ANNUAL
REPORT
FOR THE YEAR ENDED
31 DECEMBER 2023
Fertoz limited | 1
ANNUAL REPORT CORPORATE
DIRECTORY
DIRECTORS
Mr. Stuart Richardson Non-Executive Chairman
Mr. Greg West Non-Executive Director
Mr. Daniel Gleeson Managing Director
Mr. Patrick Avery Non-Executive Director (Resigned 5 May 2023)
COMPANY SECRETARY
Ms. Leah Pieris (Appointed 12 October 2023)
Mr. Max Crowley (Resigned 22 March 2024)
Ms. Nova Taylor (Resigned 12 October 2023)
REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS
Level 5, 126 Phillip Street,
Sydney NSW 2000
SHARE REGISTER
Automic Pty Ltd
Level 5, 126 Phillip Street,
Sydney NSW 2000
AUDITOR
Moore Australia Audit (WA)
Level 15
Exchange Tower
2 The Esplanade, Perth WA 6000
BANKERS
Commonwealth Bank
of Australia Ltd
STOCK EXCHANGE
Fertoz Limited shares are listed on
the Australian Securities Exchange
(ASX code: FTZ)
WEBSITE
www.fertoz.com
2 | Fertoz limited
CONTENTS
Corporate Directory
Chairman’s Message
Review of operations
Directors’ Report
Auditor’s Independence Declaration
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder information
2
4
6
9
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34
35
36
37
38
71
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78
Fertoz limited | 3
annual report 2023
CHAIRMAN’S MESSAGE
Dear Fellow Shareholders,
I am pleased to present the 2023 Annual Report for Fertoz
Limited (ASX: FTZ) and provide an overview of our activities
for the financial year ended December 2023.
Unfortunately, the past 12 months presented Fertoz with
several frustrating challenges, including permit renewal
issues in Canada which impacted sales of rock phosphate;
delayed production from the Ferify™ plant; and lower
phosphate sales in the USA due to manufacturers’ delays.
Fertoz will continue to:
•• Target a USA partner for Ferify™,
importantly
providing sufficient working capital to fund the
Ferify™ operation.
••
Progress applications submitted for Fernie and Wapiti
regions of Canada for four mine permits totalling
150,000 tonnes of rock phosphate.
However, these issues are now largely resolved and in the
interim, Fertoz has materially reduced its headcount and
ongoing operating costs for North American operations.
•• Continue to maintain rigorous cost control, operating
Fertoz with a small professional team and a focus on
positive cash flow generation.
Our revised operating cost base would see Fertoz
cashflow positive in FY2024 assuming the following;
Permits granted in June/September
2024 quarters to mine rockphosphate
for Canadian rock phosphate leases.
FertifyTM sales achieving
budgeted sales IH 2024.
USA fertiliser manufacturing
customers ordering rock phosphate
volumes in line with indications.
Our focus on carbon remains unchanged since our March
2024 Quarterly Report, in that we will:
• • Utilize consultants to measure and report the Ferify™
carbon intensity score. This is anticipated to materially
improve demand for Ferify™ product compared to
synthetic fertiliser application.
•• Continue to advance discussions with a potential
Philippine partner to fund a minimum of 60% of the
proposed reforestation project. All expenditure on the
reforestation project is on hold, pending securing this
partner.
In closing, 2023 was a challenging and frustrating year for
our Company and our shareholders.
During 2023, Fertoz secured $1.23 million via a convertible
note issue in November and an unsecured director’s loan (12
months) for $300,000 (ASX 29.9.23). Fertoz looks forward to a
solid 1H sales performance selling inventory on hand.
Fertoz’s focus in 2024 will be on producing positive cashflow
from operations. Material
improvements to production
processes will improve gross margins on the 2023 result.
4 | Fertoz limited
Fertoz remains very focused on the Noth American
phosphate operations with ever increasing awareness of
regenerative agricultural practices, resulting in continuous
enquiry for Fertoz rock phosphate. Inventory remains
available for sale in the USA meaning no requirement
for further mining activities in 2024. Securing Canadian
mining permits by mid-2024 is critical to meet demand
for Canadian customers for rock phosphate. We now
have positive and constructive communications with the
Ministry of Energy, Mines and Low Carbon Innovation and
remain confident of receiving mine permits in 2024.
We are preparing for the 2024 phosphate selling
season and generating sales with improved margins
and cashflow generation. Our Board and management
continue discussions with potential partners for both
Ferify™ (USA) and Philippines (reforestation) that would
inject critical working capital to those businesses.
I like to thank our supportive shareholders and note that
the board and management are forecasting solid sales
improvements in 2024 and positive cashflow resulting
from this.
Thank you also to my fellow Directors and our Managing
Director Daniel Gleeson, as well as key personnel who
continue to work diligently to execute the business plan
on behalf of shareholders.
I look forward to providing further updates of progress on
all initiatives at the Fertoz AGM in May 2024.
Yours sincerely
Stuart Richardson
Chairman
Fertoz Limited
Successfully launched Fertify™ all-in-one
NPKS fertiliser pellet product, with the
plant reaching nameplate capacity of
40,000tpa in October 2023
First deliveries of Fertify™ commenced,
with product integrity and quality highly
regarded by the market due to its ease
of transit, storage and application
Achieved global rock phosphate
sales of $3.05 million, with Group
gross margin increasing from 4.5%
in 2022 to 23% in 2023
Four mining permit applications submitted
for Fernie and Wapiti regions of Canada,
totalling 150,000 tonnes of rock phosphate
targeted for sale in 2024, post approval
More than 4,000 tonnes of crushed and
screened product inventory stored for
winter and early spring sales
Advancing discussions with a potential
Philippine partner on proposed
reforestation project
Scaled down headcount and
expenditure to meet ongoing
operational requirements
Positioned Fertoz to achieve cashflow
positive operations in 2024.
HIGHLIGHTS
Fertoz limited | 5
Fertoz limited | 5
ANNUAL REPORT
REVIEW OF
OPERATIONS
OVERVIEW
Fertify™
Fertoz launched its NPKS pellet, Fertify™, to increase sales of
its rock phosphate in the USA. Fertoz developed the plant in
a joint operation with Montana-based Excel Industries after
identifying an opportunity to combine resources to deliver a
regenerative and organic all-in-one NPKS pellet to farmers
across North America.
Fertoz is a sustainable land management company
that aims to become a leading supplier of regenerative
phosphate fertilizers in North America and a profitable
marketer of organic fertilizer products in Australia.
As a premium fertilizer provider that specializes in
sustainable phosphate-based products, Fertoz
is
advancing its mining projects in the Wapiti and Fernie
area of Canada, where it holds large, high-quality
deposits of organic rock phosphate. In addition to this,
Fertoz continues to secure long-term contracts for rock
phosphate mines in the USA (Montana) and Mexico
(Monterrey) to ensure consistent, high-quality supply
throughout western North America.
In 2023, Fertoz launched its Fertify™ all-in-one NPKS
(nitrogen, phosphorous, potassium, sulphur) fertilizer
pellet to service the growing demand for sustainable and
regenerative options in North America.
In addition, Fertoz also distributes fused magnesium
calcium silicate phosphate in Australia, New Zealand and
the Philippines. The product is imported from Vietnam.
Figure 1: Fertoz’s FertifyTM pelleting plant in Montana, USA
Fertoz is also developing premium carbon credits from
nature-based projects primarily focused on reforestation
opportunities and lower carbon input fertilizers.
The plant commenced production in Montana, USA, in August
2023 and reached nameplate capacity (40,000tpa) in early
October 2023.
Collectively, both operations drive the Group towards
its mission of reducing carbon greenhouse gases and
improving soil health to benefit future generations.
6 | Fertoz limited
6 | Fertoz limited
First deliveries of FertifyTM commenced in August, with
product integrity and quality highly regarded by the market
due to minimal dust or breakdown of the product in transit,
storage or application. Awareness continued to grow as the
product moved onto farms, following a long and positive
season in and around Montana, where the plant is based.
Fertoz also invested in significant marketing efforts, including
a multitude of conferences and conventions, for increased
brand visibility across North America, with growers, retailers,
and agronomists.
Fertoz expects to increase production towards nameplate
capacity as demand increases for spring 2024, which is when
~70% of fertilizer applications are made in its target markets.
Fertoz invested A$1.9M in the plant, along with an additional
A$680,000 in costs to prepare for the spring sales in 2024.
These start up costs were expensed in 2023 towards
marketing and selling costs, hence the increase compared
with 2022, but will be recovered through spring sales in 2024.
ANNUAL REPORT Rock Phosphate
Fertoz’s global sales of rock phosphate in 2023 reached
$3.05M (including phosphate mined in Alberta, Canada),
a reduction of 30% in comparison to 2022. This was driven
by a reduction of $1.0M in sales in Australia due to reduced
demand and limited supply from Canada mines which
forced supply from the USA in 2023 for our Canadian
customers, negatively impacting sales and gross margin due
to increased freightcost by an additional $135/tonne.
Positively, Group gross margin increased from 4.5% in 2022
to 23% in 2023, driven largely by sales price increases and
a more cost-effective processing strategy implemented in
2023.
Despite these challenges, continued growth of rock
phosphate to manufacturers in North America reflects the
acceptance of our customers products in the market and
therefore our high-grade organic rock phosphate. This
includes new customers who look to value add using Fertoz
rock phosphate with the inclusion of sulfur, organic matter,
gypsum, calcium, etc. This growth reflects a 3 - 4-year
development phase that is required to reach scale. This
growth will continue into 2024 with USA owned fertilizer
manufacturers qualifying for the distribution of grants
in the
totalling US$500M for fertilizer manufacturing
USA that supports regenerative and sustainable fertilizer
manufacturing.
The slower than forecast demand in Australia was due to
delayed growth in the home garden market, impacted
cattle grazing sector due to lower beef prices and the loss
of two main distributors. However, the Australian business
continued to make a small profit due to tight cost control and
increased gross margin from reduced shipping costs.
Fertoz’s Mining & Operations continued to evolve, with the
appointment of Dylan Treadwell as Mining & Operations
Manager. He has maintained a strong focus on cost control,
helping to reduce mining and processing costs overall, as
well as targeting the most cost effective and accessible
locations for permitting and using key consultants to support
the process. He has also greatly improved the clarity around
the permit application process in Canada that should help to
accelerate the multiple permits under review currently.
Fertoz is targeting 150,000 tonnes of rock phosphate permits
in 2024, which would vastly improve supply challenges within
Canada where only limited volumes (<2,000 tonnes) were
mined in 2023, and Fertoz required imported product from
its USA locations, which negatively impacted margins, due to
freight considerations mentioned already.
Fertoz has more than 4,000 tonnes of crushed and
screened rock phosphate product stored in inventory for
sales throughout winter and early spring, an achievement
the company has not reached on any scale previously. In
addition, there are more than 10,000 tonnes ready for
screening or crushing at its Butte facilities in various finished
formats, with a sales value of more than A$2.5M. This
positions Fertoz with adequate inventory for early season
sales in 2024. In addition to this, there are significant volumes
of rock phosphate stockpiled in Montana on which the
company can draw down.
Carbon
Fertoz continues to advance
in
reforestation and agriculture as demand for high quality
nature-based credits remains strong.
its carbon projects
Its carbon focus has been narrowed to three areas:
Continue to sell fertilizers in North America and
Australia, with a low carbon footprint i.e. rock
phosphate and fused magnesium calcium silicate
phosphate, respectively.
Promote the benefits of the low carbon intensity
score of Ferify™ to growers and biofuel plants as
a way of increasing fertilizer sales.
Continue reforestation in the Philippines by seeking
a local investor to fund a minimum of 60% of its
reforestation projects in the Philippines.
This is to ensure compliance with Philippine Foreign
investment laws for development of a natural resource.
Discussions have advanced with a prospective investor
capable of funding large scale reforestation projects over
several years.
Safety
There were no lost time injuries or environmental incidents
recorded during the year ended 31 December 2023.
Fertoz limited | 7
ANNUAL REPORT Outlook for 2024
Fertoz expects to deliver significant operating and cashflow
improvements in FY 2024 as the growth of its manufacturing
customers continues to increase following positive response`s
to Fertoz supplied rock phosphate with growers and retailers
in 2023. These major customers of Fertoz have begun to reach
a size of scale whereby they are becoming well recognised in
the industry for the products they offer and the success they
can provide. Many of them have invested into product mix,
farm-based trials and sales and marketing spend that has
taken at least four to five years of development. In addition
to these existing customers, more parties are beginning to
recognise the demand for sustainable and non-chemical-
based farm inputs. Fertoz expects further new entrants in the
North American market will follow a very similar trajectory
with regards to strategy and growth and provide an ever-
growing customer base for Fertoz rock phosphate. These
companies will take time to develop, but with the industry
adoption moving faster than historically noted, Fertoz
expects them to reach a scale of importance more rapidly
than previously. Hence, Fertoz expects sales to increase
materially in 2024 compared to FY 2023.
Fertoz also expects its efforts and investment into Ferify™
in 2023 to be reflected in the growth of sales. As has been
the case for manufacturing customers, this will take time to
develop, but the industry is at a turning point where scale can
be accelerated.
This requires working at the grower, retailer, and wholesaler
level to create the market demand. Fertoz expects sales to
exceed 4,000 tonnes this spring at a revenue value of more
than A$2.0M.
In addition to improving sales in 2024, Fertoz has also
addressed the human capital needs for sound business
execution. As such, it is expected that payroll expense will
reduce by more than A$750,000 for 2024, whilst exploration
spend will also reduce significantly as focus remains on
approved permitting for 150,000 tonnes in 2024 via four
separate permits. These include two targeting bulk sample
campaigns for 20,000 tonnes collectively and a small
industrial mines permit for 130,000 tonnes. The two bulk
samples will support further knowledge on expansion into
industrial mine permits as a next step.
in rock phosphate and Ferify™
With expected growth
sales and rigorous management of costs this will support
delivery of a cash flow positive year. Achievement of this
goal was delayed in 2023 but Fertoz is positioned to deliver
improvement on its past financial results. It is critical that
Fertoz can supply Canadian customers from Canada as
much as possible (subject to permits granted), improving
gross profit levels, whilst increasing sales volumes a key
requirement to improving group cashflows.
8 | Fertoz limited
ANNUAL REPORT DIRECTORS’
REPORT
AS OF 31 DECEMBER 2023
Fertoz limited | 9
ANNUAL REPORT The directors present their report, together with the audited financial statements, on the consolidated entity (referred
to hereafter as the 'consolidated entity') consisting of Fertoz Limited (referred to hereafter as the 'company' or 'parent
entity') and the entities it controlled at the end of, or during, the year ended 31 December 2023.
DDiirreeccttoorrss
The following persons were directors of Fertoz Limited during the whole of the financial period and up to the date of
this report, unless otherwise stated:
M r. S tua rt Richa rdson
M r. Pa trick A very (resigned 5 M a y 2023)
M r. G reg West
M r. Da niel G leeson
PPrriinncciippaall aaccttiivviittiieess
The Company’s key objective is to become a leading provider of sustainable agricultural fertilizer inputs for North
America and Australia, as well as a global supplier/developer of nature-based carbon projects.
DDiivviiddeennddss
There were no dividends paid, recommended, or declared during the current period or previous year.
FFiinnaanncciiaallss
The loss for the consolidated entity after providing for income tax amounted to $4,475,098 (2022: $4,215,190).
Sales for the year ended 31 December 2023 were 22% lower than the previous year, $2,785,863 (2022: $3,556,807), whilst
gross margin increased from 4.5% to 23% in 2023. This was despite $680,000 of investment towards Fertify inventory
expensed in 2023 for sales that will occur in early 2024. The Group also spent $1,133,264 (2022: $1,085,989) on
exploration during the year.
Current assets total approximately $2,907,123 and include inventory at cost $765,682. This inventory is expected to have
a gross sales value of $1,688,750 and be sold in FY 2024. Current liabilities are $1,047,054. Fertoz has a solid working
capital position for the 2024 year.
The Group loss FY 2023 was $4,475,098. This was impacted by non-recurring items:
•
$680,000 investment towards Fertify inventory was expensed in 2023 for sales that will occur in early 2024.
• An impairment was made on the granulator purchased in 2019 for $441,000 due to significant costs associated
with its construction and concerns over life span and operating capability. This completely writes off the
granulator.
Available cash balance at year-end amounted to $1,695,854 (2022: $2,861,377).
10 | Fertoz limited
DIRECTORS’ REPORT
BBooaarrdd CChhaannggeess
Patrick Avery resigned as an Executive Director on 10 February 2023 and as a Non-Executive Director on 5 May 2023.
Mr Avery had served on the Fertoz Board since 2016 and the Directors thanked him for his contribution and wished him
well for future endeavours.
AAppppooiinnttmmeenntt ooff JJooiinntt CCoommppaannyy SSeeccrreettaarryy
Leah Pieris was appointed as Joint Company Secretary of Fertoz on 12 October 2023. Ms Pieris is a Chartered Company
Secretary and a member of Automic Group, assisting ASX listed, unlisted public and proprietary companies across a
range of industries. She shares the role with Joint Company Secretary Max Crowley. Her appointment followed Nova
Taylor stepping down as Company Secretary.
SShhoorrtt--TTeerrmm LLooaann
Fertoz Non-Executive Chairman Stuart Richardson agreed to provide the Company with a short-term, unsecured loan
of $300,000 on commercial arms’ length terms. The loan was drawn down by the Company on 29 September 2023, with
funds applied towards working capital purposes of the Company.
The material terms of the loan agreement are as follows:
-
-
-
-
Loan amount: $300,000, drawn down immediately.
Loan term: 12 months (requiring repayment by 29 September 2024).
Interest rate: 10% per annum paid quarterly in arrears.
Security: Nil.
The agreement does not include any right to convert the loan to Fertoz shares.
CCoonnvveerrttiibbllee NNoottee IIssssuuee
On 15 November 2023, the Company advised it received binding subscriptions for a total of $1.23 million from the issue of
1,230,000 unlisted Convertible Notes. Proceeds provide working capital and ensure adequate Fertify™ inventory for
Spring sales commencing March 2024.
The Company appointed Blackwood Capital Pty Ltd as Placement Agent and allocated Convertible Notes to clients
residing in Australia. A summary of the material terms are as follows:
- Maturity period of 3 years
- Interest rate of 10% per annum paid quarterly in arrears
- Conversion price of $0.10 per share (adjustable as per ASX Listing Rule requirements)
- At the noteholder’s option, notes can be converted at any time into ordinary shares of the Company at the
conversion price to ordinary shares up to maturity date
- Mandatory conversion by the Company upon maturity (3 years) at the conversion price into ordinary shares
- The face value of the convertible note is $1.00 per convertible note
- Notes may not be sold or transferred prior to the maturity date without the Company’s consent.
The convertible notes are unsecured.
Fertoz limited | 11
DIRECTORS’ REPORT
CCoosstt ccoonnttrrooll
Fertoz continues to manage costs from both a third-party review process as well as a staffing perspective, having
finished the year with seven full-time equivalent staff, a 50% reduction on the previous year. Exploration work will be
kept to a minimum as the focus remains on permitting applications and approvals for the Canadian mines.
SSiiggnniiffiiccaanntt cchhaannggeess iinn tthhee ssttaattee ooff aaffffaaiirrss
During the year ended 31 December 2023, the Group:
(a)
issued 833,334 ordinary shares at an issue price of $0.18 to complete Tranche 2 of the capital raise conducted
in August 2022.
Other than disclosed in this report, in the opinion of the directors there were no significant changes in the state of affairs
of the Company during the financial period under review.
RRiisskk MMaannaaggeemmeenntt
Below summarises the material business risks that the Company considers could impede the achievement of its
future operational and financial success, and which are relevant to the expectations of the directors that the
Company has adequate financial resources to continue as a going concern.
The Company seeks to manage risk to its business through appropriate risk controls and mitigants, however, if any
of the following risks materialize, business, financial condition and operating results are likely to be adversely
impacted. The risks set out below do not constitute an exhaustive list of all risks involved with an investment in Fertoz.
Limited Operating History
Fertoz commenced commercial fertilizer operations in 2012. Accordingly, Fertoz has a relatively limited operating
history from which an investor can evaluate its business and prospects, particularly with respect to its fertilizer
operating segment. Carbon Project development activities are less than three years into the development stage
and therefore considered high risk and still at the early scoping stage. The fertilizer operations have generated
net losses and negative cash flow from operations since the commencement of operations and Fertoz may continue
to incur net losses and negative cash flow from operations for a significant period of time as it expands its operations,
streamlines organic fertilizer production and commercialization with the Fertify brand, and applies for regulatory
permits and approvals associated with any such expansion. The likelihood of the Company’s success must be
considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in
connection with the expansion of a nascent business operating in a competitive industry.
Reliance on key personnel
Fertoz is a development company and will be dependent on its directors, managers and consultants to implement
its business strategy. A number of factors, including the departure of senior management of Fertoz or a failure to
attract or retain suitably qualified key employees, could adversely affect Fertoz’s business strategy.
12 | Fertoz limited
DIRECTORS’ REPORT Capitalization
Fertoz had negative operating cash flow on 31 December 2023 and may continue to have negative operating cash flow
until revenues increase. The Company currently has adequate funds to develop its business, however may require
additional financing (which may include the issuance of equity or debt securities) or other capital investment to
implement its business plan if budgets are not met. The Company has no assurance that additional funding will be
available to carry out the completion of all proposed activities. Although the Company has been successful in the past in
obtaining financing through the sale of securities, there can be no assurance that the Company will be able to obtain
adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional
financing could result in the delay or indefinite postponement of its business plan. If additional funding is required in the
future funds that are raised by offering equity securities may result in existing shareholders suffering significant dilution.
Any debt financing secured in the future could involve the granting of security against assets of the Company and could
also contain restrictive covenants relating to capital raising activities and other financial and operational matters, which
may make it more difficult for the Company to obtain additional capital and to pursue business opportunities, including
potential acquisitions.
Additional Financing
Fertoz will require additional financing in order to make further investments or take advantage of future opportunities
and to grow its business. The ability of Fertoz to arrange such financing in the future will depend in part upon prevailing
capital market conditions, as well as the business success of Fertoz. There can be no assurance that Fertoz will be
successful in its efforts to arrange additional financing on terms satisfactory to Fertoz.
Profitability
There is no assurance that Fertoz will earn profits in the future, or that profitability will be sustained. There is no
assurance that future revenues will be sufficient to generate the funds required to continue Fertoz’s business
development and marketing activities. If Fertoz does not have sufficient capital to fund its operations, it may be
required to reduce its sales and marketing efforts or forego certain business opportunities.
Management of Growth
Fertoz may be subject to growth-related risks including capacity constraints and pressure on its internal systems and
controls. The ability of Fertoz to manage growth effectively will require it to continue to implement and improve its
operational and financial systems and to expand, train and manage its employee base. The inability of Fertoz to deal
with this growth may have a material adverse effect on Fertoz’s business, financial condition, results of operations and
prospects.
Issuance of Debt
From time to time, Fertoz may enter into transactions to acquire assets or seek to obtain additional working capital.
These transactions may be financed in whole or in part with debt, which may increase Fertoz’s debt levels. Depending
on future plans, Fertoz may require additional equity and/or debt financing that may not be available or, if available,
may not be available on favourable terms to Fertoz.
Dilution
Fertoz may make future acquisitions or enter into financings or other transactions involving the issuance of securities of
Fertoz which may be dilutive to the holdings of existing shareholders.
Fertoz limited | 13
DIRECTORS’ REPORT
Price Volatility of Publicly Traded Securities
In recent years, the securities markets globally and specifically Australia where Fertoz is listed (FTZ: ASX) have
experienced a high level of price and volume volatility, and the market prices of securities of many companies have
experienced wide fluctuations in price. There can be no assurance that continuing fluctuations in price will not occur. It
may be anticipated that any quoted market for the Common Shares will be subject to market trends generally,
notwithstanding any potential success of Fertoz in creating revenues, cash flows or earnings. The value of the Common
Shares will be affected by such volatility. A public trading market in the Common Shares having the desired
characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and
sellers of Common Shares at any given time, which, in turn is dependent on the individual decisions of investors over
which Fertoz has no control. There can be no assurance that an active trading market in securities of Fertoz will be
established and sustained. The market price for Fertoz’s securities could be subject to wide fluctuations, which could
have an adverse effect on the market price of Fertoz. The stock market has, from time to time, experienced extreme
price and volume fluctuations, which have often been unrelated to the operating performance, net asset values or
prospects of particular companies. If an active public market for the Common Shares does not develop, the liquidity of
a shareholder’s investment may be limited, and the share price may decline.
Dividends
Fertoz has not paid any dividends on its outstanding shares. Any payments of dividends on the Common Shares will be
dependent upon the financial requirements of Fertoz to finance future growth, the financial condition of Fertoz and
other factors which Fertoz’s board of directors may consider appropriate in the circumstance. It is unlikely that Fertoz
will pay dividends in the immediate or foreseeable future.
Markets for Securities
There can be no assurance that an active trading market in the Common Shares will be established and sustained. The
market price for the Common Shares could be subject to wide fluctuations. Factors such as agriculture commodity
prices, government regulation, the demand for fertilizer, interest rates, share price movements of Fertoz`s peer
companies and competitors, as well as overall market movements, may have a significant impact on the market price
of the securities of Fertoz.
Development of Canadian rock phosphate leases and commercialization of the Fertify pelleting plant
The Company’s ability to successfully develop and commercialize key mining leases located in Canada may be
affected by numerous factors including but not limited to macro-economic conditions, obtaining required approvals,
ability to obtain sufficient funding, customer offtakes, delays in commissioning or ramp up, the mine operations not
performing in accordance with expectations and costs overruns.
Fertoz’s ability to successfully commercialize the Fertify Pelleting Plant may be affected by numerous factors including
but not limited to its ability to secure raw materials and customer offtakes, delays in ramp up, the plant not performing
in accordance with expectations and costs overruns. If the Company is unable to mitigate these factors and others not
listed here, this could result in the Company not realizing its business plan and ultimately, this could have an adverse
impact on the share price.
14 | Fertoz limited
DIRECTORS’ REPORT
Price Volatility of Publicly Traded Securities
In recent years, the securities markets globally and specifically Australia where Fertoz is listed (FTZ: ASX) have
experienced a high level of price and volume volatility, and the market prices of securities of many companies have
experienced wide fluctuations in price. There can be no assurance that continuing fluctuations in price will not occur. It
may be anticipated that any quoted market for the Common Shares will be subject to market trends generally,
notwithstanding any potential success of Fertoz in creating revenues, cash flows or earnings. The value of the Common
Shares will be affected by such volatility. A public trading market in the Common Shares having the desired
characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and
sellers of Common Shares at any given time, which, in turn is dependent on the individual decisions of investors over
which Fertoz has no control. There can be no assurance that an active trading market in securities of Fertoz will be
established and sustained. The market price for Fertoz’s securities could be subject to wide fluctuations, which could
have an adverse effect on the market price of Fertoz. The stock market has, from time to time, experienced extreme
price and volume fluctuations, which have often been unrelated to the operating performance, net asset values or
prospects of particular companies. If an active public market for the Common Shares does not develop, the liquidity of
a shareholder’s investment may be limited, and the share price may decline.
Dividends
Fertoz has not paid any dividends on its outstanding shares. Any payments of dividends on the Common Shares will be
dependent upon the financial requirements of Fertoz to finance future growth, the financial condition of Fertoz and
other factors which Fertoz’s board of directors may consider appropriate in the circumstance. It is unlikely that Fertoz
will pay dividends in the immediate or foreseeable future.
Markets for Securities
There can be no assurance that an active trading market in the Common Shares will be established and sustained. The
market price for the Common Shares could be subject to wide fluctuations. Factors such as agriculture commodity
prices, government regulation, the demand for fertilizer, interest rates, share price movements of Fertoz`s peer
companies and competitors, as well as overall market movements, may have a significant impact on the market price
of the securities of Fertoz.
Development of Canadian rock phosphate leases and commercialization of the Fertify pelleting plant
The Company’s ability to successfully develop and commercialize key mining leases located in Canada may be
affected by numerous factors including but not limited to macro-economic conditions, obtaining required approvals,
ability to obtain sufficient funding, customer offtakes, delays in commissioning or ramp up, the mine operations not
performing in accordance with expectations and costs overruns.
Fertoz’s ability to successfully commercialize the Fertify Pelleting Plant may be affected by numerous factors including
but not limited to its ability to secure raw materials and customer offtakes, delays in ramp up, the plant not performing
in accordance with expectations and costs overruns. If the Company is unable to mitigate these factors and others not
listed here, this could result in the Company not realizing its business plan and ultimately, this could have an adverse
impact on the share price.
Tenements
Currently, Fertoz wholly licenses all exploration tenements required to operate and develop the said exploration assets
in Canada. Renewal of title is made by way of application to the relevant department. There is no guarantee that a
renewal will be automatically granted other than in accordance with the applicable state or territory mining legislation.
In addition, the relevant department may impose conditions on any renewal, including relinquishment of ground.
Exploration risks
Exploration is a high-risk activity that requires large amounts of expenditure over extended periods of time. Fertoz’s
exploration activities will also be subject to all the hazards and risks normally encountered in the exploration of
minerals, including climatic conditions, hazards of operating vehicles and plant, risks associated with operating in
remote areas and other similar considerations. Conclusions drawn during exploration and development are subject to
the uncertainties associated with all sampling techniques and to the risk of incorrect interpretation of geological,
geochemical, geophysical, drilling, and other data.
Mineral Resource and Ore Reserve Estimates
Mineral Resource and Ore Reserve estimates are expressions of judgement based on knowledge, experience and
industry practice. Estimates, which were valid when originally calculated, may alter when new information or
techniques become available. In addition, by their very nature, Mineral Resource and Ore Reserve estimates are
imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information
becomes available through additional fieldwork and analysis, the Mineral Resource and Ore Reserve estimates may
change.
Accordingly, the actual resources and reserves when calculated and reported may materially differ from the existing
estimates and assumptions and no assurances can be given that the Mineral Resource and Ore Reserve estimates and
the underlying assumptions will be realized. This could result in alterations to development and mining/extraction plans
which may in turn affect Fertoz's operations and ultimately Fertoz's financial performance and the value of shares.
Fertilizer Products and Markets
The market for Fertoz’s products is undeveloped and development of such markets will require significant marketing
efforts, working capital and increased sales and marketing staff. This may present difficulties due to limited resources
as the price at which Fertoz may sell its products in commercial quantities continues to be assessed and is subject to
change due to a number of factors. Examples include having to modify its growth strategy as a result of actual or
anticipated competition, customer response, lack of resources, regulatory requirements or other reasons. Operating
results and the price at which Fertoz will be able to sell its products and services will be highly dependent on the
existence of a market for such products and overall farm receipts. Success in marketing and selling products will
depend upon multiple factors, including:
•
•
•
•
•
•
•
the effectiveness of the products.
the ability to source ongoing rock phosphate at an acceptable cost and in compliance with regulatory
requirements.
the ability to generate commercial sales of products.
acceptance of products and services by target markets.
inherent development risks, such as fertilizer products not having the anticipated effectiveness.
the ability to develop repeatable processes to manufacture our products in sufficient quantities; and
general economic conditions.
If any of these factors cannot be overcome, Fertoz may not be able to introduce products to target markets in a timely
or cost-effective manner, which could adversely affect future growth and results. Operating results and the price at
which Fertoz can sell products will be dependent on demand for products. Demand for products will be affected by a
number of factors including weather conditions, commodity prices, and government policies. It is likely that the price at
which Fertoz sells its products will fluctuate if there are significant changes in the price and availability of other fertilizer
products.
Fertoz limited | 15
DIRECTORS’ REPORT
Sales Cycle
Fertoz is affected by seasonality risk due to weather and the potential buying patterns of major customers. Fertoz’s
revenue may therefore be affected by these buying patterns, notably a potential slowdown in sales over the winter and
early spring.
Marketing and Distribution Expertise
Achieving market success will require substantial marketing efforts and the expenditure of funds to inform potential
customers of the distinctive benefits and characteristics of our fertilizer. Fertoz’s long term success will depend on its
ability to expand current marketing capabilities. Fertoz will, among other things, need to attract and retain experienced
marketing and sales personnel. No assurance can be given that Fertoz will be able to attract and retain such personnel
or that any efforts undertaken by such personnel will be successful.
Commodity prices
Fertoz's future prospects and the share price will be influenced by the prices obtained for the commodities produced
and targeted in Fertoz's development and exploration programs. Commodity prices fluctuate and are impacted by
factors including the relationship between global supply and demand for fertilizer, forward selling by producers, costs
of production, geopolitical factors (including trade tensions), hostilities and general global economic conditions.
Commodity prices are also affected by the outlook for inflation, interest rates, currency exchange rates and supply and
demand factors. These factors may have an adverse effect on Fertoz's production and exploration activities and any
subsequent development and production activities, as well as its ability to fund its future activities.
There is no guarantee Fertoz will secure sale contracts for fertilizer products on terms favourable to the Company. The
market prices for fertilizers have been volatile and are influenced by numerous factors and events beyond the control
of the Company.
Product Price and Margin
Operating results are and will be dependent upon product prices and margins, which are in turn dependent on demand
for crop inputs. Demand for crop inputs can be affected by a number of factors including weather conditions, outlook
for crop nutrient prices and farmer economics, governmental policies, access of our customers to credit, and build-up of
inventories in distribution channels. Product price and margins are also significantly influenced by competitor actions
that change overall industry production capacity, such as decisions to build or close production plants, changes in
utilization rates and pricing decisions.
Competition
Fertoz's ability to enter into contracts for the supply of products at profitable prices may be adversely affected by the
introduction of new suppliers and any increase in competition in the global fertilizer market, either of which could
increase the global supply of these products and thereby potentially lower the prices.
Supply chain and counterparty risk
The development and commercialization of Fertoz`s fertilizer operations will involve a complex supply chain. Fertoz will
depend on suppliers of raw materials, services, equipment and infrastructure to develop the operations, and on
providers of logistics to ensure products are delivered. Failure of significant components of this supply chain due to
strategic factors such as business failure or serious operational factors could have an adverse effect on the Company’s
business and results of operations.
Government Regulation
Fertoz’s operations will be subject to a variety of federal, provincial, state and local laws, regulations, and guidelines,
including laws and regulations relating to health and safety, fertilizer management, production and sale of fertilizers,
including for organic farming use, the conduct of operations, the protection of the environment, the operation of
equipment used in operations, the transportation and the import and export of products. Fertoz believes that it is
currently in compliance with such laws and regulations. Fertoz intends to invest financial and managerial resources to
ensure such compliance in the future.
16 | Fertoz limited
DIRECTORS’ REPORT
Fertoz is affected by seasonality risk due to weather and the potential buying patterns of major customers. Fertoz’s
revenue may therefore be affected by these buying patterns, notably a potential slowdown in sales over the winter and
Sales Cycle
early spring.
Marketing and Distribution Expertise
Achieving market success will require substantial marketing efforts and the expenditure of funds to inform potential
customers of the distinctive benefits and characteristics of our fertilizer. Fertoz’s long term success will depend on its
ability to expand current marketing capabilities. Fertoz will, among other things, need to attract and retain experienced
marketing and sales personnel. No assurance can be given that Fertoz will be able to attract and retain such personnel
or that any efforts undertaken by such personnel will be successful.
Commodity prices
Fertoz's future prospects and the share price will be influenced by the prices obtained for the commodities produced
and targeted in Fertoz's development and exploration programs. Commodity prices fluctuate and are impacted by
factors including the relationship between global supply and demand for fertilizer, forward selling by producers, costs
of production, geopolitical factors (including trade tensions), hostilities and general global economic conditions.
Commodity prices are also affected by the outlook for inflation, interest rates, currency exchange rates and supply and
demand factors. These factors may have an adverse effect on Fertoz's production and exploration activities and any
subsequent development and production activities, as well as its ability to fund its future activities.
There is no guarantee Fertoz will secure sale contracts for fertilizer products on terms favourable to the Company. The
market prices for fertilizers have been volatile and are influenced by numerous factors and events beyond the control
of the Company.
Product Price and Margin
utilization rates and pricing decisions.
Competition
Operating results are and will be dependent upon product prices and margins, which are in turn dependent on demand
for crop inputs. Demand for crop inputs can be affected by a number of factors including weather conditions, outlook
for crop nutrient prices and farmer economics, governmental policies, access of our customers to credit, and build-up of
inventories in distribution channels. Product price and margins are also significantly influenced by competitor actions
that change overall industry production capacity, such as decisions to build or close production plants, changes in
Fertoz's ability to enter into contracts for the supply of products at profitable prices may be adversely affected by the
introduction of new suppliers and any increase in competition in the global fertilizer market, either of which could
increase the global supply of these products and thereby potentially lower the prices.
Supply chain and counterparty risk
The development and commercialization of Fertoz`s fertilizer operations will involve a complex supply chain. Fertoz will
depend on suppliers of raw materials, services, equipment and infrastructure to develop the operations, and on
providers of logistics to ensure products are delivered. Failure of significant components of this supply chain due to
strategic factors such as business failure or serious operational factors could have an adverse effect on the Company’s
business and results of operations.
Government Regulation
Fertoz’s operations will be subject to a variety of federal, provincial, state and local laws, regulations, and guidelines,
including laws and regulations relating to health and safety, fertilizer management, production and sale of fertilizers,
including for organic farming use, the conduct of operations, the protection of the environment, the operation of
equipment used in operations, the transportation and the import and export of products. Fertoz believes that it is
currently in compliance with such laws and regulations. Fertoz intends to invest financial and managerial resources to
ensure such compliance in the future.
Although such expenditures historically have not been material, such laws or regulations are subject to change.
Accordingly, it is impossible for the Company to predict the cost or impact of such laws and regulations on its future
operations. If Fertoz is unable to comply with current or future government regulations of its products and production
activities, Fertoz may be forced to discontinue production of current or future products. Each product that is developed,
produced, marketed, or licensed presents unique regulatory problems and risks. The problems and risks depend on the
product type, its uses, and method of manufacture. For products used in human nutrition, Fertoz will be required to
adhere to requirements published by the CFIA, USDA, the International Organization for Standardization (“ISO”), and
other applicable standards.
Operating Risks and Insurance
Fertoz’s operations will be subject to hazards inherent in the fertilizer manufacturing and sale of products, such as
labour disruptions and unscheduled downtime, equipment defects, malfunctions and failures, loss of product in
processing, and natural disasters, that can cause personal injury, loss of life, suspension of operations, damage to
plants, business interruption and damage to or destruction of property, equipment and the environment. These risks
could expose Fertoz to substantial liability for personal injury, wrongful death, property damage, pollution, and other
environmental damages and the imposition of civil or criminal penalties. The frequency and severity of such incidents
will affect operating costs, insurability and relationships with customers, employees and regulators. In the event of
equipment defects, malfunctions or failures, there can be no assurance that supplier warranties will be effective to
compensate us for any losses. Fertoz will continuously monitor its activities for quality control and safety. However, there
are no assurances that safety procedures will always prevent the damages described above. Although Fertoz will
maintain insurance coverage that it believes to be adequate and customary in the industries in which it operates, there
are no assurances that such insurance will be adequate to cover all liabilities. In addition, there are no assurances that
Fertoz will be able to maintain adequate insurance in the future at rates it considers reasonable and commercially
justifiable. The occurrence of a significant uninsured claim, a claim in excess of the insurance coverage limits, or a claim
at a time when Fertoz is not able to obtain liability insurance, could have a material adverse effect on its ability to
conduct normal business operations.
Environmental and Regulatory Risk
Fertoz’s operations are subject to environmental risks and regulatory compliance and there are no assurances that
Fertoz operations will be in compliance with all regulatory requirements. New or amended environmental laws and
regulations may require Fertoz to curtail or stop operations at one or more sites or may require expenditures by us to
install environmental control equipment or modify operations. Failure to comply could subject Fertoz to fines or
penalties. There can be no assurances that Fertoz will not experience difficulties in its efforts to comply with such laws
and regulations in future years, or that the costs associated with Fertoz’s continued compliance efforts will not have a
material adverse effect on its business and financial condition. The ability to use its product in organic agriculture is a
key component to the marketability of such product. Should any regulatory body prohibit organic matter fertilizers for
use in organic agriculture it would materially adversely affect the marketability of the products of Fertoz.
Taxation
In all places where Fertoz has operations, in addition to the normal level of income tax imposed on all industries, Fertoz
may be required to pay government royalties, indirect taxes, goods and services tax and other imposts which generally
relate to revenue or cash flows. Industry profitability can be affected by changes in government taxation policies.
Foreign exchange
Foreign exchange rates fluctuate over time. Fluctuating exchange rates have a direct effect on Fertoz`s operating costs
and cash flows expressed in Australian dollars.
Occupational health and safety
Exploration and production activities may expose Fertoz’s staff and contractors to potentially dangerous working
environments. Occupational health and safety legislation and regulations differ in each jurisdiction. If any of the
Company’s employees or contractors suffers injury or death, compensation payments or fines may be payable and
such circumstances could result in the loss of a license or permit required to carry on the business. Such an incident may
also have an adverse effect on the Company’s business and reputation.
Fertoz limited | 17
DIRECTORS’ REPORT
Economic factors
The operating and financial performance of Fertoz is influenced by a variety of general economic and business
conditions, including levels of consumer spending, energy prices, inflation, interest rates and exchange rates, supply and
demand, industrial disruption, access to debt and capital markets and government fiscal, monetary and regulatory
policies. Changes in general economic conditions may result from many factors including government policy,
international economic conditions, significant acts of terrorism, hostilities or war or natural disasters. A prolonged
deterioration in general economic conditions, including an increase in interest rates or a decrease in consumer and
business demand, could be expected to have an adverse impact on the Company’s operating and financial
performance and financial position. The Company's future possible revenues and share price can be affected by these
factors, which are beyond the control of Fertoz.
Weather and Climate
Adverse weather conditions represent a very significant operating risk affecting Fertoz operations and customers’
demand for products. Weather conditions affect the types of crops grown, the quality and quantity of production and
the levels of farm inputs which, in turn, will affect demand for Fertoz products. The impacts of climate change may
affect Fertoz operations and the markets in which Fertoz sells its products. Regulatory changes aimed at reducing the
impact of, or addressing climate change, including reducing or limiting carbon emissions may impact negatively
Fertoz`s operations, customers operations and supply chains globally. Climate change may also result in adverse
weather conditions, such as drought or excessive rains, which can directly impact farmers resulting in both reduced
demand for fertilizers and/or reduced crop production by farmers resulting in less demand for Fertoz products. Such
adverse weather conditions could have a material adverse effect on operating results and the financial condition of
Fertoz.
Political risk and instability
Fertoz's operations are located in Australia, USA, Canada and Asia. Fertoz is subject to the risk that it may not be able
to carry out its activities as it intends, including because of a change in government, legislation, regulation or policy.
International conflicts risk
The current evolving conflict between Russia and Ukraine (RRuussssiiaa--UUkkrraaiinnee CCoonnfflliicctt) is having a material effect on the
global economy. These hostilities have created uncertainty for capital markets around the world, and this uncertainty
may lead to adverse consequences for the Company’s business operations. Further, various governments and industries
have taken measures and imposed sanctions in response to the Russia-Ukraine Conflict (such as changes to
import/export restrictions and other economic sanctions). Whilst Fertoz does not have a relationship with any party
domiciled in Russia, such measures and sanctions may cause disruptions to the Company’s supply chains and adversely
impact commodity prices such as has occurred in global fertilizer markets. Such events may affect the financial
performance of Fertoz. Given the Russia-Ukraine Conflict is continually evolving, the consequences are inherently
uncertain. Further, there is no certainty that similar conflicts which impact global markets will not arise in the future.
Litigation risks
Fertoz is exposed to possible litigation risks including native title claims, tenure disputes, environmental claims,
occupational health and safety claims and employee claims. Further, the Company may be involved in disputes with
other parties in the future which may result in litigation. Any such claim or dispute, if proven, may impact adversely on
the Company's operations, financial performance and financial position.
Force Majeure
Fertoz’s operations now or in the future may be adversely affected by risks outside the control of the Company,
including labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, pandemics (i.e., COVID-19),
explosions or other catastrophes, epidemics or quarantine restrictions.
18 | Fertoz limited
DIRECTORS’ REPORT
Economic factors
The operating and financial performance of Fertoz is influenced by a variety of general economic and business
conditions, including levels of consumer spending, energy prices, inflation, interest rates and exchange rates, supply and
demand, industrial disruption, access to debt and capital markets and government fiscal, monetary and regulatory
policies. Changes in general economic conditions may result from many factors including government policy,
international economic conditions, significant acts of terrorism, hostilities or war or natural disasters. A prolonged
deterioration in general economic conditions, including an increase in interest rates or a decrease in consumer and
business demand, could be expected to have an adverse impact on the Company’s operating and financial
performance and financial position. The Company's future possible revenues and share price can be affected by these
factors, which are beyond the control of Fertoz.
Weather and Climate
Adverse weather conditions represent a very significant operating risk affecting Fertoz operations and customers’
demand for products. Weather conditions affect the types of crops grown, the quality and quantity of production and
the levels of farm inputs which, in turn, will affect demand for Fertoz products. The impacts of climate change may
affect Fertoz operations and the markets in which Fertoz sells its products. Regulatory changes aimed at reducing the
impact of, or addressing climate change, including reducing or limiting carbon emissions may impact negatively
Fertoz`s operations, customers operations and supply chains globally. Climate change may also result in adverse
weather conditions, such as drought or excessive rains, which can directly impact farmers resulting in both reduced
demand for fertilizers and/or reduced crop production by farmers resulting in less demand for Fertoz products. Such
adverse weather conditions could have a material adverse effect on operating results and the financial condition of
Fertoz.
Political risk and instability
International conflicts risk
Fertoz's operations are located in Australia, USA, Canada and Asia. Fertoz is subject to the risk that it may not be able
to carry out its activities as it intends, including because of a change in government, legislation, regulation or policy.
The current evolving conflict between Russia and Ukraine (RRuussssiiaa--UUkkrraaiinnee CCoonnfflliicctt) is having a material effect on the
global economy. These hostilities have created uncertainty for capital markets around the world, and this uncertainty
may lead to adverse consequences for the Company’s business operations. Further, various governments and industries
have taken measures and imposed sanctions in response to the Russia-Ukraine Conflict (such as changes to
import/export restrictions and other economic sanctions). Whilst Fertoz does not have a relationship with any party
domiciled in Russia, such measures and sanctions may cause disruptions to the Company’s supply chains and adversely
impact commodity prices such as has occurred in global fertilizer markets. Such events may affect the financial
performance of Fertoz. Given the Russia-Ukraine Conflict is continually evolving, the consequences are inherently
uncertain. Further, there is no certainty that similar conflicts which impact global markets will not arise in the future.
Fertoz is exposed to possible litigation risks including native title claims, tenure disputes, environmental claims,
occupational health and safety claims and employee claims. Further, the Company may be involved in disputes with
other parties in the future which may result in litigation. Any such claim or dispute, if proven, may impact adversely on
the Company's operations, financial performance and financial position.
Litigation risks
Force Majeure
Fertoz’s operations now or in the future may be adversely affected by risks outside the control of the Company,
including labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, pandemics (i.e., COVID-19),
explosions or other catastrophes, epidemics or quarantine restrictions.
Risk Management
Fertoz seeks to manage enterprise-wide risk through a number of risk controls and mitigants. Specific risk controls and
mitigants include but are not limited to:
Board risk oversight
•
Implementation and adoption of Company policies and standards
•
• Adoption of a group risk procedures document (under development)
•
Implementation of compliant Occupational Health and Safety processes and procedures at all operations
(under development)
Insuring business activities and operations in accordance with industry practice
Implementing measures to minimize the impact of COVID to staff and the Company’s business.
Engaging appropriate tax, finance, accounting and legal advisors.
•
•
•
MMaatttteerrss ssuubbsseeqquueenntt ttoo tthhee eenndd ooff tthhee ffiinnaanncciiaall yyeeaarr
On 16 February 2024, the Company cancelled 7,585,950 shares pursuant to an employee share scheme buy-back.
On 22 March 2024, Max Crowley resigned as joint Company Secretary.
LLiikkeellyy ddeevveellooppmmeennttss aanndd eexxppeecctteedd rreessuullttss ooff ooppeerraattiioonnss
The consolidated entity intends to continue its fertilizer development and production activities, to acquire further
suitable fertilizer projects as opportunities arise, to expand further services in relation to nature-based carbon projects,
and to implement the Company’s ESG policies to become at least carbon neutral from operations.
EEnnvviirroonnmmeennttaall rreegguullaattiioonn
The consolidated entity is subject to environmental regulations under laws of British Columbia and Alberta, Canada
where it either holds or has a right to explore on such tenements. During the financial period the consolidated entity’s
activities recorded no non-compliance issues.
CCoorrppoorraattee GGoovveerrnnaannccee
Fertoz’s Corporate Governance Statement and Appendix 4G can be found on the Company’s website at:
https://www.fertoz.com/company/corporate-governance/
IInnffoorrmmaattiioonn oonn ddiirreeccttoorrss
MMrr.. SSttuuaarrtt RRiicchhaarrddssoonn BBA, CPA
Non-executive Chairman (appointed 2 December 2022)
Mr Richardson has extensive experience over 36 years in capital markets both in Australia and overseas in investment
banking and stockbroking. He is a founding director of Blackwood Capital Limited an Australian based investment bank
operating in capital markets, advisory and funds management in equities and private equity. Mr Richardson has not
been a director of any other listed company in the last three years.
Interests in shares:
Interests in options:
Contractual rights to shares:
14,325,556
1,600,000
None
Fertoz limited | 19
DIRECTORS’ REPORT
MMrr.. DDaanniieell GGlleeeessoonn
Managing Director (appointed 2 December 2022)
Mr. Gleeson has more than 20 years’ experience in the agribusiness sector and was formerly the Global Marketing Head
of global agricultural technology and science company Syngenta Group, based in Chicago, USA.
Prior to his role at Syngenta, he held various positions at Limagrain, an international agricultural co-operative group
based in France, which specialises in field seeds, vegetable seeds and cereal products. These roles included Vice
President, Global Portfolio Manager, General Manager and National Sales Manager, based in locations including
Thailand, USA, Australia, and France. In his roles he has managed teams of up to 700 staff and revenues of more than
USD $700 million and has gained experience in M&A including due diligence and integration, research and
development, portfolio, and geographical expansion, introducing new operating models and talent acquisition. Mr
Gleeson has not been a director of any other listed company in the last three years.
Interests in shares:
Interests in options:
Contractual rights to shares:
2,000,000
None
5,750,000 performance rights subject to various KPIs
MMrr.. GGrreegg WWeesstt
Non-executive Director (appointed 14 February 2022)
Mr. Greg West is a Chartered Accountant and an experienced ASX Non-Executive director with a background in the
education sector, investment banking and financial services. Mr. West was appointed as a Non-Executive Director of
ASX listed IDP Education in 2006, now a top 100 ASX company and remains a non-executive director. He is on the
Council of the University of Wollongong and a Director of UOWGE Limited, a business arm of the University of
Wollongong with universities in Dubai, Hong Kong and Malaysia. Mr. West is also a Director and Chair of Education
Australia Limited, an investment company owned by the Australian universities.
Previously, Mr. West was Chief Executive Officer of a dual listed ASX biotech company. He has worked at Price
Waterhouse and has held senior finance executive roles in investment banking with Bankers Trust, Deutsche Bank, NZI
and other financial institutions. He is a Director of the St James Foundation Limited.
Interests in shares:
Interests in options:
Contractual rights to shares:
527,778
None
None
MMrr.. PPaattrriicckk AAvveerryy,, MBA
Executive Director (resigned 9 February 2023)
Non-Executive Director (appointed 10 February 2023, resigned 5 May 2023)
Mr. Avery has more than 30 years of experience working in the industries of fertilizer, mining, speciality chemicals,
petroleum, and construction/project management. In the fertilizer industry, he worked for 11 years with JR Simplot, one
of the largest privately held food and agribusiness companies in the USA, where he held senior positions across all key
business units such as mining, manufacturing, supply chain, wholesale sales and energy management, managing over
1500 employees, three mines (two phosphate and one silica), five major manufacturing facilities, and several
warehouse/distribution locations, making dozens of products from chemical fertilizers, to speciality chemicals for lawns,
gardens, golf courses, industrial products, resins, and water treatment. Mr. Avery was also president of Intrepid Potash,
where he led all aspects of mining, manufacturing, logistics and sales. Mr. Avery has not been a director of any other
listed company in the last three years.
Interests in shares:
Interests in options:
Contractual rights to shares:
None
None
None.
20 | Fertoz limited
DIRECTORS’ REPORT
MMrr.. DDaanniieell GGlleeeessoonn
Managing Director (appointed 2 December 2022)
Mr. Gleeson has more than 20 years’ experience in the agribusiness sector and was formerly the Global Marketing Head
of global agricultural technology and science company Syngenta Group, based in Chicago, USA.
Prior to his role at Syngenta, he held various positions at Limagrain, an international agricultural co-operative group
based in France, which specialises in field seeds, vegetable seeds and cereal products. These roles included Vice
President, Global Portfolio Manager, General Manager and National Sales Manager, based in locations including
Thailand, USA, Australia, and France. In his roles he has managed teams of up to 700 staff and revenues of more than
USD $700 million and has gained experience in M&A including due diligence and integration, research and
development, portfolio, and geographical expansion, introducing new operating models and talent acquisition. Mr
Gleeson has not been a director of any other listed company in the last three years.
Interests in shares:
Interests in options:
2,000,000
None
Contractual rights to shares:
5,750,000 performance rights subject to various KPIs
MMrr.. GGrreegg WWeesstt
Non-executive Director (appointed 14 February 2022)
Mr. Greg West is a Chartered Accountant and an experienced ASX Non-Executive director with a background in the
education sector, investment banking and financial services. Mr. West was appointed as a Non-Executive Director of
ASX listed IDP Education in 2006, now a top 100 ASX company and remains a non-executive director. He is on the
Council of the University of Wollongong and a Director of UOWGE Limited, a business arm of the University of
Wollongong with universities in Dubai, Hong Kong and Malaysia. Mr. West is also a Director and Chair of Education
Australia Limited, an investment company owned by the Australian universities.
Previously, Mr. West was Chief Executive Officer of a dual listed ASX biotech company. He has worked at Price
Waterhouse and has held senior finance executive roles in investment banking with Bankers Trust, Deutsche Bank, NZI
and other financial institutions. He is a Director of the St James Foundation Limited.
Interests in shares:
Interests in options:
Contractual rights to shares:
527,778
None
None
MMrr.. PPaattrriicckk AAvveerryy,, MBA
Executive Director (resigned 9 February 2023)
Non-Executive Director (appointed 10 February 2023, resigned 5 May 2023)
Mr. Avery has more than 30 years of experience working in the industries of fertilizer, mining, speciality chemicals,
petroleum, and construction/project management. In the fertilizer industry, he worked for 11 years with JR Simplot, one
of the largest privately held food and agribusiness companies in the USA, where he held senior positions across all key
business units such as mining, manufacturing, supply chain, wholesale sales and energy management, managing over
1500 employees, three mines (two phosphate and one silica), five major manufacturing facilities, and several
warehouse/distribution locations, making dozens of products from chemical fertilizers, to speciality chemicals for lawns,
gardens, golf courses, industrial products, resins, and water treatment. Mr. Avery was also president of Intrepid Potash,
where he led all aspects of mining, manufacturing, logistics and sales. Mr. Avery has not been a director of any other
listed company in the last three years.
Interests in shares:
Interests in options:
Contractual rights to shares:
None
None
None.
MMeeeettiinnggss ooff ddiirreeccttoorrss
The number of meetings of the company’s Board of Directors (‘the Board’) held during the year ended 31 December
2023, and the number of meetings attended by each director were:
YYeeaarr eennddeedd 3311 DDeecceemmbbeerr 22002233 -- BBooaarrdd ooff DDiirreeccttoorrss
Number eligible to attend*
9
9
9
4
Number attended
9
8
7
3
Mr. Stuart Richardson
Mr. Greg West
Mr. Daniel Gleeson
Mr. Patrick Avery1
1 Resigned on 5 May 2023
The Board of the Company undertakes the responsibilities of both the Nomination and Remuneration Committee and
the Audit and Risk Committee.
RREEMMUUNNEERRAATTIIOONN RREEPPOORRTT ((aauuddiitteedd))
The remuneration report details the key management personnel remuneration arrangements for the consolidated
entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling
the activities of the entity, directly or indirectly, including all directors. There are currently no key management
personnel other than Directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to key management personnel.
PPrriinncciipplleess uusseedd ttoo ddeetteerrmmiinnee tthhee nnaattuurree aanndd aammoouunntt ooff rreemmuunneerraattiioonn
The objective of the consolidated entity's executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of
strategic objectives and the creation of value for shareholders and conforms to the market best practice for the
delivery of reward. The Board of Directors (“the Board”) ensures that executive reward satisfies the following key
criteria for good reward governance practices:
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
●
●
●
●
The Board undertakes the responsibilities of the Nomination and Remuneration Committee and is responsible for
determining and reviewing remuneration arrangements for its directors and executives. The performance of the
consolidated entity depends on the quality of its directors and executives. The remuneration philosophy is to attract,
motivate and retain high performance and high-quality personnel. The Board has structured an executive
remuneration framework that is market competitive and complementary to the reward strategy of the consolidated
entity.
Fertoz limited | 21
DIRECTORS’ REPORT
●
●
The framework seeks to align performance to shareholders' interests by:
having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth as well as focusing the executive on key non-financial
drivers of value
attracting and retaining high calibre executives
and aligns the program participants' interests by:
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
●
●
●
●
In accordance with best practice corporate governance, the structure of non-executive directors and executive
remunerations are separate.
Non-executive directors’ remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors' fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice
from independent remuneration consultants to ensure non-executive directors' fees and payments are appropriate
and in line with the market.
Non-executive directors receive share options to ensure alignment with the Boards responsibility of creating
shareholder wealth. The remuneration for each non-executive director has been set at no greater than $50,000 per
annum by way of either cash payments and/or shares issued in lieu (refer details of Directors remuneration table).
ASX listing rules require the aggregate non-executive director’s remuneration be determined periodically by a general
meeting. The most recent determination was at the Annual General Meeting held in May 2022, where the shareholders
approved an aggregate remuneration of $250,000 per annum. To conserve cash for the Group, the non-executive
directors agreed to waive their directors’ fees for the year ended 31 December 2023.
Executive remuneration
The consolidated entity aims to reward executives with a level and mix of remuneration based on their position and
responsibility, which has both fixed and variable components.
The executive remuneration and reward framework has four components:
● base pay and non-monetary benefits
● short-term performance incentives
● share-based payments
● other remuneration such as superannuation and long service leave payable to eligible employees
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary and non-monetary benefits, are reviewed annually by the Board, based
on individual and business unit performance, the overall performance of the consolidated entity and comparable
market remunerations. Executives may receive their fixed remuneration in the form of cash or other fringe benefits
where it does not create any additional costs to the consolidated entity and provides additional value to the executive.
The consolidated entity has short-term incentives ('STI').
The company may issue options to provide an incentive for key management personnel which, it is believed, is in line
with industry standards and practice and is also believed to align the interests of key management personnel with
those of the company’s shareholders.
22 | Fertoz limited
DIRECTORS’ REPORT
The framework seeks to align performance to shareholders' interests by:
having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth as well as focusing the executive on key non-financial
●
●
●
●
●
●
drivers of value
attracting and retaining high calibre executives
and aligns the program participants' interests by:
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive directors and executive
remunerations are separate.
Non-executive directors’ remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors' fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice
from independent remuneration consultants to ensure non-executive directors' fees and payments are appropriate
and in line with the market.
Non-executive directors receive share options to ensure alignment with the Boards responsibility of creating
shareholder wealth. The remuneration for each non-executive director has been set at no greater than $50,000 per
annum by way of either cash payments and/or shares issued in lieu (refer details of Directors remuneration table).
ASX listing rules require the aggregate non-executive director’s remuneration be determined periodically by a general
meeting. The most recent determination was at the Annual General Meeting held in May 2022, where the shareholders
approved an aggregate remuneration of $250,000 per annum. To conserve cash for the Group, the non-executive
directors agreed to waive their directors’ fees for the year ended 31 December 2023.
Executive remuneration
The consolidated entity aims to reward executives with a level and mix of remuneration based on their position and
responsibility, which has both fixed and variable components.
The executive remuneration and reward framework has four components:
● base pay and non-monetary benefits
● short-term performance incentives
● share-based payments
● other remuneration such as superannuation and long service leave payable to eligible employees
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary and non-monetary benefits, are reviewed annually by the Board, based
on individual and business unit performance, the overall performance of the consolidated entity and comparable
market remunerations. Executives may receive their fixed remuneration in the form of cash or other fringe benefits
where it does not create any additional costs to the consolidated entity and provides additional value to the executive.
The consolidated entity has short-term incentives ('STI').
The company may issue options to provide an incentive for key management personnel which, it is believed, is in line
with industry standards and practice and is also believed to align the interests of key management personnel with
those of the company’s shareholders.
Consolidated entity performance and link to remuneration
The consolidated entity’s remuneration framework is designed to attract, retain and motivate those people who can
drive Fertoz’ culture and deliver its business strategy and supports alignment to long term overall company
performance and creation of shareholder value. Remuneration packages are structured to reward meeting individual,
business unit and the entity’s targets and objectives, including maximising returns for shareholders.
The link between remuneration, company performance and shareholder wealth generation is tenuous, particularly in
the exploration and development stage of a minerals company. Share prices are subject to the influence of
international phosphate prices and market sentiment towards the sector and increases or decreases may occur
independently of executive performance or remuneration.
The earnings of the consolidated entity for the years ended 31 December 2019, 2020, 2021, 2022 and 2023 are
summarised below:
Sales revenue
EBITDA
EBIT
22002233
$$
2,785,8631
22002222
$$
22002211
$$
3,556,8071
2,243,5011
22002200
$$
2,035,125
22001199
$$
1,326,264
(4,194,579)
(4,135,163)
(3,733,438)
(1,525,380)
(1,793,485)
(4,475,098)
(4,218,125)
(3,752,831)
(1,535,715)
(1,808,232)
(Loss) after income tax
(4,475,098)
(4,215,190)
(3,752,831)
(1,535,715)
(1,808,232)
1 This does not include receipt from sale of materials removed from the Company’s Fernie Project in Alberta of $259,663 (2022:
$828,627; 2021: $943,450)
The factors that are considered to affect total shareholders return ('TSR') for the years ended 31 December 2019, 2020,
2021, 2022 and 2023 are summarised below:
22002233
$$
22002222
$$
Share price at financial year end ($)
0.051
0.17
Total dividends declared (cents per share)
-
-
22002211
$$
0.25
-
22002200
$$
0.05
-
22001199
$$
0.08
-
Basic earnings per share (cents per share)
(1.79)
(1.73)
(1.94)
(1.01)
(1.41)
Use of remuneration consultants
The consolidated entity did not engage remuneration consultants during the year ended 31 December 2023.
Voting and comments made at the company's 2023 Annual General Meeting ('AGM')
At the 2023 AGM, the remuneration report for the year ended 31 December 2022 was adopted. The company did not
receive any specific feedback at the AGM regarding its remuneration practices.
Fertoz limited | 23
DIRECTORS’ REPORT
DDeettaaiillss ooff rreemmuunneerraattiioonn
Amounts of remuneration
Details of the remuneration of Key Management Personnel (“KMP”) of the consolidated entity for the year ended 31
December 2023 are set out in the following tables. The key management personnel of the consolidated entity consisted
of the following directors of Fertoz Limited:
• Mr. Daniel Gleeson - Managing Director and CEO
• Mr. Patrick Avery – Executive Director1
• Mr. Stuart Richardson – Non-Executive Chairman
• Mr. Greg West - Non-Executive Director
1 Mr Avery transitioned to Non-Executive Director on 10 Feb 2023 and resigned as a Director on 5 May 2023
FFoorr tthhee yyeeaarr eennddeedd 3311 DDeecceemmbbeerr 22002233
SShhoorrtt TTeerrmm
BBeenneeffiittss
PPoosstt
EEmmppllooyymmeenntt
SShhaarree BBaasseedd PPaayymmeennttss
PPrrooppoorrttiioonn ooff
rreemmuunneerraattiioonn
ppeerrffoorrmmaannccee
rreellaatteedd
Director
Salary and
fees
$
Bonus
$
Superannuation
$
Options /
Perf Shares
$
Shares
$
Total
$
Fixed
(%)
LTI
(%)
Patrick Avery1
17,437
Gregory West
Stuart Richardson
-
-
Daniel Gleeson2
451,817
TToottaall
446699,,225544
-
-
-
-
--
-
-
-
-
--
-
-
-
-
-
-
1177,,443377
100%
--
--
-
-
-
-
-
67,574
200,000
771199,,339911
63%
37%
6677,,557744
220000,,000000
773366,,882288
1 See resignation date as per above2
2 Remuneration in shares includes 400,000 shares issued when the market price was $0.20
FFoorr tthhee yyeeaarr eennddeedd 3311 DDeecceemmbbeerr 22002222
SShhoorrtt TTeerrmm
BBeenneeffiittss
Salary and
fees
$
DDiirreeccttoorr
PPoosstt
EEmmppllooyymmeenntt
SShhaarree BBaasseedd PPaayymmeennttss
PPrrooppoorrttiioonn ooff
rreemmuunneerraattiioonn
ppeerrffoorrmmaannccee
rreellaatteedd
Bonus
$
Superannuation
$
Options /
Perf Shares
$
Shares
$
Total
$
Fixed
(%)
LTI
(%)
Patrick Avery
229,553
Gregory West2
Stuart Richardson2
-
-
-
-
Daniel Gleeson1
317,161
50,000
TToottaall
554466,,771144
5500,,000000
-
-
-
-
--
(13,459)
-
221166,,009944
100%
-
-
50,000
5500,,000000
100%
30,000
3300,,000000
100%
-
-
-
319,517
200,000
888866,,667788
41%
59%
330066,,005588
228800,,000000
11,,118822,,777722
1 Remuneration in shares includes 1,000,000 performance shares issued when the market price was $0.20. Commenced April 2022.
2 Remuneration in shares includes 400,000 shares issued when the market price was $0.20
24 | Fertoz limited
DIRECTORS’ REPORT
DDeettaaiillss ooff rreemmuunneerraattiioonn
Amounts of remuneration
Details of the remuneration of Key Management Personnel (“KMP”) of the consolidated entity for the year ended 31
December 2023 are set out in the following tables. The key management personnel of the consolidated entity consisted
of the following directors of Fertoz Limited:
• Mr. Daniel Gleeson - Managing Director and CEO
• Mr. Patrick Avery – Executive Director1
• Mr. Stuart Richardson – Non-Executive Chairman
• Mr. Greg West - Non-Executive Director
FFoorr tthhee yyeeaarr eennddeedd 3311 DDeecceemmbbeerr 22002233
1 Mr Avery transitioned to Non-Executive Director on 10 Feb 2023 and resigned as a Director on 5 May 2023
SShhoorrtt TTeerrmm
BBeenneeffiittss
PPoosstt
EEmmppllooyymmeenntt
SShhaarree BBaasseedd PPaayymmeennttss
PPrrooppoorrttiioonn ooff
rreemmuunneerraattiioonn
ppeerrffoorrmmaannccee
rreellaatteedd
Bonus
Superannuation
Options /
Perf Shares
Shares
$
Total
$
Fixed
(%)
LTI
(%)
Director
Salary and
fees
$
Patrick Avery1
17,437
Gregory West
Stuart Richardson
-
-
TToottaall
446699,,225544
1 See resignation date as per above2
SShhoorrtt TTeerrmm
BBeenneeffiittss
Salary and
fees
$
Patrick Avery
229,553
Gregory West2
Stuart Richardson2
-
-
$
-
-
-
-
--
$
-
-
Daniel Gleeson2
451,817
67,574
200,000
771199,,339911
63%
37%
6677,,557744
220000,,000000
773366,,882288
2 Remuneration in shares includes 400,000 shares issued when the market price was $0.20
FFoorr tthhee yyeeaarr eennddeedd 3311 DDeecceemmbbeerr 22002222
PPoosstt
EEmmppllooyymmeenntt
SShhaarree BBaasseedd PPaayymmeennttss
PPrrooppoorrttiioonn ooff
rreemmuunneerraattiioonn
ppeerrffoorrmmaannccee
rreellaatteedd
DDiirreeccttoorr
Bonus
Superannuation
Options /
Perf Shares
Shares
$
Total
$
Fixed
(%)
LTI
(%)
(13,459)
-
221166,,009944
100%
50,000
5500,,000000
100%
30,000
3300,,000000
100%
-
-
-
Daniel Gleeson1
317,161
50,000
319,517
200,000
888866,,667788
41%
59%
TToottaall
554466,,771144
5500,,000000
330066,,005588
228800,,000000
11,,118822,,777722
1 Remuneration in shares includes 1,000,000 performance shares issued when the market price was $0.20. Commenced April 2022.
2 Remuneration in shares includes 400,000 shares issued when the market price was $0.20
-
-
-
1177,,443377
100%
--
--
-
-
-
-
-
$
-
-
-
-
--
$
-
-
-
-
--
$
-
-
-
$
-
-
SSeerrvviiccee aaggrreeeemmeennttss
Remuneration and other terms of employment for key executive management personnel are formalised in service
agreements. Details of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Patrick Avery
Executive Director (until 9 February 2023),
Non-Executive Director (10 February 2023 to 5 May 2023)
1 June 2021
3 years (Terminated on 9 February 2023)
From 1 January 2022 through 31 August 2022, Mr. Avery’s fees were $16,000 per month. From
1 September 2022 through 31 December 2022, Mr. Avery’s fees were $8,000 per month. If Mr
Patrick Avery is required to provide services to the Company on more than 17 days during
any month (based on an 8-hour day), a related entity of Mr Patrick Avery is entitled to
receive additional fees of up to US$750 for each additional day. This Consultancy
Agreement was terminated on 9 February 2023 at which point Mr Avery was appointed as
a Non-Executive Director. Upon termination of the Consultancy Agreement, the Board has
no obligation to pay the following bonus payments or issue the additional shares which
were subject to shareholder approval:
a)
b)
c)
d)
e)
f)
US$50,000 cash bonus paid once the Company reaches a minimum of $1M EBIT as shown in
audited annual accounts before 1 June 2024;
US$100,000 bonus paid once the Company reaches a minimum of $3M EBIT as shown in
audited annual accounts before 1 June 2024;
US$200,000 cash bonus paid once the Company reaches a minimum of $5M EBIT as shown in
audited annual accounts before 1 June 2024;
250,000 Shares on the achievement of 10,000ha of reforested or rehabilitated land managed
in a carbon project by Fertoz Carbon before 1 June 2024;
250,000 Shares on the achievement of the sale of $500,000 of Carbon Credits in a project
managed by Fertoz Carbon before 1 June 2024;
250,000 Shares on the achievement of 60,000t of fertilizer sales in any one year before 1 June
2024
Daniel Gleeson
Managing Director & CEO
26 April 2022
The Employment Agreement provides for a base salary of US $300,000 per annum and has
the following additional compensation:
a) US $50,000 cash bonus paid on the first day of employment;
b) US $50,000 cash bonus paid once the Company reaches a minimum of $1M EBIT as shown in
audited annual consolidated accounts before 31 December 2024;
c) US $100,000 cash bonus paid once the Company reaches a minimum of $3M EBIT as shown in
audited annual consolidated accounts before 31 December 2024;
d) US $200,000 cash bonus paid once the Company reaches a minimum of $5M EBIT as shown in
e)
f)
g)
h)
i)
j)
k)
audited annual consolidated accounts before 31 December 2024;
3,000,000 performance rights where 1,000,000 vested at commencement of employment.
1,000,000 performance rights will vest at each of the first and second anniversary of continuing
employment and in good standing;
1,000,000 performance rights vest if the Company’s shares trade on ASX at a VWAP of, or in
excess of, $0.40 for 10 consecutive days;
1,000,000 performance rights vest if the Company’s shares trade on ASX at a VWAP of, or in
excess of, $0.50 for 10 consecutive days;
2,000,000 performance rights vest if the Company’s shares trade on ASX at a VWAP of, or in
excess of, $0.65 for 10 consecutive days;
250,000 performance rights vest on the achievement of 10,000ha of reforested or rehabilitated
land managed in a carbon project by Fertoz before 31 December 2024
250,000 performance rights vest on the achievement of the sale of $500,000 carbon credits in a
project managed by Fertoz before 31 December 2024;
250,000 performance rights vest on the achievement of 60,000t of fertilizer sales in any one
calendar year on or before 31 December 2024.
Fertoz limited | 25
DIRECTORS’ REPORT
At 31 December 2023, 2,000,000 performance rights have vested during Mr Gleeson’s employment. These performance
rights were exercised and Mr Gleeson received 2,000,000 shares. The potential shares that may be issued have been
recognised as part of the share-based payment expense.
Key management personnel have no additional entitlement to termination payments in the event of removal for
misconduct.
Shareholding
The number of shares in the company held during the year ended 31 December 2023 by each director and other
members of key management personnel of the consolidated entity, including their personally related parties, is set out
below:
BBaallaannccee aatt
tthhee ssttaarrtt ooff
tthhee yyeeaarr
RReecceeiivveedd aass ppaarrtt
ooff rreemmuunneerraattiioonn
AAddddiittiioonnss
DDiissppoossaallss//oo
tthheerr
BBaallaannccee aatt tthhee
eenndd ooff tthhee yyeeaarr
OOrrddiinnaarryy sshhaarreess
PPaattrriicckk AAvveerryy
6,408,164
-
DDaanniieell GGlleeeessoonn
1,000,000
1,000,000
-
-
SSttuuaarrtt RRiicchhaarrddssoonn
13,770,000
GGrreegg WWeesstt
250,000
-
-
555,556
277,778
6,408,164
-
-
-
-
2,000,000
14,325,556
527,778
2211,,442288,,116644
11,,000000,,000000
883333,,333344
66,,440088,,116644
1166,,886633,,333366
AAddddiittiioonnaall ddiisscclloossuurreess rreellaattiinngg ttoo kkeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell
Performance rights
The number of performance rights which are treated as in-substance options held during the financial year by each
director and other members of key management personnel of the consolidated entity, including their personally related
parties, is set out below:
PPeerrffoorrmmaannccee sshhaarreess
PPaattrriicckk AAvveerryy
SSttuuaarrtt RRiicchhaarrddssoonn
DDaanniieell GGlleeeessoonn
BBaallaannccee aatt
tthhee ssttaarrtt ooff
tthhee yyeeaarr
-
-
6,750,000
66,,775500,,000000
AAddddiittiioonnss
CCoonnvveerrtteedd ttoo
oorrddiinnaarryy sshhaarreess
EExxppiirreedd**
BBaallaannccee aatt tthhee
eenndd ooff tthhee yyeeaarr
-
-
-
--
-
-
(1,000,000)
((11,,000000,,000000))
-
-
-
-
-
5,750,000
55,,775500,,000000
For information regarding the fair value of these performance rights, refer to note 31 to the financial statements.
SShhaarree bbaasseedd ccoommppeennssaattiioonn
SShhaarreess uunnddeerr ooppttiioonn
There were no options granted to officers who are among the five highest remunerated officers of the company and
the group but are not key management persons.
During the year ended 31 December 2023, the Company issued 1,600,000 options to Blackwood Capital Ltd, a related
party of Mr Stuart Richardson, a Director of the Company, following receipt of shareholder approval on 29 June 2023,
with an exercise price of $0.27, expiring on 31 May 2026. These options were valued at $178,350 and recorded as capital
raising costs during the year ended 31 December 2022 with respect to capital raised in 2022. Refer to note 28(b) of the
2022 Annual Report for further details.
26 | Fertoz limited
DIRECTORS’ REPORT
At 31 December 2023, 2,000,000 performance rights have vested during Mr Gleeson’s employment. These performance
rights were exercised and Mr Gleeson received 2,000,000 shares. The potential shares that may be issued have been
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of
the company or of any other body corporate.
SShhaarreess iissssuueedd
On 29 June 2023, Fertoz Limited issued 833,334 shares to directors, following shareholder approval, at an issue price of
$0.18, which was identical terms to the capital raise conducted in August 2022.
OOtthheerr ttrraannssaaccttiioonnss wwiitthh KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell
The number of shares in the company held during the year ended 31 December 2023 by each director and other
members of key management personnel of the consolidated entity, including their personally related parties, is set out
LLooaann ffrroomm aa DDiirreeccttoorr
BBaallaannccee aatt
tthhee ssttaarrtt ooff
tthhee yyeeaarr
RReecceeiivveedd aass ppaarrtt
ooff rreemmuunneerraattiioonn
AAddddiittiioonnss
DDiissppoossaallss//oo
BBaallaannccee aatt tthhee
tthheerr
eenndd ooff tthhee yyeeaarr
As detailed above and in Note 14 of this Annual Report, Mr Stuart Richardson, a director of the Company agreed to
provide the Company with a fully drawn short-term unsecured loan of $300,000 on commercial arms’ length terms. The
loan was applied towards working capital purposes of the Company. The total amount payable by the Company at
balance date is $305,906 which includes accrued interest of $5,906.
PPaattrriicckk AAvveerryy
6,408,164
6,408,164
-
CCoonnssuullttiinngg FFeeeess
The Company paid $71,170 (incl GST) to Blackwood Capital Ltd, a related entity of Mr Stuart Richardson, for consulting
fees associated with the Convertible Notes raised during the year ended 31 December 2023.
************TThhiiss ccoonncclluuddeess tthhee rreemmuunneerraattiioonn rreeppoorrtt,, wwhhiicchh hhaass bbeeeenn aauuddiitteedd.. ************
recognised as part of the share-based payment expense.
Key management personnel have no additional entitlement to termination payments in the event of removal for
misconduct.
Shareholding
below:
OOrrddiinnaarryy sshhaarreess
Performance rights
parties, is set out below:
PPeerrffoorrmmaannccee sshhaarreess
PPaattrriicckk AAvveerryy
SSttuuaarrtt RRiicchhaarrddssoonn
DDaanniieell GGlleeeessoonn
DDaanniieell GGlleeeessoonn
1,000,000
1,000,000
SSttuuaarrtt RRiicchhaarrddssoonn
13,770,000
GGrreegg WWeesstt
250,000
-
-
-
-
-
555,556
277,778
-
-
-
2,000,000
14,325,556
527,778
2211,,442288,,116644
11,,000000,,000000
883333,,333344
66,,440088,,116644
1166,,886633,,333366
AAddddiittiioonnaall ddiisscclloossuurreess rreellaattiinngg ttoo kkeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell
The number of performance rights which are treated as in-substance options held during the financial year by each
director and other members of key management personnel of the consolidated entity, including their personally related
BBaallaannccee aatt
tthhee ssttaarrtt ooff
tthhee yyeeaarr
-
-
6,750,000
66,,775500,,000000
AAddddiittiioonnss
CCoonnvveerrtteedd ttoo
EExxppiirreedd**
BBaallaannccee aatt tthhee
oorrddiinnaarryy sshhaarreess
eenndd ooff tthhee yyeeaarr
-
-
-
--
-
-
(1,000,000)
((11,,000000,,000000))
-
-
-
-
-
5,750,000
55,,775500,,000000
For information regarding the fair value of these performance rights, refer to note 31 to the financial statements.
SShhaarree bbaasseedd ccoommppeennssaattiioonn
SShhaarreess uunnddeerr ooppttiioonn
There were no options granted to officers who are among the five highest remunerated officers of the company and
the group but are not key management persons.
During the year ended 31 December 2023, the Company issued 1,600,000 options to Blackwood Capital Ltd, a related
party of Mr Stuart Richardson, a Director of the Company, following receipt of shareholder approval on 29 June 2023,
with an exercise price of $0.27, expiring on 31 May 2026. These options were valued at $178,350 and recorded as capital
raising costs during the year ended 31 December 2022 with respect to capital raised in 2022. Refer to note 28(b) of the
2022 Annual Report for further details.
Fertoz limited | 27
DIRECTORS’ REPORT
IInnddeemmnniittyy aanndd iinnssuurraannccee ooff ooffffiicceerrss
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the year ended 31 December 2023, the company paid a premium in respect of a contract to ensure the directors
and executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
IInnddeemmnniittyy aanndd iinnssuurraannccee ooff aauuddiittoorr
The company has not, during or since the end of the financial period, indemnified or agreed to indemnify the auditor of
the company or any related entity against a liability incurred by the auditor.
During the financial period, the company has not paid a premium in respect of a contract to insure the auditor of the
company or any related entity.
PPrroocceeeeddiinnggss oonn bbeehhaallff ooff tthhee ccoommppaannyy
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
NNoonn--aauuddiitt sseerrvviicceess
Amounts paid or payable of $7,720 (2022: $13,540) to BDO Services Pty Ltd, a related company of the previous auditor,
for non-audit services provided during the year ended 31 December 2023. This related to preparation of the tax return
and taxation advice. Moore Australia Audit (WA), the current auditor, did not provide any non-audit services during the
year ended 31 December 2023.
28 | Fertoz limited
DIRECTORS’ REPORT
IInnddeemmnniittyy aanndd iinnssuurraannccee ooff ooffffiicceerrss
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the year ended 31 December 2023, the company paid a premium in respect of a contract to ensure the directors
and executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The directors are of the opinion that the services as disclosed in note 22 to the financial statements do not compromise
the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
● all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
● none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for
the company, acting as advocate for the company or jointly sharing economic risks and rewards.
IInnddeemmnniittyy aanndd iinnssuurraannccee ooff aauuddiittoorr
The company has not, during or since the end of the financial period, indemnified or agreed to indemnify the auditor of
the company or any related entity against a liability incurred by the auditor.
OOffffiicceerrss ooff tthhee ccoommppaannyy wwhhoo aarree ffoorrmmeerr ppaarrttnneerrss ooff MMoooorree AAuussttrraalliiaa AAuuddiitt ((WWAA))
There are no officers of the company who are former partners of Moore Australia Audit (WA)
During the financial period, the company has not paid a premium in respect of a contract to insure the auditor of the
company or any related entity.
PPrroocceeeeddiinnggss oonn bbeehhaallff ooff tthhee ccoommppaannyy
AAuuddiittoorr''ss iinnddeeppeennddeennccee ddeeccllaarraattiioonn
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
on the following page
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
AAuuddiittoorr
BDO Audit Pty Ltd ceased being the Company’s auditor on 24 November 2023. Moore Australia Audit (WA) is the
Company’s auditor and prevails in office in accordance with section 327 of the Corporation Act 2001.
NNoonn--aauuddiitt sseerrvviicceess
On behalf of the directors
Amounts paid or payable of $7,720 (2022: $13,540) to BDO Services Pty Ltd, a related company of the previous auditor,
for non-audit services provided during the year ended 31 December 2023. This related to preparation of the tax return
and taxation advice. Moore Australia Audit (WA), the current auditor, did not provide any non-audit services during the
year ended 31 December 2023.
________________________________
SSttuuaarrtt RRiicchhaarrddssoonn
2288 MMaarrcchh 22002244
Fertoz limited | 29
DIRECTORS’ REPORT
AUDITORS’
INDEPENDENCE
DECLARATION
AS OF 31 DECEMBER 2023
30 | Fertoz limited
DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF FERTOZ LIMITED
Moore Australia Audit (WA)
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace, WA 6831
T +61 8 9225 5355
F +61 8 9225 6181
www.moore-australia.com.au
Moore Australia Audit (WA)
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace, WA 6831
T +61 8 9225 5355
F +61 8 9225 6181
I declare that, to the best of my knowledge and belief, during the year ended 31 December 2023, there
have been:
www.moore-australia.com.au
a)
no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit, and
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF FERTOZ LIMITED
no contraventions of any applicable code of professional conduct in relation to the audit.
b)
I declare that, to the best of my knowledge and belief, during the year ended 31 December 2023, there
have been:
a)
b)
SL TAN
PARTNER
no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit, and
MOORE AUSTRALIA AUDIT (WA)
CHARTERED ACCOUNTANTS
no contraventions of any applicable code of professional conduct in relation to the audit.
Signed at Perth this 28th day of March 2024.
SL TAN
PARTNER
MOORE AUSTRALIA AUDIT (WA)
CHARTERED ACCOUNTANTS
Signed at Perth this 28th day of March 2024.
Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation.
23 I Page
Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation.
Fertoz limited | 31
23 I Page
AUDITORS’ INDEPENDENCE DECLARATION CONSOLIDATED
FINANCIAL
STATEMENTS
AS OF 31 DECEMBER 2023
32 | Fertoz limited
FINANCIAL STATEMENTS CCoonntteennttss
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Fertoz Limited
Shareholder information
34
35
36
37
38
71
72
78
GGeenneerraall iinnffoorrmmaattiioonn
The financial statements cover Fertoz Limited as a consolidated entity consisting of Fertoz Limited and the
entities it controlled at the end of, or during, the period. The financial statements are presented in Australian
dollars, which is Fertoz Limited's functional and presentation currency.
Fertoz Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
RReeggiisstteerreedd ooffffiiccee aanndd pprriinncciippaall ppllaaccee ooff bbuussiinneessss
Level 5, 126 Phillip Street, Sydney, NSW 2000
A description of the nature of the consolidated entity's operations and its principal activities are included in the
directors' report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 28 March
2024. The directors have the power to amend and reissue the financial statements.
Fertoz limited | 33
FINANCIAL STATEMENTS Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2023
NNoottee
4
4
RReevveennuuee ffrroomm ccoonnttrraaccttss wwiitthh ccuussttoommeerrss
CCoosstt ooff ggooooddss ssoolldd
Other Income
EExxppeennsseess
Audit & accounting
Carbon project expenditure
Consultant fees & employee compensation
Depreciation & amortisation
Directors' fees (non-executive)
Executive chairman compensation
Impairment expense
Insurance
Investor relations
Legal
Listing fees and share registry
Marketing & selling
Provision for impairment of debt
7a
Share based payment
Other expenses
TToottaall eexxppeennsseess
FFiinnaannccee
Interest income
Interest expense
Foreign exchange loss/(gain)
LLoossss bbeeffoorree iinnccoommee ttaaxx eexxppeennssee
Income tax expense
4
5
YYeeaarr eennddeedd 3311
DDeecceemmbbeerr
22002233
$
Year ended
31 December
2022
$
22,,778855,,886633
3,556,807
((22,,115555,,770033))
(3,394,589)
663300,,116600
8822,,449944
330044,,551100
223355,,227733
11,,119922,,998888
221188,,008877
1177,,229955
--
444411,,220011
111177,,889933
6633,,446699
3322,,111188
5544,,557700
11,,886699,,775544
4488,,000000
228899,,667777
223366,,669966
55,,112211,,662211
((1111,,990066))
7744,,333388
33,,669999
6666,,113311
162,218
35,628
207,800
537,387
742,161
82,962
-
222,258
-
65,360
62,569
80,595
83,218
1,274,366
43,201
780,202
231,050
4,413,129
(7,642)
4,707
2,842
(93)
((44,,447755,,009988))
(4,215,190)
--
-
LLoossss aafftteerr iinnccoommee ttaaxx eexxppeennssee ffoorr tthhee yyeeaarr
((44,,447755,,009988))
(4,215,190)
OOtthheerr ccoommpprreehheennssiivvee iinnccoommee
Items that may be reclassified subsequently to profit or loss
Foreign currency translation gain/(loss)
Other comprehensive income for the year, net of tax
228855,,009977
228855,,009977
(34,086)
(34,086)
TToottaall ccoommpprreehheennssiivvee iinnccoommee ffoorr tthhee yyeeaarr
((44,,119900,,000011))
(4,249,276)
LLoossss ppeerr sshhaarree ffoorr lloossss aattttrriibbuuttaabbllee ttoo tthhee oowwnneerrss ooff FFeerrttoozz LLiimmiitteedd
Basic loss per share (cents)
Diluted loss per share (cents)
30
30
((11..7799))
((11..7799))
(1.73)
(1.73)
The above consolidated statement of profit or loss and other comprehensive income should be read in
notes
conjunction
accompanying
with
the
34 | Fertoz limited
TToottaall aasssseettss
1122,,444477,,447788
15,272,000
AAsssseettss
CCuurrrreenntt aasssseettss
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
TToottaall ccuurrrreenntt aasssseettss
NNoonn--ccuurrrreenntt aasssseettss
Exploration and evaluation assets
Property, plant and equipment
Right-of-use assets
Environmental Bonds
TToottaall nnoonn--ccuurrrreenntt aasssseettss
CCuurrrreenntt lliiaabbiilliittiieess
Trade and other payables
Lease liability
Borrowing
TToottaall ccuurrrreenntt lliiaabbiilliittiieess
NNoonn--ccuurrrreenntt lliiaabbiilliittiieess
Lease liability
Convertible notes
TToottaall nnoonn--ccuurrrreenntt lliiaabbiilliittiieess
TToottaall lliiaabbiilliittiieess
NNeett aasssseettss
EEqquuiittyy
Issued capital
Share based payment reserve
Translation reserve
Accumulated losses
TToottaall eeqquuiittyy
NNoottee
6
7a
7b
8
9
10
13
11
12
13
14
13
15
16,17
22,,990077,,112233
5,967,785
22002233
$
11,,669955,,885544
339933,,001133
776655,,668822
5522,,557744
66,,887733,,995577
440044,,887711
11,,995588,,557733
330022,,995544
99,,554400,,335555
553333,,779988
220088,,116600
330055,,009966
335544,,004400
330099,,660066
666633,,664466
2022
$
2,861,377
1,673,094
1,226,915
206,399
6,156,371
832,606
1,991,024
324,214
9,304,215
1,122,047
143,395
-
-
435,257
435,257
11,,004477,,005544
1,265,442
11,,771100,,770000
1,700,699
1100,,773366,,777788
13,571,301
3355,,335500,,117799
33,,559922,,884477
552288,,555522
34,012,379
3,575,170
243,455
((2288,,773344,,880000))
(24,259,702)
1100,,773366,,777788
13,571,301
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes
FINANCIAL STATEMENTS
Consolidated statement of financial position
For the year ended 31 December 2023
AAsssseettss
CCuurrrreenntt aasssseettss
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
TToottaall ccuurrrreenntt aasssseettss
NNoonn--ccuurrrreenntt aasssseettss
Exploration and evaluation assets
Property, plant and equipment
Right-of-use assets
Environmental Bonds
TToottaall nnoonn--ccuurrrreenntt aasssseettss
TToottaall aasssseettss
CCuurrrreenntt lliiaabbiilliittiieess
Trade and other payables
Lease liability
Borrowing
TToottaall ccuurrrreenntt lliiaabbiilliittiieess
NNoonn--ccuurrrreenntt lliiaabbiilliittiieess
Lease liability
Convertible notes
TToottaall nnoonn--ccuurrrreenntt lliiaabbiilliittiieess
TToottaall lliiaabbiilliittiieess
NNeett aasssseettss
EEqquuiittyy
Issued capital
Share based payment reserve
Translation reserve
Accumulated losses
TToottaall eeqquuiittyy
NNoottee
6
7a
7b
8
9
10
13
11
12
13
14
13
15
16,17
22002233
$
11,,669955,,885544
339933,,001133
776655,,668822
5522,,557744
2022
$
2,861,377
1,673,094
1,226,915
206,399
22,,990077,,112233
5,967,785
66,,887733,,995577
440044,,887711
11,,995588,,557733
330022,,995544
99,,554400,,335555
6,156,371
832,606
1,991,024
324,214
9,304,215
1122,,444477,,447788
15,272,000
553333,,779988
220088,,116600
330055,,009966
1,122,047
143,395
-
11,,004477,,005544
1,265,442
335544,,004400
330099,,660066
666633,,664466
435,257
-
435,257
11,,771100,,770000
1,700,699
1100,,773366,,777788
13,571,301
3355,,335500,,117799
33,,559922,,884477
552288,,555522
34,012,379
3,575,170
243,455
((2288,,773344,,880000))
(24,259,702)
1100,,773366,,777788
13,571,301
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes
Fertoz limited | 35
FINANCIAL STATEMENTS
Consolidated statement of changes in equity
For the year ended 31 December 2023
IIssssuueedd
ccaappiittaall
AAccccuummuullaatteedd
lloosssseess
EEqquuiittyy
ccoommppoonneenntt ooff
ccoonnvveerrttiibbllee
nnoottee
SShhaarree
BBaasseedd
PPaayymmeenntt
RReesseerrvvee
TTrraannssllaattiioonn
RReesseerrvvee
TToottaall
eeqquuiittyy
$$
$$
$$ $$
$$
$$
Balance at 1 January 2023
3344,,001122,,337799
((2244,,225599,,770022))
--
33,,557755,,117700
224433,,445555
1133,,557711,,330022
Loss after income tax
expense for the period
Other comprehensive loss for
the period
Total comprehensive
profit/(loss) for the period
Transaction with owners in
their capacity as owners:
Shares issued (Note 17)
Capital raising costs
Equity component of
convertible notes issued
Other shares issued (vesting
of performance shares)
Shares issued in lieu of
consulting fees
Share-based payments
--
--
--
((44,,447755,,009988))
--
((44,,447744,,009988))
115500,,000000
((6666,,331188))
--
227722,,000000
4477,,554433
--
--
--
--
--
--
--
--
--
--
--
--
993344,,557755
--
--
--
--
--
--
--
((227722,,000000))
--
--
--
228899,,667777
((44,,447755,,009988))
--
228855,,009977
228855,,009977
228855,,009977
((44,,119900,,000011))
--
--
--
--
--
--
115500,,000000
((6666,,331188))
993344,,557755
--
4477,,554433
228899,,667777
AAtt 3311 DDeecceemmbbeerr 22002233
3344,,441155,,660044
((2288,,773344,,880000))
993344,,557755 33,,559922,,884477
552288,,555522
1100,,773366,,777788
Balance at 1 January 2022
2299,,009999,,228844
((2200,,004444,,551122))
--
33,,116611,,111100
227777,,554411
1122,,449933,,442233
Loss after income tax
expense for the period
Other comprehensive loss for
the period
Total comprehensive
profit/(loss) for the period
Transaction with owners in
their capacity as owners:
--
--
--
((44,,221155,,119900))
--
((44,,221155,,119900))
Shares issued (Note 17)
Capital raising costs
55,,004455,,000000
((330033,,004488))
Share-based payments:
Options to brokers (capital
raising costs) (Note 31)
Exercised (Note 17)
Reverse previously
expensed conditions not met
Expense (Note 31)
((226688,,332244))
443399,,446677
--
--
--
--
--
--
--
--
AAtt 3311 DDeecceemmbbeerr 22002222
3344,,001122,,337799
((2244,,225599,,770022))
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
226688,,332244
((443399,,446677))
((226600,,776611))
884455,,996644
--
((44,,221155,,119900))
((3344,,008866))
((3344,,008866))
((3344,,008866)) ((44,,224499,,227766))
--
--
--
--
--
--
55,,004455,,000000
((330033,,004488))
--
--
((226600,,776611))
884455,,996644
33,,557755,,117700
224433,,445555
1133,,557711,,330011
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes
36 | Fertoz limited
NNoottee
22002233
$$
CCaasshh fflloowwss ffrroomm ooppeerraattiinngg aaccttiivviittiieess
Receipts from customers
Payments to suppliers and employees
Interest received
Net cash inflow / (outflow) from operating activities
29
((11,,773399,,996655))
CCaasshh fflloowwss ffrroomm iinnvveessttiinngg aaccttiivviittiieess
Payments for property, plant and equipment
Payments for right-of-use asset
Payments for exploration and evaluation assets
Receipts from sales of material from Fernie
Net cash inflow / (outflow) from investing activities
CCaasshh fflloowwss ffrroomm ffiinnaanncciinngg aaccttiivviittiieess
Proceeds from borrowings
Proceeds from convertible notes
Payments for costs associated with convertible note
securities
Proceeds of restructure of lease liability
Proceeds from issue of shares
Payments for equity raising costs
Lease principal repayments
Net cash inflow / (outflow) from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of
Effects of exchange rate changes on cash and
the financial period
cash equivalents
financial period
Cash and cash equivalents at the end of the
6
2022
$
3,791,085
(8,634,395)
7,362
(4,835,948)
(350,173)
(1,399,835)
(1,085,989)
828,627
(2,007,370)
-
-
-
-
4,850,000
(303,048)
(65,994)
4,480,958
(2,362,360)
5,196,846
26,891
2,861,377
33,,880033,,447733
((55,,555555,,000044))
1111,,556666
-
--
--
((11,,113333,,226644))
225599,,666633
((887733,,660011))
330000,,000000
11,,223300,,000000
((6666,,331188))
447777,,222244
115500,,000000
((221111,,223377))
11,,887799,,666699
((773333,,889977))
22,,886611,,337777
((443311,,662266))
11,,669955,,885544
-
-
--
The above consolidated statement of cashflows should be read in conjunction with the accompanying note
FINANCIAL STATEMENTS
Consolidated statement of cashflows
For the year ended 31 December 2023
CCaasshh fflloowwss ffrroomm ooppeerraattiinngg aaccttiivviittiieess
Receipts from customers
Payments to suppliers and employees
Interest received
NNoottee
22002233
$$
33,,880033,,447733
((55,,555555,,000044))
1111,,556666
-
Net cash inflow / (outflow) from operating activities
29
((11,,773399,,996655))
CCaasshh fflloowwss ffrroomm iinnvveessttiinngg aaccttiivviittiieess
Payments for property, plant and equipment
Payments for right-of-use asset
Payments for exploration and evaluation assets
Receipts from sales of material from Fernie
Net cash inflow / (outflow) from investing activities
CCaasshh fflloowwss ffrroomm ffiinnaanncciinngg aaccttiivviittiieess
Proceeds from borrowings
Proceeds from convertible notes
Payments for costs associated with convertible note
securities
Proceeds of restructure of lease liability
Proceeds from issue of shares
Payments for equity raising costs
Lease principal repayments
Net cash inflow / (outflow) from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of
the financial period
Effects of exchange rate changes on cash and
cash equivalents
Cash and cash equivalents at the end of the
financial period
6
--
--
((11,,113333,,226644))
225599,,666633
((887733,,660011))
330000,,000000
11,,223300,,000000
((6666,,331188))
447777,,222244
115500,,000000
--
((221111,,223377))
11,,887799,,666699
((773333,,889977))
22,,886611,,337777
((443311,,662266))
11,,669955,,885544
-
-
2022
$
3,791,085
(8,634,395)
7,362
(4,835,948)
(350,173)
(1,399,835)
(1,085,989)
828,627
(2,007,370)
-
-
-
-
4,850,000
(303,048)
(65,994)
4,480,958
(2,362,360)
5,196,846
26,891
2,861,377
The above consolidated statement of cashflows should be read in conjunction with the accompanying note
Fertoz limited | 37
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess
CCoorrppoorraattee IInnffoorrmmaattiioonn
The financial report of Fertoz Limited for the year ended 31 December 2023 was approved by the board on 28
March 2024.
Fertoz Limited (the Company) is a public company limited by shares incorporated and domiciled in Australia.
The Company’s registered office is located at Level 5, 126 Phillip Street, Sydney, NSW 2000.
BBaassiiss ooff pprreeppaarraattiioonn
These general-purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the
Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board
(‘IASB’). The Company is a for-profit entity for financial reporting purposes under Australian Accounting
Standards.
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the consolidated entity’s accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements are disclosed in note 2.
PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated
entity only. Supplementary information about the parent entity is disclosed in note 27.
The principal accounting policies adopted in the preparation of the financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
PPrriinncciipplleess ooff ccoonnssoolliiddaattiioonn
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Fertoz Limited
(‘company’ or ‘parent entity’) as of 31 December 2023 and the results of all subsidiaries for the year then ended.
Fertoz Limited and its subsidiaries together are referred to in these financial statements as the ‘consolidated
entity’ or the ‘group’.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls
an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They
are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated
entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference
between the consideration transferred and the book value of the share of the non-controlling interest acquired
is recognised directly in equity attributable to the parent.
38 | Fertoz limited
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities, and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair
value of any investment retained together with any gain or loss in profit or loss.
JJooiinntt aarrrraannggeemmeennttss
A joint arrangement is a contractual arrangement whereby two or more parties have joint access control. Joint
control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about
the relevant activities require the unanimous consent of the parties sharing control.
A joint arrangement is classified either as joint operation or joint venture, based on the rights and obligations of
To the extent the joint arrangement provides the Group with rights to the net assets of the arrangement, the
The Group reassesses whether the type of joint arrangement in which it is involved has changed when facts and
the parties to the arrangement.
arrangement is a joint venture.
circumstances change.
JJooiinntt ooppeerraattiioonnss
arrangement.
The Group’s joint operations are joint arrangements whereby the parties (the joint operators_ that have joint
control of the arrangement have rights to the assets, and obligations to the liabilities, relating to the
The Group recognises, in relation to its interest in the joint operation:
•
•
•
•
•
Its assets, including its share of any assets held jointly;
Its liabilities, including its share of any liabilities incurred jointly;
Its revenue from the sale of its share of the output arising from the joint operation;
Its share of the revenue from the sale of the output by the joint operation; and
Its expenses, including its share of any expenses incurred jointly.
When the Group sells or contributes assets to a joint operation, the Group recognises gains and losses on the
sale or contribution of assets that are attributable to the interest of the other joint operations. The Group
recognises the full amount of any loss when the sale or contribution of assets provides evidence of a reduction in
the net realisable value, or an impairment loss, of those assets.
When the Group purchases assets from a joint operation, it does not recognise its share of the gains and losses
until it resells the assets to an independent party. However, a loss on the transaction is recognised immediately if
the loss provides evidence of a reduction in the net realisable value of the assets to the purchased or and
The accounting policies of the assets, liabilities, revenues and expenses relating to the Group’s interest in a joint
operation have been changed where necessary to ensure consistency with the accounting policies adopted by
impairment loss.
the Group.
OOppeerraattiinngg sseeggmmeennttss
Operating segments are presented using the ‘management approach’, where the information presented is on
the same basis as the internal reports provided to the Chief Operating Decision Makers (“CODM”). The CODM is
responsible for the allocation of resources to operating segments and assessing their performance.
The financial statements are presented in Australian dollars, which is Fertoz Limited’s functional and
FFoorreeiiggnn ccuurrrreennccyy ttrraannssllaattiioonn
presentation currency.
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities, and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair
value of any investment retained together with any gain or loss in profit or loss.
JJooiinntt aarrrraannggeemmeennttss
A joint arrangement is a contractual arrangement whereby two or more parties have joint access control. Joint
control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about
the relevant activities require the unanimous consent of the parties sharing control.
A joint arrangement is classified either as joint operation or joint venture, based on the rights and obligations of
the parties to the arrangement.
To the extent the joint arrangement provides the Group with rights to the net assets of the arrangement, the
arrangement is a joint venture.
The Group reassesses whether the type of joint arrangement in which it is involved has changed when facts and
circumstances change.
JJooiinntt ooppeerraattiioonnss
The Group’s joint operations are joint arrangements whereby the parties (the joint operators_ that have joint
control of the arrangement have rights to the assets, and obligations to the liabilities, relating to the
arrangement.
The Group recognises, in relation to its interest in the joint operation:
•
•
•
•
•
Its assets, including its share of any assets held jointly;
Its liabilities, including its share of any liabilities incurred jointly;
Its revenue from the sale of its share of the output arising from the joint operation;
Its share of the revenue from the sale of the output by the joint operation; and
Its expenses, including its share of any expenses incurred jointly.
When the Group sells or contributes assets to a joint operation, the Group recognises gains and losses on the
sale or contribution of assets that are attributable to the interest of the other joint operations. The Group
recognises the full amount of any loss when the sale or contribution of assets provides evidence of a reduction in
the net realisable value, or an impairment loss, of those assets.
When the Group purchases assets from a joint operation, it does not recognise its share of the gains and losses
until it resells the assets to an independent party. However, a loss on the transaction is recognised immediately if
the loss provides evidence of a reduction in the net realisable value of the assets to the purchased or and
impairment loss.
The accounting policies of the assets, liabilities, revenues and expenses relating to the Group’s interest in a joint
operation have been changed where necessary to ensure consistency with the accounting policies adopted by
the Group.
OOppeerraattiinngg sseeggmmeennttss
Operating segments are presented using the ‘management approach’, where the information presented is on
the same basis as the internal reports provided to the Chief Operating Decision Makers (“CODM”). The CODM is
responsible for the allocation of resources to operating segments and assessing their performance.
FFoorreeiiggnn ccuurrrreennccyy ttrraannssllaattiioonn
The financial statements are presented in Australian dollars, which is Fertoz Limited’s functional and
presentation currency.
Fertoz limited | 39
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
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 rates at the dates of the transactions, 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 reclassified through profit or loss when the foreign operation or net investment is
disposed of.
IInnvveennttoorriieess
IInnccoommee ttaaxx
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and
liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior
periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be
applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or
substantively enacted, except for:
● When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset
or liability in a transaction that is not a business combination and that, at the time of the transaction,
affects neither the accounting nor taxable profits; or
● When the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and the timing of the reversal can be controlled, and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable
profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets
are recognised to the extent that it is probable that there are future taxable profits available to recover the
asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax
assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to
the same taxable authority on either the same taxable entity or different taxable entities which intend to settle
simultaneously.
CCuurrrreenntt aanndd nnoonn--ccuurrrreenntt ccllaassssiiffiiccaattiioonn
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12
months after the reporting period; or the asset is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are
classified as non-current.
40 | Fertoz limited
A liability is classified as current when: it is either expected to be settled in normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is
no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All
other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
CCaasshh aanndd ccaasshh eeqquuiivvaalleennttss
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-
term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value. For the statement of
cash flows presentation purposes, cash and cash equivalents also includes bank overdrafts (if any), which are
shown within borrowings in current liabilities on the statement of financial position.
Inventories are stated at the lower of cost and net realisable value on a weighted average basis. Cost
comprises direct materials and delivery costs, direct labour, import duties and other taxes, an appropriate
proportion of variable and fixed overhead expenditure based on normal operating capacity, and, where
applicable, transfers from cash flow hedging reserves in equity. Costs of purchased inventory are determined
after deducting rebates and discounts received or receivable.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery
costs, net of rebates and discounts received or receivable.
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.
PPrrooppeerrttyy,, ppllaanntt aanndd eeqquuiippmmeenntt
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that 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 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.
taken to profit or loss.
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
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
A liability is classified as current when: it is either expected to be settled in normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is
no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All
other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
CCaasshh aanndd ccaasshh eeqquuiivvaalleennttss
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-
term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value. For the statement of
cash flows presentation purposes, cash and cash equivalents also includes bank overdrafts (if any), which are
shown within borrowings in current liabilities on the statement of financial position.
IInnvveennttoorriieess
Inventories are stated at the lower of cost and net realisable value on a weighted average basis. Cost
comprises direct materials and delivery costs, direct labour, import duties and other taxes, an appropriate
proportion of variable and fixed overhead expenditure based on normal operating capacity, and, where
applicable, transfers from cash flow hedging reserves in equity. Costs of purchased inventory are determined
after deducting rebates and discounts received or receivable.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery
costs, net of rebates and discounts received or receivable.
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.
PPrrooppeerrttyy,, ppllaanntt aanndd eeqquuiippmmeenntt
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that 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 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.
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 profit or loss.
Fertoz limited | 41
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
LLeeaasseess
Right-of-use assets
A right-of-use asset is recognized at the commencement date of a lease. The right-of-use asset is measured
at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease
payments made at or before the commencement date net of any lease incentives received, any initial direct
costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be
incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain
ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life.
Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The group has elected not to recognize a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are
expensed to profit or loss as incurred.
Lease liabilities
A lease liability is recognized at the commencement date of a lease. The lease liability is initially recognized at
the present value of the lease payments to be made over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity’s incremental
borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable
lease payments that depend on an index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur,
and any anticipated termination penalties. The variable lease payments that do not depend on an index or a
rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a
rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a
lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss
if the carrying amount of the right-of-use asset is fully written down.
EExxpplloorraattiioonn aanndd eevvaalluuaattiioonn aasssseettss
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are
current is carried forward as an asset in the statement of financial position where it is expected that the
expenditure will be recovered through the successful development and exploitation of an area of interest, or by
its sale; or exploration activities are continuing in an area and activities have not reached a stage which permits
a reasonable estimate of the existence or otherwise of economically recoverable reserves. Where a project or
an area of interest has been abandoned, the expenditure incurred thereon is written off in the year in which the
decision is made.
IImmppaaiirrmmeenntt ooff nnoonn--ffiinnaanncciiaall aasssseettss
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in-
use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate
specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent
cash flows are grouped together to form a cash-generating unit.
TTrraaddee aanndd ootthheerr ppaayyaabblleess
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of
the financial year and which are unpaid. Due to their short-term nature, they are measured at amortised cost
and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
42 | Fertoz limited
BBoorrrroowwiinnggss
FFiinnaannccee ccoossttss
PPrroovviissiioonnss
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method.
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the period in which they are incurred.
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a
result of a past event, it is probable the consolidated entity will be required to settle the obligation, and a
reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best
estimate of the consideration required to settle the present obligation at the reporting date, considering the
risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are
discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the
passage of time is recognised as a finance cost.
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled within 12 months of the reporting date are measured at the amounts expected to be
EEmmppllooyyeeee bbeenneeffiittss
Short-term employee benefits
paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leaves not expected to be settled within 12 months of the reporting
date are measured as the present value of expected future payments to be made in respect of services
provided by employees up to the reporting date. Consideration is given to expected future wage and salary
levels, experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the reporting date on corporate bond rate with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of
services, where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently
determined using either the Monte Carlo, Trinomial or Black-Scholes option pricing model that takes into
account the exercise price, the term of the option, market based vesting conditions, the impact of dilution, the
share price at grant date and expected price volatility of the underlying share, the expected dividend yield and
the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the consolidated entity receives the services that entitle the employees to receive payment. No account
is taken of any other vesting conditions.
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
BBoorrrroowwiinnggss
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method.
FFiinnaannccee ccoossttss
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the period in which they are incurred.
PPrroovviissiioonnss
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a
result of a past event, it is probable the consolidated entity will be required to settle the obligation, and a
reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best
estimate of the consideration required to settle the present obligation at the reporting date, considering the
risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are
discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the
passage of time is recognised as a finance cost.
EEmmppllooyyeeee bbeenneeffiittss
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled within 12 months of the reporting date are measured at the amounts expected to be
paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leaves not expected to be settled within 12 months of the reporting
date are measured as the present value of expected future payments to be made in respect of services
provided by employees up to the reporting date. Consideration is given to expected future wage and salary
levels, experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the reporting date on corporate bond rate with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of
services, where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently
determined using either the Monte Carlo, Trinomial or Black-Scholes option pricing model that takes into
account the exercise price, the term of the option, market based vesting conditions, the impact of dilution, the
share price at grant date and expected price volatility of the underlying share, the expected dividend yield and
the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the consolidated entity receives the services that entitle the employees to receive payment. No account
is taken of any other vesting conditions.
Fertoz limited | 43
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity
over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value
of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the
vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at
each reporting date less amounts already recognised in previous periods.
The value of equity-settled transactions is determined by applying either the Monte Carlo or Black-Scholes
option pricing model, taking into consideration the terms and conditions on which the award was granted. The
cumulative charge to profit or loss until settlement of the liability is calculated as follows:
● during the vesting period, the liability at each reporting date is the fair value of the award at that date
●
multiplied by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the
liability at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the
cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to
market conditions are considered to vest irrespective of whether or not that market condition has been met,
provided all other conditions are satisfied.
EEmmppllooyyeeee bbeenneeffiittss ((ccoonnttiinnuueedd))
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not
been made. An additional expense is recognised, over the remaining vesting period, for any modification that
increases the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or
employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over
the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled
award, the cancelled and new award is treated as if they were a modification.
FFaaiirr vvaalluuee mmeeaassuurreemmeenntt
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date; and assumes that the
transaction will take place either: in the principal market; or in the absence of a principal market, in the most
advantageous market. Fair value is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair
value measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of
relevant observable inputs and minimising the use of unobservable inputs.
The carrying values of financial assets and financial liabilities approximate their fair values due to their short-
term nature.
44 | Fertoz limited
IIssssuueedd ccaappiittaall
Ordinary shares are classified as equity.
net of tax, from the proceeds.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
Dividends are recognised when declared during the financial year and no longer at the discretion of the
DDiivviiddeennddss
company.
EEaarrnniinnggss ppeerr sshhaarree
Basic earnings per share
financial year.
Diluted earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Fertoz Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
GGooooddss aanndd SSeerrvviicceess TTaaxx ((‘‘GGSSTT’’)) aanndd ootthheerr ssiimmiillaarr ttaaxxeess
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is
not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the
statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the tax authority, are presented as operating
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
cash flows.
tax authority.
RReevveennuuee RReeccooggnniittiioonn
Sale of phosphate
Sale of phosphate is recognised when the phosphate is delivered to the customer and there is no unfulfilled
obligation that could affect the customers’ acceptance of the phosphate. Delivery occurs when the phosphate
has been shipped to the specific location, the risks of obsolescence and loss have been transferred to the
customer, and either the customer has accepted the phosphate in accordance with the sales contract the
acceptance provisions have lapsed, or the group has objective evidence that all criteria for acceptance have
been satisfied. Payment is typically due after 30-45 days from invoice date. There is no significant financing
component in the pricing.
Unsatisfied performance obligations
The Group continues to recognise its contract liabilities under AASB 15 in respect of any unsatisfied performance
obligations, which are disclosed as Unearned revenue in the Consolidated Statement of Financial Position.
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
IIssssuueedd ccaappiittaall
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
DDiivviiddeennddss
Dividends are recognised when declared during the financial year and no longer at the discretion of the
company.
EEaarrnniinnggss ppeerr sshhaarree
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Fertoz Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
GGooooddss aanndd SSeerrvviicceess TTaaxx ((‘‘GGSSTT’’)) aanndd ootthheerr ssiimmiillaarr ttaaxxeess
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is
not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the
statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the tax authority, are presented as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
tax authority.
RReevveennuuee RReeccooggnniittiioonn
Sale of phosphate
Sale of phosphate is recognised when the phosphate is delivered to the customer and there is no unfulfilled
obligation that could affect the customers’ acceptance of the phosphate. Delivery occurs when the phosphate
has been shipped to the specific location, the risks of obsolescence and loss have been transferred to the
customer, and either the customer has accepted the phosphate in accordance with the sales contract the
acceptance provisions have lapsed, or the group has objective evidence that all criteria for acceptance have
been satisfied. Payment is typically due after 30-45 days from invoice date. There is no significant financing
component in the pricing.
Unsatisfied performance obligations
The Group continues to recognise its contract liabilities under AASB 15 in respect of any unsatisfied performance
obligations, which are disclosed as Unearned revenue in the Consolidated Statement of Financial Position.
Fertoz limited | 45
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
Financing components
The Group does not recognise adjustments to transition prices or Contract balances where the period between
the transfer of promised goods or services to the customer and payment by customer does not exceed one
year.
Loss making contracts
A provision for loss making contracts is recorded for the difference between the expected costs of fulfilling a
contract and the expected remaining economic benefits to be received where the forecast remaining costs
exceed the forecast remaining benefits.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to the net carrying amount of the financial asset.
TTrraaddee aanndd ootthheerr rreecceeiivvaabblleess
Trade receivables are initially recognised at the fair value of the goods provided to the customer and
subsequently at amortised cost less expected credit loss allowances. Other receivables are initially recognised
at cost and subsequently measured at amortised cost less expected credit loss allowances. Any gain or loss
arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses), together
with foreign exchange gains and losses. Impairment losses are presented as separate line items in the
statement of profit or loss and other comprehensive income.
NNeeww aanndd AAmmeennddeedd AAccccoouunnttiinngg PPoolliicciieess AAddoopptteedd
The Company has considered the implications of new or amended AASBs which have become applicable for
the current annual financial period beginning on or after 1 January 2023. It has been determined by the
Company that there is no impact, material or otherwise, of the new or amended AASBs and therefore no
changes to Company’s accounting policies. No retrospective change in accounting policy or material
reclassification has occurred during the financial year.
AAccccoouunnttiinngg SSttaannddaarrddss IIssssuueedd bbuutt nnoott yyeett eeffffeeccttiivvee
The Australian Accounting Standards Board has issued a number of new and amended Accounting Standards
and Interpretations that have mandatory application dates for future reporting periods, some of which are
relevant to the Company. The Company has decided not to early adopt any of these new and amended
pronouncements. The Company does not anticipate that there will be any material impact arising from the
issue of these new and amended pronouncements.
46 | Fertoz limited
NNoottee 22.. CCrriittiiccaall aaccccoouunnttiinngg jjuuddggeemmeennttss,, eessttiimmaatteess aanndd aassssuummppttiioonnss
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually evaluates
its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other various
factors,
including expectations of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results.
The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Revenue recognition
The group has recognised revenue net of trade discounts and adjustment for moisture content during the year.
The customer is entitled to receive a discount if the moisture contents in the product are above certain levels as
specified in the contract. Management determined that the discount applied as a result of moisture content has
been adjusted for when recognising the revenue and a significant reversal in the amount of revenue recognised
will not occur, therefore it is appropriate to recognise revenue on the invoiced amount net of discounts upon
delivery of the product.
Revenue from the sale of product removed from the group’s exploration sites has been offset against
capitalised exploration and evaluation expenditure as the sale of this product is part of the bulk sampling and
evaluation phase for these tenements.
Trade Receivables
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To measure expected credit losses, trade receivables have
been grouped based on shared credit risk characteristics and the days past due. The group has concluded that
the expected loss rates for trade receivables are a reasonable approximation based on payment profiles of
sales over a period of 36 months before 31 December 2023 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.
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the
fair value of the equity instruments at the date at which they are granted. The fair value is determined by using
market price of the shares or either the Monte Carlo or Black-Scholes model taking into account the terms and
conditions upon which the instruments were granted. These models require a number of assumptions to be
made including the expected future volatility of the share price, the estimated vesting date and the risk-free
interest rate. The accounting estimates and assumptions relating to equity-settled share-based payments
would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period
but may impact profit or loss and equity.
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the consolidated entity will commence
commercial production in the future, from which time the costs will be amortised in proportion to the depletion
of the mineral resources. Key judgements are applied in considering costs to be capitalised which includes
determining expenditures directly related to these activities and allocating overheads between those that are
expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either
through successful development or sale of the relevant mining interest. Factors that could impact the future
commercial production at the mine include the level of reserves and resources, future technology changes,
which could impact the cost of mining, future legal changes and changes in commodity prices. To the extent
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 22.. CCrriittiiccaall aaccccoouunnttiinngg jjuuddggeemmeennttss,, eessttiimmaatteess aanndd aassssuummppttiioonnss
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually evaluates
its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other various
factors,
including expectations of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results.
The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Revenue recognition
The group has recognised revenue net of trade discounts and adjustment for moisture content during the year.
The customer is entitled to receive a discount if the moisture contents in the product are above certain levels as
specified in the contract. Management determined that the discount applied as a result of moisture content has
been adjusted for when recognising the revenue and a significant reversal in the amount of revenue recognised
will not occur, therefore it is appropriate to recognise revenue on the invoiced amount net of discounts upon
delivery of the product.
Revenue from the sale of product removed from the group’s exploration sites has been offset against
capitalised exploration and evaluation expenditure as the sale of this product is part of the bulk sampling and
evaluation phase for these tenements.
Trade Receivables
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To measure expected credit losses, trade receivables have
been grouped based on shared credit risk characteristics and the days past due. The group has concluded that
the expected loss rates for trade receivables are a reasonable approximation based on payment profiles of
sales over a period of 36 months before 31 December 2023 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.
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the
fair value of the equity instruments at the date at which they are granted. The fair value is determined by using
market price of the shares or either the Monte Carlo or Black-Scholes model taking into account the terms and
conditions upon which the instruments were granted. These models require a number of assumptions to be
made including the expected future volatility of the share price, the estimated vesting date and the risk-free
interest rate. The accounting estimates and assumptions relating to equity-settled share-based payments
would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period
but may impact profit or loss and equity.
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the consolidated entity will commence
commercial production in the future, from which time the costs will be amortised in proportion to the depletion
of the mineral resources. Key judgements are applied in considering costs to be capitalised which includes
determining expenditures directly related to these activities and allocating overheads between those that are
expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either
through successful development or sale of the relevant mining interest. Factors that could impact the future
commercial production at the mine include the level of reserves and resources, future technology changes,
which could impact the cost of mining, future legal changes and changes in commodity prices. To the extent
Fertoz limited | 47
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in
which this determination is made.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and settlement of liabilities in the normal course of
business.
As disclosed in the financial statements, the Group incurred a net loss after tax of $4,475,098 and net operating
cash outflows of $1,739,965 for the year ended 31 December 2023. As at 31 December 2023 the Group had cash
of $1,695,854.
The ability of the Group to continue as a going concern is principally dependent upon the following conditions:
•
•
•
the ability of the Group to meet its cashflow forecasts;
the ability of the Group to raise capital, as and when necessary; and
the ability of the Group to sell non-core assets.
These conditions give rise to material uncertainty which may cast significant doubt over the Group’s ability to
continue as a going concern.
The directors believe that the going concern basis of preparation is appropriate due to the following reasons:
•
•
•
The Group has a cash balance of $1,695,854.
proven ability of the Group to raise the necessary funding or settle debts via the issuance of
shares; and
the Group is operating an expanding rock phosphate and organic fertilizer business and plans to
continue to expand this business in the coming year.
Should the Group be unable to continue as a going concern, it may be required to realise its assets and
extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those
stated in the financial report. This financial report does not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts or classification of liabilities and
appropriate disclosures that may be necessary should the Group be unable to continue as a going concern.
NNoottee 33.. OOppeerraattiinngg sseeggmmeennttss
Identification of reportable operating segments
The consolidated entity is organised into two operating segments based on geographical location being
Australian and North American operations, reflected by the subsidiaries in the Group. These operating segments
are based on the internal reports that are reviewed and used by the board of Directors (who are identified as
the Chief Operating Decision Makers (“CODM”)) in assessing performance and in determining the allocation of
resources.
The CODM reviews earnings before and after tax. The accounting policies adopted for internal reporting to the
CODM are consistent with those adopted in the financial statements.
Where applicable, corporate costs, finance costs, interest revenue, tax and foreign currency gains and losses
are not allocated to segments as they are not considered part of the core operations of the segments and are
managed on a consolidated entity basis thus disclosed under unallocated category.
48 | Fertoz limited
CCoonnssoolliiddaatteedd –– 3311 DDeecceemmbbeerr
22002233
Revenue
Sales of phosphate fertilizer
Other income
Total revenue and other
income
AAuussttrraalliiaa
$$
503,729
82,494
586,223
NNoorrtthh
AAmmeerriiccaa
$$
2,282,134
-
2,282,134
TToottaall
$$
2,785,863
82,494
2,868,357
UUnnaallllooccaatteedd
$$
-
-
-
-
Profit/(Loss) before income tax
(21,829)
(3,192,006)
(1,261,263)
(4,475,098)
expense
Income tax revenue
Profit/(Loss) after income tax
expense
Assets
Segment assets
Segment liabilities
Segment net assets
CCoonnssoolliiddaatteedd –– 3311 DDeecceemmbbeerr
22002222
Revenue
Sales of phosphate fertilizer
Other income
Total revenue and other income
Profit/(Loss) before income tax
expense
Income tax revenue
Profit/(Loss) after income tax
expense
Assets
Segment assets
Segment liabilities
Segment net assets
Segment non-current asset
-
-
-
(21,829)
(3,192,006)
(1,261,263)
(4,475,098)
502,368
(33,120)
469,248
10,599,801
(880,196)
9,719,605
1,345,309
(797,384)
547,925
12,447,478
(1,710,700)
10,736,778
AAuussttrraalliiaa
$$
1,477,296
35,628
1,512,924
-
NNoorrtthh
AAmmeerriiccaa
$$
2,079,511
2,079,511
-
-
UUnnaallllooccaatteedd
$$
TToottaall
$$
3,556,807
35,628
3,592,435
-
-
-
-
-
44,593
(2,496,335)
(1,736,448)
(4,215,190)
44,593
(2,496,335)
(1,736,448)
(4,215,190)
794,163
(222,093)
572,070
12,523,529
(1,304,203)
11,219,326
1,954,308
(174,403)
1,779,905
15,272,000
(1,700,699)
13,571,301
Non-current assets, excluding financial instruments and deferred tax
assets, located in:
AAuussttrraalliiaa
NNoorrtthh AAmmeerriiccaa
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
--
99,,223377,,440011
99,,223377,,440011
-
8,980,001
8,980,001
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
CCoonnssoolliiddaatteedd –– 3311 DDeecceemmbbeerr
22002233
Revenue
Sales of phosphate fertilizer
Other income
Total revenue and other
income
Profit/(Loss) before income tax
expense
Income tax revenue
Profit/(Loss) after income tax
expense
Assets
Segment assets
Segment liabilities
Segment net assets
CCoonnssoolliiddaatteedd –– 3311 DDeecceemmbbeerr
22002222
Revenue
Sales of phosphate fertilizer
Other income
Total revenue and other income
Profit/(Loss) before income tax
expense
Income tax revenue
Profit/(Loss) after income tax
expense
Assets
Segment assets
Segment liabilities
Segment net assets
Segment non-current asset
AAuussttrraalliiaa
$$
503,729
82,494
586,223
NNoorrtthh
AAmmeerriiccaa
$$
2,282,134
-
2,282,134
UUnnaallllooccaatteedd
$$
-
-
-
TToottaall
$$
2,785,863
82,494
2,868,357
(21,829)
(3,192,006)
(1,261,263)
(4,475,098)
-
-
-
-
(21,829)
(3,192,006)
(1,261,263)
(4,475,098)
502,368
(33,120)
469,248
10,599,801
(880,196)
9,719,605
1,345,309
(797,384)
547,925
12,447,478
(1,710,700)
10,736,778
AAuussttrraalliiaa
$$
1,477,296
35,628
1,512,924
NNoorrtthh
AAmmeerriiccaa
$$
2,079,511
-
2,079,511
UUnnaallllooccaatteedd
$$
TToottaall
$$
-
-
-
3,556,807
35,628
3,592,435
44,593
(2,496,335)
(1,736,448)
(4,215,190)
-
-
-
-
44,593
(2,496,335)
(1,736,448)
(4,215,190)
794,163
(222,093)
572,070
12,523,529
(1,304,203)
11,219,326
1,954,308
(174,403)
1,779,905
15,272,000
(1,700,699)
13,571,301
Non-current assets, excluding financial instruments and deferred tax
assets, located in:
AAuussttrraalliiaa
NNoorrtthh AAmmeerriiccaa
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
--
99,,223377,,440011
99,,223377,,440011
-
8,980,001
8,980,001
Fertoz limited | 49
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 44.. RReevveennuuee aanndd ootthheerr iinnccoommee
Sales Revenue
Sale of phosphate fertilizer products – at point in time
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
22,,778855,,886633
22,,778855,,886633
3,556,807
3,556,807
During the year, the group sold material it removed as bulk sample from its Fernie Project for a total amount
of $259,663 (2022: $828,627). The proceeds were recognised against the carrying cost of the Fernie Project as
the project is still in the exploration and evaluation phase and accounted for under AASB 6.
Other income
Interest
Other income
1111,,990066
7,642
8822,,449944
8822,,449944
35,628
35,628
50 | Fertoz limited
Numerical reconciliation of income tax and tax at statutory rate
Profit/ (loss) before income tax expenses from continuing operations
((44,,447755,,009988))
(4,215,190)
Tax at statutory tax rate of 25% (2022: 25%)
((11,,111188,,777755))
(1,053,797)
NNoottee 55.. IInnccoommee ttaaxx
IInnccoommee ttaaxx eexxppeennsseess
Current tax expense
Deferred tax expense
Aggregate income tax expenses
Tax effect on amounts which are not deductible/(taxable) in
calculating income
Tax adjustment for tax rate variance in foreign jurisdictions
Entertainment expenses
Share-based payments
Under/Over Provision
Non-deductible Convertible Note interest
Deferred tax assets derecognised/(recognised)
Income tax expense
UUnnrreeccooggnniisseedd ddeeffeerrrreedd ttaaxx aasssseettss
Unused tax losses
Unused capital losses
Capital raising costs in equity
Accruals and provisions
Other deductible temporary differences
AASB16 Lease Liability
CCoonnssoolliiddaatteedd
22002233
$$
((772277,,339999))
772277,,339999
--
2022
$
(772,236)
772,236
-
331122,,556666
11,,554499
7722,,444422
44,,881199
772277,,339999
--
-
1100,,000000
339944,,008811
113388,,882255
444444,,222299
11,,339966,,337733
249,591
3,536
195,050
(166,616)
772,236
-
-
10,000
503,235
37,428
2
-
2222,,117799,,996699
17,900,376
Deferred tax assets not taken up at 25% (2022: 25%)
66,,114400,,886699
4,613,510
2244,,556633,,447788
18,454,041
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 55.. IInnccoommee ttaaxx
IInnccoommee ttaaxx eexxppeennsseess
Current tax expense
Deferred tax expense
Aggregate income tax expenses
CCoonnssoolliiddaatteedd
22002233
$$
((772277,,339999))
772277,,339999
--
2022
$
(772,236)
772,236
-
Numerical reconciliation of income tax and tax at statutory rate
Profit/ (loss) before income tax expenses from continuing operations
((44,,447755,,009988))
(4,215,190)
Tax at statutory tax rate of 25% (2022: 25%)
((11,,111188,,777755))
(1,053,797)
Tax effect on amounts which are not deductible/(taxable) in
calculating income
Tax adjustment for tax rate variance in foreign jurisdictions
Entertainment expenses
Share-based payments
Under/Over Provision
Non-deductible Convertible Note interest
Deferred tax assets derecognised/(recognised)
Income tax expense
UUnnrreeccooggnniisseedd ddeeffeerrrreedd ttaaxx aasssseettss
Unused tax losses
Unused capital losses
Capital raising costs in equity
Accruals and provisions
Other deductible temporary differences
AASB16 Lease Liability
331122,,556666
11,,554499
7722,,444422
--
44,,881199
772277,,339999
-
249,591
3,536
195,050
(166,616)
-
772,236
-
2222,,117799,,996699
17,900,376
1100,,000000
339944,,008811
113388,,882255
444444,,222299
11,,339966,,337733
10,000
503,235
37,428
2
-
2244,,556633,,447788
18,454,041
Deferred tax assets not taken up at 25% (2022: 25%)
66,,114400,,886699
4,613,510
Fertoz limited | 51
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 66.. CCuurrrreenntt aasssseettss –– CCaasshh aanndd ccaasshh eeqquuiivvaalleennttss
NNoottee 77bb.. CCuurrrreenntt aasssseettss –– IInnvveennttoorryy
Cash at bank
CCoonnssoolliiddaatteedd
22002233
$$
11,,669955,,885544
11,,669955,,885544
2022
$
2,861,377
2,861,377
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the
statement of cash flows as follows:
Balances as above
Balance as per statement of cashflows
11,,669955,,885544
11,,669955,,885544
2,861,377
2,861,377
NNoottee 77aa.. CCuurrrreenntt aasssseettss –– TTrraaddee aanndd ootthheerr rreecceeiivvaabblleess
Inventory consists of the following
Crushed raw ore
Finished products
The amount of inventory recognised in cost of goods sold expense during the year ended 31 December 2023
was $804,839 (2022: $1,987,539)
NNoottee 88.. CCuurrrreenntt aasssseettss –– OOtthheerr ccuurrrreenntt aasssseettss
Trade receivables
Less: expected credit loss provision
Other receivables
CCoonnssoolliiddaatteedd
22002233
$$
443388,,005511
((110011,,330011))
5566,,226633
339933,,001133
2022
$
1,226,554
(53,301)
499,841
1,673,094
GST & other receivables
NNoottee 99.. NNoonn--ccuurrrreenntt aasssseettss –– EExxpplloorraattiioonn aanndd eevvaalluuaattiioonn aasssseettss
The following table shows the movement in lifetime expected credit loss that has been recognised for trade
receivables in accordance with the simplified approach set out in AASB 9: Financial Instruments.
Lifetime ECL opening balance
Add: expected credit loss provision
Closing balance
5533,,330011
4488,,000000
110011,,330011
11,110
42,191
53,301
The balance of receivables that remain within initial trade terms (tabled below) are considered to be of
acceptable credit quality.
AAtt 3311 DDeecceemmbbeerr 22002233
At 31 December 2022
GGrroossss aammoouunntt
PPaasstt dduuee &&
iimmppaaiirreedd
PPaasstt dduuee bbuutt
nnoott iimmppaaiirreedd
WWiitthhiinn iinniittiiaall
ttrraaddee tteerrmmss
$$
438,051
1,226,554
$$
101,301
53,301
$$
27,359
66,357
$$
309,391
1,106,896
Exploration and evaluation assets, at cost
Reconciliations of the carrying amounts at the beginning and the end of
the current and previous financial year are set out below
Movements in property, plant and equipment
Carrying amount at beginning of the period
Additions
Proceeds from sale of material removed from Fernie
Foreign exchange movement
Carrying amount at the end of period
Recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful
development and commercial exploitation of projects or alternatively through the sale of the area of interest.
CCoonnssoolliiddaatteedd
22002233
$$
668899,,009988
7766,,558844
776655,,668822
2022
$
995,493
231,422
1,226,915
CCoonnssoolliiddaatteedd
22002233
$$
5522,,557744
5522,,557744
2022
$
206,399
206,399
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
66,,887733,,995577
6,156,371
66,,115566,,337711
11,,111133,,226644
((225599,,666633))
((113366,,001155))
66,,887733,,995577
5,958,789
1,085,989
(828,627)
(59,780)
6,156,371
52 | Fertoz limited
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 77bb.. CCuurrrreenntt aasssseettss –– IInnvveennttoorryy
Inventory consists of the following
Crushed raw ore
Finished products
CCoonnssoolliiddaatteedd
22002233
$$
668899,,009988
7766,,558844
776655,,668822
2022
$
995,493
231,422
1,226,915
The amount of inventory recognised in cost of goods sold expense during the year ended 31 December 2023
was $804,839 (2022: $1,987,539)
NNoottee 88.. CCuurrrreenntt aasssseettss –– OOtthheerr ccuurrrreenntt aasssseettss
GST & other receivables
NNoottee 99.. NNoonn--ccuurrrreenntt aasssseettss –– EExxpplloorraattiioonn aanndd eevvaalluuaattiioonn aasssseettss
Exploration and evaluation assets, at cost
Reconciliations of the carrying amounts at the beginning and the end of
the current and previous financial year are set out below
Movements in property, plant and equipment
Carrying amount at beginning of the period
Additions
Proceeds from sale of material removed from Fernie
Foreign exchange movement
Carrying amount at the end of period
CCoonnssoolliiddaatteedd
22002233
$$
5522,,557744
5522,,557744
2022
$
206,399
206,399
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
66,,887733,,995577
6,156,371
66,,115566,,337711
11,,111133,,226644
((225599,,666633))
((113366,,001155))
66,,887733,,995577
5,958,789
1,085,989
(828,627)
(59,780)
6,156,371
Recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful
development and commercial exploitation of projects or alternatively through the sale of the area of interest.
Fertoz limited | 53
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 1100.. NNoonn--ccuurrrreenntt aasssseettss –– PPrrooppeerrttyy,, ppllaanntt aanndd eeqquuiippmmeenntt
NNoottee 1133.. RRiigghhtt--ooff--uussee aasssseettss aanndd lleeaassee lliiaabbiilliittiieess
The group has leased assets – motor vehicles, office building, and pelletizing plant during the year
ended 31 December 2023. Information about the leases is presented below.
RRiigghhtt--ooff--uussee aasssseettss
At 1 January 2023
Additions
Amortisation
Exchange difference
LLeeaassee lliiaabbiilliittiieess
At 1 January 2023
New leases
Interest expenses
Lease payments
Foreign exchange movement
At 31 December 2023
Lease liability within one year
Lease liability between 1-5 years
MMoottoorr
VVeehhiiccllee
$$
131,484
92,544
(87,876)
2,208
138,360
OOffffiiccee
BBuuiillddiinngg
$$
27,582
76,961
(38,148)
947
67,342
PPeelllleettiizziinngg
PPllaanntt
$$
1,831,958
-
(83,032)
3,945
1,752,871
MMoottoorr
VVeehhiiccllee
$$
91,604
67,619
8,035
(54,737)
(561)
111,960
50,710
61,250
OOffffiiccee
BBuuiillddiinngg
$$
28,576
76,961
1,248
(38,816)
(178)
67,791
39,766
28,025
PPeelllleettiizziinngg
PPllaanntt
$$
458,472
-
43,012
(117,684)
(1,351)
382,449
117,684
264,765
TToottaall
$$
1,991,024
169,505
(209,056)
7,100
1,958,573
TToottaall
$$
578,652
144,580
52,295
(211,237)
(2,090)
562,200
208,160
354,040
Interest expense (lease charges) amounting to $52,295 has been recognised in the profit or loss for the year
ended 31 December 2023. Amount of lease liability payments recognised in the statement of cashflows is
$211,237.
Cost or valuation
At 1 January 2023
Additions
Impairment22
Exchange difference
Balance at 31 December 2023
Accumulated depreciation
At 1 January 2023
Charge for the year
Exchange difference
Balance at 31 December 2023
NNeett bbooookk vvaalluuee
AAtt 3311 DDeecceemmbbeerr 22002233
At 31 December 2022
PPllaanntt &&
EEqquuiippmmeenntt
$$
AAsssseett uunnddeerr
CCoonnssttrruuccttiioonn11
$$
157,547
-
-
3,667
161,214
103,780
9,031
2,416
115,227
4455,,998877
53,767
778,840
-
(441,201)
21,245
358,884
-
-
-
-
335588,,888844
778,840
TToottaall
$$
936,387
-
(441,201)
24,912
520,098
103,780
9,031
2,416
115,227
440044,,887711
832,606
Note 1
Asset under construction consists of a storage shed which is currently under installation.
Note 2
An impairment was made on the granulator purchased in 2019 for $441,201 due to significant costs associated
with its construction and concerns over its life span and operating capability.
NNoottee 1111.. NNoonn--ccuurrrreenntt aasssseettss –– EEnnvviirroonnmmeennttaall bboonnddss
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
330022,,995544
324,214
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
442288,,664455
11,,006611,,222211
9955,,774455
99,,440088
5511,,224477
99,,557799
553333,,779988
11,,112222,,004477
Carrying amount at the end of the year
NNoottee 1122.. CCuurrrreenntt lliiaabbiilliittiieess --TTrraaddee aanndd ootthheerr ppaayyaabblleess
Trade creditors
Accruals
Other payables
54 | Fertoz limited
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 1133.. RRiigghhtt--ooff--uussee aasssseettss aanndd lleeaassee lliiaabbiilliittiieess
The group has leased assets – motor vehicles, office building, and pelletizing plant during the year
ended 31 December 2023. Information about the leases is presented below.
RRiigghhtt--ooff--uussee aasssseettss
At 1 January 2023
Additions
Amortisation
Exchange difference
LLeeaassee lliiaabbiilliittiieess
At 1 January 2023
New leases
Interest expenses
Lease payments
Foreign exchange movement
At 31 December 2023
Lease liability within one year
Lease liability between 1-5 years
MMoottoorr
VVeehhiiccllee
$$
131,484
92,544
(87,876)
2,208
138,360
OOffffiiccee
BBuuiillddiinngg
$$
27,582
76,961
(38,148)
947
67,342
PPeelllleettiizziinngg
PPllaanntt
$$
1,831,958
-
(83,032)
3,945
1,752,871
MMoottoorr
VVeehhiiccllee
$$
91,604
67,619
8,035
(54,737)
(561)
111,960
50,710
61,250
OOffffiiccee
BBuuiillddiinngg
$$
28,576
76,961
1,248
(38,816)
(178)
67,791
39,766
28,025
PPeelllleettiizziinngg
PPllaanntt
$$
458,472
-
43,012
(117,684)
(1,351)
382,449
117,684
264,765
TToottaall
$$
1,991,024
169,505
(209,056)
7,100
1,958,573
TToottaall
$$
578,652
144,580
52,295
(211,237)
(2,090)
562,200
208,160
354,040
Interest expense (lease charges) amounting to $52,295 has been recognised in the profit or loss for the year
ended 31 December 2023. Amount of lease liability payments recognised in the statement of cashflows is
$211,237.
Fertoz limited | 55
FINANCIAL STATEMENTS
CCUURRRREENNTT
Loan – unsecured
Accrued interest
NNOONN--CCUURRRREENNTT
Loan – unsecured
Capitalised borrowing costs
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
330000,,000000
55,,009966
330055,,009966
--
--
--
330055,,009966
--
--
--
--
--
--
--
The key terms of the unsecured loan are as follows:
Related Party Disclosure: Loan facility provided by Boston First Capital Pty Ltd. Related party of Director,
Stuart Richardson.
Maturity:
The loan and interest will be repayable within 12 months
Repayments:
Principal and interest
Security:
Key covenants:
Nil
Nil
Interest costs:
10% per annum
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 1133.. RRiigghhtt--ooff--uussee aasssseettss aanndd lleeaassee lliiaabbiilliittiieess ((ccoonnttiinnuueedd))
NNoottee 1144.. BBoorrrroowwiinnggss
RRiigghhtt--ooff--uussee aasssseettss
At 1 January 2022
Additions
Amortisation
Exchange difference
LLeeaassee lliiaabbiilliittiieess
At 1 January 2022
New leases
Interest expenses
Lease payments
Foreign exchange movement
At 31 December 2022
Lease liability within one year
Lease liability between 1-5 years
MMoottoorr
VVeehhiiccllee
$$
81,086
84,209
(38,231)
4,420
131,484
MMoottoorr
VVeehhiiccllee
$$
55,188
57,860
4,044
(28,502)
3,014
91,604
38,640
52,964
OOffffiiccee
BBuuiillddiinngg
$$
60,553
-
(36,139)
3,168
27,582
PPeelllleettiizziinngg
PPllaanntt
$$
-
1,831,958
-
-
1,831,958
TToottaall
$$
141,639
1,916,167
(74,370)
7,588
1,991,024
OOffffiiccee
BBuuiillddiinngg
$$
61,089
-
1,903
(37,493)
3,077
28,576
28,576
-
PPeelllleettiizziinngg
PPllaanntt
$$
-
458,472
-
-
-
458,472
118,376
382,293
TToottaall
$$
116,277
516,332
5,947
(65,995)
6,091
578,652
143,395
435,257
Interest expense (lease charges) amounting to $5,947 has been recognised in the profit or loss for the year
ended 31 December 2022. Amount of payment of principal portion of lease liability recognised in the statement
of cashflows is $65,994.
The group leases office space which typically runs for two years. The group has the option to renew the lease
under the same conditions at the end of the lease. Renewal options have not been included in the lease term.
The group leases motor vehicles with a lease term of 3 years. At the expiry of the lease, the group has the option
to buy the vehicles for US $5,911 and US $5,985. Renewal options have not been included in the lease term.
The group leases a pelletising plant with a lease term of 5 years. At the expiry of the lease, the group has the
option to buy the equipment for US $101. As at commencement of agreement, the group paid an initial lump-
sum payment of US $936,000 with the remaining US $312,000 being financed. The option to buy is highly likely
to be exercised.
56 | Fertoz limited
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 1144.. BBoorrrroowwiinnggss
CCUURRRREENNTT
Loan – unsecured
Accrued interest
NNOONN--CCUURRRREENNTT
Loan – unsecured
Capitalised borrowing costs
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
330000,,000000
55,,009966
330055,,009966
--
--
--
330055,,009966
--
--
--
--
--
--
--
The key terms of the unsecured loan are as follows:
Related Party Disclosure: Loan facility provided by Boston First Capital Pty Ltd. Related party of Director,
Stuart Richardson.
Maturity:
The loan and interest will be repayable within 12 months
Repayments:
Principal and interest
Security:
Key covenants:
Nil
Nil
Interest costs:
10% per annum
Fertoz limited | 57
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 1155.. CCoonnvveerrttiibbllee nnoottee
NNoottee 1177.. EEqquuiittyy –– IIssssuueedd sshhaarree ccaappiittaall
NON-CURRENT
Issue of Convertible Notes at Face Value
Less: Component of convertible note recognised as Equity (refer Note 16)
Accrued interest
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
11,,223300,,000000
((993344,,557755))
1144,,118811
330099,,660066
--
--
--
--
On 20 November 2023, the Company received $1.23 million from the issue of 1,230,000 unlisted convertible
notes.
A summary of the material terms are as follows:
- Maturity period of 3 years.
- Interest rate of 10% per annum paid quarterly in arrears.
- Conversion price of $0.10 per share (adjustable as per ASX Listing Rule requirements)
- At the noteholder’s option, notes can be converted at any time into ordinary shares of the Company at the
conversion price to ordinary shares up to maturity date.
- Mandatory conversion by the Company upon maturity (3 years) at the conversion price into ordinary
shares.
- The face value of the convertible note is $1.00 per convertible note.
- Notes may not be sold or transferred prior to the maturity date without the Company’s consent.
- The convertible notes are unsecured.
NNoottee 1166.. EEqquuiittyy ccoommppoonneenntt ooff ccoonnvveerrttiibbllee nnoottee
Ordinary shares – fully paid
225577,,883344,,882222
257,001,488
3344,,441155,,660044
34,012,379
22002233
2022
22002233
2022
NNuummbbeerr ooff
Number of
sshhaarreess
shares
$$
$
Movements in share capital
DDeettaaiillss
DDaattee
NNoo ooff SShhaarreess
31 December 2021
227,600,960
Balance
released
Performance shares
fees
Placement
Shares issued under ESOP
18 January 2022
Shares in lieu of directors’
18 January 2022
22 June 2022
29 August 2022
Shares issued under ESOP
10 November 2022
656,073
400,000
400,000
26,944,455
1,000,000
31 December 2022
257,001,488
Share issuance costs
Balance
Shares in lieu of consultant
fees1
Placement2
Performance shares
released3
Performance shares
released4
Capital raising costs
BBaallaannccee aatt 3311 DDeecceemmbbeerr
22002233
4 April 2023
29 June 2023
23 June 2023
23 June 2023
-
-
-
-
-
IIssssuueedd
PPrriiccee
(($$))
0.365
0.288
0.20
0.18
0.20
-
-
-
-
-
AAmmoouunntt
(($$))
29,099,284
239,467
115,000
80,000
4,850,000
200,000
(571,372)
34,012,379
47,543
150,000
200,000
72,000
(66,318)
833,334
0.18
225577,,883344,,882222
3344,,441155,,660044
22002233
NNuummbbeerr ooff
NNootteess
2022
Number of
Notes
$$
22002233
2022
been issued. The shares were valued at the fair value on the consultant’s services provided.
1 At 31 December 2023 286,521 shares are to be issued to a consultant for services provided. The ordinary shares have not yet
$
-
-
2 On 29 June 2023, the Company completed a placement to the directors who subscribed for 833,334 shares at $0.18 each for
total proceeds of $150,000. The placement was subject to shareholder approval which was received on 30 May 2023.
3 On 4 April 2023, the vesting milestone for 1,000,000 performance shares to the Chief Executive Officer was met. The shares
have been issued out of treasury shares. The performance shares were valued at the fair value of the shares at the date of
the general meeting where they were approved.
4 On 23 June 2023, the vesting milestone for 400,000 performance shares to the two employees was met. The shares have
been issued out of treasury shares. The performance shares were valued at the fair value of the shares at the date of the
general meeting where they were approved.
CCoonnvveerrttiibbllee NNootteess
Issue of convertible notes
1122,,330000,,000000
1122,,330000,,000000
-
-
993344,,557755
993344,,557755
Refer to Note 15 for details of the convertible notes issued during the year ended 31 December 2023.
58 | Fertoz limited
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 1177.. EEqquuiittyy –– IIssssuueedd sshhaarree ccaappiittaall
Ordinary shares – fully paid
225577,,883344,,882222
257,001,488
3344,,441155,,660044
34,012,379
22002233
NNuummbbeerr ooff
sshhaarreess
2022
Number of
shares
22002233
2022
$$
$
Movements in share capital
DDeettaaiillss
DDaattee
NNoo ooff SShhaarreess
Balance
Performance shares
released
Shares issued under ESOP
Shares in lieu of directors’
fees
Placement
Shares issued under ESOP
Share issuance costs
Balance
Shares in lieu of consultant
fees1
Placement2
Performance shares
released3
Performance shares
released4
Capital raising costs
BBaallaannccee aatt 3311 DDeecceemmbbeerr
22002233
31 December 2021
227,600,960
18 January 2022
18 January 2022
22 June 2022
29 August 2022
10 November 2022
31 December 2022
4 April 2023
29 June 2023
23 June 2023
23 June 2023
656,073
400,000
400,000
26,944,455
1,000,000
-
257,001,488
-
833,334
-
-
-
IIssssuueedd
PPrriiccee
(($$))
0.365
0.288
0.20
0.18
0.20
-
-
0.18
-
-
-
AAmmoouunntt
(($$))
29,099,284
239,467
115,000
80,000
4,850,000
200,000
(571,372)
34,012,379
47,543
150,000
200,000
72,000
(66,318)
225577,,883344,,882222
3344,,441155,,660044
1 At 31 December 2023 286,521 shares are to be issued to a consultant for services provided. The ordinary shares have not yet
been issued. The shares were valued at the fair value on the consultant’s services provided.
2 On 29 June 2023, the Company completed a placement to the directors who subscribed for 833,334 shares at $0.18 each for
total proceeds of $150,000. The placement was subject to shareholder approval which was received on 30 May 2023.
3 On 4 April 2023, the vesting milestone for 1,000,000 performance shares to the Chief Executive Officer was met. The shares
have been issued out of treasury shares. The performance shares were valued at the fair value of the shares at the date of
the general meeting where they were approved.
4 On 23 June 2023, the vesting milestone for 400,000 performance shares to the two employees was met. The shares have
been issued out of treasury shares. The performance shares were valued at the fair value of the shares at the date of the
general meeting where they were approved.
Fertoz limited | 59
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
((aa)) Treasury shares
Treasury shares
3311 DDeecceemmbbeerr
22002233
NNuummbbeerr ooff
sshhaarreess
31 December
2022
Number of
shares
((77,,558855,,995500))
(5,577,786)
3300 JJuunnee
22002233
31 December
2022
$$
--
$
-
Treasury shares are shares in Fertoz Limited that are held by the Fertoz Limited ESPP Trust (the Trust) for the
purpose of issuing shares under the Fertoz Limited employee share scheme. Shares issued to employees are
recognised on a first-in-first-out basis.
Movements in treasury shares
DDeettaaiillss
DDaattee
NNoo ooff SShhaarreess
IIssssuueedd
PPrriiccee (($$))
AAmmoouunntt (($$))
BBaallaannccee aatt 3311 DDeecceemmbbeerr
22002222
Acquisition of shares by the
Trust on resignation of
Patrick Avery as non-
executive director
Transfer of shares in
satisfaction of vesting
performance rights
BBaallaannccee aatt 3311
DDeecceemmbbeerr 22002233
((55,,557777,,778866))
-
--
4 May 2023
(3,408,164)
29 June 2023
1,400,000
((77,,558855,,995500))
-
-
-
-
--
NNoottee 1177.. EEqquuiittyy –– IIssssuueedd sshhaarree ccaappiittaall ((ccoonnttiinnuueedd))
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the
company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares
have no par value and the company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
Share buy-back
No on-market share buy-back occurred during the financial year.
Capital risk management
The Board's policy is to maintain a strong base to maintain investor, creditor and market confidence and to
sustain future development of the business. As an emerging explorer and developer, the Group does not
establish a return on capital. Capital management requires the maintenance of a strong cash balance to
support ongoing exploration and development.
NNoottee 1188.. EEqquuiittyy –– RReesseerrvveess
Foreign currency translation reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of
foreign operations to Australian dollars.
Share based payment reserve
The reserve is used to recognise share-based payments made to suppliers and employees.
60 | Fertoz limited
NNoottee 1199.. EEqquuiittyy –– ddiivviiddeennddss
Dividends
No dividends were paid during the year.
Note 20. Financial Instruments
FFiinnaanncciiaall rriisskk mmaannaaggeemmeenntt oobbjjeeccttiivveess
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency
risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk
management program focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the consolidated entity.
Risk management is carried out by the Chief Financial Officer under policies approved by the Board of Directors
(“the Board”). These policies include identification and analysis of the risk exposure of the consolidated entity
and appropriate procedures, controls and risk limits. The Chief Financial Officer identifies, evaluates and hedges
financial risks within the consolidated entity's operating units and reports to the Board on a monthly basis.
MMaarrkkeett rriisskk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to
foreign currency risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using
sensitivity analysis and cash flow forecasting.
liabilities at the reporting date were as follows:
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial
US Dollars
Canadian Dollars
AAsssseettss
LLiiaabbiilliittiieess
22002233
$$
227744,,889911
559911,,998844
886666,,887755
2022
$
946,325
1,287,431
2,233,756
22002233
$$
((776644,,555522))
((111155,,664444))
((888800,,119966))
2022
$
(383,114)
(339,504)
(722,618)
The consolidated entity had net financial liabilities denominated in foreign currencies of $13,321 as at 31
December 2023 (2022: net financial assets of $1,511,138). Based on this exposure, had the Australian dollar
weakened by 5% or strengthened by 5% against these foreign currencies with all other variables held constant,
the consolidated entity's net financial assets would have been $666 (2022: $75,557) lower and $666 (2022:
$75,557) higher respectively. Additionally, a +/-5% movement in the AUD against the USD/CAD would have
resulted in the net equity position of the consolidated entity decreasing by $14,255 (2022: $1,704) or increasing by
$14,255 (2022: $1,704) upon the translation of its foreign operations into AUD.
Price risk
There are currently no financial assets or liabilities subject to price risks. With respect to inventories, the policy of
the consolidated entity is to sell phosphate-based fertilizer at the spot price, and it has not entered into any
hedging contracts. The consolidated entity's revenues were exposed to fluctuation in the price of this
commodity. If the average selling price for the financial year had increased/decreased by 10% the change in the
profit before income tax for the consolidated group would have been an increase /decrease of $278,586 (2022:
$355,681). If there was a 10% increase or decrease in market price of inventory, the net realizable value of
inventory on hand would increase/(decrease) by $76,568 (2022: $122,692). As the phosphate-based fertilizer on
hand are held at cost there would be no impact on profit or loss.
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 1199.. EEqquuiittyy –– ddiivviiddeennddss
Dividends
No dividends were paid during the year.
Note 20. Financial Instruments
FFiinnaanncciiaall rriisskk mmaannaaggeemmeenntt oobbjjeeccttiivveess
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency
risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk
management program focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the consolidated entity.
Risk management is carried out by the Chief Financial Officer under policies approved by the Board of Directors
(“the Board”). These policies include identification and analysis of the risk exposure of the consolidated entity
and appropriate procedures, controls and risk limits. The Chief Financial Officer identifies, evaluates and hedges
financial risks within the consolidated entity's operating units and reports to the Board on a monthly basis.
MMaarrkkeett rriisskk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to
foreign currency risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using
sensitivity analysis and cash flow forecasting.
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial
liabilities at the reporting date were as follows:
US Dollars
Canadian Dollars
AAsssseettss
LLiiaabbiilliittiieess
22002233
$$
227744,,889911
559911,,998844
886666,,887755
2022
$
946,325
1,287,431
2,233,756
22002233
$$
((776644,,555522))
((111155,,664444))
((888800,,119966))
2022
$
(383,114)
(339,504)
(722,618)
The consolidated entity had net financial liabilities denominated in foreign currencies of $13,321 as at 31
December 2023 (2022: net financial assets of $1,511,138). Based on this exposure, had the Australian dollar
weakened by 5% or strengthened by 5% against these foreign currencies with all other variables held constant,
the consolidated entity's net financial assets would have been $666 (2022: $75,557) lower and $666 (2022:
$75,557) higher respectively. Additionally, a +/-5% movement in the AUD against the USD/CAD would have
resulted in the net equity position of the consolidated entity decreasing by $14,255 (2022: $1,704) or increasing by
$14,255 (2022: $1,704) upon the translation of its foreign operations into AUD.
Price risk
There are currently no financial assets or liabilities subject to price risks. With respect to inventories, the policy of
the consolidated entity is to sell phosphate-based fertilizer at the spot price, and it has not entered into any
hedging contracts. The consolidated entity's revenues were exposed to fluctuation in the price of this
commodity. If the average selling price for the financial year had increased/decreased by 10% the change in the
profit before income tax for the consolidated group would have been an increase /decrease of $278,586 (2022:
$355,681). If there was a 10% increase or decrease in market price of inventory, the net realizable value of
inventory on hand would increase/(decrease) by $76,568 (2022: $122,692). As the phosphate-based fertilizer on
hand are held at cost there would be no impact on profit or loss.
Fertoz limited | 61
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
Interest rate risk
The consolidated entity has no interest rate risk. All interest bearing assets (term deposits) and liabilities
(including lease liabilities, loans and convertible notes) are subject to fixed interest rates.
CCrreeddiitt rriisskk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency
credit information, confirming references and setting appropriate credit limits. The consolidated entity obtains
guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting
date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets,
as disclosed in the statement of financial position and notes to the financial statements. The consolidated entity
does not hold any collateral.
The Company has bank deposits with the Commonwealth Bank of Australia , Toronto Dominion Bank, and JP
Morgan Chase Bank, N.A. which have a S&P short term credit rating of A-1+, A-1+, and A-1.
IImmppaaiirrmmeenntt
The Company uses the simplified approach to impairment under AASB 9: Financial Instruments. The simplified
approach does not require tracking of changes in credit risk at every reporting period, but instead requires the
recognition of lifetime expected credit loss at all times. This approach is applicable to trade receivables or
contract assets which do not contain a significant financing component.
LLiiqquuiiddiittyy rriisskk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly
cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become
due and payable.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing
facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of
financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
Debtor financing facility (unused)
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
11,,000000,,000000
11,,000000,,000000
1,000,000
1,000,000
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
11 yyeeaarr oorr lleessss
$$
BBeettwweeeenn 11
aanndd 22 yyeeaarrss
$$
BBeettwweeeenn 22
aanndd 55 yyeeaarrss
$$
OOvveerr 55
yyeeaarrss
$$
TToottaall
ccoonnttrraaccttuuaall
ccaasshhffllooww
$$
Audit services – BDO Audit Pty Ltd.
Tax services – BDO Services Pty Ltd
Audit services – Moore Australia Audit (WA)
-%
8%
10%
10%
533,798
208,160
305,096
-
11,,004477,,005544
-
139,362
-
-
113399,,336622
-
214,678
-
309,606
552244,,228844
-
-
-
--
533,798
562,200
305,096
309,606
11,,771100,,770000
NNoottee 2233.. CCoonnttiinnggeennccyy
There were no contingent assets or liabilities at balance date.
CCoonnssoolliiddaatteedd –– 22002233
NNoonn--ddeerriivvaattiivveess
Non-interest bearing
Trade payables and other
payables
Lease liability
Borrowings
Convertible note
TToottaall nnoonn--ddeerriivvaattiivveess
62 | Fertoz limited
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
11 yyeeaarr oorr lleessss
aanndd 22 yyeeaarrss
aanndd 55 yyeeaarrss
%%
$$
$$
$$
BBeettwweeeenn 11
BBeettwweeeenn 22
TToottaall
OOvveerr 55
ccoonnttrraaccttuuaa
yyeeaarrss
ll ccaasshhffllooww
$$
$$
CCoonnssoolliiddaatteedd –– 22002222
NNoonn--ddeerriivvaattiivveess
Non-interest bearing
Trade payables and other
payables
Lease liability
TToottaall nnoonn--ddeerriivvaattiivveess
-%
8%
1,122,047
143,395
00..33%%
11,,226655,,444422
-
123,256
112233,,225566
-
312,001
331122,,000011
-
-
--
1,122,047
578,652
11,,770000,,669999
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above. Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
NNoottee 2211.. KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell CCoommppeennssaattiioonn
CCoommppeennssaattiioonn
The aggregate compensation made to directors and other members while they were key management
personnel of the consolidated entity is set out below:
Short-term benefits
Share-based payment
OOtthheerr
Blackwood Capital Ltd, a director related entity of Mr Richardson, assisted with the convertible note raise during
the year. For the assistance provided, Blackwood Capital received brokerage fees of $71,170 incl GST.
NNoottee 2222.. AAuuddiittoorrss rreemmuunneerraattiioonn
During the financial year the following fees were paid or payable for services provided by BDO Audit Pty Ltd
and Moore Australia Audit (WA), the auditors of the company, its network firms and unrelated firms:
CCoonnssoolliiddaatteedd
22002233
$$
446699,,225544
226677,,557744
773366,,882288
2022
$
596,714
586,058
1,182,772
CCoonnssoolliiddaatteedd
22002233
$$
117744,,881133
77,,773300
4433,,000000
222255,,554433
2022
$
106,416
13,540
-
119,956
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
CCoonnssoolliiddaatteedd –– 22002222
NNoonn--ddeerriivvaattiivveess
Non-interest bearing
Trade payables and other
payables
Lease liability
TToottaall nnoonn--ddeerriivvaattiivveess
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
11 yyeeaarr oorr lleessss
$$
BBeettwweeeenn 11
aanndd 22 yyeeaarrss
$$
BBeettwweeeenn 22
aanndd 55 yyeeaarrss
$$
OOvveerr 55
yyeeaarrss
$$
TToottaall
ccoonnttrraaccttuuaa
ll ccaasshhffllooww
$$
-%
8%
00..33%%
1,122,047
143,395
11,,226655,,444422
-
123,256
112233,,225566
-
312,001
331122,,000011
-
-
--
1,122,047
578,652
11,,770000,,669999
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above. Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
NNoottee 2211.. KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell CCoommppeennssaattiioonn
CCoommppeennssaattiioonn
The aggregate compensation made to directors and other members while they were key management
personnel of the consolidated entity is set out below:
Short-term benefits
Share-based payment
CCoonnssoolliiddaatteedd
22002233
$$
446699,,225544
226677,,557744
773366,,882288
2022
$
596,714
586,058
1,182,772
OOtthheerr
Blackwood Capital Ltd, a director related entity of Mr Richardson, assisted with the convertible note raise during
the year. For the assistance provided, Blackwood Capital received brokerage fees of $71,170 incl GST.
NNoottee 2222.. AAuuddiittoorrss rreemmuunneerraattiioonn
During the financial year the following fees were paid or payable for services provided by BDO Audit Pty Ltd
and Moore Australia Audit (WA), the auditors of the company, its network firms and unrelated firms:
Audit services – BDO Audit Pty Ltd.
Tax services – BDO Services Pty Ltd
Audit services – Moore Australia Audit (WA)
NNoottee 2233.. CCoonnttiinnggeennccyy
There were no contingent assets or liabilities at balance date.
CCoonnssoolliiddaatteedd
22002233
$$
117744,,881133
77,,773300
4433,,000000
222255,,554433
2022
$
106,416
13,540
-
119,956
Fertoz limited | 63
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 2244.. CCoommmmiittmmeennttss
EExxpplloorraattiioonn
So as to maintain current rights to tenure of exploration tenements, the group will be required to outlay
amounts in respect of tenement rent to the relevant governing authorities (C$10 – C$40 per hectare) or to incur
exploration expenditures in lieu (C$5 -C$20 per hectare). These work requirement outlays which arise in
relation to granted tenements are as follows:
CCoonnssoolliiddaatteedd
22002233
$$
332200,,556699
774400,,447766
--
2022
$
266,295
990,127
-
Due within one year
Due after one year and within five years
Due after five years
NNoottee 2255.. RReellaatteedd PPaarrttyy ttrraannssaaccttiioonnss
Parent entity
Fertoz Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 27.
Key management personnel
Disclosures relating to key management personnel are set out in note 21.
Other transactions with key management personnel
Refer to note 14 for details of the loan provided by Mr Stuart Richardson, a Director of the Company.
NNoottee 2266.. PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn
Set out below is the supplementary information about the parent entity, Fertoz Limited.
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in
Statement of profit or loss and other comprehensive income
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Loss after income tax
Total comprehensive loss
PPaarreenntt
22002233
$$
2022
$
((11,,228811,,228822))
((11,,228811,,228822))
(1,664,453)
(1,664,453)
64 | Fertoz limited
PPaarreenntt
22002233
$$
2022
$
11,,334455,,330099
1,954,308
2222,,008866,,777766
21,510,063
448877,,777788
779977,,338844
252,184
294,867
3355,,335500,,117799
33,,559922,,884477
34,012,379
3,575,170
((1177,,665533,,663344))
(16,372,352)
2211,,228899,,339922
21,215,196
NNoottee 2266.. PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn ((ccoonnttiinnuueedd))
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued share capital
Share based payment reserve
Accumulated loss
Total equity
2022.
Contingent liabilities
2022.
Significant accounting policies
note 1, except for the following:
NNoottee 2277.. IInntteerreessttss iinn ssuubbssiiddiiaarriieess
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 31 December 2023 and
The parent entity had no contingent liabilities as at 31 December 2023 and 2022.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2023 and
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries
in accordance with the accounting policy described in note 1:
Name of entity
PPrriinncciippaall ppllaaccee ooff bbuussiinneessss //
CCoouunnttrryy ooff iinnccoorrppoorraattiioonn
Fertoz International Organic Inc.
Canada
Fertoz Agriculture Pty Ltd.
Fertoz Organics Inc.
Australia
United States
OOwwnneerrsshhiipp iinntteerreesstt
22002233
%%
100%
100%
100%
2022
%
100%
100%
100%
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 2266.. PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn ((ccoonnttiinnuueedd))
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued share capital
Share based payment reserve
Accumulated loss
Total equity
PPaarreenntt
22002233
$$
2022
$
11,,334455,,330099
1,954,308
2222,,008866,,777766
21,510,063
448877,,777788
779977,,338844
252,184
294,867
3355,,335500,,117799
33,,559922,,884477
34,012,379
3,575,170
((1177,,665533,,663344))
(16,372,352)
2211,,228899,,339922
21,215,196
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 31 December 2023 and
2022.
Contingent liabilities
The parent entity had no contingent liabilities as at 31 December 2023 and 2022.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2023 and
2022.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in
note 1, except for the following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
NNoottee 2277.. IInntteerreessttss iinn ssuubbssiiddiiaarriieess
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries
in accordance with the accounting policy described in note 1:
Name of entity
PPrriinncciippaall ppllaaccee ooff bbuussiinneessss //
CCoouunnttrryy ooff iinnccoorrppoorraattiioonn
Fertoz International Organic Inc.
Canada
Fertoz Agriculture Pty Ltd.
Fertoz Organics Inc.
Australia
United States
OOwwnneerrsshhiipp iinntteerreesstt
22002233
%%
100%
100%
100%
2022
%
100%
100%
100%
Fertoz limited | 65
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 2288.. JJooiinntt ooppeerraattiioonnss
NNoottee 3300.. LLoossss ppeerr sshhaarree
OOwwnneerrsshhiipp iinntteerreesstt
22002233
%
2022
%
Principal
place of
business
USA
50%
-
NNaammee ooff eennttiittyy
Principal activities
Fertoz Organics, Inc (“Fertoz”) and
Excel Industries (“EI”) JO1
EI is responsible for
providing the physical
infrastructure and
Fertoz is responsible for
the pelleting plant and
manufacturing of the
product.
1 Joint operation to increase sales of rock phosphate in the USA.
NNoottee 2299.. RReeccoonncciilliiaattiioonn ooff pprrooffiitt aafftteerr iinnccoommee ttaaxx ttoo nneett ccaasshh ffrroomm ooppeerraattiinngg aaccttiivviittiieess
Loss after income tax expense for the year
Adjustments for:
Share-based payments
Provision for doubtful debts
Impairment expense
Depreciation
Lease and borrowing interest
Change in operating assets and liabilities
Decrease/(Increase) in trade and other receivables
Decrease/(Increase) in inventories
(Decrease)/increase in trade and other payables
NNeett ccaasshh uusseedd iinn ooppeerraattiinngg aaccttiivviittiieess
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
(4,475,098)
(4,215,190)
289,677
48,000
441,201
218,087
74,338
780,202
-
-
82,962
5,947
1,433,996
453,951
(224,117)
(1,739,965)
(1,034,995)
(831,392)
376,519
(4,835,948)
Non-cash transactions
During the year ended 31 December 2023, the company entered into lease agreements adding $169,505 to right-
of-use assets net of upfront payments made of $24,925.
The only changes to liabilities arising from financing activities are as disclosed in note 13 Leases, note 14
borrowings and note 15 convertible notes.
66 | Fertoz limited
Earnings per share for profit/(loss) from continuing operations
Loss after income tax expense for the period
Weighted average number of shares used in calculating basic earnings per
225500,,330055,,334444
238,137,690
Weighted average number of shares used in calculating diluted earnings
225500,,330055,,334444
238,137,690
share
per share
Basic loss per share
Diluted loss per share
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
((44,,447755,,009988))
(4,215,190)
NNuummbbeerr
Number
CCeennttss
11..7799
11..7799
Cents
1.73
1.73
At 31 December 2023, there were 7,500,000 (2022: 12,650,000) options outstanding which could potentially dilute
basic earnings per share in the future. Because there is a loss from continuing operations, these would have an
anti-dilutive effect and therefore diluted earnings per share is the same as the basic earnings per share.
NNoottee 3311.. SShhaarree--bbaasseedd ppaayymmeennttss
Expenses arising from share-based payment transactions
((aa)) PPeerrffoorrmmaannccee SShhaarreess
Total expenses arising from share-based payment transactions recognised during the period as part of
contract for services in terms of options and shares issued to directors, employees and consultants were
$289,677 (2022: $980,559).
For the reporting period, movement in performance rights are as per below:
3311 DDeecceemmbbeerr 22002233
GGrraanntt
ddaattee
2266//0044//22002222
0055//0099//22002222
-
-
EExxeerrcciiss
BBaallaannccee aatt
ee
tthhee ssttaarrtt ooff
EExxppiirryy ddaattee
pprriiccee
tthhee yyeeaarr
GGrraanntteedd
EExxeerrcciisseedd//
vveesstteedd
EExxppiirreedd//
ffoorrffeeiitteedd//
ootthheerr
BBaallaannccee
aatt tthhee
eenndd ooff
tthhee
ppeerriioodd
$0.00
6,750,000
-
(1,000,000)
$0.00
-
1,800,0001
(400,000)
66,,775500,,000000
11,,880000,,000000
((11,,440000,,0000))
-
-
--
5,750,000
1,400,000
77,,115500,,000000
WWeeiigghhtteedd aavveerraaggee eexxeerrcciissee pprriiccee
$0.00
$0.00
$0.00
1 The grant date is 5 September 2022 however this was incorrectly not recognised at 31 December 2022. The share-based
payments were not to key management personnel and the amount relating to the prior year but expensed during the current
year is not material. Terms of these performance shares are detailed below.
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 3300.. LLoossss ppeerr sshhaarree
Earnings per share for profit/(loss) from continuing operations
Loss after income tax expense for the period
Weighted average number of shares used in calculating basic earnings per
share
Weighted average number of shares used in calculating diluted earnings
per share
Basic loss per share
Diluted loss per share
CCoonnssoolliiddaatteedd
22002233
$$
2022
$
((44,,447755,,009988))
(4,215,190)
NNuummbbeerr
225500,,330055,,334444
Number
238,137,690
225500,,330055,,334444
238,137,690
CCeennttss
11..7799
11..7799
Cents
1.73
1.73
At 31 December 2023, there were 7,500,000 (2022: 12,650,000) options outstanding which could potentially dilute
basic earnings per share in the future. Because there is a loss from continuing operations, these would have an
anti-dilutive effect and therefore diluted earnings per share is the same as the basic earnings per share.
NNoottee 3311.. SShhaarree--bbaasseedd ppaayymmeennttss
Expenses arising from share-based payment transactions
((aa)) PPeerrffoorrmmaannccee SShhaarreess
Total expenses arising from share-based payment transactions recognised during the period as part of
contract for services in terms of options and shares issued to directors, employees and consultants were
$289,677 (2022: $980,559).
For the reporting period, movement in performance rights are as per below:
3311 DDeecceemmbbeerr 22002233
GGrraanntt
ddaattee
EExxppiirryy ddaattee
2266//0044//22002222
0055//0099//22002222
-
-
EExxeerrcciiss
ee
pprriiccee
BBaallaannccee aatt
tthhee ssttaarrtt ooff
tthhee yyeeaarr
EExxeerrcciisseedd//
vveesstteedd
EExxppiirreedd//
ffoorrffeeiitteedd//
ootthheerr
GGrraanntteedd
BBaallaannccee
aatt tthhee
eenndd ooff
tthhee
ppeerriioodd
$0.00
6,750,000
-
(1,000,000)
$0.00
-
66,,775500,,000000
1,800,0001
11,,880000,,000000
(400,000)
((11,,440000,,0000))
-
-
--
5,750,000
1,400,000
77,,115500,,000000
WWeeiigghhtteedd aavveerraaggee eexxeerrcciissee pprriiccee
$0.00
$0.00
$0.00
1 The grant date is 5 September 2022 however this was incorrectly not recognised at 31 December 2022. The share-based
payments were not to key management personnel and the amount relating to the prior year but expensed during the current
year is not material. Terms of these performance shares are detailed below.
Fertoz limited | 67
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
During the year ended 31 December 2023, the Group agreed to issue 1,800,000 performance rights to two
employees. These are as follows:
NNoottee 3311.. SShhaarree--bbaasseedd ppaayymmeennttss ((ccoonnttiinnuueedd))
PPeerrffoorrmmaannccee
RRiigghhttss
NNuummbbeerr
AAssssuummeedd
VVeessttiinngg DDaattee
MMiilleessttoonnee ffoorr rreelleeaassee ffrroomm eessccrrooww
EEmmppllooyyeeee
RRiigghhttss
1,200,0001 Anniversary
dates
400,000 vested at commencement of employment.
400,000 rights will vest at each of the first and second
anniversary of continuing employment and in good
standing.
IIssssuuee
PPrriiccee
Nil
200,0002
7 May 2026
200,0002
20 May 2026
200,0002
30 May 2026
11,,880000,,000000
200,000 rights will vest when shares trading on ASX
at a VWAP of, or in excess of, $0.45 for 10 consecutive
days
Nil
200,000 rights will vest when shares trading on ASX
at a VWAP of, or in excess of, $0.55 for 10 consecutive
days
Nil
200,000 rights will vest when shares trading on ASX
at a VWAP of, of in excess of, $0.65 for 10 consecutive
days
Nil
1 The performance rights were valued at the date of commencement of employment for the two employees,
being 5 September 2022 at $0.18 per right for a total of $216,000, with a probability of vesting of 100% for each
tranche. Amount recognised during the year to 31 December 2023 was $191,638 (2022: $Nil).
2 The fair value of rights are determined at grant date, by the Company, using a Monte Carlo Simulation
Methodology (MCSM) that takes into account the share price at grant date, performance hurdles prices,
expected volatility (determined by reference to historical volatility of the share price), performance right life
based on a term of 3 years, the risk free rate, and the fact that the performance rights are not tradeable. The
inputs used for the MCSM pricing model for options outstanding during the year ended 31 December 2023 were
as follows:
GGrraanntt ddaattee
0055//0099//22002222
0055//0099//22002222
0055//0099//22002222
AAssssuummeedd
EExxppiirryy ddaattee
23/06/2026
23/06/2026
23/06/2026
SShhaarree
pprriiccee
aatt ggrraanntt
ddaattee
$0.18
$0.18
$0.18
NNuummbbeerr
IIssssuueedd
200,000
200,000
200,000
EExxeerrcciissee
pprriiccee
-
-
-
PPeerrffoorr--
mmaannccee
hhuurrddllee
pprriiccee
$0.45
$0.55
$0.65
RRiisskk--
ffrreeee
IInntteerreesstt
rraattee
3.25%
3.25%
3.25%
TTiimmee ttoo
aacchhiieevvee
hhuurrddllee
pprriiccee
FFaaiirr vvaalluuee
aatt ggrraanntt
ddaattee
3 years $0.1922
3 years
$0.1889
3 years $0.1845
EExxppeecctteedd
vvoollaattiilliittyy
85%
85%
85%
An amount of $7,342 was recognised during the period ended 31 December 2023 (2022: $Nil).
During the prior year ended 31 December 2022, the Group agreed to issue 7,750,000 performance rights to the
Chief Executive Officer. These are as follows:
PPeerrffoorrmmaannccee
AAssssuummeedd
RRiigghhttss
NNuummbbeerr
VVeessttiinngg DDaattee
MMiilleessttoonnee ffoorr rreelleeaassee ffrroomm eessccrrooww
IIssssuuee
PPrriiccee
CCEEOO RRiigghhttss 3,000,0001 Anniversary
1,000,000 vested at commencement of employment.
Nil
dates
1,000,000 rights will vest at each of the first and
second anniversary of continuing employment and in
good standing
1,000,0003 04/04/2028
Vest if the Company’s shares trade on ASX at a VWAP
Nil
of, or in excess of, $0.40 for 10 consecutive days
1,000,0003 04/04/2029
Vest if the Company’s shares trade on ASX at a VWAP
Nil
of, or in excess of, $0.50 for 10 consecutive days
2,000,0003 04/04/2030
Vest if the Company’s shares trade on ASX at a VWAP
Nil
of, or in excess of, $0.65 for 10 consecutive days
250,0002
31/12/2024
Achievement
of
10,000ha
of
reforested
or
rehabilitated land managed in a carbon project by
Nil
Fertoz Carbon before 31 December 2024
250,0002
31/12/2024
Sale of $500,000 of Carbon Credits in a project
Nil
managed by Fertoz Carbon before 31 December 2024
250,0002
31/12/2024
Achievement of 60,000t of fertilizer sales in any one
Nil
year before 31 December 2024
77,,775500,,000000
1 The performance rights were valued at the date of shareholders’ approval at the Annual General Meeting held
on 31 May 2022 at $0.20 per right for a total of $600,000, with a probability of vesting of 100%. During the year
ended 31 December 2022, the above performance
hurdle of employment commencement was met and the performance shares were exercised and ordinary
shares issued. The performance shares were valued at the fair value of the shares at the date of the general
meeting where they were approved, given that the performance hurdles had already been met at that date.
Amount recognised during the year to 31 December 2023 was $151,507.
2 The performance rights were valued at the date of commencement of employment at $0.20 per right for a
total of $100,000, with a probability of vesting of 100% for the reforested land and fertilizer sales milestones and
a probability of vesting of 0% for the carbon credit milestone. Amount recognised during the period to 31
December 2023 was $36,427.
68 | Fertoz limited
FINANCIAL STATEMENTS
Notes to the consolidated financial statements
For the year ended 31 December 2023
NNoottee 3311.. SShhaarree--bbaasseedd ppaayymmeennttss ((ccoonnttiinnuueedd))
During the prior year ended 31 December 2022, the Group agreed to issue 7,750,000 performance rights to the
Chief Executive Officer. These are as follows:
PPeerrffoorrmmaannccee
RRiigghhttss
NNuummbbeerr
AAssssuummeedd
VVeessttiinngg DDaattee
CCEEOO RRiigghhttss 3,000,0001 Anniversary
dates
MMiilleessttoonnee ffoorr rreelleeaassee ffrroomm eessccrrooww
1,000,000 vested at commencement of employment.
1,000,000 rights will vest at each of the first and
second anniversary of continuing employment and in
good standing
IIssssuuee
PPrriiccee
Nil
1,000,0003 04/04/2028
Vest if the Company’s shares trade on ASX at a VWAP
of, or in excess of, $0.40 for 10 consecutive days
Nil
1,000,0003 04/04/2029
Vest if the Company’s shares trade on ASX at a VWAP
of, or in excess of, $0.50 for 10 consecutive days
Nil
2,000,0003 04/04/2030
Vest if the Company’s shares trade on ASX at a VWAP
of, or in excess of, $0.65 for 10 consecutive days
Nil
250,0002
31/12/2024
or
Achievement
rehabilitated land managed in a carbon project by
Fertoz Carbon before 31 December 2024
reforested
10,000ha
of
of
Nil
250,0002
31/12/2024
Sale of $500,000 of Carbon Credits in a project
managed by Fertoz Carbon before 31 December 2024
Nil
250,0002
31/12/2024
Achievement of 60,000t of fertilizer sales in any one
year before 31 December 2024
Nil
77,,775500,,000000
1 The performance rights were valued at the date of shareholders’ approval at the Annual General Meeting held
on 31 May 2022 at $0.20 per right for a total of $600,000, with a probability of vesting of 100%. During the year
ended 31 December 2022, the above performance
hurdle of employment commencement was met and the performance shares were exercised and ordinary
shares issued. The performance shares were valued at the fair value of the shares at the date of the general
meeting where they were approved, given that the performance hurdles had already been met at that date.
Amount recognised during the year to 31 December 2023 was $151,507.
2 The performance rights were valued at the date of commencement of employment at $0.20 per right for a
total of $100,000, with a probability of vesting of 100% for the reforested land and fertilizer sales milestones and
a probability of vesting of 0% for the carbon credit milestone. Amount recognised during the period to 31
December 2023 was $36,427.
Fertoz limited | 69
FINANCIAL STATEMENTS
In the directors' opinion:
● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
● the attached financial statements and notes comply with International Financial Reporting Standards and
Interpretations as issued by the International Accounting Standards Board as described in note 1 to the
financial statements;
● the attached financial statements and notes give a true and fair view of the consolidated entity's financial
position as of 31 December 2023 and of its performance for the financial period ended on that date; and
● there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act
2001.
On behalf of the directors
_______________________________
SSttuuaarrtt RRiicchhaarrddssoonn
CChhaaiirrmmaann
2288 MMaarrcchh 22002244
Notes to the consolidated financial statements
For the year ended 31 December 2023
3 The fair value of rights are determined at grant date, by the Company, using a Monte Carlo Simulation
Methodology (MCSM) that takes into account the share price at grant date, performance hurdles prices,
expected volatility (determined by reference to historical volatility of the share price), performance right life
based on an assumed tenure of 10 years, the risk free rate, and the fact that the performance rights are not
tradeable. The inputs used for the MCSM pricing model for options outstanding during the period ended 31
December 2023 were as follows:
GGrraanntt ddaattee AAssssuummeedd
EExxppiirryy ddaattee
NNuummbbeerr
IIssssuueedd
SShhaarree
pprriiccee
AAtt ggrraanntt
ddaattee
EExxeerrcciissee
PPrriiccee
PPeerrffoorrmmaannccee
hhuurrddllee PPrriiccee
EExxppeecctteedd
vvoollaattiilliittyy
RRiisskk--ffrreeee
IInntteerreesstt
rraattee
TTiimmee ttoo
aacchhiieevvee
hhuurrddllee
pprriiccee
FFaaiirr vvaalluuee
aatt ggrraanntt
ddaattee
0044//0044//22002222 04/04/2032 1,000,000
$0.20
0044//0044//22002222 04/04/2032 1,000,000
$0.20
0044//0044//22002222 04/04/2032 2,000,000
$0.20
-
-
-
$0.40
86%
3.25%
6 years
$0.1922
$0.50
86%
3.25%
7 years
$0.1889
$0.65
86%
3.25%
8 years
$0.1845
An amount of $76,639 was recognised during the year ended 31 December 2023.
((aa)) OOppttiioonnss
During the previous year on 23 August 2021, the Company granted 5,000,000 broker options with respect to a
capital raising during the 2021 financial year. The broker options are exercisable at a price of $0.20 on or before
23 August 2024. The options were recognised at a fair value, based on Black Scholes Valuation Model, of $0.165
per option for a total value of $826,175. The valuation is based on an expected volatility of 91.4%, risk free interest
rate of 1.5%, expected life of 3 years and stock price of $0.26.
At 31 December 2023, the options with an average remaining life of 0.6 years, were vested and unexercised.
During the previous year on 29 August 2022, the Company granted 900,000 broker options with respect to a
capital raising in FY2022. The broker options are exercisable at a price of $0.27 on or before 29 August 2025.
The options were recognised at a fair value, based on Black Scholes Valuation Model, of $0.10 per option for a
total value of $89,974. The valuation is based on an expected volatility of 108.55%, risk free interest rate of 3.51%,
expected life of 3 years and stock price of $0.27.
At 31 December 2023, the options with an average remaining life of 1.6 years, were vested and unexercised.
During the year and with respect to the aforementioned capital raising in FY2022, the Company issued
1,600,000 options to Blackwood Capital Ltd, subject to shareholder approval, with an exercise price of $0.27,
expiring 3 years after issue. These options were issued (following shareholder approval on 30 May 2023) on 29
June 2023. The option valuation is calculated based upon fair value utilising the Black and Scholes valuation
model of $0.1114 per option for a total value of $178,350. The valuation assumes an issue date of 29 August 2022
and expiry date of three years from shareholder approval issue of 30 May 2026. The valuation is based on an
expected volatility of 108.55%, risk free interest rate of 3.51%, expected life of 3 years and stock price of $0.27.
At 31 December 2023, the options with an average remaining life of 2.4 years, were vested and unexercised.
The total value of the above options of $268,324 were previously recognised as capital raising costs in the 2022
financial statements.
NNoottee 3322.. EEvveennttss ssiinnccee tthhee eenndd ooff tthhee ffiinnaanncciiaall yyeeaarr
On 16 February 2024, the Company cancelled 7,585,950 shares pursuant to an employee share scheme buy-
back.
On 22 March 2024, Max Crowley resigned as joint Company Secretary.
70 | Fertoz limited
FINANCIAL STATEMENTS
DIRECTORS ‘ DECLERATION
For the year ended 31 December 2023
In the directors' opinion:
● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
● the attached financial statements and notes comply with International Financial Reporting Standards and
Interpretations as issued by the International Accounting Standards Board as described in note 1 to the
financial statements;
● the attached financial statements and notes give a true and fair view of the consolidated entity's financial
position as of 31 December 2023 and of its performance for the financial period ended on that date; and
● there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act
2001.
On behalf of the directors
_______________________________
SSttuuaarrtt RRiicchhaarrddssoonn
CChhaaiirrmmaann
2288 MMaarrcchh 22002244
Fertoz limited | 71
FINANCIAL STATEMENTS
INDEPENDENT
AUDITORS’
REPORT
AS OF 31 DECEMBER 2023
72 | Fertoz limited
FERTOZ LIMITED INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF FERTOZ LIMITED
Report on the Audit of the Financial Report
Moore Australia Audit (WA)
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace, WA 6831
T +61 8 9225 5355
F +61 8 9225 6181
www.moore-australia.com.au
Opinion
We have audited the financial report of Fertoz Limited (the “Company”) and its controlled entities (the
“Group”), which comprises the consolidated statement of financial position as at 31 December 2023,
the consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year ended
31 December 2023, and notes to the financial statements, including a summary of material accounting
policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
i.
ii.
giving a true and fair view of the Group’s financial position as at 31 December 2023 and of
its financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the “Code”) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We confirm that the independence declaration required by the Corporations Act 2001, has been given
to the directors of the Company, as at the time of this auditor’s report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter – Material Uncertainty Related to Going Concern
We draw attention to Note 2 of the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the Group’s
ability to continue as a going concern and therefore the Group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
Key Audit Matters
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.
57 I Page
Fertoz limited | 73
Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation.
FERTOZ LIMITED INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF FERTOZ LIMITED (CONTINUED)
Key Audit Matters (continued)
Revenue Recognition
Refer to Note 4 Revenue and Note 1 Revenue Recognition
The Group generates revenue predominantly from
the sale of crushed raw ores & fertilizer products.
Revenue is considered a key audit matter given the
significance of revenue to the Group’s results as
well as the fraud risk around cut-off including:
-
-
an overstatement of revenues through
premature revenue recognition or
recording of fictitious sales;
understatement of revenues when control
is transferred to the customer but not
recorded in the correct period.
Revenue is recognised when control is transferred
to the customer & the amount of revenue can be
reliably determined. This occurs when the product is
shipped.
Our procedures included, amongst others:
• We obtained an understanding of the Group’s
process & controls in place around sales revenue.
• We tested a sample of sales transactions made
during the year to invoices and receipt of cash.
• We assessed the Group’s policies for recognition
of sales against AASB 15 & checked these were
adequately disclosed in the financial report.
• We reviewed sales revenues close to and post
year-end to ensure revenues were recorded in the
correct periods.
Existence and Valuation of Inventories
Refer to Note 7b Inventories and Note 1 Inventories
The Group holds significant inventories (comprising
crushed raw ore materials and finished goods) with a
closing balance of $0.77 million.
The crushed raw ore is located in remote regions of
North America.
All inventories are valued at the lower of cost and net
realisable value (NRV).
Assessing the quantities of raw ore materials was
considered to be a key audit matter due to the
judgements and estimations involved. Impairment of
inventories is also subject to significant management
in an
judgment.
overstatement of the value of the inventories if the
historical cost is higher than the net realisable value.
factors could
These
result
Our procedures to test the existence & valuation of
inventories included the following:
• Obtained an understanding of the key processes
associated with the measurement of raw ore
inventories,
on-site
inspections & surveys of ore stock-piles
performed by a (management appointed) quantity
surveyor at or around balance date.
incorporated
which
• Testing
the Group’s
inventory reconciliations
which utilise the survey reports and associated
stock movements during the year and unit costs
for reasonableness. We also considered the
quantity surveyor’s experience, credentials &
independence.
We have therefore identified inventory existence and
valuation as a key audit matter.
• Given the remote location of the ore stock-piles,
obtained date stamped photos
taken by
Company personnel & placed reliance on the
quantity surveyor’s reports.
• Tested a sample of raw ore values at balance
date to subsequent sales to ensure that they
were recorded at the lower of cost and net
realisable value.
• Reviewed
statements.
the disclosures
in
the
financial
58 I Page
74 | Fertoz limited
FERTOZ LIMITED INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF FERTOZ LIMITED (CONTINUED)
Key Audit Matters (continued)
Revenue Recognition
Refer to Note 4 Revenue and Note 1 Revenue Recognition
The Group generates revenue predominantly from
Our procedures included, amongst others:
The Group holds significant inventories (comprising
Our procedures to test the existence & valuation of
crushed raw ore materials and finished goods) with a
inventories included the following:
the sale of crushed raw ores & fertilizer products.
Revenue is considered a key audit matter given the
significance of revenue to the Group’s results as
well as the fraud risk around cut-off including:
-
-
an overstatement of revenues through
premature revenue recognition or
recording of fictitious sales;
understatement of revenues when control
is transferred to the customer but not
recorded in the correct period.
Revenue is recognised when control is transferred
to the customer & the amount of revenue can be
reliably determined. This occurs when the product is
shipped.
Existence and Valuation of Inventories
Refer to Note 7b Inventories and Note 1 Inventories
closing balance of $0.77 million.
The crushed raw ore is located in remote regions of
North America.
All inventories are valued at the lower of cost and net
realisable value (NRV).
Assessing the quantities of raw ore materials was
considered to be a key audit matter due to the
judgements and estimations involved. Impairment of
inventories is also subject to significant management
judgment.
These
factors could
result
in an
overstatement of the value of the inventories if the
historical cost is higher than the net realisable value.
We have therefore identified inventory existence and
valuation as a key audit matter.
• We obtained an understanding of the Group’s
process & controls in place around sales revenue.
• We tested a sample of sales transactions made
during the year to invoices and receipt of cash.
• We assessed the Group’s policies for recognition
of sales against AASB 15 & checked these were
adequately disclosed in the financial report.
• We reviewed sales revenues close to and post
year-end to ensure revenues were recorded in the
correct periods.
• Obtained an understanding of the key processes
associated with the measurement of raw ore
inventories,
which
incorporated
on-site
inspections & surveys of ore stock-piles
performed by a (management appointed) quantity
surveyor at or around balance date.
• Testing
the Group’s
inventory reconciliations
which utilise the survey reports and associated
stock movements during the year and unit costs
for reasonableness. We also considered the
quantity surveyor’s experience, credentials &
independence.
• Given the remote location of the ore stock-piles,
obtained date stamped photos
taken by
Company personnel & placed reliance on the
quantity surveyor’s reports.
• Tested a sample of raw ore values at balance
date to subsequent sales to ensure that they
were recorded at the lower of cost and net
realisable value.
statements.
• Reviewed
the disclosures
in
the
financial
58 I Page
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF FERTOZ LIMITED (CONTINUED)
Key Audit Matters (continued)
Capitalised Exploration & Evaluation Assets
Refer to Note 9 Exploration and evaluation (“E & E”) assets & Note 1 E & E Assets
At balance date, the Group’s statement of financial
position
includes capitalised exploration and
evaluation (“E & E”) assets of approximately $6.87
million.
The ability to recognise and to continue to defer E &
E assets under AASB 6: Exploration for and
Evaluation of Mineral Resource is impacted by the
Group’s ability, and intention, to continue to explore
the tenements or its ability to realise this value
through development or sale.
Due to the significance of these assets (being
approximately 55% of the Group’s total assets) and
the subjectivity involved in assessing the ability to
continue to defer these assets, this is considered a
key audit matter.
Our procedures included:
• We evaluated the Group’s accounting policy to
recognise E & E assets using the criteria in the
accounting standard.
•
•
•
•
•
in
Ensuring the Group has the ongoing right to
the relevant exploration areas of
explore
interests by checking
the
relevant tenements to government registries (i.e.
British Columbia Mineral Titles Online Viewer)
and also considering whether
the Group
maintains the tenements in good standing.
the ownership of
Tested a sample of E & E expenditures
capitalised during the year to supporting
documentation including invoices.
Ensuring the Group is committed to continue E &
E activity in the relevant exploration areas of
interest by assessing their plans with respect to
future exploration and development expenditures
that have been budgeted. We assessed this
through discussions with management and
reviewing minutes of Board meetings, ASX
announcements made by the Group and other
internal reports.
Assessing the carrying value of these assets for
any indicators of impairment including comparing
against the Company’s market capitalisation.
Review and confirmation from the Company that
no capitalized expenditure in respect of areas of
interest or projects was impaired at year end and
should be written off.
• We also assessed the appropriateness of the
disclosures contained in the financial report.
59 I Page
Fertoz limited | 75
FERTOZ LIMITED INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF FERTOZ LIMITED (CONTINUED)
Key Audit Matters (continued)
Share Based Payments
Refer to Remuneration Report, Note 31 Share Based Payments
During the year ended 31 December 2023, the
Group transacted with Key Management
Personnel and other parties including:
•
•
Significant share-based payments
(“SBPs”) awarded during the year or past
years in the form of share options and
performance rights, to Key Management
Personnel, employees & consultants;
Significant SBPs to other advisors;
As several of these transactions are made with
related parties, there are additional inherent
risks associated with these transactions,
including the potential for these transactions to
be made on terms and conditions more
favorable than if they had been with an
independent third party.
The value attributed to SBPs is a key audit
matter due to it being a key material transaction
with members of key management personnel,
the valuation of which involves significant
judgement and accounting estimation.
Our procedures included, amongst others the following:
•
•
•
•
•
•
Holding discussions with management to understand
the SBPs arrangements in place.
Assessing
the valuation methodology used by
management to estimate fair value of share options
and performance rights issued, including testing the
integrity of the information provided, assessing the
appropriateness of the key assumptions input into the
valuation model.
for
Reviewed
evidence of approval over certain SBP arrangements.
results of shareholder meetings
Reviewing the appropriateness of workings prepared
by management concerning the valuation of SBPs
previously recognised in the past and the ongoing
amortization of the same.
Assessing whether
appropriately classified and allocated over the
expected vesting periods under AASB 2 Share-
Based Payments.
the SBPs
have
been
Assessing the appropriateness of the relevant
disclosures in the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 31 December 2023 but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon. In connection with our audit of the financial report,
our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We
have nothing to report in this regard.
76 | Fertoz limited
60 I Page
FERTOZ LIMITED INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF FERTOZ LIMITED (CONTINUED)
Key Audit Matters (continued)
Share Based Payments
Refer to Remuneration Report, Note 31 Share Based Payments
During the year ended 31 December 2023, the
Our procedures included, amongst others the following:
Significant SBPs to other advisors;
valuation model.
Group transacted with Key Management
Personnel and other parties including:
Significant share-based payments
(“SBPs”) awarded during the year or past
years in the form of share options and
performance rights, to Key Management
Personnel, employees & consultants;
•
•
As several of these transactions are made with
related parties, there are additional inherent
risks associated with these transactions,
including the potential for these transactions to
be made on terms and conditions more
favorable than if they had been with an
independent third party.
The value attributed to SBPs is a key audit
matter due to it being a key material transaction
with members of key management personnel,
the valuation of which involves significant
judgement and accounting estimation.
•
•
•
•
•
•
Holding discussions with management to understand
the SBPs arrangements in place.
Assessing
the valuation methodology used by
management to estimate fair value of share options
and performance rights issued, including testing the
integrity of the information provided, assessing the
appropriateness of the key assumptions input into the
Reviewed
results of shareholder meetings
for
evidence of approval over certain SBP arrangements.
Reviewing the appropriateness of workings prepared
by management concerning the valuation of SBPs
previously recognised in the past and the ongoing
amortization of the same.
Assessing whether
the SBPs
have
been
appropriately classified and allocated over the
expected vesting periods under AASB 2 Share-
Based Payments.
Assessing the appropriateness of the relevant
disclosures in the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 31 December 2023 but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon. In connection with our audit of the financial report,
our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We
have nothing to report in this regard.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF FERTOZ LIMITED (CONTINUED)
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 on the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
31 December 2023.
In our opinion, the Remuneration Report of Fertoz Limited, for the financial year ended 31 December
2023 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.
60 I Page
SUAN-LEE TAN
PARTNER
MOORE AUSTRALIA AUDIT (WA)
CHARTERED ACCOUNTANTS
Signed at Perth this 28th day of March 2024.
Fertoz limited | 77
61 I Page
FERTOZ LIMITED SShhaarreehhoollddeerrss’’ iinnffoorrmmaattiioonn sseett oouutt bbeellooww wwaass aapppplliiccaabbllee aass aatt 1188 MMaarrcchh 22002244
UUnnlliisstteedd OOppttiioonnss aanndd PPeerrffoorrmmaannccee RRiigghhttss
The Company has the following unlisted securities on issue:
•
•
•
•
•
5,000,000 Options exercisable at $0.20 each expiring 23/08/2024 held by 10 option holders;
900,000 Options exercisable at $0.27 each expiring 29/08/2025 held by 3 option holders;
1,600,000 Options exercisable at $0.27 each expiring 31/05/2026 held by 1 option holder;
6,450,000 Performance Rights held by 2 holders;
1,230,000 Convertible Notes with a face value of $1.00 and expiring 20/11/2026 held by 10 holders
The following holders hold 20% or more of the securities in the above class:
Options exercisable at $0.20 each expiring 23/08/2024
•
•
•
•
•
Options exercisable at $0.27 each expiring 29/08/2025
Bostock Investments Pty Ltd
JP Equity Holdings Pty Ltd
Bostock Investments Pty Ltd
JP Equity Holdings Pty Ltd
o Mr Jason Paul Skinner
o
o
o
o
o
Convertible Notes
o Allundy Pty Ltd
Performance Rights
o Daniel Francis Gleeson
Options exercisable at $0.27 each expiring 31/05/2026
Blackwood Capital Partners Fund 1 Pty Ltd
The number of ordinary shareholders, by size of holding is:
DDiissttrriibbuuttiioonn
SSpprreeaadd ooff HHoollddiinnggss
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 - and over
TToottaall oonn rreeggiisstteerr
Total Overseas holders
HHoollddeerrss
37
169
130
451
276
11,,006633
25
%% ooff uunniittss
0.00%
0.21%
0.42%
7.86%
91.51%
110000..0000%%
The number of shareholdings held in less than marketable parcels is 413 with a total of 2,612,062 Shares.
SHAREHOLDER
INFORMATION
AS OF 31 DECEMBER 2023
78 | Fertoz limited
ANNUAL REPORT
SShhaarreehhoollddeerrss’’ iinnffoorrmmaattiioonn sseett oouutt bbeellooww wwaass aapppplliiccaabbllee aass aatt 1188 MMaarrcchh 22002244
UUnnlliisstteedd OOppttiioonnss aanndd PPeerrffoorrmmaannccee RRiigghhttss
The Company has the following unlisted securities on issue:
•
•
•
•
•
5,000,000 Options exercisable at $0.20 each expiring 23/08/2024 held by 10 option holders;
900,000 Options exercisable at $0.27 each expiring 29/08/2025 held by 3 option holders;
1,600,000 Options exercisable at $0.27 each expiring 31/05/2026 held by 1 option holder;
6,450,000 Performance Rights held by 2 holders;
1,230,000 Convertible Notes with a face value of $1.00 and expiring 20/11/2026 held by 10 holders
The following holders hold 20% or more of the securities in the above class:
•
•
•
•
•
Options exercisable at $0.20 each expiring 23/08/2024
Bostock Investments Pty Ltd
JP Equity Holdings Pty Ltd
Options exercisable at $0.27 each expiring 29/08/2025
Bostock Investments Pty Ltd
JP Equity Holdings Pty Ltd
o
o
o Mr Jason Paul Skinner
Options exercisable at $0.27 each expiring 31/05/2026
Blackwood Capital Partners Fund 1 Pty Ltd
o
o
o
Convertible Notes
o Allundy Pty Ltd
Performance Rights
o Daniel Francis Gleeson
DDiissttrriibbuuttiioonn
The number of ordinary shareholders, by size of holding is:
SSpprreeaadd ooff HHoollddiinnggss
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 - and over
TToottaall oonn rreeggiisstteerr
Total Overseas holders
HHoollddeerrss
37
169
130
451
276
11,,006633
25
%% ooff uunniittss
0.00%
0.21%
0.42%
7.86%
91.51%
110000..0000%%
The number of shareholdings held in less than marketable parcels is 413 with a total of 2,612,062 Shares.
Fertoz limited | 79
FERTOZ LIMITED
The Constitution of the company makes the following provision for voting at general meetings:
On a show of hands, every ordinary shareholder present in person, or by proxy, attorney or representative has
one vote. On a poll, every shareholder present in person, or by proxy, attorney or representative has one vote
for any share held by the shareholder.
OOnn--mmaarrkkeett bbuuyy--bbaacckk
The Company is not currently conducting an on-market buy-back.
Shareholder information
For the year ended 31 December 2023
SSuubbssttaannttiiaall SShhaarreehhoollddeerrss
PPaarrttllyy PPaaiidd SShhaarreess
The Company has been notified of the following substantial shareholdings:
The Company does not have any partly paid shares on issue.
NNuummbbeerr
VVoottiinngg RRiigghhttss
Stephens Group and related entities
Boston First Capital Pty Ltd and related entities
Lenark Pty Ltd and related entities
Malcolm John Weber
25,894,990
13,770,000
13,202,729
9,622,489
2200 LLAARRGGEESSTT HHOOLLDDEERRSS OOFF OORRDDIINNAARRYY SSHHAARREESS AASS AATT 1188 MMAARRCCHH 22002244::
OOrrddiinnaarryy SShhaarreehhoollddeerr
BOSTON FIRST CAPITAL PTY LTD
ASHABIA PTY LTD
LENARK PTY LTD
HAJEK FT CUSTODIANS PTY LTD
STEPHENS GROUP SUPER FUND PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR WILLIAM BOOTH
BNP PARIBAS NOMINEES PTY LTD
TWO TOPS PTY LTD
NIREB NOMINEES PTY LTD
THE STEPHENS GROUP PTY LTD
WISEVEST PTY LTD
PINNACLE SUPERANNUATION PTY LIMITED
MR MICHAEL BERNARD STEPHENS & MRS TAHLIA JAE STEPHENS
MR JEREMY NICHOLAS TOLCON & MRS NADINE RUTH TOLCON
WILLSTREET PTY LTD
HENDERSON INTERNATIONAL PTY LIMITED
GUNDY PARK PTY LTD
HENDERSON INTERNATIONAL PTY LIMITED
THE STEPHENS GROUP PTY LTD
TToottaall
FFuullllyy ppaaiidd
NNuummbbeerr
PPeerrcceennttaaggee
12,161,014
10,690,000
10,649,142
10,134,989
10,000,000
6,823,078
6,775,606
5,755,992
5,392,699
4,644,761
4,200,000
4,033,489
4,000,002
3,700,000
3,000,000
3,000,000
2,773,835
2,488,889
2,452,778
2,450,000
111155,,112266,,227744
4.86%
4.27%
4.26%
4.05%
4.00%
2.73%
2.71%
2.30%
2.15%
1.86%
1.68%
1.61%
1.60%
1.48%
1.20%
1.20%
1.11%
0.99%
0.98%
0.98%
4466..0000%%
80 | Fertoz limited
FERTOZ LIMITED
Shareholder information
For the year ended 31 December 2023
PPaarrttllyy PPaaiidd SShhaarreess
The Company does not have any partly paid shares on issue.
VVoottiinngg RRiigghhttss
The Constitution of the company makes the following provision for voting at general meetings:
On a show of hands, every ordinary shareholder present in person, or by proxy, attorney or representative has
one vote. On a poll, every shareholder present in person, or by proxy, attorney or representative has one vote
for any share held by the shareholder.
OOnn--mmaarrkkeett bbuuyy--bbaacckk
The Company is not currently conducting an on-market buy-back.
Fertoz limited | 81
FERTOZ LIMITED
FERTOZ LTD
(ACN 145 951 622)
Level 5, 126 Phillip Street,
Sydney NSW 2000
Telephone: +61 2 8072 1400
www.fertoz.com
Website:
Fertoz limited | 82
ANNUAL REPORT 83 | Fertoz limited
ANNUAL REPORT Fertoz limited | 84
ANNUAL REPORT