ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Astron Corporation Limited
ARBN 154 924 553 Incorporated in Hong Kong,
Company Number: 1687414
Annual Report for the Year Ended 30 June 2020
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.
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Contents
Our Global Footprint
Our Guarantees
Our Origin and History
Chairman’s Report
Donald Mineral Sands Project
- Murray Basin
Senegal Mineral Sands Project
- Niafarang
China
Annual Financial Statements
- Auditors Report
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Corporate Governance Statement
121
Mineral Resource Statement
for Astron and its Subsidiaries
142
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Our Global Footprint
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Our Guarantees
We observe the law, our obligations, voluntary
commitments and internal standards
We comply with all laws, regulations and
obligations that are applicable to us, including
internal Astron policies and voluntary
commitments. We ensure our personal and
business interests never interfere with our ability to
make sound, objective decisions.
We value and maintain professionalism
in all of our dealings
We behave in a professional manner that fosters
trust, confidence and goodwill. We are always
respectful and ensure that we do the right thing.
We respect the confidential nature of information
given in good faith to Astron Limited. We always
strive to deliver on our commitments.
We look after our People
Safety comes first because physical and mental
wellbeing are fundamental to a successful
workplace. We’re also committed to building a
diverse workforce and an inclusive workplace
culture.
We recognise our responsibilities
to our stakeholders
We are committed to engaging in constructive
dialogue with our stakeholders to understand
and respond to issues that are important to
our People, customers, investors, suppliers,
government, landowners and the wider
community.
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Our Origin & History
Astron began, as ‘Astron Resources Limited’, in
Sydney in 1985, when it listed on the ASX. Astron
established its zirconium business in China in the
early 1990s, and in 2011 the entity morphed into
Astron Corporation Limited, domiciling in Hong
Kong, and was re-listed on the ASX as Astron
Corporation Limited in 2012.
Astron’s business is sourcing, extracting,
processing and marketing products derived
from the Heavy Mineral Sands suite of minerals,
titanium, zirconium, and some of the rare
earth elements.
Sourcing, extracting: Astron’s 100% owned
HMS orebodies are the Donald and Jackson
deposits in the Murray Basin (North West Victoria,
Australia) and a high-grade coastal HMS deposit
at Niafarang, in the Casamance region of the
Republic of Senegal, in West Africa. These two
deposits are still in the process of preparation
for construction, which is expected to commence
in 2021.
Processing: In the 1990s and 2000’s Astron
established first zircon, then titanium raw
materials processing facilities in an acquired
industrial estate in the city of Yingkou, in Liaoning
Province in China. It has recently also constructed
a titanium preparation plant, and a fine grained
material pelletisation plant there. It intends to use
these facilities to process product from Donald
and Senegal.
Marketing: Also in the 1990s and 2000’s, Astron
built a China wide sales network, initially selling
zircon sand, ground to client specifications to
ceramic manufacturers, then value added zircon
products such as zirconium carbonate and fused
zirconia. Astron also traded extensively in raw
titanium, and producing and selling titanium slag
from that site. Whilst aspects of these activities
were sold off in 2008, the company remains
capable of re-establishing all those activities, and
will do so when product from its own sources is
being processed.
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Chairman’s Report
Dear Shareholder
AUSTRALIA: DONALD MINERAL SANDS
Whilst 2020 will be a year stamped in the memory
of the whole world for aeons to come, critical
changes have also occurred in our year under
review, July 2019 till June 2020.
CORPORATE
In this period, sadly, we lost our founder and the
company’s primary driving force, Alex Brown,
who passed away on 30 November 2019.
Alex launched Astron in 1985 in Sydney as a
mineral materials producer and processor, led
the company into China in the 1990s, started
zirconium importing and supplying to the
China ceramics industry, then its heavy minerals
processing operations in Yingkou, acquired its
world class Donald and Jackson HMS deposits
in 2003, and started the development of our fine
grain treatment processes.
The jewel in our crown continues to be the
Donald-Jackson Heavy Mineral Sands deposit in
Victoria, Australia, where we draw closer to the
commencement of production of raw titanium,
zirconium and rare earth material, at the rate of
up to 615,000 tonnes of heavy mineral
concentrate a year in the first stage, then up to
1m tonnes in stage 2.
As reported last year, test pit was completed
extracting 1,000 tonnes of ore, from which 24t will
be shipped to China for testing and sales kits. The
final planning of all necessary initial production
infrastructure is progressing to completion and
construction commencement. Start-up funding is
still to be sourced, and planning is under way.
Vale Alex Brown, founder of Astron Limited
Property purchased by Donald Mineral Sands in 2019
Whilst Alex will be greatly missed, we have been
fortunate to be able to appoint his very able and
well qualified son Tiger Brown to our Board, and
have every confidence that with the start Alex
gave us the company will continue to grow and
prosper. I also record my gratitude and sympathy
to executive director Mdm Kang Rong for her
stalwart support throughout this stressful period,
as well as her continuing contribution to the
success of our company and we offer condolences
to his family.
LAND PURCHASE AND LAND HOLDINGS
In July 2019 Donald Mineral Sands settled the
purchase of 138ha of land adjoining existing DMS
land holdings via an opportunistic, on-market
transaction. The purchase of this land holding
provides options for development of alternative
power infrastructure adjoining the Mining Licence,
and since it sits with such close proximity to future
mine operations, eliminates the need to mitigate
any noise or dust impacts.
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
The acquisition takes the land currently owned by
Donald Mineral Sands to 1,652ha both on and off
the Mining Licence. All arable land is leased to
local agricultural producers and is dryland cropped
to a rotation of wheat, barley, faba beans, lentils,
and canola.
SENEGAL: NIAFARANG HMS DEPOSIT
The Niafarang mining project has been affected by
the Senegal Government’s measures to deal with
COVID-19, the effect of which has been a delay in
the issue of approvals to proceed.
CHINA: YINGKOU
Final operational adjustments and upgrades were
made to our new mineral separation processing
plant at our Yingkou facilities site. In the second
half of the 2020 financial year, we were able to
achieve stable throughput volumes with our plant,
and were able to produce various forms of high
purity TiO2 feedstock, ready for chlorination.
Furthermore, this plant has been commissioned as
part of our long-term operating strategy, and can
be adapted to process material from the Donald
Mineral Sands project.
This process is part of our rebuild as a major
advanced material product company.
COVID-19 RESPONSE
During the initial stages of the pandemic, we
took steps to minimise the impact of Covid-19
by implementing health and safety procedures as
soon as possible, thereby resuming production,
as well as adequate measures to protect our
global supply chains. Given those steps, we find
ourselves in a position as good as we could have
hoped for.
MARKET CONDITIONS
The current market conditions for heavy minerals
reflect both lower supply and demand due to
scale back and skeletisation of operations during
the COVID pandemic. There are indications
that customers have reduced stock levels to
reduce cash outflows during uncertain business
conditions placing Astron in a strategic position
to capitalise on building market share. Demand
for high grade feedstocks for chloride pigment
plants are expected to strengthen both in China
and internationally as recovery from the pandemic
continues.
Interest in diversifying supply sources of rare earth
(RE) products, used in anything from fighter jets
to MRI machines to wind turbines, has intensified
rapidly globally. Australia is currently the number
two producer of RE, contributing 13% of global
output, but has significant untapped rare earth
potential for the supply of critical minerals.
Australia is seen to be a low sovereign risk, stable
nation for investment, offtake and supply to
global markets. Strong environmental controls
and an emphasis on worker welfare and safety are
attractive to investors and customers who seek
ethical supply chains.
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
OUR TEAM
China
We have over 120 employees in our China Team
in Yingkou and our office in Shenyang, and I would
like to recognise their hard work in keeping our
materials processing and product sales efficiently
performing.
Australia
In Australia we have a small team which I thank
again for their tireless effort in keeping us
advancing towards our goals.
Gerard King
Chairman
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Donald Mineral
Sands Project
MURRAY BASIN
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Donald Mineral Sands Project - Murray Basin
The resultant 24 tonnes of Heavy Mineral
Concentrate (HMC) produced will be utilised for
future test work in Australia, with the balance
shipped to China for stage three of the piloting
program where Mineral Separation Plant (MSP)
separation and process design initiatives will be
developed to complement the current Rutile and
TiO2 separation plant.
STAGE TWO
Mineral Separation Process
Metallurgical Development Test Work
Running concurrently with the Bulk Sample
Piloting, Astron conducted metallurgical test work
confirming MSP concept flow sheet priorities
and demonstrating improved zircon and titanium
recoveries arising from varying equipment
selection; utilising conventional concepts
identified opportunities where a conventional/
hybrid MSP could be further explored in reducing
recirculating loads favouring a one pass separation
outcome and circuit simplification.
PROJECT STATUS
Detailed Engineering and Definition Stage
World Class Zircon rich deposit - The Murray
Basin is an iconic Geological formation which
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 the diversification
of industry and economic growth of our regional
communities.
Work undertaken in the 2020 financial year mainly
focussed on the three-stage piloting program
outlined in last year’s annual report. An update of
each of those facets is below:
STAGE ONE
Bulk Sample Piloting
Astron engaged Mineral Technologies to
undertake Wet Concentrator piloting works
utilising a purpose built 1:121 scale plant
constructed in accordance with the designs of the
WCP compiled during feasibility studies.
The feed preparation process liberated the Heavy
Minerals contained in the Run of Mine (ROM)
sample with minimal loss of mineral to waste
streams; recovery of Valuable Heavy Mineral
(VHM) was maintained at both 85% and 95% HMC
grade respectively. The feed preparation was
selective and aided the removal of oversize +3mm
and slimes at -20µ sizes which was a noticeable
improvement compared with previous bench
scale programs, confirming optimal equipment
selection.
Significantly, recovery data from the Mineral
Technologies Report included:
- Recovery of in-size and in-SG TiO2, ZrO2,
and CeO2 (i.e. -250+20µ +4.04SG fraction) was
calculated to be 96.9%, 97.9% and 98.1%.
- Recovery of total TiO2, ZrO2, and CeO2 to
sand fraction was calculated to be 85.2%,
94.6% and 95.9% relative to ROM ore.
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Microscopy photo: Rare Earths
STAGE THREE
Mineral Separation Process Piloting
This stage has been delayed due to the inability of
staff and consultants to travel internationally in the
wake of COVID-19 restrictions. When restrictions
ease and Astron is assured of the health and
safety of its supervisory team, around 24 tonnes
of HMC will be transported to China, where it
will be assessed and a gap analysis completed to
determine how the HMC characteristics specific
to the Donald HMC perform with the existing
Chinese TiO2 separation plant, after which an MSP
piloting program will be developed and advanced
at Astron’s laboratory and existing operating
facilities. Great confidence was been gained in
the materials processing ability as smaller bench
scale piloting and design concepts have been
successfully completed in the past.
The major difference with the current program
is the size of the sample allowing the ability to
complete a continual flow process pilot program.
plant, after which an MSP piloting program will be
developed and advanced at Astron’s laboratory
and existing operating facilities. There is great
confidence in the material processing ability as
smaller bench scale piloting and design concepts
have been successfully completed in the past.
The major difference with the current program is
the size of the sample and ability to complete a
continual flow process pilot program.
Critical Minerals Floatation Test work
In light of international interest and demand for
diversification of the supply of various critical
minerals found in the Donald deposit, DMS
instigated a froth floatation test work program
to explore the benefits of a hybrid MSP where
those minerals could be extracted during the WCP
process vs the traditional process of floating those
minerals during the MSP process.
The preliminary test work has identified that the
critical minerals floatation could be located at
either the WCP or MSP plant depending on where
demand exists.
During the first stage of this work, a 46kg sample
of HMC was subjected to a series of rare earth
floatation tests on a 2kg scale, where CeO2
recoveries of up to 97% were confirmed and
further works are scheduled and ongoing for the
2021 financial year.
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Production model update
The DMS project model was updated with the
results from earlier piloting works, and will be
further refined once hybrid MSP results are
at hand.
Test pit Rehabilitation
The test pit from which the 1,000t ROM ore
sample was excavated for piloting was closed
in March 2018, and rehabilitation of the site is
progressing well.
Yield rates will be compared to adjacent cropped
areas to determine the levels of success of the
rehabilitation along with comparisons to the full
soil mapping profiles that were undertaken at
adjacent sites.
Full laboratory soil analysis has been undertaken
at the rehabilitation site with favorable results
that will inform the rehabilitation process going
forward.
In 2019, soil mapping was completed using
Echelonag soil mapping technology, which
provided specific information of the soil profile to
1m in depth in regards to:
· Depth to interface – Depth of soil between
Horizon A (top soil) and B (sub soil)
· ECa Coil – Electro Conductivity (salinity) at
various depths
· Relative water content – moisture content of
the soil
· Tillage – soil compaction and hard pan
information, depth to tillage points.
Plough-tip depth.
DMS has a consultant agronomist who monitors
the site conditions and as we continue to assess
seasonal changes and variability, we are confident
that the rehabilitation process is progressing
well with no variations or implication to the soil
structure and appearance. Observations and trial
management practices on the test pit will continue
to inform the overall rehabilitation of the mine site.
Air and Noise monitoring:
AECOM has been appointed to undertake air
and noise modelling utilising the current project
definition, and has been working closely with the
technical team to understand what modifications
will be required to manage any impacts to air
quality and the noise implications, and ensure that
they are understood, minimised and managed
using best practice techniques. This process
will provide detailed information which will be
incorporated in the project optimisation and
detailed engineering phases.
Industry participation:
- MCA - representatives of Astron actively sit at
Victorian State council level, and along with
DMS representation on Industry working groups
(safety and environment working group, mineral
sands working group).
- Critical Minerals - DMS participated in road
mapping development discussions
- Victorian Skills Commissioner - participatin
in an Industry Action Group developing a
mining specific entry level skills package
Electro Conductivity (salinity) of test pit site at
a depth of 0.7m
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Conceptual Water Recovery Plant
The year ahead:
Astron is proposing to pursue the following
actions during the current company year:
• Commence execution and development of
the DMS owners’ team - engineering, planning,
project management
• Update Ore Reserve statement to incorporate
learnings and updated Mineral Resource
• Further refinement of Production and Financial
Models
• Finalise all logistic movements and review
current transport management plans
• Update risk profile and further refine risk
strategy and risk register
• Exploration on EL5186 to identify other areas of
interest and define current ore body boundaries
• Commence final review of the detailed
engineering scope and optimisation processes
• Execute and ramp up community & stakeholder
engagement programs
• Compile final PEP (project execution plan)
• Define and lock down design criterion and
financing strategies
• Commence infrastructure agreements including
water access and power supplies including
renewable sources
• Commence long lead item procurement
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Senegal Mineral
Sands Project
NIAFARANG
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Senegal Mineral Sands Project - Niafarang
ENVIRONMENTAL, SOCIAL
AND OTHER ASPECTS
Site management plans have been developed in
accordance with the Senegalese environmental
licencing requirements. Hydrocarbon storage
plans, water management plans, and
environmental rehabilitation plans have all
been developed.
Opportunities for shared resources, employment,
improved farming initiatives, local worship
buildings and basic health improvement (fresh
water, proper latrine systems) have been offered
by Astron / SMR to assist the local communities to
co-exist with SMRs low impact mining operation.
These initiatives have been welcomed by many of
the local communities although there remain some
elements (including settled foreigners in the local
region) which are against these initiatives. OSMR
has not explored nor entertained these elements
as it remains committed to dealing with the local
communities and their representatives.
Astron / SMR funded a local ceremony in
maintaining and educating people on the region’s
culture, Astron believes in maintaining strong
connections with culture and supporting the
educational programs offered to the young people
is an important program to support.
SMR funded several local initiatives including a
field trip consisting of a local group of community
leaders who were flown to visit to another
operating Mineral Sands dredging operation in
northern Senegal.
The Niafarang Project progressed significantly with
respect to Astron’s presence in the country. During
this period, Astron maintained its local presence
and representation through senior team site
visits, including in-country representation through
Astron’s consultancy and visible working groups.
Several infrastructure contracts were awarded in
the previous reporting period. These works are
currently awaiting the acceptance and detailed
collaborative access structure where the projects
will benefit both Astron’s Senegalese subsidiary,
Senegal Mineral Resources (SMR) and the local
villages. The sharing of resources (water, power,
roads, latrines) is a key part of the community
development and social enterprise opportunities
for many within the project area. Great effort
and collaboration have been achieved over the
previous twelve months where certain progress in
meeting the expectations of the local Senegalese
people has been achieved.
SMR has several execution and site development
plans to complete once the resettlement program
has been completed. To date, there has been
little traction afforded to the execution planning
because of slow outcomes from regulators and
officers. SMR is positioned well in establishing
the necessary construction programs upon the
commencement of the resettlement program.
Project development and construction teams are
available for an immediate start upon achievement
of the final milestone; the resettling and
compensation process.
Astron expects all local initiatives to be completed
for project start in late 2020, and thereafter
commencement phases predominantly hinge on a
stable community where safety for all stakeholders
involved remains the highest priority.
Commencement dates for each phase of the
construction process will be announced once there
is certainty. Employment and Contract scopes
are finalized and will be revisited prior to site
commencement.
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
SMR shall maintain an important network and
support program in co-exiting and developing
initiatives with the wider communities throughout
Casamance and beyond.
New drilling programs and exploration will
be announced in due course, following the
commencement of the Niafarang project.
ASTRON’S LONG TERM FUTURE
IN WEST AFRICA
Alternate and additional exploration opportunities
are available for exploring locally and beyond the
current mining licence area of Niafarang. Astron
/ SMR is excited to be a part of the greater area
where local authorities and communities are open
to negotiating access and development program
initiatives with the SMR team.
Further expansion of Astron’s presence in West
Africa has been a long process where persistence
and collaborative efforts in working with the local
communities is proving to be a successful process.
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
China – Rebuild of Advance Materials
and Manufacturing base in China
THE REBUILD
Astron Corporation has spent the 2020 financial
year rebuilding our market presence and
capabilities in China.
In our multi-step approach to re-establish a
foot-hold in China’s Titanium industry:
1. We successfully commissioned the mineral
separation processing plant to process up
to 150,000tpa of Ilmenite material for use as
a high-quality feedstock for chlorination
markets with TiO2 production plants in China.
warehouse and 10,000m2 hardstand for the
storage of our raw materials and products;
2. We are in the final stages in commissioning our
micro-agglomeration plant in Yingkou,
Liaoning, with an expected monthly production
volume of 3,000 tonnes of high-grade
chlorinator feed-stock;
3. We will continue to upgrade and develop
our testing and R&D facilities at our Chinese
operations to increase product quality and
better adapt our products to the
customers’ needs;
Year in Review
As the companies’ operating arm, Chinese
operations were significantly disrupted by
Covid-19. Throughout the 2020 Financial year,
we continuously improved our separation plant’s
operations. In comparison to 2019, we achieved
increases in tonnes processed, Ti% Recovery
and overall operations efficiency in our Mineral
Separation Plant. Given those improvements, we
saw an increase in year on year sales revenue of
5.7% despite the challenges created by Covid-19.
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BEING A PART OF THE FUTURE
We anticipate to be part of the growth of the TiO2
pigment chlorination industry in China, as major
players work to decrease their carbon footprint
and demand from down-stream customers
continue to increase. It is anticipated that the
chlorination process capacity will triple on current
levels within the next five years. This should see
demands for suitable high purity feedstocks
continue to increase in the 2021 Financial year,
Astron is well-positioned to take advantage,
especially once the micro-agglomeration plant is
fully commissioned.
To date, Astron has been using our own TiO2
feedstock, however, given its feasibility and our
anticipated processing excess capabilities, we
are looking for alternative feed-stocks supplies.
We believe that we represent a significant
value-add opportunity for our partners in the
industry assisting with the desires of increased
sustainability and recoveries. Ultimately, we
intend to use our Yingkou processing plant to
process TiO2 feedstock from our Donald project in
Victoria, Australia.
ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
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.
The Astron development team has completed in
house laboratory, bench and small-scale piloting
programs for micro-agglomeration of finer TiO2
particles and successful trials have allowed the
installation of a purpose built pelletisation process
which adds value to the current suite of products
currently produced.
The pelletisation process has been designed to
produce various end products (Hardness, Size)
which allows the plant to produce specialized
products suited to specific customer’s process plant
requirements.
Astron’s global operations are expected to become
the major feed stock suppliers for Astron China’s
growing demand for high quality products.
Future advancements in ZrO2, TiO2, CeO2, and
Rare Earth Oxides are just the beginning of Astron’s
Global future.
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
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 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 colour, 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
the nuclear industry.
Titanium micro-agglomeration 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 developing high
value and grade Chlorinator feed with finer sized
material. With chlorination, the particle size of the
rutile products being processed in this method
enables better chlorination efficiencies than
common rutile and blended slag materials.
CP TiO2 Technology
Astron spent 3 years and more than several tens of
million RMB 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.
Astron’s sustainable development encompasses
our commitment and policy towards our
employees, local communities, health and safety,
and the environment.
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Sustainable Development
EMPLOYEES AND OTHER STAKEHOLDERS
We take our responsibility to our 135 strong staff
seriously through our human resources policies
which demonstrate care and concern for our staff
and their training, development and wellbeing,
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 in alignment with individual and
team objectives.
LOCAL COMMUNITIES
Astron is committed to bringing positive change
to the communities surrounding its mining and
processing operations.
Astron’s Donald Project has been planned in close
engagement with the local community to provide
economic and social benefits to the community,
including supporting the Minyip branch of the
State Emergency Service, who provide critical local
assistance to minimise the impact of emergencies
and strengthen the community’s capacity to plan,
respond and recover when emergencies occur.
Astron has also sponsored the Minyip Art Show,
the Minyip Golf Club, as well as the Donald
Scout group’s Muddy Duck event. In addition,
sponsorship of the Minyip Murtoa Football Club’s
“Buddy Program” saw senior football players
mentor the skills of juniors over three nights
throughout the playing season, building the skills,
confidence and fitness of developing footballers.
sponsorship of the Minyip Murtoa Football Club’s
“Buddy Program” saw senior football players
mentor the skills of juniors over three nights
throughout the playing season, building the skills,
confidence and fitness of developing footballers.
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
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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ASTRON CORPORATION LIMITED ANNUAL REPORT 2020
Astron Corporation Limited
ARBN 154 924 553
Incorporated in Hong Kong,
Company Number: 1687414
Annual Financial
Statements
For the Year Ended 30 June 2020
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Astron Corporation Limited
Company Number: 1687414
For the Year Ended 30 June 2020
CONTENTS
Financial Statements
Directors’ Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Profit or Loss and Other Comprehensive Income (continued)
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position (continued)
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Declaration by Directors
Independent Auditor’s Report
Investor Information
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Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
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 2020.
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
Mdm. Kang Rong
Mr. Tiger Brown (Appointed on 4 December 2019)
Mr. Alexander Brown (Deceased on 30 November 2019)
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 were no significant changes to the Group structure in the financial year ended 30 June 2020.
Financial Position
The net assets of the Group have decreased to $93,725,284 a decrease of $6,548,697 from 2019.
The net assets have been affected by an increased loss from operations.
Dividends
No final dividend was proposed for the year ended 30 June 2020 (2019: Nil).
1
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
Review of Operations
Financials
Consolidated Statement of Profit or Loss and other Comprehensive Income
Sales revenue increased over the prior year by 5.7% to $8,430,039 from 2019: $7,977,198. This was due
to the increase in sales activity in the Chinese markets compared with the prior years.
Turnover should continue to improve in line with the market increase in mineral sands market prices in
China. Gross margins reflected the ongoing development of the mineral separation plant, agglomeration
plant, and as a result the materials produced. The importation and productions costs were also adversely
impacted importation tariffs imposed on imports between China (which increased from 0% to 10% and then
25%) resulting in an additional $1,159,000 in tariff costs, additional transportation and storage costs and
also by Covid 19. It is anticipated margins will also increase in the year ending 30 June 2021.
Administration expenditure was broadly consistent with the prior year reflecting ongoing cost controls.
Consolidated Statement of Financial Position
The increase in inventories should allow the Group to capitalise on the strengthening of the mineral sands
markets in China and Astron’s development of the products to be sold which is anticipated to increase
during the 2021 financial year as the mineral separation plant and agglomeration plant is optimised.
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 net tangible asset value from 18.8 cps at 30 June 2019 to 12.4 cps at 30 June 2020
primarily relates to the group loss for the year and the capitalisation of exploration and development costs.
Operations review
Donald
The advancement of the Donald project (“DMS”) continued during the year.
In conjunction with external resource consultants Mineral Technologies a 1,000t run of mine wet concentrator
pilot plant and associated test work was completed on ore material previously excavated from the DMS test pit
site.
The pilot plant successfully proved separation and provided valuable guidance into opportunities for new design
criteria, resulting in increased recovery and grade outcomes.
As a direct result of the pilot plant test and additional external test work the project has increased its viability
through additional materials extraction, improved recovery and grade of the in ground HMC at Donald.
2
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
The project risk assessments are ongoing and being incorporated into the projects valuation models. Donald
has undertaken regular Government liaison and introductions continue with development agencies and approval
departments.
Updating the DMS financial project and operating models will be carried out in late 2020 to reflect the
improvements with an expected increase in infrastructure capital and therefore achieving a reduced operating
cost outcome and incorporating a planned resource update. The previous models were significantly positive and
DMS believes this will be improved upon with the work completed in 2020 and global demand positive outcomes
on final product pricing. Optimisation processes will be completed ahead of the official detailed engineering
commencement.
The project remains viable under the current climate and global product demand.
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 by way of several local construction contracts and
managed by a single integrated owners and project teams. These programmed actions will be reassessed with
consideration to the renewed infrastructure methodology and pilot process outcomes.
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
Approved
Work plan test pit
Approved
Work Authority test pit
Infrastructure Assessment
Date
2008
August 2010
January 2014
2012
Renewed December 2019
December 2019
March 2018
August 2018
Road infrastructure remains solid with the design and supply opportunities unchanged. The power opportunities
will be further assessed with assistance of the regional development agencies for alternate methods and / or a
combination of both mains power and renewable hybrid systems shall be considered. Funding opportunities
continue to be investigated as the project financing and detailed engineering draws closer. These will be further
explored as the business modelling is completed in accordance with the government agencies as mentioned
above. Power options studies were completed through a third party consultancy firm and these options are
currently being considered.
In relation to the water pipeline, hydraulic assessments and pipeline engineering designs were completed in
2016. The piping system design catered for full scale operations with capacities for future expansions.
Discussions with local water network providers and the Regional Development Group of Victoria commenced in
2018 with detailed system reviews to ensure initial and future project needs will be met. This is an ongoing
exercise in 2021.
3
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
Exploration Improvement
Updating the current JORC code is planned in early 2021 to conform with the 2012 JORC code and improve on
the - 38 micron fraction within the contained minable HM%.
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 Work Plan 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 develop its funding strategy which could include a mix of equity, internally generated cash
flows and debt funding. Astron continues to work with entities interested in assisting with this project.
China
TiO2 Processing plant
Astron commissioned its TiO2 processing plant in Yingkou, China. The plant is producing rutile from the
Savannah Ore. The processing has now been upgraded to add the agglomeration plant to increase recoveries.
The Group is well placed to monetise its inventories with the upgraded plant and continued strengthening of the
mineral sands market in China.
Senegal
Exploration
No additional exploration field activities have occurred in the year. Application, renewal applications and studies
have been undertaken by Astron’s consultant in Senegal (Harmony group) to re-establish approvals for expired
exploration leases. The current exploration licence remains in a maintenance position where Astron has the
right to apply for drilling exploration and planning which will see the licence reactivated for explorative purposes.
The exploration renewal process has commenced and awaiting the mines department review on the overall area
and associated graticules.
Mining Licence
Mining Licence was awarded to the Group in June 2018.
In Senegal Astron has an operational readiness – procedures are in place, approvals for recruitment, contract
commencement is slowly progressing under the current pandemic circumstances. Capital equipment is in place
in Dakar, local representation remains in place and the detailed mine design ready to implement.
The Senegal Government continues to move slowly in considering final approvals for the community
resettlement program. Discussions continue in the development of the community relocation plan with local and
federal governments.
4
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
Covid 19 has had a noticeable impact in developing community engagement process and government support
processes also impacting the development.
Overall project viability continues to increase in line with the global market demand for the final products of
Rutile and Zircon.
America
Astron commenced the excavation and loading processes of Ilmenite Ore in Savannah USA. The process and
purchases are via a Bill of Sales (BOS) Agreement and locally (USA) and Australian developed Standard
Operations Procedure (SOP) for the shipping and loading functions in Savannah to Georgia and then on to
Dalian in China. In the first instance, this material is being used as feedstock for the processing plant that has
been commissioned to develop a suite of Ti0շ products including several grades of rutile for its customers and
is an important step in moving towards Astron re-establishing its advanced materials capabilities in China.
Other mineral sands opportunities in the USA for processing and sale in China are under investigation and
review.
Covid 19
Astron prioritises the safety and health of all staff while also keeping a very clear focus on how we continue to
support our business operations during this unprecedented period. The safety and wellbeing include Astron’s
consultancy members conducting global business activities on behalf of Astron.
We have been following very closely the official public health advice from Federal and State Governments. For
the immediate future, the following mitigation and best practice methods have been implemented. Astron
implemented distancing, work from home options and suspended all international travel.
While the pandemic impacted potential drilling in Donald, it did not directly impact the supply of materials from
the Savannah operations and while there were operational challenges in China, production interruption was not
as significant as anticipated, however product deliveries were reduced in compliance with strict Chinese
protocols.
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 2020, $1,495,660 (2019: $2,962,631) was due to the Group from the 2015 sale of surplus land in
China. Subsequent to year end, $0.4 million has been received against this receivable.
The Group has funding options available to provide support for the completion of the Mineral Separation Plant
upgrades and other asset acquisition. These funding options could be a mix of third parties or Director support
and will be pursued if required. Subsequent to year end no further loan facilities have been required.
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.
5
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
Likely Developments
During the next financial year, the Group expects to:
-
-
-
Complete the Chinese mineral separation plant and agglomeration optimization,
Continue progressing the Senegal project and working towards project commissioning; and
Upgrade the Donald Mineral Sands definitive feasibility study, complete additional infill drilling, advance
capex optimisation resulting from the pilot tests and develop funding alternatives.
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.
When final approvals are received with respect to the Senegalese Niafarang project and it commences into
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.
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 are no outstanding exceptions as 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.
6
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
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 #
49,138 CDIs
Special Responsibilities
Mr. King is the Chairman of the Board and the Chairman of the
Remuneration & Nomination Committee
Directorships held in other listed
entities
Mr. King is not currently a Director of another listed company.
Mdm. Kang Rong
Chief Executive Officer and 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.
- Mdm Kang Rong 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 #
4,000,100 CDIs
Special Responsibilities
As Chief Executive Officer and 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.
7
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
Mr. Tiger Brown
Qualifications
Experience
Executive Director
B. S. (Economics)
- Board member since 4 December 2019
- Mr Brown has worked in Astron’s business for a number of years
in China and Australia
- Mr Brown has studied business finance at Wharton School of
Business at the University of Pennsylvania.
Interest in Shares #
94,165,972 CDIs
Special Responsibilities
Executive Director in charge of Global operations and finance
Directorships held in other listed
entities
Mr Brown is not currently a Director of another listed company.
# Interest in Shares includes directly, indirectly, beneficially or potentially beneficially held shares.
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
Mr. Tiger Brown
Share Options
Directors' Meetings
Number
Number
attended
eligible to
attend
4
-
4
4
4
-
4
4
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.
8
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
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.
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.
9
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
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.
Discretionary bonuses of $Nil (2019: $Nil) were paid during the year. There is a potential discretionary bonus
available to Mr Tim Chase of up to $50,000. There are no other bonus arrangements entered into with KMP’s.
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 sales 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.
Sales revenue (‘000)
Net Profit/(Loss) (‘000)
Share Price at Year-end
Dividends Paid (‘000)
2016
$
468
(4,408)
0.17
-
2017
$
1,900
(2,591)
0.16
-
2018
$
5,014
(4,671)
0.20
-
2019
$
7,977
(1,913)
0.20
-
2020
$
8,430
(6,293)
0.17
-
KMP
The following persons were KMP of the Group during the financial year:
Mr. Gerard King
Mr. Alexander Brown
Mdm Kang Rong
Mr. Tiger Brown
Mr. Tim Chase
Mr. Joshua Theunissen
Position Held
Chairman-Non-executive
President (Deceased)
Chief Operating Officer and Deputy Managing Director (Executive)
Executive Director
Project Executive
Australian Company Secretary
10
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
Shareholdings
Details of equity instruments (other than options and rights) held directly, indirectly, beneficially or
potentially beneficially by KMP and their related parties are as follows:
30 June 2020
KMP
Mr. Gerard King
Mr. Alexander Brown
Mdm Kang Rong
Mr. Tiger Brown
Mr. Tim Chase
Mr. Joshua Theunissen
Total
Details of Remuneration
Balance
1/07/2019
Shares (sold)
/purchased
Shares
transferred
Balance
30/06/2020
49,138
94,183,224
4,000,100
-
-
100
98,232,562
-
-
-
-
-
-
-
-
(94,165,972)
-
94,165,972
-
-
-
49,138
17,252
4,000,100
94,165,972
-
100
98,232,562
Details of compensation by key management personnel of Astron Corporation Limited Group are set out
below:
Year ended 30 June 2020
Short term benefits
Post-
employment
benefits
Cash, fees
salary &
commissions
$
Non-cash
Benefits/
Other
$
Termination
Payments
$
Superannuation
$
Total
$
% of
remuneration
that is
performance
based
120,000
104,167
250,000
-
240,000
54,353
768,520
-
-
-
-
9,672
-
9,672
-
-
-
-
-
-
-
-
-
-
-
120,000
104,167
250,000
-
20,531
270,203
-
54,353
20,531
798,723
0%
0%
0%
0%
0%
0%
Directors
Mr. Gerard King
Mr. Alexander Brown (#1)
Mdm Kang Rong (#1)
Mr Tiger Brown
Other KMP
Mr. Tim Chase
Mr. Joshua Theunissen (#1)
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 KMP.
11
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
Share Based Payments
No share-based payments were made during the year ended 30 June 2020 or 30 June 2019.
Voting and comments at the Company’s 2019 Annual General Meeting
The Company received 99.89% of “yes” votes on its remuneration report for the 2019 financial year.
The Company did not receive any specific feedback at the AGM on its remuneration report.
Year ended 30 June 2019
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
255,960
55,500
921,049
-
-
-
9,270
-
9,270
-
-
-
-
-
-
10,411
120,000
-
-
250,000
250,000
21,545
286,775
-
55,500
31,956
962,275
0%
0%
0%
0%
0%
Directors
Mr. Gerard King
Mr. Alexander Brown (#1)
Mdm Kang Rong (#1)
Other KMP
Mr. Tim Chase
Mr. Joshua Theunissen (#1)
Note reference #:
1.
Paid or payable to management company
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
amounts of remuneration applicable on their initial appointment, including terms, other than 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.
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 2020.
END OF REMUNERATION REPORT
12
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
Indemnifying Officers or Auditor
Insurance premiums paid for Directors
During the year, Astron Limited paid a premium of $50,798 (2019: $35,802) in respect of a contract
indemnifying 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, BDO
Limited, or their related practices:
Other Services
Taxation services
Other assurance services
2020
$
-
-
2019
$
8,178
-
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 Hong Kong Institute of Certified Public
Accountants (“HKICPA”) 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 HKICPA.
Auditors’ Independence Declaration
The lead auditors’ independence declaration for the year ended 30 June 2020 has been received and can
be found on page 15 of the financial report.
Directors’ declaration regarding HKFRS compliance statement
The Directors’ declare that these annual financial statements have been prepared in compliance with Hong
Kong Financial Reporting Standards.
13
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2020
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:
Mdm Kang Rong
Dated this 30 September 2020
Mr. Gerard King
14
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For The Year Ended 30 June 2020
Sales revenue
Cost of sales
Gross profit
Interest income
Other income
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Reversal of provision for impairment on receivables
Fair value loss on financial assets at fair value through profit or loss
Costs associated with Gambian litigation
Finance costs
Other expenses
Loss before income tax expense
Income tax (expense)/benefit
Net loss for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
(Decrease)/Increase 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
6
6
7
2020
$
8,430,039
(8,258,584)
171,455
2,159
344,246
(583,907)
(218,110)
(48,479)
2019
$
7,977,198
(4,481,514)
3,495,684
15,625
217,225
(382,096)
(79,177)
(87,586)
(4,448,707)
(4,333,108)
469,657
(5,044)
(136,006)
(1,651,551)
(100,416)
(6,204,703)
(88,117)
(6,292,820)
411,395
(23,794)
(65,625)
(1,275,210)
(165,245)
(2,271,912)
358,950
(1,912,962)
(255,877)
(255,877)
(6,548,697)
2,944,129
2,944,129
1,031,167
(6,292,820)
(1,912,962)
Owners of Astron Corporation Limited
(6,548,697)
1,031,167
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
16
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Profit or Loss and Other Comprehensive Income (continued)
For The Year Ended 30 June 2020
LOSS PER SHARE
Loss per share (cents per share)
Diluted loss per share (cents per share)
Note
8
2020
Cents
2019
Cents
(5.14)
(5.14)
(1.56)
(1.56)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
17
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Financial Position
As at 30 June 2020
ASSETS
Current assets
Cash and cash equivalents
Term deposits greater than 90-days
Trade and other receivables
Inventories
Financial assets at fair value through profit or loss
Available-for-sale financial assets
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Exploration and evaluation assets
Development costs
Right-of-use assets
Land use rights
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Long-term provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
2
Note
10
10.3
11
12
14
11
16
17
18
19
19
20
21
22
23
24
23
2020
$
2019
$
555,504
46,112
11,039,026
9,930,340
20,322
1,687,549
46,112
9,820,565
7,348,837
25,366
21,591,304
18,928,429
-
2,077,163
26,648,011
70,297,773
8,205,625
2,983,286
26,220,427
69,400,384
7,804,124
-
-
3,090,641
108,134,695
108,592,739
129,725,999
127,521,168
13,125,453
5,106,984
10,917,671
116,901
9,639,406
4,363,126
7,133,146
95,642
29,267,009
21,231,320
5,941,198
792,508
5,229,611
786,256
6,733,706
6,015,867
36,000,715
27,247,187
93,725,284
100,273,981
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
18
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Financial Position (continued)
As at 30 June 2020
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL EQUITY
Note
25
26
2020
$
2019
$
76,549,865
14,257,151
76,549,865
14,513,028
2,918,268
9,211,088
93,725,284
100,273,981
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
read in conjunction with the accompanying notes.
Mdm Kang Rong
Mr. Gerard King
19
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Changes in Equity
For The Year Ended 30 June 2020
Year Ended 30 June 2020
Equity as at 1 July 2019
Loss for the year
Other comprehensive income
Exchange differences on
translation of foreign operations
Total comprehensive income for
the year
Issued
capital
$
Retained
earnings
$
Share
based
payment
reserve
$
Foreign
currency
translation
reserve
$
Total
equity
$
76,549,865
9,211,088
913,104
13,599,924
100,273,981
-
-
-
(6,292,820)
-
(6,292,820)
-
-
-
-
(6,292,820)
(255,877)
(255,877)
(255,877)
(6,548,697)
Equity as at 30 June 2020
76,549,865
2,918,268
913,104
13,344,047
93,725,284
Year Ended 30 June 2019
Equity as at 1 July 2018
Initial application of HKFRS 9
Restated balance as at 1 July
2018
Loss for the year
Other comprehensive income
Exchange differences on
translation of foreign operations
Total comprehensive income for
the year
Equity as at 30 June 2019
Issued
capital
$
Retained
earnings
$
Share
based
payment
reserve
$
Foreign
currency
translation
reserve
$
Total
equity
$
76,549,865
11,689,667
913,104
10,655,795
99,808,431
-
(565,617)
-
-
(565,617)
76,549,865
11,124,050
913,104
10,655,795
99,242,814
-
-
-
(1,912,962)
-
(1,912,962)
-
-
-
-
(1,912,962)
2,944,129
2,944,129
2,944,129
1,031,167
76,549,865
9,211,088
913,104
13,599,924
100,273,981
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
20
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Cash Flows
For The Year Ended 30 June 2020
Cash flows from operating activities:
Receipts from customers
Payments to suppliers and employees
Net cash outflow from operations
Refundable Australian R&D tax offsets received
Note
2020
$
2019
$
10,136,280
7,915,476
(12,112,055)
(15,055,938)
(1,975,775)
(7,140,462)
623,470
415,145
Net cash outflow from operating activities
31.1
(1,352,305)
(6,725,317)
Cash flows from investing activities:
Proceeds in short term deposits
Receipts from partial settlement of land receivable
Acquisition of property, plant and equipment
Capitalised exploration and evaluation expenditure
Net cash outflow from investing activities
Cash flows from financing activities:
Interest received
Interest paid
Partial settlement of offtake agreement
Repayment of borrowings
Proceeds from borrowings
Net cash inflow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Net foreign exchange differences
-
15,000
1,483,981
(2,123,232)
(1,831,166)
3,688,765
(4,390,335)
(3,385,602)
(2,470,417)
(4,072,172)
2,160
(631,177)
(205,753)
(8,187,404)
12,034,612
15,625
(207,630)
-
-
6,797,319
31.4
3,012,438
6,605,314
(810,284)
(4,192,175)
1,687,549
(321,761)
555,504
3,167,548
2,712,176
1,687,549
Cash and cash equivalents at end of the year
31.2
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
21
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
1. Corporate Information
The consolidated financial statements of Astron Corporation Limited for the year ended 30 June 2020
were authorised for issue in accordance with a resolution of the Directors on 30 September 2020 and
relate to the consolidated entity consisting of Astron Corporation Limited (“the Company”) and its
subsidiaries (collectively “the Group”).
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
(“ASX”).
2. Summary of Significant Accounting Policies
2.1 Basis of Preparation
The financial statements have been prepared in accordance with Hong Kong Financial Reporting
Standards and Interpretations (hereinafter collectively referred to as the (“HKFRS”) issued by the
Hong Kong Institute of Certified Public Accountants (“HKICPA”) and the provisions of the Hong Kong
Companies Ordinance which concern the preparation of financial statements.
The financial statements have also been prepared on a historical cost basis, except for certain
financial instruments which are measured at fair value as explained in the accounting policies set out
below.
Going Concern
As at 30 June 2020, the Group had a deficit of current assets over current liabilities of $7,675,705
(2019: $2,302,891) and the Group incurred net loss after tax and had net cash outflow from operating
activities of $6,292,820 and $1,352,305 respectively for the current year and $1,912,962 and
$6,725,317 respectively for the previous year. These conditions along with the other matters set out
below indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability
to continue as a going concern. The consolidated financial statements have 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 based on a cash flow forecast covering 18 months from the end of the reporting period with the
consideration the plans and measures stated below, the business is a going concern as the short-
term needs of the Group to meet its ongoing operating costs and committed project expenditure are
forecast to be covered by the existing resources on hand for at least the next 12 months from the
date of this report (the “forecast period”).
The Group is confident it will have sufficient funds to meet its ongoing needs for at least the next
twelve months from the date of this report based on the following:
The Group expects its operating mineral separation plant, situated in Yingkou, the PRC is able
to reach its ideal capacity during the forecast period. Further the development of the
agglomeration process should translate into additional higher value sales being derived. The
Group projects the processing of feedstock will bring about substantial increase in sales and net
cash inflow, as the quantity produced and sold are expected to be significantly higher than that
achieved in the current year and a stable gross margin is expected to be maintained. The Group
is also confident that it can transition sales of this product to its existing rutile customer (trading)
base and expand its market share in the PRC market.
22
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.1 Basis of Preparation (continued)
The Group expects to receive the gross balance of the sale of land receivable of approximately
$1.5 million (note 11.1) outstanding at 30 June 2020, in the next twelve months. Subsequent to
year end, the Group received approximately $0.4 million of this balance.
The Senegal project has faced delays in proceeding to operational status. This has delayed the
expected commencement of production. This delay could potentially have an impact on the
Group’s obligations to a major customer (“Wensheng”) for the offtake of Senegal project. As
explained in note 21(a), Wensheng placed a deposit of RMB20 million (approximately $4.1
million) to secure its position as the primary customer of the offtake. The Group has been in
discussions with Wensheng regarding the late delivery of product, penalties thereon and any
demand for repayment of the deposit and is confident such negotiations will not significantly
affect the Group’s operating cash flows in the forecast period. As at 30 June 2020, the balance
decreased to $3.9 million.
The Group is confident the PRC market for mineral sands and the trading of mineral sands will
further develop with increasing demand over the forecast period.
The undertakings by two of the directors not to demand repayments due to them and their
related entities of approximately $9.0 million until such time when the Group has available funds
and is generating positive operating cash flows (refer note 29.6).
The Group has unused loan facilities of $1.4 million (refer to note 31.3) and is in negotiation with
a PRC bank for a credit of approximately $6 million and are confident these discussions with be
successful.
These consolidated financial statements do not include any adjustments relating to the recoverability
and classification of recorded asset amounts or to the amounts and classification of liabilities that
might be necessary should the Group not continue as a going concern.
The following significant accounting policies have been adopted in the preparation and presentation
of the financial statements.
2.2 Basis of Consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries
as of 30 June 2020. The Parent controls a subsidiary if it is exposed, or has rights, to variable returns
from its involvement with the subsidiary and has the ability to affect those returns through its power
over the subsidiary.
All transactions and balances between Group companies are eliminated on consolidation, including
unrealised gains and losses on transactions between Group companies. Where unrealised losses
on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for
impairment from a group perspective. Amounts reported in the financial statements of subsidiaries
have been adjusted where necessary to ensure consistency with the accounting policies adopted by
the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the
year are recognised from the effective date of acquisition, or up to the effective date of disposal, as
applicable.
23
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.3 Foreign Currency Translation
The functional and presentation currency of the Company and its Australian subsidiaries is Australian
dollars (“$”).
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 (“RMB”). The
assets and liabilities of these overseas subsidiaries are translated into the presentation currency of
the Company 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.
2.4 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 contracts with customers is recognised when control of goods or services is
transferred to the customers at an amount that reflects the consideration to which the Group expects
to be entitled in exchange for those goods or services, excluding those amounts collected on behalf
of third parties. Revenue excludes value added tax or other sales taxes and is after deduction of any
trade discounts.
Depending on the terms of the contract and the laws that apply to the contract, control of the goods
or service may be transferred over time or at a point in time. Control of the goods or service is
transferred over time if the Group’s performance:
-
-
-
provides all of the benefits received and consumed simultaneously by the customer;
creates or enhances an asset that the customer controls as the Group performs; or
does not create an asset with an alternative use to the Group and the Group has an enforceable
right to payment for performance completed to date.
If control of the goods or services transfers over time, revenue is recognised over the period of the
contract by reference to the progress towards complete satisfaction of that performance obligation.
Otherwise, revenue is recognised at a point in time when the customer obtains control of the goods
or service.
24
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.4 Revenue Recognition (continued)
Sale of goods (continued)
When the contract contains a financing component which provides the customer a significant benefit
of financing the transfer of goods or services to the customer for more than one year, revenue is
measured at the present value of the amounts receivable, discounted using the discount rate that
would be reflected in a separate financing transaction between the Group and the customer at
contract inception. Where the contract contains a financing component which provides a significant
financing benefit to the Group, revenue recognised under that contract includes the interest expense
accreted on the contract liability under the effective interest method. For contracts where the period
between the payment and the transfer of the promised goods or services is one year or less, the
transaction price is not adjusted for the effects of a significant financing component, using the
practical expedient in HKFRS 15.
Revenue from sale of products is recognised when the relevant goods are delivered and the contract
was pass to customer and transferred point in time. There is only one performance obligation.
Interest income
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.
25
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.5 Income Tax
The income tax expense for the year is the tax payable on the current year'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.
26
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.6 Financial Instruments
(i) Financial assets
A financial asset (unless it is a trade receivable without a significant financing component) is initially
measured at fair value plus, for an item not at fair value through profit or loss (“FVTPL”), transaction
costs that are directly attributable to its acquisition or issue. A trade receivable without a significant
financing component is initially measured at the transaction price.
All regular way purchases and sales of financial assets are recognised on the trade date, that is,
the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are
purchases or sales of financial assets that require delivery of assets within the period generally
established by regulation or convention in the market place.
Equity instruments
On initial recognition of an equity investment that is not held for trading, the Group could irrevocably
elect to present subsequent changes in the investment’s fair value in other comprehensive income.
This election is made on an investment-by-investment basis. Equity investments at fair value
through other comprehensive income are measured at fair value. Dividend income are recognised
in profit or loss unless the dividend income clearly represents a recovery of part of the cost of the
investments. Other net gains and losses are recognised in other comprehensive income and are
not reclassified to profit or loss. All other equity instruments are classified as FVTPL, whereby
changes in fair value, dividends and interest income are recognised in profit or loss.
(ii)
Impairment loss on financial assets
The Group recognises loss allowances for expected credit loss (“ECL”) on trade receivables, other
receivables, and other financial assets measured at amortised cost. The ECLs are measured on
either of the following bases: (1) 12 months ECLs: these are the ECLs that result from possible
default events within the 12 months after the reporting date: and (2) lifetime ECLs: these are ECLs
that result from all possible default events over the expected life of a financial instrument. The
maximum period considered when estimating ECLs is the maximum contractual period over which
the Group is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the
difference between all contractual cash flows that are due to the Group in accordance with the
contract and all the cash flows that the Group expects to receive. The shortfall is then discounted
at an approximation to the assets’ original effective interest rate.
For trade receivables, the Group applies the simplified approach and has calculated ECLs based
on lifetime ECLs. The Group has established a provision matrix that is based on the Group’s
historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment.
For other debt financial assets, the ECLs are based on the 12-months ECLs. However, when there
has been a significant increase in credit risk since origination, the allowance will be based on the
lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECL, the Group considers reasonable and supportable
information that is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information analysis, based on the Group’s historical experience and
informed credit assessment and including forward-looking information.
27
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.6 Financial Instruments (continued)
(ii)
Impairment loss on financial assets (continued)
The Group assumes that the credit risk on a financial asset has increased significantly if it is more
than 30 days past due.
The Group considers a financial asset to be credit-impaired when: (1) the borrower is unlikely to
pay its credit obligations to the Group in full, without recourse by the Group to actions such as
realising security (if any is held); or (2) the financial asset is more than 90 days past due.
Interest income on credit-impaired financial assets is calculated based on the amortised cost (i.e.
the gross carrying amount less loss allowance) of the financial asset. For non credit-impaired
financial assets interest income is calculated based on the gross carrying amount.
(iii) Financial liabilities
The Group classifies its financial liabilities, depending on the purpose for which the liabilities were
incurred. Financial liabilities at fair value through profit or loss are initially measured at fair value
and financial liabilities at amortised costs are initially measured at fair value, net of directly
attributable costs incurred.
Financial liabilities at amortised cost
Financial liabilities at amortised cost including trade and other payables, borrowings, certain
preference shares and the debt element of convertible loan note issued by the Group are
subsequently measured at amortised cost, using the effective interest method. The related
interest expense is recognised in profit or loss.
Gains or losses are recognised in profit or loss when the liabilities are derecognised as well as
through the amortisation process.
(iv) Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset or
financial liability and of allocating interest income or interest expense over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future cash receipts or payments
through the expected life of the financial asset or liability, or where appropriate, a shorter period.
(v) Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct
issue costs.
The Hong Kong Companies Ordinance, Cap. 622 (“the Ordinance”), came into operation on 3
March 2014. Under the Ordinance, shares of the Company do not have a nominal value.
Consideration received or receivable for the issue of shares on or after 3 March 2014 is credited to
share capital. Commissions and expenses are allowed to be deducted from share capital under
s. 148 and s. 149 of the Ordinance.
28
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.6 Financial Instruments (continued)
(vi) Derecognition
The Group derecognises a financial asset when the contractual rights to the future cash flows in
relation to the financial asset expire or when the financial asset has been transferred and the
transfer meets the criteria for derecognition in accordance with HKFRS 9.
Financial liabilities are derecognised when the obligation specified in the relevant contract is
discharged, cancelled or expires.
2.7 Cash and Cash Equivalents
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents includes
cash on hand and at banks, 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.
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.
2.8 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
weighted average cost 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.
29
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.9 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.
Freehold 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 (if any) 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 impaired capital works in progress are expensed in profit or loss.
30
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.10 Leases
Accounting policies applicable from 1 July 2019
All leases (irrespective of they are operating leases or finance leases) are required to be captialised
in the statement of financial position as right-of-use assets and lease liabilities, but accounting policy
choices exist for an entity to choose not to capitalise (i) leases which are short-term leases and/or
(ii) leases for which the underlying asset is of low-value. The Group has elected not to recognise
right-of-use assets and lease liabilities for which at the commencement date have a lease term of
12 months or less. The lease payments associated with those leases have been expensed on
straight-line basis over the lease term.
Right-of-use asset
The right-of-use asset should be recognised at cost and would comprise: (i) the amount of the initial
measurement of the lease liability; (ii) any lease payments made at or before the commencement
date, less any lease incentives received; (iii) any initial direct costs incurred by the lessee and (iv)
an estimate of costs to be incurred by the lessee in dismantling and moving the underlying asset to
the condition required by the terms and conditions of the lease, unless those costs are incurred to
produce inventories. Except for right-of-use asset that meets the definition of an investment property
or a class of property, plant and equipment to which the Group applies the revaluation model, the
Group measures the right-of-use assets applying the cost model. Under the cost model, the Group
measures the right-of-use assets at cost, less any accumulated depreciation and any impairment
losses, and adjusted for any remeasurement of lease liability. Lease assets are depreciated on a
straight-line basis over their expected useful lives on the same basis as owned assets, or where
shorter, the term of the relevant lease.
The following payments for the right-of-use the underlying asset during the lease term that are not
paid at the commencement date of the lease are considered to be lease payments: (i) fixed
payments less any lease incentives receivable; (ii) variable lease payments that depend on an
index or a rate, initially measured using the index or rate as the commencement date; (iii) amounts
expected to be payable by the lessee under residual value guarantees; (iv) the exercise price of a
purchase option if the lessee is reasonably certain to exercise that option and (v) payments of
penalties for terminating the lease, if the lease term reflects the lessee exercising an option to
terminate the lease.
Accounting policies applied until 30 June 2019
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.
2.11 Land Use Rights
Accounting policies applied until 30 June 2019
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.
Leasehold land previously accounted for as land use rights are accounted for as right-of-use assets
from 1 July 2019 onwards, as explained in note 2.22(i)(a)(i) and 2.10 above.
31
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.12 Intangibles
Research and development costs
Research costs are expensed as incurred. Development costs 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.
Capitalised development costs are amortised over the periods the Group expects to benefit from
selling the products developed. The amortisation expense is recognised in profit or loss.
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.
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.
(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.
32
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.13 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.
2.14 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.
2.15 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.
2.16 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.
33
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.17 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.
2.18 Dividends/Return of Capital
No dividends were paid or proposed for the years ended 30 June 2020 and 30 June 2019. There is
no Dividend Reinvestment Plan in operation.
2.19 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.
34
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.20 Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company
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.
2.21 Goods and Services Tax (“GST”)/Value Added Tax (“VAT”)
Revenues, expenses are recognised net of GST/VAT except where GST/VAT incurred on a
purchase of goods and services is not recoverable from the taxation authority, in which case the
GST/VAT 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/VAT included. The net amount of
GST/VAT recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the consolidated statement of financial position.
Commitments and contingencies are disclosed net of the amount of GST/VAT recoverable from, or
payable to, the taxation authority.
35
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.22 Adoption of HKFRS
(i) Adoption of new or revised HKFRSs - effective on 1 July 2019
The HKICPA has issued a number of new or amended HKFRSs that are first effective for the
current accounting period of the Group:
HKFRS 16, Leases
HK(IFRIC)-Int 23, Uncertainty over Income Tax Treatments
Prepayment Features and Negative Compensation
Annual Improvements to HKFRSs 2015-2017 Cycle, Amendments to HKAS 12 Income
Taxes and HKAS 23 Borrowing Costs
The impact of adoption of HKFRS 16 Leases have been summarised below. The other new
or amend HKFRSs that are effective from 1 July 2019 did not have any material impact on the
Group accounting policies.
(a) HKFRS 16 Leases (“HKFRS 16”)
HKFRS 16 brings significant changes in accounting treatment for lease accounting,
primarily for accounting for lessees. It replaces HKAS 17 Leases (“HKAS 17”), HK(IFRIC)-
Int 4 Determining whether an Arrangement contains a Lease, HK(SIC)-Int 15 Operating
Leases- Incentives and HK(SIC)-Int 27 Evaluating the Substance of Transactions
involving the Legal Form of a Lease. From a lessee’s perspective, almost all leases are
recognised in the statement of financial position as right-of-use assets and lease liabilities,
with the narrow exception to this principle for leases which the underlying assets are of
low-value or are determined as short-term leases. From a lessor’s perspective, the
accounting treatment is substantially unchanged from HKAS 17.
The Group has applied HKFRS 16 using the cumulative effect approach and recognised
all the cumulative effect of initially applying HKFRS 16, if any, as an adjustment to the
opening balance of retained earnings at the date of initial application. The comparative
information presented in 2019 has not been restated and continues to be reported under
HKAS 17 and related interpretations as allowed by the transition provision in HKFRS 16.
36
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.22 Adoption of HKFRS (continued)
(i) Adoption of new or revised HKFRSs - effective on 1 July 2019 (continued)
(a) HKFRS 16 (continued)
(i) The new definition of a lease
Under HKFRS 16, a lease is defined as a contract, or part of a contract, that conveys
the right to use an assets (the underlying asset) for a period of time in exchange for
consideration. A contract conveys the right to control the use of an identified asset
for a period of time when the customer, throughout the period of use, has both: (a)
the right to obtain substantially all of the economic benefits from use of the identified
asset and (b) the right to direct the use of the identified asset.
For a contract that contains a lease component and one or more additional lease or
non-lease components, a lessee shall allocate the consideration in the contract to
each lease component on the basis of the relative stand-alone price of the lease
component and the aggregate stand-alone price of the non-lease components,
unless the lessee apply the practical expedient which allows the lessee to elect, by
class of underlying asset, not to separate non-lease components from lease
components, and instead account for each lease component and any associated
non-lease components as a single lease component.
(ii) Accounting as a lessee and transitional impact
Under HKAS 17, a lessee has to classify a lease as an operating lease or a finance
lease based on the extent to which risks and rewards incidental to ownership of a
lease asset lie with the lessor or the lessee. If a lease is determined as an operating
lease, the lessee would recognise the lease payments under the operating lease as
an expense over the lease term. The asset under the lease would not be
recognised in the statement of financial position of the lessee.
Under HKFRS 16, all leases (irrespective of they are operating leases or finance
leases) are required to be capitalised in the statement of financial position as right-
of-use assets and lease liabilities, but HKFRS 16 provides accounting policy choices
for an entity to choose not to capitalise (i) leases which are short-term leases and/or
(ii) leases for which the underlying asset is of low-value.
To ease the transition to HKFRS 16, the Group has elected not to recognise right-of-
use assets and lease liabilities for low-value assets. The Group has leases for which
at the commencement date have a lease term less than 12 months. The lease
payments associated with those leases have been expensed on straight-line basis
over the lease term. There was no impact on retained earnings on 1 July 2019.
37
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.22 Adoption of HKFRS (continued)
(i) Adoption of new or revised HKFRSs - effective on 1 July 2019 (continued)
(a) HKFRS 16 (continued)
(ii) Accounting as a lessee and transitional impact (continued)
Right-of-use asset
The right-of-use asset should be recognised at cost and would comprise: (i) the
amount of the initial measurement of the lease liability (see below for the accounting
policy to account for lease liability); (ii) any lease payments made at or before the
commencement date, less any lease incentives received; (iii) any initial direct costs
incurred by the lessee and (iv) an estimate of costs to be incurred by the lessee in
dismantling and removing the underlying asset to the condition required by the terms
and conditions of the lease, unless those costs are incurred to produce inventories.
The Group measures the right-of-use assets applying a cost model. Under the cost
model, the Group measures the right-to-use at cost, less any accumulated
depreciation and any impairment losses, and adjusted for any remeasurement of
lease liability.
Upon the adoption of HKFRS 16 on 1 July 2019, the land use rights with net carrying
amount of $3,090,641 were reclassified from “Land use rights” to “Right-of-use
assets” (refer to note 2.11). There was no impact on retained earnings on 1 July
2019.
Lease liability
The lease liability should be recognised at the present value of the lease payments
that are not paid at the date of commencement of the lease. The lease payments
shall be discounted using the interest rate implicit in the lease, if that rate can be
readily determined. If that rate cannot be readily determined, the Group shall use the
Group’s incremental borrowing rate.
The following payments for the right-to-use the underlying asset during the lease
term that are not paid at the commencement date of the lease are considered to be
lease payments: (i) fixed payments less any lease incentives receivable: (ii) variable
lease payments that depend on an index or a rate, initially measured using the index
or rate as at commencement date; (iii) amounts expected to be payable by the lessee
under residual value guarantees; (iv) the exercise price of a purchase option if the
lessee is reasonably certain to exercise that option and (v) payments of penalties for
terminating the lease, if the lease term reflects the lessee exercising an option to
terminate the lease.
Subsequent to the commencement date, a lessee shall measure the lease liability
by: (i) increasing the carrying amount to reflect interest on the lease liability; (ii)
reducing the carrying amount to reflect the lease payments made; and (iii)
remeasuring the carrying amount to reflect any reassessment or lease modifications,
e.g., a change in future lease payments arising from change in an index or rate, a
change in the lease term, a change in the in substance fixed lease payments or a
change in assessment to purchase the underlying asset.
38
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.22 Adoption of HKFRS (continued)
(i) Adoption of new or revised HKFRSs - effective on 1 July 2019 (continued)
(a) HKFRS 16 (continued)
(iii) Accounting as a lessor
The Group has leased out its land to a number of tenants. As the accounting under
HKFRS 16 for a lessor is substantially unchanged from the requirements under
HKAS 17, the adoption of HKFRS 16 in this respect does not have a significant
impact on these financial statements.
(b) HK(IFRIC)-Int 23 – Uncertainty over Income Tax Treatments
The Interpretation supports the requirements of HKAS 12 Income Taxes, by providing
guidance over how to reflect the effects of uncertainty in accounting for income taxes.
Under the interpretation, the entity shall determine whether to consider each uncertain tax
treatment separately or together based on which approach better predicts the resolution
of the uncertainty. The entity shall also assume the tax authority will examine amounts
that it has a right to examine and have full knowledge of all related information when
making those examinations. If the entity determines it is probable that the tax authority will
accept an uncertain tax treatment, then the entity should measure current and deferred
tax in line with its tax filings. If the entity determines it is not probable, then the uncertainty
in the determination of tax is reflected using either the “most likely amount” or the
“expected value” approach, whichever better predicts the resolution of the uncertainty.
(c) Amendments to HKFRS 9 - Prepayment Features with Negative Compensation
The amendments clarify that prepayable financial assets with negative compensation can
be measured at amortised cost or at fair value through other comprehensive income if
specified conditions are met – instead of at fair value through profit or loss.
39
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.22 Adoption of HKFRS (continued)
(i) Adoption of new or revised HKFRSs - effective on 1 July 2019 (continued)
(d) Annual Improvements to HKFRSs 2015-2017 Cycle
The amendments issued under the annual improvements process make small, non-urgent
changes to standards where they are currently unclear. They include the following:
Amendments to HKAS 12 Income Taxes
The amendments issued under the annual improvements process make small, non-urgent
changes to standards where they are currently unclear. They include amendments to
HKAS 12 which clarify that all income tax consequences of dividends are recognised
consistently with the transactions that generated the distributable profits, either in profit or
loss, other comprehensive income or directly in equity.
Amendments to HKAS 23 Borrowing Costs
The amendments issued under the annual improvements process make small, non-urgent
changes to standards where they are currently unclear. They include amendments to
HKAS 23 which clarifies that a borrowing made specifically to obtain a qualifying asset
which remains outstanding after the related qualifying asset is ready for its intended use
or sale would become part of the funds an entity borrows generally and therefore included
in the general pool.
40
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
2. Summary of Significant Accounting Policies (continued)
2.22 Adoption of HKFRS (continued)
(ii) New or revised HKFRSs that have been issued but are not yet effective
The following new or revised HKFRSs, potentially relevant to the Group’s financial statements,
have been issued, but are not yet effective and have not been early adopted by the Group.
The Group’s current intention is to apply these changes on the date they become effective.
Amendments to HKFRS 3
Amendments to HKFRS 9,
HKAS 39 and HKFRS 7
Amendments to HKFRS 10
and HKAS 28
Amendments to HKFRS 16
HKFRS 17
Annual Improvement to
HKFRSs 2018-2020
Definition of a Business1
Interest Rate Benchmark Reform1
Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture6
COVID-19-Related Rent Concessions2
Insurance Contracts3
Amendments to HKFRS 1, HKFRS 9, HKFRS 16 and
HKFRS 414
Amendments to HKAS 1 and
Definition of Material1
HKAS 8
Amendments to HKAS 1
Amendments to HKAS 16
Amendments to HKAS 37
Classification of Liabilities as Current or Non-curent5
Property, Plant and Equipment4
Provisions, Contingent Liabilities and Contingent Assets4
1
2
3
4
5
6
Effective for annual periods beginning on or after 1 January 2020
Effective for annual periods beginning on or after 1 June 2020
Effective for annual periods beginning on or after 1 January 2021
Effective for annual periods beginning on or after 1 January 2022
Effective for annual periods beginning on or after 1 January 2023
The amendments were originally intended to be effective for periods beginning on
or after 1 January 2018. The effective date has now been deferred/removed. Early
application of the amendments of the amendments continue to be permitted.
The directors anticipate that all of the relevant pronouncements will be adopted in the Group’s
accounting policy for the first period beginning after the effective date of the pronouncement.
The directors are currently assessing the possible impact of these new or revised standards
on the Group’s results and financial position in the first year of application. Those new or
revised HKFRSs that have been issued but are not yet effective are unlikely to have material
impact on the Group’s results and financial position upon application.
41
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
3. Critical Accounting Estimates and Judgments
In the application of the Group’s accounting policies, the directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision affects both current and future
periods.
3.1 Impairment assessment of intangible assets and property, plant and equipment (“PPE”)
The Group assesses impairment at the end of each reporting period by evaluating conditions specific
to the Group that may lead to impairment of intangible assets and PPE. 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 also uses bankable feasibility status reports where these
are available. The Group’s main intangible assets are its exploration and evaluation assets related
to the Donald Mineral Sands project located in Victoria, Australia and its development costs incurred
on the Niafarang project in Senegal. 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.
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 HKFRS 6. This has occurred
because the technical feasibility and economic viability of extracting the mineral resources have not
been completed and hence are not demonstrable at this time. The Group has assessed that the
balances capitalised will be recoverable through the project’s successful development.
Capitalisation of Development Assets
The Group has continued to capitalise expenditure, in accordance with HKAS 38, incurred on the
development of the Niafarang Mineral Sands project in Senegal. The Group has assessed that the
balances capitalised will be recoverable through the project’s successful development.
42
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
3. Critical Accounting Estimates and Judgments (continued)
3.2 Provision for Expected Credit Losses 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 an outstanding receivable for the disposal of surplus land in China
from 2015, further details of which are set out in note 11.1. During the year, the Group made
significant progress with $1.5 million due at year end (2019: $3.0 million) and subsequent settlement
of $0.4 million was received in July 2020. The Group is confident the balance will be settled within
the next twelve months.
3.3 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.
3.4 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.
3.5 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
4.1 Description of Segments
The Group has adopted HKAS 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:
Donald Mineral Sands (“DMS”): Development of the DMS mine
China: Development and construction of mineral processing plant and mineral trading
Senegal: Development of the Niafarang mine
Other: Group treasury and head office activities
43
8
9
1
,
7
7
9
,
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3
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,
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3
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2
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,
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4
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N
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
4. Segment Information (continued)
4.3 Geographical Information
Although the Group is managed globally, it operates in the following main geographical areas:
Hong Kong
The Company was incorporated in Hong Kong.
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
The Group is focused on developing mineral sands opportunities, principally in Senegal with a view
to integrating into the Chinese operations.
Sales revenue
Interest income
Non-current assets
Australia
China
2020
$
-
2019
$
-
8,430,039
7,977,198
Other countries
-
-
8,430,039
7,977,198
2020
$
245
1,429
485
2,159
2019
$
2,263
13,356
2020
$
75,466,807
23,011,947
6
9,655,941
2019
$
73,434,318
25,905,061
9,253,360
15,625
108,134,695
108,592,739
During 2020, $5,627,444 or 67% (2019: $6,160,787 or 77%) of the revenue depended on five (2019:
six) customers.
5. Revenue and Other Income
Revenue from contracts with customers within the scope of
HKFRS 15
Timing of revenue recognition – at a point in time
- sale of goods
8,430,039
7,977,198
2020
$
2019
$
46
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
5. Revenue and Other Income – Continued
Interest income
Other income:
- rental income
- other income
Total other income
6. Loss Before Income Tax Expense
Loss before income tax expense is arrived at after charging/crediting:
6.1 Employee benefits (including directors’ remuneration):
Salaries and fees
Non-cash benefits
Superannuation
6.2 Other items
Finance costs:
- on borrowings and early redemption of note receivables
- on Wensheng deposits (note 21(a))
Short-term lease charges in respect of premises
Research and development costs
Depreciation and amortisation
Less: capitalisation of water rights amortisation (note 17(f))
Costs associated with Gambia litigation (note 13)
Reversal of provision for impairment on receivables (note 11)
2020
$
2019
$
2,159
15,625
174,482
169,764
344,246
148,203
69,022
217,225
2020
$
677,573
182,333
42,105
902,011
2019
$
558,368
159,107
53,529
771,004
2020
$
2019
$
629,216
1,022,335
1,651,551
48,479
783,206
2,234,886
(593,261)
1,641,625
136,006
(469,657)
229,207
1,046,003
1,275,210
87,586
544,151
1,733,321
(889,890)
843,431
65,625
(411,395)
47
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
7.
Income Tax (Expense)/Benefit
7.1 The components of tax (expense)/benefit comprise:
Current tax benefit in respect of current year
Deferred taxation:
- Unrealised inventory
- Loss recognised/(carried forwards) for the year
- Capitalisation of expenditure on DMS project (net)
- Other movements
Total
2020
$
623,470
(711,587)
(1,026,798)
210,949
42,547
61,715
2019
$
415,143
(56,193)
2,861,553
(2,584,445)
(385,747)
52,446
(88,117)
358,950
7.2 The prima facie tax on loss before income tax is reconciled to the income tax as follows:
2020
$
2019
$
Loss before income tax expense
(6,204,703)
(2,271,912)
Prima facie tax payable on profit 27.5% (2019: 27.5%)
-
continuing operations
Add/(Less) tax effect of:
non-deductible items - Gambia
non-taxable items
tax losses not recognised on overseas entities
research & development tax incentive *
(under)/over provision in respect of prior years
impact of overseas tax differential
-
-
-
-
-
-
Income tax expense/(benefit)
(1,706,293)
(1,706,293)
37,402
(149,411)
2,534,088
(623,470)
-
(4,199)
88,117
(624,776)
(624,776)
18,047
(251,491)
912,639
(415,143)
13,514
(11,740)
(358,950)
The applicable weighted average effective tax rates are as
follows:
1.4%
15.8%
* Tax benefit relates to Australian Government Grant in relation to research & development tax
incentives on eligible expenditure related to the DMS project.
48
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
7.
Income Tax (Expense)/Benefit (continued)
7.3 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)
The Company 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 based on the regular tax audits performed by the Chinese tax
authorities.
7.4 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.
49
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
8. Loss Per Share
8.1 Reconciliation of loss used in the calculation of loss per share:
Loss attributable to owners
Loss used to calculate basic and diluted loss per share
8.2 Weighted average number of ordinary shares:
Weighted average number of ordinary shares outstanding
during the year for the purpose of basic and diluted loss per
share
8.3 Dilutive shares
2020
$
(6,292,820)
(6,292,820)
2019
$
(1,912,962)
(1,912,962)
2020
$
2019
$
122,479,784
122,479,784
There were no shares issued under escrow at or post year end. There were no rights or options for
shares outstanding at year-end.
9. Auditors' Remuneration
Audit and review of financial statements
BDO Limited
Other services
-
taxation services
10. Cash and Cash Equivalents
Cash on hand
Current & call account balances
Total
2020
$
2019
$
197,877
197,877
162,160
162,160
-
-
8,178
8,178
2020
$
41,798
513,706
555,504
2019
$
10,222
1,677,327
1,687,549
Cash on hand is non-interest bearing. Bank balances and short-term deposits at call bear floating interest
rates between 0.0% and 0.01% (2019: 0.0% and 0.75%). Deposits have an average maturity of 90 days
(2019: 90 days).
50
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
10. Cash and Cash Equivalents (continued)
10.1 Concentration of risk by geography – cash and cash equivalents
Australia
China
Hong Kong
USA
Senegal
Total
10.2 Concentration of risk by bank
Australia
Commonwealth Bank - S&P rating of AA-
(2019: AA-)
Westpac Bank - S&P rating of AA- (2019: AA-)
Bank of China - S&P rating of A (2019: A)
Other Australian banks
China
Bank of China - S&P rating of A1 (2019: A1)
Construction Bank - S&P rating of A (2019: A)
China Zheshang Bank - BA1 (2019: BA1)
Shengjing Bank - unrated
Other banks
Other countries
Other banks
Restrictions on cash
2020
$
237,194
260,153
2,250
27,813
28,094
555,504
2019
$
129,141
1,351,736
2,243
27,262
177,167
1,687,549
2020
$
2019
$
187,105
1,646
12,050
36,279
237,080
10,861
122
206,141
1,330
14
218,468
58,158
58,158
87,174
1,646
12,029
28,280
129,129
936,501
3,207
398,757
2,255
806
1,341,526
206,672
206,672
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 13% (2019: 16%) to be paid.
As at 30 June 2020, Australian domiciled cash at banks included $45,000 (2019: $45,000) of cash
backed by Bank Guarantee for the operations of the Donald Mineral Sands project.
As at 30 June 2019, the Chinese domiciled cash at banks included $31,673 of cash restricted by
bank as security for certain note payables and letters of credit.
51
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
10. Cash and Cash Equivalents (continued)
10.3 Term deposits greater than 90 days
Term deposits with maturity over 90 days
2020
$
46,112
2019
$
46,112
As at 30 June 2020, term deposits with maturity over 90 days of $46,112 (2019: $46,112) bear fixed
interest rates of 0.9% (2019: 0.9%) and have a maturity of 3-6 months.
Restrictions on cash
The short-term deposits include $45,000 (2019: $45,000) of cash backed by Bank Guarantees for
the operations of the Donald Mineral Sands project.
10.4 Concentration of risk by geography – term deposits
Australia
10.5 Concentration of risk by bank – term deposits
Australia
Commonwealth Bank-S&P rating of AA- (2019: AA-)
Other
2020
$
46,112
2019
$
46,112
2020
$
35,000
11,112
46,112
2019
$
35,000
11,112
46,112
52
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
11. Trade and Other Receivables
Current assets:
Trade debtors
Impairments
Net trade debtors
Land sale receivable
Impairments
Net land sale receivables
Sundry receivable
Prepayments
Impairments
Net prepayments
Non-current assets:
Land sale receivable
Impairments
Total
11.1 Land sale receivable
Note
11.2
11.3
11.1
11.4
11.4
11.1
2020
$
2019
$
2,727,932
(113,460)
2,614,472
1,495,660
(65,062)
1,430,598
545,760
6,818,551
(370,355)
6,448,196
11,039,026
3,961,058
(377,519)
3,583,539
622,873
-
622,873
438,688
5,549,189
(373,724)
5,175,465
9,820,565
-
-
-
2,339,758
(262,595)
2,077,163
11,039,026 11,897,728
During the year ended 30 June 2014, the Group entered into an agreement to transfer 1,065,384
sqm of land held in Yingkou Province in China to a state-owned entity. As the under-development
of this land resulted from a change of government development plans and restructure, this land
transfer has been subsidised by the Chinese Government. Final contracts over the land sale have
been exchanged and the disposal was brought to account in the year ended 30 June 2015. The net
proceeds receivable amounted to $20,356,248.
The land contract is unconditional, and payment is binding on the buyer being the Yingkou
Government and its related entities, but the payments expected have been delayed. During the year
ended 30 June 2020, there were receipts of $1,483,981 (2019: $3,688,765) with a gross balance
receivable of $1,495,660 (2019: $2,962,631). While the receivable is currently outside the terms
initially agreed, the Group is confident all of the amounts outstanding will be received. In July 2020,
a further $399,175 was received.
As at 30 June 2020 the total amount outstanding before ECL provision was $1,495,660 (2019:
$2,962,631). The directors continue to believe this remaining balance will be recovered in full as it
is owed by a Chinese government entity but estimate it will now be settled in 2020/21. The provision
has accordingly been determined on that basis. During the year ended 30 June 2020, the Group
received payment of $1,483,981 and therefore reversal of expected credit loss of $201,090 was
recognised for the year ended 30 June 2020 (2019: $308,895). As at 30 June 2020, the impairment
provision for land sale receivable is $65,062 (2019: $262,595).
53
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
11. Trade and Other Receivables (continued)
11.2 Ageing analysis
The ageing analysis of trade debtors, based on due dates, is as follows:
0-30 days (not past due)
Total
2020
$
2,614,472
2,614,472
2019
$
3,583,539
3,583,539
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 to preserve client relationships. 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.
11.3 Impairment on trade debtors and other receivables
At year end, the Group has reviewed its trade debtors and brought to account impairment where
required.
During the year ended 30 June 2020, reversals of expected credit loss of $268,567 (2019: $102,500)
and $201,090 (2019: $308,895) on trade debtors and land sale receivable respectively was
recognised for the year ended 30 June 2020. As at 30 June 2020, the impairment provision for trade
debtors and other receivables is $178,522 (2019: $640,114).
11.4 Prepayments
At year end, the Group had made advances to suppliers for inventory purchases.
Included in prepayments is an amount of RMB1,800,000 carried forward from 2008, equivalent to
$370,355 (2019: $373,724) which is the prepayment for construction. This amount has been fully
impaired due to low possibility of collection.
12. Inventories
Raw materials
Work-in-progress
Finished goods
Goods in transit
Total
2020
$
3,308,399
2019
$
6,881,973
107,213
108,168
6,321,450
193,278
9,930,340
351,843
6,853
7,348,837
There is no provision against inventory to net realisable value as of 30 June 2020 and 2019.
54
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
13. Investments in Gambia
Carnegie Minerals (Gambia) Limited is a 100% subsidiary of the Company. 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.
As announced to the ASX on 23 July 2015, the Group has received a successful finding in its favour. The
Group and the Gambian government made submissions on damages to the International Centre for
Settlement of Investment Disputes (“ICSID”). ICSID has 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 $31 million.
On 2 December 2015, the Group notified the ASX that Gambia had 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 Gambia under the ICSID rules,
as there is no form of appeal process.
The ICSID panel of 3 arbitrators has confirmed that the Award should not be annulled in whole or in part
in July 2020. The Group has been ordered to meet one half of the cost of the Committee being
US$221,992 payable to Gambia and shall be offset against sums due under the Award. As of 30 June
2020, no assets arising from this matter were recognised.
When the Group receives a settlement, an additional contingent legal fee of £171,000 (equivalent to
approximately $307,000) is payable to Clyde & Co.
During the year the Group incurred additional legal and other related expenses to the Gambian
proceedings in the amounts of $136,006 (2019: $65,625).
14. Financial Assets At Fair Value Through Profit Or Loss
Equity securities
- Listed in Australia
Total financial assets at fair value through profit or loss
2020
$
20,322
20,322
2019
$
25,366
25,366
Financial assets at fair value through profit or loss represent listed equity investments in Australia. These
financial assets comprise investments in the ordinary issued capital of three public companies listed on
the ASX. The cost of these investments was $1,877,716. There are no fixed returns or fixed maturity date
attached to these investments.
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.
55
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
15. Subsidiaries
Financial Year 2020
Parent entity
Astron Corporation Limited
Subsidiaries of parent entity
Astron 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
Astron Senegal Holding Pty Ltd
Senegal Mineral Resources SA
Senegal Mineral Sands Ltd
Zirtanium Pty Limited
(i) Equity
Percentage
Owned
Ordinary
Shares
2020
Percentage
Owned
Ordinary
Shares
2019
Country of
incorporation
Hong Kong
Australia
Australia
China
USA
The Gambia
USA
Isle of Man
Australia
Australia
Australia
Australia
Hong Kong
Senegal
Hong Kong
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
The proportion of ownership interest is equal to the proportion of voting power held.
(ii) Disposal/Acquisition of subsidiaries
During the current and prior years, no subsidiaries were disposed or incorporated.
No subsidiaries were acquired during the current and prior years.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
56
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
16. Property, Plant and Equipment
Land
At cost
Total land
Buildings
At cost
Less accumulated depreciation
Net carrying value
Capital works in progress
At cost
Less accumulated impairment losses
Total capital works in progress
Plant and equipment
At cost
Less accumulated depreciation
Less accumulated impairment losses
Net carrying value
Total property, plant and equipment
16.1 Assets pledged as security
2020
$
2019
$
5,162,151
5,162,151
4,338,027
4,338,027
10,252,018
(2,908,313)
7,343,705
10,768,103
(2,416,600)
8,351,503
4,270,613
(1,970,628)
2,299,985
3,920,102
(1,988,549)
1,931,553
17,347,239
(3,761,533)
(1,743,536)
11,842,170
16,140,544
(2,781,808)
(1,759,392)
11,599,344
26,648,011
26,220,427
As at 30 June 2020, property, plant and equipment with carrying value of $3,957,471 were pledged
as security for short term loans (2019: $5,155,466).
16.2 Capital works in progress
Capital works in progress represent plant and equipment being assemble and/or constructed. They are
not ready for use and not yet being depreciated.
57
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
16. Property, Plant and Equipment (continued)
16.3 Movements in net carrying values
Movement in the carrying amount for each class of property, plant and equipment between the
beginning and the end of the current financial year.
Year ended 30 June 2020
Balance at 1 July
Additions
Depreciation
Transfers #
Foreign exchange movements
Capital
works in
progress
$
Land
$
Buildings
$
Plant and
equipment
$
Total
$
1,931,553
1,235,095
-
(850,462)
(16,201)
4,338,027
824,124
-
-
-
8,351,503
-
(561,821)
-
(445,977)
11,599,344 26,220,427
2,123,233
(1,559,710)
-
(135,939)
64,014
(997,889)
850,462
326,239
Balance at 30 June
2,299,985
5,162,151
7,343,705
11,842,170 26,648,011
Year ended 30 June 2019
Balance at 1 July
Additions
Depreciation
Transfers #
Foreign exchange movements
Balance at 30 June
7,551,100
4,219,195
-
(9,969,956)
131,214
4,247,755
90,272
-
-
-
8,668,935
-
(430,454)
-
113,022
2,128,559 22,596,349
4,411,653
(764,588)
-
(22,987)
102,186
(334,134)
9,969,956
(267,223)
1,931,553
4,338,027
8,351,503
11,599,344 26,220,427
# The Group allocated the development costs in relation to the Mineral separation plant in China
to capital works in progress. Once the Mineral Separation Plant had been commissioned the
development expenditure was transferred from capital works in progress to plant and equipment.
17. Exploration and Evaluation Assets
Evaluation costs
Cost
Accumulated impairment loss
Net carrying value
Exploration expenditure capitalised - DMS project
Exploration and evaluation phases
Net carrying value
Water rights - DMS project
Net carrying value
Total exploration and evaluation assets
Note
17(b)
17(b)
17(b)
17(a)(c)
17(a)(d)
17(f)
2020
$
2019
$
7,791,746
(7,487,231)
304,515
7,794,515
(7,487,231)
307,284
57,862,304
57,862,304
56,368,885
56,368,885
12,130,954
70,297,773
12,724,215
69,400,384
58
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
17. Exploration and Evaluation Assets (continued)
(a) Exploration and evaluation assets
The Group has presented “Exploration and Evaluation assets” separately on the face of the
consolidated statement of financial position since the last year. Previously these assets were
included as a sub-category under “Intangible Assets”.
The movements represent additions, movements in foreign exchange and amortisation. Capital
expenditure commitments are detailed in note 30.2.
(b) Evaluation costs and impairment losses
TiO2 project
Cost
Less accumulated impairment losses
Net carrying value
Capitalised testing and design
Cost
Net carrying value
Total
Cost
Less accumulated impairment losses
Total evaluation costs
(c) Exploration and evaluation expenditure
2020
$
2019
$
7,487,231
(7,487,231)
-
7,487,231
(7,487,231)
-
304,515
304,515
307,284
307,284
7,791,746
(7,487,231)
304,515
7,794,515
(7,487,231)
307,284
This expenditure relates to the Group's investment in the Donald Mineral Sands Project. As at 30
June 2020, the Group has complied with the conditions of the granting of MIN5532, RL 2002 (formerly
EL4433), RL2003 (formerly EL4432, and incorporating the former RL 2006) and EL5186, except for
that minimum expenditure requirements on RL2002 was not met during the year, but the Directors
are of the opinion that the chance that the license will be cancelled is remote. As such, the Directors
believe that the tenements are in good standing with the Department of Economic Development,
Jobs, Transport and Resources (which has incorporated the responsibilities previously administered
by the Department of Primary Industries) in Victoria, who administers the Mineral Resources
Development Act 1990.
During the year, DMS continued to develop the technical aspects of the fine grain materials
separation and associated value add, refined the valuation model, achieved bulk sample approvals
and licenses, reviewed logistics and handling opportunities and marketing of the Donald feedstock.
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.
59
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
17. Exploration and Evaluation Assets (continued)
(d) Water rights
In 2012, the Group acquired rights to the supply of water for the Donald project. The water rights are
amortised over 25 years (subject to the extension of this term) in line with entitlements.
In July 2018, a “Deed of Variation” was signed between Grampians Wimmera Mallee Water
Corporation (“GWM Water”) and Donald Mineral Sands Pty Ltd., a wholly owned subsidiary of the
Company. The variation provides for an extension of the term of the original agreement of up to 4
years subject to terms and conditions. The amortisation period of the water rights have accordingly
been extended by 4 years to a total period of 29 years to December 2040.
(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) Movement in net carrying values
Year ended 30 June 2020
Balance at 1 July 2019
Additions *
Amortisation
Foreign exchange movements
Exploration
and Evaluation
Phase
$
Evaluation
costs
$
Water rights
$
Total
$
56,368,885
307,284
12,724,215
69,400,384
1,493,419
-
-
-
-
-
1,493,419
(593,261)
(593,261)
(2,769)
-
(2,769)
Balance at 30 June 2020
57,862,304
304,515
12,130,954
70,297,773
Year ended 30 June 2019
Balance at 1 July 2018
Additions *
Amortisation
Foreign exchange movements
Balance at 30 June 2019
54,087,188
302,036
13,614,105
68,003,329
2,281,697
-
-
-
-
-
2,281,697
(889,890)
(889,890)
5,248
-
5,248
56,368,885
307,284
12,724,215
69,400,384
* Additions of exploration and evaluation phase during the year included the amortisation of water
rights of $593,261 (2019: $889,890) which was capitalised during the year.
60
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
18. Development Costs
Balance at 1 July
Additions
Foreign exchange movements
Balance at 30 June
2020
$
7,804,124
374,957
26,544
8,205,625
2019
$
6,590,766
1,214,165
(807)
7,804,124
The mining license of the Senegal project was granted in June 2017, the registered mining license was
received in October 2017 and the environmental approval was obtained in August 2017. As a result of
these developments, the directors considered the Senegal project had demonstrated it was technically
feasible and commercially viable. Accordingly, under HKFRS 6 and the Group’s accounting policies, this
project and the costs capitalised to date should no longer be accounted for as an exploration and
evaluation asset, but rather as an asset in its own right. The costs associated with the Senegal project
have therefore been classified as “Development costs” since the year ended 30 June 2018.
19. Right-Of-Use Assets/ Land Use Rights
At 1 July as originally presented
Adjustment on initial application of HKFRS 16 (note 2.22(i)(a))
At 1 July as restated
Amortisation
Foreign exchange movements
Balance at 30 June
2020
$
-
3,090,641
3,090,641
(81,915)
(25,440)
2,983,286
2019
$
3,116,708
-
3,116,708
(79,211)
53,144
3,090,641
During the year ended 30 June 2014, management entered into an agreement to transfer 1,065,384 sqm
of land held in Yingkou province China to a state-owned entity, representing approximately 83% of the
total land held by the Group in Yingkou province. 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. The net proceeds amounting to $20,356,248 to be received
in instalments. The remaining 17% of the land, representing 214,802m2 is shown as Land Use Rights up
to 30 June 2019, and after the adoption of HKFRS 16 as of 1 July 2019 (refer note 2.22(i)(a)), as Right-
of-Use Asset.
The land contract is unconditional, and payment is binding on the buyer, being the Yingkou Government.
However, payments have been delayed. During the year ended 30 June 2020, there were receipts of
$1,483,981 with a balance of gross receivable at 30 June 2020 of $1,495,660 (note 11.1) of which
$399,175 was received in July 2020. While the receivable is currently outside the terms initially agreed,
the Group is confident that the receivable will be received as the amount in due by a China stated-owned
entity and partial payments have been received every year since the land was sold to this entity.
In addition to the land referred to above, the Group also owns a nearby piece of land measuring
approximately 18,302m2 located at Bayuquan District, Yingkou Province, China. Both pieces of land are
held on long term leases with lease terms ranging from 48 to 54 years.
As at 30 June 2020, right-of-use assets/land use rights with carrying value of $2,199,235 are pledged as
security over short- term loans. (2019: $3,090,641).
61
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
20. Trade and Other Payables
Unsecured liabilities
Trade payables
Note payables
Deposits received in advance
Other payables
(a) Other payables
Note
20(a)
2020
$
2019
$
3,493,930
2,299,386
13,375
7,318,762
13,125,453
3,324,256
1,369,567
10,381
4,935,202
9,639,406
Included in other payables was a balance of $2,893,737 (2019: $2,539,571) in aggregate due to 2
related companies as detailed in note 29.6.
21. Contract Liabilities
Contract liabilities arising from:
Advance deposit for future provision of goods
(a) Sale of goods
Note
21(a)
2020
$
2019
$
5,106,984
5,106,984
4,363,126
4,363,126
Included in the balance above is a deposit of RMB20 million was received in connection with the
Senegal offtake agreement (the “Agreement”) with Hainan Wensheng High-tech Minerals Co., Ltd.
(“Wensheng”). Under the Agreement, the Group is required to ship 50,000 tons/year of Titanium
Mineral Sands (“the mineral sands”) to Wensheng in the PRC for a three year period commencing May
2018. The Agreement makes provision for penalties payable by each side for not meeting their
obligations by applying a penalty interest of 24% p.a. against the RMB20 million advance deposit.
Payment to the Group under the Agreement is based on the actual amount of zircon, ilmenite and
rutile, etc. contained in the mineral sands, which is only determined once the mineral sands is shipped
and processed by Wensheng in the PRC. Delivery of the mineral sands have been fallen behind the
schedule as a result of the deferral of commencement of operations of the Senegal project. The Group
has continued to engage in dialogue with Wensheng but cannot currently confirm the revised
commencement of deliveries of product. The Group has accrued penalty interest of $2,040,171 (2019:
$1,059,396) for the year ended 30 June 2020 (included in “other payables”) as per the Agreement for
the late delivery of mineral sands to Wensheng. During the year RMB1 million was repaid against the
initial deposit. As at 30 June 2020, the balance outstanding (excluding accrued interest) was equivalent
to $3,908,307 (2019: $4,151,473).
.
The funds from Wenshang have allowed the Group to progress the Senegal project by enabling the
Group to have the necessary funds to purchase various essential plant & equipment as well as have
funds to prepare the site for essential infrastructure to commence mining operations.
The remaining contract liabilities of $211,653 as of 30 June 2019, representing the amount received
by the Group in advance in relation to the sale of mineral products, has been recognised as revenue
during the year ended 30 June 2020. While the balance of $1,198,677 as of 30 June 2020 is expected
to be recognised as revenue in the next 12 months.
62
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
22. Borrowings
Current
Other short-term borrowings
Bank borrowings
Advances from directors
Note
22(a)
22(b)
22(c)
2020
$
2019
$
1,709,329
3,106,874
6,101,468
10,917,671
934,310
6,021,107
177,729
7,133,146
(a) Other short-term borrowings
Other loan amounting to $1,090,492 is denominated in RMB and is interest bearing at 10% p.a
and secured by certain right-of-use assets/ land use rights in China amounting to $1,609,727
(2019: $1,666,617) (note 19). The remaining amount is unsecured and interest free. The loans
are repayable on or before 31 December 2020.
(b) Bank borrowings
The bank loans are denominated in RMB, interest bearing between 5.00% to 7.50% p.a. and
repayable on or before 30 June 2021 (2019: 4.35% to 7.00%).
Those loans are pledged with property, plant and equipment amounting to $3,957,471 (2019:
$5,155,466) (note 16) and certain right-of-use assets/ land use rights amounting to $589,508
(2019: $1,424,024) (note 19) of the Group. And the personal guarantee from its director of
$1,440,273.
(c) Advances from directors
At 30 June 2020, executive director, Mdm Kang Rong, had advanced the Group $5,851,468
(2019: $177,729) for working capital. The loan is provided interest free and repayable on demand.
At 30 June 2020, executive director, Mr. Tiger Brown, had advanced the Group $250,000 (2019:
$Nil) for working capital. The loan is provided interest free and repayable on demand.
23. Provisions
Current
Employee entitlements
Non-current
Relocation provision
(a) Provision for Relocation
Note
2020
$
2019
$
116,901
95,642
(a)
792,508
786,256
The provision for relocation represents the estimated costs to relocate and compensate landowners
for the Senegal mineral sands project.
63
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
24. Deferred Tax
24.1 Liabilities
Current tax liability
Deferred tax liability arises from the following:
- Capitalised expenditure
- Tax loss
- Unrealised inventory
- Provisions and other timing differences
2020
$
-
2019
$
-
8,341,000
(532,899)
(1,834,755)
(32,148)
5,941,198
8,383,547
(321,950)
(2,861,553)
29,567
5,229,611
24.2 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 2.5 occur.
Tax losses:
- Revenue losses (China)
- Capital losses
2020
$
2019
$
1,167,983 1,176,525
13,538,262 13,538,262
64
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
25. Issued Capital
122,479,784 (2019: 122,479,784) Fully Paid Ordinary Shares
76,549,865 76,549,865
25.1 Reconciliation of ordinary shares (number)
2020
$
2019
$
At 1 July
At 30 June
25.2 Ordinary shares
2020
2019
122,479,784 122,479,784
122,479,784 122,479,784
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.
25.3 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
Net debt to equity ratio
2019
2020
$
$
7,133,146
10,917,671
93,725,284 100,273,981
11.65%
7.11%
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.
65
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
25. Issued Capital (continued)
25.4 Share based payments
As at 30 June 2020, 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 in 2017 after certain milestones with respect
to the Senegal project were achieved by a project consultant. This represents a 3% equity interest
in the project, calculated by reference to the Senegal project’s fair value and to be satisfied by the
issue of shares in a Senegalese subsidiary.
26. Reserves
26.1 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 2020 is $13,344,047 (2019:
$13,599,924).
26.2 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 balance at 30 June 2020 is $913,104, which was
recognised during the year ended 30 June 2017.
66
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
27. Holding Company Statement of Financial Position
ASSETS
Current assets
Cash and cash equivalents
Total current assets
Non-current assets
Investment in subsidiary
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Accruals and other payables
Amount due to a subsidiary
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Foreign currency translation reserve
Retained earnings
TOTAL EQUITY
2
Note
2020
$
2019
$
2,250
2,250
2,243
2,243
76,549,866
76,549,866
76,552,116
76,549,866
76,549,866
76,552,109
139,423
714,443
853,866
853,866
100,429
471,282
571,711
571,711
75,698,250
75,980,398
25
76,549,865
76,549,865
(64,505)
(787,110)
(53,362)
(516,105)
75,698,250
75,980,398
read in conjunction with the accompanying notes.
Mdm Kang Rong
Mr. Gerard King
67
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
28. 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% (2019: 27.5%)
2020
$
2019
$
286,770
286,770
The above amount represents the balance on the franking account at the end of the financial year arising
from income tax payable.
29. Related Party Transactions
29.1 Parent entity
Astron Corporation Limited is the parent entity of the Group.
29.2 Subsidiaries
Interests in subsidiaries are disclosed in note 15.
29.3 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
Superannuation
Total post-employment benefits
Total Key Management Personnel remuneration
2020
$
2019
$
768,520
9,672
778,192
20,531
20,531
798,723
921,049
9,270
930,319
31,956
31,956
962,275
68
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
29. Related Party Transactions (continued)
29.3 Transactions with key management personnel (continued)
Directors’ Emoluments
Directors’ emoluments disclosed pursuant to Section 383 of the Hong Kong Companies Ordinance
(Cap.622) and the Companies (Disclosure of Information about Benefits of Directors) Regulation
(Cap.622G) are as follows:
Short term employee benefits
Salaries and fees (note)
Post-employment benefits
Total directors’ emoluments
2020
$
2019
$
474,167
-
474,167
609,589
10,411
620,000
Note:
The amount includes management fees of $250,000 payable to Juhua International Limited and
$104,167 to P T Arafua Mining Limited, for which the beneficial owners are Mdm Kang Rong and Mr
Alex Brown respectively.
29.4 Interest free loans
All subsidiary companies are wholly owned with any interest free loans being eliminated on
consolidation.
29.5 Management services provided
Management and administrative services are provided at no cost to subsidiaries. Astron Limited
predominantly incurs directors fees, management and administration services for the Group.
Although these costs are applicable to Group as a whole, these costs are not reallocated/recharged
to individual entities within the Group.
29.6 Related party loans
During the year ended 30 June 2020 and 2019, Executive Director Mdm Kang Rong advanced
Astron $5,851,468 and $177,729 respectively for working capital. The loans are provided interest
free and repayable on demand. At 30 June 2020, no repayments have been made against these
loans.
During the year ended 30 June 2020, Executive Director Mr Tiger Brown advanced Astron $250,000
for working capital. The loan is provided interest free and repayable on demand. At 30 June 2020
no repayments have been made against this loans.
As at 30 June 2020 there are unpaid Directors and management fees payable to Directors’ related
entities as follows:
- Mdm Kang Rong, Juhua International Limited of $1,443,732 (2019: $1,193,732); and
- Mr Alex Brown, P T Arafua Mining Limited of $1,450,005 (2019: $1,345,839)
The above liabilities have been subordinated and will not be called upon unless and until such time
that the Company has available funds or is generating positive operating cash flows from operations.
69
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
30. Commitments
30.1 Operating lease commitments
Non-cancellable operating leases contracted for but not capitalised in the financial statements
$8,290 (2019: $45,264).
30.2 Capital expenditure commitments
Capital expenditure commitments contracted for:
- Chinese capital projects
- Senegal
- DMS
2020
$
2019
$
237,665
747,272
55,000
1,039,937
1,490,524
722,234
817,953
3,030,711
30.3 Water rights
In accordance with the terms of the contract with GWM Water, the usage fee in 2018 was $218,178
per quarter for the remaining life of the water rights. GWM Water has agreed an extension of up to
4 years subject to terms and conditions in accordance with the “Deed of Variation” as set out in note
17(d). No usage fee was charged in 2020.
30.4 Guarantees between subsidiaries
Astron Limited has provided a letter of support to the Victorian Department of Economic
Development, Jobs, Transport and Resources to fund any expenditure incurred by Donald Mineral
Sands Pty Limited.
30.5 Other commitments and contingencies
Land
In 2008, Astron Titanium (Yingkou) Co Ltd holds two land sites acquired 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 by the Group in relation to the right-of-
use assets/land use rights. As at the 30 June 2020, the net book value of this land is $2,983,286
(2019: $3,090,641).
Minimum expenditure on exploration and mining licenses
To maintain the Exploration and Mining License’s at Donald, the Group is required to spend
$1,201,800 on exploration and development expenditure over the next year (2019: $556,800). The
minimum expenditure amount per annum will normally increase over the life of an exploration license.
The amount of this expenditure could be reduced should the Group decide to relinquish land.
70
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
31. Cash Flow Information
31.1 Reconciliation of cash provided by operating activities with loss before income tax
Loss before income tax expense
Non-cash flows in loss from ordinary activities
Depreciation and amortisation
Reversal of provision for impairment on receivables
Fair value loss on financial assets at fair value through profit or
loss
Decrease/(Increase) in trade and other receivables
Increase in inventories
Increase in trade and other payables and provisions
Effects on foreign exchange rate movement
2020
$
(6,204,703)
2019
$
(2,271,912)
1,641,625
(469,657)
843,431
(411,395)
5,044
848,020
(2,581,503)
4,612,142
796,727
(1,352,305)
23,794
(1,301,375)
(5,941,132)
1,971,486
361,786
(6,725,317)
31.2 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
Note
2020
$
2019
$
10
10
41,798
513,706
555,504
10,222
1,677,327
1,687,549
31.3 Loan facilities
Details of the loan facilities of the Group at reporting dates are as follows:
Available loan facilities
Utilised loan facilities (note 22(b))
Unused loan facilities
2020
$
2019
$
4,526,572
(3,106,874)
1,419,698
7,059,229
(6,021,107)
1,038,122
As at 30 June 2020 and 2019, its loan facilities were secured by assets held by its China subsidiary.
71
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
31. Cash Flow Information (continued)
31.4 Non-cash financing 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.
The table below details changes in the Group’s liabilities arising from financing activities. Liabilities
arising from financing activities are those for which cash flows were or future cash flows will be,
classified in the Group’s consolidated statement of cash flows from financing activities.
At 1 July 2018
Changes from cash flows:
Proceeds from bank borrowings
Loan expense paid
Total changes from financing cash flows:
Interest expense
Exchange adjustments
At 30 June 2019 and 1 July 2019
Changes from cash flows:
Partial settlement of offtake agreement
Repayment of borrowings
Proceeds from bank borrowings
Loan expense paid
Total changes from financing cash flows:
Interest expense
Exchange adjustments
At 30 June 2020
31.5 Acquisition of entities
Borrowings
(note 22)
$
Contract
liabilities -
Wensheng
(note 21(a))
$
76,080
4,080,567
6,797,319
(178,134)
6,619,185
178,134
259,747
7,133,146
-
-
-
-
70,906
4,151,473
-
(205,753)
(8,187,404)
12,034,612
(259,193)
3,588,015
-
-
-
(205,753)
259,193
(62,683)
-
(37,413)
10,917,671
3,908,307
During the current or last years, the Company did not invest any funds into its Chinese subsidiaries.
During the current year, the Group did not acquire any new entities.
31.6 Disposal of entities
There were no disposals of entities in the current or prior financial years.
31.7 Restrictions on cash
Bank balances did not include any letter of credit deposits at 30 June 2020 (2019: Nil).
72
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
32. Employee Benefit Obligations
As at 30 June 2020 and 2019, the majority of employees are employed in China. In accordance with
normal business practice in China, employee benefits must be fully utilised annually. Chinese provisions
for employee entitlements at year end would be insignificant.
33. Subsequent Events
As at 30 June 2020, gross balance of $1,495,660 is due to the Group from the 2015 sale of surplus land
in China. Subsequent to year end, $399,175 has been received against this receivable in July 2020. For
further details, refer to note 19.
Saved as disclosed elsewhere in these financial statements, 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.
34. Financial Risk Management
34.1 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 banks, term deposits greater than 90 days, trade
and other receivables and payables and financial assets at fair value through profit or loss.
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:
73
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
34. Financial Risk Management (continued)
34.2 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, around half of cash, cash equivalents and term deposits greater
than 90 days are held with institutions with a AA- to BA1 credit rating. As set out in note 10.2,
insignificant amount of the Group’s cash was held with a local PRC bank which did not have any
credit rating.
In respect of trade receivables, there is concentration of credit risk as 14% (2019: 61%) of the
Group’s trade debtors is from 5 (2019: 4) 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 $1,495,660 (2019: $2,962,631) being the gross land sale receivable from
the Yingkou Provincial government. The directors are of the opinion that the credit risk on this
receivable to be low for the reasons set out in note 19.
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 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
Trade and other receivables - current and non-current
Total
2020
$
555,504
46,112
4,590,830
5,192,446
2019
$
1,687,549
46,112
6,722,263
8,455,924
74
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
34. Financial Risk Management (continued)
34.2 Credit risk (continued)
The Group measures loss allowances for trade receivables at an amount equal to lifetime ECLs,
which is calculated using a provision matrix. As the Group’s historical credit loss experience does
not indicate significantly different loss patterns for different customer segments, the loss allowance
based on past due status is not further distinguished between the Group’s different customer bases.
The following table presents the gross carrying amount and the lifetime expected credit loss in
respect of individually assessed trade receivables as at 30 June 2020 and 2019:
Gross carrying amount
Lifetime expected credit loss
Net carrying amount
2020
$
113,460
(113,460)
-
2019
$
377,519
(377,519)
-
The following table presents the gross carrying amount under collective measurement (after
individual assessed loss allowance) and the provision for impairment loss in respect of collectively
assessed trade receivables as at 30 June 2020:
Current (not past due)
Expected
loss rate
%
0.00%
Gross
carrying
amount
$
2,614,472
2,614,472
Loss
allowance
$
-
-
The following table presents the gross carrying amount under collective measurement (after
individual assessed loss allowance) and the provision for impairment loss in respect of collectively
assessed trade receivables as at 30 June 2019:
Current (not past due)
Expected
loss rate
%
Gross
carrying
amount
$
Loss
allowance
$
0.00%
3,583,539
3,583,539
-
-
Expected credit loss is close to zero as the trade receivables have no recent history of default, the
impact of the expected loss from collectively assessed trade receivables to be immaterial.
75
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
34. Financial Risk Management (continued)
34.3 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 30 June 2020, the Group had cash of $555,504 (2019:
$1,687,549).
Maturity analysis
Carrying
Amount
$
Contractual
Cash flows
$
Note
< 6 months
$
> 6 months
$
Year ended 30 June 2020
Non-derivatives
Trade and note payables
Other payables
Borrowings
Total non-interest bearing
liabilities
Borrowings
Total interest bearing liabilities
Total liabilities
Year ended 30 June 2019
Non-derivatives
Trade and note payables
Other payables
Borrowings
Total non-interest bearing
liabilities
Borrowings
Total interest bearing liabilities
Total liabilities
20
20
22
22
20
20
22
22
5,793,316
7,318,762
6,720,305
5,793,316
7,318,762
6,720,305
5,566,987
7,318,762
6,720,305
226,329
-
-
19,832,383 19,832,383 19,606,054
226,329
4,197,366
4,197,366
2,758,671
4,197,366
2,758,671
4,197,366
24,029,749 24,029,749 22,364,725
1,438,695
1,438,695
1,665,024
4,693,823
4,935,202
177,729
4,693,823
4,935,202
177,729
4,693,823
4,935,202
177,729
9,806,754
9,806,754
9,806,754
6,955,417
6,955,417
6,955,417
6,955,417
6,955,417
6,955,417
16,762,171 16,762,171 16,762,171
-
-
-
-
-
-
-
76
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
34. Financial Risk Management (continued)
34.4 Fair value
The fair values of listed investments have been valued at the quoted market price at the end of the
reporting period. Other assets and other liabilities approximate their carrying value.
At 30 June 2020 and 2019, the aggregate fair values and carrying amounts of financial assets and
financial liabilities approximate their carrying amounts.
Financial assets at fair value through profit or loss are recognised in the statement of financial
position of the Group according to the hierarchy stipulated in HKFRS 7.
Financial assets at fair value
through profit or loss
ASX Listed equity shares - Level 1
The Group does not have any Level 2 or 3 financial assets.
34.5 Price risk
2020
$
2019
$
20,322
20,322
25,366
25,366
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 2020, the maximum exposure of price risk to the Group was the financial assets at
fair value through profit or loss for $20,322 (2019: $25,366). 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
2020
$
20,322
20,322
2019
$
25,366
25,366
77
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2020
34. Financial Risk Management (continued)
34.5 Price risk (continued)
Sensitivity Analysis
2020
$
2019
$
Increase/(Decrease) in
share price
Increase/(Decrease) in
share price
+10%
-10%
+10%
-10%
Listed equity shares on ASX
Profit before tax – increase/(decrease)
2,032
(2,032)
2,537
(2,537)
The above analysis assumes all other variables remain constant.
34.6 Interest rate risk
The Group manages its interest rate risk by monitoring available interest rates and maintaining an
overriding position of security whereby around half the Group’s cash and cash equivalents and term
deposits are held with institutions with a AA- to BA1 credit rating while the other half is held with an
unrated bank in PRC.
78
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N
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2020
34. Financial Risk Management (continued)
34.6 Interest rate risk (continued)
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.
Cash at bank
Term deposits greater than 90-days
Borrowings
Tax charge of 27.5%
Total
34.7 Foreign currency risk
+ 1% (100 basis points)
-1% (100 basis points)
2020
$
5,137
461
(41,974)
(36,376)
10,003
(26,373)
2019
$
16,773
461
(69,554)
(52,320)
14,388
(37,932)
2020
$
(5,137)
(461)
41,974
36,376
(10,003)
26,373
2019
$
(16,773)
(461)
69,554
52,320
(14,388)
37,932
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 RMB. Current trading terms ensure that foreign currency risk is
reduced by sales terms being cash on delivery where possible.
35. Impact on COVID-19
The World Health Organisation declared coronavirus and COVID-19 a global health emergency on 30
January 2020. Since then, the Group has experienced some disruption to its operations in respects of
the interruptions to production due to government lockdowns. This has caused the Group to have minimal
production activities carried out from January to March 2020.
The outbreak of COVID-19 in various countries in the world, the exacerbation, continuance or
reoccurrence of COVID-19 may continue to cause an adverse and prolonged impact on the economy and
social conditions in these regions, and may adversely affect the Group’s operations and financial position.
During the subsequent period and up to the report date, the Group was not aware of material adverse
effects on the financial performance and position as a result of the COVID-19 pandemic. The Group will
pay close attention to the development of the COVID-19 pandemic, perform further assessment of its
impact and take relevant measures.
80
Astron Corporation Limited
Declaration by Directors
For The Year Ended 30 June 2020
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 Hong
Kong Financial Reporting Standards and give a true and fair view of the consolidated entity’s financial
position as at 30 June 2020 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:
Mdm Kang Rong
Director
30 September 2020
Mr Gerard King
Director
81
Astron Corporation Limited
Investor Information
Investor Information
2020/2020 Financial Calendar (on or before)
Release of quarterly report
2020 Annual general meeting
Release of quarterly report
Release of half year report
Release of quarterly report
Release of Appendix 4E
31 October 2020
30 November 2020
30 January 2021
27 February 2021
30 April 2021
28 August 2021
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 7 September 2020.
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
Total holders
119
99
38
95
38
Units
53,589
293,102
294,358
3,505,841
118,329,888
% of
Issued Capital
0.04
0.24
0.24
2.86
96.62
Total
Non CDI holders
1-1,000
1,001-5,000
Total
Unmarketable Parcels
389
122,476,778
100.00
4
1
5
306
2,700
3,006
Minimum $ 500.00 parcel at $0.21 per unit
Minimum
parcel size
2,381
Holders
153
Units
113,177
87
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.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
KOBE Investments Ltd
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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