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2023 ReportABN 69 113 758 900 ANNUAL FINANCIAL REPORT 2020 CONTENTS Company information Directors’ Report Auditor’s Independence Declaration Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to and Forming Part of the Financial Statements Directors’ Declaration Independent Auditor’s Report Shareholder Details Interest in Mining Tenements Corporate Governance Statement 3 4 14 15 16 17 18 19 39 40 42 44 44 Athena Resources Limited Page 2 COMPANY INFORMATION ABN Directors Secretaries 69 113 758 900 D A Webster E W Edwards H W Wai E W Edwards P J Newcomb (Non-Executive Chairman) (Executive Director) (Executive Director) Registered Office 21 Millstream Rise Hillarys, WESTERN AUSTRALIA 6025 Postal Address Share Registry Auditor Bankers Securities Exchange Listing Telephone: +61 8 9307 7902 Email: ahn@athenaresources.com.au PO Box 1970 West Perth, WESTERN AUSTRALIA 6872 Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace Perth, WESTERN AUSTRALIA 6000 Telephone: +61 8 9323 2000 +61 8 9323 2033 Facsimile: HLB Mann Judd Level 4, 130 Stirling Street Perth, WESTERN AUSTRALIA 6000 Telephone: +61 8 9227 7500 +61 8 9227 7533 Facsimile: Westpac Banking Corporation 1257 Hay Street West Perth, WESTERN AUSTRALIA 6005 Athena Resources Limited shares are listed on the Australian Securities Exchange (Home Exchange – Perth) ASX Code: Shares AHN Website www.athenaresources.com.au Athena Resources Limited Page 3 DIRECTORS REPORT DIRECTORS REPORT Your Directors submit their report on the consolidated entity consisting of Athena Resources Limited (“Athena” or “the Company”) and its controlled entities (“Group”) for the financial year ended 30 June 2020. REVIEW OF OPERATIONS Exploration and Evaluation During the period under review Athena has undertaken additional test work defining the magnetic characteristic of the Byro Industrial Magnetite. The results of this confirm the suitability for retrieval and re-use in multiple industrial processing applications. Further work has been conducted to confirm suitability for dense media separation for the coal washing industry. The product is well within international specifications. The test work to date confirms the Athena product is suited to relatively high value markets as opposed to steel making, which sets it apart from other typical Mid West deposits. A small amount of by product may be sent to steel mills for blending with lower grade ore. Market research on uses for high purity magnetite indicates that there is a significant offtake opportunity for the Athena product in a number of industries. During the current season Athena intends to conduct further drilling at Byro to upgrade the 2004 JORC compliant resource both in tonnage and to the revised JORC Code. Once a 2012 JORC compliant resource is confirmed the Company will be in a position to publish an indicative valuation of the project. Athena Resources Limited Page 4 DIRECTORS REPORT (continued) Corporate On 13 August 2019 ASX suspended trading in Athena shares due to insufficient funds to satisfy the funding requirement under their guidelines. This was based on a Quarterly Cash Report for June 2019 which showed available cash of less than $10,000 and expected outgoings in the order of $200,000 in the forthcoming quarter. At the date of the suspension Athena shares had last traded at 2c per share. Since suspension and during the year ended 30 June 2020 the Company has raised $1,024,153 (Note 14) including a conversion of loans and net of issue costs and on 17 August 2020 the company announced the completion of a placement to raise a further $260,000. These transactions were at 3.5c per share. Ongoing funding remains a significant issue, however the Company has a commitment from the same Hong Kong investor for a further $700,000 at 3.5c per share. Covid-19 travel restrictions have caused unforeseen and unavoidable delays in settling this placement. Detailed results of activities and discussion thereon are contained in our Quarterly Activities Reports which are available on our website www.athenaresources.com.au. DIRECTORS The names of directors who held office during or since the end of the year and until the date of this report are as follows. Directors were in office for this entire period: David Arthur Webster Edmond William Edwards Hau Wan Wai Non-Executive Chairman Executive Director Executive Director PARTICULARS OF DIRECTORS AND COMPANY SECRETARIES David Arthur Webster Non-Executive Chairman Experience Mr Webster’s career in Australian agriculture includes developing an extensive run of farming properties in Western Australia and restructuring the Australian wool industry. More recently Mr Webster has been involved in significant Chinese investments in agriculture and associated infrastructure in Australia. He is currently a director of Australian Wool Innovation Limited (AWI) where he is also Chairman of the Finance and Audit Committee and he is a director of the Australian Wool Testing Authority Limited. Athena Resources Limited Page 5 DIRECTORS REPORT (continued) Mr Webster’s considerable commercial expertise together with many years of experience of working with government at the highest level, both in Australia and overseas, is of substantial value to Athena Resources. Interest in Shares 12,364,747 Fully Paid Shares Special Responsibilities Mr Webster is Chairman of the Audit Committee. Directorships held in listed entities In the 3 years immediately before the end of the financial year Mr Webster did not serve as a director of any other listed companies. Hau Wan Wai Executive Director Experience Hau Wan Wai (John) graduated from The University of Regina Canada in 1998 with a Bachelor of Administration, Major in Marketing. John speaks Mandarin, Cantonese and English. He was born and resides in Hong Kong. John is also the executive director of Brilliant Glory Industrial Corporation Ltd, the Hong Kong company which is the 100% parent of Brilliant Glory Investments. He has twenty years of international trade and relations experience having started his career as a merchandiser. He specialises in management of overseas customers to locate the sourcing of materials for mainland China in many different fields, and especially in Mineral resources. Interest in Shares 43,000,000 Fully Paid Shares Special Responsibilities Mr Wai is responsible for the promotion of the company in China. Directorships held in listed entities In the 3 years immediately before the end of the financial year Mr Wai did not serve as a director of any other listed companies. Athena Resources Limited Page 6 DIRECTORS REPORT (continued) Edmond William Edwards Executive Director and Joint Company Secretary Qualifications Mr Edwards is a Chartered Accountant with a Bachelor of Commerce from the University of Western Australia. Experience Mr Edwards has over 40 years of experience in the mining industry in Western Australia. He has previously been Executive Director or Finance Director of a number of listed mining and exploration companies having taken many of these companies through the initial public offering, then exploration, feasibility and finally into production. Interest in Shares 38,128,831 Fully Paid Shares Special Responsibilities Mr Edwards is responsible for the financial management of the company and is also a Joint Company Secretary. Directorships held in listed entities In the 3 years immediately before the end of the financial year Mr Edwards did not serve as a director of any other listed companies. Peter John Newcomb Joint Company Secretary Qualifications Mr Newcomb is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of Chartered Accountants Australia and New Zealand. Experience Mr Newcomb has over 40 years professional and commercial experience working in a number of industries and locations including London, Scotland, Singapore and Perth. The majority of his experience over the last ten years has been in the Resources industry in Western Australia. Athena Resources Limited Page 7 DIRECTORS REPORT (continued) PRINCIPAL ACTIVITIES The principal activity of the Group during the year was mineral exploration in Australia. OPERATING AND FINANCIAL REVIEW Review of Operations A review of operations of the Group during the financial year is contained in the Review of Operations section at the start of the Directors’ Report. 2020 $ 2019 $ Consolidated loss after income tax for the financial year 334,018 434,995 Financial Position At 30 June 2020 the Company has cash reserves of $17,992. Dividends No dividends were paid during the year and no recommendation is made as to dividends. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS In the opinion of the Directors, there were no significant changes in the state of affairs of the Group that occurred during the financial year under review not otherwise disclosed in this report or in the consolidated accounts. MATTERS SUBSEQUENT TO THE END OF FINANCIAL YEAR Except as stated in Note 28, since the end of the financial year under review and the date of this report, there has not arisen any matter, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to significantly affect the operations of the consolidated entity, in the current or subsequent financial years. LIKELY DEVELOPMENTS AND EXPECTED RESULTS The Company intends to continue its exploration activities with a view to the commencement of mining operations as soon as possible. Further information on likely developments in the operations of the Group and the expected results of operations have not been included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the Company. Athena Resources Limited Page 8 DIRECTORS REPORT (continued) MEETINGS OF DIRECTORS The following table sets out the number of meetings of the Company’s Directors held during the year ended 30 June 2020, and the number of meetings attended by each Director. These meetings included matters relating to the Remuneration and Nomination Committees of the Company. David Arthur Webster Edmond William Edwards Hau Wan Wai Number eligible to attend 2 2 2 Number attended 2 2 2 The Company also attended to other Board business via several circular resolutions of the Board. AUDIT COMMITTEE The audit committee was comprised of the non-executive director Mr D Webster. During the year ended 30 June 2020, Mr D Webster held two meetings of the Audit Committee. Athena Resources Limited Page 9 DIRECTORS REPORT (continued) REMUNERATION REPORT (AUDITED) This report details the nature and amount of remuneration for each member of the key management personnel of Athena Resources Limited. The following persons acted as directors during or since the end of the financial year: David Arthur Webster Edmond William Edwards Hau Wan Wai Non-Executive Chairman Executive Director Executive Director The Company has no other key management personnel. The information provided in the remuneration report includes remuneration disclosures that are required under Accounting Standards AASB 124 “Related Party Disclosures”. These disclosures have been transferred from the financial report and have been audited. Remuneration policy The board policy is to remunerate directors at market rates for time, commitment and responsibilities. The board determines payment to the 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 directors’ fees that can be paid is subject to approval by shareholders in general meeting, from time to time. Fees for non-executive directors are not linked to the performance of the consolidated entity. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold securities in the company. The company’s aim is to remunerate at a level that will attract and retain high-calibre directors and employees. Company officers and directors are remunerated to a level consistent with the size of the company. All remuneration paid to directors and executives is valued at the cost to the company and expensed. Performance-based remuneration The company does not pay any performance-based component of remuneration. Details of remuneration for year ended 30 June 2020. Directors’ Remuneration No salaries, commissions, bonuses or superannuation were paid or payable to directors during the year. Remuneration was by way of fees (as detailed below) paid monthly in respect of invoices issued to the Company by the Directors or Companies associated with the Directors in accordance with agreements between the Company and those entities. No other short-term or long-term benefits were provided during the current or prior year. Details of the agreements are set out below. Athena Resources Limited Page 10 DIRECTORS REPORT (continued) Agreements in respect of cash remuneration of Directors Mr. Edwards is an Executive Director responsible for the financial operations of the Company. The Company has an agreement with Tied Investments Pty Ltd to provide the management services of Mr. Edwards to the Company in relation to its corporate activities on normal commercial terms and conditions. An annual fee of $135,000 excluding GST was paid during the year. Mr. Edwards is a director of Tied Investments Pty Ltd. The Company may terminate the contract by giving three months’ notice. Tied Investments Pty Ltd may terminate by giving three months’ notice. Mr David Webster is a Non-Executive Director. Fees payable to Mr Webster are detailed below. No fee was paid to Mr Wai. The Directors are entitled to reimbursement of out-of-pocket expenses incurred whilst on Company business. The total remuneration paid to directors is summarised below: Year ended 30 June 2020 Director Associated Company E W Edwards D A Webster H W Wai Tied Investments Pty Ltd Cobpen Co Investments Pty Ltd Year ended 30 June 2019 Director Associated Company E W Edwards D A Webster H W Wai Tied Investments Pty Ltd Cobpen Co Investments Pty Ltd Fees $ 135,000 36,000 - 171,000 Fees $ 180,000 48,000 - 228,000 Aggregate amounts payable to Directors and their personally related entities. Current Accounts Payable (including GST) Loans 2020 $ 849,800 80,000 929,800 Athena Resources Limited Total $ 135,000 36,000 - 171,000 Total $ 180,000 48,000 - 228,000 2019 $ 810,200 111,900 922,100 Page 11 DIRECTORS REPORT (continued) During the year net repayments of unsecured interest free loans were made to Directors as follows: Mr Edwards Mr Wai $20,000 $11,900 There were no performance related payments, option or share based payments, superannuation payments or other benefits made during the year. Directors’ Shareholdings in the Company Director Hau Wan Wai E W Edwards D A Webster Balance 1 July 2019 Issued during the year Balance 30 June 2020 43,000,000 38,128,831 12,364,747 93,493,578 - - - - 43,000,000 38,128,831 12,364,747 93,493,578 The shareholding disclosed for Hau Wan Wai is held in Brilliant Glory Industrial Corp Ltd of which Hau Wan Wai is sole Director. The Company received no specific feedback on its Remuneration Report at the 2019 Annual General Meeting. End of Remuneration Report SHARE OPTIONS As at the date of this report, there were no options over unissued ordinary shares in the parent entity. ENVIRONMENTAL ISSUES The Group has conducted exploration activities on mineral tenements. The right to conduct these activities is granted subject to environmental conditions and requirements. The group aims to ensure a high standard of environmental care is achieved and, as a minimum, to comply with relevant environmental regulations. There have been no known breaches of any of the environmental conditions. INDEMNIFICATION OF DIRECTORS During the financial year, the Company has given an indemnity or entered into an agreement to indemnity as follows: Athena Resources Limited Page 12 DIRECTORS REPORT (continued) The Company has entered into agreements with Mr E Edwards, Mr D Webster and Mr H Wai to indemnify them against any liability incurred by them as an officer of the Company including costs and expenses of successfully defended legal proceedings. AUDITOR HLB Mann Judd continues in office in accordance with section 327 of the Corporations Act 2001. NON-AUDIT SERVICES No non-audit services were provided by our auditors, HLB Mann Judd, during the year ended 30 June 2020. AUDITOR’S INDEPENDENCE DECLARATION The auditor’s independence declaration as set out on page 14 has been received for the year ended 30 June 2020 and forms part of this directors’ report. PROCEEDINGS ON BEHALF OF COMPANY No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. Signed in accordance with a resolution of the directors. ............................................................... E W EDWARDS Executive Director Dated at Perth this 30th day of September, 2020. Athena Resources Limited Page 13 AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the consolidated financial report of Athena Resources Limited for the year ended 30 June 2020, I declare that to the best of my knowledge and belief, there have been no contraventions of: a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) any applicable code of professional conduct in relation to the audit. Perth, Western Australia 30 September 2020 N G Neill Partner Athena Resources Limited Page 14 STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020 Expenses Directors’ remuneration Salaries and employee costs Legal and professional Office and communication Listing and share registry Financial expenses Depreciation Loss on disposal of fixed assets Other expenses Note Consolidated 2020 $ 2019 $ 171,000 144,300 69,600 67,523 31,308 12,082 5,667 1,376 57,833 7 228,000 153,300 77,050 70,544 39,756 12,682 5,651 - 38,418 Total Expenses 560,689 625,401 Recoveries to capitalised exploration 8 (200,300) (170,400) Expenses net of recoveries 360,389 455,001 Other income 2 (26,371) (20,006) LOSS BEFORE INCOME TAX BENEFIT 334,018 434,995 Income tax benefit 4 - - NET LOSS FOR THE YEAR 334,018 434,995 Other comprehensive income - - TOTAL COMPREHENSIVE LOSS FOR THE YEAR 334,018 434,995 Basic loss per share (cents per share) 24 0.11 0.18 Athena Resources Limited Page 15 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020 CURRENT ASSETS Cash and cash equivalents Trade and other receivables Total Current Assets NON-CURRENT ASSETS Note Consolidated 2020 $ 2019 $ 5 6 17,992 34,737 5,913 37,040 52,729 42,953 Plant and equipment Mineral exploration and evaluation 7 8 1,266 8,839,163 8,309 8,409,884 Total Non-Current Assets TOTAL ASSETS CURRENT LIABILITIES Trade creditors and accruals Deferred creditors Related party loans Third party loans 8,840,429 8,418,193 8,893,158 8,461,146 9 10 11 12 314,801 981,800 100,000 - 372,524 962,200 111,900 208,100 Total Current Liabilities 1,396,601 1,654,724 TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Accumulated losses TOTAL EQUITY 1,396,601 1,654,724 7,496,557 6,806,422 14 14,944,446 13 (7,447,889) 7,496,557 13,920,293 (7,113,871) 6,806,422 Athena Resources Limited Page 16 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020 Consolidated Year ended 30 June 2019 Issued Capital $ Accumulated Losses $ Total $ Balance at 1 July 2018 Entitlements Issue Issue Costs Comprehensive loss for the year Balance at 30 June 2019 13,400,888 541,901 (22,496) - 13,920,293 (6,678,876) - - (434,995) (7,113,871) Year ended 30 June 2020 Balance at 1 July 2019 Issued during the year Issue Costs Comprehensive loss for the year Balance at 30 June 2020 13,920,293 1,037,900 (13,747) - 14,944,446 (7,113,871) - - (334,018) (7,447,889) 6,722,012 541,901 (22,496) (434,995) 6,806,422 6,806,422 1,037,900 (13,747) (334,018) 7,496,557 Athena Resources Limited Page 17 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020 Note Consolidated 2020 $ 2019 $ CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers Interest received (308,597) 46 (376,230) 6 Net Cash (Outflow) from Operating Activities 15 (308,551) (376,224) CASH FLOWS FROM INVESTING ACTIVITIES Payments for mineral exploration and evaluation (497,270) (471,698) Net Cash (Outflow) From Investing Activities (497,270) (471,698) CASH FLOWS FROM FINANCING ACTIVITIES Share Issues net of costs Repayments of borrowings from related parties Proceeds from borrowings from related parties Proceeds from borrowings from non-related parties 11 11 12 671,000 (65,400) 53,500 158,800 541,901 (48,100) 102,848 218,100 Net Cash Inflow from Financing Activities 817,900 814,749 Net increase/(decrease) in cash held 12,079 (33,173) Cash and cash equivalents at beginning of the financial year 5,913 39,086 Cash and cash equivalents at the end of the financial year 5 17,992 5,913 Athena Resources Limited Page 18 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 Notes to the Accounts NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Statement of Compliance These consolidated financial statements are general purpose financial statements prepared in accordance with the requirements of the Corporations Act 2001 including Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board (‘AASB’) and applicable accounting standards. The accounting policies and methods of computation adopted are consistent with those of the previous financial year and corresponding reporting period except for the impact of the new standards and interpretations effective 1 July 2019 disclosed below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards. The financial statements were authorised for issue on 30 September 2020. The financial statements comply with Australian Accounting Standards, which include Australian equivalents International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Reporting Standards (IFRS). to Basis of Preparation This report has been prepared on a historical cost basis. Cost is based on the fair value of the consideration given in exchange for assets. The company is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise noted. Reporting Basis and Conventions (Going Concern) The financial report has been prepared on the basis of accounting principles applicable to a going concern, which assumes the commercial realisation of the future potential of Athena’s assets and the discharge of its liabilities in the normal course of business. The Board considers that Athena is a going concern and recognises that additional funding is required to ensure that it can continue to fund its operations and further develop its mineral exploration and evaluation assets during the twelve-month period from the date of approval of this financial report. The Company has access to the following potential source of funding: • The placement of securities under the ASX Listing Rule 7.1 or otherwise; • An excluded offer pursuant to the Corporations Act 2001; • The sale of assets; or • The continued deferral of creditors payments Athena Resources Limited Page 19 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 Notwithstanding the fact that the Group incurred an operating loss of $334,018 for the year, has a working capital deficit of $1,343,872 at balance date and a net cash outflow from operating activities of $294,804 for the year and from mineral exploration and evaluation of $497,270, the Directors are of the opinion that the Company is a going concern for the following reasons: Subsequent to year-end, on the 17 August 2020 the Group raised $260,000 of equity capital via an issue of 7,428,571 ordinary shares at $0.035 cents. In addition, discussions are underway with major shareholders for a further $900,000. The funds raised will be used to meet the ongoing working capital requirements of the Group. The Company has carried out a review of cash outflow from operating activities and closed the office with executives operating from home. In addition the Company has received a number of approaches to Joint Venture the Byro Central and Byro East (Milly Milly) base metals projects. This has the potential to receive reimbursement of previous expenditure and reduce outgoings while the company seeks funding for the Byro Industrial Minerals project. Additionally, certain related parties have confirmed that debt totalling $981,800 will be deferred until such time as the Group has raised sufficient funds to settle all of its existing debts to non-related parties. The Directors also anticipate that a further equity raising will be completed in the 2021 financial year. Accordingly, the directors believe that subject to prevailing equity market conditions, Athena will obtain sufficient funding to enable it to continue as a going concern and that it is appropriate to adopt that basis of accounting in the preparation of the financial report. Should Athena be unable to continue to defer payment of creditors or to obtain sufficient funding as outlined above, there is a material uncertainty that may cast significant doubt whether it will be able to continue as a going concern and therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. After considering the uncertainties above, the Directors have a reasonable expectation that the Group will be able to obtain additional funding that will provide the Group with sufficient resources to continue for the foreseeable future. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts (in particular the capitalised deferred exploration expenditure of $8,839,163) or to the amounts and classification of liabilities that might be necessary should it not continue as a going concern. Athena Resources Limited Page 20 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 Significant accounting judgements and key estimates The preparation of financial reports requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. In preparing this report, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial report for the year ended 30 June 2019. Adoption of New and Revised Standards In the year ended 30 June 2020, the directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Group’s operations and effective for annual reporting periods beginning on or after 1 July 2019. It has been determined by the directors that there is no impact, material or otherwise, of the new and revised standards and interpretations on the Group’s business and therefore, no change is necessary to Group accounting policies. The directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2020. As a result of this review the directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group’s business and, therefore, no change necessary to Group accounting policies. AASB 16 Leases AASB 16 Leases supersedes AASB 117 Leases. The Group has adopted AASB 16 from 1 July 2019 which has resulted in changes in the classification, measurement and recognition of leases. The changes result in almost all leases where the Group is the lessee being recognised on the Statement of Financial Position and removes the former distinction between ‘operating’ and ‘finance’ leases. The new standard requires recognition of a right-of-use asset (the leased item) and a financial liability (to pay rentals). The exceptions are short-term leases and leases of low value assets. The Group has adopted AASB 16 using the modified retrospective approach under which the reclassifications and the adjustments arising from the new leasing rules are recognised in the opening Statement of Financial Position on 1 July 2019. Under this approach, there is no initial Impact on accumulated losses, and comparatives have not been restated. Impact on adoption of AASB 16. All Group leases have a term of less than 12 months and the Group has applied the optional exemption to not capitalise these leases and instead account for the lease expense on a straight-line basis over the lease term. Athena Resources Limited Page 21 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 Therefore, the adoption of AASB 16 resulted in the recognition of right-of-use assets of $nil and lease liabilities of $nil in respect of all operating leases. The net impact on accumulated losses on 1 July 2019 was $nil. Segment Reporting Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Athena Resources Limited. Plant and Equipment Plant and equipment are measured on the cost basis less accumulated depreciation and accumulated impairment losses. The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows which will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future consolidated benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. Depreciation The depreciable amount of all fixed assets including capitalised lease assets, but excluding computers, is depreciated on a reducing balance commencing from the time the asset is held ready for use. Computers are depreciated on a straight-line basis over their useful lives to the consolidated entity commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Plant and Equipment Depreciation Rate 15 – 50% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Athena Resources Limited Page 22 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to accumulated losses. Accounting Policies (a) Principles of Consolidation A controlled entity is any entity controlled by Athena Resources Limited. Control exists where Athena Resources Limited has the capacity to dominate the decision making in relation to the financial and operating policies of another entity so that the other entity operates with Athena Resources Limited to achieve the objectives of Athena Resources Limited. All controlled entities have a 30 June financial year-end. All intercompany balances and transactions between entities in the consolidated entity, including any unrealised profit or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity. Where controlled entities have entered or left the Group during the year, their operating results have been included from the date control was obtained or until the date control ceased. (b) Income Tax The charge for current income tax expenses is based on the profit for the year adjusted for any non-assessable or disallowable items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance date. Deferred tax is accounted for in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised, or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. Athena Resources Limited Page 23 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 (c) Plant and Equipment Each class of plant and equipment is carried at cost less, where applicable, any accumulated depreciation. (d) Mineral Exploration and Evaluation Expenditure Exploration and evaluation expenditure incurred is either written off as incurred or accumulated in respect of each identifiable area of interest. Tenement acquisition costs are initially capitalised. Costs are only carried forward to the extent that they are expected to be recouped through the successful development of the areas, sale of the respective areas of interest or where activities in the area have not yet reached a stage, which permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full in the year in which the decision to abandon the areas is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Restoration, rehabilitation and environmental costs necessitated by exploration and evaluation activities are expensed as incurred and treated as exploration and evaluation expenditure. (e) Impairment of Assets At each reporting date, the Directors review the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the assets, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. (f) Provisions Provisions are recognised where there is a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result, and that outflow can be reliably measured. (g) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less. Athena Resources Limited Page 24 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 (h) Revenue Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. All revenue is stated net of the amount of goods and service tax (GST). (i) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expenses. Receivables and payables in the statement of financial position are shown inclusive of GST. (j) Issued Capital Issued and paid up capital is recognised at the fair value of the consideration received by the company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received. (k) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. (l) Impairment of Exploration Expenditure The Directors assess impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of exploration expenditure. In making this assessment, the Directors have considered the existence of any possible indicators of impairment per AASB 6 “Exploration for and Evaluation of Mineral Resources”. On the basis of this review, the Directors have not written off any exploration expenditure during the financial year and are satisfied that no impairment is present at 30 June 2020. (m) Critical Accounting Estimates and Judgements The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values 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 may differ from these estimates. Athena Resources Limited Page 25 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 NOTE 2 – REVENUE Revenue from non-operating activities Interest received Covid-19 Cash Boost Contribution to overheads from Brilliant Glory Total revenue Consolidated 2020 $ 2019 $ 46 26,325 - 26,371 6 - 20,000 20,006 NOTE 3 – LOSS FROM ORDINARY ACTIVITIES BEFORE TAX EXPENSE Expenses Depreciation of non-current assets: Office furniture and equipment Motor vehicles Total depreciation of non-current assets NOTE 4 – INCOME TAX 642 5,025 5,667 640 5,011 5,651 No income tax is payable by Athena as each entity in the Group incurred a loss for tax purposes for the year and each has available recoupable income tax losses at balance date. The aggregate of income tax attributable to the financial year differs from the amount calculated on the operating loss. The differences are calculated as follows: Loss for the year Income tax calculated at 27.5% (2019 30%) Deferred tax asset not recognised Income Tax Attributable to Operating Loss Consolidated 2020 $ 2019 $ (334,018) (434,995) (91,855) 91,855 - (130,498) 130,498 - Athena Resources Limited Page 26 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 Accumulated Tax Losses Loss for the year Tax free income – cash boost Disallowable expenses Exploration expenditure Timing differences on depreciation of assets Section 40-880 deduction Tax loss for the year Tax losses brought forward Current year loss Tax losses carried forward 334,018 26,325 (11,014) 429,279 190 19,220 798,018 434,995 - (13,248) 730,485 (28) 26,754 1,179,014 13,252,773 798,018 14,050,791 12,073,759 1,179,014 13,252,773 The potential deferred tax asset has not been brought to account in the financial report at 30 June 2020 as the Directors do not believe it is appropriate to regard the realisation of the asset as probable. This asset will only be obtained if: (a) The company and its controlled entities derive future assessable income of an amount and type sufficient to enable the benefit from the deductions for the tax losses and the unrecouped exploration expenditure to be realised; (b) The company and its controlled entities continue to comply with the conditions for deductibility imposed by tax legislation; and (c) No changes in tax legislation adversely affect the company and its controlled entities in realising the benefit from the deductions for the tax losses and unrecouped exploration expenditure. Tax loss comparatives have been restated to reconcile to the prior year tax return. Franking Credits No franking credits are available at balance date for the subsequent financial year. NOTE 5 – CASH AND CASH EQUIVALENTS Cash at bank and on hand Consolidated 2020 $ 17,992 17,992 2019 $ 5,913 5,913 Athena Resources Limited Page 27 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 NOTE 6 – TRADE AND OTHER RECEIVABLES Current Debtors GST Receivable NOTE 7 – PLANT AND EQUIPMENT 4,872 29,865 34,737 3,814 33,226 37,040 Year ended 30 June 2019 Balance at 1 July 2018 Additions Disposals Depreciation Charge Balance at 30 June 2019 Year ended 30 June 2020 Balance at 1 July 2019 Additions Disposals Depreciation Charge Balance at 30 June 2020 Cost $ Accumulated Depreciation $ Net Book Value $ 201,554 - - - 201,554 201,554 - (130,198) - 71,356 (187,594) - - (5,651) (193,245) (193,245) - 128,822 (5,667) (70,090) 13,960 - - (5,651) 8,309 8,309 - (1,376) (5,667) 1,266 NOTE 8 – MINERAL EXPLORATION AND EVALUATION Consolidated 2020 $ 2019 $ Balance at 1 July 2019 8,409,884 7,679,399 Expenditure during the year on external costs and services Native title on grant of mining leases Overheads recovered through timesheet allocations Contribution to tenement expenditure by Brilliant Glory 228,979 - 200,300 - 279,072 300,000 170,400 (18,987) Balance at 30 June 2020 8,839,163 8,409,884 Athena Resources Limited Page 28 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 NOTE 9 – TRADE CREDITORS AND ACCRUALS Current Trade creditors Native title on grant of mining leases Loan from employee NOTE 10 – DEFERRED CREDITORS 84,801 230,000 - 314,801 62,524 300,000 10,000 372,524 E Edwards D Webster R Kandiah P Newcomb E Edwards D Webster R Kandiah P Newcomb 1 July 2018 Fees (inc GST) Payment 30 June 2019 420,424 227,200 70,400 170,757 888,781 198,000 52,800 - 52,800 303,600 123,424 - 35,200 71,557 230,181 495,000 280,000 35,200 152,000 962,200 1 July 2019 Fees (inc GST) Payment 30 June 2020 495,000 280,000 35,200 152,000 962,200 148,500 39,600 - 44,000 232,100 (148,500) - - (64,000) (212,500) 495,000 319,600 35,200 132,000 981,800 Directors and Officers have agreed to defer payment of fee arrears until such time as the company is in a position to settle without prejudicing third party creditors. NOTE 11 – RELATED PARTY LOANS During the year, Directors and the Company Secretary extended unsecured interest free loans to the Company, for the purpose of supporting short-term cash flow as follows: Officer E Edwards D Webster H Wai P Newcomb 1 July 2019 $ Advances Repayments 30 June 2020 $ $ $ 40,000 40,000 31,900 - 111,900 23,500 - - 30,000 53,500 (43,500) - (11,900) (10,000) (65,400) 20,000 40,000 20,000 20,000 100,000 Page 29 Athena Resources Limited NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 NOTE 12 – THIRD PARTY LOANS 1 July 2019 $ Advances $ Share Issue 30 June 2020 $ $ Goldway Mega Trade Limited 208,100 208,100 158,800 158,800 (366,900) (366,900) - - Third party loans are interest free. The loan from Goldway Mega Trade Limited was converted to shares in the placement announced on 27 September 2019. NOTE 13 – RESERVES AND ACCUMULATED LOSSES Balance at beginning of the year Net Loss for the year Balance at end of the year NOTE 14 – ISSUED CAPITAL Consolidated 2020 $ (7,113,871) (334,018) (7,447,889) 2019 $ (6,678,876) (434,995) (7,113,871) Ordinary Fully Paid Shares $ $ As at 1 July 2019 Issued during the year for cash Issued during the year loan conversions Share issue costs As at 30 June 2020 As at 1 July 2019 Issued during the year As at 30 June 2020 13,920,293 671,000 366,900 (13,747) 14,944,446 13,400,888 541,901 - (22,496) 13,920,293 Shares Shares 270,950,922 29,654,286 300,605,208 216,760,789 54,190,133 270,950,922 Athena Resources Limited Page 30 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 NOTE 15 – NOTES TO THE STATEMENT OF CASH FLOWS Reconciliation of (loss) after income tax to net operating cash flows Consolidated 2020 $ 2019 $ (Loss) from ordinary activities (334,018) (434,995) Depreciation Loss on disposal of fixed assets Share issue costs Contribution to overheads Movement in assets and liabilities Receivables – overhead related Payables – overhead related Payables - deferred Net cash provided by operating activities 5,667 1,376 (13,747) - 5,651 - (22,496) (20,000) 2,302 10,269 19,600 (308,551) 25,026 (2,829) 73,419 (376,224) NOTE 16 – FINANCIAL INSTRUMENTS The Directors have assessed that the carrying value of financial assets and financial liabilities approximate their fair value at balance date. NOTE 17 – COMMITMENTS FOR EXPENDITURE Mineral Tenement Leases In order to maintain current rights of tenure to mining tenements, the Group will be required to outlay amounts of $3,951,995 (2019: $5,144,185) in respect of minimum tenement expenditure requirements and lease rentals. The obligations are not provided for in the financial report and are payable as follows: Not later than one year Later than 1 year but not later than 2 years Later than 2 years but not later than 5 years Consolidated 2020 $ 790,399 790,399 2,371,197 3,951,995 2019 $ 1,028,837 1,028,837 3,086,511 5,144,185 Athena Resources Limited Page 31 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 The Company has a number of avenues available to continue the funding of its current exploration program and as and when decisions are made, the Company will disclose this information to shareholders. NOTE 18 – CONTINGENT LIABILITIES Athena Resources Limited and its controlled entities have no known material contingent liabilities as at 30 June 2020. NOTE 19 – INVESTMENT IN CONTROLLED ENTITIES Class of Shares Book Value of Athena’s Investments Complex Exploration Pty Ltd Capricorn Resources Pty Ltd Byro Exploration Pty Ltd Ordinary Ordinary Ordinary 100% 100% 100% 2020 $ 100 200 1,390,000 1,390,300 2019 $ 100 200 1,390,000 1,390,300 The above controlled entities are incorporated in Australia. The book value of Athena Resources Limited’s investment in the ordinary shares of controlled entities is at cost, which does not exceed the underlying net assets of each entity. Byro Exploration Pty Ltd is a wholly owned subsidiary of Complex Exploration Pty Ltd. NOTE 20 – SEGMENT INFORMATION During the year the Group operated principally in one business segment being mineral exploration within Australia. NOTE 21 – KEY MANAGEMENT PERSONNEL (a) Directors The names and positions of Directors in office at any time during the financial year are: David Arthur Webster Edmond William Edwards Hau Wan Wai Non-Executive Chairman Executive Director Executive Director (b) Remuneration Polices Remuneration policies are disclosed in the Remuneration Report which is contained in the Directors’ Report. Athena Resources Limited Page 32 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 (c) The total remuneration paid to Directors is summarised below: Year ended 30 June Short-term employee benefits Post-employment benefits Other-long term benefits Other – based payments Consolidated 2020 $ 2019 $ 171,000 - - - 171,000 228,000 - - - 228,000 d) Aggregate amounts payable to Directors and their personally related entities. Current Accounts payable Loans NOTE 22 – RELATED PARTY INFORMATION Transactions within the Group Non-current receivables – Controlled Entities Less : Provision for non recovery Consolidated 2020 $ 849,800 80,000 929,800 2019 $ 810,200 111,900 922,100 Parent Entity 2020 $ 2019 $ 10,394,650 (1,554,985) 8,839,665 9,665,371 (1,554,985) 8,110,386 During the year net repayments of unsecured interest free loans were made to Directors as follows: Mr Edwards Mr Wai $20,000 $11,900 The maximum amount outstanding during the year to 30 June 2020 was $111,900. Athena Resources Limited Page 33 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 NOTE 23 – REMUNERATION OF AUDITORS Amount received, or due and receivable, by the auditors for: Auditing and reviewing of the consolidated financial statements of Athena Resources Limited Other services Consolidated 2020 $ 2019 $ 22,300 - 22,300 23,400 - 23,400 Audit fees are included in Legal and Professional in the Statement of Comprehensive Income. NOTE 24 – PROFIT/(LOSS) PER SHARE Consolidated 2020 $ 2019 $ (Loss) used in the calculation of loss per share (334,018) (434,995) Weighted average number of ordinary shares outstanding during the year 291,987,188 244,375,487 Basic (loss) per share (cents per share) (0.11) (0.18) NOTE 25 – FINANCIAL RISK MANAGEMENT Financial Risk Management Policies The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and accounts payable. The Board’s overall risk management strategy seeks to assist the group in meeting its financial targets, whilst minimising potential adverse effects on financial performance. The Group has developed a framework for a risk management policy and internal compliance and control systems that covers the organisational, financial and operational aspects of the Group’s affairs. The Chairman is responsible for ensuring the maintenance of, and compliance with, appropriate systems. Financial Risk Exposures and Management The main risks the Group is exposed to through its financial instruments are interest rate risk and liquidity risk. Athena Resources Limited Page 34 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 Interest Rate Risk The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of change in the market, interest rate and the effective weighted average interest rate on these financial assets, is as follows: Financial Assets - Cash at bank - Trade debtors Total Financial Assets Financial Liabilities - Trade Creditors - Accruals - Deferred Creditors - Related Party Loans - Third Party Loans Total Financial Liabilities Non-Interest Bearing Floating Interest Rate 2020 $ - 34,737 34,737 2019 $ - 37,040 37,040 84,801 - 981,800 100,000 - 1,166,601 72,524 - 962,200 111,900 208,100 1,354,724 2020 $ 17,192 - 17,192 230,000 - - - - 230,000 2019 $ 5,913 - 5,913 - 300,000 - - - 300,000 Weighted Average Effective Interest Rate is 1.0% (2019: 1.0%) Interest on Native Title liability of $300,000 excluding GST is contracted as the ANZ Indicator Interest Rate rate which is currently 1.2%. The Company agreed with the Native Title Party that $100,000 be paid in October 2020, and the balance of $200,000 will bear interest at the above rate with effect from 1 July 2019. Liquidity Risk The Group manages liquidity risk by monitoring forecast cash flows. Credit Risk The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date, is the carrying amount net of any allowance for doubtful debts, as disclosed in the statement of financial position and notes forming part of the financial statements. In the case of cash deposited, credit risk is minimised by depositing with recognised financial intermediaries such as banks, subject to Australian Prudential Regulation Authority supervision. The Group does not have any material risk exposure to any single debtor or group of debtors under financial instruments entered into by it. Athena Resources Limited Page 35 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 Capital Management Risk Management controls the capital of the Group in order to maximise the return to shareholders and ensure that the Group can fund its operations and continue as a going concern. Management effectively manages the consolidated entity’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of expenditure and debt levels and share and option issues. There have been no changes in the strategy adopted by management to control capital of the Group since the prior year. Financial Instruments Net Fair Values For financial assets and liabilities, the net fair value approximates their carrying value. The Group has no financial assets or liabilities that are readily traded on organised markets at balance date and has no financial assets where the carrying amount exceeds net fair values at balance date. The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statement of financial position and in the notes to and forming part of the financial statements. Interest Rate Sensitivity Analysis The Group has not performed a sensitivity analysis relating to its exposure to interest rate risk. Athena Resources Limited Page 36 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 NOTE 26 – PARENT ENTITY DISCLOSURES Financial Position CURRENT ASSETS Cash and cash equivalents Trade and other receivables Total Current Assets NON-CURRENT ASSETS Plant and equipment Investment in subsidiaries Loans to subsidiaries Total Non-Current assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Accumulated losses TOTAL EQUITY Financial Performance (Loss) for the year Other comprehensive income Total comprehensive (loss) Accumulated losses prior year 2020 $ 17,192 34,737 51,929 2019 $ 5,113 37,040 42,153 1,266 300 8,839,665 8,841,231 8,309 300 8,110,386 8,118,995 8,893,160 8,161,148 1,396,603 1,396,603 1,354,726 1,354,726 1,396,603 1,354,726 7,496,557 6,806,422 14,944,446 (7,447,889) 13,920,293 (7,113,871) 7,496,557 6,806,422 (334,018) (334,018) (7,113,871) (7,447,889) (434,995) - (434,995) (6,678,876) (7,113,871) The parent entity has not entered into any guarantees in relation to debts of its subsidiaries, has no contingent liabilities, and has no commitments for acquisition of property, plant and equipment. The ultimate recovery of the loans to the subsidiaries is dependent on the successful development and/or commercial exploitation or sale of the subsidiaries’ exploration assets. Athena Resources Limited Page 37 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 NOTE 27 – ASX LISTING On 13 August 2019 the ASX announced that the securities of Athena Resources Limited (‘AHN’) will be suspended from quotation immediately under Listing Rule 17.3, pending a satisfactory response to ASX queries and further, as ASX has determined that AHN’s financial condition is not adequate to warrant the continued quotation of its securities and therefore it is in breach of Listing Rule 12.2. The suspension will continue until AHN is able to demonstrate compliance with Listing Rule 12.2 and respond satisfactorily to ASX’s queries. Since suspension and during the year ended 30 June 2020 the Company has raised $1,024,153. On 17 August 2020 the Company announced the completion of a placement of 7,428,571 shares at an issue price of $0.035 each to raise $260,000. At the date of this report the securities are still suspended from quotation. NOTE 28 – EVENTS SUBSEQUENT TO BALANCE DATE On 17 August 2020 the company announced the completion of a placement of 7,428,571 shares at 3.5 cents to raise a further $260,000. Athena Resources Limited Page 38 DIRECTORS’ DECLARATION FOR THE YEAR ENDED 30 JUNE 2020 1. In the opinion of the directors of Athena Resources Limited (the ‘Company’): a) the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including: (i) (ii) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year then ended; and complying with Australian Accounting Standards, the Corporations Regulations 2001, professional reporting requirements and other mandatory requirements. b) subject to the matters described in Note 1, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. c) the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board. 2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2020. _______________________________ E W Edwards Executive Director Dated at Perth this 30th September 2020 Athena Resources Limited Page 39 INDEPENDENT AUDITOR’S REPORT To the members of Athena Resources Limited Report on the Audit of the Financial Report Disclaimer of Opinion We were engaged to audit the financial report of Athena Resources Limited (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. We do not express an opinion on the accompanying financial report of the Group. Because of the significance of the matters described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis to form an opinion on this financial report. Basis for Disclaimer of Opinion As at 30 June 2020, the Group had cash and cash equivalents of $17,992 and an excess of current liabilities over current assets of $1,343,872. For the year ended 30 June 2020, the Group recorded a loss of $334,018 and a net cash outflow from operating and investing activities of $805,821. As part of our audit procedures, we have been unable to obtain sufficient appropriate audit evidence in relation to the Group’s ability to continue as a going concern with respect to the following matters as outlined in Note 1: - - the ability to continue to defer payment of creditors on a basis which will enable the Group to continue as a going concern for the relevant period; and the ability of the Group to raise future funding which is sufficient to enable it to continue as a going concern for the relevant period. The going concern assertion is material and pervasive to the financial report as a whole. Based upon the above matters, we have been unable to obtain sufficient appropriate audit evidence as to whether the Group is able to continue as a going concern and whether it will be able to realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. Athena Resources Limited Page 40 In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our responsibility is to conduct an audit of the Group’s financial report in accordance with Australian Auditing Standards and to issue an auditor’s report. However, because of the matters described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the financial report. We are independent of the Group in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our ethical responsibilities in accordance with the Code. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included within the directors’ report for the year ended 30 June 2020. In our opinion, the Remuneration Report of Athena Resources Limited for the year ended 30 June 2020 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards HLB Mann Judd Chartered Accountants Perth, Western Australia 30 September 2020 N G Neill Partner Athena Resources Limited Page 41 SHAREHOLDER DETAILS FOR THE YEAR ENDED 30 JUNE 2020 ANALYSIS OF SHAREHOLDING – 16 SEPTEMBER 2020 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – or more Total on issue SHARES 25 48 68 262 151 554 308,033,779 Number of Shareholders holding less than marketable parcel cannot be calculated as the shares are suspended. Voting Rights Article 16 of the Constitution specifies that on a show of hands every member present in person, by attorney or by proxy shall have: (a) for every fully paid share held by him one vote (b) for every share which is not fully paid a fraction of the vote equal to the amount paid up on the share over the nominal value of the shares. Substantial Shareholders The following substantial shareholders have notified the Company in accordance with Corporations Act 2001. Brilliant Glory Industrial Corp Ltd Edmond William Edwards Goldway Mega Trade Limited Peter John Newcomb 43,000,000 38,128,831 37,082,857 17,100,000 13.96% 12.38% 12.04% 5.55% Directors’ Shareholding Interest of each director in the share capital of the Company is detailed in the Remuneration Report. Athena Resources Limited Page 42 SHAREHOLDER DETAILS FOR THE YEAR ENDED 30 JUNE 2020 TOP TWENTY SHAREHOLDERS 16 SEPTEMBER 2020 Shareholder Shares % Rank Brilliant Glory Industrial Corp Ltd Tied Nominees Pty Ltd Goldway Mega Trade Limited Stonydeep Investments Pty Ltd Cobpen Co Investments Pty Ltd Mr James Gregory Puklowski Vitor Pty Ltd Ishine International Resources Limited Citicorp Nominees Pty Limited Gardner Mining Pty Ltd Kelanco Pty Ltd Mr Mark Snabel-Matthews Kokatu Pty Ltd Mr Andrew Peter Thomson Julia Edwards Superannuation Pty Ltd Caroline Patricia Edwards Mr Terence Weston Mr Andrew John Puklowski Mr L P Kelly & Ms H Salomons (Kelly Super) Mr Ronald Wang Chi Tai Total 43,000,000 38,073,831 37,082,857 17,100,000 10,096,626 9,253,895 8,333,333 8,300,000 7,160,769 6,675,000 6,108,750 5,950,830 5,020,000 4,432,500 4,020,000 3,954,218 3,671,000 3,631,767 3,243,611 3,064,765 228,173,752 13.96 12.36 12.04 5.55 3.28 3.00 2.71 2.69 2.32 2.17 1.98 1.93 1.63 1.44 1.31 1.28 1.19 1.18 1.05 0.99 74.07 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Athena Resources Limited Page 43 INTEREST IN MINING TENEMENTS FOR THE YEAR ENDED 30 JUNE 2020 INTEREST IN MINING TENEMENTS Byro E09/1507 E09/1552 E09/1637 E09/1781 E09/1938 M09/166 M09/168 E – Exploration License M – Mining Lease CORPORATE GOVERNANCE STATEMENT The Board of Directors of Athena Resources Limited is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of Athena Resources Limited on behalf of the shareholders by whom they are elected and to whom they are accountable. The statement reports on Athena Resources Limited’s key governance principles and practices. Details of the Corporate Governance Statement can be found on the Athena Resources Limited’s website at: http://www.athenaresources.com.au/corporate/corporate-governance/ Athena Resources Limited Page 44
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