Welcome to the
Zirconium and
Titanium Age
Astron Corporation Limited ARBN 154 924 553
Incorporated in Hong Kong, Company Number: 1687414
Annual Report for the Year Ended 30 June 2017
CAUTIONARY STATEMENT
Certain sections of this report contain forward-looking statements that are subject to risk factors associated with,
among others, the economic and business circumstances occurring from time to time in the countries and sectors
in which the Astron Group operates. It is believed that the expectations reflected in these statements are
reasonable but they may be affected by a wide range of variables which could cause results to differ materially
from those currently
COMPETENT PERSONS STATEMENT
As a result of delayed reporting, no reference to the company’s resources or reserves shall be made or
referenced in this report.
No Competent Person Statement or peer review is provided for the reporting period for the period covered by this
report.
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Contents
Astron History
Time to Rebuild
Chairperson’s Report
Operations Review
Donald Project (DMS)
DMS Summary
China Operations
Senegal
USA Developments
Other opportunities
The year ahead
Managing Directors Report
Donald Mineral Sands Project – Murray Basin
Senegal Mineral Sands Project – Niafarang
Developed Products
Specialty R&D
Sponge zirconium technology
Removal of Zircon Impurities
Pelletizing technology
CP TiO2 technology
ZOC technology
Sustainable Development
Corporate Governance Statement
Directors Report
Financial Statements
Investor Information
Corporate Directory
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Astron History
Astron Corporation Ltd (Astron) is domiciled in Hong Kong and listed on the Australian Securities
Exchange (ASX). Astron is well-known in the industry globally, specialized in its zirconium and
titanium business.
Astron’s main focus is developing its two wholly owned mineral sands projects, the Donald Project
in Australia and the Niafarang project in Senegal, West Africa. Astron has spent a considerable part
of the past year further optimising the updated definitive feasibility study for the Donald Project.
The Donald project is one of the largest known zircon and titanium resources in the world.
The Niafarang project in Senegal, West Africa, is a high-grade coastal mineral sands deposit, to
be excavated using simple dredge mining and processing methodologies. Astron has obtained
the mining licence for the Niafarang Project and continues to work on social acceptance and
other relevant social resettlement programs.
Astron has continued to build on its unique 25 year track record in China as a Chinese-Australian
company in developing, selling and marketing zirconium and titanium products. Astron has
significant research and technology capabilities in titanium and zirconium metal and chemical
processes. Astron carries on its Chinese mineral sands trading business to maintain close
relationships with its key customers. Astron continues to further develop its technical capabilities of
producing zircon and titanium metals and chemicals in establishing customer specific satisfaction.
Astron was at one time the largest quality manufacturer of fused zirconia and zirconium carbonate
in the world. Astron was also a leading company that introduced titanium slag into the market in
China.
In the meantime, Astron was also a pioneering company that introduced tailing processing
technology into China. Astron has strong research and development of zirconium, titanium and
chemical products with many proprietary technologies. Astron is a manufacturer of zirconium and
titanium resource and high-end materials in the world. Astron built a small-size high purity zirconia
production facility towards the end of 2014.
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Time to Rebuild
Mining, production, processing, and trading activities are increasing with major
developments and material movements globally, these are expected to
accelerate in the second half of the 2018 calendar year.
Since 2014, DMS Project has been predominantly project start ready. However,
the project remains subject to financing. The construction program was not acted
upon during the reporting period as a result of key strategic financing milestones
not being met. The delays were not catastrophic to the successes of the project
and on the upside give greater recovery time for the final products within the
global market scene.
The Mining License was awarded for the Senegal Niafarang Project and all
procurement objectives are either completed or well advanced. This Project is
working towards a production start in mid to late Q4 2018.
High purity grade Zirconia Project has been completed with trial production achieving what Astron
believes to be as the best quality in the world. Full capacity will reach 500 tons per year which will
generate outstanding increases and benefits to the Astron Business.
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Chairperson’s Report
Dear Shareholders,
OPERATIONS REVIEW
Donald Project (DMS)
Funding the Donald project remains the primary objective.
Further work has been undertaken to update, upgrade and optimise the definitive feasibility study,
which was originally announced in July 2013.
Donald Mineral Sands has continued to work with and show support of its local community. This
included the water trade with the Victorian Environmental Water Holder to support the local
community through environmental water flows. No further land was purchased during the year.
DMS Summary
2017 has been a year of great progress of our Murray Basin project. The achievements to date
have been a collaborative effort from all team members abroad, locally and with many contractors
and consultants across many areas of expertise. The Company has now resolved the technical
challenges of the Donald Minerals Sands project and anticipates an optimisation program to apply
all necessary considerations.
The Company has also achieved what it believes is a very competitive capital cost and operation
cost outcome as part of the revised DFS on which the Company is working. All of the necessary
approvals for the project (except for the work plan submission) have been granted.
From an external perspective, the business cycle for the Zircon and Titanium industry is anticipated
to improve following a 5 year of low. DMS will start construction of the Donald Mineral Sands project
once final financing milestones have been achieved and hopes to enjoy the benefits of the
forthcoming positive industry cycle.
China Operations
There has been a continuation of laboratory research efforts, mainly in relation to additives for road
paint and fluoride processes in the China research facility. A trial plant is being considered for the
coming financial year/s.
Highly-pure zirconia products have been well acknowledged by Areva which placed three orders for
these products in 2017. Astron was also honoured to invite ATI to visit its zirconia production facility
in Yingkou Plant and ATI highly regarded the production process and product quality. Astron
anticipates working with ATI in the near future.
Certain sales were achieved in China to maintain customer relationships, while various projects are
in the development and execution phases. Where the sales volumes were minor in volume, they
were major achievements in honouring stakeholder agreements and relationships.
Senegal
The efforts in Senegal have progressed significantly during the period in review, with the complex
negotiations with the various parties playing a role within the Casamance Province (in which the
Niafarang project is located) concluded, subject to a number of minor follow up items. A small mine
licence (SML) was granted in June 2017 for the Niafarang project.
As part of the process, Astron remains engaged with the local community where possible, this
includes such commitments as sponsoring the Countries Casasport Soccer Team. The Team, a
Major League Soccer team representing the region / province of Casamance hosted an official
signing ceremony where Astron representatives attended to present its present and future support
for the team. Astron continues negotiations with the implementation of learning and development
opportunities and industry alternatives or growth for the region’s economic and social development
program.
Astron has commenced delivery all the equipment and relevant facilities required for Senegal
Project by ship, which are anticipated to arrive at the mine site at the first through to 3rd quarter of
2018.
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USA Developments
Astron has obtained access to a yet to be fully defined volume of predominantly titanium mineral ore
sands in the USA state of Georgia. These are anticipated a likely fit into the processing, refinement
and sales capabilities suited to Astron’s Yingkou business function. The first shipment is anticipated
to occur in the first half of 2018. An upgraded processing facility for these materials from the USA is
being planned for and defined suited to Astron’s Yingkou Plant site both environmentally and
geographically.
OTHER OPPORTUNITIES
Astron has also identified a strategy to consider other potential projects. Astron has currently
identified a number of possible projects in the USA that appear to be worthy of further investigation.
While no firm decision has been made in respect of any of these projects, there are some that may
be worth pursuing further. Once a decision is made by Astron regarding any of these projects we
will announce the scope of further studies and the prospects regarding any committed outcomes.
THE YEAR AHEAD
For the coming year, Astron will be focused on investigating all options for financing the Donald
Project in Victoria, bringing the Niafarang Project in Senegal into production by commencing
contract mining and continuing development of our research capability for zircon and titanium
metals in China.
Astron continues to monitor its staffing levels and is considering its long-term structure and other
requirements. It has not yet been determined whether any change to Astron’s structure will be
implemented and this is a matter currently under review. During the financial year, there has been
no change to the board of directors of Astron Corporation Ltd.
Finally, I thank my team at Astron for their continued support, hard work and enthusiasm and I look
forward to entering an exciting new phase with you all.
Gerard King
Chairman - Astron
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Managing Directors Report
This financial year has been a challenging period. While Astron has focused on the key aspects of
the Donald Project and the granting of the small mine licence in Senegal, at times it has appeared
that progress is slower than anticipated, notwithstanding all the efforts being put into progressing
these projects at the highest possible level of professionalism.
The Group had a net loss for the year of $2,590,844 (2016 - $(4,408,196)) from operating activities.
Administration expenditure during the financial year was on par with last financial year.
As at 30 June 2017, the Astron Group had a net asset value of $102,658,339. Around $1,378,129
of this amount is cash or cash equivalents. It is important to recognise that the net asset value is
based on a book value for the Donald and Niafarang projects, which does not take any account of
underlying valuations of the mineral sands project capabilities.
Total revenue comprising sales, interest received and other income increased almost double from
the prior year to $2,555,312, essentially due to increased trading in the Chinese markets and
favourable market conditions leading to increased margins.
Available for sale, financial assets comprise of shares in Saison Steel, Trek Metals and Greenpower
Energy. The combined market value of these investments has increased by $164,798 to $217,293.
During the year an investment in Altona Mining was sold, reducing the carrying value by $487,742.
The increase in intangible assets arises from development expenditure capitalised in respect of the
Donald and Niafarang projects.
Albeit a difficult year, the overall progress across all projects has achieved most set strategic
milestones as per internal planning and strategic sessions conducted in late 2016. Operating within
a challenging phase of growth and a strict financial climate has undoubtedly proven our teams have
a committed culture in achieving desired outcomes and strategic results while maintaining
compliance boundaries. A credit to all involved.
Alex Brown – Managing Director
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Donald Mineral Sands Project – Murray Basin
Project Status: Financing and Detailed Engineering Definition Stage
World Class Zircon Rich deposit – The Murray Basin is an iconic Geological formation where it has
layered our land as we know it today with high value and high grade mineral sands anomalies. The
Donald project area is a significant generational opportunity for our regional communities.
To achieve Astron’s global objectives during 2017 much effort was given to the planning and
housekeeping of existing design and external reporting requirements. Strategies were implemented
to focus on value adding outcomes related to defining the next phase of works.
Approvals were sourced to conduct an additional bulk Run of Mine (ROM) ore material sample from
the pre-exiting test pit void. The test pit work scope involves defining moisture, geotechnical,
compaction and safe angles of repose from aged and newly excavated batters and berms.
Rehabilitation trails would follow as a matter of urgency to populate environmental management
plans.
Specific tasks – 2018
• Bulk Sample and test pit excavation proposed first-quarter 2018
• Preliminary rehabilitation of Bulk sample site first-quarter 2018
• Complete work plan and update EIS where necessary proposed third quarter 2018
• Dependent on funding, initiate detailed phases and execution strategies from mid 2018
onwards, the following actions are proposed:
• Commence execution and development of the Astron owners team – engineering, planning,
project management
• Commence final review of the detailed engineering scope and optimisation processes
• Commence long lead item procurement
• Commence detailed engineering
• Execute and ramp up community engagement program
• Commence road upgrade engineering and design
• Commence initial pipeline upgrades to site for process water access
• Compile final PEP (Project execution Plan)
• Develop project base and head office – owners team spread across Project site, head office
and China
• Define and lock down Design Criteria’s and Financing Strategies.
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Senegal Mineral Sands Project – Niafarang
Niafarang Project progressed significantly with respect to Astron’s presence with the Country and
more specifically locally represented through Senior Team site visits including in-country
representation through Astron’s consultancy and visible working groups.
Milestones achieved included financial offtakes, Mining Licence granting and the implementation of
social sponsorship and development programs.
Reporting period achievement and forecast 2018 milestones include,
• Casasport sponsorship signing ceremony Q2 2017
• Feasibility Design complete Q3 2017
• Mining Licence granted Q2 - June 2017
• Contractor Services definitions, discussions and preliminary services developed 2017.
• Multiple International Export sites approved for use, early 2017
• Awarding of Road Construction and Well Drilling Contracts Q4 2017
• Detailed mine planning and cross section developments Q1 2018
• Expected Execution Commencement the Q2 2018
• Preliminary design and Scope of Facilities
• Modelling of the High-Grade beach deposit near surface level early 2018
• Construction to commence Q2-3 2018
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Developed Products
Nuclear-grade zirconia production Yingkou, People's Republic of China
200tpa high purity zirconium sponge production facility and an independent lab equipped with
advanced analysers including Bruker S8 XRF, Leeman ICP and laser particle size analyser Atomic
energy (high purity grade) zirconia production facility in operation already, producing high-quality high
purity grade zirconia products
Specialty R&D
Sponge zirconium technology
Astron has succeeded in producing high purity grade zirconia containing hafnium less than 50ppm by
TBP-HCL-HNO3 extraction method. A facility of 200tpa highly-pure zirconia has been established,
with independent lab equipped with ICP and XRF and etc.
Removal of Zircon Impurities
Astron has spent nearly ten years and succeeded in removing U/Th/Fe/Ti from zircon. This can
greatly improve the quality of zircon. Lower impurity content makes better glaze color, which can
provide premium raw materials for ceramics, refractory, casting and chemical industry in China. The
concentrated U solid waste can provide uranium resource of low cost and high content to nuclear
industry.
Pelletizing technology
Rutile pelletizing is a process to solve the problem of fine rutile being unable to be used for TiCl4. This
can also indirectly improve the fine rutile value. It is one of the methods of recovering the blow-off of
chlorinator. With chlorination, the particle size of the rutile products being processed in this method
enables better chlorination than common rutile and slag materials.
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CP TiO2 technology
Astron spent 3 years and more than several tens of million renminbi in completing the detailed design
of 90,000tpa CP TiO2 Project with the cooperation with a team of experts in China and overseas.
ZOC technology
Alkaline fusion is being generally used for ZOC industry with great pollution and poor economy.
Astron’s CP method is environment agreeable with its by products being of improved economy.
Sustainable Development
Astron’s sustainable development encompasses our commitment and policy towards our employees,
local communities, health and safety, and the environment.
EMPLOYEES AND OTHER STAKEHOLDERS
Astron Group currently has about 60 employees. We take our responsibility to our staff seriously
through our human resources policies.
Astron’s HR policies demonstrate care and concern for our staff and their training, development and
happiness, as well as care and concern for our customers, suppliers and shareholders.
In Astron, salaries are based on competitiveness within the local market environment. Additionally,
some key employees have a variable performance related bonus which is determined by pre-
arrangement with alignment with individual and team objectives.
LOCAL COMMUNITIES
Astron is committed to bringing positive change to the communities surrounding its mining operations.
Astron’s Donald Project has been planned in close consultation with the local community to provide
significant economic and social benefits to the community. Astron is also in the process of planning a
community fruit farming initiative in Senegal, nearby Astron’s Niafarang Project and considering other
options for a dried fruit business. The social impact of the Niafarang project and acceptance of it has
been the focus point during the year, in particular by focusing on communication strategies and
information drives on small groups. Part of the engagement with local communities has included
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discussions of opportunities including the potential for a dried fruit business, new soccer sponsorship
arrangements and other ways in which the project and Astron may benefit the local communities, as
well as Senegal as a whole.
ENVIRONMENT
Astron strives to be the best in class performance in all aspects of environmental management.
Compliance with all applicable legal requirements and legal codes of practice is seen as a minimum
standard and we work to prudently reduce emissions and waste.
The Astron Group is totally committed to continuing environmental vigilance and improving systems of
control, compliance and results such as the minimisation of all kinds of waste from mining and down
streaming processes where practicably possible.
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CORPORATE GOVERNANCE STATEMENT
The Board of Astron is responsible for the corporate governance of the Group. The Board guides
and monitors the business and affairs of Astron on behalf of the shareholders by whom they are
elected and to whom they are accountable. This statement reports on Astron’s key governance
principles and practices.
COMPLIANCE WITH BEST PRACTICE RECOMMENDATIONS
1.
The Company, as a listed entity, must comply with the Corporations Act 2001 (so far as it applies to
foreign registered companies) and the Australian Securities Exchange (ASX) Listing Rules. The
ASX Listing Rules require the Company to report on the extent to which it has followed the
Corporate Governance Principles and Recommendations published by the ASX Corporate
Governance Council. Where a recommendation has not been followed, that fact is disclosed,
together with the reasons for the departure.
The table below summaries the Company’s compliance with the Corporate Governance Council’s
Principles and Recommendations:
Principle #
ASX Corporate Governance Council Recommendations
Reference
Comply
Principle 1
Lay solid foundations for management and oversight
1.1
A listed entity should disclose:
2.1
Yes
(a)
(b)
the respective roles and responsibilities of its board
and management; and
those matters expressly reserved to the board and
those delegated to management.
1.2
A listed entity should:
2.2, 3.2
Yes
1.3
1.4
1.5
(a)
(b)
undertake appropriate checks before appointing a
person, or putting forward to security holders a
candidate for election, as a director; and
provide security holders with all material
information in its possession relevant to a decision
on whether or not to elect or re-elect a director.
A listed entity should have a written agreement with each director
and senior executive setting out the terms of their appointment.
The company secretary of a listed entity should be accountable
directly to the board, through the chair, on all matters to do with
the proper functioning of the board.
A listed entity should:
(a)
(b)
have a diversity policy which includes requirements
for the board or a relevant committee of the board
to set measurable objectives for achieving gender
diversity and to assess annually both the objectives
and the entity’s progress in achieving them;
disclose that policy or a summary of it; and
3.2
2.6
6.3
No
Yes
Yes
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1.5
(continued):
(c)
disclose as at the end of each reporting period the
measurable objectives for achieving gender
diversity set by the board or a relevant committee
of the board in accordance with the entity’s
diversity policy and its progress towards achieving
them, and either:
(1)
(2)
the respective proportions of men and women
on the board, in senior executive positions and
across the whole organisation (including how
the entity has defined “senior executive” for
these purposes); or
if the entity is a “relevant employer” under the
Workplace Gender Equality Act, the entity’s
most recent “Gender Equality Indicators”, as
defined in and published under that Act.
6.3
Yes
1.6
A listed entity should:
2.8, 3.2
Yes
3.2, Remuneration
Report
Yes
3.2
No
(a)
(b)
have and disclose a process for periodically
evaluating the performance of the board, its
committees and individual directors; and
disclose, in relation to each reporting period,
whether a performance evaluation was undertaken
in the reporting period in accordance with that
process.
1.7
A listed entity should:
(a)
(b)
have and disclose a process for periodically
evaluating the performance of its senior executives;
and
disclose, in relation to each reporting period,
whether a performance evaluation was undertaken
in the reporting period in accordance with that
process.
Principle 2
Structure the Board to add value
2.1
The board of a listed entity should:
(a)
have a nomination committee which:
(1)
has at least three members, a majority of whom
are independent directors; and
is chaired by an independent director,
(2)
and disclose:
(3)
(4)
(5)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the
number of times the committee met throughout
the period and the individual attendances of the
members at those meetings; or
(b)
if it does not have a nomination committee,
disclose that fact and the processes it employs to
address board succession issues and to ensure
that the board has the appropriate balance of skills,
knowledge, experience, independence and
diversity to enable it to discharge its duties and
responsibilities effectively.
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2.2
2.3
2.4
2.5
2.6
A listed entity should have and disclose a board skills matrix
setting out the mix of skills and diversity that the board currently
has or is looking to achieve in its membership.
A listed entity should disclose:
2.2, 2.3
2.3, 2.5
Yes
Yes
(a)
(b)
(c)
the names of the directors considered by the board
to be independent directors;
if a director has an interest, position, association or
relationship of the type described in Box 2.3 (which
appears on page 16 of the ASX Recommendations
and is entitled “Factors relevant to assessing the
independence of a director”) but the board is of the
opinion that it does not compromise the
independence of the director, the nature of the
interest, position, association or relationship in
question and an explanation of why the board is of
that opinion; and
the length of service of each director.
A majority of the board of a listed entity should be independent
directors.
The chair of the board of a listed entity should be an independent
director and, in particular, should not be the same person as the
CEO of the entity.
A listed entity should have a program for inducting new directors
and provide appropriate professional development opportunities
for directors to develop and maintain the skills and knowledge
needed to perform their role as directors effectively.
2.5
2.3, 2.4, 2.5
No
Yes
3.2
Yes
Principle 3 Act ethically and responsibly
3.1
A listed entity should:
(a)
(b)
have a code of conduct for its directors, senior
executives and employees; and
disclose that code or a summary of it.
Principle 4
Safeguard integrity in corporate reporting
4.1
The board of a listed entity should:
(a)
have an audit committee which:
6.1
Yes
3.1
No
(1)
(2)
has at least three members, all of whom are
non-executive directors and a majority of whom
are independent directors; and
is chaired by an independent director, who is
not the chair of the board,
and disclose:
(3)
the charter of the committee;
(4)
(5)
the relevant qualifications and experience of the
members of the committee; and
in relation to each reporting period, the number
of times the committee met throughout the
period and the individual attendances of the
members at those meetings; or
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4.1
(continued)
(b)
if it does not have an audit committee, disclose that
fact and the processes it employs that
independently verify and safeguard the integrity of
its corporate reporting, including the processes for
the appointment and removal of the external
auditor and the rotation of the audit engagement
partner.
4.2
4.4
The board of a listed entity should, before it approves the entity’s
financial statements for a financial period, receive from its CEO
and CFO a declaration that, in their opinion, the financial records
of the entity have been properly maintained and that the financial
statements comply with the appropriate accounting standards
and give a true and fair view of the financial position and
performance of the entity and that the opinion has been formed
on the basis of a sound system of risk management and internal
control which is operating effectively.
A listed entity that has an AGM should ensure that its external
auditor attends its AGM and is available to answer questions
from security holders relevant to the audit.
Principle 5 Make timely and balanced disclosure
5.1
A listed entity should:
(a)
(b)
have a written policy for complying with its
continuous disclosure obligations under the Listing
Rules; and
disclose that policy or a summary of it.
3.1
No
5.3
No
4.1
No
4.2
Yes
Principle 6 Respect the rights of security holders
6.1
6.2
6.3
6.4
A listed entity should provide information about itself and its
governance to investors via its website.
A listed entity should design and implement an investor relations
program to facilitate effective two-way communication with
investors.
A listed entity should disclose the policies and processes it has in
place to facilitate and encourage participation at meetings of
security holders.
A listed entity should give security holders the option to receive
communications from, and send communications to, the entity
and its security registry electronically.
Principle 7 Recognise and manage risk
7.1
The board of a listed entity should:
4.1, 4.2
4.1, 4.2
Yes
Yes
4.1, 4.2
Yes
4.1, 4.2
Yes
3.1
No
(a)
have a committee or committees to oversee risk,
each of which:
(1)
(2)
has at least three members, a majority of whom
are independent directors; and
is chaired by an independent director,
and disclose:
(3)
the charter of the committee;
(4)
the members of the committee; and
as at the end of each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; or
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7.1
(continued)
(b)
if it does not have a risk committee or committees
that satisfy (a) above, disclose that fact and the
processes it employs for overseeing the entity’s
risk management framework.
3.1
No
7.2
The board or a committee of the board should:
5.1, 5.2
Yes
(a)
(b)
review the entity’s risk management framework at
least annually to satisfy itself that it continues to be
sound; and
disclose, in relation to each reporting period,
whether such a review has taken place.
7.3
A listed entity should disclose:
3.1
No
(a)
(b)
if it has an internal audit function, how the function
is structured and what role it performs; or
if it does not have an internal audit function, that
fact and the processes it employs for evaluating
and continually improving the effectiveness of its
risk management and internal control
processes.
7.4
A listed entity should disclose whether it has any material
exposure to economic, environmental and social sustainability
risks and, if it does, how it manages or intends to manage those
risks.
5.1
Yes
Principle 8 Remunerate fairly and responsibly
8.1
The board of a listed entity should:
(a)
have a remuneration committee which:
3.2
No
(1)
(2)
has at least three members, a majority of whom
are independent directors; and
is chaired by an independent director,
and disclose:
(3)
the charter of the committee;
(4)
(5)
the members of the committee; and
as at the end of each reporting period, the
number of times the committee met throughout
the period and the individual attendances of the
members at those meetings; or
(b)
if it does not have a remuneration committee,
disclose that fact and the processes it employs for
setting the level and composition of remuneration
for directors and senior executives and ensuring
that such remuneration is appropriate and not
excessive.
8.2
8.3
A listed entity should separately disclose its policies and practices
regarding the remuneration of non-executive directors and the
remuneration of executive directors and other senior executives.
3.2, Remuneration
Report
A listed entity which has an equity-based remuneration scheme
should:
6.2, Remuneration
Report
Yes
Yes
(a)
(b)
have a policy on whether participants are permitted
to enter into transactions (whether through the use
of derivatives or otherwise) which limit the
economic risk of participating in the scheme; and
disclose that policy or a summary of it.
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2.
THE BOARD OF DIRECTORS
2.1. Roles and Responsibilities of the Board
The Board is accountable to the shareholders and investors for the overall performance of
the Company and takes responsibility for monitoring the Company’s business and affairs and
setting its strategic direction, establishing and overseeing the Company’s financial position.
The Board is responsible for:
2.1.1. Appointing, evaluating, rewarding and if necessary the removal of the Chief
Executive Officer or their functional equivalent ("CEO") and senior management;
2.1.2. Development of corporate objectives and strategy with management and
approving plans, new investments, major capital and operating expenditures and
major funding activities proposed by management;
2.1.3. Monitoring actual performance against defined performance expectations and
reviewing operating information to understand at all times the state of the health of
the Company;
2.1.4. Overseeing the management of business risks, safety and occupational health,
environmental issues and community development;
2.1.5. Satisfying itself that the financial statements of the Company fairly and accurately
set out the financial position and financial performance of the Company for the
period under review;
2.1.6. Satisfying itself that there are appropriate reporting systems and controls in place to
assure the board that proper operational, financial, compliance, risk management
and internal control process are in place and functioning appropriately;
2.1.7. Approving and monitoring financial and other reporting;
2.1.8. Assuring itself that appropriate audit arrangements are in place;
2.1.9. Ensuring that the Company acts legally and responsibly on all matters and
assuring itself that the Company has adopted a Code of Conduct and that the
Company practice is consistent with that Code; and other policies; and
2.1.10. Reporting to and advising shareholders.
Other than as specifically reserved to the Board, responsibility for the day-to-day
management of the Company’s business activities is delegated to the CEO and senior
management.
2.2. Board Composition
The Directors determine the composition of the Board employing the following principles:
2.2.1. the Board, in accordance with the Company’s constitution must comprise a
minimum of three directors;
2.2.2. the roles of the Chairman of the Board and of the CEO should be exercised by
different individuals;
2.2.3. the majority of the Board should comprise directors who are non-executive (however
this is not currently the case and the Company is seeking to address this);
2.2.4. the Board should represent a broad range of qualifications, experience and
expertise considered of benefit to the Company; and
2.2.5. the Board must be structured in such a way that it has a proper understanding of,
and competency in, the current and emerging issues facing the Company, and can
effectively review management’s decisions.
The Company’s constitution requires one-third of the directors (or the next lowest whole
number) to retire by rotation at each Annual General Meeting (AGM), other than the
managing director. The directors to retire at each AGM are those who have been longest in
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Astron Corporation Limited
office since their last election. Where directors have served for equal periods, they may
agree amongst themselves or determine by ballot who will retire. A director must retire in any
event at the third AGM since he or she was last elected or re-elected. Retiring directors may
offer themselves for re-election.
A director appointed as an additional or casual director by the Board will hold office until the next
AGM when they may be re-elected. Any director appointed as an additional or casual director, is
not to be taken into account in determining the number of directors required to retire by rotation.
2.3. Board Membership
The Board is currently comprised of one non-executive directors and two executive directors.
Details of the Board member’s experience, expertise and qualifications are set out in the
Directors’ Report of the Annual Report under the heading “Directors”.
The Board of Directors at the time of issue of this report comprises:
2.3.1. Gerard (Gerry) King (Chairman of Directors (Non-Executive))
2.3.2. Alexander (Alex) Brown (Managing Director/President)
2.3.3. Mdm Kang Rong (Executive)
2.4. Chairman
The Chairman is responsible for:
2.4.1. leadership of the Board;
2.4.2. the efficient organisation and conduct of the Board’s functions;
2.4.3. the promotion of constructive and respectful relations between Board members and
between the Board and management;
2.4.4. facilitating the effective contribution of all Board members; and
2.4.5. committing the time necessary to effectively discharge the role of the Chairman.
The CEO is responsible for:
2.4.6. briefing directors in relation to issues arising at Board meetings;
2.4.7. implementing the Company’s strategies and policies; and
2.4.8. the day-to-day management of the Group’s business activities.
The Board specifies that the roles of the Chairman and the CEO are separate roles to be
undertaken by separate people.
2.5.
Independent Directors
The Company recognises that independent directors are important in assuring shareholders that
the Board is properly fulfilling its role and is diligent in holding senior management accountable for
its performance. The Board assesses each of the directors against specific criteria to decide
whether they are in a position to exercise independent judgment.
Directors of Astron are considered to be independent when they are independent of
management and free from any business or other relationship that could materially interfere
with, or could reasonably be perceived to materially interfere with, the exercise of their
unfettered and independent judgement.
In making this assessment, the Board considers all relevant facts and circumstances.
Relationships that the Board will take into consideration when assessing independence are
whether a director:
2.5.1. is a substantial shareholder of the Company or an officer of, or otherwise associated
directly with, a substantial shareholder of the Company;
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Astron Corporation Limited
2.5.2. is employed, or has previously been employed in an executive capacity by the
Company or another group member, and there has not been a period of at least
three years between ceasing such employment and serving on the Board;
2.5.3. has within the last three years been a principal of a material professional advisor or
a material consultant to the Company or another group member, or an employee
materially associated with the service provided;
2.5.4. is a material supplier or customer of the Company or other group member, or an
officer of or otherwise associated directly or indirectly with a material supplier or
customer; or
2.5.5. has a material contractual relationship with the Company or another group member
other than as a director.
2.5.6. has been a director of the entity for such a period that his or her independence may
have been compromised.
The Board notes that the mere fact that a director has served on a Board for a substantial
period does not mean that he or she has become too close to management to be considered
not independent. The Board will regularly assess the independence of all and any director
who serves on the Board.
Family ties and cross-directorships may be relevant in considering interests and relationships
which may affect independence, and should be disclosed to the Board.
The Company does not comply with ASX Recommendation 2.4, as there is not a majority of
non-executive directors nor is there a majority of independent directors on the Board. In
accordance with the definition of independence above, only one of the directors of the
Company is considered to be independent.
The Board believes that the Company is not of sufficient size to warrant the inclusion of more
independent non-executive directors in order to meet the ASX recommendation of
maintaining a majority of independent non-executive directors. The Company maintains a
mix of directors from different backgrounds with complementary skills and experience.
In recognition of the importance of independent views and the Board’s role in supervising the
activities of management the Chairman is a non-executive director.
2.6. Company Secretary
The appointment, performance, review, and where appropriate, the removal of the Company
Secretary is a key responsibility of the Board. All directors have access to the Company
Secretary who is accountable directly to the Board, through the Chairman, on all matters to
do with the proper functioning of the Board.
2.7. Avoidance of Conflicts of Interest by a Director
In order to ensure that any interests of a director in a particular matter to be considered by
the Board are known by each director, each director is required by the Company to disclose
any relationships, duties or interests held that may give rise to a potential conflict. Directors
are required to adhere strictly to constraints on their participation and voting in relation to any
matters in which they may have an interest.
Directors are able to access members of the management team at any time to request
relevant information. There are procedures in place, agreed by the board, to enable
directors, in furtherance of their duties, to seek independent professional advice at the
company’s expense.
2.8. Review of Board Performance
The performance of the board and each of its committees is reviewed at least annually by the
Chairman. Performance evaluations are conducted annually which involve an assessment of
each board member’s performance against specific and measurable qualitative and quantitative
performance criteria. The performance criteria against which directors and executives are
20
Annual Report 2017
Astron Corporation Limited
assessed is aligned with the financial and non-financial objectives of Astron. Directors whose
performance is consistently unsatisfactory may be asked to retire.
The performance of each committee is against the requirements of their respective charters.
3.
BOARD COMMITTEES
The Board has the ability under the Company’s constitution to delegate its powers and
responsibilities to committees of the Board.
3.1. Audit and Risk Committee
The Board does not have an Audit and Risk Committee and as such the Group is not in
compliance with Principle 4.1 of the ASX Corporate Governance Council. The Board
considers that the Group is not of a size, nor are its financial affairs of such complexity to
justify the formation of a separate audit and risk committee. The Board as a whole
undertakes the selection and proper application of accounting policies, the identification and
management of risk and the review of the operation of the internal control systems. The
Board considers that the experience and qualifications of the Board will assure the integrity
of the financial statements of the Group and the independence of the external auditor.
The Board ensures that the auditor is invited to attend all general meetings of shareholders.
The Board in lieu of an Audit and Risk Committee is responsible for:
3.1.1. reviewing the quality and integrity of the Group’s financial reporting to shareholders,
ASX and the Australian Securities and Investments Commission;
3.1.2. reviewing the accounting policies, internal controls, practices and disclosures to
assist the Board in making informed decisions, with direct access to management;
3.1.3. reviewing the scope and outcome of external audits, with direct access to external
auditors;
3.1.4. nominating external auditors and reviewing the adequacy of existing external audit
arrangements;
3.1.5. ensuring the independence of external auditors and reviewing any other services
provided by them;
3.1.6. reviewing the Group’s risk management systems; and
3.1.7. reporting on meetings and the results of any assessments and reviews.
External Auditor
The Company’s policy is to appoint external auditors who clearly demonstrate quality and
independence. The performance of the external auditor is reviewed annually, taking into
consideration assessment of performance, existing value and tender costs.
An analysis of fees paid to the external auditors, including a breakdown of fees for non-audit
services, is provided in the notes to the financial statements. It is the policy of the external
auditors to provide an annual declaration of their independence to the Board.
Internal Audit
The Company does not currently have a formal internal audit function however the Board
oversee the effectiveness of risk management and internal control.
The Board works closely with management to identify and manage operational, financial and
compliance risks which could prevent the Company from achieving its objectives. The Board
actively encourages the External Auditor to raise internal control issues, and oversees
management’s timely remediation thereof.
3.2. Remuneration and Nomination Committee
Given the present size of the Group, the existing Board is able to meet the needs of the
Group in the examination of selection and appointment practices without the establishment of
a nomination committee of the Board as recommended under Principle 2.1.
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Astron Corporation Limited
Remuneration
The remuneration received by directors and executives in the current period is contained in
the “Remuneration Report” section in the Directors’ Report of the Annual Report.
The Company seeks to attract and retain directors and executives with the appropriate
expertise and ability to create value for shareholders.
The remuneration structure for non-executive directors is not related to performance. The
Company aims to ensure non-executive directors receive fees which reflect their skills,
responsibilities and the time commitments required to discharge their duties. The Company
does not pay retirement benefits to non-executive directors (other than superannuation
contributions in accordance with its statutory superannuation obligations).
The remuneration structure for executive directors and other executives reflects the
Company’s financial resources and as such there is not currently a direct correlation between
the executive’s reward and individual and Company performance so as to seek to ensure
that the Company’s remuneration policy is aligned with its long term business objectives and
the interests of shareholders and other stakeholders.
Nomination
A profile of each director is included in the Directors’ Report of the Annual Report under the
heading “Directors”. The Company does not have a written agreement in place with each
director setting out the terms of their appointment. The committee and the Board consider
the composition of the Board at least annually, when assessing the Board’s performance and
when considering director election and re-election.
In considering whether the Board will support the election or re-election of incumbent directors,
the committee considers the skills, experience, expertise, diversity and contribution made to the
Board by the director and the contribution that the director is likely to make if elected or re-
elected.
When considering appointing new directors, the committee assesses the range of skills,
experience, expertise, diversity and other attributes from which the Board would benefit and to
the extent to which current directors possess such attributes. This assessment allows the
committee to provide the Board with a recommendation concerning the attributes for a new
director, such that they balance those of existing directors.
All material information that is relevant to the decision as to whether or not to elect or re-elect
a director is provided to shareholders in the explanatory notes accompanying the notice of
meeting for the Annual General Meeting at which the election or re-election is to be
considered.
4.
TIMELY AND BALANCED DISCLOSURE
4.1. Shareholder Communication
The Company believes that all shareholders should have equal and timely access to material
information about the Company including its financial situation, performance, ownership and
governance.
The Board aims to ensure that shareholders are informed of all material information relating
to the Company by communicating to shareholders through:
4.1.1. continuous disclosure reporting to the ASX;
4.1.2. its annual reports; and
4.1.3. media releases and other investor relations publications on the Company’s website.
The Company provides other information about itself and its governance via its website.
Two-way Communication
The Board is also mindful of the importance of not only providing information, but also
enabling two-way communication between the Company and its shareholders.
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Annual Report 2017
Astron Corporation Limited
The Company encourages direct electronic contact from shareholders – the Company’s
website has a “Contact Us” section which allows shareholders to submit questions or
comments.
The Company provides shareholder materials directly to shareholders through electronic
means. A shareholder may request a hard copy of the Company's annual report to be posted
to them. Shareholders may also communicate via electronic means with the Company’s
Share Registry and may register to access personal shareholding information and receive
electronic information.
General Meetings
Shareholders are encouraged to participate in general meetings. Copies of any addresses by
the Chairman or CEO are disclosed to the market and published on the Company’s website.
At the meeting the Chairman encourages questions and comments from shareholders and
seeks to ensure that shareholders are given ample opportunity to participate.
The Company’s external auditor does not attend the Company’s annual general meeting to
answer shareholder questions about the conduct of the audit, the preparation and content of
the audit report, the accounting policies adopted by the Company and the independence of
the auditor in relation to the conduct of the audit, however the Company will facilitate any
questions from shareholders about these matters.
4.2. Continuous Disclosure Policy
The Company is committed to ensuring that shareholders and the market are provided with full
and timely information and that all stakeholders have equal opportunities to receive externally
available information issued by the Company.
The Company’s “ASX Disclosure Policy” encourages effective communication with its
shareholders by requiring that Company announcements:
4.2.1. be factual and subject to internal vetting and authorisation before issue;
4.2.2. be made in a timely manner;
4.2.3. not omit material information;
4.2.4. be expressed in a clear and objective manner to allow investors to assess the
impact of the information when making investment decisions;
4.2.5. be in compliance with ASX Listing Rules continuous disclosure requirements; and
4.2.6. be placed on the Company’s website following release.
The Company’s “ASX Disclosure Policy” reinforces the Company’s commitment to
continuous disclosure and outline management’s accountabilities and the processes to be
followed for ensuring compliance.
The policy also contains guidelines on information that may be price sensitive. The Company
Secretary has been nominated as the person responsible for communications with the ASX.
This role includes responsibility for ensuring compliance with the continuous disclosure
requirements with the ASX Listing Rules and overseeing and coordinating information
disclosure to the ASX.
5.
RECOGNISING AND MANAGING RISK
5.1. Board responsibility for risk management
The Board is responsible for ensuring there are adequate policies in relation to risk
management, compliance and internal control systems. The Company’s policies are designed
to ensure strategic, operational, legal, reputation and financial risks are identified, assessed,
effectively and efficiently managed and monitored to enable achievement of the Company’s
business objectives. Considerable importance is placed on maintaining a strong control
environment.
The Company has exposure to the following risks:
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Annual Report 2017
Astron Corporation Limited
5.1.1. Funding: the Company is subject to the risks in relation to funding its projects. The
Board will continue to monitor these rissks.
5.1.2. Currency: The Company is exposed to fluctuations in the Australian dollar which can
impact on expenditures related to project development and potentially future
operations. Due to the size and assets of the Company the Board has not instigated
a hedging program. The Board will continue to review the implementation of hedging
at each Board meeting to ensure it fits within the Company’s hedging policy
framework and is deemed appropriate.
5.1.3. Environmental: The Company is subject to, and responsible for existing
environmental liabilities associated with its tenements as well as potential new
liabilities through future mining activities. The Company will continually monitor its
ongoing environmental obligations and risks, and implement rehabilitation and
corrective actions as appropriate to remain compliant. These risks may be impacted
by change in Government policy.
5.1.4. Market Risk: The Company seeks to reduce investment risk by regularly monitoring
the market and considering at each Board meeting the ongoing benefits of carrying
investments or disposal. There are inherent uncertainty risks in the mineral sands
market, noting the difficult market conditions over recent years.
5.2. Board Oversight of the Risk Management System
The Board is responsible for approving and overseeing the risk management system. The
Board reviews, at least annually, the effectiveness of the implementation of the risk
management controls and procedures.
The principle aim of the system of internal control is the management of business risks, with
a view to enhancing the value of shareholders' investments and safeguarding assets.
Although no system of internal control can provide absolute assurance that the business
risks will be fully mitigated, the internal control systems have been designed to meet the
Company's specific needs and the risks to which it is exposed.
Annually, the Board is responsible for identifying the risks facing the Company, assessing the
risks and ensuring that there are controls for these risks, which are to be designed to ensure
that any identified risk is reduced to an acceptable level.
Internal control measures currently adopted by the Board include:
5.2.1. regular reporting to the Board in respect of operations and the Company’s financial
position; and
5.2.2. regular reports to the Board by appropriate members of the management team
outlining the nature of particular risks and highlighting measures which are either in
place or can be adopted to manage or mitigate those risks.
5.3. Risk Management Roles and Responsibilities
The Board is responsible for approving and reviewing the Company’s risk management
strategy and policy. Senior management is responsible for implementing the Board approved
risk management strategy and developing policies, controls, processes and procedures to
identify and manage risks in all of the Company’s activities.
The Board in place of the Audit and Risk Committee is responsible for ensuring that
management has developed and implemented a sound system of risk management and
internal control.
6.
ETHICAL AND RESPONSIBLE DECISION MAKING
6.1. Code of Ethics and Conduct
The Board endeavours to ensure that the directors, officers and employees of the Company
act with integrity and observe the highest standards of behaviour and business ethics in
relation to their corporate activities. The “Code of Conduct” sets out the principles, practices,
and standards of personal behaviour the Company expects people to adopt in their daily
24
Annual Report 2017
Astron Corporation Limited
business activities.
All directors, officers and employees are required to comply with the Code of Conduct.
Senior managers are expected to ensure that employees, contractors, consultants, agents
and partners under their supervision are aware of the Company’s expectations as set out in
the Code of Conduct.
All directors, officers and employees are expected to:
6.1.1. comply with the law;
6.1.2. act in the best interests of the Company;
6.1.3. be responsible and accountable for their actions; and
6.1.4. observe the ethical principles of fairness, honesty and truthfulness, including prompt
disclosure of potential conflicts.
6.2. Policy Concerning Trading in Company Securities
Effective 1 January 2011, the Board implemented a Share Trading Policy that applies to all
directors, officers and employees. This policy sets out the restrictions on dealing in securities
by people who work for, or are associated with the Company and is intended to assist in
maintaining market confidence in the integrity of dealings in the Company’s securities. The
policy stipulates that the only appropriate time for a director, officer or employee to deal in the
Company’s securities is when they are not in possession of price sensitive information that is
not generally available to the market.
As a matter of practice, Company shares may only be dealt with by directors and officers of
the Company under the following guidelines:
6.2.1. no trading is permitted in the period of one month prior to the announcement to the
ASX of the Company's quarterly, half year and full year results;
6.2.2. guidelines are to be considered complementary to and not replace the various
sections of the Corporations Act 2001 dealing with insider trading; and
6.2.3. prior approval of the Chairman, or in his absence, the approval of two directors is
required prior to any trading being undertaken.
6.2.4. Senior management are prohibited from entering into transactions which limit the
risk of participating in unvested entitlements under any equity-based remuneration
scheme.
6.3. Policy Concerning Diversity
The Company encourages diversity in employment throughout the Company and in the
composition of the Board, as a mechanism to ensure that the Company is able to draw on a
variety of skill, talent and previous experiences in order to maximise the Company’s
performance.
The Company’s “Diversity Policy” has been implemented to ensure the Company has the
benefit of a diverse range of employees with different skills, experience, age, gender, race
and cultural backgrounds. The Company reports its results on an annual basis in the Annual
Report in achieving measurable targets which are set by the Board as part of implementation
of the Diversity Policy.
The Company notes that out of two (2) Executive Directors, one (1) is female. In relation to
senior executive positions, out of seven (7) two (2) are female. Out of the total of 62
employees, 19 are female.
Astron is not a “relevant employer” under the Workplace Gender Equality Act. The table
below outlines the diversity objectives established by the Board, the steps taken during the
year to achieve these objectives, and the outcomes.
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Annual Report 2017
Astron Corporation Limited
Objectives
Increase the number of
women in the workforce,
including management and
at board level.
Steps Taken/Outcome
Out of two (2) Executive Directors, one (1) is female. In
relation to senior executive positions, out of seven (7), two (2)
are female. Out of the total of 62 employees, 19 are female.
Review gender pay gaps
on an annual basis and
implement actions to
address any variances.
As a part of the annual remuneration review, the Board
assesses the performance and salaries of all key
management personnel and executive directors. Any gender
pay disparities are addressed.
Provide flexible workplace
arrangements.
During the year Astron employed 3 employees on flexible work
arrangements (2017: 7).
Provide career
development opportunities
for every employee,
irrespective of any cultural,
gender and other
differences.
Promote an inclusive culture
that treats the workforce with
fairness and respect.
Be compliant with all
mandatory diversity reporting
requirements.
While Astron places special focus on gender diversity, career
development opportunities are equal for all employees.
Employees are encouraged to attend professional development
courses/workshops throughout the year.
Astron has set a zero tolerance policy against discrimination of
employees at all levels. The Company provides avenues to
employees to voice their concerns or report any discrimination.
No cases of discrimination were reported during the year
(2015: Nil).
Astron is not a “relevant employer” under the Australian
Workplace Gender Equality Act 2012.
26
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
The Directors of Astron Corporation Limited (the ‘Company’) present their report on the consolidated entity
(‘Group’ or ‘Astron’), consisting of Astron Corporation Limited and the entities it controlled at the end of, and
during, the financial year ended 30 June 2017.
Directors
The following persons were Directors of Astron Corporation Limited for part of the financial year and up to the
date of this report:
Names
Mr. Gerard King
Mr. Alexander Brown
Mdm. Kang Rong
Principal Activities
The principal activities of the Group during the financial year were:
- Exploration, evaluation and progress of the feasibility assessment of the Donald mineral sands mining
and processing project (“DMS”)
- Evaluation and progress of the feasibility of the Senegal Niafarang mineral sands mining processing
project (“Senegal”)
- Evaluation and advancement of downstream applications for zircon and titanium
- Titanium based materials trading
There have been no significant changes in the nature of the Group's principal activities during the financial
year.
Significant Changes to Group Structure
There have been no significant changes to the Astron group structure in the financial year ending 30 June 2017.
Financial Position
The net assets of the Group have decreased to $102,658,339 a decrease of $3,065,613 from 2016.
The net assets have been affected by:
-
-
-
-
Foreign exchange impact on foreign controlled assets of $1,552,672
Net loss for the year of $2,590,844
Income tax refunds from the 2016 year due to a research and development tax incentive of $727,895
Legal fees associated with the Gambian litigation $134,987
Dividends
No final dividend was proposed for the year ended 30 June 2017 (2016: Nil).
1
27
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
Review of Operations
Financials
Consolidated Statement of Profit or Loss and other Comprehensive Income
•
Total income and other income comprising sales, interest received and other income increased from the
prior year by 231% to $2,555,312. This was due to the increase trading in the Chinese markets over the
prior year.
• Gross margins from the trading business improved in line with the market conditions in Chinese mineral
sands markets.
•
Administration expenditure was broadly consistent with the prior year due to the ongoing expenditure
rationalisation.
• Costs associated with Gambia litigation comprise legal fees and associated advisors’ costs.
Consolidated Statement of Financial Position
•
•
•
•
•
The increase in inventories reflects the strengthening of the mineral sands markets in China and Astron’s
ongoing sales program which is anticipated to increase significantly during the 2018 financial year.
Available for sale financial assets comprise shares in Saison Steel, Trek Metals and Greenpower Energy.
The combined market value of these investments has increased by $164,798 to $217,293. During the year
an investment in Altona Mining was sold, reducing the 2016 carrying value by $487,742. The market
movement has been debited to the financial assets available-for-sale reserve in the statement of financial
position.
The increase in intangible assets arises from further exploration expenditure capitalised in respect of the
Donald Mineral Sands and Senegal Niafarang projects.
Land use rights comprise 50-year land use leases. These leases are capitalised and amortised over the
50-year period. The decrease in the carrying value to $3,010,784 over the 30 June 2016 value is
attributable to foreign exchange movement after accounting for leasehold amortisation.
The decrease in the net asset value from 29.9 cps at 30 June 2016 to 24.4 cps at 30 June 2017 primarily
relates to the group loss for the year and foreign exchange movements on assets held outside Australia.
Operations review
Donald
The development of the Donald project (“DMS”) continued during the year. Progress was made in the following
areas:
Engineering
Conceptual engineering and design was completed in early 2017 to allow for a feasibility level tendering process
to be carried out. The mapping, budgeting and operational assessments were completed.
Detailed mine planning including tailing plan and mapping was completed for the feasibility level.
2
28
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
Execution strategy
The execution strategy for the project will involve a standalone design contract for the Australian processing
plant, reflecting a modular plant construction and assembly through a Chinese fabrication yard. The module
assembly, and all wraparound construction will be conducted under several local construction contracts, and
managed by a single integrated owners team.
Approvals
A summary of the status of relevant approvals is as follows:
Status
Approval type
Environment or Effects Statement (ESS) Approved
Approved
Mining licence
Approved
Cultural Heritage Management plan
Secured
Water rights
Approved
Radiation licence
Approved
Export permit
Submitted
Work plan test pit
Approved
Work Authority test pit
Project Infrastructure
Date
2008
August 2010
January 2014
2012
December 2014
December 2016
March 2017
August 2017
It is estimated that 13km of local road upgrades will be required, together with 11km for the installation of
designated water supply to the project site. Wherever possible, funding assistance has been considered from
state and regional departments.
Detailed Engineering has been undertaken for site access roadways and Minyip township heavy vehicle bypass
routes were completed in Q3 2016. These designs were completed with review and approval from state
regulators and relevant stakeholders.
Power Systems are proposed to be by way of gas / diesel powered generation system, for which compatibility
and suitability assessments were completed in Q4 2016. The specific nature of the site with a modulated plant
design supports localised generation systems. The ability to install additional generator banks as needed
supports the project with the ability to increase production physicals as necessary.
In relation to the water pipeline, hydraulic assessments and pipeline engineering designs were completed in Q3
2016. The piping system design catered for full scale operations with capacities for future expansions.
Discussions with public, private, partnership (PPP) groups have commenced. With integration, supply and
network load sheading from the local pipeline network has the potential for localised network infrastructure to
potentially provide the project commencement water supply demand.
Separation test work on China floatation and product trials for customers
Bulk sample approval was received post year end. The bulk sample is anticipated to provide 3,000t of ore
material for testing of floatation mineral separation methods at the Chinese Mining Institute, with a third party toll
processor and product trials for customers.
3
29
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
Risk assessment
Risk assessments have been conducted at various stages, and major risks have been ranked and prioritized.
The most significant technical risks are associated with site water and tailings management, and operational
logistics of large mining equipment inside the pit. Test work has been conducted to quantify these risks and
management plans have been put in place to address them. These risks have been logged as part of the
Victorian WorkPlan process. Additional risks will be associated with ensuring that long-lead items are expedited,
and that module assembly is completed on schedule and to an acceptable level of quality. These risks will all be
specifically managed with specific management plans and designated hires into the project team.
Funding
Astron continues to work with interested parties to fund this project. Astron and CMEC have extended their
current EPC Contract to 1 December 2017.
Environmental
Data collection and surveys commenced with consultancy groups to populate the mine site Work Plan permit for
Noise, Air Quality and Dust, Native Vegetation, Sensitive receptors and Radiation.
Work plan
The work plan has been submitted.
Community Engagement
DMS representatives have attended courses and workshops in Melbourne and Bendigo to compliment DMS
ability to develop and execute DMS’ community engagement plan which required certification, which has now
been received.
China operations
Work in China continued to test and develop technology to be applied for downstream advancement of Group
minerals.
Mineral sales increased as the Zircon market demand continues to improve.
Senegal
Mining licence
The Mining Licence was awarded in June 2017.
Environmental Approval
Conceptual workshops in Senegal and China have produced clear transportation and logistics plans to be
included in the amended environmental approval.
Detailed Mine Design
MinxCon from South Africa commenced detailed mine design in mid-August 2017.
4
30
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
Community Engagement and Resettlement
Meetings and collaboration have been undertaken with local and state representatives for the implementation of
the re-settlement plan of the local isolated communities situated within the mining licence lease area.
Procurement
Review, design and procurement of equipment and consumables commenced in July 2017.
Resources have been sourced in Dakar including office space, accounting support, commercial legal support
and transport during July and August 2017. Logistics and operational processes work is ongoing with
Contractual agreements set for execution in September 2017. Once complete it is anticipated that the assets will
be transferred from Exploration and Evaluation to Mining and Development assets.
America
Astron continues to seek mineral sands opportunities in the USA for processing and sale in China.
Significant Changes in State of Affairs
There have been no significant changes in the Group's state of affairs during the financial year.
Matters Subsequent to the end of the Financial Year
As at 30 June 2017 $10,050,196 is due to the Group from the 2015 sale of surplus land in China. Subsequent
to year end, $1.7 million has been received against this receivable. Approximately $3.8 million has been
received pursuant to pre-payment for the future supply of materials under an offtake agreement to fund the
development of the Senegal mine.
In September 2017, Astron incorporated a new Senegalese entity “Senegal Mineral Resources” for the Senegal
project with a 3% non controlling interest.
There are no other matters or circumstances that have arisen since the end of the financial year which
significantly affected or may significantly affect the operations of the Group, the results of those operations or
the state of affairs of the Group in future financial years.
Likely Developments
The Group continues to explore funding options for the Donald Mineral Sands project. During the next financial
year the Group expects to:
-
-
-
-
-
Commission and receive first offtake from the Senegal project;
Complete the test pit and bulk sample from the Donald project mine area;
Finalise testing and feasibility of the Donald project;
Complete the funding process for Donald project; and
Finalise approvals for the commencement of the construction of Donald project
Work continues on the Donald project technical optimisation, including further work on mining method
refinement, tailing treatment majorization, processing flow process, updating and comparing logistics options.
As the Senegalese Niafarang project commences production, the Group will have an additional revenue source,
which will have an immediate impact on the financial position of the Group. The Group’s business strategies
continue to be based on being a high-quality producer of zircon and titanium (together with associated products)
focused on sales and marketing activities in China.
5
31
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
Environmental Regulation
The Group's operations are in China, Senegal and Australia. In Australia, our Environmental Effects Statement
for the Donald mine has been approved. The Group complied with all environmental regulations in relation to
mining operations and there were no reportable environmental matters from the Australian operations.
Once these projects have been developed the Group will if applicable apply the National Greenhouse and
Energy Reporting Act of 2007.
In China, the Group continues to work closely with the local authorities to ensure high standards are maintained.
In relation to the proposed manufacturing processes in China, there were no exceptions noted by regular local
government environmental testing and supervision. Further the development projects will be implemented with
best practice standards carefully monitored by the local authorities.
To the best of the Directors' knowledge, the Group has adequate systems in place to ensure compliance with
the requirements of all environmental legislation described above and are not aware of any breach of those
requirements during the financial year and up to the date of the Directors' report.
Occupational Health and Safety
During the year there were no lost time injuries.
Director Information
Mr. Gerard King
Chairman (Non-executive)
Qualifications
Experience
LLB
- Board Member since 6 December 2011 (Astron Limited: 5
November 1985)
- Former partner of law firm Phillips Fox and has had over 30
years of experience
in corporate and business advising
including acting as a Director of a number of Australian Public
Companies
Interest in Shares #
49,038 Ordinary shares
Special Responsibilities
Mr. King is the Chairman of the Audit & Risk Committee and the
Chairman of the Remuneration & Nomination Committee
Directorships held in other listed
entities
Mr. King is a Director of Greenpower Energy Limited (appointed 4
November 1985) which was listed on 5 March 2008.
6
32
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
Mr. Alexander Brown
President (Executive)
Qualifications
Experience
B AgSc
- Board Member since 6 December 2011 (Astron Limited: 4
February 1988)
- Wide commercial experience of over 30 years in construction,
mining and exploration including developing the Horseshoe
Lights Gold Mine at Meekathara W.A., expanding the Gunnedah
Coal Mine, in NSW, and successfully drilling for oil and gas in
Thailand and USA.
- Mr Brown also started with others a major advanced plastics
pipe company Europipe Sdn Bhd in Malaysia in 1987 which
manufactured and distributed its products throughout Asia and
Australasia. In the last 20+ years his activities have focused in
building the Astron business in China.
Interest in Shares #
94,183,124 Ordinary shares
Special Responsibilities
Mr. Brown is the President and responsible for the operations of the
Group
Directorships held in other listed
entities
Mr. Brown is not currently a Director of another listed company.
Mdm Kang Rong
Chief Operating Officer and Deputy Managing Director (Executive)
Qualifications
Experience
B.E.(Chem)
- Board member since 31 January 2012 (Astron Limited: 21
August 2006)
- Mdm Kang Rong worked as a Chemical Production Engineer at
Shenyang Chemical Company (a major Chinese company
based in Shenyang (Liaoning Province). She then moved to
Hainan Island China and worked in sales and administration for
the Japanese trading co. Nissei, Ltd.
- She joined Astron in 1995 as marketing manager of Shenyang
Astron Mining Industry. Since then she has overseen Astron’s
China operations and global sales and has been largely
responsible for the growth and development of the Company.
Interest in Shares #
4,000,000 Ordinary Shares
Special Responsibilities
As Chief Operating Officer and Deputy Managing Director is in
charge of all Astron’s operations
Directorships held in other listed
entities
Mdm Kang Rong is not currently a Director of another listed
company.
# Interest in Shares includes directly, indirectly, beneficially or potentially beneficially held shares.
7
33
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
Meetings of Directors
During the financial year, two meetings of Directors (excluding committees of Directors) were held for Astron
Corporation Limited. Attendances by each Director at Directors’ meeting, audit and risk committee and
remuneration and nominating committee meetings during the year were as follows:
Astron Corporation Limited
Mr. Gerard King
Mr. Alexander Brown
Mdm Kang Rong
Share Options
Directors' Meetings
Number
Number
attended
eligible to
attend
2
2
2
2
2
2
No options over issued shares or interests in the Group or a controlled entity were granted during or since the
end of the financial year and there were no options outstanding at the date of this report.
Remuneration Report
Policy for determining the nature and amount of Key Management Personnel (KMP) remuneration
The remuneration policy of the Group has been designed to align Director and executive objectives with
shareholder and business objectives by providing a fixed remuneration component and offering potential
long-term incentives based on key performance areas affecting the Group's financial results. The board of
Astron Corporation Limited believes the remuneration policy to be appropriate and effective in its ability to
attract and retain the best executives and Directors to run and manage the Group, as well as create goal
congruence between Directors, executives and shareholders.
The board's policy for determining the nature and amount or remuneration for the board members and
senior executives of the Group is as follows:
•
•
•
The remuneration policy for the executive Directors and other senior executives was developed by the
remuneration committee and approved by the board after seeking professional advice from an
independent external consultant.
All executives receive a market related base salary (which is based on factors such as length of service
and experience), other statutory benefits and potential performance incentives.
The remuneration committee reviews executive packages annually by reference to the Group’s
performance, executive performance and comparable information from industry sectors.
The performance of executives is measured against criteria agreed with each executive and is based
predominantly on the forecast growth of the Group’s profits and shareholders’ value. All bonuses and
incentives are linked to the performance of the individual and are discretionary. The objective is designed to
attract the highest caliber of executives and reward them for performance that results in long term growth in
shareholder wealth.
8
34
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
At the discretion of the Committee from time to time shares are issued to executives to reflect their
achievements. There are presently no option based schemes in place.
Where applicable executive Directors and executives receive a superannuation guarantee contribution
required by the government, which is currently 9.5%, and do not receive any other retirement benefits.
Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards
superannuation.
If shares are given to Directors and/or executives, these shares are issued at the market price of those
shares.
The board policy is to remunerate non-executive Directors at market rates for time, commitment and
responsibilities. The Board determines payments to the non-executive Directors and reviews their
remuneration annually, based on market practice, 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 subject to approval by shareholders at the Annual General Meeting. Fees for non-executive Directors are
not linked to the performance of the Group. However, to align Director's interests with shareholder interests,
the Directors are encouraged to hold shares in the Group.
Performance based remuneration
As part of each executive Director and executive’s remuneration package there is a discretionary bonus
element. The intention of this program is to facilitate goal congruence between Directors/executives with
that of the business and shareholders.
In determining whether or not each executive Director and executive's bonus is due, the remuneration
committee bases the assessment on audited figures and independent reports where appropriate.
The remuneration committee reserves the right to award bonuses where performance expectation has
prima facie not been met but it is considered in the interests of the Group to continue to reward that
individual.
There were no bonuses paid during the year to KMP’s. Current bonus arrangements entered into with the
KMP:
Executive
Tim Chase
Amount of bonus
$20,000
Other KMPs are entitled to the annual bonus program of the Group, which will be based on the performance
of the group and at the discretion of the Board. The terms of the bonus program are in the process of being
defined.
Company performance, shareholder wealth and directors and executive’s remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders and
Directors and executives. This has been achieved by awarding discretionary bonuses to encourage the
alignment of personal and shareholder interests. The Group believes this policy to have been effective in
increasing shareholder wealth and the Group's consolidated statement of financial position over the past
five years.
The following table shows the gross revenue, profits and dividends for the last five years for the listed entity,
as well as the share price at the end of the respective financial years.
9
35
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
Income (‘000)
Net Profit/(Loss) (‘000)
Share Price at Year-end
Dividends Paid (‘000)
2013
$
12,970
(5,466)
0.71
-
2014
$
5,148
(7,583)
0.32
-
2015
$
11,739
7,989
0.15
-
2016
$
1,106
(4,408)
0.17
-
2017
$
2,555
(2,591)
0.16
-
In 2012 Astron implemented a 2 for 1 share split and in 2015 Astron returned 75 cents per share to
shareholders. Income for 2015 includes $11,081,124 being the gain on sale of leasehold land in China.
Key Management Personnel
The following persons were key management personnel (KMP) of the Group during the financial year:
Mr. Gerard King
Mr. Alexander Brown
Mdm Kang Rong
Mr. Tim Chase
Mr. Joshua Theunissen
Position Held
Chairman-Non-executive
President
Chief Operating Officer and Deputy Managing Director (Executive)
Project Executive – Donald
Australian Company Secretary
Shareholdings
Details of equity instruments (other than options and rights) held directly, indirectly, beneficially or
potentially beneficially by key management personnel and their related parties are as follows:
30 June 2017
Key Management Personnel
Mr. Gerard King
Mr. Alexander Brown
Mdm Kang Rong
Mr. Tim Chase
Mr. Joshua Theunissen
Total
Balance
1/07/2016
Shares (sold)
/purchased
Balance
30/06/2017
49,038
94,183,124
4,000,000
-
100
98,232,262
-
-
-
-
-
-
49,038
94,183,124
4,000,000
-
100
98,232,262
10
36
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
Details of Remuneration
Details of compensation by key management personnel of Astron Corporation Limited Group are set out
below:
Year ended 30 June 2017
Directors
Mr. Gerard King
Mr. Alexander Brown (#1)
Mdm Kang Rong (#1)
Other key management
personnel
Mr. Tim Chase
Mr. Joshua Theunissen (#1)
Short term benefits
Post-
employment
benefits
Cash, fees
salary &
commissions
$
Non-cash
Benefits/
Other
$
Termination
Payments
$
Superannuation
$
Total
$
% of
remuneration
that is
performance
based
109,589
250,000
250,000
218,264
67,575
895,428
-
-
-
22,559
-
22,559
-
-
-
-
-
-
10,411
-
-
120,000
250,000
250,000
20,735
261,558
-
67,575
31,146
949,133
0%
0%
0%
7%
0%
Note reference #:
1.
Paid or payable to management company
Use of Remuneration Consultants
The Board have previously employed external consultants to review and to provide recommendations in
respect of the amount and elements of executive remuneration, including short-term and long-term incentive
plan design.
No remuneration consultants were employed during the year.
Termination Payment
No termination payments were paid during the year to Key Management Personnel.
Share Based Payments
During the year a share based payment related to achievement of milestones with respect to the Senegal project
was recognised totalling $913,104, representing 3% of a calculation of the Senegal projects fair value. This cost
was capitalised into the Senegal project asset. No share based payments were made during the year ended 30
June 2016.
Voting and comments at the Company’s 2016 Annual General Meeting
The Company received 97.3% of “yes” votes on its remuneration report for the 2016 financial year.
The Company did not receive any specific feedback at the AGM on its remuneration report.
11
37
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
Year ended 30 June 2016
Short term benefits
Cash, fees
salary &
commissions
$
Non-cash
Benefits/
Other
$
Post-
employment
benefits
Superannuation
$
Termination
$
Total
$
% of
remuneration that
is performance
based
109,589
250,000
250,000
146,161
168,333
55,636
979,719
-
-
-
58,657
20,640
-
79,297
10,411
-
-
-
15,992
-
-
-
-
120,000
250,000
250,000
42,281
-
-
247,099
204,965
55,636
26,403
42,281
1,127,700
0%
0%
0%
0%
0%
0%
Directors
Mr. Gerard King
Mr. Alexander Brown (#1)
Mdm Kang Rong (#1)
Other key management
personnel
Mr. Mark Coetzee (#2)
Mr. Tim Chase
Mr. Joshua Theunissen
(#1)
Note reference #:
1.
2.
Paid or payable to management company
Resigned 31 January 2016 and was paid 2 months’ pay in lieu of notice
None of the above payments were performance related.
Service Contracts
Service contracts (or letters of engagement) have been entered into by the Group, or are in the process of
being entered into, with all key management personnel and executives, describing the components and
than
amounts of remuneration applicable on
non-executives who have long established understanding of arrangements with the Group. These
contracts do not fix the amount of remuneration increases from year to year. Remuneration levels are
reviewed generally each year by the Remuneration Committee to align with changes in job responsibilities
and market salary expectations. There is an arrangement with respect to the services of the Managing
Director, Alexander Brown, provided by a management company on an annual service agreement, the
period of notice required to terminate this contract is twelve months. Other than repayment of loans and
management fees there is no further payment required to terminate this contract.
initial appointment,
terms, other
including
their
Other key management personnel have ongoing contracts with a notice period of three months for key
management personnel. There are no non-standard termination clauses in any of these contracts.
The Remuneration Committee considers the appropriate remuneration requirements. In August 2012, the
Group engaged external consultants to review the Group’s salary and incentive benchmarks. No
consultants were engaged to review Group remunerations during the year ended 30 June 2017.
END OF REMUNERATION REPORT
12
38
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
Indemnifying Officers or Auditors
Insurance premiums paid for Directors
During the year Astron Limited paid a premium of $26,059 (2016: $43,246) in respect of a contract insuring
Directors, secretaries and executive officers of the company and its controlled entities against a liability
incurred as Director, secretary or executive officer. The contract of insurance prohibits disclosure of the
nature of the cover.
The company has not otherwise, during or since the end of the financial year, except to the extent
permitted by law, indemnified or agreed to indemnify an officer or auditor of the company or any of its
controlled entities against a liability incurred as such an officer or auditor.
Non-audit services
During the financial year, the following fees for non-audit services were paid or payable to the auditor,
Grant Thornton, or their related practices:
Other Services
Taxation services
Other assurance services
2017
$
7,500
-
2016
$
8,840
14,500
The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by
another person or firm on behalf of the auditor), is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001.
The Directors are satisfied that the provision of non-audit services by the auditor, as set out above, did not
compromise the auditor independence requirements of the International Accounting and Ethics Standards
Board (IASEB) for the following reasons:
•
•
all non-audit services have been reviewed by the Board to ensure that they do not impact the integrity
and objectivity of the auditor; and
none of the non-audit services undermine the general principles relating to auditor independence as
set out by the IASEB.
Auditors’ Independence Declaration
The lead auditors’ independence declaration for the year ended 30 June 2017 has been received and can
be found on page 15 of the financial report.
Directors’ declaration regarding IFRS compliance statement
The Directors’ declare that these annual financial statements have been prepared in compliance with
International Financial Reporting Standards.
13
39
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2017
Proceedings on Behalf of Company
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 part of those proceedings.
Signed in accordance with a resolution of Directors:
Mr. Alex Brown
Dated this 29 September 2017
Gerard King
14
40
Level 17, 383 Kent Street
Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration to the Directors of Astron
Corporation Limited
As lead auditor for the audit of Astron Corporation Limited for the year ended 30 June 2017, I
declare that, to the best of my knowledge and belief, there have been no contraventions of the
auditor independence requirements of the International Accounting and Ethics Standards Board
(IAESB).
Grant Thornton Audit Pty Ltd
Chartered Accountants
L M Worsley
Partner - Audit & Assurance
Sydney, 29 September 2017
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.
15
4141
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For The Year Ended 30 June 2017
Sales revenue
Cost of sales
Gross profit
Interest income
Other income
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Write back/(down) of inventories
Costs associated with Gambian litigation
Finance costs
Other expenses
Loss before income tax expense
Income tax benefit
Net loss for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Increase/(Decrease) in fair value of available-for-sale financial assets (tax: nil)
Decrease in foreign currency translation reserve (tax: nil)
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Loss for the year attributable to:
Owners of Astron Corporation Limited
Total comprehensive income for the year attributable to:
Note
5
5
5
6
6
6
7
Consolidated
2017
$
1,899,763
2016
$
467,999
(1,534,332)
(434,218)
365,431
135,943
519,606
(33,089)
(8,490)
(6,761)
33,781
56,929
581,485
(9,085)
(10,145)
(9,351)
(4,803,470)
(4,463,156)
327,753
(134,987)
(8,379)
(362,975)
(171,077)
(946,786)
(10,766)
(56,008)
(4,009,418)
(5,004,179)
1,418,574
595,983
(2,590,844)
(4,408,196)
164,799
(151,973)
(1,552,672)
(2,141,279)
(1,387,873)
(2,293,252)
(3,978,717)
(6,701,448)
(2,590,844)
(4,408,196)
Owners of Astron Corporation Limited
(3,978,717)
(6,701,448)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
16
42
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Profit or Loss and Other Comprehensive Income (cont)
For The Year Ended 30 June 2017
EARNINGS/(LOSS) PER SHARE
For profit/(loss) for the year
Basic (loss)/earnings per share (cents per share)
Diluted (loss)/earnings per share (cents per share)
Consolidated
2017
Cents
2016
Cents
Note
8
(2.12)
(2.12)
(3.60)
(3.60)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
17
43
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Financial Position
For The Year Ended 30 June 2017
ASSETS
Current assets
Cash and cash equivalents
Term deposits greater than 90-days
Trade and other receivables
Inventories
Available-for-sale financial assets
Current tax assets
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Intangible assets
Land use rights
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Long-term provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Note
10
10(c)
11
12
14
22(iii)
11
16
17
18
19
20
21
22
21
Consolidated
2017
$
2016
$
1,317,231
5,104,594
60,898
60,685
6,087,761
14,143,379
1,888,353
217,293
-
730,564
540,237
460,380
9,571,536
21,039,839
6,396,921
-
19,953,921
21,046,191
73,650,786
69,118,158
3,010,784
3,255,981
103,012,412
93,420,330
112,583,948
114,460,169
5,362,641
3,548,955
76,080
58,088
-
67,783
5,496,809
3,616,738
4,388,800
5,079,479
40,000
40,000
4,428,800
5,119,479
9,925,609
8,736,217
102,658,339
105,723,952
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
18
44
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Financial Position (continued)
For The Year Ended 30 June 2017
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL EQUITY
Note
23
24
Consolidated
2017
$
2016
$
1,605,048
1,605,048
9,748,060
11,061,760
91,305,231
93,057,144
102,658,339
105,723,952
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
19
45
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Changes in Equity
For The Year Ended 30 June 2017
Issued
Capital
Retained
Earnings
Year Ended 30 June 2017
$
$
Financial
Assets
Available
For Sale
Reserve
$
1,605,048
93,057,144
709,332
Share
Based
Payment
Reserve
Foreign
Currency
Translation
Reserve
Total Equity
$
-
-
-
-
-
$
$
10,352,428
105,723,952
-
-
(2,590,844)
164,799
(1,552,672)
(1,552,672)
(1,552,672)
(3,978,717)
(2,590,844)
-
838,931
(674,132)
-
-
(1,751,913)
(674,132)
-
-
-
-
913,104
913,104
-
-
913,104
913,104
1,605,048
91,305,231
35,200
913,104
8,799,756
102,658,339
Equity as at 1 July 2016
Loss for the year
Other comprehensive income
Decrease in fair value of
available-for-sale financial
assets
Exchange differences on
translation of foreign operations
Total comprehensive income
for the year
Transactions with owners in
their capacity as owners
Share based payments
Total of transactions with
owners in their capacity as
owners
Equity as at 30 June 2017
-
-
-
-
-
-
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
20
46
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Changes in Equity (cont)
For The Year Ended 30 June 2017
Issued
Capital
Retained
Earnings
Year Ended 30 June 2016
$
$
Financial
Assets
Available
For Sale
Reserve
$
Foreign
Currency
Translation
Reserve
Total Equity
$
$
Equity as at 1 July 2015
Loss for the year
Other comprehensive income
Increase in fair value of
available-for-sale financial assets
Exchange differences on
translation of foreign operations
Total comprehensive income for
the year
Transactions with owners in
their capacity as owners
Return of capital
Total of transactions with
owners in their capacity as
owners
Equity as at 30 June 2016
1,605,048
97,465,340
861,305
12,493,707
112,425,400
(4,408,196)
-
-
-
-
-
-
-
-
-
(4,408,196)
(151,973)
(151,973)
-
-
-
(2,141,279)
(2,141,279)
(4,408,196)
(151,973)
(2,141,279)
(6,701,448)
-
-
-
-
-
-
-
-
1,605,048
93,057,144
709,332
10,352,428
105,723,952
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
21
47
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Cash Flows
For The Year Ended 30 June 2017
Cash flows from operating activities:
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Income taxes received
Note
Consolidated
2017
$
2016
$
2,108,483
847,259
(6,711,309)
(4,506,639)
135,943
(8,304)
58,125
(10,767)
1,176,996
1,093,983
Net cash outflow from operating activities
28i
(3,298,191)
(2,518,039)
Cash flows from investing activities:
(Investment)/Receipt in short term deposits
Receipts from disposal of investments
Receipts from disposal of land receivable
Acquisition of property, plant and equipment
Capitalised exploration and evaluation expenditure
Net cash inflow from investing activities
Cash flows from financing activities:
Receipt/(Repayment) of borrowings
Net cash (outflow)/ inflow from financing activities
Net (decrease)/increase in cash held
Cash and cash equivalents at beginning of the year
Net foreign exchange differences
(213)
466,602
(360)
223,817
1,873,007
7,033,747
(253,985)
(151,499)
(2,079,970)
(3,828,923)
5,441
3,276,782
76,080
(1,000,000)
76,080
(1,000,000)
(3,216,670)
(241,257)
5,104,594
5,796,027
(570,693)
(450,176)
Cash and cash equivalents at end of the year
28ii
1,317,231
5,104,594
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
22
48
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
1. Corporate Information
The consolidated financial statements of Astron Corporation Limited for the year ended 30 June 2017
were authorised for issue in accordance with a resolution of the Directors on 29 September 2017 and
relate to the consolidated entity consisting of Astron Corporation Limited and its subsidiaries. Separate
financial statements for Astron Corporation Limited as an individual entity are no longer presented.
The financial statements are presented in Australian dollars.
Astron Corporation Limited is a for-profit company limited by shares incorporated in Hong Kong whose
shares are publicly traded through CHESS Depository Interests on the Australian Securities Exchange.
2. Summary of Significant Accounting Policies
(a) Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in
accordance with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB) and other authoritative pronouncements of the IASB.
land and buildings, plant and equipment deemed
The financial statements have also been prepared on a historical cost basis, except for investment
fair value and
properties,
available-for-sale financial assets that have been measured at fair value. Non-current assets and
disposal groups held for sale are measured at the lower of carrying amounts and fair value less
costs to sell.
to be at
The following significant accounting policies have been adopted in the preparation and presentation
of the financial statements.
(b) Basis of Consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries
as of 30 June 2017. The Parent 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.
All transactions and balances between Group companies are eliminated on consolidation, including
unrealised gains and losses on transactions between Group companies. Where unrealised losses
on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for
impairment from a group perspective. Amounts reported in the financial statements of subsidiaries
have been adjusted where necessary to ensure consistency with the accounting policies adopted
by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the
year are recognised from the effective date of acquisition, or up to the effective date of disposal, as
applicable.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or
loss and net assets that is not held by the Group. The Group attributes total comprehensive income
or loss of subsidiaries between the owners of the parent and the non-controlling interests based on
their respective ownership interests.
23
49
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(c) Foreign Currency Translation
The functional and presentation currency of Astron Corporation Limited and its Australian
subsidiaries is Australian dollars (A$).
Foreign currency transactions are translated into the functional currency using the exchange rates
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the end of the reporting period. Foreign
exchange gains and losses resulting from settling foreign currency transactions, as well as from
restating foreign currency denominated monetary assets and liabilities, are recognised in profit or
loss except when they are deferred in other comprehensive income as qualifying cash flow hedges
or where they relate to differences on foreign currency borrowings that provide a hedge against a
net investment in a foreign entity.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when fair value was determined.
The functional currency of the overseas subsidiaries is primarily Chinese Renminbi. The assets and
liabilities of these overseas subsidiaries are translated into the presentation currency of Astron
Corporation Limited at the closing rate at the end of the reporting period and income and expenses
are translated at the weighted average exchange rates for the year. All resulting exchange
differences are recognised in other comprehensive income as a separate component of equity
(foreign currency translation reserve). On disposal of a foreign entity, the cumulative exchange
differences recognised in foreign currency translation reserves relating to that particular foreign
operation are recognised in the profit and loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as
assets and liabilities of the foreign entity and translated at the closing rate.
(d) Revenue Recognition
Revenue is recognised at the fair value of the consideration received or receivable. Amounts
disclosed as revenue are net of returns, trade allowances and duties and taxes paid. The following
specific recognition criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of products is recognised when the significant risks and rewards of
ownership have passed to the buyer i.e. when control of the goods is passed to the buyer.
Rendering of services
Revenue from the rendering of services such as management fees are recognised upon the
rendering of the service to the customers in accordance with the agreements.
Interest
Revenue is recognised as interest accrues using the effective interest method. The effective
interest method uses the effective interest rate which is the rate that exactly discounts the estimated
future cash receipts over the expected life of the financial asset.
Rental income
Rental income is accounted for on a straight-line basis over the lease term. Contingent rentals are
recognised as income in the periods when they are earned.
24
50
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(e)
Income Tax
The income tax expense for the period is the tax payable on the current period's taxable income
based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences between the tax base of assets and
liabilities and their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for all temporary differences, between carrying
amounts of assets and liabilities for financial reporting purposes and their respective tax bases, at
the tax rates expected to apply when the assets are recovered or liabilities settled, based on those
tax rates which are enacted or substantively enacted for each jurisdiction. Exceptions are made for
certain temporary differences arising on initial recognition of an asset or a liability if they arose in a
transaction, other than a business combination, that at the time of the transaction did not affect
either accounting profit or taxable profit.
Deferred tax assets are only recognised for deductible temporary differences and unused tax
losses if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses.
Deferred tax assets and liabilities are not recognised for temporary differences between the
carrying amount and tax bases of investments in subsidiaries, associates and interests in joint
ventures where the parent entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Astron Limited, the wholly owned subsidiary of Astron Corporation Limited, and the Australian
subsidiaries wholly owned by Astron Limited have implemented the tax consolidation legislation for
the whole of the financial year. Astron Limited is the head entity in the tax consolidated group. The
stand-alone taxpayer within a group approach has been used to allocate current income tax
expense and deferred tax balances to wholly owned subsidiaries that form part of the tax
consolidated group. Astron Limited has assumed all the current tax liabilities and the deferred tax
assets arising from unused tax losses for the tax consolidated group via intercompany receivables
and payables because a tax funding arrangement has been in place for the whole financial year.
The amounts receivable/payable under tax funding arrangements are due upon notification by the
head entity, which is issued soon after the end of each financial year. Interim funding notices may
also be issued by the head entity to its wholly owned subsidiaries in order for the head entity to be
able to pay tax installments. These amounts are recognised as current intercompany receivables or
payables.
To the extent that research and development costs are eligible activities under the “Research and
development tax incentive” programme a 45% 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 an income tax benefit, in profit or loss, resulting from the monetisation of
available tax losses that otherwise would have been carried forward.
(f)
Impairment of Assets
At the end of each reporting period the Group assesses whether there is any indication that
individual assets are impaired. Where impairment indicators exist, recoverable amount is
determined and impairment losses are recognised in the profit and loss where the asset's carrying
value exceeds its recoverable amount. Recoverable amount is the higher of an asset's fair value
less costs to sell and value in use. For the purpose of assessing value in use, the estimated future
cash flows are discounted to their present value using a pretax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset.
Where it is not possible to estimate recoverable amount for an individual asset, recoverable amount
is determined for the cash generating unit to which the asset belongs.
25
51
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(g) Cash and Cash Equivalents
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents
includes cash on hand and at bank, deposits held at call with financial institutions, other short term,
highly liquid investments with maturities of three months or less, that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value and bank
overdrafts.
Term deposits with maturity over three months include bank deposits with fixed terms over three
months period. For the purpose of the Consolidated Statement of Cash Flows, term deposits with
maturity over three months are shown as cash flows from investing activities.
(h) Trade Receivables
Trade receivables are recognised at original invoice amounts less an allowance for uncollectible
amounts and have repayment terms between 0 and 90 days. Collectability of trade receivables is
assessed on an ongoing basis. Debts which are known to be uncollectible are written off. An
allowance is made for doubtful debts where there is objective evidence that the Group will not be
able to collect all amounts due according to the original terms. Objective evidence of impairment
includes financial difficulties of the debtor, default payments or debts more than 180 days overdue.
On confirmation that the trade receivable will not be collectible the gross carrying value of the asset
is written off against the associated provision.
From time to time, the Group elects to renegotiate the terms of trade receivables due from
customers with which it has previously had a good trading history. Such renegotiations will lead to
changes in the timing of payments rather than changes to the amounts owed and are not, in the
view of the Directors, sufficient to require the de-recognition of the original instrument.
Receivables from related parties are recognised and carried at the nominal amount due.
(i)
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises all direct
materials, direct labour and an appropriate portion of variable and fixed overheads. Fixed
overheads are allocated on the basis of normal operating capacity. Costs are assigned to
inventories using the first in first out basis. Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated selling cost of completion and selling expenses.
26
52
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(j)
Investments and Other Financial Assets
All investments and other financial assets are initially stated at cost, being the fair value of
consideration given plus acquisition costs. Purchases and sales of investments are recognised on
trade date which is the date on which the Group commits to purchase or sell the asset. Accounting
policies for each category of investments and other financial assets subsequent to initial recognition
are set out below.
Available-for-sale financial assets
Available-for-sale financial assets comprise investments in listed and unlisted entities and any
non-derivatives that are not classified as any other category of financial assets, and are classified
as non-current assets (unless management intends to dispose of the investment within 12 months
of the end of the reporting period). After initial recognition, these investments are measured at fair
value with gains or losses recognised in other comprehensive income (available-for-sale
investments revaluation reserve). Where there is a significant or prolonged decline in the fair value
of an available-for-sale financial asset (which constitutes objective evidence of impairment) the full
amount including any amount previously charged to other comprehensive income is recognised in
profit or loss. Purchases and sales of available-for-sale financial assets are recognised on
settlement date with any change in fair value between trade date and settlement date being
recognised in other comprehensive income. On sale, the amount held in available-for-sale reserves
associated with that asset is recognised in profit or loss as a reclassification adjustment. Interest on
corporate bonds classified as available-for-sale is calculated using the effective interest rate
method and is recognised in finance income in profit or loss.
The fair value of quoted investments are determined by reference to stock exchange quoted market
bid prices at the close of business at the end of the reporting period. For investments where there is
no quoted market price, fair value is determined by reference to the current market value of another
instrument which is substantially the same or is calculated based on the expected cash flows of the
underlying net asset base of the investment.
Investments in subsidiaries are accounted for in the consolidated financial statements as described
in note 2(b).
Loans and receivables
Impairment losses are measured as the difference between the carrying amount and the present
value of the estimated future cash flows, excluding future credit losses that have not been incurred.
The cash flows are discounted at the investment's original effective interest rate. Impairment losses
are recognised in profit or loss.
Non-current loans and receivables include loans due from related parties repayable within 366 days
of the end of the reporting period. These are interest bearing using a market rate of interest for a
similar instrument with a similar credit rating. In the case of loans and receivables, objective
evidence of impairment includes confirmation that the company will not be able to collect all
amounts due according to the original terms.
(k) Fair Values
Fair values may be used for financial asset and liability measurement and well as for sundry
disclosures.
Fair values for financial instruments traded in active markets are based on quoted market prices at
the end of the reporting period. The quoted market price for financial assets is the current bid price.
The carrying value less impairment provision of trade receivables and payables are assumed to
approximate their fair values due to their short-term nature. The fair value of financial liabilities for
disclosure purposes is estimated by discounting the future contractual cash flows at the current
market interest rate that is available to the Group for similar financial instruments.
27
53
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(l) Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any
accumulated depreciation and impairment losses.
All other plant and equipment is stated at historical cost, including costs directly attributable to
bringing the asset to the location and condition necessary for it to be capable of operating in the
manner intended by management, less depreciation and any impairments.
Land is not depreciated. Leasehold improvements are depreciated over the shorter of either the
unexpired period of the lease or the estimated useful lives of the improvements.
Depreciation on other assets is calculated on a straight-line basis over the estimated useful life of
the asset as follows:
Class of Asset
Leasehold Buildings
Freehold Land
Plant and Equipment
50 years
Indefinite
3-20 Years
The assets' residual value and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
Gains and losses on disposals are calculated as the difference between the net disposal proceeds
and the asset's carrying amount and are included in profit or loss in the year that the item is
de-recognised.
The cost of fixed assets constructed within the Group includes the cost of materials, direct labour,
borrowing costs and an appropriate proportion of fixed and variable overheads.
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.
Additional costs incurred on the impaired capital works in progress are expensed in profit or loss.
(m) Leases
Leases where the lessor retains substantially all the risks and rewards of ownership of the net asset
are classified as operating leases. Payments made under operating leases (net of incentives
received from the lessor) are charged to profit or loss on a straight-line basis over the period of the
lease.
(n) Land Use Rights
The upfront prepayments made for land use rights are expensed in profit or loss on a straight-line
basis over the period of the lease or, when there is impairment, it is expensed immediately. The
period of the lease is 50 years.
(o)
Intangibles
Research and development costs
Research costs are expensed as incurred. Development expenditure incurred on an individual
project is capitalised if the product or service is technically feasible, adequate resources are
available to complete the project, it is probable that future economic benefits will be generated and
expenditure attributable to the project can be measured reliably. Expenditure capitalised comprises
costs of services and direct labour. Other development costs are expensed when they are incurred.
The carrying value of development costs is reviewed annually when the asset is not yet available
for use, or when events or circumstances indicate that the carrying value may be impaired.
The project is in the development phase and hence no amortisation has been brought to account.
An amortisation policy has yet to be determined.
28
54
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
Water rights
The Group has capitalised Water Rights. The water rights are amortised over the term of the right.
The carrying value of water rights is reviewed annually or when events or circumstances indicate
that the carrying value may be impaired.
(p) Exploration and Evaluation Expenditure
(i) Costs carried forward
Costs arising from exploration and evaluation activities are carried forward provided that the
rights to tenure of the area of interest are current and such costs are expected to be recouped
through successful development, or by sale, or where exploration and evaluation activities
have not, at reporting date, reached a stage to allow a reasonable assessment regarding the
existence of economically recoverable reserves. Expenditure incurred is accumulated in
respect of each identifiable area of interest.
(ii) Costs abandoned area
Costs carried forward in respect of an area of interest that is abandoned are written off in the
year in which the decision to abandon is made.
(iii) Regular review
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.
(iv) Costs of site restoration
Costs of site restoration are to be provided once an obligation presents. 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 will be determined using estimates of future costs, current legal requirements and
technology on a discounted basis.
(q) Trade and Other Payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to
the end of the reporting period and which are unpaid. These amounts are unsecured and have 30 to
90-day payment terms.
Payables to related parties are carried at the principal amount.
(r) Borrowings
All loans and borrowings are initially recognised at fair value, net of transaction costs incurred.
Borrowings are subsequently measured at amortised cost. Any difference between the proceeds
(net of transaction costs) and the redemption amount is recognised in profit or loss over the period
of the loans and borrowings using the effective interest method.
All borrowings are classified as current liabilities unless the Group has an unconditional right to
defer settlement of the liability for at least 12 months after the end of the reporting period.
(s) 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.
29
55
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(t) Provisions
Provisions for legal claims, service warranties and make good obligations are recognised when the
Group has a present legal or constructive obligation as a result of a past event, it is probable that
that an outflow of economic resources will be required to settle the obligation and the amount can
be reliably estimated. Provisions are not recognised for future operating losses.
Where the effect of the time value of money is material, provisions are determined by discounting
the expected future cash flows at a pretax rate that reflects current market assessments of the time
value of money and, where appropriate, the risks specific to the liability.
(u) Employee Benefit Provisions
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating
sick leave expected to be settled within 12 months of the end of the reporting period are recognised
in respect of employees' services rendered up to the end of the reporting period and measured at
amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick
leave are recognised when leave is taken and measured at the actual rates paid or payable.
Liabilities for wages and salaries and annual leave are included as part of Other Payables.
Bonus plan
The Group recognises an expense and a liability for bonuses when the entity is contractually
obliged to make such payments or where there is past practice that has created a constructive
obligation.
Retirement benefit obligations
The Group contributes to employee superannuation funds in accordance with its statutory
obligations. Contributions are recognised as expenses as they become payable.
(v)
Issued Capital
Ordinary shares are classified as equity.
Costs directly attributable to the issue of new shares are shown as a deduction from the equity
proceeds, net of any income tax benefit. Costs directly attributable to the issue of new shares
associated with the acquisition of a business are included as part of the purchase consideration.
(w) Going Concern
For the year ended 30 June 2017 the Group incurred a net loss of $2,590,844 and had net cash
outflows from operations of $3,298,191. As at 30 June 2017 the Group had a surplus of current
assets over current liabilities of $4,074,727 and $1,317,231 of available cash and as such the
annual financial report has been prepared on the going concern basis, which assumes the continuity
of normal business activity and the realisation of assets and settlement of liabilities in the normal
course of business.
The directors are of the view that the business is a going concern as the short-term needs of the
company to meet its ongoing administration costs and committed project expenditure are forecast to
be covered by the existing resources on hand for at least the next 12 months and from the date of
this report. Initially there are ongoing receipts due from the sale of the land assets in China, the
receipt of advance payments against a Senegal Offtake agreement and continued strengthening of
Chinese mineral sand markets and Chinese trading in the near to medium term.
While the Group reported an operating and project investing cash outflow for the 12 months to 30
June 2017 of $5,556,066, this was offset by proceeds received on sale of land in China of
$1,873,007 and a further $1,730,499 has been received subsequent to year end. As at 30 June
2017 the Group is carrying a land sale receivable of $10,050,196 which is expected to be
substantially repaid by December 2018.
30
56
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
The Group will require additional funding to execute its long-term plans. With respect to the projects,
the Group is currently working through funding options.
With regard to funding for the Senegal project, subsequent to year end approximately $3.8 million
has been received pursuant to advance payments against delivery of materials under a Senegal
Offtake agreement which is budgeted to fund the development of the Senegal mine project.
Funding for the Donald project is advancing with Chinese sources, with a capital expenditure
agreement having been signed, subject to various provisions. There will be a need for additional
funding over and above this, which will be pursued when the definitive feasibility study is complete
and the timing of the Chinese funding becomes clearer. Options available to the Group include a
mixture of equity and debt funding and the directors believe that such funding will be forthcoming.
There can be no assurance that the Group will be able to obtain, or access additional funding when
required, or that the terms associated with the funding will be acceptable to the Group. Similarly,
there are risks that the timeline developed for the completion of the plant, subsequent
commissioning, economically sufficient production, and subsequent sales will not be achieved as
planned.
This financial report does not include any adjustments relating to the recoverability and classification
of recorded asset amounts or to the amounts and classification of liabilities that might be necessary
should the Group not continue as a going concern.
(x) Share Based Payments
The Group may provide benefits to employees (including Directors) of the Group in the form of
share based payment transactions, whereby employees render services in exchange for shares
("equity settled transactions"). Such equity settled transactions are at the discretion of the
Remuneration Committee. To date, no such equity settled transactions have been undertaken.
The fair value of options or rights granted is recognised as an employee benefit expense with a
corresponding increase in equity (share-based payment reserve). The fair value is measured at
grant date and recognised over the period during which the employees become unconditionally
entitled to the options. Fair value is determined using a Black-Scholes option pricing model. In
determining fair value, no account is taken of any performance conditions other than those related
to the share price of Astron Corporation Limited ("market conditions"). The cumulative expense
recognised between grant date and vesting date is adjusted to reflect the Directors’ best estimate of
the number of options or rights that will ultimately vest because of internal conditions of the options
or rights, such as the employees having to remain with the Group until vesting date, or such that
employees are required to meet internal KPI. No expense is recognised for options or rights that do
not ultimately vest because internal conditions were not met. An expense is still recognised for
options or rights that do not ultimately vest because a market condition was not met.
Where the terms of options or rights are modified, the expense continues to be recognised from
grant date to vesting date as if the terms had never been changed. In addition, at the date of the
modification, a further expense is recognised for any increase in fair value of the transaction as a
result of the change.
Where options are cancelled, they are treated as if vesting occurred on cancellation and any
unrecognised expenses are taken immediately to profit or loss. However, if new options are
substituted for the cancelled options or rights and designated as a replacement on grant date, the
combined impact of the cancellation and replacement are treated as if they were a modification.
When shareholders’ approval is required for the issuance of options or rights, the expenses are
recognised based on the grant-date fair value according to the management estimation. This
estimate is re-assessed upon obtaining formal approval from shareholders.
31
57
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(y) Dividends/Return of Capital
No dividends were paid or proposed for the years ended 30 June 2017 and 30 June 2016. There is
no Dividend Reinvestment Plan in operation.
(z) Segment Reporting
Segment revenues, expenses, assets and liabilities are those that are directly attributable to a
segment and the relevant portion that can be allocated to the segment on a reasonable basis.
Segment assets include all assets used by a segment and consist primarily of operating cash,
receivables, inventories, property, plant and equipment and other intangible assets. Segment
liabilities consist primarily of trade and other creditors, employee benefits and provisions.
(aa) Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of Astron
Corporation Limited by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares during the year.
Diluted earnings per share
Earnings used to calculate diluted earnings per share are calculated by adjusting the basic earnings
by the after tax effect of dividends and interest associated with dilutive potential ordinary shares.
The weighted average number of shares used is adjusted for the weighted average number of
ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares
into ordinary shares.
(bb) Goods and Services Tax (GST)
Revenues, expenses are recognised net of GST except where GST incurred on a purchase of
goods and services is not recoverable from the taxation authority, in which case the GST is
recognised as part of the cost of acquisition of the asset or as part of the expense item.
Receivables and payables are stated with the amount of GST included. The net amount of GST
recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the consolidated statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of
cash flows arising from investing and financing activities, which is recoverable from, or payable to,
the taxation authority is classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payable to, the taxation authority.
(cc) New and revised standards that are effective for these financial statements
The Group has adopted all of the new, revised or amending Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board that are mandatory for the
current reporting period. The adoption of these Accounting Standards and Interpretations did not
have any significant impact on the financial performance or position of the Group.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory
have not been early adopted.
32
58
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(dd) Standards Issued but not yet Effective
Australian Accounting Standards and Interpretations that have recently been issued or amended
but are not yet mandatory, have not been early adopted by the Group for the annual reporting
period ended 30 June 2017. The Group's assessment of the impact of these new or amended
Accounting Standards and Interpretations, most relevant to the Group, are set out below.
(a)
Title of standard
Nature of change
Impact
IFRS 9 Financial
Instruments
IFRS 9 addresses the
classification, measurement
and de-recognition of
financial assets and financial
liabilities, impairment of
financial assets and hedge
accounting.
Given the nature of
the Company’s
financial assets and
financial liabilities, the
Company does not
expect the impact to
be significant.
Based on the
Company’s
assessment, the
impact is not expected
to be significant.
IFRS 15
Revenue from
contracts with
customers
An entity will recognise
revenue to depict the transfer
of promised goods or services
to customers in an amount
that reflects the consideration
to which the entity expects to
be entitled in exchange for
those goods or services.
This means that revenue will
be recognised when control
of goods or services is
transferred, rather than on
transfer of risks and rewards
as is currently the case under
IAS 18 Revenue.
Mandatory application
date/ Date adopted by
Company
Must be applied for
reporting periods
commencing on or after 1
January 2018. Therefore
the application date for
the company will be for
the reporting period
commencing on 1 July
2018.
Must be applied for
annual reporting periods
beginning on or after 1
January 2018. Therefore
the application date for
the Company will be for
the reporting period
commencing on 1 July
2018.
33
59
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
3. Critical Accounting Estimates and Judgments
The Directors evaluate estimates and judgments incorporated into the financial statements based on
historical knowledge and best available current information. Estimates assume a reasonable expectation
of future events based on current trends and economic data, obtained both externally and within the
Group.
i.
Key estimates: Impairment
The Group assesses impairment at the end of each reporting period by evaluating conditions
specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the
recoverable amount of the asset is determined. Fair value less costs to dispose calculations are
performed in assessing recoverable amounts incorporate a number of key estimates and
judgements.
The Group has used a combination of independent and Director valuations to support the carrying
value of intangible assets while the Group works through to obtaining bankable feasibility status
(Refer note 17). The valuations use various assumptions to determine future cash flows based
around risks including capital, geographical, markets, foreign exchange and mineral price
fluctuations.
All other assets have been assessed for impairment based on either their value in use or fair value
less costs to sell. The impairment assessments inherently involve significant judgements and
estimates to be made.
ii.
Provision for Impairment of Receivables
The provision for impairment of receivables assessment requires a degree of estimation and
judgement. The level of provision is assessed by taking into account the recent sales experience,
the aging of receivables, historical collection rates and specific knowledge of the individual debtors’
financial position. The Group has a receivable for the disposal of surplus land in China, the sale
contract is local government backed and assessed as fully recoverable.
iii.
Capitalisation of Exploration and Evaluation Assets
The Group has continued to capitalise expenditure, incurred on the exploration and evaluation of the
Donald Mineral Sands project in Victoria, Australia in accordance with IFRS 6. This has occurred
because the technical feasibility and economic viability of extracting the mineral resources is not
demonstrable. The Group has assessed that the balances capitalised will be recoverable through
the project’s successful development.
iv.
Capitalisation of Development Assets
The Group has continued to capitalise expenditure, in accordance with IFRS 6, incurred on the
development of the Senegal Mineral Sands project in Senegal. The Group has assessed that the
balances capitalised will be recoverable through the project’s successful development. The Group
expects to reclassify as a development asset subsequent to year end.
v.
Income Tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgment is
required in determining the provision for income tax. There are transactions and calculations
undertaken during the ordinary course of business for which the ultimate tax determination is
uncertain. The group recognises tax receivables and liabilities based on the Group’s current
understanding of the tax law. Where the final tax outcome of these matters is different from the
carrying amounts, such differences will impact the current and deferred tax provisions in the period
in which such determination is made.
vi.
Deferred Tax Assets
Deferred tax assets have not been recognised for capital losses and China revenue losses as the
utilisation of these losses is not considered probable at this stage.
34
60
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
vii.
Available-for sale Financial Assets
Available-for-sale financial assets have been classified as current assets as it is the Group’s
intention to dispose of these assets within one year.
viii.
Inventories
Management estimates the net realisable values of inventories, taking into account the most
reliable evidence available at each reporting date. The future realisation of these inventories may
be affected by future technology or other market-driven changes that may reduce future selling
prices.
4. Segment Information
i.
Description of Segments
The Group has adopted IAS 8 Operating Segments from whereby segment information is presented
using a 'management approach', i.e. segment information is provided on the same basis as
information used for internal reporting purposes by the Managing Director/President (chief operating
decision maker) who monitors the segment performance based on the net profit before tax for the
period. Operating segments have been determined on the basis of reports reviewed by the
Managing Director/President who is considered to be the chief operating decision maker of the
Group. The reportable segments are as follows:
• Senegal: Development of the Niafarang mine
• Donald Mineral Sands: Development of the Donald Mineral Sands mine
• Titanium: Development of mineral processing plant and mineral trading
• Mineral Resources: Mineral trading and construction of the mineral separation plant
• Other: Group treasury and head office activities
35
61
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
ii.
Information provided to the Managing Director /President
Donald Mineral Sands
Titanium
Mineral Resources
Senegal
Other
Consolidated
30 June
Jun-17
Jun-16
Jun-17
Jun-16
Jun-17
Jun-16
Jun-17
Jun-16
Jun-17
Jun-16
Jun-17
Jun-16
$
$
$
$
$
$
$
$
$
$
$
$
Revenue from external customers
Sales
Interest revenue
-
456
Rent/Other Income
327,777
215,436
212,905
299,135
-
1,499,716
23
400,047
467,976
667
128,312
10,811
-
64
-
43,737
Total revenue
328,233
216,103
1,840,933
309,969
400,111
511,713
(170,047)
3,258
(1,670,583)
(1,596,774)
(933,204)
(782,958)
-
-
-
-
-
-
-
-
-
-
-
7,175
(21,140)
-
1,899,763
467,999
45,451
23,177
135,943
56,929
519,606
581,485
(13,965)
68,628
2,555,312
1,106,413
182,990
(2,627,705)
(2,590,844)
(5,004,179)
Segment result
Segment (loss) /
profit
Acquisition of PPE,
Intangible assets
and other non
-current segment
assets
Depreciation and
amortisation
1,869,128
3,186,908
205,398
168,190
34,002
5,699
2,050,946
619,625
-
-
4,159,474
3,980,422
7,903
-
414,588
458,068
140,588
194,746
-
-
658
79,670
563,737
732,484
36
62
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
30 June
Assets
Segment assets
Total
Liabilities
Segment liabilities
Total
Donald Mineral Sands
Titanium
Mineral Resources
Senegal
Other
Consolidated
Jun-17
Jun-16
Jun-17
Jun-16
Jun-17
Jun-16
Jun-17
Jun-16
Jun-17
Jun-16
Jun-17
Jun-16
$
$
$
$
$
$
$
$
$
$
$
$
71,757,041
69,831,943
22,038,972
26,942,637
11,069,436
11,227,071
6,953,752
4,698,568
764,747
1,759,950
112,583,948
114,460,169
71,757,041
69,831,943
22,038,972
26,942,637
11,069,436
11,227,071
6,953,752
4,698,568
764,747
1,759,950
112,583,948
114,460,169
9,355,351
9,351,269
499,728
175,193
238,350
245,584
982,023
79,997
(1,149,844)
(1,115,826)
9,925,609
8,736,217
9,355,351
9,351,269
499,728
175,193
238,350
245,584
982,023
79,997
(1,149,844)
(1,115,826)
9,925,609
8,736,217
37
63
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
iii.
Geographical Information
Although the Group is managed globally, it operates in the following main geographical areas:
Hong Kong
The home country of the parent entity.
Australia
The home country of Astron Limited and one of the operating subsidiaries which performs
evaluation and exploration activities. Interest and rental income is derived from Australian sources.
China
The home country of subsidiaries which operate in the mineral trading and downstream
development segment.
Other
Astron is focused on developing mineral sands opportunities, principally in Senegal with a view to
integrating into the Chinese operations.
Sales revenues
Interest revenue
Non-current assets
Australia
China
2017
$
-
2016
$
-
2017
$
7,628
1,899,793
467,999
128,312
2016
$
46,112
10,811
2017
$
2016
$
75,228,980
72,833,978
24,374,274
19,325,608
Other countries
-
-
3
6
3,409,158
1,260,744
1,899,793
467,999
135,943
56,929
103,012,412
93,420,330
During 2017 $1,868,614 or 98% (2016: $432,518 or 92%) of the revenue depended on
seven (2016: four) customers.
5. Revenue and Other Income
Continuing operations
Revenue
- sale of goods
-
Total revenue
interest income
Other income:
-
rental income
- other income
Total other income
Consolidated
2017
$
2016
$
1,899,763
135,943
2,035,706
184,027
335,579
519,606
467,999
56,929
524,928
226,997
354,488
581,485
38
64
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
6. Profit (Loss) Before Income Tax
i.
Profit (loss) before income tax includes the following specific expenses:
Finance costs
Premises-contractual amounts
Research and development costs
Depreciation and amortisation
Defined contribution superannuation
Employee benefits
Costs associated with Gambia and Senegal Investments
(note 13)
Write (back)/down of inventory
7.
Income Tax Expense
i.
The components of tax expense comprise:
Current tax expense in respect of current year
Adjustments recognised in the current year in
relation to the prior year
- Research & development inventive
- Prior year adjustment
- Change in tax rate
- Recognition of current year movements
Total
Consolidated
2017
$
8,379
6,761
771,108
563,737
53,711
591,178
134,987
(327,753)
2016
$
10,766
9,351
427,332
732,484
71,420
867,043
946,786
171,077
Consolidated
2017
$
-
2016
$
-
(727,895)
275,191
(398,982)
(566,888)
(1,418,574)
(449,101)
-
-
(146,882)
(595,983)
39
65
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
ii.
The prima facie tax on profit before income tax is reconciled to the income tax as follows:
Prima facie tax payable on profit 27.5% (2016: 30%)
-
continuing operations
Add/(Less) Tax effect of:
-
-
-
non-deductible Gambia
other non-deductible items
deferred tax asset not recognised on overseas
entities
change in tax rates
research & development incentive
over/(under) provision for income tax in prior year
impact of overseas tax differential
-
-
-
-
Income tax attributable to entity
Consolidated
2017
$
2016
$
(1,102,590)
(1,102,590)
(1,501,254)
(1,501,254)
37,121
(213,602)
730,322
(398,982)
(727,895)
275,191
(18,139)
(1,418,574)
284,036
(634,237)
728,341
-
(449,101)
1,013,162
(36,930)
(595,983)
The applicable weighted average effective tax rates are as
follows:
(35.4)%
(11.9)%
The decrease in the weighted average effective consolidated tax rate for 2017 is mainly the result of
exploration and feasibility expenditure claimed and offset by research and development rebates.
iii.
Income tax rates
Australia
In accordance with the Australian Income Tax Act, Astron Limited and its 100% owned Australian
subsidiaries have formed a tax consolidated group, tax funding or sharing agreements have been
entered into. Australia has a double tax agreement with China and there are currently no
impediments to repatriating profits from China to Australia. Dividends paid to Astron Limited from
Chinese subsidiaries are non-assessable under current Australian Income Tax Legislation.
China (including Hong Kong)
Astron Corporation Limited is subject to Hong Kong tax law.
The Group’s subsidiaries in China and are subject to Chinese income tax laws.
Chinese taxation obligations have been fully complied with, confirmed by regular audits completed
by the Chinese tax authorities.
iv.
Items not chargeable or not deductible for tax purposes
Items not chargeable or deductible for tax purposes for the Group principally represent costs
associated with the Gambian litigation and other costs incurred but not related to Australian
operations.
v.
Tax on other comprehensive items
No deferred tax liabilities have been recognised in relation to available for sale financial assets
reserve due to the existence of significant capital losses. Accordingly, no movement in income tax
is recorded in current or prior financial years. No tax is applicable to other comprehensive item:
foreign currency translation differences and share based payments reserve.
40
66
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
8. Earnings Per Share
i.
Reconciliation of earnings used in the calculation of earnings per share to loss/(profit):
(Loss)/Profit attributable to owners
(Loss)/Earnings used to calculate basic EPS
(Loss)/Earnings used in calculation of dilutive EPS
ii. Weighted average number of ordinary shares (diluted):
used in calculating basic EPS
Weighted average number of ordinary shares outstanding
during the year
-
Weighted average number of ordinary shares outstanding
during the year
-
used in calculating dilutive EPS
Consolidated
2017
$
(2,590,844)
(2,590,844)
(2,590,844)
2016
$
(4,408,196)
(4,408,196)
(4,408,196)
Consolidated
2017
$
2016
$
122,479,784
122,479,784
122,479,784
122,479,784
iii.
Dilutive shares
There were no shares issued under escrow at or post year end. There were no rights or options for
shares outstanding at year-end.
41
67
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
9. Auditors' Remuneration
Audit and review of financial statements
Grant Thornton
Other services
-
- other assurance services
taxation services
10. Cash and Cash Equivalents
Cash on hand
Current & call account balances
Short term deposits
Total
Consolidated
2017
$
2016
$
151,516
151,516
153,149
153,149
7,500
-
35,760
10,064
Consolidated
2017
$
10,812
1,306,419
-
1,317,231
2016
$
5,652
5,098,942
-
5,104,594
Cash on hand is non-interest bearing. Bank balances and short-term deposits at call bear floating
interest rates between 0.0% and 2.15% (2016: 0.0% and 2.15%). Deposits have an average maturity of
90 days (2016: 90 days). Bank balances included letter of credit deposits of $248,038 as at 30 June 2017
(2016: $0).
a) Geographic concentration of risk – cash and cash equivalents
Australia
China
Hong Kong
USA
United Kingdom
Senegal
Total
Consolidated
2017
$
291,140
921,686
2,351
25,456
-
76,598
1,317,231
2016
$
722,983
4,344,268
2,444
28,687
3,125
3,087
5,104,594
42
68
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
b) Concentration of risk by bank – cash and cash equivalents
Australia
Commonwealth Bank-S&P rating of AA- (2016:AA-)
Goldman Sachs JB Were-A- (2016:A-)
Westpac Bank-S&P rating of AA- (2016:AA-)
Bank of China-S&P rating of A (2016:A)
Other Australian banks
China
Bank of China-S&P rating of A+ (2016:A)
Construction Bank-S&P rating of A (2016:A)
China Zheshang Bank – BA1
Other Chinese banks
Other countries
Other banks
Consolidated
2017
$
255,003
-
1,636
11,923
22,040
290,602
192,369
73,551
453,867
191,625
911,412
2016
$
252,018
84,458
1,745
12,326
372,436
722,983
1,979,916
2,357,793
-
6,559
4,344,268
104,405
104,405
37,343
37,343
i.
Restrictions on cash
The Chinese domiciled cash on hand may have some restriction on repatriation to Australia
depending on basis on which the funds are transferred to Australia. Depending on the basis, there
may be taxes (including withholding tax) of 16% to be paid.
c) Term deposits greater than 90 days
Term deposits with maturity over 90 days
Consolidated
2017
$
60,898
2016
$
60,685
As at 30 June 2017, term deposits with maturity over 90 days of $60,898 (2016: $60,685) bear fixed
interest rates of 0.9% (2016: 2.2%) and have a maturity of 3-6 months.
i. Restrictions on cash
The short-term deposits include $60,000 (2016: $60,000) of cash backed Bank Guarantees for the
operations of the Donald Mineral Sands project and WIM 150 Pty Limited.
43
69
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
d) Geographic concentration of risk – term deposits
Australia
e) Concentration of risk by bank – term deposits
Australia
Commonwealth Bank-S&P rating of AA- (2016:AA-)
Other
11. Trade and Other Receivables
Consolidated
2017
$
60,898
2016
$
60,685
Consolidated
2017
$
50,000
10,898
60,898
2016
$
50,000
10,325
60,325
Consolidated
2017
$
2016
$
459,127
459,127
4,545,089
1,429,645
(346,100)
1,083,545
6,087,761
55,295
55,295
13,311,586
1,141,770
(365,272)
776,498
14,143,379
Note
11(b)(c)
11(a)
11(c)
11(c)
Current
Trade debtors
Net trade debtors
Other receivables
Prepayments
Impairments
Net prepayments
Non Current
Other Receivables
Total
(a) Other receivables
11(a)
11(a)
6,396,921
12,484,682
-
14,143,379
During the year ended 30 June 2015, the Group entered into a contract of sale for leasehold land
held in Yingkou province China, the net proceeds of $20,356,248 to be received in instalments. As
at 30 June 2017 the receivable amounts to $10,050,196 which was to be paid in instalments. While
the receivable is currently outside terms, the Group is confident that the receivable will be received
in instalments by December 2018, accordingly no impairment has been recognised. A proportion of
the receivable has been reclassified to current and non-current in accordance with anticipated
receipt.
44
70
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(b) Ageing analysis
The ageing analysis of trade receivables is as follows:
0-30 days (not past due)
31-60 days (past due not impaired)
61-90 days (past due not impaired)
91+ days (past due not impaired)
Total
Consolidated
2017
$
54,396
390,948
4,039
9,744
459,127
2016
$
22,931
23,540
8,284
540
55,295
At the end of the reporting period the Group’s trade debtors are predominantly receivable from
Chinese trading partners. The Chinese debtors are regularly reviewed and as is common practice in
China the terms may be extended without which there would be overdue balances. Where
applicable the Group has impaired significantly overdue receivables.
It is the Group’s policy that where possible that sales are made in exchange for notes (guaranteed
by a Chinese bank) minimising the Group’s exposure to an impairment issue.
(c) Prepayments
At year end the Group had made advances to suppliers for inventory purchases to secure the
inventory at favourable prices.
Included in prepayments is an amount of $346,100 (2016: $365,272) which is the prepayment for
construction. This amount has been impaired due to low possibility of collection.
12. Inventories
Raw materials – at net realisable value
Finished goods – at net realisable value
Goods in transit
Total
Consolidated
2017
$
1,435,673
177,776
274,904
1,888,353
2016
$
602,786
125,193
2,585
730,564
There is a $481,101 (2016: $849,194) provision against inventory to net realisable value.
45
71
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
13. Investments in Gambia and Senegal
Carnegie Minerals (Gambia) Limited is a 100% subsidiary of Astron Limited. It was incorporated to
commence mining activities in Gambia. The investments and receivables associated with the company
have been impaired in full. The original agreement prior to the seizure of the assets was that Astron
Limited had an obligation to fund the development and operating costs of the mine by way of loans.
Exploration and evaluation on the Niafarang project in Senegal in current financial year (and in 2016)
has been capitalised. Furthermore, expenditure in 2017 of $136,259 (2016: $946,786) relating to
Gambia litigation claim has been expensed directly to profit and loss.
As announced to the ASX on 23 July 2015 Astron has received a successful finding in its favour. Astron
and the Gambian government made submissions on damages to the International Centre for Settlement
of Investment Disputes (“ICSID”). ICSID has now determined the award including damages in favour of
Astron.
The determination was for US$18,658,358 in damages for breach of the mining licence, interest of
US$993,683, arbitration costs of US$445,860 (minus any sums refunded to Astron by ICSID on its final
accounting) and £2,250,000 for legal costs. In total this is approximately AUD$31 million.
On 2 December 2015 Astron notified the ASX that The Gambia has submitted an application for
annulment to ICSID, on the grounds of the constitution of the arbitral tribunal, and arguments about
admissibility and jurisdiction. An application for annulment is the only form of action open to The
Gambia under the ICSID rules, as there is no form of appeal process. In due course ICSID will
appoint a panel of 3 arbitrators to form a committee to determine whether the Award should be
annulled in whole or in part. Astron confirms that any such application will be strenuously opposed.
14. Available-For-Sale Financial Assets
Listed Securities
Current listed investments, at fair value
shares in listed corporations
Total available-for-sale financial assets
Consolidated
2017
$
2016
$
217,293
217,293
540,237
540,237
Available-for-sale financial assets comprise investments in the ordinary issued capital of three public
companies listed on the Australian Securities Exchange (ASX). The cost of these investments was
$1,877,716. There are no fixed returns or fixed maturity date attached to these investments. In the
current financial year, the combined market value of these investments has increased by $164,798 (2016
increased by $352,614) however this was offset by proceeds from the sale of Altona Mining shares
totaling $466,602. The increase in market value of these investments has been netted off against the
Financial Assets Available for Sale Reserve, under IAS 139, in the consolidated statement of financial
position.
There will be no capital gains tax payable on the sale of these assets due to existing capital losses
carried forward.
For listed equity securities and preference shares, fair value is determined by reference to closing bid
prices on the ASX.
46
72
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
15. Subsidiaries
Financial Year 2017
Country of
incorporation
Percentage
Owned Ordinary
Shares
2017
Percentage
Owned Ordinary
Shares
2016
Parent entity
Astron Corporation Limited
Subsidiaries of parent entity
Astron Limited
Astron Advanced Materials Limited #
Astron Mineral Sands Pty Limited
Astron Titanium (Yingkou) Co Ltd
Carnegie Minerals (Gambia) Inc
Carnegie Minerals (Gambia) Limited
Camden Sands Inc
Coast Resources Limited
Dickson & Johnson Pty Limited
Donald Mineral Sands Pty Ltd
Sovereign Gold NL
WIM 150 Pty Limited
Yingkou Astron Mineral Resources Co Ltd
Astron Senegal Holding Pty Ltd
Senegal Mineral Sands Ltd
Zirtanium Pty Limited
Hong Kong
Australia
UK
Australia
China
USA
The Gambia
USA
Isle of Man
Australia
Australia
Australia
Australia
China
Hong Kong
Hong Kong
Australia
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
# Astron Advanced Materials Limited was dissolved 2 May 2017.
i.
Equity
The proportion of ownership interest is equal to the proportion of voting power held.
ii.
Disposal of subsidiaries
During the current year and prior years no subsidiaries were disposed.
iii.
Acquisition of subsidiaries
No new subsidiaries were incorporated during the year. In the prior year Carnegie Minerals
(Gambia), Inc was incorporated (in Delaware USA) as a wholly-owned subsidiary of Astron Limited.
47
73
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
16. Property, Plant and Equipment
Land and buildings
Land
At cost
Total land
Buildings and Leasehold buildings
At cost
Less accumulated depreciation
Less accumulated impairment losses
Total buildings and leasehold buildings
Total land and buildings
Plant and equipment and works in progress
Capital works in progress
At cost
Less accumulated impairment losses
Total capital works in progress
Plant and equipment
At cost
Less accumulated depreciation
Total plant and equipment
Total plant and equipment and works in progress
Total property, plant and equipment
Consolidated
2017
$
2016
$
5,254,000
5,254,000
5,254,000
5,254,000
9,972,309
(1,400,914)
-
8,571,395
13,825,395
10,524,633
(1,053,025)
-
9,471,608
14,725,608
9,239,867
(3,525,885)
5,713,982
9,625,008
(3,721,206)
5,903,802
2,461,135
(2,046,591)
414,544
6,128,526
2,460,578
(2,043,797)
416,781
6,320,583
19,953,921
21,046,191
(a) Assets pledged as security
As at 30 June 2017 and 30 June 2016 there were no mortgages granted as security over bank
loans.
(b) Capital works in progress
Capital works in progress are not ready for use and not yet being depreciated.
48
74
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(c) Movements in carrying amounts
Movement in the carrying amount for each class of property, plant and equipment between the
beginning and the end of the current financial year.
Consolidated
Capital
works in
progress
$
Land
$
Buildings
$
Plant and
equipment
$
Total
$
5,903,802
120,063
-
5,254,000
-
-
9,471,608
-
(408,436)
416,781 21,046,191
253,985
133,922
(524,737)
(116,301)
(309,883)
-
(491,777)
(19,858)
(821,518)
5,713,982
5,254,000
8,571,395
414,544 19,953,921
6,126,818
108,487
-
5,254,000 10,461,226
1,900
(446,912)
-
-
521,273 22,363,317
182,904
(604,428)
72,517
(157,516)
(331,503)
-
(544,606)
(19,493)
(895,602)
5,903,802
5,254,000
9,471,608
416,781 21,046,191
Year ended 30 June 2017
Balance at the beginning of
year
Additions
Depreciation expense
Foreign exchange
movements
Carrying amount at the
end of year
Year ended 30 June 2016
Balance at the beginning of
year
Additions
Depreciation expense
Foreign exchange
movements
Carrying amount at the
end of year
(d) Impairment of capital works in progress
No impairment loss has been recognised in profit or loss in 2017. During the 2016 year the Group
brought to account an impairment expense for the Zr Sponge project in China. The project while of
significant potential has long lead times and hence it was appropriate to impair at 30 June 2016.
49
75
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
17. Intangible Assets
Evaluation costs
Cost
Accumulated impairment loss
Net carrying value
Exploration expenditure capitalised
Exploration and evaluation phases
Net carrying value
Water rights
Net carrying value
Total Intangibles
(a) Intangible assets
Consolidated
2017
$
2016
$
15,110,380
(7,945,901)
7,164,479
12,982,274
(7,991,712)
4,990,562
52,513,029
52,513,029
49,435,974
49,435,974
13,973,278
73,650,786
14,691,622
69,118,158
Note
17(b)
17(b)
17(b)
17(a)(c)
17(a)(g)
17(f)
Movements during the year ended 30 June 2017 in intangible assets represent additions,
movements in foreign exchange and amortisation. For capital expenditure commitments refer note
27(ii).
(b) Evaluation costs and impairment losses
The development costs of $14,197,965 (2016: $12,982,274) and the accumulated impairment of
$7,945,901 (2016: $7,991,712) as at 30 June 2017 relates to the following:
1. TiO2 project costs of $7,804,351 (2016: $7,565,591) was fully impaired in 2009. The current
year movement represents the movement in foreign exchange.
2. The Senegal project of $7,306,029 (2016: $4,690,227) represents evaluation costs incurred
in Senegal. This was netted off by an impairment of $426,121 which was carried forward
from prior years and shifted due to the movement in foreign exchange. The costs incurred in
the years prior to June 2011 were fully impaired due to doubt as to whether the project
would continue at that time. The current year additions represented the resumption of
activities following the grant of the exploration license in June 2011.
3. The remaining balance of $284,571 (2016: $300,335) relates to capitalised testing and
design fees for the MSP. The current year movement represents the movement in foreign
exchange.
(c) Exploration and evaluation expenditure
This expenditure relates to the Group's investment in the Donald Mineral Sands Project. As at 30
June 2017 the Group has complied with the conditions of the granting of EL5186, EL5255, EL5472,
ML5532, RL 2002, RL 2003 and RL 2006. As such the Directors believe that the tenements are in
good standing with the Department of Primary Industries in Victoria, who administers the Mineral
Resources Development Act 1990.
The recoverability of the carrying amount of the exploration and evaluation assets is dependent
upon the successful development and commercial exploitation or alternatively sale of the area of
interest.
50
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Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(d) Movement in net carrying value
Consolidated
Exploration
and Evaluation
Phase
$
Development
costs
$
Water Rights
$
Software
$
Total
$
Year ended 30 June 2017
Opening balance
Additions
Amortisation
Foreign exchange
movements
49,435,974
4,990,562
14,691,622
3,077,055
2,175,013
-
-
-
-
(718,344)
(1,096)
-
Balance at 30 June 2017
52,513,029
7,164,479
13,973,278
-
-
-
-
-
69,118,158
5,252,068
(718,344)
(1,096)
73,650,786
Year ended 30 June 2016
Opening balance
Additions
Amortisation
Foreign exchange
movements
45,066,696
4,371,150
15,409,966
79,003
64,926,815
4,369,278
619,626
-
-
4,988,904
-
-
-
(718,344)
(79,003)
(797,347)
(214)
-
-
-
(214)
69,118,158
Balance at 30 June 2016
49,435,974
4,990,562
14,691,622
(e) Finite lives
Intangible assets, other than goodwill have finite useful lives. To date no amortisation has been
charged in respect of intangible assets due to the stage of development for each project.
(f) Water rights
In 2012 the Group acquired rights to the supply of water for the Donald project. The water rights are
currently being amortised over 25 years in line with entitlements.
18. Land Use Rights
Land use rights
Consolidated
2017
$
3,010,784
2016
$
3,255,981
During the year ended 30 June 2015, management entered into an agreement to transfer 1,065,384
sqm of land held in Yingkou province China to a state-owned entity. As the under-development of
this land resulted from a change of government development plan and restructure, this land transfer
has been subsidised by the Chinese Government. Final contracts over the land sale were
exchanged and the disposal was brought to account in the year ended 30 June 2015 with the net
proceeds of $20,356,248 to be received in instalments. As at 30 June 2017 the receivable amounts
to $10,050,196 which was to be paid in equal instalments. While the receivable is currently outside
terms the Group is confident that the receivable will be received in instalments by 31 December
2018.
51
77
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(a) Reconciliation
Opening balance
Additions
Amortisation
Transfer to assets classified as held for sale
Foreign exchange movements
Closing balance
19. Trade and Other Payables
Unsecured liabilities
Trade payables
Other payables
20. Borrowings
Current
Short term borrowings
Consolidated
2017
$
3,255,981
-
(75,267)
-
(169,930)
3,010,784
2016
$
3,525,124
-
(82,358)
-
(186,785)
3,255,981
Consolidated
2017
$
2016
$
2,436,546
2,926,095
5,362,641
2,208,322
1,340,633
3,548,955
Note
26
Consolidated
2017
$
76,080
76,080
2016
$
-
-
During the year ended 30 June 2017 Executive Director Mdm Kang Rong advanced Astron $76,080 for
working capital. The loan is provided interest free and repayable on demand.
52
78
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
21. Provisions
Current
Employee entitlements
Non-current
Environmental rehabilitation
Note
21(a)
Consolidated
2017
$
2016
$
58,088
58,088
40,000
40,000
67,783
67,783
40,000
40,000
(a) Provision for environmental rehabilitation
The provision for rehabilitation represents the estimated costs to rehabilitate the Donald Mineral
Sands evaluation excavation.
22. Taxation
i.
Liabilities
Current tax liability
Deferred tax liability arises from the following:
Capitalised expenditure
Provisions and other timing differences
Blackhole expenditure
Consolidated
2017
$
-
2016
$
-
4,466,931
(73,666)
(4,465)
4,388,800
5,151,117
(60,522)
(11,116)
5,079,479
ii.
Deferred tax assets not brought to account
Deferred tax assets are not brought to account, as benefits will only be realised if the conditions for
deductibility set out in note 2(e) occur.
Tax losses:
- Revenue losses (China)
- Capital losses
Consolidated
2017
$
2016
$
4,673,660
3,961,477
13,538,262 14,769,013
53
79
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
iii.
Current Tax Asset
This represents payment of provisional tax which is recoverable as there is no tax liability in view of
the tax losses incurred.
Current tax asset
23. Issued Capital
122,479,784 (2016: 122,479,784) Fully Paid Ordinary Shares at
HK$0.1
Total
Consolidated
2017
$
2016
$
-
460,380
Consolidated
2017
$
2016
$
1,605,048
1,605,048
1,605,048
1,605,048
The shares in Astron Corporation Limited are par value shares with a par value of HK$0.1.
(a) Reconciliation of ordinary shares (number)
At the beginning of year
At reporting date
(b) Reconciliation of ordinary shares (value)
At the beginning of the year
Total at end of the year
(c) Ordinary shares
Consolidated
2017
2016
122,479,784 122,479,784
122,479,784 122,479,784
Consolidated
2017
$
1,605,048
1,605,048
2016
$
1,605,048
1,605,048
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in
proportion to the number of shares held.
At the shareholders meetings, each ordinary share is entitled to one vote when a poll is called;
otherwise each shareholder has one vote on a show of hands.
54
80
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
(d) Capital risk management
The Group considers its capital to comprise its ordinary share capital, reserves, accumulated
retained earnings and net debt.
In managing its capital, the Group’s primary objective is to ensure its continued ability to provide a
consistent return for its equity shareholders through a combination of capital growth and dividends.
In order to achieve this objective, the Group has made decisions to adjust its capital structure to
achieve these aims, either through altering its dividend policy, new share issues, or share buy backs,
the Group considers not only its short-term position but also its long term operational and strategic
objectives.
Net debt
Total equity
Consolidated
2016
2017
$
$
-
-
102,658,231 105,723,952
There have been no significant changes to the Group’s capital management objectives, policies and
processes in the year nor has there been any change in what the Group considers to be its capital.
(e) Share based payments
As at 30 June 2017 there were no key executives that had any rights to acquire shares in terms of a
share-based payment scheme for employee remuneration. The creation and grant would be subject
to shareholder approval.
A share based payment of $913,104 was recognised after the achievement of certain milestones with
respect to the Senegal project were achieved by a project consultant. This represents a 3% equity
interest in the Senegal project, calculated by reference to the Senegal project fair value and will be
satisfied by the issue of shares in a Senegalese subsidiary which took place subsequent to year end.
24. Reserves
i.
Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising on translation of
foreign controlled subsidiaries. The reserve balance at 30 June 2017 is $8,799,756 (2016:
$10,352,428).
ii.
Share based payment reserve
The share-based payment reserve records the amount of expense raised in terms of equity-settled
share-based payment transactions. The reserve recognised in the current financial year is $913,104
(2016: $nil).
iii.
Financial assets available for sale reserve
The financial assets available for sale reserve represents the cumulative gains and losses arising on
the revaluation of available for sale financial assets that have been recognised in other
comprehensive income, net of amounts reclassified to profit or loss when those assets have been
disposed of or are determined to be impaired.
55
81
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
25. Dividends
During the current and prior years no dividend was proposed or paid.
Franking account balance
Franking credits available for the subsequent financial years based
on a tax rate of 27.5% (2016: 30%)
Consolidated
2017
$
2016
$
286,770
1,014,665
The above amount represents the balance on the franking account at the end of the financial year arising
from income tax payable.
26. Related party transactions
i.
ii.
iii.
iv.
v.
vi.
Parent entity
Astron Corporation Limited is the parent entity of the Group.
Subsidiaries
Interests in subsidiaries are disclosed in note 15.
Transactions with key management personnel
Key management of the Group are the executive members of the Board of Directors. Key
Management Personnel remuneration includes the following expenses:
Short term employee benefits
Salaries and fees
Non-cash benefits
Total short-term employee benefits
Post-employment benefits
Payments in lieu of notice
Superannuation
Total post-employment benefits
Total Remuneration
2017
$
2016
$
895,428
22,559
917,987
979,719
79,297
1,059,016
-
31,146
31,146
949,133
42,281
26,403
68,684
1,127,700
Rental of offices
From 1 July 2011 to September 2015, the Group leased offices at level 18, Building B, Fortune
Plaza, 53 Beizhan Road, Shenhe District, Shenyang China, property owned by Mdm Kang Rong,
who is an executive Director of the Astron Corporation Limited.
The lease agreement has now concluded and the office is now situated in property owned by the
Group rent free (2016: $97,230).
Interest free loans
All subsidiary companies are wholly owned with any interest free loans being eliminated on
consolidation.
Management services provided
Management and administrative services are provided at no cost to subsidiaries.
56
82
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
vii.
Related Party Loans
During the year ended 30 June 2017 Executive Director Mdm Kang Rong advanced Astron $76,080
for working capital. The loan is provided interest free and repayable on demand.
Dring the year ended 30 June 2015 the Group entered into a short term related party loan from
Executive Director Mdm Kang Rong who advanced Astron $1,000,000 for working capital. The
advance was provided on an interest free basis and repayable on demand. The loan was repaid
during the year ended 30 June 2016.
As at 30 June 2017 there are unpaid Directors and management fees payable to Directors’ related
entities as follows:
- Mdm Kang Rong, Juhua International Limited of $693,732 (2016: $456,284); and
- Mr Alex Brown, Firback Finance Limited of $845,839 (2016: $597,753)
The above liabilities have been subordinated and will not be called upon unless and until such time
that Astron Corporation Limited has available funds or is generating positive operating cash flows
from operations.
27. Commitments
i.
Operating lease commitments
There are no non-cancellable operating leases contracted for but not capitalised in the financial
statements (2016: nil)
ii.
Capital expenditure commitments
Capital expenditure commitments contracted for:
Chinese capital projects
Senegal
Donald Mineral Sands
Payable:
- not later than 12 months
iii. Water rights
Consolidated
2017
$
2016
$
1,105,040
912,415
50,000
2,067,455
68,972
942,760
50,000
1,061,732
2,067,455
2,067,455
1,061,732
1,061,732
In terms of the contract with GWMW the Group is required to pay a usage fee in 2017 of $218,178
(2016: $215,318) per quarter for the remaining life of the water rights.
iv.
Guarantees between subsidiaries
Astron Limited has provided a letter of support to the Victorian Department of Primary Industries to
fund any expenditure incurred by Donald Mineral Sands Pty Limited.
57
83
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
v.
Other commitments and contingencies
Land
In 2008 Astron Titanium (Yingkou) Co Ltd acquired a land site from the Chinese Government. The
Group is discussing possible changes to the usage rights with the Government. The Directors
believe that no significant loss will be incurred to the Group in relation to the land use rights. As at
the 30 June 2017 the net book value of this land is $1,389,101 (2016: $1,503,167).
The intention for the block of land held by Yingkou Astron Mineral Resources Co Ltd is currently
being evaluated. As at 30 June 2017 the net book value of the land is $1,621,683 (2016:
$1,752,814).
Minimum expenditure on exploration and mining licenses
To maintain the Exploration and Mining License’s at Donald the Group is required to spend
$1,748,540 on exploration and development expenditure over the next year (2016: $1,998,540).
The minimum expenditure amount per annum will normally increase over the life of an exploration
license. The minimum expenditure on the mining license 5532 is $556,800 per annum. The amount
of this expenditure could be reduced should the Group decide to relinquish land.
28. Cash Flow Information
i.
Reconciliation of cash provided by operating activities with profit attributable to members
Net (loss)/ profit for the year
Non-cash flows in profit (loss) from ordinary activities
Depreciation and amortisation
Other provisions
Gain on sale of property, plant & equipment
Gain/(Loss) on disposal of available-for-sale assets
Impairment of construction in progress
Decrease/ (increase) in trade and other receivables
Decrease/(increase) in inventories
Increase in trade payables and accruals
Increase in deferred tax liabilities
Effects on foreign exchange rate movement
Consolidated
2017
$
(2,590,844)
2016
$
(4,408,196)
563,737
-
-
21,140
-
163,760
(1,157,789)
397,742
(690,679)
(5,258)
(3,298,191)
732,484
(13,083)
(31,409)
(23,177)
-
891,523
66,734
1,017,110
(595,983)
(154,042)
(2,518,039)
58
84
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
ii.
Reconciliation of cash
Cash at the end of the financial year as shown in the cash
flow statement is reconciled to items in the consolidated
statement of financial position as follows:
Cash on hand
Current & call account balances
Short term deposits
iii.
Loan facilities
Consolidated
2017
$
2016
$
10,812
1,306,419
-
1,317,231
5,652
5,098,942
-
5,104,594
Note
10
10
10
As at 30 June 2017 the Group did not have any loan facilities.
iv.
Non cash financing and investing activities
No dividends were paid in cash or by the issue of shares under a dividend reinvestment plan during
the current year and prior year.
v.
Acquisition of entities
During the year or during the previous year Astron Corporation Limited did not invest any funds into
Chinese subsidiaries. During the current year Astron did not acquire any new entities.
vi.
Disposal of entities
There were no disposals of entities in the current or prior financial years.
vii.
Restrictions on cash
Bank balances did not include any letter of credit deposits at 30 June 2017 (2016: $nil).
29. Employee Benefit Obligations
As at 30 June 2017 and 30 June 2016, the majority of employees are employed in China. In accordance
with normal business practice in China employee benefits must be fully utilized annually. Any Chinese
provisions for employee entitlements at year end would be insignificant.
30. Subsequent events
As at 30 June 2017 $10,050,196 is due to the Group from the 2015 sale of surplus land in China.
Subsequent to year end, $1.7 million has been received against this receivable. Approximately $3.8
million has been received pursuant to pre-payment for the future supply of materials under an offtake
agreement to fund the development of the Senegal project.
In September 2017, Astron incorporated a new Senegalese entity “Senegal Mineral Resources” for the
Senegal project with a 3% non controlling interest.
No other matters or circumstances have arisen since the end of the financial year which significantly
affected or may significantly affect the operations of the Group, the results of those operations or the
state of affairs of the Group in future financial years.
The financial statements were authorised for issue on 29 September 2017 by the board of Directors.
59
85
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
31. Financial Instruments
i.
General objectives, policies and processes
In common with all other businesses, the Group is exposed to risks that arise from its use of
financial instruments. This note describes the Group’s objectives, policies and processes for
managing those risks and the methods used to measure them. Further quantitative information in
respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them
from previous periods unless otherwise stated in this note. The principal financial instruments from
which financial instrument risk arises are cash at bank, term deposits greater than 90 days, trade
receivables and payables and available-for-sale investments.
The Board has overall responsibility for the determination of the Group’s risk management
objectives and policies. The Groups' risk management policies and objectives are therefore
designed to minimise the potential impacts of these risks on the results of the Group where such
impacts may be material. The Group has significant experience in its principal markets which
provides the Directors with assurance as to the effectiveness of the processes put in place and the
appropriateness of the objectives and policies it sets. The Group engages a number of external
professionals to ensure compliance with best practice principles.
The overall objective of the Board is to set polices that seek to reduce risk as far as possible without
unduly affecting the Group’s competitiveness and flexibility. Further details regarding these policies
are set out below:
ii.
Credit risk
Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation
resulting in the Group incurring a financial loss. This usually occurs when debtors or counterparties
to derivative contracts fail to settle their obligations owing to the Group.
In respect of cash investments the majority of cash, cash equivalents and term deposits greater
than 90 days are held with institutions with a AA to A-credit rating.
In respect of trade receivables, there is no concentration of credit risk as the Group has a large
number of customers. Group policy is that sales are only made to customers that are credit worthy.
Trade receivables are predominantly situated in China.
Other Receivables include $10,050,196 (2016: $12,558,176) being the land sale receivable from the
Yingkou Provincial government.
Credit risk is managed on a Group basis and reviewed regularly by management and Audit & Risk
Committee. It arises from exposures to customers as well as through certain derivative financial
instruments and deposits with financial institutions.
Refer to note 10 (a) & (b) for concentration of credit risk for cash and cash equivalents.
The maximum exposure of the Group to credit risk at the end of the reporting period is as follows:
Cash & cash equivalents
Term deposits with maturity over 90 days
Receivables (trade and other) – current and non-current
Total
Consolidated
2017
$
1,317,231
60,898
12,484,682
2016
$
5,104,594
60,685
14,603,759
13,862,811
19,769,038
60
86
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
iii.
Liquidity risk
Liquidity risk is the risk that the Group may encounter difficulties raising funds to meet commitments
associated with financial instruments, e.g. borrowing repayments. The Group manages liquidity risk
by monitoring forecast cash flows. As at the year end the Group had cash of $1,317,231 (2016:
$5,104,594).
Maturity analysis
Consolidated
Year ended 30 June 2017
Non-derivatives
Trade payables
Other payables and accruals
Borrowings
Total Non-interest bearing liabilities
Total liabilities
Year ended 30 June 2016
Non-derivatives
Trade payables
Other payables and accruals
Borrowings
Total Non-interest bearing liabilities
Total liabilities
Carrying
Amount
$
Contractual
Cash flows
$
< 6 months
$
Note
19
19
20
19
19
20
2,436,546
2,926,095
76,080
5,438,721
5,438,721
2,436,546
2,926,095
76,080
5,438,721
5,438,721
2,436,546
2,926,095
76,080
5,438,721
5,438,721
2,208,322
1,340,633
-
3,548,955
3,548,955
2,208,322
1,340,633
-
3,548,955
3,548,955
2,208,322
1,340,633
-
3,548,955
3,548,955
iv.
Fair value
The fair values of
-
Listed investments have been valued at the quoted market bid price at the end of the reporting
period.
- Other assets and other liabilities approximate their carrying value.
At 30 June 2017 and 30 June 2016, the aggregate fair values and carrying amounts of financial
assets and financial liabilities approximate their carrying amounts.
Available-for-sale financial instruments are recognised in the statement of financial position of the
Group according to the hierarchy stipulated in IFRS 7.
61
87
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
Available-for-sale financial assets
ASX Listed equity shares Level 1
Consolidated
2017
$
2016
$
217,293
217,293
540,237
540,237
The Group does not have any Level 2 or 3 financial assets.
v.
Price risk
Given that price movements are not considered material to the Group, the Group does not have a
risk management policy for price risk. However, the Group's management regularly review the risks
associated with fluctuating input and output prices.
As at 30 June 2017, the maximum exposure of price risk to the Group was the available-for-sale
investments for $217,293 (2016: $540,237). 100% of the Group’s holding is in the mining or energy
sector.
The Group’s exposure to equity price risk is as follows:
Carrying amount of listed equity shares on ASX
Sensitivity Analysis
Listed equity shares on ASX
Profit before tax - decrease
Other comprehensive income - increase
Consolidated
2017
$
2016
$
217,293
217,293
540,237
540,237
Consolidated
2017
$
2016
$
Increase/(decrease) in
share price
Increase/(decrease) in
share price
+10%
-10%
+10%
-10%
-
21,729
(21,729)
-
-
54,024
(54,024)
-
The above analysis assumes all other variables remain constant.
vi.
Interest rate risk
The Group manages its interest rate risk by monitoring available interest rates and maintaining an
overriding position of security whereby the majority of cash and cash equivalents and term deposits
are held with institutions with a BA1 to A- credit rating.
62
88
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
The Groups' exposure to interest rate risk and the effective weighted average interest rate by maturity periods is set out in the tables below:
Weighted
Average
Effective Interest
Rate
2017
2016
%
%
Floating Interest Rate
Fixed Interest Rate
Maturing within 1 Year
Non-interest Bearing
Total
2017
$
2016
$
2017
$
2016
$
2017
$
2016
$
2017
$
2016
$
Financial Assets:
Cash and cash equivalents
Term deposits greater than 90
days
Receivables
Available-for-sale investments
Total Financial Assets
Financial Liabilities:
Trade and sundry payables
Borrowings
Total Financial Liabilities
0.90%
2.15%
1,203,107
4,996,599
103,312
102,343
10,812
5,652
1,317,231
5,104,594
1.0%
3.15%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,898
60,685
-
-
60,898
60,685
-
-
-
-
12,484,682
14,603,759
12,484,682
14,603,759
217,293
540,237
217,293
540,237
1,203,107
4,996,599
164,210
163,027
12,712,787
15,149,648
14,080,104
20,309,275
-
-
-
-
-
-
-
-
-
-
-
-
5,362,641
3,548,955
76,080
-
5,362,641
76,080
3,548,955
-
5,438,721
3,548,955
5,438,721
3,548,955
63
89
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2017
Sensitivity analysis
The following table shows the movements in profit due to higher/lower interest costs from variable
interest rate financial instruments in Australia and China.
Consolidated
+ 1% (100 basis points)
-1% (100 basis points)
2017
$
13,172
609
(7,608)
6,173
(1,698)
4,475
2016
$
51,046
607
-
51,653
(14,205)
37,448
2017
$
(13,172)
(609)
7,608
(6,173)
1,398
(4,475)
2016
$
(51,046)
(607)
-
(51,653)
14,205
(37,448)
Cash at bank
Term deposits greater than 90 days
Borrowings
Tax charge of 27.5%
Total
vii.
Foreign currency risk
The Group is exposed to fluctuations in foreign currencies arising from the sale and purchase of
goods and services in currencies other than the Group's measurement currency. The Group
manages this risk through the offset of trade receivables and payables where the majority of trading
is undertaken in either the USD or Chinese Reminbi which is pegged to the USD. Current trading
terms ensure that foreign currency risk is reduced by not trading on terms but cash on delivery.
64
90
Astron Corporation Limited
Declaration by Directors
For The Year Ended 30 June 2017
The Directors of the company declare that:
1. The financial statements, comprising the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of financial position, consolidated statement of cash
flows, consolidated statement of changes in equity, accompanying notes, are in accordance with
International Financial Reporting Standards and give a true and fair view of the consolidated entity’s
financial position as at 30 June 2017 and of its performance for the year ended on that date.
2.
In the Directors’ opinion, there are reasonable grounds to believe that the company 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 and is signed for and on
behalf of the Directors by:
A Brown
Director
G King
Director
29 September 2017
65
91
Level 17, 383 Kent Street
Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
to the Members of Astron Corporation Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Astron Corporation Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30
June 2017, 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:
a
b
gives a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
complies with International Financial Reporting Standards and other authoritative
pronouncements of the International Accounting Standards Board (IASB).
Basis for Opinion
We conducted our audit in accordance with International Financial Reporting 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 independence requirements 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.
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.
66
9292
Material Uncertainty Related to Going Concern
We draw attention to Note 1(w) in the financial statements, which indicates that the Group incurred
a net loss of $2.6m during the year ended 30 June 2017, and had negative cash outflows from
operations of $3.2m and a cash balance of $1.3m. These conditions, along with other matters as
set forth in Note 1(w), indicate the existence of a material uncertainty which may cast significant
doubt about the Group’s ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
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.
In addition to the matter described in the Material Uncertainty Related to Going Concern section,
we have determined the matters described below to be the key audit matters to be communicated
in our report.
Key audit matter
How our audit addressed the key audit matter
Donald Mineral Sands (‘DMS’) Project - Note 17(c)
& Senegal Mineral Sands Project – Note 17(b)
In accordance with IAS 6 Exploration for and
Evaluation of Mineral Resources, the Group is
required to assess at each reporting date if there are
any triggers for impairment which may suggest the
carrying value is in excess of the recoverable value.
The process undertaken by management to assess
whether there are any impairment triggers in each
area of interest involves an element of management
judgement.
At 30 June 2017, the market capitalisation of the
Group was significantly less than the consolidated
net assets, which is a trigger for impairment.
Once impairment indicators trigger an impairment
review, management is required to assess for
impairment in accordance with IAS 36 Impairment of
Assets.
Our procedures included, amongst others:
(cid:120) obtaining the management reconciliation of
capitalised exploration and evaluation expenditure
and agreeing to the general ledger;
(cid:120) obtaining management’s calculation of the
recoverable amount of the projects and comparing
to the methodology as required under IAS 36;
(cid:120) assessing the commercial viability relating to
exploration and evaluation activities including
assessing the fair value less cost of disposal
models prepared in relation to the projects and
performing sensitivity analyses of the key
assumptions in the models;
tracing the ownership of licences to statutory
registers maintained by third parties to determine
whether a right of tenure existed;
(cid:120)
(cid:120) considering the Group’s intention to carry out
significant exploration and evaluation activity in the
relevant exploration areas, including assessing the
Group’s cash flow forecast models;
(cid:120) performing enquiries of management and the
(cid:120)
Directors as to the intentions and strategy of the
Group;
reviewing a paper prepared by management and
challenging and corroborating key assumptions
made by management relating to the recoverability
of the projects;
(cid:120) understanding whether any data exists to suggest
that the carrying value of these exploration and
evaluation assets are unlikely to be recovered
through development or sale;
(cid:120) assessing the ability of the Group to finance any
planned future exploration and evaluation activity;
and
reviewing the appropriateness of the related
disclosures within the financial statements.
(cid:120)
67
9393
Key audit matter
How our audit addressed the key audit matter
Recoverability of land use right receivable - Note
11(a)
In accordance with IAS 39 Financial Instruments:
Recognition and Measurement at the end of each
reporting period individually significant receivables
are required to be assessed for objective evidence of
impairment.
At 30 June 2017 the Group had a land use right
receivable which is outside the terms of payment.
Due to the expected timing of receipt of the balance,
a portion of this has been classified as a non-current
receivable.
This is a key audit matter due to the judgement
required to assess the recoverability of the land use
right receivable.
Our procedures included, amongst others:
(cid:120) meeting with a representative of the debtor and
obtaining verbal confirmation from them of:
(cid:16)
the amount due to the Group at 30 June 2017;
(cid:16) amounts remitted to the Group since 30 June
(cid:16)
2017; and
their intention to pay the remaining balance
including expected timing of the payments;
tracing subsequent receipts of RMB9,000,000 to
post year end bank statements; and
reviewing the appropriateness of the related
disclosures within the financial statements.
(cid:120)
(cid:120)
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 2017, 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 Group are responsible for the preparation of the financial report that gives a
true and fair view in accordance with International Financial Reporting Standards 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.
68
9494
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with the International Financial Reporting Standards will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of this financial report.
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.pdf. This description forms part of our
auditor’s report.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
L M Worsley
Partner - Audit & Assurance
Sydney, 29 September 2017
69
9595
Astron Corporation Limited
Investor Information
2017/2018 Financial Calendar (on or before)
Release of quarterly report
2017 Annual general meeting
Release of quarterly report
Release of half year report
Release of quarterly report
Release of Appendix 4E
31 October 2017
5 December 2017
30 January 2018
27 February 2018
30 April 2018
28 August 2018
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this
report is as follows.
The information is current as at 16 September 2017.
Shareholders’ interests
(a) Distribution of equity securities
The number of shareholders by size of holding in each class of share are:
Range of Units Snapshot
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Rounding
Total
Non CDI holders
1-1,000
1,001-5,000
Total
Unremarkable Parcels
Total holders
117
105
54
111
38
Units
55,466
306,822
426,580
4,094,949
117,592,961
% of
Issued Capital
0.05
0.25
0.35
3.34
96.01
425
122,476,778
100.00
4
1
5
306
2,700
3,006
Minimum $ 500.00 parcel at $0.19 per unit
Minimum
parcel size
2,632
Holders
167
Units
150,866
70
96
Astron Corporation Limited
Investor Information continued
(b) Twenty largest CDI holders
The twenty largest CDI holders are as follows:
Rank Name
1.
2.
3.
4.
5.
P T Arafua Mining Limited
FSC Investment Holdings Ltd
Juhua International Limited
Mr Guodong Gong
Mr Donald Alexander Black
Mr Darrell Vaughan Manton + Mrs Veronica Josephine Manton
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