ANNUAL
REPORT
2019
1
Scidev ltd
ABN 25 001 150 849
Financial Report for the year ended 30 june 2019
2
SciDev Ltd
REPORT 2019
ANNUAL
TABLE OF
CONTENTS
Chairman’s Le(cid:425)er
Managing Director & CEO’s Le(cid:425)er
Review of Opera(cid:415)ons
Director’s Report
Remunera(cid:415)on Report
Auditor's independence declara(cid:415)on
Statement of profit or loss and other comprehensive income
Statement of financial posi(cid:415)on
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declara(cid:415)on
Independent auditor's report
Addi(cid:415)onal ASX Informa(cid:415)on
Corporate directory
Page
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61
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68
3
Chairman’s Le(cid:425)er
Dear fellow SciDev shareholder
The 2019 financial year has seen a significant step-change for your company.
Managing Director and CEO Lewis U(cid:427)ng delivers a comprehensive update on the business’s performance in the following pages
and I won’t speak to that in detail here. However, I would like to highlight the major ini(cid:415)a(cid:415)ves undertaken by SciDev this year.
Our People – the success of SciDev is based on our excep(cid:415)onally skilled people and I extend my sincere thanks to them. SciDev
took the ini(cid:415)a(cid:415)ve of improving our people with the appointment of Lewis U(cid:427)ng in March 2018. Lewis was appointed as
Managing Director and CEO of the company in April 2019 and has driven a significant period of momentum for the company.
Lewis is well supported by a team of highly capable engineers led by Jamiel Muhor and Jeffrey Zhang - who joined the team via
our strategic alignment with Nuoer Group. With Simone Wa(cid:425) joining the Board in October 2018 followed by Jon Gourlay in mid
-2019 and support from our Company Secretary Heath Roberts, we have a first class team that can con(cid:415)nue to build on the
successes delivered to date.
Our Technology – SciDev’s innova(cid:415)ve Op(cid:415)Flox® process control system improves the mineral processing systems at our
customers opera(cid:415)ons, delivering addi(cid:415)onal processing (cid:415)me and reduced consumable spend for end users. Our in house
exper(cid:415)se, coupled with our strategic partnership with Nuoer Group is providing a leading supply of high-quality chemical
product and technology sales.
Our Shareholders – we have recognised that in order to do jus(cid:415)ce to our ambi(cid:415)ous growth plans the Company has required
addi(cid:415)onal capital. A $2.5million capital raising was undertaken in February 2019 at $0.06 per share; by way of placement and
rights issue, followed by a second capital raising of $4.16 million in September 2019 at $0.26 per share, by way of ins(cid:415)tu(cid:415)onal
placement. We recognise and thank both our long term shareholders and our new ins(cid:415)tu(cid:415)onal shareholders for your support.
I pass my thanks to my fellow Board Members, and look forward to sharing SciDev’s ongoing success as the forthcoming year
unfolds.
Yours sincerely
Trevor Jones
Chairman
4
SciDev Ltd
REPORT 2019
ANNUAL
Managing Director & CEO
Dear Shareholders,
It is a privilege to write my first le(cid:425)er to you as CEO and Managing Director of SciDev. The past year has seen significant progress from the
Company across several areas. Recent contract wins reflect the commercial viability of our technology, posi(cid:415)oning SciDev as an emerging
leader in solid-liquid separa(cid:415)on across a range of industries.
We will con(cid:415)nue to work with our exis(cid:415)ng founda(cid:415)on customers in Peabody and Iluka, delivering bespoke solu(cid:415)ons to meet their processing
needs. SciDev will con(cid:415)nue to push into new markets where our people, chemistries and technology can add value. We are pleased to have
announced our first major order from the US shale industry in July 2019. The oil and gas and construc(cid:415)on markets offer an exci(cid:415)ng area for
growth and the company will con(cid:415)nue to focus on those industries in several regions.
Our strategic rela(cid:415)onship with Nuoer Group in Oceania reflects our evolu(cid:415)on as a company. The rela(cid:415)onship assists in the ability for SciDev
to execute on our growth ambi(cid:415)ons quickly. Our joint ability to scale solu(cid:415)ons from Research and Development into commercial applica(cid:415)ons
is key to our mutual success.
Our people
Our business is based on our people, just as much as on our technology. SciDev technology is backed up with expert support from our
workforce of highly skilled engineers and chemists who have decades of relevant global industry experience. Our people engage directly with
our customers, on site, to build bespoke solu(cid:415)ons to their processing requirements.
We believe that the presence of our dedicated and highly trained staff on site, driving bespoke solu(cid:415)ons to exceed our customers’
requirements, is a unique differen(cid:415)ator that our larger global compe(cid:415)tors simply cannot match.
The Company has expanded our staff over FY19 with several key addi(cid:415)ons allowing us to broaden our technology por(cid:414)olio to ensure we can
con(cid:415)nue to provide complete solu(cid:415)ons to our end users. We will con(cid:415)nue to invest in developing our people to ensure that the company has
the right people to match our technologies and drive growth for SciDev.
I would like to thank all the SciDev staff for their significant efforts this year. As we enter into FY2020 I believe the company is well placed
from an opera(cid:415)onal and financial perspec(cid:415)ve, our commitment to our customers and recent momentum will con(cid:415)nue to deliver growth
throughout the current year and beyond.
Developing our strategic rela(cid:415)onships
During the year SciDev announced a binding agreement to acquire the exclusive distribu(cid:415)on and marke(cid:415)ng rights in Australia and other
Oceanic countries for polymer products produced by the Chinese based Nuoer Group.
Securing the exclusive distribu(cid:415)on and marke(cid:415)ng rights with Nuoer delivers SciDev an expanded market opportunity for the MaxiFlox®
technology, supply chain security and a world class partner that can manufacture products to SciDev specifica(cid:415)ons. The broadening
coopera(cid:415)on between the two groups is expected to deliver unparalleled industry reach and significant growth opportuni(cid:415)es for SciDev as
evidenced through our growth during the year FY19.
Our rela(cid:415)onship with the Sinoz Group con(cid:415)nues to strengthen. The Sinoz Group are a globally significant manufacturer and supplier of
chemicals and reagents to the mining and agribusiness sectors. Our technologies are highly complementary to Sinoz’s product offering across
the mineral processing reagent value chain. SciDev will con(cid:415)nue to benefit from our rela(cid:415)onship with Sinoz, primarily in accelerated business
development opportuni(cid:415)es in the base metals mineral processing industry.
5
Managing Director & CEO con(cid:415)nued
Business review
The past financial year saw SciDev take considerable strides in the development and commercializa(cid:415)on of our technologies and chemistries. Key
customer developments during the year include:
Announcement of the delivery of our first full container load (FCL) into the con(cid:415)nental United States through our subsidiary SciDev (US) LLC
(ref ASX 23 May 2019). The order was to SciDev MOU partner Phoenix Process Equipment Company and is the result of marke(cid:415)ng efforts
over the prior periods.
Con(cid:415)nued evalua(cid:415)ons conducted across several coal projects in both the Bowen Basin and NSW coal fields with (cid:415)er-one producers. SciDev
is confident that some of these projects will further develop into commercial opportuni(cid:415)es for both chemical solu(cid:415)ons and the Op(cid:415)Flox®
system.
Our first sales into the US oil and gas market were announced post the end of the financial year. The order for fric(cid:415)on reducers was
des(cid:415)ned for the US Permian basin. The total orders to date for SciDev’s proprietary MaxiFlox® technology are AUD$1.08m.
Post the end of the financial year the Company announced that it has signed a three (3) year agreement for the supply and service of its
MaxiFlox® chemistry to Iluka Resources. The annual value of the contract over the term is likely to be between AUD $2.6M – AUD $4.0M.
Key areas of focus for SciDev in 2020
As we enter FY20 we are seeing the hard work from the SciDev team over the last few quarters convert in to sales contracts with recurring
revenue streams. Our goal of increasing our revenues with a view to becoming cashflow posi(cid:415)ve is now within reach. Considering this
achievement and the recent mul(cid:415)-year contract agreement with Iluka, SciDev is off to an excellent start in FY 2020. The focus for SciDev and the
management team through the FY20 financial year will be to:
Drive our revenue line through the execu(cid:415)on of a well-structured business development pipeline in the Oil & Gas and mineral processing
sectors.
Develop large customer opportuni(cid:415)es across several con(cid:415)nents where the synergies for the Op(cid:415)Flox® & MaxiFlox® combina(cid:415)on can deliver
the greatest value to our customers and subsequent value to shareholders.
Build upon the Company’s momentum in the Australian coal industry, transi(cid:415)oning across applica(cid:415)on, mineral types and key industry
players with our Op(cid:415)Flox® technology.
Further develop the opportuni(cid:415)es presented through SciDev (US) LLC into the US oil and gas sector focussing on transi(cid:415)oning R&D
chemistries into bespoke produc(cid:415)on solu(cid:415)ons.
Extend our technology into the precious metal and base metal sectors throughout Australia and Asia, while looking for other opportuni(cid:415)es
in currently unrealised sec(cid:415)ons of the mineral processing value chain.
Renew our effort in the Australian water and wastewater sector with strategic partnerships and licensing opportuni(cid:415)es with global
operators and key end users.
Deliver upon our recent agreement with Iluka in the mineral sands sector delivering value and further developing this rela(cid:415)onship
Con(cid:415)nue to strengthen and leverage our rela(cid:415)onship with Nuoer through joint marke(cid:415)ng and R&D efforts in key market areas while also
refining the geographic manufacturing footprint.
On behalf of the SciDev team I would like to thank the board, our highly talented & mo(cid:415)vated team and our shareholders for another year of
progression. I look forward to delivering another successful year in FY20.
Yours sincerely
Lewis U(cid:427)ng
Managing Director & CEO
6
Review of Opera(cid:415)ons
SciDev is a solu(cid:415)on provider to the water, mining, oil & gas and
construc(cid:415)on industries focussing on solid-liquid separa(cid:415)on. The
Company’s solu(cid:415)ons are built on the supply of bespoke chemistry
to solve environmental and processing challenges in the industries
we serve.
is manufactured using our novel
Our chemistry
inhouse
manufacturing methods. Where we don’t have the infrastructure
to manufacture in house, we partner with key industry partners.
During the year we partnered with Nuoer China to supply bespoke
chemistry exclusively for the Oceanic region and with key
customers globally. This partnership allows SciDev to penetrate a
USD$8B market with a complete chemistry por(cid:414)olio.
Our solu(cid:415)on-based approach has been bolstered with the
inclusion of a Professional Services offering which allows key
SciDev personnel to solve bespoke customer problems and
iden(cid:415)fy addi(cid:415)onal opportuni(cid:415)es for our products and services. Our
innova(cid:415)ve Op(cid:415)Flox® process control system improves the mineral
processing path
for our customers, delivering addi(cid:415)onal
processing (cid:415)me and reduced consumable spend for end users.
SciDev Ltd
REPORT 2019
ANNUAL
FY19 Highlights
Revenues from customers increased by 31.9% to $2.92m
Net cash posi(cid:415)on at end of period of $1.76m supported by
successful placement to Nuoer Group and a $2.5m fund
raising
Entered into a binding agreement to acquire the exclusive
distribu(cid:415)on and marke(cid:415)ng rights in Australia and other
Oceanic countries for polymer products produced by Chinese
base Nuoer Group
Lewis U(cid:427)ng commenced as CEO & Managing Director in April
2019 Established North American presence with SciDev (US)
LLC with first product sales to SciDev MOU partner Phoenix
Process Equipment Company with Nuoer manufactured
product
Con(cid:415)nued evalua(cid:415)on across several coal projects in the
Bowen Basin and NSW coal fields with (cid:415)er-one producers.The
Op(cid:415)flox® system trial con(cid:415)nues at a major coking coal
opera(cid:415)on with further commercial discussions an(cid:415)cipated in
the coming quarters
Strengthening of the board with the addi(cid:415)on of Newcrest
mining professional Jon Gourlay and Simone Wa(cid:425) from our
strategic investor Sinoz as Non Execu(cid:415)ve Directors
Post the end of the financial year, the company announced:
Receipt of its first major order for fric(cid:415)on reducers from
the oil & gas companies in the US Permian Basin. The
A$1.08m order validates SciDev’s strong US push.
Awarded a long term MaxiFlox® sales contract with Iluka
Resources which is expected to be AUS$8m – AUD$12m
over the course of the contract.
Comple(cid:415)on of a $4.16m capital raising to fund future
growth.
The past year has seen significant progress from the consolidated
en(cid:415)ty that establishes SciDev as a leader in process control and
chemistry products for solids-liquids separa(cid:415)on. SciDev has
expanded with several key addi(cid:415)ons to people and broadening of
its product por(cid:414)olio to ensure it can provide complete solu(cid:415)ons to
its end users.
7
Review of Opera(cid:415)ons con(cid:415)nued
Financial Review
The consolidated en(cid:415)ty delivered record revenue for the period
$2.92m, a 32% increase on the previous year. The record revenue
can be a(cid:425)ributed to organic growth in the water sector and sales
pull through from the Nuoer transac(cid:415)on announced in February
2019.
Net cash ou(cid:414)lows from opera(cid:415)ons during the year ended 30 June
2019 were $1.548m (a significant increase from the prior year's net
ou(cid:414)lows of $0.892m). Despite the ou(cid:414)low increasing on a full year
basis, the consolidated en(cid:415)ty was close to cash break-even in Q4
where the loss from opera(cid:415)ng ac(cid:415)vi(cid:415)es was $0.28m. The increase
in net cash ou(cid:414)lows from opera(cid:415)ons was principally a result of
increases in raw materials and consumables (inventory required to
grow), employee benefits expense (people required to execute
growth) and professional fees.
At the end of the period the consolidated en(cid:415)ty had a net cash
posi(cid:415)on of $1.76m. The balance sheet strength reflects the inflow
of
in
funds
($0.57m announced on 11 February) and the
thecompany
successful comple(cid:415)on of a $2.5m capital raising undertaken in
February 2019.
from the Nuoer Group’s strategic
investment
The consolidated en(cid:415)ty's robust financial posi(cid:415)on will allow SciDev
to accelerate the rollout of our technologies and con(cid:415)nue to
strengthen and execute on our growing business development.
Opera(cid:415)onal Review
Coal Ini(cid:415)a(cid:415)ves – North America
During FY19 SciDev announced the delivery of our first full
container load (FCL) into the con(cid:415)nental United States through our
subsidiary SciDev (US) LLC (refer ASX 23 May 2019). The order was
to SciDev MOU partner Phoenix Process Equipment Company and is
the result of marke(cid:415)ng efforts over the prior periods.
8
The chemistry, manufactured to SciDev specifica(cid:415)on by Nuoer
China, is set to be used in solids-liquid separa(cid:415)on projects in key
mineral processing applica(cid:415)ons. The arrangement builds on SciDev's
exis(cid:415)ng sales in North America and illustrates the value of the
Company's partnerships with both Nuoer China and Phoenix. As
previously announced, North America represents a poten(cid:415)al $1.4
billion-dollar market for SciDev.
Coal Ini(cid:415)a(cid:415)ves ‐ Australia
Addi(cid:415)onal evalua(cid:415)ons were conducted across several coal projects
in both the Bowen Basin and NSW coal fields with (cid:415)er-one
producers. SciDev is confident that some of these projects will
further develop into commercial opportuni(cid:415)es for both chemical
solu(cid:415)ons and the Op(cid:415)Flox® system.
Oil and Gas ini(cid:415)a(cid:415)ves – North America
Post the end of the financial year (22 July 2019) SciDev announced
its first sales into the US oil and gas market. The order for fric(cid:415)on
reducers was des(cid:415)ned for the US Permian basin. The total orders to
date
are
AUD$1.08m. Order volumes are expected to con(cid:415)nue to grow, with
further commercial field evalua(cid:415)ons to be undertaken in FY20 to
determine the poten(cid:415)al financial returns to SciDev from this very
large market.
for SciDev’s proprietary Op(cid:415)Flox®
technology
Mineral Sands – Australia
Post the end of the financial year (30 August) SciDev announced
that it has signed a three (3) year agreement for the supply and
service of its MaxiFlox® chemistry to Iluka Resources. The annual
value of the contract over the term is likely to be between AUD
$2.6m – AUD $4.0m. During an extensive evalua(cid:415)on period on site,
SciDev was able to build a knowledge base allowing for the design
of bespoke chemistry specific to the Jacinth Ambrosia
opera(cid:415)on. Addi(cid:415)onal discussions are underway to integrate the
SciDev Op(cid:415)Flox® system into the Jacinth-Ambrosia opera(cid:415)on. The
program of work started in March 2018 and the successful
conclusion validates the commercial u(cid:415)lity of SciDev's MaxiFlox®
chemistry in the mine tailings space. Importantly, it highlights the
calibre of the SciDev team
in execu(cid:415)ng the technical and
commercial evalua(cid:415)ons over an extended period with a (cid:415)er one
Australian mining company.
SciDev Ltd
REPORT 2019
ANNUAL
There were no other significant changes in the state of affairs of the
consolidated en(cid:415)ty during the financial year.
Ma(cid:425)ers subsequent to the end of the financial year
On 22 July 2019 the company reported its first major sales into the
US oil and gas market.
The company's shareholders approved the issue of the following
op(cid:415)ons at a General Mee(cid:415)ng held on 23 July 2019:
2,000,000 op(cid:415)ons to Mr Lewis E U(cid:427)ng - Managing Director and
Chief Execu(cid:415)ve Officer
650,000 op(cid:415)ons to Mr Jon Gourlay - Non-execu(cid:415)ve Director
250,000 op(cid:415)ons Mr Trevor A Jones - Non-execu(cid:415)ve Chairman
250,000 op(cid:415)ons to Ms Simone Wa(cid:425) - Non-execu(cid:415)ve Director
The op(cid:415)ons issued to Mr Lewis U(cid:427)ng have an exercise price of 10
cents and the op(cid:415)ons issued to the other Directors have an exercise
price of 12 cents. The op(cid:415)ons granted to Mr Lewis U(cid:427)ng are
subject to ves(cid:415)ng condi(cid:415)ons. The op(cid:415)ons granted to the non-
execu(cid:415)ve Directors do not have any ves(cid:415)ng condi(cid:415)ons. The op(cid:415)ons
expire on 23 July 2022. These op(cid:415)ons form part of a broader op(cid:415)on
issue to the Board and senior execu(cid:415)ves totalling 5,350,000 op(cid:415)ons
in total; refer to ASX announcement dated 16 August 2019.
On 30 August 2019 the company announced a major chemical
supply and equipment leasing contract with Iluka Resources.
On the 13 September 2019, the company announced the placement
of 16m new ordinary shares with
ins(cid:415)tu(cid:415)onal and
sophis(cid:415)cated investors at an issue price of $0.26 per share to raise
total proceeds of $4.16 million.
local
The 16m new shares represented 15% of the company’s exis(cid:415)ng
shares on issue, which is the maximum number of ordinary shares
that were able to be issued under ASX lis(cid:415)ng rules. The funds from
the placement will predominantly be used to increase inventory,
con(cid:415)nue development of the consolidated en(cid:415)ty's Op(cid:415)Flox and
MaxiFlox technology, and increase working capital. The capital
raising was completed on 20 September 2019.
9
Nuoer & SciDev Rela(cid:415)onship
During the year (ref ASX 11 February 2019) SciDev announced a
binding agreement to acquire the exclusive distribu(cid:415)on and
marke(cid:415)ng rights in Australia and other Oceanic countries for
polymer products produced by Chinese base Nuoer Group. Securing
the exclusive distribu(cid:415)on and marke(cid:415)ng rights with Nuoer delivers
SciDev an expanded market opportunity for the MaxiFlox®
technology, supply chain security and a world class partner that can
manufacture products to SciDev specifica(cid:415)ons. Through the
framework agreement, SciDev and Nuoer Group are undertaking an
in-depth analysis of market opportuni(cid:415)es both within the Oceania
region and in other jurisdic(cid:415)ons. The broadening coopera(cid:415)on
between the two groups is expected to deliver unparalleled
industry reach and significant growth opportuni(cid:415)es for SciDev
evidenced through our growth during the year.
Significant changes in the state of affairs
On 4 December 2018 the company completed a 10 to 1
consolida(cid:415)on of its issued shares and op(cid:415)ons. The number of
ordinary shares on issue at the date of the consolida(cid:415)on decreased
from 638,152,007 to 63,815,201.
On 11 February 2019, SciDev announced it had entered into a
binding Heads of Agreement (HOA) to acquire the exclusive
distribu(cid:415)on and marke(cid:415)ng rights in Australia and other Oceanic
countries for polymer products produced by the China-based Nuoer
Group (Nuoer Group). Under the terms of the HOA, SciDev's wholly
owned subsidiary, Science Developments Pty Ltd (SDPL), has been
granted the exclusive distribu(cid:415)on and marke(cid:415)ng rights from the
Nuoer Group's Australian opera(cid:415)ng en(cid:415)ty, Nuoer Chemical
Australia Pty Ltd (NCA) for a 10-year period. On 12 February 2019,
1,666,667 shares were issued to the Nuoer Group at a price of 6
cents per share to acquire the distribu(cid:415)on and marke(cid:415)ng rights for
Nuoer Group products in Australia and other Oceanic countries. On
the same day, 5,000,000 shares were issued to directors/employees
of Nuoer Chemical Australia Pty Ltd at a price of 6 cents per share
for contribu(cid:415)on of working capital.
On 13 March 2019, the company issued 22,614,624 shares at a price
of 6 cents per share in terms of a 2 for 7 non-renounceable
en(cid:415)tlements issue.
The funds raised from the issue of shares will be used to accelerate
the company's business growth.
Further develop the opportuni(cid:415)es presented through
SciDev (US) LLC into the US oil & gas sector.
Extend SciDev's technology into the precious metal and
base metal sectors throughout Australia and Asia, while
looking for other opportuni(cid:415)es in currently unrealised
sec(cid:415)ons of the mineral processing value chain.
Renew SciDev's effort in the Australian water and
wastewater sector with strategic partnerships and
licensing opportuni(cid:415)es with global operators and key
end users.
Deliver upon recent agreement with Iluka in the mineral
sands sector delivering value and further developing this
rela(cid:415)onship.
SciDev's
Con(cid:415)nue
rela(cid:415)onship with Nuoer through joint marke(cid:415)ng and
R&D efforts in key market areas while also refining the
geographic manufacturing footprint.
strengthen
leverage
and
to
Review of Opera(cid:415)ons con(cid:415)nued
FY20 Outlook
No other ma(cid:425)er or circumstance has arisen since 30 June 2019 that
has significantly affected, or may significantly affect
the
consolidated en(cid:415)ty's opera(cid:415)ons, the results of those opera(cid:415)ons, or
the consolidated en(cid:415)ty's state of affairs in future financial years .
Likely developments and expected results of opera(cid:415)ons:
The focus for SciDev and the management team through the
FY20 financial year is:
Drive SciDev's revenue line through the execu(cid:415)on of a
well structured business development pipeline in the Oil
& Gas and mineral processing sectors.
Key
large customer opportuni(cid:415)es across several
con(cid:415)nents where the synergies for the Op(cid:415)Flox &
MaxiFlox combina(cid:415)on can deliver the greatest value to
SciDev's
to
shareholders.
Build upon the SciDev’s momentum in the Australian
coal industry, transi(cid:415)oning across applica(cid:415)on, mineral
types and key industry players with our Op(cid:415)Flox®
technology.
subsequent
customers
value
and
10
SciDev Ltd
REPORT 2019
ANNUAL
Directors Report
The directors present their report, together with the financial statements, on the consolidated en(cid:415)ty (referred to herea(cid:332)er as the
'consolidated en(cid:415)ty') consis(cid:415)ng of SciDev Limited (referred to herea(cid:332)er as the 'company' or 'parent en(cid:415)ty') and the en(cid:415)(cid:415)es it controlled at
the end of, or during, the year ended 30 June 2019.
Directors
The following persons were directors of SciDev Limited during the whole of the financial year and up to the date of this report, unless
otherwise stated:
Trevor A Jones
Lewis E U(cid:427)ng (appointed 29 October 2018)
Simone Wa(cid:425) (appointed 29 October 2018)
Jon Gourlay (appointed 28 May 2019)
Kieran G Rodgers (resigned 19 March 2019)
Daniel (Don) Joseph Cronin (resigned 31 December 2018)
Principal ac(cid:415)vi(cid:415)es
The principal ac(cid:415)vity of the consolidated en(cid:415)ty is delivery of process control and chemistry products for solids-liquids separa(cid:415)on.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of Opera(cid:415)ons
The review of opera(cid:415)ons can be found on pages 8 to 10 of this Annual Report.
Environmental regula(cid:415)on
The consolidated en(cid:415)ty is not subject to any significant environmental regula(cid:415)on under Australian Commonwealth or State law.
Informa(cid:415)on on directors
Name, independence sta-
tus and qualifica(cid:415)ons
Trevor Jones
Chairman
B.Comm (Melb)
Experience, interests in shares, special responsibili(cid:415)es and other directorships
Mr. Jones has spent over 30 years working in the finance industry in Australia, United Kingdom and the
USA. During this (cid:415)me, he has held senior execu(cid:415)ve posi(cid:415)ons in investment funds management, stockbrok-
ing and corporate finance, and gained a broad experience of capital structuring and capital raising, par(cid:415)cu-
larly in the mining sector.
Mr. Jones was manager of equity por(cid:414)olios for Shell Australia and Na(cid:415)onal Employers Mutual in the Unit-
ed Kingdom. He was a Director of County NatWest Securi(cid:415)es Australia Limited in London and then Director
of Corporate Finance with Westpac Ins(cid:415)tu(cid:415)onal Bank in Sydney. More recently Mr. Jones was the Sydney
Chief Execu(cid:415)ve for Melbourne-based Austock Group and was Chairman of both its Corporate Finance and
Investment Management divisions. He was appointed as a Non-execu(cid:415)ve Director of SciDev on 28 Febru-
ary 2007.
Chairman of the Corporate Governance Commi(cid:425)ee and a member of the Audit and Risk Commi(cid:425)ee and
the Nomina(cid:415)on and Remunera(cid:415)on Commi(cid:425)ee.
Holds a relevant interest in 738,303 shares and 350,000 op(cid:415)ons
No other listed company directorships
11
Directors Report con(cid:415)nued
Informa(cid:415)on on directors
Name, independence
status and qualifica(cid:415)ons
Lewis U(cid:427)ng
Director (appointed 29
October 2018)
Managing Director & CEO
(appointed Managing
Director and CEO on 30
April 2019)
BASc
Experience, interests in shares, special responsibili(cid:415)es and other directorships
Mr U(cid:427)ng has over 15 years' experience in the water treatment, mining and chemical industries.
Lewis began his career in 2001 with Buckman Laboratories, moving to Hercules Chemicals, then in 2005 to
Ciba, specifically to work in the water treatment and mining sector.
Ciba was acquired by BASF in 2008, Lewis was Global Project Manager and Global Business Development man-
ager for the BASF mining solu(cid:415)ons business.
Lewis has successfully nego(cid:415)ated licence agreements, take or pay arrangements, technology divestment, and
commissioned research with both consul(cid:415)ng firms and academia in support of new technology development.
He has authored and co-authored several technical papers and also holds a patent applica(cid:415)on in the area of
tailings (mining waste) disposal.
Holds a relevant interest in 4,830,221 shares and 2,500,000 op(cid:415)ons
No other listed company directorships
Simone Wa(cid:425)
Non‐Execu(cid:415)ve Director
BASc
Ms Wa(cid:425) is the Managing Director of Sinoz Chemical and Commodi(cid:415)es (Sinoz), which is a global company
supplying reagents and technology-based improvements to the mining and agribusiness industries.
Ms Wa(cid:425)s is also a Director of Kemtec Mineral Processing and Kanins Interna(cid:415)onal, which are both part of the
Sinoz Group of companies. She has extensive experience in the areas of strategic sourcing and supplier
management, business development and sales and marke(cid:415)ng.
Member of the Audit and Risk Commi(cid:425)ee and the Nomina(cid:415)on and Remunera(cid:415)on Commi(cid:425)ee
Holds a relevant interest in 5,000,780 shares and 250,000 op(cid:415)ons
No other listed company directorships
Jon Gourlay
Non‐Execu(cid:415)ve Director
(appointed 28 May 2019)
BCom, C.A
Mr Jon Gourlay is a chartered accountant with extensive experience in finance and project management, risk
management, business improvement and investor rela(cid:415)onships, with a focus on the resources and
technology sectors. Mr Gourlay is currently Commercialisa(cid:415)on Manager, Technology and Innova(cid:415)on for New-
crest Mining, with prior roles in investor rela(cid:415)ons, analysis and improvement of Newcrest's opera(cid:415)ons at the
Lihir Island Gold Mine in Papua New Guinea..
Member of the Audit and Risk Commi(cid:425)ee and the Nomina(cid:415)on and Remunera(cid:415)on Commi(cid:425)ee
Holds a relevant interest in 206,349 shares and 650,000 op(cid:415)ons
No other listed company directorships
12
SciDev Ltd
REPORT 2019
ANNUAL
Name, independence
status and qualifica(cid:415)ons
Kieran G Rodgers
Managing Director
(resigned 19 March 2019)
B.E. (Hons.) Min. (UNSW),
M.B.A. (IMD)
Daniel J Cronin
Non‐Execu(cid:415)ve Director
(resigned 31 December
2018)
B.E. (Uni. College, Cork)
M.Sc. (Southampton),
MBA (LBS)
Experience, interests in shares, special responsibili(cid:415)es and other directorships
Mr. Rodgers joined SciDev in March 2001 a(cid:332)er 13 years of experience in merchant banking and financial
consul(cid:415)ng, principally at Resource Finance Corpora(cid:415)on Ltd, which specifically focused on the Australian and
interna(cid:415)onal resources industry. He was appointed as an Execu(cid:415)ve Director of SciDev on 28 February 2007.
Mr. Rodgers was appointed Managing Director on 6 February 2012.
Holds a relevant interest in 5,065,944* shares and 200,000* op(cid:415)ons
No other listed company directorships
Mr. Cronin was appointed to the Board of SciDev on 26 November 2013. Mr. Cronin began his
career as an Engineer with the Bri(cid:415)sh consul(cid:415)ng firm Halcrow, working for 6 years in the UK and South
America. This was followed by 5 years working in project management with the construc(cid:415)on Company
Gammon in Hong Kong and Singapore. Following comple(cid:415)on of an MBA degree, he was employed in the
chemical industry for 23 years, ini(cid:415)ally with Sandoz and later with Degussa and BASF. He has worked in
senior general management roles in Zurich, Sydney and Singapore. His most recent posi(cid:415)on was Senior Vice
President – Construc(cid:415)on Chemicals for BASF with responsibility for Europe, Middle East and Africa.
Chairman of the Audit and Risk Commi(cid:425)ee and a member of the Corporate Governance Commi(cid:425)ee and the
Nomina(cid:415)on and Remunera(cid:415)on Commi(cid:425)ee
Holds a relevant interest in 465,955* shares and 200,000* op(cid:415)ons
No other listed company directorships
'Other current directorships' quoted above are current directorships for listed en(cid:415)(cid:415)es only and excludes directorships of all other types of en(cid:415)(cid:415)es, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed en(cid:415)(cid:415)es only and excludes directorships of all other types of en(cid:415)(cid:415)es, unless otherwise stated.
* Interests in the shares and op(cid:415)ons of the company as at the date of resigna(cid:415)on as a director.
Company Secretary
Mr Heath L Roberts (Dip Law (S.A.B.) and Grad Dip Legal Prac(cid:415)ce (UTS)) was appointed to the posi(cid:415)on of Company Secretary of SciDev Limited
on 1 March 2017. Mr Roberts is a commercial solicitor with over 20 years of listed company experience. He has acted for SciDev in various
capaci(cid:415)es over the years and brings strong transac(cid:415)onal, compliance and capital raising experience to the role.
Mee(cid:415)ngs of directors
The number of mee(cid:415)ngs of the company's Board of Directors ('the Board') and of each Board commi(cid:425)ee held during the year ended 30 June
2019, and the number of mee(cid:415)ngs a(cid:425)ended by each director were:
Full Board
Nomina(cid:415)on and Remunera(cid:415)on
Commi(cid:425)ee
A(cid:425)ended
Held
A(cid:425)ended
Held
Audit and Risk
Commi(cid:425)ee
A(cid:425)ended
Audit and Risk
Commi(cid:425)ee
Held
Trevor A Jones
Lewis E U(cid:427)ng
(appointed 29 October 2018)
Simone Wa(cid:425)
(appointed 29 October 2018)
Jon Gourlay
(appointed 28 May 2019)
Kieran G Rodgers
(resigned 19 March 2019)
Daniel J Cronin
(resigned 31 December 2018)
7
7
7
1
6
2
9
7
7
1
7
2
3
-
2
-
-
1
3
-
2
-
-
1
3
-
2
-
-
2
Held: represents the number of mee(cid:415)ngs held during the (cid:415)me the director held office or was a member of the relevant commi(cid:425)ee.
3
-
2
-
-
2
13
Remunera(cid:415)on report
The remunera(cid:415)on report details the key management personnel
remunera(cid:415)on arrangements
in
for
accordance with the requirements of the Corpora(cid:415)ons Act 2001 and
its Regula(cid:415)ons.
the consolidated en(cid:415)ty,
Key management personnel are those persons having authority and
responsibility for planning, direc(cid:415)ng and controlling the ac(cid:415)vi(cid:415)es of
the en(cid:415)ty, directly or indirectly, including all directors.
The remunera(cid:415)on report is set out under the following main
headings:
Principles used to determine the nature and amount of
remunera(cid:415)on
Details of remunera(cid:415)on
Service agreements
Share-based compensa(cid:415)on
Addi(cid:415)onal informa(cid:415)on
Addi(cid:415)onal disclosures rela(cid:415)ng to key management personnel
Principles used to determine the nature and amount of
remunera(cid:415)on
The objec(cid:415)ve of the consolidated en(cid:415)ty's execu(cid:415)ve reward
framework is to ensure reward for performance is compe(cid:415)(cid:415)ve and
appropriate for the results delivered. The framework aligns
execu(cid:415)ve reward with the achievement of strategic objec(cid:415)ves and
the crea(cid:415)on of value for shareholders, and it is considered to
conform to the market best prac(cid:415)ce for the delivery of reward. The
Board of Directors ('the Board') ensures that execu(cid:415)ve reward
sa(cid:415)sfies the following key criteria for good reward governance
prac(cid:415)ces:
performance linkage / alignment of execu(cid:415)ve compensa(cid:415)on;
compe(cid:415)(cid:415)veness and reasonableness;
acceptability to shareholders;
capital management.
transparency; and
remunera(cid:415)on commi(cid:425)ee which provides advice on remunera(cid:415)on
and incen(cid:415)ve policies and prac(cid:415)ces and makes specific
recommenda(cid:415)ons on remunera(cid:415)on packages and other terms of
employment for the Managing Director, other senior execu(cid:415)ves and
Non-Execu(cid:415)ve Directors. The Corporate Governance Statement
provides further informa(cid:415)on on the role of this Commi(cid:425)ee.
Non‐execu(cid:415)ve directors remunera(cid:415)on
Fees and payments to the Non-Execu(cid:415)ve Directors reflect the
demands which are made on, and the responsibili(cid:415)es of, the Non–
Execu(cid:415)ve Directors. The Board undertakes a review of Non-
Execu(cid:415)ve Directors’ fees and payments annually.
limit, which
remunera(cid:415)on
Non-Execu(cid:415)ve Directors’ fees are determined within an aggregate
is
Non-Execu(cid:415)ve Directors’ cash
periodically recommended for approval by shareholders. The current
limit of $400,000 was approved by shareholders at the 2007 Annual
General Mee(cid:415)ng held on 14 November 2007. The amount paid to
non-execu(cid:415)ve directors of the parent en(cid:415)ty (SciDev Limited) during
the year to 30 June 2019 was $122,937 (2018: $125,316). In
addi(cid:415)on, Non-Execu(cid:415)ve Directors are able to par(cid:415)cipate in issues of
op(cid:415)ons pursuant to the SciDev Employee Share Scheme. The value
of any op(cid:415)ons granted to Non-Execu(cid:415)ve Directors are not included
in the aggregate cash remunera(cid:415)on limit as they are not cash based
payments.
the cased where Directors seek equity based
(op(cid:415)on)
In
remunera(cid:415)on over cash based remunera(cid:415)on, considera(cid:415)on will be
given to such request and, in any case, shareholder approval would
be required for any such equity based remunera(cid:415)on for Directors.
Execu(cid:415)ve remunera(cid:415)on
The execu(cid:415)ve pay and reward framework has two components,
which together comprise the execu(cid:415)ve’s total remunera(cid:415)on:
base pay, superannua(cid:415)on and non-monetary benefits; and
long term incen(cid:415)ves through par(cid:415)cipa(cid:415)on in the SciDev
Employee Share Scheme.
The combina(cid:415)on of
remunera(cid:415)on.
these comprises
the execu(cid:415)ve's
total
The Group has structured an execu(cid:415)ve remunera(cid:415)on framework
that is market compe(cid:415)(cid:415)ve. The framework provides for a mix of
fixed pay and also variable pay and includes long term incen(cid:415)ves,
when appropriate. A rela(cid:415)onship between Company performance
and remunera(cid:415)on is now being developed and implemented, with a
modest component of future cash remunera(cid:415)on to be performance
linked and equity (op(cid:415)on) issues to execu(cid:415)ves having performance
based milestones. The Board has established a nomina(cid:415)on and
14
SciDev Ltd
REPORT 2019
ANNUAL
Details of remunera(cid:415)on
Amounts of remunera(cid:415)on
Details of the remunera(cid:415)on of key management personnel of the
consolidated en(cid:415)ty are set out in the following tables.
The key management personnel of the consolidated en(cid:415)ty
consisted of the following directors of SciDev Limited:
Trevor A Jones - Non-execu(cid:415)ve Chairman
Lewis E U(cid:427)ng - Managing Director and Chief Execu(cid:415)ve
Officer (appointed a Director on 29 October 2018, and
Managing Director and CEO on 30 April 2019)
Simone Wa(cid:425) - Non-execu(cid:415)ve Director (appointed 29
October 2018)
Jon Gourlay - Non-execu(cid:415)ve Director (appointed 28 May
2019)
Kieran G Rodgers - Managing Director (resigned 19 March
2019)
Daniel J Cronin - Non-execu(cid:415)ve Director (resigned 31
December 2018)
And the following person:
Jianfeng Zhang - Marke(cid:415)ng and Strategy Director of
Science Developments Pty Limited (from 10 April 2019)
15
Base pay
Base pay is structured as a total employment cost package, which
may be delivered as a combina(cid:415)on of cash and prescribed non-
financial benefits as nego(cid:415)ated between the Company and the
execu(cid:415)ve. Execu(cid:415)ves are offered a compe(cid:415)(cid:415)ve base pay that
comprises a fixed component of cash salary and superannua(cid:415)on.
Base pay for each senior execu(cid:415)ve is reviewed annually to ensure
the execu(cid:415)ve’s pay is compe(cid:415)(cid:415)ve with the market. There is no
guaranteed base pay increase included in any execu(cid:415)ve’s contract.
In some cases cash performance based bonuses will be offered to
execu(cid:415)ves.
SciDev Employee Share Scheme
Informa(cid:415)on on the SciDev Employee Share Scheme is set out in
note 34. Par(cid:415)cipa(cid:415)on in the SciDev Employee Share Scheme is at
the discre(cid:415)on of the Board and there is no guarantee of annual
par(cid:415)cipa(cid:415)on by any execu(cid:415)ve.
Use of remunera(cid:415)on consultants
During the financial year ended 30 June 2019, the consolidated
en(cid:415)ty, through the Nomina(cid:415)on and Remunera(cid:415)on Commi(cid:425)ee,
engaged Lucan Group, remunera(cid:415)on consultants, to review the
CEO and Managing Director's remunera(cid:415)on package. Lucan Group
was paid $750 for these services.
Vo(cid:415)ng and comments made at the company's 29 November 2018
Annual General Mee(cid:415)ng ('AGM')
At the 29 November 2018 AGM, 99% of the votes received
supported the adop(cid:415)on of the remunera(cid:415)on report for the year
ended 30 June 2018. The company did not receive any specific
feedback at the AGM regarding its remunera(cid:415)on prac(cid:415)ces.
An agreed set of protocols were put in place to ensure that the
remunera(cid:415)on recommenda(cid:415)ons would be free from undue
influence from the Managing Director and CEO. These protocols
include requiring that the consultant not communicate with or
provide any
informa(cid:415)on rela(cid:415)ng to the outcome of the
engagement with the Managing Director and CEO whilst the
process was underway. The Board is also required to make
inquiries of the consultant's processes at the conclusion of the
engagement
that any
recommenda(cid:415)ons made have been free from undue influence.
The Board is sa(cid:415)sfied that these protocols were followed and as
such there was no undue influence.
they are sa(cid:415)sfied
to ensure
that
Remunera(cid:415)on report con(cid:415)nued
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Cash salary
Annual leave
Non-
Super-
and fees
accrual
monetary
annua(cid:415)on
Long
service
leave
Termina-
(cid:415)on
benefits
Total
64,431
25,340
-
22,500
-
-
-
-
260,000
260,000
14,964
18,056
-
-
-
-
-
-
6,121
2,407
-
2,138
24,700
24,700
-
-
-
-
749
-
-
-
-
-
4,333
130,000
70,552
27,747
-
24,638
300,413
437,089
2019
Non‐Execu(cid:415)ve Directors:
Trevor A Jones (Chairman)
Simone Wa(cid:425) (a)
Jon Gourlay (a)
Daniel J Cronin (b)
Execu(cid:415)ve Directors:
Lewis E U(cid:427)ng (c)
Kieran G Rodgers (b)
Other Key Management Personnel:
Jianfeng Zhang (d)
31,666
663,937
2,805
35,825
-
-
3,048
63,114
83
5,165
-
130,000
37,602
898,041
(a)
(b)
(c)
(d)
Ms Simone Wa(cid:425) and Mr Jon Gourlay were appointed Non-execu(cid:415)ve Directors on 29 October 2018 and 28 May 2019 respec(cid:415)vely. Mr
Gourlay did not receive any remunera(cid:415)on from the company during the 2019 financial year.
Mr Daniel J Cronin and Mr Kieran G Rodgers resigned on 31 December 2018 and 19 March 2019 respec(cid:415)vely. Mr Rodgers’ remunera(cid:415)on
for the year included termina(cid:415)on payments set out in his employment contract.
Mr Lewis U(cid:427)ng was appointed Project Director on 1 March 2018, appointed to the SciDev Board of Directors on 29 October 2018 and
became Managing Director and Chief Execu(cid:415)ve Officer on 30 April 2019.
Mr Jianfeng Zhang was appointed Marke(cid:415)ng and Strategy Director of Science Developments Pty Limited on 10 April 2019.
16
SciDev Ltd
REPORT 2019
ANNUAL
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Cash salary
Consultancy
Non-
Super-
Long service
and fees
fee
monetary
annua(cid:415)on
leave
Total
2018
Non‐Execu(cid:415)ve Directors:
Trevor A Jones (Chairman)
Daniel J Cronin
Execu(cid:415)ve Directors:
Kieran G Rodgers
Other Key Management Personnel:
Lewis E U(cid:427)ng (a)
69,444
45,000
268,424
72,917
455,785
-
-
-
-
-
-
-
6,597
4,275
-
-
76,041
49,275
2,259
20,900
31,007
322,590
-
2,259
6,927
38,699
-
31,007
79,844
527,750
(a) Lewis U(cid:427)ng was appointed Project Director on 1 March 2018
The propor(cid:415)on of remunera(cid:415)on linked to performance and the fixed propor(cid:415)on are as follows:
Name
2019
2018
2019
2018
2019
2018
Fixed remunera(cid:415)on
At risk - STI
At risk - LTI
Non‐Execu(cid:415)ve Directors:
Trevor A Jones (Chairman)
Simone Wa(cid:425)
Daniel J Cronin
Execu(cid:415)ve Directors:
Lewis E U(cid:427)ng
Kieran G Rodgers
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
Other Key Management Personnel:
Jianfeng Zhang
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17
Remunera(cid:415)on report con(cid:415)nued
Service agreements
Remunera(cid:415)on and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements
are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Lewis E U(cid:427)ng
Managing Director and CEO
30 April 2019
Ongoing
Mr U(cid:427)ng was employed as a Project Director un(cid:415)l 29 April 2019 and Managing Director and CEO
therea(cid:332)er. Mr U(cid:427)ng had a base salary of $260,000 plus superannua(cid:415)on un(cid:415)l 29 April 2019 which
subsequently increased to $280,000 plus superannua(cid:415)on following his appointment as Managing
Director and CEO. He is also en(cid:415)tled to a bonus of $100,000 and holds 2,500,000 op(cid:415)ons.
Mr U(cid:427)ng's salary, allowances and performance bonus will be reviewed annually by the Nomina(cid:415)on
and Remunera(cid:415)on Commi(cid:425)ee.
The contract may be terminated by 6 months’ no(cid:415)ce from either party.
Kieran G Rodgers
Managing Director
1 March 2018
Ongoing - resigned 19 March 2019
Base salary for the year ended 30 June 2019 of $260,000 plus superannua(cid:415)on, that was reviewed
annually by the Nomina(cid:415)on and Remunera(cid:415)on Commi(cid:425)ee. The contract could be terminated by 6
months’ no(cid:415)ce from either party.
Key management personnel have no en(cid:415)tlement to termina(cid:415)on payments in the event of removal for misconduct.
Share-based compensa(cid:415)on
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensa(cid:415)on during the year ended 30 June 2019.
Op(cid:415)ons
There were no op(cid:415)ons over ordinary shares granted to or vested by directors and other key management personnel as part of compensa(cid:415)on
during the year ended 30 June 2019.
There were no op(cid:415)ons for directors and other key management personnel that lapsed during the year ended 30 June 2019.
Addi(cid:415)onal informa(cid:415)on
The earnings of the consolidated en(cid:415)ty for the five years to 30 June 2019 are summarised below:
Sales revenue
2,655,799
2,029,373
1,846,985
1,352,346
1,316,493
(Loss)/profit a(cid:332)er income tax
(2,032,527)
1,001,869
(597,340)
(458,130)
(856,446)
2019
$
2018
$
2017
$
2016
$
2015
$
18
SciDev Ltd
REPORT 2019
ANNUAL
Addi(cid:415)onal disclosures rela(cid:415)ng to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key management personnel of
the consolidated en(cid:415)ty, including their personally related par(cid:415)es, is set out below:
Ordinary shares
Trevor A Jones
Lewis E U(cid:427)ng
Simone Wa(cid:425)
Jon Gourlay
Kieran G Rodgers
Daniel J Cronin
Jianfeng Zhang
Balance at
Received
Balance at
the start of
as part of
Addi(cid:415)ons/
Disposals/
the end of
the year
remunera(cid:415)on
other (a)
other (b) (c)
the year
5,742,331
35,512,267
-
-
23,516,578
4,659,554
-
69,430,730
-
-
-
-
-
-
-
-
164,068
(5,168,096)
738,303
3,129,492
(33,811,538)
4,830,221
5,000,780
206,349
-
-
5,000,780
206,349
17,714,287
(41,230,865)
-
(4,659,554)
-
-
6,666,667
-
6,666,667
32,881,643
(84,870,053)
17,442,320
(a)
(b)
(c)
Includes the shares held by Directors, including their personally related par(cid:415)es, at the date of their appointment.
Includes the effect of the 10:1 share consolida(cid:415)on that was completed on 4 December 2018.
Includes the removal from the table of the shareholdings for key management personnel who have resigned during the period.
Op(cid:415)on holding
The number of op(cid:415)ons over ordinary shares in the company held during the financial year by each director and other members of key
management personnel of the consolidated en(cid:415)ty, including their personally related par(cid:415)es, is set out below:
Op(cid:415)ons over ordinary shares
Trevor A Jones
Lewis E U(cid:427)ng
Kieran G Rodgers
Daniel J Cronin
Balance at
the start of
Expired/
Forfeited /
other
Balance at
the end of
the year
Granted
Exercised
(a) (b)
the year
1,000,000
5,000,000
2,000,000
2,000,000
10,000,000
-
-
-
-
-
-
-
-
-
-
(900,000)
(4,500,000)
(2,000,000)
(2,000,000)
100,000
500,000
-
-
(9,400,000)
600,000
(a)
(b)
Includes the effect of the 10:1 share/op(cid:415)on consolida(cid:415)on that was completed on 4 December 2018.
Includes the removal from the table of the op(cid:415)ons held by key management personnel who have resigned during the period.
19
Mr Jainfeng Zhang, a director of Science Developments Pty Ltd and
KMP, is also a director and shareholder of Nuoer Australia Pty Ltd.
The consolidated en(cid:415)ty sold to and purchased from Nuoer Australia
Pty Ltd goods and services during the 2019 financial year, in
par(cid:415)cular chemicals. The contracts were based on normal
commercial terms and condi(cid:415)ons.
Amounts recognised as revenue
Product sales: $584,366 (2018: nil)
Amounts recognised as expenses
Raw materials and consumables: $118,050 (2018: nil)
Amounts recognised as assets and liabili(cid:415)es
Current assets - trade receivables: $252,307 (2018: nil)
There were no other transac(cid:415)ons with key management personnel
of the group, including their close family members and en(cid:415)(cid:415)es
related to them, during the financial year ended 30 June 2019.
This concludes the remunera(cid:415)on report, which has been audited.
Remunera(cid:415)on report con(cid:415)nued
Loans to key management personnel and their related par(cid:415)es
There were no loans owing by key management personnel of the
group, including their close family members and en(cid:415)(cid:415)es related to
them, during the financial year ended 30 June 2019.
Other transac(cid:415)ons with key management personnel and their
related par(cid:415)es
A director, Simone Wa(cid:425), is a director of Kanins Interna(cid:415)onal Pty Ltd
and has the capacity to significantly influence decision making of that
company. Kanins Interna(cid:415)onal Pty Ltd provided SciDev Limited with
a US$350,000 working capital facility for an ini(cid:415)al 12-month term
during the 2019 financial year. The facility was secured against the
consolidated en(cid:415)ty's inventory and incurred interest at 15% per
annum. $73,007 was drawn down on this facility and fully repaid
during the 2019 financial year.
A director, Simone Wa(cid:425), is a director of Kemtec Mineral Processing
Pty Ltd and has the capacity to significantly influence decision
leased
making of that company. The consolidated en(cid:415)ty has
equipment to Kemtec Mineral Processing Pty Ltd during the 2019
financial year. The lease contracts were based on normal commercial
terms and condi(cid:415)ons.
Amounts recognised as revenue
Treatment fees and product sales: $91,080 (2018: nil)
Amounts recognised as expenses
Finance costs: $3,539 (2018: nil)
The Managing Director, Lewis U(cid:427)ng, is a director and majority
shareholder of U(cid:427)ng and Muhor Environmental Pty Ltd (UAME Pty
Ltd). The consolidated en(cid:415)ty purchased consultancy services from
UAME Pty Ltd during the 2019 financial year for the provision of
administra(cid:415)ve, business development and engineering services.
These services were provided by Mr Jamiel Muhor and Task Me
Away Pty Ltd, prior to Mr Muhor and Task Me Away Pty Ltd
contrac(cid:415)ng directly to the consolidated en(cid:415)ty. The contract was
based on normal commercial terms and condi(cid:415)ons and it was
into prior to Lewis U(cid:427)ng being employed by the
entered
consolidated en(cid:415)ty.
Amounts recognised as expenses
Professional fees: $278,767 (2018: nil)
Bonus: $11,856 (2018: nil)
Expense claim reimbursement: $70,228 (2018: nil)
20
SciDev Ltd
REPORT 2019
ANNUAL
Exercise
price
Number
under op(cid:415)on
$0.25
$0.25
$0.25
$0.25
$0.100
$0.120
550,000
2,250,000
650,000
500,000
2,000,000
3,350,000
9,300,000
Shares under op(cid:415)on
Unissued ordinary shares of SciDev Limited under op(cid:415)on at the date of this report are as follows:
Grant date
10 December 2014*
2 February 2017**
14 August 2017*
28 December 2017***
23 July 2019*
23 July 2019*
Expiry date
28 November 2019
28 November 2019
28 November 2019
28 November 2019
23 July 2022
23 July 2022
* Op(cid:415)ons granted under the SciDev Employee Share Scheme
** Op(cid:415)ons granted to the Lead Manager and Underwriter for services rendered in connec(cid:415)on with the placement of shares and a share
purchase plan
*** Op(cid:415)ons granted to a key service provider (non-Director) for services rendered.
No person en(cid:415)tled to exercise the op(cid:415)ons had or has any right by virtue of the op(cid:415)on to par(cid:415)cipate in any share issue of the company or of
any other body corporate.
Shares issued on the exercise of op(cid:415)ons
There were no ordinary shares of SciDev Limited issued on the exercise of op(cid:415)ons during the year ended 30 June 2019 and up to the date of
this report.
Indemnity and insurance of officers
The company has indemnified the directors and execu(cid:415)ves of the company for costs incurred, in their capacity as a director or execu(cid:415)ve, for
which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and execu(cid:415)ves of the company against
a liability to the extent permi(cid:425)ed by the Corpora(cid:415)ons Act 2001. The contract of insurance prohibits disclosure of the nature of the liability
and the amount of the premium.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any
related en(cid:415)ty against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any related
en(cid:415)ty.
Proceedings on behalf of the company
No person has applied to the Court under sec(cid:415)on 237 of the Corpora(cid:415)ons 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.
21
Remunera(cid:415)on report con(cid:415)nued
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in note
25 to the financial statements.
The directors are sa(cid:415)sfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm on the
auditor's behalf), is compa(cid:415)ble with the general standard of independence for auditors imposed by the Corpora(cid:415)ons Act 2001.
The directors are of the opinion that the services as disclosed in note 25 to the financial statements do not compromise the external auditor's
independence requirements of the Corpora(cid:415)ons Act 2001 for the following reasons:
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objec(cid:415)vity of the auditor; and
none of the services undermine the general principles rela(cid:415)ng to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants issued by the Accoun(cid:415)ng Professional and Ethical Standards Board, including reviewing or audi(cid:415)ng the auditor's
own work, ac(cid:415)ng in a management or decision-making capacity for the company, ac(cid:415)ng as advocate for the company or jointly sharing
economic risks and rewards.
Officers of the company who are former partners of Rothsay Chartered Accountants
There are no officers of the company who are former partners of Rothsay Chartered Accountants.
Auditor's independence declara(cid:415)on
A copy of the auditor's independence declara(cid:415)on as required under sec(cid:415)on 307C of the Corpora(cid:415)ons Act 2001 is set out immediately a(cid:332)er this
directors' report.
Auditor
Rothsay Chartered Accountants con(cid:415)nues in office in accordance with sec(cid:415)on 327 of the Corpora(cid:415)ons Act 2001.
This report is made in accordance with a resolu(cid:415)on of directors, pursuant to sec(cid:415)on 298(2)(a) of the Corpora(cid:415)ons Act 2001.
On behalf of the directors
___________________________
Lewis E U(cid:427)ng
Managing Director
27 September 2019
Sydney
22
SciDev Ltd
REPORT 2019
ANNUAL
Auditor’s independence declara(cid:415)on
23
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2019
Revenue
Other income
Interest revenue
Expenses
Changes in inventories
Raw materials and consumables used
Employee benefits expense
Deprecia(cid:415)on and amor(cid:415)sa(cid:415)on expense
Engineering and other consultants expenses
Loss on disposal of assets
Insurance
Lis(cid:415)ng and share registry expenses
Professional fees
Rent and related expenses
Travel, accommoda(cid:415)on and conference
Other expenses
Finance costs
Profit/(loss) before income tax benefit/(expense)
Note
2019
$
2018
$
5
6
2,921,060
2,200,768
336,645
2,336,187
-
12,999
28,141
(4,345)
(2,033,901)
(1,251,282)
(1,330,076)
(1,006,057)
(212,767)
(194,171)
(31,068)
(2,896)
(27,621)
-
(56,532)
(46,067)
(84,464)
(35,075)
(757,080)
(557,902)
(189,851)
(151,050)
(278,329)
(143,211)
(285,980)
(158,060)
(6,627)
(6,111)
(2,008,450)
993,727
Income tax benefit/(expense)
8
(24,077)
8,142
Profit/(loss) a(cid:332)er income tax benefit/(expense) for the year a(cid:425)ributable to the owners of SciDev
Limited
(2,032,527)
1,001,869
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year a(cid:425)ributable to the owners of SciDev Limited
(2,032,527)
1,001,869
Basic earnings per share
Diluted earnings per share
24
Cents
Cents
33
33
(2.69)
(2.69)
2.02
2.02
SciDev Ltd
REPORT 2019
ANNUAL
Note
2019
$
2018
$
9
10
11
12
13
14
15
16
17
8
18
1,756,209
806,099
264,325
22,679
2,849,312
1,502,900
303,454
1,246,299
3,052,653
568,187
727,946
236,184
1,754
1,534,071
1,502,900
260,954
1,266,033
3,029,887
5,901,965
4,563,958
1,009,529
-
155,276
1,164,805
35,986
2,153
38,139
370,279
31,938
167,247
569,464
44,108
-
44,108
1,202,944
613,572
4,699,021
3,950,386
19
20
76,899,789
2,210,703
(74,411,471)
4,699,021
74,118,627
2,210,703
(72,378,944)
3,950,386
Statement of financial posi(cid:415)on
For the year ended 30 June 2019
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Financial assets at fair value through other comprehensive income
Property, plant and equipment
Intangibles
Total non-current assets
Total assets
Liabili(cid:415)es
Current liabili(cid:415)es
Trade and other payables
Borrowings
Employee benefits
Total current liabili(cid:415)es
Non-current liabili(cid:415)es
Deferred tax
Employee benefits
Total non-current liabili(cid:415)es
Total liabili(cid:415)es
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Refer to note 2 for detailed informa(cid:415)on on restatement of compara(cid:415)ves - adop(cid:415)on of AASB 9 'Financial instruments'
25
Statement of changes in equity
For the year ended 30 June 2019
Issued
capital
$
Accumulated
Reserves
losses
Total equity
$
$
$
Balance at 1 July 2017
73,673,290
2,169,223
(73,380,813)
2,461,700
Profit a(cid:332)er income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
Transac(cid:415)ons with owners in their capacity as owners:
Contribu(cid:415)ons of equity, net of transac(cid:415)on costs (note 19)
445,337
-
-
-
-
Share-based payments (note 34)
-
41,480
1,001,869
1,001,869
-
-
1,001,869
1,001,869
-
-
445,337
41,480
Balance at 30 June 2018
74,118,627
2,210,703
(72,378,944)
3,950,386
Issued
capital
$
Accumulated
Reserves
losses
Total equity
$
$
$
Balance at 1 July 2018
74,118,627
2,210,703
(72,378,944)
3,950,386
Loss a(cid:332)er income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
Transac(cid:415)ons with owners in their capacity as owners:
Contribu(cid:415)ons of equity, net of transac(cid:415)on costs (note 19)
2,781,162
-
-
-
-
(2,032,527)
(2,032,527)
-
-
(2,032,527)
(2,032,527)
-
2,781,162
Balance at 30 June 2019
76,899,789
2,210,703
(74,411,471)
4,699,021
26
Statement of cash flows
For the year ended 30 June 2019
Cash flows from opera(cid:415)ng ac(cid:415)vi(cid:415)es
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
R&D tax offset received
Interest and other finance costs paid
Income taxes paid
Net cash used in opera(cid:415)ng ac(cid:415)vi(cid:415)es
Cash flows from inves(cid:415)ng ac(cid:415)vi(cid:415)es
Repayment of cash received for disposal of Zeehan Project
Payments for property, plant and equipment
Payments for intangibles
Payments for security deposits
Proceeds from disposal of Zeehan Project
SciDev Ltd
REPORT 2019
ANNUAL
Note
2019
$
2018
$
2,774,656
2,311,575
(4,616,859)
(3,507,670)
(1,842,203)
(1,196,095)
-
332,981
(6,627)
(32,199)
6,749
303,112
(6,111)
-
31
(1,548,048)
(892,345)
13
14
(300,000)
(225,225)
(37,929)
-
-
(97,045)
(53,109)
(10,800)
50,000
250,000
Proceeds from disposal of financial assets at fair value through other comprehensive income
500,000
-
Net cash from/(used in) inves(cid:415)ng ac(cid:415)vi(cid:415)es
(13,154)
89,046
Cash flows from financing ac(cid:415)vi(cid:415)es
Proceeds from issue of shares - net of transac(cid:415)on costs
Proceeds from borrowings
Repayment of borrowings
Net cash from financing ac(cid:415)vi(cid:415)es
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
2,781,162
445,337
73,007
-
(104,945)
(12,565)
2,749,224
432,772
1,188,022
(370,527)
568,187
938,714
Cash and cash equivalents at the end of the financial year
9
1,756,209
568,187
27
Notes to the financial statements
For the year ended 30 June 2019
Note 1. General informa(cid:415)on
The financial statements cover SciDev Limited as a consolidated
en(cid:415)ty consis(cid:415)ng of SciDev Limited and the en(cid:415)(cid:415)es it controlled at
the end of, or during, the year. The financial statements are
presented in Australian dollars, which is SciDev Limited's func(cid:415)onal
and presenta(cid:415)on currency.
is a
SciDev Limited
limited by shares,
listed public company
incorporated and domiciled in Australia. Its registered office and
principal place of business are:
Registered office
C/-Boardroom Pty Limited
Level 12, Grosvenor Place
225 George Street, Sydney
NSW 2000
Principal place of business
Unit 1
8 Turbo Road, Kings Park
NSW 2148
A descrip(cid:415)on of the nature of the consolidated en(cid:415)ty's opera(cid:415)ons
and its principal ac(cid:415)vi(cid:415)es are included in the directors' report, which
is not part of the financial statements.
The financial statements were authorised for issue, in accordance
with a resolu(cid:415)on of directors, on 26 September 2019. The directors
have the power to amend and reissue the financial statements.
Note 2. Significant accoun(cid:415)ng policies
The principal accoun(cid:415)ng policies adopted in the prepara(cid:415)on of the
financial statements are set out either in the respec(cid:415)ve notes or
below. These policies have been consistently applied to all the years
presented, unless otherwise stated.
New or amended Accoun(cid:415)ng Standards and
adopted
The consolidated en(cid:415)ty has adopted all of the new or amended
Accoun(cid:415)ng Standards and Interpreta(cid:415)ons issued by the Australian
Accoun(cid:415)ng Standards Board ('AASB') that are mandatory for the
current repor(cid:415)ng period.
Interpreta(cid:415)ons
28
Any new or amended Accoun(cid:415)ng Standards or Interpreta(cid:415)ons that
are not yet mandatory have not been early adopted.
The adop(cid:415)on of these Accoun(cid:415)ng Standards and Interpreta(cid:415)ons did
not have any significant impact on the financial performance or
posi(cid:415)on of the consolidated en(cid:415)ty.
The following Accoun(cid:415)ng Standards and Interpreta(cid:415)ons are most
relevant to the consolidated en(cid:415)ty:
AASB 9 Financial Instruments
The consolidated en(cid:415)ty has adopted AASB 9 from 1 July 2018. The
standard introduced new classifica(cid:415)on and measurement models for
financial assets. A financial asset shall be measured at amor(cid:415)sed
cost if it is held within a business model whose objec(cid:415)ve is to hold
assets in order to collect contractual cash flows which arise on
specified dates and that are solely principal and interest. A debt
investment shall be measured at fair value through other
comprehensive income if it is held within a business model whose
objec(cid:415)ve is to both hold assets in order to collect contractual cash
flows which arise on specified dates that are solely principal and
interest as well as selling the asset on the basis of its fair value. All
other financial assets are classified and measured at fair value
through profit or loss unless the en(cid:415)ty makes an irrevocable elec(cid:415)on
losses on equity
on
con(cid:415)ngent
instruments
in other
considera(cid:415)on recognised
comprehensive income ('OCI').
ini(cid:415)al recogni(cid:415)on to present gains and
(that are not held-for-trading or
in a business combina(cid:415)on)
Despite these requirements, a financial asset may be irrevocably
designated as measured at fair value through profit or loss to reduce
the effect of, or eliminate, an accoun(cid:415)ng mismatch. For financial
liabili(cid:415)es designated at fair value through profit or loss, the standard
requires the por(cid:415)on of the change in fair value that relates to the
en(cid:415)ty's own credit risk to be presented in OCI (unless it would create
an accoun(cid:415)ng mismatch). New
simpler hedge accoun(cid:415)ng
requirements are intended to more closely align the accoun(cid:415)ng
treatment with the risk management ac(cid:415)vi(cid:415)es of the en(cid:415)ty. New
impairment requirements use an 'expected credit loss' ('ECL') model
to recognise an allowance. Impairment is measured using a 12-
month ECL method unless the credit risk on a financial instrument
has increased significantly since ini(cid:415)al recogni(cid:415)on in which case the
life(cid:415)me ECL method is adopted. For receivables, a simplified
approach to measuring expected credit losses using a life(cid:415)me
expected loss allowance is available.
SciDev Ltd
REPORT 2019
ANNUAL
The Directors have considered and concluded that the going
concern basis of prepara(cid:415)on of the financial statements
is
appropriate and any poten(cid:415)al uncertainty regarding going concern
is mi(cid:415)gated by the following:
On 11 February 2019, SciDev Ltd (SDV) announced it had
entered into a binding Heads of Agreement (HOA) to
acquire the exclusive distribu(cid:415)on and marke(cid:415)ng rights in
Australia and other Oceanic countries for polymer products
produced by the China-based Nuoer Group (Nuoer Group).
Under the terms of the HOA, SDV's wholly owned
subsidiary, Science Developments Pty Ltd (SDPL), has been
granted the exclusive distribu(cid:415)on and marke(cid:415)ng rights
from the Nuoer Group's Australian opera(cid:415)ng en(cid:415)ty, Nuoer
Chemical Australia Pty Ltd (NCA) for a 10-year period. The
exclusive distribu(cid:415)on and marke(cid:415)ng rights to Nuoer
Group's water-soluble polymers is expected to delivering
demonstrably expanded market opportuni(cid:415)es for the SDV
patent Op(cid:415)Flox technology and other benefits for SDV.
At 30 June 2019 the consolidated en(cid:415)ty had net current
assets of $1,684,507 (2018: $964,607) and cash balances of
$1,756,209 (2018: $568,187) and an undrawn A$500,000
credit facility.
On the 13 September 2019, the company announced the
placement of 16,000,0000 new ordinary shares with local
ins(cid:415)tu(cid:415)onal and sophis(cid:415)cated investors at an issue price of
$0.26 per share to raise total proceeds of $4.16 million.
The funds from the placement will predominantly be used
to
inventory, con(cid:415)nue development of the
consolidated en(cid:415)ty's Op(cid:415)Flox and MaxiFlox technology,
and increase working capital.
increase
Based on the above, the Directors are of the opinion that at the
date of signature of the financial report there are reasonable and
supportable grounds to believe that the consolidated en(cid:415)ty will be
able to meet its liabili(cid:415)es from its assets in the ordinary course of
business, for a period of not less than twelve months from the
date of signature of the audit report on this financial report to the
date of signature of the audit report on the financial report for the
year ending 30 June 2020, and has accordingly prepared the
financial report on a going concern basis.
29
Note 2. Significant accoun(cid:415)ng policies (cont..)
AASB 9 Financial Instruments (cont..)
At the date of ini(cid:415)al applica(cid:415)on (1 July 2018) the consolidated
en(cid:415)ty assessed that there were no classifica(cid:415)on, measurement
and impairment adjustments required to any of its financial assets
and liabili(cid:415)es except for, financial assets in the sum of $1,502,900
'available-for-sale' at 30 June 2018 and now
classified as
reclassified as 'financial assets at fair value other comprehensive
income'.
'Interest revenue' is no longer included in the 'Revenue' note and is
now shown separately on the face of the statement of profit or
loss and other
in a
resul(cid:415)ng
comprehensive
reclassifica(cid:415)on of $12,999 for the year ended 30 June 2018.
income,
contract-based
AASB 15 Revenue from Contracts with Customers
The consolidated en(cid:415)ty has adopted AASB 15 from 1 July 2018.
The standard provides a single comprehensive model for revenue
recogni(cid:415)on. The core principle of the standard is that an en(cid:415)ty
shall recognise revenue to depict the transfer of promised goods
or services to customers at an amount that reflects the
considera(cid:415)on to which the en(cid:415)ty expects to be en(cid:415)tled in
exchange for those goods or services. The standard introduced a
new
recogni(cid:415)on model with a
measurement approach that is based on an alloca(cid:415)on of the
transac(cid:415)on price. This is described further in the accoun(cid:415)ng
policies below. Credit risk is presented separately as an expense
rather than adjusted against revenue. Contracts with customers
are presented in an en(cid:415)ty's statement of financial posi(cid:415)on as a
contract liability, a contract asset, or a receivable, depending on
the rela(cid:415)onship between the en(cid:415)ty's performance and the
customer's payment. Customer acquisi(cid:415)on costs and costs to fulfil
a contract can, subject to certain criteria, be capitalised as an asset
and amor(cid:415)sed over the contract period.
revenue
The adop(cid:415)on of this standard has no impact on the financial
performance and posi(cid:415)on of the consolidated en(cid:415)ty.
Going concern
For the year ended 30 June 2019 the consolidated en(cid:415)ty generated
an opera(cid:415)ng loss a(cid:332)er income tax of $2,032,527 (2018: $987,331
loss before taking into account the net gain from the sale of Intec
Zeehan Residues Pty Ltd). Net cash ou(cid:414)lows from opera(cid:415)ons were
$1,548,048 (2018: $892,345) for the year ended 30 June 2019.
Notes to the financial statements
For the year ended 30 June 2019
Note 2. Significant accoun(cid:415)ng policies (cont..)
Australian
Basis of prepara(cid:415)on
These general purpose financial statements have been prepared in
accordance with
and
Interpreta(cid:415)ons issued by the Australian Accoun(cid:415)ng Standards Board
('AASB') and the Corpora(cid:415)ons Act 2001, as appropriate for for-profit
oriented en(cid:415)(cid:415)es. These financial statements also comply with
Interna(cid:415)onal Financial Repor(cid:415)ng Standards as
issued by the
Interna(cid:415)onal Accoun(cid:415)ng Standards Board ('IASB').
Accoun(cid:415)ng
Standards
Historical cost conven(cid:415)on
The financial statements have been prepared under the historical
cost conven(cid:415)on, except for, where applicable, financial assets and
liabili(cid:415)es at fair value through profit or loss.
Cri(cid:415)cal accoun(cid:415)ng es(cid:415)mates
The prepara(cid:415)on of the financial statements requires the use of
certain cri(cid:415)cal accoun(cid:415)ng es(cid:415)mates. It also requires management to
exercise its judgement in the process of applying the consolidated
en(cid:415)ty's accoun(cid:415)ng policies. The areas involving a higher degree of
judgement or complexity, or areas where assump(cid:415)ons and es(cid:415)mates
are significant to the financial statements, are disclosed in note 3.
Parent en(cid:415)ty informa(cid:415)on
In accordance with the Corpora(cid:415)ons Act 2001, these financial
statements present the results of the consolidated en(cid:415)ty only.
Supplementary informa(cid:415)on about the parent en(cid:415)ty is disclosed in
note 28.
Principles of consolida(cid:415)on
The consolidated financial statements incorporate the assets and
liabili(cid:415)es of all subsidiaries of SciDev Limited ('company' or 'parent
en(cid:415)ty') as at 30 June 2019 and the results of all subsidiaries for the
year then ended. SciDev Limited and its subsidiaries together are
referred to in these financial statements as the 'consolidated en(cid:415)ty'.
Subsidiaries are all those en(cid:415)(cid:415)es over which the consolidated en(cid:415)ty
has control. The consolidated en(cid:415)ty controls an en(cid:415)ty when the
consolidated en(cid:415)ty is exposed to, or has rights to, variable returns
from its involvement with the en(cid:415)ty and has the ability to affect
those returns through its power to direct the ac(cid:415)vi(cid:415)es of the en(cid:415)ty.
Subsidiaries are fully consolidated from the date on which control is
transferred to the consolidated en(cid:415)ty. They are de-consolidated
from the date that control ceases.
30
Intercompany transac(cid:415)ons, balances and unrealised gains on
in the consolidated en(cid:415)ty are
transac(cid:415)ons between en(cid:415)(cid:415)es
eliminated. Unrealised
losses are also eliminated unless the
transac(cid:415)on provides evidence of the impairment of the asset
transferred. Accoun(cid:415)ng policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by
the consolidated en(cid:415)ty.
The acquisi(cid:415)on of subsidiaries is accounted for using the acquisi(cid:415)on
method of accoun(cid:415)ng. A change in ownership interest, without the
loss of control, is accounted for as an equity transac(cid:415)on, where the
difference between the considera(cid:415)on transferred and the book
value of the share of the non-controlling interest acquired is
recognised directly in equity a(cid:425)ributable to the parent.
Where the consolidated en(cid:415)ty loses control over a subsidiary, it
derecognises the assets including goodwill, liabili(cid:415)es and non-
controlling interest in the subsidiary together with any cumula(cid:415)ve
transla(cid:415)on differences recognised in equity. The consolidated en(cid:415)ty
recognises the fair value of the considera(cid:415)on received and the fair
value of any investment retained together with any gain or loss in
profit or loss.
Foreign currency transla(cid:415)on
The financial statements are presented in Australian dollars, which is
SciDev Limited's func(cid:415)onal and presenta(cid:415)on currency.
Foreign currency transac(cid:415)ons
Foreign currency transac(cid:415)ons are translated into Australian dollars
using the exchange rates prevailing at the dates of the transac(cid:415)ons.
Foreign exchange gains and losses resul(cid:415)ng from the se(cid:425)lement of
such transac(cid:415)ons and from the transla(cid:415)on at financial year-end
exchange rates of monetary assets and liabili(cid:415)es denominated in
foreign currencies are recognised in profit or loss.
Foreign opera(cid:415)ons
The assets and liabili(cid:415)es of foreign opera(cid:415)ons are translated into
Australian dollars using the exchange rates at the repor(cid:415)ng date.
The revenues and expenses of foreign opera(cid:415)ons are translated into
Australian dollars using the average exchange rates, which
approximate the rates at the dates of the transac(cid:415)ons, for the
period. All resul(cid:415)ng foreign exchange differences are recognised in
other comprehensive income through the foreign currency reserve
in equity. The foreign currency reserve is recognised in profit or loss
when the foreign opera(cid:415)on or net investment is disposed of.
SciDev Ltd
REPORT 2019
ANNUAL
method. Gains and losses are recognised in profit or loss when the
asset is derecognised or impaired.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income
include equity investments which the consolidated en(cid:415)ty intends to
hold for the foreseeable future and has irrevocably elected to
classify them as such upon ini(cid:415)al recogni(cid:415)on.
Impairment of financial assets
The consolidated en(cid:415)ty recognises a loss allowance for expected
credit losses on financial assets which are either measured at
amor(cid:415)sed cost or fair value through other comprehensive income.
The measurement of the
loss allowance depends upon the
consolidated en(cid:415)ty's assessment at the end of each repor(cid:415)ng
period as to whether the financial instrument's credit risk has
increased significantly since ini(cid:415)al recogni(cid:415)on, based on reasonable
and supportable informa(cid:415)on that is available, without undue cost
or effort to obtain.
Where there has not been a significant increase in exposure to
credit risk since ini(cid:415)al recogni(cid:415)on, a 12-month expected credit loss
allowance is es(cid:415)mated.
losses. The amount of expected credit
This represents a por(cid:415)on of the asset's life(cid:415)me expected credit
losses that is a(cid:425)ributable to a default event that is possible within
the next 12 months. Where a financial asset has become credit
impaired or where it is determined that credit risk has increased
significantly, the loss allowance is based on the asset's life(cid:415)me
expected credit
loss
recognised is measured on the basis of the probability weighted
present value of an(cid:415)cipated cash shor(cid:414)alls over the life of the
instrument discounted at the original effec(cid:415)ve interest rate. For
financial assets measured at
through other
comprehensive income, the loss allowance is recognised within
other comprehensive income. In all other cases, the loss allowance
is recognised in profit or loss.
fair value
31
Note 2. Significant accoun(cid:415)ng policies (cont..)
Current and non-current classifica(cid:415)on
Assets and liabili(cid:415)es are presented in the statement of financial
posi(cid:415)on based on current and non-current classifica(cid:415)on.
An asset is classified as current when: it is either expected to be
realised or intended to be sold or consumed in the consolidated
en(cid:415)ty's normal opera(cid:415)ng cycle; it is held primarily for the purpose
of trading; it is expected to be realised within 12 months a(cid:332)er the
repor(cid:415)ng period; or the asset is cash or cash equivalent unless
restricted from being exchanged or used to se(cid:425)le a liability for at
least 12 months a(cid:332)er the repor(cid:415)ng period. All other assets are
classified as non-current.
A liability is classified as current when: it is either expected to be
se(cid:425)led in the consolidated en(cid:415)ty's normal opera(cid:415)ng cycle; it is held
primarily for the purpose of trading; it is due to be se(cid:425)led within 12
months a(cid:332)er the repor(cid:415)ng period; or there is no uncondi(cid:415)onal
right to defer the se(cid:425)lement of the liability for at least 12 months
a(cid:332)er the repor(cid:415)ng period. All other liabili(cid:415)es are classified as non-
current. Deferred tax assets and liabili(cid:415)es are always classified as
non-current.
included as part of the
Investments and other financial assets
Investments and other financial assets are ini(cid:415)ally measured at fair
value. Transac(cid:415)on costs are
ini(cid:415)al
measurement, except for financial assets at fair value through
profit or loss. Such assets are subsequently measured at either
amor(cid:415)sed cost or fair value depending on their classifica(cid:415)on.
Classifica(cid:415)on is determined based on both the business model
within which such assets are held and the contractual cash flow
characteris(cid:415)cs of the financial asset unless, an accoun(cid:415)ng mismatch
is being avoided.
Financial assets are derecognised when the rights to receive cash
flows have expired or have been transferred and the consolidated
en(cid:415)ty has transferred substan(cid:415)ally all the risks and rewards of
ownership. When there is no reasonable expecta(cid:415)on of recovering
part or all of a financial asset, it's carrying value is wri(cid:425)en off.
Loans and receivables
Loans and receivables are non-deriva(cid:415)ve financial assets with fixed
or determinable payments that are not quoted in an ac(cid:415)ve market.
They are carried at amor(cid:415)sed cost using the effec(cid:415)ve interest rate
Notes to the financial statements
For the year ended 30 June 2019
Note 2. Significant accoun(cid:415)ng policies (cont..)
Leases
The determina(cid:415)on of whether an arrangement is or contains a lease
is based on the substance of the arrangement and requires an
assessment of whether the fulfilment of the arrangement
is
dependent on the use of a specific asset or assets and the
arrangement conveys a right to use the asset.
discount rate specific to the asset or cash-genera(cid:415)ng unit to which
the asset belongs. Assets that do not have independent cash flows
are grouped together to form a cash-genera(cid:415)ng unit.
Finance costs
Finance costs a(cid:425)ributable to qualifying assets are capitalised as part
of the asset. All other finance costs are expensed in the period in
which they are incurred.
A dis(cid:415)nc(cid:415)on is made between finance leases, which effec(cid:415)vely
transfer from the lessor to the lessee substan(cid:415)ally all the risks and
benefits incidental to the ownership of leased assets, and opera(cid:415)ng
leases, under which the lessor effec(cid:415)vely retains substan(cid:415)ally all
such risks and benefits.
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
acquisi(cid:415)on of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST
receivable or payable. The net amount of GST recoverable from, or
payable to, the tax authority is included in other receivables or other
payables in the statement of financial posi(cid:415)on.
Cash flows are presented on a gross basis. The GST components of
cash flows arising from inves(cid:415)ng or financing ac(cid:415)vi(cid:415)es which are
recoverable from, or payable to the tax authority, are presented as
opera(cid:415)ng cash flows.
Commitments and con(cid:415)ngencies are disclosed net of the amount of
GST recoverable from, or payable to, the tax authority.
New Accoun(cid:415)ng Standards and Interpreta(cid:415)ons not yet mandatory
or early adopted
Australian Accoun(cid:415)ng Standards and Interpreta(cid:415)ons that have
recently been issued or amended but are not yet mandatory, have
not been early adopted by the consolidated en(cid:415)ty for the annual
repor(cid:415)ng period ended 30 June 2019.
Finance leases are capitalised. A lease asset and liability are
established at the fair value of the leased assets, or if lower, the
present value of minimum lease payments. Lease payments are
allocated between the principal component of the lease liability and
the finance costs, so as to achieve a constant rate of interest on the
remaining balance of the liability.
Leased assets acquired under a finance lease are depreciated over
the asset's useful life or over the shorter of the asset's useful life and
the
is no reasonable certainty that the
consolidated en(cid:415)ty will obtain ownership at the end of the lease
term.
lease term
if there
Opera(cid:415)ng lease payments, net of any incen(cid:415)ves received from the
lessor, are charged to profit or loss on a straight-line basis over the
term of the lease.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful
life are not subject to amor(cid:415)sa(cid:415)on and are tested annually for
impairment, or more
in
circumstances indicate that they might be impaired. Other non-
financial assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its recoverable amount.
if events or changes
frequently
Recoverable amount is the higher of an asset's fair value less costs of
disposal and value-in-use. The value-in-use is the present value of
the es(cid:415)mated future cash flows rela(cid:415)ng to the asset using a pre-tax
32
Note 2. Significant accoun(cid:415)ng policies (cont..)
The consolidated en(cid:415)ty's assessment of the impact of these new or
amended Accoun(cid:415)ng Standards and Interpreta(cid:415)ons, most relevant
to the consolidated en(cid:415)ty, are set out below.
AASB 16 Leases
This standard is applicable to annual repor(cid:415)ng periods beginning
on or a(cid:332)er 1 January 2019. The standard replaces AASB 117
'Leases' and for
lessees will eliminate the classifica(cid:415)ons of
opera(cid:415)ng leases and finance leases. Subject to excep(cid:415)ons, a 'right-
of-use' asset will be capitalised in the statement of financial
posi(cid:415)on, measured at the present value of the unavoidable future
lease payments to be made over the lease term. The excep(cid:415)ons
relate to short-term leases of 12 months or less and leases of low-
value assets (such as personal computers and small office
furniture) where an accoun(cid:415)ng policy choice exists whereby either
a 'right-of-use' asset is recognised or lease payments are expensed
to profit or loss as incurred. A liability corresponding to the
capitalised lease will also be recognised, adjusted for lease
prepayments, lease incen(cid:415)ves received, ini(cid:415)al direct costs incurred
and an es(cid:415)mate of any future restora(cid:415)on, removal or dismantling
costs. Straight-line opera(cid:415)ng lease expense recogni(cid:415)on will be
replaced with a deprecia(cid:415)on charge for the leased asset (included
in opera(cid:415)ng costs) and an interest expense on the recognised lease
liability (included in finance costs). In the earlier periods of the
lease, the expenses associated with the lease under AASB 16 will
be higher when compared to lease expenses under AASB 117.
However EBITDA (Earnings Before Interest, Tax, Deprecia(cid:415)on and
Amor(cid:415)sa(cid:415)on) results will be improved as the opera(cid:415)ng expense is
replaced by interest expense and deprecia(cid:415)on in profit or loss
under AASB 16. For classifica(cid:415)on within the statement of cash
flows, the lease payments will be separated into both a principal
(financing ac(cid:415)vi(cid:415)es) and interest (either opera(cid:415)ng or financing
ac(cid:415)vi(cid:415)es) component.
For lessor accoun(cid:415)ng, the standard does not substan(cid:415)ally change
how a lessor accounts for leases. The consolidated en(cid:415)ty will adopt
this standard from 1 July 2019 but the impact of its adop(cid:415)on is yet
to be assessed by the consolidated en(cid:415)ty.
SciDev Ltd
REPORT 2019
ANNUAL
Note 3. Cri(cid:415)cal accoun(cid:415)ng
assump(cid:415)ons
judgements, es(cid:415)mates and
The prepara(cid:415)on of the financial statements requires management
to make judgements, es(cid:415)mates and assump(cid:415)ons that affect the
reported amounts
in the financial statements. Management
con(cid:415)nually evaluates its judgements and es(cid:415)mates in rela(cid:415)on to
assets, liabili(cid:415)es, con(cid:415)ngent liabili(cid:415)es, revenue and expenses.
Management bases its judgements, es(cid:415)mates and assump(cid:415)ons on
historical experience and on other various factors, including
expecta(cid:415)ons of future events, management believes to be
reasonable under the circumstances. The resul(cid:415)ng accoun(cid:415)ng
judgements and es(cid:415)mates will seldom equal the related actual
results. The judgements, es(cid:415)mates and assump(cid:415)ons that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabili(cid:415)es (refer to the respec(cid:415)ve notes)
within the next financial year are discussed below.
indicate
in circumstances
Goodwill
The consolidated en(cid:415)ty tests annually, or more frequently if events
or changes
impairment, whether
goodwill has suffered any impairment, in accordance with the
accoun(cid:415)ng policy stated in note 2. The recoverable amounts of
cash-genera(cid:415)ng units have been determined based on value-in-use
calcula(cid:415)ons. These calcula(cid:415)ons require the use of assump(cid:415)ons,
including es(cid:415)mated discount rates based on the current cost of
capital and growth rates of the es(cid:415)mated future cash flows. For
informa(cid:415)on rela(cid:415)ng to the value-in-use calcula(cid:415)ons refer to note
14.
Note 4. Opera(cid:415)ng segments
Iden(cid:415)fica(cid:415)on of reportable opera(cid:415)ng segments
The consolidated en(cid:415)ty operates in primarily one geographical
segment, namely Australia. The primary business segment is the
treatment of industrial waste including the manufacture and
supply of chemicals for the treatment of waste water.
Opera(cid:415)ng and business segments are reported in a manner
consistent with the internal repor(cid:415)ng provided to the chief
opera(cid:415)ng decision makers. The chief opera(cid:415)ng decision maker,
who
for alloca(cid:415)ng resources and assessing
performance of the opera(cid:415)ng segments, has been iden(cid:415)fied as the
Board of Directors.
is responsible
33
Notes to the financial statements
For the year ended 30 June 2019
Note 4. Opera(cid:415)ng segments (cont…)
Major customers
During the year ended 30 June 2019 approximately 57% of the consolidated en(cid:415)ty's external revenue was derived from sales to the consolidated
en(cid:415)ty's 3 largest customers (2018: 52% of consolidated external revenue was a(cid:425)ributable to one customer). No other customer contributed 10%
or more to the consolidated en(cid:415)ty's revenue for both 2019 and 2018.
Revenue by geographical area
The consolidated en(cid:415)ty operates primarily in one geographical segment being Australia. Revenue a(cid:425)ributable to overseas subsidiaries is not
material to the consolidated en(cid:415)ty.
Accoun(cid:415)ng policy for opera(cid:415)ng segments
Opera(cid:415)ng segments are presented using the 'management approach', where the informa(cid:415)on presented is on the same basis as the internal
reports provided to the Chief Opera(cid:415)ng Decision Makers ('CODM'). The CODM is responsible for the alloca(cid:415)on of resources to opera(cid:415)ng
segments and assessing their performance.
Note 5. Revenue
Sales revenue
Treatment fees and product sales
Other revenue
Royalty
Other revenue
Revenue
2019
$
2018
$
2,655,799
2,029,373
-
265,261
265,261
14,125
157,270
171,395
2,921,060
2,200,768
Accoun(cid:415)ng policy for revenue recogni(cid:415)on
The consolidated en(cid:415)ty recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the considera(cid:415)on to which the consolidated en(cid:415)ty is expected to be en(cid:415)tled in exchange for
transferring goods or services to a customer. For each contract with a customer, the consolidated en(cid:415)ty: iden(cid:415)fies the contract with a customer;
iden(cid:415)fies the performance obliga(cid:415)ons in the contract; determines the transac(cid:415)on price which takes into account es(cid:415)mates of variable
considera(cid:415)on and the (cid:415)me value of money; allocates the transac(cid:415)on price to the separate performance obliga(cid:415)ons on the basis of the rela(cid:415)ve
stand-alone selling price of each dis(cid:415)nct good or service to be delivered; and recognises revenue when or as each performance obliga(cid:415)on is
sa(cid:415)sfied in a manner that depicts the transfer to the customer of the goods or services promised.
34
SciDev Ltd
REPORT 2019
ANNUAL
Note 5. Revenue (cont..)
Variable considera(cid:415)on within the transac(cid:415)on price, if any, reflects concessions provided to the customer such as discounts, rebates and
refunds, any poten(cid:415)al bonuses receivable from the customer and any other con(cid:415)ngent events. Such es(cid:415)mates are determined using either
the 'expected value' or 'most likely amount' method. The measurement of variable considera(cid:415)on is subject to a constraining principle
whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumula(cid:415)ve
revenue recognised will not occur. The measurement constraint con(cid:415)nues un(cid:415)l the uncertainty associated with the variable considera(cid:415)on is
subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in (cid:415)me when the customer obtains control of the goods, which is generally at the
(cid:415)me of delivery.
Consul(cid:415)ng services and treatment fees
Consul(cid:415)ng services and treatment fees are recognised using the percentage-of-comple(cid:415)on method for fixed-fee arrangements or as the
services are provided for (cid:415)me-and-materials arrangements.
Interest
Interest revenue is recognised as interest accrues using the effec(cid:415)ve interest method. This is a method of calcula(cid:415)ng the amor(cid:415)sed cost of a
financial asset and alloca(cid:415)ng the interest income over the relevant period using the effec(cid:415)ve interest rate, which is the rate that exactly
discounts es(cid:415)mated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
35
Notes to the financial statements
For the year ended 30 June 2019
Note 6. Other income
Net foreign exchange gain
Net gain on disposal of Intec Zeehan Residues Pty Ltd
Subsidies and grants
Reimbursement of expenses
Other income
Note 7. Expenses
Profit/(loss) before income tax includes the following specific expenses:
Rental expense rela(cid:415)ng to opera(cid:415)ng leases
Minimum lease payments
Superannua(cid:415)on expense
Defined contribu(cid:415)on superannua(cid:415)on expense
Note 8. Income tax
Income tax expense/(benefit)
Deferred tax - origina(cid:415)on and reversal of temporary differences
Adjustment recognised for prior periods
Aggregate income tax expense/(benefit)
Deferred tax included in income tax expense/(benefit) comprises:
Decrease in deferred tax liabili(cid:415)es
Numerical reconcilia(cid:415)on of income tax expense/(benefit) and tax at the statutory rate
Profit/(loss) before income tax benefit/(expense)
Tax at the statutory tax rate of 27.5%
Tax effect amounts which are not deduc(cid:415)ble/(taxable) in calcula(cid:415)ng taxable income:
Non-deduc(cid:415)ble expenses
Non-assessable income
Adjustment recognised for prior periods
Current year tax losses not recognised
Current year temporary differences not recognised
Adjustment to deferred tax balances
Income tax expense/(benefit)
36
2019
$
-
-
332,981
3,664
2018
$
20,181
1,989,200
303,112
23,694
336,645
2,336,187
2019
$
2018
$
156,169
106,519
96,666
74,951
2019
$
2018
$
(8,122)
32,199
(8,142)
-
24,077
(8,142)
(8,122)
(8,142)
(2,008,450)
993,727
(552,324)
273,275
8,121
(91,570)
(635,773)
32,199
649,194
(21,543)
-
43,105
(630,386)
(314,006)
-
340,933
(30,715)
(4,354)
24,077
(8,142)
SciDev Ltd
REPORT 2019
ANNUAL
Note 8. income tax (cont..)
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Poten(cid:415)al tax benefit @ 27.5%
2019
$
2018
$
67,709,864
66,114,631
18,620,213
18,181,524
The above poten(cid:415)al tax benefit for tax losses has not been recognised in the statement of financial posi(cid:415)on. These tax losses can only be
u(cid:415)lised in the future if the con(cid:415)nuity of ownership test is passed, or failing that, the same business test is passed.
Deferred tax liability
Deferred tax liability comprises temporary differences a(cid:425)ributable to:
Amounts recognised in profit or loss:
Brand name
Deferred tax liability
Movements:
Opening balance
Credited to profit or loss
Closing balance
2019
$
2018
$
35,986
44,108
35,986
44,108
44,108
(8,122)
52,250
(8,142)
35,986
44,108
Accoun(cid:415)ng policy for 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 jurisdic(cid:415)on, adjusted by the changes in deferred tax assets and liabili(cid:415)es a(cid:425)ributable to temporary differences, unused tax losses
and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabili(cid:415)es are recognised for temporary differences at the tax rates expected to be applied when the assets are
recovered or liabili(cid:415)es are se(cid:425)led, based on those tax rates that are enacted or substan(cid:415)vely enacted, except for:
When the deferred income tax asset or liability arises from the ini(cid:415)al recogni(cid:415)on of goodwill or an asset or liability in a transac(cid:415)on
that is not a business combina(cid:415)on and that, at the (cid:415)me of the transac(cid:415)on, affects neither the accoun(cid:415)ng nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the (cid:415)ming 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 deduc(cid:415)ble temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to u(cid:415)lise those temporary differences and losses.
37
Notes to the financial statements
For the year ended 30 June 2019
Note 8. Income tax (cont..)
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each repor(cid:415)ng 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 liabili(cid:415)es are offset only where there is a legally enforceable right to offset current tax assets against current tax liabili(cid:415)es
and deferred tax assets against deferred tax liabili(cid:415)es; and they relate to the same taxable authority on either the same taxable en(cid:415)ty or different
taxable en(cid:415)(cid:415)es which intend to se(cid:425)le simultaneously.
SciDev Limited (the 'head en(cid:415)ty') and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax
consolida(cid:415)on regime. The head en(cid:415)ty and each subsidiary in the tax consolidated group con(cid:415)nue to account for their own current and deferred
tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach in determining the appropriate amount of
taxes to allocate to members of the tax consolidated group.
In addi(cid:415)on to its own current and deferred tax amounts, the head en(cid:415)ty also recognises the current tax liabili(cid:415)es (or assets) and the deferred tax
assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated group.
Assets or liabili(cid:415)es arising under tax funding agreements with the tax consolidated en(cid:415)(cid:415)es are recognised as amounts receivable from or payable
to other en(cid:415)(cid:415)es in the tax consolidated group. The tax funding arrangement ensures that the intercompany charge equals the current tax liability
or benefit of each tax consolidated group member, resul(cid:415)ng in neither a contribu(cid:415)on by the head en(cid:415)ty to the subsidiaries nor a distribu(cid:415)on by
the subsidiaries to the head en(cid:415)ty.
Cash on hand
Cash at bank
2019
$
2018
$
150
1,756,059
150
568,037
1,756,209
568,187
Note 9. Current assets - cash and cash equivalents
Accoun(cid:415)ng policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial ins(cid:415)tu(cid:415)ons, other short-term, highly liquid investments with
original maturi(cid:415)es of three months or less that are readily conver(cid:415)ble to known amounts of cash and which are subject to an insignificant risk of
changes in value.
38
SciDev Ltd
REPORT 2019
ANNUAL
2019
$
2018
$
779,210
26,889
-
457,430
14,266
256,250
806,099
727,946
Note 10. Current assets - trade and other receivables
Trade receivables
Other receivables
Amount due by Tartana Resources Limited
Allowance for expected credit losses
On adop(cid:415)on of AASB 9 'Financial instruments', the consolidated en(cid:415)ty has changed the accoun(cid:415)ng for impairment losses for receivables by
replacing the previous 'incurred loss approach' with a forward-looking 'expected credit loss' (ECL) approach and has calculated its ECL based
on the consolidated en(cid:415)ty's historical credit loss experience, adjusted for forward-looking factors specific to its receivables and the economic
environment.
The consolidated en(cid:415)ty does not have any history of impairment of its trade receivables. The consolidated en(cid:415)ty transacts with a limited
number of established customers and operates under strict credit policies approved by the Board of Directors.
No impairment loss has be been recognised for trade receivables.
Accoun(cid:415)ng policy for trade and other receivables
Trade receivables are ini(cid:415)ally recognised at fair value and subsequently measured at amor(cid:415)sed cost using the effec(cid:415)ve interest method, less
any allowance for expected credit losses. Trade receivables are generally due for se(cid:425)lement within 30 days.
The consolidated en(cid:415)ty has applied the simplified approach to measuring expected credit losses, which uses a life(cid:415)me expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amor(cid:415)sed cost, less any allowance for expected credit losses.
Note 11. Current assets - inventories
Stock on hand - at cost
2019
$
2018
$
264,325
236,184
Accoun(cid:415)ng policy for inventories
Stock on hand is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of rebates and
discounts received or receivable.
Net realisable value is the es(cid:415)mated selling price in the ordinary course of business less the es(cid:415)mated costs of comple(cid:415)on and the es(cid:415)mated
costs necessary to make the sale.
39
Notes to the financial statements
For the year ended 30 June 2019
12. Non-current assets - financial assets at fair value through other comprehensive income
Unlisted equity securi(cid:415)es
Considera(cid:415)on from disposal of Intec Zeehan Residues Pty Ltd
Reconcilia(cid:415)on
Reconcilia(cid:415)on of the fair values at the beginning and end of the current and previous financial year are set
out below:
Opening fair value
Addi(cid:415)ons*
Disposals*
Revalua(cid:415)on increments
Closing fair value
2019
$
2018
$
1,502,900
-
698,900
804,000
1,502,900
1,502,900
1,502,900
500,000
(641,026)
141,026
2,900
1,500,000
-
-
1,502,900
1,502,900
Refer to note 23 for further informa(cid:415)on on fair value measurement.
*
On 25 October 2017, SciDev Limited (SciDev) entered into a condi(cid:415)onal sale agreement to dispose of Intec Zeehan Residues Pty Ltd (IZR),
whose principal asset was the Zeehan Zinc Project. The disposal was in order to generate cash flow for the expansion of the consolidated
en(cid:415)ty's core businesses. The disposal was completed on 22 January 2018, on which date control of IZR passed to the acquirer, Tartana
Resources Ltd (Tartana).
The total considera(cid:415)on was 15,000,000 ordinary shares in Tartana at a deemed price of 10 cents per share and $500,000 in cash. SciDev
received $300,000 of the cash component and 7,760,000 ordinary shares in Tartana.
SciDev and Tartana subsequently agreed to vary the terms of the sale agreement resul(cid:415)ng in an addi(cid:415)onal 5,000,000 Tartana shares to be
issued to SciDev and the dele(cid:415)on of the $500,000 cash component of the transac(cid:415)on. SciDev agreed to repay the $300,000 it received from
Tartana and used the proceeds from the sale of 6,410,256 Tartana shares to fund the repayment. The total considera(cid:415)on for the transac(cid:415)on
of $2,000,000 remained unchanged.
40
SciDev Ltd
REPORT 2019
ANNUAL
2019
$
2018
$
748,552
(462,286)
286,266
50,954
(33,766)
17,188
619,949
(358,995)
260,954
31,028
(31,028)
-
303,454
260,954
Note 13. Non-current assets - property, plant and equipment
Plant and equipment - at cost
Less: Accumulated deprecia(cid:415)on
Office equipment - at cost
Less: Accumulated deprecia(cid:415)on
Reconcilia(cid:415)ons
Reconcilia(cid:415)ons of the wri(cid:425)en down values at the beginning and end of the current and previous financial year are set out below:
Balance at 1 July 2017
Addi(cid:415)ons
Deprecia(cid:415)on expense
Balance at 30 June 2018
Addi(cid:415)ons
Disposals
Deprecia(cid:415)on expense
Balance at 30 June 2019
Plant and
Equipment
$
Office
Equipment
$
Total
$
290,123
97,045
(126,214)
260,954
205,299
(27,621)
(152,366)
1,078
-
(1,078)
-
19,926
-
(2,738)
291,201
97,045
(127,292)
260,954
225,225
(27,621)
(155,104)
286,266
17,188
303,454
Property, plant and equipment secured under finance leases
Refer to note 26 for further informa(cid:415)on on property, plant and equipment secured under finance leases.
Accoun(cid:415)ng policy for property, plant and equipment
Plant and equipment is stated at historical cost less accumulated deprecia(cid:415)on and impairment. Historical cost includes expenditure that is
directly a(cid:425)ributable to the acquisi(cid:415)on of the items.
Deprecia(cid:415)on is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment over their expected
useful lives as follows:
Plant and equipment
Office equipment
4-7 years
2-8 years
The residual values, useful lives and deprecia(cid:415)on methods are reviewed, and adjusted if appropriate, at each repor(cid:415)ng date.
Plant and equipment under lease are depreciated over the unexpired period of the lease or the es(cid:415)mated useful life of the assets, whichever
is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated
en(cid:415)ty. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
41
Notes to the financial statements
For the year ended 30 June 2019
Note 14. Non-current assets - intangibles
Goodwill - at cost
Trade marks and intellectual property - at cost
Less: Accumulated amor(cid:415)sa(cid:415)on
2019
$
2018
$
1,030,018
1,030,018
465,871
(249,590)
216,281
427,942
(191,927)
236,015
1,246,299
1,266,033
Reconcilia(cid:415)ons
Reconcilia(cid:415)ons of the wri(cid:425)en down values at the beginning and end of the current and previous financial year are set out below:
Balance at 1 July 2017
Addi(cid:415)ons
Amor(cid:415)sa(cid:415)on expense
Balance at 30 June 2018
Addi(cid:415)ons
Amor(cid:415)sa(cid:415)on expense
Balance at 30 June 2019
Trademarks and
Intellectual
property
$
Goodwill
$
1,030,018
-
-
1,030,018
-
-
249,785
53,109
(66,879)
236,015
37,929
(57,663)
Total
$
1,279,803
53,109
(66,879)
1,266,033
37,929
(57,663)
1,030,018
216,281
1,246,299
Impairment tes(cid:415)ng
Goodwill which was acquired through a business combina(cid:415)on, has been allocated to the Science Development Pty Ltd cash-genera(cid:415)ng unit
(CGU). The recoverable amount of the consolidated en(cid:415)ty's goodwill has been determined by a value-in-use calcula(cid:415)on using a discounted
cash flow model, based on a 1 year projec(cid:415)on period approved by management and extrapolated for a further 4 years using variable rates,
together with a terminal value.
Key assump(cid:415)ons are those to which the recoverable amount of an asset or cash-genera(cid:415)ng units is most sensi(cid:415)ve.
Key assump(cid:415)ons in the discounted cashflow model include:
(a)
(b)
(c)
(d)
Post-tax discount rate of 15% (2018: 15%) per annum;
Average revenue growth over the five-year period of 1,243% (2018: 46%);
Average growth in gross margin over the five-year period of 1,433% (2018: 39%); and
Average per annum increase in opera(cid:415)ng expenses of 5% (2018: 16%).
42
SciDev Ltd
REPORT 2019
ANNUAL
that it might be impaired, and is carried at cost less accumulated
impairment losses. Impairment losses on goodwill are taken to
profit or loss and are not subsequently reversed.
Trade marks and intellectual property
Significant costs associated with trade marks and intellectual
property are deferred and amor(cid:415)sed on a straight-line basis over
the period of their expected benefit, being their finite life of 10
years.
Note 14. Non-current assets - intangibles (cont..)
The discount rate of 15% post-tax reflects management’s
es(cid:415)mate of the (cid:415)me value of money and the consolidated en(cid:415)ty’s
weighted average cost of capital, the risk free rate and the
vola(cid:415)lity of the share price rela(cid:415)ve to market movements.
Management believes the projected revenue growth rate is
prudent and jus(cid:415)fied, based on management's expecta(cid:415)ons of
the company's business development pipeline.
The budgeted gross margin is based on past performance and
management's expecta(cid:415)ons for the future.
Management has budgeted for opera(cid:415)ng costs based on the
current structure of the business, adjus(cid:415)ng for infla(cid:415)onary
increases but not reflec(cid:415)ng any future restructurings or cost
saving measures.
Sensi(cid:415)vity to change of assump(cid:415)ons
If the next year’s financial budget used in the value-in-use
calcula(cid:415)on had been 10% (2018: 10%) lower than management’s
es(cid:415)mates at 30 June 2019, the consolidated en(cid:415)ty would have a
recoverable amount in excess of $5 million (2018: $3.17 million)
against the carrying amount of the cash genera(cid:415)ng unit to which
the goodwill relates. If the post-tax discount rate applied to the
cash flow projec(cid:415)ons of this CGU had been 30% (2018: 30%)
higher than management’s es(cid:415)mates (20% instead of 15%) (2018:
20% instead of 15%), the consolidated en(cid:415)ty would have a
recoverable amount in excess of $4.6 million (2018: $2.91 million)
against the carrying amount of intangible assets and property,
plant and equipment.
Accoun(cid:415)ng policy for intangible assets
Intangible assets acquired as part of a business combina(cid:415)on,
other than goodwill, are ini(cid:415)ally measured at their fair value at
the date of the acquisi(cid:415)on. Intangible assets acquired separately
are ini(cid:415)ally recognised at cost. Indefinite life intangible assets are
not amor(cid:415)sed and are subsequently measured at cost less any
intangible assets are subsequently
impairment. Finite
measured at cost less amor(cid:415)sa(cid:415)on and any impairment. The gains
or
from the
in profit or
derecogni(cid:415)on of intangible assets are measured as the difference
between net disposal proceeds and the carrying amount of the
intangible asset. The method and useful lives of finite life
intangible assets are reviewed annually. Changes in the expected
pa(cid:425)ern of consump(cid:415)on or useful
life are accounted for
prospec(cid:415)vely by changing the amor(cid:415)sa(cid:415)on method or period.
losses recognised
loss arising
life
Goodwill
Goodwill arises on the acquisi(cid:415)on of a business. Goodwill is not
amor(cid:415)sed. Instead, goodwill is tested annually for impairment, or
more frequently if events or changes in circumstances indicate
43
Notes to the financial statements
For the year ended 30 June 2019
Note 15. Current liabili(cid:415)es - trade and other payables
Trade payables
BAS payable
Other payables
2019
$
2018
$
783,397
52,937
173,195
260,079
67,376
42,824
1,009,529
370,279
Refer to note 22 for further informa(cid:415)on on financial instruments.
Accoun(cid:415)ng policy for trade and other payables
These amounts represent liabili(cid:415)es for goods and services provided to the consolidated en(cid:415)ty prior to the end of the financial year and which are
unpaid. Due to their short-term nature they are measured at amor(cid:415)sed cost and are not discounted. The amounts are unsecured and are usually
paid within 30 days of recogni(cid:415)on.
Note 16. Current liabili(cid:415)es - borrowings
Lease liability
Refer to note 22 for further informa(cid:415)on on financial instruments.
2019
$
2018
$
-
31,938
Accoun(cid:415)ng policy for borrowings
Loans and borrowings are ini(cid:415)ally recognised at the fair value of the considera(cid:415)on received, net of transac(cid:415)on costs. They are subsequently
measured at amor(cid:415)sed cost using the effec(cid:415)ve interest method.
Where there is an uncondi(cid:415)onal right to defer se(cid:425)lement of the liability for at least 12 months a(cid:332)er the repor(cid:415)ng date, the loans or borrowings
are classified as non-current.
Note 17. Current liabili(cid:415)es - employee benefits
Annual leave
Long service leave
Accoun(cid:415)ng policy for employee benefits
2019
$
2018
$
32,619
122,657
40,534
126,713
155,276
167,247
Short‐term employee benefits
Liabili(cid:415)es for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be se(cid:425)led wholly within 12
months of the repor(cid:415)ng date are measured at the amounts expected to be paid when the liabili(cid:415)es are se(cid:425)led.
Defined contribu(cid:415)on superannua(cid:415)on expense
Contribu(cid:415)ons to defined contribu(cid:415)on superannua(cid:415)on plans are expensed in the period in which they are incurred.
44
SciDev Ltd
REPORT 2019
ANNUAL
2019
$
2018
$
2,153
-
Note 18. Non-current liabili(cid:415)es - employee benefits
Long service leave
Accoun(cid:415)ng policy for other long‐term employee benefits
The liability for annual leave and long service leave not expected to be se(cid:425)led within 12 months of the repor(cid:415)ng date are measured at the
present value of expected future payments to be made in respect of services provided by employees up to the repor(cid:415)ng date using the
projected unit credit method. Considera(cid:415)on 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 repor(cid:415)ng date on na(cid:415)onal government bonds with
terms to maturity and currency that match, as closely as possible, the es(cid:415)mated future cash ou(cid:414)lows.
Note 19. Equity - issued capital
2019
Shares
2018
Shares
2019
$
2018
$
Ordinary shares - fully paid
107,263,157
569,041,473
76,899,789
74,118,627
Movements in ordinary share capital
Details
Balance
Share placement
Balance
Share placement
Share placement
Share consolida(cid:415)on (10 to 1)
Date
1 July 2017
29 June 2018
30 June 2018
10 August 2018
11 August 2018
4 December 2018
Shares
Issue price
$
494,818,673
74,222,800
569,041,473
52,443,867
16,666,667
(574,336,806)
$0.006
$0.006
$0.006
$0.000
73,673,290
445,337
74,118,627
314,663
100,000
-
Shares issued to Nuoer Chemical Australia Pty Ltd
12 February 2019
1,666,667
$0.060
100,000
Shares issued to employees of Nuoer Chemical
Australia Pty Ltd
Share placement
En(cid:415)tlements issue
Share placement
Share issue transac(cid:415)on costs
12 February 2019
12 February 2019
13 March 2019
9 April 2019
5,000,000
1,166,666
22,614,624
12,999,999
-
$0.060
$0.060
$0.060
$0.060
$0.000
Balance
30 June 2019
107,263,157
300,000
70,000
1,266,949
780,000
(150,450)
76,899,789
45
Capital risk management
The consolidated en(cid:415)ty's objec(cid:415)ves when managing capital is to
safeguard its ability to con(cid:415)nue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders
and to maintain an op(cid:415)mum capital structure to reduce the cost of
capital.
Capital is regarded as total equity, as recognised in the statement of
financial posi(cid:415)on, plus net debt. Net debt is calculated as total
borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated
en(cid:415)ty may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to
reduce debt.
The consolidated en(cid:415)ty would look to raise capital when an
opportunity to invest in a business or company was seen as value
adding rela(cid:415)ve to the current company's share price at the (cid:415)me of
the investment. The consolidated en(cid:415)ty is not ac(cid:415)vely pursuing
addi(cid:415)onal investments in the short term as it con(cid:415)nues to integrate
and grow its exis(cid:415)ng businesses in order to maximise synergies.
There are no externally imposed capital requirements.
The capital risk management policy remains unchanged from the
2018 Annual Report.
The consolidated en(cid:415)ty monitors capital on the basis of its working
capital posi(cid:415)on (i.e. liquidity risk). The net working capital of the
consolidated en(cid:415)ty at 30 June 2019 was $1,684,507 (2018:
$964,607).
Accoun(cid:415)ng policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly a(cid:425)ributable to the issue of new shares or
op(cid:415)ons are shown in equity as a deduc(cid:415)on, net of tax, from the
proceeds.
Notes to the financial statements
For the year ended 30 June 2019
Note 19. Equity - issued capital (cont..)
Ordinary shares
Ordinary shares en(cid:415)tle the holder to par(cid:415)cipate in dividends and the
proceeds on the winding up of the company in propor(cid:415)on to the
number of and amounts paid on the shares held. The fully paid
ordinary shares have no par value and the company does not have a
limited amount of authorised capital.
On a show of hands every member present at a mee(cid:415)ng in person or
by proxy shall have one vote and upon a poll each share shall have
one vote.
Share placement
30 June 2018
The company issued 74,222,800 ordinary shares on 29 June 2018 in
terms of a placement to sophis(cid:415)cated and professional investors at
an issue price of 0.6 cents per share.
30 June 2019
On 10 August 2018 and 11 August 2018, the company completed
Tranche 2 of the share placement previously announced on 25 June
2018. Tranche 2 comprised the placement of 69,110,534 shares at an
issue price of 0.6 cents per share to raise $414,663. An Extraordinary
General Mee(cid:415)ng of the company was held on 2 August 2018 to
approve ma(cid:425)ers rela(cid:415)ng to both Tranches of the share placement
announced on 25 June 2018.
On 12 February 2019, 1,166,666 shares were issued at a price of 6
cents per share.
On 9 April 2019, 12,999,999 shares were issued at a price of 6 cents
per share.
Shares issued to the Nuoer Group and nominees of the Nuoer Group
On 12 February 2019, 1,666,667 shares were issued to the Nuoer
Group at a price of 6 cents per share to acquire the distribu(cid:415)on and
marke(cid:415)ng rights for Nuoer Group products in Australia and other
Oceanic countries. On the same day, 5,000,000 shares were issued to
employees of Nuoer Chemical Australia Pty Ltd at price of 6 cents per
share.
En(cid:415)tlements issue
On 15 March 2019, the company issued 22,614,624 shares at a price
of 6 cents per share in terms of a 2 for 7 non-renounceable
en(cid:415)tlements issue.
Share consolida(cid:415)on
On 4 December 2018 the company completed a 10 to 1
consolida(cid:415)on of its issued shares and op(cid:415)ons.
46
SciDev Ltd
REPORT 2019
ANNUAL
2019
$
2018
$
2,855,902
(645,199)
2,855,902
(645,199)
2,210,703
2,210,703
Note 20. Equity - reserves
Share-based payments reserve
Transac(cid:415)ons with non-controlling interests
Share‐based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remunera(cid:415)on, and other
par(cid:415)es as part of their compensa(cid:415)on for services.
Transac(cid:415)ons with non‐controlling interests
A change in ownership interest, without the loss of control, is accounted for as an equity transac(cid:415)on, where the difference between the
considera(cid:415)on transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity a(cid:425)ributable
to the parent.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Balance at 1 July 2017
Share-based payments
Balance at 30 June 2018
Balance at 30 June 2019
Note 21. Equity - dividends
Share-based pay-
ments
reserve
$
Transac(cid:415)ons
with non-
controlling
interests
$
Total
$
2,814,422
41,480
(645,199)
-
2,169,223
41,480
2,855,902
(645,199)
2,210,703
2,855,902
(645,199)
2,210,703
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Franking Credits
Franking credits available for subsequent financial years based on a tax rate of 27.5%
82,824
82,824
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
franking credits that will arise from the payment of the amount of the provision for income tax at the repor(cid:415)ng date
franking debits that will arise from the payment of dividends recognised as a liability at the repor(cid:415)ng date
franking credits that will arise from the receipt of dividends recognised as receivables at the repor(cid:415)ng date.
2019
$
2018
$
47
Notes to the financial statements
For the year ended 30 June 2019
Note 22. Financial instruments
Financial risk management objec(cid:415)ves
The consolidated en(cid:415)ty's ac(cid:415)vi(cid:415)es expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate
risk), credit risk and liquidity risk. The consolidated en(cid:415)ty's overall risk management program focuses on the unpredictability of financial markets
and seeks to minimise poten(cid:415)al adverse effects on the financial performance of the consolidated en(cid:415)ty. The consolidated en(cid:415)ty does not enter
into or trade financial instruments, including deriva(cid:415)ve financial instruments, for specula(cid:415)ve purposes.
Risk management is carried out by company management and the Board of Directors. Financial risks are iden(cid:415)fied and evaluated and, where
considered necessary, strategies are put in place to inves(cid:415)gate and/or minimise such risks.
Market risk
Foreign currency risk
Foreign exchange risk arises when future commercial transac(cid:415)ons and recognised assets and liabili(cid:415)es are denominated in a currency that is not
the en(cid:415)ty’s func(cid:415)onal currency. The consolidated en(cid:415)ty has a trade finance facility u(cid:415)lised for the purchase of US$ denominated invoices.
Purchases through the facility are transacted at the prevailing spot A$/US$ exchange rate and the outstanding amount under the facility is always
denominated in A$. The consolidated en(cid:415)ty has not entered into any foreign currency hedging contracts during the year. The consolidated en(cid:415)ty
is not exposed to any significant foreign currency risk.
Price risk
The consolidated en(cid:415)ty is not exposed to any significant price risk.
Interest rate risk
The consolidated en(cid:415)ty's main interest rate risk arises from borrowings. Borrowings obtained at variable rates expose the consolidated en(cid:415)ty to
interest rate risk. Borrowings obtained at fixed rates expose the consolidated en(cid:415)ty to fair value interest rate risk.
As at the repor(cid:415)ng date, the consolidated en(cid:415)ty had the following variable rate borrowings outstanding:
Leases
Net exposure to cash flow interest rate risk
2019
2018
Weighted
average interest
rate
%
-
Weighted
average interest
rate
%
Balance
$
Balance
$
-
-
6.00%
31,938
31,938
An analysis by remaining contractual maturi(cid:415)es in shown in 'liquidity and interest rate risk management' below.
2018 - An official increase/decrease in interest rates of 100 basis points would have an adverse/favourable effect on profit before tax of $319 per
annum. The percentage change is based on the expected vola(cid:415)lity of interest rates using market data and analysts forecasts.
Credit risk
The consolidated en(cid:415)ty has adopted a life(cid:415)me expected loss allowance in es(cid:415)ma(cid:415)ng expected credit losses to trade receivables through the use
of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representa(cid:415)ve across all customers of the
consolidated en(cid:415)ty based on recent sales experience, historical collec(cid:415)on rates and forward-looking informa(cid:415)on that is available.
Generally, trade receivables are wri(cid:425)en off when there is no reasonable expecta(cid:415)on of recovery. Indicators of this include the failure of a debtor
to engage in a repayment plan, no ac(cid:415)ve enforcement ac(cid:415)vity and a failure to make contractual payments for a period greater than 1 year.
48
SciDev Ltd
REPORT 2019
ANNUAL
Note 22. Financial instruments (cont..)
Credit risk (cont..)
Credit risk refers to the risk that a counterparty will default on its contractual obliga(cid:415)ons resul(cid:415)ng in financial loss to the consolidated
en(cid:415)ty.There is no significant concentra(cid:415)on of credit risk to any single en(cid:415)ty. The maximum exposure to credit risk at the repor(cid:415)ng date to
recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of
financial posi(cid:415)on and notes to the financial statements. There is no trade debtor or other receivable amount where collateral has been
received as security or pledged.
Liquidity risk
Vigilant liquidity risk management requires the consolidated en(cid:415)ty to maintain sufficient liquid assets (mainly cash and cash equivalents) and
available borrowing facili(cid:415)es to be able to pay debts as and when they become due and payable.
The consolidated en(cid:415)ty manages liquidity risk by maintaining adequate cash reserves and available borrowing facili(cid:415)es by con(cid:415)nuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabili(cid:415)es.
Remaining contractual maturi(cid:415)es
The following tables detail the consolidated en(cid:415)ty's remaining contractual maturity for its financial instrument liabili(cid:415)es. The tables have
been drawn up based on the undiscounted cash flows of financial liabili(cid:415)es based on the earliest date on which the financial liabili(cid:415)es are
required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturi(cid:415)es and therefore
these totals may differ from their carrying amount in the statement of financial posi(cid:415)on.
- 2019
Non‐interest bearing
Trade payables and other payables
Total non-deriva(cid:415)ves
- 2018
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years Over 5 years
$
$
Remaining
contractual
maturi(cid:415)es
$
-
1,009,529
1,009,529
-
-
-
-
-
-
1,009,529
1,009,529
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years Over 5 years
$
$
Remaining
contractual
maturi(cid:415)es
$
Non‐interest bearing
Trade payables and other payables
-
370,279
Interest‐bearing ‐ variable
Lease liability
Total non-deriva(cid:415)ves
6.00%
34,911
405,190
-
-
-
-
-
-
-
370,279
-
-
34,911
405,190
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
49
Notes to the financial statements
For the year ended 30 June 2019
Note 23. Fair value measurement
Market risk
Fair value hierarchy
The following tables detail the consolidated en(cid:415)ty's assets and liabili(cid:415)es, measured or disclosed at fair value, using a three level hierarchy, based
on the lowest level of input that is significant to the en(cid:415)re fair value measurement, being:
Level 1: Quoted prices (unadjusted) in ac(cid:415)ve markets for iden(cid:415)cal assets or liabili(cid:415)es that the en(cid:415)ty can access at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3: Unobservable inputs for the asset or liability
- 2019
Assets
Equity securi(cid:415)es
Equity securi(cid:415)es - other
Total assets
- 2018
Assets
Considera(cid:415)on from disposal of subsidiary
Equity securi(cid:415)es
Equity securi(cid:415)es - other
Total assets
Level 1
$
Level 2
$
Level 3
$
Total
$
Level 1
$
-
-
-
-
-
-
-
1,500,000
2,900
1,502,900
Level 2
$
Level 3
$
804,000
696,000
2,900
1,502,900
-
-
-
-
-
-
-
1,500,000
2,900
1,502,900
Total
$
804,000
696,000
2,900
1,502,900
There were no transfers between levels during the financial year.
Valua(cid:415)on techniques for fair value measurements categorised within level 2 and level 3
The considera(cid:415)on from disposal of subsidiary (2018: $804,000) and the equity securi(cid:415)es (2019: $1,500,000; 2018: $696,000) represent the non-
cash considera(cid:415)on received from the disposal of a subsidiary to an unlisted en(cid:415)ty. The fair value of these financial assets has been determined
using the expected ini(cid:415)al public offer (IPO) price the unlisted en(cid:415)ty is expec(cid:415)ng when it lists on the Australian Securi(cid:415)es Exchange (ASX).
Accoun(cid:415)ng policy for fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recogni(cid:415)on or disclosure purposes, the fair value is based on the
price that would be received to sell an asset or paid to transfer a liability in an orderly transac(cid:415)on between market par(cid:415)cipants at the
measurement date; and assumes that the transac(cid:415)on will take place either: in the principal market; or in the absence of a principal market, in the
most advantageous market.
50
SciDev Ltd
REPORT 2019
ANNUAL
Note 23. Fair value measurement (cont..)
Fair value is measured using the assump(cid:415)ons that market par(cid:415)cipants would use when pricing the asset or liability, assuming they act in
their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valua(cid:415)on
techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising
the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabili(cid:415)es measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. Classifica(cid:415)ons are reviewed at each repor(cid:415)ng date and transfers between levels are determined
based on a reassessment of the lowest level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal exper(cid:415)se is either not available or
when the valua(cid:415)on is deemed to be significant. External valuers are selected based on market knowledge and reputa(cid:415)on. Where there is a
significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verifica(cid:415)on of
the major inputs applied in the latest valua(cid:415)on and a comparison, where applicable, with external sources of data.
Note 24. Key management personnel disclosures
Compensa(cid:415)on
The aggregate compensa(cid:415)on made to directors and other members of key management personnel of the consolidated en(cid:415)ty is set out
below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Termina(cid:415)on benefits
Note 25. Remunera(cid:415)on of auditors
2019
$
2018
$
699,762
63,114
5,165
130,000
458,044
38,699
31,007
-
898,041
527,750
During the financial year the following fees were paid or payable for services provided by Rothsay Chartered Accountants, the auditor of the
company:
Audit services ‐ Rothsay Chartered Accountants
Audit or review of the financial statements
Other services ‐ Rothsay Chartered Accountants
Tax compliance services
2019
$
2018
$
37,292
49,050
5,500
4,000
42,792
53,050
51
Notes to the financial statements
For the year ended 30 June 2019
Note 26. Commitments
Lease commitments ‐ opera(cid:415)ng
Commi(cid:425)ed at the repor(cid:415)ng date but not recognised as liabili(cid:415)es, payable:
Within one year
One to five years
Lease commitments ‐ finance
Commi(cid:425)ed at the repor(cid:415)ng date and recognised as liabili(cid:415)es, payable:
Within one year
Total commitment
Less: Future finance charges
Net commitment recognised as liabili(cid:415)es
Represen(cid:415)ng:
Lease liability - current (note 16)
2019
$
2018
$
110,304
134,011
53,750
-
244,315
53,750
-
-
-
-
-
34,911
34,911
(2,973)
31,938
31,938
Opera(cid:415)ng lease commitments includes contracted amounts for various warehouses, offices and plant and equipment under non-cancellable
opera(cid:415)ng leases expiring within 1 - 3 years with, in some cases, op(cid:415)ons to extend. The leases have various escala(cid:415)on clauses. On renewal, the
terms of the leases are renego(cid:415)ated.
The motor vehicle related to the finance lease had a wri(cid:425)en down value of $34,655 at 30 June 2018 and the lease expired during the 30 June
2019 financial year.
Note 27. Related party transac(cid:415)ons
Parent en(cid:415)ty
SciDev Limited is the parent en(cid:415)ty.
Subsidiaries
Interests in subsidiaries are set out in note 29.
Key management personnel
Disclosures rela(cid:415)ng to key management personnel are set out in note 24 and the remunera(cid:415)on report included in the directors' report.
52
SciDev Ltd
REPORT 2019
ANNUAL
2019
$
2018
$
675,446
118,050
360,851
3,539
121,301
-
-
-
-
-
2019
$
2018
$
252,307
-
Note 27. Related party transac(cid:415)ons (cont..)
Transac(cid:415)ons with related par(cid:415)es
Details of transac(cid:415)ons between the consolidated en(cid:415)ty and related par(cid:415)es are disclosed below:
Sale of goods and services:
Sale of goods to other related party
Payment for goods and services:
Purchase of goods from other related party
Payment for services from other related party
Payment for other expenses:
Interest paid to other related party
Other transac(cid:415)ons:
Subscrip(cid:415)on for new ordinary shares by key management personnel as result of share placement
Receivable from and payable to related par(cid:415)es
The following balances are outstanding at the repor(cid:415)ng date in rela(cid:415)on to transac(cid:415)ons with related par(cid:415)es:
Current receivables:
Trade receivables from other related party
Loans to/from related par(cid:415)es
There were no loans to or from related par(cid:415)es at the current and previous repor(cid:415)ng date.
Balances and transac(cid:415)ons between the company and its subsidiaries, which are related par(cid:415)es of the company, have been eliminated on
consolida(cid:415)on and are not disclosed in this note.
Terms and condi(cid:415)ons
All transac(cid:415)ons were made on normal commercial terms and condi(cid:415)ons and at market rates.
53
Notes to the financial statements
For the year ended 30 June 2019
Note 28. Parent en(cid:415)ty informa(cid:415)on
Set out below is the supplementary informa(cid:415)on about the parent en(cid:415)ty.
Statement of profit or loss and other comprehensive income
Profit/(loss) a(cid:332)er income tax
Other comprehensive income for the year, net of tax
Total comprehensive income
Statement of financial posi(cid:415)on
Total current assets
Total non-current assets
Total assets
Total current liabili(cid:415)es
Total non-current liabili(cid:415)es
Total liabili(cid:415)es
Net assets
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parents
2019
$
2018
$
(1,081,461)
776,764
-
-
(1,081,461)
776,764
Parent
2019
$
2018
$
1,161,944
634,979
5,293,273
4,027,795
6,455,217
4,662,774
369,778
277,963
926
-
370,704
277,963
6,084,513
4,384,811
77,206,307
2,763,894
(73,885,688)
74,425,145
2,763,894
(72,804,228)
6,084,513
4,384,811
Guarantees entered into by the parent en(cid:415)ty in rela(cid:415)on to the debts of its subsidiaries
The parent en(cid:415)ty has provided guarantees for the finance lease rela(cid:415)ng to plant and equipment leased by Science Developments Pty Ltd. The
parent en(cid:415)ty had no other guarantees in rela(cid:415)on to the debts of its subsidiaries as at 30 June 2019 and 30 June 2018.
54
SciDev Ltd
REPORT 2019
ANNUAL
Note 28. Parent en(cid:415)ty informa(cid:415)on (cont..)
Con(cid:415)ngent liabili(cid:415)es
The parent en(cid:415)ty had no con(cid:415)ngent liabili(cid:415)es as at 30 June 2019 and 30 June 2018.
Capital commitments ‐ Property, plant and equipment
The parent en(cid:415)ty had no capital commitments for property, plant and equipment as at 30 June 2019 and 30 June 2018.
Significant accoun(cid:415)ng policies
The accoun(cid:415)ng policies of the parent en(cid:415)ty are consistent with those of the consolidated en(cid:415)ty, as disclosed in note 2, except for the
following:
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent en(cid:415)ty.
Dividends received from subsidiaries are recognised as other income by the parent en(cid:415)ty and its receipt may be an indicator of an
impairment of the investment.
Note 29. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabili(cid:415)es and results of the following subsidiaries in accordance with the
accoun(cid:415)ng policy described in note 2:
Name
Intec Copper Pty Ltd
Intec Envirometals Pty Ltd
Science Developments Pty Ltd
SciDev Interna(cid:415)onal Holdings Pty Ltd*
SciDev (US) LCC*
Principal place of business /
Country of incorpora(cid:415)on
Australia
Australia
Australia
Australia
United States
Ownership interest
2019
%
2018
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
-
* SciDev (US) LCC is a wholly-owned subsidiary of SciDev Interna(cid:415)onal Holdings Pty Ltd and both subsidiaries were incorporated on 8 May
2019
Note 30. Events a(cid:332)er the repor(cid:415)ng period
On 22 July 2019 the company reported its first major sales into the US oil and gas market.
On 23 July 2019 the company's shareholders approved the issue of the following op(cid:415)ons at a General Mee(cid:415)ng:
2,000,000 op(cid:415)ons to Mr Lewis E U(cid:427)ng - Managing Director and Chief Execu(cid:415)ve Officer
650,000 op(cid:415)ons to Mr Jon Gourlay - Non-execu(cid:415)ve Director
250,000 op(cid:415)ons Mr Trevor A Jones - Non-execu(cid:415)ve Chairman
250,000 op(cid:415)ons to Ms Simone Wa(cid:425) - Non-execu(cid:415)ve Director
The op(cid:415)ons issued to Mr Lewis U(cid:427)ng have an exercise price of 10 cents and the op(cid:415)ons issued to the other Directors have an exercise price
of 12 cents. The op(cid:415)ons granted to Mr Lewis U(cid:427)ng are subject to ves(cid:415)ng condi(cid:415)ons. The op(cid:415)ons granted to the non-execu(cid:415)ve Directors do
not have any ves(cid:415)ng condi(cid:415)ons. The op(cid:415)ons expire on 23 July 2022. These op(cid:415)ons form part of a broader op(cid:415)on issue to the Board and
senior execu(cid:415)ves totalling 5,350,000 op(cid:415)ons in total; refer to ASX announcement dated 16 August 2019.
55
Notes to the financial statements
For the year ended 30 June 2019
Note 30. Events a(cid:332)er the repor(cid:415)ng period (cont..)
On 30 August 2019 the company announced a major chemical supply and equipment leasing contract with Iluka Resources.
On the 13 September 2019, the company announced the placement of 16,000,0000 new ordinary shares with local ins(cid:415)tu(cid:415)onal and sophis(cid:415)cated
investors at an issue price of $0.26 per share to raise total proceeds of $4.16 million. The funds from the placement will predominantly be used to
increase inventory, con(cid:415)nue development of the consolidated en(cid:415)ty's Op(cid:415)Flox and MaxiFlox technology, and increase working capital. The
capital raising was completed on 20 September 2019.
No other ma(cid:425)er or circumstance has arisen since 30 June 2019 that has significantly affected, or may significantly affect the consolidated en(cid:415)ty's
opera(cid:415)ons, the results of those opera(cid:415)ons, or the consolidated en(cid:415)ty's state of affairs in future financial years.
Note 31. Reconcilia(cid:415)on of profit/(loss) a(cid:332)er income tax to net cash used in opera(cid:415)ng ac(cid:415)vi(cid:415)es
Profit/(loss) a(cid:332)er income tax benefit/(expense) for the year
Adjustments for:
Deprecia(cid:415)on and amor(cid:415)sa(cid:415)on
Share-based payments
Net loss/(gain) on disposal of non-current assets
Interest received - non-cash
Other expenses - non-cash
Change in opera(cid:415)ng assets and liabili(cid:415)es:
Increase in trade and other receivables
Increase in inventories
Increase in prepayments
Increase in trade and other payables
Decrease in deferred tax liabili(cid:415)es
Increase/(decrease) in employee benefits
Net cash used in opera(cid:415)ng ac(cid:415)vi(cid:415)es
Note 32. Changes in liabili(cid:415)es arising from financing ac(cid:415)vi(cid:415)es
Balance at 1 July 2017
Net cash used in financing ac(cid:415)vi(cid:415)es
Balance at 30 June 2018
Net cash used in financing ac(cid:415)vi(cid:415)es
Balance at 30 June 2019
56
2019
$
2018
$
(2,032,527)
1,001,869
212,767
-
27,621
-
6,250
194,171
41,480
(1,989,200)
(6,250)
-
(334,403)
(28,141)
(20,925)
639,250
(8,122)
(9,818)
(137,679)
(4,345)
-
11,869
(8,142)
3,882
(1,548,048)
(892,345)
Lease liability
$
Total
$
44,503
(12,565)
31,938
(31,938)
44,503
(12,565)
31,938
(31,938)
-
-
SciDev Ltd
REPORT 2019
ANNUAL
Note 33. Earnings per share
Profit/(loss) a(cid:332)er income tax a(cid:425)ributable to the owners of SciDev Limited
(2,032,527)
1,001,869
Numbers
Numbers
Weighted average number of ordinary shares used in calcula(cid:415)ng basic earnings per share
75,683,979
49,522,537
Weighted average number of ordinary shares used in calcula(cid:415)ng diluted earnings per share
75,683,979
49,522,537
2019
$
2018
$
Basic earnings per share
Diluted earnings per share
Cents
Cents
(2.69)
(2.69)
2.02
2.02
Op(cid:415)ons are considered to be poten(cid:415)al ordinary shares but were an(cid:415)-dilu(cid:415)ve in nature and therefore the diluted loss per share is the same as
the basic loss per share. These op(cid:415)ons could poten(cid:415)ally dilute basic earnings per share in the future.
The weighted average number of ordinary shares for 2018 has been restated for the effect of the share consolida(cid:415)on (10 to 1) completed in
December 2018, in accordance with AASB 133 'Earnings per share'.
Accoun(cid:415)ng policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit a(cid:425)ributable to the owners of SciDev 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 determina(cid:415)on of basic earnings per share to take into account the a(cid:332)er income tax
effect of interest and other financing costs associated with dilu(cid:415)ve poten(cid:415)al ordinary shares and the weighted average number of shares
assumed to have been issued for no considera(cid:415)on in rela(cid:415)on to dilu(cid:415)ve poten(cid:415)al ordinary shares.
Note 34. Share-based payments
Employee Share Scheme
Share based compensa(cid:415)on benefits are provided to employees via the SciDev Employee Share Scheme.
At the 2014 Annual General Mee(cid:415)ng, shareholders approved the SciDev Employee Share Scheme (the Scheme). All Directors, employees and
consultants are eligible to par(cid:415)cipate in the Scheme. Op(cid:415)ons granted under the Scheme to eligible par(cid:415)cipants are for no addi(cid:415)onal
considera(cid:415)on. Op(cid:415)ons are granted for a five-year period, and vest and are exercisable immediately, unless otherwise stated. Op(cid:415)ons granted
under the Scheme carry no dividend or vo(cid:415)ng rights. The gran(cid:415)ng of op(cid:415)ons is at the Board’s discre(cid:415)on and no individual has a contractual
right to receive op(cid:415)ons.
The fair value of op(cid:415)ons granted under the SciDev Employee Share Scheme is recognised as an employee benefit expense with a
corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees
become uncondi(cid:415)onally en(cid:415)tled to the op(cid:415)ons.
57
Notes to the financial statements
For the year ended 30 June 2019
Note 34. Share-based payments (cont..)
The fair value at grant date is determined using share op(cid:415)on valua(cid:415)on models that take into account the exercise price, the term of the op(cid:415)on,
the impact of dilu(cid:415)on, the share price at grant date, the expected price vola(cid:415)lity of the underlying share, the expected dividend yield and the risk
free interest rate for the term of the op(cid:415)on.
The fair value of the op(cid:415)ons granted is adjusted to reflect market ves(cid:415)ng condi(cid:415)ons, but excludes the impact of any non-market ves(cid:415)ng
condi(cid:415)ons (for example, profitability and sales growth targets). Non-market ves(cid:415)ng condi(cid:415)ons are included in assump(cid:415)ons about the number of
op(cid:415)ons that are expected to become exercisable. At each repor(cid:415)ng date, the en(cid:415)ty revises its es(cid:415)mate of the number of op(cid:415)ons that are
expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent es(cid:415)mate.
On 14 August 2017, the company issued 6.5 million unquoted op(cid:415)ons to execu(cid:415)ves and staff (not Directors). The op(cid:415)ons have an exercise price
of $0.025, vested on grant date and expire on 28 November 2019. The value of the op(cid:415)ons granted was $30,568.
There were no op(cid:415)ons granted under the scheme during the 2019 financial year.
Other share‐based payments
On 2 February 2017 the company granted 22,500,000 op(cid:415)ons to the Lead Manager and Underwriter for services rendered in connec(cid:415)on with the
placement of shares and the share purchase plan. The op(cid:415)ons have an exercise price of $0.025, vested on grant date and expire on 28 November
2019. The value of the op(cid:415)ons granted was $160,828.
On 28 December 2017, the company issued 5 million unquoted op(cid:415)ons to a key service provider (non-Director) for services rendered. The
op(cid:415)ons have an exercise price of $0.025, vested on grant date and expire on 28 November 2019. The value of the op(cid:415)ons granted was $10,912.
Set out below are summaries of op(cid:415)ons granted:
2019
Grant date
Expiry date
10/12/2014
02/02/2017
14/08/2017
28/12/2017
28/11/2019
28/11/2019
28/11/2019
28/11/2019
Exercise
Price*
Balance at
the start of
the year
$0.025
$0.025
$0.025
$0.025
5,500,000
22,500,000
6,500,000
5,000,000
39,500,000
Granted
Exercised
-
-
-
-
-
Expired/
forfeited/
other*
Balance at
the end of
the year
-
-
-
-
-
(4,950,000)
(20,250,000)
(5,850,000)
(4,500,000)
(35,550,000)
550,000
2,250,000
650,000
500,000
3,950,000
Weighted average exercise price
$0.025
$0.000
$0.000
$0.000
$0.025
* Included in expired/forfeited/other is the effect of the 10:1 share/op(cid:415)on consolida(cid:415)on that was completed on 4 December 2018. The op(cid:415)on
exercise price increased as a result of the 1:10 consolida(cid:415)on to $0.25.
58
SciDev Ltd
REPORT 2019
ANNUAL
Note 34. Share-based payments (cont..)
2018
Grant date
Expiry date
10/12/2014
02/02/2017
14/08/2017
28/12/2017
28/11/2019
28/11/2019
28/11/2019
28/11/2019
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
$0.025
$0.025
$0.025
$0.025
5,500,000
22,500,000
-
-
28,000,000
-
-
6,500,000
5,000,000
11,500,000
-
-
-
-
-
-
-
-
-
-
5,500,000
22,500,000
6,500,000
5,000,000
39,500,000
Weighted average exercise price *
$0.025
$0.025
$0.000
$0.000
$0.025
* The op(cid:415)on exercise price increased as a result of the 1:10 consolida(cid:415)on to $0.25.
Set out below are the op(cid:415)ons exercisable at the end of the financial year:
Grant date
Expiry date
10/12/2014
02/02/2017
14/08/2017
28/12/2017
28/11/2019
28/11/2019
28/11/2019
28/11/2019
2019
Number
2018
Number
550,000
2,250,000
650,000
500,000
5,500,000
22,500,000
6,500,000
5,000,000
3,950,000
39,500,000
The weighted average remaining contractual life of op(cid:415)ons outstanding at the end of the financial year was 0.41 years (2018: 1.41 years).
The fair value of op(cid:415)ons granted was measured using the Black-Scholes op(cid:415)on pricing model.
Accoun(cid:415)ng policy for share‐based payments
Equity-se(cid:425)led and cash-se(cid:425)led share-based compensa(cid:415)on benefits are provided to employees.
Equity-se(cid:425)led transac(cid:415)ons are awards of shares, or op(cid:415)ons over shares, that are provided to employees in exchange for the rendering of
services. Cash-se(cid:425)led transac(cid:415)ons are awards of cash for the exchange of services, where the amount of cash is determined by reference to
the share price.
59
Notes to the financial statements
For the year ended 30 June 2019
Note 34. Share-based payments (cont..)
The cost of equity-se(cid:425)led transac(cid:415)ons are measured at fair value on
grant date. Fair value is independently determined using either the
Binomial or Black-Scholes op(cid:415)on pricing model that takes into
account the exercise price, the term of the op(cid:415)on, the impact of
dilu(cid:415)on, the share price at grant date and expected price vola(cid:415)lity of
the underlying share, the expected dividend yield and the risk free
interest rate for the term of the op(cid:415)on, together with non-ves(cid:415)ng
condi(cid:415)ons that do not determine whether the consolidated en(cid:415)ty
receives the services that en(cid:415)tle the employees to receive payment.
No account is taken of any other ves(cid:415)ng condi(cid:415)ons.
The cost of equity-se(cid:425)led transac(cid:415)ons are recognised as an expense
with a corresponding increase in equity over the ves(cid:415)ng period. The
cumula(cid:415)ve charge to profit or loss is calculated based on the grant
date fair value of the award, the best es(cid:415)mate of the number of
awards that are likely to vest and the expired por(cid:415)on of the ves(cid:415)ng
period. The amount recognised in profit or loss for the period is the
cumula(cid:415)ve amount calculated at each repor(cid:415)ng date less amounts
already recognised in previous periods.
If the non-ves(cid:415)ng condi(cid:415)on is within the control of the consolidated
en(cid:415)ty or employee, the failure to sa(cid:415)sfy the condi(cid:415)on is treated as a
cancella(cid:415)on. If the condi(cid:415)on is not within the control of the
consolidated en(cid:415)ty or employee and is not sa(cid:415)sfied during the
ves(cid:415)ng period, any remaining expense for the award is recognised
over the remaining ves(cid:415)ng period, unless the award is forfeited.
If equity-se(cid:425)led awards are cancelled, it is treated as if it has vested
on the date of cancella(cid:415)on, and any remaining expense is recognised
immediately. If a new replacement award is subs(cid:415)tuted for the
cancelled award, the cancelled and new award is treated as if they
were a modifica(cid:415)on.
The cost of cash-se(cid:425)led transac(cid:415)ons is ini(cid:415)ally, and at each repor(cid:415)ng
date un(cid:415)l vested, determined by applying either the Binomial or
Black-Scholes op(cid:415)on pricing model, taking into considera(cid:415)on the
terms and condi(cid:415)ons on which the award was granted. The
cumula(cid:415)ve charge to profit or loss un(cid:415)l se(cid:425)lement of the liability is
calculated as follows:
during the ves(cid:415)ng period, the liability at each repor(cid:415)ng date
is the fair value of the award at that date mul(cid:415)plied by the
expired por(cid:415)on of the ves(cid:415)ng period.
from the end of the ves(cid:415)ng period un(cid:415)l se(cid:425)lement of the
award, the liability is the full fair value of the liability at the
repor(cid:415)ng date.
All changes in the liability are recognised in profit or loss. The
ul(cid:415)mate cost of cash-se(cid:425)led transac(cid:415)ons is the cash paid to se(cid:425)le
the liability.
Market condi(cid:415)ons are taken into considera(cid:415)on in determining fair
value. Therefore any awards subject to market condi(cid:415)ons are
considered to vest irrespec(cid:415)ve of whether or not that market
condi(cid:415)on has been met, provided all other condi(cid:415)ons are sa(cid:415)sfied.
If equity-se(cid:425)led awards are modified, as a minimum an expense is
recognised as if the modifica(cid:415)on has not been made. An addi(cid:415)onal
expense is recognised, over the remaining ves(cid:415)ng period, for any
modifica(cid:415)on that increases the total fair value of the share-based
compensa(cid:415)on benefit as at the date of modifica(cid:415)on.
60
SciDev Ltd
REPORT 2019
ANNUAL
Directors’ declara(cid:415)on
In the director’s opinion
the a(cid:425)ached financial statements and notes comply with the Corpora(cid:415)ons Act 2001, the Accoun(cid:415)ng Standards, the Corpora(cid:415)ons
Regula(cid:415)ons 2001 and other mandatory professional repor(cid:415)ng requirements;
the a(cid:425)ached financial statements and notes comply with Interna(cid:415)onal Financial Repor(cid:415)ng Standards as issued by the Interna(cid:415)onal
Accoun(cid:415)ng Standards Board as described in note 2 to the financial statements;
the a(cid:425)ached financial statements and notes give a true and fair view of the consolidated en(cid:415)ty's financial posi(cid:415)on as at 30 June 2019
and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
The directors have been given the declara(cid:415)ons required by sec(cid:415)on 295A of the Corpora(cid:415)ons Act 2001.
Signed in accordance with a resolu(cid:415)on of directors made pursuant to sec(cid:415)on 295(5)(a) of the Corpora(cid:415)ons Act 2001.
On behalf of the directors
___________________________
Lewis E U(cid:427)ng
Managing Director
27 September2019
Sydney
61
Independent Auditor’s Report
62
SciDev Ltd
REPORT 2019
ANNUAL
63
Independent Auditor’s Report con(cid:415)nued
64
SciDev Ltd
REPORT 2019
ANNUAL
65
Addi(cid:415)onal ASX Informa(cid:415)on
Shareholder Informa(cid:415)on
The shareholder informa(cid:415)on set out below was applicable as at 21 October 2019.
Distribu(cid:415)on of equity securi(cid:415)es
A.
Analysis of numbers of equity security holders by size of holding
1,001
5,001
10,001
100,001
-
and over
1,000
5,000
10,000
100,000
Class of equity security
Ordinary shares
Number of shareholders
371
220
180
392
146
1,309
Number of shares
94,784
618,734
1,481,975
14,087,108
109,530,556
125,813,157
B.
Substan(cid:415)al holders
Substan(cid:415)al shareholders as at 21 October 2019 are listed below:
Jianfeng Zhang and Yangmei hang
Perennial Value Management Limited
6.81%
5.25%
Equity security holders
The names of the twenty largest holders of quoted equity securi(cid:415)es as at 21 October 2018 are listed below:
Name
Na(cid:415)onal Nominees Limited
Jianfeng Zhang & Yangmei Zheng
Kanins Australia Pty Ltd
Mr Lewis U(cid:427)ng & Ms Helena Lehos
CS Fourth Nominees Pty Limited
Mr Kieran Gregory Rodgers Po Box R750
J P Morgan Nominees Australia Pty Limited
Brispot Nominees Pty Ltd
Merrill Lynch (Australia) Nominees Pty Limited
CS Third Nominees Pty Limited
Puntero Pty Ltd
Natjad & Associated Pty Ltd
Taycol Nominees Pty Ltd <211 A/C>
Nuoer Chemical Australia Pty Ltd
Mr Alan Conigrave
Ci(cid:415)corp Nominees Pty Limited
Mr Kieran Gregory Rodgers & Mrs Patricia Marie Rodgers
HSBC Custody Nominees (Australia) Limited
GP Securi(cid:415)es Pty Ltd
Australian Executor Trustees Limited
Total Securities of Top 20 Holdings
Total Ordinary Shares on Issue
66
Ordinary shares
Number held
Percentage of
issued shares
6,483,112
6,428,572
5,000,000
4,500,000
4,224,030
3,059,477
2,950,729
2,469,107
2,461,459
2,302,289
2,301,667
2,262,414
2,250,000
2,142,858
2,100,000
2,030,396
2,006,467
1,713,797
1,575,000
1,557,273
59,818,647
125,813,157
5.153%
5.110%
3.974%
3.577%
3.357%
2.432%
2.345%
1.963%
1.956%
1.830%
1.829%
1.798%
1.788%
1.703%
1.669%
1.614%
1.595%
1.362%
1.252%
1.238%
47.546%
100.00%
SciDev Ltd
REPORT 2019
ANNUAL
C.
Vo(cid:415)ng rights
The vo(cid:415)ng rights a(cid:425)aching to each class of equity securi(cid:415)es are set out below:
(a)
(b)
Ordinary shares
On a show of hands every member present at a mee(cid:415)ng in person or by proxy shall have one vote and upon a poll each share shall
have one vote.
Op(cid:415)ons
No vo(cid:415)ng rights.
D.
Summary of op(cid:415)ons issued
Op(cid:415)ons expiring 28 November 2019 with an exercise price of $0.25
1,400,000
7
No. of
Op(cid:415)ons
No. of
Holders
% Op(cid:415)ons
Issued
Op(cid:415)on holders with more than 20% of above class
Lewis U(cid:427)ng
Bre(cid:425) Salisbury
500,000
300,000
35.7%
21.4%
No. of
Op(cid:415)ons
No. of
Holders
% Op(cid:415)ons
Issued
Op(cid:415)ons expiring 23 July 2022 with an exercise price of $0.10
2,000,000
1
Op(cid:415)on holders with more than 20% of above class
Lewis U(cid:427)ng
2,000,000
100%
No. of
Op(cid:415)ons
No. of
Holders
% Op(cid:415)ons
Issued
Op(cid:415)ons expiring 23 July 2022 with an exercise price of $0.12
3,350,000
12
Op(cid:415)on holders with more than 20% of above class
NIL
67
Company Directory
Directors
Trevor A Jones - Chairman
Lewis E U(cid:427)ng - Managing Director
Simone Wa(cid:425) - Non-execu(cid:415)ve Director
Jon Gourlay - Non-execu(cid:415)ve Director
Company secretary
Heath L Roberts
No(cid:415)ce of annual general mee(cid:415)ng
The details of the 2019 annual general mee(cid:415)ng of SciDev Limited are:
Registered office
Principal place of business
Share register
Auditor
Northside Conference Centre
The Boardroom
Corner of Oxley St and Pole Lane
Crows Nest NSW 2065
11am on Thursday, 28 November 2019
C/-Boardroom Pty Limited
Level 12, Grosvenor Place
225 George Street, Sydney
NSW 2000
Phone: 1300 737 760
Unit 1
8 Turbo Road
Kings Park
NSW 2148
Phone: (02) 9622 5185
Boardroom Pty Limited
Level 12
225 George Street, Sydney
NSW 2000
Phone: 1300 737 760
Rothsay Chartered Accountants
Level
12 O'Connell Street
Sydney
NSW 2000
Stock exchange lis(cid:415)ng
SciDev Limited shares are listed on the Australian Securi(cid:415)es Exchange (ASX code: SDV), the Deutsche
Boerse (Code: INF) and as American Depository Receipts on the OTC
Markets (Code: ICLJY)
Website
www.scidev.com.au
Corporate governance statement
www.scidev.com.au/corporate-governance
68
69
70