ANNUAL
REPORT
2021
FIRSTGRAPHENE.NET
2
HIGHLIGHTS
OPPORTUNITY
GROWTH STRATEGY
With global demand for graphene
promising to develop an
extraordinary growth curve, now is
the time to be involved with a well-
managed and credentialed company
that has a clear commercial focus to
gain greater market share.
The appetite for graphene among
many of the world’s most important
markets continues to grow, while
we apply a strategic focus to
commercialise the business and
ramp up our global sales initiatives,
the opportunities for graphene are
seemingly limitless.
QUALITY AND
PRODUCT DIVERSITY
Our focus is on unparalleled
quality assurance, customer
satisfaction and quality products
independently verified. We are
strategically positioned with a first
mover advantage having already
commercialised graphene into a
diverse range of products relevant
to many segments and applications
including cement, composites and
rubbers among others.
CAPACITY
Our purpose built, large-scale production facility,
has the capability to respond to growing demands
and sales orders quickly and efficiently. We are the
largest producer of commercial grade graphene –
PureGRAPH® is a commercial grade, high volume and
high quality/repeatable specifications adaptable to
many products and industries.
GLOBAL ESG STORY
Our graphene products make industries
and clients significantly more eco-friendly.
Graphene offers major benefits to all parts
of everyday society and segments – from
across the mining supply chain, to cement,
composites and modern technological
devices, renewables and energy storage.
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE FGR ANNUAL R EPO RT FY202 1
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CONTENTS
Chairman’s Report ...................................................... 4
CEO Report ..................................................................
Strategy Report ...........................................................
Operations/QHSE Report ............................................
R&D Technology Report ..............................................
CFO Report ...................................................................
6
10
13
14
18
Sustainability Report .................................................... 20
Annual Financial Report .............................................. 22
Corporate Directory ...................................................... 83
ASX:FGR l
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CHAIRMAN’S REPORT
Every start-up company needs to go through a procession of changes as it
goes from concept to production and along to commerciality. First Graphene
is at the point where an influx of new blood and vision needs to take over,
and it has. The new team is now charged with establishing commerciality of
the business on a solid footing. It needs a different set of eyes and vision and
it involves different skill sets. Different strategies and tactics are required.
The year to 30 June 2021 will be remembered as
been with the Company since 2012. They comprised
the year of the pandemic by the entire world. It has
the key management team for approximately 10
been the most significant global event that any of
years, initially as a mineral exploration company and
us alive today have experienced and we are not out
for the last five years as a graphene visionary.
of the woods yet. Everyone and every company has
been affected to a lesser or greater extent, and I
suppose every chairman’s address will mention it as
a matter of procedure.
When First Graphene started out on the graphene
journey there was no road map to follow. It was
almost a case of the blind leading the blind. All we
knew was how wonderful graphene was supposed
The biggest impacts on First Graphene have
to be and what a great future awaited those
been twofold. Firstly, a number of our prospective
who were willing to embrace this wonderful 2D
customers were significantly slower in moving to
nanomaterial. It was a very steep learning curve.
incorporate PureGRAPH® into the products due to
lockdowns that restricted the availability of workers
and inhibited regular production schedules. A
level of heightened caution worked against any
suggestion of accelerated innovation. Thus, we
were not able to deliver the sales growth we had
earlier anticipated. Secondly, there were many
months during which our research and product
development programs were interrupted by
First Graphene quickly realised that a major
obstacle to the advancement of the segment was
the availability of a reliable supply of graphene
of consistent quality, irrespective of price. No
manufacturing company would look to introduce
graphene to their product lines if they could not see
clear supply lines to make the change worthwhile.
Many companies that experimented with graphene
expressed frustration owing to the mixed results
shutdowns of the University of Manchester, where
they achieved in test work, attributable to the lack of
we have operations in the Graphene Engineering
consistency from one batch to the next.
Innovation Centre (GEIC).
Covid aside, 2021 was a year that involved a
by taking a bench-scale graphene production
changing of the guard at First Graphene. We saw
methodology, pioneered by the University of
the retirement of both the CEO and CFO, who had
Adelaide, and scaling it up firstly to a pilot plant size,
First Graphene set about addressing these concerns
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE 5
and then to a full commercial-scale manufacturing
stronger sales growth, through increased market
facility of Henderson, south of Fremantle in WA.
share, when producing superior products.
In getting to this position, the Company had to
grapple with another chicken and egg conundrum.
Nothing could happen without a production facility,
but no-one was going to buy the product and make
changes to their production lines if they could not
see tangible evidence that there was a real and
reliable supply.
Every start-up company needs to go through a
procession of changes as it goes from concept to
production and along to commerciality. Just as
with a mineral exploration company, that is staffed
by geologists who have to stand aside to enable
the engineers to do their job, First Graphene is at
the point where an influx of new blood and vision
The fact that the Henderson facility has been
needs to take over, and it has. The recently retired
constructed and successfully commissioned,
team was instrumental in delivering production
and continuously optimised, is a credit to both
capability. The new team is now charged with
Craig McGuckin and Peter Youd. Their vision and
establishing commerciality of the business on a
commitment has placed the Company in the
solid footing. It needs a different set of eyes and
perfect position at this juncture, but it is still only
vision and it involves different skill sets. Different
first base. First Graphene is still just an embryonic
strategies and tactics are required.
company staring at a very steep growth curve
ahead, particularly when it comes to selling the
product.
We are confident that the changes instituted
this year have placed First Graphene in the best
possible position to maximise the graphene
As they say, Rome wasn’t built in a day. The
opportunity before us.
Warwick Grigor
Chairman
pioneering of new technology, taking it from the
point of invention to commercial, profitable scale
involves many steps and requires many different
skills to meet the ever-evolving challenges along the
way. Having shown that we can make graphene,
your Company has recognised that the next major
challenge is to sell volume to the target markets. It is
not just a matter of putting our For Sale sign on the
door because there is no established market already
operating that we can simply enter with a promise
of better product than what industry is already
buying. We have to play a leading role in developing
the market by interfacing with industry to show
how much better their products will be with the
incorporation of graphene. At the same time, we
have to show how individual companies will achieve
FGR ANNUAL REPORT FY2021ASX:FGR l 6
CEO REPORT
Clear, aligned commercial focus
Since commencing as CEO with
technology for large-scale industrial applications.
First Graphene Limited, I have been
I am pleased to say that since the beginning of the
charged with shifting and building
the Company’s commercial focus.
year, we have made significant inroads to achieving
those goals.
Prior to my appointment, the priority was to ramp
with the appointment of non-executive director
up production to ensure First Graphene was
Michael Quinert. Mr Quinert brings additional value
manufacturing to a commercial scale.
to the Board with his significant legal and ASX
That includes building capability at Board level
That goal was achieved with robust and repeatable
governance expertise.
production processes, reaching a current capability to
Changes at the executive level have also provided
manufacture up to 100 tonnes of product per annum.
an opportunity to restructure the team, building
The focus now is on building strong, sustainable
markets, leveraging First Graphene’s first
mover advantage, and world-class research and
development, to establish the Company as the
both technical and commercial capabilities in
select verticals. That includes the appointment
of commercial managers across our key market
segments.
world’s leading provider of commercial scale
The appointments put the Company in a strong
graphene solutions. In addition, our aim is to
position to capitalise on the opportunities of
become a global leader in graphitic materials
bringing new materials and technologies to market.
Strategic growth
First Graphene is introducing a new material to global markets, necessitating
the development of clear growth strategies.
The Company’s aggressive commercial focus started by identifying target material segments that meet one
or more of the following criteria:
» Face ongoing challenges or limitations such as rapid wear/degradation, poor strength to weight ratio,
excessive carbon utilisation in manufacturing, utilisation or disposal
» Likely to see compelling benefits from the incorporation of graphene
» New or emerging technologies that stand to benefit from the inclusion of graphene and graphitic materials
» Represent significant market opportunities due to volume and global reach
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE Based on this, five key verticals have been identified including:
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Composites and plastics
Coatings and inks
Cement and concrete
Rubbers and elastomers
Energy storage
For each of these verticals, First Graphene is
The Company intends to continue developing
developing go-to-market strategies that include
PureGRAPH® formulations, both internally and
identifying options at every stage of the value
with third-party formulators, suited to specific
chain. Rather than simply providing graphene
applications so that downstream manufacturers can
to manufacturers, the Company’s intention is to
easily incorporate graphene, at the correct dosage
develop graphene product solutions and move
rates and platelet sizes, into existing or minimally
towards becoming a materials technology company
modified production lines.
focused on a broader range of graphitic materials.
We will continue to identify strategic partners and
To date, First Graphene has expanded its product
clients committed to commercialising graphene-
lines from the original PureGRAPH® powdered
enhanced products. The Company will also continue
formats to include PureGRAPH® AQUA hydra-
providing comprehensive testing and validation
gels and customisable PureGRAPH® Masterbatch
services to ensure the right formulations are available
solutions for use in rubbers and plastics.
to make adoption of graphene an easy choice.
Improving financial position
A primary focus of the Board and
executive team has been to carefully
manage the cash burn rate and
align expenditure closely to First
Graphene’s commercial position.
That includes revising remuneration structures,
reducing third-party costs and ensuring R&D spend
is directly related to key revenue opportunities.
With clear commercial objectives defined, staff
remuneration packages are being restructured to
include success-based incentives and stock options.
This not only preserves cash, but ensures employee
buy-in to help drive the Company’s success.
Third-party costs have been scrutinised and reduced
wherever possible, including renegotiating several
contract arrangements.
We have reviewed and reset our investment in R&D,
identifying those areas with clear paths to revenue
and aligning R&D costs and activities directly to
market value propositions.
FGR ANNUAL REPORT FY2021ASX:FGR l 8
Operations maintain pursuit of excellence
It is well documented that First
Graphene has created a world-class
manufacturing facility in Western
Australia, combining technologies
and proprietary processes to provide
The Company received a grant earlier this year to
expand manufacturing capacity and this will only be
actioned as and when demand dictates.
Initially, the focus will be to secure recurring
demand for our existing product lines before we
create additional capacity. The technology is such
us with capacity and quality that
that it can be scaled up simply and quickly as
is unrivalled globally. Our focus
required.
on process excellence and quality
We continue expanding product lines to ensure First
control allows us to maintain our
market advantage.
Graphene can provide market-ready formulations of
PureGRAPH® targeted to applications in the chosen
market segments.
Outlook
The Company has spent the past
six months recruiting a commercial
team focused on taking graphene
cement our position as the global market maker,
identifying large scale commercial opportunities
and working with industry to prove the efficacy and
efficiency of graphene and the PureGRAPH® range
products to global markets.
of products.
Pleasingly, we have completed the majority of our
recruitment process and have secured industry
experts with many years of experience, extensive
networks and the technical expertise to help target
large commercial opportunities.
We continue to develop and refine our go-to-market
strategies and action them across the verticals in
which commercial managers have been appointed.
It is important to note that as one of the world’s
While some companies are still investing
significantly in proof-of-concept ideas, First
Graphene is working actively with industry on
commercially viable applications.
That includes further developments in verticals
that have already seen commercial launches take
place, such as composites and elastomers. We
are developing liquid ad mixtures, thermally and
electrically conductive coatings, solar heating
components and applications to improve the
only producers of high-quality, commercially viable
mechanical properties of concrete.
graphene, First Graphene is in an enviable position.
Most markets are yet to fully comprehend the benefits
term opportunities in high-tech applications including
of graphene and the almost endless array of applications
the electric vehicle and energy storage markets.
We will also continue our focus on developing longer
for which it can be used, meaning widespread
understanding and adoption is still in its infancy.
First Graphene is well down the path with a
versatile range of sales opportunities and expects
However, as one of the very few graphene producers
to announce some exciting projects during
with products available at scale, regulatory approval
the coming 12 months, foreshadowing what is
and having proven the benefits of the material in
undoubtedly set to be the most significant revenue
multiple applications, First Graphene continues to
growth period in the Company’s history.
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE 9
COVID-19
The challenges thrown up by the
COVID-19 pandemic have necessitated
adaptations to the way we work, but
Nevertheless, in WA as in other parts of the world,
First Graphene has adapted to new ways of
working and remains vigilant to ensure the health
and wellbeing of our staff and customers remains
also bring some beneficial side effects.
our highest priority.
The COVID-19 pandemic created considerable
challenges in running a globally focused company
with distributed workforces and operations.
A beneficial side effect of mandatory remote
working is that the way of doing business has
evolved and this facilitates easier engagement
with clients and prospects across the globe.
Fortunately, for the production side of the
We will continue to adapt as and when necessary,
business, Western Australia has remained largely
ensuring the safety of all involved but maintaining
shielded from the sorts of outbreaks that have
our focus on the ongoing growth and success of
impacted other part of Australia and the world.
First Graphene.
“The Board and management thank
you for your ongoing support.
We look forward to sharing more
of our growth story with you.”
Michael Bell
Managing Director and CEO
FGR ANNUAL REPORT FY2021ASX:FGR l 10
STRATEGY REPORT
Part of First Graphene’s revised strategy is to shift the Company’s mindset of
being a graphene powder producer to focus on becoming a global materials
technology company with graphene/graphitic products being our differentiator.
There are several components to the revised strategy, some building on existing
areas of focus and others aimed at targeting new and sizeable return on
investment opportunities.
Strategic growth
First Graphene will continue to
support our early adopter
clients to help them achieve initial
commitments.
even and helping promote the benefits of graphene
to a broad range of industry segments. In time, this
will help to reset the norm for other manufacturers
and open the door to much larger opportunities.
The fourth quarter of FY2021 was the Company’s
This support and the resulting products are
most significant quarter in its history for graphene
essential to the Company’s success, providing a
sales revenue and it is exciting to see this trend
significant contribution on our journey to break-
extend into Q1 of the new financial year.
Revenue generation focus
While First Graphene’s early adopter
continue to deliver laboratory-scale testing, First
clients have helped the Company
to prove the science of graphene at
commercial scale, other segments are
Graphene’s go-to-market strategies are focused
on working with industry to provide large-scale,
real-world, readily repeatable proof of the efficacy
and efficiency of incorporating PureGRAPH® into
yet to understand and embrace
products.
the benefits.
While numerous laboratory proofs of concept
segments are all aligned to identified opportunities
have been reported over the past decade across a
that provide the best and most sustainable paths to
broad range of applications, and many companies
significant revenue.
The Company’s strategies across target materials
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
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Go-to-market strategies
In the cement and concrete segments, First
a product line with third party developers and
Graphene has made significant progress towards
formulators, via which opportunities exist to engage
the development of PureGRAPH® enhanced
with the largest available market share.
liquid admixtures. In addition, we are developing
liquid grinding aids to disperse into cements. The
Company is working with global admixture and
additive formulators, cement manufacturers and
concrete manufacturers which have been identified
as the best targets to reach significant market share.
In the rubbers and elastomers segment, the
primary focus is to identify strategic partners
with critical known problems, and to utilise their
motivations and resources to develop solutions that
can then be pivoted to similar clients and products.
The mining segment, which utilises a broad range of
Likewise, in the marine and renewables segment
consumable rubber and elastomer products, is a key
of the composites and plastics verticals, the key
target. Part of the overall strategy is to help current
targets include composite materials manufacturers,
early adopters to better access global markets.
non-infusion boat builders, marine and water sports
equipment manufacturers and other supporting
industry suppliers. Considerable progress has been
made in proving the concepts to some parts of the
industry including the work completed with Ascent
Shipwrights and a range of current projects that are
in advanced stages. The Company is also working to
develop innovative coatings for wind turbine blades.
In the energy storage segment, research-based
work continues, however First Graphene aims to
identify key industry partners to help fast-track
commercialisation of new technologies. Recent
examples include the hydrodynamic cavitation
process to convert petroleum feedstocks to
graphene and graphite products, used in battery
anodes, as well as clean hydrogen to provide a
Much of the go-to-market strategy in this space will
renewable energy source. The process provides
extend to other composites and plastics segments,
petroleum producers with a means to pivot to
again where large-scale commercial opportunities
renewable energy markets by turning petroleum
are available and where current early adopter
feedstocks into graphite battery anodes. The market
projects can be leveraged. These verticals represent
size for the lithium-ion battery anode market is
extensive opportunities for large contracts.
estimated at US$8.4 billion and projected to reach
A new Commercial Manager has been appointed
to focus on coatings and inks, bringing significant
international industry experience that will be
leveraged to advance current projects and identify
US$21 billion by 2026, growing at a CAGR of 19.9 per
cent. The Company is working to engage fossil fuel
producers as partners to take the technology to
market.
strategic opportunities. For the coatings and inks
Similarly, First Graphene’s focus for its advanced
verticals particularly, First Graphene has identified
research work in supercapacitor materials and
opportunities to provide downstream solutions
hydrogen fuel cell materials is now transitioning to
that leverage the strengths of PureGRAPH®,
identifying industry partners to develop commercial-
such as thermal and electrical conductivity, fire
scale pilots. The Company is also exploring options to
retardancy, corrosion protection, EMI shielding and
licence the technology or sell PureGRAPH® products
low permeability. One likely focus will be building
to fuel cell materials manufacturers.
FGR ANNUAL REPORT FY2021ASX:FGR l 12
Broadening product range
The Company has made significant
development. First Graphene intends to continue
progress in broadening its product
range to enable easier dispersion
in clients’ applications, leading to a
faster path to success.
working with industry partners at all stages in
the value chain to expand the range. Some of the
other current development targets include cement
grinding aids, composite liquid admixtures for
polyester, vinylester and epoxy systems, liquid base
formulations for anti-corrosion, thermal conductivity,
The PureGRAPH® range now consists of powders,
electrical conductivity and fire retardancy, and
aqueous options and masterbatch products, with
broadening the masterbatch range to cover plastics,
a range of liquid admixtures in advanced stages of
rubbers and other materials.
Downstream focus
Where it makes sense, First
Graphene is pursuing opportunities
to expand overall reach up and down
the value chain.
This includes developing, manufacturing and
marketing certain end products, as described
above in the coatings and inks space, thus allowing
the company to own greater market share and
accelerate the path to breakeven and profitability.
Michael Bell
Managing Director and CEO
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
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OPERATIONS /
QHSE REPORT
Maintaining operational success
Health and Safety
Workplace health and safety is
paramount in everything we do at
First Graphene.
The Company engaged a consultant to conduct
a comprehensive risk assessment, adopted the
recommendations provided and continued to see
exceptional safety performance.
Over the past financial year, the Company has
continued to refine health and safety systems as
art of a continual improvement process at the
Henderson manufacturing plant.
That included zero Lost Time Incidents, zero Medical
Treatment Incidents and zero Environmental
Incidents reported.
Manufacturing
First Graphene introduced two
new PureGRAPH® products to
the market this financial year,
namely PureGRAPH® 50 and the
PureGRAPH® AQUA range.
The release of PureGRAPH® 50 has resulted in
considerable interest from industry, in particular for
enhancing the mechanical strength of concrete.
PureGRAPH® AQUA products are hydrogels that
have graphene platelets pre-dispersed in water for
ease of mixing into water and polar solvent-based
formulations. Numerous potential opportunities are
currently being explored with PureGRAPH® AQUA
in various industries.
in the production plant, the Company promoted
an internal resource to the role of Quality Manager,
responsible for ensuring the ongoing integrity of our
expanding product range.
At the end of 2020, we upgraded our power
transformer to provide additional mains power
capacity that caters for future expansion.
First Graphene also renegotiated its Electricity Sales
Agreement with energy provider Synergy, resulting in
reduced rates for both on-peak and off-peak periods.
In line with the Company’s focus on reducing costs,
hours of operation at the Henderson plant have
been adjusted to take advantage of the significant
savings achievable by working during off-peak
energy consumption periods.
To coincide with the expansion of our product range
and implementation of new automated processes
David Bennett
General Manager Process Operations
FGR ANNUAL REPORT FY2021ASX:FGR l 14
R&D TECHNOLOGY
REPORT
Research and Development report
As we improve and evolve our understanding of graphene markets,
we are able to optimise our PureGRAPH® product portfolio.
In addition to PureGRAPH®5, PureGRAPH®10 and
PureGRAPH®20 powders, First Graphene now offers
a product with larger lateral size - PureGRAPH®50.
This jumbo platelet with high aspect ratio is designed
specifically for concrete strengthening and polymer
reinforcement. We have also seen advantages in
improved thermal conductivity.
Graphene applications in formulated products such as
coatings and composites require effective dispersion
of the graphene platelets into polar media, including
water. We have launched a range of PureGRAPH®
AQUA products to address this issue. The ground-
breaking products are pre-dispersed in water and
supplied as pastes for easy formulation into water and
polar solvent-based formulations,such as paints, latex
and cement composites PureGRAPH®AQUA products
are available in lateral sizes ranging from 5 microns to
50 microns, providing flexible solutions for customer
formulations. The larger platelet sizes are of particular
use in the cement and rubber industries.
The company also now offers PureGRAPH®
masterbatch products pre-dispersed in polymer
and plastics resins, such as PureGRAPH® MB-LDPE,
a graphene-loaded low-density polyethylene (LDPE)
masterbatch. This LDPE masterbatch has been
developed to provide customers with an off-the-shelf,
pre-dispersed graphene/polymer carrier that
is easy to mix with other polymer chips using standard
equipment so it can readily fit into existing plastic
processing lines.
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE 15
FGR ANNUAL REPORT FY2021ASX:FGR l 16
Product innovations
Researchers led by Prof. Dusan Losic
at the Australian Research Council
(ARC) Graphene Hub at the University
of Adelaide have developed a scalable
process for the functionalisation of
graphene platelets.
Adding functional chemistry improves the
currently evaluating the performance of these new
materials in advanced composite applications.
In addition, researchers led by Prof. Tony McNally
at WMG – part of the University of Warwick, UK -
has demonstrated that PureGRAPH® graphene
powders are excellent dispersants in a range of
thermoplastics. With good graphene quality and
optimised extrusion conditions, the researchers
have demonstrated that well-dispersed plastic
performance of graphene additives with enhanced
batches with graphene loadings as high as 30 per
dispersibility and building strong bonds into
cent w/w can be achieved. These thermoplastics
polymer networks. The researchers concluded that
have enhanced mechanical and thermal properties
the pristine, low-defect, few-layer PureGRAPH®
with the potential for commercialisation across new
graphene platelets with controlled edge oxygen are
industry segments.
ideal materials for this chemistry. First Graphene is
Product quality and standardisation
Additionally, ARC Graphene Hub
researchers have developed a robust
The test is based on thermogravimetric analysis
(TGA) and the extensive research has been
published in a scientific journal (Anal. Chem.
test method to characterise the quality
2021, 93, 34, 11859–11867). The study confirms that
of graphene nanoplatelets and identify
PureGRAPH® products are high-quality, pristine,
the presence of “fake” graphene.
low defect few-layer graphene platelets.
Regulatory approach
First Graphene continues to work
closely with AICIS Australia to
consolidate its position as the only
registered supplier of graphene in
tonnage volumes within Australia.
Elsewhere, in December 2020, the company
provided a detailed updated product
characterisation dossier to ECHA confirming that
all PureGRAPH® graphene products fit within the
scope of the REACH Substance Identity Profile (SIP)
for real graphene materials. The submission was
successful and PureGRAPH® was confirmed as
graphene within the REACH SIP.
As a consequence of Brexit, the Company has
extended permitted sales volumes in Europe. By
gaining registration under UK REACH, this permits
sales under Annex 7 registration at 10 tonnes/year in
the EU plus 10 tonnes/year in the UK. First Graphene
is actively monitoring the requirements to extend
REACH registration to Annex 8 in order to move to
100 tonnes/year as European demand increases.
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE 17
Renewable energy programs
First Graphene continues to explore
opportunities for carbon materials in
energy storage and the renewable
energy segment.
The market for supercapacitors is forecast to grow
The Company recently acquired worldwide rights
to technology developed by Kainos Innovation Ltd,
and supported by the UK Government’s Sustainable
Innovation Fund, for a novel technology based on
a patented process that uses cavitation chemistry
to convert petroleum feedstocks into high purity
graphene, graphite and clean hydrogen. These
to USD2.18 Billion by 2022, at a CAGR of 20.7 per cent.
products play an important role in low carbon energy
Unlike lithium-ion batteries, supercapacitors enable
generation. High purity graphite and graphene are
rapid charging and discharging and are forecast
to be adopted in high power devices. However,
supercapacitor – battery hybrid systems
critical minerals used in batteries for energy storage,
including those used in the electric vehicle market.
Hydrogen is a clean fuel that does not produce carbon
are also being adopted to aid the battery in charge
dioxide emissions when used as an energy source. The
and discharge cycles.
Under an exclusive worldwide licence from
the University of Manchester, the Company
has developed and scaled up manufacture of
metal oxide decorated graphene that exhibits
pseudocapacitance. Unlike carbon-based EDLC
government funding was used to prove the concept of
the process, combining the scientific knowledge from
Kainos Innovation with First Graphene’s expertise in
manufacturing operations, scale-up and commercial
application development. Two US patents for the
technology have been granted.
devices, these materials will enable high power
The technology offers petroleum producers an
density devices that also have high energy density.
opportunity to utilise their current assets to enter
First Graphene researchers have made good progress
renewable energy markets. The business emphasis
against a commercial target of 200 Farads/gram. The
is on carbon material manufacturer for batteries
current research is now focused on an optimised bill-
and supercapacitors with the hydrogen as a bonus
of-materials (current collector, electrolyte, separator)
by-product rather than a primary green hydrogen
to deliver a high-energy and high-power device.
manufacturing business.
Andy Goodwin
Senior Scientific Advisor
Paul Ladislaus
R&D Manager
FGR ANNUAL REPORT FY2021ASX:FGR l 18
CFO REPORT
Having joined First Graphene in March 2021, I have been highly impressed by
the commitment and technical capability that the team possesses.
First Graphene’s focus over the past few years has
Following the change in leadership of the company
been on developing a world-class production facility
in the second half of the Financial Year 2021 there
and a pristine quality product, which it has delivered
was marked change in the company’s strategic
in spades, with a best-in-class PureGRAPH®
direction. The Board and leadership team remain
product range available in tonnage quantities. This
committed to maximising future shareholder value,
proprietary production technology represents a
but now with a focus on the following four pillars:
significant competitive advantage over most other
manufacturers, who are unable to produce high
» A robust and agile commercial strategy
quality graphene powder consistently and at a
commercial scale.
» Continued invsetment in innovation and
leveraging technical capability
Whilst its been a ground-breaking achievement, it
has required the investment of manageable sums
» Accelerated sales growth
of development funds to get us to this point of
commercial readiness.
» Prioritising improvements in operating cashflow
Financial Year 2021
The reset in direction and leadership of company has generated some oneoff
expenses valued at AUD1.2m, excluding which the underlying operating
result for FY2021 is a loss of AUD5.1m.
This is a 6 per cent improvement over 2020. The
This write-down further demonstrates FGR’s
one-off costs include contractual payments to
commitment to its new commercially-focused
retiring directors (AUD 0.9m) and a non-cash write
strategy of prioritising projects with an accelerated
down of the company’s investment in its subsidiary
return on investment (ROI).
2D Fluidics (AUD 0.25m).
Despite these one-off costs, FGR has ended the 2021
After extensive evaluation of the 2D Fluidics
financial year in an impressive fashion. The majority
technology, the Company deemed that the likely
of sales for the year occurred in the last quarter
path to revenue was not aligned to First Graphene’s
and the ongoing contracts related to technical
commercial strategy. The 2D Fluidics technology is
consultants, financial systems and legal support
certainly innovative but is still a way off commercial
have all been reset to reduce spend by more than 50
viability and seems better suited to a scientific
Per cent in these categories. This has set up a strong
research organisation than to an advanced
platform for growth into FY2022 and beyond..
industrial materials provider such as First Graphene.
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE 19
+6%
Underlying
Operating Profit*
FY21: AUD -5.1m
FY20: AUD -5.4m
*Excluding one-off costs
in FY21 of AUD 1.2m
+17%
Sales Revenue
FY21: AUD 0.34m
FY20: AUD 0.29m
+81%
Inventory
FY21: AUD 4.7m
FY20: AUD 2.6m
-33%
Capital Expense
FY21: AUD 1.0m
FY20: AUD 1.5m
Key areas of focus
and outlook
»
Increasing sales with an aim for a significant
multiple increase in 2022
» Reducing inventory levels to be in line with sales
activity and minimum safety stock levels
» Reducing cash costs, with a targeted reduction
of >15 per cent, despite the addition of four new
commercial managers bringing significant
additional expertise to the Company
» Revised remuneration policy – lower executive
salaries and no cash bonuses until the business is
closer to an EBITDA positive position, plus greatly
reduced employee salary and cash bonus structure
– which the Company intends to partially replace
with an employee share scheme intended to provide
people with a sense of ownership and greater
commitment to the business
“The infinite potential of Graphene
combined with the FGR’s acute
commercial focus and strengthened
financial fundamentals, have laid
the foundations for Australia’s next
big success story. I look forward
to being part of First Graphene’s
journey in 2022 and beyond”
Aditya Asthana
CFO and Company Secretary
FGR ANNUAL REPORT FY2021ASX:FGR l 20
SUSTAINABILITY REPORT
Targeting sustainability
First Graphene is at the forefront
of sustainability
Not only are we continuing to refine our own
processes to make our operations greener, but we
are also in an enviable position as our core business
of manufacturing high grade, commercial scale
graphene is becoming more relevant to almost
every industry around the world.
We see this as a significant advantage. First
Graphene is part of the global solution as industries
move towards more renewable energy sources and
smarter ways of manufacturing.
Practically every proposition for enhancing products
with graphene is directly associated with improving
impacts on the world. That is certainly the case in
each of the key target verticals First Graphene has
identified. Some of those benefits include:
» Reducing landfill waste from improved wear life of
» Fire retardancy in coatings, lowering the chances
products made from composites, plastics, rubbers
of carbon emissions from unplanned fires
and elastomers
» Electrical and thermal conductivity in inks
» Significantly reducing the concrete segment’s
and coatings, making processes considerably
reliance on volume and large water consumption
more efficient
by increasing the strength and reducing the
overall weight of concrete; reduced production
volumes also leads to lower CO2 emissions
» Graphene and graphitic products are also in
high demand for uses in the battery and electric
vehicle markets, as well as for a whole range of
»
Impermeable linings in storage vessels and
uses across renewable energy markets.
pipelines, alleviating potential containment
issues to reduce pollution risks
Graphene and graphitic products are also in high demand for uses in the
battery and electric vehicle markets, as well as for a whole range of uses
across renewable energy markets.
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE 21
Low-waste production process
First Graphene’s manufacturing process achieves various positive outcomes.
Our process uses exceptionally high-purity graphite
The conversion process utilises practically all the
as feedstock, which is subject to far less processing or
feedstock material, leading to negligible waste.
refinement than that required by lower grade ores.
Then, the resulting product is sent to customers
Mining methods are also typically less destructive
intent on making the world a better place.
on the environment as high-grade ore veins can be
accessed through targeted underground rather than
open pit mining methods.
World-first R&D
Over the past six months First Graphene has announced ground-breaking
research and development in a number of areas targeted directly or indirectly
at reduced carbon emissions, including:
» Converting petroleum feedstocks to graphite
The Company continues to work internally, with
and clean hydrogen, providing a future revenue
leading universities and research organisations,
opportunity and far lower carbon footprint for
and with industry to develop new and sustainable
fossil fuel producers
applications.
» The use of graphene as a low-cost catalyst in
hydrogen fuel cells, used as an alternative to
combustion engines
Continuous improvement
Not content to rest on the laurels of a wonder product,
First Graphene is committed to doing more.
The Company seeks to continually improve its
The Company is investigating renewable options
own sustainability performance through ongoing
including solar to reduce our reliance on grid power.
refinement and initiatives to do better.
We remain committed to improving our own
The process for producing our PureGRAPH® product
performance, and in doing so, helping others around
lines is energy intensive. That energy is sourced from
the world to achieve their sustainability goals.
the grid, which is largely fossil fuel generated.
Michael Bell
Managing Director and CEO
FGR ANNUAL REPORT FY2021ASX:FGR l
2 2
ANNUAL
FINANCIAL
REPORT
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE 23
Directors’ Report
The directors present their report together
with the financial report of First Graphene
Limited (‘First Graphene” or ‘Company’) and
the entities it controlled (‘Consolidated Entity’
or ‘Group’) for the year ended 30 June 2021.
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
Mr Grigor is a highly 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 National University having
completed degrees in law and economics.
His association with mining commenced
with a position in the 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 corporate adviser, together
with Andrew "Twiggy" Forrest.
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
None.
Interests in shares and options
Ordinary shares
Options
18,883,772
11,854,951
Dr Andy Goodwin Ph.D. (Polymer Chemistry)
Non-Executive Director
Andy has a successful track record in
innovation and technology development
roles within the speciality chemicals industry.
Andy has extensive leadership experience
with Sanofi, Dow Corning Corporation and
Thomas Swan & Co. Ltd. He has a PhD in
polymer chemistry and an MTE Diploma
from the IMD Business School in Lausanne,
Switzerland.
Andy has been actively involved in the
development of the graphene materials
industry since 2012. He joined First Graphene
in 2017 and is based in Manchester, UK.
Appointed 1 July 2020
Other Current Directorships
None.
Former directorships in the last 3 years
None
Interests in shares and options
Ordinary shares
Options
2,008,993
3,108,993
Michael Quinert
Non-Executive Director
Mr Quinert is a founding partner of Quinert
Rodda & Associates which was established in
July 2009. He has over 30-years’ experience
as a commercial and corporate lawyer,
including three years with ASX and over 20
years as a partner in a Melbourne law firms.
Mr Quinert has extensive experience
assisting and advising companies on IPO’s,
capital raising, cross border transactions,
regulatory compliance and has regularly
advised publicly listed mining companies.
Michael is a Non-Executive Chairman of West
Wits Mining Limited and Non-Executive
Director of listed First Au Limited (ASX:FAU).
Appointed 1 March 2021
1 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
24
Other Current Directorships
Peter Youd B Bus (Accounting), AICA
West Wits Mining Limited
First Au Limited
Former directorships in the last 3 years
Manalto Limited (ASX: MTL)
Covata Limited (ASX: CVT)
Interests in shares and options
None
Michael Bell
MMaannaaggiinngg DDiirreeccttoorr aanndd CChhiieeff EExxeeccuuttiivvee
OOffffiicceerr
Mr Bell has over 20 years’ experience in
engineering and business management and
significant international experience driving
business growth.
Executive Director
Mr Youd is a Chartered Accountant and has
extensive experience within the resources
and oil and gas services, industries. For the
last 31 years Mr Youd has held a number of
senior management positions and
directorships for publicly listed and private
companies in Australia and overseas.
Retired 28 April 2021
Other Current Directorships
None.
Former directorships in the last 3 years
Non-Executive Director: Haranga Resources
Limited
Results and Dividends
He was with ST Engineering Group where he
served as Senior Vice-President.
The Group result for the year was a loss of
$6,284,757 (2020: loss of $5,366,149).
Mike has also held roles as Director for
Navman Wireless, a global Telematics
company, and as General Manager with
Singapore-based shipbuilder Strategic
Marine.
Appointed Managing Director on 1 July 2021
Other Current Directorships
None
Former directorships in the last 3 years
None
Interests in shares and options
Options
5,000,000
Craig McGuckin, Dip. Minsurv Class 1, Dip
Surfmin
Managing Director
Mr McGuckin is a qualified mining
professional with 34 years’ experience in the
mining, drilling, petroleum and graphene
industries. He has held senior positions
including Senior Planning Engineer, Mine
Manager and Managing Director of private
and publicly listed companies.
Retired 8 January 2021.
Former directorships in the last 3 years
None
No final dividend has been declared or
recommended as at 30 June 2021 or as at the
date of this report (2020: $ nil).
No interim dividends have been paid (2020:
nil).
Principal Activities
During the financial year the principal
continuing activities of the Consolidated
Entity was as the leading supplier of high-
performing graphene products with a robust
manufacturing platform and an established
100 tonne/year graphene production
capacity. PureGRAPH® graphene is easy to
use and is enhancing the properties of
customers’ products and materials across
industries and applications worldwide.
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
From the 1st of July 2021 to the 9th of August
2021, 6.7 million options were exercised by
2 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
option-holders resulting in approximately
$1.68 million of cash influx for First Graphene.
No other matters or circumstances have
arisen since the end of the financial year
which significantly affected or may
significantly affect the operations of the
Group, the results of those operations, or the
state of affairs of the Group in subsequent
financial years.
Significant Changes in State of Affairs
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 further information on the 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.
Directors’ and other officers’ emoluments
Details of the remuneration policy for
Directors and other officers are included in
the Remuneration Report (page 27) and the
Corporate Governance Report lodged
separately on ASX on the same day as this
report is lodged.
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 and sales
operations are subject to regulation In
Australia by the Australian Industrial
Chemicals Introduction Scheme (AICIS) and
by the Registration, Evaluation, Authorisation
and Restriction of Chemicals (REACH) in the
European Union and United Kingdom.
The Company’s Commercial Graphene
Production facility has been approved as
meeting the environmental standards set
down by the Government of Western
Australia’s Department of Environment
Regulation.
25
Proceedings on behalf of company
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.
3 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
26
Share Options
At the date of this report, First Graphene Limited has the following options exercisable into
ordinary shares in First Graphene Limited.
UUnnlliisstteedd
GGrraanntt DDaattee
DDaattee ooff
EExxppiirryy
EExxeerrcciissee PPrriiccee
Share option
6 February
2019
26 February
2022
$0.18 each, if exercised on
or before 26 February
2022
Share option
8 November
2019
8
November
2023
$0.25 each, if exercised
on or before 8 November
2023
NNuummbbeerr
uunnddeerr
ooppttiioonn
1,000,000
14,300,000
Directors’ meetings
The number of meetings of Directors held during the year and the number attended by
each Director was as follows:
Warwick Grigor
Dr Andy Goodwin
Michael Quinert
Craig McGuckin
Peter Youd
Directors’ Meetings
Meetings Attended
Entitled to Attend
8
7
3
4
6
8
8
3
4
6
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.
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.
4 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
27
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 (‘KMP’) disclosed in this report:
Mr Warwick Grigor
Dr Andy Goodwin (Appointed 1 July 2020)
Mr Michael Bell (Appointed 11 January 2021)
Mr Aditya Asthana (Appointed 22 March 2021)
Mr Michael Quinert (Appointed 1 March 2021)
Mr Craig McGuckin (Retired 8 January 2021)
Mr Peter Youd (Retired 28 April 2021)
Remuneration Policy
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 First Graphene. 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 First Graphene or for
attending Board meetings.
All Executive Directors, Non-Executive Directors and responsible executives of First
Graphene 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
First Graphene.
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
5 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
2 8
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 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. Given the current size
and composition of the Board, the Board believes there would be no efficiencies gained by
establishing a separate Remuneration Committee. Accordingly, the Board performs the
role of the Remuneration Committee. When the Board convenes as the Remuneration
Committee it carries out those functions which are delegated to it in the Company’s
Remuneration Committee Charter.
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.
6 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
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THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
31
The remuneration policy has been tailored to increase goal congruence between
shareholders, directors and executives. The Group is in the early development phase of its
operations, and due consideration is made of developing long term shareholder value. The
Board has regard to the following indices in respect of the current financial year to
facilitate the long-term growth of the Consolidated Group:
Item
Sales revenue $
Loss before tax $
Basic loss per shares
(cents)
Increase/(decrease) in
share price %
2021
341,869
(6,284,757)
(1.19)
2020
289,773
(5,366,149)
(1.11)
2019
22,771
(6,986,738)
(1.78)
2018
7,180
(7,024,612)
(1.65)
2107
-
(4,259,960)
(1.32)
133.1
(45.1)
134.2
275.3
(57.5)
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
%
remuneration
Fixed
% Short Term
Incentive
% Long Term
Incentive
Warwick Grigor
Dr Andy Goodwin
Michael Quinert
Michael Bell
Aditya Asthana
Craig McGuckin
Peter Youd
57%
100%
100%
42%
96%
40%
53%
43%
4%
12%
13%
58%
48%
35%
Contractual Arrangements with KMP
Remuneration and other terms of employment for Key Management Personnel are
formalised in service agreements. These agreements specify the components of
remuneration benefits and notice periods. The material terms of service agreements with
the Key Management Personnel are noted as follows:
Name
Base Salary
Michael Bell
350,000
Duration of
Service
Agreement
Ongoing
Notice Period
By Executive By Company
3 months
3 months
Aditya
Asthana
220,000
Ongoing
3 months
3 months
Severance
Payment
Entitlement
No
entitlement
No
entitlement
There are no other service agreements in place.
9 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
32
Share-based compensation
Shares issued as part of remuneration for the year ended 30 June 2021
No shares were issued to directors and other key management personnel as part of
compensation during the year.
Options issued as part of remunera tion for the year ended 30 June 2021
Options were issued to key management personnel as part of compensation during the
year.
Using the Black Scholes option pricing model and based on the assumptions set out
below, the CEO Options were ascribed the following value:
Assumptions:
Valuation date
Market price of shares
Exercise price
17 December 2020
$0.245
$0.250
Expiry date (length of time from issue)
8 November 2023 – 2.89 years
Risk free interest rate
Volatility
Indicative Value of CEO Option (cents)
Total Value of CEO Options
0.25%
75%
00..11115588
$$557799,,006699
Options holdings held by key management personnel
Directors
Balance
01.07.20
Granted
Exercised
Other
(i)
Balance
30.06.21
Total
vested
30.06.21
Vested &
exercisable
30.06.21
Vested &
un-
exercisable
30.06.21
Warwick
Grigor
Dr Andy
Goodwin
Michael
Quinert
Michael
Bell
Aditya
Asthana
Craig
McGuckin
Peter
Youd
11,854,951
3,108,993
-
-
-
3,715,852
3,703,244
-
-
-
5,000,000
-
-
-
-
-
-
-
-
-
-
- 11,854,951
-
11,854,951
-
-
-
-
(715,852)
(703,244)
3,108,993
3,108,993
3,108,993
-
5,000,000
-
-
-
-
-
-
-
-
-
3,000,000
3,000,000
3,000,000
3,000,000
-
-
-
-
-
-
-
(i)
Comprise amounts held at date of appointment and date of resignation
10 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
33
Performance rights issued as part of remuneration for the year ended 30 June 2021
Performance rights were issued to key management personnel as part of compensation
during the year. The performance rights were valued at the share price on the date of
grant and will vest over the term of 12 months. Please refer Note 17 for full details of the
Performance Rights.
Performance rights holdings held by key management personnel
Directors
Balance
01.07.20
Granted
Exercised
Other
Balance
30.06.21
Total
vested
30.06.21
Vested &
exercisable
30.06.21
Vested &
un-
exercisable
30.06.21
Warwick
Grigor
Dr Andy
Goodwin
Michael
Quinert
Michael
Bell
Aditya
Asthana
Craig
McGuckin
Peter
Youd
-
-
-
-
-
-
-
-
-
-
-
60,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Shareholdings held by key management personnel
Directors
Warwick
Grigor
Dr Andy
Goodwin
Michael
Quinert
Michael
Bell
Aditya
Asthana
Craig
McGuckin
Peter
Youd
Balance
01.07.20
Granted
Exercise of
options
Acquired
Other
Balance
30.06.21
18,883,772
2,008,993
-
-
-
8,597,092
7,162,674
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18,883,772
2,008,993
-
-
-
(1,600,000)
6,997,092
(49,000)
7,113,674
Transactions with other related parties
There were no loans or other transactions with key management personnel.
No remuneration consultants were utilised at this point in the Company’s development.
Voting Rights
At the 2020 Annual General Meeting held on 9 October 2020 there were 18.75% of the votes
against the adoption of the remuneration report.
End of audited Remuneration Report
11 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
34
Auditor’s independence
The Directors received the independence declaration from the auditor of First Graphene
Limited as stated on page 35.
Non-audit services
During the period BDO Corporate Tax (WA) Pty Ltd was paid $50,454 for the provision of
taxation services (2020: $33,794). BDO Corporate Tax (WA) Pty Ltd is an affiliate member
of BDO Audit (WA) Pty Ltd. Refer to Note 24 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 24, 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.
MMiicchhaaeell BBeellll
Managing Director
Dated at Perth this 30th day of August 2021
.
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.
Annual General Meeting
The Company’s Annual General Meeting will be held in November 2021.
Details will be included in the Annual report and the Notice of Meeting, which will be
issued in due course.
12 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
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
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
35
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 2021, I declare that, to the best
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF FIRST GRAPHENE LIMITED
of my knowledge and belief, there have been:
relation to the audit; and
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
As lead auditor of First Graphene Limited for the year ended 30 June 2021, I declare that, to the best
of my knowledge and belief, there have been:
2. No contraventions of any applicable code of professional conduct in relation to the audit.
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
This declaration is in respect of First Graphene Limited and the entities it controlled during the period.
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
Jarrad Prue
BDO Audit (WA) Pty Ltd
Director
Perth, 30 August 2021
BDO Audit (WA) Pty Ltd
Perth, 30 August 2021
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.
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.
13 | P a g e
13 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l 3 6
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the year ended 30 June 2021
Note
2021
$
2020
$
Continuing operations
Revenue from contracts with customers
3
Cost of goods sold
Gross profit/(loss)
Other income
Research & development
Selling & marketing
Mineral lease maintenance
General & administrative
Operating loss
Finance income
Finance expense
4(a)
4(b)
4(c)
4(d)
4(e)
5(a)
5(b)
341,869
289,773
(266,236)
(262,896)
75,633
26,877
962,301
1,444,990
(2,614,609)
(3,229,900)
(486,502)
(290,548)
(272,278)
(252,562)
(3,920,375)
(3,048,724)
(6,255,830)
(5,349,867)
1,892
7,337
(30,819)
(23,619)
Loss from continuing operations before tax
(6,284,757)
(5,366,149)
Income tax (expense)/benefit
6
-
-
Loss for the year
(6,284,757)
(5,366,149)
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
9,488
9,488
26,609
26,609
Total comprehensive loss for the year
(6,275,269)
(5,339,540)
14 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
37
Consolidated Statement of Profit or Loss and Other
Comprehensive Income (continued)
For the year ended 30 June 2021
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)
7
7
(6,297,424)
(5,239,650)
12,667
(126,499)
(6,284,757)
(5,366,149)
(6,287,936)
(5,213,041)
12,667
(126,499)
(6,275,269)
(5,339,540)
(1.19)
(1.19)
(1.11)
(1.11)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes
15 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
3 8
Consolidated Statement of Financial Position
At 30 June 2021
Note
2021
$
2020
$
Assets
Current assets
Cash and cash equivalents
Inventories
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right of use asset
Inventories
Intangible assets
Other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee liabilities
Financial liabilities
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
Non-controlling interest
Total equity
8
9
10
11
12
9
13
14
12
16
18
7,076,580
1,152,872
86,015
817,234
8,053,134
1,601,522
65,568
332,495
9,132,701
10,052,719
2,666,643
342,590
3,528,896
101,652
220,805
4,681,768
15,993,287
1,321,261
154,117
4,934,817
359,297
6,769,492
-
-
6,769,492
9,223,795
2,314,167
219,067
1,009,200
294,811
215,102
4,052,347
14,105,066
1,569,670
63,221
-
72,791
1,705,682
152,999
152,999
1,858,681
12,246,385
98,808,042
5,607,362
95,778,819
5,887,471
(95,361,902)
(89,531,680)
9,053,502
12,134,610
170,293
9,223,795
111,775
12,246,385
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes
16 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
39
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F
FGR ANNUAL REPORT FY2021ASX:FGR l
40
Consolidated Statement of Cash Flows
For the year ended 30 June 2021
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
2021
$
2020
$
334,087
448,161
(8,337,427)
(6,758,025)
1,892
(20,052)
593,316
353,226
7,337
(13,460)
1,397,112
179,521
Net cash outflows from operating activities
19
(7,074,958)
(4,739,354)
Cash flows from investing activities
Payments for property, plant and equipment
(1,468,502)
(1,122,133)
Proceeds from sale of property, plant and
equipment
Payments for intellectual property
Payments for investment in third party
15,759
(71,741)
1,864
(49,850)
-
(215,102)
Net cash outflows from investing activities
(1,524,484)
(1,385,221)
Cash flow from financing activities
Proceeds from placement of shares
Proceeds from the exercise of options
Payment of share issue/capital raising costs
Proceeds from non-controlling interest
Proceeds from convertible note
Finance lease payments
Net cash inflows from financing activities
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at beginning of the
year
Effect of exchange rate fluctuations on cash held
898,000
6,424,171
2,790,642
4,333,967
(19,133)
(259,280)
-
75,000
4,102,000
(151,487)
-
(68,385)
7,620,022
10,505,473
(979,420)
4,380,898
8,053,134
3,664,137
2,866
8,099
Cash and cash equivalents at end of the year
8
7,076,580
8,053,134
The above consolidated statement of cash flows should be read in conjunction with the
accompanying note
18 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
41
Notes to the Consolidated Financial Statements
1. Basis of Preparation
First Graphene Limited (“First Graphene” 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 Chief Executive Officer’s 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 2021.
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;
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 2020, except for the adoption
of new accounting standards and interpretations effective for annual periods beginning 1
July 2020. The effect of the adoption of these new accounting standards and
interpretations did not have a material impact on the annual consolidated financial
statements of the Group, the nature and effect of which is discussed below.
The Group has not early adopted any other standard, interpretation or amendment that
has been issued but is not yet effective.
19 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
42
Notes to the Consolidated Financial Statements
Going Concern
The financial report is a general purpose financial report which has been prepared on a
going concern basis and in accordance with Australian Accounting Standards, the
Corporations Act 2001 and other authoritative pronouncements of the Australian
Accounting Standards Board.
Statement of compliance
The financial report complies with Australian Accounting Standards as issued by the
Australian Accounting Standards Board. The financial report also complies with
International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board.
The following Standards and Interpretations have been issued by the AASB, are relevant to
the Group, but are not yet effective and have not been adopted by the Group for the period
ending 30 June 2021. Unless otherwise stated, the Group has yet to fully assess the impact
of these Standards and Interpretations when applied in future periods.
Basis of consolidation
The consolidated financial statements comprise the financial statements of First Graphene
Limited and its subsidiaries as at 30 June 2021 (the GGrroouupp).
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 and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
20 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
43
Notes to the Consolidated Financial Statements
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
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 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.
The Notes To The Financial Statements
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;
21 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
44
Notes to the Consolidated Financial Statements
•
•
•
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.
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.
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.
COVID Impact
Judgement has been exercised in considering the impacts the Coronavirus (COVID-19)
pandemic has had, or may have, on the Company based on known information. This
consideration extends to the nature of the products and services offered, customers,
supply chain and staffing. Other than as addressed in specific notes, there does not
currently appear to be either any significant impact upon the financial statements or any
significant uncertainties with respect to events or conditions which may impact the
Company unfavourably as at the reporting date or subsequently as a result of the
Coronavirus (COVID-19) pandemic.
Share Based Payments Estimates
Judgement has been exercised in calculating the value of share based payments. The
closing price of share sales on the day of the award of the share based payment is used for
calculating the fair value of the payment.
Convertible notes carried at fair value
On initial recognition, the value of the convertible notes was calculated based on the
proceeds received. At the reporting date, the fair value of the conversion options within the
convertible loan has been assessed to be nil and credit risk has not changed from
inception of the loan.
Inventories
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.
22 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
45
Notes to the Consolidated Financial Statements
Inventory held at 30 June 2021 relates to raw material, work in progress and finished goods
and is held at net realisable value.
The provision for impairment of inventories assessment requires a degree of estimation
and judgement. The level of any provision is assessed by considering recent sales
experience, the ageing of inventories, damaged, obsolete, slow moving inventories and
other factors that affect inventory obsolescence.
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 way 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:
Graphene production
As the Company expands its graphene production and inventory, the Board monitors the
Company based on actual verses budgeted expenditure incurred.
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.
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 Asset Maintenance
Although the Company has suspended its mineral exploration and development in Sri
Lanka the Board monitors the Company based on actual verses budgeted expenditure
incurred.
23 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
46
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•
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
47
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
United Kingdom
Sri Lanka
Total
2021
$
Revenue
341,869
-
-
341,869
Total Assets
9,252,761
482,374
6,258,152
15,993,287
2020
$
Revenue
285,784
3,989
-
289,773
Total Assets
13,974,972
113,112
16,982
14,105,066
RReeccoonncciilliiaattiioonn ooff sseeggmmeenntt aasssseettss aanndd lliiaabbiilliittiieess ttoo tthhee SSttaatteemmeenntt ooff ffiinnaanncciiaall PPoossiittiioonn
Reconciliation of segment assets to the Statement of Financial Position
Total segments assets
Inter-segment elimination
Total assets per statement of financial position
2021
$
23,160,997
(7,167,710)
15,993,287
2020
$
21,832,721
(7,727,655)
14,105,066
Reconciliation of segment liabilities to the Statement of Financial Position
Total segments liabilities
Inter-segment elimination
Total liabilities per statement of financial position
2021
$
23,255,662
(16,486,171)
6,769,491
2020
$
17,421,874
(15,563,193)
1,858,681
25 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
4 8
Notes to the Consolidated Financial Statements
3. Revenue from contracts with customers
Accounting Policy
The Group accounts for a contract when it has approval and commitment from both
parties, the rights of the parties are identified, payment terms are identified, the
contract has commercial substance and collectability of the consideration is probable.
Revenues from product sales are recognised when an identified performance
obligation is satisfied, and the customer obtains and accepts control of the Company’s
product. Sales of product generally occur at a point in time, typically upon delivery to
the customer.
Taxes collected from customers relating to product and service sales and remitted to
governmental authorities are excluded from revenues. The Company expenses
incremental costs of obtaining a contract as and when incurred because the expected
amortisation period of the asset that the Company would have recognised is one year
or less.
Types of goods
Sale of graphene
Total revenue from contracts with customers
Notes
2021
$
341,869
341,869
2020
$
289,773
289,773
4. Operating expenses and other income
Accounting Policy
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.
This includes JobKeeper income received due to COVID-19 during the year which has been
presented as other income
26 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
49
Notes to the Consolidated Financial Statements
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 3-10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each reporting date.
Other revenue and expenses from continuing operations:
Notes
(a) Other income
R&D and grant income
Government grants related to
COVID19
Profit on sale of property, plant &
equipment
(b)
Research & development
Employee expenses
Consultant and research programs
Legal and taxation expenses
Depreciation
Amortisation
Impairment of intangible assets
Impairment of inventory
Other
(c)
Selling & marketing
Employee expenses
Advertising & promotion
Depreciation
Other
(d) Mining lease maintenance
Employee expenses
Depreciation
Rent of premises
Other
(e) General & administrative
Employee expenses
Director, finance & company secretarial
fees
Legal & other professional fees
ASX listing, share registry and other
corporate costs
Depreciation
Amortisation
Share based payment expense
Option expenses
Rent of premises
Insurances
Other
2021
$
684,186
262,356
15,759
962,301
938,419
933,307
67,286
64,148
18,075
250,000
(4,680)
348,054
2,614,609
182,125
202,074
1,101
101,203
486,502
63,118
-
57,919
151,241
272,278
1,362,164
573,168
863,860
153,011
39,972
-
419,831
-
15,740
71,269
421,360
3,920,375
2020
$
1,263,583
179,521
1,886
1,444,990
1,013,331
1,338,571
154,444
178,050
19,997
-
46,800
478,707
3,229,900
115,642
174,906
-
-
290,548
40,473
44,900
50,785
116,404
252,562
299,193
576,107
571,446
145,592
22,215
7,627
52,500
712,763
62,942
105,613
492,724
3,048,724
27 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
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Notes to the Consolidated Financial Statements
5.
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.
Finance income
(a)
Interest income on bank deposits
Finance expense
(b)
Interest expense
Foreign exchange (loss)/gain - unrealised
Notes
2021
$
1,892
1,892
(20,052)
(10,767)
(30,819)
2020
$
7,337
7,337
(13,460)
(10,159)
(23,619)
28 | P a g e
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51
Notes to the Consolidated Financial Statements
6.
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:
Income tax expense
Income tax expense/(benefit)
(a)
Current tax
Deferred tax
Under/(over) provision in prior years
Total income tax expense
(b) Amounts recognised directly in equity
Aggregate current and deferred tax arising in the
reporting period and not recognised in net profit or
loss or other comprehensive income but directly
debited or credited in equity
Current tax
Deferred tax
(c) Reconciliation of income tax expense to prima
facie tax payable
-
-
Loss before income tax from all activities
Prima facie income tax benefit on loss before
income tax at 30% (2020:30%)
Entertainment
-
-
Share based payments
- Non-assessable income
- Other permanent differences
- Deferred tax assets not brought to account
Income tax expense/(benefit)
The applicable weighted average effective tax rates
(d) Deferred tax liability
Prepaid expenditure
PPE
Other temporary differences
Off-set of deferred tax assets
Net deferred tax liability recognised
2021
$
-
-
-
-
-
2020
$
-
-
-
-
-
-
-
-
-
(155,601)
(155,601)
(8,379,866)
(5,366,254)
(2,513,960)
(1,609,876)
3,935
125,949
(139,196)
761,472
130,016
-
0%
-
-
-
-
-
-
1,972
229,579
(220,832)
190,825
1,408,332
-
0%
94,110
-
31,206
125,136
(125,136)
-
29 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
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Notes to the Consolidated Financial Statements
Income tax expense
Unrecognised deferred tax asset
(e)
Tax losses
Capital losses
PPE & Leases
Other temporary differences
Off-set of deferred tax liabilities
Net deferred tax assets unrecognised
2021
$
2020
$
6,335,089
8,772,623
5,012
1,068,198
16,180,921
-
16,180,921
5,962,227
8,772,623
14,520
388,722
15,138,092
(125,136)
15,012,956
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.
7.
Loss per share
Accounting Policy
Loss per share (“LPS”) is the amount of post-tax profit attributable to each share. The group
presents basic and diluted LPS data for ordinary shares. Basic LPS 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 LPS takes into account the dilutive effect of all potential ordinary shares, being
unlisted employee share options on issue.
Weighted average ordinary shares used in
calculating basic earnings per share
Weighted average ordinary shares used in
calculating diluted earnings per share
Basic loss per share - cents per share
Diluted loss per share - cents per share
Number of shares
2021
Number of shares
2020
530,130,203
474,147,509
530,130,203
474,147,509
(1.19)
(1.19)
2021
$
(1.11)
(1.11)
2020
$
Loss attributable to the owners of First Graphene
used in calculating basic loss per share
(6,297,424)
(5,239,650)
Loss attributable to the owners of First Graphene
used in calculating diluted loss per share
(6,297,424)
(5,239,650)
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.
30 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
53
Notes to the Consolidated Financial Statements
8. 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
2021
$
7,076,580
7,076,580
2020
$
8,053,134
8,053,134
The Group’s maximum exposure to financial risk is disclosed in note 15.
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 58.
9.
Inventories
Accounting Policy
Raw material, work in progress, 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.
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.
31 | P a g e
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Notes to the Consolidated Financial Statements
Inventories (continued)
Total Inventories
Raw materials
Work in progress
Finished goods
Inventories Gross
Less: Provision for impairment
Carrying amount
Disclosed as:
Current
Non-current
Total inventory
10. Other assets
Prepayments
Security Deposits
Total other assets
2021
$
1,859,988
350,689
2,513,211
4,723,887
(42,120)
4,681,768
1,152,872
3,528,896
4,681,768
2021
$
817,234
-
817,234
2020
$
1,328,904
272,618
1,056,000
2,657,522
(46,800)
2,610,722
1,601,522
1,009,200
2,610,722
2020
$
325,455
7040
332,495
11. 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.
32 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
55
Notes to the Consolidated Financial Statements
Property, plant and equipment (continued)
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).
Reconciliations of the carrying value for each class of property, plant and equipment is set
out below:
30 June 2021
$
Exploration
equipment
-
Plant and
equipment
2,293,523
Office
equipment
8,703
Motor
vehicles
11,941
Total
2,314,167
-
-
-
-
921,996
(615,689)
56,808
(9,081)
-
(2,572)
978,804
(627,342)
1,002
12
-
1,014
2,600,832
56,442
9,369
2,666,643
Carrying amount at
beginning of year
Additions
Depreciation
due
Movement
foreign exchange
Carrying amount at end
of year
to
at
amount
Carrying
beginning of year
Additions
Transfers
Depreciation
Movement due to foreign
exchange
Carrying amount at end
of year
30 June 2020
$
Plant and
equipment
1,326,534
Exploration
equipment
30,042
Office
equipment
239,464
-
-
(30,290)
1,448,574
233,091
(714,665)
5,697
(233,091)
(3,369)
Motor
vehicles
31,462
-
-
(19,739)
Total
1,627,502
1,454,271
-
(768,063)
248
-
(11)
2
218
457
2,293,523
8,703
11,941
2,314,167
33 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
56
Notes to the Consolidated Financial Statements
12. Right of use assets and liabilities
Accounting Policy
The Company, as a lessee, will assess whether a contract is, or contains, a lease under AASB
16. A contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. If the contract is
assessed to be, or contains, a lease, the Company will recognise a right-of-use asset (Note
1(r)) and a lease liability at the lease commencement date.
At the commencement date of the lease, the Company recognises lease liabilities
measured at the present value of lease payments to be made over the lease term. The
lease payments include fixed payments (including in-substance fixed payments) less any
lease incentives receivable, variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees. The lease payments also
include the exercise price of a purchase option reasonably certain to be exercised by the
Company and payments of penalties for terminating a lease, if the lease term reflects the
Company exercising the option to terminate. The variable lease payments that do not
depend on an index or a rate are recognised as expense in the period on which the event
or condition that triggers the payment occurs.
The Company recognises right-of-use assets at the commencement date of the lease (i.e.,
the date the underlying asset is available for use). Right-of-use assets are measured at cost,
less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of
lease liabilities recognised, initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives received. Unless the Company is
reasonably certain to obtain ownership of the leased asset at the end of the lease term, the
recognised right-of-use assets are depreciated on a straight-line basis over the shorter of
its estimated useful life and the lease term. Right-of-use assets are subject to impairment.
Right of Use Assets:
Cost
Accumulated depreciation
Net carrying amount
Movement in Right of use asset:
Opening balance
Addition
Depreciation
Closing balance
Lease Liabilities:
Current
Non-current
Total
Movement in Lease liabilities:
Opening balance
Addition
Reduction in lease liabilities
Closing balance
2021
$
579,170
(236,580)
342,590
219,067
284,994
(161,471)
342,590
196,213
163,084
359,297
225,790
284,994
(151,487)
359,297
2020
$
294,175
(75,108)
219,067
-
294,175
(75,109)
219,067
72,791
152,999
225,790
-
294,175
(68,385)
225,790
34 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
57
Notes to the Consolidated Financial Statements
13. 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
Customer deposits
14. Financial liabilities
Accounting Policy
2021
$
1,141,853
179,508
1,321,361
2020
$
1,372,680
196,990
1,569,670
Convertible notes were issued by the Group which include embedded derivatives.
Convertible notes are initially recognised as financial liabilities at fair value.
On initial recognition the fair value of the convertible notes equated to the proceeds
received and subsequently the convertible note is measured at fair value. The movements
are recognised in profit and loss as finance costs except to the extent the movement is
attributed to changes in the group’s own credit risk status in which case, it is recognised in
Other Comprehensive Income.
Terms and Conditions
The Company entered into a Share Placement Agreement with Specialty Materials
Investments, LLC (the Investor) on the 27th of May 2021.
Initial deposit shares issued: 2,800,000 shares at $0.235 per share
• Total AUD amount that can be drawn down: $8,000,000
•
• Fee paid: 1,021,276 shares at $0.235 per share
• Final AUD value of shares to be issued: $8,480,000 (“subscription amount”)
• Other Terms:
• The final number of shares to be issued by the Company will be determined by
applying the Purchase Price (as set out below) to the subscription amount. The
Purchase Price will initially be equal to $0.30 per share and will reset after 10 August
2021 to the average of the five daily volume-weighted average prices selected by
the Investor during the 20 consecutive trading days immediately prior to the date
of the Investor’s notice to issue shares, rounded down to the next half a cent if the
share price is at below 50 cents and whole cent if the share price is at above 50
cents, with no discount applicable to this formula. To the extent that Placement
Shares are issued after six months, or 12 months, the Investor will receive a discount
of, respectively, 3% or 6% to the foregoing Purchase Price formula.
• The Purchase Price will be the subject of a Floor Price of $0.16. If the Purchase Price
formula were to result in a purchase price that is less than the Floor Price, the
Company may refuse to issue shares and instead opt to repay the relevant
subscription amount in cash (with a 5% premium), subject to the Investor’s right to
35 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
58
Notes to the Consolidated Financial Statements
receive Placement Shares at the Floor Price in lieu of such cash repayment. The
Purchase Price will not be the subject of a cap.
• The Company will issue the Placement Shares in relation to all or part of each of the
above investments on the Investor’s request, during the period ending 24 months
after the date of the investment.
• The Company has retained the right (but has no obligation) to repay the
subscription amount in cash in lieu of issuing shares by way of a repayment of the
subscription amount together with the difference between the market price of the
shares and the Purchase Price (if any) in relation to the shares that would otherwise
have been issued.
Current
Convertible liabilities
2021
$
4,934,817
4,934,817
2020
$
-
-
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.
36 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
Notes to the Consolidated Financial Statements
59
15. Financial Risk Management
((aa))
Financial risk management
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). The Group’s
principal financial liabilities comprise
trade and other 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.
FFiinnaanncciiaall rriisskk mmaannaaggeemmeenntt ssttrruuccttuurree::
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.
((bb))
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 Group has no significant
concentrations of credit risk.
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
of credit exposures. Amounts due from
and to clients and dealers represents
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
group of receivables under financial
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 $7,076,580
(2020: $8,053,134).
The Company banks with Westpac
Banking Corporation (Westpac).
Westpac’s long term credit ratings are A+
(Fitch Ratings), Aa3 (Moody's Investors
Service) and AA- (Standard & Poor's).
Group
2021
$
2020
$
Cash and cash
equivalents
7,076,580 8,053,134
7,076,580 8,053,134
37 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
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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 2021 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 2021 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
$
$
Impairment
allowance
Total
carrying
amount
$
$
Total
$
Consolidated 30
June 2021
Trade receivables
Consolidated 30
June 2020
Trade receivables
86,015
86,015
55,388
55,388
-
-
-
-
-
-
-
-
86,015
86,015
55,388
55,388
-
-
-
-
86,015
86,015
55,388
55,388
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 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
38 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
61
Notes to the Consolidated Financial Statements
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.
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.
Weighted
average
effective
interest
rate
%
Floating
interest
rate
Within one
year
$
0.01
7,076,580
7,076,580
-
-
-
0.47
8,053,134
8,053,134
-
-
30 June 2021
Financial assets
Cash and
equivalents
cash
Total Financial assets
at 30 June 2021
Trade and other
payables
Financial liabilities
Total
financial
liabilities at 30 June
2021
30 June 2020
Financial assets
Cash and
equivalents
cash
Total Financial assets
at 30 June 2020
Trade and other
payables
Total
financial
liabilities at 30 June
2020
Fixed interest
Non-interest bearing
Within one
year
$
1-5 years
$
Within one
year
$
1-5
years
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,321,361
4,934,817
6,256,178
-
-
1,569,670
1,569,670
-
-
-
-
-
-
-
-
-
7,076,580
7,076,580
1,321,361
4,934,817
6,256,178
8,053,134
8,053,134
1,569,670
1,569,670
39 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
62
Notes to the Consolidated Financial Statements
Trade and other payables and borrowings are expected to be paid as follows:
30 June 2021
Trade and other payables (refer note 13)
Financial liabilities (refer note 14)
30 June 2020
Trade and other payables (refer note 13)
Less than 1
year
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5
years
$
1,321,361
4,934,817
6,256,178
1,569,669
1,569,669
-
-
-
-
-
-
-
-
-
-
-
-
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 $US GBP£ and Sri
Lankan Rupee.
Sensitivity analysis
The following table does not include intra group financial assets and liabilities. It
summaries the sensitivity of the Group’s financial assets and liabilities to external parties at
30 June 2021 to foreign exchange risk, based on foreign exchange rates as at 30 June 2021
and sensitivity of +/-5%:
30 June 2021
rate (cents)
0.7501
0.5434
149.34
US$/A$
GBP/A$£
LKR/A$
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THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
Notes to the Consolidated Financial Statements
63
Foreign exchange risk
2021
$
(49,021)
49,021
2020
$
(100,732)
100,732
(49,021)
49,021
(100,732)
100,732
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 10 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
2021
$
-10bps
Profit
Equity
Profit
Equity
+10bps
Interest rate risk
7,076,580
7,076,580
(6,624)
(6,624)
2020
$
8,053,134
8,053,134
(7,830)
(7,830)
-
-
-
-
6,624
6,624
7,830
7,830
-
-
-
-
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Notes to the Consolidated Financial Statements
((cc))
NNeett ffaaiirr vvaalluueess
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 2021
30 June 2020
Carrying
amount
$
85,815
85,815
Net fair
value
$
85,815
85,815
Carrying
amount
$
65,568
65,568
Net fair
value
$
65,568
65,568
13
14
1,321,361
4,934,817
6,256,178
1,321,361
4,934,817
6,256,178
1,569,670
-
1,569,670
1,569,670
-
1,569,670
Assets carried at amortised cost
Trade and other receivables
Total financial assets
Liabilities carried at amortised cost
Trade and other payables
Financial liabilities
Total Financial Liabilities
Fair value hierarchy
The Group classified the fair value of the financial instruments in the table below according
to the fair value hierarchy based on the amount of observable inputs used to value the
instruments:
• Level 1 – values based on unadjusted quoted prices available in active markets for
identical assets or liabilities as of the reporting date.
• Level 2 – values based on inputs, including quoted prices, time value and volatility
factors, which can be substantially observed or corroborated in the marketplace.
Prices in Level 2 are either directly or indirectly observable as of the reporting date.
• Level 3 – values based on prices or valuation techniques that are not based on
observable market data.
Fair value measurement using:
Note
Total
$
Level 1
$
Level 2
$
Level 3
$
Financial liabilities measured at
fair value - 2021
Convertible liabilities
Total financial assets
14
4,934,817
4,934,817
-
-
4,934,817
4,934,817
-
-
There were no transfers between Level 1, Level 2 and Level 3 during 2021. There is no
comparative balances reported in 2020.
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THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
65
Notes to the Consolidated Financial Statements
16.
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
Movements in shares on issue
At the beginning of the period
Exercise of options
Shares issued to employees
Entitlement issue
Shares issued to third party
Share issue costs
At the end of the period
(b)
Share options
Listed share options
At the beginning of the period
Options issued
Options exercised
At the end of the period
Share options
(c)
Unlisted share options
At the beginning of the period
Options issued
Options exercised
At the end of the period
2021
$
98,808,042
2020
$
95,778,819
2021
Number
539,900,237
2020
Number
525,667,829
95,778,819
2,197,825
67,375
898,000
129,000
(262,977)
98,808,042
85,068,406
4,341,498
52,500
6,575,695
-
(259,280)
-
95,778,819
525,667,829
9,636,632
275,000
3,821,276
500,000
539,900,237
445,849,952
28,885,129
350,000
50,582,248
-
-
-
525,667,829
2021
Number
107,471,898
2020
85,774,779
120,000
50,582,248
(6,636,632)
100,955,266
(28,885,129)
107,471,898
2021
Number
2020
Number
15,000,000
5,000,000
5,000,000
10,000,000
(3,000,000)
17,000,000
-
15,000,000
Refer note 17 for further details on share options issued.
Performance rights
(d)
Unlisted performance rights
At the beginning of the period
Performance rights issued
Performance rights converted
At the end of the period
2021
Number
2020
Number
-
120,000
-
120,000
-
-
-
-
Refer note 17 for further details on performance rights issued.
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Notes to the Consolidated Financial Statements
17. 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.
Share based payment expense
The Group recognised total share-based payment expenses as follows:
Shares issued to employees
Option issued to employees
Performance rights issued to employees
Shares issued to Advisors
Options issued to directors
Total
Shares Issued to Employees
2021
$
67,375
216,555
6,900
128,500
-
419,330
2020
$
52,500
63,707
-
-
649,056
765,263
On 23 December 2020, the Company issued 275,000 shares at a nominal value of $0.245
per share to various employees. The total of $67,375 has been expensed.
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.
Outstanding 1 July
Issued
Exercised
Traded / Sold
Lapsed
Outstanding 30 June
2021
2020
Number of
Options
37,050,000
5,000,000
(3,000,000)
(1,419,096)
-
37,630,904
Weighted
average
exercise price
(cents)
21.1
25.0
18.0
25.0
-
21.6
Number of
Options
27,500,000
10,000,000
(450,000)
-
-
37,050,000
Weighted
average
exercise price
(cents)
15.5
25.0
15.0
-
-
21.1
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67
Notes to the Consolidated Financial Statements
Share-based payments – Options issued
The table below summarises options granted to directors, employees and consultants
under the Share Option Plan:
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
26 Feb
2022
8 Nov
2023
8 Nov
2023
8 Nov
2023
8 Aug
Unlisted options:
26 Feb
2019
8 Nov 2019
6 Jan 2020
17 Dec
2020
Listed options:
31 Oct
2017
24 Nov
2017
23 May
2018
14 May
2019
$0.18
5,000,000
-
(3,000,000)
$0.25
9,000,000
$0.25
1,000,000
-
-
$0.25
-
5,000,000
2021 Various
1,550,000
8 Aug
2021 Various 17,000,000
8 Aug
2021 Various
3,000,000
8 Aug
2021 Various
500,000
-
-
-
-
-
-
-
-
2,000,000
2,000,000
9,000,000
9,000,000
1,000,000
1,000,000
5,000,000
-
-
1,550,000
1,550,000
-
17,000,000
17,000,000
-
-
3,000,000
3,000,000
500,000
500,000
-
-
-
-
-
-
-
The weighted average remaining contractual life of the options is 0.98 years (2020: 1.79 years).
The issue of unlisted options to the Chief Executive Officer (CEO Options) was approved at
the Board of Directors on 17 December 2020.
Using the Black Scholes option pricing model and based on the assumptions set out
below, the CEO Options were ascribed the following value:
Assumptions:
Valuation date
Market price of shares
Exercise price
17 December 2020
$0.245
$0.250
Expiry date (length of time from issue)
8 November 2023 – 2.89 years
Risk free interest rate
Volatility
Indicative Value of CEO Options (cents)
Number of options issued
Total Value of CEO Options
Vested to date
0.25%
75%
0.11581
5,000,000
$579,069
$216,555
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FGR ANNUAL REPORT FY2021ASX:FGR l
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Notes to the Consolidated Financial Statements
2,000,000 of the options will vest on the first anniversary of employment and 3,000,000 of
the options will vest on the second anniversary of employment, subject to the CEO
remaining in the employ of First Graphene Limited or any entity associated with First
Graphene Limited.
Share-based payments – Performance rights issued
The following performance rights were granted to employees:
Employee
Aditya Asthana
Todd McGurgan
Date of
Grant
Number of
Performance
Rights
60,000 07/04/2021
60,000 12/04/2021
120,000
Share
Price A$
Value
A$
Vesting
Date
0.21
0.25
12,600 22/03/2022
15,000 13/04/2022
27,600
Total vesting expense was recognised in the current year of $6,900. Vesting of these
performance rights is based on completing 12 months of continuous service.
18. 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.
19. 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 intangible asset
Write back/impairment of inventory
(Gain)/loss on sale of property, plant and equipment
Share based payments expensed
Options expensed
Shares issued to employees as payment for deferred
salaries
Foreign exchange loss/(gains)
Changes in assets/liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventory
(Increase)/decrease in prepayments
Decrease in other assets
(Decrease)/increase in trade and other payables
Net cash (used in) operating activities
(b) Non-cash investing and financing activities
2021
$
2020
$
(6,284,757)
(5,366,149)
76,153
18,075
250,000
(4,680)
(15,759)
419,831
-
-
(10,767)
(20,447)
(1,364,264)
(129,516)
7,040
(15,867)
(7,074,958)
245,165
27,624
-
46,800
(1,886)
52,500
712,763
152,025
10,049
116,682
(1,034,700)
(66,177)
-
365,950
(4,739,354)
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69
Notes to the Consolidated Financial Statements
There were no non-cash investing and financing activities during the reporting period.
20. Commitments
The Group has no commitments which are not recorded on the statement of financial
position as at 30 June 2021. (2020: Nil).
21. 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
Right of use asset
Intercompany loans receivable
Inventory
Investment in subsidiaries
Investment
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee liabilities
Lease Liabilities
Total current liabilities
Non-current liabilities
Lease Liabilities
Total non-current liabilities
Total liabilities
2021
$
6,598,192
56,368
1,152,872
687,442
8,494,874
2,630,599
342,590
-
3,528,896
650,000
220,805
7,372,890
15,867,764
6,030,222
132,190
196,213
6,358,625
163,084
163,084
6,521,709
2020
$
7,621,249
55,388
1,601,522
320,742
9,598,901
2,246,962
219,067
-
1,009,201
650,000
215,102
4,357,454
13,956,355
1,408,068
63,221
72,791
1,544,080
152,999
152,999
1,697,079
Net Assets
9,346,055
12,259,276
Equity
Issued capital
Share based payments reserve
Other reserves
Accumulated losses
Total equity
Results of the parent entity:
Loss for the period
98,808,042
5,639,623
-
(95,101,610)
9,346,055
95,778,818
5,416,167
467,202
(89,402,911)
12,259,276
(6,165,899)
(6,165,899)
(5,240,662)
(5,240,662)
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FGR ANNUAL REPORT FY2021ASX:FGR l
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Notes to the Consolidated Financial Statements
22. Events since the end of the financial year
Although the Group cannot fully estimate the length or gravity of the COVID-19 effect, from
its initial assessment, it is expecting to be able to continue as a going concern.
No other matters or circumstances have arisen since the end of the financial year which
significantly affected or may significantly affect the operations of the Group, the results of
those operations, or the state of affairs of the Group in subsequent financial years.
23. Related party transactions
Compensation for key management personnel
The key management personnel compensation included in employee benefits expense
(note 4) and share-based payments (note 17), is as follows:
Short term employee benefits
Share based payments
Transactions with other related parties
There were no loans to/from related parties in 2021 (2020: Nil)
Subsidiaries
2021
$
2,220,138
219,706
2,439,844
2020$
1,589,338
712,763
2,302,101
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
2020
2021
Class of
shares held
Place of
Incorporation
First Graphene (UK) Ltd
Graphene sales
and 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
Graphene Mining
and exploration
Development and
sale of VFD, TTF
and other 2D
devices and
materials
100%
100%
Ordinary
Sri Lanka
66.67%
66.67%
Ordinary
Australia
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7 1
Notes to the Consolidated Financial Statements
24. 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
-
2021
$
44,776
50,454
95,230
2020
$
44,583
33,794
78,377
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Directors’ Declaration
The Directors declare:
1.
the financial statements and notes, as set out on pages 36 to 71 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 2021 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
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 27 to 33 as the
audited Remuneration Report) comply with section 300A of the Corporations Act
2001;
3.
4.
5.
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
Michael Bell
Managing Director
30 August 2021
50 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
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
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
73
INDEPENDENT AUDITOR'S REPORT
To the members of First Graphene Limited
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
Report on the Audit of the Financial Report
Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
Opinion
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
We have audited the financial report of First Graphene Limited (the Company) and its subsidiaries (the
to the financial report, including a summary of significant accounting policies and the directors’
Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
declaration.
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
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
to the financial report, including a summary of significant accounting policies and the directors’
Act 2001, including:
declaration.
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
(i)
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
financial performance for the year ended on that date; and
Act 2001, including:
(ii)
(i)
Basis for opinion
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
(ii)
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Basis for opinion
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
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
Report section of our report. We are independent of the Group in accordance with the Corporations
ethical responsibilities in accordance with the Code.
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
We confirm that the independence declaration required by the Corporations Act 2001, which has been
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
given to the directors of the Company, would be in the same terms if given to the directors as at the
ethical responsibilities in accordance with the Code.
time of this auditor’s report.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
given to the directors of the Company, would be in the same terms if given to the directors as at the
for our opinion.
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO Audit (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.
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.
51 | P a g e
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FGR ANNUAL REPORT FY2021ASX:FGR l 74
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.
Valuation of Inventory
Key audit matter
How the matter was addressed in our audit
The Group’s inventory, as disclosed in Note 9 to
the financial report, was a key audit matter as
the inventory costing and net realisable value
(“NRV”) calculations require significant estimates
and judgements.
The determination of NRV of the inventory
requires management’s judgement in relation to
estimating future selling prices, future processing
costs and related selling costs.
Our audit procedures included, but were not
limited to:
assessing the NRV of inventory against the
requirements of the Australian Accounting
Standards, including comparing managements
estimated future selling prices to customer
contracts in place at year end;
testing on a sample basis, the reasonableness
of the costs capitalised into inventory against
the requirements of Australian Accounting
Standards;
observing the year end stocktake process and
undertaking our own test counts; and
assessing the adequacy of the related
disclosures in Note 9 to the financial report.
Other information
The directors are responsible for the other information. The other information comprises the information
contained in annual report for the year ended 30 June 2021, 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, 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.
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THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE 75
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, 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.
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:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
53 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l 76
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 10 to 16 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of First Graphene Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 30 August 2021
54 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE 77
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 24 August
2021.
a) Distribution of Shareholdings – Fully Paid Ordinary Shares:
Size of Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number of Shareholders
164
1,456
995
2,112
515
5,242
Equity Security
Fully Paid ordinary shares
Options
Quoted
549,720,986
0
Number of Share
30,996
4,868,525
7,973,035
74,315,806
462,532,324
549,720,986
Unquoted
0
15,300,000
55 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
78
Additional Securities Exchange Information
b)
Top 20 Security Holders – Fully Paid Ordinary Shares (FGR) at 24 August 2021
PPoossiittiioonn HHoollddeerr//GGrroouupp NNaammee
NNuummbbeerr ooff
SShhaarreess
%%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
120,167,300
21.86%
TWYNAM INVESTMENTS PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
GREGORACH PTY LTD
BUILDING ON THE ROCK LIMITED
IPS Holdings
DEBT MANAGEMENT ASIA CORPORATION
BNP PARIBAS NOMS PTY LTD
22,447,082
4.08%
20,972,025
3.81%
18,463,451
3.36%
15,905,946
2.89%
15,781,850
13,828,400
2.87%
2.52%
11,696,267
2.13%
8,967,971
1.63%
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
7,335,253
1.33%
GINGA PTY LTD
HALLIDAF MANAGEMENT LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
WILLIAM TAYLOR NOMINEES PTY LTD
BISSAPP SOFTWARE PTY LTD
IPS NOMINEES LIMITED
MS FADILLAH BURHAN HASIBUAN
MR RICHARD HOPETOUN BITCON
MR RYAN JEHAN ROCKWOOD
6,771,374
6,704,274
5,519,866
1.23%
1.22%
1.00%
4,465,959
0.81%
3,325,056
0.60%
3,259,611
0.59%
3,089,230
2,860,000
2,500,000
2,000,000
0.56%
0.52%
0.45%
0.36%
20
MR GREGORY JOHN KEIR
Total
296,060,915
53.86%
Total Issued Capital
549,720,986
100.00%
Shareholders with less than a marketable parcel
At 24 August 2021, there were 526 shareholders holding less than a marketable parcel of
shares ($0.21 cents on this date) in the Company totalling 743,893 ordinary shares. This
represented 0.1% of the issued capital.
56 | P a g e
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE
79
Additional Securities Exchange Information
c)
Licence Position as at 24 August 2021
All granted licences are in good standing and comply with the reporting requirements
of the relevant licence.
Licence Number
IML/A/HO/9405/R/2
IML/A/HO/8416/R4
EL/225/R3
EL/228/R3
EL/243/R3
EL/321/R1
EL/227/R3
EL/262/R2
EL/325/R1
EL/326/R1
FGR Interest - %
100
100
100
100
100
100
100
100
100
100
Status
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
General Location
Central
Western
Central
Central
Central
Central
South Central
Central
Central
Central
57 | P a g e
FGR ANNUAL REPORT FY2021ASX:FGR l
80
NOTES
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE 81
FGR ANNUAL REPORT FY2021ASX:FGR l 82
THE WORLD’S LARGEST PRODUCER OF PURE GRAPHENE 83
CORPORATE DIRECTORY
Directors
Share Registry
Warwick Grigor
(Non-Executive Chairman)
Dr Andy Goodwin
(Non-Executive Director)
Michael Quinert
(Non-Executive Director)
Michael Bell
(Managing Director & CEO)
Company Secretary
Aditya Asthana
Principal Registered Office
in Australia
1 Sepia Close
Henderson WA 6166
+61 1300 6600 448
info@firstgraphene.net
www.firstgraphene.net
Stock Exchange Listings
Automatic Registry Services
Level 2, 267 St Georges Terrace
Perth WA 6000
All security holder correspondence to:
PO Box 2226
Strawberry Hills NSW 2021
Contact:
1300 288 664 (within Australia)
+61 (0)8 9324 2099 (outside Australia)
hello@automatic.com.au
www.automatic.com.au
Solicitors - Australia
Steinepreis Paganin
Lawyers and Consultants
Level 4, The Read Buildings
16 Milligan Stret
Perth WA 6000
EMK Lawyers
Suite 1, 519 Stirling Hwy
Cottesloe WA 6011
The Company is listed on the Australian Securities
Exchange under the trading code FGR.
PO Box 103
Cottesloe WA 6011
The company is quoted on the Frankfurt Stock
Exchange under the trading code FSE:M11.
The Company is quoted on the OTCQ8 market in the
USA under the trading code FGPHF.
Auditor
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6000
Bankers - Australia
Westpac Banking Corporation
Level 6, 109 St Georges Terrace
Perth WA 6000
FGR ANNUAL REPORT FY2021ASX:FGR l
Contacts
EUROPE
Global R&D & Marketing
Graphene Engineering & Innovation Centre
The University of Manchester
Sackville Street, Manchester
M13 9PL, United Kingdom
+44 (0)161 826 2350
info@firstgraphene.net
AUSTRALIA
Corporate Headquarters & Manufacturing Plant
1 Sepia Close
Henderson WA 6166
+61 1300 660 448
info@firstgraphene.net
FIRSTGRAPHENE.NET