For personal use only
NOVONIX LIMITED
ABN 54 157 690 830
ANNUAL REPORT – 30 JUNE 2020
CONTENTS
CORPORATE DIRECTORY ......................................................................................................................... 1
REVIEW OF OPERATIONS AND ACTIVITIES .............................................................................................. 2
DIRECTORS’ REPORT ............................................................................................................................... 8
DIRECTORS AND COMPANY SECRETARY ............................................................................................. 8
PRINCIPAL ACTIVITIES ......................................................................................................................... 8
DIVIDENDS .......................................................................................................................................... 8
COVID 19 IMPACT ............................................................................................................................... 8
REVIEW OF OPERATIONS .................................................................................................................... 8
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS ............................................................................. 9
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS ................................................. 10
EVENTS SINCE THE END OF THE FINANCIAL YEAR ............................................................................ 10
ENVIRONMENTAL REGULATION ....................................................................................................... 10
INFORMATION ON DIRECTORS ......................................................................................................... 11
MEETINGS OF DIRECTORS ................................................................................................................. 15
REMUNERATION REPORT (AUDITED) ............................................................................................... 16
SHARES UNDER OPTION AND PERFORMANCE RIGHTS .................................................................... 28
INSURANCE OF OFFICERS AND INDEMNITIES ................................................................................... 29
PROCEEDINGS ON BEHALF OF THE COMPANY ................................................................................. 29
NON-AUDIT SERVICES ....................................................................................................................... 29
AUDITOR’S INDEPENDENCE DECLARATION ...................................................................................... 30
AUDITOR’S INDEPENDENCE DECLARATION .......................................................................................... 31
CORPORATE GOVERNANCE STATEMENT .............................................................................................. 32
ANNUAL FINANCIAL REPORT – 30 JUNE 2020 ...................................................................................... 33
DIRECTORS’ DECLARATION ................................................................................................................... 93
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS ........................................................................ 94
SHAREHOLDER INFORMATION ........................................................................................................... 100
For personal use only CORPORATE DIRECTORY
Directors
Secretary
Registered office in Australia
Principal place of business
Share register
Auditor
Solicitors
Bankers
CORPORATE DIRECTORY
A Bellas B.Econ, DipEd, MBA, FAICD, FCPA, FGS
G A J Baynton M.Econ St, MBA, B.Bus, FGS
P M St Baker B.Eng
R Cooper BE (Mining), MEngSc, MAusIMM, MAICD
Admiral R J Natter, US Navy (Ret.)
Andrew N. Liveris AO, BE (Hons) Doctor of Science
(honoris causa)
S M Yeates CA, B.Bus
McCullough Robertson
Level 11, Central Plaza Two
66 Eagle Street
Brisbane QLD 4000
Level 8, 46 Edward Street
Brisbane QLD 4000
Link Market Services Limited
Level 21, 10 Eagle Street
Brisbane QLD 4000
www.linkmarketservices.com.au
PricewaterhouseCoopers
480 Queen Street
Brisbane QLD 4000
www.pwc.com.au
Atkinson Corporate Lawyers
99 St George’s Terrace
Perth WA 6000
Commonwealth Bank of Australia
Stock exchange listing
NOVONIX Limited shares are listed on the Australian
Securities Exchange (ASX)
Website address
www.novonixgroup.com
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REVIEW OF OPERATIONS AND ACTIVITIES
REVIEW OF OPERATIONS AND ACTIVITIES
NOVONIX OVERVIEW
NET ASSETS
year ending 30 June 2020
CASH & CASH EQUIVALENTS
year ending 30 June 2020
STATUTORY AFTER-TAX LOSS
year ending 30 June 2020
$66,532,293
$38,807,662
$20,028,526
2019: $15,772,778
2019: $6,054,664
2019: $26,121,912
At the end of the financial year the company had net assets of $66,532,293 (2019: $15,772,778) and
$38,807,662 in cash and cash equivalents (2019: $6,054,664). NOVONIX LTD. reported a statutory
after-tax loss for the year ended 30 June 2020 of $20,028,526 (2019: $26,121,912). These financial
results are in line with management expectations. The individual business unit performances are
discussed further below.
NOVONIX ANODE MATERIALS
NOVONIX Anode Materials (PUREgraphite) was established
in March 2017 to develop and commercialise ultra -long-life
lithium-ion
high-performance anode material for the
battery market focused on electric vehicle and energy
storage applications that demand
life and high
performance.
long
Since 2017, significant progress has been made executing
on this business plan. FY 2020 has proven to be a banner
year for NOVONIX, notably signing deals with two of the
world’s largest battery manufacturers (SAMSUNG SDI and
SANYO/PANASONIC) and securing funding to expand production to 2,000 tonnes per annum (tpa)
progressively over 2020 and 2021.
NOVONIX commenced commercial scale processing in June 2020 at its production facility in
Chattanooga, Tennessee, USA, where it will progressively scale to a forecast 2,000 tpa production rate
by the end of calendar 2021.
NOVONIX BATTERY TECHNOLOGY SOLUTIONS (BTS)
NOVONIX Battery Technology Solutions was acquired in June 2017 to provide cutting edge battery
R&D and technology advantage.
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REVIEW OF OPERATIONS AND ACTIVITIES
NOVONIX BTS is based in Bedford (near Halifax), Nova
Scotia, Canada and makes the most accurate lithium-ion
battery cell test equipment
This
equipment is now used by leading battery makers and
researchers and equipment manufacturers including
Panasonic, CATL, LG Chemical, Samsung SDI and
numerous consumer electronic and automotive OEMs.
in the world.
Since acquisition the company significantly expanded
NOVONIX BTS R&D capabilities
through direct
investment in and through a long term partnership
agreement with Dalhousie University.
In FY 2020, NOVONIX BTS delivered on all aspects of the
company’s strategy, achieving >100% yoy revenue
growth and announcing groundbreaking battery technology developments including Dry Particle
Micro Granulation (DPMG) and Single Crystal Cathode (SCC).
MOUNT DROMEDARY
The Mount Dromedary Graphite Project is a world-class, high-grade (18%+) natural graphite deposit
located in Australia.
Despite the favourable characteristics of this project the company has decided to put a hold on
advancing the project at this time.
The primary reasons behind this decision are:
> Medium term oversupply conditions with the broader natural graphite concentrate market;
> Substantially more favourable investment opportunities for the company manufacturing
advanced battery anode materials and developing new battery technologies.
The company continues to hold the project in good standing while monitoring the market.
TENEMENT LIST
Tenement
Permit Holder
Grant date
EPM 26025
Exco Resources Limited
14/12/2015
EPM 17323
EPM 17246
MD South Tenements Pty
Ltd (Subsidiary of NOVONIX
Limited)
MD South Tenements Pty
Ltd
20/10/2010
NVX
Rights
100%
(Sub-Blocks
Normanton 3123
D, J, N, O and S)
100%
Expiry date
13/12/2020
19/10/2021
26/10/2010
100%
25/10/2020
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REVIEW OF OPERATIONS AND ACTIVITIES
HIGHLIGHTS OF FISCAL YEAR 2020
COMPLETION OF EQUITY RAISING AND CAPITAL RESTRUCTURE
30 JUNE 2020
The Equity raising announced on 29 May 2020 was completed on 30 June 2020 with $63
million having been raised. All outstanding convertible notes have been redeemed and all
loans from Directors and related parties have been repaid and invested in the company in the
capital raising. A total of 40.5 million options over new shares in NOVONIX have also been
cancelled as part of the broader transaction. In addition to eliminating all debt, the funds
raised will provide capex and working capital to fulfil an initial SAMSUNG supply contract,
facilitate development and commercialization of the DPMG technology for both anode and
cathode and other million-mile battery innovations. It also provides capital investment along
with general working capital to allow NOVONIX to increase production to 2,000 tpa.
NOVONIX TO SUPPLY SAMSUNG SDI AND PURSUE R&D COLLABORATION
9 DECEMBER 2019
In December 2019, NOVONIX reached a conditional agreement to supply lithium-ion battery
anode material to SAMSUNG SDI, an international manufacturer of lithium-ion batteries. The
agreement is NOVONIX’s first for its recently launched anode product and positions NOVONIX
as a new supplier in this specialised battery materials market. The agreement follows more
than six months of technical evaluation of NOVONIX’s anode material and is intended as a first
phase of a long-term agreement. Under the agreement NOVONIX will supply SAMSUNG SDI
an initial volume of 500 tonnes with first deliveries forecast to commence in late 2020. Larger
volumes will be considered each year and will be subject to supply performance by NOVONIX,
market conditions and SAMSUNG SDI overall requirements. Signing of the purchasing
agreement for 500 tonnes is subject to SAMSUNG SDI’s required quality assurance processes
and audit of supplier processes fulfillment. Pricing is commercially sensitive and strictly
confidential between the parties. SAMSUNG SDI and NOVONIX will also explore opportunities
for the supply of new graphite anode materials use in Samsung SDI products targeting for
electric vehicles (EV) and energy storage systems (ESS) under a R&D collaboration.
SANYO ELECTRIC AGREEMENT FOR LIB ANODE MATERIAL
28 JANUARY 2020
In January 2020, NOVONIX announced a commercial collaboration with SANYO Electric Co.,
Ltd. of Japan, a manufacturer of lithium-ion batteries for applications including electric
vehicles and energy storage systems. To this end, NOVONIX has signed and executed a non-
binding Memorandum of Understanding (MoU) with SANYO. Under the MoU, the parties have
agreed to work together to investigate the opportunity for NOVONIX to supply graphite anode
material for use in lithium-ion battery manufacturing.
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REVIEW OF OPERATIONS AND ACTIVITIES
DRY PARTICLE MICGRANULATION (DPMG) MANUFACTURING METHOD PATENTED BY
NOVONIX
15 MAY 2020
In May 2020, NOVONIX announced the development of a breakthrough technology that can
be applied to the manufacture of both anode and cathode materials for lithium-ion batteries.
The technology, called Dry Particle Microgranulation (DPMG), was developed through the
partnership with the Research Group of Professor Mark Obrovac at Dalhousie University. That
research program was supported by the Canadian Government through its NSERC Industrial
Research Program. DPMG provides a method for synthesizing highly engineered particles
through the consolidation of fine materials, that may otherwise be waste, into particles than
can be tens of microns and suitable for use in lithium-ion batteries. The recent publication
outlines methods of making spherical graphite for use in lithium-ion batteries with 100% yield
where current methods have significant yield losses which increase the cost of manufacturing.
SINGLE CRYSTAL CATHODE MANUFACTURING PATENTED BY NOVONIX
9 JUNE 2020
In June 2020, NOVONIX announced the development of technology to enable the
manufacture of ‘single crystal’ NMC cathode material using its proprietary DPMG technique.
This groundbreaking technology was also developed through its partnership with the
Research Group of Professor Mark Obrovac at Dalhousie University. Single crystal cathode
materials have recently become an aspiration for the lithium-ion battery industry, with
demonstrated outperformance over traditional polycrystalline cathode particles (the current
standard) for ultra-long life for EV and ESS uses. Single crystal cathode cells far exceed the
lifetime of other NMC/graphite cells (J. Dahn et al. Journal of the Electrochemical Society,
2019). This battery material innovation has the potential to deliver breakthrough step-change
improvements in cost, performance and sustainability within the battery, electric vehicle and
renewable energy sectors.
NOVONIX PATENT FOR ELECTROLYTE ANALYSIS GRANTED
2 SEPTEMBER 2019
In September 2019, NOVONIX announced the grant of a US patent for a method of non-
destructive evaluation of the liquid electrolyte in rechargeable lithium-ion batteries (No.
10,386,423). The technology underlying this patent was developed at Dalhousie University
and the rights to commercialisation are assigned exclusively to NOVONIX under its broad
research agreement. NOVONIX has commercialized the Li-ion Differential Thermal Analysis
(Li-DTA) system and is marketing this product to customers around the world. Using Li-DTA,
researchers and battery developers can understand changes in the amount and composition
of the liquid electrolyte in the battery during cycling. The new patented technology and
related commercialisation strategy is further evidence of the suite of cutting-edge
technologies that is establishing NOVONIX as a leader in battery and materials development.
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NOVONIX RELOCATES INTO NEW ANODE PRODUCTION FACILITY
8 AUGUST 2019
REVIEW OF OPERATIONS AND ACTIVITIES
As advised on 3 July 2019, NOVOINX has relocated its anode production operations to a larger
facility in Chattanooga, Tennessee with greater expansion capability under pinned by a long-
term five-year lease with two options for renewal, each for a further five years. Initially
NOVONIX will occupy 3,700 sqm of the 11,150 sqm facility while holding right-of-first offer to
lease the balance of the whole facility. The initial 3.700 sqm will house the first 1,000 tpa
manufacturing capacity plus the laboratory, office and development pilot plant.
NOVONIX BATTERY TECHNOLOGY SOLUTIONS WINS DISCOVERY AWARD FOR
INNOVATION
25 NOVEMBER 2019
NOVONIX Battery Technology Solutions was the winner of the Award for Innovation at the
17th Annual Discovery Awards held in Halifax, Nova Scotia on 22 November 2019. The event
is held annually in Halifax and is the only one dedicated to recognising achievements in Nova
Scotia, specifically in the field of science and technology. The award to NOVONIX was in
recognition of its work in the field of lithium-ion battery testing and development.
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REVIEW OF OPERATIONS AND ACTIVITIES
NOVONIX OUTLOOK
NOVONIX is well positioned with both the necessary people and technology to participate in the
rapidly growing electric vehicle and energy storage system markets from its operations in North
America. With deals signed for NOVONIX’s anode product, NOVONIX is critically focused on ramping
up capacity at its plant in Chattanooga. At the same time, NOVONIX’s R&D centre in Halifax continues
to focus on new and improved technologies, strategic partnerships with leading international battery
companies, and a growing patent pipeline that will position the company to be at the forefront of
battery technology of the future.
PRIORITIES FOR NOVONIX FOR FY21 AND BEYOND INCLUDE:
>
In line with the recent equity fund raising plan, expand anode production capacity to 2,000
tpa
> Finalise SDI Samsung production plant audit and commence first product shipments
> Expand anode product trials and technical interchange with additional domestic US and global
>
battery makers
In conjunction with NOVONIX’s research partnership with Dalhousie University, and per
NOVONIX’s million-mile battery initiatives and technology roadmap, continue to develop and
file new battery materials IP
> Commence commercialisation of DPMG technology to make high-performance long-life single
crystal cathode materials
The Company’s Board and management are excited by the immediate opportunities ahead for growth and sales,
as well as NOVONIX’s positioning to participate in the broader long-term growth of the international battery
market. For additional information on NOVONIX’s future plans. The following is a link the company’s webinar,
“What’s Next? Technology Roadmap”.
https://us02web.zoom.us/webinar/register/WN_UQCZt_bVS2C9Q2iHQ1J-wA
END OF REVIEW OF OPERATIONS AND ACTIVIITES
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DIRECTORS’ REPORT
DIRECTORS’ REPORT
Your Directors present their report on the consolidated entity consisting of NOVONIX Limited and the
entities it controlled at the end of, or during, the year ended 30 June 2020. Throughout the report,
the consolidated entity is referred to as the Group.
DIRECTORS AND COMPANY SECRETARY
The following persons were Directors of NOVONIX Limited during the whole of the financial year and
up to the date of this report:
Greg Baynton
Tony Bellas
Robert Cooper
Andrew Liveris
Robert Natter
Philip St Baker
Dean Price (alternate for Robert Cooper) was an alternate director from the beginning of the financial
year until his resignation on 15 January 2020.
The Company Secretary is Suzanne Yeates. Appointed to the position of Company Secretary on 18
September 2015, Ms Yeates is a Chartered Accountant and Founder and Principal of Outsourced
Accounting Solutions Pty Ltd. She holds similar positions with other public and private companies.
PRINCIPAL ACTIVITIES
During the year, the principal activities of the Group included the development and implementation
of a downstream integration strategy transforming the business into a supplier of advanced battery
materials, equipment and services to the global Lithium-ion Battery (LIB) market.
DIVIDENDS
The Directors do not recommend the payment of a dividend. No dividend was paid during the year.
COVID 19 IMPACT
The unprecedented conditions created by Covid 19 have, like all companies, affected the operations
of the Group. For example, the Chattanooga PUREgraphite production plant had to be shut down in
April and May, and personnel operating restrictions and movements are now implemented. By
making these adjustments in our operations and working closely with our customers and suppliers
(who are also impacted), the Group has continued to deliver as efficiently as possible considering our
personnel safety and health priorities.
REVIEW OF OPERATIONS
Information on the operations and financial position of the Group and its business strategies and
prospects is set out in the review of operations and activities on pages 2 – 7 of this annual report.
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DIRECTORS’ REPORT
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the financial year the Company completed a $63 million capital raising via an institutional
placement, an accelerated non-renounceable rights issue and a strategic placement.
The capital raise has simplified the NOVONIX capital structure through the redemption of Convertible
Notes and repayment of short-term loans, along with the cancellation of 40.5 million options held by
Directors, employees and convertible note holders.
Funds raised have provided capex and working capital to fulfil an initial SAMSUNG supply contract,
facilitate development and commercialisation of the DPMG technology for cathode and other million-
mile battery innovations, provide general working capital and cover the costs of the capital raising.
The components of the transaction are set out below:
a)
Institutional placement
On 5 June 2020, 19,495,469 fully paid ordinary shares were issued to institutional investors at $0.29
per share.
b)
Rights issue
An accelerated 1 for 1 rights issue was completed during the financial year. Under the rights issue,
130,721,435 fully paid ordinary shares were issued at $0.29 per share. The rights issue raised a total
of $37.9 million and funds raised consisted of $34 million cash and $3.9 million retirement of debt.
c)
Repayment of Director loans
During the financial year, the Company’s directors entered into short term loan agreements
collectively for $3,148,960. The loans to the company were unsecured and accrued interest at 8% pa
from the date of drawdown, calculated on a daily basis. These loan funds were used by Directors to
fund their entitlements under the rights issue, with any remaining balances being repaid to the
relevant Directors from the proceeds of the rights issue.
Convertible loan notes
d)
Prior to the recapitalisation transaction, a total of 11,416,667 loan notes (excluding loan notes held
by the St Baker Energy Innovation Fund) were on issue with a face value of $6.4 million. The interest
accrued on these loan notes was $1,155,342. The total amount outstanding of $7,555,342 was repaid
through either the conversion to equity by underwriting the rights issue ($1,046,798) or settled in cash
from the proceeds of the rights issue ($6,508,544).
Strategic Placement to St Baker Energy Innovation Fund
e)
At a General Meeting of Shareholders held on 30 June 2020, Shareholders approved the issue of
67,085,100 fully paid ordinary shares to the St Baker Energy Innovation Fund at an issue price of $0.29
per share raising $19,454,679. The consideration for the shares received consisted of cash and the
retirement of both convertible loan notes and short-term loans owing.
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DIRECTORS’ REPORT
Cancellation of options
f)
As part of the capital raise transaction, the Group obtained agreement from holders of a total of
40,500,000 options (half of the options on issue at the time of the transaction) to cancel the options
for no consideration. The cancellation of the options has resulted in an acceleration of the expense
associated with the options cancelled.
During the financial year, the Company also undertook a Share Purchase Plan that provided eligible
shareholders with the opportunity to purchase up to $30,000 worth of new shares in the Company at
$0.51 per share. A total of 2,485,715 fully paid ordinary shares were issued under the Share Purchase
Plan.
There were no other significant changes in the state of affairs of the Group during the financial year.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Comments on likely developments and expected results of operations are included in the review of
operations and activities on pages 2 – 7.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
No matters or circumstances have arisen since the end of the financial year which significantly affected
or could significantly affect the operations of the Group, the results of those operations or the state
of affairs of the Group in future financial years.
ENVIRONMENTAL REGULATION
The Group is subject to environmental regulation in respect of its mining, exploration and
development activities in Australia and is committed to undertaking all its operations in an
environmentally responsible manner.
To the best of the Directors’ knowledge, the Group has adequate systems in place to ensure
compliance with the requirements of all environmental legislation and are not aware of any breach of
those requirements during the financial year and up to the date of the Directors’ report.
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INFORMATION ON DIRECTORS
The following information is current as at the date of this report.
A G Bellas. Chair – non-executive
DIRECTORS’ REPORT
Experience and expertise
Tony was appointed as Chair of the Company on 11 August 2015. He brings
over 30 years of experience in the public and private sectors. Tony was
previously CEO of the Seymour Group, one of Queensland’s largest private
investment and development companies. Prior to joining the Seymour
Group, Tony held the position of CEO of Ergon Energy, a Queensland
Government-owned corporation involved in electricity distribution and
retailing. Before that, he was CEO of CS Energy, also a Queensland
Government-owned corporation and the State’s
largest electricity
generation company, operating over 3,500 MW of gas-fired and coal-fired
plant at four locations.
Tony had a long career with Queensland Treasury, achieving the position of
Deputy Under Treasurer.
Tony is a director of the listed companies shown below and is also a director
of Loch Exploration Pty Ltd, Colonial Goldfields Pty Ltd and West Bengal
Resources (Australia) Pty Ltd.
Other current directorships Chairman of intelliHR Limited and Deputy Chairman of State Gas Limited.
Director of the Endeavour Foundation.
Former listed directorships
in last 3 years
Chairman of Corporate Travel Management Ltd (ceased 2019).
Chairman of ERM Power Ltd (ceased 2019).
Chairman of Shine Justice Limited (ceased 2020).
Special responsibilities
Interests in shares and
options
Chairman of the Board
Member of the Audit Committee
2,146,374 ordinary shares
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P M St Baker. Managing Director
DIRECTORS’ REPORT
Experience and expertise
Mr Philip St Baker is an experienced entrepreneur active in Australia and the
USA. Since 2015 Philip has been Managing Director of NOVONIX Limited.
Previously, Philip was the Managing Director of ERM Power Limited for eight
years (2006-2014) and Non-Executive Director for three years (2017-2019).
During Philip’s time with ERM Power it grew from a $15 million revenue
business to a $3 billion revenue business, became the second largest
electricity supplier to Australian business customers and was sold to Shell in
2019 for $620 million.
Prior to joining ERM Power, Philip had a 16 year career with BHP Billiton
gaining international experience in the resources sector.
In 2014 Philip received the Ernst & Young Queensland Entrepreneur of the
Year Award for Listed Companies and was a nominee for the Australian
Entrepreneur of the Year.
Philip is also a long term member of the State Advisory Board of Queensland
for the Starlight Children’s Foundation.
Other current directorships Director of St Baker Energy Holdings Pty Ltd.
Former listed directorships
in last 3 years
Non-executive Director of ERM Power Limited (ceased 2019).
Special responsibilities
Managing Director
Interests in shares and
options
21,241,526 ordinary shares
1,895,833 performance rights
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DIRECTORS’ REPORT
G A J Baynton. Executive Director
Experience and expertise
Mr Baynton founded Graphitecorp in April 2012. He has been a Director of
Australian exploration companies for over 19 years. He is founder and
Executive Director of investment and advisory firm, Orbit Capital. Mr
Baynton has experience
investment banking, merchant banking,
infrastructure investment, IPOs, public company directorships, Queensland
Treasury and the Department of Mines and Energy. He is a Fellow of the
Geological Society of London.
in
Other current directorships Non-executive Director of Superloop Limited (ASX: SLC), Non-executive
Director of intelliHR Limited (ASX: IHR), and Executive Director of State Gas
Limited.
Former listed directorships
in last 3 years
None.
Special responsibilities
Member of the Audit Committee
Executive Director.
Interests in shares and
options
29,990,019 ordinary shares
500,000 performance rights
R Cooper. Non-Executive Director
Experience and expertise
Mr Cooper is a mining engineer with more than 25 years' industry
experience, having held leadership roles across a diverse range of
commodities, both in Australia and overseas. He has a broad foundation
of operating and technical experience in both operations and project
development. Mr Cooper has previously held leadership positions with
BHP Billiton as General Manager of Leinster Nickel Operations within
Nickel West, and as Asset President of Ekati Diamonds in Canada. He more
recently held positions with Discovery Metals as General Manager-
Operations in Botswana and as General Manager-Development in their
Brisbane office. Robert is currently the CEO of Round Oak Minerals Pty
Limited (formerly CopperChem Pty Limited), a 100% owned subsidiary of
the Washington H Soul Pattinson Group of companies.
Other current directorships None
Former listed directorships
in last 3 years
Non-executive Director of Verdant Minerals Limited (ceased 2019).
Non-executive Director of Syndicated Metals Limited (ceased 2019).
Special responsibilities
Chairman of the Audit Committee.
Interests in shares and
options
517,646 ordinary shares
200,000 options
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DIRECTORS’ REPORT
Admiral R J Natter. Non-Executive Director
Experience and expertise
Robert Natter retired from active military service a decade ago and now has
more than 10 years of experience in both the government and private
sectors in the North American market.
In his Navy career, Robert Natter served as the Commander of the U.S.
Seventh Fleet operating throughout Asia and the Indian Ocean; Commander
in Chief of the U.S Atlantic Fleet; and the first Commander of U.S. Fleet
Forces, overseeing all Continental U.S. Navy bases, facilities and training
operations. For six years until 2018, Natter was Chairman of the US Naval
Academy Alumni Association Board of Trustees, representing about 60,000
living graduates. He currently serves on the Board of the Naval Academy
Foundation, and also served on the Boards of the National Navy SEAL
Museum and the Yellow Ribbon Fund.
He serves on the Board of Directors of Allied Universal Security Company
with over 200,000 employees and was previously a Director of Corporate
Travel Management (CTM), specializing in corporate employee travel
throughout Australia, New Zealand, Asia, Europe, and the United States.
He also serves on the Board of Physical Optics Corp (POC) in Torrance, CA.
Other current directorships Chairman of Physical Optics Corporation.
Former listed directorships
in last 3 years
Non-executive Director of Corporate Travel Management Limited (2014-
2020).
Special responsibilities
None.
Interests in shares and
options
1,500,000 ordinary shares
2,000,000 options
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Andrew N. Liveris. Non-Executive Director
DIRECTORS’ REPORT
Experience and expertise
A recognised global business leader with more than 40 years at the Dow
Chemical Company, Mr Liveris' career has spanned roles in manufacturing,
engineering, sales, marketing, and business and general management
around the world.
During more than a decade as Dow’s CEO, Liveris led the Company’s
transformation from a cyclical commodity chemicals manufacturing
company into a global specialty chemical, advanced materials, agro-
sciences and plastics company.
Other current directorships Non-executive director of Saudi Arabian Oil Company (Saudi Aramco) and
Worley Parsons Limited (ASX: WOR).
Non-executive director of
Corporation (NYSE: IBM).
International Business Machines
(IBM)
Former listed directorships
in last 3 years
Executive Chairman of DowDuPont Inc (NYSE: DEDO).
Chairman and Director of The Dow Chemical Company.
Special responsibilities
None.
Interests in shares and
options
4,132,794 ordinary shares
14,000,000 options
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and of each Audit Committee held
during the year ended 30 June 2020, and the number of meetings attended by each Director were:
Full meetings of Directors
Meetings of Audit Committee
A Bellas
G A J Baynton
P M St Baker
R Cooper
Admiral R J Natter
A Liveris
A
16
15
16
14
14
13
B
16
16
16
16
16
16
A
3
3
-
3
-
-
A =
B =
Number of meetings attended
Number of meetings held during the time the director held office or was a member of the committee during the year
B
3
3
-
3
-
-
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DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The Directors present the NOVONIX Limited 2020 remuneration report, outlining key aspects of our
remuneration policy and framework, and remuneration awarded this year.
The report is structured as follows:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Key management personnel (KMP) covered in this report
Remuneration policy and link to performance
Elements of remuneration
Link between remuneration and performance
Remuneration expenses for executive KMP
Contractual arrangements for executive KMP
Non-executive Director arrangements
Additional statutory information
(a)
Key management personnel covered in this report
Non-executive and Executive Directors (see pages 16 to 20 for details about each Director)
A Bellas (Non-executive Chairman)
G A J Baynton (Executive Director)
P M St Baker (Managing Director)
R Cooper (Non-executive Director)
A Liveris (Non-executive Director)
R Natter (Non-executive Director)
Other key management personnel
Name
J C Burns
D A Stevens
N Liveris
Position
Group COO and CEO of NOVONIX Battery
Testing Services Inc and PUREgraphite LLC.
Group CTO
Group
Business
President
Development and CFO of NOVONIX Battery
Testing Services Inc and PUREgraphite LLC.
Vice
–
Changes since the end of the reporting period
David Stevens ceased being a KMP from 1 July 2020.
There have been no changes to key management personnel since the end of the reporting period.
(b)
Remuneration policy and link to performance
The role of a remuneration committee is performed by the full Board of Directors. The board reviews
and determines the remuneration policy and structure annually to ensure it remains aligned to
business needs and conforms with our remuneration principles. In particular, the board aims to
ensure that remuneration practices are:
•
•
•
•
competitive and reasonable, enabling the Company to attract and retain key talent
aligned to the Company’s strategic and business objectives and the creation of shareholder
value
transparent and easily understood, and
align with shareholder interests and are acceptable to shareholders
16
For personal use only
REMUNERATION REPORT (CONTINUED)
DIRECTORS’ REPORT
Element
Purpose
Performance
metrics
Nil
Potential value
Positioned at
median market
rate
for FY
Changes
2020
None.
Fixed
remuneration
(FR)
STI
LTI
Provide
competitive market
salary including
superannuation
and non-monetary
benefits
Reward for in-year
performance
Based on individual
KPI’s.
Alignment to long-
term shareholder
value
Market price and
performance
vesting conditions
100% of base
salary (if bonus
paid in cash)
150% of base
salary (if bonus
paid in shares)
Variable subject
to share price.
None.
None.
Balancing short-term and long-term performance
Annual incentives are set at a maximum of 100% of base salary (150% if paid in shares) in order to
drive performance.
Long term incentives are assessed periodically and are designed to promote long-term stability in
shareholder returns.
Assessing performance
The board of directors is responsible for assessing performance against KPIs and determining the STI
and LTI to be paid.
(c)
(i)
Elements of remuneration
Fixed annual remuneration (FR)
Executives receive their fixed remuneration as cash. FR is reviewed annually and is benchmarked
against market data for comparable roles in companies in a similar industry and with similar market
capitalisation. The board has the flexibility to take into account capability, experience, value to the
organisation and performance of the individual. The Group has not engaged an external remuneration
consultant during FY2020.
Superannuation is included in FR for executives. In FY 2020, fixed remuneration was not increased.
(ii)
Short term incentives
Short term incentives for all key management personnel have been in place for FY2020. All KMP are
eligible to receive a cash bonus of up to 100% of their base salary at the end of the financial year
subject to the executive achieving the KPIs set for them during the financial year.
17
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
The Company reserves the right to pay any STI cash bonus by way of an issue of fully paid ordinary
shares at the sole discretion of the Board of Directors. If the Company determines that the cash bonus
is to be paid in shares, the value of the shares the executive shall receive will be calculated at 150% of
the cash bonus amount. For the purpose of calculating the number of shares to be issued to the
executive, the issue price of the shares shall be based on the 10 day volume weighted average price
of shares.
If an executive does not achieve each of the KPIs during the financial year, the Managing Director shall
determine the appropriate pro rata STI cash bonus to be received by the Executive. The Board of
Directors shall make this determination for both the Managing Director and the Executive Director.
Structure of the short-term incentive plan
Feature
Max opportunity
Performance
metrics
Delivery of STI
Board discretion
25%
June 2020
Target
June 2020
Weighting
25%
Reason for selection
Focus of the Groups
growth strategy.
Focus of the Groups
growth strategy.
Description
KMP executives: 100% of fixed remuneration if paid in cash; 150% of fixed
remuneration if paid in shares.
The STI metrics align with our strategic priorities.
Metric
PUREgraphite production,
sales and expansion targets
Battery Technology
Solutions business
expansion and product
development targets
Execution of business
strategy, and management
of operations, including
investor communications.
STI awarded in cash will be paid after the end of the financial year. STI awarded in
shares will be awarded as soon as practical after the end of the financial year, and
where subject to shareholder approval, after shareholder approval is received.
The Board has discretion to adjust remuneration outcomes up or down to avoid
any inappropriate or anomalous reward outcomes, including reducing (down to
zero, if appropriate) any deferred STI award.
Focus on the Groups
growth strategy and
shareholder value.
Ongoing
50%
Long-term incentives
(iii)
Executive KMP participate, at the Board’s discretion, in the Long Term Incentive Program (“LTIP”)
comprising one-off grants of options or performance rights, with varying vesting conditions. The
company does not have a formal LTIP, rather incentives are awarded at the discretion of the Board.
Performance Rights
No performance rights have been awarded to Directors or KMP during the financial year.
Options
No options have been awarded to Directors or KMP during the financial year.
18
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
(d)
Link between remuneration and performance
During the year, the Group has incurred losses from its principal activities supplying advanced battery
materials, equipment and services to the global Lithium-ion battery market. As the Company is still
growing the business, the link between remuneration, corporate performance and shareholder value
is difficult to define. The Company’s share price is influenced by, inter alia, fluctuations in current and
expected demand for electric vehicles and energy storage systems, technology adoption, international
market prices for battery anode materials, and general market sentiment towards the battery
materials and lithium-ion battery sectors, and, as such, increases or decreases in share price may occur
quite independently of Executive performance.
Given the nature of the Group’s activities and the consequential operating results, no dividends have
been paid. There have been no returns of capital in the current or previous financial periods. The
details of market price movements are as follows:
Year end 30 June 2020
Year end 30 June 2019
Year end 30 June 2018
Year end 30 June 2017
Year end 30 June 2016
IPO price - 2 December 2015
Share price
$0.87
$0.44
$0.61
$0.75
$0.35
$0.20
(e)
Remuneration expenses for executive KMP
The following table shows details of the remuneration expense recognised for the Group’s executive
key management personnel for the current and previous financial year measured in accordance with
the requirements of the accounting standards.
19
For personal use only
REMUNERATION REPORT (CONTINUED)
Fixed remuneration
Variable remuneration
Supplementary information
DIRECTORS’ REPORT
Name
Executive Directors
G A J Baynton
P M St Baker
Year
Cash salary
2020
2019
2020
2019
91,324
91,324
103,325
122,318
Other key management personnel (group)
C Burns
2020
2019
2020
2019
2020
2019
281,500
227,572
244,516
215,664
246,164
224,204
D Stevens
N Liveris
Post-
employment
benefits
Non-
monetary
benefits
Performance
rights*
STI
Options*
Total
Less: Accounting
value of
cancelled
options
Revised
remuneration
totals
8,676
8,676
9,816
11,620
-
-
-
-
17,276
14,895
- 145,688
-
-
- 212,461
-
-
- 217,285
95,335
-
-
-
-
51,865
- 186,258
52,832
-
5,848
(7,420)
11,696
(14,840)
572,128
320,592
114,188
21,608
641,184
978,482
943,216 1,062,314
38,596 2,010,940 2,548,321
43,832 1,262,918 1,629,657
263,814
19,298
851,653 1,141,098
21,916
851,398
398,776
2,924
421,791
134,323
(4,463)
-
(320,592)
-
(641,184)
-
(788,932)
-
-
-
(15,723)
-
251,536
114,188
337,298
1,062,314
1,759,389
1,629,657
263,814
1,141,098
835,675
421,791
Non-executive Director
A Bellas
R Natter
R Cooper
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 761,692
- 200,032
* Performance rights and options are expensed over the performance period, including for options that have been awarded to individuals but have not yet formally been granted, which includes the year in which the rights and
options are awarded / granted and the subsequent vesting period.
388,321
-
93,888
-
36,311
-
37,525
-
377,535
-
426,631
-
- 2,744,206 2,777,056
- 2,452,717 2,485,567
78,362 6,800,265 8,793,366
39,025 6,106,879 7,412,659
(333,571)
-
-
-
(117,675)
-
-
-
(2,217,677)
-
50,000
50,000
30,000
30,000
30,000
30,000
30,000
30,000
1,106,829
1,021,082
4,750
4,750
2,850
2,850
-
-
2,850
2,850
46,218
45,641
54,750
93,888
36,311
37,525
259,860
426,631
2,777,056
2,485,567
6,575,689
7,412,659
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
333,571
39,138
3,461
4,675
347,535
396,631
Total KMP
remuneration expensed
A Liveris
20
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Supplementary information
The amounts in relation to options and performance rights shown in the above table are as expensed
in the statement of profit or loss and other comprehensive income, in accordance with AASB 2 Share
based payment. This may not necessarily reflect the benefit actually received by the KMP in that year.
In the above table, supplementary information has been presented which adjusts the total
remuneration by the expense recognised during FY20 in relation to options that have been cancelled
as part of the capital raising. The presentation of this supplementary information is not in accordance
with accounting standards.
(f)
Contractual arrangements with executive KMP’s
Component
Fixed
remuneration
Philip St Baker
$150,000 (part-
time)
Inclusive of
superannuation.
Contract duration Ongoing
contract
6 months
Notice by
individual
company
the
/
Greg Baynton
$100,000 (part-
time)
Inclusive of
superannuation
Ongoing
contract
6 months
Chris Burns
$281,500
(CAD$250,000)
David Stevens Nick Liveris
$244,516
(CAD$205,000)
$246,164
(USD$165,000)
Ongoing
contract
12 months
Ongoing
contract
12 months
Ongoing
contract
12 months
(g)
Non-executive Director arrangements
The non-executive chairman receives fees of $50,000 per annum plus superannuation. Other non-
executive directors receive $30,000 per annum plus superannuation. Fees are reviewed annually by
the board taking into account comparable roles. The current base fees were reviewed with effect
from 1 December 2015.
The maximum annual aggregate non-executive Directors’ fee pool limit is $250,000 (excluding share
based payments) and was set out in the 2015 Prospectus.
All Non-executive Directors enter into a service agreement with the company in the form of a letter
of appointment. The letter summarises the board policies and terms, including remuneration relevant
to the office of Director.
(h)
Additional statutory information
Performance based remuneration granted, forfeited and cancelled during the year
(i)
The table below shows for each KMP how much of their STI cash bonus was awarded and how much
was forfeited. It also shows the value of options and performance rights that were granted, exercised,
forfeited and cancelled during FY 2020. The number of options and performance rights and
percentages vested/forfeited for each grant are disclosed in section (iv) on pages 24 to 27 below.
21
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Total STI bonus
Total opportunity
LTI performance rights
LTI Options
If paid in
cash
If paid in
shares
Awarded
%
Forfeited
%
Value
granted
$
Value
awarded
$
Value
exercised
$
Value
granted
$
Value
awarded
$
Value
cancelled*
$
Value
exercised
$
150,000
100,000
-
-
-
-
281,500
244,516
246,164
225,000
150,000
-
-
-
-
422,250
366,774
369,246
81%
81%
-
-
-
-
81%
-
81%
19%
19%
-
-
-
-
19%
100%
19%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
684,400~
342,200~
342,200~
-
3,079,800~
342,200~
-
-
1,309,800~
-
-
-
-
-
-
-
-
-
264,754
132,377
132,377
-
-
48,627
610,946
-
-
-
-
-
-
-
-
-
-
-
2020
P M St Baker
G A J Baynton
A Bellas
R Cooper
A Liveris
R Natter
C Burns
D Stevens
N Liveris
~
*
Options and performance rights were awarded in the prior financial year and subsequently granted following shareholder approval at either the Shareholder meeting held on 31 July 2019 or the 2019 AGM. The value
represents the fair value of the options and performance rights at the date shareholder approval was received.
The cancellation of the options has resulted in an acceleration of the share-based payment expense, with the unexpensed portion of the share option fair values being expensed in full at the date of cancellation, which
is what the value in the table represents.
(iii)
Terms and conditions of the share-based payment arrangements
Options
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting period are as follows:
22
For personal use only
REMUNERATION REPORT (CONTINUED)
Grant date
21/11/2017
21/11/2017
22/11/2018
22/11/2018
Vesting and
exercise
date
30/06/2020
14/07/2019
06/03/2020
28/07/2019
29/08/2019
22/11/2018
29/08/2020
22/11/2018
29/08/2021
22/11/2018
24/05/2019
30/06/2020
24/05/2019 30/06/2022~
31/07/2019
30/06/2020
31/07/2019 30/06/2022~
13/03/2019 31/05/2022~
13/03/2019 31/03/2023~
13/03/2019 30/06/2023~
13/03/2019 28/03/2024~
13/03/2019 31/03/2024~
13/03/2019 31/05/2024~
13/03/2019 30/06/2024~
13/03/2019 31/03/2025~
13/03/2019 30/04/2025~
13/03/2019 30/04/2025~
21/11/2019 31/05/2022~
21/11/2019 31/03/2023~
21/11/2019 30/06/2023~
21/11/2019 28/03/2024~
21/11/2019 31/03/2024~
21/11/2019 31/05/2024~
21/11/2019 30/06/2024~
21/11/2019 31/03/2025~
21/11/2019 30/04/2025~
21/11/2019 30/04/2025~
Expiry date
01/07/2021
14/07/2020
06/03/2023
Cessation of
employment
29/08/2023
29/08/2023
29/08/2023
05/08/2024
05/08/2024
05/08/2024
05/08/2024
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
Number
Under
option
2,000,000
250,000
316,667
1,500,000
500,000
500,000
500,000
500,000
500,000
7,500,000
7,500,000
1,000,000
Number
cancelled
(Note 11)
-
-
250,000
1,500,000
-
500,000
500,000
-
-
2,000,000
2,000,000
150,000
Exercise
price
$0.66
$1.10
$1.40
$0.80
$0.90
$1.20
$1.40
$0.50
$0.50
$0.50
$0.50
$0.50
Value per
option at
grant date
$1.14
$0.90
$0.15
$0.28
$0.20
$0.18
$0.17
$0.32
$0.34
$0.33
$0.35
$0.54
1,000,000
150,000
$0.50
$0.55
1,000,000
150,000
$0.50
$0.56
1,000,000
150,000
$0.50
$0.56
1,000,000
150,000
$0.50
$0.57
1,000,000
150,000
$0.50
$0.57
1,000,000
150,000
$0.50
$0.57
1,000,000
150,000
$0.50
$0.57
1,000,000
150,000
$0.50
$0.58
1,000,000
150,000
$0.50
$0.58
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
-
-
-
-
-
-
-
-
-
-
$0.50
$0.36
$0.50
$0.37
$0.50
$0.38
$0.50
$0.38
$0.50
$0.39
$0.50
$0.39
$0.50
$0.39
$0.50
$0.39
$0.50
$0.40
$0.50
$0.40
DIRECTORS’ REPORT
Performance
achieved
%
vested
100%
100%
100%
-
100%
-
-
100%
-
100%
-
-
100%
100%
100%
-
100%
-
-
100%
-
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
~ Vesting is subject to satisfaction of performance related vesting conditions. The vesting date shown represents an estimate of when vesting conditions will
be satisfied.
23
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
The number of options over ordinary shares in the Company provided as remuneration to key
management personnel is shown in the table below on page 25. The options carry no dividend or
voting rights. When exercisable, each option is convertible into one ordinary share of NOVONIX
Limited.
Performance rights
The terms and conditions of each grant of performance rights affecting remuneration in the current
or a future reporting period are as follows:
P M St Baker
G A J Baynton
C Burns
D Stevens
N Liveris
Grant date
22/11/2018
22/11/2018
13/02/2018
13/02/2018
22/11/2018
Vesting date
01/01/2020
01/01/2020
01/01/2020
01/01/2020
01/01/2020
Grant date value
$0.05
$0.05
$0.33
$0.33
$0.05
The number of performance rights over ordinary shares in the Company provided as remuneration to
key management personnel is shown on page 26. The performance rights carry no dividend or voting
rights.
These performance rights were subject to the following performance related vesting conditions:
•
•
•
•
The executive remains employed in the capacity of an executive as at the vesting date;
1,000 tonnes of sales contracts for PUREgraphite anode material;
Production capability of 1,000 tonnes per annum at PUREgraphite;
Expansion to 10,000 tonnes per annum planned and costed ready for final investment decision
with funding plan;
• Maintained or exercised rights to increase the Group’s interest in PUREgraphite by 25%;
•
Sales revenue for NOVONIX Battery Testing Services, Inc. exceeding CAD$3 million in any 12
month period; and
The 10 day VWAP of NOVONIX’s shares exceeds $1.575 at the vesting date.
•
Although not all vesting conditions were satisfied, the overall performance of the Company and the
Executives has been high, the board awarded 60% of the long-term incentive on a discretionary basis.
When exercisable, each performance right is convertible into one ordinary share of NOVONIX Limited.
If an executive ceases employment before the rights vest, the rights will be forfeited, except in limited
circumstances that are approved by the board on a case-by-case basis.
(iv)
Reconciliation of options, performance rights, ordinary shares and loan notes held by KMP
The table below shows a reconciliation of options held by each KMP from the beginning to the end of
FY2020. No options were forfeited during the year. As part of the capital raise transaction (refer note
11), the Group obtained agreement of KMP to cancel options for no consideration. The cancellation
of the options has resulted in an acceleration of the expense associated with the options cancelled.
24
For personal use only
REMUNERATION REPORT (CONTINUED)
DIRECTORS’ REPORT
Balance at the start of the year
Unvested
Vested
Granted as
compensation
Vested
Balance at the end of the year
Number
%
Cancelled
Vested and exercisable
Unvested
Options
2020
Name & Grant dates
R Natter
21 Nov 2017
22 Nov 2018
31 July 2019
P M St Baker
21 October 2016
31 July 2019
A Bellas
22 Nov 2018
31 July 2019
G Baynton
31 July 2019
R Cooper
22 Nov 2018
A Liveris
21 Nov 2017
31 July 2019
C Burns
27 June 2017
13 March 2019
24 May 2019
D Stevens
27 June 2017
N Liveris
22 Nov 2018
31 July 2019
21 November 2019
250,000
1,500,000
-
-
-
500,000
500,000
-
-
-
1,000,000
250,000
500,000
500,000
-
-
-
2,000,000
-
1,000,000
250,000
-
500,000
-
-
1,000,000
250,000
500,000
33%
25%
50%
-
50%
33%
50%
-
1,000,000
-
-
2,000,000
750,000
1,000,000
-
-
1,000,000
500,000
50%
1,000,000
66,667
133,333
-
66,667
33%
2,000,000
-
-
10,000,000
1,000,000
3,000,000
-
3,000,000
-
-
-
3,000,000
-
9,000,000
2,000,000
4,500,000
-
-
500,000
-
-
-
-
-
-
-
3,000,000
1,500,000
-
40%
50%
-
-
50%
750,000
1,000,000
500,000
-
-
500,000
-
-
-
-
-
200,000
-
-
-
-
-
-
5,000,000
4,500,000
-
4,500,000
-
-
500,000
-
8,500,000
500,000
-
-
1,500,000
1,500,000
-
1,500,000
-
-
-
-
-
-
1,000,000
2,500,000
-
500,000
-
-
50%
-
1,500,000
-
-
-
500,000
-
-
500,000
2,500,000
25
For personal use only
REMUNERATION REPORT (CONTINUED)
There were no options exercised by KMP during the financial year.
The table below shows how many performance rights were granted and vested during the year. No performance rights were forfeited during the year.
Performance rights
DIRECTORS’ REPORT
Balance at the start of
the year
Unvested
Vested
Balance at the end of
the year
Unvested
Vested
Maximum
value yet
to vest*
$
Name
P M St Baker
-
-
-
-
-
-
The maximum value of the performance rights yet to vest has been determined as the amount of the grant date fair value of the rights that are yet to be expensed. The minimum value of deferred shares yet to vest is nil, as
the shares will be forfeited if the vesting conditions are not met.
-
1,000,000
500,000
500,000
250,000
250,000
895,833
-
-
-
-
-
895,833
600,000
300,000
300,000
150,000
150,000
-
400,000
200,000
200,000
100,000
100,000
G Baynton
C Burns
D Stevens
N Liveris
-
-
-
-
-
-
*
Exercised
during the
year
Vested
during
the year
-
600,000
300,000
300,000
150,000
150,000
Granted as
compensation
-
-
-
-
-
-
Year
granted
2016
2019
2019
2018
2018
2019
26
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Shareholdings
2020
Name
Ordinary shares
A Bellas
G A J Baynton
P M St Baker
R Cooper
R Natter
A Liveris
C Burns
D Stevens
N Liveris
Balance at
the start of
the year
Participation
in entitlement
offer
Participation
in Share
Purchase Plan
Shares
disposed
Balance at
the end of
the year
1,179,354
29,561,827
14,976,903*
200,000
750,000
2,007,574
1,765,968
2,609,948
-
908,197
369,369
6,205,800
258,823
750,000
2,066,397
1,765,968
2,609,948
-
58,823
58,823
58,823
58,823
-
58,823
-
-
-
-
-
-
-
-
(1,200,000)
(1,309,948)
-
2,146,374
29,990,019
21,241,526
517,646
1,500,000
4,132,794
2,331,936
3,909,948
-
* includes 5,000,000 shares issued on the exercise of 5,000,000 options in the prior year that were funded by a loan agreement
between Mr Philip St Baker and the Company. The Company has placed a holding lock over the shares to secure repayment of
the loan.
(v)
Other transactions with key management personnel
During the financial year, Philip St Baker was paid rent totalling $77,579 (USD$52,000), for the use of
property owned by Mr St Baker in Colorado, USA. Mr St Baker’s salary has been adjusted down by
$36,859 to reflect the additional benefit Mr St Baker is receiving.
There have been no other transactions with key management personnel.
End of remuneration report (audited)
27
For personal use only
DIRECTORS’ REPORT
SHARES UNDER OPTION AND PERFORMANCE RIGHTS
Unissued ordinary shares
Unissued ordinary shares of NOVONIX Limited under option at the date of this report are as follow:
Date options granted
Expiry date
Exercise price
Number under option
27 June 2017
14 July 2017
21 November 2017
7 February 2018
2 November 2018
6 December 2018
22 November 2018
22 November 2018
22 November 2018
22 November 2018
22 November 2018
13 March 2019
14 March 2019
24 May 2019
31 July 2019
5 August 2019
21 November 2019
17 December 2019
4 February 2020
Cessation of
employment
14 July 2022
1 July 2021
7 February 2023
2 November 2023
6 December 2023
6 March 2023
6 March 2023
6 March 2023
29 August 2023
29 August 2023
Cessation of
employment
Cessation of
employment
5 August 2024
5 August 2024
Cessation of
employment
Cessation of
employment
Cessation of
employment
Cessation of
employment
$0.74
$0.90
$0.66
$0.785
$0.55
$0.55
$0.90
$1.20
$1.40
$0.70
$0.90
$0.50
$0.50
$0.50
$0.50
$0.50
$0.50
$0.50
$0.50
1,500,000
450,000
5,000,000
100,000
160,000
40,000
66,666
66,667
66,667
500,000
500,000
11,000,000
666,667
1,000,000
11,000,000
2,500,000
2,500,000
1,000,000
1,000,000
Unissued ordinary shares of NOVONIX Limited under performance right at the date of this report total
3,395,833. 895,833 of these performance rights were the performance rights granted as
remuneration to Mr St Baker during previous years. The remaining 2,500,000 performance rights
were granted to KMP during previous years.
No performance right holder or option holder has any right to participate in any other share issue of
the Company or any other entity.
28
For personal use only
DIRECTORS’ REPORT
INSURANCE OF OFFICERS AND INDEMNITIES
Insurance of officers
During the financial year, NOVONIX Limited paid a premium of $122,000 to insure the Directors and
Secretaries of the Company.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings
that may be brought against the officers in their capacity as officers of entities in the Group, and any
other payments arising from liabilities incurred by the officers in connection with such proceedings.
This does not include such liabilities that arise from conduct involving a wilful breach of duty by the
officers or the improper use by the officers of their position or of information to gain advantage for
themselves or someone else or to cause detriment to the Company. It is not possible to apportion the
premium between amounts relating to the insurance against legal costs and those relating to other
liabilities.
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.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court
under section 237 of the Corporations Act 2001.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit
duties where the auditor’s expertise and experience with the Company and/or the Group are
important.
The Board of Directors has considered the position and, in accordance with advice received from the
Audit Committee, is satisfied that the provision of the non-audit services is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001. The Directors
are satisfied that the provision of non-audit services by the auditor, as set out below, did not
compromise the auditor independence requirements of the Corporations Act 2001 for the following
reasons:
•
•
all non-audit services have been reviewed by the Audit Committee to ensure they do not
impact the impartiality and objectivity of the auditor
none of the services undermine the general principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional Accountants.
During the year there were no fees were paid or payable for non-audit services provided by the auditor
of the parent entity (2019: Nil).
29
For personal use only
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations
Act 2001 is set out on page 31.
This report is made in accordance with a resolution of Directors.
A Bellas
Chairman
Brisbane
21 September 2020
END OF DIRECTORS’ REPORT
30
For personal use only Auditor’s Independence Declaration
As lead auditor for the audit of Novonix Limited for the year ended 30 June 2020, I declare that to the
best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Novonix Limited and the entities it controlled during the period.
Michael Shewan
Partner
PricewaterhouseCoopers
Brisbane
21 September 2020
PricewaterhouseCoopers, ABN 52 780 433 757
480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au
31
Liability limited by a scheme approved under Professional Standards Legislation.
For personal use only
CORPORATE GOVERNANCE STATEMENT
CORPORATE GOVERNANCE STATEMENT
NOVONIX Limited and the board are committed to achieving and demonstrating the highest standards
of corporate governance. NOVONIX Limited has reviewed its corporate governance practices against
the Corporate Governance Principles and Recommendations (3rd edition) published by the ASX
Corporate Governance Council.
The 2020 corporate governance statement is dated as at 30 June 2020 and reflects the corporate
governance practices in place throughout the 2020 financial year. The 2020 corporate governance
statement was approved by the board on 21 September 2020. A description of the Group's current
corporate governance practices is set out in the Group's corporate governance statement which can
be viewed at https://www.novonixgroup.com/governance/.
32
For personal use only ANNUAL FINANCIAL REPORT – 30 JUNE 2020
NOVONIX LIMITED
ABN 54 157 690 830
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Financial statements
Consolidated statement of profit or loss and other comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ declaration
34
35
36
37
38
93
These financial statements are consolidated financial statements for the Group consisting of NOVONIX
Limited and its subsidiaries. A list of major subsidiaries is included in note 27.
The financial statements are presented in the Australian currency.
NOVONIX Limited is a Company limited by shares, incorporated and domiciled in Australia.
All press releases, financial reports and other
www.novonixgroup.com.
information are available at our website:
33
For personal use only
Consolidated statement of profit or loss and other comprehensive
income for the year ended 30 June 2020
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Continuing operations
Revenue from contracts with customers
Other income
Cost of goods sold
Administrative and other expenses
Borrowing costs
Impairment losses
Depreciation and amortisation expenses
Marketing and project development costs
Share based compensation
Employee benefits expense
Share of net losses of joint ventures
Loss before income tax expense
Income tax (expense) benefit
Loss from continuing operations
Other comprehensive income for the year, net of tax
Items that may be reclassified to profit or loss
Foreign exchange differences on translation of foreign
operations
Consolidated
2020
$
2019
$
Notes
4
5
6
6
6
7
4,253,435
844,877
(1,245,187)
(3,115,665)
(5,330,961)
-
(1,380,303)
(2,423,546)
(7,558,953)
(4,072,223)
-
1,817,049
3,024,684
(741,280)
(1,536,897)
(1,565,032)
(15,918,925)
(494,948)
(1,560,551)
(6,673,510)
(2,104,176)
(751,981)
(20,028,526)
-
(26,505,567)
383,655
(20,028,526)
(26,121,912)
550,243
809,396
Total comprehensive loss for the year
(19,478,283)
(25,312,516)
Earnings per share for loss from continuing operations
attributable to the ordinary equity holders of the
Company:
Basic earnings per share
Diluted earnings per share
Cents
Cents
10
10
(14.7 cents)
(14.7 cents)
(21.2 cents)
(21.2 cents)
The above consolidated statement of profit or loss and other comprehensive income should be read
in conjunction with the accompanying notes.
34
For personal use only
Consolidated balance sheet
As at 30 June 2020
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventory
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Exploration and evaluation assets
Intangible assets
Other assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Contract liabilities
Lease liabilities
Borrowings
Total current liabilities
Non-current liabilities
Lease liabilities
Borrowings
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Consolidated
2020
$
2019
$
Notes
13
14
15
16
21
17
18
19
20
21
22
21
22
38,807,662
1,227,792
1,366,985
6,054,664
683,103
1,116,991
41,402,439
7,854,758
9,620,797
2,853,427
2,988,921
18,367,245
24,589
5,984,517
-
2,838,749
18,233,245
8,630
33,854,979
27,065,141
75,257,418
34,919,899
3,494,227
98,783
141,124
274,917
1,404,366
580,845
-
4,145,069
4,009,051
6,130,280
2,778,979
1,937,095
-
13,016,841
4,716,074
13,016,841
8,725,125
19,147,121
66,532,293
15,772,778
23
24
99,851,510
30,537,967
(63,857,184)
38,163,405
21,438,031
(43,828,658)
Total equity
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
66,532,293
15,772,778
35
For personal use only
Consolidated statement of changes in equity
For the year ended 30 June 2020
Consolidated Group
Balance at 1 July 2018
Loss for the year
Other comprehensive income
Total comprehensive income
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs
Equity component of convertible notes, net of
transaction costs
Share-based payments
Contributed
equity
$
38,163,405
-
-
-
Accumulated
losses
$
(17,706,746)
(26,121,912)
-
(26,121,912)
-
-
-
-
-
-
Share based
payments
reserve
$
8,585,446
-
-
-
-
-
6,673,510
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Reserves
Foreign
currency
translation
reserve
$
140,608
-
809,396
809,396
Convertible
loan note
reserve
$
2,426,120
-
-
-
Total
$
31,608,833
(26,121,912)
809,396
(25,312,516)
-
-
-
-
-
2,802,951
-
2,802,951
6,673,510
Balance at 30 June 2019
38,163,405
(43,828,658)
15,258,956
950,004
5,229,071
15,772,778
Loss for the year
Other comprehensive income
Total comprehensive income
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs
Equity component of convertible notes, net of
transaction costs
Share-based payments
-
-
-
(20,028,526)
-
(20,028,526)
61,688,105
-
-
-
-
-
-
-
-
-
-
7,558,952
-
550,243
550,243
-
-
-
-
-
-
-
(20,028,526)
550,243
(19,478,283)
61,688,105
990,741
-
990,741
7,558,952
Balance at 30 June 2020
99,851,510
(63,857,184)
22,817,908
1,500,247
6,219,812
66,532,293
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
36
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Consolidated statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers (GST inclusive)
Payments to suppliers and employees (GST inclusive)
Interest received
Income taxes paid
Payment of borrowing costs
Consolidated
2020
$
2019
$
Notes
4,386,441
(9,748,625)
723
-
(232,055)
2,613,477
(6,464,050)
4,533
-
(154,047)
Net cash outflow from operating activities
26
(5,593,517)
(4,000,087)
Cash flows from investing activities
Payments for exploration assets
Net outflow from the acquisition of PUREgraphite LLC
Payments / refunds of security deposits
Payments for property, plant and equipment
(146,195)
-
(16,369)
(5,339,448)
(270,027)
(5,195,171)
(500)
(1,888,231)
Net cash outflow from investing activities
(5,502,012)
(7,353,929)
Cash flows from financing activities
Proceeds on issue of shares
Proceeds on issue of loan notes (net of expenses)
Payment of capital raising costs
Proceeds from borrowings
Principal elements of lease repayments
Repayment of borrowings
45,845,239
-
(1,308,596)
6,603,722
(141,968)
(6,996,422)
-
12,334,899
-
4,582,160
-
(56,319)
Net cash inflow from financing activities
44,001,975
16,860,740
Net increase (decrease) in cash and cash equivalents
32,906,446
5,506,724
Effects of foreign currency
Cash and cash equivalents at the beginning of the year
(153,448)
6,054,664
182,348
365,592
Cash and cash equivalents at the end of the year
13
38,807,662
6,054,664
The above consolidated statement of cash flows should be read in conjunction with the accompanying
notes.
37
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies
Basis of preparation
These general purpose financial statements have been prepared in accordance with the Corporations Act
2001, Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board
and International Financial Reporting Standards as issued by the International Accounting Standards
Board. The Group is a for-profit entity for financial reporting purposes under Australian Accounting
Standards. Material accounting policies adopted in the preparation of these financial statements are
presented below and have been consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have been prepared on an accruals basis and
are based on historical costs, modified, where applicable, by the measurement at fair value of selected
non-current assets, financial assets and financial liabilities.
Going concern
The financial report has been prepared on a going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and settlement of liabilities in the normal course of
business.
As disclosed in the financial report, the consolidated entity incurred a net loss of $20,028,526 (2019:
$26,121,912) and net operating cash outflows of $5,593,517 (2019: $4,000,087) for the year ended 30
June 2020. As at 30 June 2020, the consolidated entity has net assets of $66,532,293 (2019: $15,772,778).
The ability of the consolidated entity to continue as a going concern is principally dependent upon one or
more of the following:
•
•
•
the successful and profitable growth of the battery materials, battery consulting and battery
technology businesses;
the ability of the consolidated entity to meet its cashflow forecasts; and
the ability of the consolidated entity to raise capital as and when necessary and/or secure
prepayments from customers for product.
These conditions give rise to material uncertainty which may cast significant doubt over the consolidated
entity’s ability to continue as a going concern.
The directors believe that the going concern basis of preparation is appropriate due to the following
reasons:
• during the financial year the Company successfully raised $63m as set out in Note 11 and also has
a strong history of being able to raise capital from debt and equity sources;
• The directors believe there is sufficient cash available for the consolidated entity to continue
operating and scale the PUREgraphite business over the next 12 months and beyond.
The Directors have considered the impact of Covid 19 and found that the pandemic has not had a
significant effect on the Company’s ability to continue as a going concern, as evidenced by the capital
raising outlined in Note 11.
38
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
Should the consolidated entity be unable to continue as a going concern, it may be required to realise its
assets and extinguish its liabilities other than in the ordinary course of business, and at amounts that
differ from those stated in the financial report.
This financial report does not include any adjustments relating to the recoverability and classification of
recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that
may be necessary should the consolidated entity be unable to continue as a going concern.
The financial statements were authorised for issue by the Directors on 21 September 2020. The Directors
have the power to amend and reissue the financial statements.
a.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
NOVONIX Limited (‘Company’ or ‘Parent Entity’) as at 30 June 2020 and the results of all
subsidiaries for the year then ended. NOVONIX 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.
Where equity instruments are issued in a business combination, the fair value of the instruments
is their published market price as at the date of exchange. Transaction costs arising on the issue of
equity instruments are recognised directly in equity. The consideration transferred also includes
the fair value of any asset or liability resulting from a contingent consideration arrangement.
With limited exceptions, all identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair values at the acquisition date.
The excess of the consideration transferred, amount of any non-controlling interest in the acquired
entity, over the net fair value of the Group's share of the identifiable net assets acquired is
recognised as goodwill. If the consideration transferred of the acquisition is less than the Group's
share of the net fair value of the identifiable net assets of the subsidiary, the difference is
recognised as a gain in the profit and loss in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, but only after a reassessment of the identification and measurement of
the net assets acquired.
39
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
Where settlement of any part of the cash consideration is deferred, the amounts payable in the
future are discounted to their present value, as at the date of exchange. The discount rate used is
the entity's incremental borrowing rate, being the rate at which a similar borrowing could be
obtained from an independent financier under comparable terms and conditions.
b.
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.
40
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
c.
Revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the Group and the
revenue can be reliably measured. Revenue is measured at the fair value of the consideration
received or receivable.
Sales of Goods
Revenue for the hardware is recognised at a point in time when the hardware is delivered, the legal
title has passed and the customer has accepted the hardware.
Consulting services
The consulting division provides battery cell design, implementation and support services
under
fixed-price and variable price contracts. Revenue from providing services is recognised in the
accounting period in which the services are rendered. For fixed-price contracts, revenue is
recognised based on the actual service provided to the end of the reporting period as a
proportion of the total services to be provided because the customer receives and uses the benefits
simultaneously. This is determined based on the actual labour hours spent relative to the total
expected labour hours.
Where the contracts include multiple performance obligations, the transaction price will be
allocated to each performance obligation based on the stand-alone selling prices. Where these are
not directly observable, they are estimated based on expected cost plus margin.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
OTHER INCOME
Interest
Interest income 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.
Grant revenue
Grants from government bodies are recognised at their fair value where there is a reasonable
assurance that the grant will be received and the group will comply with all attached conditions.
41
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
d. Operating segments
Operating segments are presented using the ‘management approach’, where the information
presented is on the same basis as the internal reports provided to the Chief Operating Decision
Makers (‘CODMs’). The CODMs is responsible for the allocation of resources to operating segments
and assessing their performance.
e.
Current and non-current classification
Assets and liabilities are presented in the balance sheet based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or
consumed in normal operating cycle; it is held primarily for the purpose of trading; it is expected
to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent
unless restricted from being exchanged or used to settle a liability for at least 12 months after the
reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in normal operating cycle;
it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at
least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
f.
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 balance sheet.
g.
Other receivables
Other receivables are recognised at amortised cost, less any provision for impairment.
42
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
h.
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured
products includes direct materials, direct labour and an appropriate proportion of variable and
fixed overheads. Costs are assigned to individual items of inventory on the basis of weighted
average costs.
i.
Exploration and evaluation assets
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area
of interest. Such expenditures comprise net direct costs and an appropriate portion of related
overhead expenditure but do not include overheads or administration expenditure not having a
specific nexus with a particular area of interest. These costs are only carried forward to the extent
that they are expected to be recouped through the successful development of the area or where
activities in the area have not yet reached a stage which permits reasonable assessment of the
existence of economically recoverable reserves and active or significant operations in relation to
the area are continuing.
A regular review has been undertaken on each area of interest to determine the appropriateness
of continuing to carry forward costs in relation to that area of interest.
An impairment charge is recognised when the Directors are of the opinion that the carried forward
net cost may not be recoverable or the right of tenure in the area lapses.
When production commences, the accumulated costs for the relevant area of interest are
amortised over the life of the area according to the rate of depletion of the economically
recoverable reserves.
j.
Loan notes
Loan notes are initially measured at fair value less transaction costs.
Amortised cost is calculated as the amount at which the loan note is measured at initial recognition
less principal repayments, and adjusted for any cumulative amortisation of the difference between
that initial amount and the maturity amount calculated using the effective interest method.
The effective interest method is used to allocate interest expense over the relevant period and is
equivalent to the rate that discounts estimated future cash payments over the expected life of the
financial instrument to the net carrying amount of the financial liability.
Non-derivative financial liabilities, other than financial guarantees, are subsequently measured at
amortised cost. Gains or losses are recognised in profit or loss through the amortisation process
and when then financial liability is derecognised.
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
k.
Property, plant and equipment
Property, 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:
Buildings
Plant and equipment
25 years
2 - 10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each reporting date.
An item of plant and equipment is derecognised upon disposal or when there is no future economic
benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds are
taken to profit or loss.
l.
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.
m. Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service
leave expected to be settled within 12 months of the reporting date are measured at the amounts
expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for long service leave not expected to be settled within 12 months of the reporting
date are measured as 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.
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
Share-based payments
Equity-settled share-based compensation benefits are provided to employees. Equity-settled
transactions are awards of shares, options or performance rights over shares, that are provided to
employees in exchange for the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is
determined using various valuation methods including Black Scholes, Binomial and the Monte Carlo
Simulation method that takes into account the exercise price, the term of the performance right,
the impact of dilution, the share price at grant date and expect price volatility of the underlying
share, the expected dividend yield and the risk-free interest rate for the term of the performance
right.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase
in equity over 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.
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.
Share-based payment expenses are recognised over the period during which the employee
provides the relevant services. This period may commence prior to the grant date. In this situation,
the entity estimates the grant date fair value of the equity instruments for the purposes of
recognising the services received during the period between service commencement date and
grant date. Once the grant date has been established, the earlier estimate is revised so that the
amount recognised for services received is ultimately based on the grant date fair value of the
equity instruments.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy
the condition is treated as a cancellation. If the condition is not within the control of the Group 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.
45
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
n.
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.
o.
Investments in Joint Venture
Interests in joint ventures are accounting for using the equity method, after initially being
recognised at cost (including transaction costs) and adjusted thereafter for the post-acquisition
change in the Group’s share of net assets of the joint venture. In addition, the Group’s share of the
profit or loss of the joint venture is included in the Group’s profit or loss.
The carrying amount of the investment includes, when applicable, goodwill relating to the joint
venture. Any discount on acquisition, whereby the Group’s share of the net fair value of the joint
venture exceeds the cost of investment, is recognised in profit or loss in the period in which the
investment is acquired.
Profits and losses resulting from transactions between the Group and the joint venture are
eliminated to the extent of the Group’s interest in the joint venture.
When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint
venture, the Group discontinues recognising its share of further losses unless it has incurred legal
or constructive obligations or made payments on behalf of the joint venture. When the joint
venture subsequently makes profits, the Group will resume recognising its share of those profits
once its share of the profits equals the share of the losses not recognised.
p.
Impairment of Non-Financial Assets
At the end of each reporting period, the Group assesses whether there is any indication that an
asset may be impaired. The assessment will include the consideration of external and internal
sources of information, including dividends received from subsidiaries, associates or joint ventures
deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is
carried out on the asset by comparing the recoverable amount of the asset, being the higher of the
asset’s fair value less costs of disposal and value in use, to the asset’s carrying amount. Any excess
of the assets carrying amount over its recoverable amount is recognised immediately in profit or
loss, unless the asset is carried at a revalued amount in accordance with another Standard. Any
impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that
other Standard.
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
Where it is not possible to estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and
intangible assets not yet available for use.
q.
Intangible Assets Other than Goodwill
Brand Name
Brand names are recognised at fair value on the date of acquisition. They have a finite life and are
subsequently carried at cost less any accumulated amortisation and any impairment losses. Brand
names are amortised over their useful life of 10 years.
Technology
Technology is recognised at fair value on the date of acquisition. It has a finite life and is
subsequently carried at cost less any accumulated amortisation and any impairment losses.
Technology is amortised over its useful life of 5 years.
r.
Goodwill
Goodwill acquired on a business combination is initially measured at cost, being the excess of the
consideration transferred for the business combination over the Group’s interest in the net fair
value of the acquiree’s identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is reviewed for impairment, annually, or more frequently, if events or changes in
circumstances indicate that the carrying value may be impaired (refer note 12).
As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units
that are expected to benefit from the combination’s synergies.
Impairment is determined by assessing the recoverable amount of the cash-generating unit to
which the goodwill relates.
Where the recoverable amount of the cash-generating unit is less than the carrying amount, an
impairment loss is recognised.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is
disposed, the goodwill associated with the disposed operation is included in the carrying amount
of the operation when determining the gain or loss on disposal of the operation.
Disposed goodwill in this circumstance is measured on the basis of the relative values of the
disposed operation and the portion of the cash-generating unit retained.
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
s.
Borrowing costs
Borrowing costs are recognised in the profit or loss in the period in which they are incurred.
t.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the
primary economic environment in which that entity operates. The consolidated financial
statements are presented in Australian dollars, which is the parent entity’s functional currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency monetary items are translated at the
year-end exchange rate. Non-monetary items measure at historical cost continue to be carried at
the exchange rate at the date of the transaction. Non-monetary items measured at fair value are
reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss,
except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in
other comprehensive income to the extent that the underlying gain or loss is recognised in other
comprehensive income; otherwise the exchange difference is recognised in profit or loss.
Group companies
The financial results and position of foreign operations, whose functional currency is different from
the Group’s presentation currency, are translated as follows:
- Assets and liabilities are translated at exchange rates prevailing at the end of the reporting
period;
Income and expenses are translated at the average exchange rates for the period; and
-
- Accumulated losses are translated at the exchange rates prevailing at the date of the
transaction.
Exchange differences arising on translation of foreign operations with functional currencies other
than Australian dollars are recognised in other comprehensive income and included in the foreign
currency translation reserve in the balance sheet. The cumulative amount of these differences is
reclassified into profit or loss in the period in which the operation is disposed of.
48
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
u.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of NOVONIX
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.
v.
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 balance sheet.
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.
w. New and Amended Accounting Policies Adopted by the Group
The Group has adopted all of the new, revised or amending Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory
for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory
have not been early adopted.
AASB 16 Leases
The group leases a warehouse in Tennessee from which the PUREgraphite business operates.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and
conditions. The lease agreements do not impose any covenants other than the security interests in
the leased assets that are held by the lessor. Leased assets may not be used as security for
borrowing purposes.
49
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Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Until the 2020 financial year, leases of property, plant and equipment were classified as either
finance leases or operating leases. From 1 July 2019, leases are recognised as a right-of-use asset
and a corresponding liability at the date at which the leased asset is available for use by the group.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease
liabilities include the net present value of the following lease payments:
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable
• variable lease payments that are based on an index or a rate, initially measured using the index
or rate as at the commencement date
• amounts expected to be payable by the group under residual value guarantees
•
the exercise price of a purchase option if the group is reasonably certain to exercise that
option, and
• payments of penalties for terminating the lease, if the lease term reflects the group exercising
that option.
Lease payments to be made under reasonably certain extension options are also included in the
measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot
be readily determined, which is generally the case for leases in the group, the lessee’s incremental
borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic
environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the group:
• where possible, uses recent third-party financing received by the individual lessee as a starting
point, adjusted to reflect changes in financing conditions since third party financing was
received
• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for
leases held by NOVONIX Limited, which does not have recent third party financing, and
• makes adjustments specific to the lease, e.g. term, country, currency and security.
The group is exposed to potential future increases in variable lease payments based on an index or
rate, which are not included in the lease liability until they take effect. When adjustments to lease
payments based on an index or rate take effect, the lease liability is reassessed and adjusted against
the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to
profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
50
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
Right-of-use assets are measured at cost comprising the following:
the amount of the initial measurement of lease liability
•
• any lease payments made at or before the commencement date less any lease incentives
received
• any initial direct costs, and
•
restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the
lease term on a straight-line basis. If the group is reasonably certain to exercise a purchase option,
the right-of-use asset is depreciated over the underlying asset’s useful life. The group does not
revalue the right-of-use buildings held by the group.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value
assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are
leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small
items of office furniture.
Extension options are included in property and equipment leases across the group. These are used
to maximise operational flexibility in terms of managing the assets used in the group’s operations.
The extension options held are exercisable only by the group and not by the lessor.
There are no other standards that are not yet effective and that would be expected to have a
material impact on the entity in the current or future reporting periods and on foreseeable future
transactions.
y.
Critical accounting estimates and judgements
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
below.
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the Group intend to
commence commercial production in the future, from which time the costs will be amortised in
proportion to the depletion of the mineral resources. Key judgements are applied in considering
costs to be capitalised which includes determining expenditures directly related to these activities
and allocating overheads between those that are expensed and capitalised.
51
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Notes to the financial statements for the year ended 30 June 2020
Note 1
Summary of significant accounting policies (continued)
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
In addition, costs are only capitalised that are expected to be recovered either through successful
development or sale of the relevant mining interest. Factors that could impact the future
commercial production at the mine include the level of reserves and resources, future technology
changes, which could impact the cost of mining, future legal changes and changes in commodity
prices. To the extent that capitalised costs are determined not to be recoverable in the future,
they will be written off in the period in which this determination is made.
Value of intangible assets relating to acquisitions
The Group has allocated portions of the cost of acquisitions to technology intangibles, valued using
the relief from royalty method. These calculations require the use of assumptions including future
revenue forecasts and a royalty rate. Technology is amortised over its useful life of 5 years.
Impairment of goodwill and identifiable intangible assets
The Group determines whether goodwill is impaired on an annual basis. This assessment requires
an estimation of the recoverable amount of the cash-generating units to which the goodwill is
allocated.
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 a binomial or Monte Carlo option pricing model taking into account the terms and
conditions upon which the instruments were granted. The accounting estimates and assumptions,
including share price volatility, interest rates and vesting periods would have no impact on the
carrying amounts of assets and liabilities within the next annual reporting period but may impact
the profit or loss and equity.
Other areas of critical accounting estimates and judgements
Other areas of critical accounting estimates and judgements include:
-
-
-
Unused tax losses for which no deferred tax asset has been recognised (Refer to Note 7)
The vesting dates of share options (Refer to Note 28)
The accelerated expense on cancellation of share options and the loss on redemption of
convertible loan notes (Refer to Note 11)
52
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 2 Changes in accounting policies
This note explains the impact of the adoption of AASB 16 Leases on the group’s financial statements.
As indicated in note 1 above, the group had adopted AASB 16 Leases retrospectively from 1 July 2019,
but has not restated comparatives for the 2019 reporting period, as permitted under the specific
transition provisions in the standard. The reclassification and the adjustments arising from the new
leasing rules are therefore recognised in the opening balance on 1 July 2019. The new accounting policies
are disclosed in note 1.
On adoption of AASB 16, the group recognised lease liabilities in relation to leases which had previously
been classified as ‘operating leases’ under the principles of AASB 117 Leases. These liabilities were
measured at the present value of the remaining lease payments, discounted using the lessee’s
incremental borrowing rate as of 1 July 2019. The weighted average lessee’s incremental borrowing rate
applied to the lease liabilities on 1 July 2019 was 4%.
Measurement of lease liabilities
Operating lease commitments disclosed as at 30 June 2019
Discounted using the lessee’s incremental borrowing rate of 4% at the date of
initial application
Add/(less): adjustments as a result of a different treatment of extension options
Lease liability recognised as at 1 July 2019
Of which are:
Current lease liabilities
Non-current lease liabilities
2019
1,286,391
1,165,323
1,827,378
2,992,701
135,386
2,857,315
2,992,701
Measurement of right-of-use assets
The associated right-of-use asset for property leases was measured at an amount equal to the liability.
Adjustments recognised in the balance sheet on 1 July 2019
The change in accounting policy affected the following items in the balance sheet on 1 July 2019:
• right-of-use assets – increase by $2,992,701
• lease liabilities – increase by $2,992,701
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 3 Parent information
The following information has been extracted from the books and records of the parent and has been
prepared in accordance with Australian Accounting Standards.
Balance sheet
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Other receivables
Plant and equipment
Exploration and evaluation assets
Investments
Other assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Payables
Borrowings
Total current liabilities
Non-current liabilities
Borrowings
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
2020
$
2019
$
37,455,678
159,777
5,240,110
73,952
37,615,455
5,314,062
10,139,051
1,068
3,210,798
17,748,704
8,450
709,194
5,042
2,838,749
21,938,847
7,000
31,108,071
25,498,832
68,723,526
30,812,894
2,191,233
-
134,586
4,000,000
2,191,233
4,134,586
-
-
10,905,530
10,905,530
2,191,233
15,040,116
66,532,293
15,772,778
99,851,510
29,037,721
(62,356,938)
38,163,405
20,488,027
(42,878,654)
66,532,293
15,772,778
Statement of Profit or Loss and Other Comprehensive Income
Total loss and total comprehensive loss
(19,478,284)
(25,312,516)
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 3 Parent information (continued)
Guarantees
NOVONIX Limited has not entered into any guarantees, in the current or previous reporting period, in
relation to the debts of its subsidiaries.
Contingent liabilities
At 30 June 2020, NOVONIX Limited did not have any contingent liabilities (2019: Nil).
Contractual commitments
At 30 June 2020 , NOVONIX Limited did not have any contractual commitments (2019: Nil).
Note 4 Revenue
(a)
Revenue from contracts with customers
The group derives revenue from the transfer of goods and services over time and at a point in time in
the following major product lines and geographical regions:
2020
Graphite
Mining and
exploration
$
Hardware sales
Consulting sales
Revenue from external customers
Timing of revenue recognition
At a point in time
Over time
2019
Hardware sales
Consulting sales
Revenue from external customers
Timing of revenue recognition
At a point in time
Over time
-
-
-
-
-
-
Graphite
Mining and
exploration
$
-
-
-
-
-
-
Battery
Technology
$
2,113,416
2,140,019
4,253,435
2,113,416
2,140,019
4,253,435
Battery
Technology
$
1,461,266
355,783
1,817,049
1,461,266
355,783
1,817,049
Battery
Materials
$
Battery
Materials
$
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
2,113,416
2,140,019
4,253,435
2,113,416
2,140,019
4,253,435
Total
$
1,461,266
355,783
1,817,049
1,461,266
355,783
1,817,049
Revenues from external customers come from the sale of battery testing hardware equipment and the
provision of battery testing and development consulting services.
55
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 4 Revenue (continued)
(i)
Assets and liabilities related to contracts with customers
The group has recognised the following assets and liabilities related to contracts with customers:
Notes
2020
$
2019
$
Contract liabilities – Hardware sales
Total current contract liabilities
98,783
98,783
580,845
580,845
Revenue recognised in relation to contract liabilities
The following table shows how much of the revenue recognised in the current reporting period relates
to carried-forward contract liabilities and how much relates to performance obligations that were
satisfied in a prior year.
Revenue recognised that was included in the contract
liability balance at the beginning of the period
Hardware sales
Note 5 Other income
Interest received from unrelated parties
COVID-19 Government stimulus
Grant funding
Fair value gain on borrowings
Gain on revaluation of equity accounted investment
Other
2020
$
2019
$
580,845
-
2020
$
723
59,000
785,154
-
-
-
844,877
2019
$
4,533
-
329,573
114,106
2,576,131
341
3,024,684
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 6 Loss for the year
Loss before income tax from continuing operations includes the following specific expenses:
Consolidated
2020
$
2019
$
Share based payments expense^
Performance rights granted
Options granted
Options cancelled
Total share based compensation expense
^ Refer to note 28 for further information regarding share-based
payments.
Borrowing costs
Interest accrued on loan notes
Loss on redemption of loan notes
Unwinding of fair value gain
Interest accrued on borrowings
Total borrowing costs
Impairment losses
Exploration and evaluation assets
Goodwill
Identified intangibles – Brand Name
Identified intangibles - Technology
Total impairment losses
78,362
6,291,510
1,189,081
39,025
6,634,485
-
7,558,953
6,673,510
3,062,598
1,765,353
48,377
454,633
5,330,961
-
-
-
-
-
1,373,581
-
30,113
161,338
1,565,032
10,667,897
4,812,127
374,126
64,775
15,918,925
57
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Income tax expense
Note 7
This note provides an analysis of the Group’s income tax expense, shows what amounts are recognised
directly in equity and how the tax expense is affected by non-assessable and non-deductible items. It
also explains significant estimates made in relation to the Group’s tax position.
Consolidated
2020
$
2019
$
Numerical reconciliation of income tax expense
(a)
to prima facie tax payable
Profit/(loss) before income tax expense
(20,028,526)
(26,505,567)
Tax at the Australian tax rate of 27.5% (2018: 27.5%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Impairment of goodwill
Share based payments
Gain on acquisition of PUREgraphite LLC
Share of results of joint venture
Borrowing costs
Other non-assessable amounts
Difference in overseas tax rate
Adjustments for current tax of prior periods
Adjustment to deferred tax assets and liabilities for tax
losses and temporary differences not recognised
(5,507,845)
(7,289,031)
-
2,078,713
-
-
855,518
(156,386)
385,615
-
1,323,335
1,835,215
(540,987)
206,795
377,735
(24,234)
(90,888)
(93,052)
2,344,385
3,911,457
Income tax expense / (benefit)
-
(383,655)
Tax losses
(b)
Unused tax losses for which no deferred tax asset has
been recognised
Potential tax benefit
Tax expense (income) recognised directly in
(c)
equity
Aggregate current and deferred tax arising in the
reporting period and not recognised in net profit or loss
or other comprehensive income but directly debited or
credited to equity:
Deferred tax: Share issue costs
23,275,774
15,128,752
6,054,860
4,122,864
-
-
58
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Notes to the financial statements for the year ended 30 June 2020
Note 7
Income tax expense
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
temporary differences
Deferred tax assets
(d)
The balance comprises
attributable to:
Tax losses
Exploration and evaluation assets
Business capital costs
Right of use asset
Accrued expenses
Consolidated
2020
$
2019
$
6,304,468
1,137,319
899,256
8,982
38,665
4,351,897
1,433,506
49,212
-
17,067
Total deferred tax assets
8,388,690
5,851,682
Set-off of deferred tax liabilities pursuant to set-off
provisions
Deferred tax assets not recognised
Net deferred tax assets
(512,788)
(7,875,902)
(558,061)
(5,293,621)
-
-
temporary differences
comprises
Deferred tax liabilities
(e)
The balance
attributable to:
Intangible assets
Property, plant and equipment
Prepayments
Unrealised exchange loss on borrowings
262,779
224,874
401
24,734
328,885
186,851
143
42,182
Total deferred tax liabilities
512,788
558,061
Set-off of deferred tax liabilities pursuant to set-off
provisions
Net deferred tax liabilities
(512,788)
(558,061)
-
-
Unused losses which have not been recognised as an asset, will only be obtained if:
(i)
the group derives future assessable income of a nature and of an amount sufficient to enable the
losses to be realised;
the group continues to comply with the conditions for deductibility imposed by the law; and
no changes in tax legislation adversely affect the group in realising the losses.
(ii)
(iii)
Offsetting within tax consolidated entity
NOVONIX Limited and its wholly-owned Australian subsidiaries have applied the tax consolidation
legislation which means that these entities are taxed as a single entity. As a consequence, the deferred
tax assets and deferred tax liabilities of these entities have been offset in the consolidated financial
statements.
59
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 8 Key Management Personnel Compensation
Refer to the remuneration report contained in the Directors’ report for details of the remuneration paid
or payable to each member of the Group’s key management personnel (KMP) for the year ended 30
June 2020.
The totals of remuneration paid to KMP of the Company and the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Share-based compensation
Total KMP compensation
Short-term employee benefits
Consolidated
2020
$
1,868,521
46,218
6,878,627
2019
$
1,221,114
45,641
6,145,904
8,793,366
7,412,659
These amounts include fees and benefits paid to the non-executive Chairman as well as all salary, paid
leave benefits and fringe benefits paid to Executive Directors.
Post-employment benefits
These amounts are the current-year’s superannuation contributions made during the year.
Share-based compensation
These amounts represent the expense related to the participation of KMP in equity-settled benefit
schemes as measured by the fair value of the options and performance rights on grant date.
Further information in relation to KMP remuneration can be found in the Directors report.
Note 9 Auditor’s Remuneration
Remuneration of the auditor for:
- Auditing or reviewing the financial report
Consolidated
2020
$
175,855
175,855
2019
$
148,200
148,200
60
For personal use only
Notes to the financial statements for the year ended 30 June 2020
Note 10 Earnings per share
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
(a) Basic earnings per share
Total basic earnings per share attributable to the
ordinary equity holders of the Company
(b) Diluted earnings per share
Total diluted earnings per share attributable to the
ordinary equity holders of the Company
2020
Cents
2019
Cents
(14.7 cents)
(21.2 cents)
(14.7 cents)
(21.2 cents)
(c)
Reconciliations of earnings used in calculating earnings per share
Basic earnings per share
Profit / (loss) attributable to the ordinary equity holders
of the Company used in calculating basic earnings per
share
Diluted earnings per share
Profit / (loss) attributable to the ordinary equity holders
of the Company used in calculating diluted earnings per
share
2020
$
2019
$
(20,028,526)
(26,121,912)
(20,028,526)
(26,121,912)
(d) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as
in calculating basic and diluted
the denominator
earnings per share
(e)
Information concerning the classification of securities
Options and rights
2020
Number
2019
Number
135,918,095
123,219,872
Options and rights on issue during the year are not included in the calculation of diluted earnings per
share because they are antidilutive for the year ended 30 June 2020. These options and rights could
potentially dilute basic earnings per share in the future. Details relating to options and rights are set out
in note 28.
61
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 11 Capital raising
During the financial year the Company completed a $63 million capital raising via an institutional
placement, an accelerated non-renounceable rights issue and a strategic placement (“capital raising”).
The capital raising has simplified the NOVONIX capital structure through the redemption of Convertible
Notes and repayment of short-term loans, along with the cancellation of 40.5 million options held by
Directors, employees and convertible note holders.
Funds raised will provide capex and working capital to fulfil an initial SAMSUNG supply contract, facilitate
development and commercialisation of the DPMG technology for cathode and other million-mile battery
innovations, offer costs and provide general working capital.
The components of the transaction are set out below:
a)
Institutional placement
On 5 June 2020, 19,495,469 fully paid ordinary shares were issued to institutional investors at $0.29 per
share, raising $5,653,686.
b)
Rights issue
An accelerated 1 for 1 rights issue was completed on 25 June 2020. Under the rights issue, 130,721,435
fully paid ordinary shares were issued at $0.29 per share. The rights issue raised a total of $37,909,216
which consisted of $34,017,928 cash and $3,891,288 settlement of debt (see c) and d) below).
c)
Repayment of Director loans
During the financial year, the Company’s directors entered into short term loan agreements collectively
for $3,148,960. The loans were unsecured and accrued interest at 8% pa from the date of drawdown,
calculated on a daily basis. These loans were used by Directors to fund their entitlements under the
rights issue, with remaining balances being repaid to Directors from the proceeds of the rights issue as
follows:
Director
Loan funds and
interest accrued
$
263,377
1,799,682
107,117
101,973
954,831
3,266,980*
* includes $78,020 of interest accrued on short-term loans
Anthony Bellas
Philip St Baker
Greg Baynton
Robert Cooper
Andrew Liveris
Loan settled though
Rights issue
entitlement taken up
$
263,377
1,799,682
107,117
75,059
599,255
2,844,490
Loan funds repaid
from proceeds of
the right issue
$
-
-
-
26,914
355,576
382,490
62
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 11 Capital raising (continued)
Convertible loan notes
d)
Prior to the capital raise a total of 11,416,667 loan notes (excluding loan notes held by the St Baker Energy Innovation Fund) were on issue with a face value of
$6,400,000. These loan notes accrued interest at a coupon rate of 10% pa.
These convertible loan notes were repaid as follows:
Loan notes
(Number)
2,250,000
9,166,667
11,416,667
Face Value
$
900,000
5,500,000
6,400,000
Interest
accrued
$
117,123
1,038,219
1,155,342
Fair value of loan
notes at
settlement date
$
1,017,123
6,538,219
7,555,342
Carrying value of
loan notes at
settlement date
$
891,018
6,471,374
7,362,392
Loss on
settlement
$
126,105
66,845
192,950
Amount settled through
conversion to equity as
part of rights issue
$
182,701
864,097
1,046,798*
Amount settled in cash
out of proceeds from
the rights issue
$
834,422
5,674,122
6,508,544
* Repaid through the issue of 3,609,650 shares at $0.29 per share.
Strategic Placement to St Baker Energy Innovation Fund
e)
At a General Meeting of Shareholders held on 30 June 2020, Shareholders approved the issue of 67,085,100 fully paid ordinary shares to the St Baker Energy Innovation
Fund at an issue price of $0.29 per share raising $19,454,679. The consideration for the shares received consisted of cash and the settlement of both convertible loan
notes and short-term loans owing. Details of the Strategic Placement are set out in the table below:
Face value/Principal of
loan notes and short-
term loan
$
Loan notes redeemed
Short-term loan repaid
Placement proceeds
Total
10,000,000
3,400,000
-
13,400,000
Interest
accrued
$
1,187,397
131,575
-
1,318,972
Placement
proceeds
$
-
-
4,735,707
4,735,707
Total
$
11,187,397
3,531,575
4,735,707
19,454,679
Shares
issued
(Number)
38,577,232
12,177,845
16,330,023
67,085,100
63
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Notes to the financial statements for the year ended 30 June 2020
Note 11 Capital raising (continued)
Prior to the capital raise a total of 25,000,000 loan notes were on issue to the St Baker Energy Innovation Fund with a face value of $10,000,000. These loan notes
accrued interest at a coupon rate of 10% pa.
These convertible loan notes were repaid as follows:
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Fair value of loan
notes at
settlement date
$
11,187,397
* Repaid through the issue of 38,577,232 shares at $0.29 per share.
Face Value
$
25,000,000 10,000,000
Interest
accrued
$
1,187,397
Loan notes
(Number)
Carrying value of
loan notes at
settlement date
$
9,614,996
Loss on
settlement
$
1,572,401
Amount settled through
conversion to equity as
part of rights issue
$
11,187,397*
Amount settled in cash
out of proceeds from
the rights issue
$
-
Cancellation of options
f)
As part of the capital raise, the Group obtained agreement from holders of a total of 40,500,000 options (approximately half of the options on issue at the time of the
capital raise) to cancel the options for no consideration. The cancellation of the options has resulted in an acceleration of the share-based payment expense, with the
unexpensed portion of the share option fair values being expensed in full at the date of cancellation. Details of the options cancelled are below:
Directors
KMP
Loan note holders*
Total
*Loan note holders are not employees of the company and therefore there is no associated share based payment expense, hence no expense acceleration.
Number of options
cancelled
5,750,000
7,500,000
27,250,000
40,500,000
Expense accelerated
$
578,135
610,946
-
1,189,081
64
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 12
Impairment testing of goodwill
For the purposes of impairment testing, the cash generating unit has been defined as the business to
which the goodwill relates where individual cash flows can be ascertained for the purposes of discounting
future cash flows.
The carrying amount of goodwill allocated to the cash
generating unit
PUREgraphite LLC
Total carrying amount of goodwill
Consolidated
2020
$
17,411,685
17,411,685
2019
$
17,122,101
17,122,101
The recoverable amount of the PUREgraphite LLC cash generating unit (“PUREgraphite CGU”) has been
determined on a ‘Fair Value Less Costs to Sell’ (“FVLCS”) basis.
To determine the recoverable amount, FVLCS was calculated based on the capital raising outlined in
Note 11 given that the capital raising was directly associated with the planned future expansion of the
PUREgraphite CGU.
The recoverable amount of the PUREgraphite CGU was deemed to be in excess of the carrying value of
the CGU, and therefore no impairment has been recognise at 30 June 2020.
Note 13
Cash and cash equivalents
Cash at bank
Reconciliation to cash flow statement
Consolidated
2020
$
38,807,662
38,807,662
2019
$
6,054,664
6,054,664
The above figures reconcile to the amount of cash shown in the statement of cash flows at the end of
the financial year as follows:
Balances as above
Bank overdrafts
Balance per statement of cash flows
2020
$
38,807,662
-
38,807,662
2019
$
6,054,664
-
6,054,664
65
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Notes to the financial statements for the year ended 30 June 2020
Note 14
Trade and other receivables
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Trade debtors
Other receivables
Consolidated
2020
$
952,881
274,911
2019
$
556,937
126,166
Total current trade and other receivables
1,227,792
683,103
Credit risk
The Group has no significant concentration of credit risk with respect to any counterparties or on a
geographical basis. Amounts are considered as “past due” when the debt has not been settled, in line
with the terms and conditions agreed between the Group and the customer to the transaction.
The Group assess impairment on trade and other receivables using the simplified approach of the
expected credit loss (ECL) model under AASB 9. Due to the minimal history of bad debt write-offs and
strong credit approval processes, the Group have determined that the incorporation of the ECL model
will not have a material effect on impairment as at 30 June 2020.
The balance of receivables that remain within initial trade terms are considered to be of high credit
quality.
Note 15 Inventory
Raw material
Components and stores
Finished goods – at cost
Consolidated
2020
$
759,693
584,090
23,202
2019
$
-
641,080
475,911
1,366,985
1,116,991
Amounts recognised in profit or loss
Inventories recognised as an expense during the year ended 30 June 2020 amounts to $1,245,187
(2019: $741,280). These were included in cost of sales.
66
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Notes to the financial statements for the year ended 30 June 2020
Note 16 Property, plant and equipment
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Land
$
Buildings
$
Leasehold
improvements
$
Plant and
equipment
$
Total
$
At 30 June 2018
Cost
Accumulated depreciation
359,344
-
1,197,162
(22,963)
Net book amount
359,344
1,174,199
Year ended 30 June 2019
Opening net book amount
Additions
Acquisition of subsidiary
Exchange differences
Assets written off
Depreciation charge
359,344
-
-
20,907
-
-
1,174,199
495,206
-
66,695
-
(61,380)
Closing book amount
380,251
1,674,720
At 30 June 2019
Cost
Accumulated depreciation
380,251
-
1,762,019
(87,299)
Net book amount
380,251
1,674,720
-
-
-
-
-
-
-
-
-
-
-
-
-
1,036,480
(128,605)
2,592,986
(151,568)
907,875
2,441,418
907,875
2,241,257
913,821
218,466
(90,540)
(261,333)
2,441,418
2,736,463
913,821
302,095
(90,540)
(318,740)
3,929,546
5,984,517
4,437,493
(507,947)
6,579,763
(595,246)
3,929,546
5,984,517
Year ended 30 June 2020
Opening net book amount
Additions
Acquisition of subsidiary
Exchange differences
Assets written off
Depreciation charge
380,251
-
-
(7,256)
-
-
1,674,720
93,127
-
(29,018)
-
(72,028)
-
195,082
-
796
-
(31,320)
3,929,546
4,451,587
-
75,523
(210,773)
(829,440)
5,984,517
4,739,796
-
40,045
(210,773)
(932,788)
Closing book amount
372,995
1,666,801
164,558
7,416,443
9,620,797
At 30 June 2020
Cost
Accumulated depreciation
372,995
-
1,821,526
(154,725)
195,082
(30,524)
8,579,868
(1,163,425)
10,969,471
(1,348,674)
Net book amount
372,995
1,666,801
164,558
7,416,443
9,620,797
67
For personal use only
Notes to the financial statements for the year ended 30 June 2020
Note 17 Exploration and evaluation assets
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Consolidated
2020
$
2019
$
Exploration and evaluation assets – at cost
2,988,921
2,838,749
The capitalised exploration and evaluation assets carried forward
above have been determined as follows:
Balance at the beginning of the year
Expenditure incurred during the year
Impairment losses
2,838,749
150,172
-
13,253,083
253,563
(10,667,897)
Balance at the end of the year
2,988,921
2,838,749
In FY2019, the Company recognised an impairment loss of $10,667,897 relating to the Mt Dromedary
graphite mining project. The Directors determined that it was appropriate for the carrying value of the
Mt Dromedary asset to reflect the exploration and evaluation expenditure incurred since acquisition, and
to write off all acquisition related costs which related to the minority interest acquired by the Group on
29 August 2016 in return for shares in the Company (i.e. scrip-based consideration).
The future development of the Mt Dromedary mine will not occur in the short to medium term given the
tonnages of natural graphite required by the PUREgraphite business are unlikely to be sufficient to
warrant the development of the mine in that timeframe. As well, a significant portion of graphite used
by PUREgraphite will be synthetic graphite, and the natural graphite required at this time can be more
cost effectively sourced from other natural graphite producers.
The Mt Dromedary asset remains a strategic asset for the Group.
The Directors have assessed that for the exploration and evaluation assets remaining recognised at 30
June 2020, the facts and circumstances do not suggest that the carrying amount may exceed its
recoverable amount.
68
For personal use only
Notes to the financial statements for the year ended 30 June 2020
Note 18 Intangible assets
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Goodwill
Technology
Consolidated
2020
$
17,411,685
955,560
18,367,245
2019
$
17,037,297
1,195,948
18,233,245
Balance at the beginning of the year
Exchange differences
Amortisation
Goodwill
$
17,037,297
374,388
-
Technology
$
1,195,948
33,231
(273,619)
Total
$
18,233,245
407,619
(273,619)
Balance at the end of the year
17,411,685
955,560
18,367,245
Intangible assets, other than goodwill have finite useful lives. The current amortisation charges for
intangible assets are included under depreciation and amortisation expense in the statement of profit or
loss and other comprehensive income. Goodwill has an indefinite useful life.
69
For personal use only
Notes to the financial statements for the year ended 30 June 2020
Note 19
Trade and other payables
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Unsecured liabilities:
Trade payables
Sundry payables and accrued expenses
Note 20
Contract liabilities
Contract liabilities – Hardware sale contracts
Note 21
Leases
This note provides information for leases where the group is the lessee.
(i) Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Right-of-use assets - Buildings
Lease liabilities
Current
Non-current
Consolidated
2020
$
2019
$
847,724
2,646,503
3,494,227
1,307,707
96,659
1,404,366
Consolidated
2020
$
98,783
98,783
2019
$
580,845
580,845
30 June
2020
$
2,853,427
141,124
2,778,979
2,920,103
30 June
2019
$
-
-
-
-
There were no additions to the right-of-use asset during the year ended 30 June 2020.
(i) Amounts recognised in the statement of profit or loss and other comprehensive income
The statement of profit or loss and other comprehensive income shows the following amounts relating
to leases:
Depreciation of right-of-use assets - Buildings
Interest expense
The total cash outflow for leases in the half year period was $254,271.
2020
$
210,381
112,303
2018
$
-
-
70
For personal use only
Notes to the financial statements for the year ended 30 June 2020
Note 22 Borrowings
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
2020
Non-
Current
$
Current
$
Total
$
Current
$
2019
Non-
Current
$
Total
$
56,704
1,214,406
1,271,109
57,807
1,295,835
1,353,642
56,704
1,214,406
1,271,109
57,807
1,295,835
1,353,642
-
218,213
218,213
-
722,689
722,689
-
- 10,905,530 10,905,530
940,902 4,087,262
4,902,738
940,902 4,087,262 11,721,006 15,808,268
815,476
274,917
1,937,095
2,212,011 4,145,069 13,016,841 17,161,910
Secured
Bank loans (i)
Total secured
borrowings
Unsecured
Loan notes (ii)
Other loans (iii)
Total unsecured
borrowings
Total borrowings
(i) Secured liabilities and assets pledged as security
In December 2017, the group entered into a loan facility to purchase commercial land and buildings in
Nova Scotia from which the Battery Testing Services business operates. The total available amount under
the facility is CAD $1,330,000 and it has been fully drawn down as at 30 June 2020. The full facility is
repayable in monthly instalments, commencing 15 December 2017 and ending 15 November 2042.
The bank loan is secured by first mortgages over the group’s freehold land and buildings.
The carrying amounts of non-financial assets pledged as security for current and non-current borrowings
is $2,039,796 (2019: $2,054,971) (refer note 16).
(ii) Loan notes
During the financial year 10,000,000 convertible loan notes at $0.40 each were issued to the St Baker
Energy Innovation Fund.
The initial fair value of the convertible loan note portion of the bond was determined using a market
interest rate for an equivalent non-convertible bond at the issue date.
The liability is subsequently recognised on an amortised cost basis until extinguished on conversion or
maturity of the bonds. The remainder of the proceeds are allocated to the conversion option and
recognised in shareholders’ equity, net of income tax, and not subsequently remeasured.
Loan notes converted during the year have been recognised at the carrying value for the proportion of
the debt converted as at the date of conversion.
71
For personal use only
Notes to the financial statements for the year ended 30 June 2020
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Note 22 Borrowings (continued)
Key Loan Note Terms - $0.40 face value
• Number of loan notes issued: 10,000,000
• Allowing for early conversion;
• Unsecured loan note issued at AUD$0.40 per note;
• Coupon 10% per annum capitalised over a term of 36 months;
• Convertible at the option of the holder on 1 for 1 basis;
• Redeemable by NOVONIX at any time (with 10 business days notice), subject to payment of
interest on full term;
• Maturity date of 36 months after the date of issue; and
• The notes are not listed or tradeable.
• 1 for 1 attaching option, exercisable at $0.80 per share with three years to expiry.
During the financial year the Company undertook a capital raising which restructured the balance sheet
of the Company and led to the redemption of all outstanding loan notes. Refer to note 11.
At 30 June 2020 there are no Loan Notes outstanding.
Reconciliation of movements in loan note liability:
Balance at the beginning of the year
Present value of liability component of loan notes issued
during the year
Loan note issue costs
Interest accrued for the year
Loan notes redeemed during the year (Note 11)
2020
$
10,905,530
3,009,259
-
3,062,598
(16,977,387)
2019
$
-
9,582,684
(50,735)
1,373,581
-
Balance at the end of the year
-
10,905,530
(iii) Other loans
ACOA Loans
In December 2017, the group entered into a contribution agreement with Atlantic Canada Opportunities
Agency (ACOA), for CAD$500,000. As at 30 June 2020, CAD$500,000 of the facility has been drawn down.
The funding is to assist with expanding the market to reach new customers through marketing and
product improvements. The facility is repayable in monthly instalments commencing 1 September 2019.
In October 2018, the group entered into another contribution agreement with Atlantic Canada
Opportunities Agency (ACOA), for CAD$500,000. As at 30 June 2020, CAD$500,000 of the facility has been
drawn down. The funding is to assist in establishing a battery cell manufacturing facility. The facility is
repayable in monthly instalments commencing 1 April 2020.
72
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 22 Borrowings (continued)
CARES Act Loan
During the financial year the Group secured a short-term loan under the CARES Act Paycheck Protection
Program Loan scheme for USD$36,706. This is a COVID stimulus offered by the US Government. The loan
is repayable in monthly instalments from 12 December 2020 and interest is charged at 1% fixed per
annum.
St Baker Energy Innovation Fund Short Term Loan
In June 2019, the group entered into a short-term loan agreement with the St Baker Energy Innovation
Fund for $4,000,000 at an interest rate of 10% per annum. The loan funds converted into 10,000,000
loan notes following shareholder approval, which was obtained on 31 July 2019.
(iv) Fair value
For all borrowings, other than the ACOA loan noted at (iii) above, the fair values are not materially
different to their carrying amounts, since the interest payable on those borrowings is either close to
current market rates or the borrowings are of a short-term nature.
The ACOA loans are interest free. The initial fair value of the ACOA loans were determined using a market
interest rate for equivalent borrowings at the issue date. This resulted in a day one gain of $100,152 in
FY2018 (December 2017 loan) and a day 1 gain of $114,106 in FY2019 (October 2018 loan).
73
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 23 Contributed equity
(a)
Share capital
Ordinary shares
Fully paid
(b) Ordinary share capital
2020
Shares
2019
Shares
2020
$
2019
$
348,206,772
128,137,680
99,851,510
38,163,405
Date
1 July 2018
24 June 2019
30 June 2019
17 January 2020
17 January 2020
15 June 2020
15 June 2020
5 June 2020
5-25 June 2020
30 June 2020
30 June 2020
Details
Balance
Exercise of options
Balance
Share purchase plan
Placement to sophisticated
investor
Exercise of options
Exercise of options
Placement to institutional
investors
Rights issue entitlement
offer
Placement to SBEIF
Share issue costs
Balance
Note
(g)
(d)
(e)
(g)
(g)
(f)
(f)
(f)
Number of
Shares
123,137,680
5,000,000
128,137,680
2,485,715
98,040
Issue
Price
-
$0.51
$0.51
100,000
83,333
19,495,469
$0.785
$0.50
$0.29
$
38,163,405
-
38,163,405
1,267,715
50,000
78,500
41,667
5,653,686
130,721,435
$0.29
37,909,216
67,085,100
$0.29
348,206,772
19,454,679
(2,767,358)
99,851,510
(c)
Convertible loan notes
Balance at the beginning of the reporting period
2020
Number
26,416,667
2019
Number
-
Issue of convertible loan notes - $0.40 each
10,000,000
17,250,000
Issue of convertible loan notes - $0.60 each
-
9,166,667
Convertible loan notes redeemed
Balance at the end of the year
(36,416,667)
-
-
26,416,667
(d)
Share Purchase Plan
In January 2020 the Company undertook a Share Purchase Plan. The issue price under the Share
Purchase Plan was $0.51 per share and provided an opportunity to existing shareholders to
subscribe for up to $30,000 worth of new shares.
(e)
Placement to sophisticated investor
In January 2020 the Company made a placement of 98,040 shares at $0.51 to a sophisticated
investor.
74
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ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 23 Contributed equity (continued)
(f)
Capital raising transaction
In June 2020 the Company completed a $63 million capital raising via an institutional placement,
an accelerated non-renounceable rights issue and a strategic placement. Refer to Note 11.
(g)
Exercise of options
On 24 June 2019, Philip St Baker exercised 5,000,000 options at an exercise price of $0.30 each.
The Company provided a loan of $1,500,000 to Mr St Baker for the purpose of funding the
exercise of 5,000,000 options (refer note 28). The loan is limited in recourse over the shares
issued on exercise of the options, and the Company has placed a holding lock over the shares to
secure repayment. These shares have been treated as treasury shares, and the limited recourse
loan has been accounted for as a modification to a share-based payment, by way of extension of
the expiry date of the options. Share capital will be increased when the loan is repaid.
On 15 June 2020 183,333 options were exercised by employees (who are not KMP). 100,000
were exercisable at $0.785 and 83,333 were exercisable at $0.50.
(h)
Capital Management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going
concern, so that it can continue to provide returns for shareholders, benefits for other stakeholders
and to maintain an optimal capital structure to reduce the cost of capital.
The capital structure of the Group includes equity attributable to equity holders, comprising of
issued capital, reserves and accumulated losses. In order to maintain or adjust the capital structure,
the Company may issue new shares, sell assets to reduce debt or adjust the level of activities
undertaken by the company.
The Group monitors capital on the basis of cash flow requirements for operational, and exploration
and evaluation expenditure. The Group will continue to use capital market issues to satisfy
anticipated funding requirements.
The Group has no externally imposed capital requirements. The Group’s strategy for capital risk
management is unchanged from prior years.
The Covid 19 pandemic has not impacted the Group’s ability to raise capital as evidenced by the
$63 million capital raising completed in June 2020 and detailed in Note 11. Based on this, the
Group’s strategy for capital risk management is unchanged from prior year.
75
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Notes to the financial statements for the year ended 30 June 2020
Note 24 Reserves
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Share-based payment reserve
Foreign currency translation reserve
Convertible loan note reserve
(a)
Share-based payment reserve
Consolidated
2020
$
2019
$
22,817,908
1,500,247
6,219,812
30,537,967
15,258,956
950,004
5,229,071
21,438,031
Consolidated
2020
$
2019
$
Share-based payment reserve
22,817,908
15,258,956
Movements:
Balance 1 July 2019
Equity settled options cancelled
Equity settled share-based payments
Balance 30 June 2020
15,258,956
1,189,081
6,369,871
8,585,446
-
6,673,510
22,817,908
15,258,956
The share-based payment reserve records items recognised as expenses on valuation of director,
employee and contractor options and performance rights.
(b)
Foreign currency translation reserve
Consolidated
2020
$
2019
$
Foreign currency translation reserve
1,504,430
950,004
Movements:
Balance 1 July 2019
Exchange differences on
operations
Balance 30 June 2020
translation of
foreign
950,004
140,608
550,243
809,396
1,500,247
950,004
The foreign currency translation reserve records exchange differences arising on translation of a foreign
controlled subsidiary.
76
For personal use only
Notes to the financial statements for the year ended 30 June 2020
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Note 24 Reserves (continued)
(c)
Convertible loan note reserve
Consolidated
2020
$
2019
$
Convertible loan note reserve
6,219,812
5,229,071
Movements:
Balance 1 July 2019
Equity component of loan notes issued during the year
Loan note issue costs
Balance 30 June 2020
5,229,071
990,741
-
2,426,120
2,817,316
(14,365)
6,219,812
5,229,071
Convertible loan notes are compound financial instruments.
The present value of the liability component of the loan notes issued in August 2019, at initial recognition,
was $3,009,259. The balance of $990,741 was recognised in the convertible note reserve. In discounting
the loan notes to present value to determine the equity proportion of the compound financial instrument,
NOVONIX adopted an effective interest rate of 24.25% pa.
The present value of the liability component of the loan notes issued in March 2019, at initial recognition,
was $5,170,660. The balance of $1,702,340 was recognised in the convertible note reserve. In
discounting the loan notes to present value to determine the equity proportion of the compound financial
instrument, NOVONIX adopted an effective interest rate of 24.5% pa.
The present value of the liability component of the loan notes issued in August 2018, at initial recognition,
was $4,361,289. The balance of $1,100,611 was recognised in the convertible note reserve. In
discounting the loan notes to present value to determine the equity proportion of the compound financial
instrument, NOVONIX adopted an effective interest rate of 25.6% pa.
77
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 25 Operating segments
The Group 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 is managed primarily on an operational basis. Operating segments
are determined on the basis of financial information reported to the Board.
The board has identified three operating segments being Graphite Exploration and Mining, Battery
Technology and Battery Materials. The Battery Materials segment develops and manufactures battery
anode materials and the Battery Technology segment develops battery cell testing equipment, performs
consulting services and carried out research and development in battery development.
Basis of accounting for purposes of reporting by operating segments
a. Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating
decision makers with respect to operating segments, are determined in accordance with
accounting policies that are consistent with those adopted in the annual financial statements of
the Group.
b. Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that
receives the majority of the economic value from the asset. In most instances, segment assets
are clearly identifiable on the basis of their nature and physical location.
c. Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the
liability and the operations of the segment. Borrowings and tax liabilities are generally considered
to relate to the Group as a whole and are not allocated. Segment liabilities include trade and
other payables.
d. Unallocated items
The following items for revenue, expenses, assets and liabilities are not allocated to operating
segments as they are not considered part of the core operations of any segment:
Interest income
-
- Corporate administrative and other expenses
-
- Corporate share-based payments
- Corporate marketing and project development expenses
Income tax expense
78
For personal use only
Notes to the financial statements for the year ended 30 June 2020
Note 25 Operating segments (continued)
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
e. Segment information
Segment performance
2020
Segment revenue
Other income
Interest income
Total income
Segment net profit /
(loss) from continuing
operations before tax
2019
Segment revenue
Other income
Interest income
Total income
Segment net profit /
(loss) from continuing
operations before tax
Segment assets
Graphite
Exploration
and Mining
$
-
-
-
-
-
Battery
Technology
$
4,253,435
785,154
-
5,038,589
Battery
Materials
$
-
Unallocated
$
-
Total
$
4,253,435
-
-
-
59,000
844,154
723
723
59,723
5,098,312
(853,084)
(7,426,978)
(11,748,464)
(20,028,526)
Graphite
Exploration
and Mining
$
-
Battery
Technology
$
1,817,049
Battery
Materials
$
-
Unallocated
$
-
Total
$
1,817,049
-
-
-
443,679
2,576,131
341
3,020,151
-
-
2,260,728
2,576,131
4,533
4,874
4,533
4,841,733
(10,667,897)
(9,109,713)
(470,476)
(6,257,481)
(26,505,567)
Graphite
Exploration
and Mining
$
2,998,439
Battery
Technology
$
5,872,307
Battery
Materials
$
28,744,416
Unallocated
$
37,642,256
Total
$
75,257,418
2020
Segment assets
79
For personal use only
Notes to the financial statements for the year ended 30 June 2019
Note 25 Operating segments (continued)
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
2019
Segment assets
Segment liabilities
2020
Segment liabilities
Graphite
Exploration
and Mining
$
2,850,794
Battery
Technology
$
5,354,006
Battery
Materials
$
21,386,941
Unallocated
$
5,328,158
Total
$
34,919,899
Graphite
Exploration
and Mining
$
-
Battery
Technology
$
2,868,546
Battery
Materials
$
3,604,836
Unallocated
$
2,252,043
Total
$
8,725,125
Graphite
Exploration
and Mining
$
Battery
Technology
$
Battery
Materials
$
Unallocated
$
Total
$
2019
Segment liabilities
-
2,809,998
1,279,125
15,057,999
19,147,121
Geographical Segments
For the purposes of segment reporting, all segment activities relating to Graphite Exploration and
Mining are carried out in Australia and all segment activities relating to Battery Materials and
Battery Technology are carried out in North America.
80
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 26 Cash flow information
Reconciliation of profit / (loss) after income tax to net cash outflow from operating activities
Profit / (loss) for the period
Adjustments for
Share based payments
Borrowing costs
Fixed assets written off
Foreign exchange (gain) loss
Gain on acquisition of subsidiary
Share of net loss of joint venture
Fair value gain on borrowings
Impairment losses
Amortisation & depreciation expense
Income tax expense
Change in operating assets and liabilities:
(Increase)/decrease in other operating assets
Increase in trade creditors
Increase in other operating liabilities
Net cash outflow from operating activities
Consolidated
2020
$
(20,028,526)
2019
$
(26,121,912)
7,558,953
5,098,906
210,773
387,371
-
-
-
-
1,380,303
-
(976,969)
387,198
388,474
(5,593,517)
6,673,510
1,405,456
90,477
(174,990)
(2,576,131)
751,981
(114,106)
15,918,925
494,948
(273,939)
(672,354)
288,424
309,624
(4,000,087)
81
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 26 Cash flow information (continued)
(a) Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt for each period presented.
Net debt
Cash and cash equivalents
Lease liability - repayable within one year
Borrowings – repayable within one year (including
overdraft)
Lease liability - repayable after one year
Borrowings – repayable after one year
Net cash (debt)
Cash and cash equivalents
Gross debt – fixed interest rates
Gross debt – variable interest rates
Net cash (debt)
2020
$
2019
$
38,807,662
(141,124)
(274,917)
(2,778,979)
(1,937,095)
33,675,547
38,807,662
(887,532)
(4,244,583)
33,675,547
6,054,664
-
(4,145,069)
-
(13,016,841)
(11,107,246)
6,054,664
(15,808,268)
(1,353,642)
(11,107,246)
Liabilities from financing activities
Borrowings due
within 1 year
$
(56,254)
(3,964,813)
-
Borrowings due
after 1 year
$
(1,645,776)
(574,917)
(10,905,530)
Total
$
(1,336,438)
1,149,342
(10,905,530)
(124,002)
(4,145,069)
(6,118,751)
4,000,000
-
5,847,779
(416,041)
109,382
(13,016,841)
6,508,544
(4,000,000)
(14,620)
(11,107,246)
33,142,791
-
10,468,843
(4,676,620)
(4,716,074)
10,468,843
1,171,159
33,675,547
Cash
$
365,592
5,689,072
-
-
6,054,664
32,752,998
-
-
38,807,662
Net debt as at 1 July 2018
Cashflows
Conversion/proceeds of loan
notes
Other non-cash movements
Net debt as at 30 June 2019
Cashflows
Conversion of short-term
loan to loan notes
Redemption of loan notes
Other non-cash movements
Net cash as at 30 June 2020
82
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 27
Interests in subsidiaries
Information about Principal Subsidiaries
The Group’s material subsidiaries at 30 June 2020 are set out in the following table. Unless otherwise
stated, each entity has share capital consisting solely of ordinary shares that are held by the Group, and
the proportion of ownership interest held equals the voting rights held by the Group. The country of
incorporation or registration is also their principal place of business.
Name of entity
MD South Tenements Pty Ltd
Novonix Battery Testing Services
Inc
Place of business
/ country of
incorporation
Australia
Ownership interest
held of the group
2019
2020
%
%
100%
100%
Canada
100%
100%
Principal
activities
Graphite
exploration
Battery
technology
services.
Novonix Corp
PUREgraphite LLC
USA
USA
100%
100%
100%
100%
Investment
Battery materials
development
Note 28 Share-based payments
OPTIONS
A summary of movements of all options issued is as follows:
Options outstanding as at 1 July 2018
Granted
Granted – Subject to shareholder approval
Forfeited
Exercised
Options outstanding as at 30 June 2019
Granted to employees
Granted to loan note holders (refer Note 22)
Cancelled
Expired
Exercised
Options outstanding as at 30 June 2020
Number
Weighted
Average
Exercise Price
21,175,000
33,710,000
17,500,000
(365,000)
(5,000,000)
67,020,000
4,500,000
10,000,000
(40,500,000)
(970,000)
(183,333)
39,866,667
$0.64
$0.69
$0.50
$0.65
$0.30
$0.65
$0.50
$0.80
$0.77
$0.60
$0.66
$0.55
The weighted average remaining contractual life of options outstanding at year end was 5.8 years (2019:
5.5 years).
83
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 28 Share-based payments (continued)
Details of options awarded during the financial year are as follows:
a.
On 8 July 2019, 2,500,000 share options were awarded to an employee of the group (who is not KMP). The terms of the options are set out in the table below.
The options hold no voting or dividend rights and are not transferable. The options vest in 10 tranches on achievement of progressive PUREgraphite sales
milestones. The vesting dates in the table below represent the current estimate of when the vesting conditions will be met.
The fair value of these options was $804,375. This value was calculated using a binomial option pricing model applying the following inputs:
Number of options
Exercise price
Award date
Expiry date
Vesting date
Volatility
Dividend yield
Risk-free
rate
Fair value at grant
date
interest
Tranche 1
250,000
$0.50
Tranche 3
250,000
$0.50
Tranche 4
250,000
$0.50
Tranche 2
250,000
$0.50
Tranche 10
250,000
$0.50
08/07/2019 08/07/2019 08/07/2019 08/07/2019 08/07/2019 08/07/2019 08/07/2019 08/07/2019 08/07/2019 08/07/2019
08/07/2029 08/07/2029 08/07/2029 08/07/2029 08/07/2029 08/07/2029 08/07/2029 08/07/2029 08/07/2029 08/07/2029
31/05/2022 31/03/2023 30/06/2023 30/11/2023 31/12/2023 28/02/2024 31/03/2024 30/04/2024 31/05/2024 30/06/2024
85.08%
0%
1.32%
Tranche 7
250,000
$0.50
Tranche 9
250,000
$0.50
Tranche 8
250,000
$0.50
Tranche 6
250,000
$0.50
Tranche 5
250,000
$0.50
85.08%
0%
1.32%
85.08%
0%
1.32%
85.08%
0%
1.32%
85.08%
0%
1.32%
85.08%
0%
1.32%
85.08%
0%
1.32%
85.08%
0%
1.32%
85.08%
0%
1.32%
85.08%
0%
1.32%
$0.3026
$0.3115
$0.3179
$0.3201
$0.3248
$0.3255
$0.3264
$0.3270
$0.3307
$0.3310
84
For personal use only
Note 28 Share-based payments (continued)
Details of options awarded during the financial year are as follows:
b.
On 7 December 2019, 1,000,000 share options were awarded to an employee of the group (who is not KMP). The terms of the options are set out in the table
below. The options hold no voting or dividend rights and are not transferable. The options vest in 10 tranches on achievement of progressive PUREgraphite
sales milestones. The vesting dates in the table below represent the current estimate of when the vesting conditions will be met.
The fair value of these options was $456,580. This value was calculated using a binomial option pricing model applying the following inputs:
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Number of options
Exercise price
Award date
Expiry date
Vesting date
Volatility
Dividend yield
Risk-free
rate
Fair value at grant
date
interest
Tranche 1
100,000
$0.50
7/12/2019
7/12/2029
Tranche 3
100,000
$0.50
7/12/2019
7/12/2029
Tranche 2
100,000
$0.50
7/12/2019
7/12/2029
Tranche 10
100,000
$0.50
7/12/2019
7/12/2029
31/05/2022 31/03/2023 30/06/2023 30/11/2023 31/12/2023 28/02/2024 31/03/2024 30/04/2024 31/05/2024 30/06/2024
84.89%
0%
1.14%
Tranche 9
100,000
$0.50
7/12/2019
7/12/2029
Tranche 4
100,000
$0.50
7/12/2019
7/12/2029
Tranche 8
100,000
$0.50
7/12/2019
7/12/2029
Tranche 7
100,000
$0.50
7/12/2019
7/12/2029
Tranche 6
100,000
$0.50
7/12/2019
7/12/2029
Tranche 5
100,000
$0.50
7/12/2019
7/12/2029
84.89%
0%
1.14%
84.89%
0%
1.14%
84.89%
0%
1.14%
84.89%
0%
1.14%
84.89%
0%
1.14%
84.89%
0%
1.14%
84.89%
0%
1.14%
84.89%
0%
1.14%
84.89%
0%
1.14%
$0.4274
$0.4415
$0.4513
$0.4543
$0.4611
$0.4623
$0.4636
$0.4644
$0.4696
$0.4703
85
For personal use only
Note 28 Share-based payments (continued)
Details of options awarded during the financial year are as follows:
c.
On 16 January 2020, 1,000,000 share options were awarded to an employee of the group (who is not KMP). The terms of the options are set out in the table
below. The options hold no voting or dividend rights and are not transferable. The options vest in 10 tranches on achievement of progressive PUREgraphite
sales milestones. The vesting dates in the table below represent the current estimate of when the vesting conditions will be met.
The fair value of these options was $377,390. This value was calculated using a binomial option pricing model applying the following inputs:
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Number of options
Exercise price
Award date
Expiry date
Vesting date
Volatility
Dividend yield
Risk-free
rate
Fair value at grant
date
interest
Tranche 3
100,000
$0.50
Tranche 4
100,000
$0.50
Tranche 2
100,000
$0.50
Tranche 1
100,000
$0.50
Tranche 10
100,000
$0.50
16/01/2020 16/01/2020 16/01/2020 16/01/2020 16/01/2020 16/01/2020 16/01/2020 16/01/2020 16/01/2020 16/01/2020
16/01/2030 16/01/2030 16/01/2030 16/01/2030 16/01/2030 16/01/2030 16/01/2030 16/01/2030 16/01/2030 16/01/2030
31/05/2022 31/03/2023 30/06/2023 30/11/2023 31/12/2023 28/02/2024 31/03/2024 30/04/2024 31/05/2024 30/06/2024
82.80%
0%
1.18%
Tranche 9
100,000
$0.50
Tranche 7
100,000
$0.50
Tranche 8
100,000
$0.50
Tranche 6
100,000
$0.50
Tranche 5
100,000
$0.50
82.80%
0%
1.18%
82.80%
0%
1.18%
82.80%
0%
1.18%
82.80%
0%
1.18%
82.80%
0%
1.18%
82.80%
0%
1.18%
82.80%
0%
1.18%
82.80%
0%
1.18%
82.80%
0%
1.18%
$0.3541
$0.3648
$0.3726
$0.3753
$0.3809
$0.3819
$0.3832
$0.3839
$0.3883
$0.3889
86
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 28
Share-based payments (continued)
PERFORMANCE RIGHTS
A summary of movements of all performance rights issued is as follows:
Number on issue
Number Vested
Performance rights outstanding as at 1 July 2018
Granted
Exercised
Expired
1,645,833
1,750,000
-
-
Performance rights outstanding as at 30 June 2019
3,395,833
Vested
-
Performance rights outstanding as at 30 June 2020
3,395,833
895,833
-
-
-
895,833
1,500,000
2,395,833
In FY2018, a total of 2,500,000 performance rights were awarded to KMP (1,750,000 were subject to
shareholder approval and were formally granted in FY2019).
Although not all vesting conditions were met by the vesting date of 1 January 2020, the overall
performance of the Company and the Executives has been high, and therefore the board approved
the vesting of 60% (1,500,000) of the performance rights on a discretionary basis.
The associated expense for FY2020 for these performance rights is $78,362.
Note 29
Events after the reporting date
No matters or circumstances have arisen since the end of the financial year which significantly affected
or could significantly affect the operations of the Company, the results of those operations or the state
of affairs of the Company in future financial years.
87
For personal use only
Notes to the financial statements for the year ended 30 June 2020
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Note 30
Related party transactions
During the financial year:
(a) Philip St Baker was paid rent totalling $77,579 (USD$52,000), for the use of property owned
by Mr St Baker in Colorado, USA. Mr St Baker’s salary has been adjusted to reflect the
additional benefit Mr St Baker is receiving.
(b) 10,000,000 unsecured loan notes with a face value of $0.40 were issued to the St Baker
Energy Innovation Fund, a related party of Mr St Baker, on the terms set out in note 22.
Prior to the issue of the loan notes, the St Baker Energy Innovation Fund provided the
Company with a $4,000,000 short-term unsecured loan bearing interest at a rate of 10%.
Following shareholder approval on 31 July 2019 for the loan notes, the short-term loan was
converted to loan notes.
(c) In March 2020 the Company entered into a short-term loan agreement with the St Baker
Energy Innovation Fund for $3,400,000. The loan is unsecured, interest bearing at a rate of
12.5% pa from the date of drawdown calculated on a daily basis and is repayable upon the
earlier of the Company raising sufficient funds and 6 months. This loan was settled as part
of the June 2020 Capital Raising, refer note 11.
(d) At a General Meeting of Shareholders held on 30 June 2020, Shareholders approved the issue
of 67,085,100 fully paid ordinary shares to the St Baker Energy Innovation Fund at an issue
price of $0.29 per share raising $19,454,679. The consideration for the shares received
consisted of cash and the retirement of both convertible loan notes and short-term loans
owing. Details of the Strategic Placement are set out in the table below:
Face value of
loan notes
and balance
Interest
of short-term
accrued
loan
$
$
10,000,000 1,187,397
131,575
3,400,000
-
-
13,400,000 1,318,972
Placement
Total
proceeds
$
$
- 11,187,397
3,531,575
-
4,735,707
4,735,707
4,735,707 19,454,679
Shares
issued
(Number)
38,577,232
12,177,845
16,330,023
67,085,100
Loan notes redeemed
Short-term loan repaid
Placement proceeds
Total
(e) The Group entered into short-term loan agreements with directors totaling $3,148,960.
These loans were unsecured, interest bearing at a rate of 8% pa from the date of drawdown
calculated on a daily basis, and were repayable upon the earlier of the Company raising
sufficient funds and 6 months. These loans were settled as part of the Capital Raising (refer
to note 11).
There were no other related party transactions during the financial year. For details of disclosures
relating to key management personnel, refer to Note 8.
88
For personal use only
Notes to the financial statements for the year ended 30 June 2020
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Note 31 Commitments
(a)
Exploration commitments
Commitments for payments under exploration permits
in existence at the reporting date but not recognised as
liabilities payable
Consolidated
2020
$
2019
$
6,000
5,000
So as to maintain current rights to tenure of various exploration tenements, the Group will be required
to outlay amounts in respect of tenement exploration expenditure commitments. These outlays,
which arise in relation to granted tenements are noted above. The outlays may be varied from time
to time, subject to approval of the relevant government departments, and may be relieved if a
tenement is relinquished.
Exploration commitments are calculated on the assumption that each of these tenements will be held
for its full term. But, in fact, commitments will decrease materially as exploration advances and
ground that is shown to be unprospective is progressively surrendered. Expenditure commitments on
prospective ground will be met out of existing funds, farm-outs, and new capital raisings.
(b) Non-cancellable operating leases
The Group entered into a commercial lease for the rental of a property in Tennessee, USA. The lease
has a remaining life of 14 years (after factoring in extension options). There are no restrictions placed
upon the lessee by entering into these leases. From 1 July 2019, the Group has recognised a right-of-
use asset for this lease, see note 2 ‘Changes in accounting policies’ for further information.
Within one year
Later than one year but not later than five years
Later than five years
2019
$
242,481
1,043,910
-
1,286,391
89
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 32 Financial risk management
This note explains the group’s exposure to financial risks and how these risks could affect the group’s
future financial performance. Current year profit and loss information has been included where
relevant to add further context.
The Group’s financial instruments consist mainly of deposits with banks and accounts receivable and
payable.
The totals for each category of financial instruments, measured in accordance with AASB 139:
Financial Instruments: Recognition and Measurement as detailed in the accounting policies to these
financial statements, are as follows:
Financial assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial liabilities
Trade payables
Lease liabilities
Borrowings
Total financial liabilities
Consolidated
2020
$
2019
$
Notes
38,807,662
1,075,357
39,883,019
847,724
2,920,103
2,212,012
5,979,839
6,054,664
601,778
6,656,442
1,307,707
-
17,161,910
18,469,617
The Board has overall responsibility for the determination of the Group’s risk management objectives
and policies. The overall objective of the Board is to set policies that seek to reduce risk as far as
possible without unduly affecting the Group’s competitiveness and flexibility.
Market risk
Market risk is the risk that the change in market prices, such as foreign exchange rates, interest rates
and equity prices will affect the Group’s income or the value of its holdings of financial instruments.
The Group is not exposed to market risks other than interest rate risk.
Foreign currency risk
Exposure to foreign currency risk may result in the fair value or future cash flows of a financial
instrument fluctuating due to movement in foreign exchange rates of currencies in which the Group
holds financial instruments which are other than the AUD functional currency of the Group.
With instruments being held by overseas operations, fluctuations in the US dollar and the Canadian
dollar may impact on the Group’s financial results.
90
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 32 Financial risk management (continued)
The following table shows the foreign currency risk as on the financial assets and liabilities of the
Group’s operations denominated in currencies other than the functional currency of the operations.
The group’s exposure to foreign currency risk at the end of the reporting period, expressed in
Australian dollars, was as follows:
Cash at bank
Trade receivables
Borrowings
Trade payables
2020
CAD
$
377,909
50,321
2,025,562
154,305
2019
CAD
$
196,014
23,244
2,076,876
25,454
2020
USD
$
16,591,686
616,494
36,706
349,475
2019
USD
$
559,305
232,417
-
919,415
Cash flow and fair value interest rate risk
The group’s main interest rate risk arises from long-term borrowings with variable rates, which expose
the group to cash flow interest rate risk. During 2020, the group’s borrowings at variable rates were
denominated in Canadian dollars.
As the Group has interest-bearing cash assets, the Company’s income and operating cash flows are
exposed to changes in market interest rates. The Company manages its exposure to changes in
interest rates by using fixed term deposits.
At 30 June 2020, if interest rates had changed by -/+ 100 basis points from the year-end rates with all
other variables held constant, post-tax profit / (loss) for the year would have been $397,091 (2019:
$60,547) lower/higher, as a result of higher/lower interest income from cash and cash equivalents.
Credit risk
Credit risk is managed on a Group basis. Credit risk arises primarily from cash and cash equivalents
and deposits with banks and financial institutions. For bank and financial institutions, only
independently rated parties with a minimum rating of ‘AAA’ are accepted.
The credit quality of financial assets that are neither past due nor impaired can be assessed by
reference to external credit ratings (if available).
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to
meet obligations when due.
91
For personal use only
ANNUAL FINANCIAL REPORT – 30 JUNE 2020
Notes to the financial statements for the year ended 30 June 2020
Note 32 Financial risk management (continued)
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows. No
finance facilities were available to the Group at the end of the reporting period.
All financial assets mature within one year. The maturity of all financial liabilities is set out in the table
below.
Financing arrangements
The group has no undrawn borrowing facilities as at 30 June 2020.
Maturities of financial liabilities
As at 30 June 2020, the contractual maturities of the group’s non-derivative financial liabilities were
as follows:
Contractual
maturities of
financial
liabilities
At 30 June 2020
Trade payables
Lease liabilities
Borrowings
Total non-
derivatives
Less than
6 months
6 - 12
months
Between
1 and 2
years
Between
2 and 5
years
Over 5
years
Total
contractual
cash flows
Carrying
amount
847,724
127,370
102,143
-
128,000
116,424
-
262,931
227,631
-
-
826,551 2,478,877
566,086 1,544,740
847,724
847,724
3,823,729 2,920,103
2,557,024 2,212,011
1,077,237
244,424
490,562
1,392,637
4,023,617
7,228,477
5,979,838
END OF ANNUAL FINANCIAL REPORT – 30 JUNE 2020
92
For personal use only
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
In the Directors’ opinion:
(a)
the financial statements and notes set out on pages 33 to 92 are in accordance with the
Corporations Act 2001, including:
(I)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements, and
giving a true and fair view of the consolidated entity’s financial position as at 30 June
2020 and of its performance for the financial year ended on that date, and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable.
Note 1 confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Managing Director and Chief Financial Officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
A Bellas
Director
Brisbane, 21 September 2020
93
For personal use only Independent auditor’s report
To the members of Novonix Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Novonix Limited (the Company) and its controlled entities (together the
Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial
performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
the consolidated balance sheet as at 30 June 2020
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated statement of profit or loss and other comprehensive income for the year then ended
the notes to the consolidated financial statements, which include a summary of significant accounting
policies
the directors’ declaration.
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
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 & 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.
PricewaterhouseCoopers, ABN 52 780 433 757
480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
94
For personal use only
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report, which indicates that the Group incurred a net loss of $20.0m
and net operating cash outflows of $5.6m during the year ended 30 June 2020. The ability of the Group to
continue as a going concern depends upon the ability of the Group to raise capital as and when necessary, and the
successful and profitable growth of the battery materials and battery technology businesses. These conditions,
along with other matters set forth in Note 1, indicate that a material uncertainty exists that may cast significant
doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the
financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial report as a whole, taking into account the geographic and management structure of the Group, its
accounting processes and controls and the industry in which it operates.
The Group is an integrated developer and supplier of materials, equipment and services for the global lithium-ion
battery industry with operations in the USA and Canada. The Group also owns a natural graphite deposit in
Queensland, Australia. The regional finance functions report to the Group finance function in Brisbane, Australia,
where consolidation is performed.
Materiality
For the purpose of our audit we used overall Group materiality of $0.75 million, which represents
approximately 1% of the Group’s total assets.
We applied this threshold, together with qualitative considerations, to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the
financial report as a whole.
We chose total assets as the benchmark because, in our view, it is the benchmark against which the
performance of the Group is most commonly measured whilst not in the commercialisation phase.
We utilised a 1% threshold based on our professional judgement, noting it is within the range of commonly
acceptable asset related thresholds.
Audit Scope
Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
The accounting processes are structured around the Group finance function located in Brisbane.
95
For personal use only 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 for the current period. The key audit 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. Further, any commentary on the outcomes of a particular audit procedure is made in that context.
We communicated the key audit matters to the Audit Committee.
In addition to the matter described in the Material uncertainty related to going concern section, we have
determined the matter(s) described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Accounting for the capital raising
(Refer to note 11)
Our procedures in relation to accounting for the capital
raising included, amongst others:
In June 2020, the Group completed a $63m capital
raising via an institutional placement, an accelerated
non-renouncable rights issue, and a strategic
placement.
The capital raising resulted in the simplification of
the Group’s capital structure through the redemption
of convertible loan notes and the settlement of short
term loans, as well as the cancellation of 40.5m
options held by Directors, management and loan note
holders.
Due to the multiple elements of the capital raising, a
number of areas of the financial statements were
impacted, including borrowings, equity, finance costs
and share based payment expenses.
Accounting for the capital raising was a key audit
matter due to its financial significance and its impact
on the financial statements.
Obtaining ASX filings detailing the number of
shares issued as part of the capital raising
Agreeing cash proceeds raised to bank
statements
Obtaining underwriting agreements and
convertible loan note redemption notices
Recalculating both the fair value and the
carrying value of convertible loan note liabilities
at redemption date, with reference to the
convertible loan note agreements
Agreeing that the difference between the fair
value and the carrying value of convertible loan
notes at redemption date was recognised
appropriately as a loss within borrowing costs
Recalculating the value of short term loans at
settlement date, with reference to the loan
agreements
Agreeing cash settlements to bank statements,
for the portion of convertible loan notes and
short term loans settled in cash
Obtaining share option cancellation agreements
and the relevant ASX filings detailing the
number of options being cancelled
Recalculating the accelerated expense for each
of the tranches of cancelled options
Assessing the accuracy and completeness of the
related disclosures in the financial statements,
in light of the requirements of Australian
Accounting Standards
96
For personal use only Key audit matter
How our audit addressed the key audit matter
Assessing the recoverability of the Group’s
goodwill
(Refer to note 12)
At 30 June 2020, the Group recognised $17.4m of
goodwill, which is allocated fully to the PUREgraphite
cash generating unit (“CGU”).
As required by Australian Accounting Standards, at
30 June 2020, the Group performed an impairment
assessment over the goodwill balance by calculating a
recoverable amount of the PUREgraphite CGU.
The recoverable amount of the PUREgraphite CGU
was determined by the Group on a ‘Fair Value less
Costs to Sell’ basis.
Assessing the recoverability of the Group’s goodwill
was considered a key audit matter due to the financial
significance of the goodwill, as well as the judgement
involved in assessing its recoverability.
Our procedures in relation to assessing the recoverability
of the Group’s goodwill included, amongst others:
Assessing the appropriateness of the Group’s
determination of its CGUs
Assessing whether the allocation of assets,
including goodwill, to CGUs was consistent with
our knowledge of the Group’s operations and
internal reporting
Testing the mathematical accuracy of the
Group’s underlying calculation of the
recoverable amount of the CGU
Assessing the methodology adopted by
management in determining the recoverable
amount, with the assistance of PwC Valuation
experts
Evaluating the adequacy of the related
disclosures in the financial statements, in light
of the requirements of Australian Accounting
Standards
We also compared the Group’s net assets as at 30 June
2020 of $66.5m to its market capitalisation of $302.9m
at 30 June 2020, and noted the $236.4m of implied
headroom in the comparison.
Measurement and recognition of share based
payment transactions
(Refer to note 28)
Our procedures in relation to assessing the measurement
and recognition of share based payment transactions
included, amongst others:
For the year ended 30 June 2020, the Group
recognised share based payment expenses totalling
$7.6m.
Accounting for share based payment transactions
requires judgement in determining the fair value of
the equity instruments on grant date and assessing
the vesting period over which the share based
payment expense should be recognised. There is also
judgement in assessing the likelihood and timing of
specific performance hurdles being met.
The measurement and recognition of share based
payment transactions was deemed to be a key audit
matter due to the level of judgement involved, the
magnitude of the share based payment expenses and
the contribution of share based payment expenses to
For grants of new options during the year:
o Obtaining formal documents detailing
the relevant terms and conditions of
the grants
o
o
Assessing the calculation of the fair
value of the options on grant date
Assessing whether the assumption that
any applicable performance conditions
will be met is consistent with
management forecasts
Recalculating the expense for the year ended 30
June 2020 based on the grant date fair value,
the Group’s assumptions for the expected
number of options or performance rights to
97
For personal use only Key audit matter
How our audit addressed the key audit matter
the overall remuneration received by key
management personnel.
vest, and the vesting period, with reference to
the terms and conditions stated in the relevant
documentation, and management forecasts
Assessing the accuracy and completeness of the
related disclosures in the financial statements,
in light of the requirements of Australian
Accounting Standards
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report for the year ended 30 June 2020, but does not include the financial report and our
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 on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of the 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/ar1_2020.pdf. This
description forms part of our auditor's report.
98
For personal use only Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 16 to 27 of the directors’ report for the year ended 30
June 2020.
In our opinion, the remuneration report of Novonix Limited for the year ended 30 June 2020 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.
PricewaterhouseCoopers
Michael Shewan
Partner
Brisbane
21 September 2020
99
For personal use only SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 14 September 2020.
A Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
1 - 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Class of equity security
Ordinary shares
6,214
5,814
1,513
1,719
240
15,500
There were 333 holders of less than a marketable parcel of ordinary shares.
B
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Ordinary shares
Name
St Baker Energy Holdings Pty Ltd
Allegro Capital Nominees Pty Ltd
Washington H Soul Pattinson and Company Limited
Philip St Baker & Peta St Baker
Argo Investments Limited
Citicorp Nominees Pty Ltd
Carpe Diem Asset Management Pty Ltd
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Limited
Merrill Lynch (Australia) Nominees Pty Limited
George Chapman
Mutual Trust Pty Ltd
HSBC Custody Nominees (Australia) Limited – A/c 2
CS Third Nominees Pty Ltd
David Andrew Stevens
Apollan Pty Ltd
Mrs Mingmin Lu
BNP Paribas Nominees Pty Ltd
John Christopher Burns
Maria Bellas
Total
Number held
60,901,581
24,336,337
14,729,466
14,094,740
13,296,969
10,594,713
9,047,622
6,036,655
4,404,053
4,309,329
4,166,670
4,132,794
4,099,409
3,890,411
3,843,627
3,323,173
3,246,412
2,503,247
2,331,936
2,300,000
195,589,144
% of issued shares
17.73
7.09
4.29
4.10
3.87
3.08
2.63
1.76
1.28
1.25
1.21
1.20
1.19
1.13
1.12
0.97
0.95
0.73
0.68
0.67
56.93
100
For personal use only Unquoted equity securities
Performance rights
Share options
SHAREHOLDER INFORMATION
Number on issue
3,395,833
39,116,667
Number of holders
5
21
Holders of more than 20% of unquoted share options on issue
Andrew Liveris
Christopher Burns
Number held
14,000,000
9,500,000
% of total on issue
35.8%
24.3%
Holders of more than 20% of unquoted performance rights on issue
Philip St Baker
C
Substantial holders
Substantial holders in the company are set out below:
Number held
1,895,833
% of total on issue
55.8%
Ordinary shares
Greg Baynton and Allegro Capital Nominees Pty Ltd
St Baker Energy Holdings Pty Ltd
Number held
Percentage
24,990,019
63,076,145
7.2%
18.1%
D Voting rights
The voting rights attaching to each class of equity securities are set out below:
(a)
(b)
(c)
(d)
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.
Performance rights: No voting rights
Share options: No voting rights
Loan notes: No voting rights
END OF SHAREHOLDER INFORMATION
101
For personal use only