VOLT POWER GROUP LIMITED
ABN 62 009 423 189
ANNUAL REPORT
For the year ended 31 December 2017
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Contents
Corporate Directory .............................................................................................................................. 3
Corporate Governance Statement........................................................................................................... 4
Corporate and Operational Review ......................................................................................................... 4
Directors’ report ................................................................................................................................... 6
Auditors’ independence declaration ....................................................................................................... 16
Consolidated Statement of Profit or Loss and Other Comprehensive Income ............................................... 17
Consolidated Statement of Financial Position ......................................................................................... 18
Consolidated Statement of Changes in Equity ........................................................................................ 19
Consolidated Statement of Cash Flows ................................................................................................. 20
Notes to the Consolidated Financial Statements ..................................................................................... 21
Directors' declaration .......................................................................................................................... 46
Independent audit report ..................................................................................................................... 47
Investor information ............................................................................................................................ 51
2
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Corporate Directory
ABN: 62 009 423 189
Directors
Simon Higgins
Non-Executive Chairman
Adam Boyd
CEO and Managing Director
Peter Torre
Non-Executive Director
Company Secretary
Ian Sydney
Principal place of business
1 Channel Close
Henderson WA 6166
ph (08) 9437 4966
Registered office
Unit B9, 431 Roberts Road
Subiaco WA 6008
Share register
Link Market Services Pty Ltd
Level 12
250 St George’s Terrace
Perth WA 6000
Auditor
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Solicitors
DLA Piper
Level 31
152-158 St George’s Terrace
Perth WA 6000
Bankers
Commonwealth Bank of Australia
Corporate Financial Services
Level 14C, 300 Murray Street
Perth WA 6000
Stock Exchange Listings
Australian Securities Exchange (ASX)
ASX Code: VPR
Website
www.votlpower.com.au
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Corporate Governance Statement
Volt Power Group Limited and the Board are committed to achieving and demonstrating the highest standards of corporate
governance. Volt Power Group Limited has reviewed its corporate governance practices against the Corporate Governance
Principles and Recommendations (3rd edition) published by the ASX Corporate Governance Council.
The 2017 corporate governance statement is dated as at 28 April 2017 and reflects the corporate governance practices in
place throughout the financial year. A description of the Group's current corporate governance practices is set out in the
Group's corporate governance statement which can be viewed at www.voltpowergroup.com.au/about.
Corporate and Operational Review
The directors provide you with the following corporate and operational review of the consolidated entity (referred to hereafter
as the Group) consisting of Volt Power Group Limited ("Volt" or "the Company") and the entities it controlled at the end of, or
during, the year ended 31 December 2017.
1. Summary
(a) Operations
• At a general meeting of shareholders on 28 April 2017, it was resolved that the Company undertake a capital raising via
a private placement of shares to ECM and parties procured by ECM at an issue price of $0.001 per share to raise
$5,600,000 before costs subject to certain conditions.
• On 10 May 2017, the Company’s wholly owned subsidiary, Enerji Holdings Pty Ltd exited administration, upon the
effectuation of a Deed of Company Arrangement. All claims of Enerji Holding’s creditors, prior to the appointment of the
administrator, have now been extinguished.
• On 19 May 2017, the Company exited administration, upon the effectuation of a deed of company arrangement. All claims
of creditors (except for any excluded claims) against the Company have now been extinguished.
• On 31 May 2017, at the Company’s Annual General Meeting, members resolved via special resolution to change the
company name from Enerji Ltd to Volt Power Group Limited. This name change took effect from 1 June 2017.
•
•
•
•
The Recapitalisation was completed and 5,600,000,000 fully paid ordinary shares were issued on 2 June 2017.
The Company’s shares were reinstated to trading on the ASX from Wednesday 14 June 2017.
The Group completed a detailed process engineering review of the ATEN Technology, focusing on process flow rates,
electricity generation performance, efficiency improvements and reliability enhancements. The engineering review
confirmed the technical viability of the ATEN Technology and identified several flowsheet enhancement opportunities
that are expected to improve the efficiency and commercial viability of the ATEN Technology (ATEN Engineering Review).
The Group has also completed a preliminary feasibility study into the installation of the ATEN Technology at a mine site
power station located in Western Australia (Preliminary Feasibility Study). The Preliminary Feasibility Study included a
review of the critical equipment and technologies that comprise the ATEN Technology (ATEN Technology Review). The
ATEN Technology Review was undertaken to ensure the ATEN Technology was capable of achieving maximum potential
performance efficiency combined with lowest life-cycle maintenance and operating costs.
• A commercial proposal to install the ATEN Technology at the aforementioned mine site power station has been presented
to the mine owner for consideration. Discussions are continuing between the mine owner and the Company to finalise
arrangements for the provision of critical services to and installation of the ATEN Technology at the mine site power
station.
• On 21 December 2017, the Company completed the acquisition of 50% of the issued capital of EcoQuip Australia Pty
Ltd (EcoQuip). EcoQuip is a developer, manufacturer and supplier of innovative mobile solar / Li-Ion battery powerbox
towers compatible with LED lighting, LTE/Wi-Fi repeater communication solutions and CCTV solution retro-fit (MSPT).
EcoQuip owns a rental fleet of 25 LED lighting MSPT units supplied under contract to infrastructure construction and
resource sector companies.
• EcoQuip secured and advanced to near completion an order to design and manufacture diesel fueled lighting skids and
mobile towers for AngloGold Ashanti Australia Pty Limited for the Tropicana Gold Mine. The equipment order was
completed in two tranches with the final delivery of equipment occurring during February 2018.
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
• Consideration for the 50% EcoQuip investment comprised the issue of 50,00,000 Volt shares to interests associated with
the EcoQuip founder and a share subscription payment to EcoQuip of $1,000,000 in cash as consideration for the issue
of new EcoQuip shares to the Company. The $1,000,000 cash investment was funded from the Company’s cash
reserves.
• Subsequent to year end, on 24 January 2018, the Company completed the acquisition of 100% of the issued shares of
Wescone Distribution Pty Ltd, a leading supplier of proprietary sample crushing equipment to the global iron ore industry.
Consideration for the purchase comprised a total of $4,750,000 cash, the issue of 100,000,000 Volt shares and the grant
of a revenue royalty to the vendor (Wescone Acquisition).
•
To finance and conclude the Wescone Acquisition, the Company successfully completed a $4,750,000 capital raising
(before costs).
(b) Financial performance and financial position
The financial results of the Group for the year ended 31 December 2017 are summarised as follows:
Revenue
Profit/(loss) for the period attributable to members
Profit/(loss) per share
Cash and cash equivalents
Net tangible asset / (deficiency) per share
2017
$
-
2,625,618
0.068
2,988,650
0.0005
2016
$
-
(2,548,183)
(0.444)
250,926
(0.0097)
%
Change
0%
203%
115%
1091%
105%
The Group made a profit for the year of $2,625,618 (2016: loss of $2,548,183), experienced net cash inflows from operating
activities of $170,347 (2016: cash outflow of $778,830) and has a net asset balance of $3,184,822 (2016: deficiency of
$5,754,445).
The profit for the year includes the following items of significance:
•
•
a gain on effectuation of the Enerji Limited deed of company arrangement of $1,132,476;
a gain on effectuation on the deed of company arrangement of the wholly owned subsidiary, Enerji Holdings Pty Ltd, of
$2,419,475; and
•
the Group’s 2016 research and development tax rebate of $361,959.
5
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Directors’ report
For the year ended 31 December 2017
The directors present their report together with the financial report of the consolidated entity (referred to hereafter as the
Group) consisting of Volt Power Group Limited ("Volt" or "the Company") and the entities it controlled at the end of, or during,
the year ended 31 December 2017 and the auditor's report thereon.
1. Directors
The names of the Company’s directors in office during the year and until the date of this report are set out below. Directors
were in office for this entire period unless otherwise stated.
• Mr Simon Higgins
• Mr Adam Boyd
• Mr Peter Torre
• Mr Rod Phillips
• Mr Peter Avery
• Mr John Dekker
Non-Executive Chair (appointed 28 April 2017)
Chief Executive Officer and Managing Director (appointed 28 April 2017)
Non-Executive Director (appointed 28 April 2017)
Non-Executive Chair (resigned 28 April 2017)
Non-Executive Director (resigned 28 April 2017)
Non-Executive Director (resigned 28 April 2017)
2. Directors and officers
Simon Higgins – Non-Executive Chair (appointed 28 April 2017)
Mr Higgins is currently the Chief Executive Officer and Managing Director of the ECM group of companies. ECM is a leading
construction and maintenance company servicing clients in the mining, oil and gas, power generation and infrastructure
sectors.
During his tenure at ECM, Mr Higgins has overseen significant growth and development, including the diversification of service
offering, entry into the oil and gas sector and interstate and intrastate expansion.
Mr Higgins is a past chairman of the National Electrical and Communications Association (NECA) WA, Electrical Group
Training and the College of Electrical Training.
Other current and former directorships in last 3 years
None
Special responsibilities
Chair of the board
Interests in shares and options
775,000,000 ordinary shares in Volt Power Group Limited
Nil options in Volt Power Group Limited
Adam Boyd – Managing Director (appointed 28 April 2017)
Mr Boyd most recently served as Chief Executive Officer and Managing Director of Pacific Energy Limited (ASX: PEA) from
June 2006 to March 2015. During his tenure at Pacific Energy Limited, Mr Boyd led the company to becoming the pre-eminent
remote mine site contract power business in Australia, with a 250 MW generation footprint across Australia. During this period
Pacific Energy's enterprise value increased from $9 million to approximate $250 million.
Prior to joining Pacific Energy Limited, Mr Boyd was a senior executive with Global Renewables Group when it was jointly
owned by GRD Limited and Hastings Fund Management Limited. During that tenure Mr Boyd was principally involved in the
successful commercialisation of the Global Renewables alternative waste treatment and renewable energy process
technology in Australia and the United Kingdom.
Mr Boyd is a renewable infrastructure and energy specialist with considerable experience in areas of resource sector power
generation, energy and waste infrastructure project development, business development and business acquisitions,
technology commercialisation, public company management and equity and credit finance.
Other current and former directorships in last 3 years
Managing Director and Chief Executive Officer of Pacific Energy Limited from June 2006 to March 2015.
Special responsibilities
None
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Interests in shares and options
710,000,000 ordinary shares in Volt Power Group Limited
350,000,000 options in Volt Power Group Limited
Peter Torre - Non-Executive Director (appointed 28 April 2017)
Mr Peter Torre is a chartered accountant, a chartered secretary and a member of the Australian Institute of Company Directors.
Mr Torre is the principle of Torre Corporate, an advisory firm which provides corporate secretarial services to a range of ASX
listed companies. He was previously a partner of an internationally affiliated firm of chartered accountants working within its
corporate services division.
Mr Torre was the Company Secretary of the Company from September 2014 until 28 April 2017.
Other current and former directorships in last 3 years
Currently a director of Mineral Commodities Ltd
Special responsibilities
None
Interests in shares and options
25,000,000 ordinary shares in Volt Power Group Limited
Nil options in Volt Power Group Limited
Ian Sydney - Company Secretary (appointed 22 August 2017)
Mr Sydney is a CPA and Corporate Governance professional. Mr Sydney has over 25 years' experience as an accountant
and company secretary working for mining companies, oil and gas companies and large contracting companies.
3. Directors' meetings
The number of meetings of directors held during the year and the number of meetings attended by each director were as
follows:
Simon Higgins
Peter Torre
Adam Boyd
Rod Phillips
Peter Avery
John Dekker
Meetings
held
2
2
2
1
1
1
Meetings
attended
2
2
2
1
1
-
Number of meetings held is for the time the director held office during the year.
Other matters of Board business have been resolved by circular resolutions of Directors, which are a record of decisions made
at a number of informal meetings of Directors held to control, implement and monitor the Company’s activities throughout the
year.
4. Principal activities
The principal activities of the Group during the financial year were:
•
•
•
•
•
Effectuation of deeds of company arrangements that allowed the Company and its wholly owned subsidiary, Enerji
Holdings Pty Ltd to exit administration.
Recapitalisation of the Company via a private placement of shares to ECM and parties procured by ECM to raise
$5,600,000 before costs, and subsequent reinstatement to trading on the ASX.
Completion of the ATEN Technology Review and ATEN Engineering Review that identified opportunities to improve
the efficiency and viability performance of the Company’s ATEN Technology.
Completion of the Preliminary Feasibility Study into the installation of the ATEN Technology at a mine site power
station located in Western Australia.
Presentation of a commercial proposal to install the ATEN Technology at the aforementioned mine site to the mine
owner for consideration.
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
•
The acquisition of 50% of the issued capital of EcoQuip Australia Pty Ltd (EcoQuip), a leading developer,
manufacturer and supplier of mobile solar / Li-Ion battery enabled powerbox towers compatible with LED lighting,
LTE/Wi-Fi repeater and CCTV solution retro-fit.
Incomplete records
5.
The 2016 Financial Report was prepared by Directors who were in office for the entire period presented in that report, however
their duties and responsibilities were suspended from the date the Company entered administration, 18 October 2016. For the
period in which the Company was in administration, until the effectuation of the DOCA in May 2017, the Directors did not have
oversight or control over the Group’s financial reporting systems, including (but not limited to) being able to obtain access to
complete accounting records of the Company. Every reasonable effort was made by the Directors to ascertain the true position
of the Company as at 31 December 2016, however the Directors are of the opinion that it is not possible to state that the 2016
comparative financial statements, and the gain on effectuation of the DOCA of $3,551,951 recognised in the Statement of
Profit or Loss for the year ended 31 December 2017, and accompanying notes were in accordance with the Corporations Act
2001.
6. Dividends
There were no dividends paid or declared by the Company to members since the end of the previous financial year.
7. Operational and financial review
Information on the operations and financial position of the group and its business strategies and prospects is set out in the
corporate and operational review on pages 4 – 5 of this annual report.
8. Use of cash and assets readily convertible to cash
The Group has used its cash and assets readily convertible to cash during the period since relisting on the ASX (14 June 2017
to 31 December 2017) in a way that was consistent with its business objectives.
9. Significant changes in the state of affairs
Significant changes in the state of affairs of the Group during the financial year were as follows:
•
The exiting from administration of the Company and its wholly owned subsidiary, Enerji Holdings Pty Ltd.
• Recapitalisation of the Company with the raising of $5,600,000 before costs.
•
The acquisition of 50% of the EcoQuip business.
10. Events since the end of the financial year
The following events have occurred since the end of the financial year:
•
•
The acquisition of 100% of the issued shares of Wescone Distribution Pty Ltd, a leading supplier of proprietary sample
crushing equipment to the global iron ore industry. Consideration for the purchase comprised a total of $4,750,000 cash
and the issue of 100,000,000 Volt shares (Wescone Acquisition). Refer to note 34 for further details.
To finance and complete the Wescone Acquisition, the Company successfully undertook a $4,750,000 capital raising
(before costs). Refer to note 34 for further details.
11. Likely developments and expected results of operations
The following events are likely to occur over the coming year:
• Advancement of arrangements for the provision of services to and installation of the ATEN Technology at a mine site
power station and commencement of the front-end engineering design for the installation of the ATEN Technology.
• Continuation of the Company's activities in relation to the expansion of its power generation footprint through the
development and/or acquisition of micro-grid power supply solutions and other power generation assets that can further
the exploitation and roll-out of the ATEN technology.
• Activity to grow the EcoQuip business through the design completion and manufacture of a new generation MSPT
solution for supply under rental contract with infrastructure construction and resource sector companies.
•
Transition of the Wescone business from an equipment sale and service business model to a recurring revenue ‘serviced
exchange equipment rental’ business model, and expansion of the Wescone W300 sample crusher footprint into new
and existing customer project opportunities.
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
12. Environmental regulation
The Group is subject to environmental regulation in respect of any continuing operations. There have been no significant
known breaches of any environmental regulations to which the Group is subject.
13. Remuneration report (audited)
This Remuneration Report sets out information about the remuneration of the key management personnel (KMP) of the
Company and its controlled entities for the year ended 31 December 2017. This Report forms part of the Directors’ Report
and has been audited in accordance with section 300A of the Corporations Act 2001.
The Report details the remuneration arrangements for the Group’s key management personnel:
• Non-executive directors (NED’s); and
• Executive directors and senior executives (collectively the Executives).
KMP are those persons who, directly or indirectly, have authority and responsibility for planning, directing and controlling the
major activities of the Company and the Group.
The Company was in administration from 18 October 2016 to 19 May 2017. During the period of administration, the
Administrators were responsible for the remuneration policies of the Company.
The Directors who are in office at the date of this report had no involvement in adopting, implementing or complying with those
remuneration policies during the period in which the Company was in administration. These policies may or may not have
been in place during the period in which the Company was in administration.
The report is structured as follows:
(a) Key Management Personnel (KMP) covered in this report
(b) Remuneration policy, link to performance and elements of remuneration
(c) Link between remuneration and performance
(d) Contractual arrangements for executive KMP
(e) Remuneration expenses for executive KMP
(f) Non-executive director arrangements
(g) Share-based compensation
(h) Other statutory information
(a) Key Management Personnel (KMP) covered in this report
The table below outlines the KMP of the Group covered in this report.:
Name
Non-executive directors
Mr Simon Higgins
Mr Peter Torre
Mr Rod Phillips
Mr Peter Avery
Mr John Dekker
Executives
Mr Adam Boyd
Position
Term as KMP
Non-Executive Chair
Non-Executive Director
Non-Executive Chair
Non-Executive Director
Non-Executive Director
Appointed 28 April 2017
Appointed 28 April 2017
Resigned 28 April 2017
Resigned 28 April 2017
Resigned 28 April 2017
Managing Director and CEO
Appointed 28 April 2017
Changes since the end of the reporting period
There have been no changes to the non-executive directors and other key management personnel covered in this report since
the end of the reporting period.
(b) Remuneration policy, link to performance and elements of remuneration
The Company’s remuneration committee is comprised of the Chair and a non-executive director. The committee reviews and
determines our remuneration policy and structure annually to ensure it remains aligned to business needs, and meets our
remuneration principles. In particular, the board aims to ensure that remuneration practices are:
(i) competitive and reasonable, enabling the company to attract and retain key talent,
(ii) aligned to the company’s strategic and business objectives and the creation of shareholder value,
(iii) transparent and easily understood, and
(iv) acceptable to shareholders.
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
During the reporting period, no payments were made to a person before the person took office as part of the consideration for
the person agreeing to hold office.
Non-executive directors
On appointment to the Board, all non-executive directors enter into a service agreement with the company in the form of a
letter of appointment. The letter summarises the board policies and terms, including compensation, relevant to the office of
director.
Presently no element of non-executive director remuneration is ‘at risk’, that is, fees are not based on the performance of the
Company or equity based.
Executive management
Executive management have authority and responsibility for planning, directing and controlling the activities of the company.
Compensation levels for executive management of the Company are set competitively to attract and retain appropriately
qualified and experienced senior executives.
The compensation structures for executives are designed to attract suitably qualified candidates, reward the achievement of
strategic objectives and achieve the broader outcome of the creation of value for shareholders. The compensation structure
takes into account the executives’ capability and experience, level of responsibility and ability to contribute to the Company’s
performance, including the establishment of revenue streams and growth in shareholder returns.
Fixed compensation consists of a base salary or fee (calculated on a total cost basis, including any fringe benefits tax related
to employee benefits) as well as employer contributions to superannuation funds. The board through a process that considers
individual and company achievement reviews compensation levels annually.
(c) Link between remuneration and performance
The Group has in place an Incentive Option Scheme (long-term incentive (LTI) scheme), the purpose of which is to:
(i) encourage participation by Eligible Participants in the Company through Share ownership; and
(ii) attract, motivate and retain Eligible Participants.
At present the Group does not have any short-term incentive (STI) scheme, but the remuneration committee will consider this
in due course.
Options were issued to the Managing Director as part of his package, which represent performance linked remuneration.
Key performance indicators of the group over the last five years:
NPAT $m
Share price $
Dividend paid
EPS $
Y/E
2017
2.626
0.004
-
0.068
Y/E1
2016
(2.548)
0.005
-
(0.444)
Y/E
2015
(0.578)
0.038
-
(0.001)
Y/E
2014
(10.675)
0.009
-
(0.023)
Y/E
2013
(4.924)
0.002
-
(0.002)
1 Shares in the Company were suspended from trading on the ASX prior to market open on 18 October 2016. The closing
price on 17 October 2016 was $0.005 per share.
(d) Contractual arrangements for executive KMP
Managing Director
During the year the Group appointed Mr Adam Boyd as Managing Director and Chief Executive Officer. Mr Boyd is contracted
to the Company through his private company, and the contract does not have a fixed timeframe.
The termination provisions in the contract are as follows:
MD notice period (by Company or executive)
Termination
for cause
None
Termination by
redundancy or
notice without cause
3 months1
Resignation
1 month
1 The notice period is increased by one month for each completed year of service.
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
The terms of his remuneration package are as follows:
1. The Company shall pay a fee of $360,000 per annum.
2. The Company shall issue to Mr Boyd (or his nominee):
a. 175,000,000 Options exercisable at 0.15 cents each and expiring 36 months after the date of issue
(Tranche 1); and
b. 175,000,000 Options exercisable at 0.20 cents each and expiring 48 months after the date of issue
(Tranche 2).
The options have a vesting period of 12 months for Tranche 1 and 24 months for Tranche 2.
3.
In consideration for Mr Boyd agreeing to join the board of the Company, the Company will provide the Mr Boyd or
his nominee with the opportunity to subscribe for up to 800,000,000 Shares at $0.001 per Share pursuant to the
Capital Raising.
Options issued to Mr Boyd will vest subject to him being continuously employed by the Group for a period of 12 months, in the
case of Tranche 1 options, and for a period of 24 months in the case of Tranche 2 options.
(e) Remuneration expenses for executive KMP
The following table shows the details of the remuneration expense recognised for the group’s executive key management
personnel for the current and previous financial year measured in accordance with the accounting standards.
Name
Adam Boyd
(from 28 April
2017)
Andrew Vlahov
(until 1 August
2016)
Stephen Jones
(until 18 October
2016)
Total executive
KMP
Salary &
fees
240,000
75,854
Year
2017
2016
2017
2016
-
195,606
2017
2016
-
124,179
2017
2016
240,000
395,639
Post
employ-
ment
benefits
-
-
Non-
mone-
tary
benefits
-
-
Termin-
ation
benefits
-
-
Rights
to
deferred
shares
-
-
Options
88,544
-
Total
328,544
75,854
-
-
-
-
-
-
-
-
-
-
-
-
-
85,000
-
(24,539)
-
(6,199)
-
249,868
-
-
-
-
-
-
-
124,179
-
85,000
-
(24,539)
88,544
(6,199)
328,544
449,901
Perform-
ance
related
27%
0%
0%
-2%
0%
0%
27%
-1%
Mr Adam Boyd was interim Chief Executive Officer from 8 August 2016 until 19 October 2016.
(f) Non-executive director arrangements
Non-executive directors are paid base fees only, which are fixed by the Board.
There is no additional fee for serving on board committees. They do not receive performance-based pay or retirement
allowances. Fees are reviewed annually by the board with the level of Directors’ remuneration being set having regard to
independent survey data and publicly available information about fees paid to non-executive directors in a range of comparable
companies.
The Directors are entitled to be reimbursed for all travel and related expenses properly incurred in connection with the business
of the Company. The Company makes contributions at the statutory minimum rate to superannuation funds nominated by
directors, included in the base fee.
The total amount of remuneration, including superannuation, for all non-executive directors must not exceed the limit approved
by shareholders. The aggregate cash remuneration of all non-executive directors was set at $400,000 per annum at a general
meeting held on 1 December 2009. During the period the Company appointed Mr Simon Higgins and Mr Peter Torre as Non-
Executive Directors. The terms of their appointment are as follows:
• Mr Higgins –For his services as a Non-Executive Director and Chairman of the Company, the Company will pay him an
all-inclusive annual fee as is determined by the Board and approved by shareholders from time to time during his
appointment. The monthly fee payable is payable in arrears and will be initially set at $4,166,67 plus GST. This equates
to an annual fee of $50,000 plus GST, commencing 1 May 2017.
• Mr Torre –For his services as a Non-Executive Director and Chairman of the Company, the Company will pay him an all-
inclusive annual fee as is determined by the Board and approved by shareholders from time to time during his
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
appointment. The monthly fee payable is payable in arrears and will be initially set at $3,333 plus GST. This equates to
an annual fee of $40,000 plus GST, commencing 1 May 2017.
Details of the nature and amount of each major element of remuneration are set out below:
Simon Higgins
(28 April 2017 to 31 December 2017)
Peter Torre
(28 April 2017 to 31 December 2017)
Rod Phillips
(to 28 April 2017)
John Dekker
(to 28 April 2017)
Peter Avery
(to 28 April 2017)
Total non-executive directors
Year
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
Short-term
benefits
33,333
-
26,640
-
-
53,266
-
53,266
-
55,403
59,973
161,935
Post
employment
-
-
-
-
-
2,137
-
2,137
-
-
-
4,274
Total
33,333
-
26,640
-
-
55,403
-
55,403
-
55,403
59,973
166,209
(g) Share-based compensation
During the year options were issued to the Managing Director as part of his remuneration package. Further details are provided
under contractual arrangements for executive KMP above.
The board does not have a policy that restricts the holders of securities issued as share based payments as part of their
remuneration from entering into other arrangements that limit their exposure to losses that would result from share price
decreases.
Other than noted above no terms of equity-settled share based payment transactions (including options granted as
compensation to a key management person or director) have been altered or modified by the Company during the reporting
period. No options have been exercised as a result of previously issued remunerations options.
(h) Other statutory information
The following tables show the relative proportions of remuneration that are linked to performance and those that are fixed
based on the amounts disclosed as statutory remuneration expense in (e) and (f) above.
(i) Proportions of remuneration linked to performance
Fixed
At risk STI
At risk LTI
Non-executive directors
Simon Higgins
Peter Torre
Rod Phillips
Peter Avery
John Dekker
Executive KMP
Adam Boyd
Andrew Vlahov
Stephen Jones
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
100%
-
100%
-
-
100%
-
100%
-
100%
73%
100%
-
84%
-
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27%
-
-
16%
-
-
12
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
(ii) Reconciliation of ordinary shares and options held by KMP
Shareholdings
The number of shares in the Company held during the financial year by each director and other key management personnel of the Group, including their personally related parties, are set out below.
Name
Non-executive directors
Simon Higgins
Peter Torre
Executive KMP
Adam Boyd
Balance at
start of the
year
Granted as
compensation
Acquired for
cash
Other
changes
-
-
-
-
-
-
775,000,000
25,000,000
710,000,000
Balance at the
end of the
year
-
-
-
775,000,000
25,000,000
710,000,000
Options
The number of options over ordinary shares in the Company held during the financial year by each director of the Company and other key management personnel of the Group, including their personally
related parties, are set out below:
Balance at start of year
Vested
Forfeited
Balance at end of year
Name
S Higgins
P Torre
A Boyd
Vested and
exercisable
-
-
-
Unvested
Granted as
compensation
-
-
350,000,000
-
-
-
Number
-
-
350,000,000
%
Exercised
Number
%
0%
0%
100%
-
-
-
-
-
-
Other
changes
Vested and
exercisable
-
-
350,000,000
-
-
-
0%
0%
0%
Unvested
-
-
-
(iii) Loans to key management personnel
During the year, there were no loans made to directors of the Company or any other key management personnel of the Group, including any related parties.
(iv) Other transactions with key management personnel
ECM Pty Ltd (ECM) is a related party of Mr Simon Higgins and during the year ECM entered into the following transactions with the Company:
• ECM Pty Ltd provided accounting and support services to the Group during the year, for which ECM was paid $90,000 (2016: Nil).
• During the period ECM paid DOCA related costs of $2,596,552 (2016: Nil) on behalf of the Company pursuant to the DOCA. $2,000,000 of this amount was converted to equity and the
remainder was repaid to ECM as part of the DOCA settlement.
•
The Group’s subsidiary EcoQuip Australia Pty Ltd entered into a contract with ECM, for the provision of construction services by ECM, prior to Volt taking control of EcoQuip, and at 31
December 2017 EcoQuip had an outstanding amount payable to ECM of $566,016.
13
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
(v) Reliance on external remuneration consultants
The Board have not sought any recommendations from external remuneration consultants. Remuneration levels for Directors
and KMP are reviewed annually by the Board with the level of Non-Executive Directors’ remuneration being set having regard
to independent survey data and publicly available information about fees paid to non-executive directors in a range of
comparable companies.
(vi) Voting of shareholders at last year's annual general meeting
Volt Power Group Limited received more than 95% of “yes” votes on its remuneration report for the 2016 financial year. The
company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
(vii) Remuneration received
The amounts disclosed in the table below as Executive KMP remuneration for the 2017 year reflect the actual benefits received
by each KMP during the reporting period. The remuneration values disclosed below have been determined as follows:
Fixed remuneration
Fixed remuneration includes base salaries received, payments made to superannuation funds, the taxable value of non-
monetary benefits received and any once-off payments such as sign-on bonuses or termination benefits.
Fixed remuneration excludes any accruals of annual or long service leave.
Short-term incentives
Cash STI benefits represent bonuses awarded and paid during the year. No cash STI’s were awarded during the year.
Long-term incentives
Vested LTI benefits represent the intrinsic value of the options at the date of vesting, being the difference between the share
price on that date and the exercise price payable by the KMP. No options vested during the year.
The information in this section has been audited, together with the rest of the Remuneration Report.
This is the end of the Remuneration Report
14. Shares under option
(a) Unissued ordinary shares
Unissued ordinary shares of Volt Power Group Limited under option at the date of this report are as follows:
Date options granted
24 May 2017
24 May 2017
9 November 2017
9 November 2017
Expiry date
23 May 2020
23 May 2021
8 November 2020
8 November 2021
Issue price of
options
0.0015
0.0020
0.0040
0.0045
Number under
option
175,000,000
175,000,000
20,000,000
20,000,000
No option holder has any right under the options to participate in any other share issue of the company or any other entity.
Included in these options were options granted as remuneration to the directors and the five most highly remunerated officers
during the year. Details of options granted to key management personnel are disclosed in the remuneration report above. In
addition, the following options were granted to officers who are among the five highest remunerated officers of the company
and the group, but are not key management persons and hence not disclosed in the remuneration report:
Name of Officer
Tim Banner – Lead Process Engineer
Tim Banner – Lead Process Engineer
Date granted
9 November 2017
9 November 2017
Issue price of
options
0.0040
0.0045
Number of options
granted
20,000,000
20,000,000
No options were granted to the directors or any of the five highest remunerated officers of the company since the end of the
financial year.
(b) Shares issued on the exercise of options
No shares were issued during the year ended 31 December 2017 on the exercise of options.
15. Insurance of officers
During the financial year, Volt Power Group Limited paid a premium to insure the directors and secretaries of the company
and its Australian-based controlled entities. The Group has not disclosed the premium paid for the insurance policy as there
is a confidentiality condition contained in the contract.
14
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred
by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a
wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for
themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premium between
amounts relating to the insurance against legal costs and those relating to other liabilities.
16. Proceedings on behalf of the Company
No person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
the Corporations Act 2001.
17. Non-audit services
The Company may decide to employ the auditor (BDO) on assignments additional to their statutory audit duties where the
auditor’s experience and expertise with the Company and/or the Group are important.
Details of amounts paid or payable to the auditor for non-audit services provided during the year are set out below:
Independent Experts Report
Total
2017
$
-
-
2016
$
19,933
19,933
The Board of Directors is satisfied that the provision of non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001.
18. Auditor's Independence Declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 16.
This report is made in accordance with a resolution of directors.
Simon Higgins
Chairman
Perth
Dated: 28 March 2018
15
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF VOLT POWER GROUP
LIMITED
As lead auditor of Volt Power Group Limited for the year ended 31 December 2017, I declare that, to
the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Volt Power Group Limited and the entities it controlled during the
period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth, 28 March 2018
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2017
Continuing operations
Other Income/(expenses)
Consultants and advisors
Employment benefits expense
General and administration expenses
Operating profit/(loss)
Finance income
Finance expenses
Finance costs – net
Profit/(loss) before income tax benefit/(expense)
Income tax benefit/(expense)
Profit/(loss) from continuing operations
Note
7
8
9
10
11
11
12
2017
$
3,913,910
(728,646)
(492,725)
(70,459)
2,622,080
3,840
(302)
3,538
2016
$
1,065,778
(2,208,067)
(331,221)
(624,941)
(2,098,451)
4,979
(454,711)
(449,732)
2,625,618
(2,548,183)
-
2,625,618
-
(2,548,183)
Other comprehensive profit for the year, net of tax
-
-
Total comprehensive profit/(loss) for the year
2,625,618
(2,548,183)
Profit/(loss) for the year is attributable to:
Owners of Volt Power Group Limited
Total comprehensive profit/(loss) for the year is attributable to:
Owners of Volt Power Group Limited
2,625,618
(2,548,183)
2,625,618
(2,548,183)
Earnings per share for loss from continuing operations
attributable to the ordinary equity holders of the company:
Basic profit/(loss) per share
Diluted profit/(loss) per share
26
26
cents
0.068
0.062
cents
(0.444)
(0.444)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
17
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Consolidated Statement of Financial Position
As at 31 December 2017
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments and other receivables
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Interest bearing loans and borrowings
Employee benefit liabilities
Other current liabilities
Current tax liabilities
Total current liabilities
Non-current liabilities
Interest bearing loans and borrowings
Total non-current liabilities
Total liabilities
Net assets/(liabilities)
Shareholders’ equity/(deficit)
Share capital
Reserves
Accumulated losses
Total attributable to owners of parent
Non-controlling Interest
Total shareholders’ equity/(deficit)
Note
2017
$
2016
$
13
14
15
16
17
18
19
20
21
22
23
24
2,988,650
553,690
58,183
3,600,523
626,402
679,195
12,654
200,000
1,518,251
250,926
220,700
32,412
504,038
11,721
-
-
-
11,721
5,118,774
515,759
1,362,426
208,395
33,783
-
37,063
1,641,667
292,285
292,285
5,691,687
305,679
33,523
239,315
-
6,270,204
-
-
1,933,952
6,270,204
3,184,822
(5,754,445)
25(a)
25(c)
67,964,945
5,946,446
(71,197,374)
2,714,017
470,805
3,184,822
62,214,945
5,853,602
(73,822,992)
(5,754,445)
-
(5,754,445)
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
18
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Consolidated Statement of Changes in Equity
As at 31 December 2017
At 1 January 2016
Total comprehensive profit/(loss) for the year
Loss for the year
Total comprehensive loss for the year
Transactions with owners in their capacity as owners
Equity-based payment transaction – expenses
Conversion of convertible notes
At 31 December 2016
At 1 January 2017
Total comprehensive profit/(loss) for the year
Profit for the year
Total comprehensive profit for the year
Transactions with owners in their capacity as owners
Contribution of equity, net of transaction costs
Equity-based payment transaction
Non-controlling interests on acquisition of subsidiary
At 31 December 2017
Attributable to owners of Volt Power Group Limited
Note
Share
capital
$
61,834,828
Reserves
$
5,884,340
Accumulated
losses
$
(71,274,809)
Total
attributable
to owners
of parent
$
(3,555,641)
-
-
-
-
(2,548,183)
(2,548,183)
(2,548,183)
(2,548,183)
25(b)
-
380,117
380,117
62,214,945
(30,738)
-
(30,738)
5,853,602
-
-
-
(73,822,992)
(30,738)
380,117
349,379
(5,754,445)
62,214,945
5,853,602
(73,822,992)
(5,754,445)
-
-
-
-
2,625,618
2,625,618
2,625,618
2,625,618
Non-
controlling
interest
$
-
-
-
-
-
-
-
-
-
-
25(a)
25(b)
5,750,000
-
-
5,750,000
67,964,945
-
92,844
-
92,844
5,946,446
-
-
-
-
(71,197,374)
5,750,000
92,844
-
5,842,844
2,714,017
-
-
470,805
470,805
470,805
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Total
equity
$
(3,555,641)
(2,548,183)
(2,548,183)
(30,738)
380,117
349,379
(5,754,445)
(5,754,445)
2,625,618
2,625,618
5,750,000
92,844
470,805
6,313,649
3,184,822
19
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Consolidated Statement of Cash Flows
As at 31 December 2017
Note
2017
$
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest paid
R&D tax refund
Income taxes received/(paid)
Net cash inflows/(outflows) from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payment for acquisition of subsidiary, net of cash acquired
Deposit payment for acquisition of subsidiary post balance date
Net cash outflows from investing activities
Cash flows from financing activities
Net proceeds from issue of shares and other equity securities
Proceeds from issue of convertible loans
Repayment of borrowings
Net cash inflows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at end of the year
13
13
1,062,600
(884,344)
3,843
(312)
-
(11,440)
170,347
-
27,689
(200,000)
(172,311)
3,725,288
-
(985,600)
2,739,688
2,737,724
250,926
2,988,650
2016
$
60,000
(1,743,300)
4,979
-
899,491
-
(778,830)
(2,005)
-
-
(2,005)
-
519,644
(100,000)
419,644
(361,191)
612,117
250,926
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
20
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Notes to the Consolidated Financial Statements
As at 31 December 2017
1. Reporting entity
The consolidated financial report of Volt Power Group Limited (the Group) and its subsidiaries for the year ended 31 December
2017 was authorised for issue in accordance with a resolution of directors on 28 March 2018.
Volt Power Group Limited is a for profit company limited by shares incorporated and domiciled in Australia whose shares are
publicly traded on the Australian Securities Exchange. The Group’s registered office is Unit B9, 431 Roberts Rd Subiaco WA
6008.
The nature of the operations and principal activities of the Group are power generation technology solutions, mobile solar
powerbox towers compatible with LED lighting, LTE/WiFi repeater communication solutions and CCTV retro-fit and sample
crushing equipment, all of which service the resources and construction sectors.
2. Basis of preparation
(a) General information
The financial report is a general purpose financial report, which:
•
•
•
•
•
has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards
and other authoritative pronouncements of the Australian Accounting Standards Board (“AASB”) and International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board as applicable to a for-
profit entity;
has been prepared on a historical cost basis;
is presented in Australian dollars, which is the functional currency of the Company and each of its subsidiaries;
adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to the
operations of the Group and effective for reporting periods beginning on or before 1 January 2017; and
does not early adopt any Accounting Standards and Interpretations that have been issued or amended but are not yet
effective.
(b) Incomplete financial information 31 December 2016
The 2016 Financial Report was prepared by Directors who were in office for the entire period presented in that report, however
their duties and responsibilities were suspended from the date the Company entered administration, 18 October 2016. For the
period in which the Company was in administration, until the effectuation of the DOCA in May 2017, the Directors did not have
oversight or control over the Group’s financial reporting systems, including (but not limited to) being able to obtain access to
complete accounting records of the Company. Every reasonable effort was made by the Directors to ascertain the true position
of the Company as at 31 December 2016, however the Directors are of the opinion that it is not possible to state that the 2016
comparative financial statements, and the gain on effectuation of the DOCA of $3,551,951 recognised in the Statement of
Profit or Loss for the year ended 31 December 2017, and accompanying notes were in accordance with the Corporations Act
2001.
(c) Going concern
The financial statements have been prepared on the going concern basis, which contemplates the continuity of normal
business activity and the realisation of assets and the settlement of liabilities in the normal course of business.
The Group made a comprehensive profit after tax for the year ended 31 December 2017 of $2,625,618 (2016: loss of
$2,548,183) and experienced net cash inflows from operating activities of $170,347 (2016: cash outflows of $778,830).
At 31 December 2017 the Group had cash and cash equivalents of $2,988,650 and a working capital excess of $1,958,856.
The Group has prepared cash flow forecasts for each of its businesses that indicate the Group has sufficient funding to support
its business activities without the need for additional funding.
Having regard to the matters set out above the Directors believe that at the date of signing the financial statements, there are
reasonable grounds to believe that the Group will be able to meet its obligations as and when they fall due.
21
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
3. Significant accounting policies
(a) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31
December 2017. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with
the investee and has the ability to affect those returns through its power over the investee. Generally, there is a presumption
that a majority of voting rights results in control.
Consolidation of the subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses
control over the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed during the year are
included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to
control the subsidiary.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent
accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and
profit and losses resulting from intra-group transactions have been eliminated.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the
Group and to the non-controlling interests, even if this results in the non-controlling interests having a debit balance.
(b) Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in a business
combination shall be measured at fair value, which shall be calculated as the sum of the acquisition date fair values of the
assets transferred by the acquirer, the liabilities incurred by the acquirer to former owners of the acquiree and the equity issued
by the acquirer. Acquisition-related costs are expensed as incurred.
(c) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in Australian dollars, which is the Group’s functional and presentational currency.
(ii) Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rate ruling at the
date of transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange
ruling at the reporting date. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally
recognised in profit or loss. They are deferred in equity if they relate to qualifying cashflow hedges and qualifying net
investment hedges or are attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss, within finance
costs. All other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis within other
income or other expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part
of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held
at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss and translation differences
on non-monetary assets such as equities classified as available-for-sale financial assets are recognised in other
comprehensive income.
(d) Financial instruments
(i) Non-derivative financial assets
The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial
assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the
Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers
the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and
rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or
retained by the Group is recognised as a separate asset or liability.
22
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only
when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and
settle the liability simultaneously.
The Group has the following non-derivative financial assets.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such
assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition
loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans
and receivables comprise trade and other receivables.
(ii) Non-derivative financial liabilities
The Group recognises financial liabilities (including liabilities designated at fair value through profit or loss) initially on the trade
date at which the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial
liability when its contractual obligations are discharged or cancelled or expire. Financial assets and liabilities are offset and
the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the
amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
The Group has non-derivative financial liabilities comprising trade and other payables and loans, which are recognised initially
at fair value and subsequently at amortised cost. Trade and other payables represent liabilities for goods and services provided
to the Group prior to the end of the financial year that are unpaid and arise when the Group has an obligation to make future
payments in respect of the purchase of these goods and services.
(iii) Convertible note liability
Convertible notes issued by the Group comprise convertible notes that can be converted to share capital at the option of the
holder and a convertible note derivative whose fair value changes with the Company’s underlying share price.
The liability component of a convertible note is recognised initially at the fair value of a similar liability that does not have an
equity conversion option. Any directly attributable transaction costs are allocated to the convertible note liability. Subsequent
to initial recognition, the liability component of the convertible note is measured at amortised cost using the effective interest
method.
The convertible note liability is removed from the statement of financial position when the obligations specified in the contract
are discharged. This can occur upon the option holder exercising their option or the option period lapses requiring the company
to discharge the obligation.
On initial recognition, the fair value of the convertible note will equate to the proceeds received and subsequently the liability
is measured at fair value at each reporting date until settlement. The fair value movements are recognised on the Consolidated
Statement of Profit or Loss as financial costs.
(e) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of
returns, trade allowances, rebates and amounts collected on behalf of third parties.
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic
benefits will flow to the entity and specific criteria have been met for each of the group’s activities. The group bases its
estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each
arrangement.
Income tax
(f)
Volt Power Group Limited and its 100% owned Australian resident subsidiaries formed a tax consolidated group with effect
from 19 January 2010.
Income tax expense comprises current and deferred tax. Current and deferred tax are recognised in profit or loss except to
the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following
temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that
23
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and associates and
jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred
tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured
at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority
on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis
or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that
it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed
at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Additional income tax expenses that arise from the distribution of cash dividends are recognised at the same time that the
liability to pay the related dividend is recognised. The Group does not distribute non-cash assets as dividends to its
shareholders.
(g) Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount
of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the
cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable
to, the ATO is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from
investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.
(h) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation the amount of
which at can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is
recognised as finance cost.
(i) Leases
Operating lease payments are recognised as an operating expense in the statement of profit or loss and other comprehensive
income on a straight-line basis over the lease term.
(j) Goodwill
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortised but it is tested for impairment
annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost
less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill
relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-
generating units or groups of cash-generating units that are expected to benefit from the business combination in which the
goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal
management purposes.
(k) Impairment
(i) Financial assets (including receivables)
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there
is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash
flows of that asset that can be estimated reliably.
Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a
debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a
debtor or issuer will enter bankruptcy or the disappearance of an active market for a security. In addition, for an investment in
an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.
24
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
The Group considers evidence of impairment for receivables at both a specific asset and collective level. All individually
significant receivables are assessed for specific impairment. All individually significant receivables found not to be specifically
impaired are then collectively assessed for any impairment that has been incurred but not yet identified.
In assessing the collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and
the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are
such that the actual losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its
carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest
rate. Losses are recognised in profit or loss and reflected in an allowance account against receivables. Interest on the impaired
asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of
impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet
available for use, the recoverable amount is estimated each year at the same time.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to
sell. 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. For the purpose
of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets
(the “cash-generating unit”). Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing,
CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest
level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated
to groups of CGUs that are expected to benefit from the synergies of the combination.
The Group’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be
impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to
reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets
in the unit (group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior
periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment
loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss
is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(l) Share based payments
The fair value of options issued as share-based payment are measured using an appropriate pricing model. Measurement
inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted
average historic volatility adjusted for changes expected due to publicly available information), weighted average expected
life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-
free interest rate (based on government bonds).
The fair value of shares issued as share-based payment is measured based on the share price on the date of issue.
4. Other accounting policies
Significant and other accounting policies that summarise the measurement basis used and are relevant to an understanding
of the financial statements are provided throughout the notes to the financial statements.
5. Key judgements and estimates
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements. Actual results may differ from these estimates under different assumptions and
conditions and may materially affect financial results or the financial position reported in future periods. Management have
identified the following critical accounting policies for which significant judgements, estimates and assumptions are made:
25
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
(i) Taxation
Judgement is required in assessing whether deferred tax assets and certain deferred tax liabilities are recognised in the
consolidated statement of financial position. Deferred tax assets, including those arising from unrecouped tax losses, capital
losses and temporary differences, are recognised only where it is considered more likely than not that they will be recovered,
which is dependent on the generation of sufficient future taxable profits.
Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows.
Judgements are also required about the application of income tax legislation. These judgements and assumptions are subject
to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact
the amount of deferred tax assets and deferred tax liabilities recognised in the statement of financial position and the amount
of other tax losses and temporary differences not yet recognised. In such circumstances, some or all of the carrying amounts
of recognised deferred tax assets and liabilities may require adjustments, resulting in a corresponding credit or charge to the
income statement.
(ii) Consolidation of EcoQuip
Judgement is required in assessing whether an investment is to be treated as a subsidiary or an associate. The Company
holds 50% of the ordinary shares and voting rights in EcoQuip Australia Pty Ltd. One other investor holds the remaining 50%.
Management has assessed its ownership of EcoQuip in accordance with AASB10 – Consolidated Financial Statements and
considers that EcoQuip is a subsidiary as it has a casting vote at Board Meetings.
(iii) Impairment
Judgement is required in assessing whether goodwill has suffered any impairment on an annual basis. In assessing
impairment, management estimates the recoverable amount of each asset or cash-generating unit based on expected future
cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating
results and the determination of a suitable discount rate. Refer to note 17(b).
6. Segment information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors of Volt Power Group Limited. The Group has determined
that it has one operating segment.
7. Other income/(expenses)
Profit or loss on sale of assets
Unrealised FX gains/losses
Research and development tax incentive rebate (a)
Profit on DOCA – Enerji Limited
Profit on DOCA – Enerji Holdings
Other income
(a) Research and development tax incentive rebate
Receipt of a R&D tax rebate
Total income tax benefit
Attributable to:
Continuing operations
2017
$
-
-
361,959
1,132,476
2,419,475
-
3,913,910
361,959
361,959
361,959
361,959
2016
$
(9,579)
115,866
899,491
-
-
60,000
1,065,778
899,491
899,491
899,491
899,491
Under the R&D tax incentive legislation, small companies can claim an R&D tax offset, under section 355-100 of the Income
Tax Assessment Act 1997 (ITAA97), that is, a refundable tax offset, equivalent to the value of certain deductions available
under the R&D tax incentive. For the 2016 year, total eligible R&D expenditure was $804,353 (2015: $1,998,868) therefore
R&D tax offset refund entitlement received for 2016 @ 45% was $361,959 (2015: $899,491).
26
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
8. Consultants and advisors
Accounting & finance
Advertising & marketing
Consultants and contractors
Listing expenses
Legal expenses
Administrator expenses
Other
9. Employee benefit expense
Salary and wages
Superannuation
Other
10. General and administration expenses
Occupancy Costs
Insurance
IT expenses
Travel & Accommodation
Depreciation & Amortisation
Other
11. Finance costs - net
Interest income
Interest expense
Bank charges
Establishment fees
FX gains/losses from borrowings
Total finance expenses
Finance costs- net
2017
$
159,380
450
-
508
292,085
276,223
-
728,646
2017
$
390,250
8,025
94,450
492,725
2016
$
73,861
83,265
1,136,405
365,466
222,113
300,737
26,220
2,208,067
2016
$
343,879
14,353
(27,011)
331,221
2017
$
2016
$
4,290
33,434
19,421
1,044
3,063
9,207
70,459
2017
$
3,840
3,840
-
302
-
-
302
3,538
36,317
12,412
17,861
57,263
3,981
497,107
624,941
2016
$
4,979
4,979
374,575
114
51,964
28,058
454,711
(449,732)
Recognition and measurement
Finance income comprises interest income on funds invested. Interest income is recognised as it accrues in profit or loss,
using the effective interest method.
Finance costs comprise interest expense on borrowings and convertible notes, unwinding of the discount on provisions, and
impairment losses recognised on financial assets. Borrowing costs that are not directly attributable to the acquisition,
construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.
Foreign currency gains and losses are reported on a net basis.
27
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
12. Income tax benefit
(a) Income tax benefit
2017
$
2016
$
Deferred tax credit arising from temporary differences
Total income tax benefit
Attributable to:
Continuing operations
-
-
-
-
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit/(loss) from continuing operations before income tax expense
Tax at the Australian tax rate of 27.5% (2016: 30.0%)
Tax effect of amounts which are not deductible/(taxable) in calculating
taxable income:
Non-assessable income
Deferred tax assets not brought to account
Income tax benefit
Reconciliation of deferred tax assets
Adjustment from prior year - tax benefit
Change in corporate tax rate from 30% to 27.5%
Tax loss benefit from current year
Change in tax loss benefit
2017
$
2,625,618
(722,045)
1,088,295
366,250
-
(19,137)
(470,610)
366,250
(123,497)
-
-
-
-
2016
$
(2,548,183)
764,455
-
764,455
-
-
-
-
-
The franking account balance at year-end was $nil (2016: nil).
Net deferred tax assets have not been brought to account as it is not probable within the immediate future that tax profits will
be available against which deductible temporary differences and tax losses can be utilised.
(c) Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 27.5% (2016: 30.0%)
2017
$
20,156,225
5,542,962
2016
$
18,888,197
5,666,459
All unused tax losses were incurred by Australian entities. Unrecognised deferred tax balances will only be available subject
to continuing to meet the relevant statutory tests.
13. Cash and cash equivalents
Cash at bank
2017
$
2,988,650
2016
$
250,926
(a) Reconciliation of profit/(loss) after income tax to net cash inflow from operating activities
Profit/(loss) for the year
Adjustments for
Depreciation and amortisation
Net (gain)/loss on sale of non-current assets
Gain on effectuation of DOCAs net of costs
Finance expense / (income)
Net exchange differences
Share-based payment transactions
Changes in operating assets and liabilities, net of effects from
purchase of controlled entity and reversal of amounts subject to the
deeds of company arrangement
2017
$
2,625,618
3,063
-
(3,551,951)
(3,840)
-
92,844
2016
$
(2,548,183)
3,980
9,579
-
426,540
(87,808)
(30,738)
28
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
(Increase)/decrease in trade & other receivables
(Increase)/decrease in prepayments
(Decrease)/Increase in trade & other payables
(Decrease)/Increase in employee benefit liability
(Decrease)/Increase in GST
(Decrease)/Increase in PAYG
(Decrease)/Increase in other current liabilities
(Decrease)/Increase in provision for income tax
Net cash inflow/(outflow) from operating activities
2017
$
(553,690)
(58,183)
1,478,062
33,783
39,156
20,342
-
45,143
170,347
2016
$
-
(32,412)
1,300,367
1,764
(33,835)
-
194,000
17,916
(778,830)
Recognition and measurement
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits
with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value, net of outstanding bank overdrafts.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined
above.
(b) Non-cash investing and financing activities
Acquisition of EcoQuip shares by issue of Volt shares (note 27)
Issue of shares on conversion of loan (note 32(c))
14. Trade and other receivables
Accounts receivable
Provision for doubtful debts
Bank guarantee
Other debtors
Impaired receivables and receivables past due
None of the current receivables are impaired.
15. Prepayments and other receivables
Prepaid insurance
Other prepayments
2017
$
150,000
2,000,000
2017
$
191,731
-
-
361,959
553,690
2016
$
-
-
2016
$
409,200
(409,200)
220,000
700
220,700
2017
$
58,183
-
58,183
2016
$
12,412
20,000
32,412
29
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
16. Property, plant and equipment
31 December 2016
Opening net book amount
Additions
Disposals
Impairment charge
Depreciation charge
31 December 2016
31 December 2016
Cost or fair value
Accumulated depreciation
Impairment of assets
Net book amount
31 December 2017
Opening net book amount
Additions
Disposals
Impairment charge
Depreciation charge
31 December 2017
31 December 2017
Cost or fair value
Accumulated depreciation
Impairment of assets
Net book amount
Plant and
equipment
$
Office
furniture,
fittings and
equipment
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
617,744
-
-
-
617,744
617,744
-
-
617,744
23,275
2,005
(9,579)
-
(3,980)
11,721
81,123
(69,402)
-
11,721
11,721
-
-
-
(3,063)
8,658
81,123
(72,465)
-
8,658
23,275
2,005
(9,579)
-
(3,980)
11,721
81,123
(69,402)
-
11,721
11,721
617,744
-
-
(3,063)
626,402
698,867
(72,465)
-
626,402
Recognition and measurement
Property, plant and equipment
All classes of property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated
impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing
the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the
plant and equipment as a replacement only if it is eligible for capitalisation. All other repairs and maintenance are recognised
in the income statement as incurred.
Depreciation is calculated on a straight-line basis on all classes of property, plant and equipment. The estimated useful life of
plant and equipment is between 3 and 20 years.
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial
year end.
An item of property, plant and equipment is de-recognised upon disposal or when no further future economic benefits are
expected from its use or disposal.
17. Intangible assets
(a) Goodwill
The movements in the net carrying amount of goodwill are as follows:
Balance 1 January
Acquired through business combination
Balance 31 December
2016
$
2017
$
-
679,195
679,195
-
-
-
30
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
(b) Impairment tests for goodwill
The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount of a CGU is
determined based on the higher of its value-in-use or fair value less costs to sell which require the use of assumptions. In
assessing the goodwill for impairment for the year ended 31 December 2017 the Group used a discounted cash flow model
in accordance with the fair value less costs to sell methodology (level 3 fair value hierarchy). The significant inputs and key
assumptions used by management within the discounted cash flow model are:
The cash flows for the first 18 months of the model is based on the 2018 budget as prepared by management
•
• Short term growth rate between 2% and 5%
• Capital outlay of 20% of EBITDA
• CPI inflation of 2%
• Pre-tax discount rate of 20% to calculate net present value
The Group has determined that there is no adjustment required to the carrying value of the assets in the current reporting
period.
Sensitivity of assumptions
The Directors and management have not identified any reasonable possible changes to key assumptions and significant inputs
noted above that could result in impairment for the CGU.
18. Deferred tax assets and liabilities
Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows:
Deferred tax liabilities / (assets)
Current assets
Prepayments
Current liabilities
Superannuation and other employee obligations
Net deferred tax assets
1 January
2016
$
Recognised
in business
combination
$
Recognised
in profit or
loss
$
31
December
2016
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Deferred tax liabilities / (assets)
Current assets
Prepayments
Current liabilities
Superannuation and other employee obligations
Net deferred tax assets
1 January
2017
$
Recognised
in business
combination
$
Recognised
in profit or
loss
$
31
December
2017
$
-
-
-
-
486
486
(13,140)
(12,654)
-
-
-
-
486
486
(13,140)
(12,654)
The deferred tax assets and liabilities are amounts in respect of the Group’s 50% owned subsidiary, EcoQuip Australia Pty
Ltd, which is not consolidated for income tax purposes. There are no deferred tax assets or liabilities for the Group companies
that are consolidated for income tax, as there are large tax losses that are not certain to be recovered in the near future.
19. Other Non-current assets
Deposit payment for acquisition of subsidiary post balance date
2017
$
200,000
200,000
2016
$
-
-
The Company paid a deposit of $200,000 for the acquisition of a subsidiary that was completed in January 2018.
31
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
20. Trade and other payables
Trade Creditors - Opcon AB
Trade Creditors
Accrued Expenses
GST
PAYG
Sundry Creditors
21. Interest bearing loans and borrowings
Convertible Notes
Non-bank loans
Finance leases
22. Employee benefit liabilities
FBT
Superannuation
Salary sacrifice
2017
$
-
512,061
650,867
39,156
20,342
140,000
1,362,426
2017
$
-
42,291
166,104
208,395
2017
$
-
33,783
-
33,783
2016
$
2,198,730
1,719,716
1,789,513
(94,302)
1,431
76,599
5,691,687
2016
$
305,679
-
-
305,679
2016
$
(4,872)
35,178
3,217
33,523
Note
28
Recognition and measurement
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and accumulating annual leave that are expected to be
settled wholly within 12 months after the end of the period in which the employees render the related service are recognised
in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid
when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the Statement of
Financial Position.
(ii) Other long-term employee benefit obligations
The liabilities for long term benefits is recognised and measured as the present value of expected future payments to be made
in respect of services provided by employees up to the end of the reporting period using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the end of the reporting period of government bonds with
terms and currencies that match, as closely as possible, the estimated future cash outflows.
The obligations are presented as current liabilities in the Statement of Financial Position if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual
settlement is expected to occur.
(iii) Termination benefits
Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility
of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide
termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary
redundancies are recognised as an expense if the Group has made an offer of voluntary redundancy, it is probable that the
offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months
after the reporting period, then they are discounted to their present value.
(iv) Share-based payment transactions
The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with
a corresponding increase in equity.
Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity
instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments
are obtained by the Group.
32
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
23. Other current liabilities
Non-bank loans
Convertible loan - default penalties and fees
Ames Associates - contribution to voluntary administration
24. Non-current liabilities
Finance leases
25. Equity
(a) Contributed equity
Fully paid ordinary shares
2017
$
-
-
-
-
2017
$
292,285
292,285
2016
$
100,000
45,315
94,000
239,315
2016
$
-
-
Note
28
No. of shares
2017
6,244,533,558
No. of shares
2016
594,533,558
$
2017
67,964,945
$
2016
62,214,945
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of any tax effects.
Ordinary shares have the right to receive dividends as declared and, in the event of the winding up of the Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares
held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
Capital Management
The Company’s capital management policy provides a framework to maintain a capital structure to support the development
of the business into one that is income producing.
The Company seeks to utilise available borrowing facilities when and to the extent prudent to do so, in order to maximise
returns for equity shareholders and limit the need to raise additional equity capital.
Dividends
There were no dividends declared or paid during the reporting period.
Movements in ordinary shares
Details
1 January 2016
Shares issued on conversion of notes
31 December 2016
Shares issued for cash
Shares issued on conversion of loan
Shares issued to purchase investment
31 December 2017
(b) Other equity
No. of options
2017
No. of options
2016
$0.30 expiry 30 June 2015
$2.00 expiry 31 December 2016
$0.0015 expiry 22 May 2020
$0.0020 expiry 22 May 2021
$0.0040 expiry 9 November 2020
$0.0045 expiry 9 November 2021
-
-
175,000,000
175,000,000
20,000,000
20,000,000
390,000,000
-
-
-
-
-
-
-
$
2017
838,364
1,545,238
57,635
30,909
2,373
1,927
2,476,446
No. of shares
$
574,130,854
20,402,704
594,533,558
3,600,000,000
2,000,000,000
50,000,000
6,244,533,558
61,834,828
380,117
62,214,945
3,600,000
2,000,000
150,000
67,964,945
$
2016
838,364
1,545,238
-
-
-
-
2,383,602
33
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Movements in other equity
$0.25 options expiry 2 September 2017
1 January 2016
Options forfeited during the year
31 December 2016
31 December 2017
$0.0015 options expiry 22 May 2020
1 January 2016
31 December 2016
Options issued
31 December 2017
$0.0020 options expiry 22 May 2021
1 January 2016
31 December 2016
Options issued
31 December 2017
$0.0040 options expiry 8 November 2020
1 January 2016
31 December 2016
Options issued
31 December 2017
$0.0045 options expiry 8 November 2021
1 January 2016
31 December 2016
Options issued
31 December 2017
$0.25 options expiry 2 September 2017
1 January 2016
Options forfeited during the year
31 December 2016
31 December 2017
(c) Reserves
Share based reserves - Reserve holding shares subject to the
achievement of performance based measures
Options based reserves
No. of options
$
7,500,000
(7,500,000)
-
-
-
-
175,000,000
175,000,000
-
-
175,000,000
175,000,000
-
-
20,000,000
20,000,000
-
-
20,000,000
20,000,000
No. of
performance
rights
17,500,000
(17,500,000)
-
-
2017
$
3,470,000
2,476,446
5,946,446
6,199
(6,199)
-
-
-
-
57,635
57,635
-
-
30,909
30,909
-
-
2,373
2,373
-
-
1,927
1,927
$
24,539
(24,539)
-
-
2016
$
3,470,000
2,383,602
5,853,602
Recognition and measurement
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
recognised directly in equity as a deduction, net of tax, from the proceeds.
26. Earnings/(loss) per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary
shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding adjusted for the effects of all dilutive potential
ordinary shares, which comprise convertible notes and share options granted to employees.
34
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
(a) Basic earnings per share
From continuing operations attributable to the ordinary equity holders of
the company
Total basic earnings per share attributable to the ordinary equity holders
of the company
(b) Diluted earnings per share
From continuing operations attributable to the ordinary equity holders of
the company
Total basic earnings per share attributable to the ordinary equity holders
of the company
(c) Reconciliation of earnings used in calculating earnings per share
Profit/(loss) attributable to the ordinary equity holders of the company used
in calculating basic earnings per share:
From continuing operations
Profit/(loss) attributable to the ordinary equity holders of the company used
in calculating diluted earnings per share:
From continuing operations
2017
cents
2016
cents
0.068
0.068
(0.444)
(0.444)
2017
cents
2016
cents
0.062
0.062
(0.444)
(0.444)
2017
$
2016
$
2,625,618
2,625,618
(2,548,183)
(2,548,183)
2017
$
2016
$
2,625,618
2,625,618
(2,548,183)
(2,548,183)
(d) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as denominator for
calculating basic profit/(loss) per share
Adjustments for calculation of diluted profit/(loss) per share:
Options
Weighted average number of ordinary shares and potential ordinary
shares used as the denominator in calculating diluted loss per share
2017
No. of shares
2016
No. of shares
3,863,848,626
574,277,437
350,000,000
-
4,213,848,626
574,277,437
(e) Information concerning the classification of securities
(i) Options
Options granted to employees are considered to be potential ordinary shares. They have been included in the determination
of diluted earnings per share to the extent to which they are dilutive. The 40,000,000 options granted on 9 November 2017
have not been included in the calculation of diluted earnings per share because they are antidilutive for the year ended 31
December 2017. These options could potentially dilute basic earnings per share in the future.
27. Acquisitions
On 21 December 2017 the Group acquired 50% of the equity instruments of EcoQuip Australia Pty Ltd (EcoQuip), a Perth
based business, and it was determined that Volt obtained ‘control’ of EcoQuip pursuant to AASB10 Consolidated Financial
Statements. The acquisition was made to enhance the Group’s position in the mining services sector giving the Group access
to additional services and customers.
The details of the business combination are as follows:
Fair value of consideration transferred
Amount settled in cash
Amount settled in equity
Total
$
1,000,000
150,000
1,150,000
35
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Recognised amounts of identifiable net assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total current assets
Property, plant and equipment
Deferred Tax Assets
Total non-current assets
Trade and other payables
Interest bearing loans and borrowings
Employee benefit liabilities
Director loans
Current tax liabilities
Total current liabilities
Interest bearing loans and borrowings
Total non-current liabilities
Identifiable net assets
Non-controlling interest
Goodwill on acquisition
Net assets acquired
Consideration transfer settled in cash
Cash and cash equivalents acquired
Net cash inflow on acquisition
Acquisition costs charged to expenses
Net cash paid relating to the acquisition
$
1,027,689
1,254,331
1,765
2,283,785
617,744
12,654
630,398
(1,222,666)
(323,530)
(26,466)
(70,563)
(37,063)
(1,680,288)
(292,285)
(292,285)
941,610
(470,805)
679,195
1,150,000
1,000,000
(1,027,689)
(27,689)
35,747
8,058
Consideration transferred
The acquisition of EcoQuip was settled by the issue of 50,000,000 Volt shares that were valued at $150,000, and the payment
of $1,000,000 cash for new shares in EcoQuip.
Identifiable net assets
The fair value of the trade and other receivables acquired as part of the business combination amounted to $1,254,331, which
is equal to the gross contractual amount.
Goodwill
Goodwill of $679,195 is primarily related to growth expectations, expected future profitability and expected cost synergies.
Goodwill has been allocated to cash-generating units at 31 December 2017. The goodwill that arose from this business
combination is not expected to be deductible for tax purposes.
EcoQuip’s contribution to the Group results
There was no profit contribution from EcoQuip as the acquisition was made 10 days prior to the end of the year. If EcoQuip
had been acquired on 1 January 2017, revenue for the Group for 2017 would have been $2,376,080, and profit would have
increased by $123,205.
Information not disclosed as not yet available
At the time the financial statements were authorised for issue, the Company had not yet finalised the completion statement
with the vendor, and the fair values of the assets and liabilities disclosed above have only been determined provisionally.
36
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
28. Leases
The Group’s subsidiary EcoQuip has various items of plant and equipment that are held under finance lease arrangements.
As at 31 December 2017, the net carrying amount held under finance lease arrangements is $458,389 (2016: Nil).
The Group’s finance lease liabilities, which are secured by the related assets held under finance leases, are classified as
follows:
Finance lease liabilities
Current:
Finance lease liabilities
Non-current:
Finance lease liabilities
2017
$
2016
$
166,104
292,285
Future minimum finance lease payments at the end of each reporting period under review were as follows:
Within 1 Year
$
1-5 years
$
After 5 years
$
Total
$
2016
Lease payments
Finance charges
Net present values
2017
Lease payments
Finance charges
Net present values
-
-
-
205,782
(39,678)
166,104
-
-
-
333,514
(41,229)
292,285
-
-
-
-
-
-
-
-
-
-
-
539,296
(80,907)
458,389
Leases under the terms of which the Group assumes substantially all the risks and rewards of ownership are classified as
finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the
present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance
with the accounting policy applicable to that asset.
Other leases are operating leases and are not recognised as assets in the Group’s statement of financial position.
29. Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
BDO
Audit and review of financial statements
Independent Experts Report
Review of 6 June financial report
Total remuneration for audit and other assurance services
Total remuneration of BDO
30. Contingencies
The Group has no contingent liabilities.
2017
$
2016
$
33,787
-
5,100
38,887
38,887
61,300
19,333
-
80,633
80,633
31. Commitments
(a) Non-cancellable operating leases
The Group leases office space from ECM in Henderson on a rolling one-month term, which commenced on 1 July 2017. The
Group leases a workshop and office, for its wholly owned subsidiary Wescone Distribution Pty Ltd, under non-cancellable
operating leases expiring within 3 years, with an option to extend the lease for a period of between 1 and 3 years. The option
for renewal includes a CPI increase in the rent.
37
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Commitments for minimum lease payments in relation to non-cancellable
operating leases are payable as follows:
Within one year
Later than one year but not later than five years
32. Related party transactions
(a) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Termination benefits
Share based payments
Detailed remuneration disclosures are provided in the remuneration report.
(b) Transactions with other related parties
The following transactions occurred with related parties:
Sales and purchases of goods and services
Purchase of investor relations services
Purchase of accounting support services during administration – ECM
Purchase of rent and administration support services – ECM
2017
$
2016
$
35,000
70,000
105,000
2017
$
299,973
-
-
88,544
388,517
-
-
-
2016
$
557,574
4,274
85,000
(30,738)
616,110
2017
$
2016
$
-
53,090
90,000
143,090
110,806
-
-
110,806
ECM Pty Ltd (ECM) is a related party of Mr Simon Higgins, who are paid for providing office rent and accounting and IT support
at a rate of $15,000 per month, which commenced on 1 July 2017. While the Company was in administration ECM provided
support services in relation to the effectuation of the DOCA at a cost of $53,090. The total amount invoiced by ECM for services
in the year is $143,090 (2016: nil). The total amount paid for these services in the year is $128,090 (2016: nil). The Group’s
subsidiary EcoQuip Australia Pty Ltd entered into a contract with ECM, for the provision of construction services by ECM, prior
to Volt taking control of EcoQuip, and at 31 December 2017 EcoQuip had an outstanding amount payable to ECM of $566,016.
(c) Loans to/from related parties
Beginning of the year
Loan repayments received
End of year
2017
$
-
-
-
2016
$
100,000
(100,000)
-
During the period ECM Pty Ltd paid DOCA related costs of $2,596,552 (2016: Nil) on behalf of the Company pursuant to the
DOCA. $2,000,000 of this amount was converted to equity and the remainder was repaid to ECM Pty Ltd as part of the DOCA
settlement.
33. Subsidiaries and transactions with non-controlling interests
Significant investments in subsidiaries during the year ended 31 December 2017 are set out below:
Name of entity
ATEN Operations Pty Ltd
Enerji Holdings Pty Ltd
Enerji Research Pty Ltd
Enerji PE Management Pty Ltd
Enerji GMRL SPV Pty Ltd
EcoQuip Australia Pty Ltd
Country
of
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Class
of
shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Equity
holding
2017
%
100
100
100
100
100
50
Equity
holding
2016
%
100
100
100
100
100
0
38
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
34. Events occurring after the reporting period
The following events have occurred subsequent to the reporting period ending:
(a) Acquisition of Wescone Distribution Pty Ltd
The acquisition of 100% of the issued shares of Wescone Distribution Pty Ltd (Wescone), a leading supplier of proprietary
sample crushing equipment to the global iron ore industry. Consideration for the purchase comprised a total of $4,750,000
cash, the issue of 100,000,000 Volt shares and the grant of a revenue royalty to the vendor (Wescone Acquisition). The
acquisition is expected to increase the Group’s exposure to the mining industry, giving the Group access to additional services
and customers.
The financial effects of this transaction have not been recognised at 31 December 2017. The operating results and assets
and liabilities of the acquired company will be consolidated from the date of acquisition.
Purchase consideration
(i)
Details of the consideration transferred and provisionally determined values of the assets and liabilities of Wescone as at the
date of acquisition are:
Fair value of consideration transferred
Amount settled in cash
Amount settled in equity
Total
Recognised amounts of identifiable net assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Property, plant and equipment
Other non-current assets
Total non-current assets
Trade and other payables
Interest bearing loans and borrowings
Total current liabilities
Interest bearing loans and borrowings
Total non-current liabilities
Identifiable net assets
Goodwill on acquisition
Net assets acquired
$
4,750,000
250,000
5,000,000
222,630
75,013
291,806
46,555
636,004
92,774
985
93,759
(142,743)
(37,285)
(180,028)
(1,045)
(1,045)
548,690
4,451,310
5,000,000
The goodwill is attributable to Wescone’s position and profitable trading in the mining services market, and the expected
increase in profitability with the change in Wescone’s business model from an equipment sale and service business model to
a recurring revenue ‘serviced equipment’ rental business model, and expanding the Wescone W300 crusher footprint into new
and existing customer project opportunities. None of the goodwill is expected to be deductible for tax purposes.
Contingent consideration
(ii)
The contingent consideration is a royalty arrangement pursuant to which the Wescone vendor has been granted:
•
•
a 25% royalty on all gross revenue received by Wescone exceeding $2 million per annum (Primary Royalty) expiring on
the earlier of total Primary Royalty payments reaching $6 million or the 10th anniversary of completion of the Wescone
Acquisition; and
a 2% royalty on all gross revenue received by Wescone exceeding $2 million per annum commencing on expiry of the
Primary Royalty and ceasing on the 15th anniversary of completion of the Wescone Acquisition.
Acquisition related costs
(iii)
Acquisition-related costs will be included in other expenses in profit or loss in the reporting period ending 31 December 2018.
Information not disclosed as not yet available
(iv)
At the time the financial statements were authorised for issue, the group had not yet completed the accounting for the
acquisition of Wescone. In particular, the fair values of the assets and liabilities disclosed above have only been determined
39
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
provisionally as the independent valuations have not been finalised. It is also not yet possible to provide detailed information
about each class of acquired receivables and any contingent liabilities of the acquired entity.
(b) Capital raising
To finance and complete the Wescone Acquisition, the Company successfully undertook a $4,750,000 capital raising (before
costs).
35. Share based payments
(a) Employee share scheme
A scheme under which shares may be issued by the Company to employees with an interest free loan for the purchase price
of the shares was approved by shareholders at a general meeting on 1 December 2009.
(b) Other share-based payments
Options were issued to the Managing Director on the following terms:
175,000,000 Options exercisable at 0.15 cents each and expiring 36 months after the date of issue (Tranche 1)
•
•
175,000,000 Options exercisable at 0.20 cents each and expiring 48 months after the date of issue (Tranche 2)
• Options issued to Mr Boyd will vest subject to him being continuously employed by the Group for a period of 12
months, in the case of Tranche 1 options, and for a period of 24 months in the case of Tranche 2 options.
Options were issued to an employee during the year on the following terms:
•
•
20,000,000 Options exercisable at 0.40 cents each and expiring 36 months after the date of issue (Tranche 3)
20,000,000 Options exercisable at 0.45 cents each and expiring 48 months after the date of issue (Tranche 4)
The Board has valued the options issued to employees and determined on the basis of the assumptions set out below the
technical value of the options as follows:
Exercise price
Underlying spot price
Dividend yield
Expected volatility
Risk free interest rate
Vesting period
Fair value per option
Options
Tranche 1
0.0015
0.001
0%
100%
1.95%
12 months
$0.00054
Options
Tranche 2
0.0020
0.001
0%
100%
1.95%
24 months
$0.00054
Options
Tranche 3
0.0040
0.003
0%
100%
1.95%
24 months
$0.00138
Options
Tranche 4
0.0045
0.003
0%
100%
1.95%
24 months
$0.00130
The number of Options over ordinary shares in the Company held during the financial year by each director and other members
of key management personnel of the Company, including their personally related parties is as set out below:
Vested
and
exercisable
Unv-
ested
Granted as
compen-
sation
Name
Exercised
Forfeited
Other
changes
Balance
at the
end of
the year
Vested
and
exercisable
Unv-
ested
Executive KMP
Adam
Boyd
350,000,000
- 350,000,000
-
-
- 350,000,000 350,000,000
-
(c) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit
expense were as follows:
Expense arising from equity-settled share based payment
transaction
Reversal of previously expensed share based payment
transaction
Total expense arising from share-based payment transactions
Note
25(b)
2017
$
2016
$
92,844
-
92,844
54,616
(85,354)
(30,738)
40
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
36. Financial instruments
Financial risk management policies
The Group financial instruments consist mainly of deposits with banks, accounts receivables and payables and domestic
loans.
The Board of Directors analyse financial risk exposure at Board Meetings to evaluate treasury management strategies in the
context of the most recent economic conditions and forecasts.
The Board’s overall risk management strategy seeks to assist the Group in meeting its financial targets, whilst minimizing
potential adverse effects on financial performance.
(a) Market risk
(i) Foreign exchange risk
At present the Group has no foreign exchange risk in respect of forecast sales and purchases. The Group also has no hedges
in place for its trade receivables and trade payables denominated in a foreign currency.
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily
with respect to the United States Dollar (USD).
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a
currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.
Management has set up a policy that all transactions in foreign currencies be transacted at spot. Management will continually
review this policy based on volumes of foreign currency required.
The Group’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollars, was as
follows:
Trade payables - Airec AB
Trade payables- Opcon AB
Convertible Notes- Magna
31 December 2017
EUR
SEK
USD
-
-
-
-
-
-
-
-
-
31 December 2016
EUR
45,697
SEK
-
- 2,243,231
-
-
USD
-
-
305,679
Amounts recognised in profit or loss and other comprehensive income
During the year, the following foreign-exchange related amounts were recognised in profit or loss and other comprehensive
income:
Amounts recognised in profit or loss
foreign exchange gain/(loss)
Net
income/other expenses
Total net foreign exchange gain/(loss) recognised in profit
before income tax for the period
Net gains/(loss) recognised in other comprehensive income
Loss/(gain) reclassified from other comprehensive income
in other
included
Note
7
2017
$
2016
$
-
-
-
-
115,866
115,866
-
-
Sensitivity
At the end of the year the Group had no exposure to changes in exchange rates. At the end of the previous year the Group
had exposure to changes in the SEK/$ exchange rates.
SEK/$ exchange rate- increase 10%
SEK/$ exchange rate- decrease 10%
2017
$
-
-
2016
$
(33,176)
34,208
(ii) Cash flow and fair value interest rate risk
The Group’s policy is to minimise interest rate cash flow risk exposures on long-term financing. Longer term borrowings are
therefore usually at fixed rates. The Group’s exposure to interest rate risk relate primarily to cash and cash equivalents. As at
31 December 2017, the Group has hire purchase financial liabilities that are at fixed rates and has no financial liabilities subject
to interest rate movements. The Group’s maximum exposure to interest rate risk at reporting date is shown below. As such,
sensitivity to interest rate risk is considered immaterial.
41
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Trade and other receivables - current
Cash and cash equivalents
Note
14
13
2017
$
553,690
2,988,650
3,542,340
2016
$
700
250,926
251,626
(b) Credit risk
Credit risk arises from cash and cash equivalents, held-to-maturity investments, favourable derivative financial instruments
and deposits with banks and financial institutions, as well as the credit exposures to wholesale and retail customers, including
outstanding receivables.
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum
exposure to credit risk at the reporting date was
Trade and other receivables - current
Cash and cash equivalents
Note
14
13
2017
$
553,690
2,988,650
3,542,340
2016
$
700
250,926
251,626
The Group manages credit risk through dealing with creditworthy counterparties and balances are monitored on an ongoing
basis. For bank and financial institutions, only independently rated parties with a minimum Standard & Poor’s credit rating of
A (or equivalent) are accepted.
In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any single
counterparty or any group of counter parties having similar characteristics. Trade receivables consist of blue chip companies
in mining and mining services industries. Management consider the credit quality of trade receivables that are not past due or
impaired to be good.
(c) Liquidity risk
The Group has limited exposure to liquidity risk as the Group’s main liabilities are trade and other payables and hire purchase
liabilities.
The Group considers expected cash flows from financial assets in assessing and managing liquidity risk, in particular its cash
resources and trade receivables. The Group’s existing cash resources and trade receivables (see Notes 13 and 14)
significantly exceed the current cash outflow requirements. Cash flows from trade and other receivables are all contractually
due within six months.
(d) Recognised fair value measurements
The net fair value and carrying amounts of financial assets and financial liabilities are disclosed in the Consolidated Statement
of Financial Position and in the Notes to the Consolidated Statement of Financial Position.
This note provides an update on the judgements and estimates made by the group in determining the fair values of the financial
instruments.
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the Statement of Financial Position have been analysed and classified
using a fair value hierarchy reflecting the significance of the inputs used in making the measurements.
Fair value hierarchy
The fair value hierarchy consists of the following levels:
• Quoted prices in active markets for identical assets and liabilities (Level 1);
•
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (Level 2); and
•
Inputs for the asset or liability that are not based on observable market date (unobservable inputs) (Level 3)
42
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
31 December 2016
Financial liabilities
Convertible loan
Total
31 December 2017
Financial liabilities
Convertible loan
Total
Note
Level 1
Level 2
Level 3
Total
21
21
-
-
-
-
-
-
-
-
305,679
305,679
305,679
305,679
-
-
-
-
There were no transfers between levels for recurring fair value measurements during the year. The group’s policy is to
recognize transfers into and transfers out of fair value hierarchy levels as at the end of the reporting date.
Level 1: the fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and
available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price
used for financial assets held by the Group is the current bid price. These instruments are included in level 1.
Level 2: the fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives)
is determined using valuation techniques which maximises the use of observable market data and rely as little as possible on
entity-specific estimates. If all significant inputs required to fair value an instrument is observable, the instrument is included
in level 2.
Level 3: if one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
This is the case for unlisted equity securities. The fair value of the convertible loan not traded in an active market is determined
using an internally prepared discounted cash flow valuation technique using observable imports (such as share price and the
terms and conditions of the convertible loan as disclosed in Note 21) and released of the initial calibration adjustment to the
profit or loss. At 31 December 2017, the fair value of the convertible note equates to its carrying (redemption) amount, as the
conversion option is out of the money.
Valuation techniques used to determine fair values
Specific valuation techniques used to value financial instruments include:
• Use of the quoted market prices or dealer quotes for similar instruments
•
The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on
observable yield curves
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet
date
The fair value of the remaining financial instruments as determined using discounted cash flow analysis
•
•
Capital management
The Board’s policy is to maintain a strong asset base so as to maintain investor, creditor and market confidence and to sustain
future development of the business. There were no changes in the Group’s approach to capital management during the year.
Neither the Group nor any of its subsidiaries is subject to externally imposed capital requirements.
37. Parent entity financial information
Statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net Assets
Shareholders’ equity/(deficit)
Issued Capital
Reserves
Retained losses
Total shareholders’ equity/(deficit)
Profit/(loss) for the year
Total comprehensive profit/(loss)
2017
$
1,632,378
1,358,658
2,991,036
(135,446)
(135,446)
2,855,590
68,104,943
5,946,446
(71,195,799)
2,855,590
227,266
227,266
2016
$
276,632
-
276,632
(3,631,153)
(3,631,153)
(3,354,521)
62,214,943
5,853,602
(71,423,066)
(3,354,521)
(2,276,497)
(2,276,497)
43
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
38. Accounting standards issued not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have
not been adopted by the Group for the annual reporting period ended 31 December 2017.
Standards Likely to Have a Financial Impact
Reference
AASB 9 Financial
Instruments
Summary
AASB 9 contains accounting requirement for financial instruments, replacing
AASB 139. The standard:
Application date
1 January 2018
(a) contains a simpler model for classification and measurement of financial
assets;
(b) a single, forward looking ‘expected loss’ impairment model that will require
more timely recognition of expected credit losses;
(c) a substantially reformed approach to hedge accounting including changes
treatment of hedging costs, risk
to hedge effectiveness
components that can be hedged and disclosures.
testing,
AASB 15
Revenue from
contracts with
customers
AASB 16 Leases
The Group has not yet completed its review of the application of this Standard.
The core principle of AASB 15 is that an entity recognises revenue to depict the
transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those
goods or services. An entity recognises revenue in accordance with that core
principle by applying the following steps:
Identify the contract(s) with a customer
Identify the performance obligations in the contract
Step 1
Step 2
Step 3 Determine the transaction price
Step 4 Allocate the transaction price to the performance obligations in the
contract
Step 5 Recognise revenue when (or as) the entity satisfies a performance
obligation
Guidance is provided on topics such as when revenue should be recognised,
accounting for variable consideration, costs of fulfilling and obtaining a contract
and various related matters. New disclosures about revenue are also
introduced.
The new revenue standard will supersede all current revenue recognition
requirements under IFRS. In particular, the standard replaces AASB 118
‘Revenue’ and AASB 11 ‘Construction Contracts’, upon which the Group’s
current revenue recognition policies are based. Either a full retrospective
application or a modified retrospective application is required for the reporting
period beginning on 1 January 2018. The Group is in the process of evaluating
which transition method will be applied.
The Group will continue to carry out a systematic review of the impact of AASB
15 on existing contracts and new contracts as they are awarded. The
quantitative impact of AASB 15 will not be reasonably estimable until the review
is completed. However, AASB 15 will have a material impact on the disclosures
required in the Group’s consolidated financial reports. A further update will be
provided as part of the 30 June 2018 interim financial reporting.
The key features of AASB 16 are as follows:
Lessee accounting
•
Lessees are required to recognise assets and liabilities for all leases with a
term of more than 12 months, unless the underlying asset is of low value.
• A lessee measures right-of-use assets similarly to other non-financial
assets and lease liabilities similarly to other financial liabilities.
• Assets and liabilities arising from a lease are initially measured on a present
value basis. The measurement includes non-cancellable lease payments
(including inflation-linked payments), and also includes payments to be
made in optional periods if the lessee is reasonably certain to exercise an
option to extend the lease, or not to exercise an option to terminate the
lease.
1 January 2018
1 January 2019
44
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Reference
Summary
Application date
• AASB 16 contains disclosure requirements for lessees.
Lessee accounting
• AASB 16 substantially carries forward the lessor accounting requirements
in AASB 117. Accordingly, a lessor continues to classify its leases as
operating leases or finance leases, and to account for those two types of
leases differently.
• AASB 16 also requires enhanced disclosures to be provided by lessors that
will improve information disclosed about a lessor’s risk exposure,
particularly to residual value risk.
As at the reporting date, the Group has no non-cancellable operating lease
commitments. The Group has not quantified the effect of the new standard,
however the potential impacts will include:
•
•
Total assets and liabilities on the Statement of Financial Position will
increase; and
Interest expense will increase due to the unwinding of the effective interest
rate implicit in the lease.
The Group has decided not to early adopt any of the new and amended pronouncements. The impact of the above-mentioned
standards and pronouncements is yet to be determined.
There are no other standards that are not yet effective and that would be expected to have material impact on the entity in the
current or future reporting periods and on foreseeable future transactions.
45
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Directors' declaration
In accordance with a resolution of the directors of Volt Power Group Limited, I state that:
1.
In the opinion of the directors:
(a) the financial statements and notes of Volt Power Group Limited for the financial year ended 31 December 2017 are in
accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2017 and of its
performance for the year ended on that date; and
(ii) complying with Accounting Standards and the Corporations Regulations 2001;
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note
2(a); and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
2. This declaration has been made after receiving the declarations required to be made to the directors by the chief executive
officer and chief financial officer in accordance with section 295A of the Corporations Act 2001 for the financial year
ended 31 December 2017.
On behalf of the board.
Simon Higgins
Chairman
Perth
28 March 2018
46
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Volt Power Group Limited
Report on the Audit of the Financial Report
Qualified opinion
We have audited the financial report of Volt Power Group Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 31 December 2017,
the consolidated statement of profit or loss and other 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 report, including a summary of significant accounting policies and the
directors’ declaration.
In our opinion, except for the effects of the matter described in the Basis for qualified opinion section
of our report, the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 31 December 2017 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for qualified opinion
Comparatives
Attention is drawn to the comparative figures in the consolidated statement of financial position at 31
December 2016. As stated in note 2(b) of the financial report, on the 18th October 2016, the Company
(Enerji Limited) was placed into Administration (subject to a Deed of Company Arrangement) and the
duties and responsibilities of the Directors were suspended from the date the Company entered into
Administration. For the period in which the Company was in Administration the Directors did not have
oversight or control over the Group’s financial reporting systems, including (but not limited to) being
able to obtain access to complete accounting records. As a result, we did not have access to the
complete books and financial records of the Group, and this caused us to disclaim our audit opinion on
the financial report for the year ended 31 December 2016. Our opinion on the current year’s financial
report is also modified because of the possible effect of this matter on the comparability of the current
period’s figures and the corresponding figures.
Current year 31 December 2017
Attention is also drawn to the gain on effectuation of the Deed of Company Arrangement of $3,551,951
recognised in the consolidated statement of profit or loss and other comprehensive income for the year
ended 31 December 2017. As a result of the matters outlined in the comparatives paragraph above, we
have not been able to obtain sufficient appropriate audit evidence to satisfy ourselves as to the
completeness of this amount. Our audit opinion has been modified accordingly.
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.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia.
We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our qualified opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Basis for qualified
opinion section, we have determined the matters described below to be the key audit matters to be
communicated in our report.
Accounting for Business Combinations
Key audit matter
How the matter was addressed in our audit
As disclosed in note 27 of the financial report, during the
Our procedures included, but were not limited to the
year the Group acquired 50% of the equity instruments of
following:
EcoQuip Australia Pty Ltd (EcoQuip) for a total consideration
(cid:127)
Reviewing the Sale and Purchase Agreement
of $1,150,000 (settled by the issue of shares valued at
and the Subscription Agreement to understand
$150,000 and cash payment of $1,000,000).
the key terms and conditions, and confirming
This is a key audit matter due to the size of the acquisition,
the complexities inherent in a business combination and the
significant judgements made by management, including the
identification and measurement of the fair value of assets
and liabilities acquired. Under Australian Accounting
Standards, management is required to identify all assets and
liabilities acquired and estimate the fair value of each item.
Any excess consideration that is not attributed to an asset
or liability is to be recognised as goodwill.
At 31 December 2017, the acquisition accounting for this
business is provisional and, in line with the Australian
Accounting Standards, the Group has up to 12 months from
the date of acquisition to finalise the accounting for these
acquisitions.
our understanding of the transaction with
management;
(cid:127)
Agreeing the purchase price to the acquisition
agreement and agreeing the cash consideration
paid to banking and accounting records, and
the shares consideration to the share price
used in the calculation to the ASX quoted share
price at acquisition date;
Obtaining an understanding of the transaction
including an assessment as to whether the
transaction constituted the acquisition of a
business or an asset acquisition;
Assessing management’s fair value estimation
of the fair value of the assets and liabilities
identified in the acquisitions, and comparing
the asset and liabilities recognised against the
Sale and Purchase Agreement and the
Subscription Agreement and the historical
financial information of the acquired business;
Testing the mathematical accuracy of the
calculation of the resultant goodwill; and
Assessing the appropriateness of the related
disclosures in Note 27 of the financial report.
(cid:127)
(cid:127)
(cid:127)
(cid:127)
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2017, but does not include
the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has 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.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Qualified Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 14 of the directors’ report for the
year ended 31 December 2017.
In our opinion, with the exception of those matters disclosed in the Basis of Qualified Opinion
paragraph, the Remuneration Report of Volt Power Group Limited, for the year ended 31 December
2017, complies with section 300A of the Corporations Act 2001.
Basis for Qualified Opinion
As stated in note 2(b) of the financial report, on 18 October 2016 the Company (Enerji Limited) was
placed into Administration and the Directors did not have control of the Company until control was
transferred to them on the effectuation of the Deed of Company Agreement (DOCA) on 19 May 2017.
For the period in which the Company was in Administration the Directors did not have oversight or
control over the Company’s financial reporting systems, including (but not limited to) being able to
access financial records that correctly record and explain the transactions included in the
Remuneration Report.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 28 March 2018
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Investor information
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this report is as
follows.
The information is current at 23 March 2018.
Distribution of equity securities
The number of shareholders, by size of holding, in each class of share are detailed below:
Category
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Unmarketable parcels
No. ordinary
shareholders
617
621
187
288
435
2,148
1,622
No. ordinary
shares
8,217,943,516
24,145,891
1,515,456
814,255
114,440
8,244,533,558
39,916,142
% of issued
capital
99.7%
0.3%
0.0%
0.0%
0.0%
100.0%
0.5%
Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
13
15
16
17
17
19
20
Name
ECM Pty Ltd
Mr Michael Campbell Hender
Renewable Initiative Pty Ltd
S & N Higgins Super Pty Ltd
Simon Higgins
AHB Super Pty Ltd
Hoodwinked Pty Ltd
Nireb Nominees Pty Ltd
Bouchi Pty Ltd
Darryl Peter Oldfield
Higgins Western Pty Ltd
Act6 Pty Ltd
Mark John Clark
Botsis Holdings Pty Ltd
Mr Gregory John Bittar
John Hender
Elecon International Pty Ltd
RT Weeks Super Pty Ltd
Mr Paul Alexander Everingham & Mrs Elissa Jean Everingham
Mr Carrick Durrant Ryan
Total
Balance of register
Grand total
No. ordinary
shares
2,000,000,000
660,000,000
589,500,000
428,000,000
345,000,000
320,000,000
200,000,000
150,000,000
115,000,000
110,000,000
109,000,000
100,000,000
100,000,000
97,037,796
92,500,000
88,000,000
82,000,000
80,000,000
71,998,159
68,592,088
5,806,628,043
2,437,905,515
8,244,533,558
% of issued
capital
24.3%
8.0%
7.2%
5.2%
4.2%
3.9%
2.4%
1.8%
1.4%
1.3%
1.3%
1.2%
1.2%
1.2%
1.1%
1.1%
1.0%
1.0%
0.9%
0.8%
70.4%
29.6%
100.0%
Substantial shareholders
The following shareholders have declared a relevant interest in the number of voting shares at the date of giving notice under
Part 6C.1 of the Corporations Act 2001.
Name
ECM Pty Ltd
Adam Boyd
No. ordinary
shares
3,665,000,000
910,000,000
% of issued
capital
44.5%
11.0%
Voting rights
Each ordinary shareholder present at a general meeting in person, by proxy or by representative is entitled to one vote on a
show of hands, or on a poll, one vote for each fully paid ordinary share subject to any voting restrictions that may apply.
51