A N N U A L R E P O R T 2 O 2 1
A B N 1 5 1 1 7 3 3 0 7 5 7
D I V E R S I F I E D
B A T T E R Y A N O D E
M A T E R I A L B U S I N E S S
S U P P O R T I N G T H E G L O B A L
T R A N S I T I O N T O C L E A N
E N E R G Y A N D E - M O B I L I T Y
BATTERY ANODE
MATERIAL
LITHIUM-ION BATTERY
RECYCLING
NATURAL
GRAPHITE
Western Australia and
Europe battery anode
material processing facilities
Recovery of carbon
anode material from
lithium-ion batteries
Scalable mining projects
for long-term supply of
natural graphite products
C O N T E N T S
Chairman's letter
Review of operations
Directors' report
Auditor's independence declaration
Financial statements
Directors' declaration
Independent auditor’s report
Shareholder information
Summary of tenements
Corporate directory
02
04
20
34
35
68
69
73
75
77
E C O G R A F L I M I T E D
A N N U A L R E P O R T 2 O 2 1
0 1
C H A I R M A N ' S L E T T E R
A T R A N S F O R M A T I O N A L Y E A R . . .
Climate change is the new global
reality and in response, global electric
mobility is rapidly becoming a new
reality. Electric vehicle manufacturers
are not just selling e-mobility but a
clean and green future. E-mobility and
battery storage for renewable energy
represent a major shift in technology
aimed at reducing carbon emissions
and fighting climate change.
In Europe alone, which is the
fastest growing market with over
24 gigafactories being built for
production of over 10 million electric
vehicles per annum, this clean
green mobility future is also being
mandated by law. The European
Commission and member country
regulations not only mandate the
transition to e-mobility but also
require EV and battery manufacturers,
throughout their entire supply chain,
to undertake sustainable and ethical
product sourcing, track and declare
the full carbon footprint of their cars,
implement block chain traceability
and ensure high levels of product
recycling.
Along with this paradigm shift to
e-mobility and battery storage is a
rapid and increasing demand for
battery minerals. No least of all,
along with cathode minerals, rapid
demand for battery graphite for
anode manufacturing. With graphite
representing 47% of the battery
minerals in a lithium-ion battery,
forecast demand for battery graphite
is growing exponentially.
ECOGRAF IS STRIVING
FOR POLE POSITION
TO MEET THIS
DEMAND. TO BECOME
A MAJOR GLOBAL
SUPPLIER OF GRAPHITE
PRODUCTS WITH AN
INTEGRATED MINE TO
BATTERY GRAPHITE
BUSINESS PLAN.
EcoGraf is striving for pole position
to meet this demand. To become
a major global supplier of graphite
products with an integrated Mine to
Battery Graphite Business Plan.
To not only supply the full range of
traditional and specialised battery
graphite products, but to do so with
the imperative that all products and
processes meet the highest standards
of ethical and environmental
sustainability and a low carbon
footprint. And beyond the new battery,
a solution for full recycling of spent
battery anode material so that battery
waste is reprocessed and recycled
back into the battery manufacturing
supply chain.
This means that our mine to battery
business plan not only covers the
entire graphite supply chain, but
also a circular closed loop recycling
strategy, whilst ensuring that the 'Eco'
appellation, synonymous with our
Company, is paramount at each stage
and with each product.
0 2
E C O G R A F L I M I T E D
A N N U A L R E P O R T 2 O 2 1
Minute attention has been paid in
ensuring that the highest possible
ESG and safety standards have been
incorporated with over $5 million
spent during the pre-development
phase for this purpose. This includes
full compliance with Equator Principles
and satisfaction of IFC Performance
Standards and World Bank
Environmental, Health and Safety
Guidelines. It includes a commitment
to share significant economic and
social benefits with the regional
community and the implementation
of mining and processing methods to
minimise the carbon footprint.
Product development initiatives, that
are tailored to customer needs, are
becoming a key focus influencing
final engineering design for our initial
Battery Anode Material Facility in
Western Australia.
The Epanko Project in Tanzania
contains metallurgically superior
quality graphite, and once in
production, this mine will be our
primary source of flake graphite. The
project is development ready.
A bankable feasibility study has been
completed, a mining licence granted,
comprehensive technical, financial
and ESG due diligence completed and
offtake arrangements are in place. The
project only awaits project financing.
Good progress been made during the
year on this front and discussions are
continuing with KfW-IPEX Bank and
leading Tanzanian financial institutions.
THE TEAM IS FULLY
FOCUSSED ON SEIZING
THE BATTERY MARKET
OPPORTUNITIES
BEFORE US, BECOMING
A SIGNIFICANT PLAYER
IN THE BATTERY
SUPPLY CHAIN.
Finally, I would like to thank my fellow
directors and the EcoGraf team for
their efforts during a transformational
year. I also wish to thank shareholders
for your continued support.
Robert Pett
Chairman
E C O G R A F L I M I T E D
A N N U A L R E P O R T 2 O 2 1
0 3
R E V I E W O F O P E R A T I O N S
O V E R V I E W
EcoGraf is building a diversified
battery anode material business
to produce high purity graphite
products for the lithium-ion battery
and advanced manufacturing markets.
Over US$30 million has been
invested to date to create two highly
attractive, development ready graphite
businesses.
The first new state-of-the-art EcoGraf
processing facility in Western
Australia will manufacture spherical
graphite products for export to Asia,
Europe and North America using a
superior, environmentally responsible
HFfree™ purification technology to
provide customers with sustainably
produced high performance battery
anode material. Subsequently, the
battery graphite production base will
be expanded to include additional
processing facilities in Europe and
North America to support the global
transition to clean, renewable energy
in the coming decade and the rapid
growth in battery materials.
In addition, the Company’s
breakthrough recovery of carbon
anode material from recycled
batteries, using its EcoGraf™ process,
will enable the recycling industry
to reduce battery waste and use
recycled carbon anode material to
improve battery lifecycle efficiency.
To complement these battery
graphite operations, the Company
is also advancing the TanzGraphite
natural flake graphite business,
with development of the Epanko
Graphite Project, which will supply
additional feedstock for the battery
anode material facilities and provide
customers with a long term supply
of high quality graphite products
for industrial applications such
as refractories, recarburisers and
lubricants.
PERTH
KWINANA-
ROCKINGHAM
INDUSTRIAL
AREA
EcoGraf
ROC K I N G H A M
0 4
E C O G R A F L I M I T E D
A N N U A L R E P O R T 2 O 2 1
FOUNDED ON A COMMITMENT
TO INNOVATION AND
SUSTAINABILITY, WE ARE
WORKING TOWARDS A
CLEAN ENERGY FUTURE
V A L U E P R O P O S I T I O N
THROUGH SUSTAINABILITY,
EFFICIENCY AND QUALITY
TANZGRAPHITE
EPANKO GRAPHITE MINING
PROJECT - TANZANIA
ECOGRAF
BATTERY ANODE MATERIAL
FACILITY - AUSTRALIA
RECYCLING
RECOVERY OF CARBON
BATTERY ANODE MATERIALS
tick
tick
tick
tick
tick
60,000tpa Natural Graphite
US$44.5m Annual EBITDA
38.9% Internal Rate of Return
US$211m Pretax NPV10
US$3B Forecast Contribution
to Tanzania
tick
tick
tick
tick
tick
20,000tpa Battery Graphite
US$35m Annual EBITDA
42.4% Internal Rate of Return
US$642m Pre-tax project NPV8
Payback ~3.3yrs
tick
tick
tick
tick
tick
Significant results 99.98%C
Production scrap – large market
Lower battery cost and emissions
Blended anode material opportunity
Modular recycling pilot plant
E C O G R A F L I M I T E D
A N N U A L R E P O R T 2 O 2 1
0 5
R E V I E W O F
O P E R A T I O N S
B A T T E R Y A N O D E M A T E R I A L B U S I N E S S
This new state-of-the-art development
has received endorsement from the
Federal Government through the
award of Major Project status and
Lead Agency status from the Western
Australian Government.
EcoGraf is actively working with the
Australian Critical Minerals Facilitation
Office, the Major Projects Facilitation
Agency, Austrade, Export Finance
Australia and the Western Australian
Department of Jobs, Tourism, Science
and Innovation to advance its new
facility and enhance Australia’s
position in the global lithium-ion
battery industry.
The battery graphite production
base is planned to be expanded to
include additional processing facilities
in Europe and North America to
support the global transition to clean,
renewable energy in the coming
decade.
THE COMPANY MADE
SIGNIFICANT PROGRESS
DURING THE YEAR TO
ACHIEVE KEY MILESTONES
FOR THE DEVELOPMENT
OF THE NEW 20,000TPA
BATTERY GRAPHITE
FACILITY IN WESTERN
AUSTRALIA.
AUSTRALIAN FACILITY
DEVELOPMENT FUNDING
The initial construction timeframe
for the 5,000tpa commercial scale
facility is 11 months, followed by
commissioning and final product
qualification. The Company then plans
to undertake a 12-month expansion
program to achieve a production level
of 20,000tpa.
EcoGraf will fund the initial phase of
the development using its existing
cash reserves from the successful
A$54.6 million institutional placement
completed in February 2021, with
the expansion phase to be financed
through a combination of cash
reserves and loan funding.
Export Finance Australia (the Australian
Government’s export credit agency)
has undertaken assessment on the
planned development, including
an evaluation of feasibility and
engineering studies, development
reports, market studies, technical
reviews and financial models. As a
result, EcoGraf has received a
non-binding letter of support from
Export Finance Australia to secure
a US$35 million loan facility for the
planned expansion, with any final
commitment of finance by Export
Finance Australia being subject to the
satisfaction of a number of conditions
customary for a loan of this nature.
This is an important milestone in the
Company’s development plans for the
new EcoGraf™ Battery Anode Material
Facility, which will be the first of its type
globally, providing battery and electric
vehicle manufacturers with sustainably
produced, high performance battery
anode material for lithium-ion batteries
and EcoGraf is pleased to be actively
supporting Australia’s critical minerals
processing strategy for the transition to
clean energy.
Financial modelling undertaken with
external consultants has confirmed
that the new Australian facility is
able to generate attractive economic
returns to support the proposed
debt financing, with a pre-tax project
NPV8 of US$642 million, internal
rate of return of 42.4% and annual
EBITDA of US$35 million (refer ASX
announcement Investor Presentation
and Business Update 12 February 2021).
PRE-CONSTRUCTION
PROGRAM
GR Engineering has been coordinating
a range of pre-construction early works
that includes final process testing of
mechanical shaping and purification
functions for detailed engineering
design works, permitting and approvals
for the Kwinana-Rockingham site and
power, gas and water site services.
The works program is proceeding on
schedule with key value enhancements
identified in product yields, reagent
usage rates and water recycling.
11 MONTHS
12 M ONT HS
Initial Construction - 5,000tpa
Expansion Program - 20,000tpa
EcoGraf Kwinana-Rockingham Processing Facility
0 6
E C O G R A F L I M I T E D
A N N U A L R E P O R T 2 O 2 1
A 20% improvement in expected
product yields has been
demonstrated as part of an
international mechanical shaping
program conducted in collaboration
with a leading equipment
manufacturer.
The program was completed using a
commercial scale plant and confirmed
the opportunity for the new facility to
produce three core product ranges to
maximise overall yield:
+ 15-16µm battery anode material
(SpG 16);
+ ultrafine SuperBAM (battery
anode material) products for high
performance battery applications
requiring improved energy
density characteristics, with a
typical price premium of 20-25%
over SpG 16; and
+ fines bi-products for use in
industrial and alkaline battery
applications.
The program demonstrated that
by improving the design of the
mechanical shaping plant, an overall
product yield in excess of 60% can
be achieved, compared to previously
reported yields of up to 50%.
Increased product yields enhance
operational efficiency and profitability.
A locked-cycle testing program
was also successfully undertaken
at pilot plant scale in collaboration
with a leading Australian research
organisation in May 2021. Six
cycles were completed, processing
spherical graphite through the multi-
stage EcoGraf™ HFfree™ purification
flowsheet to simulate operational
conditions and obtain final data to
undertake detailed engineering for
construction of the new Western
Australian facility. Excellent results
were obtained from filtrate recycling,
supporting reduced feed water
requirements while ensuring purity
levels meet customer specifications.
The removal of impurities was better
than anticipated with a 99.97% carbon
product outcome and the important
shape and physical properties of the
battery anode material were preserved
during the process.
A key design element of the new
EcoGraf™ Battery Anode Material
Facility is an on-site water treatment
and wastewater recycling plant to
enable 75% of water to be re-used
in the operation. Process water is
planned to be sourced from a nearby
wastewater facility, providing a low-
cost source of water for operational
requirements and the opportunity to
assist the Kwinana-Rockingham region
recycle this water resource. Data
provided by the locked-cycle program
and associated water analysis is being
used by EcoGraf to maximise water
recycling within the operation, leading
to lower production costs.
>60% YIELD
M AXI M IS E E FFI CI ENCY
AND P ROF ITABI LI T Y
75% WATER
TO BE REU SED I N OP ER ATION
E C O G R A F L I M I T E D
A N N U A L R E P O R T 2 O 2 1
0 7
R E V I E W O F
O P E R A T I O N S
PRODUCT DEVELOPMENT
SUSTAINABILITY FOCUS AND PRODUCT DEVELOPMENT INITIATIVES
+ Enhanced performance
+ Carbon additive to Cast/
+ AA, AAA, 8V alkaline battery,
+ Higher charge discharge
capacity
Grey Cast Steel & EAF Steel
manufacturing
NMC CEM material
END USE:
HYBRID CARS, SOLAR PANELS,
POWER TOOLS & 3C
END USE:
CAST & GREY CAST STEEL
FOUNDRY/ EAF FURNACE
END USE:
AA, AAA, LI-ION CEM
CATHODE & CAN COATING
0 8
E C O G R A F L I M I T E D
A N N U A L R E P O R T 2 O 2 1
APPOINTMENT OF KEY
EXECUTIVES
EcoGraf has appointed experienced
executives Mr Michael Chan and
Mr Shaun O’Neill to key positions with
the Company to drive the successful
construction and operation of the new
Battery Anode Material Facility.
PRODUCT DEVELOPMENT
AND SALES
Product testing is continuing with
anode and battery manufacturers as
part of on-going discussions relating
to sales arrangements and technical
collaboration. Product samples,
generated from the pre-construction
early works program conducted by
GR Engineering, are being provided
to prospective customers for detailed
analysis and battery performance
testing.
Assessment activities by potential
customers involve the evaluation of
detailed information about EcoGraf™
production processes, operational
efficiencies, HFfree™ process
sustainability advantages (including CO2
life cycle analysis), EcoGraf™ recycling
capabilities and development timing.
In addition to the market development
programs for the core battery anode
material products, the Company is
also in discussion with a number of
prospective customers in industrial
markets for the fines bi-products,
which will comprise approximately 35%
of total output.
As part of the Company’s research
and innovation strategy, new product
development programs have been
initiated to evaluate the future
production of value-added lithium-ion
battery and industrial graphite products
from the new EcoGraf™ Battery
Anode Material Facility. These new
opportunities (which include product
diversification and downstream
processing) will be progressed in
parallel with the construction program.
Discussions have commenced with
various third parties in relation to
potential collaboration on this product
development.
INTELLECTUAL PROPERTY
On 14 May 2021, the Company
filed international patent PCT/
AU2021/050453 to replace the
provisional patent application
(ref: 2020901589) relating to the
EcoGraf™ HFfree™ purification
process technology and the EcoGraf™
carbon anode recycling process.
The international patent application
preserves the priority date claimed in
the provisional patent registration.
The patent submission supports
the Company’s EcoGraf™ product
trademarks that have been registered
in all key markets.
P URI FI ED B AT T ERY ANO DE
M ATE RI AL UP TO
99.97%
E C O G R A F L I M I T E D
A N N U A L R E P O R T 2 O 2 1
0 9
R E V I E W O F
O P E R A T I O N S
EUROPEAN BATTERY ANODE
MATERIAL FACILITY
The Company has signed a land
reservation agreement for an industrial
site in Skellefteå, Sweden in northern
Europe as a potential location for a
European EcoGraf™ HFfree™ Battery
Anode Material Facility.
The reservation agreement has
been entered into with the Skellefteå
municipality for a 65,000m2 site within
Skellefteå Site East, which is one of
Skellefteå’s main industrial areas and is
located within the Västerbotten region.
This region benefits from an abundant
supply of clean, renewable energy with
the lowest industrial power costs in
Europe, an educated and skilled labour
force and a nearby port for ready
access to key battery and industrial
markets across Europe.
After completing a preliminary
evaluation to select the site, EcoGraf
will now proceed to undertake a more
detailed assessment of a potential
new development in Skellefteå.
The industrial site is of sufficient
size to include future expansions to
accommodate increased production,
further downstream value adding and
battery anode recycling.
Skellefteå has a long tradition of
industrial development and is a
leader in promoting innovation,
entrepreneurship and sustainability,
with the largest private sector in
northern Sweden.
This is one of three potential country
locations under evaluation for the
development of an EcoGraf™ Battery
Anode Material Facility in Europe. All
the sites are in established industrial
centres with excellent access to major
battery manufacturers, skilled labour,
infrastructure, green power and
process reagents.
Discussions are continuing with
Government trade and investment
departments, battery manufacturers
and local municipalities to assess
these alternative locations.
Government trade and investment
agencies are also providing EcoGraf
with introductions to potential EU
customers and development partners.
Establishment of a European facility
is expected to include battery
anode recycling activities to support
customers in achieving battery
re-purposing and re-use commitments
under EU climate change legislation.
65,000m2 SITE
I NDUSTRI AL SIT E I N SKE LL EF TE Å, SWEDEN
4
NORTHERN EUROPE
SKELLEFTEÅ
4
LOCATION
TBA
S W E D E N
15
WESTERN EUROPE
8
EASTERN EUROPE
SKELLEFTEÅ
S W E D E N
S K E L L E F T E Å
INDUSTRIAL
SITE
S K E L L E F T E Å
INDUSTRIAL
= Gigafactories
SITE
∑ ~ 1,0 0 0 GW H/ A LI T HI UM -I ON B ATT E RY C ELL
P ROD UCTI ON CAPAC IT Y AN NO UNC ED U NTIL 2 030
Source: Roland Berger as at mid July 2021
1 0
E C O G R A F L I M I T E D
A N N U A L R E P O R T 2 O 2 1
L I T H I U M - I O N B A T T E R Y R E C Y C L I N G B U S I N E S S
THE ADDITION OF
ECOGRAF’S RECYCLING
APPLICATION, USING ITS
HFFREE™ PROPRIETARY
PURIFICATION PROCESS,
PROVIDES A UNIQUE AND
VERTICALLY INTEGRATED
BUSINESS THAT
MEETS THE NEW AGE
REQUIREMENTS FOR
RAW MATERIALS.
During the year, recycling programs
continued with a range of battery
industry participants operating in
Australia, Asia and Europe.
The Company plans to recover and
re-use carbon anode materials from
two feedstock material streams:
+ Production scrap or waste
from anode cell and battery
manufacturing processes; and
+ Residual carbon materials
that remain after metals
have been extracted through
hydrometallurgical processing from
end-of-life batteries.
The process to recover carbon anode
material from production waste and
black mass materials utilises the
EcoGraf HFfree™ purification process
developed to produce battery anode
material from natural flake graphite.
The EcoGraf HFfree™ purification
process is a unique, staged process
where impurities are removed
through the creation of new chemical
compounds that are soluble in either
water or chemical reagents.
All steps in the process are completed
in a manner that preserves the
important physical properties of the
graphite spheres, such as low specific
surface area, high tap density and
narrow particle size distribution.
The process recovers carbon anode
material from production scrap,
which includes both carbon and cell
manufacturers' scrap, in the
lithium-ion battery. The development
of product samples comprises both
the recycling of the recovered carbon
anode material back into the battery
supply chain to support the circular
economy and the re-use in industrial
applications.
Recycling provides an opportunity to
support electric vehicle and battery
manufacturers achieve sustainable,
closed-loop manufacturing processes
as part of the global effort to develop
a circular economy through
zero-waste batteries to address the
growing environmental costs from
end-of-life batteries and to improve
battery manufacturing efficiencies.
98.6-99.98%C
RE SULTS OF P URI FI ED
P ROD UCTI ON WASTE
98-99.8%C
RE SULTS OF P URI FI ED
BLACK M ASS
1 1
ECOGRAF LIMITED ANNUAL REPORT 2O21 R E V I E W O F
O P E R A T I O N S
RECYCLING STRATE GY F OR REC OVERE D ANO DE M AT E R I AL
BAT TE RY R ECYCLING
OP P ORT UNI TY
MARKET OVERVIEW
Recycling efforts have focused
on cathode metals
Carbon anode materials are
currently not recovered
BENEFITS AND OPPORTUNITY
Reducing battery production costs
Production Scrap: Carbon material
which is a waste product generated
from each stage of battery anode
manufacturing, cell manufacturing
and battery testing.
Black Mass: Carbon material
remaining after hydro-metallurgical
processes have recovered the high
value cathode metals from end-of-
life lithium-ion batteries
Lowering the EV carbon footprint
1 2
ECOGRAF LIMITED ANNUAL REPORT 2O21 COLLABORATION WITH
SUNGEEL HITECH
EcoGraf has entered into an
agreement with SungEel HiTech
(SungEel) to evaluate the recovery of
carbon anode material from battery
materials produced at SungEel’s
South Korean recycling plant using
the EcoGraf™ HFfree™ purification
process. The objective is to include a
tailored EcoGraf™ recycling process in
SungEel’s proposed recycling plants in
Europe and South Korea.
Under the SungEel collaboration
program, the parties are conducting
joint product testing and market
development activities for recycled
battery anode material and SungEel is
evaluating potential co-investment in a
modular EcoGraf™ recycling pilot plant
designed by GR Engineering.
The collaboration with SungEel on
recycling will support the creation of
closed loop manufacturing processes
across the battery supply chain to
improve environmental performance
and operational efficiency.
SungEel is a major lithium-ion
battery recycling company and is
well connected to the South Korean
lithium-ion battery supply chain, which
includes both electric vehicle and
battery manufacturers. It currently
processes 24,000 tonnes of
lithium-ion battery materials per year
in South Korea, with plans to increase
its capacity to 56,000 tonnes per year.
On 27 July 2021, the Company
reported the results of recent
recycling testing with SungEel that
successfully achieved 99.98% carbon,
whilst retaining the original physical
characteristics of the anode material
sample. The product quality results
are consistent with major lithium-ion
battery manufacturer specifications.
The anode production sample
used in the recycling testing is
representative of production anode
scrap materials from lithium-ion battery
cell manufacturing processes. Battery
manufacturers currently generate
several thousand tonnes of this
material each year and the volume is
expected to increase significantly with
the global transition to electric vehicles.
SungEel will submit the purified
recycled product to a South Korean
lithium-ion battery manufacturer for
battery cell tests and evaluation, to
assess the potential to recycle this
material back into the lithium-ion
battery supply chain.
REC OVER AND REUSE CARBO N ANOD E MAT ER I AL
99.98%C
RE SULTS OF RE CYCLED
ANODE M AT E RI AL
+
AGRE E ME NT S IGN ED WITH
SO UTH KORE A’ S LAR GEST
LI B RE CYCL ING G RO UP
1 3
ECOGRAF LIMITED ANNUAL REPORT 2O21 R E V I E W O F
O P E R A T I O N S
MODULAR RECYCLING
PILOT PLANT
GR Engineering has completed
engineering designs for a modular
carbon anode recycling pilot plant that
will be used to optimise the recycling
process and provide recovered carbon
anode material for prospective customer
product qualification processes.
The pilot plant will evaluate the
recovery of lithium-ion battery carbon
anode material from a range of
hydrometallurgical processes and
from in-process production waste,
enabling the Company to develop
tailored solutions for specific customer
requirements.
The design utilised recently completed
locked cycled testwork to optimise
plant and equipment sizing and
provides flexibility to accommodate
variations in feedstocks and locations.
Plant capability and key features
include:
+ Capital cost A$5.8m;
+ Treatment rate of 50-100kg/hour;
+ Operates as a standalone facility
with throughput rates based on a
single shift, 5-day operating week;
+ Plant is self-sufficient except for
utilities of power, gas and water;
+ Variable screening and treatments
included in the feed to the EcoGraf
HFfree™ purification process;
+ Dust and gaseous emission levels in
accordance with the appropriate
EU environmental standards;
+ Storage capacity for incoming
material and outgoing product; and
+ Inclusion of technical office and
laboratory.
The plant purification will have the
ability to optimise the flowsheet for
alternative sources of production
scrap and black mass feedstocks and
to provide larger product samples to
customers operating in the lithium-ion
battery sector.
A$5.8M
E ST IM ATE D
CAPI TAL C OST
50-100KG/HR
T REAT M ENT RAT E
FLEXIBLE
TO AC C O MM ODATE VARIOUS
LOCATI ONS, F EE DSTOC K AND
CUSTOM ER R EQUI RE M EN TS
1 4
ECOGRAF LIMITED ANNUAL REPORT 2O21 N A T U R A L F L A K E G R A P H I T E B U S I N E S S
The Epanko Graphite Project
(“Epanko” or the “Project”) (EGR:100%)
is a long life, highly profitable graphite
project located approximately 370km
from the city of Dar es Salaam in
Tanzania. It is forecast to produce
60,000 tonnes of natural flake
graphite products each year.
THE COMPANY’S NATURAL
FLAKE GRAPHITE
BUSINESS IS FOCUSSED
ON DEVELOPMENT OF THE
LONG-LIFE, HIGH QUALITY
EPANKO GRAPHITE
PROJECT IN TANZANIA.
Extensive work has been completed
at Epanko to establish a development-
ready new graphite mine, including:
+ Completion of a Bankable
Feasibility Study (BFS) that
demonstrates a highly attractive
development opportunity with a
modest investment of
US$89 million and a robust
business case, generating annual
EBITDA of US$44.5 million;
+ Government grant of mining licence
and environmental approvals;
+ Comprehensive Independent
Engineer’s Review by SRK
Consulting on behalf of lenders,
confirming technical aspects of
the proposed development and
that the Equator Principles social
and environmental planning
regime satisfies International
Finance Corporation Performance
Standards and World Bank Group
Environmental, Health and Safety
Guidelines;
+ Flake graphite sales for key
markets in Asia (Sojitz Corporation)
and Europe (thyssenkrupp and a
large European graphite trading
group);
+ Target cost EPC arrangements for
construction of Epanko with GR
Engineering; and
+ Debt financing program in progress
with international banks and
Tanzanian financial institutions.
In mid-March, HE Samia Suluhu
Hassan was appointed President
of Tanzania and has proceeded to
implement a range of reforms to
encourage more foreign investment in
the country. These policy changes are
expected to assist EcoGraf finalise the
Epanko financing arrangements and
commence development.
US$44.5M
ANNUAL EB ITDA
60,000TPA
NATUR AL F LAK E GRAP HITE
1 5
ECOGRAF LIMITED ANNUAL REPORT 2O21 R E V I E W O F
O P E R A T I O N S
DEVELOPMENT FUNDING
EcoGraf continues to progress
debt financing arrangements for
construction of the Epanko Graphite
Project that have been developed with
German Government development
bank KfW IPEX-Bank. As previously
reported, after extensive engagement
with the Tanzanian Ministry of
Minerals, Mining Commission, Ministry
of Finance and the Bank of Tanzania, a
funding structure has been developed
that complies with Tanzania’s new
mineral legislation relating to offshore
banking arrangements.
The proposed funding arrangements
have been presented to Government
and private sector financing
institutions in Tanzania, who have
indicated interest in participating in the
development.
Initial due diligence activities have
been conducted by those institutions
and discussions are continuing
to agree on a bankable debt
financing structure to enable the
parties to progress their respective
due diligence and credit approval
processes.
In parallel, EcoGraf participated
in an industry workshop held by
the Tanzanian Government on
12 April 2021 to receive industry
feedback on regulations for the 16%
Government free-carried interest in
mining developments. The workshop
provided an opportunity for Tanzanian
mining companies to put forward
proposals for regulatory changes to
encourage and accelerate increased
mining investment, which were then
submitted by the Tanzanian Chamber
of Mines to the Government.
EPANKO ENHANCEMENT
STUDIES
A number of enhancement activities
are continuing, including the definition
of low cost ‘fresh rock’ graphite to
deliver a high purity 99%C graphite
battery anode feedstock without
additional processing and the
evaluation of low-impact, continuous
mining methods, both of which will
also add to Epanko’s strong ESG
credentials.
SECTOR LEADING ESG
CREDENTIALS
The Epanko bankable feasibility study
social and environmental planning
programs have been conducted
in compliance with the Equator
Principles, a globally recognised risk
management framework adopted
by leading financial institutions for
assessing and managing social
and environmental risks in new
developments.
Achieving this standard and satisfying
International Finance Corporation
Performance Standards and World
Bank Group Environmental, Health
and Safety Guidelines is critical to
securing international financing
support for the new development
and reflects EcoGraf’s commitment
to the ensuring the highest level of
Environmental, Social and Governance
operating standards.
Epanko will provide significant
economic and social benefits for the
regional community near Mahenge in
Tanzania and will support Tanzania’s
positive industrialisation progress.
POSITIVE ECONOMIC IMPACT
The Project has strong economics
and in addition to generating a
pre-tax NPV10 of US$211m for
shareholders, will make a long-term,
inter-generational contribution to
economic, industrial and social
development within Tanzania. It is
expected to operate for over 40 years,
during which time it is forecast to
directly contribute over US$3 billion to
Tanzania through local employment,
procurement, royalties, taxes and
dividends. Over 95% of the 300
permanent staff will be Tanzanian, with
an estimated 4,500 indirect jobs to be
supported by the operation.
>40 YEARS
OF M INE O PE RAT I ON
US$3B
DI RE CT C ONTRI BU TION
TO TANZ ANI A
300
DI RE CT E M PLOYM E NT
4,500
I NDI RECT JOB S
1 6
ECOGRAF LIMITED ANNUAL REPORT 2O21 E N V I R O N M E N T A L , S O C I A L A N D G O V E R N A N C E
EcoGraf is committed to ensuring strong environmental, social and governance standards across all areas of its operations. Its
diversified battery anode material business is founded on a vision to support the global transition to clean, renewable energy
through innovation and sustainability.
The Company has implemented a comprehensive Corporate Governance Plan that provides a framework for the effective
strategic direction and management of its business activities and includes the following:
Charters and Codes
Board Charter
Code of Conduct
Policies
Performance Evaluation Policy
Continuous Disclosure Policy
Audit and Risk Committee Charter
Risk Management Policy
Remuneration Committee Charter
Nomination Committee Charter
Trading Policy
Diversity Policy
Shareholder Protection Policy
Whistle-blower Protection Policy
Anti-Bribery and Anti-Corruption Policy
The charters, codes and policies have
been developed under the guidance
of the ASX Corporate Governance
Council’s 4th Edition of the Corporate
Governance Principles and
Recommendations, the Corporations
Act 2001 and independent external
advice. Collectively, they reinforce
and promote a culture of good
corporate citizenship across the
organisation in relation to strategic
oversight, stakeholder relations,
regulatory compliance, business
conduct, personal behaviours and risk
management.
A copy of the Corporate Governance
Plan, the annual Corporate
Governance Statement and the
EcoGraf Constitution are available on
the Company’s website at:
www.ecograf.com.au.
In terms of environmental
performance, EcoGraf is a leader
within its sector and environmental
sustainability is critical to the
successful development of its
businesses and a key priority in its
planning and development decisions.
The Company has led the way within
the graphite market in developing
a new, highly effective and more
eco-friendly battery anode material
purification process that can also be
applied to recycle battery anodes.
1 7
ECOGRAF LIMITED ANNUAL REPORT 2O21 R E V I E W O F
O P E R A T I O N S
Key environmental aspects of each of
the Company’s businesses include:
ECOGRAF™ BATTERY ANODE
MATERIAL PROCESSING
+ Development of EcoGraf™ HFfree™
processing technology to eliminate
the use of hydrofluoric acid in the
manufacture of battery anode
material and a new state-of-the-
art facility engineered to achieve
leading international operating
standards;
+ Use of Life Cycle Assessment
analysis to support global CO2
reduction initiatives;
+ Selection of the site location in
an existing industrial precinct that
has no impact on visual or noise
amenity;
+ Implementation of a zero-waste
operating strategy focussed on
an active product development
program to value-add all bi-product
material produced at the new
facility and to provide product
additives for use in green steel
production;
+ Use of locally available wastewater
and recycling of 75% of process
water used in the operation; and
+ Potential for sustainable power
to be supplied from nearby
waste-to-energy facilities and for
supplemental power requirements
to be sourced via solar panels.
+ Opportunity to support global
battery recycling initiatives to
reduce CO2 emissions from the
manufacture of electric vehicles and
to lower battery life cycle costs; and
+ Enables electric vehicle and battery
manufacturers to adopt closed-
loop supply chains to maximise
production efficiencies and meet
stringent legislative requirements
for recycling.
NATURAL FLAKE GRAPHITE
PRODUCTION
+ Completion of the Epanko bankable
feasibility study in accordance
with the Equator Principles
(an internationally recognised
risk management framework,
adopted by financial institutions,
for determining, assessing and
managing environmental and social
risk in projects);
+ Independent review by SRK
Consulting confirming that
environment and social planning
satisfies the International Finance
Corporation Performance
Standards and the World Bank
Group Environmental, Health and
Safety Guidelines;
+ Funding support from German
Government development
bank KfW IPEX-Bank with
loan arrangements linked
to environmental and social
performance; and
ECOGRAF™ BATTERY ANODE
RECYCLING
+ Power sourced through sustainable
hydro-facilities.
+ Successful application of the
EcoGraf™ purification technique
to recover carbon anode material
from lithium-ion battery production
waste and end-of-life batteries;
Social responsibility is also
fundamental to the success of
EcoGraf and a key priority in its
corporate and project development
activities. The Company maintains a
strong commitment to stakeholder
engagement and actively participates
in community and regional
development initiatives.
In Tanzania, development of the
Epanko Graphite Project will deliver
inter-generational economic and
social benefits over an estimated
40+ years of operation. Nationally,
it is forecast that over US$3 billion
will be contributed to Tanzania
through employment, procurement,
royalties, taxes and dividends, with
over 95% of the permanent staff
to be recruited locally. This will
also provide the opportunity for
other benefits through training and
development, construction of new
community facilities and support for
local businesses and community
organisations.
EcoGraf participates in various
research and economic development
forums in Australia and Europe to
encourage the discovery of new
clean energy technologies that can
accelerate the achievement of global
climate change goals and provide new
areas of economic growth and future
career opportunities.
Promoting sector leading
environmental, social and corporate
governance practices is a key focus
for the Company as it continues to
expand its operations and generate
sustainable long-term shareholder
value.
1 8
ECOGRAF LIMITED ANNUAL REPORT 2O21 E C O G R A F - P O S I T I O N E D F O R G R O W T H
A C R O S S T H E B A T T E R Y S U P P LY C H A I N
EC OGRAF’S VERTI CALLY INTE GRATED PRO D UCT F LOW
PRODUCT DEVELOPMENT
Value enhancement of bi-product fines. Supporting the
transition to clean energy and advanced manufacturing.
3
2
4
LI TH I UM -I ON
ANODE DE M AN D
TO DRI VE
GROWTH
ACRO SS 5 KEY AREAS
5
1
NAT URAL
GRAPHITE
Scalable mining projects for
long-term supply of natural
graphite products. Epanko
Stage 1 - 60,000t.
BATTERY ANODE
MATERIAL
Battery anode material
processing facilities. 1st Plant:
Australia, 2nd Plant: Europe,
Others: Asia/US/India.
DOWNSTREAM
INNOVATION
OPPORTUNITIES
Enhanced Coatings.
LITHIUM-ION BATTERY
RECYCLING
Recovery of carbon anode
material from lithium-ion
batteries. Pilot plant scalable to
demonstration plant.
1 9
ECOGRAF LIMITED ANNUAL REPORT 2O21 D I R E C T O R S '
R E P O R T
BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT
Robert Pett
Independent Non-Executive Director and Chairman
Robert Pett is a minerals economist with over 30 years’ experience working in exploration and mining. During this time, he
has worked internationally in the resources sector at senior levels both in Australia and Africa. He has been involved with
listed companies at all levels, from grass-roots exploration through to mine development, production and financing of more
than ten mining projects globally including East and West Africa and the construction of the Golden Pride Gold Mine in
Tanzania.
He was founding Chairman of Resolute Mining Limited (gold mines and exploration Africa and Australia), Sapphire Mines
Limited (gemstone mining and exploration), Reliance Mining Limited (nickel mining Kambalda), Senex Energy Limited
(petroleum production and exploration) and director of several other mining and exploration companies operating in Africa,
Asia and Australia in gold, base metals, petroleum and uranium.
Robert has also had an active involvement in education and community activities including over 10 years’ service to Murdoch
University Western Australia as Senator and Chairman of their Resources (Finance) Committee.
Andrew Spinks Managing Director
Andrew Spinks is a geologist with over 25 years’ professional experience in Australia, Asia and Africa on a range of
commodities including speciality and industrial minerals.
Andrew has worked in a range of diverse roles across exploration through to successful project developments, and has held
a number of board positions on both ASX and TSX.V listed companies.
Andrew was co-founder of TanzGraphite Pty Ltd and has been Managing Director of EcoGraf since its acquisition.
John Conidi
Independent Non-Executive Director
John Conidi is a Certified Practicing Accountant. He has over 20 years’ experience developing, acquiring and managing
businesses in the technology and healthcare sectors. In his role as Managing Director of Capitol Health Limited, he drove its
sustained expansion, increasing its market capitalisation, significantly.
John has extensive interests in the graphite sector. He is an experienced investor specialising in technology and resources
and is the Chairman of 333D Limited, that with EcoGraf, jointly owns 3D Graphtech Industries Pty Ltd.
Howard Rae Executive Director – Finance and Company Secretary
Howard Rae is a Chartered Accountant with over 20 years’ experience in acquiring, developing, financing and operating a
range of businesses in Australia, Canada, Asia, Africa and Europe.
His career includes Chief Financial Officer roles with a number of successful ASX listed companies active internationally in
the precious and base metals, steel-making materials and industrial minerals sectors, together with directorships of several
unlisted and not-for-profit organisations.
During this time, he’s been responsible for new business development, joint ventures, structuring and negotiating corporate,
project and infrastructure funding transactions, sales and marketing, risk management and implementing business
improvement programs.
2 0
ECOGRAF LIMITED ANNUAL REPORT 2O21 Michael Chan Executive Manager – Product Development
Michael Chan has a degree in Minerals Engineering (University of Birmingham, England) and is a Chartered Engineer
(London) with 35 years' experience in senior operations, project development and commercial roles for multi-national and
ASX listed companies operating in Africa, Asia and the United States.
Michael has 8 years of graphite/spherical graphite/battery anode material project experience, 15 years' extensive rare earth
project experience as well as 13 years' of titanium dioxide commercial development project experience.
During this time, he’s been responsible for major test work programs, process flow sheet design and development, pilot
processing and graphite product development, core technical marketing, establishing pilot scale facilities, developing full
scale commercial plants and driving much of the detailed downstream test work in collaboration with end-users.
Shaun O’Neill Executive Manager – Project Development
Shaun O'Neill is a qualified metallurgist with 23 years' industry experience in operations, project management and
commissioning across a broad range of commodities, including battery and critical minerals.
During this time, he's been responsible for project managing the largest lithium hydroxide processing plant in Kwinana as well
as leading commissioning activities for BHP in mega brownfield and greenfield project developments.
BOARD OF DIRECTORS
The qualifications of the directors are set out on page 20.
DIRECTORS’ INTERESTS AND OTHER DIRECTORSHIPS
As at the date of this report, the interests (directly or indirectly held) of the directors in the shares and options of the Company
are:
Director
Term
of office
Interest in
ordinary
shares1
Interest in
options over
ordinary shares
Australian listed
company
directorships
Former
directorships
(last 3 years):
Independent Non-Executive Director & Chairman
Robert Pett
Director since
9 November 2015
Chairman since
9 November 2015
Executive Directors
Andrew
Spinks
Howard
Rae
Director since
20 July 2012
Managing Director
since 22 April 2015
Director since
1 March 2021
Independent Non-Executive Director
4,704,615
13,773,822
4,925,000
John Conidi
Director since
4 May 2015
4,269,402
-
-
-
-
None
None
None
None
333D Limited
(appointed 25
March 2015)
None
None
None
1
Securities interest in EcoGraf – as notified by the directors to the Australian Securities Exchange (“ASX”) in accordance with s.205G(1) of the
Corporations Act 2001.
2 1
ECOGRAF LIMITED ANNUAL REPORT 2O21 D I R E C T O R S '
R E P O R T
DIRECTORS’ MEETINGS
During the financial year, six meetings of directors were held and attendances by each director were as follows:
Director
Robert Pett
Andrew Spinks
Howard Rae
John Conidi
Directors’ meetings in person and by resolution
Number eligible to attend
Number attended
6
6
2
6
6
6
2
6
OPERATING AND FINANCIAL REVIEW
The information reported in this operating and financial review should be read in conjunction with the review of operations on
pages 4 to 19.
PRINCIPAL ACTIVITIES
EcoGraf is building a diversified battery anode material business to produce high purity graphite products for the lithium-ion
battery and advanced manufacturing markets. Over US$30 million has been invested to date to create two highly attractive,
development ready graphite businesses.
The first new state-of-the-art EcoGraf processing facility in Western Australia will manufacture spherical graphite products for
export to Asia, Europe and North America using a superior, environmentally responsible HFfree™ purification technology to
provide customers with sustainably produced high performance battery anode material. Subsequently, the battery graphite
production base will be expanded to include additional processing facilities in Europe and North America to support the
global transition to clean, renewable energy in the coming decade and the rapid growth in battery materials.
In addition, the Company’s breakthrough recovery of carbon anode material from recycled batteries using its EcoGraf™
process will enable the recycling industry to reduce battery waste and use recycled carbon anode material to improve battery
lifecycle efficiency.
To complement these battery graphite operations, the Company is also advancing the TanzGraphite natural flake graphite
business, with development of the Epanko Graphite Project, which will supply additional feedstock for the battery anode
material facilities and provide customers with a long term supply of high quality graphite products for industrial applications
such as refractories, recarburisers and lubricants.
OPERATING RESULTS
The loss after income tax incurred by the consolidated entity for the year ended 30 June 2021 was $5,514,000
(2020: loss $2,769,000).
DIVIDENDS
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend
to the date of this report.
CORPORATE STRUCTURE
EcoGraf Limited is a public company incorporated and domiciled in Australia, limited by shares. At the date of this report, the
Company had 449,833,459 ordinary shares on issue.
2 2
ECOGRAF LIMITED ANNUAL REPORT 2O21 DISCLOSURE NOTICES
Forward looking statements
This report may contain references to forecasts, estimates, assumptions and other forward-looking statements. Although
the Company believes that its expectations, estimates and forecast outcomes are based on reasonable assumptions, it can
give no assurance that they will be achieved. They may be affected by a variety of variables and changes in underlying
assumptions that are subject to risk factors associated with the nature of the business, which could cause actual results to
differ materially from those expressed in this report. Investors should rely upon their own enquiries before deciding to acquire
or deal in the Company’s securities.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Significant changes in the state of affairs of the consolidated entity during the year (if any) are contained in the review of
operations and financial statement sections of this report.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
No matters or circumstances have arisen since 30 June 2021 that have significantly affected or may significantly affect:
• the consolidated entity’s operations in future financial years
• the results of those operations in future financial years; or
• the consolidated entity’s state of affairs in future financial years.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
Likely future developments in the activities of the Company are referred to in the review of operations section of this report.
ENVIRONMENTAL ISSUES
The Company’s operations are subject to environmental regulation under the laws of the Commonwealth of Australia and
Republic of Tanzania. The directors believe that the Company has adequate systems in place for environmental management
and are not aware of any breach of environmental requirements as they apply to the Company.
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 purposes 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.
COVID-19 PANDEMIC
In recognition of the impact on shareholders of the COVID-19 containment measures globally, the directors and executives
agreed to reduce their fees and salaries by 20% for the 6 months to 31 December 2020.
The COVID-19 world-wide pandemic has not significantly affected the operating or financial activities of the Company at this
stage of its development. Significant and prolonged pandemic lockdown conditions may impact development activities if
not dealt with in future years. The Company remains confident that operations and financial activities will not be significantly
affected.
2 3
ECOGRAF LIMITED ANNUAL REPORT 2O21 D I R E C T O R S '
R E P O R T
COMPANY SECRETARY
Howard Rae is the company secretary, having been appointed on 18 July 2017. Howard’s qualifications are set out on page 20.
INDEMNIFYING DIRECTORS AND OFFICERS
The Company has entered into an agreement to indemnify all directors and officers against any liability arising from a claim
brought by a third party against the Company. The Company has paid premiums to insure each director and officer against
liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while
acting in the capacity of director and officer of the Company, other than as a result of conduct involving a willful breach of
duty in relation to the Company.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, RSM Australia Partners, as part of the
terms of its audit engagement agreement, against claims by third parties arising from the audit (for an unspecified amount).
No payments have been made to indemnify RSM Australia Partners to the date of this report.
NON-AUDIT SERVICES
The directors are satisfied that the provision of non-audit services is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001. The directors ensure that:
• non-audit services are reviewed and approved to ensure that the provision of such services does not adversely affect the
integrity and objectivity of the auditor; and
• audit services do not compromise the general principles relating to auditor independence in accordance with APES 110:
Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
The total remuneration for audit and non-audit services provided during the prior and current financial years is set out in note
17 of the consolidated financial statements.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001, is set-out on page 34
of this report.
CHANGE OF AUDITOR
During the year RSM Australia Partners was appointed as auditor. This appointment was approved by shareholders at the
Annual General Meeting on 25 November 2020.
The change of auditor occurred because the Company wished to separate audit services from the on-going tax and
advisory services being offered by its former auditor Ernst and Young. This approach preserves auditor independence and is
consistent with good corporate governance.
2 4
ECOGRAF LIMITED ANNUAL REPORT 2O21 ROUNDING
The amounts contained in this report and in the consolidated financial statements have been rounded to the nearest $1,000
(unless otherwise stated) under the option available to the Company under ASIC Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191. The Company is an entity to which the legislative instrument applies.
CORPORATE GOVERNANCE
The directors of EcoGraf are responsible for the corporate governance of the Company and have applied ASX Corporate
Governance Principles in a manner that is appropriate to the Company’s circumstances.
The Company’s corporate governance statement is available on the Company’s website at www.ecograf.com.au.
REMUNERATION REPORT (AUDITED)
1.
INTRODUCTION
The following sections provide details of the remuneration paid to key management personnel by the Company and its
controlled entities for the year ended 30 June 2021. It forms part of the directors’ report and has been audited in accordance
with section 308C of the Corporations Act 2001.
Key management personnel are those persons who, directly or indirectly, have authority and responsibility for planning,
directing and controlling the major activities of the consolidated entity and include:
• non-executive directors; and
• executive directors and senior executives (collectively “executives”).
Key management personnel
Position
Tenure during the year
Non-executive directors
Robert Pett
John Conidi
Executive directors
Andrew Spinks
Howard Rae
Senior executives
Howard Rae
Non-Executive Chair
Non-Executive Director
Full financial year
Full financial year
Managing Director
Full financial year
Executive Director – Finance
1 March 2021 – 30 June 2021
Chief Financial Officer & Company Secretary
1 July 2020 – 28 February 2021
2 5
ECOGRAF LIMITED ANNUAL REPORT 2O21 D I R E C T O R S '
R E P O R T
2. EXECUTIVE REMUNERATION
The remuneration structure has been designed to promote alignment between the objectives and interests of shareholders,
directors and executives. Accordingly, as the Company’s key assets have not yet reached the operational phase, a greater
emphasis is placed on rewarding long-term performance through the award of equity in the Company that preserves cash
resources and is directly linked to the creation of shareholder value.
2.1 Principles of executive remuneration
Key principles that guide decisions about executive remuneration are:
• Fairness: provide a fair level of reward to all employees
• Transparency: establish transparent links between reward and performance
• Alignment: promote mutually beneficial outcomes by aligning employee, customer and shareholder interests; and
• Culture: drive leadership performance and behaviours that promote safety, diversity and employee engagement.
2.2 Executive remuneration framework
A combination of fixed and variable reward is provided to executives, based on their responsibility within the Company
in relation to the achievement of its strategic objectives and capacity to contribute to the generation of long-term
shareholder value.
The components of executive remuneration currently consist of:
• a base cash salary
• statutory superannuation contributions; and
• non-cash share-based payments.
The combination of these comprises the executive’s total remuneration.
2.3 Financial performance
The table below sets out information about the Company’s results and movements in shareholder value for the past five
years up to and including the current financial year. The historic numbers have not been assessed and adjusted for the
impact of the new accounting standards.
Net loss after tax ($’000)
Share price at end of year ($)
Basic loss per share (cents)
30 June
2021
30 June
2020
(5,514)
0.57
(1.40)
(2,769)
0.07
(0.91)
30 June
2019
(3,340)
0.12
(1.19)
30 June
2018
30 June
2017
(3,764)
0.14
(1.50)
(4,099)
0.18
(1.86)
2 6
ECOGRAF LIMITED ANNUAL REPORT 2O21 2.4 Remuneration decision making
Due to the current size of the Company, it is more efficient and effective for the functions otherwise undertaken by a
remuneration committee to be performed by the Board. All directors are therefore responsible for determining and reviewing
compensation arrangements for key management personnel, including periodically assessing the appropriateness of the
nature and amount of remuneration by reference to relevant market conditions and prevailing practices.
From time to time the directors seek independent external advice on the appropriateness of the remuneration framework and
remuneration arrangements for key management personnel.
2.5 Use of remuneration advisors
During the year ended 30 June 2021, the Board did not engage the services of remuneration advisors.
2.6
Incentive Performance Rights Plan
Under the Incentive Performance Rights Plan, performance rights may be offered to eligible participants which are subject to
pre-determined performance conditions that are required to be achieved prior to vesting. The performance conditions are
set to promote achievement of the Company’s key strategic objectives. Further information about the Incentive Performance
Rights Plan is set-out in section 5. During the year ended 30 June 2021 a total of 3,550,000 performance rights were issued
to executives. (2020: Nil).
2.7 Employee Share Plan
Under the Employee Share Plan, the Company may invite eligible participants to acquire shares, that are typically issued at
market prices with attaching service conditions by means of a non-cash credit facility. Further information about the Employee
Share Plan is set-out in section 5. No shares were issued during the year ended 30 June 2021. (2020: Nil).
2.8 Executive employment agreements
The remuneration and other conditions of employment of executives are formalised in employment contracts, a summary of
which is set out below.
Mr. Andrew Spinks, Managing Director, has an employment contract with the Company that specifies duties and obligations
to be fulfilled and provides for an annual review of remuneration. Mr. Spinks receives fixed remuneration of $355,875 per
annum inclusive of statutory superannuation and did not receive an increase in fixed remuneration during the reporting
period. In recognition of the impact of the on-going COVID-19 containment measures on shareholders Mr. Spinks voluntarily
reduced his salary by 50% for the three months to 30 June 2020 and 20% for the six months to 31 December 2020.
Mr. Howard Rae, Executive Director – Finance and Company Secretary, has an employment contract with the Company
that specifies duties and obligations to be fulfilled and provides for an annual review of remuneration. Mr. Rae receives
fixed remuneration of $355,875 per annum, inclusive of statutory superannuation and did not receive an increase in fixed
remuneration during the reporting period. In recognition of the impact of the on-going COVID-19 containment measures on
shareholders Mr. Rae voluntarily reduced his salary by 30% for the three months to 30 June 2020 and by 20% for the six
months to 31 December 2020.
2 7
ECOGRAF LIMITED ANNUAL REPORT 2O21 D I R E C T O R S '
R E P O R T
2. EXECUTIVE REMUNERATION (CONTINUED)
Termination provisions
Executive termination notice periods and payment provisions are as follows:
Andrew Spinks
Howard Rae
Resignation
6 months
3 months
Termination
for cause
Termination in case of death, disablement,
redundancy or notice without cause
Termination
payment
None
1 month
1 month
3 months
3 months
3 months
3. NON-EXECUTIVE DIRECTOR REMUNERATION
3.1 Remuneration policy
Non-executive director remuneration is structured in order to attract and retain persons with the experience and skills
necessary to oversee the Company’s business activities and to guide its growth and development into a successful mining
and manufacturing company. Fees are not linked to the financial performance of the Company. Directors may be paid
additional amounts for special duties or exertions (consultancy services outside of director’s duties) and are entitled to be
reimbursed for reasonable out-of-pocket expenses incurred in the course of their duties.
3.2 Maximum aggregate amount
Total fees payable to all non-executive directors, excluding amounts for special exertion or the reimbursement of reasonable
business expenditures, must not exceed $300,000 per annum, in accordance with the approval provided by shareholders in
2010.
3.3
Incentive Performance Rights Plan
Under the Incentive Performance Rights Plan, performance rights may be offered to eligible participants which are subject to
pre-determined performance conditions that are required to be achieved prior to vesting. The performance conditions are
set to promote achievement of the Company’s key strategic objectives. Further information about the Incentive Performance
Rights Plan is set-out in section 5. During the year ended 30 June 2021 a total of 2,500,000 performance rights were issued
to non-executive directors. (2020: Nil).
3.4 Non-executive Director Share Plan
Under the Non-executive Director Share Plan, the Company may invite eligible participants to acquire shares, that are
typically issued at market prices with attaching service conditions by means of a non-cash credit facility. Further information
about the Non-executive Director Share Plan is set-out in section 5. No shares were issued during the year ended 30 June
2021. (2020: Nil). No shares or options were issued during the year ended 30 June 2021. (2020: Nil).
2 8
ECOGRAF LIMITED ANNUAL REPORT 2O21 4. KEY MANAGEMENT PERSONNEL REMUNERATION
Details of the remuneration of directors and executives of the consolidated entity are set out in the following table.
Short-term
benefits
Post-
employ-
ment
Long-term
benefits
Share-
based
payments
Fees for
special
duties or
exertion
Super-
annuation
Long
Service
Leave
expense
Perfor-
mance
rights
Total
Equity
% of
compensa-
tion
Non-executive directors
Salary/
Fees3
65,753
54,795
49,275
41,063
-
2021
2020
2021
2020
2021
-
7,7001
6,941
5,205
-
-
-
-
-
-
-
25,000
25,000
-
-
24,000
24,000
55,941
54,205
2020
25,000
100,5622
2021
295,023
2020
292,356
2021
-
2020
197,051
2021
305,600
2020
319,501
2021
715,651
-
-
-
-
-
-
-
2020
929,766
108,262
Robert Pett
John Conidi
Christoph Frey
Executives
Andrew Spinks
Grant Pierce
Howard Rae
Total
remuneration
-
-
-
-
-
-
1,496
(871)
-
-
248
(196)
393,750
466,444
-
67,700
393,750
443,025
-
-
-
41,063
-
125,562
84%
0%
89%
0%
0%
0%
559,125
880,644
63%
-
-
-
316,485
-
197,051
559,125
888,973
-
343,305
0%
0%
0%
63%
0%
71%
0%
1,744
1,905,750
2,679,086
(1,067)
-
1,091,166
1 Consulting services for additional work undertaken for capital raising activities
2 Consulting services for additional work undertaken for research and development activities
3 In recognition of the impact on shareholders of the COVID-19 containment measures globally, the directors waived their fees and executives reduced their
salaries by up to 50% for the three months to 30 June 2020 and all directors and executives agreed to reduce their fees and salaries by 20% for the six
months to 31 December 2020.
Robert Pett is a director and shareholder of the following related party entity which transacted with the consolidated entity.
Represented by invoices related to work performed for the consolidated entity.
Entity
Prevelly Holdings Pty Ltd
Services provided
Consultancy services
2021
$’000
-
2020
$’000
14
2 9
ECOGRAF LIMITED ANNUAL REPORT 2O21 D I R E C T O R S '
R E P O R T
5. SHARE BASED COMPENSATION
Incentive Performance Rights Plan
On 25 November 2020 shareholders approved the adoption of the Company's Incentive Performance Rights Plan, which is
designed to assist with the recruitment, reward, retention and incentivisation of key personnel who possess the skills and
experience to enable the Company to develop its graphite businesses and grow long-term shareholders value.
The Company is at a critical stage in its growth as it advances the new EcoGraf™ Battery Anode Material Facility and Epanko
Graphite Mine to development and operations. The international graphite industry is also evolving rapidly to support the
demand for lithium-ion batteries in electric vehicles and the retention of specialised skills is essential to the Company's future
success.
To achieve this outcome, the Company believes that incentivising and rewarding performance and the achievement of key
objectives through equity arrangements is the most effective remuneration structure because it preserves the Company's cash
reserves and aligns the interests of personnel with those of all shareholders.
Short-Term Incentive
Under the short-term incentive arrangements, eligible participants may earn performance rights for the achievement of
pre-determined key performance measures each year, with the determination of the amount, if any, made after the end of
each year, by multiplying the individual’s assessed key performance score by the applicable percentage of their fixed annual
remuneration. The number of performance rights, if any, to be earned under the short-term incentive is calculated by dividing
the short-term incentive amount by the volume weighted average price of the Company’s shares during the applicable
financial year. To promote alignment and retention, if any performance rights are allocated, the individual will not be able to
dispose of the shares received on exercise of the performance rights for a period of 12 months from the end of the financial
year for which they were awarded. Upon exercise, each performance right will entitle the eligible participant to receive one
ordinary share in the Company.
Long-Term Incentive
The long-term incentive arrangements involve the offer of performance rights to eligible participants which are subject to
pre-determined performance conditions that are required to be achieve prior to vesting. The performance conditions are set
to promote achievement of the Company’s key strategic objectives. Subject to the achievement of the specified performance
conditions, upon exercise each performance right will entitle the eligible participant to receive one ordinary share in the
Company. The number of performance rights offered to an individual is determined by reference to equity incentives offered
by similar companies and the potential for the individual, through their position, skills and experience, to create long-term
shareholder value.
During the year ended 30 June 2021 a total of 6,050,000 performance rights were issued to non-executive directors and
executives. (2020: Nil).
Share Plans
Plan shares are issued to directors and employees in recognition of their performance with the Company and as incentive
remuneration under the respective director and employee share plans (together the “Share Plans”). The terms and conditions
of the Share Plans are identical, other than in respect of who is eligible to participate in each plan. Plan shares are issued at
the discretion of the Board.
Under the Share Plans, eligible directors and employees are offered plan shares in the Company at prices determined by the
Board, which has the discretion to impose conditions on the shares issued under the Share Plans and may also grant a loan,
in the form of a non-cash credit facility, to a participant for the purposes of subscribing for plan shares. Shares issued via loan
facility may not be granted at less than the volume weighted average price of the Company’s shares during the 5 trading
days up to and including the date of acceptance and are escrowed as security until the loan has been fully repaid, via cash
payment and/or the sale of the plan shares. If the loan is repaid by the sale of shares, any surplus on sale is remitted to the
participant and any shortfall is borne by the consolidated entity.
There were no shares issued to non-executive directors or executives, during the year ended 30 June 2021.
3 0
ECOGRAF LIMITED ANNUAL REPORT 2O21 6. KEY MANAGEMENT PERSONNEL EQUITY OWNERSHIP
6.1 Shares
Non-executives
Robert Pett
John Conidi
Executives
Andrew Spinks
Howard Rae
Total
Balance at
1 July 2020
Balance at date
of appointment
Movement
during the year
Balance at
30 June 2021
3,984,615
5,269,402
13,673,822
3,150,000
26,077,839
-
-
-
-
-
720,0003,5
(1,000,000)1,2,3
4,704,615
4,269,402
100,0002,4,6
1,775,0004
1,595,000
13,773,822
4,925,000
27,627,839
1
(1,000,000) shares transferred as a result of a marital settlement March 2021
2 (1,250,000) shares expired under Director Share Plan July 2020
3 1,250,000 performance rights vested under the Incentive Performance Rights Plan March 2021
4 1,775,000 performance rights vested under the Incentive Performance Rights Plan March 2021
5 (530,000) shares sold to fund repayment of Director Share Plan loan June 2021
6 (425,000) shares sold to fund repayment of Director Share Plan loan June 2021
6.2 Shares issued under non-executive director and employee share plans
Included in table 6.1 are plan shares held by key management personnel. The balance and movement during the reporting
period in the number of plan shares held directly, indirectly or beneficially, by each key management person, including their
related parties, is as follows:
Non-executives
Robert Pett
John Conidi
Executives
Andrew Spinks
Howard Rae
Total
1 (1,250,000) Shares expired under Director Share Plan July 2020
2 (1,250,000) Shares released from escrow June 2021
3 (1,000,000) Shares released from escrow June 2021
Balance at
1 July 2020
Net Change
Balance at
30 June 2021
3,250,000
3,250,000
4,250,000
3,000,000
13,750,000
(1,250,000)2
(2,250,000)1,3
(2,250,000)1,3
-
(5,750,000)
2,000,000
1,000,000
2,000,000
3,000,000
8,000,000
3 1
ECOGRAF LIMITED ANNUAL REPORT 2O21 D I R E C T O R S '
R E P O R T
6.3 Loans to key management personnel
There were no loans granted to key management personnel during the year ended 30 June 2021.
6.4 Performance rights granted under Incentive Performance Rights Plan
Included in table 6.1 are incentive performance rights held by key personnel. The balance and movement during the reporting
period in the number of performance rights held directly, indirectly or beneficially, by each key management person, including
their related parties, is as follows:
Non-executives
Robert Pett
John Conidi
Executives
Andrew Spinks
Howard Rae
Total
Balance at
1 July 2020
Net Change
Balance at
30 June 2021
-
-
-
-
-
1,250,000
1,250,000
1,775,000
1,775,000
6,050,0001
1,250,000
1,250,000
1,775,000
1,775,000
6,050,000
1 Grant date 20 January 2021, expiry date 19 January 2026, vested 22 March 2021
6.5 Other transactions with key management personnel
There were no other transactions with key management personnel of the consolidated entity, including their personally related
parties during the year ended 30 June 2021.
Signed in accordance with a resolution of the directors made pursuant to s298 (2) of Corporations Act 2001.
Andrew Spinks
Managing Director
23 September 2021
3 2
ECOGRAF LIMITED ANNUAL REPORT 2O21 3 3
ECOGRAF LIMITED ANNUAL REPORT 2O21 F I N A N C I A L S T A T E M E N T S
A U D I T O R ' S
I N D E P E N D E N C E
D E C L A R A T I O N
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of EcoGraf Limited for year ended 30 June 2021, I declare
that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 23 September 2021
TUTU PHONG
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
3 4
NATURAL GRAPHITE USED IN
BATTERY ANODE IS CURRENTLY
SOURCED FROM CHINA
ECOGRAF LIMITED ANNUAL REPORT 2O21
F I N A N C I A L S T A T E M E N T S
Consolidated statement of profit or loss & comprehensive income
36
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
37
38
39
40
E C O G R A F L I M I T E D
A N N U A L R E P O R T 2 O 2 1
3 5
C O N S O L I D A T E D S T A T E M E N T O F
P R O F I T O R L O S S & O T H E R
C O M P R E H E N S I V E I N C O M E
FOR THE YEAR ENDED 30 JUNE 2021
REVENUE
Interest income
Other income
EXPENSES
Accounting & audit
Consultants & contractors
Employee benefits
Depreciation
Directors fees
Exploration and evaluation expensed
Information systems & technology
Listing & compliance
Office rental & outgoings
Other
Share based payments
Travel & accommodation
Unrealised foreign exchange differences
Loss before income tax
Income tax expense
Loss after income tax for the year
Note
2021
$’000
2020
$’000
3
4
10
79
424
503
(149)
(1,888)
(635)
(14)
(122)
(103)
(25)
(128)
(124)
(133)
19
(2,693)
(3)
-
3
281
284
(249)
(1,446)
(563)
(41)
(126)
(138)
(76)
(74)
(157)
(102)
-
(79)
(2)
(6,017)
(3,053)
(5,514)
(2,769)
5
-
-
(5,514)
(2,769)
Total comprehensive loss for the year
Loss attributable to members of EcoGraf Limited
Total comprehensive loss attributable to members of EcoGraf Limited
Loss per share attributable to the members of EcoGraf Limited
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
16
16
The above statement should be read in conjunction with the accompanying notes.
(5,514)
(5,514)
(5,514)
(1.40)
(1.40)
(2,769)
(2,769)
(2,769)
(0.91)
(0.91)
3 6
ECOGRAF LIMITED ANNUAL REPORT 2O21 C O N S O L I D A T E D S T A T E M E N T O F
F I N A N C I A L P O S I T I O N
AS AT 30 JUNE 2021
ASSETS
Current assets
Cash and cash equivalents
Other receivables
Prepayments
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Employee provisions
Total current liabilities
Non-current liabilities
Employee provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
Note
2021
$’000
2020
$’000
6
7
10
8
9
52,633
506
212
2,779
76
39
53,351
2,894
55
18,238
18,293
148
18,039
18,187
71,644
21,081
1,195
97
1,292
22
22
1,314
349
90
439
20
20
459
70,330
20,622
11
12
13
99,837
7,830
(37,337)
49,060
3,385
(31,823)
70,330
20,622
The above statement should be read in conjunction with the accompanying notes.
3 7
ECOGRAF LIMITED ANNUAL REPORT 2O21 C O N S O L I D A T E D S T A T E M E N T O F
C H A N G E S I N E Q U I T Y
FOR THE YEAR ENDED 30 JUNE 2021
Contributed
equity
$’000
Accumulated
losses
$’000
Loan share
reserve
$’000
Share based
payment
reserve
$’000
Balance at 30 June 2019
44,852
(29,054)
(4,055)
6,649
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
-
-
-
(2,769)
-
(2,769)
Transactions with owners in their capacity
as owners
Shares issued during the year
Share plan shares cancelled
Share issue expense
Balance at 30 June 2020
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners in their capacity
as owners
Shares issued during the year
Share plan shares cancelled/ released
Share based payments
Share issue expense
Balance at 30 June 2021
5,149
(791)
(150)
-
-
-
49,060
(31,823)
(3,264)
6,649
20,622
-
-
-
(5,514)
-
(5,514)
54,598
(651)
-
(3,170)
-
-
-
-
-
-
-
-
1,752
-
-
-
-
-
-
-
2,693
-
(5,514)
-
(5,514)
54,598
1,101
2,693
(3,170)
99,837
(37,337)
(1,512)
9,342
70,330
Total
$’000
18,392
(2,769)
-
(2,769)
5,149
-
(150)
-
-
-
-
791
-
-
-
-
-
-
-
The above statement should be read in conjunction with the accompanying notes.
3 8
ECOGRAF LIMITED ANNUAL REPORT 2O21 C O N S O L I D A T E D S T A T E M E N T O F
C A S H F L O W S
FOR THE YEAR ENDED 30 JUNE 2021
Note
14
OPERATING ACTIVITIES
Research and development tax credit received
Payments to suppliers and employees
Net cash flows used in operating activities
INVESTING ACTIVITIES
Payments for exploration and evaluation
Interest received
Purchases of fixed assets
Proceeds of disposal of fixed assets
Net cash flows used in investing activities
FINANCING ACTIVITIES
Proceeds from issue of shares
Capital raising costs for issue of shares
Repayment of share plan loans
Net cash flows from financing activities
Net increase in cash and cash equivalents held
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
6
The above statement should be read in conjunction with the accompanying notes.
2021
$’000
374
(2,903)
(2,529)
(199)
2
(7)
58
(146)
54,598
(3,170)
1,101
52,529
49,854
2,779
52,633
2020
$’000
232
(3,123)
(2,891)
(744)
3
-
-
(741)
5,099
(150)
-
4,949
1,317
1,462
2,779
3 9
ECOGRAF LIMITED ANNUAL REPORT 2O21 1. COMPANY INFORMATION
The consolidated financial statements of EcoGraf Limited and its subsidiaries (collectively, “the consolidated entity”) for the
year ended 30 June 2021 were authorised for issue in accordance with a resolution of the directors on 23 September 2021.
EcoGraf Limited (“the Company” or “the parent”) is a for profit company limited by shares incorporated in Australia whose
shares are publicly traded on the Australian Securities Exchange. It has activities in Australia and Tanzania, with the country of
domicile being Australia and the registered office located in Australia.
The nature of the operations and principal activities of the consolidated entity are described in the directors’ report.
Information on the consolidated entity’s structure is provided in note 22 and details of other related party relationships is
provided in note 21.
2. BASIS OF PREPARATION
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting Standards, and other authoritative pronouncements of the Australian
Accounting Standards Board.
The financial report has been prepared on a historical cost basis.
The financial report complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board.
Functional and presentational currency
These consolidated financial statements are presented in Australian dollars, which is the consolidated entity’s functional
currency. All amounts have been rounded to the nearest thousand, unless otherwise stated in accordance with ASIC
Corporations (Rounding In Financial/Directors’ Reports) Instrument 2016/191.
3. OTHER INCOME
Research and development tax credit
Government COVID-19 cash boost
2021
$’000
2020
$’000
374
50
424
231
50
281
4 0
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 4. CONSULTANTS AND CONTRACTORS
Accounting and administrative services
Downstream processing research, development and engineering
Fees to finance advisors
Legal
Public relations
Other
2021
$’000
2020
$’000
236
1,235
20
122
179
96
245
561
263
143
220
14
1,888
1,446
5.
INCOME TAX EXPENSE
Reconciliation of tax benefit/expense and the accounting loss multiplied by Australia’s
domestic tax rate:
Accounting loss before tax
(5,514)
(2,769)
At Australia’s statutory income tax rate of 30.0% (2020: 30.0%)
Tax effect of amounts not deductible/ assessable
Benefit of tax losses and timing differences not brought to account as an asset
Income tax expense attributable to entity
Deferred income tax at balance date relates to the following:
Deferred tax assets
Tax losses available to offset against future taxable income
Total deferred tax asset
Deferred tax liabilities
Exploration and evaluation assets
Deferred tax asset used to offset deferred tax liability
Net deferred tax assets not brought to account
The benefit of deferred tax assets not brought to account will only be recognised if:
(1,654)
(48)
1,702
-
9,929
9,929
(5,471)
5,471
-
4,458
(831)
(69)
900
-
9,271
9,271
(5,412)
5,412
-
3,859
• Future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised
• The conditions for deductibility imposed by tax legislation continue to be complied with
• No changes in tax legislation adversely affect the consolidated entity in realising the benefit.
4 1
ECOGRAF LIMITED ANNUAL REPORT 2O21 6. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
7. OTHER RECEIVABLES
Goods and services tax receivable (1)
Interest on term deposit
Security deposits
(1) Non-interest bearing and generally on 14-day terms at the end of each quarter.
8. EXPLORATION AND EVALUATION ASSET
Exploration and evaluation expenditure carried forward:
Carrying amount as at 1 July
Capitalised expenditure at cost
2021
$’000
52,633
52,633
388
77
41
506
18,039
199
18,238
2020
$’000
2,779
2,779
36
-
40
76
17,292
747
18,039
Recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful development
and commercial exploitation of areas of interest and the sale of minerals, or the sale of the respective areas of interest. The
Company is in discussion with the Government of Tanzania with respect to regulatory arrangements and approvals for the
development of the Epanko Graphite Project, including mining licence conditions past due for the commencement of regular
production. On 4 September 2018, the Mining Commission confirmed to the Company that it will be ready to renew the
mining licence upon expiry of the licence period in 2025, provided that the requirements of section 53 of the Mining Act 2010
are fulfilled.
The COVID-19 world-wide pandemic has not significantly affected the operating or financial activities of the Company at this
stage of its development. Significant and prolonged pandemic lockdown conditions may impact development activities if not
dealt with in future years. The Company has considered this in its assessment of impairment indicators for this class of assets
and remains confident that operations and financial activities will not be significantly affected.
9. TRADE AND OTHER PAYABLES
Trade payables (1)
Accrued expenses
(1) Trade creditors are non-interest bearing and are normally settled on 30-day terms.
714
481
1,195
280
69
349
4 2
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 Plant &
equipment
office
$’000
Plant &
equipment
field
$’000
Motor
Vehicles
$’000
Furniture &
equipment
$’000
Leasehold
assets
$’000
Total
$’000
10. PROPERTY, PLANT AND EQUIPMENT
At cost
Accumulated depreciation
Net carrying amount
37
(23)
14
22
(18)
4
68
(45)
23
37
(27)
10
8
(4)
4
172
(117)
55
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of
the current financial year, is as follows:
Balance at 30 June 2019
Additions
Disposals
Depreciation expense
Balance at 30 June 2020
Additions
Disposals
Depreciation expense
Balance at 30 June 2021
14
2
(1)
(3)
12
7
(1)
(4)
14
8
-
-
(2)
6
-
-
(2)
4
145
-
-
(31)
114
-
(85)
(6)
23
16
-
-
(5)
11
-
-
(1)
10
6
-
(1)
-
5
-
-
(1)
4
189
2
(2)
(41)
148
7
(86)
(14)
55
4 3
ECOGRAF LIMITED ANNUAL REPORT 2O21 11. CONTRIBUTED EQUITY
449,833,459 (2020: 363,986,768) fully paid ordinary shares
99,837
49,060
2021
$’000
2020
$’000
a) Ordinary shares
At 30 June 2019
Share placement - October 2019
Issue of shares to consultant in lieu of cash - November 2019
Plan shares expired - October 2019
Plan shares forfeited - April 2020
Share placement - May 2020
Share purchase plan - June 2020
Capital raising costs
Balance at 30 June 2020
Plan shares expired - July 2020
Share placement - February 2021
Plan shares expired - April 2021
Incentive performance rights plan shares issued - June 2021
Capital raising costs
Balance at 30 June 2021
Fully paid ordinary shares carry one vote per share and carry a right to dividends.
No. of shares
$’000
292,620,967
44,852
14,537,224
555,556
(2,050,000)
(2,000,000)
24,615,385
35,707,636
-
1,307
50
(489)
(302)
1,600
2,192
(150)
363,986,768
49,060
(3,750,000)
(651)
90,996,691
54,598
(2,000,000)
600,000
-
-
-
(3,170)
449,833,459
99,837
4 4
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 12. RESERVES
Share based payment reserve
Loan share reserve
Movement in share-based payment reserve
Balance at beginning of year
Share based payments
Balance at end of year
Movement in loan plan share reserve
Balance at beginning of year
Plan shares expired/ released
Balance at end of year
Share based payments reserve
2021
$’000
9,342
(1,512)
7,830
6,649
2,693
9,342
(3,264)
1,752
(1,512)
2020
$’000
6,649
(3,264)
3,385
6,649
-
6,649
(4,055)
791
(3,264)
The reserve recognises the value of equity provided as remuneration to employees and also to other parties as
compensation for services provided to the consolidated entity.
Plan share reserve
The reserve represents the non-cash nominal value of loan shares on issue to employees and is deducted from equity.
13. ACCUMULATED LOSSES
Balance at beginning of year
Loss for the year
Balance at end of year
(31,823)
(5,514)
(37,337)
(29,054)
(2,769)
(31,823)
4 5
ECOGRAF LIMITED ANNUAL REPORT 2O21 14. CASH FLOW INFORMATION
Reconciliation of cash flow from operations with loss for the year
Loss for the year
Adjustments for:
Interest income
Depreciation
Loss on disposal of fixed assets
Share based payment expensed
Issue of shares to consultant in lieu of cash
Unrealised foreign exchange (gains) and losses
Changes in assets and liabilities:
(Increase) / decrease in Other receivables
Increase / (decrease) in Trade and other payables
Increase in Employee provisions
Net cash flows used in operating activities
15. EXPENDITURE COMMITMENTS
Mineral tenements
2021
$’000
2020
$’000
(5,514)
(2,769)
(79)
14
28
2,693
-
-
(525)
812
42
(3)
41
-
-
50
(1)
31
(259)
19
(2,529)
(2,891)
In order to maintain current rights of tenure to exploration tenements, the consolidated entity is required to outlay rentals
and to satisfy minimum expenditure requirements of $486,188 (2020: $27,594) over the next 12 months, in accordance with
agreed work programs submitted over the Company’s exploration licences. Financial commitments for subsequent periods
are contingent upon future exploration results.
16. LOSS PER SHARE
Data used in the basic loss per share computations:
Loss for the year
Weighted average number of ordinary shares
Basic and diluted loss per share (cents)
(5,514)
(2,769)
394,298,531
304,867,963
(1.40)
(0.91)
Loss per share is calculated by dividing the loss for the year attributable to ordinary equity holders of the Company by the
weighted average number of ordinary shares outstanding during the year.
4 6
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 2021
$
2020
$
17. AUDITOR’S REMUNERATION
Fees to RSM Australia Partners
Fees for auditing the statutory financial reports of the consolidated entity
Fees for assurance services that are required by legislation to be provided
by the auditor
Total fees to RSM Australia Partners
Fees to Ernst & Young (Australia)
Fees for auditing the statutory financial reports of the consolidated entity
Fees for assurance services that are required by legislation to be provided
by the auditor
Fees for other services
- Tax compliance
- Project financial modelling
Total fees to Ernst & Young (Australia)
Fees to other overseas member firms of Ernst & Young (Australia)
Fees for auditing the financial report of any controlled entities
Fees for other services
- Tax compliance
Total fees to overseas member firms of Ernst & Young (Australia)
37,500
2,500
40,000
-
-
-
-
-
-
-
-
Total auditor’s remuneration
40,000
-
-
-
42,912
412
9,854
39,449
92,627
-
2,606
2,606
95,233
During the year RSM Australia Partners were appointed as auditor. This appointment was approved by shareholders at the
Annual General Meeting on 25 November 2020.
The change of auditor occurred because the Company wished to separate audit services from the on-going tax and advisory
services being offered by it's former auditor Ernst and Young. This approach preserves auditor independence and is
consistent with good corporate governance.
4 7
ECOGRAF LIMITED ANNUAL REPORT 2O21
18. SEGMENT INFORMATION
The consolidated entity reports one segment, graphite products, to the chief operating decision maker, being the Managing
Director for the purposes of assessing performance and determining the allocation of resources.
Unless otherwise stated, all amounts reported to the chief operating decision maker are determined in accordance with
accounting policies that are consistent with those adopted in this financial report.
Revenue by geographical region
2021 Results
Segment other income
Segment expenses
Accounting and audit
Consultants and contractors
Employee benefits
Depreciation
Directors fees
Exploration and evaluation expensed
Information systems and technology
Listing and compliance
Office rental and outgoings
Other
Share based payments
Travel and accommodation
Unrealised foreign exchange loss
Segment results
Australia
$’000
Tanzania
$’000
Consolidated
$’000
503
(146)
(1,757)
(635)
(4)
(122)
-
(21)
(128)
(120)
(85)
(2,693)
(2)
-
(5,713)
(5,210)
-
503
(3)
(131)
-
(10)
-
(103)
(4)
-
(4)
(48)
-
(1)
-
(304)
(304)
(149)
(1,888)
(635)
(14)
(122)
(103)
(25)
(128)
(124)
(133)
(2,693)
(3)
-
(6,017)
(5,514)
4 8
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 Revenue by geographical region
2020 Results
Segment other income
Segment expenses
Accounting and audit
Consultants and contractors
Employee benefits
Depreciation
Directors fees
Exploration & evaluation expensed
Information systems and technology
Listing and compliance
Office rental and outgoings
Other
Travel and accommodation
Unrealised foreign exchange loss
Segment results
Assets by geographical region
2021 Assets
Property, plant and equipment
Exploration and evaluation assets
Segment non-current assets
Unallocated assets:
Cash and cash equivalents
Other receivables
Prepayments
Total assets
2021 Liabilities
Segment liabilities
Total liabilities
Australia
$’000
Tanzania
$’000
Consolidated
$’000
284
-
284
(229)
(970)
(559)
(5)
(126)
-
(64)
(74)
(151)
(83)
(72)
-
(2,333)
(2,049)
(20)
(476)
(4)
(36)
-
(138)
(12)
-
(6)
(19)
(7)
(2)
(720)
(720)
(249)
(1,446)
(563)
(41)
(126)
(138)
(76)
(74)
(157)
(102)
(79)
(2)
(3,053)
(2,769)
Australia
$’000
Tanzania
$’000
Consolidated
$’000
16
-
16
39
18,238
18,277
(1,301)
(13)
55
18,238
18,293
52,633
506
212
71,644
(1,314)
(1,314)
4 9
ECOGRAF LIMITED ANNUAL REPORT 2O21 18. SEGMENT INFORMATION (CONTINUED)
Assets by geographical region
2020 Assets
Property, plant and equipment
Exploration and evaluation assets
Segment non-current assets
Unallocated assets:
Cash and cash equivalents
Other receivables
Prepayments
Total assets
2020 Liabilities
Segment liabilities
Total liabilities
19. SHARE BASED PAYMENTS
Incentive Performance Rights Plan
Australia
$’000
Tanzania
$’000
Consolidated
$’000
15
-
15
133
18,039
18,172
(428)
(31)
148
18,039
18,187
2,779
76
39
21,081
(459)
(459)
On 25 November 2020 shareholders approved the adoption of the Company's Incentive Performance Rights Plan, which is
designed to assist with the recruitment, reward, retention and incentivisation of key personnel who possess the skills and
experience to enable the Company to develop its graphite businesses and grow long-term shareholders value.
The Company is at a critical stage in its growth as it advances the new EcoGraf™ Battery Anode Material Facility and Epanko
Graphite Mine to development and operations. The international graphite industry is also evolving rapidly to support the demand
for lithium-ion batteries in electric vehicles and the retention of specialised skills is essential to the Company's future success.
To achieve this outcome, the Company believes that incentivising and rewarding performance and the achievement of key
objectives through equity arrangements is the most effective remuneration structure because it preserves the Company's cash
reserves and aligns the interests of personnel with those of all shareholders.
Short-Term Incentive
Under the short-term incentive arrangements, eligible participants may earn performance rights for the achievement of
pre-determined key performance measures each year, with the determination of the amount, if any, made after the end of
each year, by multiplying the individual’s assessed key performance score by the applicable percentage of their fixed annual
remuneration. The number of performance rights, if any, to be earned under the short-term incentive is calculated by dividing
the short-term incentive amount by the volume weighted average price of the Company’s shares during the applicable
financial year. To promote alignment and retention, if any performance rights are allocated, the individual will not be able to
dispose of the shares received on exercise of the performance rights for a period of 12 months from the end of the financial
year for which they were awarded. Upon exercise, each performance right will entitle the eligible participant to receive one
ordinary share in the Company.
Long-Term Incentive
The long-term incentive arrangements involve the offer of performance rights to eligible participants which are subject to
pre-determined performance conditions that are required to be achieve prior to vesting. The performance conditions are set
to promote achievement of the Company’s key strategic objectives. Subject to the achievement of the specified performance
conditions, upon exercise each performance right will entitle the eligible participant to receive one ordinary share in the
Company. The number of performance rights offered to an individual is determined by reference to equity incentives offered
by similar companies and the potential for the individual, through their position, skills and experience, to create long-term
shareholder value.
5 0
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 During the year ended 30 June 2021 a total of 8,550,000 performance rights were issued. (2020: Nil).
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, incentive
performance rights during the year:
Outstanding at 1 July
Granted during the year
Forfeited during the year
Vested during the year
Expired during the year
Outstanding at 30 June
2021
Number
-
2021
WAEP
-
8,550,000
0.3150
-
-
8,550,000
0.3150
-
-
8,550,000
0.3150
2020
Number
2020
WAEP
-
-
-
-
-
-
-
-
-
-
-
-
Valuation: Share Based Payment Expense
For the performance rights granted during the current financial year, the valuation model inputs used to determine the fair
value at the grant date, are as follows:
Grant date
Expiry date
Share price at grant date
Vesting date
Expected volatility
Dividend yield
Risk-free rate
Number of performance rights
Fair value for each right
Amount recognised as share-based payment expense
Share Plans
20/01/2021
19/01/2026
$0.315
22/03/2021
110%
Nil
0.375%
8,550,000
$0.315
$2,693,250
Plan shares are issued to directors and employees in recognition of their performance with the Company and as incentive
remuneration under the respective director and employee share plans (together the “Share Plans”). The terms and conditions
of the Share Plans are identical, other than in respect of who is eligible to participate in each plan. Plan shares are issued at
the discretion of the Board.
Under the Share Plans, eligible directors and employees are offered plan shares in the Company at prices determined by the
Board, which has the discretion to impose conditions on the shares issued under the Share Plans and may also grant a loan,
in the form of a non-cash credit facility, to a participant for the purposes of subscribing for plan shares. Shares issued via loan
facility may not be granted at less than the volume weighted average price of the Company’s shares during the 5 trading
days up to and including the date of acceptance and are escrowed as security until the loan has been fully repaid, via cash
payment and/or the sale of the plan shares. If the loan is repaid by the sale of shares, any surplus on sale is remitted to the
participant and any shortfall is borne by the consolidated entity.
There were no plan shares issued during the year ended 30 June 2021 (2020: Nil).
5 1
ECOGRAF LIMITED ANNUAL REPORT 2O21 19. SHARE BASED PAYMENTS (CONTINUED)
Share Plans (continued)
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, plan shares
during the year:
Outstanding at 1 July
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at 30 June
2021
Number
2021
WAEP
2020
Number
18,250,000
0.1789
22,300,000
-
-
(5,000,000)
(3,750,000)
9,500,000
-
-
0.2205
0.1736
0.1590
-
(2,000,000)
0.1509
-
(2,050,000)
18,250,000
-
0.2384
0.1789
2020
WAEP
0.1818
-
20. DIRECTORS AND KEY MANAGEMENT PERSONNEL DISCLOSURES
a) Names and positions of key management personnel in office at any time during the financial year:
Robert Pett
John Conidi
Andrew Spinks
Howard Rae
Non-Executive Chairman
Non-Executive Director
Managing Director
Executive Director – Finance and Company Secretary
b) Key management personnel remuneration
Aggregate compensation of key management personnel of the consolidated entity:
Short term employee benefits
Post-employment benefits
Long term employee benefits
Share based payments (non-cash)
2021
$’000
715
56
2
1,906
2,679
2020
$’000
1,038
54
(1)
-
1,091
Detailed information about the remuneration received by key management personnel is provided in the remuneration report
on pages 25 to 32.
5 2
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 21. RELATED PARTY DISCLOSURES
Transactions between related parties are on normal commercial terms.
Ultimate parent
EcoGraf Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 22.
Key management personnel
Disclosures relating to key management personnel are set out in note 20 and the remuneration report in the directors’ report.
Transactions with related parties
The following transactions were undertaken with key management personnel during the year ended 30 June 2021.
Robert Pett is a director and shareholder of the following related party entity which transacted with the consolidated entity.
Entity
Prevelly Holdings Pty Ltd
Services provided
Consultancy services
2021
$’000
-
2020
$’000
14
22. CONSOLIDATED ENTITY INFORMATION
Information about subsidiaries
The financial statements of the consolidated entity include the following subsidiaries:
Tanzanian Exploration Company Pty Ltd
TanzGraphite Pty Ltd
TanzGraphite (AUS) Pty Ltd
EcoGraf (Australia) Pty Ltd
Westoz Technologies Pty Ltd
EcoGraf (Mauritius) Limited
EcoGraf (Tanzania) Limited
TanzGraphite Technologies Limited
TanzGraphite (TZ) Limited
TanzGraphite Exploration (TZ) Limited
Country of incorporation
2021
2020
Percentage owned (%)
Australia
Australia
Australia
Australia
Australia
Mauritius
Tanzania
Tanzania
Tanzania
Tanzania
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
5 3
ECOGRAF LIMITED ANNUAL REPORT 2O21 23. PARENT INFORMATION
EcoGraf Limited
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Share based payment reserve
Loan share reserve
Accumulated losses
Total equity
Loss of the parent entity
Total comprehensive loss of the parent entity
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity did not have any guarantees at 30 June 2021 or 30 June 2020.
Contingent liabilities
The parent entity did not have any contingent liabilities at 30 June 2021 or 30 June 2020.
Capital commitments
The parent entity did not have any capital commitments at 30 June 2021 or 30 June 2020.
2021
$’000
53,311
18,320
71,631
1,281
20
1,301
2020
$’000
2,874
25,830
28,704
408
20
428
70,330
28,276
99,837
9,342
(1,512)
(37,337)
70,330
(5,210)
(5,210)
49,060
6,649
(3,264)
(24,169)
28,276
(2,049)
(2,049)
Significant accounting policies
The parent entity’s financial information has been prepared using the same basis, including the accounting policies, as the
consolidated entity.
5 4
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 24. FINANCIAL INSTRUMENTS
The consolidated entity is exposed to a variety of financial risks, including market risk, credit risk and liquidity risk.
The consolidated entity’s financial instruments consist of cash and deposits with banks, accounts receivable and accounts
payable. No trading in any financial instruments is undertaken.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expense are recognised, in respect of each class of financial asset,
financial liability and equity instrument, are disclosed in note 26. Unless otherwise stated, the carrying amounts of financial
instruments reflect their fair value.
The main risks arising from the consolidated entity’s financial instruments are foreign currency risk, interest rate risk, liquidity
risk and credit risk. The Board determines policies for managing each of these risks and they are summarised below.
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations. Foreign exchange risk also arises from future commercial transactions and
recognised financial assets and financial liabilities denominated in a currency other than the consolidated entity’s functional
currency. The consolidated entity operates internationally and is exposed to foreign exchange risk arising from currency
exposures to the USD, EUR, TZS and GBP.
The carrying amount, in Australian dollars of the consolidated entity’s foreign currency denominated financial assets and
financial liabilities at the reporting date was as follows:
USD
EUR
TZS
GBP
Total
Cash and cash equivalents
Trade and other payables
2021
$’000
2020
$’000
2021
$’000
2020
$’000
28
-
7
-
35
1
-
12
-
13
7
5
-
88
100
-
22
15
86
123
The financial impact of a 10% change in the Australian dollar exchange rate on the consolidated entity is as follows:
Appreciation in AUD exchange rate
Depreciation in AUD exchange rate
%
change
Effect on loss
before tax
Effect on
equity
%
change
Effect on loss
before tax
Effect on
equity
2021
2020
10%
10%
$6,841
$10,374
$6,841
$10,374
10%
10%
$(6,841)
$(10,374)
$(6,841)
$(10,374)
The assumed percentage change used in the above analysis is the expected overall volatility of the significant currencies,
which is based on management’s assessment of reasonable possible fluctuations, taking into consideration movements
during the year and the spot rate at each reporting date.
5 5
ECOGRAF LIMITED ANNUAL REPORT 2O21 24. FINANCIAL INSTRUMENTS (CONTINUED)
Interest rate risk
The consolidated entity’s exposure to market risk for changes in interest rates arises from holding cash and deposits. Funds
held in operating accounts and term deposits earned variable interest at rates ranging between 0% to 0.45% (2020: 0% to
1.35%), depending on the type of bank account and cash balance. The consolidated entity does not have interest-bearing
loans or borrowings.
The interest-bearing financial instruments held by the consolidated entity are:
Cash and cash equivalents
30 June
2021
$’000
52,633
30 June
2020
$’000
2,779
A change of 1% in the variable interest rate at the reporting date would have an impact on the consolidated entity profit and
loss and equity of $526,000 (2020: $28,000) assuming all other variables remain constant.
Liquidity risk
Liquidity risk is the risk that the consolidated entity will not be able to meet its financial obligations as and when they fall due.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves, by continuously monitoring actual and
forecast cash flows and by matching the maturity profiles of its financial assets and liabilities.
The following table sets out the contractual maturity of the consolidated entity’s financial instrument liabilities based on
undiscounted cash flows.
Carrying
amount
$’000
Contractual
cash flows
$’000
1 year or
less
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000 s
Over 5
years
$’000
2021
Trade and other payables
1,195
1,195
1,195
2020
Trade and other payables
349
349
349
-
-
-
-
-
-
Credit risk management
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the
consolidated entity. The consolidated entity is exposed to credit risk from its bank deposits and other receivables as
disclosed in the statement of financial position. The consolidated entity does not have any significant credit risk exposure to
any single counterparty or any consolidated entity of counterparties having similar characteristics.
The credit risk on liquid funds is managed through the use of counterparty banks with acceptable credit-ratings assigned by
international credit-rating agencies. (S+P Australian AA-, Tanzanian B).
5 6
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 Holdings by geographical region
Cash and cash equivalents
Other receivables
Australia
$’000
52,599
506
53,105
Tanzania
$’000
34
-
34
Total
$’000
52,633
506
53,139
The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in
notes 6 and 7.
Fair value measurement
The carrying amounts of Other receivables and Trade and other payables are assumed to approximate their fair values due to
their short-term nature.
25. EVENTS AFTER BALANCE DATE
There have been no events that have arisen between 30 June 2021 and the date of this report or any other item, transaction
or event of a material and unusual nature likely, in the opinion of the directors, to materially affect the operations of the
Company, the results of those operations or the state of affairs of the Company, in future financial years.
26. SIGNIFICANT ACCOUNTING POLICIES
a) Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only,
and information about the parent entity is disclosed in note 23.
b) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at
30 June 2021. Subsidiaries are entities that are controlled by the Company. Control is achieved when the Company is
exposed to, or has rights to, variable returns from its involvement with its subsidiaries and has the ability to affect those
returns through its capacity to direct the activities of its subsidiaries.
Specifically, the consolidated entity controls a subsidiary if, and only if, the consolidated entity has:
• power over the subsidiary (i.e., existing rights that give it the current ability to direct the relevant activities of the subsidiary)
• exposure, or rights, to variable returns from its involvement with the subsidiary
• the ability to use its power over the subsidiary to affect its returns
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the
consolidated entity has less than a majority of the voting or similar rights of an subsidiary, the consolidated entity considers all
relevant facts and circumstances in assessing whether it has power over a subsidiary, including:
• the contractual arrangement(s) with the other vote holders of the subsidiary
• rights arising from other contractual arrangements
• the consolidated entity’s voting rights and potential voting rights.
5 7
ECOGRAF LIMITED ANNUAL REPORT 2O21 26. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
b) Basis of consolidation (continued)
The consolidated entity re-assesses whether or not it controls an entity if facts and circumstances indicate that there is a
change to the elements of control. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the
year are included in the consolidated financial statements from the date the consolidated entity gains control until the date
the consolidated entity ceases to control the subsidiary.
When necessary, adjustments are made to the financial statements of subsidiaries to align to their accounting policies with
the consolidated entity. All consolidated entity assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the consolidated entity are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
c) Taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at
the reporting date in the countries where the consolidated entity operates and generates taxable income.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit or
loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax liabilities are provided using the liability method on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are
recognised for all taxable temporary differences, except:
•
•
when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not
a business combination and at the time of the transaction, it affects neither the accounting profit nor taxable profit or loss; or
in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any
unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be
utilised, except:
•
•
when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and at the time of the transaction, it affects neither the
accounting profit nor taxable profit or loss
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests
in joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against which the temporary
differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that
future taxable profits will allow the deferred tax asset to be recovered.
5 8
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
d) Exploration and development expenditure
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is
carried forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered
through the successful development of an area of interest, or by its sale, or exploration activities are continuing in an area
and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of economically
recoverable reserves.
Where a project or an area of interest has been abandoned, the expenditure incurred thereon is written-off in the year in
which the decision is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area
according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs
in relation to that area of interest. (Refer to note 26g).
Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the
costs of that stage. Site restoration costs include the dismantling and removal of plant, equipment and building structures,
waste removal and rehabilitation of the site in accordance with the permits. Such costs are determined using estimates of
future costs, current legal requirements and applicable technology on a discounted basis.
Payments for exploration and evaluation expenditure are recorded net of any government grants.
e) Operating segments
Operating segments are presented on the same basis as the internal reports provided to the chief operating decision maker
who is responsible for the allocation of resources to operating segments and for assessing their performance.
f) Property plant & equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and
impairment losses.
Property plant & equipment is recorded at the value directly attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by management.
Plant and equipment
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the amounts
recoverable on the basis of net cash flows that are expected to be received from the employment and subsequent disposal
of the assets.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of the item
can be measured reliably. Repairs and maintenance expenses are charged to the profit and loss component of the statement
of comprehensive income during the financial period in which they are incurred.
5 9
ECOGRAF LIMITED ANNUAL REPORT 2O21 26. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
f) Property plant & equipment (continued)
Depreciation
The depreciable amount of all fixed assets including any buildings and capitalised lease assets, but excluding freehold land,
is depreciated on a straight-line basis over their useful lives, commencing from the time the asset is held ready for use as
follows:
Plant and equipment office
Plant and equipment field
Motor vehicles
Furniture and equipment
Leasehold assets
8 years
2–5 years
5 years
4 years
3 years
Residual values of the assets and their useful lives are reviewed and if necessary adjusted, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are included in the profit
and loss component of the statement of comprehensive income.
g)
Impairment of non-financial assets
At each reporting date, the consolidated entity reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared
to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the profit
or loss component of the consolidated statement of profit or loss and other comprehensive income.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the entity estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
h) Foreign currency transactions and balances
Transactions and balances
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the date of
the transaction and 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 and non-monetary items
measured at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the profit or loss component of the
statement of profit or loss and other comprehensive income, except where they are deferred in equity as a qualifying cash
flow or net investment hedge.
Subsidiaries
On consolidation, the assets and liabilities of foreign operations are translated into Australian dollars at the exchange rate
prevailing at the reporting date and their statements of profit or loss are translated at exchange rates prevailing at the dates
of the transactions. Exchange differences arising on translation for consolidation are recognised in other comprehensive
income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign
operation is recognised in the profit or loss.
6 0
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 i)
Employee benefits
Provision is made for the consolidated entity’s liability for employee benefits arising from services rendered by employees up
to reporting date. Short term employee benefits have been measured at the amounts expected to be paid when the liability is
settled, plus related on-costs. Long term employee benefits have been measured at the present value of the estimated future
cash outflows to be made for those benefits.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees and directors.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined using
either the binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield, and the risk-free interest rate for the term of the option, together with non-vesting conditions that do not
determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account
is taken of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification had not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of
the share-based compensation benefit as at the date of modification.
If a non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation.
If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If an equity-settled award is cancelled, it is treated as if it has vested on the date of cancellation and any remaining expense is
recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award are
treated as if they were a modification.
j)
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
6 1
ECOGRAF LIMITED ANNUAL REPORT 2O21 26. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
k)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either
amortised cost or fair value depending on their classification. Classification is determined based on both the business model
within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting
mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it's carrying value is written off.
i.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they
are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated
as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.
ii.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the consolidated entity
intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
iii.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured
at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends
upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit
risk has increased significantly since initial recognition, based on reasonable and supportable information that is available,
without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected
credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable
to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it
is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is
recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss
allowance reduces the asset's carrying value with a corresponding expense through profit or loss.
l) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid
investments with original maturities of 3 months or less.
6 2
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 m) Revenue
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer
at an amount that reflects the consideration to which the consolidated entity expects to be entitled in exchange for those
goods or services.
Other revenue is recognised when it is received or when the right to receive payment is established.
All revenue is stated net of the amount of goods and services tax (GST).
n)
Interest income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial
asset to that asset’s net carrying amount.
o) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is
not recoverable from the Australian Tax Office (ATO). In these circumstances the GST 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.
The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
p) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to the owners of EcoGraf Limited, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for any bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
q) Government grants
Government grants are recognised where they can be reliably measured, it is certain that the grant will be received, and all
attached conditions will be satisfied. When the grant relates to an expense item, it is recognised as income on a systematic
basis over the periods that the related costs for which it is intended to compensate, are expensed. When the grant relates to
an asset, it is offset against the capitalised amount and recognised as income in equal amounts over the expected useful life
of the related asset (when the asset is depreciated).
6 3
ECOGRAF LIMITED ANNUAL REPORT 2O21 26. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
r) Critical accounting estimates and judgements
The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and
best available current information. Estimates assume a reasonable expectation of future events and are based on current
trends and economic data, obtained both externally and generated internally by the consolidated entity.
Key estimates — impairment
The consolidated entity assesses impairment at each reporting date by evaluating conditions specific to the entity that may
lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-
in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.
Recoverability of exploration and evaluation costs
The consolidated entity assesses the recoverability of the carrying value of capitalised exploration and evaluation costs
at each reporting date (or at closer intervals should the need arise). In completing this assessment, regard is had to the
consolidated entity's intentions with regard to proposed future exploration and development plans for individual exploration
areas, to the success or otherwise of activities undertaken in individual areas in recent times, to the likely success of future
planned exploration activities and to any potential plans for divestment of individual areas. Any required adjustments to the
carrying value of capitalised exploration are completed based on the results of this assessment.
Share-based payment transactions
The consolidated entity measures the cost of shares and performance rights issued to directors, employees and third parties
by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of unlisted
performance rights is determined using either the binomial or Black-Scholes pricing model, taking into account the terms and
conditions upon which the instruments were granted.
s)
Leases policy
The consolidated entity assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Consolidated entity as a lessee
The consolidated entity applies a single recognition and measurement approach for all leases, except for short-term leases
and leases of low-value assets. The consolidated entity recognises lease liabilities to make lease payments and right-of-use
assets representing the right to use the underlying assets.
(i) Right-of-use assets
The consolidated entity recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying
asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any
lease incentives received.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives. If
ownership of the leased asset transfers to the consolidated entity at the end of the lease term or the cost reflects the exercise
of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also
subject to impairment. Refer to the accounting policies in section (g) Impairment of non-financial assets.
6 4
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 s)
Leases policy (continued)
ii)
Lease liabilities
At the commencement date of the lease, the consolidated entity recognises lease liabilities measured at the present value
of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by the consolidated entity and payments of penalties for terminating the lease, if
the lease term reflects the consolidated entity exercising the option to terminate. Variable lease payments that do not depend
on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the
event or condition that triggers the payment occurs.
t) New accounting standards and interpretations
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
Conceptual Framework for Financial Reporting (Conceptual Framework)
The consolidated entity has adopted the revised Conceptual Framework from 1 July 2020. The Conceptual Framework
contains new definition and recognition criteria as well as new guidance on measurement that affects several Accounting
Standards, but it has not had a material impact on the consolidated entity's financial statements.
27. STANDARDS ISSUED BUT NOT YET EFFECTIVE
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2021
reporting periods and have not been early adopted by the consolidated entity. The standards and interpretations that were
issued but not yet effective are set out below. The consolidated entity is in the process of considering the impact of the new
standards. Unless stated otherwise below, the potential effects of the following standards and interpretations have not yet
been fully determined.
The list below is considered those relevant to the consolidated entity.
6 5
ECOGRAF LIMITED ANNUAL REPORT 2O21 27. STANDARDS ISSUED BUT NOT YET EFFECTIVE (CONTINUED)
Standard or
Pronouncement
AASB 2020-3
Amendments to
Australian Accounting
Standards – Annual
Improvements 2018-
2020 and Other
Amendments
Description
Who does
it affect?
Effective
date
Annual
reporting
periods
beginning
on or after
1 January
2022
This amending standard makes narrow scope amendments to
a number of standards:
All entities
- AASB 1: to simplify its application by a subsidiary that
becomes a first-time adopter after its parent in relation to
the measurement of cumulative translation differences;
- AASB 3: updating the reference to the Conceptual
Framework for Financial Reporting without changing the
accounting requirements for business combinations;
- AASB 9: clarifying which fees an entity includes when
assessing whether the terms of a new or modified financial
liability are substantially different from the terms of the
original financial liability;
- AASB 116: requiring an entity to recognise the sales
proceeds from selling items produced while preparing
property, plant and equipment for its intended use, and
the related cost, in profit or loss, instead of deducting the
amounts received from the cost of the asset; and
- AASB 137: specifying the costs that an entity includes when
assessing whether a contract will be loss-making.
AASB 2020-1
Amendments to
Australian Accounting
Standards –
Classifications of
Liabilities as Current or
Non-Current
AASB 2020-6
Amendments to
Australian Accounting
Standards –
Classification of
Liabilities as Current or
Non-current – Deferral
of Effective Date
This narrow-scope amendment to AASB 101 Presentation of
Financial Statements clarifies that liabilities are classified as
either current or non-current depending on the rights that
exist at the end of the reporting period; and also clarifies the
definition of settlement of a liability.
For example, a liability must be classified as non-current if
an entity has the right at the end of the reporting period to
defer settlement of the liability for at least 12 months after the
reporting period.
AASB 2020-6 defers the mandatory effective date of
amendments that were originally made in AASB 2020-1 so
that the amendments are required to be applied for annual
reporting periods beginning on or after 1 January 2023 instead
of 1 January 2022.
All entities
Annual
reporting
periods
beginning
on or after
1 January
2023.
6 6
ECOGRAF LIMITED ANNUAL REPORT 2O21NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2021 Standard or
Pronouncement
AASB 2021-2
Amendments to
Australian Accounting
Standards – Disclosure
of Accounting Policies
and Definition of
Accounting Estimates
Description
Who does
it affect?
Effective
date
Annual
reporting
periods
beginning
on or after
1 January
2023
This amending Standard impacts a number of standards:
All entities
- AASB 7: clarifying that information about measurement
bases for financial instruments is expected to be material
to an entity’s financial statements;
- AASB 101: requiring entities to disclose their material
accounting policy information rather than their significant
accounting policies;
- AASB 108: clarifying how entities should distinguish
changes in accounting policies and changes in accounting
estimates;
- AASB 134: identifying material accounting policy
information as a component of a complete set of financial
statements; and
- AASB Practice Statement 2, providing guidance on how
to apply the concept of materiality to accounting policy
disclosures.
6 7
ECOGRAF LIMITED ANNUAL REPORT 2O21 D I R E C T O R S ’
D E C L A R A T I O N
In the directors’ opinion:
1.
The financial statements, comprising the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes
in equity and accompanying notes, are in accordance with the Corporations Act 2001 and:
a)
b)
Comply with accounting standards and the Corporations Regulations 2001; and
Give a true and fair view of the financial position at 30 June 2021 and of the performance for the year ended on
that date.
2.
3.
4.
The Company has included in the notes to the financial statements an explicit and unreserved statement of compliance
with International Financial Reporting Standards.
In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
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 the directors.
Andrew Spinks
Managing Director
Perth, 23 September 2021
6 8
ECOGRAF LIMITED ANNUAL REPORT 2O21
A U D I T O R ’ S
R E P O R T
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ECOGRAF LIMITED
Opinion
We have audited the financial report of EcoGraf Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial
performance for the year then ended; 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 auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We 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.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
6 9
ECOGRAF LIMITED ANNUAL REPORT 2O21
A U D I T O R ’ S
R E P O R T
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Exploration and Evaluation Asset
Refer to Note 8 in the financial statements
The Group has capitalised exploration and evaluation
expenditure with a carrying value of $18,238,000 as at
30 June 2021.
Our audit procedures included:
Ensuring that the right to tenure of the area of
interest was current;
Enquiring with management and
Agreeing a sample of additions to supporting
documentation and ensuring the amounts are
capital in nature and relate to the area of interest;
reviewing
budgets and other documentation as evidence
that active and significant operations in, or relation
to, the area of interest will be continued in the
future;
Assessing
evaluating management’s
determination that exploration activities have not
yet progressed to the stage where the existence
or otherwise of economically recoverable reserves
may be determined; and
and
Assessing
and
evaluating management’s
assessment of whether indicators of impairment
existed at the reporting date.
Our audit procedures included:
Obtaining an understanding of the terms and
conditions of the instruments issued;
Reviewing the completeness of the instruments
issued at reporting date;
Reviewing management’s valuation methodology;
Reviewing the key inputs used in the valuation
model;
Recalculating
the value of
to be
the share-based
payment expense
in
consolidated statement of profit or loss and other
comprehensive income for the year ended 30
June 2021; and
recognised
Reviewing the appropriateness of disclosures in
the financial statements.
We considered this to be a key audit matter due to the
significant management
in
assessing the carrying value of the asset including:
judgments
involved
Determination of whether the exploration and
evaluation expenditure can be associated with
finding specific mineral resources and the basis
on which that expenditure is allocated to an area
of interest;
Assessing whether exploration activities have
reached a stage at which the existence of
economically
reserves may be
determined; and
recoverable
Assessing whether any indicators of impairment
are present and if so, judgement applied to
determine and quantify any impairment loss.
Share-Based Payments
Refer to Note 19 in the financial statements
During
the year,
performance rights.
the Group
issued 8,550,000
Management have accounted for these instruments in
accordance with AASB 2 Share-based Payment.
We have considered this to be a key audit matter
because:
The complexity in valuing these instruments; and
The recognition of the share-based payment
expense is complex due to the variety of vesting
conditions attached to these instruments.
7 0
ECOGRAF LIMITED ANNUAL REPORT 2O21 Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2021 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 accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with 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.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
7 1
ECOGRAF LIMITED ANNUAL REPORT 2O21 A U D I T O R ’ S
R E P O R T
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2021.
In our opinion, the Remuneration Report of EcoGraf Limited, for the year ended 30 June 2021, 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.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 23 September 2021
TUTU PHONG
Partner
7 2
ECOGRAF LIMITED ANNUAL REPORT 2O21 S H A R E H O L D E R
I N F O R M A T I O N
DETAILS OF SECURITIES AS AT 10 SEPTEMBER 2021
CAPITAL STRUCTURE
Securities
Fully paid ordinary shares
Performance rights subject to vesting conditions and expiring on 19 January 2026
TOP 20 HOLDERS OF ORDINARY SHARES
The 20 largest registered holders of fully paid ordinary shares were:
Rank Name
1
2
3
4
5
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
DR PETER DENNETT MEIER & MRS LYNETTE SUZANNE MEIER
NATIONAL NOMINEES LIMITED
6 MR ANDREW PETER SPINKS
7
8
9
BNP PARIBAS NOMS PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
REINDEER INVESTMENTS PTY LIMITED
10 MR KOSTA TRAJKOVSKI & MRS SUSANNE TRAJKOVSKI
11
12
13
CORNWALL HOLDINGS PTY LTD
LAX CONSULTING PTE LTD
BCV NOMINEES PTY LTD
14 MR YINGJIE CHEN
15 MR NICHOLAS BOLGER
16
17
18
ANDREW SPINKS
PHELPS HILL INVESTMENTS PTY LTD
ANDREW SPINKS
19 MR NICOLA CONIDI & MRS GIANNINA CONIDI
20 MRS LORRAINE ATKINSON
Number
449,833,459
7,950,000
Number of Ordinary
Shares held
% of
issued capital
105,738,089
46,124,800
30,819,181
10,533,340
7,668,212
6,640,088
6,523,637
4,228,129
3,257,692
3,191,525
3,179,615
3,039,318
3,000,000
2,900,000
2,645,881
2,575,000
2,460,000
2,429,434
2,401,417
2,369,437
23.51
10.25
6.85
2.34
1.70
1.48
1.45
0.94
0.72
0.71
0.71
0.68
0.67
0.64
0.59
0.57
0.55
0.54
0.53
0.53
Total
251,724,795
55.96
7 3
ECOGRAF LIMITED ANNUAL REPORT 2O21 S H A R E H O L D E R
I N F O R M A T I O N
DETAILS OF SECURITIES AS AT 10 SEPTEMBER 2021
DISTRIBUTION OF LISTED SECURITIES
A distribution schedule of fully paid ordinary shares:
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Holders
Number of Shares
345
1,772
1,214
2,527
1,014
6,872
375,550,113
56,999,899
9,602,268
6,972,145
709,034
%
83.49
12.67
2.13
1.55
0.16
449,833,459
100.00
UNMARKETABLE PARCELS
Holdings less than a marketable parcel of ordinary shares (being 591 shares as at 10 September 2021):
Holders
Number of Shares
284
86,393
SUBSTANTIAL SHAREHOLDERS
The names of substantial shareholders and the number of shares to which each substantial shareholder and their associates
have a relevant interest, as disclosed in substantial shareholding notices given to the Company, are set out below:
Substantial shareholder
First Sentier Investor Holdings Pty Ltd and its related bodies corporate
Paradice Investment Management Pty Ltd
Number of Shares
33,781,166
23,158,090
UNQUOTED SECURITIES
Unquoted securities on issue were as follows:
Class
Performance rights
Expiry
Date
Number of
Rights
Number of
Holders
19 January 2026
7,950,000
8
The Performance rights are subject to performance milestones and were issued under the Incentive Performance Rights Plan.
VOTING RIGHTS
The voting rights attaching to ordinary shares are:
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.
Performance rights do not carry any voting rights.
ON-MARKET BUY BACK
There is no current on-market buy-back.
7 4
ECOGRAF LIMITED ANNUAL REPORT 2O21 S U M M A R Y O F
T E N E M E N T S
MINERAL TENEMENTS
Consolidated entity’s 100% interest:
Licence
ML 548/2015
PL 7907/20121
PL 17824/2021
PL 9331/2013
PL 10092/2014
PL 10388/2014
PL 10390/2014
PL 10872/2016
PL 17823/2021
PL 11081/2017
PL 11082/2017
PL 11143/2017
PL 11196/2018
PL 11386/2019
PL 11598/2021
PL 11600/2021
PL 11668/2021
PL 11667/2021
Area (km2)
9.62
Location
Mahenge, Tanzania
26.42
35.31
2.76
23.23
2.57
2.81
2.60
4.50
2.08
20.77
2.62
46.72
6.73
23.45
2.49
Merelani-Arusha, Tanzania
Mahenge, Tanzania
Mahenge, Tanzania
Merelani-Arusha, Tanzania
Mahenge, Tanzania
Mahenge, Tanzania
Simanjiro, Tanzania
Mahenge, Tanzania
Simanjiro, Tanzania
Simanjiro, Tanzania
Simanjiro, Tanzania
Simanjiro, Tanzania
Simanjiro, Tanzania
Mahenge, Tanzania
Mahenge, Tanzania
229.48
299.90
Kagera-Negara, Tanzania
Kagera-Biharamu, Tanzania
1 Tenement conversion in progress
MINERAL RESOURCE STATEMENT
Epanko Graphite Project Mineral Resource Estimate
30 June 2021
30 June 2020
Classification
Tonnage
(Mt)
Grade
(%TGC)
Measured
Indicated
Inferred
Total
Notes
7.5
12.8
10.4
30.7
9.8
10.0
9.9
9.9
Contained
Graphite
(Kt)
738.9
1,280.0
1,030.6
3,049.5
Tonnage
(Mt)
Grade
(%TGC)
7.5
12.8
10.4
30.7
9.8
10.0
9.9
9.9
Contained
Graphite
(Kt)
738.9
1,280.0
1,030.6
3,049.5
• The Epanko and Merelani-Arusha Graphite Projects are located in Tanzania.
• Totals may not sum due to rounding.
• Mt = 1,000,000 tonnes.
• Tonnage figures have been rounded to the nearest 1,000 and % TGC grades have been rounded to 1 decimal place.
• Mineral Resources are quoted from blocks where the TGC grade is greater than 8%.
7 5
ECOGRAF LIMITED ANNUAL REPORT 2O21 S U M M A R Y O F
T E N E M E N T S
Merelani–Arusha Graphite Project Mineral Resource Estimate
30 June 2021
30 June 2020
Classification
Tonnage
(Mt)
Grade
(%TGC)
Measured
Inferred
Total
Notes
7.4
10.3
17.7
6.7
6.3
6.5
Contained
Graphite
(Kt)
500.0
650.0
1,150.0
Tonnage
(Mt)
Grade
(%TGC)
7.4
10.3
17.7
6.7
6.3
6.5
Contained
Graphite
(Kt)
500.0
650.0
1,150.0
• The Epanko and Merelani-Arusha Graphite Projects are located in Tanzania.
• Totals may not sum due to rounding.
• Mt = 1,000,000 tonnes.
• Tonnage figures have been rounded to the nearest 1,000 and % TGC grades have been rounded to 1 decimal place.
• Mineral Resources are quoted from blocks where the TGC grade is greater than 8%.
Competent Persons’ Statement
The information in this report that relates to Exploration Results is based on information compiled by Mr. Andrew Spinks, a
Competent Person, who is a Member of The Australasian Institute of Mining and Metallurgy and is employed by EcoGraf
Limited. Mr. Spinks has sufficient experience which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of
the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Spinks consents to the
inclusion in the report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources is based on information compiled by Mr. David Williams,
a Competent Person, who is a Member of The Australasian Institute of Mining and Metallurgy and is employed by CSA
Global Pty Ltd, an independent consulting company. Mr. Williams has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent
Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves”. Mr. Williams consents to the inclusion in the report of the matters based on his information in the form and
context in which it appears.
The information in this report that relates to Ore Reserves has been compiled by Mr. Steve O’Grady who is a Member of The
Australasian Institute of Mining and Metallurgy. Mr. O’Grady is employed by Intermine Engineering and produced the Ore
Reserve estimate based on data and geological information supplied by Mr. Williams. Mr. O’Grady has sufficient experience
that is relevant to the estimation, assessment, evaluation, and economic extraction of the Ore Reserve that he is undertaking
to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves”. Mr. O’Grady consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
MINERAL RESOURCE ESTIMATION - GOVERNANCE STATEMENT
EcoGraf Limited ensures that all Mineral Resource Estimates are subject to appropriate levels of governance and internal
controls. Estimation procedures are well established and are subject to systematic internal peer review and external technical
review undertaken by competent and qualified professionals. These reviews have not identified any material issues. EcoGraf
Limited also periodically reviews this governance framework to ensure it remains appropriate for the requirements of its
business activities.
Mineral Resource Estimates are reported on an annual basis in accordance with the 2012 Edition of the “Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (‘JORC Code’). Mineral Resource Estimates
are quoted inclusive of Ore Reserves. Competent Persons named are Members or Fellows of The Australasian Institute of
Mining and Metallurgy and/or The Australian Institute of Geoscientists and qualify as Competent Persons as defined under
the JORC Code.
7 6
ECOGRAF LIMITED ANNUAL REPORT 2O21 C O R P O R A T E
D I R E C T O R Y
DIRECTORS
Non-Executive Chairman
Robert Pett
Andrew Spinks Managing Director
John Conidi
Howard Rae
Non-Executive Director
Executive Director - Finance
COMPANY SECRETARY
Howard Rae
REGISTERED AND PRINCIPAL OFFICE
18 Richardson Street
West Perth WA 6005
Telephone: +61 8 6424 9000
Internet:
Email:
www.ecograf.com.au
info@ecograf.com.au
SHARE REGISTRY
Link Market Services
Level 12, QV1 Building
250 St Georges Terrace
Perth WA 6000
Telephone: 1300 554 474 (toll free within Australia)
Email:
registrars@linkmarketservices.com.au
SOLICITORS
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Telephone: +61 8 9321 4000
Facsimile:
+61 8 9321 4333
King & Wood Mallesons
Level 30, QV1 Building
250 St Georges Terrace
Perth WA 6000
Telephone: +61 8 9269 7000
+61 8 9269 7999
Facsimile:
AUDITOR
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade
Perth WA 6000
Telephone: +61 8 9261 9100
Facsimile:
+61 8 9261 9111
BANKERS
Westpac Banking Corporation
Level 3, Tower 2
123 St Georges Terrace
Perth WA 6000
STOCK EXCHANGE LISTINGS
Australian Securities Exchange
ASX Code: EGR
Frankfurt Stock Exchange (Börse Frankfurt)
FSE Code: FMK
OTCQX Stock Exchange
OTCQX Code: ECGFF
Fully paid ordinary shares
7 7
ECOGRAF LIMITED ANNUAL REPORT 2O2177 # E N G I N E E R I N G C L E A N E N E R G Y
A B N 1 5 1 1 7 3 3 0 7 5 7
P + 61 8 6424 9000 / E info@ecograf.com.au
ASX: EGR FSE: FMK OTCQX: ECGFF
www.ecograf.com.au