VOLT POWER GROUP LIMITED
ABN 62 009 423 189
ANNUAL REPORT
For the year ended 31 December 2020
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Contents
Corporate Directory .................................................................................................................................................................... 3
Corporate Governance Statement ............................................................................................................................................. 4
Corporate and Operational Review ............................................................................................................................................ 4
Directors’ Report ........................................................................................................................................................................ 8
Auditors’ Independence Declaration ........................................................................................................................................ 18
Consolidated Statement of Profit or Loss and Other Comprehensive Income ........................................................................ 19
Consolidated Statement of Financial Position ......................................................................................................................... 20
Consolidated Statement of Changes in Equity ........................................................................................................................ 21
Consolidated Statement of Cash Flows ................................................................................................................................... 22
Notes to the Consolidated Financial Statements ..................................................................................................................... 23
Directors' Declaration ............................................................................................................................................................... 47
Independent Audit’s Report ..................................................................................................................................................... 48
Investor Information ................................................................................................................................................................. 52
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
Peter Torre
Principal place of business
63 Abernethy Road
Belmont WA 6104
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
Thomson Greer
Level 27, Exchange Tower
2 The Esplanade
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 2020 corporate governance statement is dated as at 26 February 2021 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 2020.
Summary
1.
(a) Operations
Corporate
The salient Corporate activities during the period included:
•
•
•
In March 2020, the Company subscribed for 1 new share at $50,000 per share in its 54% owned subsidiary EcoQuip
Australia Pty Limited and its controlled entities (EcoQuip). The $50,000 investment in EcoQuip increased the Company’s
ownership interest to 55%. In the period from July to October 2020, the Company subscribed for 22 new shares in
EcoQuip for $1,100,000. EcoQuip’s founder and minority shareholder subscribed for 2 new shares during the same
period for $87,500. This net change in the issued capital of EcoQuip increased the Company’s ownership interest to 67%
as at 31 December 2020. EcoQuip applied the new funding to the ongoing development of its “next generation” Mobile
Solar Light & Communications Tower solution and for working capital purposes.
The Company continued to pursue its previously advised WA Supreme Court Claim against the Wescone vendor for
misleading and deceptive conduct (Wescone Claim). The Wescone vendor failed to disclose to the Company that BHP
conducted a performance trial of the Wescone W300/3 crusher in 2015 (2015 BHP W300/3 Performance Trial). The 2015
BHP W300/3 Performance Trial crusher failed after only 6-weeks operation and at the time BHP advised Wescone that
the W300/3 was no longer a viable technical solution for BHP. Further, that it had commenced an evaluation process to
displace the Wescone W300 crusher with an alternative crushing solution.
In October 2020, the WA Supreme Court trial to hear the Wescone Claim (Trial) commenced with the initial 8-day trial
period (Initial Trial Period) completed. New trial dates were scheduled in January and February 2021 to complete the
Trial. After the Initial Trial Period, the parties agreed to undertake a third mediation process seeking to secure a
commercial settlement of the Wescone Claim. The scheduled January 2021 trial dates were vacated to facilitate
mediation negotiations. As at the date of this report the third mediation has failed to achieve a settlement solution.
In February 2021, the Company and Wescone vendor(s) agreed terms for the settlement of all outstanding claims in the
proceedings in connection with the Wescone Claim without admission of fault by any party. The terms of the settlement
provide for the payment to Volt of $1.3 million in two instalments (Settlement Sum). The first instalment was received by
Volt on 16 February 2021. The second and final instalment is to be paid no later than 19 August 2021. The Wescone
vendor has granted security in favour of Volt over two commercial properties to secure the second instalment. The
settlement arrangements also terminate the Wescone royalty agreement.
ATEN (100% owned)
The ATEN technology achievements during the period comprise:
•
•
During 2020, the Company continued extensive business development activity to promote the technical, commercial
and zero-emission benefits of the ATEN waste heat to power technology to major resource and electricity sector power
generation asset owners.
In April 2020, the Company secured arrangements with a significant resource sector business (Power Station Owner)
to complete Stage 1 of a two-stage feasibility study to install and ATEN Waste Heat to Power solution at an existing
power station located in Western Australia (WA ATEN Feasibility Study).
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
•
•
•
•
•
In July 2020, the Company completed and lodged an Australian Innovation Patent Application over unique design
innovations that comprise the ATEN Waste Heat to Power technology. In December 2020, the ATEN Innovation Patent
was granted after successfully navigating the examination and certification process.
In September 2020, the Company completed the Stage 1 WA ATEN Feasibility Study. The study was a comprehensive
body of engineering design, equipment selection, commercial delivery and performance due diligence & cost estimation
completed with the support of globally significant OEM equipment suppliers and Volt substantial shareholder and ATEN
EPC Contract delivery partner, GenusPlus Group (Genus).
The Stage 1 WA ATEN Feasibility Study results confirmed the technical and commercial value performance benefits of
the proposed WA ATEN project were compelling. The benefits include:
•
•
•
•
•
A 20% lower LCOE* than the variable cost of the existing gas fueled generation at a gas price of $4/GJ;
$44/MWh LCOE* which equates to a ~50% lower LCOE* than a generation equivalent 47MW Solar / 23MWh
Battery Energy Storage System (Solar / BESS);
62,500 tCO2 per annum abatement – at a LCOE* saving of $4.6 million per annum compared to a generation
equivalent Solar / BESS system;
Zero water and personnel attendance requirements; and
Hydrogen fuel co-firing compatibility.
The Power Station Owner reviewed the Stage 1 WA ATEN Feasibility Study. The parties continued to work closely to
clarify regulatory standard requirements and the scope & cost requirements for the completion of a Stage 2 WA ATEN
Feasibility Study capable of supporting final investment decision subject to the results of this ‘ Stage 2’ study.
The Company & Genus advanced our alliance arrangements for the EPC contract delivery of the ATEN Waste Heat to
Power projects by Genus. Genus is a national power and communications infrastructure construction & maintenance
group with ~500 employees. Genus is also a substantial shareholder of the Company (5.1%).
• We remain highly confident that the Company’s ATEN Waste Heat to Power technology is the lowest cost, zero emission
power generation solution available where an appropriate waste heat resource is available for exploitation.
•
The Company continues to engage with multiple potential customers promoting the significant baseload, zero emission,
lowest LCOE ¹ power generation opportunity ATEN Waste Heat to Power delivers.
¹ Levelised Cost of Energy (LCOE) is based on zero emission capacity and variable costs of hydrocarbon fueled
generation using ARENA LCOE calculation methodology @ 8% discount rate and 20-year project life
Wescone (100% owned)
Wescone salient activities and outcomes during the period comprised:
•
The Wescone business has achieved a significant increase in operating and cashflow performance during the period.
• Wescone is the owner of the proprietary and unique W300 sample crusher installed extensively in port loading and assays
system infrastructure utilized by the global iron industry and metallurgical laboratory sector.
•
•
In August 2020, Wescone secured a 5-year purchase service exchange & repair contract with BHP (BHP Goods
Contract). The BHP Goods Contract provides for the replacement of ~20 existing installed crushers with the new
Wescone W300 Series 4 crusher and the exclusive provision of ongoing repair / service exchange related service for 5-
years. This was an exceptional achievement during a difficult period for the Company.
The estimated new average annual sales revenue generated by the BHP Goods Contract over its 5-year term is forecast
at ~$1.4 million. Wescone is also in discussions with other parties for the supply and service of the Wescone W300 Series
4 crusher.
• During 2020, Wescone sold 8 new W300 Series 4 crushers to BHP and completed multiple crusher maintenance related
refurbishments for its Australian client base. This delivered Wescone an increase in sales revenues to ~$1.5 million
compared to ~$0.5 million during 2019. At the time of writing this report, Wescone has received a further 5 purchase
orders for the sale of Wescone W300 Series 4 crushers for delivery during Q1 and Q2 2021.
• Wescone anticipates further new Wescone W300 Series 4 crusher sales to BHP will occur in 2021.
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
•
•
•
The Wescone business is continuing to explore new growth opportunities into offshore markets through developing new
relationships and exclusive distribution arrangements.
Volt acquired the Wescone business in January 2018 from a private vendor. Wescone had successfully supplied
proprietary crushers to the iron ore industry for more than 20-years. On 4 January 2019, the Company announced that it
had filed a Writ against the vendor of Wescone (Wescone Vendor) seeking an order that the agreement providing for the
sale and purchase of Wescone is void by reason of misleading and deceptive conduct and further or alternatively,
damages for contravention of the Competition and Consumer Act 2010 (Cth) and breach of contract as well as interest
and costs (Wescone Claim). The Supreme Court trial commenced in October 2020.
In February 2021, the Company and the Wescone Vendor agreed terms for the settlement of all outstanding claims
alleged in proceedings in connection with the Company’s 2018 acquisition of the Wescone business (Settlement). The
Settlement terms provide for the payment to Volt of $1.3 million in two instalments (Settlement Sum). The first instalment
in the amount of $1.0 million was paid on 16 February 2021. The second and final instalment will be paid no later than
19 August 2021. The Wescone Vendor has granted a security over two commercial properties to secure the second
instalment.
EcoQuip Australia Pty Ltd (EcoQuip) (67% owned)
EcoQuip salient achievements and activities to the date of this report include:
•
•
•
•
•
•
•
•
•
EcoQuip has developed an innovative and market disruptive Mobile Solar Light Tower (MSLT) and Mobile Solar
Communications Tower (MSCT) solution with the reliability and power budget to out-perform and displace diesel fueled
light tower alternatives and provide “best in class” mobile Wi-Fi mesh network reinforcement for autonomous mining
systems respectively.
The use of MSLT / MSCT type equipment in the EcoQuip target resources and construction markets is extensive globally
with thousands of units deployed in Australia alone.
The EcoQuip MSLT is a disruptive, zero emission, zero OPEX, zero maintenance & zero refueling solution that provides
for Scope 1 emission reduction and a compelling cost / value proposition to potential customers. The EcoQuip revenue
model comprises a monthly rental tariff that is ~50% cheaper than the combined hire and OPEX costs of mobile diesel
fueled light towers.
The business achieved an average 55% utilization rate of its existing Mobile Solar Light / Communications Tower (MSLT
/ MCST) fleet.
During 2020, the Company increased its ownership of EcoQuip from 54% to 67% by providing $1.15 million in new equity
funding to the EcoQuip business for the finalization of the development of the new EcoQuip power management, data
and telemetry controller (EPMTC) and to part fund the manufacture of 20 new Mobile Solar Light Tower (MSLT) Gen4
units.
EcoQuip also completed the development of the new proprietary EPMTC and associated MSLT Gen4 design
modifications to significantly enhance charge efficiency, power budget reliability and performance, touch screen operator
interface, data capture and analytics, geo-fencing and sector control performance programming, cloud-based customer
remote control and information interface system and eliminating any requirement for operator presence other than fault
or deployment/recovery.
During 2020, two separate MSLT Gen4 hire trials were undertaken at the Chevron operated Gorgon LNG Project on
Barrow Island, WA. The initial trial which commenced in late 2019 was successfully completed. EcoQuip thereafter made
some site-specific modifications to the MSLT Gen4 and installed the new EPMTC on six MSLT Gen4 units that were
deployed in the second trial in December 2020. This trial is ongoing with all five MSLT Gen4 units deployed achieving
operational performance and power budget resilience beyond EcoQuip’s expectations. We are highly encouraged by
Chevron’s apparent industry leadership and commitment to Carbon Intensity reduction.
In July 2020 after the conclusion of the first MSCT Gen4 hire trial at the Chevron operated Gorgon LNG Project, EcoQuip
was awarded the 2020 Chevron Harry Butler Environment Award.
The 2019 MSCT Gen4 demonstration deployment with Thiess Contracting as part of an autonomous drilling system trial
with Caterpillar has continued with great success. The deployment has achieved outstanding performance with 100%
availability and reliability of all 4 MSCT Gen4 units deployed. During the deployment period of ~18 months all four units
deployed at Thiess Contracting operations have not required operator intervention other than for change of location.
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
•
•
•
The EcoQuip MSCT units hired by Thiess Contracting are providing mobile Wi-Fi mesh reinforcement / point to point
microwave and CCTV solution support. Thiess operational personnel have provided significant positive feedback with
respect to the reliable performance of the EcoQuip solution.
The BHP MSLT Gen4 trial located at the BHP Pilbara Iron Ore operations initiated in 2019 wrapped up after a 15-month
demonstration trial. The BHP operational personnel evaluation was completed with significant positive feedback. We
understand this positive feedback was provided to management. The Company is continuing to seek to work actively
with BHP to secure a BHP commitment to displace diesel fueled light towers with the EcoQuip MSLT Gen4.
In late 2020, The Australian Division of global power generation and energy equipment supplier, Aggreko Plc (Aggreko)
successfully completed a technical performance and reliability review of the EcoQuip MSLT Gen4. EcoQuip and Aggreko
are now working through the potential opportunity to work together to facilitate the accelerated deployment of the EcoQuip
MSLT Gen4.
• Various EoI submissions have been made to resource sector businesses for the supply of MSCT and MSLT solutions to
support mine site lighting, environmental monitoring and autonomous mining & drilling system infrastructure integration.
• During 2020, EcoQuip filed two provisional patent applications. The first provisional patent application covers a
mechanical innovation that achieves operational and safety enhanced performance of the new EcoQuip MSLT Gen4.
The second provisional patent application covers the recently completed EcoQuip power management, data and
telemetry controller (EPMTC). The EPMTC has multiple design features and innovations not historically applied to solar
light and communications tower systems.
(b) Financial performance and financial position
The financial results of the Group for the year ended 31 December 2020 are summarised as follows:
Revenue
Profit/(loss) for the period attributable to members
Profit/(loss) per share
Cash and cash equivalents
Net tangible assets per share
2020
$
1,882,665
(493,313)
(0.0054)
666,492
0.0002
2019
$
1,144,204
(1,874,882)
(0.0225)
1,287,705
0.0002
Change
%
65%
74%
76%
(48%)
-
As noted above, in August 2020, Wescone secured a 5-year purchase service exchange & repair contract with BHP (BHP
Goods Contract). The BHP Goods Contract provides for the replacement of ~20 existing installed crushers with the new
Wescone W300 Series 4 crusher and the exclusive provision of ongoing repair / service exchange related service for 5-years.
The estimated new average annual sales revenue generated by the BHP Goods Contract over its 5-year term is forecast at
~$1.4 million, which was the primary reason for the increase in revenue from the prior period.
The Group made a loss for the year of $493,313 (2019: loss of $1,874,882), experienced net cash inflows from operating
activities of $362,076 (2019: cash outflow of $31,743) and has a net asset balance of $2,180,485 (2019: $2,418,577).
The loss for the year ended 31 December 2019 included the following item of significance:
•
Impairment loss on Goodwill of $1,348,219.
The impairment loss on Goodwill for the year ended 31 December 2019 was considered by the Company and its auditors in
order to comply with the technical requirements of Accounting Standard AASB 136 – Impairment of Assets. The Goodwill
asset previously recorded on the Company’s balance sheet for Wescone ($784,828) and EcoQuip ($599,391) has been fully
impaired.
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Directors’ Report
For the year ended 31 December 2020
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 2020 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
Non-Executive Chairman
Chief Executive Officer and Managing Director
Non-Executive Director
2. Directors and officers
Simon Higgins – Non-Executive Chairman
Mr Higgins is currently the Chief Executive Officer and Managing Director of the ECM group of companies. ECM is a leading,
privately owned 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
Chairman of the board
Interests in shares and options
801,000,000 ordinary shares in Volt Power Group Limited
Nil options in Volt Power Group Limited
Adam Boyd – Chief Executive Officer and Managing Director
Mr Boyd 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 an 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
None.
Special responsibilities
None
Interests in shares and options
1,598,000,000 ordinary shares in Volt Power Group Limited
175,000,000 options in Volt Power Group Limited
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Peter Torre - Non-Executive Director and Company Secretary
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 is also the Company Secretary of the Company.
Other current and former directorships in last 3 years
Currently a director of Mineral Commodities Ltd, Connexion Telematics Ltd and VEEM Ltd. Was previously a director of
Zenith Energy Limited up until September 2020.
Special responsibilities
None
Interests in shares and options
55,000,000 ordinary shares in Volt Power Group Limited
Nil options in Volt Power Group Limited
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:
Name
Simon Higgins
Peter Torre
Adam Boyd
Meetings held
5
5
5
Meetings attended
5
5
5
The size of the Board assists in facilitating the frequent informal meetings of the directors to control, implement and monitor
the Company’s activities throughout the year. Furthermore, the Company’s CEO is in frequent discussions with the directors
relevant to the key business decision of the Company’s operations. Matters of Board business have been resolved by a
number of circular resolutions which are a record of decisions made at such informal meetings held throughout the year.
Principal activities
4.
The principal activities of the Group during the financial year were:
ATEN (100% owned)
•
•
•
Further development of the ATEN ’Waste Heat to Power” technology flowsheet design specifically for open cycle
turbine generation asset retro-fit to maximise baseload, zero emission electricity generation performance and reduce
capital installation and operating costs.
Extensive business development activities including site specific scoping studies aimed at securing commercial
arrangements to install the Company’s first ATEN ‘Waste Heat to Power’ facility in Australia.
Successfully completed Stage 1 of a proposed two stage Feasibility Study to install the ATEN Waste Heat to Power
solution at an existing power station located in Western Australia.
EcoQuip (67% owned)
•
•
•
•
The continued design development of a new innovative EcoQuip Mobile Solar Light & Communications Tower
solution incorporating robust design features including high quality solar / lithium battery power management system,
autonomous telemetry, control system and GPS capability (MSLT Gen4).
Deployment of the existing EcoQuip Mobile Solar Light Tower (MSLT) fleet to achieve maximum possible hire
utilisation for the period.
Completion of 20 new MSLT Gen4 units component manufactured in the USA and assembled in Australia.
Demonstration deployment of the EcoQuip MSLT & MSCT Gen4 to major potential users in the resources and
construction sectors.
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
•
Negotiation of commercial terms for the long-term deployment of EcoQuip MSLT & MSCT equipment in the
Australian market.
Wescone (100% owned)
•
•
•
•
•
The operation of the Wescone business – the owner of the Wescone W300 sample crusher predominantly deployed
throughout the global iron ore and assay laboratory industry.
Completion of manufacture of ~15 new Wescone W300 Series 4 sample crusher.
Negotiation of commercial terms for the deployment of the Wescone W300 Series 4 crushers
Actioning all matters required to prosecute the Company’s WA Supreme Court Claim against the Wescone vendor
and a related party for misleading and deceptive conduct seeking an order that the agreement providing for the sale
and purchase of Wescone is void by reason of misleading and deceptive conduct and further or alternatively,
damages for contravention of the Competition and Consumer Act 2010 (Cth) and breach of contract as well as
interest and costs (Wescone Claim).
Pursuit satisfactory commercial settlement of the Wescone Claim.
5. Dividends
There were no dividends paid or declared by the Company to members since the end of the previous financial year.
6. 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 – 7 of this annual report.
7. Use of cash and assets readily convertible to cash
The Group has used its cash and assets readily convertible to cash during the period in a way that was consistent with its
business objectives.
Significant changes in the state of affairs
8.
There are no significant changes in the state of affairs of the Group during the financial year.
Events since the end of the financial year
9.
In February 2021, the Company and the Wescone vendor reached commercial settlement of all outstanding claims alleged in
the proceedings in connection with the 2018 acquisition of Volt’s Wescone business without admission of liability by any party.
The settlement terms are confidential but provide for the payment to Volt of $1.3 million in two instalments (Settlement Sum).
The first instalment of $1.0 million was received by Volt on 16 February 2021. The second and final instalment will be paid no
later than 19 August 2021. The Wescone vendor has granted security over two commercial properties to secure the second
instalment.
The settlement arrangements also provide for the termination of a royalty agreement pursuant to which the Wescone vendor
was entitled to royalty payments above a specific revenue threshold.
There are no other events that occurred subsequent to the reporting period ending, that would have a material impact on the
financial statements as at 31 December 2020.
10. Likely developments and expected results of operations
The following events are likely to occur over the coming year:
•
•
•
Progress towards the installation of the first ATEN waste heat to power technology at a power station.
Expansion of the EcoQuip MSLT Gen4 fleet in both light and communications tower variants and deployment of an
expanded fleet in resource sector and construction markets in Australia and USA.
Continued repair and sale deployment of the proprietary Wescone W300 crusher in Australia and internationally.
11. 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.
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
12. 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 2020. 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 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
Executives
Mr Adam Boyd
Position
Term as KMP
Non-Executive Chairman
Non-Executive Director
Appointed 28 April 2017
Appointed 28 April 2017
CEO and Managing Director
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 Chairman 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 the
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.
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.
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VOLT POWER GROUP LIMITED
ABN 62 009 423 189
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
2020
(0.588)
0.003
-
(0.005)
Y/E
2019
(1.889)
0.001
-
(0.023)
Y/E
2018
(4.773)
0.002
-
(0.056)
Y/E1
2017
2.626
0.004
-
0.068
Y/E1
2016
(2.548)
0.005
-
(0.444)
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
In 2017, 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.
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 Options² exercisable at 0.15 cents each and expiring 36 months after the date of issue
(Tranche 1); and
b. 175,000,000 Options² exercisable at 0.20 cents each and expiring 48 months after the date of issue
(Tranche 2).
12
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
3.
In consideration for Mr Boyd agreeing to join the board of the Company, the Company will provide 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.
² The options have a vesting period of 12 months for Tranche 1 and 24 months for 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.
No fees were paid to Mr Boyd relating to the 12-month period ended 31 December 2020. However, on 22 May 2020, Mr Boyd
exercised 175,000,000 options at an exercise price of $0.0015 per option, which was offset against directors’ fees owing.
(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
Total executive
KMP
Salary &
fees
360,000
360,000
360,000
360,000
Year
2020
2019
2020
2019
Post
employ-
ment
benefits
-
-
-
-
Non-
mone-
tary
benefits
-
-
-
-
Termin-
ation
benefits
-
-
-
-
Rights
to
deferred
shares
-
-
-
-
Options
-
25,201
-
25,201
Total
360,000
385,201
360,000
385,201
Perform-
ance
related
-
7%
-
7%
(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 Mr Simon Higgins and Mr Peter Torre held the position of 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 excluding GST. This
equates to an annual fee of $50,000 excluding 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
appointment. The monthly fee payable is payable in arrears and will be initially set at $3,330 plus GST. This equates to
an annual fee of $39,960 plus GST, commencing 1 May 2017.
Details of the nature and amount of each major element of remuneration are set out below:
Simon Higgins
Peter Torre
Total non-executive directors
Year
2020
2019
2020
2019
2020
2019
Short-term
benefits
50,000
50,000
39,960
39,960
89,960
89,960
Post
employment
-
-
-
-
-
-
Total
50,000
50,000
39,960
39,960
89,960
89,960
13
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
(g) Share-based compensation
On 24 May 2017, 350,000,000 options were granted 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.
On 22 May 2020, Mr Boyd exercised 175,000,000 options at an exercise price of $0.0015 per option.
(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
Non-executive directors
Simon Higgins
Peter Torre
Executive KMP
Adam Boyd
Fixed
At risk STI
At risk LTI
2020
2019
2020
2019
2020
2019
100%
100%
100%
100%
93%
80%
-
-
-
-
-
-
-
-
-
-
-
7%
14
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
801,000,000
55,000,000
1,440,000,000
Granted as
compensation
Acquired for
cash
Options
exercised
Other
changes
Balance at the
end of the
year
-
-
-
-
-
-
-
-
-
-
801,000,000
55,000,000
175,000,000
(17,000,000)
1,598,000,000
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
-
-
350,000,000
Unvested
Granted as
compensation
-
-
-
-
-
-
Number
-
-
350,000,000
%
Exercised
Number
%
0%
0%
100%
-
-
(175,000,000)
-
-
-
Other
changes
Vested and
exercisable
-
-
175,000,000
-
-
-
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
There were no other transactions with key management personnel during the year.
15
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 99.58% of “yes” votes on its remuneration report for the 2019 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 2020 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
13. 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
9 November 2017
Expiry date
23 May 2021
8 November 2021
Issue price of
options
0.0020
0.0045
Number under
option
175,000,000
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
Date granted
9 November 2017
Issue price of
options
0.0045
Number of options
granted
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
175,000,000 shares were issued during the year ended 31 December 2020 on the exercise of options.
16
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Insurance of officers
14.
During the financial year, the Company 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.
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.
15. 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.
16. 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.
During the year ended 31 December 2020 and 2019, the Company did not pay the auditor for any non-audit services.
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.
17. 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 18.
This report is made in accordance with a resolution of directors.
Simon Higgins
Chairman
Perth
Dated: 26 February 2021
17
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 GLYN O'BRIEN TO THE DIRECTORS OF VOLT POWER GROUP
LIMITED
As lead auditor of Volt Power Group Limited for the year ended 31 December 2020, 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.
Glyn O’Brien
Director
BDO Audit (WA) Pty Ltd
Perth
26 February 2021
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.
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 2020
Revenue from trading activities
Cost of sales
Gross profit
Other income
Consultants and advisors
Employment benefits expense
General and administration expenses
Impairment of Goodwill
Operating loss
Finance income
Finance expenses
Finance costs - net
Loss before income tax expense
Income tax expense
Loss from continuing operations
Note
7
8
9
10
11
19
12
12
13
2020
$
1,882,665
(304,298)
1,578,367
2019
$
1,144,204
(276,625)
867,579
519,733
606,711
(1,044,930)
(1,083,873)
(413,599)
-
(444,302)
455
(20,042)
(19,587)
(437,640)
(1,068,376)
(435,489)
(1,348,219)
(1,815,434)
1,366
(25,074)
(23,708)
(463,889)
(1,839,142)
(124,203)
(588,092)
(49,794)
(1,888,936)
Other comprehensive income/(loss) for the year, net of tax
-
-
Total comprehensive loss for the year
(588,092)
(1,888,936)
Loss for the year is attributable to:
Minority interests
Owners of Volt Power Group Limited
Total comprehensive loss for the year is attributable to:
Minority interests
Owners of Volt Power Group Limited
(94,779)
(493,313)
(588,092)
(94,779)
(493,313)
(588,092)
(14,054)
(1,874,882)
(1,888,936)
(14,054)
(1,874,882)
(1,888,936)
cents
cents
Loss per share:
Basic loss for the period attributable to ordinary equity holders of the
parent
Loss per share from continuing operations:
Basic loss from continuing operations attributable to ordinary equity
holders of the parent
25(a)
(0.0054)
(0.0225)
25(a)
(0.0054)
(0.0225)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
19
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Consolidated Statement of Financial Position
As at 31 December 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventory
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Total non-current assets
Total assets
Liabilities
Current Liabilities
Trade and other payables
Employee benefits liability
Interest bearing loans
Total current liabilities
Non-current liabilities
Interest bearing loans
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ Equity
Share capital
Reserves
Retained losses
Total attributable to owners of parent
Non-controlling interest
Total Shareholders’ Equity
Note
2020
$
2019
$
14
15
16
17
18
19
20
21
22
23
13
666,492
147,183
307,520
65,403
1,186,598
1,649,290
727,751
2,377,041
1,287,705
140,321
367,254
78,487
1,873,767
1,060,346
269,470
1,329,816
3,563,639
3,203,583
1,100,284
43,183
111,921
1,255,388
33,697
94,069
127,766
1,383,154
512,515
57,416
100,130
670,061
114,945
-
114,945
785,006
2,180,485
2,418,577
24(a)
24(c)
33
73,782,092
5,873,546
(78,100,661)
1,554,977
625,508
2,180,485
73,519,592
6,060,365
(77,607,348)
1,972,609
445,968
2,418,577
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
20
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Consolidated Statement of Changes in Equity
As at 31 December 2020
At 1 January 2019
72,792,329
6,060,456
(75,732,466)
3,120,319
375,022
3,495,341
Attributable to owners of Volt Power Group Limited
Note
Share
capital
$
Reserves
$
Retained
losses
$
Total
attributable
to owners
$
Non-
controlling
interest
$
Total
equity
$
Total comprehensive loss for the year
Loss for the year
Transactions with owners in their capacity as owners
Transactions with non-controlling interests
Issue of shares, net of share issue costs
Share based payments
At 31 December 2019
At 1 January 2020
Total comprehensive loss for the year
Loss for the year
Transactions with owners in their capacity as owners
Transactions with non-controlling interests
Issue of shares on exercise of options
At 31 December 2020
-
-
-
-
(1,874,882)
(1,874,882)
(1,874,882)
(1,874,882)
(14,054)
(14,054)
(1,888,936)
(1,888,936)
24(a)
24(b)
-
727,263
-
727,263
73,519,592
(45,000)
-
44,909
(91)
6,060,365
-
-
-
-
(77,607,348)
(45,000)
727,263
44,909
727,172
1,972,609
85,000
-
-
85,000
445,968
40,000
727,263
44,909
812,172
2,418,577
73,519,592
6,060,365
(77,607,348)
1,972,609
445,968
2,418,577
-
-
-
-
(493,313)
(493,313)
(493,313)
(493,313)
(94,779)
(94,779)
(588,092)
(588,092)
33
24(a)
-
262,500
262,500
73,782,092
(186,819)
-
(186,819)
5,873,546
-
-
-
(78,100,661)
(186,819)
262,500
75,681
1,554,977
274,319
-
274,319
625,508
87,500
262,500
350,000
2,180,485
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
21
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Consolidated Statement of Cash Flows
For the year ended 31 December 2020
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services
tax)
Interest received
Interest paid
R&D tax refund
Income tax payment
Net cash inflows/(outflows) from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for Intellectual Property
Net cash outflows from investing activities
Cash flows from financing activities
Proceeds from issue of shares and other equity securities
Transaction costs on issue of shares
Repayment of borrowings
Transactions with non-controlling interests
Net cash (outflows)/inflows from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at end of the year
14
Note
2020
$
2019
$
2,064,069
1,353,122
14(a)
(2,259,064)
455
(18,272)
605,022
(30,134)
362,076
(487,941)
(395,217)
(883,158)
-
-
(100,131)
-
(100,131)
(621,213)
1,287,705
666,492
(1,923,553)
1,366
(25,074)
606,711
(44,315)
(31,743)
(328,126)
(236,502)
(564,628)
750,000
(22,737)
(116,849)
40,000
650,414
54,043
1,233,662
1,287,705
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
22
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Notes to the Consolidated Financial Statements
For the year ended 31 December 2020
1. Reporting entity
The consolidated financial report of Volt Power Group Limited (the Group) and its subsidiaries for the year ended 31 December
2020 was authorised for issue in accordance with a resolution of directors on 26 February 2021.
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 2020; and
does not early adopt any Accounting Standards and Interpretations that have been issued or amended but are not yet
effective.
(b) Going concern
For the year ended 31 December 2020, the Group recorded a net loss after tax of $588,092 (2019: $1,888,936) and had net
cash inflows from operating activities of $362,076 (2019: outflows of $31,743). As at 31 December 2020 the Group had cash
and cash equivalents of $666,492 (31 December 2019: $1,287,705 and a working capital deficit of $68,790 (31 December
2019: working capital excess of $1,203,706).
The Group’s ability to continue as a going concern is dependent upon its ability to generate cash flow through its business
operations and the ability to raise additional finance from debt or equity if and when required to contribute to the Group’s
working capital position. The Directors continue to be focused on meeting the Group’s business objectives and are mindful of
the funding requirements to meet these objectives.
In addition to the above, the World Health Organisation announced that the Coronavirus (COVID-19) had become a pandemic
on 11 March 2020. The impact of the COVID-19 pandemic is ongoing and whilst it has had no financial impacts for the Group
up to 31 December 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting date.
The situation is continually changing and is dependent on measures imposed by the Australian Government and other
countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that
may be provided. The full impact of COVID-19 and timing of easing of restrictions continues to evolve. At the reporting date,
it is uncertain what the effect will be on the Group and potentially it will have a post balance date impact. The Directors are
continuing to explore alternative options in an effort to mitigate the possible impacts of COVID-19.
These conditions indicate a material uncertainty that may cast significant doubt about the Group’s ability to continue as a
going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of
business.
Management believe there are sufficient funds to meet the Group’s working capital requirements as at the date of this report.
The financial statements have been prepared on the basis that the entity is a going concern, which contemplates the continuity
of normal business activity, realisation of assets and settlement of liabilities in the normal course of business for the following
reasons:
23
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
•
If required, the Board will seek to raise additional finance from debt or equity if and when required to contribute to the
Group’s working capital position in the near term;
• On 5 August 2020, the Company announced that BHP and Wescone had entered into a 5-year Purchase Service
Exchange Contract (BHP Contract). Under the BHP Contract, the BHP Iron Ore business will purchase ~20 new Wescone
W300 Series 4 crushers to displace their installed sample crusher fleet at BHP Iron Ore Pilbara located port, mine and
metallurgical laboratory infrastructure;
• The Group anticipates an R&D tax incentive receipt in the coming period; and
•
If required, the Board would implement relevant measures and scale back certain activities that are non-essential so as
to conserve cash.
Should the entity not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities
other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements and that
the financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts
or liabilities that might be necessary should the entity not continue as a going concern.
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 2020. 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.
24
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
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) Financial assets
The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the
asset was acquired. Other than financial assets in a qualifying hedging relationship, the Group's accounting policy for each
category is as follows:
Fair value through profit or loss
This category comprises in-the-money derivatives and out-of-money derivatives where the time value offsets the negative
intrinsic value (see "Financial liabilities" section for out-of-money derivatives classified as liabilities). They are carried in the
statement of financial position at fair value with changes in fair value recognised in the consolidated statement of
comprehensive income in the finance income or expense line. Other than derivative financial instruments which are not
designated as hedging instruments, the Group does not have any assets held for trading nor does it voluntarily classify any
financial assets as being at fair value through profit or loss.
Amortised cost
These assets arise principally from the provision of goods and services to customers (e.g. trade receivables), but also
incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows
and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus
transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using
the effective interest rate method, less provision for impairment.
Impairment provisions for current and non-current trade receivables are recognised based on the simplified approach within
IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability
of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss
arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are
reported net, such provisions are recorded in a separate provision account with the loss being recognised within cost of sales
in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the
gross carrying value of the asset is written off against the associated provision.
Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-
looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether
there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk
has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with
gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses
along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected
credit losses along with interest income on a net basis are recognised.
From time to time, the Group elects to renegotiate the terms of trade receivables due from customers with which it has
previously had a good trading history. Such renegotiations will lead to changes in the timing of payments rather than changes
to the amounts owed and, in consequence, the new expected cash flows are discounted at the original effective interest rate
and any resulting difference to the carrying value is recognised in the consolidated statement of comprehensive income
(operating profit).
The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents
in the consolidated statement of financial position.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid investments
with original maturities of three months or less, and, for the purpose of the statement of cash flows, bank overdrafts. Bank
overdrafts are shown within loans and borrowings in current liabilities on the consolidated statement of financial position.
(ii) Financial liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was
acquired.
25
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Other than financial liabilities in a qualifying hedging relationship (see below), the Group's accounting policy for each category
is as follows:
Fair value through profit or loss
This category comprises out-of-the-money derivatives where the time value does not offset the negative intrinsic value (see
"Financial assets" for in-the-money derivatives and out-of-money derivatives where the time value offsets the negative intrinsic
value). They are carried in the consolidated statement of financial position at fair value with changes in fair value recognised
in the consolidated statement of comprehensive income. The Group does not hold or issue derivative instruments for
speculative purposes, but for hedging purposes. Other than these derivative financial instruments, the Group does not have
any liabilities held for trading nor has it designated any financial liabilities as being at fair value through profit or loss.
Other financial liabilities
Other financial liabilities include the following items:
Bank borrowings, where applicable, are initially recognised at fair value net of any transaction costs directly attributable to the
issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost using the effective
interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance
of the liability carried in the consolidated statement of financial position. For the purposes of each financial liability, interest
expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable
while the liability is outstanding.
Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried
at amortised cost using the effective interest method.
(iii) Hedge accounting
The Group has note applied hedge accounting.
(e) Revenue recognition
Performance obligations and timing of revenue recognition
The majority of the Group’s revenue is derived from leasing equipment and selling goods with revenue recognised at a point
in time when control of the goods has transferred to the customer. This is generally when the goods are delivered to the
customer. However, for export sales, control might also be transferred when delivered either to the port of departure or port
of arrival, depending on the specific terms of the contract with a customer. There is limited judgement needed in identifying
the point control passes: once physical delivery of the products to the agreed location has occurred, the group no longer has
physical possession, usually will have a present right to payment (as a single payment on delivery) and retains none of the
significant risks and rewards of the goods in question.
Determining the transaction price
Most of the Group’s revenue is derived from fixed price contracts and therefore the amount of revenue to be earned from each
contract is determined by reference to those fixed prices.
Allocating amounts to performance obligations
For most contracts, there is a fixed unit price for each product sold, with reductions given for bulk orders placed at a specific
time. Therefore, there is no judgement involved in allocating the contract price to each unit ordered in such contracts (it is the
total contract price divided by the number of units ordered).
Where a customer orders more than one product line, the Group is able to determine the split of the total contract price
between each product line by reference to each product’s standalone selling prices (all product lines are capable of being,
and are, sold separately). Therefore, there is no judgement involved in determining the contract price.
(f) R&D Rebate and Government Grants
Government Grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be
received and the Group will comply with all attached conditions. The Group received the following government grants:
(a) Research and development tax incentives received or receivable are recognised at fair value where there is a
reasonable assurance that the amount will be received and the Group will comply with all attached conditions. The
value of the research and development tax incentive received or receivable income is presented as part of profit or
loss as other income.
(b) JobKeeper Payment scheme and ATO Cash flow boost received have no unfulfilled conditions or other
contingencies attaching to these grants. Grants related to income are presented as part of profit or loss as other
income.
26
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
The Group did not benefit directly from any other forms of government assistance.
(g) Income tax
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
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.
(h) 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.
(i) 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.
(j) Leases
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
•
•
Leases of low value assets; and
Leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the
discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily
determinable, in which case the group’s incremental borrowing rate on commencement of the lease is used. Variable lease
payments are only included in the measurement of the lease liability if they depend on an index or rate.
27
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout
the lease term. Other variable lease payments are expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also includes:
•
•
•
Amounts expected to be payable under any residual value guarantee;
The exercise price of any purchase option granted in favour of the group if it is reasonable certain to assess that option;
Any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination
option being exercised.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and
increased for:
•
•
•
Lease payments made at or before commencement of the lease;
Initial direct costs incurred; and
The amount of any provision recognised where the group is contractually required to dismantle, remove or restore the
leased asset (typically leasehold dilapidations).
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the
remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the
lease term.
When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a lessee
extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the payments to
make over the revised term, which are discounted using a revised discount rate. The carrying value of lease liabilities is
similarly revised when the variable element of future lease payments dependent on a rate or index is revised, except the
discount rate remains unchanged. In both cases an equivalent adjustment is made to the carrying value of the right-of-use
asset, with the revised carrying amount being amortised over the remaining (revised) lease term. If the carrying amount of the
right-of-use asset is adjusted to zero, any further reduction is recognised in profit or loss.
(k) Inventory
Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable value. Cost
comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter
being allocated based on normal operating capacity. Costs are assigned to individual items of inventory based on weighted
average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is
the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs
necessary to make the sale inventories are valued at the lower of cost and net realisable value.
(l) 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.
(m) Intangible assets
Intangible assets acquired are initially recognised at cost. Indefinite life intangible assets are not amortised and are
subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less
amortisation and impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible assets
are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset.
The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of
consumption or useful life are accounted for prospectively by changing the amortisation method or period.
28
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally-generated
intangible asset arising from development (including those arising from the development phase of an internal project) are
capitalised when it is probable that the project will be a success considering its commercial and technical feasibility; the Group
can use or sell the asset; the Group has sufficient resources, and intend to complete the internal development and their costs
can be measured reliably
The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the date
when the intangible asset first meets the recognition criteria listed above. Where no internally generated intangible asset can
be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred. After initial
recognition, internally generated intangible assets are reported at cost less accumulated amortisation and accumulated
impairment losses, on the same basis as intangible assets that are acquired separately.
Capitalised development costs are amortised on a straight-line or diminishing value method over the period of their expected
benefit, being their finite useful lives of three to five years.
(n) 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.
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 the expected credit loss (ECL) model to recognise an allowance in
accordance with AASB 9. For trade receivables, the Group uses the simplified approach of the ECL model to determine the
allowance.
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.
29
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
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.
(o) 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:
(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 67% (31 December 2019: 54%) of the ordinary shares and voting rights in EcoQuip Australia Pty Ltd. One other investor
holds the remaining 33% (31 December 2019: 46%). 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 to determine when intangible assets are available for use and also whether the assets have suffered
impairment. In assessing impairment, management estimates the recoverable amount of each asset and/or cash-generating
unit based on the higher of fair value less cost of disposal or value in use (using expected future cash flows). Estimation
uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate. Refer to
note 19(b).
(iv) Internally generated intangible assets (Development costs)
Expenditure on internally developed products is capitalised if it can be demonstrated that:
30
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
•
•
•
•
It is technically feasible to develop the product for it to be rented;
Adequate resources are available to complete the development;
There is an intention to complete the product and to obtain future economic benefits through the Rental Revenue
generated from Rental of the Gen4 Light Towers; and
Expenditure on the product can be measured reliably.
Capitalised development costs are amortised over the periods the Group expects to benefit from selling the products
developed only once the asset is ready for use. The amortisation expense is included within the cost of sales line in the
consolidated statement of comprehensive income. Development expenditure not satisfying the above criteria and expenditure
on the research phase of internal projects are recognised in the consolidated statement of comprehensive income as incurred.
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 the Company. The Group has determined that it has one
operating segment.
7. Revenue from trading activities
2020
$
2019
$
Revenue from sales of inventory
Revenue from equipment leases
Revenue from other sales
Timing of revenue recognition
At a point in time
Over time
8. Other income
Research and development tax incentive rebate
Government incentives and subsidies
Other income
9. Consultants and advisors
Audit, Tax, Accounting and Finance
Legal expenses
10. Employee benefit expense
Salary and wages
Superannuation
Share based payments
Other
1,464,223
350,880
67,562
1,882,665
1,464,223
418,442
1,882,665
2020
$
358,625
161,108
-
519,733
2020
$
275,471
769,459
1,044,930
2020
$
1,055,538
26,372
-
1,963
1,083,873
772,910
371,294
-
1,144,204
772,910
371,294
1,144,204
2019
$
604,101
-
2,610
606,711
2019
$
263,369
174,271
437,640
2019
$
967,185
40,843
44,909
15,439
1,068,376
31
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
11. General and administration expenses
Occupancy Costs
Insurance
IT Expenses
Travel & Accommodation
Depreciation & Amortisation
Foreign currency (gains)/losses
Other expense
12. Finance costs - net
Interest income
Bank fees
Interest expense
Finance expense
2020
$
25,519
62,465
4,417
7,967
148,820
(12,470)
176,881
413,599
2020
$
455
455
3,218
16,824
20,042
(19,587)
2019
$
75,935
54,492
6,075
52,509
137,144
(208)
109,542
435,489
2019
$
1,366
1,366
3,850
21,224
25,074
(23,708)
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.
13. Income tax
(a) Income tax (expense)/benefit
Current tax expense
Deferred tax (expense)/credit arising from temporary differences
Total income tax (expense)/benefit
Attributable to:
Continuing operations
2020
$
(30,134)
(94,069)
(124,203)
(124,203)
(124,203)
2019
$
(44,315)
(5,479)
(49,794)
(49,794)
(49,794)
32
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Tax at the Australian tax rate of 26% (prior year 27.5%)
Tax effect of amounts which are not deductible/(taxable) in calculating
taxable income:
Non-deductible expenses
R&D related expenditure
Previously recognised deferred tax assets not brought to account
Deferred tax (liabilities)/assets not brought to account
Income tax (expense)/benefit
The franking account balance at year-end was $nil (2019: nil).
2020
$
(463,889)
120,611
65,158
(119,153)
(45,950)
(140,869)
(124,203)
2019
$
(1,839,142)
505,764
(271,814)
(5,479)
(278,265)
(49,794)
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) Deferred tax assets and liabilities
Deferred tax assets
Tax losses
Other timing differences
Deferred tax liabilities
Intangible assets
Other timing differences
Net deferred tax liability
(d) Tax losses
2020
$
106,663
853
107,516
(197,015)
(4,570)
(201,585)
(201,585)
2020
$
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 26% (prior year 27.5%)
18,609,179
4,838,386
2019
$
18,653,724
5,129,774
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.
14. Cash and cash equivalents
Cash at bank
2020
$
2019
$
666,492
1,287,705
33
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
(a) Reconciliation of loss after income tax to net cash outflow from operating activities
Loss for the year
Adjustments for
Depreciation and amortisation
Impairment of goodwill
NCI conversion of debt to equity
Foreign exchange movements
Options exercised
R&D rebate
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
(Increase)/decrease in trade and other receivables
(Increase)/decrease in Inventory
(Decrease)/Increase in trade and other payables
(Decrease)/Increase in employee benefit liability
(Decrease)/Increase in deferred tax liabilities
Net cash inflow/(outflow) from operating activities
2020
$
2019
$
(588,092)
(1,888,936)
148,820
-
87,500
7,103
262,500
85,289
-
55,692
59,734
147,498
1,963
94,069
362,076
137,144
1,348,219
-
-
-
-
44,909
120,910
(21,114)
211,685
15,440
-
(31,743)
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) Reconciliation of cash and non-cash movements in financial liabilities
Cash and cash equivalents
Borrowings repayable within one year
Borrowings repayable after one year
Cash and liquid assets
Gross Debt - Fixed interest rate
15. Trade and other receivables
Accounts receivable
Other debtors
Note
22
23
2020
$
666,492
(111,921)
(33,697)
520,874
666,492
(145,618)
520,874
2020
$
134,785
12,398
147,183
Impaired receivables and receivables past due
The Group applied ECL to calculate losses. These were found to be immaterial.
2019
$
1,287,705
(100,130)
(114,945)
1,072,630
1,287,705
(215,075)
1,072,630
2019
$
127,923
12,398
140,321
34
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
16. Inventory
Completed goods and parts on hand
307,520
367,254
2020
$
2019
$
17. Other current assets
Prepaid insurance
Other prepayments
18. Property, plant and equipment
31 December 2019
Opening net book amount
Additions
Depreciation charge
31 December 2019
31 December 2019
Cost or fair value
Accumulated depreciation
Net book amount
31 December 2020
Opening net book amount
Additions
Depreciation charge
31 December 2020
31 December 2020
Cost or fair value
Accumulated depreciation
Net book amount
2020
$
65,403
-
65,403
Office
furniture,
fittings and
equipment
$
3,201
-
(1,603)
1,598
18,703
(17,105)
1,598
1,598
-
(438)
1,160
18,703
(17,543)
1,160
2019
$
76,722
1,765
78,487
Total
$
899,195
298,295
(137,144)
1,060,346
2,004,812
(944,466)
1,060,346
1,060,346
748,714
(148,820)
1,660,240
2,742,576
(1,093,286)
1,649,290
Plant and
equipment
$
895,994
298,295
(135,541)
1,058,748
1,986,109
(927,361)
1,058,748
1,058,748
748,714
(148,382)
1,659,080
2,723,873
(1,075,743)
1,648,130
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 or diminishing value basis for 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.
35
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
19. Intangible assets
31 December 2019
Opening balance
Capitalised expenditure
Impairment charge
31 December 2019
31 December 2020
Opening balance
Capitalised expenditure
Impairment charge
31 December 2020
(a) Goodwill
Goodwill
$
1,348,219
-
(1,348,219)
-
-
-
-
-
The Group has determined the cash generating units to be as follows:
• Wescone Distribution Pty Ltd
• Ecoquip Australia Pty Ltd
The movements in the net carrying amount of goodwill are as follows:
31 December 2019
Opening balance
Impairment charge
31 December 2019
31 December 2020
Opening balance
Impairment charge
31 December 2020
Wescone
$
748,828
(748,828)
-
-
-
-
Intellectual
property
$
-
269,470
-
269,470
269,470
458,281
-
727,751
EcoQuip
$
599,391
(599,391)
-
-
-
-
Total
$
1,348,219
269,470
(1,348,219)
269,470
269,470
458,281
-
727,751
Total
$
1,348,219
(1,348,219)
-
-
-
-
(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 2019 the Group used a discounted cash flow model
in accordance with the value-in-use (VIU) method, which reflect the present value of the future cash flows expenditure to be
derived from the CGU. The significant inputs and key assumptions used by management within the discounted cash flow
model for both CGUs are:
Ecoquip Australia Pty Ltd:
The cash flows for the first 18 months of the model is based on the 2020 budget as prepared by management
•
• Short term growth rate of 1%
• CPI inflation of 2%
• Pre-tax discount rate of 20% to calculate net present value
Wescone Distribution Pty Ltd:
The cash flows for the first 18 months of the model is based on the 2020 budget as prepared by management
•
• Pre-tax discount rate of 20% to calculate net present value
The Group has determined that there is an impairment to the carrying value of both the EcoQuip and Wescone goodwill in the
prior reporting period.
36
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Sensitivity of assumptions
Ecoquip Australia Pty Ltd:
The Directors and management have performed a sensitivity analysis of the discount rate applied and as a result of the
analysis performed recognised an impairment loss of $599,391 for the year ended 31 December 2019.
Wescone Distribution Pty Ltd:
The Directors and management have performed a sensitivity analysis of the discount rate applied and as a result of the
analysis performed recognised an impairment loss of $748,828 for the year ended 31 December 2019.
(c) Intellectual property
Intellectual property includes capitalised development costs associated with the design and development of the MSLT
Generation 4 (Gen4) trailer power management, operational control and data telemetry system, designed, built and owned by
EcoQuip Australia Pty Ltd and is to be amortised over a five-year period. As at 31 December 2020 the intellectual property
was not yet deemed as ready for use and as such had not commenced amortisation. Consequently, the Company was required
to assess the capitalised intellectual property by comparing its carrying amount with its recoverable amount for the allocable
assets and liabilities identified within the EcoQuip Cash Generating Unit (“CGU”). The Company has considered valuation
methodologies allowable by the accounting standards and have deemed fair value less cost of disposal to be the most
appropriate basis of assessment. The Company has used Level 3 unobservable inputs in determining the fair value less cost
of disposal of the EcoQuip CGU. The assessment included using the capital raising prices between willing market participants
on an arm’s length basis which occurred during the year.
20. Trade and other payables
Trade Creditors
Accrued Expenses
GST
PAYG
FBT
Sundry Creditors
21. Employee benefit liabilities
Employee Entitlements
Superannuation
2020
$
1,060,247
41,690
(21,889)
17,850
-
2,386
1,100,284
2020
$
32,069
11,114
43,183
2019
$
407,313
87,500
(16,974)
13,531
14,400
6,745
512,515
2019
$
30,106
27,310
57,416
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.
37
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
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.
22. Interest bearing loans and borrowings – current liabilities
Non-bank loans
Finance leases
Note
27
23. Interest bearing loans and borrowings – non-current liabilities
Non-bank loans
Finance leases
24. Equity
(a) Contributed equity
Note
27
2020
$
30,674
81,247
111,921
2020
$
-
33,697
33,697
2019
$
-
100,130
100,130
2019
$
-
114,945
114,945
2020
No. of shares
2019
No. of shares
2020
$
2019
$
Fully paid ordinary shares
9,169,533,558
8,994,533,558
73,782,092
73,519,592
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.
38
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
Movements in ordinary shares
Details
1 January 2019
Share placement
Transaction costs
31 December 2019
Exercise of options
31 December 2020
(b) Other equity
No. of shares
8,244,533,558
750,000,000
-
8,994,533,558
$
72,792,329
750,000
(22,737)
73,519,592
175,000,000
262,500
9,169,533,558
73,782,092
2020
No. of options
2019
No. of options
2020
$
$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
-
20,000,000
195,000,000
175,000,000
175,000,000
20,000,000
20,000,000
390,000,000
-
-
-
-
-
Movements in other equity
There were no movements in other equity during the financial year ending 31 December 2020.
2019
$
-
25,201
10,166
9,542
44,909
(c) Reserves
Share based reserves - Reserve holding shares subject to the
achievement of performance-based measures
Options based reserves
Non-controlling interest reserve
2020
$
3,470,000
2,635,365
(231,819)
5,873,546
2019
$
3,470,000
2,635,365
(45,000)
6,060,365
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.
25. 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.
(a) Basic earnings/(loss) 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
2020
cents
(0.0054)
(0.0054)
2019
cents
(0.0225)
(0.0225)
39
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
(b) 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
26. Acquisitions
(a) Acquisition of Wescone Distribution Pty Ltd
2020
$
2019
$
(493,313)
(1,874,882)
On 23 January 2018 the Group acquired 100% of the equity instruments of Wescone Distribution Pty Ltd (Wescone), a Perth
based business, and it was determined that Volt obtained ‘control’ of Wescone pursuant to AASB 10 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
Completion working capital adjustment
Total
Recognised amounts of identifiable net assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Current tax asset
Total current assets
Property, plant and equipment
Deferred Tax Assets
Total non-current assets
Trade and other payables
Employee entitlements
Interest bearing loans and borrowings
Total current liabilities
Interest bearing loans and borrowings
Total non-current liabilities
Identifiable net assets
Goodwill on Acquisition
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
$
4,750,000
250,000
(12,398)
4,987,602
222,629
58,166
491,806
266
10,908
783,775
158,361
-
158,361
(149,813)
(40,925)
(37,285)
(228,023)
(1,045)
(1,045)
713,068
4,274,534
(4,750,000)
(222,629)
(4,527,371)
73,497
4,600,868
The goodwill on acquisition was attributable to Wescone’s position and profitable trading in the mining services market.
Due to the suspension of a service agreement with a key customer, management conducted a review of the carrying value of
goodwill on acquisition. Based on an assessment of the loss of profitability from suspension of these arrangements and the
requirements of AASB 136 Impairment of Assets, the group determined that it incurred an impairment expense of $3,525,706
in the December 2018 financial year.
Furthermore, the group recognised a further impairment loss on Goodwill of $1,348,219 during the year ended 31 December
2019. Therefore, the Wescone Goodwill acquired as part of the Wescone acquisition of $4,274,534 has now been fully
impaired. The Company’s Board considers that this impairment loss and damage suffered by the Company is a direct result
of BHP considering that the Wescone W300/3 crusher was no longer a technically viable solution for BHP.
40
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
This factual and material circumstance was not communicated to the Company by the Wescone vendor during the due
diligence period or prior to the acquisition of Wescone by the Company.
Contingent consideration
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.
-
In February 2021, The Company and the Wescone vendor reached a commercial settlement of all outstanding claims alleged
in proceedings in connection with the 2018 acquisition of the Wescone business. The settlement terms included the immediate
termination of the Wescone royalty agreement.
27. Leases
The Group’s has various items of plant and equipment that are held under finance lease arrangements. As at 31 December
2020, the net carrying amount held under finance lease arrangements is $114,944 (2019: $215,075).
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
2020
$
81,247
33,697
Future minimum finance lease payments at the end of each reporting period under review were as follows:
2019
Lease payments
Finance charges
Net present values
2020
Lease payments
Finance charges
Net present values
Within 1 Year
$
1-5 years
$
After 5 years
$
112,571
(12,441)
100,130
86,742
(5,495)
81,247
122,056
(7,111)
114,945
35,314
(1,617)
33,697
-
-
-
-
-
-
2019
$
100,130
114,945
Total
$
234,627
(19,552)
215,075
122,056
(7,112)
114,944
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.
28. 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
Total remuneration for audit and other assurance services
Total remuneration of BDO
2020
$
50,000
50,000
50,000
2019
$
53,000
53,000
53,000
41
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
29. Contingencies
Contingent consideration
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.
During February 2021, this royalty agreement was terminated pursuant to a commercial settlement arrangement agreed
between the parties to it.
The Group has no contingent liabilities as at 31 December 2020.
30. Commitments
(a) Non-cancellable operating leases
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. The Group has applied practical expedients in accordance with AASB 16 –
Leases and as such, as the lease has a term of less than 12 months remaining, no right of use asset or lease liability has
been accounted for.
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
31. Related party transactions
(a) Key management personnel compensation
Short-term employee 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:
Purchases:
Purchases of goods and services – EC&M Ltd
Purchase of rent and administration support services – EC&M Ltd
2020
$
34,992
-
34,992
2020
$
449,960
-
449,960
2020
$
-
-
-
2019
$
34,992
-
34,992
2019
$
449,960
25,201
475,161
2019
$
-
90,679
90,679
ECM Pty Ltd (ECM) is a related party of Mr Simon Higgins and during the year ending 31 December 2019, ECM entered into
the following transactions with the Company:
•
•
•
•
ECM provided office rent, accounting, tax and IT support at a rate of $15,000 per month (excl. GST).
The Group’s subsidiary EcoQuip Australia Pty Ltd entered into a contract with ECM, for the provision of office space at
a rental of $3,583 per month (excl. GST).
On a Consolidated level, payments to ECM totalled $90,679 for the year ended 31 December 2019.
Both of the above arrangements with ECM ceased in August 2019.
42
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
During the year ended 31 December 2020, the Company acquired a motor vehicle off ECM for $34,000 (plus GST).
There were no transactions with other related parties during the year ended 31 December 2020.
32. Subsidiaries and transactions with non-controlling interests
Significant investments in subsidiaries during the year ended 31 December 2020 are set out below:
Country
of
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Class
Of
Shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Equity
holding
2020
%
100
100
100
100
100
100
67
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
Wescone Distribution Pty Ltd
EcoQuip Australia Pty Ltd
33. Non-controlling interests
(a) Ecoquip summarised balance sheet
Current assets
Current liabilities
Current net (liabilities)/assets
Non-current assets
Non-current liabilities
Non-current net assets
Net assets
Non-controlling interest
Accumulated non-controlling interest
(b) Ecoquip summarised statement of comprehensive income
Revenue
Loss for the period
Other comprehensive income
Total comprehensive loss
Non-controlling interest
Loss attributable to non-controlling interest
(c) Ecoquip summarised cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase/ (decrease) in cash and cash equivalents
Equity
holding
2019
%
100
100
100
100
100
100
54
2019
$
149,745
(296,707)
(146,962)
1,231,403
(114,946)
1,116,457
969,495
46%
445,968
2019
$
460,383
(30,552)
-
(30,552)
46%
(14,054)
2019
$
232,597
(564,628)
(64,834)
(396,865)
43
2020
$
294,503
(643,560)
(349,057)
2,278,234
(33,698)
2,244,536
1,895,479
33%
625,508
2020
$
362,911
(287,209)
-
(287,209)
33%
(94,779)
2020
$
114,059
67,991
(83,875)
98,175
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
34. Events occurring after the reporting period
In February 2021, the Company and the Wescone vendor reached commercial settlement of all outstanding claims alleged in
the proceedings in connection with the 2018 acquisition of Volt’s Wescone business without admission of liability by any party.
The settlement terms are confidential but provide for the payment to Volt of $1.3 million in two instalments (Settlement Sum).
The first instalment of $1.0 million was received by Volt on 16 February 2021. The second and final instalment will be paid no
later than 19 August 2021. The Wescone vendor has granted security over two commercial properties to secure the second
instalment.
The settlement arrangements also provide for the termination of a royalty agreement pursuant to which the Wescone vendor
was entitled to royalty payments above a specific revenue threshold.
There are no other events that occurred subsequent to the reporting period ending, that would have a material impact on the
financial statements as at 31 December 2020.
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
No Options were granted in the year ended 31 December 2020.
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
Exercised
Forfeited
Other
changes
Balance
at the
end of
the year
Vested
and
exercisable
Unv-
ested
350,000,000
-
-
(175,000,000)
-
-
175,000,000
175,000,000
-
Name
Executive KMP
Adam Boyd
(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
Total expense arising from share-based payment transactions
2020
$
-
-
2019
$
44,909
44,909
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.
44
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
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.
(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 2020, 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.
Cash and cash equivalents
Trade and other receivables - current
Note
14
15
2020
$
666,492
147,183
813,675
2019
$
1,287,705
140,321
1,428,026
(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
Cash and cash equivalents
Trade and other receivables - current
Note
14
15
2020
$
666,492
147,183
813,675
2019
$
1,287,705
140,321
1,428,026
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 include 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 14 and 15)
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.
45
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
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)
As at 31 December 2020 and 31 December 2019, the carrying amount of assets and liabilities approximate their fair values.
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.
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
Issued capital
Reserves
Accumulated losses
Total shareholders’ equity
Loss for the year
Total comprehensive loss
2020
$
190,379
2,557,135
2,747,514
(567,029)
(567,029)
2,180,485
73,782,092
6,105,365
(77,706,972)
2,180,485
(95,582)
(95,582)
2019
$
947,704
1,589,542
2,537,246
(523,679)
(523,679)
2,013,567
73,519,592
6,105,365
(77,611,390)
2,013,567
(676,492)
(676,492)
46
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 2020 are in
accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 31 December 2020 and of its
performance for the year ended on that date; and
complying with Accounting Standards and the Corporations Regulations 2001;
(b)
(c)
2.
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note
2(a); and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
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 2020.
On behalf of the board.
Simon Higgins
Chairman
Perth
26 February 2021
47
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
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 2020,
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 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 2020 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 opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We 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 opinion.
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.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current 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 Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Capitalisation of Intangible Assets
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 19 of the financial report, the
Our procedures included, but were not limited to the
Group has recognised an Intangible Asset in relation to
following:
the development of its Intellectual Property.
•
Holding discussions with management to
The capitalisation of these internally generated
understand the nature and feasibility of its
development costs is a key audit matter due to the
intellectual property as at 31 December 2020;
significance of the costs capitalised and the specific
criteria that are required to be met for capitalisation
under the accounting standard AASB 138 Intangible
Assets.
This involves management judgement with regards to
technical feasibility, intention and ability to complete
the intangible asset, ability to use or sell the asset,
generation of future benefits and the ability to
measure the costs reliably and whether costs, including
payroll costs, were directly attributable to the project.
•
Vouching a sample of additions recognised
during the year to ensure they meet the
recognition requirements of AASB 138;
•
Evaluating the key assumptions used for
estimates made in capitalising development
costs, including assessment of whether
capitalised costs related to the development
phase of the project and the generation of
probable future economic benefits;
•
Considering the receipt of Research and
Development Grants during the year and the
resultant accounting treatment as either offset
against capitalised intangible assets and/or
recognition within the profit or loss; and
•
Assessing the adequacy of the related
disclosures in note 19 of the financial report.
2
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 2020, 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.
3
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:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 16 of the directors’ report for the
year ended 31 December 2020.
In our opinion, the Remuneration Report of Volt Power Group Limited, for the year ended 31 December
2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Glyn O'Brien
Director
Perth, 26 February 2021
4
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 as at 17 February 2021.
Distribution of equity securities
The number of shareholders, by size of holding, in each class of share are detailed below:
Range
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
Securities
% No. of holders
9,148,098,697
19,193,124
1,362,243
768,678
110,815
9,169,533,557
25,446,938
99.77
0.21
0.01
0.01
0.00
100.00
0.28
810
494
167
269
430
2,170
1,396
%
37.33
22.76
7.70
12.40
19.82
100.00
64.33
Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
Rank Name
17 Feb 2021
%IC
1
2
3
4
5
6
7
8
9
10
10
11
12
13
14
15
16
16
17
18
19
20
MR MICHAEL CAMPBELL HENDER
RENEWABLE INITIATIVE PTY LTD
GENUSPLUS GROUP PTY LTD
S & N HIGGINS SUPER PTY LTD
SIMON HIGGINS
AHB SUPER PTY LTD
RENEWABLE INITIATIVE PTY LTD
ADAM BOYD
DAVID OGG & ASSOCIATES PTY LTD
ZERRIN INVESTMENTS PTY LTD
CHEMBANK PTY LIMITED
MR GREGORY JOHN BITTAR
HOODWINKED PTY LTD
BOUCHI PTY LTD
CS FOURTH NOMINEES PTY LIMITED
BOTSIS HOLDINGS PTY LTD
SAMOZ PTY LTD
AHB SUPER PTY LTD
GETTYSBURG INVESTMENT COMPANY PTY LTD
MR MARK JOHN CLARK
DARRYL PETER OLDFIELD
HIGGINS WESTERN PTY LTD
692,000,000
579,500,000
461,000,000
428,000,000
345,000,000
320,000,000
300,500,000
267,500,000
204,236,707
200,000,000
200,000,000
195,969,467
170,000,000
152,530,017
139,855,616
136,706,690
130,000,000
130,000,000
121,942,344
115,000,000
110,000,000
109,000,000
Total 5,508,740,841
Balance of register 3,660,792,716
Grand total 9,169,533,557
7.55
6.32
5.03
4.67
3.76
3.49
3.28
2.92
2.23
2.18
2.18
2.14
1.85
1.66
1.53
1.49
1.42
1.42
1.33
1.25
1.20
1.19
60.08
39.92
100.00
52
VOLT POWER GROUP LIMITED
ABN 62 009 423 189
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
Adam Boyd (and related)
Simon Higgins (and related)
GenusPlus Group Pty Ltd
No. ordinary
shares
1,615,000,000
801,000,000
461,000,000
% of issued
capital
17.61%
8.905%
5.03%
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.
53