against the investment to
the extent of the Consolidated Entity’s interest in the
investee. Unrealised losses are also eliminated unless
the transaction provides evidence of the impairment
of the asset transferred. Accounting policies of
subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the
Consolidated Entity.
The acquisition of subsidiaries is accounted for using
the acquisition method of accounting. A change in
ownership interest, without the loss of control, is
accounted for as an equity transaction, where the
difference between the consideration transferred and
the book value of the share of the non-controlling
interest acquired is recognised directly in equity
attributable to the Parent.
Loss of control
Where the Consolidated Entity loses control over
a subsidiary, it derecognises the assets including
goodwill, liabilities and non-controlling interest in the
subsidiary together with any cumulative translation
differences recognised in equity. The Consolidated
Entity recognises the fair value of the consideration
received and the fair value of any investment retained
together with any gain or loss in profit or loss.
38 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
Associates
(f) Operating segments
Operating segments are presented using the
‘management approach’, where the information
presented is on the same basis as the internal reports
provided to the Chief Operating Decision Makers
(‘CODM’). The CODM is responsible for the allocation
of resources to operating segments and assessing
their performance.
(g) Revenue recognition
Revenue is recognised when it is probable that the
economic benefit will flow to the Consolidated Entity
and the revenue can be reliably measured. Revenue
is measured at the fair value of the consideration
received or receivable.
Sale of goods and services
Revenue from the sale of goods is measured at the
fair value of the consideration received or receivable,
net of returns, trade discounts and volume rebates.
Revenue is recognised when the significant risks and
rewards of ownership have been transferred to the
buyer, recovery of the consideration is probable, the
associated costs and possible return of goods can be
estimated reliably, there is no continuing management
involvement with the goods and the amount of
revenue can be measured reliably. If it is probable
that discounts will be granted and the amount can be
reliably measured, then the discount is recognised as
a reduction of revenue as the sales are recognised.
Transfers of risks and rewards vary depending on
the individual terms of the contract of sale. For sales
of units developed and built, transfer usually occurs
when the product is received at the customer’s site
and or is commissioned ready for use.
Rendering of services
Revenue from contracted services rendered is
recognised in profit or loss in proportion to the stage
of completion of the transaction at the reporting date.
The stage of completion is assessed by reference to
the completion of key milestones in the contracts.
Associates are entities over which the Consolidated
Entity has significant influence but not control or joint
control. Investments in associates are accounted
for using the equity method. Under the equity
method, the share of the profits or losses of the
associate is recognised in profit or loss and the share
of the movements in equity is recognised in other
comprehensive income. Investments in associates
are carried in the statement of financial position at
cost plus post-acquisition changes in the Consolidated
Entity’s share of net assets of the associate. Goodwill
relating to the associate is included in the carrying
amount of the investment and is neither amortised
nor individually tested for impairment. Dividends
received or receivable from associates reduce the
carrying amount of the investment.
The Consolidated financial statements include the
Consolidated Entity’s share of profit or loss and other
comprehensive income of equity accounted interests,
after adjustments to align the accounting policies with
those of the Consolidated Entity, from the date that
significant influence or joint control commences until
the date that significant influence or joint control ceases.
When the Consolidated Entity’s share of losses
exceeds its interest in an equity accounted investee,
the carrying amount of that interest, including
any long-term interests that form part thereof, is
reduced to zero, and the recognition of further
losses is discontinued except to the extent that the
Consolidated Entity has an obligation or has made
payments on behalf of the investee.
Joint ventures
A joint venture is a joint arrangement whereby the
parties that have joint control of the arrangement
have rights to the net assets of the arrangement.
Investments in joint ventures are accounted for
using the equity method. Under the equity method,
the share of the profits or losses of the joint venture
is recognised in profit or loss and the share of
the movements in equity is recognised in other
comprehensive income. Investments in joint ventures
are carried in the statement of financial position at
cost plus post-acquisition changes in the Consolidated
Entity’s share of net assets of the joint venture.
Goodwill relating to the joint venture is included in
the carrying amount of the investment and is neither
amortised nor individually tested for impairment.
Income earned from joint venture entities reduces the
carrying amount of the investment.
Annual Report 2015 CleanTeQ | 39
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
(h) Income tax
Tax expense comprises current and deferred tax.
Current tax and deferred tax is recognised in the profit
or loss except to the extent that it relates to business
combinations, or items recognised directly in equity or
in other comprehensive income.
Current tax is the expected tax payable or receivable
on the taxable income or loss for the year, using tax
rates enacted or substantively enacted at the reporting
date, and any adjustment to tax payable in respect of
previous years.
Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
amounts used for taxation purposes. Deferred tax is
not recognised for:
•
•
temporary differences on the initial recognition
of assets or liabilities in a transaction that is not
a business combination and that affects neither
accounting nor taxable profit or loss;
temporary differences related to investments in
subsidiaries, associates and joint arrangements to
the extent that the Consolidated Entity is able to
control the timing of the reversal of the temporary
differences and it is probable that they will not
reverse in the foreseeable future; and
•
taxable temporary differences arising on the initial
recognition of goodwill.
Deferred tax assets are recognised for deductible
temporary differences and unused tax losses only
if it is probable that future taxable amounts will
be available to utilise those temporary differences
and losses. The Consolidated Entity makes this
assessment at each reporting date. Deferred tax is
measured at the tax rates that are expected to be
applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at
the reporting date.
The carrying amount of recognised and unrecognised
deferred tax assets are reviewed each reporting date.
Deferred tax assets recognised are reduced to the
extent that it is no longer probable that future taxable
profits will be available for the carrying amount to
be recovered. Previously unrecognised deferred tax
assets are recognised to the extent that it is probable
that there are future taxable profits available to
recover the asset.
note 2. significant
accounting Policies continued
Contract revenue includes the initial amount agreed
in the contract plus any variations in contract work,
claims and incentive payments to the extent that
it is probable that they will result in revenue and
can be measured reliably. When the outcome of a
construction contract cannot be estimated reliably,
contract revenue is recognised only to the extent
of contract costs incurred that are likely to be
recoverable. Contract expenses are recognised as
they are incurred unless they create an asset related
to future contract activity. An expected loss on a
contract is recognised immediately in profit or loss.
Technology licensing income
Technology licensing income is recognised based
on the substance of the contractual arrangements
entered into. Upfront non-refundable fees for the
right to utilise the technology, where the economic
Entity has no ongoing contractual and performance
obligations, are recognised fully in profit or loss at
the time the contractual commitment is entered into.
Technology licensing fees where the licensee has the
right to use the technology over a specified period of
time or on a refundable basis is recognised in profit or
loss on a straight line basis over the agreed term of
the Licence.
Sales of non-current assets
Gains or losses on sale of non-current assets are
included as income or expenses at the date control
of the asset passes to the buyer, usually when an
unconditional contract of sale is signed.
Gains or losses on disposal are calculated as the
difference between the carrying amount of the asset at
the time of disposal and the net proceeds on disposal.
Government grants
Government grants are recognised initially as deferred
income at fair value and when there is reasonable
assurance that they will be received and that the
Consolidated Entity will comply with the conditions
associated with the grant, they are then recognised
in profit or loss as other income on a systematic
basis over the useful life of the asset. Grants that
compensate the Consolidated Entity for expenses
incurred are recognised in profit or loss as other
income on a systematic basis in the same periods in
which the expenses are recognised.
40 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
Deferred tax assets and liabilities are offset only
where there is a legally enforceable right to offset
current tax assets against current tax liabilities and
deferred tax assets against deferred tax liabilities; and
they relate to the same taxable authority on either the
same taxable Entity or different taxable entities which
intend to settle simultaneously.
A liability is current when: it is expected to be settled
in the normal operating cycle; it is held primarily for
the purpose of trading; it is due to be settled within
12 months after the reporting period; or there is no
unconditional right to defer the settlement of the
liability for at least 12 months after the reporting
period. All other liabilities are classified as non-current.
Clean TeQ Holdings Limited (the ‘head Entity’)
and its wholly-owned Australian subsidiaries have
formed an income tax Consolidated group under the
tax consolidation regime. The head Entity and each
subsidiary in the tax Consolidated group continue
to account for their own current and deferred tax
amounts. The tax Consolidated group has applied
the ‘separate taxpayer within group’ approach in
determining the appropriate amount of taxes to
allocate to members of the tax Consolidated group.
In addition to its own current and deferred tax
amounts, the head Entity also recognises the current
tax liabilities (or assets) and the deferred tax assets
arising from unused tax losses and unused tax credits
assumed from each subsidiary in the tax Consolidated
group. Assets or liabilities arising under tax funding
agreements with the tax Consolidated entities are
recognised as amounts receivable from or payable to
other entities in the tax Consolidated group. The tax
funding arrangement ensures that the intercompany
charge equals the current tax liability or benefit of
each tax Consolidated group member, resulting
in neither a contribution by the head Entity to the
subsidiaries nor a distribution by the subsidiaries to
the head Entity.
(i) Current and non-current classification
Assets and liabilities are presented in the statement
of financial position based on current and non-current
classification.
An asset is current when: it is expected to be realised
or intended to be sold or consumed in the normal
operating cycle; it is held primarily for the purpose of
trading; it is expected to be realised within 12 months
after the reporting period; or the asset is cash or cash
equivalent unless restricted from being exchanged or
used to settle a liability for at least 12 months after
the reporting period. All other assets are classified as
non-current.
Deferred tax assets and liabilities are always classified
as non-current.
(j) Cash and cash equivalents
Cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other
short-term, highly liquid investments with original
maturities of three months or less that are readily
convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
(k) Trade and other receivables
Trade receivables are initially recognised at fair value
and subsequently measured at amortised cost using
the effective interest method, less any provision for
impairment. Trade receivables are generally due for
settlement within 30 days.
Collectability of trade receivables is reviewed on
an ongoing basis. Debts which are known to be
uncollectable are written off by reducing the carrying
amount directly. A provision for impairment of
trade receivables is raised when there is objective
evidence that the Consolidated Entity will not be
able to collect all amounts due according to the
original terms of the receivables. Significant financial
difficulties of the debtor, probability that the debtor
will enter bankruptcy or financial reorganisation and
default or delinquency in payments (more than 60
days overdue) are considered indicators that the
trade receivable may be impaired. The amount of
the impairment allowance is the difference between
the asset’s carrying amount and the present value of
estimated future cash flows, discounted at the original
effective interest rate. Cash flows relating to short-
term receivables are not discounted if the effect of
discounting is immaterial.
Other receivables are recognised at amortised cost,
less any provision for impairment.
Annual Report 2015 CleanTeQ | 41
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 2. significant
accounting Policies continued
and equipment are as follows for the current and
preceding financial year:
(l) Inventories
Raw materials, work in progress and finished goods are
stated at the lower of cost and net realisable value on a
‘first in first out’ basis. Cost comprises direct materials
and delivery costs, direct labour, import duties and
other taxes, an appropriate proportion of variable and
fixed overhead expenditure based on normal operating
capacity, and, where applicable, transfers from cash
flow hedging reserves in equity. Costs of purchased
inventory are determined after deducting rebates and
discounts received or receivable.
Work in progress is measured, for each project in
progress, as the excess of revenue recognised for
the project, based on the project’s percentage of
completion, over the revenue invoiced to date for that
project. For projects where the revenue recognised
for a project is less than the revenue invoiced to date
for that project, the excess of revenue invoiced over
revenue recognised is recorded as a current liability,
presented as deferred revenue.
Net realisable value is the estimated selling price in
the ordinary course of business less the estimated
costs of completion and the estimated costs
necessary to make the sale.
(m) Property, plant and equipment
Plant and equipment is stated at cost less
accumulated depreciation and accumulated
impairment losses. Subsequent expenditure is
capitalised only when it is probable that the future
economic benefits associated with the expenditure
will flow to the Consolidated Entity. Ongoing repairs
and maintenance are expensed as incurred. Land is
not depreciated.
Items of property, plant and equipment are
depreciated from the date that they are installed
and are ready for use, or in respect of internally
constructed assets, from the date that the asset
is completed and ready for use. Depreciation is
calculated on to write off the net cost of each item
of plant and equipment (excluding land) over their
expected useful lives. Depreciation is generally
recognised in profit or loss, unless the amount is
included in the carrying amount of another asset.
Leased assets are depreciated over the shorter
of the lease term and their useful lives unless it
is reasonably certain that the Consolidated Entity
will obtain ownership by the end of the lease
term. The estimated useful lives of property, plant
42 | CleanTeQ Annual Report 2015
Plant and factory
equipment
2.5 to 20 years (straight line
and diminishing value)
Office furniture and
equipment
2.5 to 20 years (straight line
and diminishing value)
Capitalised leased
equipment
3-7 years (diminishing value)
Motor vehicles
5-6 years (diminishing value)
Land
Indefinite
The residual values, useful lives and depreciation
methods are reviewed, and adjusted if appropriate, at
each reporting date.
An item of plant and equipment is derecognised upon
disposal or when there is no future economic benefit
to the Consolidated Entity. Gains and losses between
the carrying amount and the disposal proceeds are
taken to profit or loss. Any revaluation surplus reserve
relating to the item disposed of is transferred directly
to retained profits.
n) Other financial assets
Cash on deposit used as security for bank guarantees
that matures within four and twelve months of
each reporting period is disclosed as a current other
financial asset. Those deposits that do not mature for
in excess of twelve months are disclosed as non-
current other financial assets.
(o) Intangible assets
Intangible assets acquired as part of a business
combination, other than goodwill, are initially
measured at their fair value at the date of the
acquisition. Intangible assets acquired separately are
initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently
measured at cost less any impairment. Finite life
intangible assets are subsequently measured at cost
less amortisation and any impairment. The gains or
losses recognised in profit or loss arising from the
de-recognition of intangible assets are measured as
the difference between net disposal proceeds and the
carrying amount of the intangible asset. The method
of determining useful lives and useful lives of finite
life intangible assets are reviewed annually. Changes
in the expected pattern of consumption or useful
life are accounted for prospectively by changing the
amortisation method or period.
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
Research and development
Research costs are expensed in the period in which
they are incurred. Development costs are capitalised
when it is probable that the project will be a success
considering its commercial and technical feasibility;
the Consolidated Entity is able to use or sell the asset;
the Consolidated Entity has sufficient resources;
and intent to complete the development and its
costs can be measured reliably. Otherwise they are
recognised in the profit or loss as incurred. Capitalised
development costs are amortised on a straight-line
basis over the period of their expected benefit, being
between 4 and 20 years dependent on the project.
Mineral Licence Rights
Licence rights relating to mining tenements are
amortised in the consolidated statement of profit or loss
and comprehensive income over the life of the relevant
area of interest from the commencement of commercial
production. The mineral rights intangible asset is
subject to impairment testing in accordance with the
Consolidated Entity’s accounting policy for impairment
of non-financial assets as set out in note 3(p).
For impairment testing, assets are grouped together
into the smallest group of assets that generates
cash inflows from continuing use that are largely
independent of the cash inflows of other assets or
CGUs. Goodwill arising from a business combination is
allocated to CGUs or groups of CGUs that are expected
to benefit from the synergies of the combination.
The recoverable amount of an asset or CGU is the
greater of its value in use and its fair value less costs
to sell. Value in use is based on the estimated future
cash flows, discounted to their present value using
a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset or CGU.
An impairment loss is recognised if the carrying amount
of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in profit or loss.
They are allocated first to reduce the carrying amount
of any goodwill allocated to the CGU, and then to
reduce the carrying amounts of the other assets in the
CGU on a pro rata basis.
Patents and trademarks
Significant costs associated with patents and
trademarks are deferred and amortised on a straight-
line basis over the period of their expected benefit,
being between 4 and 20 years.
An impairment loss in respect of goodwill is not
reversed. For other assets, an impairment loss is
reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that
would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
Subsequent expenditure
(q) Leases
Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied
in the specific asset to which it relates. All other
expenditure, including expenditure on internally
generated goodwill and brands, is recognised in profit
or loss as incurred.
Determining whether an arrangement contains
a lease
At inception of an arrangement, the Consolidated
Entity determines whether such an arrangement is or
contains a lease.
(p) Impairment of non-financial assets
At each reporting date, the Consolidated Entity
reviews the carrying amounts of its non-financial
assets (other than inventories and deferred tax
assets) to determine whether there is any indication
of impairment. If any such indication exists, then the
asset’s recoverable amount is estimated. Goodwill is
tested annually for impairment.
At inception or on reassessment of an arrangement
that contains a lease, the Consolidated Entity
separates payments and other consideration required
by the arrangement into those for the lease and those
for other elements on the basis of their relative fair
values. If the Consolidated Entity concludes for a
finance lease that it is impracticable to separate the
payments reliably, then an asset and a liability are
recognised at an amount equal to the fair value of the
underlying asset; subsequently, the liability is reduced
as payments are made and an imputed finance cost
on the liability is recognised using the Consolidated
Entity’s incremental borrowing rate.
Annual Report 2015 CleanTeQ | 43
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 2. significant
accounting Policies continued
Leased assets
Compound financial instruments issued by the
Consolidated Entity comprise convertible notes that can
be converted to share capital at the option of the holder,
when the number of shares to be issued is fixed.
Assets held by the Consolidated Entity under leases
that transfer to the Consolidated Entity substantially all
the risks and rewards of ownership are classified as
finance leases. The leased asset is measured initially
at an amount equal to the lower of their fair value and
the present value of the minimum lease payments.
Subsequent to initial recognition, the assets are
accounted for in accordance with the accounting
policy applicable to that asset.
Assets held under other leases are classified as
operating leases and are not recognised in the
Consolidated Entity’s statement of financial position.
Lease payments
Payments made under operating leases are
recognised in profit or loss on a straight-line basis
over the term of the lease. Lease incentives received
are recognised as an integral part of the total lease
expense, over the term of the lease.
Minimum lease payments made under finance leases
are apportioned between the finance expense and
the reduction of the outstanding liability. The finance
expense is allocated to each period during the lease
term so as to produce a constant periodic rate of
interest on the remaining balance of the liability.
(r) Trade and other payables
These amounts represent liabilities for goods and
services provided to the Consolidated Entity prior to the
end of the financial year and which are unpaid. Due to
their short-term nature they are measured at amortised
cost and are not discounted. The amounts are unsecured
and are usually paid within 30 days of recognition.
(s) Borrowings
Loans and borrowings, including promissory notes,
are initially recognised at the fair value of the
consideration received, net of transaction costs. 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.
44 | CleanTeQ Annual Report 2015
The liability component of a compound financial
instrument is recognised initially at the fair value of a
similar liability that does not have an equity conversion
option. The equity component is recognised initially
at the difference between the fair value of the
compound financial instrument as a whole and the
fair value of the liability component. Any directly
attributable transaction costs are allocated to the
liability and equity components in proportion to their
initial carrying amounts.
Subsequent to initial recognition, the liability
component of the compound financial instrument
is measured at amortised cost using the effective
interest method. The equity component of a
compound financial instrument is not remeasured
subsequent to initial recognition.
Interest related to the financial liability is recognised
in profit or loss. On conversion, the financial liability is
reclassified to equity and no gain or loss is recognised.
(t) Finance income and costs
The Consolidated Entity’s finance income and finance
costs include, as applicable:
•
•
interest income;
interest expense;
• dividend income;
•
•
•
•
•
•
•
the net gain or loss on the disposal of available-
for-sale financial assets;
the net gain or loss on financial assets at fair value
through profit or loss;
the foreign currency gain or loss on financial
assets and financial liabilities;
the fair value loss on contingent consideration
classified as a financial liability;
impairment losses recognised on financial assets
(other than trade receivables);
the net gain or loss on hedging instruments that
are recognised in profit or loss; and
the reclassification of net gains previously
recognised in other comprehensive income.
Interest revenue is recognised as interest accrues
using the effective interest method. This is a method
of calculating the amortised cost of a financial asset
and allocating the interest income over the relevant
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
period using the effective interest rate, which is the
rate that exactly discounts estimated future cash
receipts through the expected life of the financial
asset to the net carrying amount of the financial asset.
Defined contribution superannuation expense
Contributions to defined contribution superannuation
plans are expensed in the period in which they are
incurred.
Dividend income is recognised in profit or loss on
the date that the Group’s right to receive payment is
established.
Interest expense is recognised using the effective
interest method.
Finance costs attributable to qualifying assets are
capitalised as part of the asset. All other finance costs
are expensed in the period in which they are incurred,
including:
•
•
interest on short-term and long-term borrowings;
interest on hire purchases.
(u) Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-
monetary benefits, annual leave and long service
leave expected to be settled within 12 months of the
reporting date are recognised in current liabilities in
respect of employees’ services up to the reporting
date and are measured at the amounts expected to be
paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave
not expected to be settled within 12 months of the
reporting date are recognised in non-current liabilities,
provided there is an unconditional right to defer
settlement of the liability. The liability is measured as
the present value of expected future payments to be
made in respect of services provided by employees
up to the reporting date using the projected unit credit
method. Consideration is given to expected future
wage and salary levels, experience of employee
departures and periods of service. Expected future
payments are discounted using market yields at the
reporting date on national government bonds with
terms to maturity and currency that match, as closely
as possible, the estimated future cash outflows.
Termination benefits
Termination benefits are expensed at the earlier of
when the Group can no longer withdraw the offer of
those benefits and when the Group recognises costs
for a restructuring. If benefits are not expected to be
settled wholly within 12 months of the end of the
reporting period, then they are discounted.
Share-based payments
Equity-settled and cash-settled share-based
compensation benefits are provided to employees.
There were no cash settled share-based payments
during the year.
Equity-settled transactions are awards of shares, or
options over shares that are provided to employees in
exchange for the rendering of services. Cash-settled
transactions are awards of cash for the exchange of
services, where the amount of cash is determined by
reference to the share price.
The cost of equity-settled transactions are measured
at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-
Scholes option pricing model that takes into account
the exercise price, the term of the option, the
impact of dilution, the share price at grant date and
expected price volatility of the underlying share, the
expected dividend yield and the risk free interest
rate for the term of the option, together with non-
vesting conditions that do not determine whether the
Consolidated Entity receives the services that entitle
the employees to receive payment. No account is
taken of any other vesting conditions.
The cost of equity-settled transactions are recognised
as an expense with a corresponding increase in equity
over the vesting period. The cumulative charge to
profit or loss is calculated based on the grant date fair
value of the award, the best estimate of the number
of awards that are likely to vest and the expired
portion of the vesting period. The amount recognised
in profit or loss for the period is the cumulative
amount calculated at each reporting date less
amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and
at each reporting date until vested, determined by
applying either the Binomial or Black-Scholes option
pricing model, taking into consideration the terms
and conditions on which the award was granted.
The cumulative charge to profit or loss until
settlement of the liability is calculated as follows:
• during the vesting period, the liability at each
reporting date is the fair value of the award at
that date multiplied by the expired portion of the
vesting period;
Annual Report 2015 CleanTeQ | 45
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 2. significant
accounting Policies continued
•
from the end of the vesting period until
settlement of the award, the liability is the full fair
value of the liability at the reporting date.
All changes in the liability are recognised in profit or
loss. The ultimate cost of cash-settled transactions is
the cash paid to settle the liability.
Market conditions are taken into consideration in
determining grant date fair value. Therefore any
awards subject to market conditions are considered
to vest irrespective of whether or not that market
condition has been met, provided all other conditions
are satisfied.
If equity-settled awards are modified, as a minimum
an expense is recognised as if the modification has
not been made. An additional expense is recognised,
over the remaining vesting period, for any modification
that increases the total fair value of the share-based
compensation benefit as at the date of modification.
If the non-vesting condition is within the control of
the Consolidated Entity or employee, the failure to
satisfy the condition is treated as a cancellation. If the
condition is not within the control of the Consolidated
Entity or employee and is not satisfied during the
vesting period, any remaining expense for the award
is recognised over the remaining vesting period,
unless the award is forfeited.
If equity-settled awards are cancelled, it is treated
as if it has vested on the date of cancellation, and
any remaining expense is recognised immediately.
If a new replacement award is substituted for the
cancelled award, the cancelled and new award is
treated as if they were a modification.
(v) 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
principle 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 interest. For non-financial assets, the fair value
measurement is based on its highest and best use.
46 | CleanTeQ Annual Report 2015
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 each reporting date and transfers between
levels are determined based on a reassessment of the
lowest level input that is significant to the fair value
measurement.
For recurring and non-recurring fair value
measurements, external valuers may be used when
internal expertise is either not available or when
the valuation is deemed to be significant. External
valuers are selected based on market knowledge
and reputation. Where there is a significant change
in fair value of an asset or liability from one period to
another, an analysis is undertaken, which includes a
verification of the major inputs applied in the latest
valuation and a comparison, where applicable, with
external sources of data.
(w) Issued capital
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.
(x) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing
the profit attributable to the owners of Clean TeQ
Holdings Limited by the weighted average number of
ordinary shares outstanding during the financial year,
adjusted for bonus elements in ordinary shares issued
during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in
the determination of basic earnings per share to take
into account the after income tax effect of interest
and other financing costs associated with dilutive
potential ordinary shares and the weighted average
number of shares assumed to have been issued
for no consideration in relation to dilutive potential
ordinary shares.
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
(y) Goods and Services Tax (‘GST’) and other
IFRS 9 Financial Instruments
IFRS 9, published in July 2014, replaces the existing
guidance in IAS 39 Financial Instruments: Recognition
and Measurement. IFRS 9 includes revised guidance
on the classification and measurement of financial
instruments, including a new expected credit loss
model for calculating impairment on financial assets,
and the new general hedge accounting requirements.
It also carries forward the guidance on recognition and
de-recognition of financial instruments from IAS 39.
IFRS 9 is effective for annual reporting periods
beginning on or after 1 January 2018, with early
adoption permitted.
The adoption of these standards may have an impact
on the consolidated entity’s financial assets, and
is not expected to have a significant impact on the
Consolidated Entity’s financial liabilities.
(ab) Exploration Assets
Exploration and evaluation expenditure incurred by the
Consolidated Entity is recorded at cost as an asset for
each area of interest, if:
(i) The expenditure is expected to be recouped by
successful development and or sale; or
(ii) Significant evaluation and exploration work is
continuing.
similar taxes
Revenues, expenses and assets are recognised net
of the amount of associated GST, unless the GST
incurred is not recoverable from the tax authority. In
this case it is recognised as part of the cost of the
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of
the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the
tax authority is included in other receivables or other
payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing
or financing activities which are recoverable from,
or payable to the tax authority, are presented as
operating cash flows.
Commitments and contingencies are disclosed net of
the amount of GST recoverable from, or payable to,
the tax authority.
(z) Rounding of amounts
The Company is of a kind referred to in Class Order
98/100, issued by the Australian Securities and
Investments Commission, relating to ‘rounding-
off’. Amounts in this report have been rounded off
in accordance with that Class Order to the nearest
thousand dollars, or in certain cases, the nearest dollar.
(aa) New standards and interpretations not
yet adopted
A number of new standards and amendments to
standards are effective for annual period beginning
after 1 January 2014, however, the Group has not
applied the following new or amended standards in
preparing these consolidated financial statements.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 establishes a comprehensive framework
for determining whether, how much and when
revenue is recognised. It replaces existing revenue
recognition guidance, including IAS 18 Revenue, IAS
11 Construction Contracts and IFRIC 13 Customer
Loyalty Programmes.
IFRS 15 is effective for annual reporting periods
beginning on or after 1 January 2017, with early
adoption permitted.
Annual Report 2015 CleanTeQ | 47
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 3. critical accounting
juDgeMents, estiMates anD
assuMPtions
The preparation of the financial statements requires
management to make judgements, estimates and
assumptions that affect the reported amounts in
the financial statements. Management continually
evaluates its judgements and estimates in relation
to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements,
estimates and assumptions on historical experience
and on other various factors, including expectations of
future events, management believes to be reasonable
under the circumstances. The resulting accounting
judgements and estimates will seldom equal the
related actual results. The judgements, estimates and
assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets
and liabilities (refer to the respective notes) within the
next financial year are discussed below.
Share-based payment transactions
The Consolidated Entity measures the cost of equity-
settled transactions with employees by reference to
the fair value of the equity instruments at the date at
which they are granted. The fair value is determined
by using either the Binomial or Black-Scholes model
taking into account the terms and conditions upon
which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled
share-based payments would have no impact on the
carrying amounts of assets and liabilities within the
next annual reporting period but may impact profit or
loss and equity.
Estimation of useful lives of assets
The Consolidated Entity determines the estimated
useful lives and related depreciation and amortisation
charges for its property, plant and equipment and finite
life intangible assets. The useful lives could change
significantly as a result of technical innovations or
some other event. The depreciation and amortisation
charge will increase where the useful lives are less
than previously estimated lives, or technically obsolete
or non-strategic assets that have been abandoned or
sold will be written off or written down.
Intangible assets
The recoverable value of patents and trademarks
acquired is based on the cost of registering the
patents and trademarks, less any diminution in value
through amortisation and impairment. The recoverable
value of development intangible assets is based on
discounted cash flows expected to be derived from
the use and eventual sale of the assets.
At each reporting date the directors and management
undertake an impairment review to determine their
value in use as derived from the discounted cash flow
modelling. The impairment review carried out as at
30 June 2015 did reveal some impairment. Based on
the impairment review at 30 June 2015, the directors
determined an impairment of the intangible assets
of $2,751,000 (2014: $nil). Details of the review, and
the assumptions and estimates used, are contained in
note 18.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible
temporary differences only if the Consolidated Entity
considers it is probable that future taxable amounts
will be available to utilise those temporary differences
and losses.
Other non-derivative financial liabilities
Other non-derivative financial liabilities are measured
at fair value, at initial recognition and for disclosure
purposes, at each financial reporting date. Fair value
is calculated based on the present value of the future
principal and interest cash flows, discounted at the
market rate of interest at the measurement date.
In respect of the liability component of convertible
notes, the market rate of interest is determined
with reference to similar liabilities that do not have a
conversion option. For finance leases the market rate
of interest is determined by reference to similar lease
agreements.
48 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 4. oPerating segMents
Metals
Identification of reportable operating segments
The Consolidated Entity is organised into 3 operating
segments: Air Purification, Water and Metals. These
operating segments offer different products and
services, and are managed separately because they
require different technology and marketing strategies.
For each segment internal reports are produced for
review and use by the CEO, who is the Consolidated
Entity’s chief operating decision maker (‘CODM’),
in assessing performance and in determining the
allocation of resources. There is no aggregation of
operating segments.
The CODM reviews gross profit for each operating
division. The accounting policies adopted for internal
reporting to the CODM are consistent with those
adopted in the financial statements.
The information reported to the CODM is on at least a
monthly basis.
Types of products and services
The Clean-iX® technology is at the core of this
segment and aims to provide cost effective extraction
techniques for a range of resources, including base
metals, precious metals and radioactive elements
(such as uranium).
Information regarding the results of each reportable
segment is included below. Performance is measured
based on the net result before interest, depreciation
and tax, as included in the internal management
reports that are reviewed by the Consolidated Entity’s
CEO. Each segment’s net result before interest,
depreciation and tax is used to measure performance
as management believes that such information is
the most relevant in evaluating the results of certain
segments relative to other entities that operate within
these industries. Inter-segment pricing is determined
on an arm’s length basis. The information relating to
the performance of the identified segments includes
revenues and directly attributable costs and materials.
The assets attributed to each division relates to
revenue generating assets. All other assets and
liabilities are not allocated to specific segments.
The principal products and services of each of these
operating segments are as follows:
Geographical segments
Air Purification
The Company provides a full suite of air purification
and odour elimination solutions to municipal and
statutory authorities and industrial companies.
Water
The Company’s suite of water technologies filter,
separate and purify polluted waters for drinking,
agriculture, recreation or industrial use. The Company
is developing technologies for use in the purification
and recycling of waste water and the desalination of
brackish water.
Geographically, the Consolidated Entity operates
predominately in Australia.
Major customers
Revenues from three major customers of the Air
segment (discontinued operations) represents
approximately $3.4 million of the Consolidated Entity’s
total revenues.
Annual Report 2015 CleanTeQ | 49
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 4. oPerating segMents (continued)
Consolidated – 2015
Air
Purification*
Metals**
Water
Intersegment
eliminations/
unallocated***
Total
$’000
$’000
$’000
$’000
$’000
REVENUE
Sales to external customers
6,935
Rental income
Interest income
Other revenue
Total revenue
Reportable segment (loss)/
profit before interest,
depreciation and tax
Depreciation and
amortisation
Impairment of assets
Finance costs
Share of losses from
joint venture
Profit on sale of investment
(note 10)
Profit/(loss) before income
tax expense
Income tax expense
Loss after income
tax expense
ASSETS
Segment assets
Total assets
Total assets includes:
Acquisition of non-current
assets (including those
acquired in a business
combination)
LIABILITIES
Segment liabilities
Total liabilities
-
-
-
6,935
738
(25)
-
(24)
-
-
689
(97)
-
-
-
241
13
-
-
254
-
-
-
49
49
-
-
90
397
487
7,176
13
90
446
7,725
(15)
(256)
(4,219)
(3,752)
-
-
-
-
-
(200)
(2,751)
-
-
-
(999)
-
(715)
-
338
(15)
-
(3,207)
(5,595)
-
-
9,138
5,691
5,154
(1,224)
(2,751)
(739)
-
338
(8,128)
(97)
(8,225)
19,983
19,983
3,529
-
-
3,529
2,490
1,173
1,550
5,213
5,213
* The change in segment assets in the Air segment from the last reporting period is primarily attributable to the sale of the Air business
as at 30 June 2015. Refer to note 10 – Discontinued Operations.
** The change in segment assets for the Metals division is primarily attributable to the acquisition of the Syerston Project from Ivanhoe
Mines Ltd that occurred on 31 March 2015.
*** The magnitude of the unallocated portion of the segment results is a result of the Consolidated Entity incurring a significant amount
of expenses that cannot be directly attributable on a reasonable basis to any one segment.
50 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
Consolidated – 2014
Air
Purification*
Metals
Water
Intersegment
eliminations/
unallocated**
Total
$’000
$’000
$’000
$’000
$’000
REVENUE
Sales to external customers
4,754
Interest income
Other revenue
Total revenue
Reportable segment (loss)/
profit before interest,
depreciation and tax
Depreciation and
amortisation
Finance costs
Share of losses from
joint venture
Gain on revaluation
of investment
-
-
4,754
317
-
-
317
1,283
96
-
-
-
-
-
-
-
-
217
-
48
265
192
(63)
-
(291)
407
245
334
51
387
772
5,622
51
435
6,108
(5,429)
(3,858)
(642)
(463)
-
-
(705)
(463)
(291)
407
(6,534)
(4,910)
Profit/(loss) before income
tax expense
1,283
96
Income tax expense
Loss after income
tax expense
ASSETS
Segment assets
Total assets
Total assets includes:
Acquisition of non-current
assets (including those
acquired in a business
combination)
LIABILITIES
Segment liabilities
Total liabilities
1,192
4,870
9,632
3,705
-
(4,910)
19,399
19,399
20
386
168
264
4,421
59
4,668
2,753
4,916
8,319
8,319
* This business was sold on 30 June 2015. Refer to note 10 – Discontinued Operations.
** The magnitude of the unallocated portion of the segment results is a result of the Consolidated Entity incurring a significant amount
of expenses that cannot be directly attributable on a reasonable basis to any one segment.
Annual Report 2015 CleanTeQ | 51
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 5. revenue
SALES REVENUE
Contract revenue
Government grants
Rental income
OTHER REVENUE
Interest
Other revenue
Revenue
Consolidated
2015
$’000
2014
$’000
231
35
13
279
90
421
511
790
799
399
-
1,198
51
105
156
1,354
note 6. share of losses of joint ventures accounteD for using the
equity MethoD
Consolidated
2015
$’000
-
2014
$’000
(291)
Consolidated
2015
$’000
-
2014
$’000
407
Share of loss – joint ventures
note 7. other incoMe
Revaluation of investments
52 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 8. exPenses
Loss before income tax from continuing operations includes
the following specific expenses:
COST OF SALES
Cost of sales
DEPRECIATION
Motor vehicles under lease
Plant and factory equipment
Office equipment and furniture
Total depreciation
AMORTISATION
Capitalised development costs
Other intangible assets
Total amortisation
Total depreciation and amortisation
EMPLOyEE BENEFIT EXPENSES
Wages and salaries
Employee entitlements expense including movements
in provisions for employee entitlements
Superannuation
Equity settled share based payments
Other costs
Employee benefit expenses capitalised into development assets
Total employee benefit expense
RENTAL EXPENSE RELATING TO OPERATING LEASES
Consolidated
2015
$’000
2014
$’000
561
517
12
324
37
373
592
234
826
1,199
14
46
46
106
431
168
599
705
1,326
3,094
76
160
880
654
(487)
2,609
105
295
173
384
(629)
3,422
Minimum lease payments
233
184
Annual Report 2015 CleanTeQ | 53
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 9. incoMe tax benefit
INCOME TAX BENEFIT:
Current tax
Deferred tax – origination and reversal of temporary differences
Aggregate income tax benefit
Deferred tax included in income tax benefit comprises:
Decrease in deferred tax liabilities (note 26)
NUMERICAL RECONCILIATION OF INCOME TAX BENEFIT
AND TAX AT THE STATUTORy RATE
Loss before income tax benefit from continuing operations
Profit before income tax (expense)/benefit from discontinued operations
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment expenses
Share-based payments
Non-assessable gain on revaluation of investments
Change in recognised deductible temporary difference
Impairment of asset treated as non-deductible
Losses from joint venture
Tax losses (reinstated) / not brought to account
R&D claim adjustments
Non-deductible amortisation expense
Income tax benefit
TAX LOSSES NOT RECOGNISED:
Consolidated
2015
$’000
2014
$’000
-
-
-
-
(9,155)
1,027
(8,128)
(2,438)
2
264
-
103
825
-
1,210
-
34
-
-
-
-
-
(6,193)
1,283
(4,910)
(1,473)
1
52
(122)
682
-
87
580
163
30
-
Unused tax losses for which no deferred tax asset has been recognised,
including tax losses arising from a business combination*
Potential tax benefit @ 30%
38,422
11,527
6,737
2,021
Plus: Unrecognised benefit of carry forward non-refundable R&D tax offset for which
no deferred tax asset has been recognised, arising from a business combination
589
589
Total potential tax benefit of carry forward tax losses and R&D tax offset for which
no deferred tax asset has been recognised
Temporary differences not brought to account
12,116
903
2,610
903
* This figure includes $27,651,000 of carry forward tax losses on the acquisition of the Syerston Project from Ivanhoe Mines Ltd.
The above potential tax benefits for tax losses and R&D tax offset have not been recognised in the statement of
financial position. The tax losses can only be utilised in the future if the continuity of ownership test is passed,
or failing that, the same business test is passed. The R&D tax offset can only be utilised in the future if sufficient
tax liabilities can be generated against which the carry forward R&D tax offset can be credited.
54 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 10. DiscontinueD oPerations
Description
Effective 30 June 2015 the Consolidated Entity divested its remaining 59% shareholding in Clean TeQ Aromatrix
Pty Ltd to Australia Sunshine Holdings Limited for cash proceeds of $1,681,500. The divestment allows the
Company to focus exclusively on the Company’s Water and Metals businesses which are both primarily driven by
the Company’s proprietary continuous ion exchange technology.
In December 2014, the Consolidated Entity divested 41% of its shareholding in Clean TeQ Air Pty Ltd (the
predecessor company to Clean TeQ Aromatrix Pty Ltd) to Aromatrix Technologies (Hong Kong) Ltd as a result of
the Aromatrix business acquired (see note 40(i)) and to entities associated with staff of Clean TeQ Air Pty Ltd.
Cash proceeds of $345,000 were received on this transaction. The Consolidated Entity recorded a gain on the
divestment of $1,120,000 directly in equity.
Financial performance information
Revenue from sale of goods
Total revenue
EXPENSES
Inventory write downs
Raw materials and other direct costs
Employee benefits expenses
Depreciation and amortisation expenses
Legal and professional expenses
Occupancy expenses
Finance costs
Marketing expenses
Other expenses
Total expenses before tax
Income tax expense
Net profit after tax from discontinued operations
Gain on disposal after income tax expense
Profit after income tax from discontinued operations
Consolidated
2015
$’000
6,935
6,935
(1)
(4,188)
(1,242)
(25)
(126)
(145)
(24)
(77)
(418)
2014
$’000
4,754
4,754
-
(3,471)
-
-
-
-
-
-
-
(6,246)
(3,471)
(97)
592
338
930
-
1,283
-
1,283
Annual Report 2015 CleanTeQ | 55
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 10. DiscontinueD oPerations continued
Effects of disposal on the financial position of the Consolidated Entity
Property, plant & equipment
Trade and other receivables
Inventories
Goodwill
Cash & cash equivalents disposed of
Trade and other payables
Deferred revenue
Employee entitlements
Income tax liability
Subtotal – (assets)/liabilities disposed of
Less: Non-controlling interests
Net (assets) and liabilities – total
Consideration received in cash – 59% residual interest
Cash & cash equivalents disposed of
Consideration received in cash for partial disposal – 8% interest
Total net cash inflow
note 11. current assets – cash anD cash equivalents
Cash at bank
Cash on deposit
Cash on deposit used as security for bank guarantee
and credit card facilities – uncommitted
Consolidated
2015
$’000
(126)
(1,990)
(655)
(1,500)
(105)
1,152
822
149
97
2,156
884
1,272
1,682
(105)
345
1,922
Consolidated
2015
$’000
3,313
-
-
3,313
2014
$’000
2,398
18
124
2,540
The effective interest rate on short-term bank deposits at 30 June 2015 was 1.90% (2014: 2.52%). These deposits
have a maximum maturity of 90 days of year end. Any balances with maturities exceeding this have been disclosed
as other financial assets. Refer to note 24 for details of the used and unused bank guarantee facility.
56 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 12. current assets – traDe anD other receivables
Trade receivables
Other receivables
Past due but not impaired
Consolidated
2015
$’000
36
487
523
2014
$’000
613
175
788
Customers with balances past due but without provision for impairment of receivables amount to $28,000 as at
30 June 2015 ($258,000 as at 30 June 2014).
The Consolidated Entity did not consider a credit risk on the aggregate balances after reviewing credit terms of
customers based on recent collection practices.
The ageing of the past due but not impaired receivables are as follows:
31 – 60 days
60 – 90 days
90 + days
Consolidated
2015
$’000
2014
$’000
28
-
-
28
165
-
93
258
Normal trading terms are 30 days from month end. Amounts outstanding beyond normal trading terms do not
have a history of default and thus management is of the view that no debtors are impaired at 30 June 2015 or 30
June 2014 and thus should not be provided for.
note 13. current assets – inventories
Raw materials – at net realisable value
Work in progress – at cost
Finished goods – at cost
Consolidated
2015
$’000
2014
$’000
10
-
86
96
58
753
128
939
Raw materials includes grape skin extract which was initially recognised at a cost of $598,000 when first acquired
pre-2007. At 30 June 2015 the carrying value of grape skin extract is $10,000 (2014: $10,000). During the year
ending 30 June 2015, management wrote down the value of finished goods, by $85,000 (2014: $361,000).
Annual Report 2015 CleanTeQ | 57
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 14. current assets – incoMe tax receivable
Income tax receivable
Consolidated
2015
$’000
963
2014
$’000
463
Income tax receivable represents the refund due to the Consolidated Entity on capitalised expenditure during the
current financial year as a result of research and development tax concessions.
note 15. current assets – other financial assets
Cash on deposit used as security for bank guarantees
note 16. non-current assets – other financial assets
Cash on deposit used as security for bank guarantees
Consolidated
2015
$’000
25
2014
$’000
27
Consolidated
2015
$’000
328
2014
$’000
280
note 17. non-current assets – ProPerty, Plant anD equiPMent
Consolidated
Office furniture and equipment – at cost
Less: Accumulated depreciation
Motor vehicles – at cost
Less: Accumulated depreciation
Factory equipment – at cost
Less: Accumulated depreciation
Land – at cost
58 | CleanTeQ Annual Report 2015
2015
$’000
156
(100)
56
86
(60)
26
737
(459)
278
2,229
2,229
2,589
2014
$’000
194
(100)
94
154
(89)
65
852
(160)
692
-
-
851
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
The land was acquired from Ivanhoe Mines Ltd as part of the Consolidated Group’s acquisition of the Syerston
Project. The land was recorded at its deemed cost, being an approximate of its fair value as at that date as
determined by management, with reference to an independent valuation performed in 2013.
The acquisition of the Syerston project has been recognised as an asset acquisition in accordance with Australian
Accounting Standards.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are
set out below:
Factory
Equipment
Land
Office
Furniture &
Equipment
Motor
Vehicles
Total
$’000
$’000
$’000
$’000
$’000
197
-
550
-
(10)
(45)
692
31
-
(97)
-
(348)
278
-
-
-
-
-
-
-
2,229
-
-
-
-
2,229
95
59
17
(25)
(6)
(46)
94
1
-
(2)
-
(37)
56
80
-
-
-
-
(15)
65
-
-
(27)
-
(12)
26
372
59
567
(25)
(16)
(106)
851
2,261
-
(126)
-
(397)
2,589
CONSOLIDATED
Balance as at 1 July 2013
Additions
Additions through business
combinations (note 40)
Disposals
Write off of assets
Depreciation expense
Balance as at 30 June 2014
Additions
Additions through business
combinations (note 40)
Disposals (Refer to Note 10)
Write off of assets
Depreciation expense
Balance as at 30 June 2015
Annual Report 2015 CleanTeQ | 59
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 18. non-current assets – intangibles
Development – at cost
Less: Accumulated depreciation
Patents and trademarks – at cost
Less: Accumulated depreciation
Licences – at cost
Less: Accumulated depreciation
Consolidated
2015
$’000
18,606
(8,570)
10,033
713
(267)
446
1,421
-
1,421
2014
$’000
18,596
(8,637)
9,959
713
(233)
480
3,135
(63)
3,072
11,900
13,511
Reconciliation of carrying amount
Reconciliations of the carrying amounts at the beginning and end of the current and previous financial year are
set out below:
CONSOLIDATED
Balance at 1 July 2013
Additions
Additions through business combinations (note 40)
Amortisation expense
Balance at 30 June 2014
Additions
Impairment charge
Amortisation expense
Balance as at 30 June 2015
Capitalised
Development
costs
Licence*
Rights
Patents
and
Trademarks
Total
$’000
$’000
$’000
$’000
9,362
1,028
-
(431)
9,959
666
-
(592)
10,033
192
-
3,014
(134)
3,072
1,300
(2,751)
(200)
1,421
514
10,068
-
-
(34)
480
-
-
(34)
446
1,028
3,014
(599)
13,511
1,966
(2,751)
(826)
11,900
* The licence rights acquired in the year ending 30 June 2015 relate to mining tenements acquired from Ivanhoe Mines Ltd, as part of
the Consolidated Group’s acquisition of the Syerston Project. The tenements were recorded based on their deemed cost, being their
estimated fair value calculated as at the date of acquisition of the assets (refer to note 17).
60 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
Carrying values of Cash Generating Units (CGUs)
AS AT 30 JUNE 2014:
Water
Resource recovery
Air
AS AT 30 JUNE 2015:
Water
Resource recovery
Air*
Capitalised
Development
costs
Licence
Rights
Patents
and
Trademarks
Total
$’000
$’000
$’000
$’000
5,546
4,299
114
9,959
5,205
4,828
-
3,012
61
-
3,072
121
1,300
-
10,033
1,421
240
240
-
480
223
223
-
446
8,798
4,600
114
13,511
5,549
6,351
-
11,900
* The Air CGU was disposed of as At 30 June 2015. Refer to note 10 for further details.
Amortisation
The amortisation of patents and trademarks, licence rights and development costs are allocated to expenses
within the statement of profit or loss and other comprehensive income.
Recoverability of development costs
The carrying amount of the Consolidated Entity’s Development intangible assets that are yet to be
commercialised is reviewed at each reporting date for potential impairment. Impairment is now assessed
at a CGU level rather than based on individual intangible assets capitalised due to the Consolidated Entity’s
technologies being platform technologies where cash flows are inter-dependent. The review consists of a
comparison of the carrying value with the expected recoverable amount of the Development intangible assets
based on the estimated value in use, which is determined by discounted cash flow models, as set out below.
Impairment test
As a result of the impairment assessment at 30 June 2015, the directors and management of the Consolidated
Entity identified that the recoverable amount of the licence rights, recorded in the Water CGU, as estimated
from the discounted cash flows was impaired and an impairment charge of $2,751,000 was recognised. All other
intangible assets were deemed by management to not be impaired (30 June 2014: impairment of $nil).
The impairment loss was recognised in the statement of profit and loss and other comprehensive income.
Impairment testing of significant CGUs
The Consolidated Entity’s intangible assets are reviewed for impairment at a CGU level using operating segments
and individually identifiable projects to develop appropriate discounted cash flow models. The discounted cash
flow models take into account a range of factors including:
•
•
the status of an individual project with regard to its stage of project development;
the extent of any incremental costs expected to be incurred to commercialise the development assets;
• five to twenty year (resource sector) forecast revenues from commercialisation of the development assets,
including assumptions with respect to sales growth dependent upon either the quantum of projects forecast
to commence;
Annual Report 2015 CleanTeQ | 61
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 18. non-current assets – intangibles (continued)
•
•
the risks attached to commercialising the asset, including any industry specific or regulatory risk;
anticipated levels of competition; and
• other general economic factors.
The discounted cash flows have been prepared using a variety of sourced data such as sales data from
Memorandum’s of Understanding signed, anticipated sales resulting from discussions with potential customers
and other market data to forecast future revenue. As there are no guarantees that new projects will be awarded,
given regulatory approval where such approval is required or be commercialized within planned timeframes, there
is an inherent risk attached to the discounted cash flows that is factored into the key assumptions by way of
probability factor adjustments.
In generating the forecast cash flows, the Consolidated Entity has used a post-tax discount rate of 15%
(2014: 15%) for all future cash flows for a 5 year period plus the terminal value (Water CGU) and a 20 year period
(Resource Recovery CGU). The discount rate was used in conjunction with a range of probability factors for both
CGUs to reflect the current assessment of the likelihood of success of the forecast cashflows.
Management note that reasonably possible changes in key assumptions include changes to probability factors
applied to forecast cash flows, changes in the timing of cash flows and changes to assumed rates of market
penetration. The most significant potential changes and their impact, independent of each other, on the carrying
values to be tested for impairment are as follows at 30 June 2015:
A reduction of 10% in the probability factors applied to forecast cash flows
A delay of six months in the commencement of forecast cash flows
A reduction of 25% to the consolidated entity’s assumed market penetration rates
Consolidated
2015
$’000
2014
$’000
-
-
-
-
-
-
-
-
Management’s conclusion is that these changes in key assumptions, while reducing the recoverable amounts of
the Consolidated Entity’s technologies, would not, as at 30 June 2015, reduce the recoverable amounts to the
extent that the development intangible assets would be impaired.
note 19. non-current assets – exPloration & evaluation assets
Consolidated
2015
$’000
246
2014
$’000
-
Project
Name
Location
Equity
Interest
2015
Equity
Interest
2014
Syerston
NSW
100%
0%
Exploration expenditure - Syerston
Exploration Tenement Summary
Licence Number
EL4573
62 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 20. current liabilities – traDe anD other P ayables
Trade payables
Deferred consideration payable
Other payables
Consolidated
2015
$’000
282
1,171
325
1,778
2014
$’000
591
2,000
295
2,886
Refer to note 32 for further information on financial instruments.
Deferred consideration of $1,171,000 is payable to Nippon Gas Co Ltd for the acquisition of Associated Water Pty
Ltd and Clean World Japan.
note 21. current liabilities – borrowings
Loans
Hire purchase
Consolidated
2015
$’000
2014
$’000
-
-
-
-
22
22
Refer to note 32 Financial Instruments and note 38 Related party transactions for details of relevant loans.
note 22. current liabilities – eMPloyee benefits
Annual leave
Long service leave
Consolidated
2015
$’000
129
147
276
2014
$’000
193
146
339
Annual Report 2015 CleanTeQ | 63
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 23. DeferreD revenue
CURRENT
Work in progress
Government grant*
NON-CURRENT
Government grant*
Consolidated
2015
$’000
2014
$’000
-
46
46
590
636
293
46
339
637
976
* This relates to the Commonwealth government grant money received associated with the Climate Ready project. This income is
being recognised over 17 years, being the estimated useful life of the related asset.
note 24. non-current liabilities – borrowings
Convertible notes payable
Hire purchase
Consolidated
2015
$’000
-
-
-
2014
$’000
4,072
8
4,080
Refer to note 32 for further information on financial instruments.
On 5 December 2013 the Consolidated Entity issued 5,000,000 Convertible Notes at $0.10 (10 cents) per note,
raising $500,000 for working capital purposes. The notes were issued to Sam Riggall, who was then Chairman
and Non-Executive Director of the Company, on terms that are considered to be normal market terms. On 14
May 2015, Mr Riggall elected to convert those notes to shares in the Consolidated Entity. Shares were issued on
20 May 2015 to Mr Riggall. Mr Riggall is currently Chairman and Chief Executive Officer of the Company.
On 14 May 2015, the convertible note holders who held convertible notes issued by the Consolidated Entity on
21 May 2013 and 2 August 2013 elected to convert those notes to shares in the Consolidated Entity. Shares were
issued on 20 May 2015 to the note holders. Refer to note 28 for details.
64 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Hire purchase
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Guarantees against work in progress and credit card facilities
Hire purchase facilities
Used at the reporting date
Guarantees against work in progress and credit card facilities
Hire purchase facilities
Unused at the reporting date
Guarantees against work in progress and credit card facilities
Hire purchase facilities
note 25. notes P ayable
Notes payable
Consolidated
2015
$’000
-
2014
$’000
30
Consolidated
2015
$’000
2014
$’000
-
-
-
-
-
-
-
-
-
430
30
460
261
30
291
169
-
169
Consolidated
2015
$’000
2,490
2014
$’000
-
As part of the acquisition of the Syerston Project from Ivanhoe Mines Ltd on 31 March 2015, a promissory note
was issued by the Consolidated Entity with a face value of $3,000,000 payable in three years’ time and carrying a
zero coupon. This promissory note is secured by first ranking mortgages against the real property of the Syerston
Project. The promissory note is recognised at its amortised cost of $2,490,000.
Annual Report 2015 CleanTeQ | 65
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 26. non-current liabilities/assets – DeferreD tax
Consolidated
Balance at 30 June 2015
Net
balance
1 July
Recognised
in profit or
loss
Recognised
directly
in equity
Deferred
tax
assets
Deferred
tax
liabilities
$’000
$’000
$’000
$’000
$’000
Deferred tax asset (liability) comprises
temporary differences attributable to:
Amounts recognised in profit or loss:
Intangible assets
Unearned interest
Accrued expenses
Employee benefits
Transaction costs on share issues
Legal and consulting fees
Plant & equipment
Unused tax losses
Tax liabilities (assets) before set-off
Set off deferred tax assets/liabilities
Net tax liabilities (assets)
MOVEMENTS 2015
Opening balance
Charged to profit or loss (note 9)
Closing balance
(2,832)
(1)
232
107
133
82
15
2,264
-
-
-
-
-
-
-
(22)
1
49
(14)
-
-
(15)
(73)
(74)
-
-
-
-
74
-
-
-
74
-
-
281
93
207
82
-
2,191
(2,854)
-
-
-
-
-
-
-
2,854
(2,854)
(2,854)
2,854
-
-
note 27. non-current liabilities – eMPloyee benefits
Annual and long service leave
Consolidated
2015
$’000
33
2014
$’000
16
66 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 28. equity – issueD caPital
Ordinary shares – fully paid
368,765,739 241,670,775
27,717
17,787
2015
Shares
2014
Shares
2015
$’000
2014
$’000
Consolidated
Movements in ordinary share capital
Details
Balance
Shares issued as a result
of the Employee Tax Exempt
Date
Shares
Issue Price
1 July 2013
143,793,514
$’000
13,149
Share Plan
5 November 2013
163,504
$0.10
16
Shares issued in accordance
with share purchase plan
8 November 2013
5,563,757
Shares issued through placement
14 March 2014
37,032,755
$0.07
$0.05
Shares issued as approved
by the annual general meeting
Capital Raising Costs
Balance
8 May 2014
55,117,245
$0.05
-
-
30 June 2014
241,670,775
Shares issued through private placement
4 September 2014
2,000,000
Shares issued through private placement
8 October 2014
18,685,714
Shares issued to Employees
19 December 2014
241,965
Shares issued through private placement
19 December 2014
37,500,000
$0.05
$0.07
$0.06
$0.06
-
-
412
1,852
2,756
(398)
17,787
100
1,308
15
2,250
(141)
23 February 2015
1,666,667
$0.06
100
31 March 2015
7,373,053
$0.14
1,000
Capital Raising Costs
Shares issued as approved
by the general meeting
Shares issued as approved
by the general meeting
Shares issued as approved
by the general meeting
Shares issued through private placement
15 May 2015
1,246,537
Convertible notes converted to equity
20 May 2015
50,931,885
Balance
30 June 2015 368,765,739
11 May 2015
7,449,143
$0.14
$0.14
$0.08
1,050
176
4,072
27,717
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company
in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par
value and the Company does not have a limited amount of authorised capital. All ordinary shares rank equally
with regard to the Consolidated Entity’s residual assets.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Annual Report 2015 CleanTeQ | 67
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 28. equity – issueD caPital continued
Capital risk management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. The Board of Directors monitors the return on capital, which
the Consolidated Entity defines as net operating income divided by total shareholders’ equity. The Board of
Directors also monitors the level of dividends likely to be proposed and paid to ordinary shareholders. The Board’s
target is for employees of the Consolidated Entity, excluding the founders, to hold 10 percent of the Company’s
ordinary shares in due course. At present assuming that all outstanding share options vest and / or are exercised,
significantly less than this amount of the shares would be held by the Consolidated Entity’s employees.
The Board ultimately seeks to maintain a balance between the higher returns that might be possible with higher
levels of borrowings, new share issues and the issuing of convertible notes and the advantages and security
afforded by a sound capital position. The Consolidated Entity may increase its debt levels if and when required in
order to achieve increased returns for shareholders. Neither the Company nor any of its subsidiaries are subject
to externally imposed capital requirements.
The capital risk management policy remains unchanged from the 30 June 2014 Annual Report.
note 29. equity – reserves
Share based payments reserve
Consolidated
2015
$’000
1,063
1,063
2014
$’000
198
198
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Foreign
currency
Share
based
payments
Change
in Owner
Reserve
Total
$’000
$’000
$’000
$’000
-
-
-
-
-
-
-
-
-
91
(50)
157
198
-
(158)
-
-
-
-
1,120
-
91
(50)
157
198
1,120
(158)
-
(1,120)
(1,120)
1,023
1,063
-
-
1,023
1,063
CONSOLIDATED
Balance at 1 July 2013
Lapsed options
Share based payments
Balance at 30 June 2014
Gain on sale transactions with equity holders
Lapsed options
Transfer to accumulated losses
Share based payments
Balance as at 30 June 2015
68 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 30. equity – accuMulateD losses
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the year
Transfer from change of ownership reserve
Transfer from share based payments reserve
Consolidated
2015
$’000
(6,905)
(8,225)
1,120
-
2014
$’000
(2,045)
(4,910)
-
50
Accumulated losses at the end of the financial year
(14,010)
(6,905)
note 31. equity – DiviDenDs
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
Consolidated
2015
$’000
-
2014
$’000
-
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
•
•
•
franking credits that will arise from the payment of the amount of the provision for income tax at the
reporting date;
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare
dividends. In accordance with the tax consolidation legislation, the Company as the head Entity in the tax
Consolidated Entity has assumed the benefit of franking credits of $ nil (2014: $nil).
Annual Report 2015 CleanTeQ | 69
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 32. financial instruMents
Financial risk management objectives
The Consolidated Entity’s activities expose it to
a variety of financial risks: market risk (including
foreign currency risk, price risk and interest rate
risk), credit risk and liquidity risk. The Consolidated
Entity’s overall risk management program focuses
on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the
financial performance of the Consolidated Entity.
The Consolidated Entity uses different methods to
measure different types of risk to which it is exposed.
These methods include sensitivity analysis in the case
of interest rate, foreign exchange and other price
risks, ageing analysis for credit risk and beta analysis
in respect of investment portfolios to determine
market risk.
Risk management is carried out by senior finance
executives under policies approved by the Board of
Directors. These policies include identification and
analysis of the risk exposure of the Consolidated Entity
and appropriate procedures, controls and risk limits.
Finance identifies, evaluates and hedges financial risks
within the Consolidated Entity’s operating units.
The Company’s finance department reports to the
Board on a monthly basis.
Risk management policies and systems are reviewed
regularly to reflect changes in market conditions and
the Consolidated Entity’s activities. The Consolidated
Entity, through their experience and management
standards and procedures, aim to develop a disciplined
and constructive control environment in which all
employees understand their roles and obligations.
The Board oversees how management monitors
compliance with the Consolidated Entity’s risk
management policies and procedures and reviews
the adequacy of the risk management framework in
relation to the risks faced by the Consolidated Entity.
The Board is assisted in its oversight role by the
Audit Committee and executive management team.
Executive management undertakes both regular and
ad hoc reviews of risk management controls and
procedures, the results of which are reported to the
Board and the Audit Committee.
Market risk
Market risk is the risk that changes in market prices
– such as foreign exchange rates, interest rates and
equity prices – will affect the Group’s income or the
value of its holdings of financial instruments.
The objective of market risk management is to
manage and control market risk exposures within
acceptable parameters, while optimising the return.
The Consolidated Entity has exposure to the following
risks from their use of financial instruments:
Foreign currency risk
• Market risk;
• Credit risk; and
• Liquidity risk.
This note presents information about the Consolidated
Entity’s exposure to each of the above risks, their
objectives, policies and processes for measuring and
managing risk and the management of capital. Further
quantitative disclosures are included throughout this
financial report.
The Board of Directors has overall responsibility
for the establishment and oversight of the risk
management framework. The Board is responsible for
developing and monitoring risk management policies.
Risk management policies are established to identify
and analyse the risks faced by the Consolidated
Entity, to set appropriate risk limits and controls
and to monitor risks and adherence to limits.
The Consolidated Entity undertakes certain
transactions denominated in foreign currency and
is exposed to foreign currency risk through foreign
exchange rate fluctuations. There is no current
material exposure to foreign exchange risk.
Market price risk
The Consolidated Entity is not exposed to any
significant price risk.
Interest rate risk
The Consolidated Entity currently has no significant
debt subject to variable interest rates. Accordingly the
Consolidated Entity has limited exposure to interest
rate movements. The Consolidated Entity has a term
deposit facility used as security for bank guarantees.
All borrowings are at fixed rates of interest and
therefore not subject to interest rate risk.
70 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
Fair value sensitivity analysis for fixed-rate
instruments
The Consolidated Entity does not account for any
fixed-rate financial assets or liabilities at fair value
through profit or loss, and the Consolidated Entity
does not designate derivatives (interest rate swaps)
as hedging instruments under a fair value hedge
accounting model. Therefore a change in interest rates
at the reporting date would not affect profit or loss.
A change of 100 basis points in interest rates would
have increased or decreased equity by approximately
nil after tax (2014: $37,000).
Credit risk
Credit risk is the risk of financial loss to the
Consolidated Entity if a customer or counterparty to
a financial instrument fails to meet its contractual
obligations and arises principally from the
Consolidated Entity’s receivables from customers.
The carrying amount of financial assets represents the
maximum credit exposure.
Trade and other receivables
The Consolidated Entity’s exposure to credit risk
relating to trade receivables of $36,000 (2014:
$613,000) is influenced mainly by the individual
characteristics of each customer. The demographics
of the Consolidated Entity’s customer base, including
the default risk of the industry and country, in which
customers operate, has less of an influence on
credit risk. Geographically there is an Australian
concentration of credit risk. The Consolidated Entity
is exposed to significant concentrations of credit risk
in relation to project revenue, due to the high values
of progress invoicing on a number of projects. The
Board has established a credit policy under which
each new significant customer is analysed individually
for creditworthiness before the Consolidated Entity’s
standard payment and delivery terms and conditions
are offered. Each new contract of works to be
undertaken by the Consolidated Entity, which is greater
than a predetermined level, must be approved by the
Board prior to the contract being signed.
Many of the Consolidated Entity’s customers are
large multinationals and government organisations
who have been transacting with the Consolidated
Entity for a number of years. Losses relating to
recovery of amounts owing to the Consolidated Entity
have occurred very infrequently since the inception
of the business. The majority of sales transactions
undertaken by the Consolidated Entity require the
customer to make payments as contract milestones
are achieved. Failure of the customer to make
payment by the due date will result in the further
supply of goods and services being put on hold until
such time as payment is received by the Consolidated
Entity. In monitoring customer credit risk, customers
are grouped according to their credit characteristics,
including whether they are an individual or legal Entity,
whether they are a wholesale, retail or end-user
customer, geographic location, industry, aging profile,
maturity and existence of previous financial difficulties.
The Consolidated Entity’s trade and other receivables
relate mainly to the Group’s wholesale customers
who are predominantly made up of public companies
and government bodies. Customers that are graded
as “high risk” are placed on a restricted customer list,
and future sales are made on a prepayment basis with
approval of executive management. From inception to
the date of this report, the Consolidated Entity has only
ever had two minor trade bad debts. Refer to note 12
for debtors aging analysis.
Guarantees
The Consolidated Entity’s policy is to provide financial
guarantees only to wholly-owned subsidiaries. Details
of outstanding guarantees are provided in note 24.
The Consolidated Entity provides guarantees for
work performed on each project contracts. These
guarantees are put in place at the commencement of
the contract and remain in place until approximately
12 months after the completion of the contract.
Liquidity risk
Liquidity risk is the risk that the Consolidated Entity
will not be able to meet its obligations associated
with its financial liabilities as they fall due. The
Consolidated Entity’s approach to managing liquidity is
to ensure, as far as possible, that it will have sufficient
liquidity to meet its liabilities when they are due,
under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the
Consolidated Entity’s reputation.
The Consolidated Entity adopts milestone and
progress invoicing, which assists it in monitoring cash
flow requirements and optimising its cash return
on investments. Typically the Consolidated Entity
ensures that it has sufficient cash on demand to meet
expected operational expenses for a period of 90
days, including the servicing of financial obligations;
this excludes the potential impact of extreme
circumstances that cannot reasonably be predicted,
such as natural disasters. In addition, the Consolidated
Entity maintains the following lines of credit:
Annual Report 2015 CleanTeQ | 71
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 32. financial instruMents (continued)
Financing arrangements
Unused borrowing facilities at the reporting date:
Guarantees against work in progress
Exposure to liquidity risk
Consolidated
2015
$’000
-
2014
$’000
124
The following tables detail the Consolidated Entity’s remaining contractual maturity for its financial liabilities at the
reporting date. The amounts are gross and undiscounted, and include estimated interest payments
Consolidated - 2015
Contractual cash flows
Carrying
amount
1 year or
less
Between
1 and 2
years
Between
2 and 5
years
Over 5
years
Total
$’000
$’000
$’000
$’000
$’000
$’000
NON-DERIVATIVES
Non-interest bearing
Trade payables
Other payables
Notes payable
Interest-bearing – fixed rate
Deferred consideration
payable
Convertible notes payable
Hire purchase
282
325
2,490
282
325
-
1,171
1,203
-
-
-
-
Total non-derivatives
4,268
1,810
-
-
-
-
-
-
-
-
-
3,000
-
-
-
3,000
-
-
-
-
-
-
-
282
325
3,000
1,203
-
-
4,810
72 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
Consolidated - 2014
Contractual cash flows
Carrying
amount
1 year or
less
Between
1 and 2
years
Between
2 and 5
years
Over 5
years
Total
$’000
$’000
$’000
$’000
$’000
$’000
NON-DERIVATIVES
Non-interest bearing
Trade payables
Other payables
Deferred consideration
payable
Interest-bearing – fixed rate
Other loans
591
295
591
295
2,000
2,000
-
-
-
-
-
-
Convertible notes payable
Hire purchase
4,072
30
407
25
2,720
1,767
8
-
Total non-derivatives
6,988
3,318
2,728
1,767
-
-
-
-
-
-
591
295
2,000
4,894
33
7,813
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Fair value of financial instruments
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest rate method, less any provision for impairment. Trade and other payables are measured
at fair value on recognition and at amortised cost using the effective interest rate method subsequently. Due to
their short term nature neither trade and other receivables or trade and other payables are discounted.
Borrowings are recognised at fair value of consideration received, net of transaction costs, and subsequently
measured at amortised cost using the effective interest rate method. In estimating amortised cost the
Consolidated Entity takes into account its borrowing capacity and the source of its borrowings. The categorisation
of the borrowings based on the fair value hierarchy is detailed in note 33.
note 33. f air value MeasureMent
Fair value hierarchy
The following tables show the carrying amounts and fair values of the Consolidated Entity’s financial assets and
financial liabilities, measured or disclosed at fair value, using a three level hierarchy, being:
•
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Entity can
access at the measurement date
• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly
• Level 3: Unobservable inputs for the asset or liability
Annual Report 2015 CleanTeQ | 73
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 33. f air value MeasureMent (continued)
Consolidated – 2015
Fair value
FINANCIAL ASSETS
NOT MEASURED AT FAIR VALUE
Cash and cash equivalents
Trade and other receivables
Other financial assets
FINANCIAL LIABILITIES
NOT MEASURED AT FAIR VALUE
Trade and other payables
Other borrowings
Notes payable
Consolidated – 2014
FINANCIAL ASSETS
NOT MEASURED AT FAIR VALUE
Cash and cash equivalents
Trade and other receivables
Other financial assets
FINANCIAL LIABILITIES
NOT MEASURED AT FAIR VALUE
Trade and other payables
Other borrowings
Convertible Notes*
Carrying
amount
Level 1
Level 2
Level 3
Total
$’000
$’000
$’000
$’000
$’000
3,313
523
353
4,189
(1,778)
-
(2,490)
(4,268)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,000)
(3,000)
Fair value
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,000)
(3,000)
Carrying
amount
Level 1
Level 2
Level 3
Total
$’000
$’000
$’000
$’000
$’000
2,540
788
307
3,635
(2,866)
(38)
(4,072)
(6,976)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,661)
(4,661)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,661)
(4,661)
There were no transfers between levels during the financial year.
The tables do not include fair value information for financial assets and financial liabilities not measured at fair
value if the carrying amount is a reasonable approximation of fair value.
74 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
Financial instruments not measured at fair value – valuation technique
Type
Convertible notes
Promissory notes
Valuation technique
Significant unobservable inputs
Discounted cash flows
Discounted cash flows
Not applicable
Not applicable
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying
amounts of cash and cash equivalents, trade and other receivables and trade and other payables are assumed
to approximate their fair values due to their short-term nature. The fair value of financial liabilities is estimated
by discounting the remaining contractual maturities at the current market interest rate that is available for similar
financial instruments.
Compliance with the Consolidated Entity’s standards is supported by a programme of periodic reviews
undertaken by management.
* These convertible notes were converted to equity in May 2015. Refer to note 24 for details.
note 34. key ManageMent Personnel Disclosures
Directors
The following persons were directors of Clean TeQ Holdings Limited during the financial year:
• Sam Riggall (Chairman and Chief Executive Officer)
• Peter Voigt (Executive Director)
• Roger Harley (Independent Non-Executive Director)
•
Ian Knight (Independent Non-Executive Director)
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major
activities of the Consolidated Entity, directly or indirectly, during the financial year:
• Cory Williams Chief Executive Officer – resigned 18 November 2014
• Tony Panther Chief Financial Officer – resigned 31 January 2015
• Ben Stockdale Chief Financial Officer – appointed 15 January 2015
Compensation
The aggregate compensation made to directors and other members of key management personnel of the
Consolidated Entity is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Termination benefits
Share-based payments
Consolidated
2015
$
2014
$
802,815
973,307
79,731
5,036
264,583
81,151
11,421
50,000
678,971
156,952
1,831,136
1,272,831
Annual Report 2015 CleanTeQ | 75
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 34. key ManageMent Personnel Disclosures continued
The key management personnel receive no compensation in relation to the management of the Company.
Key management personnel are compensated for management of the Consolidated Entity.
Information regarding individual directors and executives’ compensation and some equity instruments
disclosures as permitted by Corporations Regulations 2M.3.03 are provided in the Remuneration Report section
of the Directors’ Report.
Apart from the details disclosed in this note, note 24 or note 38, no director has entered into a material contract
with the Consolidated Entity since the end of the previous financial year and there were no material contracts
involving directors’ interests existing at the year end.
note 35. reMuneration of auDitors
During the financial year the following fees were paid or payable for services provided by KPMG, the auditor of
the Company:
AUDIT SERVICES – KPMG
Audit or review of the financial statements
Audit-related services
OTHER SERVICES – KPMG
Advisory services
Taxation services
Consolidated
2015
$
2014
$
126,493
-
96,300
28,675
126,493
124,975
-
97,732
97,732
-
23,500
23,500
224,225
148,475
note 36. contingent liabilities
The Consolidated Entity has a current contingent liability, incurred in the current financial year ended 30 June
2015, to pay a 2.5% gross revenue royalty on output mined from the Syerston Project. This royalty is payable to
Ivanhoe Mines, and is payable by Scandium 21 Pty Ltd, a company within the consolidated group. This royalty
was part of the consideration paid for the acquisition of the Syerston Project from Ivanhoe Mines, on 31 March
2015. For the previous year ended 30 June 2014, the Consolidated Entity had no contingent liabilities.
76 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
Consolidated
2015
$’000
2014
$’000
-
-
-
-
-
-
-
-
25
8
33
(3)
30
22
8
30
212
636
-
848
216
789
35
1,040
note 37. coMMitMents
HIRE PURCHASES
Committed at the reporting date and recognised as liabilities, payable:
Within one year
One to five years
Total commitment
Less: Future finance charges
Net commitment recognised as liabilities
Representing:
Current hire purchase liability (note 21)
Non- current hire purchase liability (note 24)
OPERATING LEASES (NON-CANCELLABLE)
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
More than five years
note 38. relateD P arty transactions
Parent Entity
CleanTeQ Holdings Limited is the Parent Entity.
Subsidiaries
Interests in subsidiaries are set out in note 41.
Key management personnel
Disclosures relating to key management personnel are set out in note 34 and the remuneration report in the
directors’ report.
Transactions with related parties
The following transactions occurred with related parties:
Consulting fees paid to an entity associated with Ian Knight
These consulting fees were entered into on an arm’s length basis.
Consolidated
2015
$
6,421
2014
$
-
Annual Report 2015 CleanTeQ | 77
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 38. relateD P arty transactions continued
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Consolidated
2015
$
2014
$
CURRENT BORROWINGS
Convertible notes issued to Mr Sam Riggall
-
500,000
Mr Sam Riggall is the Chairman, Executive Director and Interim Chief Executive Officer of the Company. During
the financial year, the convertible notes previously issued to him, were converted to equity at his request. See
Note 24 for further details.
note 39. Parent entity inforMation
Set out below is the supplementary information about the Parent Entity.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Profit/(loss) after income tax
Total comprehensive income/(loss)
STATEMENT OF FINANCIAL POSITION
Total current assets
Total assets
Total current liabilities
Total liabilities
EQUITy
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
2015
$’000
(2,095)
(2,095)
2015
$’000
Parent
2014
$’000
(995)
(995)
Parent
2014
$’000
-
33
25,324
18,269
-
44
2,471
4,116
27,717
17,787
1,063
(5,927)
22,853
198
(3,832)
14,153
Guarantees entered into by the Parent Entity in relation to the debts of its subsidiaries
The Parent Entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2015 and
30 June 2014, other than the cross guarantee referred to elsewhere in these financial statements.
78 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
Contingent liabilities
The Parent Entity had no contingent liabilities as at 30 June 2015 and 30 June 2014.
Capital commitments - Property, plant and equipment
The Parent Entity had no capital commitments for property, plant and equipment at as 30 June 2015 and
30 June 2014, or since the end of the financial year.
Significant accounting policies
The accounting policies of the Parent Entity are consistent with those of the Consolidated Entity, as disclosed
in note 2, except for the following:
•
•
Investments in subsidiaries are accounted for at cost, less any impairment, in the Parent Entity.
Investments in associates are accounted for at cost, less any impairment, in the Parent Entity.
• Dividends received from subsidiaries are recognised as other income by the Parent Entity and its receipt
may be an indicator of an impairment of the investment.
note 40. business coMbinations
(i) Australian Business of Aromatrix Technologies (Hong Kong) Ltd
On 1 December 2014, CleanTeQ Air Pty Ltd (‘Air’), a controlled Entity of the Consolidated Entity, completed
the acquisition of all of the assets of the Aromatrix Australia air treatment business of Aromatrix Technologies
(Hong Kong) Ltd (ATHK). Total consideration for the acquisition was $1,500,000 and was settled by an issue of
Air shares with a value of $1,500,000 by Air to ATHK. Air acquired the Australian business of ATHK and operated
as a single entity/CGU as from 1 December 2014, hence revenues and earnings contributed by the Australian
business of ATHK to the Consolidated Entity from that date cannot be separately determined.
During this financial year, the Aromatrix business was successfully integrated with Air’s existing air treatment
business. The merger was expected bring together the best of both companies’ capabilities and create a
business of significant scale in Australia whilst providing the platform for growth through Asia and was expected
to provide access to procurement and fabrication channels that will allow the company to continue to build on its
reputation for high quality products and delivery whilst providing the necessary competitiveness on price that is
required to compete in S.E. Asian markets.
Clean TeQ Air Pty Ltd changed its name to Clean TeQ Aromatrix Pty Ltd during January 2015.
Fair value of identifiable assets
Goodwill arising on acquisition
Total fair value of net assets acquired
PURCHASE CONSIDERATION:
Cost of issuance of shares
Consideration paid
2015
$’000
-
1,500
1,500
1,500
1,500
As at 30 June 2015, Clean TeQ Holdings had disposed of its interest in Clean TeQ Aromatrix Pty Ltd and had lost
control of the subsidiary. Refer to Note 10. Discontinued operations for further details.
Annual Report 2015 CleanTeQ | 79
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 40. business coMbinations continued
(ii) Associated Water Pty Ltd
In the prior financial year, the Consolidated Entity acquired the remaining 50% of the shares and voting rights of
Associated Water Pty Ltd (AW) from Nippon Gas Co Ltd (NGC) for the total consideration of $2,000,000, thereby
gaining control of AW. Previously the consolidated entity had a 50% shareholding in AW and had operated AW
as a joint venture with NGC in order to develop, test and commercialise coal seam gas (CSG) water treatment
technology. The consolidated entity acquired the remaining shareholding of AW in order to control the marketing
and licensing of AW’s CSG water treatment technology. Accordingly, as from acquisition date, AW became a
wholly-owned subsidiary of Clean TeQ Limited and therefore part of the consolidated entity. AW contributed
revenues of $39 and loss after tax of $46,770 to the consolidated entity for the period from 15 January 2014 to
30 June 2014. If the acquisition occurred on 1 July 2013, the full year contributions would have been revenues
of $8,561 and loss after tax of $628,206, of which the Consolidated Entity actually recognised $291,000 as its
equity-accounted share of AW’s pre-acquisition loss.
Identifiable assets acquired and liabilities assumed
The following table summarises the recognised amounts of assets acquired and liabilities assumed at the
acquisition date:
Cash and cash equivalents
Prepayments
Rental bond
Other current assets (receivable from Clean TeQ Ltd)
Plant and equipment
Intellectual property – reacquired licence rights
Trade and other payables
Total identifiable net assets acquired
Fair value
$’000
9
4
10
601
567
3,014
(205)
4,000
80 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 41. interests in subsiDiaries
The Consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name
Principal place of business/
Country of incorporation
Ownership
interest
CleanTeq Limited
CleanTeQ Metals Pty Ltd
(incorporated 28 August 2014)
Clean TeQ Global Water Solutions Pty
Ltd (incorporated 20 November 2014)
Clean Teq Air Pty Ltd*
Associated Water Pty Ltd
LiXiR Functional Foods Pty Ltd
Clean World Japan
Australia
Australia
Australia
Australia
Australia
Australia
Japan
Scandium Holding Company Pty Ltd**
Australia
Scandium 21 Pty Ltd**
Syerston Scandium Pty Ltd**
Uranium Development Pty Ltd**
Australia
Australia
Australia
2015
%
2014
%
100%
100%
100%
100%
-%
100%
100%
100%
100%
100%
100%
100%
-%
-%
100%
100%
100%
100%
-%
-%
-%
-%
* This company changed its name to Clean Teq Aromatrix Pty Ltd in January 2015. The whole shareholding in the company was sold as
at 30 June 2015. Refer note 10 for details.
** These companies were acquired as part of the acquisition of the Syerston Project from a subsidiary of Ivanhoe Mines Ltd effective
31 March 2015.
note 42. DeeD of cross guarantee
The following entities are or were party to a deed of cross guarantee under which each company guarantees the
debts of the others:
• Clean TeQ Holdings Limited
• Clean TeQ Limited
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare
financial statements and directors’ report under Class Order 98/1418 (as amended) issued by the Australian
Securities and Investments Commission (‘ASIC’).
The above companies represent a ‘Closed Group’ for the purposes of the Class Order, and as there are no other
parties to the Deed of Cross Guarantee that are controlled by Clean TeQ Holdings Limited, they also represent
the ‘Extended Closed Group’.
Annual Report 2015 CleanTeQ | 81
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 42. DeeD of cross guarantee continued
Set out below is a Consolidated statement of profit or loss and other comprehensive income and statement of
financial position of the Closed Group.
Statement of profit or loss and other comprehensive income
Revenue
Share of losses of joint ventures accounted for using the equity method
Other income
Profit on intra group disposal
Changes in finished goods and inventory write downs
Raw materials and other direct costs
Employee benefits expenses
Impairment of investment in subsidiary
Depreciation and amortisation expenses
Legal and professional expenses
Occupancy expenses
Marketing expenses
Other expenses
Finance costs
Loss before income tax (expense)/benefit
Income tax (expense)/benefit
Loss after income tax (expense)/benefit
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Equity – retained profits
Retained profits/(accumulated losses) at the beginning of the financial year
Loss after income tax (expense)/benefit
Transfer to Accumulated Losses
Transfer from options reserve
2015
$’000
777
-
-
338
(85)
(567)
(2,837)
(3,749)
(697)
(628)
(296)
(406)
(543)
(715)
2014
$’000
6,013
(291)
407
-
(447)
(3,988)
(3,428)
-
(566)
(588)
(285)
(406)
(520)
(464)
(9,408)
(4,563)
(23)
(21)
(9,431)
(4,584)
-
-
(9,431)
(4,584)
2015
$’000
(6,389)
(9,431)
1,120
-
2014
$’000
(1,855)
(4,584)
-
50
Accumulated losses at the end of the financial year
(14,700)
(6,389)
82 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
Statement of financial position
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivable
Other financial assets
NON-CURRENT ASSETS
Receivables
Other financial assets
Plant and equipment
Intangible assets
Investment in subsidiary company
Other
Total assets
CURRENT LIABILITIES
Trade and other payables
Borrowings
Employee benefits
Deferred revenue
NON-CURRENT LIABILITIES
Deferred revenue
Borrowings
Notes payable
Employee benefits
Total liabilities
Net assets
EQUITy
Issued capital
Reserves
Accumulated losses
Total equity
2015
$’000
2014
$’000
3,283
2,528
414
96
963
25
797
939
463
27
4,781
4,754
2,973
329
107
-
280
294
10,600
10,560
251
248
14,508
19,289
4,000
2
15,136
19,890
1,774
2,861
-
276
46
22
339
339
2,096
3,561
590
-
2,490
33
3,113
5,209
637
4,080
-
16
4,733
8,294
14,080
11,596
27,717
17,787
1,063
(14,700)
14,080
198
(6,389)
11,596
Annual Report 2015 CleanTeQ | 83
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 43. events after the rePorting PerioD
Effective 1 July 2015 Sam Riggall, Executive Chairman and Interim Chief Executive Officer, was appointed
Chairman and Chief Executive Officer.
In early July 2015 the Consolidated Entity received a further $455,000 cash rebate from the Australian Tax Office
for eligible research and development expenditure in the 2014 financial year. The Company anticipates that a
significant proportion of the 2015 and 2016 financial years’ expenditure, including a large proportion of Syerston
testwork and feasibility studies, will also be eligible for the refundable tax offset.
On 27 July 2015 the Company launched a non-renounceable one for ten entitlement offer at a price of $0.18
(18 cents) per share (‘Entitlement Offer’) to raise $6,638,000 before costs of the Entitlement Offer.
The Entitlement Offer is fully underwritten by BW Equities Pty Ltd.
Apart from the matters referred to above, no other matter or circumstance has arisen since 30 June 2015 that
has significantly affected, or may significantly affect the Consolidated Entity’s operations, the results of those
operations, or the Consolidated Entity’s state of affairs in future financial years.
note 44. reconciliation cash useD in oPerating activities
Loss after income tax expense for the year
Adjustments for:
Depreciation, amortisation and impairment
Net loss on disposal and write-off of non-current assets
Share-based payments
Gain on sale of discontinued operation
Revaluation of investments
Write down of stock on hand
Share of associate losses
Non-cash finance costs
Change in operating assets and liabilities:
Note
Consolidated
2015
$’000
2014
$’000
(8,225)
(4,910)
8
8
10
7
12
6
3,975
-
880
(338)
-
85
-
350
705
30
173
-
(407)
447
291
-
Decrease/(increase) in trade and other receivables
(1,724)
2,953
Decrease in inventories
Decrease/(increase) in income tax refund due
(Increase)/decrease in accrued revenue
Increase/(decrease) in trade and other payables
Increase/(decrease) in employee benefits
Increase/(decrease) in other operating liabilities
Increase/(decrease) in tax payable (discontinued operation)
103
-
482
929
102
-
97
34
220
205
(3,127)
67
128
-
Net cash used in operating activities
(3,284)
(3,191)
84 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 45. earnings Per share
EARNINGS PER SHARE FOR LOSS FROM CONTINUING OPERATIONS
Loss after income tax attributable to the owners of Clean TeQ Holdings Limited
(9,155)
(6,193)
Consolidated
2015
$’000
2014
$’000
Weighted average number of ordinary shares used in calculating
basic earnings per share
Weighted average number of ordinary shares used in calculating
diluted earnings per share
Basic earnings per share
Diluted earnings per share
Number
Number
286,131,872
166,578,551
286,131,872
166,578,551
Cents
(3.20)
(3.20)
Cents
(3.72)
(3.72)
Consolidated
2015
$’000
2014
$’000
EARNINGS PER SHARE FOR PROFIT FROM DISCONTINUED OPERATIONS
Profit after income tax attributable to the owners of Clean TeQ Holdings Limited
930
1,283
Weighted average number of ordinary shares used in calculating
basic earnings per share
Weighted average number of ordinary shares used in calculating
diluted earnings per share
Basic earnings per share
Diluted earnings per share
Number
Number
286,131,872 166,578,551
286,131,872
166,578,551
Cents
Cents
0.33
0.33
0.77
0.77
Consolidated
2015
$’000
2014
$’000
EARNINGS PER SHARE FOR LOSS
Loss after income tax attributable to the owners of CleanTeQ Holdings Limited
(8,225)
(4,910)
Weighted average number of ordinary shares used in calculating
basic earnings per share
Weighted average number of ordinary shares used in calculating
diluted earnings per share
Number
Number
286,131,872 166,578,551
286,131,872
166,578,551
Annual Report 2015 CleanTeQ | 85
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
note 45. earnings Per share continued
Basic earnings per share
Diluted earnings per share
Cents
(2.87)
(2.87)
Cents
(2.95)
(2.95)
The options and convertible notes have been classified as potential ordinary shares and are included in the
determination of diluted earnings per share, except where the potential ordinary shares are anti-dilutive.
The options and convertible notes on issue throughout the current financial year are not dilutive in effect, as the
Consolidated Entity recorded a net loss in the year.
note 46. share-baseD P ayMents
On 24 September 2007 the Company introduced a share option plan for employees, directors and service
providers of the Consolidated Entity (‘the Plan‘). The Plan entitles key management personnel, service providers
and employees to receive shares and options in the Company.
Set out below are summaries of options granted under the Plan:
2015
Grant date
Expiry date
Exercise
price
Balance at
the start
of the year
Granted
Exercised
01/07/2010
01/07/2014**
01/07/2010
01/07/2015
$0.31
$0.34
10,000
10,000
30/06/2011
30/06/2015*
$0.25
500,000
30/06/2011
30/11/2018***
$0.10
2,000,000
30/06/2011
30/06/2016
$0.40
500,000
15/11/2012
30/11/2015
$0.19
1,500,000
01/12/2013
30/11/2018**
$0.10
4,000,000
-
-
-
-
-
-
-
19/12/2014
19/06/2017
19/12/2014
19/06/2017
25/02/2015
25/02/2018
01/03/2015
01/03/2018
$0.12
$0.15
$0.16
$0.15
-
-
-
-
2,000,000
2,000,000
8,000,000
6,000,000
8,520,000 18,000,000
Weighted average exercise price:
$0.1428
$0.1489
* Options expired during the year
** Options lapsed as employee ceased employment
*** Options forfeited during the year
-
-
-
-
-
-
-
-
-
-
-
-
-
Expired/
forfeited/
other
Balance at
the end of
the year
(10,000)
-
-
10,000
(500,000)
(2,000,000)
-
-
-
-
500,000
1,500,000
(4,000,000)
-
-
-
-
-
2,000,000
2,000,000
8,000,000
6,000,000
(6,510,000)
20,010,000
$0.36
$0.1588
The weighted average number of years for share options issued under the Plan is 3.0 years (2014: 3.54 years)
86 | CleanTeQ Annual Report 2015
notes to the financial stateMents
For the yeAr enDeD 30 June 2015
continued
For the options granted during the current financial year, the Binomial pricing model was used to value the
options. The valuation model inputs used to determine the fair value at the grant date, are as follows:
Grant date Expiry date
19/12/2014
19/06/2017
19/12/2014
19/06/2017
25/02/2015
25/02/2018
01/03/2015
01/03/2018
Share
price
at grant
date
$0.06
$0.06
$0.13
$0.11
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest
rate
Fair value
at grant
date
$0.12
$0.15
$0.16
$0.15
100.00%
100.00%
102.36%
102.63%
-%
-%
-%
-%
6.00%
6.00%
2.06%
1.80%
$0.026
$0.024
$0.073
$0.067
Annual Report 2015 CleanTeQ | 87
Directors’ DeclArA tion
In the directors’ opinion:
•
•
•
•
•
the attached Consolidated financial statements and notes thereto, and the Remuneration report in
the Directors’ reports, comply with the Corporations Act 2001, the Australian Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached Consolidated financial statements and notes thereto and the Remuneration report in the
Directors’ reports, comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in note 2(c) to the financial statements;
the attached Consolidated financial statements and notes thereto and the Remuneration report in the
Directors’ reports, give a true and fair view of the Consolidated Entity’s financial position as at 30 June 2015
and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable; and
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended
Closed Group will be able to meet any obligations or liabilities to which they are, or may become, subject by
virtue of the deed of cross guarantee described in note 42 to the financial statements.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Sam Riggall
Chairman & Chief Executive Office
25 August 2015
Melbourne
88 | CleanTeQ Annual Report 2015
inDepenDent AuDitor’s report
Annual Report 2015 CleanTeQ | 89
inDePenDent auDitor’s rePort
continued
90 | CleanTeQ Annual Report 2015
inDePenDent auDitor’s rePort
continued
shAreholDer inForMA tion
The information below is current as at 31 July 2015.
Distribution of equity securities
Analysis of number of equity security holders by size of holding:
Number
of holders
of ordinary
shares
Number
of holders
of options
over ordinary
shares
Number
of holders
of convertible
notes
36
323
433
1,450
359
2,601
105
-
-
-
1
5
6
-
-
-
-
-
-
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
The number of shareholders holding less than
a marketable parcel of ordinary shares:
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary Fully Paid Shares
Shares Held
% of total
shares issued
MR ROBERT MARTIN FRIEDLAND
THIERVILLE PTy LTD
Continue reading text version or see original annual report in PDF format above