Environmental Clean Technologies Ltd Stock Market Press Releases and Company Profile
Annual Financial Report
Annual Financial Report

Melbourne, Aug 31, 2018 AEST (ABN Newswire) - The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Environmental Clean Technologies Limited (googlechartASX:ECT) (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2018.

Major Highlights:

(i) ECT Finance Ltd

In July and August 2017 the consolidated entity's subsidiary, ECT Finance Ltd, entered into limited recourse loans with optionholders allowing them to obtain finance to exercise ESIOA and ESIOB options. Loans expire on 30 July 2020. As at reporting date there are 1,159,584,270 shares held as security for these loans.

(ii) New research and development rebate loan with Brevet

On 10 May 2018, the Company signed a loan agreement for a new research and development rebate loan facility with its existing debt provider, New York-based Innovation Structured Finance Co. LLC (Brevet) for the financial year ended 30 June 2018. The loan facility allows for the provision of funding to the Company of up to $4 million. The Company's research and development tax rebate received represents the security for the facility. The defaults and covenants contained within the agreement are typical of those that may be expected for a facility of this type.

On 3 August 2018, the Company signed a new Secured Loan Agreement with Brevet for the 2018/19 financial year for $4 million on the same terms and conditions as the previous facility.

(iii) Receipt of research and development tax incentive and repayment of December 2017 Brevet loan balance

On 17 January 2018, the Company received the full amount of the research and development tax incentive receivable recognised in the financial statements at 30 June 2017 amounting to $2,015,295. This was partially used to fully repay borrowings in respect of the 2017 financial year from Brevet Capital.

(iv) India project

On 30 May 2018, the Company signed a project agreement for the largest ever (~AUD$35 million) research and development collaboration between Australia and India for the joint development of its two leading technologies - Matmor and Coldry. The Company's partners, NLC India Limited (NLCIL) and NMDC Limited (NMDC), majority Indian government owned enterprises and India's largest lignite (brown coal) and iron ore miners respectively, will fund the project in return for 25.5% each of the equity in the ensuing joint-venture entity. The first order of business under the project agreement is the finalisation and execution of a set of detailed sub-agreements, which form a condition precedent to financial close. The partners expect these agreements will be signed prior to the end of October 2018.

(v) Coldry High Volume Test Facility (HVTF)

Under the Federal Government's research and development tax incentive program, product generated from eligible experimental activity is permitted to be sold. The Company is pleased to report that the Coldry solid fuel test product consumed by participants in the Company's trial programs has performed well and, as a result, the Company continues to supply these customers with further product generated by its experimental activity on an ongoing basis. The Company is now expanding its HVTF test program and will continue to make Coldry solid fuel test product available for sale to these consumers across Victoria and Tasmania.

In addition to the successful initial testing across several consumers and the subsequent ongoing sale of available Coldry solid fuel over recent months, the Company also assisted customers with the review and scoping of boiler upgrades, with a focus on Coldry handling systems, allowing for progressive scale up as capacity at the Bacchus Marsh site is expanded.

The establishment of regular sales of Coldry solid fuel test product supports the planned Stage 3 upgrade of the HVTF to a capacity of up to 35,000 tonnes a year, including development of an expanded raw materials handling and finished product storage capacity. The upgrade activity at the HVTF will further support collection of critical scale-up research data to inform aspects of both the integrated Coldry demonstration and Matmor pilot plant project in India and the Company's proposed Latrobe Valley project here in Australia.

(vi) Latrobe Valley project

A feasibility study for the proposed establishment of a large-scale Coldry demonstration plant of ~170,000 tonnes per annum capacity has commenced. The feasibility study scope entails: Phase 1: Scoping study and selection phase; Phase 2: Prefeasibility study; Phase 3: Feasibility study and funding assessment. Phase 1 was completed and announced (15 November 2017), highlighting the Company's partnership with Energy Australia for potential site location and coal supply. The Company's focus on advancing the India project has taken priority since the conclusion of Phase 1, resulting in a pause in activity around the Latrobe Valley project in recent months. The initial scoping and site selection provided a solid foundation to proceed to prefeasibility and the Company looks forward to progressing this program in coming months.

This proposed project holds significant short-term interest in providing increased energy security and affordability through diversification of Victoria's energy solutions and longer-term interest as a gateway enabler to the deployment of High- Efficiency, Low Emissions (HELE) electricity production and low emission chemical production, including hydrogen, from Victoria's world-class lignite assets. HELE power stations, hydrogen production and fertilizer production are all industries of the future for the Latrobe Valley and they all share the common need to reduce moisture content of brown coal. Following successful scale up, Coldry has the potential to deliver this outcome economically and with zero-emissions when integrated with a waste heat source.

(vii) ECT Finance Ltd

During the period, ECT Finance Ltd, a subsidiary of the Company, offered ELF loans to holders of ESIOA and ESIOB options, for the sole purpose of financing the exercise of these options and conversion into Fully Paid Ordinary shares of the Company. As announced on 1 August 2017, ECT Finance Ltd approved approximately $14,100,000 worth of ELF loans. During the year, ECT Finance Ltd has received $536,325 in principal and interest payments. Cashflows raised through repayment of principal and interest over the loan period will be available to the Company to finance ongoing working capital.

The value of the loan book as at 31 July 2018 is $15,259,809 (including interest accrued and capitalised to the loans to 31 July 2018). The value of security held is $16,234,180 (based on a 1.4c share price). The loans are scheduled to expire on 30 July 2020 and interest rates across each of the loans can vary according to payment methods. For accounting purposes, the ELF loans (and the related shares issued) are treated as the issue of options as required by accounting standards (refer to notes 21 and 22 to the financial statements for further details). Notwithstanding this, the loans represent funds owed to ECT Finance Ltd by shareholders pursuant to commercial and legal contracts.

(viii) Issue of options

ECTOC options (originally called ESIOC options) were bonus options issued to shareholders on the basis of one option for every four shares held as at 21st July 2017. This resulted in the issue of issue of 846,088,751 ECTOC options with an exercise price of $0.045 and expiry date of 31 July 2019.

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http://abnnewswire.net/lnk/OVG9O3LR


About Environmental Clean Technologies Ltd

Environmental Clean Technologies LimitedEnvironmental Clean Technologies Limited (ASX:ECT) is in the business of commercialising leading-edge coal and iron making technologies, which are capable of delivering financial and environmental benefits.

We are focused on advancing a portfolio of technologies, which have significant market potential globally.

ECT's business plan is to pragmatically commercialise these technologies and secure sustainable, profitable income streams through licencing and other commercial mechanisms.

http://www.linkedin.com/company/398938 abnnewswire.com 


Contact

Glenn Fozard
Chairman
Environmental Clean Technologies Ltd
E: info@ectltd.com.au
WWW: www.ectltd.com.au



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