ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. - Annual Report 2015

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Full$Year$Results$for$Year$Ended$30$June$2015$

Monday$31$August$2015: !Environmental!Clean!Technologies!Limited!(ASX:ESI)!attaches!the! Company’s!Financial!Report!for!the!year!ended!30!June!2015.!

In!the!attached!Financial!Report,!you!will!find!a!wealth!of!detail!outlining!the!Company’s!status[! financial!results,!governance!status,!remuneration!detail!and!so!on.!

The!document!is!important,!and!the!Board!of!ECT!encourages!you!to!read!it!in!its!entirety.!

Highlights!within!the!report!that!should!be!noted!are:!

Positive!NTA!from!2014!
Decreased!underlying!cash!expenditure!of!more!the!$400k!year!over!year!(nearly!20%!of! current!expenditures)!–!a!result!of!continued!strong!cost!management!focus!and! operational!discipline!
A!significant!increase!in!the!asset!base!of!the!Company,!associated!with!the!acquisition!of! the!Matmor!process!equipment!
A!corresponding!increase!in!the!depreciation!expense!(nonbcash)!associated!with!the! Matmor!equipment!acquisition!
The!successful!conclusion!of!the!issue!of!new!Options!series!(ESIOA!and!ESIOB),!as!well! as!subsequent!conversion!of!a!portion!of!those!options,!supporting!the!Company’s!cash! flow!needs!
The!continued!importance!of!the!R&D!tax!rebate!in!supporting!the!Company’s!onbgoing! activities,!including!value!from!unclaimed!Matmor!depreciation!balance,!via!the!R&D! rebate,!in!excess!of!$1.6!million!!

For$further$information,$contact:

Ashley'Moore'–'Managing'Director [email protected]''

Suite!502,!Level!P5,!9!Yarra!Street,!Melbourne!Vic,!3000!Australia!!|!Phone!+613!9939!4595!|!www.ectltd.com.au!|!ABN!28!009!120!405! Listed!on!the!Australian!Stock!Exchange!(ASX:ESI)

Environmental Clean Technologies Limited Appendix 4E Preliminary final report

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1. Company details

Name of entity: Environmental Clean Technologies Limited ABN: 28 009 120 405 Reporting period: For the year ended 30 June 2015 Previous period: For the year ended 30 June 2014

2. Results for announcement to the market

			$
Revenues from ordinary activities	up	4.4% to	12,557
Loss from ordinary activities after tax attributable to the owners of
Environmental Clean Technologies Limited	up	45.8% to	(3,716,176)
Loss for the year attributable to the owners of Environmental Clean
Technologies Limited	up	45.8% to	(3,716,176)

Dividends

There were no dividends paid, recommended or declared during the current financial period.

Comments

3. Net tangible assets

Net tangible assets per ordinary security	Reporting period Cents 0.02	Previous period Cents (0.12)

4. Control gained over entities Name of entities (or group of entities) Environmental Clean Technologies Development and Services India Private Limited was incorporated during the year. Date control gained February 2015

$ Contribution of such entities to the reporting entity's profit/(loss) from ordinary activities before income tax - during the period (where material) Profit/(loss) from ordinary activities before income tax of the controlled entity (or group of entities) for the - whole of the previous period (where material) 5. Loss of control over entities Name of entities (or group of entities) Not Applicable Date control lost

5. Loss of control over entities

Environmental Clean Technologies Limited Appendix 4E Preliminary final report

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Contribution of such entities to the reporting entity's profit/(loss) from ordinary activities before income tax during the period (where material)

Profit/(loss) from ordinary activities before income tax of the controlled entity (or group of entities) whilst - controlled during the whole of the previous period (where material)

6. Dividends

Current period

There were no dividends paid, recommended or declared during the current financial period.

Previous period

There were no dividends paid, recommended or declared during the previous financial period.

7. Dividend reinvestment plans

Not applicable.

8. Details of associates and joint venture entities

	Reporting	entity's	Contribution to profit/(loss)	Contribution to profit/(loss)
	percentage	holding	(where material)
	Reporting	Previous	Reporting	Previous
	period	period	period	period
Name of associate / joint venture	%	%	$	$
Victoria Coldry Pty Ltd	50.00%	50.00%	-	-
Coldry East Kalimantan Pty Ltd	50.00%	50.00%	-	-
Group's aggregate share of associates and joint venture
entities' profit/(loss) (where material)
Profit/(loss) from ordinary activities before income tax			-	-
Income tax on operating activities			-	-

9. Foreign entities

Details of origin of accounting standards used in compiling the report:

Not applicable.

10. Audit qualification or review

Details of audit/review dispute or qualification (if any):

The financial statements have been audited. An unqualified opinion has been issued which includes an Emphasis of Matter paragraph.

Environmental Clean Technologies Limited Appendix 4E Preliminary final report

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11. Attachments

Details of attachments (if any):

The Annual Financial Report of Environmental Clean Technologies Limited for the year ended 30 June 2015 is attached.

12. Signed

Signed ______ Ashley Moore Managing Director Melbourne

Date: 31 August 2015

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Environmental Clean Technologies Limited ABN 28 009 120 405

Annual Financial Report - 30 June 2015

Environmental Clean Technologies Limited Corporate directory 30 June 2015

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Directors	Glenn Fozard (Chairman)
	Ashley Moore (Managing Director)
	Barry Richards
	David Smith
Company secretary	Adam Giles
Notice of annual general meeting	The annual general meeting of Environmental Clean Technologies Ltd will be held at:
	RSM Bird Cameron
	Level 21, 55 Collins Street
	Melbourne VIC 3000
	at 10:00am, Friday 30 October 2015
Registered office	Suite 502
	Level P5, 9 Yarra Street
	South Yarra, VIC, 3141
Principal place of business	Suite 502
	Level P5, 9 Yarra Street
	South Yarra, VIC, 3141
Share register	Security Transfer Registrars Pty Ltd
	770 Canning Highway
	Applecross WA 6153
Auditor	BDO East Coast Partnership
	Level 14
	140 William Street
	Melbourne VIC 3000
Bankers	National Australia Bank Limited
	3/330 Collins Street
	Melbourne VIC 3000
Stock exchange listing	Environmental Clean Technologies Limited shares are listed on the Australian
	Securities Exchange (ASX code: Shares - ESI; Options - ESIOA, ESIOB)
Website	www.ectltd.com.au
Corporate Governance Statement	The Corporate Governance Statement of the company can be found at
	http://www.ectltd.com.au/about-us/corporate-governance/
	This statement has been approved by the Board and is current as at 31 August 2015.

Environmental Clean Technologies Limited Directors' report 30 June 2015

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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 (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 2015.

Directors

The following persons were directors of Environmental Clean Technologies Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:

Glenn Fozard - Chairman Ashley Moore - Managing Director David Smith (appointed 1 February 2015) Barry Richards (appointed 5 June 2015) Iain McEwin (resigned 5 June 2015) Stephen Carter (resigned 11 December 2014)

Principal activities

During the financial year the principal continuing activities of the consolidated entity consisted of investment, research, development and commercialisation of environmentally cleaner technologies and processes capable of reducing carbon emissions and environmental damage, in the energy and resource sectors. These include:

development of a large-scale demonstration project for the Coldry Process;
advancement of the Matmor Process toward pilot scale; and
managing the development and extracting value from Intellectual Property.

Coldry Process

The Coldry process is an economic method of dewatering low-rank coal to produce an upgraded black coal equivalent. The process is currently poised to progress to large-scale demonstration ahead of broader commercial rollout.

Once applied, the mechanically simple Coldry process produces pellets that are stable, easily stored, can be transported, and are of equal or higher energy value than many black coals.

When used in electricity production, Coldry pellets have a significantly lower CO2 footprint than the low-rank coal from which they are made.

The Coldry process also acts as a ‘Gateway technology’, making an ideal front-end feedstock that enables numerous higher value upgrading applications such as coal to oil, gas and iron production.

When integrated with our Matmor process, the Coldry process provides an essential and cost effective front-end drying and pelletising solution that enables the world first and only low-rank coal based primary iron production method.

Essentially, the Coldry process combines two mechanisms to achieve efficient, cost-effective dewatering; Brown Coal Densification and Waste Heat Utilisation.

Brown Coal Densification is achieved through the destruction of the internal porous structures, mobilising the structurally

trapped water within low-rank coal.

Waste Heat Utilisation provides ‘free’ evaporative energy to remove the moisture, thereby minimising paid energy input, resulting in net energy uplift and net CO2 reductions.

Matmor Process

Matmor is a cleaner, lower-emission, one-step process for producing high-grade primary iron, using low-rank coal to displace the need for coking coals, as used in the incumbent blast furnace process.

The Matmor process leverages a fundamentally different chemical pathway compared to the incumbent blast furnace process, enabling the use of alternative raw materials, providing a lower-cost primary iron making alternative.

Environmental Clean Technologies Limited Directors' report 30 June 2015

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Matmor creates a high-grade iron product from low-rank coal and ferrous media such as iron ore, mill scale or other iron bearing wastes or tailings. The process involves blending low-rank coal with iron ore or other metal oxide bearing media to form a paste that is dewatered using the Coldry process. The ‘composite’ pellets are then fed into ECT's simple low cost, low emission, patented Matmor retort where the remaining moisture is removed, the coal volatiles are driven off and the iron oxides are reduced to metal.

The Matmor process operates below 1000ºC, compared to a blast furnace which operates at around 1500ºC. Lower temperature operation requires less energy input and results in less thermal stress on the plant, enabling lower cost materials to be used in its construction.

Matmor metal product is an ideal feedstock for the production of specific grades and forms of iron and steel, via secondary processes such as electric arc, induction furnace or fully integrated steel making.

Intellectual Property

The Group owns both the Coldry and Matmor intellectual property. The Coldry process is covered by patents, or pending patents in all major markets with significant brown coal deposits.

Matmor is covered by two Australian patents, and due to its intrinsic reliance on Coldry for feedstock preparation, is afforded an additional degree of protection via Coldry patents. In markets where neither Coldry nor Matmor patents exist, the company will employ other IP protection strategies.

Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $3,716,176 (30 June 2014: $2,548,113). Underlying cash expenditure decreased by over $400k, while non-cash expenses increased, primarily depreciation associated with the Matmor Test Plan assets.

This result is driven by a combination of increased non-cash expense (primarily depreciation) offset by decreased cash expenditure and increased recognised income (AusIndustry R&D Tax Incentive Rebate).

The increase in the R&D Tax Incentive income for the year is due to the recognition of rebate received in October 2014 as current year income but which was associated with eligible R&D activity of the 2014 financial year, combined with a change in accounting judgement relating to when rebate income should be recognised whereby reasonable assurance in relation to receipt of the entitlement to the R&D rebate is now deemed at the time of incurring the eligible R&D expense. The expected Tax Incentive for this reporting year increased by $550k over the prior year driven largely by the depreciation associated with the Matmor equipment assets purchased in December 2014.

Whilst the loss represents an increase of $1.17m (46%) on the prior year result, non-cash transactions including depreciation of the recently acquired Matmor Assets accounts for $1.42m – more than the change in the loss. It is important for shareholders to realise this represents an underlying decrease in cash spend rate of over $400k, while continuing to deliver on key strategic objectives and developments.

Operational Highlights

Total expenses increased by 29% to $5.41m from $4.19m in the prior year. The increase in expenses of $1.22m is made up of an increase in non-cash expenses of $1.67m, offset by an underlying cash spend reduction of $400k, or nearly 20%. This was achieved in a year when significant increases in activity in India project development, as well as the acquisition of Matmor, were executed.

Environmental Clean Technologies Limited Directors' report 30 June 2015

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Corporate expenses increased by $123k driven by increases in:
Advisory costs associated with capital raising of $153k, including $83k non-cash;
ASX and registry charges of $49k associated with new options series establishment;
Accounting expense of $27k associated with Matmor acquisition and ECT India establishment of $42k, partially offset by underlying savings of $15k.

The increase in Corporate expense was partially offset by savings in R&D Claim preparation expense (-$15k) and Consulting (-$20k) resulting in the headline increase of $123k including $83k non-cash.

• Legal expenses increased by $21k, driven by the activities associated with the Matmor acquisition (+$53k), partially offset by underlying savings. It must be noted that the acquisition of Matmor was executed at significant saving versus the similar transaction of the acquisition of Coldry in the 2009 financial year.

• Employee costs decreased by $34k, made up of cash savings of $56k, offset by a non-cash charge related to performance incentive share-based payments for potential options to be issued to Chairman G. Fozard.

• Sales and Marketing expenses increased by $148k, driven by increased project development activities in India (+$104k) and patent expenses (+$26k), issuance of the Indian patent, plus a shift in timing of the EU patent renewals.

• Engineering & Pilot Plant expenses decreased by $379k, driven by Engineering expense (-$342k - conclusion of the Arup activity in July 2013); Plant equipment costs (-$93k); Sample testing expenses (-$37k); offset by a non-cash expense of $110k associated with the extension of development rights over Matmor prior to its acquisition.

• Other expenses decreased by $64k, associated with cessation of activities on development of EL5119.

• Finance costs, a largely non-cash category, increased by $31k. Movement is driven by the adjustments associated with the Coldry earn-out creditor and the deferred consideration associated with Matmor acquisition.

• Depreciation and amortisation expense increased by $1.374m. This is driven by the acquisition of the Matmor Test plant equipment, and its associated short useful life dedicated to the Matmor Pilot Plant development project.

Corporate

Organisational focus on Indian project development through the year resulted in increased corporate and sales and marketing expenses. The activities around these cost centres included:

Stakeholder engagement
Project development
Market analysis

These activities have delivered progress toward execution of a tripartite agreement with two Indian Public Sector Undertakings (PSU’s), Neyveli Lignite Corporation and the National Mineral Development Corporation of India, for the deployment of an integrated Coldry demonstration and Matmor pilot plant.

Coldry

The key objective heading into the reporting period remained the demonstration of the Coldry technology at commercial scale.

Over several years the company has developed and progressed its India-focused demonstration strategy.

Coldry advancement is focussed on, but not limited to, the proposed first demonstration plant, targeted to be built at Neyveli Lignite Corporation’s (NLC) site in Tamil Nadu, India. This has continued to advance through the year, with key milestones being:

Environmental Clean Technologies Limited Directors' report 30 June 2015

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• July: JV agreement signed with Mecrus, Australia’s leading brown coal plant operator, focused on provision of commissioning, operations and maintenance services to projects in Australia and overseas.

• August: Submission of the Coldry Commercial-scale Demonstration Plant (CDP) Feasibility Study report and ongoing commercial discussions with the Board of Neyveli Lignite Corporation (NLC).

• September: Agreement reached with NLC to proceed to high-level Board-appointed review committee for detailed assessment of the proposed project. Commenced establishment of Indian entity.

• November: Merging of Coldry and Matmor development opportunities to align synergies between ECT, NLC and NMDC.

• February: ECT India entity established.

• April: Indian Coldry patent issued.

• May: Hosted a high-level delegation from NLC and India’s Ministry of Coal ahead of proposed project commencement.

• June: entered a strategic alliance with Coal Energy Australia (CEA) for the proposed development of Coldry-enabled pyrolysis technology in Victoria and other key markets.

Running parallel to our Coldry demonstration project development activities with NLC were a series of Matmor testing activities with NMDC. These activities are covered in the following section, however during the year it became increasingly clear that all parties saw the synergies in working together to advance both technologies in an integrated manner.

The parties proceeded to develop a tripartite collaboration agreement aimed at an integrated Coldry Demonstration and Matmor Pilot plant.

As the fiscal year drew to a close, the company was working with NLC and NMDC to progress the proposed tripartite agreement through the Indian National Government clearance processes.

Matmor

The Matmor process was the subject of accelerated development efforts during the year due to the positive outcome of testing Indian iron ores and the subsequent preference by NLC and NMDC to pursue an integrated Coldry demonstration and Matmor pilot project. Key events and milestones throughout the year include:

July: Extension of the Matmor license agreement.

• October: Announced formal discussions with the National Mineral Development Corporation of India (NMDC) were in progress following encouraging benchmark testing of various iron ore samples.

• December: formal acquisition of the Matmor technology including plant, equipment and intellectual property.

• January through to June: ongoing testing of Indian iron ore samples involving the optimisation of raw material preparation and formulations resulting in significantly improved iron yield, exceeding expectations.

Matmor is dependent on Coldry for its feedstock preparation, and as such Coldry needs to be demonstrated at commercial scale to de-risk Matmor development.

The evolution of the tripartite collaboration agreement with NLC and NMDC during the year effectively brings forward our Matmor development plans, compared to originally envisaged timeframes.

Fundamental R&D has continued throughout the fiscal year, with extensive bench testing of a broad scope of Indian iron ore supplied by NMDC and Indian lignite supplied by NLC. These have been, in every instance, successful at producing a high quality metal.

The positive outcome of this testing led to the pursuit of the tripartite collaboration agreement and a second round of testing aimed at refining yield. This second phase has resulted in significantly improved yield across all ore samples compared to the first phase benchmarking, confirming the suitability of the Matmor process.

The tripartite collaboration agreement brings the Matmor development timeline forward, driven by India’s desire to add greater value to its low-rank coal and iron ore resources.

Environmental Clean Technologies Limited Directors' report 30 June 2015

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In addition, ECT has continued to explore the basic footprint of Matmor with respect to non-ferrous metals, including nickel, titanium and manganese ores, with promising results. Further testing is required to generate the necessary data to develop these applications into the future.

Matmor, being a high temperature (up to 1000ºC) pyro metallurgical process, will entail a greater level of engineering and scale up development than Coldry. The next phase of development is to scale up from our 1 tonne per day test plant to a Pilot plant with a capacity of 15-20 tonnes per day. To this end the company is actively seeking suitably qualified engineering partners in India to partner on Matmor pilot plant development.

Significant changes in the state of affairs

The overriding focus for the consolidated entity for the financial year was on progression of its proposed Coldry demonstration project at Neyveli Lignite Corporation ('NLC'). The process involved the preparation of a detailed technical and commercial feasibility study for deployment at NLC’s site near Tamil Nadu. The feasibility study report was submitted during the report period, with NLC’s Board forming the requisite high-level review committee to assess the project in detail.

Running parallel to the Coldry focused activity with NLC, the consolidated entity held discussions and performed raw material testing with India’s National Mineral Development Corporation ('NMDC') in relation to Matmor development and successfully concluded an initial benchmarking program on several iron ore samples provided by NMDC. Lignite from Neyveli was used as the reductant. The tests confirmed the ores were suitable for reduction to metallic iron by the Matmor process.

The consolidated entity, NLC and NMDC subsequently pursued joint discussions around a tripartite collaboration arrangement with the objective of developing an integrated Coldry Demonstration Plant and Matmor Pilot Plant, at NLC’s site in Tamil Nadu, southeast India.

At the reporting date the consolidated entity has received Board level approval from NLC and NMDC to proceed with the proposed collaborative arrangement and all parties are working through the relevant Indian National Government clearance processes, with support from Australia’s High Commission and Austrade personnel.

In relation to capital management activities, the consolidated entity issued two new Options, ESIOA and ESIOB. ESIOA Options closed, fully subscribed. ESIOB Options were a pro rata issue on a 1 for 3 basis for every ESI held at the record date. The consolidated entity concluded the Strategic Deliverable Bond in August and rolled over its Fast Finance facility in November.

The consolidated entity has continued to progress fundamental research and development of the Matmor technology with the testing of numerous low-rank coals and iron bearing materials from both domestic and overseas sources in addition to expanding testing to ores containing Nickel, Chrome, Manganese, and Titanium. The company finalised the purchase of the Matmor Test Plant equipment for use in its Pilot Plant development program, and concluded an agreement to acquire the Matmor Intellectual Property in return for a future share of revenues generated by the commercialisation of that technology.

There were no other significant changes in the state of affairs of the consolidated entity during the financial year.

Matters subsequent to the end of the financial year

No matter or circumstance has arisen since 30 June 2015 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Likely developments and expected results of operations

Coldry

Delivery of the Coldry Demonstration Plant is the consolidated entity's number one objective. To that end the consolidated entity has developed its India strategy to develop low-cost engineering capability for plant and equipment as well as advancing project opportunities for demonstration.

Environmental Clean Technologies Limited Directors' report 30 June 2015

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Matmor

The company is focused on advancing Coldry as its lead technology, which is a necessary sequencing given that the Coldry process is required to deliver the feedstock for Matmor.

Matmor is positioned to commence the next steps in scale-up on the commercialisation pathway:

pre-feasibility and expanded testing works at the Test Plant to prepare the design briefing to support commencement of pilot plant design;
pilot plant design program; and
pilot plant construction and operations

The search for the most appropriate technical partner for Matmor is approaching conclusion.

Since the 2014 reporting period, the interest in Matmor from potential partners in India has increased. This interest has resulted in the acceleration of the planned timing of the pilot plant project, immediately following successful commissioning of the Coldry Demonstration Plant, and supported by amendments to the proposed Coldry Demonstration Plant to facilitate appropriate integration with the Matmor Pilot Plant.

Environmental regulation

With respect to current activities, the company is not the subject of environmental regulations. However, as the company considers commencement of operations through the Coldry Demonstration Plant, this status will change. Appropriate planning is in place to manage this transition.

Information on directors

Information on directors
Name:	Glenn Fozard
Title:	Executive Chairman
Qualifications:	BBus (Int. Trade), BA (Psych)
Experience and expertise:	Glenn has a strong commercial background and extensive experience in finance and
	capital markets at both board and executive level. With a deep understanding of
	tailored financial solutions for SMEs in the Cleantech and Agricultural sectors, he
	supports the company with valuable guidance in the technology development, risk
	management and capital raising areas. Glenn is the founding partner of Greenard
	Willing, a specialist financial advisory firm. Glenn has held an advisory position with
	the company for over five years and has contributed significantly towards the capital
	raising for the company during that time.
Other current directorships:	None
Former directorships (last 3 years):	None
Special responsibilities:	Member of Remuneration, Nomination and Governance Committee; Member of Audit
	and Risk Committee
Interests in shares:	Nil
Interests in options:	50,000,000 ESIOA Options (subject to escrow), 15,000,000 performance based
	options
Interests in rights:	Nil
Contractual rights to shares:	Nil
Name:	Ashley Moore
Title:	Managing Director
Qualifications:	BEng(Chem), MIEAust, CPEng, MAICD
Experience and expertise:	Ashley is a Chartered Professional Engineer, with extensive experience in all facets
	of manufacturing, plant operations, supply chain management, sales and marketing
	and major project delivery from 30 years in industry. Ashley joined the company in
	October 2009 as Business Manager, Coldry. Ashley was appointed to the role of
	Chief Operating Officer of the company in August 2011, and then to Managing
	Director in 2013.
Other current directorships:	None
Former directorships (last 3 years):	None
Special responsibilities:	Member of the Audit and Risk Committee
Interests in shares:	2,916,668 ordinary shares
Interests in options:	78,296,174 ESIOA Options; 972,223 ESIOB Options
Interests in rights:	Nil
Contractual rights to shares:	Nil

Environmental Clean Technologies Limited Directors' report 30 June 2015

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Name: David Smith (appointed 1 February 2015) Title: Non-Executive Director Qualifications: Bachelor of Commerce, Bachelor of Laws (Honours) Experience and expertise: David has a strong legal and commercial background, having practiced commercial law for over 24 years including nearly 17 years as a partner in national firms. He is currently a partner in the intellectual property and technology group at Gadens Lawyers. He has assisted many companies with protecting their intellectual property, IP commercialisation agreements, collaborative research agreements and international negotiations. This year David was recognised as a 'Best Lawyer - Intellectual Property' for the second year running. He is currently Vice President of Bicycle Network where he also chairs the Audit and Risk Committee. Other current directorships: None Former directorships (last 3 years): None Special responsibilities: Member of Audit and Risk Committee Interests in shares: Nil Interests in options: Nil Interests in rights: Nil Contractual rights to shares: Nil Name: Barry Richards (appointed 5 June 2015) Title: Non-Executive Director Qualifications: MAICD Experience and expertise: Barry has a strong industry and commercial background of over 30 years including his role as Managing Director of Mecrus Pty Ltd since its formation over 16 years ago, contract and business development roles with Siemens / Silcar, and operations and maintenance management experience with the State Electricity Commission of Victoria (SECV). He provides extensive experience in business management, major project development and delivery, coal plant operations and maintenance and has a broad understanding of technology and process development. Other current directorships: None Former directorships (last 3 years): None Special responsibilities: Member of Remuneration, Nomination and Governance Committee Interests in shares: Nil Interests in options: Nil Contractual rights to shares: Nil Name: Iain McEwin (resigned 5 June 2015) Title: Non-Executive Director Experience and expertise: Iain has considerable business experience in the ownership and operation of his own business as a supplier to the building and construction industry. Iain is a key shareholder in the company. Other current directorships: None Former directorships (last 3 years): None Special responsibilities: Not applicable, as no longer a director Interests in shares: Not applicable, as no longer a director Interests in options: Not applicable, as no longer a director Contractual rights to shares: Not applicable, as no longer a director

Environmental Clean Technologies Limited Directors' report 30 June 2015

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Name:	Stephen Carter (resigned 11 December 2014)
Title:	Non-Executive Director
Qualifications:	MBA, Dip Co. Dir., Dip App. Sc., FAICD
Experience and expertise:	Stephen has extensive experience in delivering strategic projects including the
	commissioning of Crown Casino, the commercial preparation for the integration of
	Ansett/Air New Zealand, delivery of a multi-million dollar funding package for the
	redevelopment of the Melbourne Showgrounds, the review and transformation of Air
	New Zealand’s engineering division and the commercial repositioning of Spotlight Pty
	Ltd.
Other current directorships:	None
Former directorships (last 3 years):	None
Special responsibilities:	Not applicable, as no longer a director
Interests in shares:	Not applicable, as no longer a director
Interests in options:	Not applicable, as no longer a director
Contractual rights to shares:	Not applicable, as no longer a director

'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated.

'Former directorships (in the last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated.

Company secretary

Adam Giles has over 20 years business and management experience across both private and public sectors. His long-term involvement with the development of the Coldry and Matmor technologies provides valuable background, helping inform strategic direction. Key responsibility areas include Operations, Investor and Media Relations and Corporate Governance.

Meetings of directors

The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during the year ended 30 June 2015, and the number of meetings attended by each director were:

			Remuneration, Nomination	Remuneration, Nomination
	Full Board		and Governance Committee		Audit and Risk	Committee
	Attended Held		Attended	Held	Attended	Held
Glenn Fozard	10	10	2	2	4	4
Ashley Moore	10	10	-	-	4	4
Stephen Carter	5	5	1	1	2	2
Iain McEwin	10	10	1	1	-	-
David Smith	3	3	-	-	2	2

Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee.

Barry Richards is a member of the Remuneration, Nomination and Governance Committee. There have been no meetings held since his appointment.

Retirement, election and continuation in office of directors

In accordance with the Constitution of the company, at each Annual General Meeting ('AGM') one-third (or a number nearest to one-third and rounded up) of the number of directors (excluding a director appointed to either fill a casual vacancy or as an addition to the existing directors) must retire by rotation as well as any other director who has held office for three years or more since last being elected and any other director appointed to fill a casual vacancy or as an addition to the existing directors. Such directors can offer themselves for re-election.

At the 2014 AGM of the company, both Glenn Fozard and Stephen Carter were re-elected as directors.

Remuneration report (audited)

The remuneration report details the key management personnel (KMP) remuneration arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.

Environmental Clean Technologies Limited Directors' report 30 June 2015

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KMP are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the consolidated entity, directly or indirectly, including all directors.

The remuneration report is set out under the following main headings:

Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel

Principles used to determine the nature and amount of remuneration

The Board’s remuneration policy is to ensure the remuneration package properly reflects the KMP’s duties and responsibilities and that the remuneration is competitive in attracting, retaining and motivating people of the highest quality. KMP remuneration is arrived at after consideration of the level of expertise each director and executive brings to the company, the time and commitment required to efficiently and effectively perform the required tasks and after reference to payments made to KMP's in similar positions in other companies.

The Board through the Remuneration, Nomination and Governance Committee is responsible for the executive reward framework and making recommendations on remuneration packages and policies applicable to the Board members and senior executives of the company. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and is consistent with market best practice. It is the aim of the Board of Directors ('the Board') that the executive reward structure satisfies appropriate corporate governance guidelines such that it is competitive and reasonable, acceptable to shareholders, aligns remuneration with KMP performance indicators, and is transparent to all stakeholders.

In accordance with best practice corporate governance, the structure of non-executive directors and executive remunerations are separate.

Non-executive directors remuneration

Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors' fees and payments are reviewed annually by the Remuneration, Nomination and Governance Committee. The Remuneration, Nomination and Governance Committee may, from time to time, receive advice from independent remuneration consultants to ensure that non-executive directors' remuneration is appropriate and in line with the market. The chairman's fees are determined independently and are based on comparative roles in the external market. The chairman is not present at any discussions relating to determination of their own remuneration. Non-executive directors do not receive share options or other incentives.

The aggregate non-executive director remuneration is determined by a general meeting. Effective 1 July 2012, the base fee payable to non-executive directors for discharging their duties as directors was capped at $75,000 per annum each, being $50,000 in cash and $25,000 in shares, for which shareholders provided approval at the 2012 AGM.

The company has a three-tier base remuneration and a two-tier additional remuneration structure in place as follows:

Three tier base remuneration:

(i) Non-executive directors - $25,000; (ii) Non-executive directors (committee members) - $50,000; (iii) Trainee Director - $30,000

Two tier additional reward remuneration structure:

(i) Committee chair - $10,000; (ii) Chairman - $25,000

Environmental Clean Technologies Limited Directors' report 30 June 2015

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Pursuant to a General Meeting held on 23 August 2013, the following 'Non-Executive Directors’ Remuneration Policy' with respect to remunerating non-executive directors of the company for providing extra services on behalf of the company or its business was approved.

Such a process was followed to appoint Chairman Glenn Fozard to his executive role, and this is reported in more detail in subsequent sections of the Remuneration report.

Any remuneration paid to a non-executive director must be reasonable given the circumstances of the company and the responsibilities of the non-executive director;
wherever practicable, the company will obtain an independent quotation or estimate from an appropriate independent party in respect of those additional services;
if the non-executive director is an appropriate person to perform those additional services, the remuneration must be benchmarked against any such quotation or estimate obtained by the company;
the Managing Director or designate, in the absence of the Managing Director, must report to the Board on the budgetary impact to the company of the proposed engagement of the non-executive director. Any engagement of a non-executive director to provide those additional services must be unanimously approved by all directors (other than the non-executive director providing services);
the non-executive director must report in writing to the Board at the completion of the additional services in such form as the Board may reasonably require;
all amounts paid to non-executive directors in respect of providing those additional services will be disclosed in the annual financial statements of the company; and
the above policy also applies to entities associated with a director, where the additional services of the non-executive director are provided through that entity.

Executive remuneration

The Remuneration, Nomination and Governance Committee is responsible for determining remuneration and nomination policies in respect of KMP. In establishing such policies the Committee is guided by external remuneration surveys and industry practices, commensurate with the scale and size of the company’s operations. The remuneration levels are reviewed regularly to ensure the company remains competitive as an employer.

Executive and Director Incentive Plan

The Board considers it important that a component of executive and director remuneration be by way of the issue of company securities, to help align their interests to the success of the company. The Plan permits the grant of bonuses in the form of shares, options or rights on an annual basis to KMP (including executive directors) as an incentive component of their remuneration, to reward performance against benchmarks agreed by the Board and to reduce the cash expenditure of the company. The Plan does not contemplate the issue of securities to non-executive directors.

The Board may at its discretion impose one or more vesting conditions, including time or performance conditions, at the time of grant of rights to share or options under the Plan. Any issue of shares, grant of options and rights to shares or options will not confer any right or interest in shares, nor have any entitlement to dividends until any vesting conditions have been met. Any options or rights to shares or options which have not been exercised will expire and cease to exist in accordance with the terms and conditions specified at the time of grant. The Plan permits the Board to enforce forfeiture of unvested shares, grant of options and rights to shares or options under defined circumstances. If a change of control of the company occurs, the Board may at its discretion resolve that the vesting conditions applicable to unvested options or unvested rights to shares or options be waived.

In respect of the Managing Director the issue of shares, options or performance rights under the Plan will be applied to the provision of bonuses and/or part of his base remuneration.

The Remuneration, Nomination and Governance Committee reviewed the long-term equity-linked performance incentives specifically for executives during the year ended 30 June 2015.

Any securities issued under the Plan are not counted against the 15% limit on placements, given shareholders approval, as required under the ASX Listing Rules. No bonuses were achieved in the fiscal year ended 30 June 2015.

Executive remuneration and reward framework

The executive remuneration and reward framework has four components:

base pay and non-monetary benefits
consulting fees
share-based payments
other remuneration such as superannuation and long service leave

Environmental Clean Technologies Limited Directors' report 30 June 2015

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The combination of these comprises the executive's total remuneration.

Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the Remuneration, Nomination and Governance Committee, based on individual and business unit performance, the overall performance of the consolidated entity and comparable market remunerations.

Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it does not create any additional costs to the consolidated entity and provides additional value to the executive.

The short-term incentives ('STI') program is designed to align the targets of the business units with the targets of those executives in charge of meeting those targets. STI payments are granted to executives based on specific annual targets and key performance indicators ('KPI's') being achieved. KPI’s include profit contribution, customer satisfaction, leadership contribution and product management.

The long-term incentives ('LTI') include long service leave and shares or options under the Plan.

Consolidated entity performance and link to remuneration

Remuneration for certain individuals is directly linked to performance of the consolidated entity. A portion of bonus and incentive payments are dependent on defined KPI being met. The remaining portion of the bonus and incentive payments are at the discretion of the Remuneration, Nomination and Governance Committee. Refer to the section 'Additional information' below for details of the earnings and total shareholders return for the last five years.

Use of remuneration consultants

During the financial year ended 30 June 2015, the consolidated entity did not engage any remuneration consultants for the purpose of review of existing remuneration policies.

Details of remuneration

Amounts of remuneration

Details of the remuneration of the KMP of the consolidated entity are set out in the following tables.

The KMP of the consolidated entity during the current financial year consisted of the following:

Glenn Fozard - Chairman and Executive Director
Ashley Moore - Managing Director
David Smith - Non-Executive Director (appointed 1 February 2015)
Barry Richards - Non-Executive Director (appointed 5 June 2015)
Iain McEwin - Non-Executive Director (resigned 5 June 2015)
Stephen Carter - Non-Executive Director (resigned 11 December 2014)
Adam Giles - Company Secretary

Environmental Clean Technologies Limited Directors' report 30 June 2015

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2015 Non-Executive Directors: David Smith Barry Richards Iain McEwin Stephen Carter Executive Directors: Glenn Fozard Ashley Moore * Other Key Management Personnel: Adam Giles	Short-term benefits Cash salary Consultancy Non- and fees fees monetary $ $ $ 8,562 - - 2,083 - - 55,000 - - 41,246 - - 67,496 12,083 - 241,667 - - 139,100 - -	Short-term benefits Cash salary Consultancy Non- and fees fees monetary $ $ $ 8,562 - - 2,083 - - 55,000 - - 41,246 - - 67,496 12,083 - 241,667 - - 139,100 - -	Short-term benefits Cash salary Consultancy Non- and fees fees monetary $ $ $ 8,562 - - 2,083 - - 55,000 - - 41,246 - - 67,496 12,083 - 241,667 - - 139,100 - -	Post- employment benefits Super- annuation $ 813 - - - 6,360 30,000 23,215	Long-term benefits Leave Benefits $ - - - - - 3,364 -	Share-based payments Equity- settled $ - - - - 22,087 - -	Total $ 9,375 2,083 55,000 41,246 108,026 275,031 162,315
	555,154	12,083	-	60,388	3,364	22,087	653,076

Represents remuneration for the period of the financial year during which the individual held office as director.
** Glenn Fozard's remuneration includes the granting of performance based options, the charge for which is included above for reference, though these options have not yet been issued since performance targets have not yet been satisfied.

*** Ashley Moore’s remuneration package for the year was $250k inclusive of salary and superannuation. Effective March 2015, Mr Moore voluntarily reduced his package by $25k p.a. pending project progression milestones. Further, in July 2014 he cashed-out $30k of outstanding annual leave.

2014 Non-Executive Directors: Stephen Carter Iain McEwin Lloyd Thomson Executive Directors: Glenn Fozard Ashley Moore Other Key Management Personnel: Adam Giles	Short-term benefits Cash salary Consulting Non- and fees fees monetary $ $ $ 87,886 - - 55,263 - - 10,497 - - 58,856 - - 232,225 - - 139,100 - -	Short-term benefits Cash salary Consulting Non- and fees fees monetary $ $ $ 87,886 - - 55,263 - - 10,497 - - 58,856 - - 232,225 - - 139,100 - -	Short-term benefits Cash salary Consulting Non- and fees fees monetary $ $ $ 87,886 - - 55,263 - - 10,497 - - 58,856 - - 232,225 - - 139,100 - -	Post- employment benefits Super- annuation $ - - - 5,444 17,775 12,866	Long-term benefits Leave Benefits $ - - - - - -	Share-based payments Equity- settled $ - - - - - -	Total $ 87,886 55,263 10,497 64,300 250,000 151,966
	583,827	-	-	36,085	-	-	619,912

Environmental Clean Technologies Limited Directors' report 30 June 2015

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The proportion of remuneration linked to performance and the fixed proportion are as follows:

	Fixed
	remuneration	At risk - STI	At risk - LTI
Name	2015	2015	2015
Non-Executive Directors:
David Smith	100%	-%	-%
Barry Richards	100%	-%	-%
Iain McEwin	100%	-%	-%
Stephen Carter	100%	-%	-%
Executive Directors:
Glenn Fozard	80%	6%	14%
Ashley Moore	100%	-%	-%
Other Key Management Personnel:
Adam Giles	100%	-%	-%

Service agreements

The company has employment agreements with all executives. These contracts are capable of termination in accordance with standard employment terms. The terms of the contract are open ended although the company retains the right to terminate a contract immediately by making payment equal to the period in lieu of notice.

Each director has a written agreement governing his service as a director of the company and separate agreements, where appropriate, for the discharge of executive responsibilities or the provision of other services. There are no closed term contracts in place or termination benefits payable to directors or executives.

Name:	Glenn Fozard
Title:	Executive Chairman
Agreement commenced:	5 June 2015
Term of agreement:	Initial term of 6 months which may be extended subject to review
Details:	Executive remuneration consists of a fixed retainer of $5,000 per month until
	November 2015 together with an ‘at risk’ performance based component of unlisted
	share options which will vest based on the achievement of operational deliverables.
	Up to 15m options may be issued with exercise prices between 3 and 5 cents with
	expiry dates between January 2016 and June 2017.
Name:	Ashley Moore
Title:	Managing Director
Agreement commenced:	23 June 2013
Term of agreement:	Ashley Moore's employment may be terminated by either party by providing three
	(employee) or six (company) months written notice of termination.
Details:	Annual salary, including superannuation, of $250,000. This has been voluntarily
	reduced by $25,000 p.a. from March 2015 pending progress on Indian project
	development objectives.

All other contracts are capable of termination in accordance with standard employment terms. The company retains the right to terminate a contract immediately by making payment equal to the period in lieu of notice. KMP have no entitlement to termination payments in the event of removal for misconduct.

Share-based compensation

Issue of shares

There were no shares issued to directors and other KMP as part of compensation during the year ended 30 June 2015.

Environmental Clean Technologies Limited Directors' report 30 June 2015

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Options

The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key management personnel in this financial year or future reporting years are as follows:

				Fair value
				per option
Grant date	No. granted	Expiry date	Exercise price	at grant date
5 June 2015	2,000,000	31 January 2016	$0.030	$0.002
5 June 2015	2,000,000	30 June 2016	$0.035	$0.005
5 June 2015	2,000,000	31 January 2017	$0.040	$0.002
5 June 2015	2,000,000	30 June 2017	$0.045	$0.002
5 June 2015	7,000,000	30 June 2017	$0.050	$0.001

The entitlement and vesting of these options is dependent upon the achievement of operational deliverables as determined by the Board. Issuance will be subject to ratification by shareholders at the next available General Meeting following the performance trigger.

Options granted carry no dividend or voting rights.

Details of options over ordinary shares granted, vested and lapsed for directors and other key management personnel as part of compensation during the year ended 30 June 2015 are set out below:

		Number of	Value of	Value of
		options	options	options
Name	Grant date	granted	granted	vested
			$	$
Glenn Fozard	5 June 2015	15,000,000	22,087		-

The entitlement and vesting of these options is dependent upon the achievement of operational deliverables as determined by the Board. There were no options that lapsed during the period.

Additional information

The earnings of the consolidated entity for the five years to 30 June 2015 are summarised below:

	2015	2014	2013	2012	2011
	$	$	$	$	$
Income	1,691,785	1,644,631	1,314,914	686,266	274,987
EBITDA	(712,630)	(949,154)	(4,938,052)	(4,910,789)	(2,502,282)
EBIT	(2,605,844)	(1,468,697)	(5,477,784)	(5,491,142)	(3,073,761)
Loss after income tax	(3,716,176)	(2,548,113)	(5,444,185)	(5,549,700)	(3,121,709)

The factors that are considered to affect total shareholders return ('TSR') are summarised below:

	2015	2014	2013	2012	2011
Share price at financial year end ($)	0.018	0.002	0.007	0.019	0.010
Basic earnings per share (cents per share)	(0.155)	(0.122)	(0.326)	(0.430)	(0.380)

The company's remuneration policy seeks to reward staff members for their contribution to achieving significant milestones but there is no direct link between remuneration paid and growth in the company's share price or financial performance given that the company is essentially still engaged in a research and development phase of operations.

Additional disclosures relating to key management personnel

In accordance with ASIC Class Order 14/632 which clarifies 'Key management personnel equity instruments disclosures', the following disclosures relates only to equity instruments in the company or its subsidiaries:

Environmental Clean Technologies Limited Directors' report 30 June 2015

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Shareholding

The number of shares in the company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

Ordinary shares Ashley Moore Iain McEwin * Adam Giles	Balance at the start of the year 2,916,668 53,108,581 13,138,609	Received as part of remuneration - - -	Additions - - -	Disposals/ other - (53,108,581) -	Balance at the end of the year 2,916,668 - 13,138,609
	69,163,858	-	-	(53,108,581)	16,055,277

Disposals/other represents the shareholding held at date of resignation

Option holding

The number of options over ordinary shares in the company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

Options over ordinary shares Ashley Moore Iain McEwin * Glenn Fozard Stephen Carter *	Balance at the start of the year - - - -	Issued 79,268,397 162,147,305 50,000,000 50,000,000	Exercised - - - -	Expired/ forfeited/ other - (162,147,305) - (50,000,000)	Balance at the end of the year 79,268,397 - 50,000,000 -
	-	341,415,702	-	(212,147,305)	129,268,397

Negative movements represents the individual's option holding at the time of ceasing to be a KMP of the company.

Options over ordinary shares Ashley Moore	Vested and exercisable 79,268,397	Vested and unexercisable -	Balance at the end of the year 79,268,397
	79,268,397	-	79,268,397

Glenn Fozard acquired 50,000,000 options during the year for consideration of $50,000. The acquisition was financed using funds loaned from the company. The options remain in escrow until the full loan has been repaid pursuant to the terms of the arrangement.

Loans to key management personnel and their related parties

During the period, the company made the following loans to directors or director related entities for the purpose of funding purchases of ESIOA options pursuant to the Prospectus dated 30 June 2014. Options remain in escrow to the extent that there is any principal or interest remaining unpaid on each loan. Interest is payable on the outstanding balance at the rate of 6% p.a. calculated daily. Loans are for 12 months with interest to be paid in arrears and in quarterly instalments. With respect to each director, details are as follows:

(i) Glenn Fozard was advanced $50,000 for the acquisition of 50 million options. Interest incurred during the period was $2,201. Interest repaid during the period was $2,201. Principal of $25,000 was repaid. Loan balance at 30 June 2015 is $25,000.

(ii) Iain McEwin was advanced $50,000 for the acquisition of 50 million options. Interest incurred during the period was $2,201. Interest repaid during the period was $2,201. Principal of $50,000 was repaid. Loan balance at 30 June 2015 is $nil.

(iii) Stephen Carter was advanced $50,000 for the acquisition of 50 million options. Interest incurred during the period was $756. Interest repaid during the period was $756. Principal of $50,000 was repaid. Loan balance at 30 June 2015 is $nil.

All transactions were made on normal commercial terms and conditions and at market rates.

Environmental Clean Technologies Limited Directors' report 30 June 2015

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This concludes the remuneration report, which has been audited.

Shares under option

Unissued ordinary shares of Environmental Clean Technologies Limited under option at the date of this report are as follows:

Exercise Expiry date price Listed ordinary options (ESIOB) * 31 July 2017 $0.015 Listed ordinary options (ESIOA) 31 July 2017 $0.009	Number under option 896,268,416 1,286,172,364
	2,182,440,780

ESIOA : All options were issued pursuant to prospectus dated 30 June 2014 at a price of $0.001
** ESIOB : 724,768,416 options were issued to eligible shareholders for no consideration pursuant to prospectus dated 30 June 2014. 150,000,000 options were issued at $0.0067 as part consideration for the Matmor Asset. 21,500,000 options were issued at an average price of $0.0055 as consideration for various services provided to the company.

No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the company or of any other body corporate.

Shares issued on the exercise of options

There were 110,000,000 ordinary shares of Environmental Clean Technologies Limited issued during the year ended 30 June 2015 and up to the date of this report on the exercise of the same number of ESIOA options with an exercise price of $0.009 each.

There are no amounts owing to the company with respect to the exercise of such options.

Indemnity and insurance of officers

The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith.

During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of liability and the amount of the premium.

Indemnity and insurance of auditor

The company has not, during or since the financial year, indemnified or agreed to indemnify the auditor of the company or any related entity against a liability incurred by the auditor.

During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity.

Proceedings on behalf of the company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.

Non-audit services

There were no non-audit services provided during the financial year by the auditor.

Officers of the company who are former partners of BDO East Coast Partnership

There are no officers of the company who are former partners of BDO East Coast Partnership.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 follows this Directors' report.

Environmental Clean Technologies Limited Directors' report 30 June 2015

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Auditor

BDO East Coast Partnership continues in office in accordance with section 327 of the Corporations Act 2001.

This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.

On behalf of the directors

______Ashley Moore Managing Director

31 August 2015 Melbourne

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Environmental Clean Technologies Limited Contents 30 June 2015 Contents

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Statement of profit or loss and other comprehensive income	21
Statement of financial position	22
Statement of changes in equity	23
Statement of cash flows	24
Notes to the financial statements	25
Directors' declaration	53
Independent auditor's report to the members of Environmental Clean Technologies Limited	54
Shareholder information	56

General information

The financial statements cover Environmental Clean Technologies Limited as a consolidated entity consisting of Environmental Clean Technologies Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Environmental Clean Technologies Limited's functional and presentation currency.

Environmental Clean Technologies Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Suite 502, Level P5 9 Yarra Street South Yarra, VIC, 3141

A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 31 August 2015. The directors have the power to amend and reissue the financial statements.

Environmental Clean Technologies Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2015

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Note Revenue 4 Other income 5 Expenses Corporate costs Legal costs Employee benefits expense 6 Sales and marketing Depreciation and amortisation expense 6 Engineering and pilot plant costs Occupancy expense Travel and accommodation Other expenses Finance costs 6 Loss before income tax expense Income tax expense 7 Loss after income tax expense for the year attributable to the owners of Environmental Clean Technologies Limited 21 Other comprehensive income for the year, net of tax Total comprehensive income for the year attributable to the owners of Environmental Clean Technologies Limited Basic earnings per share 34 Diluted earnings per share 34	Consolidated 2015 2014 $ $ 12,557 12,025 1,679,228 1,632,606 (837,934) (714,800) (142,427) (120,659) (786,138) (819,694) (245,508) (97,437) (1,893,214) (519,543) (172,799) (551,496) (142,261) (160,391) (72,137) (60,271) (5,211) (69,037) (1,110,332) (1,079,416)	Consolidated 2015 2014 $ $ 12,557 12,025 1,679,228 1,632,606 (837,934) (714,800) (142,427) (120,659) (786,138) (819,694) (245,508) (97,437) (1,893,214) (519,543) (172,799) (551,496) (142,261) (160,391) (72,137) (60,271) (5,211) (69,037) (1,110,332) (1,079,416)
	(3,716,176) -	(2,548,113) -
	(3,716,176) -	(2,548,113) -
	(3,716,176)	(2,548,113)
	Cents (0.155) (0.155)	Cents (0.122) (0.122)

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

Environmental Clean Technologies Limited Statement of financial position As at 30 June 2015

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Note Assets Current assets Cash and cash equivalents 8 Trade and other receivables 9 Other 10 Total current assets Non-current assets Investments accounted for using the equity method 11 Property, plant and equipment 12 Intangibles 13 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 14 Borrowings 15 Provisions 16 Other 17 Total current liabilities Non-current liabilities Provisions 18 Total non-current liabilities Total liabilities Net assets Equity Issued capital 19 Reserves 20 Accumulated losses 21 Total equity	Consolidated 2015 2014 $ $ 940,676 215,120 1,169,273 35,849 20,359 46,857	Consolidated 2015 2014 $ $ 940,676 215,120 1,169,273 35,849 20,359 46,857
	2,130,308	297,826
	2 3,702,887 6,720,000	2 52,280 7,200,000
	10,422,889	7,252,282
	12,553,197	7,550,108
	232,530 1,644,656 2,625,401 -	283,441 1,793,333 87,915 173,416
	4,502,587	2,338,105
	869,444	616,183
	869,444	616,183
	5,372,031	2,954,288
	7,181,166	4,595,820
	57,051,403 4,087,394 (53,957,631)	54,837,275 - (50,241,455)
	7,181,166	4,595,820

The above statement of financial position should be read in conjunction with the accompanying notes

Environmental Clean Technologies Limited Statement of changes in equity For the year ended 30 June 2015

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Issued capital $ 52,076,821 - -	Reserves $ - - -	Accumulated losses $ (47,693,342) (2,548,113) -	Total equity $ 4,383,479 (2,548,113) -
- 2,760,454	- -	(2,548,113) -	(2,548,113) 2,760,454
54,837,275	-	(50,241,455)	4,595,820
Issued capital $ 54,837,275 - -	Reserves $ - - -	Accumulated losses $ (50,241,455) (3,716,176) -	Total equity $ 4,595,820 (3,716,176) -
- 2,104,128 - - 110,000	- - 22,087 4,175,307 (110,000)	(3,716,176) - - - -	(3,716,176) 2,104,128 22,087 4,175,307 -
57,051,403	4,087,394	(53,957,631)	7,181,166

The above statement of changes in equity should be read in conjunction with the accompanying notes

Environmental Clean Technologies Limited Statement of cash flows For the year ended 30 June 2015

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Note Cash flows from operating activities Research and development offset and sundry receipts Payments to suppliers and employees (inclusive of GST) Interest received Interest and other finance costs paid Net cash used in operating activities 32 Cash flows from investing activities Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Proceeds from loan repayments Net cash from/(used in) investing activities Cash flows from financing activities Proceeds from issue of shares and options Proceeds from borrowings Repayment of borrowings Prepaid options premiums Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year 8	Consolidated 2015 2014 $ $ 565,244 1,633,027 (2,141,827) (3,051,282)	Consolidated 2015 2014 $ $ 565,244 1,633,027 (2,141,827) (3,051,282)
	(1,576,583) 10,733 (3,837)	(1,418,255) 11,604 (260,384)
	(1,569,687)	(1,667,035)
	(23,080) 417 -	- - 1,402
	(22,663)	1,402
	2,057,036 348,817 (87,947) -	1,500 2,899,000 (1,820,278) 173,416
	2,317,906	1,253,638
	725,556 215,120	(411,995) 627,115
	940,676	215,120

The above statement of cash flows should be read in conjunction with the accompanying notes

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 1. Significant accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

New, revised or amending Accounting Standards and Interpretations adopted

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.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

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 following Accounting Standards and Interpretations are most relevant to the consolidated entity:
AASB 2012-3 Amendments to Australian Accounting Standards - Offsetting Financial Assets and Financial Liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial Assets
AASB 2013-4 Amendments to Australian Accounting Standards - Novation of Derivatives and Continuation of Hedge Accounting
AASB 2013-5 Amendments to Australian Accounting Standards - Investment Entities
AASB 2014-1 Amendments to Australian Accounting Standards (Parts A to C)
Interpretation 21 Levies

Going concern

For the year ended 30 June 2015 the consolidated entity incurred an operating loss after tax of $3,716,176, negative cash flow from operating activities of $1,569,687, and had net current liabilities of $2,372,279.

As the consolidated entity is currently in the process of commercialising its Coldry and Matmor technology, it continues to be reliant upon the availability of various funding, including the research and development rebate, as well as debt and equity capital injections for its liquidity needs in meeting operating costs. These conditions indicate a material uncertainty that may cast significant doubt on the entity's ability to continue as a going concern.

It is anticipated that ongoing operations will be funded through a combination of cash at bank, available unused debt facilities of $994,344, share issues, partner equity funding, and further exercise of ESIOA and ESIOB options that have an exercise price of $0.009 and $0.015 respectively which compares well to the current share price and noting also that 110m ESIOA options have already been exercised during the financial year.

It should also be noted that the company's current liabilities consist of debt that is not expected to become repayable within 12 months of balance date, notwithstanding that Australian Accounting Standards require that such debt be classified as current liabilities.

The directors are therefore comfortable that the consolidated entity is well positioned to continue its pursuit of developing and commercialising its technology.

The financial statements have therefore been prepared on the basis that the consolidated entity is a going concern, which contemplates the continuity of normal business activity, and the realisation of assets and settlement of liabilities in the normal course of business.

Should the consolidated entity be unable to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the normal course of business and at amounts that differ from those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset carrying amounts or to the amounts of liabilities that might result should the consolidated entity be unable to continue as a going concern and meet its debts as and when they fall due.

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 1. Significant accounting policies (continued)

Historical cost convention

The financial statements have been prepared under the historical cost convention.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2.

Parent entity information

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 29.

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Environmental Clean Technologies Limited ('company' or 'parent entity') as at 30 June 2015 and the results of all subsidiaries for the year then ended. Environmental Clean Technologies Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.

Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.

Operating segments

Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

Revenue recognition

Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.

Research and development tax refund

The consolidated entity has adopted the income approach to accounting for research and development tax offsets pursuant to AASB 120 'Accounting for Government Grant and Disclosure of Government Assistance' whereby the incentive is recognised in profit or loss on a systematic basis over the periods in which the consolidated entity recognises the eligible expenses. Prior year comparative figures have been adjusted to conform to changes in presentation for the current financial year. Further, the consolidated entity has elected to now show these refunds as 'Other Income' as opposed to prior years being shown as 'Revenue'.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 1. Significant accounting policies (continued)

Interest

Interest 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.

Other revenue

Other revenue is recognised when it is received or when the right to receive payment is established.

Research and development expenditure

Expenditure in respect of research and development is charged to profit or loss as incurred. An intangible asset arising from development expenditure on an internal project is recognised only when the consolidated entity can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development.

Income tax

The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:

When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset.

Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.

Environmental Clean Technologies Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'stand-alone taxpayer' approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated group.

In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated group.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 1. Significant accounting policies (continued)

Current and non-current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.

An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.

A liability is classified as current when: it is either expected to be settled in the entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities are always classified as non-current.

Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Trade and other receivables

Other receivables are recognised at amortised cost, less any provision for impairment.

Associates

Associates are entities over which the consolidated entity has significant influence but not control or joint control. Investments in associates are accounted for using the equity method. Under the equity method, the share of the profits or losses of the associate is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive income. Investments in associates are carried in the statement of financial position at cost plus postacquisition changes in the consolidated entity's share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment. Dividends received or receivable from associates reduce the carrying amount of the investment.

When the consolidated entity's share of losses in an associate equals or exceeds its interest in the associate, including any unsecured long-term receivables, the consolidated entity does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

The consolidated entity discontinues the use of the equity method upon the loss of significant influence over the associate and recognises any retained investment at its fair value. Any difference between the associate's carrying amount, fair value of the retained investment and proceeds from disposal is recognised in profit or loss.

Investments and other financial assets

Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. They are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on the purpose of the acquisition and subsequent reclassification to other categories is restricted.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are carried at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the asset is derecognised or impaired.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 1. Significant accounting policies (continued)

Impairment of financial assets

The consolidated entity assesses at the end of each reporting period whether there is any objective evidence that a financial asset or group of financial assets is impaired. Objective evidence includes significant financial difficulty of the issuer or obligor; a breach of contract such as default or delinquency in payments; the lender granting to a borrower concessions due to economic or legal reasons that the lender would not otherwise do; it becomes probable that the borrower will enter bankruptcy or other financial reorganisation; the disappearance of an active market for the financial asset; or observable data indicating that there is a measurable decrease in estimated future cash flows.

The amount of the impairment allowance for loans and receivables carried at amortised cost is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. If there is a reversal of impairment, the reversal cannot exceed the amortised cost that would have been recognised had the impairment not been made and is reversed to profit or loss.

Property, plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment over their expected useful lives as follows:

Matmor test plant and equipment	2 years
Plant and equipment	15 years
Furniture and fittings	10 years
Office equipment	3 years

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.

Leases

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to the ownership of leased assets, and operating leases, under which the lessor effectively retains substantially all such risks and benefits.

Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if lower, the present value of minimum lease payments. Lease payments are allocated between the principal component of the lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the liability.

Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the asset's useful life and the lease term if there is no reasonable certainty that the consolidated entity will obtain ownership at the end of the lease term.

Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line basis over the term of the lease.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 1. Significant accounting policies (continued)

Intangible assets

Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period.

Intellectual property

Significant costs associated with intellectual property are deferred and amortised on a straight-line basis over the period of their expected benefit, being their finite useful life of 20 years.

Impairment of non-financial assets

Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.

Trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method. Bonds issued represent debt as they are convertible into a variable number of ordinary shares of the company. The difference between the fair value of equity issued and the carrying value of the bonds at the time of conversion represents a financing cost that is recognised in the income statement.

Finance costs

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred, including interest on short-term and long-term borrowings.

Provisions

Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.

Employee benefits

Short-term employee benefits

Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 1. Significant accounting policies (continued)

Other long-term employee benefits

The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Issued capital

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.

Business combinations

The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other assets are acquired.

The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.

On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.

Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in profit or loss.

Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.

The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 1. Significant accounting policies (continued)

Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.

Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of Environmental Clean Technologies Limited, 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 financial year.

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.

Goods and Services Tax ('GST') and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

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

New Accounting Standards and Interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2015. The consolidated entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below.

AASB 9 Financial Instruments

This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all previous versions of AASB 9 and completes the project to replace IAS 39 ‘Financial Instruments: Recognition and Measurement’. AASB 9 introduces new classification and measurement models for financial assets. New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements will use an ‘expected credit loss’ (‘ECL’) model to recognise an allowance. The consolidated entity will adopt this standard from 1 July 2018 but the impact of its adoption is yet to be assessed.

AASB 15 Revenue from Contracts with Customers

This standard is currently applicable to annual reporting periods beginning on or after 1 January 2017. Exposure Draft (ED 263) 'Effective Date of AASB 15' proposes to defer the application date by one year to 1 January 2018. The standard provides a single standard for revenue recognition. The core principle of the standard is that an entity will recognise 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). The consolidated entity will adopt this standard from 1 July 2017 (or 1 July 2018 where ED 263 is passed) but the impact of its adoption is yet to be assessed.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 1. Significant accounting policies (continued)

Other amending accounting standards issued are not considered to have a significant impact on the financial statements of the consolidated entity as their amendments provide either clarification of existing accounting treatment or editorial amendments.

Note 2. Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.

Estimation of useful lives of assets

The consolidated entity estimates the effective life of patents and intellectual property to be 20 years and amortises these assets on a straight-line basis. Where the resulting effective life differs from that recognised, the impact will be recorded in profit or loss in the period such determinations are made.

Impairment of non-financial assets

The consolidated entity assesses impairment of non-financial assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.

Income tax

The consolidated entity is subject to income taxes in Australia. The consolidated entity estimates its tax liabilities based on the understanding of the tax laws and advice from tax experts. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period such determinations are made.

In addition, the consolidated entity has recognised deferred tax assets relating to carried forward tax losses to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same subsidiary against which the unused tax losses can be utilised.

Earn-out provision

The earn-out provision is recognised and measured at the present value of the estimated future cash flows to be made in respect of the reporting date using a discount rate of 41.5%. In determining the present value of the liability, estimates of expected timing and quantities of production are taken into consideration.

Deferred consideration - Matmor

The deferred consideration liability has been calculated based on discounted cash flow projections out to April 2017 and using a discount rate of 41.5%. The projections include consideration of the timing of exercise of ESIOA and ESIOB options and other events, as disclosed at Note 16, that would trigger a cash outflow pursuant to the deferred consideration structure. At each reporting date, the deferred consideration liability is reassessed against revised estimates and any increase or decrease in the net present value of the liability will result in a corresponding gain or loss to profit or loss. The increase in the liability resulting from the passage of time is recognised as a finance cost.

Research and development tax offset

The consolidated entity adopts the income approach to accounting for the research and development tax offset pursuant to AASB 120 'Accounting for Government Grants and Disclosure of Government Assistance'. The directors have concluded that the consolidated entity has developed sufficient systems and knowledge to allow reasonable assurance to be obtained with respect to the measurement and recognition of tax rebates receivable at the time of incurring eligible expenses. In the comparative year, the consolidated entity recognised the tax rebate only when received as the directors could not gain sufficient certainty and assurance in respect to the rebate receivable having regard to the complexity of the regulations, systems and processes required to establish control over the tax benefit.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 3. Operating segments

Identification of reportable operating segments

The consolidated entity's operating segment is based on the internal reports that are reviewed and used by the Board of Directors (being the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. The consolidated entity operates predominantly in the environmental and energy industry, and a single geographic segment being Australia.

The CODM reviews operating performance of the consolidated entity based on management reports that are prepared. At regular intervals, the CODM is provided management information at a consolidated entity level for the consolidated entity’s cash position, the carrying values of intangible assets and a consolidated entity cash forecast for the next 12 months of operation. On this basis, no segment information is included in these financial statements.

Note 4. Revenue

Interest Other revenue Revenue Note 5. Other income	Consolidated 2015 2014 $ $ 12,178 11,604 379 421	Consolidated 2015 2014 $ $ 12,178 11,604 379 421
	12,557	12,025

Research and development tax incentive	Consolidated 2015 2014 $ $ 1,679,228 1,632,606

During the year, the company changed its judgement as to when reasonable assurance over receipt of the incentive was deemed to exist. This has led to the company recognising a receivable related to the research and development tax incentive of $1,114,362 at 30 June 2015 which relates to current year eligible expenditure. The incentive income recognised for 2015 also includes a cash receipt of $564,866 related to eligible R&D activity of the 2014 year. Refer to Note 2 for further details.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 6. Expenses

Loss before income tax includes the following specific expenses: Depreciation Plant and equipment Fixtures and fittings Office equipment Total depreciation Amortisation Intellectual property - Coldry Total depreciation and amortisation Finance costs Interest and finance charges paid/payable Fast Finance interest and facility cost Arup Bond finance costs Unwind of discount on deferred consideration (Matmor) Unwind of earn-out provision (Coldry) Finance costs expensed Rental expense relating to operating leases Minimum lease payments Employee benefits expense Defined contribution superannuation expense Share-based payments expense Other employee benefits Total employee benefits expense	Consolidated 2015 2014 $ $ 1,411,350 34,451 374 835 1,490 4,257	Consolidated 2015 2014 $ $ 1,411,350 34,451 374 835 1,490 4,257
	1,413,214	39,543
	480,000	480,000
	1,893,214	519,543
	5,541 204,205 501,562 154,117 244,907	21,338 327,935 557,064 - 173,079
	1,110,332	1,079,416
	52,498	50,169
	89,243 22,087 674,808	68,491 - 751,204
	786,138	819,695

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 7. Income tax expense

Income tax expense Deferred tax assets attributable to temporary differences Deferred tax assets attributable to carried forward tax losses Deferred tax assets attributable to movement for prior periods Total deferred tax assets not recognised Aggregate income tax expense Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense Tax at the statutory tax rate of 30% Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Finance cost Research and development Options issued Sundry items Current year tax losses not recognised Current year temporary differences not recognised Adjustment recognised for prior periods Deferred tax movement not recognised Income tax expense Tax losses not recognised Unused tax losses for which no deferred tax asset has been recognised Potential tax benefit @ 30%	Consolidated 2015 2014 $ $ 27,655 (5,420) (399,445) (925,916) 367,133 975,534 4,657 (44,198)	Consolidated 2015 2014 $ $ 27,655 (5,420) (399,445) (925,916) 367,133 975,534 4,657 (44,198)
	-	-
	(3,716,176)	(2,548,113)
	(1,114,853) 142,906 239,140 41,951 1,175	(764,434) 167,119 (489,782) - 667
	(689,681) 399,445 (27,655) (367,133) 685,024	(1,086,430) 925,916 5,420 (975,534) 1,130,628
	-	-
	Consolidated 2015 2014 $ $ 18,553,070 18,445,363
	5,565,921	5,533,609

The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test is passed.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 7. Income tax expense (continued)

Deferred tax assets not recognised Deferred tax assets not recognised comprises temporary differences attributable to: Employee benefits Accrued expenses Plant and equipment Finance costs Intangible assets Provision for earn-out (Coldry) Matmor liability Total deferred tax assets not recognised	Consolidated 2015 2014 $ $ 29,174 34,188 3,341 12,179 408,096 422,785 117,175 100,306 364,767 222,518 250,513 177,042 (231,702) -	Consolidated 2015 2014 $ $ 29,174 34,188 3,341 12,179 408,096 422,785 117,175 100,306 364,767 222,518 250,513 177,042 (231,702) -
	941,364	969,018

The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been recognised in the statement of financial position as the recovery of this benefit is uncertain.

Note 8. Current assets - cash and cash equivalents

Cash at bank Note 9. Current assets - trade and other receivables Other receivables Research and development tax incentive receivable Loan – Coldry East Kalimantan Director Loan - Glenn Fozard	Consolidated 2015 2014 $ $ 940,676 215,120	Consolidated 2015 2014 $ $ 940,676 215,120
	Consolidated 2015 2014 $ $ 29,911 20,196 1,114,362 -
	1,144,273	20,196
	- 25,000	15,653 -
	1,169,273	35,849

Note 9. Current assets - trade and other receivables

Note 10. Current assets - other

Prepayments Other deposits

Consolidated 2015 2014 $ $ 555 33,711 19,804 13,146	Consolidated 2015 2014 $ $ 555 33,711 19,804 13,146
20,359	46,857

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 11. Non-current assets - investments accounted for using the equity method

Victoria Coldry Pty Ltd - 50% interest Coldry East Kalimantan Pty Ltd - 50% interest Note 12. Non-current assets - property, plant and equipment Plant and equipment - at cost Less: Accumulated depreciation Fixtures and fittings - at cost Less: Accumulated depreciation Office equipment - at cost Less: Accumulated depreciation	Consolidated 2015 2014 $ $ 1 1 1 1	Consolidated 2015 2014 $ $ 1 1 1 1
	2	2
	Consolidated 2015 2014 $ $ 5,712,837 652,405 (2,016,137) (604,787)
	3,696,700	47,618
	9,619 (4,679)	5,971 (4,305)
	4,940	1,666
	50,989 (49,742)	53,715 (50,719)
	1,247	2,996
	3,702,887	52,280

Note 12. Non-current assets - property, plant and equipment

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Consolidated Balance at 1 July 2013 Write off of assets Depreciation expense Balance at 30 June 2014 Additions Disposals Depreciation expense Balance at 30 June 2015	Plant and equipment * $ 110,574 (28,505) (34,451)	Fixtures and fittings $ 2,501 - (835)	Office equipment $ 7,253 - (4,257)	Total $ 120,328 (28,505) (39,543)
	47,618 5,060,432 - (1,411,350)	1,666 3,648 - (374)	2,996 - (259) (1,490)	52,280 5,064,080 (259) (1,413,214)
	3,696,700	4,940	1,247	3,702,887

Matmor plant and equipment amounting to $5,041,000 was acquired on 4 December 2014. It is anticipated that such assets will be consumed during the process of developing the Matmor technology within 2 years from the date of acquisition.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 13. Non-current assets - intangibles

Intellectual property - at cost Less: Accumulated amortisation	Consolidated 2015 2014 $ $ 9,600,000 9,600,000 (2,880,000) (2,400,000)	Consolidated 2015 2014 $ $ 9,600,000 9,600,000 (2,880,000) (2,400,000)
	6,720,000	7,200,000

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Consolidated Balance at 1 July 2013 Amortisation expense Balance at 30 June 2014 Amortisation expense Balance at 30 June 2015	Intellectual property * $ 7,680,000 (480,000)	Total $ 7,680,000 (480,000)
	7,200,000 (480,000)	7,200,000 (480,000)
	6,720,000	6,720,000

The intellectual property represents the patented technology related to Coldry acquired by the consolidated entity in 2009.

Note 14. Current liabilities - trade and other payables

Trade payables Other payables	Consolidated 2015 2014 $ $ 84,113 90,209 148,417 193,232	Consolidated 2015 2014 $ $ 84,113 90,209 148,417 193,232
	232,530	283,441

Refer to note 23 for further information on financial instruments.

Note 15. Current liabilities - borrowings

Fast Finance Loan Arup Bond

Consolidated 2015 2014 $ $ 1,644,656 1,155,555 - 637,778	Consolidated 2015 2014 $ $ 1,644,656 1,155,555 - 637,778
1,644,656	1,793,333

Refer to note 23 for further information on financial instruments.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 15. Current liabilities - borrowings (continued)

Fast Finance Loan

The Fast Finance loans were renewed during the year for 12 months and expire on 31 October 2015. They are repayable in cash from the R&D tax rebate refund with an interest rate of 15% p.a. The loans are secured by first ranking charge and irrevocable pledge over all amounts of R&D tax rebate received from the Australian Tax Office. The renewal represents an extension of the previous $1.439m facility to $2.639m including interest and fees. The $1.2m extension is to be drawn in tranches of $0.3m with one tranche of $0.3m drawn during the year, leaving $0.9m available. The company is not compelled to draw the full $1.2m. A total of 9.75m ESIOB options are also issued to the lender on each $0.3m tranche drawdown. The loan may be repaid either in cash or by way of shares issued at 2 cents each at the lender's discretion. Should the VWAP of the ESI share price fall below 0.6¢ per share for 10 consecutive days, the conversion price shall become the lower of 2.0¢, or a 5% discount to the lowest daily VWAP for the prior 10 trading days.

Arup Bond

The Arup Bond was a three party arrangement between the company, Arup Pty Ltd ('Arup'), and a broking house, and has, since 30 June 2014, been concluded (August 2014). The company issued the bond to Arup, who assigned it to the broking house upon settlement of Arup invoices on behalf of the company. Under the terms of the bond, the broking house provided a guarantee to Arup with respect to payments for Arup services provided to the company, and provided such guarantee through assignments of the bond from Arup. The bond converted to shares in the company issued at a 10% discount to the lowest daily volume-weighted-average-price of the last 5 trading days. There was no interest charge associated with the bond.

Financing arrangements

Unrestricted access was available at the reporting date to the following lines of credit:

Total facilities Fast Finance Loan Used at the reporting date Fast Finance Loan Unused at the reporting date Fast Finance Loan	Consolidated 2015 2014 $ $ 2,639,000 1,439,000	Consolidated 2015 2014 $ $ 2,639,000 1,439,000
	1,644,656	1,155,555
	994,344	283,445

Note 16. Current liabilities - provisions

Annual leave Deferred Consideration - Matmor

Consolidated 2015 2014 $ $ 62,846 87,915 2,562,555 -	Consolidated 2015 2014 $ $ 62,846 87,915 2,562,555 -
2,625,401	87,915

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 16. Current liabilities - provisions (continued)

Deferred consideration - Matmor Assets

As part consideration for the acquisition of the Matmor asset, deferred consideration of $3.5m cash was incurred. The timing of paying consideration up to the cash amount of $3.5m to Matmor Steel is dependent upon if, and when, ESIOA and ESIOB series options ('ESI options') of the company are exercised and meeting various milestones. The consideration will become payable through combination of any of the following triggers, and at the amounts attributed to each trigger, until the liability has been satisfied:

(a) 50% of proceeds received by ECT from exercise of ESI Options up to the cash amount of $1m
(b) a minimum of 15% of proceeds received by ECT from exercise of ESI Options thereafter
(c) $500,000 on signing of a binding contract for construction of Matmor Pilot Plant
(d) $500,000 on the Matmor Pilot Plant operations achieving an agreed steady state and conversion targets
(e) $1,000,000 on signing of a binding contract for construction of a commercial scale Matmor plant
(f) First collection of revenue in any form from commercialisation of Matmor technology

In measuring the present value of the liability, management have estimated when options will likely be exercised and when milestones will likely be achieved. A discount rate of 41.5% has been applied to derive a present value.

Movements in provisions

Movements in the Deferred consideration - Matmor provision during the current financial year are set out below:

Consolidated - 2015 Carrying amount at the start of the year Initial recognition of deferred consideration provision Unwinding of discount* Carrying amount at the end of the year	Deferred Consideration Matmor $ - 2,408,438 154,117
	2,562,555

The unwind of the discount is classified as a finance cost.

Note 17. Current liabilities - other

Other current liabilities	Consolidated 2015 2014 $ $ - 173,416

Other current liabilities is represented by premiums received for options not yet allocated.

Note 18. Non-current liabilities - provisions

Long service leave Earn-out provision	Consolidated 2015 2014 $ $ 34,400 26,046 835,044 590,137	Consolidated 2015 2014 $ $ 34,400 26,046 835,044 590,137
	869,444	616,183

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 18. Non-current liabilities - provisions (continued)

Earn-out provision

The earn-out provision represents deferred consideration related to the acquisition of the Coldry intellectual property from the Maddingley Group. The consideration payable is calculated based on 50 cents per projected processed tonne of coal feedstock between 2017 and 2021 and is discounted at a rate of 41.5%. The consideration, payable by 2021, is capped at $3m.

Movements in provisions

Movements in the Earn-out provision during the current financial year are set out below:

Consolidated - 2015 Carrying amount at the start of the year Unwinding of discount * Carrying amount at the end of the year	Earn-out provision $ 590,137 244,907
	835,044

The unwind of the discount is classified as a finance cost.

Note 19. Equity - issued capital

Ordinary shares - fully paid	2015 Shares 2,519,526,361	Consolidated 2014 2015 Shares $ 2,186,700,273 57,051,403	2014 $ 54,837,275

Movements in ordinary share capital

Details Date Balance 1 July 2013 Bond conversion 11 July 2013 Bond conversion 17 July 2013 Issuance of shares 17 July 2013 Bond conversion 22 July 2013 Bond conversion 16 August 2013 Bond conversion 20 August 2013 Bond conversion 21 August 2013 Bond conversion 12 September 2013 Bond conversion 28 October 2013 Issuance of shares 15 January 2014 Bond conversion 26 March 2014 Bond conversion 8 April 2014 Bond conversion 2 June 2014 Balance 30 June 2014 Bond conversion 14 August 2014 Issued on exercise of ESIOA options 28 May 2015 Issued on exercise of ESIOA options 5 June 2015 Issued on exercise of ESIOA options 10 June 2015 Balance 30 June 2015	Shares Issued 1,824,318,131 13,888,889 21,681,186 3,000,000 21,681,186 24,554,967 47,470,000 51,209,267 62,500,000 42,247,571 75,000 18,518,519 37,037,038 18,518,519	$ 52,076,821 111,111 173,449 24,000 195,132 171,885 427,230 410,178 625,000 380,228 1,500 37,037 148,148 55,556
	2,186,700,273 222,826,088 54,457,591 49,444,444 6,097,965	54,837,275 1,114,130 544,576 494,444 60,978
	2,519,526,361	57,051,403

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 19. Equity - issued capital (continued)

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Options exercised

The amounts attributable to shares issued pursuant to exercise of options consists of the price paid on exercise of the option and the amount raised on initial issuance of the option, the latter of which has been transferred from the relevant option reserve.

Share buy-back

There is no current on-market share buy-back.

Capital risk management

The consolidated entity's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The consolidated entity monitors capital by reference to cash flow forecasts in relation the operating revenue and expenditure. The consolidated entity also monitors its capital expenditure requirements to identify any additional capital required.

The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current parent entity's share price at the time of the investment. The consolidated entity is not actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.

The consolidated entity is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the financial year.

Note 20. Equity - reserves

Share-based payments reserve Options reserve	Consolidated 2015 2014 $ $ 22,087 - 4,065,307 -	Consolidated 2015 2014 $ $ 22,087 - 4,065,307 -
	4,087,394	-

Share-based payments reserve

The reserve is used to recognise the value of unvested equity benefits provided to employees and directors as part of their remuneration.

Options reserve

This reserve is used to recognise the subscription premium received on issue of options and the value of options issued as consideration for certain services received.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 20. Equity - reserves (continued)

Movements in reserves

Movements in each class of reserve during the current and previous financial year are set out below:

Consolidated Balance at 1 July 2013 Balance at 30 June 2014 ESIOA Options issued pursuant to prospectus ESIOB Options issued pursuant to acquisition of Matmor ESIOB Options issued as Fast Finance interest settlement ESIOB Options issued as payment for Strategic Review Exercise of ESIOA options Director's remuneration Balance at 30 June 2015	Share Based Payments $ -	ESIOA* Options $ -	ESIOB** Options $ -	Total $ -
	- - - - - - 22,087	- 1,396,140 - - - (110,000) -	- - 2,632,560 39,000 107,607 - -	- 1,396,140 2,632,560 39,000 107,607 (110,000) 22,087
	22,087	1,286,140	2,779,167	4,087,394

ESIOA options have an exercise price of 0.9 cents and expire on 31 July 2017. 1,396,172,364 ESIOA options were issued at a price of 0.1 cent each during the year.
** ESIOB options have an exercise price of 1.5 cents and expire on 31 July 2017. 150,000,000 ESIOB options were issued at a price of 0.66 cents each during the year. 724,768,416 ESIOB options were issued for nil consideration to eligible holders of ESI. 11,750,000 ESIOB options were issued as payment for the Strategic Review activity. 9,750,000 ESIOB options were issued under the Interest Terms of the Fast Finance Extension.

Note 21. Equity - accumulated losses

Accumulated losses at the beginning of the financial year Loss after income tax expense for the year Accumulated losses at the end of the financial year	Consolidated 2015 2014 $ $ (50,241,455) (47,693,342) (3,716,176) (2,548,113)	Consolidated 2015 2014 $ $ (50,241,455) (47,693,342) (3,716,176) (2,548,113)
	(53,957,631)	(50,241,455)

Note 22. Equity - dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Note 23. Financial instruments

Financial risk management objectives

The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk.

Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the consolidated entity's operating units. Finance reports to the Board on a regular basis.

Market risk

Foreign currency risk

The majority of the consolidated entity's operations are within Australia with a newly setup subsidiary in India. The Indian subsidiary does not currently expose the consolidated entity to any significant foreign exchange risk.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 23. Financial instruments (continued)

Price risk

The consolidated entity is not exposed to any significant price risk.

Interest rate risk

The consolidated entity has minimal exposure to interest rate risk.

Fluctuations in interest rates will not have any material risk exposure to the cash held in bank deposits at variable rates.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as exposures to customers, including outstanding receivables. For banks and financial institutions, only major Australian banking institutions are used. For customers, individual risk limits are set based on internal or external ratings in accordance with limits set by the Board. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements. The consolidated entity does not currently have any material credit risk exposure to any single debtor or group of debtors.

Liquidity risk

Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.

The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities. The consolidated entity aims at maintaining flexibility in funding by keeping committed funding options available to meet the consolidated entity’s needs.

Financing arrangements

Unused borrowing facilities at the reporting date:

Fast Finance Loan	Consolidated 2015 2014 $ $ 994,344 283,445

The Fast Finance loans were renewed during the period for 12 months and expire on 31 October 2015. Refer to Note 15 for further details.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 23. Financial instruments (continued)

Remaining contractual maturities

The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.

1 year or less $ 84,113 148,417 - 3,500,000 1,644,656	Between 1 and 2 years $ - - 100,000 - -	Between 2 and 5 years $ - - 2,500,000 - -	Over 5 years $ - - 400,000 - -	Remaining contractual maturities $ 84,113 148,417 3,000,000 3,500,000 1,644,656
5,377,186	100,000	2,500,000	400,000	8,377,186
1 year or less $ 90,209 193,232 637,778 - 1,200,000	Between 1 and 2 years $ - - - - -	Between 2 and 5 years $ - - - 1,600,000 -	Over 5 years $ - - - 1,400,000 -	Remaining contractual maturities $ 90,209 193,232 637,778 3,000,000 1,200,000
2,121,219	-	1,600,000	1,400,000	5,121,219

The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.

Cash flows related to settlement of the earn-out provision are based on timing of forecast production output upon which payment is calculated. Settlement of the Matmor deferred consideration will be in stages and is dependent upon the exercise of ESI options by option-holders and/or other significant commercial outcomes. It is unlikely that this will be settled within 12 months although it is contractually feasible.

Fair value of financial instruments

The fair value of financial assets and financial liabilities must be estimated for recognition, measurement and disclosure purposes. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the consolidated entity for similar financial instruments.

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 24. Key management personnel disclosures

Compensation

The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below:

Short-term employee benefits Post-employment benefits Long-term benefits Share-based payments	Consolidated 2015 2014 $ $ 567,237 583,827 60,388 36,085 3,364 - 22,087 -	Consolidated 2015 2014 $ $ 567,237 583,827 60,388 36,085 3,364 - 22,087 -
	653,076	619,912

Note 25. Remuneration of auditors

During the financial year the following fees were paid or payable for services provided by BDO East Coast Partnership, the auditor of the company:

Audit services - BDO East Coast Partnership Audit or review of the financial statements	Consolidated 2015 2014 $ $ 46,500 45,000

Note 26. Contingent liabilities

Perpetual Royalty Liability

In addition to the Matmor deferred consideration liability recognised, the consolidated entity has incurred a future obligation to remit a perpetual royalty to Matmor Steel, the originator of the Matmor technology, at an amount calculated at 3% of licensing income received by the consolidated entity after allowing for deductions. Given the uncertainties and risks associated with developing new technologies and the current stage of development of the technology, the liability value is presently immaterial and has not been recognised.

Other

In 2014, contingent liabilities were reported upon as part of the legal agreements in place with respect to the Coldry Pilot Plant and related upgrades, and the Matmor technology agreement. Those arrangements have been terminated following the formal acquisition of the Matmor assets and intellectual property on 4 December 2014.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 27. Commitments

Lease commitments - operating Committed at the reporting date but not recognised as liabilities, payable: Within one year One to five years Patent commitments Committed at the reporting date but not recognised as liabilities, payable: Within one year One to five years More than five years	Consolidated 2015 2014 $ $ 36,318 52,000 37,771 -	Consolidated 2015 2014 $ $ 36,318 52,000 37,771 -
	74,089	52,000
	23,899 91,800 88,000	19,000 - -
	203,699	19,000

Operating lease commitments includes contracted amounts for offices under non-cancellable operating leases expiring in 2 years with an option to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.

Patent commitments represent maintenance payments pursuant to the registered patents of both Coldry and Matmor.

Note 28. Related party transactions

Parent entity

Environmental Clean Technologies Limited is the parent entity.

Subsidiaries

Interests in subsidiaries are set out in note 30.

Key management personnel

Disclosures relating to key management personnel are set out in note 24 and the remuneration report in the directors' report.

Transactions with related parties

There were no transactions with related parties during the current and previous financial year other than the loans as detailed below.

Receivable from and payable to related parties

There were no trade receivables from or trade payables to related parties at the current and previous reporting date.

Loans to/from related parties

The following balances are outstanding at the reporting date in relation to loans with related parties:

	Consolidated	Consolidated
	2015	2014
	$	$
Current receivables:
Director loan - Glenn Fozard	25,000		-

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 28. Related party transactions (continued)

During the period, the company made the following loans to directors or director related entities for the purpose of funding purchases of ESIOA options pursuant to Prospectus dated 30 June 2014. Each option has an issue price of 0.1 cents and is exercisable on or before 30 July 2017. Options remain in escrow to the extent that there is any principal or interest remaining unpaid on each loan. Interest is payable on the outstanding balance at the rate of 6% p.a. calculated daily. Loans are for 12 months with interest to be paid in arrears and in quarterly instalments. With respect to each director, details are as follows:

(i) Glenn Fozard was advanced $50,000 for the acquisition of 50 million options. Interest incurred during the period was $2,483. Interest repaid during the period was $2,483. Principal of $25,000 was repaid. Loan balance at 30 June 2015 is $25,000.

(ii) Iain McEwin was advanced $50,000 for the acquisition of 50 million options. Interest incurred during the period was $2,323. Interest repaid during the period was $2,323. Principal of $50,000 was repaid on his resignation. Loan balance at 30 June 2015 is $nil.

Terms and conditions

All transactions were made on normal commercial terms and conditions and at market rates.

Note 29. Parent entity information

Set out below is the supplementary information about the parent entity.

Statement of profit or loss and other comprehensive income

Loss after income tax Total comprehensive income Statement of financial position Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Share-based payments reserve Options reserve Accumulated losses Total equity	Parent 2015 2014 $ $ (3,236,174) (2,068,114)	Parent 2015 2014 $ $ (3,236,174) (2,068,114)
	(3,236,174)	(2,068,114)
	Parent 2015 2014 $ $ 2,130,309 297,826
	15,433,197	9,950,107
	4,502,587	2,338,107
	5,372,031	2,954,290
	60,343,330 22,087 4,065,307 (54,369,558)	58,129,200 - - (51,133,383)
	10,061,166	6,995,817

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 29. Parent entity information (continued)

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2015 and 30 June 2014.

Contingent liabilities

The parent entity had no contingent liabilities as at 30 June 2015 and 30 June 2014.

Capital and other commitments

The parent entity has operating lease and patent commitments payable (not recognised as liabilities) as follows:

Committed at the reporting date but not recognised as liabilities, payable: Operating Leases (within one year) Operating Leases (one to five years) Patents (within one year) Patents (one to five years) Patents (more than five years)	Parent 2015 2014 $ $ 36,318 52,000	Parent 2015 2014 $ $ 36,318 52,000
	37,771	-
	23,899	19,000
	91,800	-
	88,000	-

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except for the following:

Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries and income from associates are recognised as other income by the parent entity and its receipt may be an indicator of an impairment of the investment.

Note 30. Interests in subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1:

		Ownership	interest
	Principal place of business /	2015	2014
Name	Country of incorporation	%	%
Asia Pacific Coal and Steel Pty Limited	Australia	100.00%	100.00%
Enermode Pty Limited	Australia	100.00%	100.00%
Maddingley Coldry Unit Trust	Australia	100.00%	100.00%
ECT Coldry Pty Ltd	Australia	100.00%	100.00%
A.C.N. 109 941 175 Pty Limited	Australia	100.00%	100.00%
ECT Fuels Pty Limited	Australia	100.00%	100.00%
ECT China Limited	Hong Kong	100.00%	100.00%
Coldry Demonstration Plant Pty Limited	Australia	100.00%	100.00%
Coldry Master License Pty Limited	Australia	100.00%	100.00%
Environmental Clean Technologies Development and	India
Services India Private Limited		100.00%	-%

Note 31. Events after the reporting period

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 32. Reconciliation of loss after income tax to net cash used in operating activities

Loss after income tax expense for the year Adjustments for: Depreciation and amortisation Write off of non-current assets Unwinding of the discount on provisions Finance cost on convertible notes Share-based payments Accrued interest charges (Fast Finance) Change in operating assets and liabilities: Decrease/(increase) in trade and other receivables Decrease in prepayments Decrease in trade and other payables Increase/(decrease) in other provisions Net cash used in operating activities Note 33. Non-cash investing and financing activities Shares issued on conversion of Arup Bond Deferred consideration included in cost of Matmor assets Note 34. Earnings per share Loss after income tax attributable to the owners of Environmental Clean Technologies Limited Weighted average number of ordinary shares used in calculating basic earnings per share Weighted average number of ordinary shares used in calculating diluted earnings per share Basic earnings per share Diluted earnings per share	Consolidated 2015 2014 $ $ (3,716,176) (2,548,113) 1,893,214 519,543 - 28,505 399,024 173,079 484,977 557,064 351,340 73,000 176,481 88,889 (1,124,077) 112,977 33,156 52,376 (50,911) (760,984) (16,715) 36,629	Consolidated 2015 2014 $ $ (3,716,176) (2,548,113) 1,893,214 519,543 - 28,505 399,024 173,079 484,977 557,064 351,340 73,000 176,481 88,889 (1,124,077) 112,977 33,156 52,376 (50,911) (760,984) (16,715) 36,629
	(1,569,687)	(1,667,035)
	Consolidated 2015 2014 $ $ - 2,734,953 2,408,440 -
	2,408,440	2,734,953
	Consolidated 2015 2014 $ $ (3,716,176) (2,548,113)
	Number 2,392,173,748	Number 2,082,472,758
	2,392,173,748	2,082,472,758
	Cents (0.155) (0.155)	Cents (0.122) (0.122)

At 30 June 2015, there were 2,182,440,780 options on issue. These options were considered anti-dilutive and excluded from the calculation above.

Environmental Clean Technologies Limited Notes to the financial statements 30 June 2015

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Note 35. Share-based payments

The following share-based payments were made during the year:

(a) Options issued to Platinum Road

11,750,000 ESIOB options were issued as payment for the Strategic Review of the company's operations as announced by the company on 5 May 2015. Such options vested and are exercisable on issue. The fair value of such options, based on their market value at the time of issue of $0.005 on 8 May 2015 and $0.009 on 30 June 2015, amounted to $78,750.

(b) Options issued to Fast Finance

9,750,000 ESIOB options were issued under the Interest Terms of the Fast Finance Extension as announced by the company on 5 May 2015. Such options vested and are exercisable on issue. The fair value of such options, based on their market value at the time of issue of $0.004, amounted to $39,000.

(c) Options granted to Glenn Fozard

Mr Fozard's remuneration includes the granting of performance based options. These are shown in the table below. The remuneration share based payment expense for the period was $22,087 and has been recognised within the share-based payments reserve.

Set out below are summaries of options granted pursuant to Glenn Fozard's remuneration:

2015

2015
Exercise Grant date Expiry date price 05/06/2015 31/01/2016 $0.030 05/06/2015 30/06/2016 $0.035 05/06/2015 31/01/2017 $0.040 05/06/2015 30/06/2017 $0.045 05/06/2015 30/06/2017 $0.050	Balance at the start of the year - - - - -	No. Granted 2,000,000 2,000,000 2,000,000 2,000,000 7,000,000	Balance at the end of the year 2,000,000 2,000,000 2,000,000 2,000,000 7,000,000
	-	15,000,000	15,000,000

At reporting date, no options had vested with Mr Fozard.

Environmental Clean Technologies Limited Directors' declaration 30 June 2015

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In the directors' opinion:

the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2015 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

The directors have been given the declarations required by section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.

On behalf of the directors

______Ashley Moore Managing Director

31 August 2015 Melbourne

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54#

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55#

Environmental Clean Technologies Limited Shareholder information 30 June 2015

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The shareholder information set out below was applicable as at 24 August 2015.

Distribution of equitable securities

Analysis of number of equitable security holders by size of holding:

Number of ordinary share holders 171 151 123 1,566 1,840	Number of ESIOA option holders 3 2 2 47 315	Number of ESIOB option holders 240 241 285 1,459 783
3,851	369	3,008
843	34	2,025

Twenty largest quoted equity security holders

The names of the twenty largest security holders of quoted equity securities are listed below:

L J & K Thomson Pty Ltd Elgar Park Pty Ltd Mr Danny Segal & Mrs Jennifer Ruth Segal Menzies Super Pty Ltd Marbrijen Pty Ltd Mr Iain Robert McEwin & Ms Dianne Church L J Thomson Pty Ltd Mr Larry Owen Hanley Mr Gregory Milts P A Shakespeare Investing Pty Ltd Challenge Roofing Pty Ltd Mr Emilio Mosca & Mrs Anna Mosca B & R Superannuation Pty Ltd Mr Mark Andrew Hastwell & Kirsty Lou-Anne Hastwell M Whitney Pty Ltd Joseph Barakat & Marie Barakat Superior Coatings (Aust) Mr George McDougall & Ms Geraldine Frances Elmes JBD Industrial Park Pty Ltd JBD Industrial Park Pty Ltd	Number of ordinary shares held 99,500,000 93,831,247 86,054,001 77,251,554 66,837,158 36,441,914 33,500,000 31,759,045 31,041,489 28,356,566 28,090,002 25,050,000 21,029,083 19,480,000 17,160,000 17,109,647 16,666,667 16,000,000 15,800,000 15,800,000	% of total ordinary shares issued 3.95 3.72 3.42 3.07 2.65 1.45 1.33 1.26 1.23 1.13 1.11 0.99 0.83 0.77 0.68 0.68 0.66 0.64 0.63 0.63
	776,758,373	30.83

Environmental Clean Technologies Limited Shareholder information 30 June 2015

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Mr Peter Andrew Proksa Superior Coatings (Aust) A & K Moore Nominees Pty Ltd Mr Patrick Giles & Mr Adam Giles Mr Iain Robert McEwin & Ms Dianne Church Fozard Investments Pty Ltd Challenge Bricks & Roofing Pty Ltd Mr Gregory Milts Joseph Barakat & Marie Barakat Mr David Fagan Mrs Lily Yuchun Thomson Mr Phillip Beale Mr Emilio Mosca & Mrs Anna Mosca Corbeaux Investments Pty Ltd Mr Iain Robert McEwin Mr Leslie Smith Challenge Roofing Pty Ltd Mr Martin Alexander Ziegler B & R Superannuation Pty Ltd Mr Cameron Lloyd Thomson Maddingley Brown Coal Pty Ltd L J & K Thomson Pty Ltd Mr Frank Robert Ellis et al Mrs Yanhua Li et al Mr Emilio Mosca & Mrs Anna Mosca Mr Larry Owen Hanley Mr Iain Robert McEwin & Ms Dianne Church L J Thomson Pty Ltd Mr Raymond Laurence Carroll et al Mr Daniel Htin Kyaw Mr Rafael Jason Zakelj Mr Steven Kyaw Zaw Challenge Roofing Pty Ltd Mr Gregory Milts B & R Superannuation Pty Ltd Consantis Pty Ltd Mr Gary John Spelta et al Ms Kathy Xiao Liu Mr Mark Paul Warden Mr Lindsay George Dudfield et al	Number of ESIOA options held 131,000,000 80,000,000 78,296,174 58,603,030 50,000,000 50,000,000 50,000,000 44,750,000 30,000,000 29,410,203 25,000,000 25,000,000 20,000,010 15,375,172 15,000,000 15,000,000 14,236,010 13,000,000 12,536,875 12,500,000	% of total ESIOA options issued 10.19 6.22 6.09 4.56 3.89 3.89 3.89 3.48 2.33 2.29 1.94 1.94 1.56 1.20 1.17 1.17 1.11 1.01 0.97 0.97
	769,707,474	59.87
	Number of ESIOB options held 76,592,370 37,052,083 31,165,000 17,218,729 16,500,000 13,515,483 12,147,305 12,000,000 11,458,886 10,002,499 10,000,001 9,662,500 9,363,334 8,680,496 8,395,747 8,143,100 7,500,000 7,400,000 7,331,770 7,285,715	% of total ESIOB options issued 8.55 4.13 3.48 1.92 1.84 1.51 1.36 1.34 1.28 1.12 1.12 1.08 1.04 0.97 0.94 0.91 0.84 0.83 0.82 0.81
	321,415,018	35.89

Unquoted equity securities

There are no unquoted equity securities issued.

Environmental Clean Technologies Limited Shareholder information 30 June 2015

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Substantial holders

There are no substantial holders in the company.

Voting rights

The voting rights attached to ordinary shares are set out below:

Ordinary shares

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Options

Options do not convey any rights to the holder with respect to voting unless such options are exercised and ordinary shares are issued.

AI assistant

ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Annual Report 2015

64819_rns_2015-08-30_d0bfacba-0b66-44be-aa74-891f4adf0002.pdf

Full$Year$Results$for$Year$Ended$30$June$2015$

For$further$information,$contact:

1. Company details

2. Results for announcement to the market

Dividends

Comments

3. Net tangible assets

5. Loss of control over entities

6. Dividends

Current period

Previous period

7. Dividend reinvestment plans

8. Details of associates and joint venture entities

9. Foreign entities

10. Audit qualification or review

11. Attachments

Details of attachments (if any):

12. Signed

Directors

Principal activities

Coldry Process

Matmor Process

Intellectual Property

Dividends

Review of operations

Operational Highlights

Corporate

Coldry

Matmor

Significant changes in the state of affairs

Matters subsequent to the end of the financial year

Likely developments and expected results of operations

Coldry

Matmor

Environmental regulation

Information on directors

Environmental Clean Technologies Limited Directors' report 30 June 2015

Company secretary

Meetings of directors

Retirement, election and continuation in office of directors

Remuneration report (audited)

Principles used to determine the nature and amount of remuneration

Non-executive directors remuneration

Three tier base remuneration:

Environmental Clean Technologies Limited Directors' report 30 June 2015

Executive remuneration

Executive and Director Incentive Plan

Executive remuneration and reward framework

Consolidated entity performance and link to remuneration

Use of remuneration consultants

Details of remuneration

Amounts of remuneration

Environmental Clean Technologies Limited Directors' report 30 June 2015

Service agreements

Share-based compensation

Issue of shares

Options

Additional information

Additional disclosures relating to key management personnel

Shareholding

Option holding

Loans to key management personnel and their related parties

Shares under option

Shares issued on the exercise of options

Indemnity and insurance of officers

Indemnity and insurance of auditor

Proceedings on behalf of the company

Non-audit services

Officers of the company who are former partners of BDO East Coast Partnership

Auditor's independence declaration

Auditor

General information

Environmental Clean Technologies Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2015

Environmental Clean Technologies Limited Statement of changes in equity For the year ended 30 June 2015

Note 1. Significant accounting policies

New, revised or amending Accounting Standards and Interpretations adopted

Going concern

ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. Annual Report 2015