Hazer Group Limited
Appendix 4E
Preliminary final report
1. Group details
Name of entity:
ABN:
Reporting period:
Previous period:
Hazer Group Limited
40 144 044 600
For the year ended 30 June 2023
For the year ended 30 June 2022
2. Results for announcement to the market
Revenues from ordinary activities
Loss from ordinary activities after tax
Loss for the year
Dividends
No dividend has been declared.
$
up
108% to
2,705,670
down
26% to
(12,205,599)
down
26% to
(12,205,599)
Comments
Revenues from ordinary activities increased by 108% to $2,705,670 due to a higher R&D tax income accrual than prior year. The driver
for the higher accrual is increased spend on R&D salaries and wages and operating consultants during FY23.
Loss from ordinary activities after tax decreased to $12,205,599 in 2023 (2022: $16,414,826): primarily due to the decreased spending on
the Commercial Demonstration Plant (CDP) construction during the year, with $146,755 subsequently impaired and expensed, compared
to the prior year's impairment in 2022 of $9,604,916. This was partially offset by higher than prior year spending on consulting and research
expenses and employee benefits.
Since commencing the CDP the Group spent $30,136,116 to the end of 30 June 2023 (2023: $3,971,686; 2022: $16,673,069 2021:
$8,439,490 and 2020: $1,051,871) and offset: $7,924,084 in R&D rebates (FY23 $254,970; FY22 $7,669,114), realised in the year on
commencement of the CDP's cold operations; and $6,959,000 from a grant received from the Australian Renewable Energy Agency
(ARENA) (2023: $2,969,000, 2022: Nil, 2021: $3,990,000). The net costs incurred on the CDP to the end of 30 June 2023 of $15,253,032
($30,136,116 of total costs, less $7,924,084 for R&D offset, less $6,959,000 associated with grant funds received from ARENA) have been
expensed to the profit and loss in line with the Australian accounting standard AASB 136 Impairment of Assets.
Other non-cash expenditure for 2023 included share based payments associated with options issued to management and employees of
$1,046,848 (2022: $143,427) and depreciation and amortisation expenses of $111,258 (2022: $77,474).
The Group’s total operating expenses increased by 73% to $13,606,408 (2022: $7,886,814), and comprise; increases in consulting and
research costs $5,670,814 (2022: $2,494,151) due to CDP Operations and the progression of the Canadian project; increased employee
benefits expenditure of $4,754,006 (2022: $3,274,499) associated with additional technical staff engaged in research and development
activities; increased administration expenses of $2,810,653 (2022: $1,488,300) mainly due to increased corporate activities.
The net operating cash outflow for the year was $1,276,514 (2022: $5,237,375). Primary operating cash outflows for 2023 were for
payments to suppliers and employees of $11,064,599 (2022: $6,627,156). Cash inflows in 2023 came from the receipt of the research and
development tax incentive rebate of $9,448,880 (2022: $1,326,917). 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 $4,497,509 (2022: $16,061,049) during the year related to capital costs associated with the Hazer CDP.
Financing cash inflows decreased by 120% to a net outflow of $2,975,579 (2022: net inflow $14,686,258). Funds were generated during
the previous financial year from: the issue of 15,217,392 shares and the exercise of 1,000,000 unlisted Series L options , 85,000 unlisted
Series M options and 10,000 unlisted Series K options. There were no share issues or option conversions in the current year. In 2023
there were proceeds from borrowings of $2,000,000 (2022: $2,000,000) and full repayment of the MAM Loan facility totaling an outflow of
$4,852,193 (2022: payment of $1,326,917).
Hazer Group Limited
Appendix 4E
Preliminary final report
The Group’s cash and cash-equivalent were $9,278,322 at 30 June 2023 (2022: $18,027,924) and net assets at 30 June 2023 were
$3,939,477 (2022: $12,451,967).
3. Control gained over entities
Name of entities (or group of entities)
Hazer Group Canada Limited
Date control gained
12th June 2023
4. Loss of control over entities
Not applicable.
5. Details of associates and joint venture entities
Not applicable.
6. Audit qualification or review
The financial statements have been audited and an unmodified opinion has been issued.
7. Attachments
The Annual Report of Hazer Group Limited for the year ended 30 June 2023 is attached.
8. Signed
Signed ___________________________
Date: 23 August 2023
Tim Goldsmith
Chairman
Hazer Group Limited
ABN 40 144 044 600
Annual Report – 30 June 2023
Hazer Group Limited
Corporate directory
For the year ended 30 June 2023
Directors
Tim Goldsmith (Non-Executive Chairman)
Danielle Lee (Non-Executive Director)
Andrew Hinkly (Non-Executive Director)
Jack Hamilton (Non-Executive Director)
Geoff Ward (Executive Director) (retired on 1 July 2022)
Glenn Corrie (Executive Director) (CEO from 10 October 2022 and appointed Managing
Director on 3 April 2023)
Company Secretary
Harry Spindler
Registered office
Principal place of business
Share register
Auditor
Solicitors
Bankers
Level 9, 99 St Georges Terrace
Perth WA 6000
Level 9, 99 St Georges Terrace
Perth WA 6000
Automic Group
Level 5, 191 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
www.hazergroup.com.au
Corporate Governance Statement
https://hazergroup.com.au/investors/#corporategovernance
1
Hazer Group Limited
Chairman's Letter
For the year ended 30 June 2023
Dear Shareholder
On behalf of the Board, I am pleased to present the Hazer Group Limited (Hazer) 2023 Annual Report to shareholders.
This has been an exciting year for Hazer as we conclude the final stages of Phase 2, our ‘hot operations’ construction and
commissioning and move towards achieving Ready For Start Up in the development of our Commercial Demonstration Plant
(CDP) later in 2023. The development of the CDP is fundamental in commercializing and proving the scalability of our Hazer
Process, a world leading methane pyrolysis technology for the low emission and cost-effective production of clean hydrogen.
Our team has concluded all relevant tests including plant debugging and performance testing. The cold operations test
program has also been completed ahead of schedule. In preparation for the commencement of the start-up phase, Primero
has near completed engineering activities to allow installation of the final hot equipment arriving in Q3 of calendar year 2023.
Phase 2 construction commenced in June 2023 and has progressed well, including the main furnace installation being
completed and pre-commissioning commencing ahead of schedule.
The overall outlook for our Hazer technology remains enormously promising, with international interest in methane pyrolysis
technologies continuing to increase. We have positioned ourselves strongly when comparing with competing technologies,
building strong foundations based on our technical development program, our R&D program and the flagship impact of our
CDP.
We also have some other important projects in the pipeline. Firstly our collaboration with FortisBC in British Columbia, Canada
for a plant with capacity to produce up to 2,500tpa of hydrogen and 9,500tpa of marketable graphitic carbon, a scale-up of 25
times on the CDP (~100tpa of hydrogen).
The initial design and engineering work for the plant and commercial scale reactor remain on track. The MKII prototype reactor
to be installed at the CDP will utilize the improved technology being developed by Hatch in collaboration with Hazer and is
therefore well advanced with detailed engineering and early procurement to commence shortly.
Hazer signed a Memorandum of Understanding (MOU) with Chubu Electric Power and Chiyoda Corporation in April. We are
working together to prepare a Project Development Plan for a clean hydrogen and graphite production hub in the Chubu region
of Japan. It is currently planned that the facility will target an ultimate hydrogen production capacity of between 50,000 and
100,000tpa.
In May we entered an MOU with ENGIE SA (“ENGIE”) to prepare a Project Development Plan for a clean hydrogen and
graphite production facility also based on our proprietary technology. The facility’s initial production capacity will be at least
2,500 tpa of hydrogen with the hydrogen to be used in industrial applications and mobility. Preliminary investigations have
established that hydrogen produced from the Hazer facility will meet the requirements for low carbon hydrogen projects under
relevant regulatory frameworks and guidelines as administered by the European Union, a significant milestone for the Hazer
process technology.
During the year we welcomed Mr Glenn Corrie as Chief Executive Officer of Hazer, effective 10 October 2022 following the
retirement of Mr Geoff Ward. Mr Corrie is a proven business leader and senior executive with over 25 years of international
energy industry, private equity and investment experience, and a track record of successfully leading large listed and private
equity backed companies. He brings substantial capital markets experience across the equity and debt markets as well as
extensive global M&A experience across Asia, China, Africa, Latin America, US and Europe. We have already seen the impact
Glenn has made on the organization and believe that he will continue to move us forward at great pace.
I would like to thank Geoff Ward for his service to Hazer and note that he was instrumental in moving Hazer towards
commercialization and the change in the organization in his tenure was massive. I also note that founder and chief technology
officer, Andrew Cornejo, has also recently left Hazer as he wants to pursue other ideas that have long held his interest. I wish
both Geoff and Andrew great success in the future endeavours they undertake.
Finally, we continue to be grateful to our shareholders, for your ongoing support throughout 2023. I look forward to your
continued support as a shareholder as the Company continues its exciting journey.
Yours faithfully
Mr Tim Goldsmith
Non-Executive Chairman
2
Hazer Group Limited
Managing Director's Report
For the year ended 30 June 2023
COMMERCIAL DEMONSTRATION PLANT
The Hazer Commercial Demonstration Project (‘CDP’) is the first fully integrated demonstration of the Hazer Process and in
June 2022, Hazer received the handover of its CDP from their construction contractor, Primero Group.
The aim of the CDP is to demonstrate the scale-up and commercial potential of the Hazer Process, a world leading example
of methane pyrolysis, a low emission and cost-effective method to produce clean hydrogen. The facility will process biogas
produced from the treatment of wastewater at the Woodman Point Water Resource Recovery Facility to produce hydrogen
and graphitic carbon.
The CDP is progressing on schedule with the Phase 2 (‘hot operations’) construction and commissioning due to complete in
the second half of 2023, reaching Ready For Start Up (‘RFSU’) at the end of 2023.
During the financial year, the CDP operations team successfully completed the cold operations program, including plant
debugging and performance testing, ahead of the hot construction phase. The cold operations test program was completed,
using the replica cold reactor, providing initial baseline data needed for whole-of-plant operations. In preparation for the
commencement of the start-up phase Primero has near completed engineering activities to allow installation of the final hot
equipment arriving in Q3 2023. The construction crew have been mobilised and have completed the installation of available
equipment, including the furnace for the hot wall reactor and the low temperature heat exchanger, de-risking the overall project
delivery schedule.
Procurement of the heat exchanger and reactor have progressed well and are in their final stages of fabrication and expected
to be delivered to site in September 2023. The alternative piping and heat exchanger material (Inconel 617), a higher
specification alloy being supplied by Specialty Metals Wiggin (UK), is also progressing well. Hatch continued to make good
progress with the improved reactor technology concept during the final quarter which is also being adopted at our commercial
scale-up project in Canada. Having a second high quality heat exchanger unit and reactor available during the lifespan of the
CDP supports contingency planning and risk mitigation, as well as the research and technical development strategy enabling
the optimization of the plant configuration for commercial scale-up and provides important technical data using alternative
material selection.
COMMERCIAL OPPORTUNITIES AND PARTNERSHIPS
Hazer-FortisBC Collaboration - British Columbia, Canada
The Hazer Canada Project is based in Vancouver, British Columbia Canada. In a collaboration with FortisBC, a leading
Canadian energy utility, the commercial plant is being designed to produce up to 2,500tpa of hydrogen and 9,500tpa of
marketable graphitic carbon, a scale-up of 25 times on the CDP (~100tpa of hydrogen).
FortisBC is responsible for supplying the natural gas feedstock to the project and then will offtake the hydrogen from the facility
to blend into the Vancouver natural gas pipeline network and use for other potential applications, supporting British Columbia’s
Government decarbonisation strategy. Hazer will play a lead role providing the core Hazer technology components.
The initial design and engineering work for the plant and commercial scale reactor remain on track. The MKII prototype reactor
to be installed at the CDP will utilize the improved technology being developed by Hatch in collaboration with Hazer and is
therefore well advanced. The Front-End Engineering & Design (“FEED”) study close out report being conducted by Wood
Group was completed at end of July.
Suncor has withdrawn from the MOU as a result of a corporate portfolio review, effective 31 July 2023, with Hazer and Fortis
BC assuming operatorship. Their withdrawal is not related to the viability of the Hazer technology. With Suncor’s departure
from the project, Hazer and FortisBC are working together to identify alternative site locations which has resulted in the
targeted FID being expected to move from late 2023 to the first half of 2024 to allow additional time to identify the new site for
the project.
Chubu Electric and Chiyoda
In April, Hazer signed a Memorandum of Understanding (MOU) with Chuba Electric Power and Chiyoda Corporation to
prepare a Project Development Plan for a clean hydrogen and graphite production hub (“The Project”) in the Chubu region of
Japan. The Project will be based on Hazer’s proprietary technology with the hydrogen produced by the hub intended to be
used by Chubu Electric as a fuel for power generation, and other hard to abate industries, as well as mobility in the Nagoya
area.
3
Hazer Group Limited
Managing Director's Report
For the year ended 30 June 2023
The Project’s planned production facility will target an ultimate hydrogen production capacity of between 50,000 and
100,000tpa, planned to be achieved in phases. The initial hydrogen production capacity is currently anticipated to be between
2,500 and 10,000tpa.
Collaboration with ENGIE SA in Europe
On 9 May 2023 Hazer and ENGIE SA (“ENGIE”), a French global multi-national utility company, entered into a non-binding
MOU, agreeing to work collaboratively to prepare the Project Development Plan for a clean hydrogen and graphite production
facility based on Hazer’s proprietary technology. The facility will be located at the existing LNG import and regasification
terminal at Montoir de-Bretagne in France. ENGIE’s affiliate company ELENGY owns and operates the Montoir LNG Terminal,
the Project has been named H2Montoir.
The facility’s initial production capacity will be at least 2,500 tpa of hydrogen with the hydrogen to be used in industrial
applications and mobility. ENGIE conducted a Preliminary Feasibility Study (PFS) on the application of the Hazer process at
the existing LNG import and regasification terminal in Montoir-de-Bretagne. During this study, preliminary investigations
established that hydrogen produced from the Hazer facility will meet the requirements for low carbon hydrogen projects under
relevant regulatory frameworks and guidelines as administered by the European Union. This is a significant milestone for the
Hazer process technology in terms of reaching legislative and commercial milestones.
RESEARCH AND TECHNOLOGY DEVELOPMENT
The Company continued its focus on strategy development, planning and resourcing for key workstreams which include the
following:
• Process Development – CDP test plan design review to maximise process learnings and reactor scale-up
development to optimise design for 10,000tpa hydrogen and larger plant capacities.
• Graphite Market Development – Secure high volume, low complexity offtake prior to optimizing for higher value outlets.
• Catalyst Development – Establish low-cost supply and build fundamental analytical and technical capability to enable
optimization and manage quality assurance and quality control.
Progress is in line with expectation, with activities continuing the experimental testing program for the CDP as well as support
for the Canada reactor design to achieve 25x scale-up beyond CDP.
Screening work has commenced to evaluate optimal next generation reactor design for further commercial scale-up beyond
the Canada reactor design targeting 10,000tpa and higher single train capacity. Significant progress was made towards
securing additional resources required to accelerate the Research and Development (“R&D”) strategy including specialist
skills to support the Hazer graphite product market development. The next phase of graphite market development work
commenced with an initial market application assessment completed to assess potential size and value of applicable markets
with multiple potential high-volume outlets identified.
Mr Glenn Corrie
Managing Director and Chief Executive Officer
4
Hazer Group Limited
Directors' report
For the year ended 30 June 2023
The directors present their report, together with the financial statements, on the Group(referred to hereafter as 'the Group') consisting of
Hazer Group Limited (referred to hereafter as the 'Company' or 'parent entity') and the entity it controlled at the end of, or during, the year
ended 30 June 2023.
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 Hinkley
Jack Hamilton
Geoff Ward - retired on 1 July 2022
Glenn Corrie - appointed CEO on 10 October 2022 and appointed Managing Director on 3 April 2023
Principal activities
During the financial year, the principal continuing activities of the Group consisted of research and development of novel graphite-and-
hydrogen-production technology.
The Group 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 coproduction of a high-purity
graphite product.
Dividends
There were no dividends paid during the year.
Review of operations
Revenues from ordinary activities increased by 108% to $2,705,670 due to a higher R&D tax income accrual than prior year. The driver
for the higher accrual is increased spend on R&D salaries and wages and operating consultants during FY23.
Loss from ordinary activities after tax decreased to $12,205,599 in 2023 (2022: $16,414,826): primarily due to the decreased spending on
the CDP construction during the year, with $146,755 subsequently impaired and expensed, compared to the prior year's impairment in
2022 of $9,604,916. This was partially offset by higher than prior year spending on consulting and research expenses and employee
benefits.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
On 7th August 2023, the Company executed binding agreements with Innovation Structured Finance Co.,LLC for a $1.8 million 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. The loan has been drawn down in one tranche and has a maturity date of 31 December 2023, however can be early settled
at any time by Company without penalty. Innovation Structured Finance Co.,LLC will hold security over Hazer’s FY23 R&D Tax Incentive
rebate which is estimated to fully clear the loan and any associated costs on receipt before loan maturity date.
On 31st July 2023, the Company announced a non-renounceable rights issue to eligible shareholders of 3 New shares for every 16 Shares
held at an issue price of $0.48 per New Share with 1 attaching New Option for every 2 New Shares allotted. Each New Option is exercisable
at $0.75 per Share and expires on 28 February 2025. The Offer was lead managed and partially underwritten by Viriathus Capital Pty
Ltd. The offer closing date was Friday 18 August 2023 with funds raised at signing date totaling $14.7 million.
The proceeds from this raise are to be principally used towards:
●
●
●
CDP related operating expenditure including operational performance testing and post start up R&D/reactor operating performance
diagnostics;
Advancing current commercial projects in North America, Japan and France, and pursuing further opportunities in Asia and North
America;
Estimated costs of the Offer and working capital.
Likely developments and expected results of operations
Information on likely developments in the operations of the Group 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 Group.
5
Hazer Group Limited
Directors' report
For the year ended 30 June 2023
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on Directors
Name:
Title:
Tim Goldsmith
Non-Executive Chairman (Independent Director)
Length of service:
Director since 24 July 2017
Qualifications:
Bachelor of Commerce from the Polytechnic of North London (now North London University).
Member of the Institute of Chartered Accountants Australia and New Zealand.
Experience and expertise:
Tim was CEO of Rincon Ltd from November 2017, assisting with addressing corporate issues
and maintaining solvency. After that was overcome in 2020, Tim ceased that role and became
CEO of its subsidiary Rincon Mining Pty Ltd which evaluated and readied for development the
strategically important Rincon lithium project in Salta Province in Argentina. In March 2022 this
asset was sold to Rio Tinto and Tim completed his role. He was also executive chairman for
another subsidiary, Natural Soda, an operating bicarbonate of soda mine in Colorado, US. This
asset was sold in December 2021.
Prior to that time, Tim was a partner at global professional services firm PricewaterhouseCoopers
(PwC) for over 20 years. Tim was PwC’s Global Mining Leader. Tim was also an early participator
in the China growth story and initiated a China focus in 2002 and worked with many Chinese
companies over the following 15 years as they looked to invest offshore.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
Non-Executive Director of Costa Group Holdings Ltd (ASX: CGC)
Chairman of Angel Seafood Holdings Limited (ASX: AS1)
Member of the Audit and Risk Committee and Member of Remuneration and Nomination
Committee
1,814,782
668,273
None
Name:
Title:
Danielle Lee
Non-Executive Director (Independent Director)
Length of service:
Director since 16 September 2015
Qualifications:
Experience and expertise:
Bachelor of Economics from the University of Western Australia, Bachelor of Laws from the
University of Western Australia (first class honours), Graduate Diploma in Applied Finance and
Investment from the Securities Institute of Australia
Danielle is an experienced corporate lawyer with more than 25 years’ experience. She has a
broad range of skills and legal experience in the areas of corporate advisory, governance and
equity capital markets. She has advised 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.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
Non-Executive Director of Rare Foods Australia Ltd (ASX: RFA)
Non-Executive Director of Openn Negotiation Ltd (ASX: OPN)
Chair of Audit and Risk Committee and Member of Remuneration and Nomination Committee
810,597
408,996
None
6
Hazer Group Limited
Directors' report
For the year ended 30 June 2023
Name:
Title:
Andrew Hinkly
Non-Executive Director (Non-Independent Director)
Length of service:
Director since 21 April 2021
Qualifications:
Master of Business Administration from the University of Manchester and Bachelor of Science in
Civil Engineering from the University of Loughborough.
Experience and expertise:
Andrew is the Founding Managing Partner of AP Ventures. As Managing Partner at AP Ventures,
Andrew has been involved in numerous investments in the hydrogen sector across all aspects
of the hydrogen value chain.
Prior to AP Ventures, Andrew has enjoyed a high profile career spanning more than 25 years
working in commercial roles across the automotive and mining industries, including senior
leadership positions at Anglo American, where he worked for a decade and was a member of
Anglo American Platinum Executive Committee, and the Ford Motor Company where he was a
member of the North American Executive Committee. At Ford, he led the Production
Procurement operations of Ford Americas and was responsible for $45 billion of annual
purchases from over 40,000 suppliers.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
None
None
None
Indirect interest, as Managing Partner of AP Ventures, 10,445,901 shares1
824,6761
None
1 Indirect interest as the Managing Partner of AP Ventures. On 12th April 2021, AP Ventures Fund II GP LLP were issued 2,250,000
options to acquire 2,250,000 ordinary Hazer share for a collective nominal exercise price of $1 for all options. This option was exercised
in December 2021. On 12th April 2021, AP Ventures Fund II GP LLP were also issued 4,000,000 unlisted, unsecured Convertible Notes
with a face value of $1 each. On 30 June 2023, all convertible notes had been converted to shares. On 22nd August 2023, AP Ventures
participated in the rights issue to eligible shareholders and increased their shareholding to 10,445,901 and acquired 824,676 Options.
Name:
Title:
Jack Hamilton
Non-Executive Director (Independent Director)
Length of service:
Director since 1 November 2021
Qualifications:
Experience and expertise:
Bachelor of Engineering (Chemical) and Doctorate of Philosophy (Engineering) from the
University of Melbourne. A Fellow of the Australian Institute of Energy (FAIE) and a Fellow of the
Australian Institute of Company Directors (FAICD).
Jack Hamilton is a highly experienced senior executive and board director with extensive
expertise across technology, operations and manufacturing, project management, business
development and commercial ventures.
Dr Hamilton has held senior positions locally and internationally across the energy sector,
including heading up Australia's largest resource project as Director of North West Shelf Ventures
for Woodside Energy Ltd.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
None
Chairman of AnteoTech (ASX ADO) ; Non-executive director with Calix Ltd (ASX CXL)
Chair of Remuneration and Nomination Committee and member of the Audit and Risk Committee
88,681
352,002
None
7
Hazer Group Limited
Directors' report
For the year ended 30 June 2023
Name:
Title:
Glenn Corrie
Managing Director and Chief Executive Officer
Length of service:
Managing Director since 3 April 2023, and Chief Executive Officer since 10 October 2022
Qualifications:
MBA from the University of Chicago-Booth School of Business and an honours degree in
geophysics from Adelaide University
Experience and expertise:
Glenn is a proven business leader and senior executive with over 25 years of international energy
industry, private equity and investment experience, and a track record of successfully leading
large listed and private equity backed companies. Glenn has substantial capital markets
experience as well as extensive global M&A experience.
Glenn was previously an executive board member of Suriname's State Oil company, Staatsolie,
responsible for the offshore directorate and advising on strategic financing projects. He was the
founding CEO of NEO Energy in the UK, a private equity funded full-lifecycle oil and gas start-
up, and prior to that, the CEO and Managing Director of ASX listed Sino Gas and Energy, a
leading China focused natural gas production and development firm. During his career, he has
also held senior positions with Ophir Energy PLC and Temasek Holdings Ltd, Singapore's state-
owned investment company responsible for global energy investments, including renewables.
From 1998-2010 he held a variety of senior positions with Shell International.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
None
Sino Gas & Energy Holdings Limited (resigned April 2019)
Managing Director
7,289
4,103,645
None
'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
Harry Spindler has held the role of Company Secretary since 26 October 2022.
Harry is an experienced corporate professional with a broad range of corporate governance and capital markets experience spanning 22
years. Previously heheld various company secretary positions and has been involved with several public company listings, merger and
acquisitions transactions and capital raisings for ASX-listed companies.
Harry is a member of the Institute of Chartered Accountants Australia and New Zealand and a member of the Financial Services Institute
of Australia.
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the year ended 30
June 2023, and the number of meetings attended by each Director were:
Tim Goldsmith
Danielle Lee
Andrew Hinkley
Jack Hamilton
Glenn Corrie
Full Board
Attended
Held
Audit and Risk Committee
Attended
Held
Remuneration and Nomination
Committee
Attended
Held
8
8
4
8
2
8
8
8
8
2
2
2
-
2
-
2
2
-
2
-
2
2
-
2
1
2
2
-
2
1
Held: represents the number of meetings held during the time the Director held office.
8
Hazer Group Limited
Directors' report
For the year ended 30 June 2023
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, 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 Group'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 is considered to conform 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 Group 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 it is based on the following factors:
Alignment to shareholders' interests:
●
●
focuses on sustained growth in shareholder wealth, consisting of dividends and growth in 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 remuneration structure of non-executive directors and executive directors is
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.
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.
9
Hazer Group Limited
Directors' report
For the year ended 30 June 2023
The level of Non-Executive Director fixed fees as at the reporting date are as follows:
Tim Goldsmith
Danielle Lee
Andrew Hinkley
Jack Hamilton
$ 75,000 plus statutory superannuation per annum
$ 50,000 plus statutory superannuation per annum
Reimbursement of reasonable fees and expenses in attending one annual face-to-face meeting
of the Board in Australia.
$ 55,250 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 Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration 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 by the Nomination and
Remuneration Committee based on individual and business unit performance, the overall performance of the Group 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 additional costs to the Group and provides additional value to the executive.
Performance-based short-term incentives ('STI') may be provided to executives to align the business targets with 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 2023, the Group 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 89.90% “for” votes on its Remuneration Report for the year ended 30 June 2022.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
The key management personnel of the Group consisted of the following Directors of the Company:
●
●
●
●
●
●
Tim Goldsmith – Non-Executive Chairman
Danielle Lee - Non-Executive Director
Andrew Hinkly – Non-Executive Director
Jack Hamilton – Non-Executive Director
Geoff Ward – Executive Director - retired on 1 July 2022
Glenn Corrie – Executive Director - appointed CEO on 10 October 2022 and appointed Managing Director on 3 April 2023
Neil Brodie is the Interim CFO and is not considered to be Key Management Personnel and is not involved in key management decisions.
10
Hazer Group Limited
Directors' report
For the year ended 30 June 2023
Changes since the end of the reporting period:
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments 3
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Super-
annuation
$
Long service
leave
$
Equity-
settled
$
Total
$
2023
Non-Executive
Directors:
Tim Goldsmith
Danielle Lee
Andrew Hinkly
Jack Hamilton
Executive Directors:
Glenn Corrie 1
Geoff Ward 2
2022
Non-Executive
Directors:
Tim Goldsmith
Danielle Lee
Jack Hamilton 1
Andrew Harris 2
Executive Directors:
Geoff Ward 3
75,000
50,000
-
55,250
349,425
143,668
673,343
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,875
5,250
-
-
19,051
14,390
46,566
-
-
-
-
-
-
-
54,796
36,009
-
36,009
137,671
91,259
-
91,259
771,555
-
898,369
1,140,031
158,058
1,618,278
1 Glenn Corrie was CEO from 10 October 2022 and CEO and Managing Director from 3 April 2023
2 Geoff Ward resigned as Managing Director on 1 July 2022 and remained as CEO until 10 October 2022. Remuneration reported in the
table above is in relation to Geoff Ward's role as CEO.
3 Share-based payments relate to options issued in a current period vesting over multiple periods.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Super-
annuation
$
Long service
leave
$
Equity-
settled
$
Total
$
64,500
40,000
29,343
17,576
-
-
-
-
320,119
471,538
42,525
42,525
-
-
-
-
-
-
1,500
4,000
-
1,758
33,429
40,687
-
-
-
-
-
-
-
-
-
-
-
-
66,000
44,000
29,343
19,334
396,073
554,750
1 Jack Hamilton's remuneration is for the period 1 November 2021 to 30 June 2022
2 Andrew Harris' remuneration is for the period 1 July 2021 to 8 December 2021
3 Geoff Ward's cash bonus includes a figure of $28,350 in relation to the current financial year that was paid after the year end.
11
Hazer Group Limited
Directors' report
For the year ended 30 June 2023
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Tim Goldsmith
Danielle Lee
Andrew Hinkly
Jack Hamilton
Executive Directors:
Glenn Corrie
Fixed remuneration
2022
2023
At risk - STI
At risk - LTI
2023
2022
2023
2022
60%
61%
-
61%
100%
100%
-
100%
32%
-
-
-
-
-
-
-
-
-
-
-
40%
39%
-
39%
68%
-
-
-
-
-
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:
Share-based compensation
Glenn Corrie
Executive Director and Chief Executive Officer
10 October 2022
Open
Base salary of $480,000 plus superannuation. In addition to the Base Salary, a bonus of up to
50% if KPIs set by the Board are met. Achievement of set KPIs is at the discretion of the
Nomination and Remuneration Committee. Further the Executive will be entitled to the Initial
Long Term Incentive of 4.1million performance Based Options to acquire fully paid ordinary
shares in the Company. Three month termination notice by either party. Twelve month non
solicitation clause after termination.
Options
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 2023 are set out below:
Tim Goldsmith
Danielle Lee
Andrew Hinkly
Jack Hamilton
Glenn Corrie
Number of options
granted during the
year
Number of options
granted during the
year
Number of options
vested during the
year
Number of options
vested during the
year
2023
2022
2023
2022
525,000
345,000
-
345,000
4,100,000
-
5,315,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12
Hazer Group Limited
Directors' report
For the year ended 30 June 2023
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 2023 are set out below:
Value of options
granted during the
year
Value of options
exercised during the
year
Value of options
lapsed during the
year
Remuneration
consists of options
for the year
Year ended 30 June 2023
$
$
$
%
Tim Goldsmith
Danielle Lee
Andrew Hinkly
Jack Hamilton
Glenn Corrie
276,758
181,870
-
181,870
2,448,084
3,088,582
-
-
-
-
-
-
40.00%
39.00%
-
39.00%
68.00%
-
-
-
-
-
-
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 2022 are set out below:
Value of options
granted during the
year
Value of options
exercised during the
year
Value of options
lapsed during the
year
Remuneration
consists of options
for the year
Year ended 30 June 2022
$
$
$
%
Tim Goldsmith
Andrew Hinkly
Jack Hamilton
Andrew Harris
Geoff Ward
-
-
-
-
-
-
-
-
-
-
500,000
1,800,000
-
-
-
500,000
500,000
2,300,000
-
-
-
-
-
Additional information
The earnings of the Group for the five years to 30 June 2023 are summarised below:
2023
$
2022
$
2021
$
2020
$
2019
$
Revenues from ordinary activities
Loss after income tax
Net assets
2,705,670
12,205,599
3,939,477
1,297,805
16,414,826
12,451,967
2,664,459
11,656,094
13,316,270
1,436,617
3,225,289
18,013,551
1,669,368
4,396,377
5,834,306
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end ($)
Total dividends declared (cents per share)
Basic earnings per share (cents per share)
0.63
-
(7.19)
0.76
-
(10.38)
0.86
-
(8.22)
0.37
-
(2.99)
0.26
-
(4.71)
2023
2022
2021
2020
2019
13
Hazer Group Limited
Directors' report
For the year ended 30 June 2023
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 Group, including their personally related parties, is set out below:
Ordinary Shares
Tim Goldsmith
Danielle Lee
Andrew Hinkly 1
Jack Hamilton
Glenn Corrie
Geoff Ward 2
Balance at the
start of the
year
Received as
part of
remuneration
Additions
Disposals/
Other
Balance at the
end of the
year
1,078,237
682,608
4,680,455
67,500
-
1,479,970
7,988,770
-
-
-
-
-
-
-
450,000
-
4,116,094
7,178
38,871
-
-
-
-
-
-
(1,479,970)
1,528,237
682,608
8,796,549
74,678
38,871
-
4,612,143
(1,479,970)
11,120,943
1 Indirect interest as the Managing Partner of AP Ventures. On 12th April 2021, AP Ventures Fund II GP LLP were issued 2,250,000
options to acquire 2,250,000 ordinary Hazer share for a collective nominal exercise price of $1 for all options. This option was exercised
in December 2021. On 12th April 2021, AP Ventures Fund II GP LLP were also issued with 4,000,000 unlisted, unsecured Convertible
Notes with a face value of $1 each. On 30 June 2022, 1,333,333 convertible notes were converted to 2,430,455 shares; on 4 August
2022, 1,333,333 convertible notes were converted to 2,008,402 shares and finally on 26 September 2022 the remaining 1,333,334
convertible notes were converted to 2,107,692 shares.
2 Disposals/other represents 1,479,970 shares held at resignation date 1 July 2022.
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 Group, including their personally related parties, is set out below:
Options over ordinary shares
Tim Goldsmith
Danielle Lee
Andrew Hinkly
Jack Hamilton
Glenn Corrie
Geoff Ward 1
Balance at the
start of the
year
Granted
Additions
Expired
Forfeited/
exercised
Balance at the
end of the
year
-
-
-
-
-
4,000,000
4,000,000
-
-
-
-
-
-
-
525,000
345,000
-
345,000
4,100,000
-
-
-
-
-
-
(4,000,000)
525,000
345,000
-
345,000
4,100,000
-
5,315,000
(4,000,000)
5,315,000
1 Expired/Forfeited/exercised represents options held at resignation date 1 July 2022.
Other transactions with key management personnel and their related parties
The number of Convertible Notes 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:
14
Hazer Group Limited
Directors' report
For the year ended 30 June 2023
Convertible Notes
Tim Goldsmith
Danielle Lee
Andrew Hinkly
Jack Hamilton
Glenn Corrie
Geoff Ward
Balance at the
start of the year
Granted
Additions
Expired Forfeited/
exercised
Balance at the
end of the year
-
-
2,666,667
-
-
-
2,666,667
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,666,667) 1
-
-
-
(2,666,667)
-
-
-
-
-
-
-
1 Indirect interest as the Managing Partner of AP Ventures. On 12th April 2021, AP Ventures Fund II GP LLP were issued 4,000,000
unlisted, unsecured Convertible Notes with a face value of $1 each. On 30 June 2022, 1,333,333 convertible notes were converted to
2,430,455 shares, on 4 August 2022, 1,333,333 convertible notes were converted to 2,008,402 shares and finally on 26 September 2022
the remaining 1,333,334 convertible notes were converted to 2,107,692 shares.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Hazer Group Limited under option at the date of this report are as follows:
Options series
Grant date
Expiry date
Exercise price
Series N
Series N
Series P
Series Q
Series R
Series S
14/11/2018
18/10/2019
24/11/2022
24/11/2022
01/01/2023
22/08/2023
30/06/2024
30/06/2024
22/12/2027
22/12/2027
01/01/2028
02/02/2025
$0.90
$0.00
$0.90
$0.00
$0.00
$0.75
Number under
option
2,000,000
1,450,000
4,100,000
1,215,000
1,867,890
8,032,578
18,665,468
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
There were no ordinary shares of Hazer Group Limited issued on the exercise of options during the year ended 30 June 2023 and up to
the date of this report.
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 Group paid a premium in respect of a contract to insure the Directors and executives of the Group against
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.
15
Hazer Group Limited
Directors' report
For the year ended 30 June 2023
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.
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
23 August 2023
16
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
RSM Australia Partners
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 2023, 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: 23 August 2023
ALASDAIR WHYTE
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
Hazer Group Limited
Contents
For the year ended 30 June 2023
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
Contents
General information
19
20
21
22
23
51
52
55
The financial statements cover Hazer Group Limited as a Group consisting of Hazer Group Limited and the entities it controlled at the end
of, or during, the year. The financial statements are presented in Australian dollars, which is Hazer Group Limited's functional and
presentation currency.
Hazer Group Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal
place of business are:
Registered office
Level 9, 99 St Georges Terrace
Perth WA 6000
Principal place of business
Level 9, 99 St Georges Terrace
Perth WA 6000
The Directors' report includes a description of the nature of the Group's operations and its principal activities, which is not part of the
financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 23 August 2023.
The Directors have the power to amend and reissue the financial statements.
18
Hazer Group Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
Revenue
Interest received
R&D tax rebate
Grant income
Other income
Expenses
Finance costs
Administration
Consulting and research expenses
Employee benefits expenses
Share based payments
Depreciation and amortisation expense
Impairment expense on commercial demonstration plant
Loss before income tax expense
Income tax expense
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Basic earnings per share
Diluted earnings per share
Note
Consolidated
2023
$
2022
$
31
21
28
8
20
19
30
30
302,861
2,402,809
-
-
2,705,670
5,870
1,227,221
50,000
14,714
1,297,805
(370,935)
(2,810,653)
(5,670,814)
(4,754,006)
(1,046,848)
(111,258)
(146,755)
(629,864)
(1,488,300)
(2,494,151)
(3,274,499)
(143,427)
(77,474)
(9,604,916)
(12,205,599)
(16,414,826)
-
-
(12,205,599)
(16,414,826)
-
-
(12,205,599)
(16,414,826)
Cents
Cents
(7.19)
(7.19)
(10.38)
(10.38)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
19
Hazer Group Limited
Statement of financial position
As at 30 June 2023
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Commercial Demonstration Plant
Plant and equipment
Leases
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Leases
Contract liabilities
Borrowings
Convertible note liability and derivative
Total current liabilities
Non-current liabilities
Leases
Contract liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Equity - accumulated losses
Total equity
Note
Consolidated
2023
$
2022
$
5
6
7
8
9
10
11
12
10
13
14
15
10
13
12
9,278,322
2,939,084
161,457
12,378,863
18,027,924
8,528,905
312,419
26,869,248
-
21,162
265,350
286,512
-
7,843
160,819
168,662
12,665,375
27,037,910
5,146,293
254,360
87,029
951,000
-
-
6,438,682
3,152,900
170,545
67,195
3,920,000
2,309,095
2,850,795
12,470,530
174,233
1,500,000
612,983
2,287,216
85,413
1,500,000
530,000
2,115,413
8,725,898
14,585,943
3,939,477
12,451,967
17
18
19
61,505,433
1,630,088
(59,196,044)
58,859,172
2,585,976
(48,993,181)
3,939,477
12,451,967
The above statement of financial position should be read in conjunction with the accompanying notes
20
Hazer Group Limited
Statement of changes in equity
For the year ended 30 June 2023
Consolidated
Balance at 1 July 2021
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 17)
Shares issued pursuant to the exercise of options
Share-based payments
Transfer expired options to accumulated losses
Issued
capital
$
Reserves
$
Retained
profits
$
Total equity
$
40,774,126
6,643,064
(34,100,920)
13,316,270
-
-
-
-
-
-
(16,414,826)
-
(16,414,826)
-
(16,414,826)
(16,414,826)
14,835,596
3,249,450
-
-
-
(2,677,950)
143,427
(1,522,565)
-
-
-
1,522,565
14,835,596
571,500
143,427
-
Balance at 30 June 2022
58,859,172
2,585,976
(48,993,181)
12,451,967
Consolidated
Balance at 1 July 2022
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 17)
Share-based payments
Transfer expired options to accumulated losses
Issued
capital
$
Reserves
$
Retained
profits
$
Total equity
$
58,859,172
2,585,976
(48,993,181)
12,451,967
-
-
-
-
-
-
(12,205,599)
-
(12,205,599)
-
(12,205,599)
(12,205,599)
2,646,261
-
-
-
1,046,848
(2,002,736)
-
-
2,002,736
2,646,261
1,046,848
-
Balance at 30 June 2023
61,505,433
1,630,088
(59,196,044)
3,939,477
The above statement of changes in equity should be read in conjunction with the accompanying notes
21
Hazer Group Limited
Statement of cash flows
For the year ended 30 June 2023
Cash flows from operating activities
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest and other finance costs paid
Research & development tax rebate received
Grant income received (inclusive of GST)
Other income received
Net cash used in operating activities
Cash flows from investing activities
Payments for Commercial Demonstration Plant
Other 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 share issue costs
Proceeds from borrowings
Repayment of borrowings
Transaction costs related to borrowings
Repayment of lease liability
Net cash from/(used in) financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Note
Consolidated
2023
$
2022
$
(11,064,599)
347,981
(8,776)
9,448,880
-
-
(6,627,156)
5,870
(7,720)
1,326,917
50,000
14,714
(1,276,514)
(5,237,375)
(4,476,844)
(20,665)
(16,049,524)
(11,525)
(4,497,509)
(16,061,049)
(20,406)
-
2,000,000
(4,852,193)
(2,200)
(100,780)
13,502,263
571,500
2,000,000
(1,326,917)
-
(60,588)
(2,975,579)
14,686,258
(8,749,602)
18,027,924
(6,612,166)
24,640,090
Cash and cash equivalents at the end of the financial year
5
9,278,322
18,027,924
The above statement of cash flows should be read in conjunction with the accompanying notes
22
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 1. Significant accounting policies
Note 2. Critical accounting judgements, estimates and assumptions
Note 3. Operating segments
Note 4. Financial risk management objectives and policies
Note 5. Cash and cash equivalents
Note 6. Trade and other receivables
Note 7. Other current assets
Note 8. Commercial Demonstration Plant
Note 9. Plant and equipment
Note 10. Leases
Note 11. Trade and other payables
Note 12. Provisions
Note 13. Contract liabilities
Note 14. Borrowings
Note 15. Convertible note liability and derivative
Note 16. Fair value measurement
Note 17. Issued capital
Note 18. Reserves
Note 19. Equity - accumulated losses
Note 20. Income Tax
Note 21. Finance Costs
Note 22. Key management personnel disclosures
Note 23. Remuneration of auditors
Note 24. Contingent assets and liabilities
Note 25. Commitments
Note 26. Related party transactions
Note 27. Reconciliation of loss after income tax to net cash from/(used in) operating activities
Note 28. Share based payments
Note 29. Interests in subsidiaries
Note 30. Earnings per share
Note 31. R&D tax rebate
Note 32. Events after the reporting period
Note 33. Parent entity information
24
30
30
31
32
33
33
34
35
35
37
37
38
38
39
39
40
41
42
42
44
44
44
44
45
45
46
46
48
48
48
49
49
23
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
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 Group 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 adopted early.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities.
These financial statements also comply with International Financial Reporting Standards, as issued by the International Accounting
Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial
assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income, investment
properties, certain classes of property, plant and equipment and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group'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.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary information
about the parent entity is disclosed in note 33.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Hazer Group Limited ('Company' or 'parent
entity') as at 30 June 2023 and the results of all subsidiaries for the year then ended. Hazer Group Limited and its subsidiaries together
are referred to in these financial statements as the 'Group'.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries
have been changed where necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the
loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value
of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the
subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the
consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.
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.
24
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 1. Significant accounting policies (continued)
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for
transferring goods or services to a customer. For each contract with a customer, the Group: 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.
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.
Research and Development tax rebate
Research and Development Tax Rebate (R&D Rebate) judgements are made by Management, utilising the Group’s specialist R&D Tax
advisers. The process includes interviews, documentation and assessment of the various activities undertaken by the Group to determine
if the activities meet the statutory eligibility requirements for an R&D Rebate claim.
The R&D tax rebate is recognised when a reliable estimate of the amount's receivable can be made and accrues the amount as either
income in the statement of profit or loss and other comprehensive income or, where appropriate, as an offset against capitalised
development costs.
Provision for restoration
Provisions for restoration are made to recognise obligations to restore a site to its original condition and is periodically reviewed and
updated based on the facts and circumstances available at the time. Changes to the estimated future restoration costs for the site are
recognised in the statement of financial position by adjusting the asset and the provision. Where there is a reduction in the provision that
exceeds the carrying amount of the asset, this is recognised in profit or loss.
25
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 1. Significant accounting policies (continued)
Convertible Notes
The Convertible Note valuations methodology is based on the fair value of the conversion option (convertible note derivative), determined
using Black-Scholes valuation model, and the residual difference is the value of host liability (convertible note liability).
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 the Group's 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 the Group's 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 Group 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.
Property, 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 property, plant and equipment (excluding land)
over their expected useful lives as follows:
Plant and equipment
3-7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains
and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
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 is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the depreciation
is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months
or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
26
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 1. Significant accounting policies (continued)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group 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.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently
measured at amortised cost using the effective interest method.
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, the Group's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties.
The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a
change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty
of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of
use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in
which they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable the
Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised
as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account
the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-
tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.
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.
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.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based
on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal
market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in
their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation
techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising
the use of relevant observable inputs and minimising the use of unobservable inputs.
27
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 1. Significant accounting policies (continued)
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined
based on a reassessment of the lowest level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or
when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is
a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification
of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.
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.
The cost of equity-settled transactions is 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.
28
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 1. Significant accounting policies (continued)
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 nonfinancial 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.
Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and
the realisation of assets and discharge of liabilities in the normal course of business.
As disclosed in the financial statements, the Group's cash balance for the year ended 30 June 2023 was $9,278,322. The Group incurred
a loss of $12,205,599 and had net cash outflows from operating activities of $1,276,514 and from investing activities of $4,497,509 for the
year ended 30 June 2023.
The Directors believe that it is reasonably foreseeable that the Group will continue as a going concern and that it is appropriate to adopt
the going concern basis in the preparation of the financial report after consideration of the following factors:
●
●
Receipt of FY23 and future R&D tax rebates;
Careful cost management with a focus on completion of the CDP and committed R&D projects and great scrutiny over any other
future commitments including recruitment of staff;
As disclosed in note 32 Events after the reporting period, the Company has engaged in a capital raise programme post year end with
gross $14,710,554 raised from existing investors and new investors;
The Company has a strong track record of successfully raising capital and expects to be able to raise additional capital through
equity placements to new investors.
●
●
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 Group for the annual reporting period ended 30 June 2023. The Group does not anticipate that the application of the
new or amended Accounting Standards and Interpretations in the future will have an impact on the Group’s financial statements.
29
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
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.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Company assesses the 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.
Share-based payment transactions
The Group 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.
R&D tax rebate
Significant judgement is required in determining the R&D tax rebate receivable. There are many processes undertaken in determining the
claim and satisfying the statutory eligibility requirements for which the ultimate outcome is uncertain. The Company recognises a R&D tax
rebate when a reliable estimate of the receivable can be determined in consultation with its independent R&D tax advisors.
Where the outcome of the R&D tax rebate claim is different from the carrying amounts, such differences will impact the statement of profit
or loss and other comprehensive income or, where appropriate, as an offset against capitalised development costs in the period in which
such determination is made.
Provision for restoration
The provision for restoration is measured at the undiscounted cost expected to restore the Site back to its original condition given the
current technologies available, at the earlier of the termination date (30 June 2024) or when the CDP is decommissioned. The calculation
of this provision requires assumptions such as the application of closure dates and cost estimates. The provision recognised for the site is
periodically reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs for
the site, is recognised in the statement of financial position by adjusting the asset and the provision. Reductions in the provision that exceed
the carrying amount of the asset will be recognised in profit or loss.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement is exercised in
determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying asset will be exercised, or
an option to terminate the lease will not be exercised, when ascertaining the periods to be included in the lease term. In determining the
lease term, all facts and circumstances that create an economical incentive to exercise an extension option, or not to exercise a termination
option, are considered at the lease commencement date. Factors considered may include the importance of the asset to the Group's
operations; comparison of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant
leasehold improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is reasonably certain to
exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in circumstances.
Note 3. Operating segments
The Group has considered the requirements of AASB 8 – 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 Group 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 its subsidiary is domiciled in Canada. The Group is currently in the development phase and hence has not begun to generate revenue
from operations. All the assets are located in Australia.
30
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 4. Financial risk management objectives and policies
The Group’s principal financial instruments comprise cash and short term deposits only: during FY23, the Group settled its outstanding
borrowings with Mitchell Asset Management and all convertible notes on issue to AP Ventures Fund II GP LLP were converted to share
capital.
The Group 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 Group 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 the 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 the reporting date, the Group had $9,278,322 (2022: 18,027,924) in cash and cash equivalents exposed to interest rate risk.
At the 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:
+0.5% (50 basis points)
-0.5% (50 basis points)
Net Loss Higher/(lower)
Net Equity Higher/(lower)
2023
2022
2023
2022
46,392
(46,392)
90,140
(90,140)
46,392
(46,392)
90,140
(90,140)
The movements are due to higher / lower interest revenue from cash balances.
Other financial instruments held by the Group aside from cash and short term deposits are predominantly fixed interest liabilities, and as
such, are not exposed to interest rate risk.
Liquidity Risk
Liquidity risk is managed through the Group’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.
The Group has assessed the liquidity risk that repayment obligations to secured lenders are not able to be met and concluded it to be low.
Mandatory repayments to secured lenders are offset against the greater of the annual R&D tax rebate amounts as lodged to the Australian
Taxation Office and amounts specified within a repayment schedule.
The table below summarises the maturity profile of the Group's financial liabilities based on contractual undiscounted payments:
31
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 4. Financial risk management objectives and policies (continued)
Year ended 30 June 2023
Trade and other payables
Lease liabilities
Contract liabilities
Borrowings
Convertible note liability
Convertible note derivative
Year ended 30 June 2022
Trade and other payables
Lease liabilities
Contract liabilities
Borrowings
Convertible note liability
Convertible note derivative
Less than 3
Note
months
$
3 to 12 months
$
1-5 years
$
>5 years
$
Total
$
11
10
13
14
15
15
11
10
13
14
15
15
5,146,293
22,583
-
-
-
-
5,168,876
3,152,900
16,178
-
-
-
-
3,169,078
-
64,446
951,000
-
-
-
1,015,446
-
51,017
3,920,000
2,309,095
1,357,002
1,493,793
9,130,907
-
174,233
1,500,000
-
-
-
1,674,233
-
85,413
1,500,000
-
-
-
1,585,413
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,146,293
261,262
2,451,000
-
-
-
7,858,555
3,152,900
152,608
5,420,000
2,309,095
1,357,002
1,493,793
13,885,398
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Collateral
The Group has pledged part of its cash on deposit in order to fulfil the collateral requirements for its lease contracts and corporate credit
card facilities. At 30 June 2023 the fair values of the short-term deposits pledged was $332,542 (2022: $281,222). The counterparties have
the obligation to return the securities in the form of bank guarantees on termination of the lease agreement, subject to make good
requirements on the leased properties being fulfilled, or on termination of the credit card facilities.
Capital management
The primary objective of the Group’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 Group monitors capital with reference to the net debt position. The Group’s current policy is to keep the net debt position negative,
such that cash and cash equivalents exceed debt.
Note 5. Cash and cash equivalents
Cash at bank
Cash on deposit
Cash at bank – restricted
Consolidated
2023
$
2022
$
6,494,780
332,542
2,451,000
12,326,702
281,222
5,420,000
9,278,322
18,027,924
32
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 5. Cash and cash equivalents (continued)
Cash on deposit
The Group has amounts held in term deposits with varying maturities. Amounts held in term deposits are for the purpose of fulfilling
collateral and security requirements associated with lease arrangements and corporate credit card facilities held.
Cash at bank - restricted
The Group has received grant funding from ARENA, an independent agency of the Australian federal government, to support the design,
procurement, construction, and operation of the Commercial Demonstration Plant. To access the grant funding, the Group must meet the
operational and technical requirements of agreed funding milestones in a form acceptable to ARENA. This restricted cash represents the
grant funding received where the milestone criteria are yet to be satisfied and the funds are not yet freely available for use by the Group.
Note 6. Trade and other receivables
GST refundable
R&D tax rebate receivable
Consolidated
2023
$
2022
$
281,305
2,657,779
233,530
8,295,375
2,939,084
8,528,905
GST refundable
GST refundable relates to amounts receivable from the Australian Taxation Office (ATO) in relation to the GST portion paid or payable to
trade creditors, which are claimable as input tax credits. GST refunds are generally received from the ATO in the following month, and no
allowance for expected credit losses have been recognised in the period ended 30 June 2023 (2022: Nil).
R&D tax rebate receivable
R&D tax rebate receivable represents refundable tax offsets from the Australian Taxation Office (ATO) in relation to expenditure incurred
in the current year for eligible research and development activities. Research and development activities are refundable at a rate of 43.5%
for each dollar spent, subject to meeting certain eligibility criteria. Funds are expected to be received subsequent to the lodgement of the
income tax return and research and development tax incentive schedule for the current financial year.
Note 7. Other current assets
Prepayments
Deposits
Consolidated
2023
$
2022
$
150,859
10,598
298,219
14,200
161,457
312,419
33
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 8. Commercial Demonstration Plant
Commercial Demonstration Plant
Commercial Demonstration Plant – R&D offset
Commercial Demonstration Plant – restoration provision
Commercial Demonstration Plant – accumulated amortisation & impairment
Commercial Demonstration Plant – ARENA grant offset
Consolidated
2023
$
2022
$
29,543,133
(7,924,084)
592,983
(15,253,032)
(6,959,000)
25,654,430
(7,068,153)
510,000
(15,106,277)
(3,990,000)
-
-
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2021
Additions
R&D Offset
Impairment of assets
Balance at 30 June 2022
Additions
ARENA grant - release of contract liability
R&D Offset
Impairment of assets
Balance at 30 June 2023
Cost and grant
offset
$
Amortisation
and impairment
$
Total
$
5,501,361
16,673,069
(7,068,153)
-
15,106,277
3,971,687
(2,969,000)
(855,932)
-
(5,501,361)
-
-
(9,604,916)
-
16,673,069
(7,068,153)
(9,604,916)
(15,106,277)
-
-
-
(146,755)
-
3,971,687
(2,969,000)
(855,932)
(146,755)
15,253,032
(15,253,032)
-
The Commercial Demonstration Plant (CDP) 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 an intangible asset when the criteria under AASB 138 Intangible Assets are satisfied.
Impairment of the Commercial Demonstration Plant
At 30 June 2023, the Group performed its annual impairment test and identified indicators of impairment in line with AASB 136 Impairment
of Assets. At the test date, it was determined that due to the experimental nature of the CDP, future cashflows associated with operating
the CDP asset over its expected useful life of 3 years are not expected to exceed potential revenue from the sale of hydrogen and graphite
products. Key assumptions used in the value in use calculation are based on market rates for the cost of labour and feedstock required to
operate the CDP, along with potential sale price for hydrogen & graphite products.
Accordingly, the Group has concluded that the recoverable amount of the asset derived through its value in use did not exceed the carrying
amount, and an impairment charge was recognised for the difference.
34
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 9. Plant and equipment
Plant and equipment - at cost
Less: Accumulated depreciation
Net book value for the period ended
Consolidated
Balance at 1 July 2021
Additions
Balance at 30 June 2022
Additions
Balance at 30 June 2023
Note 10. Leases
Consolidated
2023
$
2022
$
74,909
(53,747)
54,244
(46,401)
21,162
7,843
Cost
$
Depreciation
$
Total
$
42,719
11,525
54,244
20,665
(29,272)
(17,129)
(46,401)
(7,346)
13,447
(5,604)
7,843
13,319
74,909
(53,747)
21,162
The Group has lease contracts for the occupation of various office and storage sites used in its operations. Leases of office space and
storage sites generally have lease terms of 2 to 5 years, and also include some extension options of up to 2 years. The Group is restricted
from assigning and sublease the leased assets. The Group’s obligations under the leases are secured by the lessor’s title to the leased
assets and the amounts held as collateral with lessors in the form of security deposits or bank guarantees issued.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Right-of-use assets
At 1 July
Additions
Depreciation expense
At 30 June
Lease liabilities
At 1 July
Additions
Accretion of interest
Payments
At 30 June
35
Consolidated
2023
$
2022
$
160,819
208,444
(103,913)
29,119
192,045
(60,345)
265,350
160,819
Consolidated
2023
$
2022
$
152,608
208,444
990
(100,780)
27,333
172,045
13,818
(60,588)
261,262
152,608
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 10. Leases (continued)
Lease liabilities classification
Current
Non-current
The maturity analysis of lease liabilities is disclosed in note 4.
The following are amounts recognised in the profit or loss:
Depreciation expense of right-of-use assets
Interest expense on lease liabilities
Expenses relating to short-term leases (included in administration expenses)
Consolidated
2023
$
2022
$
87,029
174,233
67,195
85,413
261,262
152,608
Consolidated
2023
$
2022
$
103,913
(990)
-
60,345
(13,818)
13,102
102,923
59,629
The Group had total cash outflows for leases of $100,780 in 2023 (2022: $60,588). The Group also had non-cash additions to right-of-use
assets and lease liabilities of $208,444 in 2023 (2022: 192,045). The future cash outflows relating to leases that have not yet commenced
are disclosed below.
The Group has several lease contracts that include extension options. These options are negotiated by management to provide flexibility
in managing the leased-asset portfolio and align with the Group’s business needs. Management exercises significant judgement in
determining whether these extension options are reasonably certain to be exercised.
Set out below are the undiscounted potential future rental payments relating to periods following the exercise date of extension options
that are not included in the lease term:
At 30 June 2022
Extension options expected not to be exercised
At 30 June 2023
Extension options expected not to be exercised
Within 5 years
More than five
years
Total
249,887
361,919
-
-
249,887
361,919
36
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 11. Trade and other payables
Accounts payable
Other payables
Trade and other payables are non-interest bearing and generally have a term of 30-90 days.
Note 12. Provisions
Current liabilities
Employee benefits
Non-current liabilities
Lease make good
Provision for restoration
Consolidated
2023
$
2022
$
3,627,453
1,518,840
2,511,287
641,613
5,146,293
3,152,900
Consolidated
2023
$
2022
$
254,360
170,545
20,000
592,983
20,000
510,000
612,983
530,000
867,343
700,545
Employee benefits
The provision for employee benefits represents annual leave and long service leave entitlements accrued by employees. It is measured
as the value of expected future payments for the services provided by the employees up to the reporting date.
Provision for restoration
The Group has entered into a Collaboration Deed with Water Corporation for the use of land and other resources at the Woodman Point
Water Resource Recovery (Site) facility to construct and operate the Commercial Demonstration Plant. At the termination date of the
Collaboration Deed, it imposes an obligation for the Group to decommission the CDP and restore the Site back to its original condition,
unless otherwise agreed with Water Corporation at a later stage.
The provision for restoration is measured at the discounted cost expected to restore the Site back to its original condition given the current
technologies available when the CDP is decommissioned.
At 30 June 2022
Additional provision recognised
At 30 June 2023
Provision for
restoration
510,000
82,983
592,983
Lease make good
The provision represents the present value of the estimated costs to make good the premises leased by the Group at the end of the
respective lease terms.
37
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 13. Contract liabilities
Current liabilities
Current Contract liabilities
Non-current liabilities
Non-current Contract liabilities
Consolidated
2023
$
2022
$
951,000
3,920,000
1,500,000
1,500,000
2,451,000
5,420,000
The Group has received grant funding from ARENA, an independent agency of the Australian federal government, to support the design,
procurement, construction, and operation of the Commercial Demonstration Plant. To access the grant funding, the Group must meet the
operational and technical requirements of agreed funding milestones in a form acceptable to ARENA. Contract liabilities represent the
grant funding received where the milestone criteria are yet to be satisfied, and the funds are not yet available to the Group.
The amount of contract liabilities are allocated by grant milestones relating to the practical completion and commencement of
commissioning for the Commercial Demonstration Plant, along with the completion of 12, 24 and 36 months of operations.
As the Group targets to achieve practical completion in FY2024, amounts attributable to Milestone 3.b are classified as current liabilities
and are expected to be released in the next 12 months from 30 June 2023. Amounts relating to operational Milestones are 4 – 6 classified
as non-current as the Group is required to fulfil a minimum of 12, 24 and 36 months of operations prior to being eligible for the application
of funds.
Note 14. Borrowings
Current borrowings
Consolidated
2023
$
2022
$
-
2,309,095
The Group had a $6.5 million Senior Secured Loan Facility with Mitchell Asset Management (MAM) in its capacity as trustee for the Mitchell
Asset Management Go-Innovation Finance Fund (ABN 88 447 520 706) which was fully discharged during the current financial year.
38
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 15. Convertible note liability and derivative
Convertible note liability
Convertible note derivative
Consolidated
2023
$
2022
$
-
-
-
1,357,002
1,493,793
2,850,795
At 30 June 2022, the Group had 2,666,667 notes on issue to AP Ventures Fund II GP LLP as unlisted, unsecured Convertible Notes with
a face value of $1 each.
All Notes were converted to shares during FY23.
The conversion feature of the Notes have been recognised at fair value as a convertible note derivative. The reconciliation for the
movements in the Convertible Note features is shown in Note 16 'Fair value measurement'.
Note 16. Fair value measurement
Fair value hierarchy
The following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on
the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3: Unobservable inputs for the asset or liability
Consolidated - 2023
Liabilities
Convertible Note Liability
Convertible Note Derivative
Total liabilities
Consolidated - 2022
Liabilities
Convertible Note Liability
Convertible Note Derivative
Total liabilities
Level 1
$
Level 2
$
Level 3
$
Total
$
Level 1
$
-
-
-
-
-
-
Level 2
$
-
-
-
-
-
-
-
-
-
-
-
-
Level 3
$
Total
$
1,357,002
1,493,793
2,850,795
1,357,002
1,493,793
2,850,795
There were no transfers between levels during the financial year.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that
is available for similar financial liabilities.
Valuation techniques for fair value measurements categorised within level 2 and level 3
The Convertible Note valuations methodology is based on the fair value of the conversion option (convertible note derivative), determined
using Black-Scholes valuation model.
39
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 16. Fair value measurement (continued)
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2021
Losses recognised in profit or loss
Interest recognised in profit or loss
Conversions
Balance at 30 June 2022
Losses recognised in profit or loss
Interest recognised in profit or loss
Conversions
Balance at 30 June 2023
Note 17. Issued capital
Convertible Note
Liability
$
Derivative
$
1,496,911
-
538,591
(678,500)
1,357,002
-
41,319
(1,398,321)
2,503,089
(354,463)
-
(654,833)
1,493,793
(225,446)
-
(1,268,347)
Total
$
4,000,000
(354,463)
538,591
(1,333,333)
2,850,795
(225,446)
41,319
(2,666,668)
-
-
-
Consolidated
2023
Shares
2022
Shares
2023
$
2022
$
Ordinary shares - fully paid
170,443,743
166,327,649
61,505,433
58,859,172
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
1 July 2021
8 October 2021
1 November 2021
1 November 2021
1 November 2021
14 December 2021
30 June 2022
Opening balance 1 July 2021
Share placement
Share purchase plan
Issue of shares on exercise of Series K Options
Issue of shares on exercise of Series M Options
Issue of shares on exercise of Series O Options
Issue of shares on exercise of Series L Options
Transfer of Series K options from options reserve
Transfer of Series M options from options reserve
Transfer of Series L options from options reserve
Transfer of Series O options from options reserve
Unsecured Convertible Note conversion
Share issue transaction costs, net of tax
Closing balance 30 June 2022
145,334,802
7,608,696
7,608,696
10,000
85,000
2,250,000
1,000,000
-
-
-
2,430,455
-
166,327,649
$0.92
$0.92
$1.20
$0.70
$0.00
$0.50
$0.00
$0.00
$0.00
$0.55
$0.00
40,774,126
7,000,000
7,000,000
12,000
59,500
1
500,000
4,212
17,080
136,657
2,520,000
1,333,333
(497,737)
58,859,172
Unsecured Convertible Note conversion
Unsecured Convertible Note conversion
Share issue transaction costs, net of tax
4 August 2022
26 September 2022
2,008,402
2,107,692
-
$0.66
$0.63
$0.00
1,333,333
1,333,334
(20,406)
Closing balance 30 June 2023
170,443,743
61,505,433
40
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 17. Issued capital (continued)
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.
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.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total
borrowings less cash and cash equivalents.
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 Group'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 Company is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk management
decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the previous financial reporting year.
Note 18. Reserves
Options reserve
Option reserve
The option reserve records items recognised as expenses on the valuation of share options.
Consolidated
2023
$
2022
$
1,630,088
2,585,976
41
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 18. Reserves (continued)
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Opening balance 1 July 2021
Options exercised - Series K
Options exercised - Series M
Options exercised - Series O
Options exercised - Series L
Options lapsed during the period - Series K
Options lapsed during the period - Series L
Existing options issued in prior periods vesting over multiple periods
Opening balance 1 July 2022
Options lapsed during the period - Series M
Options lapsed during the period - Series N
Options issued during the current year vesting over multiple periods
Options from prior periods lapsing
No of Options
17,050,000
(10,000)
(85,000)
(2,250,000)
(1,000,000)
(3,290,000)
(1,000,000)
-
9,415,000
(3,965,000)
(2,000,000)
7,182,890
-
Value
$
6,643,064
(4,212)
(17,081)
(2,520,000)
(136,657)
(1,385,908)
(136,657)
143,427
2,585,976
(635,038)
(543,422)
1,046,848
(824,276)
Closing balance 30 June 2023
10,632,890
1,630,088
Note 19. 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
Note 20. Income Tax
The major components of income tax expense for the years ended 30 June 2023 and 2022 are:
Statement of profit or loss
Current income tax:
Deferred tax:
Relating to the origination and reversal of temporary differences
Derecognition of current year temporary differences
Income tax expense/(benefit) reported in the statement of profit or loss
42
Consolidated
2023
$
2022
$
(48,993,181)
(12,205,599)
2,002,736
(34,100,920)
(16,414,826)
1,522,565
(59,196,044)
(48,993,181)
Consolidated
2023
$
2022
$
-
-
-
(838,517)
838,517
-
-
-
(2,393,503)
2,393,503
-
-
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 20. Income Tax (continued)
Reconciliation of tax expense and accounting profit multiplied by Australia's prima facie tax rate of 25% for 2023 and 2022:
Accounting loss before income tax
Tax on loss at Australian prima facie tax rate of 25%
Impact of tax rates applicable outside of Australia
Expenses eligible for R&D rebate
Share based payments
Other non-deductible expenses
R&D rebate received on eligible expenses
Movement in temporary deductible and taxable differences in statement of taxable income
At the effective income tax rate of 25% (2022: 25%)
Tax losses not brought/(brought) to account
Income tax expense/(benefit) reported in the statement of profit or loss
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit at 25%
2023
$
2022
$
(12,205,599)
(16,414,826)
(3,051,399)
(41,225)
1,380,925
261,712
4,865
(4,103,706)
705,300
35,857
2,799
(600,702)
(306,805)
838,517
(1,207,308)
1,207,308
-
2,393,503
-
(1,273,052)
1,273,052
-
2023
$
2022
$
15,610,972
10,978,655
3,902,743
2,744,664
Availability of tax losses
The availability of the tax losses for future periods is uncertain and the recoupment of available tax losses as at 30 June 2023 is contingent
upon the following:
(a)
(b)
(c)
the Company deriving future assessable income tax legislation of a nature and of an amount sufficient to enable the benefit from
the losses to be realised;
the conditions for deductibility imposed by income tax legislation continuing to be complied with;
there being no changes in income tax legislation which would adversely affect the Company from realising the benefit from the
losses.
Given the Company is currently in a loss making position, a deferred tax asset has not been recognised with regard to unused tax losses,
as it has not been determined that the company will generate sufficient taxable profit against which the unused tax losses can be utilised.
The corporate tax rate applicable to base rate entities is 25% in current year and then remains at 25% in future years. The Company
qualifies as a base rate entity as it has a turnover of less than $50 million and less than 80% of its assessable income is derived from base
rate entity passive income. The Company has measured its deferred tax balances, and any unrecognised potential tax benefits arising
from carried forward tax losses, based on the effective tax rate that is expected to apply in the year the temporary differences are expected
to reverse or benefits from tax losses realised.
43
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 21. Finance Costs
Convertible note interest
Fair Value (Gain)/Loss on convertible note derivative
Interest and other finance costs
Transaction costs related to borrowings
Consolidated
2023
2022
41,319
(225,446)
552,862
2,200
538,591
(354,463)
442,436
3,300
370,935
629,864
Note 22. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2023
$
2022
$
673,343
46,566
898,369
514,065
40,687
-
1,618,278
554,752
Neil Brodie is the Interim CFO and is not considered to be Key Management Personnel and is not involved in key management decisions.
Note 23. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by RSM Australia Partners, the auditor of the Group:
Audit services
Audit or review of the financial statements
Note 24. Contingent assets and liabilities
Consolidated
2023
$
2022
$
77,000
71,000
The Group has given bank guarantees as at 30 June 2023 of $297,542 (2022: $246,222) to various landlords and Western Power in
association with the Commercial Demonstration Plant.
44
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 25. 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
More than five years
Construction of Commercial Demonstration Plant
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
Later than 1 year but not later than 5 years
More than five years
Consolidated
2023
$
2022
$
100,000
-
-
61,896
-
-
100,000
61,896
2,251,460
-
-
2,861,723
-
-
2,251,460
2,861,723
Note 26. Related party transactions
Key management personnel
Disclosures relating to key management personnel are set out in note 22 and the remuneration report included in the Directors' report.
Transactions with related parties
On 12th April 2021, AP Ventures Fund II GP LLP were issued 2,250,000 options to acquire 2,250,000 ordinary Hazer share for a collective
nominal exercise price of $1 for all options. This option was exercised in December 2021. On 12th April 2021, AP Ventures Fund II GP
LLP were also issued with 4,000,000 unlisted, unsecured Convertible Notes with a face value of $1 each. By 30 June 2023, all convertible
notes were converted.
Receivable from and payable to related parties
There were no amounts receivable from related parties at the current or previous reporting period.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
45
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 27. Reconciliation of loss after income tax to net cash from/(used in) operating activities
Loss after income tax expense for the year
Adjustments for:
Share-based payments
Depreciation
Transaction costs related to borrowings
Finance costs
Impairment expense
Change in operating assets and liabilities:
Other current assets
Trade and other payables
Employee benefits
Trade and other receivables
Net cash used in operating activities
Note 28. Share based payments
Consolidated
2023
$
2022
$
(12,205,599)
(16,414,826)
1,046,848
111,258
2,200
359,959
146,755
150,963
2,689,327
83,815
6,337,960
143,427
77,474
-
622,145
9,604,916
(66,089)
715,270
5,867
74,441
(1,276,514)
(5,237,375)
For the year ended 30 June 2023:
Set out below are summaries of the movements of options granted to key management personnel, employees and contractors of the
Group:
Grant date
Expiry date
Exercise
price
Balance at the
start of the year
Granted
Exercised/
Quoted as
Listed options
Expired/
forfeited/ other
Balance at the
end of the year
29/08/2018
14/11/2018
14/11/2018
18/10/2019
18/10/2019
01/12/2020
24/11/2022
24/11/2022
01/01/2023
30/06/2023
30/06/2023
30/06/2024
30/06/2023
30/06/2024
30/06/2024
22/12/2027
22/12/2027
01/01/2028
$0.70
$0.70
$0.90
$0.70
$0.90
$0.90
$0.00
$0.00
$0.00
500,000
1,915,000
2,000,000
1,550,000
1,450,000
2,000,000
-
-
-
-
-
-
-
-
-
4,100,000
1,215,000
1,867,890
9,415,000
7,182,890
-
-
-
-
-
-
-
-
-
-
(500,000)
(1,915,000)
-
(1,550,000)
-
(2,000,000)
-
-
-
-
-
2,000,000
-
1,450,000
-
4,100,000
1,215,000
1,867,890
(5,965,000)
10,632,890
46
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 28. Share based payments (continued)
For the year ended 30 June 2022:
Set out below are summaries of the movements of options granted to key management personnel, employees and contractors of the
Group:
Grant date
Expiry date
Exercise
price
Balance at the
start of the year
Granted
Exercised/
Quoted as
Listed options
Expired/
forfeited/ other
Balance at the
end of the year
06/04/2017
04/12/2017
29/08/2018
14/11/2018
14/11/2018
14/11/2018
18/10/2019
18/10/2019
01/12/2020
12/04/2021
31/12/2021
31/12/2021
30/06/2023
30/06/2022
30/06/2023
30/06/2024
30/06/2023
30/06/2024
30/06/2024
12/04/2026
$1.20
$1.20
$0.70
$0.50
$0.70
$0.90
$0.70
$0.90
$0.90
$1.00 1
1,000,000
2,300,000
500,000
2,000,000
2,000,000
2,000,000
1,550,000
1,450,000
2,000,000
2,250,000
17,050,000
-
-
-
-
-
-
-
-
-
-
-
-
(10,000)
-
(1,000,000)
(85,000)
-
-
-
-
(2,250,000)
(1,000,000)
(2,290,000)
-
(1,000,000)
-
-
-
-
-
-
-
-
500,000
-
1,915,000
2,000,000
1,550,000
1,450,000
2,000,000
-
(3,345,000)
(4,290,000)
9,415,000
1 On 12th April 2021, AP Ventures Fund II GP LLP were issued 2,250,000 options to acquire 2,250,000 ordinary Hazer share for a collective
nominal exercise price of $1 for all options. The options will expire 5 years from the date of their issue and cannot be exercised in the first
12 months following issue of the options.
Set out below are the options exercisable at the end of the financial year:
Option series
Grant date
Expiry date
Series M
Series M
Series N
Series M
Series N
Series N
Series P
Series Q
Series R
29/08/2018
14/11/2018
14/11/2018
18/10/2019
18/10/2019
01/12/2020
24/11/2022
24/11/2022
01/01/2023
30/06/2023
30/06/2023
30/06/2024
30/06/2023
30/06/2024
30/06/2024
22/12/2027
22/12/2027
01/01/2028
2023
Number
2022
Number
-
-
2,000,000
-
1,450,000
-
4,100,000
1,215,000
1,867,890
500,000
2,000,000
2,000,000
1,465,000
1,450,000
2,000,000
-
-
-
10,632,890
9,415,000
1
1
1
1 None of the options issued have vested at the reporting date and are vesting over a period.
The weighted average remaining contractual life of options outstanding at the end of the financial year was 3.36 years (2022: 1.58).
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
%
Risk-free
Dividend yield
%
interest rate
%
Fair value at
grand date
24/11/2022
01/01/2023
22/12/2027
01/01/2028
$0.69 $0.001
$0.57 $0.001
75.00%
75.00%
-
-
3.29%
3.63%
3,088,583
502,649
47
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 28. Share based payments (continued)
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
Note 29. Interests in subsidiaries
Consolidated
2023
$
2022
$
898,369
148,479
-
143,427
1,046,848
143,427
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiaries in
accordance with the accounting policy described in note 1:
Name
Principal place of business /
Country of incorporation
Hazer Group Canada Limited
Canada
Ownership interest
2022
2023
%
%
100.00%
-
Note 30. Earnings per share
Loss after income tax
Consolidated
2023
$
2022
$
(12,205,599)
(16,414,826)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
169,754,277
158,099,058
Basic earnings per share
Diluted earnings per share
Cents
Cents
(7.19)
(7.19)
(10.38)
(10.38)
The Company has 10,632,890 (2022: 9,415,000) options at 30 June 2023, which could potentially dilute basic earnings per share in the
future but were not included in the calculation of diluted earnings per share because they are anti-dilutive for the period presented.
Note 31. R&D tax rebate
Management applied judgement to estimate the amount of Research & Development rebate (R&D rebate) available to the Company for
the financial year ended 30 June 2023 to be $2,657,779: $254,970 in relation to the capitalised CDP expenditure and $2,402,809 in relation
to other expensed R&D costs.
48
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 32. Events after the reporting period
On 7th August 2023, the Company executed binding agreements with Innovation Structured Finance Co.,LLC for a $1.8 million 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. The loan has been drawn down in one tranche and has a maturity date of 31 December 2023, however can be early settled
at any time by Company without penalty. Innovation Structured Finance Co.,LLC will hold security over Hazer’s FY23 R&D Tax Incentive
rebate which is estimated to fully clear the loan and any associated costs on receipt before loan maturity date.
On 31st July 2023, the Company announced a non-renounceable rights issue to eligible shareholders of 3 New shares for every 16 Shares
held at an issue price of $0.48 per New Share with 1 attaching New Option for every 2 New Shares allotted. Each New Option is exercisable
at $0.75 per Share and expires on 28 February 2025. The Offer was lead managed and partially underwritten by Viriathus Capital Pty
Ltd. The offer closing date was Friday 18 August 2023 with funds raised at signing date totaling $14.7 million.
The proceeds from this raise are to be principally used towards:
●
●
●
CDP related operating expenditure including operational performance testing and post start up R&D/reactor operating performance
diagnostics;
Advancing current commercial projects in North America, Japan and France, and pursuing further opportunities in Asia and North
America;
Estimated costs of the Offer and working capital.
Note 33. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Other comprehensive income for the year, net of tax
Total comprehensive loss
Parent
2023
$
2022
$
(12,205,599)
(16,414,826)
-
-
(12,205,599)
(16,414,826)
49
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2023
Note 33. Parent entity information (continued)
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Parent
2023
$
2022
$
12,378,863
26,869,248
286,623
168,662
12,665,486
27,037,910
6,438,793
12,470,530
2,287,216
2,115,413
8,726,009
14,585,943
3,939,477
12,451,967
61,505,433
1,630,088
(59,196,044)
58,859,172
2,585,976
(48,993,181)
3,939,477
12,451,967
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
Guarantees for the parent are the same as for the Group.
Contingent liabilities
Contingent liabilities for the parent are the same as for the Group.
Capital commitments - Property, plant and equipment
Capital commitments for the parent are the same as for the Group.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except for the following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
50
Hazer Group Limited
Directors' declaration
For the year ended 30 June 2023
In the Directors' opinion:
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations
Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards 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 Group's financial position as at 30 June 2023 and of its
performance for the financial year ended on that date; and
●
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Tim Goldsmith
Chairman
23 August 2023
51
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
RSM Australia Partners
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) and its subsidiaries (Group), which
comprises the statement of financial position as at 30 June 2023, 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 Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2023 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 Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (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 (KAM) 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
R&D tax rebate
Refer to Note 31 in the financial statements
The Group claims a refundable tax offset for eligible
expenditure under the research and development
(R&D) tax incentive scheme.
Management appointed an independent expert to
perform a detailed review of the Group’s total
research and development expenditure to determine
the potential claim under the R&D tax incentive
legislation.
The Group recognises the R&D tax rebate income on
an accrual basis. The receivable at year-end for the
incentive is $2,657,779 representing the estimated
claim for the activity for the year ended 30 June
2023.
Our audit procedures included:
Obtaining the R&D rebate calculations prepared by
management’s expert and engaging a R&D Tax
Expert to assess the methodology and determine
the reasonableness of the estimate.
Reviewing
the expenses applied against
the
eligibility criteria of the R&D tax incentive scheme to
assess whether the expenses included in the
estimate were appropriate to meet the eligibility
criteria.
Assessing the eligible expenditure used to calculate
in
to determine whether
the estimate
accordance with accounting records.
is
it
This is a key audit matter due to the size of the accrual
and a high degree of judgement and interpretation of
the R&D tax legislation required by management to
assess the eligibility of the R&D expenditure under the
scheme.
Agreeing a sample of individual expenditure items
included in the estimate to underlying supporting
documentation to determine that they have been
appropriately recognised in the accounting records
and that they are eligible expenditures.
Reviewing the appropriateness of the disclosures in
the financial statements.
Share-based payment
Refer to Note 28 in the financial statements
In accordance with AASB 2 Share-based Payment,
the Group
recognised share-based payment
expenses from the issue of options:
5,315,000 options with market
vesting
conditions to key management personnel.
1,867,890 options with market
vesting
conditions to employees.
Management used a valuation model to value these
options and estimated the length of the expected
vesting period.
We determined this to be a key audit matter due to
the material amount of the share-based payment and
the significant judgement involved in assessing the
fair value of the transactions in accordance with
AASB 2 Share-based Payment.
Our audit procedures included:
Obtaining an understanding of the key terms and
conditions of the options issued;
Verifying the completeness of options issued at the
reporting date;
Obtaining
the valuation models prepared by
management and assessing whether the models
were appropriate for valuing the options;
Assessing
the mathematical accuracy of
the
computation and the apportioned expense over the
vesting period;
Challenging
the
key
assumptions used by management to value the
options; and
reasonableness
of
Assessing 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 Group’s annual report for the year ended 30 June 2023, 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 Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or 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 2023.
In our opinion, the Remuneration Report of Hazer Group Limited, for the year ended 30 June 2023, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 23 August 2023
ALASDAIR WHYTE
Partner
Hazer Group Limited
Shareholder information
For the year ended 30 June 2023
ASX Additional Information
The Company’s ordinary shares are quoted as ‘HZR’ on ASX.
The shareholder information set out below was applicable as at 31 July 2023.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Number of
ordinary
shares
Number of
holders of
ordinary
shares
2,891,753
16,476,315
16,343,483
64,778,246
69,953,946
4,405
6,357
2,087
2,299
186
170,443,743
15,334
1,557,211
3,025
56
Hazer Group Limited
Shareholder information
For the year ended 30 June 2023
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
BNP PARIBAS NOMS PTY LTD DRP
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
CITICORP NOMINEES PTY LIMITED
MR JAMIE PHILLIP BOYTON
OOFY PROSSER PTY LTD
POINT AT INFINITY PTY LTD
MR ADRIAN JOHN MCTIERNAN
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
UBS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
RANGEGROVE PTY LTD
SHARESIES NOMINEE LIMITED
MRS LORRAINE ALYSSA GOLDSMITH
THE UNIVERSITY OF WESTERN AUSTRALIA
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
JOE BOY & MIA MOO PTY LTD
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
SUPERHERO SECURITIES LIMITED
SHERKANE PTY LTD
MOLLYGOLD SUPERANNUATION PTY LTD
Unquoted equity securities
Options over ordinary shares - Series N
Options over ordinary shares - Series P
Options over ordinary shares - Series Q
Options over ordinary shares - Series R
Ordinary shares
Number held
% of total
shares
issued
10,657,646
6,439,683
3,846,257
2,832,678
1,772,365
1,512,937
1,300,000
1,271,364
1,175,064
1,163,749
1,161,549
1,096,361
1,078,237
996,147
712,000
651,110
606,979
581,276
503,162
450,000
6.25
3.78
2.26
1.66
1.04
0.89
0.76
0.75
0.69
0.68
0.68
0.64
0.63
0.58
0.42
0.38
0.36
0.34
0.30
0.26
39,808,564
23.35
Number
on issue
Number
of holders
-
3,450,000
4,100,000
1,215,000
1,867,890
10,632,890
-
4
1
3
20
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The unquoted equity securities were issued to key management personnel, employees and contractors of the Company.
Substantial holders
Substantial holders in the Company are set out below:
BNP PARIBAS NOMS PTY LTD DRP
57
Ordinary shares
Number held
% of total
shares
issued
10,657,646
6.25
Hazer Group Limited
Shareholder information
For the year ended 30 June 2023
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have
one vote.
There are no other classes of equity securities.
On-market Buy-back
There is no current on-market buy-back of the Company’s securities in place.
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