ENERGY TECHNOLOGIES LIMITED
ABN 38 002 679 469
Annual Financial Report
for the year ended 30 June 2018
For personal use only
Energy Technologies Limited – 2018 Annual Report
Corporate Information
ABN 38 002 679 469
Directors
Alfred J. Chown (Chairman/Managing Director)
Gary A. Ferguson (Non-executive Director)
Philip W. Dulhunty (Non-executive Director)
Yulin Hu (Non-executive Director)
Matthew Driscoll (Non-executive Director)
Meiping Hu (Alternate Director to Yulin Hu)
Company Secretary
Gregory R. Knoke
Registered Office
102 Old Pittwater Road
BROOKVALE NSW 2100
Bankers
National Australia Bank Limited
NAB House, 255 George Street
SYDNEY NSW 2000
Share Register
Computershare Investor Services Pty Ltd
Level 4, 60 Carrington Street
Sydney NSW 2000
Telephone:- (02) 8234 5000
Facsimile:- (02) 8235 8150
Auditors
Nexia Sydney Audit Pty Ltd
Chartered Accountants
Level 16
1 Market Street
SYDNEY NSW 2000
Telephone:- (02) 9251 4600
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Energy Technologies Limited – 2018 Annual Report
Contents
Chairman’s Report
Directors’ Report
Remuneration Report (audited)
Corporate Governance Statement
Auditor’s Independence Declaration
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
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Energy Technologies Limited – 2018 Annual Report
Chairman’s Report
EGY has again reported a loss after tax and minorities for the financial year but continues to trade with the support of its major
shareholders and financial backers. Sales in its wholly owned subsidiary Bambach Wires and Cables Pty Ltd (Bambach) have
expanded and margins have improved substantially, however margin improvement took longer to develop than anticipated
following the installation of significant manufacturing equipment in late 2017.
Group losses were exacerbated by a material one off additional stock write down of $340,000 and by interest expense payable
on the substantial debt load carried by the company of $1.485m.
Bambach itself excluding the one off stock write down reported an EBITDA result of $123,443.
New products developed by the company are selling well and prospects in this regard are bright with significant new products
to come on stream over the next 6 to 12 months - especially cable products geared to the defence industry.
The company has developed a very strong sales capability and now looks to improving its manufacturing capacity and
efficiency to support its sales operations.
The award in May 2018 of a Regional Jobs and Investment Program (RJIP) grant of $2.92 million by the Federal Government
to EGY’s wholly owned subsidiary Bambach means the company is now in a positon to vastly improve its manufacturing
capacity and efficiency which will allow strong margin improvement and much faster supply. The company is currently
exploring the best way to maximise use of the grant to this purpose.
Overall the market for specialised and industrial cables is continuing to improve and the suite of products developed by
Bambach over the past four years should see strong demand for the foreseeable future.
The company will update the market as soon as it settles on its way forward with implementation of the RJIP grant.
Alfred J Chown
Chairman
Sydney, 28 September 2018
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Energy Technologies Limited – 2018 Annual Report
Directors’ Report
Your Directors submit their report for the year ended 30 June 2018
.
DIRECTORS
The names and details of the Company's Directors in office during the year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
Alfred J. Chown, B.Econ, (Age 57) (Chairman/Managing Director) Appointed 4 July 1997.
Born in 1960, in Sale, Victoria, Mr Chown returned in 2012 from residing in Hong Kong. In 1987 he co-founded E.L. Consult
Ltd an executive search provider that prior to being sold to the Clarius group (ASX:CND) and renamed Lloyd Morgan in
March 2007, had an extensive network of offices throughout Hong Kong, China, Singapore and Malaysia. Mr Chown
continues to provide his services to Lloyd Morgan in a regional role. In the early 1990’s Mr Chown also co-founded Dulhunty
Engineering Ltd and in 1997 this company established Dulhunty Yangzhou Line Fittings Co Ltd, a manufacturer of line fittings
for the electric power transmission and distribution industry. In 2003 Mr Chown was the driving force to merge these
businesses together with Dulhunty Industries Pty Limited of Australia to form Energy Technologies Limited. Mr Chown is a
former Chairman of the Australian Chamber of Commerce in Hong Kong and has extensive commercial experience in both
Australia and Asia. Mr Chown is also a member of the Remuneration and Nomination Committees of the company.
Philip W. Dulhunty OAM (Age 94) (Non-Executive Director) Appointed 3 December 2014
Founder of Dulhunty Power (Aust) Pty Limited, importers, exporters and distributors of electrical power transmission
equipment. Honorary Life Member and distinguished member of the international electrical transmission industry body,
CIGRE and Honorary Life Senior member of IEEE. Holder of Centenary Medal for Contribution to Australian Industry. Mr
Dulhunty was also the recipient of the Institute of Engineering and Technology (IET) James N Kirby Medal in 2007. Mr
Dulhunty was previously a Director of the company from 31 March 2003 to 1 October 2012. Mr Dulhunty is also a member of
the Audit and Nomination Committees of the company.
Gary A Ferguson CA (Age 75) (Non-executive Director). Appointed 1 October 2012
Mr Ferguson is a qualified accountant. During his career, he has worked for manufacturing companies as a cost accountant,
lectured in accounting (post-certificate Cost Accounting) with the then Department of Technical Education, developed the
methodology associated with risk analysis profiles for capital expenditure projects in both the cable and abrasive sectors and
providing consultant services to these companies. Mr Ferguson relocated to Mid-North Coast NSW in 1975 and gained a very
broad level of experience, owning and operating businesses in the construction, hospitality, heavy transport and earthmoving
and quarry industries. In 1992 he acquired a public practice in Kempsey, specializing in providing commercial clients with
advice in corporate structure, taxation, reporting and financial management areas, including providing associated legal
services from in house partners. Mr Ferguson is a Member of both Chartered Accountants Australia and New Zealand (CA)
and Certified Practising Accountants in Australia (CPA). Mr. Ferguson is also Chairman of the Audit Committee and a
member of the Nomination and Remuneration Committees of the company.
Yulin Hu (Age 50) (Non-executive Director) Appointed 25 November 2015
Mr Yulin Hu is an Australian resident and leading businessman whose roles include the President of China City Construction
Holdings Limited, which owns a construction business in China with approximately 6bn RMB (A$1.1bn) turnover.
Meiping Hu (Age 29) (Alternate Director to Yulin Hu) Appointed 25 November 2015
Ms Meiping Hu has a Bachelor degree in Commerce at the University of South Australia and a Master of Advanced
Professional Accounting at Macquarie University. Ms Hu is currently a practising accountant and a member of CPA Australia.
Ms Hu has previously worked in Fujian HongSheng Construction Group Co., Ltd and an accounting practice in Hong Kong,
and has been assisting Mr Hu in various matters in Australia for over eight years such as property investment and imports
and exports.
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Energy Technologies Limited – 2018 Annual Report
Directors’ Report (Cont’d)
Matthew Driscoll (Age 54) (Non- executive Director) Appointed 20 December 2016
raisings and building strategic political,
Mr Driscoll has over 30 years’ experience in capital markets and the financial services industry, with major financial
institutions including Hartleys Limited, William Noall Limited, Burdett Buckeridge and Young Limited, Westpac and ANZ
McCaughan Securities Limited. He is an accomplished company director in roles with listed and private companies,
undertaking leadership positions on the Board (as Chairman) and on various committees (including audit and risk
committees). Mr Driscoll has significant experience in international business growth, mergers and acquisitions, equity and
is Chairman
debt
of BuyMyPlace.com.au Limited an ASX listed disruptive technology property services company, Chairman of Powerwrap, an
Australian financial services company that offers wealth managers, financial advisers and investment professionals looking to
start an advisory business an efficient, customisable and unconstrained next-generation platform service for delivering
efficient client outcomes, Non-Executive Director of Smoke Alarms Holdings Limited, a market leader in servicing smoke
alarms in rental properties in Australia and recently commenced operations in New Zealand, Non-Executive Director of
Workspace Australia, a multi-regional business incubator network in Central Victoria and Non-Executive Director and
Responsible Manager of Advocate Strategic Investments(ASI). AFSL: 224560. ASI is a Melbourne-based independent
investment management firm that provides institutional and sophisticated investor clients with customised alternative
investment strategies.
financial and commercial alliances. Mr Driscoll
COMPANY SECRETARY
Gregory R. Knoke, B. Com, CA (Age 65) (Company Secretary and Chief Financial Officer) Appointed 30 April 2003.
Director of Cogenic Pty Limited. Mr Knoke was a director of Energy Technologies Limited from May 2000 until 30 April 2003,
resigned upon acceptance of the position of CFO. Born in 1952, educated at University of NSW and graduated in 1973 with
major in accountancy, he holds a Bachelor of Commerce degree with merit. Mr Knoke is a Chartered Accountant and
Associate member of Chartered Accountants Australia and New Zealand since 1979, an affiliate member of Chartered
Secretaries of Australia and member of the Australia China Business Council. Business consultant and advisor, with
extensive work experience throughout Asia and Europe, Mr Knoke spent 13 years in Hong Kong as Asian Group Financial
Controller and Director for BIL Asia Holdings Limited and subsidiaries of the Brierley Investments Limited Group.
PRINCIPAL ACTIVITIES
EGY’s principal activities during the year were:
The manufacture and sale of specialist industrial cables through wholly owned subsidiary Bambach Wires and Cables
Pty Limited (BWC):
Driving organic growth and organisational change in BWC;
Seeking other products, businesses and opportunities for the Group.
REVIEW AND RESULTS OF OPERATIONS
EGY has reported a consolidated loss after tax and minorities for FY2018 of $3,109,926 (FY2017 loss after tax and minorities
$2,941,203). Wholly owned subsidiary Bambach Wires and Cables Pty Ltd (BWC) reported a loss after tax of $1,146,960
(FY2017 loss $1,484,904). BWC reported a loss after tax of $654,935 for the HY to 31 December 2017. The full year result is
impacted by a $340,000 write down against inventory. BWC revenue for FY2018 was 16% higher than reported for FY2017.
New orders for FY2018 were 10% up on the previous period. Overall margins were also improved, with an average 5% uplift
after allowing for scrap content.
Included in FY2018 revenue is $1,148,210 R&D Grant (FY2017 R&D Grant revenue $1,189,865) which partially recovered
the continuing significant research and development expenditure undertaken by BWC in new product development, cable
projects and testing.
The company continues to be supported by its investors and over the period has raised required funds to support the
business. Funds totaling $1,990,841 have been raised through further loans.
The loss position of the company continues to be of great concern but as previously announced the company has been
awarded an RJIP Grant of $2.9m which it is in the process of prosecuting. Further announcements on progress in this regard
will be made over the coming months.
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Energy Technologies Limited – 2018 Annual Report
Directors’ Report (Cont’d)
STATE OF AFFAIRS
Secured Debenture Notes totaling $6,816,000 raised in FY2017 have a maturity date of 31 December 2020 but are
redeemable at anytime after 31 July 2018 and are therefore classified as a current liability. However, the Directors do not
expect the Debenture Notes will be redeemed within the twelve month period following the date of this report.
During the financial year the group repaid $297,705 (2017: $1,970,170) of both long and short term interest bearing debt.
Subsidiary Bambach Wires and Cables Pty Ltd has raised a further $1,668,218 under unsecured Loan Facilities during
FY2018 (FY2017 $500,000).
In relation to the Going Concern position of the Group, please refer to the details set out in Note 1(c) to the Financial
Statements.
DIVIDENDS
No dividends were paid or recommended by the parent company EGY this financial year.
NON-AUDIT SERVICES
During the year Nexia Sydney Pty Ltd, an associate of the Company’s auditor performed certain other services in addition to
their statutory duties.
The board has considered the non-audit services provided during the year by the auditor’s associate firm and in accordance
with written advice provided by resolution of the audit committee, is satisfied that the provision of those non-audit services
during the year by the auditor’s associate firm is compatible with, and did not compromise, the auditor independence
requirements of the Corporations Act 2001.
The reasons for this are that all non-audit services were subject to the corporate governance procedures adopted by the
Company and have been reviewed by the audit committee to ensure they do not impact the integrity and objectivity of the
auditor; and the non-audit services provided do not 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, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making
capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.
Details of the amounts paid to the auditor and their associates for audit and non-audit services provided during the year are
set out in note 6 to the financial statements. In addition, amounts paid to other auditors for other statutory audit services have
been disclosed in that note.
EVENTS SUBSEQUENT TO REPORTING DATE
There has not arisen since the end of the financial period any other matter of circumstance which, in the opinion of the
directors of the Company, significantly affects the operation of the Company, the results of those operations, or the state of
affairs of the Company in subsequent financial years.
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Energy Technologies Limited – 2018 Annual Report
Directors’ Report (Cont’d)
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Refer Subsequent Events note above.
Future Developments and Risks
Opportunities
In line with the Business Plan the company continues to invest significant funds in updating and improving equipment. Further
equipment has been identified and is under order for delivery in FY2019. This equipment will further increase the capacity
and efficiency of the factory is and lead to improved margins on products made. The new equipment will also allow
manufacture of a much larger range of cable and larger sizes of cable, reducing exposure to price variations from suppliers
and foreign exchange risk.
As stated previously, the company has invested significant time and funds in developing a range of specialist cables for
infrastructure and defence related projects, to expand its range of products to supply to market areas where it was deemed
there would be significant growth. The decision was made to focus initially on rail and especially rail signalling cables and
build from there with cables for road signalling, tunnelling, rolling stock and then defence related cables for submarines, patrol
boats and frigates/destroyers. Cables for rolling stock, tunnelling and defence related projects, low smoke zero halogen 125
degree cables for tunnels and fire rated cables are now tested and approved or in the final stages of approval.
Typically to conceive a new product, undertake market research, make samples, confirm pricing and cost competitiveness,
refine the product, undertake in house testing, submit for independent type testing and then receive approval takes between
twelve to eighteen months. This process remains ongoing, although much has been achieved with the launch of the suite of
products to date.
The opportunity for the company continues to lie in the fact that it has multiple products, all Australian made and coming on
stream to meet growth in infrastructure and defence spending at a time when markets are becoming increasingly protective.
The company was successful in being awarded a $2.92m Regional Jobs and Investment Program federal government grant.
The management and board are currently actively pursuing the best way for the company to maximise benefit from the grant
award. The company will update the market as soon as it has an agreed and detailed outcome in this regard.
Risks
The company needs to continue upgrading its manufacturing facilities to enable it to meet expected capacity requirements
and produce locally an expanded range and size of cables. Failure to do so will substantially limit growth and will not allow
anticipated margin improvement. The company will require further significant new equipment purchases and to fully reach a
capacity level to efficiently meet expected demand will need to consider acquiring increased factory land and buildings.
A rise in the AUD against the USD will impact negatively on the competitiveness of the business. At AUD/USD 0.80 the
business may be less competitive with imports of like quality. A fall from this level is favourable to the business whilst a rise is
unfavourable.
The company is a small player in a market where there are a number of very large competitors. The company is very aware
that to compete it must maintain a point of difference. To this end it must continue with a very active research and
development agenda, developing new cables and continuously upgrading existing cables. It must also continue to develop its
manufacturing processes and adopt a continuous upgrade program. It must also continue to excel in the level of service that
it provides. Any failure in any of these areas will bring significant risk to the business.
The company continues to report a loss and has not been profitable for an extended period. This weakness has been
supported financially by significant funds raising, which has been successfully undertaken over the past three years and
continued in FY2018 with the issue of further Debenture Notes as well as loans, including loans from Directors. The company
continues to be without bank facility support. The company must deliver to maintain the support of its financiers and in this
respect It must deliver on the small objectives as well as the larger objective of returning to profitability. Thus it must continue
to deliver on bringing new products to market, on increasing productivity to maintain support on its road to building a robust
sustainable business. Failure to meet accepted milestones on this path will pose a risk to continued financial support.
The company has based its business plan on the belief that both Federal and State governments will proceed with planned
infrastructure and defence spending. Now significant projects are proceeding. Any cancellation of these plans or continued
delay will impact negatively on the opportunities that lie ahead for the company.
The company has developed products some of which still require final testing and approval. Any failure to pass testing in a
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Energy Technologies Limited – 2018 Annual Report
timely manner or not obtain approval will impact negatively on the company’s performance.
Directors’ Report (Cont’d)
ENVIRONMENTAL REGULATION AND PERFORMANCE
The group operates a factory in Brookvale, Sydney which is required to comply with local planning laws, and with State and
Commonwealth Environmental laws. The company considers that the factory’s operation is currently compliant, and is not
expecting any adverse impact as a result of the environmental regulation.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
Indemnification
The Company has entered into Deeds of Indemnity and Access with persons who are an Officer or Director of the Company
or a related body corporate, indemnifying such persons against a liability incurred by them in their capacity as an Officer or
Director, including costs and expenses of defending legal proceedings and providing them with access to company records
where a claim is made or threatened against such Officer or Director.
Insurance Premiums
The Company has not, during or since the end of the financial year, in respect of any person who is or has been an auditor of
the Company or a related body corporate paid or agreed to pay a premium in respect of a contract insuring against a liability
for costs or expenses of defending legal proceedings.
The Company has paid insurance premiums in respect of Directors' and Officers' liability and legal expense insurance for
Directors and Officers of the Company. In accordance with subsection 300(9) of the Corporations Act 2001, further details
have not been disclosed due to confidentiality provisions contained in the insurance contract.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the company or 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 any part of those
proceedings.
The company was not a party to any such proceedings during the year.
EMPLOYEES
The consolidated entity employed 61 employees as at 30 June 2018 (2017: 72 employees).
REMUNERATION REPORT
The remuneration report is set out on page 12 and forms part of the Directors’ Report for the financial year ended 30 June
2018.
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Energy Technologies Limited – 2018 Annual Report
Directors’ Report (Cont’d)
DIRECTORS' MEETINGS
The numbers of meetings of Directors (including meetings of Committees of Directors) held during the year and the number of
meetings attended by each director were as follows:
Board of
Directors
Remuneration
Committee
Audit
Committee
Nomination
Committee
Number of meetings held:
Number of meetings attended:
Alfred J. Chown
Gary A. Ferguson
Philip W. Dulhunty
Matthew Driscoll
Yulin Hu
Meiping Hu (Alternate Director to Yulin Hu)
Committee Membership
7
7
6
6
5
6
2
1
1
-
-
1
-
-
2
-
2
2
2
-
-
1
1
1
1
-
-
-
At the date of this report, the company’s committees were comprised as follows:
Audit Committee:
Matthew Driscoll
Gary A. Ferguson
Philip W. Dulhunty
Nomination Committee:
Alfred J. Chown
Gary A. Ferguson
Philip W. Dulhunty
Remuneration Committee:
Matthew Driscoll
Alfred J. Chown
Gary A. Ferguson
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE
The relevant interest of each director in the shares, and options over such instruments, issued by the companies within the
consolidated entity and other related bodies corporate, as notified by the directors to the Australian Securities Exchange in
accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows:
Alfred J. Chown
Gary A. Ferguson
Philip W. Dulhunty
Yulin Hu
Matthew Driscoll
Energy Technologies Limited
Dulhunty Engineering
Limited
Ordinary Shares
Options
Ordinary Shares
50,660,691
47,266,126
22,695,135
87,845,969
2,577,313
-
-
-
-
-
59,724
-
-
-
-
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Energy Technologies Limited – 2018 Annual Report
Directors’ Report (Cont’d)
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behavior and accountability, the Directors of the Company
support and have adhered to the principles of corporate governance. The Company's corporate governance principles are
contained in the Corporate Governance Statement.
Signed in accordance with a resolution of the Directors.
Alfred J. Chown
Chairman/Managing Director
Sydney, 28 September 2018
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Energy Technologies Limited – 2018 Annual Report
Remuneration Report (audited)
The Remuneration Committee of the Board of Directors is responsible for determining and reviewing compensation
arrangements for the directors, the managing director and the executive team. Remuneration levels are set to attract and
retain appropriately qualified and experienced Directors and senior executives. The Remuneration Committee obtains
independent advice on the appropriateness of remuneration packages, given trends in comparative companies both locally
and internationally. The Remuneration Committee also assesses the appropriateness of the nature and amount of
emolument of such officers on a periodic basis by reference to relevant employment market conditions with the overall
objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team. Such
officers are given the opportunity to receive their base emolument in a variety of forms including cash and fringe benefits
such as motor vehicles. It is intended that the manner of payment chosen will be optimal for the recipient without creating
undue cost for the company.
Executive remuneration packages include a mix of fixed remuneration and performance based remuneration.
Fixed Remuneration
Fixed remuneration consists of base remuneration as well as employer contributions to superannuation funds.
Remuneration levels are reviewed annually by the Remuneration Committee through a process that considers individual,
segment and overall performance of the consolidated and operating entity. A senior executive’s remuneration is also
reviewed on promotion.
Performance – linked Remuneration
The Remuneration Committee links the nature and amount of directors’ and executives’ emoluments to the company’s
financial and operational performance. All senior executives have the opportunity to qualify for participation in the
Employee Bonus Plan, which currently provides incentives where specified criteria are met including criteria relating to
profitability.
Performance linked remuneration includes both short term and long term incentives and is designed to reward executive
directors and senior executives for meeting or exceeding financial and personal objectives. The short term incentive is an
at-risk bonus provided in the form of cash, and is based on the relevant operating subsidiaries’ results and on achieving a
preset target. The long term incentive is provided as ordinary shares of Energy Technologies Limited or options over
ordinary shares of Energy Technologies Limited under the rules of the Energy Technologies Limited Share Option Plan.
The remuneration structures result in and take into account:
The overall level of remuneration for each director and executive
The executive’s ability to control performance
The amount of incentives within each executive’s remuneration.
Short term incentive
Each year the remuneration committee sets the key performance indicators, which generally include measures relating to
the operating group, the relevant segment and the individual, and are based on financial, customer and strategy measures.
The measures directly align the reward to the key performance indicators and the operating group performance. The
financial performance objectives are operating group turnover and EBIT to working capital ratio analyses compared to
budgeted amounts on a regional and consolidated basis. The non-financial objectives vary with position and responsibility
and include measures such as achieving strategic outcomes, safety and business development.
The remuneration committee approves the cash incentive to be paid to the individuals.
Long term incentive
Options are available to be issued under the Energy Technologies Limited Share Option Plan (made in accordance with
thresholds set in plans approved by shareholders at the 2017 AGM), and it provides for directors, executives and
employees to receive options in total limited to 15% of the issued ordinary capital and exercisable strictly under the terms of
the Plan.
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Energy Technologies Limited – 2018 Annual Report
Remuneration Report (audited)
The Board considers that the above remuneration structure is adequate given the major restructuring of the operations
required under the Business Plan, and secondly, the performance linked element appears to be appropriate because the
executives strive to achieve a level of performance which qualifies them for bonuses.
The remuneration for all non-executive directors, last voted upon by shareholders at the 2007 AGM, is not to exceed
$500,000 per annum. Director’s base fees are presently up to $20,000. Directors receive additional cash benefit of $2,500
for participation and attendance at each board approved committee, up to a maximum $5,000.
Names and positions held of consolidated entity key management personnel in office at any time during the financial year
are:
Key Management Person
Position (s) Held during the Year
Alfred J. Chown
Gary A. Ferguson
Philip W. Dulhunty
Yulin Hu
Matthew Driscoll
Gregory. R. Knoke
Nicholas Cousins
Chairman/Managing Director of EGY and Managing
Director of BWC
Director – Non-executive of EGY and Director of BWC
Director – Non-executive of EGY
Director – Non-executive of EGY
Director – Non-executive of EGY
CFO/Company Secretary of EGY and BWC
General Manager BWC
Options and Rights Holdings
Gregory R. Knoke and Nicholas Cousins currently hold Nil Options issued under the Share Option Plan (FY2017 200,000
each). Refer also Note 27.
Shareholdings
Number of Shares held by Key
Management Personnel
Balance
30 June 2017
Received as
Remuneration
Purchases
Disposals
Balance
30 June 2018
Specified directors
Alfred J Chown
Gary A. Ferguson
Philip W. Dulhunty
Yulin Hu
Matthew Driscoll
Specified executives
Gregory R. Knoke
Nicholas Cousins
50,660,691
-
-
29,096,851
8,670,900
9,498,375
17,045,135
5,650,000
83,679,269
4,166,700
327,313
2,250,000
-
-
-
-
-
-
-
-
50,660,691
47,266,126
22,695,135
87,845,969
2,577,313
6,962,415
-
-
-
500,000
(20,000)
7,442,415
-
-
-
187,771,674
20,737,600
9,998,375
(20,000) 218,487,649
Details of the nature and amount of each element of the remuneration of key management personnel including each
director of the company and each of the specified executive officers of the company and the consolidated entity for the
financial year are disclosed in the table on next page.
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Energy Technologies Limited – 2018 Annual Report
Remuneration Report (audited)
Remuneration of key management personnel (audited)
The following table provides the details of all directors of the Company ("specified directors") and the executives of the consolidated entity with the greatest authority ("specified executives"), and the
nature and amount of the elements of their remuneration for the year ended 30 June 2018.
2018
Specified Directors
Position (s) Held
Date Left
Alfred J. Chown
Gary A. Ferguson
Philip W. Dulhunty
Yulin Hu
Matthew Driscoll
Chairman/Managing
Director of EGY and
Managing Director of BWC
Non-executive Director of
EGY and Director of
BWC
Non-executive Director of
EGY
Non-executive Director of
EGY
Non-executive Director of
EGY
Specified executives
Gregory R. Knoke
CFO/Company Secretary
of EGY and BWC
Nicholas Cousins
General Manager BWC
-
-
-
-
-
-
-
Short-term benefits
Post Employment
Benefits
Share-based
payment
Total
Cash, salary,
fees &
commissions
$
Date
Appointed
Cash
Bonus
Other
Superannuation
Equity
$
$
$
$
$
-
-
-
-
-
-
-
-
15,785
-
-
-
-
-
-
-
-
8,669
18,000
16,124
11,615
26,669
43,524
-
-
-
-
-
-
-
-
332,486
25,000
20,000
20,000
25,000
203,165
153,520
779,171
-
-
-
-
-
-
-
316,701
25,000
20,000
20,000
25,000
178,372
123,905
708,978
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Energy Technologies Limited – 2018 Annual Report
Remuneration Report (audited)
Remuneration of key management personnel (audited)
The following table provides the details of all directors of the Company ("specified directors") and the executives of the consolidated entity with the greatest authority ("specified executives"), and the
nature and amount of the elements of their remuneration for the year ended 30 June 2017.
2017
Specified Directors
Position (s) Held
Date Left
Alfred J. Chown
Gary A. Ferguson
Philip W. Dulhunty
Yulin Hu
Matthew Driscoll
Chairman/Managing
Director of EGY and
Managing Director of BWC
Non-executive Director of
EGY and Director of
BWC
Non-executive Director of
EGY
Non-executive Director of
EGY
Non-executive Director of
EGY
Specified executives
Gregory R. Knoke
CFO/Company Secretary
of EGY and BWC
Nicholas Cousins
General Manager BWC
-
-
-
-
-
-
-
.
Short-term benefits
Post Employment
Benefits
Share-based
payment
Total
Cash, salary,
fees &
commissions
$
Date
Appointed
Cash
Bonus
Other
Superannuation
Equity
$
$
$
$
$
-
-
-
-
20/12/2016
-
-
288,839
25,000
20,000
20,000
10,000
188,967
97,381
650,187
15
-
-
-
-
-
-
-
-
10,000
17,122
-
-
-
-
-
-
-
-
8,862
16,839
18,000
9,133
36,862
43,094
-
-
-
-
-
-
-
-
315,961
25,000
20,000
20,000
10,000
214,668
124,514
730,143
For personal use only
Energy Technologies Limited – 2018 Annual Report
Corporate Governance Statement
The Company’s corporate governance practices are discussed below. The Company and the Board of Directors are
committed to achieving and demonstrating the highest standards of corporate governance and aim to comply with the
Corporate Governance Principles and Recommendations set by the ASX Corporate Governance Council.
The Board of Directors guides and monitors the business and affairs of Energy Technologies Limited and its subsidiaries
(“the Group”) on behalf of the shareholders, by whom they are elected and to whom they are accountable. The Board is
responsible for the overall corporate governance of the Group. To assist the Board in discharging its responsibilities the
Board has adopted principles of corporate governance that are considered appropriate for the present size of the Group.
Where it is not appropriate, cost effective or practical to comply fully with the Corporate Governance Principles and
Recommendations, this fact has been disclosed together with reasons for the departure.
Consistent with the ASX recommendations, the Company’s corporate governance practices are regularly reviewed. The
information in this statement is current as at 31 August 2018.
Principle 1: Lay solid foundations for management and oversight
1.1: Board and Management Responsibilities
The Board is responsible for, and has the authority to determine, all matters relating to the running of the Company
including the policies, operational practices, management and objectives of the Company. In carrying out its
responsibilities, the Board undertakes to serve the interest of shareholders diligently and fairly. It is the role of management
to manage the Company in accordance with the directives of the Board.
Accordingly certain functions and roles are reserved to the Board, and certain others are delegated to the senior executives
of the Group.
The responsibilities of the Board include:
formulating the vision and strategic direction and monitoring performance objectives of the Group
overseeing and fostering an appropriate culture for the Group that is aligned to its values
developing and monitoring adoption of the most appropriate principles of corporate governance
ensuring adequate risk management processes are in place and are complied with
reviewing internal controls, external audit reports and ensuring codes of conduct and regulatory compliance
approving and monitoring the progress of major capital expenditure projects, funding programmes, acquisitions
and divestments
reviewing and approving annual business plans and budgets
ensuring appropriate resources are available to senior executives
reviewing and ratifying systems for health, safety and environmental management and controls
appointing and evaluating the performance of senior executives
appointing and creating succession policies for directors
appointing, removing and creating succession policies for senior executives
approving and monitoring financial and other reporting to shareholders and to the market.
ensuring corporate accountability to the shareholders primarily through an effective communications strategy and
through the Chairman adopting the key interface role between the Company and its shareholders.
A schedule of directors’ meetings and attendances is detailed in the directors’ report.
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Energy Technologies Limited – 2018 Annual Report
Corporate Governance Statement (Cont’d)
The Board has delegated responsibility for operation and day to day administration of the company to the Managing
Director, the Chief Financial Officer and executive management.
The Managing Director is responsible for the achievement of the Company’s goals, in accordance with the strategies and
policies approved by the Board and with support from executive management. The specific duties of the Managing Director
include:
assisting the Board to develop the Company’s Business Plan and goals
responsibility for the achievement of these goals
development in conjunction with senior management of short, medium and long term strategies to enable the
Company to achieve its objectives
preparation and update of business plans and relevant reports with senior management and implementation of
those plans
assessment of business opportunities including acquisitions
proposing and controlling with Board approval items of material capital expenditure
maintaining positive relationships with Board members, shareholders, trading partners and the investment
community, including accepting the role of key spokesperson
recommending and seeking appropriate approval for delegations of authority, key performance incentives and
organizational changes, including key staff appointments, in conjunction with established board committees
ensuring legal and regulatory compliance, in conjunction with senior management
overall control of the staff appraisal process
1.2 and 1.3: Appointment of Directors
The experience, qualification and background of each Director is thoroughly assessed before appointment. This information
is provided to shareholders through announcement to the market.
Information on each Director’s background and qualification can be found on pages 5 and 6 of the Annual Report.
The Company issues written notice of appointment for new Directors or senior executives setting out the terms and
conditions relevant to that appointment and the expectations of the role of the director. The Company also provides an
induction process which provides key information on the nature of the business and its operations.
1.4: Company Secretary
The company secretary is accountable directly to the board, through the chair, on all matters to do with the proper
functioning of the board. On day to day matters the Company Secretary reports to the Managing Director.
The responsibilities of the Company Secretary include:
advising the board and committee on governance issues;
monitoring adherence to company policies;
co-ordinating and timing despatching of Board and committee papers; and.
ensuring that the business at Board and committee meetings are accurately captured in the minutes.
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Energy Technologies Limited – 2018 Annual Report
Corporate Governance Statement (Cont’d)
1.5: Diversity
The Company has adopted policies in relation to employment and recruitment which require the introduction of new staff
and management of the Group’s employees on a non-discriminatory basis. Hiring policies are backed by policies in relation
to Sexual Harassment and Grievance and Dispute Handling.
The Group is quite small. Some new employees have been employed by BWC since its purchase, but only very few. The
small scale of the company’s hiring means that it is difficult to target new employees on a gender basis.
The Company’s policies are intended to ensure that equal opportunity is given to all potential employees, and that
increasing gender diversity at all levels will not be discouraged. The Board will keep the gender composition of its workforce
under review.
Thirteen per cent (13%) of all the Group’s employees are women. There is currently one female on the Board as Alternate
Director to Yulin Hu.
1.6 and 1.7: Board and Management Reviews
The Board undertakes a review of the Managing Director and of senior executive performance at least annually, together
with the Remuneration Committee, including setting targets. The performance evaluation is carried out in accordance with
the policy and procedure set out in the Company’s Corporate Governance documents, which are available on the
Company’s website.
Principle 2: Structure the board to add value
The composition of the Board is structured to efficiently discharge its responsibilities and duties.
2.1 : Nomination Committee
The names and qualifications of those appointed to the nomination committee for the year ended 30 June 2018 and their
attendance at meetings of the committee are included in the directors’ report. This committee is involved in the overseeing
of the appointment and induction process for new directors, committee members and senior management.
The Nomination Committee is not chaired by an independent director and the Committee is not made up of a majority of
independent directors. The Company is not of sufficient size to achieve this and due to the small number of directors and
senior executives and the status of director’s independence it is not currently possible to achieve a majority of independent
members.
For Directors retiring by rotation, the Board assesses that director before recommending re-election.
2.2 : Board skills matrix
The Board of Directors is comprised of a Managing Director and Chairman, together with four non-executive Directors and
an Alternate Director. The Board considers that a diversity of skills, knowledge, experience, backgrounds and gender is
required to effectively govern the business. The current Board profile addresses this with the following experience, skills
and qualifications represented on the Board:
•
international business and senior executive experience, including owning and managing businesses in the energy
sector and other;
• experience on listed and unlisted company and association boards as executive and non-executives and committee
members;
• understanding the sectors in which the Company operates in including the energy sector, resources industry,
infrastructure, construction;
•
relevant operational experience in strategic planning, executive management; mergers and acquisitions, risk
management, financial markets, contract negotiation and people management;
•
financial and corporate governance acumen with finance sector and audit committee roles experience;
• an understanding of the health and safety challenges of the business.
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Energy Technologies Limited – 2018 Annual Report
Corporate Governance Statement (Cont’d)
2.3, 2.4, 2.5 : Board Composition, Independence of Directors and Chairman
The composition of the Board is determined in compliance with the Company’s constitution. The names of the directors of
the company in office at the date of this report, their term of office and their skills, experience and relevant expertise are
detailed in the directors’ report. The position and term in office of each Director at the date of this report is as follows:
Name of Director
Position
Term in Office
Years
Months
Alfred J. Chown
Chairman/Managing Director
Gary A. Ferguson
Non-executive
Philip W. Dulhunty
Non-executive
Yulin Hu
Meiping Hu
Non-executive
Alternate to Yulin Hu
Matthew Driscoll
Non-executive
21
5
3
2
2
1
2
11
9
9
9
8
The Company does not have a majority of independent directors on the board.
The non-executive Directors are materially independent in complying as a director who is not a member of management
and who:
has not within the last three years been employed in an executive capacity by the company or another group
member, or been a director after ceasing to hold any such employment
within the last three years has not been a principal or employee of a material professional advisor or a material
consultant to the company or another group member
is not a material supplier or customer of the company or another group member, or an officer of or otherwise
associated with a material supplier or customer
has no material contractual relationship with the company or another group member other than as a director of the
company
is free from any interest and any business or other relationship which could, or could reasonably be perceived to,
materially interfere with the director’s ability to act in the best interests of the company
However with the exception of newly appointed Director Matthew Driscoll all non-executive Directors currently hold directly
and indirectly substantial shareholdings in the Company.
Under the Company’s plan to appoint further non-executive independent Directors when value is added to the Board, Mr
Matthew Driscoll was appointed on 20 December 2016. However Directors have continued to work as an effective team,
with close liaison to act in the best interests of the Company and security holders. It is not considered that the materiality of
Director’s shareholding will interfere with the Director’s capacity to bring independent judgement to bear on issues before
the Board and impair the ability to continue to act in the best interests of the entity and its security holders generally.
During the 2013 financial year, Mr Alfred J. Chown was appointed as the Managing Director of the Company. After the
resignation of former Board members, Mr Chown also adopted the position of Chairman of the Board. The company
accepts that, as a principle, these roles should be separate. At present, however, there are factors which have made it
desirable that they be exercised by the same person for the time being.
The Company and its subsidiary Bambach Wires and Cables Pty Ltd (BWC) continued to encounter difficult trading
conditions during the year. The Managing Director continues to devote a great deal of time and energy to the operations of
BWC, and its internal processes. The Managing Director and the other directors have been in frequent and informal contact
during the year, in addition to the formal Board meetings. The strategy of the company, and the execution of the strategy,
has been under frequent review, and the results under close scrutiny.
Directors have worked as an effective team, with close liaison. In the circumstances, directors have not felt it necessary to
address the appointment of a new Chairman.
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Energy Technologies Limited – 2018 Annual Report
Corporate Governance Statement (Cont’d)
2.6 : Professional Development
Each Director has the right of access to all relevant Company information and to the Company’s executives. The Directors
also have access to external resources as required to fully discharge their obligations as Directors of the Company. The
use of this resource is coordinated through the Chairman of the Board.
The Company has processes in place to review the performance of the Board and its committees and individual Directors.
Each year the Board of Directors gives consideration to corporate governance matters, including the relevance of existing
committees and to reviewing its own and individual Directors’ performance. The Chairman is responsible for monitoring the
contribution of individual Directors and consulting with them in any areas of improvement.
Principle 3: Promote ethical and responsible decision making
3.1 : Code of Conduct
The Board acknowledges the need for continued maintenance of the highest standards of Corporate Governance Practices
and ethical conduct by all Directors and employees of the Group.
The Company has developed a Code of Conduct, an Employee Handbook and a comprehensive suite of policies which
have been approved by the Board and apply to all employees, officers and Directors. This set of policies is regularly
reviewed and may be amended as necessary to ensure it continues to reflect the best practices necessary to take into
account legal obligations, maintain the Company’s integrity and comply with the reasonable expectations of the Company’s
shareholders. The Code of Conduct is disclosed in the Company’s Corporate Governance documents.
3.2 : Trading Policy
Trading in Company securities is regulated by the Corporations Act and the ASX Listing Rules. The Company’s policy
regarding directors and employees trading in its securities is set by the Board, and is disclosed in the Company’s Corporate
Governance documents. The policy restricts directors and employees from acting on material information until it has been
released to the market and adequate time has been given for this to be reflected in the security’s price.
Principle 4: Safeguard integrity in financial reporting
The following structure is set up to independently verify and safeguard the integrity of financial reporting.
4.1 : Audit Committee
The Board has established an audit committee. The names and qualifications of those appointed to the audit committee for
the year ended 30 June 2018 and their attendance at meetings of the committee are included in the directors’ report. The
audit committee does not consist of a majority of independent directors, refer 2.3 Board Composition. Following the
appointment of independent non-executive Director Matthew Driscoll the audit committee is constituted with three
members. Mr Driscoll has been appointed as Chairman of the audit committee. The Board of the company now has six
members including Alternate Director, however following the appointment of Mr Driscoll and the skills matrix, the Board has
decided to retain the expanded structure at this time. The Board has decided not to appoint Alfred J. Chown, the Managing
Director, to the audit committee. The Chief Financial Officer is invited to audit committee meetings at the discretion of the
committee. The external auditor meets with members of the committee at least twice during the year.
The charter of the audit committee is disclosed in the Company’s Corporate Governance documents.
The responsibilities of the audit committee include:
Assessing whether non-audit services provided by the external auditor are consistent with maintaining the external
auditor’s independence. Each reporting period the external auditor provides an independence declaration in
relation to the audit or review.
Providing advice to the Board in respect of whether the provision of the non-audit services by the external auditor
is compatible with the general standard of independence of auditors imposed by the Corporations Act 2001.
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Energy Technologies Limited – 2018 Annual Report
Corporate Governance Statement (Cont’d)
4.1 : Audit Committee (Cont’d)
The Company does not have an internal audit function due to the size and lack of complexity of the Company. The
Company’s Board and Management oversee the key areas of the business including the risk management and internal
control processes of the Company and evaluate and look for opportunities to continually improve the effectiveness of these
processes.
4.2 : Financial Reporting
To assist the Board in approving the Company’s financial statements, the Managing Director and the Chief Financial Officer are
required to present a declaration with regard to the integrity of the financial statements to confirm to the Board that the Company’s
financial statements present a true and fair view in all material respects of the Company’s financial condition and that operational
results are in accordance with applicable accounting standards and the Corporations Act.
4.3 : External Auditors
The Board of Directors ensures that the Company’s external auditor attends all Annual General Meetings and be available
to answer shareholders’ questions about the conduct of the audit and the preparation and content of the auditor’s report.
Principle 5: Make timely and balanced disclosure and respect the rights of shareholders
Disclosure
The Company has a Continuous Disclosure policy to ensure compliance with ASX Listing Rules and Corporations Act obligations
to keep the market fully informed of any information which may have material effect on the price or value of its securities. The
policy is disclosed in the Company’s Corporate Governance documents. All ASX announcements are linked to the Company’s
website as soon as possible after confirmation from ASX, including financial statements.
The Company Secretary in consultation with the CEO and Directors is responsible for communications with the ASX. He is also
responsible for ensuring compliance with the continuous disclosure requirements of the ASX Listing Rules, and overseeing and
coordinating information disclosure to the ASX, analysts, brokers, shareholders, the media and the general public.
Principle 6: Respect the rights of shareholders
6.1 Information on website
The Company takes advantage of electronic communication for investor relations. The Company’s, and subsidiary Bambach
Wires and Cables Pty Ltd, website contains extensive information about the Board and management globally. It includes relevant
press releases and media announcements in relation to the Company’s operations, relevant announcements made to the market
via the ASX, Company presentations and copies of financial statements. The Company has recently upgraded its website and
further development to ensure continuous and full disclosure is currently under way.
The Company provides shareholders with copies of all announcements made to the ASX by mail on request. Copies are
also available in its web site or the ASX web site, ensuring that all shareholders are kept informed about the Company.
Shareholders also have the option of receiving a hard copy of the Annual Report each year.
6.2 and 6.3 Investor relations and participation at meetings
The Board encourages full participation of attending shareholders at the Annual General Meeting to maintain a high level of
accountability and allow shareholders to identify the Company’s strategies and goals. The Company completes the Notice of
Meeting and Explanatory Notes so that they provide clearly and concisely all of the information relevant to shareholders to enable
them to make decisions on matters to be voted on at the meeting. The General Meetings are viewed as a tool to communicate
with shareholders and the Company encourages and allows time for participation in the meetings. The full Board and senior
executives are present and available to answer questions from the floor, as is the external auditor.
Informal meetings and factory site visits with shareholders are also held from time to time. A regular newsletter is produced
which is available on request.
6.4 Electronic Communication
The Company also encourages electronic communication directly via email with shareholders at all times.
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Energy Technologies Limited – 2018 Annual Report
Corporate Governance Statement (Cont’d)
Principle 7: Recognise and manage risk
7.1 : Risk Committee
The Group takes a proactive approach to risk management. The Board is responsible for ensuring that risks, and also
opportunities, are identified on a timely basis and that the Group's objectives and activities are aligned with the risks and
opportunities identified by the Board.
The Group believes that it is crucial for all Board members to be a part of this process, and as such the Board has not
established a separate risk management committee. Instead sub-committees are convened as appropriate in response to
particular issues and risks identified by the Board as a whole, and the sub-committee further examines the issue and
reports back to the board.
7.2 : Risk Review
The Board identifies potential areas of business risk arising from changes in the financial and economic circumstances of
its operating environment. It regularly assesses the Company performance in light of risks identified.
The Board has a number of mechanisms in place to ensure that management's objectives and activities are aligned with
the risks identified by the Board. These include the following:
Board approval of a strategic business plan, which encompasses the entity's vision, mission and strategy
statements, designed to meet stakeholder’s needs and manage business risk.
Implementation of Board-approved operating plans and budgets and board monitoring of progress against these
budgets, including the establishment and monitoring of key performance indicators (KPI's) of both a financial and
non-financial nature.
The establishment of committees to report on specific business risks, including for example, such matters as
occupational health and safety.
Regular management meetings involving executive directors, specified executives, and staff during which reports
are given on production, sales, financial, compliance and strategic issues and decisions taken on operating
matters, or referred to the Board.
Regular reports and cash forecasts from the CFO which assist in discharging the Board's responsibility to manage
the Group's financial risks. The Board is advised on such matters as the Group's liquidity, available credit and
currency exposures and monitors actions to ensure they are in line with Company policy.
The Board holds ongoing discussion of issues raised in the shareholder open days, in addition to the AGM, as well
as other shareholder communications, to ensure that the Board is cognizant of the diverse needs of various
stakeholders and assist in identifying the risks the business may face if those needs are not met, as well as
specifically review and update the corporate strategy as necessary.
7.3 : Internal Audit
The Board does not employ an internal auditor, although as part of the Company’s strategy to implement an integrated
framework of control, the Board requests the external auditors review internal control procedures. Recommendations once
presented are considered by the Board.
7.4 : Sustainability Risks
The Board regularly assesses risks associated with economic, global, environmental and social sustainability risks.
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Energy Technologies Limited – 2018 Annual Report
Corporate Governance Statement (Cont’d)
Principle 8: Remunerate fairly and responsibly
8.1 : Remuneration Committee
The Board has established a remuneration committee. The remuneration committee reviews and makes recommendations
to the Board on remuneration packages and policies applicable to the Managing Director, senior executives and staff and
directors themselves. It is also responsible for share option schemes, incentive performance packages, and compliance
with superannuation requirements, termination entitlements, fringe benefits policies and professional indemnity and liability
insurance policies as applicable.
The names of the members of the remuneration committee and their attendance at meetings of the committee are detailed
in the directors’ report. The remuneration committee in place for the year ended 30 June 2018 consists of three directors
but did not have majority of independent directors. The Chief Financial Officer is invited to remuneration committee
meetings, as required, to discuss senior executives and staff performance and remuneration packages.
The charter in relation to the remuneration committee is disclosed in the Company’s Corporate Governance documents.
There are no schemes for retirement benefits other than statutory superannuation for non-executive directors.
8.2 : Executive and Directors Remuneration Policies
Remuneration levels are set to attract and retain appropriately qualified and experienced directors, senior executives and
staff to run the consolidated entity. The board considers that the remuneration structure will be able to attract and retain the
best executives with the necessary incentives to work to grow long-term shareholder value.
The remuneration committee obtains independent advice as necessary on the appropriateness of remuneration packages,
given trends in comparative companies both locally and internationally. Remuneration includes a mix of fixed remuneration
and performance-based remuneration. All senior executives receive a base salary, superannuation, fringe benefits and
performance incentives. The remuneration committee reviews executive packages annually by reference to company
performance, executive performance, comparative industry information and relevant independent advice. The performance
of executives is measured against criteria agreed which is based on the forecast growth of the Company’s turnover and
profits and shareholders’ value.
The Company’s non-executive directors are paid directors’ fees for their normal performance of duties as a director. Where
there is a significant and sustained requirement for work by a director in excess of that considered normal for the Company,
the Company will pay a one-off bonus in respect of that work.
The amount of remuneration for all directors and the highest paid executives, including all monetary and non-monetary
components, are detailed in the Directors’ Report.
8.3 : Equity based Remuneration Scheme
A revised Directors Equity Plan was established in 2017 and approved by shareholders at the 2017 Annual General
Meeting.
Executives and employees are also entitled to participate in the EGY Share Option Plan also approved by shareholders at
the 2017 Annual General Meeting.
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Energy Technologies Limited – 2018 Annual Report
Auditor’s Independence Declaration
To the Board of Directors of Energy Technologies Limited
Auditor’s Independence Declaration under section 307C of the Corporations Act 2001
As lead audit director for the audit of the financial statements of Energy Technologies Limited for the financial
year ended 30 June 2018, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b) any applicable code of professional conduct in relation to the audit.
Yours sincerely
Nexia Sydney Audit & Assurance
Stephen Fisher
Director
28 September 2018
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Energy Technologies Limited – 2018 Annual Report
Consolidated Income Statement
for the year ended 30 June 2018
Sales Revenue
Cost of Sales
Gross Margin
Rendering of services
Other revenue and Other Income
Marketing expenses
Occupancy expenses
Administrative expenses
Finance costs
Depreciation and amortisation expenses
Other expenses
Loss before income tax
Income tax (expense) benefit
Loss after income tax
Loss/(Profit) attributable to non-controlling interest
Loss attributable to members of the parent entity
Earnings per share
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
The accompanying notes form part of these financial statements.
Consolidated
2018
$
2017
$
15,270,586
12,912,807
(12,630,762)
(10,776,667)
2,639,824
2,136,140
194,031
130,985
1,165,561
1,253,339
(43,004)
(48,623)
(692,057)
(581,739)
(4,243,777)
(4,225,655)
(1,573,268)
(1,116,446)
(370,099)
(194,396)
(284,300)
(241,230)
(3,117,185)
(2,977,529)
(10,116)
21,421
(3,127,301)
(2,956,108)
17,375
14,905
(3,109,926)
(2,941,203)
(0.94)
(0.90)
(0.94)
(0.90)
Note
2(a)
3
2(a)
2(b)
3
3
4
8
8
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Energy Technologies Limited – 2018 Annual Report
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2018
Consolidated
2018
$
2017
$
LOSS FOR THE YEAR
(3,127,301)
(2,956,108)
OTHER COMPREHENSIVE INCOME FOR THE YEAR AFTER
TAX:
Items that will be reclassified subsequently to profit or loss
when specific conditions are met:
Movement in foreign exchange relating to translation of controlled
foreign entities
Exchange differences on foreign exchange relating to non-controlling
interest
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME FOR THE YEAR
(1,717)
(1,717)
(3,434)
938
938
1,876
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(3,130,735)
(2,954,232)
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO:
Members of the parent entity
Non-controlling interest
(3,111,643)
(2,940,265)
(19,092)
(13,967)
(3,130,735)
(2,954,232)
The accompanying notes form part of these financial statements.
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Energy Technologies Limited – 2018 Annual Report
Consolidated Statement of Financial Position
as at 30 June 2018
Note
9
10
11
15
13
18(a)
14
10
16
17
19
17
19
20
21
Consolidated
2018
$
2017
$
188,541
698,518
3,293,933
3,957,127
4,555,356
4,657,187
122,164
107,838
8,159,994
9,420,670
3,034,943
3,017,855
177,233
187,349
2,718,326
1,726,636
82,852
73,901
6,013,354
5,005,741
14,173,348
14,426,411
5,877,561
5,062,306
10,121,531
8,045,062
662,320
675,288
16,661,412
13,782,656
4,276,404
4,507,541
118,675
105,998
4,395,079
4,613,539
21,056,491
18,396,195
(6,883,143)
(3,969,784)
9,496,447
9,279,071
(1,051,734)
(1,050,017)
(14,746,798)
(11,636,871)
(6,302,085)
(3,407,817)
(581,058)
(561,967)
(6,883,143)
(3,969,784)
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Deferred tax assets
Intangible assets
Other receivable
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Financial liabilities
Short-term provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities
Long-term provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET LIABILITIES
EQUITY
Issued capital
Reserves
Accumulated losses
Parent interest
Non-controlling interest
TOTAL DEFICIENCY
The accompanying notes form part of these financial statements.
27
For personal use only
Energy Technologies Limited – 2018 Annual Report
Consolidated Statement of Changes in Equity
for the year ended 30 June 2018
Consolidated
Balance at 01 July 2016
Comprehensive income
Loss for the year
Other comprehensive income for the year
Total comprehensive income (loss) for
the year
Transactions with owners, in their
capacity as owners, and other transfers
Equity contribution
Total transactions with owners, in their
capacity as owners, and other transfers
Issued
Capital
$
Reserves
Accumulated
losses
Non-Controlling
Interest
$
$
$
Total
$
9,279,071
(1,050,955)
(8,695,668)
(548,000) (1,015,552)
-
-
-
-
-
-
(2,941,203)
(14,905) (2,956,108)
938
-
938
1,876
938
(2,941,203)
(13,967) (2,954,232)
-
-
-
-
-
-
-
-
Balance at 30 June 2017
9,279,071
(1,050,017) (11,636,871)
(561,967) (3,969,784)
9,279,071
(1,050,017) (11,636,871)
(561,967) (3,969,784)
Balance at 01 July 2017
Comprehensive income
Loss for the year
Other comprehensive loss for the year
Total comprehensive income (loss) for
the year
Transactions with owners, in their
capacity as owners, and other transfers
Shares issued in lieu of directors fees
217,376
Total transactions with owners, in their
capacity as owners, and other transfers
217,376
-
-
-
-
-
(3,109,926)
(17,375) (3,127,301)
(1,717)
-
(1,717)
(3,434)
(1,717)
(3,109,926)
(19,092) (3,130,735)
-
-
-
-
-
-
-
-
-
-
217,376
217,376
Balance at 30 June 2018
9,496,447
(1,051,734) (14,746,797)
(581,059) (6,883,143)
The accompanying notes form part of these financial statements.
28
For personal use only
Energy Technologies Limited – 2018 Annual Report
Consolidated Statement of Cash Flows
for the year ended 30 June 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Interest received
Payments to suppliers and employees
Finance costs
Consolidated
Note
2018
$
2017
$
17,309,340
13,725,385
70
274
(17,980,889)
(16,024,494)
(153,455)
(952,831)
Net cash outflow from operating activities
26
(824,934)
(3,251,666)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Purchases of property, plant and equipment
Purchases of intangible development assets
Net cash outflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of Debenture notes
Proceeds from borrowings
Repayment of borrowings
Loans from Directors
Net cash inflow from financing activities
Net (decrease) increase in cash held
Cash at beginning of financial year
Effect of exchange rates on cash holdings in foreign currencies
4,091
-
(301,606)
(1,220,307)
(1,080,833)
(929,262)
(1,378,348)
(2,149,569)
-
6,816,000
520,840
1,243,356
(297,705)
(1,970,170)
1,470,000
-
1,693,135
6,089,186
(510,147)
687,951
698,518
10,724
170
(157)
Cash at end of financial year
9
188,541
698,518
The accompanying notes form part of these financial statements.
29
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 1 Summary of Significant Accounting Policies
(a) Basis of Preparation
The financial statements are a general purpose financial report, which has been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations , other authoritative pronouncements of
the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The Group is a for-profit
entity for financial reporting purposes under Australian Accounting Standards.
The financial statements are presented in Australian dollars unless otherwise stated.
The financial statements were authorised for issue on 28 September 2018 by the directors of Energy
Technologies Limited.
Energy Technologies Limited is a listed public company, incorporated and domiciled in Au stralia.
(b) Statement of compliance
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in
financial statements containing relevant and reliable information about transactions, events and conditions .
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply
with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted
in the preparation of these financial statements are presented below and have been consistently applied
unless stated otherwise.
Except for cash flow information, the financial statements have been prepared on an accruals basis and are
based on historical costs, modified, where applicable, by the measurement at fair value of selected non -
current assets, financial assets and financial liabilities.
(c) Going Concern
The consolidated entity incurred a loss after tax and non-controlling interest of $3,109,926 (2017: $2,941,203) and
incurred negative cash flows from operations of $824,934 for the year ended 30 June 2018 (2017: negative
$3,251,666). At balance date, including Debenture Notes totalling $6,816,000, current liabilities exceeded current
assets by $8,501,418. The Debentures have a maturity date of 31 December 2020 and Directors do not expect the
Debenture Notes will be redeemed within the twelve month period following the date of this report.
These matters give rise to a significant material uncertainty that may cast significant doubt upon the consolidated
entity’s ability to continue as a going concern. The ongoing operation of the consolidated entity is dependent upon it:
(a) achieving cash flow positive trading operations from its existing business; and
(b) continued financial support from its current financiers;
Management have prepared a cash flow projection for the period to 30 September 2018 that supports the ability of the
consolidated entity to continue as a going concern. The FY2019 budget on which the cash flow projection is based
forecasts a 17% increase in sales revenues for the FY2019 from the FY2018 actual year. The cash flow projection also
assumes the secured debenture facility remains in place.
In the event that the consolidated entity is unable to achieve the matters detailed above, it may not be able to continue
as a going concern and therefore the consolidated entity may not be able to realise its assets and extinguish its
liabilities in the ordinary course of operations and at the amounts stated in the financial statements.
No adjustments have been made to the recoverability and classification of recorded asset values and the amount and
classification of liabilities that might be necessary should the consolidated entity and company not continue as going
concerns.
30
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 1 Summary of Significant Accounting Policies
(d) Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by
Energy Technologies Limited (EGY) at the end of the reporting period. The parent controls an entity when it 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 over the entity.
Where controlled entities have entered or left the Group during the year, the financial performanc e of those
entities is included only for the period of the year that they were controlled. A list of controlled entities is
included in Note 12 to the financial statements.
In preparing the consolidated financial statements, all intragroup balances and tra nsactions between entities in
the consolidated group have been eliminated in full on consolidation.
Non-controlling interests, being the equity in the subsidiary not attributable, directly or indirectly, to a parent,
are reported separately within the equity section of the consolidated statement of financial position and
statements showing profit or loss and other comprehensive income. The non -controlling interests in the net
assets comprise their interests at the date of the original business combination a nd their share of changes in
equity since that date.
Changes in a parent’s ownership interest in a subsidiary that do not result in a loss of control are accounted
for as equity transactions (ie. transactions with owners in their capacity as owners).
(e) Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination
involving entities or businesses under common control. The business combination will be accounted for from
the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities
(including contingent liabilities) assumed is recognised (subject to certain limite d exemptions).
Where measuring the consideration transferred in the business combination, any asset or liability resulting
from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent
consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset or liability is remeasured in each reporting period to fair
value, recognising any change to fair value in the profit or loss, unless the change in value can be identified as
existing at acquisition date.
All transaction costs incurred in relation to business combinations are expensed.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase. A
gain from a bargain purchase is accounted for in the income statement at the acquisition date.
(f) Foreign currencies
The functional currency of each of the Group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are presented in
Australian dollars (A$), which is the parent entity’s functional currency.
Foreign currency transactions are translated into functional currency at the exchange rate s prevailing at the
date of the transaction. Foreign currency monetary items are retranslated at the year -end exchange rate. Non-
monetary items measured at fair value are reported at the exchange rate as at the date when fair value was
determined.
Exchange differences arising on the translation of monetary items are recognised in the profit or loss, except
where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on
the translation of non-monetary items are recognised directly in other comprehensive income to the extent that
the underlying gain or loss is recognised in other comprehensive income; otherwise the exchange difference is
recognised in profit or loss.
31
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 1 Summary of Significant Accounting Policies (Cont’d)
(f) Foreign currencies (Cont’d)
The financial results and position of foreign operations, whose functional currency is different from the Group’s
presentation currency, are translated as follows:
(i) Assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
(ii)
Income and expenses are translated at average exchange rates for the period; and
(iii) Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
The functional currencies of the overseas subsidiaries are:
D Power International Limited – Hong Kong Dollars
Exchange differences arising on translation of foreign operations with functional currencies other than
Australian dollars are recognised in other comprehensive income and included in the foreign currency
translation reserve in the statement of financial position. The cumulative amount of these differences is
reclassified into profit or loss in the period in which the operation is disposed of.
(g) Property, plant and equipment
Each class of Plant and equipment is stated at cost or fair value as indicated, less accumulated depreciation
and any impairment in value.
Increases in the carrying amount arising on revaluation of plant and equipment are credited to a revaluation
surplus in equity. Decreases that offset previous increases of the same asset are recognised against
revaluation surplus directly in equity; all other decreases are recognised in profit or loss.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the
asset and the net amount is restated to the revalued amount of the asset.
Depreciation is calculated on both a straight-line and diminishing value basis over the estimated useful life of
the asset as follows:
Buildings & Leasehold Improvements
Plant and equipment
Leased plant & Equipment
Impairment
10% to 25%
5% to 25%
10% to 25%
The carrying values of plant and equipment are reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be recoverable. For an asset that does not generate largely
independent cash inflows, the recoverable amount is determined for the cash -generating unit to which the
asset belongs.
If any such indication exists and where the carrying values exceed the estimated recoverable amount, the
assets or cash-generating units are written down to their recoverable amount. The recoverable amount of plant
and equipment is the greater of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre -tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset.
Impairment losses are recognised in the revaluation surplus or in the income statement, as set out above .
32
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 1 Summary of Significant Accounting Policies (Cont’d)
(h) Intangibles
Intangible assets
Intangible assets acquired separately are capitalised at cost as at the date of acquisition. Following initial
recognition, the cost model is applied to the class of intangible assets.
The useful lives of Patents, Computer Software and Licenses are assessed and amortised over their useful
lives and amortisation charged is taken to the income statement. Patents and licenses are amortised over 10
years and Computer Software over 4 years.
Intangible assets, excluding development costs, created within the business are not capitalised and
expenditure is charged against profits in the year in which the expenditure is incurred.
Intangible assets are tested for impairment where an indicator of impairment exists, and in the case of
indefinite life intangibles, at each reporting date, either individually or at the cash generating unit level. Useful
lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective
basis.
Research and development costs
Expenditure on research activities is recognised as an expense when incurred.
Expenditure on development activities is capitalised only when it is probable that future benefits will exceed
deferred costs and these benefits can be reliably measured. Capitalised development expenditure is stated at
cost less accumulated amortisation. Amortisation is calculated using a straight -line method to allocate the
costs over an estimated useful life of 20 years during which the related benefits are expected to be realised.
Development expenditure is tested annually for impairment or more frequently if events or changes in
circumstances indicate that it might be impaired. Capitalised development expenditure is measured at cost
less any accumulated amortisation and impairment losses.
(i)
Investments
All investments are initially recognised at cost, being the fair value of the consideration given and including
acquisition charges associated with the investment.
Financial assets are classified at ‘fair value through profit or loss’ when they are held for trading for the
purpose of short term profit taking. Such assets are subsequently measured at fair value with changes in
carrying value being included in profit or loss.
Amortised cost is calculated by taking into account any discount or premium on acquisition, over the period to
maturity.
For investments carried at amortised cost, gains and losses are recognised in income when the investments
are derecognised or impaired, as well as through the amortisation process.
For investments where there is no quoted market price, fair value is determined by reference to the current
market value of another instrument which is substantially the same or is calculated based on the expected
cash flows of the underlying net asset base of the investment.
(j)
Inventories
Manufacturing
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition is accounted for as follows:
Raw materials — valued on a rolling average cost;
Finished goods and work-in-progress — cost of raw materials and standard cost of labour and a
proportion of manufacturing overheads based on estimated machine man minute.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion.
33
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 1 Summary of Significant Accounting Policies (Cont’d)
(k)
Impairment of assets
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired.
Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where
the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is
written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an
individual asset, unless the asset's value in use cannot be estimated to be close to its fair value less costs to
sell and it does not generate cash inflows that are largely independent of those from other assets or groups of
assets, in which case, the recoverable amount is determined for the cash -generating unit to which the asset
belongs.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre -
tax discount rate that reflects current market assessments of the time value of money and the risks specific to
the asset.
(l) Trade and other receivables
Trade receivables are recognised and carried at original invoice amount less an allowance for any
uncollectible amounts.
A provision for doubtful debts will be made against specific trade receivables where collection of the debt,
either in full or in part, remains uncertain. Bad debts are written off when identified.
(m) Cash and cash equivalents
Cash on hand and in banks and short-term deposits are stated at nominal value.
For the purposes of the Statement of Cash Flows, cash includes cash on hand, in banks and money market
investments readily convertible to cash within 2 working days.
(n)
Investments in Associates
Associates are companies in which the Group has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the entity, but is not control or joint control of
those policies. Investments in associates are accounted for in the financial statements by applying the equity
method of accounting, whereby the investment is initially recognised at cost and adjusted ther eafter for the
post-acquisition change in the Group’s share of net assets of the associate company. The interest in an
associate is the carrying amount of the investment together with any long term interests that in substance form
part of the investors’ net investment in the associate. In addition, the Group’s share of the profit or loss of the
associated company is included in the Group’s profit or loss.
Profits and losses resulting from transactions between the Group and the associate are eliminated to th e
extent of the Group’s interest in the associate.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group
discontinues recognising its share of further losses until it has incurred legal or constructive obligations or
made payments on behalf of the associate. When the associate subsequently makes profits, the Group will
resume recognising its share of those profits once its share of the profits equals the share of the losses not
recognised.
At the date of this report there are no investments in associates.
34
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 1 Summary of Significant Accounting Policies (Cont’d)
(o) Financial Instruments
(i)
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the company commits
itself to either the purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified "at fair value through profit or loss'', in which case transaction costs are expensed
to profit or loss immediately.
(ii) Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest
method, or cost.
Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised
cost. Gains or losses are recognised in profit or loss through the amortisation process and when the
financial liability is derecognised.
Forward exchange contracts (derivatives) are measured subsequently at Fair Value t hrough profit and
loss.
(p) Borrowing costs
Borrowing costs are recognised as an expense when incurred.
(q) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying consolidated benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
Where discounting is used, the increase in the provision due to the passage of time is recogn ised as a finance
cost.
(r) Leases
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of
the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lo wer,
at the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged
directly against income.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease
term.
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified
as operating leases. Operating lease payments are recognised as an expense in the income statement on a
straight-line basis over the lease term.
35
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 1 Summary of Significant Accounting Policies (Cont’d)
(s) Revenue
Revenue is measured at the fair value of the consideration received or receivable after taking into account any
trade discounts and volume rebates allowed. The following specific recognition criteria must also be me t
before revenue is recognised:
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the
buyer and can be measured reliably. Risks and rewards are considered passed to the buyer at the time of
delivery of the goods to the customer.
Rendering of services
Revenue is recognised only when services are completed.
Interest
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the
net carrying amount of the financial asset.
Dividends
Revenue is recognised when the shareholders' right to receive the payment is established .
(t)
Income tax
The income tax expense for the year comprises current income tax expense/(income) and deferred tax
expense/(income). Deferred income tax is provided on all temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carr ying amounts for financial reporting purposes,
except for deferred tax liability on revaluation of plant and equipment not recognised due to the existence of
unrecognised tax losses available for offset.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused
tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses
can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part o f the
deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that h ave been enacted
or substantively enacted at the balance sheet date.
(u) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash
flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation
authority are classified as operating cash flows.
36
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 1 Summary of Significant Accounting Policies (Cont’d)
(v) Contributed equity
Issued and paid up capital is recognised at the fair value of the consideration received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of
the share proceeds received.
(w) Employee benefits
Provision is made for the company’s liability for employee benefits arising from services rendered by
employees to balance date. Employee benefits that are expected to be settled within one year have been
measured at the amounts expected to be paid when the liability is settled, plus related on -costs.
Employee benefits payable later than one year have been measured at the present value of the estimated
future cash outflows to be made for those benefits.
(x) Payables
Liabilities for trade creditors and other amounts are carried at amortised cost which is the fair value of the
consideration to be paid in the future for goods and services received, whether or not billed to the
consolidated entity.
(y) Fair Value
The Group subsequently measures some of its assets at fair value on a recurring basis. Fair value is the price
the Group would receive to sell an asset in an orderly (ie unforced) transaction between independent,
knowledgeable and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used
to determine fair value. Adjustments to market values may be made having regard to the characteristics of the
specific asset. The fair values of assets that are not traded in an active market are determined using one or
more valuation techniques. These valuation techniques maximise, to the extent possible, the use of
observable market data.
To the extent possible, market information is extracted from either the principal market for the asset (ie the
market with the greatest volume and level of activity for the asset) or, in the absence of such a market, the
most advantageous market available to the entity at the end of the reporting period (ie the market that
maximises the receipts from the sale of the asset after taking into account transaction costs and transport
costs). For non-financial assets, the fair value measurement also takes into account a market participant’s
ability to use the asset in its highest and best use or to sell it to another market participant that would use the
asset in its highest and best use.
37
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 1 Summary of Significant Accounting Policies (Cont’d)
(z) Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial statements based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the group.
Key Estimates
i)
Impairment
The company assesses impairment at the end of each reporting period by evaluating conditions and events
specific to the company that may be indicative of impairment triggers. Recoverable amounts of relevant assets
are reassessed using value-in-use calculations which incorporate various key assumptions.
ii) Estimation of useful lives of assets
The estimation of the useful lives of assets has been based on historical experience as well as manufacturer’s
warranties (for plant and equipment), lease terms (for leased equipment), long term sales projections and
customer requirements (for intangible assets) and turnover policies (for motor vehicles). In addition, the
condition of the assets is assessed at least once per year and considered against the remaining useful life.
Adjustments to useful lives are made when considered necessary.
iii) Revaluation of plant and equipment – refer to Note 13.
Key Judgements
i) Going Concern: Refer to details in Note 1(c)
ii) Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences as management considers that it is
probable that future taxable profits will be available to utilise those temporary differences. Significant
management 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 taxable profits over the next two years together with f uture
tax planning strategies.
(aa) Government Grants
Government grants are recognised at fair value where there is reasonable assurance that the grant will be
received and all grant conditions will be met. Grants relating to expense items are recognised as in come
immediately.
(bb) New and Revised Accounting Standards
Refer to Note 31.
38
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 2 Revenue and Other Income
(a) Revenue
Sale of goods
Rendering of services
(b) Other Revenue and Other Income
Management Fee
R&D grant
Finance revenue
Other
Total Other Revenue and Other Income
Note 3 Profit/(Loss) for the Year
Included in the determination of net loss before tax from
continuing operations are the following expenses:
Expenses
Cost of sales
Finance costs
Rental expense on operating leases:
- minimum lease payments
Consolidated
2018
$
2017
$
15,270,586
12,912,807
194,031
130,985
15,464,617
13,043,792
16,488
61,200
1,148,210
1,189,865
70
793
274
2,000
1,165,561
1,253,339
16,630,178
14,297,131
12,630,762
10,776,667
1,573,268
1,116,446
933,847
879,976
Foreign Exchange Losses
2,641
913
Defined superannuation contributions expense
256,506
237,685
Research and Development expenditure
Depreciation and amortisation expenses
1,558,731
1,806,058
370,099
284,300
39
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 4
Income Tax Expense
(a) The components of Income tax (benefit)/expense comprise:
Current tax
Deferred tax
(b) Reconciliation of the prima facie tax on profit/(loss) to income tax
expense:
Prima facie tax on (loss) before income tax at 27.5% (2017:
30.0%)
Add:
Tax effect of:
- other non-allowable items
- R&D expenditure non-allowable
- other assessable items
- tax losses not brought to account *
- deferred income tax
Less:
Tax effect of:
- deferred income tax
- R&D grant non assessable
Income tax (benefit)/expense on continued operations
*Current year tax losses unable to be offset within the group and not
brought to account.
Consolidated
2018
$
2017
$
-
10,116
10,116
-
(21,421)
(21,421)
(857,225)
(893,259)
48,906
428,651
5,364
690,062
10,116
191,777
541,817
1,307
515,318
-
1,183,099
1,250,219
-
315,758
315,758
10,116
21,421
356,960
378,381
(21,421)
40
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 5 Key Management Personnel Compensation
Compensation of Key Management Personnel
Refer to the remuneration report contained in the Directors’ Report for details of the remuneration paid or payable
to each member of the Group’s key management personnel (KMP) for the year ended 30 June 2018 and the
comparative year.
The totals of remuneration paid to KMP of the company and the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Short--term employee benefits
Consolidated
2018
$
2017
$
735,647
43,524
779,171
687,049
43,094
730,143
These amounts include fees and benefits paid to the executive Chair and non-executive directors as well as all
salary, paid leave benefits, fringe benefits and cash bonuses awarded to executive directors and other KMP.
Post-employment benefits
These amounts are the current year’s estimated cost of providing for superannuation contributions made during
the year and post-employment life insurance benefits.
Share-based payments
These amounts represent the expense related to the participation of KMP in equity-settled benefits schemes as
measured by the fair value of the options, rights and shares granted on grant date.
Note 6 Auditors' Remuneration
Remuneration of the auditor of the parent entity for:
— auditing or reviewing the financial statements
— other services
Remuneration of other auditors of subsidiaries for:
— auditing or reviewing the financial statements
— tax compliance services
Note 7 Dividends
$
$
60,228
1,350
61,578
8,579
3,176
11,755
80,500
-
80,500
-
-
-
No dividends have been paid or proposed by the Parent for the year ended 30 June 2018 (2017: Nil).
41
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 8 Earnings per Share
(a) Reconciliation of earnings to profit or loss:
Profit (loss)
Loss/(Profit) attributable to non-controlling interest
Earnings used to calculate basic and dilutive EPS
(b) Weighted average number of ordinary shares outstanding during
the year used in calculating basic EPS
Note
Consolidated
2018
$
2017
$
(3,127,301)
(2,956,108)
17,375
14,905
(3,109,926)
(2,941,203)
Number
Number
331,331,693
326,507,732
Weighted average number of dilutive options outstanding
(c)
-
-
Weighted average number of ordinary shares outstanding
during the year used in calculating dilutive EPS
331,331,693
326,507,732
(c) During the 2018 financial year no ordinary share options were issued to employees under an approved
Share Option Plan – refer Note 27.
Note 9 Cash and Cash Equivalents
Cash at bank and on hand
Reconciliation of cash
Cash at the end of the financial year as shown in the statement of
cash flows is reconciled to items in the Statement of Financial
Position as follows:
Cash and cash equivalents
$
188,541
188,541
$
698,518
698,518
188,541
188,541
698,518
698,518
42
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 10 Trade and Other Receivables
CURRENT
Trade receivables
R and D receivable
Other receivables
(a) Trade debtors are based on normal terms of trade, typically 30
days from end of month. Retention of title terms exist on sales.
NON CURRENT
Other receivable - Deposits
Note 11
Inventories
At cost
Raw materials and stores
Work in progress
Finished goods
Note
Consolidated
2018
$
2017
$
(a)
2,045,624
2,582,301
1,148,210
1,189,865
100,099
3,293,933
184,961
3,957,127
82,852
82,852
73,901
73,901
588,325
165,214
761,948
220,817
3,801,817
3,674,422
4,555,356
4,657,187
A $340,000 write down was recorded of inventory as at 30 June 2018 following review of the stocktake. The adjustment was
mainly in relation to raw materials in the factory and inventory in quarantine. Management recognise issues with stocktake
procedures undertaken but consider that no further material provision is required.
43
For personal use only
Country of
Incorporation
Percentage Owned (%)*
2018
2017
100
100
51
51
100
100
51
51
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 12 Controlled Entitles
Controlled Entitles Consolidated
Parent Entity:
Energy Technologies Limited
Subsidiaries of Energy Technologies Limited :
Bambach Wires & Cables Pty Limited
Cogenic Pty Limited
Australia
Australia
Australia
Dulhunty Engineering Limited (previously D Power
International Limited)
British Virgin Islands
Dulhunty Engineering Limited (Hong Kong Branch)
Hong Kong
* Percentage of voting power is in proportion to ownership
44
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 13 Property, Plant and Equipment
Leasehold Improvements
Leasehold Improvements at independent valuation
Less: Accumulated depreciation
Total Leasehold Improvements
Plant and Equipment
Plant and equipment - at cost (which approximates fair value)
Less: Accumulated depreciation
Plant and equipment at independent valuation
Less: Accumulated depreciation
Leased Plant and Equipment
Consolidated
2018
$
2017
$
27,800
(11,120)
16,680
705,310
(107,158)
598,152
27,800
(8,340)
19,460
556,252
(70,451)
485,801
1,872,550
1,887,550
(686,175)
(523,231)
1,186,375
1,364,319
Capitalised leased assets – at cost (which approximates fair value)
1,462,848
1,310,301
Less: Accumulated depreciation
Total Plant and Equipment
Total Property, Plant and Equipment
(229,112)
1,233,736
3,018,263
3,034,943
(162,026)
1,148,275
2,998,395
3,017,855
Movements in Carrying Amounts
Movements in carrying amounts for each class of property, plant and equipment between the beginning and the
end of the current financial year:
Leasehold
Improvements
Plant and
Equipment
Leased Plant
and
Equipment
$
$
$
Total
$
Consolidated Entity:
Carrying amount at the beginning of the
year
Additions
Disposals
Depreciation expense
Write-back on disposals
19,460
1,850,120
1,148,275
3,017,855
-
-
149,059
(15,000)
152,547
301,606
(15,000)
(2,780)
(211,089)
(67,087)
(280,956)
11,438
11,438
Carrying amount at the end of the year
16,680
1,784,528
1,233,735
3,034,943
45
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 13
Property, Plant and Equipment (Cont’d)
Revaluation of Plant and Equipment to Fair Value
In accordance with the measurement choice available under AASB 116 Property, Plant & Equipment and in order
to reflect fair value, subsidiary Bambach Wires and Cables Pty Ltd (BWC) has obtained an independent valuation
of existing plant and equipment as at 30 June 2014. The valuation report was completed under the following bases
of value:
Fair Market Value in Continued Use (FMVICU)
Reinstatement with New Value (RIV)
The fair value of BWC Plant and Equipment and Leasehold Improvements under FMVICU was $1,975,750 at 30
June 2014. The Board adopted this value, which resulted in an increase in net plant and equipment value of
$931,109 in BWC at 30 June 2014. The revaluation amount was recognised in the Asset Revaluation Reserve. A
deferred tax liability of $140,598 at 30 June 2018 (2017: $165,978) in respect of the revaluation, has been set off
against tax losses available to offset any liability arising upon a disposal of plant and equipment. Refer Note 18(d).
EGY has no plans to dispose of its plant and equipment.
RIV value was reported as $7,520,750.
The Group initially recognises and measures its Plant and Equipment and Leasehold Improvements at cost. The
Group subsequently measures some classes of its plant and equipment and its leasehold improvements at fair
value on a recurring basis in accordance with AASB 116: Property, Plant and Equipment. Refer Notes 1(g) and
1(y).
Fair Value Measurement
AASB 13 Fair Value Measurement requires the disclosure of fair value information by level of the fair value
hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level
that an input that is significant to the measurement can be categorised into, as follows:
Level 1: Measurements based on quoted prices in active markets for identical assets that the entity can
access at the measurement date.
Level 2: Measurements based on inputs other than the quoted prices included in Level 1, but that are
observable for the asset, either directly or indirectly.
Level 3: Measurements based on unobservable inputs for the asset or liability.
46
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 13
Property, Plant and Equipment (Cont’d)
EGY’s management considers that the inputs used for the fair value measurement are Level 2 and Level 3 inputs.
Valuation techniques
AASB 13 requires the valuation technique used to be consistent with one of the following valuation approaches:
Market approach: techniques that use prices and other information generated by market transactions for
identical of similar assets.
Income approach: techniques that convert future cash flows or income and expenses into a single discounted
present value.
Cost approach: techniques that reflect the current replacement cost of an asset at its current service capacity.
EGY commissioned an external independent valuer to conduct a valuation of its unencumbered plant and
equipment and leasehold improvements at 30 June 2014 using a market approach technique. The technique
predominantly used recent observable market data for similar new equipment in Australia, adjusted for loss in
value caused by physical deterioration, functional obsolescence and economic obsolescence. EGY’s management
considers that the market approach is the appropriate valuation technique in relation to its plant and equipment
and leasehold improvements.
Inputs used in the market approach technique to measure Level 2 fair values were:
current replacement cost of the property being appraised less the loss in value caused by physical
deterioration, functional obsolescence and economic obsolescence;
historical cost and relevant market data and industry expertise; and
sales comparison for assets where available.
The assessments of the physical condition, functional obsolescence and economic obsolescence are considered
Level 3 inputs.
EGY management has determined that the fair value of the plant and equipment as at 30 June 2018 does not
differ materially from its carrying value.
Recurring fair value measurements:
Plant and equipment
Leasehold improvements
Total non-financial assets recognised at fair value
Level 2
2018
$
Level 2
2017
$
3,018,263
16,680
3,034,943
2,998,395
19,460
3,017,855
The highest and best use of the assets is the fair market value in continued use, using the market approach
technique.
47
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 14
Intangible Assets
Trademarks, computer software and licenses at cost
Accumulated amortisation and impairment
Net carrying value
Development Assets
Accumulated amortisation and impairment
Net carrying value
Total intangible assets
Consolidated Entity:
Year ended 30 June 2018
Balance at the beginning of the year
Additions
Amortisation
Balance at the end of the year
Consolidated
2018
$
2017
$
17,686
(17,266)
420
2,858,627
(140,721)
2,717,906
2,718,326
1,726,636
1,080,833
(89,143)
2,718,326
17,686
(17,014)
672
1,777,794
(51,830)
1,725,964
1,726,636
841,482
929,262
(44,108)
1,726,636
Intangible assets have finite useful lives. The current amortisation charges in respect of intangible assets
are included under depreciation and amortisation expense.
The recoverable amount of intangible development assets have been assessed using a discounted cash
flow methodology forecasting five years of pre-tax cash flows.
The following describes each key assumption on which management has based its value in use
calculations:
(a) Five year pre-tax cash flow projections, based upon management approved budgets and growth rates
covering a one year period, with the subsequent periods based upon management expectations of
growth excluding the impact of possible future acquisitions, business improvement capital expenditure
and restructuring.
(b) The discount factor used was 24.63% in 2018 (2017: 24.63%)
(c) The Directors have concluded that the recoverable amount of the intangible development assets and
other intangibles exceed their carrying value.
48
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 15 Other Assets
CURRENT
Prepayments
Note 16 Trade and Other Payables
CURRENT
Unsecured liabilities:
Trade payables
Sundry payables and accrued expenses
Consolidated
2018
$
2017
$
122,164
122,164
107,838
107,838
1,967,296
3,910,265
5,877,561
2,777,191
2,285,115
5,062,306
Trade payables are based on normal terms of trade, typically 60 days from end of month.
49
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 17 Financial Liabilities
Note
Consolidated
2018
$
2017
$
CURRENT
Secured liabilities:
Debenture Notes
Less: transaction costs
Hire Purchase and finance lease liability
Convertible Notes
Unsecured liabilities:
Directors and executive loans
Other loan
Total Current Financial Liabilities
NON CURRENT
Secured liabilities:
Hire Purchase and finance lease liability
Convertible Notes
Unsecured liabilities
Convertible Notes
Total Non-Current Financial Liabilities
Total Financial Liabilities
Total current and non-current secured liabilities:
Hire Purchase and finance lease liability
Convertible Notes
Debenture Notes
6,816,000
6,816,000
(189,714)
(277,365)
6,626,286
6,538,635
342,679
100,000
7,068,965
326,427
100,000
6,965,062
2,050,000
1,002,566
3,052,566
10,121,531
580,000
500,000
1,080,000
8,045,062
306,404
2,700,000
3,006,404
537,541
2,700,000
3,237,541
1,270,000
1,270,000
4,276,404
14,397,935
1,270,000
1,270,000
4,507,541
12,552,603
649,083
2,800,000
6,626,286
10,075,369
863,968
2,800,000
6,538,635
10,202,603
(a)
(d)
(a) (c)
29
(d)
(a) (c)
(a) (c)
50
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 17 Financial Liabilities (Cont’d)
(a) Secured Debenture Notes raised FY2017 totalling $6,816,000 have a maturity date of 31 December 2020 and a
redemption date of 31 July 2018 as executed by Deed Poll. The Directors do not expect the Debenture Notes will
be redeemed within the twelve month period following balance date. The notes are interest bearing and interest
is calculated on the face value of each note at a rate of 12% paid monthly in arrears. Interest accrued on the
debentures and convertible notes (refer Note (c) below) as at 30 June 2018 is $1,723,436 (2017: $616,556). The
company is in arrears on its interest commitments under the debenture note and convertible note facilities. This is
not considered a material adverse event by the note holder group leader and is tolerated whilst the company
meets product development and revenue growth targets. Should the company lose the confidence of the group
leader any interest arrears would be called upon to be caught up and if this did not occur a material adverse
event would be triggered and the group leader may call for repayment of the debenture and/or convertible notes.
The Debenture Notes are secured by General Security Agreements (GSA) given by EGY as borrower and
Bambach Wires and Cables Pty Ltd as guarantor under a Deed of Guarantee and Indemnity in favour of each
note holder, ranking behind permitted encumbrances only. The GSA agreements grant the note holders security
interest over the collateral of each grantor, defined as all the grantor's present and after-acquired rights, assets
and undertaking of the grantor, including each of the following:
(i)
(ii)
(iii)
All present and after-acquired property of the Grantor.
All present and after-acquired estates and interests in land in which the Grantor has an
interest.
All present and after-acquired rights, assets and undertaking of the Grantor in any PPSA
retention of title property.
Under a Deed of Priority, secured existing convertible note holders for $2.55m of notes have security ranked
equally with debenture note holders. The remaining $250,000 of secured convertible notes are secured by a
second ranking charge.
(b) During the financial year the group repaid $297,705 (2017:$1,970,170) of both long and short term interest
bearing debt.
(c) During FY 2014 and FY 2015 EGY raised $2,800,000 by the issue of secured convertible notes which mature on
31 December 2020. During FY 2016 EGY raised a further $1,270,000 by the issue of unsecured convertible
notes, which mature on 31 December 2020. In total 4,070 Convertible Notes have been issued, each with a face
value of one thousand dollars to investors. Each investor is paid interest at the rate of one per cent (1%) per
annum on the amount of their commitment from the time of commitment and each Convertible Note bears
interest at the rate which is eight percentage points higher than the RBA Cash Rate from time to time, from
subscription until conversion. Interest is payable monthly in arrears. Refer to note (a) above for security details of
the secured convertible notes
(d) Hire purchase and finance lease liabilities are secured by the underlying financed assets
Note 18 Tax
Note
Consolidated
2018
$
2017
$
(a) Deferred Tax Assets
Deferred tax assets comprise:
Provisions
18(b)(ii)
177,233
177,233
187,349
187,349
(b) Reconciliations
(i) Gross Movements
The overall movement in the deferred tax account is as
follows:
Opening balance
Credit/(Charge) to the income statement
4
Closing balance
187,349
(10,116)
177,233
165,928
21,421
187,349
51
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 18 Tax (Cont’d)
Note
Consolidated
2018
$
2017
$
(ii) Deferred Tax Assets
The movement in deferred tax assets for each temporary
difference during the year is as follows:
Provisions
Opening balance
Credited (charge) to the income statement
Closing Balance
Total Deferred Tax Assets
(c) Deferred tax assets not brought to account, the
benefits of which will only be realised if the conditions
for deductibility set out in Note 1(t) occur are:
Temporary differences
Tax losses: capital losses
Tax losses: operating losses
Less potential tax loss benefits offset against deferred tax
liability - refer (d)
Tax losses: operating losses net of offsets
187,349
(10,116)
177,233
177,233
165,928
21,421
187,349
187,349
52,558
48,169
1,256,950
1,256,950
5,056,449
4,287,055
(140,598)
(165,978)
4,915,851
4,121,077
(d) Deferred tax liability is offset against unrecognised tax
losses:
Revaluation of plant and equipment, and leasehold
improvements
140,598
165,978
Less: Offset of unrecognised tax loss benefit
(140,598)
(165,978)
Net deferred tax liability
-
-
52
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 19 Provisions
CURRENT
Employee Entitlements
Opening balance at beginning of year
Additional provisions raised during year
Balance at end of the year
NON CURRENT
Employee Entitlements
Opening balance at beginning of year
Additional provisions raised during year
Balance at end of the year
Analysis of Total provisions
Current
Non-current
Provision for Employee Entitlements
Consolidated
2018
$
2017
$
675,288
(12,968)
662,320
576,774
98,514
675,288
105,998
12,677
118,675
662,320
118,675
780,955
95,358
10,640
105,998
675,288
105,998
781,286
A provision has been recognised for employee entitlements relating to annual leave and long service
leave. In calculating the present value of future cash flows in respect of long service leave and annual
leave not expected to be settled within twelve months, the probability of that leave being taken is based
on historical data. The measurement and recognition criteria relating to employee benefits have been
disclosed in Note 1(w) to the financial statements.
53
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 20
Issued Capital
Number of Ordinary shares fully paid 348,245,332 (2017:
326,507,732):
Consolidated
2018
$
2017
$
9,496,447
9,496,447
9,279,071
9,279,071
Ordinary Shares
2018
Number
2017
Number
$
$
At the beginning of reporting period
326,507,732 326,507,732
9,279,071
9,279,071
Shares issued during year
11 April 2018
21,737,600
-
217,376
-
At reporting date
348,245,332 326,507,732
9,496,447
9,279,071
Terms and conditions:
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at shareholders' meetings. In the event of winding up of the company, ordinary shareholders rank
after creditors and are fully entitled to any proceeds of liquidation.
Note 21 Reserves
Exchange differences arising on translation of foreign controlled
subsidiaries
Asset Revaluation
Consolidated
2018
$
2017
$
(1,982,843)
(1,981,126)
931,109
931,109
(1,051,734)
(1,050,017)
Share Based Payments Reserve:
During financial year ended 30 June 2015 the company issued 2,800,000 options to staff under the Share Option Plan but
the fair value of the options at grant date was negligible and accordingly not recognised in the Share Based Payments
Reserve. These options expired FY 2018 (refer Note 27).
54
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 22 Parent Entity Disclosures
(a) Financial Position
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other Current Assets
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Financial Assets
Property, plant and equipment
Intangible assets
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Financial liabilities
Short-term provisions
TOTAL CURRENT LIABILITIES
NON CURRENT LIABILITIES
Financial liabilities
Other non-current liabilities
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET LIABILITIES
EQUITY
Issued capital
Accumulated Losses
Asset Revaluation Reserve
TOTAL DEFICIENCY
55
2018
$
2017
$
678
7,801
6,012,803
6,338,645
60,664
29,052
6,074,145
6,375,498
479,773
1,664,918
2,790
420
482,983
6,557,128
2,825
672
1,668,415
8,043,913
2,162,789
7,158,857
139,666
1,057,572
6,836,000
143,585
9,461,312
8,037,157
3,970,000
3,970,000
8,959
6,540
3,978,959
3,976,540
13,440,271
12,013,967
(6,883,143)
(3,969,784)
9,496,447
9,279,071
(16,192,371)
(13,061,636)
(187,219)
(187,219)
(6,883,143)
(3,969,784)
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 22 Parent Entity Disclosures (Cont’d)
(b) Financial Performance
Loss for the year
Other comprehensive Loss
Total Comprehensive Loss
2018
$
2017
$
(3,130,735)
(2,954,232)
-
-
(3,130,735)
(2,954,232)
(c) Parent entity result includes impairment of investment in controlled entities of $1,185,145 (2017: $1,512,591)
(d) Guarantees entered into by the parent entity in relation to the debts of its subsidiaries $Nil (2017: $Nil).
(e) Contingent Liabilities of the Parent Entity – Refer to Note 24.
(f) Commitments for the acquisition of Property, Plant and Equipment by the parent entity $Nil (2017 $Nil)
Note 23 Capital and Leasing Commitments
(a) Operating Lease Commitments
Non-cancellable operating leases contracted for but not capitalised in
the financial statements
Payable — minimum lease payments
— not later than 12 months
— between 12 months and 5 years
(b) Hire Purchase and Finance Lease Commitments
— not later than 12 months
— between 12 months and 5 years
Payable — minimum lease payments
Less future finance charges
Present value of minimum lease payments (Note 17)
Consolidated
2018
$
2017
$
885,788
848,533
1,098,504
1,534,970
1,984,292
2,383,503
396,820
346,068
384,393
631,347
742,888
1,015,740
93,805
649,083
151,772
863,968
56
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 23 Capital and Leasing Commitments (Cont’d)
(c) Capital Expenditure Commitments
Deposits have been paid totalling US $91,860 for new equipment quoted at total cost US $545,000. The amount
outstanding is US $453,140, expected to be paid upon completion.
Note 24 Contingent Liabilities
(a)
John Fielding Limited
Previous financial statements of the company have noted a contingent liability to John Fielding Limited for services
carried out prior to 30 June 1995 in regards to amendments to income tax returns. However in accordance with the
contract no fee is payable until a cash benefit is received by the Company. At this stage no cash benefit has been
received by the Company. The maximum liability is $130,241.
(b)
Lease Guarantee
The parent entity (EGY) has guaranteed the obligations of the formerly associated entity, Dulhunty Poles Pty Limited
(DPPL), as tenant under the terms of a lease over premises Lot 1, 35-39 Buckley Grove, Moolap, Victoria. The lease is
for a period of ten years, with rent payments commencing 1st August 2010. Rent is subject to fixed annual review and
the total rental per the lease agreement for the ninth year excluding outgoings is $354,695. DPPL was entitled to rental
incentive rebates over the first three years of the lease.
Note 25 Segment Reporting
Primary reporting - Business segments
The group’s primary business segment is Specialist and Industrial Cables. Therefore the segment details are fully reflected in the
results and balances reported in the Income Statement and Statement of Financial Position.
Segment accounting policies
Inter-segment pricing is determined on an arms-length basis and is eliminated on consolidation.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on
a reasonable basis.
Segment capital expenditure is the total costs incurred during the period to acquire segment assets that are expected to be
used for more than one period.
57
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 26 Cash Flow Information
(a) Reconciliation of Cash Flow from Operations with Net
Profit/(Loss) after Income Tax
Net profit/(loss) after income tax
Non-cash flows in profit/(loss)
Depreciation of non-current assets
Amortisation of intangibles
Unrealised foreign exchange movements
Net loss (gain) on disposal of property, plant and equipment
Hire Purchase Interest Charges
Amortisation of Debenture Transaction costs
Non-Operating Cash Flow Cash Items
Shares issued in lieu of director fees
Transaction costs in relation to issue of debentures
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
Increase/(decrease) in trade payables and accruals
(Increase)/decrease in deferred tax asset
(Increase) /decrease in value of other current assets
(Increase) /decrease in value of other non current receivables
Increase/(decrease) in provisions for employee entitlements
Cash flow (outflows) from operations
(b) Credit Facilities
Consolidated
2018
$
2017
$
Note
(3,127,301)
(2,956,108)
280,956
240,192
89,143
744
(529)
60,198
87,651
44,108
2,034
11,395
26,038
48,435
217,376
-
-
(325,800)
663,194
(614,724)
101,831
(1,048,514)
815,255
1,224,185
10,116
(21,421)
(14,326)
38,611
(8,951)
(29,251)
(291)
109,154
(824,934)
(3,251,666)
The Group has in place hire purchase and finance lease facilities. At balance date $649,083 (2017: $863,968) of
these facilities have been utilised.
(c) Reconciliation of liabilities arising from financing activities
Non-cash changes
Cash flows
Transaction
Costs
$
$
Foreign
exchange
movement
$
Notes
Debenture Notes
Less Transaction
Cost
Convertible Notes
Directors and
executive loans
Other loans
HP and finance
lease
Total
17
17
17
17
17
17
30/06/17
$
6,816,000
(277,365)
6,538,635
4,070,000
-
-
-
-
-
87,651
87,651
-
-
-
580,000 1,470,000
498,218
500,000
863,968
(275,083)
12,552,603 1,693,135
60,198
147,849
58
30/06/18
$
6,816,000
(189,714)
6,626,286
4,070,000
2,050,000
1,002,566
649,083
14,397,935
-
-
-
-
-
4,348
-
4,348
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 27 Share-Based Payments
(a)
Employee Share Option Plan
The following share-based payment arrangements existed at 30 June 2018 under the EGY Share Option Plan:
The plan provides for any employee or director or officer, who has been an employee, director or officer of the company or
any subsidiary for longer than six months to receive an offer from the company for options over ordinary shares for no
consideration.
Each option is convertible to one ordinary share and the option holds no voting or dividend rights. There are no voting rights
attached to the unissued ordinary shares. Voting rights will be attached to the unissued ordinary shares when the options have
been exercised.
The exercise price of the options determined in accordance with the Rules of the plan was based on the weighted average price
of the Company's shares traded on the ASX during the twenty trading days prior to the date of the offer.
Options are exercisable commencing either 1) For employees, directors or officers who have been in the employ of the company or
any controlled entity for longer than 12 months, 14 days after the acceptance of the offer by the employee; or 2) for any other
employee, director or officer, 14 days after such person completes 12 months of employment with the company or any of its
controlled entities. All options expire on the earlier of three years after their issue or 12 months after the termination of the
employee's employment.
Consolidated
2018
2017
Number of
Options
Weighted Average
Exercise Price
Number of
Options
Weighted Average
Exercise Price
0.008 cents
2,200,000
-
(2,200,000)
-
-
0.008 cents
2,800,000
-
(600,000)
-
2,200,000
Outstanding at the
beginning of the year
Granted
Forfeited
Exercised
Outstanding at year-
end
(i) The options were granted on 13 February 2015. No options were issued to Directors. The expiry date for the options
was 13 February 2018.
Note 28 Events After the Reporting Period
There has not arisen since the end of the financial period any matter of circumstance which, in the opinion of the directors
of the Company, significantly affects the operations of the Group, the results of those operations, or the state of affairs of
the Group in subsequent financial years.
59
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 29 Related Party Transactions
No loans were made, guaranteed or secured by any entity in the consolidated entity to any group of key management
personnel during the financial year.
Loans by Directors to the company
Included in the unsecured Convertible Notes on issue are notes issued to Directors and related parties of directors, Gary A
Ferguson and Alfred J. Chown, who invested $550,000 and were issued 550 Convertible Notes. During the 2018 financial
year, a total of $57,750 (2017: $57,984) was accrued as interest on these loans from directors or their related parties. Refer
also Note 17 (c).
Included in the secured Convertible Notes on issue are notes issued to Directors and related parties of directors, Gary A
Ferguson and Philip W Dulhunty, who invested $250,000 and were issued 250 Convertible Notes. During the 2018 financial
year, a total of $26,278 (2017: $26,356) was accrued as interest on these loans from directors or their related parties.
Loans by Directors to subsidiary company
During the 2018 financial year Directors and related parties of directors, Yulin Hu and Alfred J. Chown made further loans of
$1,470,000 (FY2017 :$580,000) to subsidiary Bambach Wires and Cables Pty Ltd. The loans are unsecured and repayable on
demand. Interest is paid at the rate of ten percent per annum. Interest paid or accrued on these loans for the 2018 financial
year was $91,942 (2017: $58,000).
An entity related to Mr Alfred J. Chown, Lora Glen Pty Ltd, has loaned subsidiary Bambach Wires and Cables Pty Ltd $94,086
(FY2017:$171,038) to facilitate the purchase of new equipment. This loan is unsecured and repayable on demand.
A key management person has made a short term loan of $10,000 (2017: $25,000) to subsidiary Bambach Wires and Cables
Pty Ltd. This loan is unsecured and repayable by demand. During the 2018 financial year, a total of $2,363 (2017: $1,290) was
accrued as interest on this loan.
The above loan transactions are on normal commercial terms and conditions.
Dulhunty Poles Pty Ltd (DPPL)
Lease Guarantee
Refer Note 24 Contingent Liabilities. EGY has guaranteed the lease obligation of DPPL, a formerly associated company of the
Company.
Other transactions with the company or its controlled entities and director related entities
A number of specified directors and specified executives, or their personally-related entities, hold positions in other entities
that result in them having control or significant influence over the financial or operating policies of these entities.
A number of these entities transacted with the company or its subsidiaries in the reporting period. The terms and conditions
of those transactions were no more favourable than those available, or which might reasonably be expected to be available,
on similar transactions to unrelated entities on an arms-length basis.
Details of these transactions are as follows:
Mr Alfred J. Chown is a director of NLP International Limited. A subsidiary company, Dulhunty Engineering Limited (DPIL),
formerly D Power International Limited, during the period employed the services of NLP International Limited as
consultants. The consideration paid for these services was $12,000 (2017: $12,000) and is included in directors’
emoluments.
An entity related to director Gary A Ferguson has entered into commercial hire purchase transactions with subsidiary
Bambach Wires and Cables Pty Ltd. These transactions are secured by equipment. Interest rates vary between 9.25% and
12.5% per annum.
An entity related to director Alfred J. Chown has entered into commercial hire purchase transactions with subsidiary Bambach
Wires and Cables Pty Ltd. These transactions are secured by equipment. Interest rates vary between 4.9% and 10.0% per
annum.
The transactions above are on normal commercial terms and conditions.
60
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 30 Financial Risk Management Disclosures
(a) Capital Risk Management
Energy Technologies Limited (EGY) manages its capital to ensure that entities in the EGY Group will be able to continue as a
going concern while maximising the potential return to stakeholders through the optimum balance of debt and equity. This
strategy remains unchanged from FY2017.
The capital structure of the EGY Group consists of cash and cash equivalents, debt and equity attributable to equity holders
of the EGY parent and to its operating subsidiary.
The EGY Group operates internationally through its subsidiary company DPIL based in Hong Kong. The EGY Group senior
management monitors all externally imposed capital requirements in each jurisdiction to ensure compliance.
Operating cash flows are used to maintain and expand the Group manufacturing and distribution asset base as well as to
meet routine outflows including tax and the repayment of maturing debt. The EGY Group Board and senior management
consider the costs of capital and monitor the gearing ratio as a proportion of net debt to equity.
The gearing ratio at year end was as follows:
Current and Non Current Financial liabilities
Debt (i)
Cash and cash equivalents
Net Debt
Equity (ii)
(i)
(ii)
Debt is defined as long-term and short-term borrowings.
Equity includes all capital and reserves and minority interest.
Consolidated
2018
$
2017
$
14,397,935
12,552,603
(188,541)
(698,518)
14,209,394
11,854,085
(6,883,143)
(3,969,784)
61
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 30 Financial Risk Management Disclosures (Cont’d)
(b) Financial Risk Management
In common with other businesses the EGY Group is exposed to risks that arise from the use of financial instruments. This note
describes the objectives, policies and processes for managing those risks and the methods used to measure them. The EGY
Group’s financial instruments consist mainly of facilities with banks, convertible notes, debentures, short term loans, hire
purchase, accounts receivable and payable, loans to and from subsidiaries, leases and derivatives. There have been no
substantive changes in the EGY Group level of exposure to financial instrument risks or the objectives and processes for
managing those risks from previous periods unless otherwise stated in this note.
(i)
Financial Risk Management Objectives
The Board of Directors has overall responsibility for the determination of the EGY Group financial risk management framework
and, whilst retaining ultimate responsibility for them, it has delegated authority for the design and implementation of operating
processes ensuring effective risk management to the EGY Group’s corporate treasury and finance function, which provides
services to the business including negotiation and co-ordination of finance facilities, and the monitoring and management of the
financial risks as they relate to the operations of the Group. The Board receives regular reports through which it reviews the
effectiveness of the processes put in place and the appropriateness of the set objectives to control risk.
Overall the risk management strategy seeks to assist the Group in meeting its financial targets as well as minimizing the potential
adverse effects on financial performance. The main exposures to financial instrument risk experienced by the EGY Group are
credit risk, liquidity risk and market risk (including currency risk, interest rate risk and price risk). The EGY Group does not enter
into financial instruments, including derivative financial instruments, for speculative purposes.
(ii)
Credit Risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in a loss to the EGY Group.
This arises principally from the Group’s trade receivables. For the EGY Group this risk has been determined as low.
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period, excluding the
value of any collateral or other security held, is equivalent to the carrying amount and classification of those financial assets (net
of any provisions) as presented in the Statement of Financial Position. Credit risk also arises through the provision of financial
guarantees, as approved at Board level, given to parties securing the liabilities of a former associate (Refer 24(b) for details).
The Group has a general policy of only dealing with creditworthy counterparties. As well, a credit check system is also in place
and credit checks are obtained from a reputable external source for selected new and overseas customers. Overseas customers’
trade terms include use of documentary credit bank facilities in customer locations deemed at risk, as well as collateral payment.
There are no material amounts of collateral held as security at 30 June 2018.
(iii) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Ultimate responsibility for
liquidity risk management vests with the EGY Board of Directors and the main subsidiary Board of Directors, who apply an
appropriate liquidity risk management framework to the Group’s short, medium and long term funding requirements. The EGY
Group manages liquidity risk by the retention of adequate reserves, banking facilities and reserve borrowing facilities and by
monitoring forecast and actual cash flows, which are updated regularly by the treasury and finance function, and matching the
maturity profiles of financial assets and liabilities.
(iv) Liquidity and interest rate tables
The following table details the EGY Group contractual maturity for non-derivative financial assets and liabilities and are based on
undiscounted cash flows of financial assets and liabilities on the earliest date on which repayment can be required.
62
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 30 Financial Risk Management Disclosures (Cont’d)
Effective
Weighted
Average
Interest Rate -
%
Floating Interest Rate
$
Fixed Rate Within One
Year
$
Fixed Rate Over 1-5
Years
$
Non-interest Bearing
$
Total
$
CONSOLIDATED ENTITY
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Financial Assets:
Cash and cash equivalents
1.50
1.50
188,541
698,518
Receivables
-
-
-
-
Total Financial Assets
Financial Liabilities:
Trade payables
Sundry payables
Hire purchase liability
9.54
9.59
188,541
698,518
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
342,679
326,427
306,404
537,541
Loans from directors and
executives
Other Loans
Convertible notes
Debenture notes
10.00
10.00
10.00
12.00
2,050,000
580,000
702,566
500,000
9.50
9.50
4,070,000
4,070,000
-
-
12.00
12.00
-
-
6,626,286
6,538,635
-
-
-
-
-
-
-
-
-
-
188,541
698,518
3,293,933
3,957,127
3,293,933
3,957,127
3,293,933
3,957,127
3,482,474
4,655,645
1,967,296
2,777,191
1,967,296
2,777,191
3,910,265
2,285,115
3,910,265
2,285,115
-
-
300,000
-
-
-
-
-
-
-
649,083
863,968
2,050,000
580,000
1,002,566
500,000
4,070,000
4,070,000
6,626,286
6,538,635
Total Financial Liabilities
4,070,000
4,070,000
9,721,531
7,945,062
306,404
537,541
6,177,561
5,062,306 20,275,496
17,614,909
Net financial assets (liabilities)
(3,881,459)
(3,371,482)
(9,721,531)
(7,945,062)
(306,404)
(537,541)
(2,883,628)
(1,105,179) (16,793,022)
(12,959,264)
63
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 30 Financial Risk Management Disclosures (Cont’d)
(v) Maturity analysis
Trade and other payables are expected to be paid within a period of 6 months from year end for the consolidated
entity for 2018 and 2017.
(vi) Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices
will affect the EGY Group’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk within acceptable parameters, while achieving optimum return.
(vii) Foreign currency risk management
The EGY Group is exposed to currency risk on investments that are denominated in a currency other than the
respective functional currencies of Group entities, primarily the Australian dollar (AUD) and Hong Kong Dollar (HKD).
The Group’s investments in, and loans to, its subsidiaries are not hedged as these positions are considered to be
long term in nature.
The carrying amount of the EGY Group’s foreign currency denominated monetary assets and monetary liabilities at
the reporting date is as follows:
US Dollars
Euros
Hong Kong Dollars
Swiss Francs
Total
(viii) Forward exchange contracts
Liabilities
Assets
2018
$’000
2017
$’000
2018
$’000
2017
$’000
223
1
1
-
225
283
-
-
-
283
1
-
-
1
2
2
-
-
4
6
The EGY Group policy is, where possible, to allow group entities to settle liabilities denominated in their functional
currency with the cash generated from their own operations in that currency. Where group entities have liabilities
denominated in a currency other than their functional currency, cash already denominated in that currency will, where
possible, be used from within the Group.
The Group’s primary operating exposure is where trade receivables and payables are not denominated in their
functional currency. The overall treasury function is based in Australia where the primary banking facilities are
maintained. The Group also enters into forward exchange contracts to buy and sell specified amounts of foreign
currencies in the future at stipulated exchange rates, with the objective of protecting the Group against unfavourable
exchange rate movements for contracted sales and purchases in foreign currencies, primarily US Dollars.
At 30 June 2018 and 2017 there were no outstanding forward exchange contracts.
64
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 30 Financial Risk Management Disclosures (Cont’d)
(b) Financial Risk Management (Cont’d)
(ix) Foreign currency sensitivity analysis
The following table details the EGY Group’s sensitivity to a 10% increase or decrease in the Australian Dollar against
relevant foreign currencies. This sensitivity represents management’s assessment of the reasonable possible change in
foreign currency rates. Its analysis includes cash assets plus outstanding foreign currency denominated trade
receivables and payables and adjusts their translation at the period end for a 10% change in foreign currency rates. A
positive number indicates an increase in profit where the Australian dollar strengthens against the respective currency.
For a weakening of the Australian dollar against the respective currency, there would be an equal and opposite impact
on the profit.
Profit or Loss/Equity
US Dollars
Euros
Hong Kong Dollars
Total
Consolidated
2018
$’000
2017
$’000
(24)
(1)
(1)
(26)
(31)
-
-
(31)
(x) Interest Rate Risk Management
The EGY Group is exposed to interest rate risk on cash and cash equivalents, which is the risk that a financial
instrument’s value will fluctuate as a result of changes in the market interest rates on interest bearing financial
instruments. The EGY Group does not use derivatives to mitigate these exposures.
The EGY Group’s fixed rate financial instruments represent short term borrowings, at fixed rates maturing over
periods less than one year and long term borrowings at fixed rates maturing over periods of between 1 to 5 years.
The Group’s variable rate financial securities consist of bank accounts and convertible notes managed in Australia.
(xi) Interest rate sensitivity analysis
The following analysis indicates the effect of a 2% or 200 basis point increase or decrease in nominal interest rates,
based on exposures in existence at the reporting date, and holding all other variables constant. This represents
management’s assessment of the reasonably possible change in interest rates as at that date.
Consolidated
2018
$’000
2017
$’000
(276)
276
(276)
276
(237)
237
(237)
237
Change in Net Profit:
Interest rise by 2% (200 basis points)
Interest cut by 2% (200 basis points)
Change in Equity:
Interest rise by 2% (200 basis points)
Interest cut by 2% (200 basis points)
65
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 30 Financial Risk Management Disclosures (Cont’d)
(b) Financial Risk Management (Cont’d)
(xii) Price Risk
The EGY Group is exposed to commodity price risk on the purchase of raw materials through its manufacturing operations
in Australia. Futures markets and Economic Forecasts are monitored to determine whether to implement a commodity
hedging policy.
(xiii) Fair value of financial instruments
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
Level 1 – the fair value is calculated using quoted prices in active markets.
Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3 – the value is estimated using inputs for the asset or liability that are not based on observable market data.
The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the
table below.
Quoted
Market Price
(Level 1)
$
Year Ended 30 June 2018
Valuation
technique –
market
observable
inputs
(Level 2)
$
Valuation
technique –
non market
observable
inputs
(Level 3)
$
Total
Quoted
Market Price
(Level 1)
$
$
Year Ended 30 June 2017
Valuation
technique –
market
observable
inputs
(Level 2)
$
Valuation
technique –
non market
observable
inputs
(Level 3)
$
Total
$
Financial Liabilities
Derivative instruments
Convertible note
conversion
feature
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Quoted market price represents the fair value determined based on quoted prices in active markets as at the reporting date without
any deduction for transaction costs.
For financial instruments not quoted in active markets, the Group uses valuation techniques such as present value techniques,
comparison to similar instruments for which market observable prices exist and other relevant models used by market participants.
These valuation techniques use both observable and unobservable market inputs.
Financial instruments that use valuation techniques with only observable market inputs or unobservable inputs that are not significant
to the overall valuation include interest rate swaps, forward commodity contracts and foreign exchange contracts not traded on a
recognised exchange.
The fair values of other financial assets and liabilities approximates their carrying values at balance date.
Transfer between categories
There were no transfers between Level 1 and Level 2 during the year.
66
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 31 New and Amended Accounting Standards and Interpretations
(i) New and amended accounting standards and interpretations adopted by the Group
The Group adopted the following Australian Accounting Standards (new and amended) from the
mandatory application date of 1 July 2017. The new and amended Standards are not expected to have a
significant impact on the Group’s financial statements except where otherwise stated:
AASB 2016-1
Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised
Losses [AASB 112]
This Standard amends AASB 112 Income Taxes to clarify the circumstances in which the recognition of deferred
tax assets may arise in respect of unrealised losses on debt instruments measured at fair value.
AASB 2016-2
Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107
This Standard amends AASB 107 Statement of Cash Flows to include additional disclosures and reconciliation
relating to changes in liabilities arising from financing activities, including both changes arising from cash flows
and non-cash changes.
AASB 2016-4
Amendments to Australian Accounting Standards – Recoverable Amount of Non-Cash-Generating
Specialised Assets of Not-for-Profit Entities
This Standard amends AASB 136 Impairment of Assets so that not-for-profit entities holding non-cash-generating
specialised assets at fair value in accordance with AASB 13 Fair Value Measurement no longer need to apply
AASB 136.
AASB 2017-2
Amendments to Australian Accounting Standards – Further Annual Improvements 2014–2016 Cycle
Specifies that summarised financial information relating to a subsidiary, associate or joint venture is not required
by AASB 12 Disclosure of Interests in Other Entities where an entity’s interests in those entities are classified as
held for sale, held for distribution to owners in their capacity as owners or discontinued operations in accordance
with AASB 5 Non-current Assets Held for Sale and Discontinued Operations.
(ii) New accounting standards and interpretations not yet adopted by the Group
Accounting Standards and Interpretations issued by the AASB that are not yet mandatorily applicable to
the Group are discussed below. These new and amended Standards are not expected to have a material
impact on the Group’s financial statements except where otherwise stated:
Applicable to annual reporting periods beginning on or after 1 January 2018
AASB 2016-3
Amendments to Australian Accounting Standards – Clarifications to AASB 15
This Standard amends AASB 15 Revenue from Contracts with Customers to clarify the requirements on
identifying performance obligations, principal versus agent considerations and the timing of recognising revenue
from granting a licence. In addition, it provides further practical expedients on transition to AASB 15.
AASB 2016-5
Amendments to Australian Accounting Standards – Classification and Measurement of Share-based
Payment Transactions
This Standard amends AASB 2 Share-based Payment to address:
(a) the accounting for the effects of vesting and non-vesting conditions on the measurement of cash-settled
share-based payments;
(b) the classification of share-based payment transactions with a net settlement feature for withholding tax
obligations; and
(c) the accounting for a modification to the terms and conditions of a share-based payment that changes the
classification of the transaction from cash-settled to equity-settled.
AASB 2016-6
Amendments to Australian Accounting Standards – Applying AASB 9 Financial Instruments with AASB 4
Insurance Contracts
This Standard amends AASB 4 Insurance Contracts to permit issuers of insurance contracts to: (a) choose to
apply the ‘overlay approach’ to eligible financial assets to calculate a single line item adjustment to profit or loss;
or (b) choose to be temporarily exempt from AASB 9 when those issuers’ activities are predominantly connected
with insurance.
67
For personal use only
Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 31 New and Amended Accounting Standards and Interpretations (Cont’d)
(ii) New accounting standards and interpretations not yet adopted by the Group (Cont’d)
AASB 2017-1
Amendments to Australian Accounting Standards – Transfers of
Improvements 2014–2016 Cycle and Other Amendments
Investment Property, Annual
Clarifies that:
a)
b)
a change in classification to or from investment property can only be made where there is evidence of a
change in use of the property. A change in management’s intention is, in isolation, not evidence of a
change in use; and
the election by a venture capital organisation, mutual fund, unit trust or similar entity to measure
investments in an associate or joint venture at fair value through profit or loss is made separately for each
associate or joint venture.
AASB 9
Financial Instruments
AASB 9 includes requirements for the classification and measurement of financial assets and incorporates
amendments to the accounting for financial liabilities and hedge accounting rules to remove the quantitative
hedge effectiveness tests and have been replaced with a business model test.
AASB 9 improves and simplifies the approach for classification and measurement of financial assets compared
with the requirements of AASB 139 as follows:
a) Financial assets that are debt instruments will be classified based on (1) the objective of the entity's business
model for managing the financial assets; (2) the characteristics of the contractual cash flows.
b) Allows an irrevocable election on initial recognition to present gains and losses on investments in equity
instruments that are not held for trading in other comprehensive income.
c) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if
doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise
from measuring assets or liabilities, or recognising the gains and losses on them, on different bases.
AASB 2012-6 also modifies the relief from restating prior periods by amending AASB 7 to require additional
disclosures on transition to AASB 9 in some circumstances. Consequential amendments were made to other
standards as a result of AASB 9 by AASB 2014-7 and AASB 2014-8. The mandatory application date of AASB 9
has been deferred to annual reporting periods beginning on or after 1 January 2018 by AASB 2014-1.
Following review it is not considered that the application of AASB 9 will have a material impact on the reporting by
the group.
AASB 2017-3
Amendments to Australian Accounting Standards – Clarifications to AASB 4
AASB 2017-3 amends AASB 4 Insurance Contracts to confirm that in Australia compliance with AASB 1023
General Insurance Contracts and AASB 1038 Life Insurance Contracts ensures simultaneous compliance with
AASB 4.
AASB 15
Revenue from Contracts with Customers
AASB 15 replaces AASB 118 Revenue, AASB 111 Construction Contracts and four Interpretations issued by the
AASB and amends the principles for recognising revenue from contracts with customers. The Standard requires
an entity to recognise revenue on a basis that depicts the transfer of promised goods or services to customers at
an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or
services. To achieve that principle, an entity shall apply all of the following steps:
a)
b)
c)
d)
e)
identify the contract with a customer;
identify the separate performance obligations in the contract;
determine the transaction price;
allocate the transaction price to the separate performance obligations in the contract; and
recognise revenue when (or as) the entity satisfies a performance obligation.
Consequential amendments to other Standards are made by AASB 2014-5 Amendments to Australian
Accounting Standards arising from AASB 15.
Following review it is not considered that the application of AASB 15 will have a material impact on the reporting
of revenue by the group.
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Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 31 New and Amended Accounting Standards and Interpretations (Cont’d)
(ii) New accounting standards and interpretations not yet adopted by the Group (Cont’d)
Interpretation 22
Foreign Currency Transactions and Advance Consideration
The Interpretation clarifies that for the purpose of determining the exchange rate to use on initial recognition of
the related asset, expense or income is the date on which the entity recognises the payment or receipt of
advance consideration in a foreign currency.
Applicable to annual reporting periods beginning on or after 1 January 2019
AASB 16
Leases
AASB 16 replaces AASB 117 Leases and sets out the principles for the recognition, measurement, presentation
and disclosure of leases.
AASB 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for
all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to
recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability
representing its obligations to make lease payments.
A lessee measures right-of-use assets similarly to other non-financial assets (such as property, plant and
equipment) and lease liabilities similarly to other financial liabilities. As a consequence, a lessee recognises
depreciation of the right-of-use asset and interest on the lease liability, and also classifies cash repayments of the
lease liability into a principal portion and an interest portion and presents them in the statement of cash flows
applying AASB 107 Statement of Cash Flows.
AASB 16 substantially carries forward the lessor accounting requirements in AASB 117 Leases. Accordingly, a
lessor continues to classify its leases as operating leases or finance leases.
Early application is permitted provided the entity also applies AASB 15 Revenue from Contracts with Customers
at or before the same date.
Interpretation 23 Uncertainty over Income Tax Treatments
Interpretation 23 clarifies how to apply the recognition and measurement requirements in AASB 112 Income
Taxes when there is uncertainty over income tax treatments.
Consequential amendments are made to AASB 1 First-time Adoption of Australian Accounting Standards as a
result of Interpretation 23 by AASB 2017-4.
AASB 2017-6
Amendments to Australian Accounting Standards – Prepayment Features with Negative Compensation.
This Standard amends AASB 9 to permit entities to measure at amortised cost or fair value through other
comprehensive income particular financial assets that would otherwise have contractual cash flows that are
solely payments of principal and interest but do not meet that condition only as a result of a prepayment feature.
AASB 2017-7
Amendments to Australian Accounting Standards – Long-term Interests in Associates and Joint Ventures
This Standard amends AASB 128 to clarify that an entity is required to account for long-term interests in an
associate or joint venture, which in substance form part of the net investment in the associate or joint venture but
to which the equity method is not applied, using AASB 9 Financial Instruments before applying the loss allocation
and impairment requirements in AASB 128.
AASB 2018-1
Annual Improvements to IFRS Standards 2015 - 2017 Cycle
The amendments clarify certain requirements in:
i)
ii)
AASB 3 Business Combinations and AASB 11 Joint Arrangements - previously held interest in a joint
operation;
AASB 112 Income Taxes - income tax consequences of payments on financial instruments classified as
equity; and
iii) AASB 123 Borrowing Costs - borrowing costs eligible for capitalisation.
69
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Energy Technologies Limited – 2018 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2018
Note 31 New and Amended Accounting Standards and Interpretations (Cont’d)
(ii) New accounting standards and interpretations not yet adopted by the Group (Cont’d)
AASB 2018-2
Amendments to Australian Accounting Standards – Plan Amendment, Curtailment or Settlement [AASB
119]
The amendment specifies how an entity accounts for defined benefit plans when a plan amendment, curtailment
or settlement occurs during a reporting period. The amendments require an entity to use the assumptions used
for the remeasurement of the net defined benefit liability or asset to determine the current service cost and the
net interest for the remainder of the reporting period after a plan event occurs.
Applicable to annual reporting periods beginning on or after 1 January 2021
AASB 17
Insurance Contracts
AASB 17 Insurance Contracts establishes principles for the recognition, measurement, presentation and
disclosure of insurance contracts. AASB 17 replaces AASB 4, AASB 1023 and AASB 1038 for for-profit entities.
Applicable to annual reporting periods beginning on or after 1 January 2022
AASB 2014-10
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to
AASB 10 and AASB 128)
Amends AASB 10 and AASB 128 to remove the inconsistency in dealing with the sale or contribution of assets
between an investor and its associate or joint venture. A full gain or loss is recognised when a transaction
involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognised when a
transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.
The mandatory application date of AASB 2014-10 has been amended and deferred to annual reporting periods
beginning on or after 1 January 2022 by AASB 2017-5.
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Energy Technologies Limited – 2018 Annual Report
Directors’ Declaration
The directors of Energy Technologies Limited declare that:
1.
the financial statements and notes, as set out on pages 25 to 70, are in accordance with the
Corporations Act 2001 and:
(a) comply with Accounting Standards and the Corporations Regulations 2001;
(b) comply with International Financial Reporting Standards as disclosed in Note 1; and
(c) give a true and fair view of the financial position as at 30 June 2018 and of the
performance for the year ended on that date of the company and consolidated entity;
2.
the Managing Director and Chief Financial Officer have each declared that:
(a) the financial records of the company for the financial year have been properly maintained
in accordance with section 286 of the Corporations Act 2001;
(b) the financial statements and notes for the financial year comply with the Accounting
Standards; and
(c) the financial statements and notes for the financial year give a true and fair view;
3.
in the directors’ opinion there are reasonable grounds to believe that the company will be able to
pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Alfred J. Chown
Chairman/Managing Director
Sydney, 28 September 2018
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Independent Auditor’s Report to the Members of Energy Technologies Limited
Report on the Audit of the Financial Report
Qualified opinion
We have audited the financial report of Energy Technologies Limited (the Company and its subsidiaries (the
Group)), which comprises the consolidated statement of financial position as at 30 June 2018, 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, and notes to the
financial statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, except for the possible effects of the matter described in the 'Basis for qualified opinion'
section of our report, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
i) giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its financial
performance for the year then ended; and
ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for qualified opinion
As noted in Note 11, there were inadequacies identified in the stocktake procedures performed by the
Group. Management has acknowledged the deficiencies and is seeking to rectify the position with a full
stock recount. Based on the audit procedures performed, quantities used in determining the inventory
balance differed materially from the quantities verified at our stock take attendance and subsequent
recounts. As noted in Note 11, management has adjusted for known misstatements to reduce inventory by
approximately $377,000. We have estimated the potential impact of further misstatements to be an
additional write-down in inventory to a maximum of $510,000. Accordingly, the net loss after tax is
understated by the same amount.
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 Corporations Act 2001 and the
ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia.
We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the Company, would be in the same terms if given to the directors as at the time of this
auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
qualified opinion.
Material uncertainty related to going concern
We draw attention to Note 1(c) in the financial report, which indicates that the Group incurred a net loss
after tax and non-controlling interest of $3,109,926 and incurred negative cash flows from operations of
$824,934 during the year ended 30 June 2018 and, as of that date, the Company’s current liabilities
exceeded its current assets by $8,501,418. These events or conditions, along with other matters as set
forth in Note 1(c), indicate that a material uncertainty exists that may cast significant doubt on the Group’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
For personal use only
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. In addition to the matter described in the Basis for qualified opinion section, we
have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Capitalised Development
Costs ($2,717,906)
Our audit procedures on the development costs included, amongst
others:
Refer to note 14 to the financial
report.
We assessed whether the projects satisfied the requirements
contained in AASB 138 for the capitalisation of development
expenditure.
Included in the Group’s intangible
assets are capitalised development
costs $2,717,906 in respect of
development products. Capitalised
development costs are considered
to be a key audit matter due to the
quantum of the asset; the degree
of management judgement and
assumptions applied in measuring
the carrying value of the asset; and
assessing
of
impairment of a development
phase asset.
presence
the
for
The most significant and sensitive
judgments incorporated into the
impairment of
assessment
capitalised development
costs
include projections of cash flows,
discount
and
assumptions regarding the Group’s
ability to exploit new products.
applied
rates
and
considerations
Other
judgments include whether the
qualify
costs
capitalised
for
capitalisation
development
as
phase costs in accordance with
AASB 138 Intangible Assets.
This includes an understanding of
the Group’s process for recording
internally
and
developed assets and the Group's
ability
the
development and demonstrate its
ability to generate future cash
flows from that asset.
measuring
complete
to
We tested that material costs incurred during the year were
appropriately allocated to the correct development asset.
We assessed management's determination of the Group's cash
generating units based on our understanding of the nature of
the Group's business and how earnings streams are monitored
and reported.
We tested the Group's assumptions and estimates used to
determine the recoverable value of its assets, including those
relating to forecast revenue, cost, capital expenditure, and
discount rates by corroborating the key market related
assumptions to external data and by reference to our
understanding of the business.
We performed sensitivity analysis in two main areas to assess
whether the carrying value of the capitalised development
costs exceeded its recoverable amount. These were the
discount rate and growth assumptions.
We assessed the reasonableness of the estimate of effective
useful life for development assets which have commenced
sales.
73
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Other information
The directors are responsible for the other information. The other information comprises the information in
Energy Technologies Limited’s annual report for the year ended 30 June 2018, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other
information we are required to report that fact. We have nothing to report in this regard.
Directors’ responsibility for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial report
that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibility for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at The Australian
Auditing and Assurance Standards Board website at: www.auasb.gov.au/auditors_files/ar2.pdf. This
description forms part of our auditor’s report.
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Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 15 of the directors’ Report for the year
ended 30 June 2018.
In our opinion, the Remuneration Report of Energy Technologies Limited for the year ended 30 June 2018,
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.
Nexia Sydney Audit & Assurance
Stephen Fisher
Director
Dated: 28 September 2018
Sydney
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Energy Technologies Limited – 2018 Annual Report
ASX Additional Information
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this
report is as follows. The information is current as at 31 August 2018.
(a) Distribution of equity securities
The number of shareholders, by size of holding, in each class of share are:
Ordinary shares
1
1,001
5,001
10,001
100,001
- 1,000
- 5,000
- 10,000
- 100,000
and over
Number of holders Number of shares
109
256
113
189
137
804
60,117
639,206
842,963
7,506,494
339,196,552
348,245,332
The number of shareholders holding less than a marketable parcel of
shares are:
678
10,306,128
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Name
Auster Holdings Pty Ltd
Alfred J. Chown
Richlake Pty Ltd
Dutchie Dog Pty Ltd – Dutchie Dog SF A/C
Richcreek Pty Ltd - GA & CJ Ferguson S/F A/C
The Western Division Pty Ltd
Zurich Square Investments Limited
Philip W Dulhunty
Jaspero Pty Ltd
Gary A Ferguson
Anthony C. Wilson
Edmund Lacis
Gregory R. Knoke - The Knoke Super Fund A/C
HSBC Custody Nominees A/C 2
Alex Hill
Philip Dulhunty Pty Ltd
Peter Dulhunty
Barroroam PL (Tank Superfund A/C)
Preen Holdings Pty Ltd - Preen Employees Super
Fund A/C
Martin Thomas
No. of shares
87,845,969
50,660,691
15,688,235
14,736,187
12,783,704
11,700,000
9,498,375
9,278,468
8,916,667
8,670,900
5,800,000
5,103,286
5,085,945
4,804,432
4,548,582
4,500,000
4,000,000
4,000,000
3,291,470
2,686,946
%
25.23
14.55
4.50
4.23
3.67
3.36
2.73
2.66
2.56
2.49
1.67
1.47
1.46
1.38
1.31
1.29
1.15
1.15
0.95
0.77
273,599,857
78.58
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Energy Technologies Limited – 2018 Annual Report
ASX Additional Information (Cont’d)
(c) Substantial shareholders
The number of shares held by substantial shareholders are:
Auster Holdings Pty Ltd
Alfred J. Chown
(d) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
Number of Shares
87,845,969
50,660,691
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