Hazer Group Limited
ABN 144 044 600
Annual Report - 30 June 2015
For personal use only
Hazer Group Limited
Directors' report
30 June 2015
The directors present their report, together with the financial statements, on Hazer Group Limited (referred to hereafter as
the 'company'), for the year ended 30 June 2015.
Directors
The following persons were directors of Hazer Group Limited during the whole of the financial year and up to the date of
this report, unless otherwise stated:
Geoff Pocock
Rick Hopkins
Bryant McLarty (appointed on 28 April 2015)
Danielle Lee (appointed on 16 September 2015)
Principal activities
During the financial year the principal continuing activities of the company consisted of research and development of novel
graphite and hydrogen production technology.
Costs associated with the research and development of novel graphite and hydrogen production technology have not at
the reporting date met the criteria for recognition as an intangible asset. As a result, the company has recognised these
costs as an expense when incurred. The company will re-assess the treatment of these costs during future periods as the
company continues to progress with the development of its technology.
Dividends
No dividends were declared or paid during the current or previous financial year.
Review of operations
The loss for the company amounted to $522,493 (30 June 2014: $166,214).
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the company during the financial year.
Matters subsequent to the end of the financial year
On 16 September 2015, 500,000 options exercisable at $0.25 each were issued to management which vest upon
completion of the capital raising. Hazer also issued to directors and management, 5,250,000 options exercisable at $0.25
which vest 6 months after the company’s shares are admitted to the official list of the ASX, and 5,250,000 options
exercisable at $0.40 which vest 18 months after the company’s shares are admitted to the official list of the ASX.
On 22 September 2015 a prospectus was lodged for the offer of 25,000,000 shares at an issue price of 20 cents each to
raise $5,000,000.
On 24 September 2015 an application was made to the ASX to be admitted to the official list of the ASX and for the
quotation of the company’s shares.
No other matter or circumstance has arisen since 30 June 2015 that has significantly affected, or may significantly affect
the company's operations, the results of those operations, or the company's state of affairs in future financial years.
Likely developments and expected results of operations
Information on likely developments in the operations of the company and the expected results of operations have not been
included in this report because the directors believe it would be likely to result in unreasonable prejudice to the company.
Environmental regulation
The company is not subject to any significant environmental regulation under Australian Commonwealth or State law.
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For personal use only
Hazer Group Limited
Directors' report
30 June 2015
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Special responsibilities:
Name:
Title:
Qualifications:
Experience and expertise:
Special responsibilities:
Geoff Pocock
Managing Director
Bachelor of Science (first class honours) from University of Western Australia;
Bachelor of Laws (University of Western Australia) and Post Graduate Diploma in
Applied Finance and Investment from Securities Institute of Australia.
Geoff Pocock
is an experienced strategy consultant and commercialisation
professional, with over 20 years’ experience across the commercialisation process.
Geoff’s experience has covered technical roles, executive management as well as
significant corporate finance and strategy roles with a number of technology
commercialisation ventures.
Geoff is the Principal of Polaris Consulting (WA) Pty Ltd, a specialist boutique
commercialisation strategy and corporate advisory business based in Western
Australia. Prior to founding Hazer, he was a founder and Managing Director of
Dynamic Microbials Limited, an unlisted public drug discovery company working on
the identification and development of novel antibiotics for specialist human health
application. Geoff was an Executive Director/Managing Director of Dynamic from the
Company’s inception until the Company was acquired by its parent Phylogica Ltd in
an all-scrip merger in 2008.
Geoff has extensive strategy consulting and corporate advisory experience, through a
number of boutique Western Australian corporate/advisory firms, and he was a
Founder and executive of a mid-tier strategy consulting firm, overseeing the growth of
the firm from its formation and initial operations to it becoming the largest strategy
consulting firm in Western Australia with over 20 professional staff, with a
concomitant increase in revenue and profitability.
Nil
Rick Hopkins
Non-Executive Chairman
Bachelor of Commerce from the University of Western Australia, a Postgraduate
Diploma in Business from Curtin University of Technology and a Graduate Diploma in
Applied Finance and Investment from the Financial Services Institute of Australia.
Rick is a fellow of Chartered Accountants Australia and New Zealand and a fellow of
Financial Services Institute of Australia.
Rick Hopkins is a Chartered Accountant with over 30 years of experience advising on
corporate, taxation and accounting matters. Rick is currently a partner at PKF Lawler,
having previously been a Director at Barringtons Chartered Accountants. He has vast
experience advising on project management, corporate and taxation matters for a
wide range of corporate clients. His particular expertise extends to corporate
and structuring advice, capital raising, tax, and cash flow planning. He has worked on
various committees of The Tax Institute and Chartered Accountants Australia and
New Zealand.
Member of Audit and Risk Committee and Remuneration and Nomination Committee
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For personal use only
Hazer Group Limited
Directors' report
30 June 2015
Name:
Title:
Qualifications:
Experience and expertise:
Special responsibilities:
Name:
Title:
Qualifications:
Experience and expertise:
Special responsibilities:
Bryant McLarty (appointed on 28 April 2015)
Non-Executive Director
Nil
Bryant is the Executive Chairman of Mac Equity Partners, a boutique Western
Australian stockbroking and corporate advisory business operating since 2009.
Clients include ASX listed, public and private companies, wholesale high net worth
investors and overseas funds who are provided with a complete range of services
including capital raising, share trading, corporate advisory, marketing, presentation,
consulting and strategic advice.
Bryant has over 20 years’ experience in public capital markets and raising capital for
technology ventures. Bryant was the Executive Chairman of PharmAust Limited
(ASX:PAA), during which time it provided highly specialised medicinal and synthetic
chemistry services on a contract basis to clients. Bryant was also a Non Executive
Director of Avation PLC (LSE:AVAP), a specialist commercial passenger aircraft
leasing company managing a fleet of 24 aircraft, from 2008 to 2013. Avation also has
a subsidiary that supplies aircraft parts and spares to a range of operators
internationally.
Member of Audit and Risk Committee and Remuneration and Nomination Committee
Danielle Lee (appointed on 16 September 2015)
Non-Executive Director
Bachelor of Economics from the University of Western Australia, Bachelor of Laws
from the University of Western Australia (first class honours); Post Graduate Diploma
in Applied Finance and Investment from the Securities Institute of Australia.
Danielle is a corporate lawyer with more than 20 years’ experience shared between
private law firms and the Australian Securities Exchange (ASX). Danielle is currently
special counsel at Jackson McDonald working in the corporate commercial team.
Danielle’s main practice areas are corporate advisory, governance and equity capital
markets. Danielle advises on a range of corporate and commercial transactions
including capital raisings, business and share acquisitions, shareholder agreements
and joint venture arrangements. Danielle regularly advises on issues relating to the
Corporations Act and ASX Listing Rules.
Danielle was previously counsel for Fairweather Corporate Lawyers for approximately
7 years after having worked for approximately 9 years as legal counsel at ASX
Sydney and Assistant Manager at ASX Perth.
Member of Audit and Risk Committee and Remuneration and Nomination Committee
Company secretary
Emma Waldon has held the role of Company Secretary since 10 August 2015. Emma has diverse global corporate
advisory, capital markets and corporate governance experience having held roles in accounting and debt and equity capital
markets in Australia and the United Kingdom.
Emma Waldon qualified as a Chartered Accountant with Ernst & Young in Perth, worked as an Equities Analyst with Euroz
Securities and spent 9 years in London with Bank of Scotland and Lloyds Bank originating and re-structuring debt finance
for private equity leveraged buy-outs of businesses across Europe. Emma was most recently a Director within Deloitte’s
financial advisory services division in Perth and is currently a Non-Executive Director and the Company Secretary of Moko
Social Media Limited.
Emma Waldon completed a Bachelor of Commerce at UWA, is a member of the Institute of Chartered Accountants of
Australia, a Fellow of the Financial Services Institute of Australasia and a Certificated Member of the Governance Institute
of Australia.
Meetings of directors
The number of meetings of the company's Board of Directors (the ‘Board') held during the year ended 30 June 2015, and
the number of meetings attended by each director were:
Geoff Pocock
Rick Hopkins
Bryant McLarty
Danielle Lee
Board meetings
Attended
Held
-
-
-
-
-
-
-
-
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For personal use only
Hazer Group Limited
Directors' report
30 June 2015
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
Shares under option
Unissued ordinary shares of Hazer Group Limited under option at the date of this report are as follows:
Grant date
30/01/2015
09/02/2015
16/09/2015
16/09/2015
16/09/2015
Expiry date
31/12/2017
31/12/2017
31/12/2017
31/12/2018
31/12/2019
Exercise
price
Number
under option
$0.25
$0.25
$0.25
$0.25
$0.40
8,000,000
3,000,000
500,000
5,250,000
5,250,000
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.
Shares issued on the exercise of options
No ordinary shares of the company were issued during the year ended 30 June 2015 and up to the date of this report on
the exercise of options granted.
Indemnity and insurance of officers
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 financial year, the company paid a premium in respect of a contract to insure 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.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company
or any related entity.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
on the following page.
Auditor
RSM continues in office in accordance with section 327 of the Corporations Act 2001.
4
For personal use only
For personal use only RSM Australia Partners
8 St Georges Terrace Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Hazer Group Limited for the year ended 30 June 2015, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM
Perth, WA
Dated: 27 October 2015
TUTU PHONG
Partner
P:\Financial statements\2015\Audit reports\Hazer Independence Declaration.docx
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
For personal use only
Hazer Group Limited
Contents
30 June 2015
Contents
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 to the members of Hazer Group Limited
General information
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9
10
11
12
20
21
The financial statements cover Hazer Group Limited (the ‘company’). The financial statements are presented in Australian
dollars, which is the company's functional and presentation currency.
Hazer Group Limited is an unlisted public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business are:
Registered office
7/29 The Avenue
Nedlands WA 6009
Principal place of business
7/29 The Avenue
Nedlands WA 6009
A description of the nature of the company'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 27 October 2015. The
directors have the power to amend and reissue the financial statements.
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Hazer Group Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2015
Revenue
Interest received
Expenses
Administration expenses
Consulting and research expenses
Share based payments
Finance costs
Loss before income tax expense
Income tax expense
Note
2015
$
2014
$
6,632
2,596
(59,164)
(204,836)
(264,994)
(131)
(684)
(43,000)
(125,000)
(126)
(522,493)
(166,214)
15
-
-
Loss after income tax expense for the year
(522,493)
(166,214)
Other comprehensive income
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
-
-
(522,493)
(166,214)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
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Hazer Group Limited
Statement of financial position
As at 30 June 2015
Assets
Current assets
Cash and cash equivalents
GST Refundable
Total current assets
Non-current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Total current liabilities
Non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
2015
$
2014
$
3
562,927
28,388
591,315
66,195
3,282
69,477
-
-
591,315
69,477
46,224
46,224
-
46,224
-
-
-
-
545,091
69,477
4
5
6
1,582,945
129,394
(1,167,248)
714,232
-
(644,755)
545,091
69,477
The above statement of financial position should be read in conjunction with the accompanying notes
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Hazer Group Limited
Statement of changes in equity
For the year ended 30 June 2015
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
equity
$
Balance at 1 July 2013
499,282
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 4)
Share-based payments (note 14)
Balance at 30 June 2014
Balance at 1 July 2014
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 4)
Share-based payments (note 14)
-
-
-
-
-
-
-
-
-
-
-
(478,541)
20,741
(166,214)
-
(166,214)
-
(166,214)
(166,214)
-
-
89,950
125,000
(644,755)
69,477
Retained
profits
$
Total
equity
$
(644,755)
69,477
(522,493)
-
(522,493)
(522,493)
-
(522,493)
Reserves
$
-
-
-
89,950
125,000
714,232
Issued
capital
$
714,232
-
-
-
733,113
135,600
-
129,394
-
-
733,113
264,994
Balance at 30 June 2015
1,582,945
129,394
(1,167,248)
545,091
The above statement of changes in equity should be read in conjunction with the accompanying notes
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Hazer Group Limited
Statement of cash flows
For the year ended 30 June 2015
Cash flows from operating activities
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest and other finance costs paid
Note
2015
$
2014
$
(242,882)
6,632
(131)
(47,330)
2,596
(126)
Net cash used in operating activities
13
(236,381)
(44,860)
Cash flows from investing activities
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Repayment of convertible notes
Net cash provided by/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
-
-
733,113
-
-
(2,800)
733,113
(2,800)
496,732
66,195
(47,660)
113,855
Cash and cash equivalents at the end of the financial year
3
562,927
66,195
The above statement of cash flows should be read in conjunction with the accompanying notes
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Hazer Group Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies
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.
New, revised or amending Accounting Standards and Interpretations adopted
The company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the company.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board 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.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss,
investment properties, certain classes of property, plant and equipment and derivative financial instruments.
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 company'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.
Revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the company and the revenue can be
reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
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.
Income tax
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.
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Hazer Group Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies (continued)
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.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is 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.
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.
Cash and cash equivalents
Cash and cash equivalents includes 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 presentation purposes, in the statement of cash flows,
cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the
statement of financial position.
Trade and other payables
These amounts represent liabilities for goods and services provided to the company 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.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Goods and Services Tax ('GST') and other similar taxes
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 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.
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Hazer Group Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies (continued)
Research and development
Research costs are expensed in the period in which they are incurred.
Development costs are capitalised when it is probable that the project will be a success considering its commercial and
technical feasibility; the company is able to use or sell the asset; the company has sufficient resources; and intent to
complete the development and its costs can be measured reliably. Capitalised development costs are amortised on a
straight-line basis over the period of their expected benefit.
Share-based payment transactions
The company provides benefits in the form of share-based payments, whereby persons render services in exchange for
shares or rights over shares (‘equity settled transactions’). The company does not provide cash settled share-based
payments.
The cost of equity settled transactions are measured by reference to the fair value of the equity instruments at the date at
which they are granted.
The cost of equity settled transactions are recognised, together with a corresponding increase in equity, over the period in
which the service conditions are fulfilled, ending on the date on which the relevant persons become fully entitled to the
award (the ‘vesting period’).
The cumulative expense recognised for equity settled transactions at each reporting date until vesting date reflects the
extent to which the vesting period has expired, and the company’s best estimate of the number of equity instruments that
will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense
recognised for the period. No cumulative expense is recognised for awards that ultimately do not vest (in respect of non-
market vesting conditions).
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the company for the annual reporting period ended 30 June 2015. These are
not expected to have significant impact on the financial performance or position of the company upon adoption. The
company’s assessment of the new and amended pronouncements that are relevant to the company but applicable in future
reporting periods is set out below:
AASB 9 Financial
Instruments
Replaces the requirements of AASB 139 for the
classification and measurement of financial assets. This is
the result of the first part of Phase 1 of the IASB’s project
to replace IAS 39.
1 January
2018
Note 2. Critical accounting judgements, estimates and assumptions
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.
Share-based payment transactions
The company 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.
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Hazer Group Limited
Notes to the financial statements
30 June 2015
Note 3. Current assets - cash and cash equivalents
Cash at bank
Note 4. Equity - issued capital
2015
$
2014
$
562,927
66,195
562,927
66,195
2015
Shares
2014
Shares
2015
$
2014
$
Ordinary shares - fully paid
36,192,002 15,299,010
1,582,945
714,232
Movements in ordinary share capital
Details
Date
No of shares Issue price
$
Balance
Convertible notes converted to shares
Issue of shares
1 July 2013
31 January 2014
28 February 2014
11,000,010
1,799,000
2,500,000
499,282
$0.05 89,950
$0.05 125,000
Balance
Issue of shares on the exercise of rights
Share issue transaction costs, net of tax
Issue of shares
Issue of shares
Issue of shares on the exercise of rights
Share issue transaction costs, net of tax
Issue of shares
Issue of shares
30 June 2014
30 January 2015
30 January 2015
30 January 2015
9 February 2015
24 April 2015
24 April 2015
24 April 2015
19 May 2015
15,299,010
13,841,833
-
3,750,000
1,250,000
1,457,177
-
393,982
200,000
Balance
30 June 2015
36,192,002
$0.05
$0.05
$0.05
$0.05
$0.05
$0.05
714,232
692,092
(145,000)
187,500
62,500
72,859
(30,937)
19,699
10,000
1,582,945
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.
Capital risk management
The company's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce
the cost of capital.
In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
15
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Hazer Group Limited
Notes to the financial statements
30 June 2015
Note 5. Equity - reserves
Option reserve
2015
$
2014
$
129,394
129,394
-
-
Option reserve
The option reserve records items recognised as expenses on the valuation of share options.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Balance at 1 July 2013
Balance at 30 June 2014
Issue of options
Balance at 30 June 2015
Note 6. Equity – Accumulated losses
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the year
Accumulated losses at the end of the financial year
Note 7. Key management personnel disclosures
Option
Reserve
$
Total
$
-
-
-
129,394
-
129,394
129,394
129,394
2015
$
2014
$
644,755
522,493
478,541
166,214
1,167,248
644,755
Compensation
The aggregate compensation made to directors and other members of key management personnel of the company is set
out below:
Short-term employee benefits
Share-based payments
2015
$
2014
$
204,836
194,873
43,000
125,000
399,709
168,000
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Hazer Group Limited
Notes to the financial statements
30 June 2015
Note 8. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by RSM, the auditor of the company
and its network firms:
Audit services - RSM
Audit of the financial statements
Other services - RSM
Investigating Accountants Report
2015
$
2014
$
10,000
15,000
10,000
-
20,000
15,000
Note 9. Contingent assets and contingent liabilities
The company does not have any contingent assets or contingent liabilities at 30 June 2015.
Note 10. Commitments
The company had no commitments for expenditure as at 30 June 2015.
Note 11. Related party transactions
Key management personnel
Disclosures relating to key management personnel are set out in note 7.
Transactions with related parties
During the year, director’s fees were paid to Polaris Consulting (WA) Pty Ltd, a company of which Geoff Pocock is a
director. Disclosures of these fees paid are included in the compensation paid to key management personnel set out in
note 7.
Receivable from and payable to related parties
There was $32,656 owing to Polaris Consulting (WA) Pty Ltd at 30 June 2015 (2014: nil).
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Note 12. Events after the reporting period
On 16 September 2015, 500,000 options exercisable at $0.25 each were issued to management which vest upon
completion of the capital raising. Hazer also issued to directors and management, 5,250,000 options exercisable at $0.25
which vest 6 months after the company’s shares are admitted to the official list of the ASX, and 5,250,000 options
exercisable at $0.40 which vest 18 months after the company’s shares are admitted to the official list of the ASX.
On 22 September 2015 a prospectus was lodged for the offer of 25,000,000 shares at an issue price of 20 cents each to
raise $5,000,000.
On 24 September 2015 an application was made to the ASX to be admitted to the official list of the ASX and for the
quotation of the company’s shares.
No other matter or circumstance has arisen since 30 June 2015 that has significantly affected, or may significantly affect
the company's operations, the results of those operations, or the company's state of affairs in future financial years.
17
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Hazer Group Limited
Notes to the financial statements
30 June 2015
Note 13. Reconciliation of loss after income tax to net cash from operating activities
Loss after income tax expense for the year
Adjustments for:
Share-based payments
Change in operating assets and liabilities:
(Increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Net cash used in operating activities
Note 14. Share-based payments
2015
$
2014
$
(522,493)
(166,214)
264,994
125,000
(25,106)
46,224
-
(3,646)
(236,381)
(44,860)
For the year ended 30 June 2014:
On 28 February 2014, 2,500,000 shares were issued to key management personnel at an issue price of $0.05 per share
with a total value of $125,000.
For the year ended 30 June 2015:
On 30 January 2015, 1,250,000 shares were issued to key management personnel and 2,500,000 shares were issued to
creditors for underwriting and other capital raising costs at an issue price of $0.05 per share with a total value of $187,500.
On 9 February 2015, 1,250,000 shares were issued to key management personnel at an issue price of $0.05 per share
with a total value of $62,500.
On 24 April 2015, 393,982 shares were issued to creditors at an issue price of $0.05 per share with a total value of
$19,699. Of this amount, $19,099 related to capital raising costs.
On 19 May 2015, 200,000 shares were issued to creditors at an issue price of $0.05 per share with a total value of
$10,000.
A share option plan has been established by the company and approved by shareholders at a general meeting, whereby
the company may, at the discretion of the Board, grant options over ordinary shares in the company to certain key
management personnel of the company. The options are issued for nil consideration and are granted in accordance with
performance guidelines established by the Board.
Set out below are summaries of options granted under the plan:
2015
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
30/01/2015
09/02/2015
31/12/2017
31/12/2017
$0.25
$0.25
8,000,000
-
-
3,000,000
- 11,000,000
-
-
-
8,000,000
-
-
3,000,000
- 11,000,000
Weighted average exercise price
$0.00
$0.25
$0.00
$0.00
$0.25
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Hazer Group Limited
Notes to the financial statements
30 June 2015
Note 14. Share-based payments (continued)
Set out below are the options exercisable at the end of the financial year:
Grant date
30/01/2015
09/02/2015
Expiry date
31/12/2017
31/12/2017
2015
2014
Number
Number
8,000,000 -
-
3,000,000
11,000,000
-
The options outlined above are Series A Options which vest upon the Company being admitted to the official list of the
ASX. The Series A Options are primary Options which upon the exercise of each Series A Option result in the issue of one
Share and one Series B Option (a secondary Option). Series B Options have an exercise price of 40 cents and an expiry
date of 31 December 2020.
The total value of the share options outlined above was $290,019 valued using the Black-Scholes model. During the year
ended 30 June 2015, $129,394 was charged to profit or loss. The remainder will be expensed in future financial periods.
The weighted average share price during the financial year was $0.05 (2014: $0.05).
The weighted average remaining contractual life of options outstanding at the end of the financial year was 2.51 years.
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Grant date
Expiry date
Share price Exercise
at grant date
price
Expected
volatility
Dividend
Risk-free
Fair value
yield
interest rate at grant date
30/01/2015
09/02/2015
31/12/2017
31/12/2017
$0.05
$0.05
$0.25
$0.25
100.00%
100.00%
0.00%
0.00%
2.00%
2.00%
$0.015
$0.015
Note 15. Income Tax
The prima facie tax receivable on loss before income tax is reconciled to the income tax expense as follows:
Prima facie benefit on operating loss at 30% (2014: 30%)
Tax losses not brought to account
Income tax benefit attributable to operating loss
2015
$
2014
$
156,758
(156,758)
49,864
(49,864)
-
-
A potential deferred tax asset, attributable to tax losses carried forward, amounts to approximately $222,450 (2014:
$65,702) and has not been brought to account at reporting date because the directors do not believe it is appropriate to
regard realisation of the deferred tax asset as probable at this point in time. This benefit will only be obtained if:
•
•
•
the company derives future assessable income of a nature and of an amount sufficient to enable the benefit
from the deductions for the loss and exploration expenditure to be realised;
the company continues to comply with the conditions for deductibility imposed by law; and
no changes in tax legislation adversely affect the company in realising the benefit from the deductions for the
loss and exploration expenditure.
19
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For personal use only RSM Australia Partners
8 St Georges Terrace Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
HAZER GROUP LIMITED
We have audited the accompanying financial report of Hazer Group Limited (the “company”), which comprises
the statement of financial position as at 30 June 2015, and the statement of profit or loss and other comprehensive
income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a
summary of significant accounting policies and other explanatory information and the directors' declaration.
Directors’ Responsibility 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 is free from
material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance
about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor's judgement, including the assessment of the
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the
financial report in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
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Liability limited by a scheme approved under Professional Standards Legislation
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Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We
confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
directors of Hazer Group Limited, would be in the same terms if given to the directors as at the time of this auditor's
report.
Opinion
In our opinion:
(a)
the financial report of Hazer Group Limited is in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the company's financial position as at 30 June 2015 and of its
performance for the year ended on that date; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
RSM
Perth, WA
Dated: 27 October 2015
TUTU PHONG
Partner
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