Hazer Group Limited
Appendix 4E
Final report
1. Company details
Name of entity:
ABN:
Reporting period:
Previous period:
Hazer Group Limited
40 144 044 600
For the year ended 30 June 2016
For the year ended 30 June 2015
2. Results for announcement to the market
Revenues from ordinary activities
Loss from ordinary activities after tax attributable to the owners of Hazer
Group Limited
Loss for the year attributable to the owners of Hazer Group Limited
Dividends
up
up
up
1,160% to
83,552
$
253% to
1,844,358
253% to
1,844,358
Final dividend for the year ended 30 June 2015
Interim dividend for the year ended 30 June 2016
No dividend has been declared.
Comments
The loss for the company amounted to $1,844,358 (30 June 2015: $522,493).
Amount per
security
Cents
Franked
amount per
security
Cents
0.0
0.0
0.0
0.0
On 30 November 2015, the Company was admitted to the official list of the Australian Securities Exchange (‘ASX’) after
successfully raising $5,000,000 before expenses from the issue of 25,000,000 fully paid ordinary shares at $0.20 per share
(‘initial public offering’). Official quotation of the Company’s securities commenced on 2 December 2015.
Losses after income tax increased by 253% on the prior year as the Company increased research and development activities
to commercialise the Hazer Process. Research and development paths undertaken included process scale-up work, graphite
product development / functionalisation and graphite commercialisation work.
The Company’s cash and cash equivalents were $4,677,919 at 30 June 2016 (30 June 2015: $562,927) and net assets at
30 June 2016 were $4,420,770 (30 June 2015: $545,091)
The operating cash outflow for the year increased by 516% to $1,455,137 (30 June 2015: $236,381) largely as a result of
increased research and development activities. Financing cash inflows increased by 660% to $5,570,129 (30 June 2015:
$733,113) as a result of the initial public offering, a placement of 3,195,000 ordinary shares at $0.28 per share on 18 March
2016 which raised $894,600 before costs and a pro-rata Entitlement Option Issue pursuant to a Prospectus lodged on
21 March 2016 which raised $150,453 before costs.
The Company confirms in the period from admission to the official list of the ASX to 30 June 2016, that it used its cash and
assets in a form readily convertible to cash, in a manner consistent with its business objectives.
As an early stage company, the Company’s business model is highly dependent on the achievement of continued technical
development success as well as future funding, customer engagement and general financial and economic factors.
For personal use only Reporting
period
Cents
Previous
period
Cents
6.85
1.51
Hazer Group Limited
Appendix 4E
Preliminary final report
3. Net tangible assets
Net tangible assets per ordinary security
4. Control gained over entities
Not applicable
5. Loss of control over entities
Not applicable.
6. Details of associates and joint venture entities
Not applicable
7. Audit qualification or review
The financial statements have been audited and an unqualified opinion has been issued.
8. Attachments
The Annual Report of Hazer Group Limited for the year ended 30 June 2016 is attached.
9. Signed
Signed ______________________________
Date: 31 August 2016
Geoff Pocock
Director
For personal use only Hazer Group Limited
ABN 40 144 044 600
Annual Report – 30 June 2016
HazerGroup
For personal use only HazerGroup
CORPORATE DIRECTORY
Directors
Geoff Pocock (Managing Director)
Rick Hopkins (Non-Executive Chairman)
Bryant McLarty (Non-Executive Director)
Danielle Lee (Non-Executive Director)
Andrew Harris (Non-Executive Director)
Company secretary
Emma Waldon
Registered office
Principal place of business
Share register
Auditor
Solicitors
Bankers
7/29 The Avenue
Nedlands
Western Australia 6009
Phone: 08 9389 7050
7/29 The Avenue
Nedlands
Western Australia 6009
Phone: 08 9389 7050
Link Market Services Limited
Central Park Level 4,
152 St Georges Terrace
Perth WA 6000
Phone: 1300 554 474
RSM Australia Partners
8 St Georges Terrace
Perth Western Australia 6000
Fairweather Corporate Lawyers
595 Stirling Highway
Cottesloe WA 6011
Commonwealth Bank of Australia
150 St Georges Terrace
Perth WA 6000
Stock exchange listing
Hazer Group Limited shares are listed on the Australian Securities Exchange (ASX
code: HZR)
Website
www.hazergroup.com.au
Corporate Governance Statement
http://www.hazergroup.com.au/about/corporate-governance
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only CHAIRMAN’S LETTER
HazerGroup
Dear Shareholder
On behalf of the Board I am pleased to present the 2016 Annual Report to shareholders.
During the past year the Company successfully completed fund raisings totalling $6m (before costs) and listed on the
Australian Securities Exchange.
Funds raised have, and will, predominantly be used to further develop the Hazer Process, the Company’s core technology.
The Hazer Process allows the production of hydrogen and graphite from methane in a low CO2 emission process..
Distinguishing features of the Hazer Process from existing commercial hydrogen production technologies include the co-
production of high purity graphite, thus reducing the CO2 emissions associated with traditional hydrogen production and also
providing economic benefits to reduce the overall production costs, and the use of low cost iron ore fines as a catalyst for the
process.
Initial scale up of an original research-scale reactor has been demonstrated and the Company’s strategy is to further scale-
up and commercialise the Hazer Process so as to be able to supply hydrogen gas and high purity graphite to the significant
global hydrogen and graphite markets.
The Company is supported by an experienced Board of Directors and management team led by Geoff Pocock as managing
director and Dr Andrew Cornejo as Chief Technical Officer. Geoff Pocock is an experienced strategy consultant and
commercialisation professional with more than 20 years experience across the commercialisation process. Andrew Cornejo
is the lead inventor of the Hazer Process and is a mechanical engineer with experience in design, project management and
commissioning. Andrew.
The Company reached an important agreement during the year with the University of Sydney which provides access to the
world class facilities of the University’s Laboratory of Sustainable Technologies (“LST”). The LST has particular expertise in
graphite and nano
materials technology as well as chemical engineering scale up expertise and experience in the “hydrogen
economy”. Dr Andrew Cornejo relocated to Sydney to actively manage and direct all activities undertaken with Sydney
University. This research collaboration has given the Company access to facilities and further expertise that has allowed the
Company to bring forward the commercialisation timeline of the Hazer Process.
‐
We were also pleased to secure a number of key additional appointments. Dr Andrew Harris, lead Director of Laing O’Rourke
Engineering Excellence Group, was appointed as a Non-Executive Director and Dr Andrew Minett was appointed Chairman
of the newly created Science Advisory Committee. Both individuals have significant expertise in process development,
hydrogen production and new energy technologies. In addition, Terry Walsh, a commercial lawyer with 20 years project
development experience, commenced with the Company as its Business Development Executive.
I look forward to your continued support as a shareholder as the Company continues its commercialisation activities.
Yours faithfully
Mr Rick Hopkins
Non-Executive Chairman
Hazer Group Limited
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only MANAGING DIRECTOR’S REPORT
HazerGroup
ABOUT HAZER GROUP
Hazer Group Limited (“Hazer” or the “Company”) is the commercialisation entity for the Hazer Process – a novel potential low
cost, low emission hydrogen and graphite production technology, originally developed at the University of Western Australia.
Initial scale up of an original research-scale reactor has been demonstrated and the Company’s strategy is to further scale-
up and commercialise the Hazer Process so as to supply hydrogen gas and high purity bulk graphite to the significant hydrogen
and graphite markets.
In December 2015, the Company completed a heavily oversubscribed $5m initial public offering capital raising and listed on
ASX (ASX:HZR and HZRO). Funds will provide up to 2 years of ongoing development activities.
THE HAZER PROCESS
The Hazer Process allows the production of hydrogen from methane together with the production of high purity graphite
through a process known as Thermo Catalytic Methane Decomposition (or “methane cracking”).
The overriding distinguishing feature of the Hazer Process from existing commercial hydrogen production technologies is the
co-production of high purity graphite, the production of this synthetic graphite product addresses both economic and
environmental aspects of existing hydrogen production processes. By co-producing synthetic graphite in addition to hydrogen,
the overall costs of the hydrogen production process can be reduced, providing lower cost hydrogen. Furthermore, the overall
CO2 emissions associated with hydrogen production are minimised, potentially enabling hydrogen to be more effectively used
in energy markets including vehicle fuel and stationary power generation.
Hazer uses low cost iron ore as a catalyst for the Hazer Process; the use of this low cost catalyst is a key driver of the beneficial
economics of the Hazer Process.
HAZER’S COST ADVANTAGE
The use of low cost feedstocks, a low cost catalyst and the co-production of both hydrogen and a high grade synthetic graphite
product, gives Hazer the potential to become highly cost competitive across a number of industries - the industrial hydrogen
market, the global graphite market and the “clean hydrogen” demand required for the growing hydrogen economy.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only MANAGING DIRECTOR’S REPORT
HazerGroup
OPERATIONS
In February 2016, the Company reached an agreement with the University of Sydney to undertake its core development and
commercialisation activities at their world class Laboratory of Sustainable Technologies, part of the University’s School of
Chemical and Biomolecular Engineering.
Since moving into these premises, the Company has constructed and commissioned a Static Bed Reactor, enabling Hazer to
assess the effect of different iron ore types and sizes on the hydrogen and graphite product quality. In addition to this reactor,
construction and commissioning of a Fluidised Bed Reactor has allowed for the further scale-up of Hazer’s process. This new
reactor is capable of generating up to one kilogram of graphite per day, over 3,000 times the amounts previously produced.
HAZER GRAPHITE PURITY
In August 2016, the Company announced results from initial tests undertaken to demonstrate the purity and characteristics of
Hazer’s graphite against that of industry grade graphite, including commercial battery grade graphite.
This characterisation and testing process is an important step before embarking on a graphite development program, as it
provides the Company with critical benchmark data needed to further optimise the reaction conditions that will improve the
yield and quality of the graphite.
Hazer produced graphite at 99% tgc (total graphite content), through initial methane decomposition and a single stage
chemical purification. Importantly, the chemical purification was undertaken without the use of hydrofluoric acid (HF). Prior to
chemical purification, the graphite product harvested directly from the Hazer reactor under non-optimised conditions has tgc
purity of 86%.
The general characteristics of Hazer graphite produced under non-optimised conditions show excellent comparison to high-
end commercial forms of graphite, including primary synthetic graphite and synthetic spherical graphite SG, used for upper
end lithium-ion batteries, and little resemblance to lower value amorphous carbon AC (Carbon Black).
The Company is extremely pleased with these initial results using large-scale laboratory reactors and believe they will provide
a strong platform for further growth, through both optimisation of the core reaction conditions and further application testing of
Hazer’s graphite for batteries and other key graphite markets.
It is promising that even under non-optimized conditions the characteristics of the graphite produced by the Hazer Process
correlates well with commercially available premium graphite. These initial results show that Hazer’s graphite is highly
crystalline with few defects, key requirements for high-end graphite markets such as battery applications.
SCALE-UP DEVELOPMENT UNDERWAY
The Company has now set in place a development and testing roadmap that focuses on the lithium-ion battery vertical for its
graphite product, as well as potential applications in other graphite markets. With additional characterisation testing currently
underway, as well as further optimisation of reactor conditions, Hazer hopes to enhance the yield and quality of the graphite
produced.
We look forward to updating the market with new results produced under optimised conditions and plan to send this graphite
for independent testing at a globally recognised testing facility. Hazer also plans to develop and test small-scale lithium-ion
batteries within its laboratory using synthetic graphite produced from the Hazer Process.
Work also continues towards the design and construction of a pilot plant that will be capable of producing hundreds of
kilograms of combined hydrogen and graphite products per day, to be undertaken in 2017. In March 2016, Hazer signed an
agreement with chemical engineering group Kemplant, who are assisting Hazer with its current scale up development and the
design of this initial pilot plant to showcase the Hazer technology.
Mr Geoff Pocock
Managing Director
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
Hazer Group Limited
HazerGroup
The directors present their report, together with the financial statements, on the company (referred to hereafter as the
'company') consisting of Hazer Group Limited (referred to hereafter as the 'company' or 'parent entity') for the year ended
30 June 2016.
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
Danielle Lee (appointed on 16 September 2015)
Andrew Harris (appointed 21 June 2016)
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.
The Company has intellectual property rights to a technology which allows the production of hydrogen gas from methane
(natural gas) with negligible carbon dioxide emissions and the co-production of a high purity graphite product (the ‘Hazer
Process’).
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
There were no dividends paid during the year.
Review of operations
The loss for the company amounted to $1,844,358 (30 June 2015: $522,493).
On 30 November 2015, the Company was admitted to the official list of the Australian Securities Exchange (‘ASX’) after
successfully raising $5,000,000 before expenses from the issue of 25,000,000 fully paid ordinary shares at $0.20 per share
(‘initial public offering’). Official quotation of the Company’s securities commenced on 2 December 2015.
Losses after income tax increased by 253% on the prior year as the Company increased research and development activities
to commercialise the Hazer Process. Research and development paths undertaken included process scale-up work, graphite
product development / functionalisation and graphite commercialisation work.
The Company’s cash and cash equivalents were $4,677,919 at 30 June 2016 (30 June 2015: $562,927) and net assets at
30 June 2016 were $4,420,770 (30 June 2015: $545,091)
The operating cash outflow for the year increased by 516% to $1,455,137 (30 June 2015: $236,381) largely as a result of
increased research and development activities. Financing cash inflows increased by 660% to $5,570,129 (30 June 2015:
$733,113) as a result of the initial public offering, a placement of 3,195,000 ordinary shares at $0.28 per share on 18 March
2016 which raised $894,600 before costs and a pro-rata Entitlement Option Issue pursuant to a Prospectus lodged on
21 March 2016 which raised $150,453 before costs.
The Company confirms in the period from admission to the official list of the ASX to 30 June 2016, that it used its cash and
assets in a form readily convertible to cash, in a manner consistent with its business objectives.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
HazerGroup
As an early stage company, the Company’s business model is highly dependent on the achievement of continued technical
development success as well as future funding, customer engagement and general financial and economic factors.
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 22 July 2016, the following options were issued to the Chairman of the Science Advisory Committee (i) 575,000 options
exercisable at $0.55 each and expiring 30 June 2019 which vest 6 months after appointment provided the holder has
continued to be engaged as an employee or contractor of the Company prior to the vesting date and (ii) 575,000 options
exercisable at $0.75 each and expiring 30 June 2020 which vest 18 months after appointment provided the holder has
continued to be engaged as an employee or contractor of the Company prior to the vesting date.
On 1 July 2016, the same options as noted above were resolved to be issued to Andrew Harris as a Director of the Company
and are subject to shareholder approval at the next annual general meeting. The details of the options resolved to be issued
whilst still subject to shareholder approval at the next annual general meeting are as follows (i) 575,000 options exercisable
at $0.55 each and expiring 30 June 2019 which vest 6 months after appointment provided the holder has continued to be
engaged as an employee or contractor of the Company prior to the vesting date and (ii) 575,000 options exercisable at $0.75
each and expiring 30 June 2020 which vest 18 months after appointment provided the holder has continued to be engaged
as an employee or contractor of the Company prior to the vesting date.
On 29 July 2016, 33,632 ordinary shares were issued on the exercise of 33,632 listed options (ASX code: HZRO) at an
exercise price of $0.30 each generating share issue proceeds of $10,090.
No other matter or circumstance has arisen since 30 June 2016 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.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
HazerGroup
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
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.
is an experienced strategy consultant and commercialisation
Geoff Pocock
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.
Director since 6 August 2010
Length of service:
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interest in options:
Contractual rights to shares:
Chief Executive Officer
4,200,000
1,050,000 (Listed options) and 7,000,000 (Unlisted options)
None
Experience and expertise:
Name:
Title:
Qualifications:
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.
Director since 6 August 2010
Length of service:
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Member of the Audit and Risk Committee and the Remuneration and Nomination
Committee
800,010
200,003 (Listed options) and 1,300,000 (Unlisted options)
None
Interests in shares:
Interests in options:
Contractual rights to shares:
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
HazerGroup
Name:
Title:
Qualifications:
Experience and expertise:
Bryant McLarty
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.
Director since 28 April 2015
Length of service:
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
Member of the Audit and Risk Committee and Chairman of Remuneration and
Nomination Committee
2,312,469
545,995 (Listed options) and 5,550,000 (Unlisted options- includes related party
transactions)
None
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
HazerGroup
Experience and expertise:
Name:
Title:
Qualifications:
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.
Director since 16 September 2015
Length of service:
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Chairman of Audit and Risk Committee and member of Remuneration and Nomination
Committee
None
950,000 (Unlisted options)
None
Interests in shares:
Interests in options:
Contractual rights to shares:
Experience and expertise:
Name:
Title:
Qualifications:
Andrew Harris (appointed 21 June 2016)
Non-Executive Director
PhD in engineering from the University of Cambridge and undergraduate degrees in
engineering and science from the University of Queensland. A Fellow of the Institution
of Chemical Engineers and Engineers Australia and a member of the Australian
Institute of Company Directors
Dr Andrew Harris is highly experienced in renewable energy, sustainability, biomimicry,
nanotechnology, process engineering and the hydrogen energy economy. He is the
lead Director of the Engineering Excellence Group within Laing O’Rourke’s internal
engineering and innovation team. Laing O’Rourke is one of the world’s largest privately
owned engineering and construction companies, with annual revenues of $8 billion,
15,000 staff and operations in Europe, North America, the Middle East, Asia and
Australia. The Engineering Excellence Group was established to be a global centre of
excellence, to transform Laing O’Rourke’s capabilities through strategic innovation,
research and development, and enhanced technical performance.
Dr Harris is also Professor of Chemical and Bimolecular Engineering at the University
of Sydney and co- director of the Laboratory for Sustainable Technology, the state of
art laboratory where Hazer has established its core development activities for the Hazer
Process. Dr Harris was the youngest ever professor of Chemical Engineering appointed
at the University of Sydney.
cer of Zenogen Pty Ltd, a
Dr Harris was also previously the Chief Technology O
Sydney-based hydrogen production technology company, and was a co-founder of Oak
Nano, a University of Sydney start-up commercialising novel carbon nanotube
technology. Oak Nano designed and built the largest carbon nanotube production
facility in the southern hemisphere.
Director since 21 June 2016
Length of service:
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
None
Interests in shares:
None
Interests in options:
None
Contractual rights to shares:
ffi
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
HazerGroup
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
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 directors (including meetings of committees of directors) held during the year ended 30 June
2016, and the number of meetings attended by each director were:
Geoff Pocock
Rick Hopkins
Bryant McLarty
Danielle Lee
Andrew Harris
Full board
Attended
Held
3
3
3
3
-
3
3
3
3
-
Held: represents the number of meetings held during the time the director held office.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the company, 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.
HazerGroup
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 information
● Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the company’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
●
● capital management
transparency
The performance of the company depends on the quality of its directors and executives. The remuneration philosophy is to
attract, motivate and retain high performance and high quality personnel and is based on the following factors:
Alignment to shareholders' interests:
●
focuses on sustained growth in shareholder wealth, including growth in the share price, as well as focusing the executive
on key non-financial drivers of value
● attracts and retains high calibre executives
Alignment to program participants' interests:
rewards capability and experience
●
●
reflects competitive reward for contribution to growth in shareholder wealth
● provides 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 Nomination and Remuneration Committee. The Nomination and
Remuneration Committee 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. The chairman's fees are determined
independently to the fees of other non-executive directors based on comparative roles in the external market. The chairman
is not present at any discussions relating to the determination of his own remuneration.
Non-executive directors do not receive any retirement benefits, other than statutory superannuation.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
HazerGroup
ASX listing rules require the aggregate non-executive directors remuneration be determined periodically by a general
meeting. Aggregate fixed remuneration for all non-executive directors as determined by the Board is not to exceed $300,000
per annum. Directors’ fees cover all main board and committee activities.
The level of non-executive director fixed fees as at the reporting date are as follows:
Rick Hopkins $35,000 plus statutory superannuation per annum
Bryant McLarty $25,000 plus statutory superannuation per annum
Danielle Lee $25,000 plus statutory superannuation per annum
Andrew Harris $25,000 plus statutory superannuation per annum
Non-executive directors may also receive performance related compensation via options following receipt of shareholder
approval. Options issued to directors in the year ended 30 June 2016 were issued prior to the Company’s official listing on
the ASX and disclosed in a Prospectus lodged on 22 September 2015. The issue of share based payments as part of non-
executive director remuneration ensures that director remuneration is competitive with market standards as well as providing
an incentive to pursue longer term success for the Company. It also reduces the demand on the cash resources of the
Company, and assists in ensuring the continuity of service of directors who have extensive knowledge of the Company, its
business activities and assets and the industry in which it operates. Details of share-based compensation is contained in this
report.
Executive remuneration
The company 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
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually based on
individual and business unit performance, the overall performance of the company and comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the company and provides additional value to the executive.
Performance based short-term incentives ('STI') may be provided to executives to align the targets of the business with the
targets of those executives responsible for meeting those targets.
The long-term incentives ('LTI') include long service leave and share-based payments. Shares and options may be awarded
to executives based on long-term incentive measures including increasing shareholder value. Share based LTIs issued to
the Managing Director are subject to shareholder approval. Options issued to the Managing Director in the year ended
30 June 2016 were issued prior to the Company’s official listing on the ASX and disclosed in a Prospectus lodged on
22 September 2015.
Use of remuneration consultants
During the financial year ended 30 June 2016, the Company did not engage the services of independent remuneration
consultants to review its existing remuneration policies and provide recommendations on how to improve both the STI and
LTI programs.
Voting and comments made at the company's Annual General Meeting ('AGM')
Following the Company’s admission to the official list of the ASX on 30 November 2015, the Corporations Act requires that
a resolution to adopt the Remuneration Report be put to the vote of the Company. This will be undertaken at the next AGM
of the Company.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
Details of remuneration
HazerGroup
Amounts of remuneration
Details of the remuneration of key management personnel of the company are set out in the following tables.
The key management personnel of the company consisted of the following directors of Hazer Group Limited:
● Geoff Pocock – Managing Director
● Rick Hopkins – Non- Executive Chairman
● Bryant McLarty – Non- Executive Director
● Danielle Lee - Non- Executive Director (appointed 16 September 2015)
● Andrew Harris – Non- Executive Director (appointed 21 June 2016)
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Super- Long service
leave
$
annuation
$
Equity-
settled
$
Total
$
29,167
4,167
20,833
2,083
140,000
196,250
-
-
-
-
-
-
-
-
-
-
-
-
2,771
396
1,979
198
13,300
18,644
-
-
-
-
-
-
21,375
13,979
15,594
-
53,313
18,542
38,406
2,281
69,894
120,842
223,194
335,736
2016
Non-Executive
Directors:
Rick Hopkins*
Bryant McLarty**^
Danielle Lee*
Andrew Harris***
Executive
Directors:
Geoff Pocock****
Represents remuneration from 1 September 2015 to 30 June 2016
*
**
Represents remuneration from 1 May 2015 to 30 June 2016
*** Represents remuneration from 1 June 2015 to 30 June 2016
**** Represents remuneration from 1 December 2015 to 30 June 2016
^
The share based payments above are only those made in capacity as Director. They do not include amounts for
other services paid. Related party payments have been disclosed in Note 16.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
HazerGroup
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Super- Long service
leave
$
annuation
$
Equity-
settled
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
43,621
43,621
43,621
43,621
2015
Non-Executive
Directors:
Rick Hopkins
Bryant McLarty
Executive
Directors:
Geoff Pocock
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Rick Hopkins
Bryant McLarty
Danielle Lee
Andrew Harris
Executive Directors:
Geoff Pocock
Fixed remuneration
2016
2015
At risk - STI
2016
2015
At risk - LTI
2016
2015
-
-
-
100% -
60%
25%
59%
-
-
-
-
-
-
-
-
40%
75%
41%
-
-
-
-
-
69%
-
-
-
31%
100%
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Geoff Pocock
Managing Director and Chief Executive Officer
1 December 2015
Open
Base salary $240,000 plus statutory superannuation, to be reviewed by the
Remuneration and Nomination Committee 12 months from commencement and every
12 months thereafter or as otherwise agreed. 6 month termination notice by either
party. 6 month non-solicitation clause after termination. The Company may terminate
without notice in certain circumstances such as misconduct.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
Share-based compensation
HazerGroup
Options
The terms and conditions of each grant of options over ordinary shares during this financial year affecting remuneration of
directors and other key management personnel in this financial year or future reporting years are as follows:
Option
series
Series A
Series C
Series D
Total
Number of
options issued
Grant date
Vesting date and
exercisable date
Expiry date
Exercise
price
Fair value
per option
at grant date
350,000 16 September 2015 2 December 2015 31 December 2017
31 December 2018
31 December 2019
3,350,000 16 September 2015 2 June 2016
3,350,000 16 September 2015 2 June 2017
7,050,000
$0.25
$0.25
$0.40
$0.011
$0.017
$0.018
The Series A are primary Options which upon exercise result in the issue of one Share and one Series B Option (a secondary
option) are exercisable at $0.40 each and expire 31 December 2020. This is a reload feature and has been accounted for
as such under AASB 2 “Share-based payments”.
The options vest if the holder has continued to be engaged as an employee, contractor, consultant or Board member of the
Company prior to the vesting date.
Options granted carry no dividend or voting rights.
The number of options over ordinary shares granted to and vested by directors and other key management personnel as
part of compensation during the year ended 30 June 2016 are set out below:
Name
Geoff Pocock
Rick Hopkins
Bryant McLarty
Danielle Lee
Andrew Harris
Total
Number of
options
granted
during the
year
2016
4,000,000
1,300,000
800,000
950,000
-
7,050,000
Number of
options
granted
during the
year
2015
3,000,000
-
-
-
-
3,000,000
Number of
options
vested
during the
year
2016
2,000,000
750,000
400,000
550,000
-
3,700,000
Number of
options
vested
during the
year
2015
3,000,000
-
-
-
-
3,000,000
Values of options over ordinary shares granted, exercised and lapsed for directors and other key management personnel as
part of compensation during the year ended 30 June 2016 are set out below:
Name
Geoff Pocock
Rick Hopkins
Bryant McLarty
Danielle Lee
Andrew Harris
Value of
options
granted
during the
year
$
69,894
21,375
13,979
15,594
-
120,842
Value of
options
exercised
during the
year
$
Value of Remuneration
consisting of
options
options
lapsed
for the
during the
year
year
%
$
-
-
-
-
-
-
-
-
-
-
-
-
31%
40%
75%
41%
-
-
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only
DIRECTORS’ REPORT
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key management
personnel of the company, including their personally related parties, is set out below:
HazerGroup
Ordinary shares
Geoff Pocock
Rick Hopkins
Bryant McLarty
Danielle Lee
Andrew Harris
Balance at
the start of
the year
Received
as part of
remuneration
Additions
Disposals/
other
Additions
Balance at
the end of
the year
subsequent
to the year
end
4,200,000
800,010
1,800,000
-
-
6,800,010
-
-
-
-
-
-
-
-
393,979
-
-
393,979
-
-
-
-
-
4,200,000
800,010
2,193,979
-
-
7,193,989
-
-
118,490
-
-
118,490
Option holding
The number of options over ordinary shares in the company held during the financial year by each director and other
members of key management personnel of the company, including their personally related parties, is set out below:
Options over ordinary shares
Geoff Pocock
Rick Hopkins
Bryant McLarty
Danielle Lee
Andrew Harris
Balance at
the start of
the year
3,000,000
-
2,500,000^
-
-
5,500,000
Expired/
forfeited/
Granted
Exercised
Other *
Balance at
the end of
the year
Additions
subsequent
to the year
end
4,000,000
1,300,000
800,000
950,000
-
7,050,000
1,050,000
-
-
200,003
- 2,795,995^^
-
-
-
8,050,000
1,500,003
6,095,995
950,000
-
4,045,998 16,595,998
-
-
-
-
-
-
-
-
* Other represents listed options (ASX code: HZRO) issued as a result of each Director’s participation in an entitlement option
issue pursuant to a prospectus lodged on 21 March 2016.
^ During the 2015 financial year, Mac Equity Partners Pty Ltd (a company controlled by Bryant McLarty) were appointed as
underwriters for the capital raising that occurred in the 2015 financial year. Pursuant to an underwriter’s agreement, Mac
Equity Partners Pty Ltd were issued with 5,000,000 series A options valued at $72,703. Bryant McLarty was issued 2,500,000
of these options valued at $36,351 as a nominated party of Mac Equity Partners Pty Ltd.
^^ Bryant McLarty was issued 2,250,000 options valued at $249,746 as a nominated party of Mac Equity Partners Pty Ltd
(a company controlled by Bryant McLarty) pursuant to an agreement appointing Mac Equity Partners Pty Ltd as lead manager
of the initial public offering of the Company during the 2016 financial year. Please refer below for further details.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only
DIRECTORS’ REPORT
HazerGroup
Other transactions with key management personnel and their related parties
During the financial year, the following payments were made to key management personnel and their related parties:
- Mac Equity Partners Pty Ltd, a company controlled by Bryant McLarty, received a $300,000 capital raising fee and
10,000,000 Series E options valued at $1,109,953 as lead manager to the initial public offering. Mac Equity Partners Pty
Ltd was entitled to pass on any part of the fees to Australian financial services licensees or authorised representatives
or nominate parties to receive some of the Series E options. Bryant McLarty received 2,250,000 series E options valued
at $249,746.
- Mac Equity Partners (International) Pty Ltd a company of which Bryant McLarty and Geoff Pocock are directors and
shareholders received:
o $147,600 pursuant to a corporate services agreement to provide office space, internet, telephone, company
secretarial and accounting services to the Company; and
o a $35,784 capital raising fee as lead manager to a placement completed on 18 March 2016.
- Polaris Consulting (WA) Pty Ltd, a company controlled by Geoff Pocock, received $185,000 pursuant to a services
agreement to provide operational management services until the listing of the Company on the ASX. This agreement
ceased upon listing on the ASX. The amount received included a $50,000 success fee payable upon the listing of the
Company on the ASX prior to 31 December 2015.
- PKF Lawler, a company of which Rick Hopkins is a partner, received $15,357 for the provision of accounting services.
All transactions were made on normal commercial terms and conditions and at market rates.
This concludes the remuneration report, which has been audited.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
Shares under option
Unissued ordinary shares of Hazer Group Limited under option at the date of this report are as follows:
Option series
Grant date
Expiry date
Series A
Series A
Series A
Series C
Series D
Series E
Series E
Listed options
Total
30 January 2015
9 February 2015
16 September 2015
16 September 2015
16 September 2015
2 December 2015
14 March 2016
28 April 2016
30 June 2016
31 December 2017
31 December 2017
31 December 2017
31 December 2018
31 December 2019
31 December 2018
31 December 2018
31 December 2018
Additions/Disposals/Exercise subsequent to year end
Series F
Series G
Listed options
Total
1July 2016
1July 2016
28 April 2016
30 June 2019
30 June 2020
31 December 2018
Exercise
price
$0.25
$0.25
$0.25
$0.25
$0.40
$0.30
$0.30
$0.30
$0.55
$0.75
$0.30
HazerGroup
Number
under option
8,000,000
3,000,000
500,000
5,250,000
5,250,000
10,000,000
300,000
15,041,564
47,341,564
575,000
575,000
(33,632)
48,457,932
The Series A are primary Options which upon exercise result in the issue of one Share and one Series B Option (a secondary
option) are exercisable at $0.40 each and expire 31 December 2020.
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
The following ordinary shares of Hazer Group Limited were issued during the year ended 30 June 2016 and up to the date
of this report on the exercise of options granted:
Date options granted
Date shares issued
28 April 2016
28 April 2016
Total
30 June 2016
29 July 2016
Exercise
price
Number of
shares issued
$0.30
$0.30
3,750
33,632
37,382
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.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ REPORT
HazerGroup
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 13 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 13 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.
Officers of the company who are former partners of RSM Australia Partners
There are no officers of the company who are former partners of RSM Australia Partners.
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 Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
______________________________
Geoff Pocock
Managing Director
31 August 2016
Perth
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Hazer Group Limited for the year ended 30 June 2016, 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 AUSTRALIA PARTNERS
Perth, WA
Dated: 31 August 2016
TUTU PHONG
Partner
For personal use only
CONTENTS
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
Shareholder information
General information
HazerGroup
The financial statements cover Hazer Group Limited as a company consisting of Hazer Group Limited and the entities it
controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Hazer
Group Limited's functional and presentation currency.
Hazer Group Limited is a listed 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 31 August 2016. The
directors have the power to amend and reissue the financial statements.
HAZER GROUP LIMITED ANNUAL REPROT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
Revenue
Interest received
Other income
Expenses
Administration expenses
Consulting and research expenses
Share based payments
Finance costs
Employee benefits expense
Loss before income tax expense
Income tax expense
HazerGroup
Note
2016
$
2015
$
59,606
23,946
6,632
-
(712,929)
(601,992)
(149,908)
(181)
(462,900)
(59,164)
(204,836)
(264,994)
(131)
-
(1,844,358)
(522,493)
8
-
-
Loss after income tax expense for the year
(1,844,358)
(522,493)
Other comprehensive income
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Basic loss per share
Diluted loss per share
-
-
(1,844,358)
(522,493)
Cents
Cents
20
20
3.57
3.57
2.24
2.24
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only STATEMENT OF FINANCIAL POSITION
Assets
Current assets
Cash and cash equivalents
Other current assets
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
HazerGroup
Note
2016
$
2015
$
4
5
6
7
4,677,919
75,768
4,753,687
562,927
28,388
591,315
4,753,687
591,315
114,276
218,641
332,917
46,224
-
46,224
332,917
46,224
4,420,770
545,091
9
10
11
5,993,682
1,438,694
(3,011,606)
1,582,945
129,394
(1,167,248)
4,420,770
545,091
The above statement of financial position should be read in conjunction with the accompanying notes
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only STATEMENT OF CHANGES IN EQUITY
2015
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
equity
$
HazerGroup
Balance at 1 July 2014
714,232
-
-
-
-
(644,755)
69,477
(522,493)
(522,493)
-
-
(522,493)
(522,493)
-
-
-
Loss after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive loss for the year
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 9)
Share- based payments (note 19)
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
2016
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
equity
$
Balance at 1 July 2015
1,582,945
129,394
(1,167,248)
545,091
Loss after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive loss for the year
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 9)
Share-based payments (note 19)
-
-
-
-
(1,844,358)
(1,844,358)
-
-
-
-
(1,844,358)
(1,844,358)
4,368,737
42,000
-
1,309,300
-
-
4,368,737
1,351,300
Balance at 30 June 2016
5,993,682
1,438,694
(3,011,606)
4,420,770
The above statement of changes in equity should be read in conjunction with the accompanying notes
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only STATEMENT OF CASH FLOWS
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest and other finance costs paid
Research and development tax rebate received
HazerGroup
Note
2016
$
2015
$
-
(1,527,891)
-
(242,882)
(1,527,891)
(242,882)
48,990
(181)
23,945
6,632
(131)
-
Net cash used in operating activities
18
(1,455,137)
(236,381)
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Proceeds from exercise of share options
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
6,045,053
(476,049)
1,125
733,113
-
-
5,570,129
733,113
4,114,992
562,927
496,732
66,195
Cash and cash equivalents at the end of the financial year
4
4,667,919
562,927
The above statement of cash flows should be read in conjunction with the accompanying notes
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only NOTES TO THE FINANCIAL STATEMENTS
HazerGroup
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 ('AASB') 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 ('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').
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.
Operating segments
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.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Hazer Group Limited's functional and presentation
currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only NOTES TO THE FINANCIAL STATEMENTS
HazerGroup
Note 1. Significant accounting policies (Cont’d)
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.
Other income
Other income is primarily the research and development tax refund received for a claim under the Commonwealth
Government’s Research and Development Tax Incentive Regime. Revenue is recorded once it is probable that the company
will receive the benefit.
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.
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.
Deferred tax assets and liabilities are always classified as non-current.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only NOTES TO THE FINANCIAL STATEMENTS
HazerGroup
Note 1. Significant accounting policies (Cont’d)
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 the statement of cash flows presentation purposes, 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.
Employee benefits
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.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
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 at fair value on grant date. Fair value is independently determined using
an option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share
price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest
rate for the term of the option, together with non-vesting conditions that do not determine whether the company receives the
services that entitle the employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense 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 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.
All changes in the liability are recognised in profit or loss. 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.
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 company or employee, the failure to satisfy the condition is treated as
a cancellation. If the condition is not within the control of the company 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.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only NOTES TO THE FINANCIAL STATEMENTS
HazerGroup
Note 1. Significant accounting policies (Cont’d)
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.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Hazer Group 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.
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 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.
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 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.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only NOTES TO THE FINANCIAL STATEMENTS
Note 1. Significant accounting policies (Cont’d)
New Accounting Standards and Interpretations not yet mandatory or early adopted
A number of Australian Accounting Standards that have been issued or amended but are not yet effective have not been
adopted by the Company for the annual reporting period ended 30 June 2016. The effect of these new or amended Accounting
Standards is expected to give rise to additional disclosures and new policies being adopted. Refer below for the Standards
relevant to the Company that are not yet effective and have not been early adopted.
HazerGroup
Application
date of
standard
1 January
2019
Application
date for
Company
1 July
2019
Reference
Title
Summary
AASB 16
Leases
The key features of AASB 16 are as follows:
Lessee accounting
• Lessees are required to recognise assets and liabilities for all
leases with a term of more than 12 months, unless the underlying
asset is of low value.
• A lessee measures right-of-use assets similarly to other non-
financial assets and lease liabilities similarly to other financial
liabilities.
• Assets and liabilities arising from a lease are initially measured on
a present value basis. The measurement includes non-cancellable
lease payments (including inflation-linked payments), and also
includes payments to be made in optional periods if the lessee is
reasonably certain to exercise an option to extend the lease, or not
to exercise an option to terminate the lease.
• AASB 16 contains disclosure requirements for lessees
Lessor accounting
• AASB 16 substantially carries forward the lessor accounting
requirements in AASB 117. Accordingly, a lessor continues to
classify its leases as operating leases or finance leases, and to
account for those two types of leases differently.
• AASB 16 also requires enhanced disclosures to be provided by
lessors that will improve information disclosed about a lessor’s risk
exposure, particularly to residual value risk.
AASB 16 supersedes:
(a) AASB 117 Leases
(b) Interpretation 4 Determining whether an Arrangement contains a
Lease
(c) SIC-15 Operating Leases—Incentives
(d) SIC-27 Evaluating the Substance of Transactions Involving the
Legal Form of a Lease
The new standard will be effective for annual periods beginning on
or after 1 January
2019. Early application is permitted, provided the new revenue
standard, AASB 15 Revenue from Contracts with Customers, has
been applied, or is applied at the same date as AASB 16.
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.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only NOTES TO THE FINANCIAL STATEMENTS
Note 2. Critical accounting judgements, estimates and assumptions (Cont’d)
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. The fair value is determined by using either the Binomial or Black-Scholes
model taking into account the terms and conditions upon which the instruments were granted. 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.
HazerGroup
Note 3. Operating segments
The Company has considered the requirements of AASB8 – Operating Segments and has identified its operating segments
based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in
assessing performance and determining the allocation of resources.
The company operates as a single segment being research and development of novel graphite and hydrogen production
technology. The board of directors review the earnings before tax and net assets of the company. The information is reported
on a monthly basis. There is no difference between the audited financial report and the internal reports generated for review.
The company is domiciled in Australia and is currently in the development phase and hence has not begun to generate
revenue from operations. All the assets are located in Australia.
Note 4. Cash and cash equivalents
Cash at bank
Cash on deposit
Note 5. Other current assets
Prepayments
GST refundable
Accrued interest
Note 6. Trade and other payables
Trade payables
Other payables
2016
$
2015
$
1,177,919
3,500,000
562,927
-
4,677,919
562,927
2016
$
22,500
42,652
10,616
2015
$
-
28,388
-
75,768
28,388
2016
$
41,478
72,798
2015
$
46,224
-
114,276
46,224
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only NOTES TO THE FINANCIAL STATEMENTS
Note 7. Provisions
Employee benefits - current
Research agreement
Note 8. Income Tax
HazerGroup
2016
$
18,641
200,000
218,641
2015
$
-
-
-
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 28.5% (2015: 30%)
Tax losses not brought to account
Income tax benefit attributable to operating loss
2016
$
2015
$
525,642
(525,642)
156,758
(156,758)
-
-
A potential deferred tax asset, attributable to tax losses carried forward, amounts to approximately $748,092 (2015: $222,450)
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 research and development 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 research and development expenditure.
Note 9. Equity - issued capital
Ordinary shares
Listed options
2016
Shares
2015
Shares
2016
$
2015
$
64,540,752
36,192,002
5,845,279
1,582,945
15,041,564
-
148,403
-
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only NOTES TO THE FINANCIAL STATEMENTS
Note 9. Equity - issued capital (cont)
Ordinary share capital
Movements in ordinary share capital
HazerGroup
Details
Date
No of shares
Issue price
$
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
Balance
Balance
Issue of shares
Share issue transaction costs, net of tax
Issue of shares
Share issue transaction costs, net of tax
Issue of shares to contractors
Issue of shares on exercise of options
Balance
1 July 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
30 June 2015
2 December 2015
2 December 2015
18 March 2016
18 March 2016
18 March 2016
30 June 2016
30 June 2016
Listed options
Movements in listed options
Balance
Issue of entitlement options
Option issue transaction costs, net of tax
Exercise of options
Balance
Total issued capital
28 April 2016
28 April 2016
30 June 2016
30 June 2016
30 June 2016
15,299,010
13,841,833
-
3,750,000
1,250,000
1,457,177
-
393,982
200,000
36,192,002
25,000,000
-
3,195,000
-
150,000
3,750
64,540,752
15,045,314
-
(3,750)
15,041,564
$0.05
$0.05
$0.05
$0.05
$0.05
$0.05
$0.20
$0.28
$0.28
$0.30
$0.01
714,232
692,092
(145,000)
187,500
62,500
72,859
(30,937)
19,699
10,000
1,582,945
5,000,000
(1,611,416)
894,600
(63,975)
42,000
1,125
5,845,279
150,453
(2,050)
-
148,403
5,993,682
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
There is no current on-market share buy-back scheme in place.
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.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
Note 9. Equity - issued capital (cont)
HazerGroup
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.
The company would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current company's share price at the time of the investment. The company is not actively pursuing additional
investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.
The capital risk management policy remains unchanged from the previous financial reporting year.
Note 10. Equity - reserves
Option reserve
2016
$
2015
$
1,438,694
129,394
1,438,694
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 2014
Issue of options
Balance at 30 June 2015
1 July 2015
New options issued during the year vesting over multiple periods
Issue of options
Balance at 30 June 2016
Note 11. 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
No of
Options
-
11,000,000
11,000,000
Value
$
-
129,394
129,394
21,300,000
1,309,300
32,300,000
1,438,694
2016
$
2015
$
1,167,248
1,844,358
644,755
522,493
3,011,606
1,167,248
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only NOTES TO THE FINANCIAL STATEMENTS
Note 12. Key management personnel disclosures
Compensation
The aggregate compensation made to key management personnel of the company is set out below:
HazerGroup
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Note 13. Remuneration of auditors
2016
$
196,250
18,644
-
120,842
2015
$
-
-
-
43,621
335,736
43,621
During the financial year the following fees were paid or payable for services provided by RSM Australia Partners, the auditor
of the company, its network firms and unrelated firms:
Audit services
Audit or review of the financial statements
Other services
Investigating Accountants Report
Note 14. Contingent assets and liabilities
The company does not have any contingent assets or contingent liabilities at 30 June 2016.
Note 15. Commitments
Corporate services – including lease of office space, company and secretarial services
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
Total
2016
$
2015
$
39,000
10,000
-
10,000
39,000
20,000
2016
$
2015
$
13,000
13,000
13,000
13,000
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only NOTES TO THE FINANCIAL STATEMENTS
HazerGroup
Note 16. Related party transactions
Key management personnel
Disclosures relating to key management personnel are set out in note 12 and the remuneration report in the directors' report.
Transactions with related parties
During the financial year, the following transactions occurred with related parties:
- Mac Equity Partners Pty Ltd, a company controlled by Bryant McLarty, received a $300,000 capital raising fee and
10,000,000 Series E options as lead manager to the initial public offering. Mac Equity Partners Pty Ltd was entitled to
pass on any part of the fees to Australian financial services licensees or authorised representatives or nominate parties
to receive some of the Series E options. Bryant McLarty received 2,250,000 series E options valued at $249,746.
- Mac Equity Partners (International) Pty Ltd a company of which Bryant McLarty and Geoff Pocock are directors and
shareholders received:
o $147,600 pursuant to a corporate services agreement to provide office space, internet, telephone, company
secretarial and accounting services to the Company; and
o a $35,784 capital raising fee as lead manager to a placement completed on 18 March 2016.
- Polaris Consulting (WA) Pty Ltd, a company controlled by Geoff Pocock, received $185,000 pursuant to a services
agreement to provide operational management services until the listing of the Company on the ASX. This agreement
ceased upon listing on the ASX. The amount received included a $50,000 success fee payable upon the listing of the
Company on the ASX prior to 31 December 2015.
- PKF Lawler, a company of which Rick Hopkins is a partner, received $15,357 for the provision of accounting services.
All transactions were made on normal commercial terms and conditions and at market rates.
Receivable from and payable to related parties
There was $12,777 owing to PKF Lawler at 30 June 2016. In the previous financial year, there was $32,656 owing to Polaris
Consulting (WA) Pty Ltd at 30 June 2015.
Note 17. Events after the reporting period
On 22 July 2016, the following options were issued to the Chairman of the Science Advisory Committee (i) 575,000 options
exercisable at $0.55 each which vest 6 months after appointment provided the holder has continued to be engaged as an
employee or contractor of the Company prior to the vesting date and (ii) 575,000 options exercisable at $0.75 each which
vest 18 months after appointment provided the holder has continued to be engaged as an employee or contractor of the
Company prior to the vesting date.
On 1 July 2016, the same options as noted above were resolved to be issued to Andrew Harris as a Director of the Company
and are subject to shareholder approval at the next annual general meeting. The details of the options resolved to be issued
whilst still subject to shareholder approval at the next annual general meeting are as follows (i) 575,000 options exercisable
at $0.55 each and expiring 30 June 2019 which vest 6 months after appointment provided the holder has continued to be
engaged as an employee or contractor of the Company prior to the vesting date and (ii) 575,000 options exercisable at $0.75
each and expiring 30 June 2020 which vest 18 months after appointment provided the holder has continued to be engaged
as an employee or contractor of the Company prior to the vesting date.
On 29 July 2016 33,632 ordinary shares were issued on the exercise of 33,632 listed options (ASX code: HZRO) at an
exercise price of $0.30 each generating share issue proceeds of $10,090.
No other matter or circumstance has arisen since 30 June 2016 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.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only NOTES TO THE FINANCIAL STATEMENTS
Note 18. Reconciliation of profit 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:
trade and other receivables
trade and other payables
employee benefits
other provisions
-
-
-
-
Net cash used in operating activities
Note 19. Share based payments
HazerGroup
2016
$
2015
$
(1,844,358)
(522,493)
149,908
264,994
(47,380)
68,052
18,641
200,000
(25,106)
46,224
-
-
(1,455,137)
(236,381)
For the year ended 30 June 2016:
On 18 March 2016, 150,000 shares were issued to contractors at an issue price of $0.28 per share with a total value of
$42,000.
Set out below are summaries of the movements of options granted to key management personnel, employees and
contractors of the company:
2016
Grant date
Expiry date
30/01/2015
09/02/2015
16/09/2015
16/09/2015
16/09/2015
25/11/2015
14/03/2016
31/12/2017
31/12/2017
31/12/2017
31/12/2018
31/12/2019
31/12/2018
31/12/2018
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
$0.25
$0.25
$0.25
$0.25
$0.40
$0.30
$0.30
8,000,000
3,000,000
-
-
-
-
-
11,000,000
-
-
500,000
5,250,000
5,250,000
10,000,000
300,000
21,300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,000,000
3,000,000
500,000
5,250,000
5,250,000
10,000,000
300,000
32,300,000
Weighted average exercise price
$0.25
$0.31
$0.00
$0.00
$0.29
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.
Set out below are summaries of the movements of options granted to key management personnel, employees and
contractors of the company:
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
HazerGroup
Note 19. Share based payments (cont)
2015
Grant date
Expiry date
30/01/2015
09/02/2015
31/12/2017
31/12/2017
Exercise
price
$0.25
$0.25
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
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
Set out below are the options exercisable at the end of the financial year:
Option series Grant date
Expiry date
Series A
Series A
Series A
Series C
Series D
Series E
Series E
30/01/2015
09/02/2015
16/09/2015
16/09/2015
16/09/2015
25/11/2015
14/03/2016
31/12/2017
31/12/2017
31/12/2017
31/12/2018
31/12/2019
31/12/2018
31/12/2018
2016
Number
2015
Number
8,000,000 8,000,000
3,000,000
-
-
-
-
-
3,000,000
500,000
5,250,000
5,250,000
10,000,000
300,000
32,300,000
11,000,000
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 Series D Options vest on 2 June 2017, 18 months after the Company was admitted to the official list of the ASX, provided
the holder (or nominee) has continued to be engaged as an employee, contractor, consultant or Board member of the
Company prior to the vesting date. 300,000 Series E options vest on 18 September 2016 provided the holder (or nominee)
has continued to be engaged as an employee, contractor, consultant or Board member of the Company prior to the vesting
date.
The total value of the share options outlined above was $1,510,517 valued using the Black-Scholes model. During the year
ended 30 June 2016, $149,908 was charged to profit or loss. A portion of the options issued above was recognised in equity
as a capital raising cost as it relates to capital raising efforts during the financial year. The remainder will be expensed in
future financial periods.
The weighted average remaining contractual life of options outstanding at the end of the financial year was 2.31 years (2015:
2.5 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
16/09/2015
16/09/2015
16/09/2015
25/11/2015
14/03/2016
31/12/2017
31/12/2018
31/12/2019
31/12/2018
31/12/2018
Share price
at grant date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
Fair value
interest rate at grant date
$0.05
$0.05
$0.05
$0.20
$0.28
$0.25
$0.25
$0.40
$0.30
$0.30
100.00%
100.00%
100.00%
100.00%
100.00%
0.00%
0.00%
0.00%
0.00%
0.00%
1.86%
1.84%
1.98%
2.06%
1.95%
$0.011
$0.017
$0.018
$0.111
$0.166
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only NOTES TO THE FINANCIAL STATEMENTS
HazerGroup
Note 19. Share based payments (cont)
Expenses arising from share based payment transactions
Total expenses arising from share based payment transactions recognised during the period were as follows:
Options issued to KMP
Options issued to employees/consultants
Shares issued to employees/consultants
Less:
Options issued as part of capital raising
Total
Note 20. Earnings per share
Loss after income tax
Non-controlling interest
2016
$
2015
$
120,842
1,156,099
42,000
43,621
158,476
135,600
(1,169,033)
(72,703)
149,908
264,994
2016
$
2015
$
1,844,358
-
522,493
-
Loss after income tax attributable to the owners of Hazer Group Limited
1,844,358
522,493
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Options over ordinary shares
Number
Number
51,633,810
23,319,680
32,300,000
11,000,000
Weighted average number of ordinary shares used in calculating diluted earnings per share
83,933,810
34,319,680
Basic loss per share
Diluted loss per share
Cents
Cents
3.57
3.57
2.24
2.24
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only DIRECTORS’ DECLARATION
HazerGroup
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 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 company’s financial position as at 30 June
2016 and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable; and
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
______________________________
Geoff Pocock
Managing Director
31 August 2016
Perth
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
HAZER GROUP LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Hazer Group Limited, which comprises the statement of
financial position as at 30 June 2016, 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.
For personal use only
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 2016 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.
Report on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended 30 June
2016. 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.
Opinion
In our opinion, the Remuneration Report of Hazer Group Limited for the year ended 30 June 2016 complies with
section 300A of the Corporations Act 2001.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 31 August 2016
TUTU PHONG
Partner
For personal use only
SHAREHOLDER INFORMATION
ASX Additional Information
The Company’s ordinary shares are quoted as ‘HZR’ on ASX. The Company’s listed options are quoted as ‘HZRO’ on
ASX.
The shareholder information set out below was applicable as at 5 August 2016.
HazerGroup
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Holding less than a marketable parcel
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Holding less than a marketable parcel
Number
of ordinary
Number
of holders
shares of ordinary
shares
46,804,450
14,649,277
2,112,427
974,575
33,655
100
375
242
316
46
64,574,384
1,079
-
-
Number
of listed
options
Number
of holders
of listed
options
7,049,399
6,711,153
632,327
562,839
52,214
15,007,932
85,409
29
188
80
204
72
573
99
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only SHAREHOLDER INFORMATION
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of each class of quoted equity securities are listed below:
HazerGroup
OOFY PROSSER PTY LTD
POINT AT INFINITY PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
MINERAL RESOURCES LIMITED
THE UNIVERSITY OF WESTERN AUSTRALIA
MR PAUL HARTLEY WATTS
MR BRYANT JAMES MCLARTY
MR JOHN OAKLEY CLINTON
KINETIC TRADE PTY LTD
MR JOHN OAKLEY CLINTON & MRS LILIAN ACHIENG CLINTON
MRS HELEN LEWIS
JAKANA PTY LTD
MR BRYANT JAMES MCLARTY
MR JASON PAUL SKINNER
CL SEWARD & CO PROPRIETARY LTD
MR NICHOLAS STUART BEATON DUNCAN
MRS CLAIRE ELIZABETH ALLEN
NATIONAL NOMINEES LIMITED
MR PETER HOWELLS
ZERO NOMINEES PTY LTD
POINT AT INFINITY PTY LTD
OOFY PROSSER PTY LTD
MINERAL RESOURCES LIMITED
MR PAUL HARTLEY WATTS
MR BRYANT JAMES MCLARTY
MR MARK DOUGLAS HOLMES
KINETIC TRADE PTY LTD
MR MARTIN DURISKA
NEW MEDICAL ENTERPRISES PTY LTD
JAKANA PTY LTD
MR BRYANT JAMES MCLARTY
MRS CLAIRE ELIZABETH ALLEN
MR PETER HOWELLS
MR JOHN OAKLEY CLINTON
MR JOHN COLIN LOOSEMORE & MRS SUSAN MARJORY LOOSEMORE
MR NICHOLAS STUART BEATON DUNCAN
ZERO NOMINEES PTY LTD
MR ERIK TYLER
MARIA POCOCK
CREGGAN HOLDINGS LTD
Ordinary shares
Number held
% of total
shares
issued
3,700,000
3,548,583
2,088,134
2,000,000
1,666,667
1,500,000
1,350,000
1,256,159
1,075,000
953,031
899,000
815,000
813,979
808,744
800,000
724,000
685,000
677,780
600,000
562,752
5.73
5.50
3.24
3.10
2.58
2.32
2.09
1.95
1.67
1.48
1.39
1.26
1.26
1.25
1.24
1.12
1.06
1.05
0.93
0.87
26,523,829
41.09
Listed options
Number held
% of total
shares
issued
937,146
925,000
500,000
400,000
337,500
335,704
268,750
263,989
250,000
203,750
200,995
171,250
162,500
152,411
150,000
146,000
142,500
136,545
125,000
125,000
6.24
6.16
3.33
2.67
2.25
2.24
1.79
1.76
1.67
1.36
1.34
1.14
1.08
1.02
1.00
0.97
0.95
0.91
0.83
0.83
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
5,934,090
39.54
For personal use only SHAREHOLDER INFORMATION
Unquoted equity securities
Options over ordinary shares – Series A
Options over ordinary shares – Series C
Options over ordinary shares – Series D
Options over ordinary shares – Series E
Options over ordinary shares – Series F
Options over ordinary shares – Series G
Total
Restricted securities
Securities subject to ASX imposed restrictions on trading are set out below:
Ordinary shares
Options over ordinary shares – Series A
Options over ordinary shares – Series C
Options over ordinary shares – Series D
Options over ordinary shares – Series E
Substantial holders
Substantial holders in the company are set out below:
Geoff Pocock
Andrew Cornejo
Voting rights
The voting rights attached to ordinary shares are set out below:
HazerGroup
Number
on issue
Number
of holders
11,500,000
5,250,000
5,250,000
10,300,000
575,000
575,000
33,450,000
7
6
6
9
1
1
Number
restricted
Restricted
until
10,219,837
11,350,000
4,850,000
4,850,000
10,000,000
2 Dec 2017
2 Dec 2017
2 Dec 2017
2 Dec 2017
2 Dec 2017
Ordinary shares
Number held
% of total
shares
issued
4,200,000
3,748,583
6.50
5.81
Ordinary shares
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.
There are no other classes of equity securities.
On-market Buy-back
There is no current on-market buy-back of the Company’s securities in place.
HAZER GROUP LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
For personal use only