Agrimin Limited
www.agrimin.com.au
ANNUAL REPORT
2020
agrimin
AGRIMIN LIMITED ANNUAL REPORT 2020 TABLE OF CONTENTS
Chairperson’s letter
Review of operations
3
4
Environmental, social and governance 12
Directors’ report
Remuneration report
Auditor’s independence declaration
Financial report
Independent auditor’s report
Shareholder’s information
18
23
30
32
65
70
AGRIMIN LIMITED / ABN 15 122 162 396
CORPORATE DIRECTORY
DIRECTORS
Richard Seville
Non-Executive Chairperson
Mark Savich
Chief Executive Officer (CEO)
and Executive Director
Brad Sampson
Non-Executive Director
Alec Pismiris
Non-Executive Director
and Company Secretary
REGISTERED OFFICE AND PLACE OF BUSINESS
2C Loch Street
Nedlands, Western Australia, 6009
Telephone: +61 8 9389 5363
AUDITORS
Ernst & Young
11 Mounts Bay Road
Perth, Western Australia, 6000
SHARE REGISTER
Automic Registry Services
Level 2, 267 St Georges Terrace
Perth, Western Australia, 6000
Investor enquiries: 1300 288 664
WEBSITE
www.agrimin.com.au
STOCK EXCHANGE LISTING
Agrimin Limited shares are listed on the Australian Securities
Exchange (ASX: AMN)
OUR VISION
Agrimin’s vision is to establish the Mackay Potash Project as the world’s
leading seaborne supplier of Sulphate of Potash (SOP) fertiliser, to develop the
Project with sustainability principles at its core and to empower local Indigenous
communities throughout the Project’s long life.
HIGHLIGHTS
Significant work was undertaken during the financial year to advance our flagship Mackay Potash
Project and we were delighted to release the outstanding economic results of our Definitive Feasibility
Study in July 2020.
The highlights of the study outcomes are shown in the below infographic.
CHAIRPERSON’S LETTER
Dear Shareholders,
It is a pleasure to update you on what has been a very busy year for our Company
and, in particular, the progress we have made on our world-class Mackay Potash
Project as we advance toward development.
Our vision is to establish the Mackay Potash Project as the world’s leading
seaborne supplier of Sulphate of Potash fertiliser, developed with sustainability
principles at its core and to empower local Indigenous communities throughout
the Project’s long life.
Our Company made a major step toward this vision with the completion of the
Definitive Feasibility Study in July 2020. The study embodied our objective of
setting a new industry benchmark regarding the level of fieldwork and engineering
and involved the successful completion of over two years of trench pumping and
pilot evaporation trials.
The Definitive Feasibility Study clearly shows the Project can become the lowest
cost seaborne supplier of Sulphate of Potash fertiliser globally with the project
economics enhanced by a very low capital intensity. All facets of the Project
are scalable, offering the potential to expand production over time to meet the
expected growth in seaborne demand for Sulphate of Potash. It is because of
this, amongst other reasons, that the Mackay Potash Project is attracting the
attention of some of the world’s largest fertiliser companies.
Since acquiring the Mackay Potash Project in 2014, history demonstrates our
commitment to being a progressive resources company and embracing an ESG-
friendly development approach. This is exemplified by six years of positive
stakeholder engagement, employee retention, leading environmental work and
an industry best renewable energy target. We are delighted that our Sulphate of
Potash production is set to have one of the lowest carbon footprints associated
with any major macro-nutrient fertiliser product. Additionally, our Company
will deliver hugely important economic development into remote communities
through Indigenous employment, training and job readiness programs.
During the year, the Mackay Potash Project was awarded Major Project Status
by the Australian Federal Government which acknowledges the national
significance of our Project and the very important impacts we seek to make.
In summary, exceptional economic returns and long-term technical de-risking
activities have provided the platform to now advance the funding and product
marketing phase with confidence. During this next phase of the Mackay Potash
Project, we remain steadfast in our commitment to maximising the value created
for all stakeholders.
Along with the Agrimin team, I wish to acknowledge and thank the Kiwirrkurra
People, as well as the Ngururrpa People and Tjurabalan People, who have
continued to support our Company and have contributed positively to the Project
over the past year. We look forward to the future alongside them.
Finally, I would like to thank our CEO Mark Savich and his team for their
commitment and persistence in striving for excellence in all areas of the
development of this truly world-class fertiliser asset, as well as our shareholders
for their ongoing support and belief in our vision.
Richard Seville
Chairperson
September 2020
REVIEW OF OPERATIONS
REVIEW OF OPERATIONS
MACKAY POTASH PROJECT
(100% INTEREST)
The Mackay Potash Project (the Project) is located in Western
Australia and situated on Lake Mackay, approximately 785
kilometres south of Wyndham Port. The Project comprises nine
granted Exploration Licences covering an area of 3,057 square
kilometres in Western Australia and three Exploration Licence
applications covering an area of 1,240 square kilometres in the
Northern Territory.
The closest community is Kiwirrkurra which is approximately
60 kilometres south-west of Lake Mackay. In November 2017,
Agrimin signed a Native Title Agreement with Tjamu Tjamu
(Aboriginal Corporation) RNTBC, the native title registered body
corporate for the Kiwirrkurra native title holders. The agreement
provides the necessary consents for the Project’s development
and operations within the Kiwirrkurra native title determination
area.
Lake Mackay covers an area of approximately 3,500 square
kilometres and hosts the largest undeveloped Sulphate of
Potash (SOP) bearing salt lake in the world. In surface area the
salt lake is comparable to the two major sources of primary SOP
production, being the 4,400 square kilometres Great Salt Lake
in the USA and the 5,500 square kilometres Lop Nur (Luobupo
operation) in China.
The brine, or hypersaline groundwater, within the lake contains
dissolved potassium and sulphate which can produce high-
grade, water-soluble SOP fertiliser. SOP has a low salt index
and is virtually chloride-free, making it critical for high value crops
such as fruit and vegetables.
Agrimin’s planned SOP production can play a critical role in
improving crop yields for farmers, particularly in the developing
countries of South and Southeast Asia. The market for SOP
is experiencing strong demand growth, driven in part by rising
middle class populations who are consuming increasing amounts
of fruit and vegetables.
Figure 1: Map of Agrimin’s Projects
Agrimin Limited Annual Report 2020
5
REVIEW OF OPERATIONS
DEFINITIVE FEASIBILITY STUDY
During the year, the Company continued to progress the Definitive
Feasibility Study (DFS) for the Project and announced the results
to the ASX on 21 July 2020. The DFS was completed by an
integrated owners team supported by best-in-class consultants
and contractors providing expertise across the various study
disciplines. The DFS was prepared to an AACE Class 3 standard
and has a -15% to +20% level of accuracy.
The DFS is based on the sustainable extraction of brine from
Lake Mackay and the use of energy efficient solar evaporation
ponds to produce raw potash salts for the production of finished
SOP fertiliser products. The SOP will be hauled in road trains
to Wyndham Port for shipment to domestic and international
markets.
The DFS has assessed the economics of a steady-state
production rate of 450,000 tonnes per annum (tpa) of SOP for a
40 year mine life. The DFS incorporates certain design changes
from the Pre-Feasibility Study (PFS), including:
• An increased SOP production rate of 450,000tpa for a 40
year mine life;
• Removal of the proposed gas pipeline and inclusion of
renewable power generation, including the use of both wind
and solar energy to lower the Project’s carbon footprint;
•
Inclusion of additional off-site logistics infrastructure, including
the construction of a sealed haul road and a shiploading
facility at Wyndham Port to create a dedicated mine-to-ship
logistics chain. The sealed road will provide strategic long-
term supply chain benefit for the Project and the broader
region; and
• Product haulage to be considered a core operating function
and delivered by a strategic joint venture with an expert partner
using energy saving purpose-built trucking equipment. The
haulage operating plan is also aimed at maximising training
and employment for local people.
The DFS demonstrates that the Project can have the world’s
lowest operating costs for SOP production, at a globally significant
production rate and over a long initial mine life. The Project’s
strong economic returns and premium SOP product quality are
expected to facilitate the finalisation of off-take agreements and
project funding on favourable terms.
Agrimin is committed to developing the Mackay Potash Project
sustainably and in alignment with the United Nations Sustainable
Development Goals. The Company’s commitment is embodied
throughout the DFS and has been demonstrated through six
years of positive stakeholder engagement with local communities,
government agencies, special interest groups and the national
mainstream media. The Company has also completed an
extensive range of baseline environmental surveys in order to
obtain data across the Project area and immediate surroundings.
The Project’s power supply is designed to be generated utilising
a hybrid gas, solar, wind and battery solution for a modelled
renewables penetration of 58%. The Project is estimated to have
scope 1 and 2 emissions of approximately 71,000tpa of carbon
dioxide equivalent emissions (CO2-e). The proposed use of
wind and solar energy is expected to avoid 39,000tpa of CO2-e,
compared to a fully gas-fired power station.
Agrimin’s SOP fertiliser product will have very low emissions of
158 kilograms of CO2-e per tonne of SOP, inclusive of product
transport and shiploading. This is one of the lowest carbon
footprints of any of the major macro-nutrient fertiliser products
produced globally.
During the DFS, the Company completed extensive pilot testing
which produced premium quality SOP product specifications
grading >53% K2O. The Project’s SOP will be high-grade, water-
soluble and organic at the lowest production cost worldwide. The
Project also offers excellent potential to expand production over
time to meet the expected growth in seaborne demand for SOP.
The total cash cost for the project is estimated at US$159/t FOB
Wyndham Port which positions the Project as potentially the
lowest cost producer of SOP globally. The pre-production capital
cost for the Project is estimated at US$415 million, with a very
low capital intensity of only US$922 per annual tonne of SOP
production.
The Project’s development as contemplated
the DFS
encompasses a strategic mine-to-ship logistics chain to ensure it
remains scalable and successful over its multi-decade life. This
includes the development of dedicated haul road and shiploading
infrastructure.
in
6
Agrimin Limited Annual Report 2020
During the year, Agrimin signed a Haulage Joint Venture
Agreement with Newhaul Pty Ltd. Under the agreement, Agrimin
and Newhaul Pty Ltd have formed a 50:50 incorporated joint
venture named Newhaul Bulk Pty Ltd which will provide road
haulage and road maintenance services for the Project. Mr Craig
Mitchell, an experienced WA bulk logistics operator, has been
appointed CEO of the joint venture.
During the year, Agrimin also signed a binding Memorandum
of Understanding with Transhipment Services Australia Pty Ltd
(TSA) for the provision of barge loading services for the Project.
TSA has been appointed to design a cost-effective and fit-for-
purpose shiploading solution which will be fully integrated with
Agrimin’s planned storage facility at Wyndham Port. Established
in 2010, TSA is one of Australia’s leading and most experienced
transhipment service providers.
The Wyndham Port storage and barge loading facility has been
designed to provide a bulk shiploading solution that is specifically
tailored for the Company’s SOP and will support a range of cargo
sizes. The Company continues to progress product marketing
initiatives and will incorporate the most cost-effective logistics
chain based on the variety of SOP products and delivery types
that are being requested by customers.
REVIEW OF OPERATIONS
NEXT STEPS
Based on the highly attractive economic returns and robust
technical feasibility demonstrated by the DFS, as well as strong
stakeholder support, the Project has now advanced to the
financing, permitting and product marketing phase.
The following key activities are the Company’s current focus:
• Off-take agreements;
• Project funding and strategic partnerships;
• Front End Engineering and Design (FEED) and associated
work programs;
• Execution planning and contracting;
• Environmental approvals; and
• Mining tenements and secondary approvals.
The Mackay Potash Project is attracting attention from some of
the world’s largest fertiliser companies which are interested to
participate in the Project’s development and product marketing.
Agrimin has produced and distributed product samples to
potential customers and strategic partners who have confirmed
the Project’s premium SOP product quality will compete strongly
against existing products in the market. In addition to discussions
with potential strategic partners and traditional financiers,
the Northern Australia Infrastructure Facility has continued to
express its interest to potentially provide concessional longer
term debt finance for the Project.
Impact Assessment
Agrimin is well advanced in the permitting process and a formal
Environmental
is currently underway.
The overall permitting process for the Project is expected to
be finalised in mid-2021. In May 2020, the Australian Federal
Government awarded Major Project Status to the Mackay
Potash Project which provides additional assistance to Agrimin
for the facilitation of Federal government approvals such as
environmental and foreign investment approvals.
Construction is planned to commence upon the completion
of permitting and project funding. A program of early works is
planned to occur in the six months prior to construction and will
focus on site preparation and the procurement of time-critical
equipment for construction of the brine extraction trenches and
solar evaporation ponds. First SOP production is expected
approximately 2.5 years after the commencement of construction.
Agrimin Limited Annual Report 2020
7
COMMUNITY
title determination area. The Company values
The Mackay Potash Project is located within the Kiwirrkurra
its
native
relationship with the Kiwirrkurra native title holders and is
committed to maintaining an enduring partnership to ensure
the Project’s development can bring many benefits to the local
community. The Company’s consultations with local members of
the Kiwirrkurra community indicate strong support for a potash
operation and there is a high degree of interest in the range of
opportunities the operation would create. The Mackay Potash
Project has the potential to be one of the largest employers in the
area and to provide substantial long-term benefits.
During the year, the Company also progressed native title
consultations with respect to obtaining land access agreements
for a proposed haul road corridor which passes through
three native title determination areas, including Tjamu Tjamu
(Aboriginal Corporation) RNTBC, Parna Ngururrpa (Aboriginal
Corporation) RNTBC and Tjurabalan Native Title Land Aboriginal
Corporation RNTBC.
During the year, the Company’s native title consultations with
the Martu native title holders in relation to the Lake Auld Potash
Project were placed on hold due to the COVID-19 pandemic.
REVIEW OF OPERATIONS
LAKE AULD POTASH PROJECT
(100% INTEREST)
During the year, the Company acquired a 100% interest in the
Lake Auld Potash Project, located approximately 640 kilometres
south-east of Port Hedland, Western Australia. The project
consists of a granted Exploration Licence covering a lakebed
area of 108 square kilometres across Lake Auld. The Exploration
Licence is subject to an existing Land Access and Mineral
Exploration Agreement with the Western Desert Lands Aboriginal
Corporation (Jamukurnu-Yapalikunu) RNTBC (WDLAC), the
Native Title representative body for the Martu people.
Lake Auld’s exceptionally high grades, favourable climatic
conditions for solar evaporation and proximity to a major
operating port support the potential for strong project economics.
The Company has commenced a Concept Study for the project.
The Company also holds an additional four Exploration Licence
applications which cover the broader Canning Palaeovalley,
including from Lake Auld to Percival Lakes. The Company’s
tenements cover the most prospective portion of the 450 kilometre
long lake system where historic sampling of brine has returned
the highest known in-situ SOP grades from an Australian salt
lake.
During the year, the Company’s native title consultations with
WDLAC and planned exploration efforts were placed on hold due
to the COVID-19 pandemic. These activities are expected to re-
commence in the second half of 2020.
WEST ARUNTA METALS PROJECT
(40% INTEREST)
The Company did not undertake any field activities on the West
Arunta Metals Project in order to focus on its potash projects,
including the newly acquired Lake Auld Potash Project. During
the year, the Company reduced its interest in the West Arunta
Metals Project to 40% following the completion of a fundraising
of $600,000.
ENVIRONMENT
Agrimin is committed to minimising the impact of its activities on
the environment. Since exploration activities commenced at the
Mackay Potash Project in 2015, no reportable environmental
incident has occurred and it is the Company’s focus to maintain
this performance. The Company has completed baseline
environmental surveys in order to obtain data across the
Mackay Potash Project area and immediate surroundings.
Several environmental studies will be required to support the
environmental impact assessment and to facilitate the approvals
process.
During the year, the Company referred the Mackay Potash
Project to the Environmental Protection Authority (EPA) for
assessment under Section 38 of the Environmental Protection
Act 1986 (WA). The EPA determined the level of assessment to
be a Public Environmental Review. Concurrently, the Company
referred the Mackay Potash Project to the Commonwealth
Department of Agriculture, Water and
the Environment
(‘DAWE’) for assessment under the Environment Protection and
Biodiversity Conservation Act 1999. The DAWE has determined
the Mackay Potash Project is a controlled action and will be
assessed by accredited assessment under the Environmental
Protection Act 1986 (WA).
8
Agrimin Limited Annual Report 2020
REVIEW OF OPERATIONS
SAFETY
The Company is firmly committed to ensuring all work activities
are carried out safely with all practical measures taken to remove
risks to the health, safety and welfare of workers, contractors,
authorised visitors and anyone else who may be affected by
the Company’s activities. The Company is pleased to report
that no serious injuries have been reported during the year. The
Company’s past safety performance, along with a strong safety
culture, bodes well as activity levels continue to grow.
COVID-19 PANDEMIC
The COVID-19 outbreak was declared a pandemic by the World
Health Organisation in March 2020. The outbreak and the
response of Governments in dealing with the pandemic has not
had a significant impact on the operations of the Company. The
main impacts related to the postponement of native title meetings
that were planned for the first half of 2020, as well as the delay
of certain environmental surveys that were planned for March
2020. These activities have re-commenced.
CORPORATE
On 16 September 2019, the Company announced a capital raising
of $8,250,000 (before costs) via a placement to institutional and
sophisticated investors. The placement included 15,000,000
ordinary shares issued at a price of $0.55 per share. On 20
September 2019, the Company issued 14,710,000 of these
shares. The remaining 290,000 ordinary shares were issued
to two directors on 17 December 2019 following shareholder
approval at the Company’s Annual General Meeting.
On 17 December 2019, the Company issued 1,000,000 ordinary
shares to Potash Global Limited and its nominees. The shares
were for services related to the facilitation of Exploration Licence
applications covering areas across Percival Lakes in Western
Australia, as announced on 18 December 2018.
On 28 February 2020, the Company received a government
grant of $1,943,682 (30 June 2019: $2,008,829) in the form of
a research and development refund for the financial year ended
30 June 2019. There were no unfulfilled conditions attached to
the grant.
The Company completed a partially underwritten pro-rata non-
renounceable entitlement offer of ordinary shares as announced
on 27 April 2020. The entitlement offer provided eligible
shareholders in Agrimin the opportunity to acquire one new
share for every 19 existing Agrimin ordinary shares held. On 28
May 2020, 9,822,570 ordinary shares were issued at $0.30 per
share to raise $2,946,771.
On 28 May 2020, the Company issued 250,000 ordinary shares
to Zinfandel Exploration Pty Ltd. The shares are subject to a
six month voluntary escrow period. The shares were part of the
consideration to acquire the Lake Auld Potash Project in Western
Australia, as announced on 20 March 2020.
Agrimin Limited Annual Report 2020
9
REVIEW OF OPERATIONS
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10
Agrimin Limited Annual Report 2020
FORWARD LOOKING STATEMENTS
COMPETENT PERSON STATEMENT
REVIEW OF OPERATIONS
The mineral resources and ore reserves statement in this Annual
Report is based on, and fairly represents, information and
supporting information prepared by a competent persons.
The mineral resources statement in this Annual Report as a
whole has been approved by Mr Derek Loveday, who is a full-
time employee of Stantec Consulting Services Inc. Mr Loveday is
a geologist and is an independent consultant to Agrimin Limited.
Mr Loveday is a Member of the Society for Mining, Metallurgy
& Exploration, a Professional Engineer of the Association of
Professional Engineers and Geoscientists of Alberta, and a
Professional Engineer of the South African Council for Natural
Scientific Professions. Mr Loveday has provided his prior written
consent to the form and context in which the mineral resources
statement appears in this Annual Report.
The ore reserves statement in this Annual Report as a whole has
been approved by Mr Rick Reinke, who is a full-time employee of
Stantec Consulting Services Inc. Mr Reinke is a hydrogeologist
and is an independent consultant to Agrimin Limited. Mr Reinke
is a member, a Professional Geoscientist, and Professional
Geophysicist of the Association of Professional Engineers and
Geoscientists of Alberta. Mr Reinke has provided his prior
written consent to the form and context in which the ore reserves
statement appears in this Annual Report.
implied by such
This Annual Report may contain certain
forward-looking
statements which may not have been based solely on historical
facts, but rather may be based on the Company’s current
expectations about future events and results. Where the
Company expresses or implies an expectation or belief as to
future events or results, such expectation or belief is expressed
in good faith and believed to have a reasonable basis. However,
forward-looking statements are subject to risks, uncertainties,
assumptions and other factors, which could cause actual results
to differ materially from future results expressed, projected
or
forward-looking statements. Forward-
looking information includes exchange rates; the proposed
production plan; projected brine concentrations and recovery
rates; uncertainties and risks regarding the estimated capital
and operating costs; uncertainties and risks regarding the
development timeline, including the need to obtain the necessary
approvals. For a more detailed discussion of such risks and other
factors, refer to this Annual Report in its entirety, as well as the
Company’s other ASX Releases. Readers of this Annual Report
should not place undue reliance on forward-looking information.
No representation or warranty, express or implied, is made by
the Company that the matters stated in this Annual Report will be
achieved or prove to be correct. Recipients of this Annual Report
must make their own investigations and inquiries regarding all
assumptions, risks, uncertainties and contingencies which may
affect the future operations of the Company or the Company’s
securities. The Company does not undertake any obligation to
update or revise any forward-looking statements as a result of
new information, estimates or opinions, future events or results,
except as may be required under applicable securities laws.
CAUTIONARY STATEMENT
The Definitive Feasibility Study results, production target and
forecast financial information referred to in this Annual Report
are supported by the Definitive Feasibility Study mine plan which
is based on the extraction of 93% Ore Reserve and 7% Inferred
Mineral Resource. There is a low level of geological confidence
associated with the Inferred Mineral Resource and there is no
certainty that further exploration work and economic assessment
will result in the conversion to Ore Reserve or that the production
target itself will be realised. The Mineral Resource and Ore
Reserve underpinning the production target in this Annual Report
have been prepared by a competent person in accordance with
the requirements of the JORC Code (2012).
Agrimin Limited Annual Report 2020
11
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Agrimin is committed to developing the Mackay Potash Project sustainably and in alignment with the United Nations
Sustainable Development Goals, as outlined in Figure 1. The Company’s commitment is embodied throughout the
recently released definitive feasibility study and has been demonstrated through six years of positive stakeholder
engagement.
Goal
Agrimin’s Alignment
Zero
Hunger
We aim to establish a globally important supply of sustainable fertiliser that
can improve global agricultural productivity and assist developing countries
to achieve food security.
Good Health
and Well-Being
We strive to provide a safe work place for our employees and the
communities in which we operate. Their health and well-being is our
paramount focus.
Quality
Education
We have a planned program of training and education opportunities within
our local communities which are designed to improve accessibility to the
jobs that will be created over the life of our operations.
Gender
Equality
We aspire to provide a positive and inclusive team environment. We
recognise the importance of improving gender representation in the roles
we create.
Decent Work
and Economic
Growth
Industry,
Innovation and
Infrastructure
We aim to empower local communities by creating jobs and supporting
training programs throughout all phases of our operations to ensure
economic benefits endure locally over the long-term.
We will develop important regional infrastructure that will create
economic and social opportunities through better connectivity for remote
communities.
Reduced
Inequalities
We seek to provide jobs and economic opportunities for Indigenous people
living in our country’s most isolated communities. We firmly believe our
operations can be a catalyst for an improved quality of life.
Responsible
Consumption
and Production
We have designed a sustainable and low impact production process to
ensure that our operations minimise the consumption of water, energy
and other materials.
Climate
Action
Life on
Land
We aim to achieve a high penetration of renewable energy in our operations
and we are proud that our fertiliser will have one of the lowest carbon
footprints associated with any major macro-nutrient fertiliser.
We are committed to protecting the environment and minimising the impact
on the biodiversity within the ecosystems we operate. Globally, we aim for
our fertiliser to reduce the environmental impact of agriculture.
Peace, Justice
and Strong
Institutions
We are committed to acting in a transparent, accountable and responsible
manner throughout all of our business dealings. We operate to high levels of
corporate governance and intend to grow these with our business.
Figure 1. Alignment with the United Nations Sustainable Development Goals
Agrimin Limited Annual Report 2020
13
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
ENVIRONMENT
Agrimin believes in caring for the natural environment and aims
to produce sustainable fertiliser products that minimise the
environmental impacts of global agriculture. Agrimin is committed
to managing its own environmental responsibilities during the
production of its SOP, as well as offering an alternative to existing
chemical and chloride-based potash fertilisers.
The Mackay Potash Project gives Agrimin an opportunity to
integrate environmental and social outcomes from the very
beginning. The Project has a targeted renewable energy
penetration of 58% through the utilisation of a hybrid gas, solar,
wind and battery solution. This has contributed to Agrimin’s SOP
having one of the lowest carbon footprints associated with any
major macro-nutrient fertiliser.
Agrimin has worked diligently to design a project that minimises
the impact on the biodiversity within the ecosystems it operates.
The Company has undertaken an extensive set of environmental
surveys and studies with the aim of developing a comprehensive
and holistic understanding of Lake Mackay, the lake’s local and
regional significance and potential impacts associated with the
Project.
The Company has been operating extensive field programs on
Lake Mackay since 2015 and is proud to have never recorded
a single significant environmental incident or received an
environmental improvement or prohibition notice.
Significant Environmental Incidents
Value of Fine
DMRS Improvement Notices - Environment
DMRS Prohibition Notices - Environment
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
FY2017
FY2018
FY2019
FY2020
Figure 2. Environmental Performance
14
Agrimin Limited Annual Report 2020
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
PEOPLE
Agrimin cares about its people, they are its most important
asset and the Company aspires to provide a positive, safe and
inclusive team environment. Agrimin recognises the importance
and improvement to business performance a diverse workforce
can bring.
Agrimin is committed to measuring and developing inclusive
diversity within the roles it creates at the Mackay Potash Project
ensuring equal access to opportunities irrespective of gender,
age, race, national or ethnic origin, cultural background, social
group, marital status, religion, sexual orientation or physical
ability while ensuring equal remuneration is offered for all
employees, reflective of the position, candidate experience and
position tenure.
Professional and personal development of its workforce is
central to its business objective. Agrimin aims to create a positive
team environment where its employees have the opportunity for
lifelong learning and development, where it can empower its
employees and local communities and leave a lasting positive
legacy.
Agrimin Limited Annual Report 2020
15
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
SAFETY
The safety and wellbeing of Agrimin’s people and the communities
in which it operates is a paramount focus. Agrimin believes all
incidents are preventable and its aim is that all people will return
home after work in the same or better condition than when they
arrived.
As Agrimin has grown it has retained an embedded and positive
safety culture which is reflected in its safety performance. Agrimin’s
culture is set by its progressive and accessible leadership team,
along with everyone’s individual commitment to the values that
drive safe behaviour.
In FY2020 Agrimin had no Lost Time Injuries (LTIs) and no
significant incidents were reported within the communities in which
it operates.
2
1
0
SOCIAL
FY2017
FY2018
FY2019
FY2020
Figure 3. LTI Performance
Agrimin’s vision is to empower local Indigenous communities
through sustainable economic development and aims
to
sustainably produce fertiliser products that help achieve global
food security.
Agrimin believes in supporting the communities in which it
operates and that it is essential to deliver significant benefits
to members of local and regional communities, in particular
the Traditional Owners of the lands it operates. Further, it will
only truly succeed once it is accepted as an integral party of the
communities in which it operates.
Agrimin has established a
long-standing and respectful
relationship with the Traditional Owners who are affected by the
Mackay Potash Project. The Company aims to continue to build
upon this mutually beneficial relationship with the Traditional
Owners of the land in which it operates, providing economic and
cultural-strengthening opportunities with effective engagement,
consultation and communication.
The Mackay Potash Project will not only create jobs and
economic opportunities for the local communities, but Agrimin
will also provide training and education opportunities designed
to improve their accessibility. Agrimin is particularly proud that
its haulage joint venture (Newhaul Bulk) is developing a driver
training program which will maximise the opportunity to recruit
local and Indigenous employees.
The development of the Mackay Potash Project will present local
communities with improved access to infrastructure including
roads, communication networks and utilities. Central to the
project is a proposed sealed haul road which will directly benefit
local communities and other businesses in the region.
Agrimin’s premium quality SOP products will play a critical role
in helping to achieve global food security. SOP will improve
agricultural productivity and increase sustainable food production
for farmers, particularly in the developing countries of South and
Southeast Asia to nourish their rapidly growing middle-class
populations.
16
Agrimin Limited Annual Report 2020
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
GOVERNANCE
Agrimin strives to act in a transparent, accountable and
responsible manner in all of its business dealings.
Agrimin’s Board is committed to the adoption of corporate
governance policies and practices consistent with the ASX
Corporate Governance Council’s Corporate Governance
Principles and Recommendations that are appropriate for a
company of Agrimin’s size and nature. Agrimin’s governance
documents are reviewed annually and include:
•
•
•
•
•
•
Code of Business Conduct;
Communications with Shareholders Policy;
Continuous Disclosure Policy;
Diversity Policy;
Risk Management Policy;
Securities Trading Policy; and
• Whistleblower Policy.
These documents are available on the Agrimin website.
Agrimin recognises that as the Mackay Potash Project moves
to the next phase of development, contract and procurement
management will become an increasingly important area of
governance.
Agrimin is committed to maximising the employment and
business opportunities for Indigenous people, particularly the
Kiwirrkurra People. Proposals from the Kiwirrkurra People or
entities will be given preferential weighting when tendering for
smaller packages of work.
Agrimin Limited Annual Report 2020
17
DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Your Directors are pleased to provide their report on Agrimin Limited (ASX: AMN) (‘Agrimin’ or the ‘Company’) together with
the consolidated financial statements for the Company and its controlled entities (‘Group’) for the year ended 30 June 2020.
DIRECTORS’ AND COMPANY SECRETARY
The names and details of the Company’s directors and company secretary in office during the financial year and until the
date of this report are as follows. The directors and company secretary were in office for the entire period unless otherwise
stated.
NAMES, QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES
Richard Seville
Non-Executive Chairperson, appointed 5 August 2019.
BSc (Hons) Mining Geology, MEngSc Rock Engineering, MAusIMM, ARSM.
Mr Seville has over 35 years of experience in the resources sector including positions as Managing Director, Operations
Director, Non-Executive Director and Chairperson. Mr Seville was previously Chief Executive Officer and Managing Director
of Orocobre Limited (ASX: ORE), a lithium and boron chemicals producer with operations in Argentina which he led for 12
years from IPO and took the flagship Olaroz brine project through exploration, feasibility, financing with project debt and
partnering with Toyota Tsusho Corporation and into production and expansion. Mr Seville holds a BSc in Mining Geology
from Imperial College, London and a Masters in Engineering Science from James Cook University.
Mr Seville’s other current ASX directorships include Orocobre Limited and OZ Minerals Limited.
Mr Seville was formerly a director of Advantage Lithium Corp.
Mark Savich
CEO and Executive Director, appointed 1 December 2012 and Chief Executive Officer from 1 March 2015.
BComm, CFA, GradDipMinExplGeoSc,GAICD.
Mr Savich has 17 years of experience in the resources sector in Western Australia. He began his career as an accountant
in 2003 and was subsequently a resources analyst between 2006 and 2014. Mr Savich became a Non-Executive Director
of Agrimin in 2012 and was appointed as an Executive Director in 2014. He holds a Bachelor of Commerce from the
University of Western Australia, a Graduate Diploma in Mineral Exploration Geoscience from the WA School of Mines, is a
Chartered Financial Analyst (CFA), a graduate member of the Australian Institute of Company Directors and completed the
Chartered Accountants (CA) program.
Brad Sampson
Non-Executive Director, appointed 22 April 2016 (formerly Non-Executive Chairperson until 5 August 2019).
B.E. (Hons) Mining, MBA, AMP, MAusIMM.
Mr Sampson is an internationally experienced business leader, director and mining professional with 30 years’ resources
industry experience. In addition to significant project development and operating experience, he is an experienced director
with listed and non-listed companies and has joint venture governance experience across multiple international jurisdictions.
Mr Sampson currently serves as Chief Executive Officer and Director of Kore Potash Plc. He has been the Managing Director
of Discovery Metals Ltd and held senior management roles in resources and engineering companies including Newcrest
Mining, Gold Fields Ltd and Thiess. His experience covers the entire cycle of exploration, development, operations and
closure, and includes equity and debt funding of resources projects, government relations and product marketing.
Page | 15
Agrimin Limited Annual Report 2020
19
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Alec Pismiris
Non-Executive Director and Company Secretary, appointed 3 October 2013.
BComm, MAICD, FGIA FCG.
Mr Pismiris has over 30 years of experience in the securities, finance and mining industries and is currently a director of
several ASX listed companies. He is currently engaged as Interim President and Chief Executive Officer of Pacton Gold Inc
listed on the TSX Venture Exchange. Since 1990, Mr Pismiris has served as a director and company secretary for various
ASX listed companies as well as a number of unlisted public and private companies. Mr Pismiris completed a Bachelor of
Commerce degree at the University of Western Australia, is a member of the Australian Institute of Company Directors and
a fellow of The Governance Institute of Australia. Mr Pismiris has participated numerous times in the processes by which
boards have assessed the acquisition and financing of a diverse range of assets and has participated in and become familiar
with the range of evaluation criteria used and the due diligence processes commonly adopted in the commercial assessment
of corporate opportunities.
Mr Pismiris’ other current directorships include Frontier Resources Limited, Pacton Gold Inc., Pelican Resources Limited,
The Market Herald Limited and Victory Mines Limited.
Mr Pismiris was formerly a director of Aguia Resources Limited.
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE
As at the date of this report the relevant interests of each Director in the shares and options of the Group are:
Director
R Seville
M Savich
B Sampson
A Pismiris
Ordinary
310,527
9,910,000
1,600,000
4,500,000
Options
-
-
-
-
Performance Rights
-
4,000,000
500,000
500,000
DIRECTORS’ MEETINGS
An audit committee was originally established in July 2007. However, due to the current composition of the Board of Directors
and scale of activities of the Company, this committee was not utilised during the year ended 30 June 2020. All matters that
would normally have been reviewed by this committee were reviewed by the full Board of Directors.
The number of directors’ meetings and number of meetings attended by each of the directors of the Company during the
financial year were:
Director
R Seville
M Savich
B Sampson
A Pismiris
PRINCIPAL ACTIVITIES
Held
12
12
12
12
Board Meetings
Attended
12
12
11
12
The principal activity of the Group during the year was advancing the Mackay Potash Project in Western Australia. There
was no significant change in the nature of the Group’s activities during the financial year ended 30 June 2020.
REVIEW OF OPERATIONS AND RESULTS
Details of the operations of the Group are set out in the Review of Operations on page 4.
The Group incurred an after-tax operating loss of $1,799,067 (2019: $1,794,598).
Page | 16
20
Agrimin Limited Annual Report 2020
DIRECTORS’ REPORT
Alec Pismiris
BComm, MAICD, FGIA FCG.
DIRECTORS’ MEETINGS
financial year were:
Director
R Seville
M Savich
B Sampson
A Pismiris
PRINCIPAL ACTIVITIES
Mr Pismiris has over 30 years of experience in the securities, finance and mining industries and is currently a director of
several ASX listed companies. He is currently engaged as Interim President and Chief Executive Officer of Pacton Gold Inc
listed on the TSX Venture Exchange. Since 1990, Mr Pismiris has served as a director and company secretary for various
ASX listed companies as well as a number of unlisted public and private companies. Mr Pismiris completed a Bachelor of
Commerce degree at the University of Western Australia, is a member of the Australian Institute of Company Directors and
a fellow of The Governance Institute of Australia. Mr Pismiris has participated numerous times in the processes by which
boards have assessed the acquisition and financing of a diverse range of assets and has participated in and become familiar
with the range of evaluation criteria used and the due diligence processes commonly adopted in the commercial assessment
of corporate opportunities.
Mr Pismiris’ other current directorships include Frontier Resources Limited, Pacton Gold Inc., Pelican Resources Limited,
The Market Herald Limited and Victory Mines Limited.
Mr Pismiris was formerly a director of Aguia Resources Limited.
As at the date of this report the relevant interests of each Director in the shares and options of the Group are:
Director
R Seville
M Savich
B Sampson
A Pismiris
Ordinary
310,527
9,910,000
1,600,000
4,500,000
Options
Performance Rights
-
-
-
-
-
4,000,000
500,000
500,000
An audit committee was originally established in July 2007. However, due to the current composition of the Board of Directors
and scale of activities of the Company, this committee was not utilised during the year ended 30 June 2020. All matters that
would normally have been reviewed by this committee were reviewed by the full Board of Directors.
Held
12
12
12
12
Board Meetings
Attended
12
12
11
12
The principal activity of the Group during the year was advancing the Mackay Potash Project in Western Australia. There
was no significant change in the nature of the Group’s activities during the financial year ended 30 June 2020.
REVIEW OF OPERATIONS AND RESULTS
Details of the operations of the Group are set out in the Review of Operations on page 4.
The Group incurred an after-tax operating loss of $1,799,067 (2019: $1,794,598).
Non-Executive Director and Company Secretary, appointed 3 October 2013.
No dividends have been paid or recommended for the current year (2019: None).
DIRECTORS’ REPORT
DIVIDENDS
DIRECTORS’ REPORT
EVENTS SUBSEQUENT TO REPORTING DATE
There were no subsequent events.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Likely developments in the operations of the Group are set out in the Review of Operations on page 4.
IDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Ernst & Young during or since the financial year.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE
INDEMNIFICATION
The number of directors’ meetings and number of meetings attended by each of the directors of the Company during the
The Group paid a premium of $27,500 (2019: $24,000) for directors’ and officers’ insurance.
The Company has agreed to indemnify the directors of the Company against all liabilities to another person (other than the
Company or a related body corporate) that may arise from their position as directors of the Company, except where the
liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full
amount of any such liabilities, including costs and expenses.
INSURANCE PREMIUMS
The Company has arranged directors’ and officers’ liability insurance, for past, present or future directors, secretaries and
executive officers. The insurance cover relates to:
-
-
costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and whatever
their outcome; and
other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or
improper use of information or position to gain a personal advantage.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group is subject to environmental regulation in respect to its exploration activities and aims to ensure that the highest
standard of environmental care is achieved, and it complies with all relevant environmental legislation. There have been no
material breaches during the period covered by this report.
NON-AUDIT SERVICES
The Board has considered the non-audit services provided during the financial year by the auditor and is satisfied that the
provision of those non-audit services is compatible with, and did not compromise, the auditor’s independence
requirements of the Corporations Act 2001. The non-audit services were reviewed by the Board to ensure:
-
-
they do not impact the integrity and objectivity of the auditor; and
they do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a
management or decision-making capacity for the Group, acting as an advocate for the Group or jointly sharing risks
and rewards.
During the period, Ernst & Young assisted with the preparation of the Income Tax Return and Research and Development
Tax Services for the year ended 30 June 2019. The Company paid $60,000 for the services provided.
Page | 16
Page | 17
Agrimin Limited Annual Report 2020
21
DIRECTORS’ REPORT
DIRECTORS’ REPORT
CORPORATE GOVERNANCE
This statement outlines the main corporate governance practices adopted by the Board of Agrimin which comply with the
ASX Corporate Governance Council recommendations unless otherwise stated.
The Board and management of Agrimin recognise their duties and obligations to shareholders and other stakeholders to
implement and maintain a proper system of corporate governance. The Company believes that good corporate governance
adds value to stakeholders and enhances investor confidence.
The ASX Listing Rules require listed companies to prepare a statement disclosing the extent to which they have complied
with the recommendations of the ASX Corporate Governance Council (‘Recommendations’) in the reporting period. The
Recommendations are guidelines designed to improve the efficiency, quality and integrity of the Company. They are not
prescriptive and if a company considers a recommendation to be inappropriate having regard to its own circumstances, it
has the flexibility not to follow it. Where a company has not followed all the Recommendations, it must identify which
Recommendations have not been followed and give reasons for not following them.
This Corporate Governance Statement (‘Statement’) sets out a description of the Company’s main corporate practices and
provides details of the Company’s compliance with the Recommendations, or where appropriate, indicates a departure from
the Recommendations with an explanation.
This Statement is current as at 30 June 2020 and has been approved by the Board of Directors of Agrimin. It is available on
the Company’s website at http://www.agrimin.com.au/corporate-governance/.
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 30.
22
Agrimin Limited Annual Report 2020
Page | 18
DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
CORPORATE GOVERNANCE
REMUNERATION REPORT (AUDITED)
This statement outlines the main corporate governance practices adopted by the Board of Agrimin which comply with the
1.0
PRINCIPLES OF REMUNERATION
ASX Corporate Governance Council recommendations unless otherwise stated.
The Board and management of Agrimin recognise their duties and obligations to shareholders and other stakeholders to
implement and maintain a proper system of corporate governance. The Company believes that good corporate governance
adds value to stakeholders and enhances investor confidence.
The ASX Listing Rules require listed companies to prepare a statement disclosing the extent to which they have complied
with the recommendations of the ASX Corporate Governance Council (‘Recommendations’) in the reporting period. The
Recommendations are guidelines designed to improve the efficiency, quality and integrity of the Company. They are not
prescriptive and if a company considers a recommendation to be inappropriate having regard to its own circumstances, it
has the flexibility not to follow it. Where a company has not followed all the Recommendations, it must identify which
Recommendations have not been followed and give reasons for not following them.
This Corporate Governance Statement (‘Statement’) sets out a description of the Company’s main corporate practices and
provides details of the Company’s compliance with the Recommendations, or where appropriate, indicates a departure from
the Recommendations with an explanation.
This Statement is current as at 30 June 2020 and has been approved by the Board of Directors of Agrimin. It is available on
the Company’s website at http://www.agrimin.com.au/corporate-governance/.
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 30.
Key management personnel have the authority and responsibility for planning, directing and controlling the activities of the
Group.
The Key Management Personnel of Agrimin Limited and the Group are:
Directors
R Seville
M Savich
Non-Executive Chairperson (appointed 5 August 2019)
Chief Executive Officer and Executive Director
B Sampson
Non-Executive Director (formerly Non-Executive Chairperson until 5 August 2019)
A Pismiris
Non-Executive Director and Company Secretary
Named Key Management Personnel
T Lyons
General Manager
All the above persons were key management personnel during the financial year to 30 June 2020 unless otherwise stated.
The information provided in this remuneration report has been audited as required by section 308 (3C) of the Corporations
Act 2001.
Key elements of Key Management Personnel remuneration strategy
The following principles of remuneration have been agreed by the Board and formed the basis of the principles of
remuneration during the relevant periods of employment and will remain relevant to future employment arrangements.
Remuneration levels for key management personnel of the Group are competitively set to attract and retain appropriately
qualified and experienced directors and executives and as relevant to the circumstances of the Company from time to time.
The remuneration structures explained below are designed to attract suitably qualified candidates, reward the achievement
of strategic objectives, and achieve the broader outcome of creation of value for shareholders. The remuneration structures
consider the capability and experience of the key management personnel and the Group’s performance including:
-
-
-
-
-
the successful implementation of exploration and development programs designed to progress into operations;
the Group’s earnings, when and if appropriate;
the growth in share price and delivering enhancement of shareholder value;
the relevant prevailing employment market conditions; and
the amount of incentives within each key management person's remuneration.
Remuneration packages include a mix of fixed and variable remuneration and short and long-term performance-based
incentives.
Page | 18
Page | 19
Agrimin Limited Annual Report 2020
23
DIRECTORS’ REPORT
DIRECTORS’ REPORT
1.1
FIXED REMUNERATION
Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any fringe benefits
tax charges related to employee benefits) as well as employer contributions to superannuation funds, as required by law.
Remuneration levels are reviewed annually by the Chief Executive Officer and the Board through a process that considers
individual performance, employment market conditions and overall performance of the Group.
1.2
PERFORMANCE LINKED REMUNERATION
Performance linked remuneration includes short-term and long-term incentives and is designed both to reward key
management personnel for meeting or exceeding their financial and personal objectives and to keep the Group competitive
in the marketplace. The Short-term Incentive (STI) is an at-risk bonus provided in the form of cash and based on agreed
key performance indicators (KPIs) for each position. A Long-term Incentive (LTI) has been provided as performance rights
to ordinary shares of the Company under the rules of the Agrimin Employee Securities Incentives Plan 2019 (ESIP). The
ESIP provides for the issuance of performance securities which can include a plan share, option, performance right or other
convertible security. Upon determination by the Board that the performance conditions attached to the performance
securities have been met, will result in the issue of one ordinary share in the Company for each performance security.
If a performance condition of a performance security is not achieved by the milestone date then the performance security
will lapse. A performance security will also lapse if the Board determines the participant ceases to be an eligible employee
for the purposes of the ESIP for any reason (other than as a result of retirement, disability, bona fide redundancy or death).
1.3
SHORT-TERM INCENTIVE BONUS
Each year the Board of Directors sets the KPIs for the Chief Executive Officer, other key management personnel and senior
management. The KPIs will generally include measures relating to the Group, and to the individual, and include financial,
people, strategy and risk measures. The measures are chosen as they directly align the individual’s reward to the KPIs of
the Group and to its strategy and performance. The full Board reviews and confirms the cash incentive to be paid to each
individual. This method of assessment was chosen as it provides the Board with an objective assessment of the individual’s
performance.
1.4
LONG-TERM INCENTIVE
Performance securities are issued under the ESIP (made in accordance with thresholds set in plans that have been initially
approved by the Board) and it provides for key management personnel to receive varying numbers of performance rights
for no consideration. The actual number of performance securities issued depends on the seniority and responsibility of the
executive concerned. The performance conditions and vesting periods of the performance securities are set so as to provide
a realistic incentive to each executive and to reflect the executive’s contribution to the Group and enhancement of value for
all shareholders.
At the annual general meeting of shareholders held on 27 November 2019, the Company obtained approval for the adoption
of the ESIP in accordance with the requirements of ASX Listing Rule 7.2, Exception 9. The ESIP has not replaced the
Performance Right Plan 2014 (PRP) which was renewed in 2017. Under the PRP 7,000,000 performance rights were issued
to the following directors and other key management personnel:
Director
M Savich
B Sampson
A Pismiris
Other key management personnel
T Lyons
Number issued
4,000,000
500,000
500,000
2,000,000
The current performance condition and expiry date of the performance rights issued are as follows:
Performance condition
An ASX announcement by the Company of the production of its first Sulphate
of Potash (SOP) from the Mackay SOP Project as per the final feasibility study.
The performance rights are subject to a milestone date being five years from
the date of grant.
Expiry date
Six months from the
date of satisfaction
of the Vesting
Condition.
Page | 20
24
Agrimin Limited Annual Report 2020
DIRECTORS’ REPORT
DIRECTORS’ REPORT
At Balance Date the Company had 7,000,000 performance rights outstanding (2019: 7,000,000) relating to key management
personnel.
The grant date fair value of the performance rights ranges between $0.51 to $0.84 per right. Due to the effect of the above
non-market performance condition, no share-based payment expense has been recognised at 30 June 2020 (2019: Nil).
The Board considers that the incentive to the directors and other key management personnel represented by the grant of
these performance rights, are a cost effective and efficient reward for the Company to make to appropriately incentivise the
continued performance of the directors and are consistent with the strategic goals and targets of the Company.
There have been no performance securities issued under the Company’s ESIP at balance date. It is expected that
performance securities will be issued under the Company’s ESIP in FY21 and where required approval will be sought at the
Company’s next General Meeting.
1.5
CONSEQUENCES OF PERFORMANCE ON SHAREHOLDER WEALTH
The Board considers that the most effective way to increase shareholder wealth is through the successful exploration and
development of the Group’s exploration tenements. The Board considers that the Group’s LTI schemes incentivise key
management personnel to successfully explore the Group’s tenements by providing rewards that are directly correlated to
delivering value to shareholders through share price appreciation.
The factors that are considered relevant to affect total shareholder returns as required to be disclosed by the Corporations
Act 2001 are summarised in the following table. The table excludes return on capital employed as a relevant measure given
the exploration basis of activity and operations of the Company.
Net loss after tax ($000's)
2020
(1,799)
2019
(1,795)
2018
(1,193)
Dividends paid
Nil
Nil
Nil
2017
(903)
Nil
2016
(967)
Nil
Share price at year end ($'s)
$0.435
$0.505
$0.940
$0.465
$0.410
Source of share prices quoted: CommSec.
Prior year comparatives above have not been adjusted for any impact of adopting AASB 16 Leases in FY20, AASB 15
Revenue from Contracts with Customers and AASB 9 Financial Instruments in FY19.
The Company also notes that as an exploration and development company, operating revenue and profits are not KPIs in
reviewing key management personnel STIs or LTIs. When establishing guidelines for any STIs, the Company looks to other
measures such as raising market awareness, enhancement of share price and capital raising opportunities (as relevant),
operational and achievement of goals and objectives in terms of establishment and milestones in attracting new and
enhancing the Group’s existing project.
DIRECTORS’ REPORT
1.1
FIXED REMUNERATION
Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any fringe benefits
tax charges related to employee benefits) as well as employer contributions to superannuation funds, as required by law.
Remuneration levels are reviewed annually by the Chief Executive Officer and the Board through a process that considers
individual performance, employment market conditions and overall performance of the Group.
1.2
PERFORMANCE LINKED REMUNERATION
Performance linked remuneration includes short-term and long-term incentives and is designed both to reward key
management personnel for meeting or exceeding their financial and personal objectives and to keep the Group competitive
in the marketplace. The Short-term Incentive (STI) is an at-risk bonus provided in the form of cash and based on agreed
key performance indicators (KPIs) for each position. A Long-term Incentive (LTI) has been provided as performance rights
to ordinary shares of the Company under the rules of the Agrimin Employee Securities Incentives Plan 2019 (ESIP). The
ESIP provides for the issuance of performance securities which can include a plan share, option, performance right or other
convertible security. Upon determination by the Board that the performance conditions attached to the performance
securities have been met, will result in the issue of one ordinary share in the Company for each performance security.
If a performance condition of a performance security is not achieved by the milestone date then the performance security
will lapse. A performance security will also lapse if the Board determines the participant ceases to be an eligible employee
for the purposes of the ESIP for any reason (other than as a result of retirement, disability, bona fide redundancy or death).
1.3
SHORT-TERM INCENTIVE BONUS
Each year the Board of Directors sets the KPIs for the Chief Executive Officer, other key management personnel and senior
management. The KPIs will generally include measures relating to the Group, and to the individual, and include financial,
people, strategy and risk measures. The measures are chosen as they directly align the individual’s reward to the KPIs of
the Group and to its strategy and performance. The full Board reviews and confirms the cash incentive to be paid to each
individual. This method of assessment was chosen as it provides the Board with an objective assessment of the individual’s
performance.
1.4
LONG-TERM INCENTIVE
Performance securities are issued under the ESIP (made in accordance with thresholds set in plans that have been initially
approved by the Board) and it provides for key management personnel to receive varying numbers of performance rights
for no consideration. The actual number of performance securities issued depends on the seniority and responsibility of the
executive concerned. The performance conditions and vesting periods of the performance securities are set so as to provide
a realistic incentive to each executive and to reflect the executive’s contribution to the Group and enhancement of value for
all shareholders.
At the annual general meeting of shareholders held on 27 November 2019, the Company obtained approval for the adoption
of the ESIP in accordance with the requirements of ASX Listing Rule 7.2, Exception 9. The ESIP has not replaced the
Performance Right Plan 2014 (PRP) which was renewed in 2017. Under the PRP 7,000,000 performance rights were issued
to the following directors and other key management personnel:
Director
M Savich
B Sampson
A Pismiris
T Lyons
Other key management personnel
Number issued
4,000,000
500,000
500,000
2,000,000
The current performance condition and expiry date of the performance rights issued are as follows:
Performance condition
An ASX announcement by the Company of the production of its first Sulphate
of Potash (SOP) from the Mackay SOP Project as per the final feasibility study.
The performance rights are subject to a milestone date being five years from
the date of grant.
Expiry date
Six months from the
date of satisfaction
of the Vesting
Condition.
Page | 20
Page | 21
Agrimin Limited Annual Report 2020
25
DIRECTORS’ REPORT
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26
Agrimin Limited Annual Report 2020
DIRECTORS’ REPORT
2.1
SERVICE CONTRACTS
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
The Company has entered into an employment agreement with Chief Executive Officer, Mr Mark Savich. The material terms
of the agreement are set out as follows:
Commencement date: 1 March 2015
Term: Ongoing and reviewed annually at the sole discretion of the Board
Fixed remuneration: $330,000 per annum inclusive of superannuation (revised 1 July 2019)
Termination for cause: no notice period
Termination without cause: three month notice period
During the year, in order to bring Mr Savich’s remuneration in line with market, remuneration arrangements were revised
and his fixed remuneration for FY20 increased to $330,000 inclusive of superannuation, such quantum taking account of
potential STI for the year.
of the agreement are set out as follows:
The Company has entered into an employment agreement with General Manager, Mr Thomas Lyons. The material terms
Commencement date: 24 March 2014 (revised contract 1 July 2018)
Term: Ongoing and reviewed annually at the sole discretion of the Board
Fixed remuneration: $210,000 per annum exclusive of superannuation (revised 1 July 2019)
Annual bonus of up to 30% of remuneration based upon KPIs set by the Board and reviewed annually
Termination for cause: no notice period
Termination without cause: three month notice period
There are currently no other service contracts with any director and there are no other key management personnel in the
Company.
2.2
NON-EXECUTIVE DIRECTORS REMUNERATION
Total fees for all Non-Executive Directors was originally set by the Board on 22 June 2007 to not exceed $147,000. The
levels of fees set were based on a review involving reference to fees paid to other Non-Executive Directors of comparable
companies at the time. At a general meeting held on 15 September 2017 the Company obtained shareholder approval to
increase of the maximum total aggregate amount of fees payable to Non-Executive Directors from $147,000 per annum to
$250,000 per annum.
Directors’ fees are paid monthly in arrears. Members of the Board of Directors are entitled to performance related
remuneration, subject to obtaining the appropriate shareholder approvals. The chairperson base fee is $100,000 per annum
exclusive of superannuation and base fees for Non-Executive Directors is $60,000 per annum including superannuation.
Directors’ fees cover all main board activities. Additional services provided outside of board duties attract a separate daily
rate agreed by the full Board. There is no board retirement scheme and there is currently no intention to establish such a
scheme.
2.3
SHORT-TERM INCENTIVES
Mr Tom Lyons was entitled to receive a cash bonus for the year ended 30 June 2020 as approved by the directors as
determined against KPI measures set by the Board, which included performance of:
Positive management of health, safety and environmental management;
Progression of the DFS;
Progression of project approvals and licences; and
- Maintaining all project tenure in good standing.
The performance conditions selected were to incentivise executives to advance the Mackay Potash Project. As COVID-19
had limited impact on the Group, there was no adjustment to proposed STI’s awarded to Group’s executives.
Mr Lyons was entitled to receive up to a maximum of 30% of his individual total fixed remuneration. Mr Lyons was awarded
91% of the maximum entitlement and he received $57,330 for the year ended 30 June 2020 (2019: $60,800).
The cash bonus was paid after the year end.
Page | 23
DIRECTORS’ REPORT
2.1
SERVICE CONTRACTS
DIRECTORS’ REPORT
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
The Company has entered into an employment agreement with Chief Executive Officer, Mr Mark Savich. The material terms
of the agreement are set out as follows:
-
-
-
-
-
Commencement date: 1 March 2015
Term: Ongoing and reviewed annually at the sole discretion of the Board
Fixed remuneration: $330,000 per annum inclusive of superannuation (revised 1 July 2019)
Termination for cause: no notice period
Termination without cause: three month notice period
During the year, in order to bring Mr Savich’s remuneration in line with market, remuneration arrangements were revised
and his fixed remuneration for FY20 increased to $330,000 inclusive of superannuation, such quantum taking account of
potential STI for the year.
The Company has entered into an employment agreement with General Manager, Mr Thomas Lyons. The material terms
of the agreement are set out as follows:
-
-
-
-
-
-
Commencement date: 24 March 2014 (revised contract 1 July 2018)
Term: Ongoing and reviewed annually at the sole discretion of the Board
Fixed remuneration: $210,000 per annum exclusive of superannuation (revised 1 July 2019)
Annual bonus of up to 30% of remuneration based upon KPIs set by the Board and reviewed annually
Termination for cause: no notice period
Termination without cause: three month notice period
There are currently no other service contracts with any director and there are no other key management personnel in the
Company.
2.2
NON-EXECUTIVE DIRECTORS REMUNERATION
Total fees for all Non-Executive Directors was originally set by the Board on 22 June 2007 to not exceed $147,000. The
levels of fees set were based on a review involving reference to fees paid to other Non-Executive Directors of comparable
companies at the time. At a general meeting held on 15 September 2017 the Company obtained shareholder approval to
increase of the maximum total aggregate amount of fees payable to Non-Executive Directors from $147,000 per annum to
$250,000 per annum.
Directors’ fees are paid monthly in arrears. Members of the Board of Directors are entitled to performance related
remuneration, subject to obtaining the appropriate shareholder approvals. The chairperson base fee is $100,000 per annum
exclusive of superannuation and base fees for Non-Executive Directors is $60,000 per annum including superannuation.
Directors’ fees cover all main board activities. Additional services provided outside of board duties attract a separate daily
rate agreed by the full Board. There is no board retirement scheme and there is currently no intention to establish such a
scheme.
2.3
SHORT-TERM INCENTIVES
Mr Tom Lyons was entitled to receive a cash bonus for the year ended 30 June 2020 as approved by the directors as
determined against KPI measures set by the Board, which included performance of:
Positive management of health, safety and environmental management;
Progression of the DFS;
Progression of project approvals and licences; and
-
-
-
- Maintaining all project tenure in good standing.
The performance conditions selected were to incentivise executives to advance the Mackay Potash Project. As COVID-19
had limited impact on the Group, there was no adjustment to proposed STI’s awarded to Group’s executives.
Mr Lyons was entitled to receive up to a maximum of 30% of his individual total fixed remuneration. Mr Lyons was awarded
91% of the maximum entitlement and he received $57,330 for the year ended 30 June 2020 (2019: $60,800).
The cash bonus was paid after the year end.
Page | 23
Agrimin Limited Annual Report 2020
27
DIRECTORS’ REPORT
DIRECTORS’ REPORT
2.4
PERFORMANCE RELATED REMUNERATION
The Group’s policy in relation to the proportion of remuneration that is performance related is discussed under the section
titled ‘Performance Linked Remuneration’.
Performance securities are granted under a service condition whereby the grantee must be employed by the Group at the
time the performance securities vest. If the performance securities are unvested at termination of the grantee’s engagement
by the Group, the performance securities expire on termination of the grantee’s engagement. Upon performance securities
vesting, the recipient is required to provide the Company with a Notice of Exercise. The Company must within 10 business
days issue to the recipient the number of Shares in respect of which the performance securities have been exercised.
Otherwise, performance rights expire on their expiry date. There have been no performance securities issued under the
Company’s ESIP. Performance rights issued under the Company’s PRP have been provided at no cost to the recipient.
Details of vesting profiles of the performance rights granted as remuneration to each key management person of the Group
are detailed below.
Number of rights
granted
Grant date % forfeited /
cancelled in
year
Expiry date
Directors
M Savich
B Sampson
A Pismiris
4,000,000 (1) 15 September 2017
500,000 (1)
15 September 2017
500,000 (1)
15 September 2017
Key Management Personnel
T Lyons
2,000,000 (1)
15 September 2017
-
-
-
-
6 months from
vesting
6 months from
vesting
6 months from
vesting
6 months from
vesting
Notes: (1) includes performance conditions relating to an ASX announcement by the Company of the production of its first
Sulphate of Potash from the Mackay Potash Project as per the final feasibility study.
Details of performance rights held by key management personnel of the Group during the financial year are as follows.
2020
Held at
beginning of
year
Granted as
compensation
Forfeited/
expired
Vested
and
exercised
Held at the
end of year
Vested at
end of year
Directors
M Savich
B Sampson
A Pismiris
Key management personnel
T Lyons
Total
4,000,000
500,000
500,000
2,000,000
7,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,000,000
500,000
500,000
2,000,000
7,000,000
-
-
-
-
-
Due to the effect of non-market performance condition, no share-based payment expense has been recognised at 30 June
2020 (2019: Nil).
28
Agrimin Limited Annual Report 2020
Page | 24
DIRECTORS’ REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
2.4
PERFORMANCE RELATED REMUNERATION
2.5
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
The Group’s policy in relation to the proportion of remuneration that is performance related is discussed under the section
titled ‘Performance Linked Remuneration’.
Shares held, directly, indirectly or beneficially, by key management personnel, including their related parties during the
financial year, were as follows.
Performance securities are granted under a service condition whereby the grantee must be employed by the Group at the
time the performance securities vest. If the performance securities are unvested at termination of the grantee’s engagement
by the Group, the performance securities expire on termination of the grantee’s engagement. Upon performance securities
vesting, the recipient is required to provide the Company with a Notice of Exercise. The Company must within 10 business
days issue to the recipient the number of Shares in respect of which the performance securities have been exercised.
Otherwise, performance rights expire on their expiry date. There have been no performance securities issued under the
Company’s ESIP. Performance rights issued under the Company’s PRP have been provided at no cost to the recipient.
Details of vesting profiles of the performance rights granted as remuneration to each key management person of the Group
are detailed below.
Number of rights
granted
Grant date % forfeited /
Expiry date
cancelled in
year
Directors
M Savich
B Sampson
A Pismiris
2020
Directors
M Savich
B Sampson
A Pismiris
T Lyons
Total
4,000,000 (1) 15 September 2017
500,000 (1)
15 September 2017
500,000 (1)
15 September 2017
-
-
-
-
6 months from
vesting
6 months from
vesting
6 months from
vesting
6 months from
vesting
Key Management Personnel
T Lyons
2,000,000 (1)
15 September 2017
Notes: (1) includes performance conditions relating to an ASX announcement by the Company of the production of its first
Sulphate of Potash from the Mackay Potash Project as per the final feasibility study.
Details of performance rights held by key management personnel of the Group during the financial year are as follows.
Held at
Granted as
Forfeited/
beginning of
compensation
expired
Held at the
end of year
Vested at
end of year
Vested
and
exercised
year
4,000,000
500,000
500,000
2,000,000
7,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,000,000
500,000
500,000
2,000,000
7,000,000
-
-
-
-
-
Key management personnel
Due to the effect of non-market performance condition, no share-based payment expense has been recognised at 30 June
2020 (2019: Nil).
2020
Directors
R Seville
M Savich
B Sampson
A Pismiris
Key Management Personnel
T Lyons
Total
Held at
beginning of
year
Purchases / other
acquisitions
Sales /
other
disposals
Net change
other
Held at the
end of year
-
9,800,000
1,600,000
4,210,000
1,931,045
17,541,045
310,527
110,000
-
290,000
-
710,527
-
-
-
-
-
-
-
-
-
-
-
-
310,527
9,910,000
1,600,000
4,500,000
1,931,045
18,251,572
2.6
TRANSACTIONS AND BALANCES WITH KEY MANEGEMENT PERSONNEL AND THEIR RELATED PARTIES
During the period $82,000 of fees were paid to Lexcon Services Pty Ltd (2019: $74,000) and $8,000 was payable for
professional services provided by Mr Pismiris as Non-Executive Director and Company Secretary (2019: $6,000).
There were no other related party transactions with other key management personnel of the Group for the year ended 30
June 2020.
-END OF REMUNERATION REPORT-
This report is made with a resolution of the directors:
Mark Savich
Chief Executive Officer and Executive Director
Perth
25 September 2020
Page | 24
Page | 25
Agrimin Limited Annual Report 2020
29
AUDITOR’S INDEPENDENCE DECLARATION
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of Agrimin Limited
As lead auditor for the audit of the financial report of Agrimin Limited for the financial year ended
30 June 2020, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Agrimin Limited and the entities it controlled during the financial year.
Ernst & Young
Pierre Dreyer
Partner
25 September 2020
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
30
Agrimin Limited Annual Report 2020
PD:JG:AGRIMIN:009
This page has been
intentionally left blank.
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE
Other income
Finance income
Finance expenses
Administrative expenses
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Comprehensive loss attributable to:
Owners of the Group
Non-controlling interest
Total comprehensive loss for the period
Loss per share
Basic and diluted loss per share
Note
2020
$
2019
$
159,420
53,230
(30,488)
(1,981,229)
(1,799,067)
5,459
239,433
-
(2,039,490)
(1,794,598)
-
(1,799,067)
-
(1,794,598)
-
(1,799,067)
-
(1,794,598)
(1,794,277)
(4,790)
(1,799,067)
-
-
-
3
4
16
19
(1.00 cents)
(1.06 cents)
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Page | 28
Agrimin Limited Annual Report 2020
33
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE
Assets
Current assets
Cash and cash equivalents
Other receivables
Exploration deposits
Prepayments
Total current assets
Non-current assets
Exploration and evaluation assets
Property, plant and equipment
Right of use asset
Other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Provisions
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserve
Accumulated losses
Total equity interest of the Group
Non-controlling interest
Total equity
Note
2020
$
2019
$
5
6
7
8
9
10
11
12
13
12
13
14
15
16
5,168,894
328,432
172,540
85,571
5,755,437
5,710,460
221,968
173,878
45,851
6,152,157
31,707,281
86,754
267,316
812,521
32,873,872
22,541,862
75,749
-
748,640
23,366,251
38,629,309
29,518,408
1,235,600
231,480
101,133
1,568,213
956,435
175,911
1,132,346
2,023,610
144,840
-
2,168,450
882,980
-
882,980
2,700,559
3,051,430
35,928,750
26,466,978
57,606,724
947,517
(23,304,264)
35,249,977
678,773
35,928,750
46,945,885
1,031,080
(21,509,987)
-
-
26,466,978
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
(cid:3)
34
Agrimin Limited Annual Report 2020
(cid:87)(cid:258)(cid:336)(cid:286)(cid:3)(cid:878)(cid:3)(cid:1006)(cid:1013)(cid:3)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE
l
a
t
o
T
y
t
i
u
q
e
Assets
Current assets
Cash and cash equivalents
Other receivables
Exploration deposits
Prepayments
Total current assets
Non-current assets
Exploration and evaluation assets
Property, plant and equipment
Right of use asset
Other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Provisions
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserve
Accumulated losses
Total equity interest of the Group
Non-controlling interest
Total equity
Note
2020
$
2019
$
5
6
7
8
9
10
11
12
13
12
13
14
15
16
5,168,894
5,710,460
328,432
172,540
85,571
221,968
173,878
45,851
5,755,437
6,152,157
31,707,281
22,541,862
86,754
267,316
812,521
32,873,872
75,749
-
748,640
23,366,251
38,629,309
29,518,408
1,235,600
231,480
101,133
1,568,213
956,435
175,911
1,132,346
2,023,610
144,840
2,168,450
882,980
882,980
2,700,559
3,051,430
35,928,750
26,466,978
57,606,724
947,517
(23,304,264)
35,249,977
678,773
35,928,750
46,945,885
1,031,080
(21,509,987)
26,466,978
-
-
-
-
I
Y
T
U
Q
E
N
I
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
(cid:3)
(cid:87)(cid:258)(cid:336)(cid:286)(cid:3)(cid:878)(cid:3)(cid:1006)(cid:1013)(cid:3)
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(cid:3)
(cid:1004)
(cid:1007)
(cid:878)
(cid:286)
(cid:336)
(cid:258)
(cid:87)
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(cid:3)
Agrimin Limited Annual Report 2020
35
CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Other income
Net cash used in operating activities
Cash flows from investing activities
Payments for exploration and evaluation assets
Net proceeds/(payments) for exploration deposits
Payments for property, plant and equipment
Payments for pre-licence expenditure
Payments for other assets
Proceeds from research and development grant
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Proceeds received from subsidiary’s fundraising
Payment of share issue transaction costs
Repayment of lease liability
Interest payment on lease liability
Cash flows from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
Note
2020
$
2019
$
(2,193,007)
70,469
64,850
(2,057,688)
(1,841,014)
233,657
5,459
(1,601,898)
18
(11,323,271)
(51,974)
(45,847)
(38,881)
(25,000)
1,943,682
(9,541,291)
11,196,771
600,000
(638,266)
(83,231)
(17,861)
11,057,413
(541,566)
5,710,460
5,168,894
(9,887,000)
(81,283)
(80,421)
(68,640)
-
2,008,829
(8,108,515)
10,000,000
-
(510,601)
-
-
9,489,399
(221,014)
5,931,474
5,710,460
5
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
36
Agrimin Limited Annual Report 2020
Page | 31
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Other income
Cash flows from investing activities
Payments for exploration and evaluation assets
Net proceeds/(payments) for exploration deposits
Payments for property, plant and equipment
Payments for pre-licence expenditure
Payments for other assets
Proceeds from research and development grant
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Proceeds received from subsidiary’s fundraising
Payment of share issue transaction costs
Repayment of lease liability
Interest payment on lease liability
Cash flows from financing activities
Note
2020
$
2019
$
(2,193,007)
(1,841,014)
70,469
64,850
233,657
5,459
(11,323,271)
(9,887,000)
(51,974)
(45,847)
(38,881)
(25,000)
(81,283)
(80,421)
(68,640)
1,943,682
(9,541,291)
2,008,829
(8,108,515)
11,196,771
10,000,000
(510,601)
600,000
(638,266)
(83,231)
(17,861)
11,057,413
9,489,399
-
-
-
-
Net decrease in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
(541,566)
5,710,460
5,168,894
(221,014)
5,931,474
5,710,460
5
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE
1. REPORTING ENTITY
Agrimin Limited (the ‘Company’) is a for profit company limited by shares, incorporated and domiciled in Australia whose
shares are publicly traded on the Australian Securities Exchange (‘ASX’). The consolidated financial report comprises the
Company and its wholly owned subsidiaries (referred to as the ‘Group’ and individually as ‘Group Entities’). Agrimin Limited
is primarily involved in the mineral exploration and development of potash projects in Western Australia. The address of the
registered office is 2C Loch Street, Nedlands, Perth, WA, 6009.
The consolidated financial statements were authorised for issue by the Board of Directors on 25 September 2020.
Net cash used in operating activities
18
(2,057,688)
(1,601,898)
2. BASIS OF PREPARATION
(a) Basis of preparation
The consolidated financial statements of the Group are general purpose financial statements for the year ended 30 June
2020 prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian
Accounting Standards Board (AASB) and the Corporations Act 2001.
The consolidated financial statements of Agrimin Limited also comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
The consolidated financial statements have been prepared on historical cost basis and are presented in Australian dollars
which is the functional currency of all entities in the Group.
The accounting policies adopted in the preparation of this consolidated financial report have been consistently applied to all
periods presented, unless otherwise stated.
(b) Adoption of new and revised accounting standards
In the year ended 30 June 2020, the Group adopted AASB 16 Leases (AASB 16) and AASB Interpretation 23 Uncertainty
over Income Tax Treatments (AASB Interpretation 23) for the first time from 1 July 2019. The nature and effect of these
changes as a result of the adoption of these new Accounting Standards are described below. All other standards and
interpretations adopted at 1 July 2019 have no impact on the Groups financial report.
AASB 16 Leases (AASB 16)
The Group adopted AASB 16 with the date of initial recognition being 1 July 2019. In accordance with the transitional
provisions in AASB 16 the standard has been applied.
Lessees are required to recognise right to use assets and lease liabilities for all leases except where the entity has elected
to apply the exemptions to leases with a term of less than 12 months, or leases where the underlying asset is of low value.
Assets and liabilities arising from a lease are initially measured on a present value basis. The measurement includes non-
cancellable lease payments (including inflation-linked payments) and includes payments to be made in optional periods if
the lessee is reasonably certain to exercise an option to extend the lease, or not to exercise an option to terminate the lease.
The standard provides for two approaches to transition: modified retrospective or full retrospective.
The Group adopted the standard using the modified retrospective approach from 1 July 2019. Prior-year comparatives were
not restated. The Group utilised the transitional relief in the standard whereby the right-of-use asset capitalised was equal
to the lease liability at the date of initial adoption. As part of the initial application of AASB 16, the Group has decided not to
apply the new requirements to leases whose term would end within twelve months or where the underlying asset was of low
value. Based on the Group’s assessment, leases of low value assets whose value is less than $12,000. In such cases, the
lease payments have been recognised on a straight-line basis over the lease term as an operating expense.
The effect of adoption of AASB 16 is as follows:
The impact on the consolidated statement of financial position as at the initial adoption date of 1 July 2019 is an increase in
right of use asset of $362,924 and an increase in the lease liability of $362,924.
Page | 31
Page | 32
Agrimin Limited Annual Report 2020
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Nature of the effect of adoption of AASB 16 (Group as lessee)
The Group has a lease contract for its head office. Before the adoption of AASB 16, the Group classified this lease (as
lessee) at the inception date as an operating lease (as it held no finance leases). In an operating lease, the leased property
was not capitalised and the lease payments were recognised as an expense in the consolidated statement of comprehensive
income on a straight-line basis over the lease term.
Upon adoption of AASB 16, the Group applied a single recognition and measurement approach for all leases of which it is
the lessee, except for short-term leases and leases of low-value assets. The Group recognised lease liabilities to make
lease payments and right of use lease assets representing the right to use the underlying assets. In accordance with the
modified retrospective method of adoption of AASB 16, the Group applied AASB 16 at the date of initial application by
measuring the right of use assets based on the amount equal to the lease liabilities. Lease liabilities were recognised based
on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial
application.
Summary of new accounting policies
Set out below are the Group’s new accounting policies upon adoption of AASB 16:
Group as Lessee
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate and amounts
expected to be paid under residual value guarantees. The variable lease payments that do not depend on an index or a rate
are recognised as expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the
amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term or a
change in the in-substance fixed lease payments.
Short-term lease and leases of low-value assets
The Group applies the short-term and lease of low-value assets recognition exemptions to leases that are considered short-
term or of low value (i.e. those leases that have a lease term of 12 months or where the value of the asset is below $12,000.
Lease payments on short-term leases and leases of low-value assets are expensed over the lease term.
Right of use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses,
and adjusted for any remeasurement of lease liabilities. The cost of right of use assets includes the amount of lease liabilities
recognised, initial direct costs incurred and lease payments made at or before the commencement date less any lease
incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease
term, the recognised assets are depreciated on a straight-line basis over the shorter of its estimated useful life and lease
term. Right of use asset are assessed for impairment.
38
Agrimin Limited Annual Report 2020
Page | 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following reconciliation to the opening balance for the lease liabilities as at 1 July 2019 is based on the operating lease
obligations as at 30 June 2019:
Operating lease commitments at 30 June 2019
Discounting of lease liabilities
Less:
Leases of low value assets not recognised
$
406,129
(38,165)
(5,040)
362,924
The weighted-average incremental borrowing rate for lease liabilities recognised as at 1 July 2019 was 5.5%.
The right of use asset capitalised was equal to the lease liability at the date of initial adoption. The right of use asset is being
depreciated on a straight-line basis over the life of the lease.
Leases (policy applied pre 1 July 2019)
Leases where the Group, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases.
Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value
of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other short-
term and long-term payables. Each lease payment is allocated between the liability and finance cost. The finance cost is
charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance
of the liability for each period. The property, plant and equipment acquired under finance leases is accounted for in
accordance with the accounting policy applicable to these assets.
Leases where a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are
classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis
over the period of the lease.
AASB Interpretation 23 Uncertainty over Income Tax Treatment (AASB Interpretation 23)
The Interpretation clarifies the application of the recognition and measurement criteria in AASB 112 Income Taxes when
there is uncertainty over income tax treatments. The Interpretation specifically addresses the following:
Nature of the effect of adoption of AASB 16 (Group as lessee)
The Group has a lease contract for its head office. Before the adoption of AASB 16, the Group classified this lease (as
lessee) at the inception date as an operating lease (as it held no finance leases). In an operating lease, the leased property
was not capitalised and the lease payments were recognised as an expense in the consolidated statement of comprehensive
income on a straight-line basis over the lease term.
Upon adoption of AASB 16, the Group applied a single recognition and measurement approach for all leases of which it is
the lessee, except for short-term leases and leases of low-value assets. The Group recognised lease liabilities to make
lease payments and right of use lease assets representing the right to use the underlying assets. In accordance with the
modified retrospective method of adoption of AASB 16, the Group applied AASB 16 at the date of initial application by
measuring the right of use assets based on the amount equal to the lease liabilities. Lease liabilities were recognised based
on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial
application.
Summary of new accounting policies
Group as Lessee
Lease liabilities
Set out below are the Group’s new accounting policies upon adoption of AASB 16:
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate and amounts
expected to be paid under residual value guarantees. The variable lease payments that do not depend on an index or a rate
are recognised as expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the
amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term or a
change in the in-substance fixed lease payments.
Short-term lease and leases of low-value assets
The Group applies the short-term and lease of low-value assets recognition exemptions to leases that are considered short-
term or of low value (i.e. those leases that have a lease term of 12 months or where the value of the asset is below $12,000.
Lease payments on short-term leases and leases of low-value assets are expensed over the lease term.
Right of use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses,
and adjusted for any remeasurement of lease liabilities. The cost of right of use assets includes the amount of lease liabilities
recognised, initial direct costs incurred and lease payments made at or before the commencement date less any lease
incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease
term, the recognised assets are depreciated on a straight-line basis over the shorter of its estimated useful life and lease
term. Right of use asset are assessed for impairment.
The assumptions an entity makes about the examination of tax treatments by taxation authorities;
How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates;
and
How an entity considers changes in facts and circumstances.
• Whether an entity considers uncertain tax treatments separately;
•
•
•
The Directors have determined that there is no impact, material or otherwise, of this new interpretation on its business.
Page | 33
(cid:3)
(cid:87)(cid:258)(cid:336)(cid:286)(cid:3)(cid:878)(cid:3)(cid:1007)(cid:1008)(cid:3)
Agrimin Limited Annual Report 2020
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(c) New accounting standards and interpretations not yet effective
Australian Accounting Standards that have recently been issued or amended but are not yet effective and have not been
adopted by the Group for the annual reporting year ended 30 June 2020 that are relevant to the Group’s operations are
listed below. The potential effect of these standards is not expected to have a material impact to the Group’s financial
statements.
Application
date
of
standard
1 January
2020
Application
date for
Group
1 July
2020
relevant
amending
standards
Pronouncement Title
Summary
AASB 2018-6
Definition of a
business –
Amendments to
AASB 3
The Standard also clarifies in the Basis for Conclusion
that, under AASB 9, gains and losses arising on
modifications of financial liabilities that do not result in
derecognition should be recognised in profit or loss.
The amendment proposes the clarification of the
definition of a business:
•
To be considered a business, an acquired set of
activities and assets must include, at a minimum,
an input and a substantive process that together
can contribute to the creation of outputs. This
means that it would not be necessary for all the
inputs and processes needed to create outputs
to be acquired for the set of activities and assets
to be a business.
• Removing the statement that a set of activities
and assets is a business if market participants
can replace the missing elements and continue
to produce outputs.
• Revising the definition of ‘outputs’ to focus on
goods and services provided to customers and
removing the reference to the ability to reduce
costs.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Pronouncement Title
Summary
Conceptual
Framework
Conceptual
The revised Conceptual Framework includes some new
1 January
Framework for
concepts, provides updated definitions and recognition
2020
AASB 2019-1
Financial
criteria for assets and liabilities and clarifies some
Reporting and
important concepts.
Application
Application
date
of
standard
date for
Group
1 July
2020
Covid-19 related
The amendment will provide relief to lessees from applying
rent concession –
the guidance on lease modifications to rent concessions
1 June
2020
1 July
2020
Amendment to
arising as a direct consequence of the covid-19 pandemic.
IFRS 16
The amendment does not apply to lessors.
Amendments to References to the Conceptual Framework
in IFRS Standards has also been issued, which sets out
the amendments to affected standards in order to update
references to the revised Conceptual Framework. The
changes to the Conceptual Framework may affect the
application of AASB in situations where no standard
applies to a particular transaction or event. In addition,
relief has been provided in applying AASB 3 and
developing accounting policies for regulatory account
balances using AASB 108 8, such that entities must
continue to apply the definitions of an asset and a liability
(and supporting concepts)
in
the 2010 Conceptual
Framework, and not
the definitions
in
the revised
Conceptual Framework.
As a practical expedient, a lessee may elect not to assess
whether a covid-19 related rent concession from a lessor
is a lease modification. A lessee that makes this election
accounts for any change in lease payments resulting from
the covid-19 related rent concession the same way it would
account for the change under IFRS 16, if the change were
not a lease modification.
The practical expedient applies only to rent concessions
occurring as a direct consequence of the covid-19
pandemic and only if all of the following conditions are met:
•
The change in lease payments results in revised
consideration for the lease that is substantially the
same as, or less than, the consideration for the lease
immediately preceding the change.
• Any reduction
in
lease payments affects only
payments originally due on or before 30 June 2021 (for
example, a rent concession would meet this condition
if it results in reduced lease payments before 30 June
2021 and increased lease payments that extend
beyond 30 June 2021).
There is no substantive change to other terms and
conditions of the lease.
Property, Plant
and Equipment:
The amendment prohibits entities from deducting from the
1 January
cost of an item of property, plant and equipment (PP&E),
2022
1 July
2022
Proceeds before
any proceeds of the sale of items produced while bringing
Intended Use -
Amendments to
IAS 16
that asset to the location and condition necessary for it to
be capable of operating in the manner intended by
management. Instead an entity recognises the proceeds
from selling such items, and the costs of producing those
items, in profit or loss.
1 January
2020
1 July
2020
1 January
2020
1 July
2020
Page | 35
Page | 36
The acquisition does not constitute a ‘business’ if, at
the transaction date, substantially all of the fair value
of the gross assets acquired is concentrated in a
single identifiable asset or group of similar identifiable
assets.
This Standard amends AASB 101 Presentation of
Financial Statements and AASB 108 Accounting
Policies, Changes in Accounting Estimates and
Errors to align the definition of ‘material’ across the
standards and to clarify certain aspects of the
definition. The amendments clarify that materiality will
depend on the nature or magnitude of information. An
entity will need to assess whether the information,
either individually or in combination with other
information, is material in the context of the financial
statements. A misstatement of information is material
if it could reasonably be expected to influence
decisions made by the primary users.
This Standard amends AASB 1054 by adding a
disclosure requirement for an entity intending to
comply with
the
information specified in paragraphs 30 and 31 of
AASB 108 on the potential effect of an IFRS Standard
that has not yet been issued by the AASB so that such
complying with Australian Accounting
entity
Standards can assert compliance with
IFRS
Standards.
IFRS Standards
to disclose
AASB 2018-7
Definition of
Material
(Amendments to
AASB 101 and
AASB 108)
AASB 2019-5
Amendments to
Australian
Accounting
Standards –
Disclosure of the
effect of new
IFRS standards
not yet issued in
Australia
40
Agrimin Limited Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(c) New accounting standards and interpretations not yet effective
Australian Accounting Standards that have recently been issued or amended but are not yet effective and have not been
adopted by the Group for the annual reporting year ended 30 June 2020 that are relevant to the Group’s operations are
listed below. The potential effect of these standards is not expected to have a material impact to the Group’s financial
statements.
Pronouncement Title
Summary
Application
Application
AASB 2018-6
Definition of a
The Standard also clarifies in the Basis for Conclusion
1 January
business –
that, under AASB 9, gains and losses arising on
2020
Amendments to
modifications of financial liabilities that do not result in
AASB 3
derecognition should be recognised in profit or loss.
The amendment proposes the clarification of the
date
of
standard
date for
Group
1 July
2020
definition of a business:
•
To be considered a business, an acquired set of
activities and assets must include, at a minimum,
an input and a substantive process that together
can contribute to the creation of outputs. This
means that it would not be necessary for all the
inputs and processes needed to create outputs
to be acquired for the set of activities and assets
to be a business.
• Removing the statement that a set of activities
and assets is a business if market participants
can replace the missing elements and continue
to produce outputs.
• Revising the definition of ‘outputs’ to focus on
goods and services provided to customers and
removing the reference to the ability to reduce
costs.
The acquisition does not constitute a ‘business’ if, at
the transaction date, substantially all of the fair value
of the gross assets acquired is concentrated in a
single identifiable asset or group of similar identifiable
assets.
standards and to clarify certain aspects of the
definition. The amendments clarify that materiality will
depend on the nature or magnitude of information. An
entity will need to assess whether the information,
either individually or in combination with other
information, is material in the context of the financial
statements. A misstatement of information is material
if it could reasonably be expected to influence
decisions made by the primary users.
AASB 2018-7
Definition of
This Standard amends AASB 101 Presentation of
1 January
Material
Financial Statements and AASB 108 Accounting
2020
(Amendments to
Policies, Changes in Accounting Estimates and
AASB 101 and
Errors to align the definition of ‘material’ across the
AASB 108)
1 July
2020
1 July
2020
Page | 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Pronouncement Title
Summary
Conceptual
Framework
AASB 2019-1
Conceptual
Framework for
Financial
Reporting and
relevant
amending
standards
Covid-19 related
rent concession –
Amendment to
IFRS 16
The revised Conceptual Framework includes some new
concepts, provides updated definitions and recognition
criteria for assets and liabilities and clarifies some
important concepts.
Amendments to References to the Conceptual Framework
in IFRS Standards has also been issued, which sets out
the amendments to affected standards in order to update
references to the revised Conceptual Framework. The
changes to the Conceptual Framework may affect the
application of AASB in situations where no standard
applies to a particular transaction or event. In addition,
relief has been provided in applying AASB 3 and
developing accounting policies for regulatory account
balances using AASB 108 8, such that entities must
continue to apply the definitions of an asset and a liability
the 2010 Conceptual
(and supporting concepts)
the revised
Framework, and not
Conceptual Framework.
The amendment will provide relief to lessees from applying
the guidance on lease modifications to rent concessions
arising as a direct consequence of the covid-19 pandemic.
The amendment does not apply to lessors.
in
the definitions
in
As a practical expedient, a lessee may elect not to assess
whether a covid-19 related rent concession from a lessor
is a lease modification. A lessee that makes this election
accounts for any change in lease payments resulting from
the covid-19 related rent concession the same way it would
account for the change under IFRS 16, if the change were
not a lease modification.
Application
date
of
standard
1 January
2020
Application
date for
Group
1 July
2020
1 June
2020
1 July
2020
The practical expedient applies only to rent concessions
occurring as a direct consequence of the covid-19
pandemic and only if all of the following conditions are met:
•
The change in lease payments results in revised
consideration for the lease that is substantially the
same as, or less than, the consideration for the lease
immediately preceding the change.
in
lease payments affects only
payments originally due on or before 30 June 2021 (for
example, a rent concession would meet this condition
if it results in reduced lease payments before 30 June
2021 and increased lease payments that extend
beyond 30 June 2021).
• Any reduction
AASB 2019-5
Amendments to
This Standard amends AASB 1054 by adding a
1 January
Australian
Accounting
Standards –
disclosure requirement for an entity intending to
2020
comply with
IFRS Standards
to disclose
the
information specified in paragraphs 30 and 31 of
Disclosure of the
AASB 108 on the potential effect of an IFRS Standard
effect of new
IFRS standards
not yet issued in
Australia
that has not yet been issued by the AASB so that such
entity
complying with Australian Accounting
Standards can assert compliance with
IFRS
Standards.
Property, Plant
and Equipment:
Proceeds before
Intended Use -
Amendments to
IAS 16
There is no substantive change to other terms and
conditions of the lease.
The amendment prohibits entities from deducting from the
cost of an item of property, plant and equipment (PP&E),
any proceeds of the sale of items produced while bringing
that asset to the location and condition necessary for it to
be capable of operating in the manner intended by
management. Instead an entity recognises the proceeds
from selling such items, and the costs of producing those
items, in profit or loss.
1 January
2022
1 July
2022
Page | 36
Agrimin Limited Annual Report 2020
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Pronouncement Title
Summary
AASB 2014-10
AASB 2014-10
Amendments to
Australian
Accounting
Standards – Sale
or Contribution of
Assets between
and investor and
its Associate or
Joint Venture
Amendments to
Australian
Accounting
Standards – Sale
or Contribution of
Assets between
and investor and
its Associate or
Joint Venture
Onerous
Contracts –
Costs of fulfilling
a contract –
Amendments to
IFRS 137
Classifications of
liabilities as
current or non-
current –
Amendments to
IAS1
The amendments clarify that a full gain or loss is
recognised when a transfer to an associate or joint
venture involves a business as defined in AASB 3
Business Combinations. Any gain or loss resulting from
the sale or contribution of assets that does not
constitute a business, however, is recognised only to
the extent of unrelated investors’ interests in the
associate or joint venture.
The amendments clarify that a full gain or loss is
recognised when a transfer to an associate or joint
venture involves a business as defined in AASB 3
Business Combinations. Any gain or loss resulting from
the sale or contribution of assets that does not
constitute a business, however, is recognised only to
the extent of unrelated investors’ interests in the
associate or joint venture.
‘directly related cost
The amendments apply a
approach’.
The costs that relate directly to a contract to provide
goods or services include both incremental costs (e.g.,
the costs of direct labour and materials) and an
allocation of costs directly related to contract activities
(e.g., depreciation of equipment used to fulfil the
contract as well as costs of contract management and
supervision). General and administrative costs do not
relate directly to a contract and are excluded unless
they are explicitly chargeable to the counterparty under
the contract.
The amendments clarify:
• What is meant by a right to defer settlement.
•
That a right to defer must exist at the end of the
reporting period.
That classification is unaffected by the likelihood
that an entity will exercise its deferral right.
That only
in a
if an embedded derivative
convertible liability is itself an equity instrument,
would the terms of a liability not impact its
classification.
•
•
Right to defer settlement
The Board decided that if an entity’s right to defer
settlement of a liability is subject to the entity complying
with specified conditions, the entity has a right to defer
settlement of the liability at the end of the reporting
period if it complies with those conditions at that date.
Existence at the end of the reporting period
The amendments also clarify that the requirement for
the right to exist at the end of the reporting period
applies regardless.
of whether the lender tests for compliance at that date
or at a later date.
(cid:3)
(cid:3)
(cid:3)
42
Agrimin Limited Annual Report 2020
Application
date
of
standard
1 January
2022
Application
date for
Group
1 July
2022
1 January
2022
1 July
2022
1 January
2022
1 July
2022
1 January
2022
1 July
2022
(cid:87)(cid:258)(cid:336)(cid:286)(cid:3)(cid:878)(cid:3)(cid:1007)(cid:1011)(cid:3)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Pronouncement Title
Summary
Application
Application
(d) Going concern
date
of
standard
date for
Group
1 July
2022
AASB 2014-10
Amendments to
The amendments clarify that a full gain or loss is
1 January
Australian
Accounting
recognised when a transfer to an associate or joint
2022
venture involves a business as defined in AASB 3
Standards – Sale
Business Combinations. Any gain or loss resulting from
or Contribution of
the sale or contribution of assets that does not
Assets between
constitute a business, however, is recognised only to
and investor and
the extent of unrelated investors’ interests in the
its Associate or
associate or joint venture.
Joint Venture
AASB 2014-10
Amendments to
The amendments clarify that a full gain or loss is
1 January
Australian
Accounting
recognised when a transfer to an associate or joint
2022
venture involves a business as defined in AASB 3
1 July
2022
Standards – Sale
Business Combinations. Any gain or loss resulting from
or Contribution of
the sale or contribution of assets that does not
Assets between
constitute a business, however, is recognised only to
and investor and
the extent of unrelated investors’ interests in the
its Associate or
associate or joint venture.
Joint Venture
Onerous
Contracts –
approach’.
The amendments apply a
‘directly related cost
1 January
2022
1 July
2022
1 January
2022
1 July
2022
Costs of fulfilling
The costs that relate directly to a contract to provide
a contract –
goods or services include both incremental costs (e.g.,
Amendments to
the costs of direct labour and materials) and an
IFRS 137
allocation of costs directly related to contract activities
(e.g., depreciation of equipment used to fulfil the
contract as well as costs of contract management and
supervision). General and administrative costs do not
relate directly to a contract and are excluded unless
they are explicitly chargeable to the counterparty under
Classifications of
The amendments clarify:
the contract.
liabilities as
current or non-
current –
Amendments to
IAS1
•
•
•
• What is meant by a right to defer settlement.
That a right to defer must exist at the end of the
reporting period.
That classification is unaffected by the likelihood
that an entity will exercise its deferral right.
That only
if an embedded derivative
in a
convertible liability is itself an equity instrument,
would the terms of a liability not impact its
classification.
Right to defer settlement
The Board decided that if an entity’s right to defer
settlement of a liability is subject to the entity complying
with specified conditions, the entity has a right to defer
settlement of the liability at the end of the reporting
period if it complies with those conditions at that date.
Existence at the end of the reporting period
The amendments also clarify that the requirement for
the right to exist at the end of the reporting period
of whether the lender tests for compliance at that date
applies regardless.
or at a later date.
(cid:3)
(cid:3)
(cid:3)
This consolidated financial report has been prepared on the going concern basis, which assumes continuity of normal
business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Group has incurred a loss after tax of $1,799,067 (2019: $1,794,598) and had net cash outflows from operations and
investing of $10,998,979 (2019: $9,710,413). The Group has no source of operating cash inflows other than interest income
and funds sourced through capital raising activities. At 30 June 2020, the Group has cash and cash equivalents totalling
$5,168,894 (2019: $5,710,460) and net working capital (current assets less current liabilities) of $4,187,224 (2019:
$3,983,707).
The Group continued to actively manage its operating and overhead expenditure by successfully completing a capital raising
of $8,250,000 (before costs) via a placement to institutional and sophisticated investors in September 2019 and $2,946,771
from a partially underwritten pro-rata non-renounceable rights issue in May 2020.
The Group’s cashflow forecast for the period ending 30 September 2021 reflects that the Group will be required to raise
additional working capital during the 12-month period. The Directors consider that the Group is a going concern and
recognises that additional funding is required to ensure that it can continue to fund its operations during the twelve-month
period from the date of this report. The Directors believe that such additional funding, as the Group has successfully
accessed previously, can be derived from raising additional capital to fund the Group’s ongoing operational and working
capital requirements, as and when required.
Accordingly, the Directors believe that the Group will be able to obtain sufficient funding to enable it to continue as a going
concern and that it is appropriate to adopt that basis in the preparation of the financial report.
In the longer term, the development of economically recoverable mineral deposits found on the Group’s existing exploration
properties or future exploration properties depends on the ability of the Group to obtain financing through equity financing,
debt financing or other means. If the Group’s exploration programs are ultimately successful, additional funds will be required
to develop the Group’s properties and place them into commercial production. The main source of future funds presently
available to the Group is the raising of equity capital by the Group. The ability to arrange such funding in the future will
depend in part upon the prevailing capital market conditions as well as the business performance of the Group and its
exploration results. The global economic outlook is facing uncertainty due to COVID-19 pandemic, which has created
volatility in capital markets and share prices. This may adversely affect the Group’s ability to arrange additional funding in
the future.
Should the Group be unable to obtain sufficient funding as outlined above, there is a material uncertainty that may cast
significant doubt whether it will be able to continue as going concern and therefore, whether it will realise its assets and
extinguish its liabilities in the normal course of business and at the amounts stated in the consolidated financial statements.
The consolidated financial statements do not include any adjustments relating to the recoverability and classification of
recorded asset amounts or to the amounts and classifications of liabilities that might be necessary should the Group not
continue as a going concern.
(e) Principles of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct
the activities of the entity. The financial statements of the subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases. They are deconsolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group.
The acquisition method of accounting is used to account for business combinations by the Group.
Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition
date. Change of the Groups’ interest in subsidiary that do not result in loss of control are accounted for as equity transactions.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
(cid:87)(cid:258)(cid:336)(cid:286)(cid:3)(cid:878)(cid:3)(cid:1007)(cid:1011)(cid:3)
Page | 38
Agrimin Limited Annual Report 2020
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(f) Segment reporting
Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating
decision maker, which has been identified by the Group as the Chief Executive Officer and other members of the Board of
Directors. The Group operates only in one reportable segment being predominantly in the area of mineral exploration and
evaluation in Western Australia.
(g) Estimates and assumptions
The preparation of these financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements are:
(i) Recoverability of capitalised exploration and evaluation expenditure and pre-license exploration expenditure
The future recoverability of capitalised exploration expenditure and pre-license exploration expenditure is dependent on a
number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully
recovers the related exploration and evaluation asset and pre-license exploration expenditure through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future technological changes
which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and
changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure and pre-license exploration expenditure is determined
not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is made.
In addition, exploration and evaluation is capitalised if activities in the area of interest have not yet reached a stage that
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent it is
determined in the future that this capitalised expenditure should be written off, profits and net assets will be reduced in the
period in which this determination is made.
(ii) Provision for rehabilitation
The Group records the present value of estimated costs of legal and constructive obligations to restore operating locations
in the period in which the obligation is incurred. The nature of restoration activities includes dismantling and removing
structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation
and revegetation of affected areas.
In determining an appropriate level of provision, consideration is given to the expected future costs to be incurred and timing
of these expected future costs. The ultimate cost of decommissioning and restoration is uncertain and costs can vary in
response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques
or experience at other similar mine-sites. The expected timing of expenditure can also change, for example in response to
changes in reserves or to production rates. Changes to any of the estimates are applied prospectively by recognising an
adjustment to the rehabilitation liability.
(iii) Lease
In determining whether the Group’s contracts contain, or are, leases, management must use judgment in assessing whether
the contract provides the customer with the right to substantially all of the economic benefits from the use of the asset during
the lease term and whether the customer obtains the right to direct the use of the asset during the lease term. For those
agreements considered to contain, or be, leases, further judgment is required to determine the lease term by assessing
whether termination or extension options are reasonably certain to be exercised.
44
Agrimin Limited Annual Report 2020
Page | 39
evaluation in Western Australia.
(g) Estimates and assumptions
The preparation of these financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements are:
(i) Recoverability of capitalised exploration and evaluation expenditure and pre-license exploration expenditure
The future recoverability of capitalised exploration expenditure and pre-license exploration expenditure is dependent on a
number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully
recovers the related exploration and evaluation asset and pre-license exploration expenditure through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future technological changes
which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and
changes to commodity prices.
In addition, exploration and evaluation is capitalised if activities in the area of interest have not yet reached a stage that
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent it is
determined in the future that this capitalised expenditure should be written off, profits and net assets will be reduced in the
period in which this determination is made.
(ii) Provision for rehabilitation
The Group records the present value of estimated costs of legal and constructive obligations to restore operating locations
in the period in which the obligation is incurred. The nature of restoration activities includes dismantling and removing
structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation
and revegetation of affected areas.
In determining an appropriate level of provision, consideration is given to the expected future costs to be incurred and timing
of these expected future costs. The ultimate cost of decommissioning and restoration is uncertain and costs can vary in
response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques
or experience at other similar mine-sites. The expected timing of expenditure can also change, for example in response to
changes in reserves or to production rates. Changes to any of the estimates are applied prospectively by recognising an
adjustment to the rehabilitation liability.
(iii) Lease
In determining whether the Group’s contracts contain, or are, leases, management must use judgment in assessing whether
the contract provides the customer with the right to substantially all of the economic benefits from the use of the asset during
the lease term and whether the customer obtains the right to direct the use of the asset during the lease term. For those
agreements considered to contain, or be, leases, further judgment is required to determine the lease term by assessing
whether termination or extension options are reasonably certain to be exercised.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(f) Segment reporting
(h) Determination of fair values
Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating
decision maker, which has been identified by the Group as the Chief Executive Officer and other members of the Board of
Directors. The Group operates only in one reportable segment being predominantly in the area of mineral exploration and
A number of the Group’s accounting policies and disclosures require the determination of fair value for both financial and
non-financial assets and liabilities. When measuring fair value of an asset or liability, the Group uses market observable
data as far as possible.
The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their best economic interest. A fair value measurement of a non-
financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in the
highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques
as follows:
•
•
•
Level 1 – quoted (unadjusted) market price in active markets for identical assets or liabilities;
Level 2 – valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable; and
Level 3 – valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.
If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value
hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
To the extent that capitalised exploration and evaluation expenditure and pre-license exploration expenditure is determined
not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is made.
(i) Finance income
Finance income comprises interest income on funds invested. Interest income is recognised as it accrues in profit or loss,
using the effective interest method which is the rate that exactly discounts estimated future cash receipts over the expected
life of the financial asset to the gross carrying amount of the financial asset.
(j) Finance costs
Finance costs comprise of interest expense on lease liabilities and the unwinding of the discount on provisions.
(k)
Income Tax
Income tax expense comprises current and deferred tax. Current and deferred taxes are recognised in profit or loss except
to the extent that they relate to a business combination, or items recognised directly in equity, or in other comprehensive
income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
(i) Deferred Tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following
temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries to the extent
that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable
temporary differences arising on the recognition of goodwill. Deferred tax is measured at the tax rates that are expected to
be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively
enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity,
or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and
liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that
it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed
at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The Company and its wholly-owned Australian resident entities are part of a tax-consolidated group. All members of the tax-
consolidated group are taxed as a single entity. The head company within the tax-consolidated group is Agrimin Limited.
Page | 39
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Agrimin Limited Annual Report 2020
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(l)
Impairment of non-financial assets
Assets are reviewed for impairment at each reporting date to determine if 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 of disposal and value in use. For the purposes of
assessing impairment, assets are consolidated at the lowest levels for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from other assets (cash-generating units).
Non-financial assets that have been impaired are reviewed for possible reversal of the impairment at each reporting date.
(m) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term highly
liquid investments with original maturities of three months or less.
(n) Exploration deposits
Exploration deposits represent annual tenement rents paid to the Western Australian Department of Mines Industry
Regulations and Safety (DMIRS) in advance when application for tenements was made during the year. These amounts are
held in trust by the DMIRS pending the grant of the tenements and are refundable if for any reason the tenements do not
get granted.
(o) Exploration and evaluation assets
Exploration and evaluation costs are capitalised as exploration and evaluation assets on an area of interest basis. Such
costs comprise net direct costs, research and development expenditure and an appropriate portion of related overhead
expenditure, but do not include general overheads or administrative expenditure not having a specific connection with a
particular area of interest. Costs incurred before the Group has obtained the legal right to explore an area of interest are
recognised in profit or loss.
An exploration and evaluation asset is only recognised if the right to the area of interest is current and either:
•
•
the expenditure is expected to be recouped through successful development and exploitation of an area of interest,
or by its sale; or
activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in or in relation to the area of interest are continuing.
Accumulated costs in respect of areas of interest are recognised in profit or loss when the above criteria do not apply or
when the directors assess that the carrying value may exceed the recoverable amount.
Once a development decision has been taken, all past and future exploration and evaluation expenditure in respect of the
area of interest is aggregated within costs of development. The aggregated cost is first tested for impairment and then
reclassified from exploration and evaluation assets to mining property and development assets within property, plant and
equipment. The costs of a productive area are amortised over the life of the area of interest to which such costs relate on
the production output basis.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and
commercial viability, and facts and circumstances suggest that the carrying amount of the asset exceeds the recoverable
amount. Such indicators of impairment include the following:
•
•
•
•
the right to explore has expired during the period or will expire in the near future and is not expected to be renewed;
substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither
budgeted nor planned;
exploration and evaluation in the specific area has not led to the discovery of commercially viable quantities of
mineral resources and the entity has decided to discontinue such activities in the specific area; or
sufficient data exists to indicate that the carrying amount of the asset is unlikely to be recovered in full from
successful development or by sale even if development in the specific area is likely to proceed.
Page | 41
46
Agrimin Limited Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(l)
Impairment of non-financial assets
Assets are reviewed for impairment at each reporting date to determine if events or changes in circumstances indicate that
For the purpose of impairment testing, exploration and evaluation assets are allocated to cash-generating units consistent
with exploration activity. The cash generating units are not larger than the areas of interest.
the carrying amount may not be recoverable.
(p) Property, plant and equipment
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 of disposal and value in use. For the purposes of
assessing impairment, assets are consolidated at the lowest levels for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from other assets (cash-generating units).
Non-financial assets that have been impaired are reviewed for possible reversal of the impairment at each reporting date.
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term highly
liquid investments with original maturities of three months or less.
Exploration deposits represent annual tenement rents paid to the Western Australian Department of Mines Industry
Regulations and Safety (DMIRS) in advance when application for tenements was made during the year. These amounts are
held in trust by the DMIRS pending the grant of the tenements and are refundable if for any reason the tenements do not
(m) Cash and cash equivalents
(n) Exploration deposits
get granted.
(o) Exploration and evaluation assets
Exploration and evaluation costs are capitalised as exploration and evaluation assets on an area of interest basis. Such
costs comprise net direct costs, research and development expenditure and an appropriate portion of related overhead
expenditure, but do not include general overheads or administrative expenditure not having a specific connection with a
particular area of interest. Costs incurred before the Group has obtained the legal right to explore an area of interest are
recognised in profit or loss.
An exploration and evaluation asset is only recognised if the right to the area of interest is current and either:
the expenditure is expected to be recouped through successful development and exploitation of an area of interest,
or by its sale; or
activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in or in relation to the area of interest are continuing.
Once a development decision has been taken, all past and future exploration and evaluation expenditure in respect of the
area of interest is aggregated within costs of development. The aggregated cost is first tested for impairment and then
reclassified from exploration and evaluation assets to mining property and development assets within property, plant and
equipment. The costs of a productive area are amortised over the life of the area of interest to which such costs relate on
the production output basis.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and
commercial viability, and facts and circumstances suggest that the carrying amount of the asset exceeds the recoverable
amount. Such indicators of impairment include the following:
the right to explore has expired during the period or will expire in the near future and is not expected to be renewed;
substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither
budgeted nor planned;
exploration and evaluation in the specific area has not led to the discovery of commercially viable quantities of
mineral resources and the entity has decided to discontinue such activities in the specific area; or
sufficient data exists to indicate that the carrying amount of the asset is unlikely to be recovered in full from
successful development or by sale even if development in the specific area is likely to proceed.
•
•
•
•
•
•
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment
losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that is integral to
the functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment and is recognised net within other income/other expenses
in profit or loss.
(i) Property, plant and equipment – Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost,
less its residual value.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of
property, plant and equipment since this most closely reflects the expected pattern of consumption of the future economic
benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives
unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.
The estimated useful lives for the current and prior period are as follows:
•
•
plant and equipment
office furniture and equipment
5 years
3 – 5 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(q) Other assets
Pre-license exploration expenditure, which includes the purchase of exploration data or analysis from third parties where
the related exploration license is yet to be granted, is brought to account as an asset at its cost of acquisition if it gives rise
to proprietary information that the Group can control.
Accumulated costs in respect of areas of interest are recognised in profit or loss when the above criteria do not apply or
when the directors assess that the carrying value may exceed the recoverable amount.
(r) Employee benefits
Employee benefits are expensed in the profit or loss and provisions are made for benefits accumulated as a result of
employee rendering services up to the reporting date. These benefits include wages and salaries, annual leave, long service
leave and related on costs such as superannuation, worker’s compensation and payroll tax. The Group’s superannuation is
a defined contribution plan under which fixed contributions are made to a superannuation fund with no further legal or
constructive obligation to pay.
A liability is recognised for the amount expected to be paid under short-term cash bonus plans if the Group has a present
legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation
can be estimated reliably.
Liabilities expected to be settled within twelve months of the reporting date are measured at the amounts expected to be
paid when the liabilities are settled.
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Agrimin Limited Annual Report 2020
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(s) Equity settled transactions
The Group provides benefits to employees (including Directors) and other non-employees of the Group in the form of share-
based payment transactions, whereby employees and consultants render services in exchange for shares or rights over
shares (equity-settled transactions). The cost of these equity-settled transactions with employees is measured by reference
to the fair value at the date at which they are granted.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to
the award (vesting date).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
•
•
the extent to which the vesting period has expired; and
the number of awards that, in the opinion of the Directors will ultimately vest. This opinion is formed based on the
best available information at balance date. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon
a market condition. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled award; and designated as a replacement award on the date that it is granted, the cancelled and new award are
treated as if they were a modification of the original award.
(t) Rehabilitation provision
The Group records the present value of estimated costs of legal and constructive obligations to restore operating locations
in the period in which the obligation is incurred as a result of past events. The nature of restoration activities includes
dismantling and removing structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites
and restoration, reclamation and revegetation of affected areas. When the liability is initially recognised, the present value
of the estimated cost is capitalised by increasing the carrying amount of the related mining assets. Over time, the discounted
liability is increased for the change in present value based on the discount rates that reflect current market assessments
and the risks specific to the liability. The periodic unwinding of the discount is recognised in the statement of comprehensive
income as a finance cost. Additional disturbances or changes in rehabilitation costs are recognised as additions or charges
to the corresponding asset and rehabilitation liability when they occur.
(u) Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a reduction of the share proceeds received.
(v) Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary
shares outstanding during the year, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own
shares held, for the effects of all dilutive potential ordinary shares, which comprise share options and performance rights
granted to employees and agents of the Group.
(w) Research and development government grant
The Group undertakes expenditure on activities that are categorised as eligible expenditure under the Research &
Development Tax Concession which is dependent upon certain criteria and may be subject to a tax offset. Such government
grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will
be complied with.
Where a grant is received or receivable in relation to research and development costs which have been capitalised, the
tax offset shall be deducted from the carrying value of the asset. All other grants received or receivable are recognised as
income in the statement of comprehensive income.
48
Agrimin Limited Annual Report 2020
Page | 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(s) Equity settled transactions
(x) Goods and services tax
The Group provides benefits to employees (including Directors) and other non-employees of the Group in the form of share-
based payment transactions, whereby employees and consultants render services in exchange for shares or rights over
shares (equity-settled transactions). The cost of these equity-settled transactions with employees is measured by reference
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount
of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the
cost of acquisition of the asset or as part of the expense.
to the fair value at the date at which they are granted.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to
the award (vesting date).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
the extent to which the vesting period has expired; and
•
•
the number of awards that, in the opinion of the Directors will ultimately vest. This opinion is formed based on the
best available information at balance date. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon
a market condition. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled award; and designated as a replacement award on the date that it is granted, the cancelled and new award are
treated as if they were a modification of the original award.
(t) Rehabilitation provision
The Group records the present value of estimated costs of legal and constructive obligations to restore operating locations
in the period in which the obligation is incurred as a result of past events. The nature of restoration activities includes
dismantling and removing structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites
and restoration, reclamation and revegetation of affected areas. When the liability is initially recognised, the present value
of the estimated cost is capitalised by increasing the carrying amount of the related mining assets. Over time, the discounted
liability is increased for the change in present value based on the discount rates that reflect current market assessments
and the risks specific to the liability. The periodic unwinding of the discount is recognised in the statement of comprehensive
income as a finance cost. Additional disturbances or changes in rehabilitation costs are recognised as additions or charges
to the corresponding asset and rehabilitation liability when they occur.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a reduction of the share proceeds received.
(u) Issued capital
(v) Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary
shares outstanding during the year, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own
shares held, for the effects of all dilutive potential ordinary shares, which comprise share options and performance rights
granted to employees and agents of the Group.
(w) Research and development government grant
The Group undertakes expenditure on activities that are categorised as eligible expenditure under the Research &
Development Tax Concession which is dependent upon certain criteria and may be subject to a tax offset. Such government
grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will
be complied with.
Where a grant is received or receivable in relation to research and development costs which have been capitalised, the
tax offset shall be deducted from the carrying value of the asset. All other grants received or receivable are recognised as
income in the statement of comprehensive income.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable
to, the Australian Taxation Office (ATO) is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from
investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.
(y) Financial Assets
Financial assets are classified in four categories:
•
•
•
•
Financial assets at amortised cost (debt instruments);
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments);
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments); and
Financial assets at fair value through profit and loss.
(i) Financial Assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both the following
conditions are met:
•
•
The financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are subject
to impairment. Interest received is recognised as part of finance income in comprehensive income. Gains and losses are
recognised in profit or loss when the asset is derecognised, modified or impaired.
(ii) Financial assets at fair value through profit or loss
Financial assets that do not meet the criteria for amortised cost are measured at fair value through profit and loss.
(iii) Impairment of financial assets
Financial assets carried at amortised cost requires an expected credit loss model to be applied as opposed to an incurred
credit loss model under AASB 139. The expected credit loss model requires the Group to account for expected credit losses
and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition
of the financial asset. AASB 9 requires the Group to measure the loss allowance at the amount equal to lifetime expected
credit loss (ECL) if the credit risk on the instrument has increased significantly since initial recognition. On the other hand, if
the credit risk on the financial instrument has not increased significantly since initial recognition, the Group is required to
measure the loss allowance for that financial instrument at an amount equal to the portion of the lifetime ECL that results
from default events on a financial instrument that are possible within 12 months after the reporting date. ECL’s are based
on the difference between contractual cashflows due in accordance with the contract and all the Group expects to receive.
The shortfall is then discounted at an approximation to the assets original effective interest rate.
Page | 43
Page | 44
Agrimin Limited Annual Report 2020
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. ADMINISTRATIVE EXPENSES
Fees, salaries and benefits
External professional fees
Travel and accommodation expenses
Subscriptions and licencing expenses
Insurance expenses
ASX fees
Office rent and outgoings
Depreciation expenses
Depreciation of right of use assets
Other administrative expenses
4.
INCOME TAX
Reconciliation between tax expense and pre-tax accounting loss
Loss for the year
Income tax using the Company’s domestic tax rate 30% (2019: 30%)
Changes in unrecognised temporary difference
Income tax expense
2020
$
2019
$
1,200,373
163,532
90,553
85,779
61,008
56,630
39,585
-
102,379
181,390
899,572
352,113
349,468
40,017
33,318
53,994
98,327
18,428
-
194,253
1,981,229
2,039,490
2020
$
2019
$
(1,799,067)
(1,794,598)
(539,720)
(539,720)
-
(538,379)
(538,379)
-
2020
$
2019
$
Unrecognised deferred tax asset
Deferred tax asset calculated at 30% (2019: 30%) have not been
recognised in respect to the following items:
Deductible temporary differences
Tax losses carried forward
Tax losses and temporary differences brought to account to reduce the
provision for deferred tax liabilities
706,703
475,867
10,016,526
7,373,908
(9,532,620)
(6,679,889)
1,190,609
1,169,886
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have
not been recognised in respect of these items because it is not probable that future taxable profits will be available against
which the Group can utilise the benefits.
50
Agrimin Limited Annual Report 2020
Page | 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. ADMINISTRATIVE EXPENSES
4.
INCOME TAX (CONTINUED)
Fees, salaries and benefits
External professional fees
Travel and accommodation expenses
Subscriptions and licencing expenses
Insurance expenses
ASX fees
Office rent and outgoings
Depreciation expenses
Depreciation of right of use assets
Other administrative expenses
4.
INCOME TAX
Reconciliation between tax expense and pre-tax accounting loss
Loss for the year
Income tax using the Company’s domestic tax rate 30% (2019: 30%)
Changes in unrecognised temporary difference
Income tax expense
2020
$
2019
$
1,200,373
163,532
90,553
85,779
61,008
56,630
39,585
-
102,379
181,390
899,572
352,113
349,468
40,017
33,318
53,994
98,327
18,428
-
194,253
1,981,229
2,039,490
2020
$
2019
$
(1,799,067)
(1,794,598)
(539,720)
(539,720)
-
(538,379)
(538,379)
-
2020
$
2019
$
706,703
475,867
10,016,526
7,373,908
1,190,609
1,169,886
Provision for deferred tax liability
Deferred tax liability comprises the estimated expense at the applicable
rate of 30% (2019: 30%) on the following items:
Exploration and evaluation assets
Other assets
Prepayments and accrued income
Deferred tax asset attributable to tax losses and temporary differences
brought to account to reduce the provision for deferred income tax
5. CASH AND CASH EQUIVALENTS
Cash and bank balances
Short-term deposits
2020
$
2019
$
9,302,934
6,456,947
204,000
25,686
204,000
18,942
(9,532,620)
(6,679,889)
-
-
2020
$
2019
$
5,109,894
59,000
5,168,894
806,460
4,904,000
5,710,460
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day to three months.
6. OTHER RECEIVABLES
Net tax receivable (GST)
Other receivables
Security deposit
Accrued interest
2020
$
2019
$
157,866
147,570
22,947
49
179,233
2,500
22,947
17,288
328,432
221,968
Unrecognised deferred tax asset
Deferred tax asset calculated at 30% (2019: 30%) have not been
recognised in respect to the following items:
Deductible temporary differences
Tax losses carried forward
provision for deferred tax liabilities
Tax losses and temporary differences brought to account to reduce the
(9,532,620)
(6,679,889)
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have
not been recognised in respect of these items because it is not probable that future taxable profits will be available against
which the Group can utilise the benefits.
Page | 45
Page | 46
Agrimin Limited Annual Report 2020
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7. EXPLORATION AND EVALUATION ASSETS
Opening balance
Additions
Transfers from other assets
Refundable research and development grant received
2020
$
2019
$
22,541,862
12,248,323
11,109,101
11,602,368
-
700,000
(1,943,682)
(2,008,829)
31,707,281
22,541,862
The carrying amount of the exploration and evaluation assets at 30 June 2020 relates to the exploration capitalised on the
Mackay Potash Project and the Lake Auld Project.
During the year, the Group issued 250,000 shares to Zinfandel Exploration Pty Ltd as consideration for the purchase of a
granted exploration licence within the Lake Auld area. The shares have been valued at $0.475 on 28 May 2020 being the
date the conditions precedent within the terms of the agreement were satisfied. $118,750 has been capitalised (2019: Nil).
Refer to note 15.
At 30 June 2020, the Group assessed the carrying amount of the assets for impairment. No impairment triggers were present
(2019: Nil).
8. PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Movement in carrying amounts
Opening balance
Additions
Depreciation
2020
$
2019
$
156,875
(70,121)
86,754
75,749
45,847
(34,842)
86,754
111,028
(35,279)
75,749
13,756
80,421
(18,428)
75,749
52
Agrimin Limited Annual Report 2020
Page | 47
The carrying amount of the exploration and evaluation assets at 30 June 2020 relates to the exploration capitalised on the
Mackay Potash Project and the Lake Auld Project.
During the year, the Group issued 250,000 shares to Zinfandel Exploration Pty Ltd as consideration for the purchase of a
granted exploration licence within the Lake Auld area. The shares have been valued at $0.475 on 28 May 2020 being the
date the conditions precedent within the terms of the agreement were satisfied. $118,750 has been capitalised (2019: Nil).
Opening balance
Additions
Transfers from other assets
Refundable research and development grant received
Refer to note 15.
(2019: Nil).
8. PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Movement in carrying amounts
Opening balance
Additions
Depreciation
2020
$
2019
$
22,541,862
12,248,323
11,109,101
11,602,368
-
700,000
(1,943,682)
(2,008,829)
31,707,281
22,541,862
2020
$
2019
$
156,875
(70,121)
86,754
75,749
45,847
(34,842)
86,754
111,028
(35,279)
75,749
13,756
80,421
(18,428)
75,749
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7. EXPLORATION AND EVALUATION ASSETS
9. RIGHT OF USE ASSET
Office lease
At cost
Accumulated depreciation
Movement in carrying amounts
Initial adoption of AASB 16
Increase to right of use asset
Depreciation
2020
$
2019
$
369,695
(102,379)
267,316
362,924
6,771
(102,379)
267,316
-
-
-
-
-
-
-
At 30 June 2020, the Group assessed the carrying amount of the assets for impairment. No impairment triggers were present
At 30 June 2020, the Group assessed the carry amount of the right of use asset for impairment. No impairment triggers
were present (2019: Nil).
10. OTHER ASSETS
Opening balance
Additions
Transfers to exploration and evaluation assets
2020
$
2019
$
748,640
63,881
-
812,521
700,000
748,640
(700,000)
748,640
The carrying amount of other assets at 30 June 2020 relate to the pre-license expenditure for Lake Auld’s Percival Project.
Expenditure will be transferred to exploration and evaluation expenditure upon granting of exploration licenses by DMIRS.
The carrying value includes the non-cash consideration of 1,000,000 ordinary shares issued to Potash Global Limited on 17
December 2019 for services related to the facilitation of Exploration Licence applications covering areas across the Lake
Auld Project. The shares were valued at $680,000 (2019: $680,000) on 12 December 2018, being the date which the
agreement was reached between the parties using the Group’s share price of $0.68 per share.
At 30 June 2020, the Group assessed the carrying amount of its pre-license expenditure for impairment. No impairment
triggers were present (2019: Nil).
Page | 47
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Agrimin Limited Annual Report 2020
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
Other payables
12. PROVISIONS
Current
Employee entitlements
Non-current
Provision for rehabilitation
Provision for rehabilitation
Opening balance
Provisions made during the period
Unwind of discount
2020
$
2019
$
772,807
389,965
72,828
1,324,306
580,744
118,560
1,235,600
2,023,610
2020
$
2019
$
231,480
144,840
956,435
882,980
1,187,915
1,027,820
882,980
60,828
12,627
956,435
784,243
98,737
-
882,980
Employee entitlements relate to the balance of annual leave accrued by the Group’s employees. Recognition and
measurement criteria have been disclosed in note 2.
During the period, the Group assessed its legal and constructive obligation relating to the rehabilitation provision to restore
the operating location to its original condition. The estimated costs of rehabilitation has increased by $73,455 to $956,435
(2019: $882,980).
54
Agrimin Limited Annual Report 2020
Page | 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. TRADE AND OTHER PAYABLES
13. LEASE LIABILITIES
Trade payables
Accrued expenses
Other payables
12. PROVISIONS
Current
Employee entitlements
Non-current
Provision for rehabilitation
Provision for rehabilitation
Opening balance
Provisions made during the period
Unwind of discount
2020
$
2019
$
772,807
389,965
72,828
1,324,306
580,744
118,560
1,235,600
2,023,610
2020
$
2019
$
231,480
144,840
956,435
882,980
1,187,915
1,027,820
882,980
60,828
12,627
956,435
784,243
98,737
-
882,980
Current
Office lease
Non-current
Office lease
Movement for the year
Initial adoption of AASB 16
Increase to lease liability
Lease payment
Interest expense
Amounts recognised in the Consolidated Statement of Comprehensive Income:
Depreciation of right of use assets
Interest expense on lease liability
Expenses on short-term leases
The cash outflow for leases during the period amounts to $139,875.
2020
$
2019
$
101,133
101,133
175,911
175,911
362,924
7,131
(110,872)
17,861
277,044
-
-
-
-
-
-
-
-
-
2020
$
102,379
17,861
1,835
122,075
Employee entitlements relate to the balance of annual leave accrued by the Group’s employees. Recognition and
measurement criteria have been disclosed in note 2.
During the period, the Group assessed its legal and constructive obligation relating to the rehabilitation provision to restore
the operating location to its original condition. The estimated costs of rehabilitation has increased by $73,455 to $956,435
(2019: $882,980).
Page | 49
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(cid:87)(cid:258)(cid:336)(cid:286)(cid:3)(cid:878)(cid:3)(cid:1009)(cid:1004)(cid:3)
Agrimin Limited Annual Report 2020
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. SHARE CAPITAL
Share Capital
Fully paid ordinary shares
Balance at 1 July 2019
Issue of fully paid ordinary shares at $0.55
Issue of fully paid ordinary shares
Issue of fully paid ordinary shares at $0.30
Issue of fully paid ordinary shares at $0.475
Less share issue costs
2020
Number
$
170,618,112
46,945,885
15,000,000
8,250,000
1,000,000
9,822,570
250,000
-
-
2,946,771
118,750
(654,682)
Balance at 30 June 2020 attributable to the owners of the Group
196,690,682
57,606,724
On 17 December 2019 1,000,000 shares were issued to Potash Global Limited for services related to the facilitation of
Exploration Licence applications access Percival Lakes and Lake Auld in Western Australia. Refer to note 15.
During the year, the Group issued 250,000 shares to Zinfandel Exploration Pty Ltd as consideration for the purchase of a
granted exploration licence within the Lake Auld area. The shares have been valued at $0.475 on 28 May 2020 being the
date the conditions precedent within the terms of the agreement were satisfied. $118,750 (2019: Nil) has been capitalised
as exploration and evaluation expenditure. Refer to note 7.
Issued Capital
Balance at 1 July 2018
Issue of fully paid ordinary shares at $0.80
Issue of fully paid ordinary shares at $0.84
Less share issue costs
Balance at 30 June 2019
Ordinary Shares
All issued shares are fully paid.
2019
Number
$
157,118,112
36,616,486
12,500,000
10,000,000
1,000,000
-
840,000
(510,601)
170,618,112
46,945,885
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Company. All shares rank equally with regards to the Company’s residual assets.
(cid:3)
56
Agrimin Limited Annual Report 2020
(cid:87)(cid:258)(cid:336)(cid:286)(cid:3)(cid:878)(cid:3)(cid:1009)(cid:1005)(cid:3)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. RESERVES
Reserves
Share based payment reserve
Opening balance
Issue of 1,000,000 shares to Potash Global Limited
Other equity reserves
Transfer to non-controlling interest
Share based payment reserve
2020
$
2019
$
947,517
947,517
1,031,080
1,031,080
1,031,080
-
1,031,080
351,080
680,000
1,031,080
(83,563)
(83,563)
-
-
On 17 December 2019 1,000,000 shares were issued to Potash Global Limited for services related to the facilitation of
Exploration Licence applications access Percival Lakes and Lake Auld in Western Australia. Refer to note 15.
During the year, the Group issued 250,000 shares to Zinfandel Exploration Pty Ltd as consideration for the purchase of a
granted exploration licence within the Lake Auld area. The shares have been valued at $0.475 on 28 May 2020 being the
date the conditions precedent within the terms of the agreement were satisfied. $118,750 (2019: Nil) has been capitalised
as exploration and evaluation expenditure. Refer to note 7.
On 18 December 2018, the Company announced that it agreed to the future issue of 1,000,000 ordinary shares to Potash
Global Limited for services related to the facilitation of Exploration Licence applications covering areas across Percival Lakes
and Lake Auld within Western Australia. The shares were valued at 12 December 2018, being the date which the agreement
was reached between the parties using the Group’s share price of $0.68 per share.
On 17 December 2019 these shares were issued to Potash Global Limited. The Exploration Licences are yet to be granted
at 30 June 2020.
16. NON-CONTROLLING INTEREST
Non-controlling interest
Breakdown:
Issue of shares to the non-controlling interest
Transfers from reserves
Share of loss for the year
2020
$
2019
$
678,773
678,773
600,000
83,563
(4,790)
678,773
-
-
-
-
-
-
During the year, the Group reduced its interest in Tali Resources Pty Ltd (formerly Agrimin Metals Pty Ltd) to 40% (2019:
100%) with the subsidiary undertaking a fundraising of $600,000 at fair value from employees of Agrimin to maintain the
tenement holdings in good standing. The change in ownership has not resulted in the loss of control of the subsidiary as the
composition of the Tali Resources board consists of all Agrimin key management personnel and Agrimin’s shareholding in
Tali is significantly higher than any other shareholder. A non-controlling interest representing 60% of the share of net assets
has been recognised.
Balance at 30 June 2020 attributable to the owners of the Group
196,690,682
57,606,724
14. SHARE CAPITAL
Share Capital
Fully paid ordinary shares
Balance at 1 July 2019
Issue of fully paid ordinary shares at $0.55
Issue of fully paid ordinary shares
Issue of fully paid ordinary shares at $0.30
Issue of fully paid ordinary shares at $0.475
Less share issue costs
Issued Capital
Balance at 1 July 2018
Issue of fully paid ordinary shares at $0.80
Issue of fully paid ordinary shares at $0.84
Less share issue costs
Balance at 30 June 2019
Ordinary Shares
All issued shares are fully paid.
2020
Number
$
170,618,112
46,945,885
15,000,000
8,250,000
1,000,000
9,822,570
250,000
-
-
2,946,771
118,750
(654,682)
2019
Number
$
157,118,112
36,616,486
12,500,000
10,000,000
1,000,000
-
840,000
(510,601)
170,618,112
46,945,885
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Company. All shares rank equally with regards to the Company’s residual assets.
(cid:3)
(cid:87)(cid:258)(cid:336)(cid:286)(cid:3)(cid:878)(cid:3)(cid:1009)(cid:1005)(cid:3)
Page | 52
Agrimin Limited Annual Report 2020
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. SHARE BASED PAYMENTS
Performance rights
At a general meeting held on 31 July 2014, shareholders approved the establishment of the Agrimin Limited Performance
Rights Plan 2014 (Plan). At a general meeting held on 15 September 2017, the Company obtained approval for the renewal
of the Plan in accordance with the requirements of ASX Listing Rules. The purpose of the Plan was to incentivise and retain
existing key management personnel and other eligible employees needed to achieve the Company's business objectives.
The issuance of Performance Rights under the Plan is at the discretion of the Board. Upon the prescribed performance
conditions attached to the Performance Rights being met, will result in the issue of one ordinary Share in the Company for
each Performance Right.
At balance date the Group had 8,000,000 performance rights outstanding (2019: 8,000,000).
The grant date fair value of the performance rights ranges between $0.51 to $0.84 per right. Due to the effect of the above
non-market condition, no share based payment expense has been recognised at 30 June 2020 (2019: Nil).
Other share based payments
Other share based payments consist of the issue of 1,000,000 ordinary shares to Potash Global Limited. Refer to note 15.
18. STATEMENT OF CASH FLOWS
(a) Reconciliation of cash flows from operating activities
Loss for the year
Non-cash items:
Finance expenses
Depreciation of right of use assets
Depreciation of field equipment
Change in operating assets and liabilities
Increase in other receivables
Increase in prepayments
(Decrease)/increase in trade and other payables
Increase in provisions
2020
$
2019
$
(1,799,067)
(1,794,598)
30,488
102,379
-
-
-
18,428
(106,464)
(39,720)
(317,598)
72,294
(79,351)
(31,533)
262,734
22,422
(2,057,688)
(1,601,898)
(b) Non-cash financing and investing activities
There was $118,750 (2019: $680,000) of non-cash investing activities for the year ended 30 June 2020. Refer to note 15.
58
Agrimin Limited Annual Report 2020
Page | 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. SHARE BASED PAYMENTS
Performance rights
At a general meeting held on 31 July 2014, shareholders approved the establishment of the Agrimin Limited Performance
Rights Plan 2014 (Plan). At a general meeting held on 15 September 2017, the Company obtained approval for the renewal
of the Plan in accordance with the requirements of ASX Listing Rules. The purpose of the Plan was to incentivise and retain
existing key management personnel and other eligible employees needed to achieve the Company's business objectives.
The issuance of Performance Rights under the Plan is at the discretion of the Board. Upon the prescribed performance
conditions attached to the Performance Rights being met, will result in the issue of one ordinary Share in the Company for
each Performance Right.
19. LOSS PER SHARE
(a) Reconciliation of loss
Loss attributable to the owners of the Company used to calculate basic
and diluted loss per share
1,799,067
1,794,598
2020
$
2019
$
At balance date the Group had 8,000,000 performance rights outstanding (2019: 8,000,000).
(b) Weighted average number of ordinary shares used as the denominator
The grant date fair value of the performance rights ranges between $0.51 to $0.84 per right. Due to the effect of the above
non-market condition, no share based payment expense has been recognised at 30 June 2020 (2019: Nil).
Weighted average number of ordinary shares used as the denominator
2020
2019
in calculating basic and diluted loss per share
183,631,431
170,037,290
Other share based payments
Other share based payments consist of the issue of 1,000,000 ordinary shares to Potash Global Limited. Refer to note 15.
18. STATEMENT OF CASH FLOWS
(a) Reconciliation of cash flows from operating activities
Loss for the year
Non-cash items:
Finance expenses
Depreciation of right of use assets
Depreciation of field equipment
Change in operating assets and liabilities
Increase in other receivables
Increase in prepayments
(Decrease)/increase in trade and other payables
Increase in provisions
2020
$
2019
$
(1,799,067)
(1,794,598)
30,488
102,379
(106,464)
(39,720)
(317,598)
72,294
-
18,428
-
-
(79,351)
(31,533)
262,734
22,422
There were no unlisted options outstanding at balance date (2019: Nil). There were 8,000,000 performance rights (2019:
8,000,000) as at balance date. These have been excluded from the weighted average number of ordinary shares calculation
as their effect would have been anti-dilutive. As a result, the diluted loss per share is equal to the basic loss per share.
20. COMMITMENTS
(a) Exploration commitments
As a condition of retaining right to explore its mining tenements, the Group is required to pay an annual rental and incur a
minimum level of expenditure for each tenement.
Outstanding exploration commitments are as follows:
Exploration Commitment
Less than one year
Between one and five years
2020
$
2019
$
1,282,989
5,723.550
7,006,539
2,086,183
10,464,778
12,550,961
(b) Non-cash financing and investing activities
There was $118,750 (2019: $680,000) of non-cash investing activities for the year ended 30 June 2020. Refer to note 15.
21. CONTINGENCIES
The Group had no contingent assets or liabilities at reporting date (2019: Nil).
(2,057,688)
(1,601,898)
The Group has no expenditure commitments on mining tenements which have not been granted.
Page | 53
Page | 54
Agrimin Limited Annual Report 2020
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to market, liquidity and credit risks arising from its financial instruments.
The Group’s management of financial risk is aimed at ensuring net cash flows are sufficient to meet all its financial
commitments and maintain the capacity to fund its exploration and evaluation activities, which primarily relate to the Mackay
Potash Project. The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. Management monitors and manages the financial risks relating to the operations of the Group through regular
reviews of risk.
Market (including interest rate risk), liquidity and credit risks arise in the normal course of business. These risks are managed
under Board approved treasury processes and transactions.
The principal financial instruments as at reporting date include cash, other receivables (excludes net GST receivables and
fuel tax credits), exploration deposits, payables and lease liabilities.
This note presents information about exposures to the above risks, the objectives, policies and processes for measuring
and managing risk, and the management of capital.
(a) Market risk – Interest rate risk
The Group is exposed to movements in market interest rates on cash. The Group’s policy is to monitor the interest rate yield
curve out to six months to ensure a balance is maintained between liquidity of cash assets and the interest rate return. The
entire cash balance for the Group $5,168,894 (2019: $5,710,460) is subject to interest rate risk. The interest rate profile of
the Group’s interest-bearing financial instruments at the reporting date was:
Fixed rate instrument
Term deposits (cash and cash equivalents)
Variable rate instrument
Cash and cash equivalents
Sensitivity Analysis
2020
$
2019
$
59,000
59,000
4,904,000
4,904,000
5,109,894
5,109,894
806,460
806,460
At 30 June 2020, if the interest rates had changed by +/- 80 basis points from the weighted average rate for the period with
all other variables held constant, post tax loss for the Group would have been $40,879 higher/lower (2019: $8,065) as a
result of the lower/higher interest income from cash and cash equivalents. The sensitivity analysis performed was based on
rates available to the Group which management have assessed as being reasonable.
(b) Liquidity risk
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash is
available to meet the current and future commitments of the Group. Due to the nature of the Group’s activities, being mineral
exploration and evaluation, the Group does not have ready access to credit facilities, with the primary source of funding
being equity raisings.
The Board of Directors constantly monitors the state of equity markets in conjunction with the Group’s current and future
funding requirements, with a view to initiating appropriate capital raisings as required.
The financial liabilities of the Group are confined to trade and other payables and lease liabilities. Trade and other payables
are non-interest bearing and are due within 12 months of the reporting date. Lease liabilities are non-interest bearing and is
payable within 1 to 3 years.
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60
Agrimin Limited Annual Report 2020
22. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to market, liquidity and credit risks arising from its financial instruments.
The Group’s management of financial risk is aimed at ensuring net cash flows are sufficient to meet all its financial
commitments and maintain the capacity to fund its exploration and evaluation activities, which primarily relate to the Mackay
Potash Project. The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. Management monitors and manages the financial risks relating to the operations of the Group through regular
reviews of risk.
Market (including interest rate risk), liquidity and credit risks arise in the normal course of business. These risks are managed
under Board approved treasury processes and transactions.
The principal financial instruments as at reporting date include cash, other receivables (excludes net GST receivables and
fuel tax credits), exploration deposits, payables and lease liabilities.
This note presents information about exposures to the above risks, the objectives, policies and processes for measuring
and managing risk, and the management of capital.
(a) Market risk – Interest rate risk
The Group is exposed to movements in market interest rates on cash. The Group’s policy is to monitor the interest rate yield
curve out to six months to ensure a balance is maintained between liquidity of cash assets and the interest rate return. The
entire cash balance for the Group $5,168,894 (2019: $5,710,460) is subject to interest rate risk. The interest rate profile of
the Group’s interest-bearing financial instruments at the reporting date was:
2020
$
2019
$
59,000
59,000
4,904,000
4,904,000
5,109,894
5,109,894
806,460
806,460
Fixed rate instrument
Term deposits (cash and cash equivalents)
Variable rate instrument
Cash and cash equivalents
Sensitivity Analysis
(b) Liquidity risk
being equity raisings.
At 30 June 2020, if the interest rates had changed by +/- 80 basis points from the weighted average rate for the period with
all other variables held constant, post tax loss for the Group would have been $40,879 higher/lower (2019: $8,065) as a
result of the lower/higher interest income from cash and cash equivalents. The sensitivity analysis performed was based on
rates available to the Group which management have assessed as being reasonable.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash is
available to meet the current and future commitments of the Group. Due to the nature of the Group’s activities, being mineral
exploration and evaluation, the Group does not have ready access to credit facilities, with the primary source of funding
The Board of Directors constantly monitors the state of equity markets in conjunction with the Group’s current and future
funding requirements, with a view to initiating appropriate capital raisings as required.
The financial liabilities of the Group are confined to trade and other payables and lease liabilities. Trade and other payables
are non-interest bearing and are due within 12 months of the reporting date. Lease liabilities are non-interest bearing and is
payable within 1 to 3 years.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(c) Credit risk
Exposure to credit risk
The carrying amount of financial assets represent the maximum credit exposure. The maximum exposure to credit risk at
the reporting date was:
2020
$
2019
$
Cash and cash equivalents
Other receivables(i)
Exploration deposits
5,168,894
5,710,460
75,996
172,540
42,735
173,878
5,417,430
5,927,073
(i) Excludes net GST receivable and fuel tax credits.
The Group’s significant concentration of credit risk is cash, which is held with major Australian Banks with Aa3 credit rating
and accordingly the credit risk exposure is minimal. Exploration deposits are held by DMIRS a reputable government
institution.
(d) Fair values
The current term deposits, receivables and payables carrying values approximate their fair values due to the short term-
maturities of these instruments.
(e) Capital management
The Board’s policy is to preserve a strong capital base and maintain investor and equity market confidence in order to sustain
the Group’s exploration and evaluation activities and supporting functions.
The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued capital,
reserves and retained earnings.
There were no changes in the Group’s approach to capital management during the year.
Page | 55
(cid:3)
(cid:3)
(cid:87)(cid:258)(cid:336)(cid:286)(cid:3)(cid:878)(cid:3)(cid:1009)(cid:1010)(cid:3)
Agrimin Limited Annual Report 2020
61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. RELATED PARTY TRANSACTIONS
(a) Key management personnel compensation
Short-term benefits
Post-employment superannuation benefit
Other long-term benefits
2020
$
2019
$
796,201
58,683
39,990
894,874
612,100
50,550
26,153
688,803
(b) Transactions with directors, director related entities and other related parties
During the period $82,000 of fees were paid to Lexcon Services Pty Ltd (2019: $74,000) and $8,000 was payable for
professional services provided by Mr Pismiris as Non-Executive Director and Company Secretary (2019: $6,000).
24. SUBSIDIARIES
Interest in subsidiaries
The consolidated financial statements incorporate the assets and liabilities and results of the following subsidiaries in
accordance with accounting policy:
Name
Agrimin Potash Pty Ltd
Tali Resources Pty Ltd
Principal Activities
Mineral Exploration
Mineral Exploration
Country of Incorporation
Australia
Australia
Equity Holding
2019
2020
%
%
100%
100%
100%
40%
The proportion of ownership interest is equal to the proportion of voting power held.
During the year, the Group reduced its interest in Tali Resources Pty Ltd (formerly Agrimin Metals Pty Ltd) to 40% (2019:
100%) with the subsidiary undertaking a fundraising of $600,000 at fair value from employees of Agrimin to maintain the
tenement holdings in good standing. The change in ownership has not resulted in the loss of control of the subsidiary as the
composition of the Tali Resources board consists of all Agrimin key management personnel and Agrimin’s shareholding in
Tali is significantly higher than any other shareholder. A non-controlling interest representing 60% of the share of net assets
has been recognised. Refer to note 16.
62
Agrimin Limited Annual Report 2020
Page | 57
2020
$
2019
$
796,201
58,683
39,990
894,874
612,100
50,550
26,153
688,803
(b) Transactions with directors, director related entities and other related parties
During the period $82,000 of fees were paid to Lexcon Services Pty Ltd (2019: $74,000) and $8,000 was payable for
professional services provided by Mr Pismiris as Non-Executive Director and Company Secretary (2019: $6,000).
23. RELATED PARTY TRANSACTIONS
(a) Key management personnel compensation
Short-term benefits
Post-employment superannuation benefit
Other long-term benefits
24. SUBSIDIARIES
Interest in subsidiaries
Name
Agrimin Potash Pty Ltd
Tali Resources Pty Ltd
Principal Activities
Mineral Exploration
Mineral Exploration
Country of Incorporation
Australia
Australia
Equity Holding
2020
%
100%
40%
2019
%
100%
100%
The proportion of ownership interest is equal to the proportion of voting power held.
During the year, the Group reduced its interest in Tali Resources Pty Ltd (formerly Agrimin Metals Pty Ltd) to 40% (2019:
100%) with the subsidiary undertaking a fundraising of $600,000 at fair value from employees of Agrimin to maintain the
tenement holdings in good standing. The change in ownership has not resulted in the loss of control of the subsidiary as the
composition of the Tali Resources board consists of all Agrimin key management personnel and Agrimin’s shareholding in
Tali is significantly higher than any other shareholder. A non-controlling interest representing 60% of the share of net assets
has been recognised. Refer to note 16.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25. PARENT ENTITY INFORMATION
The following information relates to the parent entity, Agrimin Limited. The information presented here has been prepared
using accounting policies consistent with those presented in note 2.
The consolidated financial statements incorporate the assets and liabilities and results of the following subsidiaries in
accordance with accounting policy:
Loss for the year
Total comprehensive loss for the year
Current assets
Non-current assets
Total Assets
Current liabilities
Non-current liabilities
Total liabilities
Share capital
Reserves
Accumulated losses
Total Equity
2020
$
2019
$
5,232,642
668,316
5,900,958
1,441,156
175,911
1,617,067
5,968,063
77,749
6,045,812
1,971,327
-
1,971,327
56,647,974
351,080
(52,715,164)
4,283,890
46,105,885
351,080
(42,382,480)
4,074,485
(10,332,684)
(10,332,684)
(22,723,329)
(22,723,329)
The carrying amount of all financial instruments is approximate to their fair values at 30 June 2020 and 2019.
26. REMUNERATION OF AUDITORS
During the year, the following fees were paid or payable to the auditor of the Company, its related practices and non-related
audit firms:
Category 1 – Fees to the group auditor for:
(i) Auditing the statutory financial report of the parent covering the
group
(ii) Auditing the statutory financial report of any controlled entities
Category 2 – Fees for assurance services that are required by
legislation to be provided by the auditor
Category 3 – Fees for other assurance and agreed-upon-
procedures/services under other legislation or contractual
arrangements where there is a discretion as to whether the service is
provided by the auditor or another firm
Category 4 – Fees for other services
27. SUBSEQUENT EVENTS
There were no subsequent events.
2020
$
2019
$
38,000
-
38,000
-
-
34,500
-
34,500
-
60,000
2,500
40,500
-
94,500
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Agrimin Limited Annual Report 2020
63
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
In the opinion of the directors of Agrimin Limited (‘the Company’):
1.
In the opinion of the directors of Agrimin Limited (‘the Company’):
the financial statements and notes set out on pages 32 to 63 are in accordance with the Corporations Act 2001,
including:
1.
the financial statements and notes set out on pages 32 to 63 are in accordance with the Corporations Act 2001,
(a) complying with Accounting Standards and the Corporations Regulations 2001; and
including:
(b) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the
(a) complying with Accounting Standards and the Corporations Regulations 2001; and
year ended on that date;
2.
(b) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
note 2;
year ended on that date;
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
2.
3. subject to the matters set out in note 2(d), there are reasonable grounds to believe that the Company will be able
note 2;
to pay debts as and when they become due and payable; and
3. subject to the matters set out in note 2(d), there are reasonable grounds to believe that the Company will be able
The directors have been given the declarations by the Chief Executive Officer and Chief Commercial Officer required
by section 295A of the Corporations Act 2001.
to pay debts as and when they become due and payable; and
The directors have been given the declarations by the Chief Executive Officer and Chief Commercial Officer required
by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors.
Signed in accordance with a resolution of the directors.
Mark Savich
Chief Executive Officer and Executive Director
Mark Savich
Perth
Chief Executive Officer and Executive Director
25 September 2020
Perth
25 September 2020
64
Agrimin Limited Annual Report 2020
Page | 59
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DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
In the opinion of the directors of Agrimin Limited (‘the Company’):
1.
the financial statements and notes set out on pages 32 to 63 are in accordance with the Corporations Act 2001,
In the opinion of the directors of Agrimin Limited (‘the Company’):
including:
1.
the financial statements and notes set out on pages 32 to 63 are in accordance with the Corporations Act 2001,
(a) complying with Accounting Standards and the Corporations Regulations 2001; and
including:
(b) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the
(a) complying with Accounting Standards and the Corporations Regulations 2001; and
year ended on that date;
2.
(b) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
year ended on that date;
note 2;
2.
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
3. subject to the matters set out in note 2(d), there are reasonable grounds to believe that the Company will be able
note 2;
to pay debts as and when they become due and payable; and
3. subject to the matters set out in note 2(d), there are reasonable grounds to believe that the Company will be able
The directors have been given the declarations by the Chief Executive Officer and Chief Commercial Officer required
by section 295A of the Corporations Act 2001.
to pay debts as and when they become due and payable; and
The directors have been given the declarations by the Chief Executive Officer and Chief Commercial Officer required
by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors.
Signed in accordance with a resolution of the directors.
Chief Executive Officer and Executive Director
Chief Executive Officer and Executive Director
Mark Savich
Mark Savich
Perth
25 September 2020
Perth
25 September 2020
INDEPENDENT AUDITOR’S REPORT
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the members of Agrimin Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Agrimin Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at
30 June 2020, the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors'
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a)
b)
giving a true and fair view of the consolidated financial position of the Group as at 30 June
2020 and of its consolidated financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2(d) in the financial report, which describes the principal conditions that
raise doubt about the Group’s ability to continue as a going concern. These conditions indicate the
existence of a material uncertainty that may cast significant doubt about the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PD:JG:AGRIMIN:008
Agrimin Limited Annual Report 2020
65
INDEPENDENT AUDITOR’S REPORT
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
1. Carrying value of capitalised exploration and evaluation assets
Why significant
How our audit addressed the key audit matter
At 30 June 2020 the Group held capitalised
exploration and evaluation assets of $30.96
million, representing 82% of the Group’s total
assets.
The carrying value of capitalised exploration and
evaluation assets is assessed for impairment by
the Group when facts and circumstances
indicate that this capitalised expenditure may
exceed its recoverable amount.
The determination as to whether there are any
indicators to require capitalised exploration and
evaluation assets to be assessed for impairment,
involves a number of judgments, including
whether the Group has tenure, will be able to
perform ongoing expenditure and whether there
is sufficient information for a decision to be
made that the area of interest is not
commercially viable. The directors did not
identify any impairment indicators as at 30 June
2020.
Refer to Note 7 in the financial report for
capitalised exploration and evaluation asset
balances and related disclosures.
In performing our procedures, we:
► Considered whether the Group’s right to
explore was current, which included
obtaining and assessing supporting
documentation such as license agreements;
► Considered the Group’s intention to carry
out significant ongoing exploration and
evaluation activities in the relevant areas of
interest which included reviewing the
Group’s Board approved cash flow forecast
and enquiring of senior management and the
directors as to their intentions and the
strategy of the Group;
► Assessed whether exploration and
evaluation data exist to indicate that the
carrying value of capitalised exploration and
evaluation is unlikely to be recovered
through development or sale; and
► Assessed the adequacy of the disclosures in
Note 7 of the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
66
Agrimin Limited Annual Report 2020
INDEPENDENT AUDITOR’S REPORT
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2020 Annual Report, 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 we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
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 preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have 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
judgment and maintain professional scepticism throughout the audit. We also:
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Agrimin Limited Annual Report 2020
67
INDEPENDENT AUDITOR’S REPORT
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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 Group’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 Group’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 Group
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
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group 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, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year 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 audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 23 to 29 of the directors' report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Agrimin Limited for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 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.
Responsibilities
Ernst & Young
Pierre Dreyer
Partner
Perth
25 September 2020
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
68
Agrimin Limited Annual Report 2020
INDEPENDENT AUDITOR’S REPORT
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 23 to 29 of the directors' report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Agrimin Limited for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 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.
Ernst & Young
Pierre Dreyer
Partner
Perth
25 September 2020
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Agrimin Limited Annual Report 2020
69
SHAREHOLDER’S INFORMATION
SHAREHOLDER’S INFORMATION
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Stock Exchange Ltd Listing Rules and are not disclosed elsewhere in the
report is as follows. The information is current as at 7 September 2020.
a) DISTRIBUTION OF MEMBER HOLDINGS
1-1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Holders
164
353
181
334
159
1,191
Securities
100,121
1,017,817
1,384,396
11,536,561
182,651,787
196,690,682
%
0.05%
0.52%
0.70%
5.87%
92.86%
100.00%
There are 95 shareholders holding less than a marketable parcel of shares.
b) TWENTY LARGEST SHAREHOLDERS
Listed Ordinary Shares
No. of Ordinary
Shares
Percentage
of issued
capital
JP Morgan Nominees Australia Pty Ltd
Walloon Securities Pty Ltd
Perth Investment Corporation Ltd
Hillboi Nominees Pty Ltd
Gugalanna Holdings Pty Ltd
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd Drp
Invia Custodian Pty Ltd
Spar Nominees Pty Ltd
Goldfire Enterprises Pty Ltd
Zero Nominees Pty Ltd
Deering Nominees Pty Ltd
Mr Timothy Guy Lyons
Eugob Nominees Pty Ltd
ACP Investments Pty Ltd
Mr Timothy Guy Lyons & Mrs Heather Mary Lyons
Mrs Heather Mary Lyons
Gugalanna Pty Ltd
Goldtrain Holdings Pty Ltd
Mr Nicholas Chrispin Lyons
Building on the Rock Limited
29,548,404
10,621,038
8,955,012
8,565,475
7,900,000
7,183,940
6,654,538
5,291,615
4,600,544
4,465,390
3,900,000
3,502,778
3,450,000
3,400,000
2,410,499
2,382,222
2,010,000
2,000,000
1,900,000
1,815,476
120,556,931
Shares on issue as at 7 September 2020 is: 196,690,682.
15.02%
5.40%
4.55%
4.35%
4.02%
3.65%
3.38%
2.69%
2.34%
2.27%
1.98%
1.78%
1.75%
1.73%
1.23%
1.21%
1.02%
1.02%
0.97%
0.92%
61.29%
(cid:87)(cid:258)(cid:336)(cid:286)(cid:3)(cid:878)(cid:3)(cid:1010)(cid:1009)(cid:3)
(cid:3)
70
Agrimin Limited Annual Report 2020
SHAREHOLDER’S INFORMATION
c) SUBSTANTIAL SHAREHOLDERS
SHAREHOLDER’S INFORMATION
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act 2001 are:
AustralianSuper Pty Ltd
Hillboi Nominees Pty Ltd & associated entities
Walloon Securities Pty Ltd
Mark Savich & associated entities
d) VOTING RIGHTS
All shares carry one vote per share without restriction.
Number of
ordinary shares
held
29,517,114
25,815,986
10,621,038
9,910,000
Percentage of
issued capital
15.01%
13.13%
5.40%
5.04%
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Agrimin Limited Annual Report 2020
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TABLE OF CONTENTS
Chairperson’s letter
Review of operations
Directors’ report
Remuneration report
Auditor’s independence declaration
Financial report
Independent auditor’s report
Shareholder’s information
3
5
19
14
30
33
65
70
AGRIMIN LIMITED / ABN 15 122 162
CORPORATE DIRECTORY
DIRECTORS
Richard Seville
Non-Executive Chairperson
Mark Savich
Chief Executive Officer (CEO)
and Executive Director
Brad Sampson
Non-Executive Director
Alec Pismiris
Non-Executive Director
and Company Secretary
REGISTERED OFFICE AND PLACE OF BUSINESS
2C Loch Street
Nedlands, Western Australia, 6009
Telephone: +61 8 9389 5363
AUDITORS
Ernst & Young
11 Mounts Bay Road
Perth, Western Australia, 6000
SHARE REGISTER
Automic Registry Services
Level 2, 267 St Georges Terrace
Perth, Western Australia, 6000
Investor enquiries: 1300 288 664
WEBSITE
www.agrimin.com.au
STOCK EXCHANGE LISTING
Agrimin Limited shares are listed on the Australian Securities
Exchange (ASX: AMN)
Agrimin Limited
www.agrimin.com.au
ANNUAL REPORT
2020
agrimin
AGRIMIN LIMITED ANNUAL REPORT 2020