Annual Report 2021 For the year ending 31 December 2021 Inside this report Chairman’s Letter Review of Activities Directors’ Report Remuneration Report Auditor’s Independence Declaration Financial Statements Consolidated statement of profit or loss and other comprehensive income Consolidated statement of financial position Consolidated statement of changes in equity Consolidated statement of cash flows Notes to the financial statements Directors’ Declaration Independent Auditor’s Report ASX Additional Information Corporate Directory 2 4 10 16 21 22 23 24 25 26 27 50 51 56 60 Akora Resources Annual Report 2021 1 1 Chairman’s Letter Early drilling success encouraged the Board to bring forward the 2022 proposed drilling and increase the 2021 drilling campaign to 5,000 metres and ensure a meaningful Maiden JORC Resource could be achieved. 2 Akora Resources Annual Report 2021 Dear Shareholder We are pleased to present the 2021 Annual Report the second since successfully listing AKORA Resources Limited (ASX:AKO) in December 2020 on the Australian Securities Exchange. 2021 continued to be a challenging year for all. The uncertainties and complications due to COVID and the inability to travel overseas meant that we had to adjust our planned approaches to ensure completion of activities outlined in the 2020 AKORA Prospectus. From the successes and lessons learnt from the initial 12 drill hole exploratory programme in late 2020 we created a capable local team to tackle the major 2021 drilling campaign at Bekisopa. Under direction from AKORA’s Australian management our local colleagues established the Bekisopa site camp, provided medical services, delivered geological management, scheduled the drilling, and provided in-country management for both operational and Government Relations. Together all successfully completed the substantial 4,000-meter diamond drilling campaign. Early drilling success encouraged the Board to bring forward the 2022 proposed drilling and increase the 2021 drilling campaign to 5,000 metres and ensure a meaningful Maiden JORC Resource could be achieved. This meant that 51 drill holes were completed in three zones along the 6-kilometer main strike. The drilling confirmed an extensive iron formation below the high-grade outcropping iron ore, extending and open to depths of 300 meters down dip, with high-grade plus 62% iron at surface in numerous holes that are potentially direct shipped iron ore. In conjunction with the drilling program processing trials were performed on drill core samples to understand the potential products deliverable for Bekisopa. These trials consistently delivered better than 62% iron benchmark grade fines product at a 2mm crush size, very encouraging first results. Of note is the iron mineralisation within the weathered zone that readily upgraded to a 66.9% premium-grade iron fines after crushing to 2mm and magnetic separation. These and further product grade trials at a 2mm crush and magnetic separation demonstrated how readily the iron mineralisation at Bekisopa can be upgraded with minimal beneficiation to produce high- grade and potentially high margin products. The second phase of the drilling program concentrated on the deeper holes in the Northern and Southern Zones and delivered intercepts down hole to 250 meters in iron mineralisation with several significant continuous iron intercepts of 100 to 155 meters in thickness. The drilling assays and substantial intercepts should all contribute to defining an important Maiden JORC Resource for Bekisopa. In mid-September during the drilling campaign at Bekisopa we welcomed a visit from the Ministry of Mines Regional Strategy who also visited the Tanamarina Commune. The five-person delegation led by The Madame Director commented “we are satisfied with the Company’s answers and have enjoyed our visit and stay at the Bekisopa camp. Our report to superiors will state the Company is serious about its project and a reliable Company, especially their social contribution to Tanamarina water programme.” Chairman's Letter Following consultation with the villages AKORA provided medical support, building materials and farming implements as requested and undertook the major community project at Tanamarina of drilling for clean water and providing potable water across the village. This has been a most welcomed improvement for the village and was celebrated with fanfare and an extensive opening party inviting dignitaries from across the region. The Bekisopa drilling campaign was completed in late November 2021, 63 drill holes were logged and samples sent to ALS Perth Iron Ore Centre for assay. As a result, there is considerable information, assay and product trials, that should all come together to produce the Maiden JORC Resource to be announced in late March 2022. At 31 December 2021, AKORA had A$1.1 million in cash and is preparing for a year of further reviewing the significant Bekisopa iron resource and undertaking product logistics, mining and processing studies. Yours sincerely MH Stirzaker Non-executive Chairman Akora Resources Annual Report 2021 3 Review of Activities Review of Activities Following exploration success in the final quarter of 2020, the Group commenced a planned 4,000 metre drilling campaign in the second quarter of the year with drilling proposed for the Northern, Central and Southern Zones of the Bekisopa project which was expanded to 5,000 metres. 4 Akora Resources Annual Report 2021 By early in the third quarter of this year, exploration success in the Southern Zone resulted in the Group accelerating its drilling campaign and brought forward around 1,000 metres of drilling scheduled for 2022. The Group was able to mobilise with its Drilling Contractor a new diamond drilling rig in the third quarter which had enhanced productivity and greater depth range and enable savings in mobilisation and demobilisation of equipment and facilities. DRILLING The 2021 drilling campaign has built on the excellent geological modelling, ground magnetic survey and initial 12-hole exploratory drill programme of late 2020 and confirmed the interpretation of high-grade outcropping lump magnetite and hematite along the 6-kilometer strike length with continuing iron mineralisation at depth dipping to the west in the north and flattening out into the southern zone. The iron mineralisation intercepts became rather predictable as drilling continued and showed a strong correlation with the magnetic anomalies identified through the ground magnetic survey work. The magnetics data suggests semi-continuous mineralisation over at least a 6km strike with drilling to date confirming iron mineralisation along 5kms of this strike length. In total 63 drill holes have been completed along and across the main Bekisopa tenement comprising 47 shallow drill holes, <100m in depth downhole, and 16 deeper holes up to 260 metres in BEKD53 in the North intercepting iron mineralisation for 105m down to 250m downhole and in the south drill hole BEKD46 a 163m intercept finishing at 179m downhole to highlight a few of the significant continuous iron mineralisation intercepts. Over 2021 there was frequent reporting of drilling assay results, iron mineralisation characteristics and iron formation extents, these all came together and since the completion of 2021 have been reported to the ASX in three announcements covering the Northern, Central and Southern Zones along the 6km strike. Following is a summary of all the drilling findings. BEKISOPA NORTHERN ZONE The Bekisopa Northern Zone comprises 13 drill holes, see Figure 1. Several intercepted high-grade iron of up to 64%Fe at surface across several holes down to 6.9m downhole and this is expected to be suitable for DSO at better than benchmark grade. These iron grades are DSO equivalent, meaning they only require to be mined, crushed, and screened to produce benchmark grade 62%Fe, or better, as lump and fines products and could potentially represent a “quick-start” operation option. The drilling assays show significant volumes of readily upgradeable iron mineralisation are present and that mineralisation continues at plus 300m downdip from surface. The Northern Zone includes four very deep holes of 138.2m, 220.65m, 174.12m and 260.72m in BEKD50 to 53 respectively, with an overall average grade of 33.1%Fe, with numerous mid-intercept grades of 44 to 55%Fe. Within these deep holes are significant iron intercepts from 67m to 105m, see Figure 2. The drill holes are at a 200m north-south drill spacing and a 100m east-west drill spacing within an area that extends over some 600m by 200m and at a maximum depth to some 300m downdip. Iron grades have been shown via test work on a single hole in the north (BEKD01) to readily upgrade using magnetic separation to an average of 63%Fe after at -2mm crush and then to 69.9%Fe after magnetic separation (Davis Tube Tests) processing at -75µm grind, all encouraging results. Review of Activities Northern Zone Central Zone Southern Zone Figure 1. Northern, Central and Southern Zone drill hole locations 100m True Thickness 300m Down Dip Figure 2. Northern Zone cross Section 7,612,300N covering BEKD20, 52 and 53 High-grade ~64%Fe at surface and continuous iron mineralisation downdip to plus 270m. Akora Resources Annual Report 2021 5 Review of Activities DTT performed on BEKD01 from surface to 70.5 metres downhole, on an average head grade of 43.3%Fe, delivered a product averaging 69.9%Fe at very low impurity levels of 0.5% Silica, 0.7% Alumina, 0.003% Phosphorous and 0.06% Sulphur a premium high grade iron product. This 69.9%Fe product at 75 microns indicates that Bekisopa could potentially be a future provider of very clean premium grade iron ore suitable for Direct Reduced Iron pellet production - the crucial feed material for the iron and steel industry to decarbonise and produce Green Steel. BEKISOPA CENTRAL ZONE Assay results for the 12 drill holes in the Central Zone within the Bekisopa project show continuous shallowly dipping iron mineralisation from surface with four holes ending in iron mineralization at 100.4m, confirming iron mineralisation is open at depth and to the west. The Central Zone covers some 1.8 kms north to south and some 300 metres across strike, see Figure 1 above. Mineralisation is continuous in the northern part of the Central Zone (~500m strike) and it is considered likely that it will be continuous all the way to the southern part of the zone based on the mineralisation intersected on Section 9300N and the continuous magnetic anomaly between these two areas, potentially an overall strike length of some 1.8kms, refer Figure 1 above. Iron mineralisation is between 50 and 70m combined true width and dips shallowly (30-40°) to the west as shown in the cross sections 11000N, see Figure 3. Results indicate a consistent surficial zone where weathering has upgraded the average grade of the primary mineralisation, with some areas potentially direct shipping ore (DSO). This zone has been confirmed to be over 200m wide on Section 10800N but is variable in width depending on the dip of the primary mineralisation. Further south within the Central zone the iron formation is interpreted to have an even flatter - shallower dip, see Figure 4. The Central Zone covers a strike of around 1.8kms with what appears to be an open iron formation from surface across and along strike and suitable for a low stripping ratio open pit mining configuration. From the cross-section structures defined in Figures 4 and 5, there looks to be additional potential for iron mineralisation at depth and to the west of the current drilling offering the possibility for considerably higher resource tonnages. 6 Akora Resources Annual Report 2021 True Thickness 70m Figure 3. Central Zone cross section along latitude 7611000 for drill holes BEKD03, 41 and 42. Relatively flat westerly dipping ore body suggest a low stripping ratio for mining. Figure 4. Central Zone cross section along latitude 7609300 BEKD07 and BEKD08 from 2020 drilling with iron mineralisation open at surface and potential for further iron formations at depth and continuing to the west. BEKISOPA SOUTHERN ZONE Across the 37 Southern Zone drill holes there are high-grade near surface assays +64%Fe, clearly indicates the potentially Direct Ship Ore (DSO) lump and fines, in 13 of the 29 drill holes that intercepted iron mineralisation at surface with 14.6m @ 64.94%Fe in BEKD13, 8.19m @ 68.15%Fe in BEKD31, 5.88m @ 63.87%Fe from 0.9 to 6.78m in BEKD44. At depth 7 drill holes recorded substantial iron intercepts grading +63%Fe with 19.5m @ 63.26%Fe from 68.1m downhole in BEKD46 and 11m @ 63.96%Fe from 56.8m downhole in BEKD45. Near surface assay results shows high-grade average iron grade across numerous drill holes; 68.2%Fe, 66.8%Fe, 65.9%Fe, 65.5%Fe, 65.5%Fe, 64.9%Fe and 62.9%Fe from surface to 8.2m, 6.2m, 2.2m, 6.9m, 14.7m and 6.8m, respectively in Southern drill holes BEKD31, 29, 17, 16, 13 and 44, see Figure 1. Review of Activities Drill holes intercepted iron mineralisation deep downhole in several Southern drill holes: • • • 155.64m continuous iron intercept ending at 172.74m at an average 37.05%Fe in BEKD46, 150.85m continuous iron intercept ending at 173.94m at an average 33.20%Fe in BEKD59 and 146.07m continuous iron intercept ending at 182.47m at an average 38.42%Fe including 70.41m at 46.14%Fe in BEKD43, refer Appendix 1, Significant Iron Intercepts. The Southern Zone comprises 28 shallow drill holes, <100m, and 9 deep drill holes from 139.6m to 208.8m with the deepest iron mineralisation intercepted being at 149.6m, 173.9m, 185.4m and 184.7m downhole in BEKD46, 59, 43 and 61 respectively. There are substantial true thicknesses in a number of southern drill holes, several around 50m, then BEKD47 and 57 at 80.5m and 82.3m, respectively, then BEKD59, 43 and 46 at 150.8m, 159.6m and 162.8m, respectively, which should add considerably to the resource estimate. Cross sections for drill holes within the Southern Zone and shown in Figures 5 and 6. The Southern Zone drill holes are typically spaced at 150m in the north-south direction with a 50m or 100m east-west spacing that extends across an area of over 850m by 1,000m and at a maximum depth to some 185m downhole. These flat lying east-west iron formations have true widths varying from around 80m (BEKD45 and 63) to 155m (BEKD58 and 59) and 170m (BEKD46 and 62). It is our expectation that these drilling results should come together and provides evidence for significant tonnages of iron mineralisation in the Southern Zone. Figure 5. Southern Zone cross Section 7,608,300N covering BEKD17, BEKD46 to 49, BEKD54 and BEKD61. High-grade ~66%Fe and ~63%Fe at surface in BEKD17 and 54 and at depth in BEKD46 19.5m @ 63.3%Fe and 13.3m @ 64.4%Fe and a continuous 162.8m iron mineralisation intercept of 35.9%Fe in BEKD46. Figure 6. Southern Zone cross Section 7,608,000N covering BEKD15 and 16, 44 and 45, 63 and 32 and 33. High-grade at surface of approximately 64%Fe, 65%Fe, 63%Fe, 62%Fe and 65%Fe in BEKD15, 16, 44, 32 and 33 and at depth approximately 64%Fe, 65%Fe and 63%Fe in BEKD45, 32 and 33. Akora Resources Annual Report 2021 7 Review of Activities METALLURGICAL TESTWORK Wet Low Magnetic Separation (wLIMS) and Davis Test Tube (DTT) process trials were performed on numerous samples along and across the Bekisopa iron mineralisation from surface to depth to understand the upgradability of the iron mineralisation. wLIMS was conducted on drill core crushed to 2mm with 80% passing 1.3mm, while the DTT’s were carried out on assay pulp samples that had been prepared to 75 microns and showed 80% passing 62 microns, a relatively coarse sizing for DTT. These trials were conducted on many samples and have shown very consistent upgradability results on the strike. The wLIMS and DTT results from each Zone along the 5 kilometre strike length are summarised in Table 1 (a), (b) and (c). These all show that the iron mineralisation head grade at Bekisopa upgrades to better than the 62%Fe Benchmark grade using wLIMS and to 70%Fe using DTT. These are outstanding results are demonstrate that the Bekisopa iron mineralisation can be readily processed to produce high-grade fines and premium grade products. NORTHERN ZONE HEAD GRADE WLIMS FINES GRADE DTT GRADE BEKD01 COMPOSITE COMPOSITE INTERVAL (M) FE % FE % FE % 1 2 3 4 5 6 7 0 – 8.0 8.0 – 13.54 13.54 – 20.27 20.27 – 26.54 26.54 – 32.30 32.30 – 37.75 37.75 – 43.54 Averages 60.6 49.6 45.1 42.5 38.9 31.4 47.5 45.1 67.6 63.6 63.3 60.5 63.4 59.5 63.0 63.0 69.9 69.6 69.6 69.4 70.1 70.1 69.9 69.8 Table 1 (a). Six composites from Bekisopa drill hole BEKD01 from surface to 43.54m downhole showing the considerable upgrading from an average head grade of 45.1%Fe to an average LIMS fines grade of 63%Fe and an average DTT Grade of 69.8%Fe, with low impurity levels. 8 Akora Resources Annual Report 2021 CENTRAL ZONE HEAD GRADE WLIMS FINES GRADE DTT GRADE BEKD04 COMPOSITE COMPOSITE INTERVAL (M) FE % FE % FE % 1 2 3 4 5 6 7 Averages 0 – 5.5 5.5 – 11.1 11.1 – 19.4 19.4 – 25.7 25.7 – 31.3 31.3 – 38.1 37.75 – 43.54 60.1 43.9 37.4 26.4 25.5 24.2 47.5 35.1 69.7 69.6 69.2 63.7 61.9 62.2 63.0 66.1 70.1 70.0 69.6 71.1 70.8 69.8 69.9 70.2 Table 1 (b). Six composites from Bekisopa drill hole BEKD04 from surface to 38.1m downhole showing the considerable upgrading from an average head grade of 35.1%Fe to an average LIMS fines grade of 66.1%Fe and an outstanding average DTT Grade of 70.2%Fe, with very low impurity levels. SOUTHERN ZONE HEAD GRADE WLIMS FINES GRADE DTT GRADE BEKD34 COMPOSITE COMPOSITE INTERVAL (M) FE % FE % FE % 1 2 3 4 5 6 7 Averages 0 – 4.9 4.9 – 10.43 10.43 – 14.8 14.8 – 18.7 18.7 – 23.0 23.0 – 29.36 29.36 – 34.8 59.4 62.1 41.1 51.0 54.1 59.2 45.6 53.2 69.0 68.1 64.3 65.0 66.2 66.0 63.3 66.0 68.9 69.4 69.7 70.4 69.5 70.0 68.8 69.5 Table 1 (c). Seven composites from Bekisopa drill hole BEKD34 from surface to 34.8m downhole showing the considerable upgrading from an average head grade of 53.2%Fe to an average LIMS fines grade of 66.0%Fe and an outstanding average DTT Grade of 69.5%Fe, with very low impurity levels. The correlation between assay results and the product grade trials, wLIMS and DTT, looks to be high and reproducible. Drill holes BEKD01, 04 and 34 from the Northern, Central and Southern Zones respectively have been tested for the product grade potential using magnetic separation techniques of wLIMS, at a 2mm crush, and DTT, at 75 microns, and expectation is that these results in all reasonable probability would be reproduced across all Zones on the main Bekisopa tenement. The Group achieved outstanding iron concentrate grades at a relatively coarse 75-micron sizing shows promise for Bekisopa to be able to deliver Direct Reduced Iron pellet grade to meet the growing demand from decarbonisation in the iron and steel industry by the increased production demand for DRI pellets. Premium grade iron feed, with very low impurity levels, as seen from BEKD01, 04 and 34 in Table 1 is forecast to be required to produce DRI pellets from natural gas or green hydrogen iron making processes. Bekisopa in Madagascar is well placed to provide these growing markets that have an abundance of natural gas, for example the Middle East, or those locations that will be producing green hydrogen. Across each Zone, DTT for iron head grades from 15% to 25% shows very clean and high-quality concentrate grades averaging 68.6%Fe, from an average head grade of 20.4%Fe at an average DTT mass yield of 20.8%. These are excellent DTT results at a relatively coarse grind of 75-microns, achieving a P80 of 62 microns, and if this was a necessary processing stage for lower grade Bekisopa iron mineralisation it looks to be capable of clearly delivering a premium high- quality DRI concentrate which is the way the Green Steel Industry looks to be heading as one main way to reduce their carbon emissions. COMMUNITY INTERACTION The Company advised shareholders that it had executed a water drilling agreement with ONG St Gabriel Madagascar, a not-for-profit organisation affiliated with the Catholic Church, to establish a permanent source of potable water with primary community stakeholders. St Gabriel completed drilling a water bore to a depth of ~80 metres during the quarter then completed the construction a 12-metre-high water tower with capacity to provide storage capacity of 10,000 litres and the installation of solar panels (to charge large batteries) to enable water to be pumped to five central sites through the Commune of Tanamarina, including the First Aid House. The project was completed for approximately A$75,000. Review of Activities Notwithstanding the recent Batsirai cyclone that have left severe and widespread damage throughout Madagascar, including parts of the Bekisopa project area, the Water Tower and storage tank were withstood cyclonic winds and rain and continue to provide fresh water to the Tanamarina village. The Company is also providing financial support communities severely affected by the Batsirai cyclone. HEALTH, SAFETY AND ENVIRONMENT Drilling activities and various support activities continued to operate to the highest standards set by the Company for health, safety and environment. No reportable lost time incident or environment were recorded during the month. Since the commencement of exploration and specifically drilling in October 2000, the Company has recorded only one LTI. The Company conducted regular tests of all consultants and contractors for Covid-19. A potable water toast to a successful new water tower and distribution. Water tower, water storage tank and solar panels for the water pump. Mother and baby getting fresh clean water. Akora Resources Annual Report 2021 9 Directors' Report Directors’ Report The directors present their report, together with the financial statements of AKORA Resources Limited (formerly Indian Pacific Resources Limited) (ACN 139 847 555) (hereafter referred to as the “Company”), for the financial year ended 31 December 2021. 10 Akora Resources Annual Report 2021 Directors' Report PRINCIPAL ACTIVITIES The principal activities of the Company during the financial year were exploration for iron ore in Madagascar. There was no significant change in the nature of these activities during the year. OPERATING RESULTS, REVIEW OF OPERATIONS FOR THE YEAR AND SIGNIFICANT CHANGES IN STATE OF AFFAIRS The net loss after tax attributable to shareholders of AKORA Resources Limited of $1,077,391 for the year ended 31 December 2021 (the net loss after tax for the previous financial year was A$1,456,540). DIVIDENDS No dividends were declared and paid during the year. EVENTS AFTER BALANCE DATE Following the end of the financial year a number of subscribers to the IPO have exercised their options over ordinary shares. As at the date of this report, subscribers to the IPO have exercised 470,649 exercised since balance date. In total, the Company has received $141,194 in funds from the exercise of options since balance date. Zones totalled 84.5 Mt at a concentrate grade of 67.6% Fe with DTR at 39.9%. The Company also announced that it had an Exploration Target of 50-100Mt at the Southern Zone with a concentrate grade of 67-69% and DTR at 30-45%. [Cautionary Statement: The board of directors wish to inform shareholders that an Exploration Target is conceptual in nature and accordingly, there has not been sufficient exploration to estimate a Mineral Resource and that further exploration will result in an estimation of a Mineral Resource.} On 31 March 2022, the Company request and received permission from Australian Securities Exchange to enter a Trading Halt until 4 April 2022 pending an announcement on a capital raise. ENVIRONMENTAL ISSUES The Company’s projects are subject to the laws and regulations regarding environmental matters in Madagascar. Many of the activities and operations of the Company cannot be carried out without prior approval from and compliance with all relevant authorities. The company conducts its activities in an environmentally responsible manner and in accordance with all applicable laws. However, the company could be subject to liability due to risks inherent to its activities, such as accidental spills, leakages or other unforeseen circumstances. ASX LISTING RULES The Company expended $3,377,804 during the final year on exploration and evaluation of the Bekisopa project. The expenditure represents 75% of total expenditure for the year. On 24 March 2022, the Company released its Maiden JORC Resource arising from its drilling programme at the Bekisopa project. The Inferred Resource for the Northern and central The board of directors accelerated 2022 expenditure during the financial to take advantage of economies of scale following significant exploration success at Bekisopa PR 10430. INFORMATION ON DIRECTORS The following persons were the directors in office during the period 1 January 2021 to 31 December 2021 and since year-end unless otherwise stated: MH Stirzaker Independent Non-executive Chairman Qualifications BCom, CA Experience Mr Stirzaker was appointed to the board of directors on 22 August 2020. Mr Stirzaker has over 30 years’ commercial experience, mainly in mining finance and mining investment. Mr Stirzaker began his career in Sydney as a Chartered Accountant with KMPG before moving into investment banking with HSBC Group and then Kleinwort Benson in London. From 1993 to 2007, Mr Stirzaker was part of the natural resource advisory and investment firm, RFC Group, where he became Joint Managing Director. From 2010 until 2019, Mr Stirzaker was a partner with the private equity mining fund manager, Pacific Road Capital. 100,000 ordinary shares and 50,000 options over ordinary shares in AKORA Resources Limited. Base Resources Ltd since 19 November 2014 and Chairman from 26 November 2021; Firestone Diamonds plc since 22 July 2019; and Prodigy Gold NL from 3 December 2018 to 1 December 2021. Interest in shares and options Directorships held in other listed entities in last 3 years Akora Resources Annual Report 2021 11 Directors' Report PG Bibby Chief Executive Officer and Managing Director Qualifications Dip App Sc (Secondary Metallurgy), B App Sc (Metallurgy) Experience Mr Bibby was appointed to the board of directors on 9 July 2015 and appointed CEO/Managing Director on 1 January 2020. Mr Bibby is a metallurgist with over 35 years’ experience in both mining and metals industries. Mr Bibby worked for 23 years with Rio Tinto Limited (formerly CRA Limited) in various operational, technological, and business development roles. With Rio Tinto, Mr Bibby held various operational roles at Rio Tinto Aluminium (formerly Comalco), Kaltim Prima Coal and Rio Tinto Iron Ore (Hamersley Iron). At Trio Tinto Iron Ore, Mr Bibby was manager of metallurgy at both Dampier and Paraburdoo. Mr Bibby joined Zinifex Limited in 2004 as General Manager-Technology and then played a leading role in the merging of Umicore and Zinifex smelting businesses to form Nyrstar and became Chief Development Officer based in London. On returning to Australia, Mr Bibby was appointed Managing Director of OceanaGold Corporation and following OceanaGold, Mr Bibby performed various consulting roles. Interest in shares and options 1,586,278 ordinary shares directly and 185,682 ordinary shares indirectly and 50,000 options over ordinary shares in the Company. Directorships held in other listed entities in last 3 years No other directorships in the past three years. JM Madden Executive Director and Company Secretary Qualifications BCom (Melb) FCPA FGIA FTIA Experience Mr Madden was appointed to the board of directors on 6 October 2009 and is the founder of the Company. Mr Madden has over 30 years’ experience in the mining industry. Mr Madden joined Rio Tinto (formerly CRA Limited) from the University of Melbourne in 1981 and held several corporate positions including accounting, planning, business analysis, strategy and acquisition and taxation. Between 1996 and 2000, Mr Madden was Manager-Finance for the Rio Tinto/Freeport Joint Venture in West Papua. From 2001 to 2003, Mr Madden was General Manager-Commercial Morobe Consolidated Goldfields Limited (Morobe controlled the Hidden Valley and Wafi projects) in Papua New Guinea. On his return to Australia, Mr Madden was General Manager-Commercial, Indophil Resources NL where he was responsible for all accounting, business analysis, corporate secretarial, legal and taxation functions in Australia and the Philippines. Since 2007, Mr Madden has provided consulting services to various mining projects in Africa, Asia, and Australia for entities such as Australian Premium Iron Ore JV, Intrepid Mines Limited, Mesa Minerals Limited, and Ok Tedi Mining Limited. Mr Madden negotiated the acquisition of the exploration projects held by the Company and managed the Company since its incorporation. Interest in shares and options 662,344 ordinary shares directly and 814,682 ordinary shares indirectly in AKORA Resources Limited. Directorships held in other listed entities in last 3 years No other directorships in the past three years. 12 Akora Resources Annual Report 2021 Directors' Report MEETINGS OF DIRECTORS During the financial year, the board of directors held 11 meetings (including committee meetings of directors) with the remainder of meetings conducted by way of written resolution. Attendances by each director during the year were as follows: DIRECTORS MH. Stirzaker PG. Bibby SL. Fabian (resigned on 31 October 2021) JM. Madden OPTIONS COMMITTEE MEETINGS DIRECTORS MEETINGS AUDIT AND RISK MANAGEMENT COMMITTEE REMUNERATION COMMITTEE MEETINGS NO. ATTENDED NO. ATTENDED NO. ATTENDED 6 6 5 6 6 6 4 6 2 - 2 - 2 - 2 - - - - - - - - - At as the date of this report, the unissued ordinary shares of the Company under unlisted options are as follows: GRANT DATE EXPIRY DATE 7 December 2020 7 December 2022 (IPO Options) 7 December 2020 7 December 2022 (Escrow Options) EXERCISE PRICE $0.3000 $0.3000 OPTION NUMBER 8,592,266 2,244,750 10,837,016 Under the terms and conditions of the IPO the Company raised $5,000,000 with the issue of 20,000,000 shares at 25 cents per share. The Company also issued subscribers with a free-attaching unlisted option over ordinary shares with the options terms being one option for every two shares subscribed at an exercise price of 30 cents per option and with an expiry date of 2 years from the date of issue. The Company granted Harbury Advisors Pty Ltd with 2,244,750 options over ordinary shares pursuant to its Letter of Engagement on the same terms and conditions as the IPO options. The options over ordinary shares issued to Harbury are subject have been escrowed by the ASX for a period of two years. PERFORMANCE RIGHTS AWARD DATE VEST DATE 13 April 2021 13 April 2023 9 September 2021 Cancelled FAIR VALUE NUMBER $0.3000 $0.2250 400,000 1,000,000 On 13 April 2021, shareholders approved the award of 400,000 performance rights to Mr MH Stirzaker with the performance milestone being to continue as a director of the Company for a period of 2 years. On 9 September 2021, the Company executed a Mandate Letter with Vert Capital Pty Limited for the latter to provide corporate advice. Under the Mandate, Vert was awarded performance rights comprising two tranches with 400,000 performance rights convertible into 400,000 ordinary shares if the Company achieved a share price of $0.60 per share for a 30-day period and 600,000 performance rights convertible into 600,000 performance rights if the Company achieved a share price of $1.00 per share for a 30-day period. On 25 February 2022, the parties executed a Deed of Release and the Company cancelled the award of performance rights. Akora Resources Annual Report 2021 13 Directors' Report PROCEEDINGS ON BEHALF OF COMPANY The Company has no outstanding or pending litigation whether brought by the Company or brought against the Company by a third party. NON-AUDIT SERVICES Hall Chadwick has not provided any non-audit services during the financial year. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 21. This report of the directors is signed in accordance with a resolution of the Board of Directors. MH Stirzaker Non-executive Chairman Dated this 31 March 2022 14 Akora Resources Annual Report 2021 Directors' Report Akora Resources executed a water drilling agreement with ONG St Gabriel Madagascar, a not-for-profit organisation affiliated with the Catholic Church, to establish a permanent source of potable water with primary community stakeholders. Akora Resources Annual Report 2021 15 Remuneration Report Remuneration Report REMUNERATION COMMITTEE AND REMUNERATION POLICY The Company has established a Remuneration Committee which comprises Messrs MH Stirzaker and SL Fabian as part of the processes adopted to list on the ASX. Messrs Stirzaker and SL Fabian are non-executive directors of the Company. Mr JM Madden attends meetings of the Remuneration Committee in his capacity as Secretary to the Committee and accordingly, is not a participant in deliberations and decisions made by the Remuneration Committee. The role of the Remuneration Committee is to determine for the board of directors in fulfilling its responsibilities to shareholders by: (a) (b) establishing and reviewing executive remuneration policy to enable the Company to attract and retain executives and Directors who will create value for shareholders; ensuring executive remuneration policy displays a clear linkage between performance and remuneration and therefore, fairly and responsibly rewarding performance under prevailing market conditions; 16 Akora Resources Annual Report 2021 Remuneration Report (c) (d) (e) (f) (g) reviewing the recruitment, retention and termination policies of the Company and procedures for executives; reviewing and recommending to the board of directors’ equity-based plans and other equity-based incentive schemes; evaluating the performance of non-executive directors; ensuring non-executive directors’ remuneration is fair and responsible under prevailing market conditions; and recommending to the board of directors (and in accordance with the Corporations Act shareholders) equity-based plans and other equity-based incentives schemes for non-executive directors to participate. The Remuneration has the right to retain consultants to assist it in performing its role. The Remuneration Committee, as at the date of this report, has not used consultants to assist with its role. The Remuneration Committee tests its decisions through instructing management to develop a Peer Group of exploration entities at a similar stage in advancement of exploration projects. The goal of this Peer Review is to ensure that fixed remuneration and incentive-based remuneration sit comfortably within the range of the Peer Group. The Remuneration Committee also has authority to secure advice on remuneration from consultants specialising assisting entities with remuneration of executives. CONTRACTS OF EMPLOYMENT AND LETTERS OF APPOINTMENT As part of the listing process, the Company formalised contracts of employment with its two executive directors (Messrs PG Bibby and JM Madden), reviewed the terms and conditions of the appointment of its non-executive director (SL Fabian) and established the terms and conditions of appointment of a non-executive chairman. The fixed remuneration principles set out above were used as the basis for setting the fixed remuneration. PG Bibby The Company executed a Contract of Employment with Mr Bibby on 3 September 2020 but was effective from 1 July 2019 (the MD Agreement). Mr Bibby is engaged as a full-time employee of the Company in the role of Managing Director and Chief Executive Officer. Mr Bibby is responsible for overseeing the Company’s projects in Madagascar and in particular, coordinating and implementing the exploration strategy for these projects with input from other senior executive staff, and subject to the overall control and direction of the board of directors. The remuneration payable to Mr Bibby for the MD Services is $250,000 exclusive of statutory superannuation (Base Salary). In addition to the Base Salary, the Company has granted Mr Bibby an annual performance bonus of up to 25% of the Base Salary during the exploration phase (MD Bonus), initially to a maximum of $62,500, based on key performance indicators (KPIs) agreed between the Company and Mr Bibby. If the KPIs are met, the Company will pay the MD Bonus within three months of the end of the relevant financial year. The MD Bonus can also be payable on a pro rata basis. The MD Agreement is for an indefinite term, continuing until terminated in accordance with the MD Agreement. Either the Company or Mr Bibby may terminate the MD Agreement by giving 12 months’ notice in writing to the other party. The Company may terminate the MD Agreement without notice in certain limited circumstances. JM Madden The Company entered into an employment agreement with Mr John Madden on 3 September 2020 but effective from 1 July 2019 (CFO Agreement). Mr Madden is engaged by the Company full-time as Chief Financial Officer and Company Secretary and is responsible for the provision of company secretarial and financial management services (Services), reporting to the Managing Director and Chief Executive Officer. The remuneration payable to Mr Madden for the Services is $150,000 exclusive of superannuation (Base Salary). Mr Madden may also be paid an annual performance bonus of up to 20% of the Base Salary during the development phase (CFO Bonus), conditional upon KPIs agreed between the Company and Mr Madden. If the KPMs are met, the CFO Bonus will be paid within three months of the end of the relevant financial year. The CFO Bonus is payable on a pro rata basis. The CFO Agreement commenced on 1 July 2019 for an indefinite term and may be terminated by either party giving 12 months’ notice in writing. The Company may terminate the CFO Agreement without notice or prior warning in certain limited circumstances. MH Stirzaker The Company entered into a Letter of Appointment with Mr MH Stirzaker on 6 October 2020. Under the Letter of Appointment Mr Stirzaker was entitled to a cash remuneration of $70,000 plus the 9.5% superannuation levy. In addition, the board of directors agreed to will issue 400,000 Performance Rights to Mr Stirzaker for nil consideration, subject to shareholder approval at the Company’s next general meeting. During the process for recruiting a non-executive chairman for the Company, the board of directors concluded that to secure an appropriately skilled non-executive chairman it was important to provide both fixed remuneration and an incentive- based remuneration. REMUNERATION FOR 2021 The Remuneration Committee did not meet during the financial year and therefore, no review of fixed remuneration or incentivisation of executive directors was considered. In relation to non-executive directors, the maximum remuneration pool available under the Constitution of the Company under 6.3(a) is $750,000. The total remuneration payable to Messrs Stirzaker and Fabian, the non-executive directors of the Company, is $109,500 for the financial year ended 31 December 2021. Akora Resources Annual Report 2021 17 Remuneration Report LTIP Prohibited dealings: The Company adopted on 11 August 2011 a Long-term Incentive Plan (LTIP) which provides the board of directors to make offers to eligible directors and employees to acquire securities in the Company. Under the terms of the LTIP, the board of directors may award performance rights or grant options. Performance rights: The performance rights require no payment for the grant to be made; and subject to certain rules relating to cessation of employment, takeovers or insolvency events, will vest only where certain performance conditions have been satisfied (or waived). Upon vesting of a performance right, Ordinary Shares will be allocated to the participant without any further action on the part of the participant. On vesting of a performance right, the Board must allocate the relevant number of Shares due to the participant by either issuing new Shares, procuring the transfer of Shares or procuring the setting aside of Shares for the participant. A performance right will lapse on the earlier of, amongst other things, the occurrence of specific instances or if the participant has failed to meet a performance condition within the prescribed period. Options: Options require no payment for the grant to be made will only vest and become exercisable where certain performance conditions have been satisfied. The exercise of any option granted under the LTIP will be effected in the form and manner determined by the board of directors and must be accompanied by payment of the relevant exercise price (if any) advised to the participant by the board of directors. Following the exercise of an option, the board of directors must allocate the relevant number of Shares due to the participant by either issuing new shares, procuring the transfer of shares or procuring the setting aside of shares for the participant. An option will lapse on the earlier of, amongst other things, the occurrence of specific instances, if the participant has failed to meet a performance condition within the prescribed period or seven years from the grant of the option (or on any other date nominated as the expiry date in the invitation letter). The LTIP prohibits any dealing (which includes, amongst other things, selling, transferring, assigning, encumbering the relevant performance right or option, or attempting to do any of these actions) in respect of an LTIP Security unless the Board determines otherwise, or it is required by law. If a participant deals in an LTIP Security in contravention of this rule, it will immediately lapse. The Board may also impose restriction on dealing in respect of any Ordinary Shares that are allocated on the vesting of a performance right or the exercise of an option. Cessation of employment: Where a participant ceases to be a director or employee of the Group, that participant’s LTIP Securities will continue to be held by the participant and continue to be subject to the terms of the LTIP. However, the Board may determine that some or all of the participants LTIP Securities will vest or become exercisable, or lapse. Takeovers and insolvency events: In the event of a takeover bid, or on certain insolvency events, the Board may determine that all (or a specified number of) a participant’s unvested LTIP Securities will vest. Any such vested options will be exercisable for a period of time as specified by the Board, after which they will lapse. Power to make amendments: The Board has the right to, amongst other things to make any adjustments to the terms of a performance right or option (in order to minimise or eliminate and material advantage or disadvantage to a participant resulting from a corporate action or capital reconstruction) by resolution, and subject to the terms set out in the LTIP or suspend or terminate the operation of the Long Term Incentive Plan; and be reimbursed by the participant any amount to account for income tax (or any other tax of a similar nature) due from the Company in connection with the grant of any LTIP Securities. Other than to comply with a relevant law, correct a manifest error or to take into account possible adverse tax implications, without the consent of the participant, the Board may not exercise its rights above in a manner which reduces the rights of the participant in respect of an LTIP Security already granted. 18 Akora Resources Annual Report 2021 Remuneration Report Remuneration details for the financial years ended 31 December 2021 and 2020 SHORT-TERM BENEFITS POST- EMPLOY- MENT BENEFITS LONG- TERM BENEFITS SHARE-BASED PAYMENTS TOTAL % S-BP GROUP KMP SALARY/ FEES PROFIT SHARE/ BONUSES NON- MON- ETARY OTHER SUPER- ANNU- ATION OTHER EQUITY OPTIONS/ PERFOR- MANCE SHARES For Financial Year Ended 31 December 2021 MH Stirzaker 70,000 PG Bibby 250,000 SL Fabian 32,850 JM Madden 150,000 502,850 - - - - - For Financial Year Ended 31 December 2020 MH Stirzaker 23,333 PG Bibby1 SL Fabian 270,621 41,900 JM Madden 150,000 485,854 - - - - - - - - - - - - - - - - - - - - - - - - - 6,650 25,000 - 14,250 45,900 2,216 25,000 - 3,087 30,303 - - - - - - - - - - - - - - - - - - - - 54,762 131,412 41.7% - 275,000 - - 32,850 164,250 - - - 54,762 603,512 9.1% - - - - - 25,549 295,621 41,900 153,087 516,157 - - - - - 1. Salary represents contractual salary and an amount due of $20,621 that was not accrued at the end of 2019 Equity holdings of each director BALANCE AT START OF YEAR RECEIVED DURING THE YEAR AS COMPENSATION CONVERSION OF PERFORMANCE SHARES DURING THE YEAR SUBSCRIPTIONS TO ISSUES OF IPO SHARES OTHER CHANGES DURING THE YEAR GROUP KMP 2021 MH Stirzaker PG Bibby SL Fabian JM Madden 2020 MH Stirzaker PG Bibby SL Fabian JM Madden NO NO NO NO 100,000 2,165,201 893,636 1,177,026 4,335,863 - 1,965,201 893,636 1,177,026 4,035,863 - - - - - - - - - - - - - - - - - - - - - - - - - 100,000 200,000 - - 300,000 NO - 96,519 (893,636) 200,000 (597,117) - - - - - BALANCE AT END OF YEAR NO 100,000 2,261,720 - 1,377,026 3,738,746 100,000 2,165,201 893,636 1,177,026 4,335,863 Mr PG Bibby holds 1,586,278 ordinary shares directly and 185,682 ordinary shares indirectly via his superannuation fund. In addition, the holding of Ms JA Bibby, the daughter of Mr PG Bibby, is included in the holding of Mr PG Bibby, as Ms JA Bibby satisfied the definition of a related party under AASB 124 Related Parties Disclosure. Ms JA Bibby held 489,760 ordinary shares in the Company as at 31 December 2021. Akora Resources Annual Report 2021 19 Remuneration Report Mr JM Madden directly holds 662,344 ordinary shares and indirectly holds 514,682 ordinary shares via his superannuation fund and via 200,000 ordinary shares via his partner Ms JFE Woodford. Ms JFE Woodford also acquired a further 100,000 ordinary shares on 28 January 2022. Options over ordinary shares held by each director BALANCE AT START OF YEAR RECEIVED DURING THE YEAR AS COMPENSATION EXERCISED DURING THE YEAR ISSUED UNDER IPO OTHER CHANGES DURING THE YEAR BALANCE AT END OF YEAR NO NO NO NO NO NO 50,000 100,000 - - 150,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 50,000 100,000 - - 150,000 - - - - - - - - - - 50,000 100,000 - - 150,000 50,000 100,000 - - 150,000 GROUP KMP 2021 MH Stirzaker PG Bibby SL Fabian JM Madden 2020 MH Stirzaker PG Bibby SL Fabian JM Madden The option holding of Mr PG Bibby includes 50,000 options over ordinary shares issued to Ms JA Bibby, the daughter of Mr PG Bibby, that were issued to Ms Bibby pursuant to participation in the IPO. There are no other related party transactions with Key Management Personnel and their related parties as at 31 December 2021 (2020: nil). Performance rights held by each director BALANCE AT START OF YEAR AWARDED DURING THE YEAR AS COMPENSATION PERFORMANCE MILESTONE ACHIEVED PERFORMANCE MILESTONE LAPSED OTHER CHANGES DURING THE YEAR BALANCE AT END OF YEAR NO NO NO NO NO NO - - - - - 400,000 - - - 400,000 - - - - - - - - - - - - - - - 400,000 - - - 400,000 GROUP KMP 2021 MH Stirzaker PG Bibby SL Fabian JM Madden Shareholders resolved at the annual general meeting on 13 April 2021 to award Mr MH Stirzaker 400,000 performance rights for zero consideration with the performance rights milestone being the continuation of directorship of the Company for two years. 20 Akora Resources Annual Report 2021 Auditor ’s Independence Declaration Auditor’s Independence Declaration To the Board of Directors, AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 To the Board of Directors, As lead audit Director for the audit of the financial statements of AKORA Resources Limited for the financial year ended 31 December 2021, I declare that to the best of my knowledge and belief, there AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE have been no contraventions of: CORPORATIONS ACT 2001 • the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and As lead audit Director for the audit of the financial statements of AKORA Resources Limited for the financial year ended 31 December 2021, I declare that to the best of my knowledge and belief, there • any applicable code of professional conduct in relation to the audit. have been no contraventions of: • the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and Yours Faithfully • any applicable code of professional conduct in relation to the audit. Yours Faithfully HALL CHADWICK WA AUDIT PTY LTD Dated this 31st day of March 2022 HALL CHADWICK WA AUDIT PTY LTD Perth, Western Australia Dated this 31st day of March 2022 Perth, Western Australia DOUG BELL CA Director DOUG BELL CA Director Akora Resources Annual Report 2021 21 Financial Statements Financial Statements For the year ending 31 December 2021 22 Akora Resources Annual Report 2021 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Total revenue and other income Expenditure Administration costs Employee costs Contractors and consultants Exchange fluctuation Listing costs Travel Secretarial Insurances Share-based payments Depreciation Other Total expenditure Loss before tax for year Financial Statements 31 DECEMBER 2021 $ 2020 $ 78 31 NOTE 6 81,206 471,646 328,454 60,161 541,301 141,292 (107,256) 134,662 22,344 462,235 1,997 136,229 51,683 82,353 5,490 3,323 69,950 40,260 - - 4,800 1,910 1,077,469 1,456,571 (1,077,391) (1,456,540) 20 Income tax (expense)/benefit 7 - - Net loss Net loss for the year (1,077,391) (1,456,540) (1,077,391) (1,456,540) Items that have been or may be subsequently reclassified to profit or loss Translation reserve 27,961 (102,646) Total comprehensive income for the year (1,049,430) (1,559,186) Loss per share Basic earnings per share/cents Diluted earnings per share/cents The accompanying notes form part of these financial statements 8 (1.77) (1.77) (3.76) (3.76) Akora Resources Annual Report 2021 23 Financial Statements CONSOLIDATED STATEMENT OF FINANCIAL POSITION Assets Current assets Cash and cash equivalents Receivables Other Total current assets Non-current assets Exploration and evaluation Property plant and equipment Total non-current assets Total assets Liabilities Current liabilities Payables Provisions Total current liabilities Total liabilities Net assets Equity Contributed equity Other contributed equity Reserves Accumulated losses Total equity The accompanying notes form part of these financial statements 24 Akora Resources Annual Report 2021 31 DECEMBER NOTE 2021 $ 2020 $ 10 11 12 13 14 15 16 1,045,851 4,769,912 20,933 2,429 31,525 2,326 1,069,213 4,803,763 7,215,084 3,770,077 4,812 10,192 7,219,896 3,780,269 8,289,109 8,584,032 578,075 256,879 51,052 629,127 14,749 271,628 629,127 271,628 7,659,982 8,312,404 17 18 19-21 22 24,786,898 24,467,443 - 141,451 4,800 31,137 (17,268,367) (16,190,976) 7,659,982 8,312,404 Financial Statements 0 0 8 4 , 1 1 1 , 8 6 2 0 0 9 6 2 1 , ) 8 0 1 , 8 0 1 ( , 5 0 6 7 7 5 5 , ) , 0 4 5 6 5 4 , 1 ( ) , 6 4 6 2 0 1 ( ) 6 8 1 , 9 5 5 , 1 ( , 4 0 4 2 1 3 8 , - - - 4 3 0 4 2 , , 1 2 6 0 9 2 3 5 3 2 8 , 1 6 9 7 2 , 8 0 0 7 9 3 , , ) 1 9 3 7 7 0 , 1 ( ) , 0 3 4 9 4 0 , 1 ( , 2 8 9 9 5 6 7 , , 0 1 5 6 5 9 5 , ) 8 0 6 0 7 6 , ( - - - - - ) , 8 1 8 4 3 1 ( - - - - - - - - - - - - - - - ) , 8 1 8 4 3 1 ( , 0 1 5 6 5 9 5 , ) 8 0 6 0 7 6 , ( 0 0 8 4 , 0 0 9 6 2 1 , 1 1 1 , 8 6 2 0 1 7 6 2 , , 3 2 4 2 1 7 5 , ) , 0 4 5 6 5 4 , 1 ( ) , 6 4 6 2 0 1 ( - - - - - - - - ) , 0 4 5 6 5 4 , 1 ( ) 6 8 1 , 9 5 5 , 1 ( ) , 0 4 5 6 5 4 , 1 ( , 4 0 4 2 1 3 8 , ) , 6 7 9 0 9 1 , 6 1 ( - - - - - - - - - 0 1 7 6 2 , 0 1 7 6 2 , - - - - - - - - - 1 1 1 , 8 6 2 1 1 1 , 8 6 2 0 1 7 6 2 , 1 1 1 , 8 6 2 - - - - - - - - ) , 6 4 6 2 0 1 ( ) , 6 4 6 2 0 1 ( ) , 4 8 6 3 6 2 ( - - - 4 3 0 4 2 , , 1 2 6 0 9 2 3 5 3 2 8 , 1 6 9 7 2 , 8 0 0 7 9 3 , , ) 1 9 3 7 7 0 , 1 ( ) , 0 3 4 9 4 0 , 1 ( - - - - - - - - , ) 1 9 3 7 7 0 , 1 ( , ) 1 9 3 7 7 0 , 1 ( - - - - - - - - - - - - - - - - - - 3 5 3 2 8 , 3 5 3 2 8 , - - - - - - - - 1 6 9 7 2 , 1 6 9 7 2 , , 2 8 9 9 5 6 7 , , ) 7 6 3 8 6 2 7 1 ( , 0 1 7 6 2 , 4 6 4 0 5 3 , ) 3 2 7 5 3 2 , ( - - ) 3 9 0 7 1 2 , ( - - - ) 3 9 0 7 1 2 , ( - - - 0 0 8 4 , - - - ) 0 0 8 4 , ( - - ) 0 0 8 4 , ( - - - - , 0 1 5 6 5 9 5 , ) 8 0 6 0 7 6 , ( - - 3 9 8 , 1 2 2 0 0 9 6 2 1 , , 5 9 6 4 3 6 5 , - - - , 3 4 4 7 6 4 4 2 , - - 4 3 0 4 2 , , 1 2 4 5 9 2 - - 5 5 4 9 1 3 , - - - , 8 9 8 6 8 7 4 2 , y n a p m o C e h t f o s r e n w o s a y t i c a p a c r i e h t n i s r e n w o h t i w s n o i t c a s n a r T 9 1 0 2 r e b m e c e D 1 3 t a s A s e u s s i e r a h S y t i u q e d e t u b i r t n o c r e h t O i s t s o c g n s a r y t i u q E i l s e t o n e b i t r e v n o c f i o n o s r e v n o C s t n e m y a p d e s a b - e r a h S s e v r e s e r r e h t O y n a p m o C e h t f o s r e n w o s a y t i c a p a c r i e h t n i s r e n w o h t i w s n o i t c a s n a r T 0 2 0 2 r e b m e c e D 1 3 t a s A s e u s s i e r a h S e m o c n i i e v s n e h e r p m o c r e h t O e m o c n i i e v s n e h e r p m o c l a t o T y t i u q e d e t u b i r t n o c r e h t O s t n e m y a p d e s a b - e r a h S s e v r e s e r r e h t O s n o i t p o f i o e s c r e x E i s t s o c g n s a r y t i u q E i e m o c n i i e v s n e h e r p m o c r e h t O e m o c n i i e v s n e h e r p m o c l a t o T 1 2 0 2 r e b m e c e D 1 3 t a s A r a e y e h t r o f s s o l t e N r a e y e h t r o f s s o l t e N s t n e m e t a t s l i a c n a n fi e s e h t f o t r a p m r o f i s e t o n g n y n a p m o c c a e h T Akora Resources Annual Report 2021 25 , 5 8 9 3 9 2 4 , 8 1 8 4 3 1 , 7 6 1 , 9 5 1 , 4 ) , 6 3 4 4 3 7 4 1 ( , ) 8 3 0 , 1 6 1 ( 3 9 8 , 1 2 2 , 8 4 7 2 3 8 8 1 , L A T O T I Y T U Q E G N I L L O R T N O C S T S E R E T N I - N O N I Y T U Q E L A T O T E L B A T U B R T T A I A R O K A O T - U M U C C A D E T A L S E S S O L R E H T O S E V R E S E R - E R A H S D E S A B S T N E M Y A P E V R E S E R - S N A R T I N O T A L E V R E S E R $ $ $ $ $ $ $ 2 2 E T O N 1 2 E T O N 0 2 E T O N 9 1 E T O N 8 1 E T O N R E H T O - I B R T N O C D E T U I Y T U Q E $ 7 1 E T O N E R A H S I L A T P A C $ Y T I U Q E N I S E G N A H C F O T N E M E T A T S D E T A D I L O S N O C Financial Statements CONSOLIDATED STATEMENT OF CASH FLOWS Cash flows from/(used) in operating activities Payments to employees and suppliers IPO costs Interest received 31 DECEMBER 31 DECEMBER 2021 $ 31 DECEMBER 2020 $ NOTE (1,123,732) (718,388) - 78 (459,760) 31 Net cash flows from/(used) in operating activities 28 (1,123,654) (1,178,117) Cash flows from/(used) in investing activities Payments for exploration and evaluation Property plant and equipment Net cash flows from/(used) in investing activities Cash flows from financing activities Proceeds from the issue of shares Equity raising costs Other contributed equity Exercise of options Net cash flows from/(used) in financing activities Net cash flows Cash and cash equivalents as at the start of the financial year Exchange fluctuation (2,998,284) (785,606) - (2,726) (2,998,284) (788,332) - - - 5,000,000 (352,496) 4,800 290,621 126,900 290,621 4,779,204 (3,831,317) 2,812,755 4,769,912 2,091,819 107,256 (134,662) Cash and cash equivalents as at the end of the financial year 10 1,045,851 4,769,912 The accompanying notes form part of these financial statements 26 Akora Resources Annual Report 2021 Notes to the Financial Statements NOTE 1: CORPORATE INFORMATION The Financial Statements of AKORA Resources Limited and its controlled entities comprising Malagasy Holdings (Tratramarina Pty Ltd and its controlled entity Universal Exploration Madagascar sarl) and Malagasy Holdings (Bekisopa) Pty Ltd and its controlled entity Iron Ore Corporation of Madagascar sarl) for the financial year ended 31 December 2021. The Financial Statements were authorised for issue in accordance with a resolution of the Board of Directors on 31 March 2022. The parent entity is an entity incorporated in Australia limited by shares and listed on the Australian Securities Exchange. The principal activities of the parent entity are exploration for ferrous metals. NOTE 2(A): BASIS OF PREPARATION AND ACCOUNTING POLICIES Preparation This general-purpose financial report has been prepared in accordance with Australian Accounting Standards Board (hereafter referred to as “AASB”) standards and other authoritative pronouncements of the AASB and the Corporations Act 2001. The financial report has been prepared on an historical cost basis. The financial report is presented in Australian dollars. The Statement of Comprehensive Income for both 2021 and 2020 covers the period 1 January to 31 December in each year. Statement of compliance The financial report complies with Australian Accounting Standards as issued by the AASB and International Financial Reporting Standards as issued by the International Accounting Standards Board. Going concern The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business. The consolidated entity incurred a loss for the year ended 31 December 2021 of $1,077,391 (2020 loss: $1,456,540) and incurred net cash outflows from operating and investing activities of $4,121,938 (2020: cash outflows of $1,966,449). The Directors have prepared a cash flow forecast which indicates that the consolidated entity will have sufficient cash flows to meet all commitments and working capital requirements for the 12 month period from the date of signing this financial report. The Directors believe it is appropriate to prepare these accounts on a going concern basis because of the following factors: (i) (ii) The Directors have an appropriate plan to raise additional funds as and when they are required; and The Consolidated Entity has the ability to scale down its operations in order to curtail expenditure, in the event that any capital raisings are delayed or insufficient cash is available to meet projected expenditure. Based on the cashflow forecast and other factors referred to above, the Directors are satisfied that the going concern basis of preparation is appropriate, in particular given the Company’s history of raising capital to date the Directors are confident of the Company’s ability to raise funds as and when required. Should the Consolidated Entity not achieve the matters set out above, there is material uncertainty whether it would continue as a going concern and therefore whether it would realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial statements. The financial statements do not include any adjustment relating to the recoverability or classification of recorded asset amounts or to the amounts or classifications of liabilities that might be necessary should the Entity not be able to continue as a going concern. Critical accounting estimates The preparation of the financial report requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the group’s accounting policies. The areas involving a higher degree of judgement or complexity or areas where assumptions and estimates are significant to the financial report are disclosed in Note 3. NOTE 2(B): CAPITAL MANAGEMENT POLICY The goal of management is to ensure that the Group continues as a going concern whilst simultaneously managing the dilution. The Group seeks to add value through its exploration and evaluation activities so that new issues of shares can be undertaken at a premium to previous issues. The Group is involved in high-risk exploration and therefore, it looks to raise equity rather than debt or quasi-equity instruments. NOTE 2(C): PRINCIPLES OF CONSOLIDATION The consolidated financial statements comprise the financial statements of AKORA Resources Limited and its controlled entities as at and for the period ended 31 December each year (the Group). Controlled entities are those entities over which the Group has the power to govern the financial and operating policies to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether a group controls another entity. The financial statements of the controlled entities are prepared for the same reporting period as the parent entity, using consistent accounting policies, in preparing and consolidated financial statements, all inter-parent entity balances, transactions, unrealised gains and losses resulting from the intra-group transactions have been eliminated in full. Controlled entities are fully consolidated from the date on which control is obtained by the Group and cease to be consolidated from the date on which control is transferred out of the Group. Investments in controlled entities by AKORA Resources Limited are accounted for at cost in the separate financial statements of the parent entity less any impairment charges. Akora Resources Annual Report 2021 27 Notes to the Financial Statements The acquisition of controlled entities is accounted for using the acquisition method of accounting. The acquisition method of accounting involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the entity acquired. The identifiable assets acquired, and the liabilities assumed are measured at their acquisition date fair values. The difference between the identifiable assets acquired less the liabilities assumed and the fair value of the consideration is goodwill or discount on acquisition. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For purposes of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquired entity are assigned to those units. Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measures based on the relative values of the operation disposed of and the portion of the cash-generating unit retained. Non-controlling interests are allocated their share of net profit after tax in the statement of comprehensive income and are presented within equity in the consolidated statement of financial position, separately from the equity of the owners of the parent entity. NOTE 2(D): FOREIGN CURRENCY TRANSLATION The financial report of the Group is presented in Australian dollars, which is the functional and presentation currency of the parent entity. Each entity in the Group determines is own functional currency. On consolidation, the assets and liabilities of foreign operations are translated into Australian dollars at the rate of exchange prevailing at the reporting date and the income statements for foreign operations are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in other comprehensive income. NOTE 2(E): REVENUE RECOGNITION Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the Group: • • identifies the contract with a customer; identifies the performance obligations in the contract; • determines the transaction price which takes into account estimates of variable consideration and the time value of money; • allocates the transaction price to the separate performance obligations on the basis of the relative stand- alone selling price of each distinct good or service to be delivered; and Total comprehensive income within a controlled entity is attributed to the non-controlling interest even if that results in a deficit balance. • recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised. A change in the ownership interest of a controlled entity that does not result in a loss of control, is accounted for as an equity transaction. A change in the ownership interest of a controlled entity, without a loss of control, is accounted for as an equity transaction, if the Group loses control over a controlled entity, it: (i) Derecognises the assets (including goodwill) and liabilities of the controlled entity; (ii) Derecognises the carrying amount of any non-controlling interest; (iii) Derecognises the cumulative translation differences recorded in equity; (iv) Recognises the fair value of the consideration received; (v) Recognises the fair value of any investment retained; (vi) Recognises any surplus or deficit in the Statement of Comprehensive Income statement; and (vii) Reclassifies the parent entity’s share of components previously recognised in other comprehensive income to Statement of Comprehensive Income or retained earnings, as appropriate. Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either the ‘expected value’ or ‘most likely amount’ method. The measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. 28 Akora Resources Annual Report 2021 Notes to the Financial Statements NOTE 2(F): INCOME TAX The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current tax charge is calculated on the basis of the tax laws acted or substantively enacted at the end of the reporting period. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial report of the Group. Deferred income tax; however, is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit and loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the financial period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. 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. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same tax authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax is a recognised in Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. NOTE 2(G): LEASES The Group has applied AASB 16 Leases to its lease obligations. Under this new standard, the group is required to recognise all right of use assets and lease liabilities, except for short-term (12 months or fewer) and low value leases, on the balance sheet. The lease liability is initially measured at the present value of future lease payments for the lease term. Where a lease contains an extension option, the lease payments for the extension period will be included in the liability if the Group is reasonably certain that it will exercise the option. The liability includes variable lease payments that depend on an index or rate but excludes other variable lease payments. The right of use asset at initial recognition reflects the lease liability, initial direct costs and any lease payments made before the commencement date of the lease less any lease incentives and, where applicable, provision for dismantling and restoration. The Group has recognised depreciation of right of use assets and interest on lease liabilities in the statement of comprehensive income over the lease term. Separate the total amount of cash paid into a principal portion (presented within financing activities) and interest portion (which the Group presents in operating activities) in the cash flow statement. The Group has measured the rights to use as if AASB 16 has applied since the commencement date of the lease arrangements and used the incremental borrowing rate at the date of transition. Under this approach the Group has capitalised the rights to use and recorded the present value of obligations to pay as a liability by applying a single incremental borrowing rate with an adjustment to the opening balance of accumulated losses. The Group has assessed the financial implications of application of AASB 16 Leases and concluded that there is no impact. NOTE 2(H): IMPAIRMENT OF ASSETS Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested 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. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash flows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each financial period. NOTE 2(I): CASH AND CASH EQUIVALENTS Cash and cash equivalents in the statement of financial position comprise cash at banks and at hand and short-term deposits with an original maturity of three months or less. For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. NOTE 2(J): TRADE RECEIVABLES Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. Trade receivables are generally due for settlement within 30 days. The amount of impairment allowance 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. The amount of the impairment is recognised in Statement of Comprehensive Income within other expenses. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent financial period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in Statement of Comprehensive Income. Akora Resources Annual Report 2021 29 Notes to the Financial Statements NOTE 2(K): INVESTMENTS AND OTHER FINANCIAL ASSETS Classification The Group classifies its financial assets in the following categories: financial assets at fair value through Statement of Comprehensive Income , loans and receivables, held-to- maturity investments and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, re- evaluates this designation at the end of each financial period. (i) Financial assets at fair value through Statement of Comprehensive Income Financial assets at fair value through Statement of Comprehensive Income include financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short- term. Derivatives are classified as held for trading unless they are designated as hedges. Assets in this category are classified as current assets. (ii) 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 included in current assets, except for those with maturities greater than 12 months after the financial period which are classified as non- current assets. Financial liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Gains or losses are recognised in profit and loss through the amortisation process and when the financial liability is derecognised. Re-classification The Group may choose to reclassify a non-derivative trading financial asset out of the held-for-trading category if the financial asset is no longer held for the purpose of selling it in the near term. Financial assets other than loans and receivables are permitted to be reclassified out of the held- for-trading category only in rare circumstances arising from a single event that is unusual and highly unlikely to recur in the near term. In addition, the Group may choose to reclassify financial assets that would meet the definition of loans and receivables out of the held-for-trading or available-for-sale categories if the Group has the intention and ability to hold these financial assets for the foreseeable future or until maturity at the date of reclassification. Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or amortised cost as applicable, and no reversals of fair value gains or losses recorded before reclassification date are subsequently made. Effective interest rates for financial assets reclassified to loans and receivables and held-to-maturity categories are determined at the reclassification date. Further increases in estimates of cash flows adjust effective interest rates prospectively. 30 Akora Resources Annual Report 2021 Recognition and derecognition Regular purchases and sales of financial assets are recognised on trade-date - the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through Statement of Comprehensive Income. Financial assets carried at fair value through Statement of Comprehensive Income, are initially recognised at fair value and transaction costs are expensed in Statement of Comprehensive Income. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are reclassified to Statement of Comprehensive Income as gains and losses from investment securities. Subsequent measurement Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method. Available-for-sale financial assets and financial assets at fair value through Statement of Comprehensive Income are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through Statement of Comprehensive Income ‘ category are presented in Statement of Comprehensive Income within other income or other expenses in the period in which they arise. Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. The translation differences related to changes in the amortised cost are recognised in Statement of Comprehensive Income, and other changes in carrying amount are recognised in other comprehensive income. Changes in the fair value of other monetary and non-monetary securities classified as available-for-sale are recognised in other comprehensive income. Impairment The Group assesses at the end of each financial period whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in Statement of Comprehensive Income - is reclassified from equity and recognised in Statement of Comprehensive Income as a reclassification adjustment. Impairment losses recognised in Statement of Comprehensive Income on equity instruments classified as available-for-sale are not reversed through Statement of Comprehensive Income. If there is evidence of impairment for any of the Group’s financial assets carried at amortised cost, the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, excluding future credit losses that have not been incurred. The cash flows are discounted at the financial asset’s original effective interest rate. The loss is recognised in Statement of Comprehensive Income. Notes to the Financial Statements NOTE 2(L): PROPERTY, PLANT AND EQUIPMENT Depreciation is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows: • Computer hardware and software 3 years • Exploration equipment 5 years • Motor vehicles 4 years • Office furniture and fittings 5 years Impairment exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount. Any impairment losses are recognised in Statement of Comprehensive Income. NOTE 2(N): TRADE AND OTHER PAYABLES These amounts represent liabilities for goods and services provided to the Group prior to the end of financial period which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each financial period. NOTE 2(O): PROVISIONS An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in Statement of Comprehensive Income. When revalued assets are sold, it is the Group’s policy to transfer any amounts included in other reserves in respect of those assets to retained earnings. NOTE 2(M): EXPLORATION AND EVALUATION EXPENDITURE Expenditure on exploration and evaluation is accounted for in accordance with the ‘area of interest’ method. Once the legal right to explore has been acquired, exploration and evaluation expenditure is charged to Statement of Comprehensive Income as incurred, unless the board of directors conclude that a future economic benefit is more likely to be realised. Exploration and evaluation expenditure is capitalised provided the rights to tenure of the area of interest are current and either: (i) (ii) the exploration and evaluation activities are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale; the exploration and evaluation activities in the area of interest have not at the end of a financial period reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or relating to, the area of interest are continuing. When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated then any capitalised exploration and evaluation expenditure is reclassified as capitalised mine development. Prior to this reclassification, capitalised exploration and evaluation expenditure is assessed for impairment. Impairment The carrying amount of capitalised exploration and evaluation expenditure is assessed for impairment at the cash generating unit level whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount. Provisions for legal claims and make good obligations are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the financial period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. NOTE 2(P): EMPLOYEE BENEFITS (i) Short-term obligations Liabilities for wages and salaries, including non- monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave and accumulating sick leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented as payables. (ii) Other long-term employee benefit obligations The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of the period in which the employees render the related service is recognised in the provision for employee benefits. These long-term benefits are measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at Akora Resources Annual Report 2021 31 Notes to the Financial Statements the end of the reporting period on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. (iii) Termination benefits Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or to providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value. NOTE 2(Q): CONTRIBUTED EQUITY Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration. If the Group reacquires its own equity instruments, for example, as the result of a share buy-back, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in Statement of Comprehensive Income and the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly in equity. NOTE 2(R): DIVIDENDS Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the financial period. NOTE 2(S): GOODS AND SERVICES TAX (GST) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of 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 taxation authority is included with other receivables or 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 taxation authority, are presented as operating cash flows. NOTE 2(T): SEGMENT REPORTING Operating segments are reported in a manner consistent with the internal reporting structure provided to the board of directors, the chief operating decision making body, which is responsible for the allocation of resources and performance assessment of the operating segments. NOTE 2(U): NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for an accounting period that begins on or after 1 January 2021. New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the Group include: • AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business • AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material • AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual Framework • AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform • AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet Issued in Australia. The Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Group and, therefore, no material change is necessary to Group accounting policies. Standards and Interpretations in issue not yet adopted At the date of authorisation of the financial statements, the Group has not applied the new and revised Australian Accounting Standards, Interpretations and amendments that have been issued but are not yet effective. Based on a preliminary review of the standards and amendments, the Directors do not anticipate a material change to the Group’s accounting policies, however further analysis will be performed when the relevant standards are effective. NOTE 3: SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES The preparation of the Group’s financial statements in conformity with International Financial Reporting Standards requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates. 32 Akora Resources Annual Report 2021 Notes to the Financial Statements In particular, information about significant areas of estimation uncertainty considered by management in preparing the financial statements is described below. (i) Functional currency NOTE 4: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The functional currency of foreign operations has been determined as Australian dollars. This outcome has resulted from examination of the prevailing facts and circumstances, including the basis on which the entities incur obligations for exploration and evaluation activities and the basis on which the foreign operations are funded. (ii) Exploration and evaluation expenditure The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgment in determining whether it is likely that future economic benefits are likely from future exploitation or sale or where activities have not reached a stage which permits a reasonable assessment of the existence of reserves. The determination of a resource, in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, the JORC Code 2012 Edition, is itself an estimation process that requires varying degrees of uncertainty depending on sub-classification and these estimates directly impact the point of deferral of exploration and evaluation expenditure. The deferral policy requires management to make certain estimates and assumptions about the future events or circumstances, in particular, whether an economically viable extraction operation can be established. Estimates and assumptions made may change if new information becomes available. Significant judgement is required in determining whether it is likely that future economic benefits will be derived from the capitalised exploration and evaluation expenditure. In the judgement of the Directors, at 31 December 2021 exploration activities in each area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. Active and significant operations in relation to each area of interest are continuing and nothing has come to the attention of the Directors to indicate future economic benefits will not be achieved. The Directors are continually monitoring the areas of interest and are exploring alternatives for funding the development of areas of interest when economically recoverable reserves are confirmed. If, after expenditure is capitalised, information becomes available suggesting that the recovery of expenditure is unlikely or exploration activities in the area have ceased, the amount capitalised is written off in Statement of Comprehensive Income in the period when the new information becomes available. The Group’s principal financial instruments comprise of cash and short-term deposits and other financial assets. The main purpose of these financial instruments is to invest funds raised by the Group until utilised in exploration activities. The Group has other financial instruments such as current receivables and payables arising from corporate activities. The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk. The Chief Financial Officer is responsible for the management of the Group’s financial risk. The Chief Financial Officer updates the board of directors regularly on financial risk management measures that he implements. Risk exposures and responses Interest rate risk The Group is exposed to market interest rates on moneys it has deposited with Australian banking institutions in form of short-term deposits. The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk. The Chief Financial Officer is responsible for the management of the Group’s financial risk in consultation with the board of directors. The Chief Financial Officer updates the board of directors regularly on financial risk management measures that he implements. At the end of the financial period, the Group had the following financial assets exposed to Australian variable interest rate risk: 31 DECEMBER 2021 $ 2020 $ Cash and cash equivalents 1,045,851 4,769,912 At the end of the financial period, the Group had no financial liabilities exposed to variable interest rate risks. The Group’s cash management policy is to invest surplus funds at the best available rate received from Westpac Banking Corporation. Akora Resources Annual Report 2021 33 Notes to the Financial Statements NOTE 4: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES CONTINUED Set out below is a sensitivity analysis of the financial implications of interest rate risk exposure as at the end of the financial year. If interest rates had moved, with all other variables constant, profit after tax and equity would have been: The table below sets out the financial impact of the strengthening or weakening of the Australian dollar against the US dollar on a profit after tax and equity basis as at the end of the financial year, with all other variables constant: 31 DECEMBER 2021 $ 2020 $ 31 DECEMBER 2021 $ 2020 $ Profit after tax Higher/(lower) 31,987 (26,171) 42,358 +5% AUD/USD exchange rate (25,415) -5% AUD/USD exchange rate (64,822) 272,408 (93,645) 103,543 Equity Higher/(lower) 31,909 42,327 +5% AUD/USD exchange rate (64,822) (93,645) (26,244) (25,446) -5% AUD/USD exchange rate 272,408 103,543 Profit after tax Higher/(lower) +1% (100 basis points) -1% (100 basis points) Equity Higher/(lower) +1% (100 basis points) -1% (100 basis points) The movement in equity is directly linked to the movement in the Statement of Comprehensive Income as the Group does not undertake any interest rate hedging. Foreign currency risk The Group incurs US dollar denominated consulting and contracting costs on exploration work programmes and transfers US dollars to Madagascar to extinguish day-to-day country costs. At balance date, the obligations outstanding in US dollars are recorded as payables in the Statement of Financial Position. The Group will continue to incur US dollar financial obligations into the future and the Banque Centrale de Malgache has mandated through its regulatory role to limit the number of foreign currencies in which Malagasy entities can conduct business to Euros and US dollars. As at 31 December 2021, the Group had US dollar payables of US$312,764 or A$431,052 (2020: nil). The Group holds its cash balances equally in Australian and US dollars. Commodity price risk Presently, the principal activities of the Group are the exploration and evaluation of ferrous-based minerals in Madagascar and, as at the date of this financial report, does not have any commodity price risk exposure from the production of ferrous-based minerals. Credit risk Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and other receivables. The parent entity invests only in short-term deposits with institutions that have AA /A-1+ with a stable outlook rating. In Madagascar, the Group banks with Banque Malgache de I’Ocean Indien, a banking institution controlled by Banque populaire-Caisse d’esparne. BPCE is rated A+/A-1+ with a stable outlook rating. The Group maintains minimal cash balances in its Malagasy controlled entities. Current receivables are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. Concentration risk The Group does not have any concentration risk. 34 Akora Resources Annual Report 2021 Notes to the Financial Statements NOTE 4: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES CONTINUED Liquidity risk Liquidity risk arises from the financial liabilities of the Group and the ability of the Group to meet these obligations as and when they fall due. The Group does not have any external borrowings; however, the Group will need additional equity funds in order to explore and evaluate its ferrous-based minerals in Madagascar. The maturity analysis of financial assets and financial liabilities is set out below: 0-30 DAYS 31-60 DAYS 61-90 DAYS 91-180 DAYS TOTAL Year ended 31 December 2021 Financial assets Cash and cash equivalents Receivables Other current assets Financial liabilities Payables Other payables Net maturity Year ended 31 December 2020 Financial assets Cash and cash equivalents Receivables Other current assets Financial liabilities Payables Other payables Net maturity Fair values 1,045,851 20,933 2,429 1,069,213 (578,075) - 491,138 4,769,912 31,525 2,326 4,803,763 (256,879) - 4,546,884 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,045,851 20,933 2,429 1,069,213 (578,075) - 491,138 4,769,912 31,525 2,326 4,803,763 (256,879) - 4,546,884 All financial assets and liabilities recognised in the Statement of Financial Position, whether they are carried at cost or fair value, are recognised as amounts that represent a reasonable approximation of fair values unless otherwise stated in the applicable notes. Akora Resources Annual Report 2021 35 Notes to the Financial Statements NOTE 5: SEGMENT REPORTING The group operates solely in the mineral exploration industry and is focused on iron ore exploration. The Group has identified two geographical segments – Australia and Madagascar. All corporate activities, equity raising related activities and project management is conducted in Australia whilst all exploration activities are conducted in Madagascar. FINANCIAL YEAR 2021 AUSTRALIA MADAGASCAR TOTAL 78 - 78 (1,073,485) (88,818) (1,162,303) 107,256 (22,344) (1,077,391) 1,023,320 22,531 1,045,851 20,933 - 3,084 - 2,429 1,728 20,933 2,429 4,812 - 7,215,084 7,215,084 1,047,337 7,241,772 8,289,109 95,629 36,464 132,093 915,244 482,446 14,588 497,034 578,075 51,052 629,127 6,744,738 7,659,982 - - - 3,445,007 3,445,007 - - 3,445,007 3,445,007 Revenue Segment result Unallocated costs Exchange fluctuation Listing costs Net loss after tax Segment assets Cash and cash equivalents Receivables Other Fixed assets Exploration and evaluation Segment liabilities Payables Provisions Net assets Capital expenditure Exploration and evaluation Impairment 36 Akora Resources Annual Report 2021 NOTE 5: SEGMENT REPORTING CONTINUED Revenue Segment result Unallocated costs Exchange fluctuation Listing costs Net loss after tax Segment assets Cash and cash equivalents Receivables Other Fixed assets Exploration and evaluation Segment liabilities Payables Provisions Net assets Capital expenditure Exploration and evaluation Impairment NOTE 6: TOTAL REVENUE AND OTHER INCOME Interest on short-term deposits Notes to the Financial Statements FINANCIAL YEAR 2020 AUSTRALIA MADAGASCAR TOTAL 25 6 31 (776,600) (83,043) (859,643) (134,662) (462,235) (1,456,540) 4,676,805 93,107 4,769,912 31,525 - 7,709 - 2,326 2,483 31,525 2,326 10,192 - 3,770,077 3,770,077 4,716,039 3,867,993 8,584,032 192,876 2,861 195,737 64,003 11,888 75,891 256,879 14,749 271,628 4,520,302 3,792,102 8,312,404 - - - 636,948 636,948 - - 636,948 636,948 31 DECEMBER 2021 $ 2020 $ 78 31 Akora Resources Annual Report 2021 37 Notes to the Financial Statements NOTE 7: INCOME TAX Accounting profit/(loss) 31 DECEMBER 2021 $ 2020 $ (1,077,391) (1,456,540) At the statutory income tax rate applicable to the Company 27.5% (2020: 27.5%) 296,283 400,549 Tax losses for the current year for which no deferred tax asset is recognised Depreciation Exchange fluctuation Listing costs Non-deductible expenditure Provisions Share-based payments Other Income tax (expense)/benefit (194,257) (237,560) (1,510) 29,495 (46,039) (43,147) (9,241) (22,647) (8,937) - (1,320) (37,032) (127,115) - 2,479 - - - Deferred tax assets are recognised for the carry-forward of unused tax losses and unused tax credits to the extent that it is probable taxable profits will be available against which the unused tax losses/credits can be utilised. Deferred tax assets Tax losses Provisions and accruals Other Set-off deferred tax liabilities Net deferred tax assets less Deferred tax assets not recognised Net tax assets Deferred tax liabilities Exploration expenditure Set-off deferred tax assets net deferred tax liabilities Tax losses The tax-effect of unused tax losses for which no deferred tax asset has been recognised that may be utilised to offset tax liabilities: Revenue losses Capital losses 31 DECEMBER 2021 $ 2020 $ 706,388 2,082,467 66,103 304,900 53,041 82,304 1,077,391 2,217,812 - - 1,077,391 2,217,812 (1,077,391) (2,217,812) - - - - - - - - 1,834,119 2,341,251 759,678 1,796,180 2,593,797 4,137,431 The Group reviewed its tax losses in Madagascar and noted that there is a likelihood that exploration and evaluation expenditures under a Research Permit may not be recoverable. 38 Akora Resources Annual Report 2021 Notes to the Financial Statements NOTE 8: LOSS PER SHARE NOTE 12: OTHER CURRENT ASSETS 31 DECEMBER 2021 $ 2020 $ 31 DECEMBER 2021 $ 2020 $ Loss from continuing operations for the year (1,077,391) (1,456,540) Bonds 2,429 2,326 Weighted average number of ordinary shares outstanding during the year used in calculation of basic EPS 60,885,523 38,779,470 Basic and diluted loss per share (cents per share) (1.77) (3.76) As at 31 December 2021 the Group has 10,837,016 unissued shares under options (December 2020: 11,805,750) on issue. The Group does not report diluted earnings per share on losses generated by the Group. During the year, the Group’s unissued shares under option were anti-dilutive. NOTE 9: DIVIDENDS PAID AND PROPOSED No dividends were paid during the financial year and no dividend is proposed to be paid as at the end of the financial year, 31 December 2021. NOTE 10: CASH AND CASH EQUIVALENTS Cash in hand Cash at bank Short-term deposits 31 DECEMBER 2021 $ 2020 $ 36 35 1,045,815 4,758,968 - 10,909 1,045,851 4,769,912 NOTE 11: RECEIVABLES-CURRENT 31 DECEMBER 2021 $ 2020 $ GST input credits 20,933 31,525 Receivables are non-interest bearing and are generally on 30 to 90-day terms. NOTE 13: EXPLORATION AND EVALUATION 31 DECEMBER 2021 $ 2020 $ Balance at start of financial year 3,770,077 3,133,129 Additions 3,420,263 728,906 Exchange fluctuation 24,744 (91,958) At end of financial year 7,215,084 3,770,077 The carrying value of exploration and evaluation expenditure at balance date is represented by the following projects: Ambodilafa Bekisopa Tratramarina Balance at end of financial year 1,922,241 1,423,863 4,757,558 1,379,754 535,285 966,460 7,215,084 3,770,077 Ambodilafa Farm-in Agreement On 22 August 2012, the Company entered into a Farm-in Agreement with Jubilee Platinum plc which entitled the Company to earn a 90% interest in commodities other than platinum group elements, London Metal exchange traded metals and chrome. Under the Farm-in Agreement, the Company will earn its interest in the commodities in three stages: • Stage 1 US$1.0 million expenditure • Stage 2 US$1.0 million expenditure (cumulative) • Stage 3 US$1.0 million expenditure (cumulative) 51% 81% 90% The Company is required to give notice to Jubilee each time it has expended US$1.0 million under the Farm-in Agreement. Jubilee has 30 days from the date of notice to inform the Company whether it wishes to take the unearned interest available to it through jointly funding all future work programmes. If Jubilee does not elect to take the unearned interest, the Company has automatic rights to move to the next stage and earn additional interest in the commodities. Under the Farm-in Agreement the Company will have sole and exclusive rights to explore the Ambodilafa tenements in each stage. Akora Resources Annual Report 2021 39 Notes to the Financial Statements NOTE 13: EXPLORATION AND EVALUATION CONTINUED NOTE 14: PROPERTY PLANT AND EQUIPMENT The Company is required to give notice to Jubilee each time it has expended US$1.0 million under the Farm-in Agreement. Jubilee has 30 days from the date of notice to inform the Company whether it wishes to take the unearned interest available to it through jointly funding all future work programmes. If Jubilee does not elect to take the unearned interest, the Company has automatic rights to move the next stage and earn additional interest in the commodities. Under the Farm-in Agreement the Company will have sole and exclusive rights to explore the Ambodilafa tenements in each stage. Where the Company has earned a 90% interest in the commodities and Jubilee does not elect to take up the unearned interest, the Company has a right to buy-out the unearned interest for $1.5 million through either shares or cash or a royalty or a combination of these methods. As at balance date, 31 December 2021 the Company had earned an 90% equity interest in the Ambodilafa tenements. The Company has advised Jubilee that it would elect to buy-out the residual interest by way of a royalty; however, as at the date of this report the Company and Jubilee have not formalised this arrangement. In October 2017, the Ministry of Mines lifted the moratorium on the renewal, transfer and transformation of existing tenements; however, the progress in addressing the backlog has been slow. Malagasy counsel for the Company has concluded that the renewal and transformation applications submitted to the BCMM for permits held by the Company and confirmed that in each case the application was made in a form, which was acceptable to the BCMM and is deemed to hold beneficial title to these tenements. Accordingly, Malagasy counsel see no evidence, which would suggest that the Ministry of Mines would withhold its approval in respect of the renewal of the permits concerned and at this point in time the company has access to these tenements. The BCMM advised tenement holders that it would not cancel any tenements that renewal fees became in arrears as a result of the failure of the government to grant, renew or transform tenements. The decision by the Company was consistent with other miners and explorers who have demanded the government address the shortcomings of previous administrations. The Company has sighted BCMM approved renewals and transformation of its tenements. The documents are now awaiting ministerial seal which is expected during the course of 2022. All administration fees levied on the tenements held by the Group’s Malagasy entities have been, in full, up to and including 31 December 2021. The value of the Group’s exploration and evaluation expenditure is dependent on the ability of the Company to obtain further funding to enable it to: • continue exploration in the areas of interest; • meet tenement renewal payments to continue to satisfy rights to tenure; and • the recoupment of costs through successful development and exploitation of the areas of interest, or alternatively by their sale. 31 DECEMBER 2021 $ 2020 $ 14,992 - 70 15,062 4,800 5,490 (40) 10,250 12,831 2,726 (565) 14,992 - 4,800 - 4,800 Cost Opening balance Additions Exchange fluctuation Closing balance Accumulated depreciation Opening balance Depreciation Exchange fluctuation Closing balance Net carrying value 4,812 10,192 NOTE 15: PAYABLES-CURRENT Trade payables Other payables 31 DECEMBER 2021 $ 2020 $ 545,575 32,500 227,379 29,500 578,075 256,879 Trade payables are non-interest bearing and are normally settled on 30-day terms. Other payables are also non-interest bearing and have an average term of 30 days. Due to the short-term nature of these payables, the carrying amounts recorded in the financial statements for trade payables. The amount disclosed as Other payables as at 31 December 2021 includes PAYG obligations. NOTE 16: PROVISIONS-CURRENT 31 DECEMBER 2021 $ 2020 $ Annual leave 51,052 14,749 40 Akora Resources Annual Report 2021 Notes to the Financial Statements NUMBER $ 378,339,931 18,832,748 12,752,471 31,830,000 10,796,400 221,893 636,600 269,910 433,718,802 19,961,151 (394,289,820) - 39,428,982 19,961,151 20,000,000 5,000,000 200,000 423,000 50,000 126,900 60,051,982 25,138,051 - (670,608) 60,051,982 24,467,443 984,737 - 295,421 24,034 61,036,719 24,786,898 NOTE 17: CAPITAL (a) Equity At 31 December 2019 Issue of shares Share Placement (previously recorded as other contributed equity) Shares issued to directors in lieu of remuneration for June 2017- June 2019 Shares issued on acquisition of non-controlling interest in IOCM Share consolidation Adjusted share capital IPO shares Shares issued to Harbury Advisory Pty Ltd pursuant to Letter of Engagement for IPO Exercise of options by IPO subscribers Equity raising costs At 31 December 2020 Issue of shares Exercise of options by IPO subscribers Equity raising (costs)/reclassification At 31 December 2021 Ordinary shares Ordinary shares have the rights to receive dividends as declared and, in the event of winding up, participate in the proceeds from the sale of all surplus assets in proportion to the number of, and amounts paid up on, the shares held. Each fully paid ordinary share carries one vote. Ordinary shares issued to shareholders since incorporation have had no par value. Akora Resources Annual Report 2021 41 Notes to the Financial Statements NOTE 17: CAPITAL CONTINUED (b) Options (iii) Current assets to current liabilities ratio The total number of options over ordinary shares on issue at balance date: The current assets to current liabilities as at 31 December 2021 and 31 December 2020 was as follows: 31 DECEMBER 2021 NO. 2020 NO. Unlisted options over ordinary shares Exercisable Escrow Closing balance 8,592,266 9,447,750 2,244,750 2,244,750 10,837,016 11,692,500 Current assets Current liabilities 31 DECEMBER 2021 $ 2020 $ 1,069,213 4,803,763 629,127 271,628 Current assets: current liabilites 1.7 17.69 (c) Capital management Capital management policy (i) NOTE 18: OTHER CONTRIBUTED EQUITY The objectives of the board of directors when managing capital is to ensure that the Group can fund its exploration and corporate activities as a going concern in order to benefit stakeholders. The business of the Group is an early, stage mineral exploration. As a consequence, the Group does not have access to credit facilities and therefore, its primary source of funding is equity raisings. The capital risk management for the Group is to ensure it has sufficient working capital in order to ensure its exploration tenements obligations in Madagascar can be extinguished as and when required and ensure its corporate obligations are minimised. 31 DECEMBER 2021 $ 2020 $ 4,800 221,893 - 4,800 Opening balance Proceeds for share issue received in advance Transfer to share capital (4,800) (221,893) Closing balance - 4,800 (ii) Working capital position The working capital position of the group as at 31 December 2021 and 31 December 2020 was as follows: Other contributed equity relates to monies received from investors for shares have not been issued as at balance date. NOTE 19: TRANSLATION RESERVE 31 DECEMBER 2021 $ 2020 $ Cash and cash equivalents 1,045,851 4,769,912 Trade and other receivables Financial assets 20,933 2,429 31,525 2,326 Trade and other payables (578,075) (256,879) Provisions (51,052) (14,749) 440,086 4,532,135 Balance at start of financial year Translation of foreign currency financial statements into the functional currency Balance at end of financial year 31 DECEMBER 2021 $ 2020 $ (263,684) (161,038) 27,961 (102,646) (235,723) (263,684) 42 Akora Resources Annual Report 2021 Notes to the Financial Statements NOTE 20: SHARE-BASED PAYMENTS (a) Total number of options on issue The Company issued 10,000,000 options pursuant to the terms and conditions of the IPO and 2,244,750 options to Harbury Advisors Pty Ltd under the terms and conditions of the Letter of Engagement. The number of options outstanding as at 31 December 2021 as are follows: GRANT DATE EXPIRY DATE 7 December 2020 7 December 2022 (IPO Options) 7 December 2020 7 December 2022 (Escrow Options) (b) Share-based payments reserve Options Balance at start of financial year Fair value of options over ordinary shares granted pursuant to a Letter of Engagement Balance at end of financial year EXERCISE PRICE OPTION NUMBER $0.3000 8,592,266 $0.3000 2,244,750 10,837,016 31 DECEMBER 2021 $ 2020 $ 268,111 - 268,111 - 268,111 268,111 Pursuant to a Letter of Engagement with Harbury Advisors Pty Ltd, the Company granted Harbury 2,244,750 options over ordinary shares with an exercise price of 30 cents per option over ordinary share and an expiry date two years from the date of the completion of the IPO raising. The fair value of the options over ordinary shares granted to Harbury have been valued using a Black-Scholes methodology: Escrow options Exercise price Term Share price at date of grant Risk-free rate Volatility Model used Value per share Number of options Total value 31 DECEMBER 2021 $ 2020 $ - - - - - - - - - 30 cents 2 years 25 cents 0.25% 100% Black- Scholes 11.94 cents 2,244,750 268,111 Akora Resources Annual Report 2021 43 Notes to the Financial Statements NOTE 20: SHARE-BASED PAYMENTS CONTINUED The weighted average remaining contractual life for the options over ordinary shares outstanding as at 31 December 2021 was 0.94 years (2020: 1.96). The weighted average fair value of options over ordinary shares granted during the financial year was 11.94 cents (2020: 11.94). The following table sets out the number and weighted average exercise prices of, and movements in, options over ordinary shares during the financial year. Balance at the start of financial year 2,244,750 0.1194 - - 31 DECEMBER 2021 31 DECEMBER 2020 NUMBER OF OPTIONS WEIGHTED AVERAGE PRICE NUMBER OF OPTIONS WEIGHTED AVERAGE PRICE Options: Granted Cancelled Expired - - - - - - 2,244,750 0.1194 - - - - Balance at end of the financial year 2,244,750 0.1194 2,244,750 0.1194 The Group has not issued any options over ordinary shares to employees. Performance rights Balance at start of financial year Fair value of performance rights awarded to Chairman pursuant to terms and conditions Balance at end of financial year MH Stirzaker 31 DECEMBER 2021 $ 2020 $ - 82,353 82,353 - - - On 13 April 2021, shareholders approved the award 400,000 performance rights to Mr MH Stirzaker the award milestone being the continuation of employment as a director of the Company for 2 years. Time-based performance rights Consideration Vesting date Number pf performance rights Share price on award date Probability/% Value/$ Amortisation period/24 months Charge 2021 2022 2023 44 Akora Resources Annual Report 2021 31 DECEMBER 2021 $ 2020 $ - 13 April 2023 400,000 $0.38 100% 152,000 24 months 52,762 76,000 21,238 - - - - - - - - - - - - Notes to the Financial Statements NOTE 20: SHARE-BASED PAYMENTS CONTINUED Vert Capital Pty Ltd On 9 September 2021, the Company entered into a Mandate with Vert capital Pty Ltd which awarded Vert performance rights, comprising of two tranches with the first tranche of 400,000 if the V-WAP averaged 60 cents per ordinary for a 30-day period and second tranche of 600,000 if the V-WAP averaged $1.00 per ordinary shares for a 30-day period. The Company valued the performance rights to Vert by applying a Monte Carlo simulation pursuant to AASB 2 Share-based payments for a market-based milestone. The key assumptions included: Market-based performance rights Number pf performance rights Performance milestone/share price Award date Expiry date Share price on award date Probability/% Value/performance right Value/$ 31 DECEMBER 2021 TRANCHE 1 TRANCHE 2 TOTAL 400,000 600,000 1,000,000 $0.60 $1.00 9 Sep 2021 9 Sep 2021 $0.8856 9 Sep 21 9 Sep 2022 9 Sep 2021 9 Sep 22 $0.2250 $0.2250 $0.2250 91% 91% 91% $0.042354 $0.017749 $0.027592 16,941 10,650 27,591 Charge to Statement of Comprehensive Income 2021 16,941 10,650 27,591 On 25 February 2022, the Company and Vert agreed to mutually discontinue the Mandate and accordingly, executed a Deed of Release and the performance rights have been cancelled. Notwithstanding the cancellation of the performance rights awarded to Vert, the Group recorded $27,591 as share-based payments and in accordance with AASB 2 accounted for the performance rights to Vert using a Monte Carlo simulation. NOTE 21: OTHER RESERVES Balance at start of financial year Transaction with non-controlling interest Balance at end of the financial year 31 DECEMBER 2021 $ 2020 $ 26,710 - 26,710 - 26,710 26,710 On 25 July 2020, the Company completed negotiations for the acquisition of the 25% equity interest held by Cline Mining Corporation, an entity incorporated under the laws of the Commonwealth of British Columbia, of Iron Ore Corporation of Madagascar sarl, an entity incorporated in the Republic of Madagascar. Pursuant to the Shareholders Agreement, the Group is required to fund all expenditures by way of loans to Iron Ore Corporation Of Madagascar sarl until the payment of the Second Instalment set out in the Share Sale and Purchase Agreement and assign 25% of the loans made to Cline Mining Corporation. Following the payment of the Second Instalment, both shareholders of IOCM must fund their share of expenditure by way of interest-free loans in proportion to their respective interests in the uncertificated shares of IOCM. The Group extinguished its obligation to pay the Second Instalment on 13 December 2019 and accordingly, Cline was required to fund its share of expenditure from 1 January 2020. Under the Shareholders Agreement if a party fails to fund its share of the Cash Call made by IOCM to fund its expenditure, the non-defaulting shareholder can serve a Notice of Default on the defaulting shareholder and, if the defaulting does not rectify its default within 60 days, the non-defaulting share is entitled to exercise its right to dilute the defaulting shareholder by 50% of each default. Where the defaulting shareholder’s equity interest falls below 5%, the defaulting shareholder is required to assign its equity interest and its shareholder loans to the non-defaulting shareholder for zero consideration and accordingly, will have no rights to any assets or obligation for any liabilities in IOCM. Akora Resources Annual Report 2021 45 Notes to the Financial Statements NOTE 21: OTHER RESERVES CONTINUED Cline had informed the Company that it was not in a position to fund its share of Cash Calls made by IOCM in accordance with the Shareholders Agreement on 13 December 2019 which meant that the Company was continued to fund expenditure for and on behalf of Cline through to completion of the negotiation for the acquisition of the 25% equity interest in IOCM. Fair value of shares issued to Cline for acqusition of 25% equity interest in IOCM Share capital Reserves Accumulated losses Loans contributed by the Company and assigned to Cline pursuant to Share sale and Purchase Agreement Carrying value of non-controlling interest Reserve recognised on transaction with non-controlling interest NOTE 22: ACCUMULATED LOSSES FAIR VALUE $ 108,108 2,552 62,893 (68,091) (2,646) 137,464 134,818 (26,710) Balance at start of the financial year Net loss for the year Balance at end of the financial year 31 DECEMBER 2021 $ 2020 $ (16,190,976) (14,734,436) (1,077,391) (1,456,540) (17,268,367) (16,190,976) NOTE 23: LIST OF CONTROLLED ENTITIES The financial statements include the financial statements of the parent entity and the controlled entities listed in the following table: NAME Malagasy Holdings (Bekisopa) Pty Limited - Iron Ore Corporation of Madagascar sarl Malagasy Holdings (Tratramarina) Pty Limited - Universal Exploration Madagascar sarl % EQUITY INTEREST COUNTRY OF INCORPORATION Australia Madagascar Australia Madagascar 2021 100 100 100 100 2020 100 100 100 100 46 Akora Resources Annual Report 2021 Notes to the Financial Statements NOTE 24: EXPLORATION COMMITMENTS 31 DECEMBER 2021 $ 2020 $ 400,000 314,676 Exploration annual administration fees Payable: no later than 1 year 80,000 69,928 between 1 year and 5 years 320,000 244,748 greater than 5 years - - 400,000 314,676 Exploration and evaluation expenditure commitments Under 99-022 Mining Code (portant Code minier), the Group does not have any expenditure commitments on its tenements other than the annual renewal fees (frais d’administration annuel) which are payable to the Madagascar Mining Cadastre Bureau (Bureau du Cadastre Minier de Madagascar). The annual renewal fees for Ambodilafa tenements, held by Mineral Resources of Madagascar sarl, an entity controlled by Jubilee Platinum plc, are approximately $25,000 for the 2021 renewal period. Mineral Resources of Madagascar sarl is the entity through which the Company has earned its 90% equity interest in the Commodities discovered on the Ambodilafa tenements. The Company also holds reversal rights whereby it can earn up to 49% of LME Commodities discovered on the Ambodilafa tenements through contributing to expenditure. NOTE 25: FINANCIAL OBLIGATIONS OF THE COMPANY AND ITS CONTROLLED ENTITIES The Company Ambodilafa tenements On 22 August 2012, the Company entered into a Farm-in Agreement with Jubilee Platinum plc which entitled the Company to earn a 90% interest in commodities other than platinum group elements, London Metal exchange traded metals and chrome. Under the Farm-in Agreement, the Company will earn its interest in the commodities in three stages: • Stage 1 US$1.0 million expenditure • Stage 2 US$1.0 million expenditure (cumulative) • Stage 3 US$1.0 million expenditure (cumulative) 51% 81% 90% The Company is required to give notice to Jubilee each time it has expended US$1.0 million under the Farm-in Agreement. Jubilee has 30 days from the date of notice to inform the Company whether it wishes to take the unearned interest available to it through jointly funding all future work programmes. If Jubilee does not elect to take the unearned interest, the Company has automatic rights to move the next stage and earn additional interest in the commodities. Under the Farm-in Agreement the Company will have sole and exclusive rights to explore the Ambodilafa tenements in each stage. Where the Company has earned a 90% interest in the commodities and Jubilee does not elect to take up the unearned interest, the Company has a right to buy-out the unearned interest for $1.5 million through either shares or cash or a royalty or a combination of these methods. As at balance date, 31 December 2021 the Company had earned an 90% equity interest in the Ambodilafa tenements. The Company has advised Jubilee that it would elect to buy-out the residual interest by way of a royalty; however, as at the date of this report the Company and Jubilee have not formalised this arrangement. Bekisopa tenements On 16 June 2014, the Company acquired Iron Ore Corporation of Madagascar sarl pursuant to a Share Sale and Purchase Agreement and the simultaneous execution of a Shareholders Agreement with Cline Mining Corporation. Under the terms and conditions of the Share Sale and Purchase Agreement, the Company paid Cline US$25,000 on execution of the above- mentioned agreement and agreed to pay, on 17 June 2014, a further US$175,000. In addition, the Company agreed to pay outstanding annual administration fee (frais d’administration annuel) to the Bureau of Cadastre Mines of Madagascar (Bureau du Cadastre Minier de Madagascar or BCMM) as well as settling outstanding liabilities in Madagascar. On 27 October 2016, the Company renegotiated its obligations (principal excluding interest and penalties) due to Cline Mining Corporation for the Bekisopa DSO project. Under the revised terms the Company has move its outstanding obligations from June 2017 to June 2018 on the issue of US$50,000 in shares in the Company on its listing and an option to extend the outstanding obligation to December 2018 for a further US$25,000 in shares. On 13 December 2019, the Company extinguished its obligation to Cline under the Share Sale and Purchase Agreement with the payment of A$253,478. Further, on 25 July 2020 the Company agreed with Cline to acquire its remaining 25% equity interest in IOCM as well as convert its rights to fully paid ordinary shares under the Deeds of Variation at a price of 2.5 cents per fully paid ordinary shares. Akora Resources Annual Report 2021 47 Notes to the Financial Statements Universal Exploration Madagascar sarl On 23 June 2011, Universal Exploration Madagascar sarl (UEM) acquired two Reserved Licences for Small Mining Developers (du Permis Reserve Aux Petits Exploitants ou Permis) prospective for magnetite (the Tratramarina West tenements) by paying US$200,000 and agreeing to pay, on the election of UEM, US$250,000 (First Option) and US$350,000 (Second Option) in 2012 and 2013, respectively, if UEM sarl elects to continue to explore and expend monies on the permits. In addition, if Universal Exploration Madagascar sarl undertakes a Mine Development that incorporates magnetite ore sourced from the Tratramarina West tenements, a royalty of 0.35% will be paid on the net sales revenue generated on magnetite concentrate produced from the Tratramarina West prospects. The Tratramarina West tenements are adjacent to the Tratramarina East. The parent entity exercised the First Option during the course of the financial year and exercised the Second Option on 26 February 2013. Following the exercise of the Second Option, the outstanding obligation of UEM under the Mining Permit Sale Agreement is a royalty equal to 0.35% of net sales revenue. NOTE 26: EVENTS AFTER BALANCE DATE As at the date of this report, 470,646 options have been exercised by subscribers to the IPO since balance date. In total, the Company $141,194 has received from the exercise of options. On 24 March 2022, the Company released its Maiden JORC Resource arising from its drilling programme at the Bekisopa project. The Inferred Resource for the Northern and central Zones totalled 84.5 Mt at a concentrate grade of 67.6% Fe with DTR at 39.9%. The Company also announced that it had an Exploration Target of 50-100Mt at the Southern Zone with a concentrate grade of 67-69% and DTR at 30-45%. [Cautionary Statement: The board of directors wish to inform shareholders that an Exploration Target is conceptual in nature and accordingly, there has not been sufficient exploration to estimate a Mineral Resource and that further exploration will result in an estimation of a Mineral Resource.} On 31 March 2022, the Company request and received permission from Australian Securities Exchange to enter a Trading Halt until 4 April 2022 pending an announcement on a capital raise. NOTE 27: RELATED PARTY DISCLOSURE Directors The directors of the parent entity during the financial year and the prior period were: PG Bibby SL Fabian (resigned 31 October 2021) JM Madden MH Stirzaker NOTE 28: CASH FLOW STATEMENT RECONCILIATION 31 DECEMBER 2021 $ 2020 $ (1,077,391) (1,456,540) Net loss after tax Adjusted for: Depreciation Exchange fluctuation 5,490 4,800 Finance costs Provisions Share-based payments Changes in other current assets and current liabilities: Current assets Receivables Other Current liabilities Payables (107,256) 134,662 - 33,603 82,353 - (9,013) 636,601 10,592 (102) (17,106) - (70,943) (1,123,654) (471,521) (1,178,117) NOTE 29: KEY MANAGEMENT PERSONNEL Details of key management personnel Chief Executive officer and Managing Director PG Bibby Chief Financial Officer and Company Secretary JM Madden Non-executive directors MH Stirzaker SL Fabian (resigned 31 October 2021) Compensation of key management personnel Compensation paid to key management personnel is as follows: 31 DECEMBER 2021 $ 2020 $ Short-term employee benefits 502,850 485,864 Post-employment benefits 45,900 30,303 Other long-term benefits Share-based payments - 54,762 603,512 - - 516,167 48 Akora Resources Annual Report 2021 Notes to the Financial Statements There were no other transactions with Key Management Personnel or their related parties as 31 December 2020 and 2021. The Group has classified part of the remuneration paid to the Managing Director as exploration and evaluation expenditure. NOTE 30: PARENT ENTITY The following table sets out selective financial information relating to AKORA Resources Limited the parent entity of the Group: Current assets Financial assets Total assets Current liabilities 31 DECEMBER 2021 $ 2020 $ 1,044,312 4,708,324 7,227,928 3,799,817 8,272,240 8,508,141 612,258 195,737 NOTE 31: AUDITOR’S REMUNERATION Amounts paid or due for payable to Hall Chadwick Audit or review of the financial report Half-year review Other services 31 DECEMBER 2021 $ 2020 $ 32,500 30,000 17,500 - 50,000 14,000 20,760 64,760 NOTE 32: CONTINGENT LIABILITIES The Company has no contingent liabilities, other than that disclosed in Note 25. Non-current liabilities - - NOTE 33: COMPANY DETAILS Total liabilities Net assets 612,258 195,737 The registered office and principal place of the Company is: 7,659,982 8,312,404 211 McIlwraith Street, Princes Hill, Victoria Australia Issued and paid-up capital 24,786,897 24,463,443 Telephone: +61 (0)3 9381 0859 Other contributed equity Reserves 322,873 4,800 268,111 Website: www.akoravy.com E-mail: info@akoravy.com Accumulated losses (17,449,788) (16,423,950) Financial assets Shares in controlled entities 1,046,112 1,046,112 Loans to controlled entities 6,181,816 2,753,705 Carrying value 7,227,928 3,799,817 Financial performance Loss for year (994,939) (818,771) Other comprehensive income/ (loss) - - Total comprehensive loss (994,939) (818,771) Guarantees entered into by the parent entity for debts of controlled entities Nil Nil Akora Resources Annual Report 2021 49 Directors’ Declaration Directors’ Declaration ACN 139 847 555 In accordance with a resolution of the board of directors of Akora Resources Limited, I state that: In the opinion of the board of directors: (a) financial statements, the accompanying notes to the financial statements and the additional disclosures set out in the Directors’ Report are in accordance with the Corporations Act 2001, including: (i) (ii) giving a true and fair view of the Company’s financial position as at 31 December 2021 and of their performance for the period ended on that date; and complying with Australian Accounting Standards (including Australian Accounting Interpretations) and Corporations Regulations 2001; (b) (c) the financial statements and notes also comply with International Financial Reporting Standards as issued by the International Accounting Standard Board, as disclosed in Note 2(a); 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. Signed on behalf of the Board of Directors MH Stirzaker Chairman 31 March 2022 211 McIlwraith Street North Carlton Victoria, Australia 3054 p: +61 3 9381 0859 e: info@akoravy.com 50 Akora Resources Annual Report 2021 Independent Auditor's Report Independent Auditor’s Report Akora Resources Annual Report 2021 51 Independent Auditor's Report Material Uncertainty Related to Going Concern We draw attention to Note 2(a) in the financial report which indicates that the Consolidated Entity incurred a net loss of $1,077,391 during the year ended 31 December 2021. As stated in Note 2(a), these events or conditions, along with other matters as set forth in Note 2(a), indicate that a material uncertainty exists that may cast significant doubt on the Consolidated Entity’s ability to continue as a going concern. Our opinion is not modified in this respect of this matter. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key Audit Matter How our audit addressed the Key Audit Matter Exploration and evaluation Our procedures included, amongst others: As at balance date the Consolidated Entity had an exploration balance of $7,215,084. Exploration and evaluation is a key audit matter due to: • • The significance of the balance to the Consolidated Entity’s financial position. The level of judgement required in evaluating management’s application of the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources (“AASB 6”). AASB 6 is an industry specific accounting standard requiring the application of significant judgements, estimates and industry knowledge. This includes specific requirements for expenditure to be capitalised as an asset and subsequent requirements which must be complied with for capitalised expenditure to continue to be carried as an asset. • The assessment of impairment of exploration and evaluation expenditure being inherently difficult. • Assessing management’s determination of its areas of interest for consistency with the definition in AASB 6. This involved analysing the tenements in which the consolidated entity holds an interest and the exploration programmes planned for those tenements. • For each area of interest, we assessed the Consolidated Entity’s rights to tenure by corroborating to government registries and evaluating agreements in place with other parties as applicable; • We tested the exploration and evaluation expenditure incurred during the year by evaluating a sample of recorded expenditure for consistency to underlying records, the capitalisation requirements of the Consolidated Entity’s accounting policy and the requirements of AASB 6; • We considered the activities in each area of interest to date and assessed the planned future activities for each area of interest by evaluating budgets. • We assessed each area of interest for one or more of the following circumstances that may indicate impairment of the capitalised expenditure: - the licenses for the right to explore expiring in the near future or are not expected to be renewed; 52 Akora Resources Annual Report 2021 Independent Auditor's Report Key Audit Matter How our audit addressed the Key Audit Matter - - - substantive expenditure for further exploration in the specific area is neither budgeted or planned decision or intent by the Consolidated Entity to discontinue activities in the specific area of interest due to lack of commercially viable quantities of resources; and data indicating that, although a development in the specific area is likely to proceed, the carrying amount of the exploration asset is unlikely to be recovered in full from successful development or sale. • We assessed the appropriateness of the related disclosures in Note 13 to the financial statements. Other Information The directors are responsible for the other information. The other information comprises the information included in the Consolidated Entity’s annual report for the year ended 31 December 2021, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 2(a), the directors also state in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report complies with International Financial Reporting Standards. Akora Resources Annual Report 2021 53 Independent Auditor's Report In preparing the financial report, the directors are responsible for assessing the Consolidated Entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Consolidated Entity or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Consolidated Entity’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Consolidated Entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Consolidated Entity to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. 54 Akora Resources Annual Report 2021 Independent Auditor's Report • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Consolidated Entity to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Consolidated Entity audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 31 December 2021. The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with s 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. Auditor’s Opinion In our opinion, the Remuneration Report of AKORA Resources Limited, for the year ended 31 December 2021, complies with section 300A of the Corporations Act 2001. HALL CHADWICK WA AUDIT PTY LTD DOUG BELL CA Director Dated this 31st day of March 2022 Perth, Western Australia Akora Resources Annual Report 2021 55 ASX Information 56 Akora Resources Annual Report 2021 DISTRIBUTION OF SHAREHOLDINGS AS AT 24 MARCH 2022 RANGE 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over UNITS 6,873 462,855 851,650 8,781,608 51,404,382 % UNITS 0.01% 0.75% 1.38% 14.28% 83.57% Rounding Total 61,507,368 100 UNMARKETABLE PARCELS MINIMUM PARCEL HOLDERS UNITS Unmarketable Parcels @ 38 cents 1,316 6,873 22 VOTING RIGHTS The voting rights attached to each class of equity security are as follows: Ordinary shares Each ordinary share is entitled to one vote when a poll is called, otherwise each member presentmeeting or by proxy has oone vote on a show of hands. COMPANY SECRETARY The name of the Company Secretary is John Madden. PRINCIPAL REGISTERED OFFICE As disclosed in Note 33 Company Details of the Annual Report. Registers of securities ate held at the following address Link Market Services Tower 4, 727 Collins Street Melbourne Victoria Australia 6000 Telephone: 1300 554 474 ASX Information TOP TWENTY SHAREHOLDERS AS AT 24 MARCH 2022 RANK NAME NUMBER % 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED TRAVIS ANDERSON JOHN CHARLES TUMAZOS NICHOLAS JOHN AXAM HSBC GLOBAL CUSTODY NOMINEES UK LIMITED EVANACHAN LIMITED ALEX JORDAN PAUL GERARD BIBBY MRS SONIA SHARMA CLINE MINING CORPORATION STEPHEN LESLIE FABIAN MICHAEL FRANCIS & MARYANNE FRANCIS DAVID YONAN JOHN MICHAEL MADDEN CAITHNESS RESOURCES PTY LTD RUSSELL NEIL CREAGH DALESAM PTY LTD MA BAYRAM LLAMAS & EL GARCIA BAYRAM CITICORP NOMINEES PTY LIMITED 20 ALAN KENNETH MERCER Top 20 Option holders Remaining option holders Total number of options on issue 10,534,827 3,473,855 3,353,486 3,173,517 2,732,743 1,811,628 1,744,834 1,586,278 1,107,069 981,492 893,636 750,000 687,197 662,344 633,260 630,000 630,000 583,911 542,987 524,017 17.13% 5.65% 5.45% 5.16% 4.44% 2.95% 2.84% 2.58% 1.80% 1.60% 1.45% 1.22% 1.12% 1.08% 1.03% 1.02% 1.02% 0.95% 0.88% 0.85% 37,037,081 24,470,287 61,507,368 60.22% 39.78% 100.00% Akora Resources Annual Report 2021 57 ASX Information TOP TWENTY OPTION HOLDERS AS AT 24 MARCH 2022 RANK NAME NUMBER % HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 1,900,000 481,000 400,000 400,000 300,000 288,000 250,000 200,000 200,000 197,375 197,375 180,000 174,000 174,000 136,000 130,000 100,000 100,000 90,000 80,000 80,000 18.33% 4.64% 3.86% 3.86% 2.89% 2.78% 2.41% 1.93% 1.93% 1.90% 1.90% 1.74% 1.68% 1.68% 1.31% 1.25% 0.96% 0.96% 0.87% 0.77% 0.77% 6,057,750 4,308,620 10,366,370 58.44% 41.56% 100.00% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 MR TRAVIS ANDERSON HAMISH MCCATHIE CANARY CAPITAL PTY LTD KLIP PTY LTD MR JOHN CHARLES TUMAZOS NATISONE PTY LTD MR PAUL BRYAN MR TOM BLEAKLEY RUPERT FRANCIS CHAMPION DE CRESPIGNY HARBURY ADVISORS PTY LTD SIZZ PTY LTD MR MARCO GIUSTINO LONGO ATLANTIS MG PTY LTD MR ED PENNOCK NETWEALTH INVESTMENTS LIMITED VERT NOMINEES (WA) PTY LTD FCG NOMINEES PTY LTD MS CHUNYAN NIU 20 MR PAUL HOVAGIMIAN NETWEALTH INVESTMENTS LIMITED Top 20 option holders Remaining option holders Total number of options on issue 58 Akora Resources Annual Report 2021 TENEMENT HOLDING IN MADAGASCAR TENEMENT NUMBER NAME ADMINI- STRATION FEES PAID BLOCKS HOLDER Bekisopa PR Bekisopa PR Bekisopa PR Bekisopa PRE Samelahy PR Samelahy PR Samelahy PR GRANT DATE 4/3/04 16/10/07 23/1/07 26/3/01 20/5/03 15/10/04 23/9/05 Tratramarina East PR 23/9/05 Tratramarina East PR 23/9/05 Tratramarina East PR 10/11/05 Tratramarina West PRE 11/1/06 10340 27211 35827 3757 6595 13011 21910 16635 16637 17245 18379 31/12/21 31/12/21 31/12/21 31/12/21 31/12/21 31/12/21 31/12/21 31/12/21 31/12/21 31/12/21 31/12/21 64 128 32 16 190 207 60 144 48 160 16 18891 Tratramarina West PRE 18/11/05 31/12/21 48 Iron Ore Corporation Madagascar sarl Iron Ore Corporation Madagascar sarl Iron Ore Corporation Madagascar sarl Randriamananjara (Acquired under Sale & Purchase Agreement) Mineral Resources Madagascar sarl Mineral Resources Madagascar sarl Mineral Resources Madagascar sarl Universal Exploration Madagascar sarl Universal Exploration Madagascar sarl Universal Exploration Madagascar sarl Rakotoarisoa (Acquired under Sale & Purchase Agreement) Rakotoarisoa (Acquired under Sale & Purchase Agreement) ASX Information EQUITY 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Notes 1. PR means Permis du Recherche 2. PRE means Permis Reserve aux Petits Exploitants 3. The Company has paid the Bureau du Cadastre de Minier Madagascar all fraise d’administration annuel (annual administration fees) up to and include 2021 from the date of original grant Malagasy administrative law provides that where a private party has complied with its obligations in good faith and the State (BCMM and Ministere du Miner) has not completed their administrative responsibilities, the private party may rely on its existing rights and there is an assumption that these will continue to subsist in the absence of justified refusal. Akora Resources Annual Report 2021 59 Corporate Directory DIRECTORS MH Stirzaker Non-Executive Chairman PG Bibby Managing Director and Chief Executive Officer SL Fabian Non-Executive Director (resigned 31 October 2021) JM Madden Executive Director and Company Secretary COMPANY SECRETARY JM Madden REGISTERED OFFICE 211 McIlwraith Street Princes Hill Victoria 3054 Telephone: 61-3-381 0859 Website: www.akoravy.com Postal address PO Box 337, Carlton North Victoria 3054 SHARE REGISTRY Link Market Services Tower 4, 727 Collins Street Melbourne Victoria Australia Telephone: 1300 554 474 CORPORATE ADVISOR Harbury Advisors Pty Ltd Level 3, 157 Collins Street Melbourne Victoria Austalia AUDITOR Hall Chadwick 283 Rokeby Road Subiaco WA Australia SOLICITORS Dentons Australia Level 17, 585 Collins Street Melbourne Victoria Australia 60 Akora Resources Annual Report 2021