For personal use only - ASX · the past 12 years, focusing on Capital Raisings, Portfolio...

ADVANCED ENGINE COMPONENTS LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 30 JUNE 2015

ABN 67 009 081 770

For

per

sona

l use

onl

y

ADVANCED ENGINE COMPONENTS LIMITED ANNUAL REPORT


Table of Contents

Annual Report

Corporate Information 1

Directors’ Report 2

Statement of Profit or Loss and Other Comprehensive Income 10

Statement of Financial Position 11

Statement of Changes in Equity 12

Statement of Cash Flows 13

Notes to the Financial Statements 14

Directors’ Declaration 30

Independent Auditors Report 31

Auditor’s Independence Declaration 35

Corporate Governance Statement 36

Additional ASX Information 43

For

per

sona

l use

onl

y



1

Corporate Information

ASX Code ACE (currently suspended)

Directors

Mr Faldi Ismail (appointed 5 June 2015)

Dr Brendan de Kauwe (appointed 5 June 2015)

Mr Nicholas Young (appointed 5 June 2015 and resigned 27 October 2015)

Mr Peter Wall (appointed 27 October 2015)

Mr Chris Ntoumenopoulos (appointed 27 October 2015)

Mr Graham Keys (resigned 5 June 2015)

Mr Antony Middleton (resigned 5 June 2015)

Mr Kin Wa Pun (Albert) (resigned 5 June 2015)

Mr Manharial Bhaichand Gathani Jain (resigned 5 June 2015)

Mr Mark Summers and Mr Jack James were appointed as Administrators of the Company on 29 August 2014. On 24 October 2014 Mr Summers and Mr James were appointed as Joint and Several Deed Administrators of the Company. Mr Summers subsequently resigned as Administrator of the Deed leaving Mr James as sole Administrator until the effectuation of the Deed of Company Arrangement (“DOCA”) on 23 September 2015. During this period, the powers of the Company’s officers (including Directors) were suspended and the administrators assumed control of the Company’s business.

Company Secretary Company Secretary during Financial Year

Ms Shannon Coates (appointed 24 September 2015) Ms Alicia Mitton (resigned 16 December 2014)

Registered Office Share Registrar

108 Outram Street Automatic Registry Services West Perth WA 6005 Level 1, 7 Ventnor Avenue Tel: (08) 9486 7244 West Perth WA 6005 Fax: (08) 9463 6373 Tel: 1300 288 664 Auditors (appointed 5 June 2015)

Postal Address Ernst & Young PO Box 1974 11 Mounts Bay Road West Perth WA 6872 Perth WA 6000

For

per

sona

l use

onl

y



2

Directors’ Report

The Directors submit their report on Advanced Engine Components Limited (“ACE” or “the Company”) and the entities it controlled at the

end of, or during (the “Group”), the year ended 30 June 2015.

Directors

The names of the Company Directors in office during the financial year and until the date of this report were as follows.




Mr Peter Wall (appointed 27 October 2015)

Mr Chris Ntoumenopoulos (appointed 27 October 2015)





Mr Mark Summers and Mr Jack James were appointed as Administrators of the Company on 29 August 2014. On 24 October 2014 Mr Summers and Mr James were appointed as Joint and Several Deed Administrators of the Company. Mr Summers subsequently resigned as Administrator of the Deed leaving Mr James as sole Administrator until the effectuation of the DOCA on 23 September 2015. During this period, the powers of the Company’s officers (including Directors) were suspended and the administrators assumed control of the Company’s business.

Faldi Ismail (appointed 5 June 2015)

Mr Ismail has significant experience working as a corporate advisor specialising in the restructure and recapitalisation of a wide range of ASX-listed companies having many years of investment banking experience covering multiple sectors. He has significant cross-border experience, having advised on numerous overseas transactions including capital raisings, structuring of acquisitions and joint ventures in numerous countries. Mr Ismail is also a Director of dual listed Asiamet Resources Limited, (TSX-V/AIM listed – Ticker Code “ARS”) and additionally is the founder and operator of Otsana Capital, a boutique advisory firm specialising in mergers & acquisitions, reverse takeovers, capital raisings and initial public offerings. Mr Ismail is currently a Non-Executive Director of the following ASX-listed companies: Galicia Energy Corporation Ltd (ASX:GAL), WHL Energy Limited (ASX: WHN), BGD Corporation Limited (ASX:BGD) and Marion Energy Limited (ASX: MAE).

Brendan de Kauwe (appointed 5 June 2015)

Dr de Kauwe studied a Bachelor of Science and Bachelor of Dental Surgery from the University of Western Australia. He also holds a Post Graduate Diploma in Applied Finance, majoring in Corporate Finance, and is currently completing his Masters in Applied Finance. He is also an ASIC compliant (RG146) Securities Advisor. Dr de Kauwe’s extensive science and bio-medical background with more than 10 years’ experience in the health sector; coupled with his finance backing, gives him an integral understanding in the evaluation of projects over a diverse range of sectors. Dr de Kauwe has held the following ASX listed roles: Executive Chairman – Actinogen Ltd (ASX: ACW); Director – Raya Group Limited (ASX:RYG), Director – Prescient Therapeutics Ltd (ASX: PTX) (Formerly Virax Holdings Ltd); Director – Cossack Energy Ltd. As an advisor with Otsana Capital he has been involved in a number of corporate restructures, capital raisings, and evaluations of a diverse range of assets.

Peter Wall (appointed 27 October 2015)

Mr Peter Wall LLB BComm MAppFin FFin is a corporate lawyer and has been a Partner at Steinepreis Paganin (Perth based corporate law firm) since July 2005. Peter graduated from the University of Western Australia in 1998 with a Bachelor of Laws and Bachelor of Commerce (Finance). He has also completed a Masters of Applied Finance and Investment with FINSIA. Peter has a wide range of experience in all forms of commercial and corporate law, with a particular focus on technology, equity capital markets and mergers and acquisitions. He also has significant experience in dealing in cross border transactions. Mr Wall has been a director of the following other ASX listed companies: Burleson Energy Ltd (current), GRP Corporation Ltd (current), Dourado Resources NL (current), Phytotech Medical Limited (current), Minbos Resources Limited (current), MyFiziq Limited (current), Activistic Ltd (current), Global Metals Exploration NL (current), Discovery Resources Limited (ceased 8 November 2013), NSL Consolidated Limited (ceased 20 December 2012), BrainChip Holdings Ltd (ceased 4 August 2015)

For

per

sona

l use

onl

y



3

Directors’ Report (continued)

Chris Ntoumenopoulos (appointed 27 October 2015)

Mr Ntoumenopoulos is a partner at CPS Capital, a WA based Stockbroking and Corporate Advisory firm. He has worked in financial markets for the past 12 years, focusing on Capital Raisings, Portfolio Management and Corporate Advisory. Mr Ntoumenopoulos has advised and funded numerous ASX companies from early stage venture capital, through to IPO. He is an executive director of various private companies which span across finance, technology and medical sectors. Mr Ntoumenopoulos has a Bachelor of Commerce degree from the University of WA, majoring in Money and Banking, Investment Finance and Electronic Commerce. Chris is currently a director of ResApp Health Limited.

Nicholas Young (appointed 5 June 2015 and resigned 27 October 2015)

Mr Young holds a Bachelor of Commerce, majoring in Accounting and Finance is, a Chartered Accountant and has completed the Insolvency Education Program at the Australian Restructuring Insolvency and Turnaround Association. Nicholas commenced his career in the Corporate Restructuring division of an accounting firm and has gained valuable experience in Australia and Southern Africa, across a wide range of industries, including mining and exploration, mining services, renewable energy, professional services, manufacturing and transport. Mr Young has been involved in the recapitalisation of various ASX-listed companies. Mr Young has held the following ASX listed roles: Director - BGD Corporation Limited (10 September 2014 to 1 February 2015) and Director - Marion Energy Limited (appointed 28 October 2015 to 5 November 2015).

Graham Keys (resigned 5 June 2015)

Mr. Keys is a former corporate finance partner of Ernst & Young. He has experience as Executive Director, and subsequently Managing Director,

of a publicly listed company, as non-executive Chairman of publicly listed companies and as the executive officer of two large private companies.

He formed Norvest Corporate Pty Ltd, a specialist corporate advisory firm, in April 2000 and is the current Executive Chairman of that company.

He was appointed a Non-executive Director of ACE on 9 May 2003 and Chairman on 19 October 2004. During the past three years, Mr. Keys has

also served as a director of Brand New Vintage Ltd and Sterling Biofuels International Ltd.

Antony Middleton (resigned 5 June 2015)

Mr. Middleton holds a Bachelor of Engineering and Master of Business Administration from the University of Western Australia, and a Company

Directors’ Diploma from the University of New England. Mr. Middleton has held senior management positions with government agencies

including Chairman and Chief Executive Officer of Transperth and also on various international engineering projects. He is past National

Chairman and a Fellow of the Chartered Institute of Logistics and Transport in Australia, and a Fellow of the Institution of Engineers (Australia).

Mr. Middleton is currently the President of Natural Gas Vehicles for Australia (NGVA) the body representing all sectors of the natural gas vehicle

industry in Australia. Mr. Middleton was appointed a Director of ACE in March 1997 and Chairman in December 2002. He retired as Chairman

and was appointed Managing Director in August 2003. During the past three years Mr. Middleton has not served as a director for any other

Australian listed companies.

Kin Wa Pun (Albert) (resigned 5 June 2015)

Mr Pun has significant international investment experience. Mr Pun is the Managing Director and founder of Cherry Capital Management

Limited (“Cherry”), a Hong Kong based financial advisory company, providing strategic and financial advice to its clients. He is currently

appointed as the Chief Advisor of KGI Asia Limited, a Hong Kong based regional investment bank. Prior to joining Cherry, Mr Pun was the Chief

Financial Officer and a member of the board of Directors of KG Investment Holdings Limited, a regional financial services group in Hong Kong.

Both KGI Asia Limited and KG Investment Holdings Limited are part of the Koos Group which is one of the largest business groups in Taiwan. Mr

Pun also previously worked at Morgan Stanley Asia Limited as Vice President. Mr Pun has a Master of Sciences and Bachelor of Social Sciences

degree from the University of Hong Kong. Mr. Pun was appointed a Non-executive Director of ACE on 28 November 2006. During the past three

years Mr. Pun has not served as a director for any other Australian listed companies.

Manharlal Bhaichand Gathani Jain (resigned 5 June 2015)

Mr Gathani is a Director of PKF Tax Services Sdn Bhd in Malaysia and a Fellow of the Malaysian Institute of Taxation. He joined the Inland Revenue Board of Malaysia (IRB) soon after completing his Bachelor of Arts at the University of Malaya. His long service culminated in the Directorship of the East Malaysian IRB office of Sabah in 1975. He was awarded the "Ahli Darjah Setia Kinabalu" (ADSK) title by the Yang Di Pertua Sabah in 1978. He has successfully integrated his long civil service career with a successful professional practice since his departure from the IRB. Mr Gathani’s experience and interpretation of the tax laws have gained him wide recognition in the business community. He has acted as an advisor to a number of corporations for all kinds of strategic tax and business related matters. He has also served in the publication committee of the Malaysian Institute of Taxation.

For

per

sona

l use

onl

y



4


Principal Activities

The Company’s principal activities is the sale of ACE patented Natural Gas Vehicle Systems (“NGVS”), natural gas engines incorporating ACE’s NGVS and associated components and spare parts. The Company did not trade during the year.

Operating Results

The loss after tax for the year attributable to the members of Advanced Engine Components Limited was $154,952 (2014: $90,948).

Dividends

No dividends have been declared or paid to shareholders at the date of this report (2014: nil).

Review of Operations

Due to funding difficulties during the prior period, the Company reviewed various strategies for the ongoing development and

commercialisation of its technology and products. As a result of these reviews and to conserve available cash the Company ceased its

product development and trading operations in prior year.

Significant Changes in State of Affairs

There were no significant changes in the State of Affairs throughout the Financial Year.

Incomplete records

Due to funding difficulties during the prior period, the Company reviewed various strategies for the ongoing development and

commercialisation of its technology and products. As a result of this review, product development and trading operations were minimised

and in April 2011 the operations of the Group were placed on care and maintenance. At its request the Company was suspended from

trading on the Australian Securities Exchange (“ASX”) on 5 April 2011. In addition, on 12 November 2013, the Company announced that it

had signed a co-marketing and supply agreement for its China business, as an extension of the BSA, under which it had agreed to sell its

China inventory, equipment, customer and supplier contracts to the Purchaser.

On 29 August 2014, the Board resolved to place the Company into voluntary administration and appointed Mr Mark Summers and Mr Jack

James of Palisade Business Consulting as joint and several administrators of the Company. Following appointment of the administrators, the

powers of the Company’s officers (including Directors) were suspended and the administrators assumed control of the Company’s business,

property and affairs.

The financial report has been prepared by Directors who were not in office for the periods presented in this report, nor were they parties

involved with the Company and did not have oversight or control over the group’s financial reporting systems including but not limited to

being able to obtain access to complete accounting records of the Company. In addition, Directors have not been able to source books and

records of the company’s subsidiaries and associate. The Directors who prepared this financial report were appointed on or after 5 June

2015. Every reasonable effort has been made by the Directors to ascertain the true position of the Company as at 30 June 2015.

To prepare the financial report, the Directors have reconstructed the financial records of the Group using data extracted from the Group’s

accounting system for the entire financial year. However, there may be information that the current Directors have not been able to obtain,

the impact of which may or may not be material on the financial statements.

These financial statements do not contain all the required information or disclosures in relation transactions undertaken by the Company as

this information is unascertainable due to the administration process and/or the change in directorships and key management personnel.

Consequently, although the Directors have prepared this financial report to the best of their knowledge based on the information made

available to them, they are of the opinion that it is not possible to state that this financial report has been prepared in accordance with

Australian Accounting Standards including Australian interpretations, other authoritative pronouncements of the Australian Accounting

Standard Board and the Corporations Act 2001, nor is it possible to state this financial report gives a true and fair view of the Group’s

financial position.

For

per

sona

l use

onl

y



5


After Balance Sheet Date Events

On 7 September 2015, 25,000,000 promotor placement shares were issued for a total of $250, 5,000,000 creditor placement shares were

issued pursuant to the DOCA and 25,000,000 promoter placement options were issued.

On 22 September 2015, the Company entered into a number of identical convertible loan agreements with unrelated parties (except for as

detailed below) for a total amount of $300,000. The Company must seek shareholder approval to convert the loaned amounts no later than 3

months after 22 September 2015. Subject to the Shareholder approval being obtained, each convertible loan holder irrevocably directs the

Company to satisfy the repayment of the funds advanced by issuing Shares at a deemed issue price of $0.02 per Share upon conversion.

If Shareholder approval is not obtained, the funds advanced are repayable no later than 4 months after 22 September 2015 or any other date as is agreed in writing between the parties. The Company may repay funds advanced at any time and amount repaid cannot be redrawn. No interest is payable and no security is required. One of the convertible loan agreements, for an amount of $20,000, is held by Davinch Pty Ltd, an entity controlled by Mr Chris Ntoumenopoulos, a current Director of the Company.

On 23 September 2015, the DOCA was wholly effectuated and control of the Company reverted back to the Board of Directors.

On 24 September 2015, Ms Shannon Coates was appointed as Company Secretary of the Company.

On 5 October 2015, the Company announced that it had signed a binding Heads of Agreement to acquire 100% of Investia Technologies Pty

Ltd (“Investia”), a software and technology development company. In consideration for the acquisition and subject to the necessary

shareholder approvals, ACE will issue to Investia shareholders:

- 17,500,000 fully paid ACE shares at a deemed price of $0.02 and 17,500,000 options exercisable at $0.03 each, expiring three years from

date of issue; and

- Up to 32,500,000 deferred consideration shares subject to certain milestones being achieved.

Settlement of the acquisition will be subject to the required regulatory approvals and completing a capital raising of a minimum of

$3,400,000 through the offer of ACE shares at a price of not less than $0.02 per share.

On 27 October 2015, the Company announced the appointments of Mr Peter Wall and Mr Chris Ntoumenopolous as Non-Executive Directors and the resignation of Mr Nicholas Young as a Non-Executive Director.

Other than as outlined above, at the date of this report, there are no matters or circumstances which have arisen since 30 June 2011 that

have significantly affected or may significantly affect:

the operations, in financial years subsequent to 30 June 2013, of the Consolidated Entity;

the results of those operations, in financial years subsequent to 30 June 2013, of the Consolidated Entity; or

the state of affairs, in financial years subsequent to 30 June 2013, of the Consolidated Entity.

Future Developments, Prospects and Business Strategies Other than those matters noted elsewhere in this financial report, likely developments, future prospects and business strategies of operations have not been included in this report as the Directors believe, on reasonable grounds, that the inclusion of such information would be likely to result in unreasonable prejudice to the Company.

Environmental Issues

The Company is not subject to any significant environmental regulations under either Commonwealth or State legislation. The Board is not

aware of any breach of environmental requirements as they apply to the Company.

For

per

sona

l use

onl

y



6


Directors’ Interests

As at the date of this report, the interests of the Directors at the date of this report in shares and options of Advanced Engine Components

Limited were:

Director Number of

Ordinary Shares (i)

Number of Options over

Ordinary Shares(i)(ii)

Mr Faldi Ismail 2,500,000 6,250,0001

Dr Brendan de Kauwe - -

Mr Peter Wall

Mr Chris Ntoumenopoulos2

-

-

-

-

1. Exercisable at $0.02 on or before 3 September 2019 2. An entity associated with Mr Ntoumenopolous holds one convertible note with a face value of $20,000, convertible at $0.02 per

share, subject to Shareholder approval.

Director Options Holdings at 30 June 2015

The Directors in office at the date of this Directors Report are not in a position to confirm the accuracy or otherwise of Director Options Holdings Movements for the 30 June 2015 Financial Year in this Report.

Director Shareholdings at 30 June 2015

The Directors in office at the date of this Directors Report are not in a position to confirm the accuracy or otherwise of Director Shareholding Movements for the 30 June 2015 Financial Year in this Report.

For

per

sona

l use

onl

y



7


Remuneration Report (Audited) The financial report has been prepared by Directors who were not in office for the periods presented in this report, nor were they parties involved with the Company and did not have oversight or control over the group’s financial reporting systems including but not limited to being able to obtain access to complete accounting records of the Company, its subsidiaries and associate. The Directors who prepared this financial report were appointed on or after 5 June 2015. The Directors who are in office at the date of this report had no involvement in adopting, implementing or complying with the remuneration policies during the financial period being reported on. These policies may or may not have been in place during the financial period.

If the recapitalisation process is successful, the Directors who are in office at the date of this report will adopt a new remuneration policy in

accordance with the corporate governance framework adopted by the Board on 11 October 2015.

(a) Names of the Company Directors at any time during the financial year








(b) Remuneration Policy

The objective of the Company’s key management personnel reward framework was to ensure reward for performance is competitive and

appropriate for the results delivered.

ACE’s remuneration policy was designed to align Director and key management personnel objectives with shareholder and business

objectives by providing a fixed remuneration component and offering specific short and long-term incentives. There is no direct relationship

between performance and Non-Executive Directors and key management personnel remuneration. In assessing individual remuneration

levels consideration was given to the employee’s service to reward the achievement of corporate goals and strategic objectives. The Board

of ACE believed the remuneration policy to be appropriate and effective in its ability to attract and retain the best key management

personnel and Directors to run and manage the Company to create goal congruence between Directors, key management personnel and

shareholders, and to remunerate these key management personnel and Directors on normal commercial terms commensurate with their

experience and responsibilities.

During the year ended 30 June 2015 ACE did not have a separately established remuneration committee. The duties and responsibilities

typically delegated to such a committee were included in the responsibilities of the full Board.

The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives was as follows:

The remuneration policy, setting the terms and conditions for the Executive Director and key management personnel, was approved by the

non-executive Directors on the Board. All key management personnel receive a base salary (based on factors such as length of service and

experience), superannuation, fringe benefits, options and performance incentives. The Board reviews key management personnel packages

annually by reference to the economic entity’s performance, key management personnel performance and comparable information from

industry sectors and other listed companies in similar industries.

The Managing Director and key management also receive a superannuation guarantee contribution required by the government, which was

9%, and did not receive any other retirement benefits.

All remuneration paid to Directors and key management personnel is valued at the cost to the Company and expensed.

The Board policy was to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment and

responsibilities but which also took into consideration the financial state of the company. The Board determined payments to the Non-

Executive Directors and reviewed their remuneration annually. The maximum aggregate amount of fees that can be paid to Non-Executive

Directors is subject to approval by shareholders at the Annual General Meeting.

Other than as stated above, to 30 June 2014 there was no direct relationship between performance and Director and key management personnel remuneration.

For

per

sona

l use

onl

y



8

Directors’ Report (continued) Remuneration Report (Audited) (continued)

(c) Options Issued as Part of Remuneration for the Year Ended 30 June 2015

During the year the Company did not grant any options over ordinary shares to the Managing Director and key management personnel as

part of their remuneration (2015: Nil).

(d) Compensation of key management personnel:



being able to obtain access to complete accounting records of the Company, its subsidiaries and associate. The Directors who prepared this

financial report were appointed on or after 5 June 2015. Accordingly, the Company does not have adequate information to enable the

remuneration report disclosures required by Corporations Act 2001 for the year ended 30 June 2014 or for the comparative period of 30 June

2013.

(e) Transactions and balances with Key Management Personnel As detailed in Note 2 (b) to the financial statements, the directors do not have access to sufficient information to enable detailed disclosure to be made in respect of transactions and balances with Key Management Personnel.

(f) Employment Contracts with Key Management Personnel

The Company has entered into letters of appointment with each of its non-executive directors, with each entitled to a fee of $2,000 per month and otherwise on standard terms for agreements of this nature.

End of remuneration report

For

per

sona

l use

onl

y



9

Directors’ Report (continued) Shares Under Option

There were no unissued ordinary shares under options as at 30 June 2015. There are 25,000,000 ordinary shares are under options (on a

post-consolidation basis) as at the date of this report. Meetings of Directors

There were no Director meetings held during the financial year. Meetings of Audit Committee There were no audit committee meetings held during the financial year.

Indemnifying Officers

The Directors of the Company, for the year ended 30 June 2015, were indemnified by the Company against any liability incurred by them in

their capacity as officers in defending any proceedings, whether civil or criminal, in which judgment is given in their favour or in which they

are acquitted or in connection with any application in relation to any such proceedings in which relief is under the Law granted to them by

the Court.

Proceedings on Behalf of Company

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the

Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

The Company was not a party to any such proceedings during the year.

Indemnification of auditors

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit

engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to

indemnify Ernst & Young during or since the financial year.

Auditor’s Independence Declaration

The auditor’s independence declaration for the year ended 30 June 2015 has been received and can be found on page 35.

Non-Audit Services

No fees for non-audit services were paid to the external auditors during the year ended 30 June 2015 (2014: Nil).

Signed in accordance with a resolution of the Board of Directors.

Faldi Ismail Non-executive Chairman Perth, Western Australia Dated: 18 November 2015

For

per

sona

l use

onl

y



10

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the Financial Year Ended 30 June 2015

Notes 30 Jun 2015

$

30 Jun 2014

$

Revenue - -

Cost of sales - (58,053)

Gross profit / (loss) - (58,053)

Other income 4 - 1,931

Distribution expenses - (72)

Administrative expenses 4 (154,952) (34,600)

Other operating expenses 4 - (154)

Results from operating activities (154,952) (90,948)

Loss before income tax benefit (154,952) (90,948)

Income tax benefit 5 - -

Loss for the period (154,952) (90,948)

Other comprehensive income for the year, net of tax - -

Total comprehensive income (loss) for the year (154,952) (90,948)

Loss attributable to:

Members of the parent entity (154,952) (90,948)

(154,952) (90,948)

Total comprehensive income (loss) attributable to:

Members of the parent entity (154,952) (90,948)

(154,952) (90,948)

Basic and Diluted loss per share (cents per share) 15 (3.04) (1.79)

The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

For

per

sona

l use

onl

y



11

Consolidated Statement of Financial Position

As at 30 June 2015

Notes

30 Jun 2015

$

30 Jun 2014

$ Current Assets

Cash and cash equivalents 6 419 6,810 Trade and other receivables 7 - -

Total Current Assets 419 6,810

Total Assets 419 6,810

Current Liabilities

Trade and other payables 8 1,176,990 1,092,092

Borrowings 9 10,137,920 10,074,257

Provision 10 182,659 182,659

Total Current Liabilities 11,497,569 11,349,008

Total Liabilities 11, 497,569 11,349,008

Net Liabilities (11,497,150) (11,342,198)

Shareholders Deficit

Issued capital 11 21,193,635 21,193,635 Reserves 12 603,280 603,280 Accumulated losses (33,294,065) (33,139,113)

Total Shareholders Deficit (11,497,150) (11,342,198)

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

For

per

sona

l use

onl

y



12

Consolidated Statement of Changes in Equity

For the year ended 30 June 2015

Issued Capital $

Asset Revaluation

Reserve $

Share Based Payment Reserve

$

Accumulated Losses

$

Total $

Balance as at 1 July 2013 21,193,635 - 603,280 (33,048,165) (11,251,250)

Net Loss for the year - - - (90,948) (90,948)

Other comprehensive income/(loss) - - - - -

Total comprehensive loss for the year - - - (90,948) (90,948)

Transactions with owners, recognised directly in equity - - - - -

Balance as at 30 June 2014 21,193,635 - 603,280 (33,139,113) (11,342,198)

Balance as at 1 July 2014 21,193,635 - 603,280 (33,139,113) (11,342,198)

Net Loss for the year - - - (154,952) (154,952)

Other comprehensive income/(loss) - - - - -

Total comprehensive loss for the year - - - (154,952) (154,952)

Transactions with owners, recognised directly in equity - - - - -

Balance as at 30 June 2015 21,193,635 - 603,280 (33,294,065) (11,497,150)

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

For

per

sona

l use

onl

y



13

Consolidated Statement of Cash Flows

For the year ended 30 June 2015

Note 2015 2014

$ $

CASH FLOWS FROM OPERATING ACTIVITIES

Payments to suppliers and employees (70,054) (31,279)

Interest received - 1,931

Net cash used in operating activities 23 (70,054) (29,348)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from Borrowings 63,663 -

Repayment of borrowings - (19,937)

Net cash from/(used) in financing activities 63,663 (19,937)

Net increase /(decrease) in cash and cash equivalents (6,391) (49,285)

Cash and cash equivalents at the beginning of the financial

year

6,810 56,095

Cash and cash equivalents at the end of the financial year 6 419 6,810

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

For

per

sona

l use

onl

y

ADVANCED ENGINE COMPONENTS LIMITED NOTES TO THE FINANCIAL STATEMENTS


14

1. Reporting Entity

The consolidated financial statements of Advanced Engine Components Limited (“the Company”) for the year ended 30 June 2015 were authorised for issue in accordance with a resolution of the Directors on 18 November 2015. The Company was incorporated in Australia. The Group is a for-profit entity.

2. Basis of Preparation

(a) Statement of Compliance

These financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (“AASBs”) (including Australian interpretations) adopted by the Australian Accounting Standard Board (“AASB”) and the Corporations Act 2001 where possible (refer to note 2(b)). These financial statements of the Group also comply with the International Financial Reporting Standards (“IFRSs”) and interpretations adopted by the International Accounting Standards Board (“IASB”) where possible (refer to note 2(b)). The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity

The financial statements have been prepared on an accruals basis and is based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

(b) Incomplete records Due to funding difficulties during the prior period, the Company reviewed various strategies for the ongoing development and commercialisation of its technology and products. As a result of this review, product development and trading operations were minimised and in April 2011 the operations of the Group were placed on care and maintenance. At its request the Company was suspended from trading on the Australian Securities Exchange (“ASX”) on 5 April 2011. In addition, on 12 November 2013, the Company announced that it had signed a co-marketing and supply agreement for its China business, as an extension of the BSA, under which it had agreed to sell its China inventory, equipment, customer and supplier contracts to the Purchaser.

On 29 August 2014, the Board resolved to place the Company into voluntary administration and appointed Mr Mark Summers and Mr Jack James of Palisade Business Consulting as joint and several administrators of the Company. Following appointment of the administrators, the powers of the Company’s officers (including Directors) were suspended and the administrators assumed control of the Company’s business, property and affairs.



being able to obtain access to complete accounting records of the Company. In addition, Directors have not been able to source books and

records of the company’s subsidiaries and associate. The Directors who prepared this financial report were appointed on or after 5 June

2015. Every reasonable effort has been made by the Directors to ascertain the true position of the Company as at 30 June 2015.

To prepare the financial report, the Directors have reconstructed the financial records of the Group using data extracted from the Group’s accounting system for the entire financial year. However, there may be information that the current Directors have not been able to obtain, the impact of which may or may not be material on the financial statements.

These financial statements do not contain all the required information or disclosures in relation transactions undertaken by the Company as this information is unascertainable due to the administration process and/or the change in directorships and key management personnel.

Consequently, although the Directors have prepared this financial report to the best of their knowledge based on the information made available to them, they are of the opinion that it is not possible to state that this financial report has been prepared in accordance with Australian Accounting Standards including Australian interpretations, other authoritative pronouncements of the Australian Accounting Standard Board and the Corporations Act 2001, nor is it possible to state this financial report gives a true and fair view of the Group’s financial position.

(c) Going concern

The group incurred a loss of $154,952 for the year ended 30 June 2015. In addition, the Group has net current liabilities and shareholders’ deficit of $11,497,150.

The financial report has been prepared on the basis of a going concern, which assumes continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The Directors believe it is appropriate to prepare these accounts on a going concern basis because under the DoCA effectuated on 23 September 2015 the Company has extinguished all liabilities associated with the previous administration of the Company is in the process of undertaking the following transactions:

Completion of a capital raising to raise a minimum of $3,400,000.

For

per

sona

l use

onl

y



15

Acquisition of Investia Technologies Pty Ltd (“Investia”), a software and technology development company. In consideration for the

acquisition, ACE will issue to Investia shareholders:

o 17,500,000 fully paid ACE shares at a deemed price of $0.02 and 17,500,000 options exercisable at $0.03 each, expiring three

years from date of issue.

o Up to 32,500,000 deferred consideration shares subject to certain milestones being achieved.

Refer to Note 18: Events subsequent to reporting date for further details.

The cash flow forecast indicates that based on the completion of the capital raising as described above, the consolidated entity will have sufficient cash flows to meet all commitments and working capital requirements for a period of at least 12 months from the signing of this financial report. The directors are also confident that all the necessary regulatory approvals and requirements will be met to enable the company to be re-instated on the ASX and for the transaction with Investia to proceed. Accordingly, the directors are satisfied that the going concern basis of the preparation is appropriate.

Should the Group not achieve the matters set out above, there is significant uncertainty whether the Group will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

The financial report does not contain any adjustments relating to the recoverability and classification of recorded assets or liabilities that

might be necessary should the Group not be able to continue as a going concern.

3. Significant Accounting Policies

The accounting policies set out below have been applied consistently in the year ended 30 June 2015 financial statements.

(a) Basis of consolidation

Subsidiaries are entities controlled by the Company. Control exists when the Company has the power to govern the financial and operating

policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are

taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that

control commences until the date that control ceases.

For the purposes of the financial statements for the year ended 30 June 2015, the Directors have not been able to obtain financial

information of the group’s subsidiaries and accordingly, the financial information of the group’s subsidiaries have been deconsolidated

effective 1 July 2010.

(b) Foreign currency translation

Functional and presentation currency

The functional currency of each entity within the Group is measured using the currency of the primary economic environment in which

that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and

presentation currency.

Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction.

Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue

to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the

exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the profit or loss.

Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the

extent that the underlying gain or loss is recognized other comprehensive Income; otherwise the exchange difference is recognised in

profit or loss.

Group companies

The financial results and position of foreign operations whose functional currency is different from the Group’s presentation currency are

translated as follows:

assets and liabilities are translated at year-end exchange rates prevailing at that reporting period;

income and expenses are translated at average exchange rates for the period; and

retained earnings are translated at the exchange rates prevailing at the date of the transaction.

For

per

sona

l use

onl

y



16

Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position. These differences are recognised in the profit or loss in the period in which the operation is disposed of.

(c) Income tax

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax

rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts

expected to be paid to (recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused

tax losses.

Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax

relates to items that are credited or charged directly to equity.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the

liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in

which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that

future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets

and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable

that the reversal will occur in the foreseeable future.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or

simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where

a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation

authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous

realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax

assets or liabilities are expected to be recovered or settled

(d) Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

(a) Where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

(b) Receivables and payables are stated with amounts of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Balance Sheet.

Commitments or contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(e) Leases

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

Operating Leases

The minimum lease payments made under operating leases are charged against profits in equal instalments over the accounting periods covered by the lease term where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item.

The cost of improvements to or on leasehold property is capitalised, disclosed as leasehold improvements and amortised.

Finance leases

Leases which effectively transfer substantially all of the risks and rewards incidental to ownership of the leased item to the Company are capitalised at the present value of the minimum lease payments and disclosed as property, plant and equipment under lease. A lease liability of equal value is also recognised.

Capitalised lease assets are depreciated over the shorter of the estimated useful life of the assets and the lease term. Minimum lease payments are allocated between interest expense and reduction of the lease liability with the interest expense calculated using the interest rate implicit in the lease and recognised directly in net profit.

(f) Impairment of assets with indefinite useful life

The Group assesses at each reporting date whether there is an indication that an asset (or CGU) may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s or CGU’s recoverable amount. The recoverable

For

per

sona

l use

onl

y



17

amount is the higher of an asset’s or CGU’s fair value less costs to sell (FVLCS) and its value in use (VIU). The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the asset is tested as part of a larger CGU. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset/CGU is considered impaired and is written down to its recoverable amount

(g) Cash and cash equivalents

Cash and short-term deposits in the Balance Sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

(h) Trade and other receivables

Trade receivables, which generally have 30-90 day terms are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.

(i) Investments and jointly controlled entities

A jointly controlled entity (JCE) is a corporation, partnership or other entity in which each venturer holds an interest. A JCE operates in the same way as other entities, except that a contractual arrangement establishes joint control. A JCE controls the assets of the joint venture, earns its own income and incurs its own liabilities and expenses. Interests in JCEs are accounted for using the equity method

(j) Revenue recognition

Interest Revenue

Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

(k) Trade and other payables

Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services.

(l) Borrowings

All borrowings are initially recognised as the fair value of the consideration received less directly attributable transaction costs.

After initial recognition, interest-bearing borrowings are subsequent measured at amortised cost using the effective interest method.

(m) Borrowing costs

Borrowing costs are recognised as an expense when incurred, except where they are directly attributable to the acquisition or construction of qualifying assets, in which case they are capitalised as part of the cost of that asset.

(n) Provisions

Employee leave benefits

Provision is made for employee benefits accumulated as a result of the employee rendering services up to the reporting date. These benefits including on costs expected to be settled within one year, together with benefits arising from wages and salaries and annual leave which will be settled after one year, are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. Long service leave including on costs, payable later than one year have been measured at the present value of estimated future cash outflows to be made for those benefits using the projected unit credit method.

Warranty provisions

Provisions for warranty-related costs are recognised when the product is sold or service provided to the customer. Initial recognition is based on historical experience. The initial estimate of warranty-related costs is revised annually.

(o) Government grants

Government grants are assistance by the government in the form of transfers of resources to the Company in relation to the current development program.

Government grants are not recognised until it is reasonable assurance that the grants will be received.

(p) Share-based payments transactions

The Company operated an Employee Share Option Plan (ESOP), which provides benefits to employees (including Directors) of the Company in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (“equity-settled transactions”).

The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. Options granted as part of employee remuneration have been valued using an option pricing model which takes into account the

For

per

sona

l use

onl

y



18

factors including the option exercise price, the current level and volatility of the underlying share price, the risk-free interest rate, expected dividends on the underlying share, current market price of the underlying share, the expected life of the option, and any barriers associated with vesting.

The fair value of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance condition are fulfilled, ending on the date on which the relevant employee become fully entitled to the option (“vesting date”).

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:

The extent to which the vesting period has expired, and

The number of options that, in the opinion of the Directors of the Company, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions included in the determination of fair value at grant date.

No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional upon a market condition.

Where the terms of an equity-settled option are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as result of the medication, as measured at the date of modification.

Where an equity-settled option is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the option is recognised immediately.

(q) Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(r) Earnings per share

(i) Basic earnings per share

Basic earnings per share is determined by dividing net profit after income tax attributable to members of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(s) Accounting estimates and judgements

Estimated and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are:

Impairment Testing

The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data.

4. Other Income and Expenses 30 June 2015

$

30 June 2014

$

Other income

Interest received - 1,931

Other operating expenses

Foreign exchange net loss - 154

Administration expenses

Corporate expenses 154,952 34,600

154,952 34,600

For

per

sona

l use

onl

y



19

30 June 2015

$

30 June 2014

$

5. Income Tax Expenses

(a) Income tax recognised in profit or loss

Total tax expense/(income) - -

The prima facie income tax expense on pre-tax accounting loss from operations reconciles to the income tax expense in the financial statements as follows:-

Loss from operations (154,952) (90,948)

Income tax expenses calculated at 30% (46,486) (27,284)

Other reconciling items 46,486 (27,284)

Income tax benefit * *

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when compared with the previous reporting period.

* As detailed in Note 2 (b), the directors do not have access to sufficient information to enable detailed tax disclosure to be made.

Carry forward losses

Potential future income tax benefits attributable to tax losses carried forward have not been brought to account at 30 June 2015 because the directors do not believe it is appropriate to regard realisation of the future income tax benefits as probable.

Deferred tax

Disclosure of each type of temporary difference as at 30 June 2015 and the amount of any unrecognised deductible temporary differences or unused tax losses has not been included as the directors do not have access to sufficient information to enable this level of disclosure to be made.

For

per

sona

l use

onl

y



20

30 June 2015

$

30 June 2014

$ 6. Cash and Cash Equivalents

Cash at bank and on hand 419 6,810

Immediately following the appointment of Administrators on 29 August 2014 all bank accounts were frozen and remaining funds transferred to the Administrators account for the benefit of creditors.

30 June 2015

$

30 June 2014

$ 7. Trade and Other Receivables

(a) Current Trade and Other Receivables

Trade and other receivable 3,647,161 3,647,161

Less: Provision for doubtful debts (3,647,161) (3,647,161)

Current trade and other receivables - -

8. Trade and Other Payables

30 June 2015

$

30 June 2014

$

Trade payables 971,871 935,973

Other payables 213,730 164,730

Foreign currency payable (8,611) (8,611)

Trade and other payables 1,176,990 1,092,092

Following effectuation of the DOCA on 23 September 2015 (Refer to Note 18), all liabilities, contingent liabilities, obligations, warranties and long-term commitments of the Company were released

For

per

sona

l use

onl

y



21

9. Borrowings 30 June 2015

$

30 June 2014

$

Current

Bridging Finance Loan from CCM Global Limited (i) 250,000 250,000

Loan from 698 Capital Asia Pacific Ltd (ii) 5,082,648 5,082,648

Loan from 698 Capital Asia Pacific Ltd (iii) 3,412,282

3,412,282

Loan from Accord Ocean (iv) 451,995

451,995

Director related loans (iv) 157,332

157,332

Syndicate Loan from Norvest Corporate Pty Ltd (vi) 720,000 720,000

Loan from unrelated parties (vi) 63,663 -

10,137,920 10,074,257

Following effectuation of the DOCA on 23 September 2015 (refer to note 18), all liabilities, contingent liabilities, obligations, warranties and long-

term commitments of the Company were released.

(i) Terms are 9% interest per annum payable quarterly in arrears. Accrual of interest was ceased in prior years as agreed with the lender due

to the financial difficulties facing the Group.

(ii) 698 Capital Asia Pacific Ltd’s (“698”) $750,000 short term loan and $3,000,000 sales financing facility, together with all outstanding

interest, were consolidated as one loan repayable at call. Terms are 11.68% interest per annum payable quarterly in arrears. Accrual of

interest was ceased in prior years as agreed with the lender due to the financial difficulties facing the Group.

(iii) The $3,000,000 due under the convertible note that expired on 31 December 2009 was restructured as a loan and extended to 31

December 2011. Terms of the loan were:

9.74% interest per annum payable quarterly in arrears. Accrual of interest was ceased in prior years as agreed with the lender

due to the financial difficulties facing the Group.

Secured by a fixed and floating charge over the assets of the Company with the Norvest Syndicate having prior charge over the

Irisbus Contract. As mentioned above, all secured charges were released with the sale of the Non China Business Assets in March

2012 and the debt released pursuant to the DOCA.

(iv) Terms are 9% interest per annum payable quarterly in arrears. Accrual of interest was ceased in prior years as agreed with the lender due

to the financial difficulties facing the Group

(v) Terms are 15% interest per annum. The principal of $720,000 is repayable on demand. The Syndicate consists of parties related to the

former Directors of ACE. Accrual of interest was ceased in prior years as agreed with the lender due to the financial difficulties facing the

Group

(vi) This relates to the funds borrowed by the company to facilitate the payment of the first and second deposit to the creditors trust in

accordance with the DOCA (and for related recapitalisation expenses). The funds borrowed are unsecured and interest free. The loan was

facilitated by the proponents of the recapitalisation of the company, Otsana Pty Ltd.

10. Provisions

30 Jun 2015

$

30 Jun 2014

$

Provision for annual leave 28,813 28,813

Provision for long service leave 68,113 68,113

Provision for warranties 85,733 85,733

Total provision 182,659 182,659

(i) Following effectuation of the DOCA on 23 September 2015 (Refer to Note 18), all liabilities, contingent liabilities, obligations, warranties and long-term commitments of the Company were released.

For

per

sona

l use

onl

y



22

11. Issued Capital

No. $

(a) Fully paid ordinary shares 5,092,289 21,193,635

Movements of issued capital during the year ended 30 June 2015:

No. $

Opening balance 203,683,388 21,193,635

Consolidation of shares (note 1) (198,591,099) -

Closing balance 5,092,289 21,193,635

Note 1 - on 19 June 2015 the company completed a share consolidation on a 1 for 40 basis, resulting in 5,092,289 post-consolidation shares being on issue at that date.

There was no movement of issued capital during the year ended 30 June 2014.

There were no options over unissued shares at 30 June 2015 or 30 June 2014.

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds of winding up of the Company in proportion to the number and amounts paid on the shares held. On show of hands every shareholder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

12. Reserves

30 June 2015

$

30 June 2014

$

(i) Share based payments reserve 603,280 603,280

Total reserves 603,280 603,280

Nature and Purpose of Reserves

There has been no movement in the reserves since 30 June 2010 other than the Foreign Currency Translation Reserve being written back to

accumulated losses as a result of de-consolidation of foreign subsidiaries (refer to note 3(a)).

(i) Share Based Payments Reserve

This reserve is used to record the value of equity benefits to employees, Directors and consultants, as part of their remuneration or fair value of

services received.

13. Key Management Personnel Compensation

As detailed in Note 2 (b), the directors do not have access to sufficient information to enable detailed disclosure to be made regarding key management personnel compensation.

No remuneration was paid to Management or Directors in the 2015 and 2014 financial years.

14. Segment Information

Identification of reportable segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources. The group previously reported its segments on geographical location. As disclosed in Note 21, the Directors have not been able to obtain financial information of the group’s subsidiaries and accordingly, the financial information of the group’s subsidiaries have been deconsolidated effective 1 July 2010. The financial information reflected in these financial statements only relate to the Australian geographical location which relate entirely to Advanced Engine Components Limited only.

For

per

sona

l use

onl

y



23

As detailed in Note 2 (b), the directors do not have access to sufficient information to enable additional entity level disclosures to be made.

15. Earnings Per Share 30 June 2015

Cents

30 June 2014

Cents

Basic/diluted loss per share (3.04) (1.79)

Number Number

Weighted average number of ordinary shares on issue during the year used in calculation of

basic and diluted loss per share

5,092,289*

5,092,289*

$ $

Loss used in the calculation of basic/diluted loss per share (154,952) (90,948)

* The weighted average number of ordinary shares used in the calculation of loss per share has been adjusted for the share consolidation completed by the company on 19 June 2015.

16. Contingent Liabilities and Commitments for Expenditure

In prior years, the Company facilitated a US$700,000 loan (balance at 30 June 2015: US$615,000) from an unrelated company, CCM Global

Limited, to the company’s associate, Monika ACE Limited. The loan was delivered directly to Monika ACE Limited and did not involve cash flow

through the Company. The loan was only repayable to CCM Global Limited if amount receivable from Monika ACE Limited was collected. As at 30

June 2015, the receivable from Monika ACE Limited was impaired and accordingly, the liability has been written back against the asset as the

liability is not considered payable. If the receivable from Monika ACE Limited is collected, then ACE would have a liability due to CCM Global

Limited.

Other than the above, as detailed in Note 2 (b), the Directors do not have access to sufficient information to enable detailed disclosure to be made regarding contingent liabilities and commitments.

Following effectuation of the DOCA on 23 September 2015 (Refer to Note 18), all liabilities, contingent liabilities, obligations, warranties and

long-term commitments of the Company were released.

17. Financial Instruments

The financial risk policies below were adopted by the Directors of the Company who were in office prior to the Company entering administration.

These policies applied until the Company entered voluntary administration on 29 August 2014. On entering administration, the Administrators

were responsible for the Company. Therefore, there is no current financial risk policy.

The Company’s activities expose it to a variety of financial risks: market risk (including currency risk and interest risk), credit risk and liquidity risk.

The main risk the Company is exposed to through its financial instruments are interest rate risk and credit risk. The Company used different

methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and

foreign exchange, aging analysis for credit risk.

The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes

(a) Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis

on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in

note 3 to the financial statements.

(b) Risk exposures

As detailed in Note 2 (b), the directors do not have access to sufficient information to enable detailed disclosure to be made regarding financial

risk management.

(c) Net Fair Value of Financial Assets and Liabilities

All financial assets approximate to their net realisable value and financial liabilities approximate to their carrying value.

For

per

sona

l use

onl

y



24

18. Subsequent Events

On 7 September 2015, 25,000,000 promotor placement shares were issued for a total of $250, 5,000,000 creditor placement shares were issued

pursuant to the DOCA and 25,000,000 promoter placement options were issued.

On 22 September 2015, the Company entered into a number of identical convertible loan agreements with unrelated parties (except for as

detailed below) for a total amount of $300,000. The Company must seek shareholder approval to convert the loaned amounts no later than 3

months after 22 September 2015. Subject to the Shareholder approval being obtained, each convertible loan holder irrevocably directs the

Company to satisfy the repayment of the funds advanced by issuing Shares at a deemed issue price of $0.02 per Share upon conversion.

If Shareholder approval is not obtained, the funds advanced are repayable no later than 4 months after 22 September 2015 or any other date as is agreed in writing between the parties. The Company may repay funds advanced at any time and amount repaid cannot be redrawn. No interest is payable and no security is required. One of the convertible loan agreements, for an amount of $20,000, is held by Davinch Pty Ltd, an entity controlled by Mr Chris Ntoumenopoulos, a current Director of the Company.

On 23 September 2015, the DOCA was wholly effectuated and control of the Company reverted back to the Board of Directors.

On 24 September 2015, Ms Shannon Coates was appointed as Company Secretary of the Company.

On 5 October 2015, the Company announced that it had signed a binding Heads of Agreement to acquire 100% of Investia Technologies Pty Ltd

(“Investia”), a software and technology development company. In consideration for the acquisition and subject to the necessary shareholder

approvals, ACE will issue to Investia shareholders:

- 17,500,000 fully paid ACE shares at a deemed price of $0.02 and 17,500,000 options exercisable at $0.03 each, expiring three years from

date of issue; and

- Up to 32,500,000 deferred consideration shares subject to certain milestones being achieved.

Settlement of the acquisition will be subject to the required regulatory approvals and completing a capital raising of a minimum of $3,400,000

through the offer of ACE shares at a price of not less than $0.02 per share.

On 27 October 2015, the Company announced the appointments of Mr Peter Wall and Mr Chris Ntoumenopolous as Non-Executive Directors and the resignation of Mr Nicholas Young as a Non-Executive Director.

Other than as outlined above, at the date of this report, there are no matters or circumstances which have arisen since 30 June 2011 that have

significantly affected or may significantly affect:

the operations, in financial years subsequent to 30 June 2013, of the Consolidated Entity;

the results of those operations, in financial years subsequent to 30 June 2013, of the Consolidated Entity; or

the state of affairs, in financial years subsequent to 30 June 2013, of the Consolidated Entity.

19. Remuneration of Auditors

30 June 2015

$

30 June 2014

$

Remuneration for audit or review of the financial reports of the Company

Ernst & Young 11,000 11,000

Remuneration for other services

Ernst & Young - -

11,000 11,000

20. Related Party Disclosure

Transactions and balances with Key Management Personnel and other related party disclosures

As detailed in Note 2 (b), the directors do not have access to sufficient information to enable detailed related party transaction disclosures to be made.

For

per

sona

l use

onl

y



25

21. Controlled Entities

Advanced Engine Components Limited

Controlled entity Country of Incorporation Percentage Owned

2015 2014

AEC China Holdings Ltd1 British Virgin Island 0% 100%

AEC China Ltd2 China 100% 100%

Deconsolidation

For the purposes of the financial statements for the year ended 30 June 2015, the Directors have not been able to obtain financial information of

the group’s subsidiaries and accordingly, the group’s subsidiaries have been deconsolidated effective 1 July 2010.

22. Parent Entity Disclosures

For the purposes of the financial statements for the year ended 30 June 2015, the Directors have not been able to obtain financial information of

the group’s subsidiaries and therefore, the group’s subsidiaries have been deconsolidated effective 1 July 2010. Accordingly, the information

presented throughout the financial report is the same and is consistent with the disclosures of both the parent and consolidated entity.

23. Cash Flow Information

30 June 2015

$

30 June 2014

$

Loss after income tax (154,952) (90,948)

Non-cash flows in loss after income tax

Other adjustment - -

Changes in assets and liabilities

(Decrease)/ increase in payables 84,898 61,600

Cash flow (used in) operations (70,054) (29,348)

Non-cash financing and investing activities

During the year ended 30 June 2015 there were nil non-cash investing and financing activities.

24. Investment in Associate

The Company had entered into a joint venture arrangement in Thailand to build new natural gas (“NG”) powered vehicles and re-power existing vehicles with NG engines. The Company is partners in joint venture with Monika Motors Limited (63%) and a Thai based individual (11%). The Company’s shareholding is 26%.

The investment in the joint venture company was accounted for using the equity method of accounting. The carrying amount of the investment was written off at 30 June 2011 and is carried at a nil value at 30 June 2015 as the Directors did not consider the carrying value of the investment to be recoverable.

As detailed in Note 2 (b), the directors do not have access to sufficient information to enable disclosures associated with the investment in an associate to be made.

1 AEC China Holdings Ltd (BVI) was the holding company for AEC China Ltd. AEC China Holdings Ltd (BVI) was deregistered on 1 November 2014.

2 During the 2015 year AEC China Ltd is in the process of being liquidated.

For

per

sona

l use

onl

y


FOR THE YEAR ENDED 30 JUNE 2015 NOTE 25: New Accounting Standards for Application in Future Periods

26

Australian accounting standards and Interpretations that have recently been issued or amended but are not yet effective and have not been adopted by the Group for the year ended 30 June 2015.

Relevant Standards and Interpretations are outlined in the table below.

New/revised pronouncement Explanation of amendments Application Date of Standard

Application Date of Group

AASB 15 Revenue from Contracts with

Customers

AASB 15 Revenue from Contracts with Customers replaces the existing revenue

recognition standards AASB 111 Construction Contracts, AASB 118 Revenue and related

Interpretations (Interpretation 13 Customer Loyalty Programmes, Interpretation 15

Agreements for the Construction of Real Estate, Interpretation 18 Transfers of Assets

from Customers, Interpretation 131 Revenue—Barter Transactions Involving

Advertising Services and Interpretation 1042 Subscriber Acquisition Costs in the

Telecommunications Industry). AASB 15 incorporates the requirements of IFRS 15

Revenue from Contracts with Customers issued by the International Accounting

Standards Board (IASB) and developed jointly with the US Financial Accounting

Standards Board (FASB).

AASB 15 specifies the accounting treatment for revenue arising from contracts with

customers (except for contracts within the scope of other accounting standards such as

leases or financial instruments).The core principle of AASB 15 is that an entity

recognises revenue to depict the transfer of promised goods or services to customers in

an amount that reflects the consideration to which the entity expects to be entitled in

exchange for those goods or services. An entity recognises revenue in accordance with

that core principle by applying the following steps:

(a) Step 1: Identify the contract(s) with a customer

(b) Step 2: Identify the performance obligations in the contract

(c) Step 3: Determine the transaction price

(d) Step 4: Allocate the transaction price to the performance obligations in the

contract

(e) Step 5: Recognise revenue when (or as) the entity satisfies a performance

obligation

Currently, AASB 15 is effective for annual reporting periods commencing on or after 1

January 2017. Early application is permitted. (Note A)

AASB 2014-5 incorporates the consequential amendments to a number Australian

1 January 2018

1 July 2018

For

per

sona

l use

onl

y



27



Accounting Standards (including Interpretations) arising from the issuance of AASB 15.

AASB 9

Financial Instruments

AASB 9 (December 2014) is a new standard which replaces AASB 139. This new version supersedes AASB 9 issued in December 2009 (as amended) and AASB 9 (issued in December 2010) and includes a model for classification and measurement, a single, forward-looking ‘expected loss’ impairment model and a substantially- reformed approach to hedge accounting.

AASB 9 is effective for annual periods beginning on or after 1 January 2018. However, the Standard is available for early adoption. The own credit changes can be early adopted in isolation without otherwise changing the accounting for financial instruments.

Classification and measurement

AASB 9 includes requirements for a simpler approach for classification and

measurement of financial assets compared with the requirements of AASB 139.

There are also some changes made in relation to financial liabilities.

The main changes are described below.

Financial assets

a) Financial assets that are debt instruments will be classified based on (1)

the objective of the entity's business model for managing the financial

assets; (2) the characteristics of the contractual cash flows.

b) Allows an irrevocable election on initial recognition to present gains

and losses on investments in equity instruments that are not held for

trading in other comprehensive income. Dividends in respect of these

investments that are a return on investment can be recognised in

profit or loss and there is no impairment or recycling on disposal of

the instrument.

c) Financial assets can be designated and measured at fair value through

profit or loss at initial recognition if doing so eliminates or significantly

reduces a measurement or recognition inconsistency that would arise

from measuring assets or liabilities, or recognising the gains and losses

on them, on different bases.

1 January 2018

1 July 2018

For

per

sona

l use

onl

y



28



Financial liabilities

Changes introduced by AASB 9 in respect of financial liabilities are limited to the measurement of liabilities designated at fair value through profit or loss (FVPL) using the fair value option.

Where the fair value option is used for financial liabilities, the change in fair value is to be accounted for as follows:

The change attributable to changes in credit risk are presented in other

comprehensive income (OCI)

The remaining change is presented in profit or loss

AASB 9 also removes the volatility in profit or loss that was caused by changes in the credit risk of liabilities elected to be measured at fair value. This change in accounting means that gains or losses attributable to changes in the entity’s own credit risk would be recognised in OCI. These amounts recognised in OCI are not recycled to profit or loss if the liability is ever repurchased at a discount.

Impairment

The final version of AASB 9 introduces a new expected-loss impairment model that will require more timely recognition of expected credit losses. Specifically, the new Standard requires entities to account for expected credit losses from when financial instruments are first recognised and to recognise full lifetime expected losses on a more timely basis.

AASB 2015-1

AASB 7 Financial Instruments: Disclosures:

Applicability of the amendments to AASB 7 to condensed interim financial

statements - clarify that the additional disclosure required by the amendments to

AASB 7 Disclosure–Offsetting Financial Assets and Financial Liabilities is not

specifically required for all interim periods. However, the additional disclosure is

required to be given in condensed interim financial statements that are prepared

in accordance with AASB 134 Interim Financial Reporting when its inclusion would

be required by the requirements of AASB 134.

1 January 2016 1 July 2016

For

per

sona

l use

onl

y



29



AASB 134 Interim Financial Reporting:

Disclosure of information ‘elsewhere in the interim financial report’ - amends

AASB 134 to clarify the meaning of disclosure of information

elsewhere in the interim financial report’ and to require the inclusion of a cross-

reference from the interim financial statements to the location of this

information.

AASB 2015-2

Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101

The Standard makes amendments to AASB 101 Presentation of Financial Statements arising from the IASB’s Disclosure Initiative project. The amendments are designed to further encourage companies to apply professional judgment in determining what information to disclose in the financial statements. For example, the amendments make clear that materiality applies to the whole of financial statements and that the inclusion of immaterial information can inhibit the usefulness of financial

disclosures. The amendments also clarify that companies should use professional judgment in determining where and in what order information is presented in the financial disclosures.


AASB 2015-3

Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality

The Standard completes the AASB’s project to remove Australian guidance on materiality from Australian Accounting Standards.

1 July 2015

1 July 2015

AASB 2014-9

Amendments to Australian Accounting Standards – Equity Method in Separate Financial Statements

AASB 2014-9 amends AASB 127 Separate Financial Statements, and consequentially amends AASB 1 First-time Adoption of Australian Accounting Standards and AASB 128 Investments in Associates and Joint Ventures, to allow entities to use the equity method of accounting for investments in subsidiaries, joint ventures and associates in their separate financial statements.

AASB 2014-9 also makes editorial corrections to AASB 127.


The impact of the above new and amended standards is yet to be determined.

For

per

sona

l use

onl

y

ADVANCED ENGINE COMPONENTS LIMITED DIRECTORS’ DECLARATION


30

Directors’ Declaration

1. In the opinion of the Directors of Advanced Engine Components Limited and its controlled entities (‘the Group’)

As set out in Note 2(b), although the Directors have prepared the financial statements, notes thereto, and the remuneration disclosures

contained in the Remuneration Report in the Directors’ Report to the best of their knowledge based on the information made available

to them, they are of the opinion that it is not possible to state that the financial statements, notes thereto, and the remuneration

disclosures contained in the Remuneration Report in the Directors’ Report, are in accordance with the Corporations Act 2001, including:

(a) Giving a true and fair view of the Company’s financial position as at 30 June 2015 and of its performance for the financial year

ended on that date;

(b) Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations

Regulations 2001; and

(c) Complying with International Financial Reporting Standards.

2. Subject to the matters highlighted in Note 2 (c), there are reasonable grounds to believe that the Company will be able to pay its debts as

and when they become due and payable.

3. This declaration has been made after receiving the declaration required to be made to the directors in accordance with Section 295A of

the Corporation Act 2001 for the financial year ended 30 June 2015.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by:

Faldi Ismail

Non-Executive Director

Dated 18 November 2015

For

per

sona

l use

onl

y

A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation MH:AJ:ADVANCED ENGINE:010

Independent auditor's report to the members of Advanced EngineComponents Limited

Report on the financial report

We have audited the accompanying financial report of Advanced Engine Components Limited and itscontrolled entities (‘the consolidated entity”) , which comprises the consolidated statement of financialposition as at 30 June 2015, the consolidated statement of profit or loss and other comprehensiveincome, the consolidated statement of changes in equity and the consolidated statement of cash flows forthe year then ended, notes comprising a summary of significant accounting policies and otherexplanatory information, and the directors' declaration of the consolidated entity comprising thecompany and the entities it controlled at the year-end or from time to time during the financial year.

Directors' responsibility for the financial report

The directors of Advanced Engine Components Limited (“the company”) are responsible for thepreparation of the financial report that gives a true and fair view in accordance with AustralianAccounting Standards and the Corporations Act 2001 and for such internal controls as the directorsdetermine are necessary to enable the preparation of the financial report that is free from materialmisstatement, whether due to fraud or error. In Note 2(a), the directors state that they cannot form aview as to whether the financial statements comply with International Financial Reporting Standards.

Auditor's responsibility

Our responsibility is to express an opinion on the financial report based on conducting the audit inaccordance with Australian Auditing Standards. Because of the matters described in the Basis forDisclaimer of Opinion paragraph, we were not able to obtain sufficient appropriate audit evidence toprovide a basis for an audit opinion.

Independence

In conducting our audit we have complied with the independence requirements of the Corporations Act2001. We have given to the directors of the company a written Auditor’s Independence Declaration, acopy of which is included in the directors’ report.

Basis for disclaimer of opinion

1. As disclosed in Note 2(b) to the financial report, the financial report has been prepared by currentDirectors who were not in office for the period presented in the 30 June 2015 financial report andaccordingly, did not have oversight or control over the consolidated entity’s financial reportingsystems, risk management systems, or internal control systems for the period presented.

Due to the above, the current Board of Advanced Engine Components Limited has been unable toconclude without qualification, within its directors’ declaration, that the financial statements of theconsolidated entity for the financial year ended 30 June 2015 have been prepared in accordance withthe Corporations Act 2001 and Australian Accounting Standards, to give a true and fair view of thefinancial position of the consolidated entity as at 30 June 2015 and of its performance for the yearended on that date.

Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843

Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/au

For

per

sona

l use

onl

y

A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation

The representation letter provided to the auditors by the current Directors of the company has alsobeen qualified on the basis that they did not have oversight or control over the consolidated entity’sfinancial reporting systems, risk management systems, or internal control systems for the periodpresented.

As a result of the above matters, we were unable to obtain sufficient appropriate audit evidence forthe existence, measurement, valuation, rights and obligations, completeness and disclosures relatingto the assets, liabilities, revenues, expenses and cash flows of Advanced Engine Components Limited,its subsidiaries and associate as at 30 June 2015 and for the year then ended.

2. We audited the financial statements of the consolidated entity for the financial year ended 30 June2014, for which we were unable to and did not express an opinion as to the truth and fairness of thefinancial position of the consolidated entity as at 30 June 2014 and of its performance for the yearended on that date due to the existence of the limitation of the scope of our work as detailed in ourdisclaimer of auditor’s opinion dated 18 November 2015. Certain balances as at 30 June 2014 enterinto the determination of financial performance for the year ended 30 June 2015.

3. The current Board of Advanced Engine Components Limited has not been able to source and provideto ourselves certain books and records of the company. Without access to this documentation, we areunable to obtain sufficient appropriate audit evidence for the existence, measurement, valuation,rights and obligations, completeness and disclosures relating to the assets, liabilities, revenues,expenses and cash flows of Advanced Engine Components Limited as reflected in the financialstatements as at 30 June 2015 and for the year then ended.

4. The current Board of Advanced Engine Components Limited has also not been able to source andprovide to ourselves books and records of the company’s subsidiaries. As detailed in Note 3(a) to thefinancial report, the financial information of the subsidiaries has been deconsolidated from 1 July2010. Under Australian Accounting Standards, the financial information of subsidiaries should beconsolidated. Had the financial information of the subsidiaries been consolidated, many elements inthe accompanying financial report would have been materially affected. The effects on the financialreport of the failure to consolidate the subsidiaries financial position as at 30 June 2015 and itsperformance for the year then ended have not been able to be determined.

5. The current Board of Advanced Engine Components Limited has not been able to source and provideto ourselves books and records of the company’s associate. Accordingly, as detailed in Note 24 to thefinancial report, the investment in the associate was impaired to nil at 30 June 2011 and is beingcarried at a nil value at 30 June 2015. We were unable to obtain sufficient appropriate audit evidenceconcerning the carrying amount of the company’s investment in the associate as at 30 June 2015and the company’s share of the associate’s profit or loss and other comprehensive income for theyear then ended.

6. As detailed in Note 2 (b), the directors have reconstructed the financial records of the consolidatedentity using data extracted from the consolidated entity’s accounting system and the financialstatements do not contain all required information or disclosures in relation to transactionsundertaken by the consolidated entity. In particular, the disclosures in the financial statement forrelated party transactions, tax, financial risk management, impairment of intangible assets andimpairment of investment in associate do not meet the requirements of Australian AccountingStandards.F

or p

erso

nal u

se o

nly


Disclaimer of opinion

Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraphs, wehave not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.Accordingly, we do not express an opinion on the financial report.

Emphasis of matter

Without amendment to our disclaimer of opinion, we draw attention to Note 2(c) in the financial report.The conditions as set forth in Note 2(c) indicate the existence of a material uncertainty that may castsignificant doubt about the consolidated entity’s ability to continue as a going concern and therefore, theconsolidated entity may be unable to realise its assets and discharge its liabilities in the normal course ofbusiness.

Report on the remuneration report

We have audited the Remuneration Report included in the directors' report for the year ended 30 June2015. The directors of the company are responsible for the preparation and presentation of theRemuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility isto express an opinion on the Remuneration Report, based on our audit conducted in accordance withAustralian Auditing Standards.

Basis for disclaimer of opinion

1. As disclosed in Note 2(b) to the financial report, the financial report has been prepared by currentDirectors who were not in office for the period presented in the 30 June 2015 financial report andaccordingly, did not have oversight or control over the consolidated entity’s financial reportingsystems, risk management systems, or internal control systems for the period presented.

Due to the above, the current Board of Advanced Engine Components Limited has been unable toconclude without qualification, within its directors’ declaration, that the remuneration report of theconsolidated entity for the financial year ended 30 June 2015 has been prepared in accordance withsection 300A of the Corporations Act 2001.

The representation letter provided to the auditors by the current Directors of the company has alsobeen qualified on the basis that they did not have oversight or control over the consolidated entity’sfinancial reporting systems, risk management systems, or internal control systems for the periodpresented.

2. The current Board of Advanced Engine Components Limited has not been able to source and provideto ourselves certain books and records of the company. Without access to this documentation, we areunable to obtain sufficient appropriate evidence for the occurrence, accuracy, completeness anddisclosures relating to the remuneration report for the year ended 30 June 2015.

3. The current Board of Advanced Engine Components Limited has not been able to source and provideto ourselves books and records of the company’s subsidiaries. Without access to this documentation,we are unable to obtain sufficient appropriate evidence for the occurrence, accuracy, completenessand disclosures relating to the remuneration report for the year ended 30 June 2015.F

or p

erso

nal u

se o

nly


4. As detailed in Note 2 (b), the directors have reconstructed the financial records of the consolidatedentity using data extracted from the consolidated entity’s accounting system and therefore, theremuneration report does not contain all the required information or disclosures in relationtransactions undertaken by the consolidated entity. In particular, the disclosures in the remunerationreport do not meet the requirements of section 300A of the Corporations Act 2001.

Disclaimer of opinion

Because of the significance of the matters described in the basis for disclaimer of opinion paragraphs, wehave not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.Accordingly, we do not express an opinion on the remuneration report.

Report on other legal and regulatory requirements

Due to the matters described in the basis for disclaimer of opinion paragraphs, we have not been given allinformation, explanation and assistance necessary for the conduct of the audit; and we are unable todetermine whether the company has kept:

a) financial records sufficient to enable the financial report to be prepared and audited; and

b) other records and registers as required by the Corporations Act 2001.

Ernst & Young

V L HoangPartnerPerth18 November 2015

For

per

sona

l use

onl

y

A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation AJ:MH:ADVANCEDENGINE:001

Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843

Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/au

Auditor’s Independence Declaration to the Directors of Advanced EngineComponents Limited

In relation to our audit of the financial report of Advanced Engine Components Limited for the financialyear ended 30 June 2015, to the best of my knowledge and belief, there have been no contraventions ofthe auditor independence requirements of the Corporations Act 2001 or any applicable code ofprofessional conduct.

Ernst & Young

V L HoangPartner18 November 2015

For

per

sona

l use

onl

y

ADVANCED ENGINE COMPONENTS LIMITED ASX ADDITIONAL INFORMATION


36

Corporate Governance Statement

The Company’s Board of Directors is responsible for establishing the corporate governance framework of the Company and its related bodies corporate. In establishing this framework, the Board has considered and reports against the Principles of Corporate Governance and Best Practice Recommendations (3

rd Edition) as published by the ASX Corporate Governance Council (“ASX Corporate Governance Principles”).

The Company appointed Voluntary Administrators on 29 August 2014 and resolved to enter into a Deed of Company Arrangement on 24 October 2014. Mr Mark Summers and Mr Jack James were appointed as Administrators of the Company on 29 August 2014. On 24 October 2014 Mr Summers and Mr James were appointed as Joint and Several Deed Administrators of the Company. Mr Summers subsequently resigned as Administrator of the Deed leaving Mr James as sole Administrator. On 20 March 2015 the Deed of Company Arrangement was signed. On 5 June 2015 the Shareholders approved the necessary resolutions to effectuate the Deed. The Deed of Company Arrangement was effectuated on 23 September 2015, at which time the Administrators resigned and control and management of the Company reverted to the Directors appointed by the Shareholders on 5 June 2015. As the current Board was appointed on 5 June 2015, it is unable to comment on the extent to which the Company followed the applicable ASX Corporate Governance Principles prior to this date, whether any recommendation was not followed or the reason for the departure, if any. On 12 October 2015, the Board adopted a documented Corporate Governance Plan which is based on the ASX Corporate Governance Principles. This Corporate Governance Statement has been approved by the Board and summarises the corporate governance practices and procedures incorporated in the Corporate Governance Plan from 12 October 2015 and to the date of this statement. In addition to the information contained in this statement, the Company’s website contains additional details of its corporate governance practices and procedures. The ASX Listing Rules require listed companies to include in their Annual Report or website a statement disclosing the extent to which they have complied with the ASX Corporate Governance Principles in the reporting period. The recommendations are not prescriptive and if a company considers that a recommendation is inappropriate having regard to its particular circumstances, the company has the flexibility not to adopt it. Where the Company considered it was not appropriate to presently comply with a particular recommendation, the reasons are set out in the relevant section of this Corporate Governance Statement. With the exception of the departures detailed in this Corporate Governance Statement, the corporate governance practices of the Company from 12 October 2015 were compliant with the ASX Corporate Governance Principles. The table below provides a summary of the Company’s compliance with each of the eight ASX Corporate Governance Principles:

Recommendation Comply Yes/No/

Partly

Principle 1 – Lay solid foundations for management and oversight

1.1 A listed entity should disclose: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management.

Yes Yes

1.2 A listed entity should: (a) undertake appropriate checks before appointing a person, or putting forward to security

holders a candidate for election, as a director; and (b) provide security holders with all material information in its possession relevant to a decision on

whether or not to re-elect a director.

Yes Yes

1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment

Yes

1.4 The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

Yes

1.5 A listed entity should: (a) have a diversity policy which includes requirements for the board or a relevant committee of

the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them;

(b) disclose that policy or a summary of it; and (c) disclose as at the end of each reporting period the measurable objectives for achieving gender

diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them and either: (1) the respective proportions of men and women on the board, in senior executive positions

and across the whole organisation (including how the entity has defined “senior executive” for these purposes); and

Yes Yes No Yes

For

per

sona

l use

onl

y



37

(2) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined and published under that Act.

Not applicable

1.6 A listed entity should: (a) have and disclose a process for periodically evaluating the performance of the board, its

committees and individual directors; and (b) disclose, in relation to each reporting period, whether a performance evaluation was

undertaken in the reporting period in accordance with that process.

Yes Yes

1.7 A listed entity should: (a) have and disclose a process for periodically evaluating the performance of its senior executives;

and (b) disclose, in relation to each reporting period, whether a performance evaluation was

undertaken in the reporting period in accordance with that process.

Yes Yes

Principle 2 – Structure the board to add value

2.1 The board of a listed entity should: (a) have a nomination committee which:

(1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose (3) the charter of that committee; and (4) as at the end of each reporting period, the number of times the committee met throughout

the period and the individual attendances of members at those meetings; or (b) if it does not have a nomination committee, disclose that fact and the processes it employs to

address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.

Not applicable Yes

2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.

Yes

2.3 A listed entity should disclose: (a) the names of the directors considered by the board to be independent directors; (b) if a director has an interest, position, association or relationship of the type described in Box 2.3

of the ASX Recommendations, but the board is of the opinion it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and

(c) the length of service of each director.

Yes Yes Yes

2.4 A majority of the board of a listed entity should be independent directors. Yes

2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.

No

2.6 A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.

Yes

Principle 3 – Act ethically and responsibly

3.1 A listed entity should: (a) have a code of conduct for its directors, senior executives and employees; and (b) disclose that code or a summary of it.

Yes Yes

Principle 4 – Safeguard integrity in corporate reporting

4.1 The Board of a listed entity should: (a) have an audit committee which:

(1) has at least three members, all of whom are non-executive directors and a majority of

whom are independent directors; and (2) is chaired by an independent director, who is not the chair of the board, and disclose: (3) the charter of the committee; (4) the relevant qualifications and experience of members of the committee; and (5) in relation to each reporting period, the number of times the committee met throughout

the period and the individual attendances of the members at those meetings; or (b) if it does not have an audit committee, disclose that fact and the processes it employs that

independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.

Not applicable Yes

4.2 The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control

No

For

per

sona

l use

onl

y



38

which is operating effectively.

4.3 A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.

Yes

Principle 5 – Make timely and balanced disclosure

5.1 A listed entity should: (a) have a written policy for complying with its continuous disclosure obligations under the Listing

Rules; and (b) disclose that policy or a summary of it.

Yes Yes

Principle 6 – Respect the rights of security holders

6.1 A listed entity should provide information about itself and its governance to investors via its website. Yes

6.2 A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.

Yes

6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.

Yes

6.4 A listed entity should give security holders the option to receive communications from, and send communication to, the entity and its security registry electronically.

Yes

Principle 7 – Recognise and manage risk

7.1 The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which:

(1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director; and disclose (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout

the period and the individual attendances of the members at those meetings; or (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and

the processes it employs for overseeing the entity’s risk management framework.

Not applicable Yes

7.2 The board or a committee of the board should: (a) review the entity’s risk management framework at least annually to satisfy itself that it continues

to be sound; and (b) disclose, in relation to each reporting period, whether such a review has taken place.

Yes No review

7.3 A listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what role it performs; or (b) if it does not have an internal audit function, that fact and the processes it employs for evaluation

and continually improving the effectiveness of its risk management and internal control processes.

Not applicable Yes

7.4 A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risk and, if it does, how it manages or intends to manage those risks.

Yes

Principle 8 – Remunerate fairly and responsibly

8.1 The Board of a listed entity should: (a) have a remuneration committee which:

(1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout

the period and the individual attendances of the members at those meetings; or (b) if it does not have a remuneration committee, disclose that fact and the processes it employees

for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.

Not applicable Yes

8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives.

Yes

8.3 A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether participants are permitted to enter into transactions (whether through

the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and

(b) disclose that policy or a summary of it.

Yes Yes

For

per

sona

l use

onl

y



39

Board Responsibilities The Company has established the functions that are reserved to the Board. The Board acts on behalf of the shareholders and is therefore accountable to the shareholders. It also has other obligations of a regulatory or ethical nature. In addition, the Board is responsible for identifying areas of significant business risk and ensuring arrangements are in place to appropriately manage those risks. The Board’s role is to govern the Consolidated Entity. Without limiting the generality of that stated role, the key matters reserved specifically for the Board include:

Driving the strategic direction of the Company, ensuring appropriate resources are available to meet objectives and monitoring management’s performance.

Appointment, and where necessary, the replacement, of the Chief Executive Officer/Managing Director and other senior executives and the determination of their terms and conditions including remuneration and termination.

Approving the Company’s remuneration framework.

Monitoring the timeliness and effectiveness of reporting to Shareholders.

Reviewing and ratifying systems of audit, risk management and internal compliance and control, codes of conduct and legal compliance to minimise the possibility of the Company operating beyond acceptable risk parameters.

Approving and monitoring the progress of major capital expenditure, capital management and significant acquisitions and divestitures.

Approving and monitoring the budget and the adequacy and integrity of financial and other reporting such that the financial performance of the company has sufficient clarity to be actively monitored.

Approving the annual, half yearly and quarterly accounts.

Approving significant changes to the organisational structure.

Approving decisions affecting the Company’s capital, including determining the Company’s dividend policy and declaring dividends.

Recommending to shareholders the appointment of the external auditor as and when their appointment or re-appointment is required to be approved by them (in accordance with the ASX Listing Rules if applicable).

Ensuring a high standard of corporate governance practice and regulatory compliance and promoting ethical and responsible decision making

Procuring appropriate professional development opportunities for Directors to develop and maintain the skills and knowledge needed to perform their role as Directors effectively.

For a complete list of the functions reserved to the Board and a copy of the Board’s charter, please refer to the Corporate Governance section of the Company’s website. Due to the size of the Board and the stage of the Company’s operations, the Board has opted not to establish an Audit and Risk Committee or a Remuneration or Nomination Committee. These duties and responsibilities are discharged by the full Board, in accordance with the Audit and Risk Committee and Remuneration and Nomination Committee Charters that have been adopted by the Board. Refer to the Corporate Governance section of the Company’s website for a copy of the Committee charters. Responsibilities of Senior Executives The responsibility for the day to day operation and administration of the Consolidated Entity, in accordance with the direction of the Board, is delegated by the Board to the Managing Director and the executive team. The Board ensures that this team is appropriately qualified and experienced to carry out their responsibilities and has in place procedures to assess the performance of the Managing Director and the executive team. Performance evaluation of Board and Senior Executives The Board has adopted a policy for evaluating the performance of the Board and Directors, a copy of which is available on its website. The Board did not conduct a formal evaluation of the Board and its Directors in the reporting period as it has only been in place since 5 June 2015. The Board is responsible for an annual evaluation of the Managing Director, to be coordinated by the Chairman. There is currently no Managing Director but the Board intends that if and when a Managing Director is appointed, the Managing Director’s performance objectives will be equivalent to the Company’s performance objectives and will be set by the Board based on qualitative and quantitative measures. The Managing Director’s performance against these objectives will then be reviewed annually by the Board and reflected in the Managing Director’s remuneration structure. For further information regarding the Company’s Performance Evaluation Policy please refer to the Corporate Governance section of the Company’s website. Structure of the Board and Skills Matrix To ensure the Board is well equipped to discharge its responsibilities it has established guidelines for the nomination, selection, induction and ongoing professional development of Directors. These guidelines include a requirement to undertake appropriate background checks prior to the

For

per

sona

l use

onl

y



40

appointment of a person as a Director, including but not limited to undertaking police and solvency checks, a formal induction program to enable new Directors to build their knowledge and make an effective contribution in a timely manner, and the provision of appropriate professional development opportunities for Directors to develop and maintain the skills and knowledge needed to perform their roles as Directors effectively. The Directors in office and the term of their appointment at the date of this Corporate Governance Statement are: Name Position Date of Appointment F Ismail Chairman, Non-executive Director 5 June 2015 B De Kauwe Non-executive Director 5 June 2015 P Wall Non-executive Director 27 October 2015 C Ntoumenopoulos Non-executive Director 27 October 2015 The skills, experience and expertise relevant to the position of Director held by each Director at the date of this Statement are included on pages 2 and 3 of this Annual Report. The composition of the Board will be reviewed regularly by the Board to ensure that the Directors between them bring the range of skills, knowledge and experience necessary to direct the Company’s operations. The Board has developed a skills matrix considered suitable for the Board of the Company at its current stage and into the future, taking into account its current strategy, operations and expectations for changes in the nature and scope of its activities. The Board skills matrix identifies a mix of areas the Board should collectively hold across its membership, including experience in the financial services industry, software, finance and executive management. The Board is satisfied that the identified skills are well represented in the current Board. The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper functioning of the Board. All Directors have unfettered access to the Company Secretary. In addition, Directors are entitled, in furtherance of their duties, to seek independent professional advice at the Company’s expense. Independence Recommendation 2.4 requires a majority of the Board to be independent Directors. The ASX guidance on factors relevant to an assessment of independence includes interests, positions, associations or relationships which might interfere with, or reasonably be seen to interfere with, a director’s capacity to bring independent judgement to bear on issues before the Board and to act in the best interests of the entity and its security holders generally. In accordance with this guidance, three of the four Directors are considered to be independent. Mr Ismail, Non-Executive Chairman is not considered independent as he is a substantial shareholder of the Company (7.12%) and associated with companies that provide various corporate, capital raising and accounting services and office accomodation to the Company at normal commercial rates. However the Board is of the view that this fact does not impact on his independent judgement and he can and does make independent decisions in the best interests of the Company and its security holders. Nomination and Remuneration Committee The Board has adopted a Nomination and Remuneration Committee Charter however at this stage has not established a Nomination or Remuneration Committee and the full Board currently undertakes the responsibilities for determining and reviewing compensation arrangements for the Directors and senior executives and ensuring that the Board continues to operate within the established guidelines, including when necessary, selecting candidates for the position of Director. For further details regarding the procedure for the nomination, selection and appointment of new Directors and re-election of incumbents, as well as a copy of the Nomination and Remuneration Committee Charter, please refer to the Corporate Governance section of the Company’s website. For further details on the remuneration policy of the Company, including a description of the structure of Non-executive Directors’ remuneration and Executive Directors’ and senior executives’ remuneration, see the Directors’ Report of this Annual Report. The Company has established a Performance Rights Plan pursuant to which the Company may offer long term equity incentive rights to Directors and employees. The rights are usually issued for nil consideration and typically only vest under certain conditions. The performance rights cannot be transferred without the approval of the Company’s Board and are not quoted on the ASX. Holders may not enter into any transaction designed to remove the “at risk” aspect of an option before it is exercised. The Company acknowledges that the guidelines to ASX Principle 8.2 recommend that Non-executive Directors do not receive equity incentives with performance hurdles attached. However, in the Company’s current circumstances, the Directors consider rights to be a cost effective and efficient means for the Company to provide a reward and incentive, as opposed to alternative forms of incentive, such as the payment of additional cash consideration that would be necessary for someone with the experience of the Directors, and may from time to time resolve to issue options to Non-executive Directors, including with performance hurdles, subject to regulatory and shareholder approval. There is no scheme to provide retirement benefits (other than superannuation) for Non-executive Directors. For additional details please refer to the Corporate Governance section of the Company’s website.

For

per

sona

l use

onl

y



41

Audit Committee The Board has adopted an Audit Committee Charter however given the current size of the Board, a separate Audit Committee has not been established and the full Board currently undertakes the responsibility to ensure that an effective internal control framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes such as the safeguarding of assets, the maintenance of proper accounting records and the reliability of financial information, as well as non-financial considerations including the benchmarking of operational key performance indicators. The Board is also responsible for the nomination of the external auditor and reviewing the adequacy of the scope and quality of the annual statutory audit and half year audit review. For further details regarding the procedures for selection, appointment and rotation of external audit partners, as well as a copy of the Audit Committee’s Charter, please refer to the Corporate Governance section of the Company’s website. Communication with Shareholders Pursuant to Principle 6, the Board aims to ensure that the shareholders are provided with full and timely information about the Company’s activities. To promote effective communication with shareholders, the Company has designed a Shareholder Communication Strategy. Information is communicated to the shareholders through:

the Annual Report which is made available to all shareholders;

announcements made through the ASX companies announcements platform;

the Company’s website which has a dedicated Investor Relations section for the purpose of publishing all important Company information and relevant announcements made to the market; and

the annual general meeting and any other meetings called to obtain approval for Board action as appropriate. In addition, shareholders are encouraged to make their views known or to seek clarification on information available in the public arena by contacting the Company (including the Company’s share registry, which facilitates electronic correspondence) or attending the annual general meeting. The external auditors also attend, and are available to answer queries on the preparation and content of the independent Audit Report, the accounting policies adopted by the Company in relation to the preparation of accounts and the independence of the Auditor in relation to the conduct of the audit at the Company’s annual general meetings. For further information regarding the Company’s Shareholder Communication Policy please refer to the Corporate Governance section of the Company’s website. Diversity Policy The Board is committed to promoting equality and diversity in the workplace and aims to be an organisation where diversity is valued, respected and celebrated. All decisions relating to employees will be based strictly on merit, without regard to gender, ethnicity, age, relationship status or any other irrelevant factor not applicable to the position. Pursuant to Recommendation 1.5, the Company has established a Diversity Policy. However due to the small size of the organisation and its current stage of operations, the introduction of specific measurable objectives at this stage has not been implemented. The Company currently has no employees and therefore does not report on the proportion of women in the whole organisation, women in senior executive positions and women on the Board. Whilst the Board of the Company strongly endorses the concept of gender diversity, until the Company’s human resource base has grown to a point where fully implementing specific measurable objectives will become more meaningful, the Company will, in accordance with its Diversity Policy, continue to recruit the best person for each role, regardless of gender, ethnicity, age, relationship status or any other irrelevant factor not applicable to the position. Share Trading The Constitution of the Company permits Directors and officers to acquire shares in the Company. In accordance with the provisions of the Corporations Act and the listing Rules of the ASX, Directors must advise the Company and the ASX of any transactions they conduct in securities of the Company. The Company has established a Securities Trading Policy concerning trading in the Company’s securities by Directors and employees. This policy provides a brief summary of the law on insider trading and other relevant laws, sets out the restrictions on dealing in securities by people who work for or who are associated with th e Comp an y , and is intended to assist in maintaining market confidence in the integrity of dealings in the Company’s securities. The policy stipulates that the only appropriate time for a Director or employee to deal in the Company’s securities is when he or she is not in possession of ‘price sensitive information’ that is not generally available to the share market. A Director wishing to deal in the Company’s

For

per

sona

l use

onl

y



42

securities may only do so after first having received approval from the Chairman. All staff wishing to deal must obtain approval from the Managing Director. Trading in the Company’s securities is also subject to specified blackout periods, which are set out in the Company’s Trading Policy or as otherwise determined by the Board from time to time. The Company prohibits Directors and employees from entering into transactions in associated products which limit the economic risk of participating in unvested entitlements under any equity-based remuneration schemes. A copy of the Company’s Trading Policy is available in the Corporate Governance section of the Company’s website. Integrity of Financial Reporting and Risk Management Policies The Board has primary responsibility to ensure that the Company presents and publishes accounts which present a true and fair view of its results and financial position and that the accounting methods adopted are appropriate to the Company and consistently applied in accordance with relevant accounting standards and the applicable laws. Under section 295A of the Corporations Act, the Managing Director and the person who performs the Chief Financial Officer function are each required to provide a written statement to the Board that the Company’s annual financial report presents a true and fair view, in all material respects, of the Company’s financial condition and operational results and that it is in accordance with the relevant accounting standards. Recommendation 4.2 extends this requirement such that it applies to financial statements for any financial period and that the Managing Director and the person who performs the Chief Financial Officer function must also confirm that this statement is founded on a sound system of risk management and internal compliance which implements the policies adopted by the Board and that the Company’s risk management and internal compliance and control system is operating effectively in all material respects. The financial report has been prepared by Directors who were not in office for the periods presented in this report, nor were they parties involved with the Company and did not have oversight or control over the Group’s financial reporting systems including but not limited to being able to obtain access to complete accounting records of the Company, its subsidiaries and associate. The Directors who prepared this financial report were appointed on or after 5 June 2015. Every reasonable effort has been made by the Directors to ascertain the true position of the Company as at relevant financial year however, although the Directors have prepared this financial report to the best of their knowledge based on the information made available to them, they are of the opinion that it is not possible to state that this financial report has been prepared in accordance with Australian Accounting Standards including Australian interpretations, other authoritative pronouncements of the Australian Accounting Standard Board and the Corporations Act 2001, nor is it possible to state this financial report gives a true and fair view of the Group’s financial position.

Due to the size of the Company and its current level of activity and operations, the Company does not have a formal internal audit function. Periodically, internal reviews of the Company’s financial systems, documents and processes will be undertaken and any recommendation for improvement reported to the Board as part of the Company’s risk management processes. The new Board is committed to the management of risks throughout its operations to protect all of its stakeholders. Risk management is carried out through the full Board and the processes and procedures mentioned above. The Company’s Risk Management Policy deals with the management and oversight of material business risks and provides the guiding principle for management in the identification of risks across the organisation as a whole, and within individual business units. Going forward, the intends to review the risk management framework at least annually. The current Board is unaware of how risk management was carried out prior to 5 June 2015. However, the newly adopted Risk Management Policy provides a framework for systematically understanding and identifying the types of material business risks that may threaten the Group as a whole or specific business activities within the Company and includes risk mitigation strategies. The new Board intends to develop specific frameworks for risk, applicable to the Company’s proposed new direction. The Board has formed the view that the Company does not currently have any material exposure to economic, environmental or social sustainability risks. For a summary of the Company’s Risk Management Policy, please refer to the Corporate Policies section of the Company’s website. Code of Conduct and Continuous Disclosure Policy The Company has a Code of Conduct and Continuous Disclosure Policy, which can be found in the Corporate Governance section of the

Company’s website. The Company’s Continuous Disclosure Policy facilitates compliance with the ASX continuous disclosure requirements.

For

per

sona

l use

onl

y



43

ADDITIONAL ASX INFORMATION AS AT 6 NOVEMBER 2015

Ordinary Share Capital

35,092,289 shares are held by 853 individual holders.

Voting Rights

The voting rights attaching to ordinary shares are that on a show of hands every member present in person or by proxy shall have one vote and upon a poll each share shall have one vote. Options do not carry any voting rights.

Restricted Securities

The Company has no restricted securities on issue.

Distribution of Holders of Equity Securities

Fully Paid Ordinary Shares

Holders Total Units %

1 - 1,000 593 191,279 0.55

1,001 - 5,000 183 411,396 1.17

5,001 - 10,000 26 204,125 0.58

10,001 - 100,000 35 861,995 2.46

100,001 and over 16 33,423,494 95.24

Totals 853 35,092,289 100

Unlisted Options exercisable at $0.02 on or before 3 September 2019

Holders Total Units %

1 - 1,000 0 0 0

1,001 - 5,000 0 0 0

5,001 - 10,000 0 0 0

10,001 - 100,000 0 0 0

100,001 and over 6 25,000,000 100

Totals 6 25,000,000 100

Romfal Sifat Pty Ltd <The Fizmail Family A/C holds 6,250,000 options, comprising 25% of this class; Steven Bryson-Haynes holds 6,250,000

options, comprising 25% of this class.

Unmarketable Parcels

Holdings of less than a marketable parcel of ordinary shares at 6 November 2015:

Holders: 555

Units: 17,978,700

On-market Buy Back

There is no current on-market buy-back.

For

per

sona

l use

onl

y



44

Substantial Shareholders

Name Number of Shares % 698 CAPITAL INTERNATIONAL LIMITED 6,259,067 17.84

STEVEN BRYSON-HAYNES 6,000,000 17.10

RASHIDAH RICHENDA MACDONALD 4,000,000 11.40

MARC CHESTERFIELD 3,125,000 8.90

MR GREGORY JAMES MASON 3,125,000 8.90

MR CHRISTOPHER DAVID NAVARRO 3,125,000 8.90 MR NICHOLAS DAVID YOUNG & MR ANDREW STEVEN YOUNG <YOUNG A/C> 3,125,000 8.90

ROMFAL SIFAT PTY LTD<THE FIZMAIL FAMILY A/C> 2,500,000 7.12

Twenty Largest Holders of Quoted Shares

Name Number %

1 698 CAPITAL INTERNATIONAL LIMITED 6,259,067 17.84

2 STEVEN BRYSON-HAYNES 6,000,000 17.10

3 RASHIDAH RICHENDA MACDONALD 4,000,000 11.40

4 MARC CHESTERFIELD 3,125,000 8.90

5 MR GREGORY JAMES MASON 3,125,000 8.90

6 MR CHRISTOPHER DAVID NAVARRO 3,125,000 8.90

7 MR NICHOLAS DAVID YOUNG & MR ANDREW STEVEN YOUNG <YOUNG A/C> 3,125,000 8.90

8 ROMFAL SIFAT PTY LTD <THE FIZMAIL FAMILY A/C> 2,500,000 7.12

9 MR VIVEKANANTHAN M V NATHAN 838,357 2.39

10 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 345,418 0.98

11 CCM GLOBAL LTD 282,372 0.80

12 NORVEST CORPORATE PTY LTD 177,692 0.51

13 SEIBU PTY LTD 176,849 0.50

14 SEIBU PTY LTD <G L KEYS SUPER FUND A/C> 123,334 0.35

15 CCM MANAGEMENT LTD 116,925 0.33

16 JILDANE PTY LIMITED <MIDDLETON SUPER FUND A/C> 103,480 0.29

17 DBS VICKERS SECURITIES (SINGAPORE) PTE LTD <CLIENT ACCOUNT> 95,034 0.27

18 CITICORP NOMINEES PTY LIMITED 66,695 0.19

19 MR MARK JOHN CONWAY 65,731 0.19

20 MR PAUL MASSAROTTO 62,245 0.18

TOTAL 33,713,199 96.07

For

per

sona

l use

onl

y

Date post:	24-Aug-2020
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

For personal use only - ASX · the past 12 years, focusing on Capital Raisings, Portfolio...

Documents