CCP Technologies Limited
Appendix 4E
30 June 2018
CCP Technologies Limited
Appendix 4E
Financial year ended 30 June 2018
Name of entity:
ABN:
Financial year ended:
Previous period:
Results for announcement to the market
CCP Technologies Limited
58 009 213 754
30 June 2018
30 June 2017
$
Revenue for ordinary activities
Loss from ordinary activities after tax attributable to members
Net loss for the period attributable to members
Up
Down
Down
76.9% to
24.6% to
24.6% to
299,066
(2,833,837)
(2,833,837)
Net tangible assets per security
Net tangible asset backing (per share)
Explanation of results
30 June
2018
Cents
0.10
30 June
2017
Cents
0.57
An explanation of the key financial elements contributing to the revenue and result above can be found in the
review of operations included within the directors' report.
Distributions
No dividends have been paid or declared by the company for the current financial year. No dividends were paid
for the previous financial year.
Changes in controlled entities
There have been no changes in controlled entities during the financial year ended 30 June 2018.
Other information required by Listing Rule 4.3A
a. Details of individual and total dividends or distributions and dividend or distribution payments:
b. Details of any dividend or distribution reinvestment plans:
c. Details of associates and joint venture entities:
d. Other information
N/A
N/A
N/A
N/A
Audit
The financial statements have been audited by the group's independent auditor without any modified opinion or
disclaimer however have included a paragraph regarding a material uncertainty in relation to going concern.
This Appendix 4E should be read in conjunction with the CCP Technologies Limited financial report for the
financial year ended 30 June 2018.
1
CCP Technologies Limited
ABN 58 009 213 754
Annual report
for the year ended 30 June 2018
CCP Technologies Limited ABN 58 009 213 754
Annual report - 30 June 2018
Contents
Corporate directory
Chairman's letter
Company highlights
Chief Executive Officer's report
Directors' report
Financial statements
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor's report to the members
Shareholder information
Page
1
2
3
4
8
30
31
32
33
34
66
67
70
Directors
Company secretary
Principal registered office and place of business
Share register
Auditor
Solicitors
Bankers
CCP Technologies Limited
Corporate directory
Mr Michael White
Executive Director and Chief Executive Officer
Mr Anthony Rowley
Executive Director and Chief Operating Officer
Mr Leath Nicholson
Independent Non-Executive Chairman
Mr Anoosh Manzoori
Independent Non-Executive Director
Mr Adam Gallagher
Independent Non-Executive Director
Mr Phillip Hains
Mr Adam Gallagher
Suite 202
22 St Kilda Road
St Kilda VIC 3182
Australia
+61 3 8592 4883
Advanced Share Registry
110 Stirling Highway
Nedlands WA 6909
+61 8 9389 8033
BDO Audit Pty Ltd
Level 10
12 Creek Street
Brisbane QLD 4000
+61 7 3237 5999
Nicholson Ryan Lawyers Pty Ltd
Level 7
416–420 Collins Street
Melbourne VIC 3000
+61 3 9640 0400
Wespac Banking Corporation
150 Collins Street
Melbourne VIC 3000
Stock exchange listings
ASX: CT1
Website
www.ccp-technologies.com
CCP Technologies Limited
1
Chairman’s Letter
_______________________________________
Over the past year our company has grown, and this Annual Report demonstrates a business trajectory
towards sustainability. We are focused on positioning for the long-term and measures we’ve taken in
this financial year is the fabric for a scalable ecosystem. We now have promising momentum in sales,
partnerships to leverage and a solid innovation pathway as the key pillars of our business.
Key achievmnets in FY2018 include:
✓ Customer growth
secured on 24-month contracts
✓ Growing ecosystem
a mix of partners provide leverage
✓ On-trend innovation
Cloud, IoT, Blockchain, ML/AI convergence
✓ Market positioning
increased brand awareness
KEY
ACHIEVEMENTS
TOWARDS
SUSTAINABILITY
As a testimony to the quality of CCP’s critical control point management system, the company secured
agreements with global firms such as Vodafone, sales channels were broadened (including an
agreement with Dicker Data – one of Australia’s largest hardware distributors), and we were buoyed by
independent research which outlined our company’s comparative strengths. Improved results for the
2018 financial year supports confidence that we are heading in the right direction; however, I’m mindful
that we are still in the early growth stages. Patience is required to allow various strategic initiatives to
mature.
Through shareholder update we have regularly communicated our business development news and
product announcements. It timely to recognise the terrific achievements made on both fronts. We
continue to secure terrific anchor customers; and this year we added numerous high-profile venues to
our customer list. Our product development team can be proud of their achievements too; most notably,
our Smart Tags are now offered on diverse low-power wide-area networks (LPWAN) which is a key
differentiator in the marketplace.
We finished the year on a high-note with CCP securing its Patent (2015299743) in Australia on 28 June
2018. I would like to take this opportunity to congratulate CCP’s founders – Michael White (CEO),
Kartheek Munigoti (CTO) and Anthony Rowley (COO) – for their effort in progressing the complex patent
application to a successful outcome.
The Board and Executive Team acknowledge the hard work of our staff. They bring the right attitude,
skills and knowledge to build a thriving company. Delivering shareholder value is our key objective
moving forward.
On behalf of the Board of Directors, I would like to thank our shareholders for their support. We look
forward to advancing our vision in the coming year.
Leath Nicholson
Chairman
CCP Technologies Limited
CCP Technologies Limited
2
Company Highlights
_______________________________________
CCP Technologies Limited – a listed public company on the Australian Securities Exchange – offers a
critical control point management system in Australia and North America and has an emerging
presence in Singapore. Critical control points are the points in a supply chain where a failure of
standard operating procedure has potential to cause serious harm to people – and to a business’
reputation and bottom line. Standard critical control points include temperature, energy, environment
(e.g. air and water quality, pH, chemicals, noise, acoustics and gases) and movement.
CCP captures data using Smart Tags (sensors) and an advanced Internet of Things (IoT) network
which leverages WiFi and various LPWAN connectivity solutions. Data is delivered to the company’s
big data cloud platform where it is analysed to deliver business intelligence. Customers access this
information through Web and Mobile Dashboards; and receive real-time alerts via SMS, email and
push notifications.
The Company’s first target market is the food industry, where food safety regulation, energy savings
and waste reduction drives adoption. The company has also announced its appliance-level energy
(power) monitoring and shipment monitoring solutions for release in the second half of 2018.
Our clients save money, time and energy while
reducing liability, risk and product wastage.
It’s a smart solution that’s simply better.
CCP Technologies Limited (ASX: CT1)
Board and Management Team
ABN 58 009 213 754
Suite 202, 22 St Kilda Rd
St Kilda Rd, VIC 3182
Phone: +61 (3) 8592 4883
Email: info@ccp-network.com
Company website: www.ccp-technologies.com
Product information: www.ccp-network.com
Non-executive Chairman: Leath Nicholson
Non-executive Director: Adam Gallagher
Non-executive Director: Anoosh Manzoori
Executive Director & CEO: Michael White
Executive Director & COO: Anthony Rowley
CFO & Company Secretary: Phillip Hains
Joint Company Secretary: Adam Gallagher
CTO: Kartheek Munigoti
CCP Technologies Limited
3
Chief Executive Officer’s Report
_______________________________________
In the 2018 financial year CCP achieved several planned objectives: we continued to secure new
customers, extended our strategic partnerships, expanded the CCP Solution capability and established
key pillars to scale our business. It has been another exciting year for the company.
Critical control points exist in every supply chain; they are the points in a supply chain where a failure
of standard operating procedure has potential to cause serious harm to people – and to a business’
reputation and bottom line. Standard critical control points include temperature, energy, environment
(e.g. air and water quality, pH, chemicals, noise, acoustics and gases) and movement. CCP has created
a sophisticated Internet-of-Things (IoT) business-to-business critical control point management system.
CCP captures and transmits temperature, humidity and other data using Smart Tags (sensors) to a big-
data cloud platform where it is analysed to deliver business intelligence. Customers access this
information through Web and Mobile Dashboards; and receive real-time alerts via SMS, email and push
notifications.
The company’s first target market is the food industry, where
food safety regulation, energy savings and waste reduction
drives adoption. Most businesses in the food industry are still
using manual processes to capture refrigeration temperature
food safety
and paper-based records
regulations. Our customers know just how cost-effective and
easy it is to implement CCP and automate these processes.
to comply with
CCP has a diverse user-base, customers include all sized
businesses, from small operations to large corporate chains
and massive Las Vegas casinos. For these customers,
fridges are mission critical and continuous 24/7 monitoring of
refrigeration systems reduces business risk.
Based on our data, 4.9% of refrigerated coolers and freezers in businesses will suffer a complete failure
each year. It’s not a matter of ‘if a fridge breaks down’; it’s ‘when will it break down’. Automated
continuous refrigeration monitoring delivers far better outcomes compared to traditional data loggers
and error-prone manual checks. If CCP is installed and something goes wrong, our customers know
immediately.
But CCP is much more. Our platform is also used to optimise the performance of refrigeration. For
example, defrost cycle frequency and peak defrost temperature were adjusted in a small walk-in freezer
using our system. Changes reduced the power cost from $372.30 per month to $244.13 per month, a
saving of $128.17/month (52%). Across a large venue, substantial savings can be realised by optimising
refrigeration with CCP. The Smart Energy Design Centre found that for an average US grocery store,
57% of its energy costs are directly associated with refrigeration, and that a $1 saving in energy cost is
equivalent to a $59 increase in sales.
CCP Technologies Limited
4
Chief Executive Officer’s Report (cont.)
_______________________________________
Refrigeration systems consume large amounts of electricity. In perishable food businesses, research
suggests refrigeration contributes up to 80% of a site’s energy use, with compressors using about 90%
of this energy. That’s why we will be launching new solutions to help our customers reduce electricity
costs; and we will be rolling-out much more to strengthen the customer value proposition.
Our strong business model enables us to secure enduring contractual relationships. The CCP
solution is offered under a Solution as a Service (“SaaS”) 24-month recurring revenue model. In
addition, we broaden our revenue base by securing licensing and development contracts which
leverages intellectual property and our impressive Cloud, IoT, Blockchain, Big Data, AI development
capabilities.
Sales revenue continues to rise, and our
opportunity pipeline is growing. We finish
the 2018 financial year with our 24-month
total Customer Contract Value
(CCV)
performance metric increased at $740,000;
and for the 30-day period up to the end of
June, our platform processed almost 8
million data points.
covering
the year we announced new
During
customers
supermarkets,
hospitality and entertainment venues,
healthcare
facilities, restaurants, clubs,
aged care facilities and various food service
operations. Various marketing activity has
promoted the CCP brand and there are
clear signs our market has greater
awareness. We finished the financial year
with advice from the Food & Beverage Magazine that CCP has been short-listed as a finalist in the 2018
Food & Beverage Industry Awards. The Awards recognise and reward best practice and innovation in
food and beverage manufacturing in Australia and New Zealand.
Looking ahead, our domestic and international sales pipelines include a mix of large long-term
opportunities and shorter lead-time prospects. We are seeing a positive trendline in sales which bodes
well for the future.
Innovation is a part of this company’s DNA. In March 2017 we announced the development of our
Sigfox Smart Tag and set an optimistic target release date of September 2017. Our CTO and his product
development team exceeded expectations. We achieved the highest level Sigfox accreditation and, in
the process, our team positioned CCP for rapid development of other LPWAN Smart Tags, including
NB IoT and Cat M1 protocols. This set the scene for Vodafone selecting CCP to participate in its NB-
IoT trial, which subsequently led to our company signing a global agreement with Vodafone. Under the
agreement, our Smart Tags can now operate across Vodafone’s extensive global NB-IoT network. In a
similar fashion, we also released our Cat M1 Smart Tags which operate on the Telstra network.
Our product development team is working hard to finalise our new appliance-level energy (power)
monitoring Smart Tags. This is a very exciting development which positions CCP ahead of all other
critical control point management systems targeted at the food industry. Preventing refrigeration
failures and reducing power consumption are high priorities for our customers, which is why we are
also releasing cutting-edge visualisation tools and predictive modelling features. The team is also
finalising our new shipment monitoring Smart Tags which will link to Blockchain applications
underpinning smart supply chain contracts.
CCP Technologies Limited
5
Chief Executive Officer’s Report (cont.)
_______________________________________
Importantly, our innovation pathway establishes a strategic use of resources and enhances commercial
opportunities.
CCP differentiates itself by offering a true
enterprise solution, communication network
diversity, powerful business intelligence and a
simple, low-cost business model.
Partnerships provide market reach and sales channel opportunities for CCP. Our existing partnership
include Sigfox – a global telco provider – and their network operators: Thinxtra (AU/NZ) and Unabiz
(SGP). During the year we signed several new agreements to expand our collaborations:
✓ Dicker Data: an ASX-listed IT hardware, software and cloud distributor
- the largest Australian owned ICT distributor with a 5,000-strong
reseller network.
✓ Channon Refrigeration: a leading provider of commercial cooking
and refrigeration equipment to Australia’s hospitality industry.
✓ Vodafone: a global telecommunications company.
CCP Technologies Limited
6
Chief Executive Officer’s Report (cont.)
_______________________________________
The year ahead
During the year, our monthly subscription revenue from CCP Solution sales has steadily increased, and
in the last quarter of the financial year we have experienced a significantly higher rate of growth in
subscription revenue due to expansion of the sales funnel and increased deal flow. The marketing and
sales strategies we’ve put in place are yielding better results. We expect trend growth to continue as
more business development resources are applied through our reseller and collaboration program. We
anticipate new revenue streams come online from emerging initiatives such as shipment monitoring
and power monitoring; and there are opportunities to repackage solutions to provide partners and
customers with more flexibility to leverage CCP’s intellectual property.
We commence the new financial year by progressing new partnerships. Shareholders are aware that
we are poised to enter into a joint venture in the US and we remain confident this deal will successfully
conclude. In addition, we are progressing discussions with several global corporations. There is a lot of
interest in CCP. While I know everyone wants quick outcomes and an announcement every week, the
reality is game-changing deals take time to nurture; however, I can assure you we are laying the ground-
work. We are a small company with limited financial resources, any many people have commented that
we are punching well-above our weight.
The Board has established several key priorities. High on the list is securing strategic investment, where
transactions are not merely about achieving financial outcomes. Holistically, we are looking to enhance
CCP’s competitive advantage; and strategic investors often provide revenue generating opportunities
which centre on supply contracts, technology-sharing agreements or joint ventures. Aligned with the
objective of improving our business position is assessing M&A opportunities. As we nurture
relationships in the fast-moving innovation environment and more people become aware of CCP’s
capability, an increasing number of acquisition opportunities arise.
Your Board and executive team continues to work diligently on enhancing shareholder value. We
continue to assemble the pieces needed for a thriving company. The financial year 2019 has started
well and we are extremely enthusiastic about the year ahead.
CCP is on an innovation pathway to make
complex technology affordable and easy to use
for millions of small and medium-size businesses.
Michael White
Executive Director & CEO
CCP Technologies Limited
Corporate website: www.ccp-technologies.com
•
•
Facebook: https://www.facebook.com/CCPTechnologies
LinkedIn: https://www.linkedin.com/company/17895486
General enquiries, please contact:
• Email: info@ccp-network.com
• Phone: 1800 100 CCP (227)
CCP Technologies Limited
7
CCP Technologies Limited
Directors' report
30 June 2018
The directors present their report on the consolidated entity (referred to hereafter as the 'group') consisting of
CCP Technologies Limited and the entities it controlled at the end of, or during, the financial year ended 30 June
2018.
Directors and company secretary
The following persons were directors of CCP Technologies Limited during the whole of the financial year and up
to the date of this report:
Mr Michael White, Executive Director and Chief Executive Officer
Mr Anthony Rowley, Executive Director and Chief Operating Officer
Mr Leath Nicholson, Independent Non-Executive Chairman
Mr Anoosh Manzoori, Independent Non-Executive Director
Mr Adam Gallagher, Independent Non-Executive Director
The following persons held office as company secretary of CCP Technologies Limited during the whole of the
financial year and up to the date of this report:
Mr Phillip Hains (appointed 11 October 2017)
Mr Adam Gallagher (appointed 11 October 2017)
Mr Gary Taylor (resigned 11 October 2017)
Principal activities
CCP is a technology company bringing innovative solutions to market which leverage Cloud,
IoT,
edge-computing, LPWAN, Blockchain, Big Data, Analytics, Machine Learning (ML), Artificial Intelligence (AI) and
other advanced technologies. Our company capability includes in-house IoT hardware design,
turnkey
manufacture, firmware and software development. Our revenue is derived from selling a critical control point
management system as a Solution-as-a-Service (SaaS), intellectual property licensing and contract development.
The CCP Solution is offered to the food industry, where the combined use of edge-computing IoT sensors with
diverse connectivity, paperless task management and an open cloud-based platform with business intelligence
services and HACCP reporting supports food safety, yields savings, reduce waste and mitigates risk.
Food is one of the necessities of life. It is therefore not surprising that food safety
attracts wide community interest. Globally, food safety governance is a complex
system of government policies, standards,
laws and processes. Food safety
governance has done much to reduce the risks of foodborne illness; however, it
has not eliminated the risk of foodborne illnesses. Foodborne illnesses remain a
major public health threat.
One of the most common causes of foodborne illness is the storage and display
inadequate temperatures for
of potentially hazardous (perishable)
food
extended periods. This can lead to the rapid and sustained growth of
poisoning bacteria. In the massive global food industry, temperature is a critical
control point.
The food industry is now confronting substantial changes in its commercial and
regulatory environment. This is driving the adoption of automated real-time critical
control point management systems.
foods at
Throughout all stages of the cold chain, perishable foods must be handled and
stored in accordance with food safety regulations. The regulations require the
implementation of processes to ensure food is kept safe to consume and that
these processes are monitored and recorded to evidence compliance.
The CCP Solution includes both web and mobile applications to provide:
CCP Technologies Limited
8
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Principal activities (continued)
Immediate notification of breaches
•
•
Access to real-time and full analytics dashboards
• Reports, diagnostics, temperature graphs and maps
CCP’s unique platform can be deployed to monitor critical control points throughout the supply chain, in fixed and
transportation environments. Using a mobile device (e.g. phone/tablet), the CCP Smart Tag function can be
dynamically changed from fixed monitoring to shipment monitoring. The tag can then monitor perishable foods as
they move along the supply chain. Data is continuously uploaded or stored for future upload when a network is
available. Tags are designed for use anywhere in the world.
The combination of IoT, Big Data Analytics and Blockchain applications creates a disruptive technology for
managing compliance and product quality in the food industry. Deployment delivers:
•
•
Ease of managing routine food safety tasks through an electronic system:
•
•
•
Tasks are scheduled in accordance with the customer’s specific Food Safety Plan
Failure to complete tasks on time triggers notifications to ensure compliance
Performance is monitored and reported and can therefore be managed
Automated data capture using low cost (wireless) IoT devices:
•
•
•
•
Accurate temperature, humidity and other critical control points are continuously captured and reported
Out of tolerance breaches trigger notifications at any time of the day
Failures require corrective action records which are logged to meet compliance standards
HACCP reports at any time
The outcomes include:
• Reduced risk of a food safety incident
Lowered overall business risk
•
•
Extended food shelf-life
• Reduced risk of food wastage
• More efficient labour use
•
•
• Digital record-keeping
Better management of refrigerated assets and reduced risk of failure
Ability to measure performance
CCP is a pioneer in the development and delivery of advanced technologies across multiple industry sectors. We
offer a cost effective and compelling value proposition with a demonstrable return on investment for our target
customers.
Dividends
No dividends have been paid or proposed by the group during or since the end of the financial year (2017: nil).
Operating results
Financial results
The group reported a loss for the financial year ended 30 June 2018 of $2,833,837 (30 June 2017: $3,758,069).
The loss is after fully expensing all research and development costs. The decrease was primarily contributed by
the Corporate restructure expense related to the reverse acquisition being no longer applicable for this current
year, net of with an increase in employee expenditure as CCP continued to expand its market base and service
delivery capability.
The group's net assets decreased to $366,491 compared with the previous year's net assets of $1,622,502. As at
30 June 2018, the group had cash reserves of $453,776 (2017: $1,727,137).
Operations
Our executive team remain focused on lifting revenue. With enterprise level customers remaining a key business
development strategy, sales contracts take time to secure. With encouraging results towards the end of financial
year, the Directors are confident of continued growth.
CCP Technologies Limited
9
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Operating results (continued)
Operations (continued)
Information on the operations of the group and its business strategies and prospects is set out in the Chief
Executive Officer's report on pages 4 to 7 of this annual report.
Significant changes in the state of affairs
There have been no significant changes in the state of affairs of the group during the period.
Event since the end of the reporting period
On 17 July 2018, CCP Technologies Limited announced commitments from strategic investors to raise $861,247
(before costs) by issue of 43,062,350 new ordinary shares at $0.02 per share. On 8 August 2018, the group
announced the successful completion of this private placement. Each subscriber in the placement also received a
two-year unlisted option, for each share issued, with an exercise price of $0.03, subject to shareholder approval
at the 2018 annual general meeting (AGM).
No other matter or circumstance has occurred subsequent to period end that has significantly affected, or may
significantly affect, the operations of the group, the results of those operations or the state of affairs of the group
or economic entity in subsequent financial years.
Likely developments and expected results of operations
Information on likely developments in the operations of the group and the expected results of operations have not
been included in this report because the directors believe it would be likely to result in unreasonable prejudice to
the group.
Environmental regulation
The group is not affected by any significant environmental regulation in respect of its operations.
Information on directors
The names of directors in office at any time during or since the end of the financial year are:
Mr Michael White Executive Director and Chief Executive Officer
Experience and
expertise
Michael has over 20 years’ executive experience in cold chain management and
brings global food industry connections. Michael has a track record of successfully
developing technology businesses in food production and supply chain management
across Asia Pacific and North America.
Qualifications
Bachelor of Agricultural Science (La Trobe University)
Master of Environmental Science (University of Melbourne)
Date of appointment
7 September 2016
Other current
directorships
Former directorships in
last 3 years
Committees
None
None
None
Interests in shares and
options
Ordinary shares
Options
33,886,300
5,000,000
CCP Technologies Limited
10
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Information on directors (continued)
Mr Anthony Rowley Executive Director and Chief Operating Officer
Experience and
expertise
Anthony has an extensive background in corporate governance, sales and marketing,
business planning and administration. He was involved in the creation of Telstra
Internet and some of Australia’s early e-commerce initiatives. With more than 25
years’ experience in private and public-sector organisations, he is an experienced
business advisor and executive manager.
Date of appointment
7 September 2016
Other current
directorships
Former directorships in
last 3 years
Committees
None
None
None
Interests in shares and
options
Ordinary shares
Options
33,634,300
5,000,000
Mr Leath Nicholson Independent Non-Executive Chairman
Experience and
expertise
Qualifications
Leath was a corporate partner at a leading Melbourne law firm, gaining experience
with a breadth of ASX listed entities, before co-founding Foster Nicholson (now
Nicholson Ryan) in 2008. Leath's principal clients continue to be ASX listed
companies and high net worth individuals. Leath has particular expertise in mergers
and acquisitions; IT based transactions, and corporate governance.
Bachelor of Economics (Honours)
Bachelor of Laws (Honours)
Master of Laws (Commercial Law)
Date of appointment
14 October 2016
Other current
directorships
AMA Group Limited (ASX:AMA) (since 23 December 2015)
Money3 Corporation Limited (ASX:MNY) (since 29 January 2016)
Former directorships in
last 3 years
None
Committees
Audit committee - member
Remuneration committee - chair
Interests in shares and
options
Ordinary shares
Options
-
2,000,000
CCP Technologies Limited
11
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Information on directors (continued)
Mr Anoosh Manzoori Independent Non-Executive Director
Experience and
expertise
Anoosh is currently the CEO of Shape Capital Pty Ltd, an advisory and venture
investment firm. He has networks and access to venture capital and private equity
groups in Australia and in the United States.
Previously, he was the founder and CEO of the second largest cloud hosting
company in Australia. He built the company from scratch, reaching 75,000 customers
within five years, with over 10 percent market share in Australia, before selling the
company to MYOB in 2008. Anoosh is a member of the Institute of Company
Directors and is an Expert Network Member for the Department of Industry,
Innovation and Science.
Qualifications
Bachelor of Science
Graduate Diploma in Business Enterprise, Business
Date of appointment
14 October 2016
Other current
directorships
First Growth Funds Ltd (ASX: FGF) (since 14 December 2017)
Former directorships in
last 3 years
None
Committees
Remuneration committee - member
Interests in shares and
options
Ordinary shares
Options
Mr Adam Gallagher Independent Non-Executive Director
-
2,000,000
Experience and
expertise
Adam has strong experience and working knowledge of the technology sector, M&A
transactions, finance and capital markets through nearly 20 years' commercial, IT and
investment experience across major banks, stock exchanges, digital media,
communications, private equity and listed companies. For the last 10 years he has
predominantly worked with expansion stage technology businesses both listed and
unlisted as an officeholder, advisor and investor. He also had seven years of funds
management experience as a microcap manager consistently achieving returns well
above the All Ords Index.
Qualifications
Bachelor of Economics
Masters in Commerce
Graduate Diploma in Information Systems
Graduate Diploma in Applied Corporate Governance
Date of appointment
1 June 2015
Other current
directorships
EnviroSuite Limited (ASX:EVS) (since 20 September 2012)
Former directorships in
last 3 years
None
Committees
Audit committee - chair
Remuneration committee - member
Interests in shares and
options
Ordinary shares
Options
922,948
1,446,550
CCP Technologies Limited
12
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Information on directors (continued)
Meetings of directors
The numbers of meetings of the group's board of directors and of each board committee held during the year
ended 30 June 2018, and the numbers of meetings attended by each director were:
Mr Michael White**
Mr Anthony Rowley**
Mr Leath Nicholson
Mr Anoosh Manzoori
Mr Adam Gallagher
Full meetings
of directors
B
A
8
8
8
8
8
8
8
8
8
8
Meetings of committees
Audit
Remuneration
B
6
6
6
6
6
A
N/A
N/A
1
1
1
B
N/A
N/A
1
1
1
A
6
6
6
6
6
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a member of the committee during
the year
** = Not a member of the relevant committee
CCP Technologies Limited
13
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Remuneration report (audited)
The directors present the CCP Technologies Limited 2018 remuneration report, outlining key aspects of our
remuneration policy and framework, and remuneration awarded this year.
The report is structured as follows:
(a)
(b)
(c)
(d)
(e)
(f)
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Relationship between the remuneration policy and group performance
Key management personnel disclosures
(a) Principles used to determine the nature and amount of remuneration
Remuneration policy
The performance of the group depends upon the quality of its directors and executives. To prosper, the group
must attract and retain highly skilled directors and executives.
Remuneration committee
The board has a remuneration committee comprising the following members:
• Mr Leath Nicholson, Non-Executive Director (chair)
• Mr Anoosh Manzoori, Non-Executive Director
• Mr Adam Gallagher, Non-Executive Director
Mr Michael White, CEO has a standing invitation to attend committee meetings.
The committee assess the appropriateness of the nature and amounts 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.
Officers are given the opportunity to receive their bases emoluments in a variety of forms including cash, salary
sacrifice and fringe benefits. It is intended that that the manner of payments chosen will be optimal for the
recipient without creating undue cost for the group.
Remuneration structure
It is the group's objective to provide maximum stakeholder benefit from the retention of a high-quality board and
executive team by remunerating directors and other key management personnel (KMP) fairly and appropriately
with reference to relevant employment market conditions.
To assist in achieving this objective, the committee considers the nature and amount of executive directors’ and
officers’ emoluments alongside the group's financial and operational performance. The expected outcomes of the
remuneration structure are the retention and motivation of key executives, the attraction of quality management
to the group and performance incentives, which allow executives to share the rewards of the success of the
group.
In accordance with best practice corporate governance, the structure of executive and non-executive director
remuneration is separate and distinct.
Non-Executive Directors
The board seeks to set aggregate remuneration at a level which provides the group with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
CCP Technologies Limited
14
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Remuneration report (audited) (continued)
(a) Principles used to determine the nature and amount of remuneration (continued)
Non-Executive Directors (continued)
The constitution of CCP Technologies Limited and the ASX Listing Rules specify that the non-executive directors
are entitled to remuneration as determined by the group in a General Meeting to be apportioned amongst them in
such manner as the directors agree and, in default of agreement, equally. The maximum aggregate remuneration
currently approved by shareholders for directors' fees is for a total of $250,000 per annum. This amount was
approved at the 2016 Annual General Meeting held on 18 November 2016 and is a reduction from $500,000
previously approved by shareholders.
If a non-executive director performs extra services, which in the opinion of the directors are outside the scope of
the ordinary duties of the director, the group may remunerate that director by payment of a fixed sum determined
by the directors in addition to or instead of the remuneration referred to above. Non-executive directors are
entitled to be paid travel and other expenses properly incurred by them in attending directors or General
Meetings of the group or otherwise in connection with the business of the group.
Executive Directors and senior management
The group aims to reward executive directors and senior management with a level and mix of remuneration
commensurate with their position and responsibilities within the group and to:
•
•
•
•
reward executives for group and individual performance against targets set by reference to appropriate
benchmarks;
align the interests of the executives with those of shareholders;
link reward with strategic goals and performance of the group; and
ensure total remuneration is competitive by market standards.
The remuneration of the executive directors and senior management may from time-to-time be fixed by the
remuneration committee. As noted above, the policy is to align executive objectives with shareholder and
business objectives by providing a fixed remuneration component and offering short- and long-term incentives.
The level of fixed remuneration is set to provide a base level of remuneration, which is both appropriate to the
position and is competitive in the market. Fixed remuneration is reviewed annually by the committee, and the
process consists of a review of company-wide and individual performance, relevant comparative remuneration in
the market and internal, and where appropriate, external advice on policies and practices.
In relation to the payment of bonuses, options and other incentive payments, discretion is exercised by the
committee, having regard to the overall performance of the group and the performance of the individual during
the year.
Employment and consultancy contracts
The group utilises a mixture of employment and consultancy contracts to provide the group with the flexibility to
operate effectively in a dynamic industry.
It is the board’s policy that agreements are entered into with all directors, executives and employees.
The current agreements of senior management have a six-month notice period. All other agreements have one
month or less notice periods. No agreements contain early termination clauses. All non-executive directors have
agreements relating to their position. None of these contracts have termination benefits.
Voting and comments made at the last annual general meeting
At the last annual general meeting (AGM), the group received approval for the remuneration report adopted for
the 2017 financial year. The group did not receive any specific feedback at the AGM or throughout the year on its
remuneration policies.
CCP Technologies Limited
15
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Remuneration report (audited) (continued)
(b) Details of remuneration
The following persons held office as directors of CCP Technologies Limited during the financial year:
Mr Michael White, Executive Director and Chief Executive Officer
Mr Anthony Rowley, Executive Director and Chief Operating Officer
Mr Leath Nicholson, Independent Non-Executive Chairman
Mr Anoosh Manzoori, Independent Non-Executive Director
Mr Adam Gallagher, Independent Non-Executive Director
Key management personnel (KMP) of the group are defined as those persons having authority and responsibility
for planning, directing and controlling the major activities of the group, directly or indirectly, including any director
(whether executive or otherwise) of the group receiving the highest remuneration. Details of the remuneration of
the KMP of the group are set out in the following tables.
The following persons was considered other KMP of CCP Technologies Limited during the financial year:
Mr Kartheek Munigoti, Chief Technical Officer
Mr Axel Striefler, President - CCP North Amercia (appointed 19 March 2018)
Mr Tom Chicoine, President - CCP North Amercia (resigned 19 March 2018)
Mr Gary Taylor, Chief Financial Officer (resigned 3 November 2017)
Amounts of remuneration
The following table shows details of remuneration expenses recognised for the group's KMP for the financial year
ended 30 June 2018.
2018
Non-Executive Directors
Mr Leath Nicholson
Mr Anoosh Manzoori
Mr Adam Gallagher
Executive Directors
Mr Michael White
Mr Anthony Rowley
Other KMP
Mr Kartheek Munigoti
Mr Axel Striefler
Mr Tom Chicoine
Mr Gary Taylor
Total KMP compensation
Notes
Short-term benefits
Post-
employment
benefits
Share-
based
payments
Cash
bonus
$
Non-
monetary
benefits
$
Super-
Other
$
annuation Options
$
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,000
21,000
4,565
44,000
37,250
24,065
2,789
-
25,000
15,580
5,697
5,697
218,537
218,596
-
19,116
-
-
14,820
-
-
-
-
-
26,278
-
185,279
70,269
81,092
60,198
21,905
55,400
84,237
939,286
Cash
salary
and fees
$
23,000
16,250
19,500
185,051
197,319
170,459
51,153
54,814
60,198
777,744
• Mr Axel Striefler appointed on 19 March 2018.
• Mr Tom Chicoine resigned on 19 March 2018.
• Mr Gary Taylor resigned on 3 November 2017.
CCP Technologies Limited
16
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Remuneration report (audited) (continued)
(b) Details of remuneration (continued)
Amounts of remuneration (continued)
The following table shows details of remuneration expenses recognised for the group's KMP for the financial year
ended 30 June 2017.
2017
Non-Executive Directors
Mr Leath Nicholson
Mr Anoosh Manzoori
Mr Adam Gallagher
Mr Craig Chapman
Mr Christopher McNamara
Executive Directors
Mr Michael White
Mr Anthony Rowley
Other KMP
Mr Kartheek Munigoti
Mr Tom Chicoine
Mr Gary Taylor
Total KMP compensation
Notes
Short-term benefits
Post-
employment
benefits
Share-
based
payments
Cash
salary
and fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation Options
$
$
Total
$
17,250
11,250
29,375
15,333
19,108
159,455
175,613
152,406
61,715
125,000
766,505
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,700
12,925
12,925
-
-
-
30,175
24,175
29,375
15,333
20,808
-
1,500
24,543
13,685
-
-
183,998
190,798
-
-
-
11,295
-
-
-
31,057
13,125
163,701
92,772
138,125
1,500
51,223
70,032
889,260
• Mr Craig Chapman resigned as non-executive director on 18 November 2016.
• Mr Christopher McNamara resigned as non-executive director on 6 March 2017.
CCP Technologies Limited
17
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Remuneration report (audited) (continued)
(b) Details of remuneration (continued)
Amounts of remuneration (continued)
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Consolidated entity
Name
Non-Executive Directors
Mr Leath Nicholson
Mr Anoosh Manzoori
Mr Adam Gallagher
Mr Craig Chapman
Mr Christopher McNamara
Executive Directors
Mr Michael White
Mr Anthony Rowley
Other KMP
Mr Kartheek Munigoti
Mr Axel Striefler
Mr Tom Chicoine
Mr Gary Taylor
(c) Service agreements
Non-Executive Chairman
Fixed remuneration
2018
%
2017
%
At risk - STI
2018
%
2017
%
At risk - LTI
2018
%
2017
%
52
44
81
-
-
97
97
100
100
68
100
57
47
100
100
100
100
100
100
-
67
92
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
48
56
19
-
-
3
3
-
-
32
-
43
53
-
-
-
-
-
-
-
33
8
The group has entered into a service arrangement with Catellen Pty Ltd to provide the services of Mr Leath
Nicholson as Non-Executive Chairman of the group commencing on 14 October 2016. The key terms of the
arrangement are:
•
•
Fee of $23,000 per annum;
2,000,000 options to acquire ordinary securities, exercisable at $0.10 each, approved by shareholders on 18
November 2016, vesting on 15 December 2018 and expiring on 15 December 2020;
• No notice period.
Non-Executive Directors
The group has entered into a service arrangement with Shape Capital Pty Limited to provide the services of Mr
Anoosh Manzoori as a Non-Executive Director of the group commencing on 14 October 2016. The key terms of
the arrangement are:
•
•
Fee of $15,000 per annum;
2,000,000 options to acquire ordinary securities, exercisable at $0.10 each, approved by shareholders on 18
November 2016, vesting on 15 December 2018 and expiring on 15 December 2020;
• No notice period.
The group has entered into a service arrangement with Famile Pty Limited to provide the services of Mr Adam
Gallagher as a Non-Executive Director of the group commencing on 1 June 2015. The key terms of the
arrangement are:
Fee of $30,000 per annum (payable in cash and equity);
•
• No notice period.
CCP Technologies Limited
18
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Remuneration report (audited) (continued)
(c) Service agreements (continued)
Executive Directors
The group has entered into an employment contract with Mr Michael White as CEO and Executive Director. The
key terms of the contract are:
•
•
Salary of $182,000 per annum plus statutory superannuation contributions;
6 months’ notice period, except where there is a change in control and the notice period is reduced to 3
months;
The group has entered into an employment contract with Mr Anthony Rowley as COO and Executive Director.
The key terms of the contract are:
•
•
Salary of $182,000 per annum plus statutory superannuation contributions;
6 months’ notice period, except where there is a change in control and the notice period is reduced to 3
months;
The Executive Directors have a substantial interest in the group through their respective related party entities.
These share and option holdings are outlined from page 20.
Chief Technical Officer
The group has entered into an employment contract with Mr Kartheek Munigoti as CTO. The key terms of the
contract are:
•
•
Salary of $156,000 per annum plus statutory superannuation contributions;
6 months’ notice period, except where there is a change in control and the notice period is reduced to 3
months;
The CTO has a substantial interest in the group through his related party entity, Sriskanda Family Trust.
President – CCP North America
The group has entered into a service arrangement with Mr Tom Chicoine to act as President - CCP North
America of the group commencing on 1 September 2016. This arrangement ended on 19 March 2018. The key
terms of the arrangement are:
•
•
Fee of US$102,000 per annum (reduced to US$51,000 per annum from June 2017);
30-day notice period;
The group has entered into a service arrangement with Mr Axel Striefler to act as President - CCP North America
of the group commencing on 19 March 2018. The key terms of the arrangement are:
•
•
Fee of US$148,000 per annum;
3-month notice period;
Chief Financial Officer
The group has entered into a service arrangement with Adtay Pty Limited to provide the services of Mr Gary
Taylor as CFO of the group commencing on 21 April 2014. This arrangement ended on 3 November 2017. The
key terms of the arrangement were:
•
•
•
Fee of $150,000 per annum;
Annual time commitment of 40 weeks per annum;
6 months’ notice period, except where there is a change in control and the notice period is reduced to 3
months;
The group appointed Mr Phillip Hains as CFO on 3 November 2017, operating via a specialist public practice,
'The CFO Solution'. As an outsourced provider of back office support, financial reporting and compliance
systems, Mr Hains is not considered to be KMP.
CCP Technologies Limited
19
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Remuneration report (audited) (continued)
(d) Share-based compensation
Issue of shares
(i)
There were no shares issued to directors and other key management personnel as part of compensation during
the financial year ended 30 June 2018.
(ii) Options
During the current financial year, there were 1,446,550 unlisted options issued to Mr Adam Gallagher, and
5,000,000 unlisted options each to Mr Michael White and Mr Anthony Rowley. These options were approved on
10 November 2017 at the Annual General Meeting.
(e) Relationship between the remuneration policy and group performance
Statutory performance indicators
The factors that are considered to affect shareholder return in the past 5 years are summarised below:
30 June 2018 30 June 2017 30 June 2016 30 June 2015 30 June 2014
$
$
$
$
$
.
Share price at end of year
Market capitalisation at the end
of the year ($M)
Net profit/(loss) for the financial
year
Dividends paid
0.010
3.50
0.025
7.10
0.016
2.52
0.014
2.09
0.015
1.96
(2,833,837)
Nil
(3,758,069)
Nil
(376,510)
Nil
(1,083,446)
Nil
786,160
Nil
Fixed remuneration is not linked to group performance. It is set to the individuals' role, responsibilities and
performance and remuneration levels for similar positions in the market.
Profit targets are deemed an appropriate performance measure for the granting of short- and long-term
incentives to senior executives given that it is a key target hurdle referenced by the board in preparing annual
budgets and measuring group performance. Profit targets reflect the directors' assessment of the result of the
ongoing business activities of the group excluding non-cash, one-off market related items that are usually out of
managements' control. The annual target is determined by the remuneration committee and approved by the
board having regard to the group's annual budget. The target could be higher or lower than budget for and is
adjusted for the effect of material equity issues.
Prior to the reverse acquisition in Q1 2017, the link between remuneration, company financial performance and
shareholder wealth generation was tenuous, particularly in the research and development stage of a
biotechnology company. Following the reverse acquisition, the group is now an IoT focused business.
Share prices are subject to the influence of market sentiment toward the sector in which it operates and increase
and decreases in the share price may occur independently of executive performance or remuneration.
(f) Key management personnel disclosures
Share holdings
The number of shares in the parent entity held during the financial years ended 30 June 2018 and 30 June 2017
by each director and other members of key management personnel of the group, including their personally
related parties, is set out below:
CCP Technologies Limited
20
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Remuneration report (audited) (continued)
(f) Key management personnel disclosures (continued)
Share holdings (continued)
Balance at the
start of the
period1
Granted as
remuneration
Received on
exercise of
options Other changes
Balance at the
end of the
period3
-
-
527,948
-
-
33,886,300
33,549,300
22,047,080
-
-
351,000
90,361,628
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
395,000
-
-
-
85,000
-
-
-
(351,000)
129,000
-
-
922,948
-
-
33,886,300
33,634,300
22,047,080
-
-
-
90,490,628
Balance at the
start of the
period1
Granted as
remuneration
Received on
exercise of
options Other changes2
Balance at the
end of the
period3
-
-
1,959,956
5,616,776
517,956
-
-
-
-
-
-
8,094,688
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,432,008)
(5,616,776)
(517,956)
33,886,300
33,549,300
22,047,080
-
-
351,000
82,266,940
-
-
527,948
-
-
33,886,300
33,549,300
22,047,080
-
-
351,000
90,361,628
2018
Ordinary shares
Mr Leath Nicholson
Mr Anoosh Manzoori
Mr Adam Gallagher
Mr Craig Chapman
Mr Chris McNamara
Mr Michael White
Mr Anthony Rowley
Mr Kartheek Munigoti
Mr Axel Striefler
Mr Tom Chicoine
Mr Gary Taylor
2017
Ordinary shares
Mr Leath Nicholson
Mr Anoosh Manzoori
Mr Adam Gallagher
Mr Craig Chapman
Mr Chris McNamara
Mr Michael White
Mr Anthony Rowley
Mr Kartheek Munigoti
Mr Axel Striefler
Mr Tom Chicoine
Mr Gary Taylor
Notes
1. Balance may include shares held prior to individuals becoming KMP. For individuals who became KMP during the period, the
balance is as at the date they became KMP. Opening balances held prior to 5:1 share consolidation adjusted in accordance
with the prospectus issued on 1 July 2016.
2. Other changes incorporates changes resulting from the sale of shares.
3. For former KMP, the balance is as at the date they cease being KMP.
CCP Technologies Limited
21
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Remuneration report (audited) (continued)
(f) Key management personnel disclosures (continued)
Milestone share holdings
The milestone shares allotted to directors and key management are not related to remuneration as they form part
of the purchase price of the acquisition of CCP group. All shareholders of CCP group have been allotted these
milestone shares regardless if they are a current KMP of the group.
Balance at the
start of the
period
Allotted on
acquisition
Derecognised
on lapse of
milestone
targets
Converted to
ordinary
securities on
attaining
milestone1
Balance at the
end of the
period
9,015,030
8,685,029
5,874,020
23,574,079
-
-
-
-
(9,015,030)
(8,685,029)
(5,874,020)
(23,574,079)
-
-
-
-
-
-
-
-
Balance at the
start of the
period
Allotted on
acquisition
Derecognised
on lapse of
milestone
targets
Converted to
ordinary
securities on
attaining
milestone1
Balance at the
end of the
period
-
-
-
-
18,030,030
17,370,029
11,748,020
47,148,079
(4,507,500)
(4,342,500)
(2,937,000)
(11,787,000)
(4,507,500)
(4,342,500)
(2,937,000)
(11,787,000)
9,015,030
8,685,029
5,874,020
23,574,079
2018
Milestone shares
Mr Michael White
Mr Anthony Rowley
Mr Kartheek Munigoti
2017
Milestone shares
Mr Michael White
Mr Anthony Rowley
Mr Kartheek Munigoti
Notes
1. Milestone shares are capable of being converted to ordinary securities on the basis of one ordinary security for every five
milestone shares held.
CCP Technologies Limited
22
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Remuneration report (audited) (continued)
(f) Key management personnel disclosures (continued)
Option holdings
The number of options over ordinary shares in the parent entity held during the financial years ended 30 June
2018 and 30 June 2017 by each director and other members of key management personnel of the group,
including their personally related parties, is set out below:
Balance at
start of the
period1
Granted as
remuneration
Other
changes2
Balance at
end of the
period3
Vested and
exercisable
Exercised
2,000,000
2,000,000
-
-
-
1,333,333
5,333,333
-
-
1,446,550
5,000,000
5,000,000
-
11,446,550
-
-
-
-
-
-
-
2,000,000
-
2,000,000
-
1,446,550
-
5,000,000
-
5,000,000
-
-
(1,333,333)
(1,333,333) 15,446,550
-
-
-
-
-
-
-
Balance at
start of the
period1
Granted as
remuneration
Other
changes2
Balance at
end of the
period3
Vested and
exercisable
Exercised
-
-
-
-
2,000,000
2,000,000
1,333,333
5,333,333
-
-
-
-
-
-
-
-
2,000,000
2,000,000
1,333,333
5,333,333
-
-
-
-
2018
Options
Mr Leath Nicholson
Mr Anoosh Manzoori
Mr Adam Gallagher
Mr Michael White (4)
Mr Anthony Rowley (4)
Mr Tom Chicoine
2017
Options
Mr Leath Nicholson
Mr Anoosh Manzoori
Mr Tom Chicoine
Notes
1. Balance may include shares held prior to individuals becoming KMP. For individuals who became KMP during the period, the
balance is as at the date they became KMP.
2. Other changes incorporates changes resulting from the expiration/forfeiture of options.
3. For former KMP, the balance is as at the date they cease being KMP.
4. At the 2017 Annual General Meeting, the shareholder approved the issue of 5 million share rights to each executive directors,
Michael White and Anthony Rowley, with a term of 3 years from grant date and an exercise price of $0.10 per share.
CCP Technologies Limited
23
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Remuneration report (audited) (continued)
(f) Key management personnel disclosures (continued)
Transactions with KMP and related parties
Transactions between key management personnel related parties are on normal commercial terms and
conditions no more favourable than those available to other parties unless otherwise stated. The following
transactions occurred during the year ended 30 June 2018:
Office rent and outgoings paid on an arm’s length commercial basis to Lagoon
Properties Pty Ltd, a company associated with Michael White and Anthony
Rowley in respect of the St Kilda office premises.
Consultancy fees paid to Nillahcootie Enterprises Pty Ltd, a company associated
with Michael White, in respect of the provision of sales and administrative
services.
Consultancy fees paid to Adtay Pty Ltd, a company associated with Gary Taylor,
in respect of the provision of sales services.
Consultancy fees paid to Skantech Pty Ltd, a company associated with Kartheek
Munigoti, in respect of the provision of IT technical support services.
Consultancy fees paid to Saks Technologies Pvt Ltd, a company associated with
Kartheek Munigoti, in respect of the provision of IT technical support services in
India.
Interest paid to Reefpeak Pty Ltd, a company associated with Craig Chapman in
respect of unsecured loan advanced pending completion of the acquisition.
Interest paid to Anthony Rowley in respect of unsecured loan advanced pending
completion of the acquisition.
Interest paid to Michael White in respect of unsecured loan advanced pending
completion of the acquisition.
Legal fees paid on normal commercial terms to Nicholson Ryan Lawyers Pty Ltd
(formerly Foster Nicholson Jones Lawyers Pty Ltd), a company associated with
Leath Nicholson.
Consolidated entity
30 June
2018
$
30 June
2017
$
20,533
32,763
-
-
10,720
7,753
28,342
17,920
-
-
-
-
205,575
422
140
140
25,753
37,501
CCP Technologies Limited
24
Remuneration report (audited) (continued)
(f) Key management personnel disclosures (continued)
Outstanding balances with related parties
The following balances remain outstanding with related parties as at 30 June 2018:
Office rent and outgoings payable to Lagoon Properties Pty Ltd, a company
associated with Michael White and Anthony Rowley in respect of the St Kilda
office premises.
Consultancy fees payable to Skantech Pty Ltd, a company associated with
Kartheek Munigoti, in respect of the provision of IT technical support services.
Legal fees payable to Nicholson Ryan Lawyers Pty Ltd (formerly Foster
Nicholson Jones Lawyers Pty Ltd), a company associated with Leath Nicholson.
Directors' fees payable to Catellen Pty Ltd, a company associated with Leath
Nicholson.
Directors' fees payable to Famile Pty Ltd, a company associated with Adam
Gallagher.
Directors' fees payable to Shape Capital Pty Ltd, a company associated with
Anoosh Manzoori.
[This concludes the remuneration report, which has been audited]
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Consolidated entity
30 June
2018
$
30 June
2017
$
1,958
3,300
-
-
-
23,500
1,917
2,750
1,375
-
-
-
CCP Technologies Limited
25
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Shares under option
(a) Unissued ordinary shares
Unissued ordinary shares of CCP Technologies Limited under option at the date of this report are as follows:
Grant date
CT101 (granted: 18-Nov-2016)
CT102 (granted: 18-Nov-2016)
CT103 (granted: 15-Dec-2016)
CT103 (granted: 15-Dec-2016)
CT104 (granted: 10-Nov- 2017)
CT105 (granted: 10-Nov- 2017)
CT105 (granted: 10-Nov- 2017)
Expiry
date
Exercise
price
(AUD)
No. of share
options
30 June 2018
15-Dec-2020
15-Dec-2020
15-Dec-2019
15-Dec-2019
25-Oct-2021
31-Dec-2020
31-Dec-2020
$0.10
$0.10
Nil
Nil
$0.10
$0.10
$0.10
2,000,000
2,000,000
1,333,000
200,000
1,446,550
5,000,000
5,000,000
16,979,550
No option holder has any right under the options to participate in any other share issue of the company or any
other entity.
Insurance of officers and indemnities
(a)
Insurance of officers
The group has indemnified the directors and executives of the group 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 group paid a premium in respect of a contract to insure the directors and executives
of the group against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of liability and the amount of the premium.
(b)
Indemnity of auditor
The group has not, during or since the financial year, indemnified or agreed to indemnify the auditor of the group
or any related entity against a liability incurred by the auditor.
During the financial year, the group has not paid a premium in respect of a contract to insure the auditor of the
group or any related entity.
Proceedings on behalf of the company
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.
No proceedings have been brought or intervened in on behalf of the company with leave of the Court under
section 237 of the Corporations Act 2001.
Non-audit services
During the financial year ended 30 June 2018 the group did not engage the external auditor to provide non-audit
services.
The group may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the group are important.
There are no officers of the group who are former audit partners of BDO Audit Pty Ltd.
CCP Technologies Limited
26
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is
set out on page 28.
Statement of corporate governance practices
The group is committed to the principles underpinning good corporate governance, applied in a manner, which is
most suited to the group, and to best addressing the directors’ accountability to security holders and other
stakeholders. This is supported by a commitment to the highest standards of legislative compliance and financial
and ethical behaviour.
The group has adopted the ASX Corporate Governance Principles and Recommendations 3rd Edition as far as
practicable based on the size of the group.
The company has elected to publish its 'statement of corporate governance practices' on its website. In addition,
each year the 'Key to Disclosures - Corporate Governance Council Principles and Recommendations' will be
available to shareholders at the same time this report is released.
Auditor
BDO Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors.
Mr Michael White
Director
Melbourne
31 August 2018
CCP Technologies Limited
27
CCP Technologies Limited
Directors' report
30 June 2018
(continued)
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY M CUTRI TO THE DIRECTORS OF CCP TECHNOLOGIES LIMITED
As lead auditor of CCP Technologies Limited for the year ended 30 June 2018, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of CCP Technologies Limited and the entities it controlled during the
period.
M Cutri
Director
BDO Audit Pty Ltd
Brisbane, 31 August 2018
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional
Standards Legislation, other than for the acts or omissions of financial services licensees.
CCP Technologies Limited
28
CCP Technologies Limited ABN 58 009 213 754
Annual report - 30 June 2018
Contents
Financial statements
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor's report to the members
Page
30
31
32
33
34
66
67
CCP Technologies Limited
29
CCP Technologies Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2018
Revenue and other income
Administration expense
Re-listing expense
Depreciation expense
Directors fees
Employee and contracting expense
Finance costs
Marketing
Materials
Occupancy
Patents and trademarks
Professional and legal expense
Research and development
Share-based payment expense
Travel
Corporate restructure expense
Doubtful debts
Loss before income tax
Income tax expense
Loss from continuing operations
Loss from discontinued operations
Loss for the period
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Total comprehensive loss for the period
Total comprehensive income for the period is attributable to:
Owners of CCP Technologies Limited
Consolidated entity
30 June
2018
$
30 June
2017
$
Notes
2
3
3
3
10
4
8(c)
317,344
175,496
(386,084)
-
(10,413)
(58,750)
(1,595,613)
(10,952)
(176,966)
(142,757)
(76,278)
(7,190)
(208,842)
(115,486)
(158,181)
(161,804)
-
(41,865)
(2,833,837)
(254,694)
(92,126)
(8,128)
(70,091)
(1,100,041)
(16,660)
(206,598)
(193,184)
(54,581)
(50,148)
(111,866)
(206,304)
(146,561)
(92,086)
(1,308,938)
-
(3,736,510)
-
(2,833,837)
-
(3,736,510)
-
(2,833,837)
(21,559)
(3,758,069)
9(b)
(1,373)
(2,835,210)
(10,418)
(3,768,487)
(2,835,210)
(3,768,487)
Cents
Cents
Loss per share for loss from continuing operations attributable to
the ordinary equity holders of the company:
Basic loss per share
Diluted loss per share
Loss per share for loss attributable to the ordinary equity holders of
the company:
Basic loss per share
Diluted loss per share
11
11
11
11
(0.89)
(0.89)
(1.99)
(1.99)
(0.89)
(0.89)
(2.00)
(2.00)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
CCP Technologies Limited
30
CCP Technologies Limited
Consolidated statement of financial position
As at 30 June 2018
Consolidated entity
30 June
2018
$
30 June
2017
$
Notes
5(a)
6
7(a)
5(b)
7(b)
8
453,776
91,127
44,301
589,204
1,727,137
86,379
42,130
1,855,646
43,367
43,367
24,162
24,162
632,571
1,879,808
169,678
74,744
244,422
21,658
266,080
204,116
18,582
222,698
34,608
257,306
-
-
266,080
257,306
366,491
1,622,502
9(a)
9(b)
8,400,628
137,951
(8,172,088)
366,491
6,909,610
51,143
(5,338,251)
1,622,502
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Employee benefit obligations
Liabilities directly associated with discontinued operations
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Other reserves
Accumulated losses
Total equity
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
CCP Technologies Limited
31
CCP Technologies Limited
Consolidated statement of changes in equity
For the year ended 30 June 2018
Attributable to owners of
CCP Technologies Limited
Contributed
equity
$
Other
reserves
$
Accumulated
losses
$
Notes
Total
equity
$
1,212,910
-
(1,580,182)
(367,272)
Consolidated entity
Balance at 1 July 2016
Loss for the period
Other comprehensive income
Total comprehensive income for the period
-
-
-
-
(10,418)
(10,418)
(3,758,069)
-
(3,758,069)
(3,758,069)
(10,418)
(3,768,487)
Transactions with owners in their capacity as
owners:
Reverse acquisition of CCP group and capital raising
Securities issued in settlement of debt
Securities issued during the year
Transaction costs
Share-based payments
9(b)
4,460,326
20,000
1,323,603
(107,229)
-
5,696,700
-
-
-
-
61,561
61,561
-
-
-
-
-
-
4,460,326
20,000
1,323,603
(107,229)
61,561
5,758,261
Balance at 30 June 2017
6,909,610
51,143
(5,338,251)
1,622,502
Balance at 1 July 2017
6,909,610
51,143
(5,338,251)
1,622,502
Loss for the period
Other comprehensive income
Total comprehensive income for the period
-
-
-
-
(1,373)
(1,373)
(2,833,837)
-
(2,833,837)
(2,833,837)
(1,373)
(2,835,210)
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs and
tax
Share-based payments
9(a)
9(b)
1,491,018
-
1,491,018
-
88,181
88,181
-
-
-
1,491,018
88,181
1,579,199
Balance at 30 June 2018
8,400,628
137,951
(8,172,088)
366,491
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes.
CCP Technologies Limited
32
CCP Technologies Limited
Consolidated statement of cash flows
For the year ended 30 June 2018
Consolidated entity
30 June
2018
$
30 June
2017
$
Notes
12
7(a)
9(a)
287,619
(2,962,595)
13,289
4,989
(810)
(2,657,508)
89,067
(2,464,188)
-
7,521
(4,608)
(2,372,208)
(29,618)
(7,561)
-
(37,179)
(8,828)
-
9,688
860
1,465,500
(44,482)
-
-
1,421,018
(1,273,669)
1,727,137
308
453,776
4,323,602
(273,465)
170,000
(175,000)
4,045,137
1,673,789
53,348
-
1,727,137
Cash flows from operating activities
Receipts from customers (GST inclusive)
Payments to suppliers and employees (GST inclusive)
Other income receipts
Interest received
Finance costs
Net cash (outflow) from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for deposits
Net cash acquired from CCP Technologies Limited
Net cash (outflow) inflow from investing activities
Cash flows from financing activities
Proceeds from issues of shares and other equity securities
Payment for transaction costs in relation to the issue of shares
Proceeds from borrowings
Repayment of borrowings
Net cash inflow from financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
CCP Technologies Limited
33
Contents of the notes to the consolidated financial statements
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Segment information
Revenue and other income
Expenses
Income tax expense
Financial assets and financial liabilities
Other current assets
Non-financial assets and liabilities
Discontinued operation
Equity
Share-based payments
Loss per share
Cash flow information
Financial risk management
Contingent liabilities
Commitments
Events occurring after the reporting period
Key management personnel disclosures
Related party transactions
Remuneration of auditors
Parent entity financial information
Interests in subsidiaries
Summary of significant accounting policies
Page
35
35
36
36
37
39
39
40
41
44
46
47
47
51
51
51
51
52
53
53
54
56
CCP Technologies Limited
34
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
1 Segment information
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.
The company currently operates predominantly in one segment, being the sale and commercialisation of the
CCP Solution.
Revenue by geographical location
Revenue by geographical location attributable to external customers is disclosed below, based on the location of
the external customer:
Australia
United States
Total segment revenue
2 Revenue and other income
The group derives the following types of revenue:
Revenue from provision of goods and services
Interest income
Other income receipts
Consolidated entity
30 June
2018
$
287,646
29,698
317,344
30 June
2017
$
21,908
153,588
175,496
Consolidated entity
30 June
2018
$
299,066
4,989
13,289
317,344
30 June
2017
$
169,087
6,409
-
175,496
(a) Recognising revenue from major business activities
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the entity and specific criteria have been met for each of the group's activities as
described below. The group bases its estimates on historical results, taking into consideration the type of
customer, the type of transaction and the specifics of each arrangement.
Revenue is recognised for the major business activities using the methods outlined below.
Sale of goods
Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of
significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods.
Provision of services
Revenue relating to the provision of services is determined with reference to the stage of completion of the
transaction at reporting date and where the outcome of the contract can be estimated reliably. Stage of
completion is determined with reference to the services performed to date as a percentage of total anticipated
services to be performed. Where the outcome cannot be estimated reliably, revenue is recognised only to the
extent that related expenditure is recoverable.
CCP Technologies Limited
35
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
2 Revenue and other income (continued)
(a) Recognising revenue from major business activities (continued)
When it is probable that the total contract costs will exceed the total contract revenue, the expected loss is
recognised as an expense immediately through the consolidated statement of profit or loss and other
comprehensive income.
All revenue is stated net of the amount of goods and services tax (GST).
3 Expenses
Loss before income tax includes the following specific expenses:
Employee benefits expenses
Salaries
Contractors – KMP
Contractors – sales, marketing and administration
Contractors – research and development
Annual leave provided
Superannuation
Salary on costs
Depreciation expense
Depreciation of property, plant and equipment
Finance costs
Foreign exchange loss/(gain)
Interest paid
4 Income tax expense
(a)
Income tax expense
Current tax
Deferred income tax
Income tax expense
CCP Technologies Limited
Consolidated entity
30 June
2018
$
30 June
2017
$
996,718
203,354
126,254
138,631
56,161
73,234
1,261
1,595,613
337,886
440,987
197,077
45,316
18,583
59,125
1,067
1,100,041
10,413
10,413
8,128
8,128
10,142
810
10,952
12,052
4,608
16,660
Consolidated entity
30 June
2018
$
30 June
2017
$
-
-
-
-
-
-
36
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
4 Income tax expense (continued)
(a)
Income tax expense (continued)
Potential future income tax benefits attributable to tax losses carried forward have not been brought to account at
30 June 2018 because the directors do not believe that it is appropriate to regard realisation of the future income
tax benefit as probable. The group tax losses do not expire but are subject to a continuity of ownership test.
Realisation of the benefit of tax losses would be subject to the group satisfying the conditions for deductibility
imposed by tax legislation and no subsequent changes in tax legislation adversely impacting the group. The
group has made no assessment as to the satisfaction of deductibility conditions at 30 June 2018. Similarly, future
benefits attributable to net temporary differences have not been brought to account, as the directors do not
regard the realisation of such benefits as probable.
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Loss from discontinuing operations before income tax expense
Loss before income tax
Tax at the Australian tax rate of 27.5% (2017: 27.5%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Share-based payment expense
Corporate restructure expense
Movement in provisions
Unrealised foreign exchange movements
Other items not deductible
Tax losses and other timing differences for which no deferred tax asset is
recognised
Income tax expense
5 Financial assets and financial liabilities
(a) Trade and other receivables
Consolidated entity
30 June
2018
$
30 June
2017
$
(2,833,837)
-
(2,833,837)
(3,736,510)
(21,559)
(3,758,069)
(779,305)
(1,033,469)
43,500
-
15,444
(462)
407
720,416
-
40,304
359,958
5,110
251
317
627,529
-
2,833,837
3,758,069
Trade receivables
Provision for impairment of receivables
(see note 13(b))
Other receivables (i)
Current
$
104,977
(41,865)
63,112
28,015
Total trade and other receivables
91,127
Consolidated entity
30 June
2018
Non-
current
$
30 June
2017
Non-
current
$
Total
$
Current
$
-
-
-
-
-
104,977
69,610
(41,865)
63,112
-
69,610
28,015
16,769
91,127
86,379
-
-
-
-
-
Total
$
69,610
-
69,610
16,769
86,379
CCP Technologies Limited
37
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
5 Financial assets and financial liabilities (continued)
(a) Trade and other receivables (continued)
(i) Other receivables
Other receivables comprises GST refundable and sundry receivables.
(b) Trade and other payables
Current liabilities
Trade payables
Accrued expenses
Other payables
(c) Fair value measurement
Consolidated entity
30 June
2018
$
30 June
2017
$
59,830
64,221
45,627
169,678
96,608
92,293
15,215
204,116
The fair values of financial assets and financial liabilities are presented in the following table and can be
compared to their carrying values as presented in the consolidated statement of financial position. Fair values are
those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing
parties in an arm’s length transaction.
Fair values derived may be based on information that is estimated or subject to judgement, where changes in
assumptions may have a material impact on the amounts estimated. Areas of judgement and the assumptions
have been detailed below. Where possible, valuation information used to calculate fair value is extracted from the
market, with more reliable information available from markets that are actively traded. In this regard, fair values
for listed securities are obtained from quoted market bid prices. Where securities are unlisted, and no market
quotes are available, fair value is obtained using discounted cash flow analysis and other valuation techniques
commonly used by market participants.
Differences between fair values and carrying values of financial instruments with fixed interest rates are due to
the change in discount rates being applied by the market since their initial recognition by the group. Most of these
instruments which are carried at amortised cost (i.e. term receivables, held-to-maturity assets and loan liabilities)
are to be held until maturity and therefore the net fair value figures calculated bear little relevance to the group.
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
30 June 2018
Carrying
amount
$
Fair value
amount
$
30 June 2017
Carrying
amount
$
Fair value
amount
$
453,776
91,127
544,903
453,776
91,127
544,903
1,727,137
86,379
1,813,516
1,727,137
86,379
1,813,516
169,678
169,678
204,116
204,116
The fair values disclosed in the preceding table have been determined based on the following methodologies:
• Cash and cash equivalents, trade and other receivables, trade and other payables are short-term instruments
•
in nature whose carrying value is equivalent to fair value.
The trade and other receivables include the amounts receivable from taxation authorities and as such the
carrying value is equivalent to fair value.
CCP Technologies Limited
38
6 Other current assets
Current assets
Prepaid expenses
Deposits
Miscellaneous
7 Non-financial assets and liabilities
(a) Property, plant and equipment
Furniture, fittings and equipment
Gross value
Accumulated depreciation
Machinery and vehicles
Gross value
Accumulated depreciation
Consolidated entity
Year ended 30 June 2018
Opening net book amount
Additions
Depreciation charge
Closing net book amount
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
Consolidated entity
30 June
2018
$
30 June
2017
$
14,512
29,612
177
44,301
20,080
22,050
-
42,130
Consolidated entity
30 June
2018
$
65,102
(24,695)
40,407
2,960
-
2,960
30 June
2017
$
38,443
(14,281)
24,162
-
-
-
43,367
24,162
Furniture,
fittings and
equipment
$
Machinery
and vehicles
$
24,162
26,658
(10,413)
40,407
-
2,960
-
2,960
Total
$
24,162
29,618
(10,413)
43,367
CCP Technologies Limited
39
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
7 Non-financial assets and liabilities (continued)
(a) Property, plant and equipment (continued)
Consolidated entity
Year ended 30 June 2017
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
Furniture,
fittings and
equipment
$
Machinery
and vehicles
$
23,200
10,816
(1,726)
(8,128)
24,162
-
-
-
-
-
Total
$
23,200
10,816
(1,726)
(8,128)
24,162
(i) Revaluation, depreciation methods and useful lives
Property, plant and equipment is recognised at historical cost less depreciation.
Depreciation is calculated using the straight-line method to allocate their cost or revalued amounts, net of their
residual values, over their estimated useful lives as follows:
Furniture, fittings and equipment
•
• Machinery and vehicles
2 - 5 years
8 years
See note 22(w) for the other accounting policies relevant to property, plant and equipment.
(b) Provisions
Consolidated entity
30 June
2018
Non-
current
$
Current
$
30 June
2017
Non-
current
$
Total
$
Total
$
Current
$
Annual leave obligations
74,744
-
74,744
18,582
-
18,582
8 Discontinued operation
(a) Description
The discontinued operations reflect the assets still retained by CCP Technologies Limited following the reverse
acquisition of CCP Group. These assets consist of Thromboview a novel diagnostic test that uses a radiolabelled
humanised monoclonal antibody fragment specific for the D-dimer region of cross-linked fibrin to detect Deep
Vein Thrombosis and DiagnostiQ, its licenced technology for human health applications, specifically to meet to
need to carry out multiplexed affinity-based assays in low-resource or mobile settings.
At the date of this report effort to find a purchaser for both Thromboview and DiagnostiQ has proved
unsuccessful. The Board has determined that the Thromboview project should be abandoned and the materials
held be destroyed in accordance with regulatory requirements and best practice. No costs are incurred in
retaining DiagnostiQ and efforts for disposal remain on going. Existing patents and trademarks in respect of
existing biotechnology assets are being allowed to lapse. Licence fees, albeit small in dollar terms may still be
received until such time as the patents cease to exist.
CCP Technologies Limited
40
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
8 Discontinued operation (continued)
(b) Financial performance and cash flow information
In the comparative period, the financial year ended 30 June 2017, corporate expenses were incurred in relation
to the Thromboview asset as outlined in the table below:
Revenue
Corporate expenses
Loss before income tax
Income tax expense
Loss after income tax of discontinued operation
Net cash flows from operating activities
Consolidated entity
30 June
2018
$
-
-
-
-
-
-
30 June
2017
$
-
(21,559)
(21,559)
-
(21,559)
(14,179)
(c) Assets and liabilities of disposal group classified as held for sale
The following assets and liabilities were reclassified as held for sale in relation to the Thromboview discontinued
operation as at 30 June 2018:
Liabilities directly associated with assets classified as held for sale
Trade and other payables
Net assets
9 Equity
(a) Share capital
Consolidated entity
30 June
2018
$
30 June
2017
$
(21,658)
(21,658)
(34,608)
(34,608)
Ordinary shares - fully paid
349,678,422
8,400,628
284,014,118
6,909,610
30 June
2018
No.
30 June
2018
$
30 June
2017
No.
30 June
2017
$
CCP Technologies Limited
41
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
9 Equity (continued)
(a) Share capital (continued)
(i) Movements in ordinary shares
Details
Balance at 1 July 2016
Elimination of existing CCP group shares
Existing CCP Technologies Limited shares on acquisition (a)
Issue of CCP Technologies Limited shares on acquisition
Issue of securities in respect of public offer (b)
Issue of advisor securities for prospectus services rendered (c)
Issue of securities in settlement of liability
Issue of securities – refer milestone shares below
Issue of securities – placement
Issue of securities – rights issue
Less: Transaction costs arising on share issue
Balance at 30 June 2017
Issue of securities to consultants for services received
Issue of securities at $0.023 each – placement
Issue of securities at $0.023 each – share purchase plan
Less: Transaction costs arising on share issue
Balance at 30 June 2018
Number of
shares
$
2,762,865
1,212,910
(2,762,865)
31,455,158
109,600,000
60,000,000
1,700,000
400,000
3,000,000
30,523,273
47,335,687
-
-
1,572,758
-
3,000,000
85,000
20,000
-
518,896
804,707
(304,661)
284,014,118
6,909,610
1,947,000
21,739,126
41,978,178
-
70,000
500,000
965,500
(44,482)
349,678,422
8,400,628
Notes
(a)
(b)
(c)
The above amount represents the fair value of the reverse acquisition of CCP Technologies Limited. The fair value
was determined by reference to the net assets and market capitalisation of CCP Technologies Limited as at the date
of acquisition utilising the last available share price.
Issue of securities in respect of the prospectus dated 29 June 2016 at an offer price of $0.05.
Issue of advisor shares at fair value of $0.05 per security pursuant shareholder approval granted at the extraordinary
general meeting held on 29 July 2016. This amount is included as a share-based payment expense in the
consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2017.
(ii) Rights of each type of share
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one
vote, and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the company does not have a limited amount of authorised capital.
(iii) Milestone shares
Pursuant to the share sale agreement between the company and the shareholders of CCP group, additional
securities were to be issued to those shareholders on achieving the milestone targets set out in that agreement.
Ordinary securities were to be issued on the basis of one ordinary security for every five milestone shares held,
subject to meeting the milestone targets. In the event that milestone targets were not met those milestone shares
will be cancelled. The following is a summary of the movements in milestone shares for the financial year ended
30 June 2018.
CCP Technologies Limited
42
9 Equity (continued)
(a) Share capital (continued)
.
Milestone one
Additional milestone one
Milestone two
Additional milestone two
Milestone three
Additional milestone three
.
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
Allotted on
acquisition
Converted to
ordinary
securities
15,000,000
5,000,000
15,000,000
5,000,000
15,000,000
5,000,000
(15,000,000)
-
(15,000,000)
-
(15,000,000)
-
Lapsed
-
(5,000,000)
-
(5,000,000)
-
(5,000,000)
60,000,000
(60,000,000)
(15,000,000)
Balance held
at 30 June
2018
-
-
-
-
-
-
-
To be entitled to the issue of ordinary securities resulting from the additional milestone shares the milestone
targets, one, two and three had to be achieved within nine months of completion of the acquisition, being 13 June
2017. These additional milestone targets have not been met and the additional milestone shares have lapsed
and have been cancelled.
Milestone one target was achieving revenue of $200,000 from the sale or licencing of the CCP Solution within six
months of completion (i.e. 13 March 2017). In February 2017, the group entered into a contract for the sale of the
CCP Solution to a party in the United States. The board sought legal counsel opinion on the definition of the
terms of the share sale agreement rather than revenue as defined by the accounting standards. The legal opinion
was that the milestone one target had been achieved in accordance with the terms of the share sale agreement,
accordingly the ordinary securities were issued.
Milestone two target was achieving revenue of $750,000 within 12 months of completion (i.e. 13 September
2017) and first sales of the CCP Solution in the United States. Sales were achieved in the United States but the
revenue target of $750,000 was not met. Consequently, the milestone shares lapsed and have been cancelled.
Milestone three target was achieving revenue of $2,000,000 within 18 months of completion (i.e. 13 March 2018)
and first sales of the CCP Solution in Europe. Sales were achieved in the Europe but the revenue target of
$2,000,000 was not met. Consequently, the milestone shares lapsed and have been cancelled.
(iv) Options
Information relating to options, including details of options issued, exercised and lapsed during the financial year
and options outstanding at the end of the financial year, is set out in note 10.
(b) Other reserves
The following table shows a breakdown of the balance sheet line item ‘other reserves’ and the movements in
these reserves during the year. A description of the nature and purpose of each reserve is provided below the
table.
Consolidated entity
Balance at 1 July 2016
Currency translation differences
Other comprehensive income for the period
Transactions with owners in their capacity as owners
Share-based payment expenses
At 30 June 2017
Share-
based
payments
$
Foreign
currency
translation
$
Notes
Total
$
-
-
-
-
-
(10,418)
(10,418)
(10,418)
(10,418)
10
61,561
61,561
-
(10,418)
61,561
51,143
CCP Technologies Limited
43
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
9 Equity (continued)
(b) Other reserves (continued)
Balance at 30 June 2017
61,561
(10,418)
51,143
Currency translation differences
Other comprehensive income for the period
Transactions with owners in their capacity as owners
Share-based payment expenses
At 30 June 2018
-
-
(1,373)
(1,373)
(1,373)
(1,373)
10
88,181
149,742
-
(11,791)
88,181
137,951
(i) Nature and purpose of other reserves
Share-based payments
The share-based payment reserve records items recognised as expenses on valuation of share options issued to
KMP, employees and eligible contractors.
Foreign currency translation
Exchange differences arising on translation of the foreign controlled subsidiaries are recognised in other
comprehensive income and accumulated in a separate reserve within equity. The cumulative amount is
reclassified to profit or loss when the net investment is disposed of.
10 Share-based payments
(a) Unlisted options
Options
(i) Movement in options
Details
Balance at 1 July 2016
Issue of unlisted options at $0.10 each (CT101)
Issue of unlisted options at $0.10 each (CT102)
Issue of unlisted options at $0.00 each (CT103)
30 June
2018
No.
30 June
2018
$
30 June
2017
No.
30 June
2017
$
16,979,550
149,742
5,533,000
61,561
Notes
Number of
options
-
2,000,000
2,000,000
1,533,000
$
-
12,925
12,925
35,711
Balance at 30 June 2017
5,533,000
61,561
Issue of unlisted options at $0.10 each (CT104)
Issue of unlisted options at $0.10 each (CT105)
Amortised share-based payments for options issued in prior periods
10(b)
10(b)
1,446,550
10,000,000
-
4,565
11,393
72,223
Balance at 30 June 2018
16,979,550
149,742
(b) Options granted during the period
The following share-based payment arrangements were entered into during the financial year ended 30 June
2018 due to new options granted and vested:
CCP Technologies Limited
44
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
10 Share-based payments (continued)
(b) Options granted during the period (continued)
Type
Grant date Vesting date
Expiry date
Exercise
price ($)
No. of
options
Fair value
($)
Employee options (CT104)
Employee options (CT105)
.
10-Nov-2017
10-Nov-2017
25-Oct-2019
31-Dec-2019
25-Oct-2021
31-Dec-2020
0.10
0.10
1,446,550
10,000,000
15,000
40,690
For the options granted during the financial year ended 30 June 2018, the valuation model inputs used to
determine the fair value at the grant date are outlined below:
Type
.
CT104
CT105
Share price at
grant date ($)
Exercise
price ($)
Term in
years
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value per
option at
grant date ($)
0.019
0.019
0.10
0.10
4
3
118.7%
91.87%
0.00%
0.00%
2.38%
1.94%
0.0104
0.0041
(i) CT104
On 10 November 2017, CCP Technologies Limited issued 1,446,550 options to directors which vest on continued
service to vesting date (25 October 2019). The assessed fair value of options issued was determined with
reference to independent valuation performed by an independent external valuer. The fair value at grant date was
determined using the Black-Scholes option pricing model that takes into account the exercise price, term of the
option, security price at grant date and expected price volatility of the underlying security, the expected dividend
yield, the risk-free interest rate for the term of the security and certain probability assumptions.
(ii) CT105
On 10 November 2017, CCP Technologies Limited issued 10,000,000 performance rights (accounted for as
share options) to executive directors which vest on the event that the share price of CCP Technologies Limited
achieves the target (based on the three-month VWAP leading up to the vesting date) of $0.10 by the vesting date
(31 December 2019). The assessed fair value of options issued was determined with reference to an
independent valuation performed by an independent external valuer. The fair value at grant date is independently
determined using the Monte Carlo simulation that takes into account the exercise price, the term of the option,
the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, the
risk free interest rate for the term of the option and the correlations and volatilities of the peer group companies.
(c) Options outstanding at period end
Grant date
CT101 (granted: 18-Nov-2016)
CT102 (granted: 18-Nov-2016)
CT103 (granted: 15-Dec-2016)
CT103 (granted: 15-Dec-2016)
CT104 (granted: 10-Nov- 2017)
CT105 (granted: 10-Nov- 2017)
CT105 (granted: 10-Nov- 2017)
Expiry
date
Exercise
price
(AUD)
No. of share
options
30 June 2018
15-Dec-2020
15-Dec-2020
15-Dec-2019
15-Dec-2019
25-Oct-2021
31-Dec-2020
31-Dec-2020
$0.10
$0.10
Nil
Nil
$0.10
$0.10
$0.10
2,000,000
2,000,000
1,333,000
200,000
1,446,550
5,000,000
5,000,000
16,979,550
Weighted average remaining contractual life of options outstanding at end of period
2.47
CCP Technologies Limited
45
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
10 Share-based payments (continued)
(d) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee
benefit expense were as follows:
Expenses arising from options issued to key management personnel
Expenses arising from options issued to other employees
Ordinary shares issued to consultants
11 Loss per share
(a) Reconciliation of loss used in calculating loss per share
Basic and diluted loss per share
Loss attributable to the ordinary equity holders of the company used in
calculating loss per share:
From continuing operations
From discontinued operation
(b) Weighted average number of shares used as the denominator
Consolidated entity
30 June
2018
$
84,236
3,945
70,000
158,181
30 June
2017
$
56,906
4,655
85,000
146,561
Consolidated entity
30 June
2018
$
30 June
2017
$
(2,833,837)
-
(2,833,837)
(3,736,510)
(21,559)
(3,758,069)
Consolidated entity
2018
Number
2017
Number
Weighted average number of ordinary shares used as the denominator in
calculating basic and diluted loss per share
319,284,809
188,097,134
The outstanding options as at 30 June 2018 are considered to be anti-dilutive and therefore were excluded from
the diluted weighted average number of ordinary shares calculation.
CCP Technologies Limited
46
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
12 Cash flow information
Reconciliation of loss after income tax to net cash inflow from operating activities
Loss for the period
Adjustment for
Depreciation expense
Corporate restructure expense
Doubtful debts
Share-based payments
Unrealised net foreign currency (gains)/losses
Movement in trade and other receivables
Movement in other current assets
Movement in inventory
Movement in trade and other payables
Movement in payables that relate to finance activities
Movement in liabilities associated with assets for sale
Movement in borrowings
Movement in provisions
Fair value of net assets acquired
Net cash inflow (outflow) from operating activities
13 Financial risk management
Consolidated entity
30 June
2018
$
30 June
2017
$
(2,833,837)
(3,758,069)
10,413
-
41,865
158,181
(1,681)
(46,614)
5,391
-
(34,439)
-
(12,950)
-
56,163
-
(2,657,508)
8,128
1,308,938
-
146,561
6,037
(60,923)
(20,080)
10,100
221,272
(32,599)
34,607
(500,000)
-
263,820
(2,372,208)
The board is responsible for, amongst other issues, managing financial risk exposures of the group. The board
monitors the group's financial risk management policies and exposures and approves substantial financial
transactions. It also reviews the effectiveness of internal controls relating to counterparty credit risk, foreign
currency risk, liquidity risk and interest rate risk.
The overall risk management strategy seeks to assist the group in meeting its financial targets, whilst minimising
potential adverse effects on financial performance. Their functions include the review of the use of hedging
derivative instruments, credit risk policies and future cash flow requirements.
(a) Market risk
The main risks the group is exposed to through its financial instruments are market risks including foreign
currency risk, interest rate risk, liquidity risk and credit risk.
Foreign exchange risk
The group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations.
Foreign exchange rate risk arises from future commercial transactions and recognised financial assets and
financial liabilities denominated in a currency that is not the group's functional currency. Exposure to foreign
currency risk may result in the fair value of future cash flows of a financial instrument fluctuating due to the
movement in foreign exchange rates of currencies in which the group holds financial instruments which are other
than the AUD functional currency of the group. This risk is measured using sensitivity analysis and cash flow
forecasting.
With instruments held by overseas operations, fluctuations in the United States dollar and Indian rupee may
impact on the group’s financial results unless those exposures are appropriately hedged. The cost of hedging at
this time outweighs any benefits that may be obtained.
CCP Technologies Limited
47
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
13 Financial risk management (continued)
(a) Market risk (continued)
The following financial assets and liabilities are subject to foreign currency risk. The amounts in the table below
are segmented into columns stating the original currency, which are displayed in Australian dollars (AUD) at
year-end spot rates.
Consolidated entity
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Total exposure
30 June 2018
INR
$
SGD
$
38,151
9,553
827
48,531
-
3,197
-
3,197
USD
$
18,689
6,920
-
25,609
30 June 2017
INR
$
USD
$
38,019
-
-
38,019
13,860
65,125
8,141
87,126
Sensitivity
The group has conducted a sensitivity analysis of its exposure to foreign currency risk. The group is currently
exposed to the Indian rupee (INR), Singaporean dollar (SGD), and United States dollar (USD). The sensitivity
analysis is conducted on a currency by currency basis using the sensitivity analysis variable, which is based on
the average annual movement in exchange rates over the past five years at year-end spot rates. The variable for
each currency are listed below:
INR: 4.2% (2017: 4.5%)
SGD: 5.2%
•
•
• USD: 6.2% (2017: 7.2%)
The results of this sensitivity analysis are shown in the table below:
INR/AUD exchange rate - increase 4.2% (2017: 4.5%)
INR/AUD exchange rate - decrease 4.2% (2017: 4.5%)
SGD/AUD exchange rate - increase 5.2%
SGD/AUD exchange rate - decrease 5.2%
USD/AUD exchange rate - increase 6.2% (2017: 7.2%)
USD/AUD exchange rate - decrease 6.2% (2017: 7.2%)
(b) Credit risk
Consolidated entity
30 June
2018
$
2,184
(2,184)
166
(166)
1,844
(1,844)
30 June
2017
$
1,711
(1,711)
-
-
6,273
(6,273)
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of
contract obligations that could lead to a financial loss to the group.
Credit risk is managed through the maintenance of procedures (such as the utilisation of systems for the
approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring
the financial stability of significant customers and counterparties), ensuring to the extent possible that customers
and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing
receivables for impairment. Depending on size of the customer credit terms are normally 14 to 30 days from the
invoice date.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating.
Where the group is unable to ascertain a satisfactory credit risk profile in relation to a customer or counterparty,
the risk may be further managed by obtaining further security by way of personal or commercial guarantees over
assets of sufficient value which can be claimed against in the event of default.
Trade and other receivables that are neither past due or impaired are considered to be of high credit quality.
Aggregates of such amounts are detailed in note 13(b)(iii).
CCP Technologies Limited
48
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
13 Financial risk management (continued)
(b) Credit risk (continued)
(i) Credit quality
Credit risk related to balances with banks and other financial institutions is managed by the board of directors.
The policy requires that the majority of surplus funds are invested with counterparties with a Standard & Poor’s
rating of at least AA-. As at 30 June 2018, the group held cash and cash equivalents of $396,936 rated AA-, with
the remaining $56,840 held by lower-rated financial institutions. These lower rated financial institutions hold the
group's cash reserves for the subsidiaries in India and the United States.
Cash at bank and short-term bank deposits
AA rated
AA- rated
BBB- rated
Consolidated entity
30 June
2018
$
30 June
2017
$
-
396,936
56,840
453,776
1,675,258
-
51,879
1,727,137
Impaired trade receivables
(ii)
Individual receivables which are known to be uncollectible are written off by reducing the carrying amount
directly. The other receivables are assessed collectively to determine whether there is objective evidence that an
impairment has been incurred but not yet been identified. For these receivables the estimated impairment losses
are recognised in a separate provision for impairment. The group considers that there is evidence of impairment
if any of the following indicators are present:
•
•
•
significant financial difficulties of the debtor;
probability that the debtor will enter bankruptcy or financial reorganisation, and
default or delinquency in payments (more than 30 days overdue).
Receivables for which an impairment provision was recognised are written off against the provision when there is
no expectation of recovering additional cash.
Impairment losses are recognised in profit or loss as doubtful debts. Subsequent recoveries of amounts
previously written off are credited against doubtful debts.
Movements in the provision for impairment of trade receivables that are assessed for impairment collectively are
as follows:
At 1 July
Provision for impairment recognised during the year
Receivables written off during the year as Impaired trade receivables
Unused amounts reversed
At 30 June
Consolidated entity
30 June
2018
$
-
41,865
-
-
41,865
30 June
2017
$
-
-
-
-
-
(iii) Past due but not impaired
As at 30 June 2018, trade receivables of $16,604 (2017: $65,954) were past due but not impaired. These relate
to a number of independent customers for whom there is no recent history of default. The ageing analysis of
these trade receivables is as follows:
CCP Technologies Limited
49
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
Consolidated entity
30 June
2018
$
6,121
3,399
1,761
5,323
46,508
63,112
30 June
2017
$
65,168
589
132
65
3,656
69,610
13 Financial risk management (continued)
(b) Credit risk (continued)
Less than 30 days
31–60 days
61–90 days
More than 90 days
Within initial trade terms
(c) Liquidity risk
Liquidity risk arises from the possibility that the group might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities. The group manages this risk through the following
mechanisms:
preparing forward looking cash flow analyses in relation to its operating, investing and financing activities;
obtaining funding from a variety of sources;
•
•
• maintaining a reputable credit profile;
• managing credit risk related to financial assets;
•
•
investing cash with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
(i) Maturities of financial liabilities
The table below analyses the group's financial liabilities into relevant maturity groupings based on the remaining
period at the reporting date to the contractual maturity date. The amounts disclosed are the contracted
undiscounted cash flows.
Contractual maturities of
financial liabilities
At 30 June 2018
Trade and other payables
Total
Less than
6 months
$
169,679
169,679
At 30 June 2017
Trade and other payables
Total
204,116
204,116
(d) Capital risk management
6 - 12
months
Between
1 and 2
years
Between
2 and 5
years
Over 5
years
Total
contractual
cash
flows
Carrying
amount
(assets)/
liabilities
$
$
$
-
-
-
-
$
-
-
-
-
$
-
-
-
-
$
-
-
169,679
169,679
169,679
169,679
-
-
204,116
204,116
204,116
204,116
The group's objectives when managing capital are to safeguard the group's ability to continue as a going concern
and to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve
an optimal capital structure, the group may issue new shares or reduce its capital, subject to the provisions of the
group's constitution. The capital structure of the group consists of equity attributed to equity holders of the group,
comprising contributed equity, reserves and accumulated losses. By monitoring undiscounted cash flow forecasts
and actual cash flows provided to the board by the group's management, the board monitors the need to raise
additional equity from the equity markets.
CCP Technologies Limited
50
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
14 Contingent liabilities
The group had no contingent liabilities at 30 June 2018 (2017: nil).
15 Commitments
(a) Capital commitments
The group had no capital commitments at 30 June 2018 (2017: nil).
(b) Non-cancellable operating leases
The group leases various offices under non-cancellable operating leases expiring within two to eight years. The
leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are
renegotiated.
Commitments for minimum lease payments in relation to non-cancellable
operating leases are payable as follows:
Within one year
Later than one year but not later than five years
Consolidated entity
30 June
2018
$
30 June
2017
$
61,134
13,638
74,772
45,606
19,587
65,193
16 Events occurring after the reporting period
On 17 July 2018, CCP Technologies Limited announced commitments from strategic investors to raise $861,247
(before costs) by issue of 43,062,350 new ordinary shares at $0.02 per share. On 8 August 2018, the group
announced the successful completion of this private placement. Each subscriber in the placement also received a
two-year unlisted option, for each share issued, with an exercise price of $0.03, subject to shareholder approval
at the 2018 annual general meeting (AGM).
No other matter or circumstance has occurred subsequent to period end that has significantly affected, or may
significantly affect, the operations of the group, the results of those operations or the state of affairs of the group
or economic entity in subsequent financial years.
17 Key management personnel disclosures
The specified directors of CCP Technologies Limited during the financial year were:
Mr Michael White
Mr Anthony Rowley
Mr Leath Nicholson
Mr Anoosh Manzoori
Mr Adam Gallagher
Executive Director and Chief Executive Officer
Executive Director and Chief Operating Officer
Independent Non-Executive Chairman
Independent Non-Executive Director
Independent Non-Executive Director
The specified executives of CCP Technologies Limited during the financial year were:
Mr Gary Taylor
Chief Financial Officer (resigned 9 November 2017)
Mr Kartheek Munigoti
Chief Technical Officer
Mr Tom Chicoine
Mr Axel Striefler
President - CCP North Amercia (resigned 19 March 2018)
President - CCP North Amercia (appointed 19 March 2018)
CCP Technologies Limited
51
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
17 Key management personnel disclosures (continued)
(a) Key management personnel compensation
Detailed remuneration disclosures are provided in the remuneration report.
(b) Aggregate compensation
The aggregate compensation made to directors and other members of key management personnel of the group
is set out below:
Consolidated entity
30 June
2018
$
799,649
55,400
84,237
939,286
30 June
2017
$
768,005
51,223
70,032
889,260
Short-term employee benefits
Post-employment benefits
Share-based payments
Related party transactions are set out in note 18.
18 Related party transactions
Transactions with other related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated. The following transactions occurred during the year
ended 30 June 2018 with related parties:
Office rent and outgoings paid on an arm’s length commercial basis to Lagoon
Properties Pty Ltd, a company associated with Michael White and Anthony
Rowley in respect of the St Kilda office premises.
Consultancy fees paid to Nillahcootie Enterprises Pty Ltd, a company associated
with Michael White, in respect of the provision of sales and administrative
services.
Consultancy fees paid to Adtay Pty Ltd, a company associated with Gary Taylor,
in respect of the provision of sales services.
Consultancy fees paid to Skantech Pty Ltd, a company associated with Kartheek
Munigoti, in respect of the provision of IT technical support services.
Consultancy fees paid to Saks Technologies Pvt Ltd, a company associated with
Kartheek Munigoti, in respect of the provision of IT technical support services in
India.
Interest paid to Reefpeak Pty Ltd, a company associated with Craig Chapman in
respect of unsecured loan advanced pending completion of the acquisition.
Interest paid to Anthony Rowley in respect of unsecured loan advanced pending
completion of the acquisition.
Interest paid to Michael White in respect of unsecured loan advanced pending
completion of the acquisition.
Legal fees paid on normal commercial terms to Nicholson Ryan Lawyers Pty Ltd
(formerly Foster Nicholson Jones Lawyers Pty Ltd), a company associated with
Leath Nicholson.
Consolidated entity
30 June
2018
$
30 June
2017
$
20,533
32,763
-
-
10,720
7,753
28,342
17,920
-
-
-
-
205,575
422
140
140
25,753
37,501
CCP Technologies Limited
52
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
19 Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity,
its related practices and non-related audit firms:
BDO Audit Pty Ltd
Audit and other assurance services
Audit and review of financial statements
Total remuneration for audit and other assurance services
20 Parent entity financial information
Summary financial information
Consolidated entity
2018
$
2017
$
47,500
47,500
36,864
36,864
The individual financial statements for the parent entity show the following aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders' equity
Issued capital
Reserves
Share-based payments
Retained earnings
Profit or loss for the period
Total comprehensive income
30 June
2018
$
30 June
2017
$
533,810
2,000
535,810
169,319
-
169,319
(732,982)
1,752,841
63,160
1,816,001
193,499
-
193,499
(3,245,004)
83,191,180
81,700,163
4,813,740
(87,638,429)
4,725,559
(84,803,220)
366,491
1,622,502
(2,835,209)
(3,004,725)
(2,835,209)
(3,004,725)
CCP Technologies Limited
53
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
21 Interests in subsidiaries
CCP Technologies Limited had interests in the follow subsidiaries at 30 June 2018.
Name of entity
Principal place of
business
Country of
incorporation
Ownership interest held
by the group
CCP Network Australia Pty Ltd
CCP IP Pty Ltd
CCP Asia Pacific Pty Ltd
CCP Network North America Inc.
CCP IoT Technologies Pvt Ltd
Agen Limited
Agen Biomedical Limited
Melbourne
Melbourne
Melbourne
Australia
Australia
Australia
Minneapolis, MN Unites States
Bangalore
Melbourne
Melbourne
India
Australia
Australia
2018
%
100.0
100.0
100.0
100.0
100.0
100.0
100.0
2017
%
100.0
100.0
100.0
100.0
100.0
100.0
100.0
The percentage ownership stated above reflects the legal ownership structure of the group.
It is proposed that following destruction of all biotechnology related materials held on behalf of the Agen
companies, both Agen companies will be wound up by way of members’ voluntary liquidation in the 2019
financial year.
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, relief has been granted to all of
the above controlled entities of CCP Technologies Limited, that were incorporated in Australia (‘closed group’)
other than Agen Biomedical Limited and Agen Limited from the Corporations Act 2001 requirement for the
preparation, audit and lodgement of their financial reports.
CCP Technologies Limited
54
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
Contents of the summary of significant accounting policies
Basis of preparation
Principles of consolidation
Going concern
Discontinued operations
Critical accounting estimates
Parent entity information
Operating segments
Functional and presentation currency
Foreign currency transactions and balances
Income tax
Revenue recognition
Employee benefits
Share-based payments
Issued capital
Loss per security
Trade and other payables
Goods and services tax (GST) and foreign based value added tax (VAT)
Government grants
Current and non-current classification
Cash and cash equivalents
Trade and other receivables
Impairment
Property plant and equipment
Provisions
Patents and trademarks
Research and development
Financial instruments
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
(q)
(r)
(s)
(t)
(u)
(v)
(w)
(x)
(y)
(z)
(aa)
(ab) New accounting standards for application in future periods
Page
56
56
56
57
57
57
57
58
58
58
59
59
59
60
60
60
60
61
61
61
61
61
62
62
62
62
62
63
CCP Technologies Limited
55
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
22 Summary of significant accounting policies
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with the Corporations Act 2001,
Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and
International Financial Reporting Standards as issued by the International Accounting Standards Board. The
group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Material
accounting policies adopted in the preparation of these financial statements are presented below and have been
consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have been prepared in an accrual basis and are
prepared on historical costs, modified, where applicable, by the measurement at fair value of selected
non-current assets, financial assets and financial liabilities.
The accounting policies and methods of computation adopted in the preparation of this financial report are
consistent with those adopted and disclosed in the annual report for financial year ended 30 June 2017.
(b) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all the subsidiaries of CCP
Technologies Limited ('company’ or 'parent entity') as at 30 June 2018 and the results of all subsidiaries as set
out in note 21. CCP Technologies Limited and its subsidiaries together are referred to in these financial
statements as the ‘consolidated entity’ or ‘group’.
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.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated
entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the consolidated entity.
(c) Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and settlement of liabilities in the normal course of
business.
As disclosed in the financial statements, the consolidated entity has at 30 June 2018 cash and cash equivalents
of $453,776 (30 June 2017: $1,727,137). The consolidated entity also generated a loss after tax of $2,833,837
(30 June 2017: $3,758,069).
The ability of the consolidated entity to continue as a going concern is principally dependent upon one or more of
the following conditions:
•
•
the ability of the consolidated entity to raise sufficient capital and when necessary; and
the successful commercialisation of its intellectual property in a manner that generates sufficient operating
cash inflows.
These conditions give rise to material uncertainty, which may cast significant doubt over the consolidated entity’s
ability to continue as a going concern.
The directors believe that the going concern basis of preparation is appropriate due to its recent history of raising
capital and the significant progress made on exploiting its intellectual property.
Importantly the consolidated entity is incurring a rate of expenditure designed to enhance its prospects of
expanding into the North American market and hence generate sales. In the event that the company encounters
any difficulties in raising capital the board is comfortable that this expenditure can be scaled back to preserve
cash.
CCP Technologies Limited
56
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
22 Summary of significant accounting policies (continued)
(c) Going concern (continued)
Should the consolidated entity be unable to continue as a going concern, it may be required to realise its assets
and extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those
stated in the financial report. This financial report does not include any adjustments relating to the recoverability
and classification of recorded asset amounts or the amounts or classification of liabilities and appropriate
disclosures that may be necessary should the consolidated entity be unable to continue as a going concern.
(d) Discontinued operations
A discontinued operation is a component of the consolidated entity that has been disposed of or is classified as
held for sale and that represents a major line of business or area of operations, or is a subsidiary acquired
exclusively with a view to resale. The results of discontinued operations are presented separately on the face of
the profit or loss and other comprehensive income. Where a decision is made to treat a major line of business or
area of operations as discontinued the comparative information is restated to reflect as if that major line of
business or area of operations had been discontinued in the prior period.
(e) 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 group’s accounting policies.
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 the
historical experience and 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 consolidated entity considers that its judgements, estimates and assumptions will
not carry a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year.
Impairment of assets
(i)
The carrying values of non-financial assets are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable
amount. Recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets
(cash-generating units). Non-financial assets that suffer impairment are tested for possible reversal of the
impairment whenever events or changes in circumstances indicate that the impairment may have reversed.
Impairment exists when the carrying value of an asset exceeds its estimated recoverable amount. The asset is
then written down to its recoverable amount.
(ii) Share-based payments
The value attributed to share options issued is an estimate calculated using an appropriate mathematical formula
based on an option pricing model. The choice of models and the resultant option value require assumptions to be
made in relation to the likelihood and timing of the conversion of the options to shares and the value of volatility of
the price of the underlying shares. Refer to note 10 for more details.
(f) 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 20.
(g) Operating segments
Operating segments are presented using the ‘management approach’ where the information presented is on the
same basis as the internal reports presented to the chief operating decision makers (‘CODM’). The CODM is
responsible for the allocation of resources to operating segments and assessing their performance.
CCP Technologies Limited
57
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
22 Summary of significant accounting policies (continued)
(h) Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the group’s functional
currency.
(i) Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each of the group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian
dollars, which is CCP Technologies Limited’s functional and presentation currency.
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the
date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate.
Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date the fair
values were determined.
Exchange differences arising on the translation of monetary items are recognised in the profit and loss, except
where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other
comprehensive income, otherwise the exchange difference is recognised in the profit and loss.
Foreign operations
The financial results and position of foreign operations, whose functional currency is different from the group’s
presentation currency, are translated as follows:
•
•
Assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
Income and expenses are translated at average exchange rates for the period; and
• Retained earnings are translated at the exchange rate prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian
dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in
the statement of financial position. The cumulative amount of these differences is reclassified into profit and loss
in the period in which the operation is disposed of.
(j)
Income tax
The income tax expense or benefit is the tax payable on that period’s taxable income based upon the applicable
income tax rate for each jurisdiction, adjusted for changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment recognised in prior periods, where applicable.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it probable
that future taxable amounts will be available to utilise those temporary differences and unused tax losses. No
deferred tax assets have been recognised at reporting date.
CCP Technologies Limited ('the head entity for taxation purposes') and its wholly owned Australian subsidiaries
form part of a consolidated tax group under the tax consolidation regime. Subsidiaries acquired during the year
are automatically joined to the consolidated tax group as at the date of acquisition.
The head entity and each individual 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 the
group’ approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated
group.
CCP Technologies Limited
58
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
22 Summary of significant accounting policies (continued)
(j)
Income tax (continued)
The head entity has unused tax losses which have not been recognised as a deferred asset at this time as a
result no assets or liabilities arise under tax funding arrangements with the consolidated tax entity. In the event
that the tax consolidated group derives future taxable amounts to recoup unused tax losses, the tax funding
arrangement will ensure that the inter-company charge equals the then tax liability or benefit of each consolidated
tax group member, resulting in neither a contribution by the head entity to the subsidiaries nor a distribution by
the subsidiaries to the head entity.
(k) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the entity and specific criteria have been met for each of the group's activities as
described below. The group bases its estimates on historical results, taking into consideration the type of
customer, the type of transaction and the specifics of each arrangement.
The specific accounting policies for the group’s main types of revenue are explained in note 2.
Interest income
Interest income is recognised using the effective interest method. When a receivable is impaired, the group
reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the
original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest
income on impaired loans is recognised using the original effective interest rate.
(l) Employee benefits
(i) Short-term benefits
Provision is made for the group’s obligation for short-term employee benefits. Short-term employee benefits are
benefits (other than termination benefits) that are expected to be settled wholly within 12 months after the end of
the annual reporting period in which the employees render the related service, including wages, salaries and sick
leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the
obligation is settled.
The group’s obligation for short-term employee benefits such as wages, salaries and sick leave are recognised
as part of current trade and other payables in the statement of financial position. The group’s obligations for
employee annual leave and long service leave entitlements are recognised as provisions in the statement of
financial position.
(ii) Other long-term employee benefits
No other long-term benefits which are required to be recognised as non-current liabilities exist as at the date of
this report or the reporting period.
(m) Share-based payments
Equity settled share-based compensation benefits are provided to employees.
Equity settled transactions are awards of securities, or options over securities, which 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 the price of the securities.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity
over the vesting period. Fair value is independently determined using the Black-Scholes pricing option pricing
model that takes into account the exercise price, the term of the option, the impact of dilution, the securities price
at grant date and expected price volatility of the underlying securities, 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 other vesting provisions, if any.
CCP Technologies Limited
59
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
22 Summary of significant accounting policies (continued)
(m) Share-based payments (continued)
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions and considered to vest irrespective of whether or not that market condition has been met, provided all
other conditions are satisfied.
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 the
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 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.
(n) Issued capital
Ordinary securities are classified as issued capital.
Incremental costs directly attributable to the issue of new securities or options are shown in equity as a
deduction, net of tax, from the proceeds.
Milestone shares allotted on the acquisition of CCP group have no value until such time as the conditions
precedent in respect of achieving milestone targets are met. As such no value has been ascribed to the
milestone shares allotted or currently on issue at the end of the reporting period.
(o) Loss per security
Basic earnings per security is calculated by dividing the profit (loss) attributable to the owners of CCP
Technologies Limited excluding any costs of servicing equity other than ordinary securities, by the weighted
average number of ordinary securities outstanding during the reporting period, adjusted for bonus elements or
share consolidation elements in ordinary securities issued during the reporting period.
Diluted earnings per security adjusts the figures used in the determination of basic earnings per security to take
into account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary securities and the weighted average number of securities assumed to have been issued for no
consideration in relation to dilutive potential ordinary securities.
Outstanding options considered to be anti-dilutive are excluded from the diluted weighted average number of
ordinary shares calculation.
(p) Trade and other payables
Trade and other payables represent liabilities for goods and services received by the entity that remain unpaid at
the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid
within 30 days of recognition of the liability.
(q) Goods and services tax (GST) and foreign based value added tax (VAT)
Revenues, expenses and assets are recognised net of the amount of associated GST or VAT, except where the
amount of GST or VAT incurred is not recoverable from the appropriate Taxation Authority. In these
circumstances, the GST or VAT is recognised as part of the cost of acquisition of the asset or as part of an item
of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST or
VAT, where applicable. The net amount recoverable from or payable to the tax authority is shown as other
receivable or other payable in the statement of financial position.
Cash flows are presented on a gross basis. The GST or VAT, as applicable, 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 or contingencies are disclosed net of the amount of GST or VAT recoverable, or payable to the tax
authority.
CCP Technologies Limited
60
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
22 Summary of significant accounting policies (continued)
(r) Government grants
Government grants are recognised at fair value where there is reasonable assurance that the grant will be
received and all grant conditions will be met. Grants relating to expense items are recognised as income over the
periods necessary to match the grant to the costs it is compensating. Grants relating to assets are credited to
deferred income at fair value and are credited to income over the expected useful life of the asset on straight line
basis.
(s) 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 normal operating
cycle; it is held primarily for the purpose of trading; it is expected to be realised within twelve months after the
reporting date; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting period. All other assets are classified as non-current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the purpose
of trading; it is due to be settled within twelve months after the reporting period; or there is no unconditional right
to defer thee settlement of the liability for at least twelve months after the reporting period. All other liabilities are
classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
(t) Cash and cash equivalents
Cash and cash equivalents include 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 change in value. The consolidated entity has not
at any time during or since the end of the reporting period obtained bank overdraft facilities.
(u) Trade and other receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in the
ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting
period are classified as current assets. All other receivables are classified as non-current assets.
Trade and other receivables are initially recognised at fair value. Refer to note 5(a) for further discussion on the
determination of impairment losses.
(v)
Impairment
A financial asset (or group of financial assets) is deemed to be impaired if, and only if, there is objective evidence
of impairment as a result of one or more events (a “loss event”) having occurred, which has an impact on the
estimated future cash flows of the financial asset(s).
In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a
group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal
payments; indications that they will enter bankruptcy or other financial reorganisation; and changes in arrears or
economic conditions that correlate with default.
For financial assets carried at amortised cost (including loans and receivables) a separate allowance account is
used to reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible
measures of recovery, if management establishes that the carrying amount cannot be recovered by any means,
at that point the written-off amounts are charged to the allowance account or the carrying amount of the impaired
financial asset is reduced directly if no impairment amount was previously recognised in the allowance account.
When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated,
the Group recognises the impairment for such financial assets by taking into account the original terms as if the
terms have not been renegotiated so that the loss events that have occurred are duly considered.
CCP Technologies Limited
61
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
22 Summary of significant accounting policies (continued)
(w) Property plant and equipment
Office equipment is carried at cost as indicated less, where applicable, any accumulated depreciation and
impairment losses.
Office equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation
and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the
estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable
amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the
impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when
impairment indicators are present.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, An asset’s carrying
amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.at the end of each reporting period.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are recognised in profit or loss in the period in which they arise. When revalued assets are sold,
amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.
(x) Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefit will result and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the
reporting period.
(y) Patents and trademarks
Patents and trademarks are recognised at cost of acquisition. They have a finite life and are carried at cost less
any accumulated amortisation and any impairment losses. Patents and trademarks are amortised over their
useful lives ranging from 15 to 20 years. Where the future economic benefits or their useful life cannot be
determined with certainty the cost of acquisition of patents and trademarks are recognised as an expense when
incurred.
(z) Research and development
Expenditure during the research phase of project is recognised as an expense when incurred. Development
costs are capitalised only when the technical feasibility studies that the project is expected to deliver future
economic benefits and these benefits can be measured reliably.
Capitalised development costs have a finite useful life and are amortised on a systematic basis based on the
future economic benefits over the useful life of the project.
(aa) Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the entity commits itself to
either the purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is
classified “at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss
immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest
method, or cost.
CCP Technologies Limited
62
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
22 Summary of significant accounting policies (continued)
(aa) Financial instruments (continued)
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative
amortisation of the difference between that initial amount and the maturity amount calculated using the effective
interest method.
The effective interest method is used to allocate interest income or interest expense over the relevant period and
is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction
costs and other premiums or discounts) over the expected life (or when this cannot be reliably predicted, the
contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying amount with a
consequential recognition of an income or expense item in profit or loss.
The group does not designate any interests in subsidiaries, associates or joint ventures as being subject to the
requirements of Accounting Standards specifically applicable to financial instruments.
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are subsequently measured at amortised cost. Gains or losses are recognised in
profit or loss through the amortisation process and when the financial asset is derecognised.
(ii) Financial liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is
derecognised.
(ab)New accounting standards for application in future periods
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June
2018 reporting periods and have not been early adopted by the group. The company’s assessment of the impact
of these new standards and interpretations is set out below.
There are no other standards that are not yet effective and that would be expected to have a material impact on
the group in the current or future reporting periods and on foreseeable future transactions.
CCP Technologies Limited
63
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
22 Summary of significant accounting policies (continued)
(ab)New accounting standards for application in future periods (continued)
Title
Nature of change
Impact
AASB 9
Financial
Instruments
AASB 15
Revenue from
Contracts with
Customers
The new standard introduces new
requirements for the classification and
measurement of financial assets and liabilities
and includes a forward-looking ‘expected loss’
impairment model and a
substantially-changed approach to hedge
accounting. These requirements improve and
simplify the approach for classification and
measurement of financial assets compared
with the requirements of AASB 139.
The AASB has issued a new standard for the
recognition of revenue. This will replace AASB
118 which covers revenue arising from the
sale of goods and the rendering of services
and AASB 111 which covers construction
contracts.
The new standard is based on the principle
that revenue is recognised when control of a
good or service transfers to a customer.
The standard permits either a full
retrospective or a modified retrospective
approach for the adoption.
AASB 16
Leases
AASB 16 requires almost all leases to be
recognised on the balance sheet, as the
distinction between operating and finance
leases is removed. Under the new standard,
an asset (the right to use the leased item) and
a financial liability to pay rentals are
recognised. The only exceptions are short
term and low-value leases.
The accounting for lessors will not significantly
change.
The group performed a
detailed assessment of the
impact against each class of
financial instrument and
determined the expected
impact to be nil.
Management has performed
a preliminary assessment of
the impact of AASB 15 on the
recognition of revenue and
concluded that there would
be no material difference to
how revenue has been
recognised under the
prevailing accounting
standard for the subscription
fees received for the CCP
Solution.
It has been determined that
there will be a potential
impact on the treatment of
project work revenue under
AASB 15 as the group will
need to ensure revenue is
recognised in the correct
period based on the
satisfaction of performance
obligations. The extent of this
impact has been judged to be
not material in nature.
The standard will affect
primarily the accounting for
the group’s operating leases.
As at the reporting date, the
group has non-cancellable
operating lease commitments
of $74,772, see note 15.
The group expects that its
operating lease commitments
will be recognised on balance
sheet as an asset and a
liability. This standard will
also have an impact on
reported performance and
cash flows.
Application
date
Mandatory
for financial
years
commencing
on or after 1
January
2018.
Mandatory
for financial
years
commencing
on or after 1
January
2018.
Mandatory
for financial
years
commencing
on or after 1
January
2019.
CCP Technologies Limited
64
CCP Technologies Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
22 Summary of significant accounting policies (continued)
(ab)New accounting standards for application in future periods (continued)
Title
Nature of change
Impact
AASB 2016-5
Classification
and
Measurement of
Share-based
Payment
Transactions
This AASB has amended AASB 2
Share-based Payment to address:
a. The accounting for the effects of vesting
and non-vesting conditions on the
measurement of cash-settled share-based
payments;
b. The classification of share-based payment
transactions with a net settlement feature for
withholding tax obligations; and
c. The accounting for a modification to the
terms and conditions of a share-based
payment that changes the classification of the
transaction from cash-settled to equity-settled.
The group has determined
the expected impact to be nil
as the group did not:
a. Enter into cash-settled
share-based payments;
b. Have withholding tax
obligations on share-based
payments; and
c. Modify the terms and
conditions of share-based
payments from cash-settled
to equity-settled.
Application
date
Mandatory
for financial
years
commencing
on or after 1
January
2018.
CCP Technologies Limited
65
CCP Technologies Limited
Directors' declaration
30 June 2018
In the directors' opinion:
(a)
the financial statements and notes set out on pages 29 to 65 are in accordance with the Corporations Act
2001, including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
giving a true and fair view of the consolidated entity's financial position as at 30 June 2018 and of
its performance for the financial year ended on that date, and
(b)
there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable.
Note 22(a) confirms that the financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer required
by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of directors.
Mr Michael White
Executive Director and Chief Executive Officer
Melbourne
31 August 2018
CCP Technologies Limited
66
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of CCP Technologies Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of CCP Technologies Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2018, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional
Standards Legislation, other than for the acts or omissions of financial services licensees.
67
Material uncertainty related to going concern
We draw attention to Note 22(c) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
Key audit matters
Except for the matter described in the Material uncertainty related to going concern section, we have
determined that there are no other key audit matters to communicate in our report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2018, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
68
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 25 of the directors’ report for the
year ended 30 June 2018.
In our opinion, the Remuneration Report of CCP Technologies Limited, for the year ended 30 June
2018, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
M Cutri
Director
Brisbane, 31 August 2018
69
CCP Technologies Limited
Shareholder information
30 June 2018
The shareholder information set out below was applicable as at 28 August 2018.
A. Distribution of equity securities
Ordinary shares
394,166,170 fully paid ordinary shares are held by 906 individual shareholders, including 275 holders of less than
market table parcel. All ordinary shares carry one vote per share.
Analysis of numbers of equity security holders by size of holding:
Holding
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Other securities
No. of
holders
123
34
10
372
367
906
4,000,000 unlisted options vesting on 15 December 2018 and expiring on 15 December 2020 with an exercise
price of $0.10 per option.
1,533,000 unlisted options vesting on 15 December 2017 and expiring on 15 December 2019 with an exercise
price of $nil per option.
1,446,550 unlisted options vesting on 21 November 2019 and expiring on 20 November 2021 with an exercise
price of $0.10 per option.
10,000,000 share rights vesting on 31 December 2019 expiring on 31 December 2020 with an exercise price of
$0.10 per right.
B. Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
Ordinary shares
Number held
%
K&M HOLDINGS AUSTRALIA PTY LTD
MAINLINE SOLUTIONS PTY LIMITED
S & M FRENCH INVESTMENTS PTY LTD
PENTA GLOBAL BLOCKCHAIN FOUNDATION LTD
KARTHEEK MUNIGOTI SHANKAR RAO
FIRST GROWTH FUNDS LIMITED
MR MURRAY EDWARD BLEACH + MRS NORMA LEIGH EDWARDS
EQUITAS NOMINEES PTY LIMITED
SUPERFOS PTY LTD
SILVAN BOND PTY LTD
MR CRAIG GRAEME CHAPMAN
BLAMNCO TRADING PTY LTD
DENLIN NOMINEES PTY LIMITED
SCINTILLA STRATEGIC INVESTMENTS LIMITED
BRAVO FUTURA CAPITAL PTY LTD
MINSK PTY LTD
MR ANTHONY COBORELOS
MR KEVIN JOHN CAIRNS + MRS CATHERINE VALERIE CAIRNS
OKS AGX INC
34,488,473
33,249,873
28,984,983
28,062,350
22,047,080
12,500,000
11,631,929
11,260,869
6,652,173
6,000,000
5,224,818
4,800,000
4,750,000
4,500,000
4,124,200
3,752,570
3,200,000
3,157,499
3,145,533
8.75
8.44
7.35
7.12
5.59
3.17
2.95
2.86
1.69
1.52
1.33
1.22
1.21
1.14
1.05
0.95
0.81
0.80
0.80
CCP Technologies Limited
70
B. Equity security holders (continued)
Name
MR TENG LIP KOAY + MRS GNET KOOI KOAY
C. Substantial holders
Substantial holders in the company are set out below:
K&M HOLDINGS AUSTRALIA PTY LTD
MAINLINE SOLUTIONS PTY LIMITED
S & M FRENCH INVESTMENTS PTY LTD
PENTA GLOBAL BLOCKCHAIN FOUNDATION LTD
KARTHEEK MUNIGOTI SHANKAR RAO
D. Voting rights
CCP Technologies Limited
Shareholder information
30 June 2018
(continued)
Ordinary shares
Number held
%
2,580,000
234,112,350
0.65
59.40
Number held
%
34,488,473
33,249,873
28,984,983
28,062,350
22,047,080
8.75
8.44
7.35
7.12
5.59
The voting rights attaching to each class of equity securities are set out below:
(a)
Ordinary shares: on a show of hands every member present at the meeting in person or by proxy shall
have one vote and upon a poll each share shall have one vote.
Options: no voting rights.
(b)
E. Listing rule 4.10.19 disclosure
For the purpose of ASX Listing Rule 4.10.19, the board confirms that during the period from IPO date to 30 June
2018, the company used its cash and assets readily convertible to cash in a manner consistent with its stated
business objectives.
CCP Technologies Limited
71