Annual
Report
2021
Making water work harder
>80%
of our staff
are tertiary educated as scientists,
engineers and chemists
>20%
operational
efficiency generated
150
hours
of research per client to develop a bespoke
chemistry solution to meet our clients
specific requirements
12
new solutions
developed and commercialised by SciDev
since 2019 to specifically address a clients
unique environmental problem
1000
mega litres
of water treated generating
<150 tonnes of waste
10m
tonnes
of dry tailings treated preventing
>200 million litres of water passing
into tailings dams
2
SCIDEV LIMITEDANNUAL REPORT 2021
Contents
Chairman’s Letter
Managing Director & CEO’s Letter
Review of Operations
Sustainability
Directors Report
Remuneration Report
Auditor’s Independence Declaration
Statement of Profit and Loss
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flow
Notes to the Financial Statements
Director’s Declaration
Independent Auditor’s Report
Additional ASX Information
Corporate Directory
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Lewis Utting, our very capable CEO, has
surrounded himself with some exceptionally
skilled senior executives. When you combine this
expertise and energy, the potential market size
and increasing environmental issues associated
with water, I believe we have a great opportunity
to build a global environmental services company.
With considerable scope to expand our current
operational footprint across our four key verticals,
I look forward to being a part of the future
sustainable growth of the Company.
Yours sincerely,
Vaughan Busby
VAUGHAN BUSBY
Letter from the
Chairperson
Working closely with my fellow Board
members and the SciDev team, I am
confident that our environmentally
sustainable technologies and solutions
will continue to play an important role in
solving water problems on a global scale.
Dear Shareholder,
FY21 has been a pivotal year for the company with
revenues more than doubling to $42.5m and the
company posting an after-tax profit of $3.4m.
Credit for this excellent result must go to Lewis and
the management team as well as the outgoing
Chairman, Trevor Jones who retired at the end of
FY21 after 13 years in the role. Trevor has played a
crucial role in the Company’s development and I’d
like to take this opportunity, on behalf of the Board,
to thank him for his hard work.
It is an honour to join your Board as Chairman at
an exciting time in the Company’s development.
Over the last 12 months, SciDev has had impressive
growth securing major new contracts, expanding
its sales pipeline and strengthening its market
position through strategic acquisitions. The
Company is well positioned as an emerging
leader in the environmental solutions market
servicing water intensive industries. SciDev’s
environmental solutions allow our clients to
recycle and reuse water, reduce waste footprints,
minimise costs and improve operational
efficiencies to position the company for
sustainable and rapid global growth.
4
SCIDEV LIMITEDANNUAL REPORT 2021 Letter from the Managing Director
& Chief Executive Officer
The 2021 financial year was another
extremely successful period for SciDev as
we executed on our strategy to establish
our position as an emerging leader in the
environmental solutions market focused
on water intensive industries. SciDev
brings together world-class technology,
chemistry and application expertise
to solve pressing operational and
environmental issues for our clients.
Our core work for clients when dealing with liquid
wastes, is to develop bespoke solutions that
challenge the status quo and deliver cost savings
and operational efficiency improvements.
SciDev’s approach to tackling the global Per- and
poly-fluoralkyl substances (PFAS) problem delivers
greater than 99.9999% removal in a commercial
application, which is over 100 times greater than
the industry standard.
Our approach to dewatering tunnel boring waste
in construction delivers improved environmental
outcomes through the replacement of dangerous
materials with a SciDev chemistry, reducing
waste disposal costs and carbon footprint, while
improving productivity.
Our solutions are designed not only to provide
a commercial cost reduction but to provide
alternatives to petrochemical based
chemical solutions.
In FY21, our business continued to make
progress across all our verticals of Mining &
Mineral processing, Oil & Gas, Infrastructure &
Construction, and Water Treatment. Our client
base grew to over 70, we drove a 135% uplift in
revenue for the year, improved our gross profit
margin to 24% and pleasingly, delivered a net
profit after tax of $3.4m.
Reflecting on the year, I am proud that SciDev
progressed several Environmental, Social and
Governance (ESG) projects that were high on our
agenda. Most notably:
• The successful commercialisation of our plant-
based chemistries in the mining, oil & gas and
infrastructure sectors
• Our contribution to the Schools Plus program
which delivers science learning outcomes
to over 200 Indigenous students in the Great
Victorian Desert
• Appointing a new Auditor and executing on
board rejuvenation initiatives to provide a
strong platform for further growth
I would like to thank all our employees for their
immense efforts over the year, especially given
the past and current challenges being felt across
the world due to the COVID-19 pandemic.
I would also like to take this opportunity to thank
Trevor Jones for his time as Chair of SciDev. Trevor
announced his retirement this year as part of the
rejuvenation of SciDev’s board. Trevor has helped
lay strong foundations for the Company to realise
the benefits of new commercial relationships
and expand its global reach across our global
client base.
5
SCIDEV LIMITEDANNUAL REPORT 2021 Following Trevor’s departure, we recently
announced the appointment of Vaughan Busby
as independent Chair. Vaughan is a trained
chemist and has extensive experience as a
company director. We are delighted to have
someone of Vaughan’s calibre join the
SciDev Board.
OUR PEOPLE AND CULTURE
Our people are the key to our business and we
remain committed to attracting and retaining
the best talent at all levels. The health and safety
of our people remains the core priority for myself
and the Company. Pleasingly, we delivered
another year in FY21 of zero lost time injuries within
our workforce, with continued improvement
in safety-based led indicator reporting. Our
comprehensive Covid-19 Safe Workplace Policy
remained in place throughout the year, ensuring
updates were communicated regularly to
all employees.
Our team expanded during FY21 via the acquisition
of Haldon Industries. Haldon’s attitude and
style of doing business is strongly aligned with
SciDev’s approach and culture which has made
the integration of the business an extremely
positive experience for both parties. I would like
to welcome all the Haldon team and thank them
for their commitment to our ongoing success. The
Haldon Principals, Sean Halpin, and Jake Reardon
have joined our expanded executive team and will
play a pivotal role in our future success.
As I touched on earlier, SciDev had the opportunity
to reinvest and reconnect with the community
during the year. As a company we recognise the
importance of supporting different community
groups and have done so through partnerships,
sharing knowledge and skills, and financial
support. An important part of our community
engagement is to ensure all our employees drive
a culture of support and diversity through
our organistaion.
During the year, we started an initiative to
support disadvantaged students through the
Schools Plus program. SciDev has currently
pledged $60,000 in support of the cause which
will underpin the Schools Plus ‘Two Ways Science’
project. The project helps support remote
Indigenous schools and communities develop
and implement an integrated learning program.
The program connects cultural knowledge of
the local community with Western science and
the Australian education curriculum. We are
looking forward to assisting the Schools Plus
program further in FY22 and will hopefully have the
opportunity to visit the schools in person to see
the benefits SciDev has provided.
As part of our focus on diversity and inclusion, our
team came together in May to recognise the LGBTI
community as we celebrated International Day
Against Homophobia, Biphobia, and Transphobia,
as part of our efforts to combat discrimination
and embrace diversity.
80
70
60
50
40
30
20
10
0
18%
119%
135%
209%
2020
2021
2020
2021
2020
2021
2020
2021
Revenue ($m)
Customers
Employees
Organic Growth Revenue ($m)
6
SCIDEV LIMITEDANNUAL REPORT 2021 FY21 REVENUE BY VERTICAL
FY 21 REVENUE BY REGION
12%
16%
35%
36%
Water
Construction
Mining
Oil & Gas
8%
Other
42%
50%
North America
Australia
OUR COMPETITIVE ADVANTAGE
STRONG ORGANIC GROWTH
Over the course of FY21 we continued to expand
our businesses by securing key wins across
our four key verticals. We are well positioned to
continue to drive growth by offering our bespoke
chemistry and engineering solutions to our global
client base, helping deliver sustainable outcomes
for themselves and the environment. I am proud
of what the team at SciDev have achieved in this
period and look forward to the year ahead
with confidence.
Yours sincerely,
Lewis Utting
LEWIS UTTING
Our unique combination of world-class
technology, chemistry and application expertise
enables us to deliver site-specific solutions to
deliver better outcomes for our clients.
Over 80% of our employees are tertiary educated
as scientists, engineers, and chemists - greatly
aiding our business development process.
Our highly skilled team has the expertise to
specifically design site specific solutions to
solve the unique problems of our end clients. On
average, we invest over 150 hours of research per
client to develop a bespoke solution to meet their
specific requirements.
SciDev is results driven. Through on-site trials
and ongoing contract work we have established
a large database of quantitative results that
demonstrates our product drives >20% operational
plant process efficiency, reduces plant down time
and drives cost savings for our clients.
Our competitive advantage delivers
environmentally better outcomes for our clients
which will continue to position our company for
future growth.
7
SCIDEV LIMITEDANNUAL REPORT 2021 SciDev brings together
world-class technology,
chemistry and application expertise
to solve pressing operational and
environmental issues for the water,
oil and gas, mining and
construction markets
8
SCIDEV LIMITEDANNUAL REPORT 2021 Review of Operations
SciDev’s bespoke solutions focus on
reducing the production of wastewater
from industrial processes across a range
of industries. We deliver sustainable
chemistry, application and dosage
optimisation that reduce processing costs,
eliminate poor performance and reduce
wastewater production. Our services
can be utilised in a range of industries
including Mining & Mineral processing,
Oil & Gas, Infrastructure & Construction,
and Wastewater.
FY21 FINANCIAL HIGHLIGHTS
• Revenue from clients increased in FY21 by 135%
to $42.5m (FY20: $18m)
• Cash receipts for FY21 elevated to $41.8m
(FY20: $20m)
• Net cash position at 30 June of $7m with $3.7m
of inventory at hand
FY21 OPERATIONAL HIGHLIGHTS
• Strategic acquisition of Haldon Industries Pty Ltd
(Haldon), an Australian based environmental
engineering and solutions company focussed
on the water and persistent organic pollutant
sectors
• Agreement with Société Le Nickel (a subsidiary
of Eramet) to provide MaxiFlox® chemistry for
SLN’s New Caledonian nickel operations
• Field qualifications announced at Fortescue
Metal Group’s Solomon Hub
• Extension of the relationship with ExxonMobil via
purchase order for approximately US$0.5 million
of product and associated professional services
• The commencement of the BHP Olympic Dam
field validation project with a smooth transition
to SciDev’s MaxiFlox® technology
• Contract award to design, construct and
commission a Sequencing Batch Reactor
Leachate Treatment Plant for the $2.6 billion
Sydney Gateway Project
FINANCIAL REVIEW
The consolidated entity reported revenue of
$42.5m for the period, representing a 135% increase
on the prior year results of A$18m. SciDev’s record
revenue generation was achieved through
organic growth via contract wins across several
verticals. Contribution from the Haldon acquisition
was recognised from 12 May 2021 to the end of
the quarter.
Net profit of $3.4m was reported for the year with
net operating cash outflow of $1.3m.
The company maintained a strong gross profit
margin of 24% (FY20 17%) in line with the prior year.
The company has continued to invest for growth
and anticipates revenue growth to outpace
expenditure, driving improving margins in
coming years.
At the end of the period, the consolidated entity
had a net cash position of $7m, with $3.7m in
50
inventory at hand.
135%
m
$
40
30
20
10
0
9
521%
2019
2020
2021
SCIDEV LIMITEDANNUAL REPORT 2021 Review of Operations
During FY21, SciDev continued to
successfully execute on its strategy of
solving operational and environmental
issues relating to water across multiple
global industrial markets. Its unique
combination of proprietary research and
specialised manufacturing enabled it to
deliver site-specific products delivering
better outcomes for its clients.
SciDev
delivers bespoke
professional services,
engineering, and
chemistry solutions
MINING & MINERAL PROCESSING
SciDev continued to execute supply and services
into all major clients such as Iluka, Yancoal,
Glencore and Peabody. Business development
activities continue across several operations and
commodities such as coal, nickel, copper, gold
and iron ore. Several producers have confirmed
acceptance of our MaxiFlox® technology,
proceeding to field validation which we anticipate
will take place during FY22, with other projects now
in commercial discussion.
Post the end of the financial year, SciDev ceased
providing chemistry to BHP’s Olympic Dam
Operation. The initial six-month trial order was
successful and delivered improved operating
performance to the site. However, SciDev’s
inability to access the site due to travel restrictions
resulted in the team being unable to use its
technical expertise to differentiate the benefits
of its technology. Without this differentiation the
ongoing supply was essentially commoditised.
While SciDev received a request for proposal
from BHP, the pricing terms did not meet SciDev’s
internal value requirements so as a result Olympic
Dam remained with their incumbent supplier.
During the year, SciDev announced a trial order
from Fortescue Metals Group Limited (Fortescue),
one of the world’s leading producers of iron ore.
The trial was conducted at the Fortescue
Solomon Hub.
SciDev progressed through a competitive tender
process with the field qualification focussed on
the performance of MaxiFlox® chemistry under
plant operating conditions. The trial was run
successfully and at the end of FY21 the Company
remains in ongoing discussions with Fortescue to
progress to commercial considerations.
In March 2021, SciDev signed a contract with SLN
for supply of its MaxiFlox® chemistry. SLN is a
subsidiary of Eramet, which is the world’s number
one producer of ferronickel, a key raw material
input to the stainless steel market.
The project has passed through laboratory and
field qualifications and the Company’s MaxiFlox®
chemistry and OptiFlox® technology will be used
onsite to improve operational efficiency and
water use.
10
SCIDEV LIMITEDANNUAL REPORT 2021 to formulate a lightweight drilling fluid. The HFT
patented technology will be part of the infield
application at one of ExxonMobil’s
international projects.
HFT’s CatCheck® chemistry continued to be
utilised in commercial applications with a major
European exploration and production (E&P) client.
HFT are assessing the ability of CatCheck® to
enhance oil recovery from wells in the Eagle Ford
Shale Province. Initial trials have demonstrated
favourable results in different South Texan shale
formations and further testing is underway.
Activities in the Canadian oils ands industry are on
track with progress outcomes to be reported
in CY 2021.
OIL & GAS
SciDev is continuing to see activity levels
recover within the US Oil & Gas sector, driving
increased demand for our subsidiary Highland
Fluid Technology’s (HFT) chemistry and
professional services.
A purchase order from a major South Texas
E&P company for completion fluids has been
extended and HFT is seeing additional purchase
orders being placed from other existing clients.
HFT’s largest dry-polymer client has committed
to shift from commodity chemistry to SciDev
bespoke chemistry offerings, with increased sales
projections aligned with significantly increased
business in H1 CY2021.
A major European oil company has seconded
HFT staff to provide product development and
application support for new environmentally
friendly oilfield performance chemistry. Several
patent applications have been lodged with
commercial activities now under consideration.
Chemistry development initiatives with a major
American multinational oil & gas corporation
continue, with several HFT employees now
engaged with commercial discussions expected
to advance in early CY2021.
During the year HFT received a purchase order
from ExxonMobil for the provision of chemical
and professional services, further extending
the relationship between the companies. The
purchase order is an extension of work conducted
by HFT with ExxonMobil in 2020 and will see HFT
facilities and professional services contracted
11
SCIDEV LIMITEDANNUAL REPORT 2021 Review of Operations
INFRASTRUCTURE & CONSTRUCTION
WASTEWATER
SciDev completed its work with the CYP Design
and Construction Joint Venture (CYP D&C) in
the June quarter as planned. SciDev had been
providing chemistry and professional services
to the Tunnel Boring Machines (TBM’s) on the
Melbourne Metro Tunnel Project’s twin nine-
kilometre rail tunnels. SciDev has been delivering
MaxiDry® chemistry on site since May 2020, with
exceptional performance and results for the
operator. The successful project delivery from the
SciDev team opens opportunities within the tunnel
boring section of the infrastructure sector on a
global basis.
Several new project opportunities have been
progressed following the employment of an
expert in North America. Project discussions are
advancing with projects in California, Virginia and
British Columbia all focus areas for the Company.
Additional opportunities are also being actively
pursued in Europe and Asia.
The acquisition of Haldon provides SciDev scope
in the water treatment vertical and will deliver
strategic opportunities such as:
• Providing access to the growing per- and poly-
fluoroalkyl substance (PFAS) market in Australia
and the ability for SciDev to deliver a full
treatment solution to major infrastructure and
construction project water treatment and PFAS
remediation requirements
• Leveraging the complementary engineering,
technology and professional services skills
of both businesses to drive further business
development opportunities
• Diversification of SciDev’s revenue streams
in terms of geography, client base, supply
chain and end commodity exposure and the
opportunity to provide direct chemical sales to
Haldon clients
• Additional skilled personnel to provide a larger
talent pool and the ability to drive further
tailored solutions for end clients
Haldon’s revenue is generated through a
combination of lump sum, ongoing work and
specific bespoke projects. Haldon’s top ten clients
currently account for over 90% of revenue and
represent a mix of state and local government
bodies, both local and international mining and
construction companies. Key clients include
Alcoa of Australia, Ward Civil and Environmental,
Ventia, TestSafe NSW, John Holland, CPB, Remondis,
Narromine Shire Council, Samsung and Dragados.
The Company announced that it had been
awarded the contract to design, construct and
commission a Sequencing Batch Reactor (SBR)
Leachate Treatment Plant (LTP) for the $2.6 billion
Sydney Gateway Project. The project will be
delivered on behalf of the John Holland Seymour
Whyte Joint Venture, the NSW Government’s
delivery partner for the project. The SBR is an
activated sludge system focused on removing
pollutants from wastewater, allowing the safe
discharge and reuse of water. SciDev continues to
drive organic growth and development activities
in the Water sector, with several previously
disclosed opportunities currently progressing
at a reduced momentum because of Covid-19
sewerage testing.
12
SCIDEV LIMITEDANNUAL REPORT 2021 Our People are the key
to our business and
we are committed
to attracting and
retaining the
best talent
13
SCIDEV LIMITEDANNUAL REPORT 2021 Sustainability
SciDev drives efficiencies that deliver
sustainable outcomes for our clients, our
investors and our environment. We create
world-leading, customised solutions that
minimise water usage and help clients
across the water, oil and gas, mining
and construction markets improve their
environmental impact.
In 2015 the United Nations created 17 Sustainable
Development Goals (SDGs), also known as the
Global Goals, as a universal call to action for the
world to end poverty, protect the planet, and
ensure that by 2030 all people enjoy peace
and prosperity.
Sustainability
The 17 SDGs are integrated and recognise that
action in one of the areas will affect outcomes in
others, they include including poverty, inequality,
climate change, environmental degradation,
peace and justice.
for our clients, our investors and our environment. We create
usage and help clients across construction & infrastructure,
SciDev drives efficiencies that deliver sustainable outcomes
world-leading, customised solutions that minimise water
At SciDev we are adapting sustainability business
practices through our business.
As a company we are;
• Helping solve growing PFAS issues
• Reducing wastewater in the US Oilfields
• Supporting the communities in which we and
our customers operate
• Striving to build a culture where we
respect and embrace diversity in
the workplace, which extends
out to the wider community
At SciDev we are adapting sustainability business practices
thought our business and find it a great way to give back to
the environment!
mining & mineral processing, oil & gas, and water &
As a company we have;
wastewater management
improve
their environmental
impact.
In 2015 the United Nations created 17 Sustainable Development
Goals (SDGs), also known as the Global Goals, as a universal
call to action for the world to end poverty, protect the planet,
and ensure that by 2030 all people enjoy peace and
prosperity.
•
•
•
•
•
•
Helped solve growing PFAS issues
Reduce wastewater in the US Oilfields
Schools Plus “Two Ways Science” project
Respecting & embracing diversity in the in the workplace,
which extends out to the wider community..
Innovation example
Reduced inequalities example
The 17 SDGs are integrated and recognise that action in one of
Below highlights some of the goals impacted by our efforts;
the areas will affect outcomes in others, they include including
poverty,
inequality,
climate change,
environmental
degradation, peace and justice.
14
SCIDEV LIMITEDANNUAL REPORT 2021
.
.
Helping solve the growing PFAS issue
The combination of SDV and Haldon technology can reduced
waste water by over
10 times more than competitor
technology, providing a
low cost, more environmentally
friendly solution to PFAS treatment.
Per- and polyfluoroalkyl substances (PFAS) are a group of
Helping solve the growing PFAS issue
man-made chemicals that have been used in a variety of
The combination of SDV and Haldon technology can reduced
Reducing wastewater in the US Oilfields
waste water by over
10 times more than competitor
industries since the 1940s. PFAS chemicals are very persistent
technology, providing a
low cost, more environmentally
in the environment and concentration levels increase over
friendly solution to PFAS treatment.
SciDev’s R&D program is focused on reducing the amount of
Reducing wastewater in the US Oilfields
REDUCING WASTEWATER IN THE US OILFIELDS
wastewater generated across the key verticals we operate in.
SciDev’s R&D program is focused on reducing
Recycling water is at the core of our R&D efforts, minimising
the amount of wastewater generated across
the consumption of fresh water in industrial applications.
the key verticals we operate in. Recycling water
SciDev’s US subsidiary Highland Fluid Technologies (HFT)
is at the core of our R&D efforts, minimising
the consumption of fresh water in industrial
continues to actively work with global leaders in the oilfields
applications.
services sector
SciDev’s R&D program is focused on reducing the amount of
wastewater generated across the key verticals we operate in.
focused on developing new drilling
Recycling water is at the core of our R&D efforts, minimising
services sector
SciDev’s US subsidiary Highland Fluid Technologies (HFT)
continues to actively work with global leaders in the oilfields
the consumption of fresh water in industrial applications.
chemistries. The oil and gas sector produces over 5 barrels of
SciDev’s US subsidiary Highland Fluid Technologies
wastewater for every barrel of oil produced. Developing as
(HFT) continues to actively work with global
range of drilling technologies that perform efficiently in saline
leaders in the oilfields services sector focused on
developing new drilling chemistries. The oil and
water will increase the amount of water that can be recycled,
gas sector produces over 5 barrels of wastewater
reducing water waste and minimising the freshwater footprint
for every barrel of oil produced. Developing
of companies.
a range of drilling technologies that perform
HFT friction reducers have energy by reducing friction
efficiently in saline water will increase the amount
pressure when pumping fluids in the oilfield. Reducing friction
of water that can be recycled, reducing water
reduces the energy needed to move fluids and that cuts the
waste and minimising the freshwater footprint
of our clients.
amount of fuel used and cuts emissions to
chemistries. The oil and gas sector produces over 5 barrels of
range of drilling technologies that perform efficiently in saline
wastewater for every barrel of oil produced. Developing as
water will increase the amount of water that can be recycled,
reducing water waste and minimising the freshwater footprint
focused on developing new drilling
lower the
of companies.
HFT friction reducers have energy by reducing friction
environmental impact. HFT Friction Reducers are based on
Reducing friction minimises the energy needed
fast-hydrating, ATBS copolymers that work in harsh oilfield(s)
to move fluids, cutting the amount of fuel used
waters and are available in dry and liquid blended slurries.
and reducing emissions to lower the
environmental impact.
CarrySlik Liquid Friction Reducers are a customised chemistry
reduces the energy needed to move fluids and that cuts the
pressure when pumping fluids in the oilfield. Reducing friction
amount of fuel used and cuts emissions to
lower the
with high molecular weight and high activity products that
environmental impact. HFT Friction Reducers are based on
fast-hydrating, ATBS copolymers that work in harsh oilfield(s)
CarrySlik Liquid Friction Reducers are a customised chemistry
develop viscosity to improve proppant transport.
with high molecular weight and high activity products that
Our DrySlik Dry Friction Reducers
allow oil and gas companies
develop viscosity to improve proppant transport.
to recycle oilfield water
waters and are available in dry and liquid blended slurries.
Our DrySlik Dry Friction Reducers allow oil and gas companies
turning a waste
to recycle oilfield turning a waste disposal problem into a
disposal problem into
beneficial use. Recycling oilfield waters lowers cost, reduces
a beneficial use.
truck traffic, improves HSE with less environmental impact.
Recycling oilfield
waters lowers
cost, reduces
truck traffic,
and improves
HSE with less
environmental
impact.
truck traffic, improves HSE with less environmental impact.
Our DrySlik Dry Friction Reducers allow oil and gas companies
beneficial use. Recycling oilfield waters lowers cost, reduces
to recycle oilfield turning a waste disposal problem into a
time, causing environmental and health risks across a range
of industrial sites.
Per- and polyfluoroalkyl substances (PFAS) are a group of
HELPING SOLVE THE GROWING PFAS ISSUE
man-made chemicals that have been used in a variety of
Per- and poly-fluoralkyl substances (PFAS) are
industries since the 1940s. PFAS chemicals are very persistent
a group of man-made chemicals that have
in the environment and concentration levels increase over
commercialised a robust PFAS treatment strategy that
developed,
designed,
executed
Haldon
and
has
considers several variables and outcomes in its application
been used in a variety of industries since
the 1940s. PFAS chemicals are very
allowing PFAS removal to levels that are below those that can
time, causing environmental and health risks across a range
of industrial sites.
be achieved using conventional techniques. The strategy is
persistent in the environment and
Haldon
has
centred around Haldon having a mobile licence to treat PFAS
and
commercialised a robust PFAS treatment strategy that
using the utilisation of various ion exchange and absorptive
considers several variables and outcomes in its application
techniques in a sequence tailored to each project’s unique
concentration levels increase over
executed
developed,
designed,
time, causing environmental
and health risks across a
range of industrial sites.
allowing PFAS removal to levels that are below those that can
characteristics and treatment objectives.
Haldon plants
be achieved using conventional techniques. The strategy is
received the first EPA licenses for mobile PFAS treatment in
centred around Haldon having a mobile licence to treat PFAS
NSW & WA providing the opportunity to roll out their solutions
using the utilisation of various ion exchange and absorptive
in those regions.
techniques in a sequence tailored to each project’s unique
The combination of SciDev and Haldon technology delivers a
characteristics and treatment objectives.
Haldon plants
significantly improved outcome for customer with PFAS issues.
received the first EPA licenses for mobile PFAS treatment in
Haldon’s PFAS technology works better with water with low
NSW & WA providing the opportunity to roll out their solutions
solid levels and the utilisation of SDV’s Maxiflox Chemistry
in those regions.
separates the solid matter and provides a clean feed liquid to
SciDev Water Services
has designed, developed,
executed and
commercialised a robust
PFAS treatment strategy
that considers several
variables and outcomes
in its application allowing
PFAS removal to levels
that are below those that
can be achieved using
conventional techniques.
The combination of SciDev and Haldon technology delivers a
the Haldon process.
significantly improved outcome for customer with PFAS issues.
Haldon’s PFAS technology works better with water with low
solid levels and the utilisation of SDV’s Maxiflox Chemistry
The strategy is centered
separates the solid matter and provides a clean feed liquid to
around the Company having
the Haldon process.
a mobile licence to treat PFAS
using the utilisation of various
ion exchange and absorptive
techniques in a sequence tailored to
each project’s unique characteristics and
treatment objectives. Our plants received the
first EPA licenses for mobile PFAS treatment in NSW
& WA providing the opportunity to roll out their
solutions in those regions.
Our PFAS technology works better with water
with low solid levels and the utilisation of SDV’s
Maxiflox Chemistry separates the solid matter and
provides a clean feed liquid to the Haldon process.
Our technology can reduce waste water by over
100 times more than competitor technology,
providing a low cost, more environmentally
friendly solution to PFAS treatment.
15
SCIDEV LIMITEDANNUAL REPORT 2021
Schools Plus “Two way Science” project
Innovation example
SciDev’s unique combination of proprietary research and
specialised manufacturing enables us to deliver site-specific
products delivering better outcomes for our customers. Over
80% of our staff are are tertiary educated as scientists,
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
Maecenas porttitor congue massa. Fusce posuere, magna sed
pulvinar ultricies, purus lectus malesuada libero, sit amet
commodo magna eros quis urna.
engineers and chemists. We recognise the importance of
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
education, especially amongst children and that is why SciDev
Maecenas porttitor congue massa. Fusce posuere, magna sed
are proud to support the Australian national education charity
pulvinar ultricies, purus lectus malesuada libero, sit amet
Schools Plus.
commodo magna eros quis urna.
SciDev partner with Schools Plus in the delivery of funding to
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
assist disadvantaged communities
improve
learning
Maecenas porttitor congue massa. Fusce posuere, magna sed
outcomes for their students. Since inception, Schools Plus has
pulvinar ultricies, purus lectus malesuada libero, sit amet
added more than $17.8 million into Australia’s school system,
commodo magna eros quis urna.
supporting over 758 schools, over 620 projects and benefiting
183,000 students.
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
Maecenas porttitor congue massa. Fusce posuere, magna sed
SciDev has provided financial support to underpin the ‘Two
pulvinar ultricies, purus lectus malesuada libero, sit amet
Ways Science Programme’ at the Oak Valley Cluster of Schools
commodo magna eros quis urna.
(Amata Anangu, Amata, Tjuntjuntjara, Great Victorian Desert,
Yalata Anangu and Yalata). It is estimated that the project will
Water Example
Sustainability
Schools Plus “Two way Science” project
directly benefit 204 students, 67 teachers and 84 community
members as the program aims to support the community in
building cultural identity, teach science, reinforce literacy and
numeracy skills and incorporate technology throughout the
2021 school year.
Innovation example
Respecting & embracing diversity
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
Maecenas porttitor congue massa. Fusce posuere, magna sed
pulvinar ultricies, purus lectus malesuada libero, sit amet
commodo magna eros quis urna.
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
Maecenas porttitor congue massa. Fusce posuere, magna sed
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
pulvinar ultricies, purus lectus malesuada libero, sit amet
Maecenas porttitor congue massa. Fusce posuere, magna sed
commodo magna eros quis urna.
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
Maecenas porttitor congue massa. Fusce posuere, magna sed
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
pulvinar ultricies, purus lectus malesuada libero, sit amet
Maecenas porttitor congue massa. Fusce posuere, magna sed
commodo magna eros quis urna.
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
pulvinar ultricies, purus lectus malesuada libero, sit amet
Maecenas porttitor congue massa. Fusce posuere, magna sed
commodo magna eros quis urna.
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
Maecenas porttitor congue massa. Fusce posuere, magna sed
pulvinar ultricies, purus lectus malesuada libero, sit amet
SciDev’s unique combination of proprietary research and
SCHOOLS PLUS “TWO WAY SCIENCE” PROJECT
specialised manufacturing enables us to deliver site-specific
SciDev partner with Schools Plus in the delivery
products delivering better outcomes for our customers. Over
of funding to assist disadvantaged communities
80% of our staff are are tertiary educated as scientists,
improve learning outcomes for their students.
engineers and chemists. We recognise the importance of
Since inception, Schools Plus has added more
than $17.8 million into Australia’s school system,
education, especially amongst children and that is why SciDev
supporting over 758 schools, over 620 projects
are proud to support the Australian national education charity
and benefiting 183,000 students.
Schools Plus.
learning
improve
SciDev has provided financial support to underpin
SciDev partner with Schools Plus in the delivery of funding to
the ‘Two Ways Science Programme’ at the
assist disadvantaged communities
Oak Valley Cluster of Schools (Amata Anangu,
outcomes for their students. Since inception, Schools Plus has
Amata, Tjuntjuntjara, Great Victorian Desert,
Yalata Anangu and Yalata). It is estimated that
added more than $17.8 million into Australia’s school system,
the project will directly benefit 204 students, 67
supporting over 758 schools, over 620 projects and benefiting
teachers and 84 community members as the
183,000 students.
program aims to support the community in
building cultural identity, teach science, reinforce
SciDev has provided financial support to underpin the ‘Two
literacy and numeracy skills and incorporate
Ways Science Programme’ at the Oak Valley Cluster of Schools
technology throughout the 2021 school year.
(Amata Anangu, Amata, Tjuntjuntjara, Great Victorian Desert,
Diversity in the workplace mirrors the diversity of the broader
RESPECTING & EMBRACING DIVERSITY
community, encompassing age, gender, ethnicity, cultural and
Diversity in the workplace mirrors the diversity
other personal factors. SciDev respects the diversity of all
commodo magna eros quis urna.
of the broader community, encompassing age,
employees, consultants and contractors and cultivates an
gender, ethnicity, cultural and other personal
environment of fairness, respect and equal opportunity.
factors. SciDev respects the diversity of all
employees, consultants and contractors and
SciDev believes that the pursuit of diversity in the workplace
cultivates an environment of fairness, respect and
increases the pool of talent available, enhances individual
equal opportunity. SciDev believes that the pursuit
commodo magna eros quis urna.
work-life balance, encourages personal achievement,
of diversity in the workplace increases the pool
improves co-operation and assists in the optimisation of
of talent available, enhances individual work-life
organisational performance.
balance, encourages personal achievement,
improves co-operation and assists in the
During the year we supported the International Day Against
optimisation of organisational performance.
commodo magna eros quis urna.
Homophobia, Biphobia and Transphobia (IDAHOBIT). IDAHOBIT
During the year we supported the International
Day was started in 2004 to raise awareness of LBGT violations
Day Against Homophobia, Biphobia and
and stimulate interest in LGBT rights work worldwide.
Transphobia (IDAHOBIT). IDAHOBIT Day was started
in 2004 to raise awareness of LBGT violations and
stimulate interest in LGBT rights work worldwide.
commodo magna eros quis urna.
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
Maecenas porttitor congue massa. Fusce posuere, magna sed
pulvinar ultricies, purus lectus malesuada libero, sit amet
pulvinar ultricies, purus lectus malesuada libero, sit amet
pulvinar ultricies, purus lectus malesuada libero, sit amet
Yalata Anangu and Yalata). It is estimated that the project will
Water Example
directly benefit 204 students, 67 teachers and 84 community
members as the program aims to support the community in
building cultural identity, teach science, reinforce literacy and
numeracy skills and incorporate technology throughout the
2021 school year.
Respecting & embracing diversity
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
Maecenas porttitor congue massa. Fusce posuere, magna sed
pulvinar ultricies, purus lectus malesuada libero, sit amet
commodo magna eros quis urna.
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
Maecenas porttitor congue massa. Fusce posuere, magna sed
pulvinar ultricies, purus lectus malesuada libero, sit amet
Diversity in the workplace mirrors the diversity of the broader
commodo magna eros quis urna.
community, encompassing age, gender, ethnicity, cultural and
other personal factors. SciDev respects the diversity of all
employees, consultants and contractors and cultivates an
environment of fairness, respect and equal opportunity.
SciDev believes that the pursuit of diversity in the workplace
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
Maecenas porttitor congue massa. Fusce posuere, magna sed
pulvinar ultricies, purus lectus malesuada libero, sit amet
commodo magna eros quis urna.
increases the pool of talent available, enhances individual
Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
work-life balance, encourages personal achievement,
Maecenas porttitor congue massa. Fusce posuere, magna sed
improves co-operation and assists in the optimisation of
pulvinar ultricies, purus lectus malesuada libero, sit amet
organisational performance.
commodo magna eros quis urna.
During the year we supported the International Day Against
Homophobia, Biphobia and Transphobia (IDAHOBIT). IDAHOBIT
Day was started in 2004 to raise awareness of LBGT violations
16
and stimulate interest in LGBT rights work worldwide.
SCIDEV LIMITEDANNUAL REPORT 2021
Directors Report
The directors present their report, together
with the financial statements, on the
consolidated entity (referred to hereafter
as the ‘consolidated entity’) consisting
of SciDev Limited (referred to hereafter
as the ‘company’ or ‘parent entity’) and
the entities it controlled at the end of, or
during, the year ended 30 June 2021.
DIRECTORS
The following persons were directors of SciDev
Limited during the whole of the financial year,
except where noted below, and up to the date of
this report:
• Vaughan Busby
(appointed a Director and
Non-executive Chairman on 9 August 2021)
• Lewis E Utting
• Simone Watt
• Jon Gourlay
• Dan O’Toole
(appointed a Director on 3 February 2021 and
Acting Chairman from 30 June 2021 to
9 August 2021)
• Trevor A Jones
(former Chairman - resigned 30 June 2021)
PRINCIPAL ACTIVITIES
The principal activity of the consolidated entity is
delivery of process control, professional services,
equipment design and construction (including
build, own operate services) and chemistry in
the Mining and Mineral Processing, Infrastructure
and Construction, Water Treatment and Oil &
Gas markets.
DIVIDENDS
There were no dividends paid, recommended
or declared during the current or previous
financial year.
REVIEW OF OPERATIONS
The Review of Operations can be found on pages
9—12 of this report.
INFORMATION ON DIRECTORS
Vaughan Busby (B.Pharm, MBA)
Non-executive Chairman (appointed 9 August 2021)
Mr Busby trained as a chemist and has extensive
experience as a company director, having sat
on a number of private and ASX listed boards
over the last 15 years. He currently serves as a
non-executive director for Energy Queensland
Limited, a government-owned corporation and
the largest energy company in Australia. He is
also a non-executive director for EnergyOne
(ASX:EOL), a company providing specialist software
to the energy industry and Netlogix Group
Holdings Limited, a New Zealand based company
specialising in supply chain logistics.
Other current directorships: Non-executive
Director of Energy One Limited (from listing on ASX
on 12 January 2007 to present)
Former directorships (last 3 years): None
Special responsibilities: Chairman
Interests in shares: Nil
Interests in options: Nil
Lewis Utting (BASc)
Managing Director and Chief Executive Officer
Mr Utting joined SciDev in March 2018 then the
Board in October 2018 as Executive Director and
was later appointed Managing Director and Chief
Executive Officer in early 2019. In this time he has
driven the transformation of SciDev growing
revenues and profits with a focus on common
industry challenges across several sectors and
leveraging adjacent supply chain synergies.
Mr Utting has over 20 years’ experience in Asia,
North America, South America, Middle east and
Africa across the water treatment and specialty
chemicals sectors. Mr Utting has authored and co-
authored numerous technical papers and holds
several patent applications. He holds a degree in
Applied Science and is a member of the Australian
Institute of Company Directors.
Other current directorships: None
Former directorships (last 3 years): None
Special responsibilities: Managing Director
Interests in shares: 5,448,129
Interests in options: 800,000
17
SCIDEV LIMITEDANNUAL REPORT 2021 Directors Report
Simone Watt (BASc)
Non-executive Director
Ms Watt is the Managing Director of Sinoz
Chemical and Commodities (Sinoz), which is
a global company supplying reagents and
technology-based improvements to the mining
and agribusiness industries. Ms Watts is also
a Director of Kemtec Mineral Processing and
Kanins International, 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 marketing.
Other current directorships: None
Former directorships (last 3 years): None
Special responsibilities: Member of the Audit
and Risk Committee and the Nomination and
Remuneration Committee
Interests in shares: 5,063,280
Interests in options: 250,000
Jon Gourlay (BCom, C.A, GAICD)
Non-executive Director
Mr Gourlay is a chartered accountant with
extensive experience in finance and project
management, risk management, business
improvement and investor relations, with a
focus on the resources and technology sectors.
Mr Gourlay has held senior management roles
including most recently, Commercialisation
Manager, Technology and Innovation for
Newcrest Mining, with prior roles in investor
relations, analysis and improvement of Newcrest’s
operations at the Lihir Island Gold Mine in Papua
New Guinea.
Other current directorships: None
Former directorships (last 3 years): None
Dan O’Toole (BEng(Hons), EngExec, FlEAust,
MAusIMM, MAICD)
Non-executive Director (appointed 3 February 2021)
Mr O’Toole brings over 35 years of experience
across the engineering and consulting sectors
including over 18 years in executive leadership
roles within Coffey International Limited and
pitt&sherry. Mr O’Toole is currently the Chairman
of Viotel Limited, a private company focussed on
empowering mining, transport and infrastructure
businesses to better mitigate risks using world-
class monitoring technology. Prior to his current
position, Mr O’Toole was the Chief Executive Officer
of pitt&sherry, one of Australia’s most dynamic
consulting engineering companies with a team of
high-calibre professional consultants servicing the
Transport Infrastructure, Mining, Energy, Industrial,
and Tourism & Recreation market sectors.
Other current directorships: None
Former directorships (last 3 years): None
Special responsibilities: Member of the Audit
and Risk Committee and the Nomination and
Remuneration Committee and Acting Chairman
from 30 June 2021 to 9 August 2021
Interests in shares: Nil
Interests in options: Nil
Trevor A Jones (B.Comm (Melb))
Chairman (resigned 30 June 2021)
Mr Jones has spent over 30 years working in the
finance industry in Australia, United Kingdom
and the USA. During this time, he has held
senior executive positions in investment funds
management, stockbroking and corporate
finance, and gained a broad experience of capital
structuring and capital raising, particularly in
the mining sector. He was appointed as a Non-
executive Director of SciDev on 28 February 2007.
Special responsibilities: Chairman of the Audit and
Risk Committee and member of the Nomination
and Remuneration Committee
Other current directorships: None
Former directorships (last 3 years): None
Interests in shares: 954,628
Interests in options: Nil
Special responsibilities: Chairman of the
Corporate Governance Committee, a member of
the Audit and Risk Committee, and Chairman of
the Nomination and Remuneration Committee
Interests in shares: 1,202,500*
Interests in options: Nil
18
SCIDEV LIMITEDANNUAL REPORT 2021 MEETING OF DIRECTORS
The number of meetings of the company’s Board
of Directors (‘the Board’) and of each Board
committee held during the year ended 30 June
2021, and the number of meetings attended by
each director shown in Table 1 below
Held represents the number of meetings held
during the time the director held office or was a
member of the relevant committee..
* Trevor Jones resigned on 30 June 2021.
** Dan O’Toole was appointed on 3 February 2021.
In addition to the Board and Committee meetings
outlined above, during the year an additional 6
Board circular resolutions were passed.
‘Other current directorships’ quoted above are
current directorships for listed entities only and
excludes directorships of all other types of entities,
unless otherwise stated.
‘Former directorships (last 3 years)’ quoted above
are directorships held in the last 3 years for listed
entities only and excludes directorships of all other
types of entities, unless otherwise stated.
* Interests in the shares and options of the
company as at the date of resignation as a
director.
COMPANY SECRETARY
Mr Heath L Roberts (Dip Law (S.A.B.) and Grad Dip Legal
Practice (UTS))
Mr Roberts is a commercial solicitor with over 20
years of listed company experience. He has acted
for SciDev in various capacities over the years
and brings strong transactional, compliance and
capital raising experience to the role.
Figure 1
MEETINGS OF DIRECTORS
Full
Board
Nomination & Rumuneration
Committee
Audit & Risk
Committee
Attended
Held
Attended
Held
Attended
Held
Trevor A Jones*
Lewis Utting
Simone Watt
Jon Gourlay
Dan O’Toole**
9
9
9
9
7
9
9
9
9
7
6
-
6
6
3
5
-
5
5
3
5
-
5
5
3
6
-
6
6
3
19
SCIDEV LIMITEDANNUAL REPORT 2021 Remuneration Report (audited)
The remuneration report details the key
management personnel remuneration
arrangements for the consolidated entity,
in accordance with the requirements of
the Corporations Act 2001 and
its Regulations.
Key management personnel are those persons
having authority and responsibility for planning,
directing and controlling the activities of the entity,
directly or indirectly, including all directors. This
includes key leaders of the Company’s operating
subsidiaries in Australia and overseas.
The remuneration report is set out under the
following main headings:
Principles used to determine the nature and
amount of remuneration
• Details of remuneration
• Service agreements
• Share-based compensation
• Additional information
• Additional disclosures relating to key
management personnel
Principles used to determine the nature and
amount of remuneration.
The objective of the consolidated entity’s
executive reward framework is to ensure reward
for performance is competitive and appropriate
for the results delivered. The framework aligns
executive reward with the achievement of
strategic objectives of the consolidated entity
and the creation of value for shareholders, and
it is considered to conform to the market best
practice for the delivery of reward. The Board
of Directors (‘the Board’) ensures that executive
reward satisfies the following key criteria for good
reward governance practices:
• competitiveness and reasonableness;
• acceptability to shareholders;
• performance linkage / alignment of executive
compensation to business success;
• transparency; and
• alignment with proper capital management.
The Group has structured an executive
remuneration framework that is market
competitive. The framework provides for a mix of
fixed base pay and also variable pay that includes
20
both short and long term incentives, with an
appropriate balance of at-risk remuneration.
The Company’s Annual Remuneration review
was carried out in August 2020. This review
establishing strata grades within the Company,
and allocations for fixed remuneration, short-
term incentive (STI) and long term incentive (LTI)
applicable to each strata grade. The percentage
allocations between fixed remuneration, STI and
LTI varies between the strata grades, with an
emphasis on higher at-risk STI and LTI elements
for more senior executives. A relationship between
Company performance and remuneration has
been developed and implemented, with the STI
or LTI component of remuneration delivered on a
performance-linked basis, as either.
• Equity issues to executives, with performance
conditions based on financial performance,
share price performance and duration of
employment milestones, and
• In some cases cash bonuses, which are also
financial performance linked
• providing a clear structure for earning rewards
This approach provides a clear structure for
earning rewards.
The Board has a Nomination and Remuneration
Committee which provides advice on
remuneration and incentive policies and
practices and makes specific recommendations
on remuneration packages and other terms of
employment for the Managing Director and Chief
Executive Officer, the Non-Executive Directors and
other senior executives.
During the year, the Company commenced an
active Board rejuvenation program, recognising
the need to ensure that the Board’s skillset and
governance structure remains fit for purpose
reflective of SciDev’s growth aspirations. As part
of the Board rejuvenation process, the Board
appointed an independent, external governance
advisory group to conduct a comprehensive
review of the Company’s Board and Committee
structures and memberships and performance of
the Chairman and Directors.
The Board and Governance Review process,
conducted by Guerdon and Associates, has
provided useful insight into the Company’s Board
and Governance mechanisms. Constructive
initiatives have been identified that, over time, will
SCIDEV LIMITEDANNUAL REPORT 2021 be implemented to ensure SciDev’s governance
structure remains fit for purpose relative to its
growth aspirations.
NON-EXECUTIVE DIRECTORS REMUNERATION
Fees and payments to the Non-executive
Directors reflect the demands which are made
on, and the responsibilities of, the Non–executive
Directors. The Board undertakes a review of Non-
executive Directors’ fees and payments annually.
The independent review process described
above will guide Non-executive Director roles and
responsibilities moving forward.
Separate from the Board rejuvenation process
outlined above, during H1FY2021 the Board
commissioned an independent, external review
of Non-executive Directors remuneration levels by
Guerdon Associates. The outcomes of the review
process has validated that the fees paid to
Non-executive Directors are below the median
for peer companies.
Non-executive Directors’ fees are determined
within an aggregate Non-executive Directors’
cash remuneration limit, which is periodically
recommended for approval by shareholders.
The current limit of A$400,000 was approved
by shareholders at the Company’s 2007 Annual
General Meeting held on 14 November 2007. The
amount paid to Non-executive Directors of the
parent entity (SciDev Limited) during the year to 30
June 2021 was $231,032 (2020: $204,562). In addition,
Non-executive Directors are entitled to participate
in issues of securities pursuant to the SciDev
Employee Share Scheme (the SciDev ESS). The
value of any securities granted to Non-executive
Directors are not included in the aggregate
cash remuneration limit as they are not cash-
based payments. In the case where Directors
seek equity-based remuneration over cash-
based remuneration, consideration will be given
to such request and, in any case, shareholder
approval would be required for any such equity-
based remuneration for Directors. During the 2021
financial year the Company granted no securities
to Non-executive Directors.
EXECUTIVE REMUNERATION
SciDev’s executive pay and reward framework
has three primary components, which together
comprise the executive’s total remuneration:
• base pay, superannuation and ‘standard’ non-
monetary benefits such as sick leave, annual
leave etc;
• short term incentives through individually
negotiated, performance milestoned cash
payments; and
• long term incentives through participation in the
SciDev ESS.
The combination of these comprises the
executive’s total remuneration. The three elements
described above are tailored to reflect fair reward
for the individual executives’ contribution and
whilst some executives receive a component of all
three elements, other executives do not.
(I) BASE PAY
Base pay is generally structured as a total
employment cost package, which may be
delivered as a combination of cash and
prescribed non-financial benefits as negotiated
between the Company and the executive.
Executives are offered a competitive base pay
that comprises a fixed component of cash salary,
superannuation and standard non-monetary
benefits as described above. Base pay for each
senior executive is reviewed annually to ensure
the executive’s pay is competitive with the market.
There is no guaranteed base pay increase
included in any executive’s contract.
(II) SHORT-TERM INCENTIVES
Managing Director & Chief Executive Officer
The Managing Director was eligible for a short-
term incentive (STI) cash bonus payment of up
to $200,000 based on the achievement of KPIs
determined by the Nomination and Remuneration
Committee for the calendar year ended 31
December 2020. The aim of the STI is to link the
achievement of the company’s annual and/or
immediate financial and broader operational
targets with the remuneration received by the
Managing Director & Chief Executive Officer.
21
SCIDEV LIMITEDANNUAL REPORT 2021 Remuneration Report (audited)
Use of remuneration consultants
The company utilised remuneration consultants
through the year ended 30 June 2021 as set
out above.
Remuneration voting and comments at the
company’s 10 November 2020 Annual General
Meeting (the 2020 AGM)
At the 2020 AGM, 99.7% of the votes received
supported the adoption of the remuneration
report for the year ended 30 June 2020.
The company did not receive any specific
feedback at the 2020 AGM regarding its
remuneration practices.
DETAILS OF REMUNERATION
Amounts of remuneration
Details of the remuneration of key management
personnel of the consolidated entity are set out in
the following tables.
The key management personnel of the
consolidated entity during the financial year
ended 30 June 2021 consisted of the following
directors of SciDev Limited:
• Trevor A Jones - Non-executive Chairman
(resigned 30 June 2021)
• Lewis E Utting - Managing Director & Chief
Executive Officer
• Simone Watt - Non-executive Director
• Jon Gourlay - Non-executive Director
• Dan O’Toole - Non-executive Director
(appointed a Director on 3 February 2021 and
Acting Chair on 30 June 2021)
And the following persons:
• John Fehon - Chief Financial Officer
• Heath Roberts - Company Secretary and
General Counsel
The total potential STI was set at a level so
as to provide sufficient incentive to achieve
the operational targets and at a cost to the
company that is reasonable in the circumstances.
Actual STI payments awarded to the Managing
Director & Chief Executive Officer depend on
the extent to which specific targets prescribed
in the performance agreement for are met.
During the 2021 year, a cash bonus of $116,250
was paid in respect of the 31 December 2020
year on recommendation of the Nomination &
Remuneration Committee and resolution of the
Board. This payment was included in the relevant
quarterly disclosure (Appendix 4C dated
12 April 2021).
Mr Utting remains eligible to earn part or all of
the balance of this STI based on the relevant
financial and operational targets to 30 June 2021.
Thereafter, his STI and LTI assessment will align
with each financial year.
Senior Executives
STIs paid to senior executives are made on
a discretionary basis as determined by the
Managing Director & Chief Executive Officer
in consultation with the Nomination and
Remuneration Committee. These incentives,
while not guaranteed, are directly linked to the
achievement of KPIs established around various
performance targets including safety, finance,
culture and customer satisfaction. No bonus is
awarded where performance falls below the
minimum acceptable KPI levels as determined
by the Managing Director & Chief Executive
Officer. Cash bonuses were paid to a number of
executives in respect of the 30 June 2021
financial year.
(III) LONG-TERM INCENTIVES
Long-term performance incentives (LTI) are
delivered through the grant of securities to
executive directors and selected senior executives
from time to time as part of their remuneration.
Performance rights with performance hurdles
applicable to any performance period (including
how they will be measured) are set out in any
such invitation to the eligible executives. During
the 2021 financial year the Company granted
performance rights to senior executives and staff
under the terms of the SciDev ESS, however no
performance rights were granted to any of the
Board members or the Managing Director and
Chief Executive Officer
22
SCIDEV LIMITEDANNUAL REPORT 2021 2021
Short-term benefits
Postemployment
benefits
Long-term
benefits
Share-based
payments
Cash
salary &
Fees
$
Bonus
$
Super
annuation
&
Annual
Leave
$
Long
Service
Leave
$
Option (b)
$
Rights
(c)
$
Totale
$
Non-Executive Directors:
Trevor A Jones (Chairman)
82,236
Simone Watt
Jon Gourlay
Dan O'Toole (a)
Executive Directors:
52,500
52,500
25,000
-
-
-
-
6,976
4,458
4,987
2,375
-
-
-
-
-
-
-
-
-
-
-
-
Lewis E Utting
446,250 200,000
54,189
13,072
369
70,113
Other Key Management Personnel:
John Fehon (c)
Heath Roberts (c)
255,666
228,000
-
-
24,699
8,676
-
-
22
-
33,618
3,763
-
-
-
-
-
-
-
89,212
56,958
57,487
27,375
783,993
322,681
231,763
1,142,152 200,000
97,684
21,748
391
107,494
-
1,569,469
a) Dan O’Toole was appointed a Non-executive Director on 3 February 2021. The above reported remuneration relates to the period from 3 February
2021 to 30 June 2021.
b) The amounts included in the share-based remuneration represent the grant date fair value of options, amortised on a straight-line basis over
the expected vesting period. Expenses are reversed where rights are forfeited due to a failure to satisfy the service conditions or there is a
revision of share rights expected to vest.
c) Performance rights were granted to John Fehon and Heath Roberts on 15 December 2020. The rights had a fair value of $0.49774 per right. An
expense has not been recorded as the non-market conditions are not expected to be met.
The following table has been restated as a result of a recalculation of FY2020 option valuations.
2020 -
(Restated)
Short-term benefits
Postemployment
benefits
Long-term
benefits
Share-based
payments
Cash
salary &
Fees
$
Bonus
$
Super
annuation
&
Annual
Leave
$
Long
Service
Leave
$
Option (b)
$
Rights
(c)
$
Totale
$
Non-Executive Directors:
Trevor A Jones (Chairman)
69,444
Simone Watt
Jon Gourlay
Executive Directors:
44,999
4,107
-
-
-
6,597
4,275
390
-
-
-
-
-
-
27,500
27,500
71,500
Lewis E Utting
368,666
100,000
34,833
44,311
34
169,887
Other Key Management Personnel:
John Fehon (c)
Heath Roberts (c)
108,333
244,795
-
-
10,291
8,230
-
-
-
-
59,382
4,237
-
-
-
-
-
-
103,541
76,774
75,997
717,731
186,236
249,032
840,344
100,000
56,386
52,541
34
360,006
-
1,409,311
a) John Fehon was appointed Chief Financial Officer on 3 February 2020. The above reported remuneration relates to the period from 3 February
2020 to 30 June 2020.
b) The amounts included in the share-based remuneration represent the grant date fair value of options, amortised on a straight-line basis over
the expected vesting period. Expenses are reversed where rights are forfeited due to a failure to satisfy the service conditions or there is a
revision of share rights expected to vest.
c) The share-based payments (options) granted to Directors in July 2019 were subject to approval by shareholders, which was obtained on 23
July 2019. The option remuneration as presented in the 30 June 2020 Remuneration Report, was determined based on a May 2019 grant date
valuation, rather than the date the options were approved by shareholders (23 July 2019). Accordingly, the prior year comparatives for all of the
Directors and KMP have been adjusted to update for this valuation change. The previous total of $143,029 has been restated to $360,006. The
impact of this change has been updated (as applicable) throughout the Remuneration Report.
23
SCIDEV LIMITEDANNUAL REPORT 2021 The proportion of remuneration linked to performance and the fixed proportion are as follows. The 2020
figures have been restated as a result of a recalculation of FY2020 option valuations.
Fixed remuneration
At risk - STI
At risk - LTI
2021
2020
2021
2020
2021
2020
Non-Executive Directors:
Trevor A Jones (Chairman)
Simone Watt
Jon Gourlay
Dan O’Toole
Executive Directors:
100%
100%
100%
100%
73%
64%
6%
-
-
-
-
-
-
-
-
-
Lewis E Utting
66%
62%
25%
14%
Other Key Management Personnel:
John Fehon)
Heath Roberts
90%
98%
68%
98%
-
-
-
-
-
-
-
-
9%
10%
2%
27%
36%
94%
-
24%
32%
2%
The proportion of remuneration linked to performance and the fixed proportion are as follows. The 2020
figures have beenrestated as a result of a recalculation of FY2020 option valuations.
Name
Executive Directors:
Lewis E Utting
SERVICE AGREEMENTS
Cash bonus paid/payable
Cash bonus forfeited
2021
100%
2020
50%
2021
-
2020
50%
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. Details of these agreements at the date of this report are as follows:
Name:
Title:
Lewis E Utting
Managing Director and Chief Executive Officer
Agreement commenced: 30 April 2019, revised March 2020
Term of agreement:
Ongoing
Details:
Base salary of $450,000 plus superannuation. Mr Utting is also entitled to an STI bonus
of $200,000 per 12 month period subject to meeting certain performance based
milestones and an LTI of $250,000 in performance based equity (options or shares)
under the terms of the Company’s ESS. The terms of the LTI grant have not been finalised
and issued to Mr Utting for CY2020 because of the COVID-19 pandemic.
Mr Utting’s salary, allowances and performance bonus is reviewed annually by the
Nomination and Remuneration Committee.
The contract may be terminated by 6 months’ notice from either party.
24
SCIDEV LIMITEDANNUAL REPORT 2021 Name:
Title:
John Fehon
Chief Financial Officer
Agreement commenced: 3 February 2020
Term of agreement:
Ongoing
Details:
Base salary of $260,000 plus superannuation and performance-based $60,000 bonus.
The contract may be terminated by 3 months’ notice from either party.
Name:
Title:
Heath Roberts
Company Secretary & General Counsel
Agreement commenced:
1 March 2017
Term of agreement:
Ongoing
Details:
Consulting per diem rate equal to that of $240,000 for full-time employment and
services. The agreement may be terminated by 1 months’ notice from either party.
Key management personnel have no entitlement to termination payments in the event of removal for
misconduct.
Voluntary Remuneration Reductions Commencing 1 July 2020 - 30 September 2020
Recognising the uncertainty on world financial markets as a result of COVID-19, certain members of the KMP
volunteered base pay reductions during the period from 1 July 2020 to 30 September 2020. These voluntary
reductions did not accrue and are not to be repaid to the member of KMP at a future point in time. The KMP
that have volunteered reductions of between 20%-30% are Managing Director & Chief Executive Officer Lewis
Utting, Chief Financial Officer John Fehon and Company Secretary & General Counsel Heath Roberts.
SHARE-BASED COMPENSATION
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation
during the year ended 30 June 2021.
Options
The terms and conditions of the prior year grants of options over ordinary shares are as follows:
Name
Number
of options
granted
Grant date Vested date Expiry date
Trevor Jones
250,000
23/07/2019
23/07/2019
23/07/2022
Lewis E Utting
800,000
23/07/2019
23/07/2019
23/07/2022
Lewis E Utting
800,000
23/07/2019
30/06/2021
23/07/2022
Simone Watt
250,000
23/07/2019
23/07/2019
23/07/2022
Jon Gourlay
650,000
23/07/2019
23/07/2019
23/07/2022
John Fehon
75,000
03/02/2020
03/02/2020
23/07/2022
John Fehon
75,000
03/02/2020
30/06/2021
23/07/2022
Heath Roberts
200,000
16/05/2019
16/05/2019
23/07/2022
Heath Roberts
200,000
16/05/2019
30/06/2021
23/07/2022
Fair value
per option
at grant
date (a)
Exercise
price
Vested %
$0.12
$0.10
$0.10
$0.12
$0.12
$0.12
$0.12
$0.10
$0.10
$0.11
$0.13
$0.17
$0.11
$0.11
$0.61
$0.63
$0.00
$0.04
100%
100%
100%
100%
100%
100%
100%
100%
100%
(a) The fair value per option has been restated to reflect changes to the grant date as outlined above.
25
SCIDEV LIMITEDANNUAL REPORT 2021 With the exception of the options granted to Lewis Utting (Managing Director and Chief Executive Officer),
which had performance conditions which were required to be met in order to earn the grant, all the other
options granted had no performance conditions.
The options granted to Mr Utting consist of 2 tranches. The options formed part of Mr Utting’s contracted
remuneration package which was disclosed when he was appointed Managing Director and Chief
Executive Officer of the Company (ref: ASX announcement 30 April 2019). The issue of these options were
subsequently approved by shareholders on 23 July 2019. Mr Utting voluntarily redistributed some of his
options to other members of the executive team. The first tranche vested on grant date and the second
tranche was subject to a service vesting condition and a performance condition related to achieving
break-even less Directors’ costs.
The options issued to the Directors were premium priced options and reported as remuneration over the
vesting period.
The options granted to John Fehon (CFO) consists of 2 tranches. The first tranche were not premium priced
options and are subject to reporting as remuneration in the year of grant. The second tranche is subject to
a service vesting condition and is reported as remuneration over the vesting period.
The options granted to Heath Roberts (Company Secretary & General Counsel) consists of 2 tranches. The
first tranche were not premium priced options and are subject to reporting as remuneration in the year of
grant. The second tranche is subject to a service vesting condition and is reported as remuneration over the
vesting period. These options were issued under the Company’s ESS, the options expire on the earlier of their
expiry date or termination of the employee’s employment. The Board has discretion under the ESS to apply
good leaver provisions in certain cases. Options issued to Directors of the company were first approved
by the company’s shareholders, as required by ASX Listing Rules. The options do not entitle the holders to
participate in any share issue, bonus or distribution by the Company unless first exercised in accordance
with the option terms.
Options granted carry no dividend or voting rights. There has been no alteration of the terms and conditions
of the above sharebased payment arrangements since the grant date.
Values of options over ordinary shares granted, exercised and lapsed for directors and other key
management personnel as part of compensation during the year ended 30 June 2021 are set out below:
Name
Trevor Jones
Lewis E Utting
Simone Watt
Jon Gourlay
John Fehon
Heath Roberts
2021
2020
Value of options
granted during
the year
$
Value of options
exercised during
the year
$
Value of options
granted during
the year
$
Value of options
exercised during
the year
$
-
-
-
-
-
-
-
104,000
-
-
-
-
27,500
240,000
27,500
71,500
93,000
8,000
27,500
-
-
71,500
45,750
-
There were no options for directors and other key management personnel that lapsed during the year
ended 30 June 2021.
26
SCIDEV LIMITEDANNUAL REPORT 2021 Performance rights
During the year, the Company issued 2,133,399 performance rights, in two tranches of 1,408,399 and 725,000
respectively, under the terms of the Company’s ESS. In order for the performance rights to vest (convert to
fully paid ordinary shares) the holder must meet:
• A test related to SciDev share price performance ($2.00), and
• A test related to relevant segment cashflow performance ≥ break-even, and
• A continued employment or ‘good leaver’ test
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration
of directors and other key management personnel in this financial year or future reporting years
are as follows:
Name
Number
of rights
granted
Grant date
Vesting date
and exercisable
date
Expiry date
Share price
hurdle for
vesting
Fair value per
right at grant
date
John Fehon
130,000
15/12/2020
31/10/2022
31/10/2022
Heath Roberts
120,000
15/12/2020
31/10/2022
31/10/2022
$2.000
$2.000
$0.49740
$0.49740
The Performance Rights carry none of the rights of ordinary shares and, in particular, no right to vote, receive
dividends or participate in bonus or rights issues. No Directors of the company participated in the grant of
performance rights.
The vesting conditions of these performance rights are forecast not to be met, and therefore no expense
has been recognised in remuneration in respect of these rights in the period.
None of the rights granted during the year vested.
Additional information
The earnings of the consolidated entity for the five years to 30 June 2021 are summarised below:
Sales revenue
42,524,908
17,906,551
2,655,799
2,029,373
1,846,985
Profit/(loss) after income tax
3,452,968
(875,238)
(2,032,527)
1,001,869
(597,340)
2021
$
2020
$
2019
$
2018
$
2017
$
The factors that are considered to affect total shareholders return (‘TSR’) are summarised below:
Share price at financial year end ($)
Basic earnings per share (cents per share)*
2021
$
0.85
2.26
2020
$
0.58
2019
$
0.09
(0.69)
(2.69)
2018
$
0.07
2.02
2017
$
0.12
(2.30)
* The earnings per share for 2018 and 2017 have been adjusted for the effect of the share consolidation completed in December 2018.
27
SCIDEV LIMITEDANNUAL REPORT 2021 ADDITIONAL DISCLOSURES RELATING TO KEY MANAGEMENT PERSONNEL
Shareholding
The number of shares in the company held during the financial year by each director and other members
of key management personnel of the consolidated entity, including their personally related parties,
is set out below:
Received
during the
year on the
exercise of
options
Additions/
others
Disposals/
others
Balance at
the end of
the year
-
-
-
114,247
-
-
-
1,202,550
Balance at
the start of
the year
-
1,088,303
5,367,421
800,000
30,707
(749,999)
5,448,129
5,063,280
856,349
-
288,333
100,000
-
-
-
-
-
-
98,279
-
21,326
6,093
-
-
-
-
-
5,063,280
954,628
-
309,659
106,093
12,763,686
800,000
270,652
(749,999)
13,084,339
Ordinary shares
Vaughan Busby
Trevor A Jones
Lewis E Utting
Simone Watt
Jon Gourlay
Dan O’Toole
John Fehon
Heath Roberts
Option holding
The number of options over ordinary shares in the company held during the financial year by each director
and other members of key management personnel of the consolidated entity, including their personally
related parties, is set out below:
Options over ordinary shares
Lewis E Utting
Simone Watt
John Fehon
Heath Roberts
Balance at
the start of
the year
1,600,000
250,000
75,000
400,000
2,325,000
Granted
Exercised
Expired/
forfeited/
others
Balance at
the end of
the year
-
-
-
-
-
(800,000)
-
-
-
(800,000)
-
-
-
-
-
800,000
250,000
75,000
400,000
1,525,000
Loans to key management personnel and their related parties
There were no loans owing by key management personnel of the group, including their close family
members and entities related to them, during the financial year ended 30 June 2021.
Other transactions with key management personnel and their related parties
A director, Simone Watt, is a director of Kanins International Pty Ltd and has the capacity to significantly
influence decision making of that company. Kanins International Pty Ltd provided SciDev Limited with
a US$350,000 working capital facility that matures on 1 October 2021. The facility is secured against the
consolidated entity’s inventory and incurs interest at 15% per annum. $nil (2020: $nil) was drawn down on this
facility and $nil (2020: $nil) repaid during the 2021 financial year. The loan balance at 30 June 2021 was $nil
(2020: $nil).
28
SCIDEV LIMITEDANNUAL REPORT 2021 A director, Simone Watt, is a director of Sinoz Chemicals and Commodities Pty Ltd (Sinoz) and has the
capacity to significantly influence the decision-making of the company. The consolidated entity has leased
premises from Sinoz during the 2021 financial year. The lease contract was based on normal commercial
terms and conditions. Amounts recognised as expenses
Rent and related expenses: $6,030 (2020: $nil)
Finance costs: $nil (2020: $nil)
There were no other transactions with key management personnel of the group, including their close family
members and entities related to them, during the financial year ended 30 June 2021.
This concludes the remuneration report, which has been audited.
Values of options over ordinary shares granted, exercised and lapsed for directors and other key
management personnel as part of compensation during the year ended 30 June 2021 are set out below:
2021
2020
Value of options granted
during the year
Value of options
exercised during the year
Value of options granted
during the year
Value of options exercised
during the yerar
Trevor Jones
Lewis E Utting
Simone Watt
Jon Gourlay
John Fehon
Heath Roberts
-
-
-
-
-
-
-
104,000
-
-
-
-
27,500
240,000
27,500
71,500
93,000
8,000
27,500
-
-
71,500
45,750
-
There were no options for directors and other key management personnel that lapsed during the year
ended 30 June 2021.
Performance rights
During the year, the Company issued 2,133,399 performance rights, in two tranches of 1,408,399 and 725,000
respectively, under the terms of the Company’s ESS. In order for the performance rights to vest (convert to
fully paid ordinary shares) the holder must meet:
• A test related to SciDev share price performance ($2.00), and
• A test related to relevant segment cashflow performance ≥ break-even, and
• A continued employment or ‘good leaver’ test
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration
of directors and other key management personnel in this financial year or future reporting years
are as follows:
Number of
rights
granted
130,000
120,000
Vesting date
and exercisable
date
Grant date
Expiry date
Share price
hurdle for
vesting
Fair value per
right at grant
date
15/12/2020
31/10/2022
31/10/2022
15/12/2020
31/10/2022
31/10/2022
$2.000
$2.000
$0.49740
$0.49740
John Fehon
Heath Roberts
The Performance Rights carry none of the rights of ordinary shares and, in particular, no right to vote, receive
dividends or participate in bonus or rights issues. No Directors of the company participated in the grant of
performance rights.
The vesting conditions of these performance rights are forecast not to be met, and therefore no expense
has been recognised in remuneration in respect of these rights in the period. None of the rights granted
during the year vested.
29
SCIDEV LIMITEDANNUAL REPORT 2021 ADDITIONAL INFORMATION
The earnings of the consolidated entity for the five years to 30 June 2021 are summarised below:
2021
$
2020
$
2019
$
2018
%
2017
$
Sales revenue
42,524,908
17,906,551
2,655,799
2,029,373
1,846,985
Profit/(loss) after income tax
3,452,968
(875,238)
(2,032,527)
1,001,869
(597,340)
The factors that are considered to affect total shareholders return (‘TSR’) are summarised below:
Share price at financial year end ($)
Basic earnings per share (cents per share)*
2021
$
0.85
2.26
2020
$
0.58
2019
$
0.09
(0.69)
(2.69)
2018
%
0.07
2.02
2017
$
0.12
(2.30)
* The earnings per share for 2018 and 2017 have been adjusted for the effect of the share consolidation completed in December 2018.
SHARES UNDER OPTION
Unissued ordinary shares of SciDev Limited under option at the date of this report are as follows:
Grant date
23 July 2019
23 July 2019
16 May 2019
16 May 2019
Expiry date
Exercise price
Number under option
23 July 2022
23 July 2022
23 July 2022
23 July 2022
$0.100
$0.120
$0.100
$0.120
800,000
250,000
400,000
850,000
2,300,000
All of the unexercised options were granted under the SciDev Employee Share Scheme (see note 40).
No person entitled to exercise the options had or has any right by virtue of the option to participate in any
share issue of the company or of any other body corporate.
No options were granted to the directors or any of the five highest remunerated officers of the company
since the end of the financial year.
SHARES UNDER PERFORMANCE RIGHTS
Unissued ordinary shares of SciDev Limited under performance rights at the date of this report
are as follows
Grant date
15 December 2020
26 May 2021
Expiry date
Exercise price
Number under option
31 October 2022
30 June 2022
$0.000
$0.000
1,408,399
725,000
2,133,399
No person entitled to exercise the performance rights had or has any right by virtue of the performance
right to participate in any share issue of the company or of any other body corporate.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were 1,425,000 ordinary shares of SciDev Limited issued on the exercise of options during the year
ended 30 June 2021 and up to the date of this report.
SHARES ISSUED ON THE EXERCISE OF PERFORMANCE RIGHTS
There were no ordinary shares of SciDev Limited issued on the exercise of performance rights during the
year ended 30 June 2021 and up to the date of this report.
30
SCIDEV LIMITEDANNUAL REPORT 2021 INDEMNITY AND INSURANCE OF OFFICERS
• all non-audit services have been reviewed and
The company has indemnified the directors and
executives of the company for costs incurred, in
their capacity as a director or executive, for which
they may be held personally liable, except where
there is a lack of good faith.
During the financial year, the company paid
a premium in respect of a contract to insure
the directors and executives of the company
against a liability to the extent permitted by the
Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability
and the amount of the premium.
INDEMNITY AND INSURANCE OF AUDITOR
The company has not, during or since the end
of the financial year, indemnified or agreed to
indemnify the auditor of the company or any
related entity against a liability incurred by
the auditor.
During the financial year, the company has not
paid a premium in respect of a contract to insure
the auditor of the company or any related entity.
approved to ensure that they do not impact the
integrity and objectivity of the auditor; and
• None of the services undermine the general
principles relating to auditor independence as
set out in APES 110 Code of Ethics for Professional
Accountants issued by the Accounting
Professional and Ethical Standards Board,
including reviewing or auditing the auditor’s
own work, acting in a management or decision-
making capacity for the company, acting as
advocate for the company or jointly sharing
economic risks and rewards.
OFFICERS OF THE COMPANY WHO ARE FORMER
PARTNERS OF ERNST & YOUNG
There are no officers of the company who are
former partners of Ernst & Young.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence
declaration as required under section 307C of the
Corporations Act 2001 is set out immediately after
this directors’ report.
PROCEEDINGS ON BEHALF OF THE COMPANY
AUDITOR
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the company,
or to intervene in any proceedings to which the
company is a party for the purpose of taking
responsibility on behalf of the company for all or
part of those proceedings.
NON-AUDIT SERVICES
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
30 to the financial statements.
The directors are satisfied 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 compatible with the general
standard of independence for auditors imposed
by the Corporations Act 2001.
The directors are of the opinion that the services
as disclosed in note 30 to the financial statements
do not compromise the external auditor’s
independence requirements of the Corporations
Act 2001 for the following reasons:
Ernst & Young was appointed auditor on 10 June
2021. They serve in office in accordance with
section 327 of the Corporations Act 2001.
This report is made in accordance with a
resolution of directors, pursuant to section 298(2)
(a) of the Corporations Act 2001.
On behalf of the directors
Lewis E Utting
LEWIS E UTTING
Managing Director & Chief Executive Officer
30 August 2021
Sydney
31
SCIDEV LIMITEDANNUAL REPORT 2021 32
SCIDEV LIMITEDANNUAL REPORT 2021
Statement of Profit and Loss and
other comprehensive income
SciDev Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
For the year ended 30 June 2021
Revenue
Other income
Interest revenue
Expenses
Changes in inventories, and raw materials and consumables used
Contractors
Depreciation and amortisation expense
Employee benefits expense
Engineering and other consultants expenses
Insurance
Loss on disposal of assets
Listing and share registry expenses
Professional fees
Short-term facility expenses and outgoings
Travel, accommodation and conference
Write-off of assets
Other expenses
Finance costs
Profit/(loss) before income tax benefit
Income tax benefit
Profit/(loss) after income tax benefit for the year
attributable to the owners of SciDev Limited
Other comprehensive income/(loss)
Items that will not be reclassified subsequently to profit or loss
Gain on the revaluation of equity instruments at fair value through other comprehensive
income, net of tax
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Note
2021
$
2020
$
5
6
7
8
42,524,908
18,061,342
1,711,761
923
587,855
2,784
(32,366,160)
(629,918)
(929,771)
(6,253,852)
(978,648)
(275,161)
-
(121,761)
(381,870)
(167,657)
(312,854)
(39,671)
(827,078)
(147,532)
(14,954,716)
(97,582)
(377,760)
(2,845,448)
(535,834)
(165,406)
(6,902)
(150,999)
(706,810)
(199,136)
(294,832)
-
(556,454)
(35,688)
805,659
(2,275,586)
2,647,309
1,400,348
3,452,968
(875,238)
810,289
-
(1,080,723)
(36,310)
Other comprehensive income/(loss) for the year, net of tax
(270,434)
(36,310)
Total comprehensive income/(loss) for the year
attributable to the owners of SciDev Limited
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
3,182,534
(911,548)
Cents
Cents
39
39
2.26
2.23
(0.69)
(0.69)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
33
SCIDEV LTD 2021ANNUAL REPORT
34
SCIDEV LTD 2021ANNUAL REPORTFor the year ended 30 June 2021 Statement of Financial Position SciDev Limited Consolidated statement of financial position As at 30 June 2021 Note 2021 2020 $ $ Assets Current assets Cash and cash equivalents 9 7,010,025 4,481,783 Trade and other receivables 10 7,682,728 2,170,036 Contract assets 11 441,551 - Inventories 12 3,792,740 4,805,023 Income tax refund due 3,049 32,623 Other 336,718 153,254 Total current assets 19,266,811 11,642,719 Non-current assets Financial assets at fair value through other comprehensive income 13 2,720,887 1,502,900 Property, plant and equipment 14 6,383,862 1,196,808 Intangibles 15 24,129,773 11,402,074 Deferred tax 16 3,603,973 1,364,362 Other 45,282 64,053 Total non-current assets 36,883,777 15,530,197 Total assets 56,150,588 27,172,916 Liabilities Current liabilities Trade and other payables 17 9,528,707 8,500,186 Contract liabilities 18 262,646 - Lease liabilities 20 2,465,441 182,780 Employee benefits 21 400,391 126,448 Provisions 22 3,538,664 285,258 Total current liabilities 16,195,849 9,094,672 Non-current liabilities Borrowings 19 279,883 284,918 Lease liabilities 20 2,384,957 70,655 Provisions 22 5,675,342 313,500 Total non-current liabilities 8,340,182 669,073 Total liabilities 24,536,031 9,763,745 Net assets 31,614,557 17,409,171 The above consolidated statement of financial position should be read in conjunction with the accompanying notes Consolidated statement of changes
in equity
For the year ended 30 June 2021
Issued
capital
$
Other
equity
$
Reserves
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2019
76,899,789
Loss after income tax benefit for the year
Other comprehensive income/(loss) for the year, net
of tax
Total comprehensive income/(loss) for the year
Transactions with owners in their capacity as
owners:
Contributions of equity (note 23)
Transaction costs net of tax (note 23)
Share-based payments (note 40)
Options exercised and lapsed (note 23)
Contingent consideration (note 24)
Transfer from reserves to accumulated losses
-
-
-
-
2,210,703
(74,411,471)
4,699,021
-
(875,238)
(875,238)
(36,310)
-
(36,310)
(36,310)
(875,238)
(911,548)
-
-
-
13,152,292
(299,598)
-
122,050
-
-
-
-
-
-
569,975
-
-
-
199,029
(2,885,944)
-
645,199
-
-
-
2,763,894
-
(645,199)
13,152,292
(299,598)
199,029
-
569,975
-
Balance at 30 June 2020
89,874,533
569,975
132,677
(73,168,014)
17,409,171
Issued
capital
$
Other
equity
$
Reserves
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2020
89,874,533
569,975
132,677
(73,168,014)
17,409,171
Profit after income tax benefit for the year
Other comprehensive income/(loss) for the year, net
of tax
Total comprehensive income/(loss) for the year
-
-
-
-
-
-
-
3,452,968
3,452,968
(270,434)
-
(270,434)
(270,434)
3,452,968
3,182,534
Transactions with owners in their capacity as
owners:
Share-based payments (note 40)
Contributions of equity (note 23)
Transaction costs net of tax (note 23)
Options exercised (note 23)
Contingent consideration (note 24)
-
10,927,000
(191,975)
125,000
262,175
-
-
-
-
(262,175)
162,827
-
-
-
-
-
-
-
-
-
162,827
10,927,000
(191,975)
125,000
-
Balance at 30 June 2021
100,996,733
307,800
25,070
(69,715,046)
31,614,557
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
35
SCIDEV LTD 2021ANNUAL REPORT
36
SCIDEV LTD 2021ANNUAL REPORTFor the year ended 30 June 2021 Consolidated statement of cash flows The above consolidated statement of cash flows should be read in conjunction with the accompanying notes SciDev Limited Consolidated statement of cash flows For the year ended 30 June 2021 Note 2021 2020 $ $ Cash flows from operating activities Receipts from customers (inclusive of GST) 41,852,628 20,452,172 Payments to suppliers and employees (inclusive of GST) (43,370,670) (20,397,597) (1,518,042) 54,575 Short term facility and outgoings (167,657) (199,136) Government grants and subsidies 105,501 - Interest received 923 2,784 R&D tax incentive received 380,361 - Interest and other finance costs paid (147,532) (35,688) Income taxes refunded 29,574 - Net cash used in operating activities 38 (1,316,872) (177,465) Cash flows from investing activities Payment for purchase of business, net of cash acquired 35 (1,700,000) (870,765) Payments for property, plant and equipment 14 (414,493) (752,768) Payments for intangibles 15 (186,551) (118,275) Payments for security deposits - (50,878) Payments for contingent consideration (267,031) - Proceeds from disposal of property, plant and equipment 64,900 - Proceeds from release of security deposits 17,706 - Net cash used in investing activities (2,485,469) (1,792,686) Cash flows from financing activities Proceeds from issue of shares 7,000,000 5,071,902 Proceeds from borrowings 1,093,139 284,918 Repayment of leases (870,760) - Proceeds from exercise of share options 125,000 - Share issue transaction costs (191,975) - Repayment of borrowings (817,639) (661,095) Net cash from financing activities 6,337,765 4,695,725 Notes to the consolidated
financial statements
For the year ended 30 June 2021
1.
General Information
The financial statements cover SciDev Limited as a consolidated entity consisting of SciDev Limited and the entities it controlled
at the end of, or during, the year. The financial statements are presented in Australian dollars, which is SciDev Limited's functional
and presentation currency.
SciDev Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business are:
Registered office
Unit 1
8 Turbo Road
Kings Park
NSW 2148
Principal place of business
C/-Boardroom Pty Limited
Level 12, Grosvenor Place
225 George Street, Sydney
NSW 2000
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report,
which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 30 August 2021. The directors
have the power to amend and reissue the financial statements.
2.
Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective notes
or below. These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. Any new or amended
Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the consolidated entity. The following Accounting Standards and Interpretations are most relevant to
the consolidated entity:
Conceptual Framework for Financial Reporting (Conceptual Framework)
Amendments to IFRS 3 Definition of a Business
Amendments to IFRS 7, IFRS 9 and IAS 39 Interest Rate Benchmark Reform
Amendments to IAS 1 and IAS 8 Definition of Material
The consolidated entity has adopted the revised Accounting Standards and Interpretations from 1 July 2020 but they have not
had a material impact on the consolidated entity's financial statements.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for
-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, financial assets
and liabilities at fair value through other comprehensive income.
2.
37
SCIDEV LTD 2021ANNUAL REPORT
38
SCIDEV LTD 2021ANNUAL REPORTThe above Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3. Comparative information Some comparative information has been reclassified for presentation purposes. Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 34. Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of SciDev Limited ('company' or 'parent entity') as at 30 June 2021 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 entity'. Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent. Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss. Foreign currency translation The financial statements are presented in Australian dollars, which is SciDev Limited's functional and presentation currency. Foreign currency transactions Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Foreign operations The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity. The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of. Income tax The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable. Notes to the consolidated financial statements
For the year ended 30 June 2021
2.
Significant accounting policies continued
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
•
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
SciDev Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax consolidated group
under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue 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 addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (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 liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable
from or payable to other entities 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, resulting in neither a contribution by the
head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated
entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after
the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for
at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is
held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are
classified as non-current.
Deferred tax assets and liabilities are always classified as non-current
39
SCIDEV LTD 2021ANNUAL REPORT
40
SCIDEV LTD 2021ANNUAL REPORTInvestments and other financial assets Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided. Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off. Financial assets at fair value through other comprehensive income Upon initial recognition, the consolidated entity can elect to classify irrevocably its equity investments as equity instruments designated at fair value through Other Comprehensive Income (OCI) when they meet the definition of equity under AASB 132 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by-instrument basis. Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the statement of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment. The consolidated entity elected to classify irrevocably its non-listed equity investments under this category. Impairment of financial assets The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain. Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable 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 lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate. For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other comprehensive income. Impairment of non-financial assets Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit. Finance costs Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred. Notes to the consolidated financial statements
For the year ended 30 June 2021
2.
Significant accounting policies continued
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable
from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable
from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which
are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
The following Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2021. The
consolidated entity has not yet completed a detailed review of these, however does not expect any of them to have a material
impact on the financial results upon adoption.
Amendments to AASB 3: Reference to Conceptual Framework
Amendments to AASB 137: Onerous Contracts – Costs of Fulfilling a Contract
Amendments to AASB 116: Property, Plant and Equipment: Proceeds before Intended Use
Amendments to AASB 137: Onerous Contracts – Costs of Fulfilling a Contract
Amendments to AASB 101: Classification of Liabilities as Current or Non-current
Amendments to AASB 101 and IFRS Practice Statement 2 – Disclosure of Accounting Policies
Amendments to AASB 108 – Definition of Accounting Estimates
Amendments to AASB 112 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction
3.
Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to
assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on
historical experience and on other various factors, including expectations of future events, management believes to be
reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual
results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on
the consolidated entity based on known information. This consideration extends to the nature of the products and services
offered, customers, supply chain, staffing and geographic regions in which the consolidated entity operates. Other than as
addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or
any significant uncertainties with respect to events or conditions which may impact the consolidated entity unfavourably as at
the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Carrying value of goodwill and non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the
higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on
available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less
incremental costs of disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived
from the budget for the next five years and do not include restructuring activities that the consolidated entity is not yet
committed to or significant future investments that will enhance the performance of the assets of the CGU being tested.
41
SCIDEV LTD 2021ANNUAL REPORT 42
SCIDEV LTD 2021ANNUAL REPORTCarrying value of goodwill and non-financial assets Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs of disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the consolidated entity is not yet committed to or significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill and other intangibles with indefinite useful lives recognised by the consolidated entity. The key assumptions used to determine the recoverable amount for the different CGUs, including a sensitivity analysis, are disclosed and further explained in note 15. Fair value of contingent consideration The consolidated entity has estimated the fair value of contingent consideration payable in connection with business combinations by determining the present value of expected future payments, discounted using a risk-adjusted discount rate. The estimate of future payments is based on forecast EBITDA of the acquired business over a three-year period. The acquisition accounting is provisional at 30 June 2021. Recovery of deferred tax assets Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future profits and the availability of past losses for use. 4. Operating Segments Identification of reportable operating segments The consolidated entity operates in primarily two geographical segments: Australia and the United States. The primary business segment is the treatment of industrial waste. Operating and business segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. Intersegment transactions Intersegment transactions were made at market rates. Intersegment transactions are eliminated on consolidation. Intersegment receivables, payables and loans Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable that earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are eliminated on consolidation. Major customers During the year ended 30 June 2021, revenue from 1 customer amounted to $6,936,531 arising from sales in the Australia segment, and revenue from 1 customer amounted to $4,760,454 arising from sales in the United States segment. During the year ended 30 June 2020, revenue from 2 customers amounted to $5,868,415 arising from sales in the Australia segment, and revenue from 1 customer amounted to $3,054,467 arising from sales in the United States segment. No other customer contributed 10% or more to the consolidated entity's revenue for both 2021 and 2020. Notes to the consolidated financial statements
For the year ended 30 June 2021
4.
Operating Segments continued
Operating segment information
2021
Revenue
Sales to external customers
Intersegment sales
Total sales revenue
Interest revenue
Total revenue
Adjusted EBITDA*
Depreciation and amortisation
Interest revenue
Finance costs
Professional fees in connection with business combinations
Profit before income tax benefit
Income tax benefit
Profit after income tax benefit
Assets
Segment assets
Total assets
Total assets includes:
Acquisition of non-current assets
Liabilities
Segment liabilities
Total liabilities
Eliminations &
Australia United States adjustments
$
$
$
Total
$
25,593,180
-
25,593,180
923
25,594,103
16,931,728
99,923
17,031,651
-
17,031,651
-
(99,923)
(99,923)
-
(99,923)
42,524,908
-
42,524,908
923
42,525,831
2,964,131
(671,026)
(204,714)
2,088,391
(929,771)
923
(147,532)
(206,352)
805,659
2,647,309
3,452,968
64,954,166
12,224,296
(21,027,874)
56,150,588
56,150,588
414,493
186,551
-
601,044
42,476,655
3,087,250
(21,027,874)
24,536,031
24,536,031
* Adjusted EBITDA excludes the effects of significant items of income and expenditure which may have an impact on the quality
of earnings because of isolated or non-recurring events.
43
SCIDEV LTD 2021ANNUAL REPORT
44
SCIDEV LTD 2021ANNUAL REPORT Eliminations and Australia United States adjustments Total 2020 $ $ $ $ Revenue Sales to external customers 12,286,522 5,620,029 - 17,906,551 Intersegment sales 2,574,870 2,271,474 (4,846,344) - Total sales revenue 14,861,392 7,891,503 (4,846,344) 17,906,551 Other revenue 142,345 12,446 - 154,791 Interest revenue 2,784 - - 2,784 Total revenue 15,006,521 7,903,949 (4,846,344) 18,064,126 Adjusted EBITDA* (1,431,852) (345,838) 813 (1,776,877) Depreciation and amortisation (377,760) Interest revenue 2,784 Finance costs (35,688) Professional fees in connection with business combinations (88,045) Loss before income tax benefit (2,275,586) Income tax benefit 1,400,348 Loss after income tax benefit (875,238) Assets Segment assets 21,012,266 11,681,957 (5,521,307) 27,172,916 Total assets 27,172,916 Total assets includes: Acquisition of non-current assets 2,871,201 8,509,546 - 11,380,747 Liabilities Segment liabilities 10,554,626 4,730,426 (5,521,307) 9,763,745 Total liabilities 9,763,745 • Adjusted EBITDA excludes the effects of significant items of income and expenditure which may have an impact on the quality of earnings because of isolated or non-recurring events. Accounting policy for operating segments Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance 5. Revenue Disaggregation of revenue The disaggregation of revenue from contracts with customers is based on the location of the customers as follows: 2021 2020 $ $ Revenue from contracts with customers Treatment fees and product sales 42,524,908 17,906,551 Other revenue Other revenue - 154,791 Revenue 42,524,908 18,061,342 Notes to the consolidated financial statements
For the year ended 30 June 2021
5.
Revenue continued
Geographical regions
Australia
United States
Asia
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
2021
$
2020
$
21,067,988
18,033,927
3,422,993
10,922,996
5,551,031
1,432,524
42,524,908
17,906,551
40,568,581
1,956,327
17,906,551
-
42,524,908
17,906,551
Accounting policy for revenue recognition
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated entity: identifies
the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which
takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the
separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be
delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to
the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are
determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration 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 cumulative revenue recognised will not occur. The measurement constraint continues until
the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the
constraining principle are recognised as a refund liability.
Warranties associated with contracts are recorded as provisions.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is
generally at the time of delivery.
Consulting services and treatment fees
Consulting services and treatment fees are recognised using the percentage-of-completion method, based on inputs, for fixed-
fee arrangements or as the services are provided for time-and-materials arrangements. The performance obligations relating to
these arrangements are expected to have a duration of one year or less.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net
carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
45
SCIDEV LTD 2021ANNUAL REPORT
46
SCIDEV LTD 2021ANNUAL REPORT6. Other income 2021 2020 $ $ Net foreign exchange gain 200,265 83,123 Net gain on disposal of property, plant and equipment 27,490 - Subsidies and grants 1,462,064 501,527 Sundry 21,942 3,205 Other income 1,711,761 587,855 Other income includes research and development tax incentive and government grants. Research and development tax incentive is recognised in the period in which the grant submission is completed. Government grants are recognised when there is reasonable assurance that the consolidated entity will comply with the conditions attached to it and that the grant will be received. 7. Expenses 8. Income tax benefit 2021 2020 $ $ Profit/(loss) before income tax includes the following specific expenses: Finance costs Interest and finance charges paid/payable on borrowings 99,756 21,800 Interest and finance charges paid/payable on lease liabilities 47,776 13,888 Finance costs expensed 147,532 35,688 Superannuation expense Defined contribution superannuation expense 289,283 187,239 2021 2020 $ $ Income tax benefit Deferred tax - origination and reversal of temporary differences (2,647,309) (1,400,348) Aggregate income tax benefit (2,647,309) (1,400,348) Deferred tax included in income tax benefit comprises: Increase in deferred tax assets (note 16) (2,647,309) (1,364,362) Decrease in deferred tax liabilities - (35,986) Deferred tax - origination and reversal of temporary differences (2,647,309) (1,400,348) Numerical reconciliation of income tax benefit and tax at the statutory rate Profit/(loss) before income tax benefit 805,659 (2,275,586) Tax at the statutory tax rate of 30% (2020: 27.5%) 241,698 (625,786) Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Non-deductible expenses 9,293 245,985 Government grants - (27,500) 250,991 (407,301) Prior year temporary differences not recognised now recognised - (43,655) Recognition of additional carry forward losses (2,579,670) (997,958) Tax losses relating to overseas subsidiaries not recognised 227,402 189,124 Deferred tax prior period adjustment - (35,986) Impact of change in tax rates on opening deferred tax balance (124,033) - Research and development tax credit (421,999) (104,572) Income tax benefit (2,647,309) (1,400,348) Notes to the consolidated financial statements
For the year ended 30 June 2021
8.
Income tax benefit continued
Amounts charged directly to equity
Deferred tax expense (note 16)
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 30%
2021
$
2020
$
407,698
-
56,240,036
64,080,927
16,872,011
19,224,278
Management have determined that it is prudent to recognise prior year tax losses in the amounts included above and are in the
process of assessing the availability of other historical tax losses.
Tax losses will only be recognised and obtained if it is probable:
(i)
the consolidated entity will derive future assessable income of a nature and an amount sufficient to enable the benefit
from the deductions for the losses and temporary difference to be realised;
(ii)
the consolidated entity complies with the conditions for deductibility imposed by the tax legislation such as continuity of
ownership and same business test; and
(iii)
no changes in tax legislation adversely affect the consolidated entity in realising the benefit from deductions for the
losses and temporary differences.
9.
Cash and cash equivalents
Current assets
Cash at bank
Cash on deposit
2021
$
2020
$
6,960,025
50,000
4,481,783
-
7,010,025
4,481,783
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
10.
Trade and other receivables
Current assets
Trade receivables
Other receivables
2021
$
2020
$
6,521,610
1,161,118
2,111,383
58,653
7,682,728
2,170,036
Allowance for expected credit losses
The consolidated entity calculates its expected credit losses (ECL) based on the consolidated entity's historical credit loss
experience, adjusted
for
forward-looking
factors specific
to
its
receivables and
the economic environment.
The consolidated entity does not have any history of impairment of its trade receivables. The consolidated entity transacts with a
limited number of established customers and operates under strict credit policies approved by the Board of Directors.
No impairment loss has been recognised for trade receivables.
47
SCIDEV LTD 2021ANNUAL REPORT
48
SCIDEV LTD 2021ANNUAL REPORT10. Trade and other receivables continued Accounting policy for trade and other receivables Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days. The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. Other receivables are recognised at amortised cost, less any allowance for expected credit losses. 11. Contract assets The balance at 30 June 2021 represents contract assets associated with the SciDev Water Services business. The business was acquired during the current financial year (refer note 35). Accounting policy for contract assets Contract assets are recognised when the consolidated entity has transferred goods or services to the customer but where the consolidated entity is yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment purposes. 12. Inventories Accounting policy for inventories Stock in transit 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. 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 estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. No inventory on hand at 30 June 2021 is being recorded at net realisable value. 13. Financial assets at fair value through other comprehensive income 2021 2020 $ $ Current assets Contract assets 441,551 - 2021 2020 $ $ Current assets Stock in transit - at cost 226,529 547,877 Stock on hand - at cost 3,566,211 4,257,146 3,792,740 4,805,023 2021 2020 $ $ Non-current assets Unlisted equity securities 2,720,887 1,502,900 Reconciliation Reconciliation of the fair values at the beginning and end of the current and previous financial year are set out below: Opening fair value 1,502,900 1,502,900 Revaluation increments 1,217,987 - Closing fair value 2,720,887 1,502,900 Notes to the consolidated financial statements
For the year ended 30 June 2021
13.
Financial assets at fair value through other comprehensive income continued
Investment in Tartana Resources Limited
Included in the total value of unlisted securities at 30 June 2021 is an investment of $2,717,987 in Tartana Resources Ltd (Tartana).
On 25 October 2017, SciDev Limited (SciDev) entered into a conditional sale agreement to dispose of Intec Zeehan Residues Pty Ltd
(IZR), whose principal asset was the Zeehan Zinc Project. The disposal was completed on 22 January 2018, on which date control of
IZR passed to the acquirer, Tartana. The total consideration 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 resulting in an additional 5,000,000 Tartana
shares to be issued to SciDev and the deletion of the $500,000 cash component of the transaction. 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 consideration for the transaction of $2,000,000 remained unchanged.
On 4 February 2021, R3D Resources Limited (ASX:R3D) announced an off-market all scrip takeover bid for 100% of the fully paid ordi-
nary shares and 100% of the options in Tartana. The offer closed on 31 July 2021 and at that date R3D had a relevant interest in
99.89% of Tartana shares. SciDev received 13,589,935 R3D shares and 2,727,987 attaching options for the shares it held in Tartana.
The options are exercisable at $0.40 within 5 years from the date of issue.
Refer to note 28 for further information on fair value measurement.
14
Property plant and equipment
Non-current assets
Office buildings and warehouses - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Motor vehicles - at cost
Less: Accumulated depreciation
Office equipment - at cost
Less: Accumulated depreciation
2021
$
2020
$
567,886
(297,060)
270,826
7,077,063
(1,534,336)
5,542,727
668,159
(117,121)
551,038
38,942
(19,671)
19,271
186,480
(86,068)
100,412
2,204,673
(1,247,984)
956,689
284,340
(164,395)
119,945
61,090
(41,328)
19,762
6,383,862
1,196,808
49
SCIDEV LTD 2021ANNUAL REPORT
50
SCIDEV LTD 2021ANNUAL REPORT14 Property plant and equipment continued Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Included in the above line items are right-of-use assets over the following: Accounting policy for property, plant and equipment Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expendi-ture that is directly attributable to the acquisition of the items. A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which com-prises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commence-ment date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of invento-ries, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset. The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments of $167,657 on short-term leases were ex-pensed to profit or loss as incurred (2020: $199,136). Office buildings and warehouses Plant and equipment Motor vehicles Office equipment Total $ $ $ $ $ Balance at 1 July 2019 - 286,266 - 17,188 303,454 Additions - 742,632 - 10,136 752,768 Additions through business combinations - 196,782 132,897 - 329,679 Disposals - (6,902) - - (6,902) Adoption of AASB 16 186,480 - - - 186,480 Exchange differences - (4,301) (4,469) - (8,770) Depreciation expense (86,068) (257,788) (8,483) (7,562) (359,901) Balance at 30 June 2020 100,412 956,689 119,945 19,762 1,196,808 Additions - 402,269 10,053 2,171 414,493 Additions through business combinations (note 35) - 4,883,096 356,048 6,709 5,245,853 Disposals - (28,202) (9,208) - (37,410) Adjustments - 1,503 (25) - 1,478 Exchange differences 1,208 (25,319) (6,444) - (30,555) Recognition of right-of-use asset 381,406 - 111,976 - 493,382 Depreciation expense (212,200) (647,309) (31,307) (9,371) (900,187) Balance at 30 June 2021 270,826 5,542,727 551,038 19,271 6,383,862 Office buildings and warehouses Plant and equipment Motor vehicles Total $ $ $ $ Recognition of right-of-use asset 186,480 - - 186,480 Additions through business combinations (note 33) - - 91,857 91,857 Exchange differences - - (4,469) (4,469) Depreciation expense (86,068) - (8,483) (94,551) Balance at 30 June 2020 100,412 - 78,905 179,317 Recognition of right-of-use asset 381,406 - 111,976 493,382 Additions through business combinations (note 33) - 4,723,664 - 4,723,664 Exchange differences 1,208 - (6,444) (5,236) Depreciation expense (212,200) (363,359) (23,008) (598,567) Balance at 30 June 2021 270,826 4,360,305 161,429 4,792,560 Notes to the consolidated financial statements
For the year ended 30 June 2021
14
Property plant and equipment continued
Depreciation 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
Motor vehicles
Office equipment
4-7 years
4-5 years
2-8 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of
the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of
the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any
remeasurement of lease liabilities.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
15.
Intangibles
Non-current assets
Goodwill - at cost
Trade marks and intellectual property - at cost
Less: Accumulated amortisation
2021
$
2020
$
23,606,453
10,987,134
798,080
(274,760)
523,320
670,125
(255,185)
414,940
24,129,773
11,402,074
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Balance at 1 July 2019
Additions
Additions through business combinations
Exchange differences
Adjustment
Amortisation expense
Balance at 30 June 2020
Additions
Additions through business combinations (note 35)
Exchange differences
Write off of assets
Amortisation expense
Trade marks and
intellectual
property
$
216,281
118,275
42,001
(2,897)
59,139
(17,859)
414,940
186,551
-
(7,438)
(41,149)
(29,584)
Goodwill
$
1,030,018
-
9,957,116
-
-
-
10,987,134
-
13,687,501
(1,068,182)
-
-
Total
$
1,246,299
118,275
9,999,117
(2,897)
59,139
(17,859)
11,402,074
186,551
13,687,501
(1,075,620)
(41,149)
(29,584)
Balance at 30 June 2021
23,606,453
523,320
24,129,773
51
SCIDEV LTD 2021ANNUAL REPORT
52
SCIDEV LTD 2021ANNUAL REPORT15 Intangibles continued Impairment testing for goodwill The recoverable amount of the consolidated entity's goodwill has been determined by a value-in-use calculation using a discounted cash flow model, based on a 1 year projection period approved by the Directors and extrapolated for a further 4 years (within the company's 5-year plan) using variable rates, together with a terminal value. The exception to this is the provisional goodwill balance of $13,687,501 which was recognised through business combinations in May 2021 (refer note 35). The recoverable amount of the Australia 2 cash generating unit (CGU), which forms part of the Australia group of CGUs, has been determined based on fair value less costs of disposal given the proximity of the transaction to period end. Goodwill is monitored by management at the following level: Key assumptions are those to which the recoverable amount of an asset or cash-generating units is most sensitive. Key assumptions in the discounted cashflow model for the Australia 1 CGU (measured by value-in-use) include: (a) Post-tax discount rate of 6.5% (2020: 6%) per annum; (b) Average revenue growth over the five-year period of 47.9% (2020: 43.9%); (c) Average growth in gross margin over the five-year period of -1.3% (2020: 2.1%); and (d) Average per annum increase in operating expenses of 31.4% (2020: 34.7%). Key assumptions in the discounted cashflow model for the United States CGU include: (a) Post-tax discount rate of 14% (2020: 6%) per annum; (b) Average revenue growth over the five-year period of 47.8% (2020: 53.3%); (c) Average growth in gross margin over the five-year period of 14.8% (2020: 2.6%); and (d) Average per annum increase in operating expenses of 30.4% (2020: 26.4%). The discount rate reflects management’s estimate of the time value of money and the weighted average cost of capital, the risk free rate and the volatility of the share price relative to market movements. Management believes the projected revenue growth rate is prudent and justified, based on management's expectations of the business development pipeline for each CGU. The budgeted gross margin is based on past performance and management's expectations for the future. Management has budgeted for operating costs based on the current structure of each CGU, adjusting for inflationary increases but not reflecting any future restructurings or cost saving measures. Sensitivity to change of assumptions: Increases in discount rates or changes in other key assumptions, may cause the recoverable amount to fall below carrying values. Based on current economic conditions and CGU performances, there are no reasonably possible changes to key assumptions used in the determination of CGU recoverable amounts that would result in a material impairment to the consolidated entity. Accounting policy for intangible assets Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition 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 pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period. 2021 2020 $ $ Australian Group of CGUs - Australia 1 3,002,084 3,002,084 - Australia 2 13,687,501 - United States CGU 6,915,868 7,985,050 23,605,453 10,987,134 Notes to the consolidated financial statements
For the year ended 30 June 2021
15
Intangibles continued
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or
more frequently if events or changes in circumstances indicate 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 amortised on a straight-line basis over
the period of their expected benefit, being their finite life of 10 years.
16
Deferred Tax
Non-current assets
Deferred tax asset comprises temporary differences attributable to:
Breakdown of closing deferred tax balances:
Tax losses
Employee benefits
Accrued expenses
Equity instruments at fair value through other comprehensive income
Prepayment
Deferred tax asset
Movements:
Opening balance
Credited to profit or loss (note 8)
Charged to equity (note 8)
Closing balance
17
Trade and other payables
Current liabilities
Trade payables
Payable to the vendors of Haldon Industries
BAS payable
Other payables
2021
$
2020
$
3,888,078
120,117
52,834
(407,698)
(49,358)
1,306,813
49,849
7,700
-
-
3,603,973
1,364,362
1,364,362
2,647,309
(407,698)
-
1,364,362
-
3,603,973
1,364,362
2021
$
2020
$
7,617,673
879,685
280,775
750,574
7,823,591
-
238,775
437,820
9,528,707
8,500,186
Refer to note 27 for further information on financial instruments.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
53
SCIDEV LTD 2021ANNUAL REPORT
54
SCIDEV LTD 2021ANNUAL REPORT18 Contract liabilities Unsatisfied performance obligations The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end of the reporting period was $262,646 as at 30 June 2021 ($nil as at 30 June 2020) and is expected to be recognised as revenue in future periods as follows: Accounting policy for contract liabilities Contract liabilities represent the consolidated entity's obligation to transfer goods or services to a customer and are recognised when a customer pays consideration, or when the consolidated entity recognises a receivable to reflect its unconditional right to consideration (whichever is earlier) before the consolidated entity has transferred the goods or services to the customer. 19 Borrowings Paycheck Protection Program loan The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses (located in the USA) to keep their workers on the payroll. The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities. The following are the key terms and conditions of the loan: • The loan has an interest rate of 1%. • Loans issued prior to 5 June 2020 have a maturity of 2 years. Loans issued after 5 June 2020 have a maturity of 5 years. • Loan payments have been deferred for six months. · The loan is unsecured. Movements in Paycheck Protection Program loan: Refer to note 27 for further information on financial instruments. Subsequent to 30 June 2021, the loan was forgiven (refer note 37). 2021 2020 $ $ Current liabilities Contract liabilities 262,646 - 2021 2020 $ $ Within 6 months 262,646 - 2021 2020 $ $ Non-current liabilities Loan - Paycheck Protection Program (USA) 279,883 284,918 2021 2020 $ $ Opening balance 284,918 - Debt converted into subsidy (266,459) - Receipts 275,500 284,918 Exchange differences (14,076) - Closing balance 279,883 284,918 Notes to the consolidated financial statements
Notes to the consolidated financial statements
For the year ended 30 June 2021
For the year ended 30 June 2021
Notes to the consolidated financial statements
For the year ended 30 June 2021
Borrowings continued
19
Borrowings continued
19
19
Borrowings continued
Total facilities
Total facilities
Bank loan
Bank loan
Loan - Kanins International Pty Ltd
Total facilities
Loan - Kanins International Pty Ltd
Loan - Paycheck Protection Program (USA)
Bank loan
Loan - Paycheck Protection Program (USA)
Leases
Loan - Kanins International Pty Ltd
Leases
Invoice purchase facility
Loan - Paycheck Protection Program (USA)
Invoice purchase facility
Leases
Invoice purchase facility
Used at the reporting date
Used at the reporting date
Used at the reporting date
Bank loan
Bank loan
Loan - Kanins International Pty Ltd
Loan - Kanins International Pty Ltd
Loan - Paycheck Protection Program (USA)
Bank loan
Loan - Paycheck Protection Program (USA)
Leases
Loan - Kanins International Pty Ltd
Leases
Invoice purchase facility
Loan - Paycheck Protection Program (USA)
Invoice purchase facility
Leases
Invoice purchase facility
Unused at the reporting date
Unused at the reporting date
Bank loan
Bank loan
Loan - Kanins International Pty Ltd
Loan - Kanins International Pty Ltd
Loan - Paycheck Protection Program (USA)
Bank loan
Loan - Paycheck Protection Program (USA)
Leases
Loan - Kanins International Pty Ltd
Leases
Invoice purchase facility
Loan - Paycheck Protection Program (USA)
Invoice purchase facility
Leases
Invoice purchase facility
Unused at the reporting date
2021
2021
$
$
2021
$
-
-
490,000
490,000
279,883
-
279,883
4,850,398
490,000
4,850,398
6,000,000
279,883
6,000,000
11,620,281
4,850,398
11,620,281
6,000,000
11,620,281
-
-
-
-
279,883
-
279,883
4,850,398
-
4,850,398
-
279,883
-
5,130,281
4,850,398
5,130,281
-
5,130,281
-
-
490,000
490,000
-
-
-
-
490,000
-
6,000,000
-
6,000,000
6,490,000
-
6,490,000
6,000,000
2020
2020
$
$
2020
$
3,529,000
3,529,000
510,000
510,000
284,918
3,529,000
284,918
253,435
510,000
253,435
5,000,000
284,918
5,000,000
9,577,353
253,435
9,577,353
5,000,000
9,577,353
-
-
-
-
284,918
-
284,918
253,435
-
253,435
-
284,918
-
538,353
253,435
538,353
-
538,353
3,529,000
3,529,000
510,000
510,000
-
3,529,000
-
-
510,000
-
5,000,000
-
5,000,000
9,039,000
-
9,039,000
5,000,000
The above facilities have the following maturity dates:
The above facilities have the following maturity dates:
- Loan - Kanins International Pty Ltd - 2 October 2021
The above facilities have the following maturity dates:
- Loan - Kanins International Pty Ltd - 2 October 2021
- Loan - Paycheck Protection Program - 10 March 2026
- Loan - Kanins International Pty Ltd - 2 October 2021
- Loan - Paycheck Protection Program - 10 March 2026
- Invoice purchase facility - no maturity date
- Loan - Paycheck Protection Program - 10 March 2026
- Invoice purchase facility - no maturity date
Accounting policy for borrowings
- Invoice purchase facility - no maturity date
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method.
subsequently measured at amortised cost using the effective interest method.
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
6,490,000
9,039,000
subsequently measured at amortised cost using the effective interest method.
20
20
Lease liabilities
Lease liabilities
20
Lease liabilities
Current liabilities
Current liabilities
Lease liability - land and buildings
Lease liability - land and buildings
Lease liability - motor vehicles
Current liabilities
Lease liability - motor vehicles
Lease liability - equipment
Lease liability - land and buildings
Lease liability - equipment
Lease liability - motor vehicles
Lease liability - equipment
Non-current liabilities
Non-current liabilities
Lease liability - land and buildings
Lease liability - land and buildings
Lease liability - motor vehicles
Non-current liabilities
Lease liability - motor vehicles
Lease liability - equipment
Lease liability - land and buildings
Lease liability - equipment
Lease liability - motor vehicles
Lease liability - equipment
Refer to note 27 for further information on financial instruments.
Refer to note 27 for further information on financial instruments.
Refer to note 27 for further information on financial instruments.
55
2021
2021
$
$
2021
$
276,770
276,770
73,225
73,225
2,115,446
276,770
2,115,446
73,225
2,465,441
2,115,446
2,465,441
2,465,441
16,985
16,985
123,061
123,061
2,244,911
16,985
2,244,911
123,061
2,384,957
2,244,911
2,384,957
4,850,398
2,384,957
4,850,398
2020
2020
$
$
2020
$
89,574
89,574
93,206
93,206
-
89,574
-
93,206
182,780
-
182,780
182,780
15,594
15,594
55,061
55,061
-
15,594
-
55,061
70,655
-
70,655
253,435
70,655
253,435
4,850,398
253,435
SCIDEV LTD 2021ANNUAL REPORT
56
SCIDEV LTD 2021ANNUAL REPORT20 Lease liabilities continued Land and buildings: The consolidated entity has leases for warehouses and offices. Rental contracts are typically made for a fixed period of 3 - 5 years with options to extend. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the statement of financial position. The consolidated entity classifies its right-of-use assets in a consistent manner to its property, plant and equipment. Most extension options have been included in the lease liability. Motor vehicles: The consolidated entity leases motor vehicles under finance lease and hire purchase. The leases are secured over the individual motor vehicles that the lease relates to. Equipment: The consolidated entity leases certain equipment under a lease that expires on 30 June 2023 and there are no options to extend. The lease is secured over the individual asset the lease relates to. A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred. Lease liabilities are subsequently remeasured by increasing the carrying value to reflect interest on the lease liabilities, reducing the carrying value to reflect lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down. The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred. 21 Employment benefits Accounting policy for employee benefits Short-term employee benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled. Defined contribution superannuation expense Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred. 2021 2020 $ $ Current liabilities Annual leave 399,559 126,320 Long service leave 832 128 400,391 126,448 Notes to the consolidated financial statements
For the year ended 30 June 2021
22
Provisions
Current liabilities
Contingent consideration
Warranties
Non-current liabilities
Contingent consideration
Contingent consideration
2021
$
2020
$
3,538,664
-
267,031
18,227
3,538,664
285,258
5,675,342
313,500
9,214,006
598,758
The contingent consideration relates to the acquisition of Haldon Industries and ProSol Pty Ltd and represents the cash
component of the contingent consideration. It is measured at the present value of the estimated liability.
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
2021
Carrying amount at the start of the year
Additions through business combinations (note 35)
Payments
Unused amounts reversed
Carrying amount at the end of the year
Accounting policy for provisions
Contingent
consideration Warranties
$
$
580,531
8,900,506
(267,031)
-
18,227
-
-
(18,227)
9,214,006
-
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past
event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time
value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the
provision resulting from the passage of time is recognised as a finance cost.
23
Issued Capital
Ordinary shares - fully paid
158,370,242
140,889,052
100,996,733
89,874,533
2021
Shares
2020
Shares
2021
$
2020
$
57
SCIDEV LTD 2021ANNUAL REPORT
58
SCIDEV LTD 2021ANNUAL REPORT23 Issued capital continued Movements in ordinary share capital Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. (a) Share placement and shares issued to service provider • 30 June 2020 On 20 September 2019 SciDev Limited announced the placement of 16,000,000 new ordinary shares with local institutional and sophisticated investors at an issue price of $0.26 per share. The company issued 192,307 ordinary shares to the advisor assisting with the placement for services rendered. • 30 June 2021 On 24 July 2020 SciDev Limited announced the placement of 7,692,308 new ordinary shares with two leading Australian Fund Managers at an issue price of $0.65 per share. Details Date Shares Issue price $ Balance 1 July 2019 107,263,157 76,899,789 Share placement (a) 20 September 2019 16,000,000 $0.260 4,160,000 Options exercised 3 October 2019 100,000 $0.250 25,000 Options exercised 3 October 2019 200,000 $0.250 50,000 Options exercised 3 October 2019 2,250,000 $0.250 562,500 Options exercised 1 November 2019 200,000 $0.250 50,000 Options exercised 19 November 2019 500,000 $0.250 125,000 Options exercised 19 November 2019 50,000 $0.250 12,500 Shares issued to service provider (a) 19 November 2019 192,307 $0.260 50,000 Options exercised 19 November 2019 650,000 $0.250 162,500 Shares issued to acquire ProSol Australia Pty Ltd (c) 25 November 2019 684,000 $0.590 403,560 Options exercised 13 December 2019 675,000 $0.120 81,000 Options exercised 16 January 2020 350,000 $0.120 42,000 Options exercised 10 February 2020 75,000 $0.120 9,000 Options exercised 27 February 2020 325,000 $0.120 39,000 Shares issued to acquire Highland Fluid Technology Inc. (d) 28 February 2020 11,349,588 $0.650 7,377,232 Options exercised 26 June 2020 25,000 $0.120 3,000 Share issue expenses - $0.000 (299,598) Options exercised - transfer from share-based payments reserve - $0.000 122,050 Balance 30 June 2020 140,889,052 89,874,533 Share placement (a) 24 July 2020 7,692,308 $0.650 5,000,000 Options exercised 29 July 2020 125,000 $0.120 15,000 Shares issued to the vendor of ProSol Australia Pty Ltd (c) 29 July 2020 436,959 $0.600 262,175 Share purchase plan (b) 21 August 2020 3,076,923 $0.650 2,000,000 Options exercised 17 November 2020 800,000 $0.100 80,000 Options exercised 26 November 2020 125,000 $0.120 15,000 Options exercised 15 January 2021 75,000 $0.120 9,000 Options exercised 3 May 2021 50,000 $0.120 6,000 Shares issued to vendor of the Haldon Industries business (e) 12 May 2021 5,100,000 $0.770 3,927,000 Share issue expenses - $0.000 (191,975) Balance 30 June 2021 158,370,242 100,996,733 Notes to the consolidated financial statements
For the year ended 30 June 2021
23
Issued capital continued
(b)
Share purchase plan
•
30 June 2021—On 21 August 2020 SciDev Limited issued 3,076,923 new ordinary shares at $0.65 per share pursuant to a
Share Purchase Plan (SPP).
(c)
Shares issued to acquire ProSol Australia Pty Ltd
•
•
30 June 2020—On 25 November 2019 SciDev Limited issued 684,000 ordinary shares at $0.59 per share to acquire ProSol
Australia Pty Ltd.
30 June 2021 - On 29 July 2020 SciDev Limited issued 436,959 ordinary shares at $0.60 per share to the vendor of ProSol
Australia Pty Ltd (ProSol) being part of the first tranche of milestoned consideration under the terms of acquisition of
ProSol Australia Pty Ltd (see note 24).
(d) Shares issued to acquire Highland Fluid Technology Inc
- 30 June 2020
On 28 February 2020 SciDev Limited issued 11,349,588 ordinary shares at $0.65 per share to acquire Highland Fluid Technology Inc.
(e)
Shares issued to the vendor of Haldon Industries
•
30 June 2021—On 12 May 2021 SciDev Limited issued 5,100,000 ordinary shares at $0.77 per share to acquire the Haldon
Industries business (refer note 35).
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it
can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce
the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as
total borrowings and lease liabilities (current and non-current) less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value
adding relative to the current company's share price at the time of the investment. The consolidated entity is not actively
pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to
maximise synergies.
There are no externally imposed capital requirements.
The capital risk management policy remains unchanged from the 2020 Annual Report.
The consolidated entity monitors capital on the basis of its working capital position (i.e. liquidity risk). The net working capital
(current assets less current liabilities) of the consolidated entity at 30 June 2021 was $3,070,962 (2020: $2,548,047).
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from
the proceeds.
59
SCIDEV LTD 2021ANNUAL REPORT
60
SCIDEV LTD 2021ANNUAL REPORT24 Other equity The contingent consideration relates to the acquisition of ProSol Pty Ltd and represents the fair value of the consideration to be settled by the issue of SciDev Ltd shares. 25 Reserves Foreign currency reserve The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign operations. Share-based payments reserve The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services. Movements in reserves Movements in each class of reserve during the current and previous financial year are set out below: 2021 2020 $ $ Contingent consideration 307,800 569,975 2021 2020 $ $ Opening balance 569,975 - Acquisition of ProSol Pty Ltd - 569,975 Issue of shares (262,175) - Closing balance 307,800 569,975 2021 2020 $ $ Revaluation reserve 810,289 - Foreign currency reserve (1,117,033) (36,310) Share-based payments reserve 331,814 168,987 25,070 132,677 Revaluation Foreign currency Share-based payments Transactions with non-controlling reserve reserve reserve interests Total $ $ $ $ $ Balance at 1 July 2019 - - 2,855,902 (645,199) 2,210,703 Foreign currency translation - (36,310) - - (36,310) Share-based payments - - 199,029 - 199,029 Options exercised and lapsed - - (2,885,944) - (2,885,944) Transfer to accumulated losses - - - 645,199 645,199 Balance at 30 June 2020 - (36,310) 168,987 - 132,677 Revaluation - gross 1,217,987 - - - 1,217,987 Deferred tax (407,698) - - - (407,698) Foreign currency translation - (1,080,723) - - (1,080,723) Share-based payments - - 162,827 - 162,827 Balance at 30 June 2021 810,289 (1,117,033) 331,814 - 25,070 Notes to the consolidated financial statements
For the year ended 30 June 2021
Notes to the consolidated financial statements
For the year ended 30 June 2021
Notes to the consolidated financial statements
For the year ended 30 June 2021
26
Dividends
26
There were no dividends paid, recommended or declared during the current or previous financial year.
Dividends
Dividends
26
There were no dividends paid, recommended or declared during the current or previous financial year.
27
There were no dividends paid, recommended or declared during the current or previous financial year.
27
Financial instruments
Financial risk management objectives
Financial instruments
27
Financial instruments
Financial risk management objectives
The consolidated entity's activities 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 entity's overall risk management program focuses on the
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk
consolidated entity. The consolidated entity does not enter into or trade financial instruments, including derivative financial
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the
instruments for speculative purposes.
consolidated entity. The consolidated entity does not enter into or trade financial instruments, including derivative financial
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
instruments for speculative purposes.
Risk management is carried out by company management and the Board of Directors. Financial risks are identified and
consolidated entity. The consolidated entity does not enter into or trade financial instruments, including derivative financial
evaluated and where considered necessary strategies are put in place to investigate and/or minimise such risks.
instruments for speculative purposes.
Risk management is carried out by company management and the Board of Directors. Financial risks are identified and
evaluated and where considered necessary strategies are put in place to investigate and/or minimise such risks.
Market risk
Risk management is carried out by company management and the Board of Directors. Financial risks are identified and
evaluated and where considered necessary strategies are put in place to investigate and/or minimise such risks.
Market risk
Foreign currency risk
Market risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a
Foreign currency risk
currency that is not the entity’s functional currency. The consolidated entity has a trade finance facility utilised for the purchase
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a
Foreign currency risk
of US$ denominated invoices. Purchases through the facility are transacted at the prevailing spot A$/US$ exchange rate and the
currency that is not the entity’s functional currency. The consolidated entity has a trade finance facility utilised for the purchase
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a
outstanding amount under the facility is always denominated in A$. The consolidated entity has not entered into any foreign
of US$ denominated invoices. Purchases through the facility are transacted at the prevailing spot A$/US$ exchange rate and the
currency that is not the entity’s functional currency. The consolidated entity has a trade finance facility utilised for the purchase
currency hedging contracts during the year.
outstanding amount under the facility is always denominated in A$. The consolidated entity has not entered into any foreign
of US$ denominated invoices. Purchases through the facility are transacted at the prevailing spot A$/US$ exchange rate and the
currency hedging contracts during the year.
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the
outstanding amount under the facility is always denominated in A$. The consolidated entity has not entered into any foreign
reporting date were as follows:
currency hedging contracts during the year.
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
reporting date were as follows:
2020
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the
$
2020
$
-
Assets - cash - US dollars
2020
126,688
Assets - receivables - US dollars
$
Assets - cash - US dollars
-
(6,872,057)
Liabilities - US dollars
126,688
Assets - receivables - US dollars
Assets - cash - US dollars
-
(6,872,057)
Liabilities - US dollars
(6,745,369)
Net liabilities denominated in foreign currencies
126,688
Assets - receivables - US dollars
(6,872,057)
Liabilities - US dollars
(6,745,369)
Net liabilities denominated in foreign currencies
The following table shows how profit or loss and equity would have been affected by changes in USD that were reasonably
Net liabilities denominated in foreign currencies
(6,745,369)
possible at the reporting date. The percentage change is the expected overall volatility of the USD, which is based on
The following table shows how profit or loss and equity would have been affected by changes in USD that were reasonably
management's assessment of reasonable possible fluctuations taking into consideration movements over the last 12 months
possible at the reporting date. The percentage change is the expected overall volatility of the USD, which is based on
The following table shows how profit or loss and equity would have been affected by changes in USD that were reasonably
each year and the spot rate at each reporting date.
management's assessment of reasonable possible fluctuations taking into consideration movements over the last 12 months
possible at the reporting date. The percentage change is the expected overall volatility of the USD, which is based on
each year and the spot rate at each reporting date.
management's assessment of reasonable possible fluctuations taking into consideration movements over the last 12 months
2021
$
2021
$
1,731,680
2021
1,219,796
$
1,731,680
(3,091,804)
1,219,796
1,731,680
(3,091,804)
(140,328)
1,219,796
(3,091,804)
(140,328)
(140,328)
each year and the spot rate at each reporting date.
AUD strengthened
Effect on profit
AUD strengthened
before tax
Effect on profit
AUD strengthened
before tax
14,033
Effect on profit
before tax
14,033
% change
% change
10%
% change
10%
Effect on equity
Effect on equity
14,033
Effect on equity
14,033
AUD weakened
Effect on profit
AUD weakened
before tax
Effect on profit
AUD weakened
before tax
(14,033)
Effect on profit
before tax
(14,033)
% change
% change
10%
% change
10%
Effect on equity
Effect on equity
(14,033)
Effect on equity
(14,033)
10%
14,033
AUD strengthened
14,033
% change
% change
10%
% change
10%
Effect on profit
before tax
Effect on profit
before tax
674,537
Effect on profit
before tax
674,537
AUD strengthened
Effect on equity
AUD strengthened
Effect on equity
674,537
Effect on equity
674,537
10%
(14,033)
(14,033)
AUD weakened
% change
% change
10%
% change
10%
Effect on profit
before tax
Effect on profit
before tax
(674,537)
Effect on profit
before tax
(674,537)
AUD weakened
Effect on equity
AUD weakened
Effect on equity
(674,537)
Effect on equity
(674,537)
2021
2021
US Dollar
2021
US Dollar
US Dollar
2020
2020
US dollar
2020
US dollar
US dollar
The actual foreign exchange gain for the year ended 30 June 2021 was $200,265 (2020: $83,123).
674,537
674,537
10%
10%
(674,537)
(674,537)
The actual foreign exchange gain for the year ended 30 June 2021 was $200,265 (2020: $83,123).
Price risk
The actual foreign exchange gain for the year ended 30 June 2021 was $200,265 (2020: $83,123).
The consolidated entity is not exposed to any significant price risk.
Price risk
The consolidated entity is not exposed to any significant price risk.
Price risk
The consolidated entity is not exposed to any significant price risk.
61
SCIDEV LTD 2021ANNUAL REPORT
62
SCIDEV LTD 2021ANNUAL REPORT27 Financial instruments Interest rate risk The consolidated entity was exposed to variable interest rate risks on cash deposits. A reasonably possible increase of 100 basis points (2020: 100 basis points) in interest rates at the reporting date would have increased the profit before tax by $70,100 (2020: $44,818). The percentage change is based on the expected volatility of interest rates using market data and analysts forecasts. As at the reporting date, the consolidated entity had the following deposits: An analysis by remaining contractual maturities in shown in 'liquidity and interest rate risk management' below. Credit risk The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all customers of the consolidated entity based on recent sales experience, historical collection rates and forward-looking information that is available. There was no expected credit loss provision at 30 June 2021 and 30 June 2020 and there were no movements in the provision during the 2021 financial year as there were no changes in the credit risk of customers. There were no debts written off during the 2021 financial year (2020: nil). Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater than 1 year. Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. There is no significant concentration of credit risk to any single entity. The maximum exposure to credit risk at the reporting 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 position 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 entity to maintain sufficient liquid assets (mainly cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable. The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities. Remaining contractual maturities The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position. 2021 2020 Weighted average interest rate Balance Weighted average interest rate Balance % $ % $ Cash at bank and on deposit - 7,010,025 - 4,481,783 Net exposure to cash flow interest rate risk 7,010,025 4,481,783 Notes to the consolidated financial statements
For the year ended 30 June 2021
27
Financial instruments continued
2021
Non-interest bearing
Trade payables and other payables
Contingent consideration
Interest-bearing - fixed rate
Other loans
Lease liability
Total non-derivatives
2020
Non-interest bearing
Trade payables and other payables
Contingent consideration
Interest-bearing - fixed rate
Other loans
Lease liability
Total non-derivatives
1 year or less
$
Between 1 and
2 years
$
Between 2 and
5 years
$
Over 5 years
$
9,528,707
3,568,664
-
2,814,311
-
3,620,000
-
2,551,989
279,883
2,500,671
-
82,532
15,649,360
5,594,865
3,702,532
-
-
-
-
-
1 year or less
$
Between 1 and
2 years
$
Between 2 and
5 years
$
Over 5 years
$
Remaining
contractual
maturities
`$
9,528,707
10,002,975
279,883
5,135,192
24,946,757
Remaining
contractual
maturities
$
8,500,186
267,031
-
313,500
-
182,780
8,949,997
284,918
70,655
669,073
-
-
-
-
-
-
-
-
-
-
8,500,186
580,531
284,918
253,435
9,619,070
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.
28
Fair value measurement
Fair value hierarchy
The following tables detail the consolidated entity's assets and liabilities, measured or disclosed at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
Level 3: Unobservable inputs for the asset or liability
2021
Assets
Equity securities
Equity securities - other
Total assets
Liabilities
Contingent consideration
Total liabilities
Level 1
$
Level 2
$
Level 3
$
Total
$
-
-
-
-
-
2,717,987
2,900
2,720,887
-
-
-
2,717,987
2,900
2,720,887
-
-
9,214,006
9,214,006
9,214,006
9,214,006
63
SCIDEV LTD 2021ANNUAL REPORT
64
SCIDEV LTD 2021ANNUAL REPORT28 Fair value measurement continued Valuation techniques for fair value measurements categorised within level 2 and level 3 Level 2: Equity securities The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The balance in equity securities at 30 June 2021 represents shares held in Tartana Resources Ltd (an unlisted entity) which were exchanged for ordinary shares and options in ASX listed R3D Resources Ltd in July 2021 following the completion of a takeover offer (note 13). All significant inputs required to value the shares in Tartana at 30 June 2021 were based on the quoted market price for the R3D securities (based on the listing price per the prospectus lodged with the ASX). Level 3: Contingent consideration If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. The valuation model for the contingent consideration considers the present value of expected future payments, discounted using a risk-adjusted discount rate. The significant unobservable inputs are the assumed probability-adjusted revenue and EBITDA. The estimate of the input is 89% and an increase to 100% (decrease to 78%) would increase (decrease) fair value by $1,078,473. Level 3 assets and liabilities Movements in level 3 assets and liabilities during the current and previous financial year are set out below: There were no gains or losses relating to level 3 liabilities held at 30 June 2021 and 30 June 2020. Accounting policy for fair value measurement When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Level 1 Level 2 Level 3 Total 2020 $ $ $ $ Assets Equity securities - 1,500,000 - 1,500,000 Equity securities - other - 2,900 - 2,900 Total assets - 1,502,900 - 1,502,900 Liabilities Contingent consideration - - 580,531 580,531 Total liabilities - - 580,531 580,531 Contingent consideration Total $ $ Balance at 1 July 2019 - - Transfers into level 3 580,531 580,531 Balance at 30 June 2020 580,531 580,531 Additions 8,900,506 8,900,506 Payments (267,031) (267,031) Balance at 30 June 2021 9,214,006 9,214,006 Notes to the consolidated financial statements
For the year ended 30 June 2021
28
Fair value measurement continued
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable,
with external sources of data.
29
Key personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is
set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
2021
$
2020
$
1,342,152
97,684
22,139
107,494
940,344
56,386
52,575
360,006
1,569,469
1,409,311
The 30 June 2020 amounts have been restated. Refer to the Remuneration Report for further details.
30
Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Ernst & Young, the auditor of the
company, and its network firms:
Audit services - Ernst & Young
Audit or review of the financial statements
Other services - Ernst & Young*
Tax compliance services
Transaction services
Audit services - Rothsay Chartered Accountants
Audit or review of the financial statements
Other services - Rothsay Chartered Accountants
Tax compliance services
2021
$
2020
$
90,000
6,300
119,620
125,920
215,920
-
-
-
-
-
12,000
40,000
5,000
-
17,000
40,000
* All non-audit services provided by Ernst & Young were performed and paid prior to Ernst & Young's appointment as auditor.
65
SCIDEV LTD 2021ANNUAL REPORT
66
SCIDEV LTD 2021ANNUAL REPORT31 Contingent liabilities The consolidated entity did not have any contingent liabilities other than those disclosed in Note 22 and Note 33 as at 30 June 2021 (2020: none other than those disclosed in Note 22 and Note 33). 32 Commitments There were no capital commitments as at 30 June 2021 for the consolidated entity (2020: nil). 33 Related party transactions Parent entity SciDev Limited is the parent entity. Subsidiaries Interests in subsidiaries are set out in note 36. Key management personnel Disclosures relating to key management personnel are set out in note 29 and the remuneration report included in the directors' report. Transactions with related parties Details of transactions between the consolidated entity and related parties are disclosed below: A director, Simone Watt, is a director of Sinoz Chemicals and Commodities Pty Ltd (Sinoz) and has the capacity to significantly influence the decision-making of the company. The consolidated entity has leased premises from Sinoz during the 2021 financial year. The lease contract was based on normal commercial terms and conditions. Receivable from and payable to related parties There were no trade receivables from or trade payables to related parties at the current and previous reporting date. Loans to/from related parties A director, Simone Watt, is a director of Kanins International Pty Ltd and has the capacity to significantly influence decision making of that company. Kanins International Pty Ltd provided SciDev Limited with a US$350,000 working capital facility that matures on 1 October 2021. The facility is secured against the consolidated entity's inventory and incurs interest at 15% per annum. $nil (2020: $nil) was drawn down on this facility and $nil (2020: $nil) repaid during the 2021 financial year. The loan balance at 30 June 2021 was $nil (2020: $nil). Balances and transactions between the company and its subsidiaries, which are related parties of the company, have been eliminated on consolidation and are not disclosed in this note. Terms and conditions All transactions were made on normal commercial terms and conditions and at market rates. 2021 2020 $ $ Payment for other expenses: Rent paid to other related party 6,030 - Notes to the consolidated financial statements
Notes to the consolidated financial statements
For the year ended 30 June 2021
For the year ended 30 June 2021
Notes to the consolidated financial statements
For the year ended 30 June 2021
34
34
Parent entity information
Parent entity information
Parent entity information
Set out below is the supplementary information about the parent entity.
34
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Statement of profit or loss and other comprehensive income
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit/(loss) after income tax
Profit/(loss) after income tax
Other comprehensive income/(loss) for the year, net of tax
Profit/(loss) after income tax
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income/(loss)
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income/(loss)
Statement of financial position
Statement of financial position
Total comprehensive income/(loss)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
Statement of financial position
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
Total current assets
Total current assets
Total non-current assets
Total current assets
Total non-current assets
Total assets
Total non-current assets
Total assets
Total current liabilities
Total assets
Total current liabilities
Total non-current liabilities
Total current liabilities
Total non-current liabilities
Total liabilities
Total non-current liabilities
Total liabilities
Net assets
Total liabilities
Net assets
Equity
Net assets
Equity
Equity
Issued capital
Issued capital
Other equity
Other equity
Revaluation reserve
Issued capital
Revaluation reserve
Foreign currency reserve
Other equity
Foreign currency reserve
Share-based payments reserve
Revaluation reserve
Share-based payments reserve
Accumulated losses
Foreign currency reserve
Accumulated losses
Share-based payments reserve
Accumulated losses
Total equity
Total equity
Parent
Parent
2021
2021
$
Parent
$
2021
1,127,889
$
1,127,889
195,923
1,127,889
195,923
1,323,812
195,923
1,323,812
2020
2020
$
$
2020
(542,813)
$
(542,813)
-
(542,813)
-
(542,813)
-
(542,813)
1,323,812
(542,813)
Parent
Parent
2021
2021
$
Parent
$
2021
1,399,920
$
1,399,920
2020
2020
$
$
2020
446,893
$
446,893
30,939,634
1,399,920
30,939,634
19,663,035
446,893
19,663,035
32,339,554
30,939,634
32,339,554
20,109,928
19,663,035
20,109,928
829,495
32,339,554
829,495
617,439
20,109,928
617,439
-
829,495
-
829,495
-
829,495
329,094
617,439
329,094
946,533
329,094
946,533
31,510,059
829,495
31,510,059
19,163,395
946,533
19,163,395
31,510,059
101,303,248
101,303,248
307,800
307,800
810,289
101,303,248
810,289
(614,366)
307,800
(614,366)
239,806
810,289
239,806
(70,536,718)
(614,366)
(70,536,718)
239,806
31,510,059
(70,536,718)
31,510,059
19,163,395
90,181,048
90,181,048
569,975
569,975
-
90,181,048
-
-
569,975
-
76,979
-
76,979
(71,664,607)
-
(71,664,607)
76,979
19,163,395
(71,664,607)
19,163,395
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2021 and 30 June 2020, other than
19,163,395
Total equity
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2021 and 30 June 2020, other than
under the terms of the acquisition of the Haldon business by SciDev Water Services Pty Limited (SWSPL). The parent entity
under the terms of the acquisition of the Haldon business by SciDev Water Services Pty Limited (SWSPL). The parent entity
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2021 and 30 June 2020, other than
irrevocably and unconditionally guarantees the due and punctual performance of SWSPL's present and future obligations and
irrevocably and unconditionally guarantees the due and punctual performance of SWSPL's present and future obligations and
under the terms of the acquisition of the Haldon business by SciDev Water Services Pty Limited (SWSPL). The parent entity
the payment of all present and future liabilities of SWSPL under that acquisition agreement.
the payment of all present and future liabilities of SWSPL under that acquisition agreement.
irrevocably and unconditionally guarantees the due and punctual performance of SWSPL's present and future obligations and
Contingent liabilities
Contingent liabilities
the payment of all present and future liabilities of SWSPL under that acquisition agreement.
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
Contingent liabilities
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June 2020.
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June 2020.
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
31,510,059
Significant accounting policies
Significant accounting policies
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June 2020.
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except for
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except for
Significant accounting policies
the following:
the following:
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except for
•
•
the following:
•
•
•
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
indicator of an impairment of the investment.
indicator of an impairment of the investment.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
•
indicator of an impairment of the investment.
67
SCIDEV LTD 2021ANNUAL REPORT
68
SCIDEV LTD 2021ANNUAL REPORT35 Business combinations Current year business combinations Haldon Industries On 12 May 2021, SciDev Water Services Pty Ltd Limited acquired the business operations and assets of Haldon Industries Pty Ltd (Haldon). Haldon is an Australian-based environmental solutions company focused on the water treatment sectors. The acquisition of Haldon provides the consolidated entity with presence and scale in the infrastructure and water verticals via Haldon's key services of water treatment, remediation, groundwater dewatering and onsite liquid waste treatment. The total consideration for the acquisition was $15,407,191 consisting of a cash payment of $2,579,685, 5,100,000 SciDev Limited shares valued at $3,927,000, and contingent consideration of $8,900,506. The contingent consideration is based on the achievement of EBITDA targets for the 2021, 2022, and 2023 financial years with EBITDA subject to a minimum of 20% of revenue. The fair value of the contingent consideration arrangement was estimated using a discounted cash flow (DCF) method. The key assumption was the assumed probability-adjusted EBITDA. The goodwill of $13,687,501 is attributable to the expected future benefits of the acquired business increasing SciDev’s presence and scale in the infrastructure, water, and wastewater verticals via Haldon's key services of water treatment, remediation, groundwater dewatering and onsite liquid waste treatment. As a result of the proximity of the transaction to year end and the business integration activities required, the acquisition accounting is not yet complete and accordingly, the assets acquired and liabilities assumed are measured on a provisional basis. If new information obtained within twelve months from the acquisition date about facts and circumstances that existed at the acquisition date identifies adjustments to the above amounts or any additional provisions that existed at the acquisition date, then the accounting for the acquisition will be revised. Details of the acquisition are as follows: Fair value $ Trade receivables 1,987,329 Plant and equipment 159,432 Office equipment 6,709 Motor vehicles 356,048 Equipment - right-of-use assets 4,723,664 Trade and other payables (385,626) Employee benefits (147,018) Lease liability - equipment (4,723,664) Lease liability - other (257,184) Net assets acquired 1,719,690 Goodwill 13,687,501 Acquisition-date fair value of the total consideration paid and payable 15,407,191 Representing: Cash paid to vendor 1,700,000 Cash payable to vendor 879,685 SciDev Limited shares issued to vendor 3,927,000 Contingent consideration 8,900,506 15,407,191 Cash used to acquire business, net of cash acquired: Acquisition-date fair value of the total consideration transferred 15,407,191 Less: payments to be made in future periods (879,685) Less: contingent consideration (8,900,506) Less: shares issued by company as part of consideration (3,927,000) Net cash used 1,700,000 Notes to the consolidated financial statements
For the year ended 30 June 2021
35
Business combinations continued
Revenue and profit contribution
If the acquisitions had occurred on 1 July 2020, the consolidated pro-forma revenue and profit for the year ended 30 June 2021
would have been as follows:
SciDev Ltd and
its other
controlled
entities
$
Haldon
Industries
$
Total
$
Revenue
9,145,236
40,568,581
49,713,817
Net profit/(loss) for the period after tax
676,070
3,488,359
4,164,429
The acquired business contributed revenues of $1,956,327 and a net loss of $35,391 to the consolidated entity for the period from 12
May 2021 to 30 June 2021.
Acquired receivables
The fair value of acquired trade receivables is $1,987,329 and the gross contractual amount for trade receivables due is $1,987,329.
Consequently, there was no loss allowance recognised on acquisition.
Acquisition-related costs
Acquisition-related costs totalling $206,352 that were not directly attributable to the issue of shares are included in Professional
fees in the statement of profit or loss and other comprehensive income.
Prior year business combinations
The following prior year business combinations were completed during the current financial year and there were no changes to
the provisional balances recorded in the prior year as disclosed in note 33 in the 2020 Annual Report.
On 1 March 2020 SciDev Limited acquired 100% of issued capital of Highland Fluid Technology Inc (Highland). The total
consideration for the acquisition of $7,377,232, consisting of 11,349,588 SciDev Limited shares valued at $0.65 per share. Goodwill of
7,985,050 was recognised on acquisition.
On 28 November 2019 SciDev Limited acquired 100% of the issued capital of ProSol Australia Pty Limited (Prosol). Total
consideration for the acquisition was $2,482,079 consisting of a cash payment of $928,013, 684,000 SciDev Limited shares valued
at $403,560 and contingent consideration of $1,150,506, based on the sales achieved during the earn-out period (payable in cash
and shares) on 31 July 2020 and 31 July 2021. Goodwill of $1,972,506 was recognised on acquisition.
Accounting policy for business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or
other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or
liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the
acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the
proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated
entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest in
the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is
recognised in profit or loss.
69
SCIDEV LTD 2021ANNUAL REPORT
70
SCIDEV LTD 2021ANNUAL REPORT35 Business combinations continued Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer. Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value. 36 Interests in subsidiaries * SciDev (US) LCC is a wholly-owned subsidiary of SciDev International Holdings Pty Ltd. 37 Events after the reporting period On 26 August 2021, the company received confirmation that the loan owing by its subsidiary Highland Fluid Technology Inc, in terms of the Paycheck Protection Program (USA), had been forgiven. The balance outstanding on the loan at 30 June 2021 was US$209,809 (A$279,883). On 4 February 2021, R3D Resources Limited (ASX:R3D) announced an off-market all scrip takeover bid for 100% of the fully paid ordinary shares and 100% of the options in Tartana. The offer closed on 31 July 2021 and at that date R3D had a relevant interest in 99.89% of Tartana shares. SciDev received 13,589,935 R3D shares and 2,727,987 attaching options for the shares it held in Tartana. The options are exercisable at $0.40 within 5 years from the date of issue. Refer to note 13 for further information. No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. Ownership interest Principal place of business / 2021 2020 Name Country of incorporation % % Highland Fluid Technology Inc United States 100% 100% Intec Copper Pty Ltd Australia 100% 100% Intec Envirometals Pty Ltd Australia 100% 100% ProSol Australia Pty Ltd Australia 100% 100% Science Developments Pty Ltd Australia 100% 100% SciDev International Holdings Pty Ltd Australia 100% 100% SciDev (US) LCC* United States 100% 100% SciDev Water Services Pty Ltd Australia 100% - Notes to the consolidated financial statements
For the year ended 30 June 2021
Notes to the consolidated financial statements
For the year ended 30 June 2021
38
Cash flow information
Reconciliation of profit/(loss) after income tax to net cash used in operating activities
38
Cash flow information
Reconciliation of profit/(loss) after income tax to net cash used in operating activities
Profit/(loss) after income tax benefit for the year
Adjustments for:
Profit/(loss) after income tax benefit for the year
Depreciation and amortisation
Share-based payments
Adjustments for:
Write off of assets
Depreciation and amortisation
Net loss/(gain) on disposal of non-current assets
Share-based payments
Paycheck Protection Program (USA) subsidy
Write off of assets
R&D tax incentive
Net loss/(gain) on disposal of non-current assets
Other - non-cash
Paycheck Protection Program (USA) subsidy
Foreign currency differences
R&D tax incentive
Other - non-cash
Change in operating assets and liabilities:
Foreign currency differences
Decrease/(increase) in trade and other receivables
Increase in contract assets
Change in operating assets and liabilities:
Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables
Decrease in income tax refund due
Increase in contract assets
Increase in deferred tax assets
Decrease/(increase) in inventories
Decrease/(increase) in prepayments
Decrease in income tax refund due
Increase in trade and other payables
Increase in deferred tax assets
Increase in contract liabilities
Decrease/(increase) in prepayments
Decrease in deferred tax liabilities
Increase in trade and other payables
Increase/(decrease) in employee benefits
Increase in contract liabilities
Increase/(decrease) in other provisions
Decrease in deferred tax liabilities
Decrease in other operating liabilities
Increase/(decrease) in employee benefits
Increase/(decrease) in other provisions
Decrease in other operating liabilities
Net cash used in operating activities
Non-cash investing and financing activities
Net cash used in operating activities
Non-cash investing and financing activities
Shares issued to acquire ProSol Australia Pty Ltd
Shares issued to acquire Highland Fluid Technology Inc.
Shares issued to acquire ProSol Australia Pty Ltd
Shares issued to the Haldon Industries business
Shares issued to acquire Highland Fluid Technology Inc.
Additions to right-of-use assets
Shares issued to the Haldon Industries business
Paycheck Protection Program (USA) loan converted into a subsidy
Additions to right-of-use assets
Paycheck Protection Program (USA) loan converted into a subsidy
Changes in liabilities arising from financing activities
Changes in liabilities arising from financing activities
Balance at 1 July 2019
Net cash used in financing activities
Changes through business combinations
Balance at 1 July 2019
Recognition on adoption of AASB 16
Net cash used in financing activities
Changes through business combinations
Recognition on adoption of AASB 16
Balance at 30 June 2020
Net cash from/(used in) financing activities
Paycheck Protection Program (USA) loan converted into a subsidy
Balance at 30 June 2020
Acquisition of leases
Net cash from/(used in) financing activities
Changes through business combinations (note 35)
Paycheck Protection Program (USA) loan converted into a subsidy
Exchange differences
Acquisition of leases
Changes through business combinations (note 35)
Exchange differences
Balance at 30 June 2021
2021
$
2021
$
3,452,968
3,452,968
929,771
162,827
39,671
929,771
(27,490)
162,827
(266,459)
39,671
(422,918)
(27,490)
-
(266,459)
13,116
(422,918)
-
13,116
(3,102,445)
(441,551)
1,012,283
(3,102,445)
29,574
(441,551)
(2,647,309)
1,012,283
(183,464)
29,574
909,926
(2,647,309)
262,646
(183,464)
-
909,926
126,925
262,646
(1,164,943)
-
-
126,925
(1,164,943)
-
(1,316,872)
2020
$
2020
(875,238)
$
(875,238)
377,760
199,029
-
377,760
6,902
199,029
-
-
-
6,902
(32,623)
-
(24,643)
-
(32,623)
(24,643)
44,444
-
(4,037,153)
44,444
-
-
(1,364,362)
(4,037,153)
10,987
-
5,647,141
(1,364,362)
-
10,987
(35,986)
5,647,141
(33,606)
-
579,553
(35,986)
(639,670)
(33,606)
579,553
(639,670)
(177,465)
(1,316,872)
(177,465)
2021
$
2021
$
262,175
-
262,175
3,927,000
-
493,382
3,927,000
266,459
493,382
266,459
Lease
liabilities
$
Lease
liabilities
-
$
(31,096)
98,051
-
186,480
(31,096)
98,051
186,480
253,435
(870,760)
-
253,435
493,382
(870,760)
4,980,848
-
(6,507)
493,382
4,980,848
(6,507)
4,850,398
2020
$
2020
403,560
$
7,377,232
403,560
-
7,377,232
186,480
-
-
186,480
-
Total
$
Total
-
$
(376,177)
728,050
-
186,480
(376,177)
728,050
186,480
538,353
(595,260)
(266,459)
538,353
493,382
(595,260)
4,980,848
(266,459)
(20,583)
493,382
4,980,848
(20,583)
5,130,281
Borrowings
$
Borrowings
-
$
(345,081)
629,999
-
-
(345,081)
629,999
-
284,918
275,500
(266,459)
284,918
-
275,500
-
(266,459)
(14,076)
-
-
(14,076)
279,883
Balance at 30 June 2021
279,883
4,850,398
5,130,281
71
SCIDEV LTD 2021ANNUAL REPORT
72
SCIDEV LTD 2021ANNUAL REPORT39 Earnings per share Accounting policy for earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable 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 determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. 40 Share-based payments (a) Options Employee Share Scheme Share-based compensation benefits are provided to employees via the SciDev Employee Share Scheme. At the 2014 Annual General Meeting, shareholders approved the SciDev Employee Share Scheme (the Scheme). All Directors, employees and consultants are eligible to participate in the Scheme. Options granted under the Scheme to eligible participants are for no additional consideration. Options granted under the Scheme carry no dividend or voting rights. The granting of options is at the Board’s discretion and no individual has a contractual right to receive options. On 14 August 2017, the company granted 6.5 million unquoted options to executives and staff (not Directors). The options had an exercise price of $0.25, vested on grant date and had an expiry date of 28 November 2019. The value of the options granted was $30,568. On 16 May 2019 and approved by shareholders on 23 July 2019, the Nomination & Remuneration Committee recommended, and the Board approved that the Company granted 5,200,000 unquoted options, 2,000,000 options have an exercise price of $0.10 and 3,200,000 options have an exercise price of $0.12. All options have an expiry date of 23 July 2022. As noted below, the Managing Director & Chief Executive Officer was ultimately issued 1,600,000 options at an exercise price of $0.10, being less than his contracted entitlement (2,500,000), and less than approved by Shareholders approval (2,000,000), as a result of his voluntary allocation to other executives and new staff. On 16 May 2019, the company granted 2,150,000 unquoted options to executives and staff (not Directors). 1,750,000 have an exercise price of $0.12 and 400,000 have an exercise price of $0.10. All options have an expiry date of 23 July 2022. The first tranche of 1,075,000 options were not subject to any vesting conditions and vested on grant date and the second tranche of 1,075,000 options are subject to a service vesting condition. The value of the options granted was $46,500. 2021 2020 $ $ Profit/(loss) after income tax attributable to the owners of SciDev Limited 3,452,968 (875,238) Number Number Weighted average number of ordinary shares used in calculating basic earnings per share 152,573,170 127,531,298 Adjustments for calculation of diluted earnings per share: Options over ordinary shares 2,178,466 - Weighted average number of ordinary shares used in calculating diluted earnings per share 154,751,636 127,531,298 Cents Cents Basic earnings/(loss) per share 2.26 (0.69) Diluted earnings/(loss) per share 2.23 (0.69) Notes to the consolidated financial statements
For the year ended 30 June 2021
40
Share-based payments continued
On 23 July 2019, following the 16 May 2019 Board approval, the company held a General Meeting which approved the grant of
2,750,000 unquoted options to Directors. All options have an expiry date of 23 July 2022. The Managing Director was granted
1,600,000 options. The options granted to the Managing Director have an exercise price of $0.10. The Non-executive Directors were
granted 1,150,000 options which have an exercise price of $0.12 and which vested on grant date. The value of the options granted
to the Directors was $366,500.
On 3 February 2020, the company granted 150,000 unquoted options to the Chief Financial Officer. The options have an exercise
price of $0.12 and an expiry date of 23 July 2022. The first tranche of 75,000 options were not subject to any vesting conditions and
vested on grant date and the second tranche of 75,000 options are subject to a service vesting condition. The value of the
options granted was $93,000.
On 11 November 2019, the company granted 150,000 unquoted options to an employee. The options have an exercise price of $0.12
and an expiry date of 23 July 2022. The first tranche of 75,000 options were not subject to any vesting conditions and vested on
grant date and the second tranche of 75,000 options are subject to a service vesting condition. The value of the options granted
was $84,000.
Set out below are summaries of options granted:
2021
Grant date
Expiry date
16/05/2019
16/05/2019
23/07/2019
23/07/2019
11/11/2019
03/02/2020
23/07/2022
23/07/2022
23/07/2022
23/07/2022
23/07/2022
23/07/2022
Exercise
price
Balance at
the start of
the year
$0.100
$0.120
$0.100
$0.120
$0.120
$0.120
400,000
1,325,000
1,600,000
250,000
75,000
75,000
3,725,000
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
-
-
-
-
(375,000)
(800,000)
-
-
-
(1,175,000)
-
-
-
-
-
-
-
400,000
950,000
800,000
250,000
75,000
75,000
2,550,000
Weighted average exercise price
$0.109
$0.000
$0.106
$0.000
$0.111
The weighted average share price at the date of exercise of options exercised during the year ended 30 June 2021 was $0.88.
2020
Grant date
Expiry date
10/12/2014
02/02/2017
14/08/2017
28/12/2017
16/05/2019
16/05/2019
23/07/2019
23/07/2019
11/11/2019
03/02/2020
28/11/2019
28/11/2019
28/11/2019
28/11/2019
23/07/2022
23/07/2022
23/07/2022
23/07/2022
23/07/2022
23/07/2022
Exercise
price
Balance at
the start of
the year
$0.250
$0.250
$0.250
$0.250
$0.100
$0.120
$0.100
$0.120
$0.120
$0.120
550,000
2,250,000
650,000
500,000
-
-
-
-
-
-
Granted
Exercised
-
-
-
-
400,000
1,750,000
1,600,000
1,150,000
150,000
150,000
(550,000)
(2,250,000)
(650,000)
(500,000)
-
(400,000)
-
(900,000)
(75,000)
(75,000)
3,950,000
5,200,000
(5,400,000)
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
-
(25,000)
-
-
-
-
(25,000)
-
-
-
-
400,000
1,325,000
1,600,000
250,000
75,000
75,000
3,725,000
Weighted average exercise price
$0.250
$0.112
$0.215
$0.120
$0.109
The weighted average share price at the date of exercise of options exercised during the year ended 30 June 2020 was $0.52.
73
SCIDEV LTD 2021ANNUAL REPORT
74
SCIDEV LTD 2021ANNUAL REPORT40 Share-based payments continued Set out below are the options exercisable at the end of the financial year: The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.06 years (2020: 2.06 years). (b) Performance rights The company granted performance rights to nominated employees on 15 December 2020 and 26 May 2021. The vesting of any performance rights have non-market conditions assigned to each individual based on their business unit, an employment condition and a single market condition of the company share price of $2.00 per share for 10 consecutive days. The performance rights granted on 15 December 2020 and 26 May 2021 vest on 30 June 2022 and 31 October 2022 respectively. Set out below are summaries of performance rights granted under the plan: Set out below are the performance rights exercisable at the end of the financial year: The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 1.22 years. The fair value of performance rights granted was measured using the Monte Carlo simulation pricing model. The valuation model inputs used to determine the fair value at the grant date, are as follows: 2021 Balance at Expired/ Balance at Exercise the start of forfeited/ the end of Grant date Expiry date price the year Granted Exercised other the year 15/12/2020 31/10/2022 $0.000 - 1,408,399 - - 1,408,399 26/05/2021 30/06/2022 $0.000 - 725,000 - - 725,000 - 2,133,399 - - 2,133,399 2021 2020 Grant date Expiry date Number Number 16/05/2019 23/07/2022 1,350,000 1,725,000 23/07/2019 23/07/2022 1,050,000 1,850,000 11/11/2019 23/07/2022 75,000 75,000 03/02/2020 23/07/2022 75,000 75,000 2,550,000 3,725,000 2021 2020 Grant date Expiry date Number Number 15/12/2020 31/10/2022 1,408,399 - 26/05/2021 30/06/2022 725,000 - 2,133,399 - Share price Exercise Expected Dividend Risk-free Fair value Grant date Expiry date at grant date price volatility yield interest rate at grant date 15/12/2020 31/10/2022 $0.780 $0.000 110.00% - 0.03% $0.49740 26/05/2021 30/06/2022 $0.755 $0.000 84.00% - (0.12%) $0.24190 Notes to the consolidated financial statements
For the year ended 30 June 2021
40
Share-based payments continued
(c)
Expenses arising from share-based payment transactions
The total expense arising from share-based payment transactions recognised during the period as part of employee benefits
expense was $162,827 (2020: $199,029).
Accounting policy for share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Black-Scholes or the Monte Carlo models that takes into account the exercise price, the term of the option, the impact
of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the
risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the
consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting
conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of
the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss
for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are
considered to vest irrespective of whether or not that market condition has been met, provided all other non-market conditions
are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the
share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is
recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is
treated as if they were a modification.
75
SCIDEV LTD 2021ANNUAL REPORT
76
SCIDEV LTD 2021ANNUAL REPORTDirector’s Declaration In the directors' opinion: • the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; • the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 2 to the financial statements; • the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2021 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 declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the directors Lewis E Utting Managing Director & Chief Executive Officer 30 August 2021 Sydney Director’s Declaration In the directors' opinion: • the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; • the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 2 to the financial statements; • the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2021 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 declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the directors Lewis E Utting Managing Director & Chief Executive Officer 30 August 2021 Sydney Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent auditor’s report to the members of SciDev Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of SciDev Limited (the Company) and its subsidiaries (collectively
the Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of profit or loss and other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
and of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
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SCIDEV LIMITEDANNUAL REPORT 2021
Carrying Value of Goodwill
Why significant
How our audit addressed the key audit matter
In accordance with the requirements of the Australian
Accounting Standards, the Group is required to test all cash
generating units (CGUs) annually for impairment where
goodwill is present. The Group assesses the recoverable
amount of each CGU using a discounted cash flow forecast
to determined value in use (VIU).
As disclosed in Note 15 to the financial statements, no
impairment was identified as at 30 June 2021.
Assumptions used in the forecast of cash flows are highly
judgmental and inherently subjective. Specifically,
judgement is required to assess the reasonability of forecast
growth rates, margins, operating costs, discount rates and
terminal growth rates.
As a result, of the above and the extent of audit effort and
judgement required, we considered the goodwill carrying
value assessment to be a key audit matter.
With the assistance of our valuation specialists, our audit
procedures included the following:
• We considered the Group’s identification of CGU for
completeness and consistency with Australian
Accounting Standards.
• We assessed whether the impairment testing
methodology used met the requirements of
Australian Accounting Standards.
• We tested the mathematical accuracy of the cash
flow models
• We assessed the basis of preparing cash flow
forecasts and considered the accuracy of the
Group’s previous forecasts and budgets and current
performance.
• We assessed the appropriateness of the cash flow
forecasts, including forecast revenue growth and
margins with reference to current trading
performance, historical growth rates and industry
data and forecasts.
• We assessed the appropriateness the discount rates
and growth rates with reference to publicly available
information for comparable companies in the
industry and markets in which the Group operates.
• We performed sensitivity analyses to evaluate
whether a reasonably possible change in
assumptions could cause the carrying amount of the
CGU to exceed its recoverable amount.
• We cross-checked the recoverable amount and
EBITDA multiples derived from the discounted
cashflow models against a range from comparable
companies and transactions.
• We considered the Group’s net assets against
market capitalisation.
• We evaluated the adequacy of the disclosures
relating to the goodwill carrying values in the
financial report, including those made with respect
to judgements and estimates.
Acquisition of Haldon Industries Pty Ltd
Why significant
How our audit addressed the key audit matter
As described in Note 35, the Group acquired the business
and assets of Haldon Industries Pty Ltd (“Haldon”) in
exchange for cash, equity and contingent consideration
(payable on achievement of EBITDA milestones).
The acquisition assessed to be business combination under
Australian Accounting Standards. In accordance with the
Australian Accounting Standards, the Group has 12 months
from the acquisition date to finalise its business combination
accounting. At 30 June 2021, the Group recognised the
acquired assets, liabilities and contingent liabilities at their
provisional fair values.
The accounting for business combinations is inherently
complex. In particular, the inclusion of contingent
Our audit procedures included the following:
• We read the Business and Asset Sale Agreement and
Amendment Deeds (collectively the “Agreement”)
and assessed the Group’s treatment of the
transaction as a business combination under
Australian Accounting Standards.
• We considered the reasonability of the acquisition
date based on the terms of the Agreement and the
point at which control of Haledon was obtained by
the Group.
In considering the transaction price for the business
combination:
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SCIDEV LIMITEDANNUAL REPORT 2021
Why significant
How our audit addressed the key audit matter
consideration, as part of the transaction price for the
acquisition, and the provisional fair valuation of the acquired
assets, liabilities and contingent liabilities requires
judgement.
For this reason, and due to the significance of the
transaction to the Group’s balance sheet, we considered the
provisional business combination accounting for the
acquisition of Haldon to be a key audit matter.
• We tested the fixed consideration paid by the Group
with reference to share issuance documents and
bank statements.
• We considered the treatment of the contingent
consideration based on terms of the Agreement and
the intent of the parties at the acquisition date.
• We obtained the Group’s provisional calculation of
the contingent consideration amount and assessed
the reasonability of the assumptions used based on
Group’s budgets and forecasts at the time of the
acquisition.
In considering the provisional business combination
accounting:
• We obtained the acquisition balance sheet and
tested its clerical accuracy.
•
On a sample basis, tested the provisional fair values
recognised for the working capital assets and
liabilities acquired.
• We obtained the Group’s calculation of goodwill and
tested the clerical accuracy of the amount
recognised as the difference between the
transaction consideration and the provisional fair
values attributed to acquired assets, liabilities and
contingent liabilities.
• We evaluated the adequacy of the acquisition
disclosures in the financial statements.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2021 annual report, but does not include the financial report
and our auditor’s report thereon. We obtained the Directors’ Report that is to be included in the
Annual Report, prior to the date of this auditor’s report, and we expect to obtain the remaining
sections of the Annual Report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
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SCIDEV LIMITEDANNUAL REPORT 2021
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
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SCIDEV LIMITEDANNUAL REPORT 2021
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the Directors’ Report for the year ended 30
June 2021.
In our opinion, the Remuneration Report of SciDev Limited for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Siobhan Hughes
Partner
Sydney
31 August 2021
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SCIDEV LIMITEDANNUAL REPORT 2021
82
SCIDEV LTD 2021ANNUAL REPORTSciDevLimitedAnnualReport202175|Additional ASX Information Shareholder InformationThe shareholder information set out below was applicable as at 21 October 2021.A. Distribution of equity securitiesAnalysis of numbers of equity security holders by size of holding:Class of equity security Ordinary shares Name Number of Shareholders Number of Shares 1– 1,000591245,7921,001 – 5,0006821,795,0415,001 – 10,0003302,596,39010,001 – 100,00060019,684,507100,001 and over151134,811,5122,354159,133,242B. Substantial holders14.12%Substantial shareholders as at 21 October 2021 are listed below:Perennial Value Management Limited (PVM)Australian Super Pty Ltd7.69%Equity security holders The names of the twenty largest holders of quoted equity securities as at 21 October 2021 are listed below: Name Ordinary shares Number held Percentage of issued shares 15,759,1169.903%13,848,1708.702%7,605,0374.779%7,150,9084.494%6,428,5724.040%5,100,0003.205%5,000,0003.142%4,518,1402.839%3,806,8732.392%3,249,4772.042%2,882,4461.811%2,768,1351.740%2,161,1371.358%2,006,4671.261%1,999,2331.256%1,607,9261.010%1,552,8130.976%1,466,6670.922%1,466,6670.922%NATIONAL NOMINEES LIMITED J P MORGAN NOMINEES AUSTRALIA BNP PARIBAS NOMS PTY LTD CITICORP NOMINEES PTY LIMITED JIANFENG ZHANG & HALDON INDUSTRIES PTY LTD KANINS AUSTRALIA PTY LTD MR LEWIS EDWARD UTTING & MR KEVIN SMITH MR KIERAN GREGORY RODGERS PUNTERO PTY LTD BNP PARIBAS NOMINEES PTY LTD NUOER CHEMICAL AUSTRALIA MR KIERAN GREGORY RODGERS & CALAMA HOLDINGS PTY LTD NATJAD & ASSOCIATED PTY LTD MERRILL LYNCH (AUSTRALIA) MR MARTIN EDWARD MEYER MRS KATHLEEN WATT LONGWIN CAPITAL FINANCE LTD 1,466,6670.922%Top 20 Shareholder Total 91,844,45157.715%SciDevLimitedAnnualReport202175|Additional ASX Information Shareholder InformationThe shareholder information set out below was applicable as at 21 October 2021.A. Distribution of equity securitiesAnalysis of numbers of equity security holders by size of holding:Class of equity security Ordinary shares Name Number of Shareholders Number of Shares 1– 1,000591245,7921,001 – 5,0006821,795,0415,001 – 10,0003302,596,39010,001 – 100,00060019,684,507100,001 and over151134,811,5122,354159,133,242B. Substantial holders14.12%Substantial shareholders as at 21 October 2021 are listed below:Perennial Value Management Limited (PVM)Australian Super Pty Ltd7.69%Equity security holders The names of the twenty largest holders of quoted equity securities as at 21 October 2021 are listed below: Name Ordinary shares Number held Percentage of issued shares 15,759,1169.903%13,848,1708.702%7,605,0374.779%7,150,9084.494%6,428,5724.040%5,100,0003.205%5,000,0003.142%4,518,1402.839%3,806,8732.392%3,249,4772.042%2,882,4461.811%2,768,1351.740%2,161,1371.358%2,006,4671.261%1,999,2331.256%1,607,9261.010%1,552,8130.976%1,466,6670.922%1,466,6670.922%NATIONAL NOMINEES LIMITED J P MORGAN NOMINEES AUSTRALIA BNP PARIBAS NOMS PTY LTD CITICORP NOMINEES PTY LIMITED JIANFENG ZHANG & HALDON INDUSTRIES PTY LTD KANINS AUSTRALIA PTY LTD MR LEWIS EDWARD UTTING & MR KEVIN SMITH MR KIERAN GREGORY RODGERS PUNTERO PTY LTD BNP PARIBAS NOMINEES PTY LTD NUOER CHEMICAL AUSTRALIA MR KIERAN GREGORY RODGERS & CALAMA HOLDINGS PTY LTD NATJAD & ASSOCIATED PTY LTD MERRILL LYNCH (AUSTRALIA) MR MARTIN EDWARD MEYER MRS KATHLEEN WATT LONGWIN CAPITAL FINANCE LTD 1,466,6670.922%Top 20 Shareholder Total 91,844,45157.715%SciDevLimitedAnnualReport202176|Total Ordinary Shares on Issue 159,133,242100.00%B.Voting rightsThe voting rights attaching to each class of equity securities are set out below:(a)Ordinary sharesOn a show of hands every member present at a meeting in person or by proxy shall have one vote and up on a poll eachshare shall have one vote.(b)OptionsNo voting rights.C.Summary of options issuedName Number of Options Number of Holders % Options Issued 1,200,0002Options expiring 23 July 2022 with an exercise price of $0.10 Option holders with more than 20% of above class: 800,00066.6%Lewis Utting Heath Roberts 400,00033.3%1,100,00011Options expiring 23 July 2022 with an exercise price of $0.12 Option holders with more than 20% of above class: 250,00023%250,000 23%Simone Watt Jamiel Muhor Jeffrey Zhang 250,000 23%D. Summary of performance rights issuedName Number of PerformanceRights Number of Holders % Options Issued 1,278,39924Performance rights expiring 31 October 2022 Performance rights holders with more than 20% of above class: 00%725,000 18312,50043%Performance rights expiring 30 June 2022 Performance rights holders with more than 20% of above class: Sean Halpin Jake Reardon 312,500 43%SciDevLimitedAnnualReport202176|Total Ordinary Shares on Issue 159,133,242100.00%B.Voting rightsThe voting rights attaching to each class of equity securities are set out below:(a)Ordinary sharesOn a show of hands every member present at a meeting in person or by proxy shall have one vote and up on a poll eachshare shall have one vote.(b)OptionsNo voting rights.C.Summary of options issuedName Number of Options Number of Holders % Options Issued 1,200,0002Options expiring 23 July 2022 with an exercise price of $0.10 Option holders with more than 20% of above class: 800,00066.6%Lewis Utting Heath Roberts 400,00033.3%1,100,00011Options expiring 23 July 2022 with an exercise price of $0.12 Option holders with more than 20% of above class: 250,00023%250,000 23%Simone Watt Jamiel Muhor Jeffrey Zhang 250,000 23%D. Summary of performance rights issuedName Number of PerformanceRights Number of Holders % Options Issued 1,278,39924Performance rights expiring 31 October 2022 Performance rights holders with more than 20% of above class: 00%725,000 18312,50043%Performance rights expiring 30 June 2022 Performance rights holders with more than 20% of above class: Sean Halpin Jake Reardon 312,500 43%SciDevLimitedAnnualReport202176|Total Ordinary Shares on Issue 159,133,242100.00%B.Voting rightsThe voting rights attaching to each class of equity securities are set out below:(a)Ordinary sharesOn a show of hands every member present at a meeting in person or by proxy shall have one vote and up on a poll eachshare shall have one vote.(b)OptionsNo voting rights.C.Summary of options issuedName Number of Options Number of Holders % Options Issued 1,200,0002Options expiring 23 July 2022 with an exercise price of $0.10 Option holders with more than 20% of above class: 800,00066.6%Lewis Utting Heath Roberts 400,00033.3%1,100,00011Options expiring 23 July 2022 with an exercise price of $0.12 Option holders with more than 20% of above class: 250,00023%250,000 23%Simone Watt Jamiel Muhor Jeffrey Zhang 250,000 23%D. Summary of performance rights issuedName Number of PerformanceRights Number of Holders % Options Issued 1,278,39924Performance rights expiring 31 October 2022 Performance rights holders with more than 20% of above class: 00%725,000 18312,50043%Performance rights expiring 30 June 2022 Performance rights holders with more than 20% of above class: Sean Halpin Jake Reardon 312,500 43% 83
SCIDEV LTD 2021ANNUAL REPORTSciDevLimitedAnnualReport202176|Total Ordinary Shares on Issue 159,133,242100.00%B.Voting rightsThe voting rights attaching to each class of equity securities are set out below:(a)Ordinary sharesOn a show of hands every member present at a meeting in person or by proxy shall have one vote and up on a poll eachshare shall have one vote.(b)OptionsNo voting rights.C.Summary of options issuedName Number of Options Number of Holders % Options Issued 1,200,0002Options expiring 23 July 2022 with an exercise price of $0.10 Option holders with more than 20% of above class: 800,00066.6%Lewis Utting Heath Roberts 400,00033.3%1,100,00011Options expiring 23 July 2022 with an exercise price of $0.12 Option holders with more than 20% of above class: 250,00023%250,000 23%Simone Watt Jamiel Muhor Jeffrey Zhang 250,000 23%D. Summary of performance rights issuedName Number of PerformanceRights Number of Holders % Options Issued 1,278,39924Performance rights expiring 31 October 2022 Performance rights holders with more than 20% of above class: 00%725,000 18312,50043%Performance rights expiring 30 June 2022 Performance rights holders with more than 20% of above class: Sean Halpin Jake Reardon 312,500 43% 84
SCIDEV LTD 2021ANNUAL REPORTDirector’s Declaration In the directors' opinion: • the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; • the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 2 to the financial statements; • the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2021 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 declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the directors Lewis E Utting Managing Director & Chief Executive Officer 30 August 2021 Sydney SciDevLimitedAnnualReport202177|Corporate Directory Directors Vaughan Busby Lewis E Utting Simone Watt Jon Gourlay Dan O’Toole Chairman Managing Director & Chief Executive Officer Non-executive Director Non-executive Director Non-executive Director Company secretary Heath L Roberts Registered office C/-Boardroom Pty LimitedLevel 12, Grosvenor Place 225 George Street Sydney NSW 2000 Phone: 1300 737 760 Principal place of business Unit 1 8 Turbo Road Kings Park NSW 2148 Phone: (02) 9622 5185 Share register Boardroom Pty Limited Level 12 225 George Street Sydney NSW 2000 Phone: 1300 737 760 Auditor Ernst & Young 200 George St Sydney NSW 2000 Stock exchange listing SciDev Limited shares are listed on the Australian Securities Exchange (ASX code: SDV) Website www.scidev.com.au Corporate governance statement www.scidev.com.au/about-us/governance/ 85
SCIDEV LTD 2021ANNUAL REPORT ABN 25 001 150 849
ADDRESS
Unit 1, 8 Turbo Road,
Kings Park NSW 2148,
Australia
PHONE:
+61 2 9622 5185
EMAIIL:
projects@scidev.com.au
WEBSITE:
www.scidev.com.au
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SCIDEV LIMITEDANNUAL REPORT 2021