TIDMWAS
RNS Number : 2097P
Wasabi Energy Limited
30 September 2013
30 September 2013
Wasabi Energy Limited
("Wasabi," "the Group" or "the Company")
Audited Final Results
Wasabi Energy (ASX: WAS, AIM: WAS, OTCQX: WSBLY) is pleased to
provide the financial report of the Company and its subsidiaries
for the year ended 30 June 2013. A full copy of the financial
report incorporating the audit report and notes to the accounts is
available on the Company's website (www.wasabienergy.com) and on
the ASX website.
Highlights:
-- Establishment of Wasabi New Energy Asia Limited and the
purchase of 50.5% of Shanghai Shenghe New Energy Resources Science
and Technology (SSNE), the Chinese license holder for the Kalina
Cycle(R) .
-- Ongoing development of Imparator Green Energy Plc and in
particular enhanced resource studies and pre-feasibility study for
the Tuzla Geothermal project.
-- Four (4) Kalina Cycle(R) plants in various stages of
construction and commissioning in petrochemical, geothermal and
cement industry by the Kalina Cycle(R) license holders.
-- Completed issue of Convertible Loan note and Rights Issue to
raise approximately $14m during the period for the ongoing
development of the subsidiaries.
The Group loss for the year to 30 June 2013 is AUD$11.9m (2012 -
Loss AUD$7.45m)
For further information contact
Australian Enquiries
Mr. John Byrne / Diane Bettess
Wasabi Energy Limited
Ph: +61 (0)3 9663 7132
U.K. Investor Enquiries
Ivonne Cantu / Neil McDonald
Cenkos Securities plc
Ph: +44 (0)207 397 8900 / +44 (0) 131 220 9778
U.K. Media Enquiries
Mr. Josh Royston / Ms. Hilary Millar
Newgate Threadneedle
Ph: +44 (0) 207 653 9850
Chairman's Letter
Wasabi Energy has continued to make solid progress in its
development as an International Independent Power Producer.
Wasabi's expansion program is now progressing. The Company
incurred a consolidated loss of $11,933,583 (2012: Loss of
$7,448,777) for the year which was higher than expected due to a
$2.8m goodwill write off against the carrying value of our
investment in Aqua Guardian Group. As we proceed with the
establishment of subsidiaries and joint ventures to commercialise
the Kalina Cycle(R) technology worldwide your board expects a
significant reduction in losses in the new year. Since balance date
current liabilities of $9.4m were reduced by $5.2m by the issue of
Wasabi shares at 1.8cents. The strategy of Wasabi Energy is to use
the regional subsidiaries to finance, develop, own and operate 25
MWe of power production under construction or in operation by 2015.
We aim to maintain annual growth at this rate concentrating on high
margin opportunities as compared with traditional low margin base
load producers.
The establishment of Wasabi New Energy Asia (WNEA) and the
purchase of 50.5% of Shanghai Shenghe New Energy Resources Science
and Technology (SSNE) the Kalina Cycle(R) licensee for Greater
China (completed post year end) is a major achievement. Asia offers
a significant number of opportunities for power generation using
both the Kalina Cycle(R) and the SSNE patented Enhanced Rankine
Cycle. SSNE are completing two pivotal projects, a 7.5 MWe Enhanced
Rankine Cycle at the Guizhou cement plant for China Building
Materials Group and a 4 MWe Kalina Cycle(R) power plant at the
Hainan petrochemical facility for Sinopec. These are leading
Chinese companies with a large number of potential sites for power
generation. A Pre-IPO capital raising of up to $15 million is
currently underway and a leading international financier has been
mandated to lead the fundraising. Wasabi aims to retain at least
50% of the equity of WNEA post listing on the Singapore stock
exchange. An experienced operational power team will be appointed
to manage WNEA, which on listing will be well funded and a have a
strong pipeline of projects.
Our Turkish subsidiary, Imparator Green Energy Plc, is expected
to complete a pre feasibility study on the expansion of the Tuzla
Geothermal Power Project in the near future. Recent geological work
has significantly expanded the potential geothermal resource of the
Tuzla field. Preliminary indications are that a second stage
build-out of 30 MWe (gross) can be undertaken over the next two
years.
On completion of the pre-feasibility study, a decision will be
taken on the most appropriate method for funding the growth of
Imparator. Wasabi currently holds 100 per cent of the equity of
Imparator which not only has the Tuzla Geothermal Power Project but
also the Kalina Cycle(R) license for Turkey where there are many
potential applications. Wasabi has invested approximately $9
million into Imparator and under the terms of the option agreement
for the purchase of Tuzla is required to pay approximately $4
million at the end of 2013. There are a number of options for
funding this but the most likely is to sell down equity in
Imparator through the introduction of private or public equity
partners.
In Africa, AAP Carbon has taken on the business development
activities within Sub Saharan Africa. It is well advanced on a
number of projects in the cement and ferro-alloy markets. As these
projects come to fruition we will commence the IPO process.
Within the financial year we also conducted a number of capital
raising activities to provide funding for the acquisition and
development of these regional subsidiaries. The strong support of
our shareholders is much appreciated and shows confidence in our
business strategy. During and subsequent to the yearend we raised
over $12.9 million to fund the purchase of the 50% option of the
Tuzla Geothermal Power Project and the purchase of the 50.5% of
SSNE, which is in the form of a loan to WNEA.
A key focus for the Group is the finalization of the
commissioning with FL Smidth of the 8.6 MWe DG Khan Kalina Cycle(R)
plant in Pakistan in the coming weeks and the 4.5 MWe Star Cement
Kalina Cycle(R) power plant in the United Arab Emirates.
Our business development and engineering teams are working on a
number of prospects that offer exciting opportunities, including
installing Kalina Cycle(R) systems for waste heat recovery on large
scale diesel generators, gas pipeline compressor stations and solar
thermal plants. In all cases significant power advantages appear
achievable and our aim will be to develop reference sites for
marketing these applications.
Wasabi Energy is on track for the divestment of our non-core
assets. In August 2012 we announced the sale of our shareholding in
Australian Renewable Fuels to Lignol Energy Company (TSXV:LEC).
Lignol have continued to consolidate its position in the global
biodiesel market through further ownership in Australian Renewable
Fuels as well as the purchase of a major stake in Territory
Biofuels.
Aqua Guardian Group continues to develop its market for its
water conservation modules, AquaArmour(TM) with a sale to the
prominent miner, AngloGold Ashanti and to other water authorities.
We are continuing with our international expansion and there are a
number of well advanced opportunities.
Wasabi Energy also holds a number of shares in Clean TeQ
(ASX:CLQ), an environmental solution provider in water, air quality
and mineral recovery. Clean TeQ has been performing well and has
attracted Robert Friedland as a major shareholder in the company.
This is a strong endorsement for the business.
With the range of company building activities this year, the
Wasabi Energy team has spent a lot of time in many different parts
of the world. Our team have been focused on the delivery of our
strategy and worked relentlessly throughout the year, including
extended durations away from their families and friends. My thanks
to you all for your ongoing commitment and dedication to making
Wasabi Energy a success.
Yours Faithfully
John Byrne
Executive Chairman
Review of Operations
Over the financial year Wasabi Energy continued to make solid
progress in achieving its plan of becoming an International
Independent Power Producer. The focus for the Group over the past
year has been on two objectives, firstly, the continued integration
of Kalina Cycle technology within the cement industry and secondly,
the establishment of regional subsidiaries in Turkey, Asia and
Africa with each developing a portfolio of Kalina Cycle(R) power
projects.
These regional subsidiaries are being established as separate
entities in which Wasabi intends to hold a majority shareholding.
The individual entities will be responsible for their own capital
and Wasabi shareholders will benefit from the value added from
these subsidiaries without dilution of the company equity.
Asia
Wasabi New Energy Asia (WNEA) was established in late 2012 to
capitalise on the strong mandates for Energy Efficiency and
Renewable Energy in the Asian region. WNEA will become a separately
listed entity. WNEA is currently acquiring 50.5% of Shanghai
Shenghe New Energy Resources Science and Technology (SSNE), the
Kalina Cycle(R) licensee for China, Taiwan, Hong Kong and Macau. In
addition WNEA has a Kalina Cycle(R) license for Asia inclusive of
Japan, Myanmar, Mongolia, Thailand, Malaysia, Cambodia, Laos,
Vietnam, Philippines, Indonesia, North Korea, South Korea,
Singapore and Brunei.
SSNE has been a Kalina Cycle(R) licensee since 2008 and has been
building the foundations of the business. This has culminated in a
contract for a 4 MWe Kalina Cycle(R) power plant with Sinopec at
their Hainan petrochemical refinery. Sinopec Corporation is one of
the largest integrated energy and chemical companies within China
and operates globally with over US$9.92B in net profits and a
market capitalisation of over US$90B.
SSNE, are also in the final stages of commissioning of a 7.5 MWe
Enhanced Rankine Cycle power plant for China Building Materials
Group at their Guizhou cement plant. China Building Materials Group
is a major cement producer in China and operates over 35 cement
lines in China.
A number of business development opportunities are well advanced
including further potential contracts with Sinopec and CBMG as well
as geothermal opportunities in Taiwan.
WNEA through Wasabi's wholly owned subsidiary, Recurrent
Engineering, is progressing with a new engineering contract in
Japan with the Geothermal Energy Research and Development group,
GERD. This follows from the installation and operation of the 50
kWe EcoGen Kalina Cycle(R) micro power plant at the Matsunoyama
onsen northwest of Tokyo. These units have been specifically
designed for application in the hot spring market that has vast
potential within Japan and the rest of Asia.
On 15th August 2013 Wasabi announced that WNEA had made a
further payment for the purchase of 50.5% of SSNE for an
approximate total price of US$30 million. To date US$22 million has
been paid (US$8.2 million in cash, and WNEA has issued 30 million
shares at US50c each). The balance of US$8.30 million is due on 30
November 2013. WNEA has appointed an international brokerage house
in Hong Kong to complete a pre-IPO fundraising within this
timeframe. It is planned to list WNEA on the Singapore stock
exchange in the first half of 2014.
Turkey
Imparator Enerji, the Turkish subsidiary, has been established
to co-pursue power generation opportunities using Kalina Cycle(R)
technology. The company has been working towards the exercise of
the option over the Tuzla Geothermal Project in Turkey. Tuzla has
an operating 7.5 MWe geothermal power plant on approximately 29
square kilometres of geothermal leases. Imparator has been working
with Enda, the project owner and operator on plans to upgrade the
existing plant as well asthe first stage build out of the project
by up to 25 MWe utilising a Kalina Cycle(R) power plant. The Tuzla
Geothermal Power Project has the build out potential based on
studies and historical reports of up to 80 MWe of power generation
capacity. We are currently finalising plans for the exercise of the
option prior to the end of December 2013.
Alongside the development of the Tuzla Geothermal Project,
Imparator Enerji is also in discussions with major energy intensive
industries for the use of Kalina Cycle(R) technology.
Africa
AAP Carbon is an established entity in Sub Sahara Africa.
Progress within the group continues on a Kalina Cycle(R)
opportunity on a build, own, operate with a leading cement group in
Southern Africa and an integrated cogeneration project with Hernic
Ferrochrome. In addition the group is still in discussions with
ArcelorMittal, TATA Steel, Mogale Alloys and a range of other
industrial and geothermal groups in Sub Saharan Africa. As the
group secures projects we are progressing our plans for a separate
listing of AAP Carbon. Africa remains a very attractive market with
increasing power prices and intermittent supply resulting in a
strong demand for self generated power.
Licensees
The 8.6 MWe Kalina Cycle(R) power plant at DG Khan in Pakistan
is in its final stages of commissioning. The duration of this
commissioning has been extended due to the remoteness of the site
and the training of local operators on the operation of the plant.
The final acceptance tests are expected to be completed before the
end of the year.
FLSmidth the Kalina Cycle(R) licensee for the global cement and
lime industry (excluding China, Taiwan, Macau and Hong Kong) is
also undergoing commissioning of the 4.75 MWe Kalina Cycle(R) power
plant at Star Cement in Ras Al Khaimah in the United Arab Emirates.
FLSmidth have a number of opportunities that they are pursuing
including build, own, operate contracts in conjunction with Wasabi
Energy.
Exorka, the German Kalina Cycle(R) licensee for geothermal
developments has commenced construction of its 4.3 MWe Kalina
Cycle(R) power plant and district heating project with Geothermie
Taufkirchen. The project is expected to come on line in 2014.
The refurbishment of the Husavik power plant has been delayed
due to delivery issues of various components. Wasabi Energy is
working with the City of Husavik in relation to the ongoing
refurbishment of the plant.
Non Core Assets
Wasabi Energy has a clear strategy to focus on the power
business and to divest non core assets which consist of Aqua
Guardian Group, Clean TeQ and Lignol.
Aqua Guardian Group (AGG)
Aqua Guardian Group (AGG) owns the innovative modular
evaporation and algae control product AquaArmour(TM) .
AquaArmour(TM) is a self ballasting module that has been designed
for large scale deployment on water storages and dams. We announced
in late 2012 that AGG had deployed at the AngloGold Ashanti
Tropicana gold mine site in Western Australia. AquaArmour(TM) was
deployed on a water storage reserve at the reverse osmosis water
plant at Tropicana, which is the main supply of water to the
site.
AGG continues with deployments for local councils and water
authorities in Australia including repeat sales to existing
customers. Internationally there has been a large amount of
interest from South America and Spain which is being pursued.
Wasabi Energy is working with AGG to evaluate a number of
scenarios to realise the value of this asset.
Clean TeQ
In late 2012 AGG paid down a loan to Wasabi using their shares
in Clean TeQ (ASX:CLQ) resulting in Wasabi owning 22.5 million
shares directly. Clean TeQ (CLQ) is a provider of advanced clean
technology solutions for air and water treatment and mineral
extraction.
In May 2013, CLQ announced that Mr Robert Friedland, a
well-known and highly successful investor in both mining and
technology-related ventures, made an investment in Clean TeQ of
approximately $1.84 million in unsecured convertible notes and a
further investment of $1.73 million following his due diligence and
shareholder approval. Mr Friedland owns approximately 19.9% of CLQ
on a converted basis. As a new substantial shareholder in CLQ and
with the market potential and business activities of CLQ, Wasabi
sees upside potential for CLQ.
Lignol
Wasabi announced on 15 August 2012 that it had sold 275 million
ordinary share in Australian Renewable Fuels (ARFuels) to Lignol
Energy Corporation (TSXV: LEC), a Canadian-based advanced biofuels
company for consideration of $4,129.096 and currently holds 36.6m
shares in Lignol.
Lignol is an emerging producer of biofuels, biochemicals and
renewable materials from waste biomass. It owns a Canadian
biorefining company with an integrated pilot plant demonstrating
its technology for the production of cellulosic ethanol, high value
cellulose and high performance lignin. During the year Lignol has
also secured its stake in the Australian biodiesel market through
its 56% controlling interest in Territory Biofuels Limited and 21%
of ARFuels.
Territory Biofuels is the largest single biodiesel plant in
Australia with a capacity of 140 million litres per annum, which
includes the largest glycerine refinery in the country. ARFuels is
currently the largest biodiesel producer in Australia with three
plants having a combined capacity of 150 million litres per
annum.
Corporate Activity
During and subsequent to year end Wasabi Energy has raised over
$12.9m with the funds used to accelerate growth through the
regional subsidiaries.
Through placements and rights issues Wasabi raised over $6.8m
and a further $7.4m through the issue of a secured loan note in
December 2012. The capital raisings attracted two new shareholders
from Canada, Difference Capital and Salida Accelerator Fund.
The funds were used for the initial payment for SSNE and is by
way of a loan provided by Wasabi to WNEA. This loan will be
converted into additional shares in WNEA at the time of the IPO at
US50c per share. The funds have also been used for the purchase of
the 50% option over the Tuzla Geothermal Power Project.
Wasabi Energy continues to execute its strategy of becoming an
Independent Power Producer. We are delivering on our strategy of
regional based subsidiaries and will continue to roll out key
regional companies to accelerate the market penetration of the
Kalina Cycle(R). Our focus in the year ahead for the power business
will also see the realisation of our non-core assets.
Key activities for the coming year are the finalisation of the
commissioning of DG Khan and providing assistance on the
commissioning of the other four Kalina Cycle(R) power plants. The
realisation of business development activities in both build, own,
operate projects and engineering projects is core to our strategy,
including the exercising of the 50% option in Turkey, and key
projects in Sub Saharan Africa, China, Taiwan and Japan.
The market for Wasabi Energy continues to grow with increasing
focus on energy efficiency and renewable power solutions together
with growing demand for reliable power supply. Through the
foundations of the regional subsidiaries and our plans for
continued growth, through the delivery of 25 MWe of build, own,
operate power plants, we are confident that Wasabi Energy will
deliver our goal of being a profitable independent power
provider.
The Board of Directors and the Wasabi Energy team have provided
strong support during a very busy year for which I thank them. The
year ahead will see further delivery of our strategy and the
development of our power business.
Diane Bettess
Chief Operating Officer
Directors' report
The directors of Wasabi Energy Limited present their annual
financial report of the Company for the year ended 30 June 2013.
The directors report as follows:
The names and particulars of the directors of the Company during
or since the end of the financial year are:
Name, qualifications Particulars
Mr. John Byrne Mr. Byrne has over 30 years' experience in the natural resources industry as an
investor and
resource business developer. During the past 10 years Mr. Byrne has founded and built a
number
of companies from the ground up, including from development through to production. In
this
period he has been instrumental as either CEO or Executive Chairman in overseeing the
building
of 6 coal mines (in Canada, the US and the UK) along with 3 wash plants, totaling in
excess
of $500 million of expenditure. Until May 2010 Mr. Byrne was Chairman of Western Coal
Corporation,
a global coal producer. Since retiring from Western Coal Corporation, Mr. Byrne is now
concentrated
on identifying projects in and solutions to a number of sustainability issues that
exist in
the world today.
Appointed 8 May 2009.
Mr. Stephen Morris Mr Morris has more than 20 years' experience in international investment and management
in
a wide range of industries. Mr Morris is founder and Chief Executive of Fifth Avenue
Capital
Inc (a venture capital company) and a founder and director of FAC Smaller Strategic
Opportunities
Inc. as an early stage resource investor.
Appointed 13 November 2006.
Mr. Robert Reynolds, Mr. Reynolds is a mining engineer with more than 30 years experience in Australia and
Master Eng.(Mining) overseas
in coal marketing as well as coal mining management and engineering. Mr. Reynolds is a
consultant
providing marketing advice and services to a number of national and international coal
producers.
Mr. Reynolds past experience was with Southland Coal, Oceanic Coal and BHP.
Appointed 10 August 2005.
Mr. Robert Vallender, Mr. Vallender has over 30 years of management and new technology product development
B Comm. experience
in Australia and North America. Mr. Vallender is a consultant providing independent
marketing
and capital project sales advice to the Australian and European iron and steel and
primary
metals industries. He has dealt with major manufacturers and producers including Alcoa,
U.S.
Steel and General Motors.
Appointed 10 August 2005.
Dr. Malcolm Jacques, Dr Jacques is an independent energy consultant, focusing on the Renewable and Clean
Ph.D. Chemical Engineering Energy
sectors, with special emphasis on technical and regulatory issues associated with the
integration
of distributed and renewable energy sources into existing power grids. Dr Jacques
maintains
close working relationships with policy makers, regulators, financial organizations and
consultants
in the energy sectors in Europe and the USA.
Dr Jacques' international career has embraced research, development and implementation
of
numerous energy technologies in both the public and private sectors. He has worked with
several
well-known companies and organizations including BP Ventures (UK), The Energy
Laboratory,
MIT (Cambridge, USA), Strategic Research Foundation (Australia) and has played key
roles in
the establishment and management of public and private energy technology companies in
Australia
and North America.
Appointed 2 March 2010
The above named directors held office during the whole of the
financial year and since the end of the financial year except
for:
-- Mr Stephen Morris - resigned on 28 August 2012
Directorships of other listed companies
Directorships of other listed companies held by directors in the
3 years immediately before the end of the financial year are as
follows:
Name Company Period of
directorship
John Byrne Mandalay Resources Limited 2009 - 2011
(Canada)
East Coal Inc (Canada) 2008 - current
Stephen Sallies Ltd (South Africa) 2009 - 2011
Morris
(Resigned
28 August
2012)
Shareholdings
The following table sets out key management personnel's relevant
interests in shares and options of the Company as at the date of
this report.
During and since the end of the financial year no options (2012:
nil) were granted as part of their remuneration.
Each option when exercised entitles the holder to one ordinary
share.
Fully paid ordinary
shares Options
Directors and senior management Number Number
Directors
John Byrne 351,731,620 23,688,746
Robert Reynolds 33,273,691 3,669,299
Robert Vallender 20,256,438 -
Malcolm Jacques 15,150,000 -
Senior Management
Diane Bettess 6,435,000 715,000
Nico Bleijendaal -
Bruce Levy 8,500,000 -
Alwyn Davey 8,230,017 -
Kesh Thurairasa 1,957,065 217,452
During and since the end of the financial year no share options
were granted to Directors and officers of the company as part of
their remuneration.
Directors' meetings
The number of Directors' meetings (including meetings of
Committees of Directors) and the number of meetings attended by
each of the Directors of the Company held during the financial
year. During the financial year, 9 Board meetings and 2 Audit
Committee meetings were held during the period.
Board of Directors Audit and Finance
Committee
--------------------- --------------------
Name Held Attended Held Attended
------- ------------ ------- -----------
John Byrne 9 9 2 2
------- ------------ ------- -----------
Stephen Morris 3 3 - -
------- ------------ ------- -----------
Robert Reynolds 9 9 2 2
------- ------------ ------- -----------
Robert Vallender 9 9 - -
------- ------------ ------- -----------
Malcolm Jacques 9 9 - -
------- ------------ ------- -----------
Company secretary
The name(s) and particulars of the Company secretary during or
since the end of the financial year are:
Name
Alwyn Davey Mr Alwyn Davey was appointed to the position of Company Secretary on 9 July 2009. Mr Davey
has experience in cross border mergers, acquisitions and investments as well as formally being
a member of the Executive committee of Cambrian Mining Plc, a diversified mining group. He
was a non-executive director for Energybuild Group Plc, a UK listed coal company and has been
company secretary of a number of UK listed companies which were predominately part of the
Cambrian Mining Plc group. Mr Davey holds an LLB degree from Waikato University, NZ.
Principal activities
The principal activity of the consolidated entity during the
year was the continued management of its projects and
investments.
Review of operations
The consolidated loss for the year amounted to $11,933,583
(2012: $7,448,077 loss).
The Review of Operations is set out above.
Significant Risks
The Company monitors risks and uncertainties on an ongoing basis
in relation to its business objectives and operating environment.
The following are deemed material risks to the business:
Future capital requirements: The Company's strategy of becoming
an independent power operator will require significant amounts of
funding in the future. The Company will seek to meet its funding
requirements through the creation of subsidiary companies that will
raise capital on their own account through a combination of equity
and debt. There is a risk that the subsidiaries and the Company
will not be able to secure the capital or to achieve attractive
terms at the time.
Subsidiary Business Model: The Company has currently or intends
in the future to establish regional subsidiaries to further the
business of the Group. Regulatory, commercial, environmental or
political risks may impact on the ability of the Company to
establish and/or continue to operate subsidiaries in various global
jurisdictions. These factors may also impact on the ability of the
subsidiary companies to raise capital on their own account. While
the Company will seek to continue to operate existing subsidiaries
and to form new subsidiaries, there is a risk that the business and
operating structure of the Group will be different in the
future.
Dependence on Proprietary Technology: The Group relies on a
combination of patents, copyrights, trade secrets and
non-disclosure agreements to protect its Kalina Cycle technology.
The Group enters into confidentiality or licence agreements with
its employees, licensees and others and limits access to its
documentation, software and other proprietary information. There
can be no assurance that steps taken by the Company and KCT Power
Limited, formerly Global Geothermal Limited (KCT) in this regard
will be adequate to prevent misappropriation of its technology or
that KCT's competitors will not independently develop technologies
that are substantially equivalent or superior to KCT's technology.
In addition, the laws of some foreign countries may not protect
KCT's proprietary rights against others.
Foreign Exchange: Foreign exchange risk is relatively high due
to the global nature of the Company's core business. Foreign
exchange risk arises as it is likely to receive payment for
services in currencies other that the Company's functional
currency. In addition the value of its investments, assets and
liabilities in foreign jurisdictions will be affected by currency
movements.
Changes in state of affairs
There was no significant change in the state of affairs of the
consolidated entity during or since the year end.
Subsequent events
Except as noted below, there has not been any matter or
circumstance that has arisen since the end of the financial period,
that has significantly affected, or may significantly affect, the
operations of the company, the results of those operations, or the
state of affairs of the company in future financial periods
(i) On 15 July 2013 the company raised $2,036,757 from a
placement of the shortfall from the June Rights issues of
254,594,679 million fully paid ordinary together with a free
attaching options of 254,594,679 exercisable at 0.8 cent before 31
March 2014.
(ii) On 13 August 2013 the company issued 288,001,844 fully paid
ordinary shares at 1.8 cents to acquire 10 million Wasabi New
energy Asia Limited shares
.
(iii) On 14 August 2013, WNEA borrowed A$3,133,175 to complete
the second payment due. As a result of this payment Newmont Assets
ltd a wholly owned subsidiary of WNEA took 50.5% control of SSNE
business. Final payment of A$9,207,287 is due to vendors of SSNE on
or before 30 November 2013. Refer note 38 for further
information.
Future developments
Disclosure of information regarding likely developments in the
operations of the consolidated entity in future years and the
expected results of those operations may result in unreasonable
prejudice to the consolidated entity and therefore have not been
disclosed in this report.
Environmental regulations
The consolidated entity's operations are subject to
environmental regulation under both Commonwealth and State
legislation. There have been no significant known breaches of these
regulations by the consolidated entity.
Dividends
No dividends have been paid or declared since the start of the
year.
Shares under option or issued on exercise of options
Details of unissued shares or interest under option as at the
date of this report:
Number of Exercise
shares under Class of price of Expiry date
Issuing Entity option shares option of options
Wasabi Energy 6,500,000 Ordinary 2.8 cent 17 December
Limited 2013
-------------- ----------- ----------- --------------
Wasabi Energy 380,833,402 Ordinary 0.8 cent 31 March
Limited 2014
-------------- ----------- ----------- --------------
Wasabi Energy 10,000,000 Ordinary 3.4 cent 1 April 2014
Limited
-------------- ----------- ----------- --------------
Details of shares or interest issued during or since the end of
the financial year as a result of exercise of an option are:
Number of Amount Amount unpaid
Options converted Class of paid for
Issuing Entity to shares shares shares
------------------- --------- ---------- --------------
Wasabi Energy Limited 18,002,750 Ordinary $320,000 NIL
Shares under warrants or issued on exercise of warrants
Details of unissued shares or interest under warrants as at the
date of this report:
Number of Exercise
shares under Class of price of Expiry date
Issuing Entity option shares option of options
Wasabi Energy 362,500,000 Ordinary 2.0 cent 14 December
Limited 2013
-------------- ----------- ----------- --------------
Wasabi Energy 18,750,000 Ordinary 0.8 cent 14 December
Limited 2013
-------------- ----------- ----------- --------------
Details of shares or interest issued during or since the end of
the financial year as a result of exercise of an option are:
Number of Amount
Options converted Class of paid for Amount un
Issuing Entity to shares shares shares paid
------------------- --------- ---------- ----------
Wasabi Energy Limited NIL Ordinary NIL NIL
Indemnification of officers and auditors
The Company has entered into agreements to indemnify all the
Directors and Officers named in this report against all liabilities
to persons (other than the Company), which arise out of the
Directors and Officers conduct unless the liability relates to
conduct involving a lack of good faith or is otherwise prohibited
by law. The Company has agreed to indemnify the Directors and
Officers against all costs and expenses incurred in defending an
action that falls within the scope of the indemnity and any
resulting payments.
In accordance with common commercial practice, the insurance
policy prohibits disclosure of the nature of the liability insured
against and the amount of the premium.
Non-audit services
Details of amounts paid or payable to the auditor for non-audit
services provided during the year by the auditor are outlined in
note 34 to the financial statements.
The directors are satisfied that the provision of non-audit
services, during the year, by the auditor (or by another person or
firm on the auditor's behalf) is compatible with the general
standard of independence for auditors imposed by the Corporations
Act 2001.
The directors are of the opinion that the services as disclosed
in note 34 to the financial statements do not compromise
theexternal auditor's independence, for the following reasons:
-- all non-audit services have been reviewed and approved to
ensure that they do not impact the integrity and objectivity of the
auditor, and
-- none of the services undermine the general principles
relating to auditor independence as set out in Code of Conduct APES
110 Code of Ethics for Professional Accountants issued by the
Accounting Professional & Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a
management or decision-making capacity for the Company, acting as
advocate for the Company or jointly sharing economic risks and
rewards.
Auditor's independence declaration
The auditors' independence declaration is included on page 60 of
the annual report.
Remuneration report - audited
This remuneration report, which forms part of the directors'
report, sets out information about the remuneration of Wasabi
Energy Limited's directors and its senior management for the
financial year ended 30 June 2013. The prescribed details for each
person covered by this report are detailed below under the
following headings:
-- directors and senior management personnel details
-- remuneration policy
-- relationship between the remuneration policy and Company performance
-- remuneration of directors and senior management
-- key terms of employment contracts.
Directors and senior management personnel
The following persons acted as directors of the Company during
or since the end of the financial year:
Executive Directors
John Byrne
Stephen Morris (resigned 28 August 2012)
Malcolm Jacques (until 31 August 2012)
Non-executive directors
Robert Vallender
Robert Reynolds
Malcolm Jacques (from 1 September 2012)
The term 'senior management' is used in this remuneration report
to refer to the following key management personnel. Except as
noted, the named key management personnel held their current
position during or since the end of the financial year:
Diane Bettess (Chief Operating Officer - Wasabi Energy
Limited)
Nico Bleijendaal (President - International - Wasabi Energy
Limited)
Bruce Levy (Managing Director - KCT Power Limited)
Alwyn Davey (Company Secretary - Wasabi Energy Limited)
Kesh Thurairasa (Financial Controller - Wasabi Energy
Limited)
Remuneration policy
The Board policy for determining the nature and amount of key
management personnel and other remuneration is agreed by the Board
of Directors.
The terms 'remuneration' and 'compensation' are used
interchangeably throughout this report.
Key management personnel have authority and responsibility for
planning, directing and controlling the activities of the Company.
Key management personnel comprise the directors of the Company and
senior management of the Company.
Compensation levels for key management personnel and other
employees of the Company are competitively set to attract and
retain appropriately qualified and experienced directors and senior
management.
The compensation structures explained below are designed to
attract and retain suitably qualified candidates, reward the
achievement of strategic objectives, and achieve the broader
outcome of creation of value for shareholders. The compensation
structures take into account:
-- the capability and experience of key management personnel and other employees; and
-- the ability of key management personnel and other employees
to control areas of their respective responsibilities
Senior Executive Remuneration
Compensation packages for the Executive Directors and senior
management include a mix of fixed and incentive based
compensation.
The Board regularly reviews the policy regarding the appropriate
mix of fixed and incentive based compensation for senior
executives, having regard to industry practice to ensure the
Company attracts and retains the best people.
Fixed compensation
Fixed compensation consists of base compensation (which is
calculated on a total cost basis and includes any FBT charges
related to employee benefits including motor vehicles if any), as
well as employer contributions to superannuation funds.
Fixed compensation levels are reviewed annually by the Board
through a process that considers individual contributions and
overall performance of the Group, as well as market relativity. A
senior executive's compensation is also reviewed on promotion.
Incentive based compensation
The Company does not currently operate a short-term incentive
scheme and, in 2013, no cash awards were made to the executives
except for B Levy as disclosed in the remuneration report. The
Board did not operate a short-term incentive scheme for the 2013
financial year, however will review this in the context of the
formal review of the Company's broader executive remuneration
policy to be undertaken during the 2014 financial year.
In the 2013 financial year, no options were issued to Directors
and senior executives. However in 2011 and 2010, the Company issued
options to Directors and senior executives. The current approach of
not having time based vesting is considered appropriate. The Board
will continue to review the appropriateness of the time based
vesting conditions for future grants of options. There is no
condition other than period of service for granting of options. The
company considers the issue of options sufficiently aligns the
interest of the entity with the incentive given to key management
personnel.
All options expire on the earlier of their expiry date or
termination of the individual's employment.
Non-Executive Director Remuneration
Non-Executive Director fees are paid within an aggregate limit
which must not exceed $250,000 (excluding mandatory superannuation)
per annum or such other maximum as determined by the Company in a
general meeting.
The cash fees paid to Independent Non-executive Directors for
the 2013 financial year were $25,000 (2012:$25,000) per annum, plus
statutory superannuation.
All Non-Executive Directors are eligible to participate in the
options granted.
All Non-Executive Directors are also entitled to be reimbursed
for all reasonable travel, accommodation and other expenses
incurred in attending meetings of the Board, committees or
shareholders or while engaged on other Wasabi Energy Limited
business.
Relationship between the remuneration policy and Company
performance
The achievement of Company strategic objectives is the key focus
of the efforts of the Company, and it is the leadership of the
directors and senior management which makes the achievement of this
aim possible. As indicated above, over the course of the 2014
financial year, the Board will review the Company's executive
remuneration policy to ensure the remuneration framework remains
focused on driving and rewarding executive performance, while being
closely aligned to the achievement of Company strategic objectives
and the creation of shareholder value.
Shareholder returns are primarily measured by the movement in
share price from the start to the end of each financial year. No
dividends have been declared in the past four financial years or
the current financial year. As the Company remains in the growth
phase of its life cycle, shareholder returns do not correlate with
revenues and losses reported in any of the recent financial years.
Shareholder returns are more dependent on the future expectation of
Company performance rather than Company earnings.
The table below set out summary information about the
consolidated entity's earnings and movement in shareholder wealth
for the five years to 30 June 2013.
30 June 30 June 30 June 30 June 30 June
2013 2012 2011 2010 2009
Revenue 1,467,591 4,876,720 4,047,090 756,532 2,674,183
------------- ------------ ---------- ------------ -------------
Net (loss) /profit
before tax (11,818,333) (7,448,777) (547,288) (8,482,739) (14,772,581)
------------- ------------ ---------- ------------ -------------
Net (loss) after
tax (11,933,585) (7,448,777) (547,288) (8,482,739) (13,110,680)
------------- ------------ ---------- ------------ -------------
Share price
at start of
year (cents) 1.7 3.2 1.2 1.5 2.6
------------- ------------ ---------- ------------ -------------
Share price
at end of year
(cents) 0.6 1.7 3.2 1.2 1.5
------------- ------------ ---------- ------------ -------------
Dividends paid - - - - -
(cents
------------- ------------ ---------- ------------ -------------
Basic and diluted
(loss) per share
(cents) (0.39) (0.31) (0.02) (0.65) (1.59)
------------- ------------ ---------- ------------ -------------
Remuneration of directors and senior management - audited
Short-term employment Post-employment Equity (Long-term)
benefits
----------------------- ------ ------------------------------------ ---------------- ---------------------------------- ----------
Salary Other Non-monetary Superannuation Options Share S300A(1) Total
& Fees payments Expensed based (e)(vi)
in Year payment Value
(1) of options
as
proportion
of total
remuneration
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
Executive $ $ $ $ $ $ % $
Director
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
John Byrne 2013 140,000 - 17,774 - - - - 157,774
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
2012 140,000 - 17,252 - - - - 157,252
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
Stephen Morris 2013 - - - - - - - -
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
2012 251,830 - - - - - - 251,830
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
Non-executive
directors
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
Robert Reynolds 2013 25,000 - - 2,250 - - - 27,250
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
2012 25,000 - - 2,250 - - - 27,250
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
Robert Vallender 2013 81,000 - - 2,250 - - - 83,250
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
2012 25,000 - - 2,250 - - - 27,250
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
Malcolm Jacques 2013 25,000 - - - - - - 25,000
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
2012 120,000 - - - - - - 120,000
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
Senior Management
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
Diane Bettess 2013 300,000 - - 27,000 - - - 327,000
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
2012 300,000 - - 27,000 - - - 327,000
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
Nico Bleijendaal 2013 240,000 - - - - - - 240,000
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
2012 240,000 - - - - - - 240,000
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
Bruce Levy 2013 298,248 97,387 20,757 - - - - 416,392
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
2012 290,557 96,852 16,825 - - - - 404,234
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
Alwyn Davey 2013 180,000 - 11,413 16,200 - - - 207,613
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
2012 180,000 - 11,273 16,200 - - - 207,473
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
Kesh Thurairasa 2013 150,000 - - 13,500 - - - 163,500
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
2012 137,500 - - 12,375 - - - 149,875
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
TOTALS 2013 1,439,248 97,387 49,944 61,200 - - - 1,647,779
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
TOTALS 2012 1,709,887 96,852 45,350 60,075 - - - 1,912,164
----------------------- ------ ---------- --------- ------------- ---------------- --------- -------- ------------- ----------
1. Determined using Black Scholes valuation method. Expensing of
grant date fair value options on a straight-line basis over vesting
period and includes value of options lapsed during the period due
to the failure to exercise options before the expiry date.
Notes
-- No cash awards were paid during the 2013 financial year
(2012: Nil). All awards were made in the form of options.
-- During the year no options were issued to directors and senior management.
Equity instruments
Options
During the financial year no options were issued to directors
and the Board of Directors did not approve and the company did not
issue options to employees and consultants.
Modification of terms of equity-settled share-based payment
transactions
No terms of equity-settled share-based payment transactions
(including options granted as compensation to key management
personnel) have been altered or modified by the issuing entity
during the reporting period or prior period.
Analysis of options over equity instruments granted as
compensation
No options were granted as remuneration to any key management
person of the Group and Group executives.
During the financial year there were no share-based payment
arrangements in existence.
There are no further services or performance criteria that need
to be met in relation to options granted under series (i) - (v)
before interests vests in the recipient, except that options are
forfeited upon termination of employment.
During the year 10,000,000 options were exercised @ 1.6cts and
8,000,000 options @ 2.0cts were exercised by Directors or senior
management.
Key terms of employment contracts
The remuneration and other terms of employment for the Executive
Directors and Senior Management are set out in service letters.
These letters makes provision for a fixed remuneration component,
and options as a long-term incentive. The material terms of the
service letters are set out below.
Term Conditions Position
----------------------- ------------------------------ -----------------------------
Duration of contract Ongoing until notice Executive Directors/Company
is given by either party Secretary/Senior Management
----------------------- ------------------------------ -----------------------------
Voluntary termination 6 months' notice Executive Directors/Company
(i.e. termination by Secretary/Senior Management
executive by giving
notice)
----------------------- ------------------------------ -----------------------------
Termination by Company 6 months' fixed compensation Executive Directors/Company
without cause or Secretary/Senior Management
payment in lieu
----------------------- ------------------------------ -----------------------------
Termination by Company Employment may be terminated Executive Directors/Company
for cause immediately without Secretary/Senior Management
notice if the executive
commits any act or omission
justifying summary dismissal
at common law.
----------------------- ------------------------------ -----------------------------
Signed in accordance with a resolution of the directors made
pursuant to section 298(2) of the Corporations Act 2001.
On behalf of the Directors
signed
John Byrne
Executive Director
Melbourne, 30 September 2013
CORPORATE GOVERANCE STATEMENT
Statement
Wasabi Energy Limited ("Company") continues to seek improvements
to its systems of control and accountability as the basis for the
administration of corporate governance. This Corporate Governance
Statement sets out the company's current compliance with the
Australian Stock Exchange ("ASX") Corporate Governance Council's
Principles and Recommendations ("Recommendations"). The Company is
currently considering, implementing or has followed each
Recommendation where the Board has considered the Recommendation to
be an appropriate benchmark for corporate governance practices, and
is taking into account factors such as the size of the company and
the Board, resources available and activities of the company. The
board has established a corporate governance committee in order to
implement and review on an ongoing basis the development of the
company's corporate governance systems.
Recommendations
1. Lay solid foundations for management and oversight
1.1 Companies should establish the functions reserved to the
Board and those delegated to senior executives and disclose those
functions. The company refers all major investment decisions to the
Board for consideration and approval. Day to day operations of the
Company is the responsibility of the Executive Director and Senior
Management.
1.2 Companies should disclose the process for evaluating the
performance of senior executives. The performance of key executives
is reviewed regularly by reference to ongoing performance of the
company and its investments. The Board has formed a Remuneration
Committee who will perform this review going forward. During the
period, no formal evaluations were undertaken.
1.3 Companies should provide the information indicated in the
Guide to reporting on Principle 1. All of the information
identified in the 'Guide to Reporting on Principle 1' has been
satisfied either in the Corporate Governance Statement or the
Directors' Report in the Annual Report. The skills, expertise and
experience of directors relevant to their positions and their term
in office are disclosed in the Directors' Report. The company's
corporate governance policy, including the charters for its various
Board committees, is available on the company's website.
2. Structure the Board to add value
2.1 A majority of the Board should be independent directors.
Directors of Wasabi Energy Limited are considered to be independent
when they are independent of management and free from any business
or other relationship that could materially interfere with - or
could reasonably be perceived to materially interfere with - the
exercise of their unfettered and independent judgement.
In the context of director independence, 'materiality' is
considered from both the company and individual director
perspective. The determination of materiality requires
consideration of both quantitative and qualitative elements. An
item is presumed to be quantitatively immaterial if it is equal to
or less than 5% of the appropriate base amount. It is presumed to
be material (unless there is qualitative evidence to the contrary)
if it is equal to or greater than 10% of the appropriate base
amount. Qualitative factors considered include whether a
relationship is strategically important, the competitive landscape,
the nature of the relationship and the contractual or other
arrangements governing it and other factors that point to the
actual ability of the director in question to shape the direction
of the company's loyalty.
In accordance with the definition of independence above, and the
materiality thresholds set, the following directors of Wasabi
Energy Limited are considered to be independent:
Name Position
Robert Reynolds Non-Executive Director
Robert Vallender Non-Executive Director
Malcolm Jacques Non-Executive Director
The company's Board comprises 4 directors. Therefore, there is a
majority of independent directors on the Board. The directors
consider that the balance of independent and non-independent
directors is appropriate given the size of the Board and the
company.
There are procedures in place, agreed by the Board, to enable
directors in the furtherance of their duties to seek independent
professional advice at the company's expense.
2.2 The chair should be an independent director. The Chairman,
John Byrne, is not considered as an independent director. Due to
the size of the company and the board this is deemed acceptable to
the directors of the company. Should the company increase in size
then the company will consider, and if thought appropriate, appoint
an independent director as chairman.
2.3 The roles of chair and Chief Executive Officer should not be
exercised by the same individual. The chair and the Chief Executive
Officer are both considered to be John Byrne. Due to the size of
the company and the board this is deemed acceptable to the
directors of the company. Should the company increase in size then
the company will consider, and if thought appropriate, appoint a
separate person to the role of Chief Executive Officer. The company
has a Chief Operating Officer who assists the chairman in the
management of the company.
2.4 The Board should establish a nomination committee. There is
no specific nomination committee. Currently all members of the
Board are part of this process to ensure the Board continues to
operate within the established guidelines including when necessary,
selecting candidates for the position of director. When a vacancy
occurs, through whatever cause, or where it is considered that the
company would benefit from the skills of an additional Director
with particular skills, the Board will consider candidates with the
appropriate expertise and experience. The directors consider that
this is appropriate given the size of the Board and the
company.
2.5 Companies should disclose the process for evaluating the
performance of the Board. The performance of the Board is not
currently reviewed annually. This performance is reviewed on an ad
hoc basis by the board and directors are assessed based on the
financial and non-financial objectives and results of the company.
Directors whose performance is consistently unsatisfactory may be
asked to retire. During the reporting period, the Board did not
meet to specifically evaluate the performance of Board members,
which was considered appropriate given the given the size of the
Board and the company.
2.6 Companies should provide the information indicated in 'Guide
to Reporting on Principle 2'. All of the information identified in
the 'Guide to Reporting on Principle 2' has been satisfied either
in the Corporate Governance Statement or the Directors' Report in
the Annual Report. The skills, expertise and experience of
directors relevant to their positions and their term in office are
disclosed in the Directors' Report. The company's corporate
governance policy, including the charters for its various Board
committees, is available on the company's website.
3. Promote ethical and responsible decision-making
3.1 Establish a code of conduct and disclose the code or a summary of the code as to:
(a) the practices necessary to maintain confidence in the company's integrity;
(b) the practices necessary to take into account their legal
obligations and the reasonable expectations of their stakeholders;
and
(c) the responsibility and accountability of individuals for
reporting and investigating reports of unethical practices.
The company has not yet established a formal written code of
conduct. The board is currently reviewing this aspect of the
corporate governance guidelines and will establish an appropriate
code of conduct relative to the size of the company. Currently each
of the directors is aware of the investment and corporate
objectives of the company and is conscious of the expectations of
the shareholders, investee companies and their stakeholders. Any
activities of the company are undertaken in consideration of all
legal and regulatory requirements as well as with consideration of
the underlying value of the activity to shareholders and other
stakeholders. The Company Secretary is primarily tasked with
maintaining a high level of compliance on all aspects of the
business and has the support of the board to achieve this
outcome.
3.2 Companies should establish a policy concerning diversity and
disclose the policy or a summary of that policy. The policy should
include requirements for the Board to establish measurable
objectives for achieving gender diversity for the board to assess
annually both the objectives and progress in achieving them. The
Board has not yet established a formal written policy concerning
diversity. The board is reviewing this aspect of the corporate
governance guidelines. Currently the Company includes both women
and men in senior management positions. Due to the size of the
company and the board this is deemed acceptable to the directors of
the company.
3.3 Companies should disclose in each annual report the
measurable objectives for achieving gender diversity set by the
board in accordance with the diversity policy and progress to
achieving them. As the Board has not yet established a formal
written policy concerning diversity there are no measurable
objectives set. The Board is reviewing this aspect of the corporate
governance guidelines with a view to implement a policy that is
appropriate to the size and development of the Company.
3.4 Companies should disclose in each annual report the
proportion of women employees in the whole organisation, women in
senior positions and women on the board. The Company does not have
any women on the Board. The Chief Operating Officer (Senior
Management) is a women. Overall there are 20% (2012:20%) of the
Company's employees who are women operating in 3 countries, across
engineering, finance and administration.
3.5 Companies should provide the information indicated in the
Guide to reporting on Principle 3. All of the information
identified in the 'Guide to Reporting on Principle 3' has been
satisfied either in the Corporate Governance Statement or the
Directors' Report in the Annual Report.
4. Safeguard integrity in financial reporting
4.1 The Board should establish an audit committee. The Board has
established an audit committee which operates under a charter
approved by the Board. It is the audit committee's responsibility
to ensure that an effective internal control framework exists
within the entity. This includes internal controls to deal with the
effectiveness and efficiency of significant business processes, the
safeguarding of assets, the maintenance of proper accounting
records, and the reliability of financial information as well as
non-financial considerations such as the benchmarking of operations
key performance indicators. The Committee will also provide the
Board with additional assurance regarding the reliability of
financial information for inclusion in the financial reports.
4.2 The audit committee should be structured so that it:
(a) consists of only non-executive directors;
(b) consists of a majority of independent directors;
(c) is chaired by an independent chair who is not chair of the Board; and
(d) has at least three members.
The audit committee was appointed on 9 July 2009 and
comprises:
Name Qualifications
John Byrne Nil
Robert Reynolds (Chairman) Master Eng. (Mining)
In accordance with the definition of independence described in
Recommendation 2.1 above, and the materiality thresholds set,
Robert Reynolds is considered to be independent and is a
non-executive director. John Byrne is not considered independent
and is an executive director.
The committee is currently chaired by Mr Robert Reynolds who is
not chair of the Board.
The committee has two members, only one of which is independent,
which is less than the recommended minimum of three and a majority
of independent directors, but given the size and nature of the
Board, the directors consider that this is appropriate.
4.3 The audit committee should have a formal charter. The
committee has a formal charter which is disclosed on the company's
website
.
4.4 Companies should provide the information indicated in 'Guide
to Reporting on Principle 4'. The information identified in the
'Guide to Reporting on Principle 4' has been satisfied either in
the Corporate Governance Statement or the Directors' Report in the
Annual Report.
5. Make timely and balanced disclosure
5.1 Companies should establish written policies designed to
ensure compliance with ASX Listing Rule disclosure requirements and
to ensure accountability at a senior executive level for that
compliance. The company has made the directors and the senior
management of its subsidiaries and associates aware of the
requirement for continuous and periodic disclosure to ensure the
factual presentation of the company's financial position and
market-sensitive information is maintained in an orderly and timely
fashion. At present the company does not have a written policy due
to the size of the company and the limited number of people and
activities of the company. The board consider this is appropriate
for the size of the company however it is currently reviewing its
policies in regard to this Recommendation.
5.2 Companies should provide the information indicated in 'Guide
to Reporting on Principle 5'. A summary of the company's continuous
disclosure policy is set out above and if appropriate will be
disclosed on the company's website.
6. Respect the rights of shareholders
6.1 Companies should design a communication policy for promoting
effective communication with shareholders and encouraging their
participation at general meetings and disclose their policy or a
summary of that policy. The company has a shareholders
communication policy which aims to ensure that the shareholders are
informed of all major developments affecting the company. All
shareholders are able to receive the company's annual report. The
company also encourages full participation of shareholders at its
annual general meeting and at extraordinary general meetings when
called. The company makes available a telephone and email address
for shareholders to make enquiries of the company.
6.2 Companies should provide the information indicated in 'Guide
to Reporting on Principle 6'. The company maintains a website on
which it makes available: company announcements; shareholder
meeting notices and explanatory materials; financial information
and annual reports. The company is currently reviewing its website
and where necessary will enhance the information available on that
site.
7. Recognise and manage risk
7.1 Companies should establish policies for the oversight and
management of material business risks and disclose a summary of
those policies. The identification and effective management of risk
is viewed as an essential part of the company's approach to
creating long-term shareholder value. In recognition of this, the
Board has determined to form a Risk Committee to better determine
the company's risk profile and this committee will be responsible
for overseeing and approving risk management strategy and policies,
internal compliance and internal control. This process is ongoing
and will continue to be a focus of the committee and the board.
7.2 The Board should require management to design and implement
the risk management and internal control system to manage the
company's material business risks and report to it on whether those
risks are being managed effectively. The company will be
establishing a risk management policy within which will be set out
a framework for a system of risk management and internal compliance
and control. Senior management as required will have responsibility
for identifying, assessing, treating and monitoring risks and
reporting to the Board on these risks and the extent to which it
believes they are being adequately managed. They Senior Management
have been proactively undertaking risk management processes in
order to report to the board the outcomes.
7.3 The Board should disclose whether it has received assurances
from the chief executive officer (or equivalent) and the chief
financial officer (or equivalent) that the declaration provided in
accordance with section 295 of the Corporations Act is founded on a
sound system of risk management and internal control and that the
system is operating effectively in all material respects in
relation to financial reporting risks. The Board has received a
declaration from the Company Secretary, being an officer with
primary responsibility as defined by section 295 of the
Corporations Act, assuring that the declaration provided in
accordance with section 295 of the Corporations Act is founded on a
sound system of risk management and internal control and that the
system, to the extent that they relate to financial reporting, is
operating effectively in all material respects.
7.4 Companies should provide the information indicated in 'Guide
to Reporting on Principle 7'. A summary of the company's risk
management policy is disclosed on the company's website.
8. Remunerate fairly and responsibly
8.1 The Board should establish a remuneration committee. The
Board is responsible for determining and reviewing compensation
arrangements for the directors themselves and the executive
officers and executive team. The Board has established a
remuneration committee, which comprises of the chairman and two
non-executive directors. Given the size and nature of the Board,
the directors consider that this is appropriate that the Chairman,
while not independent is a member of the remuneration committee.
The remuneration committee has not yet met. The terms of reference
for the remuneration committee include review and recommendation to
the board on the company's remuneration, recruitment and
termination for senior executives, review of executives'
performance and a framework for directors' compensation.
8.2 Companies should clearly distinguish the structure of
non-executive directors' remuneration from that of executives. The
Directors are paid $25,000 per annum. Executive directors receive
additional remuneration as set out in the 'Remuneration Report
(audited)' section of the Directors Report. Further information
regarding the executive and non-executive remuneration framework
and payments is detailed in the 'Remuneration Report (audited)'
section of the Directors Report.
8.3 Companies should provide the information indicated in 'Guide
to Reporting on Principle 8'. There is no scheme to provide
retirement benefits, other than statutory superannuation, to
non-executive directors. The formal charter is disclosed on the
company's website. The company has not yet adopted a formal policy
on prohibiting entering into transactions in associated products
which limit the economic risk of participating in unvested
entitlements under any equity-based remuneration schemes. All of
the other information identified in the 'Guide to Reporting on
Principle 8' has been satisfied either in the Corporate Governance
Statement or the Directors' Report in the Annual Report.
Statement of profit or loss and other comprehensive income
for the financial year ended 30 June 2013
Consolidated
----------------------------
2013 2012
Note $ $
----- ------------- -------------
Revenue 4 1,467,591 4,876,720
Cost of Sales (1,261,039) (4,216,183)
------------- -------------
Gross profit/(loss) 206,552 660,537
Other revenue 1,297,168 977,040
Finance income 6 60,621 177,118
Employee benefits expenses (4,050,999) (2,920,290)
Administration expenses (1,838,731) (1,339,742)
Depreciation and amortisation expenses 6 (262,502) (207,281)
Travel expenses (1,038,312) (1,097,443)
Fair value gain/(loss) on held for trading
investments 132,295 (148,500)
Gain on derecognition of an associate - 1,323,700
Impairment of investments classified as held for
sale (158,478) (3,761,539)
Fair value of other investments (447,988) -
Legal and professional fees (1,422,466) (1,602,482)
Patent costs (203,242) (252,602)
Exchange variation 6 (17,321) 374,445
Fair value gain/(loss) on options (5,361) (24,318)
Finance costs 5 (676,896) (67,420)
Provision for capitalised development 16 (567,999) -
Goodwill written off (2,824,674) -
Profit/(loss) from equity accounted investments 14 - 460,000
Loss before tax (11,818,333) (7,448,777)
Income tax expense 7 (115,250) -
------------- -------------
Loss for the year (11,933,583) (7,448,777)
------------- -------------
Attributed to:
Owners of the parent (11,678,777) (7,319,039)
Non-controlling interest (254,806) (129,738)
(11,933,583) (7,448,777)
------------- -------------
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Exchange reserve arising on translation of foreign
operations (652,011) (213,957)
Gain/(loss) on available-for-sale investments
taken to equity (1,132,261) 667,603
Other comprehensive income for the period net of
tax (1,784,272) 453,646
------------- -------------
Total comprehensive income for the period (13,717,855) (6,995,131)
------------- -------------
Total comprehensive income attributable to:
Owners of the parent (13,282,218) (6,833,074)
Non controlling interest (435,637) 162,057
------------- -------------
(13,717,855) (6,995,131)
------------- -------------
Loss per share
From continuing and discontinued operations:
Basic (cents per share) 35 (0.39) cents (0.31) cents
Diluted (cents per share) 35 (0.39) cents (0.31) cents
Notes to the financial statements are included on pages 22 to 58
of the annual report.
Statement of financial position
as at 30 June 2013
Consolidated
----------------------------
2013 2012
Note $ $
----- ------------- -------------
Current assets
Cash and cash equivalents 30 222,261 72,105
Trade and other receivables 8 1,310,574 1,721,046
Inventory - 2,960
Other financial assets 9 3,658,025 100,336
Assets classified as
available for sale 10 3,442,023 -
Non current assets
held for sale 11 - 3,695,118
Total current assets 8,632,883 5,591,565
------------- -------------
Non-current assets
Trade and other receivables 12 507,581 57,617
Assets classified as
available-for-sale 13 1,000,000 5,242,770
Investments accounted
for using the equity
method 14 9,200 9,200
Property, plant and
equipment 15 510,341 532,484
Capital work-in-progress 16 40,313 377,962
Other assets 17 29,431,361 957,033
Goodwill 18 - 2,824,674
Intangible assets 19 1,646,342 1,192,176
------------- -------------
Total non-current assets 33,145,138 11,193,916
------------- -------------
Total assets 41,778,021 16,785,481
------------- -------------
Current liabilities
Trade and other payables 20 9,475,470 2,607,590
Borrowings 21 8,282,037 3,024,426
Provisions 22 268,784 172,585
------------- -------------
Total current liabilities 18,026,291 5,804,601
------------- -------------
Non-current liabilities
Trade and other payables 23 772,145 302,589
Borrowings 21 4,927,185 -
Total non-current liabilities 5,699,330 302,589
------------- -------------
Total liabilities 23,725,621 6,107,190
------------- -------------
Net assets 18,052,400 10,678,291
------------- -------------
Equity
Issued capital 24 61,873,709 51,404,080
Reserves 26 (1,387,348) 39,883
Accumulated losses 27 (53,179,661) (41,500,884)
------------- -------------
Total equity attributable
to equity holders of
the company 7,306,700 9,943,079
Non-controlling interest 26.6 10,745,700 735,212
------------- -------------
Total equity 18,052,400 10,678,291
------------- -------------
Notes to the financial statements are included on pages 22 to 58
of the annual report.
Statement of changes in equity
for the financial year ended 30 June 2013
Consolidated
Issued Investment Foreign Share Other Accumulated Attributable Non-controlling Total
capital and revaluation currency based reserves Treasury losses to owners of interest
contributed reserve translation payments Shares the parent
equity reserve reserve
$ $ $ $ $ $ $ $ $ $
------------ ------------ ------------ ---------- -------------- ---------- ------------- -------------- ---------------- -------------
Balance at 1
July 2011 48,362,897 690,692 121,379 3,658,341 (3,171,993) - (34,181,845) 15,479,471 (129,787) 15,349,684
Loss for the
year - - - - - - (7,319,039) (7,319,039) (129,738) (7,448,777)
Movement in
foreign
exchange
values - - (213,957) - - - - (213,957) - (213,957)
Gain/(loss) in
AFS
investments
(note 26.2) - 667,603 - - - - - 667,603 291,795 959,398
------------ ------------ ------------ ---------- -------------- ---------- ------------- -------------- ---------------- -------------
Total
comprehensive
income for
the period - 667,603 (213,957) - - - (7,319,039) (6,865,393) 162,057 (6,703,336)
Forfeiture of
employee
options (note
26.4) - - - (101,388) - - - (101,388) - (101,388)
Issue of
shares 1,000,000 - - - - - - 1,000,000 - 1,000,000
Share issue
cost (note
24.1) (36,818) - - - - - - (36,818) (6,486) (43,304)
Exercise of
options (note
24.1) 2,078,001 - - - - - - 2,078,001 - 2,078,001
Recognition of
minority
interest - - - - - - - - 579,641 579,641
Treasury
shares held
by associate - - - - - (450,800) - (450,800) - (450,800)
Difference
arising on
increased
control of
subsidiary - - - - (1,159,994) - - (1,159,994) 129,787 (1,030,207)
------------ ------------ ------------ ---------- -------------- ---------- ------------- -------------- ---------------- -------------
Balance at 30
June 2012 51,404,080 1,358,295 (92,578) 3,556,953 (4,331,987) (450,800) (41,500,884) 9,943,079 735,212 10,678,291
------------ ------------ ------------ ---------- -------------- ---------- ------------- -------------- ---------------- -------------
Balance at 1
July 2012 51,404,080 1,358,295 (92,578) 3,556,953 (4,331,987) (450,800) (41,500,884) 9,943,079 735,212 10,678,291
Loss for the
year - - - - - - (11,678,777) (11,678,777) (254,806) (11,933,583)
Movement in
foreign
exchange
values - - (764,462) - - - - (764,462) 112,451 (652,011)
Gain/(loss) in
AFS
investments
(note 26.2) - (838,979) - - - - - (838,979) (293,282) (1,132,261)
------------ ------------ ------------ ---------- -------------- ---------- ------------- -------------- ---------------- -------------
Total
comprehensive
income for
the period - (838,979) (764,462) - - - (11,678,777) (13,282,218) (435,637) (13,717,855)
Employee
options
exercised
(note 26.4) 191,959 - - (191,959) - - - - - -
Issue of
shares (note
24.1) 10,615,841 10,615,841 - 10,615,841
Cost of
options
issued (note
26.4) - - - 220,169 - - - 220,169 - 220,169
Share issue
cost (note
24.1) (658,171) - - - - - - (658,171) - (658,171)
Exercise of
options (note
24.1) 320,000 - - - - - - 320,000 - 320,000
Recognition of
minority
interest
(note 26.6) - - - - - - - - 10,446,125 10,446,125
Issue of
warrants
(note 26.4) - - - 148,000 - - - 148,000 - 148,000
Balance at 30
June 2013 61,873,709 519,316 (857,040) 3,733,163 (4,331,987) (450,800) (53,179,661) 7,306,700 10,745,700 18,052,400
------------ ------------ ------------ ---------- -------------- ---------- ------------- -------------- ---------------- -------------
Notes to the financial statements are included on pages 22 to 58
of the annual report.
Cash flow statement
for the financial year ended 30 June 2013
Consolidated
---------------------------
2013 2012
Note $ $
------ ------------ -------------
Cash flows from operating
activities
Receipts from customers 2,268,660 3,857,751
Interest and finance costs
paid (242,686) (19,005)
Payments to suppliers and
employees (8,454,145) (11,152,859)
Sundry Income 49,723 349,172
Net cash used in operating
activities 30(i) (6,378,448) (6,964,941)
Cash flows from investing
activities
Interest received 51,637 35,521
Payment for plant and equipment (157,131) (237,302)
Payments for equity investments (643,916) (784,035)
Payments for options to acquire
new ventures (7,286,696) (840,344)
Payment for capitalised development (212,919) (76,431)
Proceeds from sale of plant
and equipment 545 1,127
Proceeds from sale of equity
investments 776,599 778,574
Loans to related party (9,580) (1,957,513)
Receipts/(payment) for deposits (1,341) 17,219
Net cash inflow on acquisition
of subsidiary 14,245 26,988
Loan repaid by related party - 104,242
Net cash used in investing
activities (7,468,557) (2,931,954)
Cash flows from financing
activities
Proceeds from issue of shares 9,851,855 2,078,001
Proceeds from borrowings 8,438,000 2,976,011
Repayment of borrowings (3,820,842) (519,207)
Capital raising costs (472,697) -
Net cash provided by financing
activities 13,996,316 4,534,805
Net (decrease) / increase
in cash and cash equivalents 149,311 (5,362,090)
Cash and cash equivalents
at the beginning of the
financial year 72,105 5,223,011
Effect of movement in exchange
rates on cash balances 845 211,184
Cash and cash equivalents
at the end of the financial
year 30 222,261 72,105
Notes to the financial statements are included on pages 22 to 58
of the annual report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR WGUQGBUPWUQU
Enhanced System (LSE:ESTL)
Historical Stock Chart
Von Mai 2024 bis Jun 2024
Enhanced System (LSE:ESTL)
Historical Stock Chart
Von Jun 2023 bis Jun 2024
