ANNUAL REPORT
2020
TABLE OF CONTENTS
TABLE OF CONTENTS ..................................................................................................................................... 2
CORPORATE INFORMATION ......................................................................................................................... 3
DIRECTORS’ REPORT ..................................................................................................................................... 4
AUDITORS INDEPENDENCE LETTER............................................................................................................. 25
QUALIFYING STATEMENTS .......................................................................................................................... 26
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME ................... 27
CONSOLIDATED STATEMENT OF FINANCIAL POSITION .......................................................................... 28
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................................ 29
CONSOLIDATED STATEMENT OF CASH FLOWS ........................................................................................ 30
DIRECTORS’ DECLARATION ......................................................................................................................... 71
INDEPENDENT AUDITORS REPORT ............................................................................................................. 72
ASX ADDITIONAL INFORMATION ................................................................................................................ 78
2
CORPORATE INFORMATION
ABN 48 116 296 541
AUDITORS
Ernst & Young
11 Mounts Bay Road
Perth, WA 6000
INTERNET ADDRESS
www.avenira.com
EMAIL ADDRESS
frontdesk@avenira.com
STOCK EXCHANGE LISTING
Avenira Limited shares are listed on the:
Australian Securities Exchange (Code: AEV)
DIRECTORS
Brett Clark
(Executive Chairman & CEO)
Kevin Dundo
(Non-executive Director)
Winnie Lai Hadad
(Non-executive Director)
COMPANY SECRETARY
Graeme Smith
REGISTERED OFFICE
Suite 6, 100 Mill Point Road
South Perth WA 6151
PRINCIPAL PLACE OF BUSINESS
Suite 6, 100 Mill Point Road
South Perth WA 6151
SOLICITORS
DLA Piper Australia
Level 31, Central Park, 152-158 St Georges Terrace
Perth, WA 6000
BANKERS
National Australia Bank Limited
Level 14, 100 St George’s Terrace
Perth, WA 6000
SHARE REGISTER
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
Perth, WA 6000
Telephone: 1300 787 272
3
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Your directors submit their report on the consolidated entity (referred to hereafter as the Group) consisting of Avenira
Limited (Company) and the entities it controlled at the end of, or during, the year ended 30 June 2020.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of signing this
report are as follows. Where applicable, all current and former directorships held in listed public companies over the last
three years have been detailed below. Directors were in office for this entire period unless otherwise stated.
NAMES, QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES
Brett Clark, B. Eng., Dip. Fin. (Executive Chairman and CEO)
Experience & Expertise
Mr. Clark is a senior executive with 30 years’ experience in the mining and energy sectors in funding, operations and
advisory, notably with Hamersley Iron Pty Ltd, CRA Limited, WMC Resources Limited, Iron Ore Company of Canada, Rio
Tinto Limited and subsequently with Ernst and Young, Tethyan Copper Company Pty Ltd, Oakajee Port and Rail, Mitsubishi
Development and Murchison Metals. Mr. Clark has extensive leadership experience in board positions held at both listed
and unlisted companies. His expertise ranges from project development to operations, sales and marketing in gold, iron
ore, copper, nickel, coal, industrial minerals, and upstream oil and gas across Australia, Africa, Asia, Latin America and
North America. His funding experience includes bond raisings, debt restructuring, equity, and mezzanine financing in the
US and Asian capital markets.
Shares Held – Nil
Options Held – 12,000,000 options ex @ $0.02 expiring 30/11/22
12,000,000 options ex @ $0.03 expiring 30/11/22
Other Current Listed Company Directorships
Nil
Former Listed Company Directorships in the last 3 years
Non-Executive Director of Great Lakes Graphite Corp from November 2017 to July 2019
Non-Executive Director of Nelson Resources Limited from July 2016 to January 2019
Managing Director of Ardea Resources from April 2018 to June 2018
Non-Executive Director of Surefire Resources NL from March 2016 to August 2017
Special Responsibilities
Nil
Winnie Lai Hadad, B. Com, MSc, BA, CPA, AusIMM (Non-executive Director – appointed 22 October 2019)
Experience & Expertise
Ms Lai Hadad has expertise in change management, corporate governance and business process improvement and has
been involved in listings on the Australian Securities Exchange. Ms Lai Hadad has been involved with both investments
into China and out-bound investment from China. Her past roles include implementing Coca-Cola bottling strategies into
Greater China and administering the first Chinese direct investment in an iron ore mine in the Pilbara Region of Western
Australia. Ms Lai Hadad is a lawyer admitted to practice in Western Australia, a qualified CPA, holds a BA, BCom and
MSc, and is a graduate of both the Australian Institute of Company Directors and Governance Institute of Australia.
Shares Held –
Nil
Options Held – 6,000,000 options ex @ $0.02 expiring 30/11/22
6,000,000 options ex @ $0.03 expiring 30/11/22
Other Current Listed Company Directorships
Non-Executive Director of Vonex Limited
Former Listed Company Directorships in the last 3 years
Nil
Special Responsibilities
Chair of the Audit Committee
4
DIRECTORS’ REPORT
Kevin Dundo, LLB, B. Com, FCPA (Non-executive Director – appointed 22 October 2019)
Experience & Expertise
Mr. Kevin Dundo is a practicing lawyer, specialising in commercial and corporate law and in particular, mergers and
acquisitions, with experience in the mining services and financial services industries. He is a member of the Law Society
of Western Australia, Law Council of Western Australia, Australian Institute of Company Directors and a Fellow of the
Australian Society of Certified Practicing Accountants.
Shares Held –
6,250,000
Options Held – 6,000,000 options ex @ $0.02 expiring 30/11/22
6,000,000 options ex @ $0.03 expiring 30/11/22
Other Current Listed Company Directorships
Non-executive Chairman of Red 5 Limited
Non-executive Director of Cash Converters International Limited
Non-executive Director of Imdex Limited
Former Listed Company Directorships in the last 3 years
Nil
Special Responsibilities
Chair of the Remuneration and Nomination Committee
Dr. Louis Calvarin, PhD (Process Engineering), (Non-executive Director - resigned 22 October 2019)
Timothy Cotton, B. Com (Hons), (Non-Executive Director – resigned 22 October 2019)
COMPANY SECRETARY
Graeme Smith, B.Ec, MBA, MComLaw, FCPA, FCIS, FGIA (Appointed 26 August 2019)
Mr. Smith is the principal of Wembley Corporate Services which provide corporate secretarial, chief financial officer
and corporate governance services. Mr. Smith has over 30 years’ experience in company secretarial work.
John Ribbons, B. Bus., CPA, ACIS (Resigned 26 August 2019)
Rod Wheatley, B. Bus., CPA (Resigned 26 August 2019)
5
DIRECTORS’ REPORT
PRINCIPAL ACTIVITIES
The principal activities of the Company during the course of the financial year was the sale of the Baobab Phosphate
Project in the Republic of Senegal, the development of the Wonarah phosphate project in the Northern Territory and the
acquisition of the Jundee South project in Western Australia. The Group’s operations are discussed in the Review of
Operations section of this report.
CONSOLIDATED RESULTS
Consolidated loss before income tax expense from continuing operations
Income tax benefit
LOSS FOR THE YEAR
YEAR END
30 JUNE 2020
$
YEAR END
30 JUNE 2019
$
(3,395,173)
-
(3,395,173)
(3,084,624)
-
(3,084,624)
DIVIDENDS
No dividends were paid or declared during the financial year. No recommendation for payment of dividends has been made.
REVIEW OF OPERATIONS
A review of the operations of the Group during the financial year and likely developments and expected results is included
in the Operating and Financial Review set out below.
COVID-19
The COVID-19 outbreak has developed rapidly in 2020, with a significant number of infections. Measures taken by various
governments to contain the virus have affected economic activity. We have taken a number of measures to monitor and
prevent the effects of the COVID-19 virus such as safety and health measures for our people (like social distancing and
working from home).
At this stage, the impact on our business and results is limited. We will continue to follow the various national institutes
policies and advice and in parallel will do our utmost to continue our operations in the best and safest way possible without
jeopardizing the health of our people.
6
DIRECTORS’ REPORT
JUNDEE SOUTH GOLD PROJECT, WESTERN AUSTRALIA (100% OWNED)
SUMMARY
Avenira entered into an agreement to purchase the Jundee South Gold Project, comprising a tenement suite covering
more than 720 km2 of the Yandal Greenstone Belt, for a consideration of $350,000 which complements the skill set of the
Avenira Board.
The Yandal Greenstone Belt hosts several significant gold deposits (Figure 1).
The Jundee South Project area covers more than 60km strike of highly prospective greenstone stratigraphy. The project
area contains regional structures interpreted to control gold mineralisation through the Yandal Greenstone Belt and
contains a number of historically defined gold occurrences.
Access is via a well-established road network and given the number of operating mines in the area, there is ready access
to accommodation and services.
Figure 1: Jundee South Project location map
7
DIRECTORS’ REPORT
TENURE
The Jundee South Project comprises four granted exploration licences covering more than 720km2:
Tenement ID
E53/1856
E53/1859
E53/2078
E53/2079
Total
Status
Granted
Granted
Granted
Granted
Area (approx km2)
117
192
197
217
723
PREVIOUS EXPLORATION
Table 1: Jundee South Tenement Status
Previous exploration relied on a geochemical approach with surface geochemistry surveys followed up by shallow Rotary
Air Blast (RAB) and Air Core (AC) drilling. Deeper Reverse Circulation (RC) drilling was targeted purely on the RAB assays
rather than testing geologically based gold mineralisation models. Only the highest geochemical gold anomalies were drill
tested. A considerable dataset was accumulated which, particularly given its location relative to major operating mines
and interpreted regional structures, provide considerable opportunity to re-evaluate the area using modern exploration
techniques. The dataset includes comprehensive geological mapping, aeromagnetic surveys, as well as regional surface
geochemical surveys and systematic, but generally wide spaced shallow RAB and AC drilling.
Limited RC drill testing of only the highest assays from RAB and AC has taken place. The lack of a driving gold
mineralisation model has resulted in this drilling having mixed results.
Systematic Application of Empiric Models for Gold Mineralisation
Avenira has identified untested areas of the project that exhibit key geological characteristics to those that host significant
gold deposits. The common features are:
• Suitable host rocks. Such as a package of mafic rocks (basalts) and sediments intruded by dolerite sills and dacitic
porphyries and tholeiitic basalts, often with epicalstic rock sequences,
• Association with major regional north-west to north-east trending structures, typically shears,
•
Localised brittle-ductile faults and fractures, usually representing linkage faults, host the gold, typically in quartz
stockworks and veins, and
• A proximal heat source, such as dacitic porphyries or andesite intrusives, may have driven the gold mineralisation.
An example of the setting being sought by Avenira is set below where gold mineralisation is situated in mafic rocks (green)
east of felsic volcanic and sedimentary rocks (orange, Figure 2). Aeromagnetic imaging of the mine area shows a dominant
north west trend, primarily due to ultramafics but also reflecting the Nimary and Leak Fault directions. Archean granites
occur to the north east (pink in Figure 1).
Figure 2: Aeromagnetic image (left) and summary geology interpreted from the aeromagnetic image (right)
8
DIRECTORS’ REPORT
Exploration targets have been identified by Avenira that meet these criteria. One example is an area on E53/1859 that
shows similar characteristics to the Jundee setting. Mafics east of a felsic volcanic unit and a north west structure are
interpreted from the aeromagnetic data (Figure 2). The Exploration Target is conceptual in nature as there has been
insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of
a Mineral Resource under the JORC Code (2012).
Figure 3: Prospective area in E53/1859: mapped geology (left), aeromagnetic image (centre) and summary geology interpreted
from the aeromagnetic image (right). Scale is the same as Figure 2.
PROPOSED PROGRAM
Avenira is in the process of reviewing the historical database to seek to further investigate already identified targets and to
seek to identify additional priority targets which, if positive, will underpin the development of a future exploration program.
ACQUISITION TERMS
Avenira entered into an agreement with Faurex Pty Ltd (Vendor) whereby Avenira acquired 100% of the project for
$350,000. The tenements were successfully transferred and registered with the Department of Mines on 11 June 2020.
The project is not subject to any third-party royalties (other than statutory royalties) and is unencumbered.
The details contained in this report that pertain to exploration results are based upon information compiled by Mr Marcus
Flis, a consultant to Avenira from the DMIRS WAMEX database. He is satisfied that previous pertinent exploration in the
project area has been accessed and reflects, in general, the prospective nature of the tenements being considered. Mr
Flis is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience in the activity
which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the “Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Flis consents to the
inclusion in the report of the matters based upon his information in the form and context in which it appears.
9
DIRECTORS’ REPORT
WONARAH PHOSPHATE PROJECT, NORTHERN TERRITORY (100% OWNED)
SUMMARY
Scoping study commenced on the Wonarah Project during the December 2019 Quarter. The scoping study includes the
review of existing data utilised in the Wonarah Definitive Feasibility Study (DFS) completed a decade ago. Avenira will also
review Diammonium phosphate (DAP) & Monoammonium phosphate (MAP) technology as a value-added step in the
processing options in parallel with the option of utilising the Novophos technology.
▪ Considered to be one of Australia’s largest phosphate projects:
Figure 5 Location map of Wonarah Phosphate Project
▪ Measured Resource of 64.9 Mt @ 22.4% P2O5
▪
▪
Indicated Resource of 133 Mt @ 21.1% P2O5
Inferred Resource of 352 Mt @ 21% P2O5 (15% cut-off)
▪
Excellent infrastructure
▪ Northern Gas Pipeline runs through the project area.
▪
▪
Adjacent to national highway and a high-quality water source
Port and rail is under capacity allowing easy expansion of Wonarah project
▪
Scoping study has commenced for Concentrate and MAP/ DAP Processing project.
10
DIRECTORS’ REPORT
TENURE
The Wonarah Phosphate Project comprises of three granted exploration licences covering more than 151 km2:
Tenement ID
EL29840
EL29849
EL32359
Total
Status
Granted
Granted
Granted
Area (approx km2)
41.92
11.19
98.80
151.91
ANNUAL MINERAL RESOURCE STATEMENT AS AT 30/06/20
Table 2: Wonarah Phosphate Tenement Status
WONARAH PROJECT, NORTHERN TERRITORY, AUSTRALIA
Tonnes
P2O5
Al2O3
CaO
Fe2O3
K2O
MgO MnO
Na2O
SiO2
TiO2
Mt
%
%
Measured
78.3
20.8
4.85
%
28
%
%
%
%
1.11
0.43
0.25
0.04
%
0.1
%
%
39.7
0.21
17.5
4.75
23.2
1.49
0.47
0.2
0.04
0.09
48.3
0.22
18.3
4.77
24.4
18
4.8
1.4
2.1
1.1
0.46
0.21
0.04
0.09
46.1
0.22
0.5
0.2
0.08
0.05
0.37
0.19
0.04
0.09
46
37
0.2
0.19
1.53
0.47
0.21
0.04
0.09
39.7
0.22
24
30
28
Measured
64.9
22.4
4.47
21.1
4.77
Cut off
P2O5 %
Resource
Category
10
15
Indicated
M+I
Inferred
222
300
512
Indicated
M+I
Inferred
133
198
335
21.5
4.67
28.7
1.39
0.44
21
4.5
28
2.0
0.5
0.2
0.2
0.04
0.09
38.8
0.21
0.10
0.06
39
0.2
ANNUAL CHANGE IN RESOURCE CATEGORY
WONARAH PROJECT
Category
Inferred (10% cut-off)
Inferred 15% (cut-off)
Tonnes (M) % P2O5
Tonnes (M) % P2O5
2019
2020
Change
542
512
-30
18
18
-
352
335
-17
21
21
-
Table 3: Mineral Resource Statement
The Mineral Resource estimates for the Wonarah project have decreased by approximately 5% in the Inferred Resource
category for tonnage. The grades remain unchanged from the 2019 estimates. The estimates for the Measured Resource
and Indicated Resource categories remain unchanged from 2019. The decrease in the Inferred Resource category is
due to a reduction in tenement area peripheral to the main mineralized zones.
The mineral resource statement is based on, and fairly represents, information and supporting documentation prepared
by a Competent Person.
The mineral resources statement as a whole is approved by Russell Fulton, a Competent Person who is a Member of the
Australian Institute of Geoscientists. Mr. Fulton is employed by Russell Fulton Pty Ltd. Mr. Fulton was the former Geological
Manager and a full-time employee of the Company and now provides geological consulting services to the Company. Mr.
Fulton has sufficient experience deemed relevant to the style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Fulton consents to the inclusion in
the report of the matters based on his information in the form and context in which it appears.
11
DIRECTORS’ REPORT
BAOBAB PHOSPHATE PROJECT SALE
SUMMARY OF THE TRANSACTION
The Baobab Phosphate Project Sale was completed on 22 October 2019 and under the agreement Avenira agreed to sell
or assign all its rights and interests in the following assets to a consortium of its major shareholders (the Purchasers):
• Baobab Fertilizer Africa (BFA) (the wholly owned subsidiary which held Avenira’s interests in the Baobab
Phosphate Project) and the associated Baobab Intellectual Property and Other Information;
• Novaphos (other than the existing Australian Licence Agreement as outlined below); and
•
The intercompany loan between Avenira and BMCC and the intercompany loan between Avenira and BFA.
Under the Transaction:
• Avenira received cash consideration of US$3.0M (A$4.4M), and loan and director fees forgiven of US$1.2M
(A$1.8M), for a total consideration value of US$4.2M (A$6.2M), using a A$:US$ 0.6866 exchange rate.
• Avenira undertook, for nil consideration, a buy-back and capital reduction of all the existing shares held by the
major shareholders.
The transaction also resulted in the Purchasers taking on responsibility for the outcome of current Senegalese tax audits
of BMCC and Gadde Bissik Phosphate Operations SUARL (its operating subsidiary).
Whilst Avenira has sold its interests in Novaphos (including the licence agreement to use the Novaphos technology in
Senegal), Avenira retains an exclusive licence to use the Novaphos technology in Australia.
INVESTMENTS AND CORPORATE INFORMATION
BOARD AND EXECUTIVE CHANGES
Following the completion of the Baobab transaction, former Company Managing Director and Non-executive Director Mr.
Louis Calvarin resigned as Non-executive Director and former Company Non-executive Director Mr. Timothy Cotton
resigned on 22 October 2019.
Mr. Kevin Dundo and Ms. Winnie Lai Hadad were appointed as Non-Executive Directors of the Board 22 October 2019.
FINANCING
Following the end of the financial year, the Company undertook a share placement and entitlement issue to raise
approximately $3.4 million.
$1,158,543 was raised (before costs) through a 2 for 7 entitlements issue at $0.008 per share (Entitlement).
$2,218,240 was raised through a placement to sophisticated investors (Placement) at $0.008 per share.
The Placement comprised:
•
•
66.1 million New Shares issued under the Company’s existing Listing Rule 7.1 placement capacity (Tranche 1),
this was completed on 15 July 2020 with total funds received of $528,906; and
185.8 million New Shares were issued, on 7 September 2020 & 25.4 million New Shares were issued, on 8
September 2020 with total funds received of $1,689,334 (Tranche 2).
12
DIRECTORS’ REPORT
FINANCIAL REVIEW
FINANCIAL INFORMATION
At 30 June 2020, the total closing cash balance was $1,288,337 (2019: $300,544). The Group has recorded an operating
loss after income tax for the year ended 30 June 2020 of $5,669,716 (2019: loss of $43,439,722).
Upon the adoption of AASB 16 as at 1 July 2019, the Group recognised in the statement of financial position Right-of-use
lease assets and Lease liabilities relating to a lease facility for the Baobab Project of $1,887,602. The Right-of-use lease
assets and lease liabilities were immediately classified as held for sale and transferred to discontinued operations upon
completion of the transaction. As at 22 October 2019, the Baobab project was sold, at which time the assets and liabilities
previously classified as held for sale, and the right-of-use assets and lease liabilities recognised on adoption of AASB 16,
are no longer included in the statement of financial position.
OPERATING RESULTS FOR THE YEAR
Summarised operating results are as follows
Income
Loss before tax
Shareholder Returns
Basic loss per share from continuing operations (cents)
Basic loss per share from discontinued operations (cents)
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
2020
CONTINUING OPERATIONS
$
2020
DISONTINUED
OPERATIONS
$
35,680
3,561
(3,395,173)
(946,813)
2020
2019
(0.54)
(0.36)
(0.30)
(3.94)
Other than detailed in the Review of Operations above there were no significant changes in the state of affairs of the
Group.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
Other than as disclosed above, no event has occurred since 30 June 2020 that would materially affect the operations of the
Group, the results of the Group or the state of affairs of the Group.
RISK MANAGEMENT
The Board is responsible for ensuring that risks, and opportunities, are identified on a timely basis and that activities are
aligned with the risks and opportunities identified by the Board.
The Company believes that it is crucial for all Board members to be a part of this process, and as such the Board has not
established a separate risk management committee.
The Board has a number of mechanisms in place to ensure that management’s objectives and activities are aligned with the
risks identified by the Board. These include the following:
• Board approval of a strategic plan, which encompasses strategy statements designed to meet stakeholders’ needs
•
and manage business risk.
Implementation of Board approved operating plans and budgets and Board monitoring of progress against these
budgets.
13
DIRECTORS’ REPORT
SAFETY AND HEALTH
Avenira aspires to a goal of causing zero harm to people. In this regard, the Company is committed to undertake our
activities so as to protect the safety and health of employees, contractors, visitors and the communities in which we
operate. There were no lost time injuries during the year.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group is subject to significant environmental regulation with respect to its exploration activities.
The Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so, as far as it is
aware is in compliance with all environmental legislation. The directors of the Group are not aware of any breach of
environmental legislation for the year under review.
DIRECTORS’ MEETINGS
During the year the number of meetings of directors (including meetings of committees of directors) and the number of
meetings attended by each director were as follows:
DIRECTORS MEETINGS
AUDIT COMMITTEE MEETINGS
Brett Clark
Winnie Lai Hadad
Kevin Dundo
Louis Calvarin
Timothy Cotton
A
10
9
9
2
2
B
10
9
9
2
2
A
*
1
1
-
-
B
*
1
1
-
-
REMUNERATION AND
NOMINATION COMMITTEE
MEETINGS
A
*
1
1
-
-
B
*
1
1
-
-
Notes
A – Number of meetings attended.
B – Number of meetings held during the time the director held office or was a member of the Committee during the year.
* – Not a member of the Committee.
SHARES UNDER OPTION
At the date of this report there are 60,000,000 unissued ordinary shares in respect of which options are outstanding.
Balance at the beginning of the year
Movements of share options
Expired on 24 September 2019 ($0.25)
Issued 24 December 2019 ($0.02)
Issued 24 December 2019 ($0.03)
Issued 08 September 2020 ($0.025)
Issued 08 September 2020 ($0.035)
Total number of options outstanding as at the date of this report
INSURANCE OF DIRECTORS AND OFFICERS
NUMBER OF OPTIONS
80,000,000
(80,000,000)
24,000,000
24,000,000
6,000,000
6,000,000
60,000,000
During or since the financial year, the Company has paid premiums insuring all the directors of Avenira Limited against
costs incurred in defending proceedings for conduct involving:
a. willful breach of duty; or
b. a contravention of sections 182 or 183 of the Corporations Act 2001, as permitted by section 199B of the Corporations
Act 2001.
14
DIRECTORS’ REPORT
The total amount of insurance contract premiums paid is $130,363 (2019: $125,780).
NON-AUDIT SERVICES AND INDEMNIFICATION OF AUDITORS
Details of amounts paid or payable to the auditor for audit and non-audit services provided during the period, and an
assessment by the Board of whether non-audit service provided during the period are compatible with general standards of
independence for auditors imposed by the Corporations Act 2001 are set out in Note 19 - Remuneration of Auditors, to the
Consolidated Financial Statements on page 62.
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young Australia during or since the financial year.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or any part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237
of the Corporations Act 2001.
CORPORATE GOVERNANCE
In recognising the need for the highest standard of corporate behaviour and accountability, the Directors of Avenira Limited
support and adhered to the principles of sound corporate governance. The Board recognises the recommendations of the
Australia Securities Exchange Corporate Governance Council, and considers that Avenira Limited is in compliance, to the
extent with those guidelines, which are of importance to the commercial operation of a junior listed resources company.
During the financial year, shareholders continued to receive the benefit of an efficient and cost-effective corporate
governance policy for the Company.
The Company has established a set of corporate governance policies and procedures and these can be found within the
Company’s Corporate Governance section on the Company’s website: http://www.avenira.com/about-us/governance.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out on page 25.
EXTENSION OF LEAD AUDIT PARTNER
On 27 June 2019, the Board granted approval pursuant to section 324DAC of the Corporations Act 2001 ("the Act"),
for Mr. Gavin Buckingham of Ernst & Young to play a significant role in the audit of the Company for an additional two
financial years ending 30 June 2021. The Board considered the matters set out in section 324DAB(3) of the Act and is
satisfied that the approval:
(i)
(ii)
is consistent with maintaining the quality of the audit provided to the Company; and
would not give rise to a conflict of interest situation.
Reasons supporting this decision include:
• the benefits associated with the continued retention of knowledge regarding key audit matters;
• the Board being satisfied with the quality of Ernst & Young and Mr. Buckingham's work as auditor; and
• the Company's on-going governance processes to ensure the independence of the auditor is maintained.
15
DIRECTORS’ REPORT
REMUNERATION REPORT - AUDITED
The remuneration report is set out under the following main headings:
Introduction
A.
B. Remuneration governance
C. Overview of executive remuneration
D. Details of remuneration of Key Management Personnel
E. Executive KMP employment agreements
F. Overview of Non-executive Director remuneration
G. Share-based compensation
H. Equity holdings
A.
INTRODUCTION
The remuneration report for the year ended 30 June 2020 outlines the director and executive remuneration arrangements
of the Company and Group.
The information in this remuneration report has been provided in accordance with section 300A of the Corporations Act
2001. The information has been audited as required by section 308(3C) of the Corporations Act 2001.
For the purpose of this report, Key Management Personnel (“KMP”) of the Group are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Company and Group, directly
or indirectly, including any Director (whether executive or otherwise) of the Company.
The table below outlines the KMP of the Group during the financial year ended 30 June 2020. Unless otherwise indicated,
the individuals were KMP for the entire financial year.
NAME
Directors
Brett Clark
POSITION
TERM AS KMP
Executive Chairman and CEO
Full financial year
Winnie Lai Hadad
Non-executive Director
Appointed 22 October 2019
Kevin Dundo
Non-executive Director
Appointed 22 October 2019
Timothy Cotton
Non-executive Director
Resigned 22 October 2019
Louis Calvarin
Non-executive Director
Resigned 22 October 2019
Other key management personnel
Rod Wheatley
Chief Financial Officer and Company Secretary
Resigned 30 August 2019
B. REMUNERATION GOVERNANCE
Remuneration and Nomination Committee
The Board retains overall responsibility for remuneration policies and practices within the Group.
The Board has established a Remuneration and Nomination Committee (“RNC”) which operates in accordance with its
charter as approved by the Board. A copy of the charter is available under the corporate governance section of the
Group’s website.
The RNC is primarily responsible for making recommendations to the Board on remuneration arrangements for Executive
Directors, Non-executive Directors and other Senior Executives. The Corporate Governance Statement provides further
information on the role of this committee.
The RNC meets as required throughout the year. Refer to page 14 for the number of Committee meetings held during
the year. The Managing Director attends certain RNC meetings by invitation, where management input is required. The
Managing Director is not present during any discussions relating to his own remuneration arrangements.
16
DIRECTORS’ REPORT
Use of remuneration consultants
The RNC seeks external remuneration advice where necessary to ensure it is fully informed when making remuneration
decisions. Remuneration advisors are engaged by, and report directly to, the RNC.
No remuneration consultants were engaged during the financial year.
Securities trading policy
The Groups securities trading policy applies to all Non-executive Directors and executives. The policy prohibits employees
from dealing in Avenira Limited securities while in possession of material non-public information relevant to the Group.
The policy is available to be viewed within the corporate governance section of the Company’s website.
Voting and comments – 2019 Annual General Meeting (AGM)
The 2019 remuneration report was passed unanimously on a show of hands at the 2019 AGM. The Company did not
receive any specific feedback at the AGM regarding its remuneration practices.
C. OVERVIEW OF EXECUTIVE REMUNERATION
The remuneration policy of Avenira Limited has been designed to align executives’ objectives with shareholders and
business objectives. The Board of Avenira believes the policy to be appropriate and effective in its ability to:
•
•
attract and retain high quality directors and executives to run and manage the Company.
create goal congruence between directors, executives and shareholders.
The executive KMP receive an appropriate level and mix of remuneration consisting of fixed remuneration and variable
remuneration in the form of incentive opportunities. The RNC reviews executive KMP packages annually by reference to
the Group’s performance, executive performance and comparable information from industry sectors and other listed
companies in similar industries.
Elements of Executive Remuneration
The executive remuneration framework is comprised of:
a.
b.
Fixed Remuneration - Base Salary, including superannuation (if applicable)
Variable Remuneration - Incentives and Cash Bonuses
1. FIXED REMUNERATION - BASE SALARY, INCLUDING SUPERANNUATION
All executive KMPs receive a base cash salary (which is based on factors such as scope of the role, skills, experience,
location and length of service) and superannuation contributions, where applicable. The executive KMPs, where
applicable, receive a superannuation guarantee contribution required by the government, which is currently 9.50%, and
do not receive any other retirement benefits.
2.
VARIABLE REMUNERATION – INCENTIVES AND CASH BONUSES
Incentives in the form of equities and cash bonuses are provided to certain executive KMP at the Board’s discretion.
The policy is designed to provide a variable “at risk” component within the executive KMP’s total remuneration
packages to attract, retain and motivate the highest calibre of executive KMP and reward them for performance that
results in long term growth in shareholder wealth through achievement of the Company’s financial and strategic
objectives.
Receipt of variable remuneration in any form is not guaranteed under any executive KMP’s employment contract.
17
DIRECTORS’ REPORT
2.1
LONG TERM INCENTIVE (LTI)
At the 2019 Annual General Meeting shareholders approved the issue of 48,000,000 Options to the Directors.
Refer to Section G of the Remuneration Report for further details.
2.2
SHORT TERM INCENTIVE (STI)
Under the STI, certain executives have the opportunity to earn an annual incentive award. The STI recognises and
rewards annual performance. The bonus KPIs are chosen as they reflect the core drivers of the short-term
performance and also provide a framework for delivering sustainable value to the Group and its shareholders.
2020 short term incentive
Mr. Clarks Consultant Service Agreement provided for Mr. Clark to participate in a Short Term Incentive Scheme on
a yearly basis, being no more than a bonus of 50% of his yearly remuneration, based on certain non-financial
measures.
A summary of the non-financial measures to be achieved and their weightings are set out in the table below:
SUMMARY
Implementation of key growth strategies
Acquire gold assets in Western Australia
Individual Performance Review
%
50
25
25
The Board approved the final STI award based on assessment of performance against the non-financial measures.
Based on the assessment, a cash bonus in the amount of $70,000 was paid to the Executive Chairman and CEO
Mr. Brett Clark, following the end of the 2020 financial year.
Relationship between remuneration policy and company performance
The remuneration policy has been tailored to increase the direct goal congruence between shareholders, directors and
executives.
The table below shows the performance of the Company over the last 5 years:
EPS (cents)
Share Price
Net Profit / (Loss) before
discontinued operations
2020
(0.54)
$0.009
2019
(0.30)
$0.006
2018
(0.42)
$0.02
2017
(5.09)
$0.07
2016
(2.31)
$0.19
(3,395,173)
(3,084,624)
3,225,309
(30,579,063)
(9,464,695)
As the Company is in the development phase the performance of the Company is not related to the profit or earnings of
the Company.
18
DIRECTORS’ REPORT
D. DETAILS OF REMUNERATION OF KEY MANAGEMENT PERSONNEL (KMP)
The table below shows details of each component of total remuneration for KMP.
SHORT-TERM
POST EMPLOYMENT
LONG-TERM
SHARE-BASED PAYMENTS
SALARY & FEES
CASH BONUS
$
$
NON-
MONETARY (5)
SUPERANNUATION
TERMINATION
BENEFITS
LONG SERVICE
LEAVE
ANNUAL LEAVE
TOTAL CASH
RELATED
PERFORMANCE
RIGHTS (6)
OPTIONS (7)
TOTAL
REMUNERATION
PERFORMANCE
RELATED
$
$
$
$
$
$
$
$
$
%
Directors
Brett Clark (4)
2020
2019
Winnie Lai Hadad
2020
2019
Kevin Dundo
2020
2019
Louis Calvarin (1)
2020
2019
Timothy Cotton (2)
2020
2019
David Mimran (8)
2020
2019
Farouk Chaouni (9)
2020
2019
Christopher Pointon (10)
2020
2019
Ian McCubbing (11)
2020
2019
Subtotal Directors
2020
2019
290,458
254,713
70,000
-
33,290
25,000
-
-
33,290
-
225,000
450,000
18,452
60,000
-
60,000
-
60,000
-
30,000
-
37,291
25,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
48,027
96,402
-
-
-
-
-
-
-
-
-
-
600,490
952,003
120,000
48,027
96,402
12,667
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,543
12,667
3,543
-
-
-
-
-
-
48,327
-
-
-
-
-
-
-
-
-
-
-
48,327
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
373,125
254,713
58,290
-
58,290
-
321,354
546,402
18,452
60,000
-
60,000
-
60,000
-
30,000
-
40,833
829,511
1,051,948
-
-
-
-
-
-
-
(40,721)
-
-
-
-
-
-
-
-
-
-
-
(40,721)
33%
-
62%
-
62%
-
(8%)
-
-
-
-
-
-
-
-
-
-
187,025
-
560,150
254,713
93,513
151,803
-
-
93,513
151,803
-
-
-
-
-
-
-
-
-
-
-
-
-
-
321,354
505,681
18,452
60,000
-
60,000
-
60,000
-
30,000
-
40,833
374,051
-
1,203,562
1,011,227
19
DIRECTORS’ REPORT
SHORT-TERM
POST EMPLOYMENT
LONG-TERM
SHARE-BASED PAYMENTS
SALARY & FEES
CASH BONUS
$
$
NON-
MONETARY (5)
SUPERANNUATION
TERMINATION
BENEFITS
LONG SERVICE
LEAVE
ANNUAL LEAVE
TOTAL CASH
RELATED
PERFORMANCE
RIGHTS (6)
OPTIONS (7)
TOTAL
REMUNERATION
PERFORMANCE
RELATED
$
$
$
$
$
$
$
$
$
%
Other executive KPM
Rod Wheatley (3)
2020
2019
44,901
269,406
-
-
-
-
Total KMP compensation
2020
2019
645,391
120,000
1,221,410
-
48,027
96,402
4,266
25,594
16,933
25,594
97,880
-
-
-
6,710
22,450
147,047
324,160
146,207
-
-
976,558
-
-
-
-
6,710
22,450
1,376,108
(40,721)
-
-
147,047
324,160
-
-
374,051
-
1,350,609
1,335,387
(1) Mr. Louis Calvarin resigned as Non-Executive Director on 22 October 2019.
(2) Mr. Timothy Cotton resigned as Non-Executive Director on 22 October 2019.
(3) Mr. Rodney Wheatley resigned as Chief Financial Officer and Joint Company Secretary on 31 August 2019.
(4) The amount represents the total remuneration paid to Mr. Brett Clark and includes $117,125 (2019: $134,713) of fees paid for advisory services provided during the year. Mr. Brett Clark is remunerated through CBD Executive Services
Pty Ltd; a business of which Mr. Brett Clark is the principal. Refer to Other Transactions and Balances with KMPs and Their Related Parties on page 22 for further details.
(5) Non-monetary benefits include housing, car and medical insurance.
(6) Share based payments in the 2019 financial year represent Performance Rights granted to executive KMPs in accordance with the Company’s Performance Rights Plan and approval at the Annual General Meeting held on 18
November 2015. The fair value of the Performance Rights was estimated at the grant date taking into account both market and non-market based vesting conditions. The Monte-Carlo simulation methodology was used to calculate
the fair value of each performance right. Refer to Note 28 for further details.
(7) The amount represents Option Holdings granted in the 2020 financial year to the Directors pursuant to shareholder approval at the 2019 Annual General Meeting. The fair value of the Option Holdings were calculated using the Black-
Scholes option pricing method. Refer to Share-Based Compensation on page 23 for further details.
(8) Mr. David Mimran resigned on 28 June 2019.
(9) Mr. Farouk Chaouni resigned on 28 June 2019.
(10) Mr. Ian McCubbing resigned on 31 January 2019.
(11) Mr. Christopher Pointon resigned on 31 December 2018.
20
DIRECTORS’ REPORT
E. EXECUTIVE KMP EMPLOYMENT AGREEMENTS
The Group has entered into formal employment contracts with Executive KMP. The employment contracts for executive
KMP have no fixed term and do not prescribe how remuneration levels are to be modified from year to year. A summary of
the main provisions of these contracts for the year ended 30 June 2020 are set out below:
NAME
TERMS
Brett Clark (Executive
Chairman and CEO)
Base salary of $200,000 (exclusive of superannuation contributions), reviewed
annually.
6 months’ notice by Mr. Clark. 6 months by Company and upon change of control.
Termination payments to reflect appropriate notice, except in cases of termination
for cause.
Two tranches of 12,000,000 options issued to Mr. Clark approved by shareholders
29 November 2019.
Mr. Clark shall be eligible to participate in Short Term Incentive Schemes up to 50%
of his base salary that the Company may offer.
F. OVERVIEW OF NON-EXECUTIVE DIRECTOR REMUNERATION
The Board policy is designed to attract and retain high caliber directors and to remunerate Non-executive Directors at
market rates for comparable companies 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. The
Executive Chairman’s fee will be determined independently to the fees of the Non-executive Directors based on
comparative roles in the external market. External advice from independent remuneration consultants 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. The most recent determination was at the November 2016 Annual
General Meeting, where shareholders approved the maximum aggregate amount of fees that can be paid to Non-
executive Directors to be $600,000.
The Company makes superannuation contributions on behalf of the Non-executive Directors in accordance with its
Australian statutory superannuation obligations, and each director may sacrifice part of their fee for further superannuation
contribution by the Company.
Any equity components of Non-executive Directors’ remuneration, including the issue of options or Performance
Rights, are required to be approved by shareholders prior to award.
The table below summaries the Non-executive fees for the 2020 financial year:
Board
Non-executive Directors
Committee
Audit Chair
Remuneration and Nomination Chair
Termination payments
BASE FEES 2020
A$48,000
Nil
Nil
The Board must approve all termination payments provided to all employees at the level of director, executive or senior
management to ensure such payments reflect the Company’s remuneration policy and are in accordance with the
Corporations Act 2001.
Mr. Calvarin resigned from his position as an Executive Director 22 October 2019. Mr. Calvarin received accrued annual
leave entitlements of $48,327.
Mr. Wheatley resigned from his position as Chief Financial Officer and Company Secretary 31 August 2019. Mr. Wheatley
received post-employment entitlements totaling $97,880.
21
DIRECTORS’ REPORT
Mr. Cotton resigned from his position of Non-executive Director 22 October 2019. Mr. Cotton’s Director fees totaling
$148,452 were forgiven as part of the consideration for the Baobab Phosphate Project Sale (refer to Note 11 for details
of consideration paid).
Loans to or from key management personnel
In 2020 there were no loans to KMP.
The Group received the following loans from KMP or their related parties during the 2020 financial year (2019: $5,023,713):
2020
LENDER
BALANCE AT
START OF THE
YEAR
LOAN
PROCEEDS
RECEIVED
INTEREST
CHARGED
FORGIVEN
DURING THE
YEAR
$
$
$
$
FX
IMPACT
$
BALANCE AT
END OF THE
YEAR
HIGHEST
BALANCE
DURING THE
YEAR
$
$
Agrifos Partners LLC(i)
366,436
-
11,754
(386,250)
8,060
-
386,250
(i) Agrifos Partners LLC is a company related through the common control of former director Mr. Timothy Cotton
Key terms and conditions of the loans are as follows:
LENDER
Agrifos Partners LLC
INTEREST
RATE(i)
6.00%
SECURITY
REPAYMENT DATE
unsecured
30 September 2019ii
(i) Interest rates on the Group’s borrowings range from 6.00 – 6.75%; as such loans received from KMP are considered to be at commercial rates.
Full terms and conditions of the loans can be found at Note 15.
Other transactions and balances with KMPs and their related parties
(i)
In addition to his Non-executive Chairman fee, Mr. Clark was engaged to provide the Company
strategic advisory services on a consulting basis from July 2019 to November 2019. Total consultancy fees of
$117,125 (2019: $134,713) were charged by Mr. Clark during the year. The agreement had no fixed term and
no termination notice period however it ceased once Mr. Brett Clark was appointed Executive Chairman and
CEO 5 December 2019. A further $5,425 was also paid to Mr. Clark for fees relating to an interim office lease
from the period 1 September to 30 November 2019. The total amount of fees is included in his Salary & Fees
amount in the Details of Remuneration of KMP table on page 19. At 30 June, advisory and lease fees paid to
Mr. Clark impacted the Statement of Profit and Loss and Other Comprehensive Income with $122,550
recognised in Administrative and Other Expenses. There was no impact on the 30 June 2019 Statement of
Financial Position.
(ii)
The Company has an exclusive licence to ultilise the Novaphos, Inc (Novaphos) technology in Australia. Former
Director Mr. Cotton has an equity interest in Novaphos.
22
DIRECTORS’ REPORT
G. SHARE-BASED COMPENSATION
In December 2019, 48,000,000 options were granted to the Directors pursuant to shareholder approval received at the
2019 AGM.
There were no other share-based payments issued to directors or other KMP during the 2020 financial year.
Share based compensation – Option Holdings
Option Holdings affecting remuneration in the current or future reporting period are as follows:
Key terms of options granted to KMP
NUMBER VESTED
GRANT DATE
NUMBER
GRANTED
DURING THE
YEAR
VESTING DATE
EXPIRY DATE
FAIR VALUE PER
OPTION AT
GRANT DATE, $
EXERCISE
PRICE, $
VESTED
%
2020
TRANCHE 1
Directors
Brett Clark
29-Nov-19
12,000,000
Winnie Lai Hadad
29-Nov-19
6,000,000
Kevin Dundo
TRANCHE 2
Directors
Brett Clark
29-Nov-19
6,000,000
29-Nov-19
12,000,000
Winnie Lai Hadad
29-Nov-19
6,000,000
Kevin Dundo
29-Nov-19
6,000,000
29-Nov-19
29-Nov-19
29-Nov-19
30-Nov-22
30-Nov-22
30-Nov-22
29-Nov-19
29-Nov-19
29-Nov-19
30-Nov-22
30-Nov-22
30-Nov-22
$0.008
$0.008
$0.008
$0.007
$0.007
$0.007
$0.02
$0.02
$0.02
$0.03
$0.03
$0.03
100%
100%
100%
100%
100%
100%
Further information is set out in Note 28 of the financial statements.
Value of Options granted to KMP
OPTIONS
GRANTED
DURING
THE YEAR
FAIR
VALUE OF
OPTIONS
GRANTED
DURING
THE YEAR,
$(1)
VALUE OF
OPTIONS
EXERCISED
DURING
THE
YEAR, $
VALUE OF
OPTIONS
LAPSED
DURING THE
YEAR, $
VALUE OF PR
FORFEITED
DURING THE
YEAR, $
VALUE OF
OPTIONS
INCLUDED IN
REMUNERATION
REPORT FOR
THE YEAR, $(2)
REMUNERATION
CONSISTING
OF OPTIONS
FOR THE YEAR,
%
2020
TRANCHE 1
Directors
Brett Clark
12,000,000
100,951
Winnie Lai Hadad
6,000,000
50,476
Kevin Dundo
TRANCHE 2
Directors
Brett Clark
6,000,000
50,476
12,000,000
86,074
Winnie Lai Hadad
6,000,000
43,037
Kevin Dundo
6,000,000
43,037
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,951
50,476
50,476
86,074
43,037
43,037
18%
33%
33%
15%
29%
29%
(1) The Value at grant date calculated in accordance with AASB 2 Share-Based Payment of options granted during the year as part of remuneration
The assessed fair value at grant date of options granted to the individuals is calculated at their vesting date, and the amount
is included in the remuneration tables above. Fair values at grant date are determined using a Black-Scholes option pricing
model that takes into account the exercise price, the term of the option, the impact of the dilution, the share price at the
grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate
for the term of the option.
23
DIRECTORS’ REPORT
H. EQUITY HOLDINGS
Option Holdings
The number of options over ordinary shares in the Company held during the financial year by each director of Avenira
Limited and other KMP of the Group, including their personally related parties, are set out below:
BALANCE AT
START OF THE
YEAR
GRANTED AS
COMPENSATION
EXERCISED
EXPIRED
BALANCE AT
END OF THE
YEAR
VESTED
AND
EXERCISABLE
UNVESTED
2020
Directors
Brett Clark
Winnie Lai Hadad
Kevin Dundo
Timothy Cotton
(1)
Louis Calvarin
Other Executive KMP
Rod Wheatley
-
-
-
24,000,000
12,000,000
12,000,000
56,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(56,000,000)
-
-
-
-
-
-
-
-
24,000,000
12,000,000
12,000,000
-
-
-
-
-
-
-
-
-
(1) Mr. Timothy Cotton held his options through their related party, Baobab Partners LLC.
All vested options were exercisable at the end of the year. Full details can be found at Note 16.
Shareholdings
The number of shares in the Company held during the financial year by each director of Avenira Limited and other KMP
of the Group, including their personally related partied, are set as follows:
BALANCE AT START
OF THE YEAR
RECEIVED DURING
THE YEAR FOR
RIGHTS
CONVERTED
GRANTED AS
REMUNERATION
OTHER CHANGES
DURING THE YEAR
BALANCE AT END
OF THE YEAR
2020
Directors
Brett Clark
Winnie Lai Hadad
Kevin Dundo
Louis Calvarin (1)
Timothy Cotton (2)
Other Executive KMP
Rod Wheatley (3)
-
-
-
2,402,358
240,528,141
892,484
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,402,358)
(240,528,141)
(892,484)
-
-
-
-
-
-
(1) Mr. Calvarin resigned as a Director on 22 October 2019 and is not considered a KMP from that date.
(2) Mr. Cotton holds shares through his related parties, Baobab Partners LLC and Vulcan Phosphates LLC. Mr. Cotton resigned as a Director on 22 October
2019 and is not considered KMP from that date.
(3) Mr. Wheatley resigned as Company Secretary on 26 August 2019 and is not considered a KMP from that date.
None of the shares above are held nominally by the directors or any of the KMP.
There were no other transactions and balances with KMP and their related parties other than as disclosed.
End of Remuneration Report
Signed in accordance with a resolution of the directors.
BRETT CLARK
Executive Chairman
Perth, 9 September 2020
24
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of Avenira Limited
As lead auditor for the audit of the financial report of Avenira Limited for the financial year ended 30
June 2020, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Avenira Limited and the entities it controlled during the financial year.
Ernst & Young
Gavin Buckingham
Partner
9 September 2020
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
GB:JG:AVENIRA:060
QUALIFYING STATEMENTS
STATEMENT OF GOVERNANCE ARRANGEMENTS AND INTERNAL CONTROLS
Governance of Avenira Limited’s Mineral Resources estimation process is a key responsibility of the Executive Management of the Company.
The Geological Manager of the Company oversees technical reviews of the estimates and the evaluation process is augmented by utilising
Avenira’s in-house knowledge in operational and project management, ore processing and commercial/financial areas. The Company also
utilises external consultants for these purposes.
The Geological Manager is responsible for managing all Avenira’s drilling programs, including resource definition drilling. The estimation of
Mineral Resources is done by an independent contractor, MPR Geological Consultants Pty Ltd.
The Company has adopted quality assurance and quality control protocols based on current and best practice regarding all field aspects
including drill hole surveying, drill sample collection, sample preparation, sample security, provision of duplicates, blanks and matrix-matched
certified reference materials. All geochemical data generated by laboratory analysis is examined and analysed by the Geological Manager
before accession to the Company database.
Data is subject to additional vetting by the independent contractor who carries out the resource estimates. Resource estimates are based on
well-founded, industry-accepted assumptions and compliance with standards set out in the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves.
Mineral resource estimates are subject to peer review by the independent contractor and a final review by Avenira’s Executive Management
before market release.
Avenira Limited reports its mineral resources and ore reserves on an annual basis, in accordance with the Australian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (the JORC code) 2012 Edition.
PREVIOUSLY REPORTED RESULTS
There is information in this report relating to Mineral Resource estimates which was previously reported on 15 Mar 2013, 30 Apr 2014 and 31 Jan
2020. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market
announcements and, in the case of estimates of Mineral Resources or Ore Reserves that all material assumptions and technical parameters
underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the
form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
All statements, trend analysis and other information contained in this document relative to markets for Avenira’s trends in resources, recoveries, production
and anticipated expense levels, as well as other statements about anticipated future events or results constitute forward-looking statements. Forward-
looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect” and “intend”
and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. Forward-looking
statements are subject to business and economic risks and uncertainties and other factors that could cause actual results of operations to differ materially
from those contained in the forward-looking statements. Forward-looking statements are based on estimates and opinions of management at the date
the statements are made. Avenira does not undertake any obligation to update forward-looking statements even if circumstances or management’s
estimates or opinions should change. Investors should not place undue reliance on forward-looking statements
26
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE
INCOME
YEAR ENDED 30 JUNE 2020
INCOME
Interest Income
EXPENDITURE
Depreciation and amortisation expense
Salaries and employee benefits expense
Net foreign currency gain/(loss)
Impairment of exploration and evaluation expenditure
Interest expense - leases
Net gain/(loss) on disposal of fixed asset / intangibles
Share based payment (expense)/reversal
Administrative and other expenses
LOSS BEFORE INCOME TAX FROM CONTINUING OPERATIONS
INCOME TAX BENEFIT
LOSS FOR THE YEAR FROM CONTINUING OPERATIONS
Discontinued Operations
Net gain/(loss) after tax for the year from discontinued operations
LOSS FOR THE YEAR
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to Profit or Loss, net of tax
Exchange differences on translation of foreign operations
Recycled to the profit and loss on derecognition of controlled entity
Exchange differences arising during the year
Financial assets measured at fair value through profit and loss
Net fair value gain / (loss) on financial assets measured at fair value through OCI
Other comprehensive income / (loss) for the year, net of tax
CONSOLIDATED
NOTES
2020
$
2019
$
5
6
12
10
28
6
7
11
35,680
63,973
(22,283)
(19,421)
(744,576)
(1,349,912)
607
(596,960)
(3,611)
(47,129)
(374,051)
(1,642,850)
(3,395,173)
-
146,519
(143,642)
(35,134)
-
40,833
(1,787,840)
(3,084,624)
-
(3,395,173)
(3,084,624)
(2,274,543)
(5,669,716)
(40,355,098)
(43,439,722)
2,332,312
119,851
2,452,163
67,882
2,520,045
-
1,085,849
1,085,849
(15,610)
1,070,239
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR
(3,149,671)
(42,369,483)
Income / (Loss) for the year is attributable to:
Owners of Avenira Limited
Non-controlling interest
Total comprehensive income / (loss) for the year is attributable to:
Owners of Avenira Limited
Non-controlling interest
LOSS PER SHARE
From continuing operations
Basic profit per share (cents)
Diluted profit per share (cents)
From total operations
Basic loss per share (cents)
Diluted loss per share (cents)
(5,312,588)
(357,128)
(5,669,716)
(35,396,670)
(8,043,052)
(43,439,722)
(2,792,543)
(357,128)
(34,525,626)
(7,843,860)
(3,149,671)
(42,369,483)
27
27
27
27
(0.54)
(0.54)
(0.84)
(0.84)
(0.30)
(0.30)
(4.24)
(4.24)
The above Consolidated Statement of Profit and Loss and Other Comprehensive Income should be read in conjunction with the Notes
to the Consolidated Financial Statements.
27
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Assets of disposal group held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Financial assets
Plant and equipment
Capitalised exploration and evaluation expenditure
Intangible assets
Right-of-use assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease Liability
Provisions
Loans and borrowings
Liabilities of disposal group held for sale
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
Lease Liability
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
NOTES
CONSOLIDATED
2020
$
2019
$
8
9
11
9
18
12
10
13
10
14
15
11
14
10
1,288,337
109,139
-
1,397,476
1,481,600
424,993
3,796
6,344,326
-
84,348
8,339,063
9,736,539
361,023
35,816
6,415
-
-
403,254
1,739,674
55,986
1,795,660
2,198,914
7,537,625
278,689
43,020
25,101,830
25,423,539
1,481,600
15,620
5,034
5,889,800
44,223
-
7,436,277
32,859,816
643,986
-
143,008
1,317,984
12,987,325
15,092,303
1,289,500
-
1,289,500
16,381,803
16,478,013
EQUITY
Issued capital
Reserves
Accumulated losses
Capital and reserves attributable to members of Avenira Limited
Non-controlling interest
TOTAL EQUITY
16
17(a)
17(b)
24
137,337,162
25,259,540
(155,059,077)
7,537,625
-
7,537,625
142,280,148
27,014,485
(149,389,359)
19,905,274
(3,427,261)
16,478,013
The above Consolidated Statement of Financial Position should be read in conjunction with the Notes to the Consolidated Financial
Statements.
28
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED
NOTE
S
ISSUED
CAPITAL
RESERVES
ACCUMULATED LOSSES
TOTAL
NON-
CONTROLLING
INTEREST
TOTAL
ATTRIBUTABLE TO OWNERS OF AVENIRA LIMITED
BALANCE AT 30 JUNE 2018
Loss for the year
Other comprehensive income/(loss) for the year
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS
Shares issued during the year
Share Issue transaction costs
Conversion of share rights
Share based payment
BALANCE AT 30 JUNE 2019
Loss for the year
Other comprehensive income/(loss) for the year
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS
Shares cancelled during the year
Shares issued during the year
Share based payment
Discontinued operations
BALANCE AT 30 JUNE 2020
$
$
$
$
$
$
139,480,390
26,234,899
(113,992,689)
51,722,600
4,416,599
56,139,199
-
-
-
2,860,425
(60,667)
-
-
-
(35,396,670)
(35,396,670)
(8,043,052)
(43,439,722)
871,044
871,044
-
-
(50,625)
(40,833)
-
871,044
199,192
1,070,236
(35,396,670)
(34,525,627)
(7,843,860)
(42,369,486)
-
-
-
-
2,860,425
(60,667)
(50,625)
(40,833)
-
-
-
-
2,860,425
(60,667)
(50,625)
(40,833)
142,280,148
27,014,485
(149,389,359)
19,905,274
(3,427,261)
16,478,013
-
-
-
-
(4,942,987)
-
-
-
-
(5,312,588)
(5,312,588)
(357,128)
(5,669,716)
2,520,044
2,520,044
-
-
-
374,051
(4,649,041)
-
2,520,045
-
2,520,045
(5,312,588)
(2,792,544)
(357,128)
(3,149,672)
-
-
-
-
-
(4,942,987)
-
374,051
-
-
-
-
-
(4,942,987)
-
374,051
(357,128)
(5,006,169)
3,784,389
(1,221,780)
137,337,161
25,259,540
(155,059,077)
7,537,625
-
7,537,625
28
28
The above Consolidated Statement of Changes in Equity should be read in conjunction with the Notes to the Consolidated Financial Statements.
29
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED 30 JUNE 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Receipts for other income
Interest received
Payment of lease interest
NOTES
CONSOLIDATED
2020
$
2019
$
(3,739,733)
3,561
(4,211,822)
112
33,487
(3,611)
45,850
-
NET CASH (OUTFLOW) FROM OPERATING ACTIVITIES
26
(3,706,296)
(4,165,860)
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditure on mining interests
Payments for mine development
Receipts for phosphate sales capitalised to development
Payments for plant and equipment
Payment of security deposits
Payments for intangibles
Refund from security deposits
Proceeds from sale of discontinued operations, net of cash disposed
Purchase of financial instruments
Loans to other entities
NET CASH (OUTFLOW) FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Transaction costs on issue of shares
Proceeds from loans and borrowings
Payment of principal portion of lease liabilities
Repayments of loans
NET CASH INFLOW FROM FINANCING ACTIVITIES
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL
YEAR
8
(770,515)
(962,814)
-
(3,700)
-
-
1,527
4,284,234
(341,491)
(733,803)
(4,352,645)
1,405,314
(27,554)
(101,085)
(5,203)
-
-
-
-
(137,024)
2,207,240
(3,952,000)
-
-
3,028,126
(16,408)
(674,950)
2,809,799
(60,667)
2,419,346
-
(649,421)
2,336,768
4,519,057
837,712
(3,598,803)
300,544
150,081
3,679,173
220,174
1,288,337
300,544
The above Consolidated Statement of Cash Flows should be read in conjunction with the Notes to the Consolidated
Financial Statements.
30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
1. BASIS OF PREPARATION
The financial statements are for the consolidated entity consisting of Avenira Limited and its subsidiaries (the “Company”
or the “Group). The financial statements are presented in the Australian currency. Avenira Limited is a for profit company
limited by shares, domiciled and incorporated in Australia, whose shares are publicly traded on the Australian Securities
Exchange. The Company’s registered office and principal place of business is Suite 6, 100 Mill Point Road South Perth
WA 6151. The financial statements were authorised for issue in accordance with a resolution of the directors on 9
September 2020. The directors have the power to amend and reissue the financial statements.
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards,
other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The
accounting policies outlined throughout the financial statements have been consistently applied to all the years
presented, unless otherwise stated.
Compliance with IFRS
The financial statements of the Group also comply with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB).
Historical cost convention
The financial statements have been prepared under the historical cost convention, modified, where applicable by the
measurement at fair value of selected non-current assets, financial assets and financial liabilities.
Functional and presentation currency
The financial statements are presented in Australian dollars, which is the Group’s reporting currency and the functional
currency of the parent company and its Australian subsidiaries. The functional currencies of the material subsidiaries
are United States dollars (USD) and Central African francs (XOF).
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the presentation
currency as follows:
• Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date
•
of that statement of financial position; and
Income and expenses for each statement of comprehensive income are translated at average exchange rates
(unless that is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the dates of the transactions); and
• All resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are
repaid, a proportionate share of such exchange differences is reclassified to profit or loss, as part of the gain or loss on
sale where applicable.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of
the foreign entities and translated at the closing rate.
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
1. BASIS OF PREPARATION (continued)
Going concern
The board consider the basis of going concern to be appropriate as at 30 June 2020, the Group had cash on hand of
$1,288,337 (30 June 2019: $300,544) and has disposed of its Baobab Phosphate Project in Senegal during the financial
year.
Following the end of the financial year, the Company undertook a share placement and entitlement issue to raise
approximately $3.4 million.
$1,158,543 was raised (before costs) through a 2 for 7 entitlements issue at $0.008 per share (Entitlement).
$2,218,240 million was raised through a placement of 277,280,000 shares to sophisticated investors (Placement) at
$0.008 per share.
Critical accounting estimates
The preparation of financial statements requires management to use estimates, judgements, and assumptions.
Application of different assumptions and estimates may have a significant impact on Avenira’s net assets and financial
results. Estimates and assumptions are reviewed on an ongoing basis and are based on the latest available information
at each reporting date. Actual results may differ from the estimates.
The areas involving a higher degree of judgement and complexity, or areas where assumptions are significant to the
financial statements are:
Note 12 Impairment of capitalised exploration and evaluation expenditure
Note 14 Provision for mine rehabilitation and restoration
Note 28 Share based payments
Page 49
Page 50
Page 68
Comparative Figures
When required by the accounting standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
When the Group applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies items in
its financial statements, a statement of financial position as at the beginning of the earliest comparative period will be
disclosed.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case, it is recognised as part of the cost of acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
2. PRINCIPLES OF CONSOLIDATION
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Avenira Limited
(“Company” or “Parent Entity”) as at 30 June 2020 and the results of all subsidiaries for the year then ended. Avenira
Limited and its subsidiaries together are referred to in this financial report as the Group or the consolidated entity.
Subsidiaries are all entities (including special purpose entities) over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control
over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses
of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the
date the Group gains control until the date the Group ceases to control the subsidiary.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-
controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any
investment retained is recognised at fair value.
The acquisition method of accounting is used to account for business combinations by the Group. Intercompany
transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of
comprehensive income, consolidated statement of changes in equity and consolidated statement of financial position
respectively.
Investments in subsidiaries are accounted for at cost in the individual financial statements of the Company.
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending
on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (i.e.
unforced) transaction between independent, knowledgeable and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine
fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the
market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the
most advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the
receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account
transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in
its highest and best use or to sell it to another market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective
note to the financial statements.
VALUATION TECHNIQUES
In the absence of an active market for an identical asset or liability, the Group selects and uses one or more valuation
techniques to measure the fair value of the asset or liability. The Group selects a valuation technique that is appropriate in
the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant
data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques
selected by the Group are consistent with one or more of the following valuation approaches:
Market approach: valuation techniques that use prices and other relevant information generated by market transactions
for identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single
discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing
the asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority
to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs
that are developed using market data (such as publicly available information on actual transactions) and reflect the
assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable,
whereas inputs for which market data is not available and therefore are developed using the best information available
about such assumptions are considered unobservable.
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
FAIR VALUE HIERARCHY
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value
measurements into one of three possible levels based on the lowest level that an input that is significant to the
measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date.
Level 2
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly or indirectly.
Level 3
Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all
significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or
more significant inputs are not based on observable market data, the asset or liability is included in Level 3.
The Group would change the categorisation within the fair value hierarchy only in the following circumstances:
i.
ii.
If a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa;
or
If significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value hierarchy
(i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances
occurred.
(b) Foreign exchange transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
Translation differences on financial assets and liabilities carried at fair value are reported as part of the fair value gain or
loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through
profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non- monetary
financial assets such as equities classified as financial assets through other comprehensive income are included in the
fair value reserve in equity.
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) New and revised AASB’s affecting amounts reported and/or disclosures in the financial statements
The Group has adopted AASB 16 Leases and AASB Interpretation 23 Uncertainty over Income Tax Treatment which
became effective for financial reporting periods commencing on or after 1 July 2019
AASB 16 Leases (AASB 16)
Nature of the effect of adoption of AASB 16
The Group applied the modified retrospective transition method to adopt AASB 16 and thus prior comparatives were not
restated. Under this method, the cumulative effect of initially applying the standard is recognised directly as an adjustment
to equity at the date of initial application, 1 July 2019. The Group opted to use the recognition exemptions for lease
contracts that have a lease term of 12 months or less and do not contain a purchase option (‘short-term lease’), and
lease contracts for which the underlying asset is of low value (‘low-value assets’) (ie. below US$5,000).
The Group has lease contracts for its office premises. Before the adoption of AASB 16 the Group’s classified each of its
leases (as lessee) at the inception date as either finance lease or operating lease. A lease was classified as a finance
lease if it transferred substantially all of the risks and rewards incidental to ownership of the leased asset to the Group;
otherwise it was classified as an operating lease. Prior to the date of initial application of AASB 16, the Group did not
have any finance leases recognised. The leases for the office premises was classified as operating leases. Operating
leases were not capitalised, and the lease payments were recognised as rent expense in the profit or loss on a straight-
line basis over the lease term. The current term of the office lease is for a period of 3 years with an option to extend a
further 12 months. At this stage it is not the intention of the Company to extend.
Upon adoption of AASB16, the Group applied a single recognition and measurement approach for all leases, except for
short-term leases and leases of low-value assets. The Group presents right-of-use assets and lease liabilities separately
in the statement of financial position. Right-of-use assets have been recognised based on an amount equal to the lease
liabilities. Lease liabilities have been recognised based on present value of the remaining lease payments, discounted
using the incremental borrowing rate at 6.15%.
The impact on operating cash flows is the removal of the payments for operating lease costs incurred (previously under
AASB 117 Leases), which were expensed through operating costs, except for cash flows relating to variable, short-term
and low-value payments. The principal component of lease payments is now recognised as a financing activity in the
statement of cashflow (previously presented as an operating activity).
The Group also applied the available practical expedients wherein it:
− Relied on its assessment of whether leases are onerous immediately before the date of initial application
− Applied the short-term leases exemptions to leases with a lease term that ends within 12 months at the date of initial
application
− Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application
Reconciliation of operating lease commitments
The lease liabilities as at 1 July 2019 can be reconciled to the operating lease commitments as of 30 June 2019 as
follows:
Operating lease commitments at 30 June 2019
Less:
Commitments relating to short term leases
Add:
Commitments related to mine development
Lease liabilities at 1 July 2019
$
5,454
(5,454)
1,887,602
1,887,602
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Amounts recognised in the statement of financial position and profit or loss
Set out below, are the carrying amounts of the Group’s right-of-use assets and lease liabilities and the movements during
the period:
Right-of-use assets
$
Office
Lease
Port
Facility
Total
Port
Facility
Lease Liabilities
$
Office
Lease
Total
1,887,602
-
1,887,602
1,887,602
-
1,887,602
-
-
-
-
(1,887,602)
104,599
(20,251)
104,599
(20,251)
-
-
-
-
-
-
-
-
-
104,599
104,599
-
3,611
(16,408)
3,611
(16,408)
(1,887,602)
(1,887,602)
-
(1,887,602)
-
84,348
84,348
-
91,802
91,802
Recognised as 1 July 2019
on adoption of AASB 16
Additions
Depreciation expense
Interest expense
Payments
Transfer to discontinued
operations
As at 30 June 2020
The effect of the adoption of AASB 16 as at 1 July 2019 was an increase in Right-of-use lease assets and Lease liabilities
of $1,887,602.
AASB Interpretation 23 Uncertainty over Income Tax Treatment
Interpretation 23 is applied by the Group from 1 July 2019. Interpretation 23 clarifies the application of the recognition and
measurement criteria in AASB 112 Income Taxes where there is uncertainty over income tax treatments. It requires
assessment of each uncertain tax position as to whether it is probable that a taxation authority will accept the position. Where
it is not probable, the effect of the uncertainty is reflected in determining the relevant taxable profit or loss, tax bases, unused
tax losses, unused tax credits or tax rates. The amount will be determined as either the single most likely amount or the sum
of the probability weighted amounts in a range of possible outcomes, whichever better predicts the resolution of the
uncertainty. Judgements are reassessed as and when new facts and circumstances come to light. No material impact was
noted on the application of Interpretation 23.
(d)
New and revised Accounting Standards for Application in Future Periods
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the
Group’s financial statements are disclosed below. The Group intends to adopt these new and amended standards and
interpretations, if applicable, when they become effective.
AASB 17 Insurance Contracts
In May 2017, the IASB issued AASB 17 Insurance Contracts (AASB 17), a comprehensive new accounting standard for
insurance contracts covering recognition and measurement, presentation and disclosure. Once effective, AASB 17 will
replace AASB 4 Insurance Contracts (AASB 4) that was issued in 2005. AASB 17 applies to all types of insurance contracts
(i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain
guarantees and financial instruments with discretionary participation features.
A few scope exceptions will apply. The overall objective of AASB 17 is to provide an accounting model for insurance contracts
that is more useful and consistent for insurers. In contrast to the requirements in AASB 4, which are largely based on
grandfathering previous local accounting policies, AASB 17 provides a comprehensive model for insurance contracts,
covering all relevant accounting aspects. The core of AASB 17 is the general model, supplemented by:
•
•
A specific adaptation for contracts with direct participation features (the variable fee approach)
A simplified approach (the premium allocation approach) mainly for short-duration contracts
AASB 17 is effective for reporting periods beginning on or after 1 January 2021, with comparative figures required. Early
application is permitted, provided the entity also applies AASB 9 and AASB 15 on or before the date it first applies AASB 17.
This standard is not expected to have a material impact on the Group.
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Amendments to AASB 3: Definition of a Business
In October 2018, the IASB issued amendments to the definition of a business in AASB 3 Business Combinations to help
entities determine whether an acquired set of activities and assets is a business or not. They clarify the minimum
requirements for a business, remove the assessment of whether market participants are capable of replacing any missing
elements, add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a
business and of outputs, and introduce an optional fair value concentration test. New illustrative examples were provided
along with the amendments.
Since the amendments apply prospectively to transactions or other events that occur on or after the date of first application,
the Group will not be affected by these amendments on the date of transition.
Amendments to AASB 101 and AASB 108: Definition of Material
In October 2018, the IASB issued amendments to AASB 101 Presentation of Financial Statements and IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors to align the definition of ‘material’ across the standards and to clarify
certain aspects of the definition. The new definition states that, ’Information is material if omitting, misstating or obscuring
it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make
on the basis of those financial statements, which provide financial information about a specific reporting entity.’
The amendments to the definition of material is not expected to have a significant impact on the Group’s consolidated
financial statements. The adoption of these new and amended standards and interpretations did not result in any significant
changes to the Group’s accounting policies.
The Group has not elected to early adopt any other new or amended standards or interpretations that are issued but not
yet effective.
e) Deferred tax assets and deferred tax liabilities
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in controlled entities 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.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
4. SEGMENT INFORMATION
Accounting Policy
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the full Board of Directors.
(a) Description of segments
Management has determined the operating segments based on the reports reviewed by the Board of Directors that
are used to make strategic decisions.
The Board considers the business from both functional and geographic perspectives and has identified that there are
two reportable segments being:
• exploration and development of Wonarah in the Northern Territory in Australia;
•
exploration and development of Jundee South in Western Australia; and
•
unallocated items comprise corporate administrative costs, interest revenue, finance costs, investments,
corporate plant and equipment and income tax assets and liabilities.
(b) Segment information provided to the Board
The following table presents revenue and profit for the Group’s operating segments for the reporting period.
WONARAH
(NORTHERN
TERRITORY)
JUNDEE SOUTH
(WESTERN
AUSTRALIA)
UNALLOCATED –
OTHER SEGMENTS
TOTAL
CONSOLIDATED
$
$
$
$
2020
Income
Interest revenue
Total segment revenue
Total revenue as per statement of
comprehensive income
Impairment of non-current assets
Salaries, administrative and other
expenses
Depreciation and amortisation
Net loss on disposal of fixed assets
Segment net loss before tax
Tax benefit
Segment net loss after tax
Loss from discontinued operations
Total net loss as per statement of
comprehensive income
Segment assets
Capitalised exploration and evaluation
expenditure
Plant and equipment
Other assets at balance date
Total segment assets
Segment liabilities
Other liabilities at balance date
Total segment liabilities
23.471
23,471
(596,960)
(38,926)
-
(883)
(613,298)
-
(613,298)
-
-
-
-
-
-
-
-
-
12,209
12,209
35,680
35,680
35,680
-
(596,960)
(2,725,555)
(2,764,481)
(22,283)
(46,246)
(22,283)
(47,129)
(2,781,875)
(3,395,173)
-
-
(2,781,875)
(3,395,173)
(2,274,543)
(5,669,716)
WONARAH
(AUSTRALIA)
BAOBAB
(SENEGAL)
UNALLOCATED –
OTHER
SEGMENTS
TOTAL
CONSOLIDATED
5,889,800
454,526
-
6,344,326
-
1,497,094
7,386,895
1,740,628
1,740,628
-
-
454,526
3,796
1,891,322
1,895,118
3,796
3,388,416
9,736,539
-
-
458,286
458,286
2,198,914
2,198,914
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
4. SEGMENT INFORMATION (continued)
2019
Income
Interest revenue
Total segment revenue
Total revenue as per statement of
comprehensive income
Impairment of non-current assets
Salaries, administrative and other
expenses
Impairment of doubtful debts
Depreciation and amortisation
WONARAH
(NORTHERN
TERRITORY)
BAOBAB
(SENEGAL)
UNALLOCATED –
OTHER SEGMENTS
TOTAL
CONSOLIDATED
$
$
$
$
39,085
39,085
112
112
24,776
24,776
63,973
63,973
63,973
(143,642)
(38,786,263)
-
(38,929,905)
(37,739)
(3,612,135)
(2,947,683)
(6,597,557)
-
(2,174)
(896,095)
(371,991)
-
(17,247)
(896,095)
(391,412)
Segment net loss before tax
(144,470)
(43,666,372)
(2,940,154)
(46,750,996)
Tax benefit
Segment net loss after tax
Loss from discontinued operations
Total net loss as per statement of
comprehensive income
Segment assets
Capitalised exploration and evaluation
expenditure
Capitalised mine development expenditure
Plant and equipment
Other assets at balance date
Total segment assets
Segment liabilities
-
3,311,274
-
3,311,274
(144,470)
(40,355,098)
(2,940,154)
(43,439,722)
WONARAH
(AUSTRALIA)
BAOBAB
(SENEGAL)
UNALLOCATED –
OTHER
SEGMENTS
5,889,800
1,941,789
-
883
20,534,534
423,027
1,502,302
2,202,480
7,392,985
25,101,830
-
-
4,151
360,850
365,001
(40,355,098)
(3,084,624)
TOTAL
CONSOLIDATED
7,831,589
20,534,534
428,061
4,065,632
32,859,816
Other liabilities at balance date
1,291,515
12,987,325
2,102,963
16,381,803
Total segment liabilities
1,291,515
12,987,325
2,102,963
16,381,803
5. INCOME
Accounting policies
Interest income is recognised on a time proportionate basis that takes into account the effective yield on the financial
assets.
Other income
Interest from financial institutions
2020
$
2019
$
35,680
35,680
63,973
63,973
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
6. ADMINISTRATIVE AND EMPLOYEE BENEFITS EXPENSE
Loss before income tax includes the following administrative expenses
Consultants
Regulatory expenses
Accounting and legal
Travel expenses
Short tern office lease expense
Other administrative expenses
Loss before income tax includes the following employee benefit
expenses
Salaries and wages
Defined contribution superannuation expense
Post-employment benefits
Director fees
Medical and insurance
7. INCOME TAX
Accounting Policies
2020
$
2019
$
842,055
130,416
337,187
31,524
89,407
212,261
749,437
95,752
286,934
225,854
104,330
325,533
1,642,850
1,787,840
2020
$
2019
$
76,252
16,932
-
603,366
48,027
744,576
897,323
39,071
9,071
366,541
37,906
1,349,912
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on
the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of
the reporting period in the countries where the Company’s subsidiaries and associated entities operate and generate
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred
income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting
date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability
is settled.
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
7. INCOME TAX (continued)
(a) Income tax expense/(benefit)
Current tax
Deferred tax
2020
$
2019
$
-
-
-
-
(3,311,274)
(3,311,274)
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Loss from discontinued operations before income tax expense
Accounting loss before income tax
Prima facie tax benefit at the Australian tax rate of 30% (2019: 30%)
(3,395,173)
(2,274,543)
(5,669,715)
(1,700,915)
(3,084,624)
(40,355,098)
(43,439,722)
(13,031,916)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Share based payments
Unrealised foreign exchange gain/(loss)
Other
Tax effect of current year tax losses and timing differences for which no
deferred tax asset has been recognised
Income tax benefit
Attributed to:
Continuing operations
Discontinuing operations
(c) Tax affect relating to each component of other comprehensive income
Financial assets
(d) Deferred tax assets
Capital raising costs
Rehabilitation provision
Other provisions and accruals
Tax losses in Australia
112,215
9,118
(110,078)
1,689,660
-
-
-
-
(20,365)
(20,365)
173,250
521,902
57,637
34,329,651
35,082,440
12,550
48,720
(126,145)
9,783,745
(3,311,274)
-
(3,311,274)
(3,311,274)
-
-
251,840
386,850
69,549
30,600,468
31,308,707
Deferred tax assets not recognised
(33,158,777)
(29,223,846)
Offset against deferred tax liabilities
Net deferred tax assets
(e) Deferred tax liabilities
1,923,663
(1,923,663)
-
Capitalised exploration and evaluation costs and development costs
(1,903,298)
Unrealised foreign exchange gain
Financial assets at FVOCI
Other accruals
Offset against deferred tax assets
Net deferred tax liabilities
-
(20,365)
-
(1,923,663)
1,923,663
-
2,084,861
(2,084,861)
-
(1,829,436)
(254,807)
-
(618)
(2,084,861)
2,084,861
-
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
7. INCOME TAX (continued)
DEFFERED TAX
Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not been brought
to account at 30 June 2020 because the directors do not believe it is appropriate to regard realisation of the deferred tax
assets as probable at this point in time. These benefits will only be obtained if:
(i) The Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from
the deductions for the loss and exploration expenditure to be realised;
(ii) The Company continues to comply with conditions for deductibility imposed by law; and
(iii) No changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the loss
and exploration expenditure.
TAX CONSOLIDATION
Avenira Limited and its 100% owned Australian resident subsidiaries are part of a tax consolidated group. As a
consequence, all members of the tax consolidated group are taxed as a single entity. Avenira Limited is the head entity
of the tax consolidated group. Members of the tax consolidated group have entered into a tax sharing agreement that
provides for the allocation of income tax liabilities between the entities should the head entity default on its payment
obligations. No amounts have been recognised in the financial statements in respect of this agreement on the basis
that the possibility of default is remote.
8. CASH AND CASH EQUIVALENTS
Accounting Policies
For statement of cash flows presentation purposes, cash and cash equivalents includes cash on hand, deposits held at
call with financial institutions, other short-term highly liquid investments with original maturities of three months or less
that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value, and
bank overdrafts.
Cash at bank and in hand (continuing operations)
Cash at bank and in hand (discontinued operations)
Short-term deposits
Cash and cash equivalents
2020
$
488,337
-
800,000
1,288,337
2019
$
278,689
21,855
-
300,544
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates.
Short term deposits are made for varying periods of between one day and three months depending on the immediate
cash requirements of the Group and earn interest at the respective short-term deposit rates. Refer to Note 18 for
additional details on the impact of interest rates on cash and cash equivalents for the period.
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
9. TRADE AND OTHER RECEIVABLES
Accounting Policies
Recognition and measurement
Trade receivables are initially recognised at fair value and subsequently at amortised cost less a provision for any
expected credit losses. Trade receivables are due for settlement no more than 30 days from the date of recognition.
Impairment
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate. The
expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral
to the contractual terms.
For trade receivables and other receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the
Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each
reporting date. The Group concluded that the lifetime ECL for these assets would be negligible and therefore no
additional loss allowance was required.
Current
Trade and other receivables(i)
Government taxes receivable(ii)
Security deposits
(i) Trade and other receivables are generally due for settlement within 30 days and therefore classified as current.
(ii) Government taxes receivable in 2020 relates to GST receivable in Australia
The carrying amounts disclosed above represent their fair value.
Non-Current
Security deposits (1)
(i) Security Deposit for Wonarah tenements in the Northern Territory
10. LEASES
Accounting Policies
(i)
Right-of-use assets
2020
$
3,627
75,845
29,667
109,139
2019
$
11,446
380
31,194
43,020
2020
$
2019
$
1,481,600
1,481,600
1,481,600
1,481,600
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses,
and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less
any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end
of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its
estimated useful life and the lease term. Right-of-use assets are subject to impairment.
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
10. LEASES (continued)
(ii)
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease
term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index
or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date,
the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a
change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
(iii)
Leases - Estimating the incremental borrowing rate
When the Group cannot readily determine the interest rate implicit in the lease, it uses its incremental borrowing rate
(IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar
term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a
similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation
when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when
they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the
subsidiary’s functional currency). The Group estimates the IBR using observable inputs (such as market interest rates)
when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit
rating).
(iv)
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases (i.e., leases that have a lease term
of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of
low-value assets recognition exemption to leases that are considered of low value. Lease payments on short-term leases
and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
Set out below are the carrying amounts of right-to-use assets recognised and the movements during the year:
As at 1 July 2019 on adoption of AASB 16
Additions
Depreciation expense
Transfer to discontinued operations
As at 30 June 2020
Set out below are the carrying amounts of lease liabilities and the movements during the period:
As at 1 July 2019 on adoption of AASB 16
Additions
Interest expense
Payments
Transfer to discontinued operations
As at 30 June 2020
Current
Non-current
2020
$
1,887,602
104,599
(20,251)
(1,887,602)
84,348
2020
$
1,887,602
104,599
3,611
(16,408)
(1,887,602)
91,802
35,816
55,986
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
11. DISCONTINUED OPERATIONS
Accounting Policy
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered
principally through a sale transaction rather than through continuing use. Non-current assets and disposal groups classified
as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.
Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance
costs and income tax expense. The criteria for held for sale classification is regarded as met only when the sale is highly
probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to
complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to
sell will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed
within one year from the date of the classification.
Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial
position.
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or
is classified as held for sale, and:
Represents a separate major line of business or geographical area of operations
Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations
Sale of Baobab Phosphate Project
On 1 July 2019 Avenira announced that it proposed to sell its interests in the Baobab Phosphate Project and Novaphos to
a consortium of its major shareholders (the Purchasers) in return for cash consideration and essential funding support (the
‘Transaction’).
The Baobab Phosphate Project represented the entirety of the Group’s Baobab (Senegal) operating segment until 14
October 2019. With Baobab Phosphate Project being classified as a discontinued operation, the Baobab (Senegal)
segment is no longer presented in the segment note. The results of the Baobab Phosphate Project and Novaphos for the
period as presented below:
Other income
Administration expenses
Salaries and employee benefits
Depreciation
Impairment of Doubtful debts
Impairment of financial assets
Other operating expenses
Impairment
FX Movements
Profit/(loss) before tax from discontinued operation
Tax benefit:
Loss for the year from discontinued operations
Loss on sale of the discontinued operations
Profit/(loss) for the period from discontinued operations
Loss for the period is attributable to:
Owners of Avenira Limited
Non-controlling interest
Profit/(loss) for the period from discontinued operations
*Represents the level of activity prior to the sale on 22 October 2019
2020*
$
3,561
(411,690)
(132,048)
(116,719)
-
-
(343,958)
2019
$
112
(3,348,690)
(192,074)
(371,991)
(896,095)
(139.838)
-
-
(38,786,264)
54,041
(946,813)
-
(946,813)
(1,327,730)
(2,274,543)
(1,917,415)
(357,128)
(2,274,543)
68,468
(43,666,372)
3,311,274
(40,355,098)
-
(40,355,098)
(32,312,046)
(8,043,052)
(40,355,098)
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
11. DISCONTINUED OPERATIONS (continued)
Consideration received from sale of Baobab Project
Cash Received (U$3,000,000)
Shares returned (617,873,316 shares @ $0.008)
Loans Forgiven
Directors Fees Forgiven
Total Consideration
Net cash flows generated from the sale of Baobab Project are
Cash Received (U$3,000,000)
Cash sold as part of discontinued operations
Total Consideration
The net cash flows from the discontinued operation are as follows:
Operating
Investing
Financing
Net cash (outflow) / inflow
Earnings per share
A$
4,369,356
4,942,987
1,389,284
408,452
11,110,079
2020
$
4,369,356
(85,122)
4,284,234
2019
$
(3,531,994)
(3,782,219)
7,156,918
(157,295)
2020
$
(1,154,281)
(1,132,017)
2,349,565
63,267
Basic profit / (loss) for the year from discontinued operations (cps)
Diluted profit / (loss) for the year from discontinued operations (cps)
(0.36)
(0.36)
(3.94)
(3.94)
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
11. DISCONTINUED OPERATIONS (continued)
The Baobab Phosphate Project Sale was completed on 22 October 2019 and under the agreement Avenira agreed to sell
or assign all its rights and interests in the following assets to a consortium of its major shareholders (the Purchasers):
• Baobab Fertilizer Africa (BFA) (the wholly owned subsidiary which held Avenira’s interests in the Baobab
Phosphate Project) and the associated Baobab Intellectual Property and Other Information;
• Novaphos (other than the existing Australian Licence Agreement as outlined below); and
•
The intercompany loan between Avenira and BMCC; and the intercompany loan between Avenira and BFA.
Under the Transaction:
• Avenira received cash consideration of US$3.0M (A$4.4M), and loan and director fees forgiveness of US$1.2M
(A$1.8M), for a total consideration value of US$4.2M (A$6.2M), using a A$:US$ 0.6866 exchange rate.
• Avenira undertook, for nil consideration, a buy-back and capital reduction of all the existing shares held by the
major shareholders.
The transaction also resulted in the Purchasers taking on responsibility for the outcome of current Senegalese tax audits
of BMCC and Gadde Bissik Phosphate Operations SUARL (its operating subsidiary).
Whilst Avenira has sold its interests in Novaphos (including the licence agreement to use the Novaphos technology in
Senegal), Avenira retains an exclusive licence to use the Novaphos technology in Australia.
On 1 July 2019 the Group recognised a right of use asset and lease liability of A$1,887,602 for the 25-year lease on a port
facility relating to the Baobab Project. As the Baobab project was sold prior to 30 June 2020, the assets and liabilities
classified as held for sale are no longer included in the statement of financial position.
Pursuant to the sale agreement, Avenira must indemnify and keep indemnified Tablo Corporation, Baobab Partners LLC
and Agrifields DMCC in respect of any undisclosed tax liabilities of BFA, BMCC or GBO that were due and payable and
not been paid before the sale. This amount is capped at US$500,000 in aggregate and expires in October 2020.
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
12. CAPITALISED EXPLORATION AND EVALUATION EXPENDITURE
Accounting Policies – Capitalised Exploration and Evaluation Expenditure
Exploration and evaluation costs for each area of interest that has progressed to pre-feasibility are accumulated and
carried forward where right of tenure of the area of interest is current and they are expected to be recouped through sale
or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the
area of interest have not at the end of the reporting period reached a stage that permits reasonable assessment of the
existence of economically recoverable reserves, and activates and significant operations in, or in relation to, the area of
interest are continuing.
When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated costs in respect to
that area are written off in the financial period the decision is made. Each area of interest is also reviewed at the end of
each accounting period and accumulated costs written off to the extent that they will not be recoverable in the future.
Reconciliation of movements of exploration and evaluation costs in respect of mining areas of interest
2020
$
2019
$
Opening net carrying amount
Capitalised exploration and evaluation costs
Increase to rehabilitation provision
Impairment of exploration and evaluation expenditure(i)
Assets Held for Sale
Foreign currency translation movement
Closing net carrying amount
Closing net carrying amount represented by the following projects
Jundee South Project
Wonarah Phosphate Project
Closing net carrying amount
5,889,800
10,018,672
601,312
450,174
(596,960)
-
-
6,344,326
733,804
-
(3,028,186)
(1,941,789)
107,299
5,889,800
2020
$
2019
$
454,526
5,889,800
6,344,326
-
5,889,800
5,889,800
The ultimate recoupment of costs carried forward for exploration and evaluation is dependent on the successful
development and commercial exploitation or sale of the respective mining areas.
(i)
Impairment recognized in respect of the Wonarah Project. Refer to the key estimates and assumptions section below for details regarding the Group’s
assessment of the carrying value of recognised exploration and evaluation expenditure.
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
12. CAPITALISED EXPLORATION AND EVALUATION EXPENDITURE (continued)
Key estimates and assumptions
The application of the Group’s accounting policy requires management to make certain estimates and assumptions as to
future events and circumstances, in particular, the assessment of whether economic quantities of reserves will be found.
Any such estimates and assumptions may change as new information becomes available, which may require adjustments
to the carrying value of assets.
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to
impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined.
SRK Consulting conducted an update to the valuation of the Wonarah Project as at 30 June 2020. In SRK’s opinion, the
valuation of the Wonarah Project has not materially changed since the effective date of the 2019 SRK Report. As such
the valuation summary outlined in the 2019 SRK Report and the 2019 Report Update is effective as at 30 June 2020.
The 2019 report revealed fair values for the Wonarah Project ranging from $6,010,000 to $16,020,000, based on a range
of resource multiples derived from recent transactions and enterprise values of market participants with defined
phosphate mineral resources (level 3 in the fair value hierarchy).
The directors consider that the low end of the independent expert’s range is most representative of the fair value less
costs of disposal of the Wonarah Project. As a result, during the reporting period an amount of $596,960 (30 June 2019:
$143,642) was impaired and recognised in the Statement of Profit or Loss and Other Comprehensive Income. The
recoverable amount is calculated as $5,889,800 after allowing for estimated costs of disposal.
13. TRADE AND OTHER PAYABLES
Accounting Policies
Recognition and measurement
Liabilities for trade creditors and other amounts are carried at amortised cost, which is the amount initially recognised,
minus repayments whether or not billed to the consolidated entity.
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
which are unpaid. The amounts are unsecured, non-interest bearing and are paid on normal commercial terms.
Trade payables(i)
Other payables and accruals
(i)
Trade payables are non-interest bearing and generally on 30-day terms.
The carrying amounts disclosed above represent their fair value.
14. PROVISIONS
Accounting Policies
(i) Wages and salaries and annual leave
2020
$
194,793
166,230
361,023
2019
$
530,667
113,319
643,986
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12
months of the reporting date are recognised in provisions in respect of employees’ services up to the reporting date and
are measured at the amounts expected to be paid when the liabilities are settled.
(ii) Long service leave
The Group does not expect its long service leave benefits to be settled wholly within 12 months of each reporting date.
The Group recognised a liability for long service leave measured as the present value of expected future payments to be
made in respect of services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wages and salary levels, experience of employee departures, and periods of
service. Expected future payments are discounted using market yields at the reporting date on high quality corporate
bonds with terms to maturity and currencies that match, as closely as possible the estimated future cash outflows.
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
14. PROVISIONS (continued)
(iii) Mine rehabilitation and restoration
The Group records the present value of the estimated cost of legal and constructive obligations to restore operating
locations in the period in which the obligation arises. The nature of restoration activities includes the dismantling and
removing of structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and
restoration, reclamation and revegetation of affected areas.
Typically, the obligation arises when the asset is installed or the ground/environment is disturbed at the production location.
When the liability is initially recorded, the estimated cost is recognised by increasing the carrying amount of the related
mining asset. Over time, the liability is increased for the change in the present value based on a discount rate appropriate
to the market assessments and the risks inherent in the liability. Additional disturbances or changes in rehabilitation costs
will be recognised as additions or changes to the corresponding asset and rehabilitation liability when incurred. The
unwinding of the effect of discounting the provision is recorded as a finance cost in the statement of comprehensive
income. The recognized carrying amount is depreciated over the useful life of the related asset.
Costs incurred that relate to an existing condition caused by past operations, and do not have future economic benefit, are
expensed as incurred.
Current
Employment benefits
Non-Current
Mine rehabilitation and restoration(i)
Movements in mine rehabilitation and restoration provision
Opening net carrying amount
(Decrease)/increase in provision
(Decrease)/increase from change in discount and inflation rate
Foreign currency translation movement
Assets held for sale
Closing net carrying amount
2020
$
2019
$
6,415
6,415
143,008
143,008
2020
$
2019
$
1,739,674
1,739,674
1,289,500
1,289,500
1,289,500
2,432,970
344,196
105,978
-
-
1,739,674
-
(632,351)
20,963
(532,082)
1,289,500
(i) Provision for future removal and restoration costs are recognised where there is a present obligation as a result of exploration, development, production,
transportation or storage activities having been undertaken, and it is probable that an outflow of economic benefits will be required to settle the obligation.
The provision includes the restoration costs based on the estimated future costs as assessed independently by the Northern Territory Government
Department of Regional Development, Primary Industry, Fisheries and Resources. The estimated future obligations include the costs of removing plant,
abandoning mine site and restoring the affected areas.
Key estimates and assumptions
The Group assesses its mine rehabilitation provision half yearly in accordance with the above accounting policy. Significant
judgment is required in determining the provision for mine rehabilitation as there are many transactions and other factors
that will affect the ultimate liability payable to rehabilitate the mine sites. Factors that will affect this liability include future
disturbances caused by further development, changes in technology, changes in regulations, price increases and changes
in discount rates. When these factors change, or become known in the future, such differences will impact the mine
rehabilitation provision in the period in which they change or become known. As at 30 June 2020 the rehabilitation
obligation has a carrying value of $1,739,674 (2019: $1,289,500) for the Wonarah Phosphate Project.
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
15. LOANS AND BORROWINGS
Accounting Policies
Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least
12 months after the reporting date.
Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost. Any
differences between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over
the period of the borrowings using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other
borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that
an entity incurs in connection with the borrowing of funds.
Current
Bridge loans – unsecured
Total current loans and borrowings
Bridge loans
INTEREST
RATE
%
6.00
2020
$
2019
$
-
-
1,317,984
1,317,984
In March 2019 the Company entered into funding agreements with Agrifos Partners LLC, Tablo Corporation an affiliate of
Groupe Mimran and Agrifields DMCC whereby unsecured bridge loans were provided to a total of US$900,000.
The loans were fully drawn down during 2019 and accrued interest at 6%. The unsecured bridge loans were assigned and
forgiven as part of the consideration for the Sale of Asset as approved by shareholders at the General Meeting held 14
October 2019. See Note 11 for further details on consideration paid.
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
16. ISSUED CAPITAL
Accounting Policies
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition
of a business are not included in the cost of the acquisition as part of the purchase consideration.
(a) Share capital
Ordinary shares fully paid
Total share capital
NOTES
NUMBER OF
SHARES
$
NUMBER OF
SHARES
$
2020
2019
16(b),
16(e)
440,754,926
137,337,162
1,058,628,242
142,280,148
440,754,926
137,337,162
1,058,628,242
142,280,148
(b) Movements in ordinary share capital
Beginning of the financial year
Transactions during the year:
- Shares cancelled (i)
- Issue of shares(ii)
- Issue of shares(iii)
- Issue of shares(iv)
- Issue of shares(v)
- Less: transaction costs
End of the financial year
1,058,628,242
142,280,148
915,903,243
139,480,390
(617,873,316)
(4,942,987)
-
-
-
-
-
-
-
-
-
-
-
-
40,000,000
800,000
99,999,999
2,000,000
2,025,000
700,000
50,625
9,800
-
(60,667)
440,754,926
137,337,162
1,058,628,242
142,280,148
(i) Shares returned as part of the consideration received from the sale of the Baobab Project. Refer to Note 12 for further details.
(ii) Issued at 2.0 cents pursuant to placement.
(iii) Issued at 2.0 cents pursuant to placement.
(iv) Issued at 2.5 cents to Mr. L Calvarin pursuant to 2018 start term incentive plan.
(v) Issued at 1.4 cents.
(c) Movements in unlisted options on issue
Beginning of the financial year
Expired/cancelled during the financial year
Issued during the financial year
- 2 cent options, 30 November 2022
- 3 cent options, 30 November 2022
End of the financial year
(d) Movements in share rights
Beginning of the financial year
Lapsed during the year:
- Performance rights forfeited on 30 June 2019 (3)
End of the financial year
NUMBER OF OPTIONS
2020
2019
80,000,000
80,000,000
(80,000,000)
24,000,000
24,000,000
-
-
-
48,000,000
80,000,000
NUMBER OF SHARE RIGHTS
2020
2019
-
-
-
5,000,000
(5,000,000)
-
(1) Mr. Calvarin 5,000,000 unvested performance rights were forfeited upon resignation as Managing Director and Chief Executive Office
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
16. ISSUED CAPITAL (continued)
(e) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion
to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote,
and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
(f) Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they
may continue to provide returns for shareholders and benefits for other stakeholders. There has been no change in the
strategy adopted by management to control the capital of the Group since the prior year.
Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit
facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital risk
management is the current working capital position against the requirements of the Group to support exploration
programmes, development and production start-up phases of its exploration projects and corporate overheads. The
Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view
to initiating appropriate funding as required.
The working capital position of the Group at the end of the year is as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Lease Liability
Current provisions
Current loans and borrowings
Working capital position
2020
$
1,288,337
109,139
(361,023)
(35,816)
(6,415)
2019
$
278,689
43,020
(643,986)
-
(143,008)
-
(1,317,984)
994,222
(1,783,269)
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
17. RESERVES AND ACCUMULATED LOSSES
(a) Reserves
Financial assets at fair value through OCI
Foreign currency translation
Share-based payments
Non-controlling interest reserve
Total reserves
Movements:
Fair Value Reserve of Financial Assets at FVOCI
Balance at beginning of year
Revaluation
Balance at end of year
Foreign currency translation reserve
Balance at beginning of year
Recycled to the profit and loss on derecognition of controlled entity
Currency translation differences arising during the year
Balance at end of year
Share-based payments reserve
Balance at beginning of year
Performance rights and share rights
Other share-based payments(i)
Share rights converted to ordinary shares
Balance at end of year
Non-controlling interest reserve
Balance at beginning of year
Balance at end of year
(i) Refer to Note 28 Share Based Payments for further details.
2020
$
2019
$
67,882
128,765
-
2,325,644
17,597,429
17,223,378
7,465,464
7,465,464
25,259,540
27,014,485
2020
$
2019
$
-
67,882
67,882
15,610
(15,610)
-
2,325,644
1,438,988
(2,332,312)
135,433
128,765
-
886,656
2,325,644
17,223,379
17,314,837
-
(40,833)
374,051
-
-
(50,626)
17,597,429
17,223,378
7,465,464
7,465,464
7,465,464
7,465,464
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
17. RESERVES AND ACCUMULATED LOSSES (continued)
(b) Accumulated losses
Balance at beginning of year
Net loss for the year attributable to owners of Avenira Limited
Balance at end of year
(c) Nature and purpose of reserves
2020
$
2019
$
(149,389,359)
(113,992,689)
(5,669,716)
(35,396,670)
(155,059,077)
(149,389,359)
(i) Fair Value Reserve of Financial Assets at FVOCI
Changes in the fair value of investments, such as equities classified as Fair value reserve of financial assets at FVOCI,
are recognised in other comprehensive income and accumulated in a separate reserve within equity. Amounts are
reclassified to profit or loss when the associated assets are sold or impaired.
(ii) Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of
foreign operations where their functional currency is different to the presentation currency of the reporting entity. The
reserve is recognised in profit and loss when the net assets of foreign controlled entities are disposed of.
(iii) Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of options, contingent share rights and
performance rights granted.
(iv) Non-controlling interest reserve
The non-controlling interest’s reserve records the difference between the fair value of the amount by which the non-
controlling interest was adjusted to record their initial relative interest and the consideration paid.
18. FINANCIAL RISK MANAGEMENT
Accounting Policies
Financial Assets
The Group classifies its financial assets in the following categories: at fair value through profit or loss (FVTPL), financial
assets at amortised cost, or fair value through other comprehensive income (FVOCI). The classification is based on two
criteria: the Group’s business model for managing the assets; and whether the instruments’ contractual cash flows
represent ‘solely payments of principal and interest’ on the principal amount outstanding (the ‘SPPI criterion’). The SPPI
test is applied to the entire financial asset, even if it contains an embedded derivative. Consequently, a derivative
embedded in a debt instrument is not accounted for separately.
(i) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently at amortised cost less a provision for any
expected credit losses. Trade receivables are due for settlement no more than 30 days from the date of recognition.
(ii) Financial assets measured at fair value through other comprehensive income
These financial assets consist of investments in ordinary shares, comprising principally of marketable equity securities.
Investments are initially recognised at fair value plus transaction costs. Unrealised gains and losses arising from changes
in the fair value of these investments are recognised in equity in the financial assets revaluation reserve. Amounts
recognised are not recycled to the statement of comprehensive income in future periods.
The fair value of the listed securities are based on quoted market prices and accordingly is a Level 1 measurement basis
on the fair value hierarchy.
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
18. FINANCIAL RISK MANAGEMENT (continued)
Impairment of financial assets
Expected credit losses are recognised in the statement of profit and loss and other comprehensive income on financial
assets measured at amortised cost.
Financial Liabilities
The Group classifies its financial liabilities in the following categories: financial liabilities at amortised cost.
(i) Payables
This category generally applies to trade and other payables. Liabilities for trade creditors and other amounts are carried
at amortised cost which is the amount initially recognised. Minus repayments whether or not billed to the Group. Payables
are non-interest bearing and generally settled on 30-90 day terms. Due to the short term nature of these payables, their
carrying value is assumed to approximate their fair value. For more information refer to Note 15.
(ii) Loans and borrowings
This category generally applies to interest-bearing loans and borrowings. All loans and borrowings are initially recognised
at fair value less transaction costs and subsequently at amortised cost. Any difference between the proceeds received
and the redemption amount is recognised in the income statement over the period of the borrowings using the effective
interest method. For more information refer to Note 17.
FINANCIAL RISK MANAGEMENT POLICIES
The Group’s principal financial liabilities, other than derivatives, comprise loans and borrowings, and trade and other
payables. The main purpose of these financial liabilities is to finance the Group’s operations. The Group’s principal
financial assets include trade receivables, and cash and short-term deposits that derive directly from its operations. The
Group also holds investments in debt and equity instruments and enters into derivative transactions.
The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the
management of these risks. The Group’s senior management is supported by a financial risk committee that advises on
financial risks and the appropriate financial risk governance framework for the Group. The financial risk committee
provides assurance to the Group’s senior management that the Group’s financial risk activities are governed by
appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with
the Group’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist
teams that have the appropriate skills, experience and supervision. It is the Group’s policy that no trading in derivatives
for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of
these risks, which are summarised below.
Financial instruments
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Other non-current receivables
Fair value reserve of financial assets at FVOCI
- Listed investments
- Unlisted investments
2020
$
2019
$
1,288,337
109,139
1,481,600
424,993
10,000
3,314,069
278,689
43,020
1,481,600
15,620
-
1,818,929
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
18. FINANCIAL RISK MANAGEMENT (continued)
Financial liabilities
Trade and other payables
Lease liabilities - current
Lease liabilities – non-current
Loans and borrowings
(a) Market risk
2020
$
2019
$
361,023
35,816
55,986
-
452,825
643,986
-
-
1,317,984
1,961,970
Market risk arises from Avenira’s exposure to interest bearing financial assets and foreign currency financial instruments.
It is a risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in foreign
exchange rates (currency risk), interest rates (interest rate risk) and share prices (price risk). The Group has determined
the impact of reasonably possible movements in foreign exchange and share prices is not material.
(i)
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. As at and during the year ended 30 June 2020, the Group had interest-bearing assets in the form of
cash and cash equivalents. As such the Group’s income and operating cash flows are somewhat exposed to movements in
market interest rates due to the movements in variable interest rates on cash and cash equivalents. The Group’s does not
have exposure to interest rate risk arising from its financial liabilities.
The Group’s policy is to monitor the interest rate yield curve out to six months to ensure a balance is maintained between
the liquidity of cash assets and the interest rate return. At 30 June 2020, the entire balance of cash and cash equivalents
for the Group of $1,288,337 (2019: $300,544) is subject to interest rate risk. The proportional mix of floating interest rates
and fixed rates, to a maximum of six months, fluctuate during the year depending on current working capital requirements.
(b) Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its
financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial
instruments
Credit risk related to balances with banks and other financial institutions is managed by investing surplus funds in financial
institutions that maintain a high credit rating.
The maximum exposure to credit risk at the reporting date is the carrying amount of the assets as summarised below, none
of which are impaired or past due.
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
18. FINANCIAL RISK MANAGEMENT (continued)
Financial assets
Cash and cash equivalents
Trade and other receivables
Other non-current receivables
2020
$
2019
$
1,288,337
109,139
1,481,600
2,879,076
278,689
43,020
1,481,600
1,803,309
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit
ratings (if available) or to historical information about counterparty default rates.
Cash at bank and short-term bank deposits
Held with Australian banks and financial institutions
AA3 rated
1,288,337
277,253
2020
$
2019
$
Held with South African banks and financial institutions
BBB rated
Trade and other receivables
Held with Australian banks and financial institutions
AA- rated
AA3 rated
Counterparties with external credit ratings
Counterparties without external credit ratings
Group 1
Group 2
Other non-current receivables
Held with Australian banks and financial institutions
AA- rated
-
1,288,337
1,436
278,689
-
29,667
-
79,472
-
109,139
-
15,000
-
28,020
-
43,020
1,481,600
1,481,600
1,481,600
1,481,600
(c) Liquidity risk
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash
and/or funding facilities are available to meet the current and future commitments of the Group. The Board of Directors
constantly monitors the state of equity markets in conjunction with the Group’s current and future funding requirements, with
a view to initiating capital raisings as required.
The financial liabilities of the Group consist of trade and other payables and lease liabilities as disclosed in the statement of
financial position. All trade and other payables are non-interest bearing and due within 12 months of the reporting date.
The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed
repayment periods.
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
18. FINANCIAL RISK MANAGEMENT (continued)
Contractual maturities of financial liabilities
LESS THAN
1 MONTH
1-3
MONTHS
3 MONTHS -
1 YEAR
$
$
$
1-5
YEARS
$
5+ YEARS
TOTAL
$
$
2020
Trade and other payables
Lease Liabilities
2019
Interest bearing loans and
borrowings at 6.00%
Trade and other payables
(d) Net fair value
Fair value estimation
194,792
166,231
-
11,367
194,792
177,598
-
33,751
33,751
-
61,246
61,246
-
- 1,317,984
530,666
113,320
-
530,666
113,320 1,317,984
-
-
-
-
-
-
-
-
-
361,023
106,364
467,387
1,317,984
643,986
1,961,970
The fair value of financial assets and financial liabilities held by the Group must be estimated for recognition and
measurement or for disclosure purposes. All financial assets and financial liabilities of the Group at the balance date are
recorded at amounts approximating their fair value.
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. The
quoted market price used for financial assets held by the Group is the current bid price.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair
values due to their short-term nature.
The totals for each category of financial instruments, other than those with carrying amounts which are reasonable
approximations of fair value, are set out below:
CARRYING AMOUNT
FAIR VALUE
2020
$
2019
$
2020
$
2019
$
Financial assets
Fair value of financial assets through OCI
Total financial assets
424,993
424,993
15,620
15,620
424,993
424,993
15,620
15,620
60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
18. FINANCIAL RISK MANAGEMENT (continued)
Financial instruments measured at fair value
The financial instruments recognised at fair value in the statement of financial position have been analysed and classified
using a fair value hierarchy reflecting the significance of the inputs used in the making the measurements. The fair value
hierarchy consists of the following levels:
•
•
quoted prices in active markets for identical assets or liabilities (Level 1).
inputs other than quoted process included within Level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (Level 2).
•
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
2020
Financial assets
Fair value of financial assets through OCI –
listed
Fair value of financial assets through OCI–
unlisted
2019
Financial assets
Fair value of financial assets through OCI –
listed
Fair value of financial assets through OCI–
unlisted
LEVEL 1
LEVEL 2
LEVEL 3
TOTAL
$
$
$
$
414,993
-
414,993
15,620
-
15,620
-
-
-
-
-
-
-
414,993
10,000
10,000
10,000
424,993
-
-
-
15,620
-
15,620
(e) Capital risk management
For the purposes of the Group’s capital management, capital includes issued capital and all other equity reserves attributable
to the equity holders of the parent, which at 30 June 2020 was $7,537,625 (30 June 2019: $19,905,274). The primary
objective of the Group’s capital management is to maximise the shareholder value.
Key estimates and assumptions
As described in the accounting policy above, the Group uses valuation techniques that include inputs that are not based on
observable market data to estimate the fair value of certain types of financial instruments. Key assumptions used in the
determination of the fair value of financial instruments, as well as the detailed sensitivity analysis for these assumptions are
set out above.
The directors believe that the chosen valuation techniques and assumptions used are appropriate in determining the fair
value of financial instruments.
The Group assesses at each reporting date whether there is objective evidence that an investment or a group of investments
is impaired. In the case of equity investments classified as FVOCI, objective evidence would include a significant or
prolonged decline in the fair value of the investment below its cost. The determination of what is “significant” or “prolonged”
requires judgement. “Significant” is evaluated against the original cost of the investment and “prolonged” against the period
in which the fair value has been below its original cost.
61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
19. REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
The auditor of Avenira Limited is Ernst & Young Australia.
Auditor remuneration
Fees to Ernst & Young (Australia)
Auditing the statutory financial report of the parent covering the group
and any controlled entities
Assurance services that are required by legislation to be provided by
the auditor
Other Assurance and agreed-upon-procedure services under other
legislation or contractual arrangements where there is discretion as to
whether the service is provided by the auditor or another firm
Other Services
Tax Compliance
Total fees to Ernst & Young (Australia) (A)
Fees to other overseas member firm of Ernst & Young (Australia) (B)
Total Auditor Remuneration (A+B)
2020
$
2019
$
92,410
112,583
-
-
9,038
21,761
14,000
115,448
-
6,000
140,344
-
115,448
140,344
From time to time the Group may decide to employ the external auditor on assignments additional to their statutory audit
duties where the auditor’s expertise and experience with the Group is important.
The Board has considered the position and is satisfied that the provision of non-audit services is compatible with the general
standard of independence imposed by the Corporations Act 2001.The nature of services provided to the Group during the
period by Ernst & Young and other practices do not compromise the general principles relating to auditor independence
because they relate to tax advice in relation to domestic and international compliance issues, and due diligence services
which involved the provision of assurances arising from their engagement.
20. CONTINGENCIES
In relation to tenement acquisition agreements entered into by the Group, the following additional cash may be received
dependent on future events:
TNT Mines Royalty Deed
The parent entity will receive a royalty on a quarterly basis on all product sold, removed or otherwise disposed from all
tenements held by TNT Mines. The royalty is calculated at 1.5% of the net smelter return and the total amount receivable is
capped at $5,000,000. In December 2019, A Deed of Assignment and Assumption was signed with TNT Mines Limited
assigning and to TinOne Resources Corporation assuming the obligations of the Principal Agreement (Tenement Sale
Agreement).
The Directors are of the opinion that it is not practicable to estimate the financial effect at the date of this report.
62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
21. COMMITMENTS
The Group has certain commitments to meet minimum expenditure requirements on the mineral exploration assets for the
Wonarah project and Jundee South project areas that it has an interest in. Outstanding exploration commitments are as
follows:
(a) Exploration commitments
Within one year
Later than one year but no later than five years
Later than five years
(b) Mine development commitments
Within one year
Later than one year but no later than five years
Later than five years
Development expenditure contracted for at reporting date but not recognised
as liabilities
2020
$
2019
$
398,609
994,596
64,832
131,613
114,151
-
1,458,037
245,764
2020
$
2019
$
-
-
-
-
217,350
652,051
2,348,866
3,218,267
The mine development commitments at 30 June 2019 related to the Baobab Phosphate Project.
The Group has an office lease contract as at 30 June 2020. The future lease payments for this non-cancellable lease
contract is $40,467, later than one year but no later than five $58,616.
22. DIVIDENDS
No dividends were paid during the financial year. No recommendation for payment of dividends has been made.
63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
23. RELATED PARTY TRANSACTIONS
(a) Parent entity
The ultimate parent entity within the Group is Avenira Limited. The consolidated entity has a related party relationship with its
subsidiaries (see Note 24) and with its key management personnel.
(b) Subsidiaries
Interests in subsidiaries are set out in Note 24.
(c) Compensation of key management personnel
Short-term benefits
Long-term benefits
Post-employment benefits
Termination payments
Share-based payments
(d) Transactions with key management personnel
Other directors’ interest (i)
2020
$
813,419
-
16,932
146,207
374,051
2019
$
1,340,262
6,710
29,137
-
(40,721)
1,350,609
1,335,387
2020
2019
$
122,550
122,550
$
134,713
134,713
(i)
In addition to his Executive Chairman fee, Mr. Clark was engaged to provide the Company strategic advisory services on a consulting basis during the
period. Total consultancy fees of $117,125 (2019: $134,713) were charged by Mr. Clark during the year. The agreement had no fixed term and no
termination notice period however ceased once appointed Executive Chairman and CEO 5 December 2019. A further $5,425 was also paid to Mr.
Clark for fees relating to an interim office lease from the period 1 September to 30 November 2019. The total amount of fees is included in his Salary
& Fees amount in the Details of Remuneration of KMP table on page 19. At 30 June 2020, advisory and lease fees paid to Mr. Clark impacted the
Statement of Profit and Loss and Other Comprehensive Income with $122,550 recognised in Administrative and Other Expenses. There was no
impact on the 30 June 2020 Statement of Financial Position.
(e)
Loans from key management personnel
The Group received the following loans from KMP or their related parties during the 2020 financial year (2019: $674,709):
2020
LENDER
BALANCE AT
START OF THE
YEAR
LOAN
PROCEEDS
RECEIVED
INTEREST
CHARGED
FORGIVEN
DURING
THE YEAR
$
$
$
$
FX
IMPACT
$
BALANCE
AT END OF
THE YEAR
HIGHEST
BALANCE DURING
THE YEAR
$
$
Agrifos Partners LLC(i)
366,436
-
11,754
(386,250)
8,060
-
386,250
(i) Agrifos Partners LLC is a company related through the common control of former director Mr. Timothy Cotton
On 27 September 2019, the Company obtain an extension to the maturity of the Shareholder Loans, extending the maturity
date to 21 October 2019. The loan was forgiven as part of the consideration in the Baobab Transaction Sale. Refer to Note
11 for details.
2019
LENDER
BALANCE AT START
OF THE YEAR
LOAN
PROCEEDS
RECEIVED
INTEREST
CHARGED
FX
IMPACT
REPAID
DURING
THE
YEAR
BALANCE
AT END OF
THE YEAR
HIGHEST
BALANCE DURING
THE YEAR
$
$
$
$
$
Agrifos Partners LLC(i)
366,436
(i) Agrifos Partners LLC is a company related through the common control of directors Mr. Timothy Cotton and former Director Mr. Frank Chaouni.
366,436
352,262
10,057
4,117
-
-
64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
24. SUBSIDIARIES
Accounting policies
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in Note 2:
SUBSIDIARIES
COUNTRY OF
INCORPORATION
CLASS OF
SHARES
Minemakers Australia Pty Ltd
Minemakers (Iron) Pty Ltd (iii)
Minemakers (Nickel) Pty Ltd (iii)
Minemakers (Salt) Pty Ltd (iii)
Minemakers (Gold) Pty Ltd (iii)
Bonaparte Diamond Mines Pty Ltd
Avenira Gold Pty Ltd
Baobab Fertilizer Africa (iv)
Baobab Mining and Chemicals Corporation SA (iv)
Gadde Bissik Phosphate Operations Suarl (iv)
Avenira Holdings LLC (ii)
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Mauritius
Senegal
Senegal
USA
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
(i) The proportion of ownership interest is equal to the proportion of voting power held.
(ii) The company’s equity represented by an initial capital contribution by Avenira as the sole member.
(iii) Company’s deregistered 10 March 2020.
(iv) Company’s disposed on 22 October 2019.
Transactions with non-controlling interests
Portion of equity interest held by non-controlling interests
COUNTRY OF
INCORPORATION
Baobab Mining and Chemicals Corporation SA
Senegal
Accumulated balance of material non-controlling interest
Baobab Mining and Chemicals Corporation SA
Loss allocated to material non-controlling interest
Baobab Mining and Chemicals Corporation SA
EQUITY HOLDING(i)
2020
$
100
-
-
-
-
100
100
-
-
-
100
2019
$
100
100
100
100
100
100
-
100
80
80
100
2020
$
2020
$
2020
$
2019
$
-
20%
2019
$
-
(3,427,261)
2019
$
-
8,043,052
65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
25. EVENTS OCCURING AFTER THE BALANCE DATE
Following the end of the financial year, the Company undertook a share placement and entitlement issue to raise
approximately $3.4 million.
$1,158,543 was raised (before costs) through a 2 for 7 entitlements issue at $0.008 per share (Entitlement).
$2,218,240 million was raised through a placement of 277,280,000 shares to sophisticated investors (Placement) at $0.008
per share.
Other than as disclosed above, no event has occurred since 30 June 2020 that would materially affect the operations of the
Group, the results of the Group or the state of affairs of the Group not otherwise disclosed in the Group’s financial statements.
66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
26. STATEMENT OF CASHFLOWS
Reconciliation of net loss after income tax to net cash outflow from operating activities
2020
$
2019
$
Net loss from continuing operations
Net loss from discontinuing operations
Adjustment for non-cash items
Depreciation of plant and equipment
Share based payment expense
Net foreign currency loss/(gain)
Amortisation of intangibles
Impairment of exploration and evaluation expenditure
Impairment of financial assets
Impairment of capitalised mine development expenditure
Impairment of property plant and equipment
Disposal of intangibles loss/(gain)
Impairment / (impairment reversal) of Doubtful debts
Change in operating assets and liabilities,
net of effects from purchase of controlled entities
Increase in trade and other receivables
Increase/(decrease) in trade and other payables
Increase (decrease) in provisions
Decrease in deferred tax liabilities
(3,395,173)
(2,274,543)
(3,084,624)
(40,355,098)
22,283
374,051
(607)
-
596,960
-
-
-
47,129
-
66,119
720,894
136,593
-
19,421
(40,833)
(146,519)
449,703
3,028,186
139,838
34,823,608
628,409
-
896,095
545,513
2,848,008
(606,923)
(3,311,274)
(4,165,860)
Net cash outflow from operating activities from operating activities
(3,706,295)
Change in liabilities from financing activities
Interest bearing loans &
borrowings -
Shareholder loans
Lease liabilities
Opening
balance
1-Jul-19
Additions
during the
year
Interest
accrued
FX Impact
Payments
Forgiven
during the
period
Closing
balance
30-Jun-20
1,317,984
-
42,656
28,644
-
(1,389,284)
-
-
104,599
3,611
-
(16,408)
-
91,802
1,317,984
104,599
46,267
28,644
(16,408)
(1,389,284)
91,802
27. EARNINGS PER SHARE
Accounting Policies
Basic earnings per share
Basic earnings per share is calculated by dividing the loss attributable to owners of the Company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the year.
67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
27. EARNINGS PER SHARE (continued)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
(a) Reconciliation of earnings used in calculating loss per share
Loss attributable to the owners of the Company used in calculating basic and
diluted loss per share
(b) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in
calculating basic loss per share
Weighted average number of ordinary shares used in calculation of diluted loss
per share
(c) Effects of anti-dilution from
Unlisted options
Share rights
2020
$
2019
$
(5,312,588)
(35,396,670)
2020
2019
NUMBER OF
SHARES
NUMBER OF
SHARES
632,041,733
1,024,675,297
680,041,733
1,104,675,297
48,000,000
80,000,000
-
-
Between the reporting date and the date of authorisation of these financial statements no additional securities were issued
that could potentially dilute basic loss per share in the future.
28.
SHARE BASED PAYMENTS
Accounting Policies
The Group provides benefits to employees (including directors) of the Group in the form of share-based payment transactions,
whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’). The cost of
these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are
granted. The fair value is determined by an internal valuation using a Black-Scholes option pricing model and Monte Carlo
methodology as appropriate.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to
the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the number of options or performance rights that, in the opinion of the
directors of the Group, will ultimately vest. This opinion is formed based on the best available information at balance date. No
adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included
in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market
condition.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not
yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award.
68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
28. SHARE BASED PAYMENTS (continued)
(a) Performance Rights Plan
There were no performance rights granted during the year ended 30 June 2020 (2019: Nil)
(b) Options
In December 2019, 48,000,000 options were issued to the Directors pursuant to shareholder approval received at the 2019
AGM. Options were issued in two tranches with a different exercise price for each tranche being 2 cents and 3 cents, and
all have an expiry date of 30 November 2022.
All options granted by the Company carry no dividend or voting rights. When exercisable, each option is convertible into one
ordinary share of the Company with full dividend and voting rights.
The below table summarises the number and movement in options granted and their weighted average prices:
Outstanding at the beginning of the year
Granted
Exercised
Expired
Outstanding at the end of the year
Exercisable at the end of the year
AVENIRA LIMITED
AVENIRA LIMITED
2020
2019
NUMBER OF
OPTIONS
80,000,000
48,000,000
-
(80,000,000)
48,000,000
48,000,000
WEIGHTED
AVERAGE
EXERCISE PRICE
$0.25
NUMBER OF
OPTIONS
80,000,000
WEIGHTED
AVERAGE
EXERCISE PRICE
$0.25
$0.025
-
$0.25
$0.025
-
-
-
80,000,000
80,000,000
-
-
-
$0.25
$0.25
The weighted average remaining contractual life of share options outstanding at the end of the financial year was 2.42 years,
and the exercise prices range from 2 cents to 3 cents. All options issued during the year were valued using the Black-Scholes
option pricing model. The fair value of the options granted during the 2020 year was estimated on the date of grant using the
following inputs:
Options issued
Measurement date
Exercise price (cents)
Fair value at grant date
Volatility
Risk free rate
Expiry date
2020
TRANCHE 1
TRANCHE 2
24,000,000
24,000,000
29/11/2019
24/11/2019
$0.02
0.008
100%
0.65%
$0.03
0.007
100%
0.65%
30/11/2022
30/11/2022
Historically volatility has been used as the basis for determining expected share price volatility as it assumed that this is
indicative of future trends, which may not eventuate
Fair value of options that were granted or vested to directors and recognised in the
profit or loss statement
$201,903
$172,148
Key estimates and assumptions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by an internal valuation using a Black- Scholes
option pricing model using the assumptions detailed above.
69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2020
29. PARENT ENTITY INFORMATION
The following information relates to the parent entity, Avenira Limited, at 30 June 2020. The information presented here
has been prepared using accounting policies consistent with Group accounting policies.
(a) Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Asset Position
Equity
Contributed equity
Reserves:
-
-
-
Share based payments
Performance rights
Financial assets at FVOCI
Accumulated losses
Total equity
(b) Financial performance
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
2020
$
2019
$
1,381,063
300,088
968,582
21,710,164
2,349,645
22,010,252
458,287
2,104,978
-
-
458,287
2,104,978
1,891,358
19,905,274
137,337,162
142,280,148
16,993,728
16,619,677
603,701
67,882
603,701
-
(153,111,114)
(139,598,016)
1,891,358
19,905,274
(13,513,098)
(34,510,016)
-
-
(13,513,098)
(34,510,016)
(c) Details of any contingent liabilities of the parent entity
The parent entity does not have any contingent liabilities at 30 June 2020.
(d) Details of any commitments by the parent entity for the acquisition of property, plant and equipment
There are no contractual commitments by the parent entity for the acquisition of property, plant and equipment as at
reporting date.
70
DIRECTORS’ DECLARATION
The Directors declare that:
1. The financial statements and notes set out on pages 27 to 70 are in accordance with the Corporations Act 2001,
including:
a. complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
reporting requirements; and
b. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of their
performance for the financial year ended on that date;
2.
In their 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; and
3. A statement that the attached financial statements are in compliance with International Financial Reporting
Standards has been included in the notes to the financial statements.
The directors have been given the declarations by the chief executive officer and chief financial officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Brett Clark
Executive Chairman
Perth, 9 September 2020
71
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the members of Avenira Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Avenira Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30
June 2020, the consolidated statement of profit and loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, notes to the financial statements, including a summary of significant accounting policies,
and the Directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a)
giving a true and fair view of the consolidated financial position of the Group as at 30 June
2020 and of its consolidated financial performance for the year ended on that date; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
GB:JG:AEV:061
1.
Impairment assessment of Wonarah exploration and evaluation expenditure
Why significant
How our audit addressed the key audit matter
Assessment of the carrying value of
exploration and evaluation assets for
impairment can be subjective, based on the
Group’s tenure, ability to perform ongoing
expenditure and whether there is sufficient
information for a decision to be made that
the area of interest is not commercially
viable. Accordingly, this was considered to
be a key audit matter.
As disclosed in Note 12 to the financial
statements, an impairment test was
performed in relation to the Group’s
Wonarah project at 30 June 2020 and an
impairment of $0.6 million was recognised.
In determining a recoverable amount for the
Wonarah project, the Group relied upon an
independent expert valuation for which the
primary inputs were not directly market
observable, and contained a degree of
subjectivity.
Our audit procedures included the following:
► Considered the Group’s right to explore in
the relevant exploration area, which
included obtaining and assessing
supporting documentation such as license
agreements.
► Evaluated the competency and objectivity
of experts who prepared the independent
valuation of the resources contained in the
Wonarah area of interest, by considering
their professional qualifications and
expertise.
► Considered whether the exploration
activities within the Wonarah area of
interest had reached a stage where a
commercially viable resource estimate
could be made, which included obtaining
and assessing supporting documentation
such as the Group’s announcements to the
Australian Stock Exchange in relation to its
mineral resource reserve.
► Involved our valuation specialists to
provide input on key assumptions,
including resource multiples, made by the
independent expert in arriving at their
preferred valuation.
► Assessed the adequacy of the disclosures
in the financial statements.
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Liability limited by a scheme approved under Professional Standards Legislation
2. Sale of Baobab and Novaphos Inc. interests
Why significant
How our audit addressed the key audit matter
As disclosed in Note 11, on 1 July 2019
Avenira announced that it proposed to sell
its interests in the Baobab Phosphate
Project and Novaphos Inc. to a consortium
of Avenira’s major shareholders
On 14 October 2019 shareholder approval
for the sale was received and the
transaction was completed on 22 October
2019.
We considered the sale of the Group’s
interests in Baobab and Novaphos a key
audit matter because of their size,
complexity and the judgment required in
calculating certain amounts included in the
loss on disposal.
Our audit procedures included the following:
► Obtained and read the key documents
associated with the sale to identify the
terms relevant to the transaction.
► Tested the loss on disposal by reconciling
the consideration to the Share Purchase
Agreement (SPA) and bank accounts.
► Verified the net assets disposed of to
underlying accounting records and
challenged the Group’s measurement of
assets and liabilities disposed of.
► Assessed the treatment of foreign exchange
gains that were recycled from the Foreign
Currency Translation Reserve to the profit
or loss.
► Assessed the adequacy of the disclosure in
the financial statements.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the
information included in the Group’s Annual Report for the year ended 30 June 2020, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the Directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
►
►
►
►
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Directors
Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group
to cease to continue as a going concern
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
We communicate with the Directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated to the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the Directors' report for the year ended 30
June 2020.
In our opinion, the Remuneration Report of Avenira Limited for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Gavin Buckingham
Partner
Perth
9 September 2020
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
ASX ADDITIONAL INFORMATION
Additional information required by Australian Securities Exchange Ltd and not shown elsewhere in this report is as
follows. The information is current as at 8 September 2020.
(a) Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
ORDINARY SHARES
NUMBER OF
HOLDERS
357
602
685
1,433
557
3,634
NUMBER OF
SHARES
72,047
2,110,972
5,461,266
49,145,861
806,062,672
862,852,818
The number of equity security holders holding less than a marketable parcel of
securities are:
2,564
26,103,623
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted ordinary shares are:
Top Holders Snapshot - Grouped
Rank
Name
Units
% Units
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
AU XINGAO INVESTMENT PTY LTD
ANOVA METALS LIMITED
MCNEIL NOMINEES PTY LIMITED
AWAKENING INVESTMENT PTY LTD
MRS VINEETA GUPTA
MR GIOVANNI DEL CONTE
SOCIETE DE POLYSERVE POUR LES ENGRAIS ET PRODUITS
CHIMIQUES SA\C
SAILORS OF SAMUI PTY LTD
MR MICHAEL ANDREW WHITING + MRS TRACEY ANNE WHITING
FANNUCCI PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
GLOWSHORE PTY LTD
NURRAGI INVESTMENTS PTY LTD
LONGRIDGE PARTNERS PTY LTD
BLAMNCO TRADING PTY LTD
MR ADAM MARK MITCHELL
MR ALAN LINDSAY CONIGRAVE
HARBOUR VIEW CAPITAL PTY LTD
MR BRETT WILMOTT
OCTIFIL PTY LTD
87,359,226
35,762,303
26,327,723
21,597,005
20,733,821
14,849,612
14,703,962
14,380,022
14,226,366
13,444,474
10,640,766
9,714,645
9,206,116
8,959,409
8,604,464
8,356,865
7,702,231
7,377,790
7,153,567
6,392,650
10.12
4.14
3.05
2.50
2.40
1.72
1.70
1.67
1.65
1.56
1.23
1.13
1.07
1.04
1.00
0.97
0.89
0.86
0.83
0.74
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total)
Total Remaining Holders Balance
347,493,017
515,359,801
40.27
59.73
78
(c) Substantial shareholders
Name
Units
% Units
AU XINGAO INVESTMENT PTY LTD
87,359,226
10.12
(d) Unquoted Equity Securities
The Company has 85,000,000 unquoted options on issue.
Grant Date
Date of Expiry
Exercise Price
Number under
No of Holders
29 November 2019
30 November 2022
29 November 2019
30 November 2022
07 September 2020
07 September 2023
07 September 2020
07 September 2023
$0.02
$0.03
$0.025
$0.035
Option
24,000,000
24,000,000
6,000,000
6,000,000
60,000,000
3
3
1
1
(e) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
(f) Company Secretary, registered and principal administrative office and share registry
Details can be found in the Corporate Information on page 3 of the Annual Report.
(g) Schedule of interest in mining tenements
LOCATION
Arruwurra, Northern Territory
Dalmore, Northern Territory
Central Wonarah, Northern Territory
East Murchison, Western Australia
East Murchison, Western Australia
East Murchison, Western Australia
East Murchison, Western Australia
TENEMENT
EL29840
EL29849
EL32359
EL53/2078
EL53/2049
EL53/1856
EL53/1859
PERCENTAGE HELD /
EARNING
100
100
100
100
100
100
100
79