Annual Report
FOR THE YEAR ENDED 30 JUNE 2021
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TABLE OF
CONTENTS
CHAIRMAN’S LETTER
STRATEGY
SUMMARY OF FINANCIAL PERFORMANCE
CHANGES IN EQUITY
FACTORS AND RISKS AFFECTING FUTURE PERFORMANCE
ADVANCED MATERIALS
QUANTUM TECHNOLOGY
HUMAN HEALTH
MINERAL EXPLORATION
DIRECTORS REPORT
REMUNERATION REPORT (AUDITED)
AUDITOR’S INDEPENDENCE DECLARATION
STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
STATEMENT OF FINANCIAL POSITION
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ADDITIONAL INFORMATION
CORPORATE DIRECTORY
2 Annual Report 2021 / Archer Materials Limited
2 Annual Report 2021 / Archer Materials Limited
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Chairman’s Letter
CHAIRMAN’S
LETTER
We are now a pure
technology-focused company
committed to developing our
12CQ quantum computing
chip and ‘lab-on-a-chip’
biochip technologies.
In last year’s Chairman’s Letter, I reported how we had accelerated our transition
from mineral exploration toward materials technology. I am pleased to report that
we have now completed the transition. We are now a pure technology-focused
company committed to developing our 12CQ quantum computing chip and
‘lab-on- a-chip’ biochip technologies.
Archer is developing these advanced semiconductor devices for commercialisation
in the multibillion-dollar global quantum technology and human health industries.
The Company has now consolidated its technology development to operate
out of a world-class semiconductor research and prototyping foundry in Sydney,
and linked nodes of Australian technology development facilities. Archer’s
strategic access to institutional deep-tech infrastructure allows the Company
to develop both the 12CQ chip and biochip.
The 12CQ chip is a world-first qubit processor technology that Archer aims to
build for quantum computing operation at room temperature and integration
onboard modern electronic devices, to potentially allow for quantum powered
mobile devices.
The first steps in developing the 12CQ chip are to model the qubit behaviour
so that the chip design can be optimised, and then show that individual qubits
can be controlled to perform quantum calculations.
Annual Report 2021 / Archer Materials Limited 3
Annual Report 2021 / Archer Materials Limited 3
Chairman’s Letter
We have made considerable progress in modelling qubit
behaviour and the control of qubits, and the control
measurements going forward would be a world-first,
particularly for solid-state, non-optical quantum computing
systems.
We continued to seek and strengthen collaborations with
quantum computing companies and potential end-users
of our technologies to help advance our development. We
signed a new agreement with IBM, allowing us to retain
membership to the global IBM Quantum Network and the
associated IBM Quantum Startup Program, and to progress
the work initiated under the previous agreement.
In addition to the IBM agreement, we began working with
Max Kelsen, another Australian member of the IBM Quantum
Network, on possible end-use cases for the 12CQ chip.
The collaboration has so far involved adapting a unique
class of quantum algorithms for potential ‘big-data’ related
applications of quantum computing.
We also signed a non-binding letter of intent (LOI) with
the Australian Missile Corporation Pty Ltd, a wholly owned
subsidiary of Australian Defence Prime Contractor NIOA.
By signing the LOI, Archer confirmed its interest in
cooperating with the AMC to help fulfil the Australian
Government’s long-term vision of developing sovereign
Australian defence industrial capabilities.
Archer’s biochip is at an earlier stage of development
than the 12CQ chip. The biochip is nestled within the
product category of MEMS/Sensor devices in the
semiconductor industry.
Our biochip design principles involve using proprietary
graphene-based materials to form the critical sensing
elements in ‘lab-on-a-chip’ technology. One of the most
significant technological barriers to commercialising such
devices involve nanofabrication; another is in assembling
a talented multidisciplinary team. These are the current
focus of Archer of our biochip development.
As we develop our technology and move toward
commercialisation, intellectual property (IP) protection,
and specifically patents, will also become crucial. Patents
would give us the right to stop others from manufacturing,
using and/or selling our technologies in the relevant
jurisdictions without our permission.
In 2018, we entered into a License Agreement with the
University of Sydney that gives Archer the exclusive right to
use, develop and commercialise IP associated to the 12CQ
chip. Patent applications were initially lodged in late 2015 by
the University of Sydney, and this year the first patent was
granted in Japan after substantive examination procedures.
We are working through the patent application procedures
in Europe, Hong Kong, and Australia, after having patents
granted in China, South Korea, Japan and the United States
of America.
Our strategic focus on technology continued with the
completion of the sale of the Leigh Creek Magnesite
Project, the Kelly Tank and Jamieson Tank Projects, and an
agreement with iTech Minerals Ltd for the conditional sale
of all of our remaining mineral tenements. Upon completion
of the iTech sale, Archer will no longer hold any mineral
tenements or projects.
Upon completion of the iTech sale, the Company will
receive 50 million iTech shares which we intend to pass
on to Archer shareholders through a pro-rata in-specie
distribution. Archer will not hold any iTech shares after
the completion of the in-specie distribution. However,
Archer will keep the 2.0% net smelter return (NSR) royalty
granted on the Jamieson Tank and Kelly Tank Projects.
Our evolution from a mineral exploration company to a
deep technology company has been years in the making
and resulted in a change to the composition of our board
of directors.
4 Annual Report 2021 / Archer Materials Limited
In October 2020, Paul Rix resigned as a director. Paul was
instrumental in the design and implementation of the 300-tonne
magnesite bulk trial undertaken by Archer at the Whyalla
Steelworks in 2016, which allowed Archer to maximise the sale
price of the Leigh Creek Magnesite Project.
Ken Williams was appointed to the board on 28 September
2020 and was elected by shareholders at our 2020 Annual
General Meeting. Ken, based in Adelaide, has over 30 years of
experience in corporate finance and has held senior executive,
director, and Chair positions with leading ASX companies.
At the time of writing, Dr Alice McCleary announced her
retirement from the board, to take effect at the 2021 Annual
General Meeting scheduled for 24 November 2021. Alice was
a founding director of Archer and was involved in the transition
of Archer to a deep tech company. Both Alice and Paul were
valuable contributors and will be missed.
As a technology company, the people we employ are just as
important to Archer’s growth and success as our technologies.
Our CEO, Dr Mohammad Choucair, is hiring technology-focused
experts and technicians, and this work will continue into 2022.
We have achieved a significant amount in the past two years
and are well-positioned for an exciting future.
We take this opportunity to thank all our employees for their
dedication and energy in making 2021 a success. We also
express our gratitude to our partners, who provide us with the
laboratories, tools, and equipment to do our work. Finally, we
thank our shareholders for your continued support, trust and
confidence.
GREG ENGLISH
EXECUTIVE CHAIRMAN
Adelaide
Dated this 23rd day of September 2021
Chairman’s Letter
Annual Report 2021 / Archer Materials Limited 5
Operating and Financial Review
STRATEGY
Archer is a technology company that operates within the semiconductor industry. The Company aims to develop
and commercialise advanced semiconductor devices, including chips relevant to quantum computing and medical
diagnostics.
In 2020/21 the Company:
In 2021/22, Archer’s growth involves:
• Successfully achieved electronic transport in a single
• Progressing its world-first technology development,
qubit, and built and tested qubit components and control
devices, to progress the development of the 12CQ
quantum computing chip.
• Progressed international patent applications in Australasia,
the EU, and US, and having a Japanese patent granted in
relation to the 12CQ chip technology.
• Gained commercial access to world class semiconductor
research and prototyping infrastructure and facilities, and
technical experts in Australia and internationally to develop
Archer’s deep tech.
• Signed a new quantum computing agreement with
IBM which supports Archer’s plans to use Qiskit as the
software stack for the 12CQ chip technology and retained
membership to the invite-only global IBM Quantum
Network and associated IBM Quantum Startup Program.
• Commenced building biosensing components of the
Company’s graphene-based biochip technology in an
Australian semiconductor research and prototype foundry.
• Completed the sale of the Leigh Creek Magnesite Project,
the Kelly Tank and Jamieson Tank Projects, and signed an
agreement with iTech Minerals Ltd. for the conditional sale
of all of Archer’s remaining mineral tenements.
including its 12CQ quantum computing chip and graphene-
based lab-on-a-chip biochip.
• Utilising world-class technology development infrastructure
and facilities, R&D, people, and IP, to support pre-market
development.
• Protecting intellectual property assets (e.g. patents and
international patent applications) with global competitive
advantages underpinning the Company’s technology.
• Establishing and strengthening commercial partnerships
advancing the Company’s technology, including
contributing to global networks coordinated by
multinational technology companies.
• Hiring new staff to expedite the development of the
Company’s technology.
• Completing the sale of the Company’s remaining mineral
exploration tenements. With the sale of the Company’s
remaining mineral exploration tenements, Archer will focus
on themes of Quantum Technology and Human Health,
and no longer pursue the theme of Reliable Energy.
6 Annual Report 2021 / Archer Materials Limited
Operating and Financial Review
SUMMARY OF FINANCIAL
PERFORMANCE
These outflows were offset by inflows associated with:
• the exercise of unlisted options ($607,967);
• receipt of a research and development tax incentive
($235,859);
• receipt of an innovation grant ($47,129);
• cash consideration relating to the sale of exploration
assets to ChemX Materials Ltd ($150,000); and
• interest received and Commonwealth Government COVID
stimulus receipts ($60,225)
The net loss of the Group for the year ended 30 June 2021
was $6,593,262 (2020: $2,816,890) after accounting for
R&D tax concession income of $467,662 (2020: $238,859)
and includes:
• net loss for the year from discontinued operations of
$3,786,351 (30 June 2020: $240,173). Refer Note 18;
• unreaslised loss associated with the fair value adjustment
of Archer’s share investments in Volatus Capital Corp as at
30 June 2021 ($1,796,488); and
• share based payments expense of $404,250 representing
the fair value of unlisted options; issued during the year (30
June 2020: $997,000).
The above expense items were offset by the gain on sale of
exploration assets to ChemX Materials Ltd ($1,661,737).
During the year ended 30 June 2021 the Group’s net cash
position decreased by $1,875,583 from $8,114,682 (1 July
2020) to $6,239,099 (30 June 2021) and the Group has no
corporate debt.
This net decrease in cash was predominantly influenced by
cash outflows associated with:
• direct expenditure on advance materials & technology
activities ($974,024);
• intellectual property assets and plant & equipment
($97,076);
• corporate, administration and wages (net of allocations
to advance materials & technology activities) expenditure
($1,569,847); and
• outflows from discontinued operations ($337,067). Refer
Note 18.
Annual Report 2021 / Archer Materials Limited 7
Operating and Financial Review
CHANGES IN
EQUITY
SHARES
The number of shares on issue increased from
224,354,823 (1 July 2020) to 227,506,546 (30 June 2021)
during the year following the exercise of 3,151,723 unlisted
options into shares (exercise price of $0.1929 and expiry
date of 31 March 2023).
UNLISTED OPTIONS
The number of share options on issue decreased from
18,170,000 (1 July 2020) to 14,518,277 (30 June 2021) during
the year as a result of the following events:
• 1,500,000 unlisted options were issued to Director
Kenneth Williams following shareholder approval at
the Company’s Annual General Meeting held on 30
November 2020. The options are exercisable at $0.7695
each and expire on 31 March 2024.
• 3,151,723 unlisted options (exercise price of $0.1929 and
expiry date of 31 March 2023) were exercised into shares.
• 2,000,000 Options previously issued to a consultant
were forfeited. The Options were exercisable at $0.245
each end expiry date of 31 March 2023, and subject to
particular vesting conditions. The Options did not vest
and were forfeited in accordance with the terms on
which they were issued.
PERFORMANCE RIGHTS
There were no performance rights on issue during the year
or as at the date of this report.
DIVIDENDS
There were no dividends paid, recommended or declared
during the current or previous reporting period, or as at the
date of this report.
8 Annual Report 2021 / Archer Materials Limited
Operating and Financial Review
FACTORS AND RISKS
AFFECTING FUTURE
PERFORMANCE
The following describes some of the external factors and business risks that could have a material impact on
the Company’s ability to deliver its strategy:
ACCESS TO FUNDING
COVID-19
The development of the Company’s technologies requires
access to institutional scale infrastructure and facilities
which if shutdown due to COVID-19 would restrict Company
access during the periods of closure.
The Company currently has access to facilities and
collaborators in numerous locations in Australia, Germany,
Switzerland, and the USA to help limit the impact of any
closures. Australian border closures and restrictions on
international and domestic travel may limit the Company’s
ability to hire personnel and perform development work in
facilities interstate and abroad.
KEY PERSONNEL
The Company’s technology is unique, with very few people
available globally with the required knowledge, skills,
relationships, and experience to develop the technologies
towards future commercialisation. The Company’s projects
may be delayed if key personnel are not available to work
on the projects.
The Company does not receive any revenue from its
operating business and the Company is reliant on capital
raisings and the sale of non-core assets to fund its future
operations. Therefore, the Company’s ability to continue to
develop its technology is contingent upon the Company’s
ability to source timely access to additional funding as it is
required.
KEY AGREEMENTS
Development and potential commercialisation of the 12CQ
quantum computing qubit processor chip intellectual
property and associated patents and patent applications
are dependent on the Licence Agreement with the
University of Sydney remaining in-place. Termination of
the Licence Agreement would mean that Archer would
be unable to access the intellectual property required to
commercialise the associated quantum technology. As at
the date of this document, the Company is not aware of
any grounds that the University of Sydney may have to
terminate the Licence Agreement.
INTELLECTUAL PROPERTY
Commercially exploiting and legally protecting the
intellectual property underlying the Company’s technology,
including its graphene-based lab-on-a-chip biochip
technology development, is dependent on the Company
progressing its associated patent applications. The
protection of intellectual property, including patents and
patent applications, has the potential for third-party claims
against the Company’s owned or licensed intellectual
property.
As at the date of this document, the Company is not
aware of third-party claims against the Company’s owned
or licensed intellectual property or any patent or patent
application lapsing, being refused, or expiring.
Annual Report 2021 / Archer Materials Limited 9
Advanced Materials
ADVANCED
MATERIALS
Archer is a technology company that operates within the semiconductor industry. The Company is developing
and potentially commercialising advanced semiconductor devices, including chips relevant to quantum computing
and medical diagnostics. The Company is progressing the development of its 12CQ quantum computing qubit
processor chip and graphene-based ‘lab-on-a-chip’ biochip technology.
10 Annual Report 2021 / Archer Materials Limited
QUANTUM
TECHNOLOGY
12CQ CHIP
Archer’s 12CQ chip is a world-first qubit processor
technology that could allow for mobile quantum computing
powered devices. During the year, the Company
made significant progress in the development and
commercialisation of its 12CQ chip. Progress spanned
technological and commercial development, and
international intellectual property prosecution.
During the year, the Company informed shareholders that
the Office of the NSW Chief Scientist & Engineer published
a comprehensive independent report, titled Australian
Semiconductor Sector Study: Capabilities, opportunities
and challenges for NSW’s meaningful participation in the
global semiconductor value-chain. Archer contributed to
the development of the Sector Study, together with other
semiconductor sector leaders.
The Sector Study identifies the largest areas of opportunity
for the scaleup of companies, such as Archer, in the global
semiconductor industry. These areas include enhancing
domestic capability in semiconductor design, fabrication,
and prototyping. In particular, as it relates to the commercial
translation of advanced materials.
The Sector Study presents a positive long-term outlook
for the potential of increased participation by companies
such as Archer in the global semiconductor sector. Archer’s
current areas of strength and strategic significance across
the semiconductor value chain is reported to include chip
development and securing high-impact intellectual property
in global markets.
(Example of a qubit control device fabricated by the Archer team with
integrated model circuitry on the mounting chip (three rectangles in the centre
of the block) measuring 11 mm x 4 mm. The control circuitry is not visible to the
eye at the image magnification.)
Annual Report 2021 / Archer Materials Limited 11
Annual Report 2021 / Archer Materials Limited 11
Quantum Technology COLLABORATION
WITH A QUANTUM
COMPUTING GIANT
During the year, Archer signed a new quantum computing agreement with International Business Machines
Corporation (“IBM”). Archer and IBM will continue to work together on the advancement of quantum computing.
As part of the new agreement between Archer and IBM,
Archer retains membership to the global IBM Quantum
Network and the associated IBM Quantum Startup Program.
The new agreement also gives Archer the opportunity to
progress the work initiated under the previous agreement.
Archer is one of the first Australian companies developing
quantum computing technology to have joined the
invitation-only, IBM Quantum Network.
The Company entered into a collaboration with IBM
Quantum Network member and leading Artificial Intelligence
and Machine Learning company, Max Kelsen. The
collaboration with Max Kelsen represents a critical step in
the future commercialisation of the 12CQ chip because the
principal purpose of building quantum computing processor
chips is to apply and run quantum algorithms to generate
value from outperforming modern computing.
IBM Quantum Network is a community of Fortune 500
companies, academic institutions, startups, and national
research labs working with IBM to advance quantum
computing.
The technical details of the 12CQ chip development and
details of Archer’s quantum computing collaboration with
IBM was covered in a joint webinar between Archer and
IBM. Over 320 people attended the webinar, which also
focused on the opportunities and economic drivers behind
quantum computing and included an in-depth Q&A session
that was addressed by speakers from Archer and IBM.
Archer CEO Dr Mohammad Choucair delivered the
Quantum Computing keynote presentation at IBM Think
Summit Australia & New Zealand. IBM Think Summit is IBM’s
flagship digital event experience and an award-winning,
virtual event featuring some of the technology industry’s
greatest pioneering minds, focusing on building a better
future.
IBM Think Summit hosted more than 2000 business leaders,
policy advisors, educators, innovators, artists, athletes,
media and industry analysts. Dr Choucair discussed the
Company’s vision on how quantum computing technology
can address complex global challenges.
Dr Choucair also published ‘Why quantum deserves your
attention’ on the IBM website, including a Quantum 101
video with IBM which has been shared with over 50 million
people.
Archer made significant progress with Max Kelsen during
the year in the development of Quantum Neural Networks.
The ongoing collaboration involves adapting a unique class
of quantum algorithms, called Quantum Approximation
Optimisation Algorithms, to be used in the training of
Quantum Neural Networks and more generally Variational
Quantum Eigensolvers. These quantum algorithms could
potentially allow quantum computing devices to outperform
modern computers in solving complex problems with broad
application.
Over the course of the year, Archer signed a non-binding
letter of intent (“LOI”) with the Australian Missile Corporation
Pty Ltd. By signing the LOI the Company confirmed its
interest in cooperating with NIOA’s Australian Missile
Corporation to help fulfil the Australian Government’s long-
term vision of developing sovereign Australian defence
industrial capabilities, in particular, for The Sovereign Guided
Missile Enterprise.
The Company’s commercial partnerships and development
is intrinsically tied to its technology development, and
Archer continued to make technical development progress
on its 12CQ chip during the year. The main area of focus
was on devices’ miniaturisation and qubit control. This
involved measurements on single and few qubits, and
the development of qubit control devices based on
various semiconductor technologies that integrate control
electronics with 12CQ chip qubits. The qubit control devices
that Archer is building are state-of-the-art.
12 Annual Report 2021 / Archer Materials Limited
Quantum Technology QUANTUM COMPUTING
IS REVOLUTIONARY
DEEP TECH
Controlling qubits in Archer’s 12CQ chip requires the design of new and highly complex quantum information
control electronics to integrate with 12CQ chip qubits. The Company is now at a stage of development where
these advanced designs can be (and are being) developed from first principles, modelled using specialised
software, built and tested, all in an end-to-end process.
The work unambiguously showed that a single qubit – the
fundamental quantum information containing material
component of the 12CQ chip – could be used to build
‘gated’ semiconductor devices. This represents a significant
commercial advantage over competing qubit chip device
proposals. The information obtained from the electronic
transport measurements was in excellent agreement
with the quantum mechanical theory of the qubit material
developed by the Company during the year.
The computational quantum mechanical theory that was
developed for the first-time, accurately modelled the
behaviour of the qubit material at the core of Archer’s
12CQ chip.
The computational models validated the origins of
experimentally observed quantum phenomena in the
qubit material and allow the Company to predict future
quantum behaviour. This achievement is fundamental to
the successful development of the chip.
There are very few people and institutions in the world that
can do this type of work and the complexity and importance
of this work to Archer’s 12CQ chip development cannot be
overstated, as the greatest amount of value creation in the
quantum computing economy is generated from technology
development.
Archer’s 12CQ chip development has progressed to utilising
Electromagnetic Finite Element Modelling to build qubit
control devices. The sophisticated modelling facilitates
achieving qubit control of few and single qubits, which are
key milestones in validating 12CQ chip viability. Without this,
12CQ chip operation would not be possible.
Archer built a number of the qubit control devices required
for 12CQ chip development. The Company has engineered
and commenced operating the infrastructure and
specialised equipment required to perform qubit control
using various device configurations.
The Company completed the preliminary stages of
its quantum measurements towards qubit control by
successfully characterising optimised and unoptimised
qubit control devices. The information obtained (e.g. device
response to ‘pulse sequences’) will greatly expedite further
progress in the 12CQ chip qubit control measurements.
During the year, and in parallel to work on qubit control,
Archer achieved a key technological milestone in the
development of its 12CQ chip related to electronic transport
in a single qubit. The work represented a significant
technical achievement because the electronic transport
measurements were performed on a single qubit – only a
few hundred atoms across – and at room temperature.
The achievement of single-qubit electron transport
is fundamental to the successful development of the
12CQ chip. The Company utilised over $150 million of
semiconductor research and prototype foundry facilities and
some of the most advanced instrumentation in the world to
perform the measurements in validation of the 12CQ chip
technology.
Annual Report 2021 / Archer Materials Limited 13
Quantum Technology BUILDING A WORLD-FIRST
QUBIT PROCESSOR
The qubit material models were derived from first principles and to the highest scientific standards internationally
in the field of theoretical condensed matter physics (i.e. not obtained using simple analytical formulas found in
spreadsheets or similar analysis software).
The quantum information in Archer’s chip design is in the
form of an electron’s quantum property of ‘spin’, so it is
critical to have developed accurate models predicting the
electronic properties of the qubit material for the successful
development of the 12CQ chip.
Furthermore, the single-qubit electronic transport verified
claims in the registered Japanese patent, international
patent applications, and scientific publications underpinning
the 12CQ chip technology.
The JP Patent (Patent No. 6809670) was granted during
the year and is the first granted patent protecting the 12CQ
chip. The grant of the JP Patent represents a significant
commercial milestone in Archer’s development of the 12CQ
chip. The grant of the JP Patent gives Archer access to the
high-value Japanese market for the 12CQ chip and is the
first step in the Company’s efforts to access global markets.
The JP Patent application successfully underwent
substantive examination procedures in Japan by the Japan
Patent Office, which is one of the world’s largest patent
offices.
The Company considers Japan as a critical strategic
jurisdiction to protect and commercialise its IP. Japan is a
major global economy and according to the World Economic
Forum, ranks amongst the top 5 economies in the world for
global competitiveness and GDP.
During the year, the international patent applications to
protect and commercialise intellectual property associated
to the 12CQ chip technology continued to progress in a
number of jurisdictions at various stages of the patent
granting procedure.
The critical qubit material component in Archer’s 12CQ chip technology.
A part of the computational model developed that accurately
represents the atom-scale structure of the nanosized qubit material,
used for calculating the qubit materials’ electronic properties for the
first time.
14 Annual Report 2021 / Archer Materials Limited
Quantum Technology ARCHER’S
BIOCHIP
During the year, Archer made a step-change in advancing its graphene-based
biosensor development to newly commence its lab-on-a-chip biochip technology.
This evolution in development was possible in a short
period of time as Archer brought its biotechnology
development in-house and is now able to miniaturise its
biosensing processes to chip-formats while retaining its IP.
Archer’s biochip is a unique graphene-based biotechnology
that the Company is building to enable the complex
detection of some of the world’s most deadly communicable
diseases. Some of the largest technological barriers to
commercialising such devices involve nanofabrication. This
is the current focus of Archer in its biochip development.
During the year, Archer continued to strategically secure
access to local institutional deep-tech infrastructure to
grow its capability in semiconductor prototyping operations
that are essential to the development and potential
commercialisation of the Company’s biochip technology,
including chip testing facilities.
The establishment of semiconductor chip testing would
allow Archer to reach a number of biochip development
milestones, including the fabrication of graphene transistors
and their operation at the limits of what can be achieved
technologically.
The development of Archer’s biochip requires the analysis
and testing of semiconductor device materials components
and the establishment of quality control processes at the
nanoscale. This is because Archer’s biochip technology
integrates materials like graphene, which is one-atom ‘thick’
in size (i.e. a fraction of a nanometre), and device features
that are nanometres in size.
Part of the semiconductor chip probe workstation. Testing of a chip relevant to biochip development. The US and German manufactured state-of-art
semiconductor chip prober and analysers are operated by Archer staff and housed in a specialised cleanroom inside a world-class semiconductor research
and prototype foundry.
Annual Report 2021 / Archer Materials Limited 15
Annual Report 2021 / Archer Materials Limited 15
Human Health Human Health
Disease detection
is limited because
there are only a
handful of materials
in existence that can
perform complex
biosensing.
The progress the Company has made during the
year highlights the complementary nature of Archer’s
technologies; the Company is developing advanced
chips in the same semiconductor fabrication environment,
and the chip testing and prototyping workstations can
also be configured to test chip devices relevant to the
Company’s 12CQ chip.
During the year, the Company brought on permanent
staff to pursue areas of highest value-added activities in its
biochip development. Archer’s team has grown to include
expertise spanning semiconductor device fabrication,
nanoscience and technology, advanced materials
engineering, and molecular biology.
Cross-functional skills capability now exists within the
Archer team, i.e. team members are able to contribute to
both the biochip technology and 12CQ chip development,
while Archer has expanded on its commercial access-
and-use of some of the best instrumentation in the world
to address future biochip development milestones and
accelerate future commercialisation.
16 Annual Report 2021 / Archer Materials Limited
Mineral Exploration
MINERAL
EXPLORATION
The Company did not undertake any in-field exploration activities during FY21.
The primary focus was on the sale of all of the Company’s tenements and associated assets.
• On 12 April 2021, the Company announced the sale of all
of its remaining tenements to iTech Minerals Ltd (‘iTech”)
for 50 million iTech shares. At a general meeting held
on 30 August 2021, Archer shareholders approved the
sale of the mineral tenements to iTech and the proposed
pro-rata in-specie distribution of the 50 million iTech
shares to eligible Archer shareholders. iTech has opened
an initial public offering to raise a minimum of $5 million
and a maximum of $7 million and list on ASX. Completion
of the transaction, and the in-specie distribution of the
iTech shares to Archer shareholders, will take place when
iTech is admitted to the official list of ASX or this condition
precedent is waived. Completion is expected to take place
on or about 11 October 2021.
TENEMENT INTERESTS
The Company’s tenement interests held at 30 June 2021
are detailed at Note 22.
Accordingly:
• In August 2020, the Company completed the sale of the
Leigh Creek Magnesite Project (“Magnesia Project”) to
Magmetal Tech Pty Ltd (“Magmetal”) and Witchimag Pty
Ltd. Magmetal is part owned by Canadian Stock Exchange
listed Volatus Capital Corp, Inc (“Volatus”). The sale
price for the Magnesia Project was $250,000 cash plus
6,535,775 Volatus shares. At completion, the Magnesia
Project had JORC 2012 compliant resources of 17.52Mt
@ 40.2% MgO and JORC 2004 compliant resources of
434.7Mt @ 41.4% MgO.
• The Company sold the Carappee Hill and Waddikee
tenements to ChemX Materials Ltd (formerly Baudin
Minerals Pty Ltd) (“ChemX”). ChemX plans to undertake
an initial public offering and list on ASX. The sale price
was $150,000 cash plus 9.25 million ChemX shares plus
a bonus payment equal to 5% of the enterprise value of
ChemX at the time of ASX listing plus a 2% Net Smelter
Return royalty on the value of all minerals (excluding
graphite) extracted from the tenements.
• The sale to ChemX was completed on 18 June 2021. At
the time of completion, the tenements contained the
Kelly Tank Kaolin Project with a JORC 2012 compliant
Exploration Target of 55Mt – 130Mt at a grade of 33
– 36% Al2O3 (-53 µm size fraction) and the Jamieson
Tank Manganese Project with a JORC 2012 compliant
Exploration Target of 15Mt - 25Mt at a grade of 8 - 12%
manganese. The potential quantity and grade of the
Exploration Targets reported are conceptual in nature,
there has been insufficient exploration to estimate a
Mineral Resource and it is uncertain if further exploration
will result in the estimation of a Mineral Resource.
Annual Report 2021 / Archer Materials Limited 17
Mineral Exploration
JORC RESOURCES
GRAPHITE
EYRE PENINSULA GRAPHITE PROJECT
JORC 2012 Compliant
Project
Category
Cut-off
grade (% Cg)
Tonnes
(Mt)
Graphitic
Carbon %
Contained
Graphite (t)
Campoona Shaft
Central Campoona
Wilclo South
Total Resource
Measured
Indicated
Inferred
Indicated
Inferred
Inferred
> 5.0
> 5.0
> 5.0
> 5.0
> 5.0
> 5.0
0.32
0.78
0.55
0.22
0.30
6.38
8.55
12.7
8.2
8.5
12.3
10.3
8.8
9.0
40,600
64,000
46,800
27,100
30,900
561,400
770,800
CAMPOONA SHAFT AND CENTRAL CAMPOONA
WILCLO SOUTH
The information pertaining to the Campoona Shaft and
Central Campoona Mineral Resource estimates were:
The information pertaining to the Wilclo South Mineral
Resource estimate was:
• detailed in an announcement entitled “Archer Exploration
• extracted from an announcement entitled “Maiden Wilclo
announces Australia’s largest JORC 2012 Graphite
Resources”, lodged with ASX on 6 August 2014.
South Graphite Resource”, lodged by Monax Mining
Limited with ASX on 26 August 2013.
• prepared by Mr B Knell who is a Member of the AusIMM
and peer reviewed by Dr C Gee who is also a Member of
the AusIMM (CP). At the time of the report Mr Knell and
Dr Gee were both full time employees of Mining Plus Pty
Ltd and both qualify as Competent Persons as defined in
the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’.
There has been no change in the Campoona Shaft or
Central Campoona Mineral Resource estimate stated as at
30 June 2021. Accordingly, no comparison is provided.
• prepared by Ms Sharon Sylvester who at the time of the
report Ms Sylvester was a full-time employee of AMC
Consultants Pty Ltd and qualifies as a Competent Person
as defined in the 2012 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and
Ore Reserves’.
There has been no change in the Wilclo South Mineral
Resource estimate stated as at 30 June 2021. Accordingly,
no comparison is provided.
SCOPING STUDY
The Eyre Peninsula Graphite Project Scoping Study was
first released as an ASX announcement entitled “Positive
results from SA Graphite Project scoping study”, lodged
with ASX on 19 September 2016. Archer confirms that all
material assumptions underpinning the production target
and financial information set out in that announcement
continue to apply and have not materially changed.
18 Annual Report 2021 / Archer Materials Limited
Mineral Exploration
KAOLIN
FRANKLYN KAOLIN PROJECT
CONFIRMATION BY ARCHER
The Company confirms it is not aware of any new
information or data that materially affects the information
included in the original market announcements referred to
above and, in the case of estimates of Mineral Resources,
that all material assumptions and technical parameters
underpinning the estimates in the relevant market
announcements continue to apply and have not materially
changed.
The Company confirms that the form and context in which
the Competent Person’s findings are presented have
not been materially modified from the original market
announcement.
GOVERNANCE
Archer maintains strong governance and internal controls
in respect of its estimates of Mineral Resources and
the estimation process. Archer ensures its sampling
techniques, data collection, data veracity and the
application of the collected data is at a high level of industry
standard. Contract RC and diamond drilling with QA/QC
controls approved by Archer are used routinely. All drill
holes are logged by Archer geologists.
Archer employs QC procedures, including addition of
standards, blanks and duplicates ahead of assaying which
is undertaken using industry standards and fully accredited
laboratories. Assay data is continually validated and stored.
Geological models and wireframes are built using careful
geological documentation and interpretations.
Resource estimation is undertaken using industry standard
estimation techniques and include block modelling.
Application of other parameters including cut off grades,
top cuts and classification are all dependent on the style
and nature of mineralisation being assessed.
JORC 2012 Compliant
In an announcement titled “Franklyn Halloysite-Kaolin
Exploration Target”, lodged with ASX on 7 November 2019,
Archer announced a maiden kaolin Exploration Target at
Franklyn of 45Mt – 91Mt at a grade of 30 – 36% Al2O3
(-45 µm size fraction). The Franklyn Exploration Target is
based on historical drilling, across 40 Rotary drill holes
and auger drilling was undertaken by the SA Government
(1971 to 1992).
The potential quantity and grade of the Exploration Target
reported is conceptual in nature, there has been insufficient
exploration to estimate a Mineral Resource and it is
uncertain if further exploration will result in the estimation
of a Mineral Resource at Franklyn.
COMPLIANCE
Competent Person Statement
The Mineral Resources Statement as a whole has been
approved by Wade Bollenhagen who consents to its
inclusion in the Annual Report in the form and context in
which it appears.
The exploration results and exploration targets reported
herein, insofar as they relate to mineralisation, are based
on information compiled by Mr Wade Bollenhagen,
Exploration Manager of Archer Materials Limited.
Mr Bollenhagen is a Member of the Australasian Institute
of Mining and Metallurgy who has more than twenty years’
experience in the field of activity being reported.
Mr Bollenhagen has sufficient experience which is relevant
to the style of mineralisation and type of deposit under
consideration and to the activity that he is undertaking
to qualify as a Competent Person as defined in the
2012 Edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves”
relating to the reporting of Exploration Results.
Mr Bollenhagen consents to the inclusion in the report of
matters based on his information in the form and context in
which it appears.
Annual Report 2021 / Archer Materials Limited 19
DIRECTORS’ REPORT
The Operating and Financial Review (which includes the Chairman’s Letter) of this Annual Report is incorporated by
reference into, and can be found on pages 6 to 19 of this Annual Report.
Your Directors present this report on Archer Materials Limited and its consolidated entities (‘Group’ or ‘Archer’), for the
year ended 30 June 2021.
DIRECTORS
CHIEF EXECUTIVE OFFICER
The following Directors were in office at any time during
or since the end of the financial year:
Greg English – Executive Chairman
Mohammad Choucair held the position of Chief Executive
Officer during the financial year and as at the date of this
report.
Alice McCleary – Independent Non-Executive Director
will retire at the 2021 AGM
COMPANY SECRETARY
Kenneth Williams – Independent Non-Executive Director
appointed 28 September 2020
Paul Rix – Independent Non-Executive Director
resigned 30 October 2020
Damien Connor held the position of Company Secretary
during the financial year and as at the date of this report.
20 Annual Report 2021 / Archer Materials Limited
20 Annual Report 2021 / Archer Materials Limited
Directors’ Report
DIRECTORS
Information on continuing Directors and Management
GREG ENGLISH
ALICE MCCLEARY
KENNETH WILLIAMS
LLB, BE (Mining)
Executive Chairman
DUniv, BEc FCA FTIA FAICD
Director (Non-Executive)
B.Econ(HONS), MAppFin, FAICD
Director (Non-Executive)
Greg English is the co-founder and
Executive Chairman of Archer. He has
been Chairman of the board since
2008 and has overseen Archer’s
transition from a South Australian
focused minerals exploration company
to a materials technology company.
He has more than 25 years of
engineering and legal experience and
has held senior roles for Australian and
multinational companies.
Greg has received recognition for his
work as a lawyer having been regularly
recognised in The Best Lawyers®
in Australia, Adelaide in the area of
Commercial Law.
Greg is an experienced company
director and has also served on the
boards of other ASX listed companies.
He holds a bachelor’s degree in
engineering and a law degree (LLB).
Alice McCleary is a Chartered
Accountant. Alice is a director of .au
Domain Administration Limited, and
Deputy Chair of the Uniting Church of
South Australia’s Resources Board.
She is a former Chairman of ASX
Listed Company Twenty Seven Co.
Limited (ASX:TSC) and former Director
of Adelaide Community Healthcare
Alliance Inc. (ACHA), Benefund Ltd and
Forestry Corporation of South Australia.
Previous leadership roles include
Vice-President of the South Australian
Chamber of Mines and Energy
(SACOME), Deputy Chancellor of
the University of South Australia and
National President of the Taxation
Institute of Australia.
Alice’s professional interests include
financial management and corporate
governance.
Directorships of other ASX Listed
entities in the last 3 years:
Core Lithium Limited (ASX:CXO)
(current), Leigh Creek Energy Limited
(ASX:LCK) (resigned 22 June 2021).
Interest in Shares and Options:
8,997,618 ordinary shares. 5,000,000
unlisted options, exercisable at $0.1929
and expiring on 31 March 2023.
Special Responsibilities:
Executive Chairman. Member, Audit &
Risk Management Committee
Directorships of other ASX Listed
entities in the last 3 years:
Twenty Seven Co. Limited (ASX: TSC)
Interest in Shares:
3,870,761 ordinary shares. Nil Options.
Special Responsibilities:
Chair, Audit & Risk Management
Committee.
Ken was appointed as a Director of
the Company on 28 September 2020.
Ken has over 30 years’ experience in
corporate finance and has held senior
executive, director, and Chair positions
with leading ASX companies.
His extensive experience in corporate
finance includes diverse experience
in mergers, acquisitions, divestments
and corporate reconstructions. Ken is
currently the Independent Chairman
of Statewide Superannuation Trust
(Statewide Super), a South Australian
based industry super fund with
over $10 billion in funds under
management. He is also a member
of Statewide Super’s Investment
Committee and Remuneration &
Nomination Committee.
Ken is also a Director of Lifetime
Support Authority of South Australia.
Prior roles include Chair of AWE
Limited, Chair of Havilah Resources
Limited, and Senior Finance Executive
roles with Newmont Corporation,
Normandy Mining, and Qantas.
Directorships of other ASX Listed
entities in the last 3 years:
Havilah Resources Limited (ASX: HAV),
8IP Emerging Companies Limited
(ASX: 8EC).
Interest in Shares:
Nil Shares. 1,500,000 unlisted options,
exercisable at $0.7695 and expiring on
31 March 2024.
Special Responsibilities:
Member, Audit & Risk Management
Committee.
Annual Report 2021 / Archer Materials Limited 21
Directors’ Report MANAGEMENT
Information on continuing Directors and Management
DR MOHAMMAD CHOUCAIR
DAMIEN CONNOR
CA GAICD AGIA B.Com
Chief Financial Officer / Company Secretary
Damien Connor was appointed Company Secretary and
Chief Financial Officer on 1 August 2014. Damien performs
the financial/accounting role in the Company as well as the
company secretarial duties.
Damien has been a member of the Institute of Chartered
Accountants Australia since 2002 and is a Graduate of the
Australian Institute of Company Directors and an Associate
Member of the Governance Institute of Australia.
Damien has been employed in the resources sector since
2005. He also provides Company Secretary and Chief
Financial Officer services to other ASX-listed and unlisted
entities.
FRSN FRACI GAICD BSc Nanotechnology (Hon. 1),
PhD (Chemistry)
Chief Executive Officer
Dr Mohammad Choucair was appointed CEO of Archer in
December 2017 and is leading the company to develop
disruptive deep tech that address complex global
challenges. Mohammad served a 2-year mandate at the
World Economic Forum on the Global Council for Advanced
Materials and is internationally recognised for his forward-
thinking breakthroughs in Nanotechnology.
He received the Royal Australian Chemical Institute
Cornforth Medal for the most outstanding Chemistry
PhD in Australia and is the inventor of the 12CQ quantum
computing technology.
Mohammad is a Fellow of The Royal Society of New
South Wales and The Royal Australian Chemical Institute,
Alumni of the World Economic Forum, Alumni of the
Australian Graduate School of Management, Graduate of
the Australian Institute of Company Directors, and is an
Honorary Fellow of the University of Sydney. He received
his PhD in Chemistry and BSc in Nanotechnology with
Honours Class 1 from UNSW Sydney.
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and each Board committee held during the year ended
30 June 2021, and the numbers of meetings attended by each Director were as follows:
Director
Board
Audit & Risk Management Committee
Greg English
Alice McCleary
Kenneth Williams 1
Paul Rix 2
A
11
11
9
3
B
11
11
9
3
A
2
2
1
1
1 Appointed on 28 September 2020 2 Resigned on 30 October 2020
Where: Column A is the number of meetings the Director was entitled to attend
Column B is the number of meetings the Director attended
B
2
2
1
1
As at the date of this report, the Group has not formed separate Remuneration or Governance Committees, as these matters are
handled by the Board as a whole. The Board considers this appropriate given the size and nature of the Company at this time.
22 Annual Report 2021 / Archer Materials Limited
Directors’ Report
PRINCIPAL
ACTIVITIES
Archer is a materials technology company with a focus on developing innovative deep tech.
The Company is building and working towards commercialising semiconductor devices including
processor chips and sensors that are relevant to quantum computing and lab-on-a-chip technology.
During the year, the principal activities of the Group were:
• Technology research and development of a quantum
computing qubit processor chip (“12CQ chip”) and
graphene-based lab-on-a-chip biosensing chip (“biochip”).
• Utilising semiconductor development infrastructure and
facilities, R&D, people and IP, to support pre-market
technology development.
• Internationally protecting and prosecuting intellectual
property (e.g. patents and patent applications).
• Collaborating and partnering with organisations in
computing, deep tech, and technology, as part of global
networks coordinated by large companies.
• Sale of the Company’s mineral exploration tenements.
EVENTS ARISING SINCE THE END OF THE
REPORTING PERIOD.
• On 17 July 2021, 200,000 unlisted options previously
issued under the Company’s employee incentive scheme
(exercise price of $0.1929 and expiry date of 31 March
2023) were exercised into ordinary shares.
• At the Company’s General Meeting held on 30 August
2021, Archer shareholders approved the sale of the
Company’s remaining mineral exploration projects to
iTech in return for 50 million iTech shares (Resolution 1)
and the reduction of capital by way of pro-rata In-Specie
Distribution of the 50 million iTech shares to eligible
Archer shareholders (Resolution 2).
SIGNIFICANT CHANGES TO THE STATE OF AFFAIRS
Sale of the Leigh Creek Magnesia Project
On 14 August 2020, the Company announced the
completion of the sale of the Leigh Creek Magnesia Project.
Refer Note 18 for further details.
Sale of two Eyre Peninsula Tenements
On 18 June 2021, the Company announced the completion
of the sale of two Eyre Peninsula tenements (Waddikee and
Carappee Hill) to ChemX Materials Ltd (formerly Baudin
Minerals Pty Ltd and NextGen Materials Pty Ltd). Refer Note
17 for further details.
Sale of subsidiaries to iTech Minerals Ltd
On 12 April 2021, the Company announced that it had
signed a legally binding share sale agreement with
iTech Minerals Ltd (“iTech”) for the sale of all of the three
subsidiary companies that hold Archer’s remaining mineral
tenements (the “Transaction”). At completion of the sale,
the Company will receive 50 million iTech shares which the
Company will disperse to Archer shareholders by way of
a pro-rata in-specie distribution. Refer Note 18 for further
details.
Annual Report 2021 / Archer Materials Limited 23
Annual Report 2021 / Archer Materials Limited 23
Directors’ Report REMUNERATION
REPORT (AUDITED)
The Directors of Archer Materials Limited (the Group) present the Remuneration Report for
Non-Executive Directors, Executive Directors and other Key Management Personnel, prepared
in accordance with the Corporations Act 2001 and the Corporations Regulations 2001.
The names and roles of the Company’s key management
personnel during the year are:
The Remuneration Report is set out under the following
main headings:
• Greg English - Executive Chairman
A. Principles used to determine the nature and amounts
• Alice McCleary - Non-Executive Director
• Kenneth Williams - Non-Executive Director
(appointed 28 September 2020)
• Paul Rix - Non-Executive Director
(resigned 30 October 2020)
of remuneration
B. Details of remuneration
C. Employment Contracts of Directors and other Key
Management Personnel
D. Share based remuneration
• Mohammad Choucair – Chief Executive Officer
E. Bonuses included in remuneration
• Damien Connor - Chief Financial Officer & Company
F. Other information
Secretary
24 Annual Report 2021 / Archer Materials Limited
Directors’ Report
A. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNTS OF REMUNERATION
Each member of the executive team has signed a formal
contract at the time of their appointment covering a range
of matters including their duties, rights, responsibilities and
any entitlements on terminations. The standard contract
sets out the specific formal job description.
USE OF REMUNERATION CONSULTANTS
The Company has not engaged the services of a
remuneration consultant during the year.
VOTING AND COMMENTS MADE AT THE
COMPANY’S 2020 ANNUAL GENERAL MEETING
The Company received 98% ‘for’ votes on its Remuneration
Report for the financial year ending 30 June 2020.
The Company received no specific feedback on its
Remuneration Report at the 2020 Annual General Meeting.
CONSEQUENCES OF PERFORMANCE ON
SHAREHOLDER WEALTH
In considering the Group’s performance and benefits for
shareholder wealth, the Board has regard to the company’s
share price in respect of the current financial year and the
previous four (4) financial years:
Item
Share
price
30 June
2021
30 June
2020
30 June
2019
30 June
2018
30 June
2017
$0.95
$0.60
$0.11
$0.11
$0.036
The Board acts as the remuneration committee as a
consequence of the size of the Board and the Group.
The Board believes that individual salary negotiation is
more appropriate than formal remuneration policies and
external advice and market comparisons are sought where
necessary. The Group discloses the fees and remuneration
paid to all Directors as required by the Corporations Act
2001. The Board recognises that the attraction of high
calibre executives is critical to generating shareholder
value.
The directors and executives receive a superannuation
guarantee contribution required by the government of
9.50% per annum (10% from 1 July 2021) and do not receive
any other retirement benefits. Some individuals, however,
may choose to sacrifice part of their salary to increase
payments towards superannuation and/or elected to
increase superannuation contributions a part of their salary
package.
All remuneration paid to Directors and executives is valued
at the cost to the Group. The Group has established a
Performance Rights Plan and Share Option Plan (Plan) for
the benefit of Directors, officers, senior executives and
consultants.
Options are valued using the Black-Scholes valuation
methodology. Performance Rights are valued using a
Monte Carlo based model and recognised as remuneration
in accordance with the attached vesting conditions. The
Board policy is to remunerate non-executive directors at the
market rates for time, commitment and responsibilities. The
Board determines payments to non-directors and reviews
their remuneration annually, based on market price, duties
and accountability. Independent external advice is sought
when required.
The maximum aggregate amount of fees that can be
paid to non-executive directors is $500,000 per annum
which has not changed since Archer listed on the ASX in
August 2007. These amounts are not linked to the financial
performance of the consolidated Group. However, to align
director’s interests with shareholder interests, the directors
are encouraged to hold shares in Archer.
Annual Report 2021 / Archer Materials Limited 25
Directors’ Report B. DETAILS OF REMUNERATION
Details of the nature and amount of each element of the remuneration
of each key management personnel (KMP) of the Group are shown in the table below:
Director and other Key Management Personnel
Short-term Employee
Benefits
Post
employment
Benefits
Termination
Benefits
Share
Based
Payments
Employee
Year
Cash
Salary &
Fees
$
Cash
Bonus
$
Super-
annuation
$
Termination
Benefits
$
Unlisted
Options 1
$
Total
$
Performance
based
remuneration
%
Executive Directors
Greg English 2
2021
337,900
50,685 3
Executive Chairman
2020
301,370
45,205 3
Non-Executive Directors
Alice McCleary
2021
63,927
Independent
2020
59,361
Kenneth Williams 4
Independent
Paul Rix 5
Independent
2021
2020
2021
48,929
-
21,309
2020
59,361
Other Key Management Personnel
-
-
-
-
-
-
37,169
32,925
6,073
5,639
4,648
-
2,024
5,639
Dr Mohammad
Choucair
2021
230,000
57,239 6
27,574
Chief Executive Officer
2020
175,000
43,750 6
20,781
Damien Connor 7
2021
142,387
Company Secretary
& CFO
2020
126,375
-
-
-
-
Total
Total
2021 844,452
107,924
2020 721,467
88,955
77,488
64,984
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
425,754
296,000
675,500
13.1%
7.3%
-
88,800
70,000
65,570
404,250
457,827
-
-
-
23,333
88,800
153,800
-%
-%
-%
-%
-%
-%
-
314,813
19.9%
207,200
446,731
10.7%
-
142,387
79,050
205,425
-%
-%
404,250
1,434,114
759,850
1,635,257
1
In accordance with Accounting Standards, remuneration includes a portion of the notional value of the options granted during the year. The notional value of
options are determined as at the issue date and is progressively allocated over the vesting period. The amount included as remuneration is not indicative of
the benefit (if any) that the employee may ultimately realise should the option vest and become exercisable. The notional value of the options as at the grant
date has been determined in accordance with the accounting policy detailed at Note 1 and calculation details in Note 15.
2 In addition to cash salary, Piper Alderman Lawyers were paid $53,099 (2020: $29,950) during the year for services rendered to the Group. Mr English is a
partner of Piper Alderman lawyers. The fees were at normal commercial rates.
3 Short-term cash bonus, approved by the non-executive directors, related to KPI achievement, pursuant to Mr English’s employment contract.
4 Kenneth Williams was appointed as a non-executive director on 28 September 2020.
5 Paul Rix resigned as a non-executive director on 30 October 2020.
6 Short-term cash bonus, approved by the Board, related to KPI achievement, pursuant to Dr Choucair’s employment contract.
7 Contract payments are made to Damien Connor Consulting Pty Ltd – an entity associated with Damien Connor.
26 Annual Report 2021 / Archer Materials Limited
Directors’ Report C. EMPLOYMENT OF DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL
Remuneration and other terms of employment for the Directors and other Key Management Personnel are formalised
in either contracts of employment or service agreements. The main provisions of the agreements relating to remuneration
are set out below:
Unit of
Measure
Terms of agreement
Notice Period 1
Name
Greg English
Executive
Chairman
Base
Remuneration
$370,900 per
annum
(inclusive of 9.5%
superannuation) 1
Salaried
employee
Contract term:
Permanent employee, no fixed term.
Short-term incentive bonus:
Discretionary up to 15% of salary each year, is
determined with reference to KPIs as set by the
Board annually.
Long-term incentive bonus:
Entitled to receive Options or Performance
Rights equal to the maximum number of Options
or Performance Rights granted to a director of
the Company in the same financial year, subject
to shareholder approval and KPIs including the
Company’s share price compared with the ASX
Small Ordinaries Resources Index
Calculated based
on reasons for
termination from 4
weeks plus leave
entitlements up
to 12 months’
salary plus leave
entitlements.
Either party
may terminate
by providing 6
months’ notice.
Dr Mohammad
Choucair
Chief Executive
Officer
$251,850 per
annum
Salaried
employee
Contract term:
Permanent employee, no fixed term.
(inclusive of 9.5%
superannuation) 1
Short-term incentive bonus:
Discretionary up to 25% of salary each year,
is determined with reference to KPIs as set by
the Board annually.
Long-term incentive bonus:
Entitled to receive Options or Performance
Rights equal to the maximum number of Options
or Performance Rights granted to a director of
the Company in the same financial year, subject
to shareholder approval and KPIs including the
Company’s share Price compared with the ASX
Small Ordinaries Resources Index
Variable
Damien Connor
Company
Secretary /CFO
Hourly
rate
contract
None. Services as required
Either party
may terminate
by providing 3
months’ notice.
1 Superannuation rate to increase from 9.5% per annum to 10% per annum from 1 July 2021.
Annual Report 2021 / Archer Materials Limited 27
Directors’ Report
D. SHARE-BASED REMUNERATION
UNLISTED OPTIONS (OPTIONS)
All Options refer to options over ordinary shares of the Company, which are exercisable on a one-for-one basis under the
terms of the agreements.
The Group has established a Performance Rights and Share Option Plan for the benefit of Directors, officers, senior
executives and consultants. Under the Performance Rights and Share Option Plan, the Company, through the Board,
may offer Options to eligible persons on such terms that the Board considers appropriate, including any performance
or other vesting hurdles that may apply.
Options granted to KMP during the reporting period
Details of options convertible to ordinary shares in the Company that were granted as remuneration to each KMP
during the year are set out below:
2021 Options
Granted To
Number
Granted
Grant Date
Exercise
Price
Fair Value at Grant Date 1
Vesting Criteria
Expiry Date
$/option
Full Value ($)
K. Williams
1,500,000 30/11/2020 $0.7695
$0.2695
$404,250
Vest on issue date
31/03/2024
1,500,000
$404,250
1 The fair value of options at grant date is determined using a Black Scholes option pricing model as disclosed in the notes to the financial statements
The options issued to Mr Williams were approved by shareholders at the Company’s Annual General Meeting held on
30 November 2020.
Details of options convertible to ordinary shares in the Company that were granted as remuneration to each KMP during
the prior year ended 30 June 2020 are set out below:
2020 Options
Granted To
Number
Granted
Grant Date
Exercise
Price
Fair Value at Grant Date 1
Vesting Criteria
Expiry Date
$/option
Full Value ($)
G. English
5,000,000 30/10/2019 $0.1929
$0.0592
$296,000
Vest on issue date
31/03/2023
A. McCleary
1,500,000 30/10/2019 $0.1929
$0.0592
$88,800
Vest on issue date
31/03/2023
P. Rix 1
1,500,000 30/10/2019 $0.1929
$0.0592
$88,800
Vest on issue date
31/03/2023
M. Choucair
3,500,000 30/10/2019 $0.1929
$0.0592
$207,200
Vest on issue date
31/03/2023
D. Connor
1,500,000 12/11/2019 $0.1929
$0.0527
$79,050
Vest on issue date
31/03/2023
13,000,000
$759,850
1 The fair value of options at grant date is determined using a Black Scholes option pricing model as disclosed in the notes to the financial statements
2 P. Rix retained his options following his resignation on 30 October 2020. No options were exercised by P. Rix prior to his resignation as a director.
The above 13,000,000 options were issued following shareholder approval at the Company’s Annual General Meeting
held on 30 October 2019.
Options to KMP exercised during the reporting period
During the reporting period 1,570,000 Options exercisable at $0.1929 each and expiring on 31 March 2023,
were exercised by KMP.
Options to KMP forfeited, cancelled or lapsed during the reporting period
No Options granted to KMP were forfeited, cancelled or lapsed during the reporting period.
28 Annual Report 2021 / Archer Materials Limited
Directors’ Report PERFORMANCE RIGHTS (RIGHTS)
The Company’s Performance Rights and Share Option Plan provides for the issue of Rights to Directors, employees and
contractors of the Company and its associated body corporates.
All Rights issued under the Plan refer to Rights over ordinary shares of the Company, which are exercisable on a one-for-one
basis under the terms of the agreements. Vesting of Rights is generally subject to the achievement particular performance
conditions as determined by the Board.
There were no Rights issued during the reporting period and none are on issue at the reporting date.
SHARES
There were no shares issued as remuneration during year ended 30 June 2021 (30 June 2020: None).
E. BONUSES INCLUDED IN REMUNERATION
Details of the short-term incentive cash bonuses awarded as remuneration to each key management personnel,
the percentage of the available bonus that was paid in the financial year, and the percentage that was forfeited
because the person did not meet the performance criteria is set out below.
Employee
Included in remuneration ($)
Greg English 1
Executive Chairman
Dr Mohammad Choucair 2
Chief Executive Officer
$62,963
(inclusive of Superannuation)
$55,753
(inclusive of Superannuation)
Percentage vested
during the year
Percentage forfeited
during the year
100%
100%
0%
0%
1 Mr English’s contract of employment provides for a discretionary cash bonus of up to 15% of his salary each year, determined with reference to KPIs set by
the Board annually.
2 For the year ended 30 June 2021, a discretionary cash bonus of up to 25% of salary was offered by the Board, to Dr Choucair, subject to satisfaction of
agreed KPIs for the year ended 30 June 2021.
No other key management personnel were awarded short-term incentive cash bonuses as remuneration during the year
ended 30 June 2021.
Annual Report 2021 / Archer Materials Limited 29
Directors’ Report F. OTHER INFORMATION
OPTION HOLDINGS OF KEY MANAGEMENT PERSONNEL AS AT 30 JUNE
The number of options over ordinary shares in the Company held, directly, indirectly, or beneficially, by each specified
Director and key management personnel, including their personally related entities as at reporting date, is as follows:
2021
Key Management
Personnel
Greg English
Alice McCleary
Held at
30 June 2020
Granted as
Remuneration 1
Exercised
Forfeited/
Lapsed/
Cancelled
Other 2
Held at
30 June 2021
Vested and
Exercisable at
30 June 2021
5,000,000
1,170,000
-
-
-
(1,170,000)
Kenneth Williams
-
1,500,000
Paul Rix
1,500,000
Dr Mohammad Choucair 3,500,000
Damien Connor
1,300,000
-
-
-
-
-
(100,000)
(300,000)
Total
12,470,000
1,500,000
(1,570,000)
-
-
-
-
-
-
-
-
-
-
(1,500,000)
-
-
5,000,000
5,000,000
-
-
1,500,000
1,500,000
-
-
-
3,400,000
1,000,000
1,000,000
(1,500,000)
10,900,000
10,900,000
1 1,500,000 Options were granted to Kenneth Williams following shareholder approval at the Company’s Annual General Meeting held on 30 November
2020. Options were issued for nil consideration on 30 November 2020 and are exercisable at $0.7695 each on or before 31 March 2024. Options vest
immediately on the date of issue and are governed by the terms and conditions of the Company’s Performance Rights and Share Option Plan. An amount
of $404,250 has been expensed to the Statement of Profit or Loss and Other Comprehensive Income under employee benefits expense for the year
ended 30 June 2021. 30 June 2021.
2 Paul Rix resigned on 30 October 2021 and retained the 1,500,000 options previously issued to him.
PERFORMANCE RIGHTS HOLDINGS OF KEY MANAGEMENT PERSONNEL AS AT 30 JUNE
There were no rights to acquire shares in the Company held by KMP during the 2021 reporting period.
SHARE HOLDINGS OF KEY MANAGEMENT PERSONNEL AS AT 30 JUNE
The number of ordinary shares of Archer Materials Limited held, directly, indirectly, or beneficially, by each Director
and key management personnel, including their personally related entities as at reporting date:
2021
Key Management
Personnel
Greg English
Alice McCleary
Kenneth Williams
Paul Rix 2
Dr Mohammad Choucair 2
Damien Connor
Total
Held at
30 June 2020
Granted as
Compensation
8,997,618
2,700,761
-
316,667
2,600,000
167,500
14,782,546
-
-
-
-
-
-
-
Options
Exercised
-
1,170,000
-
-
100,000
300,000
Other
Changes
-
-
-
(316,667)
(100,000)
-
Held at
30 June 2021
8,997,618
3,870,761
-
-
2,600,000
467,500
1,570,000
(416,667)
15,935,879
1 Paul Rix resigned on 30 October 2020.
2 Dr Choucair sold 100,000 shares during the year.
30 Annual Report 2021 / Archer Materials Limited
Directors’ Report TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Transactions with key management personnel and related parties as disclosed below are made on normal commercial
terms and conditions and at market rates. Outstanding balances are unsecured and are repayable in cash.
Amounts paid or payable to key management personnel and related parties/entities:
Related Party
Piper Alderman
Lawyers
Damien Connor
Consulting Pty Ltd
Relationship to Key Managament
Personnel/Director
A business of which Greg English
is a Partner.
A business of which Damien
Connor is a Director
Services
Provided
Legal advice
Finance/Co.
Secretary
consulting fees
2021
$53,099
2020
$29,950
$142,387
$126,375
END OF AUDITED REMUNERATION REPORT
Unissued Shares Under Option
Unissued ordinary shares of Archer Materials Limited under option at the date of this report are:
Issued To
Issue Date
Grant Date
Number of
Options Granted
Option Exercise
Price
Directors 1
Director 1
CEO 1
Company Secretary 1
Other Employees
12/11/2019
30/11/2020
12/11/2019
12/11/2019
12/11/2019
30/10/2019
30/11/2020
25/01/2021
12/11/2019
12/11/2019
5,600,000 2
1,500,000
3,400,00
1,000,00
2,818,277
14,318,277
$0.1929
$0.7695
$0.1929
$0.1929
$0.1929
Expiry Date
31/03/2023
31/03/2024
31/03/2023
31/03/2023
31/03/2023
Issued to members of key management personnel as remuneration.
1
2 Includes 600,000 Options to P. Rix that remaining unexercised. P. Rix resigned on 30 October 2020.
All unlisted options are unlisted and exercisable into fully paid ordinary shares in the Company on a one for one basis.
These options do not entitle the holders to participate in any share issue of the Company or any other body corporate.
No options over ordinary shares have been issued, forfeited, cancelled or lapsed since the end of the financial year.
Subsequent to year end a further 200,000 unlisted options, in aggregate, previously issued under the Company’s
employee incentive scheme (exercise price of $0.1929 and expiry date of 31 March 2023) were exercised into ordinary
shares.
PERFORMANCE RIGHTS
There were no performance rights on issue during the reporting period or as at the date of this report.
Annual Report 2021 / Archer Materials Limited 31
Directors’ Report ENVIRONMENTAL ISSUES
PROCEEDINGS ON BEHALF OF THE COMPANY
The Group’s operations are subject to significant
environmental regulations under the laws of the
Commonwealth and/or State. No notice of any breach
has been received and to the best of the Directors’
knowledge no breach of any environmental regulations
has occurred during the financial year or up to the date
of this Annual Report.
As far as the Directors’ are aware, no person has applied
to the Court for leave to bring proceedings on behalf of the
Company or to intervene in any proceedings to which the
Company is a party for the purpose of taking responsibility
on behalf of the Company for all or any part of those
proceedings. The Company was not a party to any such
proceedings during the year.
INDEMNITY AND INSURANCE OF OFFICERS
CORPORATE GOVERNANCE
The Board has adopted the ASX Corporate Governance
Council’s “Corporate Governance Principles and
Recommendations – 4th Edition” (ASX Recommendations).
The Board continually monitors and reviews its existing and
required policies, charters and procedures with a view to
ensuring its compliance with the ASX Recommendations to
the extent deemed appropriate for the size of the Company
and the status of its projects and activities. Good corporate
governance practices are also supported by the ongoing
activities of the Audit & Risk Management Committee.
The Company’s Corporate Governance Statement for the
financial year ending 30 June 2021 is dated as at 30 June
2021 and was approved by the Board on 23 September 2021.
The Corporate Governance Statement provides a
summary of the Company’s ongoing corporate governance
practices in accordance with the ASX Recommendations.
The Corporate Governance Statement is supported by
a number of policies, procedures, code of conduct and
formal charters, all of which are located in the Corporate
Governance section of the Company’s website:
www.archerx.com.au.
The Company’s Constitution provides that the Company
indemnifies, on a full indemnity basis and to the full
extent permitted by law, officers of the Company for all
losses or liabilities incurred by the person as an officer of
the Company or a related body corporate. In conformity
with the Constitution, the Company is party to Deeds of
Indemnity in favour of each of the Directors referred to in
this report who held office during the year.
The Company has paid premiums to insure each of the
Directors, Officers and Consultants against liabilities
for costs and expenses incurred by them in defending
any legal proceedings arising out of their conduct while
acting in the capacity of Director or Executive of the
company, other than conduct involving wilful breach of
duty or a lack of good faith in relation to the company.
The policy does not specify the individual premium for
each officer covered and the amount paid is confidential.
Since the end of the year the Company has paid, or
agreed to pay, premiums in respect of such contracts for
the year ending 30 June 2021.
INDEMNITY AND INSURANCE OF AUDITOR
The company has not, during or since the end of the
financial period, indemnified or agreed to indemnify the
auditor of the company or any related entity against
a liability incurred by the auditor. During the financial
period, the company has not paid a premium in respect
of a contract to insure the auditor of the company or any
related entity.
32 Annual Report 2021 / Archer Materials Limited
Directors’ Report AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001
is set out on page 36 and forms part of the director’s report for the financial period ended 30 June 2021.
This report is signed in accordance with a resolution of the Board of Directors.
GREG ENGLISH
EXECUTIVE CHAIRMAN
Adelaide
Dated this 23rd day of September 2021
Annual Report 2021 / Archer Materials Limited 33
Directors’ Report 34 Annual Report 2021 / Archer Materials Limited
AUDITOR’S
INDEPENDENCE
DECLARATION
Annual Report 2021 / Archer Materials Limited 35
Auditor’s Independence Declaration
36 Annual Report 2021 / Archer Materials Limited
Grant Thornton Audit Pty Ltd ACN 130 913 594asubsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and itsAustralian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.Liability limited by a scheme approved under Professional Standards Legislation. www.grantthornton.com.auLevel 3, 170 Frome StreetAdelaide SA 5000Correspondence to:GPO Box 1270Adelaide SA 5001T+61 8 8372 6666Auditor’s Independence Declaration To the DirectorsofArcher Materials LimitedIn accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Archer Materials Limited for the year ended 30 June 2021, I declare that, to the best of my knowledge and belief, there have been:ano contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; andbno contraventions of any applicable code of professional conduct in relation to the audit.GRANT THORNTON AUDIT PTY LTDChartered AccountantsJ L Humphrey Partner–Audit&AssuranceAdelaide,23September 2021 FINANCIAL
INFORMATION
Annual Report 2021 / Archer Materials Limited 37
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021
INCOME
R&D tax concession
Other income
EXPENSES
Depreciation and amortisation expense
Amortisation of intangibles
Advanced Materials research & development expense
Employee benefits expense
Fair value loss on financial assets
Corporate consultants/public relations expense
ASX listing and share registry expense
Other expenses
LOSS BEFORE INCOME TAX EXPENSE
Income tax benefit
Notes
CONSOLIDATED GROUP
2
19
2021
$
467,662
1,720,159
2,187,821
(26,244)
(6,054)
(974,024)
(1,574,343)
(1,796,488)
(86,409)
(174,099)
(357,071)
2020
$
238,859
109,959
348,818
(15,257)
(6,304)
(465,920)
(1,837,573)
-
(95,189)
(164,236)
(341,055)
(2,806,911)
(2,576,716)
-
-
LOSS FOR THE PERIOD FROM CONTINUING OPERATIONS
(2,806,911)
(2,576,716)
DISCONTINUED OPERATIONS
Loss after income tax for the period from discontinued operations
18
(3,786,351)
(240,174)
LOSS ATTRIBUTED TO MEMBERS OF THE PARENT ENTITY
(6,593,262)
(2,816,890)
Other comprehensive income
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO MEMBERS
OF THE PARENT ENTITY
LOSS PER SHARE
Basic and diluted loss for the year per share
LOSS PER SHARE FOR CONTINUING OPERATIONS
Basic and diluted loss for the year per share
13
13
The accompanying notes form part of the financial statements.
-
-
(6,593,262)
(2,816,890)
Cents
(2.93)
(1.25)
Cents
(1.37)
(1.37)
38 Annual Report 2021 / Archer Materials Limited
Financial Information
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Prepayments
Trade and other receivables
Financial assets
Assets of disposal groups classified as held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
Right to use asset – office Lease
Exploration and evaluation expenditure
TOTAL NON- CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liability
Deposit received in advance for the sale of the Leigh Creek
Magnesia Project
Employee entitlements
Liabilities of disposal groups classified as held for sale
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Lease liability
Employee entitlements
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Notes
CONSOLIDATED GROUP
2021
$
2020
$
6
7
19
18
9
10
18
11
18
11
12
14
6,239,099
8,114,682
18,986
497,738
2,692,644
9,448,467
10,018,006
20,283
316,404
-
8,459,695
1,580,069
19,466,473
10,039,931
140,208
55,589
30,090
-
225,887
89,987
59,563
-
15,069,074
15,218,624
19,692,360
25,258,555
249,471
10,341
-
296,024
555,836
85,894
641,730
19,749
71,228
90,977
207,991
-
250,000
217,629
675,620
267
675,887
-
41,970
41,970
732,707
717,857
18,959,653
24,540,698
33,093,217
1,388,813
(15,522,377)
32,485,250
1,237,000
(9,181,552)
18,959,653
24,540,698
The accompanying notes form part of the financial statements.
Annual Report 2021 / Archer Materials Limited 39
Financial Information STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021
Issued Capital
$
Retained
Earnings
$
BALANCE AT 1 JULY 2019
23,873,09
(6,389,360)
Fair value of performance rights
issued in prior period
Shares issued during the year (net of
costs)
-
8,612,157
-
-
Share Based
Payments
Reserve
$
24,698
997,000
-
Acquisition
Reserve
$
Total
$
240,000
17,748,431
-
-
89,066
8,612,157
Transactions with owners
32,485,250
(6,389,360)
1,021,698
240,000
23,357,588
Transfer of share based payments
reserve to retained earnings 1
Total loss for the year
Other comprehensive income
-
-
-
24,698
(24,698)
(2,816,890)
-
-
-
-
-
-
-
(2,816,890)
-
BALANCE AT 30 JUNE 2020
32,485,250
(9,181,552)
997,000
240,000
24,540,698
1 Relates to share-based payments expense for lapsed performance rights.
Issued Capital
$
Retained
Earnings
$
Share Based
Payments
Reserve
$
Acquisition
Reserve
$
Total
$
BALANCE AT 1 JULY 2020
32,485,250
(9,181,552)
997,000
240,000
24,540,698
Fair value of unlisted options
issued during the period
Shares issued during the year (net
of costs)
-
607,967
-
-
404,250
-
-
-
404,250
607,967
Transactions with owners
33,093,217
(9,181,552)
1,401,250
240,000
25,552,915
Transfer of share- based payments
reserve to retained earnings 1
Total loss for the year
Other comprehensive income
-
-
-
252,437
(252,437)
(6,593,262)
-
-
-
-
-
-
-
(6,593,262)
-
BALANCE AT 30 JUNE 2021
33,093,217
(15,522,377)
1,148,813
240,000
18,959,653
1. Relates to share-based payments expense associated with options that have been exercised into shares.
The accompanying notes form part of the financial statements.
40 Annual Report 2021 / Archer Materials Limited
Financial Information
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021
CASH FLOW FROM OPERATING ACTIVITIES
Innovation grant received
Payments to suppliers and employees
Notes
CONSOLIDATED GROUP
2021
$
47,129
2020
$
-
(1,569,847)
(1,176,997)
Payments for Advanced Materials research related expenditure
(974,024)
(465,920)
Interest received
Research and development tax concession
Commonwealth Government COVID Stimulus
10,225
5,630
238,859
102,421
50,000
50,000
NET CASH USED IN OPERATING ACTIVITIES
16
(2,197,658)
(1,484,866)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Payments for intellectual property
Payment received from the sale of non-current assets
17
(40,801)
(56,275)
150,000
(26,204)
(27,669)
-
NET CASH PROVIDED BY / (USED) IN INVESTING ACTIVITIES
52,924
(53,873)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Payment of lease liability
NET CASH PROVIDED BY FINANCING ACTIVITIES
12
607,967
8,612,157
(1,750)
-
606,217
8,612,157
CASH FLOWS (USED) / PROVIDED BY DISCONTINUED OPERATIONS
18
(337,066)
345,515
Net increase / (decrease) in cash held
Cash at the beginning of the year
(1,875,583)
7,418,933
8,114,682
695,749
CASH AT THE END OF THE FINANCIAL YEAR
6
6,239,099
8,114,682
The accompanying notes form part of the financial statements.
Annual Report 2021 / Archer Materials Limited 41
Financial Information
NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial report is a general purpose financial
report that has been prepared in accordance with
Australian Accounting Standards, Australian Accounting
Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board (AASB) and the
Corporations Act 2001.
Archer Materials Limited is a for profit entity for the
purposes of preparing the financial statements. The
financial report has been presented in Australian dollars.
Australian Accounting Standards set out accounting
policies that the AASB has concluded would result
in a financial report containing relevant and reliable
information about transactions, events and conditions to
which they apply. Compliance with Australian Accounting
Standards ensures that the financial statements and
notes also comply with International Financial Reporting
Standards. Material accounting policies adopted in the
preparation of this financial report are presented below.
They have been consistently applied unless otherwise
stated.
The financial report has been prepared on an accruals
basis and is based on historical costs modified, where
applicable, by the measurement at fair value of selected
non-current assets, financial assets and financial liabilities.
The principal accounting policies adopted in the
preparation of the financial statements are set out below.
Principles of Consolidation
The parent entity controls a subsidiary if it is exposed, or
has rights, to variable returns from its involvement with
the subsidiary and has the ability to affect those returns
through its power over the subsidiary. A list of controlled
entities is contained in Note 8 to the financial statements.
As at reporting date, the assets and liabilities of all
controlled entities have been incorporated into the
consolidated financial statements as well as their results
for the year then ended. Where controlled entities have
entered (left) the consolidated group during the year, their
operating results have been included/(excluded) from the
date control was obtained/(ceased).
All inter-group balances and transactions between entities
in the consolidated group, including any recognised
profits or losses, have been eliminated on consolidation.
Accounting policies of subsidiaries have been changed,
where necessary, to ensure consistency with those
adopted by the parent entity.
42 Annual Report 2021 / Archer Materials Limited
Non-current assets held for sale and discontinued
operations
The Group classifies non-current assets and disposal
groups as held for sale if their carrying amounts will be
recovered principally through a sale transaction rather
than through continuing use. Non-current assets and
disposal groups classified as held for are measured at the
lower of their carrying amount and fair value less costs
to sell. Costs to sell are the incremental costs directly
attributable to the disposal of an asset (disposal group),
excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as
met only when the sale is highly probable and the asset
or disposal group is available for immediate sale in its
present condition. Actions required to complete the sale
should indicate that it is unlikely that significant changes
to the sale will be made or that the decision to sell will be
withdrawn. Management must be committed to the plan
to sell the asset and the sale expected to be completed
within one year from the date of the classification.
Property, plant and equipment and intangible assets are
not depreciated or amortised once classified as held for
sale.
Assets and liabilities classified as held for sale are
presented separately as current items in the statement of
financial position.
A disposal group qualifies as discontinued operation if it is
a component of an entity that either has been disposed of,
or is classified as held for sale, and:
• Represents a separate major line of business or
geographical area of operations;
• Is part of a single co-ordinated plan to dispose of a
separate major line of business or geographical area of
operations; or
• Is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results
of continuing operations and are presented as a single
amount as profit or loss after tax from discontinued
operations in the statement of profit or loss.
Additional disclosures are provided in Note 17 and Note
18. All other notes to the financial statements include
amounts for continuing operations, unless indicated
otherwise.
Notes to the Financial Statements for the year ended 30 June 2021
Current and non-current classification
Assets and liabilities are presented in the statement
of financial position based on current and non-
current classification.
An asset is classified as current when: it is either
expected to be realised or intended to be sold
or consumed in the consolidated entity’s normal
operating cycle; it is held primarily for the purpose
of trading; it is expected to be realised within 12
months after the reporting period; or the asset is
cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12
months after the reporting period. All other assets
are classified as non-current.
A liability is classified as current when: it is either
expected to be settled in the consolidated entity’s
normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within 12
months after the reporting period; or there is no
unconditional right to defer the settlement of the
liability for at least 12 months after the reporting
period. All other liabilities are classified as non-
current
Cash and cash equivalents
Cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other
short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value. For
the statement of cash flows presentation purposes, cash
and cash equivalents also includes bank overdrafts, which
if applicable, will be shown within borrowings in current
liabilities on the Statement of Financial Position.
Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred is
accumulated in respect of each identifiable area of
interest. These costs are only carried forward to the
extent that they are expected to be recouped through the
successful development of the area or where activities
in the area have not yet reached a stage that permits
reasonable assessment of the existence of economically
recoverable reserves.
Accumulated costs in relation to an abandoned area are
written off in full against profit in the year in which the
decision to abandon the area is made.
Where a decision is made to proceed with development
the accumulated costs for the relevant area of interest
will be amortised over the life of the area according to
the rate of depletion of the economically recoverable
reserves.
A regular review is undertaken of each area of interest
to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest
Costs of site restoration are provided over the life of
the facility from when exploration commences and are
included in the costs of that stage. Site restoration costs
include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and
rehabilitation of the site in accordance with clauses of the
mining permits. Such costs have been determined using
estimates of future costs, current legal requirements and
technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted
on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and
extent of the restoration due to community expectations
and future legislation. Accordingly, the costs have been
determined on the basis that the restoration will be
completed within one year of abandoning the site.
Property, plant and equipment
Property, plant and equipment is carried at cost less
where applicable, any accumulated depreciation and
impairment losses.
The carrying amount of property, plant and equipment
is reviewed annually by Directors to ensure it is not in
excess of the recoverable amount from these assets.
The recoverable amount is assessed on the basis of
the expected net cash flows that will be received from
the assets employment and subsequent disposal. The
expected net cash flows have been discounted to their
present values in determining recoverable amounts.
Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Group and the
cost of the item can be measured reliably. All other repairs
and maintenance are charged to the Statement of Profit
or Loss during the financial period in which are they are
incurred.
Annual Report 2021 / Archer Materials Limited 43
Notes to the Financial Statements for the year ended 30 June 2021 Plant and
Equipment
Buildings
Depreciation
The depreciable amount of all fixed assets is depreciated
on a straight-line basis over their useful lives to the
consolidated entity commencing from the time the
asset is held ready for use. Leasehold improvements
are depreciated over the shorter of either the unexpired
period of the lease or the estimated useful lives of the
improvements.
The depreciation rates used for each class of depreciable
assets are:
Class of Non-
Current Asset
Depreciation
Rate
10 – 33%
Basis of
Depreciation
Straight Line
2%
Straight Line
The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at each reporting date. An
asset’s carrying amount is written down immediately to
its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by
comparing proceeds with the carrying amount. These
gains and losses are included in the Statement of Profit or
Loss.
Intangible assets
Intangible assets acquired separately are measured on
initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value
at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses.
Internally generated intangibles, excluding capitalised
development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in
which the expenditure is incurred.
The useful lives of intangible assets are assessed as
either finite or indefinite.
Intangible assets with finite lives are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with a
finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or
44 Annual Report 2021 / Archer Materials Limited
the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify
the amortisation period or method, as appropriate, and
are treated as changes in accounting estimates.
The amortisation expense on intangible assets with finite
lives is recognised in the statement of profit or loss in the
expense category that is consistent with the function of
the intangible assets.
Intangible assets with finite useful lives are not amortised,
but are tested for impairment annually, either individually
or at the cash-generating unit level. The assessment of
indefinite life is reviewed annually to determine whether
the indefinite life continues to be supportable. If not, the
change in useful life from indefinite to finite is made on a
prospective basis.
An intangible asset is derecognised upon disposal (i.e.,
at the date the recipient obtains control) or when no
future economic benefits are expected from its use or
disposal. Any gain or loss arising upon derecognition of
the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is
included in the statement of profit or loss.
Research and development costs
Research costs are expensed as incurred and included
in the statement of profit or loss as research and
development costs. Development expenditures on an
individual project are recognised as an intangible asset
when the Group can demonstrate:
• The technical feasibility of completing the intangible
asset so that the asset will be available for use or sale
• Its intention to complete and its ability and intention to
use or sell the asset
• How the asset will generate future economic benefits
• The availability of resources to complete the asset
• The ability to measure reliably the expenditure during
development
Following initial recognition of the development
expenditure as an asset, the asset is carried at cost
less any accumulated amortisation and accumulated
impairment losses. Amortisation of the asset begins
when development is complete and the asset is available
for use. It is amortised over the period of expected
future benefit. Amortisation is recorded in cost of sales.
During the period of development, the asset is tested for
impairment annually
Notes to the Financial Statements for the year ended 30 June 2021 Patents and licences
Provisions
The Group made upfront payments to purchase patents
and licences and also pay for on-going patent prosecution
costs. The Licences have been granted for patents which
are undergoing prosecution by the relevant government
agencies and the Company also owns a patent
undergoing prosecution.
Patents have a life of up to 20 years and are assessed on
a case by case basis. Licences for the use of intellectual
property are granted for periods ranging between three
and five years depending on the specific licences. The
licences require an annual fee to be paid to continue
to access the licenses. As a result, those licences are
assessed as having an indefinite useful life.
A summary of the policies applied to the Group’s
intangible assets is, as follows:
Licences
Patents
Useful lives
Finite (5 years)
Finite (17 years)
Amortisation
method used
Internally
generated or
acquired
Amortised on
a straight-line
basis over the
period of the
licence
Amortised on
a straight-line
basis over the
period of the
patent
Acquired
Acquired
Trade and other payables
These amounts represent liabilities for goods and services
provided to the consolidated entity prior to the end of the
financial year/period and which are unpaid. Due to their
short-term nature they are measured at amortised cost
and are not discounted. The amounts are unsecured and
are usually paid within 30 days of recognition.
Borrowing Costs
Borrowing costs directly attributable to the acquisition,
construction or production of assets that necessarily take
a substantial period of time to prepare for their intended
use or sale, are added to the cost of those assets, until
such time as the assets are substantially ready for their
intended use or sale.
All other borrowing costs are recognised in profit or loss
in the period in which they are incurred.
Provisions are recognised when the Group has a legal
or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits
will result and that outflow can be reliably measured.
Employee Benefits
Provision is made for the Company’s liability for employee
benefits arising from services rendered by employees to
reporting date. Employee benefits that are expected to
be settled wholly within one year have been measured
at the amounts expected to be paid when the liability is
settled, plus related on-costs. Employee benefits payable
later than one year have been measured at the present
value of the estimated future cash outflows to be made
for these benefits. Those cashflows are discounted
using market yields on high quality corporation bonds
with terms to maturity that match the expected timing of
cashflows.
Share-based Payments
Equity-settled transactions
The Company provides benefits to employees
(including directors) in the form of share-based payment
transactions, whereby employees render services in
exchange for shares or rights over shares (‘equity-settled
transactions’).
The Company currently provides benefits under a
Performance Rights and Share Option Plan.
The cost of these equity-settled transactions with
employees and directors is measured by reference to the
fair value at the date at which they are granted.
In valuing equity-settled transactions, no account is taken
of any performance conditions, other than conditions
linked to the price of the shares of the Company (‘market
conditions’). 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:
i) the extent to which the vesting period has expired; and
Annual Report 2021 / Archer Materials Limited 45
Notes to the Financial Statements for the year ended 30 June 2021 ii) 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 reporting
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 conditional upon
a market condition.
Where the terms of an equity-settled award are modified,
as a minimum an expense is recognised as if the terms
had not been modified. In addition, an expense is
recognised for any increase in the value of the transaction
as a result of the modification, as measured at the date of
modification. 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, as described in the
previous paragraph.
The dilutive effect, if any, of outstanding options and rights
is reflected as additional share dilution in the computation
of earnings per share.
Issued capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the
proceeds.
Leases
The Group assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement
approach for all leases, except for short-term leases and
leases of low-value assets.
i) 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
46 Annual Report 2021 / Archer Materials Limited
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. Right-of-use assets are depreciated
on a straight-line basis over the shorter of the lease term
and the estimated useful lives of the asset
ii) 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.
In calculating the present value of lease payments,
the Group uses its incremental borrowing rate at the
lease commencement date because 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, a change in
the lease payments (e.g., changes to future payments
resulting from a change in an index or rate used to
determine such lease payments) or a change in the
assessment of an option to purchase the underlying asset.
Financial Instruments - initial recognition and
subsequent measurement
A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.
i) Financial Assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as
subsequently measured at amortised cost, fair value
through other comprehensive income (OCI), and fair value
through profit or loss.
The classification of financial assets at initial recognition
depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for
managing them. With the exception of trade receivables
that do not contain a significant financing component or
for which the Group has applied the practical expedient,
Notes to the Financial Statements for the year ended 30 June 2021 the Group initially measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs. Trade receivables
that do not contain a significant financing component or
for which the Group has applied the practical expedient
are measured at the transaction price determined under
AASB 15.
In order for a financial asset to be classified and measured
at amortised cost or fair value through OCI, it needs
to give rise to cash flows that are ‘solely payments of
principal and interest (SPPI)’ on the principal amount
outstanding. This assessment is referred to as the SPPI
test and is performed at an instrument level.
The Group’s business model for managing financial assets
refers to how it manages its financial assets in order to
generate cash flows. The business model determines
whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery
of assets within a time frame established by regulation or
convention in the market place (regular way trades) are
recognised on the trade date, i.e., the date that the Group
commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, 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)
• Financial assets at fair value through profit or loss
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
of 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 (EIR) method
and are subject to impairment. Gains and losses
are recognised in profit or loss when the asset is
derecognised, modified or impaired.
Derecognition
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the Group’s
consolidated statement of financial position) when:
• The rights to receive cash flows from the asset have
expired
or
• The Group has transferred its rights to receive cash
flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay
to a third party under a ‘pass-through’ arrangement;
and either (a) the Group has transferred substantially all
the risks and rewards of the asset, or (b) the Group has
neither transferred nor retained substantially all the risks
and rewards of the asset, but has transferred control of
the asset
When the Group has transferred its rights to receive cash
flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has
retained the risks and rewards of ownership. When it
has neither transferred nor retained substantially all
of the risks and rewards of the asset, nor transferred
control of the asset, the Group continues to recognise
the transferred asset to the extent of its continuing
involvement. In that case, the Group also recognises
an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects
the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee
over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum
amount of consideration that the Group could be required
to repay.
Annual Report 2021 / Archer Materials Limited 47
Notes to the Financial Statements for the year ended 30 June 2021 Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are
carried in the statement of financial position at fair value
with net changes in fair value recognised in the statement
of profit or loss.
This category includes listed equity investments which the
Group had not irrevocably elected to classify at fair value
through OCI. Dividends on listed equity investments are
recognised as other income in the statement of profit or
loss when the right of payment has been established.
Impairment of financial assets
The Group recognises an allowance for expected credit
losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference
between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group
expects to receive, discounted at an approximation of
the original effective interest rate. The expected cash
flows will include cash flows from the sale of collateral
held or other credit enhancements that are integral to the
contractual terms.
ECLs are recognised in two stages. For credit exposures
for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided
for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL).
For those credit exposures for which there has been a
significant increase in credit risk since initial recognition,
a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the
timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group
applies a simplified approach in calculating ECLs.
Therefore, the Group does not track changes in credit risk,
but instead recognises a loss allowance based on lifetime
ECLs at each reporting date. The Group has established
a provision matrix that is based on its historical credit loss
experience, adjusted for forward-looking factors specific
to the debtors and the economic environment.
The Group considers a financial asset in default when
contractual payments are 90 days past due. However,
in certain cases, the Group may also consider a financial
asset to be in default when internal or external information
indicates that the Group is unlikely to receive the
outstanding contractual amounts in full before taking into
account any credit enhancements held by the Group.
48 Annual Report 2021 / Archer Materials Limited
A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows.
ii) Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other
payables, loans and borrowings including bank overdrafts,
and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their
classification, as described below:
Derecognition
A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the
derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit or loss.
Impairment of non-financial assets
At each reporting date, the Group reviews the carrying
values of its tangible and intangible assets to determine
whether there is any indication that those assets
have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of
the asset’s fair value less costs to sell and value in use,
is compared to the asset’s carrying value. Any excess of
the asset’s carrying value over its recoverable amount is
expensed to the Statement of Profit or Loss.
Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which
the asset belongs.
Notes to the Financial Statements for the year ended 30 June 2021 Income Tax
The income tax expense/(revenue) for the year comprises
current income tax expense/(income) and deferred tax
expense/(income).
Current income tax expense charged to the profit or loss
is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially
enacted, as at reporting date. Current tax liabilities/
(assets) are therefore measured at the amounts expected
to be paid to/(recovered from) the relevant taxation
authority.
Deferred income tax expense reflects movements in
deferred tax asset and deferred tax liability balances
during the year as well as unused tax losses. Current
and deferred income tax expense/(income) is charged
or credited directly to equity instead of the profit or loss
when the tax relates to items that are credited or charged
directly to equity.
Deferred tax assets and liabilities are ascertained based
on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in
the financial statements. Deferred tax assets also result
where amounts have been fully expensed but future tax
deductions are available. No deferred income tax will
be recognised from the initial recognition of an asset or
liability, excluding a business combination, where there is
no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax
rates that are expected to apply to the period when the
asset recognised or the liability is settled, based on tax
rates enacted or substantively enacted at reporting date.
Their measurement also reflects the manner in which
management expects to recover or settle the carrying
amount of the related asset or liability.
Deferred tax assets relating to temporary differences and
unused tax losses are recognised only to the extent that
it is probable that future taxable profit will be available
against which the benefits of the deferred tax asset can
be utilised.
Where temporary differences exist in relation to
investments in subsidiaries, branches, associates, and
joint ventures, deferred tax assets and liabilities are
not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not
probable that the reversal will occur in the foreseeable
future.
Current tax assets and liabilities are offset where a legally
enforceable right of set-off exists and it is intended that
net settlement or simultaneous realisation and settlement
of the respective asset and liability will occur. Deferred tax
assets and liabilities are offset where a legally enforceable
right of set-off exists, the deferred tax assets and liabilities
relate to income taxes levied by the same taxation
authority on either the same taxable entity or different
taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective
asset and liability will occur in future periods in which
significant amounts of deferred tax assets or liabilities are
expected to be recovered or settled.
Tax Consolidation
Archer Materials Limited and its wholly-owned Australian
subsidiaries have formed an income tax consolidated
group under tax consolidation legislation. The Group
notified the Australian Tax Office that it had formed an
income tax consolidated group to apply from 1 July 2007.
Research and Development Tax Concession
To the extent that research and development costs are
eligible activities under the “Research and development
tax incentive” programme, a refundable tax offset is
available for companies with annual turnover of less than
$20 million. The Group recognises refundable tax offsets
received in the financial year as R&D tax concession
income in statement of profit or loss, resulting from
the monetisation of available tax losses that otherwise
would have been carried forward. These amounts are
recognised at their fair value only to the extent that
where there is reasonable assurance that the incentive
will be received.
Revenue
Interest revenue is recognised on a proportional basis
taking into account the interest rates applicable to the
financial assets.
Revenue from the rendering of a service is recognised
upon the delivery of the service to the customers. All
revenue is stated net of the amount of goods and services
tax (GST).
Annual Report 2021 / Archer Materials Limited 49
Notes to the Financial Statements for the year ended 30 June 2021 Impairment recognised for the year ended 30 June 2021
reflects the directors’ assessment of the recoverable
amount of these assets pursuant to the sale transaction
with iTech Minerals Limited (refer to Note 18 for further
details regarding the sale transaction with iTech Minerals
Limited).
The impairment recognised in the prior year ended 30
June 2020 related to relinquishment of the tenement(s)
to which expenditure had been previously capitalised.
The impairment expense for both the current and prior
year have been reclassified as part of the ‘loss from
discontinued operations’ on the Statement of Profit
or Loss and Other Comprehensive Income, with the
underlying exploration and evaluation assets also
reclassified as ‘assets of disposal groups held for sale’ on
the Statement of Financial Position.
(ii) Exploration and evaluation expenditure
The Group’s policy for exploration and evaluation is
discussed separately in Note 1. The application of this
policy requires the Directors to make certain estimates
and assumptions as to future events and circumstances.
Any such estimates and assumptions may change as new
information becomes available. If, after having capitalised
exploration and evaluation expenditure, the Directors
conclude that the capitalised expenditure is unlikely to
be recovered by future sale or exploitation, then the
relevant capitalised amount will be written off though the
Statement of Profit or Loss.
(iii) Research and development (R&D) tax concession
The Group is entitled to claim R&D tax incentives in
Australia. The R&D tax incentive is calculated using the
estimated expenditures multiplied by a 43.5% non-
refundable tax offset. It has been established that the
conditions of the R&D incentive have been met and that
the expected amount of the incentive can be reliably
measured. Estimated amounts receivable are recognised
as income.
Goods and Services Tax (‘GST’) and other similar taxes
Revenues, expenses and assets are recognised net of
the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office.
In these circumstances, the GST is recognised as part of
the cost of acquisition of the asset or as part of an item of
the expense. Receivables and payables in the statement
of financial position are shown inclusive of GST. The
net amount of GST recoverable from, or payable to, the
Australian Tax Office is included in other receivables or
other payables in the statement of financial position.
Cash flows are presented in the Statement of Cash
Flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as
operating cash flows.
Commitments and contingencies are disclosed net of
the amount of GST recoverable from, or payable to, the
Australian Tax Office.
Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgments
incorporated into the financial report based on historical
knowledge and best available current information.
Estimates assume a reasonable expectation of future
events and are based on current trends and economic
data obtained both externally and within the Group.
Key estimates
(i) Impairment
The Company assesses impairment at the end of each
reporting period by evaluating conditions and events
specific to the Company that may be indicative of
impairment triggers. Recoverable amounts of relevant
assets are reassessed using fair value less cost of
disposal calculations which incorporate various key
assumptions.
Impairment expense of $4,928,249 was recognised
in respect of non-current exploration and evaluation
assets (and included within 'Loss after income tax from
discontinued operations' on the Statement of Profit or
Loss and other Comprehensive income) for the year
ended 30 June 2021 (2020: $353,782).
50 Annual Report 2021 / Archer Materials Limited
Notes to the Financial Statements for the year ended 30 June 2021 Comparative Figures
When required by accounting standards, comparative
figures have been adjusted to conform to changes in
presentation of the current financial year.
Adoption of New and Revised Accounting Standards
At the date of authorisation of these financial statements,
several new Standards and amendments to existing
Standards, and Interpretations have been published by
the AASB.
IFRIC Interpretation to AASB 138 Intangible Assets
Configuration or Customisation Costs in a Cloud Computing
arrangement. This interpretation in March 2021 provided
further guidance on the accounting treatment of Cloud
Computing Costs. As the Group does not have significant
or complex systems the interpretation did not have an
impact on the Group.
Management have adopted all relevant pronouncements,
as applicable, for the first period beginning on or after
the effective date of the pronouncement. New Standards,
amendments and Interpretations not adopted in the current
year have not been disclosed as they are not expected to
have a material impact on the Group’s financial statements.
The financial report was authorised for issue on 23 September
2021 by the Board of Directors.
Annual Report 2021 / Archer Materials Limited 51
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 2 - OTHER INCOME
Interest received
Gain on sale of non-current assets – sale to ChemX Materials Pty Ltd (refer Note 17)
Commonwealth innovation grant
Commonwealth COVID Cashflow Stimulus
TOTAL OTHER INCOME
Total income
NOTE 3 – INCOME TAX BENEFIT / (LOSS)
a) The components of income tax benefit comprise:
Current tax
b) The prima facie tax on loss from before income tax is reconciled to the income
tax as follows: 30% (2020: 30%):
Net loss from continuing operations
Net loss from discontinued operations
Total loss from continued and discontinued operations
Income tax rate
Prima facie tax benefit on loss from activities before income tax
Non-deductible expenses
Tax effect of temporary differences not brought to account as they do not meet the
recognition criteria
Income tax attributable to operating loss from continued and discontinued
operations
CONSOLIDATED GROUP
30 JUNE
2021
30 JUNE
2020
$
$
11,293
9,959
1,661,737
47,129
-
-
-
100,000
1,720,159
109,959
1,720,159
109,959
30 JUNE
2021
30 JUNE
2020
$
-
$
-
(2,806,911)
(2,576,716)
(3,786,351)
(240,174)
(6,593,262)
(2,816,890
30%
30%
(1,977,979)
(845,067)
(140,298)
2,118,277
238,859
916,725
-
-
c) Unused tax losses for which no deferred tax asset has been recognised at 30%
7,793,904
5,675,627
52 Annual Report 2021 / Archer Materials Limited
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 4 – KEY MANAGEMENT PERSONNEL COMPENSATION
a) Names and positions held of consolidated entity key management personnel in office at any time during the
financial year are:
Mr Greg English
Chairman – Executive
Ms Alice McCleary
Director – Non-executive
Mr Kenneth Williams
Director – Non-executive
Mr Paul Rix
Director – Non-executive
Dr Mohammad Choucair
Chief Executive Officer
(will retire at the 2021 AGM)
(appointed 28 September 2020)
(resigned 30 October 2020)
Mr Damien Connor
Chief Financial Officer & Company Secretary
Other than the directors and officers of the company listed above, there are no additional key management personnel.
b) Key Management Personnel Compensation
Refer to the Remuneration Report for details of the remuneration paid or payable to each member of the Group’s key
management personnel (KMP).
The aggregate remuneration of KMP of the Group during the year is as follows:
Short term benefits
Post-employment benefit
Termination benefits
Share - based payments
30 JUNE 2021
30 JUNE 2020
$
952,376
77,488
-
404,250
1,434,114
$
810,442
64,984
-
759,850
1,635,256
NOTE 5 – AUDITOR REMUNERATION
During the year ended 30 June 2021, total fees paid or payable for services
provided by Grant Thornton Audit Pty Ltd and its related practices were as follows:
30 JUNE 2021
30 JUNE 2020
$
$
Audit Services
Audit and review of Financial Reports
No non audit services were provided.
43,850
43,850
NOTE 6– CASH AND CASH EQUIVALENTS
30 JUNE 2021
30 JUNE 2020
Short term deposits
Cash at bank and on hand
$
1,081,618
5,157,481
6,239,099
$
1,120,556
6,994,126
8,114,682
The effective interest rate on short term bank deposits at 30 June 2021 is 0.81% (30 June 2020: 1.51%).
The Group’s exposure to interest rate risk is summarised at Note 24.
Annual Report 2021 / Archer Materials Limited 53
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 7– TRADE AND OTHER RECEIVABLES
30 JUNE 2021
30 JUNE 2020
Research and development tax receivable
Other receivables
$
467,662
30,076
497,738
$
238,859
85,872
324,731
NOTE 8 – INVESTMENT IN CONTROLLED ENTITIES
Country of
Incorporation
Percentage Owned
30 JUNE 2021 30 JUNE 2020
%
%
PARENT ENTITY
- Archer Materials Limited
Subsidiaries of Archer Materials Limited:
- Pirie Resources Pty Ltd 1
- Archer Pastoral Company Pty Ltd 1
- SA Exploration Pty Ltd 1
- Archer Energy and Resources Pty Ltd
- Carbon Allotropes Pty Limited
- Archer Metals Pty Ltd 2
- Archer IOCG Pty Ltd 2
- Leigh Creek Magnesite Pty Ltd 3
- CH Magnesite Pty Ltd 3
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
-
-
100
100
100
100
100
-
-
100
100
1 During the year ended 30 June 2021, the Company executed a legally binding share sale agreement with iTech Minerals Pty Ltd (iTech) for the sale of all of the
subsidiary companies that hold Archer's mineral tenements. Shareholders approved the sale of Pirie Resources Pty Ltd, Archer Pastoral Company Pty Ltd and
SA Exploration Pty Ltd, at the General Meeting of Shareholders held on 30 August 2021. The transaction is expected to complete mid to late October 2021.
2 Incorporated on 9 October 2020 as wholly owned subsidiaries of Archer.
3 In August 2020, the Company completed the transaction for the sale of subsidiaries that hold the Leigh Creek Magnesia Project tenements. (Refer to Note 18).
54 Annual Report 2021 / Archer Materials Limited
Notes to the Financial Statements for the year ended 30 June 2021
NOTE 9 – EXPLORATION AND EVALUATION EXPENDITURE
30 JUNE 2021
30 JUNE 2020
Costs carried forward in respect of areas of interest in:
Exploration and evaluation at cost
Movements in carrying amounts:
Balance at the beginning of the year
Amounts capitalised during the year
Impairment expense during the year
Transferred to assets held for sale 1
Disposal of assets to ChemX Materials Pty Ltd 2
Balance at 30 June
$
-
$
15,069,074
15,069,074
14,500,289
199,634
(4,948,249)
(10,000,000)
(320,459)
943,106
(350,609)
(23,712)
-
-
15,069,074
1 Exploration and evaluation assets associated with the sale of the Company’s remaining tenements to iTech Minerals Limited have been reclassified as
‘assets of disposal groups classified as held for sale’ on the Statement of Financial Position. Refer Note 18 for further details of the sale transaction with iTech
Minerals Limited. The prior period represents the reclassification of exploration and evaluation assets associated with the sale of the Leigh Creek Magnesia
Project (refer Note 18).
2 Sale of EL5815 (Waddikee) and EL5920 (Carappee Hill) to ChemX Materials Ltd. Refer Note 17 for further details of the sale transaction with ChemX Materials Ltd.
No equipment depreciation was included in the amount capitalised as exploration and evaluation during the year
(2020: $10,563).
NOTE 10 – TRADE AND OTHER PAYBLES
30 JUNE 2021
30 JUNE 2020
Trade payables
Other receivables
$
84,023
165,448
249,471
$
124,484
83,507
207,991
NOTE 11 – EMPLOYEE ENTITLEMENTS
30 JUNE 2021
30 JUNE 2020
Current – annual leave, long service leave & bonus provision
Non-current - long service leave
$
296,024
71,228
367,252
$
217,629
41,970
259,599
Annual Report 2021 / Archer Materials Limited 55
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 12 – ISSUED CAPITAL
227,506,546 (2020: 224,354,823) fully paid ordinary shares
Consolidated group
30 JUNE 2021
30 JUNE 2020
$
$
33,093,217
32,485,250
a) Shares on issue:
30 June 2021
Issued and paid up capital
Fully paid ordinary shares
Movements in fully paid shares
Balance as at 1 July 2020
Shares issued - exercise of options (18 September 2020)
Shares issued - exercise of options (16 October 2020)
Shares issued - exercise of options (11 December 2020)
Shares issued - exercise of options (29 January 2021)
Shares issued - exercise of options (19 February 2021)
Shares issued - exercise of options (19 March 2021)
Shares issued - exercise of options (17 June 2021)
Balance as at 30 June 2021
Shares on issue:
30 June 2020
Issued and paid up capital
Fully paid ordinary shares
Movements in fully paid shares
Balance as at 1 July 2019
Shares issued - vested and exercised performance rights (8 July 2019)
Shares issued - Share Purchase Plan (13 December 2019)
Shares issued - Share Purchase Plan (13 December 2019)
Shares issued - exercise of options (12 May 2020)
Shares issued - exercise of options (18 May 2020)
Shares issued - exercise of options (26 June 2020)
Balance as at 30 June 2020
Number
$
227,506,546
33,093,217
224,354,823
32,485,250
300,000
181,723
300,000
500,000
300,000
100,000
57,870
35,054
57,870
96,450
57,870
19,290
1,470,000
283,563
227,506,546
33,093,217
Number
$
224,354,823
32,485,250
196,304,283
23,873,093
787,500
15,327,790
100,000
830,000
400,000
-
1,992,600
19,290
160,107
77,160
10,605,250
6,363,000
224,354,823
32,485,250
56 Annual Report 2021 / Archer Materials Limited
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 12 – ISSUED CAPITAL……….CONTINUED
(b) Options on issue.
All options on issue are unlisted options (Options). Details of the Options outstanding as at the end of the year are set out below:
Issued To
Issue Date Grant Date
Number
of Options
Granted
Option
Exercise
Price
Expiry Date
Balance at
30 June
2021
Balance at
30 June
2020
DIRECTORS & CEO 1
12/11/2019
30/10/2019
11,500,000
$0.1929
31/03/2023
9,000,000
11,170,000
OTHER
EMPLOYEES
DIRECTOR
12/11/2019
12/11/2019
6,000,000
$0.1929
31/03/2023
4,018,277
5,000,000
30/11/2020
30/11/2020
1,500,000
$0.7695
31/03/2024
1,500,000
-
CONSULTANT
07/02/2020 05/02/2019
2,000,000
$0.245
31/03/2023
-
2,000,000
21,000,000
14,518,277
18,170,000
1 In accordance with Australian Accounting Standard AASB 2, the deemed grant date for the Options issued to Directors and CEO was the date the Company
received shareholder approval, being 30 October 2019.
c) Performance Rights (Rights) on issue
There were no Rights on issue during the reporting period
and no Rights are on issue at the date of this report
d) Capital Management
Management effectively manages the Group’s capital
and capital structure by assessing the Group’s financial
risks through regular monitoring of budgets and forecast
cashflows. The Board’s policy is to maintain a strong
capital base so as to maintain investor, creditor and
market confidence and to sustain future development of
the business, including through the issue of shares. The
Group’s capital is shown as issued capital in the statement
of financial position. The Group is not subject to any external
capital restrictions.
All Options are unlisted and are exercisable into fully paid
ordinary shares in the Company on a one for one basis.
On 12 November 2019, 17,500,000 Options were issued to
Directors and employees of Archer following shareholder
approval at the Company’s Annual General Meeting held on
30 October 2019 (2019 AGM). Options were granted at no
cost to the recipients and vest immediately upon issue.
Options granted during the year
On 30 November 2020, a further 1,500,000 Options were
issued to Director Kenneth Williams following shareholder
approval at the Company’s Annual General Meeting held on
30 November 2020 (2020 AGM).
Options exercised during the year
During the reporting period 3,151,723 Options were
exercised into fully paid ordinary shares.
Options forfeited during the year
During the reporting period 2,000,000 Options previously
issued to a consultant were forfeited. The Options were
exercisable at $0.245 each end expiry date of 31 March
2023, and subject to particular vesting conditions. The
Options did not vest and were forfeited in accordance with
the terms on which they were issued.
No further Options were issued, exercised or forfeited
during the reporting period.
See Note 15 for further details regarding movements in
Options during the current and prior reporting periods.
Annual Report 2021 / Archer Materials Limited 57
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 13 – LOSS PER SHARE
Reconciliation of earnings to Statement of Profit or Loss and other Comprehensive
Income
Loss for year used to calculate basic EPS
a) Weighted average number of shares outstanding during the year used in
calculation of basic EPS
b) In accordance with AASB 133 “Earnings per Share” as potential ordinary shares
may only result in a situation where their conversion results in a decrease on profit
per share or increase in loss per share, no dilutive effect has been taken into
account.
30 JUNE 2021
30 JUNE 2020
$
$
(6,593,262)
(2,816,890)
Number
Number
225,278,694
205,591,058
NOTE 14 – RESERVES
Share based payment reserve
Acquisition Reserve
Total
30 JUNE 2021
30 JUNE 2020
$
1,148,813
240,000
1,388,813
$
997,000
240,000
1,237,000
The share based payments reserve records items recognised as an expense on valuation of options or performance rights.
Refer Note 15 for further details regarding the movement in options issued during the reporting period.
The acquisition reserve represents the fair value of consideration paid for the Company’s previous acquisition of Carbon
Allotropes Pty Limited.
NOTE 15 – SHARE BASED PAYMENTS
A) UNLISTED OPTIONS 30 JUNE 2021
Options and weighted average exercise prices are as follows for the reporting period presented:
30 JUNE 2021
Number of Options
30 JUNE 2021 WEIGHTED AVERAGE EXERCISE
PRICE PER OPTION
Opening Balance
Granted
Exercised
Forfeited
Total
18,170,000
1,500,000
(3,151,723)
(2,000,000)
14,518,277
$
$997,000
$404,250
($252,437) 1
-
$1,148,813
$
$0.1986
$0.7695
$0.1929
$0.2450
$0.2514
Weighted average remaining contractual life of Options at 30 June 2021 is 2.65 years.
1 An amount of $252,437 was written-back to retained losses, relating to previous share-based payments expense associated with options that were exercised
into shares during the current and prior reporting periods.
58 Annual Report 2021 / Archer Materials Limited
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 15 – SHARE BASED PAYMENTS……CONTINUED
Options granted during the year ended 30 June 2021
On 30 November 2020, 1,500,000 unlisted options to acquire fully paid ordinary shares in the Company (Options) were
issued to Director Kenneth Williams following shareholder approval at the Company’s Annual General Meeting held on
30 November 2020 (2020 AGM). Options were granted at no cost to the recipient and vest immediately upon issue. The
Options are exercisable at $0.7695 each and expire on 31 March 2024. The Options vested on the date of issue and had a
fair value at the date of grant of $404,250.
The Options were granted pursuant to the Company’s Performance Rights and Share Option Plan, which was approved by
shareholders at the Annual General Meeting held on 30 October 2019.
The details of the Options granted are as follows:
Recipient
Director
Grant Date
Issue Date
Number of Options
Exercise Price
Expiry Date
30 Nov 20
30 Nov 20
1,500,000
$0.7695
31 Mar 24
The fair value of the Options issued was calculated by using a Black-Scholes option pricing model and was estimated on
the date of the grant using the following assumptions:
Share price at date of grant ($)
Historic volatility (%)
Risk free interest rate (%)
Expected life of Options (days)
Director Options
0.53
89.6
0.11
1217
Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of
future tender, which may not eventuate.
The life of the Options is based on the historical exercise patterns, which may not eventuate in the future.
As the Options do not require the satisfaction of vesting conditions, these options vest immediately and an amount of
$404,250 has been included in the Statement of Profit or Loss and Other Comprehensive Income under employee benefits
expense for the year ended 30 June 2021.
Options exercised during the year ended 30 June 2021
During the year 3,151,723 Options (exercise price of $0.1929 and expiry date of 31 March 2023) were exercised into shares.
Options forfeited during the year ended 30 June 2021
During the year, 2,000,000 Options previously issued to a consultant were forfeited. The Options were exercisable at
$0.245 each end expiry date of 31 March 2023, and subject to particular vesting conditions. The Options did not vest and
were forfeited in accordance with the terms on which they were issued. No amount was recorded in the Statement of Profit
or Loss in the prior year given the Options were not able to be vested as at that balance date.
Annual Report 2021 / Archer Materials Limited 59
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 15 – SHARE BASED PAYMENTS……CONTINUED
Options and weighted average exercise prices are as follows for the year ended 30 June 2020:
30 JUNE 2020
Number of Options
30 JUNE 2020
WEIGHTED AVERAGE
EXERCISE PRICE PER OPTION
Opening Balance
Granted
Exercised
Forfeited/Lapsed
Total
19,500,000
(1,330,000)
$
-
$997,000
-
-
-
-
18,170,000 1
$977,000
$
-
$0.1982
$0.1929
-
$0.1929
Weighted average remaining contractual life of Options at 30 June 2020 is 2.75 years.
Options issued during the prior year ended 30 June 2020
On 12 November 2019, 17,500,000 unlisted options to acquire fully paid ordinary shares in the Company (Options) were
issued to Directors and employees of Archer following shareholder approval at the Company’s Annual General Meeting
held on 30 October 2019 (2019 AGM). Options were granted at no cost to the recipients and vest immediately upon issue.
Options were granted pursuant to the Company’s Performance Rights and Share Option Plan, which was approved by
shareholders at the 2019 AGM.
The details of the Options granted are as follows:
Recipient
Grant Date
Issue Date
Number of Options
Exercise Price
Expiry Date
Directors & CEO
Other Employees
30 Oct 19 1
12 Nov 19
12 Nov 19
12 Nov 19
11,500,000
6,000,000
$0.1929
$0.1929
31 Mar 23
31 Mar 23
1
In accordance with Australian Accounting Standard AASB 2, the deemed grant date for the Options issued to Directors and CEO was the date the Company
received shareholder approval, being 30 October 2019.
The fair value of the Options issued was calculated by using a Black-Scholes option pricing model and was estimated on the
date of the grant using the following assumptions:
Directors and CEO Options
Other Employees Options
Share price at date of grant ($)
Historic volatility (%)
Risk free interest rate (%)
Expected life of Options (days)
0.135
77.2
0.78
1235
0.125
75.7
0.84
1235
Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of
future tender, which may not eventuate.
The life of the Options is based on the historical exercise patterns, which may not eventuate in the future.
As the options do not require the satisfaction of vesting conditions, these options vest immediately and an amount of
$997,000 was included in the Statement of Profit or Loss and Other Comprehensive Income under employee benefits
expense for the year ended 30 June 2020.
60 Annual Report 2021 / Archer Materials Limited
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 15 – SHARE BASED PAYMENTS……CONTINUED
Options exercised during the prior year ended 30 June 2020
During the prior year ended 30 June 2020, 1,330,000 Options (exercise price of $0.1929 and expiry date of 31 March 2023)
were exercised into shares.
Options forfeited during the prior year ended 30 June 2020
No options were forfeited during the prior year ended 30 June 2020
B) PERFORMANCE RIGHTS (RIGHTS)
Number of Rights
Number of Rights
Opening Balance
Granted
Exercised
Forfeited
Closing Balance
30 JUNE 2021
-
-
-
-
-
30 JUNE 2020
1,050,000
-
(787,500)
(262,500)
-
There were no Rights on issue at any time during the reporting period. During the prior period ended 30 June 2020, an
amount of $24,698 relating to previously recognised share-based payments was transferred to retained losses in respect
of Rights that were exercised into shares or forfeited.
NOTE 16 – CASH FLOW INFORMATION
30 JUNE 2021
30 JUNE 2020
A) RECONCILIATION OF CASH FLOWS FROM CONTINUING
OPERATIONS WITH LOSS AFTER INCOME TAX
Loss after income tax
Depreciation (net of capitalised depreciation)
Amortisation of intangibles
Fair Value loss on investment in Volatus (Note 19)
Share based payments - to employees
Gain on sale of non-current assets (Note 17)
Changes in assets and liabilities:
- Increase in trade and other receivables
- Increase in trade and other payables
- Increase in employee entitlements
$
$
(2,806,911)
(2,576,717)
26,244
6,054
1,796,488
404,250
(1,661,737)
(180,034)
110,336
107,652
15,257
6,304
-
997,000
-
(62,156)
24,157
111,289
Net cash used in operating activities from continuing operations
(2,197,658)
(1,484,866)
B) NON-CASH FINANCING AND INVESTING ACTIVITIES
There were no non-cash financing and investing activities undertaken during the current or prior reporting periods.
Annual Report 2021 / Archer Materials Limited 61
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 16 – CASH FLOW INFORMATION……CONTINUED
DISCONTINUED OPERATIONS
A) RECONCILIATION OF CASH FLOWS FROM DISCONTINUED
OPERATIONS WITH LOSS AFTER INCOME TAX
30 JUNE 2021
30 JUNE 2020
$
$
Loss after income tax
Depreciation
Impairment of exploration assets (Note 18)
Gain on sale of non-current assets – Sugarloaf land (Note 18)
(3,786,351)
10,563
5,015,996
-
Gain on sale of disposal group held for sale -Leigh Creek Magnesia Project (Note 18)
(1,244,299)
Changes in assets and liabilities:
- (Decrease) / Increase in trade and other payables
Net cash used in discontinued operating activities (Note 18)
Net cash (used) / from discontinued investing activities (Note 18)
Total cash (used) / from discontinued operations
NOTE 17 – SALE OF NON-CURRENT ASSETS
(17,804)
(21,895)
(315,172)
(337,067)
(240,174)
-
353,782
(130,584)
-
267
(16,709)
362,224
345,515
During the reporting period the Company signed a legally binding sale agreement (“Agreement”) with private company
ChemX Materials Ltd (“ChemX”) (formerly Baudin Minerals Pty Ltd and Nextgen Materials Pty Ltd) ("Buyer") for the sale of
the mineral exploration licences EL 5815 (Waddikee) and EL 5920 (Carappee Hill) located on the Eyre Peninsula in South
Australia ("Sale Tenements") (ASX Ann. 22 Dec 2020).
On 18 June 2021, the Company announced that it has completed the sale and purchase of the Sale Tenements to ChemX.
At completion, the Company received 9.25 million ChemX shares at an issue price of $0.20 per share for a total value of
$1.85 million.
The terms of the sale ChemX sale agreement were detailed in two ASX announcements (ASX ann. 22 Dec 2020 and 15
Mar 2021). In summary, the purchase price payable by ChemX for the purchase of the Sale Tenements is:
• payment of $2.0 million. Archer has previously received $150,000 cash and, at completion, received the remaining $1.85
million paid in ChemX shares; plus
• bonus payment equal to 5% of the enterprise value of ChemX at the time of ASX listing, paid in cash or shares at the
election of ChemX; plus
• a 2% Net Smelter Return royalty (“Royalty”) on the value of all minerals (excluding graphite) extracted from the Sale
Tenements.
Carrying amounts of non-current assets sold
Assets
Carrying value of non-current assets sold
Consideration received:
Cash received
Fair value of equity received in ChemX Materials Ltd
Total consideration received
Legal costs
Gain on sale of non-current assets
62 Annual Report 2021 / Archer Materials Limited
Total $
320,459
320,459
150,000
1,850,000
2,000,000
(17,804)
1,661,737
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 18 – DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS
Sale of subsidiaries to iTech Minerals Limited (A)
Sale of the Leigh Creek Magnesia Project (B)
30 JUNE 2021
30 JUNE 2020
$
(5,030,650)
1,244,299
(3,786,351)
$
(226,435)
(13,738)
(240,174)
DISPOSAL GROUP A - SALE OF SUBSIDIARIES TO ITECH MINERALS LTD
On 12 April 2021, the Company announced that it had signed a legally binding share sale agreement with iTech Minerals
Pty Ltd (“iTech”) for the sale of all of the three subsidiary companies that hold Archer's remaining mineral tenements (the
“Transaction”). At completion of the sale, the Company will receive 50 million iTech shares (with a value of $0.20 per iTech
share), which the Company will disperse to Archer shareholders by way of a pro-rata in-specie distribution. The Company
will not hold any iTech shares after completion of the Transaction.
iTech has lodged a prospectus and is in the middle of an initial public offering (“IPO”) to raise a minimum of $5 million and a
maximum of $7 million with the IPO offer scheduled to close on 6 October 2021. After the IPO, iTech intends to list on ASX
(“Listing”).
Completion of the Transaction was subject to the satisfaction or waiver of certain conditions precedent with Listing yet
to be satisfied. Completion and the in-specie distribution of iTech shares will not take place if Listing does not occur. The
Transaction (including the conditions precedent) is described in detail in a Notice of Meeting lodged with ASX on 30 July
2021.
During the year, the carrying value of the exploration assets being sold to iTech were impaired to an amount of $10,000,000
(reflecting the value of consideration to be received for the sale) and have been classified as ‘assets of disposal groups held
for sale’ on the Statement of Financial Position. Accordingly, an impairment expense of $4,928,249 has been recognised
and included in the Statement of Profit or Loss and Other Comprehensive Income as ‘loss from discontinued operations’,
to write-down the value of those assets to the value of the consideration expected to be received for those assets (being
$10,000,000).
The combined net operating loss of SA Exploration Pty Ltd, Pirie Resources Pty Ltd and Archer Pastoral Company Pty Ltd
are shown below:
Profit on sale of assets - Sugarloaf Land
Interest income
Impairment of exploration assets
Exploration expenditure expensed
Depreciation
Other expenses
30 JUNE 2021
30 JUNE 2020
$
-
734
$
130,584
1,658
(4,948,249)
(353,782)
(67,747)
(10,563)
(4,825)
(3,173)
-
(4,895)
Loss for year from discontinued operations before tax
(5,030,650)
(226,435)
Annual Report 2021 / Archer Materials Limited 63
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 18 – DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS …..CONTINUED
The combined assets and liabilities of SA Exploration Pty Ltd, Pirie Resources Pty Ltd and Archer Pastoral Company Pty Ltd
are shown below:
Statement of financial position
30 JUNE 2021
30 JUNE 2020
Other current assets
Non-current plant and equipment
Non-current exploration assets 1
Assets of the disposal group held for sale
Current trade payables
Liabilities included in disposal group held for sale
$
8,324
9,682
10,000,000
10,018,006
85,894
85,894
$
-
-
-
-
-
-
1 During the year the non-current exploration assets were impaired, to reflect the recoverable amount of these assets pursuant to the iTech Transaction.
Cash flows generated by SA Exploration Pty Ltd, Pirie Resources Pty Ltd and
Archer Pastoral Company Pty Ltd are shown below:
Operating activities
Investing activities
30 JUNE 2021
30 JUNE 2020
$
(21,895)
(315,172)
$
(16,709)
362,224
Net cash used in discontinued operations
(337,067)
(345,515)
DISPOSAL GROUP B - SALE OF THE LEIGH CREEK MAGNESIA PROJECT:
On 14 August 2020, the Company announced the Completion of the sale of the Leigh Creek Magnesia Project (“Project”).
At Completion the Company received 6,535,775 shares (“Consideration Shares”) in Canadian Stock Exchange listed Volatus
Capital Corp. (“Volatus”). The Consideration Shares have a value of $2.64 million(1) and can be traded for the first time only
after four months have elapsed from the date of distribution.
Archer has received $2.89 (1) million for the Project, comprising:
• $250,000 cash already received; plus
• $2.0 million of Volatus shares at Completion; plus
• Bonus payment of $639,133 of Volatus shares at Completion.
Archer may be entitled to receive a further bonus payment should there be a future transaction with the other company that
purchased the remainder of the Project.
(1) Assumes Volatus share price of A$0.40, AUD:CDN exchange rate of $0.9584 and 6,535,775 Consideration Shares issued to Archer.
64 Annual Report 2021 / Archer Materials Limited
Notes to the Financial Statements for the year ended 30 June 2021
NOTE 18 – DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS …..CONTINUED
Carrying amounts of net assets over which control was lost
Assets
Held for sale assets – as disclosed in 2020
Liabilities
Net assets disposed
Consideration received:
Cash received
Fair value of equity received in Volatus
Total consideration received
Legal costs
Gain on disposal group classified as held for sale assets
Total $
1,580,817
1,580,817
-
1,580,817
250,000
2,639,132
2,889,132
64,016
1,244,299
NOTE 19 – OTHER FINANCIAL ASSETS
30 JUNE 2021
30 JUNE 2020
Other financial assets designated at fair value through profit or loss
- Listed Investment in Volatus Capital Corp (“Volatus”)
- Unlisted Investment in ChemX Minerals Ltd (“ChemX”)
Reconciliation
Reconciliation of the fair values at the beginning and end of the current and
previous financial year are set out below:
Opening fair value
Additions – consideration received Volatus
Additions – consideration received ChemX
Revaluation decrements
Closing fair value
$
842,644
1,850,000
2,692,644
-
2,639,132
1,850,000
(1,796,488)
2,692,644
$
-
-
-
-
-
-
-
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as
financial assets at fair value through profit or loss. Typically, such financial assets will be held for trading, where they
are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative. Fair value
movements are recognised in profit or loss.
The fair value of listed investments (publicly traded equity securities) are based on quoted market prices at the end of the
financial year (Level 1).
The fair value of unlisted investments has been valued with reference to unobservable market data (Level 3).
Annual Report 2021 / Archer Materials Limited 65
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 20 – OPERATING SEGMENTS
The Directors have considered the requirements of AASB 8 - Operating segments and the internal reports that are
reviewed by the chief operating decision maker (the Board) in allocating resources have concluded at this time there
are no separately identifiable segments. The Group operates in one segment being materials technology research and
development and mineral exploration which are highly integrated. As detailed elsewhere in this report the, subsequent to
the end of the year, on 30 August 2021 shareholders approved the sale of the Company’s remaining exploration tenements
to iTech Minerals Ltd and the pro-rata in-specie distribution of 50,000,000 iTech shares to Archer shareholders (being
distribution of the consideration shares received by Archer for the sale to iTech) (refer Note 18).
NOTE 21 – CONTINGENT ASSETS, LIABILITIES & COMMITMENTS
(A) Expenditure Commitments
Expenditure commitments relating to tenements
The Group is required to meet minimum expenditure requirements of various Australian Government bodies. These
obligations are subject to renegotiation, may be farmed out or may be relinquished and have not been provided for in the
financial statements.
Exploration expenditure commitments
Expenditure Commitment 1
30 JUNE 2021
30 JUNE 2020
$
$
1,673,000
3,608,000
1 Includes exploration expenditure commitments relating to tenements that have been classified as assets of disposal groups held for sale in the Statement
of Financial Position as at 30 June 2021. Following Completion of the sale to iTech Minerals Ltd (refer Note 18) all of the above exploration expenditure
commitments will be transferred to iTech Minerals Ltd.
Other than the commitments disclosed above, the Group does not have any further commitments at 30 June 2021 (30 June
2020: Nil).
(B) Contingent Assets/Liabilities
In November 2018 Archer announced the sale of its Sugarloaf farmland for $1.35 million. The transaction settled on 1 July
2019 with Archer receiving the $1.35 million sale proceeds in July 2019. The purchaser of the farm land has granted Archer
an option to buy back approximately 30% of the Sugarloaf farm land, which may be required for the construction of the
Sugarloaf Graphite Processing Facility (“Land Option”). The Land Option may be exercised by Archer any time before 31
December 2023. The Land Option was not assigned to iTech Minerals Ltd.
In June 2021 Archer announced the completion of the sale of tenements to ChemX Materials Ltd (refer Note 17). In addition
to the consideration already received, Archer is also entitled to a bonus payment equal to 5% of the enterprise value of
ChemX at the time of ASX listing, paid in cash or shares at the election of ChemX. As at the date of this report ChemX has
not listed on ASX. Archer is also entitled to a 2% Net Smelter Return royalty on the value of all minerals (excluding graphite)
extracted from the tenements sold to ChemX.
The Group did not have any further contingent assets or liabilities as at 30 June 2021.
The Group has minimum expenditure commitments on exploration licences as per the terms of the exploration licences.
Unexpended commitment for a particular year can be deferred or rolled over to subsequent years of the licence term.
66 Annual Report 2021 / Archer Materials Limited
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 22 – TENEMENT INTERESTS
The Company’s tenement interests as at 30 June 2021 are as follows:
Exploration assets classified as assets of disposal group held for sale
Each of the below tenement interests are held by the Company as at 30 June 2021, however are subject of the sale to iTech
Minerals Ltd (“iTech”) as detailed in Note 18.
During the year, the carrying value of the exploration assets being sold to iTech were impaired to an amount of $10,000,000
(reflecting the value of consideration to be received for the sale) and has been classified as ‘assets of disposal groups held
for sale’ on the Statement of Financial Position. The impairment expense has been included in the Statement of Profit or
Loss and Other Comprehensive Income as ‘loss from discontinued operations’.
Refer to Note 18 for further details regarding the sale to iTech.
Exploration Licences and applications.
Location
Tenement
Commodity
Jurisdiction
Tenements classified as assets of disposal group held for sale:
South Australia
North Cowell
Cockabidnie
Wildhorse Plains
Carpie Puntha
Burra North
Napoleons Hat
Blue Hills
Whyte Yarcowie
Pine Creek
Altimeter
Franklyn
Peterborough
Bendigo
Caralue Bluff
Kings Bluff
Billa Kalina
Royal Charlie
Murray
New South Wales
Crowie Creek
Stanthorpe
Other Licenses
Location
Campoona Shaft
Sugarloaf
Pindari
EL 6363
EL 5791
EL 6647
EL 5870
EL 6351
EL 6637
EL 5794
EL 5935
EL 6000
EL 6029
EL 6160
EL 6287
EL 6354
EL 6478
EL6605
EL6609
EL6616
ELA167/2020
EL 8871
EL 8894
Tenement
ML 6470
MPL 150
MPL 151
Graphite
Graphite
Graphite
Graphite
Base Metals
South Australia
South Australia
South Australia
South Australia
South Australia
Copper / Gold
South Australia
Copper / Gold
South Australia
Cobalt / Copper
South Australia
Copper / Gold
South Australia
Copper / Gold
South Australia
Copper / Gold
South Australia
Copper / Gold
South Australia
Copper / Gold
South Australia
Kaolin
Gold
IOCG
Copper/Gold
Copper/Gold
South Australia
South Australia
South Australia
South Australia
South Australia
Copper/Gold
Tungsten/Tin
New South Wales
New South Wales
Description
Campoona Shaft - graphite mining
Graphite and graphene processing facility
Pindari pipeline - process water for Sugarloaf
All of the above tenements and tenement applications are held 100% by Pirie Resources Pty Ltd, Archer Pastoral Company Pty Ltd
and SA Exploration Pty Ltd except for EL 6647 where S Uranium Pty Ltd has the rights to explore and develop uranium projects.
Annual Report 2021 / Archer Materials Limited 67
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 22 – TENEMENT INTERESTS …..CONTINUED
Tenements sold to ChemX Materials Pty Ltd during the year
The below tenements were not held by the Company as at 30 June 2021, following the sale of these assets to ChemX
Materials Ltd during the year. The table below provides details of the tenements and associated prior year carrying value
of these tenement assets. Refer to Note 17 for further details regarding the sale transaction with ChemX Materials Ltd.
Exploration Licences
Location
South Australia
Carappee Hill 1
Waddikee 1
TOTAL
Tenement
Commodity
2021 Carrying
2020 Carrying
EL 5920
Manganese
EL 5815
Manganese /Kaolin
value
$
-
-
-
value
$
8,618
281,439
290,056
1 Archer is to be granted a 2% Net Smelter Return royalty on the value of all minerals (excluding graphite) extracted from the Tenements.
Note 9 provides details of the movement in exploration and evaluation assets during the current and prior year reporting
periods, and includes a prior year reclassification of exploration and evaluation assets to ‘assets of disposal groups
classified as held for sale’ in the Statement of Financial Position.
NOTE 23 – RELATED PARTY TRANSACTIONS
(A) Subsidiaries
Interests in subsidiaries are disclosed in Note 8.
(B) Key Management Personnel
Disclosures relating to Key Management personnel are set out in Note 4 and the Remuneration Report contained within the
Directors’ Report.
(C) Other transactions with related parties
Piper Alderman lawyers were paid a total of $53,099 (2020: $29,950) for legal services rendered to the Group. Mr English
is a partner of Piper Alderman lawyers. The fees were at normal commercial rates.
NOTE 24 – FINANCIAL INSTRUMENTS
(A) Financial Risk Management Policies
The Group’s financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable and
payables.
(B) Non-Cash Financing and Investing Activities
There were no non-cash financing and investing activities undertaken during the current or prior reporting periods.
i) Treasury Risk Management
The Board meets on a regular basis to analyse financial risk exposure and to evaluate treasury management strategies in
the context of the most recent economic conditions and forecasts.
68 Annual Report 2021 / Archer Materials Limited
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 24 – FINANCIAL INSTRUMENTS …..CONTINUED
The Board’s overall risk management strategy seeks to assist the consolidated group in meeting its financial targets, whilst
minimizing potential adverse effects on financial performance.
ii) Financial Risk Exposure and Management
The main risk the group is exposed to through its financial instruments is interest rate risk.
Interest Rate Risk
Interest rate risk is managed with a mixture of fixed and floating rate cash deposits. It is the policy of the group to keep
surplus cash in high yielding deposits.
Weighted Average
Effective Interest
Rate
2021
2020
%
%
Interest Bearing
Non Interest Bearing
Total
2021
$
2020
$
2021
$
2020
$
2021
$
2020
$
0.15%
0.81%
0.40% 5,157,481 6,994,126
1.51% 1,081,618 1,120,556
2,692,644
-
-
-
5,157,481 6,994,126
1,081,618 1,120,556
2,692,644
-
-
497,738
316,404
497,738
316,404
6,239,099 8,114,682 3,190,382
316,404 9,429,481 8,431,086
-
-
-
-
-
-
-
-
-
-
(279,562)
(184,422)
(279,562)
(184,422)
(30,090)
-
(30,090)
-
(279,562)
(184,422)
(279,562)
(184,422)
6,239,099
8,114,682
2,910,821
131,982
9,149,919 8,246,664
Financial
Assets
Cash at bank
Deposits
Financial assets
Receivables
Total Financial
Assets
Financial
liabilities
Payables
Lease liability
Total Financial
Liabilities
Total Net
Financial
Assets/
(Liabilities)
b) Sensitivity Analysis
Interest Rate and Price Risk
The group has performed a sensitivity analysis relating to its exposure to interest rate risk and price risk at reporting date. This
sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.
Annual Report 2021 / Archer Materials Limited 69
Notes to the Financial Statements for the year ended 30 June 2021 NOTE 24 – FINANCIAL INSTRUMENTS …..CONTINUED
Interest Rate Sensitivity Analysis
At 30 June 2021, the effect on loss and equity as a result of changes in the interest rate, with all other variables remaining
constant would be as follows:
Change in loss
- Increase in interest rates by 2%
- Decrease in interest rates by 2%
Change in equity
- Increase in interest rates by 2%
- Decrease in interest rates by 2%
CONSOLIDATED GROUP
2021
$
2020
$
21,632
(21,632)
21,632
(21,632)
22,411
(22,411)
22,411
(22,411)
c) Net Fair Value of Financial Assets and Liabilities
The net fair value of cash and cash equivalent and noninterest bearing monetary financial assets and financial liabilities of
the consolidated entity approximate their carrying value.
The net fair value of other monetary financial assets and financial liabilities is based on discounting future cash flows by the
current interest rates for assets and liabilities with similar risk profiles. The balances are not materially different from those
disclosed in the balance sheet of the consolidated entity.
d) Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date to recognised
financial assets, is the carrying amount, net of any provisions for doubtful debts of those assets, as disclosed in the balance
sheet and notes to the financial statements.
The consolidated entity does not have any material credit risk exposure to any single debtor or group of debtors under
financial instruments entered into by the consolidated entity.
70 Annual Report 2021 / Archer Materials Limited
Notes to the Financial Statements for the year ended 30 June 2021
NOTE 25 – ARCHER MATERIALS LIMITED PARENT COMPANY INFORMATION
PARENT ENTITY
ASSETS
Current Assets
Financial assets
Investments in subsidiaries
Other Non-current assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Non-current Liabilities
Loans to subsidiaries
TOTAL LIABILITIES
EQUITY
Issued capital
Share based payment reserve
Acquisition reserve
Retained losses
TOTAL EQUITY
FINANCIAL PERFORMANCE
Profit / (loss) for the year
Other comprehensive income
TOTAL PROFIT / (LOSS)
PARENT ENTITY
30 JUNE
2021
$
30 JUNE
2020
$
6,697,744
2,692,644
266,525
225,389
9,882,302
550,879
90,977
25,269
667,125
8,362,472
-
266,624
127,591
8,756,657
640,590
41,970
25,269
707,829
33,093,217
1,148,813
240,000
(25,266,853)
9,215,177
32,485,250
997,000
240,000
(25,673,421)
8,048,829
154,131
-
154,131
(2,036,761)
-
(2,036,761)
Guarantees in relation to relation to the debts of subsidiaries
Archer Materials Limited has not entered into a deed of cross guarantee with its wholly-owned subsidiaries Pirie Resources
Pty Ltd, Archer Pastoral Company Pty Ltd, Leigh Creek Magnesite Pty Ltd, Archer Energy & Resources Pty Ltd, SA
Exploration Limited, CH Magnesite Pty Ltd, Carbon Allotropes Pty Limited, Archer IOCG Pty Ltd and Archer Metals Pty Ltd.
Contingent assets, liabilities and commitments
In June 2021 Archer announced the completion of the sale of tenements to ChemX Materials Ltd (refer Note 17). In addition
to the consideration already received, Archer is also entitled to a bonus payment equal to 5% of the enterprise value of
ChemX at the time of ASX listing, paid in cash or shares at the election of ChemX. As at the date of this report ChemX has
not listed on ASX. Archer is also entitled to a 2% Net Smelter Return royalty on the value of all minerals (excluding graphite)
extracted from the tenements sold to ChemX.
Archer has no further contingent assets, liabilities or commitments as at 30 June 2021 (30 June 2020: Nil).
Annual Report 2021 / Archer Materials Limited 71
Notes to the Financial Statements for the year ended 30 June 2021
NOTE 26 – EVENTS SUBSEQUENT TO REPORTING DATE
• On 17 July 2021, 200,000 unlisted options previously issued under the Company’s employee incentive scheme (exercise
price of $0.1929 and expiry date of 31 March 2023) were exercised into ordinary shares.
• At the Company’s General Meeting held on 30 August 2021, Archer shareholders approved the sale of the Company’s
remaining mineral exploration projects to iTech in return for 50 million iTech shares (Resolution 1) and the reduction of
capital by way of pro-rata In-Specie Distribution of the 50 million iTech shares to eligible Archer shareholders (Resolution 2).
The Directors are not aware of any other matter or circumstance that has arisen since 30 June 2021 that has significantly
affected, or may significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in
future financial years.
72 Annual Report 2021 / Archer Materials Limited
Notes to the Financial Statements for the year ended 30 June 2021 DIRECTORS DECLARATION
The Directors of the Company declare that:
1. the Financial Statements and Notes as set out on pages 37 to 72 are in accordance with the Corporations Act 2001 and:
a) comply with Australian Accounting Standards and International Financial Reporting Standards as disclosed in Note 1;
and
b) give a true and fair view of the financial position as at 30 June 2021 and of the performance for the year ended on that
date of the Consolidated Group;
2. the Executive Chairman and the Chief Financial Officer have each declared that:
a) the financial records of the Company for the year ended have been properly maintained in accordance with section
286 of the Corporations Act 2001
b) the financial statements and notes for the financial year comply with the Accounting Standards; and
c) the financial statements and notes give a true and fair view;
3. in the Directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts as and
when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
GREG ENGLISH
EXECUTIVE CHAIRMAN
Adelaide
Dated this 23rd day of September 2021
Annual Report 2021 / Archer Materials Limited 73
Directors Declaration 74 Annual Report 2021 / Archer Materials Limited
Independent Auditor’s Report Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. www.grantthornton.com.au Level 3, 170 Frome Street Adelaide SA 5000 Correspondence to: GPO Box 1270 Adelaide SA 5001 T +61 8 8372 6666 Independent Auditor’s Report To the Members of Archer Materials Limited Report on the audit of the financial report Opinion We have audited the financial report of Archer Materials Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated 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 giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year ended on that date; and b 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 (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. Annual Report 2021 / Archer Materials Limited 75
Independent Auditor’s Report Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter How our audit addressed the key audit matter Sale of Subsidiaries Holding Mineral Tenements to iTech Minerals Ltd – Note 18 During the year, the Group entered into an agreement to sell three subsidiaries holding the Group’s remaining mineral tenements to iTech Minerals Ltd. The consideration for this transaction is to be settled via the issue of 50 million shares in iTech Minerals Limited valued at $0.20 each and is contingent on the completion of an Initial Public Offer. As these subsidiaries hold the remaining Exploration and Evaluation assets these have been classified as Non-current assets held for sale at 30 June 2021 and presented as a discontinued operation in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations. The recognition and disclosure of this transaction in the financial report is complex and required significant audit attention, as the Group was required to separate its operations between continuing and discontinued b which has a significant and pervasive impact on the financial results and report of the Group. This transaction is considered to be a key audit matter due to the size and nature of the transactions. Our procedures included, amongst others: Reviewed the sale agreement to understand the key terms including sale price, other sale particulars and conditions of the agreement. Recalculated the carrying value of the assets and liabilities as identified in the sales agreements to test that these were accurately separated from the continuing business Re-performed the calculations of the impairment write down to the carrying value of the Exploration and Evaluation assets by comparing the consideration to be received to the carrying value of the assets in the disposal group; and Assessed the appropriateness of the Non-Current assets held for sale and discontinued operations disclosures in the financial 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 Group’s annual report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors’ for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. 76 Annual Report 2021 / Archer Materials Limited
Independent Auditor’s Report Auditor’s responsibilities for the audit of the financial reportOur 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 assuranceis 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 ofusers taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf. This description forms part of our auditor’s report.Report on the remuneration reportOpinionon the remuneration reportWe have audited the Remuneration Report included in the Directors’ report for the year ended 30 June 2021.In our opinion, the Remuneration Report of Archer Materials Limited, for the year ended30 June 2021complies with section 300A of the Corporations Act 2001.ResponsibilitiesThe 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. GRANT THORNTON AUDIT PTY LTDChartered AccountantsJ L Humphrey Partner–Audit&AssuranceAdelaide,23September 2021 ADDITIONAL INFORMATION
Compiled as at 2 September 2021
Additional information required by the ASX Listing Rules and not disclosed elsewhere in this report is set out below.
SHAREHOLDER INFORMATION
Substantial Shareholders
There are no substantial shareholders in the Company with 5% or greater relevant interest in securities of the Company.
Distribution of equity securities
Number of security holders by size of holding:
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Ordinary Shares
Unlisted Options
2,528
3,910
1,588
2,279
344
10,649
-
-
-
-
8
8
Unmarketable Parcels
Minimum parcel size
Minimum $500.00 parcel at $1.73 per share
290 shares
Holders
435
Units
59,899
VOTING RIGHTS
The voting rights attaching to each class of equity securities is set out below:
(a) Ordinary Shares: On a show of hands, every person present who is a member or proxy, attorney or representative
of a member has one vote and upon a poll each share shall have one vote.
(b) Unlisted Options: No voting rights.
Annual Report 2021 / Archer Materials Limited 77
Additional Information
TWENTY LARGEST HOLDERS OF EACH CLASS OF QUOTED EQUITY SECURITY
Ordinary Shares
Rank
Name
Shares % Issued capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
GDE EXPLORATION (SA) PTY LTD
CITICORP NOMINEES PTY LIMITED
INVERTON PTY LTD
MR ROGER EDWARD KOCH
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
DR MOHAMMAD CHOUCAIR
MR FORBES VALE SPRAWSON + MRS MARGARET MARY SPRAWSON
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR BASIL CATSIPORDAS
KOOYAP PTY LTD
MR ALISTAIR CHARLES JACKSON
MRS DEBORAH ANNETTE ROSSITER
GDE EXPLORATION (SA) PTY LTD
MR STEPHEN MAHNKEN + MS DIOR MAHNKEN
BNP PARIBAS NOMINEES PTY LTD
MR DUNCAN GERARD GOWANS + MRS JODIE LOUISE GOWANS
MR JARROD DRISCOLL
GERARD ANDERSON SUPER PTY LTD
CLOCKWELL PTY LTD
7,777,919
7,534,798
4,905,226
3,870,761
2,800,000
2,606,788
2,600,000
2,300,000
2,200,465
2,000,000
1,880,770
1,547,347
1,463,679
1,462,820
1,428,571
1,325,121
1,250,000
1,132,957
1,078,041
1,048,063
3.42
3.31
2.15
1.70
1.23
1.14
1.14
1.01
0.97
0.88
0.83
0.68
0.64
0.64
0.63
0.58
0.55
0.50
0.47
0.46
Total
52,213,326
22.93
Corporate Governance Statement
For the Year Ended 30 June 2021
The Corporate Governance Statement for the Group has been released as a separate document and is located in the
Corporate Governance section of the Company’s website at: www.archerx.com.au
78 Annual Report 2021 / Archer Materials Limited
Additional Information DIRECTORS
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Greg English – Executive Chairman
Alice McCleary – Non-Executive Director
Kenneth Williams – Non-Executive Director
CHIEF EXECUTIVE OFFICER
Dr Mohammad Choucair
COMPANY SECRETARY
Damien Connor
REGISTERED OFFICE
Lot Fourteen, Frome Road, ADELAIDE SA 5000
Telephone: +61 8 8272 3288
Email: hello@archerx.com.au
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 5, 115 Grenfell Street
ADELAIDE SA 5000
AUDITORS
Grant Thornton Audit Pty Ltd
Level 3, 170 Frome Street
ADELAIDE SA 5000
SOLICITOR
Piper Alderman
Level 16, 70 Franklin Street
ADELAIDE SA 5000
BANKERS
National Australia Bank
Level 11, 22 King William Street
ADELAIDE SA 5000
AUSTRALIAN SECURITIES EXCHANGE
The Company is listed on the Australian Securities Exchange
ASX CODE: AXE
Annual Report 2021 / Archer Materials Limited 79
Corporate Directory Annual Report
FOR THE YEAR ENDED 30 JUNE 2021