Hazer Group Limited
Appendix 4E
Preliminary final report
1. Group details
Name of entity:
Hazer Group Limited
ABN:
40 144 044 600
Reporting period:
For the year ended 30 June 2024
Previous period:
For the year ended 30 June 2023
2. Results for announcement to the market
$
Revenues from ordinary activities
up
40% to
3,794,229
Loss from ordinary activities after tax
up
56% to
(19,067,366)
Loss for the year
up
56% to
(19,067,366)
Dividends
No dividend has been declared.
Comments
The loss for the Group after providing for income tax amounted to $19,067,366 (30 June 2023: $12,205,599).
Revenues from ordinary activities increased by 40% to $3,794,229 due to a higher R&D tax income accrual than prior year. The driver for
the higher accrual is increased spend to achieve construction completion of the Company's Commercial Demonstration Plant (CDP) and
R&D salaries and wages and operating consultants during plant commissioning and testing during FY24.
Loss from ordinary activities after tax increased to $19,067,366 in 2024 (2023: $12,205,599): primarily due to the increased spending on
the Commercial Demonstration Plant (CDP) construction during the year, with $3,570,610 subsequently impaired and expensed, compared
to the prior year's impairment in 2023 of $146,755. 2023 impairment was also lower due to timing of ARENA grand and R&D offset. Along
with higher than prior year spending on consulting and research expenses and employee benefits associated with plant commissioning and
testing.
Since commencing the CDP the Group has spent $36,887,437 to the end of 30 June 2024 (2024: $6,751,321; 2023; $3,971,686; 2022:
$16,673,069 2021: $8,439,490 and 2020: $1,051,871) and offset: $10,153,795 in R&D rebates (FY24 $1,753,569; FY23 $731,112; FY22
$7,669,114), realised in the year on commencement of the CDP's operations; and $7,910,000 from a grant received from the Australian
Renewable Energy Agency (ARENA) (2024: $951,000; 2023: $2,969,000, 2022: Nil, 2021: $3,990,000). The net costs incurred on the CDP
to the end of 30 June 2024 of $18,823,642 ($36,887,437 of total costs, less $10,153,795 for R&D offset, less $7,910,000 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 2024 included share based payments associated with options issued to management and employees of
$1,626,869 (2023: $1,046,848) and depreciation and amortisation expenses of $115,430 (2023: $111,258).
The Group’s total operating expenses increased by 29% to $17,548,686 (2023: $13,606,408), and comprise; increased employee benefits
expenditure of $8,144,699 (2023: $4,754,006) associated with additional technical staff engaged in research and development activities
and increases in consulting and research costs $6,838,097 (2023: $5,670,814) due to CDP Operations and the progression of the Canadian
project; .
The net operating cash outflow for the year was $15,815,886 (2023: $1,276,514). Primary operating cash outflows for 2024 were for
payments to suppliers and employees of $18,822,926 (2023: $11,064,599). Cash inflows in 2024 came from the receipt of the research and
development tax incentive rebate of $2,536,015 (2023: $9,448,880). 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 $7,497,658 (2023: $4,497,509) during the year related to capital costs associated with the Hazer CDP and future
reactor scale up development.
Hazer Group Limited
Appendix 4E
Preliminary final report
Financing cash inflows increased to a net inflow of $26,856,769 (2023: net inflow $2,975,579). Funds were generated during the current
financial year from: the issue of 59,432,927 shares. In 2024 there were proceeds from borrowings of $1,759,000 (2023: $2,000,000) then
full repayment of this facility of $1,850,568 (2023: payment of $4,852,193).
The Group’s cash and cash-equivalent were $12,821,547 at 30 June 2024 (2023: $9,278,322) and net assets at 30 June 2024 were
$13,570,549 (2023: $3,939,477).
3. Control gained over entities
Not applicable.
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 2024 is attached.
8. Signed
Signed ___________________________
Date: 28 August 2024
Tim Goldsmith
Chairman
Hazer Group Limited
ABN 40 144 044 600
Annual Report – 30 June 2024
Hazer Group Limited
Corporate directory
For the year ended 30 June 2024
1
Directors
Tim Goldsmith (Non-Executive Chairman)
Danielle Lee (Non-Executive Director)
Andrew Hinkly (Non-Executive Director)
Jack Hamilton (Non-Executive Director)
Glenn Corrie (Executive Director)
Company Secretary
Joan Dabon
Registered office
Level 9, 99 St Georges Terrace
Perth WA 6000
Principal place of business
Level 9, 99 St Georges Terrace
Perth WA 6000
Share register
Automic Group
Level 5, 191 St Georges Terrace
Perth WA 6000
Auditor
RSM Australia Partners
Level 32, Exchange Tower, 2 The Esplanade
Perth WA 6000
Solicitors
Hopgood Ganim
Level 27, 77 St Georges Terrace
Perth WA 6000
Bankers
Commonwealth Bank of Australia
95 William Street
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
Hazer Group Limited
Chairman's Letter
For the year ended 30 June 2024
2
Dear Shareholder
On behalf of the Board, I am pleased to present the 2024 Annual Report to shareholders.
The development of the Commercial Demonstration Plant (CDP) is fundamental in commercialising and showcasing the
scalability of our Hazer Process, a world leading methane pyrolysis technology for the low emission and cost-effective
production of clean hydrogen and graphite.
This has been an exciting year therefore as Hazer concluded plant construction and commissioning and achieved first
production of hydrogen and graphite on commencement of hot operations in early H2. A transformational milestone for our
technology and company.
As part of our phased approach to scaling production the team has been safely executing the CDP planned performance test
program to demonstrate commercial readiness of Hazer’s proprietary technology. The CDP has progressively increased
hydrogen and graphite production successfully recently completing over 180 hours of hot operations, the fourth test run of the
program.
This most recent performance test run has further demonstrated the scalability of the Hazer technology and the following key
objectives were achieved.
•
Online injection of catalyst into reactor bed;
•
Effective separation of solids from product gas stream; and
•
Stable system operating conditions.
Importantly, the Operations and Technology teams have managed to maintain stable operation despite encountering external
challenges, including a brief grid power outage and gas supply interruptions. While some challenges are expected for a first-
of-a-kind facility, the core fundamentals of Hazer’s technology prove, once again, to be strong and scalable. This underpins
the robustness and stability of the plant, equipment and operating procedures, as well as the strength of these teams.
The MKII prototype reactor (which utilises improved technology developed by Hatch in collaboration with Hazer) and back-up
heat exchanger are also largely complete with materials being stored locally at Hazer’s storage facility ahead of the next stage
of reactor development testing.
Focusing on demonstrating continuous operations at a commercial scale has assisted with securing Hazer’s global commercial
project portfolio.
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 and R&D program, and the positive impact of our flagship
CDP.
We have also advanced important commercial projects during this financial year. Firstly, we have signed a binding Project
Development Agreement (PDA) with Fortis BC in British Columbia, Canada for a plant with capacity to produce up to 2,500tpa
of hydrogen, a scale-up of 25 times on the CDP (~100tpa of hydrogen). Under the terms of the PDA, FortisBC will hold 100%
equity ownership and assume the role of project lead developer and operator of the facility. For Hazer, this is a significantly
improved and de-risked position when compared to the previously anticipated joint operatorship arrangement, as announced
on 11 February 2022, as it aligns with Hazer’s ‘capex lite’ business model.
In Japan, Chubu Electric and Chiyoda have completed the feasibility study for the development of a Hazer facility in the
Nagoya area in Japan (refer announcement dated 11 April 2023). The study results support the technical and commercial
viability of the project.
Also in Japan, during the year Hazer and Mitsui advanced their collaboration extending our MOU relating to the joint
investigation of the potential markets for Hazer graphite. Following detailed evaluation and testing, the parties have received
positive market feedback and successfully identified several potential customers showing initial interest in Hazer graphite.
In May 2024 the scope of our existing collaboration with ENGIE was extended to enable the joint pursuit of project opportunities
outside the European Union, as well as specific initiatives related to potential offtake of Hazer graphite. Parties will continue
to explore hydrogen offtake opportunities for the H2Montoir project
Hazer Group Limited
Chairman's Letter
For the year ended 30 June 2024
3
Most recently, the Company entered into a non-binding Memorandum of Understanding to collaborate on the integration of
Hazer’s hydrogen production technology into POSCO’s low-carbon steel production (refer announcement dated 31 May 2024).
POSCO and Hazer will also assess the application of Hazer’s low emissions graphite product in various parts of the steel
making process, as well as a market investigation into the applications of Hazer graphite outside of steel. This project and
collaboration has the potential to be a large-scale opportunity for Hazer in the long-term.
The company continued to strengthen the team throughout the year welcoming Mr Tim Forbes as Chief Technology Officer
(CTO) of Hazer, effective 20 July 2023. Tim brings extensive global technology experience from ExxonMobil and Fortescue
Future Industries. In addition, we appointed Mr Neil Brodie as Chief Financial Officer (CFO) effective 1 September 2023. Neil
had acted as Hazer Group’s Interim CFO since December 2022 and has over 25 years of finance, strategic planning, and
commercial experience in energy-related industries, including senior roles in the private and public sector. Early into the 2025
financial year we appointed Tom Coolican as Chief Operating Officer (COO). Tom is an accomplished executive with over 25
years of energy industry experience and brings extensive leadership and operating experience from senior roles with GR
Production Services, Jadestone Energy, ENI and Woodside.
During the year, the Company successfully completed two non-renounceable pro-rata entitlement offers raising $29.1 million
(before share issue costs). These proceeds strengthen Hazer’s funding position and complements other sources of funding
received during the year: such as the FY23 Research and Development rebate and ARENA grant funding milestones. Funds
raised support Hazer’s next phase of growth including operational performance and testing for the CDP, to advance Hazer’s
existing commercial projects and to pursue further opportunities for Hazer technology development.
Finally, we continue to be grateful to our shareholders, for your ongoing support throughout 2024. 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
Hazer Group Limited
Managing Director's Report
For the year ended 30 June 2024
4
COMMERCIAL DEMONSTRATION PLANT
The Hazer Commercial Demonstration Project (‘CDP’) is the first fully integrated demonstration of Hazer’s technology, a
ground-breaking milestone for our company 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 processes biogas produced from the treatment of wastewater at the Woodman Point Water Resource
Recovery Facility to produce hydrogen and graphitic carbon, resulting in a carbon negative process.
In November 2023, the construction and commissioning of the CDP was completed. During January 2024, first hydrogen and
graphite production was achieved at the CDP through commencement of hot operations as part of the planned performance
test program to demonstrate commercial readiness of the Hazer technology.
The CDP test program outlines a series of specific tests and target data to progressively ramp up equipment and collect key
performance data. Each step involves operating the plant in line with the specified test conditions followed by a subsequent
scheduled shutdown to facilitate inspection of key equipment, gathering of process data and preparation for subsequent runs.
The two extended performance test runs during the year continue to build on demonstrating the fundamentals of Hazer’s
technology for a commercial demonstration scale. The Company confirms key objectives were achieved with highlights as
follows:
•
hydrogen and graphite production consistent with test plan expectations;
•
significant increase to Hazer’s graphite inventory; and
•
online injection of catalyst into the reactor
The CDP test program is progressing to schedule. Minor improvements to the CDP have been implemented, including design
modifications to the reactor feed distributor and controls to ensure plant feed rates required by the test program are maintained.
Hazer also continues to showcase the facility to key visitors and to prospective domestic and international customers as the
team works towards completing the extensive test program during 2024
The next generation reactor, capable of scaling up the technology to commercial levels in excess of 20ktpa hydrogen
production, and back-up heat exchanger are largely complete with materials being stored locally at Hazer’s storage facility
ahead of the next stage of reactor development testing. The next generation reactor is a prototype for the commercial scale
projects, including FortisBC in Canada, and will be tested at the CDP in 2025 as part of de-risking the project and providing
early data to validate the commercial design.
COMMERCIAL OPPORTUNITIES AND PARTNERSHIPS
As the planned performance test program advances, Hazer continues to collect a wide range of valuable data which is being
utilized to progress commercial discussions with existing partners as projects progress towards investment decisions, as well
as creating a dataset being used to showcase the capabilities of the technology to potential new customers.
Canada Project
Hazer and FortisBC Energy Inc (“FortisBC”) entered into a binding Project Development Agreement (“PDA”) to pursue the
development of a hydrogen production facility in British Columbia, Canada, based on Hazer’s technology and with a design
capacity of up to 2,500 tonnes per annum (“tpa”) of clean hydrogen.
Under the terms of the PDA, FortisBC will hold 100% equity ownership and assume the role of project lead developer and
operator of the facility. For Hazer, this is a significantly improved and de-risked position when compared to the previously
anticipated joint operatorship arrangement, as announced on 11 February 2022, as it aligns with Hazer’s ‘capex lite’ business
model.
Hazer will also receive payment for Early Project Development Work associated with leading the engineering activities relating
to the core Hazer technology components. Under the engineering services agreement, FortisBC will pay Hazer for engineering
and design work as well as for support for any regulatory project development activities carried out. This arrangement delivers
an early revenue stream to Hazer through FEED and also removes large capital expenditure obligations for the Company.
A key principle of the technology license agreement is the payment of license fees for using the Hazer Process. The license
fees to be received by Hazer will be determined using a sliding scale model based on size of the facility, production of hydrogen
and graphite, and other relevant factors. The amount of the license fees will be negotiated with FortisBC during definitive
commercial agreement discussions throughout the year.
Hazer Group Limited
Managing Director's Report
For the year ended 30 June 2024
5
The initial phase of the Front-End Engineering and Design (“FEED”) study, carried out by Wood Plc, have now been completed
and the main components of the design basis for the 2,500 tpa plant are in place to enable the project to progress into the
next phase of development. The FEED study will be refined and updated following selection of the plant site. The fully
integrated FEED study is targeted for completion in late 2024 and together with definitive commercial agreements will form
the basis for submission of the project application to the regulator in 1H 2025.
The Final Investment Decision (“FID”) window is targeted as early as mid-2025 assuming third-party commercial offtake for
the hydrogen which will simplify the regulatory approval process.
Chubu Electric and Chiyoda project
In line with the original plan and schedule, Chubu Electric and Chiyoda have completed the feasibility study for the
development of a Hazer facility in the Nagoya area in Japan (refer announcement dated 11 April 2023). The study results
support the technical and commercial viability of the project. Next steps will include graphite sample testing to validate the
applicability of using Hazer graphite in the manufacturing of asphalt and/or concrete. Concurrently, Chubu Electric is exploring
project co-funding options and planning to seek senior management approval to progress the project to pre-FEED/FEED
stages.
Mitsui
The ongoing collaboration with Mitsui relating to the market investigation of Hazer graphite continues to provide valuable
insights in the potential applications and offtakers. Mitsui has identified a long-list of potential offtakers in both the steel making
and chemicals market segments. Interested parties will be provided with representative graphite samples from the CDP for
qualification testing.
In addition to the collaboration with Mitsui, Hazer is actively engaged in discussions with a number of potential offtakers for its
graphite across key strategic markets of North America, Europe and the Asia Pacific region.
ENGIE relationship extended
The scope of existing collaboration with ENGIE has been extended to enable the joint pursuit of project opportunities outside
the European Union, as well as specific initiatives related to potential offtake of Hazer graphite. Parties will continue to explore
hydrogen offtake opportunities for the H2Montoir project. The new Memorandum of Understanding is valid until 30 April 2026.
Collaboration with POSCO
POSCO and Hazer signed a non-binding Memorandum of Understanding to collaborate on the integration of Hazer’s hydrogen
production technology into POSCO’s low-carbon steel production. POSCO and Hazer will also assess the application of
Hazer’s low emissions graphite product in various parts of the steel making process, as well as a market investigation into the
applications of Hazer graphite outside of steel (refer announcement dated 31 May 2024).
POSCO, headquartered in Pohang, Korea, is the world’s sixth largest steel producer. It operates the world’s two largest steel
works, located at Pohang and Gwangyang. POSCO has announced its plans to achieve carbon neutrality by 2050, these
plans are centred on POSCO’s propriety HyREX® technology for hydrogen reduced iron making.
The initial capacity is expected to be in line with Hazer’s technology up-scaling strategy. The exact capacity will be determined
during the evaluation of the integration of the Hazer technology with POSCO’s low carbon steel making process.
2024 was an important year for Hazer to bring our technology online at demonstration plant level elevating the technology
readiness and preparing it for commercialisation. Concurrently, the demand for our technology has increased and we continue
to engage with a array of potential customers that view the decarbonisation potential of Hazer’s technology. I’m confident we
have a strong foundation for growth and look forward to building on this momentum and driving forward our commercialisation
strategy unlocking the true underlying value for our company for shareholders.
I would like to thank all of the staff, shareholders and other stakeholders for your support during the year.
Mr Glenn Corrie
Managing Director and Chief Executive Officer
Hazer Group Limited
Directors' report
For the year ended 30 June 2024
6
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 2024.
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
●
Glenn Corrie
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
The loss for the Group after providing for income tax amounted to $19,067,366 (30 June 2023: $12,205,599).
Revenues from ordinary activities increased by 40% to $3,794,229 due to a higher R&D tax income accrual than prior year. The driver for
the higher accrual is increased spend to achieve construction completion of the Company's CDP and R&D salaries and wages and operating
consultants during plant commissioning and testing during FY24.
Loss from ordinary activities after tax increased to $19,067,366 in 2024 (2023: $12,205,599): primarily due to the increased spending on
the CDP construction during the year, with $3,570,610 subsequently impaired and expensed, compared to the prior year's impairment in
2023 of $146,755. Prior year impairment was also lower due to the timing of the ARENA grant and R&D offset. Along with higher than prior
year spending on consulting and research expenses and employee benefits associated with plant commissioning and testing.
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
●
CDP related operating expenditure including operational performance testing and post start up R&D/reactor operating performance
diagnostics;
●
Advancing current commercial projects in Australia, Canada, France, North America, Japan and Korea, and pursuing further
opportunities elsewhere;
Other than the above, no other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly
affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
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.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Hazer Group Limited
Directors' report
For the year ended 30 June 2024
7
Information on Directors
Name:
Tim Goldsmith
Title:
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 taken over 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:
Non-Executive Director of Pantera Resources Ltd (ASX: PFE)
Former directorships (last 3 years):
Chairman of Angel Seafood Holdings Limited (ASX: AS1)
Non-Executive Director of Costa Group Holdings Ltd (ASX: CGC)
Special responsibilities:
Member of the Audit and Risk Committee and Member of Remuneration and Nomination
Committee
Interests in shares:
2,549,071
Interests in options:
910,418
Contractual rights to shares:
None
Name:
Danielle Lee
Title:
Non-Executive Director (Independent Director)
Length of service:
Director since 16 September 2015
Qualifications:
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
Experience and expertise:
Danielle is an experienced company director and qualified lawyer with over 25 years’ experience
providing corporate advisory and governance services to ASX listed and other companies across
broad range of industries. Danielle brings skills and insights in corporate governance, legal risk
management and capital markets.
Other current directorships:
Non-Executive Director of Rare Foods Australia Ltd (ASX: RFA)
Former directorships (last 3 years):
Non-Executive Director of Openn Negotiation Ltd (ASX: OPN)
Special responsibilities:
Chair of Audit and Risk Committee and Member of Remuneration and Nomination Committee
Interests in shares:
910,597
Interests in options:
433,996
Contractual rights to shares:
None
Hazer Group Limited
Directors' report
For the year ended 30 June 2024
8
Name:
Andrew Hinkly
Title:
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:
None
Former directorships (last 3 years):
None
Special responsibilities:
None
Interests in shares:
Indirect interest, as Managing Partner of AP Ventures, 10,445,901 shares1
Interests in options:
824,6761
Contractual rights to shares:
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. These options was exercised in
December 2021. On 12th April 2021, AP Ventures Fund II GP LLP were also issued 4,000,000 unquoted, unsecured Convertible Notes with
a face value of $1 each. On 30 June 2024, 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:
Jack Hamilton
Title:
Non-Executive Director (Independent Director)
Length of service:
Director since 1 November 2021
Qualifications:
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).
Experience and expertise:
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:
Non-Executive Director of Iondrive Ltd (ASX: ION)
Former directorships (last 3 years):
Chairman of AnteoTech (ASX ADO)
Non-Executive Director with Calix Ltd (ASX CXL)
Special responsibilities:
Chair of Remuneration and Nomination Committee and member of the Audit and Risk Committee
Interests in shares:
663,265
Interests in options:
586,794
Contractual rights to shares:
None
Hazer Group Limited
Directors' report
For the year ended 30 June 2024
9
Name:
Glenn Corrie
Title:
Managing Director and Chief Executive Officer
Length of service:
Chief Executive Officer since 10 October 2022 and Managing Director since 3 April 2023
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:
None
Former directorships (last 3 years):
Nil
Special responsibilities:
Managing Director
Interests in shares:
628,660
Interests in options:
4,327,395
Contractual rights to shares:
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
Joan Dabon - appointed 1 December 2023
Joan is a Chartered Secretary with Source Governance and has over 8 years’ experience in providing company secretarial and corporate
advisory services to ASX and NSX listed companies across a variety of sectors including mining, property development, logistics and
distribution, consumer services, manufacturing, and agriculture.
She has also acted as company secretary for public unlisted and proprietary companies, monitoring and managing their corporate
governance and compliance frameworks. Joan has Juris Doctor degree and is an associate member of the Governance Institute of Australia.
Harry Spindler - resigned 1 December 2023.
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 2024, and the number of meetings attended by each Director were:
Full Board
Audit and Risk Committee
Remuneration and Nomination
Committee
Attended
Held1
Attended
Held1
Attended
Held1
Tim Goldsmith
8
8
2
2
2
2
Danielle Lee
8
8
2
2
2
2
Andrew Hinkley
6
8
-
-
-
-
Jack Hamilton
8
8
2
2
2
2
Glenn Corrie
8
8
2
2
2
2
1 Held: represents the number of meetings held during the time the Director held office.
Hazer Group Limited
Directors' report
For the year ended 30 June 2024
10
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.
Hazer Group Limited
Directors' report
For the year ended 30 June 2024
11
The level of Non-Executive Director fixed fees as at the reporting date are as follows:
Tim Goldsmith
$ 75,000 plus statutory superannuation per annum
Danielle Lee
$ 50,000 plus statutory superannuation per annum
Andrew Hinkley
Reimbursement of reasonable fees and expenses in attending one annual face-to-face meeting
of the Board in Australia.
Jack Hamilton
$ 55,500 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 2024, the Group engaged the services of independent Human Resources consultants to provide
benchmarking data to measure remuneration for Directors and all personnel.
Voting and comments made at the company's Annual General Meeting ('AGM')
The Company received 89.12% “for” votes on its Remuneration Report for the year ended 30 June 2023.
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
●
Glenn Corrie – Executive Director
Executive Management are not considered to be Key Management Personnel.
Hazer Group Limited
Directors' report
For the year ended 30 June 2024
12
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments 1
Cash salary
Cash
Non-
Super-
Long service
Equity-
and fees
bonus
monetary
annuation
leave
settled
Total
2024
$
$
$
$
$
$
$
Non-Executive
Directors:
Tim Goldsmith
75,000
-
-
8,250
-
91,916
175,166
Danielle Lee
50,000
-
-
5,500
-
60,402
115,902
Andrew Hinkly
-
-
-
-
-
-
-
Jack Hamilton
55,500
-
-
-
-
60,402
115,902
Executive Directors:
Glenn Corrie
480,000
93,046
-
27,396
-
1,068,477
1,668,919
660,500
93,046
-
41,146
-
1,281,197
2,075,889
1 Share-based payments relate to options issued in prior periods vesting over multiple periods.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments 3
Cash salary
Cash
Non-
Super-
Long service
Equity-
and fees
bonus
monetary
annuation
leave
settled
Total
2023
$
$
$
$
$
$
$
Non-Executive
Directors:
Tim Goldsmith
75,000
-
-
7,875
-
54,796
137,671
Danielle Lee
50,000
-
-
5,250
-
36,009
91,259
Andrew Hinkly
-
-
-
-
-
-
-
Jack Hamilton
55,250
-
-
-
-
36,009
91,259
Executive Directors:
Glenn Corrie 1
349,425
-
-
19,051
-
771,555
1,140,031
Geoff Ward 2
143,668
-
-
14,390
-
-
158,058
673,343
-
-
46,566
-
898,369
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.
Hazer Group Limited
Directors' report
For the year ended 30 June 2024
13
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration
At risk - STI
At risk - LTI
Name
2024
2023
2024
2023
2024
2023
Non-Executive Directors:
Tim Goldsmith
48%
60%
-
-
52%
40%
Danielle Lee
48%
61%
-
-
52%
39%
Andrew Hinkly
-
-
-
-
-
-
Jack Hamilton
48%
61%
-
-
52%
39%
Executive Directors:
Glenn Corrie
30%
32%
6%
-
64%
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:
Glenn Corrie
Title:
Executive Director and Chief Executive Officer
Agreement commenced:
10 October 2022
Term of agreement:
Open
Details:
Base salary for the year ending 30 June 2024 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.
Share-based compensation
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 2024 are set out below:
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
2024
2023
2024
2023
Tim Goldsmith
-
525,000
-
-
Danielle Lee
-
345,000
-
-
Andrew Hinkly
-
-
-
-
Jack Hamilton
-
345,000
-
-
Glenn Corrie1
-
4,100,000
-
-
-
-
-
-
-
5,315,000
-
-
1 Share-based payments relate to options issued in prior periods vesting over multiple periods, subject to meeting certain tenure or share
price-based criteria.
Hazer Group Limited
Directors' report
For the year ended 30 June 2024
14
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 2024 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 2024
$
$
$
%
Tim Goldsmith
-
-
-
52.00%
Danielle Lee
-
-
-
52.00%
Andrew Hinkly
-
-
-
-
Jack Hamilton
-
-
-
52.00%
Glenn Corrie
-
-
-
64.00%
-
-
-
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 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
276,758
-
-
40.00%
Danielle Lee
181,870
-
-
39.00%
Andrew Hinkly
-
-
-
-
Jack Hamilton
181,870
-
-
39.00%
Glenn Corrie
2,448,084
-
-
68.00%
3,088,582
-
-
Additional information
The earnings of the Group for the five years to 30 June 2024 are summarised below:
2024
2023
2022
2021
2020
$
$
$
$
$
Revenues from ordinary activities
3,794,229
2,705,670
1,297,805
2,664,459
1,436,617
(Loss) after income tax
(19,067,366)
(12,205,599)
(16,414,826)
(11,656,094)
(3,225,289)
Net assets
13,570,549
3,939,477
12,451,967
13,316,270
18,013,551
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2024
2023
2022
2021
2020
Share price at financial year end ($)
0.37
0.63
0.76
0.86
0.37
Total dividends declared (cents per share)
-
-
-
-
-
Basic earnings per share (cents per share)
(9.28)
(7.19)
(10.38)
(8.22)
(2.99)
Hazer Group Limited
Directors' report
For the year ended 30 June 2024
15
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:
Balance at the
start of the
year
Received as
part of
remuneration
Additions
Disposals/
Other
Balance at the
end of the year
Ordinary Shares
Tim Goldsmith
1,528,237
-
1,020,834
-
2,549,071
Danielle Lee
682,608
-
227,989
-
910,597
Andrew Hinkly 1
8,796,549
-
1,649,352
-
10,445,901
Jack Hamilton
74,678
-
588,587
-
663,265
Glenn Corrie
38,871
-
589,789
-
628,660
11,120,943
-
4,076,551
-
15,197,494
1 Indirect interest as the Managing Partner of AP Ventures.
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:
Balance at the
start of the
year
Granted
Additions
Expired
Forfeited/
exercised
Balance at the
end of the year
Options over ordinary shares
Tim Goldsmith
525,000
-
385,418
-
910,418
Danielle Lee
345,000
-
88,996
-
433,996
Andrew Hinkly
-
-
824,676
-
824,676
Jack Hamilton
345,000
-
241,794
-
586,794
Glenn Corrie
4,100,000
-
227,395
-
4,327,395
5,315,000
-
1,768,279
-
7,083,279
There are no other transactions with key management personnel and their related parties.
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
Number under
option
Unquoted Options Series P
22/12/2022
22/12/2027
$0.001
4,100,000
Unquoted Options Series Q
22/12/2022
22/12/2027
$0.001
1,215,000
Unquoted Options Series R
19/05/2023
01/01/2028
$0.001
1,867,890
Quoted Options
22/08/2023
28/02/2025
$0.750
8,032,578
Quoted Options
25/08/2023
28/02/2025
$0.750
6,572,700
Quoted Options
02/10/2023
28/02/2025
$0.750
718,978
Quoted Options
26/02/2024
28/02/2025
$0.750
4,018,500
Quoted Options
20/03/2024
28/02/2025
$0.750
2,696,500
Quoted Options
08/05/2024
28/02/2025
$0.750
481,500
29,703,646
Hazer Group Limited
Directors' report
For the year ended 30 June 2024
16
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company or of
any other body corporate.
Shares issued on the exercise of options
The following ordinary shares of Hazer Group Limited were issued during the year ended 30 June 2024 and up to the date of this report on
the exercise of options granted:
Options series
Grant date
Expiry date
Exercise price
Number of
shares issued
Quoted Options
22/08/2023
28/02/2025
$0.75
375
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.
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
28 August 2024
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
RSM Australia Partners
Level 32 Exchange Tower,
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
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 2024, 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
Perth, WA
ALASDAIR WHYTE
Dated: 28 August 2024
Partner
Hazer Group Limited
Contents
For the year ended 30 June 2024
18
Statement of profit or loss and other comprehensive income
19
Statement of financial position
20
Statement of changes in equity
21
Statement of cash flows
22
Notes to the financial statements
23
Consolidated entity disclosure statement
47
Directors' declaration
48
Independent auditor's report to the members of Hazer Group Limited
49
Shareholder information
53
Contents
General information
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
Principal place of business
Level 9, 99 St Georges Terrace
Level 9, 99 St Georges Terrace
Perth WA 6000
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 28 August 2024.
The Directors have the power to amend and reissue the financial statements.
Hazer Group Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2024
Consolidated
Note
2024
2023
$
$
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
19
Revenue
Interest income
479,195
302,861
R&D tax rebate
28
3,315,034
2,402,809
3,794,229
2,705,670
Expenses
Finance costs
18
(171,418)
(370,935)
Administration
(2,394,472)
(2,810,653)
Consulting and research expenses
(6,838,097)
(5,670,814)
Employee benefits expenses
(8,144,699)
(4,754,006)
Share based payments
25
(1,626,869)
(1,046,848)
Depreciation and amortisation expense
(115,430)
(111,258)
Impairment expense on commercial demonstration plant
8
(3,570,610)
(146,755)
Loss before income tax expense
(19,067,366)
(12,205,599)
Income tax expense
17
-
-
Loss after income tax expense for the year
16
(19,067,366)
(12,205,599)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive loss for the year
(19,067,366)
(12,205,599)
Cents
Cents
Basic earnings per share
27
(9.28)
(7.19)
Diluted earnings per share
27
(9.28)
(7.19)
Hazer Group Limited
Statement of financial position
As at 30 June 2024
Consolidated
Note
2024
2023
$
$
The above statement of financial position should be read in conjunction with the accompanying notes
20
Assets
Current assets
Cash and cash equivalents
5
12,821,547
9,278,322
Trade and other receivables
6
5,228,097
2,939,084
Other current assets
7
321,695
161,457
Total current assets
18,371,339
12,378,863
Non-current assets
Commercial Demonstration Plant
8
-
-
Plant and equipment
9
10,462
21,162
Leases
10
199,758
265,350
Total non-current assets
210,220
286,512
Total assets
18,581,559
12,665,375
Liabilities
Current liabilities
Trade and other payables
11
2,249,472
5,146,293
Provisions
12
348,218
254,360
Leases
10
102,926
87,029
Contract liabilities
13
500,000
951,000
Total current liabilities
3,200,616
6,438,682
Non-current liabilities
Leases
10
119,902
174,233
Contract liabilities
13
1,000,000
1,500,000
Provisions
12
690,492
612,983
Total non-current liabilities
1,810,394
2,287,216
Total liabilities
5,011,010
8,725,898
Net assets
13,570,549
3,939,477
Equity
Issued capital
14
88,731,322
61,505,433
Reserves
15
2,519,398
1,630,088
Equity - accumulated losses
16
(77,680,171)
(59,196,044)
Total equity
13,570,549
3,939,477
Hazer Group Limited
Statement of changes in equity
For the year ended 30 June 2024
The above statement of changes in equity should be read in conjunction with the accompanying notes
21
Issued
Accumulated
Total equity
capital
Reserves
losses
Consolidated
$
$
$
$
Balance at 1 July 2022
58,859,172
2,585,976
(48,993,181)
12,451,967
Loss after income tax expense for the year
-
-
(12,205,599)
(12,205,599)
Other comprehensive income for the year, net of tax
-
-
-
-
Total comprehensive loss for the year
-
-
(12,205,599)
(12,205,599)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 14)
2,646,261
-
-
2,646,261
Share-based payments (note 15)
-
1,046,848
-
1,046,848
Transfer expired options to accumulated losses (note 16)
-
(2,002,736)
2,002,736
-
Balance at 30 June 2023
61,505,433
1,630,088
(59,196,044)
3,939,477
Issued
Accumulated
Total equity
capital
Reserves
losses
Consolidated
$
$
$
$
Balance at 1 July 2023
61,505,433
1,630,088
(59,196,044)
3,939,477
Loss after income tax expense for the year
-
-
(19,067,366)
(19,067,366)
Other comprehensive income for the year, net of tax
-
-
-
-
Total comprehensive loss for the year
-
-
(19,067,366)
(19,067,366)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 14)
27,071,289
-
-
27,071,289
Shares issued pursuant to the exercise of options (note 14)
281
-
-
281
Share-based payments (note 14 and note 15)
154,319
1,472,549
-
1,626,868
Transferred expired options to accumulated losses (note 16)
-
(583,239)
583,239
-
Balance at 30 June 2024
88,731,322
2,519,398
(77,680,171)
13,570,549
Hazer Group Limited
Statement of cash flows
For the year ended 30 June 2024
Consolidated
Note
2024
2023
$
$
The above statement of cash flows should be read in conjunction with the accompanying notes
22
Cash flows from operating activities
Payments to suppliers and employees (inclusive of GST)
(18,822,926)
(11,064,599)
Interest received
479,195
347,981
Interest and other finance costs paid
(8,170)
(8,776)
Research & development tax rebate received
2,536,015
9,448,880
Net cash used in operating activities
(15,815,886)
(1,276,514)
Cash flows from investing activities
Payments for Commercial Demonstration Plant
(7,497,658)
(4,476,844)
Other property plant and equipment
-
(20,665)
Net cash used in investing activities
(7,497,658)
(4,497,509)
Cash flows from financing activities
Proceeds from issue of shares, net of share issue costs
29,103,806
(20,406)
Proceeds from borrowings
1,759,000
2,000,000
Repayment of borrowings
(1,850,568)
(4,852,193)
Transaction costs related to borrowings
-
(2,200)
Repayment of lease liability
(126,599)
(100,780)
Share issue transaction costs
(2,028,870)
-
Net cash from/(used in) financing activities
26,856,769
(2,975,579)
Net increase/(decrease) in cash and cash equivalents
3,543,225
(8,749,602)
Cash and cash equivalents at the beginning of the financial year
9,278,322
18,027,924
Cash and cash equivalents at the end of the financial year
5
12,821,547
9,278,322
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
23
Note 1. Material accounting policy information
24
Note 2. Critical accounting judgements, estimates and assumptions
29
Note 3. Operating segments
30
Note 4. Financial risk management objectives and policies
31
Note 5. Cash and cash equivalents
32
Note 6. Trade and other receivables
32
Note 7. Other current assets
33
Note 8. Commercial Demonstration Plant
33
Note 9. Plant and equipment
34
Note 10. Leases
34
Note 11. Trade and other payables
36
Note 12. Provisions
36
Note 13. Contract liabilities
37
Note 14. Issued capital
37
Note 15. Reserves
39
Note 16. Equity - accumulated losses
39
Note 17. Income Tax
40
Note 18. Finance Costs
41
Note 19. Key management personnel disclosures
41
Note 20. Remuneration of auditors
41
Note 21. Contingent assets and liabilities
42
Note 22. Commitments
42
Note 23. Related party transactions
42
Note 24. Reconciliation of loss after income tax to net cash from/(used in) operating activities
43
Note 25. Share based payments
43
Note 26. Interests in subsidiaries
44
Note 27. Earnings per share
45
Note 28. R&D tax rebate
45
Note 29. Events after the reporting period
45
Note 30. Parent entity information
45
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
24
Note 1. Material accounting policy information
The accounting policies that are material to the Group are set out below. The accounting policies adopted are consistent with those of the
previous financial year, 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 30.
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 2024 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.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 1. Material accounting policy information (continued)
25
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The
revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate
the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive
income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
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.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 1. Material accounting policy information (continued)
26
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.
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.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 1. Material accounting policy information (continued)
27
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.
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.
Contract liabilities
Contract liabilities represent obligations which are not yet satisfied in relation to government grant in financing the Commercial
Demonstration Plant. Contract liabilities are recognised as revenue and as an offset to Commercial Demonstration Plant when the
performance obligations in the contract are satisfied.
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.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 1. Material accounting policy information (continued)
28
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.
If the non-vesting condition is within the control of the Company or employee, the failure to satisfy the condition is treated as a cancellation.
If the condition is not within the control of the company or employee and is not satisfied during the vesting period, any remaining expense
for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised
immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a
modification.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 1. Material accounting policy information (continued)
29
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
As disclosed in the financial statements, the Group's cash balance for the year ended 30 June 2024 was $12,821,547. The Group incurred
a loss of $19,067,366 and had net cash outflows from operating activities of $15,815,886; net cash outlfow from investing activities of
$7,497,658 and net cash inflow from financing activities of $26,856,769 for the year ended 30 June 2024.
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 FY24 and future R&D tax rebates. The Group has commenced the preparation of its R&D tax offsets claims for the 2024
financial year and expects to receive the rebates within the first half of the financial year ended 30 June 2025;
●
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;
●
The Company has adequate cash balance of $12mil to cover its projected expenses while maintaining operational stability;
●
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 2024. 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.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported
amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities,
contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and
on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The
resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes)
within the next financial year are discussed below.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 2. Critical accounting judgements, estimates and assumptions (continued)
30
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 Group 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 Commercial Demonstration Plant 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.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
31
Note 4. Financial risk management objectives and policies
The Group’s principal financial instruments comprise cash and short term deposits only.
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 $12,821,547 (2023: 9,278,322) 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:
Net Loss Higher/(lower)
Net Equity Higher/(lower)
2024
2023
2024
2023
+0.5% (50 basis points)
64,108
46,392
64,108
46,392
-0.5% (50 basis points)
(64,108)
(46,392)
(64,108)
(46,392)
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:
Note
Less than 3
months
3 to 12 months
1-5 years
>5 years
Total
$
$
$
$
$
Year ended 30 June 2024
Trade and other payables
11
2,249,472
-
-
-
2,249,472
Lease liabilities
10
25,777
77,149
119,902
-
222,828
Contract liabilities
13
-
500,000
1,000,000
-
1,500,000
2,275,249
577,149
1,119,902
-
3,972,300
Year ended 30 June 2023
Trade and other payables
11
5,146,293
-
-
-
5,146,293
Lease liabilities
10
22,583
64,446
174,233
-
261,262
Contract liabilities
13
-
951,000
1,500,000
-
2,451,000
5,168,876
1,015,446
1,674,233
-
7,858,555
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.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 4. Financial risk management objectives and policies (continued)
32
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 2024 the fair values of the short-term deposits pledged was $332,542 (2023: $332,542). 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
Consolidated
2024
2023
$
$
Cash at bank
10,782,403
6,494,780
Cash on deposit
332,542
332,542
Cash at bank – restricted
1,706,602
2,451,000
12,821,547
9,278,322
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
Consolidated
2024
2023
$
$
GST refundable
159,494
281,305
R&D tax rebate receivable
5,068,603
2,657,779
5,228,097
2,939,084
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 2024 (2023: 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.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
33
Note 7. Other current assets
Consolidated
2024
2023
$
$
Prepayments
309,499
150,859
Deposits
12,196
10,598
321,695
161,457
Note 8. Commercial Demonstration Plant
Consolidated
2024
2023
$
$
Commercial Demonstration Plant
36,309,103
29,543,133
Commercial Demonstration Plant – R&D offset
(10,153,795)
(7,924,084)
Commercial Demonstration Plant – restoration provision
578,334
592,983
Commercial Demonstration Plant – accumulated amortisation & impairment
(18,823,642)
(15,253,032)
Commercial Demonstration Plant – ARENA grant offset
(7,910,000)
(6,959,000)
-
-
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Cost and grant
offset
Amortisation
and impairment
Total
Consolidated
$
$
$
Balance at 1 July 2022
15,106,277
(15,106,277)
-
Additions
3,971,687
-
3,971,687
ARENA grant - release of contract liability
(2,969,000)
-
(2,969,000)
R&D Offset
(855,932)
-
(855,932)
Impairment of assets
-
(146,755)
(146,755)
Balance at 30 June 2023
15,253,032
(15,253,032)
-
Additions
6,751,321
-
6,751,321
ARENA grant - release of contract liability
(951,000)
-
(951,000)
R&D Offset
(2,229,711)
-
(2,229,711)
Impairment of assets
-
(3,570,610)
(3,570,610)
Balance at 30 June 2024
18,823,642
(18,823,642)
-
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 8. Commercial Demonstration Plant (continued)
34
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 2024, 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.
Note 9. Plant and equipment
Consolidated
2024
2023
$
$
Plant and equipment - at cost
74,909
74,909
Less: Accumulated depreciation
(64,447)
(53,747)
Net book value for the period ended
10,462
21,162
Cost
Depreciation
Total
Consolidated
$
$
$
Balance at 1 July 2022
54,244
(46,401)
7,843
Additions
20,665
(7,346)
13,319
Balance at 30 June 2023
74,909
(53,747)
21,162
Additions
-
(10,700)
(10,700)
Balance at 30 June 2024
74,909
(64,447)
10,462
Note 10. Leases
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:
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 10. Leases (continued)
35
Consolidated
2024
2023
$
$
Right-of-use assets
At 1 July
265,350
160,819
Remeasurement
39,138
208,444
Depreciation expense
(104,730)
(103,913)
At 30 June
199,758
265,350
Consolidated
2024
2023
$
$
Lease liabilities
At 1 July
261,262
152,608
Remeasurement
39,138
208,444
Accretion of interest
49,028
990
Payments
(126,600)
(100,780)
At 30 June
222,828
261,262
Consolidated
2024
2023
$
$
Lease liabilities classification
Current
102,926
87,029
Non-current
119,902
174,233
222,828
261,262
The maturity analysis of lease liabilities is disclosed in note 4.
Consolidated
2024
2023
$
$
The following are amounts recognised in the profit or loss:
Depreciation expense of right-of-use assets
104,730
103,913
Interest expense on lease liabilities
49,028
990
153,758
104,903
The Group had total cash outflows for leases of $126,600 in 2024 (2023: $100,780). The Group also had non-cash additions to right-of-use
assets and lease liabilities of $39,138 in 2024 (2023: 208,444). 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.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 10. Leases (continued)
36
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:
Within 5 years
More than five
years
Total
At 30 June 2023
Extension options expected not to be exercised
361,919
-
361,919
At 30 June 2024
Extension options expected not to be exercised
15,600
-
15,600
Note 11. Trade and other payables
Consolidated
2024
2023
$
$
Accounts payable
1,825,518
3,627,453
Other payables
423,954
1,518,840
2,249,472
5,146,293
Trade and other payables are non-interest bearing and generally have a term of 30-90 days.
Note 12. Provisions
Consolidated
2024
2023
$
$
Current liabilities
Employee benefits
348,218
254,360
Non-current liabilities
Employee benefits
69,506
-
Lease make good
20,000
20,000
Provision for restoration
600,986
592,983
690,492
612,983
1,038,710
867,343
Employee benefits
The current 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.
Non-current provisions for employee benefits represents annual leave and long service leave not expected to be settled within 12 months
of the reporting date and 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.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 12. Provisions (continued)
37
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.
Provision for
restoration
At 30 June 2023
592,983
Additional provision recognised
(14,649)
Unwinding of discount and changes in the discount rate
22,652
At 30 June 2024
600,986
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.
Note 13. Contract liabilities
Consolidated
2024
2023
$
$
Current liabilities
Current Contract liabilities
500,000
951,000
Non-current liabilities
Non-current Contract liabilities
1,000,000
1,500,000
1,500,000
2,451,000
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 achieved practical completion in FY2024, amounts attributable to Milestone 4 (being 12 months of operational performance)
are classified as current liabilities and are expected to be released in the next 12 months from 30 June 2024. Amounts relating to operational
Milestones are 5 – 6 classified as non-current as the Group is required to fulfil a minimum of 24 and 36 months of operations prior to being
eligible for the application of funds.
Note 14. Issued capital
Consolidated
2024
2023
2024
2023
Shares
Shares
$
$
Ordinary shares - fully paid
230,112,506
170,443,743
88,731,322
61,505,433
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 14. Issued capital (continued)
38
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Opening balance 1 July 2022
1 July 2022
166,327,649
58,859,172
Unsecured Convertible Note conversion
4 August 2022
2,008,402
$0.66
1,333,333
Unsecured Convertible Note conversion
26 September 2022
2,107,692
$0.63
1,333,334
Share issue transaction costs, net of tax
-
$0.00
(20,406)
Closing balance 30 June 2023
170,443,743
61,505,433
Issue of Shares
22-August-2023
16,063,594
$0.48
7,710,525
Issue of Shares
25-August-2023
13,145,381
$0.48
6,309,783
Issue of Shares
02-October-2023
1,437,952
$0.48
690,217
Issue of shares on exercise of options
12-February-2024
375
$0.75
281
Share Purchase Plan issue
26-February-2024
16,074,000
$0.50
8,037,000
Share Purchase Plan issue
20-March-2024
10,786,000
$0.50
5,393,000
Executive 2023 STI Share Issue
16-April-2024
235,461
$0.66
154,319
Share Purchase Plan issue
08-May-2024
1,926,000
$0.50
963,000
Share issue transaction costs, net of tax
-
$0.00
(2,032,236)
Closing balance 30 June 2024
230,112,506
88,731,322
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.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
39
Note 15. Reserves
Consolidated
2024
2023
$
$
Options reserve
2,519,398
1,630,088
Option reserve
The option reserve records items recognised as expenses on the valuation of share options.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
No of Options
Value
$
Opening balance 1 July 2022
9,415,000
2,585,976
Options lapsed during the period - Series M
(3,965,000)
(635,038)
Options lapsed during the period - Series N
(2,000,000)
(543,422)
Options issued during the current year vesting over multiple periods
7,182,890
1,046,848
Options from prior periods lapsing
-
(824,276)
Opening balance 1 July 2023
10,632,890
1,630,088
Options issued during the current year vesting immediately
22,520,756
-
Options exercised during the period - Series S
(375)
-
Options lapsed during the period - Series N
(3,450,000)
(583,239)
Existing options issued in prior periods vesting over multiple periods
-
1,472,549
Closing balance 30 June 2024
29,703,271
2,519,398
Note 16. Equity - accumulated losses
Consolidated
2024
2023
$
$
Accumulated losses at the beginning of the financial year
(59,196,044)
(48,993,181)
Loss after income tax expense for the year
(19,067,366)
(12,205,599)
Transfer expired options to accumulated losses
583,239
2,002,736
Accumulated losses at the end of the financial year
(77,680,171)
(59,196,044)
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
40
Note 17. Income Tax
The major components of income tax expense for the years ended 30 June 2024 and 2023 are:
Consolidated
2024
2023
$
$
Statement of profit or loss
Current income tax:
-
-
-
-
Deferred tax:
-
-
Relating to the origination and reversal of temporary differences
(1,897,685)
(838,517)
Under / over from prior periods
220,417
-
Derecognition of current year temporary differences
1,677,268
838,517
Income tax expense/(benefit) reported in the statement of profit or loss
-
-
Reconciliation of tax expense and accounting profit multiplied by Australia's prima facie tax rate of 25% for 2024 and 25% for 2023:
2024
2023
$
$
Accounting loss before income tax
(19,067,366)
(12,205,599)
Tax on loss at Australian prima facie tax rate of 25% (2023: 25%)
(4,766,842)
(3,051,399)
Impact of tax rates applicable outside of Australia
41,203
(41,225)
Expenses eligible for R&D rebate
2,081,126
1,380,925
Share based payments
406,717
261,712
Other non-deductible expenses
1,168,870
4,865
R&D rebate received on eligible expenses
(828,759)
(600,702)
Movement in temporary deductible and taxable differences in statement of taxable income
838,517
Under / over from prior periods
220,417
-
-
At the effective income tax rate of 25% (2023: 25%)
(1,677,268)
(1,207,308)
Tax losses not brought/(brought) to account
1,677,268
1,207,308
Income tax expense/(benefit) reported in the statement of profit or loss
-
-
2024
2023
$
$
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
19,192,342
15,610,972
Potential tax benefit at 25% (2023: 25%)
4,798,085
3,902,743
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 17. Income Tax (continued)
41
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 2024 is contingent
upon the following:
(a)
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;
(b)
the conditions for deductibility imposed by income tax legislation continuing to be complied with;
(c)
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.
Note 18. Finance Costs
Consolidated
2024
2023
Convertible note interest
-
41,319
Fair Value gain on convertible note derivative
-
(225,446)
Interest and other finance costs
171,418
552,862
Transaction costs related to borrowings
-
2,200
171,418
370,935
Note 19. 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:
Consolidated
2024
2023
$
$
Short-term employee benefits
753,546
673,343
Post-employment benefits
41,146
46,566
Share-based payments
1,281,197
898,369
2,075,889
1,618,278
Executive management are not considered to be Key Management Personnel.
Note 20. 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:
Consolidated
2024
2023
$
$
Audit services
Audit or review of the financial statements
81,200
77,000
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
42
Note 21. Contingent assets and liabilities
The Group has given bank guarantees as at 30 June 2024 of $297,542 (2023: $297,542) to various landlords and Western Power in
association with the Commercial Demonstration Plant.
Note 22. Commitments
Committed at the reporting date but not recognised as liabilities:
Consolidated
2024
2023
$
$
Research collaboration agreement:
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
100,000
100,000
Later than 1 year but not later than 5 years
-
-
More than five years
-
-
100,000
100,000
Construction of Commercial Demonstration Plant
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
1,136,908
2,251,460
Later than 1 year but not later than 5 years
-
-
More than five years
-
-
1,136,908
2,251,460
Note 23. Related party transactions
Key management personnel
Disclosures relating to key management personnel are set out in note 19 and the remuneration report included in the Directors' report.
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.
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
43
Note 24. Reconciliation of loss after income tax to net cash from/(used in) operating activities
Consolidated
2024
2023
$
$
Loss after income tax expense for the year
(19,067,366)
(12,205,599)
Adjustments for:
Share-based payments
1,626,869
1,046,848
Depreciation
115,430
111,258
Transaction costs related to borrowings
-
2,200
Finance costs
163,248
359,959
Impairment expense (note 8)
3,570,610
146,755
Change in operating assets and liabilities:
Other current assets
(160,238)
150,963
Trade and other payables
(2,166,103)
2,689,327
Employee benefits
163,364
83,815
Trade and other receivables
(61,700)
6,337,960
Net cash used in operating activities
(15,815,886)
(1,276,514)
Note 25. Share based payments
For the year ended 30 June 2024:
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
No.
No.
No.
No.
No.
14/11/2018
30/06/2024
$0.900
2,000,000
-
-
(2,000,000)
-
18/10/2019
30/06/2024
$0.900
1,450,000
-
-
(1,450,000)
-
22/12/2022
22/12/2027
$0.001
4,100,000
-
-
-
4,100,000
22/12/2022
22/12/2027
$0.001
1,215,000
-
-
-
1,215,000
10/05/2023
01/01/2028
$0.001
1,867,890
-
-
-
1,867,890
10,632,890
-
-
(3,450,000)
7,182,890
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 25. Share based payments (continued)
44
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
No.
No.
No.
No.
No.
29/08/2018
30/06/2023
$0.70
500,000
-
-
(500,000)
-
14/11/2018
30/06/2023
$0.70
1,915,000
-
-
(1,915,000)
-
14/11/2018
30/06/2024
$0.90
2,000,000
-
-
-
2,000,000
18/10/2019
30/06/2023
$0.70
1,550,000
-
-
(1,550,000)
-
18/10/2019
30/06/2024
$0.90
1,450,000
-
-
-
1,450,000
01/12/2020
30/06/2024
$0.90
2,000,000
-
-
(2,000,000)
-
22/12/2022
22/12/2027
$0.00
-
4,100,000
-
-
4,100,000
22/12/2022
22/12/2027
$0.00
-
1,215,000
-
-
1,215,000
10/05/2023
01/01/2028
$0.00
-
1,867,890
-
-
1,867,890
9,415,000
7,182,890
-
(5,965,000)
10,632,890
Set out below are the options exercisable at the end of the financial year:
Option series
Grant date
Expiry date
2024
2023
Number
Number
Series N
14/11/2018
30/06/2024
-
2,000,000
Series N
18/10/2019
30/06/2024
-
1,450,000
-
3,450,000
The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.35 years (2023: 3.36).
Expenses arising from share based payment transactions
Total expenses arising from share based payment transactions recognised during the year were as follows:
Consolidated
2024
2023
$
$
Options issued to KMP
1,281,198
898,369
Options issued to employees/consultants
191,352
148,479
Shares issued to employees/consultants
154,319
-
1,626,869
1,046,848
Note 26. Interests in subsidiaries
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:
Ownership interest
Principal place of business /
2024
2023
Name
Country of incorporation
%
%
Hazer Group Canada Limited
Canada
100.00%
100.00%
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 26. Interests in subsidiaries (continued)
45
Note 27. Earnings per share
Consolidated
2024
2023
$
$
Loss after income tax
(19,067,366)
(12,205,599)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
205,369,909
169,754,277
Cents
Cents
Basic earnings per share
(9.28)
(7.19)
Diluted earnings per share
(9.28)
(7.19)
The Company has 29,703,271 (2023: 10,632,890) options at 30 June 2024, 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 28. 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 2024 to be $5,068,603: $1,753,569 in relation to the capitalised CDP expenditure and $3,315,034 in relation
to other expensed R&D costs.
Note 29. Events after the reporting period
●
CDP related operating expenditure including operational performance testing and post start up R&D/reactor operating performance
diagnostics;
●
Advancing current commercial projects in Australia, Canada, France, North America, Japan and Korea, and pursuing further
opportunities elsewhere.
Other than the above, no other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly
affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Note 30. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2024
2023
$
$
Loss after income tax
(19,067,366)
(12,205,599)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive loss
(19,067,366)
(12,205,599)
Hazer Group Limited
Notes to the financial statements
For the year ended 30 June 2024
Note 30. Parent entity information (continued)
46
Statement of financial position
Parent
2024
2023
$
$
Total current assets
18,371,229
12,378,863
Total non-current assets
210,331
286,623
Total assets
18,581,560
12,665,486
Total current liabilities
3,200,617
6,438,793
Total non-current liabilities
1,810,394
2,287,216
Total liabilities
5,011,011
8,726,009
Net assets
13,570,549
3,939,477
Equity
Issued capital
88,731,322
61,505,433
Reserves
2,519,398
1,630,088
Accumulated losses
(77,680,171)
(59,196,044)
Total equity
13,570,549
3,939,477
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.
Material accounting policy information
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.
Hazer Group Limited
Consolidated entity disclosure statement
As at 30 June 2024
47
Place formed /
Ownership
Tax
Jurisdiction for Foreign
Entity name
Entity type
Country of incorporation
interest %
Residency
tax residency
Hazer Group Limited
Body corporate
Australia
100.00%
Australian
N/A
Hazer Group Canada Limited
Body corporate
Canada
100.00%
Foreign
Canada
Hazer Group Limited
Directors' declaration
For the year ended 30 June 2024
48
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 2024 and of its
performance for the financial year ended on that date;
●
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable,
and
●
the information disclosed in the attached consolidated entity disclosure statement is true and correct.
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
28 August 2024
RSM Australia Partners
Level 32 Exchange Tower,
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
www.rsm.com.au
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
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 (the Group), which
comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash
flows for the year then ended, and notes to the financial statements, including material accounting policy
information, the consolidated entity disclosure statement 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 2024 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 (including independence standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, 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.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Research and development tax rebate - Refer to Note 28 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 $5,068,603 representing the estimated
claim for the activity for the year ended 30 June
2024.
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.
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
the estimate to determine whether it is in
accordance with accounting records.
•
Testing on sample basis of individual expenditure
items included in the estimate to underlying
supporting
documentation
to
ensure
these
expenditure
items
have
been
appropriately
recognised in the accounting records and related to
eligible expenditures; and
•
Assessing the appropriateness of disclosures in the
financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2024 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:
a. the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b. the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement that is true and correct and is free of 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: https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2024.
In our opinion, the Remuneration Report of Hazer Group Limited, for the year ended 30 June 2024, 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
Perth, WA
ALASDAIR WHYTE
Dated: 28 August 2024
Partner
Hazer Group Limited
Shareholder information
For the year ended 30 June 2024
53
ASX Additional Information
The Company’s ordinary shares are quoted as ‘HZR’ on ASX.
The shareholder information set out below was applicable as at 29 July 2024.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Number of
ordinary
shares
Number of
holders of
ordinary
shares
1 to 1,000
2,485,604
3,828
1,001 to 5,000
15,166,314
5,878
5,001 to 10,000
15,202,590
1,978
10,001 to 100,000
80,094,779
2,701
100,001 and over
117,163,219
307
230,112,506
14,692
Holding less than a marketable parcel
3,929,673
5,020
Hazer Group Limited
Shareholder information
For the year ended 30 June 2024
54
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
Number held
issued
BNP Paribas Noms Pty Ltd
12,733,857
5.53
UBS NOMINEES PTY LTD
9,270,717
4.03
BNP PARIBAS NOMINEES PTY LTD IB AU NOMS RETAILCLIENT
7,425,346
3.23
BNP PARIBAS NOMINEES PTY LTD CLEARSTREAM
6,306,981
2.74
CITICORP NOMINEES PTY LIMITED
4,663,061
2.03
OOFY PROSSER PTY LTD DRONES FAMILY A/C
1,787,340
0.78
MR ADRIAN JOHN MCTIERNAN
1,515,000
0.66
MRS LORRAINE ALYSSA GOLDSMITH
1,480,407
0.64
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
1,241,099
0.54
SHARESIES AUSTRALIA NOMINEE PTY LIMITED
1,205,709
0.52
MR ROBERT WEBB
1,149,951
0.50
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
1,089,342
0.47
MOLLYGOLD SUPERANNUATION PTY LTD
1,068,664
0.46
NETWEALTH INVESTMENTS LIMITED
1,053,605
0.46
SHERKANE PTY LTD
1,003,162
0.44
MR MARK STEPHEN EDWARDS
1,000,045
0.43
THE UNIVERSITY OF WESTERN AUSTRALIA
996,147
0.43
RANGEGROVE PTY LTD
961,549
0.42
CITOS SUPER PTY LTD
900,000
0.39
MR PETER KARAS
816,667
0.35
57,668,649
25.05
Hazer Group Limited
Shareholder information
For the year ended 30 June 2024
55
Options over ordinary shares
% of total
options
Number held
issued
UBS NOMINEES PTY LTD
3,193,497
14.18
BNP PARIBAS NOMS PTY LTD
856,350
3.80
NETWEALTH INVESTMENTS LIMITED
556,704
2.47
CITICORP NOMINEES PTY LIMITED
479,110
2.13
TONRAN PTY LTD
456,888
2.03
MR ROBERT WEBB
446,475
1.98
CITOS SUPER PTY LTD
390,000
1.73
NETWEALTH INVESTMENTS LIMITED
377,828
1.68
MR PETER KARAS
308,334
1.37
MR MARK STEPHEN EDWARDS
307,500
1.37
PRIMARY SECURITIES LTD
261,500
1.16
MR JASON ALAN CARROLL
250,000
1.11
GRANT EDWARDS PTY LTD
246,250
1.09
JACKJEN PTY LTD
241,794
1.07
MOLLYGOLD SUPERANNUATION PTY LTD
234,333
1.04
CHOOGGIES PTY LTD
225,000
1.00
MR GLENN DAVID BENJAMIN CORRIE
223,750
0.99
MR SAMUEL BAILLIEU HORDERN
206,251
0.92
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
200,000
0.89
NKF HEALTH PTY LTD
184,379
0.82
9,645,943
42.83
Unquoted equity securities
Number
Number
on issue
of holders
-
-
Options over ordinary shares - Series P
4,100,000
1
Options over ordinary shares - Series Q
1,215,000
3
Options over ordinary shares - Series R
1,867,890
20
7,182,890
24
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:
Ordinary shares
% of total
shares
Number held
issued
BNP Paribas Noms Pty Ltd
12,733,857
5.53
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.
Hazer Group Limited
Shareholder information
For the year ended 30 June 2024
56
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.