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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 2020
For the year ended 30 June 2019
2. Results for announcement to the market
Revenues from ordinary activities
down
14% to
1,436,617
Loss from ordinary activities after tax attributable to the owners of Hazer
Group Limited
down
27%
to
3,225,289
Loss for the year attributable to the owners of Hazer Group Limited
down
27% to
3,225,289
Dividends
$
Final dividend for the year ended 30 June 2020
Interim dividend for the year ended 30 June 2020
No dividend has been declared.
Comments
The loss for the Company amounted to $3,225,289 (30 June 2019: $4,396,377).
Amount per
security
Cents
Franked
amount per
security
Cents
0.0
0.0
0.0
0.0
Losses after income tax decreased by 27% on the prior year largely due to the Company’s non-cash expenditure decreasing
by 58% to $717,125 (2019: $1,708,942). Non-cash expenditure includes share based payments associated with expensing
options issued to management and employees and depreciation and amortisation expenses. In particular the Company’s
amortisation expense was nil in the year (2019: $793,238) with Company’s pilot plant fully depreciated in the prior year.
The Company’s total cash operating expenditure including administration, consulting and research and employee expenses
and finance costs decreased by 9% to $3,944,781 (30 June 2019: $4,356,803).
The Company’s cash and cash-equivalent were $17,236,257 at 30 June 2020 (30 June 2019: $6,003,608) and net assets at
30 June 2020 were $18,013,551 (30 June 2019: $5,834,306).
The net operating cash outflow for the year of $2,493,508 was consistent with the prior period (30 June 2019: $2,570,609).
The Company’s operating cash outflows were partly offset by a research and development tax incentive rebate of $1,339,951
(2019: $1,639,241) and a Covid cash boost payment from the Australian Federal Government of $50,000 (2019: Nil). The
Australian Federal Government’s R&D Tax Incentive program provides a cash refund on eligible research and development
activities performed by Australian companies and is an important program that strongly supports Australian innovation.
Investing cash outflows of $971,900 (2019: $42,719) during the year related to capital costs associated with the Hazer
Commercial Demonstration Plant. Investing cash outflows in the prior year related to plant and equipment purchases.
Financing cash inflows increased by 504% to $14,698,597 (2019: $2,431,837). Funds were generated during the year from
a placement to institutional and sophisticated shareholders and Share Purchase Plan in November 2019 and December
2019 respectively at an issue price of $0.385 per share raising total proceeds of $5,957,507 before share issue costs and a
placement to institutional and sophisticated shareholders in June 2020 at an issue price of $0.42 per share raising total
proceeds of $8,400,000 before share issue costs. In addition funds were raised during the year from the exercise of 900,000
unlisted Series D options ($0.40 exercise price) and 2,625,000 unlisted Series B options ($0.40 exercise price) which raised
a total of $1,410,000 before share issue costs. Share issue costs incurred during the year were $1,035,044.
Hazer Group Limited
Appendix 4E
Final report
As an early-stage company, the Company’s business model highly depends on the achievement of continued technical
development success, future funding, customer engagement and general financial and economic factors.
Reporting
period
Cents
Previous
period
Cents
13.22
6.00
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 2020 is attached.
9. Signed
Signed ______________________________
Date: 24 August 2020
Tim Goldsmith
Director
Hazer Group Limited
ABN 40 144 044 600
Annual Report – 30 June 2020
CORPORATE DIRECTORY
Directors
Tim Goldsmith (Non-Executive Chairman)
Danielle Lee (Non-Executive Director)
Andrew Harris (Non-Executive Director)
Geoff Ward (Executive Director)
Company secretary
Emma Waldon
Registered office
Principal place of business
Level 9, 99 St Georges Terrace
Perth WA 6000
Level 9, 99 St Georges Terrace
Perth WA 6000
Share register
Auditor
Solicitors
Bankers
Link Market Services Limited
QV1 Building, Level 12, 250 St Georges Terrace
Perth WA 6000
RSM Australia Partners
Level 32, Exchange Tower, 2 The Esplanade
Perth WA 6000
Lavan Legal
Level 20/1 William St
Perth WA 6000
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
3
Twww.hazergroup.com.au
Corporate Governance Statement
http://www.hazergroup.com.au/about/corporate-governance
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
1
T
3
1
CHAIRMAN’S LETTER
Dear Shareholder
On behalf of the Board, I am pleased to present the 2020 Annual Report to shareholders.
During the past year, the Company made significant progress towards the commercialisation of the Hazer Process and in July
2020 the Board was pleased to approve the final investment decision for the Hazer Commercial Demonstration Plant (CDP)
Project. The CDP will be the first fully integrated, operational production facility based on the Hazer Process and represents
the key next step in fully commercialising the Hazer technology.
Pursuing the scale-up of the Hazer technology through a commercial demonstration site is a key platform of our strategy to
commercialise the Hazer technology. It will allow us to demonstrate the safe and efficient scale-up of our technology, provide
a reference site to future customers, and establish initial markets for graphite products. We believe this will position us well
to capture opportunities in the emerging market for low-emission hydrogen servicing transport sector, clean heating and power
services and, later, low carbon industrial processes.
Funding for the CDP was secured though the year through a combination of equity capital raisings totalling $15.8 million
(before share issue costs), grant funding of up to $9.41 million from the Australian Renewable Energy Agency (ARENA) and
a $6.0 million senior secured loan facility from Mitchell Asset Management (MAM).
We are delighted and appreciative of the strong support that has been shown for Hazer during the year from both existing and
new shareholders to the Company. This has been vital to allow us to make the significant progress we have over the last 12
months in securing our first demonstration project.
In addition to the support from our shareholders I would also like to highlight the strong support and engagement we have
received from Water Corporation and ARENA. I would like to thank Water Corporation for their engagement and support in
completing the binding agreements for biogas supply and project collaboration for the CDP, and ARENA for their ongoing
support in funding this exciting Australian developed technology. We look forward to continuing to work with you to deliver an
excellent project.
While Hazer’s primary focus over the past year has been the development of the Commercial Demonstration Project, we have
continued to make significant progress with our research and development program and also our commercial development
activities with significant developments in both areas.
In R&D during 2020, we were accepted as a member of the Innovative Manufacturing Cooperative Research Centre, providing
us with an enhanced R&D platform at lower ongoing costs. Dr. Andrew Cornejo continues to lead this endeavour with our
team of dedicated post-doctoral researchers, contributing to the ongoing refinement of the Hazer process and examination of
the many possibilities the Hazer graphite provides to a wide range of potential users.
During the year, we were also delighted to announce a Memorandum of Understanding for collaboration of the
commercialisation of the Hazer Technology in Japan with Chiyoda Corporation. In January 2020, we were also pleased to
secure a grant from the Western Australian government to undertake a feasibility study into establishing a renewable hydrogen
refuelling infrastructure in the City of Mandurah and Peel Region. We look forward to exciting opportunities developing from
these and other activities in 2021.
Finally, I would like to thank Mike Grey who resigned as Mineral Resources Limited’s nominated Director during the year for
his collaborative and constructive relationship with the Company and important contribution to Hazer during his time as a Non-
Executive director.
I look forward to your continued support as a shareholder as the Company continues its commercialisation activities.
Yours faithfully
Mr Tim Goldsmith
Non-Executive Chairman
Hazer Group Limited
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
MANAGING DIRECTOR’S REPORT
ABOUT HAZER GROUP
Hazer Group Limited (“Hazer” or the “Company”) is the commercialisation entity for the Hazer Process – a potential low-cost,
low-emission novel hydrogen-and-graphite production technology, originally developed at the University of Western Australia.
Low-emission hydrogen and graphite are both key products in a de-carbonising economy, and there is a significant global
focus on developing a hydrogen economy as part of a transition to a low-carbon environment.
The Hazer Process enables the production of hydrogen from methane in an environmentally friendly process together with
the production of high-purity graphite. The Hazer Process captures the full value of feedstock by producing two valuable
products without creating CO2 in the process.
The Hazer Process has several distinguishing features from existing commercial hydrogen-production technologies that are
either high in emissions or expensive. The features include the use of iron ore/iron oxide as a low-cost catalyst for the process;
the co-production of high-purity graphite; and the avoidance of a significant proportion of the CO2 emissions associated with
traditional hydrogen-production systems.
During the year, the Company made significant progress on its core development pathway to commercialise the Hazer
Process, the Hazer Commercial Demonstration Plant (“CDP”) and in July 2020 the Board approved the final investment
decision to proceed with the Project.
COMMERCIAL DEMONSTRATION PLANT PROJECT
Project Overview
The CDP is a 100-ton-per-annum low-emission hydrogen production facility that will be the first larger-scale, fully integrated
deployment of the Hazer Process. The hydrogen produced will be fuel cell grade, capable of use as a low-emission transport
fuel, for power generation or in clean industrial applications.
The Hazer CDP will be located at Water Corporation’s Woodman Point Wastewater Treatment Plant at Munster in Western
Australia. The CDP will use biogas produced at the treatment plant as feedstock to produce hydrogen and graphite. The
Project will utilise approximately two million standard cubic metres of biogas that is currently being flared for environmental
mitigation.
The Project has a CAPEX budget of $17.0 million and includes a stationary hydrogen fuel cell power-generation system. This
will allow Hazer to use some of the hydrogen produced by the CDP to generate its own renewable power, thereby offsetting
power purchased from utility providers and reducing Project operating costs. The installation of the hydrogen fuel cell will be
one of the first larger-scale installations in Australia and will demonstrate the technology’s ability to be integrated with the
Australian grid.
Hazer has appointed Perth-based Primero Group as the engineering, procurement, and construction contractor for the Project.
Hazer has been working with Primero Group under an Early Contractor Involvement contract to develop the detailed design,
procurement packages, project schedules and budgets since June 2019. Due to the CDP’s pioneering nature and the need
for Hazer, as the process technology owner, to be closely involved in design and procurement decisions, the contract with
Primero will be a reimbursable contract with a target budget in place against a detailed scope of work and cost estimate.
The CDP is expected to commence pre-commissioning activities in Q2 calendar year 2021 and achieve practical completion
in mid-2021. The Project is intended to operate for up to three years or until the end of 2023, depending on the future
operational plans of the Woodman Point facility.
Project Financing
Funding for the CDP has been secured through a combination of equity capital raisings during the year totalling $15.8 million
(before share issue cost), grant funding of up to $9.41 million from the Australian Renewable Energy Agency (ARENA) and a
$6.0 million senior secured loan facility from Mitchell Asset Management (MAM).
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
MANAGING DIRECTOR’S REPORT
ARENA Funding Agreement
In March 2020, Hazer entered into a binding Funding Agreement with the Australian Renewable Energy Agency (ARENA) for
a grant of up to $9.41 million to support the construction and operation of the CDP. Subsequent to the end of the year, Hazer
was pleased to advise that all conditions precedent to this agreement have been, or are capable of being met and Hazer will
be able to draw down the grant upon achievement of the agreed milestones, submission of required reports, and verification
of submissions by ARENA.
Senior Secured Loan Facility
In July 2020, Hazer executed binding agreements with Mitchell Asset Management (MAM) in its capacity as trustee for the
Mitchell Asset Management Go-Innovation Finance Fund (ABN 88 447 520 706) for a $6 million senior secured loan facility
to support the construction of the CDP, for which the parties had previously entered into a non-binding Term Sheet during the
year. The key purpose of the loan is to fund the R&D activities associated with the construction of the CDP, however, the loan
may also be utilised to improve the short term liquidity of the Company and cover the lending costs.
The loan, which will be called down in 3 tranches of $2 million each, has a term of up to 5 years with repayments to be made
from future R&D Tax Incentive payments received by Hazer. MAM will hold security over all future R&D Tax Incentive rebates
received by the Hazer, as well as a registered security interest over the present and future assets of Hazer, under a general
security deed to be granted by Hazer in favour of MAM. The Australian Federal Government’s R&D Tax Incentive Program
provides a cash refund on eligible research and development activities performed by Australian companies. The drawdown of
the first tranche is expected to be made in Q3 calendar year 2020.
Together, Hazer’s cash resources ($17.2 million as at 30 June 2020), the MAM loan and the ARENA grant are forecast to be
sufficient to fully fund the construction of the CDP and the first 12 months of planned operations, plus the Company’s ongoing
R&D program, business development activities and ongoing corporate costs until June 2022.
COMMERCAL OPPORTUNITIES & PARTNERSHIPS
As part of its commercial development strategy, Hazer has engaged extensively with potential partners in key early adopter
markets for low-emission hydrogen. Hazer has focussed on markets that have strong support for the transition to a hydrogen
economy and the uptake of hydrogen as a transport fuel. Particularly, Hazer is considering emerging premium low-emission
hydrogen opportunities in Asia. Hazer is also identifying opportunities in markets such as the USA (California) and Europe.
Memorandum of Understanding with Chiyoda Corporation
During the year, Hazer was pleased to enter into a Memorandum of Understanding (MOU) with Chiyoda Corporation to
collaborate on the commercialisation of the Hazer technology in Japan and develop low emission hydrogen production
facilities. Japan is a leading proponent of the hydrogen economy and a key market for clean, low-emission hydrogen such as
that produced by the Hazer Process. Through their work for the Japanese government, cities, prefectures and private industry
clients, Chiyoda is a leader in the hydrogen industry in Japan. Chiyoda’s knowledge, experience and capability make them an
excellent partner for Hazer, with their project development, execution and operation capabilities complementing Hazer’s
technology offering. We look forward to working closely with them in this important market.
Hydrogen Transport Applications Feasibility Study
In January 2020, Hazer was a successful applicant for Feasibility Study funding under the Western Australian state
government’s Renewable Hydrogen Fund. The fund is a key part of the government’s Renewable Hydrogen Strategy which
aims to position WA as a major producer, user and exporter of renewable hydrogen. Hazer’s application is for a Feasibility
Study on the creation of a renewable hydrogen refuelling hub based on the City of Mandurah and Peel region.
The study aims to identify and aggregate customers for hydrogen-based low-emission transport applications and match them
with hydrogen infrastructure and supply solutions, including potential supply from a future expansion of the proposed Hazer
CDP. The WA state government has committed to provide up to $250,000 to complete the study, with an additional $100,000
(total) committed by Hazer and its study partners.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
MANAGING DIRECTOR’S REPORT
Hazer has executed a Financial Assistance Agreement with the WA Department of Jobs, Tourism, Science and Innovation for
the study and formed a Study Group to manage and oversee the Feasibility Study. The Study Group, who will co-fund the
study with Hazer, comprises Hyzon Motors Australia, a manufacturer of heavy duty fuel cell electric vehicles - in particular
buses and trucks – and Macquarie Group, a leader in managing, developing and financing infrastructure and renewable energy
projects globally.
Mineral Resources Limited Collaboration
In December 2017, Hazer and Mineral Resources Limited (ASX: MIN) executed a binding Co-Operation Agreement to work
together for the purposes of developing and commercialising the Hazer Process. Under the terms of the agreement, Mineral
Resources is providing all capital required for a staged development project for graphite production. Hazer has provided
Mineral Resources with access to the existing Hazer IP portfolio, technical assistance and support.
Commissioning of the Stage 1 Mineral Resources Paddle Tube Reactor (PTR) Pilot Plant was completed during the prior year.
Initial production runs successfully produced high-quality graphite with a purity of >95% (Total Graphitic Carbon).
During the current year, Hazer supported Mineral Resources in its assessment of the PTR Pilot Plant results and assisting as
required to support their decision process to continue to Stage 2 of the strategic partnership. Under Stage 2, Mineral
Resources will design, construct and own an initial small-scale graphite plant (based on the Hazer Process) to supply graphite
to initial commercial customers. Mineral Resources continue to assess options to develop the proposed synthetic-graphite
project but has not yet advised Hazer of their proposed decision process to continue to Stage 2 of the strategic partnership.
Under Stage 3 of the Co-Operation Agreement, subject to securing sufficient customer support, the plant is then intended to
expand to a nominal target capacity of 10,000 tpa of graphite. Hazer and Mineral Resources are also required to agree the
full commercial terms of the licensing agreement to use the Hazer Process, including details of the proposed royalty agreement
for graphite produced.
RESEARCH & DEVELOPMENT PROGRAM
During the year, Hazer was awarded matching Innovative Manufacturing CRC (IMCRC) funding of $800,000 over two years
to support its ongoing successful research and development (R&D) collaboration with the University of Sydney’s School of
Chemical and Biomolecular Engineering. The IMCRC is a not-for-profit, independent cooperative research centre that helps
Australian companies increase their global relevance through research-led innovation in manufacturing products, processes
and services.
Under the R&D program, Hazer is progressing its research into advanced carbon materials (ACM) applications. Hazer is
investigating the use of graphite ACM derived from Hazer’s novel manufacturing process, the Hazer Process, focusing on
applications including Li-ion batteries, water purification, and additives for lubrication products. Previous R&D projects have
indicated promising results in these three product sectors and potential use as an additive in advanced building materials and
cement.
INTELLECTUAL PROPERTY
Hazer has implemented a sound strategy to progress existing patent applications and identify additional intellectual property.
The Company now has patents granted in Australia, New Zealand and Singapore and further patent applications have been
accepted in South Africa and Eurasia across two of its core patent families. The countries that are covered by the Eurasian
application are: Turkmenistan, the Republic of Belarus, the Republic of Tajikistan, Russia, the Azerbaijan Republic, the
Republic of Kazakhstan, Kyrgyzstan, and Armenia. In addition, Hazer had a patent granted in the United States during the
year for an application originally filed by the University of Western Australia which was assigned to Hazer prior to its listing on
the ASX. This patent was filed in the United States only and there are no other pending applications in this patent family.
Remaining patent applications remain ongoing, pursuant to the normal procedures and timelines of the relevant patent
organisations.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
MANAGING DIRECTOR’S REPORT
OUTLOOK
This approval to proceed with the Hazer CDP is a significant milestone, and we look forward to moving smoothly into Project
execution. The Hazer CDP is a key step in demonstrating the commercial readiness of our technology to the growing national,
and international, low-emission hydrogen market. We are delighted to continue the development of this novel Australian
technology. We look forward to working with Primero to execute an excellent project.
We are grateful for the support of ARENA and Water Corporation in making this exciting world-first project possible. The Hazer
technology enables a new source of low-emission renewable hydrogen to be developed. It will increase the utilisation of waste
resources, improve civic infrastructure and offer new economic opportunities through the development of graphite-
manufacturing opportunities and hydrogen for transport or clean energy. We acknowledge ARENA and Water Corporation for
supporting the CDP.
Mr Geoff Ward
Managing Director and Chief Executive Officer
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS’ REPORT
The Directors present their report, together with the financial statements, on Hazer Group Limited (referred to hereafter as
‘the Company') for the year ended 30 June 2020.
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:
Tim Goldsmith
Danielle Lee
Andrew Harris
Mike Grey – resigned 11 May 2020
Geoff Ward
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 (the ‘Hazer Process’) which enables the production of hydrogen
gas from the thermo-catalytic decomposition of methane (natural gas) with negligible carbon dioxide emissions and the co-
production of a high-purity graphite product.
Dividends
There were no dividends paid during the year.
Review of operations
The loss for the Company amounted to $3,225,289 (30 June 2019: $4,396,377).
Losses after income tax decreased by 27% on the prior year largely due to the Company’s non-cash expenditure decreasing
by 58% to $717,125 (2019: $1,708,942). Non-cash expenditure includes share based payments associated with expensing
options issued to management and employees and depreciation and amortisation expenses. In particular the Company’s
amortisation expense was nil in the year (2019: $793,238) with Company’s pilot plant fully depreciated in the prior year.
The Company’s total cash operating expenditure including administration, consulting and research and employee expenses
and finance costs decreased by 9% to $3,944,781 (30 June 2019: $4,356,803).
The Company’s cash and cash-equivalent were $17,236,257 at 30 June 2020 (30 June 2019: $6,003,608) and net assets at
30 June 2020 were $18,013,551 (30 June 2019: $5,834,306).
The net operating cash outflow for the year of $2,493,508 was consistent with the prior period (30 June 2019: $2,570,609).
The Company’s operating cash outflows were partly offset by a research and development tax incentive rebate of $1,339,951
(2019: $1,639,241) and a Covid cash boost payment from the Australian Federal Government of $50,000 (2019: Nil). The
Australian Federal Government’s R&D Tax Incentive program provides a cash refund on eligible research and development
activities performed by Australian companies and is an important program that strongly supports Australian innovation.
Investing cash outflows of $971,900 (2019: $42,719) during the year related to capital costs associated with the Hazer
Commercial Demonstration Plant. Investing cash outflows in the prior year related to plant and equipment purchases.
Financing cash inflows increased by 504% to $14,698,597 (2019: $2,431,837). Funds were generated during the year from
a placement to institutional and sophisticated shareholders and Share Purchase Plan in November 2019 and December
2019 respectively at an issue price of $0.385 per share raising total proceeds of $5,957,507 before share issue costs and a
placement to institutional and sophisticated shareholders in June 2020 at an issue price of $0.42 per share raising total
proceeds of $8,400,000 before share issue costs. In addition funds were raised during the year from the exercise of 900,000
unlisted Series D options ($0.40 exercise price) and 2,625,000 unlisted Series B options ($0.40 exercise price) which raised
a total of $1,410,000 before share issue costs. Share issue costs incurred during the year were $1,035,044.
As an early-stage company, the Company’s business model is highly dependent on the achievement of continued technical
development success, future funding, customer engagement and general financial and economic factors.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS’ REPORT
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 31 July 2020, the Company approved final investment decision to proceed with the Hazer Commercial
Demonstration Plant (CDP). The CDP is a 100-ton-per-annum low-emission hydrogen production facility that will be
the first larger-scale, fully integrated deployment of the Hazer Process and will be located at Water Corporation’s
Woodman Point Wastewater Treatment Plant at Munster in Western Australia. The project has a $17 million capex
budget. The CDP is expected to commence pre-commissioning activities in Q2 2021 and achieve practical
completion in mid calendar year 2021. The Project is intended to operate for up to three years or until the end of
2023, depending on the future operational plans of the Woodman Point facility.
In March 2020, Hazer entered into a binding Funding Agreement with the Australian Renewable Energy Agency
(ARENA) for a grant of up to $9.41 million to support the construction and operation of the CDP. On 31 July 2020,
the Company was able to confirm that all conditions precedent to this agreement have been, or are capable of being
met and the Company will be able to draw down the grant upon achievement of the agreed milestones, submission
of required reports, and verification of submissions by ARENA.
•
• On 31 July 2020, the Company executed binding agreements with Mitchell Asset Management (MAM) in its capacity
as trustee for the Mitchell Asset Management Go-Innovation Finance Fund (ABN 88 447 520 706) for a $6 million
senior secured loan facility to support the construction of the CDP. The key purpose of the loan is to fund the R&D
activities associated with the construction of the CDP, however, the loan may also be utilised to improve the short
term liquidity of the Company and cover the lending costs. The loan, which will be called down in 3 tranches of $2
million each, has a term of up to 5 years with repayments to be made from future R&D Tax Incentive payments
received by Hazer. MAM will hold security over all future R&D Tax Incentive rebates received by the Hazer, as well
as a registered security interest over the present and future assets of Hazer, under a general security deed to be
granted by Hazer in favour of MAM. The drawdown of the first tranche is expected to be made in Q3 calendar year
2020.
• The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has had no impact on the Company up
to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting date.
The situation is rapidly developing and is dependent on measures imposed by the Australian Government and other
countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic
stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 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 FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS’ REPORT
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Length of service:
Other current directorships:
Tim Goldsmith
Non-Executive Chairman (Independent Director)
Bachelor of Commerce from the Polytechnic of North London (now North London
University). Member of the Institute of Chartered Accountants Australia and New
Zealand.
firm
Tim was previously a partner at global professional
PricewaterhouseCoopers (PwC) for over 20 years. Tim held multiple roles during his
PwC career and is best known for leading PwC’s global mining team, with more than
2,000 partners and staff in more than 100 mining countries. During his tenure as Global
Mining Leader, Tim was also responsible for PwC’s thought leadership on the future of
the mining industry and was a well-known presenter at mining conferences around the
globe. Tim was an early participator in the China growth story and initiated a China
focus in 2002 that lead to PwC’s Australia China desk, which is known throughout
China today. As National China Desk Leader, Tim worked extremely closely with many
state-owned and private Chinese investors and companies to facilitate Chinese foreign
investment in Australian mining and other assets.
Director since 24 July 2017
Chairman of Angel Seafood Holdings Limited (ASX: AS1) and Non-Executive Director
of Costa Group Holdings Ltd (ASX: CGC).
services
Former directorships (last 3 years): Chairman of Kopore Metals Limited (ASX: KMT)
Special responsibilities:
Member of the Audit and Risk Committee and Member of Remuneration and
Nomination Committee
1,048,844
2,750,000 (Unlisted options)
None
Danielle Lee
Non-Executive Director (Independent Director)
Bachelor of Economics from the University of Western Australia, Bachelor of Laws from
the University of Western Australia (first class honours)
Danielle is an experienced corporate lawyer more than 23 years’ experience shared
between private law firms and the Australian Securities Exchange. She has a broad
range of skills and legal experience in the areas of corporate advisory, governance and
equity capital markets. She has advised a range of Australian public and private
companies in a range of industries on corporate transactions including capital raisings,
ASX listings, business and share acquisitions, shareholder agreements and joint
venture arrangements.
Director since 16 September 2015
Non-Executive Director of Ocean Grown Abalone Ltd (ASX: OGA)
Chair of Audit and Risk Committee and Member of Remuneration and Nomination
Committee
627,922
150,000 (Unlisted options)
None
Length of service:
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
Interests in shares:
Interests in options:
Contractual rights to shares:
Name:
Title:
Qualifications:
Experience and expertise:
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS’ REPORT
Experience and expertise:
Name:
Title:
Qualifications:
Andrew Harris
Non-Executive Director (Independent 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.
Dr Harris was also previously the Chief Technology O
cer of Zenogen Pty Ltd, a
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
Special responsibilities:
ffi
Chair of Remuneration and Nomination Committee and Member of the Audit and Risk
Committee
127,922
None
None
Interests in shares:
Interests in options:
Contractual rights to shares:
Name:
Title:
Qualifications:
Experience and expertise:
Geoff Ward
Managing Director and Chief Executive Officer
Master of Business Administration and Bachelor of Engineering
Geoff has over 20 years’ experience in the oil and gas, resources and renewable
energy sectors, Geoff’s experience covers strategy, commercial management, financial
management, mergers and acquisitions, capital project development, and operations.
In addition to his executive experience, Geoff has served as a Director of a leading
corporate advisory firm, Azure Capital. Geoff’s advisory experience covers mergers
and acquisitions, joint ventures, strategic reviews and turnarounds, debt and equity
capital raisings. Geoff has advised Boards and led transactions in engineering services,
clean technology and resources sectors.
Geoff holds a Master of Business Administration from University of Western Australia,
receiving a Director’s Letter of Commendation, and Bachelor of Engineering (Chemical)
(Honours) from the University of Melbourne.
Managing Director since 30 April 2019, and Chief Executive Officer since 8 October
2018
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
Managing Director
677,922
6,000,000 (Unlisted options)
None
Length of service:
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS’ REPORT
'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 nine 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. On returning to Perth in 2012, Emma was a Director
within Deloitte’s financial advisory services division. Emma is also currently Company Secretary of EMvision Medical Devices
Limited (ASX: EMV) and a number of unlisted companies.
Emma Waldon completed a Bachelor of Commerce at UWA, is a member of the Institute of Chartered Accountants of
Australia and New Zealand 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
2020, and the number of meetings attended by each Director were:
Tim Goldsmith
Danielle Lee
Andrew Harris
Geoff Ward
Mike Grey
Full board
Audit & Risk
Committee
Remuneration &
Nomination Committee
Attended
Held
Attended
Held
Attended
Held
11
11
11
11
5
11
11
11
11
9
3
3
3
-
-
3
3
3
-
-
1
1
1
-
-
1
1
1
-
-
Held: represents the number of meetings held during the time the Director held office.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
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.
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
● transparency
● capital management
The Remuneration and Nomination Committee is responsible for determining and reviewing remuneration arrangements for
its Directors and executives. 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 Remuneration and Nomination Committee. The Remuneration
and Nomination 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 FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS’ REPORT
ASX listing rules require the aggregate Non-Executive Director’s 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:
Tim Goldsmith $60,000 plus statutory superannuation per annum
Danielle Lee $40,000 plus statutory superannuation per annum
Andrew Harris $40,000 plus statutory superannuation per annum
Non-Executive Directors may also receive performance-related compensation via options following receipt of shareholder
approval. The issue of share-based payments as part of Non-Executive Director remuneration ensures that Director
remuneration is competitive with market standards and provides 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, is 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.
Use of remuneration consultants
During the financial year ended 30 June 2020, the Company did not engage the services of an independent remuneration
consultant to review its remuneration for Directors, key management personnel and other senior executives.
Voting and comments made at the company's Annual General Meeting ('AGM')
The Company received 94.11% “for” votes on its Remuneration Report for the year ended 30 June 2019.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS’ REPORT
Details of remuneration
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:
● Tim Goldsmith – Non-Executive Chairman
● Danielle Lee - Non- Executive Director
● Andrew Harris – Non- Executive Director
● Mike Grey – Non-Executive Director – resigned 11 May 2020
● Geoff Ward – Executive Director
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
2020
Cash salary Termination
benefits
$
fees
$
Bonus
payments
$
Super- Long service
leave
$
annuation
$
Equity-
settled
$
Total
$
Non-Executive Directors:
Tim GoldsmithP
Danielle Lee
PAndrew Harris
imMike Grey
60,000
40,000
40,000
-
Executive Directors:
Geoff Ward
300,000
440,000
-
-
-
-
-
-
-
-
-
-
5,700
3,800
3,800
-
-
-
-
-
-
-
-
-
65,700
43,800
43,800
-
59,361
34,139
- 256,8391
650,339
59,361
47,439
-
256,839
803,639
1
Relates to options issued in a prior period vesting over multiple periods
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
2019
Cash salary Termination
benefits
$
fees
$
Bonus
payments
$
Super- Long service
leave
$
annuation
$
Equity-
settled
$
Total
$
Non-Executive Directors:
Tim GoldsmithP
Danielle Lee
PAndrew Harris
Mike Grey
60,000
40,000
40,000
-
Executive Directors:
Geoff Ward1
219,565
359,565
-
-
-
-
-
-
-
-
-
-
-
-
5,700
3,800
3,800
-
20,859
34,159
-
-
-
-
-
-
140,647
-
-
-
206,347
43,800
43,800
-
491,786
732,210
632,433
1,026,157
1
Represents remuneration from 8 October 2018 to 30 June 2019
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
P
P
S
P
P
P
P
P
P
DIRECTORS’ REPORT
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Tim Goldsmith
Danielle Lee
Andrew Harris
Mike Grey
Executive Directors:
Geoff Ward
Fixed remuneration
2019
2020
At risk - STI
At risk - LTI
2020
2019
2020
2019
100%
100%
100%
-
32%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
68%
-
-
-
51%
33%
10% -
39%
67%
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 Ward
Executive Director and Chief Executive Officer
8 October 2018
Open
Base salary of $300,000 plus statutory superannuation, to be reviewed annually by the
Nomination and Remuneration Committee. For period ending 30 December 2019 – a
cash bonus of up to $100,000 if KPIs set by the Board are met. Achievement of set
KPIs is at the discretion of the Nomination and Remuneration Committee. Three-month
termination notice by either party. Twelve-month non-solicitation clause after
termination.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS’ REPORT
Share-based compensation
Options
There were no options over ordinary shares issued during this financial year to Directors and other key management
personnel.
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 2020 are set out below:
Name
Tim Goldsmith
Danielle Lee
Andrew Harris
Mike Grey
Geoff Ward
Total
options
granted
Number of Number of Number of Number of
options
vested
during the during the during the during the
year
2019
options
granted
options
vested
year
2019
year
2020
year
2020
-
-
-
-
-
-
-
-
-
-
6,000,000
6,000,000
-
-
-
-
2,000,000
2,000,000
2,750,000
-
-
-
2,000,000
4,750,000
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 2020 are set out below:
Name
Tim Goldsmith
Danielle Lee
Andrew Harris
Mike Grey
Geoff Ward
Value of
options
granted
Value of Remuneration
Value of
options consisting of
options
options
lapsed
exercised
for the
during the during the during the
year
year
%
$
year
$
year
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
39%
Additional information
The earnings of the company for the five years to 30 June 2020 are summarised below:
2020
$
2019
$
2018
$
2017
$
2016
$
Revenues from ordinary activities
Loss after income tax
Net Assets
1,436,617
3,225,289
18,013,551
1,669,368
798,877
4,396,377 11,009,331
6,884,346
5,834,306
337,785
3,877,507
8,880,690
83,552
1,844,358
4,420,770
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end ($) P
P
Total dividends declared (cents per share)
Basic loss per share (cents per share)
0.37
0.00
2.99
0.26
0.00
4.71
0.25
0.00
13.37
0.49
0.00
5.74
0.45
0.00
3.57
2020
2019
2018
2017
2016
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
P
P
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:
Ordinary shares
Tim GoldsmithP
Danielle Lee
Andrew Harris
Mike Grey
Geoff Ward
Balance at
the start of
the year
Received
as part of
remuneration
Disposals/
Other
Balance at
the end of
the year
Additions
970,922
550,000
50,000
-
600,000
2,170,922
-
-
-
-
-
-
77,9221
77,9221
77,9221
-
-
-
-
-
77,9221 -
311,688 -
1,048,844
627,922
127,922
-2
677,922
2,482,610
1
2
Participation in Share Purchase Plan
Shares held at resignation date 11 May 2020
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:
Balance at
the start of
the year
Expired
Forfeited/
exercised
Additions
Balance at
the end of
the year
Granted
-
- - (1,000,000)1 2,750,000
(400,000)2
150,000
-
(575,000)1
-
-
-3
-
-
- 6,000,000
-
(1,975,000) 8,900,000
-
-
-
-
Options over ordinary shares
Tim GoldsmithP
Danielle LeeP
Andrew Harris
Mike Grey
Geoff Ward
3,750,000
550,000
575,000
-
6,000,000
10,875,000
1
P
1
2
3
Series G Options expired during the year
Series D Options expired during the year
Options held at resignation date 11 May 2020
Other transactions with key management personnel and their related parties
There were no other transactions with related parties during the year.
This concludes the remuneration report, which has been audited.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
P
P
P
P
P
P
2
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
Exercise
price
Number
under option
Series J
Series K
Series J
Series K
Series B
Series M
Series L
Series M
Series N
Series M
Series N
06/04/2017
06/04/2017
04/12/2017
04/12/2017
29/12/2017
29/08/2018
14/11/2018
14/11/2018
14/11/2018
18/10/2019
18/10/2019
31/12/2020
31/12/2021
31/12/2020
31/12/2021
31/12/2020
30/06/2023
30/06/2022
30/06/2023
30/06/2024
30/06/2023
30/06/2024
$0.95
$1.20
$0.95
$1.20
$0.40
$0.70
$0.50
$0.70
$0.90
$0.70
$0.90
750,000
1,000,000
3,000,000
2,500,000
8,875,000
500,000
2,000,000
2,000,000
2,000,000
1,550,000
1,450,000
25,625,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the
company or of any other body corporate.
Shares issued on the exercise of options
The following ordinary shares of Hazer Group Limited were issued during the year ended 30 June 2020 and up to the date of
this report on the exercise of options granted:
Option series
Grant date
Expiry date
Exercise
price
Number of
shares issued
Series D
Series B
16/09/2015
29/12/2017
31/12/2019
31/12/2020
$0.40 900,000
$0.40 2,625,000
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.
Non-audit services
There were no amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor.
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.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS’ REPORT
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
______________________________
Tim Goldsmith
Chairman
24 August 2020
Melbourne
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Hazer Group Limited for the year ended 30 June 2020, 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: 24 August 2020
TUTU PHONG
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
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
The financial statements cover Hazer Group Limited as a single entity. 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
Level 9, 99 St Georges Terrace
Perth WA 6000
Principal place of business
Level 9, 99 St Georges Terrace
Perth WA 6000
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 24 August 2020. The
Directors have the power to amend and reissue the financial statements.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
Revenue
Interest received
R&D rebate
Other income
Expenses
Administration expenses
Consulting and research expenses
Share-based payments
Finance costs
Employee benefits expense
Depreciation expense
Amortisation expense
Loss before income tax expense
Income tax expense
Loss after income tax expense for the year
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
Note
2020
$
2019
$
46,666
1,339,951
50,000
30,127
1,639,241
-
24
(833,580) (1,079,647)
(876,789) (1,202,200)
(914,950)
(672,072)
(2,364)
(8,914)
(2,225,498) (2,072,592)
(754)
(793,238)
(3,225,289) (4,396,377)
(45,053)
-
13
-
(3,225,289) (4,396,377)
-
-
-
(3,225,289) (4,396,377)
Cents Cents
25
25
2.99
2.99
4.71
4.71
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
STATEMENT OF FINANCIAL POSITION
Assets
Current assets
Cash and cash equivalents
Other current assets
Total current assets
Non-current assets
Commercial demonstration plant
Plant and equipment
Right-of-use asset
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
2020
$
2019
$
5
6
7
8
9
17,236,257
145,290
17,381,547
6,003,068
65,761
6,068,829
1,051,871
27,765
41,136
1,120,772
-
41,965
-
41,965
18,502,319
6,110,794
10
11
12
14
311,874
131,264
33,345
476,483
187,925
88,563
-
276,488
12,285
12,285
-
488,768
276,488
18,013,551
5,834,306
15
16
17
34,128,809 18,541,771
9,224,488
(23,301,222) (21,931,953)
7,185,964
18,013,551
5,834,306
The above statement of financial position should be read in conjunction with the accompanying notes
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
STATEMENT OF CHANGES IN EQUITY
2019
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
equity
$
Balance at 1 July 2018
16,030,724
8,752,066 (17,898,444)
6,884,346
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:
Shares issued pursuant to the exercise of
options
Share-based payments
Transfer expired options to accumulated losses
-
-
-
-
(4,396,377)
(4,396,377)
-
-
-
-
(4,396,377)
(4,396,377)
2,511,047
(79,660)
-
2,431,387
-
-
914,950
(362,868)
-
362,868
914,950
-
Balance at 30 June 2019
18,541,771
9,224,488 (21,931,953)
5,834,306
2020
Issued
capital
$
Reserves
$
Accumulated
Losses
$
Total
equity
$
Balance at 1 July 2019
18,541,771
9,224,488 (21,931,953)
5,834,306
Loss after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive loss for the year
-
-
-
-
(3,225,289)
(3,225,289)
-
-
-
-
(3,225,289)
(3,225,289)
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs 15,587,038
-
Shares issued pursuant to the exercise of
options
Share-based payments
Transfer expired options to accumulated losses
-
-
-
(854,576)
672,072
(1,856,020)
- 15,587,038
(854,576)
-
1,856,020
672,072
-
Balance at 30 June 2020
34,128,809
7,185,964 (23,301,222) 18,013,551
The above statement of changes in equity should be read in conjunction with the accompanying notes
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
STATEMENT OF CASH FLOWS
Cash flows from operating activities
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest and other finance costs paid
Research and development tax rebate received
Other government rebates
Note
2020
$
2019
$
(3,928,716)
(4,237,073)
(3,928,716)
46,666
(1,409)
1,339,951
50,000
(4,237,073)
30,127
(2,364)
1,639,241
-
Net cash used in operating activities
23
(2,493,508)
(2,570,609)
Cash flows from investing activities
Payments for commercial demonstration plant
Payments for property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares, net of share issue costs
Proceeds from exercise of share options, net of transaction costs
Repayment of lease liability
Net cash from financing activities
(971,900)
-
-
(42,719)
(971,900)
(42,719)
13,322,462
1,410,000
(33,865)
-
2,431,387
-
14,698,597
2,431,387
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
11,233,189
6,003,068
(181,941)
6,185,009
Cash and cash equivalents at the end of the financial year
5
17,236,257
6,003,068
The above statement of cash flows should be read in conjunction with the accompanying notes
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
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 or amended Accounting Standards and Interpretations adopted
The Company has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the Company.
AASB 16 Leases
The Company has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees eliminates
the classifications of operating leases and finance leases. Except for short-term leases and leases of low-value assets, right-
of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-line operating
lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in operating costs) and
an interest expense on the recognised lease liabilities (included in finance costs). In the earlier periods of the lease, the
expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117.
However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results improve as the operating expense
is now replaced by interest expense and depreciation in profit or loss. For classification within the statement of cash flows,
the interest portion is disclosed in operating activities and the principal portion of the lease payments are separately disclosed
in financing activities. For lessor accounting, the standard does not substantially change how a lessor accounts for leases.
Impact of adoption
AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not been restated.
The impact of adoption on opening retained profits as at 1 July 2019 was as follows:
Operating lease commitments as at 1 July 2019 (AASB 117)
Operating lease commitments discounted based on the weighted average incremental borrowing rate of
13% (AASB 16)
Right-of-use assets (AASB 16)
Lease liabilities - current (AASB 16)
Lease liabilities - non-current (AASB 16)
Reduction in opening accumulated losses as at 1 July 2019
1 July 2019
83,607
(11,619)
71,988
(27,660)
(44,328)
-
When adopting AASB 16 from 1 July 2019, the company has applied the following practical expedients:
• applying a single discount rate to the portfolio of leases with reasonably similar characteristics;
• accounting for leases with a remaining lease term of 12 months as at 1 July 2019 as short-term leases;
• excluding any initial direct costs from the measurement of right-of-use assets;
• using hindsight in determining the lease term when the contract contains options to extend or terminate the lease;
and
• not apply AASB 16 to contracts that were not previously identified as containing a lease.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001, as appropriate for for-
profit-oriented entities. These financial statements also comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss, investment
properties, certain classes of property, plant and equipment and derivative financial instruments.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Significant accounting policies (Cont’d)
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.
Revenue recognition
The company recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Company is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the Company: identifies the
contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes
into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate
performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered;
and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the
customer of the goods or services promised.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is
generally at the time of delivery.
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 revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
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.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Significant accounting policies (Cont’d)
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.
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 receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
The Company has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
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.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Significant accounting policies (Cont’d)
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever the shorter. Where the company expects to obtain ownership of the leased asset at the end of
the lease term, the depreciation is over the estimated useful life. Right-of-use assets are subject to impairment or adjusted
for any remeasurement of lease liabilities.
The company has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases of 12
months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, company’s incremental borrowing rate. Lease payments comprise of fixed payments
less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be
paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably
certain to occur, and any anticipated termination penalties. The variable lease payments that do depend on an index or a
rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of-use asset, or to profit or loss if the carrying amount of the right-of-use asset
is fully written down.
Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment over their
expected useful lives as follows:
Plant and equipment
3-7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Company.
Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus
reserve relating to the item disposed of is transferred directly to retained profits.
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 wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Significant accounting policies (Cont’d)
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted using market yields at
the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated
future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
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.
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 is 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.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Significant accounting policies (Cont’d)
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.
Research and development
Research costs are expensed in the period in which they are incurred.
Capitalised Development Cost for Commercial Demonstration Plant
Costs directly attributable to create, produce and prepare the commercial demonstration plant to be capable of operating in
the manner intended by management are recognised as an asset when the following criteria are met:
It is technically feasible to complete the commercial demonstration plant so that it will be available for use;
•
• Management intends to complete the commercial demonstration plant and use it;
• There is an ability to use the commercial demonstration plant;
•
It can be demonstrated how the commercial demonstration plant will generate probable future economic benefits;
• Adequate technical, financial and other resources to complete the development and to use the commercial
demonstration plant; and
• The expenditure attributable to the commercial demonstration plant during its development can be reliably
measured.
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated
amortisation and accumulated impairment losses. Amortisation of the asset will begin when the development is complete
and the asset is available for use. It will be amortised over the period of expected future benefit. Amortisation will be recorded
in profit and loss.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-
financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Significant accounting policies (Cont’d)
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the company for the annual reporting period ended 30 June 2020. The Company's assessment
of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the company, are set out
below
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and early
adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new guidance
on measurement that affects several Accounting Standards. Where the Company has relied on the existing framework in
determining its accounting policies for transactions, events or conditions that are not otherwise dealt with under the Australian
Accounting Standards, the Company may need to review such policies under the revised framework. At this time, the
application of the Conceptual Framework is not expected to have a material impact on the Company’s financial statements.
Note 2: Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Share-based payment transactions
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. 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.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Company assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at
each reporting date by evaluating conditions specific to the Company and to the particular asset that may lead to impairment.
If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of
disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have,
on the Company based on known information. This consideration extends to the nature of the products and services offered,
customers, supply chain, staffing and geographic regions in which the Company operates. Other than as addressed in
specific notes, there does not currently appear to be either any significant impact upon the financial statements or any
significant uncertainties with respect to events or conditions which may impact the Company unfavourably as at the reporting
date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
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. 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. Financial risk management objectives and policies
The Company’s principal financial instruments comprise cash and short term deposits.
The Company manages its exposure to key financial risks, including interest rate and liquidity risk in accordance with its
financial risk management policy. The objective of the policy is to support the delivery of its financial targets whilst protecting
future financial security.
The Company uses different methods to measure and manage different types of risks to which it is exposed. These include
monitoring levels of exposure to interest rate risk and assessments of market forecasts for interest rates. Liquidity risk is
monitored through the development of future rolling cash flow forecasts.
Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and agrees
policies for managing each of the risks identified below.
Interest rate risk
At reporting date, the company had $17,236,257 (2019: $6,003,068) in cash and cash equivalents exposed to interest rate
risk.
The company’s exposure to market interest rates relates primarily to cash and short-term deposits.
At reporting date, if interest rates had moved, as illustrated in the table below, with all other variables held constant, net loss
and equity would have been affected as follows:
Net loss
Higher / (lower)
Equity
Higher / (lower)
2020
$
2019
$
2020
$
2019
$
+1% (100 basis points)
172,363
60,030
172,363
60,030
-1% (100 basis points)
(172,363)
(60,030)
(172,363)
(60,030)
The movements are due to higher / lower interest revenue from cash balances.
Liquidity Risk
Liquidity risk is managed through the company’s objective to maintain adequate funding to meet its needs, currently
represented by cash and short term deposits sufficient to meet the current cash requirements.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 4. Financial risk management objectives and policies (Cont’d)
Capital management
The primary objective of the company’s capital management is to ensure that it maintains a strong credit rating and healthy
capital ratios in order to support its business and maximise shareholder value.
The company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To
maintain or adjust the capital structure, the entity may return capital to shareholders or issue new shares. No changes
were made in the objectives, policies or processes during the years ended 30 June 2020 and 30 June 2019.
The company monitors capital with reference to the net debt position. The company’s current policy is to keep the net
debt position negative, such that cash and cash equivalents exceeds debt.
Note 5. Cash and cash equivalents
Cash at bank
Cash on deposit
Note 6. Other current assets
Prepayments
GST refundable
Other receivables
Deposit
Note 7. Commercial Demonstration Plant
Commercial demonstration plant – cost
Commercial demonstration plant – accumulated amortisation
2020
$
2019
$
17,151,350
84,907
2,898,161
3,104,907
17,236,257
6,003,068
2020
$
2019
$
48,258
93,428
-
3,604
8,102
53,855
200
3,604
145,290
65,761
2020
$
2019
$
1,051,871
-
1,051,871
-
-
-
The commercial demonstration plant design is a key stage in the development and scale up of the Hazer process.
Development costs directly attributable to create, produce and prepare the commercial demonstration plant for the purpose
intended by management is recognised as a non-current asset. The commercial demonstration plant has not been amortised
as it is not yet ready for use.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 8. Plant and equipment
Site equipment
Note 9. Right-of-use asset
Office space – right-of-use
Office space – accumulated deprecation
Note 10. Trade and other payables
Trade payables
Other payables
Note 11. Provisions
Employee benefits
Note 12. Lease liabilities
Current lease liability
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
2020
$
2019
$
27,765
41,965
27,765
41,965
2020
$
2019
$
71,988
(30,852)
41,136
-
-
-
2020
$
2019
$
135,071
176,803
127,603
60,322
311,874
187,925
2020
$
2019
$
131,264
88,563
131,264
88,563
2020
$
2019
$
33,345
33,345
-
-
NOTES TO THE FINANCIAL STATEMENTS
Note 13. Income Tax
The prima facie tax receivable on loss before income tax is reconciled to the income tax expense as follows:
Prima facie benefit on operating loss at 27.5% (2019: 27.5%)
Tax losses not brought to account
Income tax benefit attributable to operating loss
2020
$
2019
$
886,954
(886,954)
1,209,004
(1,209,004)
-
-
A potential deferred tax asset, attributable to tax losses carried forward, amounts to approximately $6,600,339 (2019:
$5,713,385) 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 14. Lease liabilities
Non-current lease liability
Note 15. Equity - issued capital
2020
$
2019
$
12,285
12,285
-
-
Ordinary shares
136,259,802 97,260,856 34,128,809 18,541,771
2020
Shares
2019
Shares
2020
$
2019
$
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Movement in ordinary shares
Opening balance 1 July 2018
Issue of shares on exercise of Series C options
Issue of shares on exercise of Series C options
Issue of shares on the exercise of listed options
Issue of shares on exercise of Series C options
Issue of shares on the exercise of listed options
Issue of shares on the exercise of listed options
Issue of shares on exercise of Series C options
Issue of shares on exercise of Series C options
Issue of shares on exercise of Series C options
Transfer Series C options from options reserve
Transfer from listed options
Transfer from listed options
Issue of shares on exercise of listed options
Transfer from listed options
Share issue transaction costs, net of tax
Closing balance 30 June 2019
Date No of shares
Issue price
$
26 September 2018
23 October 2018
23 October 2018
16 November 2018
16 November 2018
19 November 2018
3 December 2018
17 December 2018
31 December 2018
31 December 2018
31 December 2018
31 December 2018
7 January 2019
7 January 2019
30 June 2019
88,302,245
550,000
400,000
138,333
1,141,428
150,000
500,000
520,000
1,710,000
400,000
-
-
-
3,448,850
-
-
97,260,856
15,884,073
137,500
$0.25 1
100,000
$0.25
41,500
$0.30
285,357
$0.25
45,000
$0.30
150,000
$0.30
130,000
$0.25
427,500
$0.25
100,000
$0.25
79,660
-
7,883
$0.01
104,279
$0.005
1,034,405
$0.30
34,489
$0.01
(19,875)
-
18,541,771
Opening balance 1 July 2019
Issue of shares
Issue of shares
Issue of shares on exercise of Series D options
Transfer Series D options from options reserve
Issue of shares
Issue of shares on exercise of Series B options
Transfer Series B options from options reserve
Share issue transaction costs, net of tax
8 November 2019
5 December 2010
31 December 2019
31 December 2019
97,260,856
6,493,505
8,980,441
900,000
-
18 June 2020 20,000,000
2,625,000
18 June 2020
-
18 June 2020
-
30 June 2020
18,541,771
2,500,000
$0.385
3,457,507
$0.385
360,000
$0.40
16,269
-
8,400,000
$0.42
1,050,000
$0.40
-
838,306
- (1,035,044)
Closing balance 30 June 2020
136,259,802
34,128,809
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.
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.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 16. Equity - reserves
Option reserve
2019
$
2018
$
7,185,964
9,224,488
7,185,964
9,224,488
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:
No of Options
43,416,667
-
6,500,000
(4,721,428)
(528,572)
(2,250,000)
(1,150,000)
41,266,667
Value
$
8,752,066
358,750
556,200
(79,660)
(8,918)
-
(353,950)
9,224,488
41,266,667
-
3,000,000
(3,525,000)
(3,950,000)
(4,166,667)
(7,000,000)
9,224,488
256,839
415,233
(854,575)
(71,403)
-
(1,784,618)
25,625,000
7,185,964
2020
$
2019
$
21,931,953 17,898,444
4,396,377
(362,868)
3,225,289
(1,856,020)
23,301,222 21,931,953
Opening balance 1 July 2018
Options issued during a prior year vesting over multiple periods
Options issued during the current year vesting over multiple periods
Options exercised during the period
Options expired during the period - series C
Options expired during the period - series G
Options expired during the period - series F
Closing balance 30 June 2018
Opening balance 1 July 2019
Options issued during a prior year vesting over multiple periods
Options issued during the current year vesting over multiple periods
Options exercised during the period
Options expired during the period - series D
Options expired during the period - series H
Options expired during the period - series G
Closing balance 30 June 2020
Note 17. Equity – accumulated losses
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the year
Transfer expired options to accumulated losses
Accumulated losses at the end of the financial year
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 18. Key management personnel disclosures
Compensation
The aggregate compensation made to key management personnel of the Company is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Note 19. Remuneration of auditors
2020
$
2019
$
505,000
41,800
-
256,839
359,565
34,159
-
632,433
803,639
1,026,157
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
2020
$
2019
$
41,800
41,000
41,800
41,000
Note 20. Contingent assets and liabilities
The Company does not have any contingent assets or contingent liabilities at 30 June 2020 (2019: Nil).
Note 21. Commitments
Committed at the reporting date but not recognised as liabilities:
Research collaboration agreement:
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
Later than 1 year but not later than 5 years
2020
$
2019
$
317,851
251,950
145,444
-
569,801
145,444
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 22. Related party transactions
Key management personnel
Disclosures relating to key management personnel are set out in note 18 and the remuneration report in the Directors' Report.
Transactions with related parties
There were no other transactions with related parties.
Receivable from and payable to related parties
There were no amounts receivable from related parties at the current or previous reporting period. A bonus of $32,500 was
payable to Geoff Ward (Managing Director and Chief Executive Officer) at 30 June 2020. No amounts were payable to related
parties at 30 June 2019.
Note 23. 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
Depreciation
Finance costs
Change in operating assets and liabilities:
- Other current assets
-
-
trade and other payables
employee benefits
Net cash used in operating activities
2020
$
2019
$
(3,225,289)
(4,396,377)
672,072
45,053
7,506
914,950
793,238
754
(79,529)
43,978
42,701
70,952
22,463
23,411
(2,493,508)
(2,570,609)
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 24. Share based payments
For the year ended 30 June 2020:
Set out below are summaries of the movements of options granted to key management personnel, employees and
contractors of the Company:
2020
Grant date
Expiry date
16/09/2015
01/07/2016
22/08/2016
31/10/2016
15/11/2016
20/03/2017
06/04/2017
06/04/2017
13/06/2017
06/09/2017
04/12/2017
04/12/2017
04/12/2017
29/12/2017
29/08/2018
14/11/2018
14/11/2018
14/11/2018
18/10/2019
18/10/2019
31/12/2019
30/06/2020
30/06/2020
30/06/2020
30/06/2020
30/06/2020
31/12/2020
31/12/2021
30/06/2020
30/06/2020
30/06/2020
31/12/2020
31/12/2021
31/12/2020
30/06/2023
30/06/2022
30/06/2023
30/06/2024
30/06/2023
30/06/2024
Exercise
price
Balance at
the start of
the year
Exercised/
Quoted as
Granted Listed options
Expired/
forfeited/
other
Balance at
the end of
the year
$0.40
$0.75
$0.75
$0.75
$0.75
$0.75
$0.95
$1.20
$0.75
$0.75
$0.75
$0.95
$1.20
$0.40
$0.70
$0.50
$0.70
$0.90
$0.70
$0.90
4,850,000
575,000
100,000
600,000
575,000
350,000
750,000
1,000,000
1,300,000
300,000
3,200,000
3,000,000
2,500,000
11,500,000
500,000
2,000,000
2,000,000
2,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 1,550,000
- 1,450,000
(900,000)
-
-
-
-
-
-
-
-
-
-
-
-
(2,625,000)
-
-
-
-
-
-
(3,950,000)
(575,000)
(100,000)
(600,000)
(575,000)
(350,000)
-
-
(1,300,000)
(300,000)
(3,200,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
750,000
1,000,000
-
-
-
3,000,000
2,500,000
8,875,000
500,000
2,000,000
2,000,000
2,000,000
1,550,000
1,450,000
37,100,000 3,000,000
(3,525,000) (10,950,000)
25,625,000
On 20 March 2017 Mineral Resources Limited (ASX: MIN) were issued 4,166,667 unlisted options as part of a placement for
8,333,333 fully paid ordinary shares. The free attaching options issued to Mineral Resources Limited expired on 31 December
2019.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 24. Share based payments (Cont’d)
For the year ended 30 June 2019:
Set out below are summaries of the movements of options granted to key management personnel, employees and
contractors of the Company:
2019
Grant date
Expiry date
16/09/2015
16/09/2015
01/07/2016
01/07/2016
22/08/2016
31/10/2016
15/11/2016
15/11/2016
20/03/2017
06/04/2017
06/04/2017
13/06/2017
06/09/2017
04/12/2017
04/12/2017
04/12/2017
29/12/2017
29/08/2018
14/11/2018
14/11/2018
14/11/2018
31/12/2018
31/12/2019
30/06/2019
30/06/2020
30/06/2020
30/06/2020
30/06/2019
30/06/2020
30/06/2020
31/12/2020
31/12/2021
30/06/2020
30/06/2020
30/06/2020
31/12/2020
31/12/2021
31/12/2020
30/06/2023
30/06/2022
30/06/2023
30/06/2024
Exercise
price
Balance at
the start of
the year
Exercised/
Quoted as
Granted Listed options
Expired/
forfeited/
other
Balance at
the end of
the year
$0.25
$0.40
$0.55
$0.75
$0.75
$0.75
$0.55
$0.75
$0.75
$0.95
$1.20
$0.75
$0.75
$0.75
$0.95
$1.20
$0.40
$0.70
$0.50
$0.70
$0.90
5,250,000
-
4,850,000
-
575,000
-
575,000
-
100,000
-
600,000
-
575,000
-
575,000
-
350,000
-
750,000
-
1,000,000
-
1,300,000
-
300,000
-
5,450,000P
P
-
3,000,000
-
2,500,000
-
11,500,000
-
500,000
-
- 2,000,000
- 2,000,000
- 2,000,000
(4,721,428)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(528,572)
-
(575,000)
-
-
-
(575,000)
-
-
-
-
-
-
(2,250,000)
-
-
-
-
-
-
-
-
4,850,000
-
575,000
100,000
600,000
-
575,000
350,000
750,000
1,000,000
1,300,000
300,000
3,200,000
3,000,000
2,500,000
11,500,000
500,000
2,000,000
2,000,000
2,000,000
39,250,000 6,500,000
(4,721,428)
(3,928,572)
37,100,000
On 20 March 2017 Mineral Resources Limited (ASX: MIN) were issued 4,166,667 unlisted options as part of a placement for
8,333,333 fully paid ordinary shares. The free attaching options issued to Mineral Resources Limited have not been included
in the table above.
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Note 24. Share based payments (Cont’d)
Set out below are the options exercisable at the end of the financial year:
Option series Grant date
Expiry date
Series D
Series G
Series G
Series H
Series G
Series G
Series G
Series J
Series K
Series G
Series G
Series G
Series J
Series K
Series B
Series M
Series L
Series M
Series N
Series M
Series N
16/09/2015
22/08/2016
31/10/2016
20/03/2017
20/03/2017
01/06/2017
15/11/2016
06/04/2017
06/04/2017
13/06/2017
06/09/2017
04/12/2017
04/12/2017
04/12/2017
29/12/2017
29/08/2018
14/11/2018
14/11/2018
14/11/2018
18/10/2019
18/10/2019
31/12/2019
30/06/2020
30/06/2020
31/12/2019
30/06/2020
30/06/2020
30/06/2020
31/12/2020
31/12/2021
30/06/2020
30/06/2020
30/06/2020
31/12/2020
31/12/2021
31/12/2020
30/06/2023
30/06/2022
30/06/2023
30/06/2024
30/06/2023
30/06/2024
2020
Number
2019
Number
4,850,000
-
100,000
-
600,000
-
4,166,667
-
350,000
-
575,000
-
575,000
-
750,000
750,000
1,000,000
1,000,000
1,300,000
-
300,000
-
3,200,000
-
3,000,000
3,000,000
2,500,000
2,500,000
8,875,000 11,500,000
500,000
2,000,000
2,000,000
2,000,000
-
-
500,000
2,000,000
2,000,000
2,000,0001
1,550,0002
1,450,0002
25,625,000 41,266,667
1 Options have not vested at reporting date
2 2,000,000 options of the total 3,000,000 options issued have note vested at reporting date
The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.62 years (2019:
1.68)
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Grant date
Expiry date
Share price
at grant date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
Fair value
interest rate at grant date
18/10/2019
18/10/2019
30/06/2023
30/06/2024
$0.49
$0.49
$0.70
$0.90
70%
70%
0.00%
0.00%
0.76%
0.83%
0.20
0.20
Expenses arising from share based payment transactions
Total expenses arising from share based payment transactions recognised during the year were as follows:
Options issued to KMP
Options issued to employees/consultants
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
2020
$
2019
$
256,839
415,233
632,433
282,517
672,072
914,950
NOTES TO THE FINANCIAL STATEMENTS
Note 25. Earnings per share
Loss after income tax
2020
$
2019
$
3,225,289
4,396,377
Loss after income tax attributable to the owners of Hazer Group Limited
3,225,289
4,396,377
Weighted average number of ordinary shares used in calculating basic earnings per share
107,723,166 93,265,987
Number
Number
Basic loss per share
Diluted loss per share
Note 26. Events after the reporting period
Cents
Cents
2.99
2.99
4.71
4.71
• On 31 July 2020, the Company approved final investment decision to proceed with the Hazer Commercial
Demonstration Plant (CDP). The CDP is a 100-ton-per-annum low-emission hydrogen production facility that will be
the first larger-scale, fully integrated deployment of the Hazer Process and will be located at Water Corporation’s
Woodman Point Wastewater Treatment Plant at Munster in Western Australia. The project has a $17 million capex
budget. The CDP is expected to commence pre-commissioning activities in Q2 2021 and achieve practical completion
in mid calendar year 2021. The Project is intended to operate for up to three years or until the end of 2023, depending
on the future operational plans of the Woodman Point facility.
In March 2020, Hazer entered into a binding Funding Agreement with the Australian Renewable Energy Agency
(ARENA) for a grant of up to $9.41 million to support the construction and operation of the CDP. On 31 July 2020,
the Company was able to confirm that all conditions precedent to this agreement have been, or are capable of being
met and the Company will be able to draw down the grant upon achievement of the agreed milestones, submission
of required reports, and verification of submissions by ARENA.
•
• On 31 July 2020, the Company executed binding agreements with Mitchell Asset Management (MAM) in its capacity
as trustee for the Mitchell Asset Management Go-Innovation Finance Fund (ABN 88 447 520 706) for a $6 million
senior secured loan facility to support the construction of the CDP. The key purpose of the loan is to fund the R&D
activities associated with the construction of the CDP, however, the loan may also be utilised to improve the short
term liquidity of the Company and cover the lending costs. The loan, which will be called down in 3 tranches of $2
million each, has a term of up to 5 years with repayments to be made from future R&D Tax Incentive payments
received by Hazer. MAM will hold security over all future R&D Tax Incentive rebates received by the Hazer, as well
as a registered security interest over the present and future assets of Hazer, under a general security deed to be
granted by Hazer in favour of MAM. The drawdown of the first tranche is expected to be made in Q3 calendar year
2020.
• The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has had no impact on the Company up
to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting date.
The situation is rapidly developing and is dependent on measures imposed by the Australian Government and other
countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic
stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 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 FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS’ DECLARATION
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
2020 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
______________________________
Tim Goldsmith
Chairman
24 August 2020
Melbourne
HAZER GROUP LIMITED FOR THE YEAR ENDED 30 JUNE 2020
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
HAZER GROUP LIMITED
Opinion
We have audited the financial report of Hazer Group Limited (the Company) which comprises the statement of
financial position as at 30 June 2020, the statement of profit or loss and other comprehensive income, the
statement of changes in equity and the statement of cash flows for the year then ended, notes to the financial
statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Company 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 2020 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Company in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Share based payments
Refer to Note 24 in the financial statements
During the year, the Company issued 3,000,000
options as part of an employee incentive plan.
Management has used an option valuation model to
value these options issued during the year.
We determined this to be a key audit matter due to
the significant judgements involved in assessing the
fair value of the options issued during the year.
Our audit procedures included:
Reviewing the key terms and conditions of the
options issued;
Obtaining
the valuation models prepared by
management and assessing whether the models
were appropriate for valuing the options granted
during the year;
Challenging
the
key
assumptions used by management to value the
options; and
reasonableness
of
Reviewing the relevant disclosures in the financial
statements to ensure compliance with Accounting
Standards.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Company's annual report for the year ended 30 June 2020, but does not include the financial report and
the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Hazer Group Limited, for the year ended 30 June 2020, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 24 August 2020
TUTU PHONG
Partner
SHAREHOLDER INFORMATION
UASX Additional Information
The Company’s ordinary shares are quoted as ‘HZR’ on ASX.
The shareholder information set out below was applicable as at 21 August 2020.
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
Number
of ordinary
Number
of holders
shares of ordinary
shares
79,945,147
45,702,632
5,999,472
4,502,961
109,590
188
1,394
751
1,712
239
136,259,802
4,284
335,953
432
Equity security holders
Twenty largest quoted equity security holders
The names of the 20 largest security holders of each class of quoted equity securities are listed below:
MINERAL RESOURCES LIMITED
POINT AT INFINITY PTY LTD
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