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Appendix 4E
Preliminary Final Reportto the Australian Stock Exchange
Part 1
Name of Entity Dyesol Limited
ABN 92 111 723 883
Financial Period Year ended 30 June 2011
Previous Corresponding Reporting Period Year ended 30 June 2010
Part 2 Results for Announcement to the Market
$000
Percentageincrease
/(decrease) overprevious
correspondingperiod
Revenue from continuing operations 1,413 (54%)
Loss after related income tax benefit (17,285) 20%
Net loss attributable to members of the parent entity (17,285) 20%
Dividends (distributions) Amount per security Franked amount per security
Final Dividend Nil Nil
Interim Dividend Nil Nil
Record date for determining entitlements to thedividends (if any) Not Applicable
Brief explanation of any of the figures reported above necessary to enable the figures to beunderstood:
Refer Part 9 for a commentary on the results for the year.
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Part 3 Contents of ASX Appendix 4E
Section Contents
Part 1 Details of entity, reporting period
Part 2 Results for announcement to the marketPart 3 Contents of ASX Appendix 4E
Part 4 Consolidated statements of comprehensive income
Part 5 Accumulated losses
Part 6 Consolidated statements of financial position
Part 7 Consolidated statements of cash flows
Part 8 Consolidated statements of changes in equity
Part 9 Commentary on results
Part 10 Revenue and expenses
Part 11 Notes to the statement of cash flows
Part 12 Details relating to dividends
Part 13 Earnings per share
Part 14 Net tangible assets per security
Part 15 Details of entities over which control has been gained or lost
Part 16 Issued securities
Part 17 Subsequent events
Part 18 Audit status
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Part 4 Consolidated Statements of Comprehensive Income
2011($)
2010($)
Revenue 1,413,302 3,042,021
Cost of sales (1,007,982) (2,209,965)
Gross profit 405,320 832,056
Other income from continuing operations 1,334,214 1,667,755
Technical Expenses (7,963,614) (5,857,464)
Administration and corporate expenses (8,805,552) (7,464,135)
Marketing expenses (2,366,781) (3,408,636)
Finance costs (71,264) (1,928)
Intellectual property expenses (568,658) (574,174)
Loss before income tax (18,036,335) (14,806,526)
Income tax benefit 751,784 434,314
Loss for the year (17,284,551) (14,372,212)
Other Comprehensive loss for the year, net of tax
Foreign currency translation difference (516,797) (380,353)
Total comprehensive Income for the year (17,801,348) (14,752,565)
Loss for the year is attributable toOwners of Dyesol Limited (17,284,604) (14,372,325)
Non-controlling interest 53 113
(17,284,551) (14,372,212)
Total comprehensive loss for the year is attributable to:
Owners of Dyesol Limited (17,801,459) (14,752,783)
Non-controlling interest 111 218
(17,801,348) (14,752,565)
Part 5 Accumulated losses
2011($)
2010($)
Accumulated losses at the beginning of the financialperiod (39,124,594) (24,752,269)
Loss for the financial period (17,284,604) (14,372,325)
Accumulated losses at the end of the financial period (56,409,198) (39,124,594)
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Part 6 Consolidated Statements of Financial Position
2011$
2010$
CURRENT ASSETS
Cash and cash equivalents 6,293,440 13,137,203
Trade and other receivables 1,072,240 1,812,122Inventories 1,616,814 1,958,102Other current assets 349,105 254,736
Total Current Assets 9,331,599 17,162,163
NON CURRENT ASSETS
Property, plant and equipment 2,868,517 3,982,204Intangible assets 8,491,256 7,985,300
Total Non Current Assets 11,359,773 11,967,504
TOTAL ASSETS 20,691,372 29,129,667
CURRENT LIABILITIES
Trade and other payables 3,103,407 2,940,000Interest-bearing liabilities 1,150,847 11,076Financial liabilities 1,163,032 -Provisions 216,269 202,166
Total Current Liabilities 5,633,555 3,153,242
NON CURRENT LIABILITIES
Other payables 184,727 -Interest-bearing liabilities - 464,437
Provisions 361,100 343,653Deferred tax liability 668,049 749,207
Total Non Current Liabilities 1,213,876 1,557,297
TOTAL LIABILITIES 6,847,431 4,710,539
NET ASSETS 13,843,941 24,419,128
EQUITY
Issued capital 66,848,603 61,483,094Reserves 3,403,395 2,059,598Accumulated losses (56,409,198) (39,124,594)
Capital and Reserves attributable to owners ofDyesol Limited
13,842,80024,418,098
Non-controlling interest 1,141 1,030
13,843,941 24,419,128
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Part 7 Consolidated Statements of Cash Flows
2011($)
2010($)
Cash flows from operating activities
Cash receipts from customers 1,897,420 2,006,935Cash payments to suppliers and employees (16,157,087) (15,059,357)Income tax rebate received 1,029,626 359,588
Interest received 160,188 225,891
Finance costs (20,784) (1,928)Grant received 2,121,601 1,563,232
Net cash used in operating activities (10,969,036) (10,905,639)
Cash flows from investing activities
Payments for plant and equipment (886,891) (692,188)Proceeds from sale of plant and equipment 163 -
Payments for intellectual property (50,000) (100,000)
Payments for product development costs (1,089,738) (975,761)Loans repaid by directors - 900,625
Loans to related parties (320,287) (300,000)Loans repaid by related parties 20,287 300,000
Net cash used in investing activities (2,326,466) (867,324)
Cash flows from financing activities
Proceeds from borrowings 1,543,842 462,484Repayment of borrowings (11,860) (10,871)Proceeds from the issue of shares 5,500,000 12,000,000Share issue costs (323,475) (628,593)
Net cash provided by financing activities 6,708,507 11,823,020
Net increase in cash held (6,586,995) 50,057
Cash at the beginning of the year 13,137,203 13,290,253
Foreign currency loss on cash held (256,768) (203,107)
CASH AT THE END OF THE YEAR 6,293,440 13,137,203
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Part 8 Consolidated Statements of Changes in Equity
Reserves
Issuedcapital
Accumulatedlosses
Equity-settledbenefit
Foreigncurrency
translation
reserve
Total
Non-controlling
interestTotal equity
$ $ $ $ $ $ $
At 1 July 2009 49,125,087 (24,752,269) 1,706,855 (80,176) 25,999,497 812 26,000,309
Total comprehensive income for theyear
Loss for the year - (14,372,325) - - (14,372,325) 113 (14,372,212)
Other comprehensive income
Foreign currency translation reservedifferences - -
- (380,458) (380,458) 105 (380,353)
Total comprehensive income for theyear - (14,372,325) - (380,458) (14,752,783) 218 (14,752,565)
Transaction with owners, in theircapacity as owners
Contributions of equity, net oftransaction costs 11,338,007 - - - 11,338,007 - 11,338,007
Shares issued as consideration foracquisitions 1,020,000 - - - 1,020,000 - 1,020,000
Share-based payment expense - - 813,377 - 813,377 - 813,377
Total transactions with owners 12,358,007 - 813,377 - 13,171,384 - 13,171,384
At 30 June 2010 61,483,094 (39,124,594) 2,520,232 (460,634) 24,418,098 1030 24,419,128
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Part 8 Consolidated Statements of Changes in Equity (Continue)
Reserves
Issuedcapital
Accumulatedlosses
Equity-settled
benefit
Foreigncurrency
translationreserve
Total
Non-controlling
interestTotal equity
$ $ $ $ $ $ $
Total comprehensive income for the year
Loss for the year (17,284,604) (17,284,604) 53 (17,284,551)
Other comprehensive income
Foreign currency translation reservedifferences
(516,855) (516,855) 58 (516,797)
Total comprehensive income for the year (17,284,604) (516,855) (17,801,459) 111 (17,801,348)
Transaction with owners, in their capacity asowners
Issue of shares 5,500,000 5,500,000 5,500,000
Transaction costs from issue of shares (296,574) (296,574) (296,574)
Issue of shares as share based payments 162,083 (162,083) -
Share based payment expenses 2,022,735 2,022,735 2,022,735
Total transactions with owners 5,365,509 1,860,652 7,226,161 7,226,161
At 30 June 2011 66,848,603 (56,409,198) 4,380,884 (977,489) 13,842,800 1,141 13,843,941
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Part 9 Commentary on Results
The Dyesol board and management challenge is threefold: (1) optimising the use of cash ascommercial opportunities expand, (2) exploiting the company's existing and developingintellectual property portfolio and (3) establishing long-term, exclusive, global, commercialcollaborations. On that score, we are very happy with our progress in FY2011 and are nowbeginning to see tangible evidence of our investment. Few companies, if any, have the
outstanding commercial prospects that Dyesol enjoys.
The increase in financial net loss by 20% to $17.28 million is attributable to a number offactors. The implementation of the Dyesol employee share ownership plan (ESOP) resulted inalmost half of the increased loss attributable to non-cash items. This is a key part of theboard's employee incentive and retention strategy. Other non-cash loss items of significanceinclude an increase in forex related losses as the Australian dollar continued to appreciateduring the period along with our international commitments. Increased cash loss items ofsignificance include those related to senior management changes (-$560k), milestone basedpayments to CSIRO (-$462k) and expenses related to increased business developmentactivity. The level of percentage subsidy from the Welsh Assembly Government also declinedas the three year project neared its successful completion in July 2011. Many of theseexpenses are either abnormally high or have a "one-off" character. This explanation isstrongly supported by the gradual decline and stabilisation in monthly cash burn over the past
six months - three months either side of the end of last financial year. As an offset, marketingrelated expenses fell by a commensurate amount as related travel and consultancies werereduced as the company focussed on achieving better quality revenue streams.
A pleasing aspect of this year's accounts is the stabilisation of cash utilisation. Net operatingcash usage for 2011 at $10.97 million was similar to that of 2010 at $10.91 million. This wasachieved despite a significant fall in operational revenue from $3.0 million to $1.4 million.Dyesol has changed its emphasis to long-term wealth creation as the prospects of itscommercial collaborations become more certain. Both steel and glass projects are firmly ontrack - on time and within budget. Future cost trends should see further reduction in corporatedevelopment expenditure and administration while increasing commitments will be directed todelivering our products to the market through engineering development, technologyinnovation and expansion of materials production, which will be countered by significantrevenue generated by the commercialisation success of its multi-national collaborators.
The company's balance sheet has finished the financial year in a robust position. Theprincipal change is the reduction in net assets by $10.6 million. This reflects lower net cashreserves and an increase in equity-related loans or current liabilities. Notably, currentliabilities have fallen by $0.8 million subsequent to balance date. In essence, theestablishment of an equity loan facility means the company can carry less cash which helpsameliorate shareholder dilution in the transition period between formal commercialisation andgeneration of substantial partnership related cash flow. Reduced cash at bank is more thanoffset by undrawn and flexible loan facilities of approximately $20 million. Dyesol's financialprospects are also strongly enhanced by the reliance of its collaborators on materials supplyand future technology this is our responsibility and where we will direct our efforts. As theseprojects enter the production phase, Dyesol will generate the cash necessary through a mix ofgovernment incentives, partner finance and in-company equity finding the best balance toreturn value to shareholders.
Since listing on the Australian Securities Exchange (ASX), Dyesol's principal objective hasbeen to effectively manage the risk in transitioning from research and development to full-scale commercialisation of a new, disruptive solar technology, dye solar cells (DSC). Thereality and excitement of this prospect will become increasingly apparent in the forthcomingperiod. Tata, in particular, has published exciting global commercialisation opportunities that,on commitment, will help transform Dyesol to a major specialist materials supplier for themulti-billion dollar building integrated photovoltaic market (BIPV).
Audited accounts will be finalised for the market on schedule.
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Part 10 Revenue and Expenses
The loss before income tax includes the following items ofrevenue and expense:
2011$
2010$
(a) Revenue from continuing operationsRendering of services 27,312 378,692Sale of goods 1,385,990 2,663,329
1,413,302 3,042,021
Interest revenue 161,786 168,473
Other incomeGovernment grant 1,109,897 1,419,528Other revenue 62,531 79,754
1,172,428 1,499,282
Total revenue from continuing operations 2,747,516 4,709,776
(b) Depreciation, amortisation and impairment loss
Amortisation of intangible assets 270,067 248,739Impairment of Goodwill 146,922 -Depreciation expense 1,983,954 2,118,891
2,400,943 2,367,630
(c) Finance costs
Interest expense 71,264 1,928
71,264 1,928
(d) Employee benefits expense
Wages and salaries costs 5,678,173 5,276,582Equity-settled share-based payments to employees anddirectors 2,005,486 813,377Equity-settled share-based payments to consultant 17,250 -Superannuation costs 308,280 335,679Redundancy payment 5,885 5,667(Decrease)/increase in liability for annual leave 14,103 (7,056)Increase/(decrease) in liability for long service leave 17,447 16,684
8,046,624 6,440,933
Part 11 Notes to the Statement of Cash Flows
2011$
2010$
(a) Reconciliation of cash
Cash at the end of the financial year as shown in thestatement of cash flows is reconciled to the related items inthe balance sheet as follows:
Cash and cash equivalents 6,293,440 13,137,203
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Part 11 Notes to the Statement of Cash Flows (continued)
2011$
2010$
(b) Reconciliation of net cash flows from operatingactivities to loss after income tax
Loss for the period (17,284,551) (14,372,212)
Add non-cash items:
- Depreciation 1,983,954 2,118,891- Amortisation 270,067 248,739- Goodwill impairment 146,922 -- Equity settled share-based payments 2,022,736 837,621- Unrealised exchange losses 178,818 (3,198)- Loss on movement in fair value of derivative liability 363,032 -
- Loss on sale of property , plant & equipment 5,592 -
Operating loss before changes in assets and liabilities (12,313,430) (11,170,159)
Changes in assets and liabilities during the period:
(Increase)/ decrease in trade and other receivables 1,039,881 (509,365)
Decrease/(increase) in other current assets (94,370) 94,070Increase in inventories 341,288 (178,602)Increase in trade and other payables 107,203 925,036Increase in provisions 31,550 9,626Decrease in deferred tax liability (81,158) (76,245)
Net cash used in operating activities (10,969,036) (10,905,639)
Part 12 Details Relating to Dividends
Date the dividend is payable N/A
Record date to determine entitlement to the dividend N/A
Amount per security N/ATotal dividend N/A
Amount per security of foreign sourced dividend or distribution N/A
Details of any dividend reinvestment plans in operation N/A
The last date for receipt of an election notice for participation in anydividend reinvestment plans
N/A
Part 13 Earnings per Share
2011 2010
Basic loss per ordinary share (11.92 cents) (11.04 cents)Diluted loss per share is not shown as all potential ordinary shares on issue woulddecrease the loss per share and are thus not considered dilutive.
No. No.Weighted average number of ordinary shares used as thedenominator in the calculation of basic loss per share 145,054,856 130,234,536
Part 14 Net Tangible Assets per Security
2011 2010
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Net tangible asset backing per ordinary security 3.48 Cents 11.50 Cents
Part 15 Details of Entities Over Which Control has been Gained or Lost
Name of entity N/A
Date control gained or lost N/A
Contribution of the controlled entity to the profit/(loss) fromordinary activities during the period, from the date of gaining orlosing control
N/A
Profit (loss) from ordinary activities of the controlled entity forthe whole of the previous corresponding period
N/A
Part 16 Issued Securities
2011($)
2010($)
Share capital
153,894,736 (2010: 142,875,632) fully paid ordinary shares 66,848,603 61,483,094
The following movements in issued capital occurred during the year:
Number ofOrdinary Fully
Paid Shares
IssuedCapital
($)
Balance at beginning of year 142,875,632 61,483,094Placement of shares for cash at $ 0.65 (2010: $1) 8,461,539 5,500,000Issue of shares as a share base payment 2,557,565 162,083Transaction costs of share issues - (296,574)
Balance at the end of year 153,894,736 66,848,603
2011Number 2010Number
Share Options
Options exercisable 8,714,000 4,314,000
The following movements in the number of
options occurred during the financial period:
Balance at the beginning of year 4,314,000 1,814,000
Issue of options to employees, directors andconsultants for nil consideration 5,000,000 3,000,000
Options lapsed (600,000) (500,000)
Balance at the end of year 8,714,000 4,314,000
Other Share Options
During the year the Company granted the following options over unissued ordinary shares:- 2,000,000 options exercisable at $1.00 each on or before 30 November 2013.- 2,500,000 options exercisable at $ 0.925 each on or before 29 April 2015.- 500,000 options exercisable at $ 0.89 each on or before 22 December 2013.
During the year the following options over unissued ordinary shares lapsed:- 600,000 options exercisable at $1.25 each on or before 15 November 2010.
No options were exercised during the year.
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At balance date, unissued ordinary shares of the Company under share option are:
- 714,000 options exercisable at $1.16 each on or before 31 December 2012.
- 2,000,000 options exercisable at $1.10 each on or before 27 November 2012.
- 1,000,000 options exercisable at $1.20 each on or before 27 November 2013.
- 2,000,000 options exercisable at $1 each on or before 30 November 2013.
- 2,500,000 options exercisable at $ 0.925 each on or before 29 April 2015.
- 500,000 options exercisable at $ 0.89 each on or before 22 December 2013
These options do not entitle the holder to participate in any share issue of the Company or any otherbody corporate.
2011Number
2010Number
Share rights
Share rights exercisable 1,672,038 2,512,695
The following movements in the number of
share rights occurred during the financial period:
Balance at the beginning of year 2,512,695 -
Issue of share rights to employees for nil consideration 124,000 2,512,695
Share rights lapsed (361,186) -
Share rights exercised (603,471) -
Balance at the end of year 1,672,038 2,512,695
Part 17 Subsequent Events
1. On 5 July 2011 SpringTree Special Opportunities Fund LP exercised their right to convertAUD800,000 of the Convertible Security into 2,076,843 shares at the conversion price ofAUD0.3852 per share, pursuant to Section 7.2 of the Share Purchase and Convertible SecurityAgreement between Dyesol Limited and SpringTree Special Opportunities Fund, LP datedMay 3, 2011.
2. On 4 August 2011, 934,798 shares were issued to SpringTree Special Opportunities Fund LPat the conversion price of AUD0.4279 per share in respect to AUD400,000 advanced to DyesolLimited on 6 July 2011, in accordance to Section 7.1 of the Share Purchase and ConvertibleSecurity Agreement between Dyesol Limited and SpringTree Special Opportunities Fund, LPdated May 3, 2011.
3. On 24 August 2011, 576,686 shares were issued to employees upon vesting of share rights andautomatic conversion into shares. The share rights were vested upon achievement ofemployees performance conditions pursuant to the Companys Employee Incentive OptionPlan. The share based payments made to employees were valued based on the closing shareprice of $1.05, by reference to the ASX at the date of grant.
4. On 29 August 2011, 500,000 options have been granted to an employee as remuneration forservices provided to the Company. The share based payments was valued based on the closingshare price of $0.47, by reference to the ASX at the date of grant.
5. Mr. Gerry Grove-White joined the board as a non-executive director in August 2011.
Part 18 Audit Status
This report is based on accounts to which one of the following applies:(Tick one)
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The accounts have been audited The accounts have been subject to review
The accounts are in the process of beingaudited or subject to review
The accounts have not yet been audited orreviewed
If the accounts have not yet been audited or subject to review and are likely to be subject todispute or qualification, a description of the likely dispute or qualification:
Not Applicable
If the accounts have been audited or subject to review and are subject to dispute or qualification,a description of the dispute or qualification:
Not Applicable