ENERGY TECHNOLOGIES LIMITED
ABN 38 002 679 469
Annual Financial Report
for the year ended 30 June 2023
Energy Technologies Limited – 2023 Annual Report
Corporate Information
ABN 38 002 679 469
Directors
Matthew Driscoll (Chairman, Non-Executive Director)
Alfred J. Chown (Executive Director)
Anthony L Smith (Non-Executive Director)
Company Secretary
Gregory R. Knoke
Registered Office
Unit J, 134-140 Old Pittwater Road
Brookvale NSW 2100
Telephone:- (02) 8978 2600
Bankers
National Australia Bank Limited
NAB House, 255 George Street
Sydney NSW 2000
Share Register
Computershare Investor Services Pty Ltd
60 Carrington Street
Sydney NSW 2000
Telephone:- (02) 8234 5000
Facsimile:- (02) 8235 8150
Auditors
Crowe Audit Australia
Level 42, 600 Bourke Street
Melbourne VIC 3000
Telephone:- (03) 9258 6700
2
Energy Technologies Limited – 2023 Annual Report
Contents
Chairman’s Report
Directors’ Report
Remuneration Report (audited)
Corporate Governance Statement
Auditor’s Independence Declaration
Statement of Profit or Loss
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 – 2023 Annual Report
Chairman’s Report
Dear Shareholder,
Before proceeding to the main body of the Chairman’s Report I would like to acknowledge the contribution to
Energy Technologies Limited (EGY) of its previous Chairman Brian Jamieson, deceased 7 August 2023, and to
again express my sincere condolences to Brian’s family. Throughout his tenure as Chairman, Brian was a mentor
to the Board and his guidance and governance in the role was exemplary. I would also like to thank Mr Ian
Campbell for his work, as a director of EGY, through the last couple of years, which have presented us with a
number of challenges.
As the Chairman of EGY, including wholly owned subsidiary Bambach Wires and Cables Pty Limited (Bambach),
I would like to start by highlighting some key metrics from FY2023 that reflect the journey and progress of our
company:
Group revenue reached $15.5m, marking a 24% increase compared to the previous corresponding period (PCP).
This was despite Bambach continuing to experience further issues with utilisation rates at the factory due partly
to the lasting effects of COVID, although these reduced greatly in the second half of the year as normal staffing
levels resumed, and this provided for an increase in productivity, which allowed Bambach to take advantage of
the higher-than-normal order book.
While the Group reported loss for the period was $15.3m, 76% down on PCP, this included a $5.2m full
impairment of intangible development assets and purchased IP and a $798K inventory write down following a
detailed review of inventory by location and adjustment for slow moving lines. When taking this into account, as
well as higher finance costs as interest rates moved higher, the operating result was marginally improved on the
FY2022 result.
During the last quarter of FY2023, Bambach entered a restructuring of the factory to move to 24-hour operations
which resulted in a restructuring of staffing levels. While largely done, this is still being finalised to ensure that the
new work arrangements have the necessary number of staff to support this increase in factory utilisation.
Production planning has also been improved and final commissioning of machinery undertaken on the Rosedale
site. The second shed housing the new silicone line is also nearing completion. The Board has determined to
impair both intangible assets and inventory to prepare the business for its fresh start in operations under the
increase in factory utilisation.
EGY also proudly announced recently Bambach’s largest contract win, with a value of $1.14m, further
demonstrating growth prospects. Importantly, Bambach current order book remains robust, which reflects the
enduring strength of our business.
In conclusion, whilst I acknowledge the hurdles faced during the past year, the Board and I remain resolute in our
commitment to growth and prosperity. Our team's dedication, coupled with the enduring support of our
stakeholders, positions us for a promising future. We are focused on leveraging our strong order book and
optimising our operations to deliver value to our shareholders.
Thank you for your continued trust and support.
Matthew Driscoll
Chairman
28 September 2023
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Energy Technologies Limited – 2023 Annual Report
Directors’ Report
The directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the ‘Group’) consisting of Energy Technologies Limited (referred to hereafter as the ‘Company’) and
the entities it controlled at the end of, or during, the year ended 30 June 2023.
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
Matthew Driscoll, (Chairman - Non-Executive Director) Appointed 20 December 2016
Mr Driscoll has significant experience across several industries, including online technologies, financial services,
fintech, property and resources. He has more than 30 years’ experience in capital markets and the financial
services industry and is an accomplished company director in roles across listed and private companies. He has
significant experience in international business growth, mergers and acquisitions, equity and debt raisings and
building strategic alliances, and remains committed to ethical, commercial and consumer-based outcomes.
Other Current Directorships: Chair Carbonxt Group (CGI), Chair Tennant Minerals (TMS), Chair Smoke Alarms
Holdings.
Mr Driscoll is a member of the Audit and Risk Committee, the Remuneration Committee and the Nomination
Committee.
Anthony Lloyd Smith (Non-Executive Director) Appointed 24 December 2020
Mr Smith has over 30 years’ experience in finance with a variety of firms concentrating on small to medium sized
companies in regard to corporate finance, institutional research sales and private wealth advice. During this time,
he was charged with running these businesses along with titles of Head of Securities and Country Director of
Austock Group and Phillip Capital. Mr Smith currently handles the investments at Cashel Family Office, a
Melbourne based multi-family office company.
Mr Smith is a member of the Audit and Risk Committee, the Remuneration Committee and the Nomination
Committee.
Alfred J Chown, B.Econ, (Executive Director) Appointed 10 August 2023.
Mr Chown has extensive experience in building businesses across Australasia. He returned to Australia in 2012
after residing in Hong Kong from 1987-2012. In 1987 he co-founded E.L. Consult Ltd an executive search
provider that prior to being sold to the Clarius group (ASX:CND) in 2007, had an extensive network of offices
throughout Hong Kong, China, Singapore and Malaysia. In the early 1990’s Mr Chown co-founded what became
the Dulhunty Power Group, under Dulhunty Power Limited (formerly ASX:DUL), a manufacturer of line fittings for
the electric power transmission and distribution industry with factories in Australia, China, Malaysia and Thailand
and offices in New Zealand and the USA. The Dulhunty Power Group was sold to Maclean Power Systems of
the USA in 2012.
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 was formerly Chairman and Director of Energy Technologies Limited (EGY), resigning on 24
December 2020 and remaining as CEO of the group and director of subsidiary Bambach Wires and Cables Pty
Limited (Bambach). Following his re-appointment as a director of EGY, Mr Chown remains as CEO of the group
and director of Bambach.
Mr Chown is a member of the Audit and Risk Committee, the Remuneration Committee and the Nomination
Committee.
5
Energy Technologies Limited – 2023 Annual Report
Directors’ Report (continued)
Brian Jamieson (Chairman – Non-Executive Director) Appointed 24 December 2020. Deceased 7 August 2023.
Mr Jamieson had over 40 years’ experience in the advisory, manufacturing, resources and technology industries
in Australia and offshore. Mr Jamieson was Chief Executive of Minter Ellison Melbourne from 2002-2005. Prior to
joining Minter Ellison, Mr Jamieson was Chief Executive Officer at KPMG Australia from 1998-2000, Managing
Partner of KPMG Melbourne and Southern Regions from 1993-1998 and Chairman of KPMG Melbourne from
2001- 2002. Prior to the merger of Touche Ross & Co and Peat Marwick Hungerfords to form KPMG, Mr
Jamieson was the Managing Partner for Australia for Touche Ross & Co. He had over 40 years’ experience in
providing advisory and audit services to a diverse range of public and large private companies. He was also a
Fellow of the Institute of Chartered Accountants in Australia and New Zealand and a Fellow of the Australian
Institute of Company Directors.
Mr Jamieson was also a Non-Executive Director of IODM Limited and a Non-Executive Director of Highfield
Resources Limited. Mr Jamieson was formerly Non-Executive Chairman of Sigma Healthcare Limited (resigned
13 May 2020), Non-Executive Chairman of Mesoblast Limited (resigned 31 March 2019), Non-Executive Director
of Oxiana/OZ Minerals Limited from 2005 to 2015 and served as Chairman of Audit Risk and Compliance,
Nomination and Remuneration, and Due Diligence Committees. He was a Non-Executive Director of Tatts Group
Limited from 2005 to December 2017 and served as the Chairman of Audit and Risk Committee, Chairman of
the Due Diligence Committee and member of the Remuneration Committee. He was also a Non-Executive
Director of ASX listed Tigers Realm Coal from 2010 to 2015 and chaired various committees.
Mr Jamieson was a member of the Audit and Risk Committee, the Remuneration Committee and the Nomination
Committee.
Ian Alistair Campbell (Non-Executive Director) Appointed 24 December 2020. Resigned 16 June 2023.
Mr Campbell joined Olex Cables in 1989 as Group General Manager and then as Managing Director of the
Pacific Dunlop Cables Group until 1998.
In 1998 Mr Campbell joined ASX-200 listed GUD Holdings Ltd as its Managing Director and CEO until his
retirement in mid-2013. GUD managed a stable of consumer, trade and industrial businesses. It was a diverse
portfolio of branded manufactured or sourced products selling to the retail, trade wholesale and B-to-B sectors.
Companies in the GUD stable during his tenure were Sunbeam appliances, Oates cleaning, Victa Lawncare
(divested in 2007), Davey Water Products, Lock Focus, Ryco and Wesfil automotive, and Dexion storage
solutions.
Mr Campbell joined the BWX board in 2015 and was appointed Chairman in September 2018.
Mr Campbell has been a non-executive director of Mirrabooka Investments Ltd since 2007. He was formerly a
national councillor and Victorian Vice-President of the Australian Industry Group.
Mr Campbell has not held any other listed directorships in addition to those set out above in the past three years.
Mr Campbell was a member of the Audit and Risk Committee, the Remuneration Committee and the Nomination
Committee.
COMPANY SECRETARY
Gregory R Knoke, B. Com, CA (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 and Company Secretary. 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, and an affiliate member of Chartered Secretaries of Australia. 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.
6
Energy Technologies Limited – 2023 Annual Report
Directors’ Report (continued)
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; and
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 FY2023 of $15,344,996 (FY2022 loss after tax
and minorities $8,731,756). Wholly owned subsidiary Bambach Wires and Cables Pty Limited (Bambach)
reported a loss after tax of $14,127,919 (FY2022 loss $7,798,291). This includes a one-off amount of $5,194,327
to fully impair the FY2023 carrying value of intangible development assets and purchased intellectual property to
NIL. In addition, the result includes an inventory write down of $798,286 (2022: $484,338) as a result of a
detailed review of inventory items by location and including slow moving stock.
During the period, Bambach experienced further issues with utilisation rates at the factory due to the lasting
effects of COVID. Pleasingly, these reduced greatly in October 2022 as normal staffing levels resumed and from
November 2022 provided for an increase in productivity which allowed the company to take advantage of the
higher-than-normal order book. This resulted in a 24% increase in sales compared to the previous corresponding
period and continues to underpin the opportunities that the company has going forward.
During April 2023, Bambach entered a restructuring of the factory to move to 24-hour operations which resulted
in a restructuring of staffing levels. While largely done, they are still being finalised to ensure that the new work
arrangements have the necessary number of staff to support this increase in factory utilisation.
The Board has determined to impair both intangible assets and inventory to prepare the business for its fresh
start in operations under this increase in utilisation. The FY2023 loss of $15.3m, when taking in to account the
impairment of intangible assets ($5.2m), the higher impairment of inventory ($0.3m) and the higher finance cost
($1m) was largely in line with the FY2022 result (down by $0.08m) due to the similar utilisation rates, from the
prior year, of the factory.
Sales still remain strong, with the company having a healthy order book in place, as underpinned by it
announcing its first project win in excess of $1m, on 28 July 2023.
STATE OF AFFAIRS
During the financial year, the Group repaid $8,579,009 (2022: $5,492,799) of both long and short-term interest
bearing debt.
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 and the Events After the Reporting Period Note 29.
DIVIDENDS
No dividends were paid or recommended by the parent company EGY this financial year.
NON-AUDIT SERVICES
During the year, Grant Thornton Audit Pty Ltd, the Company’s previous auditor, performed no other services in
addition to their statutory duties. The Company’s auditor, Crowe Audit Australia, appointed on 15 May 2023,
performed no other services in addition to their statutory duties.
Details of the amounts paid to the auditors and their associates for 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.
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Energy Technologies Limited – 2023 Annual Report
Directors’ Report (continued)
EVENTS SUBSEQUENT TO REPORTING DATE
The following matters have occurred post reporting date:
The company has raised $2,606,500 by way of the issue of convertible notes with funding received in five
tranches. These notes have a face value of $1.00, attract a 10% coupon rate, which is payable on maturity,
and are convertible at $0.08 subject to shareholder approval. These notes mature two years from the date of
issue; and
Convertibles notes of $1,000,000 which matured on 25 August 2023 have been extended until 27 November
2023. The terms of the notes remain unchanged.
Other than what is noted per above, there have been no other matters that have 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 operations of the Company, the results of those operations, or the state of affairs of the
Company in subsequent financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Refer Events Subsequent to Reporting Date above.
Future Developments and Risks
Opportunities
Energy Technologies Limited (EGY) 100% owned subsidiary, Bambach Wires and Cables Pty Limited
(Bambach) manufactures Low Voltage electric cables at its 13,000 sqm Rosedale, Victoria facility. Bambach has
a substantial range of cable making equipment manufacturing a large range of both specialised and non-
specialised low Voltage cables.
The company also has warehouses in Dandenong, Victoria, Brookvale, New South Wales and Perth, Western
Australia, as well as Sales Offices in Newcastle and Adelaide.
The recent raising of capital by way of convertible notes, with the prospect of a further convertible note
placement, means that the business is adequately capitalised ensuring raw material supply to sustain growth
which has been a failing of the company over recent years.
Bambach has a strong order book and indications of further orders for major road and rail projects from major
Australian contractors. It is involved with various defence primes and subcontractors in the development and
provision of cables for a number of defence projects including defence materiel from ships to security systems as
well as defence infrastructure, especially in Northern Australia. It is also heavily involved with nascent projects
focused on developing hydrogen and electric vehicles, onshore and offshore wind farms, solar farms and is now
progressing with supply to the Australian rolling stock industry, which is currently undergoing a massive
resurgence. The company is also continuing its re-stocking program, which began last year, to re-stock its
warehouses, which is increasing day to day sales substantially.
Bambach has more new products to launch over the coming twelve months and is also well placed with
appropriate approvals to take advantage of the expected infrastructure projects throughout Australia, such as
Inland Rail, regional rail upgrades in Victoria, Perth Metronet Projects and projects associated with the Brisbane
Olympics.
The fact that Bambach manufactures in Australia, places it at the forefront of local content suppliers for low
voltage cable. Recent global strategic considerations and supply chain dislocation due to the pandemic have
benefited the company and this is expected to continue as both State and Federal governments become ever
more demanding in their quest to support local industry both to ensure jobs and to build sovereign capability.
Strategically, the company at all levels is well placed to take advantage of growing interest in Australian
manufacturing and regionalisation and has the necessary contacts and skills to build on its capabilities to rival
the best specialist cable manufacturers in the region.
8
Energy Technologies Limited – 2023 Annual Report
Directors’ Report (continued)
LIKELY DEVELOPMENTS AND EXPECTED RESULTS (continued)
Risks
Bambach must continue to develop and upgrade its manufacturing facilities to enable it to meet efficiency and
productivity requirements and produce locally a continually expanding range and size of cables. Failure to do so
will substantially limit growth and will not allow anticipated margin improvement.
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.
Bambach is a small player in a market where there are several very large competitors and management are very
aware that to compete Bambach 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.
Bambach continues to report a loss and has not been profitable for an extended period. This weakness has been
supported financially by significant fund raising and investment, which has been successfully undertaken over
the past four years and continued in FY2023. The company must deliver to maintain the support of its
shareholders and 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 and on
increasing productivity to build a robust sustainable business. Failure to meet accepted milestones on this path
will pose a risk to continued financial support.
The Group has based its business plan on the belief that both Federal and State governments will proceed with
planned infrastructure, energy 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 Group has developed products some of which still require final testing and approval. Any failure to pass
testing in a timely manner or not obtain approval will impact negatively on the company’s performance.
Like all businesses globally the threat of further waves of the Covid-19 pandemic pose significant risk to the
economy and to the group. Rising geopolitical tensions also pose a significant risk.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The group operates a factory in Rosedale, Victoria which is required to comply with local planning laws, and with
State and Commonwealth Environmental laws. The company considers that the factory operations are 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.
9
Energy Technologies Limited – 2023 Annual Report
Directors’ Report (continued)
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 91 employees as at 30 June 2023 (2022: 74 employees).
REMUNERATION REPORT
The remuneration report is set out on page 13 and forms part of the Directors’ Report for the financial year ended
30 June 2023.
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 and Risk
Committee
Nomination
Committee
Number of meetings held:
Number of meetings attended:
Brian Jamieson (deceased 7 August 2023)
Anthony L Smith
Ian A Campbell (resigned 16 June 2023)
Matthew Driscoll
15
15
14
15
15
Committee Membership
-
-
-
-
-
7
7
7
7
7
-
-
-
-
-
During the 2023 financial year, the company’s committees were comprised as follows:
Audit and Risk Committee:
Brian Jamieson Matthew Driscoll
Anthony L Smith
Ian A Campbell
Remuneration Committee:
Brian Jamieson Matthew Driscoll
Anthony L Smith
Ian A Campbell
Nomination Committee:
Brian Jamieson Matthew Driscoll
Anthony L Smith
Ian A Campbell
At the date of this report, the company’s committees were comprised as follows:
Audit and Risk Committee:
Alfred Chown
Matthew Driscoll
Anthony L Smith
Remuneration Committee:
Alfred Chown
Matthew Driscoll
Anthony L Smith
Nomination Committee:
Alfred Chown
Matthew Driscoll
Anthony L Smith
10
Energy Technologies Limited – 2023 Annual Report
Directors’ Report (continued)
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:
Energy Technologies Limited
Ordinary
Shares
Listed
Options
Unlisted
Options
19,843,675
1,848,849
3,539,286
6,560,277
889,921
1,041,667
8,243,575
1,154,044
-
-
-
-
Dulhunty
Engineering
Limited
Ordinary Shares
-
-
59,724
-
Anthony L Smith
Matthew Driscoll
Alfred J Chown
Gary A Ferguson – director of Bambach
SHARES UNDER OPTION
Unissued ordinary shares of EGY under share option at the date of this report are as follows:
Grant date
Expiry date
Exercise price
Number under option
18 November 2020
1 December 2023
23 December 2020
23 December 2023
30 June 2021
14 October 2021
30 June 2024
31 October 2024
$0.112
$0.112
$0.168
$0.200
6,000,000
800,000
2,827,191
9,000,000
Shares issued under the non-renounceable rights issue 14 October 2021 had 25,000,058 attaching listed share
options expiring 31 October 2024. The offer price for these options was $NIL and the options have an exercise
price of $0.20.
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share
issue of the company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of EGY issued on the exercise of options during the year ended 30 June 2023 and
up to the date of this report.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under s307C of the Corporations Act 2001 is
included on page 31 of this financial report and forms part of this Directors’ Report.
11
Energy Technologies Limited – 2023 Annual Report
Directors’ Report (continued)
CORPORATE GOVERNANCE STATEMENT
Energy Technologies Limited and the Board of Directors are committed to achieving and demonstrating the
highest standards of corporate governance. Energy Technologies Limited has reviewed its corporate governance
practices against the Corporate Governance Principles and Recommendations (4th Edition) published by the ASX
Corporate Governance Council. Details of the corporate governance report is available on the Group website at
https://www.energytechnologies.com.au
Signed in accordance with a resolution of the Directors.
Alfred Chown
Director
28 September 2023
12
Energy Technologies Limited – 2023 Annual Report
Remuneration Report (audited)
The Remuneration Committee of the Board of Directors is responsible for determining and reviewing
compensation arrangements for the directors 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 emoluments 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 amounts of 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 pre-set 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; and
The amounts 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 2021 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.
13
Energy Technologies Limited – 2023 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. During the 2023 financial year Director’s fees were $50,000 per annum for Mr
Anthony L Smith, Mr Ian A Campbell, Mr Matthew Driscoll and $70,000 for Mr Brian Jamieson as Chairman.
Director’s fees are presently $50,000 per annum for Mr Anthony L Smith and Mr Matthew Driscoll. Mr Alfred
Chown is remunerated under the terms of his contract as CEO of the group.
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
Brian Jamieson
Anthony L Smith
Ian A Campbell
Matthew Driscoll
Gary A Ferguson
Alfred J Chown
Gregory. R Knoke
Nicholas Cousins
Ordinary Shares
Number of Shares held by
Key Management Personnel
Specified directors
Matthew Driscoll
Brian Jamieson
Anthony L Smith
Ian A Campbell
Specified executives
Alfred J Chown
Gregory R Knoke
Nicholas Cousins
Chairman - Non-Executive Director of EGY. Deceased 7 August 2023
Director – Non-Executive of EGY
Director – Non-Executive of EGY. Resigned 16 June 2023.
Director – Non-Executive of EGY
Director – Non-Executive of Bambach
CEO of EGY and of Bambach. Director of Bambach.
CFO/Company Secretary of EGY and Bambach
Chief Operating Officer of Bambach
Balance
30 June 2022
Received as
Remuneration
Purchases
Disposals
Balance
30 June 2023
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,560,277
987,740
19,843,675
1,975,479
8,243,575
207,887
95,238
37,913,871
6,560,277
987,740
19,843,675
1,975,479
8,243,575
207,887
95,238
37,913,871
-
-
-
-
-
-
-
-
14
Energy Technologies Limited – 2023 Annual Report
Remuneration Report (audited)
Unlisted Options
Number of Options held by
Key Management Personnel
Specified directors
Matthew Driscoll
Brian Jamieson
Anthony L Smith
Ian A Campbell
Specified executives
Alfred J Chown
Gregory R Knoke
Nicholas Cousins
Balance
30 June 2022
Received as
Remuneration
Acquired
Forfeited
Balance
30 June 2023
1,041,667
446,238
3,539,286
595,238
-
-
-
5,622,429
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,041,667
446,238
3,539,286
595,238
-
-
-
-
-
-
-
595,238
5,027,191
The unlisted options issued under the Share Option Plan vest in accordance with the vesting dates shown
below and are exercisable on the vesting date. The options are subject to a service condition being continuous
employment until vesting date. Refer below:
Name
Number of
options
granted
Grant date
Vesting date
Expiry date Exercise price
Fair value per
option at grant
date
Brian Jamieson
148,746
30 June 2021 30 June 2022 30 June 2024
$0.168
148,746
30 June 2021 30 June 2023 30 June 2024
$0.168
148,746
30 June 2021 30 June 2024 30 June 2024
$0.168
446,238
Matthew Driscoll
347,222
30 June 2021 30 June 2022 30 June 2024
$0.168
347,222
30 June 2021 30 June 2023 30 June 2024
$0.168
347,223
30 June 2021 30 June 2024 30 June 2024
$0.168
1,041,667
Anthony L Smith
446,429
30 June 2021 30 June 2022 30 June 2024
$0.168
446,429
30 June 2021 30 June 2023 30 June 2024
$0.168
446,428
30 June 2021 30 June 2024 30 June 2024
$0.168
1,339,286
$0.0346
$0.0790
$0.0596
$0.0346
$0.0790
$0.0596
$0.0346
$0.0790
$0.0596
In addition to the above, Anthony L Smith holds an additional 2,200,000 unlisted options through a nominee
entity.
15
Energy Technologies Limited – 2023 Annual Report
Remuneration Report (audited)
Listed Options
Number of Options held by
Key Management Personnel
Specified directors
Matthew Driscoll
Brian Jamieson
Anthony L Smith
Ian A Campbell
Specified executives
Gregory R Knoke
Balance
30 June 2022
Received as
Remuneration
Acquired
Disposals
Balance
30 June 2023
889,921
90,685
1,848,849
181,370
14,760
3,025,585
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
889,921
90,685
1,848,849
181,370
14,760
3,025,585
Shares issued under the non-renounceable rights issue 14 October 2021 had 25,000,058 attaching listed
options expiring 31 October 2024. The offer price for these options was $NIL and the options have an exercise
price of $0.20.
Voting and comments made at the Company’s last Annual General Meeting
Energy Technologies Limited received 100% of ‘yes’ votes on its Remuneration Report for the financial year
ending 30 June 2022. The Company received no specific feedback on its Remuneration Report at the Annual
General Meeting.
Use of remuneration consultants
Energy Technologies Limited did not employ the services of any remuneration consultants in FY2023.
Employment agreements
Remuneration and other terms of employment for the Executive Directors and other Key Management
Personnel are formalised in an employment agreement. The major provisions of the agreements relating to
remuneration as set out below:
Employee
Base Salary (per annum)
Term of Agreement
Notice Period
Alfred J Chown
Gregory R Knoke
Nicholas Cousins
$287,671
$192,877
$180,000
Unspecified
Unspecified
Unspecified
3 months
1 month
3 months
Other transactions with key management personnel
1) During the period to 30 June 2022 a loan was made from Director and CEO Alfred Chown of $200,000. An
amount of $10,000 was repaid during the current period, and the loan principal is currently $190,000. The
loan matures on 11 April 2024, or as mutually agreed. The interest rate is 10% and during the period
$21,110 of interest was paid.
2) A loan from Director Matthew Driscoll of principal $500,000 as at 30 June 2022 was repaid during the
period. The repayment included accrued interest of $31,506.
Included in Sundry payables and accrued expenses are unpaid Directors fees of $143,056.
3)
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.
16
Energy Technologies Limited – 2023 Annual Report
Remuneration Report (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 2023. Short-term benefits and post-employment benefits received relates
to fixed contracted amounts, and no short-term incentives were paid during the year. The current share option plan is subject to participants meeting service conditions at the
vesting date, and there were no performance conditions linked to the share option plan.
2023
Short-term benefits
Cash, salary,
fees &
commissions
Cash
Bonus
Post
Employment
Benefits
Share-based payment
Total
Other
Superannuation
Shares
Options
Specified Directors
Position (s) Held
$
$
$
$
$
$
$
Brian Jamieson
Chairman/ Non-Executive Director of
EGY. Deceased 7 August 2023
Anthony L Smith
Non-Executive Director of EGY
Ian A Campbell
Non-Executive Director of EGY.
Resigned 16 June 2023
Matthew Driscoll
Non-Executive Director of EGY
Gary A Ferguson
Director of Bambach
Alfred J Chown
Specified executives
CEO of EGY Group, Director of EGY
(appointed 10 August 2023) and
Director of Bambach.
Gregory R Knoke
CFO/Company Secretary of EGY
and Bambach
Nicholas Cousins
COO of Bambach
70,000
50,000
50,000
50,000
12,000
309,893
192,877
178,363
913,133
-
-
-
-
-
-
-
-
-
17
-
-
-
-
-
-
7,350
-
5,250
-
-
25,292
8,670
20,253
18,000
18,728
26,670
76,873
-
-
-
-
-
-
-
-
-
8,865
26,604
86,215
76,604
(20,045)
35,205
20,692
-
-
-
-
70,692
12,000
335,185
221,800
215,091
36,116
1,052,792
Energy Technologies Limited – 2023 Annual Report
Remuneration Report (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 2022. Short-term benefits and post-employment benefits received relates
to fixed contracted amounts, and no short-term incentives were paid during the year. The current share option plan is subject to participants meeting service conditions at the
vesting date, and there were no performance conditions linked to the share option plan.
2022
Short-term benefits
Cash, salary,
fees &
commissions
Cash
Bonus
Other
Post
Employment
Benefits
Superannuation
Share-based payment
Total
Shares
Options
Specified Directors
Position (s) Held
$
$
$
$
$
$
$
Brian Jamieson
Chairman/ Non-Executive Director of
EGY
Anthony L Smith
Non-Executive Director of EGY
Ian A Campbell
Non-Executive Director of EGY
Matthew Driscoll
Non-Executive Director of EGY
Yulin Hu
Non-Executive Director of EGY.
Resigned 4 October 2021.
Gary A Ferguson
Director of Bambach
Specified executives
Alfred J Chown
Gregory R Knoke
CEO of EGY Group and Director of
Bambach
CFO/Company Secretary of EGY
and Bambach
Nicholas Cousins
COO of Bambach
70,000
50,000
50,000
50,000
12,500
12,000
283,714
192,819
162,470
883,503
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,000
-
5,000
-
-
-
23,568
8,670
19,256
18,000
16,247
26,670
71,071
-
-
-
-
-
-
-
-
-
-
8,865
26,604
11,824
20,692
-
-
-
-
-
85,865
76,604
66,824
70,692
12,500
12,000
307,282
220,745
196,717
67,985
1,049,229
End of the audited Remuneration Report.
18
Energy Technologies Limited – 2023 Annual Report
Corporate Governance Statement
The Company’s corporate governance practices are discussed below. Energy Technologies Limited and the
Board of Directors are committed to achieving and demonstrating the highest standards of corporate
governance. Energy Technologies Limited has reviewed its corporate governance practices against the
Corporate Governance Principles and Recommendations (4th Edition) published by the ASX Corporate
Governance Council. Details of the corporate governance report is available on the Group website at
https://www.energytechnologies.com.au
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 Group’s corporate governance practices are regularly
reviewed. This statement has been approved by the Board and the information in this statement is current as at
28 September 2023.
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1: Board and Management Responsibilities
A listed entity should disclose:
a)
b)
the respective roles and responsibilities of its board and management; and
those matters expressly reserved to the board and those delegated to management.
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 under the Board Charter, and certain others
are delegated to the senior executives of the Group.
The responsibilities of the Board include:
Appointment of senior executives and the determination of their terms and conditions including
remuneration and termination;
Driving the strategic direction of the Company, ensuring appropriate resources are available to meet
objectives and monitoring management’s performance;
Reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct
and legal compliance;
Approving and monitoring the progress of major capital expenditure, capital management and significant
acquisitions and divestitures;
Approving and monitoring the budget and the adequacy and integrity of financial and other reporting;
Approving the annual, half yearly and quarterly accounts;
Approving significant changes to the organisational structure;
Approving the issue of any shares, options, equity instruments or other securities in the Company (subject
to compliance with ASX Listing Rules);
Ensuring a high standard of corporate governance practice and regulatory compliance and promoting
ethical and responsible decision making;
Recommending to shareholders the appointment of the external auditor as and when their appointment or
re-appointment is required to be approved by them (in accordance with the ASX Listing Rules); and
Meeting with the external auditor, at their request, without management being present.
A schedule of directors’ meetings and attendances is detailed in the directors’ report.
Delegation to the CEO
The Board has delegated responsibility for implementing EGY strategic direction and for the operation and day
to day administration of the company to the CEO and executive management.
19
Energy Technologies Limited – 2023 Annual Report
Corporate Governance Statement (continued)
Recommendation 1.2: Appointment of Directors and election
A listed entity should disclose:
a) undertake appropriate checks before appointing a person or putting forward to security
holders a candidate for election, as a director; and
b) provide security holders with all material information in its possession relevant to a decision
on whether or not to elect or re-elect a director.
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 to 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.
When considering the appointment of a new Director, the Board may engage the services of an executive
recruitment firm to assist in identifying suitable candidates to be shortlisted for consideration for appointment to
the Board and to carry out appropriate reference checks before the Board makes an offer to a preferred
candidate.
Newly appointed directors must stand for reappointment at the next subsequent AGM. The Notice of Meeting
for the AGM provides shareholders with information about each Director standing for election or re-election
including details of relevant skills and experience.
Recommendation 1.3:
A listed entity should have a written agreement with each director and executive setting out the terms of their appointment.
New Directors consent to act as a director and receive a formal letter of appointment which sets out duties and
responsibilities, rights, and remuneration entitlements.
Recommendation 1.4: Company Secretary
The company secretary of a listed entity should be accountable directly to the chair, on all matters to do with the proper
functioning of the board.
EGY’s Company Secretary fulfils a broad range of management responsibilities in addition to company
secretarial duties. As a result, the formal reporting line of the Company Secretary is to the CEO. For any matter
relevant to the company secretarial duties or conduct of the Board, the Company Secretary has an indirect
reporting line, and is accountable, to the Chair of the Board.
The responsibilities of the Company Secretary include:
advising the board and committee on governance issues;
monitoring adherence to company policies;
communicating with the ASX as required;
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.
Recommendation 1.5: Diversity
A listed entity should:
a) have a diversity policy which includes requirements for the board to or a relevant committee of the
board to set measurable objectives for achieving gender diversity and to assess annually both the
objectives and the entity’s progress in achieving them;
b) disclose that policy or a summary of it; and
c) disclose as at the end of each reporting period the measurable objectives for achieving gender
diversity set by the board or a relevant committee of the board in accordance with the entity’s
diversity policy and its progress towards achieving them and either:
1. the respective proportions of men and women on the board, in senior executive
positions and across the whole organisation (including how the entity has defined
“senior executive” for these purposes); or
2. if the entity is a “relevant employer” under the Workplace Gender Equality Act, the
entity’s most recent “Gender Equality Indicators”, as defined in and published under
that Act.
20
Energy Technologies Limited – 2023 Annual Report
Corporate Governance Statement (continued)
Recommendation 1.5: Diversity (continued)
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. However, the Group has not
disclosed its policy concerning diversity, its measurable objectives for achieving gender diversity and its
progress towards achieving those objectives.
The Board continues to monitor diversity across the organisation. Due to the size of the Group, the Board does
not consider it appropriate at this time to formally set measurable objectives for gender diversity. 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 be encouraged. The Board will keep the gender composition of its
workforce under review.
In accordance with this policy, the Board provides the following information pertaining to the proportion of
women across the organisation at the date of this report:
Nineteen per cent (19%) of all the Group’s employees are women.
Recommendations 1.6: Board Review
A listed entity should:
a) have and disclose a process for periodically evaluating the performance of the board, its
committees and individual directors; and
b) disclose, in relation to each reporting period, whether a performance evaluation was
undertaken in the reporting period in accordance with that process.
The Board of EGY conducts its performance review of itself on an ongoing basis throughout the year. The small
size of the Group and hands on management style requires an increased level of interaction between Directors
throughout the year. Board members meet amongst themselves both formally and informally. The Chairman in
his role speaks with each director individually regarding board performance. The Board considers that the
current approach that it has adopted with regard to the review of its performance provides the best guidance
and value to the Group given its size.
Recommendations 1.7: Senior Executive Reviews
A listed entity should:
a) have and disclose a process for periodically evaluating the performance of its senior
executives; and
b) disclose, in relation to each reposting period, whether a performance evaluation was
undertaken in the reporting period in accordance with that process.
The Remuneration Committee and the Board undertake a performance review of the CEO and senior executive
performance on an ongoing basis throughout the year, including setting targets. The Board considers that the
current approach that it has adopted with regard to the review of its performance provides the best guidance
and value to the Group given its size.
Principle 2: Structure the board to add value
The composition of the Board is structured to efficiently discharge its responsibilities and duties. EGY’s
Constitution provides for a minimum of three directors and a maximum of twenty.
Recommendation 2.1: Nomination Committee
The Board of a listed entity should:
a) have a nomination committee which:
is chaired by an independent director;
1. has at least three members, a majority of whom are independent directors; and
2.
and disclose:
3.
4.
5. as at the end of each reporting period, the number of times the committee met
throughout the period and the individual attendances of the members at those
meetings; or
the charter of the committee;
the members of the committee; and
b)
if it does not have a nomination committee, disclose that fact and the processes it employs
to address board succession issues and to ensure that the board has the appropriate
balance of skills, knowledge, experience, independence and diversity to enable to
discharge its duties and responsibilities effectively.
21
Energy Technologies Limited – 2023 Annual Report
Corporate Governance Statement (continued)
Recommendation 2.1: Nomination Committee (continued)
During the 2023 financial year EGY had a formally elected Nomination Committee consisting of the board
members and made up of non-executive directors, with an independent non-executive chairman. EGY formally
elected a reconstructed Nomination Committee in August 2023 following the death of Chairman Brian
Jamieson and the resignation of non-executive independent director Ian Campbell. This committee consists of
the Board members and accordingly is currently made up of two non-executive directors and executive director
Alfred Chown.
The Chairman Matthew Driscoll is an independent non-executive director. Although formally constituted the
board as a whole continues to fulfil this function. Board members meet both formally and informally and
maintain a strong interaction between directors and senior management, enabling the board to assess that the
appropriate balance of skills, knowledge, experience, independence and diversity is in place to enable the
board to discharge its duties and responsibilities effectively.
For Directors retiring by rotation, the Board assesses that director in his/her absence before recommending re-
election.
Recommendation 2.2: Board skills matrix
The listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board
currently has or is looking to achieve in its membership.
The Board of Directors is currently comprised of a Chairman, together with one non-executive Director and one
interim executive Director. The Board considers that a diversity of skills, knowledge, experience, backgrounds
and gender is in place to effectively govern the business. The current Board profile addresses this with the
following experience, skills and qualifications represented on the Board:
an extensive range of business and senior executive experience;
experience on listed and unlisted company and 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; and
an understanding of the health and safety challenges of the business.
Recommendations 2.3, 2.4, 2.5: Board Composition, Independence of Directors and Chairman
Recommendation 2.3:
A listed entity should disclose:
a)
b)
c)
the names of the directors considered by the board to be independent directors;
if a director has an interest, position, association or relationship of the type described in
Box 2.3 but the board is of the opinion that it does not compromise the independence of
the director, the nature of the interest, position, association or relationship in question and
an explanation of why the board is of that opinion; and
the length of service of each director.
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
Matthew Driscoll
Chairman/Non-Executive Director
Anthony Lloyd Smith
Alfred John Chown
Non-Executive Director
Executive Director
6
2
-
9
9
2
22
Energy Technologies Limited – 2023 Annual Report
Corporate Governance Statement (continued)
Recommendation 2.3: (continued)
During the 2023 financial year the Company had a majority of independent directors on the board and an
independent non-executive chairman. Non-executive director Anthony Lloyd Smith was not independent. As a result
of the recent death of Chairman Brian Jamieson and the resignation of independent director Ian Campbell, together
with the appointment of executive director Alfred Chown, the Company currently does not have a majority of
independent directors on the board. Non-executive director Anthony Lloyd Smith and Executive director Alfred John
Chown are not independent.
The non-executive directors are materially independent in complying as a director who is not a member of
management, is a Non-Executive Director and who:
is not a substantial shareholder (under the meaning of Corporations Act 2001) of the Group or an officer of, or
otherwise associated, directly or indirectly, with a substantial shareholder of the Group;
has not within the last three years been employed in an executive capacity by the Group or another Group
member, or been a Director after ceasing to hold any such employment;
is not a principal of a professional adviser to the Group or another Group member;
is not a significant consultant, supplier or customer of the Group or another Group member, or an officer of or
otherwise associated, directly or indirectly, with a significant consultant, supplier or customer;
has no significant contractual relationship with the Group or another Group member other than as a Director of
the Group; and
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 Group.
Recommendation 2.4:
The majority of the Board of a listed entity should be independent Directors.
During the 2023 financial year, in accordance with the definition of independence above, three directors were
considered independent. As of the date of this report and in accordance with the definition of independence above,
only one director is currently considered independent. Following the death of chairman Brian Jamieson and the
resignation of non-executive director Ian Campbell, executive director Alfred Chown has been re-appointed to the
board as an interim managing director. The board will continue to review this position and appoint further non-
executive independent directors as appropriate to the size and requirements of the company. There are procedures in
place, as agreed by the board, to enable Directors to seek independent professional advice on issues arising in the
course of their duties at the Group’s expense.
Recommendation 2.5:
The Chair of the Board of a listed entity should be an independent Director and, in particular, should not be the same person
as the CEO of the entity.
Under EGY’s Constitution, the Board elects a Chairman from amongst the non-executive Directors. If a Chairman ceases to
be an independent Director then the Board will consider appointing a lead independent Director. EGY’s current Chairman,
Matthew Driscoll, is considered an independent director. The Directors consider that the current Chairman of the Board is
appropriate for the size and nature of operations of the Group.
Recommendation 2.6: Professional Development
The listed entity should have a program for inducting new directors and provide appropriate professional development
opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors
effectively.
The formal letter of appointment and an induction pack provided to Directors contain sufficient information to allow the new
Director to gain an understanding of:
The rights, duties and responsibilities of Directors;
The role of Board Committees;
The roles and responsibilities of the Chairman; and
EGY’s financial, strategic, and operational risk management position.
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,
give consideration to corporate governance matters, including the relevance of existing committees and to review 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.
23
Energy Technologies Limited – 2023 Annual Report
Corporate Governance Statement (continued)
Principle 3: Instil a culture of Acting lawfully, ethically and responsibly
Recommendations 3.1 and 3.2: Code of Conduct
A listed entity should articulate and disclose its values and:
a) have a code of conduct for its directors, senior executives and employees; and
b) disclose that code or a summary of it.
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 reviewed and may be amended as necessary to ensure it continues to reflect the best practices
necessary to consider legal obligations, maintain the Company’s integrity and comply with the reasonable
expectations of the Company’s shareholders.
Personal and Professional Behaviour;
The Code of Conduct, Employee Handbook and Policy Statements set out a number of overarching principles
of ethical behaviour which include:
Conflict of Interest;
Public and Media Comment;
Use of Company Resources;
Security of Information;
Intellectual Property/Copyright
Discrimination and Harassment;
Corrupt Conduct;
Occupational Health and Safety;
Responsibilities to Investors;
Reporting Matters of Concern.
Legislation;
Fair Dealing;
Insider Trading;
Breaches of the Code of Conduct; and
Training about the Code of Conduct is part of the induction process for new EGY employees.
Recommendation 3.3:
A listed entity should:
a) have and disclose a whistleblower policy; and
b) ensure that the board or a committee of the board is informed of any material incidents reported under that
policy.
The Company’s Whistleblower Policy is disclosed in the Company’s Corporate Governance documents and on
the EGY website. The policy identifies the types of concerns that may be reported under the policy and how
and to whom reports should be made. It also explains how the confidentiality of the whistleblower is
safeguarded and outlines the processes for follow up investigation.
Recommendation 3.4:
A listed entity should:
a) have and disclose an anti-bribery and corruption policy; and
b) ensure that the board or a committee of the board is informed of any material breaches of that policy.
The Company’s Anti-bribery Policy is disclosed in the Company’s Corporate Governance documents and on
the EGY website. The policy acknowledges the criminal and civil penalties that may be incurred if the company
is involved in bribery or corruption and prohibits the giving of bribes or other improper payments or
commissions. The policy identifies the types of concerns that may be reported under the policy and how and to
whom reports should be made.
24
Energy Technologies Limited – 2023 Annual Report
Corporate Governance Statement (continued)
Principle 4: Safeguard the integrity of corporate reports
The following structure is set up to independently verify and safeguard the integrity of financial reporting.
Recommendation 4.1: Audit Committee
A board of a listed entity should:
a) have an audit committee which:
1. has at least three members, all of whom are non-executive directors and a majority
of whom are independent; and
is chaired by an independent director, who is not the chair of the board,
2.
and disclose:
3.
4.
5.
the charter of the committee;
the relevant qualifications and experience of the members of the committee; and
in relation to each reporting period, the number of times the committee met
throughout the period and the individual attendances of the members at those
meetings; or
b)
if it does not have an audit committee, disclose that fact and the processes it employs that
independently verify and safeguard that integrity of its corporate reporting, including the
processes for the appointment and removal of the external auditor and the rotation of the
audit engagement partner.
The Board has established an Audit and Risk Committee. The names and qualifications of those appointed to
the audit committee for the year ended 30 June 2023 and their attendance at meetings of the committee are
included in the directors’ report. During the 2023 financial year the audit committee consisted of a majority of
independent directors, refer 2.3 Board Composition, and included four members, with independent director
Matthew Driscoll as Chairman of the Audit Committee. Following the death of chairman Brian Jamieson and
the resignation of non-executive director Ian Campbell, and the appointment of executive director Alfred Chown
to the board, the re-constituted audit committee currently includes three members, two of whom are not
independent. Independent director Matthew Driscoll remains as Chairman of 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.
It is the audit and risk Committee’s responsibility to ensure that an effective internal control framework exists
within the entity. This includes both internal controls to deal with both the effectiveness and efficiency of
significant business processes, the safeguarding of assets, the maintenance of proper accounting records, and
the reliability of financial and non- financial information. It is the committee’s responsibility for the establishment
and maintenance of a framework of internal control of the Group.
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; and
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.
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.
Recommendation 4.2:
The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its
CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that
the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial
position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk
management and internal control which is operating effectively.
To assist the Board in approving the Company’s financial statements, the CEO and the CFO 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.
25
Energy Technologies Limited – 2023 Annual Report
Corporate Governance Statement (continued)
Recommendation 4.3:
A listed entity should disclose its process to verify the integrity of any periodic corporate report it releases to the market that
is not audited or reviewed by an external auditor.
As outlined in Recommendation 4.1 above, the audit and risk committee responsibilities include ensuring the
reliability of financial and non- financial information. In addition all market releases are reviewed by the board of
EGY and require a resolution from the board approving the release.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1: Disclosure
A listed entity should:
a) have a written policy for complying with its continuous disclosure obligations under the
Listing Rules; and
b) disclose that policy or a summary of it.
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 reviewed regularly and disclosed in the Company’s Corporate Governance
documents on its web site.
Recommendation 5.2:
A listed entity should ensure that its board receives copies of all material announcements promptly after they have been
made.
The Company Secretary in consultation with the CEO and Directors is responsible for communications with the ASX.
The Company Secretary reports to the Board on matters that were either notified or not notified to the ASX. Directors
receive copies of all announcements immediately after notification to the ASX. All ASX announcements are available
on the EGY website.
Recommendation 5.3:
A listed entity that gives a new and substantive investor or analyst presentation should release a copy of the presentation
materials on the ASX Market Announcements Platform ahead of the presentation.
The Board of Directors approves all substantive presentations prior to release, including those required to be
disclosed under listing Rule 3.1. Presentations in this category including those to be released at the Annual General
Meetings are released on the ASX Market Announcements Platform ahead of the presentation.
Principle 6: Respect the rights of shareholders
Recommendation 6.1: Information on website
A listed entity should provide information about itself and its governance to investors via its website.
EGY’s website at www.energytechnologies.com.au provides detailed information about its business and operations.
Details of EGY’s Board Members can be found here.
The Company’s, and subsidiary Bambach Wires and Cables Pty Limited, website contains extensive information
about the board and management and provides helpful information to shareholders. It allows shareholders to view
ASX and media releases; various investor presentations; a copy of the most recent Annual Report and Annual
Reports for at least the two previous financial years; and the notice of meeting and accompanying explanatory
material for the most recent Annual General Meeting.
Shareholders can find information about EGY’s corporate governance on its website. This includes EGY’s
Constitution, Board and Board Charters, and an extensive list of other Policies that support corporate governance.
Documents published on the EGY website include:
Constitution;
Corporate Governance Statement;
Whistle-Blower Policy;
Securities Trading Policy; and
Anti-Bribery Policy.
Board Charter;
Audit Committee Charter;
26
Energy Technologies Limited – 2023 Annual Report
Corporate Governance Statement (continued)
Recommendation 6.2: Investor relations
A listed entity should design and implement an investor relations program to facilitate effective two-way communication with
investors.
EGY is committed to communicating effectively with its shareholders and making it easier for shareholders to
communicate with the Group.
EGY promotes effective communication with shareholders and encourages effective participation at general
meetings, information is communicated to shareholders:
Through the release of information to the market via the ASX;
Through the Annual Report, half yearly report and quarterly reports;
Through the distribution of the annual report and notices of annual general meeting;
Through shareholder meetings and investor relations presentations;
The external auditors are required to attend the annual general meeting and are available to answer any
shareholder questions about the conduct of the audit and preparation of the audit report; and
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.
Recommendation 6.3: Participation at meetings
A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings
of security holders.
Notices of meeting sent to EGY’s shareholders comply with the “Guidelines for notices of meeting” issued by the
ASX in August 2007. Shareholders are invited to submit questions before the meeting and, at the meeting, the
Chairman attempts to answer as many of these as is practical.
The Chairman also 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 Chairman
may respond directly to questions or, at his discretion, may refer a question to another Director or senior
management.
New Directors or Directors seeking re-election are given the opportunity to address the meeting and to answer
questions from shareholders.
Recommendation 6.4:
A listed entity should ensure that all substantive resolutions at a meeting of security holders are decided by poll rather than
by a show of hands.
EGY recognises the principle of “one security one vote’ in deciding the votes of shareholders at general meeting.
Proxy results are calculated prior to the meeting and are reported to all shareholders present by the Chairman. A
show of hands by shareholders present is supported by a poll based on the proxy vote and shareholders present on
all substantive resolutions.
Recommendation 6.5:
A listed entity should give security holders the option to receive communications from, and send communications to, the
entity and its security registry electronically.
The Company encourages electronic communication directly via email with shareholders at all times. Shareholders
have the option of electing to receive all shareholder communications by e-mail. EGY provides a printed copy of the
Annual Report to only those shareholders who have specifically elected to receive a printed copy.
27
Energy Technologies Limited – 2023 Annual Report
Corporate Governance Statement (continued)
Principle 7: Recognise and manage risk
Recommendation 7.1: Risk Committee
A board of a listed entity should:
a) have a committee or committees to oversee risk, each of which:
1. has at least three members, all of whom are non-executive directors and a majority of
whom are independent; and
is chaired by an independent director, who is not the chair of the board,
the charter of the committee;
the members of the committee; and
2.
and disclose:
3.
4.
5. as at the end of each reporting period the number of times the committee met
throughout the period and the individual attendances of the members at those
meetings; or
b)
if it does not have a risk committee or committees that satisfy (a) above, disclose that fact
and the processes it employs for overseeing the entity’s risk management framework.
The Audit and Risk Committee meets at least 2 times a year and completes a Risk and Compliance checklist to
recognise and manage risk. Details of the structure and Charter of the Audit and Risk Management Committee
are set out in Recommendation 4.1.
The Group also 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.
Recommendation 7.2: Risk Review
The board or a committee of the board should:
a)
review the entity’s risk management framework at least annually to satisfy itself that it
continues to be sound; and
b) disclose, in relation to each reporting period, whether such a review has taken place.
The Audit and Risk Committee is responsible for reviewing risk management policies and for satisfying itself
that EGY has a sound system of risk management and internal control that is operating effectively. The Audit
and Risk Committee also reviews and approves EGY’s main identified risk exposures and the actions being
taken to mitigate those risks and reports to the board on material matters.
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 several 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, 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 report from the CFO which assist in discharging the Board's responsibility to manage the Group's
financial risks; and
The Board holds 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.
28
Energy Technologies Limited – 2023 Annual Report
Corporate Governance Statement (continued)
Recommendation 7.3: Internal Audit
A listed entity should disclose:
a)
b)
If it has an internal audit function, how the function is structured and what role it performs;
or
If it does not have an internal audit function, that fact and the processes it employs for
evaluating and continually improving the effectiveness of its risk management and internal
control processes.
The Board does not have an established internal audit function, given the size of its operation, 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
through that Audit and Risk Committee.
The risk management functions of the board are summarised under recommendations 7.1 and 7.2.
Recommendation 7.4: Sustainability Risks
A listed entity should disclose whether it has any material exposure to environmental or social risks and, if it does, how it
manages or intends to manage those risks.
The Audit and Risk Committee informally monitors and manages the Groups exposure to economic,
environment and social responsibility risks. The Board considers that the current approach that it has adopted
with regard to the sustainability risk management process is appropriate to the size and nature of operations of
the Group.
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1: Remuneration Committee
A board of a listed entity should:
a) have a remuneration committee which:
1. has at least three members, all of whom are non-executive directors and a majority of
whom are independent; and
is chaired by an independent director,
the charter of the committee;
the members of the committee; and
2.
and disclose:
3.
4.
5. as at the end of each reporting period the number of times the committee met
throughout the period and the individual attendances of the members at those
meetings; or
b)
if it does not have a remuneration committee, disclose that fact and the processes it
employs for setting the level and composition of remuneration for directors and senior
executives and ensuring that such remuneration is appropriate and not excessive.
The Board has established a remuneration committee. The Remuneration Committee is responsible for
determining and reviewing compensation arrangements for executive directors and key management personnel
and reporting its recommendations to the Board of EGY. 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. During the 2023 financial year the remuneration committee consisted of
four directors, with a majority of independent directors. Following the death of chairman Brian Jamieson and
the resignation of non-executive director Ian Campbell, and the appointment of executive director Alfred Chown
to the board, the re-constituted remuneration committee currently includes three members, two of whom are
not independent. Independent director Matthew Driscoll is Chairman of the audit committee. The CEO and
CFO are 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.
29
Energy Technologies Limited – 2023 Annual Report
Corporate Governance Statement (continued)
Recommendation 8.2: Executive and Directors Remuneration Policies
A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors
and the remuneration of executive directors and other senior executives.
A Remuneration Report required under Section 300A(1) of the Corporations Act is provided in the Directors’
Report which forms part of the Annual Report.
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. The
remuneration committee reviews executive packages by reference to company performance, executive
performance, comparative industry information and relevant independent advice. The performance of
executives is measured against criteria agreed which includes the forecast growth of the Company’s turnover
and production targets and shareholders’ value.
The Company’s non-executive directors are paid directors’ fees for their normal performance of duties as a
director.
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.
Recommendation 8.3: Equity based Remuneration Scheme
A listed entity which has an equity-based remuneration scheme should:
a) have a policy on whether participants are permitted to enter into transactions (whether
through the use of derivatives or otherwise) which limit the economic risk of participating in
the scheme; and
b) disclose that policy or a summary of it.
A revised Directors Equity Plan was established in 2017 and approved by shareholders at the 2020 Annual
General Meeting.
Executives and employees are also entitled to participate in the EGY Share Option Plan, approved by
shareholders at the 2021 Annual General Meeting. The Employee Share Option Plan is part of the
remuneration package of the Group’s directors, senior management and sales personnel. Options under this
plan will vest if the participant remains employed for the agreed vesting period.
The decision on whether to exercise the options is up to the participant has thereby limiting the economic risk of
participating in the scheme.
Recommendation 9.1:
A listed entity with a director who does not speak the language in which board or security holder meetings are held or key
corporate documents are written should disclose the processes it has in place to ensure the director understands and can
contribute to the discussions at those meetings and understands and can discharge their obligations in relation to those
documents.
The current board of directors speak the language in which board and security holder meetings are held or
corporate documents written.
30
Crowe Audit Australia
ABN 13 969 921 386
Level 42, 600 Bourke Street
Melbourne VIC 3000 Australia
c/o Findex Mail Processing Team
PO Box 1608
Mildura VIC 3502 Australia
Main +61 (03) 9258 6700
Fax +61 (03) 9258 6722
www.crowe.com.au
Auditor’s Independence Declaration
Under Section 307c of the Corporations Act 2001
To the Directors of Energy Technologies Limited and its Controlled
Entities
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2023, there have been:
(i) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Energy Technologies Limited and the entities it controlled during the
period.
Yours sincerely,
Crowe Audit Australia
Antony Barnett
Partner
28 September 2023
Some of the Crowe personnel involved in preparing this document may be members of a professional scheme approved under Professional
Standards Legislation such that their occupational liability is limited under that Legislation. To the extent that applies, the following disclaimer
applies to them. If you have any questions about the applicability of Professional Standards Legislation to Crowe’s personnel involved in
preparing this document, please speak to your Crowe adviser.
Liability limited by a scheme approved under Professional Standards Legislation.
The title ‘Partner’ conveys that the person is a senior member within their respective division and is among the group of persons who hold an
equity interest (shareholder) in its parent entity, Findex Group Limited. The only professional service offering which is conducted by a
partnership is external audit, conducted via the Crowe Australasia external audit division and Unison SMSF Audit. All other professional
services offered by Findex Group Limited are conducted by a privately-owned organisation and/or its subsidiaries.
Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a
separate and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe
Global or any other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or
partnership interest in Findex (Aust) Pty Ltd. Services are provided by Crowe Audit Australia, an affiliate of Findex (Aust) Pty Ltd.
© 2023 Findex (Aust) Pty Ltd
31
Energy Technologies Limited – 2023 Annual Report
Statement of Profit or Loss
for the year ended 30 June 2023
Revenue
Cost of Sales
Gross Margin
Other Income
Marketing expenses
Occupancy expenses
Administrative expenses
Finance costs
Depreciation and amortisation expenses
Impairment of property, plant and equipment
Impairment of intangible assets
Other expenses
Loss before income tax
Income tax benefits (expense)
Loss after income tax
Result 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)
Consolidated
Note
2023
$
2022
$
2(a)
3
2(b)
3
3
3,13
3,14
15,534,577
12,518,718
(15,766,002)
(11,447,119)
(231,425)
1,071,599
65,329
(7,717)
341,419
(22,120)
(103,579)
(138,294)
(5,107,685)
(4,990,605)
(2,093,679)
(1,069,489)
(2,482,436)
(2,795,337)
-
(5,194,327)
(231,005)
(315,900)
(600,000)
(153,047)
(15,386,524)
(8,671,774)
4
42,840
(54,421)
(15,343,684)
(8,726,195)
(1,312)
(5,561)
(15,344,996)
(8,731,756)
8
8
(5.2)
(5.2)
(3.6)
(3.6)
The accompanying notes form part of these financial statements.
32
Energy Technologies Limited – 2023 Annual Report
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2023
Consolidated
2023
$
2022
$
LOSS AFTER INCOME TAX
(15,343,684)
(8,726,195)
OTHER COMPREHENSIVE LOSS 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 FOR THE YEAR
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO:
Members of the parent entity
Non-controlling interest
(3,680)
(8,170)
(3,680)
(7,360)
(8,170)
(16,340)
(15,351,044)
(8,742,535)
(15,348,676)
(8,739,926)
(2,368)
(2,609)
(15,351,044)
(8,742,535)
The accompanying notes form part of these financial statements.
33
Energy Technologies Limited – 2023 Annual Report
Consolidated Statement of Financial Position
as at 30 June 2023
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Right of use assets
Deferred tax assets
Other non-current assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Borrowings
Short-term provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Lease liabilities
Long-term provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Share-based payment reserve
Accumulated losses
Parent interest
Non-controlling interest
TOTAL EQUITY
Consolidated
Note
2023
$
2022
$
9
10
11
16
13
14
15
19(a)
16
17
15
18
20
18
15
20
21
22
23
49,440
2,790,633
5,279,393
252,295
8,371,761
82,066
3,229,866
5,095,840
405,615
8,813,387
9,804,681
10,152,259
12,498
2,782,211
205,515
100,665
12,905,570
21,277,331
2,325,469
820,484
10,228,240
859,071
5,977,837
3,248,714
162,675
130,624
19,672,109
28,485,496
2,261,798
691,605
6,739,995
824,284
14,233,264
10,517,682
1,469,124
1,823,648
25,014
3,317,786
17,551,050
3,726,281
-
2,154,356
22,166
2,176,522
12,694,204
15,791,292
45,239,038
41,768,876
5,778,093
496,136
5,781,773
680,264
(47,163,402)
(31,818,405)
4,349,865
(623,584)
3,726,281
16,412,508
(621,216)
15,791,292
The accompanying notes form part of these financial statements.
34
Energy Technologies Limited – 2023 Annual Report
Consolidated Statement of Changes in Equity
for the year ended 30 June 2023
Issued
Capital
$
Reserves
$
Share-based
payment
Reserve
$
Accumulated
losses
$
Non-
Controlling
Interest
$
Total
$
31,483,891
5,789,943
365,932
(23,086,649)
(618,607)
13,934,510
-
-
-
-
(8,170)
(8,170)
10,484,380
-
(199,395)
10,284,985
-
-
-
-
-
-
-
-
114,937
199,395
314,332
(8,731,756)
5,561
(8,726,195)
-
(8,170)
(16,340)
(8,731,756)
(2,609)
(8,742,535)
-
-
-
-
-
-
-
-
10,484,380
114,937
-
10,599,317
Consolidated
Balance at 01 July 2021
Comprehensive income
Loss for the year
Other comprehensive loss for
the year
Total comprehensive loss for
the year
Transactions with owners, in
their capacity as owners, and
other transfers
Contributions of equity – net of
capital raising cost
Unlisted share options
Share-based payment – issue
costs
Total transactions with
owners, in their capacity as
owners, and other transfers
Balance at 30 June 2022
41,768,876
5,781,773
680,264
(31,818,405)
(621,216)
15,791,292
41,768,876
5,781,773
680,264
(31,818,405)
(621,216)
15,791,292
Balance at 01 July 2022
Comprehensive income
Loss for the year
Other comprehensive loss for
the year
Total comprehensive loss for
the year
Transactions with owners, in
their capacity as owners, and
other transfers
Contributions of equity – net of
capital raising cost
3,249,918
Unlisted share options
-
Unlisted share options -
expired
Total transactions with
owners, in their capacity as
owners, and other transfers
220,244
3,470,162
-
-
-
-
(3,680)
(3,680)
-
-
-
-
36,116
(220,244)
(184,128)
(15,344,996)
1,312
(15,343,684)
-
(3,680)
(7,360)
(15,344,996)
(2,368)
(15,351,044)
-
-
-
-
-
-
-
-
3,249,918
36,116
-
3,286,034
-
-
-
-
Balance at 30 June 2023
45,239,038
5,778,093
496,136
(47,163,402)
(623,584)
3,726,281
The accompanying notes form part of these financial statements.
35
Energy Technologies Limited – 2023 Annual Report
Consolidated Statement of Cash Flows
for the year ended 30 June 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Receipts from government subsidies - R&D grant
Receipts from government subsidies – others
Interest received
Payments to suppliers and employees
Finance costs
Consolidated
Note
2023
$
2022
$
16,590,433
14,412,018
1,122,055
1,800,800
20,891
1,151
-
2,216
(22,783,018)
(21,067,507)
(1,947,953)
(785,615)
Net cash outflow from operating activities
28(a)
(6,996,441)
(5,638,088)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Purchases of property, plant and equipment
Purchases of intangible development assets
-
21,364
(1,093,615)
(1,286,704)
-
(2,107,278)
Proceeds from government grant - Silicon Project
13
432,337
384,443
Net cash outflow from investing activities
(661,278)
(2,988,175)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Less outflows of raising capital
Proceeds from convertible notes
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Repayment of loan from director
Loan from director
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
15
30
30
3,400,000
11,000,000
(150,081)
(515,620)
4,600,000
-
8,354,183
3,093,651
(7,268,080)
(3,898,785)
(795,449)
(1,019,014)
(515,480)
(575,000)
-
500,000
7,625,093
8,585,232
(32,626)
82,066
-
(41,031)
123,097
-
Cash at end of financial year
9
49,440
82,066
The accompanying notes form part of these financial statements.
36
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 1 Summary of Significant Accounting Policies
The financial statements are presented in Australian dollars unless otherwise stated.
The financial statements were authorised for issue on 28 September 2023 by the directors of Energy Technologies
Limited.
Energy Technologies Limited is a listed public company, incorporated and domiciled in Australia.
(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 as appropriate for for-profit
orientated entities. The Group is a for-profit entity for financial reporting purposes under Australian Accounting
Standards.
(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) Material Uncertainty Relating to a Going Concern
The Group made a consolidated loss after tax attributable to members of $15,344,996 (2022: loss of $8,731,756).
During the period, the group incurred negative cash flows from operations of $6,996,441 for the year ended 30
June 2023 (2022: negative cash flows of $5,638,088). This loss includes a $5,194,327 impairment of intangible
assets (2022: impairment write down of $600,000) and an inventory write down of $798,286 (2022: inventory write
down of $484,338). At 30 June 2023, the group had consolidated net assets of $3,726,281 (June 2022:
$15,791,292) which includes a deferred tax asset of $205,515 (2022: $162,675) and $12,498 of intangible assets
(2022: $5,977,837).
At 30 June 2023, the group’s current liabilities exceed its current assets by $5,861,503 (2022: $1,704,295).
Included in current liabilities are employee entitlements of $859,071 which are not expected to be settled in cash in
full within the next twelve months. In addition, included in current liabilities are convertible notes of $4,600,000, the
terms of which is that these mature twelve months from the issue date or such later date as is agreed in writing
between the parties. Furthermore, current liabilities include an amount of $190,000 owing to a director, the terms
of which is that the amount matures on 11 April 2024 or such later date as is agreed in writing between the parties.
The Directors believe this result, along with the funding raised post the reporting date (refer to note 29 on
subsequent events), as well as its track record of raising capital is not a cause of concern considering the results
for the year ended 30 June 2023 were:
in part affected by the impact of Covid-19 as the Group has begun to exit the issues that impacted it for the
past two years;
impacted by continuing transitional issues in the relocation, expansion and then fully commissioning of the
new manufacturing facility in Rosedale, Victoria;
impacted by delays in the construction of the new silicone line shed, which is expected to be completed
during the 2024 financial year;
impacted by the factory not operating at full capacity, albeit that it is now close to being fully operational; and
cash constraints which impacted the supply of raw material.
The Directors’ are of the view that once capacity levels are reached at Rosedale, positive cash flows from
operations will occur.
37
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 1 Summary of Significant Accounting Policies (continued)
(c) Material Uncertainty Relating to a Going Concern (continued)
The Director’s also note the following:
Revenue for the 2023 financial year grew by 24% over the previous financial year;
The current sales order book at year end is materially higher than the prior year;
The Group has completed a review of the operational structure of the business and has identified and is
$3,400,000 of capital was raised via a placement of new shares on 8 March 2023 (refer note 21);
implementing significant operating cost savings;
The directors continue to manage the working capital and capital expenditure requirements in the best
interests of shareholders. This includes the preparation, and review of cash flow forecasts and other longer
term projections which in the view of the Directors align with the strategy of the Group to achieve growth
predominantly through the Rosedale facility operating at higher production capacity levels. The levels of
achieved growth in sales have been factored into the cash flow projections prepared, including the
determination of annual growth rates and terminal growth rates. Assumptions used in the cash flow
statements are supported by data sourced from finance, purchasing, manufacturing and production teams.
Management have also stress tested the financial information provided.
As part of their assessment of impairment to assets, management have reviewed the carrying values of all
underlying assets and have allocated the impairment write down to intellectual property assets and
development assets, on the basis that all other assets are stated at either fair value or at their recoverable
amounts. The most material asset being plant and equipment will be revalued in 2024, and is currently
recorded at $9,259,446, which is $1,307,297 less that it was valued at in 2019. Despite increases in interest
rates, the Directors’ are of the opinion that the value of these assets are not impaired and are expected to
be supported by independent external valuation scheduled to be performed in 2024.
Notwithstanding the loss for the year and the consolidated entity’s deficiency in net current assets, the financial
report has been prepared on the going concern basis. The Directors’ reach this conclusion on the following basis:
Matters already occurred post the reporting date:
Further capital in the amount of $ 2,606,500 has been raised by way of the issue of convertible notes. Funds
from these notes were received in five tranches on 14 August 2023, 28 August 2023, 8 September 2023 and 21
September 2023 (two tranches). These amounts bear interest at 10% per annum and mature two years from
date of issue (refer note 29);
As stated in note 18, $4.6m of convertible notes mature 12 months from date of issue or such later date as is
agreed in writing between the parties. Of these, $1.0m of these convertible notes have been extended to 27
November 2023. These convertible notes bear interest at 10% per annum and interest is payable on maturity
(refer note 29); and
On 5 October 2022 the directors agreed to extend the maturity date of a loan from CEO Alfred Chown to April
2024 (at the date of this report Alfred Chown has been appointed as an interim director). The remaining
principal amount of the loan remains at $190,000 at the date of signing this report.
Matters expected to occur in the view of the Directors:
The Group has maintained ongoing support from its financiers and shareholders throughout 2023 and in the
period subsequent to the date of this report;
The potential to renegotiate and or extend debt facilities, including the remaining $3.6m convertible notes
expiring October 2023;
The potential to draw down on the remaining debt facilities of $2,264,021 (refer note 18);
The potential to raise additional capital, including the issue of further additional convertible notes (as and when
required); and
The Rosedale factory operational output will increase to an estimated 11 million metres, or in excess of an
average of 60 tonnes output per month, during FY2024.
38
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 1 Summary of Significant Accounting Policies (continued)
(c) Material Uncertainty Relating to a Going Concern (continued)
Management have prepared a cash flow projection for the period to 30 September 2024 that supports the ability of
the Group to continue as a going concern, which includes assumptions pertinent to the above matters.
Accordingly, these financial statements have been prepared on the basis of a going concern as the Directors
believe the Group will be able to pay its debts as and when the fall due.
Notwithstanding the above if the continued financial performance is not sustained and one or more of the planned
measures do not eventuate or are not able to be resolved in the Group’s favour, then in the opinion of the
Directors, there will be a significant uncertainty regarding the ability of the Group to continue as a going concern
and pay its debts and obligations as and when they become due and payable.
If the Group is unable to continue as a going concern, it may be required to realise its assets and extinguish its
liabilities other than in the normal course of business at amounts different from those stated in the financial report.
These financial statements do not include any adjustments relating to the recoverability and classification of
recorded assets or to the amounts and classifications of liabilities that might be necessary should the Group not
continue as a going concern.
(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 performance 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 transactions 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 and 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 limited 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.
39
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 1 Summary of Significant Accounting Policies (continued)
(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 rates 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.
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:
Dulhunty Engineering Limited (formerly 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 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 an asset
revaluation reserve. 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 a diminishing value basis over the estimated useful life of the asset as follows:
Leasehold Improvements
Plant and equipment
Impairment
2.5% to 25%
5% 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.
40
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 1 Summary of Significant Accounting Policies (continued)
(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, Licenses and Intellectual Property 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, Intellectual Property is 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 profit or loss 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.
This note is to be read in conjunction with Note 1(x), Critical Accounting Estimates and Judgements, which
provides relevant information in relation to accounting for the provision for impairment.
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.
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.
Amortisation is calculated using a straight-line method to allocate the costs over an estimated useful life of 10
years during which the related benefits are expected to be realised.
(i)
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 weighted 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. Standard cost approximates actual
cost.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion.
(j)
Impairment of non-financial 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.
41
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 1 Summary of Significant Accounting Policies (continued)
(j)
Impairment of non-financial assets (continued)
During the financial year under review, application of this accounting policy resulted in an increase in the
provision for impairment against intangible assets of $5,194,327 (2022: $600,000). At balance date the carrying
value of intangible assets, after impairment adjustments, is $12,498.
(k) Government Grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all
attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income
on a systematic basis over the periods that the related costs, for which it is intended to compensate, are
expensed.
When the grant relates to an asset, it is recognised against the asset released to profit or loss over the expected
useful life of the related asset as a reduced depreciation charge.
(l) 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 and in banks.
(m) Investments in Associates
At the date of this report there are no investments in associates.
(n) Financial Instruments
Recognition and de-recognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire,
or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expires.
Trade and other receivables
The Group makes use of a simplified approach in accounting for trade and other receivables and records the loss
allowance at the amount equal to the expected lifetime credit losses. In using this practical expedient, the Group
uses its historical experience, external indicators and forward-looking information to calculate the expected credit
losses using a provision matrix.
Impairment of financial assets
AASB 9’s impairment requirements use more forward-looking information to recognise expected credit losses –
the ‘expected credit loss (ECL) model’. Instruments within the scope of this standard’s requirement include loans
and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets
recognised and measured under AASB 15 and loan commitments and some financial guarantee contracts (for
the issuer) that are not measured at fair value through profit or loss.
The Group considers a broader range of information when assessing credit risk and measuring expected credit
losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected
collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
financial instruments that have not deteriorated significantly in credit quality since initial recognition or that
have low credit risk (‘Stage 1’); and
financial instruments that have deteriorated significantly in credit quality since initial recognition and whose
credit risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are
recognised for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over
the expected life of the financial instrument.
42
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 1 Summary of Significant Accounting Policies (continued)
(n) Financial Instruments (continued)
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings and trade & other payables.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs
unless the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for
derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains
or losses recognised in profit or loss (other than derivative financial instruments that are designated and
effective as hedging instruments).
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or
loss are included within finance costs or finance income.
Trade payables are measured at amortised cost using the effective interest rate method.
(o) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are
capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or
sale. Other borrowing costs are expensed in the period in which they are incurred and reported in finance costs.
(p) 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 recognised as a finance
cost.
(q) Leases
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at
cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments
made at or before the commencement date net of any lease incentives received, any initial direct costs incurred,
and, except where included in the cost of inventories, an estimate of costs expected to be incurred for
dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain
ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life.
Right-of use assets are subject to impairment or adjusted for any re-measurement of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for
short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these
assets are expensed to profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at
the present value of the lease payments to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the consolidated entity’s incremental borrowing
rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments
that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price
of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated
termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the
period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a
rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease
liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
43
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 1 Summary of Significant Accounting Policies (continued)
(r) Revenue recognition
Revenue is recognised using the 5-step process:
1 Identifying the contract with a customer;
2 Identifying the performance obligations;
3 Determining the transaction price;
4 Allocating the transaction price to the performance obligations; and
5 Recognising revenue when/as performance obligation(s) are satisfied.
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected
to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer,
the consolidated entity: identifies the contract with a customer; identifies the performance obligations in the
contract; determines the transaction price which takes into account estimates of variable consideration and the
time value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when
or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods
or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as
discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent
events. Such estimates are determined using either the 'expected value' or 'most likely amount' method. The
measurement of variable consideration is subject to a constraining principle whereby revenue will only be
recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue
recognised will not occur. The measurement constraint continues until the uncertainty associated with the
variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle
are initially recognised as deferred revenue in the form of a separate refund liability.
Sale of goods
Sale of goods revenue is recognised at the point of sale, which is where the customer has taken delivery of the
goods, the risks and rewards are transferred to the customer and there is a valid sales contract. Amounts
disclosed as revenue are net of sales returns and trade discounts.
Other income
Other income is recognised when it is received or when the right to receive payment is established.
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.
(s) Income tax
The income tax benefit/(expense) for the year comprises deferred tax benefit/(expense). Deferred income tax is
provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities
and their carrying 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 of 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 have been enacted or
substantively enacted at the balance sheet date.
44
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 1 Summary of Significant Accounting Policies (continued)
(t) 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.
(u) Contributed equity and other contributed equity
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.
Other contributed equity
Capital contribution received in advance of share allotment is recognised at the fair value of the consideration
received by the Company as other contributed equity.
Any transaction costs arising on the related equity issuance are recognised directly in equity as a reduction of
the share proceeds received.
Earnings per share and headline earnings per share
Earnings per share is based on earnings attributable to ordinary shareholders divided by the weighted average
number of ordinary shares in issue during the year.
(v) Employee benefits
Provision is made for the Group’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.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, which are provided to employees in
exchange for the rendering of services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is determined using
either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of
the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-
vesting conditions that do not determine whether the consolidated entity receives the services that entitle the
employees to receive payment.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over
the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the
award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting
period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each
reporting date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all
other conditions are satisfied.
45
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 1 Summary of Significant Accounting Policies (continued)
(v) Employee benefits (continued)
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases
the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or
employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over
the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award,
the cancelled and new award is treated as if they were a modification.
(w) Fair Value measurement
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 considering 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.
(x) Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements 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 group assesses impairment at the end of each reporting period by evaluating conditions and events
specific to the group that may be indicative of impairment triggers. This includes an assessment of both
internal and external factors applicable to the carrying values of the assets in question, including
consideration of future revenue streams. Recoverable amounts of relevant assets are reassessed using
value-in-use calculations which incorporate various key assumptions. Where indicators of impairment
exists or there are insufficient cash flows to support the carrying values of the assets, management have
fully impaired the carrying value of each asset class in question by way of increasing the provision for
impairment.
(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.
(iv) Capitalised development costs
Distinguishing the research and development phases of a new customised product and determining
whether the recognition requirements for the capitalisation of development costs are met requires
judgement. After capitalisation, management monitors whether the recognition requirements continue to be
met and whether there are any indicators that capitalised costs may be impaired.
46
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 1 Summary of Significant Accounting Policies (continued)
(x) Critical Accounting Estimates and Judgements (continued)
(v)
Impairment of Inventory
In assessing the impairment of inventory, management has identified inventory that did not show any
movement for 12 months based on sales and evaluated the extent to which this inventory will not be sold.
While this evaluation was done by management who are experienced and knowledgeable, there is still a
significant amount of estimation and judgement involved in arriving at the amount to be provided. Details of
the number of years’ worth of future sales are on hand in inventory, by line item, at each period end and a
progressive provision formula is used as a basis for management’s assessment of the impairment required.
(vi) Deferred Tax Asset
A deferred tax asset is recognised on unused tax losses adjusted for the current year to the extent that it is
probable that future taxable profit will be available against which the unused tax losses can be utilised. The
group used the following criteria in assessing the probability that the taxable profit will be available against
which the unused tax losses can be utilised:
Whether the entity has sufficient taxable temporary timing differences relating to the same taxation
authority (SARS) which will result in taxable amounts against which the unused tax losses can be used;
Whether it will be probable that the entity will have taxable profits before the unused tax losses will
expire based on the budgets for the following financial year; and
Whether the unused tax losses result from identifiable causes which are unlikely to recur. Future
taxable profits are estimated based on the budgets prepared by management and approved by the
board. To the extent that it is not probable that taxable profits will be available against which the
unused tax losses can be utilised, the deferred tax asset is not recognised. To determine the probability
that the taxable profit will be available against which the unused tax losses can be utilised, the group
has reviewed its forecasts for the foreseeable future and compared that to its total tax losses.
(vii) Right-of-use lease liability and right-of-use assets
The group has applied judgement to determine the lease term for some of the lease contracts, in which it is
a lessee, that include renewal options. The assessment of whether the group is reasonably certain to
exercise such options impacts the lease term, which affects the amount of lease liabilities and right-of-use
assets recognised. In determining the lease term, management considers all facts and circumstances that
create an economic incentive to exercise an extension option, or to not exercise a termination option. The
economic incentives considered include factors such as the anticipated benefits from the location of the
property, levels of construction development and competition in the area, ability to attract foot traffic, and
the availability of suitable alternative properties. Extension options (or periods after termination options)
are included in the lease term if the lease is reasonably certain not to be terminated. The assessment is
reviewed if a significant event or a significant change in circumstances occurs which affects this
assessment and is within the control of the lessee. The majority of extension and termination options held
are exercisable by the group on conjunction with the respective lessor, based on the fair market rental at
that time.
Key Judgements
i)
ii)
Going Concern: Refer to details in Note 1(c)
Provision for Impairment – Intangible Assets
Judgement has been exercised in considering whether a provision or an adjustment to an existing
provision for impairment to an intangible asset is required. Refer to details in Note 1(x), Key Estimates (i).
iii)
Employee benefits provision
The liability for employee benefits expected to be settled more than 12 months from the reporting date are
recognised and measured at the present value of the estimated future cash flows to be made in respect of
all employees at the reporting date. In determining the present value of the liability, estimates of attrition
rates and pay increases through promotion and inflation have been taken into account.
(y) New and Revised Accounting Standards
Refer to Note 32.
47
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 2
Revenue and Other Income
(a) Revenue
Sale of goods transferred at a point in time
Sale of goods transferred over time
(b) Other Income
R&D grant
Finance revenue
Other income
Total Other Income
Consolidated
2023
$
2022
$
15,534,577
12,518,718
-
-
15,534,577
12,518,718
-
1,151
64,178
65,329
205,390
2,216
133,813
341,419
15,599,906
12,860,137
(c) Revenue by Geographic Segment is disclosed in Note 27
Note 3
Loss before Income Tax
Included in the determination of Loss before income tax are the following expenses:
Expenses
Cost of Sales
Cost of Goods Sold
Less: Capitalised to intangible assets via R&D activities
Factory direct expenses less recovery
Freight
Inventory write down and manufacturing variances
10,411,741
9,682,018
-
(1,822,958)
10,411,741
7,859,060
2,998,519
2,152,746
760,626
1,595,116
640,028
795,285
15,766,002
11,447,119
Gross Profit % - pre inventory write down & capitalisation adjustments
8.8%
0.4%
Finance Costs
Finance costs on lease liabilities
Interest expense
Borrowing costs
145,726
1,108,009
839,944
169,552
220,308
679,629
2,093,679
1,069,489
48
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 3
Loss before Income Tax (continued)
Depreciation and Amortisation
Depreciation of property, plant and equipment
Amortisation of intangible assets
Depreciation of right of use assets
Impairment Expenses
Impairment of property, plant and equipment
Impairment of intangible Assets
Employment Related Expenses
Employee benefits expense
Defined superannuation contributions expense
Share based payments
Other
Research and development expenditure
Short term lease payment
Net loss on disposal of property, plant and equipment
Foreign exchange (gain)/loss
Note 4
Income Tax Expense
(a) The components of Income tax (benefits) expense comprise:
Current tax
Deferred tax
Consolidated
2023
$
2022
$
1,006,590
1,152,862
771,012
704,834
859,049
783,426
2,482,436
2,795,337
-
5,194,327
315,900
600,000
3,131,847
2,755,754
285,090
36,116
273,499
67,985
-
14,455
2,266
472,160
17,316
9,435
(13,799)
(13,005)
-
(42,840)
(42,840)
-
54,421
54,421
(b) Reconciliation of the prima facie tax on loss to income tax expense:
Prima facie tax on loss before income tax at 25% (2022: 25%)
(3,846,631)
(2,167,943)
Tax effect of:
- Other non-allowable items
- R&D expenses non-allowable
- Other assessable items
1,256,621
-
-
137,620
118,040
4,105
- Current year tax losses not brought to account.
2,590,010
1,959,525
- Deferred income tax
- R&D grant non assessable
Income tax (benefits) expense
(42,840)
-
(42,840)
54,421
(51,347)
54,421
49
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
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 2023 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
Share based payment *
Post-employment benefits
Short-term employee benefits
Consolidated
2023
$
2022
$
939,803
910,173
36,116
76,873
67,985
71,071
1,052,792
1,049,229
These amounts include fees and benefits paid to the non-executive Chair and non-executive directors as well as all
salary, paid leave benefits, fringe benefits and cash bonuses awarded to 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
The consolidated entity has a share option plan to incentivise certain employees and key management personnel.
The share option plan is subject to participants meeting service condition (continuous employment with the
consolidated entity) at the vesting date. The options are issued for nil consideration. There are no performance
conditions.
During the financial year NIL ordinary shares were issued in lieu of director’s fees (2022: NIL ordinary shares). The
share-based payment expense for these for the year was $NIL (2022: $NIL).
During the financial year NIL unlisted options were granted (2022: NIL). The share-based payment expense for
unlisted options for the year was $36,116 (2022: $67,985).
Refer note 23.
The comparative information has been amended to be consistent with the information disclosed within the
Remuneration Report (audited) on page 18.
*
50
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 6
Auditors' Remuneration
Remuneration of the auditor of the parent entity:
(a) Crowe Audit Australia
Audit Services
Audit of financial report
Non-audit Services
Taxation services
Total remuneration of Crowe Audit Australia
(b) Grant Thornton Audit Pty Ltd
Audit Services
Audit and review of financial reports
Adjustment to prior year audit of financial report
Non-audit Services
Taxation services
Total remuneration of Grant Thornton Audit Pty Ltd
Total Remuneration of the auditor of parent entity
Remuneration of other auditors for:
Audit and review of financial reports
Tax compliance services
Note 7 Dividends
Consolidated
2023
$
2022
$
167,168
-
167,168
56,650
76,953
-
133,603
300,771
-
2,500
2,500
-
-
-
189,102
59,028
-
248,130
248,130
-
875
875
No dividends have been paid or proposed by the parent entity for the year ended 30 June 2023 (2022: Nil).
Note 8 Earnings per Share
(a) Reconciliation of earnings to profit or loss:
Loss
Profit attributable to non-controlling interest
Earnings used to calculate basic and diluted EPS
(15,343,684)
(8,726,195)
(1,312)
(5,561)
(15,344,996)
(8,731,756)
51
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 8
Earnings per Share (continued)
Note
2023
2022
(b) Weighted average number of ordinary shares outstanding during
the year used in calculating basic EPS
Number
Number
292,875,846
243,508,091
Weighted average number of dilutive options outstanding
(c)
-
-
Weighted average number of ordinary shares outstanding
during the year used in calculating dilutive EPS
292,875,846
243,508,091
(c) During the 2021 financial year 3,422,429 unlisted share options were issued to directors under an approved
share option plan. As at 30 June 2023 these options were recognised at $36,116. Options have been
excluded in the weighted average of shares used to calculate diluted earnings per share as they were anti-
dilutive.
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
Note 10
Trade and Other Receivables
CURRENT
Trade receivables
Less: Provision for expected credit loss
R & D grant receivable
Other receivables
Consolidated
2023
$
2022
$
49,440
49,440
82,066
82,066
49,440
49,440
82,066
82,066
(a), (b)
2,646,225
1,920,160
-
-
2,646,225
1,920,160
-
1,122,055
144,408
187,651
2,790,633
3,229,866
(a)
Trade debtors are based on normal terms of trade, typically 30 days from end of month. Retention of
title terms exist on sales. Based on historical experience, external indicators and forward-looking
information, no expected credit loss is considered necessary.
There were no trade debtors that were past due at 30 June 2023 and at 30 June 2022.
(b)
Trade receivables are pledged as security in favour of Cash Flow Finance Pty Ltd trading as EarlyPay
for the Secured Debtor Finance Facility (refer Note 18).
52
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 11
Inventories
At cost
Raw materials and stores
Work in progress
Finished goods
Allowance for obsolete and slow-moving inventory
Consolidated
2023
$
2022
$
1,095,117
1,261,203
261,043
615,717
4,148,233
3,443,920
5,504,393
5,320,840
(225,000)
(225,000)
5,279,393
5,095,840
In FY2023, $798,286 (2022: $484,338) of inventory write down following an inventory restructure and detailed
review of slow-moving stock.
Inventories are pledged as security in favour of Cash Flow Finance Pty Ltd trading as EarlyPay for the Secured
Trade Finance Facility (refer Note 18).
Country of
Incorporation
Percentage Owned (%)*
2023
2022
100
100
51
100
100
51
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
* Percentage of voting power is in proportion to ownership
** Cogenic Pty Limited and Dulhunty Engineering Limited are dormant entities
53
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 13 Property, Plant and Equipment
Leasehold Improvements
Leasehold Improvements at independent valuation
Less: Accumulated depreciation
Net carrying value
Plant and Equipment
Plant and equipment at cost or independent valuation
Less: Accumulated Impairment Losses
Less: Accumulated depreciation
Capital Work in Progress
Total Property, Plant and Equipment
Consolidated
2023
$
2022
$
624,936
(152,771)
472,165
624,936
(110,779)
514,157
13,325,654
13,153,375
(614,536)
(614,536)
(3,923,837)
(2,961,499)
8,787,281
9,577,340
545,235
60,762
9,804,681
10,152,259
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:
Capital Work
In Progress
Leasehold
Improvements
Plant and
Equipment
$
$
$
Total
$
Consolidated:
Carrying amount at the beginning of the year
Additions
Depreciation expense
Loss on disposal
60,762
916,810
-
-
Government grant received
(432,337)
514,157
9,577,340
10,152,259
-
176,805
1,093,615
(41,992)
(964,598)
(1,006,590)
-
-
(2,266)
(2,266)
-
(432,337)
Carrying amount at the end of the year
545,235
472,165
8,787,281
9,804,681
Fair value measurement of the Group’s plant and equipment and leasehold improvements
The Group’s plant and equipment and leasehold improvements are stated at their revalued amounts, being the fair
value (as determined by an independent valuer) at the date of revaluation, less any subsequent accumulated
depreciation and subsequent accumulated impairment losses. The last external independent valuation was
conducted at 30 June 2019 and management has determined that the fair value of the plant and equipment and
leasehold improvements as at 30 June 2023 does not differ materially from its carrying value. The Group carries
out independent valuations every five years at minimum or when there are indicators that fair value has materially
moved since the previous assessment.
AASB 13 Fair Value Measurement 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; and
Cost approach: techniques that reflect the current replacement cost of an asset at its current service capacity.
54
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 13 Property, Plant and Equipment (continued)
AASB 13 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.
The valuation of the assets was largely based on Level 3 inputs. The fair value of the plant and equipment and
leasehold improvement was predominantly determined based on the market approach whereby the valuers
researched industry relevant marketplaces for market evidence of recent sales and offerings, sourced market
opinions from industry experts as well as utilised their own database resources and industry experience. In some
instances they adopted the cost approach or a combination of the cost and market approaches where there has
been minimal or no reliable market evidence to compare with the subject assets. The valuers also considered the
physical deterioration, functional obsolescence and economic obsolescence of the assets.
The fair value of group Plant and Equipment and Leasehold Improvements under FV was $10,566,743 at 30 June
2019. The Board adopted this value, which resulted in an increase in net plant and equipment value of $6,838,699
in the group at 30 June 2019. The revaluation amount was recognised in the Asset Revaluation Reserve. A
deferred tax liability of $769,336 at 30 June 2023 (2022: $867,516) 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 19(d).
EGY has no plans to dispose of its plant and equipment.
Energy Technologies Limited management has determined that the fair value of the plant and equipment and
leasehold improvements, as at 30 June 2023, does not differ materially from its carrying value. Accordingly, no
provision for impairment is required against property, plant and equipment.
Recurring fair value measurements:
Plant and equipment
Leasehold improvements
Total non-financial assets recognised at fair value
2023
$
8,787,281
472,165
9,259,446
2022
$
9,577,340
514,157
10,091,497
The highest and best use of the assets is the fair market value in continued use, using the market approach
technique. The carrying amount of the above assets that would have been recognised had the assets been carried
under the cost model is $6,866,312.
On 15 January 2021 EGY announced that its subsidiary, Bambach Wires and Cables Pty Ltd (Bambach), has
been awarded a Sovereign Industrial Capability Priority Grant to improve Australian manufacturing capability to
support the Continuous Shipbuilding Program which includes rolling submarine acquisition; land combat,
protected vehicles and technology upgrade. This will enable Bambach to enhance its existing manufacturing
capability to manufacture of small, medium, and large diameter low voltage silicone copper cables essential for
use in submarine and shipbuilding. The project cost was estimated at $1.74m of which the Federal Government
will contribute up to $1.34m.
As at 30 June 2023 a total of $1,848,823 (FY2022: $1,111,472) has been spent to date on the silicone cable
project which has been recognised in capital work in progress.
Government grants of $432,337 have been received during the financial year, bringing the total amount received
to $1,303,588 (FY2022: $871,251) for the silicone cable project.
The grant received has been recognised against capital work in progress.
Plant and equipment and motor vehicles has been secured by way of a loan facility in favour of Grow Finance Pty Ltd.
55
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 14
Intangible Assets
Computer software at cost
Accumulated amortisation
Net carrying value
Intellectual Property at cost
Accumulated amortisation
Provision for accumulated impairment
Net carrying value
Development Assets at cost
Accumulated amortisation
Provision for accumulated impairment
Net carrying value
Total intangible assets
Movements in Carrying Amounts
Consolidated
2023
$
2022
$
53,651
(41,153)
12,498
500,000
(100,000)
(400,000)
53,651
(34,655)
18,996
500,000
(50,000)
-
-
450,000
7,854,485
7,854,485
(2,460,158)
(1,745,644)
(5,394,327)
(600,000)
-
5,508,841
12,498
5,977,837
Movements in carrying amounts for each group of Intangible Assets between the beginning and the end of the
current financial year:
Software
$
Development
Assets
$
Intellectual
Property
$
Total
$
Consolidated:
Carrying amount at the beginning of the year
18,996
5,508,841
450,000
5,977,837
Provision for impairment
Amortisation expense
-
(4,794,327)
(400,000)
(5,194,327)
(6,498)
(714,514)
(50,000)
(771,012)
Carrying amount at the end of the year
12,498
-
-
12,498
Application of accounting policies contained in Note 1(h), Intangible Assets, Note 1(j), Impairment of Non-
Financial Assets and Note 1(x), Critical Accounting Estimates and Judgements, has resulted in an adjustment to
the provision for impairment of $5,194,327 during the financial year under review.
To this end, management have prepared a discounted cash flow model. The model has supported the decision
of the Board to impair assets during the financial year under review.
Management have reviewed the carrying value of all underlying assets and have allocated the impairment write
down to intellectual property assets and development assets, on the basis that all other assets are stated at
either fair value or at their recoverable amounts.
The most material asset being plant and equipment (note 13) will be revalued in 2024. Despite increases in
interest rates, the Directors’ are of the opinion, based on readily available current market data, that the value of
these assets are expected to increase when the independent external valuation is performed in 2024.
56
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 15 Right of Use Assets and Lease Liabilities
Right of Use Assets
Office and factory premises
Less: Accumulated depreciation
Plant and equipment
Less: Accumulated depreciation
Total Right of Use Assets
Consolidated
2023
$
2022
$
4,058,852
(1,961,582)
2,097,270
4,351,296
(1,839,166)
2,512,130
964,062
(279,121)
684,941
2,782,211
964,062
(227,478)
736,584
3,248,714
The group has leased office and factory premises under agreements with various expiry dates, some with options
to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current financial year are set out
below:
Carrying amount at the beginning of the financial year
Additions
Depreciation expense
Carrying amount at the end of the financial year
Office
premises,
factory and
warehouse
Plant and
equipment
Total
$
$
$
2,512,130
238,331
(653,191)
2,097,270
736,584
3,248,714
-
(51,643)
684,941
238,331
(704,834)
2,782,211
Lease Liabilities
Lease liabilities include the net present value of the following lease payments:
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
the commencement date;
amounts expected to be payable by the Group under residual value guarantees; and
the exercise price of a purchase option if the group is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement
of the liability. The lease payments are discounted using the interest rate implicit in the lease.
If that rate cannot be readily determined, the entity’s incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the
right-of-use asset in a similar economic environment with similar terms, security and conditions.
57
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 15 Right of Use Assets and Lease Liabilities (continued)
To determine the incremental borrowing rate, the Group uses recent arm's length borrowing rate received as a
starting point, adjusted to reflect changes in financing conditions since borrowing was received, making
adjustments specific to the lease (e.g. term, country, currency and security).
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss
over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the
liability for each period.
Leasing activities
The group has entered into a number of lease agreements in respect of fixed property used for warehousing,
offices and branch trading facilities. These leases generally have an initial three to ten-year lease term with
options to renew at market-related rentals. Annual escalations from 6% to 10% are common to all leases.
Lease liabilities are presented in the statement of financial position as follows:
CURRENT
Office and factory premises
Hire purchase agreements*
NON-CURRENT
Office and factory premises
Hire purchase agreements*
Total lease liabilities
Total payments in relation to the above on an undiscounted basis:
1 year or less
Between 1 and 5 years
Consolidated
2023
$
2022
$
699,422
121,062
820,484
615,961
75,644
691,605
1,715,722
2,135,148
107,926
19,208
1,823,648
2,154,356
2,644,132
2,845,961
941,933
838,924
2,110,212
2,499,852
3,052,145
3,338,776
* Lease liabilities on Hire purchase agreements are secured by the underlying financed assets, being motor
vehicles and plant and machinery.
58
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note
Consolidated
2023
$
2022
$
Note 15
Right of Use Assets and Lease Liabilities (continued)
Additional profit or loss and cash flow information on lease liabilities
Amounts recognised in the statement of profit or loss and other
comprehensive income:
Amortisation
Interest expense
Amounts recognised in the statement of cash flows:
Net Repayment of lease liabilities
Interest expense
Total cash outflow in respect of leases in the year
Note 16 Other Assets
CURRENT
Prepayments -general
Prepayments – silicone cable project
NON-CURRENT
Other receivables
Deposits
704,834
145,726
783,426
169,552
649,723
145,726
849,462
169,552
795,449
1,019,014
252,295
-
252,295
-
100,665
100,665
226,156
179,459
405,615
-
130,624
130,624
State grants received in relation to the silicone cable project are recognised as a credit against capital work in
progress – refer note 13.
Note 17 Trade and Other Payables
CURRENT
Unsecured liabilities:
Trade payables
BAS payable
Other payables and accrued expenses
(a)
1,088,126
1,063,450
412,163
825,180
344,440
853,908
2,325,469
2,261,798
(a) Trade payables are based on normal terms of trade, typically 60 days from end of month.
59
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 18 Borrowings
CURRENT
Secured borrowings:
Debtor finance facility
Trade finance facility
Convertible notes
Director loan
Equipment Finance Loan
Unsecured borrowings:
Director and executive loans
Other loans
Total Current Borrowings
NON-CURRENT
Secured borrowings:
Equipment Finance Loan
Total Non-Current Borrowings
Total Borrowings
Total current and non-current secured borrowings:
Debtor finance facility
Trade finance facility
Equipment Finance Loan
Director loan
Convertible notes
Note
Consolidated
2023
$
2022
$
(b)
(c)
(d)
(e),30
(f)
(g),30
(a)
1,625,566
766,176
3,510,413
4,750,874
4,600,000
-
190,000
302,261
204,452
-
10,228,240
5,721,502
-
-
-
10.228,240
515,480
503,013
1,018,493
6,739,995
(f)
1,469,124
1,469,124
-
-
11,697,364
6,739,995
1,625,566
766,176
3,510,413
4,750,874
1,771,385
190,000
4,600,000
11,697,364
-
204,452
-
5,721,502
(a) Unsecured loan from shareholder for $500,000 was repaid during the period. The repayment included
accrued interest of $17,945, of which $3,013 was accrued at 30 June 2022.
(b) Secured Debtor Finance facility with Cash Flow Finance Pty Ltd trading as EarlyPay. This facility is drawn
down to amount $1,625,566 as at 30 June 2023. Interest is charged on the facility at rate of 12.60% which is
1.85% above the base rate which is currently 10.75%. No maturity date.
60
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 18 Borrowings (continued)
(c) Secured Trade Finance facility with Cash Flow Finance Pty Ltd trading as EarlyPay. This facility is drawn down
to amount $3,510,413 as at 30 June 2023. Term charges 5.76% per 120 days. No maturity date.
(d) Convertible Notes issued of $4,600,000 to noteholders. These notes have a face value of $1.00, attract a
coupon rate of 10% and are convertible at $0.08 subject to shareholder approval. These notes mature twelve
months from the issue date or such later date as is agreed in writing between the parties. Refer also to note 29.
The embedded derivative associated with the convertible notes is not material, and therefore no separate
embedded derivative financial instrument has been presented.
(e) Secured loan from director of subsidiary Bambach Wires and Cables Pty Limited for $190,000. An amount of
$10,000 was repaid during the period. Interest rate 10.00% per annum. Maturity Date is 11 April 2024.
(f) Secured equipment finance loan. Interest rate 13.29% per annum and lender Grow Finance Pty Ltd. Loan
matures August 2027.
(g) Unsecured loan from director for $500,000 was repaid during the period. The repayment included accrued
interest of $31,506, of which $15,480 was accrued at 30 June 2022.
(h) Summary of finance facilities in place at 30 June 2023:
Financing facilities:
Debtor finance and trade finance facility
Hire purchase agreements
Equipment Finance Loan
Convertible notes
Director loan
Total financing facilities
Unused financing facilities available at year end
Note 19
Tax
(a) Deferred Tax Assets
Deferred tax assets comprise:
Employee and other provisions
(b) Reconciliations
(i) Gross Movements
Total facility
amount at year end
$
Amount drawn at
year end
$
7,400,000
228,988
1,771,385
4,600,000
190,000
14,190,373
5,135,979
228,988
1,771,385
4,600,000
190,000
11,926,352
$2,264,021
Note
Consolidated
2023
$
2022
$
19(b)(ii)
205,515
205,515
162,675
162,675
The overall movement in the deferred tax account is as follows:
Opening balance
Credit/(Charge) to the income statement
4
Closing balance
162,675
42,840
205,515
217,096
(54,421)
162,675
61
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 19
Tax (continued)
(ii) Deferred Tax Assets
The movement in deferred tax assets for each temporary
difference during the year is as follows:
Employee and other provisions
Opening balance
Credited/(Charged) 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(s) 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*
(d) Deferred tax liability is offset against unrecognised tax
losses:
Revaluation of plant and equipment, and
improvements
leasehold
Less: Offset of unrecognised tax loss benefit
Net deferred tax liability
Consolidated
2023
$
2022
$
162,675
42,840
205,515
205,515
217,096
(54,421)
162,675
162,675
80,236
83,992
1,142,682
1,142,682
10,962,808
8,293,124
(769,336)
(867,516)
10,193,472
7,425,608
769,336
867,516
(769,336)
(867,516)
-
-
*Tax Losses of $10,193,472 have not been brought to account as it is unlikely that these losses will be utilised in
the near future.
62
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 20 Provisions
Employee Entitlements
Current
Non-current
Reconciliation
Opening Balance
Leave Accrued
Leave Paid/Taken
Closing Balance
Consolidated
2023
$
2022
$
859,071
25,014
884,085
846,450
472,220
(434,585)
884,085
824,284
22,166
846,450
1,161,586
354,437
(669,573)
846,450
Provision for Employee Entitlements
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 management estimates
considering amongst other items, historical data. The measurement and recognition criteria relating to employee
benefits have been disclosed in Note 1(v) to the financial statements.
Note 21
Issued Capital
Consolidated
2023
$
2022
$
Number of Ordinary shares fully paid 337,659,830 (2022: 272,275,214):
45,239,038
41,768,876
45,239,038
41,768,876
Ordinary Shares
At the beginning of reporting period
Shares issued during year
14/10/2021 issued at $0.11
08/03/2023 issued at $ 0.052
Capital Transaction Costs
Unlisted share options – expired
At reporting date
2023
Number
272,275,214
2022
Number
172,275,214
$
$
41,768,876
31,483,891
-
65,384,616
-
-
337,659,830
100,000,000
-
-
-
272,275,214
-
3,400,000
(150,080)
220,243
45,239,039
11,000,000
-
(715,015)
-
41,768,876
Shares issued under the non-renounceable rights issue 14 October 2021 had 25,000,058 attaching listed options
expiring 31 October 2024. The offer price was $NIL and the options have an exercise price of $0.20.
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.
63
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 22 Reserves
Foreign currency
Asset Revaluation
Note
Consolidated
2023
$
2022
$
(a)
(b)
(1,991,715)
(1,988,035)
7,769,808
7,769,808
5,778,093
5,781,773
Movement in each class of reserves during the current year and previous
year as set out below
Balance at 1 July 2021
Foreign currency translation
Balance at 30 June 2022
Foreign currency translation
Balance at 30 June 2023
Foreign
Currency
Asset
Revaluation
$
$
Total
$
(1,979,865)
7,769,808
5,789,943
(8,170)
(1,988,035)
(3,680)
-
7,769,808
(8,170)
5,781,773
-
(3,680)
(1,991,715)
7,769,808
5,778,093
(a) The reserve is used to recognise exchange differences arising from the translation of the financial statements of
foreign operations to Australian dollars.
(b) The reserve records revaluations of leasehold improvements and plant and equipment.
Note 23 Share Based Payment Reserve
The share-based payment credit for the year was $184,128 (2022: $314,332 expense). Of this, a credit of
$220,244 (2022: $199,395 expense) is in connection with the expiry of options issued to brokers and corporate
consultants in connection with Placement and Rights Issue, and this has been offset against equity. The
remaining $36,116 (2022: $114,937) is in connection with unlisted share options issued to directors and been
included in the Statement of Profit or Loss. Set out below is a summary of the options issued.
As part of the capital raising in October 2021 EGY granted 9,000,000 listed share options valued at $199,395 to
brokers in connection with the Rights Issue. These options vests immediately and have been recognised as share
issue costs against equity. The table below includes the valuation model inputs used to determine the fair value at
the grant date;
Tranche
Grant
date
Expiry
date
Share
price at
grant date
Exercise
price
Expected
volatility
%
Dividend
yield
%
Risk-free
interest
rate %
Fair value
at grant
date
9,000,000 14/10/21
31/10/24
$0.11
$0.200
55%
-
0.475%
$0.0222
64
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 23
Share Based Payment Reserve (continued)
During the 2021 financial year EGY granted 19,300,000 unlisted share options to brokers and corporate
consultants in connection with Placement and Rights Issue. These options vest immediately and have been
recognised as share issue costs against equity. However, during the financial year under review, 12,500,000
options have expired and accordingly the share-based credit has been recognised (refer page 65). The valuation
model inputs used to determine the fair value at the grant date, for the remaining 6,800,000 options is as follows:
Tranche
Grant
date
Expiry
date
Share
price at
grant date
Exercise
price
Expected
volatility
%
Dividend
yield
%
Risk-free
interest
rate %
Fair value
at grant
date
6,000,000 18/11/20
800,000 23/12/20
01/12/23
23/12/23
$0.08
$0.08
$0.112
$0.112
55%
55%
-
-
0.09%
0.09%
$0.0214
$0.0214
6,800,000
Finally, during the 2021 financial year 3,422,429 unlisted share options were issued to directors under an approved
share option plan. The unlisted options issued under the Share Option Plan are unvested and exercisable. The
terms are as follows:
Tranche
Grant
date
Expiry
date
Share
price at
grant date
Exercise
price
Expected
volatility
%
Dividend
yield
%
Risk-free
interest
rate %
Fair value
at grant
date
1,140,810
1,140,810
1,140,809
3,422,429
30/06/21
30/06/21
30/06/21
30/06/24
30/06/24
30/06/24
$0.165
$0.165
$0.165
$0.168
$0.168
$0.168
55%
55%
55%
-
-
-
0.06%
0.06%
0.06%
$0.0346
$0.0790
$0.0596
Movement in share options as follows:
Consolidated 2023
Grant date Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
18/11/20
30/06/23
18/11/20
01/12/23
23/12/20
23/12/23
30/06/21
30/06/24
14/10/21
31/10/24
$0.120
$0.112
$0.112
$0.168
$0.200
12,500,000
6,000,000
800,000
3,422,429
9,000,000
31,722,429
-
-
-
-
-
-
-
-
-
Expired/
forfeited/
other
Balance at
the end of the
year
(12,500,000)
-
-
-
6,000,000
800,000
(595,238)
2,827,191
-
9,000,000
(13,095,238) 18,627,191
Weighted average exercise price
$0.1557
$0.00
$0.00
$0.123
$0.1729
The weighted average share price during the financial year was $0.05
The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.13
years
65
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 24 Parent Entity Disclosure
(a) Statement of financial position
Total Current Assets
Total Non-Current Assets
Total Assets
Total Current Liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Accumulated losses
Share based payment reserve
Total Equity
(b) Financial Performance
Loss for the year after income tax
Other comprehensive income
Total Comprehensive Loss
2023
$
2022
$
8,976,694
17,592,386
3,331
7,260
8,980,025
17,599,646
5,253,744
1,808,354
-
-
5,253,744
1,808,354
3,726,281
15,791,292
45,239,038
41,768,876
(42,008,893)
(26,657,848)
496,136
680,264
3,726,281
15,791,292
(15,351,045)
(8,742,535)
-
-
(15,351,045)
(8,742,535)
(c) Parent entity result includes impairment of investment in controlled entities of $14,132,657 (2022:
$7,803,507)
(d) The parent entity has co-guaranteed finance facilities with subsidiary Bambach Wires and Cables Pty Limited
to a maximum drawdown limit of $7.4m (Guarantees FY2022: $6m).
(e) Contingent Liabilities of the Parent Entity – Refer to Note 26.
(f) Commitments for the acquisition of Property, Plant and Equipment by the parent entity Nil (2022 $Nil)
66
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 25 Capital and Leasing Commitments
(a) Short term leases
Non-cancellable short-term leases contracted for but not capitalised in the
financial statements.
Payable — minimum lease payments
not later than 12 months
Consolidated
2023
$
2022
$
36,480
36,480
53,964
53,964
(b) Capital Expenditure Commitments
As at 30 June 2023, commitments have been made for new planning software and equipment quoted at cost
$193,687 (Commitments FY2022: $591,523).
Note 26 Contingent Liabilities
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 regard 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.
Note 27 Segment Reporting
The Group’s operating segments are based on the internal reports that are reviewed and used by the Board of
Directors (who are identified as the Chief Operating Decision Makers (‘CODM’) in assessing performance and in
determining the allocation of resources. The Directors have determined that there is one operating segment
identified and located in Australia being the manufacture and sale of specialist industrial cables. The information
reported to the CODM is the consolidated results of the Group. The segment results are as shown in the
Statement of Profit or Loss and Consolidated Statement of Comprehensive Income. Refer to the consolidated
statement of financial position for segment assets and liabilities. Information about revenue from products and
services is disclosed in note 2.
Major customers
During the current financial year 12% (2022: 14%) of the group’s revenue was derived from a single customer.
Geographical Disclosure
The group only operated in Australia for the financial year ended 30 June 2023.
67
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 28 Cash Flow Information
(a) Reconciliation of Cash Flow from Operations with Net Loss
after Income Tax
Net loss after income tax
Adjusted for non cash transactions
Depreciation of non-current assets
Amortisation of intangibles
Depreciation on right of use assets
Unrealised foreign exchange movements
Net loss on disposal of property, plant and equipment
Impairment of Plant and equipment
Hire Purchase Loan write back
Impairment of intangible assets
Lease liability Interest Charges
Borrowing Interest Charges
Share-based payment
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
Consolidated
Note
2023
$
2022
$
(15,343,684)
(8,726,195)
1,006,590
1,152,862
771,012
704,834
(7,361)
2,266
-
(3,692)
5,194,327
145,726
-
36,116
859,049
783,426
(16,339)
9,435
315,900
-
600,000
169,552
78,898
114,937
439,233
1,989,958
(183,553)
(1,126,870)
63,671
(1,871,701)
(42,840)
153,320
29,959
37,635
54,421
140,570
149,145
(315,136)
Net Cash outflows from operations
(6,996,441)
(5,638,088)
(b) Credit Facilities
The Group has in place hire purchase facilities. At balance date $228,988 (2022: $94,852) of these facilities
have been utilised.
68
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 28 Cash Flow Information (continued)
(c) Reconciliation of liabilities arising from financing activities
Non-cash changes
30/06/2022
Cash flows
Transaction
Costs
Lease
extension
Liability
write off
30/06/2023
Note
$
$
$
$
$
$
Convertible notes
Directors loans
Executives loans
Other loans
Debtor finance
facility
Trade finance
facility
Equipment
Finance
Hire purchase
liabilities
18
18
18
18
18
18
18
15
-
4,600,000
515,480
(515,480)
204,452
(14,452)
503,013
(503,013)
766,176
859,390
4,750,874
(1,240,461)
-
1,771,385
-
-
-
-
-
-
-
94,852
136,327
1,501
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,600,000
-
190,000
-
1,625,566
3,510,413
1,771,385
(3,692)
228,988
Lease liabilities
15
2,751,109
(718,522)
144,225
238,332
-
2,415,144
Total
9,585,956
4,375,174
145,726
238,332
(3,692)
14,341,496
Note 29 Events After the Reporting Period
The following matters have occurred post reporting date:
The company has raised $2,606,500 by way of the issue of convertible notes with funding received in five
tranches. These notes have a face value of $1.00, attract a 10% coupon rate, which is payable on maturity,
and are convertible at $0.08 subject to shareholder approval. These notes mature two years from the date of
issue; and
Convertibles notes of $1,000,000 which matured on 25 August 2023 have been extended until 27 November
2023. The terms of the notes remain unchanged.
Other than what is noted per above, there have been no other matters that have 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 operations of the Company, the results of those operations, or the state of affairs of the
Company in subsequent financial years.
69
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
For the year ended 30 June 2023
Note 30 Related Party Transactions
No loans were made, guaranteed or secured by any entity in the Group to any group of key management personnel
or related entities during the financial year (FY2022: $NIL).
Loans by Director to the company
An unsecured loan from Director Matthew Driscoll of principal $500,000 as at 30 June 2022 was repaid during
the period. The repayment included accrued interest of $31,506, of which $15,480 was accrued at 30 June 2022.
During the period to 30 June 2022 a loan was made from Director and CEO Alfred Chown of $200,000. An
amount of $10,000 was repaid during the current period, and the loan principal is currently $190,000. The loan
matures on 11 April 2024, or as mutually agreed. The interest rate is 10% and during the period $21,110 of
interest was paid.
Directors Fees
Included in Sundry payables and accrued expenses are unpaid Directors fees of $143,056 (2022: $115,000).
Note 31 Financial Risk Management Disclosures
(a) Capital Risk Management
Energy Technologies Limited (EGY) manages its capital to ensure that entities in the 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 FY2022.
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.
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)
Net Debt to Equity ratio
Consolidated
2023
$
2022
$
14,341,496
9,585,956
(49,440)
(82,066)
14,292,056
9,503,890
3,726,281
15,791,292
384%
60%
i) Debt is defined as lease liabilities (both long and short term) and borrowings (both long and short term).
ii) Equity includes all capital and reserves and minority interest.
70
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 31 Financial Risk Management Disclosures (continued)
(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, invoice finance facility, trade finance facility, short term loans, hire purchase, accounts
receivable and payable and leases. 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.
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 2023.
(iii) Liquidity Risk
Prudent liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and
cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due
and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities
by continuously monitoring actual and forecast cash flow and matching the maturity profiles of financial
asset and liabilities.
Remaining contractual maturities
The following tables detail the Group’s remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on undiscounted cash flows of financial liabilities based on the earliest date on
which the financial liabilities are required to be paid. The tables include both interest and principal cash flows
disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the
statement of financial position.
71
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 31 Financial Risk Management Disclosures (continued)
Weighted
Average Interest
Rate –
%
1 year or less
$
Between 1 and 5 years
$
Remaining contractual
maturities
$
CONSOLIDATED ENTITY
2023
2022
2023
2022
2023
2022
2023
2022
Non-derivatives
Non-interest bearing
Trade payables
BAS payable
Other payables
Loans from director and
executives
Other loans
Interest bearing - variable
-
-
-
-
-
-
-
-
-
-
1,088,126
1,063,450
412,163
344,440
825,181
853,908
-
-
19,931
3,014
Debtor finance facility
12.60
8.73
1,676,070
777,171
Trade finance facility
17.52
12.00
3,712,613
4,844,590
Interest bearing - fixed
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,088,126
1,063,450
412,163
344,440
825,181
853,908
-
-
19,931
3,014
1,676,070
777,171
3,712,613
4,844,590
Equipment Finance Facility 13.29
-
550,462
-
1,743,128
-
2,293,590
-
Hire purchase liability
7.50
8.91
32,979
82,384
-
22,631
32,979
105,015
Hire Purchase – Planning
System
14.87
-
88,550
-
154,963
-
243,513
-
Lease liability
5.00
5.00
820,404
756,540
1,955,249
2,477,221
2,775,653
3,233,761
Loans from directors and
executives
10.00
10.00
204,846
752,500
Other loans
10.00
10.00
-
545,833
Convertible notes
10.00
-
4,706,589
-
-
-
-
-
-
-
204,846
752,500
-
545,833
4,706,589
-
Total non-derivatives
14,117,983
10,043,761
3,853,340
2,499,852
17,971,323
12,543,613
72
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 31 Financial Risk Management Disclosures (continued)
(b) Financial Risk Management (continued)
(iv) Maturity analysis
Trade and other payables are expected to be paid within a period of 6 months from year end for
the group for 2023 and 2022.
(v) 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.
(vi) 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). 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:
Liabilities
Assets
2023
$’000
2022
$’000
2023
$’000
2022
$’000
-
-
-
-
-
-
-
-
27
9
-
36
224
9
2
235
US Dollars
Euros
Great Britain Pounds
Total
(vii) Forward exchange contracts
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 2023 and 30 June 2022 there were no outstanding forward exchange contracts.
73
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 31 Financial Risk Management Disclosures (continued)
(b) Financial Risk Management (continued)
(viii) 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
Total
(ix) Interest Rate Risk Management
Consolidated
2023
$’000
2022
$’000
3
1
4
25
1
26
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.
(x) 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
2023
$’000
2022
$’000
(286)
286
(286)
286
(190)
190
(190)
190
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)
74
Energy Technologies Limited – 2023 Annual Report
Notes to the Financial Statements
for the year ended 30 June 2023
Note 31 Financial Risk Management Disclosures (continued)
(b) Financial Risk Management (continued)
(xi) 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.
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 (FY2022: $NIL).
Note 32 New and Amended Accounting Standards and Interpretations
(i)
New and amended accounting standards and interpretations adopted by the Group
(a) New and amended standards adopted by the Group in this financial report
There were no new or revised Standards and Interpretations issued by the AASB that were
adopted by the Company that are relevant to its operations and effective for the reporting period.
(b) Impact of standards issued but not yet applied by the Group
Several new standards are effective for annual periods beginning after 1 January 2023 and
earlier application is permitted; however, the Group has not early adopted the new or amended
standards in preparing these consolidated financial statements. For future reporting purposes,
the Company has reviewed the new and amended standards and they are either not applicable
to the Group or are not expected to have a significant impact on the Group’s consolidated
financial statements.
75
Energy Technologies Limited – 2023 Annual Report
Directors’ Declaration
The directors of Energy Technologies Limited declare that:
1.
the financial statements and notes, as set out on pages 32 to 75, 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 2023 and of the performance
for the year ended on that date of the consolidated entity;
2.
the Managing Director and Chief Financial Officer have each declared that:
(a) the financial records of the consolidated entity 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 Chown
Director
28 September 2023
76
Independent Auditor’s Report
To the Members of Energy Technologies Limited
Report on the Audit of the Financial Report
Opinion
Crowe Audit Australia
ABN 13 969 921 386
Level 42, 600 Bourke Street
Melbourne VIC 3000 Australia
c/o Findex Mail Processing Team
PO Box 1608
Mildura VIC 3502 Australia
Main +61 (03) 9258 6700
Fax +61 (03) 9258 6722
www.crowe.com.au
We have audited the financial report of Energy Technologies Limited (the Company) and its subsidiaries (collectively
“the Group”), which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated
statement of comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(a)
giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial performance
for the year then ended; and
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1(c) in the financial statements, which indicates that the Group incurred a net loss of
$15,344,996 during the year ended 30 June 2023, and as of that date, the Group’s current liabilities exceeded its
current assets by $5,861,503. As stated in Note 1(c), these events or conditions, along with other matters as set
forth in Note 1(c), indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as
a going concern. Our opinion is not modified in respect of this matter.
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 year. 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 Material uncertainty related to going concern section, we have determined
the matter described below to be the key audit matter to be communicated in our report.
Some of the Crowe personnel involved in preparing this document may be members of a professional scheme approved under Professional
Standards Legislation such that their occupational liability is limited under that Legislation. To the extent that applies, the following disclaimer
applies to them. If you have any questions about the applicability of Professional Standards Legislation to Crowe’s personnel involved in
preparing this document, please speak to your Crowe adviser.
Liability limited by a scheme approved under Professional Standards Legislation.
The title ‘Partner’ conveys that the person is a senior member within their respective division and is among the group of persons who hold an
equity interest (shareholder) in its parent entity, Findex Group Limited. The only professional service offering which is conducted by a partnership
is external audit, conducted via the Crowe Australasia external audit division and Unison SMSF Audit. All other professional services offered by
Findex Group Limited are conducted by a privately-owned organisation and/or its subsidiaries.
Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a
separate and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe
Global or any other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or
partnership interest in Findex (Aust) Pty Ltd. Services are provided by Crowe Audit Australia, an affiliate of Findex (Aust) Pty Ltd.
© 2023 Findex (Aust) Pty Ltd
77
Key Audit Matter
How We Addressed the Key Audit Matter
Intangible assets – Impairment assessment – Notes 1(h); 1(j) and 14
Our procedures included, but were not limited to:
Conducting a detailed
allied
review of board
minutes,
and
management’s assessment of external and
internal impairment indicators in accordance
with AASB 136;
correspondence
consideration of impairment factors that were
evident in the 31 December 2022 half year
review;
evaluating
the
reasonableness of
the
impairment and challenging the assumptions
made by the board in determining the write
down;
the
impairment
evaluating
assessment
the requirements of AASB 136,
against
including management’s allocation of
the
impairment write down to intellectual property
assets and development assets, on the basis
that all other assets were stated at either fair
value or at their recoverable amounts;
a consideration of historic sales and gross
margins specific to intangible assets; and
assessing the adequacy of related financial
report disclosures in the group’s financial
statements.
Intangible assets had a net carrying value of
$5,977,837 at the beginning of the beginning of
the financial year. During the financial year under
review, the Group amortised the intangible assets
over their useful lives (10 year period) which was
in line with the prior year. This resulted in an
amortisation expense of $771,012.
At balance date, the board formally approved the
decision to impair the remainder of the intangible
assets (development assets and the intellectual
property) to $Nil. This impairment resulted in an
impairment loss of $5,194,327 which has been
the consolidated statement of
included
comprehensive
remaining
intangible asset at year end is the computer
software.
income. The only
in
required
the group
In accordance with AASB 136 Impairment of
Assets,
to assess
is
impairment indicators and test intangible assets
for impairment where indicators exist. Intangible
assets not yet available for use are tested
annually for impairment, irrespective of indicators
of impairment.
result of
This area is considered to be a key audit matter
as a
the significant management
judgement involved in assessing the magnitude of
the impairment which affected the intangible
assets in the current year.
We have therefore spent significant audit effort on
verifying the impairment adjustment including the
time of senior members of our audit team, in
these
assessing
assumptions.
appropriateness
the
of
Other Information
The directors are responsible for the other information. The other information comprises the information included in
the Group’s Annual Report for the year ended 30 June 2023 but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial report or our knowledge obtained
in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
78
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true and
fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities with the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during the audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, action taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most significance in the
audit of the financial report of the current period and are therefore the key audit matters. We describe these matters
in the auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in the auditor’s report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
79
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 13 to 18 of the Directors’ Report for the year ended 30
June 2023.
In our opinion, the Remuneration Report of Energy Technologies Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Group 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.
Crowe Audit Australia
Antony Barnett
Partner
Melbourne, Victoria
Date: 28 September 2023
80
Energy Technologies Limited – 2023 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 2023.
(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
614
71
56
132
202
72,330
177,544
436,557
5,360,146
331,613,253
1,075
337,659,830
The number of shareholders holding less than a marketable parcel of
shares are:
750
785,430
(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
J P Morgan Nominees Australia Pty Ltd
Citicorp Nominees Pty Ltd
Advance Cables Pty Ltd
Howe Automotive Limited
AFNI Pty Ltd
Windpac Pty Ltd (David Earl Slack Superfund A/C)
Alfred J Chown
Parmelia Pty Ltd
Dasi Investments Pty Ltd
Starway Corporation Pty Ltd (Giles Superfund A/C)
M&M Driscoll Nominees Pty Ltd
Johan Pty Ltd
Superfund Jones Pty Ltd
One Managed Investment Funds Limited
Plutus Pty Ltd
Garsind Pty Ltd (Ruth Ross Superfund A/C)
Epicinvest Pty Ltd
Tzelepis Nominees Pty Ltd
Auster Holdings
PAC Partners Securities Pty Ltd
81
No. of shares
%
84,634,745
16,348,878
10,782,839
9,808,346
9,715,385
8,444,063
8,243,575
7,391,609
7,307,700
6,909,644
6,560,277
5,769,231
5,000,000
4,269,808
4,005,682
3,922,795
3,652,948
3,600,000
3,476,058
3,376,598
213,220,181
25.07
4.84
3.19
2.90
2.88
2.50
2.44
2.19
2.16
2.05
1.94
1.71
1.48
1.26
1.19
1.16
1.08
1.07
1.03
1.00
63.14
Energy Technologies Limited – 2023 Annual Report
ASX Additional Information (continued)
(c) Substantial shareholders
The number of shares held by substantial shareholders are:
J P Morgan Nominees Australia Pty Ltd
Anthony Lloyd Smith/nominee (J P Morgan Nominees Australia Pty Ltd)
Number of Shares
64,791,070
19,843,675
(d) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
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Energy Technologies Limited – 2023 Annual Report
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