ANNUAL REPORT
2019
Graphene - One of the defining substances
and technologies of the 21st century.
FIRST GRAPHENE ANNUAL REPORT 2019
CORPORATE
DIRECTORY
Directors
Warwick Grigor
(Chairman)
Craig McGuckin
(Managing Director)
Peter R. Youd
(Executive Director)
Company Secretaries
Peter R. Youd
Nerida Schmidt
Principal Registered
Office in Australia
1 Sepia Close
Henderson WA 6166
P: +61 1300 660 448
E: info@firstgraphene.net
www.firstgraphene.net
Stock Exchange
Listings
The Company is listed on
the Australian Securities
Exchange Limited
under the trading
code FGR and FGROC.
OUR VALUES
Authenticity and Trust
We honour our
commitments and
care about delivering
reliable solutions to our
customers. We are honest
and transparent in our
interactions with customers,
investors, suppliers and
research partners.
The Company is listed on the
Frankfurt Stock
Exchange under the trading
code FSE:M11.
Share Registry
Automic Registry Services
Level 2,
267 St Georges Terrace,
Perth WA 6000
All securityholder
correspondence to:
PO Box 2226, Strawberry Hills,
NSW 2012
Contact:
P: 1300 288 664
(within Australia)
P: +61 (0)8 9324 2099
(outside Australia)
E: hello@automic.com.au
www.automic.com.au
Auditor
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Solicitors Australia
Steinepreis Paganin
Lawyers and Consultants
Level 4
The Read Buildings
16 Milligan Street
Perth WA 6000
Bankers Australia
Westpac Banking Corporation
Level 6
109 St Georges Terrace
Perth WA 6000
Excellence
We are world leaders in the
science and engineering of
graphene technologies; with
highly skilled colleagues
working with the best
suppliers and research
partners.
Team Spirit and
Collaboration
We are open, flexible,
pro-active, inclusive and
responsive.
Ethics and Integrity
We care about our staff,
our customers and our
environment. We create
products and solutions that
have a positive impact on
people and our planet.
Innovation
We seek out innovative
solutions for our customers.
We are open to close
collaboration with our
customers and suppliers to
create novel, value adding
products and service.
FIRST GRAPHENE ANNUAL REPORT 2019
TABLE OF CONTENTS
Chairman’s Report
Our Journey So Far
Review of Operations
Directors’ Report
Remuneration report (audited)
2
4
6
13
16
Notes to the Consolidated
Financial Statements
1. Basis of preparation
2. Segment reporting
3. Operating profit and finance
income and expense
Auditor’s Independence Declaration
23
4. Income tax
Consolidated Statement of Profit or
Loss and Other Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Consolidated Statement of Cash Flows
24
26
27
28
29
29
34
37
39
39
40
40
5. Earnings per share
6. Cash and cash equivalents
7. Inventories
8. Trade and other receivables 41
9. Exploration and evaluation assets
10. Property, plant and equipment
11. Trade and other payables
12. Borrowings
13. Financial risk management
14. Issued capital
15. Share based payments
16. Reserves and accumulated losses
17. Statement of cash flow reconciliation
18. Commitments
19. Deconsolidation of Graphene Solutions
Pty Ltd
20. Results of the parent company
21. Events since the end of the
financial year
22. Related party transactions
23. Auditors’ remuneration
Directors’ Declaration
Independent Auditor’s Report
Additional Securities Exchange
Information
42
43
45
45
46
52
53
56
56
57
58
60
61
61
62
63
64
67
1
FIRST GRAPHENE ANNUAL REPORT 2019
CHAIRMAN’S REPORT
CHAIRMAN’S
REPORT
Dear Fellow Shareholder
The past year has seen your Company
make significant progress in the
advancement of our business plan
to commercialise the graphene
revolution. To the best of our
knowledge we now have the world’s
largest commercial production facility
for high quality powdered graphene,
with the emphasis on quality.
Four years ago the Company
representatives started attending
graphene conferences around the
world. As the new kids on the block we
were starting on a steep learning curve.
Today, as we attend such conferences,
what is most noticeable is how rapidly
we have progressed compared to our
peers. Our business plan is to remain
focussed on the delivery of bulk
volumes of high quality graphene fit
for delivery into industry.
Reclaimer bucket liner enhanced
with ArmourGRAPHTM
2
“Where all think
alike, no one
thinks very much”
Walter Lippman - 1915
Graphene is an amazing new material with
the promise of a great future, but too many
companies have relied on this perception
without taking it to the next step. First
Graphene recognised that one of the biggest
obstacles to commercialisation of graphene
was the availability of reliable supply of
consistent quality, fit for delivery into industry.
There is no point in companies introducing
graphene into their product ranges if they
can’t get supply. So we constructed the
Henderson production facility so we could
prove to prospective customers of our ability to
supply PureGRAPH®.
After the commissioning of the Henderson
plant we spent six months working on
quality assurance to ensure we had reliable
product quality control. Simultaneously,
and continuing even today, we have been
working on optimising the process flow
sheet to achieve greater efficiency through
the introduction, testing and optimisation of
specialised finishing equipment. While we
have achieved significant success, we also
know we can and will do much better with
more experience.
Before we could legally sell graphene we
had to address regulatory hurdles and
register PureGRAPH® as a new material. The
first milestone was achieved with REACH
registration in Europe, to sell up to 10 tonnes
p.a. Six months later we achieved a similar
status in Australia, with the NICNAS registration
approving sales of up to 100 tonnes p.a. Now
this compliance hurdle has been passed we are
free to build our sales book.
Graphene is very much a disruptive
material. It will bring major cost savings to
many industries and introduce significant
improvements in performance of the materials
to which it is added. As such it will be seen as a
threat by many established companies which
have leadership in their fields. Why would they
want to introduce something that makes their
products last longer if that could diminish
their sales? Thus, we can expect pushback.
This is why we need to be marketing to more
aggressive companies that see an opportunity
to differentiate their products, rather than be a
threat to their markets.
As a bulk supplier of graphene we seek to
sell large volumes to industry as opposed to
feeding the specialised, low volume markets
FIRST GRAPHENE ANNUAL REPORT 2019
CHAIRMAN’S REPORT
for consumer-based products. It is all about
speed to market. First Graphene can offer
exciting technological improvements for
products such as fire retardants and concretes,
but these take time. They offer great growth
opportunities but they won’t happen
overnight.
In the meantime, we see the addition of
PureGRAPH® to polymers and thermoplastics
as profitable target markets. Significant
improvements in the performance of polymer
liners in the mining industry stand out, adding
30-40% improvements in tensile and tear
strengths while also fireproofing materials
that have been problematic in the past. We
have shown the addition of PureGRAPH® to
industrial composites can offer both better
performance and significant cost savings in
their manufacture.
In summary, your team at First Graphene has
substantially de-risked the business of making
graphene. We have developed valuable,
world-leading know-how in the application
of PureGRAPH® to a number of industrial
product lines. The greatest unknown before
us today is the speed of the uptake by industry.
Given the compelling advantages offered
by the introduction of PureGRAPH® we are
confident we face a steep growth curve which
will demonstrate a snowballing effect. We look
forward to reporting sound progress over the
coming months and years.
In closing I would like to thank my fellow
directors, Craig McGuckin and Peter Youd for
their efforts during the year. Craig has worked
tirelessly on the development of production
methods which have resulted in the Company
being positioned as the world’s leading
graphene company. Continuing automation
will see increased production efficiencies and
higher manufacturing throughput, all of which
will continue to keep First Graphene at the
forefront of the graphene world.
As a board we look forward to an even more
exciting and fruitful 2019/20 financial year.
Warwick Grigor
Non-Executive Chairman
30 August 2019
3
FIRST GRAPHENE ANNUAL REPORT 2019
OUR JOURNEY
OUR JOURNEY SO FAR
2015 to date
2015
SEPTEMBER
Program with
UoA to assemble
a temporary,
scaled down
pilot plant to
test and further
optimise this
extraction
process with
a view to
maximise yields
and minimising
the time taken
for the exfoliation
process.
2015
MAY
First results
on graphene
testing received
from University
of Adelaide
(UoA). The
quality of the
prepared
graphene from
Sri Lankan
graphite is
outstanding
and comparable
with the quality
of graphene
prepared by
synthetic routes.
2015
AUGUST
Further
UoA testing
demonstrates
high yield from
exfoliation
method.
2016
JULY
Full size cell
completed
and housed at
Nagrom.
Development
continues on
graphene based
fire retardant.
FGR signs as
Tier 1 partner
in Australian
Research
Council
Research Hub
for Graphene
Enabled Industry
Transformation
(ARC Graphene
Research Hub).
2017
JULY
Further
UoA testing
demonstrates
high yield from
exfoliation
method.
2016
FEBRUARY
2016
APRIL
Within 12 months
have moved to
design of 250
litre full scale cell
design.
2017
MAY
FGR leases
premises for new
Commercial
Graphene
Facility. Cell at
Nagrom shows
greatly improved
production rates.
2016
OCTOBER
UoA licence
agreements for
graphene based
fire retardant IP.
2017
MARCH
FGR lodges
provisional
patent
application
covering its
equipment and/
or methodology
for use in
producing
graphene from
graphite.
2016
SEPTEMBER
Commercial cell
commences
production
with capacity
of 5 tonnes per
annum. FGR
also enters
collaboration
with Flinders
University for
commercial
development
of Vortex Fluidic
Device.
4
Commercial
Graphene
Facility (CGF)
officially opened
by Mr Josh
Wilson MP,
Federal Member
for Fremantle
on Thursday 23
November 2017.
Construction
of Commercial
Grapehene
Facility prgresses
on time and
budget.
2017
OCTOBER
2017
NOVEMBER
First grapehene
despatched from
the Henderson
facility. The
shipment went
to a USA-based
construction
materials
company for
testing in cement
products,
following on
from an enquiry
at the IDTechEx
Conference in
Santa Clara.
2017
DECEMBER
2017
SEPTEMBER
Dr Andy
Goodwin
appointed as
consultant to
the Company.
Dr Goodwin has
been primarily
responsible for
development
and commercial-
isation of
graphene
products at
his previous
employer.
2018
FEBRUARY
Significant
milestone, not
just for the
Company but
also for the global
graphene
industry, with the
commencement
of production
from its CGF
at Henderson,
Western
Australia.
FIRST GRAPHENE ANNUAL REPORT 2019
OUR JOURNEY
newGen has
placed an order
for 2,000 kg of
PureGRAPH®
range products
to be delivered
during 2019,
for use in the
Armour-
GRAPH™
product range.
2018
DECEMBER
First Graphene
has joined the
existing REACH
registration for
Graphene
materials.
Registration
enables sales of
PureGRAPH® at
up to 10 tonne/
yearin the UK
and Europe.
2019
JANUARY
New range
of three
PureGRAPH®
graphene
products is
announced, with
tightly controlled
platelet sizes.
Dr Andy
Goodwin Joins
FGR Full-time as
Chief Technology
Officer.
2018
SEPTEMBER
2018
OCTOBER
Appointment of
Chris McMahon
as Marketing
Manager at the
Manchester-
based Graphene
Engineering
Innovation
Centre.
PureGRAPH®
graphene
has been
successfully
incorporated
into a high
volume
application in
the mining
sector.
2018
NOVEMBER
2D Fluidics
Pty Ltd files
PCT Patent
application
on thin-film
processing
of graphene
oxide and novel
nanomaterials.
Ability to
manufacture
high quality
graphene oxides
in a sustainable
process
which does
not have the
environmental
impact
associated
with existing
methods.
2018
JUNE
FGR joins the
world-leading
Graphene
Engineering
& Innovation
Centre (GEIC) at
the University of
Manchester,
UK, to accelerate
graphene
technology
development
and the
commercial
adoption of FGR
products.
2D Fluidics Pty
Ltd launched to
commercialise
the Vortex
Fluidic Device
(VFD).
2019
MAY
National
Industrial
Chemicals
Notification and
Assessment
Scheme
(NICNAS)
approval
received for
Australia. FGR
is placed in the
unique position
of being the only
company with
regulatory
approval to
manufacture
and sell
graphene
products
in Australia.
NICNAS approval
augments the
Company’s
existing REACH
registration
for the UK and
Europe.
5
FIRST GRAPHENE ANNUAL REPORT 2019
REVIEW OF OPERATIONS
REVIEW OF
OPERATIONS
To be the world’s best provider of high-performance graphene
products and the recognised innovation leader in the
manufacture of graphene materials, delivering high revenue
growth and profitability that differentiates us to the benefit of
our customers, investors and employees.
During the 2019 fiscal year First Graphene
Limited (FGR) made considerable
advances in its graphene business.
Highlights included:
• Appointment of additional technical staff
in both Henderson and Manchester.
• Release of the PureGRAPH® product
range, together with a comprehensive
Product Information Sheet.
• Appointment of Dr Andy Goodwin as
Chief Technology Officer.
• Appointment as the supplier of graphene
powders to the Graphene Engineering
Innovation Centre (GEIC).
• Registration with the Graphene REACH
Registration Consortium, enabling the
sale of up to 10 tonnes of graphene in the
United Kingdom and European Union.
• Registration in Australia under the
National Industrial Chemicals Notification
and Assessment Scheme (NICNAS).
• Commenced sales of PureGRAPH®
powders to industry partners.
• Launched a new platform to support its
growing base of international customers
and stakeholders – www.firstgrahene.net.
FGR’s concentration has been to market
into areas where higher volumes of
graphene powders will be utilised. As the
world’s largest manufacturer of high quality
graphene powder, we are in a position to
provide volume and quality at a price which
is attractive to industry participants for
adoption.
Composites
A composite material is composed of two
or more materials that when combined,
provide superior properties to those of the
individual constituents.
In this case, we are referring to fibre
reinforced polymer (FRP) composites, which
typically use glass, carbon, aramid or natural
fibres in combination with polymer resins.
PureGRAPH® graphene is generally mixed
with the resin prior to combination with the
textile reinforcement.
FRP composites are typically used in place
of metal structures and components
where reduced weight is required,
however, PureGRAPH® graphene has been
shown to provide a significant step-up
in performance of composite materials
compared with many other graphene
products.
6
FIRST GRAPHENE ANNUAL REPORT 2019
REVIEW OF OPERATIONS
Features and benefits of using PureGRAPH® additives in composites as follows:
Features
Benefits
Disperses well in resins
Easy to use and good dispersion leads to high performance
Increased mechanical strength
Increased composite performance or potential for light-
weighting with unchanged performance. Light-weighting of
composites could lead to reduced fuel consumption, increased
vehicle performance, reduced emissions and potential cost
savings
Increased flexural strength of
laminates
Potential for thinner and lighter weight composite panels and
vandal-proof composite materials
Improved water resistance
Enhanced barrier properties for aquatic applications or where
water penetration is an issue
Increased electrical and
thermal conductivity
Improved static removal properties and enhanced thermal
management characteristics
Fire retardancy
Potential for improved safety in critical applications
• Self-extinguishing
• Efficient barrier to oxygen
• Suppression of toxic and flammable volatiles
• Alternative to harmful chemicals
• May be used as an additive in an existing FR formulation
Simplified manufacture of
composite components
Reduction in localised curing issues
7
FIRST GRAPHENE ANNUAL REPORT 2019
REVIEW OF OPERATIONS
REVIEW OF OPERATIONS (CONTINUED)
Elastomers
PureGRAPH® can be utilised as an additive
in a wide range of rubber formulations to
significantly enhance their performance in a
variety of applications.
Existing applications include wear lining
materials for the mining and mineral
handling industries and specialist footwear.
Rubber wear linings are frequently used in
the mining and mineral handling industries
to minimise wear on heavy equipment
that needs to handle heavy and abrasive
ore and aggregates. The polymer wear
liners are sacrificial and are used to protect
the steel equipment parts; the key benefit
being that the production downtime to
replace a polymer liner is relatively short.
Wear linings incorporating PureGRAPH®
have led to significant improvements in
the performance of elastomers, enabling
customers to achieve market growth
through product superiority and cost
savings for end users.
Features and benefits of using PureGRAPH® additives in elastomers as follows:
Features
Benefits
Disperses well in most rubber
formulations
Easy to use and efficient dispersion leads to optimisation of
enhancements provided by graphene
Increased tensile strength
of elastomer (30-40%
improvement possible)
Significant step up in performance of elastomers in terms of
wear, resistance to damage and extended life
Increased elongation
Improved impact resistance and wear performance over time
Increased abrasion resistance
(100-500% improvement
possible)
Substantial improvement in wear properties leading to
reduced downtime of plants/machines and reduction in part
consumption
Increased electrical and
thermal conductivity
Improvement in conductivity and heat dissipation possible for
specific applications
Fire retardancy
Potential for improved safety in critical elastomer applications
Simplified manufacture of
composite components
Reduction in localised curing issues
8
FIRST GRAPHENE ANNUAL REPORT 2019
REVIEW OF OPERATIONS
Concrete
Population growth and rapid urbanisation
continue to boost the growth of concrete
products but the industry faces major
challenges notably the pressure to reduce
the carbon footprint (CO2 contribution) of
cement-based products.
The use of graphene admixtures can
increase strength, reduce materials usage
(reducing carbon footprint) and potentially
increase longevity of products.
The technology has the potential to deliver
stronger, lighter concrete structures
enabling a new generation of concrete
designs.
PureGRAPH® graphene additives give
stronger, lighter concrete structures
enabling novel and potentially greener
approaches in building and infrastructure
project design. External testing show a
34% increase in the compressive strength
and a 27% increase in the tensile strength
of concrete, when tested to international
standard methods.
The chart below indicates that using
PureGRAPH® as an additive in concrete
reduces the water permeability and
potential for re-bar corrosion. A reduction
in steel re-bar corrosion could significantly
extend the life of reinforced concrete
structures.
Features and benefits of using PureGRAPH® additives in mortar and concrete are as follows:
Features
Benefits
Disperses well in most water-
based formulations
Easy to use and good dispersion will optimise the final
characteristics of the concrete
Stronger and lighter concrete
structures
New architectural designs now possible.
Potential for reduction of total build cost
Reduction in material usage
and carbon footprint caused by
cement-based products
Reduced consumption of earth’s resources per m3 of build
Reduced carbon footprint
Potential increase in longevity
of concrete structures
Extended life of reinforced concrete structures through
reduction in corrosion of steel reinforcements over time
ELECTRICAL RESISTIVITY
)
-
m
Ω
k
(
y
t
i
v
i
t
s
i
s
e
R
200
180
160
140
120
100
80
60
40
20
0
0.00
0.05
0.10
0.15
0.20
0.25
Graphene/Cement Ratio (%)
9
FIRST GRAPHENE ANNUAL REPORT 2019
REVIEW OF OPERATIONS
REVIEW OF OPERATIONS (CONTINUED)
2D Fluidics Pty Ltd – Vortex Fluidic Device
A new programme for the Vortex Fluidic Device
(VFD) process technology to run at the University
of Manchester was initiated in early 2019 and two
VFD’s have been located within the laboratory of
First Graphene Ltd at the Graphene Engineering &
Innovation Centre (GEIC), University of Manchester.
Dr Kasturi Vimalanathan the leading researcher in
VFD will also co-ordinate evaluations of the VFD
approach with researchers across the University
departments. In particular the initial focus of Dr
Vimalanathan will be to characterise and evaluate
the performance of the Green Graphene Oxide
(gGo™) developed by 2D Fluidics using the VFD.
The programme is expected to accelerate the
understanding of gGo™ produced in various real
world applications. Of particular interest to the
graphene and 2D materials industry is the use
of VFD for sustainable manufacture of graphene
oxide and the controlled exfoliation of non-
carbon 2D materials for electronic and catalyst
applications.
Working with the capabilities at the GEIC, 2D
Fluidics Pty Ltd and First Graphene Ltd researchers
will lead the characterisation of the produced 2D
materials and develop scale-up plans for these
novel processes.
Sri Lanka – Exploration and Evaluation Assets
In July 2018 the board took the decision to curtail mining activities at Aluketiya, Sri Lanka and
to place all exploration and mining assets on care and maintenance. This decision enabled
management to focus on the Company’s core business of graphene development and
production and generated considerable costs savings. Contemporaneously, the Company
continued to purchase and import high grade graphite from Kahatagaha Graphite Lanka
Limited (KGLL). As at the date of this report FGR holds over 300 tonnes of raw graphite in
its warehouse in Perth. As reported on 4 July 2019 FGR placed an order for an additional 500
tonnes of KGLL graphite.
Given the above circumstances the board has resolved to write down the carrying value
of its exploration and evaluation assets as required under the accounting standards. This
conservative approach will also ensure future earnings are not impinged upon by future
write downs in these assets.
10
FIRST GRAPHENE ANNUAL REPORT 2019
REVIEW OF OPERATIONS
AIM
Late in 2018 the Company commenced the
process to seek admission to the Alternative
Investment Market (AIM) in the United
Kingdom. Market conditions prior to the
year end led the Board to hold the project
over to the new year and conduct a review
of the equity market conditions and the
status of the UK’s Brexit negotiations, the
latter meant to having been resolved by
the end of March 2019. As shareholders are
aware the Brexit conundrum continues
and as a result the Board resolved to not
seek admission to AIM. This decision has
proven prescient, as recent data showed
funds raised on AIM fell year on year in May
and June by 71% and 78% respectively. The
£2.2bn raised on AIM through to the end of
June is down 38% on the £3.57bn raised at
the same stage in 2018.
Environment
The Directors and management are
conscious of ensuring all activities are
undertaken with a view of achieving the
highest environmental standards that
are practically possible.
The Company’s Commercial Graphene
Production facility has met the
environmental standards set down by
the Government of Western Australia’s
Department of Environment Regulation.
The Company is actively working to
establish a method of production
for Graphene Oxide which will be
environmentally less harmful than
the existing Hummers and modified
Hummers methods.
Safety
Employment and Training Program
All potential full time employees must
undergo a Company funded full medical
examination prior to commencing
employment. All employees are also
required to complete a Company
funded safety first training course at the
commencement of employment and
annual refresher courses.
11
REVIEW OF OPERATIONS (CONTINUED)
CONSOLIDATED
FINANCIAL REPORT
2019
For the year ended 30 June 2019
12
12
DIRECTORS’ REPORT
Directors’ Report
The directors present their report together with
the financial report of First Graphene Limited
(‘Company’) and the entities it controlled
(‘Consolidated Entity’ of ‘Group’) for the year
ended 30 June 2019.
Directors
The names and details of the Company’s
Directors in office during the financial year and
until the date of this report are as follows. The
Directors were in office for this entire period
unless otherwise stated.
Warwick Grigor BEc. LLB, MAusIMM, FAICD
Non-Executive Chairman
National
University
is a highly
Mr Grigor
respected and
experienced mining analyst, with an intimate
knowledge of all market related aspects of the
mining industry. He is a graduate of the
Australian
having
completed degrees in law and economics. His
association with mining commenced with a
position
finance department of
Hamersley Iron, and from there he moved to
Sydney to become a mining analyst with
institutional stockbrokers. Mr Grigor left County
NatWest Securities in 1991 to found Far East
Capital Limited which was established as a
specialist mining company
financier and
together with Andrew
corporate adviser,
"Twiggy" Forrest.
the
in
In 2008, Far East Capital Limited sponsored the
formation of a stockbroking company, BGF
Equities, and Mr Grigor assumed the position of
Executive Chairman. This was re-badged as
Canaccord Genuity Australia Limited when a
50% stake was sold to Canaccord Genuity
Group Inc. Mr Grigor retired from Canaccord in
October 2014, returning to Far East Capital
Limited.
Former directorships in the last 3 years
Non-executive director of Peninsular Energy
Limited.
Interests in shares and options
Ordinary shares
Options
17,105,946
5,137,500
FIRST GRAPHENE ANNUAL REPORT 2019
DIRECTOR’S REPORT
Managing Director
Mr McGuckin is a qualified mining professional
with 33 years’ experience in the mining, drilling
and petroleum industries. He has held senior
positions including Senior Planning Engineer,
Mine Manager and Managing Director of
private and publicly listed companies.
No other directorships have been held in the
last three years.
Former directorships in the last 3 years
None
Interests in shares and options
Ordinary shares
7,881,240
Peter Youd B Bus (Accounting), AICA
Executive Director
Mr Youd is a Chartered Accountant and has
extensive experience within the resources and
oil and gas services, industries. For the last 30
years Mr Youd has held a number of senior
management positions and directorships for
in
publicly
Australia and overseas.
listed and private companies
Other Current Directorships
Non-executive director of Haranga Resources
Limited.
Former directorships in the last 3 years
None
Interests in shares and options
Ordinary shares
Options
6,511,521
52,091
Clive Carver
Non-Executive Director
Mr Carver spent five years at Williams de Broe,
which became part of the ING Group, where
he became head of Corporate Finance and
Corporate Sales.
From 2006 to 2011 Mr Carver worked for
finnCap, where he was a main Board Director
and head of Corporate Finance.
Mr Carver was an AIM Qualified Executive for
15 years. He is also a qualified Corporate
Treasurer.
Craig McGuckin, Dip. Minsurv Class 1, Dip
Surfmin
Appointed 22 October 2018
Resigned 4 February 2019
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
13
FIRST GRAPHENE ANNUAL REPORT 2019
DIRECTOR’S REPORT
DIRECTORS’ REPORT (CONTINUED)
Former directorships in the last 3 years
Significant Changes in State of Affairs
Share Options
None
Interests in shares and options None
Company Secretaries
Peter Youd B Bus (Accounting), AICA
Nerida Schmidt B Com, CPA, F Fin (GDipAFin),
ACIS (GDip CSP)
Ms Schmidt has 28 years’ professional
experience as
the CFO and company
secretary of a number of ASX, TSX and AIM
listed companies in a variety of industries and
has consulted to a number of listed and
unlisted entities providing corporate, company
secretarial and financial services. She holds a
Bachelor of Commerce from the University of
Western Australia,
is a Certified Practising
Accountant and a Fellow of Finsia. She is also a
Chartered Secretary and holds a Graduate
Diploma in Company Secretarial Practice.
Results and Dividends
The Group result for the year was a loss of
$6,986,738 (2018: loss of $7,024,612).
No final dividend has been declared or
recommended as at 30 June 2019 or as at the
date of this report (2018: $ nil).
No interim dividends have been paid (2018:
nil).
Principal Activities
the
financial year
the principal
During
continuing activities of the Consolidated Entity
was as the leading supplier of high-performing
graphene
robust
products with
manufacturing platform and an established
100
production
capacity. PureGRAPH® graphene is easy to
use and
is enhancing the properties of
customers’ products and materials across
industries and applications worldwide.
tonne/year
graphene
a
First Graphene
Limited has a primary
manufacturing base in Henderson, near Perth,
WA. The company is incorporated in the UK as
First Graphene (UK) Ltd. and is a Tier 1 partner
at the Graphene Engineering and Innovation
Centre (GEIC), Manchester, UK.
Events Since the End of the Financial Year
In the period from the year end until 30 August
2019 $2.4 million was
received from the
exercise of options. There are no other known
subsequent events of a material nature.
14
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
the
further
information on
There were no significant changes in the state
of affairs of the consolidated entity during the
financial year.
Likely Developments and expected results of
operations
The Directors have excluded from this report
any
likely
developments in the operations of the Group
and the expected results of those operations in
future financial years, other than as mentioned
in the Chairman’s Statement and Review of
Operations as the Directors have reasonable
grounds to believe the nascent nature of the
graphene market makes it impractical to
forecast future profitability and other material
financial events.
At the date of this report, First Graphene Limited has the following listed options holders holding
options exercisable into ordinary shares in First Graphene Limited.
Listed
Grant Date
Exercise Price
Number
under option
Share option
Various
8 August
(a) $0.20
each,
if
56,914,212
Date of
Expiry
2021
(b)
$0.25
each,
if
exercised after 8
August 2019 but on
or before 8 August
2020; and
exercised after 8
August 2020 but on
or before 8 August
2021.
Unlisted
Grant Date
Exercise Price
Date of
Expiry
Number
under option
Share option
6 February
26 February
$0.18 each, if exercised
5,000,000
2019
2022
on or before 26 February
2022
The number of meetings of Directors held during the year and the number attended by each
Directors’ meetings
Director was as follows:
Warwick Grigor
Craig McGuckin
Peter Youd
Directors’ Meetings
Meetings Attended
Entitled to Attend
3
3
3
-
3
3
3
-
Directors’ and other officers’ emoluments
Details of the remuneration policy for Directors
and other officers are included in Principle 8:
“Remunerate fairly and responsibly” of the
Remuneration Report (page 16) and the
Corporate Governance Principles (page 22).
Details of
the nature and amounts of
emoluments for each Director of the Company
and Executive Officers are included in the
Remuneration Report.
Environmental Regulations
The Group’s graphene production operations
are subject to regulation In Australia by the
National Industrial Chemicals Notification and
Assessment Scheme (NICNAS) and by the
Registration, Evaluation, Authorisation and
Restriction of Chemicals (REACH)
the
European Union and United Kingdom.
in
Proceedings on behalf of company
Clive Carver Resigned 4 Feb 2019
No person has applied to the Court under
section 237 of the Corporations Act for leave to
bring proceedings on behalf of the Company
or intervene in any proceedings to which the
Company is a party for the purpose of taking
responsibility on behalf of the Company for all
or any part of those proceedings.
The Company was not a party to any such
proceedings during the year.
Indemnification and insurance of officers and auditors
Under the Company’s constitution and subject to section 199A of the Corporations Act 2001,
the Company indemnifies each of the directors, the company secretary and every other
person who is an officer of the Company and its wholly-owned subsidiaries. The above
indemnity is a continuing indemnity and applies in respect of all acts done by a person while
an officer of the Company or its wholly-owned subsidiaries even though the person is not an
officer at the time the claim is made.
The Company has entered into a Deed of Indemnity, Access and Insurance (“Deed”) with
each current and former officer of the Company and its subsidiaries, including each director
and company secretary and persons who previously held those roles.
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
DIRECTOR’S REPORT
DIRECTORS’ REPORT (CONTINUED)
Share Options
At the date of this report, First Graphene Limited has the following listed options holders holding
options exercisable into ordinary shares in First Graphene Limited.
Listed
Grant Date
Share option
Various
Date of
Expiry
8 August
2021
(a) $0.20
Exercise Price
each,
if
exercised after 8
August 2019 but on
or before 8 August
2020; and
$0.25
if
exercised after 8
August 2020 but on
or before 8 August
2021.
each,
(b)
Number
under option
56,914,212
Unlisted
Grant Date
Date of
Expiry
Exercise Price
Share option
6 February
2019
26 February
2022
$0.18 each, if exercised
on or before 26 February
2022
Number
under option
5,000,000
Directors’ meetings
The number of meetings of Directors held during the year and the number attended by each
Director was as follows:
Warwick Grigor
Craig McGuckin
Peter Youd
Clive Carver Resigned 4 Feb 2019
Directors’ Meetings
Meetings Attended
Entitled to Attend
3
3
3
-
3
3
3
-
Indemnification and insurance of officers and auditors
Under the Company’s constitution and subject to section 199A of the Corporations Act 2001,
the Company indemnifies each of the directors, the company secretary and every other
person who is an officer of the Company and its wholly-owned subsidiaries. The above
indemnity is a continuing indemnity and applies in respect of all acts done by a person while
an officer of the Company or its wholly-owned subsidiaries even though the person is not an
officer at the time the claim is made.
The Company has entered into a Deed of Indemnity, Access and Insurance (“Deed”) with
each current and former officer of the Company and its subsidiaries, including each director
and company secretary and persons who previously held those roles.
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
15
FIRST GRAPHENE ANNUAL REPORT 2019
DIRECTOR’S REPORT
DIRECTORS’ REPORT (CONTINUED)
During the financial year, the Company has paid a premium in respect of insuring the
directors and officers of the Company and the Group. The insurance contract prohibits
disclosure of the premium or the nature of liabilities insured against under the policy.
No indemnity or insurance is in place in respect of the auditor.
Remuneration report (audited)
The information provided in this Remuneration Report has been audited as required by section
308(3C) of the Corporations Act 2001.
This report outlines the remuneration arrangements in place for Directors of First Graphene
Limited and Executives of the Group.
Key Management Personnel disclosed in this report:
Mr Craig McGuckin
Mr Peter Youd
Dr Andy Goodwin
Mr Warwick Grigor
Mr Clive Carver
Remuneration Policy
(Appointed 19 September 2018)
(Appointed 22 October 2018, resigned 4 February 2019)
Emoluments of Directors and Senior Executives are set by reference to payments made by
other companies of similar size and industry, and by reference to the skills and experience of
the Directors and Executives. Details of the nature and amounts of emoluments of each
Director of the Company are disclosed annually in the Company's annual report.
Directors and Senior Executives are prohibited from entering into transactions or arrangements
which limit the economic risk of participating in unvested entitlements.
There has been no direct relationship between the Group’s financial performance and
remuneration of key management personnel over the previous 5 years.
Executive Director Remuneration
Executive pay and reward consist of a base fee and short term performance incentives. Long
term performance incentives may include options granted at the discretion of the Board and
subject to obtaining the relevant approvals. The grant of options is designed to recognise and
reward efforts as well as to provide additional incentive and may be subject to the successful
completion of performance hurdles.
Executives are offered a competitive level of base pay at market rates (for comparable
companies) and are reviewed annually to ensure market competitiveness.
The remuneration policy is designed to encourage superior performance and long-term
commitment to FGR. At this stage of the Company’s development there is no contractual
performance based remuneration.
Executive Directors do not receive any fees for being Directors of FGR or for attending Board
meetings.
All Executive Directors, Non-Executive Directors and responsible executives of FGR are entitled
to an Indemnity and Access Agreement under which, inter alia, they are indemnified as far as
possible under the law for their actions as Directors and officers of FGR.
Non-Executive Director Remuneration
The Company's policy is to remunerate non-executive Directors at a fixed fee for time,
commitment and responsibilities. Remuneration for Non-Executive Directors is not linked to
individual performance. Given the Company is at its early stage of development and the
financial restrictions placed on it, the Company may consider it appropriate to issue unlisted
options to Non-Executive Directors, subject to obtaining the relevant approvals. This Policy is
16
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
DIRECTOR’S REPORT
DIRECTORS’ REPORT (CONTINUED)
subject to annual review. All of the Directors' option holdings are fully disclosed. From time to
time the Company may grant options to non-executive Directors. The grant of options is
designed to recognise and reward efforts as well as to provide Non-Executive Directors with
additional incentive to continue those efforts for the benefit of the Company.
Non-Executive Directors are remunerated for their services from the maximum aggregate
amount (currently $300,000 per annum) approved by shareholders for this purpose. They
receive a base fee which is currently set at $25,000 per annum per non-executive Director and
$30,000 per annum for the non-executive Chairman. There are no termination payments to
non-executive Directors on their retirement from office.
The Company’s policy for determining the nature and amounts of emoluments of Board
members and Senior Executives of the Company is set out below:
Setting Remuneration Arrangements
The Company does not have a separate Remuneration Committee. This does not comply with
Recommendation 8.1 that the committee consist of only non-executive directors.
Executive Officer Remuneration, including Executive Directors
The remuneration structure for Executive Officers, including Executive Directors, is based on a
number of factors, including length of service, the particular experience of the individual
concerned, and the overall performance of the Company. The contracts for service between
the Company and specified Directors and Executives are on a continuing basis, the terms of
which are not expected to change in the immediate future. Upon retirement Executive
Directors and Executives are paid employee benefit entitlements accrued to the date of
retirement.
As an incentive, the Company has adopted an employee share option plan. The purpose of
the plan is to give employees, directors and officers of the Company an opportunity, in the
form of options, to subscribe for shares. The Directors consider the plan will enable the
Company to retain and attract skilled and experienced employees, board members and
officers, and provide them with the motivation to make the Company more successful.
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
17
FIRST GRAPHENE ANNUAL REPORT 2019
DIRECTOR’S REPORT
DIRECTORS’ REPORT (CONTINUED)
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19
FIRST GRAPHENE ANNUAL REPORT 2019
DIRECTOR’S REPORT
DIRECTORS’ REPORT (CONTINUED)
Relationship between Remuneration and Company Performance
There is not a connection between the profitability of the Company and remuneration as the
Company is not generating revenues.
Name
% Fixed remuneration
% Short Term
Incentive
% Long Term
Incentive
Craig McGuckin
Peter Youd
Warwick Grigor
Dr Andy Goodwin
Service Agreements
100
100
100
100
-
-
-
-
-
-
-
-
Remuneration and other terms of employment for the Executives are formalised in service
agreements. These agreements specify the components of remuneration benefits and notice
periods. The material terms of service agreements with the Executive Directors and Key
Management Personnel are noted as follows:
Name
Term of agreement and notice
period
Base fee
Termination
payment (3)
Mr Craig McGuckin
No fixed term; 12 months(1)
$492,408(2)
Mr Peter Youd
No fixed term; 12 months(1)
$431,258(2)
Dr Andy Goodwin
No fixed term; 3 months
£212,000
None
None
None
1. The twelve-month notice period applies only to the Company. The executive is required to give three months’
There were no loans or other transactions with key management personnel.
notice.
2. Base fee quoted is for the period ended 30 June 2019 and includes vehicle allowance.
3. Notice period of termination benefit in lieu of notice (on behalf of the Company), other than for gross misconduct.
Voting Rights
No remuneration consultants were utilised as at this point in the Company’s development.
There are no other service agreements in place.
Share-based compensation
Shares issued as part of remuneration for the year ended 30 June 2019
No shares were issued to directors and other key management personnel as part of
compensation during the year.
Options issued as part of remuneration for the year ended 30 June 2019
No options were issued to directors and other key management personnel as part of
compensation during the year.
20
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
Options and rights holdings held by key management personnel
Directors
Granted
Exercised
Other
Balance
01.07.18
52,091
5,137,500
-
-
-
C McGuckin
P Youd
W Grigor
Dr Andy
Goodwin (i)
C Carver
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance
30.06.19
Total
vested
30.06.19
Vested &
exercisable
30.06.19
Vested &
un-
exercisable
30.06.19
52,091
52,091
52,091
5,137,500
5,137,500
5,137,500
-
-
-
-
-
-
-
-
-
(450,000) 2,000,000i
1,550,000
1,550,000
1,550,000
(i) Dr Goodwin held 2,000,000 options prior to his appointment as Chief Technology Officer
Balance 01.07.18
Granted
Other
Balance 30.06.19
Shareholdings held by key management personnel
Directors
C McGuckin
P Youd
W Grigor
Dr Andy Goodwin(i)
C Carver
7,631,240
6,511,521
17,105,946
-
-
Acquired
250,000
1,450,000i
-
-
-
-
-
-
-
-
-
-
7,881,240
6,511,521
17,105,946
1,450,000
-
-
-
-
-
-
(i) Dr Goodwin had purchased 1,000,000 shares prior to his appointment as Chief Technology Officer
Transactions with other related parties
During the reporting period, placement fees were paid to Far East Capital Limited, a company
of which Mr Grigor is a Director, for equity raisings during fiscal 2019 totalling $197,868 (2018:
$207,912). There were no other payments to related parties.
At the 2018 Annual General Meeting held on 23 November 2018 there were 15.81% of the votes
against the adoption of the remuneration report.
End of audited Remuneration Report
DIRECTORS’ REPORT (CONTINUED)
FIRST GRAPHENE ANNUAL REPORT 2019
DIRECTOR’S REPORT
Options and rights holdings held by key management personnel
Directors
C McGuckin
P Youd
W Grigor
Dr Andy
Goodwin (i)
C Carver
Balance
01.07.18
-
52,091
5,137,500
-
-
Granted
Exercised
Other
Balance
30.06.19
Total
vested
30.06.19
Vested &
exercisable
30.06.19
Vested &
un-
exercisable
30.06.19
-
-
-
-
-
-
-
-
-
-
-
-
52,091
5,137,500
-
52,091
5,137,500
-
52,091
5,137,500
(450,000) 2,000,000i
1,550,000
1,550,000
1,550,000
-
-
-
-
-
-
-
-
-
-
(i) Dr Goodwin held 2,000,000 options prior to his appointment as Chief Technology Officer
Shareholdings held by key management personnel
Directors
C McGuckin
P Youd
W Grigor
Dr Andy Goodwin(i)
C Carver
Balance 01.07.18
7,631,240
6,511,521
17,105,946
-
-
Granted
-
-
-
-
-
Acquired
250,000
-
-
1,450,000i
-
Other
-
-
-
-
-
Balance 30.06.19
7,881,240
6,511,521
17,105,946
1,450,000
-
(i) Dr Goodwin had purchased 1,000,000 shares prior to his appointment as Chief Technology Officer
Transactions with other related parties
During the reporting period, placement fees were paid to Far East Capital Limited, a company
of which Mr Grigor is a Director, for equity raisings during fiscal 2019 totalling $197,868 (2018:
$207,912). There were no other payments to related parties.
There were no loans or other transactions with key management personnel.
No remuneration consultants were utilised as at this point in the Company’s development.
Voting Rights
At the 2018 Annual General Meeting held on 23 November 2018 there were 15.81% of the votes
against the adoption of the remuneration report.
End of audited Remuneration Report
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
21
FIRST GRAPHENE ANNUAL REPORT 2019
AUDITIOR’S INDEPENDENCE
DIRECTORS’ REPORT (CONTINUED)
Auditor’s independence
The Directors received the independence declaration from the auditor of First Graphene
Limited as stated on page 23.
Non-audit services
During the period BDO Corporate Tax (WA) Pty Ltd was paid $27,038 for the provision of
taxation services (2018: $23,829). BDO Corporate Tax (WA) Pty Ltd is an affiliate member of
BDO Audit (WA) Pty Ltd. Refer to Note 23 for further details
The board of directors has considered the position and is satisfied the provision of the non-
audit services is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001. The directors are satisfied the provision of non-audit services by
the auditor, as set out in Note 23, did not compromise the auditor independence requirements
of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the board to ensure they do not impact
the impartiality and objectivity of the auditor
• none of the services undermine the general principles
relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants
Signed in accordance with a Resolution of the Directors.
Craig McGuckin
Managing Director
Dated at Perth this 30th day of August 2019
.
Corporate Governance Statement
The Company's full Corporate Governance Statement is available on the Company's website,
www.firstgraphene.net/corporate/corporate-governance.html.
A completed Appendix 4G and the full Corporate Governance Statement have been lodged
with the Australian Securities Exchange as required under Listing Rules 4.7.3 and 4.7.4.
22
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
AUDITOR’S INDEPENDENCE DECLARATION
FIRST GRAPHENE ANNUAL REPORT 2019
AUDITIOR’S INDEPENDENCE DECLARATION
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF FIRST GRAPHENE LIMITED
As lead auditor of First Graphene Limited for the year ended 30 June 2019, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of First Graphene Limited and the entities it controlled during the period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth, 30 August 2019
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
23
FIRST GRAPHENE ANNUAL REPORT 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER
Consolidated Statement of Profit or Loss and Other Comprehensive
COMPREHENSIVE INCOME
Income
For the year ended 30 June 2019
Continuing operations
Note
Revenue from contracts with customers
Cost of goods sold
Gross profit/(loss)
Other income
Administration expense
Insurance
Legal fees
Employee benefits expense
Occupancy costs
Communication costs
Development mining expenses
Technical research expenses
Depreciation and amortisation
Impairment of exploration and evaluation
assets
Share based payments expense
Loss on deconsolidation of Subsidiary
Operating loss
Finance income
Finance expense
Loss from continuing operations before tax
Income tax (expense)/benefit
3(a)
3(b)
3(c)
3(d)
3(e)
9
3(f)
19
3(g)
3(g)
4
2019
A$
22,771
(30,112)
(7,341)
2018
A$
7,180
-
7,180
1,684,458
(2,250,394)
942,052
(1,426,559)
(102,659)
(61,934)
(548,821)
(84,681)
(125,746)
(75,232)
(67,557)
(66,326)
(73,884)
(93,527)
(304,834)
(1,313,348)
(2,476,028)
(3,285,612)
(494,642)
(230,172)
(1,856,109)
-
(361,976)
(1,258,679)
(57,513)
-
(7,048,220)
(6,941,664)
107,284
(45,802)
11,322
(94,270)
(6,986,738)
(7,024,612)
-
-
Loss for the year
(6,986,738)
(7,024,612)
Other comprehensive income
Items which may be reclassified to
profit or loss
Exchange differences arising on
translation of foreign operations
Other comprehensive income for the year
9,385
9,385
13,721
13,721
Total comprehensive loss for the year
(6,977,353)
(7,005,463)
24
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
Loss for the year attributable to:
Owners of First Graphene Limited
Non-Controlling interests
Total comprehensive loss for the year attributable to:
Owners of First Graphene Limited
Non-Controlling interests
Loss per share for the year attributable to
the owners of First Graphene Limited
Basic (loss) per share (cents per share)
Diluted (loss) per share (cents per share)
5
5
(7,364,644)
(6,204,170)
377,906
(820,442)
(6,986,738)
(7,024,612)
(7,355,259)
(6,185,021)
377,906
(820,442)
(6,977,353)
(7,005,463)
(1.78)
(1.78)
(1.65)
(1.65)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME (CONTINUED)
Loss for the year attributable to:
Owners of First Graphene Limited
Non-Controlling interests
Total comprehensive loss for the year attributable to:
Owners of First Graphene Limited
Non-Controlling interests
(7,364,644)
(6,204,170)
377,906
(820,442)
(6,986,738)
(7,024,612)
(7,355,259)
377,906
(6,185,021)
(820,442)
(6,977,353)
(7,005,463)
Loss per share for the year attributable to
the owners of First Graphene Limited
(1.65)
Basic (loss) per share (cents per share)
(1.65)
Diluted (loss) per share (cents per share)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes
(1.78)
(1.78)
5
5
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
25
FIRST GRAPHENE ANNUAL REPORT 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
Consolidated Statement of Financial Position
At 30 June 2019
Note
2019
A$
2018
A$
Assets
Current assets
Cash and cash equivalents
Inventories
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Exploration and evaluation assets
Property, plant and equipment
Intangible assets
Investment in associate
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowing
Lease liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Capital and reserves attributable to
owners of First Graphene Limited
6
7
8
9
10
20
11
12
14
16
3,664,137
1,005,641
182,250
377,841
5,229,869
-
1,627,502
250,000
-
1,877,502
7,107,371
4,838,929
571,008
219,429
97,597
5,726,963
1,824,117
1,229,343
250,000
-
3,303,460
9,030,423
1,019,622
1,501,015
-
-
541,638
76,477
1,019,622
2,119,130
-
-
1,019,622
6,087,749
11,048
11,048
2,130,178
6,900,245
85,068,406
5,148,099
(84,292,030)
5,924,475
79,104,128
4,313,941
(76,437,389)
6,980,680
Non-controlling interest
Total equity
163,274
6,087,749
(80,435)
6,900,245
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes
26FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
5
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27
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED OF CASH FLOWS
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED
OF CASH FLOWS
Consolidated Statement of Cash Flows
For the year ended 30 June 2019
Cash flows from operating activities
Revenue from sales
Payments to suppliers and employees
Interest received
Interest paid
R&D and grant funding received
Other income
Note
2019
A$
2018
A$
22,771
(6,866,333)
7,180
(6,039,409)
14,031
(48,837)
1,142,172
408,602
11,322
(17,492)
642,906
120,203
Net cash outflows from operating activities
17
(5,327,594)
(5,275,290)
Cash flows from investing activities
Payments for property, plant and equipment
(889,244)
(1,005,767)
Proceeds from sale of property, plant and
equipment
Deconsolidation of subsidiary, net of cash
20,845
(191,568)
64,795
-
Net cash outflows from investing activities
(1,059,967)
(940,972)
Cash flow from financing activities
Proceeds from placement of shares
Proceeds from the sale of options
Proceeds from the exercise of options
Proceeds from non-controlling interest
Payment of share issue/capital raising costs
Proceeds from borrowing
Repayments of borrowing
Finance lease payments
4,957,031
5,398,000
-
1,335,811
-
(464,893)
-
(533,419)
(87,525)
467,202
695,162
10
(118,835)
501,583
-
(58,304)
Net cash inflows from financing activities
5,207,005
6,884,818
Net increase/(decrease) in cash and cash
equivalents
(1,180,556)
668,556
Cash and cash equivalents at beginning of the
year
Effect of exchange rate fluctuations on cash held
4,838,929
4,175,134
5,764
(4,761)
Cash and cash equivalents at end of the year
6
3,664,137
4,838,929
The above consolidated statement of cash flows should be read in conjunction with the
accompanying note
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
28
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
1. Basis of Preparation
First Graphene Limited (“FGR” or the “Company”) is a for-profit company limited by shares,
incorporated and domiciled in Australia, whose shares are publicly traded on the Australian
Securities Exchange. Its registered office and principal place of business is:
First Graphene Limited
1 Sepia Close
Henderson WA 6166
A description of the nature of operations and principal activities of FGR and its subsidiaries
(collectively, the “Group”) is included in the Directors’ Report, which is not part of these
financial statements.
The financial statements were authorised for issue in accordance with a resolution of the
directors on 30 August 2019.
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 (AASB) and complies with International
Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB);
• has been prepared on a historical cost basis except for assets and liabilities and share-
based payments which are required to be measured at fair value. The basis of
measurement is discussed further in the individual notes;
is presented in Australian dollars;
•
• presents reclassified comparative information where required for consistency with the
current year’s presentation;
• adopts all new and amended Accounting Standards and Interpretations issued by the
AASB that are relevant to the operations of the Group and effective for reporting
periods beginning on or after 1 July 2018.
• adopted AASB 2015-2 ‘Amendments to Australian Accounting Standards – Disclosure
initiative: Amendments to AASB 1010.’
• adopted Accounting Standards and Interpretations which have been issued or
amended including consequential amendments to other standards which was
adopted on 1 July 2018.
Accounting policies
New standards, interpretation and amendments adopted by the Group
The accounting policies adopted in the preparation of the consolidated financial statements
are consistent with those followed in the preparation of the Group’s annual consolidated
financial statements for the year ended 30 June 2018, except for the adoption of new
standards effective as of 1 July 2018. The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet effective.
The Group applies, for the first time, AASB 15 Revenue from Contracts with Customers and AASB
9 Financial Instruments which do not require restatement of previous financial statements. The
nature and effect of these changes are disclosed below.
AASB 15 Revenue
AASB 15 Revenue establishes a new revenue recognition model which changes, expands and
improves disclosures about revenue. Whilst the standard was effective 1 July 2018, its adoption
did not have a material impact on the group.
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
29
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
AASB 9 Financial Instruments
AASB 9 Financial Instruments replaces the provisions of AASB 139 Financial Instruments:
Recognition and Measurement that relate to the recognition, classification and measurement
of financial assets and financial liabilities, derecognition of financial instruments, impairment of
financial assets and hedge accounting.
The adoption of AASB 9 Financial Instruments from 1 July 2018 did not give rise to any material
transitional adjustments. The new accounting policies (applicable from 1 July 2018) are set out
below.
In accordance with the transitional provisions in AASB 9(7.2.15) and (7.2.26), comparative
figures have not been restated.
Revised Accounting Policy
Classification and measurement
Except for certain trade receivables the Group initially measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through profit or loss, transaction
costs.
Under AASB 9 financial assets are subsequently measured at fair value through profit or loss
(FVPL), amortised cost, or fair value through other comprehensive income (FVOCI). The
classification is based on two criteria: the Group’s business model for managing the assets;
and whether the instruments’ contractual cash flows represent ‘solely payments of principal
and interest’ on the principal amount outstanding (the ‘SPPI criterion’).
The new classification and measurement of the Group’s financial assets are, as follows:
• Debt instruments at amortised cost, for financial assets which are held within a business
model with the objective to hold the financial assets in order to collect contractual
cash flows that meet the ‘SPPI criterion’. This category includes the Group’s trade and
other receivables.
Financial assets with embedded derivatives are considered in their entirety when determining
whether their cash flows meet the SPPI criterion.
On transition to AASB 9 the assessment of the Group’s business models was made as of the
date of initial application, 1 July 2018. The assessment of whether contractual cash flows on
debt instruments are solely comprised of principal and interest was made based on the facts
and circumstances as at the initial recognition of the assets.
Impairment of financial assets
AASB 9 replaces the ‘incurred loss’ model in AASB 139 with an ‘expected credit loss’ (“ECL”)
model. The new impairment model is applied to financial assets measured at amortized cost,
contract assets and debt investments at Fair Value Through Other Comprehensive Income
(“FVOCI”), but not to investments in equity instruments.
Under AASB 9, loss allowances are measured on either of the following bases:
•
•
12-month ECLs: these are ECLs that result from possible default events within the 12
months after the reporting date; and
Lifetime ECL: these are ECLs that result from all possible default events over the
expected life of a financial instrument.
ECLs are probability-weighted estimates of credit losses. Credit losses are measured at the
present value of all cash shortfalls (I.e. the difference between the cash flows due to the Group
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
30
Notes to the Consolidated Financial Statements
in accordance with the contract and the cash flows that the Group expects to receive). ECLs
are discounted at the effective interest rate of the financial asset.
The Group has adopted a simplified approach for trade receivables on the initial transaction
date (1 July 2018) with an amount equal to the full ECL to be recognized. As the ECL
assessment has resulted in an immaterial credit loss, no impairment allowance has been
recognized by the Group.
AASB 16 Leases
AASB 16 eliminates the operating and finance lease classifications for lessees currently
accounted for under AASB 117 Leases. It instead requires an entity to bring most leases into its
statement of financial position in a similar way to how existing finance leases are treated under
AASB 117. An entity will be required to recognise a lease liability and a right of use asset in its
statement of financial position for most leases. There are some optional exemptions for leases
with a period of 12 months or less and for low value leases. Lessor accounting remains largely
unchanged from AASB 117.
The Group is still assessing the potential impact of the adoption of this standard.
Adoption is mandatory for financial years commencing on or after 1 January 2019, but
available for early adoption. Expected date of adoption by the group: 1 July 2019.
Basis of consolidation
The consolidated financial statements comprise the financial statements of First Graphene
Limited (First Graphene) and its subsidiaries as at 30 June 2019 (the Group).
Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over
the investee. Specifically, the Group controls an investee if and only if the Group has:
• Power over the investee (i.e. existing rights that give the current ability to direct the
relevant activities of the investee);
• Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group
considers all relevant facts and circumstances in assessing whether it has power over an
investee, including:
The contractual arrangement with the other voting holders of the investee
• Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights
•
•
•
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the statement of comprehensive
income from the date the Group gains control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the
equity holders of the parent of the Group and to the non-controlling interests, even if this results
in the non-controlling interests having a deficit balance. When necessary, adjustments are
made to the financial statements of subsidiaries to bring their accounting policies into line with
the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
in accordance with the contract and the cash flows that the Group expects to receive). ECLs
are discounted at the effective interest rate of the financial asset.
The Group has adopted a simplified approach for trade receivables on the initial transaction
date (1 July 2018) with an amount equal to the full ECL to be recognized. As the ECL
assessment has resulted in an immaterial credit loss, no impairment allowance has been
recognized by the Group.
AASB 16 Leases
AASB 16 eliminates the operating and finance lease classifications for lessees currently
accounted for under AASB 117 Leases. It instead requires an entity to bring most leases into its
statement of financial position in a similar way to how existing finance leases are treated under
AASB 117. An entity will be required to recognise a lease liability and a right of use asset in its
statement of financial position for most leases. There are some optional exemptions for leases
with a period of 12 months or less and for low value leases. Lessor accounting remains largely
unchanged from AASB 117.
The Group is still assessing the potential impact of the adoption of this standard.
Adoption is mandatory for financial years commencing on or after 1 January 2019, but
available for early adoption. Expected date of adoption by the group: 1 July 2019.
Basis of consolidation
The consolidated financial statements comprise the financial statements of First Graphene
Limited (First Graphene) and its subsidiaries as at 30 June 2019 (the Group).
Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over
the investee. Specifically, the Group controls an investee if and only if the Group has:
• Power over the investee (i.e. existing rights that give the current ability to direct the
relevant activities of the investee);
• Exposure, or rights, to variable returns from its involvement with the investee; and
•
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group
considers all relevant facts and circumstances in assessing whether it has power over an
investee, including:
The contractual arrangement with the other voting holders of the investee
•
• Rights arising from other contractual arrangements
•
The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the statement of comprehensive
income from the date the Group gains control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the
equity holders of the parent of the Group and to the non-controlling interests, even if this results
in the non-controlling interests having a deficit balance. When necessary, adjustments are
made to the financial statements of subsidiaries to bring their accounting policies into line with
the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
31
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
and cash flows relating to transactions between members of the Group 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. If the Group loses control over a subsidiary, it:
• De-recognises the assets (including goodwill) and liabilities of the subsidiary
• De-recognises the carrying amount of any non-controlling interests
• De-recognises the cumulative translation differences recorded in equity
• Recognises the fair value of the consideration received
• Recognises the fair value of any investment retained’
• Recognises any surplus or deficit in profit or loss
• Reclassifies the parent’s share of components previously recognised in OCI to profit or
loss or retained earnings, as appropriate, as would be required if the Group had directly
disposed of the related assets or liabilities
Investment in Associates
Associates are entities over which the Group has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in
associates are accounted for using the equity method of accounting, after initially being
recognised at cost. The Group’s investment in associates includes goodwill (net of any
accumulated impairment loss) identified on acquisition.
The Group’s share of its associates’ post-acquisition profits or losses is recognised in the
consolidated statement of comprehensive income, and its share of post-acquisition
movements in reserves is recognised in the statement of comprehensive income and reserves.
The cumulative post-acquisition movements are adjusted against the carrying amount of the
investment. Dividends receivable from associates reduce the carrying amount of the
investment.
When the Group’s share of losses in an associate equal, or exceed, its interest in the associate,
including any other unsecured long-term receivables, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf of the associate.
Unrealised gains on transactions between the Group and its associates are eliminated to the
extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred.
Foreign currency translation
The financial report is presented in Australian dollars, which is First Graphene Limited’s
functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation at financial year-end exchange
rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the
exchange rates at the reporting date. The revenues and expenses of foreign operations are
translated into Australian dollars using the average exchange rates, which approximate the
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
32
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
rate at the date of the transaction, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net
investment is disposed of.
OTHER ACCOUNTING POLICIES
Significant and other accounting policies that summarise the measurement basis used and
are relevant to an understanding of the financial statements are provided throughout the
notes to the financial statements. Where possible, wording has been simplified to provide
clearer commentary on the financial report of the Group. Accounting policies determined
non-significant are not included in the financial statements. There have been no changes to
the Group’s accounting policies that are no longer disclosed in the financial statements.
KEY ESTIMATES AND JUDGEMENTS
In the process of applying the Group’s accounting policies, management has made a number
of judgements and applied estimates of future events. Judgements and estimates which are
material to the financial report are found in the following notes.
Note 3
Note 7
Note 9
Note 10
Note 15
Note 19
Expenses
Inventories
Exploration and evaluation assets
Useful life of assets
Share-based payments
Deconsolidation of Graphene Solutions Pty Ltd
THE NOTES TO THE FINANCIAL STATEMENTS
37
40
42
43
53
58
The notes include information which is required to understand the financial statements and is
material and relevant to the operations and the financial position and performance of the
Group. Information is considered relevant and material if, for example:
•
•
•
•
the amount is significant due to its size or nature;
the amount is important for understanding the results of the Group;
it helps to explain the impact of significant changes in the Group’s business; or
it relates to an aspect of the Group’s operations that is important to its future
performance.
The notes are organised into the following sections:
• Performance for the year;
• Operating assets and liabilities;
• Capital structure and risk;
• Other disclosures.
A brief explanation is included under each section.
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
33
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Performance For the Year
This section focuses on the results and performance of the Group. This covers both
profitability and the resultant return to shareholders via earnings per share combined with
cash generation.
2. Segment reporting
Identification of reportable segments
The Group has identified its operating segments based on the internal reports which are
reviewed and used by the Board (the chief operating decision makers) in assessing
performance and in determining the allocation of resources.
The existing operating segments are identified by management based on the manner in which
the Group’s operations were carried out during the financial year. Discrete financial
information about each of these operating businesses is reported to the Board on a monthly
basis.
The reportable segments are based on aggregated operating segments determined by the
similarity of the asset base and revenue or income streams, as these are the sources of the
Group’s major risks and have the most effect on the rates of return. The Group’s segment
information for the current reporting period is reported based on the following segments:
Research and development
As the Company expands its research inhouse and in conjunction with third parties, the Board
monitors the Company based on actual verses budgeted expenditure incurred.
Graphene production
The Board has defined a new reportable segment for the current year, being graphene
production from the Henderson facility. As the Company expands its graphene production
and inventory, the Board monitors the Company based on actual verses budgeted
expenditure incurred.
Corporate services
This segment reflects the overheads associated with maintaining the ASX listed FGR corporate
structure, identification of new assets and general management of an ASX listed entity.
Mining and exploration activities
Although the Company has suspended its mineral exploration and development in Sri Lanka
the Board monitors the Company based on actual verses budgeted exploration expenditure
incurred.
34
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
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35
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Geographical areas
In presenting the information on the basis of geographical areas, segment revenue is based
on the geographical location of operations. Segment assets are based on the geographical
location of the assets.
Geographical segments
Australia
Great Britain
Sri Lanka
Total
2019
Revenue
20,701
2,070
-
22,771
Total Assets
7,027,171
29,724
50,476
7,107,371
2018
Revenue
7,180
-
Total Assets
8,714,548
-
-
7,180
313,279
9,030,423
Reconciliation of segment assets and liabilities to the Statement of financial Position
Reconciliation of segment assets to the Statement of Financial Position
Total segments assets
Inter-segment elimination
Total assets per statement of financial position
2019
8,613,843
(1,506,472)
7,107,371
2018
10,222,216
(1,191,793)
9,030,423
Reconciliation of segment liabilities to the Statement of Financial Position
Total segments liabilities
Inter-segment elimination
Total liabilities per statement of financial position
2019
7,655,421
(6,635,799)
1,019,622
2018
8,859,579
(6,840,148)
2,019,431
36
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
3. Operating profit and finance income and expense
Accounting Policy
Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets.
Dividend revenue is recognised when the right to receive a dividend has been established.
Dividends received from associates and joint venture entities are accounted for in
accordance with the equity method of accounting.
All revenue is stated net of the amount of goods and services tax (GST).
Other revenue includes R&D credits received from the Australian tax government.
Government Grants
Grants from the government are recognised at their fair value where there is a reasonable
assurance that the grant will be received and the Group satisfies all attached conditions.
When the grant relates to an expense item, it is recognised as income over the periods
necessary to match the grant on a systematic basis to the costs that it is intended to
compensate.
When the grant relates to an asset, the fair value is credited against the asset and is released
to the Statement of Profit or Loss and Other Comprehensive Income over the expected useful
life of the relevant asset by equal annual instalments.
Where a grant is received in relation to the tax benefit of research and development costs,
the grant shall be credited to other income in the Statement of Profit or Loss and Other
Comprehensive Income in the year of receipt.
Depreciation
Depreciation is calculated on a straight-line basis to write off the net cost of each item of
property, plant and equipment (excluding land) over their expected useful lives as follows:
Plant and equipment 3-7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each reporting date.
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
37
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Revenue and expenses from continuing operations
Notes
2019
1,666,528
16,790
1,140
1,684,458
431,000
335,252
37,620
43,565
127,359
719,486
187,365
2018
921,238
20,814
-
942,052
155,114
748,402
38,286
23,829
167,314
-
54,848
548,821
66,326
-
367,811
655,860
196,705
379,811
1,338,000
27,200
305,658
29,118
-
-
-
-
-
361,976
14,031
(45,802)
5,764
-
87,489
61,482
-
-
-
544,000
225,000
94,679
225,000
170,000
1,258,679
11,322
-
(4,760)
(9,723)
(79,787)
(82,948)
(a) Other income
R&D and grant income
Profit on sale of property, plant & equipment
Miscellaneous income
(b) Administrative expenses include:
Financial administration and other
consultancy
Directors fee and directors salary
Audit and accounting fees
Other accounting services
ASX listing and share registry fees
Business development (AIM listing)
Travel and accommodation
Employee benefits expense
(c)
As at 30 June 2019: 14 employees remained
within the group (2018: 44)
(d)
Development mining expenses
includes:
Director and consultants’ fees
Technical research expenses include:
(e)
Director and consultants’ fees
University research costs
Share based payments expense
(f)
Shares issued to employees
Options issued to Foster Stockbroking
Options issued to employee
Options granted to directors
Options granted to Traxys
Options issued to consultants
Options issued to Kremford (Vic) Pty Ltd
Shares issued to Kremford (Vic) Pty Ltd
Finance income and expense
(g)
Interest income on bank deposits
Interest expense
Foreign exchange (loss)/gain - realised
Foreign exchange (loss)/gain - unrealised
Finance benefit/(cost) of Traxys liability
38
Notes to the Consolidated Financial Statements
4. Income tax
Accounting Policy
Current tax is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantially enacted at the reporting date, and any adjustment to tax payable
in respect of previous years. The major components of income tax expense are:
A reconciliation between tax expense and the product of accounting profit before income
tax multiplied by the Group’s applicable income tax rate is as follows:
Total loss before income tax from all activities
Prima facie tax benefit on loss before income tax at
30% (2018: 30%)
Unrecognised temporary differences
Unrecognised tax losses
Income tax expense
Income tax expense from continuing activities
Total income tax expense
2019
(6,986,738)
(2,096,021)
376,556
(1,719,465)
-
-
-
2018
(7,024,612)
(2,107,384)
365,464
1,741,920
-
-
-
Unused tax losses for which no deferred tax has been
recognised
Potential tax benefit at 30%
(14,273,969)
(4,282,191)
(13,349,958)
(4,004,987)
The Group has Australian revenue losses from previous years for which no deferred tax assets
have been recognised. The availability to utilise these losses in future periods is subject to
review in the relevant jurisdictions.
5. Earnings per share
Accounting Policy
Earnings per share (“EPS”) is the amount of post-tax profit attributable to each share. The group
presents basic and diluted EPS data for ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the period.
Diluted EPS takes into account the dilutive effect of all potential ordinary shares, being unlisted
employee share options on issue.
Loss attributable to the owners of First Graphene used
(7,364,644)
(6,204,170)
in calculating basic loss per share
Loss attributable to the owners of First Graphene used
(7,364,644)
(6,204,170)
in calculating diluted loss per share
2019
A$
2018
A$
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
4. Income tax
Accounting Policy
Current tax is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantially enacted at the reporting date, and any adjustment to tax payable
in respect of previous years. The major components of income tax expense are:
A reconciliation between tax expense and the product of accounting profit before income
tax multiplied by the Group’s applicable income tax rate is as follows:
Total loss before income tax from all activities
Prima facie tax benefit on loss before income tax at
30% (2018: 30%)
Unrecognised temporary differences
Unrecognised tax losses
Income tax expense
Income tax expense from continuing activities
Total income tax expense
2019
(6,986,738)
(2,096,021)
376,556
(1,719,465)
-
-
-
2018
(7,024,612)
(2,107,384)
365,464
1,741,920
-
-
-
Unused tax losses for which no deferred tax has been
recognised
Potential tax benefit at 30%
(14,273,969)
(4,282,191)
(13,349,958)
(4,004,987)
The Group has Australian revenue losses from previous years for which no deferred tax assets
have been recognised. The availability to utilise these losses in future periods is subject to
review in the relevant jurisdictions.
5. Earnings per share
Accounting Policy
Earnings per share (“EPS”) is the amount of post-tax profit attributable to each share. The group
presents basic and diluted EPS data for ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the period.
Diluted EPS takes into account the dilutive effect of all potential ordinary shares, being unlisted
employee share options on issue.
Loss attributable to the owners of First Graphene used
in calculating basic loss per share
2019
A$
(7,364,644)
2018
A$
(6,204,170)
Loss attributable to the owners of First Graphene used
in calculating diluted loss per share
(7,364,644)
(6,204,170)
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
39
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Earnings per share (cont)
Weighted average ordinary shares used in calculating
basic earnings per share
414,654,396
376,470,853
classified as non-current.
Number of shares
Number of shares
Weighted average ordinary shares used in calculating
diluted earnings per share
414,654,396
376,470,853
Basic loss per share - cents per share
Diluted loss per share - cents per share
(1.78)
(1.78)
(1.65)
(1.65)
There have been no transactions involving ordinary shares between the reporting date and
the date of completion of these financial statements which would impact on the above EPS
calculations.
6. Cash and cash equivalents
Accounting Policy
Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and
in hand. Cash at bank earns interest at floating rates based on daily bank deposit rates.
For the purposes of the Statement of Cash Flows, cash and cash equivalents comprise the
following at the end of the reporting period:
Cash at bank and in hand
2019
A$
3,664,137
3,664,137
2018
A$
4,838,929
4,838,929
The Group’s maximum exposure to financial risk is disclosed in note 13.
OPERATING ASSETS AND LIABILITIES
This section shows the assets used to generate the Group’s trading performance and the
liabilities incurred as a result. Liabilities relating to the Group’s financing activities are
addressed in the capital structure and finance costs section on page 45.
7. Inventories
Ore stockpiles, finished goods and consumables are stated at the lower of cost and net
realisable value. Cost comprises direct materials, direct labour and an appropriate proportion
of variable and fixed overhead expenditure, the latter being allocated on the basis of normal
operating capacity. Costs are assigned to individual items of inventory on the basis of
weighted average costs. Net realisable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion and the estimated costs necessary
to make the sale.
Notes to the Consolidated Financial Statements
Inventories (cont)
Inventories expected to be sold (or consumed in the case of stores) within 12 months after the
Statement of financial position date are classified as current assets, all other inventories are
Opening balance
Inventory purchased
Carrying amount
Key estimates and assumptions
INVENTORIES
2019
A$
571,008
434,633
1,005,641
2018
A$
328,295
242,713
571,008
Net realisable value tests are performed at each reporting date and represent the estimated
future sales price of the product based on prevailing spot metals process at the reporting date,
less estimated costs to complete production and bring the product to sale. All inventory held
at 30 June 2019 relates to raw material and is held at cost.
8. Trade and other receivables
Trade and other receivables, which generally have 30-60 day terms, are recognised initially at
fair value and subsequently measured at amortised cost using the effective interest rate
method, less an allowance for impairment.
For trade receivables, the group has applied the standard’s simplified approach and has
calculated ECLs based on lifetime expected credit losses. The Group has established a
provision matrix that is based on the Group’s historical credit loss experience, adjusted for
forward-looking factors specific to the debtors and the economic environment.
The Group considers a financial asset in default when contractual payments are 90 days
past due. However, in certain cases, the Group may also consider a financial asset to be in
default when internal or external information indicates that the Group is unlikely to receive
the outstanding contractual amounts in full before taking into account any credit
enhancements held by the Group.
Due to the nature of the Group’s trade and other receivables, the impact of the expected
loss allowance under AASB 9 against the loss incurred under AASB 139 was not material to
the Group.
Trade receivable
Grant receivable
Other receivable
Total other current assets
2019
A$
12,448
136,119
33,683
182,250
2018
A$
-
152,820
66,609
219,429
40
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Inventories (cont)
Inventories expected to be sold (or consumed in the case of stores) within 12 months after the
Statement of financial position date are classified as current assets, all other inventories are
classified as non-current.
Opening balance
Inventory purchased
Carrying amount
Key estimates and assumptions
INVENTORIES
2019
A$
571,008
434,633
1,005,641
2018
A$
328,295
242,713
571,008
Net realisable value tests are performed at each reporting date and represent the estimated
future sales price of the product based on prevailing spot metals process at the reporting date,
less estimated costs to complete production and bring the product to sale. All inventory held
at 30 June 2019 relates to raw material and is held at cost.
8. Trade and other receivables
Trade and other receivables, which generally have 30-60 day terms, are recognised initially at
fair value and subsequently measured at amortised cost using the effective interest rate
method, less an allowance for impairment.
For trade receivables, the group has applied the standard’s simplified approach and has
calculated ECLs based on lifetime expected credit losses. The Group has established a
provision matrix that is based on the Group’s historical credit loss experience, adjusted for
forward-looking factors specific to the debtors and the economic environment.
The Group considers a financial asset in default when contractual payments are 90 days
past due. However, in certain cases, the Group may also consider a financial asset to be in
default when internal or external information indicates that the Group is unlikely to receive
the outstanding contractual amounts in full before taking into account any credit
enhancements held by the Group.
Due to the nature of the Group’s trade and other receivables, the impact of the expected
loss allowance under AASB 9 against the loss incurred under AASB 139 was not material to
the Group.
Trade receivable
Grant receivable
Other receivable
Total other current assets
2019
A$
12,448
136,119
33,683
182,250
2018
A$
-
152,820
66,609
219,429
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
41
Notes to the Consolidated Financial Statements
10. Property, plant and equipment
Accounting Policy
Plant and equipment is stated at historical cost less accumulated depreciation and
impairment. Historical cost includes expenditure which is directly attributable to the acquisition
of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of
property, plant and equipment (excluding land) over their expected useful lives as follows:
Plant and equipment 3-7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each reporting date.
Leasehold improvements and plant and equipment under lease are depreciated over the
unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no
future economic benefit to the consolidated entity. Gains and losses between the carrying
amount and the disposal proceeds are taken to the profit or loss. Any revaluation surplus
reserve relating to the item disposed of is transferred directly to retained profits.
Key estimates and assumptions
USEFUL LIFE OF ASSETS
The estimation of useful lives, residual values and depreciation methods require significant
management judgements and are regularly reviewed. If they need to be modified, the
depreciation and amortisation expense is accounted for prospectively from the date of the
assessment until the end of the revised useful life (for both the current and future years).
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
9. Exploration and evaluation assets
Accounting Policy
Exploration and evaluation expenditure is accumulated on an area of interest basis.
Exploration and evaluation assets include the costs of acquiring licences, costs associated with
exploration and evaluation activity, and the fair value (at acquisition date) of exploration and
evaluation assets acquired in a business combination. Expenditure is carried forward when
incurred in areas for which the Group has rights of tenure and where economic mineralisation
is indicated, but activities have not yet reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active
and significant operations in, or in relation to, the area of interest are continuing. The
recoverability of exploration and evaluation assets is dependent on the successful
development and commercial exploitation or sale of the respective areas of interest.
Opening balance
Foreign currency translation adjustment
Impairment in carrying value
Carrying amount
IMPAIRMENT
2019
A$
1,824,117
31,992
(1,856,109)
2018
A$
1,818,355
5,762
-
-
1,824,117
Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to
determine technical feasibility and commercial viability, and (ii) facts and circumstances
suggest that the carrying amount exceeds the recoverable amount. For the purposes of
impairment testing, exploration and evaluation assets are allocated to cash-generating units
(“CGUs”) to which the exploration activity relates. The CGU is not larger than the area of
interest.
Key estimates and assumptions
IMPAIRMENT OF EXPLORATION AND EVALUATION ASSETS
The future recoverability of capitalised exploration and evaluation expenditure is dependent
upon a number of factors, including whether the Group decides to exploit the related lease
itself or, if not, whether it successfully recovers the related exploration and evaluation asset
through sale.
Factors that could impact future recoverability include the level of reserves and resources,
future technological changes which could impact the cost of mining, future legal changes
(including changes to environmental restoration obligations) and changes to commodity
prices. The Company does not have a JORC compliant resource and as a result has decided
not to capitalise any expenditures at this point in its development process.
The Board has assessed the requirements under accounting standard AASB6 - Exploration for
and Evaluation of Mineral Resources, and as a result of the change in strategic direction has
determined the carrying value of the Group’s interests in Sri Lanka should be reduced to nil. A
provision for impairment has been made and the carrying value has been reduced
accordingly.
42
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
10. Property, plant and equipment
Accounting Policy
Plant and equipment is stated at historical cost less accumulated depreciation and
impairment. Historical cost includes expenditure which is directly attributable to the acquisition
of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of
property, plant and equipment (excluding land) over their expected useful lives as follows:
Plant and equipment 3-7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each reporting date.
Leasehold improvements and plant and equipment under lease are depreciated over the
unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no
future economic benefit to the consolidated entity. Gains and losses between the carrying
amount and the disposal proceeds are taken to the profit or loss. Any revaluation surplus
reserve relating to the item disposed of is transferred directly to retained profits.
Key estimates and assumptions
USEFUL LIFE OF ASSETS
The estimation of useful lives, residual values and depreciation methods require significant
management judgements and are regularly reviewed. If they need to be modified, the
depreciation and amortisation expense is accounted for prospectively from the date of the
assessment until the end of the revised useful life (for both the current and future years).
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
43
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Property, plant and equipment (continued)
Reconciliations of the carrying value for each class of property, plant and equipment is set
out below:
Exploration equipment:
Carrying amount at beginning of year
-
-
Carrying amount at year end
Depreciation
Movement due to foreign exchange
Leasehold improvement:
Carrying amount at beginning of year
Depreciation
Movement due to foreign exchange
Carrying amount at year end
Plant & equipment:
Carrying amount at beginning of year
-
-
-
-
Additions
Transfer to office equipment
Cost of plant & equipment sold
Accumulated amortisation of plant & equipment
sold
Depreciation
Movement due to foreign exchange
-
-
Carrying amount at year end
Office equipment:
Carrying amount at beginning of year
-
-
-
-
Additions
Transfer from plant & equipment
Cost of office equipment sold
Accumulated depreciation of office equipment
sold
Depreciation
Movement due to foreign exchange
-
-
Carrying amount at year end
Motor vehicles:
Carrying amount at beginning of year
-
-
-
Carrying amount at year end
Additions
Depreciation
Movement due to foreign exchange
Leased motor vehicles
Carrying amount at beginning of year
Cost of motor vehicle sold
-
Accumulated amortisation of vehicle sold
-
Amortisation
-
Movement due to foreign exchange
-
Carrying amount at year end
2019
A$
98,939
(67,300)
(1,597)
30,042
45,566
(43,565)
(2,001)
-
944,833
711,511
-
(38,522)
34,426
(324,309)
(1,405)
1,326,534
107,900
195,949
-
(36,288)
12,179
(39,935)
(341)
239,464
-
20,512
(3,442)
-
17,070
32,105
-
-
(16,064)
(1,649)
14,392
2018
A$
167,365
(68,011)
(415)
98,939
91,853
(45,566)
(721)
45,566
87,189
941,956
(3,941)
-
-
(79,862)
(509)
944,833
16,793
101,871
3,941
-
-
(14,551)
(154)
107,900
193
-
(191)
(2)
-
98,982
(67,734)
23,753
(21,990)
(906)
32,105
Total carrying amount at year end
1,627,502
1,229,343
44
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements
11. Trade and other payables
Accounting Policy
Trade and other payables represent the liabilities for goods and services received by the entity
which remain unpaid at the end of the reporting period. The balance is recognised as a
current liability with the amounts normally paid within 30 days of recognition of the liability.
Current
Trade and other payables
12. Borrowings
Accounting Policy
Current
Payable to third party
Borrowings are recognised at amortised cost.
2019
A$
2018
A$
1,019,622
1,501,015
1,019,622
1,501,015
2019
A$
-
-
2018
A$
541,638
541,638
The Company signed an agreement with Traxys Europe SA, which provided US$400,000
for the purchase of raw graphite from Sri Lanka. The facility in May 2018 carried an
interest rate of 6.75% per annum. Repayment of the debt was completed in June 2019.
CAPITAL STRUCTURE, FINANCIAL INSTRUMENTS AND RISK
This section outlines how the Group manages its capital, related financing costs and its
exposure to various financial risks. It explains how these risks affect the Group’s financial
position and performance and what the Group does to manage these risks.
The Group’s objectives when managing capital are to safeguard its ability to continue as a
going concern, so that it can continue to provide returns to shareholders and benefits for other
stakeholders and to maintain an efficient capital structure to reduce the cost of capital.
The Board’s policy in relation to capital management is to regularly and consistently monitor
future cash flows against expected expenditures for a rolling period of up to 12 months in
advance. The Board determines the Group’s need for additional funding by way of either
share issues or loan funds depending on market conditions at the time. The Board defines
working capital in such circumstances as its excess liquid funds over liabilities, and defines
capital as being the ordinary share capital of the Company, plus retained earnings, reserves
and net debt. In order to maintain or adjust the capital structure, the Board may adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue new shares or
There were no changes in the Group’s approach to capital management during the year.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital
reduce debt.
requirement.
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
11. Trade and other payables
Accounting Policy
Trade and other payables represent the liabilities for goods and services received by the entity
which remain unpaid at the end of the reporting period. The balance is recognised as a
current liability with the amounts normally paid within 30 days of recognition of the liability.
Current
Trade and other payables
12. Borrowings
Accounting Policy
Borrowings are recognised at amortised cost.
Current
Payable to third party
2019
A$
2018
A$
1,019,622
1,501,015
1,019,622
1,501,015
2019
A$
-
-
2018
A$
541,638
541,638
The Company signed an agreement with Traxys Europe SA, which provided US$400,000
for the purchase of raw graphite from Sri Lanka. The facility in May 2018 carried an
interest rate of 6.75% per annum. Repayment of the debt was completed in June 2019.
CAPITAL STRUCTURE, FINANCIAL INSTRUMENTS AND RISK
This section outlines how the Group manages its capital, related financing costs and its
exposure to various financial risks. It explains how these risks affect the Group’s financial
position and performance and what the Group does to manage these risks.
The Group’s objectives when managing capital are to safeguard its ability to continue as a
going concern, so that it can continue to provide returns to shareholders and benefits for other
stakeholders and to maintain an efficient capital structure to reduce the cost of capital.
The Board’s policy in relation to capital management is to regularly and consistently monitor
future cash flows against expected expenditures for a rolling period of up to 12 months in
advance. The Board determines the Group’s need for additional funding by way of either
share issues or loan funds depending on market conditions at the time. The Board defines
working capital in such circumstances as its excess liquid funds over liabilities, and defines
capital as being the ordinary share capital of the Company, plus retained earnings, reserves
and net debt. In order to maintain or adjust the capital structure, the Board may adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue new shares or
reduce debt.
There were no changes in the Group’s approach to capital management during the year.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital
requirement.
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
45
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
of credit exposures. Amounts due from and
represents
to clients and dealers
receivables sold and payables for securities
purchased which have been contracted
for but not yet settled on the reporting
date, respectively. The majority of these
transactions are carried out on a delivery
versus payment basis, which results
in
securities and cash being exchanged
within a very close timeframe. Settlement
balances outside standard
terms are
monitored on a daily basis.
Exposure to credit risk
The maximum exposure to credit risk,
excluding the value of any collateral or
other security, at the reporting date to
recognised financial assets, is the carrying
amount, net of any provision
for
impairment of those assets, as disclosed in
the statement of financial position and the
notes to the financial statements. The
Group does not have any material credit
risk exposure to any single receivable or
financial
receivables under
group of
instruments entered into by the Group.
The Group’s maximum exposure to credit
risk without taking account of any collateral
or other credit enhancements at the
reporting date was $3,664,137
(2018:
$4,838,929).
The Company banks with Westpac Banking
Moody’s has
Corporation (Westpac).
Westpac’s Long Term Counterparty Risk
Rating as Aa2.
Group
2019
2018
Cash and cash
equivalents
3,664,137 4,838,929
3,664,137 4,838,929
13.
Financial Risk
Management
Financial risk management
(a)
The Group’s principal
The Group’s activities expose it to a variety
of financial risks: credit risk, liquidity risk and
market risk (currency risk and interest rate
risk).
financial
trade and other
liabilities comprise
payables. The main purpose of these
financial liabilities is to raise finance for the
Group’s operations. The Group has various
financial assets such as trade and other
receivables, deposits with banks,
local
money market instruments and short-term
investments. The accounting policy with
respect to these financial instruments is
described in note 1.
Financial risk management structure:
Board of Directors
The Board
is ultimately responsible for
ensuring there are adequate policies in
relation to risk oversight and management
and internal control systems. The Group’s
policies are designed to ensure financial
risks are identified, assessed, addressed
and monitored to enable achievement of
the Group’s business objectives.
(b)
Financial risks
Credit risk
Credit risk refers to the risk a counterparty
will default on its contractual obligation
resulting in financial loss to the Group.
Credit risk is managed on a group basis and
structures the levels of credit risk it accepts
by placing limits on its exposure to a single
counterparty or group of counterparties.
The
significant
no
concentrations of credit risk.
Group
has
It is the Group’s policy to place funds
generated internally and from deposits with
clients with high quality financial institutions.
The Group does not employ a formalised
internal ratings system for the assessment
46
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements
Impairment of financial assets
The group holds trade receivables that are subject to the expected credit loss model. While
cash and cash equivalents are also subject to the impairment requirements of AASB 9, the
identified impairment loss was immaterial.
Trade receivables
The group applies the AASB 9 simplified approach to measuring the expected credit losses
which uses a lifetime expected loss allowance for all trade receivables. The expected credit
losses have been grouped based on shared credit risk characteristics and the days past due.
The expected loss rates are based on the payment profiles of sales over a period of 36
months before 30 June 2019 or 1 July 2018 respectively and the corresponding historical
credit losses experienced within this period. The historical loss rates are adjusted to reflect
current and forward- looking information on macroeconomic factors affecting the ability of
the customers to settle the receivables.
On that basis, the loss allowance as at 30 June 2019 and 1 July 2018 (on adoption of AASB 9)
was determined to be nil.
Trade receivables are written off when there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, amongst others, the
failure of a debtor to engage in a repayment plan with the group and failure to make
contractual payments for a period of greater than 120 days past due.
Impairment losses on trade receivables are presented as net impairment losses within
operating profit. Subsequent recoveries of amounts previously written off are credited
against the same line item.
been analysed as follows:
For the purposes of the Group’s disclosures regarding credit quality, its financial assets have
Neither
Past Due
nor
individually
impaired
Past due
but not
impaired
individually
impaired
Individually
Total
Impairment
allowance
Total
carrying
amount
Consolidated 30
June 2019
Trade receivable
Consolidated 30
June 2018
Trade receivable
12,448
12,448
$
$
-
-
$
-
-
$
-
-
$
-
-
$
-
-
12,448
12,448
$
$
-
-
$
-
-
$
-
-
12,448
12,448
$
$
-
-
Financial assets past due but not individually impaired
For the purpose of this analysis an asset is considered past due when any payment due under
the contractual terms is received one day past the contractual due date. The majority of these
transactions are carried out on a delivery versus payment basis, which results in securities and
cash being exchanged within a very close timeframe. Settlement balances outside standard
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Impairment of financial assets
The group holds trade receivables that are subject to the expected credit loss model. While
cash and cash equivalents are also subject to the impairment requirements of AASB 9, the
identified impairment loss was immaterial.
Trade receivables
The group applies the AASB 9 simplified approach to measuring the expected credit losses
which uses a lifetime expected loss allowance for all trade receivables. The expected credit
losses have been grouped based on shared credit risk characteristics and the days past due.
The expected loss rates are based on the payment profiles of sales over a period of 36
months before 30 June 2019 or 1 July 2018 respectively and the corresponding historical
credit losses experienced within this period. The historical loss rates are adjusted to reflect
current and forward- looking information on macroeconomic factors affecting the ability of
the customers to settle the receivables.
On that basis, the loss allowance as at 30 June 2019 and 1 July 2018 (on adoption of AASB 9)
was determined to be nil.
Trade receivables are written off when there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, amongst others, the
failure of a debtor to engage in a repayment plan with the group and failure to make
contractual payments for a period of greater than 120 days past due.
Impairment losses on trade receivables are presented as net impairment losses within
operating profit. Subsequent recoveries of amounts previously written off are credited
against the same line item.
For the purposes of the Group’s disclosures regarding credit quality, its financial assets have
been analysed as follows:
Neither
Past Due
nor
individually
impaired
Past due
but not
individually
impaired
Individually
impaired
Total
Impairment
allowance
Total
carrying
amount
Consolidated 30
June 2019
Trade receivable
Consolidated 30
June 2018
Trade receivable
$
12,448
12,448
$
-
-
$
-
-
$
-
-
$
-
-
$
-
-
$
12,448
12,448
$
-
-
$
-
-
$
-
-
$
12,448
12,448
$
-
-
Financial assets past due but not individually impaired
For the purpose of this analysis an asset is considered past due when any payment due under
the contractual terms is received one day past the contractual due date. The majority of these
transactions are carried out on a delivery versus payment basis, which results in securities and
cash being exchanged within a very close timeframe. Settlement balances outside standard
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
47
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
terms are monitored on a daily basis. Credit risk is also mitigated as securities held for the
counterparty by the Group can ultimately be sold should the counterparty default. There were
no renegotiated financial assets during the year.
Collateral pledged or held
There is no collateral held as security by the Group or its controlled entities.
48
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements
Liquidity risk
flows.
Liquidity risk is the risk the Group will not be able to meet its financial obligations as they fall
due. The Group manages liquidity risk by monitoring forecast cash requirements and cash
The primary objective of the Group is to manage short-term liquidity requirements in such a
way as to minimise financial risk. The Group maintains sufficient cash resources to meet its
obligations, cash deposits are repayable on demand.
The tables below present the cash flows receivable and payable by the Group under financial
assets and liabilities by remaining contractual maturities at the reporting date. The amounts
disclosed are the contractual, undiscounted cash flows.
Fixed interest
Non-interest bearing
Weighted
Floating
Within one
1-5 years Within one
1-5
Total
interest rate
year
year
years
30 June 2019
%
$
$
$
average
effective
interest
rate
Within one
year
0.55
3,664,137
3,664,137
-
-
-
-
-
-
0.46
4,838,929
4,838,929
Financial assets
Cash
and
cash
equivalents
Total Financial assets
at 30 June 2019
Financial liabilities
Trade and other
payables
Borrowings
Total
financial
liabilities at 30 June
2019
Financial assets
Cash
and
cash
equivalents
Total Financial assets
at 30 June 2018
Financial liabilities
Trade and other
payables
Borrowings
Total
financial
liabilities at 30 June
2018
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
30 June 2018
%
$
$
$
1,019,622
1,019,622
1,019,622
1,019,622
$
-
-
-
$
-
-
3,664,137
3,664,137
$
-
$
4,838,929
4,838,929
1,501,015
541,638
$
-
-
-
-
-
$
-
-
-
-
-
1,501,015
541,638
2,042,653
2,042,653
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Liquidity risk
Liquidity risk is the risk the Group will not be able to meet its financial obligations as they fall
due. The Group manages liquidity risk by monitoring forecast cash requirements and cash
flows.
The primary objective of the Group is to manage short-term liquidity requirements in such a
way as to minimise financial risk. The Group maintains sufficient cash resources to meet its
obligations, cash deposits are repayable on demand.
The tables below present the cash flows receivable and payable by the Group under financial
assets and liabilities by remaining contractual maturities at the reporting date. The amounts
disclosed are the contractual, undiscounted cash flows.
Fixed interest
Non-interest bearing
Floating
interest rate
Within one
year
1-5 years Within one
year
1-5
years
Total
Within one
year
Weighted
average
effective
interest
rate
30 June 2019
%
$
$
$
Financial assets
Cash
equivalents
and
cash
Total Financial assets
at 30 June 2019
Financial liabilities
Trade and other
payables
Borrowings
Total
financial
liabilities at 30 June
2019
0.55
3,664,137
3,664,137
-
-
-
-
-
-
-
-
-
-
-
-
-
30 June 2018
%
$
$
$
Financial assets
Cash
equivalents
and
cash
Total Financial assets
at 30 June 2018
Financial liabilities
Trade and other
payables
Borrowings
Total
financial
liabilities at 30 June
2018
0.46
4,838,929
4,838,929
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
1,019,622
-
1,019,622
$
-
-
1,501,015
541,638
2,042,653
$
-
-
-
-
-
$
-
-
-
-
-
$
3,664,137
3,664,137
1,019,622
-
1,019,622
$
4,838,929
4,838,929
1,501,015
541,638
2,042,653
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
49
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Trade and other payables and borrowings are expected to be paid as follows:
30 June 2019
Trade and other payables (refer note 11)
30 June 2018
Trade and other payables (refer note 11)
Less than 1
year
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
1,019,622
1,019,622
1,501,015
1,501,015
-
-
-
-
-
-
-
-
-
-
-
-
Market Risk
Market risk is the risk the fair value of future cash flows of financial instruments will fluctuate due
to changes in market variables such as interest rates, foreign exchange rates and equity prices.
(i)
Foreign exchange risk
The consolidated entity undertakes certain transactions denominated in foreign currency and
are exposed to foreign currency risk through foreign exchange fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial
assets and financial liabilities denominated in a currency which is not the entity’s functional
currency. The risk is measured using sensitivity analysis and cash flow forecasting.
The Group’s profitability can be significantly affected by movements in the $US/$A exchange
rates, and to a lesser degree, though movements in the Sri Lankan Rupee verses the Australian
dollar. Through reference to industry standard practices, and open market foreign currency
trading patterns within the past 12 months, the group set the level of acceptable foreign
exchange risk.
The Group seeks to manage this risk by holding foreign currency in $US and Sri Lankan Rupee.
Sensitivity analysis
The following table does not include intra group financial assets and liabilities. It summaries the
sensitivity of the Group’s financial assets and liabilities to external parties at 30 June 2018 to
foreign exchange risk, based on foreign exchange rates as at 30 June 2018 and sensitivity of
+/-10%:
30 June 2019
rate (cents)
0.7010
0.5520
123.72
US$/A$
GBP/A$£
LKR/A$
Notes to the Consolidated Financial Statements
Foreign exchange risk
2019
A$
(22,012)
22,012
2018
A$
(50,138)
50,138
(22,012)
22,012
(50,138)
50,138
Change in profit/loss due to:
Improvement in AUD by 5%
Decline in AUD by 5%
Change in equity due to:
Improvement in AUD by 5%
Decline in AUD by 5%
(ii) Interest rate risk
Group
The Group’s exposure to the risk of changes in market interest rates relates primarily to
the Group’s cash position. A change of 100 basis points in interest rates at the reporting
date would result in a change of profit or loss by the amounts shown below. This analysis
assumes all other factors remain constant.
Profile
At reporting date the interest rate profile of the Group’s financial instruments was:
Floating rate instruments
Cash at bank
Floating rate instruments
Cash at bank
2019
A$
-10bps
Profit
Equity
Profit
Equity
+10bps
Interest rate risk
3,664,137
(3,427)
3,664,137
(3,427)
2018
A$
4,838,929
4,838,929
(2,229)
(2,229)
-
-
-
-
3,427
3,427
2,229
2,229
-
-
-
-
50
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Foreign exchange risk
2019
A$
(22,012)
22,012
2018
A$
(50,138)
50,138
(22,012)
22,012
(50,138)
50,138
Change in profit/loss due to:
Improvement in AUD by 5%
Decline in AUD by 5%
Change in equity due to:
Improvement in AUD by 5%
Decline in AUD by 5%
(ii) Interest rate risk
Group
The Group’s exposure to the risk of changes in market interest rates relates primarily to
the Group’s cash position. A change of 100 basis points in interest rates at the reporting
date would result in a change of profit or loss by the amounts shown below. This analysis
assumes all other factors remain constant.
Profile
At reporting date the interest rate profile of the Group’s financial instruments was:
Floating rate instruments
Cash at bank
Floating rate instruments
Cash at bank
2019
A$
-10bps
Profit
Equity
Profit
Equity
+10bps
Interest rate risk
3,664,137
(3,427)
3,664,137
(3,427)
2018
A$
4,838,929
4,838,929
(2,229)
(2,229)
-
-
-
-
3,427
3,427
2,229
2,229
-
-
-
-
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
51
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
(c)
Net fair values
Fair value versus carrying amount
Fair value of financial instruments
Set out below is a comparison by class of the carrying amounts and fair values of the Group’s
financial instruments which are carried in the financial statements.
Methodologies and assumptions
For financial assets and liabilities which are liquid or have short term maturities it is assumed the
carrying amounts approximate to their fair value.
Note
30 June 2019
30 June 2018
Carrying
amount
A$
Net fair
value
A$
Carrying
amount
A$
Net fair
value
A$
Assets carried at amortised cost
Trade and other receivables
Total financial assets
Liabilities carried at amortised cost
Trade and other payables
Borrowing
Total Financial Liabilities
8
11
182,250
182,580
182,250
182,580
219,429
219,429
219,429
219,429
1,019,622
-
1,019,622
1,019,622
-
1,019,622
1,501,015
541,638
2,042,653
1,501,015
541,638
2,042,653
14. Issued capital
Accounting Policy
Ordinary shares are classified as equity. Transaction costs directly attributable to the issue of
shares or options are recognised as a deduction from equity, net of any related income tax
effects.
(a) Ordinary shares
Issued and fully paid
2019
$
85,068,406
2018
$
79,104,128
2019
Number
445,849,952
2018
Number
403,784,541
Movements in shares on issue
At the beginning of the period
Issue to Kremford under agreement
Exercise of options at $0.092
Exercise of options at $0.15
Placement to investors March 2018
Placement to investors June 2018
Share issue costs
Placement to investors December 2018
Placement to investors April 2019
Shares issued to employees
At the end of the period
79,104,128
-
-
1,335,811
-
-
(348,733)
1,450,000
3,500,000
27,200
85,068,406
73,091,669
170,000
690,000
5,162
3,400,000
1,998,000
(250,703)
-
-
79,104,128
403,784,541
-
-
8,905,407
-
-
-
9,666,670
23,333,334
160,000
445,849,952
364,261,237
2,000,000
7,500,000
34,415
18,888,889
11,100,000
-
-
-
403,784,541
Notes to the Consolidated Financial Statements
Issued capital (continued)
(b)
Share options
Listed share options
Options issued (i)
Options exercised
At the end of the period
2019
Number
2018
Number
3,500,000
91,214,601
(8,905,407)
85,774,779
(34,415)
91,180,186
At the beginning of the period
91,180,186
-
(i) Includes 3,000,000 options issued to Traxys North America LLC as free attaching options on the issue of
shares. These options are the same class as existing FGROC listed options, where as part of the original
agreement in which 3,000,000 options were issued for services provided in the prior year, upon exercise of
these options, an additional 3,000,000 options were to be issued.
2019
Number
2018
Number
500,000
11,000,000
5,000,000
-
-
(7,500,000)
(500,000)
5,000,000
(3,000,000)
500,000
(c)
Share options
Unlisted share options
At the beginning of the period
Options issued
Options exercised
Options expired
At the end of the period
Refer note 15 for further details
15. Share based payments
Accounting Policy
The value of options granted to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the employees become unconditionally
entitled to the options (the vesting period), ending on the date on which the relevant
employees become fully entitled to the option (the vesting date).
At each subsequent reporting date until vesting, the cumulative charge to the statement of
comprehensive income is the product of:
The grant date fair value of the option;
•
•
•
The current best estimate of the number of options that will vest, taking into account
such factors as the likelihood of employee turnover during the vesting period and the
likelihood of non-market performance conditions being met; and
The expired portion of the vesting period.
Until an option has vested, any amounts recorded are contingent and will be adjusted if more
or fewer awards vest than were originally anticipated to do so.
52
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Issued capital (continued)
Share options
(b)
Listed share options
At the beginning of the period
Options issued (i)
Options exercised
At the end of the period
2019
Number
91,180,186
3,500,000
(8,905,407)
85,774,779
2018
Number
-
91,214,601
(34,415)
91,180,186
(i) Includes 3,000,000 options issued to Traxys North America LLC as free attaching options on the issue of
shares. These options are the same class as existing FGROC listed options, where as part of the original
agreement in which 3,000,000 options were issued for services provided in the prior year, upon exercise of
these options, an additional 3,000,000 options were to be issued.
2019
Number
2018
Number
500,000
11,000,000
5,000,000
-
-
(7,500,000)
(500,000)
5,000,000
(3,000,000)
500,000
Share options
(c)
Unlisted share options
At the beginning of the period
Options issued
Options exercised
Options expired
At the end of the period
Refer note 15 for further details
15. Share based payments
Accounting Policy
The value of options granted to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the employees become unconditionally
entitled to the options (the vesting period), ending on the date on which the relevant
employees become fully entitled to the option (the vesting date).
At each subsequent reporting date until vesting, the cumulative charge to the statement of
comprehensive income is the product of:
•
•
•
The grant date fair value of the option;
The current best estimate of the number of options that will vest, taking into account
such factors as the likelihood of employee turnover during the vesting period and the
likelihood of non-market performance conditions being met; and
The expired portion of the vesting period.
Until an option has vested, any amounts recorded are contingent and will be adjusted if more
or fewer awards vest than were originally anticipated to do so.
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
53
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Share based payment expense
The Group recognised total share based payment expenses as follows:
Shares issued to employees
Options issued to Foster Stockbroking
Option issued to employee
Options issued to directors
Options issued to a consultant
Options issued to consultant in accordance with marketing
agreement with Traxys Europe SA
Options issued as part of Kremford agreement
Shares issued as part of Kremford agreement
Total
2019
A$
27,200
305,658
29,118
-
-
2018
A$
-
-
-
544,000
94,679
-
225,000
-
-
361,976
225,000
170,000
1,258,679
Share Option Plan
The Company provides directors, certain employees and advisors with share options. The
options are exercisable at set prices and the vesting and exercisable terms varied to suit each
grant of options.
2019
2018
Number of
Options
19,500,000
8,500,000
-
-
(500,000)
27,500,000
Weighted
average
exercise price
(cents)
14.9
16.8
-
-
15.0
15.5
Number of
Options
11,000,000
19,000,000
(3,000,000)
(7,500,000)
-
19,500,000
Weighted
average
exercise price
(cents)
9.4
15.0
9.2
9.2
-
14.9
Outstanding 1 July
Issued
Forfeited
Exercised
Lapsed
Outstanding 30 June
Share-based payments and options issued.
The table below summarises options granted to directors, employees and consultants:
Grant
Date
Expiry
Date
Exercise
price
Balance
at start of
the year
Granted
during the
year
Exercised
during
the year
Expired/
lapsed during
the year
Balance
at the
end of
the year
Vested
and
exercisable
during the
year
Number
Number
Number
Number
Number
Number
Unlisted options:
11 Jan
2016
11 Jan
2019
11 Jan
2016
11 Jan
2019
26 Feb
2019
26 Feb
2022
54
$0.15
250,000
$0.10
250,000
-
-
$0.18
-
5,000,000
-
-
-
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
(250,000)
(250,000)
-
-
-
-
-
5,000,000
5,000,000
1
250,000 Listed options vest immediately. A further 250,000 Listed options vest on 18 November 2019.
Notes to the Consolidated Financial Statements
Listed options:
31 July
8 Aug
31 Oct
8 Aug
24 Nov
8 Aug
14 May
8 Aug
2017
2021 Various
7,500,000
7,500,000
7,500,000
-
-
-
-
2017
2021 Various
2,000,000
2,000,000
2,000,000
2017
2021 Various
-
17,000,000
-
17,000,000
17,000,000
2019
2021 Various
-
500,000
-
500,000
500,000
-
-
-
-
The weighted average remaining contractual life of the options is 3.07 years (2018: 3.07 years).
Unlisted options were issued to Foster Stockbroking as remuneration on 26 February 2019.
Using the Black and Scholes option pricing model and based on the assumptions set out
below, the Foster Stockbroking Options were ascribed the following value:
Expiry date (length of time from issue)
26 February 2022 – 3.06 years
Total Value of Foster Stockbroking Options
Listed Options were issued to an employee on 18 November 2018.
Using the Black and Scholes option pricing model and based on the assumptions set out
below, the Employee Options were ascribed the following value:
Assumptions:
Number of options issued
Valuation date
Market price of shares
Exercise price
Risk free interest rate
Volatility
Indicative Value of Option
Assumptions:
Number of options issued (i)
Valuation date
Market price of shares
Exercise price
Risk free interest rate
Volatility
Indicative Value of Employee Option
Total Value of Employee Options
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
5,000,000
6 February 2019
$0.14
$0.18
1.67%
75.0%
$0.0611
305,658
500,000
14 May 2019
$0.175
Varying
1.28%
75.0%
$0.0582
29,118
Expiry date (length of time from issue)
8 August 2021 – 2.24 years
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Listed options:
31 July
2017
31 Oct
2017
24 Nov
2017
14 May
2019
8 Aug
2021 Various
8 Aug
2021 Various
8 Aug
-
-
7,500,000
2,000,000
2021 Various
-
17,000,000
8 Aug
2021 Various
-
500,000
-
-
-
-
-
-
7,500,000
7,500,000
2,000,000
2,000,000
-
17,000,000
17,000,000
-
500,000
500,000
The weighted average remaining contractual life of the options is 3.07 years (2018: 3.07 years).
Unlisted options were issued to Foster Stockbroking as remuneration on 26 February 2019.
Using the Black and Scholes option pricing model and based on the assumptions set out
below, the Foster Stockbroking Options were ascribed the following value:
Assumptions:
Number of options issued
Valuation date
Market price of shares
Exercise price
5,000,000
6 February 2019
$0.14
$0.18
Expiry date (length of time from issue)
26 February 2022 – 3.06 years
Risk free interest rate
Volatility
Indicative Value of Option
Total Value of Foster Stockbroking Options
Listed Options were issued to an employee on 18 November 2018.
1.67%
75.0%
$0.0611
305,658
Using the Black and Scholes option pricing model and based on the assumptions set out
below, the Employee Options were ascribed the following value:
Assumptions:
Number of options issued (i)
Valuation date
Market price of shares
Exercise price
500,000
14 May 2019
$0.175
Varying
Expiry date (length of time from issue)
8 August 2021 – 2.24 years
Risk free interest rate
Volatility
Indicative Value of Employee Option
Total Value of Employee Options
1.28%
75.0%
$0.0582
29,118
1
250,000 Listed options vest immediately. A further 250,000 Listed options vest on 18 November 2019.
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
55
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
16. Reserves and accumulated losses
Accounting Policy
The share based payments reserve holds the directly attributable cost of services provided
pursuant to the options issued to corporate advisors, directors, employees and past directors
of the Group.
The translation reserve comprises all foreign currency differences arising from the translation of
the financial statements of foreign operations.
17. Statement of cash flow reconciliation
(a)
Reconciliation of net loss after tax to net cash
flows from operations
Net Loss
Adjusted for:
Depreciation
Amortisation
Impairment of exploration and evaluation asset
Gain on sale of property, plant and equipment
Share based payments expensed
Options expensed
Shares issued as payment for operating expense
Loss on deconsolidation of controlled entity
Finance income recognised as financing activity
Finance cost recognised as financing activity
Foreign exchange gains
Changes in assets/liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventory
(Increase)/decrease in prepayments
(Increase)/decrease in other assets
Decrease in trade and other payables
Net cash (used in) operating activities
2019
A$
2018
A$
(6,986,738)
(7,024,612)
lease term expires.
follows:
471,424
14,744
1,856,109
16,970
27,200
334,776
-
57,513
(87,489)
79,269
(22,127)
37,179
(434,632)
(297,285)
17,040
(411,547)
12,568
217,603
-
(20,814)
863,679
395,000
29,916
-
-
-
79,787
(169,831)
(242,713)
(48,826)
157
632,956
(5,327,594)
(5,275,290)
(b) Non-cash investing and financing activities
There were no non-cash investing and financing activities during the reporting period.
Notes to the Consolidated Financial Statements
18. Commitments
Operating lease commitments – Group as lessee
The Group leases office premises in Nedlands and the Commercial Graphene Facility at
Henderson, WA under normal commercial lease arrangements. The Nedlands office lease was
extended into a period of 1 year expiring on 1 April 2020. The Group is under no legal obligation
to renew the lease once the lease term expires.
The Henderson lease has been renegotiated in the current year for a period of 5 years
beginning 1 June 2018. The Group is under no legal obligation to renew the lease once the
Future minimum rentals payable under non-cancellable operating leases at 30 June are as
Lease expenditure commitments
Operating leases (non-cancellable)
Within one year
Later than one year and not later than five years
Total operating leases (non-cancellable)
The operating leases are entered into for the purposes of leasing company premises.
Finance lease commitments – Group as lessee
The Group had two hire purchase contracts for equipment used at the Henderson Commercial
Graphene Facility. The hire purchases were finalised in June 2019.
-
-
-
-
2019
A$
132,039
259,244
391,283
2019
A$
-
-
-
-
-
-
-
-
2018
A$
98,381
315,920
414,301
2018
A$
43,184
52,709
95,893
(8,567)
87,326
76,369
10,957
87,326
Within one year
Later than one year and not later than five years
Total minimum lease payments
Less amounts representing finance charges
Present value of minimum lease payments
Included in the financial statements as:
Current interest-bearing liabilities
Non-current interest-bearing liabilities
56
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
18. Commitments
Operating lease commitments – Group as lessee
The Group leases office premises in Nedlands and the Commercial Graphene Facility at
Henderson, WA under normal commercial lease arrangements. The Nedlands office lease was
extended into a period of 1 year expiring on 1 April 2020. The Group is under no legal obligation
to renew the lease once the lease term expires.
The Henderson lease has been renegotiated in the current year for a period of 5 years
beginning 1 June 2018. The Group is under no legal obligation to renew the lease once the
lease term expires.
Future minimum rentals payable under non-cancellable operating leases at 30 June are as
follows:
Lease expenditure commitments
Operating leases (non-cancellable)
-
-
Within one year
Later than one year and not later than five years
Total operating leases (non-cancellable)
2019
A$
132,039
259,244
391,283
2018
A$
98,381
315,920
414,301
The operating leases are entered into for the purposes of leasing company premises.
Finance lease commitments – Group as lessee
The Group had two hire purchase contracts for equipment used at the Henderson Commercial
Graphene Facility. The hire purchases were finalised in June 2019.
-
-
Within one year
Later than one year and not later than five years
Total minimum lease payments
Less amounts representing finance charges
Present value of minimum lease payments
Included in the financial statements as:
Current interest-bearing liabilities
Non-current interest-bearing liabilities
2019
A$
-
-
-
-
-
-
-
-
2018
A$
43,184
52,709
95,893
(8,567)
87,326
76,369
10,957
87,326
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
57
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
19. Deconsolidation of Graphene Solutions Pty Ltd
As of 21 January 2019, the loss of effective control of Graphene Solutions Pty Ltd (“GSPL”)
was recognised by the Group due to the Company having no power to govern the
financial and operating policies of GSPL. Accordingly, the Company’s investment was
reclassified to an investment accounted for using the equity method effective from 21
January 2019.
Key estimates and assumptions
LOSS OF CONTROL OF GSPL
In May 2018, the Company earned a 30% equity interest in Graphene Solutions Pty Ltd
(GSPL), with an option to increase the shareholding to 70%, resulting in FGR having control
and GSPL being consolidated into the FGR group. Management have deemed the date
of loss of control over the financial and operating policies under AASB 10 of GSPL to be
the 21st January 2019. The option to earn the additional 40% interest in GSPL has also now
expired.
Details of net assets deconsolidated on loss of control:
Fair value of GSPL’s net assets/(liabilities)
Cash and cash equivalents
Trade and other receivables
GSPL net assets
Loss on deconsolidation of subsidiary:
Fair value of equity held in GSPL at 21 January 2019
Less 30% equity interest held in GSPL
Non-controlling interest
Loss recognised on deconsolidation of subsidiary to owners of
parent entity
21 January 2019
A$
191,659
51
191,710
-
(191,710)
134,197
(57,513)
Cashflow impact of deconsolidation
GSPL had a cash balance of $191,569 as at 21 January 2019. As a result of the
deconsolidation of GSPL, the Company derecognised cash of $191,569 in cash and cash
equivalents in the Consolidated Statement of Financial Position which represents the
movement during the period. This impact is shown as an outflow of cash in Consolidated
Cash Flow Statement under the category Cash Flows from Investing Activities.
58
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
Deconsolidation of Graphene Solutions Pty Ltd (continued)
Reclassification of investment
The Company’s 30% equity interest in GSPL was reclassified to an investment in associate
as at 21 January 2019, however the fair value of the investment was deemed to be nil
on deconsolidation, therefore the carrying value of the investment in associate at 30
June 2019 is nil.
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
59
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
20. Results of the parent company
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventory
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intercompany loans receivable
Investment in subsidiaries
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Share based payments reserve
Other reserves
Accumulated losses
Total equity
Results of the parent entity:
Loss for the period
2019
A$
2018
A$
3,498,503
4,591,961
147,486
958,841
377,841
181,418
571,008
54,011
4,982,671
5,398,398
1,532,890
216,744
250,000
1,999,634
6,982,305
1,093,126
598,638
950,000
2,641,764
8,040,162
898,511
898,511
1,724,704
1,724,704
898,511
1,724,704
6,083,794
6,315,458
85,075,437
4,703,404
467,202
79,104,128
4,368,268
467,202
(84,162,249)
(77,624,500)
6,083,794
6,315,458
(6,537,749)
(6,537,749)
(4,849,772)
(4,849,772)
Notes to the Consolidated Financial Statements
21. Events since the end of the financial year
In the period from the year end until 30 August 2019 $2.4 million was received form the exercise
of options. There are no other known subsequent events of a material nature.
22. Related party transactions
Compensation for key management personnel
The key management personnel compensation included in employee benefits expense (note
3) and share-based payments (note 15), is as follows:
Short term employee benefits
Share based payments
2019
A$
1,412,073
-
1,412,073
2018
A$
1,508,023
544,000
2,052,023
Transactions with other related parties
During the reporting period, placement fees were paid to Far East Capital Limited, a company
of which Mr Grigor is a Director, for equity raisings during fiscal 2019 totalling $197,868 (2018:
207,912). There were no other payments to related parties.
There were no loans to/from related parties in 2019 (2018: Nil)
Subsidiaries
The consolidated financial statements include the financial statements of First Graphene
Limited and the subsidiaries listed in the following table:
First Graphene (UK) Ltd
Graphene R&D
Principal activity in
Proportion of voting
Class of
Place of
the year
rights and shares held
shares held
Incorporation
2019
100%
2018
100%
Ordinary
England &
Wales
MRL Investments (Pvt) Ltd
Holding company
100%
100%
Ordinary
Sri Lanka
MRL Graphene (Pvt) Ltd
100%
100%
Ordinary
Sri Lanka
2D Fluidics Pty Ltd (1)
50%
50%
Ordinary
Australia
Graphene Solutions Pty
Development of
Ltd (2)
BESTTM Battery
-
30%
Ordinary
Australia
(1) 2D Fluidics Pty Ltd has been fully consolidated in the Group due to the effective control exercised by First
Graphene Limited.
(2) Graphene Solutions Pty Ltd had been fully consolidated in the Group due to the effective control exercised by
First Graphene Limited. Control was deemed to have been lost effective 21 January 2019 and the entity has
been de-consolidated in the 2019 financial statements. Refer to note 19 for significant estimates and judgments.
Graphene Mining
and exploration
Development and
sale of VFD and
other 2D materials
60
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
21. Events since the end of the financial year
In the period from the year end until 30 August 2019 $2.4 million was received form the exercise
of options. There are no other known subsequent events of a material nature.
22. Related party transactions
Compensation for key management personnel
The key management personnel compensation included in employee benefits expense (note
3) and share-based payments (note 15), is as follows:
Short term employee benefits
Share based payments
2019
A$
1,412,073
-
1,412,073
2018
A$
1,508,023
544,000
2,052,023
Transactions with other related parties
During the reporting period, placement fees were paid to Far East Capital Limited, a company
of which Mr Grigor is a Director, for equity raisings during fiscal 2019 totalling $197,868 (2018:
207,912). There were no other payments to related parties.
There were no loans to/from related parties in 2019 (2018: Nil)
Subsidiaries
The consolidated financial statements include the financial statements of First Graphene
Limited and the subsidiaries listed in the following table:
Principal activity in
the year
Proportion of voting
rights and shares held
2018
2019
Class of
shares held
Place of
Incorporation
First Graphene (UK) Ltd
Graphene R&D
100%
100%
Ordinary
England &
Wales
MRL Investments (Pvt) Ltd
Holding company
100%
100%
Ordinary
Sri Lanka
MRL Graphene (Pvt) Ltd
2D Fluidics Pty Ltd (1)
Graphene Mining
and exploration
Development and
sale of VFD and
other 2D materials
Graphene Solutions Pty
Ltd (2)
Development of
BESTTM Battery
100%
100%
Ordinary
Sri Lanka
50%
50%
Ordinary
Australia
-
30%
Ordinary
Australia
(1) 2D Fluidics Pty Ltd has been fully consolidated in the Group due to the effective control exercised by First
Graphene Limited.
(2) Graphene Solutions Pty Ltd had been fully consolidated in the Group due to the effective control exercised by
First Graphene Limited. Control was deemed to have been lost effective 21 January 2019 and the entity has
been de-consolidated in the 2019 financial statements. Refer to note 19 for significant estimates and judgments.
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
61
FIRST GRAPHENE ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
23. Auditors’ remuneration
Services provided by the Group’s auditor (in tenure as auditor) and associated firms
During the year, the Group (including its overseas subsidiaries) obtained the following services
from BDO Audit (W.A.) Pty Ltd as detailed below:
Auditors’ remuneration
Remuneration of the auditor of the Group for:
-
-
Audit services – BDO Audit (WA) Pty Ltd
Taxation services – BDO Corporate Tax (WA) Pty Ltd
2019
A$
36,253
27,038
63,291
2018
A$
37,000
23,829
60,829
62
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
FIRST GRAPHENE ANNUAL REPORT 2019
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
Directors’ Declaration
The Directors declare:
1.
the financial statements and notes, as set out on pages 24 to 62 are in accordance with
the Corporations Act 2001 and:
a.
b.
comply with Accounting Standards and the Corporations Regulations 2001 and
other mandatory professional reporting requirements; and
give a true and fair view of the financial position as at 30 June 2019 and of the
performance for the year ended on this date of the consolidated group;
2.
the Chief Executive Officer and Chief Finance Officer have each declared:
a.
b.
c.
the financial records of the consolidated group for the financial year have been
properly maintained in accordance with section 286 of the Corporations Act 2001;
the financial statements, and the notes for the financial year comply with the
accounting standards; and
the financial statements and notes for the financial year give a true and fair view;
and
3.
4.
5.
in the directors’ opinion, there are reasonable grounds to believe the consolidated
group will be able to pay its debts as and when they become due and payable.
the consolidated group has included in the notes to the financial statements an explicit
and unreserved statement of compliance with the International Financial Reporting
Standards
the remuneration disclosures set out in the Directors’ Report on pages 16 to 21 (as the
audited Remuneration Report) comply with section 300A of the Corporations Act 2001;
Signed in accordance with a resolution of the directors made pursuant to section 295 (5) of
the Corporations Act 2001. On behalf of the Directors
Craig McGuckin
Managing Director
30 August 2019
FIRST GRAPHENE LIMITED ANNUAL REPORT 2019
63
FIRST GRAPHENE ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S REPORT
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of First Graphene Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of First Graphene Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2019, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
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.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
64
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
FIRST GRAPHENE ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
Deconsolidation of subsidiary Graphene Solutions Pty Ltd (‘GSL’)
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 19 to the financial report,
the Group deconsolidated subsidiary GSL on 21
January 2019 as the Group was deemed to have
lost control of GSL on that date, and the
investment in GSL was subsequently reclassified
as an investment in associate as disclosed in Note
19 of the financial report.
This is a key audit matter due to the complexity
of accounting for the loss of control of a
subsidiary as disclosed in Notes 19 in the
financial report.
Our audit procedures included, but were not
limited to:
•
•
•
•
•
Evaluating management’s determination
of the deemed loss of control of GSL and
subsequent reclassification of GSL as an
investment in associate;
Agreeing the completeness and accuracy
of the GSL assets and liabilities
deconsolidated at 21 January 2019 to
supporting documentation;
Evaluating management’s assessment of
the fair value of the investment at the
date of deconsolidation;
Re-performing the calculation of the loss
on deconsolidation of GSPL; and
Assessing the adequacy of the related
disclosures in Note 19 to the financial
statements.
Other information
The directors are responsible for the other information. The other information comprises the
information contained in the Financial Report for the year ended 30 June 2019, but does not include
the financial report and our auditor’s report thereon, which we obtained prior to the date of this
auditor’s report, and the Annual Report to Shareholders, which is expected to be made available to us
after that date.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above 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 on the other information that we obtained prior to the date
of this auditor’s report, 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.
When we read the Annual Report to Shareholders, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to the directors and will request that it is
corrected. If it is not corrected, we will seek to have the matter appropriately brought to the
attention of users for whom our report is prepared
65
FIRST GRAPHENE ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S REPORT
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 16 to 21 of the directors’ report for the
year ended 30 June 2019.
In our opinion, the Remuneration Report of First Graphene Limited, for the year ended 30 June 2019,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 30 August 2019
66
FIRST GRAPHENE ANNUAL REPORT 2019
ADDITIONAL SECURITIES EXCHANGE INFORMATION
ADDITIONAL SECURITIES EXCHANGE
INFORMATION
(Note this information does not form part of the audited financial statements)
Additional information required by the Australian Securities Exchange Limited and not shown
elsewhere in this report is as follows. This information is complete as at 26 August 2019.
a)
Distribution of Shareholdings – Fully Paid Ordinary Shares:
Size of Holding
Number of Share Holders
Number of Share
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
125
1,042
865
2,063
502
4,597
23,603
3,637,261
6,902,485
77,081,934
387,065,236
474,710,519
Equity Security
Quoted
Unquoted
Fully Paid ordinary shares
Options
474,710,519
56,914,212
-
5,000,000
67
FIRST GRAPHENE ANNUAL REPORT 2019
ADDITIONAL SECURITIES EXCHANGE INFORMATION
ADDITIONAL SECURITIES EXCHANGE
INFORMATION (CONTINUED)
b)
Top 20 Security Holders – Fully Paid Ordinary Shares (FGR) at 26 August 2019
Name of Holder
Number of
Shares
%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
J P Morgan Nominees Australia Pty Limited
Twynam Investments Pty Ltd
Building On The Rock Limited
IPS Nominees Limited
Citicorp Nominees Pty Limited
Gregorach Pty Ltd
National Nominees Limited
Debt Management Asia Corporation
Mr Craig Robert McGuckin & Mrs Lee Ann McGuckin
Ginga Pty Ltd
Hallidaf Management Ltd
BNP Paribas Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited
William Taylor Nominees Pty Ltd
Sunset Capital Management Pty Ltd
UBS Nominees Pty Ltd
BissApp Software Pty Ltd
Ms Fadillah Burhan Hasibuan
Mr Ryan Jehan Rockwood
20
Mrs Gayle Teresa Crabbe
Total
Total issued capital
54,696,583
24,013,177
16,666,667
16,609,865
14,986,598
14,905,946
11,371,495
8,458,078
7,158,513
7,140,776
6,094,794
11.52
5.06
3.51
3.50
3.16
3.14
2.40
1.78
1.51
1.50
1.28
4,436,088
0.93
4,358,963
4,059,962
0.92
0.86
4,000,000
0.84
3,657,277
3,495,505
3,089,230
3,000,000
2,951,000
0.77
0.74
0.65
0.63
0.62
215,150,517
45.32
474,710,519
100.00
Shareholders with less than a marketable parcel
At 26 August 2019, there were 275 shareholders holding less than a marketable parcel of shares
($0.23 cents on this date) in the Company totalling 311,828 ordinary shares. This represented
0.07% of the issued capital.
68
FIRST GRAPHENE ANNUAL REPORT 2019
ADDITIONAL SECURITIES EXCHANGE INFORMATION
ADDITIONAL SECURITIES EXCHANGE
INFORMATION (CONTINUED)
c)
Top 20 Security Holders – Options (FGROC) at 26 August 2019
Name of Holder
Number of
Shares
%
Mrs Gayle Teresa Crabbe
6,531,388
11.48
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Gregorach Pty Ltd
Ms Fadillah Burhan Hasibuan
IPS Nominees Limited
Pavarai Pty Ltd
Gregorach Pty Ltd
Mr Alan Wesley Patterson-Kane
Bolam Materials Research Ltd
Mr Christopher James Bellew
Geo Ban Consulting Pty Ltd
Mr Gregory John Keir
Mrs Terri Frances Youd
SDG Nominees Pty Ltd
Dr Andrea Mary Louis & Dr Ronald Lee Louis
Ginga Pty Ltd
Mr Shaun Phillip Van Dyk
J P Morgan Nominees Australia Pty Limited
Celtic Capital Pte Ltd
Cambourne Capital Pty Limited
20
Mr Adam Leslie Griggs
Total
Total issued capital
5,137,500
2,850,979
2,097,683
1,893,750
1,863,244
1,710,000
1,550,000
1,528,168
1,459,091
1,400,000
1,085,343
1,000,000
711,175
678,477
667,162
623,509
600,000
563,669
532,463
9.03
5.01
3.69
3.33
3.27
3.00
2.72
2.69
2.56
2.46
1.91
1.76
1.25
1.19
1.17
1.10
1.05
0.99
0.94
34,483,601
60.59
56,914,212
100.00
69
70
71
Suite 3
9 Hampden Road
Nedlands WA 6009
P: +61 1300 660 448
E: info@firstgraphene.net
www.firstgraphene.net
72
First Graphene (UK) Limited
Graphene Engineering and
Innovation Centre
The University of Manchester
Sackville Street
Manchester
M13 9PL
United Kingdom